Business News

Ada nets $19 million Series A to grow its customer service chatbot

Startup News - 2018, December 18 - 9:35pm

Ada is on a mission to build chatbots powered by artificial intelligence. The company today is announcing a $19 million Series A that will go far in helping it reach that goal. The company sees the capital fueling international expansion and launching products into new verticals as well as doubling down on employees.

Chatbots were a buzzword several years back. After the initial buildup and bust, the remaining players in the space are building upon the expectations set early on. Users of chatbots expect services to take actions on their behalf and perform routine functions quickly and efficiently. Likewise, companies are seeking solutions that exceed customer expectations, while offering features that allow the company to scale and expand.

“While many enterprises are choosing to invest in AI and automation,” the company tells TechCrunch, “the recurring investment of time and resources to implement, manage and improve highly technical solutions is diminishing the ROI. In turn, businesses are seeking inclusive and accessible platforms that empower non-technical support teams to build, manage and track the automated customer experience. Even among our own clients, we’ve seen the formation of some of the world’s first automated automation customer experience service (ACX) departments–made up of customer service professionals, not programmers–dedicated to building an automated, AI-powered customer experience. Ada’s automation is changing how people are working and the role of customer service by creating completely new departments, titles, and roles.”

Ada sees the Series A capital to expand the features built-into its products, allowing for a deeper level of personalization and customization — items that will go far with its clients. Launched in 2016 the Toronto-based startup expects to double its staff in the coming months. Right now the company has 70 employees and hopes to be at 140 sometime in 2019.

“2018 was an exciting time for the customer service industry,” Ada said. “Reservations about chatbots and virtual assistants are dissipating, as consumers continue to realize the tremendous benefits of instant, automated, self-service support. Their rising expectations have resulted in an industry-wide shift, with businesses changing from an ‘agent-first’ to an ‘automation-first’ customer strategy.”

The Series A was round was led by FirstMark Capital with participation from Leaders Fund and Burst Capital, as well as returning investors Bessemer, Version One, and computer scientist, Barney Pell.

“Ada’s accessible and scalable platform lets non-technical customer service teams build and manage AI-powered chatbots to automate interactions. Ada has delivered transformational, measurable results to some of the world’s most innovative brands, helping them shift from a reactive, expensive support strategy to a proactive model that reduces customer effort,” said Matt Turck, Managing Director of FirstMark Capital, in a released statement “Ada has played an important role in driving automated customer experience, and we’re confident in the team and the platform to surpass their rapid projected growth.”

The company is based in Toronto. When asked why Toronto, the company points to several data points such as the city’s designation of the fastest growing tech market in North America and the recent announcements of significant new office complexes from Microsoft and Google .

Categories: Business News

A month after $70M, Clearbanc raises $50M fund to front startups ad money

Startup News - 2018, December 18 - 6:59pm

Clearbanc is disrupting startup funding by providing companies cash to buy ads in exchange for a revenue share so they don’t have to sell as much equity to venture capitalists. That idea has proven so appealing that 1000 companies seeking up to $1 billion total hit up Clearbanc since we reported it raised $70 million last month. So to meet the demand of the most eligible startups asking for marketing cash, Clearbanc has just raised a $50 million fund from Seamless co-founder Jason Finger’s new firm Upper90.

If a company’s Facebook ads and Stripe sales metrics show it’s a sure bet, Clearbanc can provide $5,000 to $10 million in funding to pour fuel on the fire. Startups invest that into ad spend, and then split the revenue with Clearbanc from the sales triggered by those ads until it’s paid back plus six percent. Essentially, Clearbanc offers an alternative to selling valuable equity and control to VCs by offering capital based on new data sources traditional banks aren’t looking at.

“In 2018, Clearbanc has funded over $100M into 500 different companies. Our portfolio companies are putting that capital to work and growing at over 100% year over year on average” co-founder and CEO Andrew D’Souza tells us.

Clearbanc co-founder Michele Romanow

To back the investments, Clearbanc raises sub-funds from LPs who earn a return through a slice of the revenue sharing deals. Part of the last $70 million was used to set up the first Clearbanc fund, and the whole $50 million being announced today is the second fund. Clearbanc expects the funds to mature and pay out after just two years, offering LPs a faster but lower-stakes return then typical eight-year VC funds. Upper90’s goal is just those sort of steady gains. “This deal literally came together in 3 weeks from first meeting to close, which was unheard of” D’Souza notes.

He wouldn’t say exactly how much Clearbanc has raised in traditional equity for itself, but revealed most of the $70 million round’s investors were buying standard equity and it has some flexibility in how it applies some of the funding. D’Souza tells me “We have been largely focused on ecommerce companies and subscription ecommerce, but have started doing some deals with enterprise companies.  In 2019 we plan to expand internationally beyond the US and Canada, introduce new verticals, and launch new financial products to help entrepreneurs.”

Previously at McKinsey, D’Souza had raised over $300 million in venture for startups before teaming up on angel investments with Michele Romanow, an investor from Canada’s Shark Tank-style TV show Dragons’ Den. The two have become a romantic couple amidst Clearbanc’s start in 2015. It’s now taken cash from Emergence Capital, Social, Social Capital, CoVenture, Founders Fund, 8VC and others. Groupon co-founder Rajen Ruparell and Third Point hedge fund partner Keri Findley are now joining Clearbanc’s board. “We may take on more traditional equity in the future but we don’t need it right now” D’Souza reveals. “We will raise an additional 250-300M in LP capital next year to continue to meet demand.”

Clearbanc raises $70M to give startups ad money for a rev share

“We are witnessing an evolution of the growth capital business – entrepreneurs do not want to be forced to choose between restrictive equity or debt arrangements to fund their business growth” Cleabanc’s new board member Findley says. “Clearbanc is building a new asset class that is compelling for entrepreneurs as well as investors looking for strong risk-adjusted returns.”

The business model depends on Clearbanc accurately assessing demand for the products for which it’s funding ad buys. If products flop and the startups don’t have much revenue to share, its influx of LPs will dry up. Clearbanc is also vulnerable to changes in the ad market and platforms like Facebook or Google. If ad prices go up or new content formats like Instagram Stories don’t work as well for direct response ecommerce ads, that could also put the squeeze on Clearbanc. “We’re funding customer acquisition across platforms (it just happens to be primarily on Facebook and Google right now)” D’Souza counters. “We’re looking at data across our portfolio and building relationships with emerging platforms to help our companies stay ahead of the curve”

Given the explosion of direct to consumer brands in the wake of successes like Dollar Shave Club’s acquisition for $1 billion, there may be plenty of startups clamoring for Clearbanc’s capital.

Categories: Business News

Atari teams up with some startup to pretend to make blockchain-based games

Startup News - 2018, December 18 - 6:08pm

Animoca Brands will produce and publish blockchain-based versions of RollerCoaster Tycoon and Goon Squad worldwide (excluding China, Hong Kong, Taiwan, and Macau); the new titles will feature the integration of non-fungible tokens (NFTs). The term of the Agreement extends through to 31 March 2022.

