Startup News

Infarm, the vertical farming company that has built a network of urban farms to grow fresh food closer to consumers, has raised $170 million in new investment in a “first close” of a Series C.

Leading the round — which is expected to reach $200 million and is a mixture of equity and debt — is LGT Lightstone, with participation from Hanaco, Bonnier, Haniel and Latitude. Existing Infarm investors Atomico, TriplePoint Capital, Mons Capital and Astanor Ventures also followed on. It brings the company’s total funding to date to more than $300 million.

That’s likely testament to the speed of new retail partnerships over the last 12 months. They include Albert Heijn (Netherlands), Aldi Süd (Germany), COOP/Irma (Denmark), Empire Company’s Sobeys, Safeway and Thrifty Foods (Canada), Kinokuniya (Japan), Kroger (U.S.) and Marks & Spencer and Selfridges (U.K.).

With operations across 10 countries and 30 cities worldwide, Infarm says it now harvests more than 500,000 plants monthly, and in a much more sustainable way than traditional farming and supply chains. Its modular, IoT-powered vertical farming units claim to use 99.5% less space than soil-based agriculture, 95% less water, 90% less transport and zero chemical pesticides. In addition, 90% of electricity used throughout the Infarm network is from renewable energy and the company has set a target to reach zero emission food production next year.

Founded in 2013 by Osnat Michaeli, and brothers Erez and Guy Galonska, Infarm’s “indoor vertical farming” system is capable of growing herbs, lettuce and other vegetables. It then places these modular farms in a variety of customer-facing city locations, such as grocery stores, restaurants, shopping malls and schools, thus enabling the end-customer to actually pick the produce themselves. To further scale, it also installs Infarms in local distribution centres.

The distributed system is designed to be infinitely scalable — you simply add more modules, space permitting — whilst the whole thing is cloud-based, meaning the farms can be monitored and controlled from Infarm’s central control centre. It’s also incredibly data-driven, a combination of IoT, Big Data and cloud analytics akin to “Farming-as-a-Service.”

The idea, the founding team told me back in 2017 when I profiled the nascent company, isn’t just to produce fresher and better-tasting produce and re-introduce forgotten or rare varieties, but to disrupt the supply chain as a whole, which remains inefficient and produces a lot of waste.

“Behind our farms is a robust hardware and software platform for precision farming,” explained Michaeli at the time. “Each farming unit is its own individual ecosystem, creating the exact environment our plants need to flourish. We are able to develop growing recipes that tailor the light spectrums, temperature, pH and nutrients to ensure the maximum natural expression of each plant in terms of flavor, colour and nutritional quality.”

On that note, I caught up with two of Infarm’s founders to get a brief update on the Berlin-headquartered company and to dive a little deeper into how it will continue to scale.

TechCrunch: What assumptions did you make early on that have turned out to be true or, more interestingly, not panned out as expected?

Osnat Michaeli: When we first chatted about four years ago, we were 40 people in Berlin and much of the conversation centered around the potential that our approach to urban vertical farming might have for retailers. While for many it was intriguing as a concept, we couldn’t have imagined that a few years later we would have expanded to almost 10 countries (Japan is on its way) and 30 cities, with partnerships with some of the largest retailers in the world. Our assumptions at the time were that retailers and their customers would be attracted to the taste and freshness of produce that grew right in front of them in the produce section, in our farms.

What we didn’t anticipate was how much and how quickly the demand for a sustainable, transparent and modular approach to farming would grow as we, as society, begin to feel the impact of climate change and supply chain fragility upon our lives, our choices and our food. Of course we also did not anticipate a global pandemic, which has underscored the urgency of building a new food system that can democratize access to high-quality, amazing-tasting food, while helping our planet regenerate and heal. The past few months have confirmed the flexibility and resilience of our farming model, and that our mission is more relevant than ever.

In terms of signing on new retailers, based on your progress in the last 12 months, I’m guessing this has gotten easier, though undoubtedly there are still quite long lead times. How have these conversations changed since you started?

Erez Galonska: While lead times and speed of conversations can vary depending upon the region and retailer. In mature markets where the concept is familiar and we’re already engaged, deal conversations can reach maturity in as little time as three months. Since we last spoke we are already working with most of the leading retailers that are well established in Europe, U.K. and North America. Brands which in each of their markets are both forerunners in a retail industry rapidly evolving to meet the demand for consumer-focused innovation, while proving that access to sustainable, high-quality, fresh and living produce is not only possible, but can be available in produce aisles today, and every day of the year, with Infarm.

I’m interested to understand where Infarms are installed, in terms of if the majority is in-store and consumer-facing or if the most scalable and bulk of Infarm’s use cases are really much larger distribution hubs in cities or close to cities, i.e. not too far away from places with population/store density but not actually in stores. Perhaps you can enlighten me on what the ratio looks like today and how you see it developing as vertical farming grows?

Erez Galonska: Today across our markets, the split between our farms in stores and in distribution centers is roughly 50/50. However, as you anticipate, we will be expanding our network this year with many more distribution hubs. This expansion will likely lead to an 80/20 split as early as next year, with the majority of our regions being served with fresh, living produce delivered throughout the week from centrally located hubs. This not only offers retailers and restaurants flexibility in terms of volumes of output, and the ability to adapt the presentation of our offerings to floor areas of different sizes, but it also allows us to begin to serve whole regions from our next-generation farms under development today.

Based in our hubs, these farms will deliver the crop equivalent of an acre or more of fresh produce on a 25 m2 footprint, with significant further savings in energy, water, labor and land use. We believe this technology will truly challenge ideas of what is possible in sustainable, vertical farming and we look forward to talking about it more soon.

Lastly, what are the main product lines in terms of food on the shelves?

Osnat Michaeli: We have a catalog of more than 65 herbs, microgreens and leafy greens that is constantly growing. Our offerings range from the known and common varieties like Coriander, Basil, or Mint, to specialty products like Peruvian Mint, Red Veined Sorrel or Wasabi Rucola.

