Business News

Funding Societies, a Southeast Asian lending platform, gets $25M Series B led by Softbank Ventures Korea

Startup News - 2018, April 18 - 12:00pm

Funding Societies co-founders Reynold Wijaya and Kelvin Teo.

Funding Societies, a peer-to-peer lending platform in Southeast Asia, said today that it has raised a $25 million Series B led by Softbank Ventures Korea, the Japanese tech conglomerate’s early-stage venture capital unit. The round included returning investors Sequoia India, which led the Singapore-based startup’s Series A two years ago, Golden Gate Ventures and Alpha JWC Ventures, as well as new backers Qualgro and LINE Ventures.

Funding Societies also said it has raised credit lines from banks and financial institutions to lend to small- to medium-sized businesses. Founded in 2015 by Kelvin Teo and Reynold Wijaya, the startup’s name represents its “vision of financial inclusion in Southeast Asia.”

Its Series B was oversubscribed, says Funding Societies, which operates in Singapore, Indonesia, where it is called Modalku, and Malaysia.

When it announced its $7.5 million Series A in August 2016, Funding Societies had disbursed $8.7 million Singaporean dollars, a number that has since grown to $145 million SGD, chief executive officer Teo tells TechCrunch. Since its launch, the startup has increased its lender base to more than 60,000 and now claims a default rate of less than 1.5%, down from about 2% to 3% two years ago, thanks to improvements in its underwriting model.

In a press statement, Softbank Ventures Korea partner and managing director Sean Lee said the firm “has been actively investing across Southeast Asia. SME digital lending across Southeast Asia is where we saw huge growth potential. Among many players, we were most impressed with Funding Societies for what it has achieved in a short period of time and its potential to continue to become the number one player.”

Though Teo says Funding Societies is “always exploring other markets, there is still tons of work we need to do in our current three markets.” Despite its considerable growth over the past three years, the startup’s mantra is “slow and steady,” a phrase Teo repeated often during our interview.

“One of the key things we highlight is that it’s more important for us to grow slowly and steadily instead of fast and recklessly, because it’s a trust-based industry,” says Teo.

“We need to give out loans and be able to collect them back, so we focus on learning the market, understanding the market and solving key pain points instead of giving out a bunch of loans to chalk up high numbers and attract VCs.”

For example, though the platform may offer personal loans in the future, Teo said it currently only lends to SMEs because “we believe that we are strategically better suited to serving small businesses and, in terms of our company’s values, we think that serving SMEs is an expansionary effort. Consumer financing, in our personal view, is more consumptive finance. It doesn’t help grow economies.”

Many of the SMEs the company serves are very small. Some of its Indonesian borrowers, for example, make annual revenue of about $5,000 USD per year.

“Many of these borrowers are seeking their first business loan and do not have other sources of financing. A lot of financial institutions take a collateral underwriting approach and a lot of budding businesses would not be able to secure financing that way,” says Teo.

“But we also see some of them come to us as a form of top-up. They already have a bank loan, but it is insufficient for them, so they come to us because they are limited by the size of their collateral. Also, we are able to process financing faster than traditional institutions.”

Funding Societies was created to give SMEs, many of which had previously relied mostly on friends and family loans, access to more means of financing. The company points to a recent study by Ernst & Young, UOB and Dun & Bradstreet that says 65.2% of SMEs in Southeast Asia do not have easy access to traditional business financing, even though most are open to other options, including peer-to-peer lending platforms.

The company says it was the first online peer-to-peer lending platform in Malaysia and that based on third-party data, it is now the leading SME lending platform there, as well as one of Singapore’s three largest peer-to-peer lending platforms. It also holds sizable market share in Indonesia.

Though its platform uses algorithms for initial application screening, a significant portion of work, depending on loan size, is still done by Funding Societies’ employees, who have grown in number from 70 in 2016 to 165 now (Teo says the company is currently hiring in earnest and willing to pay relocation costs for promising talent). Almost all applicants talk directly to someone from the company. Micro-loans, which range in size from $500 USD to $40,000 USD, usually take about two business hours to approve and disburse, while applicants for larger loans may have to wait a few days to about a week.

“We’ve debated and discussed internally a lot if we leave too much money on the table, because our default rate is lower than certain banks in the markets we are serving, but given that we are still at a relatively nascent stage in the lending market and have no control over financial crises, it is more important to stay prudent than to grow recklessly,” says Teo.

This methodical approach is also important when entering new markets. Though many outside observers take the umbrella term “Southeast Asia” a little too literally, ignoring cultural differences between each country, Teo says it is still a fragmented market, so financial service companies need to localize carefully. When Funding Societies enters a new market, it can probably port about 50% of its tech and business model from its previous market, but the other half has to be built from ground up to account for economic and cultural differences, he adds.

“SME financing is a very localized business. With sufficient capital you can win the market and it’s really driven by subsidies and strong marketing,” Teo says. “But for SMEs, you really, really need to understand the local market.”

Categories: Business News

Former DreamWorks exec Shawn Dennis joins GoldieBlox as president

Startup News - 2018, April 18 - 7:36am

GoldieBlox, a startup looking to get girls hooked on engineering and other STEM fields, has hired Shawn Dennis as its first president.

Dennis was most recently the head of brand and franchise development at DreamWorks Animation and also worked as the chief marketing officer at Mattel’s American Girl. She’s also been on the GoldieBlox board of directors since 2016 — founder and CEO Debbie Sterling told me she’s been “not-so-secretly hoping all along that one day Shawn would come and help me run this thing.”

Sterling said that while GoldieBlox is usually described as a toy company, she’s always had a vision for the Goldie character to become someone who would “inspire girls around the world.”

“I started it really as a social mission: I wanted to close the gender gap in STEM,” she said.

And yes, selling toys where girls can build their own machines is part of that mission, but so is the GoldieBlox YouTube channel and a partnership to produce chapter books with Random House.

Part of Dennis’ role at GoldieBlox will be to lead licensing and partnerships (apparently there’s an animated show in the works, as well) and to create what she described as “an ecosystem with girls at the center.” She added that things like YouTube are key for helping the company open “two lanes of communication,” so that it’s not just talking to parents but girls as well.

“It’s time again to reinvent what girlhood means,” Dennis said.

In addition to handling licensing, she said she’ll be managing much of the company’s day-to-day operations, freeing Sterling to focus on the long-term vision and on advocating for that vision. Dennis’ tenure at both DreamWorks (where she was involved in launching franchises like Trolls) and American Girl has given her plenty of experience with building brands for girls, but she added,” I will be running the business and building the business. I will not be the face of the company — that needs to be Debbie.”

