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Creating a prediction machine for the financial markets

By Walter Thompson
Fayze Bouaouid Contributor
Fayze Bouaouid is co-founder and CEO of financial intelligence application Springbox AI. He has a Master's of Science in Banking and Finance and nearly two decades of experience in banking and asset management.

Artificial intelligence and machine-learning technologies have evolved a lot over the past decade and have been useful to many people and businesses, especially in the realm of finance, banking, investment and trading.

In these industries, there are many activities that machines can perform better and faster than humans, such as calculations and financial reporting, as long as the machines are given the complete data.

The AI tools being built by humans today are becoming another level more robust in their ability to predict trends, provide complex analysis, and execute automations faster and cheaper than humans. However, there has not been an AI-powered machine built yet that can trade on its own.

There are many activities that machines can perform better and faster than humans, such as calculations and financial reporting, as long as the machines are given the complete data.

Even if it was possible to train such a system that could replace human judgment, there would still be a margin of error, as well as some things that are only understandable by human beings. Humans are still ultimately responsible for the design of AI-based prediction machines, and progress can only happen with their input.

Data is the backbone of any prediction machine

Building an AI-based prediction machine initially requires an understanding of the problem being solved and the requirements of the user. After that, it’s important to select the machine-learning technique that will be implemented, based on what the machine will do.

There are three techniques: supervised learning (learning from examples), unsupervised learning (learning to identify common patterns), and reinforcement learning (learning based on the concept of gamification).

After the technique is identified, it’s time to implement a machine-learning model. For “time series forecasting” — which involves making predictions about the future — long short-term memory (LSTM) with sequence to sequence (Seq2Seq) models can be used.

LSTM networks are especially suited to making predictions based on a series of data points indexed in time order. Even simple convolutional neural networks, applicable to image and video recognition, or recurrent neural networks, applicable to handwriting and speech recognition, can be used.

Anthony Lin named permanent managing director and head of Intel Capital

By Ron Miller

When Wendell Brooks stepped down as managing partner and head of Intel Capital last August, Anthony Lin was named to replace him on an interim basis. At the time, it wasn’t clear if he would be given the role permanently, but today, six months later, the answer is known.

In a letter to the firm’s portfolio CEOs published on the company website, Lin mentioned, almost casually, that he had taken on the two roles on a permanent basis. “Personally, I want to share that I have been appointed to managing partner and head of Intel Capital. I have been a member of the investment committee for the past several years and am humbly awed by the talent of our entrepreneurs and our team,” he wrote.

Lin takes over in a time of turmoil for Intel as the company struggles to regain its place in the semiconductor business that it dominated for decades. Meanwhile, Intel itself has a new CEO with Pat Gelsinger returning in January from VMware to lead the organization.

As the corporate investment arm of Intel, it looks for companies that can help the parent company understand where to invest resources in the future. If that is its goal, perhaps it hasn’t done a great job, as Intel has lost some of its edge when it comes to innovation.

Lin, who was formerly head of mergers and acquisitions and international investing at the firm, can use the power of the firm’s investment dollars to try to help point the parent company in the right direction and help find new ways to build innovative solutions on the Intel platform.

Lin acknowledged how challenging 2020 was for everyone, and his company was no exception, but the firm invested in 75 startups, including 35 new deals and 40 deals involving companies in which it had previously invested. It has also made a commitment to invest in companies with more diverse founders. To that end, 30% of new venture-stage dollars went to startups led by diverse leaders, according to Lin.

What’s more, the company made a five-year commitment that 15% of all its deals would go to companies with Black founders. It made some progress toward that goal, but there is still a ways to go. “At the end of 2020, 9% of our new venture deals and 15% of our venture dollars committed were in companies led by Black founders. We know there is more progress to be made and we will continue to encourage, foster and invest in diverse and inclusive teams,” he wrote.

Lin faces a big challenge ahead as he takes over a role that had the same leader for the first 28 years in Arvind Sodhani. His predecessor, Brooks, was there for five years. Now it passes to Lin, and he needs to use the firm’s investment might to help Gelsinger advance the goals of the broader firm, while making sound investments.

Check out the incredible speakers joining us on Extra Crunch Live in March

By Jordan Crook

Extra Crunch Live is off to a kick-ass start this year. Lightspeed’s Gaurav Gupta and Grafana’s Raj Dutt taught us how to nail the narrative. Felicis Ventures’ Aydin Senkut and Guideline’s Kevin Busque showed us how valuable a simple pitch deck can be. And just yesterday, Accel’s Steve Loughlin and Ironclad’s Jason Boehmig discussed the challenges of pricing and packaging your product. Next week, we’ll sit down with Bain Capital Ventures’ Matt Harris and Justworks’ Isaac Oats.

For those of you who followed the series last year, Extra Crunch Live is a brand new beast in 2021: we take a look at early stage funding deals through the eyes of the founders and investors who made them happen, and those same tech leaders go through your pitch decks and give feedback and advice. Every single Wednesday at 12 p.m. PST/3 p.m. EST!

Extra Crunch Live is available for EC members only. It is but one of the many reasons to join Extra Crunch, including but not limited to Investor Surveys, Market Maps, and the EC Perks Program. Interested? Hit up this link to get started.

Today, I’m thrilled to announce the March slate for Extra Crunch Live. (Registration info for these events is at the bottom of the post.)


Sarah Kunst (Cleo Capital) + Julia Collins (Planet FWD)

March 10, 12pm PT/3pm ET

Julia Collins built a unicorn in the form of Zume, a robotics-focused pizza startup. Her latest venture, Planet FWD, has raised $2.7 million for climate-friendly food. Sarah Kunst, managing director of Cleo Capital invested in the round, adding Planet FWD to a portfolio that includes mmhmm, Lunch Club, StyleSeat and more. Hear why they chose one another, what matters most in the relationship between an investor and a founder, and get their live feedback on audience-submitted pitch decks.


Emmalyn Shaw (Flourish Ventures) + Adam Roseman (Steady)

March 17, 12pm PT/3pm ET

Emmalyn Shaw co-manages a $500 million fintech fund in Flourish Capital, with portfolio companies that include Brigit, Chime, Clerkie, Cushion, EarnUp, Kin, Propel, and SeedFi. She also led the Series A deal for Steady, founded by Adam Roseman, back in 2018. Hear from Emmalyn and Adam about how they came together, what it takes to get funding and be successful in the fintech space, and get their live feedback on audience-submitted pitch decks.


Navin Chaddha (Mayfield) + Manish Chandra (Poshmark)

March 24, 12pm PT/3pm ET

Poshmark raised upwards of $150 million before filing to go public in 2019. Today, it has a market cap north of $5 billion. Mayfield’s Navin Chaddha led the company’s Series A all the way back in 2011, back when Poshmark was called Gosh Posh. Hear Chaddha and Poshmark founder Manish Chandra discuss a decade of growth, and walk us through how they came together more than ten years ago. Then the duo will take a look at pitch decks submitted by audience members.


As a reminder, Extra Crunch Live is available for EC members only. It is but one of the many reasons to join Extra Crunch, including but not limited to Investor Surveys, Market Maps, and the EC Perks Program. Interested? Hit up this link to get started.

Register for the March episodes of Extra Crunch Live below.

See you there!

Volta Energy Technologies raises over $90M of a targeted $150M fund to back energy storage startups

By Jonathan Shieber

Volta Energy Technologies, the energy investment and advisory services firm backed by some of the biggest names in energy and energy storage materials, has closed on nearly $90 million of a targeted $150 million investment fund, according to people familiar with the group’s plans.

The venture investment vehicle compliments an $180 million existing commitment from Volta’s four corporate backers — Equinor, Albermarle, Epsilon, and Hanon Systems — and comes at a time when interest in energy storage technologies couldn’t be stronger. 