Because our farms give us excellent control over every part of a plant’s growth process, and can imitate the complexity of different ecosystems, we will be able to expand the diversity of Infarm produce available to consumers to include root vegetables, mushrooms, flowering crops and even superfoods from around the world in the near future. What you see today with Infarm is still only the beginning.

Building and growing a startup is hard, but pivoting said startup into something new and then achieving that same growth is even harder. But it’s not impossible.

Phaedra Ellis-Lamkins, founder and CEO of PromisePay, and Jessica Matthews, founder and CEO of Uncharted Power, both have experiences doing this. At TechCrunch Disrupt, they shed some light on their respective, yet somewhat similar, paths.

PromisePay, formerly known as Promise, got its start as a bail reform startup that aimed to reduce the number of people held behind bars simply because they can’t pay bail. Now, it’s focused on helping people make payments for parking and traffic tickets, court fees and child support.

“We actually had this huge existential crisis,” Ellis-Lamkins said. “We at Promise are focused on ending mass incarceration and on decreasing the number of people in jails. So we started to be very successful and we sold very well. And what we realized fundamentally is when we created efficiency, it made the systems more efficient at incarcerating people. It didn’t make them more efficient at what our wrong assumption had been, which is if the system is more efficient, it would decrease the number of people in the system. And so we made a decision that growth was not consistent with who we were as a company. So I went back to our investors, which is hard when you’re making money and said, this is not the path because I don’t think this is a long-term path.”

She told investors there are already people who sell their tech to law enforcement, but what Promise wants to do is liberate people. It became clear to her that she was selling to the wrong people when she was talking to a client who said the difference between them and her was that she cares about people in the criminal justice system and they don’t. Ellis-Lamkins told investors she was going to stop selling to prisons and jails, and offered to give investors their money back.

Instead, she started looking at why people are ending up incarcerated.

“And luckily, that spurred growth, but I’m just not going to be a company that grows on the backs of poor people and Black and brown people, because there is a better way,” she said. “But it was frightening in the moment to abandon a market in which we’re making money.”

Thankfully, she said, not one of her investors had a problem with her decision.

Matthews said she had a relatively similar experience with her company, Uncharted Power, which got its start as Uncharted Play. Her company’s first product was an energy-harnessing soccer ball that could power a lamp after just a few hours of playing with it. She later integrated that tech intro strollers to power cell phones.

But after raising her Series A round for Uncharted Play, Matthews realized that her company needed to go all-in on infrastructure. She thought about the ultimate goal of her company, which is to get people the infrastructure they need in their lives. She just didn’t see a way of doing that with soccer balls.

“So we got good at making these things and pushing them and scaling them out, but when you have this balance of not just profit and impact but impact because you know that you’re a member of the group you’re trying to serve. For me, it was sitting down and saying is this actually solving the problem even if it’s successful.”

Matthews said she realized it wasn’t. So that meant walking away from the products that were bringing in millions and had 64% gross profit margins, Matthews said.

But it all paid off. Last year, Uncharted Power raised additional funding from an investor that validated her thesis for the future of power infrastructure.

“That moment was huge for us,” she said.

Matthews and Ellis-Lamkins also had some other gems worth sharing about imposter syndrome and measuring success. Here are some more highlights from the conversation.

On imposter syndrome and representation 

Ellis-Lamkins:

It feels like tech has failed so significantly in investing in people they don’t know and missed out in growing companies because of that. So I think our obligation is to help make sure that we are not the only ones.

Matthews:

It’s not imposter syndrome, it’s representation syndrome because I feel the exact same way. When we raised our Series A, the immediate thing I thought was, ‘Oh, man. I can not lose these people’s money.’ This is huge and if we don’t work, it’s not even about us, it’s about every other person who looks like me.

On measuring success

Ellis-Lamkins:

I think part of what we should measure is how does technology improve our society in general, a measurement of success. I do think that if we measure success, it should not just be, I could make a billion dollars or have a company that valued at a billion dollars if the consequences are greater than the actual benefit and so I think that’s really important.

Matthews:

Let’s get rid of the term “social enterprise.” It’s bullshit. Enterprise is an enterprise. A problem’s a problem. Let’s create a value system based on the problems. There are some problems that are more important than others. And knowing that means we need to back and support the founders who get that more than others, and then beyond that.

If you’ve got a large online following, as well as knowledge that might be valuable to that audience, Prox is a startup currently in beta testing that’s building tools to help you make money.

Michael Mathieu, formerly the CEO of YuMe, joined Prox as CEO in January. The goal, he told me, is to create an entire suite of “back office” tools for experts and influencers, but the company is starting out by offering an easy way to host one-on-one video sessions with fans and “knowledge seekers.”

“People who are influencers on social media and on YouTube, they don’t control that customer,” Mathieu said. “It’s a YouTube customer, so if you’re going to monetize, it’s through a slice of YouTube ad revenue.”

So Prox is designed to help those experts make money more directly from anyone who wants to connect with them, and to understand that audience. Mathieu suggested that the need has intensified during the pandemic, with more experts and creators asking, “How do I connect to my audience in more significant ways, have multiple revenue streams and actually have really good visibility into who they are?”

Head of Customer Success Nicole Healy said that many of the “pros” already using Prox are “published authors looking for another connection point.”

Image Credits: Prox

The Prox team gave me a tour of the platform from both the knowledge seeker and pro side. It looks fairly straightforward for someone to try to schedule a meeting with a pro and then jump into a video call. The knowledge seeker controls the meeting agenda, but the pro also gets to screen appointments and topics in advance, and they also set their own rates for how much their time is worth. (Head of Product Matt Coalson said some pros are able to charge $150 for a 15-minute call.)

