NPB games are known for engaging antics that extend well beyond the play on the field. But what’s to be done in the era of COVID-19 when baseball is played in front of an empty stadium? For many — including Korea’s KBO League and the upcoming shortened MLB season — cardboard cutouts are an attempt to bring something familiar to the otherwise surreal experience.
Japan, on the other hand, is leaning into the surreality. The Fukuoka SoftBank Hawks are getting some cheerleading help from a couple of familiar robots. Softbank’s own Pepper and Spot (of the Softbank-owned Boston Dynamics) formed the cheering section at a game this week, as the NPB team took on the Rakuten Eagles. The celebration is the first of many, running through the end of the month.
It is, as Softbank Notes, “the first time that Spot has performed a dance at a sports event.” Boston Dynamics’ robot has taken on a number of jobs of late, as the company has offered the quadruped up for sale — a first in its 25+ year history. Construction and security are among the key uses for the ‘bot, though Softbank is obviously equally interested in putting on a show. Pepper, the product of Softbank’s 2015 acquisition of Aldebaran Robotics, meanwhile, has become a familiar sight in the hospitality industry.
When the shortened MLB season kicks off in States later this month, many teams will be filling stands with cardboard cutouts. The Oakland A’s, notably, announced a plan to charge fans to have their likeness appear on the life-size cardboard facades.
Over the past two decades, the venture capital industry has exploded beyond anyone’s wildest imaginations.
What began as a sleepy industry in Boston and Menlo Park has now expanded to dozens of cities the world over. The National Venture Capital Association estimates that VCs deployed more than $130 billion in 2018 and 2019, and thousands of new investors have joined the ranks in recent years to find the next great startups.
All that activity, though, poses a dilemma for founders: Who actively writes checks? Who is a leader in a specific market or vertical? Who has the conviction to underwrite pathbreaking investments? Who, ultimately, do you want to have by your side for the next decade as your startup grows?
There are lists that rank VCs by their exit returns. There are lists that rank young VCs by their potential. There are lists of VCs who claim investment interest in various sectors. There are lists that try to ferret out deal volume, impact and other quantitative metrics. There are internal lists at accelerators that share collective wisdom between founders.
Who actively writes checks? Who is a leader in a specific market or vertical? Who has the conviction to underwrite pathbreaking investments? Who, ultimately, do you want to have by your side for the next decade as your startup grows?
All those lists and rankings have an important function to serve, but for all the compilations of investors out there, we couldn’t find a single one that publicly answered a simple yet vital question: Who are the VC investors who are leaders in specific verticals who should be a founder’s first stop during a fundraise?
Today’s venture industry is made up of thousands of investors with varying specialties, and far too many passive investors that are willing to participate in rounds but don’t actively participate in deals unless other investors have committed. Many don’t actively push to get deals done or don’t actively lead the charge to build a syndicate of investors.
With all that in mind, we’re excited to launch a new initiative that we hope will help answer those questions and help founders find that first check — The TechCrunch List.
Over the next few weeks, we’re going to be collecting data around which individual investors are actually willing to write the proverbial “first check” into a startup’s fundraising round and help catalyze deals for founders — whether it be seed, Series A or otherwise (i.e. out of your Series A investors, the first person who was willing to write the check and get the ball rolling with other investors). Once we’ve collected, cleaned and analyzed the data, we’ll publish lists of the most recommended “first check” investors across different verticals, investment stages and geographies, so founders can see which investors are potentially the best fit for their company.
Founders are used to being specialized; after all, they have to live and breathe their startups every single day. So it can be jarring to start talking to generalist investors who know little about a category and ask shallow questions only to render a judgment with irrelevant advice. One of the greatest impetuses for us to put together The TechCrunch List is that like founders, we also struggle to cut through the noise around the interests of individual VCs.
We’d argue that’s close to impossible. There is more spend on technology than ever before in history. Verticals are getting more competitive — market maps that used to have 10 to 50 companies have expanded to hundreds. The only way to compete today is to specialize, and that has never been more true for VCs.
In all, The TechCrunch List will publish the most recommended “first check” writers across 22 different categories, ranging from D2C & e-commerce brands to space, and everything in between. Through some data analysis around total investments in each space, we believe our 22 categories should cover the entirety or majority of the venture activity today.
