Hello and welcome back to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world.
The tech industry in China has had quite a turbulent week. The government is upending its $100 billion private education sector, wiping billions from the market cap of the industry’s most lucrative players. Meanwhile, the assault on Chinese internet giants continued. Tech stocks tumbled after Tencent suspended user registration, sparking fears over who will be the next target of Beijing’s wrath.
Incisive observers point out that the new wave of stringent regulations against China’s internet and education firms has long been on Beijing’s agenda and there’s nothing surprising. Indeed, the central government has been unabashed about its desires to boost manufacturing and contain the unchecked powers of its service industry, which can include everything from internet platforms, film studios to after-school centers.
A few weeks ago I had an informative conversation with a Chinese venture capitalist who has been investing in industrial robots for over a decade, so I’m including it in this issue as it provides useful context for what’s going on in the consumer tech industry this week.
China is putting robots into factories at an aggressive pace. Huang He, a partner at Northern Light Venture Capital, sees three forces spurring the demand for industrial robots — particularly ones that are made in China.
Over the years, Beijing has advocated for “localization” in a broad range of technology sectors, from enterprise software to production line automation. One may start to see Chinese robots that can rival those of Schneider and Panasonic a few years down the road. CRP, an NLVC-backed industrial robot maker, is already selling across Southeast Asia, Russia and East Europe.
On top of tech localization, it’s also well acknowledged that China is facing a severe demographic crisis. The labor shortage in its manufacturing sector is further compounded by the reluctance of young people to do menial factory work. Factory robots could offer a hand.
“Youngsters these days would rather become food delivery riders than work in a factory. The work that robots replace is the low-skilled type, and those that still can’t be taken up by robots pay well and come with great benefits,” Huang observed.
Large corporations in China still lean toward imported robots due to the products’ proven stability. The problem is that imported robots are not only expensive but also selective about their users.
“Companies need to have deep technical capabilities to be able to operate these [Western] robots, but such companies are rare in China,” said Huang, adding that the overwhelming majority of Chinese enterprises are small and medium size.
With the exceptions of the automotive and semiconductor industries, which still largely rely on sophisticated, imported robots, affordable, easy-to-use Chinese robots can already meet most of the local demand for industrial automation, Huang said.
China currently uses nearly one million six-axis robots a year but only manufactures 20% of them itself. The gap, coupled with a national plan for localization, has led to a frenzy of investments in industrial robotics startups.
The rush isn’t necessarily a good thing, said Huang. “There’s this bizarre phenomenon in China, where the most funded and valuable industrial robotic firms are generating less than 30 million yuan in annual revenue and not really heard of by real users in the industry.”
“This isn’t an industry where giants can be created by burning through cash. It’s not the internet sector.”
Small-and-medium-size businesses are happily welcoming robots onto factory floors. Take welding for example. An average welder costs about 150,000 yuan ($23,200) a year. A typical welding robot, which is sold for 120,000 yuan, can replace up to three workers a year and “doesn’t complain at work,” said the investor. A quality robot can work continuously for six to eight years, so the financial incentive to automate is obvious.
Advanced manufacturing is not just helping local bosses. It will eventually increase foreign enterprises’ dependence on China for its efficiency, making it hard to cut off Chinese supply chains despite efforts to avoid the geopolitical risks of manufacturing in China.
“In electronics, for example, most of the supply chains are in China, so factories outside China end up spending more on logistics to move parts around. Much of the 3C manufacturing is already highly automated, which relies heavily on electricity, but in most emerging economies, the power supply is still quite unstable, which disrupts production,” said Huang.
The shock of antitrust regulations against Alibaba from last year is still reverberating, but another wave of scrutiny has already begun. Shortly after Didi’s blockbuster IPO in New York, the ride-hailing giant was asked to cease user registration and work on protecting user information critical to national security.
On Tuesday, Tencent stocks fell the most in a decade after it halted user signups on its WeChat messenger as it “upgrades” its security technology to align with relevant laws and regulations. The gaming and social media giant is just the latest in a growing list of companies hit by Beijing’s tightening grip on the internet sector, which had been flourishing for two decades under laissez-faire policies.
Underlying the clampdowns is Beijing’s growing unease with the service industry’s unscrutinized accumulation of wealth and power. China is unequivocally determined to advance its tech sector, but the types of tech that Beijing wants are not so much the video games that bring myopia to children and algorithms that get adults hooked to their screens. China makes it clear in its five-year plan, a series of social and economic initiatives, that it will go all-in on “hard tech” like semiconductors, renewable energy, agritech, biotech and industrial automation like factory robotics.
China has also vowed to fight inequality in education and wealth. In the authorities’ eyes, expensive, for-profit after-schools dotting big cities are hindering education attainment for children from poorer areas, which eventually exacerbates the wealth gap. The new regulatory measures have restricted the hours, content, profits and financing of private tutoring institutions, tanking stocks of the industry’s top companies. Again, there have been clear indications from President Xi Jinping’s writings to bring off-campus tutoring “back on the educational track.” All China-focused investors and analysts are now poring over Xi’s thoughts and directives.
Blue Origin’s protest to a U.S. governmental watchdog over NASA’s decision to award SpaceX a multi-billion dollar contract to develop a lunar lander was rejected.
The Government Accountability Office said Friday that it was denying both Blue Origin’s protest and a separate challenge filed by Dynetics, a defense contractor that also submitted a proposal for the contract. GAO concluded that NASA did not violate any laws or regulations when granting the sole award to SpaceX.
“As a result, GAO denied the protest arguments that NASA acted improperly in making a single award to SpaceX,” the agency said in a statement.
The formal protest was over NASA’s decision to award the contract for the Human Landing System Program, which aims to return humans to the moon for the first time since Apollo, solely to SpaceX — and not to two companies, as was originally intended. SpaceX’s proposal for the Human Landing System Program came in at $2.9 billion, around half of Blue Origin’s $5.99 billion proposal. Earlier this week, Bezos penned an open letter to NASA Administrator Bill Nelson offering to knock $2 billion off that price to solve the “near-term budgetary issues” that caused NASA to select just one company for the contract.
NASA’s decision to give just one company the award did veer from historical standard, but GAO maintained that “the [contract] announcement reserved the right to make multiple awards, a single award, or no award at all.”
Blue Origin maintains that it was not given time to revise its bid after NASA concluded it did not have sufficient funding for two awards. “Blue Origin was plainly prejudiced by the Agency’s failure to communicate this change in requirements,” the company said in the protest. “Blue Origin could have and would have taken several actions to revise its proposed approach, reduce its price to more closely align with funding available to the Agency, and/or propose schedule alternatives.”
