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Minu, a Mexico City-based, pay-on-demand startup, lands a $14M Series A

2021, March 3 - 11:00pm

Many of the startups raising capital in Mexico are focused on financial inclusion, aiming to level the playing field in a country that is largely unbanked and has a burgeoning middle class.

One such company, minu, a Mexico City-based, pay-on-demand startup, announced Wednesday that it has raised $14 million in a Series A round of funding led by FinTech Collective.

New investors VEF, XYZ Ventures and FJ Labs, as well as DocuSign founder Tom Gonser and Gusto CFO Mike Dinsdale also participated in the financing. Existing backers QED, Next Billion Ventures and Village Global also put more money in the company. 

The financing — which included $2.5 million in debt from Banco Sabadell Mexico — brings minu’s total raised since its 2019 inception to a total of $20 million. 

Co-founders Nima Pourshasb, Rafa Niell and Paolo Rizzi were driven to build out a pay-on-demand offering in Mexico.

“We really think the lack of financial health is one of the key drivers slowing the potential and productivity of Mexican society,” Pourshasb said.

Latin America’s digital transformation is making up for lost time

Minu aims to solve the employee liquidity gap between paychecks in an effort to help people see reduced financial stress and avoid expensive loans. The company offers 24×7 instant access to employees’ earned wages for a $2 fixed withdrawal fee.

Today, minu has more than 100 large enterprise clients, including TotalPlay, Telefonica, Scotiabank, OfficeMax, Rappi, Adecco, Manpower and Cap Gemini, and public sector clients such as the Electoral Institute of the State of Mexico. It saw its transaction volume and revenue grow by 18 times in 2020, albeit from a small base. The company declined to reveal hard revenue figures.

Minu operates under the premise that the liquidity gap is profound in Mexican society. An estimated 70% of workers live from paycheck to paycheck, with average wages of $550/month, noted Pourshasb. And only 37% of Mexicans over 15 years old have a bank account, according to recent World Bank stats.

Image Credits: minu

“Some people are continuously getting loans — at very high interest rates — to cover recurring expenses such as food and transport,” Pourshasb said.

Minu’s first product offers instant, 24/7 access to earned wages.

“This is money that is already earned,” Pourshasb said. “Our users have an app to see how much is available and if they need those funds, they can instantly receive them.” 

The company’s distribution model is B2B, so it works alongside large enterprises to offer access to the wages as a benefit for employees. Businesses are attracted to that model, Pourshasb explained, because they don’t have to pay for it or change their payroll process.

“We integrate with payroll so the process is automated and there’s no added work for them,” he added. “It also doesn’t affect cash flows. These are upfront funds so if someone withdraws money, it gets deducted from payroll.”

Some employers do subsidize the cost of the transaction fee for employees.

Looking ahead, minu says it will use its fresh capital to boost its headcount of 60 as well as expanding its offering to include financial education, savings, smart spend and insurance products. The company also plans to expand outside of Mexico.

Carlos Alonso Torras, who leads Latin America investing for New York-based FinTech Collective, believes that minu leverages “a strong combination of an exceptional founding team and auspicious macro trends.”

“We see the company’s current product as the basis for a platform that will offer an array of necessary financial products to a very underserved demographic,” he wrote via email. “Minu is already creating a moat vis a vis competitors via deep integrations, high client satisfaction and a broadening financial wellness offering. As the early mover in a market whose characteristics are conducive to the success of pay on demand, the immediate growth potential is remarkable, and Minu is uniquely positioned to excel.”

The investment marks the firm’s fifth in Mexico. Overall, FinTech Collective says it seeks and backs entrepreneurs “who are rewiring how money flows through the world.”

“Due to COVID, we are seeing a pandemic stricken world where hundreds of millions of people are facing greater financial instability, and we believe that fintech has a vital role to play in accelerating the emergence of a spending middle class underserved by traditional financial systems,” Torras added. 

Fintechs in Mexico have been busy. Last week, Stori raised a $32.5 million Series B round with the goal of “becoming Mexico’s leading credit card issuer for the rising middle class.”

Also in February, Flink raised $12 million in a Series A led by Silicon Valley-based venture capital firm Accel.

Current and upcoming trends in Latin America’s mobile growth

 

Categories: Business News

Oscar Health prices IPO at $39 and secures a $9.5B valuation

2021, March 3 - 10:56pm

Late last night Oscar Health, a tech-enabled medical insurance provider, priced its IPO at $39 per share. The final price came in $1 per share above its raised IPO guidance; Oscar Health had originally targeted a $32-$34 per-share IPO price.

Some 37,041,026 shares were sold at $39, including 36,391,946 offered by the company itself. Not counting shares reserved for the company’s underwriters — more on those here — Oscar Health found at least $1.44 billion worth of demand for its equity at $39 apiece. More than 98% of the funds from the aggregate share sale went to the company’s accounts.

For backers Thrive Capital, Founders Fund, Formation 8, CapitalG, Fidelity, Alphabet, Coatue, Tiger Global and others, the day is a financial coup.

Oscar Health raises IPO price as Coupang releases bullish debut valuation

But just how well did the company’s private backers do? To know that, we have to calculate what the company is worth at $39 per share. Oscar sold more shares in its debut than its final S-1/A filing expected, making its ensuing share count slightly tedious to calculate. However, the company’s simple IPO valuation appears to be just over $7.92 billion at its IPO price. IPO investing group Renaissance Capital calculates the company’s fully diluted valuation, a figure that counts some additional shares, including that have been earned through options that have yet to be exercised, for example, at $9.5 billion.

Oscar Health’s IPO has been a success from several perspectives. From a fundraising viewpoint, the company raised more than it may have initially expected to, comparing its final price point against its initial range. From a valuation perspective, the company is now worth a multiple of its last-known private valuation, some $3.2 billion set during its 2018 Series G, per PitchBook data. The company did raise more private capital between that round and its IPO, but we lack valuation figures for those deals.

The company will begin trading this morning in a notable test for insurtech, and the sub-niche of medical insurtech. TechCrunch’s prior notes on the company’s IPO valuation aside, the bidding public have repriced Oscar Health. Now let’s see what the company will manage once it truly begins to float.

Oscar Health’s initial IPO price is so high, it makes me want to swear

Categories: Business News

Identiq, a privacy-friendly fraud prevention startup, secures $47M at Series A

2021, March 3 - 10:14pm

Israeli fraud prevention startup Identiq has raised $47 million at Series A as the company eyes international growth, driven in large part by the spike in online spending during the pandemic.

The round was led by Insight Partners and Entrée Capital, with participation from Amdocs, Sony Innovation Fund by IGV, as well as existing investors Vertex Ventures Israel, Oryzn Capital and Slow Ventures.

Fraud prevention is big business, which is slated to be worth $145 billion by 2026, ballooning by eightfold in size compared to 2018. But it’s a data-hungry industry, fraught with security and privacy risks, having to rely on sharing enormous sets of consumer data in order to learn who legitimate customers are in order to weed out the fraudsters.

Identiq takes a different, more privacy-friendly approach to fraud prevention, without having to share a customer’s data with a third party.

“Before now, the only way companies could solve this problem was by exposing the data they were given by the user to a third-party data provider for validation, creating huge privacy problems,” Identiq’s chief executive Itay Levy told TechCrunch. “We solved this by allowing these companies to validate that the data they’ve been given matches the data of other companies that already know and trust the user, without sharing any sensitive information at all.”

When an Identiq customer — such as an online store — sees a new customer for the first time, the store can ask other stores in Identiq’s network if they know or trust that new customer. This peer-to-peer network uses cryptography to help online stores anonymously vet new customers to help weed out bad actors, like fraudsters and scammers, without needing to collect private user data.

So far, the company says it already counts Fortune 500 companies as customers.

Identiq said it plans to use the $47 million raise to hire and grow the company’s workforce, and aims to scale up its support for its international customers.

Apple Card will make credit card fraud a lot more difficult

Categories: Business News

Dooly closes on $20M for AI-based tools to help salespeople with their busywork

2021, March 3 - 8:03pm

Robotic process automation has taken the enterprise world by storm by providing a set of tools for those doing repetitive, volume-based tasks to use software to remove some of that labor to let those people focus on more complicated tasks. Today a startup that’s taken some of that ethos and is applying it to more individualized work — that of salespeople — is announcing some funding.

Dooly, a Vancouver, Canada-based startup that has built a set of AI-based tools that automate the busywork that goes into updating data in their sales software, and namely Salesforce, has picked up $20 million in funding to build out its business, which to date has picked up a number of customers among the sales teams of enterprise-focused software companies. They include Airtable, Asana, Intercom, Contentful, Vidyard, BigCommerce, Liftoff and CrowdRiff.

Its aim is to make sales software more useful for salespeople by eliminating the work that goes into inputting data into those systems.

“Really they’ve just created a mountain of virtual filing cabinets,” Kris Hartvigsen, Dooly’s founder and CEO, said in an emailed interview with me. “Filing cabinets just wait for drawers to be opened — or in the case of enterprise software, reports to be pulled and data to be input. We know people are capturing information across the business and our job is to make sure that the people and systems across the business have a better, faster, more far-reaching way of staying informed.”

