Today’s children and teens want more power and control over their spending.
And while there are a number of financial services and apps out there aimed at helping this demographic save and invest money (Greenlight being among the most popular and well-known), one startup is coming at the space from another angle: helping younger people also better manage their spend.
Till Financial describes itself as a collaborative family financial tool that aims to empower kids to become smarter spenders. The New York-based company’s banking platform is designed to encourage “open and honest” discussions between parents and their kids. And it has just raised $5 million to help it advance on that goal.
A slew of investors put money in the round, including Elysian Park Ventures, Melinda Gates’ venture fund Pivotal Ventures with Magnify Ventures, Afore Capital, Luge Capital, Alpine Meridian Ventures, The Gramercy Fund, SM Ventures (the family office of the founders/CEOs of Stadium Goods) and Lightspeed Venture Partners’ Scout Fund. Also participating were angel investors such as the founders of fintech Petal, the founders of alcohol marketplace Drizly, the president of Transactis, and the president of 1800Flowers.
Part of Till’s goal is to help kids “learn by doing” and gain confidence in spending decisions. It arms them with a bank account, digital and physical debit card and goal-based savings. For example, say a teen wants to buy an iPad, they can set up an account that they can save toward that iPad and give family members (such as grandparents, for example) the opportunity to pitch in the same amount, or more. They can also set up recurring payments for things like Netflix or Spotify subscriptions so they can get a taste of what it’s like to pay regular bills.
“Parents and the current banking options miss the point when they just focus on savings. We need to first prepare kids to be Smarter Spenders, supported by savings and investing,” said Taylor Burton, who founded the company with Tom Pincince. “On Till, kids learn to spend with intention and purpose, while parents gain confidence and trust based on transparency and accountability.”
To Pincince, the market is clearly underserved.
“The legacy banks really don’t care about this young person and the early digital players are really missing the mark,” he said.
And despite the plethora of apps targeting the demographic, Pincince believes there’s plenty of room for the right players.
“The reality is you’re talking about a swath of kids under the age of 18 and over the age of eight that is the single largest unbanked population,” he said. “We’re not fighting to be the top of your son’s wallet. We’re fighting to be the first product into that wallet.”
Indeed, it’s a big market — the average middle-class family in the U.S. spends $284,570 per child by the time they turn 18.
The platform is free to all families and, early on, attracted the attention of Peggy Mangot, operating partner/COO of PayPal Ventures. She invested personally in Till in its pre-seed rounds. Prior to PayPal, Mangot ran development of Greenhouse, Well Fargo’s fee-free mobile banking app that aimed to help younger users build responsible spending habits.
Mangot has three kids and recalls that when they were shopping online, she’d give them her credit card. Or, if they were going to the corner store or meeting with friends, she’d give them cash.
“But that way, the money is meaningless to them. They didn’t really know how to understand what things cost and there was no sense of ownership,” she said. “It was just me handing over cash or a card.”
What attracted her the most about Till, Mangot said, was the team’s approach to treat younger people “with respect and agency.”
She also believes that by helping children and teens understand important financial lessons at a younger age, the world will ultimately be full of more responsible adults.
“By putting these tools in the hands of these young people early, they’ll have years and years of experience before they’re more independent and have to manage their paycheck and bills,” Mangot told TechCrunch. “Once you have mass adoption, it’s going to create a much more financially literate, confident and in control set of young adults than we’ve ever had.”
Besides making money on interchange fees, Till aims to earn revenue by partnering with merchants to offer rewards to users. It also plans to earn referral fees by referring the teens to other financial institutions when they get older and have different needs.
“It’s not our intention to be your son or daughter’s forever bank. It’s our intention to be the first bank,” Pincince said. “So, they hit the age of maturity, we’re actually giving them a high-five off of our platform and introducing them to maybe their first college loan or their first credit card.”
Just shy of a year ago, I sent an email to our global fund manager partners and to our direct portfolio CEOs titled “Only the decisive survive.” At that time, not many outside of China were concerned about COVID-19. However, I was obsessed.
Hearing stories from fund manager friends with operations in China, I knew things were worse than what the Chinese press were telling the world. And I live only five miles south of the location of the first COVID death in the U.S. The pandemic was accelerating exponentially, and I wanted to get all of our partners to open their eyes to the risks and prepare as well as they could.
I’m not writing with that level of intensity or urgency this time, but I am concerned. We all need to be taking precautionary measures, not just in light of COVID, but to ensure our firms can continue to thrive when faced with unexpected tragedy.
We all need to be taking precautionary measures, not just in light of COVID, but to ensure our firms can continue to thrive when faced with unexpected tragedy.
My partner Susana invested in 90 funds over 20 years — she’s seen everything from motorcycle accidents to depression take out fund managers and CEOs. Life works that way sometimes, and it’s not always someone else. It’s the “What happens if I get hit by a bus scenario?” In this case, the bus happens to be a global pandemic.
One of our funds in Asia recently reported COVID cases in three CEOs among their 23 companies. While developed market infections and deaths are trending down, many countries are seeing serious new outbreaks, and some, like Brazil, are doing badly.
Pandemic forecasting site IHME predicts a growing caseload across sub-Saharan Africa and East Asia and Pacific regions. The LAC region is trending down overall, but some countries, including Colombia, are expected to experience a second (or third) wave of infections.
As the Economist said in mid-February, “Coronavirus is not done with humanity yet.”
A month or so ago, we were trying to move forward with an investment in a fund in Africa with whom we had been speaking and doing due diligence for a few months. They went radio silent for over two weeks. We didn’t know whether to be miffed, concerned for their health, or what.
Level, a startup that aims to give companies a more flexible way to offer benefits to employees, has raised $27 million in a Series A funding round led by Khosla Ventures and Lightspeed Venture Partners.
Operator Collective and leading angels also participated in the financing, along with previous backers First Round Capital and Homebrew. The round was raised at a “nine-figure” valuation, according to founder and CEO Paul Aaron, who declined to be more specific.
Founded in 2018, New York City-based Level says it’s “rebuilding insurance from the ground up” via flexible networks and real-time claims with the goal of helping employers and employees get the most out of their benefit dollars.
