Public investors stay in love with tech, as Root and Affirm file to IPO

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Why are there so many tech IPOs right now? Startups are finding that they can get higher valuations from public markets than private ones these days, because so many public investors want to put serious money in tech. Also, the lure of the future, the benevolence of the Fed, the retail investor boom, the sheer number of unicorns that have been waiting for any decent moment to go, the new ways a company can go public… these are some of the reasons Alex Wilhelm found after reviewing the latest listings and quarterly data about tech in public markets.

Various political and economic turmoils threaten to end the run, but the impact to the startup world has arrived. Consider it for a minute before the newsletter dives into stocks, SPACs, emerging industries and other useful startup news.

From this IPO boom, there’ll be another wave of startup employee wealth flooding into adjacent real-world spaces, but spread more broadly outside of the Bay Area than the days of Facebook and Twitter IPOs. Some of those employees will become investors and maybe founders, and the now-public startups will replace those positions with big-company people. The dynamics around tech hiring will be further reshaped in surprising new ways, all combined with the other changes happening like remote work.

Today, if you’re founding a startup now, you can now confidently chart new ways to build your company long-term that previous generations of founders could barely imagine.

This coming decade, we might see a startup go public that raises from pre-seed rolling funds first, pulls in newly legalized crowdfunding, matches with the right VCs from among the thousands that have are operating these days — or perhaps the startup raises debt because it’s doing that well. It could stay private as long as it wants using the various financing and secondary market possibilities that have been figured out over the last decade. Then, when it is ready to go public, it could choose between traditional options, the perfect SPAC and a direct listing, and keep the shareholder pool in favor of the true believers who have been with the company over the course of the journey.

This current group of IPOs also demonstrates something else. Tech is no longer defined as some profitless, highly valued consumer tech startup in San Francisco. It can come from anywhere, it can solve practical problems, it can make real money, and it can keep building and growing — provided you’re okay with some ongoing risk. No wonder public markets like tech these days.

Take a look at Root Insurance, an insurtech unicorn that has already helped define the Columbus, Ohio startup scene. It’s a “startup Rorscach test,” as Alex details this week about its new IPO filing. “You can find things to like (improving adjusted margins! revenue growth!), and you can find things to not like (spiraling losses! negative margins!) very easily.”

Here’s more from the Extra Crunch article:

It appears that the tailwind that many insurance providers have seen during COVID-19 has provided Root with a nice boost (driving fell during the pandemic, leading some insurance providers to return premiums.) Root is taking advantage of the moment by filing when it can show sharply improved economics.

That’s smart. But how do those improved economics bear out in traditional accounting? Let’s find out:

• Root’s revenue has skyrocketed from $43.3 million in 2018 to $290.2 million in 2019. In the first half of 2020, Root managed $245.4 million in revenue, up 135.73% from what it managed in the first half of 2019.
• Root’s losses have also shot higher, from a net loss of $69.1 million in 2018 to $282.4 million in 2019. The startup has managed to consistently lose more money over time. This was also true more recently, when its H1 2020 net loss of $144.5 million dwarfed its H1 2019 loss of $97.0 million.

The other filing this week is for Affirm, which provides a point-of-sale credit for customers (without all the tricks of credit cards). It’s also a symbol of how innovation works across the decades, for those future founders who are studying the IPO experiments of unicorns today.

The company is a high-flying unicorn with a practical purpose from serial entrepreneur Max Levchin, who has also helped shape the concept of the modern startup — from cofounding Paypal and making numerous angel investments over the years, to Slide, a profitless, highly valued consumer tech company in San Francisco a decade ago. It’s not widely understood outside of tech, Slide and other social media companies helped pioneer the growth and engagement techniques that subsequent startups applied across SaaS, e-commerce, fintech and real-world sectors. Today, Root and Affirm and many of the other companies in this era of IPOs are standing on the lessons of those years.

Image Credits: Getty Images

SPAC growing pains

Special Purpose Acquisition Companies are sure to provide valuable lessons, as a growing group of startups use these investment vehicles to ease into public markets. Here’s the latest look at the action, starting with this disturbing quote that Connie Loizos got from one expert this week.

According to Kristi Marvin, a former investment banker who now runs the data site SPACInsider, she’s having, and hearing about, conversations with a much wider range of people interested in launching SPACs than in past years — and not all of them are necessarily equipped to manage the vehicles.

“You ask, ‘Have you ever acquired a company for $500 million or more? Do you have operating experience in the vertical that you’re targeting? Do you understand the reporting requirements involved?’ Often,” she says, “the answers are no.”

That was in the context of a controversial former Uber executive starting a SPAC; Connie also looked at gender representation in this emerging slice of high finance. Like other parts of that world, the people involve are almost entirely men (which is also continuing to be the case in startup funding, actually, Alex reports).

Meanwhile, Catherine Shu examined how troubled electric vehicle startup Faraday Futures is approaching SPAC plans, while Alex took a closer look at the challenges and opportunities facing Opendoor.

Image Credits: Getty Images

The future of mobility

Our annual conference on mobility and the future of transportation happened online this year, which means we have lots of easily accessible conference coverage to share for readers (and for Extra Crunch subscribers). Here are a few key headlines to help you focus your clicks:

What micromobility is missing

Quarantine drives interest in autonomous delivery, but it’s still miles from mainstream

Transportation VCs suggest frayed US-China ties will impact mobility markets (EC)

Image Credits: Getty Images

Investor Surveys: APIs, Helsinki and Amsterdam

“I am surprised at how open companies are to a SaaS API for something as critical as cybersecurity,” Skyflow founder Anshu Sharma explains about the explosion of SaaS companies, and specifically API service providers like his company. “While I have spent over a decade in SaaS including some very large deals during my time at Salesforce, the scope of the projects by large companies including banks and healthcare companies is simply beyond what was a possibility just a few years ago. We have truly moved from ‘why SaaS’ to a ‘why not SaaS’ era.” Alex and Lucas Matney surveyed a range of top investors and founders in this exploding niche, and you can read the full thing on Extra Crunch.

Elsewhere in investor surveys, Mike Butcher checked out the Helsinki startup scene and has another about Amsterdam in progress.

