Startup News

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

This week wound up being incredibly busy. What else, with a week that included both the Airbnb and Affirm IPO filings, a host of mega-rounds for new unicorns, some fascinating smaller funding events and some new funds?

So we had a lot to get through, but with Chris and Danny and Natasha and your humble servant, we dove in headfirst:

• Affirm has filed to go public! The fintech unicorn is big, growing and losing less money over time. We were pretty impressed in our first look. Then, with a bit more time, we dug deeper and found a weakness or two. Still, Affirm is heading public and not in poor shape.
• Airbnb filed, and we jumped into an Equity Shot as fast as we could on Tuesday to get our minds around the news. Since then, Danny dug through the venture capital winners circle — a surprisingly small subset of firms! — and we also got into some questions that I had about the company’s finances.
• Robinhood is said to have an IPO in the books, so we talked a bit about what we know concerning its Q3 growth.
• And then there was edtech, as always. This week we talked about Tencent backing Udemy, Duolingo raising again and Transfr picking up a Series A that we thought was super interesting.
• Danny wanted to talk about the Trust & Will Series A. We tried to not make that many jokes.
• ZenBusiness raised $55 million as well, in an outsized Series B.
• Financial Venture Studio put together a new fund to cut small checks into seed-stage fintech startups. We think that’s great. Especially given what we know about what is going on in the fintech venture world.
• And Natasha walked us through her latest deep-dive, a look into the world of virtual headquarters. This led to the worst joke of the show.

What a week! Three episodes, some new records, and a very tired us after all the action. More on Monday!

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

Virtual HQs race to win over a remote-work-fatigued market

The coronavirus has displaced millions of workers across the country. In order to recover, companies must focus on re-skilling their workforces in a measured and sustainable way. However, training and recruitment can cost hundreds of thousands of dollars for companies, a heavy investment that is hard to explain during volatile times.

To Bharani Rajakumar, the founder of Transfr, the dilemma of displaced workers is the perfect use case for virtual reality technology. Transfr leverages virtual reality to create simulations of manufacturing-plant shop floors or warehouses for training purposes. The platform’s entry-level gives workers a way to safely and effectively learn a trade, and companies a solution on mass up-skilling needs.

At its core, Transfr is building a “classroom to career pipeline,” Rajakumar says. Companies have influence over the training they need, and students can turn into entry-level employees within vocational schools, on-site or within training facilities. Below is a presentation from the company highlighting the trainee experience.

Transfr’s core technology is its software. Hardware-wise, the business uses Facebook’s Oculus Quest headset with Oculus for Business, not the generic customer hardware available in stores.

Transfr makes money by charging a software-as-a-service licensing fee to companies, which can go for up to $10,000 depending on the size of the workforce.

Transfr started as a mentor-based VR training programming play. The business sold courses on everything from bartending to surgery skills, as shown below:

The shift to displaced worker training, Rajakumar says, came from realizing who had the purchasing power in the relationship of entry-level employees. Hint: It was the companies that had the most to gain from a higher-skilled worker.

Virtual reality has gotten an overall bump and better reputation from the coronavirus pandemic, but is yet to massively be adopted among edtech founders. Rajakumar thinks that it could be revolutionary for the sector. He first saw virtual reality when he attended a gaming conference in San Francisco in 2017.

“I can’t believe that gaming and pornography are the two big industries for this technology,” he said. “I don’t think anybody understands what this is gonna be for teaching and learning.”

Labster, which offers schools VR simulations of science class, had product usage grow 15 times since March. The company raised money in August to expand to Asia.

Labster CEO and co-founder Michael Jensen says that Transfr’s gamification and simply UX is good for adoption, but noted that production costs could be the biggest barrier toward making the company scale.

“It’s simply too expensive to build a stable, well-polished VR application still today, and all players, us included, need to think about reusability, testability and scalability to be able to truly succeed.”

7 investors discuss augmented reality and VR startup opportunities in 2020

Transfr is trying to lower costs by creating a catalog of work simulations, a Transfr virtual reality training facility of sorts, that it can then repurpose for each different customer. Each month, it adds to the training facility with new jobs that are in demand, helping it scale without needing to start from scratch with each new customer. Since March, Transfr’s customers have quadrupled.

Most notably, though, is Transfr’s recent work in Alabama. The company is behind a statewide initiative in Alabama where its software is being used in the community college system and industrial workforce commission for re-skilling purposes. It’s through these large contracts that Transfr will truly be able to scale in its mission to train workforces. Rajakumar hopes to sign 10 to 15 similar contracts in the next year.

It’s an ambitious goal, and one worth raising financing to achieve. Transfr today announced that it has raised $12 million in a round led by Firework Ventures . The money will primarily be used to grow Transfr’s catalog of virtual reality simulations. While the company is not yet profitable, Rajakumar says that Transfr “could be” if they wanted to move at a slower growth rate.

“Before COVID, people would say we’re such good Samaritans for working on workforce development,” he said. “In a post-COVID world, people say that we’re essential.”

Micromobility company Lime says it has moved beyond the financial hardship caused by the COVID-19 pandemic, reaching a milestone that seemed unthinkable earlier this year.

In short, the company is now largely profitable.

Lime said it was both operating cash flow positive and free cash flow positive in the third quarter — a first — and is on pace to be full-year profitable, excluding certain costs (EBIT), in 2021.

During the WSJ Future of Everything event Thursday, Lime CEO Wayne Ting painted a far rosier picture of the company’s future than one might have expected.

There was a time when Bird and Lime, competing domestic scooter rental companies, were raising capital at a torrid pace, fighting for market share, regulatory breathing room and sidewalk real estate. Then, the pandemic hit and the companies had to take shelter.

Lime underwent a round of layoffs in April, taking on capital from Uber the next month in a down-round that brought its valuation under the $1 billion mark. As it announced in a blog post that TechCrunch reviewed before publication, it paused most of its operations for a month during the early COVID-19 days.

“It was certainly a very, very tough decision for us earlier this year and I know we weren’t the only company during COVID,” Ting said during the event. “I think it’s been in so many ways helpful to us to realize how hard these choices can be. We’re going to be growing headcount again. We’re going to do so in a careful way so that we’re not going have to make hard choices like the ones we made earlier this year.”

Now things are better, Lime says. Much better. Indeed, the company claims that it is the “first new mobility company to reach cash-flow positive for a full quarter.”

Cash flow positivity, in general, is an important threshold for a startup to reach as it implies that the company can largely self-fund from that point forward, limiting its dependency on external cash for survival.

Lime also claims that it “reached EBIT positive at the company level over the summer.” The specifics of the phrase “EBIT positive” are important. Was the company employing strict EBIT on its math and not discounting share-based compensation, or was it measuring using adjusted EBIT as many startups do, removing the cost of share-based compensation that shows up in GAAP results? According to the company the number did exclude share-based compensation, making the news slightly smaller.

Perhaps the most bullish data point from Lime is that it expects to be full-year profitable in 2021. TechCrunch asked for specifics because again how one measures profitability matters. It turns out, Lime is basing this projection on EBIT, as opposed to more traditional net income. For a startup this is not a surprising decision, but before we declare Lime fully “profitable,” we’ll want some more GAAP metrics.