Categories: Business News

Electric scooter permits will be required in San Francisco

Startup News - 2018, April 18 - 6:43am

The San Francisco Board of Supervisors unanimously voted today to approve the ordinance that looks to regulate electric scooters in San Francisco. The ordinance seeks to establish regulation and a permitting process that would enable the San Francisco Municipal Transportation Agency or Department of Public Works to take action against scooters from companies that don’t have an official permit from the city.

“Part of the bru-haha has been really the function of the fact, which was admitted yesterday, was that some of these companies have been a little bit fast and loose with the truth,” Supervisor Jeff Sheehy, a sponsor of the ordinance, said today at the Board of Supervisors meeting.

Sheehy is referencing the fact that Lime, Spin and Bird deployed their respective scooters without permission from the city. The permitting scheme the city has in min, Sheehy said, is very similar to the one San Francisco has in place around stationless bike-sharing.

“This is a basic permitting scheme to allow the professional staff at SFMTA to permit these with sensible, regulatory frameworks and to be able to confiscate unpermitted vehicles or devices,” Sheehy said.

He added that these electric scooters can absolutely serve some benefits to people in San Francisco, but that it does not mean the city should have to sacrifice its sidewalk space. The next step is for the BOS to continue working with the SFMTA to develop this regulation. At a hearing yesterday, the SFMTA said it hopes to open up the permitting process by May 1.

Earlier in the meeting today, the BOS adopted a resolution to develop a working group to inform future legislation around emerging technologies. One of the resolution’s sponsors, Supervisor Norman Yee, noted how he’s heard from seniors and people in wheelchairs who are “being imperiled and inconvenienced because they are having to navigate around scooters and bikes.”

He later added, the purpose of the working group would be to ensure the city is mindful of both the intended and unintended consequences of emerging technologies.

Yesterday, SF City Attorney Dennis Herrera sent cease-and-desist letters to Lime, Bird and Spin, but that doesn’t seem to be making any difference to Lime, Bird and Spin. All three of their respective scooters were found on the streets of San Francisco this morning.

“As it says in the letter, the City Attorney has laid out some recommendations for operation that he will like to see implemented by April 30; he has not requested an immediate stoppage of service,” a Bird spokesperson told TechCrunch. “We are taking his concerns very seriously and reviewing his recommendations for improving Bird in San Francisco.”

I’ve reached out to Lime and Spin about their respective operations in San Francisco. I’ll update this story if I hear back.

Categories: Business News

Ripple’s Brad Garlinghouse and Michael Arrington to talk cryptocurrency at Disrupt SF

Startup News - 2018, April 18 - 4:21am

Ripple CEO Brad Garlinghouse and Arrington XRP Capital founder (and TechCrunch founder) Michael Arrington will be joining us at TechCrunch Disrupt SF in September to talk money.

Garlinghouse has had a long and storied career in the tech industry, serving as a senior vice president at Yahoo!, president of Consumer Applications at AOL and CEO of the file collaboration service Hightail. But in 2016, Garlinghouse was promoted from COO to CEO at payment services company Ripple.

Ripple’s goal is to try to make it as easy as possible to transfer money between two stores of value. Right now, that process is incredibly tedious, with no unifying structure to send money overseas or to underbanked communities. The notion of a unifying ledger is not a new one, but it’s one that’s transformed Ripple into a full-fledged company.

But Ripple also created the world’s third-largest digital token, XRP. The token has a current total market cap around $30 billion, and the company is working to expand the use cases for XRP, which has primarily been marketed as a tool for banks but has only attracted cross-border payment services.

As cryptocurrencies continue to evolve and gain mainstream attention, questions continue to mount around how these tokens will revolutionize the economy and gain utility.

TechCrunch founder and former Editor-In-Chief Michael Arrington will join Garlinghouse onstage to discuss the evolution of cryptocurrencies. Arrington left TechCrunch in 2011 and went on to start CrunchFund, which has invested in big-name startups such as Uber, Airbnb and Yammer.

In 2016, Arrington reduced his role at CrunchFund and has since started Arrington XRP Capital, a $100 million digital asset management firm in blockchain-based capital markets. Ripple is one of the first portfolio companies for Arrington XRP Capital.

This comes at a time when the SEC is doing everything it can to learn more about cryptocurrencies, sending out subpoenas to crypto funds far and wide, including Arrington XRP Capital.

This conversation is sure to be an interesting one, and one you won’t want to miss. Tickets to Disrupt SF (September 5 to September 7) are available now.

Categories: Business News

Here’s what you’ll learn at Atrium’s fundraising workshop

Startup News - 2018, April 18 - 2:53am

Justin Kan is qualified to teach you how to pitch, and isn’t shy about it. Having raised about $90 million for a few companies and sold his startup Twitch to Amazon for almost a billion dollars, not being shy is actually part of what Kan teaches. His legal services startup Atrium today officially launches Atrium Scale, its free Series A fundraising workshop that’s helped eight startups raise $100 million since it started in beta five months ago. The two-day in-person seminar includes pitch coaching, intros to investors and mentors, follow-up online pitch deck help, legal advice, Amazon and Google Cloud credits and tax and accounting services.

I went through Atrium Scale myself, pretending I was the founder of a hypothetical startup that replaces your phone’s contacts app. While the lectures were full of valuable tips, you can get a lot of those from instructional blog posts by Kan and other VCs. But the small group Q&A and coaching with entrepreneurs who’d successfully raised did a remarkable job of improving attendees’ pitches and the esoteric song-and-dance necessary to get investors to part with their cash.

Atrium co-founder Justin Kan

Here’s a breakdown of how Atrium Scale works:

  • When: Once per quarter over a Saturday and Sunday
  • Where: Atrium’s offices in downtown San Francisco
  • How much: Free, but Atrium hopes you’ll end up using its legal services
  • Who: Startups planning to raise their Series A in the next six months, the sooner the better, who fly themselves in from all over the world
  • Who gets in: Atrium selects the 10 percent of applicants most ready for venture funding. Applications can be submitted here
  • Investors involved to date: Sequoia, General Catalyst, Accel, Venrock, Social Capital, Signia, KPCB, Lightspeed
  • Mentors: Justin Kan (Atrium, Twitch), Holly Liu (Kabam, Y Combinator), James Richards (Teleborder, TriNet), Andrew Trader (Zynga), Ashu Desai (Make School)
What Atrium Scale teaches

The Atrium Scale method revolves around the concepts of how to pitch and when. While there are plenty of ways to show off a business, Kan recommends a calculated approach to storytelling. “When should you raise? When you can convince investors to give you money and when cash is the constraint to scaling your business,” Kan said to kick off our program.