As the transition away from internal combustion engines and hydrocarbon fuels begins in earnest companies are scrambling to drive down costs and improve performance of battery technologies that will be necessary to power millions of electric cars and store massive amounts of renewable energy that still needs to be developed.

“Capital markets have noticed the enormity of the opportunity in transitioning away from carbon,” said Jeff Chamberlain, Volta’s founder and chief executive.

Born of an idea that that began in 2012 when Chamberlain began talking with the head of the Department of Energy under the Obama Administration back in 2014. What began when Chamberlain was at Argonne National Lab leading the development of JCESR, the lead lab in the US government’s battery research consortium, evolved into Volta Energy as Chamberlain pitched a private sector investment partner that could leverage the best research from National Laboratories and the work being done by private industry to find the best technology.

Support for the Volta project remained strong through both public and private institutions, according to Chamberlain. Even under the Trump Administration, Volta’s initiative was able to thrive and wrangle some of the biggest names in the chemicals, utility, oil and gas and industrial thermal management to invest in a $180 million fund that could be evergreen, Chamberlain said.

According to people with knowledge of the organizations plans, the new investment fund which is targeting $150 million but has hard cap of $225 million would compliment the existing investment vehicle to give the firm more firepower as additional capital floods into the battery industry.

Chamberlain declined to comment specifically on the fund, given restrictions, but did say that his firm had a mandate to invest in technology that is battery and storage related and that “enables the ubiquitous adoption of electric vehicles and the ubiquitous adoption of solar and wind.”

Back during the first cleantech boom the brains behind Volta witnessed a lot of good money getting poured into bad ideas and vaporware that would never amount to commercial success, said Chamberlain. Volta was formed to educate investors on the real opportunities that scientists were tracking in energy storage and back those companies with dollars.

“We knew that investors were throwing money into a dumpster fire. We knew it could have a negative impact on this transition to carbon,” Chamberlain said. “Our whole objective was to help guide individuals deploying massive amounts of their personal wealth and move it from putting money into an ongoing dumpster fire.”

That mission has become even more important as more money floods into the battery market, Chamberlain said.

The SPAC craze set off by Nikola’s public offering in electric vehicles and continuing through QuantumScape’s battery SPAC through a slew of other electric vehicle offerings and into EV charging and battery companies has made the stakes higher for everyone, he said.

Chamberlain thinks of Volta’s mission as finding the best emerging technologies that are coming to market across the battery and power management supply chain and ensure that as manufacturing capacity comes online, the technology is ready to meet growing demand.

“Investors who do not truly understand the energy storage ecosystem and its underlying technology challenges are at a distinct disadvantage,” said Goldman Sachs veteran and early Volta investor Randy Rochman, in a statement. “It has become abundantly clear to me that nothing happens in the world of energy storage without Volta’s knowledge. I can think of no better team to identify energy storage investment opportunities and avoid pitfalls.”  

The new fund from Volta has already backed a number of new energy storage and enabling technologies including: Natron, which develops high-power, fire-safe Sodium-ion batteries using Prussian blue chemistry for applications that demand a quick discharge of power; Smart Wires, which develops hardware that acts as a router for electricity to travel across underutilized power lines to optimize the integration of renewable power and energy storage on the grid; and Ionic Materials, which makes solid lithium batteries for both transportation and grid applications. Ionic Materials’ platform technology also enables breakthrough advancements in other growing markets, such as 5G mobile, and rechargeable alkaline batteries. 

 

Census raises $16M Series A to help companies put their data warehouses to work

By Frederic Lardinois

Census, a startup that helps businesses sync their customer data from their data warehouses to their various business tools like Salesforce and Marketo, today announced that it has raised a $16 million Series A round led by Sequoia Capital. Other participants in this round include Andreessen Horowitz, which led the company’s $4.3 million seed round last year, as well as several notable angles, including Figma CEO Dylan Field, GitHub CTO Jason Warner, Notion COO Akshay Kothari and Rippling CEO Parker Conrad.

The company is part of a new crop of startups that are building on top of data warehouses. The general idea behind Census is to help businesses operationalize the data in their data warehouses, which was traditionally only used for analytics and reporting use cases. But as businesses realized that all the data they needed was already available in their data warehouses and that they could use that as a single source of truth without having to build additional integrations, an ecosystem of companies that operationalize this data started to form.

The company argues that the modern data stack, with data warehouses like Amazon Redshift, Google BigQuery and Snowflake at its core, offers all of the tools a business needs to extract and transform data (like Fivetran, dbt) and then visualize it (think Looker).

Tools like Census then essentially function as a new layer that sits between the data warehouse and the business tools that can help companies extract value from this data. With that, users can easily sync their product data into a marketing tool like Marketo or a CRM service like Salesforce, for example.

Image Credits: Census

Three years ago, we were the first to ask, ‘Why are we relying on a clumsy tangle of wires connecting every app when everything we need is already in the warehouse? What if you could leverage your data team to drive operations?’ When the data warehouse is connected to the rest of the business, the possibilities are limitless.” Census explains in today’s announcement. “When we launched, our focus was enabling product-led companies like Figma, Canva, and Notion to drive better marketing, sales, and customer success. Along the way, our customers have pulled Census into more and more scenarios, like auto-prioritizing support tickets in Zendesk, automating invoices in Netsuite, or even integrating with HR systems.

Census already integrates with dozens of different services and data tools and its customers include the likes of Clearbit, Figma, Fivetran, LogDNA, Loom and Notion.

Looking ahead, Census plans to use the new funding to launch new features like deeper data validation and a visual query experience. In addition, it also plans to launch code-based orchestration to make Census workflows versionable and make it easier to integrate them into enterprise orchestration system.

Wholesale marketplace Abound raises $22.9M

By Anthony Ha

Abound, an online marketplace that helps independent retailers stock their shelves with new products from up-and-coming brands, is announcing that it has raised $22.9 million in its first institutional round of funding.

CEO Bill Shope founded the company with Niklas de la Motte and Drew Sfugaras. He told me that small retailers are constantly on the hunt for new products, which means attending trade shows several times a year. Abound, on the other hand, allows them to find those products through an online shopping experience, with wholesale prices (a.k.a. discounts of up to 50 percent), free returns and, in some cases, Net 60 sale terms (meaning retailers don’t have to pay until 60 days after the invoice).

The startup actually began as a community connecting manufacturer’s representatives and retailers, but Shope said the team “kept seeing the limits of that model,” while some retailers were asking to buy from the brands directly. So the team decided to support that experience, starting out by recruiting 50 brands with an offer of free consulting — as long as they were willing to be one of the brands on the marketplace when it launched in October 2019.

Of course, the retail environment changed dramatically in the following months, as the pandemic forced stores to close and/or adopt social distancing measures. Shope said the startup saw a dramatic, short-term decline in sales — but things quickly bounced back and kept growing as “all the trade shows got canceled.”

Partly, that’s because Abound also supports e-commerce retailers, but Shope noted that “the brick and mortars that were succeeding had a very powerful hybrid model,” where they continued to operate a physical store while also quickly launching websites and adding features like curbside pickup.

Abound screenshot

Image Credits: Abound

Abound says that since the beginning of 2020, it has added 180,000 new products in categories like baby and kid products, beauty, food and drink, home and living, jewelry and more. And monthly sales volume has increased 20-fold.

“From a retail perspective, I don’t think there’s any going back [to pre-COVID buying models,]” Shope said. After all, even before the pandemic, independent retailers had to compete with giants like Amazon and Walmart. “You’re not going to beat them on convenience products. The store that’s helping consumers discover new brands, or donating 10 percent of profits to charities — those are types of stories and products you need to have to draw consumers into your store.”

The funding was led by Left Lane Capital, with participation from RiverPark Ventures, All Iron Ventures and branding firm Red Antler. This will allow Abound to grow the team, expand internationally and continue developing the product.