Still, it appears that Lime is not going to die, and is, importantly, putting capital into developing new products. The company provided the first example of that new product pipeline on Thursday with the launch of the Gen4 scooter in Paris. It also teased a so-called “third and fourth mode” in the first quarter of 2021 as well as the addition of a swappable battery.

The scooter company wouldn’t give TechCrunch much information about what these third and fourth modes will be. The first two modes are bikes and scooters, which leaves skateboards, cars, flying cars and boats?

Lime did give TechCrunch a little bit of clarification, stating that “move beyond,” means the company will be operating an additional mode, accessed through the Lime app, in line with its goal to serve any trips under five miles. These modes will build on the Lime Platform play, but this will be operated by Lime rather than a partner.

Jump bikes are now on the Lime app and heading to more cities

Lime has long discussed reaching profitability. Perhaps because it and its competitor Bird were infamous for their losses during their early unicorn period.

By November of 2019, Lime was talking about reaching EBIT positivity in 2020. But the start of 2020 was not kind on the company, with 100 of its staff losing their jobs and 12 markets getting dropped. At the time TechCrunch wrote that “Lime is hoping to achieve profitability this year by laying off about 14% of its workforce and ceasing operations in 12 markets,” with the company itself writing at the time that “financial independence [was its] goal for 2020, and [that it was] confident that Lime will be the first next-generation mobility company to reach profitability.”

Depending on how you measure profitability, that could be true.

Things didn’t get easier for Lime later in the year. Its competitor Bird underwent layoffs, and Lime cut more staff in April. At the time, Lime said that it was focused on coming “back stronger than ever when this is over.”

The company is certainly in better shape than it was in April and May. So, how did Lime come back from the brink? In its own estimation, the company took time during its pause to “drill down on getting the business right, narrowing [its] focus and strengthening [its] fundamentals.” That might sound like corporate babble, but by taking a nearly full stop in its operating business, Lime could probably see a bit more clearly what was working and what was not. And with some cuts to what wasn’t, it could set up a future in which its operations were leaner, and more unit-economically positive.

And, now, here we are asking niggling questions about just what sort of profit Lime is really making. Instead of, you know, who might buy its leftover office furniture. It’s a nice turnaround.

Astra is set to launch it’s next orbital rocket, with a window that opens on December 7 and lasts for 12 days following, until December 18, with an 11 AM to 2:30 PM PT block each day during which the launch could occur, depending on weather and conditions on the ground. This is the startup’s Rocket 3.2, a slightly revised and improved version of the Rocket 3.1 launch vehicle it flew in September.

Alameda-based Astra is a startup focused on producing a small, relatively cheap-to-build launch vehicle that can carry small payloads to space at a rapid clip, with flexible launch location capabilities. It was founded by former NASA CTO Chris Kemp, and is backed by funding from Mac Benioff, Innovation Endeavors, Airbus Ventures, Canaan Partners and others, and it already has an active rocket assembly factory operating in the East Bay.

The company was originally founded with the goal of winning DARPA’s Launch Challenge, though the deadline for that has since passed. Astra still aims to essentially satisfying the functional requirements of that competition by creating a launch vehicle that can be launched essentially on-demand when needed by clients looking for more responsive and mobile spaceflight capabilities, including the U.S. Department of Defense.

Rocket startup Astra emerges from stealth, aims to launch for as little as $1M per flight

The goal of this next flight is similar to the goal of Rocket 3.1 in September: essentially to study the startup’s rocket and boost its efficiencies while building its effectiveness. Actually reaching orbit isn’t a primary goal yet, but is a secondary, nice-to-have aim of this launch, which will take off from Kodiak, Alaska. The company already learned a ton from its first launch, including lessons that led to changes and improvements made to Rocket 3.2. It has always aimed for a three-flight initial orbital launch test series, and will also fly a Rocket 3.3 after this one, incorporating additional lessons learned.

Rocket startup Astra’s first orbital launch attempt ends early due to first-stage burn failure

T-minus two days and counting. That’s how much time you have left to score early-bird passes to TC Sessions: Space 2020. If you’re part of this global startup community, don’t miss a two-day deep dive focused on the intrepid visionaries pushing the boundaries of technology and forging the future of space.

And don’t miss the opportunity to attend at the lowest price point. Lock in the early-bird price ($125) before prices increase on 11.13.20 at 11:59 p.m. PST. Beat the deadline, buy your pass and save $100.

TC Sessions are known for featuring outstanding experts in their respective industries and this one, our first dedicated to the rapidly growing space industry, is no exception. The examples below prove the point, and you’ll find plenty more listed in the event agenda.

Building Up a Business Looking Down at Earth: How Earth observation is one of the real moneymakers in the space category and what’s ahead for the industry. Note: The experts on this panel all possess an impressive curriculum vitae. Learn more about them here.

Launching a Launch Startup: The launch business is booming, but besides SpaceX and Rocket Lab, there isn’t anyone far enough along to truly capitalize in terms of new space startups. We’ll talk to the founders of companies hoping to be next in line. Learn more about Tim Ellis here.

Sourcing Tech for Securing Space: Lt. General Thompson is responsible for fostering an ecosystem of non-traditional space startups and the future of Space Force acquisitions, all to the end goal of protecting the global commons of space. He’ll talk about what the U.S. is looking for in startup partnerships and emerging tech, and how it works with these young companies. Learn more about Lt. General Thompson here.

Big opportunity: Don’t miss the Fast Money breakout sessions where you’ll learn how to engage with Space Force and other government accelerators, NASA’s small business programs and attend a primer on working with the Naval Information Warfare Systems Command (NAVWAR).

Get your network mojo running and make the connections that can shoot your startup into orbit. The free, AI-powered CrunchMatch platform simplifies finding and connecting with people who align with your business goals. Schedule 1:1 meetings with potential customers, engineers, investors and founders.

Buy a Space Startup Exhibitor Package and increase brand awareness. It includes digital exhibition space, lead-gen capabilities and three passes. Bonus: All exhibiting startups get to pitch live to thousands of global attendees.

Forging the future of space takes time, money and monumental effort. TC Sessions: Space 2020 helps intrepid pioneers go further together. You have just 48 hours left to beat the clock. Buy your early-bird ticket ($125) before 11.13.20 at 11:59 p.m. PST, and you’ll save $100.

Is your company interested in sponsoring TC Sessions: Space 2020? Click here to talk with us about available opportunities.

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Last night Affirm filed to go public, herding yet another unicorn into the end-of-year IPO corral. The consumer installment lending service joins DoorDash and Airbnb in filing recently, as a number of highly valued, venture-backed private companies look to float while the public markets are more interested in growth than profits.

TechCrunch took an initial dive into Affirm’s numbers yesterday, so if you need a broad overview, please head here.

This morning we’re going deeper into the company’s economics, profitability and the impact of COVID-19 on its business. The last element of our investigation involves Peloton and the historical examples of Twilio and Fastly, so it should be fun.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

Affirm is a company that TechCrunch has long tracked. I was assigned an interview with founder Max Levchin at Disrupt 2014, giving me a reason to pay extra attention to the company over the last six years. This S-1 has been a long time coming.

But is Affirm another pandemic-fueled company going public on the back of a COVID-19 bump, or are its business prospects more durable?

Let’s get into the numbers.

