Today, Amazon Web Services is a mainstay in the cloud infrastructure services market, a $60 billion juggernaut of a business. But in 2008, it was still new, working to keep its head above water and handle growing demand for its cloud servers. In fact, 15 years ago last week, the company launched Amazon EC2 in beta. From that point forward, AWS offered startups unlimited compute power, a primary selling point at the time.
EC2 was one of the first real attempts to sell elastic computing at scale — that is, server resources that would scale up as you needed them and go away when you didn’t. As Jeff Bezos said in an early sales presentation to startups back in 2008, “you want to be prepared for lightning to strike, […] because if you’re not that will really generate a big regret. If lightning strikes, and you weren’t ready for it, that’s kind of hard to live with. At the same time you don’t want to prepare your physical infrastructure, to kind of hubris levels either in case that lightning doesn’t strike. So, [AWS] kind of helps with that tough situation.”
An early test of that value proposition occurred when one of their startup customers, Animoto, scaled from 25,000 to 250,000 users in a 4-day period in 2008 shortly after launching the company’s Facebook app at South by Southwest.
At the time, Animoto was an app aimed at consumers that allowed users to upload photos and turn them into a video with a backing music track. While that product may sound tame today, it was state of the art back in those days, and it used up a fair amount of computing resources to build each video. It was an early representation of not only Web 2.0 user-generated content, but also the marriage of mobile computing with the cloud, something we take for granted today.
For Animoto, launched in 2006, choosing AWS was a risky proposition, but the company found trying to run its own infrastructure was even more of a gamble because of the dynamic nature of the demand for its service. To spin up its own servers would have involved huge capital expenditures. Animoto initially went that route before turning its attention to AWS because it was building prior to attracting initial funding, Brad Jefferson, co-founder and CEO at the company explained.
“We started building our own servers, thinking that we had to prove out the concept with something. And as we started to do that and got more traction from a proof-of-concept perspective and started to let certain people use the product, we took a step back, and were like, well it’s easy to prepare for failure, but what we need to prepare for success,” Jefferson told me.
Going with AWS may seem like an easy decision knowing what we know today, but in 2007 the company was really putting its fate in the hands of a mostly unproven concept.
“It’s pretty interesting just to see how far AWS has gone and EC2 has come, but back then it really was a gamble. I mean we were talking to an e-commerce company [about running our infrastructure]. And they’re trying to convince us that they’re going to have these servers and it’s going to be fully dynamic and so it was pretty [risky]. Now in hindsight, it seems obvious but it was a risk for a company like us to bet on them back then,” Jefferson told me.
Animoto had to not only trust that AWS could do what it claimed, but also had to spend six months rearchitecting its software to run on Amazon’s cloud. But as Jefferson crunched the numbers, the choice made sense. At the time, Animoto’s business model was for free for a 30 second video, $5 for a longer clip, or $30 for a year. As he tried to model the level of resources his company would need to make its model work, it got really difficult, so he and his co-founders decided to bet on AWS and hope it worked when and if a surge of usage arrived.
That test came the following year at South by Southwest when the company launched a Facebook app, which led to a surge in demand, in turn pushing the limits of AWS’s capabilities at the time. A couple of weeks after the startup launched its new app, interest exploded and Amazon was left scrambling to find the appropriate resources to keep Animoto up and running.
Dave Brown, who today is Amazon’s VP of EC2 and was an engineer on the team back in 2008, said that “every [Animoto] video would initiate, utilize and terminate a separate EC2 instance. For the prior month they had been using between 50 and 100 instances [per day]. On Tuesday their usage peaked at around 400, Wednesday it was 900, and then 3,400 instances as of Friday morning.” Animoto was able to keep up with the surge of demand, and AWS was able to provide the necessary resources to do so. Its usage eventually peaked at 5000 instances before it settled back down, proving in the process that elastic computing could actually work.
At that point though, Jefferson said his company wasn’t merely trusting EC2’s marketing. It was on the phone regularly with AWS executives making sure their service wouldn’t collapse under this increasing demand. “And the biggest thing was, can you get us more servers, we need more servers. To their credit, I don’t know how they did it — if they took away processing power from their own website or others — but they were able to get us where we needed to be. And then we were able to get through that spike and then sort of things naturally calmed down,” he said.
The story of keeping Animoto online became a main selling point for the company, and Amazon was actually the first company to invest in the startup besides friends and family. It raised a total of $30 million along the way, with its last funding coming in 2011. Today, the company is more of a B2B operation, helping marketing departments easily create videos.
While Jefferson didn’t discuss specifics concerning costs, he pointed out that the price of trying to maintain servers that would sit dormant much of the time was not a tenable approach for his company. Cloud computing turned out to be the perfect model and Jefferson says that his company is still an AWS customer to this day.
While the goal of cloud computing has always been to provide as much computing as you need on demand whenever you need it, this particular set of circumstances put that notion to the test in a big way.
Today the idea of having trouble generating 3,400 instances seems quaint, especially when you consider that Amazon processes 60 million instances every day now, but back then it was a huge challenge and helped show startups that the idea of elastic computing was more than theory.
TechnologyOne, an Australian SaaS enterprise, has agreed to acquire UK-based higher education software provider Scientia for £12 million /$16.6 million in cash.
TechnologyOne claims to have 75% of Higher Education institutions in Australia using its software, while Scientia claims 50% market share in the UK.
The acquisition includes an initial payment of £6m and further payments.
Adrian Di Marco, TechnologyOne founder and Executive Chairman said: “This is our company’s first international acquisition and it demonstrates our deep commitment to serving the higher education sector and the UK market. The unique IP and market-leading functionality of Scientia’s product supports our vision of delivering enterprise software that is incredibly easy to use.”
Commenting, Michelle Gillespie, Registrar and Director of Student Administration and Library Services at Swinburne University of Technology said: “The one thing that students care most about is their timetable. Being able to fully integrate a schedule into the full student experience is very important, and an exciting step for those universities – like Swinburne – that use TechnologyOne’s student management system.”
Over the previous two or three years we’ve seen an explosion of new debit and credit card products come to market from consumer and B2B fintech startups, as well as companies that we might not traditionally think of as players in the financial services industry.
On the consumer side, that means companies like Venmo or PayPal offering debit cards as a new way for users to spend funds in their accounts. In the B2B space, the availability of corporate card issuing by startups like Brex and Ramp has ushered in new expense and spend management options. And then there is the growth of branded credit and debit cards among brands and sports teams.
But if your company somehow hasn’t yet found its way to launch a debit or credit card, we have good news: It’s easier than ever to do so and there’s actual money to be made. Just know that if you do, you’ve got plenty of competition and that actual customer usage will probably depend on how sticky your service is and how valuable the rewards are that you offer to your most active users.
To learn more about launching a card product, TechCrunch spoke with executives from Marqeta, Expensify, Synctera and Cardless about the pros and cons of launching a card product. So without further ado, here are all the reasons you should think about doing so, and one big reason why you might not want to.
Probably the biggest reason we’ve seen so many new fintech and non-fintech companies rush to offer debit and credit cards to customers is simply that it’s easier than ever for them to do so. The launch and success of businesses like Marqeta has made card issuance by API developer friendly, which lowered the barrier to entry significantly over the last half-decade.
“The reason why this is happening is because the ‘fintech 1.0 infrastructure’ has succeeded,” Salman Syed, Marqeta’s SVP and GM of North America, said. “When you’ve got companies like [ours] out there, it’s just gotten a lot easier to be able to put a card product out.”
While noting that there have been good options for card issuance and payment processing for at least the last five or six years, Expensify Chief Operating Officer Anu Muralidharan said that a proliferation of technical resources for other pieces of fintech infrastructure has made the process of greenlighting a card offering much easier over the years.
Bright Cellars, a six-year-old subscription-based wine seller has, like many upstarts, evolved over time. While it once sent its club members third-party wines that fit their particular profiles, Milwaukee, Wisconsin-based Bright Cellars says it’s now amassing enough data about its customers that it no longer sells wines made by other brands. Instead, while some of its “original” offerings are admittedly sold by other labels under different names, it is increasingly finding success by directing its winemaker partners to tweak the recipe, so to speak.