Blue Origin and Dynetics submitted their separate protests in April.
Update: In response to the decision, a Blue Origin spokesperson told TechCrunch:
“We stand firm in our belief that there were fundamental issues with NASA’s decision, but the GAO wasn’t able to address them due to their limited jurisdiction. We’ll continue to advocate for two immediate providers as we believe it is the right solution.”
The spokesperson noted that the company was encouraged by lawmakers adding a provision to a bill in Senate that would require NASA to select two providers for the HLS program.
Elon Musk, meanwhile, had this to say about the decision…
— Elon Musk (@elonmusk) July 30, 2021
TechCrunch has reached out to Dynetics for comment. We will update the story if they respond.
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Let’s talk about what you’ll experience at Disrupt. Over on the Disrupt Stage you’ll find one-on-one interviews with icons and interactive, expert-led, presentations from across the tech, investing and policy sectors. Folks like Coinbase CEO Brian Armstrong, U.S. Secretary of Transportation Pete Buttigieg, Duolingo CEO Luis von Ahn and Mirror CEO Brynn Putnam. And that’s just the tip of the tech iceberg. You can check out all the speakers here.
You’ll find plenty of actionable advice and how-to tips and strategies on the Extra Crunch Stage. Take a gander at just two of the topics we have scheduled there and explore the full Disrupt agenda here.
Crafting a Pitch Deck that Can’t Be Ignored: Investors may be chasing after the hottest deals, but for founders selling their startup’s vision, it’s never been more important to communicate it in the clearest way possible. Pitch deck experts Mercedes Bent (partner, Lightspeed Venture Partners), Mar Hershenson (co-founder and managing partner, Pear VC) and Saba Karim (Techstars’ head of accelerator pipeline) dig into what’s essential, what’s unnecessary and what could just make all the difference in your next deck.
How Do You Select the Right Tech Stack: From day zero, startups have to make dozens of trade-offs when it comes to the infinite variety of tech stacks available to today’s engineers. Choose the wrong combination or direction, and a startup could be left with years of refactoring to fix the legacy damage. What are the best practices for assessing potential stacks, and how can you minimize the risk of a painful mistake? Preeti Somal (executive vice president of engineering, HashiCorp) and Jill Wetzler (head of engineering, Pilot) will discuss strategies for improving engineering right from the beginning and at every stage of a startup’s journey.
Disrupt’s virtual format provides plenty of opportunity for questions, so come prepared to ask the experts about the issues that keep you up at night.
One post can’t possibly contain all the events and opportunities of Disrupt. Don’t miss the epic Startup Battlefield competition, hundreds of early-stage startups exhibiting in the Startup Alley expo area, special breakout sessions — like the Pitch Deck Teardown — and so much more.
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Satellite connectivity company Swarm has come out with a new product that will give anyone the ability to create a messaging or Internet of Things (IoT) device, whether that be a hiker looking to stay connected off-the-grid or a hobbyist wanting to track the weather.
The Swarm Evaluation Kit is an all-in-one product that includes a Swarm Tile, the company’s flagship modem device, a VHF antenna, a small solar panel, a tripod, a Feather S2 development board and an OLED from Adafruit. The entire kit comes in at less than six pounds and costs $499. The package may sound intimidatingly technical, but Swarm CEO Sara Spangelo explained to TechCrunch that it was designed to be user-friendly, from the most novice consumer all the way through to more advanced users.
It “was super intentional to call it an Evaluation kit because it’s not a finished product,” Spangelo explained. “It serves two different kinds of groups. The first group is people that want to be able to do messaging anywhere that they are on the planet for a really low cost […] The second group of people will be the tinkerers and the hobbyists and educational folks.”
Swarm CEO and co-founder Sara Spangelo Image Credits: Swarm
This is the second consumer product that Swarm has on offer, after it went commercially live with its flagship Swarm Tile earlier this year. The Swarm Tile is a key component of the company’s ecosystem, which is comprised of a few different components: the Tile, a kind of modem that can be embedded in different things and what the customer interfaces with; the satellite network; and a ground station network, which is how the company downlinks data. The Tile is designed for maximum compatibility, so Swarm serves customers across sectors including shipping, logistics, and agriculture.
“One of the cool things about Swarm is that we’re infrastructure,” she said. “We’re like cellphone towers, so anyone can use us across any vertical.” Some of the use cases she highlighted included customers using Tile in soil moisture sensors, or in asset tracking in the trucking industry.
A major part of Swarm’s business model is its low cost, with a Swarm Tile costing $119 and the connectivity service available for only $5 per month per connected device. Spangelo credits not only the engineering innovations in the tiny devices and satellites, but the gains in launch economics, especially for small satellite developers like Swarm. The company also sells direct, which further reduces overhead.
Swarm was founded by Spangelo, a pilot and aerospace engineering PhD who spent time at NASA’s Jet Propulsion Lab and at Google on its drone delivery project, Wing. She told TechCrunch that Swarm started as a hobby project between her and co-founder Ben Longmier, who had previously founded a company called Aether Industries that made high-altitude balloon platforms.
“Then [we] realized that we could do communications at speeds that were similar to what the legacy players are doing today,” Sara Spangelo said. “There was a lot of buzz around connectivity,” she added, noting that initiatives like Project Loon were garnering a lot of funding. But instead of trying to match the size and scale of some of these multi-year projects, they decided to go small.
In the four and a half years since the company’s founding, Swarm has put up a network of 120 sandwich-sized satellites into low Earth orbit and grown its workforce to 32 people. They’ve also been busy onboarding customers that use the Tile. One hope is that the Kit will be an additional way to draw customers to Swarm’s service.
Spangelo said the kit is for “everybody in between, that likes to just play with things. And it’s not just playing – the playing leads to innovations and ideas, and then it gets deployed out into the world.”
Divorce is messy and stressful, made even messier and stressful when a couple is unable to go through the legal process because of the cost. Online divorce startup Hello Divorce is developing a platform to make this process more affordable and quicker.
To do this, the Oakland, California-based company announced Thursday a $2 million seed round led by CEAS, with additional funds coming from Lightbank, Northwestern Mutual Future Ventures, Gaingels and a group of individuals including Clio CEO Jack Newton, WRG’s Lisa Stone and Equity ESQ led by Ed Diab.
Statistics show there are an average of 750,000 divorces in the U.S. each year, and the average total cost of divorce can cost anywhere between $8,400 to $17,500 depending on what state you live in. Overall, some sources value the divorce industry at $50 billion annually.
