A US/Israeli startup, Sorbet — which is tackling what companies do with the financial risks as employees accrue Paid Time Off (PTO) — has raised $6 million in a Seed funding round led by Viola Ventures, with participation by Global Founders Capital, Meron Capital.
The economics of Paid Time Off is relatively hidden in the business world, but essentially,
Sorbet takes on the burden of this PTO from employers and then allows employees to spend it. This gives the employers far more control over the whole process and the ability to forecast its impact on the business.
Sorbet says that in the US, employees use only 72% PTO balances, even though it’s the most sought-after benefit. But this, effectively, comes out at 768 million unused days off a year, worth around $224 billion. This creates a difficult problem for CFO’s and accountants because its creates balance sheet liabilities on the company’s books, says Sorbet. If the employee doesn’t use all of their PTO, the employer can end up owing them a lot of money which creates a cash flow liability on the company’s books. So Sorbet buys out these PTO liabilities from employees, then loads the cash value of the PTO on prepaid Credit Cards for the employees.
Speaking to me on a call, CEO and cofounder Veetahl Eilat-Raichel, said: “We researched this whole idea of paid time off and found this huge, massive market failure and inefficiency around the way that PTO is constructed. It’s kind of one of those things where, on the face of it, there’s this boring bureaucratic payroll item that turns into a boring balance sheet item. But under it is a $224 billion problem for US businesses… If you think about it, employers are borrowing money from their employees at the worst terms possible and employees aren’t benefitting either. So everyone’s hurting here.”
She said: “Sorbet assumes the liability on ourselves and so then we can allow the company to control their cash flow and decide when they want to pay us back. They gain a lot of financial value because we are able to be very, very attractive on our funding. So it saves costs, it provides them with complete control of their cash flow, and it allows them to give out amazing financial benefits to employees at a time where we can all use some extra cash right now.”
The platform Sorbet has built will, it says, sync with calendars, HR, and payroll systems, identifies habits, and then proactively suggests personalized, pre-approved 3-6 hour “Micro Breaks”, 1-4 day “Micro Vacations” and +1 week Vacations. This, says the startup, increases PTO used by as much as 15%.
Employers can constantly renegotiate the terms of the loan with Sorbet, thus matching future cash flow, insulating themselves against salary raises (wage inflation), and take advantage of other benefits.
The cofounders are Eilat-Raichel, who previously worked at L’Oreal and Lockheed Martin, and a Fintech entrepreneur; Eliaz Shapira, co-founder and CPO; and Rami Kasterstein co-founder and board Member.
Mere weeks after rival corporate spend startup Ramp announced that it raised a two-part round worth $115 million at a $1.6 billion valuation, this morning Brex disclosed a $425 million Series D led by Tiger Global.
The new capital marks Brex’s largest fundraise to date, and was compiled at a valuation that is more than double its most recent private valuation. According to Crunchbase data, Brex’s mid-2020 Series C valued the company at just over $3.0 billion, including the investment’s $150 million in issued equity.
The dueling rounds raised by Brex and Ramp underscore how active their product category is proving to be. Far from its roots in merely offering perk-laden corporate cards to growing companies, Brex and its myriad rivals — including Utah unicorn Divvy, Airbase and others — are building software suites around their core plastic efforts to help companies manage all elements of their spending.
A growing rift is showing in how, compared to some rivals, the categories’ largest players, including Brex, Divvy and Ramp, forgo charging for their software, content to eat off other revenue sources including interchange. Airbase, in contrast, charges for its software.
Don’t expect the software arms race between corporate spend startups’ unicorns to lead to more corporate spend startups deriving software revenues in addition to their current income sources; each is growing their spend rapidly enough to warrant more time with their foot on the customer growth pedal over working to juice more per-customer revenue in the short-term. Update: Boy was that wrong. Brex announced, in a separate release so we missed it at first, that they have put together a new service called Brex Premium that costs $49 per month. More on that shortly, but we wanted to update this article ASAP.
Ramp, for example, disclosed that it is nearly on a $1 billion spend-managed run rate. Brex, worth a multiple of the younger startup, is presumably above that mark.
TechCrunch reached out to Brex, curious about its 2020 and Q1 2021 growth results. The company provided a statement to TechCrunch, claiming that it is “onboarding thousands of new tech and non-tech customers every month.” Brex also said that it grew its “total customer” figure by 80% in the first quarter, “with total monthly customer additions increasing by 5x.”
That’s precisely the sort of growth that makes late-stage investors excited. TechCrunch is speaking with the Brex CEO shortly; more after that call.
Cuckoo Internet, which is aiming to be an insurgent startup in the broadband provider space in the UK, has closed a $6 million investment round led by RTP Global, along with participation from JamJar Investments. It will also launch on price-comparison site uSwitch.
RTP Global was an early backer of Yandex, Delivery Hero, and Datadog. JamJar has backed Bulb, Deliveroo, Tails and Oatly. Other individual investors in the round included former executives of Monzo and Stripe,
Cuckoo’s pitch is that it has a simple broadband offering, suppling a single 67 Mb/s fibre deal on a monthly rolling contract with “no hidden fees” it says.
In a statement Alexander Fitzgerald, Founder and CEO at Cuckoo, said: “The broadband market is broken and consumers are being ripped off every day. The importance of fast, reliable and affordable broadband has come into sharper focus with millions of people working from home over the past year. We’re excited that this funding will enable us to help tens of thousands of people across the country make their broadband simple, for good.”
Gareth Jefferies, Partner at RTP Global, said: “Consumer broadband is one of the largest markets yet one of the most poorly served. Consumers are fatiguing of customer-hostile pricing practices, inflexible contracts and deliberately awful customer service, and just as we have seen in insurance, energy and banking, we will see a number of challenger providers come in to eat incumbents’ lunch with differentiated product packagings and a fresh respect for their customers.”
Nearly exactly one month ago, digital real estate platform Loft announced it had closed on $425 million in Series D funding led by New York-based D1 Capital Partners. The round included participation from a mix of new and existing investors such as DST, Tiger Global, Andreessen Horowitz, Fifth Wall and QED, among many others.
At the time, Loft was valued at $2.2 billion, a huge jump from its being just near unicorn territory in January 2020. The round marked one of the largest ever for a Brazilian startup.
