Startup News

Subscribe to Startup News feed Startup News
Startup and Technology News
Updated: 6 hours 29 min ago

The AI market is growing, but how quickly is tough to pin down

14 hours 28 min ago
Holden Page Contributor Share on Twitter Holden Page is an editor and journalist at Crunchbase News. More posts by this contributor

If you work in tech, you’ve heard about artificial intelligence: how it’s going to replace uswhether it’s over-hyped or not and which nations will leverage it to prevent, or instigate, war.

Our editorial bent is more clear-cut: How much money is going into startups? Who is putting that money in? And what trends can we suss out about the health of the market over time?

So let’s talk about the state of AI startups and how much capital is being raised. Here’s what I can tell you: funding totals for AI startups are growing year-over-year; I just don’t know precisely how quickly. Regardless, startups are certainly raising massive sums of money off the buzzword.

To make that point, here are just a few of the biggest rounds announced and recorded by Crunchbase in 2018:

  • SenseTime, a China-based startup that is quite good at tracking your face wherever it may be, raised a $1 billion Series D round. It was the largest round of the year in the AI category, according to Crunchbase. But what’s more mind-blowing is that the company raised a total of $2.2 billion in just one year across three rounds. A picture is worth a thousand words, but a face is worth billions of dollars.
  • UBTech Robotics, another China-based startup focusing on robotics, raised an $820 million Series C. Just a cursory look at its website, however, makes UBTech appear to be a high-end toy maker rather than an AI innovator.
  • And biotech startup Zymergen, which “manufactures microbes for Fortune 500 companies,” according to Crunchbase, raised a $400 million Series C.

Now, this is the part I normally include a chart and 400 words of copy to contextualize the AI market. But if you read the above descriptions closely, you’ll see our problem: What the hell does “AI” mean?

Take Zymergen as an example. Crunchbase tags it with the AI marker. Bloomberg, citing data from CB Insights, agrees. But if you were making the decision, would you demarcate it as an AI company?

Zymergen’s own website doesn’t employ the phrase. Rather, it uses buzzwords commonly associated with AI — machine learning, automation. Zymergen’s home page, technology page and careers page are devoid of the term.

Instead, the company focuses on molecular technology. Artificial intelligence is not, in fact, what Zymergen is selling. We also know that Zymergen uses some AI-related tools to help it understand its data sets (check its jobs page for more). But is that enough to call it an AI startup? I don’t think so. I would call it biotech.

That brings us back to the data. In the spirit of transparency, CB Insights reports a 72 percent boost in 2018 AI investment over 2017 funding totals. Crunchbase data pegs 2018’s AI funding totals at a more modest 38 percent increase over the preceding year.

So we know that AI fundraising for private companies is growing. The two numbers make that plain. But it’s increasingly clear to me after nearly two years of staring at AI funding rounds that there’s no market consensus over exactly what counts as an AI startup. Bloomberg in its coverage of CB Insights’ report doesn’t offer a definition. What would yours be?

If you don’t have one, don’t worry; you’re not alone. Professionals constantly debate what AI actually means, and who actually deserves the classification. There’s no taxonomy for startups like how we classify animals. It’s flexible, and with PR, you can bend perception past reality.

I have a suspicion there are startups that overstate their proximity to AI. For instance, is employing Amazon’s artificial intelligence services in your back end enough to call yourself an AI startup? I would say no. But after perusing Crunchbase data, you can see plenty of startups that classify themselves on such slippery grounds.

And the problem we’re encountering rhymes well with a broader definitional crisis: What exactly is a tech company? In the case of Blue Apron, public investors certainly differed with private investors over the definition, as Alex Wilhelm has touched on before.

So what I can tell you is that AI startup funding is up. By how much? A good amount. But the precise figure is hard to pin down until we all agree what counts as an AI startup.

Categories: Business News

Following a record year, Illinois startups kick off 2019 on a strong foot

2019, January 20 - 2:09am
Jason Rowley Contributor Jason Rowley is a venture capital and technology reporter for Crunchbase News. More posts by this contributor

Illinois’s startup market in 2018 was very strong, and it’s not slowing down as we settle into 2019. There’s already almost $100 million in new VC funding announced, so let’s take a quick look at the state of venture in the Land of Lincoln (with a specific focus on Chicago).

In the chart below, we’ve plotted venture capital deal and dollar volume for Illinois as a whole. Reported funding data in Crunchbase shows a general upward trend in dollar volume, culminating in nearly $2 billion worth of VC deals in 2018; however, deal volume has declined since peaking in 2014.1

Chicago accounts for 97 percent of the dollar volume and 90.7 percent of total deal volume in the state. We included the rest of Illinois to avoid adjudicating which towns should be included in the greater Chicago area.

In addition to all the investment in 2018, a number of venture-backed companies from Chicago exited last year. Here’s a selection of the bigger deals from the year:

Crain’s Chicago Business reports that 2018 was the best year for venture-backed startup acquisitions in Chicago “in recent memory.” Crunchbase News has previously shown that the Midwest (which is anchored by Chicago) may have fewer startup exits, but the exits that do happen often result in better multiples on invested capital (calculated by dividing the amount of money a company was sold for by the amount of funding it raised from investors).

2018 was a strong year for Chicago startups, and 2019 is shaping up to bring more of the same. Just a couple weeks into the new year, a number of companies have already announced big funding rounds.

Here’s a quick roundup of some of the more notable deals struck so far this year:

Besides these, a number of seed deals have been announced. These include relatively large rounds raised by 3D modeling technology company ThreeKit, upstart futures exchange Small Exchange and 24/7 telemedicine service First Stop Health.

Globally, and in North America, venture deal and dollar volume hit new records in 2018. However, it’s unclear what 2019 will bring. What’s true at a macro level is also true at the metro level. Don’t discount the City of the Big Shoulders, though.

  1. Note that many seed and early-stage deals are reported several months or quarters after a transaction is complete. As those historical deals get added to Crunchbase over time, we’d expect to see deal and dollar volume from recent years rise slightly.
Categories: Business News

Startups Weekly: Squad’s screen-shares and Slack’s swastika

2019, January 19 - 10:00pm

We’re three weeks into January. We’ve recovered from our CES hangover and, hopefully, from the CES flu. We’ve started writing the correct year, 2019, not 2018.

Venture capitalists have gone full steam ahead with fundraising efforts, several startups have closed multi-hundred million dollar rounds, a virtual influencer raised equity funding and yet, all anyone wants to talk about is Slack’s new logo… As part of its public listing prep, Slack announced some changes to its branding this week, including a vaguely different looking logo. Considering the flack the $7 billion startup received instantaneously and accusations that the negative space in the logo resembled a swastika — Slack would’ve been better off leaving its original logo alone; alas…

On to more important matters.

Rubrik more than doubled its valuation

The data management startup raised a $261 million Series E funding at a $3.3 billion valuation, an increase from the $1.3 billion valuation it garnered with a previous round. In true unicorn form, Rubrik’s CEO told TechCrunch’s Ingrid Lunden it’s intentionally unprofitable: “Our goal is to build a long-term, iconic company, and so we want to become profitable but not at the cost of growth,” he said. “We are leading this market transformation while it continues to grow.”

Deal of the week: Knock gets $400M to take on Opendoor

Will 2019 be a banner year for real estate tech investment? As $4.65 billion was funneled into the space in 2018 across more than 350 deals and with high-flying startups attracting investors (Compass, Opendoor, Knock), the excitement is poised to continue. This week, Knock brought in $400 million at an undisclosed valuation to accelerate its national expansion. “We are trying to make it as easy to trade in your house as it is to trade in your car,” Knock CEO Sean Black told me.

Cybersecurity stays hot

While we’re on the subject of VCs’ favorite industries, TechCrunch cybersecurity reporter Zack Whittaker highlights some new data on venture investment in the industry. Strategic Cyber Ventures says more than $5.3 billion was funneled into companies focused on protecting networks, systems and data across the world, despite fewer deals done during the year. We can thank Tanium, CrowdStrike and Anchorfree’s massive deals for a good chunk of that activity.

