blogger better: 2019-09-08

Saturday, September 14, 2019

How to get your ads working, and whether PR is worth it

Help TechCrunch offer a valuable new tool for startups (by taking this quick survey)

It’s hard to find the expert help you need right at the clutch moment when you’re building your startup. We’re trying to solve that problem through a product we’ve been developing this year, called Verified Experts — and we’d like to get some more input on it from startup people like you.

As in real life, where you ask your professional network for recommendations, we’re asking startup founders to tell us who the lawyers, growth marketers, brand designers and other experts are who have made/are making a big difference for their company. We use these collective recommendations plus our own research to identify the best experts. Then we publish profiles on the site about them, run guest columns from them that readers have been loving, on topics like growth tactics, immigration tips and term sheet issues.

Now, we’re ramping up this effort — and we’d like to get a little more detail from you about the way that you find and work with startup service providers today.

Please take this 2-minute survey and tell us more.

Beyond helping us to create something that can support startup founders everywhere, you’ll also get a discount to Extra Crunch — and two lucky winners will get full-access Innovator Pass tickets to Disrupt in SF next month.

https://ift.tt/eA8V8J Help TechCrunch offer a valuable new tool for startups (by taking this quick survey) https://ift.tt/2NhYsCr

Startups Weekly: Part & Parcel plans plus-sized fashion empire

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about Stripe’s grand plans. Before that, I noted Peloton’s secret weapons.

Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

Startup spotlight

The best companies are built by people who have personally experienced the problem they’re attempting to solve. Lauren Jonas, the founder and chief executive officer of Part & Parcel, is intimately familiar with the struggles faced by the women she’s building for.

San Francisco-based Part & Parcel is a plus-sized clothing and shoe startup providing dimensional sizing to women across the U.S. The company operates a bit differently than your standard direct-to-consumer business by seeking to include the women who wear and evangelize the Part & Parcel designs by giving them a cut of their sales.

Here’s how it works: Ambassadors sign up to receive signature styles from Part & Parcel, which they then share and sell to women in their network. Ultimately, the sellers are eligible to receive up to 30% of the profit per sale. The out-of-the-box model, which might remind you somewhat of Mary Kay or Tupperware’s business strategy, is meant to encourage a sense of community and usher in a new era in which plus-sized women can facilitate other plus-sized women’s access to great clothes.

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“I bought a brown men’s polyester suit and wore it to an interview,” Jonas, an early employee at Poshmark and the long-time author of the popular blog, ‘The Pear Shape,’ tells TechCrunch. “I was that kid wearing a men’s suit.”

Clothing tailored to plus-sized women has long been missing from the retail market. Increasingly, however, new brands are building thriving businesses by catering precisely to the historically forgotten demographic. Dia&Co., for example, raised another $70 million in venture capital funding last fall from Sequoia and USV. And Walmart recently acquired another brand in the space, ELOQUII, for an undisclosed amount. Part & Parcel, for its part, has raised $4 million in seed funding in a round led by Lightspeed Venture Partners’ Jeremy Liew.

The startup launched earlier this year in Anchorage, “a clothing desert,” and has since grown its network to include women in several other underserved markets. Given her own history struggling to find a fitted woman’s suit, Jonas launched her line with structured pieces, including suits and blouses — though the startup’s biggest success yet, she says, has been its boots, which come in three different calf width options.

“Seventy percent of women in this country are plus-sized,” Jonas said. “I’m bringing plus out of the dark corner of the department store.”

This week in VC

Image: Bryce Durbin / TechCrunch

Must read

TechCrunch’s Megan Rose Dickey published a highly anticipated deep dive on the state of sex tech this week. The piece provides new data on funding in sex tech and wellness companies, analysis on sex tech startup’s battle for public advertising and responses from industry leaders on how we can destigmatize sex with technology. Here’s a short passage from the story:

Cindy Gallop sees a market opportunity in every type of business obstacle she encounters. That’s why All The Sky will also seek to invest in startups that tackle the infrastructural tools needed to fuel sextech, like payments, hosting providers and e-commerce sites.

“I want to fund the sextech ecosystem to maintain and sustain a portfolio for All the Skies, to create a bloody huge sextech ecosystem and three, to monopolistically build out the ecosystem to be a multi-trillion-dollar market,” Gallop says.

On my radar

I swung by Contrary Capital‘s Demo Day this week, in which a number of startups gave a 4- to 5-minute pitch. Next on my list is Alchemist‘s Demo Day in Menlo Park. The accelerator welcomes enterprise startups for a six-month program focused on early customer adoption, company development and mentorship.

Also on my radar is Females To The Front. The event began this week in Palm Springs and if I were based in SoCal, I would have swung by. Led by Amy Margolis, the event is said to be the largest gathering of female cannabis founders and funders to date. Here’s how the group describes the event: “Females to the Front Retreat will mix immersive and hands-on workshops, pitch training, investment deck preparation and business skill set education with investor meetings and plenty of shared meals, pool time, yoga, connections, rest and rejuvenation. Every workshop is built to directly engage attendees instead of powerpoint and panels. Be prepared to return home inspired, engaged and with so many more tools in your toolbox.”

For the record, I don’t advertise events in my newsletter just wanted to give props to this one because it’s a great development for the cannabis tech ecosystem.

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Time to Disrupt

We are just weeks away from our flagship conference, TechCrunch Disrupt San Francisco. We have dozens of amazing speakers lined up. In addition to taking in the great line-up of speakers, ticket holders can roam around Startup Alley to catch the more than 1,000 companies showcasing their products and technologies. And, of course, you’ll get the opportunity to watch the Startup Battlefield competition live. Past competitors include Dropbox, Cloudflare and Mint… You never know which future unicorn will compete next.

You can take a look at the full agenda here. And if you still need convincing, here’s five reasons to attend this year’s conference from our COO himself.

And finally… #EquityPod

This week, the lovely Alex Wilhelm, editor-in-chief of Crunchbase News, and I gathered to discuss a number of topics including WeWork’s IPO and Uber’s attempts to bypass a new law meant to protect gig workers. Listen here.

https://ift.tt/32GfLRl Startups Weekly: Part & Parcel plans plus-sized fashion empire https://ift.tt/2I9ftux

Cloudflare co-founder Michelle Zatlyn on the company’s IPO today, its unique dual class structure, and what’s next

Shares of Cloudflare rose 20% today in its first day of trading on the public market, opening trading at $18 after it priced its IPO at $15 a share yesterday and holding steady through the day.