In a statement, Left Lane Managing Partner Harley Miller said:

My family has been in independent retail for the last 20 years. Growing up, I attended many industry events, so I have long understood how under-optimized the wholesale buying and selling experience is. With the cancellation of most major trade shows in 2020 and 2021, emerging brands and independent retailers have been seeking new distribution channels to support their business ambitions. Abound offers an exciting and unique alternative to the legacy wholesale model at a time when small businesses need it most.

Torii announces $10M Series A to automate SaaS management

By Ron Miller

Today, that software is offered as a cloud service should be pretty much considered a given. Certainly any modern tooling is going to be SaaS, and as companies and employees add services, it becomes a management nightmare. Enter Torii, an early-stage startup that wants to make it easier to manage SaaS bloat.

Today, the company announced a $10 million Series A investment led by Wing Venture Capital with participation from prior investors Entree Capital, Global Founders Capital, Scopus Ventures and Uncork Capital. The investment brings the total raised to $15 million, according to the company. Under the terms of the deal, Wing partner Jake Flomenberg is joining the board.

Uri Haramati, co-founder and CEO, is a serial entrepreneur who helped launch Houseparty and Meerkat. As a serial founder, he says that he and his co-founders saw first-hand how difficult it was to manage their companies’ SaaS applications and the idea for Torii developed from that.

“We all felt the changes around SaaS and managing the tools that we were using. We were all early adopters of SaaS. We all [took advantage of SaaS] to scale our companies and we felt the same thing: The fact is that you just can’t add more people who manage more software, it just doesn’t scale,” Haramati told me.

He said they started Torii with the idea of using software to control the SaaS sprawl they were experiencing. At the heart of the idea was an automation engine to discover and manage all of the SaaS tools inside an organization. Once you know what you have, there is a no-code workflow engine to create workflows around those tools for key activities like onboarding or offboarding employees.

Torii no code workflow engine.

Torii Workflow Engine. Image Credits: Torii

The approach seems to be working. As the pandemic struck in 2020, more companies than ever needed to control and understand the SaaS tooling they had, and revenue grew 400% YoY last year. Customers include Delivery Hero, Chewy, Monday.com and Palo Alto Networks.

The company also doubled its employees from a dozen they started last year with with plans to get to 60 people by the end of this year. As they do that, as experienced entrepreneurs Haramati told me they already understood the value of developing a diverse and inclusive workforce, certainly around gender. Today, the team is 25 people with 10 being women and they are working to improve those ratios as they continue to add new people.

Flomenberg invested in Torii because he was particularly impressed with the automation aspect of the company and how it took a holistic approach to the SaaS management problem, rather than attempting to solve one part of it. “When I met Uri, he described this vision. It was really to become the operating system for SaaS. It all starts with the right data. You can trust data that is gathered from [multiple] sources to really build the right picture and pull it together. And then they took all those signals and they built a platform that is built on automation,” he said.

Haramati admits that it’s challenging to scale in the midst of a pandemic, but the company is growing and is already working to expand the platform to include product recommendations and help with compliance and cost control.

Proptech startup Knock secures $20M to grow SaaS platform for property managers

By Mary Ann Azevedo

In recent years, the U.S. has seen more renters than at any point since at least 1965, according to a Pew Research Center analysis of Census Bureau housing data. 

Competition for renters is fierce and property managers are turning to technology to get a leg up.

To meet that demand, Seattle-based Knock – one startup that has developed tools to give property management companies a competitive edge – has raised $20 million in a growth funding round led by Fifth Wall Ventures.

Existing backers Madrona Venture Group, Lead Edge Capital, Second Avenue Partners and Seven Peaks Ventures also participated in the financing, which brings the company’s total capital raised to $47 million.

Demetri Themelis and Tom Petry co-founded Knock in 2014 after renting “in super competitive markets” such as New York City, San Francisco and Seattle. 

“After meeting with property management companies, it was eye-opening to learn about the total gap across their tech stacks,” Themelis recalled.

Knock’s goal is to provide CRM tools to modernize front office operations for these companies so they can do things like offer virtual tours and communicate with renters via text, email or social media from “a single conversation screen.” For renters, it offers an easier way to communicate and engage with landlords. 

“Apartment buildings, like almost every customer-driven business, compete with each other by attracting, converting and retaining customers,” Themelis said. “For property management companies, these customers are renters.”

The startup — which operates as a SaaS business — has seen an uptick in growth, quadrupling its revenue over the past two years. Its software is used by hundreds of the largest property management companies across the United States and Canada and has more than 1.5 million apartment units using the platform. Starwood Capital Group, ZRS, FPI and Cushman & Wakefield (formerly Pinnacle) are among its users.

As Petry explains it, Knock serves as the sales inbox (chat, SMS, phone, email), sales calendar and CRM systems, all in one. 

“We also automate certain sales tasks like outreach and appointment scheduling, while also surfacing which sales opportunities need the most attention at any given time, for both new leases as well as renewals,” he said.

Image Credit: Knock

The company, Themelis said, was well-prepared for the impact of the COVID-19 pandemic.

“Our software supports property management companies, which operate high-density apartment buildings that people live and work in,” he told TechCrunch. “You can’t just ‘shut them down,’ which has made multifamily resilient and even grow in comparison to retail and industrial real estate.”

For example, when lockdowns went into effect, in-person property tours declined by an estimated 80% in a matter of weeks.

Knock did things like help property managers transition to a centralized and remote leasing model so remote agents could work across a large portfolio of properties rather than in a single on-site leasing office, noted Petry.

It also helped them adopt self-guided, virtual and live video-based leasing tools, so prospective renters could tour properties in person on their own or virtually.

“This transformation and modernization became a huge tailwind for our business in 2020,” Petry said. “Not only did we have a record year in terms of new customers, revenue growth and revenue retention, but our customers outperformed market averages for occupancy and rent growth as well.”

Looking ahead, the company says it will be using its new capital to (naturally!) hire across product, engineering, sales, marketing, customer success, finance and human resources divisions. It expects to grow headcount by 40% to 50% before year-end. It also plans to expand its product portfolio to include AI communications, fraud prevention, applicant screening and leasing, and intelligent forecasting. 

Fifth Wall partner Vik Chawla, who is joining Knock’s board of directors, pointed out that the macroeconomic environment is driving institutional capital into multifamily real estate at an accelerated pace. This makes Knock’s offering even more timely in its importance, in the firm’s view.

The startup, he believes, outshines its competitors in terms of quality of product, technical prowess and functionality.

“The Knock team has accomplished so much in just a short period of time by attracting very high quality product design and engineering talent to ameliorate a nuanced pain point in the tenant acquisition process,” Chawla told TechCrunch.

In terms of fitting with its investment thesis, Chawla said companies like Knock can both benefit from Fifth Wall’s global corporate strategic partners “and simultaneously serve as a key offering which we can share with real estate industry leaders in different countries as a potential solution for their local markets.”

Emerging as an Eastern powerhouse, Earlybird Digital East Fund launches new $242M fund

By Mike Butcher

Earlybird Digital East Fund — a fund associated with Germany’s Earlybird VC, but operating separately — has launched a €200m ($242m) successor fund. The fund’s focus will remain the same as before: a Seed and Series-A fund focusing on what’s known as ‘Emerging Europe’, in other words, countries stretching from the Baltics to Central and Eastern Europe, and Turkey. The firm has also promoted Mehmet Atici, who’s been with the firm for eight years, to Partner. The new fund has made four investments so far: FintechOS, Payhawk, Picus, and Binalyze.

The back-story to DEF is a fascinating tale of what happened to Europe in the last 15 years, as tech took off and Europeans returned from Silicon Valley.