Now, today, São Paulo-based Loft has announced an extension to that round with the closing of $100 million in additional funding that values the company at $2.9 billion. This means that the 3-year-old startup has increased its valuation by $700 million in a matter of weeks.
Baillie Gifford led the Series D-2 round, which also included participation from Tarsadia, Flight Deck, Caffeinated and others. Individuals also put money in the extension, including the founders of Better (Vishal Garg), GoPuff, Instacart, Kavak and Sweetgreen.
Loft has seen great success in its efforts to serve as a “one-stop shop” for Brazilians to help them manage the home buying and selling process.
Image courtesy of Loft
In 2020, Loft saw the number of listings on its site increase “10 to 15 times,” according to co-founder and co-CEO Mate Pencz. Today, the company actively maintains more than 13,000 property listings in approximately 130 regions across São Paulo and Rio de Janeiro, partnering with more than 30,000 brokers. Not only are more people open to transacting digitally, more people are looking to buy versus rent in the country.
“We did more than 6x YoY growth with many thousands of transactions over the course of 2020,” Pencz told TechCrunch at the time of the company’s last raise. “We’re now growing into the many tens of thousands, and soon hundreds of thousands, of active listings.”
The decision to raise more capital so soon was due to a variety of factors. For one, Loft has received “overwhelming investor interest” even after “a very, very oversubscribed main round,” Pencz said.
“We have seen a continued acceleration in our market share growth, especially in São Paulo and Rio de Janeiro, the two markets we currently operate in,” he added. “We saw an opportunity to grow even faster with additional capital.”
Pencz also pointed out that Baillie Gifford has relatively large minimum check size requirements, which led to the extension being conducted at a higher price and increased the total round size “by quite a bit to be able to accommodate them.”
While the company was less forthcoming about its financials as of late, it told me last year that it had notched “over $150 million in annualized revenues in its first full year of operation” via more than 1,000 transactions.
The company’s revenues and GMV (gross merchandise value) “increased significantly” in 2020, according to Pencz, who declined to provide more specifics. He did say those figures are “multiples higher from where they were,” and that Loft has “a very clear horizon to profitability.”
Pencz and Florian Hagenbuch founded Loft in early 2018 and today serve as its co-CEOs. The aim of the platform, in the company’s words, is “bringing Latin American real estate into the e-commerce age by developing online alternatives to analogue legacy processes and leveraging data to create transparency in highly opaque markets.” The U.S. real estate tech company with the closest model to Loft’s is probably Zillow, according to Pencz.
In the United States, prospective buyers and sellers have the benefit of MLSs, which in the words of the National Association of Realtors, are private databases that are created, maintained and paid for by real estate professionals to help their clients buy and sell property. Loft itself spent years and many dollars in creating its own such databases for the Brazilian market. Besides helping people buy and sell homes, it offers services around insurance, renovations and rentals.
In 2020, Loft also entered the mortgage business by acquiring one of the largest mortgage brokerage businesses in Brazil. The startup now ranks among the top-three mortgage originators in the country, according to Pencz. When it comes to helping people apply for mortgages, he likened Loft to U.S.-based Better.com.
This latest financing brings Loft’s total funding raised to an impressive $800 million. Other backers include Brazil’s Canary and a group of high-profile angel investors such as Max Levchin of Affirm and PayPal, Palantir co-founder Joe Lonsdale, Instagram co-founder Mike Krieger and David Vélez, CEO and founder of Brazilian fintech Nubank. In addition, Loft has also raised more than $100 million in debt financing through a series of publicly listed real estate funds.
Loft plans to use its new capital in part to expand across Brazil and eventually in Latin America and beyond. The company is also planning to explore more M&A opportunities.
The race to decarbonize aviation got a boost this Earth Day with the announcement of a $20.5 million Series A round by Universal Hydrogen, a San Francisco-based startup aiming to develop hydrogen storage solutions and conversion kits for commercial aircraft.
“Hydrogen is the only viable path for aviation to reach Paris Agreement targets and help limit global warming,” said founder and CEO Paul Eremenko in an interview with TechCrunch. “We are going to build an end-to-end hydrogen value chain for aviation by 2025.”
The round was led by Playground Global, with an investor syndicate including Fortescue Future Industries, Coatue, Global Founders Capital, Plug Power, Airbus Ventures, Toyota AI Ventures, Sojitz Corporation and Future Shape.
The company’s first product will be lightweight modular capsules to transport “green hydrogen,” produced using renewable power to aircraft equipped with hydrogen fuel cells. The capsules will ultimately be available in different sizes for aircraft ranging from VTOL air taxis to long-distance, single-aisle planes.
“We want them to be interchangeable within each class of aircraft, a bit like consumer batteries today,” says Eremenko.
To help kickstart the market for its capsules, Universal Hydrogen is developing one such plane itself, a modified 19-seat turboprop capable of regional flights of up to 700 miles. The effort is a collaboration with Plug Power, which will supply the hydrogen and fuel cells, and seed investor magniX, which develops motors for electric aircraft.
Eremenko hopes to have the plane flying paying passengers by 2025, and ultimately to produce kits for regional airlines to retrofit their own aircraft.
“We want to have a couple of years of service to de-risk hydrogen certification and passenger acceptance before Boeing and Airbus decide on the airplanes they are going to build in the early 2030s,” says Eremenko. “It’s imperative that at least one of them build a hydrogen airplane or aviation is not going to hit its climate goals.”
Universal Hydrogen is not alone in betting on hydrogen. ZeroAvia in the U.K. is developing its own regional fuel cell aircraft on an even more ambitious timeline, and Airbus in particular has been working on hydrogen aircraft concepts.
Eremenko hopes that producing a simple and safe hydrogen logistics network will soon attract new entrants.
“It’s like the Nespresso system. We have to make the first coffee maker or nobody cares about our capsule technology, but we don’t want to be in the coffee maker business. We want other people to build coffee with our capsules.”
Universal Hydrogen will use the Series A funds to grow its current 12-person team to around 40 and accelerate its technology development.
30kW sub-scale demonstration of Universal Hydrogen’s aviation powertrain, with Plug Power’s hydrogen fuel cell and a magniX motor.
Coinswitch Kuber, a startup that allows young users in India to invest in cryptocurrencies, said on Thursday it has raised $25 million in a new financing round as it looks to expand its reach in India, the world’s second largest internet market and also the place where the future of private cryptocurrencies remains uncertain for now.