To make this project a success and create a useful resource for founders, we need your help. We want to hear from company builders and we want to hear from them directly.
To make this project a success and create a useful resource for founders, we need your help. We want to hear from company builders and we want to hear from them directly. We will be collecting endorsements submitted by founders through the form linked here.
Through the form, founders will be asked to submit their name, their startup, the stage of company, the name of the one “first check” investor they want to endorse and a couple of minor logistical items. We are asking founders here for their on-the-record endorsement. We ask that you limit your recommendations to one (1) person per fundraise round.
While many investors may have helped you in your journey, we are specifically interested in the person who most helped you get a round underway and closed. The one who catalyzed your round. The one who guided you through the fundraise process. The one investor you would ultimately recommend to other founders who are trying to find their VC champion.
Our main goal is to help founders, dreamers and company builders find investors who will invest in them today, and with your help, we think we can. The TechCrunch List is not meant to identify every possible investor under the sun who might make an investment within a space, nor just the big household-name VCs whose reputations can sometimes seem more linked to their follower counts on Twitter as opposed to their bold term sheets.
Our hope is that this can be a go-to resource for founders looking to fundraise going forward, and with that in mind, we are very determined to improve the glaring representation gaps in the venture industry. It’s no secret that the world of VC still looks like a country-club membership roster, dominated by white men with strong opinions and loud voices. Looking at the data, it’s clear that there are groups that are particularly underrepresented, with only a small portion of the industry made up of Black, Latinx and female investors, for example.
We want to amplify these voices and we want to hear particularly from founders of color, female founders and other underrepresented groups. We also want to make sure our recommended investor lists are sufficiently representative and highlight underrepresented investors who might not have had equal opportunities in the past.
We want to help builders wade through the BS politics and fundraising annoyances that founders complain to us about on a daily basis, and help them identify qualified leads that are actually active, engaged and specialized and are the best fit to help founders raise money and grow now.
Thank you for your support. We’re excited to build The TechCrunch List with you — and for you.
TechCrunch is focusing a bit more on the Boston-area startup and venture capital ecosystem lately, which has gone pretty well so far.
In fact, we had originally intended on releasing this regional investor survey as a single piece, but since so many VCs took part, we’re breaking it into two. The first part deals with the world we live in today, and the remainder will detail what Boston-area investors think about the future.
We broke our questions into two parts to better track investor sentiment. But, we were also curious what was going to come when things got back closer to normal. So, this first entry in our Boston investor survey covers our questions concerning what’s going on now. On Thursday we’ll have the second piece, looking at what’s ahead.
Here’s who took part:
What follows is a quick digest of what stood out from the collected answers, though there’s a lot more that we didn’t get to.
Parsing through thousands of words and notes from our participating VCs, a few things stood out.
Boston startups aren’t having as bad a time — yet, at least — as area investors expected
Fewer companies than they anticipated are laying off staff for example. From our perspective, the number of Boston investors who noted that their portfolio companies were executing layoffs or furloughs (we asked for each to be precise) was very low; far more Boston-area startups are hiring than even freezing headcount. Layoffs appear somewhat rare, but as we all know cost cutting can take many forms for startups. Especially startups on the seed and early-stage side, which makes up the majority of these firm’s portfolio companies.
According to Glasswing’s Rudina Seseri, startup duress has come in “significantly under what [her firm was] expecting at the beginning of COVID-19.”
This may be due to a strong first quarter helping companies in the city and its surrounding area make it another few quarters. We might not know the full bill of COVID-19 and its related disruptions until next year.
More investors than we expected noted that their Boston portfolio companies aren’t raising this year
So what we’re gleaning from that fact is that any decline in Q2 and Q3 VC data is not because companies can’t raise, but because they don’t need to. Comments echoed a theme we wrote about in April: Boston broke records in Q1 in terms of dollars raised, but saw a dip in the number of checks cut.
Pillar VC’s Jamie Goldstein said that “about 15% of our companies are planning to raise capital this year,” which felt about average. Underscore VC’s Lily Lyman simply noted that, “Yes,” her Boston-area portfolio companies would hunt for new capital this year. Bill Geary of Flare Capital is on the other side of that coin, saying that “each of [his firm’s] Boston-based investments has successfully recently raised capital and will not be raising additional funds until 2021.”