Put another way, the performance of the nine-year-old company — which provides cloud-based network services to enterprises — was relatively undramatic as these things go. That’s a good thing, given that first-day “pops” often signal that a company has left money on the table. Indeed, Cloudflare had initially indicated that its shares would be priced between $10 and $12, before adjusting the price upward, which suggests its underwriters, led by Goldman Sachs, accurately gauged demand for the offering.

Of course, it was still a very big day for Cloudlfare’s 1,069 employees and especially for Cloudflare’s founders Matthew Prince, its CEO, and Michelle Zatlyn, its COO. We talked with Zatlyn today in the hours after the duo rang the opening bell to ask about the experience, and how the IPO impacts the company going forward.

Our chat has been edited lightly for length and clarity.

TC: Thanks for making time for us on a busy day.

MZ: Of course! [TechCrunch’s] Battlefield [competition, in which Cloudflare competed in 2011] is such an integral part of our funding story. Thank you for giving us the stage to launch our company.

TC: Did you get any sleep last night?

MZ: I was so exhausted that I got a great night’s sleep. This whole process has been so incredible, so special. I didn’t know what to expect, and it’s been way better than I could have imagined. There are 150 of our teammates, early employees, family members, board members, champions and other friends here with us [in New York at the NYSE]. We also live-streamed [our debut] to our offices around the world so they could share this moment with us.

TC: How are you feeling about today? The stock is up 20%. There’s always banter afterward about whether a listing was priced right, whether any money was left on the table.

MZ: At this point, we’ve raised almost a billion dollars between today and all of the money we’ve raised from venture investors. We have a great team. We’re really happy. The markets are going to react how they react, but it’s part of our DNA to provide more value than we capture. We think that’s the way to build an enduring company.

TC: You have a liquid currency now. Do you imagine Cloudflare might become more acquisitive as a public company?

MZ: We’ve done some acquisitions on the smaller side and of course, we have a team that’s always looking at different opportunities. But we’re really engineering-driven, and we think we have many products and services left to build, so we’ll continue to invest in our products and in R&D development, as well as in our customer relationships.

TC: Retaining employees is a challenge that some newly public companies worry about. How will you address this in the coming days and months as lock-up periods expire?

MZ: I’m so proud of where we are today and of our whole team, and we’re just getting started. [Matthew and I will] show up Monday morning and get back to work and so will our employees, because they want to make the company [an even greater business].

TC: The company went public with a dual-class structure that gives not just management but all employees 10 times the voting rights of the shares sold to the public. Why was this structure important to Cloudflare, and did it give investors pause?

MZ: There are more than 1,000 people around the world who are building the product and working with customers, and we think it’s important for them to have that 10:1 structure, so it’s something we put in place a few years ago with the encouragement of some of our earlier investors.

TC: Were you modeling this after another company? Is there a precedent for it?

MZ: I don’t know of another one — there may be — but we weren’t inspired by another company. We just felt passionately about this being the right corporate structure and [I don’t think it was harder for us to tell the story of Cloudflare because of it]. Over the last two weeks, in talking with investors across the world, it wasn’t in the top 10 topics that came up, so I think we did a good job of describing it in our S-1.

TC: What was the roadshow like? What surprised you most?

MZ: Don’t get me wrong, there’s a ton of work involved from all kinds of people, in finance, our legal teams … But roadshows have a bad rap in that people think they’re grueling and that, by the end, you’ll be exhausted. That was my expectation. But it was really fun. It was a huge privilege to represent Cloudflare to all these investors who were incredibly smart and well-prepared. We traveled all over and people told us ‘You look better than most teams.’

Michelle Zatlyn

TC: Where does one go for these roadshows?

MZ: You have the usual suspects; there’s a travel roadshow circuit, with some variations based on people’s vacation schedules, but New York, San Francisco, Boston, Chicago, Baltimore is common, Kansas City, Indianapolis, Toronto. You go in person to some places and in others, people dial in. But the whole thing gave me new insight into these pools of capital after venture capital. It was really interesting.

TC: Cloudflare said in a recent amendment to its S-1 that it was in touch with the U.S. Treasury’s Office of Foreign Assets Control back in May after determining that its products were used by individuals and entities that have been blacklisted by the U.S. Did this new revelation slow anything down?

MZ: There was no impact. Your group of advisors expands when you go through a public offering, and lawyers dot every ‘i’ and cross every ‘t,’ and you become a better company for it.

We deliver cybersecurity solutions that are made broadly available to businesses, entrepreneurs and nonprofits, and that’s incredible, but there are also some unsavory actors online, and we’ve always been a transparent organization [about having to grapple with this].

TC: How will Cloudflare handle requests for service by embargoed and restricted entities going forward? As a public company, does that process change in any way?

MZ: We have a really good process today. I think people think that we let anyone use Cloudflare and that’s it. But if customers are breaking the law, we remove them from our network and that’s not new and we publish transparency reports on it.

Sometimes, [you’re confronting] things that aren’t illegal but they’re gross, and the question is whose job is it to take it offline. But I work with some of the smartest minds on this and we try to be very transparent about how we figure this out. The conversation is so much better than it was a few years ago, too, with policy makers and academics and the business community engaging on this. People around the world are talking about where the lines can be drawn, but these are tricky, heady conversations.

TC: They certainly put Cloudflare in a precarious spot sometimes, as when the company banned the internet forum 8chan earlier this year after it was learned that the site was used by a gunman to post an anti-immigration rant. Can we expect that Cloudflare will continue to make decisions like this on a case-by-case basis?

MZ: Freedom of speech is such a fundamental part of this nation. Citizens should want the lawmakers to decide what the law should be, and if lawmakers could do this, it would be much better. On the other side, these are new issues that are arising so we shouldn’t rush. Lots of opinions need to be weighed and conversations are much further along than they once were, but there’s still work to be done, and Cloudflare is one [participant] in a much broader conversation.

https://ift.tt/32FkeDP Cloudflare co-founder Michelle Zatlyn on the company’s IPO today, its unique dual class structure, and what’s next https://ift.tt/300rnB4

MoviePass will shut down on September 14th

MoviePass’ all-you-can-watch movie theater membership always seemed too good to be true. After multiple price hikes, business model changes, temporary shutdowns and raising a mountain of money less than a year ago, the company seems to be calling it quits.

MoviePass has issued an announcement letting customers know that the service will stop working as of September 14th — so, tomorrow — because “its efforts to recapitalize MoviePass have not been successful to date.”

For the past few months, MoviePass had existed in a weird sort of zombie state; some customers in some regions were still able to use it, but no new subscribers were being accepted. Not helping the matter any, a database with “tens of thousands” of MoviePass customer card numbers was found unsecured at the end of August.

