Everyone warns you not to build on top of someone else’s platform.
When I first started in VC more than 10 years ago, I was told never to invest in a company building on top of another company’s platform. Dependence on a platform makes you susceptible to failure and caps the return on your investment because you have no control over API access, pricing changes and end-customer data, among other legitimate concerns.
I am sure many of you recall Facebook shutting down its API access back in 2015, or the uproar Apple caused when it decided to change the commission it was charging app developers in 2020.
Put simply, founders can no longer avoid the decision around platform dependency.
Salesforce in many ways paved the way for large enterprise platform companies, being the first dedicated SaaS company to surpass $10 billion in annual revenue supported by its open application development marketplace. Salesforce’s success has given rise to dominant platforms in other verticals, and for founders starting companies, there is no avoiding that platform decision these days.
Some points to consider:
What does this mean for founders who decide to build on top of another platform?
PostScript, an SMS/MMS marketing platform for commerce brands, built its platform on Shopify, giving it immediate access to over 1 million brands and a direct customer acquisition funnel. That has allowed PostScript to capture 3,500 of its own customers and successfully close a $35 million Series B in March 2021.
Varo, one of the fastest-growing neobanks, started in 2015 with the principle that a bank could put customers’ interests first and be profitable. But in order to deliver on its mission, it needed to understand where its customers were spending their money. By partnering with Plaid, Varo enabled more than 176,000 of its users to connect their Varo account to outside apps and services, allowing Varo to focus on its core mission to provide more relevant financial products and services.
The longer we continue to work with either all or part of our teams in remote, out-of-physical-office environments, the more imperative it becomes for those teams to have some tools in place to keep the channels of communication and management open, and for the individuals in those teams to have a sense of how well they are performing. Today, one of the startups that provides a team productivity app with that in mind is announcing a round of funding to fuel its growth.
Pathlight, which has built a performance management platform for customer-facing teams — sales, field service and support — to help managers and employees themselves to track and analyze how they are doing, to coach them when and where it’s needed, and to communicate updates and more, has picked up $25 million — money that it will be using to continue growing its customer base and the functionality across its app.
The funding is being led by Insight Partners, with previous backers Kleiner Perkins and Quiet Capital also participating, alongside Uncorrelated Ventures; Jeremy Stoppelman, CEO of Yelp; David Glazer, CFO of Palantir; and Michael Ovitz, co-founder of CAA and Owner of Broad Beach Ventures. Pathlight has now raised $35 million.
Pathlight today provides users with a range of tools to visualize team and individual performance across various parameters set by managers, using data that teams integrate from other platforms like Salesforce, Zendesk and Outreach, among others.
Using that data and specific metrics for the job in question, managers can then initiate conversations with individuals to focus in on specific areas where things need attention, and provide some coaching to help fix it. It can also be used to provide team-wide updates and encouragement, which sits alongside whatever other tools a person might use in their daily customer-facing work.
Since launching in March 2020, the startup has picked up good traction, with customers including Twilio, Earnin, Greenhouse, and CLEAR. But perhaps even more importantly, the pandemic and resulting switch to remote work has underscored how necessary tools like Pathlight’s have become: the startup says that engagement on its platform has shot up 300% in the last 12 months.
Alexander Kvamme, the CEO of Pathlight, said that he first became aware of the challenges of communicating across customer-facing teams, and having transparency on how they are doing as individuals and as a group, when he was at Yelp. Yelp had acquired his startup, reservations service SeatMe, and used the acquisition to build and run Yelp Reservations.
He was quick to realize that there weren’t really effective tools for him to see how individuals in the sales team were doing, how they were doing compared to goals the company wanted to achieve and based on the sales data they already had in other systems, how to work more effectively with people to communicate when something needed changing, and how to tailor all that in line with new variations in the formula — in their case, how to sell new products like a reservations service alongside advertising and other Yelp services for businesses.
“Whether it’s five or 3,000 people, the problem doesn’t go away,” he said. “Everyone uses their own systems, and it hurts front line employees when they don’t know how they are doing, or don’t get recognition when they are doing well, or don’t get coaching when they are not. Our thesis was that if software is eating the world, and you as a company are buying more software and analytics, over time managers will be more like data analysts. So we are providing a way for managers to be more data-driven.”