In honor of this exciting announcement I’d like to propose the following blockchain-based products available for license to those hunting for a quick buck:

Blockchain! The Musical
Blockchain Cereal
Blockchain Brand Kombucha
Blockchain & Me, An Alien Adventure
Blockchain Whiskey
Blockchain Soda
Blockchain The Miniseries
Blockchain Lingerie – Shake His Merkle Tree
Blockchain Brand Firestarters
Blockchain Pessaries For Her
Blockchain French Ticklers
Blockchain Getaway Cars
Blockchain Killer Apps (rumored not to exist)
Blockchain Airlines
Blockchain Margarita Mix
Blockchain Cowboy Hats
Blockchain Burgers
Blockchain Dance Studios
Blockchain Pants

Categories: Business News

Tonsser scores €5.5M Series A to help discover the next soccer star

Startup News - 2018, December 18 - 6:00pm

Tonsser, the Copenhagen-based startup that offers a “football performance app” aimed at youth soccer players who want to build their own online profile and potentially get discovered by a bigger club, has raised €5.5 million in Series A funding. The round is led by Alven Capital, with participation from existing investors SEED Capital and Wellington Partners

Currently launched in eight European countries — including France, Germany, Denmark, Sweden, and Norway — and claiming more than 800,000 football players registered on the app, Tonsser could well be described as akin to a LinkedIn for youth soccer players, perhaps with a bit of Instagram thrown in, but actually the company’s mission is a lot more defined than that.

As reiterated in a call this week with Peter Holm, the soccer app’s co-founder and CEO, Tonsser wants to make it easier for young soccer talent to become better players by learning and being inspired by each other and through sponsored competitions and soccer skills content. And, perhaps more lofty, the Danish startup wants to make the beautiful game more meritocratic by enabling unsigned talent to be discovered by professional football clubs through the app, and in turn help the soccer industry become more accountable. Impressively, he says this has already started happening.

At the heart of this mission is Tonsser’s increasing emphasis on using technology and data — namely, sporting metrics — to help bubble up undiscovered players. The iOS and Android app’s features include the ability to create your own soccer profile, upload and share photo and videos of match highlights, add various match and team stats, and follow other clubs and players. Tapping into some of this data is Tonsser’s algorithm that gives every player registered on the app a dynamic score.

“After a match the Tonsser algorithm computes a rating for each player based on the individual performance, the performance of the team and ‘Man of the Match’ votes from teammates,” explained Holm in a follow-up email.

“The rating system has been developed and tested over the past 3 years with pro licensed coaches and academies to provide the most accurate calculation for each player. Match after match and season after season the rating becomes the reference point for each player and the gateway for leaderboards, awards like Team of the Week and Player of the Season and also for pro trials, scout reports and the chance of getting discovered by clubs and scouts”.

It’s this data — or discovery engine — along with brand partnerships, and sponsored content, competitions and trials (see video below), that forms Tonsser’s business model. The app is free for players and coaches, but scouts pay for special access. Related to this, I’m told that premier League clubs like Huddersfield are now using Tonsser to identify and scout youth talent.

To enhance this in 2019, Tonsser will add integrations with “automated video recordings” using computer vision, enabling players and teams to catch and share their match highlights in a simple way. It is also working on how to accommodate data from wearables to track physical performance and potentially feed this into the Tonsser score.

Meanwhile, Tonsser says the new investment will be used to support growth and to maintain the startup as the leading community for youth players. Holm says that 86 percent of French youth teams from 15-19 are now using Tonsser,. The app will launch in England in Spring 2019 and is preparing a global roll out that will include the U.S. and beyond.

Categories: Business News

YouGov acquires social analytics company Portent.IO

Startup News - 2018, December 18 - 5:45pm

YouGov, the international data and analytics group, has acquired ‘social analytics’ startup Portent.IO, a company that it had previously invested in. Terms of the deal remain undisclosed, although I understand the acquisition includes Portent.IO‘s technology, clients and its team, including its data scientists.

“We’re all staying on and the entire team including myself have 3-year lock-ins,” Portent.IO co-founder and CEO Hamish Brocklebank tells me. “We are also going to be rebranded as ‘YouGov Signal’ and the existing team will continue to run the business — I’ll be MD & founder of YouGov Signal, for example — but with the added operational, administrative and technical support of the broader YouGov family”.

As well as YouGov providing financially backing for Portent.IO, the two firms had also been working together, with Portent.IO utilising YouGov data within its solution, which mainly focussed on the film and television industry. This includes using YouGov’s panel to survey consumers and using YouGov Profiles data to help media teams plan their marketing campaigns by “mining” audiences around movies, programmes, and actors.

Portent.IO’s customer base includes Paramount, Sony, Lionsgate, the BBC, along with other major film studios and a number of TV networks.

“Without trying to be too buzzwordy, we’re a data science-focused social listening and digital media analytics platform,” says Brocklebank. “In short, we track social, news, product reviews and digital data around movies, TV shows, sports teams and now brands across the web and across 40 countries. This data includes text analysis data, view counts of videos, comments, likes, retweets and more”.

Meanwhile, the acquisition is said to enable YouGov to increase the scope of its offering and provide clients with better social monitoring and data science analytics tools. And although Portent.IO’s tech is currently focussed on the entertainment industry, YouGov plans to extend its application across other sectors.

“The platform plugs into YouGov’s wider product suite – complementing its current services, including data products, data services, and custom research – to provide a 360 degree view of marketing campaigns,” says the two companies in a statement.

“Our data science team and advance machine learning NLP tools will be assisting with YouGov’s ongoing data science efforts and a lot of our text classification tools can be applied to their broader market research efforts,” adds Brocklebank. “Our expertise in the film and TV space will [also] help YouGov expand further into that market”.

Categories: Business News

In emerging markets there are no copycats, just budding entrepreneurs

Startup News - 2018, December 18 - 5:30am
Federico Antoni Contributor Federico Antoni is managing partner at ALLVP, an early-stage VC based in Mexico. He is a lecturer in management at the Stanford Graduate School of Business. More posts by this contributor

Every year I teach an MBA course at Stanford about the exciting opportunities for tech investors and entrepreneurs in developing economies. When we designed the syllabus back in 2013, Rocket Internet was still firing on all cylinders on four continents. The unapologetic machine built to copy big American internet companies created billions of dollars for the Samwer brothers and its backers. During Rocket’s golden years, the best startups in the developing economies seemed to inevitably have an original reference in Silicon Valley.

Accordingly, we added a class about the opportunity of replicating business models to seize this information arbitrage. Call it the second-mover advantage.

Despite my conviction about the model, the copycat word  —  short for replicating startups and attached to these ventures  —  annoyed me from the start. More than a term to describe a straightforward recipe to launch, I see it as an unconscious way to belittle an entire group of hard-charging founders and investors.

Indeed, while in foreign eyes, we have been building a Mexican Kickstarter, a Middle Eastern Uber, an Indian Amazon or a Colombian Postmates, I argue visionary founders are taking a simple idea that already exists and creating new worlds.