Send me tips, suggestions and more to kate.clark@techcrunch.com or @KateClarkTweets

Fundraising efforts continue

I would be remiss not to highlight a slew of venture firms that made public their intent to raise new funds this week. Peter Thiel’s Valar Ventures filed to raise $350 million across two new funds and Redpoint Ventures set a $400 million target for two new China-focused funds. Meanwhile, Resolute Ventures closed on $75 million for its fourth early-stage fund, BlueRun Ventures nabbed $130 million for its sixth effort, Maverick Ventures announced a $382 million evergreen fund, First Round Capital introduced a new pre-seed fund that will target recent graduates, Techstars decided to double down on its corporate connections with the launch of a new venture studio and, last but not least, Lance Armstrong wrote his very first check as a VC out of his new fund, Next Ventures.

More money goes toward scooters

In case you were concerned there wasn’t enough VC investment in electric scooter startups, worry no more! Flash, a Berlin-based micro-mobility company, emerged from stealth this week with a whopping €55 million in Series A funding. Flash is already operating in Switzerland and Portugal, with plans to launch into France, Italy and Spain in 2019. Bird and Lime are in the process of raising $700 million between them, too, indicating the scooter funding extravaganza of 2018 will extend into 2019 — oh boy!

Startups secure cash

  • Niantic finally closed its Series C with $245 million in capital commitments and a lofty $4 billion valuation.
  • Outdoorsy, which connects customers with underused RVs, raised $50 million in Series C funding led by Greenspring Associates, with participation from Aviva Ventures, Altos Ventures, AutoTech Ventures and Tandem Capital.
  • Ciitizen, a developer of tools to help cancer patients organize and share their medical records, has raised $17 million in new funding in a round led by Andreessen Horowitz.
  • Footwear startup Birdies — no, I don’t mean Allbirds or Rothy’s — brought in an $8 million Series A led by Norwest Venture Partners, with participation from Slow Ventures and earlier investor Forerunner Ventures.
  • And Brud, the company behind the virtual celebrity Lil Miquela, is now worth $125 million with new funding.

Feature of the week

TechCrunch’s Josh Constine introduced readers to Squad this week, a screensharing app for social phone addicts.

Listen to me talk

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase editor-in-chief Alex Wilhelm and I marveled at the dollars going into scooter startups, discussed Slack’s upcoming direct listing and debated how the government shutdown might impact the IPO market.

More scooter dollars, Slack’s revenue projections and the IPO traffic jam

Want more TechCrunch newsletters? Sign up here.

Categories: Business News

FanDuel co-founder Tom Griffiths just closed a seed round for his decidedly noncontroversial new startup, Hone

2019, January 19 - 6:50am

Tom Griffiths has founded four companies, two of which “weren’t much to write home about,” he jokes. The third captured the world’s attention: FanDuel, the fantasy sports company that was routinely in the press — not always for desirable reasons — from nearly the day it launched, to its near merger with rival DraftKings, to its ultimate sale last May to the European betting giant Paddy Power Betfair in a deal that reportedly saw FanDuel’s founders, along with its employees, walk away with almost nothing at the end of their roller coaster ride.

Little wonder that Griffith’s new, fourth company, Hone, is targeting the comparatively undramatic world of workforce training. Specifically, Hone and his small team have built a platform for modern and distributed teams, inspired largely by FanDuel’s experience of becoming a unicorn at one point in just six years’ time, and growing its team from 5 to 500 people in the process. Looking back, says Griffiths, “We really didn’t have the manager training we wanted or needed.”

In fact, Griffiths had already left the company by the time it was acquired, around his 10th anniversary last year, to “go back to the start.” It was time, he says. FanDuel had grown like a weed. He was exhausted by the many regulators wrestling with whether FanDuel provided a legally acceptable form of gambling. He knew he wanted to work in education, too. “My mom was a teacher,” he offers simply.

Enter Griffith’s newest act, which is just 10 months old at this point. The goal of the San Francisco-based company is to improve people’s skills around leadership management and people management, specifically at companies that already have hundreds of employees and that are dealing with increasingly distributed and diverse teams.

Hone is obviously not the first company tackling the remote management training or team building. The market already attracts tens of billions of dollars each year. But he insists it will be one of the best, including because it’s unlike a lot of what’s available currently. For one thing, Hone is very anti-traditional workshop. Hone also eschews pre-recorded video, working instead with qualified professional coaches who have to audition for Hone and who are already teaching a growing number of customers 12 different modules, typically in online class sizes of eight to a dozen people.

A company simply signs up, chooses from the programs (these include an intensive manager bootcamp, for example, as well as a manager 101 program), then embarks on what are 60- to 90-minute sessions each week for seven weeks.

The idea, in part, is for the learnings to stick. According to Griffiths, trainees forget 70 percent of what they are taught within 24 hours of a training experience. Instilling new lessons and reiterating old ones produces a greater return on investment for Hone’s customers, he suggests.

Hone’s underlying platform is also a differentiator, he says. It contains a reporting interface, so companies can not only see who is in attendance, but they can measure learner feedback through students who are asked afterward to provide the company with details about what they’ve learned. Hone’s software can also track how many questions were asked to assess engagement.

The self-learning platform gives Hone an easier way to assess how successful, or not, a particular module proves to be, and it allows Hone to continue sharpening its products. In fact, Griffiths says that by working with early, paying customers that include WeWork, Clear, App Annie, Dashlane, Omada Health, SoulCycle and others, Hone has already learned much that it intends to bake into future products,.

“We were in pilot mode last year to get product-market fit.” Now, the company is ready for its close-up, he suggests.

Some new funding should help. In addition to taking the wraps off Hone and opening more widely for business, the company just raised $3.6 million in seed funding led by Cowboy Ventures and Harrison Metal. Other participants in the round include Slack Fund, Reach Capital, Rethink Education, Day One Ventures, Entangled Ventures and numerous relevant angel investors, like Masterclass CEO David Rogier and Guild Education CEO Rachel Carlson.

What the 10-month-old company isn’t sharing publicly just yet is its pricing, which may remain flexible in any case. Says Griffiths, “We work with customers to diagnose their needs, then we create a package, one that’s far more reasonable than classroom training. There’s no travel. No instructor having to come to you.”

Griffiths is more forthcoming when it comes to lessons learned at FanDuel. Among these is aligning one’s self with investors who share a company’s values. He points to Cowboy Ventures founder Aileen Lee, calling her a “towering pillar of progressive values, equality, inclusion and diversity.” What he saw at FanDuel, he says, is that “investors can influence culture. So from the board down, you want people who share your same values.”

Griffiths also stresses the “importance of establishing a strong culture and a vision from the start, and to live that every day as you grow.

“It’s something we did well at FanDuel at some times,” he says, “and not so well at other times.”

Hone founders, left to right: Savina Perez, who was formerly a VP of marketing at CultureIQ, a platform that aims to helps companies strengthen their culture; Tom Griffiths; and Jeremy Hamel, who was formerly the head of product at CultureIQ.

Categories: Business News

Sony venture arm invests in geocoding startup what3words

2019, January 19 - 5:20am

Sony’s venture capital arm has invested in what3words, the startup that has divided the entire world into 57 trillion 3-by-3 meter squares and assigned a three-word address to each one.

Financial details were not disclosed.

The startup’s novel addressing system isn’t the whole story. The ability to integrate what3words into voice assistants is what has piqued the interest and investment from Sony and others.

“what3words have solved the considerable problem of entering a precise location into a machine by voice. The dramatic rise in voice-activated systems calls for a simple voice geocoder that works across all digital platforms and channels, can be written down and spoken easily,” Sony Corporation’s senior vice president Toshimoto Mitomo said in a statement.

Last year, Daimler took a 10 percent stake in what3words, following an announcement in 2017 to integrate the addressing system into Mercedes’ new infotainment and navigation system — called the Mercedes-Benz User Experience, or MBUX. MBUX is now in the latest Mercedes A-Class and B-Class cars and Sprinter commercial vehicles. Owners of these new Mercedes-Benz vehicles are now able to navigate to an exact destination in the world by just saying or typing three words into the infotainment system.

Other companies are keen to follow Daimler’s lead. TomTom and ride-hailing services like Cabify recently announced plans to enable what3words navigation to precise locations.

And more could follow. The startup says it plans to use the investment from Sony to focus on more initiatives in the automotive space.