Afterwards, both the knowledge seeker and the pro can rate the experience, and they can schedule follow-up calls if it went well. Prox also provides analytics for pros around the kinds of feedback they’re getting and the most commonly asked questions.

I’ve previously written about Superpeer, another startup helping influencers and experts make money from one-on-one calls, but when I brought it up, Mathieu suggested that the competitive landscape is much broader, with influencers having access to a range of tools for marketing and monetization.

“The way we position ourselves compared to the competition is, we’re really purpose-built for providing value to that pro,” he said. “It’s not just about that platform — video, audio, ratings, that has significant value, but our goal is to provide the layer above that, to give the pro, in essence, a road map: If you’re on Prox and you do these two or three things, you’ll make 10x more money.”

Venture capitalists ‘like and subscribe’ to influencers

“Scandal” and “Little Fires Everywhere” star Kerry Washington won her first Emmy Award yesterday, but when she joined us at TechCrunch Disrupt today, she was much more focused on her work as an investor.

Washington traced much of her interest in technology to the premiere of “Scandal” in 2012. It had, she said, been “almost 40 years since a Black woman was the lead on a network drama,” which meant that the pressure was high — and that “Scandal” was considered a “bubble show,” with the network “taking a big risk by putting a Black woman in the lead.”

So Washington said she drew on her experience as a volunteer with Barack Obama’s presidential campaigns in 2008 and 2012, and particularly her work with social media organizing, to try to rally support.

“From the very beginning of that show, we leveraged the power of technology to support the show in ways that traditional media wasn’t supporting us — or was waiting to see what the public response would be,” she said. “Really, I think the Twitter-verse allowed us to have a second season, and then we kind of took off from there.”

As for how that led to investing her own money into startups, Washington suggested that she wanted to be more involved.

“When it comes to my engagement with any sort of any creative relationship that I’m in, I’m not really good at having a seat at the table without a voice,” she said. For example, she noted, “I gravitated very quickly in my career …  toward being a producer.”

Similarly, she said that using tech tools was exciting, “but figuring out how to have more stake, more input, more creative voice, more ability to impact the technology itself was really exciting for me.”

Washington’s first investment was in female co-working space The Wing, which she explained as being part of her commitment to “ideas of inclusivity and community, celebrating identity in a really inclusive way, supporting women’s voices, supporting marginalized voices.”

The Wing has seen its share of success, but also controversy, with a New York Times article reporting that a number of employees (particularly women of color) felt that they had been mistreated. In the wake of these criticisms, CEO Audrey Gelman departed this summer.

When asked about her response to the controversy, Washington said, “As somebody who’s an investor, as a woman of color, it’s important to me that there is increased transparency and also accountability.” She said that over the past few months, her role as an investor has been “really just supporting leadership in this transition,” while also expressing a “deep desire” for that transparency and accountability.

Other investments include Community, which allows celebrities to manage text message conversations with fans. (Washington promised that if you text her, she will really be the one who responds — though she also asked for patience, since she’s texting with “thousands and thousands of people.”) There’s also direct-to-consumer teeth-straightening startup Byte, which Washington said she uses herself.

As for her dream startup, Washington said she has a not-yet-announced investment in a direct-to-consumer fashion startup, “and it feels really dreamy at the moment.”

Again, these have all been personal investments so far. Would Washington consider raising a fund or joining a venture capital firm?

“I have considered it, but at this point, I really like having the more intimate and really hands-on relationship with the investments that I’ve made,” she said. “I feel like I’m really able to be in the trenches and bring more value as an individual investor.”

Asset management might not be the most exciting talking topic, but it’s often an overlooked area of cyber-defenses. By knowing exactly what assets your company has makes it easier to know where the security weak spots are.

That’s the problem JupiterOne is trying to fix.

“We built JupiterOne because we saw a gap in how organizations manage the security and compliance of their cyber assets day to day,” said Erkang Zheng, the company’s founder and chief executive.

The Morrisville, North Carolina-based startup, which spun out from healthcare cloud firm LifeOmic in 2018, helps companies see all of their digital and cloud assets by integrating with dozens of services and tools, including Amazon Web Services, Cloudflare and GitLab, and centralizing the results into a single monitoring tool.

JupiterOne says it makes it easier for companies to spot security issues and maintain compliance, with an aim of helping companies prevent security lapses and data breaches by catching issues early on.

The company already has Reddit, Databricks and Auth0 as customers, and just secured $19 million in its Series A, led by Bain Capital Ventures and with participation from Rain Capital and its parent company LifeOmic.

As part of the deal, Bain partner Enrique Salem will join JupiterOne’s board. “We see a large multi-billion-dollar market opportunity for this technology across mid-market and enterprise customers,” he said. Asset management is slated to be a $8.5 billion market by 2024.

Zheng told TechCrunch the company plans to use the funds to accelerate its engineering efforts and its go-to-market strategy, with new product features to come.

Use ‘productive paranoia’ to build cybersecurity culture at your startup

Sophie Alcorn Contributor Share on Twitter Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives. More posts by this contributor

• Dear Sophie: What is a J-1 visa and how can we use it?
• Dear Sophie: Can we sponsor an H-1B university researcher for an EB-1B green card?

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

“Dear Sophie” columns are accessible for Extra Crunch subscribers; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.

Dear Sophie:

I’m entering my second year in the U.S. under a five-year J-1 research visa from Italy. When we came we thought it would be temporary, but our plans have changed and now we want to try to stay in the U.S. My husband started his own company here on his J-2 visa work permit, and our daughter was born here. However, we’re supposed to return to Italy for two years. How can we get a 212(e) waiver?

—Positive in Palo Alto

Dear Positive:

Congrats on your accomplishments — the birth of your daughter, your research position and your husband’s startup. Happy to share about the J-1 visa, the two-year home residency requirement (a section of the law called “212(e)”) and obtaining a waiver so you can seek a green card or another type of visa. For more background, check out my podcast on the two-year foreign residency requirement and filing a waiver and last weeks’ Dear Sophie column with an overview of the types of J-1 visas. The earlier you begin preparing your waiver application, the better.