Family law attorney Erin Levine founded the company in 2018 so that couples getting a divorce could access “affordable meaningful legal counsel” and resources beyond online forms. Levine told TechCrunch that the billable hours model for lawyers is “an antiquated process” for consumers that want an easier and clearer path to divorce.
“Right now, lawyers are the keeper of information, and clients keep paying until the divorce is done,” she said. “Divorce is more than forms. It is a challenging time, and most people need or want support. I saw a big hole there to use technology and fixed fees to put couples in the driver’s seat and take down that level of conflict.”
With this seed round, the company plans on rapidly scaling legal filing options across the U.S., improving its ground-breaking product, and giving consumers more of the content and services they need to feel informed and in control of their divorce process.
Hello Divorce provides software and accessible legal services starting at $99 for a do-it-yourself option or for up to an average of $2,000 for legal help along the way to finish the divorce process in a third of the time, and completely remote.
Levine said most people spend between two and five years contemplating divorce, and during that time are scared they will not be able to afford it, and if they have children, are afraid of losing them. Of those people, 80% won’t be able to access counsel.
Though the company is already profitable, Levine went after venture capital to be able to build an infrastructure and tap into the guidance that CEAS and other investors, like Lightbank’s Eric Ong bring to the table, saying “it is clear what I do know and what I don’t know.”
Ong said he met Levine through co-investors on the round, who told him Hello Divorce was something he would resonate with. Lightbank invests in category-stage companies, and he was drawn to what Levine and her team were doing.
“They are a combination of industry expertise and thinking outside of the box,” he said. “Eighty percent of people are still not getting meaningful representation, and we looked for technology that would provide a customer value proposition and we didn’t find one until Hello Divorce.”
The company plans to use the seed funding to scale legal filing options across the U.S., on product development and new content and services to educate people coming to Hello Divorce’s website.
The service is already available in four states — California, Colorado, Texas and Utah. Levine said the choice of initial states was strategic: She is familiar with California law, while Colorado has a complex system for divorce. Texas does not have a streamlined way for same-sex couples to get divorces, something Levine said she wanted to tackle, and Utah has a new regulatory scheme. Up next, she is expanding to New York and Florida, where she will launch in a bilingual format.
Since 2018, Hello Divorce has grown 100% year over year, with divorce success rates of 95% after starting the process on the platform. Over the past year, the company received 2,000 inquiries related to how to shelter in place with someone while contemplating divorce and co-parenting during lockdown.
“The inquiries increased about staying or going, and what divorce will look like,” Levine said. “It will be awhile before we see the total effects of what divorce looks like following the pandemic.”
One year after voice-based AI technology company ConverseNow raised a $3.3 million seed round, the company is back with a cash infusion of $15 million in Series A funding in a round led by Craft Ventures.
The Austin-based company’s AI voice ordering assistants George and Becky work inside quick-serve restaurants to take orders via phone, chat, drive-thru and self-service kiosks, freeing up staff to concentrate on food preparation and customer service.
Joining Craft in the Series A round were LiveOak Venture Partners, Tensility Venture Partners, Knoll Ventures, Bala Investments, 2048 Ventures, Bridge Investments, Moneta Ventures and angel investors Federico Castellucci and Ashish Gupta. This new investment brings ConverseNow’s total funding to $18.3 million, Vinay Shukla, co-founder and CEO of ConverseNow, told TechCrunch.
As part of the investment, Bryan Rosenblatt, partner at Craft Ventures, is joining the company’s board of directors, and said in a written statement that “post-pandemic, quick-service restaurants are primed for digital transformation, and we see a unique opportunity for ConverseNow to become a driving force in the space.”
At the time when ConverseNow raised its seed funding in 2020, it was piloting its technology in just a handful of stores. Today, it is live in over 750 stores and grew seven times in revenue and five times in headcount.
Restaurants were some of the hardest-hit industries during the pandemic, and as they reopen, Shukla said their two main problems will be labor and supply chain, and “that is where our technology intersects.”
The AI assistants are able to step in during peak times when workers are busy to help take orders so that customers are not waiting to place their orders, or calls get dropped or abandoned, something Shukla said happens often.
It can also drive more business. ConverseNow said it is shown to increase average orders by 23% and revenue by 20%, while adding up to 12 hours of extra deployable labor time per store per week.
Company co-founder Rahul Aggarwal said more people prefer to order remotely, which has led to an increase in volume. However, the more workers have to multitask, the less focus they have on any one job.
“If you step into restaurants with ConverseNow, you see them reimagined,” Aggarwal said. “You find workers focusing on the job they like to do, which is preparing food. It is also driving better work balance, while on the customer side, you don’t have to wait in the queue. Operators have more time to churn orders, and service time comes down.”
ConverseNow is one of the startups within the global restaurant management software market that is forecasted to reach $6.94 billion by 2025, according to Grand View Research. Over the past year, startups in the space attracted both investors and acquirers. For example, point-of-sale software company Lightspeed acquired Upserve in December for $430 million. Earlier this year, Sunday raised $24 million for its checkout technology.
The new funding will enable ConverseNow to continue developing its line-busting technology and invest in marketing, sales and product innovation. It will also be working on building a database from every conversation and onboarding new customers quicker, which involves inputting the initial menu.
By leveraging artificial intelligence, the company will be able to course-correct any inconsistencies, like background noise on a call, and better predict what a customer might be saying. It will also correct missing words and translate the order better. In the future, Shukla and Aggarwal also want the platform to be able to tell what is going on around the restaurant — what traffic is like, the weather and any menu promotions to drive upsell.
Rocket Lab is back in business launching rockets after an issue during its last launch in May caused a total loss of the payloads on board. The company was quick to investigate the issue and announced just over a week ago that it had completed that work, identified the problem and implemented corrective action to make sure it doesn’t happen again.
The launch today, which took off from the company’s Launch Complex 1 in New Zealand, was an important one to get right: It delivered a satellite for the U.S. Space Force to low Earth orbit. This is the second Space Force mission that Rocket Lab has provided launch services for.
On board the Electron launch vehicle for this mission was a demonstration satellite called Monolith, which is equipped with a new kind of deployable sensor that could, if it works as designed, pave the way for significantly smaller satellite buses in future spacecraft designs for things like weather and observation satellites.
This turnaround after a failed launch and loss of client payload is another benefit of Rocket Lab’s ability to quickly turn around rockets and missions. It’ll definitely be under increased scrutiny for a little while, however, considering that this latest mishap was the second anomaly to result in mission failure in just under a year.
Ford and its F-150 pickup, the automaker’s best-selling vehicle, have consistently inspired brand loyalty from pickup truck owners. According to the J.D. Power 2020 U.S. Automotive Brand Loyalty Study, Ford has a 54.3% loyalty rate. Now as the automaker moves to electrify its fleet, it seems to be bringing in fresh buyers.