Tiger Global financed the entire Series B funding round of Coinswitch Kuber and valued the three-year-old Indian startup at over $500 million. The announcement of Series B comes just three months after Coinswitch closed its $15 million Series A round from Ribbit Capital, Sequoia Capital India, and Kunal Shah. The Bangalore-based startup has raised $41.5 million to date.
TechCrunch reported earlier this month that the New York-headquartered technology hedge fund had led or was in advanced stages of talks to lead investments in many Indian startups including Coinswitch.
Coinswitch Kuber is one of the handful of startups operating in the cryptocurrency space today. The crypto exchange allows users to buy slivers of several popular cryptocurrencies. A user on Coinswitch, for instance, can buy small sachets of bitcoin and other currencies for as low as 100 Indian rupees ($1.3)-worth.
The startup said it has amassed over 4.5 million users, more than half of whom are aged 25 or younger. In the past 11 months, Coinswitch Kuber said it processed transactions over $5 billion.
But how the startup, which aims to add 5.5 million by the end of this year, performs in the future is not entire in its hand.
While trading of private cryptocurrency such as bitcoin is currently legal in India, New Delhi is widely expected to introduce a law that bans all private cryptocurrency.
Ashish Singhal, co-founder and chief executive of Coinswitch Kuber, said he is optimistic that India will not ban private cryptocurrencies, but said the startup closed the financing round with Tiger Global before New Delhi’s indication to formulate a law.
“This investment round brings us at par with some of the most sought after cryptocurrency companies in the world and sets us up for the long run,” said Singhal.
In recent months, some crypto startups in India have started to explore a contingency plan in the event the nation does end up banning cryptocurrency trading in the country. Many startups are today building in India, but focusing on serving customers overseas.
“As they build India’s leading cryptocurrency platform, CoinSwitch is well positioned to capture the tremendous growing interest in crypto among retail investors. We are excited to partner with CoinSwitch as they innovate in this emerging asset class,” said Scott Shleifer, Partner at Tiger Global, in a statement.
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
I’m a female entrepreneur who created my first startup a few months ago.
Once my startup gets off the ground — and as COVID-19 gets under control — I’d like to visit the United States to test the market and meet with investors. Which visas would allow me to do that?
—Noteworthy in Nairobi
Congratulations on founding your startup! There are many ways to engage with the U.S. startup ecosystem, and you can start now, even before you physically come to the United States.
I recommend doing some research into the programs and resources offered to entrepreneurs like you through the U.S. Embassy and Consulates near you in your home country. I recently interviewed Lilly Wahl-Tuco, a foreign service officer who has worked for the U.S. Department of State for 15 years, on my podcast.
Wahl-Tuco discussed some of the State Department resources — including programs, competitions and grants — made available by U.S. embassies and consulates for entrepreneurs living in the area.
Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)
Serving as the first Environment, Science, Technology and Health (ESTH) officer at the U.S. Embassy in Bosnia and Herzegovina in 2015, Wahl-Tuco was tasked with energizing the entrepreneurs of Bosnia. After she traveled around the country, visiting every incubator and meeting several entrepreneurs, Wahl-Tuco said she was surprised that most of the people she talked with didn’t know about the resources that the U.S. government offers through its embassies.
She recommends that entrepreneurs reach out, network and do online research to figure out what’s offered in their country or even if other foreign embassies offer resources and programs aimed at entrepreneurs.
Wahl-Tuco also suggested that entrepreneurs reach out to their local U.S. Embassy. For example, you can contact the U.S. Embassy in Kenya to find out if you can discuss your startup and business plan with an ESTH officer (if there is one) or someone else there. Connecting with embassy staff can open up many opportunities.
Chili Piper, which has a sophisticated SaaS appointment scheduling platform for sales teams, has raised a $33 million B round led by Tiger Global. Existing investors Base10 Partners and Gradient Ventures (Google’s AI-focused VC) also participated. This brings the company’s total financing to $54 million. The company will use the capital raised to accelerate product development. The previous $18M A round was led by Base10 and Google’s Gradient Ventures 9 months ago.
It’s main competitor is Calendly, started 21/2 years previously, which recently achieved a $3Bn valuation.
Launched in 2016, Chili Piper’s software for B2B revenue teams is designed to convert leads into attended meetings. Sales teams can also use it to book demos, increase inbound conversion rates, eliminate manual lead routing, and streamline critical processes around meetings. It’s used by Intuit, Twilio, Forrester, Spotify, and Gong.
Chili Piper has a number of different tools for businesses to schedule and calendar accountments, but its key USP is in its use by ‘inbound SDR Sales Development Representatives (SDR)’, who are responsible for qualifying inbound sales leads. It’s particularly useful in scheduling calls when customers hit websites ask for a salesperson to call them back.
Nicolas Vandenberghe, CEO, and co-founder of Chili Piper said: “When we started we sold the house and decided to grow the company ourselves. So all the way until 2019 we bootstrapped. Tiger gave us a valuation that we expected to get at the end of this year, which will help us accelerate things much faster, so we couldn’t refuse it.”
Alina Vandenberghe, CPO, and Co-founder said: “We’re proud to have so many customers scheduling meetings and optimizing their calendars with Chili Piper’s Instant Booker.”
Since the pandemic hit, the husband-and-wife founded company has gone fully remote, with 93 employees in 81 cities and 21 countries.
John Curtius, Partner at Tiger Global said: “When we met Nicolas and Alina, we were fired up by their product vision and focus on customer happiness.”
TJ Nahigian, Managing Partner at Base10 Partners, added: “We originally invested in Chili Piper because we knew customers needed ways to add fire to how they connected with inbound leads. We’ve been absolutely blown away with the progress over the past year, 2020 has been a step-change for this company as business went remote.”
E-commerce is booming, but among the biggest challenges for entrepreneurs of online businesses are finding a place to store the items they are selling and dealing with the logistics of operating.
Tyler Scriven, Maxwell Bonnie and Paul D’Arrigo co-founded Saltbox in an effort to solve that problem.
The trio came up with a unique “co-warehousing” model that provides space for small businesses and e-commerce merchants to operate as well as store and ship goods, all under one roof. Beyond the physical offering, Saltbox offers integrated logistics services as well as amenities such as the rental of equipment and packing stations and access to items such as forklifts. There are no leases and tenants have the flexibility to scale up or down based on their needs.