Following his exit from SelectMinds (where he was the Founder & CEO) in 2005, Cem Sertoglu moved back to Turkey. Although he says he “accidentally became the first angel investor” there, he was clearly the right man, in the right place, at the right time. He told me: “I was very lucky and ended up writing the first checks in some of the first large outcomes in Turkey.”

In 2013, Sertoglu partnered with Evren Ucok (the first angel in Peak Games and Trendyol), and Roland Manger (Earlybird). Dan Lupu, a Romanian investor who had covered the region for Intel Capital, joined them, and together they raised the ‘Earlybird Digital East Fund I’ set at $150m fund in 2014, focusing on CEE and Turkey. This was and is an area where there can be high-quality ventures to be found, but very little in the way of VC. 

Thereafter, between 2014 and 2019, the fund invested in UiPath, Hazelcast, and Obilet. UiPath has become a global leader in the area known as ‘Robotic Process Automation (RPA). Hazelcast is a low latency data processing platform startup with Turkish roots. Obilet is a marketplace focused for the massive Turkish intercity bus travel market. DEF has also exited Vivense, Dolap, and EMbonds and in more recent times the fund has exited Vivense, the “Wayfair of Turkey” to Actera, the top local PE fund.

The team had spectacular early success. Peak Games, Trendyol, YemekSepeti and GittiGidiyor are the four largest Turkish tech exits to date. Digital East Fund was an investor in all of them. Peak games exited for $1.8 billion in cash to Zynga only last year.

As of Q4 2020, the fund’s metrics are:
Investment Multiple: 24.9x
Gross IRR: 104.4%
Net IRR: 84.1%

So in VC terms, they have done pretty well.

I interviewed Sertoglu to unpack the story of Earlybird Digital East Fund.

He told me DEF has achieved a 17 times investment multiple on a $150 million fund. He thinks “this might be the biggest European VC fund performance in history, and it’s not coming from Berlin, it’s not coming from London, but it’s coming from Eastern Europe. We have been told by some of our LPs that they think we’re the top 2014 vintage VC fund in the world, nobody’s seen stronger numbers than this.”

“Peak Games turned out to be a phenomenal story. When you look at how tough it’s been for Turkey, macroeconomically. The fact that a single company with 100 people essentially sold for $1.8 billion in cash, was just… it was staggering for the local market here.”

DEF’s emergence from Turkey, together with its relationship with a fund in Berlin, was not the most obvious path for the VC fund.

“One thing we realized early one was that we could invest with our own capital and syndicating to our friends, but for follow-on funding, we’d always have to go global. And that made us feel vulnerable. It made us feel we were always dependent on others’ comprehension of the opportunity that we were facing. So that’s when the first fund idea came out this was,” said Sertoglu.

“We felt that there was this unusual dislocation between opportunity and capital in Eastern Europe. Our first fund was $150 million funds – I mean, a very quaint size compared to Western markets. But we became the largest fund in the region, and decided to focus on this series A gap where we felt that there was this big opportunity, because of the way we think series A is still very much a local play.”

“Being a local player that understands the region would be an advantage, so this was proven to be true. We could essentially see pretty much everything in Eastern Europe for the last eight years. And we caught the biggest one, fortunately, which was UiPath. I think very few funds around the world can say that they see the majority if not all of the opportunities that fall into their mandate,” he said.

“We have this dual strategy of backing local champions as well as contenders for global markets as well. 20 years ago you had to be in Silicon Valley. Now, Transferwise comes out of Estonia, UiPath comes out of Romania. And that was even before the pandemic.”

Sertoglu concluded: “So we now have fresh capital, coming on the heels of a very successful first fund, which we’re keen to deploy. We’re calling all the opportunities, seeing very ambitious, strong teams coming out of the region. And we have 200 million euros to focus on these types of opportunities in the region.”

Pandemic-era growth and SPACs are helping edtech startups graduate early

By Natasha Mascarenhas

Special purpose acquisition vehicles regained popularity in 2020 as an alternative way to take startups public, and now they are eyeing edtech companies.

So far, Skillsoft has gone public through Churchill Capital, and Nerdy, parent company of Varsity Tutors, did the same through a reverse merger with TPG Pace Tech Opportunities. On the investor side, Edify and Adit EdTech Acquisition are both separate, $200 million SPACs for education companies.

SPACs are not being used to prop up companies that can’t go public through traditional means.

But is there anything specific to SPACs that makes them a better route for edtech companies than a traditional IPO or direct listing? To explore the question, I reached out to Chuck Cohn, CEO of Nerdy, which is currently in the process of being SPACed by TPG, and Susan Wolford, chairperson of Edify Acquisition, a $200 million SPAC for edtech companies.

Nerdy’s business is growing, but the company doesn’t expect to be profitable until 2023 and wants to drive revenues up 31% and 43% from its 2020 and 2021 expectations, respectively. Cohn said the balance sheet looks the way it does because they are heavily investing in product and engineering, and focusing on being well-capitalized.

The SPAC, he said, is an opportunity to accelerate Nerdy’s core business: “It’s less about going into the public markets, and more about that this transaction allows us to take an offensive position and lean into the big opportunities.”

Cohn said they pursued a SPAC because it is a faster route to going public. As vaccines roll out, growth in remote learning will slow, which could hurt growth expectations — especially ones as ambitious as Nerdy’s. For that reason, it’s clear why some edtech companies want to get out to the public markets as soon as possible.

Despite some naysayers, Cohn said SPACs are not being used to prop up companies that can’t go public through traditional means.

“I think that perception was fair a year ago,” he said. “But if you look at companies that have taken this route recently, including OpenDoor, they are very high quality. There’s a fundamental perception change.” He added that “SPACs have been reaching out over the years,” but the timing felt more fortuitous due to TPG’s interest and track record.

On the other side of the table, Wolford said she is currently searching for an edtech company to bring public on behalf of Edify, a $200 million SPAC she has raised. She noted that PIPE instruments, aka private investments in public entities, have helped de-risk SPACs for the general audience. These instruments have been around for decades, but Wolford said they recently became more mainstream to use in SPACs.

Join Fuel Capital’s Leah Solivan at TC Early Stage and hear how to avoid early founder mistakes

By Darrell Etherington

When you’re just starting out building your company, there’s obviously a lot that can go wrong. Especially if you’re a first-time founder (but even if you’re an experienced serial entrepreneur), it can be hard to spot the potential pitfalls that might lead you astray before you even really get rolling. That’s why we’re thrilled to have Fuel Capital General Partner Leah Solivan joining us at TechCrunch Early Stage – Operations and Fundraising on April 1 & 2 for a discussion about how to avoid making some of the biggest mistakes early in your founding journey.

Solivan brings her keen insight as an early-stage investor who has invested in and helped many early-stage companies spanning consumer tech, marketplaces, hardware and retail — but also her eight years of experience leading TaskRabbit, the startup she founded and led to a successful exit when it was acquired by IKEA in 2017. Between her time as an operator building a successful business and raising more than $50 million in venture funding, and her nearly four years investing and helping other founders build companies with Fuel, Solivan has unparalleled perspective on how to avoid common company-building problems early on.

Fuel CapitalGeneral Partner Leah Solivan. Image Credits: Meg Messina

At TC Early Stage this year, our two-day virtual event focused on entrepreneurs turning their startup dreams into reality, we’re focusing on both operations and fundraising, with a variety of top speakers ranging from investors, to accelerator managers, to subject-matter experts in key roles that startups need to invest in early on. The fully virtual event will include not only virtual panel discussions and interviews like our chat with Solivan, but also plenty of networking and opportunities for audience participation with our world-class speakers and guests.

Why two startups are betting on debt instead of equity

By Mary Ann Azevedo

When there’s a need for capital, not every startup goes the venture route.

Boast.ai, a company that plugs into business systems and automatically finds them R&D tax breaks, announced Wednesday it has raised a $100 million credit facility from Brevet Capital to advance those R&D incentives.

