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Elavon to acquire Sage Pay, a gateway that competes with Stripe, PayPal and Adyen, for $300M

2019, November 18 - 6:46pm

E-commerce continues to gain momentum — a trend we’ll see played out in the next two months of holiday shopping — and with that comes more consolidation. Today, Elavon, the payments company that is a subsidiary of US Bancorp, announced that it will acquire Sage Pay, one of the bigger payment processors in the UK and Ireland serving small and medium businesses.

Sage Pay’s owner Sage Group said the deal is being done for £232 million in cash (or $300 million at today’s currency rates).

Elavon is active in 10 countries and says it’s the fourth-largest merchant acquirer in Europe, competing against the likes of  Global Payments, Vantiv, FIS, Ingenico, Verifone, Stripe, Chase, MasterCard and Visa. The deal is still subject to regulatory approval (both by the Federal Reserve in the US and the Central Bank of Ireland), and if all proceeds, the deal is expected to close in Q2 of 2020.

The acquisition points to a bigger trend underway in e-commerce. The market is very fragmented, not just in terms of the companies who sell goods online but also (and perhaps especially) in terms of the companies that manage the complexities at the back end.

In keeping with that, Sage Pay has a lot of competitors in its specific area of taking and managing the payments process for online retailers and others taking transactions online or via mobile apps. They include some of the same competitors as Elavon’s: newer entrants like Stripe, Adyen, and PayPal (all of which have extensive businesses covering many countries and are each larger than Sage, valued in the billions rather than hundreds of millions of dollars), but also smaller operations like GoCardless as well as more established companies like WorldPay.

This deal is a mark of the consolidation that’s been taking place to gain better economies of scale in a market where individual transactions generally generate incremental revenues.

Sage Pay, in that context, was a relatively small player. It 2018 revenues were £41 million, but it is profitable, with an operating profit of £15 million, and Sage said it expects “to report a statutory profit on disposal of approximately £180 million on completion.”

The deal comes on the heels of Sage Group — which is publicly traded — confirming reports in September that it was looking for strategic alternatives for the payments business. Sage Group for the last couple of years has been divesting payments and banking assets to focus more on accounting, people and payroll software, which it sells through an SaaS model.

“Our vision of becoming a great SaaS company for customers and colleagues alike means we will continue to focus on serving small and medium sized customers with subscription software solutions for Accounting & Financials and People & Payroll,” said Steve Hare, Sage’s CEO, in a statement. “Payments and banking services remain an integral part of Sage’s value proposition and we will deliver them through our growing network of partnerships, including Elavon.”

Elavon, as the consolidator here, was itself acquired by US Bancorp way back in 2001 for $2.1 billion. Currently it is active in 10 countries, but in that same vein of consolidation to improve economies of scale on the technical side, and to aggregate more incremental transactions on the financial side, Elavon’s main objective is to increase its overall share of the e-commerce market in Europe. specifically by expanding with Sage Pay further into the UK and Ireland.

“We are a customer-focused company that is helping businesses succeed in a global marketplace that is changing rapidly,” said Hannah Fitzsimons, president and general manager of Elavon Merchant Services, Europe. “This acquisition brings tremendous talent and leading technology to Elavon, which can be leveraged across the European market.”

Categories: Business News

5 reasons you need to be at Disrupt Berlin

2019, November 18 - 6:32pm

We’re one month out from Disrupt Berlin (11-12 December) and no matter which part of the startup ecosystem you inhabit, Disrupt Berlin is a huge opportunity to learn, network and gain inspiration.

Consider these five reasons why you should buy a pass to Disrupt Berlin and join thousands of founders, investors and technologists for two potential-packed days that could change the trajectory of your business.

1. The People You Will Meet

As hard as founders work, it takes a network to make startup dreams come true. Networking at Disrupt Berlin puts you in touch with people who can help you move toward your goal. Connect with investors, developers, engineers, founders, marketers and more. Sizing up investors? Got questions about manufacturing or product development?

You’ll find the right people a lot faster and more efficiently thanks to CrunchMatch, the free business match-making platform we’re making available to all attendees. When CrunchMatch goes live (before the conference starts), we’ll email instructions on accessing the platform to all registered attendees.

You create a profile outlining your role and the type of connections you want to make. CrunchMatch suggest connections based on similar goals and then — subject to your approval — the platform handles all the scheduling details. It’s simple and it connects you with the people you really want to meet. And there will be nearly 3,000 to choose from.

2. The Interviews You’ll Watch (and questions you can ask)

TechCrunch’s editors have spent months picking speakers for the Disrupt stage who reflect the current trends and conversations in the startup ecosystem . The editors interviews focus on teasing out the information and insights everyone wants to hear. And if you have questions of your own, many of the speakers will be available for audience questions at a follow-up Q&A.

New to Disrupt Berlin this year, The Extra Crunch Stage, features experienced operators giving practical, real-world advice on how to launch, run and grow a successful startup, including the chance for you to ask our experts your questions. We launched this stage earlier this year in San Francisco, and the ”how to” programming was a huge hit. Curious about what it takes to raise a series A? Are you all about SaaS? Need help with your PR and branding strategy? Or thinking of scaling your startup globally? We have you covered.

And there’s so much more programming waiting for you across several stages— plan your time and check out the Disrupt Berlin agenda.

3. The Thrills of Startup Battlefield

There’s no better startup launch pad than our world-renowned Startup Battlefield. Since 2007, this global pitch competition has launched 857 companies — like Vurb, Dropbox, Mint and Yammer. They’ve collectively raised $8.9 billion and produced 113 exits. Who will join their ranks?

Be in the room to watch this year’s outstanding cohort go head-to-head in a fierce battle to win the judges hearts and minds. Oh, right — they’ll also win the Disrupt Cup, intense media and investor love and a $50,000 equity-free cash infusion. It all goes down live on the Main Stage, and it’s streamed live to a global audience.

4. The Serendipity of Startup Alley

Opportunity is the name of the game in Startup Alley — the expo floor and heartbeat of Disrupt Berlin. It’s where you’ll find hundreds of early-stage startups showcasing the latest products, platforms and services across the tech spectrum. Looking for potential customers, collaborators, mentors or just curious about new technology? Head to Startup Alley, because you never know who you’ll meet.

Here’s another great reason to go — you’ll find our TC Top Picks. TechCrunch editors hand-picked up to five stellar startups to represent the best of the following tech categories: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, CRM/Enterprise and Education.

5. Your Inspiration, Stoked

You’re focused on making your startup dreams come true. Investing two days at Disrupt to meet new, yet like-minded people can shake things up in the best possible way. Connect with your community, refresh your thinking, share ideas and hear new perspectives. And maybe meet a future partner, investor, or employee. Go home inspired to dig deeper and work harder.

Well, there you have it. Five awesome reasons to hop off the fence, buy a pass to Disrupt Berlin and join us on 11-12 December.

Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact our sponsorship sales team by filling out this form.

Categories: Business News

Heetch adds $4 million to its Series B round

2019, November 18 - 5:30pm

Ride-hailing service Heetch has added a new investor to its $38 million Series B round. AfricInvest is investing another $4 million in the startup — in total, Heetch has raised a $42 million Series B round. Previous investors in the Series B round include Cathay Innovation, Idinvest and Total Ventures.

Heetch first started as a pure peer-to-peer ride-hailing platform. Anyone could become a driver, anyone could order a ride. After some regulatory issues in France, Heetch now uses a hybrid approach. It partners with professional drivers in some markets, it partners with local taxis and even moto-taxis in others.

In its home market France, the company competes directly with Uber, Kapten and other traditional ride-hailing apps. It takes a smaller cut than many of its competitors (15%) and users can pay both in cash or card.

According to the company, Heetch is one of the top three companies in the nine French cities where it operates (Paris, Lyon, Lille, Nice, Marseille, Toulouse, Bordeaux, Strasbourg and Nantes). Heetch also operates in Belgium.

More recently, the company has expanded to other markets with a focus on French-speaking Africa. It is currently live in Morocco, Algeria and Cameroon. In Morocco, Heetch has partnered with major taxi unions to let people book taxis through its app. It is now the only legal ride-sharing app.

In Douala, Cameroon, the company has built a moto-taxi service. The company insists that it is training drivers and moto-taxis are equipped with helmets as there are many accidents.

Up next, Heetch plans to expand to six additional countries in 2020, including Tunisia and Senegal.

Categories: Business News

Three of Apple and Google’s former star chip designers launch NUVIA with $53M in series A funding

2019, November 16 - 5:08am

Silicon is apparently the new gold these days, or so VCs hope.

What was once a no-go zone for venture investors, who feared the long development lead times and high technical risk required for new entrants in the semiconductor field, has now turned into one of the hottest investment areas for enterprise and data VCs. Startups like Graphcore have reached unicorn status (after its $200 million series D a year ago) while Groq closed $52M from the likes of Chamath Palihapitiya of Social Capital fame and Cerebras raised $112 million in investment from Benchmark and others while announcing that it had produced the first trillion transistor chip (and who I profiled a bit this summer).

