Nearly eight years ago, Hamet Watt and Stacy Spikes launched MoviePass, the subscription-based movie ticketing service that captured the minds and dollars of investors and brought thousands of cinephiles a too-good-to-be-true deal for all-you-can watch movie passes.
Watt, who came to MoviePass as an entrepreneur in residence at True Ventures, previously founded the brand and product placement startup NextMedium and also spent time as a board partner at Upfront Ventures. Now, the serial entrepreneur and startup investor is combining his two career paths under the auspices of Share Ventures.
“It’s what I feel like I’ve been put here to do,” says Watt. “I love solving problems with design and entrepreneurship. I wasn’t fully scratching the itch as an investor by itself.”
With $10 million in financing from a slew of investors including Upfront Ventures, Alpha Edison, the general partners and founders of True Ventures, and a Korean family office, Share Ventures will look to launch between two and four companies per year.
Watt says that the new studio will focus on what he calls “human performance”. The businesses will use a blend of technology and human interaction to create services targeting fitness, nutrition, and mental health, according to Watt.
Share Ventures’ initial focus will be on two main areas, the future of living and the future of working. Within those two areas, the company will focus on developing businesses that enable the development of individual purpose, mental and physical enhancement, and personal and professional growth, according to Watt. And
Image Credit: Share Ventures
For Watt, the studio model represents the next iteration of startup investing. “We think the studio is going to lead the way,” he says.
Rather than invest in companies and management teams that are unknown quantities, Watt thinks the studio will be able to create discrete companies much faster in the same way that companies today iterate on new products and services.
“We have aggregated tools into a company building stack,” says Watt. “These are tools that are usable that third parties have developed and internal tool stacks.”
Image Credit: Share Ventures
Watt says Share Ventures will operate as a holding company with pooled equity shared across the employees at the company. “As we work on portfolio companies and build out dedicated teams, there’s a generous pool to incentivize talent.”
In some ways, the model isn’t that different from Bill Gross’ idealab, the Pasadena, Calif.-based incubator company that’s a few miles up the road from Share Ventures Los Angeles home base. Another inspiration is @Ventures, the dot-com era company that built a number of different portfolio companies. “Our investors are getting founders takes in all the companies that we build,” Watt says.
The company has ten people on staff to help build its first slate of companies.
Watt began talking to investors in 2018 about the idea and spent the bulk of 2019 trying to build out its first few companies.
“We run a lot of experiments, we generate a lot of ideas,” Watt says. “The number of shots on goal that we’re taking before we launch a company is significant.”
Let’s just say it has been a year. While a few ambitious startups like InVision and GitLab built their corporate cultures and talent hiring with a remote-first mentality, the reality is that the vast majority of founders never thought they would have to be socially distant from all of their employees. And it isn’t going to change: Google recently announced that all of their employees will be work from anywhere until summer 2021. We are only getting started with this new model of work.
Culture, productivity, and speed are absolutely vital to the survival of early-stage startups, but how do you build growth and momentum in a remote-only world? And how are investors approaching this new environment and the opportunities that our changing patterns of work mean for us?
These are critical questions, which is why we are hosting a panel of VC investor superstars to talk more about them on the Extra Crunch stage at TechCrunch Disrupt 2020.
First, we have Sarah Cannon, partner at Index Ventures who is perhaps best known in the Valley these days for her ambitious bet behind productivity tool Notion, which valued the relatively nascent startup at a cool $2 billion. Cannon has also backed messaging app Quill as well as Pitch, which offers collaboration around presentation documents. Future of work has been her bread and butter, and we’re excited to hear what she thinks is next in productivity and how startups will grow going forward.
Next, we have Sarah Guo, who is a general partner at Greylock. Guo also has been investing in the future of work and B2B tools including Clubhouse (not the Clubhouse you are thinking about) which helps dev teams collaborate more effectively. In addition, she has backed family benefits platform Cleo and a panoply of cybersecurity companies — an area that has become acutely important as the classic perimeter of the workplace office has been replaced with employee laptops scattered across locations worldwide.
Third and finally on this panel, we have Dave Munichiello, who is a general partner at GV. He’s backed a little social tool called Slack (I refuse to call it a productivity tool but that might be one person’s opinion), as well as that remote-first startup Gitlab, which has received upwards of a $3 billion valuation, and fintech infra company Plaid, which was sold to Visa last year for $5.3 billion in one of the biggest fintech exits of 2019.
From how to build products to how to build teams to what investors are looking for in startups in our crazy pandemic world, this panel has got you covered. Plus, since we are on the Extra Crunch stage at Disrupt 2020, we will be taking audience questions throughout the discussion. So come join the conversation as we figure out what 2020 means for the startup world this decade.
Her mother, Claire Díaz-Ortiz, says her daughter fits squarely into the “distance learning death zone.” The idea is that younger children are too young to do distance learning solo, even with tools meant to make it easier. Here’s one kindergartner’s remote fall class schedule:
Just got this schedule for my kindergartner’s “distance learning” in the fall and would just like to say LOL FOREVER TIMES A THOUSAND pic.twitter.com/CXXzdbwUWa
— Aubrey Hirsch (@aubreyhirsch) July 31, 2020
“And unfortunately for my daughter, I’m a VC, not a Zoom mom,” Díaz-Ortiz said.
The impact of the distance learning death zone, as Díaz-Ortiz calls it, is one of the reasons why many wealthy families with young children are considering a new solution: learning pods.
Learning pods are small clusters of children within the same age range who are paired with a private instructor. Depending on a parent’s preferences, learning pods could be an in-home or virtual experience and be either a full-time school replacement or supplemental learning.
In recent weeks, the concept has taken off all across the country, from suburbs to cities. There’s a Facebook group for Boulder, Colorado school districts; organizers launched Pandemic Pod San Diego to “connect families looking for in-home, teacher-led learning groups.” Some households are offering teachers a retainer. Among working mom groupchats, pods are taking off as a sanity lifesaver, especially as childcare responsibilities fall disproportionately on women.
Looking for the best 4-6th grade teacher in Bay Area who wants a 1-year contract, that will beat whatever they are getting paid, to teach 2-7 students in my back yard#microschool
If you know this teacher, refer them & we hire them, I will give you a $2k UberEats gift card
— email@example.com (@Jason) August 2, 2020
Startups are pivoting to keep up with the demand for private teachers. But because of high costs, only affluent families are able to form or join learning pods, which may limit the model’s ability to reach scale while extending the existing digital divide.
The Michigan startup scene is growing and venture capitalists see several key areas of opportunities. What follows is a survey of some of the top VCs in the state and how they see COVID-19 affecting the growth of Detroit, Ann Arbor and all of Michigan’s startup ecosystem. According to the Michigan Venture Capital Association (MVCA), there are 144 venture-backed startup companies in Michigan, which is an increase of 12% over the last five years.
The amount of capital available in the state hit a four-year high in 2019 after shrinking from record levels in 2015. The MVCA says the total amount of VC funds under management in Michigan is $4.3 billion. Out of that, 71% of the capital has been invested into companies and the MVCA states its members estimate an additional $1.2 billion of venture capital is needed to “adequately fund the growth of Michigan’s 144 startup companies in the next two years.”