It’s hard not to wonder if what happened to Boston unicorns Toast and EzCater was the exception and not the rule
You see, Boston’s startup scene skews relatively early stage, so smaller companies don’t have high-profile cuts because, to be frank, there isn’t much staff to cut in the first place. It puts Boston in a unique setting to focus in on its early stage market, and investors all agreed that this is an important moment for the ecosystem.
The March-era stress tests are now months in the rearview mirror, and every startup has shaken up their spend and growth plans. Perhaps we have met the new normal, and it’s time to let the runway do the talking.
With that, let’s get into full questions and answers.
What is the top-line advice you’re giving your portfolio companies right now?
This is a pivotal time, be efficient and drive execution. Cut costs where possible but at the same time don’t be afraid to spend for growth acceleration.
What percentage of your Boston-based portfolio companies are still hiring, not including those merely backfilling?
What percentage of your Boston-based portfolio companies have frozen new hires?
What percentage of your Boston-based portfolio companies have furloughed staff?
What percentage of your Boston-based portfolio companies have cut staff?
One company that represents about 4% of the portfolio.
Are your Boston-based portfolio companies looking to raise new capital this year?
Most have raised recently, and consequently are not looking to raise at this time.
If not, are they often delaying due to COVID-19?
No, because of their recent raises, their fundraising considerations will take place in 2021.
Has duress amidst your Boston-based portfolio companies undershot, matched or overshot your expectations from March?
It has been significantly under what we were expecting at the beginning of COVID-19.
How has your investment appetite changed in terms of pace and location, if at all?
We have been very active and closed deals in this environment. Our expectation is that our investment appetite will remain the same going forward.
Are you making investments in Q2 into net-new founders and companies?
Yes, as a matter-of-fact we just closed a yet-to-be announced investment this month.
Are there particular sectors of startups in Boston that you expect to do well, aside from SaaS businesses that are benefiting from secular trends? Are there any sectors you have become newly bearish on?
Yes, those that are in our core focus areas — solutions that bring down the cost of cloud and data, platforms and tools leveraging AI, those that facilitate cost reduction, and intelligent solutions in cybersecurity that protect the enterprise.
How does the uncertainty of schools reopening impact the startup ecosystem?
This will further drive and institutionalize distributed teams and remote working as a go-forward mode of operating.
Every company today is struggling to deal with security and understanding what is happening on their systems. This is even more pronounced as companies have had to move their employees to work from home. Uptycs, a Boston-area security analytics startup, announced a $30 million Series B today to help companies to detect and understand breaches when they happen.
Sapphire Ventures led the round with help from Comcast Ventures and ForgePoint Capital. The startup has now raised a total of $43 million, according to the company. Under the terms of today’s deal Sapphire Ventures’ president and managing director Jai Das will be joining the company’s board.
Company co-founder and CEO Ganesh Pai says he and his co-founders previously worked at Akamai, where they observed Akamai’s debugging and diagnostic tools, which were designed to work at massive scale. The founders believed they could use a similar approach to building a security analytics platform, and in 2016 the group launched Uptycs.
“We help people to solve intrusion detection, compliance and audit and incident investigation. These are table stakes requirements [for security solutions] that most large scale organizations have, and of course with their scale the challenges vary. What we at Uptycs do is provide a solution for that,” Pai told TechCrunch.
The company uses a flight recorder approach to security, giving security operations teams the ability to sift through the data and review exactly how a detection happened and how the intruder got through the company’s defenses.
He recognizes his company is fortunate to get a round this large right now, but he says the solution has attracted a number of customers signing seven-digit contracts and this in turn got the attention of investors. “That customer engagement, their experience and this commitment from our customers led to this substantial round of funding,” he said.
The company currently has 65 employees spread across offices in Waltham, a Boston suburb, as well as two offices in India. Pai says the plan is to double that number in the next 12 months. “Between the cash flow from our existing customers and the pipeline for us and the funding, we are planning to grow in a meaningful way. If everything aligns with our expectation we will double our team size in the next 12 months,” he said.