First, let’s discuss Affirm’s core economics. I want to know three things:

• What does Affirm’s loss rate on consumer loans look like?
• Are its gross margins improving?
• What does the unicorn have to say about contribution profit from its loans business?

These are related questions, as we’ll see.

Starting with loss rates, Affirm thinks it is getting smarter over time, writing in its S-1 that its “expertise in sourcing, aggregating, protecting and analyzing data” provides it with a “core competitive advantage.” Or, more simply, Affirm writes that it has “data advantages that compound over time.”

So we should see improving loss rates, yeah? And we do. The company has a very pretty chart up top in its IPO filing that makes its model’s improvement appear staggeringly good over time:

Image Credits: Affirm

But, things aren’t improving as fast inside its results, as Affirm later explains when discussing its aggregate, as opposed to cohort-delineated, results.

Here’s Affirm discussing its provision for credit losses in its most recent quarter (calendar Q3 2020) and the period’s year-ago analog (calendar Q3 2019):

Image Credits: Affirm

As we can see, the percentage of total revenue that Affirm has to provision for expected credit losses is going down over time. That’s what you’d hope to see.

To better explain what’s going on, let’s explore what Affirm means by “provision for credit losses.” Affirm defines the metric as “the amount of expense required to maintain the allowance of credit losses on our balance sheet [that] represents management’s estimate of future losses,” which is “determined by the change in estimates for future losses and the net charge offs incurred in the period.”

And it got quite a lot better in the last year, which the company says was “driven by lower credit losses and improved credit quality of the portfolio.” So, Affirm is getting better at lending as time goes along. What does that mean for its gross margins?

Well, Affirm doesn’t provide direct gross margin results. So we’re left to do the work ourselves. For reference, this is the income statement we’re working off of:

Image Credits: Affirm

Fun, right? Annoying, but fun.

How should we calculate the company’s gross margins? We can’t drill down on a per-product basis given that costs aren’t apportioned in a manner that would allow us to, so we’ll have to take Affirm’s revenue as a bloc, and its costs as a bloc as well.

Autodesk, the U.S. publicly listed software and services company that targets engineering and design industries, acquired Norway’s Spacemaker this week. The startup has developed AI-supported software for urban development, something Autodesk CEO Andrew Anagnost broadly calls generative design.

The price of the acquisition is $240 million in a mostly all-cash deal. Spacemaker’s VC backers included European firms Atomico and Northzone, which co-led the company’s $25 million Series A round in 2019. Other investors on the cap table include Nordic real estate innovator NREP, Nordic property developer OBOS, U.K. real estate technology fund Round Hill Ventures and Norway’s Construct Venture.

In an interview with TechCrunch, Anagnost shared more on Autodesk’s strategy since it transformed into a cloud-first company and what attracted him to the 115-person Spacemaker team. We also delved more into Spacemaker’s mission to augment the work of humans and not only speed up the urban development design and planning process but also improve outcomes, including around sustainability and quality of life for the people who will ultimately live in the resulting spaces.

I also asked if Spacemaker sold out too early? And why did U.S.-headquartered Autodesk acquire a startup based in Norway over numerous competitors closer to home? What follows is a transcript of our Zoom call, lightly edited for length and clarity.

TechCrunch: Let’s start high-level. What is the strategy behind Autodesk acquiring Spacemaker?

Andrew Anagnost: I think Autodesk, for a while … has had a very clearly stated strategy about using the power of the cloud; cheap compute in the cloud and machine learning/artificial intelligence to kind of evolve and change the way people design things. This is something strategically we’ve been working toward for quite a while both with the products we make internally, with the capabilities we roll out that are more cutting edge and with also our initiative when we look at companies we’re interested in acquiring.

As you probably know, Spacemaker really stands out in terms of our space, the architecture space, and the engineering and owner space, in terms of applying cloud computing, artificial intelligence, data science, to really helping people explore multiple options and come up with better decisions. So it’s completely in line with the strategy that we had. We’ve been looking at them for over a year in terms of whether or not they were the right kind of company for us.

Culturally, they’re the right company. Vision and strategy-wise, they’re the right company. Also, talent-wise, they’re the right company, They really do stand out. They’ve built a real, practical, usable application that helps a segment of our population use machine learning to really create better outcomes in a critical area, which is urban redevelopment and development.

So it’s totally aligned with what we’re trying to do. It’s not only a platform for the product they do today — they have a great product that’s getting increasing adoption — but we also see the team playing an important role in the future of where we’re taking our applications. We actually see what Spacemaker has done reaching closer and closer to what Revit does [an existing Autodesk product]. Having those two applications collaborate more closely together to evolve the way people assess not only these urban planning designs that they’re focused on right now, but also in the future, other types of building projects and building analysis and building option exploration.

How did you discover Spacemaker? I mean, I’m guessing you probably looked at other companies in the space.

We’ve been watching this space for a while; the application that Spacemaker has built we would characterize it, from our terminology, as generative design for urban planning, meaning the machine generating options and option explorations for urban planning type applications, and it overlaps both architecture and owners.

The clinical trial management software developer Medable has raised $91 million in a new round of financing as life sciences companies struggle with how to conduct the necessary validation studies of new drugs and devices in a pandemically challenged environment.

Digital and decentralized clinical trials are becoming a necessity, given the health and safety guidelines that have been adopted to respond to the COVID-19 pandemic, the company said. And those changes are driving a shift to services like Medable’s as companies move through the approval process, the company said in a statement.

The company’s new $91 million financing was led by Sapphire Ventures, with follow-on investment from existing investors GSR Ventures, PPD, Inc. and Streamlined Ventures.

Medable’s software manages recruitment, remote screening, electronic consent, clinical outcomes assessment (eCOA), eSource, telemedicine and connected devices, the company said.

Its software is already being used to work on vaccines and therapeutics targeting COVID-19 specifically in addition to facilitating the development of other potentially life-saving therapies and treatments.

“The pandemic has made the world aware of the importance of clinical drug development,” said Dr. Michelle Longmire, CEO and co-founder of Medable, in a statement. “We need transformative technologies that break down critical barriers to improve patient access, experience and outcomes. This new funding will enable Medable to continue our aggressive pursuit of new technologies that improve clinical trials to benefit all patients.”

Trials underway in more than 60 countries are using the service, and Medable has inked partnerships with companies like Datavant to integrate multiple data sources for decentralized trials; MRN to handle home and remote visits; and AliveCor to track in-home health with electrocardiograms. 

Two companies in the data business are teaming up, with Near announcing that it has acquired French startup Teemo.

Near founder and CEO Anil Mathews told me that his company processes data around the online and offline behavior of 1.6 billion consumers each month: “We marry these two worlds and fill in the gap.”

Teemo, meanwhile, is location intelligence company based in Paris. Mathews said that Singapore-headquartered Near has been expanding “east to west,” so by acquiring Teemo, it will have a beachhead to expand throughout Europe — for example by getting direct access to the numerous big brands headquartered in Paris.

And while Mathews described Near as a company that has “from day one put privacy in the front seat,” he also suggested that Teemo has unique advantages in this area, particularly when it comes to Europe’s General Data Protection Regulation.

“Teemo is very pro-privacy,” he said. “They were the first company certified by the French Data Protection Officer as GDPR compliant.” (That certification came after it was one of the first companies to be admonished under GDPR.)

