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Yesterday — July 8th 2020Your RSS feeds

SetSail raises raises $7M to change how sales teams are compensated

By Ron Miller

Most sales teams earn a commission after a sale closes, but nothing prior to that. Yet there are a variety of signals along the way that indicate the sales process is progressing, and SetSail, a startup from some former Google engineers, is using machine learning to figure out what those signals are, and how to compensate salespeople as they move along the path to a sale, not just after they close the deal.

Today, the startup announced a $7 million investment led by Wing Venture Capital with help from Operator Collective and Team8. Under the terms of the deal, Leyla Seka from Operator will be joining the board. Today’s investment brings the total raised to $11 million, according to the company.

CEO and co-founder Haggai Levi says his company is based on the idea that commission alone is not a good way to measure sales success, and that it is in fact a lagging indicator. “We came up with a different approach. We use machine learning to create progress-based incentives,” Levi explained

To do that they rely on machine learning to discover the signals that are coming from the customer that indicate that the deal is moving forward, and using a points system, companies can begin compensating reps on hitting these milestones, even before the sale closes.

The seeds for the idea behind SetSail were planted years ago when the three founders were working at Google tinkering with ways to motivate sales reps beyond pure commission. From a behavioral perspective, Levi and his co-founders found that reps were taking fewer risks with a pure commission approach and they wanted to find a way to change that. The incremental compensation system achieves that.

“If I’m closing the deal, I’m getting my commission. If I’m not closing the deal, I’m getting nothing. That means from a behavioral point of view, I would take the shortest path to win a deal, and I would take the minimum risk possible. So if there’s a competitive situation I will try to avoid that,” he said.

They look at things like appointments, emails and call transcripts. The signals will vary by customer. One may find an appointment with CIO is a good signal a deal is on the right trajectory, but to avoid having reps gaming the system by filling the CRM with the kinds of positive signals the company is looking for, they only rely on objective data, rather than any kind of self-reporting information from reps themselves.

The team eventually built a system like this inside Google, and in 2018, left to build a solution for the rest of the world that does something similar.

As the company grows, Levi says he is building a diverse team, not only because it’s the right thing to do, but because it simply makes good business sense. “The reality is that we’re building a product for a diverse audience, and if we don’t have a diverse team we would never be able to build the right product,” he explained.

The company’s unique approach to sales compensation is resonating with customers like Dropbox, Lyft and Pendo, who are looking for new ways to motivate sales teams, especially during a pandemic when there may be a longer sales cycle. This kind of system provides a way to compensate sales teams more incrementally and reward positive approaches that have proven to result in sales.

Before yesterdayYour RSS feeds

OwnBackup lands $50M as backup for Salesforce ecosystem thrives

By Ron Miller

OwnBackup has made a name for itself primarily as a backup and disaster recovery system for the Salesforce ecosystem, and today the company announced a $50 million investment.

Insight Partners led the round with participation from Salesforce Ventures and Vertex Ventures. This chunk of money comes on top of a $23 million round from a year ago, and brings the total raised to over $100 million, according to the company.

It shouldn’t come as a surprise that Salesforce Ventures chipped in when the majority of the company’s backup and recovery business involves the Salesforce ecosystem, although the company will be looking to expand beyond that with the new money.

“We’ve seen such growth over the last two and a half years around the Salesforce ecosystem. and the other ISV partners like Veeva and nCino that we’ve remained focused within the Salesforce space. But with this funding, we will expand over the next 12 months into a few new ecosystems,” company CEO Sam Gutmann told TechCrunch.

In spite of the pandemic, the company continues to grow, adding 250 new customers last quarter, bringing it to over 2000 customers and 250 employees, according to Gutmann.

He says that raising the round, which closed at the beginning of May had some hairy moments as the pandemic began to take hold across the world and worsen in the U.S. For a time, he began talking to new investors in case his existing ones got cold feet. As it turned out, when the quarterly numbers came in strong, the existing ones came back and the round was oversubscribed, Gutmann said.

“Q2 frankly was a record quarter for us, adding over 250 new accounts, and we’re seeing companies start to really understand how critical this is,” he said.

The company plans to continue hiring through the pandemic, although he says it might not be quite as aggressively as they once thought. Like many companies, even though they plan to hire, they are continually assessing the market. At this point, he foresees growing the workforce by about another 50 people this year, but that’s about as far as he can look ahead right now.

Gutmann says he is working with his management team to make sure he has a diverse workforce right up to the executive level, but he says it’s challenging. “I think our lower ranks are actually quite diverse, but as you get up into the leadership team, you can see on the website unfortunately we’re not there yet,” he said.

They are instructing their recruiting teams to look for diverse candidates whether by gender or ethnicity, and employees have formed a diversity and inclusion task force with internal training, particularly for managers around interviewing techniques.

He says going remote has been difficult, and he misses seeing his employees in the office. He hopes to have at least some come back, before the end of the summer and slowly add more as we get into the fall, but that will depend on how things go.

Salesforce announces a new mobile collaboration tool for sales called Anywhere

By Ron Miller

Even before the pandemic pushed most employees to work from home, sales people often worked outside of the office. Salesforce introduced a new tool today at the Trailheadx Conference called Salesforce Anywhere that’s designed to let teams collaborate and share data wherever they happen to be.

Salesforce VP of product, Michael Machado says that the company began thinking about the themes of working from anywhere pre-COVID. “We were really thinking across the board what a mobile experience would be for the end users that’s extremely opinionated, really focuses on the jobs to be done and is optimized for what workers need and how that user experience can be transformed,” Machado explained.

As the pandemic took hold and the company saw how important collaboration was becoming in a digital context, the idea of an app like this took on a new sense of urgency. “When COVID happened, it really added fuel to the fire as we looked around the market and saw that this is a huge need with our customers going through a major transformation, and we wanted to be there to support them in Salesforce with kind of a native experience,” he said.

The idea is to move beyond the database and help surface the information that matters most to individual sales people based on their pipelines. “So we’re going to provide real time alerts so users are able to subscribe to their own alerts that they want to be notified about, whether it’s based on a list they use or a report that they work off of [in Salesforce], but also at the granularity of a single field in Salesforce,” he said.

Employees can then share information across a team, and have chats related to that information. While there are other chat tools out there, Machado says that this tool is focused on sharing Salesforce data, rather than being general purpose like Slack or other business chat tool.

Image Credit: Salesforce

 

Salesforce sees this as another way to remove the complexity of working in CRM. It’s not a secret that sales people don’t love entering customer information into CRM tools, so the company is attempting to leverage that information to make it worth their while. If the tool isn’t creating a layer of work just for record keeping’s sake, but actually taking advantage of that information to give the sales person key information about his or her pipeline when it matters most, that makes the record keeping piece more attractive. Being able to share and communicate around that information is another advantage.