Employers can customize plans to do things like offer 100% coverage across treatments. The company also touts the ability to process claims in four hours.
“That’s lightning fast when compared to 30- to 60-day claims often processed by traditional payers,” said Aaron, who as one of the first employees at Square, led the network team at Oscar Health and is an inventor of several patents in the payments space.
Level first launched employer-sponsored dental benefits in the summer of 2019 and started serving its first beta customers that fall. It also now offers vision plans. The company has more than 10,000 members from companies such as Intercom, Udemy, KeepTruckin and Thistle that have paid for care via its platform.
“Insurance is confusing and often feels unfair. Networks restrict where you can go, billing takes weeks and you always seem to owe more than you expect,” Aaron said. “We believe paying with insurance should be as easy as any other purchase.”
Level says it is taking a full-stack approach and building end-to-end tools, from automated underwriting to real-time benefit analytics.
It plans to launch a new insurance product aimed at “helping smaller businesses offer bigger benefits” that typically only enterprises have the ability to offer. The company also aims to help employers get money back for any unused benefits after paying a fixed amount each month. Ultimately, the goal is to be able to offer a full suite of products that will allow companies of all sizes — from two employees to 20,000 — provide better benefits for their teams.
Level claims that its self-insured dental and vision products let companies offer more coverage to their teams while often cutting nearly 20% from their benefits budget.
“Employers already spend so much money on benefits, and neither they nor their teams get enough out of it,” said Jana Messerschmidt from Lightspeed Venture Partners, in a written statement. “Businesses of all sizes need to compete for talent with innovative benefits that help people get more from their paychecks. Level offers a far superior employee experience, and you’re getting bang for your buck.”
Meanwhile, Khosla’s Samir Kaul said he believes Level can do for insurance and benefits “what Square Cash did for person-to-person payments.”
The race among mobility startups to become profitable by controlling market share has produced a string of bad results for cities and the people living in the them.
City officials and agencies learned from those early deployments of ride-hailing and shared scooter services and have since pushed back with new rules and tighter control over which companies can operate. This correction has prompted established companies to change how they do business and fueled a new crop of startups, all promising a different approach.
But can mobility be accessible, equitable and profitable? And how?
TC Sessions: Mobility 2021, a virtual event scheduled for June 9, aims to dig into those questions. Luckily, we have three guests who are at the center of cities, equity and shared mobility: community organizer, transportation consultant and lawyer Tamika L. Butler, Remix co-founder and CEO Tiffany Chu and Revel co-founder and CEO Frank Reig.
Butler, a lawyer and founder and principal of her own consulting company, is well known for work in diversity and inclusion, equity, the built environment, community organizing and leading nonprofits. She was most recently the director of planning in California and the director of equity and inclusion at Toole Design. She previously served as the executive director of the Los Angeles Neighborhood Land Trust and was the executive director of the Los Angeles County Bicycle Coalition. Butler also sits on the board of Lacuna Technologies.
Chu is the CEO and co-founder of Remix, a startup that developed mapping software used by cities for transportation planning and street design. Remix was recently acquired by Via for $100 million and will continue to operate as a subsidiary of the company. Remix, which was backed by Sequoia Capital, Energy Impact Partners, Y Combinator, and Elemental Excelerator has been recognized as both a 2020 World Economic Forum Tech Pioneer and BloombergNEF Pioneer for its work in empowering cities to make transportation decisions with sustainability and equity at the forefront. Chu currently serves as Commissioner of the San Francisco Department of the Environment, and sits on the city’s Congestion Pricing Policy Advisory Committee. Previously, Tiffany was a Fellow at Code for America, the first UX hire at Zipcar and is an alum of Y Combinator. Tiffany has a background in architecture and urban planning from MIT.
Reig is the co-founder and CEO of Revel, a transportation company that got its start launching a shared electric moped service in Brooklyn. The company, which launched in 2018, has since expanded its moped service to Queens, Manhattan, the Bronx, Washington, D.C., Miami, Oakland, Berkeley, and San Francisco. The company has since expanded its focus beyond moped and has started to build fast-charging EV Superhubs across New York City and launched an eBike subscription service in four NYC boroughs. Prior to Revel, Reig held senior roles in the energy and corporate sustainability sectors.
The trio will join other speakers TechCrunch has announced, a list that so far includes Joby Aviation founder and CEO JonBen Bevirt, investor and Linked founder Reid Hoffman, whose special purpose acquisition company just merged with Joby, as well as investors Clara Brenner of Urban Innovation Fund, Quin Garcia of Autotech Ventures and Rachel Holt of Construct Capital and Starship Technologies co-founder and CEO/CTO Ahti Heinla. Stay tuned for more announcements in the weeks leading up to the event.
While the money flowing into Silicon Valley is reaching historic heights, the competition for getting customer attention and growing businesses is still a major challenge.
At TechCrunch Early Stage: Marketing & Fundraising, we’re diving into the topic of growth and scaling and bringing in experts across the startup landscape to share what they’ve learned in the pilot’s seat. We’re thrilled that Greylock General Partner Mike Duboe will be joining us in July to discuss what’s hot and what’s next for growth in consumer and B2B technology.
Before joining Greylock and being promoted to his current role as a GP, Duboe led growth at Stitch Fix as the company built out its online styling empire. Previous to that, Duboe was the first growth hire at Tilt and has had stints on YC’s growth advisory council and as a growth lecturer at Reforge.
Duboe’s interests as an investor have centered on commerce infrastructure, marketplaces, creator tools and more, with investments in no-code visual editor Builder, SMS marketing platform Postscript and online wholesale marketplace Vori. We’ll chat with Mike about where he advises founders to focus their efforts and how to make the most of budgets across channels.
Tickets for TC Early Stage: Marketing & Fundraising are available at the early bird rate which gives you an instant $100 savings if you book before May 1!
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.
Pearpop, the marketplace for social collaborations between the teeming hordes of musicians, craftspeople, chefs, clowns, diarists, dancers, artists, actors, acrobats, aspiring celebrities and actual celebrities, has raised $16 million in funding that includes what seems like half of Hollywood, along with Alexis Ohanian’s Seven Seven Six venture firm and Bessemer Venture Partners.