The song

“It all starts with a narrative — 99 percent is the work of building the business, but an important 1 percent is convincing people,” Kan relays.

First, explain how the world is a certain way. Describe the problem, why it’s big and who in the market would pay for a solution. Demonstrate that you’re an expert.

Second, explain how the world is changed by your solution to the problem. Frame what’s possible for businesses or consumers once they have your product.

Third, explain how the world is new now that your solution exists. Provide metrics on traction and mechanisms for growth, and show why your team is uniquely equipped to succeed. Identify adjacent markets your product will conquer.

Unlike the frothy days of yore, “people are no longer willing to lose money on a per-unit basis,” says Kan. VCs will demand to understand your unit economics and scalable customer acquisition strategy that turns cash invested into more cash earned.

Perhaps the most important part of the pitch is practice, though. Pitch to fellow founders, investors or angels, but explicitly tell them you want feedback, not money. Running through the pitch over and over boosts confidence, A/B tests narratives and unearths questions. Know your numbers by heart so you always seem sure of where the business is heading, and define a personal pitching style that plays to your personality strengths.

Kan says it all comes down to making investors see your vision for how you’re going to become a massive company.

Atrium Scale helps here by letting you pitch in groups, as well as one-on-one with mentors. Simply being surrounded by people all trying to improve creates an atmosphere conducive to progress rather than getting defensive about criticism. There could be better homework or takeaway materials to help startups continue to improve after the workshop ended, but I heard entrepreneurs work out kinks and trim off tangents that could have derailed their pitch during a real meeting.


The dance

Where Atrium Scale shined brightest was digging into the cadence of the fundraising process. Anyone can work out a decent pitch in their garage, but it takes special know-how to navigate turning that pitch into money in the bank. This is the kind of in-group knowledge that often makes it tough for outsiders to break into Silicon Valley.

You should pitch wide, planning to talk to at least 10 to 20 investors, but knowing it can take 100 ‘nos’ to get a ‘yes.’ Pick investors not based on their firm’s name recognition but their expertise and track record in your industry. Contact investors at least three to four weeks out and schedule meetings in as rapid succession as possible. The goal is to be able to get term sheets back at the same time so you can play firms off each other and pick the best deal.

You’ll start with single partner meetings. You’ll hear back within 24 to 48 hours if they go well, and you can assume they didn’t if you don’t hear back soon. Those that like you will set up multi-partner meetings, and you should ask them what their colleagues will want to know. If that goes well you’ll be brought in for an exhaustive full-partnership pitch where they’ll try to poke holes in your business. Lots of questions means lots of interest, while few questions and VCs bored on their phones means you’re toast.

If the partnership believes in you, you’ll quickly receive a term sheet, but you don’t have to sign it right away. Since you can’t fire your investors, be sure to call their references so you’re sure which you want to work with forever. This also gives you time to go back to other firms you’ve pitched. Don’t say who it’s from, but use your existing term sheet as leverage to get them to give you one or one with a better deal.

Aim for a lead investor that will put in at least 25 percent of the round volume and then fill it out with other firms, strategics and angels. Know that the median delay for investor due diligence is 41 days, so make sure you have enough runway to wait that long after you complete the pitch process. The fundraise should last you 12 to 18 months, but be careful because your spending will expand to take up what’s in the bank. Be ready by then to show you’ve hit new milestones that de-risk your business.

The program also reviewed more advanced topics like raising money from strategic investors, equity versus SAFE financing, crooked deal terms like ratchets and liquidation preferences and how to manage your board. That one-size-fits all info is certainly helpful, but thanks to the small class size, Atrium Scale’s Q&As let founders get answers to industry-specific questions and their own edge cases.

There are plenty of people looking to help startups in Silicon Valley, but few are giving away this high-quality of education for free. Accelerators can charge 7 percent of equity and advisors can charge a percentage point or two. That can be worth a lot if the startup does well. Consultants want cash that pre-A startups rarely have. But Atrium is merely looking for lead generation and it needs them to raise money to be able to afford its legal services. That aligns the workshop well with the outcomes for the companies.

If you have a dumb business idea, no amount of turd polishing will get you legitimate funding. But for startups on to something that just need help communicating, Atrium Scale could be a quick and cheap way to boost their chances of getting picked from the crowd.

Categories: Business News

Snap launches new features for Lens Studio

Startup News - 2018, April 18 - 2:48am

At the end of last year, Snap introduced Lens Studio, a platform that allows developers to create AR lenses for Snapchat. Today, the company is announcing new features for Lens Studio, including seven brand new templates for the creation of face lenses.

Before now, only World Lens creation was available to everyone within Lens Studio, meaning developers could create 3D AR objects but not overlay AR experiences over faces. Now, developers can create Face Lenses, with seven different templates from which to choose.

Here are the new templates for Face Lenses:

  • Face Paint: focuses on face substitution, mapping the face to let developers create art tied to facial features like the lips or nose (great for makeup or accessories)
  • Photo: much like Face Paint, Photo lets creators overlay lenses onto a single static (head-on) photo
  • Distort: lets developers stretch or shrink facial features
  • Trigger: with Trigger, developers can create a trigger (blinking, raising eyebrows, open/close mouth) to execute a lens
  • 2D Objects: this template works the same way as Snap’s famous dog ears filter, letting developers create 2D objects that can be overlaid on a picture of video
  • 3D Objects: same as 2D Objects, but with 3D objects; this template also includes a helper script to play looping animation on the 3D objects
  • Baseball Cap: revamp a 3D baseball cap to change color, brim style and add an image

Alongside the new templates, Snap is also integrating with Giphy to give Lens Studio developers access to Giphy’s massive library of animated GIF stickers.

With the introduction of these new features, Snap is opening up these third-party lenses to the public with the launch of Community Lens Stories. Each story will include public Snaps submitted on Our Story that highlight a community lens. Folks can swipe up on one of these Snaps to unlock the lens, or browse other Lenses by tapping the ‘i’ button above a Community Lens in the carousel.

This is all in an effort to open up Snap to third-party developers and creators, which is why the company is launching the Official Creator Program. This will allow the Snap team to partner with select creators to offer support, including visibility on the Lens Studio website as well as direct support from the Lens Studio team. Official Creators will also get early access to features and templates.

Categories: Business News

Crypto fans, let’s meet in New York next week

Startup News - 2018, April 18 - 12:46am

I’ll be helping build a larger meetup focused on pre-ICO companies in New York on April 23 and I’d love to see you there. It will be held at Knotel on April 23 at 7pm and will feature a pitch-off with eight startups — I will write about the best ones — and two panels with some yet-unnamed stars in the space.