“We’re optimizing wine like you might optimize a more digital product,” says co-founder and CEO, Richard Yau, a San Francisco native whose startup entered into a regional accelerator program early on and stayed, though the company is now largely decentralized.
We talked earlier today with Yau about that shift, which investors are supporting with $11.2 million in Series B funding, led by Cleveland Avenue, with participation from earlier backers Revolution Ventures and Northwestern Mutual. (The company has now raised roughly $20 million altogether).
Yau also talked about industry trends that he’s seeing because of all that data collection.
TC: You’re building a portfolio of wines. What does that mean?
RY: We don’t own any land. We’re working primarily with suppliers [as do big companies like Gallo and Constellation], but at a larger scale than before, so we now get to shape what wines taste like and look like, and we can optimize across variables like how sweet should this wine be? How acidic? What do we want its color and brand and label to look like and which segment of our customers will really enjoy this wine the most?
TC: What’s one of your concoctions?
RY: We have a sparkling wine that’s produced in the Champagne method — not a Champagne wine; it’s a domestic wine — using grape varietals that no one uses for sparkling wine, and it’s one of the top-rated wines on our platform. Sparkling wine has been really good for us.
TC: How many subscribers do you have?
RY: We can’t share that, but we saw an acceleration in not just new subscribers throughout the pandemic but also in terms of seeing a larger share of [customers’] wallets going to D2C, and that impacted us pretty positively. Even as things eased up over the summer, we saw that people were cooking and eating at home more [and drinking wine].
TC: What’s the average price of a bottle of wine on the platform?
RY: $20 to $25.
TC: Where are your grape suppliers?
RY: A lot are on the West Coast, in Washington and California, but we also have grape suppliers internationally, including in South America and Europe.
TC: How many wines do you offer, and how long do you trial a wine?
RY: We’ve tested around 600, and at any given time, we’ll have 40 to 50 wines on the platform. We don’t stock everything forever; those that don’t do as well, we basically eliminate.
TC: A lot of D2C brands eventually branch into real-world locations. You aren’t doing that. Why not?
RY: It’s possible that we might at some point, but we like being D2C and it makes a lot of sense in a world where our members now work from home and are home to receive packages. It lines up with e-commerce trends in general. If you’re not buying your groceries at the store anymore, you aren’t buying wines at the store, either.
TC: From where are these bottles shipped?
RY: From a variety of places, but primarily from Santa Rosa [in the Bay Area].
TC: Have you seen the impact the weather is having on California winemakers, some of whom are now spraying sunscreen on their grapes to protect them?
RY: [Climate change] has certainly affected the wine industry. One of the fortunate things about us is we have flexibility in the suppliers we’re working with, so from a business-health perspective, we haven’t been as affected by that. Because a lot of our operations are in California, we did a couple of years ago have some interruptions with distribution where we weren’t able to ship some days; we were also impacted by warm temperatures. But fortunately, so far for this year, we haven’t had any operational or supply-chain disruptions.
TC: Have you been approached by one of legacy firms about a partnership or acquisition?
RY: We’ve had conversations, more in terms of partnerships because we have lots of data and can help them. For example, we can launch a new wine and get feedback almost like a focus group to figure out who likes what. We can split test two different blends for a wine and figure out which does better. That’s where conversations with legacy wine companies have happened.
TC: So they’d pay you for your data.
RY: We’re not opposed to selling data in the future, but we’ve approached it more like, here’s an opportunity to learn about how innovation works at a larger wine company. We don’t expect to be able to do what Constellation does well — with its large salesforce and distributors in every state — but what we can do in a complementary way is understand the consumer.
TC: What have you learned that might surprise outsiders?
RY: Petite sirah [offerings] do as well, if not better than, cabernet and pinot noir on the platform. Cab and pinot are fully 50 times the market size of petite sirah, but we see that our members really like it.
People also like merlot a lot more than they think — pretty much across all demographics. People like to hate merlot, but when we look at red blends that do well . . .
TC: What do people have against merlot?
RY: [Laughs.] Have you ever seen “Sideways?” That has something to do with it, still. Meanwhile, pinot noir remains popular, but people don’t like it as much as [other wine sellers] think.
Itamar Jobani was a software developer working for a medical company and “hated that time of the month” when he had to use the company’s chosen reimbursement tool.
“It was full of friction and as part of the company’s wellness team, I felt an urge to take care of the employee experience and find a better tool,” Jobani told TechCrunch. “I looked for something, but didn’t find it, so I tried to build it myself.”
What resulted was PayEm, an Israeli company he founded with Omer Rimoch in 2019 to be a spend and procurement platform for high-growth and multinational organizations. Today, it announced $27 million in funding that includes $7 million in seed funding, led by Pitango First and NFX, with participation by LocalGlobe and Fresh Fund, as well as $20 million in Series A funding led by Glilot+.
The company’s technology automates the reimbursement, procurement, accounts payable and credit card workflows to manage all of the requests and invoices, while also creating bills and sending payments to over 200 territories in 130 currencies.
It gives company finance teams a real-time look at what items employees are asking for funds to buy, and what is actually being spent. For example, teams can submit a request and go through an approval flow that can be customized with purchasing codes tied to a description of the transaction. At the same time, all transactions are continuously reconciled versus having to spend hours at the end of the month going through paperwork.
“Organizations are running in a more democratized way with teams buying things on behalf of the organization,” Jobani said. “We built a platform to cater to those needs, so it’s like a disbursement platform instead of a finance team always being in charge.”
The global B2B payments market is valued at $120 trillion annually and is expected to reach $200 trillion by 2028, according to payment industry newsletter Nilson Report. PayEm is among many B2B payments startups attracting venture capital — for example, last month, Nium announced a $200 million in Series D funding at a $1 billion valuation. Paystand raised $50 million in Series C funding to make B2B payments cashless, while Dwolla raised $21 million for its API that allows companies to build and facilitate fast payments.
Meanwhile, PayEm itself saw accelerated growth in the second quarter of 2021, including increasing its transaction volume by four times over the previous quarter and generating millions of dollars in revenue. It now boasts a list of hundreds of customers like Fiverr, JFrog and Next Insurance. It also launched new features like the ability to create corporate cards.
The company, which also has an office in New York, has 40 employees currently, and the new funds will enable the company to triple its headcount, focusing on hiring in the United States, and to bring additional features and payment capabilities to market.
“Each person can have a budget and a time frame for making the purchase, while accounting still feels in control,” Jobani added. “Everyone now has the full context and the right budget line item.”
In the customer service industry, your accent dictates many aspects of your job. It shouldn’t be the case that there’s a “better” or “worse” accent, but in today’s global economy (though who knows about tomorrow’s) it’s valuable to sound American or British. While many undergo accent neutralization training, Sanas is a startup with another approach (and a $5.5 million seed round): using speech recognition and synthesis to change the speaker’s accent in near real time.
The company has trained a machine learning algorithm to quickly and locally (that is, without using the cloud) recognize a person’s speech on one end and, on the other, output the same words with an accent chosen from a list or automatically detected from the other person’s speech.
It slots right into the OS’s sound stack so it works out of the box with pretty much any audio or video calling tool. Right now the company is operating a pilot program with thousands of people in locations from the U.S. and U.K. to the Philippines, India, Latin America and others. Accents supported will include American, Spanish, British, Indian, Filipino and Australian by the end of the year.
To tell the truth, the idea of Sanas kind of bothered me at first. It felt like a concession to bigoted people who consider their accent superior and think others below them. Tech will fix it … by accommodating the bigots. Great!
But while I still have a little bit of that feeling, I can see there’s more to it than this. Fundamentally speaking, it is easier to understand someone when they speak in an accent similar to your own. But customer service and tech support is a huge industry and one primarily performed by people outside the countries where the customers are. This basic disconnect can be remedied in a way that puts the onus of responsibility on the entry-level worker, or one that puts it on technology. Either way the difficulty of making oneself understood remains and must be addressed — an automated system just lets it be done more easily and allows more people to do their job.