Categories: Business News

Whyd now helps companies create their custom voice assistant

2019, January 18 - 11:43pm

Y Combinator-backed startup Whyd is pivoting from hardware to software. The startup had been working on a connected speaker with a voice-control interface specifically designed for music. But a couple of years later, it’s clear that subsidized voice assistant devices from Google and Amazon have taken over the market.

Whyd is only keeping its own software platform and partnering with other companies. In other words, if you’re working on an app, a website or a skill for the Amazon Echo or Google Home, you can create your own voice assistant to interact with your content.

This way, your users get the same experience across all platforms and you don’t have to rely on Amazon’s or Google’s services.

“We let you integrate with a database of millions of items, create a custom agent and release it,” Whyd co-founder and CEO Gilles Poupardin told me. You can think about it as a sort of Algolia for voice queries. Instead of limiting yourself to basic queries (“play my favorite playlist”), you can handle complicated queries (“I want to dance to electronic music”).

In particular, Whyd focuses on the cloud infrastructure behind your voice assistant. The company doesn’t try to reinvent the wheel and lets you use any speech-to-text SDK. But Whyd can then interpret your query and give you results in little time.

The startup has already worked with 8tracks on its voice assistant. You can now search for music playlists in the mobile app using a voice assistant. Whyd has developed different models for other verticals. You can imagine a voice assistant for video on demand, e-commerce and other services.

This is what happens between your database and your front end when users interact with their voice:

Categories: Business News

SimplyCook dishes up £4.5M Series A for its subscription-based flavourings and recipe service

2019, January 18 - 6:00pm

SimplyCook, the recipe kit service that focuses on flavour ingredients, has closed £4.5 million in Series A funding. The round is led by Octopus Investments.

Unlike other recipe or meal kits, such as HelloFresh, Gousto and Marley Spoon, U.K.-based SimplyCook doesn’t send all of the fresh ingredients required to turn its recipes into food on your table. Instead, the subscription service consists of recipe cards and what SimplyCook calls “ingredients kits,” which are herbs, spices, sauces and other extras needed to cook each meal.

It’s not only a product that potentially has better margins than fresh food recipe kits — by negating the need to manage such perishable goods — SimplyCook founder and CEO Oli Ashness argues that SimplyCook’s flavour kits have broader mass-market appeal, too.

“Flavour products are used by over 50 percent of consumers weekly,” he says. “Whereas fresh food delivery still caters for maybe 0.25-0.5 percent of evening meals in the UK. Flavour already works as a way to get people cooking. Fresh Meal Kits are fairly unproven”.

“I am actually a fan of how some fresh food players are run and their founders, however, I am still not convinced fresh food meal kits will ever be mass market like us due to the level of monthly commitment. Getting people to spend [less than] £10 per month is much easier than asking them to spend £120-£200 per month, in my opinion. It’s going to be much easier for us to build a big base in customer numbers”.

He also makes the valid point that SimplyCook builds on the success of traditional flavour brands, such as Old El paso, Dolmio, Knorr, and Schwartz, “[that] have got millions cooking”.

Related to this, as well as selling subscriptions online, the company has launched SimplyCook recipe kits in physical retail stores. This is seeing it pursue a hybrid online/offline model that Ashness likens to healthy snack company Graze. (Notably, HelloFresh tried selling into grocery stores in the U.K., before cooling on the idea).

Meanwhile, SimplyCook says its Series A funding will be used to invest in technology and sales & marketing, in order to drive continued growth across the U.K. and beyond.

“We also expect this funding round to fuel international launches,” adds the SimplyCook CEO, [and to] provide working capital for the retail business and allow us to invest in technology to aid our operations. These investments we’ll make over the next 2 years”.

Categories: Business News

Flash, the stealthy e-scooter and ‘micro-mobility’ startup from Delivery Hero founder, raises €55M Series A

2019, January 18 - 6:00pm

Flash, the stealthy mobility startup from Delivery Hero and Team Europe founder Lukasz Gadowski, is de-cloaking today, with news that the Berlin-based company has raised a whopping €55 million in Series A funding.

Despite rumours that multiple VC firms would be involved, the bulk of the new funding comes from Target Global via its mobility fund, which led this round and was already an existing backer of Flash. Others participating in Flash’s Series A include Idinvest Partners, Signals Venture Capital and a number of unnamed angel investors.

Notably, Gadowski is listed as an Entrepreneur in Residence at Target Global, and has been broadly working in the mobility space for the past two years. Rather quietly, he is also an investor in Grin, the Mexico City-based electric scooter company backed by Y Combinator.

In a call with Gadowski, he filled in many of the blanks relating to his new venture, including positioning Flash as a “micro-mobility” company that wants to solve the last-mile transportation problem. The startup is initially entering the e-scooter rental space, but this is just the beginning, he says. More broadly, the way he and his team think about Flash is that it is “unbundling” the car, with new forms of transport.

“In a few years time, micro-mobility will look very different from today,” says Gadowski, revealing that before founding Flash last year, he also took a hard look at new forms of aviation.

Even though it is still very early days for Flash, the startup already boasts a current team of more than 50 full-time employees, recruited from the likes of Uber, Amazon, and Airbnb. Alongside Gadowski, the other Flash co-founders are Carlos Bhola (Corp. Development) and Tim Rucquoi-Berger (Supply & Operations).

“This is not a scooter” – Flash branding in stealth mode

Notably — and definitely quietly — Flash is already operating in Switzerland and Portugal, with plans to launch into France, Italy and Spain in spring 2019, and in the rest of Europe in summer 2019.

The existing launches have been soft-launches, to say the least, with Flash e-scooters not initially carrying the company’s branding, instead sporting the label “This is not a scooter,” part in-house word play, part a statement of intent. Not just another scooter company might be an even more apt label if Gadowski’s longer-term ambitions are realised.

Perhaps more of a product-market-fit trial than anything else, Flash has initially used off-the-shelf e-scooters at launch, whilst simultaneously developing its own hardware and technology. The startup is headquartered in Berlin, but Gadowski tells me the team was first posted in China, establishing a supply chain and other partnerships that he believes can help give Flash the edge.

I put to him a common belief amongst some VCs that the e-scooter space in Europe is heading for a bloodbath that will continue to see a huge amount of venture capital pumped into the space, and subsequently many losers and a lot of money lost.

Recent raises by European e-scooter startups include Wind Mobility ($22 million), VOI ($50 million and Tier (€25 million). Meanwhile, Taxify has also announced its entrance into e-scooter rentals, and Bird and Lime have received substantial investment from three of Europe’s top venture capital firms. Index and Accel have backed Bird, and Atomico has backed Lime.

Gadowski appears for the most part unfazed by the swelling of competition coffers, although he does concede that the current “land grab” is forcing Flash to move slightly faster than it might have done otherwise. In some ways, he would have preferred to continue a more staggered, cautious roll-out, describing the startup as “product-first and multi-vehicle,” and says its customers are not just users of the service but local residents more broadly and the authorities with which it needs to coordinate. “Mistakes can be a lot more serious than at Delivery Hero, safety is involved,” he cautions.

The size of recent funding rounds in the space has also surprised him. However, he doesn’t think this is a “Facebook scenario,” where there will only be a single winner. Several micro-mobility companies can happily co-exist, he says, and the early movers are helping to pave the way for others, including Flash.

I suggest that the e-scooter land grab at its current pace also has a high chance of provoking a backlash amongst consumers and/or authorities, perhaps after a more serious safety accident or other source of reputational damage. Gadowski concedes this is definitely a “short-term” risk, but says there is so much determination by governments and local authorities to solve congestion and the last-mile problem, he doesn’t believe it will be a long-term one.

Finally, I asked Gadowski if he is considering acquiring smaller e-scooter startups in Europe (or perhaps elsewhere), as part of a roll-up strategy that would help the company leapfrog competitors. He declined to rule out acquisitions entirely — Delivery Hero was very effective in this regard — but said it doesn’t make much sense right now as hype in the space has pushed valuations way up. A more likely scenario, he says, is investing in or acquiring startups that can help with other aspects of the business, such as in the supply chain.

Categories: Business News

A look at Birdies, the popular slipper shoe startup that just raised $8 million more from investors

2019, January 18 - 5:13am

Bianca Gates is a first-generation American, her parents having immigrated to the U.S. from Latin America. As such, she says, after graduating from UC Irvine, she was expected to get a safe job with a 401(k) plan and to live with her parents until she was married.