“We’re in that sweet spot between co-working and raw warehouse space,” said CEO Scriven, a former Palantir executive and Techstars managing director.
Saltbox opened its first facility — a 27,000-square-foot location — in its home base of Atlanta in late 2019, filling it within two months. It recently opened its second facility, a 66,000-square-foot location, in the Dallas-Fort Worth area that is currently about 40% occupied. The company plans to end 2021 with eight locations, in particular eyeing the Denver, Seattle and Los Angeles markets. Saltbox has locations slated to come online as large as 110,000 square feet, according to Scriven.
The startup was founded on the premise that the need for “co-warehousing and SMB-centric logistics enablement solutions” has become a major problem for many new businesses that rely on online retail platforms to sell their goods, noted Scriven. Many of those companies are limited to self-storage and mini-warehouse facilities for storing their inventory, which can be expensive and inconvenient.
Scriven personally met with challenges when starting his own e-commerce business, True Glory Brands, a retailer of multicultural hair and beauty products.
“We became aware of the lack of physical workspace for SMBs engaged in commerce,” Scriven told TechCrunch. “If you are in the market looking for 10,000 square feet of industrial warehouse space, you are effectively pushed to the fringes of the real estate ecosystem and then the entrepreneurial ecosystem at large. This is costing companies in significant but untold ways.”
Now, Saltbox has completed a $10.6 million Series A round of financing led by Palo Alto-based Playground Global that included participation from XYZ Venture Capital and proptech-focused Wilshire Lane Partners in addition to existing backers Village Capital and MetaProp. The company plans to use its new capital primarily to expand into new markets.
The company’s customers are typically SMB e-commerce merchants “generating anywhere from $50,000 to $10 million a year in revenue,” according to Scriven.
He emphasizes that the company’s value prop is “quite different” from a traditional flex office/co-working space.
“Our members are reliant upon us to support critical workflows,” Scriven said.
Besides e-commerce occupants, many service-based businesses are users of Saltbox’s offering, he said, such as those providing janitorial services or that need space for physical equipment. The company offers all-inclusive pricing models that include access to loading docks and a photography studio, for example, in addition to utilities and Wi-Fi.
Image Credits: Saltbox
Image Credits: Saltbox
The company secures its properties with a mix of buying and leasing by partnering with institutional real estate investors.
“These partners are acquiring assets and in most cases, are funding the entirety of capital improvements by entering into management or revenue share agreements to operate those properties,” Scriven said. He said the model is intentionally different from that of “notable flex space operators.”
“We have obviously followed those stories very closely and done our best to learn from their experiences,” he added.
Investor Adam Demuyakor, co-founder and managing partner of Wilshire Lane Partners, said his firm was impressed with the company’s ability to “structure excellent real estate deals” to help them continue to expand nationally.
He also believes Saltbox is “extremely well-positioned to help power and enable the next generation of great direct to consumer brands.”
Playground Global General Partner Laurie Yoler said the startup provides a “purpose-built alternative” for small businesses that have been fulfilling orders out of garages and self-storage units.
Saltbox recently hired Zubin Canteenwalla to serve as its chief operating offer. He joined Saltbox from Industrious, an operator co-working spaces, where he was SVP of Real Estate. Prior to Industrious, he was EVP of Operations at Common, a flexible residential living brand, where he led the property management and community engagement teams.
Outschool, a marketplace providing small-group, virtual after-school activities for children has raised a $75 million Series C led by Coatue and Tiger Global Management. TechCrunch first learned of the round from sources familiar with the transaction; the company confirmed the deal to TechCrunch later today.
The new funding values Outschool’s at $1.3 billion, around 4 times higher than its roughly $320 million valuation set less than a year ago.
To date, Outschool has raised $130 million in venture capital to date, inclusive of its new round.
The company’s valuation growth curve is steep for any startup, let alone an edtech concern that saw the majority of its growth during the pandemic. But while CEO and co-founder Amir Nathoo says his company’s new valuation is partially a reflection of today’s fundraising frenzy, he thinks revenue sustainability is a key factor in his company’s recent fundraise.
The new unicorn’s core product is after school classes for entertainment or supplemental studies, on an ongoing or one-off basis. As the company has grown, ongoing classes have grown from 10% of its business to 50% of its business, implying that the startup is generating more reliable revenue over time.
The change from one-off classes to enduring engagements could be good for the company and its students. On the former, recurring revenue is music to investor ears. On the latter, students need repetition to develop close relationships with a course and a group. Ongoing classes about debate or a weekly zombie dance class makes for a stickier experience.
Nathoo says everyone always asks what the most popular classes are, but said it continues to change since its main clientele – kids – have evolving favorites. One week it might be math, the other it might be minecraft and architecture.
Its changing revenue profile helped Outschool generate more than $100 million in bookings in 2020, compared to $6 million in 2019 and just $500,000 in 2017. Nathoo declined to share the company’s expectations for 2021 beyond “projecting to grow aggressively.”
Outschool reached brief positive cash flow last year as a result of massive growth in bookings, but Nathoo shared that that has since changed.
“My goal is to always stay within touching distance of profit,” he said. “But given the fast change in the market, it makes sense to invest aggressively into opportunities that will make sense in the long-term.”
Nathoo expects to grow Outschool’s staff from 110 people to 200 by the end of the year, with a specific focus on international growth. In 2020, Outschool launched in Canada, New Zealand, Australia and the UK, so hiring will continue there and elsewhere.
On the flip side, Outschool isn’t teachers at the same clip it was at the height of the pandemic in the United States. When the pandemic started, Outschool had 1,000 teachers on its platform. Within months, Outschool grew to host 10,000 teachers, a screening process that the founder explained was resource-heavy but vital. Outschool makes more money if teachers join the platform full-time: teachers pocket 70% of the price they set for classes, while Outschool gets the other 30% of income. But, Nathoo views the platform as more of a supplement to traditional education. Instead of scaling revenue by convincing teachers to come on full-time, the CEO is growing by adding more part-time teachers to the platform.
Similar to how Airbnb created a host endowment fund to share its returns with the people who made its platform work, Outschool has dedicated 2% of its fundraise to creating a similar program to reward teachers on its platform in the event of liquidity.
One of Outschool’s most ambitious goals is, ironically, to go in school. While some startups have found success selling to schools amid the pandemic, district sales cycles and tight budgets continue to be a difficult challenge for scaling purposes. Still, the startup wants to make its way into students’ lives through contracts with schools and employers, which could help low income families access the platform. Nathoo says enterprise sales is a small part of its business, but the strategy began just last year as part of COVID-19 response. It is currently piloting its B2B offering with a number of schools.
