The last year of pandemic living has been real-world, and sometimes harrowing, proof of how important it can be to have efficient and well-equipped emergency response services in place. They can help people remotely if need be, and when they cannot, they make sure that in-person help can be dispatched quickly in medical and other situations. Today, a company that’s building cloud-based tools to help with this process is announcing a round of funding as it continues to grow.
RapidDeploy, which provides computer-aided dispatch technology as a cloud-based service for 911 centers, has closed a round of $29 million, a Series B round of funding that will be used both to grow its business, and to continue expanding the SaaS tools that it provides to its customers. In the startup’s point of view, the cloud is essential to running emergency response in the most efficient manner.
“911 response would have been called out on a walkie talkie in the early days,” said Steve Raucher, the co-founder and CEO of RapidDeploy, in an interview. “Now the cloud has become the nexus of signals.”
Washington, DC-based RapidDeploy provides data and analytics to 911 centers — the critical link between people calling for help and connecting those calls with the nearest medical, police or fire assistance — and today it has about 700 customers using its RadiusPlus, Eclipse Analytics and Nimbus CAD products.
That works out to about 10% of all 911 centers in the US (7,000 in total), and covering 35% of the population (there are more centers in cities and other dense areas). Its footprint includes state coverage in Arizona, California, and Kansas. It also has operations in South Africa, where it was originally founded.
The funding is coming from an interesting mix of financial and strategic investors. Led by Morpheus Ventures, the round also had participation from GreatPoint Ventures, Ericsson Ventures, Samsung Next Ventures, Tao Capital Partners, Tau Ventures, among others. It looks like the company had raised about $30 million before this latest round, according to PitchBook data. Valuation is not being disclosed.
Ericsson and Samsung, as major players in the communication industry, have a big stake in seeing through what will be the next generation of communications technology and how it is used for critical services. (And indeed, one of the big leaders in legacy and current 911 communications is Motorola, a would-be competitor of both.) AT&T is also a strategic go-to-market (distribution and sales) partner of RapidDeploy’s, and it also has integrations with Apple, Google, Microsoft, and OnStar to feed data into its system.
The business of emergency response technology is a fragmented market. Raucher describes them as “mom-and-pop” businesses, with some 80% of them occupying four seats or less (a testament to the fact that a lot of the US is actually significantly less urban than its outsized cities might have you think it is), and in many cases a lot of these are operating on legacy equipment.
However, in the US in the last several years — buffered by innovations like the Jedi project and FirstNet, a next-generation public safety network — things have been shifting. RapidDeploy’s technology sits alongside (and in some areas competes with) companies like Carbyne and RapidSOS, which have been tapping into the innovations of cell phone technology both to help pinpoint people and improve how to help them.
RapidDeploy’s tech is based around its RadiusPlus mapping platform, which uses data from smart phones, vehicles, home security systems and other connected devices and channels it to its data stream, which can help a center determine not just location but potentially other aspects of the condition of the caller. Its Eclipse Analytics services, meanwhile, are meant to act as a kind of assistant to those centers to help triage situations and provide insights into how to respond. The Nimbus CAD then helps figure out who to call out and routing for response.
Longer term, the plan will be to leverage cloud architecture to bring in new data sources and ways of communicating between callers, centers and emergency care providers.
“It’s about being more of a triage service rather than a message switch,” Raucher said. “As we see it, the platform will evolve with customers’ needs. Tactical mapping ultimately is not big enough to cover this. We’re thinking about unified communications.” Indeed, that is the direction that many of these services seem to be going, which can only be a good thing for us consumers.
“The future of emergency services is in data, which creates a faster, more responsive 9-1-1 center,” said Mark Dyne, Founding Partner at Morpheus Ventures, in a statement. “We believe that the platform RapidDeploy has built provides the necessary breadth of capabilities that make the dream of Next-Gen 9-1-1 service a reality for rural and metropolitan communities across the nation and are excited to be investing in this future with Steve and his team.” Dyne has joined the RapidDeploy board with this round.
Weav, which is building a universal API for commerce platforms, is emerging from stealth today with $4.3 million in funding from a bevy of investors, and a partnership with Brex.
Founded last year by engineers Ambika Acharya, Avikam Agur and Nadav Lidor after participating in the W20 YC batch, Weav joins the wave of fintech infrastructure companies that aim to give fintechs and financial institutions a boost. Specifically, Weav’s embedded technology is designed to give these organizations access to “real time, user-permissioned” commerce data that they can use to create new financial products for small businesses.
Its products allow its customers to connect to multiple platforms with a single API that was developed specifically for the commerce platforms that businesses use to sell products and accept payments. Weav operates under the premise that allowing companies to build and embed new financial products creates new opportunities for e-commerce merchants, creators and other entrepreneurs.
Left to right: Co-founders Ambika Acharya, Nadav Lidor and Avikam Agur; Image courtesy of Weav
In a short amount of time, Weav has seen impressive traction. Recently, Brex launched Instant Payouts for Shopify sellers using the Weav API. It supports platform integrations such as Stripe, Square, Shopify and PayPal. (More on that later.) Since its API went live in January, “thousands” of businesses have used new products and services built on Weav’s infrastructure, according to Lidor. Its API call volume is growing 300% month over month, he said.
And, the startup has attracted the attention of a number of big-name investors, including institutions and the founders of prominent fintech companies. Foundation Capital led its $4.3 million seed round, which also included participation from Y Combinator, Abstract Ventures, Box Group, LocalGlobe, Operator Partners, Commerce Ventures and SV Angel.
A slew of founders and executives also put money in the round, including Brex founders Henrique Dubugras and Pedro Franceschi; Ramp founder Karim Atiyeh; Digits founders Jeff Seibert and Wayne Chang; Hatch founder Thomson Nguyen; GoCardless founder Matt Robinson and COO Carlos Gonzalez-Cadenas; Vouch founder Sam Hodges; Plaid’s Charley Ma as well as executives from fintechs such as Square, Modern Treasury and Pagaya.
Foundation Capital’s Angus Davis said his firm has been investing in fintech infrastructure for over a decade. And personally, before he became a VC, Davis was the founder and CEO of Upserve, a commerce software company. There, he says, he witnessed firsthand “the value of transactional data to enable new types of lending products.”
Foundation has a thesis around the type of embedded fintech that Weav has developed, according to Davis. And it sees a large market opportunity for a new class of financial applications to come to market built atop Weav’s platform.
“We were excited by Weav’s vision of a universal API for commerce platforms,” Davis wrote via email. “Much like Plaid and Envestnet brought universal APIs to banking for consumers, Weav enables a new class of B2B fintech applications for businesses.”
Weav says that by using its API, companies can prompt their business customers to “securely” connect their accounts with selling platforms, online marketplaces, subscription management systems and payment gateways. Once authenticated, Weav aggregates and standardizes sales, inventory and other account data across platforms and develops insights to power new products across a range of use cases, including lending and underwriting; financial planning and analysis; real-time financial services and business management tools.
For the last few years, there’s been a rise of API companies, as well as openness in the financial system that’s largely been focused on consumers, Lidor points out.