This also creates a new collaboration layer that is increasingly essential with workers spread out and working from home. Even when we return to some semblance of normal, sales people on the road can use Anywhere to collaborate, communicate and stay on top of their tasks.

The new tool will be available in Beta in July. The company expects to make it generally available some time in the fourth quarter this year.

Affirming the position of tech advocates, Supreme Court overturns Trump’s termination of DACA

By Jonathan Shieber

The U.S. Supreme Court ruled today that President Donald Trump’s administration unlawfully ended the federal policy providing temporary legal status for immigrants who came to the country as children.

The decision, issued Thursday, called the termination of the Obama-era policy known as the Deferred Action for Childhood Arrivals (DACA) program “arbitrary and capricious.” As a result of its ruling, nearly 640,000 people living in the United States are now temporarily protected from deportation.

While a blow to the Trump Administration, the ruling is sure to be hailed nearly unanimously by the tech industry and its leaders, who had come out strongly in favor of the policy in the days leading up to its termination by the current president and his advisors.

At the beginning of 2018, many of tech’s most prominent executives, including the CEOs of Apple, Facebook, Amazon and Google, joined more than 100 American business leaders in signing an open letter asking Congress to take action on the DACA program before it expired in March.

Tim Cook, Mark Zuckerberg, Jeff Bezos and Sundar Pichai made a full-throated defense of the policy and pleaded with Congress to pass legislation ensuring that “Dreamers,” or undocumented immigrants who arrived in the United States as children and were granted approval by the program, can continue to live and work in the country without risk of deportation.

At the time, those executives said the decision to end the program could potentially cost the U.S. economy as much as $215 billion.

In a 2017 tweet, Tim Cook noted that Apple employed roughly 250 “Dreamers.”

250 of my Apple coworkers are #Dreamers. I stand with them. They deserve our respect as equals and a solution rooted in American values.

— Tim Cook (@tim_cook) September 3, 2017

The list of tech executives who came out in support of the DACA initiative is long. It included: IBM CEO Ginni Rometty; Brad Smith, the president and chief legal officer of Microsoft; Hewlett Packard Enterprise CEO Meg Whitman; and CEOs or other leading executives of AT&T, Dropbox, Upwork, Cisco Systems, Salesforce, LinkedIn, Intel, Warby Parker, Uber, Airbnb, Slack, Box, Twitter, PayPal, Code.org, Lyft, Etsy, AdRoll, eBay, StitchCrew, SurveyMonkey, DoorDash and Verizon (the parent company of Verizon Media Group, which owns TechCrunch).

At the heart of the court’s ruling is the majority view that Department of Homeland Security officials didn’t provide a strong enough reason to terminate the program in September 2017. Now, the issue of immigration status gets punted back to the White House and Congress to address.

As the Boston Globe noted in a recent article, the majority decision written by Chief Justice John Roberts did not determine whether the Obama-era policy or its revocation were correct, just that the DHS didn’t make a strong enough case to end the policy.

“We address only whether the agency complied with the procedural requirement that it provide a reasoned explanation for its action,” Roberts wrote. 

While the ruling from the Supreme Court is some good news for the population of “Dreamers,” the question of their citizenship status in the country is far from settled. The U.S. government’s response to the COVID-19 pandemic has basically consisted of freezing as much of the nation’s immigration apparatus as possible.

An executive order in late April froze the green card process for would-be immigrants, and the administration was rumored to be considering a ban on temporary workers under H1-B visas as well.

The president has, indeed, ramped up the crackdown with strict border control policies and other measures to curb both legal and illegal immigration. 

More than 800,000 people joined the workforce as a result of the 2012 program crafted by the Obama administration. DACA allows anyone under 30 to apply for protection from deportation or legal action on their immigration cases if they were younger than 16 when they were brought to the U.S., had not committed a crime and were either working or in school.

In response to the Supreme Court decision, the President tweeted “Do you get the impression that the Supreme Court doesn’t like me?”

Do you get the impression that the Supreme Court doesn’t like me?

— Donald J. Trump (@realDonaldTrump) June 18, 2020

 

 

Urbint, a provider of field safety information for utilities, raises $20 million

By Jonathan Shieber

Urbint, a developer of a field safety information service for industrial workforces, has raised $20 million in a new round of funding as it looks to expand its research and development capabilities, grow internationally, and develop services for new industrial categories.

With the bulk of its business in the North America utility market, it was time for the company to expand its geographic horizons, something that it should be able to do with the addition of the venture arm of the UK-based utility company National Grid as one of its backers.

Other investors in the company’s $20 million round include Energy Impact Partners, Piva and Salesforce Ventures .

“A few years ago, we saw that utilities were facing an overwhelming number of threats in the field, stemming from aging infrastructure, extreme weather, and workforce turnover, and didn’t have adequate tools to make informed risk-driven safety decisions,” said Corey Capasso, the founder and chief executive of Urbint, in a statement. “We built Urbint to arm them with predictive AI to stay one step ahead. The pandemic has only intensified this need as dangers to infrastructure and essential workers increase and resources are strained. This investment will grow our reach to keep even more communities safe.”

The company also said it will work to improve its diversity and inclusion efforts as it considers where to allocate its resources, Capasso said in an interview with TechCrunch.

Urbint works by aggregating information around various risks that field workers might face including data around weather, planned construction, and even incidence of infection or disease spread (a new addition in response to the COVID-19 epidemic in the US), according to Capasso.

The company currently counts 40 utilities in the US among its customer base and the new capital will help expand beyond that base, Capasso said.

“Not only are we an investor in Urbint, but National Grid also uses Urbint’s technology to predict and prevent safety incidents, keeping the community safe,” said Lisa Lambert, Founder and President of National Grid Partners, in a statement. “AI safety technology is especially vital to reduce risk during this pandemic, and we’re proud to grow our investment in Urbint.”

Contentful raises $80M Series E round for its headless CMS

By Frederic Lardinois

Headless CMS company Contentful today announced that it has raised an $80 million Series E funding round led by Sapphire Ventures, with participation from General Catalyst, Salesforce Ventures and a number of other new and existing investors. With this, the company has now raised a total of $158.3 million and a Contentful spokesperson tells me that it is approaching a $1 billion valuation.

In addition, the company also today announced that it has hired Bridget Perry as its CMO. She previously led Adobe’s marketing efforts across Europe, the Middle East and Africa.

Currently, 28% of the Fortune 500 use Contentful to manage their content across platforms. The company says it has a total of 2,200 paying customers right now and these include the likes of Spotify,  ITV, the British Museum, Telus and Urban Outfitters.

Steve Sloan, the company’s CEO who joined the company late last year, attributes its success to the fact that virtually every business today is in the process of figuring out how to become digital and serve its customers across platforms – and that’s a process that has only been accelerated by the coronavirus pandemic.