Outschool will also consider acquiring early-stage startups focused on direct-to-consumer learning in international markets. While no acquisitions have been made by the startup to date, consolidation in the edtech sector broadly is heating up.
Nathoo stressed that Outschool’s continued growth, even as schools reopen, has de-risked the company from post-pandemic worries.
“There’s going to be a big spike of in-person activities because everyone is going to want to do that at once,” he said. “But then we’re going to settle at some more even distribution because the future of education is hybrid.”
He added that Outschool’s ethos around online learning hasn’t changed since conception. The company has never seen opportunity in the for-credit, subject-matter digital education sector, and instead has focused more on supplemental ways to support students after school.
“That’s the piece of the education system that is underserved and that was missing,” he said. “The advantages of online learning will remain in the convenience, the cost, and the variety of what you can get that isn’t always available locally.”
The money will be used to propel the company’s growth this year, building on 600% year-over-year growth as of the start of 2021, the company said in a statement.
Andrew Parker, the company’s founder and CEO, launched Papa as a consumer product in 2017. Seniors signed up for the service and a college student, called a Papa Pal, would show up at their door to help with anything from taking them to doctor appointments, helping around the house, providing tech support and offering companionship.
The idea was always to spend about six months collecting data and feedback and to then approach insurance companies. The Miami-based company has since partnered with 80 insurance providers who offer Papa nationwide as a benefit to their members. Employers can also offer Papa as a benefit. And while individuals can still sign up for the service, it is largely available through insurance.
“We have about 1 million eligible members on the platform, and about 15% use Papa every month,” Parker told TechCrunch. The company expects there to be between 5-6 million members on the platform starting January 2022.
“We’ve been able to prove that we improve the lives and health outcomes of older adults and families,” Parker said. “Most of all they’re trying to reduce loneliness and isolation to seniors.” The pandemic has only exacerbated loneliness and so Papa started offering virtual services, too.
The company has expanded its core offering to also include Papa Health, a suite of benefits that includes care navigation, virtual primary care and chronic care management, all of which are offered through the Papa platform. Additionally, the company’s services are now offered to families through Medicaid Managed Care, Parker said. “For example, maybe there’s a single mother with children who is trying to get a job – a Papa pal can help her out,” he added.
The idea for Papa came from a personal need within the Parker family. “I started Papa originally to help my grandfather – who we called Papa – who came from Argentina. He needed support and help and companionship, but he didn’t need bathing and toileting,” Parker said. To get help for his grandfather, Parker put an ad on Facebook asking, “Who wants to be a pal to my Papa?”
A virtual Papa visit
“We wanted someone young and energetic who would also benefit from my grandfather’s life experiences,” Parker said. While the company originally focused on students, it now works with anyone from the age of 18-45, though Parker reinforced that the company is stringent in who it accepts and has an acceptance rate below 10%. The company gets about 20,000 applications per month from people wanting to be pals.
For those who do work with Papa, Parker said their main role is to provide a sense of, “Hey, I’m here, and I care about you, and I’m here to support you.”
“There’s so much nuance to older adults’ lives, and 50% of older adults consider themselves lonely,” Parker added.
Tiger Global has invested in DealShare, a startup in India that has built an e-commerce platform for middle and lower-income groups of consumers, just three months after the Indian firm concluded its previous $21 million Series C funding round.
The New York-headquartered firm has the $100 million Series D round in three-year-old social commerce startup DealShare, two people familiar with the matter told TechCrunch. Tiger Global declined to comment, and a founder of the Indian startup didn’t return an email over the weekend.
DealShare kickstarted its journey the day Walmart acquired Flipkart, the startup’s founder and chief executive Vineet Rao said at a virtual conference late last year. Rao said that even as Amazon and Flipkart had been able to create a market for themselves in the urban Indian cities, much of the nation was still underserved. There was an opportunity for someone to jump in, he said.
The startup began as an e-commerce platform on WhatsApp, where it offered hundreds of products to consumers. It didn’t take long before a major consumer spending pattern was visible, Rao said. People were only interested in buying items that were selling at discounted rates, said Rao.
Over time, that idea has become part of DealShare’s core offering. Today it incentivizes consumers — by offering them discounts and cashbacks — to share deals on products with their friends. The startup, which has since launched its own app and website, now operates in over two dozen cities in India.
Consumers wanted products that were relevant to them and they wanted to buy these items at a price that instilled the most value for their bucks, said Rao. “We focused on locally produced items instead of national brands. Even today, 80% to 90% of items we sell are locally produced,” he said.
How DealShare model works. (Image and data by Bain & Company)
Amazon and Flipkart have captured less than 3% of the retail market in India, leaving room for firms to explore other models. Social commerce is one of the bets we’re seeing being play out in India. The other bet gaining traction is digitizing neighborhood stores in the country — without so much of the social element — that dot tens of thousands of towns, cities and villages in India.
The investment comes as Tiger Global looks to close over two dozen deals in India this year, TechCrunch reported on Monday. Tiger Global, which recently closed a $6.7 billion fund, last week led investments in social network ShareChat, business messaging platform Gupshup, and investment app Groww, and participated in fintech app CRED’s round, helping all of these startups attain the much sought after unicorn status.
Meesho, the market leading social commerce in India, also turned a unicorn last week after SoftBank led a $300 million round in the Indian firm, valuing it at $2.1 billion.
DealShare counts WestBridge, Falcon Edge Capital’s Alpha Wave, Z3Partners, and Omidyar Network among its investors.
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here. It is good to be back!
There was a lot to get through, so, in order that we discussed the topics on the show, here’s our rundown:
Don’t forget that Coinbase is listing this week, yeah? Chat soon!
Recent roars from an investment firm, credited to put Indian startups on the global map in the past decade and a half, are turning local young firms into unicorns at a pace never seen before in the world’s second largest internet market.
Tiger Global has written — or is in late stages of writing — more than 25 checks, spanning from a few million dollars to over $100 million, this year alone. About 10 of its investments have been unveiled so far with the rest still in the pipeline for the coming weeks and months.
