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A newly funded startup, Internal, says it wants to help companies better manage their internal consoles

By Connie Loizos

Uber and Facebook and countless other companies that know an awful lot about their customers have found themselves in hot water for providing broad internal access to sensitive customer information.

Now, a startup says its “out-of-the-box tools” can help protect customers’ privacy while also saving companies from themselves. How? With a software-as-a-service product that promises to help employees access the app data they need — and only the app data they need. Among the features the company, Internal, is offering, are search and filtering, auto-generated tasks and team queues, granular permissioning on every field, audit logs on every record and redacted fields for sensitive information.

Whether the startup can win the trust of enterprises is the biggest question for the company, which was created by Arisa Amano and Bob Remeika, founders who last year launched the blockchain technology company Harbor. The two also worked together previously at two other companies: Zenefits and Yammer.

All of these endeavors have another person in common, and that’s David Sacks, whose venture firm, Craft Ventures, has just led a $5 million round in Internal. Sacks also invested last year in Harbor; he was an early investor in Zenefits and took over during troubled times as its CEO for less than a year; he also founded Yammer, which sold to Microsoft for $1.2 billion in cash in 2012.

All of the aforementioned have been focused, too, on making it easier for companies to get their work done, and Amano and Remeika have built the internal console at all three companies, which is how they arrived at their “aha” moment last year, says Amano. “So many companies build their consoles [which allow users advanced use of the computer system they’re attached to] in a half-hearted way; we realized there was an opportunity to build this as a service.”

“Companies never dedicate enough engineers to [their internal consoles], so they’re often half broken and hard to use and they do a terrible job of limiting access to sensitive customer data,” adds Remeika. “We eliminate the need to build these tools altogether, and takes just minutes to get set up.”

Internal Screens 1

Starting today, companies can decide for themselves whether they think Internal can help their employees interact with their customer app data in a more secure and compliant way. The eight-person company has just made the product available for a free trial.

Naturally, Amano and Remeika are full of assurances why companies can trust them. “We don’t store data,” says Amano. “That resides on the [customer’s] servers. It stays in their database.” Internal’s technology instead “understands the structure of the data and will read that structure,” offers Remeika, who says not to mistake Internal for an analytics tool. “Analytics tools commonly provide a high-level overview; Internal is giving users granular access to customer data and letting you debug problems.”

As for competitors, the duo say their most formidable opponent right now is developers who throw up a data model viewer that has complete access to everything in a database, which may be sloppy but happens routinely.

Internal isn’t disclosing its pricing publicly just yet, but it says its initial target is non-technical users, on operations and customer support teams, for example.

As for Harbor (we couldn’t help but wonder why they’re already starting a new company), they say it’s in good hands with CEO Josh Stein, who was previously general counsel and chief compliance officer at Zenefits (he was its first lawyer) and who joined Harbor in February of last year as its president. Stein was later named CEO.

In addition to Craft Ventures, Internal’s new seed round comes from Pathfinder, which is Founders Fund’s early-stage investment vehicle, and other, unnamed angel investors.

YC’s Earth AI closes funding for its platform to make mining less wasteful

By Mike Butcher

Discovering and drilling for the important minerals used for industry and the technology sector remains incredibly important as existing mines are becoming depleted. If the mining industry can’t become more efficient at finding these important deposits, then more unnecessary, harmful drilling and exploration takes place. Applying AI to this problem would seem like a no-brainer for the environment.

Andreessen Horowitz knows this, as they invested in KoBold Metals. GoldSpot Discoveries is a competitor.

Joining this field is now Earth AI, a mineral targeting startup which is using AI to predict the location of new ore bodies far more cheaply, faster, and with more precision (it claims) than previous methods.

It’s now closed a funding round of ‘up to’ $2.5 million from Gagarin Capital, A VC firm specializing in AI, and Y Combinator, in the latter’s latest cohort announced this week. Previously, Earth AI had raised $1.7 million in two seed rounds from Australian VCs, AirTree Ventures and Blackbird Ventures and angel investors.

The startup uses machine learning techniques on global data, including remote sensing, radiometry, geophysical and geochemical datasets, to learn the data signatures related to industrial metal deposits (from gold, copper, and lead to rare earth elements), train a neural network, and predict where high-value mineral prospects will be.

In particular, it was used to discover a deposit of Vanadium, which is used to build Vanadium Redox Batteries that are used in large industrial applications. Finding these deposits faster using AI means the planet will thus benefit faster from battery technology.

In 2018, Earth AI field-tested remote unexplored areas and claims to have generated a 50X better success rate than traditional exploration methods, while spending on average $11,000 per prospect discovery. In Australia, for instance, companies often spend several million dollars to arrive at the same result.

Jared Friedman, YCombinator partner comented in a statement: “The possibility of discovering new mineral deposits with AI is a fascinating and thought-provoking idea. Earth AI has the potential not just to become an incredibly profitable company, but to reduce the cost of the metals we need to build our civilization, and that has huge implications for the world.”

“Earth AI is taking a novel approach to a large and important industry — and that approach is already showing tremendous promise”, Mikhail Taver, partner at Gagarin Capital said.

Earth AI was founded by Roman Tesyluk, a geoscientist with eight years of mineral exploration and academic experience. Prior to starting Earth AI, he was a PhD Candidate at The University of Sydney, Australia and obtained a Master’s degree in Geology from Ivan Franko University, Ukraine. “EARTH AI has huge ambitions, and this funding round will supercharge us towards reaching our milestones,” he said.

This latest investment from Gagarin Capital joins a line of other AI-based products and services and investments it’s made into YC companies, such as Wallarm, Gosu.AI and CureSkin. Gagarin’s exits include MSQRD (acquired by Facebook), and AIMatter (acquired by Google).

ClearBrain launches analytics tools focused on connecting cause and effect

By Anthony Ha

Businesses need to understand cause and effect: Someone did X and it increased sales, or they did Y and it hurt sales. That’s why many of them turn to analytics — but Bilal Mahmood, co-founder and CEO of ClearBrain, said existing analytics platforms can’t answer that question accurately.

“Every analytics platform today is still based on a fundamental correlation model,” Mahmood said. It’s the classic correlation-versus-causation problem — you can use the data to suggest that an action and a result are related, but you can’t draw a direct cause-and-effect relationship.

That’s the problem that ClearBrain is trying to solve with its new “causal analytics” tool. As the company put it in a blog post, “Our goal was to automate this process [of running statistical studies] and build the first large-scale causal inference engine to allow growth teams to measure the causal effect of every action.”

You can read the post for (many) more details, but the gist is that Mahmood and his team claim they can draw accurate causal relationships where others can’t.

ClearBrain analytics screenshot

The idea is to use this in conjunction with A/B testing — customers look at the data to prioritize what to test next, and to make estimates about the impact of things that can’t be tested. Otherwise, Mahmood said, “If you wanted to measure the actual impact of every variable on your website and your app — the actual impact it has on conversation — it could take you years.”

When I wrote about ClearBrain last year, it was using artificial intelligence to improve ad targeting, but Mahmood said the company built the new analytics technology in response to customer demand: “People didn’t just want to know who was going to convert, they wanted to know why, and what caused them to do so.”