On the internet, there are Einsteins and there are Bob the Builders. I’m Bob the Builder. Oliver Samwer, founder of Rocket Internet

Gateway to entrepreneurship

While impact is the final goal, founders can approach the journey in different ways. The most common approach in the startup world is to use the business method, or more pompously, the design thinking methodology. “Fall in love with the problem, not the solution,” mentors keep telling a succession of startup clusters in acceleration programs. The best and “leanest” way to product market fit is by starting small then keep iterating the solution until you nail it.

A second way to start is favored by engineers and scientists: Take a new promising technology or a forgotten molecule, then find a big problem. Keep iterating until you find a problem worth solving, like a hammer looking for a nail.

A third way is starting like painters create, building skills by copying classics, or like a new chef cooks by starting with iconic recipes: replicate a proven idea and iterate until you find traction.

Until a few years ago it was ostensibly the only way to scale in developing economies. The model helped raise local capital from risk-averse investors who needed reassurance. The playbook to scale was unfolding a couple of years ahead and served as a guide to founders without previous startup experience and no local role models. The potential acquirer was identified and sometimes contacted in advance. Founders weren’t crazy and investors weren’t dumb.

Replicating a business model has served in emerging ecosystems as the gateway to entrepreneurship and venture investing.

Photo courtesy of Flickr/A_Marga

Riding the next wave

According to conventional wisdom, new ecosystems around the world grow through the following three stages, be them in developing economies or more developed countries. First, local and foreign entrepreneurs replicate successful models focused on local markets. Then as the ecosystem evolves, founders start applying existing technologies to solve local problems. Finally, as the tech space matures, new technologies begin to flourish.

In my opinion, those stages never happen sequentially as stated by ecosystem observers. Successful startups that started with a foreign inspiration can outgrow the master. If they are not bought into submission by the first mover, some of the most famous copycats reinvented the original and made it better: Mercado Libre is much more relevant in the e-commerce space than eBay . Flipkart is hardly an Amazon, not to mention WeChat. These companies are in turn some of the most prolific tech innovators on the globe. Truly ecosystems evolve organically in unique ways reflecting their history, geopolitical environment, economic structure and cultural features.

Two ways to defend the status quo: “It’s been done before” and “It’s never been done before.” –Thibault @Kpaxs

In defense of talent

Recently, it’s hard to hear American observers use the word copycat to describe any American company. After all, Guilt replicated VentesPrivees and Lime, Chinese dockless bike sharing and many more examples. All American startups are treated as innovators while the rest as mere followers.

Recently, Chinese or Indian startups seem to be given the benefit of the doubt regarding their originality. Is it because these regions have become more innovative? Maybe. But it’s also because these ecosystems have gained the respect of Silicon Valley. Indeed, Chinese consumer tech surpassed decisively the U.S. as the most important country in terms of investments.

So here’s my humble suggestion to our wealthier and more accomplished colleagues: stop using the c-word with founders. It’s offensive. Most probably, these founders are facing more challenges to build their companies and lower odds for success that the first mover. If anything, they have more merit than the originals.

As for founders, when they call you a me-too, remember all teams started somewhere, somehow. In fact, most started like Bob the Builder before turning into Einsteins. The truth is, it doesn’t matter where you start. You can start by applying a new technology or protocol. You can start with a problem you feel passionate about. You can start by replicating a business model. It doesn’t really matter if you take a big swing at the future and trust you will figure out how to make it happen. It doesn’t matter what label they use while you change the world for the better.

Categories: Business News

Moonbug nabs $145M to buy up kids’ digital media brands

Startup News - 2018, December 18 - 4:56am

Moonbug, a kid-focused media business founded by a pair of entertainment executives, has brought in a $145 million Series A investment led by The Raine Group, a merchant bank that supports technology, media and telecom efforts.

Venture capital firms Felix Capital and Fertitta Capital also participated in the financing.

Moonbug, headquartered in London, acquires and distributes media content made for kids. Recently, the company completed its first IP acquisition of Little Baby Bum, a children’s sing-along show popular on YouTube, Amazon and Netflix. According to a Los Angeles Times report, one of the show’s videos is the 20th most popular video in YouTube history, boasting 2.1 billion views. In total, Moonbug says Little Baby Bum has clocked in 23 billion views across multiple platforms.

With its Series A investment, Moonbug will amp up its M&A activity to expand its portfolio of content that “helps children build essential life skills.” Moonbug chief executive officer René Rechtman, who spent the last three years as the head of digital studios at The Walt Disney Co., says they plan to acquire eight media businesses.

Rechtman and John Robson, a former senior vice president of digital distribution at Paramount Pictures and vice president of global content at HTC, launched Moonbug earlier this year.

“I see an independent creator and I put them in very simple brackets: one is high viewership and engagement and one is quality of IP,” Rechtman told TechCrunch. “If they have both of those, I am very interested.”

Categories: Business News

Lightspeed is raising its largest China fund yet

Startup News - 2018, December 18 - 4:52am

Lightspeed China Partners, the China-focused affiliate of Silicon Valley-based Lightspeed Venture Partners, has set a $360 million target for its fourth flagship venture fund, according to a document filed with the U.S. Securities and Exchange Commission today.

If the target is reached, the fund will be Lightspeed China’s largest yet, per PitchBook. Lightspeed China’s previous two funds each closed on $260 million. The VC raised $168 million for its debut fund in 2013.

Lightspeed China is led by David Mi (pictured). Mi, an investor in multiple billion-dollar Chinese companies, was previously the director of corporate development at Google, where he helped lead the search giant’s investment in Baidu. He joined Lightspeed in 2008 and established the firm’s China presence in 2011. Yan Han, a long-time Lightspeed investor and a founding partner of the firm’s Chinese branch, is also listed on the filing.

Lightspeed China has backed e-commerce platform Pingduoduo and loan provider Rong360, a pair of Chinese “unicorns” that both completed U.S. initial public offerings since 2017. Typically, the firm makes early-stage investments in the internet, mobile and enterprise spaces. 

Earlier this year, Lightspeed Venture Partners filed to raise a record $1.8 billion in new capital commitments. This month, it tacked five new partners onto its consumer and enterprise investment teams, including Slack’s former head of growth and Twitter’s former vice president of global business development.

Lightspeed didn’t immediately respond to a request for comment.

The incredible rise of Pinduoduo, China’s newest force in e-commerce

Categories: Business News

N26 launches its premium offering in the UK

Startup News - 2018, December 18 - 1:22am

Fintech startup N26 recently launched in the U.K. with a single product offering. You could sign up to a free account that gives you free payments around the world, but no insurance and no free withdrawals in foreign currencies.

The company just added a second tier to its lineup in the U.K. And N26 is choosing to focus on N26 Metal in the U.K. You can now sign up to a Metal account for £14.90 per month (€16.59).

In other N26 markets, people can currently subscribe to N26 Black for €9.90 per month or N26 Metal for €16.90 per month. It’s interesting to see that N26 is using its fresh start in the U.K. to simplify its offering and target premium customers. The startup can still change its mind and launch N26 Black later down the road.

Basic customers can pay anywhere in the world without any foreign fee. The company uses Mastercard’s foreign exchange rates and doesn’t add anything on top. But ATM withdrawals in a foreign currency still cost 1.7 percent of the total amount.

