Today Crunch News, News Updates, Tech News
- Founders Factory backs Creator Fund, student-led VC to back EU student startups
- A look at Made Renovation, which just raised $9 million in seed funding to zero in on bathroom remodels
- Hustle Fund’s Elizabeth Yin discusses 2020’s fundraising landscape
- The fundraising landscape is shifting in 2020
- Outdoor Voices founder Tyler Haney says adios altogether to the company amid layoffs
- Apple to begin online sales in India this year, open first retail store in 2021
- As Block exits, Salesforce forecasts it will surpass $20B in revenue in FY2021
- Amazon all set to enter India’s food delivery market
- Grab your ticket: Only one week to TC Sessions: Robotics + AI 2020
- ShapeMeasure’s smart tool and robotic cutter let contractors measure once and cut never
- Lerer Hippeau leads $6M investment in Pinterest-like digital asset manager Air
- Particle lays off 10% of staff and co-founder departs after ‘turbulent period’
- Chicago’s M1 Finance, a consumer-focused fintech platform, reaches $1B under management
- ‘Konami Code’ creator Kazuhisa Hashimoto has died
- Cartesiam helps developers bring AI to microcontrollers
- Twitter opens its ‘Hide Replies’ feature to developers
- Facebook’s Libra Association adds crypto prime broker Tagomi
- Daily Crunch: Disney CEO Bob Iger steps down
- Andreessen makes Ribbon Health the first investment from its $750 million new healthcare fund
- YC just published a 70-page Series A guide so founders don’t tank their own prospects
Posted: 26 Feb 2020 04:01 PM PST
It seems like everyone wants student entrepreneurs. Entrepreneur First makes startups out of raw student material, for instance. Most countries want high-skilled students to stick around and make new companies. Only the UK likes to charge them a fortune for an education and then kick them out if they don't earn enough. But I digress!
In its long march to gradually cover several aspects of the UK's startup scene, Founders Factory has invested in Creator Fund, the student-led venture capital fund. It launches today in the UK but plans to spread abroad to unearth startup innovation within European universities. It will use a network of “student VCs” in university campuses to invest in new technology ventures and student founders.
The idea here is that students invest in their peers, offering an alternative route to growth for university-based startups.
So far it has people signed up in 13 UK universities and offers up to £30,000 investment per startup. Equity is determined on a “case-by-case” basis. Pretty paltry for the average startup, but a king's ransom for the average student starting, I guess.
While Creator's Fund thinks that “the best person to find and support the most promising student founders, is their classmate next to them in the laboratory or classroom" I have a feeling this might end up tying them in a few interesting knots that may end up in some conflicts of interest. We shall see.
The fund intends to make about seven investments over the next 12 months. The VC has already made an investment in Imperial College London-based, Refund Giant- a service that syncs with credit and debit cards to automatically issue fast, hands-free VAT refunds for travelers.
Jamie Macfarlane, founder and CEO, said in a statement: "In the US, many of the great tech companies were born on college campuses – Facebook, Google, Snapchat & Yahoo were all started by student founders. The UK has some of the world's best universities and the same potential for students founders to be creating great businesses. For those high potential students to pursue this path, they need better access to three things – capital, business support and community. We, at Creator Fund, are delivering a new VC model specifically focussed on delivering this. We're training students at top universities to find and invest in deals with their peers and give them the early-stage support they need. And creating a community where they look around and see other people taking this entrepreneurial path."
Henry Lane Fox, Co-founder and CEO of Founders Factory, added, "What Creator Fund is doing is very special. They are challenging the VC landscape and we are excited to be part of it. It is giving highly-educated students the skills to be the investors of the future and uncover the founders of tomorrow."
Creator Fund launches with a mix of students from a wide range of backgrounds. Current members of the team include Richa Bajpai from India who has previously built a global CSR company that raised over £20m and Toyosi Ogedengbe from Nigeria who has built a platform to help investors deploy capital in West Africa.
At launch, Creator Fund has teams across 14 UK universities – Oxford, Cambridge, LSE, UCL, Kings, Imperial, LBS, Warwick, Newcastle, Nottingham, Edinburgh, Leeds, Aberdeen and St Andrews.
Posted: 26 Feb 2020 03:44 PM PST
Made Renovation, a new, San Francisco-based company, thinks it has found a profitable way to help homeowners get done something that busy general contractors in the Bay Area won’t otherwise make time for, which is bathroom remodels.
Why they typically pass on these: they have too many entire homes, or, at least, entire floors, to build for affluent regional homeowners who’ve kept the construction industry buzzing for years.
It’s a problem that founders Roger Dickey, who previously cofounded Gigster, and Sagar Shah, who previously founded Quad, think they can solve through technology, naturally. Their big idea: to create bathroom templates that customers can customize but whose scope and costs are generally understood, line up these customers, then hire general contractors who are willing to focus only on these bathrooms.
It’s an idea that’s picking up traction with these GCs, says Dickey, who explains it this way: “General contractors generally see net margin of 3%” no matter the size of the job owing to with unforeseen hurdles, like pipes that suddenly need to be rebuilt, drains that need to be dug, and materials that don’t ship on schedule.
In addition to timing issues, GCs are also often dealing with frustrated building owners who might underestimate a project’s costs, particularly in California where construction bills often cause sticker shock.
Made Renovation sees an opportunity to make both the lives of GCs, and homeowners easier. Through pre-negotiated pricing, volume and materials handling (it right now rents part of a warehouse where it receives goods), it’s promising GCs a “reasonable margin” so they can not only pay their crews but live a higher quality of life themselves.
Meanwhile, per the plan, customers need only choose from the company’s “modern” collection, its more traditional “heritage”design, or its “artisan” collection — all of which can be customized — then sit back while their long-neglected bathrooms are remade.
Whether Made Renovation can pull off its grand vision is a giant question mark. The construction industry is nothing if not messy, and in addition to convincing GCs of its merits, Made Renovation — like any marketplace company — has to strike the right balance between customer demand and supply as it gets off the ground.
In the meantime, investors clearly think it has promise. Led by Base10 Partners and with participation from Felicis Ventures, Founders Fund and some individual investors, the company has already raised $9 million in seed funding across two tranches.
Part of that capital is on display right now in San Francisco where Made Renovation today opened its doors to customers who want to check out its design ideas and, if all goes as planned, will begin lining up their own home improvement projects. Customers simply pick a collection, Made Renovation then puts together a “mood board” of materials from that collection, sends out a 3D rendering of what to expect, then goes into build mode with its GC partners.
As for what happens when that build goes awry, Dickey says Made Renovation has it covered. Most notably, while it guarantees the work to its own customers, the GCs with whom it works guarantee their work to Made Renovation.
Dickey also notes that while the startup “may lose money on some projects,” he stresses there are caveats that customers agree to at the outset. Among these, he says, “We can’t X-ray their walls and see if they don’t have wiring up to code. We don’t cover dry rot in walls.” Technology, suggests Dickey, can only do so much.
If you’re in the Bay Area and want to check out its new storefront, it’s on Chestnut Street in SF, in the city’s Marina district. The company hopes to perfect its model in the Bay Area, says Dickey, the expand into other regions. As for why Made Renovation decided to tackle one of the most challenging U.S. markets first, he suggests it’s the best way to test its mettle. “I like the idea of starting a company here, because if we can make it work here, I think we can succeed anywhere.”