And proptech startup States Title announced it has closed on $150 million in debt financing from HSCM Bermuda, which had previously invested in the company. 

States Title has developed patented machine learning technology that it says reduces title processing time from five days to “as little as one minute” and cuts down the entire mortgage closing process “from a 40+ day ordeal to as little as six days.” 

I was curious as to why these companies chose to go after debt/credit as opposed to raising venture capital. 

For Boast.ai, which was bootstrapped until it raised a $23 million Series A last December and is profitable, it boiled down to simple economics.

“Equity is expensive,” Lloyed Lobo, co-founder and president at Boast.ai, told TechCrunch via email. “Plus you bring on a range of partners that you have to be answerable to. For example, if you raise capital, you’re paying a return on the capital you raise no matter what you do with it. Credit facility is more like you have $100 million to deploy as you go and we have the option to extend that to $500 million.”

The company’s vision, he said, is to automate access to billions in R&D tax credits and innovation incentives to help businesses fuel their growth without giving up equity and dealing with red tape.

Proving R&D costs to the U.S. and Canadian government to get tax breaks is a lengthy and time-consuming process. Boast.ai’s offering plugs into a company’s business tools to automatically calculate R&D expenses, and then advances money for the R&D incentives. Boast.ai makes money by charging a fee to the company depending on the credit they have to pay once they receive it.

For States Title, which raised a $123 million Series C last March, debt was a more appealing option than raising more equity.

The COVID-19 pandemic led to record low interest rates, which led to an increased number of people re-financing and/or buying homes. This led to more demand for States Title’s offering, according to CEO Max Simkoff.

“With such an increase in demand, we originally looked at raising equity, but there were ultimately significantly more attractive options for debt,” he told TechCrunch. 

The company, Simkoff said, is growing faster than it could have modeled, so it continues to invest “in an aggressive roadmap.”

“That gave us the confidence to take on the debt facility,” he added. 

Debt is finite, Simkoff said. And for States Title, that is a good thing.

“The reason many companies don’t pursue debt financing is because they feel they may not have a clear path to profitability in the time frame in which they would need to pay the debt back,” he added. “Equity extends the runway to find that path, but it also means giving away more of the eventual upside, if and when a company is able to convert valuation numbers into actual value.”

States Title is planning to use the money to accelerate traction of its product roadmap, power new market expansions, acquire and support customers, and help it restructure its cap table. 

The company wants to do more hiring and pay down what it owes to Lennar Corp., which helped fund State Title’s 2019 acquisition of North American Title Company (NATC) and North American Title Insurance Company (NATIC).  

These two startups are prime examples of the fact that while there is plenty of venture out there, not every company is eager to take it.

DuPont and VCs see lithium mining as a critical investment for the electric future

By Jonathan Shieber

“Mining” has become synonymous with crypto the past few years in the tech industry, what with Bitcoin piercing the $50,000 barrier and GPUs and ASICs worldwide scrambling to hash functions in a bid for distributed crypto manna. That excitement belies an increasingly energetic push though to bring VC dollars and entrepreneurial acumen back to Mining 1.0 — actual meatspace resource extraction.

One of the key target resources is lithium, a critical component for smartphones, electric vehicle batteries and nearly every other electric tool of modern convenience and industrial import. China through its mining companies and battery manufacturers is currently in the lead, thanks to a years-long push to control both the supply of lithium and develop massive new manufacturing capacity to meet global demand. As tensions rise between China and the United States however, companies are racing to find alternative supplies as the world transitions to more electric-based infrastructure systems.

That’s one reason why DuPont is making a push to prove out its extraction technologies.

The water filtration and purification service provider DuPont Water Solutions has teamed up with Vulcan Energy Resources, a developer of lithium mining and renewable energy projects, to test a new process for direct lithium extraction.

Current processes for mining lithium are bad for the environment (to put it mildly), involving heavy use of toxic chemicals and increasingly scarce water resources. This new joint project, which is being developed in the Upper Rhine Valley of Germany, would tap DuPont’s direct lithium extraction products and filtration expertise to mine and refine lithium in a more environmentally-friendly way, the company said.

Dr. Francis Wedin, Managing Director of Vulcan, said in a statement that “DuPont’s diverse set of products, which can be manufactured at scale, are likely to be well-suited to sustainably extract the lithium from the brine.”

DuPont is hoping to push the technology out across the mining industry and make its portfolio of sorbents, nanofiltration technologies, reverse osmosis filters, ion exchange resins, ultrafiltration, and close-circuit reverse osmosis products available to a wider group of customers.

A push by DuPont to become more involved in the lithium-mining business will heighten competition for startups like Lilac Solutions, which has developed its own technology for lithium extraction. The company has partnered with an Australian company, Controlled Thermal Resources, to develop lithium brine deposits in the Salton Sea, which is among California’s most blighted environmental disasters.

Last year, the Oakland-based startup announced a $20 million investment led by Breakthrough Energy Ventures (those folks are everywhere), the MIT-affiliated investment firm The Engine and early Uber investor Chris Sacca’s relatively new climate-focused fund, Lowercarbon Capital.

Outside Lilac, there’s been a stream of VC dollars flowing into the (non-crypto) mining business as software helps extraction companies operate more efficiently. Notable investments include high-tech prospectors like KoBold Minerals (another Breakthrough Energy Ventures portfolio company), which uses big data and machine learning to help pick better targets for mines and Lunasonde, which prospects from space using satellites.

Other solutions to the lithium problem are attracting investor attention, too. For Jeff Chamberlain, the founder and chief executive of the battery technology investment firm Volta Energy Technologies, an alternative may be found in “urban mining,” or the recycling of used lithium-ion batteries. For decades, lead-acid batteries have been recycled for their component materials, and Chamberlain expects that the lithium-ion supply chain will evolve to support more efficient reuse of existing materials as well.

There’s a slew of companies trying to prove Chamberlain right. They include businesses like Li-Cycle, which yesterday announced that it would go public through a special purpose acquisition company (SPAC) in a deal that would value the company at $1.67 billion.

Meanwhile, privately-held and venture-backed startups are developing other recycling solutions. Battery Resourcers, a spinout from Massachusetts’ Worcester Polytechnic Institute, is focused on making cathode power converters from recycled scrap. Singapore-based Green Li-ion is another company that’s opening a recycling plant for lithium-ion battery cathodes, and Northvolt, a Swedish battery startup that was founded by former Tesla executives in 2016, already has an experimental recycling plant up and running.

Finally there’s J.B. Straubel’s Nevada-based startup Redwood Materials, which was one of the first companies to receive funding from Amazon through its Climate Pledge Fund.

“Ultimately we won’t have to extract lithium out of rock. We can extract lithium from pools and using urban mining,” said Chamberlain. Call it Mining 1.0, Version 2 — but it’s just the kind of investment our world needs if we are going to secure a better climate future.

Edgybees raises $9.5M Series A for its aerial video augmentation service

By Frederic Lardinois

Edgybees, a company that helps businesses, first responders and military users accurately geotag and augment their aerial video streams in real time, today announced that it has raised a $9.5 million Series A round. The news comes almost exactly two years after the company announced its $5.5 million seed round. Seraphim Capital, which specializes in space tech investments, led this new round. New investors Refinery Ventures, LG Technology Ventures, Kodem Growth, as well as existing investors OurCrowd, 8VC, Verizon Ventures and Motorola Solutions Venture Capital also participated.

“Our mission is to ensure positive human outcomes during life-saving missions,” says Edgybees co-founder and CEO Adam Kaplan. “Our new partners will be key to continuing to push our mission forward. With their unique industry expertise, we are poised to expand our global footprint and drive innovation within the industry. We look forward to the next phase of growth, meeting the critical demands of the defense, public safety and critical infrastructure markets.”