As he grows his company in this way, Pai says they are talking to their investors about how to build a diverse workforce. “We’ve thought long and hard about it, both in terms of diversity and inclusion. It is a lot harder to execute because at the end of the day, there is a finite talent pool, but we are having conversations with our investors, who have seen patterns of success in terms of implementing such plans from growth stage ventures,” he said.
He added, “And of course we are a very early stage company, but we are extremely cognizant, and given the current circumstances are acutely aware that we need to do our very best and make a difference.”
As the company has moved to work from home across its operations, he says it has benefited from working in the cloud from the start. “As an organization we are very fortunate that we built our organization so that everything runs in the cloud and everyone has been able to remain very productive,” he said.
While we’re preparing to launch a six-wheeled robotic rover roughly the size of a car to explore Mars, future planetary exploration and science missions could employ much smaller hardware – including, potentially swarms of robots the size of insects designed to act in concert with one another autonomously.
Swarming insect-like robots are being developed by a number of different institutions and companies, but a researcher at California State University Northridge recently received a sizeable Department of Defense grant specially to fund the development of autonomous robot swarms for extraterrestrial applications – as well as for use right here on Earth in mining, industrial and search and rescue efforts.
The grant, for $539,000, was awarded to CSUN mechanical engineering professor Nhut Ho, who also directs the NASA Autonomous Research Center for STEAMH (which focuses on collaborative research efforts between Science, Technology, Entrepreneurship, Arts, Humanities and Mathematics academics, hence the acronym). The goal of the research is to build robotic swarms that can essentially be dropped into unknown and hostile environments, and then figure out how to complete specific tasks they’re given without essentially any additional input.
Ultimately, such a swarm would be able to perform complex problem solving to deal with challenges, including organizing themselves into different sized groups to handle different aspects of the task at hand, as well as dealing with setbacks including losing individual members of the swarm through redundancy and repurposing.
One way the system will be tested is through use with a collaborating team from NASA Jet Propulsion Laboratory (JPL) that seeks to find the best solutions for autonomously navigating and mapping underground environments.
As for why this approach is even being considered, there are a lot of potential benefits of using a swarm of small rovers vs. a single, large one. At a very basic level, there’s built-in redundancy – if a rover like NASA’s Perseverance encounters a fatal error, the mission is essentially done, while a swarm losing individual members shouldn’t end the entire mission. Also, a swarm can self-assemble into individual subunits and cover more ground more quickly, accomplishing a number of goals in parallel where a larger rover might have to handle tasks in sequence.
CSUN is working with partners including JPL, as mentioned, as well as Boston Dynamics, Intel, Clearpath Robotics, Telerob, Veoldyne and Silvus Technologies on its swarm project. It could be a while before any insect bots actually set ‘foot’ on the red planet, but this is definitely a strong sign of interest and support from large, deep-pocketed public funding sources.
As humans get used to working at a distance from each other, a startup in Massachusetts is providing sensors that bring industrial robots in close — centimeters away, in fact. The same technology may support future social distancing efforts on commutes, in a pilot application to allow more subway trains to run on a single track.
Humatics, an MIT spinout backed by Lockheed Martin and Airbus, makes sensors that enable fast-moving and powerful robots to work alongside humans without accidents. If daily work and personal travel to work ever go back to normal, the company believes the same precision can improve aging and crowded infrastructure, enabling trains and buses to run closer together, even as we all may have to get used to working further apart.
This is the emerging field of microlocation robotics — devices and software that help people and machines navigate collaboratively. Humatics has been testing its technology with New York’s MTA since 2018, and today is tracking five miles of a New York subway, showing the transportation authority where six of its trains are, down to the centimeter.
Image Credits: Humatics (opens in a new window)
Humatics’ technology in the MTA pilot uses ultrawide band (UWB) radio frequencies, which are less failure-prone than Wi-Fi, GPS and cameras.
“A good example of a harsh environment is a subway tunnel,” said David Mindell, co-founder of Humatics and professor of engineering and aerospace at MIT. “They are full of dust, the temperatures can range from subzero to 100 degrees, and there is the risk of animals or people tampering with devices. Working inside these tunnels is difficult and potentially dangerous for crews, also.”
Humatics has sold more than 10,000 UWB radio beacons, the base unit for their real-time tracking system, to manufacturers of sensor systems, the company says. They pinpoint the location of hundreds of RFID tags at a range of 500 meters, using multiple tags on an object to measure orientation.