Metal customers get the same perks in the U.K. and other European countries, such as foreign ATM withdrawals with no fee, a travel insurance package from Allianz and dedicated customer support.

N26 also provides partner offerings for N26 Metal subscribers. For instance, you can work from a WeWork office for free one day per month. Deals vary from one country to another; British customers get airport lounge access thanks to LoungeKey.

Your mileage may vary depending on your favorite airport, as LoungeKey doesn’t have a lounge in all terminals in all airports around the world. Now let’s see if N26 users outside of the U.K. will get a similar service in the future.

Categories: Business News

RightHand Robotics grabs $23 million in funding

Startup News - 2018, December 18 - 1:05am

RightHand Robotics announced a $23 million Series B this week. That brings the pick and place robotic arm manufacturer’s total funding up to around $34 million, including last year’s $8 million Series A.

The robotics startup has impressed investors with the dexterity and speed of its robotic picking system, having recruited some big VC names along the way. This latest round is led by Menlo Ventures, along with investments from GV (nee Google Ventures) joining the likes of existing investors Playground Global, Dream Incubator and Matrix partners.

Picking and placing has been a difficult robotics problem and one that’s only become more pronounced with the growth of fulfillment centers from the likes of Amazon. The online mega-retailer purchased logistics robotics company Kiva Systems for $775 million back in 2012, and has been rumored to be working on its own pick and place system.

As part of this round, former Kiva CEO Mick Mountz will be joining RightHand’s board of directors. “RightHand is picking up where we left off,” he said in a press release tied to the news. “Customers saw products coming directly to operators for picking and packing and would ask: ‘Why don’t you also automate this step with a robotic arm and gripper?’ But that was a difficult problem that we knew would require years of research and technical breakthroughs.”

RightHand will be using the funding to build out its technical and business teams.

Categories: Business News

But not a broken man

Startup News - 2018, December 17 - 11:14pm

I’ve been living for the past few years in a limbo between journalist and entrepreneur, trying to build startups the way I saw them being built onstage at Disrupt and discovering that my skill and will to win are no match against the world. That’s fine. These days I’ll take it.

But for a few minutes in Chicago last May, I couldn’t.

That day was normal for me. I woke up, went and met some folks at a cool startup, visited a great guitar store and had a mediocre deep dish pizza. I then went to an event where I gave my usual rant (and pissed people off) about how smaller market cities are having huge trouble innovating, and then went out with some good people to talk about cool stuff.

Then, on my way back to the hotel, I looked both ways on a busy, dark street and thought long and hard about stepping in front of a Chicago city bus.

Why not? I wasn’t helping. My first startup had failed and everything else was a slow burn. I wasn’t thinking about my family. I wasn’t thinking about my existence on a global scale but on a local one. I could turn off this brain once and for all and I thought everyone would be happier.

I got help. I discovered I was anhedonic and chronically depressed — I couldn’t feel happiness. I had been traveling through life in a haze. I drank a lot to hide this from myself — after all, if you’re hosed you don’t worry about not feeling anything — and I traveled obsessively and spoke onstage so I could feel something, anything, better than the flat grey note that played constantly in my head.

I feel better now. I have a lot of digging to do. I wonder if you’re in the same position.

I’m noodling on this because of Colin Kroll. The specifics of Kroll’s story are unclear, but an overdose is definitely in the mental illness wheelhouse. Maybe he was having a blast, flush on investor money and celebrating a win. I won’t judge.

But he’s dead. And I don’t want you to follow him.

Any of us could end up gone for any number of reasons associated with entrepreneurship. There is the stress, the overwork. There is the sense of failure even amid the greatest successes. There is deep frustration and deep anger. Entrepreneurs are high performers who are used to getting As in life. When that same life gives you a D-, you feel that it’s your fault, that your dreams of success are gold foil over a rotten sweet.

This isn’t true. We all have to work to remind ourselves of this. A startup, like any creative endeavor, is doomed to fail, but its very existence is a miracle. We do it not because we want to make millions but because we want to fix something broken in the world. I write to share cool things with you all. I make startups to help bring the next level of innovation. But I let these efforts get in the way of life. I thought my failures were systemic, that I was proving that I was a failure over and over again and that I had visible proof through my failed efforts. My startup wasn’t me, but I didn’t know that.

In the dull, hot blush of a depressive episode, the embarrassing moment you look at yourself and see nothing but junk, we have to remember that we are making real efforts, building real things, moving way ahead of the pack. The world will catch up.

There are lots of ways to get help. Ask around. You’ll be surprised to hear that your friends and family know great shrinks who can help. You’ll be surprised that going to meetings or talking to someone on the phone can be a great way to assuage mental grief. You’ll be surprised to know that there are people out there for you. Email me if you need help: john@techcrunch.com

This shit is hard. Don’t make it harder by letting it fester.

The National Suicide Prevention Lifeline is a 24-hour, toll-free, confidential suicide prevention hotline available to anyone in suicidal crisis or emotional distress. It provides Spanish-speaking counselors, as well as options for deaf and hard of hearing individuals. It is only available in the United States. A 24-hour Online Chat in partnership with Contact USA is also available.

  • The National Suicide Prevention Lifeline can be reached at 1-800-273-8255.
  • The National Suicide Prevention Lifeline (ESP) can be reached at 1-888-628-9454.
  • The National Suicide Prevention Lifeline (Deaf & Hard of Hearing Options) can be reached at 1-800-799-4889.
Categories: Business News

B-Social raises £3.2M seed round to begin building a ‘social’ bank

Startup News - 2018, December 17 - 11:04pm

B-Social, a London fintech that currently offers a “social finance” app and beta debit Mastercard, has raised £3.2 million in seed-round funding from undisclosed high-net-worth individuals. However, the fundraise is just the first step in a journey in which B-Social wants to eventually become a fully licensed bank that reimagines banking around everyday social interactions.

As it exists today, the B-Social app and accompanying card enables users to have control over everyday spending, track expenditures and create groups between friends to split bills and record settlements. It’s currently in the hands of a limited number of beta testers, spanning employees, investors, friends and family, with plans for a wider U.K. launch in February next year.

“We recognise that almost all financial transactions are inherently social,” B-Social co-founder and CEO Nazim Valimahomed tells me. “We want to change the relationship people have with money by helping them overcome the anxiety, awkwardness and wasted time when they engage with their social finances. We are doing that by building a digital bank that truly accommodates the way people live their lives and is dedicated to connecting a person’s finances to their social world.”

The idea was born in part out of Valimahomed’s own frustrations and is informed by his belief that individuals are often a bank themselves, lending and borrowing to friends and family by making shared purchases and then getting paid back.

“A simple example might be that you pay for flights for two or more people and then get paid back individually,” he says. “For multiple transactions, this becomes complex, often resulting in the trip organiser having to create a spreadsheet to work out what people owe across multiple transactions.”

To simplify this problem, B-Social wants to let you to make purchases with your card, which are flagged as an expense on behalf of a group of individuals. From here the bank to be will enable all members of a group — and where groups can be ad hoc and temporary or more long-term — to continuously see who is owed how much and to get paid back easily within the app and record settlements.