The company says it’s exploring “all strategic and financial alternatives,” from a massive “reorganization” to a sale of the company and all of its assets. In the meantime, though, it sounds like the service is dead, effective pretty much immediately.

Story developing…

https://ift.tt/2JcZBGX MoviePass will shut down on September 14th https://ift.tt/2LtddQQ

How to work with top influencers and avoid ad blockers

Despite tipping policy changes, DoorDash says back pay is not ‘at issue here’

When DoorDash announced changes in its tipping model last month, it was certainly a step in the right direction. Some workers, however, have said it’s not enough. In addition to wanting fair wages, they want back pay.

In light of DoorDash’s announcement, labor group Working Washington said a key question remained: “Will they pay workers backpay for the customer tips the company has been misappropriating since 2017?”

“There’s no ‘back pay’ at issue here because every cent of every tip on DoorDash has always gone and will always go to Dashers,” a DoorDash spokesperson told TechCrunch via email in response to a question about whether or not DoorDash would back pay its delivery workers.

When Instacart changed its tipping practices earlier this year, it also retroactively compensated shoppers when tips were included in the payment minimums. DoorDash, however, does not see the need for back pay.

“An independent third-party research firm has confirmed that Dashers were paid as was explained on our website and in our app: Dashers received a minimum base bay from DoorDash, plus 100% of customer tips, plus additional pay for some orders to reach the guaranteed minimum,” the spokesperson said. “A reminder that under our old model, DoorDash would boost pay if a customer left little or no tip. Although boost pay was intended to help Dashers, we recognize that it also had the unintended effect of making some customers feel like their tips didn’t matter. Under our new model, every dollar a customer tips will be an extra dollar in their Dasher’s pocket.”

Additionally, DoorDash says it will increase the amount it pays on average through base pay and bonuses. Ideally, that will increase overall earnings for Dashers.

“This commitment is incredibly important to us, which is why we’ll be working with that same independent third party to ensure that Dasher earnings under this new model increase,” the spokesperson said.

As DoorDash previously announced, the new payment policies will go into effect this month following feedback from its tests. Since the announcement, however, DoorDash has put $30 million toward a campaign committee to establish a 2020 ballot initiative that would enable companies to provide workers benefits, establish wage commitments and guarantees, offer flexibility and establish that drivers are not employees. Lyft and Uber have also each put $30 million into the initiative. Meanwhile, gig worker protections bill AB5 passed.

AB5 would help to ensure gig economy workers are entitled to minimum wage, workers’ compensation and other benefits by requiring employers to apply the ABC test. The bill, first introduced in December 2018, aims to codify the ruling established in Dynamex Operations West, Inc. v Superior Court of Los Angeles. In that case, the court applied the ABC test and decided Dynamex wrongfully classified its workers as independent contractors.

According to the ABC test, in order for a hiring entity to legally classify a worker as an independent contractor, it must prove the worker is free from the control and direction of the hiring entity, performs work outside the scope of the entity’s business and is regularly engaged in an “independently established trade, occupation, or business of the same nature as the work performed.”

The bill has yet to be signed into law, but Governor Gavin Newsom is expected to do so. Moving forward, we can surely expect DoorDash to continue advocating for its independent worker model. We can also expect organizers from Working Washington to keep advocating for better wages and protections.

https://ift.tt/eA8V8J Despite tipping policy changes, DoorDash says back pay is not ‘at issue here’ https://ift.tt/306mRBj

India’s OkCredit raises $67M to help small merchants digitize their bookkeeping

OkCredit, a Bangalore-based startup that enables small merchants to digitize their bookkeeping, has raised $67 million in a new financing round to grow its business in the nation.

The Series B financing round for the two-year-old startup was led by Lightspeed and Tiger Global. The new round, which follows the Series A in June, climbs OkCredit’s total raise to $83 million.

OkCredit operates an eponymous mobile app that allows merchants to keep track of their day-to-day purchases and sales. Last month, OkCredit founders told TechCrunch in an interview that the app had amassed over 5 million active merchants across 2,000 cities in India.

Amy Wu, a partner at Lightspeed US, said OkCredit’s active users have grown 76 times since the beginning of the year. It’s one of the fastest growing companies we’ve seen and reflects the incredible virality and network effects of the business.” Wu added.

A wide range of merchants from roadside vendors to grocery shop owners and pharmacies have joined OkCredit.

Even as more than 500 million users in India today are online, most merchants in the nation are yet to digitize their business, according to industry estimates. They still rely on large notebooks to keep a log of their transactions.

“Technology has moved from collecting payments in cash, to using point-of-sale machines. More recently, QR codes, paper bills turned to printed bills. But the one thing that has not changed is the fact that most customers still purchase goods on credit recorded in a notebook,” Harsh Pokharna, chief executive of OkCredit said in a statement.

Pokharna told TechCrunch today that the startup will use the capital to hire more people and grow its merchant userbase. The startup also plans to build more products for merchants.

Vyapar and Khatabook are two more startups in India that are attempting to solve a similar problem.

In a statement, Harsha Kumar, a partner at Lightspeed, said, “technology adoption in India will happen across sectors and segments. For the longest time, mSME as a segment was ignored but we have seen through Udaan, OkCredit and other Lightspeed investments in the SME space that tech usage is growing rapidly. Very excited and honored to have a front row seat in this journey!”

https://ift.tt/eA8V8J India’s OkCredit raises $67M to help small merchants digitize their bookkeeping https://ift.tt/300RoA6

Calculating sales efficiency in a start-up: The magic number that will help you scale

Space is the next economic frontier… hear more about it at Disrupt SF

For decades space has been the playplace for world powers, but the advent of (relatively) cheap and frequent rocket launches has opened it up for new business opportunities. But it’s still hard as hell, as early adopters of this orbital economy Tess Hatch of Bessemer Ventures, Swarm’s Sara Spangelo, and OneWeb’s Adrian Steckel can attest. They’ll be on the Extra Crunch stage at Disrupt SF 2019 on October 3rd at 1:40 PM.

Spangelo and Steckel are in the midst of launching what have been termed “mega-constellations,” collections of hundreds or thousands of satellites offering a coordinated service, in their cases global connectivity. These efforts are only possible with the new launch economy, and came hot on its heels, showing there’s no reason to wait to put new plans in action.

But such constellations bring their own challenges. Just from an orbital logistics point of view, launching a single satellite so that it enters a unique and predictable trajectory is hard enough; launching a dozen or a hundred at once is more difficult by far. And after launch, how will those satellites be tracked? How will they communicate to the surface and each other? What about the growing risk of collisions?