The causal analytics tool is currently available to early access users, with plans for a full launch in October. Mahmood said there will be a number of pricing tiers, but they’ll be structured to make the product free for many startups.

In addition to launching the analytics tool in early access, ClearBrain also announced this week that it’s raised an additional $2 million in funding from Harrison Metal and Menlo Ventures.

LA-based Upfront Ventures has two new general partners, bringing its GP count to eight

By Connie Loizos

Upfront Ventures, the 23-year-old, LA-based venture capital firm, is gearing up for far more deal-making.

In addition to filing paperwork with the SEC this summer to raise its third growth-stage investment fund (it is also investing a $400 million early-stage fund and probably announcing another soon), the firm just added two new general partners to its line-up of investors.

One of them, Michael Carney, joined Upfront as a principal in 2015, after working as an editor at the news site Pandodaily, and, before that, working as an investor and analyst at a boutique merchant bank called Worldvest.

The firm’s second new general partner is Aditi Maliwal, who has also circled in and out of investing before, including stints as an associate with Crosslink Capital and, more recently, spending several years with Google, where Maliwal worked in corporate development before becoming a project manager.

We talked with both this week to congratulate them, as well as to learn more about where they’ll be shopping — and from where.

For her part, Maliwal, who begins work at Upfront next month, says the idea is for her to eventually open a San Francisco office, though for now, she’ll be operating from the Bay Area out of a space that’s yet to be determined and spending every Monday or every other Monday down in L.A. with the rest of the team.

She got to know Upfront through another general partner, Kara Nortman, who joined Upfront in 2014 and who Maliwal would continue to see at events, as well as on the occasional trip to L.A. to see extended family. Maliwal says she also says she would observe on her trips that the “ecosystem in L.A. has really grown from 2014 to where it is today. I think the Bay Area continues to see how important it is, too.”

As for becoming an investor again, Maliwal says she was always interested in becoming a VC, thanks in part to a class taught at Stanford by renowned venture capitalist Heidi Roizen VC that inspired her. She says spending time with founders in her husband’s business school class at Stanford this past year whet her appetite anew. “There are four or five companies I’m close to and they’re good friends and when I was up at 11 pm working on a company idea with one of them earlier this year, I just realized that this is what gives me a lot of energy and this is a space I want to [get involved in again].”

She says she’ll mostly be focusing on business to business to consumer models, as well as SaaS applications, fintech, and, when the opportunity arises, consumer products. More broadly speaking, says Maliwal, she hopes to serve as a bridge for Bay Area startups looking for a foothold in the L.A. market and vice versa.

Meanwhile, Carney is, and will remain, more focused on later-stage bets that Upfront funded early on and whose success the firm wants to ensure (to the extent that any firm can).

Understandably, he sounds excited — still — about the work.

“In 2012, [when I was at Pandodaily] L.A. was crossing and inflection point, with a number of second- and third-time founders coming out of later-stage marquee companies. When I joined Upfront, it felt similar. It was an incredible platform, it was a year or two after the firm was rebranded [from GRP Ventures] and Kara had been there less than a year and [fellow general partner] Greg [Bettinelli] had been there maybe two years. The team was kind of maturing and I feel lucky to join when I did.”

Carney suggests the opportunities have only grown stronger, in his view of the later-stage world. “We’re definitely seeing [greater bifurcation] between the haves and have nots, with companies that can break out as clear leaders tending to have access to larger amounts of capital than in past years. For the best of the best, the conditions remain as favorable as possible, while it’s gotten harder for companies to raise capital that fail to hit those growth rates, even in good times.”

Being able to recruit employees from roles at top companies in the Bay Area is just one reason solid L.A. companies have attained more momentum. “I think that owes to the maturation of the L.A. ecosystem. I think people are drawn to L.A. because Silicon Valley, for all its incredible success in the tech sector, is an industry town and L.A. has a more diverse economy and ecosystem. But also, five years ago, people would ask themselves, ‘If this new role [in L.A.] doesn’t work out, what do I do next?’ And I think the answer to that question is much clearer and more positive today.”

According to Upfront, 40 percent of its initial checks are written to companies based in L.A., though it has bets in other parts of the U.S. and world. Some of the best-known deals in its current portfolio include the scooter company Bird, the sneaker marketplace GOAT, and the online resale store ThredUp. Upfront was also an investor in Ring, the smart doorbell company acquired early last year by Amazon for $1 billion.

In addition to Maliwal, Carney, Nortman and Bettinelli, the firm is managed by general partners Kobie Fuller, Kevin Zhang, Mark Suster and founder Yves Sisteron.

Cloudflare files for initial public offering

By Jonathan Shieber

After much speculation and no small amount of controversy, Cloudflare, one of the companies that ensures that websites run smoothly on the internet, has filed for its initial public offering.

The company, which made its debut on TechCrunch’s Battlefield stage back in 2010, has put a placeholder value of the offering at $100 million, but it will likely be worth billions when it finally trades on the market.

Cloudflare is one of a clutch of businesses whose job it is to make web sites run better, faster and with little to no downtime.

Recently the company has been at the center of political debates around some of the customers and company it keeps, including social media networks like 8Chan and racist media companies like the Daily Stormer.

Indeed, the company went so far as to cite 8Chan as a risk factor in its public offering documents.

As far as money goes, Cloudflare is — like other early-stage technology companies — losing money. But it’s not losing that much money, and its growth is impressive.

As the company notes in its filing with the Securities and Exchange Commission:

We have experienced significant growth, with our revenue increasing from $84.8 million in 2016 to $134.9 million in 2017 and to $192.7 million in 2018, increases of 59% and 43%, respectively. As we continue to invest in our business, we have incurred net losses of $17.3 million, $10.7 million, and $87.2 million for 2016, 2017, and 2018, respectively. For the six months ended June 30, 2018 and 2019, our revenue increased from $87.1 million to $129.2 million, an increase of 48%, and we incurred net losses of $32.5 million and $36.8 million, respectively.

Cloudflare sits at the intersection of government policy and private company operations and its potential risk factors include a discussion about what that could mean for its business.

The company isn’t the first network infrastructure service provider to hit the market. That distinction belongs to Fastly, whose shares likely have not performed as well as investors would have liked.

Screen Shot 2019 08 15 at 10.10.17 AM

Cloudflare has raised roughly $332 million to date from investors, including Franklin Templeton Investments, Fidelity, Union Square Ventures, New Enterprise Associates, Pelion Venture Partners and Venrock. Business Insider reported that the company’s last investment gave Cloudflare a valuation of $3.2 billion.

The company will trade on the New York Stock Exchange under the ticker symbol “NET.” Underwriters on the company’s public offering include Goldman Sachs, Morgan Stanley, JP Morgan, Jefferies, Wells Fargo Securities and RBC Capital Markets.

Birth control delivery startup Nurx approaches $300M valuation

By Kate Clark

Nurx, citing 200,000 current patients and a monthly growth rate as high as 20%, has raised $32 million in Series C equity funding in a round co-led by existing investors Kleiner Perkins and Union Square Ventures. The company has also secured $20 million in debt financing, bringing total new capital to $52 million.