The funding was actually split between a $6 million seed funding round co-led by Ashton Kutcher and Guy Oseary’s Sound Ventures and Slow Ventures, with participation from Atelier Ventures and Chapter One Ventures and a $10 million additional investment led by Ohanian’s Seven Seven Six with participation from Bessemer.
TechCrunch first covered pearpop last year and there’s no denying that the startup is on to something. It basically takes Cameo’s celebrity marketplace for private shout-outs and makes it public. Allowing social media personalities to boost their followers by paying more popular personalities to shout out, duet, or comment on their posts.
“I’ve invested in pearpop because it’s been on my mind for a while that the creator economy has resulted in a lot of not equitable outcomes for creators. Where i talked about the missing middle class of the creator economy,” said Li Jin, the founder of Atelier Ventures and author of a critical piece on creator economics, “The creator economy needs a middle class“.
“When I saw pearpop I felt like there was a really big potential for pearpop to be the one of the creators of the creative middle class. They’ve introduced this mechanism by which larger creators can help smaller creators and everyone has something of value to offer something to everyone else in the ecosystem.”
Jin discovered pearpop through the TechCrunch piece, she said. “You wrote that article and then i reached out to the team,” said Jin.
The idea was so appealing, it brought in a slew of musicians, athletes, actors and entertainers, including: Abel Makkonen (The Weeknd), Amy Schumer, The Chainsmokers, Diddy, Gary Vaynerchuk, Griffin Johnson, Josh Richards, Kevin Durant (Thirty 5 Ventures), Kevin Hart (HartBeat Ventures), Mark Cuban, Marshmello, Moe Shalizi, Michael Gruen (Animal Capital), MrBeast (Night Media Ventures), Rich Miner (Android co-founder) and Snoop Dogg.
“Pearpop has the potential to benefit all social media platforms by delivering new users and engagement, while simultaneously leveling the playing field of opportunity for creators,” said Alexis Ohanian, Founder, Seven Seven Six, in a statement. “The company has created a revolutionary new marketplace model that is set to completely reimagine how we think of social media monetization. As both a social media founder and an investor, I’m excited for what’s to come with pearpop.”
Already Heidi Klum, Loren Gray, Snoop Dogg, and Tony Hawk have gotten paid to appear in social media posts from aspiring auteurs on the social media platform TikTok.
Using the platform is relatively simple. A social media user (for now, that means just TikTok) sends a post that exists on their social feed and requests that another social media user interacts with it in some way — either commenting, posting a video in response, or adding a sound. If the request seems okay, or “on brand”, then the person who accepts the request performs the prescribed action.
Pearpop takes a 25% cut of all transactions with the social media user who’s performing the task getting the other 75%.
The company wouldn’t comment on revenue numbers, except to say that it’s on track to bring in seven figures this year.
Users on the platform set their prices and determine which kinds of services they’re willing to provide to boost the social media posts of their contractors.
Prices range anywhere from $5 to $10,000 depending on the size of a user’s following and the type of request that’s being made. Right now, the most requested personality on the marketplace is the TikTok star, Anna Banana.
These kinds of transactions do have impacts. The company said that personalities on the platform were able to increase their follower count with the service. For instance, Leah Svoboda went from 20K to 141K followers, after a pearpop duet with Anna Shumate.
If this all makes you feel like you’ve tripped and fallen through a Black Mirror into a dystopian hellscape where everything and every interaction is a commodity to be mined for money, well… that’s life.
“What I appreciate most about pearpop is the control it gives me as a creator,” said Anna Shumate, TikTok influencer @annabananaxdddd. “The platform allows me to post what I want and when I want. My followers still love my content because it’s authentic and true to me, which is what sets pearpop apart from all of the other opportunities on social media.”
Talent agencies, too, see the draw. Early adopters include Talent X, Get Engaged, and Next Step Talent and The Fuel Injector, which has added its entire roster of talent to pearpop, which includes Kody Antle, Brooke Monk and Harry Raftus, the company said.
“The initial concept came out of an obvious gap within the space: no marketplace existed for creators of all sizes to monetize through simple, authentic collaborations that are mutually beneficial,” said Cole Mason, co-founder & CEO, pearpop. “It soon became clear that this was a product that people had been waiting for, as thousands of people rely on our platform today to gain full control of their social capital for the first time starting with TikTok.”
Saikat Dey, the founder of Detroit’s own Guardhat Technologies, got his start working in the steel industry. His last job, before founding Guardhat, was serving as the chief executive officer of Severstal International, the multinational steel conglomerate whose headquarters were in Dearborn, Mich.
There, managing the global business of the fourth largest steelmaker by volume and revenue, with 3,600 employees in Mississippi, Michigan, and the coal mines of West Virginia, Dey became obsessed with safety, he said.
Beyond tracking cash flow and EBITDA, the typical numbers companies use, Dey said that worker safety was another measurement that effected compensation. “One of the key metrics is how well and how safe we keep our frontline workers,” Dey said.
Dey’s concerns over safety at his plants is what led him to reach out to union leadership and begin developing the technology that would form the core of Guardhat’s offerings.
The company pitches a multi-product intelligent safety system that integrates wearable technology and proprietary software to detect, alert, and prevent hazardous industrial work-related incidents.
Investors including Dan Gilbert’s Detroit Venture Partners, General Catalyst, and RTP Ventures, the venture investment firm led by Ru-Net Holdings co-founder, Leonid Boguslavsky, are backing Dey’s vision, which also has buy-in from the most important audience of all, the unions representing the workers that use the company’s tech.
Notes on the first day brainstorming session for Guardhat’s industrial wearable. Image Credit: Guardhat
Made in Detroit, built for the world’s industrial workers
Roughly fifteen workers are killed every day on the job in industrial jobs like mining, metals and oil and gas and another 3 million people are injured every year. For executives in the industry, the issue is as much a financial concern as it is an ethical one. At Severstal, 40 percent of Dey’s salary was tied to worker safety, he said.
In fact, the idea for Guardhat hit Dey while he was walking the floor of the company’s Detroit-area steel plant. On one of his regular walks through the factory Dey said he wandered past a man working on a piece of equipment when the employee’s carbon monoxide alarm started to buzz. Instead of trying to find the source of the leak, the man turned off his monitor.