Things haven’t gone exactly that way, but one can imagine Gates’s parents feeling pretty satisfied with their daughter’s trajectory nevertheless. The reason: Gates, along with cofounder Marisa Sharkey, are the cofounders of Birdies, a four-year-old, San Francisco-based footwear brand that has made it chic to step out in shoes like look like elegant slippers, and which just raised $8 million in Series A funding led by Norwest Venture Partners, with participation from Slow Ventures and earlier investor Forerunner Ventures.

Sure, another e-commerce brand, why should you care? Actually, if haven’t seen the shoes out in the wild, there’s a high likelihood that will change soon, including because one of the company’s biggest advocates to date has been none other than Meghan Markle, the actress turned Duchess of Sussex, whose fashion choices are copiously detailed by fashion sites around the world, copied by their readers, then picked up by readers’ friends.

Interestingly, Markle was never meant to step outside in the slippers. But let’s back up a bit first, to Gates’s earlier career, a familiar story that underscores the value of grit — as well as the importance of making the right connections.

As Gates tells it from Birdie’s offices on Union Street, a kind of yuppie haven in San Francisco, “My family was living in Santa Ana and I was commuting every day to Irvine and I just wanted to spread my wings and move to a big city with a lot of diversity after graduating.” Thanks partly to her fluency in Spanish, she landed a job with the broadcast giant Univision as an account executive. After more than three years, and “realizing I didn’t want to be typecast as an Hispanic person working for Hispanic TV,” she left for Viacom, where Gates fell for a colleague.

He landed soon after at Stanford Business School, and after plenty of cross-country flights, the two married and moved to San Francisco to start their family, with Gates opening up an office for Viacom’s MTV in the process. But she was soon feeling antsy again. “It was really convenient for me, but I [felt] after having my first chid and working out of a satellite office that I was out of the action. I wanted to be closer to people.”

As it happens, she caught a 2011 commencement speech that Facebook COO Sheryl Sandberg delivered to Barnard College students and decided to apply to Facebook. Six months later, she landed a job leading retail partnerships, where she helped sales organizations understand what was then a new platform to them.

She also made powerful friends, including Priti Youssef Choksi, a Facebook colleague who was striking corporate and business development deals and who Gates befriended over a series of events at the home of Sandberg, who quietly hosted employees who Sandberg identified as eager to do more with their careers. “You didn’t photograph yourself there or talk about [the dinners], but it helped Priti and I form a deeper friendship,” recalls Gates.

The friendship — and Sandberg’s support — would eventually help get Birdies off the ground.

So did Gates’s obsession with finding post-work, pre-slipper-type shoes, which she says dates back a decade. “I just found that more and more, I was being asked to take off my shoes in friends’ homes and I was asking people to do the same. I thought that stylish shoes for indoors made a lot of sense,” but she wasn’t sure if there was a void in the market, or if she just imagined one.

She decided to pursue the idea while recognizing that she couldn’t do it alone. She still had that big job at Facebook that she loved. She also had two young kids at home at this point. So Gates texted her friend, Marisa Sharkey, a former Ross Stores executive who’d moved from Manhattan to Sacramento with her own family and was feeling restless. “I texted her and said, ‘I have this crazy idea; I’ll call you tomorrow.’ Marisa texted back immediately and said, ‘Tell me what it is.'” Within no time at all, Sharkey was fully committed, putting $50,000 into the venture, alongside Gates, who also put $50,000 into the venture.

What they got for their money? Shoes that today give them both “PTSD,” jokes Gates, but that became the starting point of Birdies.

It wasn’t so easy, but some key connections made the difference, one of which surfaced through good-old-fashioned outreach.  “We basically became so obsessed with our idea that we asked everyone we talked with whether they could help. Through degrees of separation, we were connected to someone who’d just retired from the footwear business in L.A and knew some factories in China and agreed to help introduce us to them.”

It was a game changer, even if what the factories were left working with wasn’t exactly pretty. Think shoes torn apart, their innards — including their memory foam inserts — reassembled on construction paper. “The shoe industry is very small and it’s really hard to get into a factory unless you know someone,” says Gates. “It isn’t like making apparel, where you can go to a factory in South San Francisco and make 24 dresses and see how it goes. With footwear, you can’t try in small doses.”

Of course, there were still many learnings to come, starting with the realization that they had nowhere to store the 1,800 pairs of shoes they’d had to order — and which arrived sooner than expected outside of Sharkey’s home. (They wound up housed in her garage.)

Gates also began worrying about losing her full-time job, eventually writing Sandberg to explain that she was responsible for a garage piled high with slipper shoes that she hoped to sell — then fretting about what the return email would say. As it happens, Sandberg “could have been more supportive. I even forwarded her note to my manager, saying, look, Sheryl is cool with this,” says Gates, laughing.

Fast forward several years, and Birdies is now a a legitimate, if surprisingly small, operation, one with just six employees but a big and fast-growing base of customers.

Its very first customer, Gate’s Facebook friend, Choksi, wound up being an important champion. Choksi left Facebook last year to become a venture capitalist. And as a partner with Norwest Venture Partners, she just led the firm into Birdie’s competitive Series A round, a development about which she sounds excited. “Even that first pair — they didn’t look like the random shoes i was putting on with what i was wearing at home,” recalls Choksi. “I could also get the mail and do quick errands.” She still has them, she says. “They’re fairly worn out, but I keep them to taunt Bianca.”

Meanwhile, Meghan Markle helped put the company on the map. A short lifestyle piece about Birdies in the SF Chronicle got the ball rolling. “We started to gain traction,” and with that came the nascent attention of fashion editors and celebrity stylists, says Gates. But the company still had very limited resources. It had to choose one celebrity on which to focus and it zeroed in on Markle, then an actor starring in a show called “Suits.”

“We just loved her casual elegance,” says Gates of Markle, whose courtship with with Prince Harry was on no one’s radar at the time. “We loved that she often wore simple button-downs and jeans and casual loafers. We also liked that she was this humanitarian.” Birdies sent Markle a complimentary pair of shoes, and to its great delight, Markle took to them. In fact, she began wearing them all them time and tagging them on Instagram, too.

There was just one problem. Markle was wearing them everywhere other than indoors. “It was this amazing, frustrating moment for the brand, because they were made for entertaining in the home.” They might have stewed longer, but a quick call with Bonobos founder Andy Dunn — who’d attended Stanford with Gates’s husband — soon set Gates and Sharkey straight. “He basically said, ‘You just fell into a much bigger opportunity.'”

A thicker rubber soul followed — along with a $100,000 check from Dunn —  and the rest is history in the making. Not that it’s all a walk in the park, naturally. The company has at times had waitlists of up to 30,000 people — a problem it hopes its new round of funding will help solve.

As happens with many new brands, it’s also wrestling with price points, offering several limited edition shoes in partnership with designer Ken Fulk last fall that “brought in a whole new customer” but were also priced at $165, roughly 30 percent more than most of its slippers, says Gates. (Birdies more recently introduced a “resort” slipper that’s priced at $95, and Gates says the company hopes to introduce other, more affordable designs down the line.)

There’s also the challenge of figuring out which new markets to chase while simultaneously hiring, fast. Choksi and Norwest, which has reach into many consumer brands, is helping on the latter front. Meanwhile, Gates says to expect more in the way of bridesmaids’ slippers, as well as other new designs coming this spring and summer.

Like another e-commerce footwear startup that’s taking off  — Rothy’s — which has filed a patent infringement suit against a rival, Birdies also seems poised to see more copycat designs.

Asked about this, Gates doesn’t seem terribly concerned, not yet. “We’ve had friends tell us that Target is offering a similar slipper at a different price point. Everybody copies everybody,” she says. “It’s our job to create a brand beyond the silhouette of a slipper, because that can be knocked off, it’s not defensible. What is defensible is why [a customer] is buying Birdies, and why she is telling her friends to shop us. It’s our job to give her more than a product, to lift her up.”

Birdies has now raised roughly $10 million altogether, including $2 million in seed funding led by Forerunner in the fall of 2017.

Above, left to right, cofounders Bianca Gates and Marisa Sharkey. Photo courtesy of Birdies.