On top of that are more terrestrial, but no less crucial, questions: What services can be made available from orbit? What’s a reasonable amount to spend on them? How will they compete with and accommodate one another? Whose regulations will they follow?

These latter questions are among those that must also be answered by investors like Hatch, who is familiar with both the technical and capital side of the burgeoning space industry (and of course the technical side of the capital side). Space ventures can be extremely expensive and high-risk, but to get your foot in the door at this stage could be the start of a billion-dollar advantage a couple years down the line.

If you’re planning on getting involved with the new space economy, or are just curious about it, join us for an extended discussion and Q&A on the 3rd.

Disrupt SF runs October 2 to October 4 at the Moscone Center in San Francisco. Tickets are available here, and they just happen to be available at a discount today only.

https://ift.tt/eA8V8J Space is the next economic frontier… hear more about it at Disrupt SF https://ift.tt/31hDwz6

Boston gets a new biotech accelerator with the launch of Petri

As biotechnology becomes more central to new innovations in healthcare, material science, and manufacturing, one of the nation’s research hubs is getting a new accelerator called Petri to launch companies focused on the commercialization of new technologies.

Backed by the Boston-based venture capital firm, Pillar, Petri has a three-year $15 million commitment to back companies developing new biotech applications in food, healthcare, industrial chemicals, and new materials — along with the enabling technologies to bring these products to market.

“We’re at the inflection point where these technologies will impact and continue to impact health but will also impact food, agriculture, chemicals and materials,” says Petri co-founder, Tony Kulesa. “Everything we touch has some element of biology.”

Pillar has already invested in a couple of companies that show the potential promise of new biotech research coming from Boston-based universities like Boston University, Harvard and the Massachusetts Institute of Technology.

Asimov,io, a company that has set an ultimate goal of designing new genomes for industrial applications, was co-founded by graduates from Boston University and MIT, and is a part of the Pillar portfolio. PathAi, a company working on enabling technologies for computational biology, also counts an MIT grad as a co-founder. Meanwhile, Harvard’s George Church has been instrumental in the development of a number of biotech companies working at the frontier of genetic applications for healthcare and manufacturing.

Kulesa, an instructor at MIT spent seven years at MIT watching, in his words, how engineering has transformed biology. “It became clear to me that these technologies need to get out in the world,” says Kulesa.

Joining Kulesa as a managing director is Brian Baynes, a serial entrepreneur who founded Midori Health, an animal nutrition startup; Kaleido Biosciences, a microbiome control focused company; Celexion, a protein engineering and synthetic biology company; and Codon Devices, a synthetic biology toolkit company which was sold to Ginkgo Bioworks.

Over time, Kulesa and Baynes expect to have 10 to 20 companies in each cohort as the program expands. In addition to checks of at least $250,000 the Petri accelerator has lab space for each company and office space available.

The companies also could benefit from potential partnerships with companies like Gingko Bioworks, which happens to share office space in the same building, and with the accelerator’s clutch of big-name advisors and “co-founders” recruited from across the life sciences industry.

These co-founders who collectively hold a double-digit equity stake in Petri’s accelerator include Reshma Shetty, from Ginkgo Bioworks; Emily Leproust of Twist Bioscience; Stan Lapidus who was at Exact Sciences and Cytyc; Daphne Koller, the co-founder and chief executive of Insitro; Alec Nielsen the founder Asimov; and researchers Chris Voigt of MIT, and Pam Silver and George Church from Harvard’s Wyss Institute.

Genetically engineered organisms are finding their way into everything from food to fuel to chemistry. Companies like Impossible Foods, which uses genetically modified soy product, has raised hundreds of millions for its protein replacement, while Solugen, a manufacturer of chemicals using genetically modified organisms, has raised tens of millions to commercialize its technology. And Ginkgo Bioworks has raised nearly half a billion dollars to pursue applications for industrial biology.

https://ift.tt/eA8V8J Boston gets a new biotech accelerator with the launch of Petri https://ift.tt/2LvMF1x

24-hour Friday flashback on Disrupt SF passes

We here at TechCrunch love a good flashback, like when Sebastian Thrun’s puppy, Charlie, was in the spotlight during Thrun’s fireside chat at Disrupt SF a few years ago.

Sebastian Thrun (Udacity) at TechCrunch Disrupt SF 2017

Since then, the serial entrepreneur and inventor seems to have doubled down on his vision of the future of transportation with his current flying car company, Kitty Hawk Corporation. Thrun is working on bringing two aircraft to market — the one-person Flyer and a two-person autonomous taxi called Cora. He (along with a stellar line up of startup leaders) will be at Disrupt SF this year to give a behind the scenes look at Kitty Hawk and what the future of flight might look like.

In this same vein, we’re doing our own Flashback Friday by rolling back to early bird prices for Disrupt SF. For today only, you’ll have the chance to save up to $1,300 on your pass with even bigger savings when you bring your whole team along for the ride. Need more reasons to attend? We’ll give you five.

The excitement of Disrupt SF begins in just a few short weeks – don’t let this chance to attend the largest startup conference in Silicon Valley pass you by and register today. Who knows, we might even have a chance to see Charlie return to the limelight.

https://ift.tt/32Kzu2f 24-hour Friday flashback on Disrupt SF passes https://ift.tt/34M8gui

WeWork and Uber are proof valuations are meaningless

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week Kate and Alex were back to cover a lot of late-stage news, which they rounded up with some early-stage notes towards the end. As a reminder, come check out the show at Disrupt SF if you are in town, we’ll be out amongst startups, chatting all things startups and money.

Up top, we dug into WeWork and the latest from the company’s continuing IPO saga. The question regarding the co-working company’s public offering has changed to whether the IPO will happen this year, not just at what price the firm can entice enough investment to actually get public.

Alex has written about the company’s cash appetite a few times now, which raise the question of how long the company can survive without some sort of large, external investment. If SoftBank is willing to commit more capital is an open question.

Moving along to Uber, the firm underwent layoffs again this week. More than 400 people, or 8% of the operations, were cut as the company attempts to streamline operations, cut costs and, well, take baby steps toward profitability.

Turning to the early-stage part of the world, there’s a new early-stage-focused venture fund out there, Work Life Ventures, which intends to put small checks into promising SaaS companies. The firm is led by SaaS School founder Brianne Kimmel, a well-known angel investor in the enterprise space. So far she’s backed three companies out of the fund, including recent Y Combinator standout Tandem.