“For example, Plaid brings up very rich data about consumers, but when you think about businesses, oftentimes that data is still locked up in all kinds of systems,” he told TechCrunch. “We’re here to provide some of the building blocks and the access to data from everything that has to do with sales and revenue. And, we’re really excited about powering products that are meant to make the lives of small businesses and e-commerce, sellers and creators much easier and be able to get them access to financial products.”
In the case of Brex, Weav’s API allows the startup to essentially offer instant access to funds that otherwise would take a few days or a few weeks for businesses to access.
“Small businesses need access as quickly as possible to their revenue so that they can fund their operations,” Lidor said.
Brex co-CEO Henrique Dubugras said that Weav’s API gives the company the ability to offer real-time funding to more customers selling on more platforms, which saved the company “thousands of engineering hours” and accelerated its rollout timeline by months.
Clearly, the company liked what it saw, considering that its founders personally invested in Weav. Is Weav building the “Plaid for commerce”? Guess only time will tell.
Experts believe the data-lake market will hit a massive $31.5 billion in the next six years, a prediction that has led to much concern among large enterprises. Why? Well, an increase in data lakes equals an increase in public cloud consumption — which leads to a soaring amount of notifications, alerts and security events.
Around 56% of enterprise organizations handle more than 1,000 security alerts every day and 70% of IT professionals have seen the volume of alerts double in the past five years, according to a 2020 Dark Reading report that cited research by Sumo Logic. In fact, many in the ONUG community are on the order of 1 million events per second. Yes, per second, which is in the range of tens of peta events per year.
Now that we are operating in a digitally transformed world, that number only continues to rise, leaving many enterprise IT leaders scrambling to handle these events and asking themselves if there’s a better way.
Why isn’t there a standardized approach for dealing with security of the public cloud — something so fundamental now to the operation of our society?
Compounding matters is the lack of a unified framework for dealing with public cloud security. End users and cloud consumers are forced to deal with increased spend on security infrastructure such as SIEMs, SOAR, security data lakes, tools, maintenance and staff — if they can find them — to operate with an “adequate” security posture.
Public cloud isn’t going away, and neither is the increase in data and security concerns. But enterprise leaders shouldn’t have to continue scrambling to solve these problems. We live in a highly standardized world. Standard operating processes exist for the simplest of tasks, such as elementary school student drop-offs and checking out a company car. But why isn’t there a standardized approach for dealing with security of the public cloud — something so fundamental now to the operation of our society?
The ONUG Collaborative had the same question. Security leaders from organizations such as FedEx, Raytheon Technologies, Fidelity, Cigna, Goldman Sachs and others came together to establish the Cloud Security Notification Framework. The goal is to create consistency in how cloud providers report security events, alerts and alarms, so end users receive improved visibility and governance of their data.
Here’s a closer look at the security challenges with public cloud and how CSNF aims to address the issues through a unified framework.
A few key challenges are sparking the increased number of security alerts in the public cloud:
The first two challenges go hand in hand. In March of last year, when companies were forced to shut down their offices and shift operations and employees to a remote environment, the wall between cyber threats and safety came crashing down. This wasn’t a huge issue for organizations already operating remotely, but for major enterprises the pain points quickly boiled to the surface.
Numerous leaders have shared with me how security was outweighed by speed. Keeping everything up and running was prioritized over governance. Each employee effectively held a piece of the company’s network edge in their home office. Without basic governance controls in place or training to teach employees how to spot phishing or other threats, the door was left wide open for attacks.
In 2020, the FBI reported its cyber division was receiving nearly 4,000 complaints per day about security incidents, a 400% increase from pre-pandemic figures.
Another security issue is the growing intelligence of cybercriminals. The Dark Reading report said 67% of IT leaders claim a core challenge is a constant change in the type of security threats that must be managed. Cybercriminals are smarter than ever. Phishing emails, entrance through IoT devices and various other avenues have been exploited to tap into an organization’s network. IT teams are constantly forced to adapt and spend valuable hours focused on deciphering what is a concern and what’s not.
Without a unified framework in place, the volume of incidents will spiral out of control.
CSNF will prove beneficial for cloud providers and IT consumers alike. Security platforms often require integration timelines to wrap in all data from siloed sources, including asset inventory, vulnerability assessments, IDS products and past security notifications. These timelines can be expensive and inefficient.
But with a standardized framework like CSNF, the integration process for past notifications is pared down and contextual processes are improved for the entire ecosystem, efficiently reducing spend and saving SecOps and DevSecOps teams time to focus on more strategic tasks like security posture assessment, developing new products and improving existing solutions.
Here’s a closer look at the benefits a standardized approach can create for all parties:
Working together, all groups can effectively reduce friction from security alerts and create a controlled cloud environment for years to come.
CSNF is in the building phase. Cloud consumers have banded together to compile requirements, and consumers continue to provide guidance as a prototype is established. The cloud providers are now in the process of building the key component of CSNF, its Decorator, which provides an open-source multicloud security reporting translation service.
The pandemic created many changes in our world, including new security challenges in the public cloud. Reducing IT noise must be a priority to continue operating with solid governance and efficiency, as it enhances a sense of security, eliminates the need for increased resources and allows for more cloud consumption. ONUG is working to ensure that the industry stays a step ahead of security events in an era of rapid digital transformation.
Nearly exactly one month ago, digital real estate platform Loft announced it had closed on $425 million in Series D funding led by New York-based D1 Capital Partners. The round included participation from a mix of new and existing investors such as DST, Tiger Global, Andreessen Horowitz, Fifth Wall and QED, among many others.
At the time, Loft was valued at $2.2 billion, a huge jump from its being just near unicorn territory in January 2020. The round marked one of the largest ever for a Brazilian startup.
Now, today, São Paulo-based Loft has announced an extension to that round with the closing of $100 million in additional funding that values the company at $2.9 billion. This means that the 3-year-old startup has increased its valuation by $700 million in a matter of weeks.
Baillie Gifford led the Series D-2 round, which also included participation from Tarsadia, Flight Deck, Caffeinated and others. Individuals also put money in the extension, including the founders of Better (Vishal Garg), GoPuff, Instacart, Kavak and Sweetgreen.
Loft has seen great success in its efforts to serve as a “one-stop shop” for Brazilians to help them manage the home buying and selling process.
Image courtesy of Loft
In 2020, Loft saw the number of listings on its site increase “10 to 15 times,” according to co-founder and co-CEO Mate Pencz. Today, the company actively maintains more than 13,000 property listings in approximately 130 regions across São Paulo and Rio de Janeiro, partnering with more than 30,000 brokers. Not only are more people open to transacting digitally, more people are looking to buy versus rent in the country.
“We did more than 6x YoY growth with many thousands of transactions over the course of 2020,” Pencz told TechCrunch at the time of the company’s last raise. “We’re now growing into the many tens of thousands, and soon hundreds of thousands, of active listings.”
The decision to raise more capital so soon was due to a variety of factors. For one, Loft has received “overwhelming investor interest” even after “a very, very oversubscribed main round,” Pencz said.