“You’re taking about a steel facility in the heart of Detroit having the largest blast furnace in North America,” said Dey. “Whatever that individual was doing, it could have led to a catastrophic accident.”
That’s what inspired Guardhat’s technology that Dey said was designed to answer a few simple, situational questions that apply to any factory anywhere in the world: Where are you? What conditions do you face? When can help get to you? Those are the questions that Guardhat’s technology is designed to answer.
“We didn’t have effective means to prevent or if an accident happens to intervene with timely information,” Dey said.
The technology may have been designed by executives, but it was made in consultation with the heads of the Detroit area unions, to ensure that workers would actually use the product.
“We decided that we wanted to do this in September 2014,” Dey said. “And when I was struggling with whether to scratch that itch and start the business, the union guys said go for it and do it…. I was a person of color with a $6 billion P&L running one of the six largest steelmakers in the U.S. building this literally out of the garage. It took a lot of guts, stupidity, and it took a lot of support from regular friends at the UAW.”
That collaboration ensured that the union’s workers were comfortable that the information wasn’t being generated and stored in a way that employees would not feel that they were being monitored unnecessarily or punitively.
Guardhat Technologies wearable safety helmet. Image Credit Guardhat Technologies
From prototype to product
The company’s first product was the HC1 — a helmet that comes jam-packed with sensor equipment. “You want to put it on something that everyone wears and is mandated to wear,” Dey said.
Initially the thought was to just create the wearable, but over time Dey and his team realized that the device alone wouldn’t be enough. “The helmet is just another form factor… [and] whatever the form factor, you need to know how you make this information the single source of truth for the platform of all things that surround the worker.”
Like dozens of other Detroit-area startups that came before them, when Dey and his team needed to raise cash, they first turned to Dan Gilbert.
Gilbert tested the prototype by running around a building and asking the GuardHat team if they could find him and tell him where they thought he was.
With Gilbert on board, the product design firm frog labs came into the picture and so did 3M. By then, it was time to test the prototype.
“I still remember the first day we were in testing in a third party certified lab in Akron, Ohio,” sad Dey. These guys were dropping a metal ball from 5 meters and each one of those puppies was $3,000 a-piece and 27 of those hats got ground down to powder,” Dey said. “We failed every test because we didn’t know how to build a helmet.”
Assistance from frog and others brought the device over the finish line and it’s now being used by over 5,000 workers and prevented or alerted workers to at least 2,000 potentially dangerous incidents.
For Dey, the business could only have come from Detroit. “The Detroit thing is symbolic,” he said. It’s a symbol of the school of hard knocks that educated its founding team in the ways these heavy industries.
The carbon accounting and management platform Persefoni now has $9.7 million more in funding to support its international expansion, product development, and recruitment efforts.
The round, led by Rice Investment Group with participation from NGP ETP, the electricity, renewable and sustainability-focused investment arm of the oil and gas and power focused investment fund NGP, comes only about six months after the startup’s initial launch in August.
Founded only last January, Persefoni touts its tools to assemble, calculate, manage, and report organizational carbon footprints.
The company’s software promises real time reports on scope 1 through 3 emissions (these are emissions generated by a company’s direct operations, its purchases of power and the emissions of its suppliers).
“On the back of a banner year of net-zero commitments from governments, asset managers, and organizations the world over, we saw the venture and software investor communities wake up to what is the formation of the largest regulatory compliance software market since the introduction of Sarbanes Oxley”, said Kentaro Kawamori, CEO and co-founder of Persefoni, in a statement. “We applaud the efforts of financial regulators around the world who are implementing carbon and climate disclosure requirements. Such regulation is one of the most impactful ways to get companies accounting for, and reducing, their carbon footprint.”
Private equity firms like TPG are signing on to Persefoni’s service and Greg Lyons, a principal at NGP will be taking a seat on the company’s board of directors.
Additional investors in the company include the Carnrite Group and Sallyport Investments.
“Sallyport looks to partner with high-growth companies with an aim of making a meaningful industry impact,” said Doug Foshee, founder and owner of Sallyport Investments, in a statement.
Boosting the company’s environmental, social, and corporate governance bona fides is the addition of Robert G. Eccles, the founding chairman of the Sustainability Accounting Standards Board, to Persefoni’s board of advisors.
Meati, a company turning mycelium (the structural fibers of fungi) into healthier meat replacements for consumers, is prepping for a big summer rollout.
Co-founder Tyler Huggins expects to have the first samples of its whole-cut steak and chicken products in select restaurants around the country — along with their first commercial product, a jerky strip.
For Huggins, the product launch is another step on a long road toward broad commercial adoption of functional fungi foods as a better-for-you alternative to traditional meats.
“Use this as a conversation starter. About 2 ounces of this gives you 50% of your protein; 50% of your fiber; and half of your daily zinc. There really is nothing that can compare to this product in terms of nutritionals,” Huggins said.
And moving from meat to mushrooms is a better option for the planet.
Meati expects to turn on its pilot plant this summer and is joining a movement among mushroom fans that includes milk replacements, from Perfect Day, more meat replacements from Atlast, and leather substitutes from Ecovative and MycoWorks.
“We’re definitely all in this together,” said Huggins of the other mob of mycelium-based tech companies bringing products to market.
However, not all mycelium is created equally, Huggins said. Meati has what Huggins said was a unique way of growing its funguses (not a real word) that “keep it in its most happy state.” That means peak nutritional content and peak growth efficiency, according to the company.
For Huggins, whose parents own a bison ranch and who grew up in cattle country, the goal is not to replace a T-bone or a rib-eye, but the cuts of meat and chicken that find their ways into a burrito supreme or other quick-serve meat cuts.
Rendering of Meati mushroom meats in a Banh Mi. Image Credits: Meati
“Head to head with that kind of cut, we win,” Huggins said. “I’d rather pick a fight there now and buy ourselves some time. I don’t think we’re going to go super high end to start.”