I’d love to see you there, so please sign up here. It’s free for early birds, so hurry.

The event will be held at 551 Fifth Avenue on the 9th Floor and you can sign up to pitch here. I’ll have more information as we get closer to the event. This is still an experimental format, so let’s see how it works.

Categories: Business News

Parsley Health picks up $10 million to reimagine healthcare

Startup News - 2018, April 18 - 12:00am

According to Parsley Health, the average adult spends 19 minutes with their physician every year. Seventy percent of the time, these short visits result in the prescription of a medication.

“According to the CDC, 70% of diseases in our country are chronic and lifestyle-driven,” said Parsley Health founder and CEO Dr. Robin Berzin. “And yet instead of addressing the root causes of health problems, medicine’s toolkit is limited to prescriptions and procedures, driving up costs while the average person gets sicker. The answer isn’t just another pill.”

Parsley Health, an annual membership service ($150/month), reimagines what medicine can be. The company focuses on the cause of an illness rather than simply throwing Band-Aids at the problem. But in order to do this, your doctor needs far more than 19 minutes of your time each year.

Today, Parsley announced the close of a $10 million Series A funding led by FirstMark Capital, with participation from Amplo, Trail Mix Ventures, Combine and The Chernin Group. Individual investors such as Dr. Mark Hyman, M.D., director of the Cleveland Clinic Center for Functional Medicine; Nat Turner, CEO of Flatiron Health; Neil Parikh, co-founder of Casper; and Dave Gilboa, co-founder of Warby Parker, also invested in the round.

As part of the financing, FirstMark Capital partner Catherine Ulrich will join the board.

Here’s how Parsley works:

When a user first signs up online, they enter in a wide range of data about themselves, from family health history to past procedures to symptoms and lifestyle. The user then schedules their first visit with their new doctor, which will last for 75 minutes, during which time the doctor will exhaustively go through that information to download a full picture of that patient’s health.

After that visit, the user has full transparency into their medical data and the doctor’s notes. The patient also leaves with a health plan, including lifestyle nutritional advice, and access to their own health coach. Parsley also writes prescriptions, when necessary, and refers patients to top-of-the-line specialists, if needed.

Membership includes five annual visits with their doctors (which rounds out to about four hours), as well as five sessions with their certified health coach. These coaches help patients stay on their health plan, whether it’s advice on physical exercise or getting better sleep or finding take-out places and menu items near their office to eat healthier meals.

Throughout a patient’s membership, they have full access to their medical data and doctor’s notes online, as well as unlimited direct messaging with their doctor. At Parsley, there is always a doctor on call to answer questions about semi-urgent issues like a UTI or a sinus infection.

All of Parsley’s doctors and health coaches are full-time employees at Parsley, and Dr. Berzin told TechCrunch that the company sees a lot of inbound from doctors who want to spend more time with patients and help solve the root of their problems.

Parsley also trains their doctors in functional medicine, which uses a systems-biology approach to better resolve and manage modern chronic disease, as part of Parsley’s clinical fellowship, where they are trained in evaluating thousands of biomarkers to diagnose and treat diseases at their origin.

Parsley is not the first in the space. Forward and One Medical also look to change the way that healthcare is provided in this country, while NextHealth Technologies is focused on supplemental treatments like IV treatments and cryo.

“When I tell people about Parsley, they say ‘wow! That’s what medicine should be’,” said Dr. Berzin. “People are really searching for something better than feeling like they’re paying more and more for healthcare while getting less and less. People are excited to invest in their health and wellness and to have a team that’s working to care for them.”

Parsley has clinics in San Francisco, New York and Los Angeles.

Editor’s Note: An earlier version of this article incorrectly stated that Parsley Health costs $150/year.

Categories: Business News

This tiny agtech company thinks it has figured out something its better-capitalized rivals haven’t

Startup News - 2018, April 17 - 11:19pm

In November, we told you about Farmers Business Network, a social network for farmers that invites them to share their data, pool their know-how and bargain more effectively for better pricing from manufacturing companies. At the time, FBN, as it’s known, had just closed on $110 million in new funding in a round that brought its funding to roughly $200 million altogether.

That kind of financial backing might dissuade newcomers to the space, but a months-old startup called AgVend has just raised $1.75 million in seed funding on the premise that, well, FBN is doing it wrong. Specifically, AgVend’s pitch is that manufacturers aren’t so crazy about FBN getting between their offerings and their end users — in large part because FBN is able to secure group discounts on those users’ behalf.

AgVend is instead planning to work directly with manufacturers and retailers, selling their goods through its own site as well as helping them develop their own web shops. The idea is to “protect their channel pricing power,” explains CEO Alexander Reichert, who previously spent more than four years with Euclid Analytics, a company that helps brands monitor and understand their foot traffice. AgVend is their white knight, coming to save them from getting disrupted out of business. “Why cut them out of the equation?” he asks.

Whether farmers will go along is the question. Those who’ve joined FBN can ostensibly save money on seeds, fertilizers, pesticides and more by being invited to comparison shop through FBN’s own online store. It’s not the easiest sell, though. FBN charges farmers $600 per year to access its platform, which is presumably a hurdle for some.

AgVend meanwhile is embracing good-old-fashioned opacity. While it invites farmers to search for products at its own site based on the farmers’ needs and location, it’s only after someone has purchased something that the retailer who sold the items is revealed. The reason: retailers don’t necessarily want to put all of their pricing online and be bound to those numbers, explains Reichert.

Naturally, AgVend insists that it’s not just better for retailers and the manufacturers standing behind them. For one thing, says Reichert,  AgVend’s farming customers are sometimes offered rebates. Customers are also better informed about the products they’re buying because the information is coming from the retailers and not a third party, he insists. “When a third party like FBN comes in and tries going around the retailers, the manufacturers can’t guarantee that FBN is giving the right guidance about their products.”

In the end, its customers will decide. But the market looks big enough to support a number of players if they figure out how to play it. According to USDA data from last year, U.S. farms spent an estimated $346.9 billion in 2016 on farm production expenditures.

That’s a lot of feed and fertilizer. It’s no wonder that founders, and the VCs who are writing them checks, see fertile ground. This particular deal was led by 8VC and included the participation of Precursor Ventures, Green Bay Ventures, FJ Labs and House Fund, among others.

Categories: Business News

Guestfriend automates chatbot creation for restaurants

Startup News - 2018, April 17 - 11:16pm

While chatbots might sound like an interesting experiment for restaurants and other small businesses, they probably can’t devote much time or money to building them. So a startup called Guestfriend is planning to make the process as fast and easy as possible.