Today, we have another entrant with another great technical team at the helm, this time with a Santa Clara, CA-based startup called NUVIA. The company announced this morning that it has raised a $53 million series A venture round co-led by Capricorn Investment Group, Dell Technologies Capital (DTC), Mayfield, and WRVI Capital, with participation from Nepenthe LLC.

Despite only getting started earlier this year, the company currently has roughly 60 employees, 30 more at various stages of accepted offers, and the company may even crack 100 employees before the end of the year.

What’s happening here is a combination of trends in the compute industry. There has been an explosion in data and by extension, the data centers required to store all of that information, just as we have exponentially expanded our appetite for complex machine learning algorithms to crunch through all of those bits. Unfortunately, the growth in computation power is not keeping pace with our demands as Moore’s Law slows. Companies like Intel are hitting the limits of physics and our current know-how to continue to improve computational densities, opening the ground for new entrants and new approaches to the field.

Finding and building a dream team with a “chip” on their shoulder

There are two halves to the NUVIA story. First is the story of the company’s founders, which include John Bruno, Manu Gulati, and Gerard Williams III, who will be CEO. The three overlapped for a number of years at Apple, where they brought their diverse chip skillsets together to lead a variety of initiatives including Apple’s A-series of chips that power the iPhone and iPad. According to a press statement from the company, the founders have worked on a combined 20 chips across their careers and have received more than 100 patents for their work in silicon.

Gulati joined Apple in 2009 as a micro architect (or SoC architect) after a career at Broadcom, and a few months later, Williams joined the team as well. Gulati explained to me in an interview that, “So my job was kind of putting the chip together; his job was delivering the most important piece of IT that went into it, which is the CPU.” A few years later in around 2012, Bruno was poached from AMD and brought to Apple as well.

Gulati said that when Bruno joined, it was expected he would be a “silicon person” but his role quickly broadened to think more strategically about what the chipset of the iPhone and iPad should deliver to end users. “He really got into this realm of system-level stuff and competitive analysis and how do we stack up against other people and what’s happening in the industry,” he said. “So three very different technical backgrounds, but all three of us are very, very hands-on and, you know, just engineers at heart.”

Gulati would take an opportunity at Google in 2017 aimed broadly around the company’s mobile hardware, and he eventually pulled over Bruno from Apple to join him. The two eventually left Google earlier this year in a report first covered by The Information in May. For his part, Williams stayed at Apple for nearly a decade before leaving earlier this year in March.

Apple hires leading ARM chip designer

The company is being stealthy about exactly what it is working on, which is typical in the silicon space because it can take years to design, manufacture, and get a product into market. That said, what’s interesting is that while the troika of founders all have a background in mobile chipsets, they are indeed focused on the data center broadly conceived (i.e. cloud computing), and specifically reading between the lines, to finding more energy-efficient ways that can combat the rising climate cost of machine learning workflows and computation-intensive processing.

Gulati told me that “for us, energy efficiency is kind of built into the way we think.”

The company’s CMO did tell me that the startup is building “a custom clean sheet designed from the ground up” and isn’t encumbered by legacy designs. In other words, the company is building its own custom core, but leaving its options open on whether it builds on top of ARM’s architecture (which is its intention today) or other architectures in the future.

Building an investor syndicate that’s willing to “chip” in

Outside of the founders, the other half of this NUVIA story is the collective of investors sitting around the table, all of whom not only have deep technical backgrounds, but also deep pockets who can handle the technical risk that comes with new silicon startups.

Capricorn specifically invested out of what it calls its Technology Impact Fund, which focuses on funding startups that use technology to make a positive impact on the world. Its portfolio according to a statement includes Tesla, Planet Labs, and Helion Energy.

Meanwhile, DTC is the venture wing of Dell Technologies and its associated companies, and brings a deep background in enterprise and data centers, particularly from the group’s server business like Dell EMC. Scott Darling, who leads DTC, is joining NUVIA’s board, although the company is not disclosing the board composition at this time. Navin Chaddha, an electrical engineer by training who leads Mayfield, has invested in companies like HashiCorp, Akamai, and SolarCity. Finally, WRVI has a long background in enterprise and semiconductor companies.

I chatted a bit with Darling of DTC about what he saw in this particular team and their vision for the data center. In addition to liking each founder individually, Darling felt the team as a whole was just very strong. “What’s most impressive is that if you look at them collectively, they have a skillset and breadth that’s also stunning,” he said.

He confirmed that the company is broadly working on data center products, but said the company is going to lie low on its specific strategy during product development. “No point in being specific, it just engenders immune reactions from other players so we’re just going to be a little quiet for a while,” he said.

He apologized for “sounding incredibly cryptic” but said that the investment thesis from his perspective for the product was that “the data center market is going to be receptive to technology evolutions that have occurred in places outside of the data center that’s going to allow us to deliver great products to the data center.”

Interpolating that statement a bit with the mobile chip backgrounds of the founders at Google and Apple, it seems evident that the extreme energy-to-performance constraints of mobile might find some use in the data center, particularly given the heightened concerns about power consumption and climate change among data center owners.

DTC has been a frequent investor in next-generation silicon, including joining the series A investment of Graphcore back in 2016. I asked Darling whether the firm was investing aggressively in the space or sort of taking a wait-and-see attitude, and he explained that the firm tries to keep a consistent volume of investments at the silicon level. “My philosophy on that is, it’s kind of an inverted pyramid. No, I’m not gonna do a ton of silicon plays. If you look at it, I’ve got five or six. I think of them as the foundations on which a bunch of other stuff gets built on top,” he explained. He noted that each investment in the space is “expensive” given the work required to design and field a product, and so these investments have to be carefully made with the intention of supporting the companies for the long haul.

That explanation was echoed by Gulati when I asked how he and his co-founders came to closing on this investor syndicate. Given the reputations of the three, they would have had easy access to any VC in the Valley. He said about the final investors:

They understood that putting something together like this is not going to be easy and it’s not for everybody … I think everybody understands that there’s an opportunity here. Actually capitalizing upon it and then building a team and executing on it is not something that just anybody could possibly take on. And similarly, it is not something that every investor could just possibly take on in my opinion. They themselves need to have a vision on their side and not just believe our story. And they need to strategically be willing to help and put in the money and be there for the long haul.

It may be a long haul, but Gulati noted that “on a day-to-day basis, it’s really awesome to have mostly friends you work with.” With perhaps 100 employees by the end of the year and tens of millions of dollars already in the bank, they have their war chest and their army ready to go. Now comes the fun (and hard) part as we learn how the chips fall.

Update: Changed the text to reflect that NUVIA is intending to build on top of ARM’s architecture, but isn’t a licensed ARM core.

Categories: Business News

More layoffs at pivoting London ed tech startup pi-top

2019, November 16 - 3:28am

London ed tech startup pi-top has gone through another round of layoffs, TechCrunch has learned.

Pi-top confirmed that eight jobs have been cut in the London office, saying the job losses resulted from “restructuring our business to focus on the U.S. education market.”

In August we broke the news that the STEM hardware-focused company had cut 12 staff after losing out on a major contract; pi-top told us then that its headcount had been reduced from 72 to 60.

The latest cuts suggest the workforce has been reduced to around 50 — although we have also heard that company headcount is now considerably lower than that.

One source told us that 12 jobs have gone in the London office this week, as well as additional cuts in the China office, where the company’s hardware team is based — but pi-top denied there have been any changes to its China team.

Pi-top said in August that the layoffs were related to implementing a new strategy.

Commenting on the latest cuts, it told us: “We have made changes within the company that reflect our business focus on the U.S. education market and our increasingly important SaaS learning platform.”

“The core of our business remains unchanged and we are happy with progress and the fantastic feedback we have received on pi–top 4 from our school partners,” pi-top added.

Additionally, we have heard that a further eight roles at the U.K. office have been informed to staff as at risk of redundancy. Affected jobs at risk include roles in product, marketing, creative services, customer support and finance.

We also understand that a number of employees have left the company of their own accord in recent months, following an earlier round of layoffs.

Pi-top did not provide comment on jobs at risk of redundancy, but told us that it has hired three new staff “to accelerate the SaaS side of our education offering and will be increasing our numbers in the U.S. to service our growth in the region.”

We understand that the latest round of cuts have been communicated to staff as a cost-reduction exercise and also linked to implementing a new strategy. Staff have also been told that the business focus has shifted to the U.S schools market.

As we reported earlier this year, pi-top appointed a new executive chairman of its board who has a strong U.S. focus: Stanley Buchesky served in the Trump administration as an interim CFO for the U.S. Department of Education under Secretary of Education Betsy DeVos. He is also the founder of a U.S. ed tech seed fund.

Sources familiar with pi-top say the company is seeking to pivot away from making proprietary ed tech hardware to focus on a SaaS learning platform for teaching STEM, called pi-top Further.

At the start of this year it crowdfunded a fourth-gen STEM device, the pi-top 4, with an estimated shipping date of this month. The crowdfunder attracted 521 backers, pledging close to $200,000 to fund the project.

In the pi-top 4 Kickstarter pitch the device is slated as being supported by a software platform called Further — which is described as a “free social making platform” that “teaches you how to use all the pi-top components through completing challenges and contributing projects to the community,” as well as offering social sharing features.