“Ten or fifteen years ago, when these content platforms or content management systems were created, they were a) really built for a web-only world and b) where the website was a complement to some other business,” he said. “Today, the mobile app, the mobile web experience is the front door to every business on the planet. And that’s never been any more clear than in this recent COVID crisis, where we’ve seen many, many businesses — even those that are very traditional businesses — realize that the dominant and, in some cases, only way their customers can interact with them is through that digital experience.”

But as they are looking at their options, many decide that they don’t just want to take an off-the-shelf product, Sloan argues, because it doesn’t allow them to build a differentiated offering.

Image Credits: Contentful /

Perry also noted that this is something she saw at Adobe, too, as it built its digital experience business. “Leading marketing at Adobe, we used it ourselves,” she said. “And so the challenge that we heard from customers in the market was how complex it was in some cases to implement, to organize around it, to build those experiences fast and see value and impact on the business. And part of that challenge, I think, stemmed from the kind of monolithic, all-in-one type of suite that Adobe offered. Even as a marketer at Adobe, we had challenges with that kind of time to market and agility. And so what’s really interesting to me — and one of the reasons why I joined Contentful — is that Contentful approaches this in a very different way.”

Sloan noted that putting the round together was a bit of an adventure. Contentful’s existing investors approached the company around the holidays because they wanted to make a bigger investment in the company to fuel its long-term growth. But at the time, the company wasn’t ready to raise new capital yet.

“And then in January and February, we had inbound interest from people who weren’t yet investors, who came to us and said, ‘hey, we really want to invest in this company, we’ve seen the trend and we really believe in it.’ So we went back to our insiders and said, ‘hey, we’re going to think about actually moving in our timeline for raising capital,” Sloan told me. “And then, right about that time is when COVID really broke out, particularly in Western Europe in North America.”

That didn’t faze Contentful’s investors, though.

“One of the things that really stood out about our investors — and particularly our lead investor for this round Sapphire — is that when everybody else was really, really frightened, they were really clear about the opportunity, about their belief in the team and about their understanding of the progress we had already made. And they were really unflinching in terms of their support,” Sloan said.

Unsurprisingly, the company plans to use the new funding to expand its go-to-market efforts (that’s why it hired Perry, after all) but Sloan also noted that Contentful plans to invest quite a bit into R&D as well as it looks to help its customers solve more adjacent problems as well.

Outreach nabs $50M at a $1.33B valuation for software that helps with sales engagement

By Ingrid Lunden

CRM software has become a critical piece of IT when it comes to getting business done, and today a startup focusing on one specific aspect of that stack — sales automation — is announcing a growth round of funding underscoring its own momentum. Outreach, which has built a popular suite of tools used by salespeople to help identify and reach out to prospects and improve their relationships en route to closing deals, has raised $50 million in a Series F round of funding that values the company at $1.33 billion. 

The funding will be used to continue expanding geographically — headquartered in Seattle, Outreach also has an office in London and wants to do more in Europe and eventually Asia — as well as to invest in product development.

The platform today essentially integrates with a company’s existing CRM, be it Salesforce, or Microsoft’s, or Kustomer, or something else — and provides an SaaS-based set of tools for helping to source and track meetings, have to-hand information on sales targets, and a communications manager that helps with outreach calls and other communication in real-time. It will be investing in more AI around the product, such as its newest product Kaia (an acronym for “knowledge AI assistant”), and it has also hired a new CFO, Melissa Fisher, from Qualys, possibly a sign of where it hopes to go next as a business.

Sands Capital — an investor out of Virginia that also backs the likes of UiPath and DoorDash — is leading the round, Outreach noted, with “strong participation” also from strategic backer Salesforce Ventures. Other investors include Operator Collective (a new backer that launched last year and focuses on B2B) and previous backers Lone Pine Capital, Spark Capital, Meritech Capital Partners, Trinity Ventures, Mayfield, and Sapphire Ventures.

Outreach has raised $289 million to date, and for some more context, this is definitely an upround: the startup was last valued at $1.1 billion when it raised a Series E in April 2019.

The funding comes on the heels of strong growth for the company: more than 4,000 businesses now use its tools, including Adobe, Tableau, DoorDash, Splunk, DocuSign, and SAP, making Outreach the biggest player in a field that also includes Salesloft (which also raised a significant round last year on the heels of Outreach’s), ClariChorus.aiGongConversica, and Afiniti. Its sweet spot has been working with technology-led businesses and that sector continues to expand its sales operations, even as much of the economy has contracted in recent months. 

“You are seeing a cambric explosion of B2B startups happening everywhere,” Manny Medina, CEO and co-founder of Outreach, said in a phone interview this week. “It means that sales roles are being created as we speak.” And that translates to a growing pool of potential customers for Outreach.

It wasn’t always this way.

When Outreach was first founded in 2011 in Seattle, it wasn’t a sales automation company. It was a recruitment startup called GroupTalent working on software to help source and hire talent, aimed at tech companies. That business was rolling along, until it wasn’t: in 2015, the startup found itself with only two months of runway left, with little hope of raising more. 

“We were not hitting our stride, and growth was hard. We didn’t make the numbers in 2014 and then had two months of cash left and no prospects of raising more,” Medina recalled. “So I sat down with my co-founders,” — Gordon Hempton, Andrew Kinzer and Wes Hather, none of whom are at the company anymore — “and we decided to sell our way out of it. We thought that if we generated more meetings we could gain more opportunities to try to sell our recruitment software.

“So we built the engine to do that, and we saw that we were getting 40% reply rates to our own outreaching emails. It was so successful we had a 10x increase in productivity. But we ran out of sales capacity, so we started selling the meetings we had managed to secure with potential talent directly to the tech companies themselves, who would have become their employers.”

That quickly tipped over into a business opportunity of its own. “Companies were saying to us, ‘I don’t want to buy the recruitment software. I need that sales engine!” The company never looked back, and changed its name to work for the pivot.

Fast forward to 2020, and times are challenging in a completely different way, defined as we are by a global health pandemic that affects what we do every day, where we go, how we work, how we interact with people, and much more. 

Medina says that impact of the novel coronavirus has been a significant one for the company and its customers, in part because it fits well with two main types of usage cases that have emerged in the world of sales in the time of COVID-19.

“Older sellers now working from home are accomplished and don’t need to be babysat,” he said, but added but they can’t rely on their traditional touchpoints “like meetings, dinners, and bar mitzvahs” anymore to seal deals. “They don’t have the tools to get over the line. So our product is being called in to help them.”

Another group at the other end of the spectrum, he said, are “younger and less experienced salespeople who don’t have the physical environment [many live in smaller places with roommates] nor experience to sell well alone. For them it’s been challenging not to come into an office because especially in smaller companies, they rely on each other to train, to listen to others on calls to learn how to sell.”