Dubbing this future proposition as the seeds of a “social bank,” the B-Social CEO cites competitors as traditional high-street banks that currently dominate the U.K. consumer market (the so-called big 5 have around 87 percent market share in the U.K.).

“We are aiming at winning a part of their market share by targeting customers looking for a bank as social as they are that offers a unique digital experience in order to help change the banking ecosystem forever,” Valimahomed tells me, although he also concedes that challengers such as Monzo, N26, Starling and Revolut have also built some basic social features into their apps.

“Our entire technology and product focus is to build a bank from scratch through a social lens,” he says.

Categories: Business News

Careem launches delivery service as it nears closing a massive round

Startup News - 2018, December 17 - 10:09pm

The ride-hailing giant Careem is now in the delivery business as the company seeks new verticals in its ever-increasing fight against other services in the Middle East including Uber. Starting with food delivery in Dhabi and Jeddah, the company sees the delivery service expanding to pharmaceuticals according to a report by Reuters. Careem is investing over $150m into the service.

“We believe the opportunity for deliveries in the region is even bigger than ride-hailing,” Chief Executive and Co-Founder Mudassir Sheikha told Reuters. “It is going to become a very significant part of Careem over time.”

Called Careem Now, the service will operate independently from its ride-hailing business. It will have its own app and Careem is building the service a dedicated call center.

This comes as the company is trying to close a $500m funding round. Back in October, the company announced it had already raised $200m from existing investors. Prior to this announcement, rumors were swirling around the company that several companies including Didi Chuxing could acquire the company.

 

Categories: Business News

K Health raises $25m for its AI-powered primary care platform

Startup News - 2018, December 17 - 9:30pm

K Health, the startup providing consumers with an AI-powered primary care platform, has raised $25 million in series B funding. The round was led by 14W, Comcast Ventures and Mangrove Capital Partners, with participation from Lerer HippeauBoxGroup and Max Ventures – all previous investors from the company’s seed or Series A rounds. Other previous investors include Primary Ventures and Bessemer Venture Partners.

Co-founded and led by former Vroom CEO and Wix co-CEO, Allon Bloch, K Health (previously Kang Health) looks to equip consumers with a free and easy-to-use application that can provide accurate, personalized, data-driven information about their symptoms and health.

“When your child says their head hurts, you can play doctor for the first two questions or so – where does it hurt? How does it hurt?” Bloch explained in a conversation with TechCrunch. “Then it gets complex really quickly. Are they nauseous or vomiting? Did anything unusual happen? Did you come back from a trip somewhere? Doctors then use differential diagnosis to prove that it’s a tension headache vs other things by ruling out a whole list of chronic or unusual conditions based on their deep knowledge sets.”

K Health’s platform, which currently focuses on primary care, effectively looks to perform a simulation and data-driven version of the differential diagnosis process. On the company’s free mobile app, users spend three-to-four minutes answering an average of 21 questions about their background and the symptoms they’re experiencing.

Using a data set of two billion historical health events over the past 20 years – compiled from doctors notes, lab results, hospitalizations, drug statistics and outcome data – K Health is able to compare users to those with similar symptoms and medical histories before zeroing in on a diagnosis. 

With its expansive comparative approach, the platform hopes to offer vastly more thorough, precise and user-specific diagnostic information relative to existing consumer alternatives, like WebMD or – what Bloch calls – “Dr. Google”, which often produce broad, downright frightening, and inaccurate diagnoses. 

Ease and efficiency for both consumers and physicians

Users are able to see cases and diagnoses that had symptoms similar to their own, with K Health notifying users with serious conditions when to consider seeking immediate care. (K Health Press Image / K Health / https://www.khealth.ai)

In addition to pure peace of mind, the utility provided to consumers is clear. With more accurate at-home diagnostic information, users are able to make better preventative health decisions, avoid costly and unnecessary trips to in-person care centers or appointments with telehealth providers, and engage in constructive conversations with physicians when they do opt for in-person consultations.

K Health isn’t looking to replace doctors, and in fact, believes its platform can unlock tremendous value for physicians and the broader healthcare system by enabling better resource allocation. 

Without access to quality, personalized medical information at home, many defer to in-person doctor visits even when it may not be necessary. And with around one primary care physician per 1000 in the US, primary care practitioners are subsequently faced with an overwhelming number of patients and are unable to focus on more complex cases that may require more time and resources. The high volume of patients also forces physicians to allocate budgets for support staff to help interact with patients, collect initial background information and perform less-demanding tasks.

K Health believes that by providing an accurate alternative for those with lighter or more trivial symptoms, it can help lower unnecessary in-person visits, reduce costs for practices and allow physicians to focus on complicated, rare or resource-intensive cases where their expertise can be most useful and where brute machine processing power is less valuable.

The startup is looking to enhance the platform’s symbiotic patient-doctor benefits further in early-2019, when it plans to launch in-app capabilities that allow users to share their AI-driven health conversations directly with physicians, hopefully reducing time spent on information gathering and enabling more-informed treatment.

With K Health’s AI and machine learning capabilities, the platform also gets smarter with every conversation as it captures more outcomes, hopefully enriching the system and becoming more valuable to all parties over time. Initial results seem promising with K Health currently boasting around 500,000 users, most having joined since this past July.

Using access and affordability to improve global health outcomes

With the latest round, the company has raised a total of $37.5 million since its late-2016 founding. K Health plans to use the capital to ramp up marketing efforts, further refine its product and technology, and perform additional research to identify methods for earlier detection and areas outside of primary care where the platform may be valuable.

Longer term, the platform has much broader aspirations of driving better health outcomes, normalizing better preventative health behavior, and creating more efficient and affordable global healthcare systems.

The high costs of the American healthcare system and the impacts they have on health behavior has been well-documented. With heavy copays, premiums and treatment cost, many avoid primary care altogether or opt for more reactionary treatment, leading to worse health outcomes overall.

Issues seen in the American healthcare system are also observable in many emerging market countries with less medical infrastructure. According to the World Health Organization, the international standard for the number of citizens per primary care physician is one for every 1,500 to 2,000 people, with some countries facing much steeper gaps – such as China, where there is only one primary care doctor for every 6,666.

The startup hopes it can help limit the immense costs associated with emerging countries educating millions of doctors for eight-to-ten years and help provide more efficient and accessible healthcare systems much more quickly.

By reducing primary care costs for consumers and operating costs for medical practices, while creating a more convenient diagnostic experience, K Health believes it can improve access to information, ultimately driving earlier detection and better health outcomes for consumers everywhere.

Categories: Business News

Starling’s Chief Platform Officer Megan Caywood has been recruited by Barclays

Startup News - 2018, December 17 - 8:34pm

They say imitation is the highest form of flattery, but in the increasingly competitive world of banking, perhaps poaching your best people also counts. In a move that is bound to raise eyebrows in London’s fintech ecosystem and beyond, Megan Caywood, who up until this week was Starling Bank’s Chief Platform Officer, is joining banking incumbent Barclays.