Categories: Business News

Slack’s product chief is out ahead of direct listing

2019, January 18 - 3:45am

Slack is losing its chief product officer April Underwood ahead of a direct listing expected in 2019. Tamar Yehoshua, a long-time Google vice president, has been tapped to fill Underwood’s shoes as Slack’s new product chief.

Underwood joined Slack, the provider of workplace communication tools, in 2015 as its head of platform after a five-year stint as Twitter’s director of product. She was promoted to the chief product role about 10 months ago. Underwood is also a founding partner of #Angels, an investment collective that pushes to get more women on startup cap tables.

In a Medium post announcing her departure from Slack, Underwood said she planned to focus on investing full time.

“One common story you hear when you talk to founders is that their idea ran as a background process for many years until it moved into the foreground and became a calling too loud to ignore,” Underwood wrote. “And now, I can truly empathize with founders — because that’s happened for me. Investing, which started as a side hustle for me and my #Angels partners, has emerged as the pursuit too inspiring and energizing to be relegated to my spare time.”

During her tenure, Underwood had a hand in crafting Slack’s investment fund — a pool of capital supported by Accel, Index Ventures, KPCB, Social Capital, Andreessen Horowitz and Spark Capital that has invested in 49 projects building on top of Slack to date.

Slack, led by founder and chief executive officer Stewart Butterfield, is said to be preparing for a direct listing, meaning it will go public without listing any new shares, with no lockup period and no intermediary bankers. Valued at roughly $7 billion, Slack has raised more than $1 billion to date from GV, IVP, T. Rowe Price, SoftBank, Kleiner Perkins, Accel and others.

Behold, Slack’s new logo

Categories: Business News

SeeTree raises $11.5M to help farmers manage their orchards

2019, January 18 - 2:48am

SeeTree, a Tel Aviv-based startup that uses drones and artificial intelligence to bring precision agriculture to their groves, today announced that it has raised an $11.5 million Series A funding round led by Hanaco Ventures, with participation from previous investors Canaan Partners Israel, Uri Levine and his investors group, iAngel and Mindset. This brings the company’s total funding to $15 million.

The idea behind the company, which also has offices in California and Brazil, is that in the past, drone-based precision agriculture hasn’t really lived up to its promise and didn’t work all that well for permanent crops like fruit trees. “In the past two decades, since the concept was born, the application of it, as well as measuring techniques, has seen limited success — especially in the permanent-crop sector,” said SeeTree CEO Israel Talpaz. “They failed to reach the full potential of precision agriculture as it is meant to be.”

He argues that the future of precision agriculture has to take a more holistic view of the entire farm. He also believes that past efforts didn’t quite offer the quality of data necessary to give permanent crop farmers the actionable recommendations they need to manage their groves.

SeeTree is obviously trying to tackle these issues and it does so by offering granular per-tree data based on the imagery gathered from drones and the company’s machine learning algorithms that then analyze this imagery. Using this data, farmers can then decide to replace trees that underperform, for example, or map out a plan to selectively harvest based on the size of a tree’s fruits and its development stages. They can then also correlate all of this data with their irrigation and fertilization infrastructure to determine the ROI of those efforts.

“Traditionally, farmers made large-scale business decisions based on intuitions that would come from limited (and often unreliable) small-scale testing done by the naked eye,” said Talpaz. “With SeeTree, farmers can now make critical decisions based on accurate and consistent small and large-scale data, connecting their actions to actual results in the field.”

SeeTree was founded by Talpaz, who like so many Israeli entrepreneurs previously worked for the country’s intelligence services, as well as Barak Hachamov (who you may remember from his early personalized news startup my6sense) and Guy Morgenstern, who has extensive experience as an R&D executive with a background in image processing and communications systems.

Categories: Business News

Dreaming of Mars, the startup Relativity Space gets its first launch site on Earth

2019, January 18 - 2:15am

3D-printing the first rocket on Mars.

That’s the goal Tim Ellis and Jordan Noone set for themselves when they founded Los Angeles-based Relativity Space in 2015.

At the time they were working from a WeWork in Seattle, during the darkest winter in Seattle history, where Ellis was wrapping up a stint at Blue Origin . The two had met in college at USC in their jet propulsion lab. Noone had gone on to take a job at SpaceX and Ellis at Blue Origin, but the two remained in touch and had an idea for building rockets quickly and cheaply — with the vision that they wanted to eventually build these rockets on Mars.

Now, more than $35 million dollars later, the company has been awarded a multi-year contract to build and operate its own rocket launch facilities at Cape Canaveral Air Force Station in Florida.

That contract, awarded by The 45th Space Wing of the Air Force, is the first direct agreement the U.S. Air Force has completed with a venture-backed orbital launch company that wasn’t also being subsidized by billionaire owner-operators.

By comparison, Relativity’s neighbors at Cape Canaveral are Blue Origin (which Jeff Bezos has been financing by reportedly selling $1 billion in shares of Amazon stock since 2017); SpaceX (which has raised roughly $2.5 billion since its founding and initial capitalization by Elon Musk); and United Launch Alliance, the joint venture between the defense contracting giants Lockheed Martin Space Systems and Boeing Defense.

Like the other launch sites at Cape Canaveral, Launch Complex 16, where Relativity expects to be launching its first rockets by 2020, has a storied history in the U.S. space and missile defense program. It was used for Titan missile launches, the Apollo and Gemini programs and Pershing missile launches.

From the site, Relativity will be able to launch its first designed rocket, the Terran 1, which is the only fully 3D-printed rocket in the world.

That rocket can carry a maximum payload of 1,250 kilograms to a low earth orbit of 185 kilometers above the Earth. Its nominal payload is 900 kilograms of a Sun-synchronous orbit 500 kilometers out, and it has a 700 kilogram high-altitude payload capacity to 1,200 kilometers in Sun-synchronous orbit. Relativity prices its dedicated missions at $10 million, and $11,000 per kilogram to achieve Sun-synchronous orbit.

If the company’s two founders are right, then all of this launch work Relativity is doing is just a prelude to what the company considers to be its real mission — the advancement of manufacturing rockets quickly and at scale as a test run for building out manufacturing capacity on Mars.

“Rockets are the business model now,” Ellis told me last year at the company’s offices at the time, a few hundred feet from SpaceX. “That’s why we created the printing tech. Rockets are the largest, lightest-weight, highest-cost item that you can make.”

It’s also a way for the company to prove out its technology. “It benefits the long-term mission,” Ellis continued. “Our vision is to create the intelligent automated factory on Mars… We want to help them to iterate and scale the society there.”

3D printed rocket maker Relativity raises $35M to simplify satellite launches

Ellis and Noone make some pretty remarkable claims about the proprietary 3D printer they’ve built and housed in their Inglewood offices. Called “Stargate,” the printer is the largest of its kind in the world and aims to go from raw materials to a flight-ready vehicle in just 60 days. The company claims that the speed with which it can manufacture new rockets should pare down launch timelines by somewhere between two and four years.

Another factor accelerating Relativity’s race to market is a long-term contract the company signed last year with NASA for access to testing facilities at the agency’s Stennis Space Center on the Mississippi-Louisiana border. It’s there, deep in the Mississippi delta swampland, that Relativity plans to develop and quality control as many as 36 complete rockets per year on its 25-acre space.

All of this activity helps the company in another segment of its business: licensing and selling the manufacturing technology it has developed.

“The 3D factory and automation is the other product, but really that’s a change in emphasis,” says Ellis. “It’s always been the case that we’re developing our own metal 3D printing technology. Not only can we make rockets. If the long-term mission is 3D printing on Mars, we should think of the factory as its own product tool.”

Not everyone agrees. At least one investor I talked to said that in many cases, the cost of 3D printing certain basic parts outweighs the benefits that printing provides.

Still, Relativity is undaunted.

But first, the company — and its competitors at Blue Origin, SpaceX, United Launch Alliance and the hundreds of other companies working on launching rockets into space again — need to get there. For Relativity, the Canaveral deal is one giant step for the company, and one great leap toward its ultimate goal.

“This is a giant step toward being a launch company,” says Ellis. “And it’s aligned with the long-term vision of one day printing on Mars.”