Using the company’s Visual Intelligence Platform, users can easily register and track assets in video show by a drone, for example. The standard use case here would be to help first responders get an accurate picture of an evolving emergency on top of live images from the scene, with the ability to track all of their assets and personnel in real time. But Edgybees has also shown other use cases that range from tracking and visualizing golf games to insurance and defense use cases.

About a year ago, Edgybees, which had its start in Israel but is now based in San Diego, launches its Argus platform, which makes it easier for users to bring their own drone and other live video platforms to the service’s geo-registration engine.

Image Credits: Edgybees

“Edgybees solves a huge problem in spatial computing: how do you really know what you are seeing through fast moving airborne or other video feeds? Edgybees brings together the real and virtual worlds and helps first responders save lives, industrial drone users save money, and defense teams get the mission done,” Ourcrowd CEO Jon Medved explained.

Similarly, Seraphim managing partner and CEO Mark Boggett noted that he thinks of Edgybees as a Google Maps fused with live video. “Their geo-referencing capability is a breakthrough technology that brings a new level of insight and usability to video streams from space, drones or bodycams. We are very excited about Edgybees, not only for the innovation it brings to public safety and defense, but because its ability to be utilized in a wide range of industries,” he said.

Image Credits: Edgybees

SeedFi closes on $65M to help financially struggling Americans get ahead

By Mary Ann Azevedo

Millions of Americans live paycheck to paycheck, and struggle to get out of a debt cycle.

One startup is developing financial products targeted toward this segment of the population, with the goal of helping them build credit, save money, access funds and plan for the future.

That startup, SeedFi, announced Wednesday it has raised $50 million in debt and $15 million in an equity funding round led by Andreessen Horowitz, also known as a16z. The VC firm also led SeedFi’s $4 million seed funding when it was founded in March of 2019.

Flourish, Core Innovation Capital and Quiet Capital also participated in the latest financing.

SeedFi was founded on the premise that it is difficult for many Americans to get ahead financially. Its founding team has worked at both startups and big banks, such as JPMorgan Chase and Capital One, and operates under the premise that many legacy financial institutions are simply not designed to help Americans who are struggling financially to get ahead. 

“We’ve seen firsthand how the system has been designed for underprivileged Americans to fail,” said Jim McGinley, co-founder and CEO of SeedFi. “Our average customer earns $50,000 a year, yet they pay $460 a year in overdraft fees and payday loan companies charge them APRs of 400% or more. They barely make enough to cover their expenses and any misstep can set them back for years.”

In previous roles, McGinley was responsible for payday loans for underserved communities.

“There I got insights to the financial difficulties they had and the need for better products to help them get a step up,” he told TechCrunch.

Co-founder Eric Burton said he can relate because he grew up in Central Texas as part of “a super poor family.”

“I experienced all the struggles of being low income and the necessity of taking on high-priced credit to get through day to day,” he recalled. “I personally was trapped in a debt cycle for a long time.”

In fact, a job offer he got from Capital One was temporarily rescinded because the company said he had “bad credit,” which turned out to be a result of unpaid medical bills he’d incurred at the age of 18.

“I didn’t know about them, but was able to get the job after using my signing bonus to pay off that debt,” he said. “So I can understand how a certain starting point makes it very hard to progress.”

SeedFi’s goal is to tackle the root of the problem. It launched in private beta in 2019, and helped its initial customers build more than $500,000 in savings — even during the COVID-19 pandemic.

Now, it’s launching to the public with two offerings. One is a credit building product that is designed to “create important long-term savings habits.” Customers save as little as $10 from every paycheck, which is reported to the credit bureaus to build their credit history, and are then able to generate $500 in savings in six months’ time.

After six months of on-time payments, SeedFi customers with no credit history were able to establish a credit score of 600, while customers with existing credit scores and less than three credit accounts boosted their scores by 45 points, according to the company.

The concept of enabling consumers to build credit history beyond traditional methods is becoming increasingly more common. Just last week, we wrote about Tomo Credit, which provides customers with a debit card so they can build credit based on their cash flow.

SeedFi’s other offering, the Borrow & Grow Plan, is designed to be a more affordable alternative to installment or payday loans. It provides consumers with “immediate access” to funds while also helping them build savings and credit. 

Andreessen Horowitz general partner Angela Strange , who has joined SeedFi’s board with the financing, believes there’s “a massive business opportunity for new financial services entrants to reach historically underserved populations through better product experiences, underwriting and technology.”

In a blog post, she shares an example of how SeedFi works. The company evaluates risk and extends credit to a customer that might be traditionally hard to underwrite. It determines how much to lend, as well as the proportion of dollars to give as money now versus savings. 

“For instance, a typical SeedFi plan might be structured as $500 right now and $500 reserved in a savings account. The borrower pays off $1,000 over time, and at the end of the plan, he or she has $500 in a savings account. Not only has the borrower paid a lower interest rate, he or she is in a better financial position after making the decision to borrow money,” Strange writes.

Looking ahead, SeedFi plans to use its new capital to build out its product suite and grow its customer base. 

“We will be able to more efficiently fund our growing loan portfolio and serve more customers,” McGinley said.

Investors are missing out on Black founders

By Richard Dal Porto
Craig J. Lewis Contributor
Craig J. Lewis is the founder and CEO of Gig Wage, a simplified fintech payroll platform built for contract workers.

I’m a Black man in America — that’s hard. Black founders, and uniquely Black founders in tech, are facing insurmountable odds.

As the recipients of less than 1% of venture capital raise, institutionalized systems are visibly at play. Within almost 10 years of my entrepreneurial journey, I have encountered just as many setbacks and failures as I have successes.

However, I have pressed forward despite the disparities that often plague the Black entrepreneurial community. From imbalances in fundraising to minimal capital and access, Black brilliance and its cloak of resilience continues to rise.

Now, as a CEO who has ambitiously raised nearly $13 million for my current venture, against the odds, I posit that it is not the Black founders who are missing out the most — it is the investors who are at a loss, not comprehending that they have underestimated the power of these founders’ Black brilliance.

Black founders need to own their resiliency and leverage the power that has resulted from their unique experiences.

When you think about the intersection of venture capital and technology, and specifically how it works — it is being led from an engineering perspective. Developers and coders historically go to specific schools and colleges, entering a funnel that guides them to success.

Historically, many Black students (more so Black male students), are influenced by sports as a vehicle to higher education and not necessarily the institutions recognized for technological prowess.

Their parents and community encourage athleticism because that is the only thing they know — as an institutionalized mindset reinforced over time. Unless they are guided into the accepted foundations for technology, or get into a Cal Berkeley, Stanford or Harvard, where many of the technology companies are built, they are immediately funneled outside of the “circle,” which sets the first of many ongoing obstacles for a Black tech founder.

I offer, however, that these “obstacles” are not in fact barriers but the crucial catalyst for these founders’ superpowers.

Admittedly, there were no entrepreneurs in my family. I did not have access to information about the best colleges. Despite having great grades and graduating with honors, I was completely unaware of how valuable an Ivy League education could be.

As a star basketball player, with my skills and grades, I could have played and graduated from somewhere like Yale, Brown, Columbia or even a school like Southern Methodist University where I was offered a full scholarship. But because of the lack of knowledge that I could actually do so and benefit from being inside the Ivy League “circle,” I didn’t.

I was in college from 2000 to 2004. A lot of great companies were started at elite schools during that period. It is this institutional blocking of information from myself and many other Black students that molded our overall perspective and created our glass ceilings.

Breaking through that glass ceiling, overcoming these odds to press forward relentlessly, with unyielding focus, and to hold conversations with the types of investors I have had to sit in front of, with the type of company that I have built, takes a different level of brilliance that only the Black experience can provide. For 2021 and beyond, Black founders need to not only recognize, but unlock that power as they look to fundraise and catapult their tech companies to success. It would be smart, and incredibly beneficial for investors, venture capitalists and the entire entrepreneurial ecosystem to take heed.