The New York-headquartered firm, which recently closed a $6.7 billion fund, last week led investments in social network ShareChat, business messaging platform Gupshup, and investment app Groww, and participated in fintech app CRED’s round, helping all of these startups attain the much sought after unicorn status.
(A report in India speculated that Tiger Global plans to invest $3 billion of its new fund in Indian startups. TechCrunch understands the $3 billion figure is way off the mark.)
Tiger Global also invested in Infra.Market and Innovaccer, two other Indian startups that turned unicorn earlier this year. (India has delivered 10 unicorns this year already, up from seven last year and six in 2019.)
Tiger Global is currently in advanced stages to back epharmacy firm PharmEasy, which also turned into a unicorn last week, fintech firm ClearTax (at possibly $1 billion valuation), crypto exchange CoinSwitch, insurer Plum, B2B marketplace Moglix (at over $1 billion valuation), social firms Kutumb and Koo (at over $100 million valuation, per the CapTable), healthtech firm Pristyn Care, and Reshamandi, according to people familiar with the matter.
No other investment firm has written checks of this magnitude to Indian firms this year, and the frenzy has reached a point where dozens of startup founders are scrambling to get an intro with Tiger Global partners.
Every Indian startups' 1 year strategy in 8 words:
"Whatever I need to get funded by Tiger"
— arnav (@arnav_kumar) April 10, 2021
Tiger Global’s confidence in young Indian firms isn’t newly found. Its investment in Flipkart in 2009 and Ola in 2012 showed the opportunities and level of risk-appetite the U.S. firm was prepared to operate with in India, at a time when both the firms were struggling to raise money from some Indian investors.
Under its former partner Lee Fixel, the investment firm backed several young firms including online grocer Grofers, logistics startup Delivery, fashion e-commerce Myntra, news aggregator InShorts, electric scooter maker Ather Energy, music streaming service Saavn, fintech Razorpay, and web producer TVF.
A handful of startup founders, on the condition of anonymity, recalled their investments from Tiger Global, which they all said concluded within two to three weeks after the first call from the investment firm.
But the firm slowed down its investment pace when Fixel departed in 2019, and for nearly a year focused largely on backing SaaS startups.
Things have changed in recent quarters and Tiger Global has become more aggressive than ever before, said a venture capitalist, who has invested alongside Tiger Global in a few startups, on the condition of anonymity to be able to speak candidly.
The firm is now also exploring investment opportunities in months-old startups. Reshamandi, for instance, is still in its ideation phase.
The investor quoted above pointed to Infra.Market as another example of Tiger Global’s new strategy. It wrote its first check to Infra.Market in 2019, when the B2B startup was just two years old.
“Tiger then wanted to see if the startup can grow and convince other investors to back them. So in December, Infra.Market raised money at about $250 million valuation. Two months later, Tiger Global closed the new round at $1 billion valuation,” the investor said.
While great for startups, it creates a challenge for some investors, another investor said.
When Tiger Global values a startup at a level that much of the industry can’t match, and tends to not lead the subsequent round, there are very few firms that can invest in the following financing round, the investor said.
On private forums and in recent weeks, Clubhouse, a number of investors have cautioned that the recent optimism shared by some investors could prove challenging to materialize. “Tiger Global has traditionally got very optimistic in India every two to three years. The problem is that when it’s not optimistic, we are supposed to pick the tab,” one investor said.
“Under Scott Shleifer [MD at Tiger Global and pictured above], things may be different,” the investor added. Looking at Tiger Global’s recent activities elsewhere in the world, things sure look consistent — and India is positioned to be a key global playground for the firm — and several others — in the next few years.
India, the world’s third largest startup hub, is poised to produce 100 unicorns in the coming years, analysts at Credit Suisse wrote in a report for clients last month. “India’s corporate landscape is undergoing a radical change due to a remarkable confluence of changes in the funding, regulatory and business environment in the country over the past two decades. An unprecedented pace of new-company formation and innovation in a variety of sectors has meant a surge in the number of highly-valued, as-yet unlisted companies,” they wrote.
“The growth in highly valued companies has been enabled by a range of factors: (1) the natural shortage of risk capital in an economy with low per capita wealth has been addressed by a surge in (mostly foreign) private equity: these flows have exceeded public market transactions in each year of the last decade; (2) increase in teledensity and smartphone and internet penetration. Till 2005 less than 15% of Indians had a phone, versus 85% now; 700 mn-plus people have internet access now due to cheap data and falling smartphone prices (40% penetration now).”
“(3) deep-rooted physical infrastructure changes: nearly all habitations are now connected by all-weather roads compared to only half in 2000, and all households are electrified now vs. just 54% in 2001; (4) financial innovation is accelerating, courtesy the world-leading “India stack”, which has innovative applications like UPI built on a base of universal bank account access, mobiles, and the biometric-ID (Aadhaar), helped by greater data availability; and (5) development of ecosystems in several sectors that now provides a competitive advantage versus global peers; for example in technology (4.5 mn IT professionals) and pharma/biotech (several Indian firms can now afford US$200-300 mn of annual R&D).”
Few companies have done better than Scale at spotting a need in the AI gold rush early on and filling that gap. The startup rightly identified that one of the tasks most important to building effective AI at scale — the laborious exercise of tagging data sets to make them usable in properly training new AI agents — was one that companies focused on that area of tech would also be most willing to outsource. CEO and co-founder Alex Wang credits their success since founding, which includes raising over $277 million and achieving break-even status in terms of revenue, to early support from investors including Accel’s Dan Levine.
Accel haș participated in four of Scale’s financing rounds, which is all of them unless you include the funding from YC the company secured as part of a cohort in 2016. In fact, Levine wrote one of the company’s very first checks. So on this past week’s episode of Extra Crunch Live, we spoke with Levine and Wang about how that first deal came together, and what their working relationship has been like in the years since.
Scale’s story starts with a pivot, and with a bit of rule-breaking, too — Wang went off the typical YC book by speaking to investors prior to demo day when Levine cold-emailed him after seeing Scale on Product Hunt. The Product Hunt spot wasn’t planned, either — Wang was as surprised to see his company there as anyone else. But Levine saw the kernel of something with huge potential, and despite being a relative unknown in VC at the time, didn’t want to let the opportunity pass him, or Wang, by.
Both Wang and Levine were also able to provide some great feedback on decks submitted to our regular Pitch Deck Teardown segment, despite the fact that Levine actually never saw a pitch deck from Wang before investing (more on that later). If you’d like your pitch deck reviewed by experienced founders and investors on a future episode, you can submit your deck here.