It’s not magic — as you can tell in this clip, the character and cadence of the person’s voice is only partly retained and the result is considerably more artificial sounding:
But the technology is improving and like any speech engine, the more it’s used, the better it gets. And for someone not used to the original speaker’s accent, the American-accented version may very well be more easily understood. For the person in the support role, this likely means better outcomes for their calls — everyone wins. Sanas told me that the pilots are just starting so there are no numbers available from this deployment yet, but testing has suggested a considerable reduction of error rates and increase in call efficiency.
It’s good enough at any rate to attract a $5.5 million seed round, with participation from Human Capital, General Catalyst, Quiet Capital and DN Capital.
“Sanas is striving to make communication easy and free from friction, so people can speak confidently and understand each other, wherever they are and whoever they are trying to communicate with,” CEO Maxim Serebryakov said in the press release announcing the funding. It’s hard to disagree with that mission.
While the cultural and ethical questions of accents and power differentials are unlikely to ever go away, Sanas is trying something new that may be a powerful tool for the many people who must communicate professionally and find their speech patterns are an obstacle to that. It’s an approach worth exploring and discussing even if in a perfect world we would simply understand one another better.
On the heels of Heroes announcing a $200 million raise earlier today, to double down on buying and scaling third-party Amazon Marketplace sellers, another startup out of London aiming to do the same is announcing some significant funding of its own. Olsam, a roll-up play that is buying up both consumer and B2B merchants selling on Amazon by way of Amazon’s FBA fulfillment program, has closed $165 million — a combination of equity and debt that it will be using to fuel its M&A strategy, as well as continue building out its tech platform and to hire more talent.
Apeiron Investment Group — an investment firm started by German entrepreneur Christian Angermayer (known first for biopharmaceuticals, then investing and crypto, including playing a role in SoftBank investing in Wirecard) — led the Series A equity round, with Elevat3 Capital (another Angermayer firm that has a strategic partnership with Founders Fund and Peter Thiel) also participating. North Wall Capital was behind the debt portion of the deal. We have asked and Olsam is only disclosing the full amount raised, not the amount that was raised in equity versus debt. Valuation is also not being disclosed.
Being an Amazon roll-up startup from London that happens to be announcing a fundraise today is not the only thing that Olsam has in common with Heroes. Like Heroes, Olsam is also founded by brothers.
Sam Horbye previously spent years working at Amazon, including building and managing the company’s Business Marketplace (the B2B version of the consumer Marketplace); while co-founder Ollie Horbye had years of experience in strategic consulting and financial services.
Between them, they had also built and sold previous marketplace businesses, and they believe that this collective experience gives Olsam — a portmanteau of their names, “Ollie” and “Sam” — a leg up when it comes to building relationships with merchants; identifying quality products (versus the vast seas of search results that often feel like they are selling the same inexpensive junk as each other); and understanding merchants’ challenges and opportunities, and building relationships with Amazon and understanding how the merchant ecosystem fits into the e-commerce giant’s wider strategy.
Olsam is also taking a slightly different approach when it comes to target companies, by focusing not just on the usual consumer play, but also on merchants selling to businesses. B2B selling is currently one of the fastest-growing segments in Amazon’s Marketplace, and it is also one of the more overlooked by consumers.”It’s flying under the radar,” Ollie said.
“The B2B opportunity is very exciting,” Sam added. “A growing number of merchants are selling office supplies or more random products to the B2B customer.”
Estimates vary when it comes to how many merchants there are selling on Amazon’s Marketplace globally, ranging anywhere from 6 million to nearly 10 million. Altogether those merchants generated $300 million in sales (gross merchandise value), and its growing by 50% each year at the moment.
And consolidating sellers — in order to achieve better economies of scale around supply chains, marketing tools and analytics, and more — is also big business. Olsam estimates that some $7 billion has been spent cumulatively on acquiring these businesses, and there are more out there: Olsam estimates that there are some 3,000 businesses in the UK alone making more than $1 million each in sales on Amazon’s platform.
(And to be clear, there are a number of other roll-up startups beyond Heroes also eyeing up that opportunity. Raising hundreds of millions of dollars in aggregate, others have made moves this year include Suma Brands ($150 million); Elevate Brands ($250 million); Perch ($775 million); factory14 ($200 million); Thrasio (currently probably the biggest of them all in terms of reach and money raised and ambitions), Heyday, The Razor Group, Branded, SellerX, Berlin Brands Group (X2), Benitago, Latin America’s Valoreo and Rainforest and Una Brands out of Asia.)
“The senior team behind Olsam is what makes this business truly unique,” said Angermayer in a statement. “Having all been successful in building and selling their own brands within the market and having worked for Amazon in their marketplace team – their understanding of this space is exceptional.”
The digital transformation currently sweeping society has likely reached your favorite local restaurant.
Since 2013, Boston-based Toast has offered bars and eateries a software platform that lets them manage orders, payments and deliveries.
Over the last year, its customers have processed more than $38 billion in gross payment volume, so Alex Wilhelm analyzed the company’s S-1 for The Exchange with great interest.
“Toast was last valued at just under $5 billion when it last raised, per Crunchbase data,” he writes. “And folks are saying that it could be worth $20 billion in its debut. Does that square with the numbers?”
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Airbnb, DoorDash and Coinbase each debuted at past Y Combinator Demo Days; as of this writing, they employ a combined 10,000 people.
Today and tomorrow, TechCrunch reporters will cover the proceedings at YC’s Summer 20201 Demo Day. In addition to writing up founder pitches, they’ll also rank their favorites.
Even remotely, I can feel a palpable sense of excitement radiating from our team — anything can happen at YC Demo Day, so sign up for Extra Crunch to follow the action.
Thanks very much for reading; I hope you have an excellent week.
Senior Editor, TechCrunch
Image Credits: Ron Miller/TechCrunch
In August 2006, AWS activated its EC2 cloud-based virtual computer, a milestone in the cloud infrastructure giant’s development.
“You really can’t overstate what Amazon was able to accomplish,” writes enterprise reporter Ron Miller.
In the 15 years since, EC2 has enabled clients of any size to test and run their own applications on AWS’ virtual machines.
To learn more about a fundamental technological shift that “would help fuel a whole generation of startups,” Ron interviewed EC2 VP Dave Brown, who built and led the Amazon EC2 Frontend team.
Image Credits: Jasmin Merdan (opens in a new window)/ Getty Images
Most managers agree that OKRs foster transparency and accountability, but running a team effectively has different challenges when workers are attending all-hands meetings from their kitchen tables.
Instead of just discussing key metrics before board meetings or performance reviews, make them part of the day-to-day culture, recommends Jeremy Epstein, Gtmhub’s CMO.
“Strengthen your team by creating authentic workplace transparency using numbers as a universal language and providing meaning behind your team’s work.”
Image Credits: Getty Images under an Andrii Yalanskyi (opens in a new window) license
Many founders must overcome a few emotional hurdles before they’re comfortable pitching a potential investor face-to-face.
To alleviate that pressure, Unicorn Capital founder Evan Fisher recommends that entrepreneurs use pre-pitch meetings to build and strengthen relationships before asking for a check:
“This is the ‘we actually aren’t looking for money; we just want to be friends for now’ pitch that gets you on an investor’s radar so that when it’s time to raise your next round, they’ll be far more likely to answer the phone because they actually know who you are.”
Pre-pitches are good for more than curing the jitters: These conversations help founders get a better sense of how VCs think and sometimes lead to serendipitous outcomes.
“Investors are opportunists by necessity,” says Fisher, “so if they like the cut of your business’s jib, you never know — the FOMO might start kicking hard.”
Image Credits: MirageC (opens in a new window) / Getty Images
FischerJordan’s Deeba Goyal and Archita Bhandari break down the pandemic’s impact on alternative lenders, specifically what they had to do to survive the crisis, taking a look at smaller lenders including Credibly, Kabbage, Kapitus and BlueVine.
“Only those who were able to find a way through the complexities of their existing capital sources were able to maintain their performance, and the rest were left to perish or find new funding avenues,” they write.