The San Francisco-based digital health startup, which seeks to make birth control more accessible and affordable by shipping it direct to consumers, has raised more than $90 million in debt and equity funding to date, with the latest infusion bringing its valuation to nearly $300 million, according to stock authorization filings uncovered by PitchBook. Nurx declined to comment on its valuation.

The goal, Nurx chief executive officer Varsha Rao explains, is to become a telehealth platform focused on all sensitive health needs.

“We see there is a need to help people that may have issues that often carry stigma and judgment by providing a streamlined platform,” Rao tells TechCrunch. “What the company is doing in terms of providing more accessibility from a physical and economic perspective to critical health services is very inspiring for me.”

The fresh bout of funding comes four months after a scathing New York Times report highlighted irresponsible practices at the company, including reshipping returned medications and attempting to revise medical policy on birth control for women over the age of 35.

Nurx’s Rao, who joined from Clover Health just one week before the article was published, says she feels good about how the company has scaled: “I want to make it clear, patient safety was never at risk even then; having said that, we are super committed to always investing in compliance and patient safety and all of the things that are important.”

The business plans to use the funding to double its engineering team and launch additional “sensitive” healthcare services, of which Rao declined to further outline. In addition to shipping birth control D2C, including the pill, shot, ring and patch, Nurx provides emergency contraception, STI and HPV testing and screening kits, and PrEP medication, the once-daily pill that reduces the risk of getting HIV.

The company added STI testing kits to its line up last month and has since performed tests for 1,000 patients, Nurx says.

Nurx’s service is currently live in 26 states and Washington, D.C. The company plans to be accessible to 90% of the U.S. population by the end of the year, with additional launches, including the state of Nebraska, expected this month.

A graduate of Y Combinator, Nurx investors also include Reproductive Health Investors Alliance, Dreamers VC, Lowercase Capital and debt and equity provider Triple Point Capital.

Flatfair, the ‘deposit-free’ renting platform, raises $11M led by Index Ventures

By Steve O'Hear

Flatfair, a London-based fintech that lets landlords offer “deposit-free” renting to tenants, has raised $11 million in funding.

The Series A round is led by Index Ventures, with participation from Revolt Ventures, Adevinta, Greg Marsh (founder of Onefinestay), Jeremy Helbsy (former Savills CEO) and Taavet Hinrikus (TransferWise co-founder).

With the new capital, Flatfair says it plans to hire a “significant” number of product engineers, data scientists and business development specialists.

The startup will also invest in building out new features as it looks to expand its platform with “a focus on making renting fairer and more transparent for landlords and tenants.”

“With the average deposit of £1,110 across England and Wales being just shy of the national living wage, tenants struggle to pay expensive deposits when moving into their new home, often paying double deposits in between tenancies,” Flatfair co-founder and CEO Franz Doerr tells me when asked to frame the problem the startup has set out to solve.

“This creates cash flow issues for tenants, in particular for those with families. Some tenants end up financing the deposit through friends and family or even accrue expensive credit card debt. The latter can have a negative impact on the tenant’s credit rating, further restricting important access to credit for things that really matter in a tenant’s life.”

To remedy this, Flatfair’s “insurance-backed” payment technology provides tenants with the option to pay a per-tenancy membership fee instead of a full deposit. They do this by authorising their bank account via debit card with Flatfair, and when it is time to move out, any end-of-tenancy charges are handled via the Flatfair portal, including dispute resolution.

So, for example, rather than having to find a rental deposit equivalent to a month’s rent, which in theory you would get back once you move out sans any end-of-tenancy charges, with Flatfair you pay about a quarter of that as a non-refundable fee.

Of course, there are pros and cons to both, but for tenants that are cashflow restricted, the startup’s model at least offers an alternative financing option.

In addition, tenants registered with Flatfair are given a “trust score” that can go up over time, helping them move tenancy more easily in the future. The company is also trialing the use of Open Banking to help with credit checks by analysing transaction history to verify that you have paid rent regularly and on time in the past.

Landlords are said to like the model. Current Flatfair clients include major property owners and agents, such as Greystar, Places for People and CBRE. “Before Flatfair, deposits were the only form of tenancy security that landlords trusted,” claims Doerr.

In the event of a dispute over end-of-tenancy charges, both landlords and tenants are asked to upload evidence to the Flatfair platform and to try to settle the disagreement amicably. If they can’t, the case is referred by Flatfair to an independent adjudicator via mydeposits, a U.K. government-backed deposit scheme with which the company is partnering.

“In such a case, all the evidence is submitted to mydeposits and they come back with a decision within 24 hours,” explains Doerr. “[If] the adjudicator says that the tenant owes money, we invoice the tenant who then has five days to pay. If the tenant doesn’t pay, we charge their bank account… What’s key here is having the evidence. People are generally happy to pay if the costs are fair and where clear evidence exists, there’s less to argue about.”

More broadly, Doerr says there’s significant scope for digitisation across the buy-to-let sector and that the big vision for Flatfair is to create an “operating system” for rentals.

“The fundamental idea is to streamline processes around the tenancy to create revenue and savings opportunities for landlords and agents, whilst promoting a better customer experience, affordability and fairness for tenants,” he says.

“We’re working on a host of exciting new features that we’ll be able to talk about in the coming months, but we see opportunities to automate more functions within the life cycle of a tenancy and think there are a number of big efficiency savings to be made by unifying old systems, dumping old paper systems and streamlining cumbersome admin. Offering a scoring system for tenants is a great way of encouraging better behaviour and, given housing represents most people’s biggest expense, it’s only right renters should be able to build up their credit score and benefit from paying on time.”

Inside Voyage’s plan to deliver a driverless future

By Kirsten Korosec

In two years, Voyage has gone from a tiny self-driving car upstart spun out of Udacity to a company able to operate on 200 miles of roads in retirement communities.

Now, Voyage is on the verge of introducing a new vehicle that is critical to its mission of launching a truly driverless ride-hailing service. (Human safety drivers not included.)

This internal milestone, which Voyage CEO Oliver Cameron hinted at in a recent Medium post, went largely unnoticed. Voyage, after all, is just a 55-person speck of a startup in an industry, where the leading companies have amassed hundreds of engineers backed by war chests of $1 billion or more. Voyage has raised just $23.6 million from investors that include Khosla Ventures, CRV, Initialized Capital and the venture arm of Jaguar Land Rover.

Still, the die has yet to be cast in this burgeoning industry of autonomous vehicle technology. These are the middle-school years for autonomous vehicles — a time when size can be misinterpreted for maturity and change occurs in unpredictable bursts.

The upshot? It’s still unclear which companies will solve the technical and business puzzles of autonomous vehicles. There will be companies that successfully launch robotaxis and still fail to turn their service into a profitable commercial enterprise. And there will be operationally savvy companies that fail to develop and validate the technology to a point where human drivers can be removed.

Voyage wants to unlock both.

Crowded field

Keith Rabois, BoxGroup back New York-based Brex competitor

By Kate Clark

Considering its unparalleled success, it was only a matter of time before a Brex copycat emerged.

Ramp Financial, a new startup led by Capital One-acquired Paribus founders Eric Glyman and Karim Atiyeh (pictured), has raised $7 million, TechCrunch has learned. The capital came from Keith Rabois of Founders Fund, BoxGroup’s Adam Rothenberg and Coatue Management, a hedge fund that recently launched a $700 million early-stage investment vehicle.