Five years down the line, Kvamme got the bug again to start a company and decided to return to that problem, teaming up with co-founder Trey Doig, the engineer who designed SeatMe and then turned it into Yelp Reservations and is now Pathlight’s CTO.
As they see it, the challenge has still not really been addressed. That’s not to say that there are not a number of companies — competitors to Pathlight — looking to fill that gap as well. Another people management platform called Lattice last year picked up $45 million (I’m guessing it will be raising money again around about now); HubSpot, Zoho, SalesLoft and a number of others also are taking different approaches to the same challenge: front-line customer-facing people spend the majority of their time and attention on interacting with people, and so there need to be better tools in place to help them figure out how to make that communication more effective, figure out what is working and what is not.
And all of this, of course, is not at all new: it’s not like we all woke up one day and suddenly wanted to know how we are doing at work, or managers suddenly felt they needed to communicate with staff.
What has changed, however, is how we work: many of us have not seen the inside of our offices for more than a year at this point, and for a large proportion of us, we may never return again, or if we do it will be under different circumstances.
All of this means that some of the more traditional metrics and indicators of our performance, praising, management relationships, and learning from team mates simply is not there anymore.
In customer-facing areas like sales, support and field service, that lack of contact may be even more acute, since many of the teams working in these environments have long relied on huddles and communication throughout the day, week and month to continuously tweak work and improve it. So while tools like Pathlight’s will be useful as data analytics provision for teams regardless of how we work, it can be argued that they are even more important right now.
“I think people have started to realize that if you can empower front line to be more independent, your numbers will go up and do better,” Kvamme said.
This is part of what went into the investment decision made here.
“With the acceleration of digital transformation across the enterprise, it’s not enough to rethink the way we work—we must also rethink the way we manage,” said Jeff Lieberman, MD at Insight Partners. “Pathlight is ushering in a new age of data-driven management, an ethos that we believe every enterprise will need to embrace—quickly. We are excited to partner with the Pathlight team as they bring their powerful platform to companies across the world.”
ActionIQ, which helps companies use their customer data to deliver personalized experiences, is announcing that it has extended its Series C funding, bringing the round to a total size of $100 million.
That number includes the $32 million that ActionIQ announced in January of last year. Founder and CEO Tasso Argyros said the company is framing this as an extension rather than a separate round because it comes from existing investors — including March Capital — and because ActionIQ still has most of that $32 million in the bank.
Argyros told me that there were two connected reasons to raise additional money now. For one thing, ActionIQ has seen 100% year-over-year revenue growth, allowing it to increase its valuation by more than 250%. (The company isn’t not disclosing the actual valuation.) That growth has also meant that ActionIQ is getting “a lot more ambitious” in its plans for product development and customer growth.
“We raised more money because we can, and because we need to,” Argyros said.
The company continues to develop the core platform, for example by introducing more support for real-time data and analysis. But Argyros suggested that the biggest change has been in the broader market for customer data platforms, with companies like Morgan Stanley, The Hartford, Albertsons, JCPenney and GoPro signing on with ActionIQ in the past year.
Some of these enterprises, he said, “normally would not work with a cutting-edge technology company like us, but because of the pandemic, they’re willing to take some risk and really invest in their customer base and their customer experience.”
Argyros also argued that as regulators and large platforms restrict the ways that businesses can buy and sell third-party data, platforms like ActionIQ, focusing on the first-party data that companies collect for their own use, will become increasingly important. And he said that ActionIQ’s growth comes as the big marketing clouds have “failed” — either announcing products that have yet to launch or launching products that don’t match ActionIQ’s capabilities.
Companies that were already using ActionIQ include The New York Times. In fact, the funding announcement includes a statement from The Times’ senior vices president of data and insights Shane Murray declaring that the newspaper is using ActionIQ to deliver “hundreds of billions of personalized customer experiences” across “mail, in-app, site, and paid media.”
ActionIQ has now raised around $145 million total, according to Crunchbase.