As the VCs say below, life sciences is a large part of the Michigan ecosystem, attracting 38% of all investments made in the state. Information technology comes in second, receiving 34% of the total capital invested, with 85% going to those focused on software. Mobility, often thought as Michigan’s mainstay, only received 7% of the capital in 2019. Here’s who we spoke to:
Michigan has long been a hub for life science startups and the venture capitalists polled expect that to continue. Chris Stallman of Fontinalis Partners points to Michigan’s long-standing reputation in this field and expects this to continue.
Tim Streit of Grand Ventures agrees and sees the pandemic as accelerating the sector’s growth. In recent weeks he says his firm has seen a “number of promising digital therapeutics deals based in or near Michigan … and the timing couldn’t be more perfect for these kinds of companies to succeed.”
Chris Rizik of Renaissance Venture Capital notes that drug development will continue to drive growth around the country and is a strength of the Michigan ecosystem. He also points to Jeff Williams, CEO of NeuMoDx, as a leader in the life science community and who has led a number of Michigan’s most successful startups.
The notable exception to this are startups directly serving hospitals, according to Patricia Glaza of ID Ventures. She sees this as a challenging market in the era of COVID-19, saying “Hospitals are bleeding cash without elective surgeries and hard to prioritize nonessential technologies.”
Duo Security’s impressive exit to Cisco in 2018 is still resonating in the scene. As such, many venture capitalists are seeing Ann Arbor becoming a home for security startups.
Stallman of Fontinalis states, “I think the cybersecurity realm will be a bright spot as some of those spillover effects from the 2018 acquisition of Duo Security by Cisco take hold (this is still in its early days — employees will reach the end of their employment agreements and will start new companies, etc.).” Rizik of Renaissance Venture Capital said something similar: “The success of Duo Security highlighted Michigan’s growing reputation as a cybersecurity hub. The University of Michigan has always been strong in this area, and we now see a number of interesting startups in this field popping up around Ann Arbor.”
When asked about leaders in the Michigan startup scene, nearly all of the VCs listed Duo Security founders Dug Song and Jon Oberheide as key players. Perhaps Rizik said it best: “Dug Song is a great leader, who not only created a monster success for the region with Duo Security, but also has devoted much of his time to strategically working to help Michigan move forward as a responsible, startup-friendly community.”
Of course Michigan-based venture capitalists would be bullish on their own state, but nearly all of the VCs share the same reasons on why Michigan is a good place. They list low cost of living, amazing STEM-focused schools and a community of founders, VCs and business leaders eager to help each other.
Surprisingly, few of the VCs in the survey mention mobility or automotive as a highlight of the Michigan startup scene, which runs counter to the national narrative. Stallman sums up the situation this way: “The mobility space will see both headwinds and tailwinds. Companies vying for automotive customers may find that the industry’s challenges have resulted in a shorter ‘priority list’ for many automakers and suppliers; on the other side, companies helping to remove enterprise risk through innovation in supply chain, automation, workforce efficiency, etc. will have arguably more opportunity going forward.”
How much is local investing a focus for you now? If you are investing remotely in general now, are you filtering for local founders?
We have always been a thematically focused investor rather than a geographically focused investor; prior to COVID-19, we had invested 99% of our capital outside of Michigan. With that said, we’d love to invest more in Michigan and support more local founders.
What do you expect to happen to the startup climate in Detroit/Ann Arbor/Michigan longer term, with the shift to more remote work, possibly from more remote areas. Will it stay a tech hub?
Southeast Michigan has always been a story of two different startup worlds: health/life sciences and hardware/software tech. On the life sciences side, this region has a long-standing reputation of innovation and university research, and I expect that to remain largely the same going forward. It would seem to me that life sciences companies may not have as easy of a time adapting to new remote-work environments since much of the innovation work remains lab/clinic/facility-based.
For the world of other technology, I think there will certainly be more embracing of remote work and distributed teams — this area has always had some degree of that since it’s not uncommon to see companies with another office elsewhere or a few remote employees that come from very specific backgrounds that are hard to recruit for locally. Since this area has always had some of that, I could see a case that this new paradigm will be an easier adjustment for this region. However, the flip side of that is that so much of tech innovation and developing an ecosystem is about density and serendipitous collisions — for an area that was still on the come-up, losing what ground had been gained in recent years will no doubt make the spillover benefits of this aspect harder to come by. I worry a bit that angel and seed activity will slow locally (and hopefully that the growth in seed funds nationally will offset that).
Are there particular industry sectors that you expect to do uniquely well or poorly, locally?
I think a larger theme that is arising out of this COVID-19 situation is that people have a heightened sense of health, safety and security. Life sciences will remain resilient so long as there’s funding for continued research, and I think the cybersecurity realm will be a bright spot as some of those spillover effects from the 2018 acquisition of Duo Security by Cisco take hold (this is still in its early days — employees will reach the end of their employment agreements and will start new companies, etc.).
The mobility space will see both headwinds and tailwinds. Companies vying for automotive customers may find that the industry’s challenges have resulted in a shorter “priority list” for many automakers and suppliers; on the other side, companies helping to remove enterprise risk through innovation in supply chain, automation, workforce efficiency, etc. will have arguably more opportunity going forward.
In the short term, what challenges are facing Michigan’s startup scene?
Detroit has not yet hit a full critical mass from a startup ecosystem standpoint, and that is most evident in the more limited amount of angel and seed capital available to companies here; and, to a lesser extent, a more shallow pool of mentors and advisors for founders than what you would find in SF, LA, NYC, Boston, etc.
Who are some founders (who you’ve invested in or otherwise) that are leaders in the community?
Here are some of the prominent ones (note that we have invested in any): Dug Song and Jon Oberheide (Duo Security), Mina Sooch (has founded and led several prominent biotech companies), Amanda Lewan (Bamboo Detroit), Kyle Hoff (Floyd), Josh Luber and Greg Schwartz (StockX).
A lot of Bay Area founders and developers are looking to relocate. Why Michigan?
Quality research institutions, access to talent locally and ability to pull from Toronto/Ohio/etc., significant industry (automotive, logistics, manufacturing and financial services) in its footprint, supportive state programs for startups, cost of living, international airport with easy access (when the world moves again, that is), etc.
As sales teams partner with other companies, they go through a process called account mapping to find common customers and prospects. This is usually a highly manual activity tracked in spreadsheets. Crossbeam, a Philadelphia startup, has come up with a way to automate partnership data integration. Today the company announced a $25 million Series B investment.
Redpoint Ventures led the round with help from existing investors FirstMark Capital, Salesforce Ventures, Slack Fund and Uncork Capital along with new investors Okta Ventures and Partnership Leaders, a partnership industry association. All in all, an interesting mix of traditional VCs and strategic investors that Crossbeam could potentially partner with as they grow the business.
The funding comes on the heels of a $3.5 million seed round in 2018 and a $12.5 million Series A a year ago. The startup has now raised a total of $41 million.