We may be in the thick of a pandemic with all of the economic fallout that comes from that, but certain aspects of technology don’t change no matter the external factors. Storage is one of them. In fact, we are generating more digital stuff than ever, and Wasabi, a Boston-based startup that has figured out a way to drive down the cost of cloud storage is benefiting from that.
Today it announced a $30 million Series B led led by Forestay Capital, the technology innovation arm of Waypoint Capital with help from previous investors. As with the previous round, Wasabi is going with home office investors, rather than traditional venture capital firms. Today’s round brings the total raised to $110 million, according to the company.
While founder and CEO David Friend wouldn’t discuss the specific valuation, he did say it was in the hundreds of millions of dollars.
Friend says the company needs the funds to keep up with the rapid growth. “We’ve got about 15,000 customers today, hundreds of petabytes of storage, 2500 channel partners, 250 technology partners — so we’ve been busy,” he said.
He says that revenue continues to grow in spite of the impact of COVID-19 on other parts of the economy. “Revenue grew 5x last year. It’ll probably grow 3.5x this year. We haven’t seen any real slowdown from the Coronavirus. Quarter over quarter growth will be in excess of 40% — this quarter over Q1 — so it’s just continuing on a torrid pace,” he said.
He said the money will be used mostly to continue to expand its growing infrastructure requirements. The more they store, the more data centers they need and that takes money.
The challenge for a company like Wasabi, which is looking to capture a large chunk of the growing cloud storage market is the infrastructure piece. It needs to keep building more to meet increasing demand, while keeping costs down, which remains its primary value proposition with customers.
The money will help the company expand into new markets as many countries have data sovereignty laws that require data to be stored in-country.
The company launched in 2015. It previously raised $68 million in 2018.
Note: This article originally stated this was a debt financing round. The company has clarified that it is an equity round.
Polestar’s first U.S. retail stores will open in Los Angeles, New York City and two locations in San Francisco later this year — the latest milestone for the automaker as it gets closer to bringing its all-electric vehicle to market.
Polestar, which is jointly owned by Volvo Car Group and Zhejiang Geely Holding of China, was once a high-performance brand under Volvo Cars. The 2021 Polestar 2 is the first EV to come out of Polestar since it was recast as an electric performance brand in 2017.
The company has had plans to open physical retail showrooms called “Polestar Spaces.” Those plans have been delayed by stay-at-home orders prompted by the COVID-19 pandemic. The stores are expected to open in the second half of 2020.
Polestars plans to expand its retail footprint in the first half of 2021 with locations in Boston, Denver, Texas, Washington, D.C. and Florida. More than 80% of Polestar 2 reservation holders reside within a 150-mile range of the stores scheduled to open by mid 2021, according to Gregor Hembrough, head of Polestar USA.
Unlike the traditional dealership model, Polestar will sell or lease its cars online to customers in all 50 states. The physical stores, which will be in partnership with retailers such as Manhattan Motorcars, Galpin Motors and Price-Simms Automotive Group, are meant to supplement its digital strategy.
Like other accelerators, Techstars, a network of more than 40 corporate and geographically targeted startup bootcamps, has had to bring its marquee demo day events online.
Over the last two weeks of April, industry-focused accelerators working with startups building businesses around mobility technologies (broadly) and the future of the home joined programs in Abu Dhabi, Bangalore, Berlin, Boston, Boulder and Chicago to present their cohorts.
Each group had roughly 10 companies pitching businesses that ran the gamut from early-childhood education to capturing precious metals from the waste streams of mining operations. There were language companies, security companies, marketing companies and even a maker of a modular sous vide product for home chefs.
The ideas were as creative as they were varied, and while all seemed promising, about two concepts from each batch stood out above the rest.
What follows is our completely unscientific picks of the top companies that pitched at each of these virtual Techstars demo days. In late May or early June, expect to see our roundup of the next batch of top picks from the their next round of demo days.
Techstars’ inaugural cohort for its accelerator run in conjunction with Abu Dhabi-based technology incubator Hub71 included a number of novel businesses spanning climate, security, retail, healthcare and property tech. Standouts in this batch included Sia Secure and Aumet (with an honorable mention for the novel bio-based plastic processing and reuse technology developer, Poliloop).