The plan now is for pi-top to monetize that software platform by charging subscription fees for elements of the service — with the ultimate goal of SaaS revenues making up the bulk of its business as hardware sales are de-emphasized. (Hardware is hard; and pi-top’s current STEM learning flagship has faced some challenges with reliability, as we reported in August.)

We understand that the strategic change to Further — from free to a subscription service — was communicated to staff internally in September.

Asked about progress on the pi-top 4, the company told us the device began shipping to backers this week. 

“We are pleased to announce the release of pi-top 4 and pi-top Further, our new learning and robotics coding platform,” it said. “This new product suite provides educators the ability to teach coding, robotics and AI with step-by-step curriculum and an integrated coding window that powers the projects students build. With pi-top, teachers can effectively use Project Based Learning and students can learn by doing and apply what they learn to the real world.”

Last month pi-top announced it had taken in $4 million in additional investment to fund the planned pivot to SaaS — and “bridge towards profitability,” as it put it today.

“The changes you see are a fast growing start-up shifting from revenue focus to a right-sized profit generating company,” it also told us.

Categories: Business News

Despite bans, Giphy still hosts self-harm, hate speech and child sex abuse content

2019, November 15 - 11:00pm

Image search engine Giphy bills itself as providing a “fun and safe way” to search and create animated GIFs. But despite its ban on illicit content, the site is littered with self-harm and child sex abuse imagery, TechCrunch has learned.

A new report from Israeli online child protection startup L1ght — previously AntiToxin Technologies — has uncovered a host of toxic content hiding within the popular GIF-sharing community, including illegal child abuse content, depictions of rape and other toxic imagery associated with topics like white supremacy and hate speech. The report, shared exclusively with TechCrunch, also showed content encouraging viewers into unhealthy weight loss and glamorizing eating disorders.

TechCrunch verified some of the company’s findings by searching the site using certain keywords. (We did not search for terms that may have returned child sex abuse content, as doing so would be illegal.) Although Giphy blocks many hashtags and search terms from returning results, search engines like Google and Bing still cache images with certain keywords.

When we tested using several words associated with illicit content, Giphy sometimes showed content from its own results. When it didn’t return any banned materials, search engines often returned a stream of would-be banned results.

L1ght develops advanced solutions to combat online toxicity. Through its tests, one search of illicit material returned 195 pictures on the first search page alone. L1ght’s team then followed tags from one item to the next, uncovering networks of illegal or toxic content along the way. The tags themselves were often innocuous in order to help users escape detection, but they served as a gateway to the toxic material.

Despite a ban on self-harm content, researchers found numerous keywords and search terms to find the banned content. We have blurred this graphic image. (Image: TechCrunch)

Many of the more extreme content — including images of child sex abuse — are said to have been tagged using keywords associated with known child exploitation sites.

We are not publishing the hashtags, search terms or sites used to access the content, but we passed on the information to the National Center for Missing and Exploited Children, a national nonprofit established by Congress to fight child exploitation.

Simon Gibson, Giphy’s head of audience, told TechCrunch that content safety was of the “utmost importance” to the company and that it employs “extensive moderation protocols.” He said that when illegal content is identified, the company works with the authorities to report and remove it.

He also expressed frustration that L1ght had not contacted Giphy with the allegations first. L1ght said that Giphy is already aware of its content moderation problems.

Gibson said Giphy’s moderation system “leverages a combination of imaging technologies and human validation,” which involves users having to “apply for verification in order for their content to appear in our searchable index.” Content is “then reviewed by a crowdsourced group of human moderators,” he said. “If a consensus for rating among moderators is not met, or if there is low confidence in the moderator’s decision, the content is escalated to Giphy’s internal trust and safety team for additional review,” he said.

“Giphy also conducts proactive keyword searches, within and outside of our search index, in order to find and remove content that is against our policies,” said Gibson.

L1ght researchers used their proprietary artificial intelligence engine to uncover illegal and other offensive content. Using that platform, the researchers can find other related content, allowing them to find vast caches of illegal or banned content that would otherwise and for the most part go unseen.

This sort of toxic content plagues online platforms, but algorithms only play a part. More tech companies are finding human moderation is critical to keeping their sites clean. But much of the focus to date has been on the larger players in the space, like Facebook, Instagram, YouTube and Twitter.

Facebook, for example, has been routinely criticized for outsourcing moderation to teams of lowly paid contractors who often struggle to cope with the sorts of things they have to watch, even experiencing post-traumatic stress-like symptoms as a result of their work. Meanwhile, Google’s YouTube this year was found to have become a haven for online sex abuse rings, where criminals had used the comments section to guide one another to other videos to watch while making predatory remarks.

Giphy and other smaller platforms have largely stayed out of the limelight, during the past several years. But L1ght’s new findings indicate that no platform is immune to these sorts of problems.

L1ght says the Giphy users sharing this sort of content would make their accounts private so they wouldn’t be easily searchable by outsiders or the company itself. But even in the case of private accounts, the abusive content was being indexed by some search engines, like Google, Bing and Yandex, which made it easy to find. The firm also discovered that pedophiles were using Giphy as the means of spreading their materials online, including communicating with each other and exchanging materials. And they weren’t just using Giphy’s tagging system to communicate — they were also using more advanced techniques like tags placed on images through text overlays.

This same process was utilized in other communities, including those associated with white supremacy, bullying, child abuse and more.

This isn’t the first time Giphy has faced criticism for content on its site. Last year a report by The Verge described the company’s struggles to fend off illegal and banned content. Last year the company was booted from Instagram for letting through racist content.

Giphy is far from alone, but it is the latest example of companies not getting it right. Earlier this year and following a tip, TechCrunch commissioned then-AntiToxin to investigate the child sex abuse imagery problem on Microsoft’s search engine Bing. Under close supervision by the Israeli authorities, the company found dozens of illegal images in the results from searching certain keywords. When The New York Times followed up on TechCrunch’s report last week, its reporters found Bing had done little in the months that had passed to prevent child sex abuse content appearing in its search results.

It was a damning rebuke on the company’s efforts to combat child abuse in its search results, despite pioneering its PhotoDNA photo detection tool, which the software giant built a decade ago to identify illegal images based off a huge database of hashes of known child abuse content.

Giphy’s Gibson said the company was “recently approved” to use Microsoft’s PhotoDNA but did not say if it was currently in use.

Where some of the richest, largest and most-resourced tech companies are failing to preemptively limit their platforms’ exposure to illegal content, startups are filling in the content moderation gaps.

L1ght, which has a commercial interest in this space, was founded a year ago to help combat online predators, bullying, hate speech, scams and more.

The company was started by former Amobee chief executive Zohar Levkovitz and cybersecurity expert Ron Porat, previously the founder of ad-blocker Shine, after Porat’s own son experienced online abuse in the online game Minecraft. The company realized the problem with these platforms was something that had outgrown users’ own ability to protect themselves, and that technology needed to come to their aid.

L1ght’s business involves deploying its technology in similar ways as it has done here with Giphy — in order to identify, analyze and predict online toxicity with near real-time accuracy.

Microsoft Bing not only shows child sexual abuse, it suggests it

Categories: Business News

Last chance for early-bird pricing on passes to Disrupt Berlin 2019

2019, November 15 - 7:28pm

Trite as it may sound, all good things must come to an end. And the good thing that’s about to come to a grinding halt is early-bird pricing on passes to Disrupt Berlin 2019. You have mere hours to save — the deadline strikes tonight at 11:59 p.m. (CEST).

You can save up to €500, but only if you beat the clock. Buy your early-bird pass right now, otherwise you’ll pay more than necessary — how sad.

Need more inspiration than saving significant euros? Okay, let’s talk speakers. Disrupt conferences always offers an awesome lineup of speakers, and this year Disrupt Berlin is no exception. We’re going to mix it up a bit in this post and feature just some of the impressive women who will hold forth on the various Disrupt stages.

Unnatural Language Processing with Emily Foges (CEO at Luminance) and Sofie Quidenus-Wahlforss (founder & CEO at omni:us). Legal contracts and insurance policies can be difficult even for experts to decipher. Hear from the founders how Luminance and omni:us use AI to take on jargon and save everyone time.

The New New Shop with Maria Raga (CEO of Depop). As shopping has moved from the web to apps, Depop has caught the Gen Z wave. We’ll hear from Raga, the CEO nurturing this “eBay for the 21st Century.”

What Does It Take to Raise a Series A? with Jessica Holzbach (co-founder & CCO at Penta), Louise Dahlborn Samet (partner at Blossom Capital) and Hannah Seal (principal at Index Ventures). Venture capital funds have boomed this decade, but raising money is still hard for young companies. What are investors today looking for in teams, metrics and products?

Up, Up and Away with Jen Rubio (co-founder & chief brand officer at Away). The D2C space is awfully crowded, but luggage brand Away has managed to rise above the noise to build one of the most successful consumer brands of this decade with a valuation of $1.4 billion as of earlier this year. Hear from CEO Jen Rubio about how the company got its start, grew and became the household name it is today.

Like we said, those are but a few of the amazing women you’ll hear at Disrupt Berlin. And the guys aren’t half bad either. Check out the full agenda here.