That said, the company’s cap table of investors already includes some pretty heady culinary company. Acre Venture Partners (which counts Sam Kass — President Barack Obama’s senior policy advisor for nutrition policy, executive director for First Lady Michelle Obama’s Let’s Move! campaign, and an assistant chef in the White House — among its partnership) is an investor. So is Chicago’s fine dining temple, Alinea.
But Huggins wants Meati to be an everyday type of meat replacement product. “I want to make sure that people think this is an everyday protein,” Huggins said.
Meati thinks its future meat replacements will be cost competitive with conventional beef and chicken, but to whet consumers’ appetites, the company is starting with jerky.
“Meati’s delicious jerky,” said Huggins. “It provides this blank canvas. We’ll start with these beef-jerky-like flavors. But I want to come out of the gate and say that we’re mycelium jerky.”
The company currently has 30 people on staff led by Huggins and co-founder Justin Whiteley. The two men initially started working on Meati as a battery replacement. Based on their research (Huggins with mycelium and Whiteley with advanced batteries) the two men received a grant for a mycelium-based electrode for lithium-ion batteries.
“We were trying to tweak the chemical composition of the mycelium to make a better battery. What we found was that we were making something nutritious and edible,” said Huggins.
Also … the battery companies didn’t want it.
Now, backed by $28 million from Acre, Prelude Ventures, Congruent Ventures and Tao Capital, Meati is ready to go to market. The company also has access to debt capital to build out its vast network of mycelium growing facilities. It’s just raised a $18 million debt round from Trinity and Silicon Valley Bank.
“Two years ago … most companies in this space … there wasn’t this ability to take on debt to put steel in the ground,” said Huggins. “It’s an exciting time to be in food tech given that you can raise VC funding and there’s this ready available market for debt financing. You’ll start seeing faster and more rapid development because of it.”
Meati co-founders Tyler Huggins and Justin Whiteley. Image Credits: Meati
PlexTrac, a Boise, ID-based security service that aims to provide a unified workflow automation platform for red and blue teams, today announced that it has raised a $10 million Series A funding round led by Noro-Moseley Partners and Madrona Venture Group. StageDot0 ventures also participated in this round, which the company plans to use to build out its team and grow its platform.
With this new round, the company, which was founded in 2018, has now raised a total of $11 million, with StageDot0 leading its 2019 seed round.
“I have been on both sides of the fence, the specialist who comes in and does the assessment, produces that 300-page report and then comes back a year later to find that some of the critical issues had not been addressed at all. And not because the organization didn’t want to but because it was lost in that report,” PlexTrac CEO and President Dan DeCloss said. “These are some of the most critical findings for an entity from a risk perspective. By making it collaborative, both red and blue teams are united on the same goal we all share, to protect the network and assets.”
With an extensive career in security that included time as a penetration tester for Veracode and the Mayo Clinic, as well as senior information security advisor for Anthem, among other roles, DeCloss has quite a bit of first-hand experience that led him to found PlexTrac. Specifically, he believes that it’s important to break down the wall between offense-focused red teams and defense-centric blue teams.
“Historically there has been more of the cloak and dagger relationship but those walls are breaking down– and rightfully so, there isn’t that much of that mentality today– people recognize they are on the same mission whether they are internal security team or an external team,” he said. “With the PlexTrac platform the red and blue teams have a better view into the other teams’ tactics and techniques – and it makes the whole process into an educational exercise for everyone.”
At its core, PlexTrac makes it easier for security teams to produce their reports — and hence free them up to actually focus on ‘real’ security work. To do so, the service integrates with most of the popular scanners like Qualys, and Veracode, but also tools like ServiceNow and Jira in order to help teams coordinate their workflows. All the data flows into real-time reports that then help teams monitor their security posture. The service also features a dedicated tool, WriteupsDB, for managing reusable write-ups to help teams deliver consistent reports for a variety of audiences.
“Current tools for planning, executing, and reporting on security testing workflows are either nonexistent (manual reporting, spreadsheets, documents, etc…) or exist as largely incomplete features of legacy platforms,” Madrona’s S. Somasegar and Chris Picardo write in today’s announcement. “The pain point for security teams is real and PlexTrac is able to streamline their workflows, save time, and greatly improve output quality. These teams are on the leading edge of attempting to find and exploit vulnerabilities (red teams) and defend and/or eliminate threats (blue teams).”
When Hampus Jakobsson, Heidi Lindvall, and Joel Larsson, all well-known players in the European venture ecosystem, began talking about their new firm Pale Blue Dot, they began by looking at the problems with venture capital.
For the three entrepreneurs and investors, whose resumes included co-founding companies and accelerators like The Astonishing Tribe (Jakobsson) and Fast Track Malmö (Lindvall and Larsson) and working as a venture partner at BlueYard Capital (Jakobsson again), the problems were clear.
Their first thesis was that all investment funds should be impact funds, and be taking into account ways to effect positive change; their second thesis was that since all funds should be impact funds, what would be their point of differentiation — that is, where could they provide the most impact.
The three young investors hit on climate change as the core mission and ran with it.
As it was closing on €53 million ($63.3 million) last year, the firm also made its first investments in Phytoform, a London headquartered company creating new crops using computational biology and synbio; Patch, a San Francisco-based carbon-offsetting platform that finances both traditional and frontier “carbon sequestration” methods; and 20tree.ai, an Amsterdam-based startup, using machine learning and satellite data to understand trees to lower the risk of forest fires and power outages.
Now they’ve raised another €34 million and seven more investments on their path to doing between 30 and 35 deals.
These investments primarily focus on Europe and include Veat, a European vegetarian prepared meal company; Madefrom, a still-in-stealth company angling to make everyday products more sustainable; HackYourCloset, a clothing rental company leveraging fast fashion to avoid landfilling clothes; Hier, a fresh food delivery service; Cirplus, a marketplace for recycled plastics trading; and Overstory, which aims to prevent wildfires by giving utilities a view into vegetation around their assets.
The team expects to be primarily focused on Europe, with a few opportunistic investments in the U.S., and intends to invest in companies that are looking to change systems rather than directly affect consumer behavior. For instance, a Pale Blue Dot investment likely wouldn’t include e-commerce filters for more sustainable shopping, but potentially could include investments in sustainable consumer products companies.
