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Saturday, April 24, 2021

Building a creator-focused OS

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. 

A week ago TechCrunch covered Pico’s $6.5 million funding round and described it as “a New York startup that helps online creators and media companies make money and manage their customer data.” The Exchange has also covered Pico before, most recently during a mid-2020 dive into the world of indie pubs and subscription media.

While our own Anthony Ha did an inimitable job covering the Pico round, I got on a Zoom call with the company, as well, as their new capital came with a relaunch of sorts that I wanted to better understand.

The Pico team walked me through what’s changed at their business by describing the historical progress of creative digital tooling. They said earlier eras in the space focused on content hosting and distribution. In the startup’s view, a new generation of creative-focused tooling will bring the market to an era in which content management systems, or CMSs — say, Substack or WordPress — will not own the center of tooling. Instead, monetization will.

That’s Pico’s bet, and so it’s building what it considers to be an operating system for the creator market. My gut read is that a creative digital world that centers around monetization sounds like one that is more lucrative than what preceding eras brought us.

Pico’s view is that regardless of where someone first builds their audience, they eventually go multi-SKU — or multi-platform, perhaps — so keeping a single, centralized register of customer data may prove critical.

The startup’s revamped service is a bit of a monetization tool, as before, along with a creator-focused CRM that sits atop your CMS or other digital output on any particular platform. So far customer growth at the company looks good, growing by about 5x in the last year. Let’s see how far Pico can ride its vision, and if it can help build out a middle class in the creator economy.

The grocery revolution will be IRL

Somewhat lost in our circles amid the hype regarding Instacart’s epic COVID period is the fact that most folks still go to stores to buy their fruit and veg, as our friends in the UK might say.

Grocers did not forget the fact. But their historically thin margins and rising competition for customer ownership in the Instacart era hasn’t left them too secure. How can they pursue a more digitally enabled strategy without outsourcing their customer relationship to a third party?

Swiftly might be part of the answer. The startup is building technology that may help grocery chains of all sizes go digital, take advantage of modern mobile technology, and generate more incomes via ads, while offering consumers more shopping options. Neat, yeah?

The startup has raised a little over $15 million to date, per Crunchbase data, but came back into our minds thanks to the launch of a deal with the Dollar Tree company, a consumer retailer that has around one zillion stores in America.

I’ve been aware of Swiftly for ages, having met its co-founder Henry Kim back when he was building Sneakpeeq, which later became Symphony Commerce. The latter company was eventually bought by Quantum Retail. But during my chats with Kim over the years in and around San Francisco, he consistently brought up the grocery market, a space he’d had experience in before building Symphony Commerce.

After hearing Kim hype up the possibilities for grocery and digital for a half decade or so, to see the company that came out of his hopes and planning land a major partner is fun.

Swiftly provides two main products, a retail system and a media service. The retail side of its business provides checkout services, loyalty programs, personalized offers and the like for mobile shoppers. And the media side allows IRL grocers to snag a bit of the consumer packaged goods (CPG) ad spend that they often miss out on, while looping in analytics to provide better attribution to the impact of ads sold.

I expect that Swiftly will raise more capital in the next few quarters now that it has a big, public deal out. More when we have it.

UiPath, SPACs, and a neat venture capital round

Over the past two weeks The Exchange has written quite a lot about the UiPath IPO. Probably too much. But to catch you up just in case, the company’s first IPO pricing range looked like a warning for late-stage investors as the resulting valuations were a bit lower than anticipated. Next the company raised that range, ameliorating if not eliminating our earlier concern. Then the company priced above its raised range, though still at a discount to its final private round. Then it gained ground after starting to trade, and its CFO was like, we did good.

To dig even more into the company’s private-public valuation saga, The Exchange asked B2B investor Dharmesh Thakker, a general partner at Battery Ventures, about his take on the company’s final private round in the context of it landing a bit higher than where the company eventually priced its IPO. Here’s what he had to say:

[T]here was smart money involved in that round. These are people who understand that material value creation happens 3-5 years post IPO, as we have seen with Twilio, Atlassian, MongoDB, Okta, and Crowdstrike who have increased value 5-10x post IPO.