There’s more to explore at Disrupt Berlin — Q&A Sessions, the Startup Battlefield, the Hackathon finalists pitching on the Extra Crunch Stage and hundreds of startups in Startup Alley, including our recently announced TC Top Picks.

See and do it all at Disrupt Berlin 2019 on 11-12 December. You’ll see and do it all for less if you act now and buy an early-bird pass to Disrupt Berlin before early-bird pricing disappears tonight at 11:59 p.m. (CEST).

Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact our sponsorship sales team by filling out this form.

Categories: Business News

SoftBank Vision Fund’s Carolina Brochado is coming to Disrupt Berlin

2019, November 15 - 6:00pm

SoftBank’s Vision Fund has single-handedly changed the game when it comes to tech startup investment. And that’s why I’m excited to announce that SoftBank Vision Fund investment director Carolina Brochado is joining us at TechCrunch Disrupt Berlin.

Carolina Brochado isn’t a newcomer when it comes to VC investment. She’s worked for years at Atomico in London. Originally from Brazil, she first joined Atomico as an intern in 2012 while studying her MBA at Columbia Business School.

After her MBA, she joined an e-commerce startup as head of operations. Unfortunately, that startup is now defunct. But she used that opportunity to join Atomico once again, as a principle. She became a partner at Atomico in 2016 and left the firm late last year.

At SoftBank’s Vision Fund, she focuses on fintech, digital health and marketplace startups. Just to give you an idea, some of her past investments with both Atomico and SoftBank include LendInvest, Gympass, Hinge Health, Ontruck and Rekki.

More generally, given the size of SoftBank’s Vision Fund ($100 billion), it has had a huge impact on the growth trajectory of some companies. I’m personally curious to know SoftBank’s approach as board members, whether they get involved in the strategy of those companies or let the executive teams make decisions on their own.

Buy your ticket to Disrupt Berlin to listen to this discussion and many others. The conference will take place on December 11-12.

In addition to panels and fireside chats, like this one, new startups will participate in the Startup Battlefield to compete for the highly coveted Battlefield Cup.

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Carolina focuses on fintech, digital health and marketplaces. Prior to joining Softbank, Carolina was a Partner at Atomico, where she sourced and collaborated with portfolio companies for almost five years. Some of her investments included Lendinvest, Gympass, Hinge Health, Ontruck and Rekki.

Previously Carolina has worked as Head of Ops to a now defunct gifting e-commerce start-up, as an investor at Chicago-based private equity firm Madison Dearborn Partners and within Consumer/Retail Investment Banking at Merrill Lynch in New York.

Carolina has a Bachelor of Science degree in Foreign Service from Georgetown University and an MBA from Columbia Business School. She is originally from Brazil.

Categories: Business News

Investment bank Lazard has quietly recruited a ‘Venture and Growth’ team to focus on European scale-ups

2019, November 15 - 5:00pm

Lazard, the global investment bank, has been quietly recruiting a ten-person team in London to head up its newly created “Venture and Growth Banking” division to match investors with European scale-ups.

Unlike some investment banks, the focus of Lazard Venture and Growth Banking will include Series B and C. That’s earlier than many startups typically engage the help of an investment bank when raising capital and speaks to the sheer number of European startups currently chasing a pool of venture capital that is increasingly global and fragmented.

The Lazard Venture and Growth Banking team will be headed up by ex-Numis employees Garri Jones and Nick James, with both serving as Managing Directors.

Noteworthy, according to his LinkedIn profile, Jones was previously Venture and Broking Lead at Numis. He was also a founding partner at Circle Health, helping to grow the company from seed to IPO. Jones is also a board member of stock photo startup Picfair.

James, who will take up the role of COO at Lazard Venture and Growth Banking, is a well-respected equity research analyst and also recently left Numis (his LinkenIn says he is on gardening leave). He was previously an investment manager at Nomura in its technology VC team.

The other eight members of the team are said to be a mix of experienced entrepreneurs, bankers, engineers and data scientists.

In particular, I understand the Lazard Venture and Growth Banking team see untapped growth-stage opportunities beyond more “classic” VC sectors, such as consumer, SaaS and fintech, to also include AI, life sciences and clean tech — areas that requite deep tech and engineering expertise to evaluate and understand properly.

In other words, Lazard believes that intermediation in the form of an investment bank with the right team and connections can make the difference at Series B, C and beyond — both for investors and companies seeking capital.

Specifically, Lazard Venture and Growth Banking will look to identify the top 100 fastest-growing startups in Europe and connect them to 400 or so investors. These investors will be a mix of institutional funding, including venture capital and private equity, along with sovereign wealth funds, and high net worth individuals.

A large proportion of investors will be made up of corporates, too. I understand the thinking within the new Lazard division is that there in an abundance of corporate venture that remains untapped, with some of Europe’s largest corporates hoping to play catch up after historically underinvesting in R&D.

However, it isn’t simply a case of matching corporates (or their venture arms) with fast-growing startups. It is equally important to match the right corporates to the right startups — and again this is where the Lazard Venture and Growth Banking team believe it can add value.

Meanwhile, Lazard is also planning to host a three-day conference in April 2020 where it will bring leading companies and global investors together through a series of panel discussions and “bespoke investor and company meetings”.

Categories: Business News

VoltServer adds a data layer to electricity distribution in a move that could help smart grid rollout

2019, November 15 - 10:03am

Stephen Eaves, the chief executive of a new startup that promises to overlay data on electricity distribution, has spent years developing data management technologies.

Eaves’ first company, the eponymous Eaves Devices, focused on energy systems in aerospace and defense — they converted the military’s fleet of B2 bombers to use lithium ion batteries.

The second company he was involved in was developing modular array devices to install in central offices and cell towers and conducted early work on electric vehicle development.

His goal, Eaves says, was to “make electricity inherently safe.”

VoltServer is the latest company from Eaves to pursue that goal. Eaves makes transmission safer by breaking electrical distribution into packets; those packets are sent down transmission lines to ensure that there are not faults. If there’s a break in the line, the equipment stops transmitting energy.

“We take either AC or DC electricity into a transmitter and the transmitter breaks the electricity into packets and the receiver takes the packets and puts them back together and distributes it as regular AC/DC current,” Eaves explains.

The architecture is akin to a router. There’s digital signal processing in the transmitter powered by a semiconductor that’s a gateway for the electricity. “It’s like the devices you find in solar power converters,” says Eaves.

Already roughly 700 stadiums, large offices and indoor grow facilities have deployed the company’s technology. And the traction was enough to attract the attention of Alphabet subsidiary Sidewalk Labs, which led a recent $7.4 million financing into the company. To date, the company has raised $18 million from a clutch of investors, including: Marker Hill Capital, Slater Technology Fund, Natural Resources Capital Management, Clean Energy Venture Group, Angel Street Capital and Coniston Capital.  

“We’re kind of a combined hardware and software company,” says Eaves. “[Customers] buy the boxes and the company has third parties that install it. There are software applications to track energy usage to assign processes for what to do in an outage.”

Typical installations can be anywhere from $30,000 to $1 million and the company is targeting three core markets — intelligent building infrastructure, communications and indoor agriculture, according to Eaves. In fact, the company’s largest installation is a lettuce farm in Florida. “You’re in a very constrained environment and you want a very safe transmission technology. And we’ve developed a lighting product. It removes a lot of the conversion electronics that would normally be in the growth space,” says Eaves.

The technology certainly slashes the cost for power transmission in a stadium. Traditional power transmission can cost roughly $36 per linear foot, while VoltServer can cut that cost to less than $10 per foot, according to the company.

VoltServer isn’t the only startup that’s looking to add data controls to electricity distribution. Companies like Blueprint PowerBlue Pillar and monitoring companies like Enertiv and Aquicore are all looking at ways to monitor and manage distribution. At the grid scale, there’s Camus Energy, which looks to provide energy “orchestration” services.

“Electricity powers our world, but the fundamental danger inherent in AC or DC electricity makes today’s electrical systems expensive to install or change,” said Sidewalk Labs chairman and chief executive, Dan Doctoroff in a statement. “[This technology] is a breakthrough, offering a less expensive, safer and more efficient way to distribute electricity that can make buildings more affordable and flexible. Over time, that can make cities more affordable, sustainable, and adaptable as our needs change.”

For some investors in the energy sector, these kinds of distribution and transmission technologies are a critical component of the next generation of grid technologies needed to bring the world closer to 100% renewable transmission.

“What is relevant is internet-connected, controllable energy assets that you can control from some centralized dispatch,” says one investor active in energy investing. 

Categories: Business News

Homeis adds community tools for Mexican immigrants

2019, November 15 - 9:06am

Homeis, a startup building networking tools for immigrant communities, officially launched its community for Mexican immigrants this week.

Co-founder and CEO Ran Harnevo (pictured above) previously founded video syndication company 5min, which was acquired by AOL, where he served as the global president of the company’s video division. (AOL also bought TechCrunch and then was acquired, in turn, by Verizon.)

The company’s goal is to create networks that are focused on the needs of specific immigrant communities — starting with Israeli, French and Indian Communities — helping them find things like new friends and job opportunities.