The J-1 Educational and Cultural Exchange Visa is intended for people from around the globe to work or study in the U.S. and then take their newly acquired knowledge and skills back to their home country. Given that, it is not a direct path if you decide after your arrival to remain longer term in the U.S. I recommend working with an experienced immigration lawyer to devise a strategy for reaching your goals beyond getting a waiver. I also recommend talking with your employer to assess whether they can later sponsor you for a green card.

When it comes to pop culture, a company executive or history questions, most of us use Google as a memory crutch to recall information we can’t always keep in our heads, but Google can’t help you remember the name of your client’s spouse or the great idea you came up with at a meeting the other day.

Enter Luther.AI, which purports to be Google for your memory by capturing and transcribing audio recordings, while using AI to deliver the right information from your virtual memory bank in the moment of another online conversation or via search.

The company is releasing an initial browser-based version of their product this week at TechCrunch Disrupt where it’s competing for the $100,000 prize at TechCrunch Disrupt Battlefield.

Luther.AI’s founders say the company is built on the premise that human memory is fallible, and that weakness limits our individual intelligence. The idea behind Luther.AI is to provide a tool to retain, recall and even augment our own brains.

It’s a tall order, but the company’s founders believe it’s possible through the growing power of artificial intelligence and other technologies.

“It’s made possible through a convergence of neuroscience, NLP and blockchain to deliver seamless in-the-moment recall. GPT-3 is built on the memories of the public internet, while Luther is built on the memories of your private self,” company founder and CEO Suman Kanuganti told TechCrunch.

It starts by recording your interactions throughout the day. For starters, that will be online meetings in a browser, as we find ourselves in a time where that is the way we interact most often. Over time though, they envision a high-quality 5G recording device you wear throughout your day at work and capture your interactions.

If that is worrisome to you from a privacy perspective, Luther is building in a few safeguards starting with high-end encryption. Further, you can only save other parties’ parts of a conversation with their explicit permission. “Technologically, we make users the owner of what they are speaking. So for example, if you and I are having a conversation in the physical world unless you provide explicit permission, your memories are not shared from this particular conversation with me,” Kanuganti explained.

Finally, each person owns their own data in Luther and nobody else can access or use these conversations either from Luther or any other individual. They will eventually enforce this ownership using blockchain technology, although Kanuganti says that will be added in a future version of the product.

Image Credits: Luther.ai

Kanuganti says the true power of the product won’t be realized with a few individuals using the product inside a company, but in the network effect of having dozens or hundreds of people using it, even though it will have utility even for an individual to help with memory recall, he said.

While they are releasing the browser-based product this week, they will eventually have a stand-alone app, and can also envision other applications taking advantage of the technology in the future via an API where developers can build Luther functionality into other apps.

The company was founded at the beginning of this year by Kanuganti and three co-founders including CTO Sharon Zhang, design director Kristie Kaiser and scientist Marc Ettlinger. It has raised $500,000 and currently has 14 employees including the founders.

In the midst of Disrupt 2020, we’re busy keeping tabs on all the panels, chats, demos and battling startups, but we’re also prepping for what comes next. Next Tuesday, the Extra Crunch Live series of Q&As with founders and investors resumes, this time with guests Andrew Braccia and Sonali De Rycker from Accel.

If you are just catching up to Extra Crunch Live, we’ve been hosting live discussions since the early COVID-19 days here in the United States with folks like Mark Cuban, Plaid founder Zach Perret and Sequoia’s Roelof Botha taking part.

The Accel chat is going to be interesting for a few reasons, one of which is that Braccia is the opposite of loud — TechCrunch has noted his general reticence to public comment in prior reporting. But Braccia was early money into Slack, which means he’ll have good perspective into the direct listing market, the IPO market writ large, SaaS and the remote-work boom. We’ll make sure to get the latest.

De Rycker is a bit more active in the public sphere and has lead deals into companies like Sennder (which recently did a deal with Uber), Shift Technology and Avito, which sold to Naspers for north of $1 billion last year. As you can tell from that string of deals, De Rycker will be able to give us a working dig into what’s up in the European startup scene.

And as De Rycker worked as an investment banker before VC, we’ll see what she has to say regarding today’s M&A and IPO climes.

All in all, it’s going to be a good time that I am looking forward to hosting. Login details follow for Extra Crunch folks, and you can snag a cheap trial here if you need access.

Until then, enjoy Disrupt and we’ll see you on Tuesday. Don’t forget to bring your best questions, and we might get to one of them!

Details

• Add the chat to your calendar

Meet Jefa, a startup that is building a challenger bank specifically designed for women in Latin America. The company is building a product that focuses on solving the problems that women face when opening a bank account and managing it. It is participating in the Startup Battlefield at TechCrunch Disrupt.

“There are 1.4 billion people in the world without a bank account. Out of those 1.4 billion, nearly 1.3 billion are women,” founder and CEO Emma Smith told me.

In many ways, bank accounts have been designed by men and for men. Even if you look at fintech startups, most of them have male founders. There is already a handful of challenger banks in Latin America, such as Nubank, Banco Inter, Banco Original and Ualá. But most challenger banks focus on mature markets, such as Europe and the U.S. Smith thinks that targeting women in emerging countries represents a huge market opportunity.

Jefa has carefully examined the reasons why women in Latin America often don’t have bank accounts or are unsatisfied with their bank accounts.

For instance, banks often ask you to hold a minimum balance even though women statistically earn less than men. Banks tell you to come to a branch to open an account even though many families only have one car and taking the bus can be a hassle. Banks have overly confusing products and don’t invest in marketing channels for women.

“It’s for all those reasons that we thought we need a fully digital solution that is branchless,” Smith said. “We have no minimum balance requirement; all you need is a government-issued ID and you can sign up in three or four minutes.”