Right now, UIPath has only 1% penetration at $608M revenue in a $60B automation market, and the urgency around intelligent process automation for repetitive tasks is only increasing post-COVID. Companies need help managing their costs with automation. So, as the company penetrates its target market and grows over time, UIPath will drive ongoing value, which pre-IPO and IPO stage investors realize. They will be patient.”

He’s bullish, in other words. A more acerbic take on the UiPath IPO came in from PitchBook analyst Brendan Burke. Here’s what he had to say about the company and its market:

RPA has scaled rapidly due to the demand for automation yet remains a limited solution that may lack durable value. Due to its reliance on custom scripts, we view RPA as a bridge technology to cloud-native AI automation that faces competitive risk from AI-native challengers. The future of enterprise automation is for front-line users to deploy cloud-native machine learning models that can adapt to dynamic data streams and make accurate decisions. UiPath’s implementations are not cloud-native and require third party integrations with around 75 AI model vendors for intelligent decision-making. Additionally, the company lists the ability to recruit AI engineers as a risk factor for the business. UiPath’s ability to expand across the AI value chain will be critical for its long-term prospects.

I include that remark as it can be, at times, hard to get actual negative commentary out of the broader analyst world, as people are so terrified of being rude.

Scooting along, there’s a new SPAC deal out this week that I wanted to flag for you: SmartRent is merging with Fifth Wall Acquisition Corp. I. SmartRent raised more than $100 million while private, according to Crunchbase data, from RET Ventures, Spark Capital and Bain Capital Ventures, among others.

So this particular SPAC deal, which puts a $2.2 billion equity valuation on SmartRent, is a material venture-backed exit. You can check its investor deck here. We care about the company as it appears to work in a similar space to Latch, which is also going out via a SPAC. Dueling OS companies for rental units? This should be fun. (More on Latch’s SPAC deal here.)

Finally for our main work today, HYPR raised $35 million this week. Among all the venture capital rounds that I wish I could have written about this week but didn’t get to, HYPR is up there because it promises a password-free future. And having just raised a Series C, it may have a shot at pulling it off. Please god, let it happen.

Various and sundry

I got to cover a few rounds raised by recent Y Combinator graduates this week, including Queenly and Albedo’s recent funding events. Check ‘em out.

Oh, and Afterpay’s recent earnings show that the buy-now-pay-later market is still growing like all hell,

Alex



https://ift.tt/eA8V8J Building a creator-focused OS https://ift.tt/3ereZ2l

What the MasterClass effect means for edtech

MasterClass, which sells a subscription to celebrity-taught classes, sits on the cusp of entertainment and education. It offers virtual, yet aspirational learning: an online tennis class with Serena Williams, a cooking session with Gordon Ramsay. While there’s the off chance that an instructor might actually talk to you — it has happened before — the platform mostly just offers paywalled documentary-style content.

The vision has received attention. MasterClass is raising funding that would value it at $2.5 billion, as scooped by Axios and confirmed independently by a source to TechCrunch. But while MasterClass has found a sweet spot, can the success be replicated?

Investors certainly think so. Outlier, founded by MasterClass’ co-founder, closed a $30 million Series C this week, for affordable, digital college courses. The similarities between Outlier and its founder’s alma mater aren’t subtle: It’s literally trying to apply MasterClass’ high-quality videography to college classes. This comes a week after I wrote about a “MasterClass for Chess lovers” platform launched by former Chess World Champion Garry Kasparov.

Two back-to-back MasterClass copycats raising millions in venture capital makes me think about if the model can truly be verticalized and focused down into specific niches. After 2020 and the rise of Zoom University, we know edtech needs to be more engaging, but we don’t know the exact way to get there. Is it by creating micro-learning communities around shared loves? Is it about gamification? Aspirational learning has different incentives than for-credit learning. In order to be successful, Outlier needs to prove to universities it can use MasterClass magic for true outcomes that rival in-person lectures. It’s a harder, and more ambtious promise.