In the launch announcement, the startup says that its Mexican community will “address specific pain points for Mexican immigrants,” for example by helping them find trusted immigration lawyers.

And if building tools for immigrants seems like a political act in 2019, that’s something Harnevo (an Israeli immigrant himself) seems to be embracing.

“It’s our personal mission to empower immigrants, and that has never been more critical,” he said in a statement. “The increased tension and hostility towards immigration has made it clear that tech companies must step up. With the launch of our Mexican community, we are able to share our technology and resources with the largest immigrant community in the U.S. As immigrants ourselves, that means a lot to us.”

Homeis raised a $12 million Series A led by Canaan Partners and Spark Capital earlier this year.

Ran Harnevo On AOL’s Video Strategy And The Web’s “Massive Wave” Of Original Content

Categories: Business News

Recycling robots raise millions from top venture firms to rescue an industry in turmoil

2019, November 15 - 8:33am

The problem of how to find the potential treasure trove hidden in millions of pounds of trash is getting a high-tech answer as investors funnel $16 million into the recycling robots built by Denver-based AMP Robotics.

For recyclers, the commercialization of robots tackling industry problems couldn’t come at a better time. Their once-stable business has been turned on its head by trade wars and low unemployment.

Recycling businesses used to be able to rely on China to buy up any waste stream (no matter the quality of the material). However, about two years ago, China decided it would no longer serve as the world’s garbage dump and put strict standards in place for the kinds of raw materials it would be willing to receive from other countries. The result has been higher costs at recycling facilities, which actually are now required to sort their garbage more effectively.

At the same time, low unemployment rates are putting the squeeze on labor availability at facilities where humans are basically required to hand-sort garbage into recyclable materials and trash.

Given the economic reality, recyclers are turning to AMP’s technology — a combination of computer vision, machine learning and robotic automation to improve efficiencies at their facilities.

Photo courtesy of Flickr/Abulla Al Muhairi

That’s what attracted Sequoia Capital to lead the company’s latest investment round — a $16 million Series A investment the company will use to expand its manufacturing capacity and boost growth as it looks to expand into international markets.

“We are excited to partner with AMP because their technology is changing the economics of the recycling
industry,” said Shaun Maguire, partner at Sequoia, in a statement. “Over the last few years, the industry has had their margins squeezed by labor shortages and low commodity prices. The end result is an industry proactively searching for cost-saving alternatives and added opportunities to increase revenue by capturing more high-value recyclables, and AMP is emerging as the leading solution.”

The funding will be used to “broaden the scope of what we’re going after,” says chief executive Matanya Horowitz. Beyond reducing sorting costs and improving the quality of the materials that recycling facilities can ship to buyers, the company’s computer vision technologies can actually help identify branded packaging and be used by companies to improve their own product life cycle management.

“We can identify… whether it’s a Coke or Pepsi can or a Starbucks cup,” says Horowitz. “So that people can help design their product for circularity… we’re building out our reporting capabilities and that, to them, is something that is of high interest.”

That combination of robotics, computer vision and machine learning has potential applications beyond the recycling industry as well, according to Horowitz. Automotive scrap and construction waste are other areas where the company has seen interest for its combination of software and hardware.

Meanwhile, the core business of recycling is picking up. In October, the company completed the installation of 14 robots at Single Stream Recyclers in Florida. It’s the largest single deployment of robots in the recycling industry and the robots, which can sort and pick twice as fast as people with higher degrees of accuracy, are installed at sorting lines for plastics, cartons, fiber and metals, the company said.

AMP’s business has two separate revenue streams — a robotics as a service offering and a direct sales option — and the company has made other installations at sites in California, Colorado, Indiana, Minnesota, New York, Pennsylvania, Texas, Virginia and Wisconsin.

The traction the company is seeing in its core business was validating for early investors like BV, Closed Loop Partners, Congruent Ventures and Sidewalk Infrastructure Partners, the Alphabet subsidiary’s new spin-out that invests in technologies to support new infrastructure projects.

For Mike DeLucia, the Sidewalk Infrastructure Partners principal who led the company’s investment into AMP Robotics, the deal is indicative of where his firm will look to commit capital going forward.

“It’s a technology that enables physical assets to operate more efficiently,” he says. “Our goal is to find the technologies that enable really exciting infrastructure projects, back them and work with them to deliver projects in the physical world.”

Investors like DeLucia and Abe Yokell, from the investment firm Congruent Ventures, think that recycling is just the beginning. Applications abound for AMP Robotic’s machine learning and computer vision technologies in areas far beyond the recycling center.

“When you think about how technology is able to impact the built environment, one area is machine vision,” says Yokell. “[Machine learning] neural nets can apply to real-world environments, and that stuff has gotten cheaper and easier to deploy.”

Categories: Business News

Where top VCs are investing in real estate and proptech (Part 2 of 2)

2019, November 15 - 2:26am

In part two of our survey that asked top VCs about the most exciting investment areas in real estate, we dig into responses from 10 leading real estate-focused investors at firms that span early to growth stages across real estate specific firms, corporate venture arms, and prominent generalist firms to share where they see opportunity in this sector. (See part one of our survey.)

In part two of our survey, we hear from:

Where top VCs are investing in real estate and proptech (Part 1 of 2)

Connie Chan, Andreessen Horowitz

What trends are you most excited in real estate tech from an investing perspective?

While most people think about real estate tech from the transaction perspective, I believe that every single part of the real estate value chain is ripe for disruption. On the construction and home maintenance side, we are facing an aging population of contractors, electricians and plumbers. As fewer people enter the trade, this is a great opportunity for a startup. Rentals are offline and fragmented, with the majority of renters still paying their rent with cash or check.

As low-interest rates hold, many homeowners could be refinancing their homes, but aren’t simply because of the lack of financial education. People want to live in beautiful spaces, but everyone needs help with the design and remodeling process. Younger generations in particular are shocked and lost when they learn how many vendors and contractors they need to interface with for a simple bathroom or kitchen remodel. At the end of the day, we end up having to go back and forth with service providers in person because there are major information gaps online, just like in medicine. It’s hard for homeowners to know who to listen to and who to trust.

How much time are you spending on real estate tech right now? Is the market under-heated, over-heated, or just right? 

A third of my time is spent thinking about startups tackling real estate — this includes everything from construction to financing to rentals and home improvement. The amount of money spent in real estate is enormous, and the data and tools we use today are still based on insights from a decade ago.

When I polled colleagues on what they would do if a toilet broke, the answers ranged from: Google, YouTube, Yelp and “calling my mom.” We spend so much money on the way and place we live, and it’s nuts that there isn’t more technology to support it. Yes, we turn to Zillow or Redfin when searching for a home to buy or rent, but what about everything that happens before and after that?

The market is not over-heated in the least. However, I do believe investors are starting to treat real estate tech companies differently than tech-enabled real estate companies. In the past few years, that nuance was less clear, but recent market events have forced investors to focus more on gross margins and software’s ability to scale.

Are there startups that you wish you would see in the industry but don’t?

I’d love to see more companies foster community. Decades ago we hung out with our neighbors, but today, many of us can’t even recall their names. Technology can help connect residents in a building, or neighbors down the street — mapping out our geography-based social networks. I’d also love to find more companies that are using different kinds of signals to assess risk, whether it’s to replace the credit score for a rental screening or to help someone qualify for a mortgage. Chinese fintech companies in particular have been experimenting with using other signals besides a credit score to evaluate how responsible someone might be.

Plus any other thoughts you want to share with TechCrunch readers

If we think that the transportation industry is big, just wait until we realize the size of the real estate market!

Brendan Wallace, Fifth Wall

How has the real estate technology ecosystem changed in the last 3 years? 

When we started Fifth Wall three years ago, VCs and even prospective LPs would frequently ask us ‘What does real estate technology mean? Isn’t that very niche? How are you going to invest $212 million into real estate technology? ” At the time those felt like legitimate questions; in retrospect, they reflected that the venture ecosystem hadn’t truly appreciated the enormity of the opportunity in real estate technology. The fact that those questions felt valid only a few years ago tells the story of how the real estate technology ecosystem has evolved, expanded, and institutionalized.

In the last three years, real estate technology has arguably created more enterprise value and spawned more unicorns than any other single industry sector in venture capital. Fifth Wall was fortunate to make early investments in many of those transformative businesses, such as Blend, Hippo, Loggi, Lime, Opendoor and VTS. In the first half of 2019, $14 billion was invested into real estate technology from the VC community. Even though Fifth Wall’s newest $503M fund is the largest in the category, it nonetheless represents a very small percentage of total venture capital invested into real estate technology.

What spawned this growth in real estate tech over the last 3 years? 

It’s not surprising that technology for the real estate industry would become one of the largest and most attractive categories of venture capital. Real estate is the single largest industry in the U.S., yet historically has been one of the lowest spenders on IT. The industry was (and to a great extent still is) known as being a late adopter of technology solutions. I would characterize the last five years as being an ‘Age of Enlightenment’ for major real estate owners, operators, and developers: CIOs were hired for the first time, large IT budgets have been allocated and are growing, and almost every major real estate owner now recognizes that adoption of new technology is existentially critical to their future strategy.