Across the week

TechCrunch

Nobel laureate Jennifer Doudna shares her perspective on COVID-19 and CRISPR

Podcast advertising has a business intelligence gap

Standing by developers through Google v. Oracle

Dear Sophie: Now that a judge has paused Trump’s H-1B visa ban, how can I qualify my employees?

A clean energy company now has a market cap rivaling ExxonMobil

Extra Crunch

Understanding Airbnb’s summer recovery

Accel VCs Sonali De Rycker and Andrew Braccia say European deal pace is ‘incredibly active’

4 sustainable industries where founders and VCs can see green by going green

Six favorite Techstars startups ahead of its next rush of demo days

To fill funding gaps, VCs boost efforts to find India’s standout early-stage startups

#EquityPod

From Alex:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

This week Natasha was on vacation, so Danny and your humble servant had to endeavor alone. She’s back next week, so we’ll be back to full strength as a collective soon enough.

But even with a depleted hosting crew, we had a mountain of news to get through. And to joke about, as Danny was in the mood for a laugh. Here’s the rundown:

• Reddit co-founder Alexis Ohanian’s New Venture Fund Invests in Disposable Camera App: Danny and I are arbiters of what is cool, so we were the perfect pair to discuss influencers and new social applications. This one is actually neat, and Ohanian’s inclusion in the investment viz his new fund was noteworthy.
• Zira raises $3.1M for its shift-scheduling service that helps manage hourly workers: This is a round that I covered, looking into Zira.ai and its product. Our take? It’s neat, but operates in a competitive market.
• Shogun raises $35M to help brands take on Amazon with faster and better sites of their own: This is a similar story. A neat company with a neat product in a space where there is proven demand (TAM, in other words), and competition.
• Unqork’s $207M Series C underscores growing enterprise demand for no-code apps: Another round worth mentioning is the Unqork deal. Unqork is a no-code service that helps other businesses create apps for their companies. It’s growing like a weed, and is thus something worth knowing a bit about.
• Mmhmm, Five-Month-Old Video Startup Making Virtual Meetings More Fun, Raises $31 Million Pre-Launch: Yes, mmhmm has raised more money, and, we’re excited to learn, could be launching this very month.
• Remotion raises $13M to create a workplace video platform for short, spontaneous conversations: Following the Slack news, this round stood out to us. Who will build the remote work comms platform of the future that people like to use?
• And then there was a host of other stuff to get through, like the FirstMark SPAC news, Root’s impending IPO and more on Airbnb’s impending public offering.

That was a lot. We did our best. Hugs and chat with you next week!

Equity drops every Monday at 7:00 a.m. PT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

https://ift.tt/30V2iXo Public investors stay in love with tech, as Root and Affirm file to IPO https://ift.tt/3nF0TOo

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Dear Sophie: How can employers hire & comply with all this new H-1B craziness?

Sophie Alcorn Contributor

Sophie Alcorn is the founder of Alcorn Immigration Law in Silicon Valley and 2019 Global Law Experts Awards’ “Law Firm of the Year in California for Entrepreneur Immigration Services.” She connects people with the businesses and opportunities that expand their lives.

More posts by this contributor

• Dear Sophie: Is it easier and faster to get an O-1A than an EB-1A?
• Dear Sophie: Now that a judge has paused Trump’s H-1B visa ban, how can I qualify my employees?

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one or two-year subscription for 50% off.

---

Dear Sophie:

I’ve been reading about the new H-1B rules for wage levels and defining what types of jobs qualify that came out this week. What do we as employers need to do to comply? Are any other visa types affected?

— Racking my brain in Richmond!

Dear Racking:

As you mentioned, the Department of Labor (DOL) and the Department of Homeland Security (DHS) each issued a new interim rule this week that affects the H-1B program. However, the DOL rule impacts other visas and green cards as well. These interim rules, one of which took effect immediately after being published, are an abuse of power.

The president continues to fear-monger in an attempt to generate votes through racism, protectionism and xenophobia. The fatal irony here is that companies were in fact already making “real offers” to “real employees” for jobs in the innovation economy, which are not fungible and are actually the source of new job creation for Americans. A 2019 report by the Economic Policy Institute found that for every 100 professional, scientific and technical services jobs created in the private sector in the U.S., 418 additional, indirect jobs are created as a result. Nearly 575 additional jobs are created for every 100 information jobs, and 206 additional jobs are created for every 100 healthcare and social assistance jobs.

The DOL rule, which went into effect on October 8, 2020, significantly raises the wages employers must pay to the employees they sponsor for H-1B, H-1B1 and E-3 specialty occupation visas, H-2B visas for temporary non-agricultural workers, EB-2 advanced degree green cards, EB-2 exceptional ability green cards and EB-3 skilled worker green cards.

The new DHS rule, which further restricts H-1B visas, will go into effect on December 7, 2020. DHS will not apply the new rule to any pending or previously approved petitions. That means your company should renew your employees’ H-1B visas — if eligible — before that date.

The American Immigration Lawyers Association (AILA) has formed a task force to review the rules and help with litigation. Although both the DOL and DHS rules will likely be challenged, they will likely remain in effect for some time before any litigation has an impact. They are actively seeking plaintiffs, including employees, employers and representatives of membership organizations who will be hurt by the new rules.

https://ift.tt/31iZ7cI Dear Sophie: How can employers hire & comply with all this new H-1B craziness? https://ift.tt/3nBhJOc

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Facebook and Instagram will pin vote-by-mail explainers to top of feeds

Starting this weekend, everyone of voting age in the U.S. will begin seeing informational videos at the top of Instagram and Facebook, offering tips and state-specific guidance on how to vote through the mail. The videos will be offered in both English and Spanish.

The vote-by-mail videos will run on Facebook for four straight days in each state, starting between October 10 and October 18 depending on local registration deadlines. On Instagram, the videos will run in all 50 states on October 15 and October 16, followed by other notifications with vote-by-mail information over the next two days.

Image via Facebook

Image via Facebook

The videos let voters know when they can return a ballot in person, instruct them to sign carefully on additional envelopes that might be required and encourage returning ballots as soon as possible while being mindful of postmarking deadlines. Facebook will continue providing additional state-specific voting information in a voting information center dedicated to the 2020 election.