Ramp Financial, Founders Fund, BoxGroup and Coatue Management declined to comment.

Ramp Financial is in the very early stages of product development, though we’re told, “It’s the same as Brex .” Other details available on the new startup, which raised on a pre-money valuation of $25 million, according to sources, are slim. Even its name may be subject to change.

Brex, founded in 2017 by a pair of now 23-year-olds, created a corporate charge card tailored for startups. The Y Combinator graduate doesn’t require cardholders to submit Social Security numbers or credit scores, granting entrepreneurs a new avenue to credit and method of protecting their credit scores. Brex’s software also expedites the time-consuming expense management, and accounting and budgeting processes for employees. Quickly, it has become essential to the company-building process in Silicon Valley.

It helps that VCs are wild for Brex. The startup has raised more than $300 million in VC funding in only two years. Most recently, it closed a $100 million round led by Kleiner Perkins at a valuation of $2.6 billion.

Given Brex’s rapid growth and the uptick in venture capital investment in challenger banks, or new financial services competing with incumbent financiers, we’re guessing Ramp Financial didn’t have a tough time pitching VCs. Plus, its founders Glyman and Atiyeh have a clear track record of success.

The duo previously built Paribus, a startup acquired by Capital One roughly one year after launching onstage at TechCrunch Disrupt New York 2015. Paribus, which raised just over $2 million from Slow Ventures, General Catalyst, Greylock and others before the M&A transaction, helps online shoppers get money back when prices drop on items they’ve purchased. Terms of Capital One’s acquisition were not disclosed.

Paribus is also a graduate of Y Combinator, completing the startup accelerator in the summer of 2015.

Aside from both completing Y Combinator, the founders of Brex and Ramp Financial share connections to the PayPal mafia. Rabois, a general partner at Founders Fund, was an executive at the business in the early 2000s. PayPal co-founders Peter Thiel and Max Levchin are Brex investors.

Opsani helps optimize cloud applications with AI

By Ron Miller

Opsani, a Redwood City, Calif. startup, wants to go beyond performance monitoring to continually optimizing cloud applications, using artificial intelligence to help the software learn what is the optimal state.

“We have come up with a machine learning technique centered around reinforcement learning to tune the performance of applications in the cloud,” company co-founder and CEO Ross Schibler told TechCrunch.

Schibler says each company has its own unique metrics and that’s what they try to optimize around. “We’re modifying these parameters around the resource, and we’re looking at the performance of the application. So in real time, what is the key business metric that the application is producing as a service? So it might be the number of transactions or it might be latency, but if it’s important to the business, then we use that,” he explained.

He claims that what separates Opsani from a monitoring tool like New Relic or AppDynamics is that they watch performance and then provide feedback for admins, but Opsani actually changes the parameters to improve the application performance in real time, based on what it knows about the application and what the developers want to optimize for.

It is also somewhat similar to a company like Spotinst, which optimizes for the cheapest cloud resources, but instead of simply trying to find the best price, Opsani is actually tuning the application.

The company recently announced a $10 million Series A investment led by Redpoint Ventures. Previous investors Zetta Ventures and Bain Capital also participated.

For now, it’s still early days for the startup. It has a dozen employees and a handful of customers, according to Schibler. With the recent $10 million round of funding, it should be able to hire more employees and continue refining the product.

Beynd gets $2M seed to improve customer experience with better onboarding

By Ron Miller

Customer experience is a term that gets bandied about quite a bit these days. If you can improve the customer experience, you can win more customers. Beynd, a Utah startup, wants to help by providing a better, more automated onboarding workflow. Today, it announced a $2 million seed round.

The round was led by Peak Ventures with participation from Prelude Ventures. The investors seem to be making a good bet. CEO and founder Peter Ord says the company has had a product for just 10 months, but already boasts 121 paying customers with 6800 users on the platform.

Ord says the company’s genesis began, like so many startup ideas, out of frustration he experienced at his previous job. Getting people started on the company’s software was too hard. He thought there had to be a better way, so he built it, and Beynd (pronounced Beyond) was born.

“They say the best companies start with the founders biggest frustration. One of my biggest frustrations at my previous job was that in my everyday life, I could order a pizza and know exactly when that pizza was ready. But when our customers bought our software, we had no thoughtful or meaningful way to help our customers understand when we were going to deliver that,” Ord told TechCrunch.

The customer starts by creating an onboarding workflow template. Each client has its own unique requirements. The first interactions are by email (or communication channel of choice) giving instructions on how to proceed. If the customer gets stuck, there is a button to email the project manager that there is a problem.

The solution includes tools for projected launch dates, so that customers can understand when a product will be ready (or service completed). It also includes an analytics tool, so that customers can understand which processes are most likely to stall.

The company actually uses its own software to onboard its customers. “We drink our own champagne, We use our own products. And so we’re extremely efficient in the way we onboard our customers because they get an immediate sense of how they use the tool through us using our tool to onboard them,” Ord explained.

The company had bootstrapped the business to this point. He says that his goal is to continue to run it as a real business, but the funding will help him expand his vision and improve the experience. He just doesn’t want to get too caught up in the funding culture. “There’s an interesting culture in the VC space where it’s all about raise as much as you can, as fast as you can, and I actually have kind of the opposite opinion, he said.

For now, he has $2 million to try and scale the business further, and he’ll get more only if he feels he needs it. “Let’s continue to prove out the model with this money, then let’s raise more if we have to,” he said.

Sperm storage startups are raising millions

By Kate Clark

A number of startups are bringing technology and innovation to the fertility industry, with a growing few focused specifically on male fertility.

“Society at large doesn’t understand the subject of fertility,” Tom Smith, the co-founder and chief executive officer of men’s sperm storage startup Dadi tells TechCrunch. “People see it as a female issue.”

Dadi has raised a $5 million seed extension led by The Chernin Group, a private equity fund that typically invests in media, with existing investors including London seed-fund Firstminute Capital and New York’s Third Kind Venture Capital also participating. The company, which sends at-home fertility tests and sperm storage kits, closed a $2 million seed round earlier this year.

Dadi’s funding event comes shortly after another men’s fertility business, Legacy, raised a $1.5 million round for its sperm testing and freezing service. Both companies hope to leverage venture capital funding to become the dominant men’s fertility brand.

Bain Capital Ventures -backed Legacy, which won TechCrunch’s Startup Battlefield competition at Disrupt Berlin 2018, allows men to get their sperm tested and frozen without visiting a clinic or meeting with a doctor. Founder and chief executive officer Khaled Kteily said the company, which is based out of the Harvard Innovation Labs in Boston, planned to use the capital to expand its sperm analysis and cryogenic storage services.

040319 AG WaPo Legacy Sperm Freezing 0016

Sarah Steinle, head of marketing, Khaled Kteily, founder and CEO, and Daniel Madero, head of clinic partnerships at Legacy .