Ford released Wednesday its second quarter earnings for 2021, which besides containing a surprise profit despite the ongoing chip shortage, revealed that its F-150 Lightning electric pickup has generated 120,000 preorders since its unveiling in May. Ford reported revenue of $26.8 billion, slightly below expectations, and net income of $561 million in the second quarter.
To be clear, these are not orders and don’t reflect exactly how many of these vehicles Ford will sell. Customers can reserve one of these EVs by placing a refundable $100 deposit.
However, it does provide some insight into demand.
Importantly, three-quarters of those new orders come from customers that are new to Ford, according to the earnings release. During the call on Wednesday, CEO Jim Farley also said two out of five Lightning preorders are going to trade in an ICE pickup.
Not only does this potentially affect Ford’s sales, it also validates the company’s recent forays into battery production. Automakers across the world are engaging in battery joint ventures with cell and chemistry companies, and Ford is no different. The company has a partnership with SK Innovation to manufacture battery cells on American soil and is creating a battery R&D center in Michigan, a part of its $30 billion investment into electrification.
Increased sales can also help with Ford’s expensive undertaking to invest in embedded electrical architecture upgrade that allows Ford to more easily update future EVs and enable new connected capabilities, according to Farley.
“So when we talk about upgrading our electric vehicles, it’s much more fundamental than just the investment in the tooling and the engineering of the electric vehicle and its components and propulsion,” said Farley during the call. “It also includes a completely new approach to an embedded software and hardware system.”
The F-150 Lightning comes with a lot of upgrades that make it attractive to Ford newcomers willing to pay more than the $40,000 base price. It’s got the same torque and power as its gas counterpart, plus a hands-free ADAS BlueCruise system, a comprehensive infotainment unit and enough battery capacity to power your whole house in the event of an outage.
Farley also said during the call that the new Ford Maverick, a compact hybrid pickup which starts at $20,000, already has around 80,000 orders. The hybrid is marketed toward people who aren’t exactly pickup truck people, but who maybe want to dip their toes into that utility pool.
“The demand for our first round of high-volume EVs clearly has exceeded our most optimistic projections,” said Farley. “We’re now working around the clock to break constraints and increase our manufacturing capacity for these red-hot new battery electric vehicles”
According to the earnings report, the combined U.S. customer-sold retail order bank for the electric Mustang Mach-E and other Ford vehicles was seven times larger than at the same point last year. With demand increasing, Farley said the business is “spring loaded” for a rebound when semiconductor supplies stabilize.
Space propulsion developer Accion Systems has closed its most significant funding round yet. The company raised $42 million in a Series C led by Tracker Capital, bringing its valuation to $83.5 million.
Along with the investment, Tracker Capital also acquired a majority stake in the company. This latest injection of capital will facilitate the development and manufacturing of the company’s fourth generation propulsion system, dubbed the tiled ionic liquid electrospray (TILE) system.
The TILE system uses electrical energy to push charge particles (ions) out its back to generate propulsion. While ion engines have been around for decades, Accion uses a liquid propellant, an ionic liquid salt, instead of gas. The liquid is inert and non-pressurized, meaning there’s no risk of explosion. It also results in a product that doesn’t need bulky components like ionization chambers, and an overall smaller and lighter weight system relative to the spacecraft – key considerations in space, where every gram of payload has a high price tag.
“It lets us build really, really small systems,” Accion co-founder Natalya Bailey explained to TechCrunch. “Instead of trying to take an existing ion engine the size of a Prius and shrink it down, we can start with very small systems because of this propellant.” And she does mean small – each thruster tile is about the size of a postage stamp.
The TILE system is also scalable and modular, meaning it could feasibly be used on anything from cubesats to propelling an interplanetary spacecraft, Accion CEO Peter Kant added in a recent interview with TechCrunch. “It’s one of the few occasions where the total addressable market and the actual addressable market that we can serve are pretty closely aligned and almost overlap,” he said.
The newest generation of the TILE system is the same size as its predecessors, but Accion is increasing the number of emitters on a given chip – emitters being the technology that actually shoots out the ions, generating the momentum – by almost tenfold. “We get more ions per area and that gives us a whole lot more thrust with the same amount of space,” Kant said.
Accion is looking to ship the first fourth-gen thruster systems in the middle to late summer of 2022.
The TILE system was developed by Accion co-founders Natalya Bailey and Louis Perna while the two were at the Massachusetts Institute of Technology. The tech generated a ton of interest from big aerospace companies, but they decided to found Accion in 2014 rather than sell. The company manufactures and assembles its product at its facility in Charlestown, Massachusetts.
The TILE system was onboard commercial spacecraft, one with Astra Digital and one with NanoAvionics, that went up on SpaceX’s Transporter-2 launch at the end of June. Accion started by focusing on serving smaller spacecraft first, like cubesats, but Bailey said that was just the beginning.
“We’re going after that segment initially, and then intending to reinvest our learnings in building larger and larger systems that eventually can do big geostationary satellites and interplanetary missions and so on. The systems that went up on the most recent launcher [is] probably good for a satellite up to about 50 kilograms [. . .] For us, it’s on the smaller end of where we intend to go.”
Jeff Bezos was so triumphant he was practically glowing at a press conference following the Blue Origin’s first crewed mission to space, 21 years after he founded the company in 2000. The billionaire talked about the future of the company and his role in it, and then casually gave away a couple hundred million dollars.
Bezos was one of four that rode in the RSS First Step capsule; the others were his financier brother, Mark; aviation legend and Mercury 13 veteran Wally Funk; and 18-year-old Oliver Daemen, the son of the second-highest bidder on the Blue Origin seat auction. (The $28 million dollar winner postponed his seat due to scheduling conflicts.)
The company now joins a very tiny circle of companies that have sent private citizens to space, in the biggest boost yet for the nascent space tourism industry. Tuesday also marks the 52nd anniversary of the Apollo 11 moon landing, the next step in space travel paying homage to the very first.
The press conference opened with the grinning foursome being pinned with astronaut ‘wings,’ a badge traditionally granted to those that have gone to space. “I’m so happy,” said Bezos at the press conference, donning the same cream cowboy hat he wore moments after emerging from the capsule a little over two hours earlier.
Bezos also thanked the city of Van Horn, acknowledging Blue Origin has made “a dent in it,” and followed by thanking every Amazon employee, plus its millions of customers: “Seriously, you paid for this.”
They also showed a brief video of the four crew members cavorting in four minutes of microgravity, including footage of the crew members catching floating Skittles in their mouths.