According to sources, Caywood, who led Starling’s marketplace banking efforts — a key pillar of the challenger bank — handed in her notice two weeks ago, whilst Starling Marketplace partners were informed last week. I understand she is currently on “gardening leave” and will officially become Managing Director, Head of Barclays Consumer Strategy early next year.

With an academic background in cognitive science research, and a Silicon Valley import — having worked at Xero and Intuit in the U.S. — Caywood joined Starling in June 2016 where she soon became an important lieutenant to Starling CEO and founder Anne Boden, often appearing publicly as the second face of the challenger bank. I understand, however, that the pair remain good friends and that Starling threw a leaving party for Caywood last week.

Megan Caywood speaking at a Startup Grind event in London moderated by TechCrunch’s Steve O’Hear

Meanwhile, the move to Barclays is thought to be primarily motivated by the impact Caywood believes she can have at a large bank compared to an upstart, according to a source familiar with her thinking. Caywood has always talked passionately about making financial services work better for consumers and has long-argued that banks working with fintech startups is the best way to achieve this.

Related to this, Caywood’s new title at Barclays makes no reference to marketplaces, even though my fintech sources tell me Barclays is rumoured to be working on more third-party integrations. As a pointer, the incumbent bank has a number of existing partnerships, including with London startup Flux to offer itemised digital receipts and loyalty within the Barclays Launchpad app.

It is also noteworthy that Caywood’s title doesn’t include ‘UK’, and I understand that her remit is going to be international, perhaps expanding across the pond based on her Silicon Valley roots and the fact that she is American.

During her two and a half years at Starling, Caywood helped design and rapidly roll out the Starling Marketplace, which includes an open API and a marketplace of third-party financial services that sit inside of the Starling app. Marketplace partners include Flux, mortgage broker Habito, travel insurance provider Kasko, and investment products Wealthify and Wealthsimple, amongst others.

I’ve reached out to Caywood, who declined to comment, instead referring me to Barclays’ PR.

A Barclays spokesperson said:

“We can confirm that Megan Caywood is joining Barclays as our new Head of Consumer Strategy. Megan brings significant talent and expertise, and we look forward to welcoming her to the bank.”

Categories: Business News

Meeshkan raises €370K for its ‘ChatOps’ bot for training machine learning models

Startup News - 2018, December 17 - 6:00pm

Meeshkan, a Finnish startup that made quite a splash at the recent Slush conference, has quietly raised €370,000 in pre-seed funding to continue developing its “ChatOps” product for machine learning developers.

Deployed on Slack, the bot allows developers to “rapidly stop, restart, fork, tweak, monitor, deploy and test machine learning models” without interrupting the collaborative workflows they are accustomed to or being forced to go back and forth between disparate developer tools.

Under the hood, Meeshkan says it uses patent-pending tech for speedily partitioning of data-flow across distributed infrastructure. Related to this, the burgeoning company is currently partnering with Northeastern University and CUDA to develop “zero-downtime” checkpointing of ML models in TensorFlow and PyTorch.

In an email exchange, Meeshkan founder Mike Solomon explained that training ML models is currently done through command line interfaces and web dashboards, which is not optimum for collaboration. This is because teams typically need to communicate about ML model training, make decisions about models, act on these decisions instantly, and react to push notifications about a job’s status, none of which can conveniently happen through the command line or web dashboards.

“My generation writes less and less code, but we are iterating on it faster and faster with incremental changes,” he says. “In machine learning, this could be a small tweak in the learning rate of a model. In unit testing, this could be covering the corner case of an API that returns null values in certain circumstances. What unites these scenarios is that developers are dealing with externalities, like data or a third-party API, and trying to build fast on top of them. A world-class IDE, while it helps with lots of problems, does not provide much value for these small tweaks. We’ve found that what developers need is a frictionless environment to make the tweak/test/learn loop turn as fast as possible”.

To begin fixing this, Solomon tells me that Meeshkan set out to create a bot on Slack that helps teams monitor and tweak the training of their ML models in realtime. “For ML engineers, we found that they spent hours on Slack discussing what to do with their models but had to resort to arcane and byzantine hacks to apply, document and archive these changes,” he says.

“We made a simple bot where teams can turn their discussions on Slack about things like changing a learning rate or a batch size into action, right from Slack. From this simple idea, the floodgates opened. Developers really quickly let us know what they wanted to control from Slack, some of which is trivial to implement, some of which is profoundly difficult and leads us to uncharted engineering territory”.

Meeshkan has several patent-pending algorithms from the resulting work. Solomon also explained that the same underlying problem exists in continuous integration and “data wrangling” as well, and that the team is developing a suite of products that address this concern.

This includes a second product called unmock.io, which brings the same idea to testing and continuous integration and has seen traction at AWS re:Invent. “We look to be releasing more tools along this line during Q1 of 2018,” he adds.

Meanwhile, Meeshkan’s pre-seed backers include Risto Siilasmaa and Kim Groop (First Fellow Partners), Finnish angel Ali Omar, Christian Jantzen’s Futuristic.vc, and Neil Murray’s The Nordic Web Ventures.

Categories: Business News

Ten pieces of friendly VC advice for when someone wants to buy your company

Startup News - 2018, December 16 - 11:30pm
David Frankel Contributor David Frankel is a managing partner at Founder Collective. More posts by this contributor

I’ve been fortunate to have been part of half a dozen exits this year, and have seen the process work smoothly, and, other times, like a roller coaster, with only the most tenuous connection to the track. Here are 10 bits of advice I’ve distilled from these experiences in the event someone makes you an offer for your startup.

1. Understand the motivations of your acquirer.

The first thing you need to understand is why the acquiring company wants your startup. Do you have a strategic product or technology, a unique team or a sizable revenue run rate? Strategic acquirers, like Google and Facebook, likely want you for your tech, team or sometimes even your user traction. Financial acquirers, like PE firms, care a great deal more about revenue and growth. The motivations of the buyers will likely be the single-biggest influencer of the multiple offered.

It’s also essential to talk price early on. It can be somewhat awkward for less experienced founders to propose a rich valuation for their company, but it’s a critical step toward assessing the seriousness of the discussion. Otherwise, it’s far too easy for an acquirer to put your company through a distracting process for what amounts to an underwhelming offer, or worse, a ploy to learn more about your strategy and product roadmap.

2. Don’t “Test the waters.” Pass, or fully commit.

Going through an M&A process is the single most distracting thing a founder can do to his or her company. If executed poorly, the process can terminally damage the company. I’d strongly advise founders to consider these three points before making a decision:

  • Is now the right time? The decision to sell can be a tough choice for first-time founders. Often the opportunity to sell the company comes just as the process of running it becomes enjoyable. Serial entrepreneurship is a low-percentage game, and this may be the most influential platform a founder will ever have. But the reflex to sell is understandable. Most founders have never had a chance to add millions to their bank accounts overnight. Moreover, there is a team to consider; usually all with mortgages to pay, college funds to shore up and myriad other expenses; their needs should factor into the decision.
  • Is it actually your choice to make? Most investors look at M&A as a sign your company could be even bigger and as an opportunity to put more capital to work. However, when VCs have lost confidence and see a fair offer come in, or they hear a larger competitor is looking at entering your space, they may push you to sell. Of course, the best position to be in is one where you can control your destiny and use profitability as the ultimate BATNA (“best alternative to a negotiated agreement”).
  • How long do you have to stay? In the case of competing offers, you may have limited ability to negotiate price, but other deal terms could be negotiable. One of the most important is the amount of time you have to stay at the company, and how much of the sale price is held in escrow, or dependent on earn-outs.