Even more than in past years, app makers have taken up the mantle of nudging their users to vote in the U.S. general election. From Snapchat to Credit Karma, it’s hard to open an app without being reminded to register — and that’s a good thing. Snapchat says it registered around 400,000 new voters through its own reminders and Facebook estimates that it helped 2.5 million people register to vote this year.

Voting rights advocates are concerned that 2020’s rapid scale-up of vote-by-mail might lead to many ballots being thrown out — a worry foreshadowed by the half a million ballots that were tossed out in state primaries. Some of those ballots failed to meet deadlines or were deemed invalid due to other mistakes voters made when filling them out.

In Florida, voters that were young, non-white or voting for the first time were twice as likely to have their ballots thrown out compared to white voters in the 2018 election, according to research by the ACLU.

Adding to concerns, state rules vary and they can be specific and confusing for voters new to voting through the mail. In Pennsylvania, the most likely state to decide the results of the 2020 election, new rules against “naked ballots” mean that any ballot not cast in an additional secrecy sleeve will be tossed out. In other states, secrecy sleeves have long been optional.

Bracing for election day, Facebook rolls out voting resources to US users

Facebook gets ready for November

Since 2016, Facebook has faced widespread criticism for rewarding hyper-partisan content, amplifying misinformation and incubating violent extremism. This week, the FBI revealed a plot to kidnap Michigan Governor Gretchen Whitmer that was hatched by militia groups who used the platform to organize.

Whether the public reveal of that months-long domestic terrorism investigation factored into its decisions or not, Facebook has taken a notably more aggressive posture across a handful of recent policy decisions. This week, the company expanded its ban on QAnon, the elaborate web of outlandish pro-Trump conspiracies that have increasingly spilled over into real-world violence, after that content had been allowed to thrive on the platform for years.

Facebook also just broadened its rules prohibiting voter intimidation to ban calls for poll watching that use militaristic language, like the Trump campaign’s own effort to recruit an “Army for Trump” to hold its political enemies to account on election day. The company also announced that it would suspend political advertising after election night, a policy that will likely remain in place until the results of the election are clear.

While President Trump has gone to great lengths to cast doubt on the integrity of vote-by-mail, mailed ballots are a historically very safe practice. States like Oregon and Colorado already conduct their voting through the mail in normal years, and all 50 states have absentee voting in place for people who can’t cast a ballot in person, whether they’re out of town or overseas serving in the military.

Vote-by-mail should be having its moment. Will it?

from Social – TechCrunch https://ift.tt/34JEIy7 Facebook and Instagram will pin vote-by-mail explainers to top of feeds Taylor Hatmaker https://ift.tt/3nynw77
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YCharts sells to PE firm in all-cash transaction as it looks to pass $15M ARR this year

This morning, YCharts, a financial data and charting service, announced that it has been purchased by LLR Partners, a private equity firm.

The companies are dubbing the transaction a “growth recapitalization,” indicating that the smaller firm won’t be stripped of its talent in hopes of driving near-term positive EBITDA. The deal was an all-cash transaction, TechCrunch confirmed.

Digging into YCharts itself, the company told TechCrunch via email that it expects to “surpass” $15 million in annual recurring revenue (ARR) this year, and that it has been growing top line at a compound annual growth rate of 30 to 40% for “the past several years.”

Those figures imply that YCharts did not sell for cheap. At the market’s current multiples, YCharts was likely worth between 10 and 20x times its ARR, making the deal (presuming, say, $13.5 million ARR at the time of the sale) worth between $135 million and $270 million, unless LLR managed to secure a discount, or the firm’s economics were worse than we’d imagine from our current remove.

The companies declined to share details of the transaction, including price.

As a somewhat long-term YCharts user — the startup set up custom colors in my account so that I could share charts in TechCrunch green, which was fun — the deal is notable in that I’ve come to appreciate what the service is capable of; it’s a great tool to create charts that encompass a wealth of financial data to make a clear point, like the historical trends in Tesla’s price/sales ratio compared to other automotive players, for example.

Financial tooling that is accessible, and shareable, is rare in our Bloomberg world. So here’s to hoping that  the transactions promised investment into YCharts bears out.

Turning to the why, I asked YCharts why it didn’t merely raise external capital instead of selling itself. YCharts’ CEO Sean Brown wrote that he’s “found that capital is easy to get,” but that “LLR Partners provides [YCharts] with much more than just capital.” The investing group, Brown continued, shares his company’s vision, has “strong domain experience,” along with “a dedicated team focused on fintech, and a ton of relevant strategic and operational expertise.”

The CEO also stressed LLR’s prior investments into other fintech companies, and said that “as part of the buyout of our existing shareholders, LLR will be funding capital to YCharts’ balance sheet to support continued investment in product and sales [and] marketing.”

YCharts raised capital as an independent company across a number of rounds, including a 2010 Series A led by Hyde Park Angels and I2A Fund, and a Series B and C led by Morningstar. The company had around $15 million in known capital raised, according to Crunchbase data.

Private equity buyouts have become viable exit options — even for early-stage startups

https://ift.tt/eA8V8J YCharts sells to PE firm in all-cash transaction as it looks to pass $15M ARR this year https://ift.tt/2I6yosI

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Join Yext’s Howard Lerman for a Q&A October 13 at 2 pm ET/11 am PT

Heading into the third quarter and earnings season, TechCrunch is excited to announce that Yext CEO Howard Lerman will join us for a live Q&A next Tuesday as part of our continuing Extra Crunch Live series.

The series recently hosted pairs of investors from Accel and Index Ventures and has hosted business leaders from Mark Cuban to Roelof Botha. Lerman will be one of the few guests who is the CEO of a public company.

But Lerman is no regular public CEO — his company debuted at a TechCrunch event back in 2009, quickly raising capital after the pitch. Yext’s 2017 IPO was therefore an event of interest here at TechCrunch.