Categories: Business News

Pro.com raises $33M for its home improvement platform

2019, January 18 - 1:30am

Pro.com is basically a general contractor for the age of Uber and Prime Now. While the company started as a marketplace for hiring home improvement professionals, it has now morphed into a general contractor and serves Denver, Phoenix, San Francisco, San Jose and Seattle. Today, Pro.com announced that it has raised a $33 million Series B round led by WestRiver Group, Goldman Sachs and Redfin. Previous investors DFJ, Madrona Venture Group, Maveron and Two Sigma Ventures also participated.

WestRiver founder Erik Anderson, Redfin CEO Glenn Kelman and former Microsoft exec Charlotte Guyman are joining the Pro.com board.

“Many of Redfin’s customers struggle to get professional renovation services, so we know firsthand that Pro.com’s market opportunity is massive,” writes Redfin’s Kelman. “Pro.com and Redfin share a commitment to combining technology and local, direct services to best take care of customers.”

The company tells me that the round caps off a successful 2018, where Pro.com saw its job bookings grow by 275 percent over 2017, a number that was also driven by its expansion beyond the Seattle market (as well as the good economic climate that surely helped in driving homeowners to tackle more home improvement projects). The company now has 125 employees.

With this funding round, Pro.com has now raised a total of $60 million. It’ll use the funding to enter more markets, with Portland, Oregon being next on the list, and expand its team as it goes along.

It’s no secret that the home improvement market could use a bit of a jolt. The market is extremely local and fragmented — and finding the right contractor for any major project is a long and difficult process, where the outcome is never quite guaranteed. The process has enough vagaries that many people never get around to actually commissioning their projects. Pro.com wants to change that with a focus on transparency and technology. That’s a startup that’s harder to scale than the marketplace the company started out with, but it also gives the company a chance to establish itself as one of the few well-known brands in this space.

Categories: Business News

Squad is the new screensharing chat app everyone will copy

2019, January 18 - 1:15am

Squad could be the next teen sensation because it makes it easy to do nothing… together. Spending time with friends in the modern age often means just being on your phones next to each other, occasionally showing off something funny you found. Squad lets you do this even while apart, and that way of punctuating video chat might make it the teen girl “third place” like Fortnite is for adolescent boys.

With Squad, you fire up a video chat with up to six people, but at any time you can screenshare what you’re seeing on your phone instead of showing your face. You can browse memes together, trash talk about DMs or private profiles, brainstorm a status update, co-work on a project or get consensus on your Tinder swipe. It’s deceptively simple, but remarkably alluring. And it couldn’t have happened until now.

How Squad screensharing looks

Squad takes advantage of Apple’s ReplayKit for screensharing. While it was announced in 2015, it wasn’t until June 2018’s iOS 12 that ReplayKit became stable and easy enough to be built into a consumer app for teens. Meanwhile, plus-size screens and speedy LTE and upcoming 5G networks make screensharing watchable. And with Instagram aging and Snapchat shrinking, there’s demand for a more intimately connected social network.

Squad only launched its app last week, but droves of Facebook and Snap employees have signed up to spy on and likely copy the startup, co-founder and CEO Esther Crawford tells me. Screensharing would fit well in group video chat startup Houseparty too. To fuel its head start, Squad has the $2.2 million it raised before it pivoted away from Molly, the team’s previous App where people can make FAQs about themselves. That cash came from betaworks, Y Combinator, BBG Ventures, Basis Set Ventures, Jesse Draper, Gary Vaynerchuk, Niv Dror, and [Disclosure: former TechCrunch editor] Alexia Bonatsos’ Dream Machine. Next, Squad wants to let people tune in to screenshares via URL to unlock a new era of Live broadcasting, and equip other apps with the capability through a Squad SDK.

“People under 24 do video chat way different than people 25 and above” says Crawford. Adding screensharing is “an excuse for hanging out.”

Serious ideas are preludes to toys

Screensharing has long been common in enterprise communication apps like Webex, Zoom and Slack. I even called a collaborative browsing and desktop screensharing app my favorite project from Facebook’s 2011 college hackathon. But we don’t just use our screens for work any more. Teens and young adults live on the digital plane, navigating complex webs of friendships, entertainment and academia through their phones. Squad makes those experiences social — including the “social” networks we often scroll through in isolation. Charles and Ray Eames said “Toys are preludes to serious ideas,” but this time, it is happening in reverse.

Squad co-founders from left: Ethan Sutin, Esther Crawford

“The idea came from a combination of things — a pain we were experiencing as a team,” Crawford recalls. My development team is constantly sending each other screenshots and screen recordings. It seemed ridiculous that I can’t just show you what’s on my screen. It was a business use case internally.” But then came the wisdom of a 13-year-old. “My daughter over the summer was bugging me. ‘Why can’t I just show what’s on my screen with my friends?’ I said I think it’s not technically possible.” That’s when Crawford discovered advances in ReplayKit meant it suddenly was possible.

Crawford had already seen this cycle of tool to toy before, as she was an early YouTuber. Back in the mid-2000s, people thought of YouTube as a place to host videos about eBay listings, professional presentations or dating profile supplements. “They couldn’t imagine that if you let people just reliably and easily upload video content, there’d be all these creative enterprises.”

Use cases for Squad

After stints in product marketing at Coach.com and Stride Labs, she built Estherbot — a chatbot version of herself that let people learn about her. Indeed, 50,000 people ended up trying it, convincing her people needed new ways to reveal themselves to friends. She met Ethan Sutin through the project and together they co-founded FAQ app Molly before it fizzled out and was shut down. “Molly wasn’t working; it had high initial engagement sessions, but then they would drop off. Maybe it’s not the right time for the augmented version of you,” noted Crawford.

Crawford and Sutin pivoted Molly into Squad to keep exploring new formats for vulnerability. “What excited Ethan and I was this mission to help people feel less lonely.”

Alone, together

Squad recommends apps to screenshare

Squad worked, thanks to a slick way to activate screensharing. The app launches to the selfie camera similar to Snapchat, but with a + button for inviting friends to a video call. Tap the screenshare button at the bottom, select Squad and start the broadcast. To guide users toward the best screensharing experiences, a menu of apps emerges encouraging users to open Instagram, TikTok, Bumble, their camera roll and others.

People can bounce back and forth between screensharing and video chat, and tap a friend’s window to view it full-screen. And when they want another friend to see what they’re seeing, Squad goes viral. One concern is that Squad breaks privacy controls. You could have friends show you someone’s Instagram profile you’re blocked by or aren’t allowed to see. But the same goes for hanging out in person, and this is one reason Squad doesn’t let you download videos of your chats and is considering screenshot warnings.

What’s so special about Squad is that it lacks the intensity of traditional video chat, where you constantly feel pressured to perform. You can fire up a chat room, and then go back to phoning as you please with your screen displayed instead of your blank face (though the Android version in beta offers picture-in-picture so you can show your mug and the screen).

“There’s no picture-in-picture on iOS, but younger users don’t even really care. I can point it at the bed and you can tell me when there’s something to look at,” Crawford tells me. A few people, alone in their houses, video chatting without looking at each other, still feel a sense of togetherness.

The future of Squad could grant that feeling to a massive audience of a celebrity or influencer. The startup is working on shareable URLs that creators could post on other social networks like Twitter or Facebook that their fans could click to watch. Tagging along as Kylie Jenner or Ninja play around on their phone could bring people closer to their heroes while serving as a massive growth opportunity for Squad. Similarly, colonizing other apps with an SDK for screensharing could allow Squad to recruit their users.

Squad makes starting a screenshare easy

The startup will face stiff technical challenges. Lag or low video quality destroy the feeling of delight it delivers, Crawford admits, so the team is focused on making sure the app works well even in rural areas like middle America where many early users live. But the real test will be whether it can build a new social graph upon the screensharing idea if already popular apps build competing features. Gaming tools like Discord and Twitch already offer web screensharing, and I suggested Facebook should bring the feature to Messenger when in late-2017 it launched in its Workplace office collaboration app.