In part, this realization explains the dramatic growth in the number of corporate investors in Fifth Wall: just two years ago Fifth Wall managed $212M from nine North American real estate corporates, today we manage over $1 billion invested by more than 50 corporate strategic partners from eleven countries. To put it simply, when the world’s largest industry suddenly decides to adopt technology, you can expect a lot of value to be created. And it’s only just begun.

Are generalist VCs investing more in real estate technology? 

Generalist VCs have been pouring capital into real estate technology companies, especially in the last few years. However, not all of those investments have performed well, and there’s usually one simple reason for that: distribution is absolutely everything for real estate technology startups. Getting large real estate corporates to adopt a new technology is often deterministic. In addition, generalist VC firms typically lack the deep real estate relationships and domain expertise to drive distribution and adoption of emerging technologies.

This is why Fifth Wall raised its capital from the largest partners and customers of the very technologies in which we’re investing. Fifth Wall wanted to be the connective platform to link new, emerging real estate technologies with the corporate partners that could serve as the commercial distribution lanes for them globally. A perfect example of this would be the strategic partnership and investment Fifth Wall orchestrated between homebuilder Lennar, one of Fifth Wall’s strategic investors, and Opendoor.

Are more real estate corporates forming their own venture capital arms?

There are more CVC (corporate venture capital) arms at real estate companies than there were three years ago, but they haven’t generally performed well, strategically or financially. Real estate organizations can be especially slow-moving and bureaucratic, making it difficult to attract great venture investment talent. CVC is inherently hard to execute well — in any industry — and for an ‘Old World’ industry such as real estate, CVC arms seem especially challenged.

Fifth Wall is increasingly finding that real estate owners are electing to become a part of the Fifth Wall consortium as we can now offer more distribution to any startup that any single corporate investor can offer investing on their own. Similarly, public market investors also have become critical of publicly-traded real estate corporates starting their own venture arms and have instead favored large real estate investment trusts (REITs) investing in consortium-based funds like Fifth Wall and others. I would expect this trend to continue as more real estate corporates are looking to partner with dedicated consortium-based real estate technology funds as opposed to maintaining their own CVC arm.

What trends are you most excited in Real Estate tech from an investing perspective?

We think there is a profound and exciting opportunity right now at the intersection of real estate technology and sustainability. Real estate owners are incredibly exposed to sustainability risks: the industry consumes 40% of all energy globally, emits 30% of total carbon dioxide, and uses 40% of all raw materials.

There is significant and growing regulatory pressure at both the local and federal levels to make all buildings net-zero carbon: look to Los Angeles and NYC’s recent legislation for two salient examples. Consumers and tenants of buildings are increasingly demanding heightened environmental standards for real estate assets. And finally, institutional investors are increasingly imposing sustainability requirements around their capital deployments.

Meeting the demands of stakeholders (regulators, tenants, and investors) is going to be an extraordinarily heavy lift for the real estate industry over the next decade, and effectively leveraging technology and innovation to drive solutions at scale is going to be crucial in order to meet these goals. Taken together, I believe the technologies to create more sustainable real estate assets represent a $1 trillion opportunity over the next decade.

Categories: Business News

Where top VCs are investing in real estate and proptech (Part 1 of 2)

2019, November 15 - 2:26am

The multi-trillion dollar global real estate market is getting flipped on its head.

Business model innovation, data accessibility and the proliferation of mobile, SaaS and other cloud-native software have already given rise to a cohort of tech unicorns that sit amongst the world’s most influential real estate companies. Emerging technologies and growing capabilities across machine learning, 5G, IoT and more — coupled with fast-moving regulations and dramatic cost structure changes — have opened up opportunities for the next wave of innovation across a wide set of multi-billion dollar real estate verticals and sub-verticals.

And despite WeWork’s implosion garnering countless headlines in the real estate and technology worlds, venture dollars are continuing to spill into real estate tech (or proptech) companies at a rapidly increasing rate. Just upwards of $16 billion in venture capital has flowed into real estate-related startups in 2019 alone, according to data from Crunchbase and Pitchbook, with major fundraises happening across industrial, commercial, residential, and financial categories.

If we follow the money, it’s clear that more and more leading VCs are turning to real estate tech or proptech for ripe opportunities for juicy returns and disruption on a global scale. Given the countless subsectors where exciting new startups are popping up, we asked more than 20 leading real estate VCs who work at firms that span early to growth stages to share where they see opportunity within the colossal real estate category. For purposes of length and clarity, responses have been edited and split up into part one and part two of this survey (in no particular order). In part one of our survey, we hear from:

Answers have been edited for length and clarity.

Where top VCs are investing in real estate and proptech (Part 2 of 2)

Zach Aarons, MetaProp

What trends are you most excited in real estate tech from an investing perspective?

We like to track trends that play out in the broader real estate markets. Due to low interest rates and cap rate compression, real estate investors are now looking for yield through investments in non-traditional asset types. Industrial real estate has performed very well over the last few years, and we see a push toward workforce housing, medical real estate, and senior housing. We are looking at investing in technologies that benefit processes within these non-traditional asset classes.

How much time are you spending on real estate tech right now? Is the market under-heated, over-heated, or just right?

We spend 100% of our time on real estate tech (proptech). The market is definitely hot, but the addressable markets are enormous and adoption is still relatively low and accelerating. We believe that now is a good time to invest in early-stage proptech, provided it’s done prudently.

Are there startups that you wish you would see in the industry but don’t?

We would love to see more startups in the material sciences sector. Innovations like steel, bricks, timber, glass and reinforced concrete are hardly new, and they are still the predominant building materials of today. There have been minor advances like cross-laminated timber; however, we are looking for fundamentally new materials to bring into the building trades.

Plus any other thoughts you want to share with TechCrunch readers.

Proptech is the most fun sector in the world. No other sector shares the complexities and idiosyncrasies of technology that has to be applied to the built world. We are very lucky we get to do what we do.

Pete Flint, NFX

Real estate is the biggest asset class in the world by far, but the products available and service proposition surrounding it are still in the early stages of tech adoption. I see at least three major areas of opportunity for startups in real estate tech.

First is the real estate transaction process. Starting around 2005, companies like Trulia and Zillow, transformed the consumer research experience and home buyers increasingly began their search online. But the transaction itself spanning brokerage, financing and closing remains largely analog, complicated and inefficient. There’s an opportunity for startups to provide innovative solutions to help simplify and digitize the transaction process. Example companies in this area are Ribbon and Modus.

Second is the rise of alternative (or professionalized) living arrangements. I see a big opportunity for startups with a strong technology component to provide solutions for the mismatch between the way consumers want to live today and the aging housing supply that was built for a previous era with different needs and demographics. Companies like Lyric and Zeus are building alternative living solutions with a vertically-integrated short term rental strategy, while co-living startups are providing long-term rentals with value-added services.

Third is spend around the home. The large costs in time, effort, and money of designing, building, and maintaining a home provide an opportunity for tech-enabled solutions in construction, home management, and home maintenance. For example, Setter is providing a better consumer experience for requesting home maintenance services while Constru is bringing AI and machine vision to lower prices and reduce schedule overrun on construction sites. I see many more opportunities for startups like these in this space.

While these are big opportunities, the challenge with investing in real estate tech is to find startups with teams that not only have world-class product and software capabilities, but also world-class knowledge of finance, real estate, and operations. And with the recent WeWork debacle, we have seen a renewed emphasis on the failings of low-margin businesses. So for PropTech startups that are looking for funding today, there’s an increased need to demonstrate good unit economics and long-term margin potential.

Ryan Freedman, Corigin Ventures

At a high level, I believe we are still in the early innings of proptech – maybe 3rd or 4th inning. I always like to make the comparison to fintech. Technically speaking, real estate is a larger asset class than financial services. Between 2013-2017, fintech had cumulative funding of $62.4B vs. proptech’s $10.1B. Even though proptech has ramped up the last few years, we still have a long way to go prior to catching up. In addition, you may recall that PropTech used to be a “sub-sector” of fintech prior to being its own behemoth category. There are several subsectors within PropTech today, that I think a few years from now will be their own categories – construction tech is one of those.

From an investment perspective, we’re spending a lot of time in construction tech right now. From a macro standpoint, we feel there is a supply-demand mismatch with respect to the size of the market and the amount of funding in the space. Construction accounts for ~$10T annual spend globally and employs ~7% of the global workforce. In addition, it’s one of the most antiquated industries in the world. This summer we spent a ton of time digging into the space and have now made a handful of investments. We’re big believers of founder-market-fit, and this category in particular requires category expertise to navigate a very old-school industry.

Another area we’re spending time in is broker-tech. We’ve seen the “tech-enabled brokerage” model be effective in a ton of different industries including PropTech. A lot of investors believe this space is “crowded” – which is true in some sub-sectors (i.e. residential) – but when you look closely within the commercial real estate industry, we believe there is a massive opportunity to disrupt traditional real estate capital markets firms.