Image Credits: Jefa

When Jefa launches in a few months, opening an account will be free. You get an account and a card a few days later. The service has a built-in savings feature that lets you round up purchases and set goals.

There will be a reward program called “It pays to be a woman.” Based on your purchases, you’ll earn points on hygiene products, going to the gynecologist, etc.

At first, you’ll be able to convert those points to cash back. Later, you could imagine redeeming your points at places that matter to women.

Jefa users will be able to send and receive free peer-to-peer payments within the app. And when it comes to withdrawing and topping up your account, Jefa is building a network of merchants to securely manage cash.

The company is also working on a credit building platform that should work a bit like Chime’s equivalent feature.

Jefa will be launching first in Central America, starting with Costa Rica and Guatemala. There are already 50,000 people on the waiting list. The company knows that it’ll be important to build a community around its product. So you can expect a community forum so that you can discuss finance with other Jefa users.

Banks tend to have a bad reputation because they are soulless entities that don’t necessarily understand your needs. It can be frustrating when they keep telling you that you don’t meet the criteria. Creating a digital-first bank represents an opportunity for vertical banks. And Jefa is a good example of that.

Image Credits: Jefa

On August 5th, TechCrunch wrote that startups should “go public while software valuations make no sense.” What came next was a happy coincidence. Just a few weeks after that post, Unity, JFrog, Asana, Snowflake and Sumo Logic all filed to go public.

Today we’re seeing some data from those debuts, most notably the incredibly strong pricing runs from both JFrog and Snowflake. But even more, Snowflake just opened at either $245 or $269.50, depending on your data source. Regardless, the company’s stock is currently worth $276.2 per share, some 130% higher than its IPO price. Which, as we noted earlier, was already pretty high, given the company’s most recent revenue results.

Adding to the Snowflake example, JFrog opened worth around $71.30 today, sharply higher than its above-an-already-raised-range IPO price of $44. That’s wild! JFrog is now worth around $7 billion, despite having posted revenue in its last quarter of just $36.4 million.

The message from today’s debuts appears to be that valuations are unmoored from old rules — for the moment, that is — and thus companies that can post 100% growth or greater have little in the way of a cap on their upper limit.

Our takeaway: Go public now.

Adding to the good news is that some of the valuations we’ve understood less than others are holding up. First-day pop-and-drop today’s market isn’t. For example, Lemonade is still up about 50% from its IPO price, and OneMedical is up 100% from its own. So, software valuations are so wild that even software-adjacent companies are benefiting!

This is excellent news for a great number of unicorns. The good times are still here, amazingly, while the economy is still pretty bad and the election looms. All those old rules about having successive quarters of profitability and not going public during more turbulent years is, for now, bullshit.

Normalcy will re-emerge at some point. Things will eventually quiet down. But not yet, so get that S-1 out and take advantage of the good times while they last.

More consolidation in the thin-margin food delivery space: Delivery Hero has announced it’s buying the LatinAm operations of Glovo, a Spanish on-demand delivery app. The German company said today that it’s paying up to €230 million to take over eight markets, including a €60M performance-based earn-out.

The transaction, which Berlin-based Delivery Hero said it expects to close within a few weeks, will cover all of the Latin American countries where Glovo operates — namely: Argentina, Peru, Ecuador, Panama, Costa Rica, Honduras, Guatemala and the Dominican Republic.

Glovo had already pulled out of two LatAm markets at the start of this year, saying then that it was focused on markets where it could grow and establish itself among the top two delivery players. It exited the Middle East at the same time.

Offloading its LatAm operations to Delivery Hero now will leave it with 14 markets — and a fuller focus on Southern and Eastern Europe.

The move isn’t a huge surprise, given ongoing questions over profitability in the thin-margin delivery space.

Last December Glovo told us it was focused on trying to reach profitability “in a little over a year’s time”. That essentially means winning the race with competitors to be the dominant platform where you’re operating, and only operating in cities where the unit economics stack up, so — ideally — where you can nudge users to make high volumes of repeat orders.

Still, in December 2019 Glovo’s co-founder also told us it was expecting its LatAm business to be operationally profitable this year. But perhaps challenges related to the coronavirus pandemic have pushed it to narrow its focus.

There are also SoftBank’s billions to contend with. The Japanese tech investor has a $2BN fund aimed at Central and South American — as well as making multiple investments in on-demand delivery startup which have been duking it out for share in the region. The cost of competing in the region was likely rising and that wouldn’t help Glovo’s push for profitability.

Commenting on the sale in a statement, Glovo CEO, Oscar Pierre, said: “We feel that it’s important to focus on key markets where we can build a long-term sustainable business and continue to provide our unique multi-category offering to our customers.”

“This deal will allow us to strengthen our presence in those markets where we are already very strong, while also allowing us to invest in new markets where we see huge growth potential and opportunity. We truly believe that Delivery Hero is the best possible partner to take the business we’ve built in Latin America to the next level. They have everything it takes to go on and become the leading player in the region,” he added.

The sale means Delivery Hero will add five new markets to its LatAm footprint, as well as removing a competitor in three markets where the two have been directly competing (Argentina, Panama and the Dominican Republic).

In these three overlapping markets it will take over Glovo’s businesses directly, on the closing of the transaction. Glovo will continue to operate the other businesses until March 2021, they added.

The transaction is also subject to fulfilment of certain conditions and relevant regulatory approvals.

In a statement Niklas Östberg, CEO and co-founder of Delivery Hero, said LatAm offers “exceptional growth potential” for his veteran food delivery business — which only two years ago sold its operations in its home market of Germany to another rival, Takeaway.com. (So, yes, the food delivery space really is a sizzling stir-fry of deals as players jockey for position and — they hope — profitability…)

“Latin America is a region with exceptional growth potential for online delivery. Acquiring Glovo’s local operations gives us the opportunity to double down on our efforts to drive innovation, continuously improve customer experience and support local vendors in the region. We have been working closely with Glovo for many years, and are proud to incorporate their Latin American services into our global network,” Östberg said.