The size of the firm’s commitments will range up to €1 million and will look to commit to a lot of investments. That’s by design, said Jakobsson. “Climate is so many different fields that we didn’t want to do 50% of the fund in food or 50% of the fund in materials,” he said. Also, the founders know their skillsets, which are primarily helping early stage entrepreneurs scale and making the right connections to other investors that can add value.
“In every deal we’ve gotten in co-investors that add particular, amazing, value while we still try to be the shepherds and managers and sherpas,” Jakobsson said. “We’re the ones that are going to protect the founder from the hell-rain of investor opinions.”
Another point of differentiation for the firm are its limited partners. Jakobsson said they rejected capital from oil companies in favor of founders and investors from the tech community that could add value. These include Prima Materia, the investment vehicle for Spotify founder Daniel Ek; the founders of Supercell, Zendesk, TransferWise and DeliveryHero are also backing the firm. So too, is Albert Wenger, a managing partner at Union Square Ventures.
The goal, simply, is to be the best early stage climate fund in Europe.
“We want to be the European climate fund,” Lindvall said. “This is where we can make most of the difference.”
Brands pay the company a commission to drive traffic to their websites under a standard affiliate marketing model and EcoCart uses a portion of the proceeds to offset a shopper’s carbon emissions.
About 10,000 companies work with EcoCart, either through direct partnerships, or passive affiliate marketing services. EcoCart also offers a carbon accounting tool for businesses and an offsetting offering for them as well, according to co-founders Peter Twomey and Dane Baker.
The two co-founders, who met at the University of San Diego previously founded a startup called Toyroom, which rented outdoor equipment to customers in an effort to reduce unnecessary consumption.
“We live this problem ourselves. We realized it was incredibly difficult to maintain this sustainability ethos,” Baker said.
While the browser extension sets EcoCart apart from other offsetting services like Cloverly, the company does share some functionality in its business-facing offering where an option to offset the carbon associated with a purchase is integrated directly into the checkout flow.
EcoCart launched its business-to-business integration in June of last year and now counts 500 vendors as customers. So far, about a quarter of customers have chosen to offset their purchases at checkout amounting to the capture of an estimated 25 million pounds of CO2, the company said.
Investors backing the company include Base 10 Partners; PopSugar co-founder, Brian Sugar’s early stage venture fund and angel investors like Ben Jabbaway, the founder of Privy; Rich Gardner, the VP of global partnerships at Klaviyo; Kyle Hency, the co-founder of Chubbie; Bryan Meehan, the chair of Blue Bottle Coffee; and Carly Strife, the co-founder of BarkBox.
While online shopping gets a bad reputation, it’s actually sometimes a greener option than shopping in physical stores, according to one study published in Nature last year.
Consumer offsets, while well-meaning, don’t have nearly the same impact as having the companies themselves actually rein in their greenhouse gas emissions and decarbonize their operations. In fact, the whole notion of the consumer carbon footprint and the personal responsibility of consumers for planetary pollution was dreamed up by advertising executives at the behest of oil and gas and consumer goods companies pushing products.
But something is better than nothing, and offsets do help necessary projects get funding.
EcoCart said it spent months developing a proprietary algorithm to calculate the carbon footprint of online orders. For both the e-commerce plugin and browser extension, EcoCart uses the characteristics of each order including material inputs to the item, shipping distance, and package weight to estimate the emissions created from that order, the company said.
“We believe EcoCart is reinventing how brands interact with their customers while also managing and addressing their environmental impact at scale,” said Chris Zeoli, Principal at Base10 Partners, in a statement. “EcoCart represents a solution that is helping reverse decades of harmful climate change. Base10 is proud to be partnering with the EcoCart founders as they continue to make carbon neutral shopping the new checkout standard for industries including retail, micromobility, food delivery, and more.”
The Zebra, an Austin-based company that operates an insurance comparison site, has raised $150 million in a Series D round that propels it into unicorn territory.
Both the round size and valuation are a substantial bump from the $38.5 million Series C that Austin-based The Zebra raised in February of 2020. (The company would not disclose its valuation at that time, saying now only that its new valuation of over $1 billion is a “nice step up.”)
The Zebra also would not disclose the name of the firm that led its Series D round, but sources familiar with the deal said it was London-based Hedosophia. Existing backers Weatherford Capital and Accel also participated in the funding event.
The round size also is bigger than all of The Zebra’s prior rounds combined, bringing the company’s total raised to $261.5 million since its 2012 inception. Previous backers also include Silverton Partners, Ballast Point Ventures, Daher Capital, Floodgate Fund, The Zebra CEO Keith Melnick, KDT and others.
According to Melnick, the round was all primary, and included no debt or secondary.
The Zebra started out as a site for people looking for auto insurance via its real-time quote comparison tool. The company partners with the top 10 auto insurance carriers in the U.S. Over time, it’s also “naturally” evolved to offer homeowners insurance with the goal of eventually branching out into renters and life insurance. It recently launched a dedicated home and auto bundled product, although much of its recent growth still revolves around its core auto offering, according to Melnick.
Like many other financial services companies, The Zebra has benefited from the big consumer shift to digital services since the beginning of the COVID-19 pandemic.
And we know this because the company is one of the few that are refreshingly open about their financials. The Zebra doubled its net revenue in 2020 to $79 million compared to $37 million in 2019, according to Melnick, who is former president of travel metasearch engine Kayak. March marked the company’s highest-performing month ever, he said, with revenue totaling $12.5 million — putting the company on track to achieve an annual run rate of $150 million this year. For some context, that’s up from $8 million in September of 2020 and $6 million in May of 2020.
Also, its revenue per applicant has grown at a clip of 100% year over year, according to Melnick. And The Zebra has increased its headcount to over 325, compared to about 200 in early 2020.
“We’ve definitely improved our relationships with carriers and seen more carrier participation as they continue to embrace our model,” Melnick said. “And we’ve leaned more into brand marketing efforts.”
The Zebra CEO Keith Melnick. Image courtesy of The Zebra
The company was even profitable for a couple of months last year, somewhat “unintentionally,” according to Melnick.