Crossbeam has been growing steadily and that attracted the attention of investors, whom Moore says approached him. He was actually not thinking about fundraising until next year, but when the opportunity presented itself, he decided to seize it.
The platform has a natural networking effect built into it with over 900 companies using it so far. As new companies come on, they invite partners, who can join and invite more partners, and that creates a constant sales motion for them without much effort at all.
“We didn’t go out fundraising. We caught the eye of Redpoint because they could see the virality of the product and the extent to which it was being used by many of their portfolio companies and companies out in the market […],” CEO and co-founder Bob Moore told TechCrunch.
Image Credits: Crossbeam
To accelerate interest in the product, the company also announced a new free tier, which replaces the limited free trial and a starter level that previously cost $500 per month. Prior to this move, if you didn’t move to the starter tier, you would lose your data when the trial was over.
“The idea here is what we’ve seen in the data is that we can create a whole lot of value for people and demonstrate really strong ROI once they get in the door and actually have access to that data, and they don’t have to worry about a free trial where the data is going away,” Moore explained.
Moore says they currently have 28 employees and have ambitious plans to add new people to the mix in the coming months, expecting to reach 50 employees by early 2021. As the company revs up on the personnel side, Moore says diversity is front and center of their plans.
“As far as Crossbeam specifically goes, we’ve made sure that diversity, equity and inclusion is part of our entire recruiting process and also the cultural experience that we create for people that are at the company,” he said. Although he didn’t discuss specific numbers, he said the company was making progress, particularly in the latest round of hires.
While the company has an office in Philly, even before COVID hit, it was a remote first organization with about half of the employees working from home. “I think a lot of our culture was kind of built to make sure that remote team members are first class citizens in every respect in the company. So we already had all the controls, technology and practices in place, and when we shut the office, it was about as smooth as could be,” he said.
The co-founders, then students at Harvard Business School, were ready to commit, but their lawyer advised them to pause and attend the meetings they had previously set up with other investors.
Twelve years later, Rent the Runway has raised $380 million in venture capital equity funding from top investors like Alibaba’s Jack Ma, Temasek, Fidelity, Highland Capital Partners and T. Rowe Capital. Fleiss gave up an operational role in the company to a board seat in 2017, as the company reportedly was eyeing an IPO.
But the shoe didn’t always fit: Earlier this year, Rent the Runway struggled with supply chain issues that left customers disgruntled. Then, the pandemic threatened the market of luxury wear more broadly: Who needs a ball gown while Zooming from home? In early March, the business went through a restructuring and laid off nearly half of its workforce, including every retail employee at its physical locations.
In 2009, Fleiss and Hyman were successful Harvard Business School students. Hyman’s father knew a prominent lawyer who agreed to advise them on a contingency basis in exchange for connecting them with potential investors.
Still, fundraising “was extremely hard,” Hyman said. “We were in the middle of a recession and we were two young women at business school who had never really done anything before.”
Fleiss said venture capital firms often sent junior associates, receptionists and assistants to take the meeting instead of dispatching a full-time partner. “It was clear they weren’t taking us very seriously,” Fleiss said, recounting that on one occasion, a male investor called his wife and daughter on speaker to vet their thoughts.
In an attempt to test their thesis that women would pay to rent (and return) luxury clothing, Fleiss and Hyman started doing trunk pop-up shows with 100 dresses. On one occasion, they rented out a Harvard undergraduate dorm room common hall and invited sororities, student activity organizations and a handful of investors.
Only one person showed up, said Fleiss: A guy “who was 30 years older than anyone else in the room.”
Springboard, an online education platform that provides upskilling and reskilling training courses to people looking to learn in-demand roles, has raised $31 million in a new financing round as it looks to expand to more geographies.
The Series B financing round for the San Francisco-headquartered startup was led by Telstra Ventures . Vulcan Capital and SJF Ventures, as well as existing investors Costanoa Ventures, Pearson Ventures, Reach Capital, International Finance Corporation (IFC), 500 Startups, Blue Fog Capital, and Learn Capital also participated in the round, said the seven-year-old startup, which has raised more than $50 million to date.
Springboard offers a range of six-month and nine-month courses on data-science, design and other upskilling subjects to help students and those who are already employed somewhere land better jobs.
The startup, which expanded to India last year, also connects students with mentors — people who are working at Fortune 500 companies — to guide them better navigate professional decisions, Vivek Kumar, Managing Director at Springboard, told TechCrunch in an interview.
This is a developing story. More to follow…
Qualified, a startup co-founded by former Salesforce executives Kraig Swensrud and Sean Whiteley, has raised $12 million in Series A funding.
Swensrud (Qualified’s CEO) said the startup is meant to solve a problem that he faced when he was CMO at Salesforce . Apparently he’d complain about being “blind,” because he knew so little about who was visiting the Salesforce website.
“There could be 10 or 100 or 100,000 people on my website right now, and I don’t know who they are, I don’t know what they’re interested in, my sales team has no idea that they’re even there,” he said.
Apparently, this is a big problem in business-to-business sales, where waiting five minutes after a lead leaves your website can result in a 10x decrease in the odds of making contact. But the solution currently adopted by many websites is just a chatbot that treats every visitor similarly.
Qualified, meanwhile, connects real-time website visitor information with a company’s Salesforce customer database. That means it can identify visitors from high-value accounts and route them to the correct salesperson while they’re still on the website, turning into a full-on sales meeting that can also include a phone call and screensharing.
Image Credits: Qualified
Of course, the amount of data Qualified has access to will differ from visitor to visitor. Some visitors may be purely incognito, while in other cases, the platform might simply know your city or where you work. In still others (say if you click on a link from marketing email), it can identify you individually.
That’s something I experienced myself, when I decided to take a look at the Qualified website this morning and was quickly greeted with a message that read, “ Welcome TechCrunch! We’re excited about our funding announcement…” It was a little creepy, but also much more effective than my visits to other marketing technology websites, where someone usually sends me a generic sales message.
Swensrud acknowledged that using Qualified represents “a change to people’s selling processes,” as it requires sales to respond in real time to website visitors (as a last resort, Qualified can also use chatbots and schedule future calls), but he argued that it’s a necessary change.
“If you email them later, some percentage of those people, they ghost you, they get bored, they moved on to the competition,” he said. “This real-time approach, it forces organizations to think differently in terms of their process.”
And it’s an approach that seems to be working. Among Qualified’s customers, the company says ThoughtSpot increased conversations with its target accounts by 10x, Bitly grew its enterprise sales pipeline by 6x and Gamma drove over $2.5 million in new business pipeline.
The Series A brings Qualified’s total funding to $17 million. It was led by Norwest Venture Partners, with participation from existing investors including Redpoint Ventures and Salesforce Ventures. Norwest’s Scott Beechuk is joining Qualified’s board of directors.
“The conversational model is simply a better way to connect with new customers,” Beechuk said in a statement. “Buyers love the real-time engagement, sellers love the instant connections, and marketers have the confidence that every dollar spent on demand generation is maximized. The multi-billion-dollar market for Salesforce automation software is going to adopt this new model, and Qualified is perfectly positioned to capture that demand.”