What will we talk about? There’s a number of things that come to mind, but we’ll certainly get into the impact of COVID-19 on small businesses and how Yext is handling an uneven market. We’ll dig into search, a rising product and revenue area for the company, and how Yext has managed to broaden its product mix without diluting its focus.

We’ll also discuss what changes for a tech CEO heading into the public markets and what advice he might have for companies either considering, or actively going public in 2020. It has been a busy year for startup liquidity, pushing a great number of startups into the public sphere with varying results.

And we’ll riff on where Lerman is seeing the most interesting startups being built, along with your questions. As with all Extra Crunch Live sessions, we’ll snag a few questions from the audience. So make sure your Extra Crunch Live subscription is live and prep your thoughts.

Details follow after the jump. See everyone Tuesday!

Details

Below are links to add the event to your calendar and to save the Zoom link. We’ll share the YouTube link on the day of the discussion:

https://ift.tt/eA8V8J Join Yext’s Howard Lerman for a Q&A October 13 at 2 pm ET/11 am PT https://ift.tt/2SHi9nW

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High-profile startup execs back Indian influencers platform CreatorOS

The advent of low-cost Android smartphones and the world’s cheapest mobile data has paved the way for millions of social media influencers in India to amass a following of tens of millions of users in recent years.

These influencers, also known as creators, share their daily vlogs, thoughts on a wide range of issues, and some engage with big brands to help sell their products to niche, loyal audiences. E-commerce giant Flipkart and scores of several other businesses today work with these influencers.

But India’s ban on TikTok, the Chinese short-video app that reached more than 200 million users in the country, in late June unearthed some of the biggest problems these creators face today: They are too reliant on a handful of platforms, and their work structure is not well organized.

A new startup believes it has built the platform to help creators assume more control over their work. And a number of high-profile entrepreneurs agree.

On Friday, Madhavan Malolan announced CreatorOS, a platform that enables creators to build, manage and grow their businesses. About 1,000 creators including a number of short-film makers, teachers, consultants have already joined the platform, Madhavan, who co-founded the startup, formerly known as Socionity, in January this year. Prior to CreatorOS, he worked at a number of firms including Microsoft.

“We believe that these creators will become an entrepreneur in the coming decade. So we are creating tools, connections and infrastructure that they will need to run their digital businesses. Currently, there is a lot of spray and pray happening on the creator’s part. They are producing videos in hopes that they go viral so more people in the industry discover them,” said Madhavan in an interview with TechCrunch.

The marquee tool on CreatorOS today is an app-builder that allows creators to build their own apps, push and sell their content in it, and build their own communities. Madhavan said CreatorOS has overly reduced the efforts that need to go into building an app to simply drag and drop.

The startup said today it has also raised $500,000 from a clutch of high-profile names. Some of the angel investors include Phanindra Sama (founder and former chief executive of online ticket booking platform RedBus.in), Gaurav Munjal (co-founder and chief executive of online learning platform Unacademy), Kalyan Krishnamurthy (chief executive of Flipkart Group), Sujeet Kumar (co-founder of business-to-business marketplace Udaan), Vidit Aatrey (co-founder and chief executive of social e-commerce Meesho), Vivekananda Hallekere (co-founder and chief executive of mobility firm Bounce), and Alvin Tse (GM of Xiaomi Indonesia).

Madhavan said that the trust that so many established entrepreneurs showed in CreatorOS convinced him that he did not need to engage with VC firms yet and instead put the entire focus on serving creators. He said the ban on TikTok and how so many startups are trying to scale their short-video apps has created an immense opportunity for CreatorOS.

The startup expects to have more than 5,000 creators on its platform by the end of the year. It is working with creators to understand and build more features that would benefit them, said Madhavan.

from Social – TechCrunch https://ift.tt/eA8V8J High-profile startup execs back Indian influencers platform CreatorOS Manish Singh https://ift.tt/36JTmbj
via IFTTT

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High-profile startup execs back Indian influencers platform CreatorOS

The advent of low-cost Android smartphones and the world’s cheapest mobile data has paved the way for millions of social media influencers in India to amass a following of tens of millions of users in recent years.

These influencers, also known as creators, share their daily vlogs, thoughts on a wide range of issues, and some engage with big brands to help sell their products to niche, loyal audiences. E-commerce giant Flipkart and scores of several other businesses today work with these influencers.

But India’s ban on TikTok, the Chinese short-video app that reached more than 200 million users in the country, in late June unearthed some of the biggest problems these creators face today: They are too reliant on a handful of platforms, and their work structure is not well organized.

A new startup believes it has built the platform to help creators assume more control over their work. And a number of high-profile entrepreneurs agree.

On Friday, Madhavan Malolan announced CreatorOS, a platform that enables creators to build, manage and grow their businesses. About 1,000 creators including a number of short-film makers, teachers, consultants have already joined the platform, Madhavan, who co-founded the startup, formerly known as Socionity, in January this year. Prior to CreatorOS, he worked at a number of firms including Microsoft.

“We believe that these creators will become an entrepreneur in the coming decade. So we are creating tools, connections and infrastructure that they will need to run their digital businesses. Currently, there is a lot of spray and pray happening on the creator’s part. They are producing videos in hopes that they go viral so more people in the industry discover them,” said Madhavan in an interview with TechCrunch.

The marquee tool on CreatorOS today is an app-builder that allows creators to build their own apps, push and sell their content in it, and build their own communities. Madhavan said CreatorOS has overly reduced the efforts that need to go into building an app to simply drag and drop.

The startup said today it has also raised $500,000 from a clutch of high-profile names. Some of the angel investors include Phanindra Sama (founder and former chief executive of online ticket booking platform RedBus.in), Gaurav Munjal (co-founder and chief executive of online learning platform Unacademy), Kalyan Krishnamurthy (chief executive of Flipkart Group), Sujeet Kumar (co-founder of business-to-business marketplace Udaan), Vidit Aatrey (co-founder and chief executive of social e-commerce Meesho), Vivekananda Hallekere (co-founder and chief executive of mobility firm Bounce), and Alvin Tse (GM of Xiaomi Indonesia).