3. Manage your team.

As soon as you attract interest from an acquirer, start socializing the idea that most M&A deals fall apart — because they do. This is important for two reasons.

First, your executive team will likely start counting their potential gains, and they just may let KPIs key to running the business slip. If the deal fails to close, the senior team will be dejected, demotivated and you may start to hear some mutinous noises. This attitude quickly percolates through the team and can be deadly for the culture. What was supposed to be your moment of triumph can quickly turn into a catastrophe for team morale.

This is typically the toughest part of the M&A process. You need the exec team to execute to close a deal, but you’re running into some of the deepest recesses of human nature, too. Recognize the fact that managing internal expectations is as important as managing the external process.

4. Raise enough money to stay flush for a year.

Assuming you’re selling your company from a position of strength, make sure you have enough capital so that you don’t lose leverage due to a balance sheet lacking cash. I’ve seen too many companies start M&A discussions and take their foot off the gas in the business, only to see the metrics drop and runway shorten, allowing the acquirer to play hardball. In an ideal scenario, you want at least nine months of cash in the bank.

5. Hire a banker.

If you get serious inbound interest, or if you’re at the point where you want to sell your company, hire a banker. Your VCs should be able to introduce you to a few strong firms. Acquisition negotiations are high stakes, and while bankers are expensive, they can help avoid costly rookie mistakes. They also can classically and plausibly play the bad cop to your good cop, which also can contribute positively to your post-merger relations.

My only caveat is that bankers have a playbook and tend not to get creative enough. You can still be additive in helping fill the funnel of potential acquirers, especially if you’ve had communication with unlikely acquirers in the past.

6. Find a second bidder… and a third… and a fourth.

The hardest bit of advice is also the most valuable. Get a second bidder ASAP. It’s Negotiation 101, but without a credible threat of a competitive bid, it is all too easy to be dragged along.

Hopefully, you’ve been talking with other companies in your space as you’ve been building your startup. Now is the time to call your point of contact and warn them that a deal is going down, and if they want in, they need to move quickly.

Until you’re in a position of formal exclusivity, keep talking with potential acquirers. Don’t be afraid to add new suitors late in the game. You’d be amazed at how much info spreads through M&A back channels and you may not even be aware of rivalries that can be extremely useful to your pursuit.

Even when you’re far down the road with an acquirer, if they know you have a fallback plan in mind it can provide valuable leverage as you negotiate key terms. The valuation may be set, but the amount paid upfront versus earnouts, the lock-up period for employees and a multitude of other details can be negotiated more favorably if you have a real alternative. Of course, nothing provides a better alternative than your simply having a growing and profitable business!

7. Start building your data room.

Founders can raise shockingly large sums of money with pitch decks and spreadsheets, but when it comes time to sell your startup for a large sum, the buyer is going to want to get access to documentation, sometimes down to engineering meeting minutes. Financial records, forward-looking models, audit records and any other spreadsheet will be scrutinized. Large acquirers will even want to look at information like HR policies, pay scales and other human resources minutiae. As negotiations progress, you’ll be expected to share almost every detail with the buyer, so start pulling this information together sooner rather than later.

One CEO said that during the peak of diligence, there were more people from the acquirer in his office than employees. Remember to treat your CFO and General Counsel well — chances are high that they get very little rest during this process.

8. Keep your board close, your tiny investors far away.

Founders are in a tough situation in that they’re starving for advice, but they should avoid the temptation to share info about negotiations with those who don’t have alignment. For instance, a small shareholder on the cap table is more likely to blab to the press than a board member whose incentives are the same as yours. We’ve seen deals scuttled because word leaked and the acquirer got cold feet.

Loose lips sink startups.

9. Use leaks when they inevitably happen.

Leaks are annoying and preventable, but if they do happen, try using them as leverage. If the press reports that you’ve been acquired, and you haven’t been, and also haven’t entered a period of exclusivity, try to ensure that other potential bidders take notice. If you’ve been having trouble drumming up interest with potential bidders, a report from Bloomberg, The Wall Street Journal or TechCrunch can spark interest in the way a simple email won’t.

10. Expect sudden radio silence.

There’s a disconnect between how founders perceive a $500 million acquisition and how a giant like Google does. For the founder, this is a life-changing moment, the fruition of a decade of work, a testament to their team’s efforts. For the corp dev person at Google, it’s Tuesday.

This reality means that your deal may get dropped as all hands rush to get a higher-priority, multi-billion dollar transaction over the finish line. It can be terrifying for founders to have what were productive talks go radio silent, but it happens more often than you think. A good banker should be able to back channel and read the tea leaves better than you can. It’s their day job, not yours.

No amount of advice can prepare you for the M&A process, but remember that this could be one of the highest-quality problems you’re likely to experience as a founder. Focus on execution, but feel good about achieving a milestone many entrepreneurs will never experience!

Categories: Business News

The limits of coworking

Startup News - 2018, December 16 - 3:07am

It feels like there’s a WeWork on every street nowadays. Take a walk through midtown Manhattan (please don’t actually) and it might even seem like there are more WeWorks than office buildings.

Consider this an ongoing discussion about Urban Tech, its intersection with regulation, issues of public service, and other complexities that people have full PHDs on. I’m just a bitter, born-and-bred New Yorker trying to figure out why I’ve been stuck in between subway stops for the last 15 minutes, so please reach out with your take on any of these thoughts: @Arman.Tabatabai@techcrunch.com.

Co-working has permeated cities around the world at an astronomical rate. The rise has been so remarkable that even the headline-dominating SoftBank seems willing to bet the success of its colossal Vision Fund on the shift continuing, having poured billions into WeWork – including a recent $4.4 billion top-up that saw the co-working king’s valuation spike to $45 billion.

And there are no signs of the trend slowing down. With growing frequency, new startups are popping up across cities looking to turn under-utilized brick-and-mortar or commercial space into low-cost co-working options.

It’s a strategy spreading through every type of business from retail – where companies like Workbar have helped retailers offer up portions of their stores – to more niche verticals like parking lots – where companies like Campsyte are transforming empty lots into spaces for outdoor co-working and corporate off-sites. Restaurants and bars might even prove most popular for co-working, with startups like Spacious and KettleSpace turning restaurants that are closed during the day into private co-working space during their off-hours.

Before you know it, a startup will be strapping an Aeron chair to the top of a telephone pole and calling it “WirelessWorking”.

But is there a limit to how far co-working can go? Are all of the storefronts, restaurants and open spaces that line city streets going to be filled with MacBooks, cappuccinos and Moleskine notebooks? That might be too tall a task, even for the movement taking over skyscrapers.