Image Credits: Nigel Sussman (opens in a new window)
Customer engagement software company Freshworks’ S-1 filing depicts a company that’s experiencing accelerating revenue growth, “a great sign for the health of its business,” reports Alex Wilhelm in this morning’s The Exchange.
“Most companies see their growth rates decline as they scale, as larger denominators make growth in percentage terms more difficult.”
Studying the company’s SEC filing, he found that “Freshworks isn’t a company where we need to cut it lots of slack, as we might with an adjusted EBITDA number. It is going public ready for Big Kid metrics.”
Fifteen years ago this week on August 25, 2006, AWS turned on the very first beta instance of EC2, its cloud-based virtual computers. Today cloud computing, and more specifically infrastructure as a service, is a staple of how businesses use computing, but at that moment it wasn’t a well known or widely understood concept.
The EC in EC2 stands for Elastic Compute, and that name was chosen deliberately. The idea was to provide as much compute power as you needed to do a job, then shut it down when you no longer needed it — making it flexible like an elastic band. The launch of EC2 in beta was preceded by the beta release of S3 storage six months earlier, and both services marked the starting point in AWS’ cloud infrastructure journey.
You really can’t overstate what Amazon was able to accomplish with these moves. It was able to anticipate an entirely different way of computing and create a market and a substantial side business in the process. It took vision to recognize what was coming and the courage to forge ahead and invest the resources necessary to make it happen, something that every business could learn from.
The AWS origin story is complex, but it was about bringing the IT power of the Amazon business to others. Amazon at the time was not the business it is today, but it was still rather substantial and still had to deal with massive fluctuations in traffic such as Black Friday when its website would be flooded with traffic for a short but sustained period of time. While the goal of an e-commerce site, and indeed every business, is attracting as many customers as possible, keeping the site up under such stress takes some doing and Amazon was learning how to do that well.
Those lessons and a desire to bring the company’s internal development processes under control would eventually lead to what we know today as Amazon Web Services, and that side business would help fuel a whole generation of startups. We spoke to Dave Brown, who is VP of EC2 today, and who helped build the first versions of the tech, to find out how this technological shift went down.
The genesis of the idea behind AWS started in the 2000 timeframe when the company began looking at creating a set of services to simplify how they produced software internally. Eventually, they developed a set of foundational services — compute, storage and database — that every developer could tap into.
But the idea of selling that set of services really began to take shape at an executive offsite at Jeff Bezos’ house in 2003. A 2016 TechCrunch article on the origins AWS described how that started to come together:
As the team worked, Jassy recalled, they realized they had also become quite good at running infrastructure services like compute, storage and database (due to those previously articulated internal requirements). What’s more, they had become highly skilled at running reliable, scalable, cost-effective data centers out of need. As a low-margin business like Amazon, they had to be as lean and efficient as possible.
They realized that those skills and abilities could translate into a side business that would eventually become AWS. It would take a while to put these initial ideas into action, but by December 2004, they had opened an engineering office in South Africa to begin building what would become EC2. As Brown explains it, the company was looking to expand outside of Seattle at the time, and Chris Pinkham, who was director in those days, hailed from South Africa and wanted to return home.
Embedded fintech company Zeal secured $13 million in Series A funding to continue developing its platform for building individualized payroll products.
Spark Capital led the Series A, with participation from Commerce Ventures and a group of individual investors, including Marqeta CEO Jason Gardner and CRO Omri Dahan, Robinhood founder Vlad Tenev, UltimateSoftware executives Mitch Dauerman and Bob Manne and Namely founder Matt Straz. The latest round now gives the company $14.6 million in total funding, which includes a $1.6 million seed round in 2020, CEO Kirti Shenoy told TechCrunch.
The Bay Area company’s origin was as Puzzl, a payment processing startup for the gig economy, founded in 2018 by Shenoy and CTO Pranab Krishnan. It was part of Y Combinator’s 2019 cohort. The pair had to pivot the company after needing to move some of its thousands of 1099 contractors to W2 employee status.
They went looking for payroll processors that could handle high volumes of payroll automatically, like ADP or Paycor, but found they didn’t match some of the capabilities Shenoy and Krishnan wanted, including to pay workers daily and customize earning components.
To ensure other companies didn’t run into the same problem, they decided to build a payroll API that enables their customers to build their own payroll products, even being able to pay their workers everyday. Traditionally, companies would layer together antiquated third-party payroll tools and spend millions of dollars on consulting fees. Zeal’s API tool modernizes the payroll process and takes on the payroll liability while managing the back-end payment logistics, Shenoy said.
Currently, enterprises use Zeal to pay large volumes of workers and keep payment data on their own native systems, while software platforms that sell business-to-business services use Zeal to build their own payroll product to sell to their customers.
“Our mission is to touch every American paycheck with our tax and payment technology, ensuring that American employees are paid correctly and efficiently,” Krishnan said.
And that is a complex goal: there are 200 million American employees, over $8.8 trillion of payroll is processed annually in the U.S. and the country’s 11,000 tax jurisdictions produce over 25,000 income tax code changes a year.
Meanwhile, Shenoy cited IRS data that showed more than 40% of small and medium businesses pay at least one payroll penalty per year. That was one of the drivers for Zeal’s latest product, the Abacus gross-to-net calculator, which payroll companies can use to ensure they are compliant in paying their income taxes.
The co-founders intend to use the new funding to build out their team and strengthen compliance measures to ensure its track record with enterprises.
“We are starting to win more enterprise deals and moving millions of dollars each day,” Shenoy said. “This has been a legacy space for so long, so companies want to work with a provider to move fast.”
Shenoy predicts that more companies will shift to hyper-customized experiences in the next five to 10 years. Whereas the default was a company like ADP, companies will want to control their own data and build products so their customers can do everything payroll-related from one platform.
As part of the investment, Spark Capital’s partner Natalie Sandman has joined Zeal’s board of directors. She previously invested in other embedded fintech companies like Affirm and Marqeta and thinks there are new experiences in the sector that APIs can unlock.
Sandman felt the payroll-building pain points herself when she worked at Zenefits. At the time, the company was trying to do the same thing, but there were no APIs to connect with. There were all of these spreadsheets to transfer data, but one wrong deduction would trickle down and cause a tax penalty.
Shenoy and Krishnan are both “customer-obsessed,” she said, and are balancing speed with thoughtfulness when it comes to understanding how their customers want to build payroll products.
She is seeing a macro shift to audience-driven human resources where bringing new employees online will mean embedding them into products that will be more valuable versus the traditional spreadsheet.
“To me, it is a no-brainer that APIs provide flexibility in the way wages and deductions need to be made,” Sandman said. “You can lose trust in your employer. Payroll is at the deepest trust point and where you want transparency and a robust solution to solve that need.”
“Even with its vast local talent, it seems Israel still has many hurdles to overcome in order to become a global fintech hub. [ … ] Having that said, I don’t believe any of these obstacles will prevent Israel from generating disruptive global fintech startups that will become game-changing businesses.”
I wrote that back in 2018, when I was determined to answer whether Israel had the potential to become a global fintech hub. Suffice to say, this prediction from three years ago has become a reality.
In 2019, Israeli fintech startups raised over $1.8 billion; in 2020, they were said to have raised $1.48 billion despite the pandemic. Just in the first quarter of 2021, Israeli fintech startups raised $1.1 billion, according to IVC Research Center and Meitar Law Offices.
It’s then no surprise that Israel now boasts over a dozen fintech unicorns in sectors such as payments, insurtech, lending, banking and more, some of which reached the desired status just in the beginning of 2021 — like Melio and Papaya Global, which raised $110 million and $100 million, respectively.
Over the years I’ve been fortunate to invest (both as a venture capitalist and personally) in successful early-stage fintech companies in the U.S., Israel and emerging markets — Alloy, Eave, MoneyLion, Migo, Unit, AcroCharge and more.
The major shifts and growth of fintech globally over these years has been largely due to advanced AI-based technologies, heightened regulatory scrutiny, a more innovative and adaptive approach among financial institutions to build partnerships with fintechs, and, of course, the COVID pandemic, which forced consumers to transact digitally.