Like many startups today, Dadi and Legacy are capitalizing on the direct-to-consumer business model to educate men about their fertility. Customers of both Dadi and Legacy simply order a DIY sperm collection kit online, collect a sperm sample and send it back to the company for a full fertility report. Both companies offer sperm storage services too. Dadi charges a total of $199.98 for its sperm testing kit and one year of sperm storage, while Legacy asks for $350 for clinical fertility analysis and lifestyle recommendations. To store your sperm in Legacy’s cryogenic storage facilities, it’s an additional $20 per month.

One in six couples struggles to get pregnant after one year of trying. According to the U.S. Department of Health & Human Services, one-third of the infertility cases amongst those couples are caused by fertility problems in men, another one-third of issues are connected to women and the remaining cases are a result of a combination of male and female fertility issues. By making sperm storage more accessible, startups hope to encourage a conversation around family planning and fertility among young men.

“Men also have a biological clock,” Smith said. “From your late 20s and onward, your overall sperm count absolutely declines and, more importantly, the number of mutations that can be passed on to that potential child grows.”

Dadi, a New York-based company, plans to use its latest bout of funding to continue developing a number of yet-to-be-announced products, as well as offer new support services to customers who’ve taken Dadi’s fertility tests: “If we are going to live up to our overall objective of being this encompassing business helping men through the fertility stack, the next step for us is investing in next-step support,” Smith explains.

Dadi’s founding team lacks experience in the healthcare sector, which is likely to pose problems as the company expands and forges partnerships in the greater healthcare field. Smith previously led a custom emoji business, Imoji, which was acquired by Giphy in 2017. Dadi co-founder Mackey Saturday, for his part, was previously a graphic designer responsible for creating Instagram’s logo.

Aiming to make up for its lack of expertise, Dadi has formed a Science and Technology Advisory Board with participation from Dr. Michael Eisenberg, associate professor of urology at Stanford’s Medical Center, and Dr. Jacques Cohen, the laboratory director at ART Institute of Washington at Walter Reed National Military Medical Center.

Legacy’s Kteily previously worked as a consultant focused on health & life sciences before serving as a senior manager at the World Economic Forum. Daniel Madero and Sarah Steinle, also Legacy co-founders, previously worked at Medifertil, a Colombian fertility clinic, and Extend Fertility, respectively.

In addition to Dadi and Legacy, other companies close to the space have recently secured notable investments including Hims, the provider of direct-to-consumer erectile dysfunction (ED) and hair loss medication, which raised a $100 million this year. Another seller of ED meds, Ro, has raised a total of $91 million. And Manual, an educational portal and treatment platform for men’s issues, raised a £5 million seed round in January from Felix Capital, Cherry Ventures and Cassius Capital.

Learn how enterprise startups win big deals at TechCrunch’s Enterprise show on Sept. 5

By Frederic Lardinois

Big companies today may want to look and feel like startups, but when it comes to the way they approach buying new enterprise solutions, especially from new entrants. But from the standpoint of a true startup, closing deals with just a few big customers is critical to success. At our much anticipated inaugural TechCrunch Sessions: Enterprise event in San Francisco on September 5, Okta’s Monty Gray, SAP’s DJ Paoni, VMware’s Sanjay Poonen, and Sapphire Venture’s Shruti Tournatory will discuss ways for startups to adapt their strategies to gain more enterprise customers (p.s. early-bird tickets end in 48 hours – book yours here).

This session is sponsored by SAP, the lead sponsor for the event.

Monty Gray is Okta’s Senior Vice President and head of Corporate Development. In this role, he is responsible for driving the company’s growth initiatives, including mergers and acquisitions. That role gives him a unique vantage point of the enterprise startup ecosystem, all from the perspective of an organization that went through the process of learning how to sell to enterprises itself. Prior to joining Okta, Gray served as the Senior Vice President of Corporate Development at SAP.

Sanjay Poonen joined VMware in August 2013, and is responsible for worldwide sales, services, alliances, marketing and communications. Prior to SAP, Poonen held executive roles at Symantec, VERITAS and Informatica, and he began his career as a software engineer at Microsoft, followed by Apple.

SAP’s DJ Paoni has been working in the enterprise technology industry for over two decades. As president of SAP North America, DJ Paoni is responsible for the strategy, day-to-day operations, and overall customer success in the United States and Canada.

These three industry executives will be joined on stage by Sapphire Venture’s Shruti Tournatory, who will provide the venture capitalist’s perspective. She joined Sapphire Ventures in 2014 and leads the firm’s CXO platform, a network of Fortune CIOs, CTOs, and digital executives. She got her start in the industry as an analyst for IDC, before joining SAP and leading product for its business travel solution.

Grab your early-bird tickets today before we sell out. Early-bird sales end after this Friday, so book yours now and save $100 on tickets before prices increase. If you’re an early-stage enterprise startup you can grab a startup demo table for just $2K here. Each table comes with 4 tickets and a great location for you to showcase your company to investors and new customers.

Can a radical new event disrupt how VCs raise funds, unlocking cash for Europe?

By Mike Butcher

For many years there’s been an accepted way to raise capital as a venture capital fund. Essentially, GPs (general partners, who set up and run venture capital firms) go “cap in hand” to LPs (limited partners, who invest into their VC firms) in pension funds, privately run “family offices,” “ultra-high net worths” and other such oddly named financial institutions. These meetings are always private and often VCs don’t even reveal who, specifically, has invested in their fund.

Because it’s so private, it favors fund managers who have been in the business for many years and already have a bulging contact book.

In recent years, part of this process has begun to be unpacked by events organizers, recognizing the hearty profits to be made from matchmaking these two groups. The tickets to attend these events are eye-wateringly expensive, especially for the VCs trying to raise funds.

But in Europe, the VC market has suffered from a certain amount of outdated practices, plenty of behind-closed-doors negotiations and certain lack of “energy.” Europe is a rich mine of startups, and there really ought to be a more competitive environment, but the lack of big exits and large markets (like the U.S. or China) means things tend to only go so far.

Now a new initiative hopes to disrupt this rather cozy state of affairs with an event that will be — comparatively speaking — cheap to attend for VCs in fund-raising mode. But there’s a twist. They will have to pitch “onstage” to the LPs attending.

Yes reader, suddenly they will be put in the exact same shoes as those poor entrepreneurs…

Allocate, which takes place on 19th September in London, is focused on connecting GPs with LPs, in particular, the newer VC funds and the many sources of finances that would like to invest in VCs but don’t have the contacts. The aim is to accelerate the growth of the next generation of VC funds, which in turn will invest into Europe’s technology startups of the future.

Up to 30 emerging VC fund managers will be chosen by the Allocate selection committee to present their fund in a five-minute pitch to a room full of LPs, in, what appears to be, the first event of its kind in Europe. Speakers at the one-day event will include Simon Cook, CEO and co-founder of Draper Esprit; Lisa Edgar, managing director U.S. fund of funds Top Tier Capital Partners; and Katie Martin, chairwoman of Wilson Sonsini Goodrich & Rosati.

This unusual event is being put together as a nonprofit venture by two early-stage VC firms: 7Percent Ventures and Luminous Ventures. The lower prices will reflect the fact that the tickets and sponsorship sold will cover the event costs, and not be a venture in its own right.

Andrew J. Scott, founder/partner at 7Percent Ventures, tells me: “The cash-raising process for a venture capital firm has traditionally been pretty opaque. University endowments or ‘family offices’ who look after private wealth and sometimes invest into VC firms, can be hard to reach.” He hopes, in particular, to help emerging VC’s “close the investment gap between Europe and the USA.”