Rigetti Computing, the quantum computing startup that is challenging industry heavyweights like IBM, Microsoft and D-Wave, today announced that it has closed a $79 million Series C funding round. The round was led by Bessemer Venture Partners, with participation from Franklin Templeton, Alumni Ventures Group, DCVC, EDBI, Morpheus Ventures and Northgate Capital.
Bessemer’s Tomer Diari and Veritas Software’s former CEO Mark Leslie will join the company’s board of directors.
Earlier this year, TechCrunch reported that Rigetti was looking to raise about $71 million in what — at least at the time — looked to be a down round. A Rigetti spokesperson declined to share any details about the company’s valuation in this round.
“This round of financing brings us one step closer to delivering quantum advantage to the market,” said Rigetti founder and CEO Chad Rigetti. “The company is dually focused on building scalable, error-corrected quantum computers and supporting high-performance access to current systems over the cloud. Rigetti offers a distinctive hybrid computing access model designed for practical applications.”
Rigetti currently offers its own cloud-based service for access to its machines, as well as through AWS’ Braket service, which is currently in preview. The company also recently won an $8.6 million DARPA award to build a quantum computer that outperforms classical computers.
“It’s hard to find an area where quantum computing won’t be tremendously valuable once quantum advantage is achieved,” said Jonathan Curtis, vice president and portfolio manager at Franklin Equity Group. “We believe that Rigetti is one of a select few leaders in this important emerging market with a strong combination of leading technology, an accomplished and focused team, and important commercial, government and go-to-market relationships.”
While quantum computing has long held a lot of promise, it’s actually starting to make real strides in the last few years, with various companies building working systems that aren’t quite powerful enough for most real-world use cases yet, but that show a lot of promise. Rigetti, maybe more so than others, has focused on these real-world use cases.
“Quantum computing will drive a paradigm shift in high-performance computers as we continue pushing the boundaries of science deeper into the realms of science fiction,” said Diari. “Quantum technology has the potential to unlock significant advancements in biology, chemistry, logistics and material science, and we believe that Rigetti provides the most immediate and clear path to a production-grade system in the market.”
Radish is announcing that it has raised $63.2 million in new funding.
Breaking up book-length stories into smaller chapters that released over days or weeks is an idea that was popularized in the 19th century, and startups have been trying to revive it for at least the past decade. Still, this round represents a major step up in funding, not just for Radish (which only raised around $5 million before this), but also compared to other startups in a relatively nascent market. (Digital fiction startup Wattpad is the notable exception.)
When I first wrote about Radish at the beginning of 2017, the startup was focused on user-generated content. Last year, however, the company launched the Radish Originals program, where Radish is able to produce more content using teams of writers lead by a showrunner, and where the startup owns the resulting intellectual property.
“Instead of becoming YouTube or Wattpad for serial fiction, we want to be more like Netflix and create our own originals,” Kim told me. “I got a lot of inspiration from platforms in Korea, China and Japan, where serial fiction is huge and established on mobile.”
One of the ideas Radish took from the Asian markets is rapidly updating its stories. For example, its most popular title, “Torn Between Alphas” (a romance story with werewolves) has released 10 seasons in less than a year, with each season consisting of more than 50 chapters — in fact, later seasons have more than 100 chapters — that are released multiple times a day.
“On Netflix, you can binge-watch three seasons of a show at once,” Kim said. “On Radish, you can binge-read a thousand episodes.”
While Radish borrowed the writing room model from TV — and hired Emmy-winning TV writers, particularly those with a background in soap opera — Kim said it’s also taken inspiration from gaming. For one thing, it relies on micro-payments to make money, where users buy coins that allow them to unlock later chapters of a story (chapters usually cost 20 or 30 cents on average, and more chapters get moved out from behind the paywall over time). In addition, the company can allow readers to determine the direction of stories by A/B testing different versions of the same chapter.
Kim pointed to the fall of 2019 as Radish’s “inflection point,” where the model really started to work. Now, the company says its most popular story has made more than $4 million and has more than 50 million “reads.” Radish stories are mostly in the genres of romance, paranormal/sci-fi, LGBTQ, young adult, and horror, mystery and thriller, and Kim said the audience is largely female and based in the United States.
By raising a big round led by SoftBank Ventures Asia (the early stage investment arm of troubled SoftBank Group) and Kakao Pages (which publishes webtoons, web novels and more, and is part of Korean internet giant Kakao), Kim said he can take advantage of their expertise in the Asian market to grow Radish’s audience in the U.S. That will mean increasing content production in the hopes of creating more hit titles, and also spending more on performance marketing.
“With its own fast-paced original content production, Radish is best positioned to become a leading player in the global online fiction market,” said SoftBank Ventures Asia CEO JP Lee in a statement. “Radish has proven that its serialized novel platform can change the way people consume online content, and we are excited to support the company’s continued disruption in the mobile fiction space. Leveraging our global SoftBank ecosystem, we hope to support and accelerate Radish’s expansion across different regions worldwide.”
Magnetis, an automated wealth management solution for Brazilian investors, has raised $11 million in a new round of funding as it transforms itself into a full service brokerage for the nation’s investor class.
“We’re quite happy with this vote of confidence from our investors. It only reinforces the credibility of our service and business model, which uses technology for goal-based investment management, without creating a conflict of interest,” said Luciano Tavares, founder and CEO of Magnetis. “The new funding will be used to launch our own brokerage and to develop new functionalities that improve customer experience and provide a complete and curated journey through goal-based investments.”
First launched five years ago, the company has set up 350,000 investment plans and has more than 430 million reals under management, according to a statement from the company.
The company said it planned to hit more than 1 billion reals by the end of 2021.
“Today, the Brazilian market is more sophisticated, with a sharp drop in a dependence on fixed income and a rise in more financial assets, including funds, shares, commodities and fixed-income securities. Defining a personal investment portfolio is a science, not a game or lottery,” said Anderson Thees, founder and managing partner of Redpoint eventures, in a statement. “Magnetis’ great differentiator is its ability to set up a personalized investment plan, with first-rate assets and its use of AI to manage all the variables in a sophisticated way. Magnetis is well-positioned for accelerated growth and our team at Redpoint is excited about guiding them during this new phase of our partnership as the fintech sector continues to boom in Brazil and beyond.”
Fintech in Latin America is a booming investment category, with companies like Nubank skyrocketing to multi-billion dollar valuations, and accounting for 22 percent of all Latin American fintech startups.
As the company closes on the new financing, it’s also launching a brokerage, which will enable the company to do more for its customers, according to Tavares. It may also allow the company to keep more money for itself since it doesn’t have to work with outside parties to execute trades.
“Our model for digital assets management and wealth creation is much more complete and sophisticated. The vision is to be a financial guide for our clients; making their investment experience simpler,” Tavares said in a statement. “A total integration with the broker makes the client’s journey simpler, more consolidated and complete.”
Tavares and Magnetis is also making a commitment to transparency around fees.
“We do not receive commissions on the products we recommend to customers,” said Tavares, in a statement. “The asset selection process is done in a transparent and automated way, and customers pay us an annual consulting fee based only on the amount they invest, and not according to the recommended investments. The end result is the selection of high quality products that are more aligned with the clients’ objectives.”