The pandemic pushed fintechs to become essential for business survival, acting as the main contributor of the rapid migration to digital payments.
So what is it about Israeli-founded fintech startups that stand out from their scaling neighbors across the pond? Israeli founders first and foremost have brought to the table a distinct perspective and understanding of where the gaps exist within their respective focus industries — whether it was Hippo and Lemonade in the world of property and casualty insurance, Rapyd and Melio in the world of business-to-business payments, or Earnix and Personetics in the world of banking data and analytics.
This is even more compelling given that many of these Israeli founders did not grow within financial services, but rather recognized those gaps, built their know-how around the industry (in some cases by hiring or partnering with industry experts and advisers during their ideation phase, strengthening their knowledge and validation), then sought to build more innovative and customer-focused solutions than most financial institutions can offer.
Having this in mind, it is becoming clearer that the Israeli fintech industry has slowly transitioned into a mature ecosystem with a combination of local talent, which now has expertise from a multitude of local fintechs that have scaled to success; a more global network of banking and insurance partners that have recognized the Israeli fintech disruptors; and the smart fintech -focused venture capital to go along with it. It’s a combination that will continue to set up Israeli fintech founders for success.
In addition, a major contributor to the fintech industry comes from the technological side. It is never enough to reach unicorn status with just the tech on the back end.
What most likely differentiates Israeli fintech from other ecosystems is the strong technological barriers and infrastructure built from the ground up, which then, of course, leads to the ability to be more customized, compliant, secured, etc. If I had to bet on where I believe Israeli fintech startups could become market leaders, I’d go with the following.
Voice technologies have come a long way over the years; where once you knew you were talking to a robot, now financial institutions and applications offer a fully automated experience that sounds and feels just like a company employee.
Israel has shown growing success in the world of voice tech, with companies like Gong.io providing insights for remote sales teams; Bonobo (acquired by Salesforce) offering insights from customer support calls, texts and other interactions; and Voca.ai (acquired by Snapchat) offering an automated support agent to replace the huge costs of maintaining call centers.
Which terms come to mind when you think about SaaS?
“Solutions,” “cutting-edge,” “scalable” and “innovative” are just a sample of the overused jargon lurking around every corner of the techverse, with SaaS marketers the world over seemingly singing from the same hymn book.
Sadly for them, new research has proven that such jargon-heavy copy — along with unclear features and benefits — is deterring customers and cutting down conversions. Around 57% of users want to see improvements in the clarity and navigation of websites, suggesting that techspeak and unnecessarily complex UX are turning customers away at the door, according to The SaaS Engine.
That’s not to say SaaS marketers aren’t trying: Seventy percent of those surveyed have been making big adjustments to their websites, and 33% have updated their content. So how and why are they missing the mark?
They say there’s no bigger slave to fashion than someone determined to avoid it, and SaaS marketing is no different. To truly stand out, you need to do thorough competitor analysis.
There are three common blunders that most SaaS marketers make time and again when it comes to clarity and high-converting content:
We’re going to unpack what the research suggests and the steps you can take to avoid these common pitfalls.
It’s a jungle out there. But while camouflage might be key to surviving in the wild, in the crowded SaaS marketplace, it’s all about standing out. Let’s be honest: How many SaaS homepages have you visited that look the same? How many times have you read about “innovative tech-driven solutions that will revolutionize your workflow”?
The research has found that of those using SaaS at work, 76% are now on more platforms or using existing ones more intensively than last year. And as always, with increased demand comes a boom in competition, so it’s never been more important to stand out. Rather than imitating the same old phrases and copy your competitors are using, it’s time to reach your audience with originality, empathy and striking clarity.
But how do you do that?
Google is infamous for spinning up products and killing them off, often in very short order. It’s an annoying enough habit when it’s stuff like messaging apps and games. But the tech giant’s ambitions stretch into many domains that touch human lives these days. Including, most directly, healthcare. And — it turns out — so does Google’s tendency to kill off products that its PR has previously touted as ‘life saving’.
To wit: Following a recent reconfiguration of Google’s health efforts — reported earlier by Business Insider — the tech giant confirmed to TechCrunch that it is decommissioning its clinician support app, Streams.
The app, which Google Health PR bills as a “mobile medical device”, was developed back in 2015 by DeepMind, an AI division of Google — and has been used by the UK’s National Health Service in the years since, with a number of Trusts inking deals with DeepMind Health to roll out Streams to their clinicians.
At the time of writing, one NHS Trust — London’s Royal Free — is still using the app in its hospitals.
But, presumably, not for too much longer since Google is in the process of taking Streams out back to be shot and tossed into its deadpool — alongside the likes of its ill-fated social network, Google+, and Internet ballon company Loon, to name just two of a frankly endless list of now defunct Alphabet/Google products.
Other NHS Trusts we contacted which had previously rolled out Streams told us they have already stopped using the app.
University College London NHS Trust confirmed to TechCrunch that it severed ties with Google Health earlier this year.
“Our agreement with Google Health (initially DeepMind) came to an end in March 2021 as originally planned. Google Health deleted all the data it held at the end of the [Streams] project,” a UCL NHS Trust spokesperson told TechCrunch.
Imperial College Healthcare NHS Trust also told us it stopped using Streams this summer (in July) — and said patient data is in the process of being deleted.
“Following the decommissioning of Streams at the Trust earlier this summer, data that has been processed by Google Health to provide the service to the Trust will be deleted and the agreement has been terminated,” a spokesperson said.
“As per the data sharing agreement, any patient data that has been processed by Google Health to provide the service will be deleted. The deletion process is started once the agreement has been terminated,” they added, saying the contractual timeframe for Google deleting patient data is six months.
Another Trust, Taunton & Somerset, also confirmed its involvement with Streams had already ended.
The Streams deals DeepMind inked with NHS Trusts were for five years so these contracts were likely approaching the end of their terms, anyway.
Contract extensions would have had to be agreed by both parties. And Google’s decision to decommission Streams may be factoring in a lack of enthusiasm from involved Trusts to continue using the software — although if that’s the case it may, in turn, be a reflection of Trusts’ perceptions of Google’s weak commitment to the project.
Neither side is saying much publicly.
But as far as we’re aware the Royal Free is the only NHS Trust still using the clinician support app as Google prepares to cut off Stream’s life support.
The Streams story has plenty of wrinkles, to put it politely.
For one thing, despite being developed by Google’s AI division — and despite DeepMind founder Mustafa Suleyman saying the goal for the project was to find ways to integrate AI into Streams so the app could generate predictive healthcare alerts — it doesn’t involve any artificial intelligence.
An algorithm in Streams alerts doctors to the risk of a patient developing acute kidney injury but relies on an existing AKI (acute kidney injury) algorithm developed by the NHS. So Streams essentially digitized and mobilized existing practice.
As a result, it always looked odd that an AI division of an adtech giant would be so interested in building, provisioning and supporting clinician support software over the long term. But then — as it panned out — neither DeepMind nor Google were in it for the long haul at the patient’s bedside.
DeepMind and the NHS Trust it worked with to develop Streams (the aforementioned Royal Free) started out with wider ambitions for their partnership — as detailed in an early 2016 memo we reported on, which set out a five year plan to bring AI to healthcare. Plus, as we noted above, Suleyman keep up the push for years — writing later in 2019 that: “Streams doesn’t use artificial intelligence at the moment, but the team now intends to find ways to safely integrate predictive AI models into Streams in order to provide clinicians with intelligent insights into patient deterioration.”
A key misstep for the project emerged in 2017 — through press reporting of a data scandal, as details of the full scope of the Royal Free-DeepMind data-sharing partnership were published by New Scientist (which used a freedom of information request to obtain contracts the pair had not made public).
The UK’s data protection watchdog went on to find that the Royal Free had not had a valid legal basis when it passed information on millions of patients’ to DeepMind during the development phase of Streams.
Which perhaps explains DeepMind’s eventually cooling ardour for a project it had initially thought — with the help of a willing NHS partner — would provide it with free and easy access to a rich supply of patient data for it to train up healthcare AIs which it would then be, seemingly, perfectly positioned to sell back into the self same service in future years. Price tbc.