“We’re not highly unprofitable or burning through money like crazy,” he told TechCrunch. “This new raise wasn’t to fund operations. It’s more about accelerating growth and some of our product plans. We’re pulling forward things that were planned for later in time. We still had a nice chunk of money sitting on our balance sheet.”
The company also plans to use its new capital to do more hiring and focus strongly on continuing to build The Zebra’s brand, according to Melnick. Some of the things the company is planning include a national advertising campaign and adding tools and information so it can serve as an “insurance advisor,” and not just a site that refers people to carriers. It’s also planning to create more “personalized experiences and results” via machine learning.
“We are accelerating our efforts to make The Zebra a household name,” Melnick said. “And we want a deeper connection with our users.” It also aims to be there for a consumer through their lifecycle — as they move from being renters to homeowners, for example.
And while an IPO is not out of the question, he emphasizes that it’s not the company’s main objective at this time.
“I definitely try not to get locked on to a particular exit strategy. I just want to make sure we continue to build the best company we can. And then, I think the exit will make itself apparent,” Melnick said. “I’m not blind and am very aware that public market valuations are strong right now and that may be the right decision for us, but for now, that’s not the ultimate goal for me.”
To the CEO, there’s still plenty of runway.
“This is a big milestone, but I do feel like for us that this is just the beginning,” he said. “We’ve just scratched the surface of it.”
Early investor Mark Cuban believes the company is at an inflection point.
” ‘Startup’ isn’t the right word anymore,” he said in a written statement. “The Zebra is a full fledged tech company that is taking on – and solving – some of the biggest challenges in the $638B insurance industry.”
Accel Partner John Locke said the firm has tripled down on its investment in The Zebra because of its confidence in not only what the company is doing but also its potential.
“In an increasingly noisy insurance landscape that includes insurtechs and traditional carriers, giving consumers the ability to compare everything in one place is is more and more valuable,” he told TechCrunch. “I think The Zebra has really seized the mantle of becoming the go-to site for people to compare insurance and then that’s showing up in the numbers, referral traffic and fundraise interest.”
Shorthand, the Australian startup behind a no-code platform that allows publishers and brands to create multimedia stories, has raised $10 million Australian (just under $8 million U.S.) from Fortitude Investment Partners.
CEO Ricky Robinson told me via email that this is Shorthand’s first institutional round of funding, and that the company has been profitable for the past two years.
“We’ve been lucky enough to grow to where we are today through an entirely inbound, organic model that leverages the beautiful content that our customers create in Shorthand to generate leads,” Robinson wrote. “But we’ve been testing other channels with some success and the time is right to ramp up those other marketing initiatives. That’s where we’ll be spending this funding, while also investing heavily in our product to keep Shorthand at the cutting edge of storytelling innovation for the web.”
Those customers include the BBC, Dow Jones, the University of Cambridge, Nature, Manchester City FC and Peloton. For example, BBC News used Shorthand to create this story about searching for dinosaur fossils.
The Shorthand website extols the virtues of “scrollytelling,” where a reader can trigger interesting transitions and effects simply by scrolling through the story. Robinson suggested that this is a way to make stories feel interactive and engaging “without asking your audience to learn how to interact with it.”
As you can see in the demo video above, Shorthand offers a fairly straightforward drag-and-drop interface for adding different text and media elements, as well as effects. Robinson said that unlike other tools like Webflow and Ceros, Shorthand was designed to be used by editors and writers. And although Shorthand does support the use of themes and templates, he said that’s not enough.
“You need to provide flexibility without making writers get into the weeds of web design or making them use complicated design tools,” he wrote. “The focus should be at the level of story design, not web design, and that’s really what sets Shorthand apart, and it’s why our customers are able to consistently produce highly engaging, award-winning content for their audiences.”
The company also says that demand has only increased during the pandemic, with usage quadrupling in the fourth quarter of 2020 and subscription revenue up 8.8% month-over-month in February of this year.
“The platform offers a rare combination of powerful output and simplicity of use for content creators,” said Fortitude Partner Nick Miller in a statement. “It is clear why the word is spreading about the Shorthand story and what it can do for digital communication.”
There’s been a lot of investment in machine learning startups recently as companies try to push the notion into a wider variety of endeavors. Comet, a company that helps customers iterate on models in an experimentation process designed to eventually reach production, announced a $13 million Series A today.
Scale Venture Partners led the round with help from existing investors Trilogy Equity Partners and Two Sigma Ventures. The startup has raised almost $20 million, according to Crunchbase data.
Investors saw a company that has grown revenue over 500% over the last year, says Gideon Mendels, co-founder and CEO. “Things have been working very well for us. On the product side, we’ve continued to double down on what we call experimentation management where we are really tracking these models — data that came into them, the hyper parameters and helping teams to debug and understand what’s going on with their models,” he said.
In addition to the funding, the company is also announcing an expansion of the platform to follow the models into post production with a product they are calling Comet Model Production Monitoring (MPM).
“The model production monitoring product essentially focuses on models post production. The original product was more around how multiple offline experiments are modeled during training, while MPM is focused on these models once they hit production for the first time,” Mendels explained.
Andy Vitus, partner at investor Scale Venture Partners, sees model lifecycle management tooling like Comet’s as a developing market. “Machine learning and AI will drive the future of enterprise software, and ensuring that organizations have full visibility and control of a model’s life cycle will be imperative to it,” Vitus said in a statement
As the company grows, it’s opening a new engineering hub in Israel in addition to its office in NYC. While these offices are closed for now, Mendels says that they will have a hybrid office when the pandemic ebbs.
“Moving forward we are planning to have an office in New York City and another office in Tel Aviv. But we’re not going to require anyone to work from the office if they choose not to, or, they can come in a couple days a week. And we’re still going to support hires from around the world.”
Corporate training startup Attensi — which originally emerged out of Oslo, Norway — has raised $26 million from New York-based Lugard Road Capital, DX Ventures (a VC fund backed by Delivery Hero), and existing shareholder Viking Venture. The new funding will be used to expand in North America and Europe.
Attensi uses a ‘gamified approach to corporate training, putting employees into 3D simulations of their workplace and work processes. Its competitors include companies like GoSkills, Mindflash SAP Litmos Skilljar.