Near raises $100M for an AI that merges online and offline behavior to build consumer profiles

Teemo’s founder and CEO Benoit Grouchko will become Near’s chief privacy officer, and the rest of the Teemo workforce will be joining Near as well, Mathews said. Another big asset: This will give Near access to Teemo’s GDPR-compliant consumer data (which he said will be stored in European data centers and continue to be handled in fully GDPR-compliant ways).

Near could potentially expand into other markets by making similar acquisitions in the future, Mathews added.

The financial terms of the acquisition were not disclosed. Formerly known as Databerries, Teemo has raised a total of $17.9 million in funding from investors such as Index Ventures and Mosaic Ventures.

“We are very excited to join the Near family with whom we share a common DNA of technology and performance,” Grouchko said in a statement. “This will allow us to be stronger and to grow even faster, beyond the French market.”

Mobile advertising startup Databerries raises $16M

Mitigating the effects of climate change and pollution is a global problem, but it’s one that requires local solutions.

While that seems like common sense, most communities around the world don’t have tools that can monitor emissions and pollutants at the granular levels they need to develop plans that can address these pollutants.

Aclima, a decade-old startup founded by Davida Herzl, is looking to solve that problem and has raised $40 million in new funding from strategic and institutional venture capital investors to accelerate its growth.

“We’ve built a platform that enables hyperlocal measurement. We measure all the greenhouse gases as well as regulated air pollutants. We deploy sensor networks that combine mobile sensing where we use fleets of vehicles as a roving network. And we bring that all together and bring that into a back end,” Herzl said. 

The network of air quality monitoring technology that exists — and is subsidized by the government — is costly and lacking in the kinds of minute details on a neighborhood by neighborhood basis that communities can use to effectively address pollution problems.

“A typical air quality monitoring station would cost somewhere between $1 million to $2 million. Here in the Bay Area, the regulator is paying less than $3 million for access to all of this for the entire Bay Area,” Herzl said. 

Aclima’s technologies are already being deployed across California, and some of the company’s largest customers are municipalities in the Bay Area and down south in San Diego. 

Image Credits: Getty Images under a license.

The company has two main offerings: an enterprise professional software product that’s geared toward regulators, experts and businesses that want to get a handle on their greenhouse gas emissions and environmentally polluting operations and a free tool that’s available to the public.

A third revenue stream is through partnerships with companies like Google, which have attached Aclima’s sensors to its roving mapping vehicles to capture climate and environmental quality data alongside geographic information.

“You’re seeing a lot of large companies … are now investing significant amounts into really trying to understand their emissions profile and prioritize emission reductions in a data-driven way,” Herzl said.

The company’s data is also providing real-world tools to communities that are looking to address systemic inequalities in locations that have been hardest hit by industrial pollution.

West Oakland, for instance, has used Aclima’s data to develop community intervention plans to reduce pollution in the communities that have been most impacted by the regions industrial economy.

“The interconnected crises of climate change, public health and environmental justice urgently require lasting solutions,” said Herzl, in a statement. “Measurement will play a key role in shaping solutions and tracking progress. With this coalition of investors, we’re expanding our capacity to support new and existing customers and partners taking bold climate action.”

As a result of the new round of funding, led by Clearvision Ventures, the fund’s founder and managing partner, Dan Ahn will take a seat on the board of directors.

Image Credits: Greg Epperson/Getty Images

“They are the clear category leader in an important and emerging field of data and standards at the intersection of climate, public health and the economy,” Ahn said in a statement. “Both governments and industry will need Aclima’s critical data and analytics to benchmark and accelerate progress to reduce emissions.”

Other investors in Aclima’s latest round include the corporate investment arm of the sensor manufacturer Robert Bosch, which views the company as a strategic component of its efforts to use sensor data to combat climate change. 

“Aclima has built an expansive mobile and stationary sensor network that generates billions of measurements about our most critical resources every week,” says Dr. Ingo Ramesohl, managing director of RBVC, in a statement. “Bosch invents and delivers connected solutions for a smarter future across transportation, home, industrial and many other fields. What Aclima has achieved in connected environmental sensing is an impressive feat. Together, we can accelerate Aclima’s ability to support customers in taking decisive and data-driven climate action.”

Another key investor is Microsoft, which has backed the company through one of the first direct investments from the Microsoft Climate Innovation Fund. 

“We established our Climate Innovation Fund earlier this year to accelerate the development of environmental sustainability solutions based on the best available science,” said Brandon Middaugh, director, Climate Innovation Fund, Microsoft, in a statement. “We’re encouraged by Aclima’s pioneering approach to mapping air pollution sources and exposures at a hyperlocal level and the implications this technology can have for making data-driven environmental decisions with consideration for climate equity.”

Other investors also adding Aclima to their portfolios in this round include Splunk Inc. GingerBread Capital, KTB Network, ACVC Partners and the Womens VC Fund II. Existing shareholders participating in the round include Social Capital, Rethink Impact, Kapor Capital and the Schmidt Family Foundation, the company said in a statement.

It looks like Brandon Middaugh is heading up the $1B Microsoft climate fund

Diagnoss, the Berkeley, California-based startup backed by the machine learning-focused startup studio The House, has launched its coding assistant for medical billing, the company said.

The software provides real-time feedback on documentation and coding.

Coding problems can be the difference between success and failure for hospitals, according to Diagnoss . Healthcare providers were decimated by the COVID-19 outbreak, with hospitals operating below 60% capacity and one-fourth of them facing the potential for closing in a year if the pandemic continues to disrupt care.

The cost pressures mean that any coding error can be the financial push that forces a healthcare provider over the edge.

“For every patient encounter, a physician spends an average of 16 minutes on administration, which adds up to several hours every single day. In addition, codes entered are often wrong — up to a 30% error rate — resulting in missed or delayed reimbursements. We believe that, with the great progress we’ve seen with artificial intelligence and machine learning, we can finally address some of these inefficiencies that are leading to physician burnout and financial strain,” said Abboud Chaballout, founder and chief executive of Diagnoss, in a statement.

Diagnoss acts like a grammar-checking tool, but its natural language processing software is focused on reading doctor’s notes. The company’s tools can provide evaluation and management code for patient encounters; point out missing information in doctors’ notes; and provide predictions about the diagnosis and procedure codes that could apply after reviewing a doctor’s notes.

In a study of 39,000 de-identified EHR charts, the company found that its machine coding service was about 50% more accurate than human coders, according to a Diagnoss review.

Physician practices are already using Diagnoss’ service through a previously announced partnership with the mobile EHR vendor, DrChrono .

The House Fund closes its second fund with $44 million to pour into UC Berkeley grads, alums and faculty

Afresh, a company selling software to track demand and manage orders for fresh produce in grocery stores, is now worth $100 million.

That hefty valuation comes on the back of a $13 million extension to the company’s latest round of funding, led by Food Retail Ventures and joined by existing investors Innovation Endeavors, Maersk Growth and Baseline Ventures, the company said.

As part of the round, James McCann, the former chief executive of Ahold USA, a supermarket holding company, has joined the company’s board of directors.

Companies like Afresh are tackling the problem of food waste with the same kind of enterprise resource planning technologies that manufacturers have adopted — and getting results. Stores using Afresh reduce food waste by a quarter compared to peers without the technology, the company said. These stores also see a 40% boost to their produce operating margins and 2% to 4% top line revenue growth, the company said.