We finished off the episode with… cereal. A company called Magic Spoon (their website is here, as promised) raised $5.5 million this week for its D2C breakfast business. Our take is that the price point is a bit too high for comfort in its current iteration. It’ll be interesting to see if the startup can lower its prices now that it has new capital.

We’ll be back in a week! Chat soon, and please stop telling us to become angel investors!

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Spotify, Pocket Casts, Downcast and all the casts.

https://ift.tt/eA8V8J WeWork and Uber are proof valuations are meaningless https://ift.tt/2Q3f6rF

Element AI raises $151M on a $600-700M valuation to help companies build and run AI solutions

While tech giants like Google and Amazon build and invest in a multitude of artificial intelligence applications to grow their businesses, a startup has raised a big round of funding to help those that are not technology businesses by nature also jump into the AI fray.

Element AI, the very well-funded, well-connected Canadian startup that has built an AI systems integrator of sorts to help other companies develop and implement artificial intelligence solutions — an ‘Accenture’ for machine learning, neural network-based solutions, computer vision applications, and so on — is today announcing a further 200 million Canadian dollars ($151.3 million) in funding, money that it plans to use to commercialise more of its products, as well as to continue working on R&D, specifically working on new AI solutions.

“Operationalising AI is currently the industry’s toughest challenge, and few companies have been successful at taking proofs-of-concept out of the lab, imbedding them strategically in their operations, and delivering actual business impact,” said Element AI CEO Jean-François (JF) Gagné in a statement. “We are proud to be working with our new partners, who understand this challenge well, and to leverage each other’s expertise in taking AI solutions to market.”

The company did not disclose its valuation in the short statement announcing the funding, nor has it ever talked about it publicly, but PitchBook notes that as of its previous funding round of $102 million back in 2017, it had a post-money valuation of $300 million, a figure a source close to the company confirmed to me. From what I understand the valuation now is between $600 million and $700 million, a mark of how Element AI has grown that’s especially interesting, considering how quiet is has been.

The funding is being led by Caisse de dépôt et placement du Québec (CDPQ), along with participation from McKinsey & Company and its advanced analytics company QuantumBlack; and the Québec government. Previous investors DCVC (Data Collective), Hanwha Asset Management, BDC (Business Development Bank of Canada), Real Ventures and others also participated, with the total raised to date now at C$340 million ($257 million). Other strategic investors in the company have included Microsoft, NVIDIA and Intel.

Element AI was started under an interesting premise that goes something like this: AI is the next major transformational shift — not just in computing, but in how businesses operate. But not every business is a technology business by DNA, and that creates a digital divide of sorts between the companies that can identify a problem that can be fixed by AI and build/invest in the technology to do that; and those that cannot.

Element AI opened for business from the start as a kind of “AI shop” for the latter kinds of enterprises, to help them identify areas where they could build AI solutions to work better, and then build and implement those solutions. Today it offers products in insurance, financial services, manufacturing, logistics and retail — a list that is likely to get longer and deeper with this latest funding.

One catch about Element AI is that company has not been very forthcoming about its customer list up to now — those that have been named as partners include Bank of Canada and Gore Mutual, but there is a very notable absence of case studies or reference customers on its site.

However, from what we understand, this is more a by-product of the companies (both Element AI and its customers) wishing to keep involvement quiet for competitive and other reasons; and in fact there are apparently a number of large enterprises that are building and deploying long-term products working with the startup. We have also been told big investors in this latest round (specifically McKinsey) are bringing in customers of their own by way of this deal, expanding that list. Total bookings are a “significant double digit million number” at the moment.

“With this transaction, we are investing capital and expertise alongside partners who are ideally suited to transform Element AI into a company with a commercial focus that anticipates and creates AI products to address clients’ needs,” said Charles Émond, EVP and Head of Québec Investments and Global Strategic Planning at la Caisse, in a statement. CDPQ launched an AI Fund this year and this is coming out of that fund to help export more of the AI tech and IP that has been incubated and developed in the region. “Through this fund, la Caisse wants to actively contribute to build and strengthen Québec’s global presence in artificial intelligence.”

Management consultancies like McKinsey would be obvious competitors to Element AI, but in fact, they are turning out to be customer pipelines, as traditional system integrators also often lack the deeper expertise needed in newer areas of computing. (And that’s even considering that McKinsey itself has been investing in building its own capabilities, for example through its acquisition of the analytics firm QuantumBlack.

“For McKinsey, this investment is all about helping our clients to further unlock the potential of AI and Machine Learning to improve business performance,” said Patrick Lahaie, Senior Partner and Montreal Managing Partner for McKinsey & Company, in a statement. “We look forward to collaborating closely with the talented team at Element AI in Canada and globally in our shared objective to turn cutting-edge thinking and technology into AI assets which will transform a wide range of industries and sectors. This investment fits into McKinsey’s long-term AI strategy, including the 2015 acquisition of QuantumBlack, which has grown substantially since then and will spearhead the collaboration with Element AI on behalf of our Firm.”

https://ift.tt/eA8V8J Element AI raises $151M on a $600-700M valuation to help companies build and run AI solutions https://ift.tt/2I2ic92

Another high-flying, heavily funded AR headset startup is shutting down

While Apple and Microsoft strain to sell augmented reality as the next major computing platform, many of the startups aiming to beat them to the punch are crashing and burning.

Daqri, which built enterprise-grade AR headsets, has shuttered its HQ, laid off many of its employees and is selling off assets ahead of a shutdown, former employees and sources close to the company tell TechCrunch.

In an email obtained by TechCrunch, the nearly 10-year-old company told its customers that it was pursuing an asset sale and was shutting down its cloud and smart-glasses hardware platforms by the end of September.

“I think the large majority of people who worked [at Daqri] are sad to see it closing down,” a former employee told TechCrunch. “[I] wish the end result was different.”

The company’s 18,000+ square foot Los Angeles headquarters (above) is currently listed as “available” by real estate firm Newmark Knight Frank. The company’s Sunnyvale offices appear to have been shuttered sometime prior to 2019.

Daqri’s shutdown is only the latest among heavily funded augmented reality startups seeking to court enterprise customers.

Earlier this year, Osterhout Design Group unloaded its AR glasses patents after acquisition talks with Magic Leap, Facebook and others stalled. Meta, an AR headset startup that raised $73 million from VCs including Tencent, also sold its assets earlier this year after the company ran out of cash.

An AR glasses pioneer collapses

Daqri faced substantial challenges from competing headset makers, including Magic Leap and Microsoft, who were backed by more expansive war chests and institutional partnerships. While the headset company struggled to compete for enterprise customers, Daqri benefitted from investor excitement surrounding the broader space. That is, until the investment climate for AR startups cooled.