Buildots, a Tel Aviv and London-based startup that is using computer vision to modernize the construction management industry, today announced that it has raised $16 million in total funding. This includes a $3 million seed round that was previously unreported and a $13 million Series A round, both led by TLV Partners. Other investors include Innogy Ventures, Tidhar Construction Group, Ziv Aviram (co-founder of Mobileye & OrCam), Magma Ventures head Zvika Limon, serial entrepreneurs Benny Schnaider and Avigdor Willenz, as well as Tidhar chairman Gil Geva.
The idea behind Buildots is pretty straightforward. The team is using hardhat-mounted 360-degree cameras to allow project managers at construction sites to get an overview of the state of a project and whether it remains on schedule. The company’s software creates a digital twin of the construction site, using the architectural plans and schedule as its basis, and then uses computer vision to compare what the plans say to the reality that its tools are seeing. With this, Buildots can immediately detect when there’s a power outlet missing in a room or whether there’s a sink that still needs to be installed in a kitchen, for example.
“Buildots have been able to solve a challenge that for many seemed unconquerable, delivering huge potential for changing the way we complete our projects,” said Tidhar’s Geva in a statement. “The combination of an ambitious vision, great team and strong execution abilities quickly led us from being a customer to joining as an investor to take part in their journey.”
The company was co-founded in 2018 by Roy Danon, Aviv Leibovici and Yakir Sundry. Like so many Israeli startups, the founders met during their time in the Israeli Defense Forces, where they graduated from the Talpiot unit.
“At some point, like many of our friends, we had the urge to do something together — to build a company, to start something from scratch,” said Danon, the company’s CEO. “For us, we like getting our hands dirty. We saw most of our friends going into the most standard industries like cloud and cyber and storage and things that obviously people like us feel more comfortable in, but for some reason we had like a bug that said, ‘we want to do something that is a bit harder, that has a bigger impact on the world.’ ”
So the team started looking into how it could bring technology to traditional industries like agriculture, finance and medicine, but then settled upon construction thanks to a chance meeting with a construction company. For the first six months, the team mostly did research in both Israel and London to understand where it could provide value.
Danon argues that the construction industry is essentially a manufacturing industry, but with very outdated control and process management systems that still often relies on Excel to track progress.
Construction sites obviously pose their own problems. There’s often no Wi-Fi, for example, so contractors generally still have to upload their videos manually to Buildots’ servers. They are also three dimensional, so the team had to develop systems to understand on what floor a video was taken, for example, and for large indoor spaces, GPS won’t work either.
The teams tells me that before the COVID-19 lockdowns, it was mostly focused on Israel and the U.K., but the pandemic actually accelerated its push into other geographies. It just started work on a large project in Poland and is scheduled to work on another one in Japan next month.
Because the construction industry is very project-driven, sales often start with getting one project manager on board. That project manager also usually owns the budget for the project, so they can often also sign the check, Danon noted. And once that works out, then the general contractor often wants to talk to the company about a larger enterprise deal.
As for the funding, the company’s Series A round came together just before the lockdowns started. The company managed to bring together an interesting mix of investors from both the construction and technology industries.
Now, the plan is to scale the company, which currently has 35 employees, and figure out even more ways to use the data the service collects and make it useful for its users. “We have a long journey to turn all the data we have into supporting all the workflows on a construction site,” said Danon. “There are so many more things to do and so many more roles to support.”
Those of us who work in technology should always be asking ourselves, “Who we are really building for?” Do we design products to make ourselves more comfortable, or do we innovate to be the change in the world we want to see? One group perennially left out of tech conversations — moved out of sight and out of mind — is the 2.3 million people in the U.S. prison system. As tech becomes such a critical driver of progress in the world, we should be building products that improve inmates’ lives and help them reintegrate into society without the risk of relapse.
I recently stumbled across an essay I wrote following my work at the Stanford Criminal Justice Center, analyzing Norway’s humane prison systems and asking, “Could they work here?” These prisons are designed to replicate life outside their walls. They incorporate features like yoga classes and recording studios. They give inmates a chance to pursue higher education so that they can be meaningfully employed when they reenter the outside world. Anyone who has seen the documentary 13th knows that American prisons are very different. Why?
(Quick disclaimer: This is a fraught and emotional topic. It is hard to appreciate the complexity of incarceration and recidivism in a 1,000-word op-ed. I appreciate the input and forbearance of those with different perspectives.)
Writ-large, the corrections system has five goals:
But sadly, per criminologist Bob Cameron, “Americans want their prisoners punished first and rehabilitated second.”
This is why Norway has a recidivism rate of 20% while the U.S. rate hovers at around 75%. That is staggering. Three out of every four former inmates is at-risk of committing a crime after leaving prison. This is a huge deadweight loss for society. How much lower could that rate be if we invested in prisoners’ potential? If we gave them the tools to seamlessly reenter the world? Is there a role for private, for-profit enterprises here, and if so, how could technology be used to help people exit the corrections system permanently?
Most tech coverage just focuses on tools used to predict recidivism and keep past offenders, many of whom are trying to reform their lives, behind bars. But there are many startups building products to help them successfully move on.
New York-based APDS recently raised a $5 million Series B to provide tablets that inmates can use for learning purposes. The tablets are now in-use in 88 correctional facilities in 17 states. Inmates can use the software to learn English, get their GEDs or learn entrepreneurship. North Carolina startup Pokket helps inmates plan for life outside of prison in the six months leading up to their release date.
Mission: Launch is an organization that hosts demo days and hackathons for inmates. They teach financial literacy, entrepreneurship and community engagement. Hackathon participants so far have built an app to convert online messages from friends and family into written postcards for inmates (who are shut off from social media) and an app to help people leaving the corrections system to seal their records so that they can get hired again.
Maintaining connections with friends and loved ones outside of prison makes a significant difference when it comes to reentering society. Technology company Securus recently announced free messaging on its 290,000 tablets so that inmates can communicate with relatives without having to pay exorbitant fees. Prison Voicemail in the U.K. provides a cheap phone service that families can pay. In all cases when it comes to implementing technology to reduce recidivism, the financial burden should not fall on inmates, a captive population with limited agency and earning potential.
Prison Scholars, a nonprofit founded by a former inmate, teaches entrepreneurship to inmates and helps them create post-incarceration business plans. They estimate that inmates who receive education are 43% less likely to return to prison, an implied ROI of $18.36 to society for every dollar invested. Defy Ventures boasts of 82% employment for program graduates and a 7.2% recidivism rate. Other programs to teach digital literacy and coding, which make resources like textbooks and Wikipedia available offline, have found similar success.
The U.S. spends $80 billion to keep inmates behind bars. This creates an enormous financial incentive for taxpayers to reduce recidivism. Two related questions need to be addressed: Can tech companies actually make money on products to improve the lives of those in the prison system? And should they?
To answer the first question — and at the risk of sounding crass — a very simplified business model could look like this: State governments pay companies somewhere between $0 and the cost of keeping an inmate in jail for one year (~$81,000) for each inmate who successfully uses an educational product to prep for leaving prison.