Inspired by a VC pitch event in the U.S. and the “pay it forward” attitude of Silicon Valley, Allocate aims to cut out the middleman and make things more efficient for LPs and fund managers, and without paying £2,000+ for a conference ticket to do so.

“There are various PE, profit-led events which are crazy expensive and also just very corporate/PE-focused, but not early-stage VC-focused. So we thought we’d do this! I was inspired by an event I saw in SF which I pitched at. Our event will not be profit-led but about expanding the new VC industry,” he tells me.

Emerging fund managers are defined as people with up to three to four funds. So this is targeted at those who have not raised before: very much like a startup event.

“Other events in the industry are free for LPs, but this is like the bad old days when founders used to have to pay to pitch investors. These days investors pay more to attend conferences than startups to do, and pitching is often free — that’s how it should be,” says Scott.

“But the GP/LP world, is still the wrong way ’round. VCs pay thru the nose, and LPs go free. Institutional government-backed funds, or an insurance or pension fund, have billions in the bank, yet a GP trying to raise a first fund will have to pay thousands to go to an event which is free for the LPs? That’s at best peculiar,” he says.

It seems like, at the very least, Allocate is trying to level the playing field, and make it accessible for all, and the same price for everyone. For emerging VC fund managers at least, this seems more fair. LPs always want to see low fees with a fund, so it seems better that VCs are not paying £3,000GBP a ticket to go to events to meet them.

“Raising money for a VC firm can be a who-knows-who business, much like raising venture capital money for a startup was 15 years ago. Raising startup investment is now very different, much more democratized, and we feel the European VC/LP investment world needs to catch up and be the same,” says Scott.

“We definitely want to encourage LPs who have or haven’t invested in VCs before. So much less money goes into VC here than in the U.S. from sources like endowment funds and family offices,” he says.

Lomax Ward, partner at Luminous Ventures, adds: “We need to support and work with new and emerging fund managers and investors in a collaborative environment. The startup scene in Europe is getting great momentum, evidenced by more and more success stories. But, the fact remains that launching an early-stage venture capital fund is very tough and we have founded Allocate to make it that little bit easier. Also, for LPs it will be a fantastic showcase of Europe’s leading emerging funds.”

Commenting on the idea, Raph Crouan, formerly of Apple and Startup Bootcamp, tells me it’s a “great idea and quite well apparently.”

Speaking off the record, another VC tells me, “It looks like it’s geared towards newer funds, particularly those raising Fund I maybe II, as opposed to the more established VCs and seed funds. That’s a good idea.”

Another says: “It’s a good format in principle. It’s clever of 7Percent and Luminous to organise this to help their and other early-stage VCs with fund-raising, provided of course they succeed in getting lots of LPs to attend.”

Allocate chose London because, despite the uncertainty of BREXIT, the team says it remains at the center of the European startup sector. Though America still leads the world, its share of the global VC market has decreased significantly from 79% in 2008 to 53% last year, with the U.K.’s share of European VC having increased from 31% to 42% over the same period.

In comparison, until recently China was in the ascendant; VC investments in China in Q2 2019 are down nearly 77% year-on-year, while European investment continues to go from strength to strength. A third of the world’s top startup cities are in Europe.

It seems therefore like it’s really time to put booster-rockets on the European VC scene. And hopefully an events like this can help it along.

Self-driving truck startup Kodiak Robotics begins deliveries in Texas

By Kirsten Korosec

A year after coming out of stealth mode with $40 million, self-driving truck startup Kodiak Robotics will begin making its first commercial deliveries in Texas.

Kodiak will open a new facility in North Texas to support it freight operations along with increased testing in the state. The commercial route

There are some caveats to the milestone. Kodiak’s self-driving trucks will have a human safety driver behind the wheel. And it’s unclear how significant this initial launch is; the company didn’t provide details on who its customers are or what it will be hauling.

Kodiak has eight autonomous trucks in its fleet, and according to the company it’s “growing quickly.”

Still, it does mark progress for such a young company, which co-founders Don Burnette and Paz Eshel say is due to its talented and experienced workforce. 

Burnette, who is CEO of Kodiak, was part of the Google self-driving project before leaving and co-founding Otto in early 2016, along with Anthony Levandowski, Lior Ron and Claire Delaunay. Uber would acquire Otto (and its co-founders). Burnette left Uber to launch Kodiak in April 2018 with Eshel, a former venture capitalist and now the startup’s COO.

In August 2018, the company announced it had raised $40 million in Series A financing led by Battery Ventures . CRV, Lightspeed Venture Partners and Tusk Ventures also participated in the round. Itzik Parnafes, a general partner at Battery Ventures, joined Kodiak’s board.

Kodiak is the latest autonomous vehicle company to test its technology in Texas. The state has become a magnet for autonomous vehicle startups, particularly those working on self-driving trucks. That’s largely due to the combination of a friendly regulatory environment and the state’s position as a logistics and transportation hub.

“As a region adding more than 1 million new residents each decade, it is important to develop a comprehensive strategy for the safe and reliable movement of people and goods,” Thomas Bamonte, senior program manager of Automated Vehicles for the North Central Texas Council of Governments, said in a statement. “Our policy officials on the Regional Transportation Council have been very forward-thinking in their recognition of technology as part of the answer, which is positioning our region as a leader in the automated vehicle industry.”

Self-driving truck startup TuSimple was awarded a contract this spring to complete five round trips, for a two-week pilot, hauling USPS trailers more than 1,000 miles between the postal service’s Phoenix and Dallas distribution centers. A safety engineer and driver will be on board throughout the pilot.

Other companies developing autonomous vehicle technology for trucks such as Embark and Starsky Robotics have also tested on Texas roads.

BlockFi, which lends money to cryptocurrency holders, just raised $18.3 million led by Valar Ventures

By Connie Loizos

Last year, we told you about a New York-based startup that had begun lending cold hard cash to cryptocurrency holders who don’t want to offload their holdings but also don’t necessarily want so much of their assets tied up in cryptocurrencies.

Today, that two-year-old company, BlockFi, is announcing $18.3 million in Series A funding led by Peter Thiel’s Valar Ventures, with participation from Winklevoss Capital, Morgan Creek Digital, Akuna Capital, and earlier backers Galaxy Digital Ventures and ConsenSys Ventures.

Apparently, BlockFi is gaining some traction.

Last year, after raising $1.5 million in seed funding from ConsenSys Ventures, SoFi and Kenetic Capital, it secured $50 million led by Galaxy Digital Ventures (the digital currency and blockchain tech firm founded by famed investor Mike Novogratz) that is used to loan out cash to customers who use their bitcoin and ethereum holdings as collateral.

The minimum deposit required: $20,000 worth of cryptocurrency.

According to founder Zac Prince, who talked with Bloomberg about BlockFi’s newest round, enough people are now using those loans that BlockFi has seen its monthly revenue grow more than 10 times since January.

No doubt the uptick in loans correlates with the rebound in Bitcoin’s value, which was priced as low as $3,400 earlier this year but is now valued at roughly $11,400.