Daqri was, at one point, speaking with a large private-equity firm about financing ahead of a potential IPO, but as the technical realities facing other AR companies came to light, the firm backed out and the deal crumbled, we are told.

As of mid-2017, a Wall Street Journal report detailed that Daqri had raised $275 million in funding. You won’t find many details on the sources of that funding, other than references to Tarsadia Investments, a private-equity firm in Los Angeles that took part in the company’s sole disclosed funding round. We’re told Tarsadia had taken controlling ownership of the firm after subsequent investments.

Augmented Reality Startup Daqri Raises $15M More, Troy Carter Joins Advisory Board

In early 2016, Daqri acquired Two Trees Photonics, a small UK startup that was building holographic display technologies for automotive customers. The UK division soon comprised a substantial portion of the entire company’s revenues, sources tell us. By early 2018, the division was spun out from Daqri as a separate company called Envisics, leaving the Daqri team to focus wholly on bringing augmented reality to enterprise customers.

The remaining head-worn AR division failed to gain momentum after prolonged setbacks in adoption of its AR smart glasses, including difficulties in training workers to use the futuristic hardware, a source told TechCrunch.

All the while, the company’s leadership put on a brave face as the startup sputtered. In an interview this year with Cornell Enterprise Magazine, Daqri CEO Roy Ashok told the publication that the startup was forecasting shipments of “tens of thousands” of pairs of its AR glasses in 2020.

Daqri, its founder and several executives did not respond to requests for comment.

https://ift.tt/34ztjzU Another high-flying, heavily funded AR headset startup is shutting down https://ift.tt/2ZZ9bZx

Simbe raises a $26M Series A for its retail inventory robot

San Francisco-based robotics startup Simbe just announced a $26 million Series A. The round was led by Venrock and features Future Shape, Valo Ventures and Activant Capital. The company is one of several looking to automate the process of providing retail inventory.

Simbe says the funding will go toward growing its headcount, exploring new markets and accelerating the deployment of its existing robots. The news also finds Nest’s Tony Fadell, Venrock’s David Pakman and Pathbreaker Venture’s Ryan Gembala joining the startup’s board.

Simbe Data Analytics Corporate

“Our investors, both previous and new, provide much more than financial support. They are advocates and trusted advisors who bring invaluable institutional knowledge to all facets of our business,” cofounder and CEO Brad Bogolea said in a release. “Both our equity financing partners and the SoftBank Robotics team are deeply aligned with Simbe’s vision to revitalize physical retail through data. We are at a pivotal time of growth and value their support as we continue to transform retail at a global scale.”

Simbe has been showcasing its inventory robot Tally since 2015. Soon after Lemnos made an investment in the company. Earlier this year, U.S. supermarket chain Giant Eagle announced plans to begin a pilot program, deploying Tally in select stores. That announcement came a week or so after Walmart announced its own plan to pilot robots from Pittsburgh-based competitor, Bossa Nova.

Simbe Data Analytics Employee

Other retailers using Simbe robots include Schnuck Markets, Decathlon Sporting Goods and Groupe Casino. Along with the Series A, SoftBank Robotics is also providing an inventory financing agreement to help scale manufacturing for the company.

https://ift.tt/2UQHr3a Simbe raises a $26M Series A for its retail inventory robot https://ift.tt/2Q5MEpj

Sidewalk Labs spins out urban data-gathering tool Replica into a company

Replica, the data-gathering tool created within Sidewalk Labs that maps the movement of people in cities, is now a company.

The newly formed company, which is headed by Nick Bowden, also announced Thursday it has raised $11 million in a Series A funding round from investors Innovation Endeavors, Firebrand Ventures, and Revolution’s Rise of the Rest Seed Fund. The capital will be used to accelerate Replica’s growth through new hires beyond its existing 13-person staff, expansion to new cities and investment in its technology.

Replica will remain connected to Sidewalk Labs, the smart city technology firm owned by Google’s parent company Alphabet. Both Sidewalk Labs and Innovation Endeavors will be on the company’s board.

Replica, which is headquartered in Kansas City with an engineering office in San Francisco, plans to launch in several new regions. Replica is already working with Kansas City, Portland, Chicago and Sacramento, with more cities to come this year.

The Replica tool, which has drawn the ire of some privacy advocates, grew out of Model Lab, a project started two years ago to investigate modeling as a way to address urban problems. Early work focused on meeting with public agencies throughout the world to learn more about the data, processes and other tools they used.

The Replica planning tool was born out what they discovered: public agencies don’t have all the information needed to understand the link and interdependence between transportation and land use. The upshot is a an incomplete picture of how people move within cities, leaving public agencies ill-equipped to make decisions about how land is used and what transportation is needed and where, the company says.

“Answering questions like who uses the street, in which way and why, are critical for city planners as they work to make transit and land use more efficient and sustainable,” Bowden wrote. “But current resources available to city planners to analyze people’s travel in urban areas are less than satisfactory.”

The Replica modeling tool uses de-identified mobile location data to give public agencies a comprehensive portrait of how, when, and why people travel. Movement models are matched to a synthetic population, which has been created using samples of census demographic data to create a broad new data set that is statistically representative of the actual population. The result, Bowden says, is a model that is both privacy-sensitive and extremely useful for public agencies.

Bowden tried to quell privacy worries Thursday in a blog post emphasizing that the data has been “de-identified,” meaning that an individual’s location data would be identifiable. The company says it’s not interested in the movement of individuals. Instead, the modeling tool is used to see and understand patterns of movement.

“For this reason, we only start with data that has been de-identified,” Bowden wrote Thursday. “This data is then used to train a travel behavior model — basically, a set of rules to represent the movement in a particular place.”

https://ift.tt/eA8V8J Sidewalk Labs spins out urban data-gathering tool Replica into a company https://ift.tt/31iczv6

SmileDirectClub makes its debut on the public market

SmileDirectClub rang the opening bell earlier today, marking its first day of trading as a public company. The teeth-straightening company is now trading on the Nasdaq under the symbol “SDC.”

Already, the stock is trading down 11% at $20.36 per share.

SmileDirectClub kicked off its IPO hoping to raise up to $1.3 billion at an offering price of $23 per share, with an expected market cap of around $10 billion. The company originally intended to set its price between $19 and $22 per share.

“We are focused on long term shareholder value – the next 12, 24, 36 months and beyond,” SmileDirectClub CFO Kyle Wailes said in a statement to TechCrunch. “Today’s IPO allows us to reinvest in innovation in product, process, international growth and customer experience. We are just getting started but our commitment to our mission, our 5,500+ team members, our customers and now our shareholders is stronger than ever.”