The COVID-19 pandemic has accelerated digital adoption in a way that no one could have ever anticipated, and as more people conduct more services online and via mobile devices, businesses have had to work even harder to validate users and security. One company working to serve that need, Socure – which uses AI and machine learning to verify identities – announced Tuesday that it has raised $100 million in a Series D funding round at a $1.3 billion valuation.
Given how much of our lives have shifted online, it’s no surprise that the U.S. digital identity market is projected to increase to over $30 billion by 2023 from just under $15 billion in 2019, according to One World Identity. This has led to skyrocketing demand for the services provided by identity verification companies.
Historically, Socure has been focused on the financial services industry, but it plans to use its new capital to further expand into “every consumer-facing vertical” including online gaming, healthcare, telco, e-commerce, and on-demand services.
The startup’s predictive analytics platform applies artificial intelligence and machine-learning techniques with online/offline data intelligence (from email, phone, address, IP, device, velocity, and the broader internet) to verify that people are, in fact, who they say they are when applying for various accounts.
Today, Socure has more than 350 customers including three top five banks, six top 10 card issuers, a “top” credit bureau and over 75 fintechs such as Varo Money, Public, Chime, and Stash.
Accel led Socure’s latest financing, which included participation from existing backers Commerce Ventures, Scale Venture Partners, Flint Capital, Citi Ventures, Wells Fargo Strategic Capital, Synchrony, Sorenson, Two Sigma Ventures, and others.
The round comes less than six months after the company raised $35 million in a round led by Sorenson Ventures, and brings the New York-based company’s total raised to $196 million since its 2012 inception.
Socure founder and CEO Johnny Ayers says his company’s identity management products can help B2C enterprises achieve know-your-customer (KYC) auto-approval rates of up to 97%. This means that financial institutions can more easily capture fraud, for example, via Socure’s single API. The company also claims that by more easily verifying thin-file (those without much credit history) and young consumers, it can help reduce the underbanked population.
The company plans to use its new capital to also enhance its product offering as it continues to develop patents.
Accel partner Amit Jhawar will join Socure’s board as part of the funding round.
In a blog post, Jhawar described Socure as “a purpose-built solution designed to handle the wave of new online users because its machine learning models have learned from every identity it has already seen.”
As former COO at Braintree and general manager at Venmo, Jhawar knows a thing or two about the importance of identity verification, especially in the financial services space.
He wrote: “I knew immediately that the Socure solution would be a game-changer because the solution can be used in every step of the customer lifecycle, from account creation to login to transaction.”
Socure also has hinted that it has an IPO in its future.
In a written statement, Ayers said: “We are incredibly grateful for the chance to innovate and partner to solve this problem with some of the greatest companies in the world and are energized for the opportunities that lay ahead for Socure, especially as we make our march to a potential IPO.”
TechCrunch has reached out to Socure and will update this story with more details.
“Sprinklr today announced that it has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”) relating to the proposed initial public offering of its common stock,” the company said in a statement.
It also indicated that it will determine the exact number of shares and the price range at a later point after it receives approval from the SEC to go public.
The company most recently raised $200 million on a $2.7 billion valuation last year. It was its first fundraise in 4 years. At the time, founder and CEO Ragy Thomas said his company expected to end 2020 with $400 million in ARR, certainly a healthy number on which to embark as a public company.
He also said that Sprinklr’s next fundraise would be an IPO, making him true to his word. “I’ve been public about the pathway around this, and the path is that the next financial milestone will be an IPO,” he told me at the time of the $200 million round. He said that with COVID, it probably was a year or so away, but the timing appears to have sped up.
Sprinklr sees customer experience management as a natural extension of CRM, and as such a huge market potentially worth a $100 billion, according to Thomas. But he also admitted that he was up against some big competitors like Salesforce and Adobe, helping explain why he fundraised last year.
Sprinklr was founded in 2009 with a focus on social media listening, but it announced a hard push into customer experience in 2017 when it added marketing, advertising, research, customer and e-commerce to its social efforts.
The company has raised $585 million to-date, and has also been highly acquisitive buying 11 companies along the way as it added functionality to the base platform, according to Crunchbase data.