The co-working of everything

Photo: Vasyl Dolmatov / iStock via Getty Images

So why is everyone trying to turn your favorite neighborhood dinner spot into a part-time WeWork in the first place? Co-working offers a particularly compelling use case for under-utilized space.

First, co-working falls under the same general commercial zoning categories as most independent businesses and very little additional infrastructure – outside of a few extra power outlets and some decent WiFi – is required to turn a space into an effective replacement for the often crowded and distracting coffee shops used by price-sensitive, lean, remote, or nomadic workers that make up a growing portion of the workforce.

Thus, businesses can list their space at little-to-no cost, without having to deal with structural layout changes that are more likely to arise when dealing with pop-up solutions or event rentals.

On the supply side, these co-working networks don’t have to purchase leases or make capital improvements to convert each space, and so they’re able to offer more square footage per member at a much lower rate than traditional co-working spaces. Spacious, for example, charges a monthly membership fee of $99-$129 dollars for access to its network of vetted restaurants, which is cheap compared to a WeWork desk, which can cost anywhere from $300-$800 per month in New York City.

Customers realize more affordable co-working alternatives, while tight-margin businesses facing increasing rents for under-utilized property are able to pool resources into a network and access a completely new revenue stream at very little cost. The value proposition is proving to be seriously convincing in initial cities – Spacious told the New York Times, that so many restaurants were applying to join the network on their own volition that only five percent of total applicants were ultimately getting accepted.

Basically, the business model here checks a lot of the boxes for successful marketplaces: Acquisition and transaction friction is low for both customers and suppliers, with both seeing real value that didn’t exist previously. Unit economics seem strong, and vetting on both sides of the market creates trust and community. Finally, there’s an observable network effect whereby suppliers benefit from higher occupancy as more customers join the network, while customers benefit from added flexibility as more locations join the network.

… Or just the co-working of some things

Photo: Caiaimage / Robert Daly via Getty Images

So is this the way of the future? The strategy is really compelling, with a creative solution that offers tremendous value to businesses and workers in major cities. But concerns around the scalability of demand make it difficult to picture this phenomenon becoming ubiquitous across cities or something that reaches the scale of a WeWork or large conventional co-working player.

All these companies seem to be competing for a similar demographic, not only with one another, but also with coffee shops, free workspaces, and other flexible co-working options like Croissant, which provides members with access to unused desks and offices in traditional co-working spaces. Like Spacious and KettleSpace, the spaces on Croissant own the property leases and are already built for co-working, so Croissant can still offer comparatively attractive rates.

The offer seems most compelling for someone that is able to work without a stable location and without the amenities offered in traditional co-working or office spaces, and is also price sensitive enough where they would trade those benefits for a lower price. Yet at the same time, they can’t be too price sensitive, where they would prefer working out of free – or close to free – coffee shops instead of paying a monthly membership fee to avoid the frictions that can come with them.

And it seems unclear whether the problem or solution is as poignant outside of high-density cities – let alone outside of high-density areas of high-density cities.

Without density, is the competition for space or traffic in coffee shops and free workspaces still high enough where it’s worth paying a membership fee for? Would the desire for a private working environment, or for a working community, be enough to incentivize membership alone? And in less-dense and more-sprawl oriented cities, members could also face the risk of having to travel significant distances if space isn’t available in nearby locations.

While the emerging workforce is trending towards more remote, agile and nomadic workers that can do more with less, it’s less certain how many will actually fit the profile that opts out of both more costly but stable traditional workspaces, as well as potentially frustrating but free alternatives. And if the lack of density does prove to be an issue, how many of those workers will live in hyper-dense areas, especially if they are price-sensitive and can work and live anywhere?

To be clear, I’m not saying the companies won’t see significant growth – in fact, I think they will. But will the trend of monetizing unused space through co-working come to permeate cities everywhere and do so with meaningful occupancy? Maybe not. That said, there is still a sizable and growing demographic that need these solutions and the value proposition is significant in many major urban areas.

The companies are creating real value, creating more efficient use of wasted space, and fixing a supply-demand issue. And the cultural value of even modestly helping independent businesses keep the lights on seems to outweigh the cultural “damage” some may fear in turning them into part-time co-working spaces.

And lastly, some reading while in transit:
Categories: Business News

Propel raises $12.8M for its free app to manage government benefits

Startup News - 2018, December 15 - 8:03am

Propel, maker of the Fresh EBT app for managing food stamps and other benefits, announced today that it has raised $12.8 million in Series A funding.

Fresh EBT (the EBT stands for the Electronics Transfer Benefit card, which is how food stamp participants receive their benefits) allows users to check their food stamp/SNAP balance and find stores that accept food stamps. Users can also track their spending. The app is free for consumers and government agencies — the company makes money through digital coupons and a job board.

Propel says Fresh EBT is now used by more than 1.5 million Americans each month, and that more than 30,000 people have applied for jobs this year that they discovered through the app. For example, the announcement quotes one user, Tracy B. from Fairland, Virginia — she described Fresh EBT as her “personal financial adviser,” and also said she used it to find discount zoo tickets, and even her current job.

When Propel raised its $4 million seed round last year, founder and CEO Jimmy Chen described his mission as building “a more user-friendly safety net.” He argued that there’s no conflict between Propel’s social mission and its structure as a for-profit business, a position he reiterated in today’s announcement.

“Our investors are world-class experts in their respective fields,” he said. “They share an understanding of the challenges of low-income Americans and a belief that Propel can build a massive business by fighting poverty.”

Those investors include Nyca Partners, which led the round. Andreessen Horowitz, Kleiner Perkins Caufield & Byers, Omidyar Network, Alexa von Tobel and Kevin Durant’s Thirty Five Ventures also participated.

“It’s not hard to see the huge opportunity in building better financial services for low-income people,” said Nyca Managing Partner Hans Morris in a statement. “We just haven’t seen many companies in this space that have an opportunity to have such a large impact at massive scale. That’s why we’re so excited to invest in Propel.”

Propel raises $4M to make the social safety net more tech savvy and user friendly

Categories: Business News

Niantic reportedly raising $200M at $3.9B valuation

Startup News - 2018, December 15 - 4:07am

Pokémon Go creator Niantic is raising a $200 million Series C at a valuation of $3.9 billion according to a report from Katie Roof at the WSJ. The round is expected to be led by IVP with participation from Samsung and aXiomatic Gaming.

The upcoming raise would bring the company’s total funding to $425 million according to Crunchbase. Niantic’s last round was raised at a $3 billion valuation.

TechCrunch has reached out to Niantic for comment.

The gaming startup which has invested significantly in augmented reality technologies is also behind titles such as its recently updated Ingress title and an upcoming Harry Potter mobile game. The company was founded as a startup within Google in 2010 and was spun out as its own entity in 2015, releasing its hit title Pokémon Go the next year.

The company is currently working on its next big augmented reality mobile title Harry Potter: Wizards Unite, aiming to create a proper follow-up hit that can capture the excitement of its Pokémon title. The app’s success will likely be crucial to perceptions that Pokémon Go was more than a fluke breakout success. A release date has not yet been set for the title.

Categories: Business News

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