Back in August Delivery Hero also went shopping on the grocery delivery front picking up Dubai-based InstaShop. Grocery delivery has risen up the agenda during the coronavirus crisis, as food delivery app users have found themselves with more time at home than usual.

Glovo also bills itself as ‘more than food delivery’ — with a button in the app where users can request delivery of ‘anything’ (or at least anything one of its couriers can manage on a bike or moped to them).

Rebecca Buckman Contributor Share on Twitter Rebecca Buckman is the vice president of marketing and communications at Battery Ventures in Menlo Park, CA. She previously was an editor and writer with The Wall Street Journal and Forbes. More posts by this contributor

• Storytelling for B2B startups: Avoiding ‘buzzword bingo’ to make your wonky enterprise company worth talking about

There’s definitely a lot of talk about SPACs these days. But the tried-and-true IPO is still the long-term liquidity goal for most tech startups. CEOs dream of ringing the bell on the floor of the New York Stock Exchange, or seeing their face splashed across Nasdaq’s giant video screen in Times Square. Late last month, five high-profile tech companies filed on the same day to go public through traditional IPOs, presumably gunning to get out before the November election.

There is obviously a ton of operational, financial and regulatory preparation that goes into a successful initial public offering. But one aspect of IPO planning that often gets short shrift, particularly at B2B-focused companies chasing relatively niche buyer audiences, is branding and communications. As the head of marketing and communications for a big investment firm, I see this all the time. I believe companies who skimp here are throwing away significant equity value.

Simply put, a highly public financing event like an IPO is an enormous branding opportunity for most companies. It’s a free pass for companies to tell their stories to a huge, global audience and rack up high-level press coverage — both at the time of the IPO and in the future, since many publications (like my former employer, the Wall Street Journal) often focus on coverage of larger, publicly traded companies.

Why do so many companies fall down in this area? I think a lot of it has to do with the broader shift toward data-driven, online marketing and away from branding at many companies. Because highly technical companies in areas like hybrid-cloud computing or DevSecOps (yes, that’s a thing) often struggle in their early days to get journalists interested in their stories, they never make communications a priority inside the company. This comes back to haunt them when, all of the sudden, they’ve filed an S-1 and their exec team has zero experience explaining the company’s story in clear, persuasive terms to a general audience.

But smart companies can avoid this trap. Here are five ways you can get the most branding bang out of your tech IPO, no matter how arcane your company’s business is.

Don’t procrastinate

This is honestly the most important point to take away here. Successful PR and communications around an IPO are a result of long-term planning that starts at least 12 to 18 months before you file your offering document with the SEC. Once you think an IPO is in the offing, take a hard look at both your (1) marketing/communications staffing and (2) your existing digital footprint.

Students — both high school and college — if you have a burning passion for mobility tech, take advantage of our discount passes and join thousands of mobility professionals around the world for TC Sessions: Mobility 2020 on October 6-7.

Buy a student pass for just $50 (before prices go up), and you’ll save up to $145 over the regular admission price.

You’ll have full access to all the interviews, demos and breakout sessions. We’re talking the top talent in mobility today, the folks who are making it happen now, envisioning the future and investing in the entrepreneurs determined to build it.

Do electric cars get your motor running? Don’t miss our conversation with Klaus Zellmer, CEO of Porsche North America. We’ll cover the electrification of Porsche and much more. Engineering students take note: Porsche Digital maintains tech hubs in both Silicon Valley and Atlanta — a great way to attract engineering talent.

Electric scooters are burning up the track, and Formula E driver Lucas Di Grassi will join us to talk about electrification, high-speed electric scooters, micromobility and a new kind of motorsport.

Those are but two examples of the speakers, one-on-one interviews, panels discussions and interactive breakout sessions you’ll enjoy. Check out the Mobility 2020 agenda for all the good stuff.

Savvy students looking for internships or employment should take full advantage of CrunchMatch, our AI-enhanced networking platform. It makes finding, connecting and networking with like-minded Mobility 2020 attendees around the world easier and faster. Schedule 1:1 meetings to meet founders, pitch investors, impress potential employers or demonstrate your areas of expertise.

When you register for Mobility 2020, simply answer a few quick questions about your business preferences and you’ll be automatically registered for CrunchMatch — and you’ll receive an email telling you how and when to access the platform.

Don’t miss the top five finalists who survive the Pitch Night (applications are now closed) as they take the main stage to pitch and demo their products in front of thousands of TechCrunch viewers including press, industry leaders and VCs.

TC Sessions: Mobility 2020 takes place October 6-7. Buy your discounted student ticket today and connect, engage and network with mobility’s top names, movers and shakers. Get ready to shift your career into overdrive.

Is your company interested in sponsoring or exhibiting at TC Sessions: Mobility 2020? Contact our sponsorship sales team by filling out this form.

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On the heels of two IPOs pricing above raised ranges, Unity boosted the value of its own impending debut this morning. The well-known unicorn is currently set to begin trading this Friday, pricing after the bell Thursday.

If that happens, the gaming platform company expects to be worth between $44 and $48 per share, up from its preceding $34 to $42 per-share IPO price range that it initially set.

Unity raising its price range for its IPO is not a surprise, given that software companies have been on a strong run lately. Just last night developer-focused software concern JFrog and data-focused cloud operation Snowflake each priced their public debuts above raised price intervals.

Unity’s IPO numbers look pretty … unreal?

There’s plenty of demand for growth-oriented software equities on today’s public markets. And Unity has what investors are generally looking for inside that sector: greater than 40% revenue growth, gross margins in the high-70s to low-80s, and falling losses in both percent-of-revenue and gross dollar terms.