Helping a friend choose when to swipe right on Tinder via Squad

In June I wrote that Instagram and Snapchat would try to steal the voice-activated visual effects at the center of an app called Panda. Snapchat started testing those just two months later. Instagram’s whole Stories feature was cloned from Snapchat, and it also cribbed Q&A Stories from Polly. Overshadowed, Panda and Polly have faded from the spotlight. With Facebook and Snap already sniffing around Squad, it’s quite possible they’ll try to copy it. Squad will have to hope first-mover advantage and focus can defeat a screensharing feature bolted on to apps with hundreds of millions or even billions of users.

But regardless of who delivers this next phase of sharing, it’s coming. “Everyone knows that the content flooding our feeds is a filtered version of reality. The real and interesting stuff goes down in DMs because people are more authentic when they’re 1:1 or in small group conversations,” Crawford wrote.

Perhaps there’s no better antidote to the poison of social media success theater that revealing that beyond the Instagram highlights, we’re often just playing around on our phones. Squad might not be glamorous, but it’s authentic and a lot more fun.

Categories: Business News

Index has backed Immersive Games Lab, a new startup from founder of Tough Mudder

2019, January 17 - 11:42pm

Immersive Games Lab, a new venture from Tough Mudder co-founder and chairman Will Dean, has picked up around £2.5 million in seed funding, TechCrunch has learned. According to sources, London-based Index Ventures led the round.

In a call confirming the close, Dean told me Sweet Capital and JamJar Investments (the VC fund set up by the 3 Innocent Drinks founders) also participated.

Developing the “next generation” of immersive group gaming, Immersive Games Lab describes itself as “part indoor theme park, part video game, part escape room,” and says it will launch a new breed of “captivating group experiences” in London in early 2019.

Little else is known regarding what Immersive Games Lab’s first experience will be, although Dean told me it will be sold in retail spaces, in ticket form and will be a blend of technology and in-person group activity. It is currently being prototyped and tested in a warehouse in North London.

More broadly, he said the idea of creating a new kind of immersive gaming experience is partly based on the sentiment that we spend too much screen time on our devices, consuming social media in a way that isn’t always good for our mental health.

His previous and hugely successful venture Tough Mudder was all about creating a new, fun experience around exercise — and ultimately helping people become more physically active. Dean says he is keen for Immersive Games Lab to also make a positive dent on people’s lives.

The new venture also builds nicely on Dean’s track record of creating an experience and community-led consumer proposition, and implementing the type of go-to market strategy that that requires — which is undoubtedly what caught the interest of Index and other investors, in what I understand was an oversubscribed round.

Immersive Games Lab’s other co-founder is David Spindler, who also played a key role at Tough Mudder.

Categories: Business News

Former Facebook engineer picks up $15M for AI platform Spell

2019, January 17 - 11:00pm

In 2016, Serkan Piantino packed up his desk at Facebook with hopes to move on to something new. The former Director of Engineering for Faceboook AI Research had every intention to keep working on AI, but quickly realized a huge issue.

Unless you’re under the umbrella of one of these big tech companies like Facebook, it can be very difficult and incredibly expensive to get your hands on the hardware necessary to run machine learning experiments.

So he built Spell, which today received $15 million in Series A funding led by Eclipse Ventures and Two Sigma Ventures.

Spell is a collaborative platform that lets anyone run machine learning experiments. The company connects clients with the best, newest hardware hosted by Google, AWS and Microsoft Azure and gives them the software interface they need to run, collaborate, and build with AI.

“We spent decades getting to a laptop powerful enough to develop a mobile app or a website, but we’re struggling with things we develop in AI that we haven’t struggled with since the 70s,” said Piantino. “Before PCs existed, the computers filled the whole room at a university or NASA and people used terminals to log into a single main frame. It’s why Unix was invented, and that’s kind of what AI needs right now.”

In a meeting with Piantino this week, TechCrunch got a peek at the product. First, Piantino pulled out his MacBook and opened up Terminal. He began to run his own code against MNIST, which is a database of handwritten digits commonly used to train image detection algorithms.

He started the program and then moved over to the Spell platform. While the original program was just getting started, Spell’s cloud computing platform had completed the test in under a minute.

The advantage here is obvious. Engineers who want to work on AI, either on their own or for a company, have a huge task in front of them. They essentially have to build their own computer, complete with the high-powered GPUs necessary to run their tests.

With Spell, the newest GPUs from NVIDIA and Google are virtually available for anyone to run their test.

Individual users can get on for free, specify the type of GPU they need to compute their experiment, and simply let it run. Corporate users, on the other hand, are able to view the runs taking place on Spell and compare experiments, allowing users to collaborate on their projects from within the platform.

Enterprise clients can set up their own cluster, and keep all of their programs private on the Spell platform, rather than running tests on the public cluster.

Spell also offers enterprise customers a ‘spell hyper’ command that offers built-in support for hyperparameter optimization. Folks can track their models and results and deploy them to Kubernetes/Kubeflow in a single click.

But, perhaps most importantly, Spell allows an organization to instantly transform their model into an API that can be used more broadly throughout the organization, or or used directly within an app or website.

The implications here are huge. Small companies and startups looking to get into AI now have a much lower barrier to entry, whereas large traditional companies can build out their own proprietary machine learning algorithms for use within the organization without an outrageous upfront investment.

Individual users can get on the platform for free, whereas enterprise clients can get started for $99/month per host you use over the course of a month. Piantino explains that Spell charges based on concurrent usage, so if the customer has 10 concurrent things running, the company considers that the ‘size’ of the Spell cluster and charges based on that.

Piantino sees Spell’s model as the key to defensibility. Whereas many cloud platforms try to lock customers in to their entire suite of products, Spell works with any language framework and lets users plug and play on the platforms of their choice by simply commodifying the hardware. In fact, Spell doesn’t even share with clients which cloud cluster (Microsoft Azure, Google, or AWS) they’re on.

So, on the one hand the speed of the tests themselves goes up based on access to new hardware, but, because Spell is an agnostic platform, there is also a huge advantage in how quickly one can get set up and start working.

The company plans to use the funding to further grow the team and the product, and Piantino says he has his eye out for top-tier engineering talent as well as a designer.

Categories: Business News

On-demand workspace platform Breather taps new CEO

2019, January 17 - 11:00pm

Breather’s new CEO Bryan Murphy / Breather Press Kit

Breather, the platform that provides on-demand private workspace, announced today that it has appointed Bryan Murphy as its new CEO.

Before joining Breather, Murphy was the founder and President of direct-to-consumer mattress startup, Tomorrow Sleep. Prior to Tomorrow Sleep, Murphy held posts as an advisor to investment firms and as an executive at eBay after the company acquired his previous company, WHI Solutions – an e-commerce platform for aftermarket auto parts – where Murphy was the co-founder and CEO.

Breather believes Murphy’s extensive background scaling e-commerce and SaaS platforms, as well as his experience working with incumbents across a number of traditional industries, can help it execute through its next stage of global growth.

Murphy is filling the vacancy left by co-founder and former CEO Julien Smith, who stepped down as chief executive this past September, just three months after the company completed its $45 million Series C round, which was led by Menlo Ventures and saw participation from RRE Ventures, Temasek Holdings, Ascendas-Singbridge, and Caisse de Depot et Placement du Quebec.

In a past statement on his transition, Smith said: “As I reflect on my strengths and consider what it will take for the company to reach its full potential, I realize bringing on an executive with experience scaling a company through the next level of growth is the best thing for the business.”

Smith, who remains with the company as Chairman of the Board, believes Murphy more than fits the bill. “Bryan’s record of scaling brands in competitive markets makes him an ideal leader to support this momentum, and I’m excited to see where he takes us next,” Smith said.

In a conversation with TechCrunch, Murphy explained that Breather’s next growth phase will ultimately come down to its ability to continue the global expansion of its network of locations and partner landlords while striking the optimal balance between rental economics and employee utility, productivity and performance. With new spaces and ramped marketing efforts, Murphy and the company expect 2019 to be a big year for Breather – “I think this year, you’re going to start hearing a lot about Breather and it really being in a leadership role for the industry.”

Breather’s workspace at 900 Broadway in New York City is one of 500+ network locations accessible to users.

On Breather’s platform, users are currently able to access a network of over 500 private workspaces across ten major cities around the world, which can be booked as meeting space or short-term private office space.