From the point of view of a consumer, customer service sometimes feels like a monolith, but behind the scenes it can be a very fragmented business, with dozens of companies providing various different tools to help agents do their jobs.
Today, a startup founded by three Stripe alums that has set out to build a platform that helps organizations manage that spaghetti of customer service IT, and use it more efficiently, is announcing a round of funding to continue growing its business.
Assembled, which has built a platform that it describes as the “operating system” for support teams, has raised $16.6 million, a Series A that it plans to use to continue expanding its team and platform, and to bring on more customers.
The round is being led by Emergence Capital, the VC that specializes in enterprise startups, backing other communications-centric companies in its time like Salesforce, Zoom, Yammer, ServiceMax, SalesLoft and Lithium. Stripe, Basis Set Ventures and Felicis Ventures also participated. Stripe has a strong connection to Assembled. It is a customer. It led Assembled’s $3.1 million seed round a year ago.
And, it was the company where the three co-founders met and built the earliest version of the product it offers today. CEO Brian Sze was one of the first employees, overseeing business operations, where he built the customer support platform that inspired him to eventually leave to found Assembled. His two co-founders, brothers Ryan and John Wang, were engineers at the payments and financial services behemoth.
Assembled’s current platform is priced in tiers starting at $15 per agent per month. Integrating with Salesforce, Zendesk, Intercom, Kustomer, Gladly and other services by way of API integrations, it provides not just a way to manage and view customer support data from different sources in one place, but alongside that it provides tools focused on the support teams themselves. This includes tools to manage and roster teams, analyze team performance, and forecast demand depending on different factors in order to be better prepared.
As with all other aspects of how organizations work, customer service and people management are being digitally transformed. Typically, Sze said that many companies still use spreadsheets to manage and plan customer support rosters. That is now gradually shifting into what he describes as “support ops” where a strategic person is tasked not just with handling what is happening with incoming customer support right now, but also needs to figure out what will happen in the next year, and the tools that might help cope with that. “That is our emergent buyer,” Sze said.
“The sheer number of channels being supported is much bigger, when you consider email, messaging, phone lines, social media and more,” said Sze, adding that the pandemic had a particularly strong effect on Assembled’s business. It saw a big bump in especially in Q3 of last year, when its customer base doubled. “I think it came down to support being one of the most critical teams at the organization.”
Assembled today has a number of tech companies, and tech-first consumer companies as customers, including Stripe, GoFundMe, challenger bank Monzo, Google-owned Looker, D2C clothing brand Everlane and Harrys. It has grown customers five-fold in the last year, said Sze, while revenues have grown 300% (absolute numbers for both were not disclosed).
The concept of an “operating system” for customer support makes a lot of sense when you think about how the role has evolved over the years.
In the decades before the internet and digital interactions became the norm, support either focused on in-person visits, or phone-based interactions where you might find yourself calling toll-free numbers, sitting on hold for a long time, maybe being shuffled from one person to another depending on the nature of your issue.
Over time, those systems picked up some automated responses and companies started getting better systems in place to triage those calls. Then, as marketing became “marketing tech” and sales took on a software life of its own, those customer support people started to pick up more responsibilities, not just listening to customers but turning around and offering to sell them things, too, or take stock of customer satisfaction and overall sentiment. Then more channels for connecting came with the internet. Then came more efficient tools, cloud-based services, mobile services, and more to handle all of the above, and so on.
All of these iterations often came with different pieces of software, and while some companies have set out to build one-stop shops to take everything on, Assembled takes a Slack-like approach, making it easy to bring in data and manage different tools from one place, providing a place to bring them all together to help them work more harmoniously. At the same time, it provides a way to manage the teams of people who are there to work with those pieces of software. This is because, when it comes to customer support, it’s always as much about the teams running it as it is the software they are using (hence: “assmebled”).
The company’s approach has been especially relevant in the last year. Not only have teams — including customer service teams — been forced to work remotely, but they have generally seen a surge of traffic from customers who are going online for all of their services, and using digital tools when they need to get in touch with organizations. Still, the opportunity for Assembled is that by and large, there are still a large proportion of businesses that are still playing catch up here.