Prince also told the outlet that he expects annual revenue to hit eight figures by the end of this year. In startup land, that means it’s time to roll out new money-making services. BlockFi already introduced a savings account product earlier this year that it says enables investors to earn interest on their assets. They are not backed by the FDIC, though the company says it “operates with a focus on compliance with US laws and regulations.” And while it won’t say exactly what’s coming up next, it says more products are being added to its existing platform in a statement about the new round.

Prince previously spent roughly five years in consumer lending and began investing his own money in crypto in early 2016.

He told us last year that his “lightbulb moment” for the company came as he was in the process of getting a loan for an investment property. Instead of using a traditional bank, he decided to list his crypto holdings to see what would happen, and the response was overwhelming. “I realized that there was no debt or credit outside of [person-to-person] margin lending on a few exchanges, and I had the feeling that this was a big opportunity that I was well-suited to go after.”

Other companies providing crypto-backed loans that are issued in fiat currencies include CoinLoan, SALT Lending, Nexo.io, and Celsius Network, among others.

Automotive marketplace Carro acquires Indonesia’s Jualo, extends Series B to $90M

By Manish Singh

Carro, an automotive marketplace and car financing startup based in Singapore, said it has raised $30 million to extend and close its $90 million Series B financing round and acquired Indonesia-based marketplace Jualo as it looks to further scale its business in Southeast Asia.

The Series B round, for which Carro raised $60 million last year, was funded by SoftBank Ventures Asia, government-linked global investor EDBI, Dietrich Foundation, and NCORE Ventures.

Hanwha Asset Management as well as existing investors including Insignia Ventures, Facebook co-founder Eduardo Saverin’s B Capital Group, Singtel Innov8, Golden Gate Ventures, and Alpha JWC also participated in the round. The three-year-old startup has raised over US$100 million from investors.

“There was an overflow of interest in our Series B round, which we initially closed towards the end of last year. We had a lot of quality strategic investors coming to the and therefore decided to extend the round. The round is now officially closed,” Aaron Tan, founder and CEO of Carro, told TechCrunch.

As part of the announcement, Carro said it had acquired Jualo.com, one of Indonesia’s fastest-growing marketplaces where sellers trade new and used goods in over 300 categories including cars, motorcycles, property, fashion, and electronics. Jualo has amassed 4 million monthly active users and facilitated transactions worth $1 billion last year.

Carro, which operates in Singapore, Thailand and Indonesia, said more than $500 million worth of vehicles were sold last year on its platform, up from $250 million in 2017 and $120 million the year before.

Carro has already expanded in terms of services. Initially a vehicle marketplace, it launched Genie Finance and has also forayed into insurance brokerage and road-side assistance. Last year, it introduced a service that completes vehicle sales in 60 minutes — Carro Express. In March this year, Carro launched its first subscription-based car service in Singapore to offer consumers additional flexibility.

Tan said that Jualo, which operates in several more categories than Carro, will continue to operate under its original branding.  “Our aim with Jualo.com is to double down and grow the Jualo.com business; with a strong focus and emphasis on the automotive sector,” he said.

Carro, which sees more than 70% of its transactions come from outside home Singapore, will reveal expansion plans to new markets and more acquisition deals later this year, Tan said. The subscription service will also be extended, he added.

Carro is rivaled by a number of startups, including BeliMobilGue in Indonesia, Carsome, iCar Asia and Rocket Internet’s Carmudi, although with its new raise in the bank Carro is the best-funded by some margin.

iCar Asia, which is managed by Malaysian venture builder Catcha, raised $19 million in late 2017. Last year, Carsome — which covers Malaysia, Singapore, Indonesia and Thailand — raised a $19 million Series B, BeliMobilGue — Indonesia-only — raised $3.7 million and Carmudi landed $10 million.

In the case of Carmudi, the business has retrenched itself. At its peak it covered over 20 markets worldwide across Asia, the Middle East, Africa and Latin America, but today its focus is on Indonesia, the Philippines and Sri Lanka.

MaC Ventures, the brainchild of Adrian Fenty and Marlon Nichols, is quietly making its first investments

By Jonathan Shieber

MaC Ventures, the new Los Angeles-based investment firm formed from the merger of Cross Culture Ventures and M Ventures, has quietly started deploying capital from its fund.

One of the firm’s first disclosed investments is Edge Delta, which announced a $3 million seed round earlier this week.

The Seattle-based company, which has a tool to predict and identify faulty code and potential security issues in software designed for mobile environments, reflects the new continuing focus on companies that reflect the changing cultural environments throughout the commercial, cultural, and technological worlds.

And if anyone knows anything about downtime and application failures it would be the two co-founders who have held positions at Microsoft, Twitter, and Sumo Logic. That’s the background Ozan Unlu, a Microsoft and Sumo Logic alum, and Fatih Yildiz, who spent years at Twitter and Microsoft, will leverage as they pitch their services. 

“We have reached the inflection point for centralized security analytics, SIEM products like Splunk are struggling to scale and a lack of mature SaaS offerings mean that if customers want to keep up with growth in their environments, innovation is required,” said Will Peteroy, founder and chief executive of ICEBRG (acquired in 2018) and Chief Technology Officer for Security at Gigamon, in a statement.

That innovation is something that M Ventures and Cross Culture have tried to identify according to previous statements from both founders. And the merger between both firms was likely about growth and scale. Both firms have co-invested on a number of deals and both share the same emphasis on cultural shifts that create new opportunities.

Shared portfolio companies between the two firms include Blavity, BlocPower, and Mayvenn, and each reflect a different aspect of the firms’ commitment to the transformations impacting culture and community in the twenty-first century.

BlocPower is focused on urban resiliency and health in the face of new challenges to the power grid; Blavity has become the online community for black creativity and news; and Mayvenn is leveraging the economics of community to create new entrepreneurs and enable new businesses.

For Adrian Fenty and Marlon Nichols —  the two managing general partners of the new fund — and general partners and partners Charles King, Michael Palank, and Alyson DeNardo; MaC Ventures is a logical next step in their progression in the venture business.

Fenty, the former mayor of Washington, and an early special advisor to Andreessen Horowitz seven years ago, has long been interested in the intersection of technology and governance and said that politics was a great introduction to the venture world in an interview with TechCrunch when he joined Andreessen.

“As a mayor you have a lot of districts you work with, and every day is different,” Fenty said, noting that the same could be said for VCs who work with different startups. However, the pace will likely be a bit quicker in this space than it is in the political realm. “I believe that change should happen fast and in big ways, and that’s the tech industry,” he said. “Some of these entrepreneurs and CEOs, their energy and ability to come up with new ideas is infectious.”

As for Nichols, the introduction to venture capital came through work at Intel Capital before striking out with Troy Carter, a limited partner in the MaC Ventures fund, to form Cross Culture.

As the new firm finds its legs, it’s likely that some of the guiding principles that Nichols expressed when talking about Cross Culture will carry over to the new vehicle.

“This is the time to be here,” Nichols said in an interview earlier this year. “If you are going to invest in the companies of tomorrow you have to go where the world is moving to — and that’s black and brown, honestly.”