That’s the other scenario where Outreach is finding some traction: they’re using Outreach’s tools as a proxy for physically sitting alongside and learning from more experienced colleagues, and using it as a supplement to learning the ropes in the old way .

Like a lot of sales tools that are powered by AI, Outbrain in part is taking on some of the more mundane jobs of salespeople. But Medina doesn’t believe that this will play out in the “man versus machine” scenario we often ponder when we think about human obsolescence in the face of technological efficiency. In other words, he doesn’t think we’re close to replacing the humans in the mix, even at a time when we’re seeing so many layoffs.

“We are at the early innings,” he said. “There are 6.8 million sales people and we only have north of 100,000 users, not even 2% of the market. There may be a redefinition of the role, but not a reduction.”

SaaS earnings rise as pandemic pushes companies more rapidly to the cloud

By Ron Miller

As the pandemic surged and companies moved from offices to working at home, they needed tools to ensure the continuity of their business operations. SaaS companies have always been focused on allowing work from anywhere there’s access to a computer and internet connection, and while the economy is reeling from COVID-19 fallout, modern software companies are thriving.

That’s because the pandemic has forced companies that might have been thinking about moving to the cloud to find tools what will get them there much faster. SaaS companies like Zoom, Box, Slack, Okta and Salesforce were there to help; cloud security companies like CrowdStrike also benefited.

While it’s too soon to say how the pandemic will affect work long term when it’s safe for all employees to return to the office, it seems that companies have learned that you can work from anywhere and still get work done, something that could change how we think about working in the future.

One thing is clear: SaaS companies that have reported recent earnings have done well, with Zoom being the most successful example. Revenue was up an eye-popping 169% year-over-year as the world shifted in a big way to online meetings, swelling its balance sheet.

There is a clear connection between the domestic economy’s rapid transition to the cloud and the earnings reports we are seeing — from infrastructure to software and services. The pandemic is forcing a big change to happen faster than we ever imagined.

Big numbers

Zoom and CrowdStrike are two companies expected to grow rapidly thanks to the recent acceleration of the digital transformation of work. Their earnings reports this week made those expectations concrete, with both firms beating expectations while posting impressive revenue growth and profitability results.

Salesforce names Vlocity founder David Schmaier CEO of new Salesforce Industries division

By Ron Miller

When Salesforce announced it was acquiring Vlocity for $1.33 billion in February, it was a deal that made sense for both companies. Today, the company announced that the deal has closed and Vlocity CEO David Schmaier has been named CEO of a new division called Salesforce Industries.

Vlocity has built several industry-specific CRM tools such media and entertainment, healthcare and government on top of the Salesforce platform. While Salesforce has developed some of its own industry solutions, having a division devoted to verticalized tools creates additional market opportunities for the company.

Schmaier sees the new division as a commitment from the company on the value of an industry-focused approach.

“As Vlocity becomes part of what we’re calling Salesforce industries, this will be a larger group within Salesforce to really focus on bringing these industry-specific solutions to the customer, helping them go digital and working in a whole new way,” Schmaier told TechCrunch.

Salesforce president and COO Bret Taylor will be Schmaier’s boss. Writing in a blog post announcing the new division, Taylor said that like so many aspects of technology solutions these days, the industry focus is about helping companies with digital transformation. As the world changes before our eyes during the pandemic, companies are being forced to move operations online, and Salesforce wants to provide more specific solutions for customers who need it.

“Companies in every industry have a digital transformation imperative like never before — and many are accelerating their plans for a digital-first, work-from-anywhere environment. With Salesforce Customer 360 and Vlocity, our customers have the most advanced industries platform as well as tools and expert guidance completely tailored to their specific needs,” Taylor wrote.

Schmaier says the fact that his company’s tooling was already built on top of Salesforce allows them to really hit the ground running without the integration challenges that combining organizations typically face after an acquisition like this one.

“I’ve been involved in various mergers and acquisitions over my 30-year career, and this is the most unique one I’ve ever seen because the products are already 100% integrated because we built our six vertical applications on top of the Salesforce platform. So they’re already 100% Salesforce, which is really kind of amazing. So that’s going to make this that much simpler,” he said.

It’s likely that Salesforce will continue to build on the new division and add additional applications over time given the platform is already in place. “We basically have a platform now inside Salesforce to build verticals. So the cost to build new verticals is a fraction of what it was for us to build the first one because of this industry cloud platform. So we are going to look at opportunities to build new ones but we’re not ready to announce that today. For starters, we are forming this one organization,” Schmaier said.

The company reported a record quarter last Thursday, but light guidance for next quarter spooked investors and the stock was down on Friday (It is up .77% today as of publication). The company does not rest on its laurels though and having a division in place like Salesforce Industries provides a more focused way of dealing with verticals and another possible source of revenue.

Africa Roundup: DHL invests in MallforAfrica, Zipline launches in US, Novastar raises $200M

By Jake Bright

Events in May offered support to the thesis that Africa can incubate tech with global application.

Two startups that developed their business models on the continent — MallforAfrica and Zipline — were tapped by international interests.

DHL acquired a minority stake in Link Commerce, a turn-key e-commerce company that grew out of MallforAfrica.com — a Nigerian digital-retail startup.

Link Commerce offers a white-label solution for doing online-sales in emerging markets.

Retailers can plug into the company’s platform to create a web-based storefront that manages payments and logistics.

Nigerian Chris Folayan founded MallforAfrica in 2011 to bridge a gap in supply and demand for the continent’s consumer markets. While living in the U.S., Folayan noted a common practice among Africans — that of giving lists of goods to family members abroad to buy and bring home.

With MallforAfrica, Folayan aimed to allow people on the continent to purchase goods from global retailers directly online.

The e-commerce site went on to onboard more than 250 global retailers, and now employs 30 people at order processing facilities in Oregon and the U.K.

Folayan has elevated Link Commerce now as the lead company above MallforAfrica.com. He and DHL plan to extend the platform to emerging markets around the world and offer it to companies who want to wrap online stores, payments and logistics solution around their core business.

“Right now the focus is on Africa…but we’re taking this global,” Folayan said.

Another startup developed in Africa, Zipline, was tapped by U.S. healthcare provider Novant for drone delivery of critical medical supplies in the fight against COVID-19.

The two announced a partnership whereby Zipline’s drones will make 32-mile flights on two routes between Novant Health’s North Carolina emergency drone fulfillment center and the nonprofit’s medical center in Huntersville — where front-line healthcare workers are treating coronavirus patients.

Zipline and Novant are touting the arrangement as the first authorized long-range drone logistics delivery flight program in the U.S. The activity has gained approval by the U.S. Federal Aviation Administration and North Carolina’s Department of Transportation.