Posted: 26 Feb 2020 03:15 PM PST
On the heels of her conversation-driving Twitter thread on 2020’s venture fundraising climate, Hustle Fund’s Elizabeth Yin converted her thoughts into an op-ed for TechCrunch. In keeping with her expansive thread, we asked her to adapt her thread for a TechCrunch column and join us for an extended conversation.
What follows is an interview between Yin and myself that came after I read her piece (which you can find here), digging into venture capitalist fear, the ability of established founders to raise outsized rounds, her advice on growth and how some Series A and Series B-stage companies posting impressive revenue expansion might be nigh-unfundable in this, the new fundraising reality.
What follows is an edited, occasionally condensed transcript of our chat. Let’s go!
TechCrunch: Okay, question one. You said, "VCs have gotten scared, almost to a fault." Aside from the WeWork IPO implosion, what are the leading drivers of this recent increase in fear?
Elizabeth Yin: Taking a step back, I think we have to ask ourselves, what is even the place of venture capital in the first place? And when you think about the original venture capital industry, you know, decades ago, those VCs were taking big, big bets, like at those moments in time during the 90s, or even before that, for some of the chip companies or even Apple Computer, there were many bets happening there.
Posted: 26 Feb 2020 03:15 PM PST
When I was a founder many years ago, I felt like I heard constantly conflicting advice and opinions on raising money for my startup.
It’s easy to raise. It’s hard to raise. If it's easy to raise, you should raise a LOT of money. You should raise a little money. You should try to go for a high valuation. You should raise at a "normal valuation" so it doesn't bite you later.
It was hard to understand what was going on and what I should actually do.
Many years later, now as a VC, it turned out that most of the things you hear people say about fundraising are generally true and generally good pieces of advice. All at the same time. Even when these ideas conflict. How is that possible?
Because, like anything else, different pieces of advice are apt for different types of companies and founders. Today’s fundraising landscape is particularly an interesting time of bifurcation that’s worth laying out in detail.
For some founders, it’s never been an easier time to raise
In the San Francisco Bay Area, if you’re a founder who has a “well-branded” resume, it’s a fantastic time to raise money at the earliest stages. It almost doesn’t even matter what company you’re building. You will get funding. You could be leaving Pinterest to start a company. Maybe you went to MIT and then did a 10-year stint at Google. Or maybe you were a former YC founder who is taking a second crack at a company. Or maybe you sold your last business for $10 million. If you did any of these things, it’s a great time.
For these founders, I’m seeing massive party rounds here in San Francisco — $3 million – $5 million seed rounds. Sometimes $10 million rounds right out of the gates! My friend, a fantastic serial entrepreneur with an exit, raised $8 million recently at $30 million+ post-money valuation with only a very early version of a product. Investors literally threw money at her and her round was oversubscribed.
SaaS is hot
And then, even if you don’t fit this profile, you can still generate a lot of heat on your fundraise. In the last few months, VCs have become very concerned about profitability. It’s not enough to be working on a fast-growth startup anymore. In part, we've all seen big-name startups that were once the darlings of Silicon Valley flounder in the late-stage markets because of high burn rates and being nowhere close to profitability.
And VCs have gotten quite scared. Almost to a fault.
So, I’m seeing companies at the Series A and Series B stages with 30% MoM growth that were popular before now struggle to raise their next rounds because they are not profitable. The feedback they receive is to "come back when you’re profitable or really close to it." This mentality change has had a huge impact on marketplaces and e-commerce companies — companies that don’t have predictable repeat customers or high margins.
On the flip side, SaaS companies have become the new darlings VCs have gone gaga for. SaaS businesses have repeat customers, strong lifetime values and upsell potentials. They are capital-efficient, high-margin businesses. And if you are growing well as a differentiated (differentiated being a key word) SaaS company, you probably have many VCs knocking on your door — at all stages early and late even if you are not on the coasts.
For most founders, it’s still challenging (as always) to raise money
For everyone else, after reading news stories about such large fundraises, it can be confusing to understand why their own fundraise is so challenging. Why is it so hard for me to raise money?
It turns out that fundraising is still hard for everyone else. Even in the Bay Area, if you don’t fall into the categories above, it's hard. People often erroneously think that just being in San Francisco will miraculously make fundraising easier. That's far from true. There are certainly many people who get funded there, but there are also just many more startups in San Francisco than elsewhere. Outside the SF Bay Area, it’s even harder to raise. So we have a weird Goldilocks and the Three Bears situation. Some companies are really hot. Most are really cold.
The press mostly writes about the hot deals, like companies that raise $5 million seed rounds and went through YC. After all, no one wants to read about how someone’s fundraising process is going horribly — that's just not a news story that sells. So now, everyone thinks Silicon Valley is littered with gold just by reading the news. The reality is that San Francisco mostly has poop on the ground and a small number of people will find a Benjamin once in a while.
Valuations are all over the board
I’m seeing valuations well above $10 million post — even $20 million post for hot seed-stage companies. And then for companies that are cold, the valuations are where they’ve always been — largely anchored based on geography. As low as $1 million post within U.S. and Canada. And it can even be lower elsewhere globally.
So when people ask me what a fair valuation is, it’s a really hard question. It depends on where you are, what you’re working on and what your background is. Many people think valuations are based on a company’s progress. That’s just not how it works. Valuations are based on supply and demand. Supply of your fundraising round. And investor demand for your fundraising round. Valuations go up when more investors are interested in investing. There's no such thing as a "typical" valuation.
Everyone’s mental model will be shifting
Friends outside of Silicon Valley often ask me if I think this time VCs will favor profitable companies over fast growth.
I think the answer is VCs would love to back profitable companies with fast growth.
(That, of course, begs the question in this day and age with other debt or revenue-based financing options why such a company would raise a lot of VC money, but that’s besides the point.)
That said, I do think that in this new era we are entering in 2020, companies that focus on profitability will separate the winners from the losers in the next few years. Thriftier founders will win.
Now, here’s the irony. As we go into this new age where frugality is a strength, I think that the startup journey will actually be harder for the founders who are able to raise their large seed rounds so quickly at high valuations. From past experience, I’ve found that founders who can raise easily in a first raise really struggle later on subsequent raises because they don’t know just how hard a fundraise can be. Moreover, founders who can raise large amounts in the beginning tend to be less frugal and often burn through too much cash before their progress really kicks in. In contrast, overlooked founders who have often found it challenging to raise know that they need to be frugal by default, because it’s unclear how hard the next fundraise will be. These founders know they need to make the business work with or without investors.
The ironic twist is that investors throw money at founders with particular resumes because they believe those founders will be the most likely to succeed with big exits. A strength can quickly turn into a weakness in this market.
My hope for all founders in 2020
My hope for all founders is that they focus on staying thrifty, watch cashflow and chip away at getting to profitability so they can own their own destiny. By focusing on customers, instead of investors, you can sell more and sell quicker. Ultimately, the end goal for a company is to be able to serve customers sustainably and effect change in our larger society.
And that's what I wish all startups find in 2020, so they don't have to care about the whims and fancies of investors as they change with the times.