Meeting spaces can be reserved for as little as 30 minutes, while office space can be booked on a month-to-month basis, providing businesses with financial flexibility, private and more spacious alternatives to coworking options, and the ability to easily change offices as they grow. For landlords, Breather allows property owners to generate value from underutilized space by providing a turnkey digital booking system, as well as expertise in the short-term rental space.

Murphy explained to TechCrunch that part of what excited him most about his new role was his belief in Breather’s significant product-market fit and the immense addressable market that he sees for flexible workspaces longer-term. With limited penetration to date, Murphy feels the commercial office space industry is in just the third inning of significant transformation. 

Murphy believes that long-term growth for Breather and other flexible space providers will be driven by a heightened focus on employee flexibility and wellness, a growing number of currently underserved companies whose needs fall between coworking and traditional direct leasing, and the need for landlords to support a wider variety of office space options as workforce demographics and behaviors shift. 

Murphy believes that the ease, flexibility and unlocked value Breather provides puts the platform in a great position to win share.

“Breather has built a remarkable commercial real estate e-commerce and services platform that offers one-click access to over 500 workspaces around the world,” said Murphy in a press release. “To our customers, having access to workspace that is turnkey, affordable, beautiful, productive and that can flex up and down based on needs is a total game changer.”

To date, Breather has served over 500,000 customers and has raised over $120 million in investment.

Categories: Business News

Alation announces $50M Series C investment as data catalog biz takes off

2019, January 17 - 11:00pm

Alation, a startup that helps crawl a company’s databases in order to build a data search catalogue, announced a $50 million Series C investment today.

The round was led by Sapphire Ventures and Salesforce Ventures. Existing investors Costanoa Ventures, DCVC (Data Collective), Harmony Partners and Icon Ventures also participated. Today’s investment brings the total raised to $82 million, according to Crunchbase data.

The participation of Sapphire Ventures, originally launched by SAP, and Salesforce Ventures, the venture arm of Salesforce, is particularly telling. One of the issues these enterprise software companies face when they go inside large enterprises is helping customer access and understand data wherever it lives. It’s one of the reasons that Salesforce bought Mulesoft for $6.5 billion last year.

This is a problem that employees face, as well. It’s simply inefficient to query multiple databases manually, or to even know what databases exist inside a large organization. Alation uses out-of-the-box connectors to connect to common data sources like Oracle, Redshift, Teradata, Spark and Tableau to create a centralized data catalog.

With that catalog in place, employees can search just as they would with any enterprise search engine with the notable difference that this tool is focussed strictly on structured data inside of supported data sources.

The company goes beyond pure matching to find the data an employee is searching for. Company CEO and co-founder Satyen Sangani says they also use a method to analyze usage to display the most likely result. “What differentiates us in particular is that we look at the logs of how people are using that information,” he explained. This is analogous to how Google uses the PageRank algorithm to measure the popularity of a page based on the number of times people link to a page.

Alation catalog page. Screenshot: Alation

It is certainly not alone in the space with competitors like Alteryx and Informatica, but Alation’s approach seems to be resonating. Sangani reports triple-digit growth 4 years running. The company has soared from 89 employees at the end of last year to around 200 today. It boasts 100 large enterprise customers in production including names like BMW, Hilton, American Express and Salesforce (whose investment arm, Salesforce Ventures, notably also helped lead today’s round).

As the company grows rapidly, Sangani says he wants the capital in place to help fuel the increasing interest. The size and scope of his customers means that he will need to hire not just engineers to keep developing the product and building new connectors, but customer support and sales and marketing. In all, he expects add between 100 and 200 employees in the next year.

He also wants to continue building out partnerships. As an example, Teradata is an authorized reseller, and has helped sell the product in global markets where a startup like Alation might lack the resources to enter.

The company, which is based in in Redwood City, California, launched in 2012 and released the first version of the product in 2014. Its most recent round prior to today was a $23 million Series B in 2017.

Categories: Business News

Innovaccer nabs $11 million from Microsoft’s VC arm to give doctors a better window into patient health

2019, January 17 - 8:30pm

Cracking the silos of digital health records promises to bring better care to patients by better informing doctors, according to Abhinav Shashank, the chief executive officer of San Francisco-based startup Innovaccer.

Shashank’s company is just wrapping up a $35 million round of financing with a new $11 million commitment from Microsoft’s investment arm M12 (formerly known as Microsoft Ventures).

The corporate investor joins Westbridge and Lightspeed Partners, which previously committed to the Series B round last year.

Founded in 2014, Innovaccer has been working to roll up data from a number of different healthcare providers, including Hartford Healthcare, University of California, Mercy ACO Iowa, UniNet Healthcare Network of Nebraska, Inmediata Health Integrated Solutions of Puerto Rico and StratiFi Health Network.

Innovaccer estimates that it has saved its customers $400 million in expenses; the company said it will use the funds to build out its software services that connect to lab systems, electronic health records, claims management software and health information exchanges.

“Innovaccer’s approach to data aggregation and analytics fundamentally helps healthcare organizations implement value-based care models and improve care delivery,” said Rashmi Gopinath, partner at M12, in a statement. “We look to invest in startups addressing huge markets with best-in-class deep technology. We are excited to support Innovaccer as they continue to scale and grow in the global healthcare market.”

In addition to providing a unified view into all of the different records that a care provider touches, the company is also looking to layer in prompts to encourage treatment options for future care, according to Shashank.

According to the company’s chief executive, care providers are already incorporating suggestions from the company’s algorithmically based predictive tools in their treatment plans to ensure that patients are getting the best possible outcomes.

“It is rare to see this type of growth in the healthcare industry. Normally, this is only seen in the fastest of enterprise SaaS companies. We think there is tremendous potential to bring the speed and innovation normally associated with enterprise software to the world of healthcare IT,” says Sumir Chadha, managing director at Westbridge Capital.

Categories: Business News

German HR and recruiting platform Personio raises $40M Series B led by Index

2019, January 17 - 6:00pm

Personio, the German HR and recruiting platform, has raised $40 million in a Series B funding. Leading the round is London-based Index Ventures, with participation from existing investors Northzone and Rocket Internet’s Global Founders.

Founded in 2015, Munich-based Personio has set out to build a “HR operating system” for small and medium-sized companies (SMEs) ranging from 10 and 2,000 employees. The cloud-based software is designed to power all of a company’s HR and recruiting processes, either via the product’s own core functionality or through its ability to integrate with third-party software.

“We believe in the benefit of a holistic HR solution that covers the entire employee life-cycle, while its functionalities need to adapt to individual customer requirements and processes,” Personio co-founder and CEO Hanno Renner tells me.

“That being said, we distinguish between the bread-and-butter HR activities which every company needs to do (e.g. recruiting, on boarding, time off management, payroll etc.) and those that are either industry-specific or rather nice-to-haves”.

Examples of the latter include hardware-based time tracking, and employee engagement, respectively. “We focus our efforts on providing a best-in-class experience for what we consider bread-and-butter HR,” adds Renner. “For more specific requirements, we let our customers choose from a growing number of integrated vertical solutions based on their needs. Data will be synced so Personio acts as the system of record for all HR information and information only needs to be entered once”.

In addition to “out of the box” third-party software integrations, Personio’s claim to offer a HR operating system is backed up by the company’s open API, which is designed to cover various use cases where accessing data that is stored in Personio can add further value to customers. This includes building something as simple as a Slack bot using Personio data, to connecting Personio to a company’s data-warehouse or deeper integrations with internal systems.

More broadly, Renner says this holistic approach, coupled with Personio’s workflow automation that aims to cut down on time wasted on repetitive tasks, is not only resonating with HR managers and recruiters who typically use the product for several hours per day, but is also finding use with managers, executives and other employees. The end result is that HR and recruitment processes can become much more distributed across a company.

To that end, Personio says its Series B funding will be used to help the company attempt to become Europe’s leading provider of human resources software for SMEs. It boasts more than 1,000 clients in 35 countries, seeing over 150,000 employees and several hundred thousand applicants currently being managed within Personio.

“We believe that now is the right timing to actively expand into further regions and the funding as well as Index expertise will certainly help making that move successful,” adds the Personio CEO. “Apart from that, we consider ourselves a product-driven company and hence want to continue to strongly invest into building the best product for our customers which will mean significantly growing our product & engineering team and potentially even opening a new office to facilitate hiring”.

Categories: Business News

Pages