The company has raised $5 million in seed funding from Primary Venture Partners, Techstars Ventures and betaworks. It’s led by Bo Peabody, a venture partner and entrepreneur in residence at Greycroft who also co-owns the Mezze Restaurant Group. Peabody compared the current moment to the year 2000, when “every small business woke up and said, ‘I need a website.'”

“That moment is coming for chatbots,” he predicted.

But rather than asking a restaurant owner or employee to go online and design the conversational flow of a chatbot themselves, Guestfriend can automatically create a chatbot based on information that’s already online — hours, menu, support for dietary restrictions and so on. In that sense, Peabody said, “It’s really just a website that you talk to.”

“The ah-ha moment was when I realized that building a bot for my restaurant was virtually impossible to do as a one-off, but all of the answers to almost any question are available online, mostly in structured APIs,” he said.

Peabody suggested that the real challenge was building natural language technology that could support the range of questions that someone might ask — for example, all the different ways that people might ask about the dress code. That’s one reason why it was important to target a specific industry, though he eventually plans to expand into home services, retail, spas/salons/exercise and hotels. (“It’s really the Yelp verticals.”)

Guestfriend chatbots work across platforms, including SMS, Facebook, Twitter and Google search results (via Google My Business), with plans to support speech platforms like Amazon Alexa and Google Home.

The company is actually building these chatbots without waiting for restaurants to sign up. (You can try them out on the Guestfriend website.) The idea is that publishers with restaurant listings can also incorporate them as a new way to interact with their sites.

At the same time, restaurants can come in and claim their chatbots, which will be updated accordingly everywhere that they’re available. The restaurant can then be as hands-on or as hands-off as they want.

I brought up the fact that I often visit restaurants’ Facebook Pages in the hopes of answering more timely questions, like whether or not a restaurant is staying open despite bad weather or a holiday. Peabody suggested that as with social media or a website, the up-to-dateness of the information will depend on the restaurant — some of them might want to update every day with things like daily specials. For others, a completely automated approach might be the most appealing.

Categories: Business News

Resy rolls out a new suite of tools for restaurants

Startup News - 2018, April 17 - 11:00pm

Resy launched in the summer of 2014 with a simple premise: If you want a premium reservation at a restaurant on short notice, you should be able to pay for it. Four years and 160 markets later, Resy has changed a lot since then.

But today, the company is about to change things up even more.

This morning, Resy has announced a brand new suite of tools for restaurants, including a new inventory management system called ResyFly.

As it stands now, restaurants have two options when it comes to inventory management for their reservations. They can choose a slot system, where diners are seated at 6pm, 8pm and 10pm, or they can opt for a flex system, where they take reservations as they’re called in and build the night’s reservations based off what comes in first.

Unfortunately, most restaurants have to choose between these two systems, as there are no inventory management systems that offer the ability to do both, according to Resy.

ResyFly uses Resy’s troves of data to determine the best way for restaurants to eliminate gaps in their inventory throughout a given night, taking into account things like date, time, weather and even the average time spent eating at a given restaurant. The tool gives restaurants the ability to schedule different floor plans, reservation grids and hours of operation for special days like Valentine’s Day.

Alongside ResyFly, the company is also introducing Business Intelligence, a window into important information like KPIs, revenue and ratings with third-party information from platforms like Foursquare layered in and integrated with POS software providers to offer real-time revenue reporting.

But sometimes you want direct feedback from the customer. To that end, Resy is launching Resy Surveys, which gives a restaurant the opportunity to send a custom survey to customers about their experience. Resy is also integrating with Upserve, giving Resy’s restaurant partners insights into their guests’ preferences and favorite dishes, as well as info on dining companions, frequency of bookings and historical spend.

And while Resy is focused on refining the product, the company is also focused on growth. That’s why Resy has announced the launch of Resy Global Service, which lets Resy distribute inventory to partners like Airbnb. (It’s worth noting that Airbnb led Resy’s $13 million funding round in 2017.)

Finally, Resy is working on a new membership loyalty program called Resy Select, which will launch at the end of the month. Resy Select is an invite-only program that gives restaurants insights into Resy’s hungriest users, and gives those users benefits such as exclusive booking windows, priority waitlist, early access tickets to events and other exclusive experiences like meeting the chef or touring the kitchen.

Resy books more than 1 million reservations on the platform each week. The company no longer charges users for reservations, but rather charges restaurants by feature, instead of cover, with three tiers ranging from $189/month to $899/month. That said, the company is not yet self-serve on the restaurant side, but founder and CEO Ben Leventhal said the team is thinking about introducing it in the future.

“The key challenge and key opportunity is to do everything we can to make the right choices about what we build and the order we build it in,” said Leventhal. “Our goal is to stay focused on restaurants, as a significant amount of the tech we build is built in conjunction with our restaurant partners.”

Categories: Business News

Drift raises $60 million to be an Amazon for businesses

Startup News - 2018, April 17 - 10:00pm

When you’re raising venture capital, it helps if you’ve had “exits.” In other words, if your company has been acquired or you’ve taken one public, investors are more inclined to take a bet on anything you do.

Boston -based serial entrepreneur David Cancel has sold not just one, but four companies.  And after a few years running product for HubSpot, he’s in the midst of building number five.

That startup, Drift, managed to raise $47 million in its first three years. Now it’s announcing another $60 million led by Sequoia Capital, with participation from existing investors CRV and General Catalyst. The valuation is undisclosed.

So what is Drift? It’s “changing the way businesses buy from businesses,” said Cancel. He wants to eventually build an alternative to Amazon to make it easier for companies to make large orders.

Currently, Drift subscribers can use chatbots to help turn web visits into sales. It has 100,000 clients including Zenefits, MongoDB, Zuora and AdRoll.

Drift “turns those conversations into customers,” Cancel explained. He said that technology is comparable to what is commonly used for customer service. It’s the “same messaging that was used for support, but used in the sales context.”

In the long-run, Cancel says he hopes Drift will expand its offerings to compete with Salesforce.

The company wouldn’t disclose revenue, but says it is ten times better compared to whatever it was in the past year. And it’s on track to grow another five times this year. This, of course, means little without hard numbers.

Yet we’re told that the new round means that Drift will have $90 million in the bank. It plans to use some of the funding to make acquisitions in voice and video technology. Drift also plans to expand its teams in both Boston and San Francisco, with new offices for both. The company presently has 130 employees.


Categories: Business News

Node snags two top AI researchers to advance AI-fueled search tool

Startup News - 2018, April 17 - 10:00pm

Node, an AI-driven search tool designed to surface the information that matters most to you, announced today that it was bringing on a couple of AI research heavy hitters. It also announced $5 million in additional funding.