Read our extended interview with Elizabeth Yin (Extra Crunch membership required).
Posted: 26 Feb 2020 02:37 PM PST
Last week, the Business of Fashion broke the news that co-founder and CEO Tyler Haney was stepping down from her role as CEO of the activewear label Outdoor Voices, citing slowing growth for the company and reporting that mismanagement was one reason for executive turnover at the top of the organization. The company soon after confirmed the news to us, saying that Haney would assume a new position as “founder” and remain on the company’s board of directors, even helping in its search for a new CEO.
None of this sat very well with Haney, apparently, who last week suggested in an email that the BoF report wasn’t entirely accurate, and now, according to the company, has “made a personal decision to resign from Outdoor Voices .” As it said in a statement sent to us yesterday, “We respect [Tyler’s] choice and wish her the best. As the founder of our company and a creative visionary, she brought Outdoor Voices to an important stage in our evolution.”
Yet it isn’t just Haney that’s out the door. According to the same statement, to curb costs, the company has conducted layoffs — which we’ve learned involved 15 corporate and field positions out of what we estimate to be roughly 300 people employed by Outdoor Voices.
Says the company: “Our focus remains on the future of Outdoor Voices and doing what's best for our company and our team. To that end, after much consideration and exploration of numerous options, we have made the difficult decision to eliminate a small number of positions. We are grateful for the contributions of the individual team members who have been impacted. Our mission isn't changing, but we believe that operating more dynamically in an evolving retail environment will position Outdoor Voices for long-term growth and success as we continue to build an incredible, positive community that is redefining how people think about recreation."
Haney reportedly owns 10% of the brand, so even while she’s moving on, she presumably wants to see it succeed. Indeed, according to a Slack message to staffers republished by BuzzFeed, she wrote to them: “You all know how much I value and I am incredibly proud of the brand community and team we have built together to get the world moving over the last six years,” she wrote in the message, according to BuzzFeed News. “This has been one of the most rewarding experiences of my life and I am so grateful to each and every one of you. THANK YOU. Sending all of my love. The future is bright and it’s yours for the taking.”
Outdoor Voices, founded in 2013, had raised $64 million in funding as of 2018, including from General Catalyst, Forerunner Ventures, GV and Drexler Ventures, the family office of Mickey Drexler, formerly of J.Crew fame.
Late last year, it raised additional funding from its investors, it confirmed to us last week, without disclosing the amount of funding. (According to that original BoF report, the company tried raising new funding late last year — presumably in part from new investors — but "had difficulty.")
BoF also reported that the company was losing roughly $2 million monthly in 2019, with annual sales of around $40 million, numbers that Outdoor Voices has not disputed.
With Haney now completely out the door, it’s up to those who remain to turn things around. The big question is how.
According to a source close to the company, which began as a direct-to-consumer brand, it isn’t planning any store closures (yet). Outdoor Voices has 11 locations, including in Austin, New York and Nashville.
In the meantime, while Outdoor Voices searches for a new CEO, it has installed Cliff Moskowitz as the top boss on an interim basis. Moskowitz comes from InterLuxe, a kind of private equity firm that works with fashion and luxury brands, where he has served as president for the last six years, according to his LinkedIn profile.
Pictured above, center: Tyler Haney, speaking at a 2018 Disrupt event.
Posted: 26 Feb 2020 01:58 PM PST
For a decade, Apple has solely relied on third-party sellers, stores and marketplaces to sell its products in India. That will begin to change this year.
At the company’s annual shareholder meeting Wednesday, chief executive Tim Cook told investors that Apple will open its online store in India, the world’s second largest smartphone market, at some point this year, and set up its first flagship brick-and-mortar store next year.
“I’m a huge believer in the opportunity in India,” said Cook. “It’s a country with a vibrancy and demographics that are just unparalleled.”
TechCrunch reported last month that Apple was planning to open its online store in Q3 this year and was unlikely to be able to have its brick-and-mortar store ready in the country this year.
India, perhaps the last great growth market for American technology giants, has been a conundrum for Apple and several firms that sell premium items.
It’s a big market that continues to report growth, but most people in the country can’t afford Apple’s products. In fact, the vast majority of smartphones that ship in India carry a price tag of $150 or lower, according to research firm Counterpoint.
For Apple, the other challenge has been the heavy import duty that New Delhi levies on electronic items. This has made iPhone even more expensive for people in India, as the company passes the additional cost to customers.
Apple has attempted to broaden its appeal in India by looking to reduce prices of its handsets. For years, it urged the government to provide it with some tax benefits. When those talks did not materialize, Apple moved to do something that all the Chinese phone makers have done in India: assemble smartphones locally.
New Delhi provides several incentives to companies that assemble electronic items locally. Two years into the process, Apple contractors Foxconn and Wistron are assembling a range of iPhone models in India, and that has lowered the prices for a number of models (except those in the current-generation lineup.)
These moves have already proven useful for the company. Apple shipped close to 925,000 iPhone units in India in the quarter that ended in December, research firm Canalys estimated. That figure, up 200% year-over-year, was the iPhone-maker’s best year in the country to date, the research firm added.
Madhumita Chaudhary, an analyst with Canalys, said Apple’s decision to become more aggressive with pricing — partnering with banks to offer more incentives to customers — helped the company improve its position in a market with 99% Android smartphones.
Apple has also held discussions with content studios to bulk up its movie and TV show offerings for the Indian audience. Three years ago, for instance, it was in late stages of talks to acquire the Indian business of Eros Now for $300 million — something which has not been previously reported — with an option to expand its stake in the publicly listed global company, sources with direct knowledge of the matter told TechCrunch a few months ago.
But the deal did not materialize.
TechCrunch also reported last month that Cook may plan an India visit for the opening of the online store. Apple did not comment on that story.
India eased sourcing norms for single-brand retailers last year, which paved the way for companies like Apple to open online stores before they establish a presence in the brick-and-mortar market.
Posted: 26 Feb 2020 01:55 PM PST
When Keith Block joined Salesforce from Oracle in 2013, the CRM giant was already a successful SaaS vendor on a billion-dollar quarterly revenue cadence. When the co-CEO announced he was stepping down yesterday, the company reported revenue of $4.9 billion for the quarter.
During his tenure, the company’s revenue more than quadrupled, earning an impressive $17.1 billion last year, and, as Block announced at the earnings call, the company he was leaving was forecasting revenue of $21 billion for FY2021.
Consider that it was not that long ago (in May 2017) that we wrote about the company reaching the $10 billion mark. It’s perilously easy to get lost in these numbers, to take them for granted and think they don’t mean as much as they do. It’s hard work to build a billion-dollar SaaS business, never mind $10 billion or $20 billion.
Yet Salesforce is embarking on unchartered territory for a SaaS company. It’s approaching $20 billion in revenue for a single year.
Growth through acquisition
Granted, the company keeps growing revenue by making big deals like buying MuleSoft for $6.5 billion in 2018 or Tableau for $15.7 billion in 2019, or just this week buying Vlocity for a mere $1.33 billion. That means the company spent more than $25 billion over a couple of years to buy substantial companies that will help them build their business.