For Black founders, a paradigm shift is evident, but it can only manifest if implemented in these five ways.

Black founders: Forget what you think works in fundraising

Black founders and specifically Black tech founders are fed a monotonous script of how to raise money “the right way,” in light of disparaging statistics highlighting a lack of funding — so much that there is a robotic approach to the process. They try to become this cookie-cutter entrepreneur that is designed to raise money from investors, with their playbook and by their rules.

Black founders capitulate and conform to what society has dictated as appropriate fundraising, often glorifying the investor with the fate of their startup in their hands, without realizing that they hold the negotiating power. Their playbook hasn’t won us any games. As of today, own your power.

Become an irresistible force: Leverage your expertise

Set the playbook aside and lean more into your expertise and uniqueness.

Years ago, Mark Cuban delivered a keynote address at Dallas Startup Week that chronicled his road to success. One of his main points was to “Know your business, and know your business cold.” It was so simple, yet so impactful.

Early on in my career, I learned about venture capital from my experiences working for a startup. While I did not know the area in depth, I referenced what little knowledge I had as I raised for my own company years later. Although I was limited in my dealings with venture capitalists, I was confident in my background and expertise (at that time as a payroll technology sales professional) to truly stake my claim and seat at the table.

So while they may have sold a company for $7 billion or have $35 billion AUM (assets under management), I knew that they were not as well-versed in payroll or payroll technology than I was. It was this tenacious mindset that made me look at investors, rather than up to them, thereby positioning us on equal footing.

Connect in the common goal of brilliance

As a Black founder in tech, I have encountered many injustices — from networking to fundraising to the game of business as a whole. Even among those sitting at the table, there is a plethora of worldviews, political preferences, religious propensities and more that create a melting pot of divisiveness. However, recognizing that the common thread between all of the players in the game is the desire to be part of the brilliant business opportunity at hand is what will ultimately prevail.

It served me well not to overindex whether the venture capitalists liked me or on our differences. Locking in on the ambition of my entrepreneurial spirit and focusing on my brilliance — my Black brilliance — made them want to invest in me. Simplistically, investors want to give their money to founders who will make them money — passionately and ambitiously. Be you and find the investor that appreciates you.

Get in front of as many investors as you can

Black founders are not getting in front of enough investors. Systemically, the venture capital landscape has marginalized this community and has failed to expand their network for inclusiveness. Currently, ethnic minorities are severely underrepresented in the venture capital industry. Eighty percent of investment partners are white, with only a staggering 3% being Black or African-American.

Regardless, Black entrepreneurs must press forward and still show up. The sheer number of people that entrepreneurs must face during the fundraising process is astronomical, so one must not be swayed by the disillusionment of opportunity.

Realistically speaking, it takes a long time to raise money. Period. I have talked to thousands of potential investors to raise nearly $13 million for my current company. If you are a Black founder, it is going to take you longer to fundraise and you are going to have to get in front of more people. So I ask, “Do you have enough oxygen in the tank to withstand the obstacles, for a long enough period of time, to attract the venture capital that you need?The wealth gap says no.

When I first started Gig Wage, the number one question I received from investors is, “How much runway do you have?” I would answer, “Until I get to where I need to get.” They would then rephrase, “How much money do you have in the bank? How long is your wife going to let you do this?” I would reply, “It does not matter how much money I have in the bank because I’m going to keep going until this happens.”

Discriminatively, there was this unspoken expectation that I lacked the financial wherewithal and stamina to withstand the fundraising process, and at times it was extremely discouraging — because to be honest, when I looked in the bank account, I realistically had about nine to 12 months of runway.

The reason Black people raise less than 1% of venture capital is because the racism weaved into the fabric of American society bleeds over into the entrepreneurial ecosystem. Despite it all, I took thousands of meetings. I was willing to endure with an ambitious conviction that I was going to win. Again, this is Black brilliance.

Own your resiliency, own your power 

As a Black man, I have personally endured challenges to build resiliency — mirroring similar realities of other Black men in America. Whether it was dealing with the police or witnessing men in my family struggle with drugs, violence, poverty or the like — I often think, “Why would I be intimidated by an investor meeting or a term sheet?” The construct of America has dealt me much worse.

Black founders need to own their resiliency and leverage the power that has resulted from their unique experiences. The victory mentality that ensues thereafter is the type of mindset that venture capitalists should want to invest in, and if they do not, they are undoubtedly missing out.

The unyielding focus of “The world is stacked against me but I’m not going to quit. I’m going to pivot. I’m going to be resourceful. I’m going to figure it out — even if I’m scared,” is a person you need to invest in. It is not necessarily that they have a groundbreaking business idea, but culturally, Black people have a passion and a perspective that is unmatched, with limitless possibilities that venture capitalists are overlooking.

So for 2021 and well beyond, Black founders, and those especially in tech, need to shift their respective paradigms, own their place within the entrepreneurial space, take back their power and continue to operate at the utmost in Black brilliance. It is the investors, not the founders, that are missing out. Be bold. Be courageous. Be audacious.

As for me, the best thing that I can do right now is to continue to drive the conversation, illuminate the disparities and be as successful for Black entrepreneurs, Black professionals and the world at large as possible. I am owning my power and I’m committed to epitomizing and evangelizing Black brilliance.

The creator movement is entering prime time, and so is Circle with a fresh $4M

By Danny Crichton

The creator movement has exploded in the last few years as platforms ranging from Substack to Clubhouse have made it easier than ever to reach an audience of willing readers and listeners. Yet the key to building sustainable creator businesses is the economics of these enterprises themselves. Get enough subscribers, and what often starts as a side hobby can quickly become a full-time job.

Circle was founded in January 2020 to make engaging with paying customers and thus building creator businesses as effortless as possible. We profiled the NYC-based startup last year when it announced its $1.5 million seed round in August, discussing how its founder DNA originates in the online course platform Teachable. Since then, all signs point to very strong early growth.

The company surpassed $1 million ARR last month, and it already has 1,000 paying customers and is heading toward 2,000 paying communities. Usage is also growing rapidly, expanding 40-50% per month for both DAUs and MAUs, according to the company. It also brought its iOS app out of beta last month.

CEO and co-founder Sid Yadav said that “we happened to catch the tide at the right time [with] the creator movement, the community movement.” So far, paying communities have been largely centered around “a lot of YouTubers, course creators, Twitch streamers, Patreon personalities,” with Yadav estimating that 60% of the platform’s communities are “personality-led.” That said, “a lot of brands are starting to think of this creatively.”

All that positive news can’t be ignored by VCs too long. The company announced today that it has raised a $4 million seed round at a valuation “north of” $40 million, which closed late last year. The round was officially led by Notation Capital, which led the company’s pre-seed round last year, but the firm only took a quarter of a round according to Yadav.

Circle’s team has grown to 20 across multiple continents. Photo via Circle.

Instead, much of the round’s allocations were handed out to the entrepreneurs building on the platform. “We had all of these offers from top-tier firms, but for the kind of product that we are — which is a creator platform — it made sense to allocate the round as much as possible to our customers,” Yadav said. According to the company, a majority of the round went to individual angels and community builders on the platform, among them Anne-Laure Le Cunff, David Perell, Tiago Forte and Nat Eliason.

Given the company’s early stage, product development remains the highest priority. “Our approach is like a Notion,” Yadav said, describing how Circle allows its communities to stitch together “building blocks” to lay out pages. Circle’s primary mode is through a Space, where community members can discuss topics with each other and the creator as well. Communities built on Circle can be white-labeled, with their own custom domains.

Circle’s community platform allows creators to publish content and engage with their community. Photo via Circle.