This is the second suborbital mission crewed entirely by private citizens this month alone, a first in history. The first was accomplished by Virgin Galactic’s VSS Unity, a rocket-powered spaceplane, on July 11; its founder, billionaire Richard Branson, was aboard, which helped foment a truly petty spat between the two ultra-wealthy founders. That aside, the two flights have helped make space tourism more of a reality than ever before.
The flight will also likely be a boost for Blue Origin’s commercial heavy-lift rocket launch arm, which for the moment is largely occupied by Elon Musk’s SpaceX. The same technologies that are used to perfect New Shepard’s reusability could come in handy for the development of New Glenn, the company’s massive orbital launch. Bezos said in February that the company was pushing the inaugural launch of New Glenn from late 2021 to the latter quarter of 2022.
“The fact of the matter is, the architecture and the technology we’ve chosen is complete over-kill” for space tourism, Bezos said. Instead, Blue Origin chose it “because it scales […] the whole point of this is to get practice” for larger and heavier missions.
On why Blue Origin chose liquid fuel, he reiterated that it’s practice for future launches. “Every time we fly this tourism mission, we practice flying the second stage of New Glenn.”
In December 2020, NASA added Blue Origin to its roster of space companies eligible to compete for contracts under its Launch Services II program. While it doesn’t guarantee that New Glenn or any other Blue Origin rocket would be awarded a launch contract, it’s the first step to getting there.
Jeff Bezos confirmed that Blue Origin will fly two additional crewed launches this year alone, but it has yet to announce the price per seat. “We want the cadence to be very high […] We’re approaching $100 million in private sales already.” When asked how to get the cost per seat down, Bezos said the space tourism industry would follow the trajectory of commercial space travel, now widely used by millions of travelers each year.
At the end of the conference, Bezos announced he was starting a $100 million Courage and Civility Award, with CNN contributor Van Jones and Michelin star chef José Andrés as the first two recipients. The winner will give that money away to the charities of their choice. The award is for people who apparently demonstrate civility and resist ad hominem attacks. Reading between the lines (frankly, you don’t even really have to do that) it seems like a commentary on contemporary political discourse, especially the emphasis on civility in disagreement.
Looking to the future, the Amazon founder said he would split his time between Blue Origin and the Bezos Earth Fund, a $10 billion investment fund focused on climate change.
“This is not about escaping Earth. The whole point is, this is the only good planet in the solar system,” Bezos said. “We have to take care of it.”
Rewatch the press conference here:
Blue Origin successfully completed its first crewed launch Tuesday, sending four human passengers to space – including the company’s founder, Jeff Bezos. The result of billions of dollars of investment, dozens of test launches and some petty squabbling amongst ultra-rich founders, the triumph of the New Shepard, along with that of Virgin Galactic earlier this month, undoubtably heralds the dawn of a new age of space tourism.
It was quite the media spectacle. The mission took place at Launch Site One, Blue Origin’s sprawling and secretive facility that sits around thirty miles north of the small town of Van Horn, Texas. Every hotel in Van Horn and nearby towns were sold out of rooms in the days leading to launch as spectators traveled in for the event; meanwhile, a huge gaggle of local, national and online outlets (including yours truly) swarmed the Press Site as early as 2:30 AM CST. Despite some premature calls for rain in the early hours of the morning, the skies stayed clear and things mostly kept to schedule.
The four-person crew – including Bezos, his brother, Mark, 18-year old student Oliver Daemon, and aviation pioneer and Mercury 13 veteran Wally Funk – emerged from the training center and caught a Rivian R1S electric SUV to the launch pad around 45 minutes prior to launch. (Bezos drove a Rivian R1T pickup to the landing site of the rocket after its last test, a nod to Amazon’s sizeable investment in the EV startup). The crew climbed the launch tower and took a brief respite in an adjacent shelter, before climbing into the capsule, dubbed RSS First Step.
There was a brief hold at T-15 minutes, leading to the launch running slightly behind schedule. New Shepard took at 8:11 CST. They passed the Kármán line (more on that later) at 8:15 AM; capsule separation followed, and the booster returned to the launch site autonomously and with a loud boom at 8:19 AM. The crewed capsule floated slowly to Earth via parachute, touching land at 8:22 AM for an eleven-minutes total flight time.
Image Credits: Blue Origin (opens in a new window)
The flight was the result of fifteen tests of the reusable suborbital New Shepard rocket, including a rehearsal launch in April that included a dry run of flight preparations and a mock crew embarked (then disembarked before take-off) into the capsule. Blue Origin now joins rival Virgin Galactic in a very, very small group of commercial space companies to send private citizens to orbit.
Daemon was added to the crew after the anonymous auction winner, who bid $28 million for the seat, had to bow out due to a scheduling conflict. CNBC reported that Daemon’s father, CEO of the Dutch private equity firm Somerset Capital Partners, placed the second-highest bid.
Bezos founded Blue Origin in 2000, six years after he started ecommerce behemoth Amazon. The company has zeroed in on space tourism, and it sees this flight as the requisite proof of concept it needs to start flying customers. To that end, the New Shepard capsule has large, tourism-friendly windows – the largest in spaceflight history, according to the company. “These windows make up a third of the capsule, immersing you in the vastness of space and life-changing views of our blue planet,” it says on the Blue Origin website.
The launch is also the culmination of weeks of squabbling between Bezos and his billionaire spacefaring rival, Richard Branson, who was aboard his own flight to space 10 days earlier. But despite ostensibly beating Bezos to the punch, much of the fighting was over what actually counts as space – and whether VSS Unity, Virgin Galactic’s rocket-powered spaceplane, actually went there.
The kerfuffle is over what’s known as the Kármán line, an internationally recognized imaginary boundary of space that’s around 60 miles above Earth. VSS Unity flew to around 51.4 miles – above the boundary recognized by NASA. “From the beginning, New Shepard was designed to fly above the Kármán line so none of our astronauts have an asterisk next to their name,” Blue Origin tweeted two days before the Virgin launch. The tweet also included a little infographic throwing further shade at on Virgin flights.
From the beginning, New Shepard was designed to fly above the Kármán line so none of our astronauts have an asterisk next to their name. For 96% of the world’s population, space begins 100 km up at the internationally recognized Kármán line. pic.twitter.com/QRoufBIrUJ
— Blue Origin (@blueorigin) July 9, 2021
This is just the beginning for Blue Origin. Director of astronaut sales Ariane Cornell said at a pre-mission briefing on July 18 that she’s been “chatting with many of [Blue Origin’s] future customers who have signed for the subsequent flights.” She added that the company intends on launching two more flights this year, with CEO Bob Smith estimating that a second crewed New Shepard flight could take place in September or October.