As mentioned, Levine and Accel’s initial investment in Scale came from a cold email sent after the company appeared on Product Hunt. Wang said the team had just put out an early version of Scale, and then noticed that it was up on Product Hunt — it was submitted by someone else. The community response was encouraging, and it also led to Levine reaching out via email.
“One of the side effects of that, one of the outcomes, was that we got this cold email from Dan,” he said. “We really knew nothing about Dan until his cold email. So like many great stories that started with a bold, cold email. And we were pretty stressed about it at the time, because in YC, they tell you pretty definitively, ‘Hey, don’t talk to a VC during the batch,’ and we were squarely in the middle of the batch.”
Wang and the team were so nervous that they even considered “ghosting” Dan despite his obvious interest and the prestige of Accel as an investment firm. In the end, they decided to “go rogue” and respond, which led to a meeting at the Accel offices in Palo Alto.
A startup that began its journey in India 15 years ago, helping businesses reach and engage with users through texts said on Thursday it has attained the unicorn status and is also profitable.
San Francisco-headquartered Gupshup has raised $100 million in its Series F financing round from Tiger Global Management, which valued the 15-year-old startup at $1.4 billion.
The startup operates a conversational messaging platform, which is used by over 100,000 businesses and developers today to build their own messaging and conversational experiences to serve their users and customers.
Gupshup says each month its clients send over 6 billion messages.
“The growth in business use of messaging and conversational experiences, transforming virtually every customer touchpoint, is nothing short of extraordinary,” said John Curtius, a partner at Tiger Global Management, in a statement.
“Gupshup is uniquely positioned to win in this market with an advanced product, a differentiated strategy with substantial barriers, significant scale with growth, profitability with expanding margins and an experienced team with a proven track record.”
Tens of millions of users in India, including yours truly, remember Gupshup for a different reason, however. For the first six years of its existence, Gupshup was best known for enabling users in India to send group messages to friends.
That model eventually became unfeasible to continue, Beerud Sheth, co-founder and chief executive of Gupshup, told TechCrunch in an interview.
“For that service to work, Gupshup was subsidizing the messages. We were paying the cost to the mobile operators. The idea was that once we scale up, we will put advertisements in those messages. Long story short, we thought as the volume of messages increases, operators will lower their prices, but they didn’t. And also the regulator said we can’t put ads in the messages,” he recalled.
That’s when Gupshup decided to pivot. “We were neither able to subsidize the messages, nor monetize our user base. But we had all of this advanced technology for high-performance messaging. So we switched from consumer model to enterprise model. So we started to serve banks, e-commerce firms, and airlines that need to send high-level messages and can afford to pay for it,” he said.
Sheth said scores of major firms worldwide in banking, e-commerce, travel and hospitality and other sectors are among the clients of Gupshup. These firms are using Gupshup to send their customers with transaction information, and authentication codes among other use cases. “These are not advertising messages or promotional messages. These are core service information,” he said.
The startup, which had an annual run rate of $150 million, will use the fresh capital to broaden its product offering and court clients in more markets.
This is a developing story. More to follow…
Avant, an online lender that has raised over $600 million in equity, announced today that it has acquired Zero Financial and its neobank brand, Level, to further its mission of becoming a digital bank for the masses.
Founded in 2012, Chicago-based Avant started out primarily as an online lender targeting “underserved consumers,” but is evolving into digital banking with this acquisition. The company notched gross revenue of $265 million in 2020 and has raised capital over the years from backers such as General Atlantic and Tiger Global Management.
“Our path has always been to become the premier digital bank for the everyday American,” Avant CEO James Paris told TechCrunch. “The massive transition to digital over the last 12 months made the timing right to expand our offerings.”
The acquisition of Zero Financial and its neobank, Level (plus its banking app assets), will give Avant the ability to offer “a full ecosystem of banking and credit product offerings” through one fully digital platform, according to Paris. Those offerings include deposits, personal loans, credit cards and auto loans.
Financial terms of the deal weren’t disclosed other than the fact that the acquisition was completed with a combination of cash and stock.
Founded in 2016, San Francisco-based Zero Financial has raised $147 million in debt and equity, according to Crunchbase. New Enterprise Associates (NEA) led its $20 million Series A in May of 2019.
Level was unveiled to the public in February of 2020, created by the same California-based team that founded the “debit-style” credit card offering Zero, according to this FintechFutures piece. The challenger bank was created to target millennials dissatisfied with the incumbent banking options.
Zero Financial co-founder and CEO Bryce Galen said that Avant shared his company’s mission “to challenge the status quo by bringing innovative financial services products to consumers who might otherwise be unable to access them.”
Avant, notes Paris, uses thousands of AI-driven data points to determine credit risk. With this acquisition, that lens will be expanded with data, such as a deposit customer’s cash flow, how they manage their finances and whether they pay their bills on time.
“This will allow us to make credit decisions faster and deliver personalized options to help underbanked consumers gain financial freedom, at any and every stage of their financial journey,” Paris told TechCrunch. “It will also build long-term engagement and loyalty and help grow our reach beyond the 1.5 million customers we’ve served to date.”
Like a growing number of fintechs, Avant operates under the premise that a person’s ability to get credit shouldn’t be dictated by a credit score alone.
“A significant amount of Americans have poor, bad or no credit at all. For these people, accessing credit isn’t exactly easy and often comes with extra fees,” Paris said. That’s why, he added, Avant has focused on providing options for such consumers with “transparent, rewards-driven products.”
Level’s branchless, all-digital platform offers things such as cashback rewards on debit card purchases, a “competitive APY” on deposits, early access to paychecks and no hidden fees, all of which are especially beneficial for consumers on the path to financial freedom, according to Paris.
Since its inception in 2012, Avant has connected more than 1.5 million consumers to $7.5 billion in loans and 400,000 credit cards. The company launched its credit card in 2017 and over the past two years alone, it has grown its number of credit card users by 170%.
More than 200 million people in India transact money digitally, but fewer than 30 million invest in mutual funds and stocks.
An Indian startup that is attempting to change this figure by courting millennials announced a new financing round on Wednesday and turned into the newest unicorn in the world’s second largest internet market.
Bangalore-based Groww has raised $83 million in its Series D financing round, which valued the Indian startup at more than $1 billion, up from $250 million in $30 million Series C in September last year.