The funding is being announced today, but it was actually raised in two tranches that had not previously been disclosed. A $3.3 million seed round was led by Boldstart Ventures and also included BoxGroup. Its $17 million Series A, meanwhile, was led by Addition, with Boldstart and BoxGroup again participating, along with Battery Ventures, Mantis (representing musicians The Chainsmokers) and SV Angel.

Alongside the VCs, there are a number of interesting strategic individual investors, too. Daniel Dines and Brandon Deer of UiPath (the RPA connection clearly is not one that I’m imagining!); Allison Pickens, the ex-COO of Gainsight; Zander Lurie of SurveyMonkey); Jay Simons, ex-CEO of Atlassian); Harry Stebbings; and other unnamed investors are all also involved. Ed Sim of Boldstart is joining Dooly’s board of directors with this announcement.

EasySend raises $16M from Intel, more for its no-code approach to automating B2C interfaces

The challenge that Dooly has been built to solve is that while there are a lot of tools out there now to help salespeople source leads, manage the progress of their sales, give them advice and other helpful material to supplement their charm and the basic strength of a product, manage customers once they’ve signed on, and so on, all of them still require something important to work: a time commitment from salespeople to keep them updated with information. Ironically, the more tools to help them that are built, the more time salespeople need to spend feeding them data.

Even more ironically, one of the big daddies of the problem — the somewhat overweight Salesforce — has published figures (cited by Dooly) that say salespeople spend just 34% of their time selling. The rest (minus trips to get coffee to stay caffeinated) seems to be about data entry.

The idea with Dooly is that you turn it on, connect it to what you are using — starting with Salesforce — and Dooly lets you make notes which it then organises and puts into the right places in the rest of your apps.

“When a salesperson starts using Dooly, the ‘aha moment’ is pretty immediate,” Hartvigsen said. “Whether they want to do quick pipeline edits or push their notes to Salesforce, we don’t ask the user to learn any new patterns they aren’t familiar with, we just automate a bunch of things they hate doing, often comparing those traditional chores to clerical work.” For example, he notes, when they sync a note, Dooly automatically updates any Salesforce with any contacts found in the meeting, updates fields, adds to-dos, logs activities, and pushes messages to the appropriate internal stakeholders on Slack, all in the same motion.

The product currently also integrates with Slack, G-Cal and G-Drive, because, Hartvigsen said, “we see this as an area where there is the most immediate friction and an area that was in need of disruption.” He added that the plan is to add more integrations over time. “We see need to expand the solutions that anchor to our connected workspace, with our near-term focus being the systems that touch revenue teams,” he said.

The design of Dooly seems to be about investing a little in order to save more. On average people are using Dooly between 2.5 and 5 hours each day, but Hartvigsen claims that right now the system helps people make up for more hours each week in lost productivity. Its pricing starts at $25 per user per month, going up depending on features and use.

There are quite literally thousands of products out in the market today, and among them hundreds of strong ones, being built to help salespeople with different aspects of getting their jobs done. I’ve written about quite a few of them, and I’ve actually asked companies about whether they are tackling the very issue that Dooly has identified and is trying to fix.

Robotic process automation platform UiPath raises $750M at $35B valuation

They weren’t, but that doesn’t mean that they won’t. Chief among them are companies like UiPath and Salesforce, which sit on different sides of this problem and could well move into it as they keep growing. (Having UiPath as a backer by way of its founder and a senior executive points to a relationship there, which is interesting.)

In the meantime, there have been some other interesting innovations using AI to improve the sales process, with companies like Pipedrive, Clari, Seismic, Chorus.ai and Gong all using natural language, machine learning and big data analytics (itself helped by AI) to improve how sales get done.

“The first thing we noticed when we met the Dooly team was the thoughtful design-first approach to product that engendered tons of customer love. This love was inherent not only on popular ratings sites like G2 Crowd but also in the individual usage and viral adoption throughout companies with only one initial user,” said Ed Sim, founder and managing partner at Boldstart Ventures in a statement. “Dooly is revolutionizing the note-taking experience for customer facing end users from sales to customer success to product.”

“Dooly is relentlessly focused on building a user-first experience for its customers to seamlessly create workflows and unlock new revenue opportunities,” said Lee Fixel, founder of Addition, added. “We are thrilled to support Dooly as it continues to scale and enhance the sales function for more businesses.”

Categories: Business News

Flextock is a YC-backed e-commerce fulfillment provider for Africa and the Middle East

2021, March 3 - 6:58pm

When merchants launch their e-commerce businesses, they can easily manage the end-to-end operations in the early stages. But as they begin to grow, managing their own operations, from warehousing and logistics to delivery and cash collection, can become difficult. This can prevent them from scaling effectively despite having a steady inflow of demand.

Now, there’s a need to offload some of this workload. This is where e-commerce fulfillment services come in handy.

Today, Flextock, one such company providing this service to businesses and consumers in Egypt, is announcing that it is part of Y Combinator’s Winter 2021 batch. Founded by Mohamed Mossaad and Enas Siam in September 2020, the Egyptian company launched in stealth this January.

According to COO Siam, the founders noticed that as e-commerce activities in the Middle East and North African regions accelerated due to the pandemic, merchants were left overwhelmed with the volume of orders they received.

“We saw it as an opportunity to build a tech-enabled platform to be able to help anyone that wanted to grow their own independent brand or store,” she told TechCrunch. “We wanted them to focus on their products and marketing while leaving the supply chain and logistics bit to us, which we do through our end-to-end proprietary software.”

Mossaad, the company’s CEO, describes Flextock as a tech-enabled fulfillment provider. When merchants sign up to the platform, they send their products to one of the company’s fulfillment centers. Flextock takes the whole catalog and tags the products for tracking purposes. Then, integration is made between Flextock and any online store they use, be it Shopify, WooCommerce, Wix and Odoo, among others. 

As orders are made, Flextock packages and ships the products from the fulfillment center to the customers. Flextock doesn’t own any delivery vehicles, so to achieve this, the company partners with existing logistics companies in Egypt. This model has helped the startup to create a marketplace for different last-mile delivery companies in the country.

Image Credits: Flextock

There’s also a dashboard for these merchants to track each order, get more visibility into their shipping process and know how well their products sell.

Flextock makes money on a per-order basis. That means the merchants on the platform pay a flat fee that changes with respect to the volume of products moved.

Mossaad says that since the company beta launched in January with more than 20 businesses, it has been growing 50% week-on-week across 28 cities in the country.

According to the CEO, Flextock is the first end-to-end fulfillment service in Egypt. And in a market that will likely see more competition in the next couple of years, Mossaad thinks Flextock has the opportunity to become the market leader.

Behind this rationale is that the six-month-old startup is backed by Y Combinator and has also raised $850,000 which is just the first part of its multi-million-dollar pre-seed round that will close sometime this year.

“We were able to very quickly get the acceptance of YC given the size of the opportunity we are focused on. We believe that commerce is expected to change in the Middle East and Africa, and Flextock is going to be at the forefront of powering this next generation of commerce,” he said.

The founders combine a wealth of corporate experience and a strong track record of scaling tech startups in the MENA region.

L-R: Mohamed Mossaad (CEO) and Enas Siam (COO)

Siam started her career managing supply operations at Nestle across the Middle East and North Africa. Later, she became the General Manager of Careem Bus, a mass-transit service and Uber subsidiary, where she helped build the product from scratch and grew it to 150,000 monthly rides in a year.

Mossaad, on the other hand, has worked on multiple turnarounds across different African countries during his time at Bain & Company. He joined Egyptian online food delivery platform, Elmenus, as Chief Strategy Officer. He helped scale the company’s revenues 5x in less than a year and was instrumental to its $8 million Series B round.

The CEO says Flextock has its sights on other African and Middle Eastern markets — specifically Saudi Arabia — and the plan is to provide its services to over 1 million businesses in these regions over the next decade.

“We are on a mission to enable more than 1 million merchants in Africa and the Middle East to sell online without carrying out the hassle of running their own operations. We are well-positioned to do that, and hopefully, we will be able to achieve that in a record time.”

Categories: Business News

‘Flying taxi’ startup Volocopter picks up another $241M, says service is now two years out

2021, March 3 - 4:20pm

In a year where mass transit on airplanes, trains and buses has had lower traveler numbers in the wake of the COVID-19 pandemic, one of the startups hoping to pioneer a totally new approach to getting individuals from A to B — flying taxis — has raised some significant funding.

Volocopter, a startup out of southern Germany (Bruchsal, specifically) that has been building and testing electric VTOL (vertical take-off and landing) aircraft, has picked up €200 million (about $241 million) in a Series D round of funding. Alongside its aircraft, Volocopter has also been building a business case in which its vessels will be used in a taxi-style fleet in urban areas. CEO Florian Reuter tells us that live services are now two years out for the two vehicle models it has been developing.