Madhavan said that the trust that so many established entrepreneurs showed in CreatorOS convinced him that he did not need to engage with VC firms yet and instead put the entire focus on serving creators. He said the ban on TikTok and how so many startups are trying to scale their short-video apps has created an immense opportunity for CreatorOS.

The startup expects to have more than 5,000 creators on its platform by the end of the year. It is working with creators to understand and build more features that would benefit them, said Madhavan.

from Social – TechCrunch https://ift.tt/eA8V8J High-profile startup execs back Indian influencers platform CreatorOS Manish Singh https://ift.tt/36JTmbj
via IFTTT

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The Zebra reaches $100M run rate, turns profitable as insurtech booms

From a cluster of insurance marketplace startups raising capital earlier this year, to neoinsurance provider Lemonade going public this summer at a strong valuation, Hippo’s huge new round and Root’s impending unicorn IPO, 2020 has proven to be a busy year for startups and other growth-oriented private tech companies focused on insurance.

That news cycle continues today, with The Zebra announcing that it has reached a roughly $100 million run rate, and, perhaps even more notably, that it has turned profitable.

TechCrunch most recently covered the car and home insurance marketplace startup in February, when it raised the first $38.5 million in a Series C eventually worth $43.5 million that Accel led. As we noted at the time, the startup joined “Insurify ($23 million), Gabi ($27 million) and Policygenius ($100 million) in raising new capital this year.”

The Zebra raises $38.5M as the insurance marketplace race heats up

The Zebra released a number of financial performance metrics as part of its Series C cycle, including that it recorded revenues of $37 million in 2019, and that it had reached a $60 million annual run rate around the time of its Series C. The Zebra also said that it could double in size this year, putting it above a $100 million run rate by the end of 2020.

With that history in hand, let’s talk about the company’s more recent performance.

A changing market

According to the company, The Zebra recorded net revenue of $6 million in May, 2020. That number grew to around $8 million in September. For those of you able to multiply, $8 million times 12 is $96 million, or a hair under $100 million. According to a call with the The Zebra’s CEO Keith Melnick, the company’s September was very close to $8.3 million, a figure that would put it on a $100 million run rate.

Given that our $100 million ARR club has a history of granting startups a little wiggle room when it comes to their size, it seems perfectly fine to say that The Zebra has reached revenue scale of $100 million; at its current rate of growth, even if its final September revenue tally is a hair light. the company should reach a nine-figure topline pace in October.

According to Melnick, while the bulk of The Zebra’s revenue isn’t recurring, a growing portion of it is. Per the CEO, around 2-5% of The Zebra’s revenue was recurring last year, a figure that he said is up to around 10% today. (If The Zebra binds an insurance policy itself, and that policy is renewed, its commissions can recur.)

What drove the company’s quick 2020 growth? In part, the insurance market changed, with insurance networks that depended on in-person sales seeing their ability to drive business slow thanks to COVID-19. Insurance marketplaces like The Zebra stepped in to assist, helping move some offline demand online. Melnick detailed that dynamic to TechCrunch, adding that when certain advertising channels saw demand fall, his company was able to leverage inexpensive inventory.

A number of factors appear to have added to The Zebra’s rapid growth thus far in 2020. Our next question is whether other, related players in the insurtech startup space have seen similar acceleration. More on that in a few days.

Why VCs are dumping money into insurance marketplaces

Finally, regarding The Zebra, the company said that it is now profitable. Of course, profit is a squishy word in 2020, so we wanted to know precisely what the company meant by the statement. Per the company’s CEO, it is generating positive net income, the gold-standard for profitability as the metric is inclusive of all costs, including the non-cash expenses that startups tend to strip out of their numbers to make the results look better than they really are.

If other players in the insurtech space are surfing similar trajectories, all that capital that went into the sector around the start of the year is going to appear prescient.

https://ift.tt/eA8V8J The Zebra reaches $100M run rate, turns profitable as insurtech booms https://ift.tt/3d8NE3M

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Greycroft, Lerer Hippeau and Audible back audio measurement startup Veritonic

Veritonic is announcing that it has raised $3.2 million in Series A funding led by Greycroft, with participation from Lerer Hippeau and Amazon-owned audiobook service Audible.

CEO Scott Simonelli, who founded the New York startup with COO Andrew Eisner and CTO Kevin Marshall, told me that his goal is to create a new category of “audio intelligence” — namely, measuring and predicting the effectiveness of any piece of audio content or advertising.

The company is focused on marketing initially, with its first product, Creative Measurement, analyzing any audio ad and showing marketers how it scores compared to similar content, as well as identifying which parts of the audio are most effective. And Veritonic is launching a new product, Competitive Intelligence, which helps businesses see how and where their competitors are spending on advertising and provides alerts when those competitors launch a new ad.

Simonelli said that until now, audio measurement has been limited to things like creating audience panels with a few hundred people, which simply doesn’t scale, given the enormous growth in the audio market.

Veritonic, on the other hand, has analyzed thousands of audio files, correlating the content with data about how people responded and using that analysis to predict how people will respond to new audio. Simonelli said the company can add more “fuel” by going out and gathering more human response data, but even without additional data, it can provide an instant prediction on an ad or campaign’s effectiveness.

Image Credits: Veritonic

Simonelli also noted that Veritonic has spent the past five years developing technology that’s specifically attuned to the challenges of measuring audio effectiveness — like the fact that audio is experienced over time and, even more than other media, needs to be memorable.

“We can look at a sonic profile and predict and evaluate how somebody is going to respond,” he said.

The ultimate goal, he added, is to create the “benchmark for audio advertising,” which means working with a variety of players in the industry. For example, he said that when you look at other audio investments in Greycroft’s portfolio (such as podcast network Wondery or podcast analytics company Podsights): “Veritonic makes every one of those audio investments more valuable.”

Veritonic’s made pretty good progress on that goal already, with partners including Pandora, SiriusXM and NPR, and brand clients like Pepsi, Visa and Subway. It was previously backed by Newark Venture Partners (whose founder Don Katz previously founded Audible).

“We are excited to be a part of Veritonic’s continued growth and success,” said Greycroft’s Alan Patricof in a statement. “I’m personally very passionate about the future of voice, and the team at Veritonic deeply understands how to use audio to drive recall, stickiness and brand awareness — which is hugely important in a highly-competitive consumer brand landscape.”