The story behind the Novant, Zipline UAV collaboration has a twist: The capabilities for the U.S. operation were developed primarily in Africa. Zipline has a test facility in the San Francisco area, but spent several years configuring its drone delivery model in Rwanda and Ghana.

Image Credits: Novant Health

Co-founded in 2014 by Americans Keller Rinaudo, Keenan Wyrobek and Will Hetzler, Zipline designs its own UAVs, launch systems and logistics software for distribution of critical medical supplies.

The company turned to East Africa in 2016, entering a partnership with the government of Rwanda to test and deploy its drone service in that country. Zipline went live with UAV distribution of life-saving medical supplies in Rwanda in late 2016, claiming the first national drone-delivery program at scale in the world.

The company expanded to Ghana in 2016, where in addition to delivering blood and vaccines by drone, it now distributes COVID-19-related medication and lab samples.

In addition to partner Novant Health, Zipline has caught the attention of big logistics providers, such as UPS — which supported (and studied) the startup’s African operations back to 2016.

The presidents of Rwanda and Ghana  — Paul Kagame and Nana Akufo-Addo, respectively — were instrumental in supporting Zipline’s partnerships in their countries. Other nations on the continent, such as Kenya, South Africa and Zambia, continue to advance commercial drone testing and novel approaches to regulating the sector.

African startups have another $100 million in VC to pitch for after Novastar Ventures’ latest raise.

The Nairobi and Lagos-based investment group announced it has closed $108 million in new commitments to launch its Africa Fund II, which brings Novastar’s total capital to $200 million.

With the additional resources, the firm plans to make 12 to 14 investments across the continent, according to Managing Director Steve Beck .

On-demand mobility powered by electric and solar is coming to Africa.

Vaya Africa, a ride-hail mobility venture founded by Zimbabwean mogul Strive Masiyiwa, launched an electric taxi service and charging network in Zimbabwe this week with plans to expand across the continent.

The South Africa-headquartered company is using Nissan Leaf EVs and has developed its own solar-powered charging stations. Vaya is finalizing partnerships to take its electric taxi services on the road to countries that could include Kenya, Nigeria, South Africa and Zambia, Vaya Mobility CEO Dorothy Zimuto told TechCrunch.

The initiative comes as Africa’s on-demand mobility market has been in full swing for several years, with startups, investors and the larger ride-hail players aiming to bring movement of people and goods to digital platforms.

Uber and Bolt have been operating in Africa’s major economies since 2015, where there are also a number of local app-based taxi startups. Over the last year, there’s been some movement on the continent toward developing EVs for ride-hail and delivery use, primarily around motorcycles.

Beyond environmental benefits, Vaya highlights economic gains for passengers and drivers of shifting to electric in Africa’s taxi markets, where fuel costs compared to personal income is generally high for drivers.

Using solar panels to power the charging station network also helps Vaya’s new EV program overcome some of challenges in Africa’s electricity grid.

Vaya is exploring EV options for other on-demand transit applications — from mini-buses to Tuk Tuk taxis.

In more downbeat news in May, Africa-focused tech talent accelerator Andela had layoffs and salary reductions as a result of the economic impact of the COVID-19 crisis, CEO Jeremy Johnson confirmed to TechCrunch.

The compensation and staff reductions of 135 bring Andela’s headcount down to 1,199 employees. None of Andela’s engineers were included in the layoffs.

Backed by $181 million in VC from investors that include the Chan Zuckerberg Initiative, the startup’s client-base is comprised of more than 200 global companies that pay for the African developers Andela selects to work on projects.

There’s been a drop in the demand for Andela’s services, according to Johnson.

More Africa-related stories @TechCrunch  

African tech around the ‘net

Salesforce stock is taking a hit today after lighter guidance in yesterday’s earning’s report

By Ron Miller

In spite of a positive quarter with record revenue that beat analyst estimates, Salesforce stock was taking a hit today because of lighter guidance. Wall Street is a tough audience.

The stock was down $8.29/share or 4.58% as of 2:15 pm ET.

The guidance, which was a projection for next quarter’s earnings, was lighter than what the analysts on Wall Street expected. While Salesforce was projecting revenue for next quarter in the range of $4.89 to $4.90 billion, according to CNBC, analysts had expected $5.03 billion.

When analysts see a future that is a bit worse than what they expected, it usually results in a lower stock price and that’s what we are seeing today. It’s worth noting that Salesforce is operating in the same economy as everyone else and being a bit lighter on your projections in the middle of pandemic seems entirely understandable.

In yesterday’s report CEO Marc Benioff indicated that the company has been offering some customers some flexibility around payment as they navigate the economic fallout of COVID-19, and the company’s operating cash took a bit of a hit because of this.

“Operating cash flow was $1.86 billion, which was largely impacted by delayed payments from customers while sheltering in place and some temporary financial flexibility that we granted to certain customers that were most affected by the COVID pandemic,” president and CFO Mark Hawkins explained in the analyst call.

Still, the company reported revenue of $4.87 billion for the quarter, putting it on a run rate of $19.48 billion.

In a statement, David Hynes, Jr of Canaccord Genuity still remained high on Salesforce. “If you step back and think about what Salesforce is actually providing, tools that help businesses get closer to their customers are perhaps more important than ever in a slower-growth, socially distanced world. We have long reserved a spot for CRM among our top names in large cap, and we feel no differently about that view after what we heard last night. This is a high-quality firm with many levers to growth, and as such, we believe CRM is a good way to get a bit of defensive exposure to the favorable trends at play in software.”

The company is after all still on the path to a $20 billion in revenue. As Hynes points out, overall the kinds of tools that Salesforce offers should remain in demand as companies look for ways to digitally transform much more rapidly in our current situation, and look to companies like Salesforce for help.

Scandit raises $80M as COVID-19 drives demand for contactless deliveries

By Natasha Lomas

Enterprise barcode scanner company Scandit has closed an $80 million Series C round, led by Silicon Valley VC firm G2VP. Atomico, GV, Kreos, NGP Capital, Salesforce Ventures and Swisscom Ventures also participated in the round — which brings its total raised to date to $123M.

The Zurich-based firm offers a platform that combines computer vision and machine learning tech with barcode scanning, text recognition (OCR), object recognition and augmented reality which is designed for any camera-equipped smart device — from smartphones to drones, wearables (e.g. AR glasses for warehouse workers) and even robots.

Use-cases include mobile apps or websites for mobile shopping; self checkout; inventory management; proof of delivery; asset tracking and maintenance — including in healthcare where its tech can be used to power the scanning of patient IDs, samples, medication and supplies.

It bills its software as “unmatched” in terms of speed and accuracy, as well as the ability to scan in bad light; at any angle; and with damaged labels. Target industries include retail, healthcare, industrial/manufacturing, travel, transport & logistics and more.

The latest funding injection follows a $30M Series B round back in 2018. Since then Scandit says it’s tripled recurring revenues, more than doubling the number of blue-chip enterprise customers, and doubling the size of its global team.