“We are actually expecting to certify our VoloCity in around two years and start commercial air taxi operations right after,” he said. “Paris and Singapore are in pole position [as the first cities], where Paris wants to have electric air taxis established for the 2024 Olympics. With our VoloDrone we expect first commercial flights even earlier than with our VoloCity.”

To date, Volocopter has shown off its craft in flights in Helsinki, Stuttgart, Dubai and over Singapore’s Marina Bay. In addition to Europe and Asia, it also wants to launch services in the U.S.

For some context, this is basically on track with what the company had previously projected: in 2019 — when Volocopter raised an initial $55 million in funding for its Series C (finally closed out at €87 million, around $94 million) — the company said it was three years away from service.

Volocopter raises $55M led by Volvo owner Geely, sets 3-year timeline for its flying taxi service

This latest (oversubscribed) Series D includes new investments from a mix of financial and strategic backers. Funds managed by BlackRock; global infrastructure company Atlantia SpA.; Avala Capital; automotive parts behemoth Continental AG; Japan’s NTT via its venture capital arm; Tokyo Century, a Japanese leasing company; and multiple family offices, among others. Volocopter also said that all of its existing investors — that list includes Geely, Daimler, DB Schenker, Intel Capital, btov Partners, Team Europe and Klocke Holding and more — also contributed to the round.

If that sounds like a big list, it’s somewhat intentional, as the task of what Volocopter is attempting is complex and requires a wide ecosystem of other players, said Rene Griemens, the company’s CFO.

“Getting urban air mobility off the ground requires a full ecosystem that we are developing right now. Many of our strategic partners will support us on different aspects of the supply chain, scaling components, entering markets, improving operations amongst others. Most of them know certain aspects of our business model really well (e.g. Japan Airlines for aviation, Atlantia for infrastructure),” he said. “Their investment is a reflection of their excitement about Volocopter as a leader in building the entire ecosystem of UAM, thereby giving credibility and comfort for purely financial investors.”

He added that many of these companies have a very “hands-on partnership” with Volocopter. “DB Schenker, for example, is rolling out leading-edge heavily-load electric logistics drones together with us around the globe.”

The company has now raised nearly $390 million. We’re asking for an updated valuation, but for some context, PitchBook data estimates its valuation now at $624 million.

Moonshots and sunsets

Founded in 2011, Volocopter has now been working on its idea — distinctive for its very wide circular design that sits where the rotor on a helicopter would be — for a whole decade, and in many regards it’s the classic idea of a moonshot in action.

It has yet to make any money, and the product that it’s building to do so is very groundbreaking — flying into completely unchartered territory, so to speak — and therefore ultimately untested.

It’s not the only one working on “flying taxi” concepts — there are other very well-capitalised companies like Lilum, Joby Aviation, Kitty Hawk and eHang.

Lilium adds $35M from Baillie Gifford at a $1B+ valuation for its electric aircraft taxi service

However, all of these have faced various hurdles ranging from investor lawsuits to bankruptcies, accidents, mothballed projects and divestments (perhaps most notably, Joby scooped up Elevate last year as Uber stepped away from costly moonshots).

And most importantly, none of them are flying commercially yet. With Volocopter (as with the others), investors have taken a long-term bet here on a concept and a team it believes can deliver.

For now, the company says that technology is no longer the barrier, and neither it seems are regulators, who are, in the pandemic, more focused on considering new approaches to old problems to improve efficiency and acknowledge that we might have to do things a little differently from now on, in the wake of new demands from public health, and the public.

In the case of VTOL craft, the promise has always been that they could bypass a lot of the issues with street congestion in urban areas, and provide a more environmental alternative to gas-guzzling, present-day transportation modes.

The challenge, on the other hand, has been determining the safety both of completely new devices, and also of the traffic and other systems that they would operate under. With the idea being that ultimately these craft would be autonomous, that adds another complex twist.

Interestingly, regulators in different markets that might have been more skeptical of new concepts seem to be more open to considering them differently now with the pandemic at hand. This has played out in other arenas, too, such as the electric scooter market in the U.K., which saw a bump in activity after regulators long skeptical gave them a provisional nod last year, citing the need for more individualized transportation options in a pandemic-hit country.

Volocopter’s model is based around transporting one person or small parties, so in a sense might be attractive here too.

Uber sells air taxi business Elevate to Joby Aviation, shedding its last moonshot

“There aren’t any major hurdles anymore in terms of the technology as such,” said Reuter. “It is now all about execution. EASA has defined what is necessary to get electric air taxis certified to the highest safety level in aviation. We have the best technology in the market to certify to EASA’s high safety standards and will keep our heads down to finalize the few remaining steps to certification.”

In contrast, he said the other challenges that remain are those of any highly technical startup: “Our largest challenge right now is talent acquisition,” he said. “We are looking for the best talents worldwide and growing our team quickly now, so that we can accelerate on the technical and market development sides. Especially in the markets where we will open early routes, such as Paris, Singapore, China and Japan, we are going full speed in preparing everything necessary from digital infrastructure to landing sites, city approvals and more.”

Categories: Business News

Indonesian supply chain startup Advotics raises $2.75M led by East Ventures

2021, March 3 - 2:54pm

The rapid growth of e-commerce in Indonesia, especially during the pandemic, is placing increasing demands on its supply chain infrastructure. But the country’s logistics industry is highly fragmented, with companies usually relying on multiple distributors for one shipment, and many warehouses are still concentrated around major cities. Advotics wants to help with software to make the whole supply chain easier to track, and recently closed a $2.75 million funding round led by East Ventures.

Founded in 2016 by Boris Sanjaya, Hendi Chandi and Jeffry Tani, Advotics has now raised a total of $5.5 million and currently counts more than 70 clients, ranging from individual resellers to large corporations like Exxonmobil, Danone, Reckitt Benckiser, Sampoerna, Kalbe and Mulia Group.

According to research institution Statistics Indonesia, there are about 5 million small and medium-sized manufacturers in Indonesia. They use a supply chain with 15 million small to mid-sized distributors and about 288,000 large distribution companies. This fragmentation means higher expenses, with Report Linker estimating that logistics costs range between 25% to 30% of Indonesia’s gross domestic product.

How tech can build more resilient supply chains

To help make logistics more efficient for its clients, Advotics offers SaaS solutions to monitor almost their entire supply and logistics chain, from warehouse inventory to generating delivery routes for drivers. It includes a product digitalization feature that uses QR codes to track products and prevent counterfeiting, and tools for salespeople visiting retail stores, since that is still one of the most effective tools for manufacturers and importers to find customers.

The company’s new funding will be used to launch a online-to-offline system for SMEs and grow its sales team. The online-to-offline system will allow sellers to integrate inventory and sales from all of their channels, including brick-and-mortar, business-to-business and e-commerce.

Advotics is among several tech startups that are taking different approaches to tackle Indonesia’s logistics infrastructure. For example, Shipper wants to give sellers access to “Amazon-level logistics,” while Logisly is focused on digitizing truck shipments. Waresix recently acquired Trukita to connect businesses to shippers and truck shipment platform Kargo’s backers include Uber co-founder Travis Kalanick.

Indonesia’s Kargo comes out of stealth with $7.6M from Travis Kalanick, Sequoia and others

Waresix acquires Trukita to connect more of Indonesia’s fragmented logistics chain

Categories: Business News

Sequoia Capital India’s Surge invests $2M in sales engagement platform Outplay

2021, March 3 - 10:00am

Outplay’s team members on a video call

Sales engagement platforms (SEP) help sales teams automate and track the large number of tasks they need to do each day as they contact leads and home in on potential deals. Focused on small-to-medium-sized companies, SEP startup Outplay announced today it has raised $2 million from Sequoia Capital India’s Surge program for early-stage startups.

Outplay was founded in January 2020 by brothers Ram and Laxman Papineni and now counts more than 300 clients. Before launching Outplay, the Papineni brothers built AppVirality, a referral marketing tool for app developers.

Laxman told TechCrunch that Outplay’s customers come from sectors like IT, computer software, marketing and advertising and recruiting, and most are based in North America and Europe.

Outplay is designed for teams that use multiple channels to reach potential customers, including phone calls, text messages, email, live chats on websites and social media platforms like LinkedIn or Twitter. It integrates with customer relationship management platforms like Salesforce and Pipedrive, giving sales people a new interface that includes productivity and automation tools to cut the time they spend on administrative tasks.

Outplay’s platform

For example, Outplay can be used to create sequences that send initial messages through different platforms, and then automatically follows up with new messages if there isn’t a reply within a pre-set time frame. Outplay also provides analytics to help sales people track how well sales campaigns are working.

Two of Outplay’s biggest competitors are Outreach and SalesLoft, both of which hit unicorn status in recent funding rounds. Laxman said Outplay is focused on ease of use, with other differentiators including more integrations with CRMs and other software, and a strong customer support team.

Outreach nabs $50M at a $1.33B valuation for software that helps with sales engagement

Atlanta’s SalesLoft raises $100M for its digital sales platform, now valued at $1.1B

Categories: Business News

Facebook can save itself by becoming a B Corporation

2021, March 3 - 8:39am
Ann Florini Contributor Ann Florini is Clinical Professor at Thunderbird School of Global Management at the Arizona State University. Brett Hurt Contributor Share on Twitter Brett Hurt is CEO and co-founder of Data.World.