At $48 per share, Unity would sell $1.20 billion in stock, and be valued at around $12.6 billion. Given its most recent quarter’s revenue ($184.3 million) and annualized run-rate ($737.4 million), Unity is valued at around 17.1x revenues. (You can make that multiple larger by using a trailing revenue metric instead of an annualized run-rate statistic, or lower it by using a forward revenue estimate.)

We’ll have a better feel for how hot the public markets are later today when Snowflake and JFrog start, but Unity’s upward pricing bodes well for all three firms. Unity investors are set to do well, regardless of its final price. The company last raised $125 million in mid-2019 at a valuation of around $6.0 billion. Earlier shareholders will do even better in the transaction.

Sumo Logic is also expected to debut this week. More on that IPO here, if you are so inclined.

Bear and bull cases for Unity’s IPO

After raising their IPO price ranges, both JFrog and Snowflake priced above their refreshed intervals last night. At their final IPO prices, the two debuts are aggressively valued, showing continued optimism amongst public investors that cloud shares are an attractive bet, even if their growth is financed through a history of steep losses, as in the case of Snowflake .

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

The JFrog IPO pricing is notable because it shows how much public investors are willing to pay for 50% growth and recent profits from a SaaS company. Snowflake’s pricing is noteworthy for showing the value of huge growth and improving economics.

This morning we’ll explore the two companies’ final values, compare those results to their initial IPO price ranges and calculate their current revenue multiples based on last quarter’s annual run rates. This is going to be fun.

Later today we’ll have updates on how they open to trade. For now, let’s get into the math and valuation nuance you and I both need to understand just where the public market is today as so many unicorns are either en route toward an IPO, or are standing just outside the pool with a single hoof dipped to check the temperature.

Price this, you filthy animal

JFrog priced its IPO at $44 per share, above its raised range of $39 to $41 per share and comically higher than its first price interval of $33 to $37 per share. Indeed, the company’s final IPO price was 33.3% higher than the low end of its first proposed pricing range.

Though I doubt anyone expected the company to go for so little as $33 per share, JFrog’s pricing run shows strong demand even before it began to float.

Pure Storage, the public enterprise data storage company, today announced that it has acquired Portworx, a well-funded startup that provides a cloud-native storage and data-management platform based on Kubernetes, for $370 million in cash. This marks Pure Storage’s largest acquisition to date and shows how important this market for multicloud data services has become.

Current Portworx enterprise customers include the likes of Carrefour, Comcast, GE Digital, Kroger, Lufthansa, and T-Mobile. At the core of the service is its ability to help users migrate their data and create backups. It creates a storage layer that allows developers to then access that data, no matter where it resides.

Pure Storage will use Portworx’s technology to expand its hybrid and multicloud services and provide Kubernetes -based data services across clouds.

Image Credits: Portworx

“I’m tremendously proud of what we’ve built at Portworx: An unparalleled data services platform for customers running mission-critical applications in hybrid and multicloud environments,” said Portworx CEO Murli Thirumale. “The traction and growth we see in our business daily shows that containers and Kubernetes are fundamental to the next-generation application architecture and thus competitiveness. We are excited for the accelerated growth and customer impact we will be able to achieve as a part of Pure.”

When the company raised its Series C round last year, Thirumale told me that Portworx had expanded its customer base by over 100% and its bookings increased by 376 from 2018 to 2019.

“As forward-thinking enterprises adopt cloud-native strategies to advance their business, we are thrilled to have the Portworx team and their groundbreaking technology joining us at Pure to expand our success in delivering multicloud data services for Kubernetes,” said Charles Giancarlo, chairman and CEO of Pure Storage. “This acquisition marks a significant milestone in expanding our Modern Data Experience to cover traditional and cloud native applications alike.”

Portworx raises $27M Series C for its cloud-native data management platform

E-bike startup VanMoof has raised a $40 million investment from Norwest Venture Partners, Felix Capital and Balderton Capital. The Series B financing comes after a $13.5 million investment in May. The funding brings VanMoof’s total raised to $73 million and furthers the e-bike brand’s ultimate mission of getting the next billion on bikes.

The Series B funding will be used to meet the increased demand, shorten delivery times and build a suite of rider service solutions. It also aims to boost its share of the e-bike market in North America, Europe and Japan.

Partly driven by the switch of commuters away from public transport because of the COVID-19 pandemic, the e-bike craze is taking off.

Governments are now investing in cycling infrastructure and the e-bike market is set to surpass $46 billion in the next six years, according to reports.

Ties Carlier, co-founder of VanMoof, commented: “E-bike adoption was an inevitable global shift that was already taking place for many years now but COVID-19 put an absolute turbo on it to the point that we’re approaching a critical mass to transform cities for the better.”

VanMoof says it realized a 220% global revenue growth during the worldwide lockdown and sold more bikes in the first four months of 2020 than the previous two years combined.

Stew Campbell, principal at Norwest said: “Taco, Ties and the VanMoof team have not only built an unparalleled brand and best-selling product, but they’re reshaping city mobility all over the world.”

Colin Hanna, principal at Balderton: “As the COVID-19 crisis hit supply chains worldwide, VanMoof’s unique control over design and production was a key advantage that allowed the company to react nimbly and effectively. Moreover, VanMoof’s direct to consumer approach allows the company to build a close relationship to their riders, one that will be strengthened by new products and services in the years to come.”

VanMoof launched the new VanMoof S3 and X3 in April of this year. I reviewed the S3 here and checked out the earlier X2 version here.

There are some changes at the helm of Blade, the French startup behind Shadow. Mike Fischer is going to work for the company and become chief executive officer. Jean-Baptiste Kempf is joining the company as chief technology officer.

Shadow is a cloud computing service for gamers. For a monthly subscription fee, you can access a gaming PC in a data center near you. Compared to other cloud gaming services, such as GeForce Now or Google’s Stadia, Shadow provides a full Windows 10 instance. You can install anything you want — Steam, Photoshop or Word.