My riff aside, I turned to two edtech founders to understand how they see the MasterClass effect panning out, and to cross-check my gut reaction.

Taylor Nieman, the founder of language learning startup Toucan:

Although I do love how these models try to lean into this theme of “invisible learning” like we leverage with Toucan, it faces the same issues as so many other consumer products that try to steal time out of people’s very busy days. Constantly competing for time leads to terrible engagement metrics and very high churn. That leads me to question what true learning outcomes could occur from little to no usage of the product itself.

Amanda DoAmaral, the founder of Fiveable, a learning platform for high school students:

Masterclass is important for showing us why educational content should be treated more like entertainment. All of our bars for content quality is much higher now than it ever was before and I’m excited to see how that affects learning across the board.

For students, it’s about creating environments that support them holistically and giving them space to collaborate openly. It feels so obvious that these spaces should exist for young people, but we’ve lost sight of what students actually need. At my school, we built policies that assumed the worst in students. I want to flip that. Assume the best, be proactive to keep them safe, and create ways to react when we need to.

Anyways, that’s just some nuance to chew on during this fine day. In the rest of this newsletter, we will focus a lot on tactical advice for founders, from the money they raise to the peacock dance they might want to do one day. Make sure to follow me on Twitter @nmasc_ so we can talk during the week, too!

The peacock dance

You know when male peacocks fan their feathers to court a lover? That, but for startups trying to get acquired. As one of our many rabbit holes on Equity this week, we talk about Discord walking away from a Microsoft deal, and if that deal ever existed in the first place or if it was just a way to drum up investor excitement in the audio gaming platform.

Here’s what to know: Discord is reportedly pursuing an IPO after walking away from talks with multiple companies that were looking to acquire the audio gaming giant.

Discord aside, the consolidation environment continues to be hot for some sectors.

Four business people used ropes to tighten their money bags, economic austerity, reduced income, economic crisis

Image Credits: VectorInspiration / Getty Images

Even venture capital knows that the future isn’t simply venture capital

Clearbanc, a Toronto-based fintech startup that gives non-dilutive financing to businesses, has rebranded alongside a $100 million financing that valued it at $2 billion. Now rebranded as Clearco, the startup wants to be more than just a capital provider, but a services provider, too.

Here’s what to know: The startup has been on a tear of product development for the past year, launching services such as valuation calculators or runway tools. It’s a step away from what Clearbanc originally flexed: the 20-minute term sheet and rapid-fire investment. I talk about some of the levers at play in my piece:

Many of Clearco’s newest products are still in their infancy, but the potential success of the startup could nearly be tied to the general growth of startups looking for alternatives to venture capital when financing their startups. Similar to how AngelList’s growth is neatly tied to the growth of emerging fund managers, Clearco’s growth is cleanly related to the growth of founders who see financing as beyond a seed check from Y Combinator.

abstract human brain made out of dollar bills isolated on white background

Abstract human brain made out of dollar bills isolated on white background. Image Credits: Iaremenko / Getty Images

Don’t market your opportunity away

Keeping on the theme of tactical advice for founders, let’s move onto talking about marketing. Tim Parkin, president of Parkin Consulting, explained how startup founders can use marketing as a tool to stand out in the noisy environment. Differentiation has never been harder, but also more imperative.

Here’s what to know: Parkin outlines four ways that martech will shift in 2021, strapped with anecdotes and a nod to the importance of investing in influencers.

Red ball on curved light blue paper, blue background. Image Credits: PM Images / Getty Images

Around TechCrunch

Your humble yet favorite startup podcast, Equity, got nominated for a Webby! Me and the team need your help to win, so please vote for us here. Your support means a ton.

This newsletter will always be free, but if you do want to support me, feel free to use code STARTUPSWEEKLY for 25% off a subscription to Extra Crunch.