As Facebook confronts outrage among its employees and the public for mishandling multiple decisions about its role in shaping public discourse, it is becoming clear that it cannot solve its conundrums without a major change in its business model. And a new model is readily available: for-benefit status.

For decades, a misguided ideology has warped companies, economies and societies: that the sole purpose of corporations is to maximize short-term returns to one set of stakeholders — those who have bought shares. Neither law nor history requires this to be true.

But shareholder value-maximization ideology has become cemented in far too much corporate practice at the expense of societal well-being. This is manifested in many ways: a slavish adherence to the judgment of the “market,” even when other social signals are more powerful; executives enriched by stock options; companies fearful of “activist investors” who attack whenever stock prices fail to meet quarterly “expectations” and often-frivolous shareholder lawsuits pushing for stock gains at all costs.

The pandemic, however, has accelerated an already-spreading recognition that shareholder value maximization is often a harmful choice — not by any means a moral imperative or even a fiduciary responsibility.

Major institutions of capitalism are converging on a new vision for it. The 2019 Business Roundtable CEO statement said that corporate strategy should benefit all stakeholders – including shareholders, yes, but equally customers, employees, suppliers, and the communities in which companies operate. BlackRock CEO Larry Fink’s recent annual letters assert new views of how that investment company, the world’s largest, should invest the trillions it oversees.

Fink’s 2019 letter spelled out a new vision for corporate purpose; the subsequent 2020 and 2021 letters focused on business’ responsibility around climate change, particularly in light of the pandemic. The B Corporation and conscious capitalism movements are growing. The World Economic Forum is championing a “Fourth Sector,” combining purpose with profit. Business schools, facing student rebellions against a purely profit-maximizing curriculum, are rapidly changing what they teach.

And with society under siege, many more businesses, including social media, are scrambling to seem like good corporate citizens. They have no choice.

Facebook, for example, has doubled down on philanthropy and new efforts to combat misinformation, even as usage and share price soar. Platforms like WhatsApp (owned by Facebook) have become essential services to connect people whose physical ties have been abruptly severed during the global pandemic. Shelter-in-place has become, in many ways, shelter-in-Facebook-properties.

But Facebook and its brethren remain fragile. Since the 2016 presidential election in the U.S., Facebook has faced governmental hearings and regulation, public uproar (#deleteFacebook), and huge fines for invading privacy and undermining democracy. These calls were amplified in the weeks following the January 6 Capitol riot. Separately, it faces allegations of bias, largely (though not entirely) from the political right. These have led to calls for the revocation or reform of Section 230 of the Communications Decency Act, which grants it immunity from the actions of its users.

A giant company that is simultaneously essential and pilloried is vulnerable. Just ask the ghosts of John D. Rockefeller and his fellow robber barons, whose huge monopolies industrialized America more than 100 years ago. Journalistic muckrakers and public outrage targeted them for their abusive practices until the government finally broke up their companies via antitrust legislation.

Because Mark Zuckerberg maintains complete majority control of Facebook, he could unilaterally quell public opprobrium and fend off heavy-handed regulation singlehandedly by transforming Facebook into a new kind of business: a for-benefit corporation.

Under the Public Benefit Corporation legal model, firms bind themselves to a public benefit mission statement and carry out required ongoing reporting on both the standard financials and on how the company is living up to its mission. That status protects the company against profit-demanding shareholder lawsuits, and also attracts employees and investors who want to combine profit with purpose.

Data.world is one of the thousands of certified B Corporations that have seen good returns on financial metrics. Allbirds, for example, launched in a few sustainable materials using a pro-sustainability process to manufacture comfortable shoes, quickly reaching revenues of $100 million and valuation of $1.7 billion in an industry fraught with sustainability and human rights concerns. Other household names that are B Corps include The Body ShopCourseraDanone, the Jamie Oliver GroupKing Arthur FlourNumi Tea and Patagonia.

Many companies that have not undergone formal B Certification from B Labs have nonetheless done well while transforming their business practices, such as the carpet and flooring company Interface. Some firms incorporate ESG principles into their management systems – the $24 billion (market cap) Dutch life sciences company DSM has for years had meaningful sustainability targets for its senior management that account for fully 50 percent of their annual bonuses. Both Interface and DSM attribute much of their commercial success to their attention to non-financial considerations.

A for-benefit Facebook could similarly relate to the world differently, avoiding many of the reputational shocks and regulatory responses that have led to huge stock dips and enormous fines. Its operations would align with Zuckerberg’s proclaimed purpose to enable the potential abundance that results from connecting everyone in the world.

Imagine a Facebook town hall as a true public square, not just another way to gather and sell people’s data without their explicit consent. Imagine a Facebook that put its users first and its advertisers second; that revealed where ads came from; that earned your attention in a way that you controlled rather than through machine-driven algorithms maximizing your attention for good or ill. Such a for-benefit Facebook could create true buy-in and transparency with its massive community around the world.

Of course, such steps as Facebook’s new Oversight Board, which may provide some meaningful review, don’t require a legal change. But if shareholders and employees continue to be rewarded primarily by the success of the problematic ad revenue model, a continuing conflict between private gain and public benefit makes it impossible to have confidence about what is happening behind the scenes. A shift to for-benefit incorporation and appropriate certification brings with it different performance metrics and accountability systems with public scores.

In changing Facebook into a for-benefit corporation, Zuckerberg could insulate himself against presidential rage while rehabilitating his reputation — and his company’s. It would likely create vast ripples both in Silicon Valley and beyond — and it might help transform capitalism itself.

Categories: Business News

Create a handbook and integrate AI to onboard remote employees

2021, March 3 - 7:53am
Chris Buttenham Contributor Share on Twitter Chris Buttenham is the CEO and co-founder of Obie, a knowledge base software and support accelerator.

The pandemic has forced organizations across the globe to shutter the office environment and take up a remote-first strategy. Through necessity, professionals have adapted to remote working. But the systems they use are still playing catch up.

One area less readily accommodating to the remote environment is the onboarding process. Given that it is the first sustained contact that a new starter has with a company, a remote-first strategy is dependent on its success. When looking to onboard new employees, the luxuries of first-day meet and greets, in-person hardware setup and a team lunch are no longer available. From interview to offer letter and beyond, any new hire’s early journey is critical to their life at the company, their job satisfaction and ultimately their productivity. The remote induction must be a smooth process, and so needs a thorough rethink.

What is most important is that everyone in an organization prioritizes documentation; exactly how they do it is secondary.

A cultural shift in the company may be necessary. Organizations need to embrace knowledge sharing and collaboration, by turning to a “handbook-first” approach. A few simple steps can lead them there. Companies also need to analyze their workflow. Are the right systems in place to ensure the seamless flow of both tacit and explicit knowledge?

Perhaps most importantly, artificial intelligence can help transform a clunky old onboarding process into a sophisticated, smooth journey. Naturally the best AI models to use will depend on the business and department in question. However, with a few pointers business leaders can carve out a path to AI integration.

Let’s dive into the specifics that can transform the remote onboarding process, for the benefit of both the company and the new starter in question.

How to handbook

This is arguably the most important piece of the puzzle when it comes to ensuring newcomers are able to access the right information at the right time; it’s also the most difficult to get right. It is for workers at all levels of an organization to think about how knowledge is shared between teams and the processes that surround that interchange of ideas.

What is most important is that everyone in an organization prioritizes documentation; exactly how they do it is secondary. You can spin up plenty of free and paid software to start creating a handbook. Anything cloud-based is suitable, with more sophisticated paid options recommended to keep things easily searchable with documentation sorted into well-defined hierarchies rather than losing those nuggets of information in a sea of folders.

However, this systemic challenge is best addressed from top down. The process should include some checks and balances, with permissioning crucial for parts of the handbook that should remain static, like policies and SLPs. Other parts of the documentation should be kept flexible, like processes and team-level knowledge. The majority of the handbook must be democratized as far as possible.

GitLab, an all-remote company, first coined the term “handbook-first.” The DevOps software provider acts as a great example of a company that lives and breathes through documenting and codifying internal knowledge. Everyone within the organization buys into the mantra of documenting what they know, with subject matter experts assigned to manage knowledge base content. Keeping company documentation up to date is a collaborative task, considered paramount to the company’s livelihood. Software gives a helping hand, nudging contributors to keep information up to date.

Darren Murph, head of Remote at GitLab, says that their documentation strategy, twinned with a cooperative approach, helps to build trust with new starters. “When everything a new hire needs to know is written down, there’s no ambiguity or wondering if something is missing. We couple documentation with an onboarding buddy — a partner who is responsible for directing key stakeholder conversations and ensuring that acclimation goes well.”