Simonelli added that Veritonic will use the new funding to expand its data science and sales teams. Eventually, he hopes to start analyzing non-advertising content as well — for example, since Audible is an investor, he said, “Analyzing every audiobook on the planet is something we’re ready for and excited to do.”

Will podcast ad revenue bounce back after COVID-19?

https://ift.tt/3jHJfYf Greycroft, Lerer Hippeau and Audible back audio measurement startup Veritonic https://ift.tt/2GGcBaV

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Delivery startup goPuff raises $380M at a $3.9B valuation

GoPuff is a Philadelphia-headquartered startup that delivers products like over-the-counter medicine, baby food and alcohol (basically, the stuff you’d buy at a convenience store) in 30 minutes or less.

Yakir Gola, who serves as co-CEO with his co-founder Rafael Ilishayev, told me their goal is to create “the go-to platform for over-the-counter medicine or household products or baby food or ice cream or even alcohol — goPuff will deliver all these products in under 30 minutes, 24/7.”

While the startup has kept a relatively low profile in the media, it’s already available in more than 500 U.S. cities (recent launches include Dallas, Miami, Detroit, Minneapolis and Houston). And it has raised $1.35 billion in total funding, including a just-announced $380 million round that values the company at $3.9 billion.

The new round was led by Accel and D1 Capital Partners, with participation from Luxor Capital and SoftBank Vision Fund. (Accel and SoftBank both invested previously, as well.)

“Accel first invested in goPuff in 2018 because of the team’s visionary approach to on-demand delivery and its commitment to building the infrastructure needed to create its unique, vertically integrated model,” said Accel partner Ryan Sweeney in a statement. “Because of goPuff’s focused approach, they have consistently delivered some of the best unit economics we’ve seen, while growing nationwide. We’re thrilled to remain a committed partner to Yakir, Rafael and the rest of the goPuff team on their journey.

Image Credits: goPuff

Gola said that he and Ilishayev created the company in 2013 when they were attending Drexel University together and thought, “There has to be a better way to get convenience products delivered.”

Despite the company’s impressive war chest, Gola said goPuff has had “a huge focus on fiscal responsibility” from the start. At first, the founders were the ones making the deliveries, and they funded their initial expansion with cashflow and profits.

“What was important for us from day one was to start a business that makes money, that has real margins,” he said.

To achieve that, Gola touted the startup’s “vertically integrated model,” where it buys products directly from manufacturers, then gets those products to consumers through a network of 200 “micro-fulfillment” centers (staffed with goPuff employees) and a network of independent drivers.

Besides meaning that goPuff “makes money off the products we sell” (rather than simply charging a fee on deliveries), Gola said this model allows the company to mix products from national and local brands, and it’s “constantly introducing new products and discontinuing things that don’t sell.”

Quarantine drives interest in autonomous delivery, but it’s still miles from mainstream

As you’d expect, demand increased significantly during the pandemic, but Gola said the company also made sure to provide protective equipment to all its employees and drivers, and it created an emergency fund to provide financial assistance for any of them who got sick.

In addition to the funding, goPuff is announcing that it has hired former Lowe’s CMO Jocelyn Wong as its first chief customer officer, former Uber global head of fintech and U.S. business development Jonathan DiOrio as its first chief business officer and former TripAdvisor engineering executive Rekha Singh as vice president of engineering.

Looking ahead, as companies like Amazon and Uber are also looking to deliver more and more products in less and less time, Gola said goPuff will continue to differentiate itself in a few key ways.

“There’s nothing like goPuff, so we had to build everything from scratch,” he said. “Whether it’s our location-based inventory system or many things related to our technology, that’s all ours. And then when you talk about differentiation from the customer side, we control the inventory and can make sure that the customers get exactly what they ordered. That focus on our customer is how we’re going to win long-term, and it’s how we got to the point of where we are today.”

Kroger, one of America’s largest grocery chains, experiments with ghost kitchens and delivery in the Midwest

https://ift.tt/34zu9O5 Delivery startup goPuff raises $380M at a $3.9B valuation https://ift.tt/3jL4o3u

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A developer of therapy devices for athletes is now worth $700 million thanks to superstar backers like Naomi Osaka

A crew of high-wattage celebrity athletes have teamed up to invest $47.8 million into Hyperice, a developer of medical devices designed to help players and fitness buffs recover after workouts or games.

Backing the company are some of the biggest names in baseball, basketball, football, surfing and tennis, including: Seth Curry, Anthony Davis, Rickie Fowler, DeAndre Jordan, Jarvis Landry, Patrick Mahomes, Christian McCaffrey, Ja Morant, Naomi Osaka, Chris Paul, Doc Rivers, Ben Simmons, Kelly Slater, Fernando Tatis Jr., J.J. Watt, Russell Westbrook and Trae Young. 

The new investment gives the Irvine, California-based company a valuation of $700 million, according to a statement from the company, and will be used for sales and marketing and product development, the company said.

And it wasn’t just the players that came on as investors behind the sports medicine tech developer. The investment arms of the nation’s biggest sporting leagues are also backing Hyperice. That group includes 32 Equity, which leads strategic investments for the NFL’s 32 Member Clubs; OneTeam, an investment group for the players’ associations representing baseball, basketball, soccer, football, and tennis; and the NBA itself.

The financial advisory and investment firms Main Street Advisors and SC Holdings led the round, according to a statement.

Alongside its new cash, Hyperice has inked some key partnerships as the official recovery technology partner of the NBA and UFC leagues.

Image Credit: Hyperice

“We started Hyperice not only to help improve athletes’ performance and longevity, but to offer the same level of technology to everyday people,” said Anthony Katz, the company’s founder, in a statement. “Over the years, we have developed strong relationships with the athletes that use our products every day. Bringing them into the company as investors was a natural fit because of the authentic connection the athletes have with our brand.”

The next big push for the company is a software service to monitor and manage an athlete’s performance and recommend optimal rest and recuperation times based on information coming from integrated wearable devices and services like Apple Health and Strava, the company said.