Global customers for its tech include the likes of 7-Eleven, Alaska Airlines, Carrefour, DPD, FedEx, Instacart, Johns Hopkins Hospital, La Poste, Levi Strauss & Co, Mount Sinai Hospital and Toyota — with the company touting “tens of billions of scans” per year on 100+ million active devices at this stage of its business.

It says the new funding will go on further pressing on the gas to grow in new markets, including APAC and Latin America, as well as building out its footprint and ops in North America and Europe. Also on the slate: Funding more R&D to devise new ways for enterprises to transform their core business processes using computer vision and AR.

The need for social distancing during the coronavirus pandemic has also accelerated demand for mobile computer vision on personal smart devices, according to Scandit, which says customers are looking for ways to enable more contactless interactions.

Another demand spike it’s seeing is coming from the pandemic-related boom in ‘Click & Collect’ retail and “millions” of extra home deliveries — something its tech is well positioned to cater to because its scanning apps support BYOD (bring your own device), rather than requiring proprietary hardware.

“COVID-19 has shone a spotlight on the need for rapid digital transformation in these uncertain times, and the need to blend the physical and digital plays a crucial role,” said CEO Samuel Mueller in a statement. “Our new funding makes it possible for us to help even more enterprises to quickly adapt to the new demand for ‘contactless business’, and be better positioned to succeed, whatever the new normal is.”

Also commenting on the funding in a supporting statement, Ben Kortlang, general partner at G2VP, added: “Scandit’s platform puts an enterprise-grade scanning solution in the pocket of every employee and customer without requiring legacy hardware. This bridge between the physical and digital worlds will be increasingly critical as the world accelerates its shift to online purchasing and delivery, distributed supply chains and cashierless retail.”

Spruce is eliminating the drudgery of real estate, and has $29M more from Scale to make sales easy

By Danny Crichton

Real estate is one of those classic industries we always talk about in Silicon Valley: multi-trillion dollars in scale in terms of assets and transaction volume, but still relying on good ole’ pen and paper to get anything actually done. A huge number of companies have launched to digitize all aspects of real estate, from calculating valuations to monitoring operational costs and underwriting mortgages.

 

One of those companies is New York City-based Spruce, which was founded back in 2016 to digitize the prodigious paperwork that must be completed during a real estate transaction, including handling title, ensuring all closing docs are completed, and monitoring compliance in every geographical jurisdiction they operate in. The company raised a cumulative $19.1 million in Series A funding across two tranches (my colleague Jon Shieber covered the first tranche back in 2017), and now it is poised for even more growth.

The company is announcing today that it has added $29 million in growth capital led by Alex Niehenke at Scale Venture Partners, with Zigg Capital and Bessemer participating. Niehenke has previously funded companies like Root Insurance, which is focused on offering more competitive car insurance based on realistic data from drivers.

That seems to be roughly the same thesis here with Spruce — better data and digitalization can massively improve the quality and efficiency of legacy industries.

“Instead of using local offices with manual communication and manual processes, we provide [our clients] with API’s that allow them to scale effectively and to provide great digital experiences to their customers,” said Patrick Burns, the cofounder and CEO of the company. Burns had previously done product at wealth management startup Betterment, where he also met his cofounder Andrew Weisgall.

It can be bewildering how all the startups in real estate tech fit together, but this one is simple. Spruce wants to be the workflow tool for real estate transactions, which means that they don’t underwrite mortgages or handle valuations themselves directly. Rather, the platforms wants to be the central nervous system between buyers, sellers, lenders, and all the coterie of other services required to get a transaction closed. The company handles all kinds of transactions from new home purchases by families to investor-to-investor sales.

What’s interesting is that they have two streams of revenue according to Burns. First, they take a closing fee, which is customary in real estate transactions. Spruce argues that its efficiency cuts the price of closing a transaction, ultimately saving its clients money. Second, the company earns a premium as the agent of record for the title insurance policy agreed to in the transaction, which provides a continual stream of revenue from its clients. Similar to closing fees, title insurance broker fees are customary in the industry.

It’s a pretty clear value proposition, and that’s helped it grow transaction volume dramatically. According to the company, it has processed $1.25 billion of transactions on its platform, and its revenue has grown 400% annually. With roughly five million existing homes sold in the U.S. each month, that’s still an exiguous chunk of the market.

The global pandemic underway right now has taken a massive bite out of real estate transactions, particularly for homes, since buyers mostly can’t attend showings due to social distancing policies. The upshot is that those same social distancing policies have also scrambled the traditional real estate closing, which required passels of attorneys and others to work together to get all documents signed. Spruce — and other digitalization startups in the space — are poised to transition more of that legacy paperwork onto their platforms as industry players look for online approaches.

Burns says the capital will be used to expand Spruce’s product and client partnerships. The company currently has three operations “hubs” in New York, Texas, and California.

Salesforce Commerce Cloud releases four quick-start pandemic business packs

By Ron Miller

As we move deeper into the pandemic, it’s clear that the way we conduct business is changing, maybe forever. That means that business has to change too — and fast. But if you’ve never conducted business digitally or only nominally, how do you suddenly transform on the fly?

Salesforce Commerce Cloud CEO Mike Micucci says that they were hearing from customers they needed help. Salesforce decided to build four packages of services very quickly for customers specifically designed to help conduct business during COVID-19. The company even has SI partners who will run everything for the first three months, so these businesses don’t have to do much of anything except turn the key (so to speak).

The four tools are part of the Salesforce Quick Start Commerce Solutions and include Quick Start Commerce for D2C Consumer and Essential Goods to get a site up running fast, Quick Start Commerce for Grocery and Food Service to help restaurants and grocery stores set up online curbside food purchasing systems, Quick Start Commerce for B2B for companies setting up business-to-business sites and Quick Start Commerce for Buy Online and Curbside Pickup, which enables non-food companies to move in-store inventories online, and arrange curbside pick up systems.

Quick Start Commerce for Buy Online and Curbside Pickup. Image Credit: Salesforce

Micucci says that online commerce has been operating at a holiday kind of surge since we went into lockdown 10 weeks ago and customers have been clamoring for help. He said that they responded initially with a series of materials on best practices for getting online quickly, but customers wanted something more concrete.

“We needed to bring the software to bear on this. So we designed these four quick start packages. Essentially, the whole model was that we need to get you running in weeks, not months. The goal was literally [to get you up in] two weeks, and included software, obviously our cloud-based commerce and whatnot, but more importantly it included a package of services,” Micucci explained.

To build that package, it involved more than just Salesforce itself. It needed to get partners involved too to include payment, shipping, order management and other related kinds of tooling, depending on the package requirements.