What does this mean for the rest of us (as in, those that don’t have a couple extra million floating around in our bank accounts)? While the so-called billionaire space race is a petty squabble, both Blue Origin and Virgin Galactic’s respective launches are the likely heralds of a new age of space travel for consumers and scientists alike. It will be limited to the wealthy at first, but as TechCrunch’s Alex Wilhelm argues, costs will go down and more humans will go to space – including scientists and researchers, maybe even me or you.
In case you missed it, you can catch the entire launch on Blue Origin’s archived livestream here:
Blue Origin is set to launch its fully reusable New Shepard spacecraft with humans on board for the first time on Tuesday, and it’s sending Amazon founder and billionaire Jeff Bezos up along with his brother and two record-setting astronauts. The launch live stream above is scheduled for 6:30 AM CDT (7:30 AM EDT/4:30 AM PDT), with the actual liftoff targeted for 8 AM CDT (9 AM EDT/6 AM PDT).
The full flight profile includes a takeoff from Blue Origin’s remote West Texas facility, followed by an ascent to a height of roughly 62 miles above the Earth’s surface. Those on board, including Bezos, his brother Mark, 82-year old Wally Funk and 18-year old Oliver Daemen will then experience between 3 and 4 minutes of weightlessness inside the New Shepard capsule, before it returns to Earth slowed by parachutes for a touchdown in the West Texas desert and then a recovery by Blue Origin staff.
This is not significantly different in terms of timing or sequence from the 15 prior New Shepard flights that Blue Origin has flown, but this is the first one with humans on board (including the world’s richest), so it’s obviously the one to watch.
The universe of Indian firms attempting to replicate Thrasio’s success in the world’s second largest internet market just got bigger. Three-month-old GlobalBees said on Monday it has raised $150 million in a Series A financing round led by FirstCry.
Lightspeed Venture Partners also invested in the new financing round, which is $75 million in equity and $75 million in debt. Even with a $75 million equity raise, Monday’s announcement makes GlobalBees’ round the largest Series A funding in India.
Founded by Nitin Agarwal, formerly of Edelweiss Financial, and Supam Maheshwari, a founder of FirstCry, GlobalBees acquires and partners with digitally native brands across categories such as beauty, personal care, home and kitchen, food and nutrition, and sports and lifestyle with a revenue rate of $1 million to $20 million.
New Delhi-based startup then helps these firms scale and sell to marketplaces (such as Amazon and Flipkart) and through other channels in India and outside the South Asian market, Agarwal told TechCrunch in an interview. He said GlobalBees has already acquired or partnered with over a dozen brands and they are selling both in India and outside of the country.
“At FirstCry, we created a lot of brands and realized that most of these brands reach a scale after which it becomes too difficult to scale them,” he said. “Supam and I have been talking about this for several years, trying to find ways to disrupt this market. We think there’s an opportunity to create a new house of brands that is digital native.”
Agarwal said GlobalBees will attempt to build a distribution and enterprise ecosystem in the online space similar to how traditional firms have established those connections in the offline world. (Not all brands GlobalBees engages with will get acquired on day one, Agarwal said. Typically, some brands get acquired in a span of three years or so, he said.)
“The time it takes for D2C brands to go from 0 – 100Cr (about $13 million) in revenue has more than halved over the past few years,” said Harsha Kumar, Partner at Lightspeed Venture, in a statement.
“We believe that this creates a unique opportunity to create a brand house much faster as well. With their past entrepreneurial stints together and their experience in building one of the largest ecommerce platforms in India, the duo of Supam and Nitin is the perfect team to go after this idea. Lightspeed is thrilled to be part of this journey!” said Kumar, who is joining the board of GlobalBees.
Scores of startups in India today are trying to replicate what is popularly known as the Thrasio-model. Mensa Brands, a similar venture by former fashion e-commerce Myntra chief executive, recently raised $50 million in equity and debt. 10club, another similar startup, recently raised $40 million — though much of it is in debt. TechCrunch reported last month that UpScale, another prominent player in this space, is in advanced talks with Germany’s Razor Group to raise capital.
Like Thrasio, several of these firms are trying to acquire brands that sell midrange to high-end products in categories where competition is limited. In fact, some of the categories that are common among these brands are so underappreciated that even Amazon and other e-commerce firms have not explored them through their private label ecosystems.
GlobalBees’ Agarwal agreed with this assessment, though he added that not all brands are operating in niche categories.
New York-headquartered Thrasio, which has raised over $1.3 billion in equity and debt since December last year, had acquired or otherwise consolidated about 6,000 third-party sellers on Amazon as of earlier this year.
“India is at the cusp of a D2C revolution with an estimated market size of $200 billion in the next 5 years. Indian brands have shown great promise in the recent years, and we believe that GlobalBees is building great assets to accelerate the growth of digitally native brands in the country,” said Vikas Agnihotri, Operating Partner, SoftBank Investment Advisers, in a statement.
Agnihotri, alongside Atul Gupta of Premji Invest, Sudhir Sethi of Chiratae Ventures and Kshitij Sheth of Chrys Capital are also joining GlobalBees’ board.
Netskope, focused on Secure Access Service Edge architecture, announced Friday a $300 million investment round on a post-money valuation of $7.5 billion.
The oversubscribed insider investment was led by ICONIQ Growth, which was joined by other existing investors, including Lightspeed Venture Partners, Accel, Sequoia Capital Global Equities, Base Partners, Sapphire Ventures and Geodesic Capital.
Netskope co-founder and CEO Sanjay Beri told TechCrunch that since its founding in 2012, the company’s mission has been to guide companies through their digital transformation by finding what is most valuable to them — sensitive data — and protecting it.
“What we had before in the market didn’t work for that world,” he said. “The theory is that digital transformation is inevitable, so our vision is to transform that market so people could do that, and that is what we are building nearly a decade later.”
With this new round, Netskope continues to rack up large rounds: it raised $340 million last February, which gave it a valuation of nearly $3 billion. Prior to that, it was a $168.7 million round at the end of 2018.
Similar to other rounds, the company was not actively seeking new capital, but that it was “an inside round with people who know everything about us,” Beri said.
“The reality is we could have raised $1 billion, but we don’t need more capital,” he added. “However, having a continued strong balance sheet isn’t a bad thing. We are fortunate to be in that situation, and our destination is to be the most impactful cybersecurity company in the world.
Beri said the company just completed a “three-year journey building the largest cloud network that is 15 milliseconds from anyone in the world,” and intends to invest the new funds into continued R&D, expanding its platform and Netskope’s go-to-market strategy to meet demand for a market it estimated would be valued at $30 billion by 2024, he said.