Block took a moment to brag a bit about his accomplishments, including how some of those purchases performed, during his swan song call with Salesforce, calling it a capstone of his time at Salesforce:
Think about that last number for just a minute. This a SaaS vendor with the number of customers spending $20 million growing by 34%. Block helped orchestrate that growth and worked with the executive team to help determine which companies it should be targeting.
At a press conference in 2016 at Dreamforce, he discussed Salesforce’s acquisition strategy. At the time, it had bought 10 of 12 companies it would end up acquiring that year. It would buy only one in 2017, before revving up again in 2018. Here’s what he said about what they look for in a company, as we reported in an article at the time:
What’s next for Block?
There is no word on what Block will do next beyond acting as an advisor to his former co-CEO Marc Benioff, who took time in the earnings call to thank his colleague for his time at Salesforce. As well he should.
As Ray Wang, founder and principal analyst at Constellation Research point outs, Block leaves a big hole as he steps away. “If there is no equivalent replacement, you will see a significant impact in sales. Keith brought industries and sales discipline,” Wang told TechCrunch
It will be interesting to watch what he does next, and who, if anyone, will benefit from his vast experience helping to build the most successful pure SaaS company on the planet.
Posted: 26 Feb 2020 01:30 PM PST
Weeks after Uber exited India’s food delivery market, conceding defeat to local giants Swiggy and Zomato, a new player is gearing up to challenge the heavily-backed duopoly: Amazon.
The e-commerce giant plans to enter the Indian food delivery market in the coming weeks, a person familiar with the matter told TechCrunch. The launch of the service, which would be offered as part of either Amazon’s Prime Now or Amazon Fresh platform, could happen as soon as next month, we are told.
In the run up to the launch, the e-commerce giant has been testing its food delivery service with select restaurant partners in Bangalore, the source said, requesting anonymity as details of the new business are still private.
The company has been working on its food delivery business for several quarters and was previously aiming to launch it during the festival of Diwali. It’s unclear what caused the delay.
TechCrunch could not ascertain the kind of business agreement Amazon has formed with Indian restaurant partners — many of which have grown frustrated with online food delivery players. An Amazon spokesperson was not immediately available for comment.
Amazon’s foray into the food delivery market would create new challenges for Prosus Ventures-backed Swiggy, and Zomato, a 10-year-old startup that acquired Uber’s Eats business in India for about $180 million in January.
Both the startups, having raised more than $2 billion together, are still not profitable, losing more than $15 million each month to acquire new customers and sustain existing ones.
Anand Lunia, a VC at India Quotient, said in a recent podcast that the food delivery firms have little choice but to keep subsidizing the cost of food items on their platform as otherwise most of their customers can't afford them.
Figuring out a path to profitability is especially challenging in India as unlike in the developed markets such as the U.S., where the value of each delivery item is about $33; in India, a similar item carries the price tag of $4, according to estimates by Bangalore-based research firm RedSeer.
In recent years, both Swiggy and Zomato have expanded beyond food delivery businesses. Swiggy today runs what it claims to be the largest cloud kitchen network in India, and has also expanded to delivery of just about any item (not just food). Zomato has been working on "Project Kisan," to procure raw material directly from farmers and fishermen in an attempt to assume control of the supply of items to restaurants.
That’s not to say that it would be very easy for Amazon to scale its food delivery business in India. Swiggy alone operates in more than 520 cities in India and maintains partnership with over 160,000 partners.
Swiggy is adding 10,000 new partners to its platform each month, it said last week on the sidelines of its latest fundraise announcement. At stake is India’s food delivery market that was worth $4.2 billion as of the end of last year, according to RedSeer.
Amazon has established a dense delivery network in India through its own logistics chain and also through partnership with thousands of neighborhood stores.
The company’s move comes as Flipkart, its chief rival in India, is foraying into food retail business. Flipkart, which sold a majority stake in the company to Walmart for $16 billion last year, has registered an entity called "Flipkart Farmermart Pvt Ltd" that will focus on food retail, said Kalyan Krishnamurthy, Flipkart Group CEO, in a statement to TechCrunch in October.
The extended business for the Indian firm represents "an important part of our efforts to boost Indian agriculture as well as food processing industry in the country," he said, adding that the company is already working with hundreds of thousands of small farmers for the business. Flipkart has already committed $258 million to the new venture. Last month, it piloted delivery of fresh fruits and vegetable, Indian newspaper Economic Times reported.
Posted: 26 Feb 2020 01:00 PM PST
It's T-minus one week to the big day, March 3, when more than 1,000 startuppers will convene in Berkeley, Calif. for TC Sessions: Robotics + AI 2020. We're talking a hefty cross-section representing big companies and exciting new startups. We're talking some of the most innovative thinkers, makers, researchers, investors and influencers — all focused on creating the future of these two world-changing technologies.
Don't miss out on this one-day conference of interviews, panel discussions, Q&As, workshops and demos dedicated to every aspect of robotics and AI. General admission tickets cost $345. Snag your ticket now and save, because prices go up at the door. Want to save even more? Save 15% when you buy four or more tickets. Are you a student? Grab a ticket for just $50.
What do we have planned for this TC Session? Here's a small sample of the fab programming that awaits you, and be sure to check out the full TC Session agenda here.
And — new this year — don't miss watching the finalists from our Pitch Night competition. Founders of these early-stage companies, hand-picked by TechCrunch editors, will take the stage and have just five minutes to present their wares.
With just one more week until TC Sessions: Robotics + AI 2020 kicks off, you don't have much time left to save on tickets. Why pay more at the door? Buy your ticket now and join the best and brightest for a full day dedicated to all things robotics.
Posted: 26 Feb 2020 12:29 PM PST
As much as we’d all like to believe that our houses are built with perfectly square angles and other highly regular measurements, that’s rarely the case — which makes remodeling complex and tedious. ShapeMeasure hopes to alleviate that pain with a device that automatically measures a space and a robotic mill that cuts the required lumber precisely to size, shortening and easing the process by huge amounts.
Founder Ben Blumer, who was exposed to the art of building and repair early by his father, a general contractor, had a brainwave that became the company during some renovations of his own.
“I was shocked to see our flooring installer, who had 10 years of experience, and was excellent at what he did, take over an hour to install a single stair,” Blumer said. “I started thinking, ‘a little bit of technology could go a long way here.’ ”
Finding himself at the time free to work on such a project, he recruited a former general contractor friend and applied to HAX, which soon shipped them off to Shenzhen to pursue their idea.
The main issue is stairs: they’re tricky, and especially in older homes can be pretty off-kilter. So although you know each stair is about 35 inches wide, it might be 35 and 3/64 inches, while the next one could be 34 and 61/64. Likewise, the angles might be ever so slightly off the 90 degrees or whatever they theoretically should be. Painstakingly measuring every single stair and manually cutting wood to those many slightly different dimensions is extremely time-consuming. The tool ShapeMeasure built makes it literally a push-button affair.
The device they settled on is essentially a super-precise lidar that measures around itself in wide arc, and the exact details of which comprise part of the company’s secret sauce. This gives the precise dimensions and attachment angles of the area around it, in the first intended use case a stair. The design, helped along by HAX’s Noel Joyce, looks a bit like a giant Dust Buster by way of the original “Alien.”