Finally, they wanted to even remove the site management headaches from the customer, at least initially. Understanding that it would be difficult for businesses to train people internally to manage the system at this time, they got systems integrators involved to do it for them for the first three months. If the customer wants to take over sooner, they can, and if they want the SI to continue to manage the whole thing, that’s fine too.

As Salesforce itself moved out of the office and home, it was observing that online sales were spiking, and Micucci says after a couple of weeks of making sure the workforce was settled, he started hearing from customers about the problems they were having conducting business, and they went to work. The first of these packages came together in just a couple of weeks including partners.

They got them out to customers for quick Beta testing and refinement to the extent they could, but the guiding principle in producing these packages was speed over perfection. They realize the products will very likely require further refinement as they get out into the field, but they learned you can produce a package to meet a pressing customer need, and do it quickly, and that’s a lesson that will likely resonate even after this crisis is over.

Data shows which tech roles might be most vulnerable amid layoffs

By Natasha Mascarenhas

Layoffs are having a big impact on industries across the board due to COVID-19. This week alone news came out of massive cuts for TripAdvisor, Lyft, and reportedly Juul and Uber.

But according to data tracker Layoffs.fyi, the cuts have affected certain job roles more than others.

Sales and customer success roles are the most affected by post-coronavirus startup layoffs, crowd-sourced data shows. Other top categories include engineering and operations roles. 

Earlier this month, restaurant tech startup Toast cut 50 percent of staff. About 70% of those laid off were in the sales or customer success roles. In restaurant review platform Yelp’s layoffs, 67% of cut positions were in the same bucket.

Equity management startup Carta laid off people, too, and about 47 percent of those cuts were in the sales or customer success roles.

It is not hard to make sense of why sales and marketing roles are the most impacted. The very function of these jobs is tied to a healthy market. 

Sales and new deals have slowed or halted altogether for many businesses during the COVID-19 pandemic. This is because social distancing, and overall economic weariness, might not have people spending as much as they normally would have.

The cuts filter out disproportionately to other startup ecosystems, as sales and marketing roles are often based in satellite offices. 

But the cuts don’t just impact sales. In a number of cases, layoffs in one department adversely impact all departments of the company. For example, Carta’s CEO Henry Ward noted that reductions across sales, marketing, onboarding and support will likely seep into other roles as well.  

“As those departments become smaller, many of the teams that support those departments like recruiting, HR, operations, and parts of R&D, have to downsize with them,” Ward wrote in a Medium post. “Even though the analysis starts with customers, it quickly starts affecting all parts of the organization. This makes sense. We exist only because our customers exist and allow us to serve them. And when our customers suffer we suffer too.”

The graph below shows a makeup of roles impacted by COVID-19 related layoffs.

Engineers aren’t immune either. According to the report, engineers historically land high, competitive salaries versus sales roles, which largely are based on commission. In some cases, it means that a company trying to dial back costs needs to look at the highest-paid roles and slim accordingly. 

In Groupon and Eventbrite, engineering roles were the majority of positions that were cut, per Layoffs.fyi. Operations roles were also among the most cut for companies like Ritual and Turo. 

Check out the layoff tracker tool here. Tip us of any cuts you’re hearing or experiences at tips@techcrunch.com, or tweet me at @nmasc_.

AWS launches Amazon AppFlow, its new SaaS integration service

By Frederic Lardinois

AWS today launched Amazon AppFlow, a new integration service that makes it easier for developers to transfer data between AWS and SaaS applications like Google Analytics, Marketo, Salesforce, ServiceNow, Slack, Snowflake and Zendesk. Like similar services, including Microsoft Azure’s Power Automate, for example, developers can trigger these flows based on specific events, at pre-set times or on-demand.

Unlike some of its competitors, though, AWS is positioning this service more as a data transfer service than a way to automate workflows, and, while the data flow can be bi-directional, AWS’s announcement focuses mostly on moving data from SaaS applications to other AWS services for further analysis. For this, AppFlow also includes a number of tools for transforming the data as it moves through the service.

“Developers spend huge amounts of time writing custom integrations so they can pass data between SaaS applications and AWS services so that it can be analysed; these can be expensive and can often take months to complete,” said AWS principal advocate Martin Beeby in today’s announcement. “If data requirements change, then costly and complicated modifications have to be made to the integrations. Companies that don’t have the luxury of engineering resources might find themselves manually importing and exporting data from applications, which is time-consuming, risks data leakage, and has the potential to introduce human error.”

Every flow (which AWS defines as a call to a source application to transfer data to a destination) costs $0.001 per run, though, in typical AWS fashion, there’s also cost associated with data processing (starting at 0.02 per GB).

“Our customers tell us that they love having the ability to store, process, and analyze their data in AWS. They also use a variety of third-party SaaS applications, and they tell us that it can be difficult to manage the flow of data between AWS and these applications,” said Kurt Kufeld, vice president, AWS. “Amazon AppFlow provides an intuitive and easy way for customers to combine data from AWS and SaaS applications without moving it across the public internet. With Amazon AppFlow, our customers bring together and manage petabytes, even exabytes, of data spread across all of their applications — all without having to develop custom connectors or manage underlying API and network connectivity.”

At this point, the number of supported services remains comparatively low, with only 14 possible sources and four destinations (Amazon Redshift and S3, as well as Salesforce and Snowflake). Sometimes, depending on the source you select, the only possible destination is Amazon’s S3 storage service.

Over time, the number of integrations will surely increase, but for now, it feels like there’s still quite a bit more work to do for the AppFlow team to expand the list of supported services.

AWS has long left this market to competitors, even though it has tools like AWS Step Functions for building serverless workflows across AWS services and EventBridge for connections applications. Interestingly, EventBridge currently supports a far wider range of third-party sources, but as the name implies, its focus is more on triggering events in AWS than moving data between applications.

SMB mentorship platform Ureeka raises $8.6M, will facilitate grant programs for Facebook, Salesforce

By Jordan Crook

The best founders seek out great mentors and guidance from folks who know best, but during the coronavirus pandemic, asking for help when it’s needed is critical for all entrepreneurs.

Ureeka, a startup founded by Melissa Bradley, David Jakubowski and Rob Gatto, is looking to provide that mentorship and guidance through their platform, which just closed on an $8.6 million funding round from Bullpen Capital, Chicago Ventures and Salesforce Ventures.

“There is an intentionality in our business to go after what we see as the fastest growing, largest and most interesting market opportunity, which is not the Harvard and MIT pedigree, but underrepresented entrepreneurs,” said Bradley. “Small and medium businesses account for 99 percent of all business in this country and there has been a real missed opportunity around serving them.”