“We have seen a continued acceleration in our market share growth, especially in São Paulo and Rio de Janeiro, the two markets we currently operate in,” he added. “We saw an opportunity to grow even faster with additional capital.”
Pencz also pointed out that Baillie Gifford has relatively large minimum check size requirements, which led to the extension being conducted at a higher price and increased the total round size “by quite a bit to be able to accommodate them.”
While the company was less forthcoming about its financials as of late, it told me last year that it had notched “over $150 million in annualized revenues in its first full year of operation” via more than 1,000 transactions.
The company’s revenues and GMV (gross merchandise value) “increased significantly” in 2020, according to Pencz, who declined to provide more specifics. He did say those figures are “multiples higher from where they were,” and that Loft has “a very clear horizon to profitability.”
Pencz and Florian Hagenbuch founded Loft in early 2018 and today serve as its co-CEOs. The aim of the platform, in the company’s words, is “bringing Latin American real estate into the e-commerce age by developing online alternatives to analogue legacy processes and leveraging data to create transparency in highly opaque markets.” The U.S. real estate tech company with the closest model to Loft’s is probably Zillow, according to Pencz.
In the United States, prospective buyers and sellers have the benefit of MLSs, which in the words of the National Association of Realtors, are private databases that are created, maintained and paid for by real estate professionals to help their clients buy and sell property. Loft itself spent years and many dollars in creating its own such databases for the Brazilian market. Besides helping people buy and sell homes, it offers services around insurance, renovations and rentals.
In 2020, Loft also entered the mortgage business by acquiring one of the largest mortgage brokerage businesses in Brazil. The startup now ranks among the top-three mortgage originators in the country, according to Pencz. When it comes to helping people apply for mortgages, he likened Loft to U.S.-based Better.com.
This latest financing brings Loft’s total funding raised to an impressive $800 million. Other backers include Brazil’s Canary and a group of high-profile angel investors such as Max Levchin of Affirm and PayPal, Palantir co-founder Joe Lonsdale, Instagram co-founder Mike Krieger and David Vélez, CEO and founder of Brazilian fintech Nubank. In addition, Loft has also raised more than $100 million in debt financing through a series of publicly listed real estate funds.
Loft plans to use its new capital in part to expand across Brazil and eventually in Latin America and beyond. The company is also planning to explore more M&A opportunities.
Today’s children and teens want more power and control over their spending.
And while there are a number of financial services and apps out there aimed at helping this demographic save and invest money (Greenlight being among the most popular and well-known), one startup is coming at the space from another angle: helping younger people also better manage their spend.
Till Financial describes itself as a collaborative family financial tool that aims to empower kids to become smarter spenders. The New York-based company’s banking platform is designed to encourage “open and honest” discussions between parents and their kids. And it has just raised $5 million to help it advance on that goal.
A slew of investors put money in the round, including Elysian Park Ventures, Melinda Gates’ venture fund Pivotal Ventures with Magnify Ventures, Afore Capital, Luge Capital, Alpine Meridian Ventures, The Gramercy Fund, SM Ventures (the family office of the founders/CEOs of Stadium Goods) and Lightspeed Venture Partners’ Scout Fund. Also participating were angel investors such as the founders of fintech Petal, the founders of alcohol marketplace Drizly, the president of Transactis, and the president of 1800Flowers.
Part of Till’s goal is to help kids “learn by doing” and gain confidence in spending decisions. It arms them with a bank account, digital and physical debit card and goal-based savings. For example, say a teen wants to buy an iPad, they can set up an account that they can save toward that iPad and give family members (such as grandparents, for example) the opportunity to pitch in the same amount, or more. They can also set up recurring payments for things like Netflix or Spotify subscriptions so they can get a taste of what it’s like to pay regular bills.
“Parents and the current banking options miss the point when they just focus on savings. We need to first prepare kids to be Smarter Spenders, supported by savings and investing,” said Taylor Burton, who founded the company with Tom Pincince. “On Till, kids learn to spend with intention and purpose, while parents gain confidence and trust based on transparency and accountability.”
To Pincince, the market is clearly underserved.
“The legacy banks really don’t care about this young person and the early digital players are really missing the mark,” he said.
And despite the plethora of apps targeting the demographic, Pincince believes there’s plenty of room for the right players.
“The reality is you’re talking about a swath of kids under the age of 18 and over the age of eight that is the single largest unbanked population,” he said. “We’re not fighting to be the top of your son’s wallet. We’re fighting to be the first product into that wallet.”
Indeed, it’s a big market — the average middle-class family in the U.S. spends $284,570 per child by the time they turn 18.
The platform is free to all families and, early on, attracted the attention of Peggy Mangot, operating partner/COO of PayPal Ventures. She invested personally in Till in its pre-seed rounds. Prior to PayPal, Mangot ran development of Greenhouse, Well Fargo’s fee-free mobile banking app that aimed to help younger users build responsible spending habits.
Mangot has three kids and recalls that when they were shopping online, she’d give them her credit card. Or, if they were going to the corner store or meeting with friends, she’d give them cash.
“But that way, the money is meaningless to them. They didn’t really know how to understand what things cost and there was no sense of ownership,” she said. “It was just me handing over cash or a card.”
What attracted her the most about Till, Mangot said, was the team’s approach to treat younger people “with respect and agency.”
She also believes that by helping children and teens understand important financial lessons at a younger age, the world will ultimately be full of more responsible adults.
“By putting these tools in the hands of these young people early, they’ll have years and years of experience before they’re more independent and have to manage their paycheck and bills,” Mangot told TechCrunch. “Once you have mass adoption, it’s going to create a much more financially literate, confident and in control set of young adults than we’ve ever had.”
Besides making money on interchange fees, Till aims to earn revenue by partnering with merchants to offer rewards to users. It also plans to earn referral fees by referring the teens to other financial institutions when they get older and have different needs.
“It’s not our intention to be your son or daughter’s forever bank. It’s our intention to be the first bank,” Pincince said. “So, they hit the age of maturity, we’re actually giving them a high-five off of our platform and introducing them to maybe their first college loan or their first credit card.”
Buy now, pay later is a way of paying for purchases via installment loans that generally have no interest. The concept has grown in popularity in recent years, especially in markets such as the United States, Europe and Australia. Numerous players abound, all fighting for market share — from Affirm to Klarna to Afterpay, among others.
But notably, none of these bigger players have yet to penetrate another very large market — Latin America. Enter Nelo, a startup founded by former Uber international growth team leads, which is building buy now, pay later in Mexico. The company is already live with more than 45 merchants and over 150,000 users.
San Francisco-based fintech-focused VC firm Homebrew led its recent seed round of $3 million, which also included participation from Susa Ventures, Crossbeam, Rogue Capital, Unpopular Ventures and others. With the latest capital infusion, Nelo has raised a total of $5.6 million since its 2019 inception.
Nelo is not the only player in the Mexican market. A number of others, including Alchemy and Addi, have recently outlined plans for buy now, pay later offerings in the region. But where Nelo has an advantage, believes CEO Kyle Miller, is its established relationships with about 45 merchants.