Shelf Engine has a plan to reduce food waste at grocery stores, and $12 million in new cash to do it

“We headed into 2020 with some incredible momentum from early customer partnerships and validation of our technology. As the pandemic set in earlier this year, we were proud of how well our product helped fresh departments adapt during these unpredictable times,” said Matt Schwartz, CEO and co-founder of Afresh, in a statement. “In addition, we’re seeing enormous demand from new customers. So, when industry veterans and inside tech investors came to us and asked if they could double-down on Afresh, we quickly said yes. This new capital will enable us to grow faster and bigger in 2021, thereby accelerating our mission of reducing food waste while making fresh, nutritious food accessible to all.” 

Starting a small company used to be simple. Get some space on Main Street, put out a shingle, and begin plying your trade. Then the regulatory state came, and so did the internet. Now, entrepreneurs have to apply for licenses — sometimes multiple licenses in multiple states — and also handle all the intricacies of building a fully-online digital presence.

There are products that will help you incorporate, some others that will help you with regulatory burdens, and a whole swath of no-code website builders that will try to find you a unique niche in the digital cosmos. Yet, precious few platforms fully integrate these services in one place and centralize them around the entrepreneur.

ZenBusiness has tried to do all that — and even more — over the past few years. Ross Buhrdorf, who formerly founded HomeAway, started the company to make it easier to start businesses. Along the way, I’ve covered the company’s $4.5 million seed in 2018 and $15 million Series A last year, and now the company has a blockbuster Series B to announce today.

The Austin-based public-benefit corporation raised $55 million led by Alex Lazarow of Cathay Innovation, which will be used to continue growing the company and expand its services. The company hit more than 150 employees (who are operating remotely today), and is looking to add 100 or more in the next year.

What’s driving the company’s growth? For one, while the economy has been hit hard over the past few months in the wake of COVID-19, many small businesses suddenly needed to figure out an online strategy and also potentially apply for licenses and other regulatory requirements in multiple states if employees were operating remotely.

The company says that its revenue grew 100% this year, and it now has more than 80,000 small businesses who have launched on its platform. The company is now on its third generation of its website builder tool, and has also expanded many of its other features as well.

One new area of growth for ZenBusiness has been adding financial services to its product suite under the label of ZenBusiness Money. The startup bought Joust Banking a few months ago, a startup that had raised $4.6 million to offer freelance financial services. Those services are now being integrated into ZenBusiness, and Joust co-founder Lamine Zarrad is now SVP of Product for the company.

ZenBusiness founder and CEO Ross Buhrdorf. Photo via ZenBusiness.

With the funding, Buhrdorf said that the company will continue to expand those banking services, and also add more educational materials for entrepreneurs learning about how to operate and grow their businesses.

He noted that the company has prized and continues to place a huge priority on customer service. “When you call us up, we answer right now within 60 seconds, and we think that’s important. And we answer our emails with a very tight timeframe too, within 24 hours, and many within a few hours. And we’re always on chat.”

As the various spaces that ZenBusiness works in have become more competitive, Buhrdorf believes that his company’s service quality and integration sets it apart. “I’m happy there’s competition out there, that means that this is a vibrant space. We’re just focused on delivering value to our customers and making them successful. If we do that with great service, I think we’ll we have the winning combination.”

In addition to Cathay, other investors in the round included GreatPoint Ventures, Breyer Capital and Omega Venture Partners. Returning investors included Greycroft, Lerer Hippeau, Interlock Partners, mark vc, and Austin local firm ATX Venture Partners.

ZenBusiness raises $15M to help founders launch and grow ‘worry-free’

Data engineering is one of these new disciplines that has gone from buzzword to mission critical in just a few years. Data engineers design and build all the connections between sources of raw data (your payments information or ad-tracking data or what have you) and the ultimate analytics dashboards used by business executives and data scientists to make decisions. As data has exploded, so has their challenge of doing this key work, which is why a new set of tools has arrived to make data engineering easier, faster and better than ever.

One of those tools is Datafold, a YC-backed startup I covered just a few weeks ago as it was preparing for its end-of-summer Demo Day presentation.

Datafold is solving the chaos of data engineering

Well, that Demo Day presentation and the company’s trajectory clearly caught the eyes of investors, since the startup locked in $2.1 million in seed funding from NEA, the company announced this morning.

As I wrote back in August:

With Datafold, changes made by data engineers in their extractions and transformations can be compared for unintentional changes. For instance, maybe a function that formerly returned an integer now returns a text string, an accidental mistake introduced by the engineer. Rather than wait until BI tools flop and a bunch of alerts come in from managers, Datafold will indicate that there is likely some sort of problem, and identify what happened.

Definitely read our profile if you want to learn more about the product and origin story.

Not a whole heck of a lot has changed over the past few weeks (some new features, some new customers), but with more money in its billfold, Datafold is going to keep on growing, hiring and taking on the world of data engineering.

Juni, a Swedish pre-launch startup that’s building a banking app and platform for e-commerce and online marketing entrepreneurs, has raised just over €2.1 million in seed funding.

Leading the round is Berlin-based Cherry Ventures — the first deal, I believe, from newly recruited partner Sophia Bendz, who herself is based in Sweden. Various angel investors have also backed Juni, including NA-KD founder and CEO Jarno Vanahatapio and iZettle’s former chief strategy and communications officer Johan Bendz.

Founded by Samir El-Sabini and Anders Orsedal and set to launch fully in early 2021, Juni wants to act as a ‘financial companion” for digital businesses in the e-commerce and online marketing space. Features offered include a debit card with cashback on advertising spend, along with cash flow management, invoice and bank statement matching, and liquidity management. The Juni dashboard also provides a centralized overview of all your bank accounts, networks and payment services.

El-Sabini tells me that eventually the company may go the full route of applying for a bank license in 5-7 years, but for the foreseeable future is utilising the infrastructure of Banking-as-a-Service provider Railsbank, along with other fintechs, to plug those gaps. Besides, most of the value-add is the functionality built on top of core banking and it’s here in relation to e-commerce and online marketing companies that Juni thinks it’s spotted a big opportunity.

“We are helping e-commerce and marketing entrepreneurs understand their business financial health, giving them the right tools (credit plus cash-back) to improve it and grow, while at the same time automating their workload (fetching invoices and matching them to transactions). We aim to be the financial companion for all companies in our space”.

“We all know e-commerce is a rapid moving industry (10 years growth in three months time this year!) making the need for singular platforms to support such e-commerce businesses all the more necessary,” says Cherry Ventures’ Bendz.

Former Spotify marketing exec-turned-VC Sophia Bendz on her love of early-stage investing

“E-commerce professionals are trying to keep up with the acceleration of the market and cannot afford to be bogged down triaging various softwares and systems with respect to their finances”.

Although the official product launch isn’t set until early next year, it’s already possible to sign up for the waitlist with the open beta promised soon.

Meanwhile, the business model is straight forward enough. Initially, Juni will make money on interchange fees (minus the cashback it offers) and by charging a subscription in the best SaaS tradition. Credit is also an obvious revenue stream, too.

Sophia Bendz is leaving Atomico to join Berlin-based seed firm Cherry Ventures

Affirm, a consumer finance business founded by PayPal mafia member Max Levchin, filed to go public this afternoon.