No one involved in that thought had properly studied the detail of UK healthcare data regulation, clearly.
Or — most importantly — bothered to considered fundamental patient expectations about their private information.
So it was not actually surprising when, in 2018, DeepMind announced that it was stepping away from Streams — handing the app (and all its data) to Google Health — Google’s internal health-focused division — which went on to complete its takeover of DeepMind Health in 2019. (Although it was still shocking, as we opined at the time.)
It was Google Health that Suleyman suggested would be carrying forward the work to bake AI into Streams, writing at the time of the takeover that: “The combined experience, infrastructure and expertise of DeepMind Health teams alongside Google’s will help us continue to develop mobile tools that can support more clinicians, address critical patient safety issues and could, we hope, save thousands of lives globally.”
A particular irony attached to the Google Health takeover bit of the Streams saga is the fact that DeepMind had, when under fire over its intentions toward patient data, claimed people’s medical information would never be touched by its adtech parent.
Until of course it went on it hand the whole project off to Google — and then lauded the transfer as great news for clinicians and patients!
Google’s takeover of Streams meant NHS Trusts that wanted to continue using the app had to ink new contracts directly with Google Health. And all those who had rolled out the app did so. It’s not like they had much choice if they did want to continue.
Again, jump forward a couple of years and it’s Google Health now suddenly facing a major reorg — with Streams in the frame for the chop as part of Google’s perpetually reconfiguring project priorities.
It is quite the ignominious ending to an already infamous project.
DeepMind’s involvement with the NHS had previously been seized upon by the UK government — with former health secretary, Matt Hancock, trumpeting an AI research partnership between the company and Moorfield’s Eye Hospital as an exemplar of the kind of data-driven innovation he suggested would transform healthcare service provision in the UK.
Luckily for Hancock he didn’t pick Streams as his example of great “healthtech” innovation. (Moorfields confirmed to us that its research-focused partnership with Google Health is continuing.)
The hard lesson here appears to be don’t bet the nation’s health on an adtech giant that plays fast and loose with people’s data and doesn’t think twice about pulling the plug on digital medical devices as internal politics dictate another chair-shuffling reorg.
Patient data privacy advocacy group, MedConfidential — a key force in warning over the scope of the Royal Free’s DeepMind data-sharing deal — urged Google to ditch the spin and come clean about the Streams cock-up, once and for all.
“Streams is the Windows Vista of Google — a legacy it hopes to forget,” MedConfidential’s Sam Smith told us. “The NHS relies on trustworthy suppliers, but companies that move on after breaking things create legacy problems for the NHS, as we saw with wannacry. Google should admit the decision, delete the data, and learn that experimenting on patients is regulated for a reason.”
Despite the Information Commissioner’s Office’s 2017 finding that the Royal Free’s original data-sharing deal with DeepMind was improper, it’s notable that the London Trust stuck with Streams — continuing to pass data to DeepMind.
The original patient data-set that was shared with DeepMind without a valid legal basis was never ordered to be deleted. Nor — presumably has it since been deleted. Hence the call for Google to delete the data now.
Ironically the improperly acquired data should (in theory) finally get deleted — once contractual timeframes for any final back-up purges elapse — but only because it’s Google itself planning to switch off Streams.
The Royal Free confirmed to us that it is still using Streams, even as Google spins the dial on its commercial priorities for the umpteenth time and decides it’s not interested in this particular bit of clinician support, after all.
We put a number of questions to the Trust — including about the deletion of patient data — none of which it responded to.
Instead, two days later, it sent us this one-line statement which raises plenty more questions — saying only that: “The Streams app has not been decommissioned for the Royal Free London and our clinicians continue to use it for the benefit of patients in our hospitals.”
It is not clear how long the Trust will be able to use an app Google is decommissioning. Nor how wise that might be for patient safety — such as if the app won’t get necessary security updates, for example.
We’ve also asked Google how long it will continue to support the Royal Free’s usage — and when it plans to finally switch off the service. As well as which internal group will be responsible for any SLA requests coming from the Royal Free as the Trust continues to use software Google Health is decommissioning — and will update this report with any response. (Earlier a Google spokeswoman told us the Royal Free would continue to use Streams for the ‘near future’ — but she did not offer a specific end date.)
In press reports this month on the Google Health reorg — covering an internal memo first obtained by Business Insider — teams working on various Google health projects were reported to be being split up to other areas, including some set to report into Google’s search and AI teams.
So which Google group will take over responsibility for the handling of the SLA with the Royal Free, as a result of the Google Health reshuffle, is an interesting question.
In earlier comments, Google’s spokeswoman told us the new structure for its reconfigured health efforts — which are still being badged ‘Google Health’ — will encompass all its work in health and wellness, including Fitbit, as well as AI health research, Google Cloud and more.
On Streams specifically, she said the app hasn’t made the cut because when Google assimilated DeepMind Health it decided to focus its efforts on another digital offering for clinicians — called Care Studio — which it’s currently piloting with two US health systems (namely: Ascension & Beth Israel Deaconess Medical Center).
And anyone who’s ever tried to use a Google messaging app will surely have strong feelings of déjà vu on reading that…
DeepMind’s co-founder, meanwhile, appears to have remained blissfully ignorant of Google’s intentions to ditch Streams in favor of Care Studio — tweeting back in 2019 as Google completed the takeover of DeepMind Health that he had been “proud to be part of this journey”, and also touting “huge progress delivered already, and so much more to come for this incredible team”.
In the end, Streams isn’t being ‘supercharged’ (or levelled up to use current faddish political parlance) with AI — as his 2019 blog post had envisaged — Google is simply taking it out of service. Like it did with Reader or Allo or Tango or Google Play Music, or…. well, the list goes on.
Suleyman’s own story contains some wrinkles, too.
He is no longer at DeepMind but has himself been ‘folded into’ Google — joining as a VP of artificial intelligence policy, after initially being placed on an extended leave of absence from DeepMind.
In January, allegations that he had bullied staff were reported by the WSJ. And then, earlier this month, Business Insider expanded on that — reporting follow up allegations that there had been confidential settlements between DeepMind and former employees who had worked under Suleyman and complained about his conduct (although DeepMind denied any knowledge of such settlements).
In a statement to Business Insider, Suleyman apologized for his past behavior — and said that in 2019 he had “accepted feedback that, as a co-founder at DeepMind, I drove people too hard and at times my management style was not constructive”, adding that he had taken time out to start working with a coach and that that process had helped him “reflect, grow and learn personally and professionally”.
We asked Google if Suleyman would like to comment on the demise of Streams — and on his employer’s decision to kill the project — given his high hopes for the project and all the years of work he put into the health push. But the company did not engage with that request.
We also offered Suleyman the chance to comment directly. We’ll update this story if he responds.
Finding the right learning platform can be difficult, especially as companies look to upskill and reskill their talent to meet demand for certain technological capabilities, like data science, machine learning and artificial intelligence roles.
Workera.ai’s approach is to personalize learning plans with targeted resources — both technical and nontechnical roles — based on the current level of a person’s proficiency, thereby closing the skills gap.
The Palo Alto-based company secured $16 million in Series A funding, led by New Enterprise Associates, and including existing investors Owl Ventures and AI Fund, as well as individual investors in the AI field like Richard Socher, Pieter Abbeel, Lake Dai and Mehran Sahami.
Kian Katanforoosh, Workera’s co-founder and CEO, says not every team is structured or feels supported in their learning journey, so the company comes at the solution from several angles with an assessment on mentorship, where the employee wants to go in their career and what skills they need for that, and then Workera will connect those dots from where the employee is in their skillset to where they want to go. Its library has more than 3,000 micro-skills and personalized learning plans.
“It is what we call precision upskilling,” he told TechCrunch. “The skills data then can go to the organization to determine who are the people that can work together best and have a complementary skill set.”
Workera was founded in 2020 by Katanforoosh and James Lee, COO, after working with Andrew Ng, Coursera co-founder and Workera’s chairman. When Lee first connected with Katanforoosh, he knew the company would be able to solve the problem around content and basic fundamentals of upskilling.