The company plans to use money raised from the IPO for international expansion and developing new dental products. SmileDirectClub filed to go public back in August amid concerns from national dental associations.

Prior to this, SmileDirectClub reached a $3.2 billion valuation following a $380 million funding round last October. Investors from Clayton, Dubilier & Rice led the round, which featured participation from Kleiner Perkins and Spark Capital. This funding came on top of Invisalign maker Align Technology’s $46.7 million investment in SmileDirectClub in 2016, and another $12.8 million investment in 2017 to own a total of 19% of the company.

In 2018, SmileDirectClub’s revenues came in at $432.2 million, a significant uptick from just $147 million the year prior.

The company ships invisible aligners directly to customers, and licensed dental professionals (either orthodontists or general dentists) remotely monitor the progress of the patient. Before shipping the aligners, patients either take their dental impressions at home and send them to SmileDirectClub or visit one of the company’s “SmileShops” to be scanned in person.

SmileDirectClub says it costs 60% less than other types of teeth-straightening treatments, with the length of treatments ranging from four to 14 months. Upfront, SmileDirectClub costs $1,895, with the average treatment lasting six months.

Though, members of the American Association of Orthodontists have taken issue with SmileDirectClub, previously asserting that SmileDirectClub violates the law because its methods of allowing people to skip in-person visits and X-rays is “illegal and creates medical risks.” The organization has also filed complaints against SmileDirectClub in 36 states, alleging violations of statutes and regulations governing the practice of dentistry. Those complaints were filed with the regulatory boards that oversee dentistry practices and with the attorneys general of each state.

SmileDirectClub explicitly calls out those issues in its S-1 as potential risk factors. Here’s a key nugget:

A number of dental and orthodontic professionals believe that clear aligners are appropriate for only a limited percentage of their patients. National and state dental associations have issued statements discouraging use of orthodontics using a teledentistry platform. Increased market acceptance of our remote clear aligner treatment may depend, in part, upon the recommendations of dental and orthodontic professionals and associations, as well as other factors including effectiveness, safety, ease of use, reliability, aesthetics, and price compared to competing products.

Furthermore, our ability to conduct business in each state is dependent, in part, upon that particular state’s treatment of remote healthcare and that state dental board’s regulation of the practice of dentistry, each which are subject to changing political, regulatory, and other influences. There is a risk that state authorities may find that our contractual relationships with our doctors violate laws and regulations prohibiting the corporate practice of dentistry, which generally bar the practice of dentistry by entities. Two state dental boards have established new rules or interpreted existing rules in a manner that purports to limit or restrict our ability to conduct our business as currently conducted.

Additionally, as the S-1 notes, a national dental association recently filed a petition with the U.S. Food and Drug Administration claiming that SmileDirectClub’s manufacturing violates “prescription only” requirements. While no regulations or laws have been passed that would affect SmileDirectClub to date, it’s a possible scenario that would greatly impact the company’s core business.

Tech startups want to go inside your mouth

https://ift.tt/eA8V8J SmileDirectClub makes its debut on the public market https://ift.tt/2ZWQN2C

Shape Security hits $1B valuation with $51M Series F

Anti-fraud startup Shape Security has tipped over the $1 billion valuation mark following its latest Series F round of $51 million.

The Mountain View, Calif.-based company announced the fundraise Thursday, bringing the total amount of outside investment to $173 million since the company debuted in 2011.

C5 Capital led the round, along with several other new and returning investors, including Kleiner Perkins, HPE Growth, and Norwest Ventures Partners.

Shape Security protects companies against automated and imitation attacks, which often employ bots to break into networks using stolen or reused credentials. Shape uses artificial intelligence to discern bots from ordinary users by comparing known information such as a user’s location, and collected data like mouse movements to shut down attempted automated logins in real-time.

The company said it now protects against two billion fraudulent logins daily.

C5 managing partner André Pienaar said he believes Shape will become the “definitive” anti-fraud platform for the world’s largest companies.

“While we while we expect a strong financial return, we also believe that we can bring Shape’s platform into many of the leading companies in Europe who look to us for strategic ideas that benefit the entire value-chain where B2C applications are used,” Pienaar told TechCrunch.

Shape’s chief executive Derek Smith said the $51 million injection will go towards the company’s international expansion and product development — particularly the capabilities of its AI system.

He added that Shape was preparing for an IPO.

Anti-fraud startup Shape Security raises $26M in Series E round to drive global expansion

https://ift.tt/eA8V8J Shape Security hits $1B valuation with $51M Series F https://ift.tt/34Ia7QI

How to stop vanity marketing from killing your startup

Dick Talens Contributor

Dick Talens is a fitness and growth hacker.

In 2014, I got in on the ground floor of what I thought was a rocket ship. Fling was the fastest-growing app in 2014, and I was pulled in as their chief growth officer, with a handsome compensation package — one that in retrospect should have given me pause. Within 24 hours of arriving in London, I was greeted at the door by a Fling-branded Humvee, which wouldn’t even turn out to be the worst use of the company’s money.

Fling’s marketing team consisted of 20 people, or about 30% of the company. Skeptical that any startup needed a marketing team remotely close to that size, I sat down with each one of them to learn about each individual’s expertise, role and what value they added. Each focused on a particular area — online user acquisition, brand, partnerships, metrics, to name a few. Surprisingly, I found myself impressed with their skill sets, at least on paper.

Nevertheless, my spidey sense was tingling. It’s not that they were lazy or shirked responsibilities; in fact, each seemed like they tried to create value in earnest. But everyone on the team lacked a sense of urgency — the one that drives truly great startups to be thoughtful and careful about understanding why and how things work.

And when resources are seemingly infinite, any expenditure — whether time, money or both — seems like a good idea, so long as the return is net positive. And in isolation, perhaps many (or all of them) yield a positive ROI. The result was a constant cash-burn, despite “doing everything right” — everything was working, but it wasn’t working in a sustainable, manageable way, and I’d ended up buying into the hype. I’d been concerned about marketing bloat, and I was right. The company would eventually go under after burning $21 million.

I knew I was part of it. I could have stopped the bleed. But everything I was doing had a positive outcome — not one I could necessarily quantify or describe, but I knew it was there. We had all the money and time in the world — right up until we didn’t.

Before Fling I’d been scrappy, constantly brushing arms with death running one of the most popular fitness apps in the world perpetually from the end of our runway. After Fling, I’d developed bad habits — by my own hand — and had to force myself through a series of less glamorous but more fulfilling jobs wherein all that really mattered was results.