“We were working with Noel Joyce, HAX’s lead industrial designer. We wanted a product that looked and felt like a tool. We figured, if you’re trying to convince contractors to try something new, it should feel familiar,” Blumer said. “We spent hundreds of hours sourcing parts and re-engineering our scanning mechanism so that it could fit into Noel’s beautiful form factor. Turns out, contractors don’t care what it looks like. They liked the design, but were way more excited for the functionality.”
Once the shapes are scanned in and checked, that information can be beamed off to ShapeMeasure’s other device, a robotic lumber sizing system that cuts wood into the exact size and shape necessary to fit together as stairs. Of course, the contractor still has to bring them to the location and attach them by whatever means they see fit, but what was once a process with perhaps hundreds of steps has been simplified by an order of magnitude.
The machine is similar to other lumber-cutting devices, but simpler and easier to operate.
“There are lots of automatic cutting systems — often big, heavy, expensive and operated by professional CNC technicians. To cut flooring on a machine like that involves setting up jigs, clamping and reclamping each board, and generating custom gcode for each stair we cut,” Blumer said. They can be several times more costly and difficult to employ. “The cutting solution we’re building is compact, requires no clamping, and can be operated with just a few hours of training.”
It’s not just about length and width, either — molding and other flourishes on the stairs can make complex cuts necessary that would be impractical or at the very least extremely time-consuming to attempt manually.
The result is that the installation process from start to finish is about four times faster, they determined. If this seems a bit optimistic, know that it isn’t just armchair theorizing — they were careful to back up these numbers from the start.
“We take our speedup data really seriously,” said Blumer. “This is our top metric! One of the first purchases I made for the company was a dozen stopwatches. We’ve done installations in the ShapeMeasure lab and on real, messy construction sites — filming, timing and logging every moment.”
Interestingly, the precut lumber made other improvements possible — the team designed a bucket to accommodate the increased rate at which the installer uses glue and other parts. It’s a bit like if you improved painting speed so much that your new bottleneck was mixing and pouring the paint into roller trays fast enough.
Currently the company is working on establishing standard practices and packaging so that a ShapeMeasure “microfactory” can be set up easily anywhere in the country on short notice. And they’re “considering” raising money before then to accelerate the process. Blumer built the prototype with his own money and they pulled in a bit from HAX and then a small pre-seed round to get things started.
With luck and a bit of elbow grease, ShapeMeasure could turn out to be a real differentiator in the contractor space — every hour counts, as does every dollar in an estimate.
Posted: 26 Feb 2020 12:16 PM PST
When it comes to the so-called “consumerization of the enterprise,” a workplace tool that looks an awful lot like Pinterest seems like it would be the trend’s final form. Brooklyn-based Air is building a digital asset manager for communications teams that aren’t satisfied with more general cloud storage options and want something that can show off visual files with a bit more pizzazz.
The startup tells TechCrunch that they have closed $6 million in funding led by Lerer Hippeau . RedSea Ventures, Advancit Capital and WndrCo also participated.
General-purpose cloud storage options from Google or Dropbox don’t always handle digital assets well — especially when it comes to previewing items, and Air’s more focused digital asset management competitors often require dedicated managers inside the org, the company says. Air has a pretty straightforward interface that looks more like a desktop site from Facebook or Pinterest, with a focus on thumbnails and video previews that’s simple and sleek.
Air is trying to capitalize on the trend toward greater à la carte software spend for teams looking to phase in products with very specific toolsets. The team is generally charging $10 per user per month, with 100GB of storage included.
“Adobe is an amazing suite of products, but with the idea that companies are mandating the tools that their employees use versus letting their employees choose — it makes a lot of sense that teams are going to ultimately end up having more autonomy and creating better work when they’re using tools that they care about,” Lerer Hippeau managing partner Ben Lerer tells TechCrunch.
Air lets customers migrate files from Dropbox or Google Drive to its AWS-hosted storage platform, which displays files like photos, videos, PDFs, fonts and other visual assets as Pinterest-esque boards. The app is a way to view and store files, but Air’s platform play focuses pretty heavily on giving co-workers the ability to comment and tag assets. Collaborating around files is a pretty easy sell; a couple of users discussing which photo they like best for a particular marketing campaign doesn’t require too much imagination.
The team has been focusing largely on attracting users in roles like brand marketing managers, content coordinators and social media managers as a way of infiltrating and scaling vertically inside marketing departments.
“What Airtable did to spreadsheets and what Notion did to docs, we’re doing for visual work,” CEO Shane Hegde told TechCrunch in an interview. “As we think about how we differentiate, it’s really that we’re a workspace collaboration tool, we’re not just cloud storage or digital asset management…”
Posted: 26 Feb 2020 12:12 PM PST
San Francisco-based startup Particle was one of the rising stars in the Internet of Things space, raising more than $81 million to date on the promise of helping to manage and secure the next generation of connected devices.
But the company is only now emerging from what its co-founder and chief executive Zach Supalla called a “turbulent period,” prompting layoffs and cost-cutting to help stay afloat, TechCrunch has learned.
Founded in 2012, Particle snagged $40 million in its Series C fundraise last October from big industrial investors, including Qualcomm Ventures and Energy Impact Partners, signaling strong support for the company’s mission. The startup pitches its flagship platform as an all-in-one solution to manage and secure IoT devices with encryption and security, but also scalability and data autonomy.
But a recent email sent by Supalla to his staff — obtained by TechCrunch — shows the company is course-correcting after a recent revenue miss.
The email, which the company confirmed was sent by the chief executive, said Particle laid off 14 staff members earlier this month, representing about 10% of the company. The layoffs of both engineering and support staff came just weeks after co-founder and chief technology officer Zachary Crockett quietly departed the company for “unrelated” reasons, said Supalla. (Crockett did not respond to a request for comment.)
According to Supalla’s email to staff, Particle’s revenue goal in 2019 was $16 million, but it ended the year with $10.3 million. Supalla cited, among other things, “operational challenges” with the business that he said kept the company “from executing as well as we could.”
Supalla said the company still has a “flush” bank account with more than $30 million in the bank, but the company’s current burn rate of $2 million per month is “uncomfortably high.”
“We would only have until early 2021 to prepare for the next stage of financing the company,” he said.
The email added that the company is bringing on $10 million in venture debt, but Supalla told TechCrunch that the deal is “still in progress.” Particle is aiming to reduce its burn rate to about $1.6 million per month, which Supalla’s email said would be achievable with the recent layoffs and reducing discretionary budgets, including marketing.
The cost-cutting will “put us in a position of financial strength,” the email said, adding that the company has “no intentions” of further layoffs.
Although the 14 employees have been given severance, one source said that some are still waiting for the payouts — some two weeks after the announcement — which Supalla confirmed in an email. TechCrunch also learned that former staff were asked to sign non-disclosure agreements. Supalla told TechCrunch that these agreements come with non-disparagement clauses, but that anyone laid off that wanted to be released from the non-disparagement terms would be.
Supalla’s email is hardly the death knell for the company, but questions remain about its revenue targets and its efforts to reduce its monthly burn rate. The chief executive’s email said, candidly, that while layoffs can signal financial duress, they’re all too often made too late and “as a last resort.”