Tiger Global led the new round, and existing investors Sequoia Capital India, Ribbit Capital, YC Continuity and Propel Venture Partners participated in it, said the four-year-old Indian startup, which has raised $142 million to date.
On a side note, Groww is the eighth Indian startup to attain the unicorn status this year — and fourth this week. Social commerce Meesho turned a unicorn on Monday, fintech firm CRED on Tuesday, and earlier today epharmacy firm PharmEasy announced a new financing round that valued the firm at about $1.5 billion.
Groww allows users to invest in mutual funds, including systematic investment planning (SIP) and equity-linked savings, gold, as well as stocks, including those listed at U.S. exchanges. The app offers every fund that is currently available in India.
The startup has amassed over 15 million registered users, two-thirds of whom are first-time investors, Lalit Keshre, co-founder and chief executive of Groww, told TechCrunch in an interview.
Keshre said the startup — — co-founded by four former Flipkart executives including Harsh Jain, Neeraj Singh and Ishan Bansal — will deploy the fresh funds to accelerate its growth, and hire more talent. “We now have the fuel for longer-term thinking and faster growth,” he said.
More than 60% of Groww users come from smaller cities and towns of India and 60% of these have never made such investments before, said Keshre. The startup said it has conducted workshops in several small cities to educate people about the investment world.
Comparison of fintech market share in brokerage (BCG)
The coronavirus pandemic has also accelerated the startup’s growth as youngsters explore new hobbies. The startup competes with a handful of firms including Zerodha, Paytm Money, Upstox, ET Money, Smallcase, and traditional firms.
“We started Groww almost five years back to make investing accessible and transparent to everyone in India. We have made good progress, but it feels we have just got started,” said Keshre.
No-code startups continue to see a lot of traction among enterprises, where employees — strictly speaking, non-technical, but still using software every day — are getting hands-on and building apps to take on some of the more repetitive aspects of their jobs, the so-called “citizen coders” of the working world.
And in one of the latest developments, a Bryter — an AI-based no-code startup that has built a platforms used by some 100 global enterprises to date across some 2,000 business applications and workflows — is announcing a new round of funding to double down on that opportunity. The Berlin-based company has closed a Series B of $66 million, money that it will be investing into its platform and expanding in the U.S. out of a New York office it opened last year. The funding comes on the heels of seeing a lot of demand for its tools, CEO and co-founder Michael Grupp said in an interview.
“It was a great year for low-code and no-code platforms,” said Grupp, who co-founded the company with Micha-Manuel Bues and Michael Hübl. “What everyone has realized is that most people don’t actually care about the tech. They only care about the use cases. They want to get things done.” Customers using the service include the likes of McDonald’s, Telefónica, and PwC, KPMG and Deloitte in Europe, as well as banks, healthcare and industrial enterprises.
Tiger Global is leading this round, with previous backers Accel, Dawn Capital, Notion Capital and Cavalry Ventures all also participating, along with a number of individual backers (they include Amit Agharwal, CPO of DataDog; Lars Björk, former CEO of Qlik; Ulf Zetterberg, founder and CEO of Seal Software; and former ServiceNow global SVP James Fitzgerald). The valuation is not being disclosed; Bryter has raised around $90 million to date.
Accel and Dawn co-led Bryter’s Series A of $16 million less than a year ago, in June 2020, a rapid funding pace that underscores both interest in the no-code/low-code space — Bryter’s enterprise customer base has doubled from 50 since then — and the fact that startups in it are striking while the iron is hot.
Bryter’s not the only one: Airtable, Genesis, Rows, Creatio, and Ushur are among the many startups building ‘hands-on tech creation for non-techie people’ that have raised money in the last several months.
Automation has been the bigger trend that has propelled a lot of this activity. Knowledge workers today spend most of their time these days in apps — a state of affairs that pre-dates the Covid-19 pandemic, but has definitely been furthered throughout it. While some of that work still requires manual involvement and evaluation from those workers, software has automated large swathes of those jobs.
RPA — robotic process automation, where companies like UiPath, Automation Anywhere and Blue Prism have taken a big lead — has accounted for a significant chunk of that activity, especially when it comes to reading forms and lots of data entry. But there remains a lot of other transactions and activities within specific apps where RPA is typically not used (not yet at least!). And this is where non-tech workers are finding that no-code tools like Bryter, which use artificial intelligence to deliver more personalised, yet scalable, automation, can play a very useful role.
“We sit on top of RPA in many cases,” said Grupp.
The company says that business functions where its platform has been implemented include compliance, legal, tax, privacy and security, procurement, administration, and HR, and the kinds of features that are being built include virtual assistants, chatbots, interactive self-service tools, and more.
These don’t replace people as such but cut down the time they need to spend in specific tasks to process and handle information within them, and could in theory also be used to build tools for customers to interact with services more easily, cutting down on the amount of time that agents are getting details and handling engagements.
That scalability, and the rapid customer up-take from a pool of users that extends beyond tech early-adopters, are part of what attracted the funding.
“Bryter has all the characteristics of a top-tier software company: high quality product that solves a real customer pain point, a large market opportunity and a world-class founding team,” said John Curtius, a partner at Tiger Global, in a statement. “The feedback from Bryter’s customers was resoundingly positive in our research, and we are excited to see the company reach new heights over the coming years.”
“Bryter has seen explosive growth over the last year, signing landmark customers across a large number of sectors and use cases. This does not come as a surprise. In the pandemic-affected world, digitalisation is no longer a nice to have, it is an imperative,” added Evgenia Plotnikova, a partner at Dawn Capital.
Patreon has tripled its valuation to $4 billion in a $155 million funding round led by Tiger Global, the company confirmed to the Wall Street Journal on Tuesday.
The creator economy platform, which allows artists to be directly funded by their fans, received new attention amid the Covid-19 pandemic as creators were forced to push more of their work online. The creator payments space has seen a multitude of new entrants in recent months but the eight-year-old Patreon has already built up an extensive network. In a blog post last year, Patreon noted that more than 30,000 creators signed up for the service in the first weeks of March.
The company wrapped a $90 million round in September that valued the company at $1.2 billion. Patreon makes money by taking a 5-12 percent fee from creators depending on which of the company’s services they use.
Other investors in this new round include Woodline Partners, Wellington Management, Lone Pine Capital and New Enterprise Associates, the report notes.