“What I’m excited about is the relationship with the merchants,” Miller told TechCrunch. “If we find a large global one and increase conversion for them, that is our defensibility [against competitors]. What’s important here is signing on merchants, since they usually only have one offering in their checkout.”
He and co-founder Stephen Hebson used to work for Uber’s international growth team, growing financial services products in India, Mexico, China and Brazil.
“We got to see a cross market where countries were accelerating and where others weren’t,” Miller recalls. “For example, China was a leader in mobile payments and digital finance in India was completely transformed.”
Nelo co-founders Stephen Hebson and Kyle Miller; Image courtesy of Nelo
But in markets like Mexico, the percentage of cash payments for trips was very high. And to Miller and Hebson, this spelled opportunity.
Nelo launched its first product in Mexico in January 2020, similar to a debit card offering from a neobank. In the middle of the year, the company launched credit installment loans.
“It became immediately clear that it was going to be our most popular feature,” Miller said. “By the end of the year, it was the vast majority of our business and something that our users were telling their friends about. We were solving a real pain point.”
Indeed, cash remains the dominant method of payment in Mexico, with an estimated 86% of all payments being in the form of cash. According to eMarketer, the region was the fastest-growing e-commerce market in the world in 2020, with 37% year over year growth.
“Access to credit is something we take for granted in the U.S.,” Miller said. “By the end of the year, we realized this was the future of business, and we decided to focus just on credit.”
In March, Nelo launched its first product via an Android app and will be launching a web app soon.
Customers can use its offering like a credit card, connecting directly with merchants such as Netflix and Spotify. Many users are paying for things like utility bills and cell phone bills, turning them from prepaid to postpay.
With its current product, the company has lent about $2 million, and is seeing growth of about 20% month over month.
“We’re seeing massive demand for this new product in the way of organic signups,” Miller said, “for all the reasons Buy Now, Pay Later has been successful in markets like the U.S., Europe and Australia.”
Paying for installments is already common in Latin America, particularly in Brazil, so the concept is not foreign to residents in the region.
“We expected this is soon going to be a competitive market, so we’re hiring data scientists and engineers to continue improving our product, and grow,” Miller said.
Nelo has about 14 employees with an engineering team in New York.
Homebrew Partner Satya Patel says he’s excited about Nelo because he believes the startup “solves a serious problem related to the lack of credit for Mexican consumers.”
“Credit card penetration is less than 10% in Mexico and other forms of credit are effectively non-existent,” he wrote via email. “Nelo makes it possible for Mexicans to easily and inexpensively increase their purchasing power at the point of sale. And importantly, Nelo is delivering this solution online, supporting growing interest in e-commerce, and also offline, where consumers regularly shop today.”
Patel adds that what Nelo is building is valuable because he is not aware of any reliable, comprehensive consumer credit rating data set in Mexico.
“They are building underwriting models based on proprietary data and growing the merchant network at an incredible rate,” he said. “This buy now, pay later opportunity is untapped in Mexico but requires a very different approach than what has been successful in other markets.”
The Nelo team, according to Patel, understands the nuances of the market and “is executing at an exceptional pace.”
We all know the COVID-19 pandemic has accelerated digital adoption in a number of areas, particularly in the financial services space. Within financial services, there are few spaces hotter than B2B payments.
With a $120 trillion market size, it’s no surprise that an increasing number of fintechs focused on digitizing payments have been attracting investor interest. The latest is Routable, which has nabbed $30 million in a Series B raise that included participation from a slew of high-profile angel investors.
Unlike most raises, Routable didn’t raise the capital from a bunch of VC firms. Sam Altman, CEO of OpenAI and former president of Y Combinator, and Jack Altman, CEO of Lattice, led the round. (The pair are brothers, in case you didn’t know.)
SoftBank-backed unicorn Flexport also participated, along with a number of angel investors, including Instacart co-founder Max Mullen, Airbnb co-founder Joe Gebbia, Box co-founder and CEO Aaron Levie, Salesforce founder and CEO Marc Benioff (who also started TIME Ventures), DoorDash’s Gokul Rajaram, early Stripe employee turned angel Lachy Groom and Behance founder Scott Belsky.
The Series B comes just over eight months after Routable came out of stealth with a $12 million Series A.
CEO Omri Mor and CTO Tom Harel founded Routable in 2017 after previously working at marketplaces and recognizing the need for better internal tools for scaling business payments. They went through a Y Combinator batch and embarked on a process of interviewing hundreds of CFOs and finance leaders.
The pair found that the majority of the business payment tools that were out there were built for large companies with a low volume of business payments.
“After running enough customer development we identified a huge scramble to solve high-volume business payments, and that’s what we double down on,” Mor told TechCrunch.
Routable’s mission is simple: to automate bill payment and invoicing processes (also known as accounts payables and accounts receivables), so that businesses can focus on scaling their core product offerings without worrying about payments.
“A business payment is more like moving a bill through Congress, where a consumer payment is more like a tweet,” Mor said. “We automate every step from purchase order to reconciliation and by extending an API, companies don’t have to build their own inner integration. We handle it, while helping them move their money faster.”
Since its August 2020 raise, Routable has seen its revenue grow by 380%, according to Mor. And last month alone, the company tripled its amount of new customers compared to the month prior. Customers include Snackpass, Ticketmaster and Re-Max, among others.
“We’ve been beating every quarter expectation for the past 18 months,” he told TechCrunch.
The company started out focused on the startup and SMB customer, but based on demand and feedback, is expanding into the enterprise space as well.
It has established integrations with QuickBooks, NetSuite and Xero and is looking to invest moving forward in integrating with Oracle, Microsoft Dynamics Workday and SAP.
“A lot of our investment moving forward is to be able to bring that same level of automation and ease of use that we do for SMB and mid-market customers to the enterprise world,” Mor told TechCrunch.
Lead investor Sam Altman is in favor of that approach, noting that the recent booms in the gig and creator economies are leading to a big spike in the volume of both payments and payees.
“With the addition of enterprise capabilities, we think this can lead to an enormous business,” he said.
The round brings Routable’s total raised to $46 million. The company has headquarters in San Francisco and Seattle with primarily a remote team.
Sam Altman also told me that he was drawn to Routable after having experienced the pain of high-volume business payments himself and working with many startup founders who had experienced the same problem.
He was also impressed with the company’s engineering-forward approach.
“They can offer the best service by being embedded in a company’s flow of funds instead of the usual approach of just being an interface for moving money,” Altman said.
With regard to the other investors, Mor said the decision to partner with founders of a number of prominent tech companies was intentional so that Routable could benefit from their “deep enterprise and high-growth experience.”
As mentioned above, the B2B payments space is white-hot. Earlier this year, Melio, which provides a platform for SMBs to pay other companies electronically using bank transfers, debit cards or credit — along with the option of cutting paper checks for recipients if that is what the recipients request — closed on $110 million in funding at a $1.3 billion valuation.