The payment could be split across multiple years, so that the longer someone is able to go without reoffending, the more the provider makes. If taxpayers paid tech providers just 50% of the cost to house an inmate for one year, the tech company would make a per-user LTV of over $40,000 (!). This kind of financial incentive could easily attract more talented entrepreneurs to the goal of improving the lives of people in the corrections system. (The opposite of the for-profit prison business model, which creates a perverse incentive to maintain a constant prison population.)
The question of whether it is morally permissible for for-profit tech companies to sell products built for this demographic is a more difficult one. While there is no right answer, there are guidelines that companies could follow:
There are so, so many great products yet to be built for this demographic. A LinkedIn or Craigslist Jobs equivalent populated by the employers who hire former inmates. Live-streamed religious services so that inmates can continue to participate in their community faith organizations. Nonvocational hobby education platforms. Limited versions of MasterClass or Udemy or Coursera . Closed-loop online games.
Lastly — and needless to say — tech doesn’t even begin to scratch the surface when it comes to righting the wrongs of our corrections system. The reinstatement of voting rights, employment on-ramps and limits to background checks, the elimination of for-profit private prisons, adjustments to prison wages that tacitly amount to indentured servitude … the list of things we could improve is long. But tech can still play a critical role in improving the lives of fellow citizens in the corrections system.
Mohandas Gandhi quipped that “The true measure of any society can be found in how it treats its most vulnerable members.” Almost one-third of Americans have some criminal history. The U.S. accounts for 25% of the world’s prison population. Let’s stop ignoring this demographic and build tools that really make the world better for those who need it most.
CVS Caremark launched its point solutions management program with a sleep service from Big Health nearly a year ago, and now it’s adding another of the digital mental healthcare startup’s products to its suite of managed point solutions.
The Daylight product, which is designed to help people alleviate worry and anxiety, will join an expanding list of digital therapeutics that CVS Caremark offers to manage for employer-directed healthcare plans.
Other services in the CVS Caremark portfolio of offerings include Sleepio, a personalized digital sleep program from Big Health; Hello Heart, which helps members understand and improve their heart health; Hinge Health, which provides an app-based coaching and wearable sensor for chronic back and joint pain management; Livongo which provides coaching, monitoring devices, and digital treatments for conditions including diabetes, hypertension, weight management, and diabetes prevention solutions; Torchlight, a caregiver support solution; and Whil, a digital training platform for mindfulness, stress resilience, mental well-being and performance.
“Plan sponsors increasingly see the value in health care point solutions for improving workforce productivity, satisfaction and overall well-being, however with so many options on the market, it can be challenging to identify trusted solutions that best meet the needs of their members,” said Sree Chaguturu, M.D., Chief Medical Officer, CVS Caremark, the pharmacy benefit management business of CVS Health, in a statement earlier this year. “We have analyzed pharmacy and medical claims to identify where these benefits can make a difference and employ a rigorous and transparent evaluation process to assure that any vendor included in Point Solutions Management meets high standards for safety, quality and user experience at the vendor’s lowest price in the marketplace.”
According to Chaguturu plan providers are interested in point solutions that can digitally compliment the care that patients receive from physicians that can help with self-management of chronic conditions.
These self-directed, digitally enhanced therapies are especially important at a time when more care is being conducted remotely thanks to the social distancing demands imposed by efforts to control the COVID-19 outbreak in the United States.
“The point solutions management platform is a platform designed for B2B2C.. Where plan sponsors are contracting through the platform to help their members,” said Chaguturu, in an interview. “We work with Big Health to support awareness of the application through our other platforms as well.”
Rather than go direct to consumer like any number of other mental health and wellness applications vying for customers, Big Health has chosen to work with employer provided healthcare plans and services like CVS Caremark’s because it can reach more people, said Big Health co-founder Peter Hames.
“CVS has shown real forward thinking in implmenting this platform to provide this conduit to digital care,” Hames said. “CVS Caremark administrates benefits to over 100 million people in America. The scope via the reimbursement space is huge… We could take a direct to consumer model. [But] my experience has shown me that going through this reimbursed pathway provides a much bigger vector.”
The two companies declined to disclose the financial terms of the arrangement between CVS and Big Health, but Chaguturu did say that the company did not invest in solutions offered through its program or have a financial interest in the business.
Big Health has raised over $54 million from investors including Octopus Ventures, Samsung Next, Glide Healthcare, Morningside Group, Kaiser Permanente Ventures, and Index Ventures, according to data from Crunchbase.
In a world with growing amounts of data, finding the right set for a particular machine learning model can be a challenge. Explorium has created a platform to make that an easier task, and today the startup announced a $31 million Series B.
The round was led by Zeev Venture with help from Dynamic Loop, Emerge and F2 capital. Today’s investment brings the total raised to $50 million, according to the company.
CEO and co-founder, Maor Shlomo says the company’s platform is designed to help people find the right data for their model. “The next frontier in analytics will not be about how you fine tune or improve a certain algorithm, it will be how do you find the right data to fit into those algorithms to make them as useful and impactful as possible,” he said.
He says that companies need this more than ever during the pandemic because this can help customers find more relevant data at a time when their historical data might not be useful to help build predictive models. For instance, if you’re a retailer, your historical shopping data won’t be relevant if you are in an area where you can no longer open your store, he says.
“There are so many environmental factors that are now influencing every business problem that organizations are trying to solve that Explorium is becoming this […] layer where you search for data to solve your business problems to fuel your predictive models,” he said.
When the pandemic hit in March, he worried about how it would affect his company, and he put a hold on hiring, but as he saw business increasing in April and May, he decided to accelerate again. The company currently has 87 employees between offices in Israel and the United States and he plans to be at 100 in the next couple of months.
When it comes to hiring, he says he doesn’t try to have hard and fast hiring rules like you have a certain degree or have gone to a certain school. “The only thing that’s important is getting good people hungry to succeed. The more diverse the culture is, the more diverse the group is, we find the more fun it is for people to discover each other and to discover different cultures,” Shlomo explained.
In terms of fundraising, the while the company needs money to fuel its growth, at the same time it still had plenty of money in the bank from last year’s round. “We got into the pandemic and we didn’t know how long it’s going to last, and [early on] we didn’t yet know how it would impact the business. Existing investors were always bullish about the company. We decided to just go with that,” he said.
The company was founded in 2017 and previously raised a $19.1 million Series A round last year.
The Berlin-based startup behind Tandem, an app for practicing a second language, has closed a £4.5 million (~$5.7 million) Series A round of financing to capitalize on growth opportunities it’s seeing as the coronavirus crisis continues to accelerate the switch to digital and online learning.
With many higher education institutions going remote as a result of concerns over virus exposure risks of students mixing on physical campuses, there’s a growing need for technology that helps language students find people to practice with, as Tandem tells it. And while language learning apps make for a very crowded space, with giants like Duolingo and Babbel, Tandem focuses on a different niche: native speaker practice.