The company’s financial results show that Affirm, which doles out personalized loans on an installment basis to consumers at the point of sale, has an enticing combination of rapidly expanding revenues and slimming losses.

Growth and a path to profitability has been a winning duo in 2020 as a number of unicorns with similar metrics have seen strong pricing in their debuts, and winsome early trading. Affirm joins DoorDash and Airbnb in pursuing an exit before 2020 comes to a close.

Let’s get a scratch at its financial results, and what made those numbers possible.

Affirm recorded impressive historical revenue growth. In its 2019 fiscal year, Affirm booked revenues of $264.4 million. Fast forward one year and Affirm managed top line of $509.5 million in fiscal 2020, up 93% from the year-ago period. Affirm’s fiscal year starts on July 1, a pattern that allows the consumer finance company to fully capture the U.S. end-of-year holiday season in its figures.

The San Francisco-based company’s losses have also narrowed over time. In its 2019 fiscal year, Affirm lost $120.5 million on a fully-loaded basis (GAAP). That loss slightly fell to $112.6 million in fiscal 2020.

More recently, in its first quarter ending September 30, 2020, Affirm kept up its pattern of rising revenues and falling losses. In that three-month period, Affirm’s revenue totaled $174.0 million, up 98% compared to the year-ago quarter. That pace of expansion is faster than the company managed in its most recent full fiscal year.

Accelerating revenue growth with slimming losses is investor catnip; Affirm has likely enjoyed a healthy tailwind in 2020 thanks to the COVID-19 pandemic boosting ecommerce, and thus gave the unicorn more purchase in the realm of consumer spend.

Again, comparing the company’s most recent quarter to its year-ago analog, Affirm’s net losses dipped to just $15.3 million, down from $30.8 million.

Affirm’s financials on a quarterly basis — located on page 107 of its S-1 if you want to follow along — give us a more granular understanding of how the fintech company performed amidst the global pandemic. After an enormous fourth quarter in calendar year 2019, growing its revenues to $130.0 million from $87.9 million in the previous quarter, Affirm managed to keep growing in the first, second, and third calendar quarters of 2020. In those periods, the consumer fintech unicorn recorded a top line of $138.2 million, $153.3 million, and $174 million, as we saw before.

Perhaps best of all, the firm turned a profit of $34.8 million in the quarter ending June 30, 2020. That one-time profit, along with its slim losses in its most recent period make Affirm appear to be a company that won’t hurt for future net income, provided that it can keep growing as efficiently as it has recently.

The pandemic has had more impact on Affirm than its raw revenue figures can detail. Luckily its S-1 filing has more notes on how the company adapted and thrived during this Black Swan year.

Fintech’s uneven new reality has helped some startups, harmed others

Certain sectors provided the company with fertile ground for its loan service. Affirm said that it saw an increase in revenue from merchants focused on home-fitness equipment, office products, and home furnishings during the pandemic. For example, its top merchant partner, Peloton, represented approximately 28% of its total revenue for the 2020 fiscal year, and 30% of its total revenue for the three months ending September 30, 2020.

Peloton is a success story in 2020, seeing its share price rise sharply as its growth accelerated across an uptick in digital fitness.

Investors, while likely content to cheer Affirm’s rapid growth, may cast a gimlet eye at the company’s dependence for such a large percentage of its revenue from a single customer; especially one that is enjoying its own pandemic-boost. If its top merchant partner losses momentum, Affirm will feel the repercussions, fast.

Regardless, Affirm’s model is resonating with customers. We can see that in its gross merchandise volume, or total dollar amount of all transactions that it processes.

GMV at the startup has grown considerably year-over-year, as you likely expected given its rapid revenue growth. On page 22 of its S-1, Affirm indicates that in its 2019 fiscal year, GMV reached $2.62 billion, which scaled to $4.64 billion in 2020.

Akin to the company’s revenue growth, its GMV did not grow by quite 100% on a year-over-year basis. What made that growth possible? Reaching new customers. As of September 30, 2020, Affirm has more than 3.88 million “active customers,” which the company defines as a “consumer who engages in at least one transaction on our platform during the 12 months prior to the measurement date.” That figure is up from 2.38 million in the September 30, 2019 quarter.

The growth is nice by itself, but Affirm customers are also becoming more active over time, which provides a modest compounding effect. In its most recent quarters, active customers executed an average of 2.2 transactions, up from 2.0 in third quarter of calendar 2019.

Also powering Affirm has been an ocean of private capital. For Affirm, having access to cash is not quite the same as a strictly-software company, as it deals with debt, which likely gives the company a slightly higher predilection for cash than other startups of similar size.

Luckily for Affirm, it has been richly funded throughout its life as a private company. The fintech unicorn has raised funds well in excess of $1 billion before its IPO, including a $500 million Series G in September of 2020, a $300 million Series F in April of 2019, and a $200 million Series E in December of 2017. Affirm also raised more than $400 million in earlier equity rounds, and a $100 million debt line in late 2016.

What to make of the filing? Our first-read take is that Affirm is coming out of the private markets as a healthier business than the average unicorn. Sure, it has a history of operating losses and not yet proven its ability to turn a sustainable profit, but its accelerating revenue growth is promising, as are its falling losses.

More tomorrow, with fresh eyes.

In retrospect, 2019 feels like the working world’s last dance with spontaneity. The pre-pandemic past is rife with conferences, running into co-workers and post-work happy hours. Now, as companies such as Microsoft and Twitter declare remote work as the future, the very existence of physical offices is unclear for the long-term.

Yet, to a growing number of entrepreneurs in the Valley, when one physical door closes, a virtual one opens. With the goal of making remote work more spontaneous, there are dozens of new startups working to create virtual HQs for distributed teams. The three that have risen to the top include Branch, built by Gen Z gamers; Gather, created by engineers building a gamified Zoom; and Huddle, which is still in stealth.

The platforms are all racing to prove that the world is ready to be a part of virtual workspaces. By drawing on multiplayer gaming culture, the startups are using spatial technology, animations and productivity tools to create a metaverse dedicated to work.

The biggest challenge ahead? The startups need to convince venture capitalists and users alike that they’re more than Sims for Enterprise or an always-on Zoom call. The potential success could signal how the future of work will blend gaming and socialization for distributed teams.

Twitter says staff can continue working from home permanently

Succulents and spatial technology

Companies within the virtual HQ world sit on a spectrum. On one end, there are the productivity companies, and on the other end, there are the video game companies. In the middle sits a mix between work and play, which is where Branch hopes to live.

There are more than 500 companies on Branch’s waitlist, and of current users, the retention has been 60% after a month of using the platform. So far, it has raised $1.5 million from investors including Homebrew, Naval Ravikant, Sahil Lavingia and Cindy Bi.

Walk through Branch’s virtual HQ and there are all the normal details you’d find in an office on Market Street: There are meeting rooms, lunch tables, a literal watercooler and, yes, succulents on your co-worker’s desk. Most employees log on for 12 hours, and for Election Day, they all had a watch party with a projected live stream in one area of the office.

The founder tells me that he’s hired people — and fired people — all in the virtual offices. Doors, he says, make a big difference.