With the pandemic shifting all office work to remote, digital training platforms like this stand to benefit.
This is also yet another recent example of how US VCs are ‘going hunting’ for startups in Europe, putting pressure on local VCs.
Attensi co-founder and co-CEO, Trond Aas said in a statement: “With gamified simulation training, we have combined the best of workplace psychology with our expertise in simulations and gamification to create a new category of training solutions.”
The company claims it’s experienced a 63% CAGR in annual recurring revenue. Its clients include Daimler Mercedes Benz, Circle K, Equinor, BCG, and ASDA.
Doug Friedman, a partner at Lugard Road Capital, said: “We could not be more excited to be investing in the Attensi team as they work to forever change and improve corporate learning and development through their Attensi solutions.”
Kavak, the Mexican startup that’s disrupted the used car market in Mexico and Argentina, today announced its Series D of $485 million, which now values the company at $4 billion. This round more than triples their previous valuation of $1.15 billion, which established them as a unicorn just a couple of months ago in October of 2020. Kavak is now one of the top five highest-valued startups in Latin America.
The round was led by D1 Capital Partners, Founders Fund, Ribbit and BOND, and brings Kavak’s total capital raised to date to more than $900 million. Kavak recently soft-launched in Brazil, and this new round of funding will be used to build out the Brazilian market and beyond, said Carlos García Ottati, Kavak’s CEO and co-founder. The company plans to do a full launch in Brazil in the next 60 days, García said, and we can expect to see Kavak in markets outside Latin America in the next 24 months, he added.
“We were built to solve emerging market problems,” García said.
Kavak, which was founded in 2016, is an online marketplace that aims to bring transparency, security and access to financing to the used car market. The company also offers its own financing through its fintech arm, Kavak Capital, and counts more than 2,500 employees and 20 logistics and reconditioning hubs in Mexico and Argentina.
“In Latin America, 90% of the [used car] transactions are informal, which leads to a 40% fraud rate,” said García, who experienced these challenges firsthand when he moved to Mexico from Colombia a couple of years ago and bought a used car.
“My budget allowed me to buy a used car, but there was no infrastructure around it. It took me six months to buy the car, and then the car had legal and mechanical issues and I lost most of my money,” he said. Kavak buys cars from individuals, refurbishes them and offers warranties to buyers.
“Instead of buying a new car, they can buy a better car that still has all the warranties. It’s a really aspirational process,” said García. The company, which really amounts to four companies in one given its areas of focus, was built to be comprehensive by design in order to meet the various gaps in the market, García said.
“When you’re building a business here [Latin America], you need to build several businesses because so many things are broken,” he said. That’s why the financing option, for example, has been a key to their success, according to García.
Financing has traditionally been hard to come by in Brazil, and as García said, the used car market lacks infrastructure there, too. That being said, Brazil is Latin America’s fintech hub, and the space has made leaps and bounds over the last 7-10 years with companies such as Nubank, PagSeguro, Creditas, PicPay, and others leading the way. As a result, credit cards and loans are more widely available today in the region, offering competition for Kavak Capital. While Kavak has localized some of its product for the Brazilian market — namely building out a Portuguese language version of the app and website — García said the markets are very similar.
“In Brazil, you still have the same problems that you have in Mexico, but Brazil is a little more developed, especially in fintech, which is light years ahead of Mexico,” he said.
With the Brazilian product heading to the races, García said they already have plans for other regions, though he declined to name them.
“80% of people in emerging markets don’t have access to a car,” García said of the global market size. “We want to go into big markets where customers are facing similar problems and where Kavak can really change their lives,” he added.
One of the more tedious aspects of machine learning is providing a set of labels to teach the machine learning model what it needs to know. Snorkel AI wants to make it easier for subject matter experts to apply those labels programmatically, and today the startup announced a $35 million Series B.
It also announced a new tool called Applications Studio that provides a way to build common machine learning applications using templates and predefined components.
Lightspeed Venture Partners led the round with participation from previous investors Greylock, GV, In-Q-Tel and Nepenthe Capital. New investors Walden and BlackRock also joined in. The startup reports that it has now raised $50 million.
Company co-founder and CEO Alex Ratner says that data labeling remains a huge challenge and roadblock to moving machine learning and artificial intelligence forward inside a lot of industries because it is costly, labor-intensive and hard for the subject experts to carve out the time to do it.
“The not so hidden secret about AI today is that in spite of all the technological and tooling advancements, roughly 80 to 90% of the cost and time for an average AI project goes into just manually labeling and collecting and relabeling this training data,” he said.
He says that his company has developed a solution to simplify this process to make it easier for subject experts to programmatically add the labels, a process he says decreases the time and effort required to apply labels in a pretty dramatic way from months to hours or days, depending on the complexity of the data.
As the company has developed this methodology, customers have been asking for help in the next step of the machine learning process, which is taking that training data and the model and building an application. That’s where the Application Studio comes in. It could be a contract classifier at a bank or a network anomaly detector at a telco and it helps companies take that next step after data labeling.
“It’s not just about how you programmatically label the data, it’s also about the models, the preprocessors, the post processors, and so we’ve made this now accessible in a kind of templated and visual no-code interface,” he said.
The company’s products are based on research that began at the Stanford AI Lab in 2015. The founders spent four years in the research phase before launching Snorkel in 2019. Today, the startup has 40 employees. Ratner recognizes the issues that the technology industry has had from a diversity perspective and says he has made a conscious effort to build a diverse and inclusive company.
“What I can say is that we tried to prioritize it at a company level, the full team level and at a board level from day one, and to also put action behind that. So we’ve been working with external firms for internal training and audits and strategy around DEI, and we’ve made pipeline diversity, a non-negotiable requirement of any of our contracts with recruiting firms,” he said.
Ratner also recognizes that automation can hard code bias into machine learning models, and he’s hopeful that by simplifying the labeling process, it can make it much easier to detect bias when it happens.
“If you start with a dozen or two dozen of what we call labeling functions in Snorkel, you still need to be vigilant and proactive about trying to detect bias, but it’s easier to audit what taught your model to change it by just going back and looking at a couple of hundred lines of code.”