As the name suggests, its app does pair matching — connecting users with others who’re trying to learn their own language for mutual practice, by (their choice of) text, phone chat or video call.
The platform also incorporates a more formal learning component by providing access to tutors. But the main thrust is to help learners get better by practicing chatting to a native speaker via the app.
Because of the pandemic push to socially distant learners, that’s a growing digital need, according to Tandem co-founder and CEO Arnd Aschentrup. He says the coronavirus crisis spurred a 200% increase in new users — highlighting a “clear appetite” among consumers for digital language learning.
The team has taken another tranche of funding now so it can scale to meeting this growing global opportunity.
The Series A is led by European VC firm Brighteye Ventures, with Trind Ventures, Rubylight Limited and GPS Ventures also participating. It brings the startup’s total raised to date to £6.8 million.
“Given the accelerated user-uptake and clear market opportunity, we felt that 2020 was the right time to partner with the team at Brighteye to bring Tandem into the mainstream,” says Aschentrup, adding: “We anticipate significant growth opportunities for online learning and social learning in the wake of coronavirus.”
He says two “key trends” have emerged over the past few months: “Firstly, schools and universities providing language courses have either temporarily shut down, or moved almost entirely to remote lessons. Students are therefore relying on additional platforms to learn and practice languages, which is precisely what Tandem offers.
“Secondly, we know that lockdown has enormously limited people’s ability to socialise. Friendships have been harder to maintain, and new connections more difficult to spark. We’re excited about Tandem’s ability to connect people all across the globe despite lockdown. Since coronavirus began, engagement on Tandem’s video chat feature has increased three-fold, and new user signups have increased 200%.”
Tandem had been growing usage prior to COVID-19 — increasing membership from around a million back in 2017 (when we last spoke), to more than 10 million members now, spread across 180 countries.
Aschentrup couches the underlying growth as “strong organic demand,” noting the platform has been profitable since 2019 (hence not taking in more outside funding ’til now). But, with the pandemic curve ball accelerating the switch to remote learning, it’s expecting usage of its platform to keep stepping up.
“We’ve successfully increased our community numbers ten-fold in recent years, profitably and organically,” he tells TechCrunch. “More people than ever value digital learning solutions combined with human connection, and so the time is ripe to introduce Tandem to language learners more widely around the globe. With the team at Brighteye on our side we’re excited to further develop Tandem’s reach and voice over the coming period.”
“We expect increased interest in online learning to sustain well after lockdown lifts. In China — where lockdown sanctions were implemented and lifted earlier — user engagement has remained buoyant.”
“Once people experience the value of learning as part of a like-minded global community, it often becomes a lasting part of their lifestyle,” he adds.
Tandem’s best markets for language learners are China (10%), the U.S. (9%) and Japan (9%) — which combined make up close to a third (27%) of its user base.
While the most popular language pairs (in ranked order of popularity) are:
While the vast majority (94%) of Tandem’s user base is making use of the freemium offering, it monetizes via a subscription product, called Tandem Pro, which it introduced in 2018 to cater to members who “preferred taking a community approach to language learning,” as Aschentrup puts it.
“For $9.99 per month, members can access key features such as: translating unlimited messages, finding Tandem partners nearby or in specific locations — for example ahead of international travels or studying abroad — and having enhanced visibility in the community as a featured Pro member,” he explains.
Aschentrup describes the “community aspect” of Tandem as a key differentiator versus other language learning apps — saying it helps users “develop and maintain cross-cultural friendships.”
“Members are often on opposite sides of the world to each other, yet able to enjoy a window into another culture entirely. Now more than ever, we’re pleased to be facilitating members’ healthy curiosity about other languages, countries and styles of living.”
The new funding will go on developing additional features for the app, and expanding the team across marketing and engineering, per Aschentrup. Currently Tandem has 24 full-time employees — it’s planning to double that to a 50-member team globally, post-Series A.
Commenting in a statement, Alex Spiro, managing partner at Brighteye Ventures, lauded the team’s “innovative and effective strategy” in building a community platform that tackles the language gap by connecting learners with fluent speakers.
“The product has not only proven resilient in this global crisis but has seen impressive growth during the period, and the team is now very well equipped to come out of it stronger and to continue to support loyal language learners that now number in the millions and will number many more in the coming years,” he added.
As a result of the pandemic, accelerators have moved operations fully remote to abide by social distancing. The shift has forced well-known programs like 500 Startups, Y Combinator and Techstars to go fully online, while encouraging existing venture capital firms to launch new digital-only fellowships like Cleo Capital and NextView Ventures.
Before the pandemic, accelerators could advertise their value by lending desk space once used by Airbnb, Twilio and Brex’s co-founders, plus a glitzy demo day. Now, stripped of their in-person element, the actual value of an accelerator program — and the network they provide — is being tested in new ways.
So a question remains for participating founders: Are they getting the benefits of what they thought they signed up for?
The last thing Michael Vega-Sanz wanted to do was was join another Zoom get-together for entrepreneurs. But the car-sharing company he co-founded with twin brother Matthew was in the middle of a pivot, so they joined NextView Ventures’ inaugural remote accelerator program.
“I envisioned an accelerator with awkward happy hours, mass Zoom calls,” Vega-Sanz said. Fast-forward one month into the program, he says it “has been quite the opposite.”
Before joining NextView’s accelerator, Vega-Sanz did an in-person incubator at Babson College in Boston, but there’s “a lot less fluff” in being virtual, he told TechCrunch.
“[With in-person] the reality was you’d go to lunch, and by the time you drove over there and had all your side talk, small talk, chit-chat and actually got into the nitty-gritty of the event, there was a lot of time loss,” he said. “You could have been working for your company during that time.”
If possible, Vega-Sanz still recommends that first-time founders attend a physical accelerator instead of a virtual one for the energy it brings, even with the downside of useless events.
Tire Agent, an Entrepreneurs Roundtable Accelerator-backed startup that is looking to bring the tire industry into the 21st century, has today announced the close of a $5 million funding round led by American Family Ventures, with participation from ERA, Sidekick Fund, NY Angels and HBS Angels.
According to Consumer Reports, the average tire costs about $97. Four new tires costs a little under $400, and that doesn’t include added costs like taxes, fees, or the cost of installation. Tire Agent wants to make tire shopping more convenient and accessible to customers, while also making the process more affordable.
The startup works with tire brands (more than 50, to be exact) to give users a place to browse tires online. Moreover, Tire Agent layers in educational, easy-to-understand content about these tires to help users understand the difference between brands, models, and get the best value. Tire Agent also helps users find an installer near them and shows the cost of installation up front, so there are no surprises.
Plaid founder and CEO Zach Perret recently said on an episode of Extra Crunch Live that every company is a fintech company, and TireAgent seems to agree.
The company has built out a tire financing platform called PayPair that connects customers of any credit score and matches them with a variety of lenders, financing and payment plan companies to give them options on how to cover the cost of new tires.
Tire Agent also has a partnership with AllState to offer warranties to customers, including a warranty on installation, so that their investment is protected.