For starters, the company hired Louis Mornier, one of the founders of early internet search engine, Alta Vista, and most recently the Head of the AI Lab at Airbnb. Mornier will join the startup as Chief Scientist.

The company also brought on Jeffrey Johnson as Chief Technology Officer in January. Johnson has almost 20 years of executive experience and has has over three decades of experience working on large-scale artificial intelligence systems, according to the company.

The new money comes from Recruit Strategic Partners (RSP), WndrCo, David Brewer of Aragon Capital (former founder of search engine Inktomi), Linnea Roberts of GingerBread Capital, Falmouth Ventures, and Marc Weiss of Open Field Capital.

Node CEO Falon Fatemi says the new talent isn’t simply for show. The company has brought them onboard to help advance its AI-powered discovery engine, which according to Fatemi, helps surface the relevant people you should be partnering with today.

“Fundamentally what we are talking about when we say we are ushering next generation search is an AI brain that understands the interconnections [between people and things] and surfaces personalized recommendations,” she said.

She says the use case of connecting people you should know is just a starting point for the search engine, but one that’s generated $200 million in revenue. Over time, they want to expand beyond that and use the technology to help discover other relevant data inside an organization and on the web. The two new hires should help.

“We think with this next generation release that’s coming, we will be expanding to allow any organization to leverage Node. [The technology] can be applied in any context in a company,” she said. “It’s a new way of [taking advantage of] AI, and it’s becoming a reality. Leaving opportunities to ad hoc chance is no longer acceptable and we have a great opportunity to be that platform, giving recommendations and helping find opportunities,” Fatemi explained.

The company was founded in 2014 and has raised more than $21 million.

Categories: Business News

LawGeex raises $12M for its AI-powered contract review technology

Startup News - 2018, April 17 - 9:00pm

Can Artificial Intelligence replace lawyers? Perhaps sometime in the distant future, but in the meantime AI is already augmenting the work done by legal professionals as startups race to reach that ultimate goal.

One burgeoning player in the AI-powered legal tech space is Tel Aviv-based LawGeex, which has developed automated contract review technology to help companies sift through things like NDAs, supply agreements, purchase orders, and SaaS licenses, to ensure they’re aren’t any unsanctioned legal gotchas buried deep in legalise. Today, the company is announcing that it has closed $12 million in new investment.

Led by VC fund Aleph, with participation from previous backers, including Lool Ventures, the new round of funding will be used by LawGeex to further develop its product, and build a bigger presence in the U.S. where it recently opened a New York office. It brings the startup’s total funding to date to $21.5 million.

Designed to answer the question ‘Can I sign this?’ the LawGeex contract review system aims to significantly speed up and cut costs inherent with the contract approval process. The idea is that once a new contract is sent to a business, it is uploaded to LawGeex where a “first-pass review” of the contract is undertaken using the startup’s AI. This checks the contract against a company’s predefined legal policies.

“If everything looks good, we can automatically approve the contract for signing right then and there,” explains LawGeex VP Marketing Shmuli Goldberg. “If we spot any issues that need to be corrected, we escalate the contract to the legal team, and highlight the exact sentence they need to fix, and what they need to do to fix it”.

The desired outcome is that legal professionals no longer need to spend time reviewing problem-free contracts, and only spend a few minutes, instead of hours, on problematic ones. “We free up the time of whoever does that first review of the contract, be it a paralegal who takes a first look before sending issues on to a lawyer, or a contract review team who triage incoming contracts,” Goldberg says.

Put more simply, the LawGeex product operates a little like a spelling or grammar checker (see screenshot above). But instead of looking for specific keywords or language, the AI has been trained to understand technical legal language or so-called legalese. “It actively reads the contracts and “understands” the legal concepts. This means we can find and flag provisions even if they’re written in a way we’ve never seen before,” says the LawGeex VP.

To make all of this possible, over the last four years the company’s “recursive neural network”-based AI has been trained by feeding it hundreds of thousands of legal contracts, and having experienced U.S. lawyers annotate those contracts along the way. “We’ve now reached the point we can say that in certain cases, for example reviewing standard NDAs, our AI is actually more accurate than a human, as a recent study led by several academics at leading universities showed,” claims Goldberg.

Categories: Business News

A16Z and Founders Fund sink $28M into IRL asset blockchain Harbor

Startup News - 2018, April 17 - 8:51pm

Harbor helps businesses legally issue cryptocurrency tokens that represent ownership of real-world assets like real estate, fine art, company equity, and investment funds. This “tokenization” might sound boring, but it could be a big business that unlocks trading of illiquid property.

Harbor‘s intention to become a fundamental bridge between the offline and crypto economies has attracted a $28 million strategic round led by Founders Fund and joined by Andreessen Horowitz, Pantera Capital, and more. Following its $10 million Series A in February, Harbor has now raised over $40 million to dissolve the legal barriers to private securities tokenization.

“We think there’s going be a far greater appetite for owning real-world assets using the blockchain” than digital only cryptocurrencies, Harbor CEO Joshua Stein tells me. He expects it be like the impact “email had on snail mail”, but with value instead of content being sent back and forth. Once someone like Harbor handles the technical necessities to make transfers instant, free, and secure, people will exchange a lot more frequently.

The Harbor team

Here’s how Harbor works. Clients pay it in cash to make their tokenization of an IRL private security legal. Traditional trading of these assets can be complicated and expensive given there are often financial regulations or licensing requirements restricting who can buy and sell them. For example, foreigners or unaccredited investors without enough net worth aren’t allowed to own certain securities. The lawyers to handle these sales can be expensive, and the process can take weeks.

Normally, businesses have to be very careful about who they let buy these securities because they’re liable for a 20-year criminal sentence if they violate SEC law. With Harbor, a white list of eligible owners is established by an outside law firm that takes responsibility, and Harbor’s smart contracts refuse to process an illegal sale. Harbor effectively bakes securities law compliance like know-your-customer and anti-fraud/money-laundering into the tokens themselves so trades can happen instantaneously without legal assistance on every sale.

Harbor is hoping to launch this Regulated Token (R-Token) system with its first client this summer. The tokens are ERC-20 compatible so they can be sold on lots of cryptocurrency exchanges and stored in popular wallets. Stein stresses that investors will have to trust the underlying securities they’re buying. But they’ll get more trust in who owns something through blockchain transparency rather than some signed contract locked in a desk or vault somewhere. And they won’t have to trust who they’re selling to since the smart contracts only execute the trade if its legal.