E-wallets are rapidly gaining popularity in the Philippines, overtaking credit cards, which have a penetration rate of under 10%. Fintech startup Plentina is leveraging that trend with buy now, pay later (BNPL) installment loans that can be used and repaid through e-wallets.
The company announced today it has closed a $2.2 million seed round, co-led by former Tableau executive and ClearGraph chief executive officer Andrew Vigneault, Unpopular Ventures and DV Collective. Other participants included JG Digital Equity Ventures (JGDEV), Amino Capital, Canaan Partners Scout Fund and Ignite Impact Fund.
Its last funding was $750,000 pre-seed round raised last year from investors including Techstars, Emergent Ventures and the 500 Startups Vietnam Fund. Plentina also participated in the Techstars Western Union and Stanford’s StartX accelerator programs.
Plentina launched in the Philippines in October 2020 and has been downloaded more than 30,000 times. Its merchant partners include 7-Eleven Philippines and Smart Communications, a telecom provider with more than 70 million prepaid subscribers. The company will use its seed round to onboard more merchant partners in the Philippines before expanding in Southeast Asia and other regions.
Plentina uses machine learning models to gauge the creditworthiness of loan applicants, drawing on founders Kevin Gabayan and Earl Valencia’s data science backgrounds. Gabayan was data science lead at Bump Technologies and then spent five years working at Google after it acquired the startup. Valencia’s experience includes serving as managing director of digital transformation at Charles Schwab.
“We’re making BNPL work in emerging markets where few have credit scores and merchants can’t easily integrate technology,” Valencia, Plentina’s chief business officer, told TechCrunch. In addition to alternative credit scoring, the startup also focuses on making installment payment work with merchants’ legacy workflows, he said.
So for, Plentina has generated 10 million credit scores from alternative data sources, including mobile data obtained with user permission and retail loyalty programs, and will continue to develop its models as its merchant partnerships and customer base grows. Customers who build good credit scores with Plentina can increase their credit limits and unlock more offers.
Loans have a flat 5% service fee, with no interest. 7-Eleven and Smart Communications both offer 14 day loans, and Plentina will introduce more dynamic loan terms in the future, Valencia said. Loans can be used to purchase goods at all of 7-Eleven’s 3000 stores in the Philippines and prepaid mobile airtime with Smart Communications.
Other installment loan services in the Philippines include BillEase, Tendopay and Cashalo. Valencia said Plentina “aim[s] to be a customer’s financial service partner throughout their lifetime. We’re starting by offering closed-loop store credit for essentials purchases for consumers to easily establish their financial identity. As a customer’s financial wellness matures, we can graduate them into additional financial services.”
In a press statement about his investment, Vigneault said, “I’ve worked with many early stage fintech companies over the years. However, I’ve come across few founders who are as impressive as Kevin and Earl and have been able to achieve such levels of success with customers, channel partners, and product at such an early stage.”
Digital transformation has been one of the biggest catchphrases of the past year, with many an organization forced to reckon with aging IT, a lack of digital strategy, or simply the challenges of growth after being faced with newly-remote workforces, customers doing everything online and other tech demands.
Now, a startup called Upstack that has built a platform to help those businesses evaluate how to grapple with those next steps — including planning and costing out different options and scenarios, and then ultimately buying solutions — is announcing financing to do some growth of its own.
The New York startup has picked up funding of $50 million, money that it will be using to continue building out its platform and expanding its services business.
The funding is coming from Berkshire Partners, and it’s being described as an “initial investment”. The firm, which makes private equity and late-stage growth investments, typically puts between $100 million and $1 billion in its portfolio companies so this could end up as a bigger number, especially when you consider the size of the market that Upstack is tackling: the cloud and internet infrastructure brokerage industry generates annual revenues “in excess of $70 billion,” the company estimates.
We’re asking about the valuation, but PitchBook notes that the median valuation in its deals is around $211 million. Upstack had previously raised around $35 million.
Upstack today already provides tools to large enterprises, government organizations, and smaller businesses to compare offerings and plan out pricing for different scenarios covering a range of IT areas, including private, public and hybrid cloud deployments; data center investments; network connectivity; business continuity and mobile services, and the plan is to bring in more categories to the mix, including unified communications and security.
Notably, Upstack itself is profitable and names a lot of customers that themselves are tech companies — they include Cisco, Accenture, cloud storage company Backblaze, Riverbed and Lumen — a mark of how digital transformation and planning for it are not necessarily a core competency even of digital businesses, but especially those that are not technology companies. It says it has helped complete over 3,700 IT projects across 1,000 engagements to date.
“Upstack was founded to bring enterprise-grade advisory services to businesses of all sizes,” said Christopher Trapp, founder and CEO, in a statement. “Berkshire’s expertise in the data center, connectivity and managed services sectors aligns well with our commitment to enabling and empowering a world-class ecosystem of technology solutions advisors with a platform that delivers higher value to their customers.”
The core of the Upstack’s proposition is a platform that system integrators, or advisors, plus end users themselves, can use to design and compare pricing for different services and solutions. This is an unsung but critical aspect of the ecosystem: We love to hear and write about all the interesting enterprise technology that is being developed, but the truth of the matter is that buying and using that tech is never just a simple click on a “buy” button.
Even for smaller organizations, buying tech can be a hugely time-consuming task. It involves evaluating different companies and what they have to offer — which can differ widely in the same category, and gets more complex when you start to compare different technological approaches to the same problem.
It also includes the task of designing solutions to fit one’s particular network. And finally, there are the calculations that need to be made to determine the real cost of services once implemented in an organization. It also gives users the ability to present their work, which also forms a critical part of the evaluating and decision-making process. When you think about all of this, it’s no wonder that so many organizations have opted to follow the “if it ain’t broke, don’t fix it” school of digital strategy.
As technology has evolved, the concept of digital transformation itself has become more complicated, making tools like Upstack’s more in demand both by companies and the people they hire to do this work for them. Upstack also employs a group of about 15 advisors — consultants — who also provide insight and guidance in the procurement process, and it seems some of the funding will also be used to invest in expanding that team.
(Incidentally, the model of balancing technology with human experts is one used by other enterprise startups that are built around the premise of helping businesses procure technology: BlueVoyant, a security startup that has built a platform to help businesses manage and use different security services, also retains advisors who are experts in that field.)
The advisors are part of the business model: Upstack’s customers can either pay Upstack a consulting fee to work with its advisors, or Upstack receives a commission from suppliers that a company ends up using, having evaluated and selected them via the Upstack platform.
The company competes with traditional systems integrators and consultants, but it seems that the fact that it has built a tech platform that some of its competitors also use is one reason why it’s caught the eye of investors, and also seen strong growth.
Indeed, when you consider the breadth of services that a company might use within their infrastructure — whether it’s software to run sales or marketing, or AI to run a recommendation for products on a site, or business intelligence or RPA — it will be interesting to see how and if Upstack considers deeper moves into these areas.