“The biggest challenge for Tire Agent is getting people to change the habit of going to an old-school tire shop and being so used to people pushing a brand on them,” said Tire Agent founder and CEO Jared Kugel. “On Tire Agent, you can read through the content we’ve generated for each tire, even if you know nothing about a tire, and make an educated decision.”
Tire Agent has a network of 500+ tire distribution warehouses with 50 tire brands and 20 wheel brands offered on the platform, with 15,000 partnered installation centers across the country.
Though the company won’t share concrete numbers, Kugel added that revenue and tires sold grew by nearly 300 percent from the first half of 2019 to the first half of 2020.
This latest round brings Tire Agent’s total funding to $6 million.
Next47 and prior backers Creandum, Lufthansa Cargo and Point Nine Capital also participated in the round, along with a number of angel investors — including Tom Stafford of DST Global and Carlos Gonzalez-Cadenas (COO of GoCardless and former Chief Product Officer of Skyscanner).
The August 2017-founded startup says it’s seen bookings rise during the coronavirus crisis travel crunch as airlines seek alternatives to selling seats to passengers.
Over the past 12 months the startup says it’s scaled GMV by 10x and is expecting continued fast-paced growth as COVID-19 accelerates the adoption of digital distribution in air cargo.
The new funding will go on expanding the business, with the team aiming to increase the number of airlines signed up — including beefing up coverage in Europe. cargo.one is also targeting expanding into North America and Asia — planning to triple headcount to 70 staff by the end of the year via an aggressive hiring drive.
Currently it has 12 airlines signed up to use the platform to book in freight shipments, including Lufthansa, All Nippon Airways, Finnair, Etihad, AirBridgeCargo and TAP Air Portugal. It launched the booking product two summers ago, with Lufthansa Cargo as the first airline signed up.
“cargo.one is a two-sided marketplace, connecting airlines with forwarders of all sizes,” says co-founder and MD Oliver Neumann, discussing the business model. “We receive a commission fee from the airlines for selling their air freight capacities on our platform. For freight forwarders the access to the booking platform is free.”
The platform offers real-time visibility of available air freight across covered airlines and routes — aiming to replace what can be an arduous process of phone and/or email back and forth for its target users (freight forwarding offices).
Airlines set prices for air freight products sold via cargo.one.
“The air cargo market has been stuck in the 90s when compared to the passenger business. The vast majority of air cargo to this day is booked by calling the airlines directly. Many processes are still manual and time-consuming,” says Neumann, who describes the product as “more than just a booking platform”.
“We design, build and maintain custom integrations to our airline partners, creating both the front end for freight forwarders and integrating into the systems of the airlines and helping them improve the back-end infrastructure. That’s why we refer to it as the operating system for air cargo.”
“At cargo.one we are building a 100% digital solution and enable airlines to transform their business digitally. Over the past years, cargo.one has built tailored technical integrations with airline partners that enable them to distribute their capacity online without the need to overhaul their infrastructure,” he adds.
Currently, cargo.one’s platform has some 1.1M+ air freight offers per month, covering 120+ countries and 300 airports globally.
On the customer side it has more than 1,500 freight forwarding offices signed up at this point — which it touts as including “21 of the top 25 companies globally”.
“From January to June 2020, cargo.one saw the number of air cargo search requests by freight forwarders quadruple. In response to increased demand from airlines and freight forwarders, we expect to triple the size of the business by the end of the year,” adds Neumann.
Index’s Martin Mignot and Max Rimpel led the Series A investment in cargo.one.
Commenting on the funding in a statement, Mignot, said: “cargo.one has formed close partnerships with major global airlines, who have subsequently seen their cargo business expand significantly. Conversations with dozens of other airlines in the Americas and Asia show the clear need for a simple booking engine for air cargo, and early signs of the far-reaching impact it will have on the airline industry and businesses around the world who rely on it to serve their customers.”
Venture capital has been pouring into the logistics space over the past decade, chasing an increasing number of startups spotting opportunities to apply digital efficiencies to the movement of physical goods — including aiming to replace freight forwarders themselves, in the case of another Berlin logistics startup, FreightHub, which raised a $30M Series B last year for a logistics play that covers sea, air and rail freight.
The Not Company, Latin America’s leading contender in the plant-based meat and dairy substitute market, is about to close on an $85 million round of funding that would value it at $250 million, according to sources familiar with the company’s plans.
The latest round of funding comes on the heels of a series of successes for the Santiago-based business. In the two years since NotCo launched on the global stage, the company has expanded beyond its mayonnaise product into milk, ice cream, and hamburgers. Other products, including a chicken meat substitute are also on the product roadmap, according to people familiar with the company.
NotCo is already selling several products in Chile, Argentina and Latin America’s largest market — Brazil — and has signed a blockbuster deal with Burger King to be the chain’s supplier of plant-based burgers. It’s in this Burger King deal that NotCo’s approach to protein formulation is paying dividends, sources said. The company is responsible for selling 48 sandwiches per store per day in the locations where it’s supplying its products, according to one person familiar with the data. That figure outperforms Impossible Foods per-store sales, the person said.
NotCo is also now selling its burgers in grocery stores in Argentina and Chile. And while the company is not break even yet, sources said that by December 2021 it could be — or potentially even cash flow positive.
NotCo co-founders Karim Pichara, Matias Muchnick, and Pablo Zamora. Image Credit: The Not Company
With the growth both in sales and its diversification into new products, it’s little wonder that investors have taken note.
Sources said that the consumer brand focused private equity firm L Catterton Partners and the Biz Stone-backed Future Positive were likely investors in the new financing round for the company. Previous investors in NotCo include Bezos Expeditions, the personal investment firm of Amazon founder Jeff Bezos, the London-based CPG investment firm, The Craftory, IndieBio and SOS Ventures.
Alternatives to animal products are a huge (and still growing) category for venture investors. Earlier this month Perfect Day closed on a second tranche of $160 million for that company’s latest round of financing, bringing that company’s total capital raised to $361.5 million, according to Crunchbase. Perfect Day then turned around and launched a consumer food business called the Urgent Company.
These recent rounds confirm our reporting in Extra Crunch about where investors are focusing their time as they try to create a more sustainable future for the food industry. Read more about the path they’re charting.
Meanwhile large food chains continue to experiment with plant-based menu items and push even further afield into cell-based meat using cultures from animals. KFC recently announced that it would be expanding its experiment with Beyond Meat’s chicken substitute in the U.S. — and would also be experimenting with cultured meat in Moscow.
Behind all of this activity is an acknowledgement that consumer tastes are changing, interest in plant-based diets are growing, and animal agriculture is having profound effects on the world’s climate.
As the website ClimateNexus notes, animal agriculture is the second-largest contributor to human-made greenhouse gas emissions after fossil fuels. It’s also a leading cause of deforestation, water and air pollution, and biodiversity loss.
There are 70 billion animals raised annually for human consumption, which occupy one-third of the planet’s land arable and habitable land surface, and consume 16% of the world’s freshwater supply. Reducing meat consumption in the world’s diet could have huge implications for reducing greenhouse gas emissions. If Americans were to replace beef with plant-based substitutes, some studies suggest it would reduce emissions by 1,911 pounds of carbon dioxide.