It raised a $5 million seed round last October to give the company a total of $21 million raised to date. This latest round was driven by the company’s go-to-market strategy and customer traction after having acquired over 30 customers in 12 countries.
Over the past few quarters, the company began working with Fortune 500 companies, including Accenture and Siemens Energy, across industries like professional services, medical devices and energy, Lee said. As spending on AI skills is expected to exceed $79 billion by 2022, he says Workera will assist in closing the gap.
“We are seeing a need to measure skills,” he added. “The size of the engagements are a sign as is the interest for tech and non-tech teams to develop AI literacy, which is a more pressing need.”
As a result, it was time to increase the engineering and science teams, Katanforoosh said. He plans to use the new funding to invest in more talent in those areas and to build out new products. In addition, there are a lot of natural language processes going on behind the scenes, and he wants the company to better understand it at a granular level so that the company can assess people more precisely.
Carmen Chang, general partner and head of Asia at NEA, said she is a limited partner in Ng’s AI fund and in Coursera, and has looked at a lot of his companies.
She said she is “very excited” to lead the round and about Workera’s concept. The company has a good understanding of the employee skill set, and with the tailored learning program, will be able to grow with company needs, Chang added.
“You can go out and hire anyone, but investing in the people that you have, educating and training them, will give you a look at the totality of your employees,” Chang said. “Workera is able to go in and test with AI and machine learning and map out the skill sets within a company so they will be able to know what they have, and that is valuable, especially in this environment.”
Connecting to all the services and microservices that a modern cloud native enterprise application requires can be a complicated task. It’s an area that startup Solo.io is trying to disrupt with the new release of its Gloo Mesh Enterprise platform.
Based in Cambridge, Massachusetts, Solo has had focus since its founding on a concept known as a service mesh. A service mesh provides an optimized approach to connect different components together in an automated approach, often inside of a Kubernetes cloud native environment.
Idit Levine, founder and CEO at Solo, explained to TechCrunch that she knew from the outset when she started the company in 2017 that it might take a few years till the market understood the concept of the service mesh and why it is needed. That’s why her company also built out an API gateway technology that helps developers connect APIs, which can be different data sources or services.
Until this week, the API and service mesh components of Solo’s Gloo Mesh Enterprise offering were separate technologies, with different configurations and control planes. That is now changing with the integration of both API and service mesh capabilities into a unified service. The integrated capabilities should make it easier to set up and configure all manner of services in the cloud that are running on Kubernetes.
Solo’s service mesh, known as Gloo Mesh, is based on the open source Istio project, which was created by Google. The API product is called Gloo Edge, which uses the open source Envoy project, originally created by ride sharing company Lyft. Levine explained that her team has now used Istio’s plugin architecture to connect with Envoy in an optimized approach.
Levine noted that many users start off with an API gateway and then extend to using the service mesh. With the new Gloo Mesh Enterprise update, she expects customer adoption to accelerate further as Solo will be able to differentiate against rivals in both the service mesh and API management markets.
While the service mesh space is still emerging including rivals such as Tetrate, API gateways are a more mature technology. There are a number of established vendors in the API management space including Kong which has raised $71 million in funding. Back in 2016, Google acquired API vendor Apigee for $625 million and has been expanding the technology in the years since, including the Apigee X platform announced in February of this year.
With the integration of Gloo Edge for API management into Gloo Mesh Enterprise, Solo isn’t quite covering all the bases for API technology, yet. Gloo Edge supports REST based APIs, which are by far the most common today, though it doesn’t support the emerging GraphQL API standard, which is becoming increasingly popular. Levine told us to ‘stay tuned’ for a future GraphQL announcement for Solo and its platform.
Solo has raised a total of $36.5 million across two rounds, with an $11 million Series A in 2018 and a $23 million Series B announced in October 2020. The company’s investors include Redpoint and True Ventures.
Marketing automation has usually focused on driving sales, mainly using past purchase or late funnel behavior (e.g., paid search) as a predictor of an imminent purchase. While effective at boosting sales numbers, this widely implemented strategy can result in a disservice to brands and industries that adopt it, as it promotes the perpetual devaluation of goods or services. Narrowing a brand’s focus only to aspects linked to conversions risks stripping the customer experience of key components that lay the groundwork for long-term success.
We live in a world rich with data, and insights are growing more vibrant every day. With this in mind, companies and advertisers can strategically weave together all the data they collect during the customer experience. This enables them to understand every inference available during customer interactions and learn what benefits the customer most at a given time.
But focusing exclusively on data collected from customers, brands risk falling subject to the law of diminishing returns. Even companies with meaningful consumer interactions or rich service offerings struggle to gain impactful contextual insights. Only by harnessing a broader dataset can we understand how people become customers in the first place, what makes them more or less likely to purchase again and how developments in society impact the growth or struggle a brand will experience.
Here’s a look at how we can achieve a more complete picture of current and future customers.
A critical component in re-imagining customer experience as a relationship is recognizing that brands often don’t focus enough on consumers’ wider needs and concerns.
Over the past several years, almost every industry has capitalized on the opportunity data-driven marketing presents, inching closer to the “holy grail” of real-time, direct and personalized engagements. Yet, the evolving toolset encouraged brands to focus on end-of-the-funnel initiatives, jeopardizing what really impacts a business’ longevity: relationships.
While past purchase or late-funnel behavior data does provide value and is useful in identifying habit changes or actual needs, it is relatively surface level and doesn’t offer insight into consumers’ future behavior or what led them to a specific purchase in the first place.
By incorporating AI, brands can successfully engage with their audiences in a more holistic, helpful and genuine way. Technologies to discern not just the content of language (e.g., the keywords) but its meaning as well, open up possibilities to better infer consumer interest and intentions. In turn, brands can tune consumer interactions to generate satisfaction and delight, and ultimately accrue stronger insights for future use.
A London-headquartered startup called LOVE, valued at $17 million following its pre-seed funding, aims to redefine how people stay in touch with close family and friends. The company is launching a messaging app that offers a combination of video calling as well as asynchronous video and audio messaging, in an ad-free, privacy-focused experience with a number of bells and whistles, including artistic filters and real-time transcription and translation features.
But LOVE’s bigger differentiator may not be its product alone, but rather the company’s mission.
LOVE aims for its product direction to be guided by its user base in a democratic fashion as opposed to having the decisions made about its future determined by an elite few at the top of some corporate hierarchy. In addition, the company’s longer-term goal is ultimately to hand over ownership of the app and its governance to its users, the company says.
These concepts have emerged as part of bigger trends towards a sort of “Web 3.0,” or next phase of internet development, where services are decentralized, user privacy is elevated, data is protected and transactions take place on digital ledgers, like a blockchain, in a more distributed fashion.
LOVE’s founders are proponents of this new model, including serial entrepreneur Samantha Radocchia, who previously founded three companies and was an early advocate for the blockchain as the co-founder of Chronicled, an enterprise blockchain company focused on the pharmaceutical supply chain.
As someone who’s been interested in emerging technology since her days of writing her anthropology thesis on currency exchanges in “Second Life’s” virtual world, she’s now faculty at Singularity University, where she’s given talks about blockchain, AI, Internet of Things, Future of Work, and other topics. She’s also authored an introductory guide to the blockchain with her book “Bitcoin Pizza.”
Co-founder Christopher Schlaeffer, meanwhile, held a number of roles at Deutsche Telekom, including chief product & innovation officer, corporate development officer and chief strategy officer, where he along with Google execs introduced the first mobile phone to run Android. He was also chief digital officer at the telecommunication services company VEON.
The two crossed paths after Schlaeffer had already begun the work of organizing a team to bring LOVE to the public, which includes co-founders Chief Technologist Jim Reeves, also previously of VEON, and Chief Designer Timm Kekeritz, previously an interaction designer at international design firm IDEO in San Francisco, design director at IXDS and founder of design consultancy Raureif in Berlin, among other roles.