“Upstack has quickly become a leader in a large, rapidly growing and highly fragmented market,” said Josh Johnson, principal at Berkshire Partners, in a statement. “Our experience has reinforced the importance of the agent channel to enterprises designing and procuring digital infrastructure. Upstack’s platform accelerates this digital transformation by helping its advisors better serve their enterprise customers. We look forward to supporting Upstack’s continued growth through M&A and further investment in the platform.”
Risk and compliance startup LogicGate has confirmed a data breach. But unless you’re a customer, you probably didn’t hear about it.
An email sent by LogicGate to customers earlier this month said on February 23 an unauthorized third-party obtained credentials to its Amazon Web Services-hosted cloud storage servers storing customer backup files for its flagship platform Risk Cloud, which helps companies to identify and manage their risk and compliance with data protection and security standards. LogicGate says its Risk Cloud can also help find security vulnerabilities before they are exploited by malicious hackers.
The credentials “appear to have been used by an unauthorized third party to decrypt particular files stored in AWS S3 buckets in the LogicGate Risk Cloud backup environment,” the email read.
“Only data uploaded to your Risk Cloud environment on or prior to February 23, 2021, would have been included in that backup file. Further, to the extent you have stored attachments in the Risk Cloud, we did not identify decrypt events associated with such attachments,” it added.
LogicGate did not say how the AWS credentials were compromised. An email update sent by LogicGate last Friday said the company anticipates finding the root cause of the incident by this week.
But LogicGate has not made any public statement about the breach. It’s also not clear if LogicGate contacted all of its customers or only those whose data was accessed. LogicGate counts Capco, SoFi, and Blue Cross Blue Shield of Kansas City as customers.
We sent a list of questions, including how many customers were affected and if the company has alerted U.S. state authorities as required by state data breach notification laws. When reached, LogicGate chief executive Matt Kunkel confirmed the breach but declined to comment citing an ongoing investigation. “We believe it’s best to communicate developers directly to our customers,” he said.
Kunkel would not say, when asked, if the attacker also exfiltrated the decrypted customer data from its servers.
Data breach notification laws vary by state, but companies that fail to report security incidents can face heavy fines. Under Europe’s GDPR rules, companies can face fines of up to 4% of their annual turnover for violations.
In December, LogicGate secured $8.75 million in fresh funding, totaling more than $40 million since it launched in 2015.
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1Password, the password management service that competes with the likes of LastPass and BitWarden, today announced a major push beyond the basics of password management and into the infrastructure secrets management space. To do so, the company has acquired secrets management service SecretHub and is now launching its new 1Password Secrets Automation service.
1Password did not disclose the price of the acquisition. According to CrunchBase, Netherlands-based SecretHub never raised any institutional funding ahead of today’s announcement.
For companies like 1Password, moving into the enterprise space, where managing corporate credentials, API tokens, keys and certificates for individual users and their increasingly complex infrastructure services, seems like a natural move. And with the combination of 1Password and its new Secrets Automation service, businesses can use a single tool that covers them from managing their employee’s passwords to handling infrastructure secrets. 1Password is currently in use by more then 80,000 businesses worldwide and a lot of these are surely potential users of its Secrets Automation service, too.
“Companies need to protect their infrastructure secrets as much if not more than their employees’ passwords,” said Jeff Shiner, CEO of 1Password. “With 1Password and Secrets Automation, there is a single source of truth to secure, manage and orchestrate all of your business secrets. We are the first company to bring both human and machine secrets together in a significant and easy-to-use way.”
In addition to the acquisition and new service, 1Password also today announced a new partnership with GitHub. “We’re partnering with 1Password because their cross-platform solution will make life easier for developers and security teams alike,” said Dana Lawson, VP of partner engineering and development at GitHub, the largest and most advanced development platform in the world. “With the upcoming GitHub and 1Password Secrets Automation integration, teams will be able to fully automate all of their infrastructure secrets, with full peace of mind that they are safe and secure.”
SpaceX is set to send a payload to the moon in 2023, using its larger (and infrequently used) Falcon Heavy launch vehicle. The mission will fly a lander built by space startup Astrobotic, which itself will be carrying NASA’s VIPER, or Volatiles Investigating Polar Exploration Rover (this is the agency that loves torturing language to come up with fun acronyms, after all).
The launch is currently set for later in the year, and this would be Falcon Heavy’s first moon mission if all goes to plan. It would not, however, be SpaceX’s first lunar outing, since the company has booked missions to launch lunar landers as early as 2022 on behalf of both Masten and Intuitive Machines. Those would both employ Falcon 9 rockets, however, at least according to current mission specs. Also, all of the above timelines so far exist only on paper, and in the business of space, delays and schedule shifts are far from unusual.
This mission is an important one for all involved, however, so they’re likely to prioritize its execution. For NASA, it’s a key mission in its longer-term goals for Artemis, the program through which it seeks to return humans to the moon, and eventually establish a more permanent scientific presence there both in orbit and on the surface. Part of establishing a surface station will rely on using in-situ resources, of which water would be a hugely important one.
Astrobotic won the contract to deliver VIPER on behalf of NASA last year. The mission profile includes landing the payload on the lunar South Pole, which is the intended target landing area for NASA’s Artemis missions involving human astronauts. The lander Astrobotic is sending for this task is its Griffin model, which is a larger craft vs. its Peregrine lander, giving it the extra space required to carry the VIPER, and making it necessary to use SpaceX’s heavier lift Falcon Heavy launch vehicle.
NASA’s ambitious target of landing astronauts back on the moon by 2024 is in flux as the new administration looks at timelines and budgets, but it still seems committed to making use of public-private partnerships to pave the way, whenever it does attain that goal. This first Griffin mission, along with an earlier planned Peregrine landing, are part of NASA’s Commercial Lunar Payload Services (CLPS) program, which sought private sector partners to build and deliver lunar landers with NASA as one customer.
HomeX, a home services platform for homeowners and service providers, has raised $90 million in a funding round led by New Mountain Capital.
New Mountain Capital, a New York-based investment firm with more than $30 billion in assets under management, was the only institutional investor to put money in this round alongside company executives. The company was bootstrapped until a 2019 $50 million-plus debt financing.
Founded in 2017, Chicago-based HomeX aims to “radically improve” home services by pairing service workers with homeowners, both virtually and in person. It also has built software, and offers services for, contractors that are aimed at helping them drive and manage demand “more efficiently.”
Notably, one of the company’s co-founders, CTO Simon Weaver, and several team members were on the development team of Evi, a startup that had built an AI program that can be communicated with using natural language via an app, that was acquired by Amazon in 2012. That technology was essentially the brain behind Amazon’s virtual assistant Alexa.
HomeX uses artificial intelligence to diagnose home issues virtually before a contractor even goes out to a home, with the goal of helping them resolve a problem faster (by having the necessary equipment ahead of time for example), which in turn makes customers happier.
“We’re using machine-generated content to create solutions that are specific to a homeowner’s issues,” said co-founder and president Victor Payen. “Using machines to understand symptoms, the questions to ask and to actually get to a diagnosis and a recommendation or resolution is where AI absolutely shines and allows us to do things that were not possible even three or five years ago.”