Even pre-pandemic the company had strong hypergrowth over the past year, surpassing the market average annual growth of 50%, he added.
Today’s investment brings the total raised by Santa Clara-based Netskope to just over $1 billion, according to Crunchbase data.
With the company racking up that kind of capital, the next natural step would be to become a public company. Beri admits that Netskope could be public now, though it doesn’t have to do it for the traditional reasons of raising capital or marketing.
“Going public is one day on our path, but you probably won’t see us raise another private round,” Beri said.
Z1, a Sao Paulo-based digital bank aimed at Latin American GenZers, has raised $2.5 million in a round led by U.S.-based Homebrew.
A number of other investors also participated in the financing including Clocktower Ventures, Mantis – the VC firm owned by The Chainsmokers, Goodwater, Gaingels, Soma Capital and Rebel Fund. Notably, Mantis has also backed Step, a teen-focused fintech based in the U.S., and Goodwater has also invested in Greenlight, which too has a similar offering as Z1.
Z1 participated in Y Combinator’s Winter ‘21 batch earlier this year, and at the time got $125,000 in funding from the accelerator. Maya Capital led its $700,000 seed round in March of 2020.
Put simply, Z1 is a digital bank app built for teenagers and young adults. The company was founded on the notion that by using its app and linked prepaid card, Brazilian and Latin American teenagers can become more financially independent.
João Pedro Thompson and Thiago Achatz started the company in late 2019 and soon after, Mateus Craveiro and Sophie Secaf joined as co-founders. In its early days, Z1 is focused on Brazil but the startup has plans to expand into other countries in Latin America over time.
“Z1 is what we’re building to be the go to bank of the next generation, and not just be a digital bank for teens,” Achatz told TechCrunch. “We want to grow with him and one day, be the biggest bank in Brazil and LatAm.”
“We’re acquiring users really early and creating brand loyalty with the intention of being their bank for life,” he said. “We will still meet their needs as they grow into adulthood.”
Image Credits: Z1
While Z1’s offering is not completely unlike that of Greenlight here in the U.S. the founders agree that its products have been adapted more to the Brazil-specific cultural and market situation.
For example, points out Thompson, most teenagers in Brazil use cash because they don’t have access to other financial services, whether they be traditional or digital.
“We offer an account where they can deposit money, cash out money via an instant payment system in Brazil or spend through a prepaid credit card,” he said. “Most sites don’t accept debit cards so this is a big step compared to what teens already have.”
Part of the company’s use for the capital is to make its product more robust so they can do things like save money for big purchases such as an iPhone and earn interest on their accounts.
Another big difference between Brazil and the U.S., the company believes, is that many parents in general in Latin America haven’t had a true financial education that they can pass down to their kids.
“We’re not top down like Greenlight,” Achatz said. “That approach doesn’t make sense in Latin America. Here, many are independent from an early age and already work whether it’s through a microbusiness, a side job or selling things on Instagram. They’re much more self-taught and the income they earn is often outside of their parents.”
Z1 has grown 30% per week and 200% per month since launch, spending “very little” on marketing and relying mostly on word-of-mouth. For example, the company is following the lead of its U.S. counterparts and turning to TikTok to spread the word about its offering.
“Step has around 200,000 followers on TikTok, and we have a little under half of that,” the company says. “We’re well-positioned in terms of branding.”
For lead investor Homebrew, the opportunity to educate and provide financial services to Gen Z in Latin America is even more exciting than the opportunity in the US., notes partner Satya Patel.
Over one third of LatAm Gen Z’ers have a “side hustle,” generating their own income independent from their parents, he said.
“While millennials grew up during an economic boom, Gen Z grew up during recessions – 3 in Brazil over the last decade – and wants to become financially independent as soon as possible. They’re becoming economically educated and active much earlier than previous generations,” Patel added.
He also believes the desire to transact online, for gaming and entertainment in particular, creates a groundswell of GenZ demand in Brazil for credit card and digital payments products.
As most Indian edtech startups work on broadening their catalog with live and recorded courses for students, some are beginning to take a different approach to tackle the South Asian nation’s large education market.
Teachmint, a one-year-old startup, is betting on empowering teachers to create their own virtual classrooms with a few taps on their smartphone.
The startup, which started its journey during the pandemic, has developed what it calls a mobile-first, video-first tech infrastructure to help teachers take online classes, engage with students virtually, assign them tasks, conduct attendance and also collect fees.
Teachmint’s offering has already amassed over 1 million teachers from over 5,000 Indian cities and the usage is growing over 100% each month, said Mihir Gupta, co-founder and chief executive of Teachmint, in an interview with TechCrunch.
Last month, students consumed over 25 million live classes on Teachmint, he said. Naturally investors are paying attention, too.
On Thursday, the startup said it has raised $20 million in a new investment led by Learn Capital and with participation from CM Ventures. The new investment, dubbed Pre-Series B, comes in less than two months after the startup closed its $16.5 million Series A funding.
Other than taking a different approach to tackle the education space in India, where over 250 million students go to schools, another key thing that differentiates Teachmint is its in-house prowess with tech infrastructure.
Most startups today rely on scores of technology vendors for streaming their videos, cloud storage and processing tasks, and collecting fees. “Zoom and Google Meet are great services for talking to people. But they are not fundamentally designed to solve the needs of teachers and students,” said Gupta.
By not relying on other tech providers, Teachmint, which counts Lightspeed India Partners and Better Capital among its investors, has also been able to optimize its offerings more aggressively, said Gupta.
Through its proprietary approach, Teachmint said it is able to significantly control and improve the interactiveness in these classrooms. Having in-house technology offering also helps the startup spend only a fraction on each class, he said.
“We have created a new category altogether. Any teacher can download the Teachmint app and create their first classroom within minutes. This ease of digitization of classroom didn’t exist before Teachmint,” he said, adding that more than 75% teachers on the platform use their smartphones to conduct classes.
Teachers on Teachmint can also create public links of their classrooms and share it on Facebook and other platforms to create additional distribution channels.
Students also don’t need to jot down the entire session. Teachmint delivers the notes that teachers go through during their classes in real-time with students. This way, “teachers also don’t have to recreate their notes,” he said.
The app, which supports 10 Indian languages (in addition to English), is just 14 megabytes in size and consistently ranks at — or among — the top education apps in Play Store in India.
On Thursday, the startup also announced a new product to serve schools and colleges. The product, called Teachmint for Institute, offers educational institutes a platform to conduct and monitor all their online classes and institute activities.