“Today’s customer support teams operate in a dynamic, increasingly remote environment vastly different from that of a decade ago,” said Jake Saper, Emergence General Partner, in a statement. “But it’s shocking to learn how many support teams are still operating out of spreadsheets. At Emergence, we believe that Support Ops will become a critical complement to support teams, much like DevOps has become for developers. Having initially built their product to manage Stripe’s support function, we believe the Assembled team is the world’s best to build the core operating platform for Support Ops.”
Valuation is not being disclosed.
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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.”
Dixa, the Danish customer support platform promising more personalised customer support, has acquired Melbourne-based “knowledge management” SaaS Elevio to bolster its product and technology offerings.
The deal is said to be worth around $15 million, in a combination of cash and Dixa shares. This sees Elevio’s own VC investors exit, and Elevio’s founders and employees incentivised as part of the Dixa family, according to Dixa co-founder and CEO, Mads Fosselius.
“We have looked at many partners within this space over the years and ultimately decided to partner with Elevio as they have what we believe is the best solution in the market,” he tells me. “Dixa and Elevio have worked together since 2019 on several customers and great brands through a strong and tight integration between the two platforms. Dixa has also used Elevio’s products internally and to support our own customers for self service, knowledge base and help center”.
Fosselius says that this “close partnership, strong integration, unique tech” and a growing number of mutual customers eventually led to a discussion late last year, and the two companies decided to go on a journey together to “disrupt the world of customer service”.
“The acquisition comes with many interesting opportunities but it has been driven by a product/tech focus and is highly product and platform strategic for us,” he explains. “We long ago acknowledged that they have the best knowledge product in the market. We could have built our own knowledge management system but with such a strong product already out there, built with a similar tech stack as ours and with a very aligned vision and culture fit to Dixa, we felt this was a no brainer”.
Founded in 2015 by Jacob Vous Petersen and Mads Fosselius, Dixa wants to end bad customer service with the help of technology that claims to be able to facilitate more personalised customer support. Originally dubbed a “customer friendship” platform, the Dixa cloud-based software works across multiple channels — including phone, chat, e-mail, Facebook Messenger, WhatsApp and SMS — and employs a smart routing system so the right support requests reach the right people within an organisation.
Broadly speaking, the platform competes with Zendesk, Freshdesk and Salesforce. However, there’s also overlap with Intercom in relation to live chat and messaging, and perhaps MessageBird with its attempted expansion to become an “Omnichannel Platform-as-a-Service” (OPaaS) to easily enable companies to communicate with customers on any channel of their choosing.
Meanwhile, Elevio is described as bridging the gap between customer support and knowledge management. The platform helps support agents more easily access the right answers when communicating with customers, and simultaneously enables end-users to get information and guidance to resolve common issues for themselves.
Machine learning is employed so that the correct support content is provided based on a user’s query or on-going discussion, whilst also alerting customer support teams when documents need updating. The Australian company also claims that creating user guides using Elevio doesn’t require any technical skills and says its “embeddable assistant” enables support content to be delivered in-product or injected into any area of a website “without involving developers”.
Adds the Dixa CEO : “Customer support agents still spend a lot of time helping customers with the same type of questions over and over again. Together with Elevio we are able to ensure that agents are given the opportunity to quickly replicate best practice answers, ensuring fast, standardised and correct answers for customers. Elevio is the world leader in applying machine learning to solve this problem”.
Coinbase has a problem. As interest in Bitcoin has soared along with its price, the popular cryptocurrency exchange has found itself the target of a growing spate of angry customers who haven’t been able to access customer service.
A quick look at Twitter tells the story. As one upset user of the service ranted earlier today: “Multiple issues over the last month which cost me $$$ several open cases and 0% response?? When are you going to help me or is it easier to just forget. This wont be so easy when your publicly traded. Will be following up with [SEC] soon.”
There are many (many) similar complaints to be found.
In the interest of full disclosure, this editor asked the company this week for more insight into its customer service operations after emailing its support staff more than a half dozen times and tweeting once over 10 days, and receiving no response. (I bought one unit of Ether in 2018 on the platform and wanted to access my account, which I’d been locked out of nearly two years ago.)