Image Credits: LOVE
Explained Radocchia, what attracted her to join as CEO was the potential to create a new company that upholds more positive values than what’s often seen today — in fact, the brand name “LOVE” is a reference to this aim. She was also interested in the potential to think through what she describes as “new business models that are not reliant on advertising or harvesting the data of our users,” she says.
To that end, LOVE plans to monetize without any advertising. While the company isn’t ready to explain its business model in full, it would involve users opting in to services through granular permissions and membership, we’re told.
“We believe our users will much rather be willing to pay for services they consciously use and grant permissions to in a given context than have their data used for an advertising model which is simply not transparent,” says Radocchia.
LOVE expects to share more about the model next year.
As for the LOVE app itself, it’s a fairly polished mobile messenger offering an interesting combination of features. Like any other video chat app, you can video call with friends and family, either in one-on-one calls or in groups. Currently, LOVE supports up to five call participants, but expects to expand that as it scales. The app also supports video and audio messaging for asynchronous conversations. There are already tools that offer this sort of functionality on the market, of course — like WhatsApp, with its support for audio messages, or video messenger Marco Polo. But they don’t offer quite the same expanded feature set.
Image Credits: LOVE
For starters, LOVE limits its video messages to 60 seconds, for brevity’s sake. (As anyone who’s used Marco Polo knows, videos can become a bit rambling, which makes it harder to catch up when you’re behind on group chats.) In addition, LOVE allows you to both watch the video content as well as read the real-time transcription of what’s being said — the latter which comes in handy not only for accessibility’s sake, but also for those times you want to hear someone’s messages but aren’t in a private place to listen or don’t have headphones. Conversations can also be translated into 50 languages.
“A lot of the traditional communication or messenger products are coming from a paradigm that has always been text-based,” explains Radocchia. “We’re approaching it completely differently. So while other platforms have a lot of the features that we do, I think that…the perspective that we’ve approached it has completely flipped it on its head,” she continues. “As opposed to bolting video messages on to a primarily text-based interface, [LOVE is] actually doing it in the opposite way and adding text as a sort of a magically transcribed add-on — and something that you never, hopefully, need to be typing out on your keyboard again,” she adds.
The app’s user interface, meanwhile, has been designed to encourage eye-to-eye contact with the speaker to make conversations feel more natural. It does this by way of design elements where bubbles float around as you’re speaking and the bubble with the current speaker grows to pull your focus away from looking at yourself. The company is also working with the curator of Serpentine Gallery in London, Hans Ulrich-Obrist, to create new filters that aren’t about beautification or gimmicks, but are instead focused on introducing a new form of visual expression that makes people feel more comfortable on camera.
For the time being, this has resulted in a filter that slightly abstracts your appearance, almost in the style of animation or some other form of visual arts.
The app claims to use end-to-end encryption and the automatic deletion of its content after seven days — except for messages you yourself recorded, if you’ve chosen to save them as “memorable moments.”
“One of our commitments is to privacy and the right-to-forget,” says Radocchia. “We don’t want to be or need to be storing any of this information.”
LOVE has been soft-launched on the App Store, where it’s been used with a number of testers and is working to organically grow its user base through an onboarding invite mechanism that asks users to invite at least three people to join. This same onboarding process also carefully explains why LOVE asks for permissions — like using speech recognition to create subtitles.
LOVE says its valuation is around $17 million USD following pre-seed investments from a combination of traditional startup investors and strategic angel investors across a variety of industries, including tech, film, media, TV and financial services. The company will raise a seed round this fall.
The app is currently available on iOS, but an Android version will arrive later in the year. (Note that LOVE does not currently support the iOS 15 beta software, where it has issues with speech transcription and in other areas. That should be resolved next week, following an app update now in the works.)
Level AI, an early stage startup from a former member of the Alexa product team, wants to help companies process customer service calls faster by understanding the interactions they’re having with customers in real time.
Today the company launched publicly, while announcing a $13 million Series A led by Battery Ventures with help from seed investors Eniac and Village Global along with some unnamed angels. Battery’s Neeraj Agrawal will be joining the startup’s board under the terms of the agreement. The company reports it has now raised $15 million including an earlier $2 million seed.
Company founder Ashish Nagar helped run product for the Amazon Alexa team, working on an experimental project to get Alexa to have an extended human conversation. While they didn’t achieve that as the technology is just not there yet, it did help him build his understanding of conversational AI, and in 2019 he launched Level AI to bring that knowledge to customer service.
“Our product helps agents in real time to perform better, resolve customer queries faster and make them clear faster. Then after the call, it helps the auditor, the folks who are doing quality assurance and training audits for those calls do their jobs five to 10 times faster,” Nagar explained.
He says that the Level AI solution involves several activities. The first is understanding the nature of the conversation in real time by breaking it down into meaningful chunks that the technology can understand. Once they do that, they take that information and run it against workflows running in the background to deliver helpful resources, and finally use all that conversational data they are collecting to help companies learn from all this activity.
“We now have all this call data, email data, chat data, and we can look at it through a new lens to train agents better and provide insights to other aspects of the business like product managers and so on,” Nagar said.
He makes clear that this isn’t looking at sentiment or using keyword analysis to drive actions and understanding. He says that it is truly trying to understand the language in the interaction, and deliver the right kind of information to the agent to help the customer resolve the problem. That involves modeling intent, memory and understanding multiple things at the same time, which as he says, is how humans interact, and what conversational AI is trying to mimic.
While it’s not completely there yet, they are working at solving each of these problems as the technology advancements allow.
The company launched in 2018 and the first idea was to build voice assistants for front line workers, but after talking to customers, Nagar learned there wasn’t a real demand for this, but there was for using conversational AI to help augment human workers, especially in customer service.
He decided to build that instead and launched the first version of the product in March 2020. Today the company has 27 employees spread out in the U.S. and India, and Nagar believes that by being remote and hiring anywhere, he can hire the best people, while driving diversity.
Agrawal, who is lead investor for the round, sees a company solving a fundamental problem of delivering the right information to an agent in real time. “What he’s built has real time in mind. And that’s kind of the holy grail of helping the customer service agents. You can provide information after the call ends, and that’s […] helpful, but […] you get the real value [by delivering information] during the call and that’s where real business value is,” he said.
Nagar acknowledges this technology could extend to other parts of the business like sales, but he intends to keep his focus on customer service for the time being.
Earlier today, spend management startup Ramp said it has raised a $300 million Series C that valued it at $3.9 billion. It also said it was acquiring Buyer, a “negotiation-as-a-service” platform that it believes will help customers save money on purchases and SaaS products.
The round and deal were announced just a week after competitor Brex shared news of its own acquisition — the $50 million purchase of Israeli fintech startup Weav. That deal was made after Brex’s founders invested in Weav, which offers a “universal API for commerce platforms.”
From a high level, all of the recent deal-making in corporate cards and spend management shows that it’s not enough to just help companies track what employees are expensing these days. As the market matures and feature sets begin to converge, the players are seeking to differentiate themselves from the competition.
But the point of interest here is these deals can tell us where both companies think they can provide and extract the most value from the market.
These differences come atop another layer of divergence between the two companies: While Brex has instituted a paid software tier of its service, Ramp has not.
Let’s start with Ramp. Launched in 2019, the company is a relative newcomer in the spend management category. But by all accounts, it’s producing some impressive growth numbers. As our colleague Mary Ann Azevedo wrote:
Since the beginning of 2021, the company says it has seen its number of cardholders on its platform increase by 5x, with more than 2,000 businesses currently using Ramp as their “primary spend management solution.” The transaction volume on its corporate cards has tripled since April, when its last raise was announced. And, impressively, Ramp has seen its transaction volume increase year over year by 1,000%, according to CEO and co-founder Eric Glyman.
Ramp’s focus has always been on helping its customers save money: It touts a 1.5% cash back reward for all purchases made through its cards, and says its dashboard helps businesses identify duplicitous subscriptions and license redundancies. Ramp also alerts customers when they can save money on annual versus monthly subscriptions, which it says has led many customers to do away with established T&E platforms like Concur or Expensify.
All told, the company claims that the average customer saves 3.3% per year on expenses after switching to its platform — and all that is before it brings Buyer into the fold.