The expansion to this new category came after Teachmint, which consults with many teachers for building products and new features, learned that schools were struggling to collect fees from students amid the pandemic since these institutions were not able to continue their offerings in a structured way, said Gupta. And the pandemic, which last year prompted New Delhi to close schools, also made it less transparent for institutes to have visibility into how their classes were being conducted.
“In just 12 months, Teachmint has blossomed from a nascent idea to the #1 ranked education app in India – an unprecedented growth narrative for an Indian edtech company,” said Vinit Sukhija, Partner at Learn Capital, in a statement.
“This market resonance is a testament to the Teachmint team’s ongoing commitment to authentically incorporating teachers’ perspectives into the company’s ever-expanding suite of market-pioneering digital teaching tools. Having inaugurated its partnership with Teachmint just several months ago, Learn Capital is thrilled to now augment its partnership at this critical juncture in the company’s trajectory as it plans for exciting new product launches and international expansion.”
The startup will deploy the fresh funds to continue to expand its product offerings and hire talent, said Gupta. But more interestingly, he said, Teachmint is ready to expand outside of India and serve teachers in international markets.
With a flip of a switch, Gupta said he will make the offering available globally. “We don’t create content, so product is geography agnostic,” he said.
The U.S. Federal Aviation Administration (FAA) has given Virgin Galactic the green light to begin transporting commercial passengers to space aboard its VSS spacecraft. This is an expansion of the company’s existing license, which had granted it permission to fly professional test pilots and astronauts to space using its spaceplane. The updated license comes on the heels of Virgin Galactic’s successful test flight on May 22.
This means that the way is cleared for Virgin Galactic to being operating as the first official ‘spaceline’ — which is like an airline, but for space. The company aims to provide regular service for space tourists and researchers to suborbital space, with an experience that includes unparalleled views of Earth and a few minutes of weightless during the roughly 2 hour trip.
The FAA’s approval is a big step, but it’s not the final one before Virgin Galactic begins its actual regular service flights for paying customers: The company still needs to complete three remaining test flights before that happens. These will be the first flights of the Virgin spacecraft and its carrier plane while carrying a full crew, and at the goal is still to fly the first of those sometime “this summer,” according to CEO Michael Colglazier.
A report from earlier this month claims that Virgin Galactic backer Sir Richard Branson could fly on the next test flight, and that it might occur as early as the coming July 4 weekend, which would mean he makes it to space faster than his billionaire rocket riding rival Jeff Bezos, who is set to make a trip on his own Blue Origin New Shepard spaceship on July 20. Virgin Galactic hasn’t said officially when its next test flight would occur, however.
Indian online learning platform Unacademy is in advanced talks to acquire Rheo TV, a less than two-year-old startup founded by two former Unacademy employees, according to three sources familiar with the matter.
The current deal values Rheo TV, a startup that has built a platform to help professional game streamers live stream their gameplays and monetize those feeds, at over $10 million, one of the sources said. The deal proposes Rheo TV’s team of fewer than a dozen people to join Unacademy.
The younger startup counts Lightspeed India Partners, Sequoia Capital India’s Surge, as well as the founding team of Unacademy — Gaurav Munjal, Hemesh Singh, and Roman Saini — among its existing investors.
Munjal and Sequoia Capital India declined to comment. A founder of Rheo TV didn’t immediately respond.
As tens of millions of college students come online and play games, the startup is betting that many of them, provided platforms are able to help them make a living, will consider streaming their gameplays as a viable career option.
Streamers on Rheo TV, which offers several features similar to those of Twitch, are currently rewarded based on their gameplays, followerbase, and past performance in different tournaments.
If the deal materializes, it would be the latest acquisition by Unacademy, the Bangalore-based startup that has amassed over 5 million monthly active users in over 10,000 cities in India.
In the past two years, the Facebook, Tiger Global, and SoftBank-backed startup has acquired WiFi Study, PrepLadder, Coursavy, and led a strategic investment in Mastree.
The startup, which also operates creator platform Graphy, this week unveiled a fund worth over $13 million to help applicants kickstart their online school.
India’s online education market is estimated to grow to $19.7 billion by 2030, up from $1 billion last year, analysts at Bernstein wrote in a recent report.
Business operation automation startup Tonkean announced this morning that it closed a $50 million Series B round of capital. Accel led the round, which came just over a year after the startup raised a $24 million Series A. Lightspeed Ventures, which led the company’s preceding venture capital round, also participated in its new funding event.
Sagi Eliyahu, Tonkean’s co-founder and CEO, told TechCrunch in an interview that his company’s valuation rose by around 4x in its latest funding round.
The startup was able to secure more capital at a higher price thanks in part to quick growth in 2020, which Eliyahu said was concentrated in the second half of 2020.
Tonkean is an interesting mix of business process automation, no-code and humans. In short, the startup allows a company’s ops groups — sales ops, marketing ops, etc. — to set up automated business logic across applications that can include human-in-the-loop elements. And Tonkean built its system to be IT-friendly, allowing it to support enterprise-scale customers.
The automation space has been broadly hot in recent quarters. Robotic process automation (RPA) is great for mechanizing repetitive tasks that waste human time. The method of using computers to do stuff that humans previously had to do by clicking far too much has proven to be big business.
Tonkean allows for something a bit different. An example may help: During our interview, Eliyahu mused about what might happen if a salesperson for a Tonkean client wanted to send a lead into a nurture campaign. Tonkean would let the sales ops team set up logic so that when the frontline salesperson selects the lead for a nurture effort inside their CRM, the lead would then automatically be added to a specific Marketo campaign. Furthermore, the click-to-nurture system would alert a human on the sales team, perhaps asking for approval of the decision.
Tonkean software employs no-code tools to let ops groups use off-the-shelf command modules to build business logic — or craft their own as needed. The use of the company’s software could allow for more empowered teams at companies that are less reliant on engineering groups for help in accelerating and automating their work.
That thematically fits inside the general narrative we’ve seen from no-code startups in general: They want to allow non-technical folks to have more control of their work through less reliance on technical teams at their place of employment.
Tonkean employs around 60 people today, up from around 15 folks at the time of its Series A. It plans to hire rapidly now that it has more capital. Eliyahu claims most of its Series A is still in the bank. So why did it raise?
Because Eliyahu considers his startup’s market to be so large that he wants to pull the company’s future closer to today; the new capital will give Tonkean the space it needs to hire more rapidly and build more quickly than it might have if it continued to operate from a smaller capital case.
Fifty million dollars is a lot of money. Let’s see how far it gets Tonkean. The next time we talk to the company, we’ll demand some harder growth metrics so we can see if the additional capital was the accelerant that the company hopes it will be.