Categories: Business News

Backed by Serena Williams and Usain Bolt, Let’s Do This raises $15M from EQT

2019, November 15 - 2:02am

Back in September, endurance events marketplace Let’s Do This (a YC alumni) raised a $5 million seed round from a number of U.S. investors, including Olympic star Usain Bolt and tennis star Serena Williams. As much as I’d like to get excited, this is slightly par for the course for a lot of sports-oriented startups that catch the eye of a celebrity. Not that they are without merit, of course.

Suffice it to say, their sports stars, plus a strong push to get funding from Silicon Valley, has landed the startup with a $15 million Series A round led by European/U.S. VC EQT, with participation of the previous investors, including Trulia founder Pete Flint, Y Combinator, alongside, yes, you guessed it, Usain Bolt and Serena Williams .

The platform lists 30,000 races of all distances and disciplines and claims to be the largest marketplace for endurance events in the world, offering key information about the races and exclusive booking perks for members, such as free cancellation protection. It recently agreed to a partnership with Hearst to power all race listings across Runner’s World, Men’s Health and Women’s Health in the U.S. and the U.K.

The startup is set to expand its team of sport enthusiasts across its San Francisco and London offices. The company was founded by University of Cambridge graduates Alex Rose and Sam Browne — both passionate runners and cyclists who had experienced the arduous process of discovering and entering events.

The Let’s Do This algorithm uses data points from fitness tracking, race history, social connections and more to personalize race recommendations. Part of the marketing story is that people are 12.5 times more likely to develop a fitness habit after 12 months from signing up to a race than from joining a gym.

Serena Williams, the 22-time Grand Slam Champion, commented: “I’ve seen firsthand the incredible impact these events can have on making people fitter, healthier and happier. I love that Let’s Do This is not only making events like these more accessible but also helping to support athletes of all different fitness levels. Women are especially less likely to participate in marathons and obstacle races, so it’s really important there’s a platform encouraging people to step out of their comfort zones and make a positive difference in their lives.”

Usain Bolt said in a statement: “Throughout my career I’ve been lucky enough to inspire people to follow their dreams, get off the couch and get exercising… It’s a really natural fit with what I care about and what I believe in, so I am very happy to be supporting their mission to inspire more people to have epic experiences.”

Founder Sam Browne says the quick fundraising has come about in part because “The market’s big, affluent and we’re already the dominant marketplace in it.”

Categories: Business News

Punchh lands $40M to give physical retailers Amazon-style analytics

2019, November 15 - 1:05am

E-commerce accounts for around 11% of all retail sales in the U.S., but it’s growing much faster than brick-and-mortar sales, going up 14.8% this year versus a mere 1.9% for physical retail, according to eMarketer. So to better compete today and in the future, retailers are now investing in more advanced tools not just to figure out more about what’s selling best, when and where, but how to serve individuals better — in essence, to provide the same kind of help, recommendations, discounts and communication with shoppers that online portals like Amazon provides.

Punchh, a company that got its start in loyalty cards (hence the name) but has since expanded into a wider world of analytics and customer personalization to tap into that trend, is today announcing that it has raised $40 million to continue expanding its business. The funding is being led by Adams Street Partners and Sapphire Ventures (which also led its previous round of $30 million in April 2018), with AllianceBernstein also participating.

To date, Punchh has raised around $73 million, with its valuation over $300 million. (To be clear, CEO and founder Shyam Rao said the exact number wasn’t being disclosed, but he did say it was “well north” of multiples of its last valuation, which was around $100 million. PitchBook has filled in the blanks: A first close of this round this summer, for just over $35 million, came in at a pre-money valuation of $300 million, which would make this about $340 million.)

Punchh has built most of its business up to now in the restaurant industry. Its customers include companies like Yum Brands (the Pizza Hut, Taco Bell, KFC giant), Denny’s and other big and smaller operations, where it provides not just app-based loyalty card services, but ways to link up people’s payment cards with their purchasing history to better track what they are buying, and the ability to build subsequent discount and other promotional campaigns around that. Altogether, Rao tells me that it has data on some 125 million customers globally, covering some 80,000 locations.

“We get access to 100% of all transactions at those locations, working out to 3 billion transactions per month,” Rao said. That data in turn trains Punchh’s AI models to feed the bigger recommendation and analytics engine.

For the last year, Punchh has been slowly expanding into other retail areas, such as convenience stores and more: Its most recent customer win, a deal with Casey’s General Stores, Inc. with 2,100 stores in 16 states in the Midwest, is a sign that the strategy is working.

The opportunity that Punchh is targeting is somewhat ironic — the level of personalization that it’s building into the brick-and-mortar customer experience used to be a cornerstone of what it meant to be a “regular customer” at a local or favorite store, bar or restaurant.

These days — in part because of the decline of the small business, in part because our spending habits have changed, in part because everything has been digitised and retailers are looking for ways to actually downsize human-based customer relations — you don’t typically get that kind of experience anymore.

On the online front, online stores like Amazon have leveraged the model of personalization and seized the opportunity to use data to offer it in their own style: by recommending products to you when you come to their virtual storefronts, based on what you’ve bought or browsed for already online. So while old days of brick-and-mortar personalization have disappeared, they’ve been quickly replaced online — but not so in the physical world.

That’s now slowly changing in part because of innovations from companies like Punchh, which also takes into account cash purchases, as its technology is integrated at the point of sale.

“When you buy something in cash, we may not know who you are but we do know that you come in at, say, 8am and what you bought,” he said. “We can still use that to predict lifetime value and to generate a coupon.” 

Ironically, while the model was pioneered in brick and mortar, it was honed online, and is now again being improved and advanced, Punchh supporters say, back in the physical — not online — world, which is, after all, still accounting for more sales overall.

“Punchh is the undisputed leader in this category. They work with the biggest brands, have the most sophisticated technology, and drive real results for their customers,” said Robin Murray, partner at Adams Street Partners, in a statement. “While everyone else got distracted by maximizing ecommerce, Punchh took the best technologies and practices from that space and applied them to physical retail. Now the world is coming back around – just look at Amazon’s purchase of Whole Foods – and Punchh is already 10 steps ahead of the game.”

Categories: Business News

Fourteen years after launching, 1Password takes a $200M Series A

2019, November 14 - 11:01pm

1Password has been around for 14 years, and the founders grew the company the old-fashioned way — without a dime of venture capital. But when it decided to take venture help, it went all in. Today, the company announced a $200 million Series A from Accel, the largest single investment in the firm’s 35-year history.

Dave Teare says he and his co-founder Roustem Karimov were resolving a major pain point for users around password creation and management when they launched in 2005, and that the Toronto company has been profitable from day one. That’s not something you hear from startups all that often.

Today, Jeff Shiner is CEO. He helped grow the company from 20 employees when he came on board in 2012 to 174 today. He says that as he helped foster this growth, he saw a tremendous market opportunity in front of him. That’s when he decided to finally take the plunge into venture investing.

“We’ve got the sophisticated business tooling that we built over the last five years, so that we can really go out there and just double and triple down on what we’ve been doing, and drive that much faster and further into the market, and again that market is honestly from consumers all the way up to enterprises,” Shiner explained.

While he is confident in his company’s ability to build a product people want and its support for its customers, it needs help with other aspects of the business to grow faster and take advantage of the market potential. “We have far less experience with things like go-to-market programs, with sales, marketing and finance teams — and things like that. And we need to grow, and grow aggressively, which is not just hiring people, but also getting the right partners, finding the right leaders to help us with that growth,” he said.

Accel has a history of investing in mature companies that haven’t taken funding before, so what it’s doing with this round isn’t all that unusual for the firm. Arun Mathew, a partner at Accel, says he doesn’t come across companies like 1Password all that often. “Like Atlassian and Qualtrics, the 1Password team impressed us by building a business that’s not only scaling extremely quickly but also has been profitable since day one — and that’s why today we’re making the biggest single investment in Accel’s 35-year history,” Mathew said in a statement.

The founders actually stumbled onto the idea of 1Password in 2005. They were running a web development consultancy when they decided to resolve a long-standing problem of logging into multiple websites, a particularly acute issue given their day jobs.

They decided to build a tool to help, and when they put it out in the world, they found lots of other people had the same problem. They ended up closing the web consultancy to build 1Password, and the rest, as they say, is history.

Categories: Business News

Moveworks snags $75M Series B to resolve help desk tickets with AI

2019, November 14 - 9:45pm

Moveworks, a startup using AI to help resolve help desk tickets in an automated fashion, announced a $75 million Series B investment today.

The round was led by Iconiq Capital, Kleiner Perkins and Sapphire Ventures. Existing investors Lightspeed Venture Partners, Bain Capital Ventures and Comerica Bank also participated. The round also included a personal investment from John W. Thompson, a partner at LightSpeed Venture Partners and chairman at Microsoft. Today’s investment brings the total raised to $105 million, according to the company.

That’s a lot of money for an early-stage company, but CEO and co-founder Bhavin Shah says his company is solving a common problem using AI. “Moveworks is a machine learning platform that uses natural language understanding to take tickets that are submitted by employees every day to their IT teams for stuff they need, and we understand [the content of the tickets], interpret them, and then we take the actions to resolve them [automatically],” Shah explained.