For me — and I’d say for any marketer — to develop resourcefulness, I needed to have spent significant time in an environment of scarcity, not abundance. This environment is the difference between whether or not a marketer ends up cutting their teeth and growing in their abilities or forever sucking on the teat provided by your friendly neighborhood VC.

And the word “resourcefulness” is a misnomer, containing a beautiful irony of sorts: it’s a trait that only develops when resources are running on empty.

It’s time for you to understand a new term — vanity marketing.

We had all the money and time in the world — right up until we didn’t.

Vanity marketing is a tempting investment for a company. It’s got some vague, ephemeral yet satisfying results — you’ve got a big party, you’ve got a wrapped Humvee, you’ve got something cool to point at, and perhaps you’ll achieve the mythical “virality” that gets a particular thing 10,000 shares or retweets.

You’re popular — a non-specific yet incredibly sexy thing that theoretically would mean that investors would talk to you, or reporters would speak to you, or that you’ve “made it.” It’s a result of the fact that many markets don’t have the level of scrutiny of, say, a sales team applied to them — marketing’s this big, powerful juggernaut where many people survive just by not getting fired.

If premature scaling is the leading killer of startups, marketing is the symptomless cancer that leads to its demise. Marketers with abundance ingrained into their mindset will spend until those resources are no longer there. It’s easy to succeed in marketing by burning capital to grow.

You know how there are some people who are entrepreneurs just so they can say they’re entrepreneurs? I’ve noticed a similar pattern in marketing. Everyone wants to call themselves a “growth hacker,” but no one wants to learn to write SQL or Python.

Why? Because it’s not sexy. Neither is obsessing over metrics like CPM, Average Order Value and cost per unique “add to cart.” What is sexy, though, is spending (other people’s) money to reach new audiences, and pointing at increasingly bigger numbers. The problem is that unless you get your hands dirty, you won’t actually be able to understand whether your marketing efforts command a return. I’ve seen marketers waste hundreds of thousands of dollars with no repercussions. Could you imagine if a salesperson expensed that same amount in sales trips without landing a single client?

Almost every single major startup flameout you’ve seen has had some form of major Vanity Marketing Spend, one totally divorced from, say, the cost of acquiring a single user. If you’re reading this and saying that you’re not one of these marketers, then I’m proud, yet suspicious, of you. It’s fine if you’ve dabbled — a happy hour here, a CES party there — and understood that those were brief attempts to get something that’s unquantifiable. And it’s even stupider if you’ve spent this money “just because everybody else is doing it.”

But the dark truth is that many, many marketing expenditures are totally unquantifiable — they have little to no grounding in reality beyond telling people you’ve spent money.

The boring, consistent marketing you can do — that you can analyze, that you can truly understand the effect of — is so much less interesting than the big, shiny objects. It might not look as impressive, but it’ll work. And it’ll teach you to succeed anywhere.

https://ift.tt/eA8V8J How to stop vanity marketing from killing your startup https://ift.tt/308iZeZ

Voyage raises $31 million to bring driverless taxis to communities

Voyage, the autonomous vehicle startup that spun out of Udacity, announced Thursday it has raised $31 million in a round led by Franklin Templeton.

Khosla Ventures, Jaguar Land Rover’s InMotion Ventures and Chevron Technology Ventures also participated in the round. The company, which operates a ride-hailing service in retirement communities using self-driving cars supported by human safety drivers, has raised a total of $52 million since launching in 2017. The new funding includes a $3 million convertible note.

Voyage CEO Oliver Cameron has big plans for the fresh injection of capital, including hiring and expanding its fleet of self-driving Chrysler Pacifica minivans, which always have a human safety driver behind the wheel.

Ultimately, the expanded G2 fleet and staff are just the means toward Cameron’s grander mission to turn Voyage into a truly driverless and profitable ride-hailing company.

“It’s not just about solving self-driving technology,” Cameron told TechCrunch in a recent interview, explaining that a cost-effective vehicle designed to be driverless is the essential piece required to make this a profitable business.

The company is in the midst of a hiring campaign that Cameron hopes will take its 55-person staff to more than 150 over the next year. Voyage has had some success attracting high-profile people to fill executive-level positions, including CTO Drew Gray, who previously worked at Uber ATG, Otto, Cruise and Tesla, as well as former NIO and Tesla employee Davide Bacchet as director of autonomy.

Funds will also be used to increase its fleet of second-generation self-driving cars (called G2) that are currently being used in a 4,000-resident retirement community in San Jose, Calif., as well as The Villages, a 40-square-mile, 125,000-resident retirement city in Florida. Voyage’s G2 fleet has 12 vehicles. Cameron didn’t provide details on how many vehicles it will add to its G2 fleet, only describing it as a “nice jump that will allow us to serve consumers.”

Voyage used the G2 vehicles to create a template of sorts for its eventual driverless vehicle. This driverless product — a term Cameron has used in a previous post on Medium — will initially be limited to 25 miles per hour, which is the driving speed within the two retirement communities in which Voyage currently tests and operates. The vehicle might operate at a low speed, but they are capable of handling complex traffic interactions, he wrote.

“It won’t be the most cost-effective vehicle ever made because the industry still is in its infancy, but it will be a huge, huge, huge improvement over our G2 vehicle in terms of being be able to scale out a commercial service and make money on each ride,” Cameron said.

Voyage initially used modified Ford Fusion vehicles to test its autonomous vehicle technology, then introduced in July 2018 Chrysler Pacifica minivans, its second generation of autonomous vehicles. But the end goal has always been a driverless product.

TechCrunch previously reported that the company has partnered with an automaker to provide this next-generation vehicle that has been designed specifically for autonomous driving. Cameron wouldn’t name the automaker. The vehicle will be electric and it won’t be a retrofit like the Chrysler Pacifica Hybrid vehicles Voyage currently uses or its first-generation vehicle, a Ford Fusion.

Most importantly, and a detail Cameron did share with TechCrunch, is that the vehicle it uses for its driverless service will have redundancies and safety-critical applications built into it.

Voyage also has deals in place with Enterprise rental cars and Intact insurance company to help it scale.

“You can imagine leasing is much more optimal than purchasing and owning vehicles on your balance sheet,” Cameron said. “We have those deals in place that will allow us to not only get the vehicle costs down, but other aspects of the vehicle into the right place as well.”

https://ift.tt/2AeVwhv Voyage raises $31 million to bring driverless taxis to communities https://ift.tt/2LG0mcQ

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