“Since I’ve started using Hyperice, I’ve realized how crucial recovery is to getting the most out of my training and preparing my body for competition,” said tennis superstar Naomi Osaka, in a statement. “Hyperice has improved my body and overall health and I know will be fundamental to having a long and healthy career, which is why I invested and want to use my platform to encourage every athlete to take recovery seriously.”

The future of sports tech: Here’s where investors are placing their bets

https://ift.tt/3d8nwGl A developer of therapy devices for athletes is now worth $700 million thanks to superstar backers like Naomi Osaka https://ift.tt/2SD09LA

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MessageBird, the ‘omnichannel platform-as-a-service,’ raises $200M Series C at $3B valuation

MessageBird, the Amsterdam-headquartered cloud communications company, has raised $200 million in Series C funding in a round led by Silicon Valley’s Spark Capital.

The new investment gives 2011-founded MessageBird a whopping $3 billion valuation, and includes participation from Bonnier, Glynn Capital, LGT Lightstone, Longbow, Mousse Partners and New View Capital. Existing investors Accel, Atomico, and Y Combinator also followed on.

Notably, MessageBird spent its first six years largely bootstrapped, claiming to have been profitable from day one. Aside from going through YC’s accelerator programme, the company’s first institutional investment came in late 2017 when it raised $60 million in Series A funding from U.S-based Accel and Europe’s Atomico. TechCrunch understands that off the back of accelerated growth, a $40 million Series B was quietly closed in February 2019 from existing investors but never announced.

Originally seen as a European or “rest of the world” competitor to U.S.-based Twilio — offering a cloud communications platform that supports voice, video and text capabilities all wrapped up in a API — MessageBird has since repositioned itself as an “Omnichannel Platform-as-a-Service” (OPaaS). The idea is to easily enable enterprises and medium and smaller-sized companies to communicate with customers on any channel of their choosing.

Out of the box, this includes support for WhatsApp, Messenger, WeChat, Twitter, Line, Telegram, SMS, email and voice. Customers can start online and then move their support request or query over to a more convenient channel, such as their favourite mobile messaging app, which, of course, can go with them. It’s all part of MessageBird founder and CEO Robert Vis’ big bet that the future of customer interactions is omni-channel.

“People think of live chat as a ‘live’ channel, but [there’s] no ability to jump to other channels,” Vis told me in June when the company launched its omni-channel chat widget and Intercom competitor. “People still have to wait with a browser window open for a response during peak times. With the launch of the first-ever omni-channel widget, customers can now opt to have a business get back to them on WhatsApp, Messenger or the messaging platform of their choice. This means no more customers waiting in line, online, and agents don’t get flooded with tickets and can better manage customer relationships and response times”.

MessageBird launches an ‘omni-channel’ Intercom competitor

In a call earlier this week, Vis told me that the Series C was raised remotely during lockdown, and comes at a time where enterprises are increasingly looking for “messaging-first” customer communication tools across channels. In part, he puts this down to the coronavirus trend of companies wanting to move their sales and customer service fully remote and online, but concedes that with enterprise sales cycles typically quite long, in many instances this expedited digitisation was already underway.

Messagebird says one third of its 15,000 customers have now transitioned to using its omnichannel cloud communications products. Customers include Lufthansa Airlines, Heineken, Hugo Boss, Rituals Cosmetics and SAP, as well as fast-growing brands such as Uber, Glovo, HelloFresh, and Deliveroo.

To that end, MessageBird says the funding will be used to triple the size of its global team and further expand into its core markets in Europe, Asia and Latin America. Vis doesn’t rule out M&A activity, either, including both acqui-hires and companies with products or technology that can add value to MessageBird’s omni-channel offering.

One area the company is bolstering, for example, is the automation capabilities of its “Flow Builder” software, which aims to let customer service agents automate a portion of customer queries via AI-powered chatbots and FAQ bots. The bigger vision is that Flow Builder evolves to become an RPA (robotic process automation) platform for external business messaging.

Vis also says that MessageBird is now officially a “work from anywhere” company, even though he was initially slightly skeptical towards remote working. Now a full convert, he says in many instances at MessageBird the option to work remotely has already resulted in increased productivity and a better work-life balance. As the company continues to expand (and with an eye on a future IPO), he also says that being remote-first should help with recruitment, citing talent as any fast-growing company’s biggest challenge.

MessageBird launches Inbox.ai to disrupt the customer service market

https://ift.tt/eA8V8J MessageBird, the ‘omnichannel platform-as-a-service,’ raises $200M Series C at $3B valuation https://ift.tt/30GLK5q

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Headroom, which uses AI to supercharge videoconferencing, raises $5M

Videoconferencing has become a cornerstone of how many of us work these days — so much so that one leading service, Zoom, has graduated into verb status because of how much it’s getting used.

But does that mean videoconferencing works as well as it should? Today, a new startup called Headroom is coming out of stealth, tapping into a battery of AI tools — computer vision, natural language processing and more — on the belief that the answer to that question is a clear — no bad WiFi interruption here — “no.”

Headroom not only hosts videoconferences, but then provides transcripts, summaries with highlights, gesture recognition, optimised video quality, and more, and today it’s announcing that it has raised a seed round of $5 million as it gears up to launch its freemium service into the world.

You can sign up to the waitlist to pilot it, and get other updates here.

The funding is coming from Anna Patterson of Gradient Ventures (Google’s AI venture fund); Evan Nisselson of LDV Capital (a specialist VC backing companies buidling visual technologies); Yahoo founder Jerry Yang, now of AME Cloud Ventures; Ash Patel of Morado Ventures; Anthony Goldbloom, the cofounder and CEO of Kaggle.com; and Serge Belongie, Cornell Tech associate dean and Professor of Computer Vision and Machine Learning.

It’s an interesting group of backers, but that might be because the founders themselves have a pretty illustrious background with years of experience using some of the most cutting-edge visual technologies to build other consumer and enterprise services.

Julian Green — a British transplant — was most recently at Google, where he ran the company’s computer vision products, including the Cloud Vision API that was launched under his watch. He came to Google by way of its acquisition of his previous startup Jetpac, which used deep learning and other AI tools to analyze photos to make travel recommendations. In a previous life, he was one of the co-founders of Houzz, another kind of platform that hinges on visual interactivity.