He said the company decided to focus on help desk tickets because they saw data when they were forming the company that suggested a common set of questions, and that would make it easier to interpret and resolve these issues. In fact, they are currently able to resolve 25-40% of all tickets autonomously.

He says this should lead to greater user satisfaction because some of their problems can be resolved immediately, even when IT personnel aren’t around to help. Instead of filing a ticket and waiting for an answer, Moveworks can provide the answer, at least part of the time, without human intervention.

Aditya Agrawal, a partner at Iconiq, says that the company really captured his attention. “Moveworks is not just transforming IT operations, they are building a more modern and enlightened way to work. They’ve built a platform that simplifies and streamlines every interaction between employees and IT, enabling both to focus on what matters,” he said in a statement.

The company was founded in 2016, and in the early days was only resolving 2% of the tickets autonomously, so it has seen major improvement. It already has 115 employees and dozens of customers (although Shah didn’t want to provide an exact number).

Categories: Business News

48 hours left to save up to €500 on passes to Disrupt Berlin 2019

2019, November 14 - 8:25pm

Livin’ la vida loca pretty much sums up the early-stage startup life. We understand just how crazy-busy life gets, but we’re here to remind all the last-minute mavens that you have just 48 hours to take advantage of early-bird prices to Disrupt Berlin 2019. Depending on the type of pass you buy, you can save up to €500.

The early-bird pricing ends at 11:59 p.m. (CEST) this Friday, 15 November. Hit the brakes on livin’ la vida loca long enough to beat the deadline, buy your early-bird pass and save.

Now that you’ve saved a tidy sum, why not get a jump on planning your time at Disrupt Berlin? If networking’s your game, you’ll want to take advantage of CrunchMatch. Our free business-matching platform combines the best of two worlds — automation and curation — to help you zero in on the people who align with your business goals. Cut through the noise and spend your valuable time talking to the right people. Read about how CrunchMatch works.

Curious about the latest innovations happening across the tech spectrum? Set your GPS for Startup Alley, our exhibition floor, where you’ll find hundreds of early-stage startups displaying their products, platforms and services. Whether you’re an investor, founder or developer — or play some other role in the startup world — you’ll find something new and exciting in Startup Alley.

When you’re in Startup Alley, be sure to check out our TC Top Picks. TechCrunch editors chose these early-stage startups because they represent the best of their respective tech categories. Which startups won this coveted designation? Meet our TC Top Picks for Disrupt Berlin 2019.

Want to see top-notch startups in action? Grab a seat for the world-famous, always-epic Startup Battlefield pitch competition. Between 15-20 teams of startup founders will pitch to a tough panel of veteran VCs and technologists. Every competitor has what it takes, but which one will take it all — the Disrupt Cup, $50,000 in equity-free cash and intense investor and media exposure?

There’s more to experience at Disrupt Berlin, including interviews, fireside chats and panel discussions with world-class speakers. You can go deeper on a specific topic by attending Q&A Sessions, and you can check out what some of the world’s best coders created at the Hackathon. The finalists will pitch their products on the Extra Crunch Stage. Don’t miss what matters most to you — check out the Disrupt Berlin agenda.

Disrupt Berlin 2019 takes place on 11-12 December. You have only 48 hours left to get the best possible price on tickets. You can live la vida loca and still beat the deadline. Buy your early-bird pass before Friday, 15 November at11:59 p.m. (CEST).

Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact our sponsorship sales team by filling out this form.

Categories: Business News

Eigen nabs $37M to help banks and others parse huge documents using natural language and ‘small data’

2019, November 14 - 7:27pm

One of the bigger trends in enterprise software has been the emergence of startups building tools to make the benefits of artificial intelligence technology more accessible to non-tech companies. Today, one that has built a platform to apply power of machine learning and natural language processing to massive documents of unstructured data has closed a round of funding as it finds strong demand for its approach.

Eigen Technologies, a London-based startup whose machine learning engine helps banks and other businesses that need to extract information and insights from large and complex documents like contracts, is today announcing that it has raised $37 million in funding, a Series B that values the company at around $150 million – $180 million.

The round was led by Lakestar and Dawn Capital, with Temasek and Goldman Sachs Growth Equity (which co-led its Series A) also participating. Eigen has now raised $55 million in total.

Eigen today is working primarily in the financial sector — its offices are smack in the middle of The City, London’s financial center — but the plan is to use the funding to continue expanding the scope of the platform to cover other verticals such as insurance and healthcare, two other big areas that deal in large, wordy documentation that is often inconsistent in how its presented, full of essential fine print, and is typically a strain on an organisation’s resources to be handled correctly, and is often a disaster if it is not.

The focus up to now on banks and other financial businesses has had a lot of traction. It says its customer base now includes 25% of the world’s G-SIB institutions (that is, the world’s biggest banks), along with others who work closely with them like Allen & Overy and Deloitte. Since June 2018 (when it closed its Series A round), Eigen has seen recurring revenues grow sixfold with headcount — mostly data scientists and engineers — double. While Eigen doesn’t disclose specific financials, you can the growth direction that contributed to the company’s valuation.

The basic idea behind Eigen is that it focuses what co-founder and CEO Lewis Liu describes as “small data”. The company has devised a way to “teach” an AI to read a specific kind of document — say, a loan contract — by looking at a couple of examples and training on these. The whole process is relatively easy to do for a non-technical person: you figure out what you want to look for and analyse, find the examples using basic search in two or three documents, and create the template which can then be used across hundreds or thousands of the same kind of documents (in this case, a loan contract).

Eigen’s work is notable for two reasons. First, typically machine learning and training and AI requires hundreds, thousands, tens of thousands of examples to “teach” a system before it can make decisions that you hope will mimic those of a human. Eigen requires a couple of examples (hence the “small data” approach).

Second, an industry like finance has many pieces of sensitive data (either because its personal data, or because it’s proprietary to a company and its business), and so there is an ongoing issue of working with AI companies that want to “anonymise” and ingest that data. Companies simply don’t want to do that. Eigen’s system essentially only works on what a company provides, and that stays with the company.

Eigen was founded in 2014 by Dr. Lewis Z. Liu (CEO) and Jonathan Feuer (a managing partner at CVC Capital technologies who is the company’s chairman), but its earliest origins go back 15 years earlier, when Liu — a first-generation immigrant who grew up in the US — was working as a “data entry monkey” (his words) at a tire manufacturing plant in New Jersey, where he lived, ahead of starting university at Harvard.

A natural computing whizz who found himself building his own games when his parents refused to buy him a games console, he figured out that the many pages of printouts that he was reading and re-entering into a different computing system could be sped up with a computer program linking up the two. “I put myself out of a job,” he joked.

His educational life epitomises the kind of lateral thinking that often produces the most interesting ideas. Liu went on to Harvard to study not computer science, but physics and art. Doing a double major required working on a thesis that merged the two disciplines together, and Liu built “electrodynamic equations that composed graphical structures on the fly” — basically generating art using algorithms — which he then turned into a “Turing test” to see if people could detect pixelated actual work with that of his program. Distil this, and Liu was still thinking about patterns in analog material that could be re-created using math.

Then came years at McKinsey in London (how he arrived on these shores) during the financial crisis where the results of people either intentionally or mistakenly overlooking crucial text-based data produced stark and catastrophic results. “I would say the problem that we eventually started to solve for at Eigen became for tangible,” Liu said.

Then came a physics PhD at Oxford where Liu worked on X-ray lasers that could be used to bring down the complexity and cost of making microchips, cancer treatments and other applications.

While Eigen doesn’t actually use lasers, some of the mathematical equations that Liu came up with for these have also become a part of Eigen’s approach.

“The whole idea [for my PhD] was, ‘how do we make this cheeper and more scalable?'” he said. “We built a new class of X-ray laser apparatus, and we realised the same equations could be used in pattern matching algorithms, specifically around sequential patterns. And out of that, and my existing corporate relationships, that’s how Eigen started.”

Five years on, Eigen has added a lot more into the platform beyond what came from Liu’s original ideas. There are more data scientists and engineers building the engine around the basic idea, and customising it to work with more sectors beyond finance. 

There are a number of AI companies building tools for non-technical business end-users, and one of the areas that comes close to what Eigen is doing is robotic process automation, or RPA. Liu notes that while this is an important area, it’s more about reading forms more readily and providing insights to those. The focus of Eigen in more on unstructured data, and the ability to parse it quickly and securely using just a few samples.

Liu points to companies like IBM (with Watson) as general competitors, while startups like Luminance is another taking a similar approach to Eigen by addressing the issue of parsing unstructured data in a specific sector (in its case, currently, the legal profession).

Stephen Nundy, a partner and the CTO of Lakestar, said that he first came into contact with Eigen when he was at Goldman Sachs, where he was a managing director overseeing technology, and the bank engaged it for work.

“To see what these guys can deliver, it’s to be applauded,” he said. “They’re just picking out names and addresses. We’re talking deep, semantic understanding. Other vendors are trying to be everything to everybody, but Eigen has found market fit in financial services use cases, and it stands up against the competition. You can see when a winner is breaking away from the pack and it’s a great signal for the future.”

Categories: Business News

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