The platform wasn’t built as a pandemic phenomenon, but in fact, was the result of years of experimentation by the founders, Dayton Mills and Kai Micah Mills. Both founders, since the age of 15, have spent time building Minecraft servers to sell to gamers, netting each thousands of dollars a month. In fact, Kai dropped out of high school to run Minecraft servers full-time, while Dayton tried at 13 to create his own game studio, even hiring an artist to do the illustrations. The game studio failed due to the fact that he was a “kid, 13, and had no money.”

“I spent the majority of my time online playing games with people. So my whole day was playing video games and having people to talk to in the background because I was on constant calls with people,” co-founder Dayton Mills said. “So for me, it’s not hard at all to use it. The question is can I get other people to think the same way?”

For now, Dayton Mills remains confident that his team’s platform will do well. After all, work is a non-negotiable place that you have to show up every day. And why not make that a little more fun?

“You can build a space where everyone comes to work,” he said. “Then after that, you can start building the spaces where they go after work. And it kind of spirals from there.”

Branch, like other virtual HQ platforms, is forced into an interesting spot of being both relevant enough to be used, but passive enough of an app to not feel like a burden. Dayton Mills says that this dynamic has made the team add features like no mandatory video or audio, and a talking icon per user to give the appearance of live interaction. The focus is to keep it casual so people can actually be online for six hours a day.

“People use Slack to work remotely but you go into a physical office and people are still using Slack, he said. The co-founder hopes the same for Branch, and has started measuring how many times people talk to each other in a given day. He says there are hundreds of chats per day, even if some are only for a few seconds.

The key technology that Branch and others are using to create spontaneity is spatial gaming infrastructure. At its core, the technology allows users to only hear people within their nearby proximity, and get quieter as they “walk” away. It gives the feeling of a hallway bump-in.

Dayton Mills thinks that the winning company in this crowded space is the one that can create a space that cultivates and sparks spontaneity.

“You can’t create the serendipity itself directly,” he said. “So create that environment.”

Gather, likely the largest virtual HQ platform out there, has embedded features to do what Mills is suggesting, such as “shoulder taps” to prompt a co-worker to chat, or pool tables where employees can circle around and start a virtual game of pool. The office tour included seeing a corgi on the desk, jack-o-lanterns and this reporter even added some floor plants to the set-up.

Gather’s main floor.

“You don’t need to worry about constantly worrying about if you’re being seen or not, but you will hear anyone who tries to come and talk to you,” said Phillip Wang, the founder of Gather.

The office design includes whiteboards and floating Google Docs to promote announcements and conversations.

Gather has been in the works for more than 18 months, since Wang and his friends graduated college. The team first tried to create custom wearables that would show you which of your friends were able to talk so you can tap into a conversation. When that didn’t work, they pivoted into apps, VR and full-body robotics. Then COVID-19 hit, and they saw an opening in the workplace.

Gather raised some money from angel investors, but has largely stayed away from institutional investors due to the potential of their cap table “biasing” the growth and direction of the company.

“You could easily end up in situations where the only options are ones you’re not happy with,” Wang said, of bringing VCs on at this stage. “We always want the way we make money to be aligned and incentivized to do good for our users.”

Angel investor Josh Elman tells me that many VCs are interested in the product, given traction and team, but also because virtual HQs have the potential to be more than just, well, virtual HQs. While offices are one space that the technology can occupy, the same base can be applied to schools, events, weddings and more.

To show potential, Elman nodded at Hopin, an online events platform that recently raised $125 million at a $2.1 billion valuation. It seems that most VCs agree there will be a number of winners in the events space, but it just comes down to the stickiness of the platform.

With the right value proposition, it’s not hard for people to understand multiplayer online gaming. For example, Epic Games’ Fortnite threw a psychedelic Travis Scott concert and more than 12.3 million people watched.

Fortnite hosted a psychedelic Travis Scott concert and 12.3M people watched

Thus, people are smart enough to understand gaming — but what about wanting to do it every single day with their colleagues, sans music and flashing lights? The total addressable market for professional, social gaming is murky. What if these platforms are a little bit more palatable as healthy businesses, instead of betting that the upstarts are a venture-backable business that could one day become a $100 billion business?

Image Credits: Bryce Durbin

Huddle’s Florent Crivello disagrees. He thinks the market opportunity for his company, an in-stealth remote HQ, is in the trillions because it has the potential to disrupt real estate, transportation and, in a macro sense, urban cities.

“I tell my former colleagues at Uber that I’m still working on transportation,” he said. “It’s just that the future of transportation is no transportation.”

Huddle has been in private beta for six months and is used by teams at Apple and Uber. There have been tens of thousands of hours of meeting on the platform, and Crivello says that some customers have stopped using Slack or Zoom altogether.

“The mistake they’re making at Slack is that there’s a difference between seeing a list of names on the screen and clicking on a name. And there’s a difference between seeing someone in the office and saying hi,” he said. “I think there’s something very human about the latter.”

Sahil Lavingia, the founder of Gumroad, got rid of Gumroad’s office in 2016, and says that they’re never going back.

Work From Home is dead, long live Work From Anywhere

“Offices are just too expensive and not necessary 40 hours a week,” he said. “I don’t think physical offices will go away, but they’ll be vastly diminished now that people know work can happen quite effectively, remotely. It’s also much cheaper.” Lavingia invested in Branch’s seed round.

Megan Zengerle, a partner at Sweat Equity who previously had a career in HR, said that companies considering virtual HQs should think about how long-term the solution is.

“Is that truly the culture you want to build for the company? Is that something that will serve the company long term? Is it logical sense to set up that way?” Zengerle said. “Culture is living and breathing, it’s not a static thing that you set and is done.”

Zengerle thinks that virtual HQs depend largely on the scope and product of the team. Most definitely, she does not think the solution is one size fits all.

“There’re a lot of playbooks coming out of the pandemic,” she said. “But the way you vary happens across each employee in the organization, much less organization by organization.”

These are the hurdles that have limited startups in the past, including 2011 TechCrunch Disrupt winner Shaker, from attracting a large customer base.

Before the pandemic, the world was not culturally ready for widespread remote work. Then, COVID-19 forced offices closed and employees adapted. These startups are betting that with the mass adaptation will come another cultural shift, one that could bring the metaverse into mainstream.

It takes a bold vision and nerves of steel to venture into outer space. The same holds true for the pioneering startups forging the future of space technology. Connect with other bold visionaries at TC Sessions: Space 2020 to go farther and faster together.

If you want to go further and faster for less, you have only three more days to take advantage of early-bird pricing. Purchase your ticket ($125) before the early-bird launch window closes on 11.13.20 at 11:59 p.m. PST and keep $100 in your wallet.

Looking for more ways to save? We offer discounts for groups, students and current employees in government, the military and nonprofits. Want to increase your brand recognition on a global scale? Exhibit in the expo with a Space Startup Exhibitor Package. The package includes three passes, and exhibitors get to pitch live to attendees around the world. Pro Tip: Hit record right before you pitch — it makes a great learning or marketing tool.

Wondering whether a virtual conference measures up? Here’s what Katia Paramonova, founder and CEO of Centrly, says about the real benefits she found by going virtual with TechCrunch:

“I really enjoyed the virtual experience. I didn’t have to be there 24/7 or spend money on a flight, and I still could get work done in the afternoon. The platform was convenient and flexible. If wanted to attend simultaneous sessions, I could easily toggle between them.”