The idea of making the way hugely valuable assets trade faster, easier, and cheaper led Harbor’s latest round to be oversubscribed. That’s even though it only came out of stealth two months ago from Craft Ventures, the fund and incubator run by PayPal mafioso David Sacks who sold Yammer to Microsoft.

Craft Ventures, Vy Capital and Valor Equity Partners joined this that included other new investors like Future Perfect Ventures, 1confirmation, Abstract Ventures, and Signia Venture Partners. Nicolas Berggruen of Berggruen Holdings, Napoleon Ta of Founders Fund, and Kyle Samani and Tushar Jain of Multicoin Capital also put in their personal money.  Sacks knew Ta, which set up Founders Fund to lead the round. Meanwhile, Stein says Harbor wanted to team up with Andreessen Horowitz partner and crypto thought leader Chris Dixon.

Harbor will have to compete with the other blockchain-for-securities startups like Polymath, which runs entirely decentralized and trustless infrastrucutre to the point that you have to hope strangers want their deposit back enough not to screw you on legal compliance, and tZERO, which is building its own full-stack compliance system. Harbor’s reliance on outside legal firms to build the smart contract white lists makes it more akin to a traditional financial player.

Harbor could make a lucrative business out of letting clients sell American securities to the Chinese market, which has shown a strong interest in crypto assets. Stein talks about “a crypto nirvana of a trustless environment” like a true Bitcoin bro. But his new A-list investors show Harbor is no pump-and-dump.

Categories: Business News

Edtech startup Lingumi scores £1.2M seed funding to teach pre-school kids English

Startup News - 2018, April 17 - 5:00pm

Lingumi, the London and Cardiff-based edtech startup that teaches English to kids aged between 2 and 6 using an app and a range of physical products, has picked up £1.2 million in seed funding.

Leading the round is ADV, with participation from existing backers LocalGlobe, and company builder Entrepreneur First (Lingumi was part of EF’s 5th cohort, which is turning out to be quite a vintage year). A number of unnamed angel investors also took part in the round.

Founded by CEO Toby Mather and CTO Adit Trivedi after they paired up at EF in late 2015, Lingumi has built a language learning platform for pre-school kids, initially targeting the teaching of English. Described as “digital-first,” it consists of an app designed around a curriculum of daily lessons, which can then be augmented with Lingumi’s physical products, such as ‘Play Cubes’ and ‘Jumbo Word Cards’.

In a call with Mather he told me that the Lingumi product that exists today is very different to the one he and Trivedi originally pitched at EF Demo Day back in early 2016, even if the mission remains the same: to increase access to learning a second language, based on a belief that a child’s earliest years present a “magic window” to do so.

Initially, the pair had developed a concept for a connected toy that controlled a learning app but pivoted to a subscription model after families kept hitting the end of the startup’s curriculum and requested more. In July last year, Lingumi ditched the connected toy entirely and switched to a “pure digital subscription,” up selling its now much simpler physical products separately.

“We’re increasingly aware of the exceptional ability of infants to learn a second language from very early in childhood, but access to English is typically restricted to the super rich, or to children aged 7 or older, as they begin to attend school,” says Mather. “Even there, they are taught badly and infrequently. We’re building an English learning methodology that is low-cost, can be used in the earliest years, and is effective, even if the parents themselves don’t speak English”.

The Lingumi platform works best when parents or caregivers participate, too. The app delivers a single lesson per day of around 20 minutes and purposefully limits screen time, hence the range of supplementary non-digital prodicts. “Children receive everything in English, through a playful learning programme built for pre-schoolers, but we encourage and train parents in their native language to play and learn with their children,” explains the Lingumi CEO.

“Multiple studies have shown the impact of this style of co-learning on outcomes. The learning method is also unique: unlike most curriculums, which focus around ‘edutainment’ or reading and writing skills, or teach older children via live video, ours is focused on constructive, natural spoken English in the earliest years. As we develop the curriculum, we’re continually leveraging our data on each child to improve the experience and learning trajectory for them”.

To date, Lingumi claims 10,000 users and Mather says typical customers are families with one or two working parents, “usually middle or working-class, aspirational families who understand both the fun, and the educational benefit of beginning a second language with their child”. It has customers in over 40 countries, but is mainly focussed on Western Europe, Taiwan, and, increasingly, China.

In fact, Mather says China is a potentially huge market and is in part seeing the startup pilot a version of Lingumi for kindergartens that want to begin teaching English, leveraging the company’s existing learning method and content.

To that end, the company plans to use the new seed funding to further develop its “digital and physical product ecosystem,” and scale the learning platform into new markets.

Categories: Business News

Taiwanese startup Kdan Mobile raises $5M Series A for its cloud-based content creation tools

Startup News - 2018, April 17 - 3:05pm

Kdan Mobile founder and CEO Kenny Su

Kdan Mobile, a Taiwanese startup that makes cloud-based software for content creators, announced a $5 million Series A today, raised from investors including W.I. Harper Group, Darwin Venture Management and Accord Ventures. Founded in 2009, the Tainan City startup says its products have been downloaded more 120 million times, with about 40% of its customers located in the United States.

Its Series A takes Kdan Mobile’s total funding so far to $6.5 million. The capital will be used for product development, including blockchain-based encryption for documents and real-time collaboration features, to appeal to enterprise and education users. The company also plans to spend more on user acquisition in the U.S. and China, two of its growth markets.

Kdan Mobile’s products include Creativity 365, a software suite with a mobile animation creator and video editor, and Document 365, launched last year to attract enterprise users. The company also recently began offering new subscription plans for businesses and educational organizations and claims that its cloud platform, called Kdan Cloud, now counts over 3.5 million members.

Founder and chief executive officer Kenny Su says Kdan Mobile is seeking new partners that will allow it to establish a bigger presence in markets like Japan. One of its Series A investors, Accord Ventures, is based in Tokyo, and Kdan Mobile may start marketing to the country’s animation industry, Su tells TechCrunch. The company already has partnerships with Taiwanese mobile services provider GMobi, Jot Stylus maker Adonit and Ningbo, China-based design sharing platform LKKER.

Su says one of the ways Kdan’s products differentiate from cloud-based software by Google, Microsoft, Adobe and other major competitors is its focus on artists, designers and other creative professionals. Kdan’s products were also created to allow users to start projects on mobile devices before moving onto desktop apps. As many users of Google Docs, Office 365 or Adobe Creative Cloud have discovered, accessing them on mobile devices feels much more awkward than on desktop. Kdan Mobile, however, was founded just as smartphones and tablets usage was becoming widespread, and its products were created specifically for mobile.

“We are trying to fill the gap, helping users create content on mobile and then allowing them to finish it in a desktop environment, not only with our own tools, but also by exporting to other places including Adobe,” says Su.