Circle’s ultimate goal is to integrate under one roof every tool a creator needs to engage with a customer, from publishing newsletters and podcasts to setting up streaming, event ticket sales, merchandise and event calendars — all buttressed by a payments layer. Many of those features remain to be built on top of the company’s core community platform, but Yadav and his team are certainly ambitious in their expansive scope.

Circle’s team is now 20 people, with team members in Europe, India, Australia and across the United States.

Uber vet raises $5.2M for blue-collar logistics marketplace

By Mary Ann Azevedo

After working as a general manager for Uber in Nevada, Jason Radisson realized the need for a way to connect blue-collar workers to companies looking to employ them.

So in late 2018, the idea for Shift One — a marketplace aimed at pairing workers and employers — was born. The startup is focused on last-mile logistics and delivery, e-commerce fulfillment and large-scale event management.

Since formally launching in 2019, Shift One has grown to have 25,000 workers on its platform — many of whom it says were unemployed at the time of hire. And it has about 50 clients in the U.S. and Colombia, including Amazon, NASCAR, Weee!, Mensajeros Urbanos and the Consumer Electronics Show (CES).

It matches employers with workers, and also helps them with tasks such as time, taxes, attendance, productivity and work-order management.

To help it grow and further expand its reach, Shift One just raised a $5.2 million seed round led by City Light Capital, with participation from K50 Ventures, Ventura Investments and Human Ventures, as well as Tinder co-founder Justin Mateen’s JAM fund and angel Felipe Villamarin.

On the operations side, all of Shift One’s original team either worked for Uber or Lyft, according to founder and CEO Radisson. The early technical team were all previously Uber employees.

Radisson says the impetus behind starting the company was the desire “to correct and improve some of the things in Gig 1.0.”

“We wanted it to be more balanced for workers, and break some negative flywheels where people were cycling through a lot of logistics jobs and not getting paid well,” he told TechCrunch. “We wanted to give them stability.”

At the same time, Radisson said, he knew that companies on the logistics side were struggling to find good workers. Shift One works with a range of skill levels, from entry-level employees to supervisors and warehouse managers.

Knowing that many logistics workers are used to working as contract employees with no benefits, Shift One gives all the workers on its platform full benefits with “low contributions” from the first day of hire. It also provides them with checking accounts and debit cards.

“A lot of these workers are unbanked and didn’t have the ability to even get a paycheck,” Radisson said.

It also aims to give them “full schedules” and have them work on whole teams as much as possible.

“It’s part of our value prop that our teams are cohesive and really high functioning,” he added.

Until now, San Francisco-based Shift One has been bootstrapped. It is “slightly” profitable and has been re-investing that money into growing the business. It saw its revenue climb by tenfold in 2020 from an admittedly “small base.” The startup has offices in Las Vegas, Minneapolis, Bogotá and Bucharest. 

Looking ahead, it plans to use its new capital to expand into new markets (it’s currently operating in about 12 states), boost its headcount of 20 and accelerate its tech roadmap.

“In the last four to five months, we’ve moved very strong into last mile” as the COVID-19 pandemic has continued, Radisson said. “We want to give opportunities to millions that didn’t go to college and that have seen stagnant wages for years. We want to give them opportunities to get ahead.”

JAM Fund principal and Tinder co-founder Mateen believes Shift One is turning the labor problem of “adverse selection” on its head.

“Gig work has been defined by seasonality and availability — neither are particularly good for workers,” he said. 

Even Miami Mayor Francis Suarez has thoughts, pointing out that blue-collar jobs have been among the hardest hit by COVID-19.

With Shift One, “workers receive fairly compensated jobs with the opportunity to grow and develop,” he said in a written statement. “Companies get access to a steady, predictable source of high-quality labor. And Miami benefits from the virtuous circle of higher employment and strong local businesses.”

Axiom Space raises $130 million for its commercial space station ambitions

By Darrell Etherington

One of the new space startups with the loftiest near-term goals has raised $130 million in a Series B round that demonstrates investor confidence in the scope of its ambitions: Axiom Space, which has been tapped by NASA to add privately-developed space station modules to the ISS, announced the new funding led by C5 Capital on Tuesday.

This is the latest in a string of high-profile announcements for Axiom, which was founded in 2016 by a team including space professionals with a history of demonstrated expertise working on the International Space Station. Eventually, Axiom hopes to go from adding the first private commercial modules to the existing station, to creating their own, wholly private on-orbital platforms – for research, space tourism and more.

Axiom announced the people who will take part it it first ever private astronaut launch to the ISS, which is set to fly next January using a SpaceX Dragon spacecraft and Falcon 9 rocket. Axiom is the service provider for the mission, brokering the deal for the private spacefarers and setting up training and mission profile. That should be the first time we see a crew made up entirely of private individuals (ie., not astronauts selected, trained and employed by their respective national government) make its way to the station.

The company was also in discussions with Tom Cruise about filming at least part of an upcoming film aboard the ISS, and it’s in development with a production company on a forthcoming competition reality show that will see contestants vie for a spot on a private flight to the station.

Axiom is emerging as the leading linkage between private human spaceflight and the existing infrastructure and industry, covering both public sector partners like NASA, and the ‘rails’ of the bourgeoning industry – SpaceX and its ilk. It’s been focused on this unique opportunity longer than most in the private market, and it has all the relationships and in-house expertise to make it work.

This new, significant injection of capital will help the company hire, as well as boost its ability to construct the pieces of its forthcoming private space station modules, as well as its eventual station itself. The Houston-based company aims to put its ISS modules on the station by 2024, and it has raised $150 million to date.

Redefine Meat is moving plant-based proteins from patties to steaks

By Jonathan Shieber

The Israeli startup Redefine Meat, which has developed a manufacturing process to make plant-based proteins that more closely resemble choice cuts of beef than the current crop of hamburger-adjacent offerings, has gotten a big vote of confidence from the investment arm of one of Asia’s premier food brands.

The company has raised $29 million in financing from Happiness Capital, the investment arm backed by the family fortunes of Hong Kong’s Lee Kum Kee condiment dynasty, and Hanaco Ventures, an investment firm backing startups in New York and Israel.

Investors have stampeded into the plant-based food industry, spurred by the rising fortunes of companies like Beyond Meat, which has inked partnerships with everyone from Pepsico to McDonald’s, and Impossible Foods, which counts Burger King among the brands boosting its plant-based faux meat.

While these companies have perfected plant patties that can delight the taste buds, the prospect of carving up a big honkin cut of pea protein in the form of a ribeye, sirloin or rump steak, has been a technical hurdle these companies have yet to overcome in a commercial offering.

Redefine Meat thinks its manufacturing processes have cracked the code on the formulation of plant-based steak.

They’re not the only ones. In Barcelona, a startup called Novameat raised roughly $300,000 earlier this year for its own take on plant-based steak. That company raised its money from the NEOTEC Program of the Spanish Center for Industrial Technological Development.

Both companies are using 3-D printing technologies to make meat substitutes that mimic the taste and texture of steaks, rather than trying to approximate the patties, meatballs, and ground meat that companies like Beyond Meat and Impossible have taken to market.

Backing Redefine’s path to market are a host of other investors including Losa Group, Sake Bosch, and K3 Ventures.

The company said it would use the new funding to expand its portfolio and support the commercial launch of its products. Redefine aims to have a large-scale production facility for its 3-D printers online before the end of the year, the company said in a statement.

In January, Redefine Meat announced a strategic agreement with the Israeli distributor Best Meister and the company has been expanding its staff with a current headcount of roughly 40 employees.

“We want to change the belief that delicious meat can only come from animals, and we have all the building blocks in place to make this a reality: high-quality meat products, strategic partnerships with stakeholders across the world, a large-scale pilot line under construction, and the first-ever industrial 3D Alt-Meat printers set to be deployed within meat distributors later this year,” said Eschar Ben-Shitrit, the company’s chief executive, in a statement. 

 

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