“That’s not what’s happening here,” said Supalla. “We have plenty of money in the bank and are making prudent cuts to strengthen the business.”
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Posted: 26 Feb 2020 12:00 PM PST
Eagle-eyed readers will recall that we mentioned M1 Finance earlier today in our look at a few trends in the fintech industry. We’re back with the firm this afternoon as it has a bit of news that’s worth discussing.
Chicago-based M1 Finance announced today that it has reached the $1 billion assets under management mark, or AUM. Reaching AUM thresholds provides useful milestones that we can use to track the progress of various players in the fintech and finservices worlds.
M1 is an interesting company, bringing together a number of products to form a single platform. Its hybrid nature makes comparing its AUM to other companies’ histories a bit dicey. Still, for reference, Wealthfront, a roboadvisor, announced that it started 2013 with AUM of $100 million, and closed that year with $538 million. By mid-2014, Wealthfront had $1 billion AUM. Today it has over $20 billion.
So, the numbers matter, and reaching thresholds can help us understand where a company is in its maturity cycle.
Let’s talk about M1 Finance’s AUM growth, its revenue growth and its product model. It’s a neat company with a history of efficient growth.
We’ll start with product, as how the company approaches its feature-set helps explain how the service is priced, which in turn helps us grok the company’s growth.
M1 is not a roboadvisor, or a simple neobank, or a lending product; it’s all three at once, providing effectively the digital equivalent of a full-service bank, admittedly in the form of an online experience instead of a brick-and-mortar outlet. M1 users can open investment accounts, checking accounts, get a debit card and borrow money against their investment portfolios; it’s a cohesive feature set.
And one that lets M1 price its products lower as a group than it could individually. During a call with M1’s CEO Brian Barnes about the company’s AUM milestone, the executive connected the company’s long-term vision to its ability to price aggressively. (All fintechs are expanding their platforms, it’s worth noting, meaning that, in time, nearly every fintech player will offer an array of services; Wealthfront, famous for its work in roboadvising, now also offers savings and borrowing capabilities.)
Barnes said that M1 has long wanted to “manage the bulk of [its users’] financial assets, not create a sort of low-friction acquisition hook” to bring in smaller-dollar accounts. This, in turn, means that M1 can have higher per-user sums on its books, which, it appears, helped the company reduce prices on a per-product basis.
Here’s Barnes connecting per-account totals to pricing:
That’s neat! And folks with lots of money expect low fees, especially in the Robinhood-era, so the setup probably helps with attracting users.
Summing so far, M1 runs a broad set of financial products, attracting more dollars-per-user than other companies, perhaps, which lets it charge, in its view, lower prices.
How low? Barnes told TechCrunch that his company is “building [its] business model to make 1% of assets we manage [into] top line. So every billion bucks on the platform will be 10 million dollars in recurring revenue. And it is a relatively linear relationship.” The CEO later extended the point, saying that when his firm has $10 billion in AUM, it will generate $100 million.
This means that as M1 scales, we’ll be able to know with reasonable confidence how much revenue it’s driving.
The company charges in the manner you’d expect, with incomes from loaning money, interchange and a SaaS-product called M1 Plus that lowers some fees and provides interest on checking accounts, costing $125 yearly.
Now that M1 is big enough to matter, it has to double, and then double again. We’ll know how well that’s going based on how quickly the company reaches the $2 billion mark.
Posted: 26 Feb 2020 11:56 AM PST
Up, up, down, down, left, right, left, right, B, A, then start. Sound familiar? The Konami Code, as this sequence came to be known, is one of the most recognizable artifacts of an earlier era of gaming. Kazuhisa Hashimoto, its creator, has used up the last of his 30 lives.
Hashimoto was a programmer at Konami, and created the code during the development of one of Konami’s best-known games of the 8-bit era: Gradius. Anyone who played it will remember the crushing difficulty of this iconic side-scrolling shooter.
Even the developers, it turns out, found it a bit of a hassle to get through repeatedly for testing purposes. That’s why during the porting process from arcade to NES, Hashimoto made himself a bit of a shortcut to make things a bit easier for himself.
He created a special command that would award the player the most crucial items for surviving the game’s challenges. The sequence to activate it needed to be easy for him to remember during his many playthroughs, but extremely unlikely for a player to input by accident. And so he settled on the well-known “up, up, down, down, left, right, left, right, B, A” — after which is usually appended “start,” since the code is often entered while paused or at the title screen.
Fate intervened here and the code, which was meant to be removed before the team wrapped up, was forgotten about and ended up in the shipping product. Somehow word got out about the code (who knows how such things transpired in the ’80s — probably it was published in Nintendo Power) and, given the extreme difficulty of the game, its necessity led to the code being adopted by pretty much everyone who bought Gradius.
And so millions of kids who grew up in the ’80s and ’90s learned the Konami Code by heart, though its effects differed from game to game, it generally made things considerably easier. For instance, in the infamous (and still amazing) Contra for NES, the code gives the player 30 lives, which honestly is about the bare minimum necessary to complete that brutal game.
The code persisted for many years and across generations, though it also began to mutate — in Gradius III for SNES the code caused the player’s ship to self-destruct, as if telling them that cheaters never prosper. Even games by other publishers used the code, as a joke or in earnest.
Soon the Konami Code was a staple of geek culture. I myself owned a shirt with the code on it, and listened to a band by that name. It showed up in TV, movies, anywhere an ’80s kid had a chance to slip it in. Even if it wasn’t used by name or with the exact sequence, the code became shorthand for all other cheat codes. Hashimoto had unknowingly created a proto-meme that infiltrated gaming culture worldwide, becoming one of the most widely recognizable aspects of it for decades to come.
All because he found his own game too hard to play.
Those were the days when development teams were on the order of 10-20 people, and the choices of a single person could change everything. These days a cheat code would probably have to be approved and playtested during alpha and beta, and shared with strategic partners for the printed strategy guides well ahead of release.
Hashimoto’s contribution to the gaming world was an accident, but on no account does that downplay his or the code’s importance. He represented the lasting power of an earlier era of gaming and game creation, and accident or not, his legacy is a powerful one.
Posted: 26 Feb 2020 11:02 AM PST
Cartesiam, a startup that aims to bring machine learning to edge devices powered by microcontrollers, has launched a new tool for developers who want an easier way to build services for these devices. The new NanoEdge AI Studio is the first IDE specifically designed for enabling machine learning and inferencing on Arm Cortex-M microcontrollers, which power billions of devices already.
As Cartesiam GM Marc Dupaquier, who co-founded the company in 2016, told me, the company works very closely with Arm, given that both have a vested interest in having developers create new features for these devices. He noted that while the first wave of IoT was all about sending data to the cloud, that has now shifted and most companies now want to limit the amount of data they send out and do a lot more on the device itself. And that’s pretty much one of the founding theses of Cartesiam. “It’s just absurd to send all this data — which, by the way, also exposes the device from a security standpoint,” he said. “What if we could do it much closer to the device itself?”