Your ticket to TC Sessions: Space also includes video on demand, which means you won’t have to miss a minute of expert insight, tips and trend spotting from the top founders, investors, technologists, government officials and military minds across public, private and defense sectors.

You’ll find panel discussions, interviews, fireside chats and interactive Q&As on range of topics: mineral exploration, global mapping of the Earth from space, deep tech software, defense capabilities, 3D-printed rockets and the future of agriculture and food technology. Don’t miss the breakout sessions dedicated to accessing grant money. Explore the event agenda now and get a jump on organizing your schedule.

Nothing moves faster than tech, and keeping pace won’t chart a flightpath to success. It requires a prescience that comes from a deep understanding of the industry, the players and the possibilities. Or as Jeff Johnson, vice president of enterprise sales and solutions at FlashParking, puts it:

“Attending TC Sessions helps us keep an eye on what’s coming around the corner. It uncovers crucial trends so we can identify what we should be thinking about before anyone else.”

TC Sessions: Space 2020 takes flight December 16-17, but you have just three days left to take advantage of the early bird special. Be a bold visionary and go farther together — for less. Buy your pass before the deadline hits on 11.13.20 at 11:59 p.m. PST).

Is your company interested in sponsoring TC Sessions: Space 2020? Click here to talk with us about available opportunities.

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When Zoom announced Zapps last month — the name has since been wisely changed to Zoom Apps — VC Twitter immediately began speculating that Zoom could make the leap from successful video conferencing service to becoming a launching pad for startup innovation. It certainly caught the attention of former TechCrunch writer and current investor at Signal Fire Josh Constine, who tweeted that “Zoom’s new ‘Zapps’ app platform will crush or king-make lots of startups.”

Zoom's new "Zapps" app platform will crush or king-make lots of startups. https://t.co/HYtxmaO91R

Dark day for virtual event ticketing apps, since Zoom is doing that itself

Big day for whiteboards & task managers, since it's leaving those to platform partners pic.twitter.com/KCYRDteDIi

— Josh Constine -SignalFire (@JoshConstine) October 14, 2020

As Zoom usage exploded during the pandemic and it became a key tool for business and education, the idea of using a video conferencing platform to build a set of adjacent tooling makes a lot of sense. While the pandemic will come to an end, we have learned enough about remote work that the need for tools like Zoom will remain long after we get the all-clear to return to schools and offices.

We are already seeing promising startups like Mmhmm, Docket and ClassEdu built with Zoom in mind, and these companies are garnering investor attention. In fact, some investors believe Zoom could be the next great startup ecosystem.

Salesforce paved the way for Zoom more than a decade ago when it opened up its platform to developers and later launched the AppExchange as a distribution channel. Both were revolutionary ideas at the time. Today we are seeing Zoom building on that.

Jim Scheinman, founding managing partner at Maven Ventures and an early Zoom investor (who is credited with naming the company) says he always saw the service as potentially a platform play. “I’ve been saying publicly, before anyone realized it, that Zoom is the next great open platform on which to build billion-dollar businesses,” Scheinman told me.

Zoom launches its events platform and marketplace, brings apps to your calls

He says he talked with Zoom leadership about opening up the platform to external developers several years ago before the IPO. It wasn’t really a priority at that point, but COVID-19 pushed the idea to the forefront. “Post-IPO and COVID, with the massive growth of Zoom on both the enterprise and consumer side, it became very clear that an app marketplace is now a critical growth area for Zoom, which creates a huge opportunity for nascent startups to scale,” he said.

Jason Green, founder and managing director at Emergence Capital (another early investor in Zoom and Salesforce) agreed: “Zoom believes that adding capabilities to the core Zoom platform to make it more functional for specific use cases is an opportunity to build an ecosystem of partners similar to what Salesforce did with AppExchange in the past.”

Before a platform can succeed with developers, it requires a critical mass of users, a bar that Zoom has clearly passed. It also needs a set of developer tools to connect to the various services on the platform. Then the substantial user base acts as a ready market for the startup. Finally, it requires a way to distribute those creations in a marketplace.

Zoom has been working on the developer components and brought in industry veteran Ross Mayfield, who has been part of two collaboration startups in his career, to run the developer program. He says that the Zoom Apps development toolset has been designed with flexibility to allow developers to build applications the way that they want.

For starters, Zoom has created WebViews, a way to embed functionality into an application like Zoom. To build WebViews in Zoom, the company created a JS Kit, which in combination with existing Zoom APIs enables developers to build functionality inside the Zoom experience. “So we’re giving developers a lot of flexibility in what experience they create with WebViews plus using our very rich set of API’s that are part of the existing platform and creating some new API’s to create the experience,” he said.

As IBM transitions from software and services to a company fully focussed on hybrid cloud management, it announced  its intention to buy Instana, an applications performance management startup with a cloud native approach that fits firmly within that strategy.

The companies did not reveal the purchase price.

With Instana, IBM can build on its internal management tools, giving it a way to monitor containerized environments running Kubernetes. It hopes by adding the startup to the fold it can give customers a way to manage complex hybrid and multi-cloud environments.

“Our clients today are faced with managing a complex technology landscape filled with mission-critical applications and data that are running across a variety of hybrid cloud environments – from public clouds, private clouds and on-premises,” Rob Thomas, senior vice president for cloud and data platform said in a statement. He believes Instana will help ease that load, while using machine learning to provide deeper insights.

IBM CEO Arvind Krishna wants to completely transform his organization

At the time of the company’s $30 million Series C in 2018, TechCrunch’s Frederic Lardinois described the company this way. “What really makes Instana stand out is its ability to automatically discover and monitor the ever-changing infrastructure that makes up a modern application, especially when it comes to running containerized microservices.” That would seem to be precisely the type of solution that IBM would be looking for.

As for Instana, the founders see a good fit for the two companies, especially in light of the Red Hat acquisition in 2018 that is core to IBM’s hybrid approach. “The combination of Instana’s next generation APM and Observability platform with IBM’s Hybrid Cloud and AI technologies excited me from the day IBM approached us with the idea of joining forces and combining our technologies,” CEO Mirko Novakovic wrote in a blog post announcing the deal.

Indeed, in a recent interview IBM CEO Arvind Krishna told CNBC’s Jon Fortt, that they are betting the farm on hybrid cloud management with Red Hat at the center. When you combine that with the decision to spin out the company’s managed infrastructure services business, this purchase shows that they intend to pursue every angle

“The Red Hat acquisition gave us the technology base on which to build a hybrid cloud technology platform based on open-source, and based on giving choice to our clients as they embark on this journey. With the success of that acquisition now giving us the fuel, we can then take the next step, and the larger step, of taking the managed infrastructure services out. So the rest of the company can be absolutely focused on hybrid cloud and artificial intelligence,” Krishna told CNBC.

Instana, which is based in Chicago with offices in Munich, was founded in 2015 in the early days of Kubernetes and the startup’s APM solution has evolved to focus more on the needs of monitoring in a cloud native environment. The company raised $57 million along the way with the most recent round being that Series C in 2018.

The deal per usual is subject to regulatory approvals, but the company believes it should close in the next few months.

Instana raises $30M for its application performance monitoring service