Categories: Business News

Cornea eyes in on fighting wildfires using better data

2021, March 3 - 7:20am

It’s not yet fire season thankfully, which affords some breathing room for firefighters and emergency responders to begin planning out how to confront the increasingly complex and unwieldy task of preventing and responding to fires in the American West. Wildfires in the region have been particularly acute in recent years in states like California, mostly due to hotter conditions driven by climate change, decaying grid infrastructure that can lead to sparks, and a tinderbox of trees and foliage ripe for conflagration.

After years of bruising firefighting, some startups are exploring how to improve fire response. One of them is Cornea, a sort of spin-up by public sector-focused venture studio Hangar, which raised $15 million last year to build new startups targeting the government.

Hangar raises $15 million for its venture studio for government technology startups

One of Hangar’s first companies was Cornea back a couple of years ago, and it remains one of the most interesting for its potential. The idea is to meld geographical, weather and historical fire data into a machine learning model that can augment frontline firefighters with better guidance on where to push forward and when to retreat in the midst of a blaze.

The startup has two main products it is looking to launch this year. The first is focused around delivering better situational awareness around a subject known among firefighters as the “Suppression Difficulty Index.” These are essentially maps that inform firefighters of the dangers of fighting fire in a very specific geographical location. For instance, a particular location could have wind or water conditions that might accelerate a fire and endanger responders if they are not careful.

The other product is focused on “Potential Control Lines” — locations where a fire break or other action could potentially push back a fire. Using typography, vegetation and a myriad of other data, Cornea can locate positions with a higher likelihood of success in battling a fire.

Cornea’s Chief Fire Officer is Tom Harbour, who formerly served a decade as head of fire response for the U.S. Forest Service. He said that “50 years ago, I was raised in a culture where you never knew ‘why’ — you just obeyed orders” when it came to firefighting decisions out in the field. “Your head was on the proverbial swivel.” With Cornea and the products the company is creating, we are “Getting aligned on the ‘why’ and beginning to have [firefighters] sense the information that they are looking at.”

Harbour noted that the most common tools in the field today remain paper maps and markers, simply because “you know it doesn’t break right at the time when you can’t have things break.” Cornea’s products may help firefighters in the field, but they are far more likely to have an impact in the fire operations centers where strategic decisions get made about where to invest firefighting resources.

Josh Mendelsohn, the founder and managing partner of Hangar, said that the company is straight down the center of the studio’s investment thesis. “Cornea is focused on taking these large datasets, processing them effectively … and then giving [firefighters] as much analytical impact in an output as simple as possible,” he said, noting that “it turns out that in this market the best user experience is a PDF.”

Indeed, one of the major challenges for building in this market is simply the unique dynamic of disaster response compared to, say, enterprise SaaS. “Cornea has had to go through a customer-discovery process,” Mendelsohn said. “It all feels necessary, but what are the right things that require the least amount of behavior change to have impact immediately?” One challenge particularly around firefighting is simply the feedback loop from the field to the team. “Fire is seasonal so we have had to be a bit incremental,” Mendelsohn said.

The team is currently three full-time people plus consultants with Hangar augmenting them with its own studio staff. The company built out its product partially using federal research grants to deepen the science of firefighting, and this year, hopes to work with the Forest Service and state firefighting agencies to get its models out to the frontlines. “There is a human bandwidth problem,” Mendelsohn said. “How do you take limited resources to help [firefighters] go further by using them effectively?”

Silicon Valley’s myths and realities of existential risk

Early Stage is the premier ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, product market fit, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included for audience questions and discussion.

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Categories: Business News

Proptech startup States Title, now Doma, going public via SPAC in $3B deal

2021, March 3 - 6:52am

Real estate tech startup Doma, formerly known as States Title, announced Tuesday it will go public through a merger with SPAC Capitol Investment Corp. V in a deal valued at $3 billion, including debt.

SPACs, often called blank-check companies, are increasingly common. They exist as publicly traded entities in search of a private company to combine with, taking the private entity public without the hassle of an IPO.

When it floats later this year, Doma will trade on the New York Stock Exchange under the ticker symbol DOMA. The transaction is expected to provide up to $645 million in cash proceeds, including a fully committed PIPE of $300 million and up to $345 million of cash held in the trust account of Capitol Investment Corp. V. 

Go SPAC yourself

CEO Max Simkoff founded San Francisco-based Doma in September 2016 with the aim of creating a technology-driven solution for “closing mortgages instantly.” While it initially was founded to instantly underwrite title insurance, the company has expanded that same approach to handle “every aspect” of closing and escrow.

Doma has developed patented machine learning technology that it says reduces title processing time from five days to “as little as one minute” and cuts down the entire mortgage closing process “from a 50+ day ordeal to less than a week.” The startup has facilitated over 800,000 real estate closings for lenders such as Chase, Homepoint, Sierra Pacific Mortgage and others.

The name change is designed to more accurately reflect its intention to expand “well beyond” title into areas such as appraisals and home warranties.

Its goal with going public is to be able to “continue to invest in growth, market expansion and new products.”

Anchoring the PIPE include funds and accounts managed by BlackRock, Fidelity Management & Research Company LLC, SB Management (a subsidiary of SoftBank Group), Gores, Hedosophia, and Wells Capital. Existing Doma shareholder Lennar has also committed to the PIPE and Spencer Rascoff, co-founder and former CEO of Zillow Group, has committed a personal investment to the PIPE.

Up to approximately $510 million of cash proceeds are expected to be retained by Doma, and existing Doma shareholders will own no less than approximately 80% of the equity of the new combined company, subject to redemptions by the public stockholders of Capitol and payment of transaction expenses.

In mid-February, Doma announced it had closed on $150 million in debt financing from HSCM Bermuda, which had previously invested in the company. And last May, it announced a massive $123 million Series C round of funding at a valuation of $623 million.

Why two startups are betting on debt instead of equity

Results

The company posted modest growth from 2019 to 2020, seeing its GAAP revenues rise from $358.1 million to $409.8 million. After removing premiums paid to agents, its revenues (“retained premiums and fees”) decreased to $179.8 million in 2019 and $189.7 million in 2020. (For this section we’re leaning on the reported 2020 numbers that are caveated with an “estimated” tag. As it is March, we expect the final 2020 numbers to come in close enough to what was reported as to make us comfortable citing them.)

In 2021 the company also anticipates modest growth, with GAAP revenues estimated at $416.4 million, and its retained revenue figure landing at $226.4 million. More expansive growth is anticipated and sketched out for 2022 and 2023, though as those figures are far in the future we can discount them for now.

Doma also expects its economics to worsen in 2021, with its adjusted gross profit as a percentage of its retained premiums and fees falling from 48.3% last year to 39.5% this year. Of course we’re so far off the GAAP ranch with that metric as to be lost, but it’s worth noting what the company is telling the street about its impending financial performance.

Other metrics are also pointed in a negative direction, with Doma expecting its adjusted EBITDA to fall from -$19.0 million to -$66.6 million in 2021. The company does predict a rosy 2023 adjusted EBITDA number, for whatever stock you want to put in that.

Without discounting costs, Doma’s 2020 net loss of $35.1 million is expected to expand to $103.1 million this year. Still, as with many entities pursuing a public debut via a SPAC, Doma is debuting while it is still sorting out elements of its business as the pandemic starts to diminish in light of increasingly readily available vaccines. It certainly has high hopes for its future.

The SPAC parade

Doma joins the growing number of proptech companies going the public route. On Monday, Compass, the real-estate brokerage startup backed by roughly $1.6 billion in venture funding, filed its S-1

In 2020, Social Capital Hedosophia II, the blank-check company associated with investor Chamath Palihapitiya, announced that it would merge with Opendoor, taking the private real estate startup public in the process.

Porch.com also went public in a SPAC deal in December. And, SoftBank-backed View, a Silicon Valley-based smart window company, will complete a recent SPAC merger to be publicly listed on the Nasdaq stock exchange on March 9. The company is expected to debut trading with a market value of $1.6 billion.

Compass files S-1, reveals $3.7B in revenue on net loss of $270M

Opendoor to go public by way of Chamath Palihapitiya SPAC

Categories: Business News

Fluid Truck, the Zipcar of commercial trucks, raises $63M to take on rental giants

2021, March 3 - 6:34am

Fluid Truck has built an app-based platform that aims to take away the pain and cost of owning or leasing commercial vehicles, all while grabbing market share from established companies like Penske, Ryder and U-Haul. 

Now, it has the capital to help it get there. The Denver-based company said Tuesday it raised $63 million in a Series A funding round to expand its truck-sharing platform, which helps mid-mile and last-mile delivery companies remotely manage an on-demand rental fleet via web or mobile app. Private equity firm Bison Capital led the round, with participation from Ingka Investments (part of Ingka Group, the main Ikea retailer), Sumitomo Corporation of Americas and Fluid Vehicle Owners.  

The investment, its first external round, comes after rapid growth at the four-year-old company. Founder and CEO James Eberhard told TechCrunch that revenue increased 100x in the last two years. That type of growth sounds promising, but the company did not provide a baseline, so it’s hard to judge scale. 