Co-founder and CEO Michael Werner worked in the $500 billion services industry for years (his family founded Werner Ladders) and recognized just how fragmented it was. He also acknowledges that, especially in certain markets, “there’s a terrible imbalance between very high demand and not enough contractors to do the work, or rather, a terrible labor shortage.”
HomeX Remote Assist in particular virtually connects homeowners (via phone, video or chat) with HomeX’s licensed technicians to diagnose and repair common home issues. That business unit has experienced more than 400% growth in less than a year, according to Werner. Last year, the company grew by “about 5x” the number of contractors on its platform. It declined to reveal revenue figures.
Image courtesy of HomeX
“For homeowners, we’re making home maintenance less complicated,” Werner said. “At the same time, we want to help the contractor succeed. Similar to how telemedicine has changed how medicine is delivered, HomeX Remote Assist is going to change the service experience for taking care of your home.”
Another area of HomeX’s business that is growing rapidly is its B2B offering. Home warranty and insurance companies see remote services “as very additive to make their business more efficient,” notes Payen.
“We are using some of our capital toward a pilot program and a number of business development opportunities there,” he said.
For now, while the company is not profitable overall, it is profitable in the services side of its business, according to Werner. It has 250 employees and is contracted with 750 service workers. Over the years, it has served “hundreds of thousands” of clients via its platform, defined by unique virtual and physical appointments.
New Mountain Capital Managing Director Harris Kealey said his firm viewed HomeX as a business that is primed to reshape the home and commercial services industry.
“The market is massive and the need for change and innovation is substantial,” he said in a written statement.
Another company in the space, Thumbtack, recently expanded into video home checkups. Thumbtack, a marketplace where you can hire local professionals for home improvement and other services such as repairs, in December acquired Setter, a startup which provided its customers with video home checkups conducted by experts, and then offered personalized plans for how to address any issues.
Thumbtack had laid off 250 employees at the end of March 2020, after the company saw big declines in its major markets. Since then, however, CEO Marco Zappacosta told TechCrunch there’s been “a renewed focus on the home and an acceleration of digital adoption.”
The Zebra, an Austin-based company that operates an insurance comparison site, has raised $150 million in a Series D round that propels it into unicorn territory.
Both the round size and valuation are a substantial bump from the $38.5 million Series C that Austin-based The Zebra raised in February of 2020. (The company would not disclose its valuation at that time, saying now only that its new valuation of over $1 billion is a “nice step up.”)
The Zebra also would not disclose the name of the firm that led its Series D round, but sources familiar with the deal said it was London-based Hedosophia. Existing backers Weatherford Capital and Accel also participated in the funding event.
The round size also is bigger than all of The Zebra’s prior rounds combined, bringing the company’s total raised to $261.5 million since its 2012 inception. Previous backers also include Silverton Partners, Ballast Point Ventures, Daher Capital, Floodgate Fund, The Zebra CEO Keith Melnick, KDT and others.
According to Melnick, the round was all primary, and included no debt or secondary.
The Zebra started out as a site for people looking for auto insurance via its real-time quote comparison tool. The company partners with the top 10 auto insurance carriers in the U.S. Over time, it’s also “naturally” evolved to offer homeowners insurance with the goal of eventually branching out into renters and life insurance. It recently launched a dedicated home and auto bundled product, although much of its recent growth still revolves around its core auto offering, according to Melnick.
Like many other financial services companies, The Zebra has benefited from the big consumer shift to digital services since the beginning of the COVID-19 pandemic.
And we know this because the company is one of the few that are refreshingly open about their financials. The Zebra doubled its net revenue in 2020 to $79 million compared to $37 million in 2019, according to Melnick, who is former president of travel metasearch engine Kayak. March marked the company’s highest-performing month ever, he said, with revenue totaling $12.5 million — putting the company on track to achieve an annual run rate of $150 million this year. For some context, that’s up from $8 million in September of 2020 and $6 million in May of 2020.
Also, its revenue per applicant has grown at a clip of 100% year over year, according to Melnick. And The Zebra has increased its headcount to over 325, compared to about 200 in early 2020.
“We’ve definitely improved our relationships with carriers and seen more carrier participation as they continue to embrace our model,” Melnick said. “And we’ve leaned more into brand marketing efforts.”
The Zebra CEO Keith Melnick. Image courtesy of The Zebra
The company was even profitable for a couple of months last year, somewhat “unintentionally,” according to Melnick.
“We’re not highly unprofitable or burning through money like crazy,” he told TechCrunch. “This new raise wasn’t to fund operations. It’s more about accelerating growth and some of our product plans. We’re pulling forward things that were planned for later in time. We still had a nice chunk of money sitting on our balance sheet.”
The company also plans to use its new capital to do more hiring and focus strongly on continuing to build The Zebra’s brand, according to Melnick. Some of the things the company is planning include a national advertising campaign and adding tools and information so it can serve as an “insurance advisor,” and not just a site that refers people to carriers. It’s also planning to create more “personalized experiences and results” via machine learning.
“We are accelerating our efforts to make The Zebra a household name,” Melnick said. “And we want a deeper connection with our users.” It also aims to be there for a consumer through their lifecycle — as they move from being renters to homeowners, for example.
And while an IPO is not out of the question, he emphasizes that it’s not the company’s main objective at this time.
“I definitely try not to get locked on to a particular exit strategy. I just want to make sure we continue to build the best company we can. And then, I think the exit will make itself apparent,” Melnick said. “I’m not blind and am very aware that public market valuations are strong right now and that may be the right decision for us, but for now, that’s not the ultimate goal for me.”
To the CEO, there’s still plenty of runway.
“This is a big milestone, but I do feel like for us that this is just the beginning,” he said. “We’ve just scratched the surface of it.”
Early investor Mark Cuban believes the company is at an inflection point.
” ‘Startup’ isn’t the right word anymore,” he said in a written statement. “The Zebra is a full fledged tech company that is taking on – and solving – some of the biggest challenges in the $638B insurance industry.”
Accel Partner John Locke said the firm has tripled down on its investment in The Zebra because of its confidence in not only what the company is doing but also its potential.
“In an increasingly noisy insurance landscape that includes insurtechs and traditional carriers, giving consumers the ability to compare everything in one place is is more and more valuable,” he told TechCrunch. “I think The Zebra has really seized the mantle of becoming the go-to site for people to compare insurance and then that’s showing up in the numbers, referral traffic and fundraise interest.”
Popular saving and investing app Acorns has acquired Pillar, an AI-powered startup built to help manage student loan debt, in its second acquisition of 2021.
New York-based Pillar helps consumers optimize their debt payments by focusing first on student loans. It launched in May 2019 with $5.5 million in seed funding led by Kleiner Perkins. The companies declined to reveal the financial terms of the deal, only noting that within six months of launching, Pillar managed over $500 million worth of student loan debt of more than 15,000 borrowers.
Michael Bloch dropped out of Stanford Business School and co-founded Pillar after he and his wife had amassed more than $500,000 of student loan debt after she graduated from law school. Prior to that, he had led the Strategy & Operations division for DoorDash, growing it to $100 million in revenue. The problem Pillar has aimed to tackle is massive. Student loan debt is the second-largest type of consumer debt in the U.S., with 45 million borrowers collectively owing nearly $1.7 trillion in student loans.