The company says that female led venture-backed business performance is 63 percent higher than investments in all male teams, while the same businesses have 12 percent higher revenue and use 33 percent less capital, with a 15-25 percent lower failure rate. Since the recent recessions, businesses owned by people of color are the fastest growing segment, with 38 percent growth between 2008 and 2012, according to Ureeka. Meanwhile, Hispanic-owned businesses have seen 46 percent growth from 2007 to 2012, with $700 billion in sales globally, creating 8 million jobs with a total payroll of $254 billion, the startup says.

Ureeka pairs these entrepreneurs with mentors and coaches to get answers to their most pressing questions. The idea for the startup came when the cofounders were judging a pitch competition in Michigan and got to talking about the challenges associated with starting a company, particularly for underrepresented founders.

The Ureeka founders noted that black, hispanic and women founders begin businesses with approximately half of the capital that white men do, on average, and that loan rejection is three times higher for minority entrepreneurs than their white counterparts.

“In talking with Melissa, I realized that there are some basic things I was taking for granted,” said Jakubowski, formerly Head of Data & Analytics, Emerging Business & Partnerships at Facebook . “For example, I could pick up the phone and have an answer to my question in 30 minutes.”

After testing for months, Jakubowski and Bradley (Managing Director of Project 500, adjunct professor at Georgetown’s Business school and presidential appointee under both President Clinton and President Obama) launched Ureeka to give access to mentorship to underrepresented small and medium business owners, agnostic of sector or region.

These entrepreneurs can hop on the platform with a question and get an answer from a mentor or coach in under two hours. Mentors, experts from just about any sector of business, give their time to the platform for free. Coaches, on the other hand, are paid contractors (many of whom have their own business or operational position at a large company). Ureeka members can also start up conversations with other members, and access on-demand webinar-style content on topics that are common to the whole community, such as adapting to the coronavirus pandemic.

Ureeka has more than 200 mentors on the platform, many of whom hail from companies like Facebook, Snap, Salesforce, Google, and Adobe, among others. Ureeka members can also pay a premium ($3,000/year) to have access to a dedicated coach, who can then follow along with the various questions and issues that arise and ultimately skip over the exposition and context-gathering part of the conversation. Those that opt for a dedicated coach get two hours each month of one-to-one video chat with their coach.

Alongside the funding announcement, Ureeka is also announcing that it will be facilitating the SMB grant programs from Facebook and Salesforce. Facebook’s grant program will provide $100 million to SMBs in the United States, and Salesforce’s Small Business Grants will provide $10,000 individually to SMBs.

According to the company, Ureeka members see 2x revenue growth once they’re connected to mentors and coaches, and the founders noted that many Ureeka members graduate to mentors or coaches and pay it forward to new members.

The for-profit business charges $200/year for members to join, and the company takes less than 15 percent margin. Ureeka is also waiving its fee for all businesses impacted by coronavirus through 2020.

The company also has a vendor partnership program, helping members find the right vendor for their need without being overwhelmed by thousands of Google search results. In fact, many vendors are Ureeka members themselves, creating a virtuous circle within the Ureeka community. Big corporations that would like to be included in the Ureeka vendor program must provide a dedicated line of communication for the Ureeka community.

Sales startup People.ai lays off 18% of staff, raises debt round amid COVID-19 uncertainty

By Ingrid Lunden

Another startup has turned to downsizing and fund raising to help weather the uncertainty around the economy amid the global coronavirus health pandemic. People.ai, a predictive sales startup backed by Andreessen Horowitz, Iconic, Lightspeed and other investors and last year valued at around $500 million, has laid off around 30 people, working out to about 18% of staff, TechCrunch has learned and confirmed.

Alongside that, the company has quietly raised a debt round in the “tens of millions of dollars” to make strategic investments in new products and potentially other moves.

Oleg Rogynskyy, the founder and CEO, said the layoffs were made not because business has slowed down, but to help the company shore up for whatever may lie ahead.

“We still have several years of runway with what we’ve raised,” he noted (it has raised just under $100 million in equity to date). “But no one knows the length of the downturn, so we wanted to make sure we could sustain the business through it.”

Specifically, the company is reducing its international footprint — now, big European customers that it already has on its books will now be handled from its US offices rather than local outposts — and it is narrowing its scope to focus more on the core verticals that make up the majority of its current customer base.

He gave as an example the financial sector. “We create huge value for financial services industry but have moved the functionality for them out to next year so that we can focus on our currently served industries,” he said.

People.ai’s software tracks the full scope of communication touch points between sales teams and customers, supposedly negating the tedious manual process of activity logging for SDRs. The company’s machine learning tech is also meant to generate the average best way to close a deal – educating customer success teams about where salespeople may be deviating from a proven strategy.

People.ai is one of a number of well-funded tech startups that is making hard choices on business strategy, costs and staffing in the current climate.

Layoffs.fyi, which has been tallying those losing their jobs in the tech industry in the wake of the Coronavirus (it’s based primarily on public reports with a view to providing lists of people for hire), says that as of today, there have been nearly 25,000 people laid off from 258 tech startups and other companies. With companies like Opendoor laying off some 600 people earlier this week, the numbers are ratcheting up quickly: just seven days ago, the number was just over 16,000.

In that context, People.ai cutting 30 may be a smaller increment in the bigger picture (even if for the individuals impacted, it’s just as harsh of an outcome). But it also underscores one of the key business themes of the moment.

Some businesses are getting directly hit by the pandemic — for example, house sales and transportation have all but halted, leaving companies in those categories scrambling to figure out how to get through the coming weeks and months and prepare for a potentially long haul of life and consumer and business behaviour not looking like it did before January.

But other businesses like People.ai, which provides predictive sales tools to help salespeople do their jobs better, is (for now at least) falling into that category of IT is still in demand, perhaps even more than ever in a shrinking economy. In People.ai’s case, software to help salespeople have better sales conversations and ultimately conversions at a time when many customers might not be as quick to buy things, is an idea that sells right now (so to speak).

Rogynskyy noted that more than 90% of customers that are up for renewal this quarter have either renewed or expanded their contracts, and it has been adding on new large customers in recent weeks and months.

The company has also just closed a round of debt funding in the “tens of millions” of dollars to use for strategic investments.

It’s not disclosing the lender right now, but it opted for debt in part because it still has most of its most recent round — $60 million raised in May 2019 led by Iconic — in the bank. Although investors would have been willing to invest in another equity round, given that the company is in a healthy position right now, Rogynskyy said he preferred the debt option to have the money without the dilution that equity rounds bring.

The money will be used for strategic purposes and considering how to develop the product in the current climate. For example, with most people now working from home, and that looking to be a new kind of “normal” in office life (if not all the time, at least more of the time), that presents a new opportunity to develop products tailored for these remote workers.

There have been some M&A moves in tech in the last couple of weeks, and from what we understand People.ai has been approached as well as a possible buyer, target and partner. All of that for now is not something the company is considering, Rogynskyy said. “We’re focused on our own future growth and health and making sure we are here for a long time.”

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