The company has been growing rapidly over the past few years and raised more than $100 million in total. Last year, the company announced ambitious plans, with a wide-ranging partnership with OVHcloud and high-end configurations.

At the same time, co-founder Emmanuel Freund stepped aside as CEO, with Jérôme Arnaud taking over. There have been multiple delays with the new product offering and the company is no longer working with OVHcloud. Freund left the company in April and, as INpact Hardware reported in July, Arnaud has been on the way out for a couple of months.

All of this leads us to today’s announcement. Mike Fischer, the company’s new CEO, has been quite active in the video game industry. In the past, he has worked at Sega, Bandai Namco, Microsoft and Epic Games. He was the president and CEO of Square Enix between 2010 and 2013.

Jean-Baptiste Kempf is a well-known figure in the open-source community. For the past 14 years, he has been the president of VideoLAN, the organization behind popular media player VLC. VideoLAN has also contributed to widely used video encoding technologies. He also founded VideoLabs, a company that works on VLC-related integrations and support.

The company is still working on rolling out the new Ultra and Infinite configurations to European users who pre-ordered. It originally planned to start rolling out new tiers in the U.S. starting this summer but the company now says it expects to launch these new tiers by the end of the year.

For customers in the U.S., there are no pre-orders, there will simply be a button to upgrade in your account when it’s available. LG invested in the company earlier this year and the service will go live in South Korea later this year, as well.

Outfunnel, a startup that has built software to help companies “bridge the gap between marketing and sales functions,” has quietly raised €1.1 million in funding.

The pre-seed round was led by Paua Ventures and byFounders, with participation from Lemonade Stand, Omnisend and various angel investors. The latter includes Bolt co-founders Markus and Martin Villig, Matterport CMO Robin Daniels, Pipedrive co-founder Ragnar Sass and long-time Skype exec Sten Tamkivi, amongst others.

Formed in 2017, Outfunnel’s founders are marketing veteran Andrus Purde (previously of Skype and Pipedrive), Andris Reinman (creator of open-source email projects like Nodemailer and WildDuck) and Markus Leming. The startup has developed what it dubs a “revenue marketing automation tool” that is designed to enable sales and marketing functions to work together to drive revenue.

“SMBs still struggle to unite sales and marketing data,” Purde tells me. “Money and time is wasted setting up workflows, connecting databases with digital duct tape and manually pulling reports… This [also] means that everyone misses opportunities, as well as revenue goals.”

Furthermore, salespeople have no context for sales conversations and don’t know which leads are ready to buy, and leadership doesn’t easily have “big picture” visibility into the effectiveness of campaigns. “Last but not least, all of us receive lots of ‘spam’ instead of relevant messages,” he says.

To solve this, Outfunnel’s secret sauce sees it integrate deeply with CRMs (currently Pipedrive, Copper and HubSpot CRM, with more to follow) coupled with various features such as automated emails in sync with CRM data, reporting and precise targeting. The startup has already won over more than 400 paying customers, with North America being its biggest market, followed by larger European countries and Australia.

“Our typical customer is a small to medium-sized business that needs both sales and marketing and where sales cycles are longer, not transactional,” adds Purde. “That’s roughly 25% of all SMBs according to our estimations e.g. businesses selling professional services, consulting, real estate, healthcare… That said, we have some better-known scale-ups as customers, too, such as Bolt.”

Zwift, a 350-person, Long Beach, California-based online fitness platform that immerses cyclists and runners in 3D-generated worlds, just raised a hefty $450 million in funding led by the investment firm KKR in exchange for a minority stake in its business.

Permira and Specialized Bicycle’s venture capital fund, Zone 5 Ventures, also joined the round, alongside earlier backers Highland Europe, Novator, Causeway Media and True, which is a Europe-based consumer specialist firm.

Zwift has now raised $620 million altogether and is valued at north of $1 billion.

Why such a big round? Right now, the company just makes an app, albeit a popular one.

Since its 2015 founding, 2.5 million people have signed up to enter a world that, as Outside magazine once described it, is “part social-media platform, part personal trainer, part computer game.” That particular combination makes Zwift’s app appealing to both recreational riders and pros looking to train no matter the conditions outside.

The company declined to share its active subscriber numbers with us — Zwift charges $15 per month for its service — but it seemingly has a loyal base of users. For example, 117,000 of them competed in a virtual version of the Tour de France that Zwift hosted in July after it was chosen by the official race organizer of the real tour as its partner on the event.

Which leads us back to this giant round and what it will be used for. Today, in order to use the app, Zwift’s biking adherents need to buy their own smart trainers, which can cost anywhere from $300 to $700 and are made by brands like Elite and Wahoo. Meanwhile, runners use Zwift’s app with their own treadmills.

Now, Zwift is jumping headfirst into the hardware business itself. Though a spokesman for the company said it can’t discuss any particulars — “It takes time to develop hardware properly, and COVID has placed increased pressure on production” — it is hoping to bring its first product to market “as soon as possible.”

He added that the hardware will make Zwift a “more immersive and seamless experience for users.”

Either way, the direction isn’t a surprising one for the company, and we don’t say that merely because Specialized participated in this round as a strategic backer. Co-founder and CEO Eric Min has told us in the past that the company hoped to produce its own trainers some day.

Given the runaway success of the in-home fitness company Peloton, it wouldn’t be surprising to see a treadmill follow, or even a different product entirely. Said the Zwift spokesman, “In the future, it’s possible that we could bring in other disciplines or a more gamified experience.” (It will have expert advice in this area if it does, given that Zwift just brought aboard Ilkka Paananen, the co-founder and CEO of Finnish gaming company Supercell, as an investor and board member.)

In the meantime, the company tells us not to expect the kind of classes that have proven so successful for Peloton, tempting as it may be to draw parallels.

While Zwift prides itself on users’ ability to organize group rides and runs and workouts, classes, says its spokesman, are “not in the offing.”