With e-commerce expected to continue to rise at a global 9.5% compound annual growth rate from 2020 to 2025, the demand for accessible trucks for hire might see correlative growth. It’s no surprise that e-commerce is one of the industries Fluid Truck has targeted. 

SoftBank, Volvo back Flock Freight with $113.5M to help shippers share the load

Fluid Truck, which operates in 25 U.S. markets, operates like the car-sharing company Zipcar, with a commercial bent. Businesses such as moving and e-commerce delivery companies can use the platform to rent trucks. Fluid Truck’s pitch to businesses extends beyond the “you don’t need to buy or lease” argument. The platform also allows delivery companies to dispense with having a manager on staff who would manage, maintain and eventually sell the fleet. 

Businesses eager to outsource the purchasing and managing of their trucks can find fleets for hire in industrial parks and retail areas within Fluid’s service network. 

“You can hop on our platform, rent a truck and be in it in a matter of minutes, which really allows businesses to scale up and scale down,” said Eberhard. “We’re watching our user behavior go from a place where they used to own every vehicle they needed at a time to a place where they’re now grabbing spare capacity off Fluid.”

Eberhard hopes to see that type of supplementary use morph into an end state where companies don’t own a single truck and run solely on Fluid Truck’s platform. 

Fluid Truck argues that its tech stack, which is designed to smooth out the booking and renting process, gives it a competitive edge in a market dominated by the likes of U-Haul, Ryder and or other small depots. Eberhard said the process of going to a depot and waiting in line is slow and sloppy, whereas Fluid Truck’s app makes renting a van as easy as calling an Uber.

“We take all those complexities away and allow people to have a virtual fleet,” Eberhard told TechCrunch.

Fluid Truck’s fleet is made up of thousands — and soon to be tens of thousands — of cargo vans, pickup trucks, large box trucks and various other vehicles. The company also claims to have the largest medium-duty EV rental fleet in the United States, which it continues to expand as it works with OEMs to increase fleet capacity. Electric vehicles still make up less than 1% of its total portfolio due to the slower adoption of EVs on the commercial side. 

Eberhard wants Fluid to be a dominant force in the trucking industry. But Fluid Truck is not the only truck sharing app on the streets. Competitors GoShare and Bungii have similar offerings.

Smart scooter company Gogoro launches GoShare, an end-to-end vehicle-sharing platform

This sizable round could provide an advantage as it tries to become the household name in digital truck sharing. Perhaps, as importantly, the company has the attention and investment of Ikea. 

“This is another step in enabling Ikea retail to provide last mile delivery services to our customers, continue to improve on our customer promise, while also reducing our environmental footprint,” Krister Mattsson, managing director of Ingka Investments said in a statement, a comment that suggests a future partnership with Fluid Truck. 

With this latest capital round, Fluid’s goal is to (you guessed it) scale outwards, with a focus on expanding the team, adding dozens more markets in the U.S. and preparing to take Fluid into the EU and Canada. 

Fluid Truck will also be investing back into its own tech stack, which includes an internal proprietary telematics platform to predict and automate servicing and maintenance of the company’s fleet. 

Early Stage is the premier ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, product market fit, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included for audience questions and discussion.

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Categories: Business News

SpineZone is the latest health tech startup to raise millions in the musculoskeletal space

2021, March 3 - 5:55am

SpineZone is a startup that creates personalized exercise programs and treatment for neck and back pain. The company uses an online platform and in-person clinics to deliver a curriculum that, ideally, helps patients avoid the need for prescription drugs, injections and surgeries, and providers then avoid the cost of all of the above. Co-founded by brothers Kian Raiszadeh and Kamshad Raiszadeh, the company tells TechCrunch that it has raised $12 million in a Series A round led by Polaris Partners and Providence Ventures, with participation from Martin Ventures.

At its core, SpineZone is a virtual physical therapy platform augmented by in-person clinics. The latter bit is important because it takes a video repository, which has health outcomes baked into it, and helps get those same users some real-life support.

Patients can log onto the site, either through smartphone or laptop, and then answer a series of questions around pain and risk factors. Then, patients can go through a series of exercises. These exercises are created in tandem with professionals, and are based on peer-reviewed and evidence-based articles on musculoskeletal health.

Beyond this digital archive of videos, SpineZone offers an in-person clinic option to help patients practice these exercises. Off of this strategy, the startup claims that it has “1 million lives under management.”

SpineZone’s value proposition is that it helps payers and providers, whether that be employers, clinics or health plans such as Cigna or Aetna, avoid placing their patients in surgeries, which are expensive. By taking care of pain issues before they bubble up, SpineZone says that its current partners have been able to have a 50% reduction in surgery rate (it’s worth noting that COVID-19 could also play a role in this because it is high-risk to enter a medical facility).

Partners are happy because footing the bill of a non-operative procedure is remarkably cheaper than a non-operative procedure.

The cost saving that a medical center could endure can be in the millions. For example, the Sharp Community Medical Group saved $3.4 million in cost savings after working with SpineZone for two years.

SpineZone’s business model is a smidge more complicated than your classic SaaS fee. For example, it charges a clinic based on the number of members it serves per month, and also shares in the downside. For example, if SpineZone promises to get a clinic to $12 million in spend from $15 million, and the cost ends up being $17 million, the company will pay the clinic a portion of the difference. Alternatively, if SpineZone got the clinic to $10 million, even below estimates, it shares in the upside.

SpineZone joins a cohort of health tech startups that focus on musculoskeletal conditions. Venture-backed competitors include Peerwell, Force Therapeutics and Hinge Health, which was most recently valued at $3 billion, with plans to go public.

Sources: Hinge Health has raised $300M Series D at a $3B valuation

In order to win, many startups, SpineZone including, need value-based care to replace fee-for-service care. Value-based care is the idea that doctors are paid for outcomes instead of the number of times you enter a doctor’s office. The end goal is that this format creates monetary incentives around getting to an outcome faster: If a doctor is going to make $30,000 on fixing a knee, regardless of whether it takes two appointments or 20 appointments, they might as well do a more thorough job upon check-up instead of elongating the process. The flipside of this, of course, is that doctors might optimize for outcome volume and speed rather than the quality of the result itself.

While SpineZone’s early traction is promising, the healthcare ecosystem still has a ways to go before value-based models take precedence. Right now, Kian Raiszadeh estimates that 10 to 20% of revenue in a medical center comes from value-based care. SpineZone is projecting that it will get to 50% of revenue in the near future.

“And that’s the biggest evolution and tallest lift that we’re expecting,” he said.

8 VCs agree: Behavioral support and remote visits make digital health a strong bet for 2021

Early Stage is the premiere ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, legal, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included in each for audience questions and discussion.

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Categories: Business News

6 tips for SaaS founders who don’t want VC money

2021, March 3 - 5:27am
Aytekin Tank Contributor Share on Twitter Aytekin Tank is the founder of JotForm, an online form builder. Established in 2006, JotForm allows customizable data collection for enhanced lead generation, survey distribution, payment collections and more.

Over the past decade, venture capital has become synonymous with entrepreneurship. Founders from around the world arrive in Silicon Valley with visions of record-setting A rounds and billion-dollar valuations. But what if you don’t have unicorn dreams — or you don’t want to pursue VC money?

Bootstrapping a SaaS company is not only possible — I believe it’s a saner, more sustainable way to build and scale a business. To be clear, bootstrapping isn’t always easy. It requires patience and focus, but the freedom to create a meaningful product, on your terms, is worth more than even the biggest VC check.

The freedom to create a meaningful product, on your terms, is worth more than even the biggest VC check.

I started my company, JotForm, in 2006. We’ve grown steadily from a simple web tool into a product that serves more than 8 million users — without taking a dime in outside funding. We’re profitable in an industry with big-name competitors like Google.

Most importantly, I still love this company and its mission, and I want the same for my fellow entrepreneurs. If you’re a SaaS founder who’s wary of VC funding, here are my best bootstrapping tips.

Keep your day job

Success stories from founders who leap blindly into business without resources or relevant experience are compelling, but they’re the exception, not the rule. Working inside another organization can build your skills, your network and even inspire great product ideas.

After finishing college with a computer science degree, I worked as a developer for a New York media company. The editors always needed custom web forms, which were tedious and time consuming to build. I kept thinking, “There has to be a better way.”

That daily frustration led me to start JotForm — but I didn’t leave my job right away. I stayed with the media firm for five years and worked on my product on the side. By the time I was ready to go all in, I had the confidence, experience and savings I needed.

Many of the world’s biggest companies began as side projects, including Twitter, Craigslist, Slack, Instagram, Trello, and a little venture called Apple. If your day job doesn’t pay enough to fund the early stages of your business, consider a side gig or consulting work. There are so many ways to set yourself up for success without the pressure of VC cash or selling a chunk of your business.

Know you’re not alone

The exact numbers shift every year, but data compiled by Fundable show that only 0.05% of U.S. startups are backed by VCs. Another 0.91% are funded by angel investors. The vast majority, at 57%, are funded by credit and personal loans, while 38% get funding from friends and family.