The company first bet on Intel’s short-lived Curie SoC platform. That obviously didn’t work out all that well, given that Intel axed support for Curie in 2017. Since then, Cartesiam has focused on the Cortex-M platform, which worked out for the better, given how ubiquitous it has become. Since we’re talking about low-powered microcontrollers, though, it’s worth noting that we’re not talking about face recognition or natural language understanding here. Instead, using machine learning on these devices is more about making objects a little bit smarter and, especially in an industrial use case, detecting abnormalities or figuring out when it’s time to do preventive maintenance.
Today, Cartesiam already works with many large corporations that build Cortex-M-based devices. The NanoEdge Studio makes this development work far easier, though. “Developing a smart object must be simple, rapid and affordable — and today, it is not, so we are trying to change it,” said Dupaquier. But the company isn’t trying to pitch its product to data scientists, he stressed. “Our target is not the data scientists. We are actually not smart enough for that. But we are unbelievably smart for the embedded designer. We will resolve 99% of their problems.” He argues that Cartesiam reduced time to market by a factor of 20 to 50, “because you can get your solution running in days, not in multiple years.”
One nifty feature of the NanoEdge Studio is that it automatically tries to find the best algorithm for a given combination of sensors and use cases and the libraries it generates are extremely small and use somewhere between 4K to 16K of RAM.
NanoEdge Studio for both Windows and Linux is now generally available. Pricing starts at €690/month for a single user or €2,490/month for teams.
Posted: 26 Feb 2020 10:44 AM PST
Last November, Twitter rolled out its Hide Replies feature to all users worldwide. The feature, largely designed to lessen the power of online trolls to disrupt conversations, lets users decide which replies to their tweets are placed behind an extra click. Today, Twitter is making Hide Replies available to its developer community, allowing for the creation of tools that help people hide the replies to their tweets faster and more efficiently, says Twitter.
These sorts of tools will be of particular interest to businesses and brands who maintain a Twitter presence, but whose accounts often get too many replies to tweets to properly manage on an individual basis. With Hide Replies now available as a new API endpoint, developers can create tools that automatically hide disruptive tweets based on factors important to their customers — like tweets that include certain prohibited keywords or those that score high for being toxic, for example.
Ahead of today’s launch, Twitter worked with a small number of developers who are now releasing tools that take advantage of the added functionality.
Jigsaw, an Alphabet-owned company tackling the worst of the web, has integrated Twitter’s new endpoint with its Perspective API, which uses A.I. to score tweets based on their toxicity. The integration will automatically hide replies that exceed a certain toxic threshold (.94), freeing up the time it would otherwise take to comb through replies manually.
Dara Oladosu, the creator of the popular app QuotedReplies, also used the endpoint to build a new app called Hide Unwanted Replies. The app today automatically hides replies by keywords or Twitter handles. Soon, it will add support for hiding replies from likely troll or bot accounts — including tweets from user accounts created too recently or from accounts with few followers.
Hide Replies has been one of Twitter’s more controversial launches to date, as it could potentially allow users to silence critics or stifle dissent even when warranted — such as in the case of refuting misinformation or propaganda, for example. Others argue it’s not really helping address online abuse; the abuse still occurs, but in the shadows. One organization even recently leveraged Hidden Replies for a clever online campaign about how domestic violence goes unseen which further illustrates this problem.
Nevertheless, adoption of Hide Replies is growing, with organizations like the CIA even leveraging it on some tweets.
The new Twitter API endpoint for Hide Replies is available today to all developers in a production-ready form, Twitter says, initially through Twitter Developer Labs. This program launched last year to serve as a way for developers to try out Twitter’s latest APIs ahead of their wider release and offer feedback. Participation in Twitter Developer Labs is free, but interested developers have to sign up using an approved developer account. Twitter is also inviting developers building with the new endpoint to collaborate with the company by way of the community forums.
Based on early feedback from the first testers, Twitter says it’s already making a few changes to the endpoint including support to unhide replies via the endpoint, a higher rate limit to support high-volume use cases, and a way to retrieve a list of replies that indicate if they’re hidden or not.
Posted: 26 Feb 2020 10:40 AM PST
TechCrunch has learned that $28 million-funded crypto startup Tagomi will be the newest member of the Libra Association that governs the Facebook-backed Libra stablecoin. A formal announcement is slated for Friday or next week.
Tagomi offers a platform that helps large traders and funds easily access cryptocurrency markets. The news comes days after Libra added Shopify, a reversal of dwindling membership after major partners like Visa, PayPal and Stripe dropped out late last year.
We’ve reached out to the Libra Association and have been promised a response by Facebook’s communications team.
Joining Libra means Tagomi will be expected to contribute at least $10 million toward developing the cryptocurrency, with that investment eligible to reap dividends from interest earned on money kept in the Libra Reserve. Tagomi will also operate a node that validates transactions coming through the Libra blockchain.
Tagomi was founded by Jennifer Campbell, a former investor at Union Square Ventures, which is also a Libra Association Member. The company has 25 employees across five offices. Tagomi will be the 22nd member of the Libra Association, according to information from the startup’s press representative, who was apparently supposed to hold this news until later. “Tagomi is joining the Libra Foundation and Jennifer will be the newest member,” they emailed TechCrunch. We’ll update this story following our interview with Campbell tomorrow.
Campbell and Tagomi will offer technical and policy support to Libra in an effort to make the cryptocurrency more safe and compliant with international law. That will be critical for the Libra Association to get the green light from regulators for a launch in 2020 like it originally planned. Lawmakers in the U.S. and EU have slammed Libra in hearings and the press over its potential to facilitate money laundering, harm privacy and destabilize the global financial system.
The full membership of the Libra Association is now:
Facebook's Calibra, Tagomi, Shopify, PayU, Farfetch, Lyft, Spotify, Uber, Illiad SA, Anchorage, Bison Trails, Coinbase, Xapo, Andreessen Horowitz, Union Square Ventures, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Creative Destruction Lab, Kiva, Mercy Corps, Women's World Banking.
Vodafone, Visa, Mastercard, Stripe, PayPal, Mercado Pago, Bookings Holdings, eBay.
Posted: 26 Feb 2020 10:32 AM PST
Yesterday was a big day for executive moves, with Bob Iger stepping down as Disney CEO and Keith Block stepping down as Salesforce co-CEO. Meanwhile, Facebook has acquired another VR game studio and the owner of The Players’ Tribune has raised more funding. Here’s your Daily Crunch for February 26, 2020.
The Walt Disney Company announced yesterday that Robert Iger, the company's long-time CEO who ushered in the company's lush franchise and entertainment platform profits, will step down immediately as chief executive. Bob Chapek, a long-time senior exec at the company who most recently held the position of chairman of Disney Parks, Experiences and Products, will succeed him.
In an email to employees, Iger pointed to the successful launch of Disney’s flagship streaming service, and its acquisition of 21st Century Fox, writing, “With these key endeavors well underway, I believe it's the right time to transition to a new CEO and I believe Bob is absolutely the right person to assume this role and lead our company in this next pivotal period.”
Block stepped into the co-CEO role in 2018, after a long career at the company that saw him become vice chairman, president and director before he took this position. His departure leaves company founder Marc Benioff as Salesforce’s sole CEO and chair.
Facebook announced that it has acquired Bay Area VR studio Sanzaru Games, the developer of "Asgard's Wrath," considered by many enthusiasts to be one of the Oculus Rift's best games. Facebook says the studio will continue to operate its offices in the U.S. and Canada, with "the vast majority" of employees coming aboard post-acquisition.