Notably, Acorns was apparently one of several companies that had courted Pillar.
“We were in a pretty lucky position to have a lot of interest from many of the top fintech companies that are out there,” Bloch told TechCrunch. “We had multiple offers on the table and Acorns was really our top choice just given how the business has been doing and the team, the culture and the mission.”
The deal marks the second acquisition this year and third overall for Acorns, which says it notched its strongest quarter in its history the first three months of this year. In March, Acorns also acquired Harvest, a fintech that helped customers reduce more than $4 million in debt in 2020.
The Pillar and Harvest teams will help Acorns accelerate its product roadmap of helping customers pay down debt, “an essential part of the financial wellness system,” said CEO and founder Noah Kerner.
Over time, Pillar will become part of one of Acorns’ monthly subscription tiers.
“The IP and technology that the Pillar team created in debt management is really interesting to us when we think about how we scale our Smart Deposit feature,” Kerner said.
With Smart Deposit, when a customer’s paycheck hits the Acorns bank account, the app automatically allocates a percentage of that paycheck into an individual’s different investment accounts.
“From a behavioral perspective, the best way to get somebody to save and invest is to enable them to set aside a piece of their paycheck as soon as it hits the account so that they don’t spend it. That feature has been really well adopted by our direct deposit customers,” Kerner said. “And so Michael and his team are coming in to manage that feature, and also our bank accounts product. I think their past experience is going to be really useful for us to take what we have and help the team catalyze it further.”
With its latest acquisition, Irvine, California-based Acorns now has more than 350 employees. In 2017, the company acquired Vault, now called “Acorns Later.” As a result of that acquisition, the company has seen its number of retirement accounts grow to 1.2 million from 500.
As mentioned above, Acorns has had a good year so far. In the first six weeks of 2021, the company added nearly 600,000 new accounts, reaching a total of more than 9 million users having saved and invested a total of $7.5 billion.
“The first quarter was our biggest growth quarter on record,” Kerner told TechCrunch. “In particular we crossed the $4.3 billion in dollars in assets under management, which is a really exciting milestone when you think about the fact that these are customers that are saving small amounts of money in the relative scheme of money invested typically.”
Plaid, a unicorn that helps connect consumers’ bank accounts to financial applications, has raised a $425 million Series D, it announced this morning. TechCrunch understands that the new capital infusion, led by Altimeter Capital, values the company at around $13.4 billion.
It is not surprising that Plaid, a former takeover target for consumer credit giant Visa, is raising more capital. After its $5.3 billion sale to the larger company fell through this January, it became clear that Plaid would chart its own future, sans a corporate parent.
When the Visa-Plaid deal did finally grind to a halt in the face of regulatory scrutiny there was chatter amongst startup and venture folks that the sale dying out was a good thing. Why? Because Plaid had had a great 2020 and was generally agreed to be worth far more than what Visa had agreed to pay.
The startup’s Series D valuation confirms the sentiment. And it wasn’t merely Altimeter that was willing to put capital into the company at its new valuation. The group was joined by two more news investors, Silver Lake Partners and Ribbit Capital. Silver Lake is a private equity leviathan with dozens of billions of dollars under management, while Ribbit is known for its myriad fintech bets.
In short, Plaid has picked up a hybrid of investor scale, late-stage guidance, and fintech acumen in a single round. A number of prior investors also put capital into round.
TechCrunch spoke with Plaid CEO Zachary Perret about the deal, who told TechCrunch in a brief phone call that Altimeter was selected as its new lead investor over other options due to shared alignment regarding the future of financial services for consumers. He added that he’s excited to learn from his trio of new backers, which will help the company build for the long-term.
The CEO also made passing mention of a future IPO, though TechCrunch doesn’t expect to see paperwork regarding a potential flotation from Plaid for some time; it was, however, refreshing to hear an executive admit to having future financial goals.
Regarding the amount of capital that it raised, Perret said that it was the “right level” of capital to allow Plaid to invest in scale, both in terms of its team and its product lineup. The CEO also said that the funds will allow his company to be opportunistic.
The last 12 months for Plaid have been busy. Perret mentioned the time period several times during the interview, explaining how rapidly the world evolved regarding the digitization of consumer financial services over the last year.
Finally, what of growth? What was Plaid willing to share on the growth front was light, merely disclosing that it grew its customer count by 60% in 2020. Perret said that the figure represented an acceleration from previous years. With around 650 staffers today, Plaid grew its headcount by around 20% in the first quarter according to its CEO.
Plaid sits in the midst of the fintech boom that TechCrunch has covered extensively over the past several quarters. As far as external signals go, watching the companies that must partially comprise Plaid’s customer base expand is about as close as we can get to other growth metrics. That particular signal bodes well for Plaid.
Let’s see how well the company can fend off domestic and international competition. It certainly now has the funds to do so.
Apple has announced an expansion for its subscription gaming service Apple Arcade. In addition to exclusive game releases, the company is adding two new categories — Timeless Classics and App Store Greats.
In the ‘App Store Greats’ category, you can find some well-known iPhone games that have been released over the past decade, such as Threes+, Mini Metro+, Monument Valley+, Fruit Ninja Classic+, Cut the Rope Remastered and Badland+.
This is an interesting move as Apple has focused on exclusive titles so far. Arguably, some Apple Arcade games are sequels of popular App Store games — I’d put Mini Motorways and Rayman Mini in this category for instance.
But Apple is changing its stance and essentially buying a back catalog of App Store games. Some of them are still available on the App Store, while others have become incompatible with modern iOS versions due to framework and hardware updates. 64-bit processors have rendered many games incompatible for instance.
As always, Apple isn’t just putting free games behind a paywall. These are brand new downloads on the App Store. You get the full game without any ad or in-app purchase.
In addition to old school App Store games, Apple is also adding ‘Timeless Classics’ games. It’s a selection of board games and classic puzzle games that are included in your subscription. Games include Backgammon+, Chess Play & Learn+, Good Sudoku+, Tiny Crossword+, etc.
Those games should definitely help when it comes to reducing churn. Some people just like playing chess over and over again. They might start subscribing to play some chess and pay an Apple Arcade subscription just to keep using the same app.
Overall, Apple is dropping 32 games today and Apple Arcade has more than 180 games in its catalog. Apple originally launched the service in September 2019. You can download Apple Arcade games for $4.99 per month and there’s no additional in-app purchases. Games are available on the iPhone, the iPad, the Apple TV and macOS. Up to six family members can play with a single Apple Arcade subscription and you can also access Apple Arcade with an Apple One subscription.
Apple has been betting heavily on subscription services, such as Apple Music, Apple TV+, Apple Fitness+ and Apple News+. While some of those services have been very successful, such as Apple Music, the company is still adding more and more content to other services to prove that you should subscribe over the long haul. And today’s Apple Arcade update should definitely help for its game subscription service.
Image Credits: Apple