Part of Kdan Mobile’s Series A financing will also be used to figure out how to the company can increase the use of artificial intelligence in its products. Kdan Mobile already uses machine learning algorithms to improve its software by analyzing what users upload and recommend on its content sharing platform.

In a press statement, W.I. Harper Group managing director Y.K. Chu said “We are stunned by Kdan’s leading development technology and global vision. We are glad to be part of their development plan and expect to grow with them.”

Categories: Business News

Minds aims to decentralize the social network

Startup News - 2018, April 17 - 2:39pm

Decentralization is the buzzword du jour. Everything – from our currencies to our databases – are supposed to exist, immutably, in this strange new world. And Bill Ottman wants to add our social media to the mix.

Ottman, an intense young man with a passion to fix the world, is the founder of, a New York-based startup that has been receiving waves of new users as zealots and the the not-so-zealous have been leaving other networks. In fact, Zuckerberg’s bad news is music to Ottman’s ears.

Ottman started Minds in 2011 “with the goal of bringing a free, open source and sustainable social network to the world,” he said. He and his CTO, Mark Harding, have worked in various non-profits including Code To Inspire, a group that teaches Afghani women to code. He said his vision is to get us out from under social media’s thumb.

“We started Minds in my basement after being disillusioned by user abuse on Facebook and other big tech services. We saw spying, data mining, algorithm manipulation, and no revenue sharing,” he said. “To us, it’s inevitable that an open source social network becomes dominant, as was the case with Wikipedia and proprietary encyclopedias.”

His efforts have paid off. The team now has over 1 million registered users and over 105,000 monthly active users. They are working on a number of initiatives, including an ICO, and the site makes money through “boosting” – essentially the ability to pay to have a piece of content float higher in the feed.

The company raised $350K in 2013 and then a little over a million dollars in a Reg CF Equity Crowdfunding raise.

Unlike Facebook, Minds is built on almost radical transparency. The code is entirely open source and it includes encrypted messenger services and optional anonymity for users. The goal, ultimately, is to have the data be decentralized and any user should be able to remove his or her data. It’s also non-partisan, a fact that Ottman emphasized.

“We are not pushing a political agenda, but are more concerned with transparency, Internet freedom and giving control back to the user,” he said. “It’s a sad state of affairs when every network that cares about free speech gets lumped in with extremists.”

He was disappointed, for example, when people read that Reddit’s choice to shut down toxic sub-Reddits was a success. It wasn’t, he said. Instead, those users just flocked to other, more permissive sites. However, he doesn’t think those sites have be cesspools of hate.

“We are a community-owned social network dedicated to transparency, privacy and rewarding people for their contributions. We are called Minds because it’s meant to be a representation of the network itself,” he said. “Our mission is Internet freedom with privacy, transparency, free speech within the law and user control. Additionally, we want to provide our users with revenue opportunity and the ability to truly expand their reach and earn rewards for their contributions to the network.”

Categories: Business News

Elon Musk’s Boring Co. raises $113 million to chase a pipe dream

Startup News - 2018, April 17 - 7:07am

Elon Musk’s tunneling startup The Boring Company has raised $113 million to fund its vision of the near/distant future of transportation, according to newly filed SEC docs first spotted by CNBC.

The startup, which is centered around the goal of creating underground tunnels, plays a central part in Musk’s integrated view of urban transportation that he hopes will shape how the public moves about in a quick and efficient way. Last month, Musk announced that the company would be adjusting its plans to prioritize pedestrian traffic over vehicles.

A major part of the company’s early efforts have been in fighting for permits and contracts with city governments. Though Musk has indicated that he hopes to use the company to alleviate the problems of LA traffic, the company is also currently actively engaged in working with cities across the U.S.

Today’s documents don’t offer much insight into the details of the round beyond the cash amount and the fact that there were 31 undisclosed participants in the equity funding. The company has gotten some press for its less than conventional “fundraising methods” so far, where it has sold pre-orders of branded hats and, yes, flamethrowers.


Categories: Business News

Utah’s Pluralsight unveils IPO filing

Startup News - 2018, April 17 - 5:55am

Pluralsight, the Utah-based education technology company, has revealed its IPO filing. 

Given the timing of the unveiling, the company is likely targeting a May public debut.

Its core business is online software development courses, helping people improve their skills in categories like IT, data and security. Businesses small and large pay Pluralsight to help train their employees. It also has offerings for individual subscribers.

In the filing, the company acknowledges that it is a competitive landscape, and names Cornerstone OnDemand, Udacity, Udemy, LinkedIn Learning as others in a comparable market. It also mentions General Assembly, which was recently acquired by Adecco for $413 million. 

This is the first glimpse we get at Pluralsight’s financials. For 2017, the company brought in $166.8 million in revenue, up from $131.8 million in 2016 and $108.4 million in 2015.

Losses are growing, however. This is partly due to a sizeable increase in sales and marketing expenditures. For 2017, the company lost $96.5 million. This is up from losses of $20.6 million in 2016 and $26.4 million in 2015.

Pluralsight has been around since 2004. Like many startups outside of the San Francisco Bay Area, the company bootstrapped its business and didn’t raise significant outside funding until 2013. Pluralsight previously raised nearly $200 million in financing.

The largest shareholder is Insight Venture Partners, which owned 46.1 percent of the shares prior to the IPO, an unusually high percentage. Co-founder and CEO Aaron Skonnard owned 13.4 percent and investment group ICONIQ owned 8.1 percent.

Morgan Stanley and J.P. Morgan served as lead underwriters. Wilson Sonsini and Goodwin Procter served as counsel.

Pluralsight plans to list on the Nasdaq under the ticker “PS.”

A provision in the JOBS Act from 2012 helped make it so that companies could file confidentially and then reveal financials and other business information just weeks before making public debuts. This helps companies avoid too much scrutiny in the months leading up to an IPO. There is also a quiet period in this time, meaning that companies are limited in what they can say publicly about their businesses.

Like most tech companies, Pluralsight chose to take advantage of this confidential filing provision. But it also announced that it filed, something that companies don’t usually do. Most choose to stay quiet about IPO plans until they make the filings public, unless reporters break the news first.

It was no surprise to those who have been following Utah’s tech scene that Pluralsight is planning to list on the stock market this year. The venture-backed “unicorn” has been a late-stage company for several years now, with a reported valuation of $1 billion as of 2014. 

After a slow first couple of months, there has been a flurry of tech IPO activity in recent weeks. DropboxSpotify and Zuora recently debuted. Pivotal, Smartsheet and Carbon Black are amongst the companies expected to list in the coming weeks.


Categories: Business News


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