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
This week we had a choice of all sorts of news, but as we cut the show together as a group Danny pushed all the funding rounds up. So, when Alex and Natasha jumped into the show we had a bunch of good news to cover. We’re avoiding COVID-19 news, but the pandemic is just a part of the broader stories we want to tell. For the foreseeable future, coronavirus will be always be part of our interviews. But the conversation can’t start and stop there.
So what was on the docket? Three things: Accelerator news for the early-stage founders, funding rounds, of course, and some layoff news that was worth mentioning as it might trickle down beyond the unfortunate hosts.
Here’s the rundown:
For two weeks, Boston Dynamics’ Spot robot has been walking the halls of local hospital Brigham and Women’s. Telemedicine wasn’t generally listed as one of the primary applications for the company’s first commercial product, but Boston Dynamics is only one in a long list of tech companies that’s found itself shifting on the fly as the COVID-19 pandemic has become an all-consuming part of life.
The company says hospitals have been reaching out since early March, asking if there might be a way to incorporate its technology to help with remote health.
“Based on the outreach we received as well as the global shortage of critical personal protective equipment (PPE), we have spent the past several weeks trying to better understand hospital requirements to develop a mobile robotics solution with our Spot robot,” the company writes. “The result is a legged robot that can be deployed to support frontline staff responding to the pandemic in ad-hoc environments such as triage tents and parking lots.”
Fitted with an iPad and a two-way radio, Spot is being used as a mobile teleconferencing system, allowing doctors to check in on patients without risking the spread of the highly contagious virus. It’s a fairly simple task — and one that a number of robotics companies have actively cracked.
While ultimately price-prohibitive for many healthcare facilities, Spot’s four-legged locomotion makes it possible for the robot to visit areas inaccessible for wheeled systems. The modularity always means it has the potential to accomplish further tasks. Boston Dynamics says it’s working on outfitting the robot with a system to detect vital signs like temperature, respiratory rate, pulse rate and oxygen saturation.
In the future, a UV light could also be mounted to the robot’s back to serve as a mobile disinfecting station.
Over the weekend, Silicon Valley leader Marc Andreessen broke his usual silence and gave some advice to Silicon Valley: It’s time to build. The famed investor urged CEOs, entrepreneurs and investors alike to welcome new companies into their circles.
The blog post details high-flying pieces of advice that could each land in a unique angle depending on where you sit. But as venture capitalists rush to prove they are open for business, the true test these days is a bit more grounded: cut checks and signed term sheets.
The words are eerily similar to the thesis of NextView Ventures, a Boston-based venture capital firm, and its new remote accelerator program, announced today.
“During this current COVID crisis, we have seen many VCs publicly saying that they are ‘open for business,’ but we wanted to put our money where our mouth is,” according to partner David Beisel.
Using money earmarked from its current fund, NextView will invest $200,000 for an 8% stake in fewer than 10 pre-seed and seed startups. The program will be fully virtual and is investing in founders that drive change in the “everyday lives of everyday people.”
Rob Go, the co-founder of NextView, tweeted about the launch today.
3. Startups looking to redesign the everyday lives of everyday people often look a little whacky and non-traditional. They aren't your typical enterprise SAAS sold to IT departments. Most VC's appetite for these kinds of companies will go down during this pandemic. But not ours.
— Rob Go (@robgo) April 20, 2020
The NextView accelerator is launching at a time when historical incubators like Y Combinator and 500 Startups are rethinking their independent strategies. Today Y Combinator announced its upcoming batch will be fully remote, and last month 500 Startups said it is scrapping its cohort model.
The firm also publicly said what it didn’t like about traditional accelerator programs, like big batch sizes and flashy demo days.
“Accelerators were at their best when they were small and intimate. YC’s initial batch was just eight companies,” Beisel said about the small number of participants. “But over time, accelerators became more of a numbers game.”
Beisel added, “traditional accelerator demo days originated as a way to showcase startups to follow-on investors, but eventually evolved into an elaborate show attempting to satisfy many constituents.”
Still, an unavoidable truth about demo days is that it connects startups to founders and ideally that first check. What happens to deal success when you don’t have a buzzy room of journalists, venture capitalists and bright lights on founder faces?