To its credit, Coinbase today issued a statement, promising to do better. Its VP of customer success, Casper Sorenson, wrote on the company’s blog that Coinbase is “committing to a better customer experience during this time of heightened interest in the cryptoeconomy.” The company says it is adding more people to its team; adding more self-service options (there are startling few); expanding its “help center”; and launching a new educational site, Coinbase Learn, “as a one-stop-shop for first timers, experienced investors, and everyone in between.”
Most meaningful perhaps, Coinbase says that in the coming months, it will begin offering live messaging with Coinbase representatives, which is not currently an option. Indeed, Coinbase does not offer live support of any kind. A help support phone line is only available to users wanting to freeze their accounts, and it is automated. (The flip side of its slow customer response times may tie to the apparent seriousness with which Coinbase, which works closely with regulated banks, takes security issues.)
Either way, the company will have to do far more for its increasingly mainstream users as a publicly traded outfit, both because regulators will undoubtedly take a greater interest in its unhappy customers and because it will otherwise lose existing and potential clients to rivals, of which there are a growing array, from the international payment giant PayPal, which is now seeing record daily cryptocurrency trading, to investment brokers like Robinhood. (Another increasingly popular option: digital asset managers like Grayscale, whose trusts are publicly traded over the counter.)
More attention to the issue appears overdue. While Coinbase has presumably been dealing with a surge in complaints that corresponds with the volatility of Bitcoin’s ups and downs, customer service has been an ongoing issue for the nearly nine-year-old, San Francisco outfit, which filed its confidential form with the SEC in December to go public and says it has 35 million users in more than 100 countries.
In 2018, Mashable obtained 134 pages of complaints filed to the SEC and the California Department of Business Oversight following a five-month FOIA process, and the picture that emerged was “not of a responsible actor in the cryptocurrency space opening the market to new investors, but rather a company overwhelmed by and underprepared for its own success,” the outlet reported at the time.
Asked today, among other things, how Coinbase’s processes have since changed, how many of its more than 1,200 employees are focused on customer support, and whether the outfit could share its latest customer numbers, Coinbase, currently in its SEC-mandated quiet period, declined to comment.
Coinbase has raised $547.3 million in venture backing over the years, according to Crunchbase. Tiger Global Management, which is currently raising up to $3.75 billion for its newest fund, led Coinbase’s company’s most recent private round, a $300 million Series E financing that closed in 2018 and assigned Coinbase a post-money valuation of $8 billion.
Last September, the company parted ways with more than 5% of its employees, after cofounder and CEO Brian Armstrong publicly discouraged employee activism and political discussions at work, then offered severance to staffers who were uncomfortable with the policy.
Roughly 60 people took the company up on the offer, Coinbase itself later revealed.
Coinbase’s IPO has been eagerly anticipated by many, though changes in Washington could potentially have a dampening effect on the company and other exchanges.
Coinbase’s own former chief legal officer, Brian Brooks, was last summer appointed as the acting head of the Office of the Comptroller of the Currency (OCC), and among his other crypto-friendly efforts, he published interpretive letters and announcements declaring that banks can partner with crypto custodians and conduct payments using stablecoins.
It was never entirely clear how much weight those letters and announcements carried. Asked last week about Brooks’s most recent interpretive letter, in which he stated that financial institutions can participate as nodes on a blockchain and store or validate payments, the FDIC said in an emailed response that it had no comment.
Asked last week if Brooks’s letter signaled changing U.S. monetary policy, the U.S. Treasury Department did not respond to our press request.
Brooks’s reign has ended, in any case. With a new incoming administration, he resigned from his position this week, replaced by a career OCC employee, Blake Paulson, who may himself be replaced in coming weeks. The change leaves question about how and whether the agency’s tone toward cryptocurrency will change.
Meanwhile, Gary Gensler, a former financial regulator and Goldman Sachs banker who has most recently been teaching at M.I.T. is expected to be nominated to lead the SEC. He is also expected to welcome greater oversight of the $1 trillion cryptocurrency market than Jay Clayton, the Wall Street attorney who stepped down from the role last month after three years.