Russian-born Andrew Rabinovich, meanwhile, spent the last five years at Magic Leap, where he was the head of AI, and before that, the director of deep learning and the head of engineering. Before that, he too was at Google, as a software engineer specializing in computer vision and machine learning.

You might think that leaving their jobs to build an improved videoconferencing service was an opportunistic move, given the huge surge of use that the medium has had this year. Green, however, tells me that they came up with the idea and started building it at the end of 2019, when the term “Covid-19” didn’t even exist.

“But it certainly has made this a more interesting area,” he quipped, adding that it did make raising money significantly easier, too. (The round closed in July, he said.)

Given that Magic Leap had long been in limbo — AR and VR have proven to be incredibly tough to build businesses around, especially in the short- to medium-term, even for a startup with hundreds of millions of dollars in VC backing — and could have probably used some more interesting ideas to pivot to; and that Google is Google, with everything tech having an endpoint in Mountain View, it’s also curious that the pair decided to strike out on their own to build Headroom rather than pitch building the tech at their respective previous employers.

Green said the reasons were two-fold. The first has to do with the efficiency of building something when you are small. “I enjoy moving at startup speed,” he said.

And the second has to do with the challenges of building things on legacy platforms versus fresh, from the ground up.

“Google can do anything it wants,” he replied when I asked why he didn’t think of bringing these ideas to the team working on Meet (or Hangouts if you’re a non-business user). “But to run real-time AI on video conferencing, you need to build for that from the start. We started with that assumption,” he said.

All the same, the reasons why Headroom are interesting are also likely going to be the ones that will pose big challenges for it. The new ubiquity (and our present lives working at home) might make us more open to using video calling, but for better or worse, we’re all also now pretty used to what we already use. And for many companies, they’ve now paid up as premium users to one service or another, so they may be reluctant to try out new and less-tested platforms.

But as we’ve seen in tech so many times, sometimes it pays to be a late mover, and the early movers are not always the winners.

The first iteration of Headroom will include features that will automatically take transcripts of the whole conversation, with the ability to use the video replay to edit the transcript if something has gone awry; offer a summary of the key points that are made during the call; and identify gestures to help shift the conversation.

And Green tells me that they are already also working on features that will be added into future iterations. When the videoconference uses supplementary presentation materials, those can also be processed by the engine for highlights and transcription too.

And another feature will optimize the pixels that you see for much better video quality, which should come in especially handy when you or the person/people you are talking to are on poor connections.

“You can understand where and what the pixels are in a video conference and send the right ones,” he explained. “Most of what you see of me and my background is not changing, so those don’t need to be sent all the time.”

All of this taps into some of the more interesting aspects of sophisticated computer vision and natural language algorithms. Creating a summary, for example, relies on technology that is able to suss out not just what you are saying, but what are the most important parts of what you or someone else is saying.

And if you’ve ever been on a videocall and found it hard to make it clear you’ve wanted to say something, without straight-out interrupting the speaker, you’ll understand why gestures might be very useful.

But they can also come in handy if a speaker wants to know if he or she is losing the attention of the audience: the same tech that Headroom is using to detect gestures for people keen to speak up can also be used to detect when they are getting bored or annoyed and pass that information on to the person doing the talking.

“It’s about helping with EQ,” he said, with what I’m sure was a little bit of his tongue in his cheek, but then again we were on a Google Meet, and I may have misread that.

And that brings us to why Headroom is tapping into an interesting opportunity. At their best, when they work, tools like these not only supercharge videoconferences, but they have the potential to solve some of the problems you may have come up against in face-to-face meetings, too. Building software that actually might be better than the “real thing” is one way of making sure that it can have staying power beyond the demands of our current circumstances (which hopefully won’t be permanent circumstances).

https://ift.tt/eA8V8J Headroom, which uses AI to supercharge videoconferencing, raises $5M https://ift.tt/30K1dlp

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Understanding Airbnb’s summer recovery

New numbers concerning Airbnb’s summer performance were reported this week, with The Information adding to the performance figures that Bloomberg previously detailed earlier this year.

Airbnb announced that it filed privately to pursue a debut this August. We have yet to see its public IPO filing, but, all the same, the flotation is coming.

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If you’re like me, this year’s chaotic news cycles have made it hard to track any single story well. So this morning I want to put together a financially-focused chronology of Airbnb’s year, including the new data. Enough has happened over the past few months that any prior work we’ve done is too dated to use.

So, let’s rewind the clock and dig into the biggest financial moment from Airbnb’s 2020, capping off with the latest reporting, including details from the company itself on booking volume recovery as we go.

This should be easy, fun and useful. Let’s go!

Airbnb’s 2020

Heading into 2020, Airbnb promised to go public in 2020. Given that there’s technical pressure from holders of Airbnb stock options for the company go public inside the year, the vow made sense. Airbnb was founded around 12 years ago, meaning that the company was already a bit aged for a private firm on an IPO path. Toss in the options issue, and if Airbnb wanted to hold onto its workforce, this was the year to go.

And Airbnb was well-capitalized heading into this year, so a direct listing was in the cards.

Enter 2020 and a few unexpected events. When COVID-19 hit Airbnb’s key markets it took the travel market with it, leading to this column asking on March 18th whether the company could go public this year given the state of its industry. At that point we knew that Airbnb’s cash balance was about $2 billion heading into the start of the year, and that the company had reported Q4 2019 revenue of around $1.1 billion (+32% YoY, per Bloomberg) and negative earnings before interest, taxes, depreciation and amortization of $276.4 million (+92.4% YoY, per Bloomberg).

The company’s persistent lack of profits heading into 2020 was the subject of our curiosity at the start of the year.

In late March, Airbnb announced that it would pay out $250 million to hosts to soften the blow of the pandemic’s travel declines. That was not a cheap move, and when the company expanded the policy this column wrote that it was “an intelligent if expensive way to help preserve user trust.”

https://ift.tt/3hBN9RE Understanding Airbnb’s summer recovery https://ift.tt/3nxp0ys

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