It may feel like most founders raise multimillion-dollar rounds, but that’s simply not the case. It’s also good to remember that securing VC money is complicated and time consuming. You can spend months taking meetings and presenting the perfect deck — and still leave empty handed. Be patient and stick to your own path.

Measure profits, not popularity

SaaS founders often emphasize vanity metrics, like user acquisitions and total downloads. These numbers can measure short-term popularity, but they don’t reveal how users and customers feel about your product — or your long-term potential.

Categories: Business News

Retail Zipline raises $30M as it helps retailers adapt to the pandemic

2021, March 3 - 5:08am

When I first wrote about Retail Zipline in 2019, the startup was focused on building a communication platform that would help corporate decision-makers in retail communicate with individual stores. As you’d probably guess, the startup saw some changes in 2020.

“When COVID first hit, you might think a company that’s primarily focused on retail would be in trouble,” said co-founder and CTO Jeremy Baker. “But it turns out that a product that helps retailers communicate critical information when everything is changing is no longer a nice to have.”

In other words, where Retail Zipline might previously have been used for coordinating sales and promotions, it suddenly became a channel for managing things like health and safety protocols and communicating about furloughs and closures.

Co-founder and CEO Melissa Wong said the platform supports both engagement (a company executives sending a message to retail associates) and execution (translating a broader corporate strategy into an in-store experience). While you might think that execution was the only thing that mattered in the middle of a pandemic, Wong argued that the engagement side was also essential, particularly when employees felt they were putting themselves at risk.

“The engagement part means that we can explain to a retail employee what we’re doing to protect you during this crisis, and your role as part of this company and this brand,” she said.

Image Credits: Retail Zipline

She added that the company has doubled its customer baes during the pandemic and seen revenue increase 2.5x. Retailers using the platform include Sephora, AEO, L.L.Bean, Gap, Hy-Vee, Lush Cosmetics, BevMo, LL Flooring, Cole Haan, The LEGO Group, TOMS and Torrid.

The pandemic also spurred dramatic growth in e-commerce, but Wong (who previously worked on the corporate side of Gap and Old Navy) suggested that this won’t eliminate the need for physical stores. Instead, it just means they’ll have to live up to the long-standing “omni-channel promise,” where they serve as both a store and a distribution center for online orders.

“Retail will become more complex,” she said. “We will enable them to meet those complexities.”

Today, Retail Zipline is announcing that it has raised $30 million in Series B funding. The round was led by real estate-focused firm Fifth Wall, with partner Dan Wenhold joining the board of directors. Emergence Capital, Ridge Ventures, Hillsven Capital, Veeva co-founder Matt Wallach and the Fisher Family Fund also participated.

The company has now raised more than $39 million, according to Crunchbase.

In a blog post, Fifth Wall wrote:

The Fifth Wall network is rich with opportunities for Zipline to explore potential partnerships among our retail-focused partners and portfolio companies. However, we believe retail to be just the beginning for Zipline as we envision the product appealing to many Built World industries. The opportunity for Zipline within real estate could lie with organizations whose HQ office must communicate daily with field operations workers, such as more traditional brokers with a geographic focus (e.g., CBRE, Cushman & Wakefield), leasing agents within multifamily and SFR (e.g., Equity Residential, Greystar), or construction site workers.

Retail Zipline raises $9.6M from Emergence and Serena Williams

Early Stage is the premiere ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, legal, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included in each for audience questions and discussion.

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Categories: Business News

West Tenth’s app encourages women to start home businesses, not join MLMs

2021, March 3 - 3:32am

A new digital marketplace called West Tenth, now backed by $1.5 million in seed funding, wants to give women a platform to start and grow their home-based businesses. Through its mobile app, women can promote their business to others in the local community, then field inquiries and requests through the app’s integrated messaging platform, as well as finalize transactions through in-app payments.

The startup was co-founded by Lyn Johnson and Sara Sparhawk, who met when they both worked in finance. Johnson remained in finance, but Sparhawk later moved on to work at Amazon.

Johnson explains that her experience led her to better understand the economic inequality of women in the U.S., where they only own 32 cents to every dollar in financial assets than men own. A large driver of this is that women leave the workforce, often to raise children, which results in years where they don’t have earnings.

“We’re really good as a society at supporting women on the way of out of the workforce to care for their kids, but really terrible at supporting them on the way back in,” Johnson says. “Women know this, and as an alternative to employment that just seems to fail them, they’re starting businesses in droves.”

Image Credits: West Tenth

With West Tenth, the goal is to encourage this sort of entrepreneurship — and more broadly, to help women understand that the many of the talents they’ve developed at home are, in fact, potential businesses.

This includes opportunities like home-based bakers and cooks, photographers, home organizers or designers, home florists, baby sleep consultants, party planning and event services, crafting classes, fitness training, homemade goods, and more.

The company notes that the app isn’t necessarily closed to men, but the current market for U.S. home businesses favors women as they’re more often the partner who chooses to leave work to raise children. However, there are some men on its platform.

Though today many of these entrepreneurs market their home businesses on Facebook, they’re missing opportunities to reach customers if they’re not heavily involved in local groups and responding to requests for recommendations. West Tenth instead centralizes local businesses in one place to make discovery easier.

Image Credits: West Tenth

 

In the app, customers can browse and shop local businesses, filtering by category via buttons at the top of the screen. The results are sorted by distance and offer photos, description, and the starting price for the goods or services offered. Through integrated messaging, users can reach out directly for a quote or more information. Customers can also complete their purchases through the app’s Stripe payments integration. West Tenth takes a 9.5% commission on these sales.

Another key aspect to West Tenth is its education component, The Foundry.

Through a $100 per quarter subscription membership (or $350 per year), business owners will be able to attend bi-monthly events, including classes focused on the fundamentals of setting up home-based businesses, marketing, customer acquisition, and other topics. These classes will also be available à la carte at around $30 apiece, for those who want to pay per session.

In addition, attendees will hear from guest speakers who have experience in the home-based business market, and they’ll be able join mastermind networking groups to exchange ideas with their peers.

Image Credits: West Tenth

This system of combining education and networking with business ownership could potentially help more women become home-based business entrepreneurs instead of joining multi-level marketing (MLM) companies, as is common.

“When we started this, we recognized that MLMs are one of the few kind of industries that’s focused on this demographic of women who’ve left the workforce — which is a huge, untapped talent pool in the U.S.,” notes Johnson. “But they’re really predatory. Only the top 1% of sellers distributors really make money and the rest lose money. And they lose their social capital, as well. What we’re really interested in doing is becoming an alternative to MLMs in many respects,” she adds.

Not surprisingly, MLMs aren’t allowed on the West Tenth platform.

Image Credits: West Tenth

The startup, which completed Kansas City TechStars last summer, has now raised $1.5 million in seed funding to get its platform off the ground. The round was led by Better Ventures along with Stand Together Ventures Lab, Kapital Partners,The Community Fund, Backstage Capital, Wedbush Ventures, and Gaingels.

The funds will be used to develop the product and grow its user base. In time, West Tenth aims to build out product features to better highlight local businesses. This includes shopping elements that will let you see what friends are buying and video demonstrations, among other things.

Since 2019, West Tenth has grown its footprint from just 20 businesses on the app to now over 600, largely in suburban L.A. and Salt Lake City. It’s now aiming to target growth in Phoenix, Boise, and Northern California.

Image Credits: West Tenth

The timing for West Tenth’s expansion is coming on the tail end of the COVID-19 crisis, where things have only gotten worse for women’s traditional employment.

School and daycare closures combined with job losses that greatly impacted women’s roles have now driven more women out of the workforce compared with men. And according to McKinsey, women accounted for nearly 56% of workforce exits since the start of the pandemic, despite making up just 48% of the workforce. This COVID-driven “shecession,” as some have dubbed it, is also disproportionately impacting women of color, studies have found.

“We’ve seen 5 million women exit the workforce — some because they were laid off or furloughed, and a huge chunk because they’re opting out because the caregiving responsibilities just became overwhelming,” says Johnson.

“The thing is when women leave the workforce for caregiving reasons — for some reason we really discount that and we make it even harder for them to return to work. So I think over the next 18 to 24 months, we’ll see a big surge in economic activity in the home with women trying to bring in additional sources of income by running a business from the home,” she says.

The West Tenth app is available on both iOS and Android.

Early Stage is the premiere ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, legal, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included in each for audience questions and discussion.

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Categories: Business News

SkyMul’s drones secure rebar on the fly to speed up construction

2021, March 3 - 3:22am

There are many jobs in the construction industry that fall under the “dull, dirty, and dangerous” category said to be ripe for automation — but only a few can actually be taken on with today’s technology. One such job is the crucial but repetitive task of rebar tying, which a startup called SkyMul is aiming to completely automate using fleets of drones.

Unless you’ve put together reinforced concrete at some point in your life, you may not know what rebar tying is. The steel rebar that provides strength to concrete floors, walls, and other structures is held in place during the pouring process by tying it to the other rebar where the rods cross. For a good-size building or bridge this can easily be thousands of ties — and the process is generally done manually.