The SEC wants disgraced VC Mike Rothenberg to cough up more than $30 million

By Connie Loizos

Nearly three year ago to the day, TechCrunch reported on suspected fraud committed by Mike Rothenberg, a self-described “millennial venture capitalist” who’d made a name for himself not only by eponymously branding his venture firm but for spending lavishly to woo startup founders, including on Napa Valley wine tours, at luxury boxes at Golden State Warriors games and most famously, hosting an annual “founder field day” at the San Francisco Giants’s baseball stadium that later inspired a scene in the HBO show “Silicon Valley.”

The Securities & Exchange Commission had initially reached out to Rothenberg in June of 2016 and by last August, Rothenberg had been formally charged for misappropriating up to $7 million on his investors’ capital. He settled with the agency without making an admission of guilt, and, as part of the settlement, he stepped down from what was left of the firm and agreed to be barred from the brokerage and investment advisory business with a right to reapply after five years.

Now, comes the money part. Following a forensic audit conducted in partnership with the accounting firm Deloitte, the SEC is seeking $18.8 million in disgorgement penalties from Rothenberg, and an additional $9 million civil penalty. The SEC is also asking that Rothenberg be forced to pay pre-judgment interest of $3,663,323.47

According to a new lawsuit filed on Wednesday, the SEC argues that Rothenberg raised a net amount of approximately $45.9 million across six venture funds from at least 200 investors, yet that he took “fees” on their capital that far exceeded what his firm was entitled to during the life of those funds, covering up these “misdeeds” by “modifying accounting entries to make his misappropriation look like investments, entering into undisclosed transactions to paper over diverted money, and shuffling investments from one [f]und to another to conceal prior diversions.”

Ultimately, it says, Deloitte’s examination demonstrated that Rothenberg misappropriated $18.8 million that rightfully belong to Rothenberg Ventures, $3.8 million of which was transferred to Rothenberg personally; $8.8 million of which was used to fund other entities under his control (including a car racing team and a virtual reality studio); and $5.7 of which was used to pay the firm’s expenses “over and above” the management and administrative fees it was entitled to per its management agreements.

We reached out to Rothenberg this morning. He has not yet responded to our request to discuss the development.

It sounds from the filing like he doesn’t have wiggle room to fight it, in any case. According to the SEC’s suit, the “Rothenberg Judgment” agreed upon last summer left monetary relief to be decided by a court’s judgment, one that “provides that Rothenberg accepts the facts alleged in the complaint as true, and does not contest his liability for the violations alleged, for the purposes of this motion and at any hearing on this motion.”

In the meantime, the lawsuit contains interesting nuggets, including an alleged maneuver in which Rothenberg raised $1.3 million to invest in the game engine company Unity but never actually bought shares in the company, instead diverting the capital to other entities. (He eventually paid back $1 million to one investor who repeatedly asked for the money back, but not the other $300,000.)

Rothenberg also sold a stake in the stock-trading firm Robinhood for $5.4 million, says the SEC, but rather than funnel any proceeds to investors, he again directed the money elsewhere, including, apparently, to pay for a luxury suite during Golden State Warriors games for which he shelled out $136,000.

In a move that one Rothenberg investor finds particularly galling, the SEC claims that Rothenberg then turned around and rented that box through an online marketplace that enables people to buy and sell suites at various sports and entertainment venues, receiving at least $56,000 from the practice.

Ostensibly to keep up appearances, Rothenberg also gave $30,000 to the Stanford University Athletics Department (he attended Stanford as an undergrad) and spent thousands of dollars on ballet tickets last year and early this year, says the SEC’s filing.

Regardless of what happens next, one small victor in the SEC’s detailed findings is Silicon Valley Bank, a sprawling enterprise that has aggressively courted the tech industry since its 1983 founding. Last year, at the same time that Rothenberg was agreeing to be barred from the industry, he made a continued show of his innocence by filing suit against SVB to “vindicate the interests of its funds and investors,” the firm said in a statement at the time.

The implication was that SVB was at fault for some of Rothenberg’s woes because it had not properly wired money to the correct accounts, but the SEC says that SVB was defrauded, providing Rothenberg a $4 million line of credit after being presented with fabricated documents.

A loser — other than Rothenberg and the many people who now feel cheated by him — is Harvard Business School. The reason: it used Rothenberg Ventures as a case study for students after Rothenberg graduated from the program. As we’ve reported previously, that case study — funded by HBS before any hint of trouble at the firm had surfaced  — was co-authored by two professors who had a “significant financial interest in Rothenberg Ventures,” as stated prominently in a curriculum footnote.

Presumably, those ties gave confidence to at least some of the investors in Silicon Valley and elsewhere who later provided Rothenberg with money to invest on their behalf.

You can read the SEC’s 20-page motion for disgorgement and penalties below, along with the 48-page report assembled by Deloitte’s forensic accounting partner Gerry Fujimoto.

SEC vs. Mike Rothenberg by TechCrunch on Scribd

Forensic report re Mike Rothenberg/Rothenberg Ventures by TechCrunch on Scribd

Additional reporting by TechCrunch’s Sarah Perez.

Above: Rothenberg Ventures during better days.

Early-bird pricing ends next week for TC Sessions: Enterprise 2019

By Emma Comeau

Here are five words you’ll never hear spring from the mouth of an early-stage startupper. “I don’t mind paying more.” We feel you, and that’s why we’re letting you know that the price of admission to TC Sessions Enterprise 2019, which takes place on September 5, goes up next week.

Our $249 early-bird ticket price remains in play until 11:59 p.m. (PT) on August 9. Buy your ticket now and save $100.

Now that you’ve scored the best possible price, get ready to experience a full day focused on what’s around the corner for enterprise — the biggest and richest startup category in Silicon Valley. More than 1,000 attendees, including many of the industry’s top founders, CEOs, investors and technologists, will join TechCrunch’s editors onstage for interviews covering all the big enterprise topics — AI, the cloud, Kubernetes, data and security, marketing automation and event quantum computing, to name a few.

This conference features more than 20 sessions on the main stage, plus separate Q&As with the speakers and breakout sessions. Check out the agenda here.

Just to peek at one session, TechCrunch’s Connie Loizos will interview three top VCs — Jason Green (Emergence Capital), Maha Ibrahim (Canaan Partners) and Rebecca Lynn (Canvas Ventures) — in a session entitled Investing with an Eye to the Future. In an ever-changing technological landscape, it’s not easy for VCs to know what’s coming next and how to place their bets. Yet, it’s the job of investors to peer around the corner and find the next big thing, whether that’s in AI, serverless, blockchain, edge computing or other emerging technologies. Our panel will look at the challenges of enterprise investing, what they look for in enterprise startups and how they decide where to put their money.

Want to boost your ROI? Take advantage of our group discount — save 20% when you buy four or more tickets at once. And remember, for every ticket you buy to TC Sessions: Enterprise, we’ll register you for a free Expo Only pass to TechCrunch Disrupt SF on October 2-4.

TC Sessions: Enterprise takes place September 5, but your chance to save $100 ends next week. No one enjoys paying more, so buy an early-bird ticket today, cross it off your to-do list and enjoy your savings.

Is your company interested in sponsoring or exhibiting at TC Sessions: Enterprise 2019? Contact our sponsorship sales team by filling out this form.

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