After YC and 500 Startups hosted their first-ever virtual demo days this year, we’ve heard grumblings of mixed results. Y Combinator last week changed from always investing in YC graduates to reviewing on a case by case basis, hinting at conservatism within the accelerator.
NextView also approaches post-accelerator funding conservatively. The firm says it will connect its small cohort to next-round investors, but will “intentionally not lead the next round of financing.” The firm is being upfront about its choice to not lead follow-on investing to “avoid potential signaling issues for future financings.” The company will participate with at least pro-rata for all companies in any subsequent round of financing to help the cohort.
An optimistic read of this decision is that NextView is viewing its accelerator as a separate function of its investment firm and wants to be more of a helper than a robust pipeline for deal flow. Alternatively, it could mean that the firm doesn’t want to over-promise capital in an unpredictable time for the economy. And in the chance that it does find a gem within this batch, it would be surprising for NextView to not invest in the company.
The bottom line is that NextView is launching an accelerator and investing in startups during a time when many are not. So while we’ll wait to see how successful the firm is in cultivating young startups with ripe returns, for now it’s building. And in today’s new normal, building is a welcome sign.
Before the COVID-19 pandemic shook up the world and reshaped the economy, Boston was quietly setting records.
According to new venture data compiled by TechCrunch, the region set what was at least a local maximum in venture capital raised in the space of a single quarter in Q1 2020.
But while Boston’s startup market announced a number of huge rounds that bolstered its total venture dollars raised in the first quarter, there were signs of weakness: Deal volume was its best since Q2 2019, according to a set of data compiled and released by PwC and CB Insights, but was still a little under the pace set in 2018.
So Boston’s startups raised lots of money, but couldn’t match prior highs when it came to the number of checks written. And those results were largely recorded before COVID-19 shuttered the city. Since then, we’ve seen a number of area startups lay off staff, something we explored last week.
Now, with fresh data in hand, we can take a closer look at the city’s first quarter of 2020. To better understand what we’re unpacking, we asked a number of local venture capitalists to weigh in. Let’s look back at Boston’s Q1 as we stride into Q2 with the help of Venture Lane, .406 Ventures, Volition Capital and Flybridge Capital Partners.
Starting with a programming note is counter-flow, but bear with us. TechCrunch is starting a regular, monthly series on Boston and its startup market. This is a second prelude of sorts. Normally we’d hold news and interviews for a later date so that we’d have plenty of material for a column. In the face of relentless change, however, we didn’t want to hold off on reporting and synthesizing new information. When things are more normal, our pace will follow.
Per PwC and CB Insights, here’s the last few quarters of data, along with a few yearly totals to draw you the picture we can now see:
As domestic and global economies grapple with the COVID-19 era, its impact on startups is coming into focus: All will be impacted, many will suffer and some will close.
Boston, a city that TechCrunch keeps tabs on, has seen a number of well-known startups struggle in recent weeks. Their misfortunes come quickly after companies in the region recorded huge venture raises, generating notable momentum.
In December, TechCrunch wrote that “despite winter’s chill, the Northeast’s tech ecosystem is white-hot,” taking into account Boston’s historical gains in the venture world. And earlier in 2020 we covered a few huge rounds that the city’s own Toast and Flywire had put together; worth $520 million as a pair, the two venture deals stood out for how large they were and how close to one another they were announced.
Indeed, looking at preliminary venture data from Crunchbase, Boston was on track to crush its 2019 tally of venture rounds of $50 million or more in 2020. That record-setting pace is now in doubt.
To get a feel for Boston’s new reality, we’ve collected the region’s recent news and spoke to area investors and founders, including David Cancel of Drift (the previous founder of Compete and other companies), Drew Volpe of First Star VC and a team of folks from Underscore VC.
TechCrunch had intended to start a monthly series on Boston and its venture capital and startup scenes later this month. We’re kicking it off early because the news is already here.
Earlier this week, restaurant management platform Toast cut 50% of its staff. The Boston-based company was valued at $5 billion in recent months, and — before the pandemic hit — was planning to spend the next few years gearing up to go public. Toast sits uniquely between fintech and restaurant tech, industries that have been arguably impacted the most by COVID-19’s spread and widespread restaurant closures.