Minute Media — which owns 90min.com, FanSided, The Players' Tribune, Mental Floss and other online properties — brings in user-generated content across its largely sports-focused sites, which it then syndicates to third-party publishing partners.
Recently, Twilio CEO Jeff Lawson shared a company board deck from March 2010. Now we’ve analyzed it for you, using the snapshot of Twilio's history to illustrate how far the company has come in the last decade. (Extra Crunch membership required.)
Founder and CEO Timothy Yu said Snapask will expand into Vietnam and focus on markets in Southeast Asia, where there is a high demand for tutoring and other private education services. It also will open regional headquarters in Singapore and develop video content and analytics products for its platform.
At the core of Leap 2 is D-Wave's new hybrid solver that can handle complex problems with up to 10,000 variables. As a hybrid system, D-Wave uses both classical and quantum hardware to solve these problems.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.
Posted: 26 Feb 2020 10:29 AM PST
One of the biggest roadblocks to reducing costs in the American healthcare system is the system’s inherent lack of transparency.
Most healthcare networks and hospital systems can’t even accurately account for the doctors they manage and which insurance plans those doctors accept — let alone how good those doctors actually are at providing care, according to Ribbon Health chief executive Nate Maslak.
The former healthcare consultant founded Ribbon Health to address just that issue, and the company has raised $10.25 million in new financing to roll out its software services to a broader network of payers, providers and digital health companies.
The new financing was led by Andreessen Horowitz, and included Y Combinator and the New York-based investment firm BoxGroup. Individual healthcare executives like Nat Turner, the chief executive of Flatiron Health; Vivek Garipalli, chief executive and co-founder of Clover Health; and Eric Roza, the former chief executive of DataLogix, also participated in the financing.
It’s the first deal for Andreessen’s newest healthcare-focused partner, Julie Yoo, and is in an area with which Yoo is quite familiar. The former serial healthcare entrepreneur developed a similar business to tackle better data collection and delivery for hospitals at Kyruus.
Taking an API -based approach, Ribbon Health is building on the Kyruus approach, Yoo said, with the potential to expand across the entire breadth of the American healthcare system.
Simply, Ribbon Health is trying to create an accurate database of what doctors and health plans have, which specializations offer their services to which insurance providers, and produce the best outcomes for patients.
“$700 billion wasted because of poor decisions,” said Maslak. “The information not flowing to the right place at the right time. Over a third of healthcare spending is wasted and we think that over half is data-addressable.”
"The majority of decisions in health care rely on data about a provider or health plan, yet our industry lacks the systematic infrastructure to centralize this information and contextualize it for those who need it. There is a clear need for a single platform that can provide comprehensive, up-to-date data to enable informed decision making across health care, and we believe Ribbon is poised to lead in this space," said Yoo, in a statement.
Along with the new financing, Ribbon also unveiled a tool that provides cost and quality information for patients to understand their potential out-of-pocket cost estimates based on their deductible, plan design and provider prices.
"So much of the innovation in health care relies on accurate data. Our goal is to provide these companies the critical data infrastructure needed to improve quality of care, health outcomes, and control costs," said Nate Fox, co-founder and chief technology officer at Ribbon Health, in a statement. "Our platform and seamless API make it easy for customers to trust us to deliver the most comprehensive, accurate data, allowing them to focus on what they do best on the front lines of health care."
“Provider data is a basic building block of every healthcare transaction,” said Yoo. “Whether it's you or I trying to enroll… or referral claim processing… there are tens of billions of transactions, all of which require information about a provider.”
Posted: 26 Feb 2020 10:00 AM PST
This morning, Y Combinator is publishing a 70-page Series A guide based on its work with 190 YC companies over the last couple of years. It’s part of an initiative launched in 2018 to help these alums understand how Series A rounds work — and how to make them work to their advantage.
The program is led by YC partner Aaron Harris, with whom we talked at the program’s launch and who we caught up with again earlier this week to find out what’s in the guide, and why — given the many related posts that YC publishes on a regular basis — the outfit felt the need to put something so massive together. Excerpts from that chat follow.
TC: You’ve been working expressly with companies on their Series A rounds for a couple of years. What are some of the misconceptions around how to land these financings?
AH: I had this idea that Series A rounds were understood on the investor side — that they are looking for ARR, plus profit, then comes funding. But the metrics that people like to talk about, they’re really meaningless. We’ve seen companies funded with $200,000 in ARR and companies funded with $9 million in ARR. It’s really fundamentally a bet on what the investor thinks the future looks like based on the founder and what the business is doing at that point. It’s entirely possible to raise on a great story and no metrics, versus great metrics and no story.
TC: If you don’t need to reach a certain financial threshold, then how do you know when it’s time to reach out to Series A investors?
AH: There’s a lot of preparation required [before doing this]; we advise against companies going out to market because of a false signal. Sometimes, an investor wants to give a team a term sheet and they misinterpret this interest and kick off the fundraising process before they’re ready.
TC: How many investors do founders have to meet with on average?
AH: They meet with 30 on average to produce a single term sheet.
TC: Are these preemptive offers then good news?
AH: They aren’t as good as they seem. If an investor preempts your round, you might think you’ve won. But looking at dozens of preemptive rounds versus non-preemptive rounds, we’ve seen that companies wind up giving up 1.4% more in dilution for nearly $1 million less in funding when they do this, and that’s quite a lot of your company. Also, if people want to preempt you, there’s a good chance others will like your company.
TC: This guide is very detailed. For TC readers wondering what they’ll find in it, what’s one example of the advice it includes?
AH: We explain how to work through a diligence request by an investor. Someone might say, ‘Hey, can you give me a month-by-month breakdown of major customers?’ And we’ve seen founders give them a full list of their customers, then the VC calls them, and if the customer is having a bad day or [the VC] reaches the wrong person, that bad reference check can sink a round. It’s really important that founders ask instead about what the VC is trying to learn from the diligence request, then call those customers so they’re ready, You also want to make sure that 15 investors aren’t calling the same customer so that [that person or company] isn’t overwhelmed.
TC: Why make your findings available to everyone if you’re trying to give YC companies an edge?
AH: We’re happy we’ve helped our companies do better at raising A rounds, but we want to help as many founders as we possibly can. It goes back to [Paul Graham’s] online essays for founders to our Startup School, through which we’re helping founders all over the world at no cost. This guide is another step designed to solve that information asymmetry between what founders and investors know.
If YC can help companies build bigger companies and level the playing field, that’s just overall good for the rate of innovation in the world.
TC: A lot of this advice assumes that the economy won’t change. It’s based on two years of findings in a market where things have been clicking along nicely. Have you considered the impact of this coronavirus slowing things down — including the money flow to the Bay Area — and making it harder for startups to get funded?
AH: I don’t think startups are killed by macro trends, unlike tech giants; they’re too small. [PitchBook recently estimated] that there is $100 billion in dry powder [waiting to be invested in startups], but that sounds way too low to me. In 2007, 2008, I was at Bridgewater Associates, and we saw the amount of money sitting on the sidelines in sovereign wealth funds, and various of these have trillions of dollars. And some are investing directly in startups.
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