Rodbusters (as rebar tying specialists are called, or so I’m told) are masters of the art of looping a short length of plastic or wire around an intersection between two pieces of rebar, then twisting and tying it tightly so that the rods are secured in multiple directions. It must be done precisely and efficiently, and so it is — but it’s backbreaking, repetitive work. Though any professional must feel pride in what they do, I doubt anyone cherishes the chronic pain they get from doing that task thousands of times in an hour. As you might expect, rodbusters have high injury rates and develop chronic issues.

Automation of rebar tying is tricky because it happens in so many different circumstances. A prominent semi-robotic solution is the TyBot, which is a sort of rail-mounted gantry that suspends itself over the surface — but while this makes sense for a bridge, it makes far less for the 20th floor of an office building.

Image Credits: SkyMul

Enter SkyMul, a startup still in the very early stages but with a compelling pitch: rebar tying done by a fleet of drones. When you consider that the tying process doesn’t involve too much force, and that computer vision has gotten more than good enough to locate the spots that need work… it starts sounding kind of obvious.

CEO and co-founder Eohan George said that they evaluated a number of different robotic solutions but that drones are the only ones that make sense. The only legged robots with the dexterity to pick their way through the rebar are too expensive, and treads and wheels are too likely to move the unsecured rebar.

Image Credits: SkyMul

Here’s how the company’s SkyTy system works. First, a mapper drone flies over the site to mark the boundaries and then, in an automated closer flyover, to build a map of the rebar itself and where the ties will need to go. This map is then double-checked by the rodbuster technician running the show, which George said only takes about a minute per thousand square feet of rebar (though that adds up quickly).

Then the tying drones are released, as many as needed or wanted. Each one moves from spot to spot, hovering and descending until its tying tool (much like those used by human rodbusters) spans the rebar intersection; the tie is wrapped, twisted, and the drone is off to the next spot. They need their batteries swapped every 25 minutes, which means they generally have time to put down 70-80 ties; right now each drone does one tie every 20 seconds, which is in line with humans, who can do it faster but generally go at about that speed or slower, according to numbers George cited.

Drone-focused construction startup TraceAir raises $3.5M

It’s difficult to estimate the cost savings and value of the work SkyTy does, because the value of the labor varies widely. In some places rodbusters cost more than $80/hour, meaning the draw of automation is in cost savings. But in other markets the pay is less than a third of that, which compounded with the injury risk makes rodbusters a scarce quantity — so the value is in availability and reliability. Drone-based tying seems to offer value one way or the other, but that means the business model is somewhat in flux as SkyMul figures out what makes the most sense. Generally contractors at one level or another would lease and eventually own their own drones, though other methods are being looked into.

Image Credits: SkyMul

The system offers value-add services as well, for instance the precise map of the rebar generated at the beginning, which can be archived and used later for maintenance, quality assurance, comparison with plans, and other purposes. Once a contractor is convinced it’s as good or better than the manually-produced ones currently used, this could save hours, turning a 3-day job into a 2-day job or otherwise simplifying logistics.

The plan at the company is to first offer SkyTy as an option for bridge construction, which is a simpler environment than a multi-story building for the drones. The market there is on the order of $30-40 million per year for rebar tying services, providing an easier path to the more complex deployments.

SkyMul is looking for funding, having spun out of Georgia Tech and going through Comcast-NBC accelerator The Farm and then being granted a National Science Foundation SBIR Phase I award (with hopes for a Phase II). They have demonstrated the system but have yet to enter into any pilot programs — there are partnerships in the works but the construction business isn’t a nimble one and a drone-based solution isn’t trivial to swap in for human rodbusters on short notice. But once a few projects are under its belt the company seems likely to find serious traction among forward-thinking contractors.

Construction tech startups are poised to shake up a $1.3-trillion-dollar industry

Social Construct’s computer-optimized buildings could shake construction industry’s foundations

Early Stage is the premiere ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, legal, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included in each for audience questions and discussion.

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Categories: Business News

Airbyte raises $5.2M for its open-source data integration platform

2021, March 3 - 2:10am

Airbyte, an open-source data integration platform, today announced that it has raised a $5.2 million seed funding round led by Accel. Other investors include Y Combinator, 8VC, Segment co-founder Calvin French-Owen, former Cloudera GM Charles Zedlewski, LiveRamp and Safegraph CEO Auren Hoffman, Datavant CEO Travis May and Alain Rossmann, the president of Machinify.

The company was co-founded by Michel Tricot, the former director of engineering and head of integrations at LiverRamp and RideOS, and John Lafleur, a serial entrepreneur who focuses on developer tools and B2B services. The last startup he co-founded was Anaxi.

Image Credits: Airbyte

In its early days, the team was actually working on a slightly different project that focused on data connectivity for marketing companies. The founders were accepted into Y Combinator and built out their application, but once the COVID pandemic hit, a lot of the companies that had placed early bets on Airbyte’s original project faced budget freezes and layoffs.

“At that point, we decided to go into deeper data integration and that’s how we started the Airbyte project and product as we know it today,” Tricot explained.

Today’s Airbyte is geared toward data engineering, without the specific industry focus of its early incarnation, but it offers both a graphical UI for building connectors, as well as APIs for developers to hook into.

As Tricot noted, a lot of companies start out by building their own data connectors — and that tends to work alright at first. But the real complexity is in maintaining them. “You have zero control over how they behave,” he noted. “So either they’re going to fail, or they’re going to change something. The cost of data integration is in the maintenance.”

Even for a company that specializes in building these connectors, the complexity will quickly outpace its ability to keep up, so the team decided on building Airbyte as an open-source company. The team also argues that while there are companies like Fivetran that focus on data integration, a lot of customers end up with use cases that aren’t supported by Airbyte’s closed-source competitors and that they had to build themselves from the ground up.

Drupal’s journey from dorm-room project to billion-dollar exit

“Our mission with Airbyte is really to become the standard to replicate data,” Lafleur said. “To do that, we will open source every feature that addresses the need of the individual contributor, so all the connectors.” He also noted that Airbyte will exclusively focus on its open-source tools until it raises a Series A round — likely early next year.

To monetize its service, Airbyte plans to use an open-core model, where all of the features that address the needs of a company (think enterprise features like data quality, privacy, user management, etc.) will be licensed. The team is also looking at white-labeling its containerized connectors to others.

Currently, about 600 companies use Airbyte’s connectors — up from 250 just a month ago. Its users include the likes of Safegraph, Dribbble, Mercato, GraniteRock, Agridigital and Cart.com.

The company plans to use the new funding to double its team from about 12 people to 25 by the end of the year. Right now, the company’s focus is on establishing its user base, and then it plans to start monetizing that — and raise more funding — next year.

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, legal, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included in each for audience questions and discussion.

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Categories: Business News

What to expect tomorrow at TC Sessions: Justice 2021

2021, March 3 - 1:54am

Get ready to engage in essential conversations about some of the most important issues facing the tech industry — diversity, equity, inclusion and labor. TC Sessions: Justice 2021 — a day-long virtual symposium — begins tomorrow, March 3, and we’re here to highlight just a few of the powerful people, presentations and fireside chats you won’t want to miss.

Hold up — if you don’t have a ticket yet, secure your seat here.

You’ll hear from top experts, leading voices and social justice warriors — from the tech industry and beyond. It’s a highly interactive day, and the virtual platform lets you engage in the conversations, ask questions and connect with participants around the world.

Here are just a few of tomorrow’s compelling presentations and exciting events. You’ll find a complete listing of the day’s programming in the event agenda.

Creating Equity in Tech with Congresswoman Barbara Lee (D-CA): When it comes to myths, lack of tech diversity as a “pipeline problem” is a whopper. Don’t miss our discussion with Congresswoman Lee, California’s East Bay representative, about the opportunities to create an equal playing field in tech so that underrepresented investors, founders, designers and coders can reap the benefits.

Fireside Chat – Diversity Is More Than Hiring People of Color: It may appear that the country is accepting change — from racial diversity to equality in the workplace. However, we still have ways to go. For example, organizational diversity is still about hiring from diverse talent pools. However, activating the full potential of diversity, equity, and inclusion (DEI) requires more than a “people strategy.” Robust and sustainable work in this area requires embedding DEI principles, policies, systems and practices into all parts of the business, including the employee and customer experience, brand culture and overall industry/corporate citizenship. Sponsored by Onshape.

Pitch Feedback: Join us for a pitch feedback session for select TC Include founders exhibiting at TC Sessions: Justice 2021 and moderated by TechCrunch staff.

Access All Areas – Designing Accessibility From Day One: This session examines the importance of ensuring accessible product design from the beginning. We’ll ask how the social and medical models of disability influence technological evolution. Integrating the expertise of disabled technologists, makers, investors, scientists and software engineers into your company’s DNA from the very beginning is vital to the pursuit of a functioning and equitable society. And could mean you don’t leave money on the table.

That’s just a tiny taste of what to expect tomorrow at TC Sessions: Justice 2021. Grab a pass, check the agenda, plan your day accordingly and join us for the important work of creating a more diverse, inclusive and equitable tech industry.

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