Across the site

Seen on TechCrunch

The rise of the next Coinbase, thanks to Coinbase

Attack of the robotic SPACs

Tiger Global backs Indian crypto startup at over $500M valuation

This is your brain on Zoom

Early Coinbase backer Garry Tan is keeping the ‘vast majority’ of his shares because of this deal

Seen on Extra Crunch

Dear Sophie: How can I get my startup off the ground and visit the US?

How to pivot your startup, save cash and maintain trust with investors and customers

How startups can ensure CCPA and GDPR compliance in 2021

As UiPath closes above its final private valuation, CFO Ashim Gupta discusses his company’s path to market

European VC soars in Q1

zoom glitch

Image Credits: TechCrunch

Thanks for reading along today and everyday. Sending love to my readers in India and everyone around the world that is facing yet another deadly surge of this horrible disease. I’m rooting for you.

N



https://ift.tt/3vneehH What the MasterClass effect means for edtech https://ift.tt/3dN3TWc

India orders Twitter to take down tweets critical of its coronavirus handling

Twitter has taken down dozens of tweets in India, some of which were critical of New Delhi’s handling of the coronavirus, to comply with an emergency order from the Indian government.

New Delhi made an emergency order to Twitter to censor over 50 tweets in the country, Twitter disclosed on Lumen database. The social network has complied with the request, and withheld those tweets from users in India.

TechCrunch has learned that Twitter is not the only platform affected by the new order.

India, which has also previously ordered Twitter to take down some tweets and accounts critical of its policies and threatened jail time to employees in the event of non-compliance, comes as the country reports a record of over 330,000 new covid cases a day, the worst by any country. News reports suggest that even this number is underreported.

Amid a collapse of the nation’s health infrastructure, Twitter has become a rare beam of hope as people crowdsource data and help one another find medicines and oxygen cylinders.

A copy of one of Indian government’s orders disclosed by Twitter. (Lumen Database)

Medianama, which first reported on New Delhi’s new order, said among those whose tweets have been censored in India include Revanth Reddy (a Member of Parliament), Moloy Ghatak (a minister in West Bengal), Vineet Kumar Singh (actor) filmmakers Vinod Kapri and Avinash Das.

In a statement, a Twitter spokesperson said, “When we receive a valid legal request, we review it under both the Twitter Rules and local law. If the content violates Twitter’s Rules, the content will be removed from the service. If it is determined to be illegal in a particular jurisdiction, but not in violation of the Twitter Rules, we may withhold access to the content in India only. In all cases, we notify the account holder directly so they’re aware that we’ve received a legal order pertaining to the account.”

“We notify the user(s) by sending a message to the email address associated with the account(s), if available. Read more about our Legal request FAQs.  The legal requests that we receive are detailed in the bianual Twitter Transparency Report, and requests to withhold content are published on Lumen.”



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8 investors, founders and execs predict cybersecurity, fintech will take Belfast by storm

Things have been looking up for Belfast since the end of the Troubles. The city has undergone infrastructure improvements over the past two decades, tourism has boomed thanks to attractions such as the shipyard where the RMS Titanic was built and Game of Thrones shooting locations, and employment has risen steadily in the city since 2016, according to Northen Ireland’s Department for the Economy. The city also has the famed Queen’s University and low living costs to count in its favor, and gentrification is starting to take place, which shows things are looking up for Northern Ireland’s capital.

And as far as the local startup scene goes, the U.K.’s Tech Nation found in 2018 that about 26% of Belfast’s workforce was employed in tech, and it is among cities in the country with the highest growth potential for 2021.

With that in mind, we reached out to founders, investors and executives in the city to get an inside look at the state of the current tech startup ecosystem. According to the survey, the city is strong in sectors such as fintech, agritech, hospitality tech, emerging tech, cybersecurity, SaaS and medtech. Ignite NI emerged as an important native incubator and accelerator.

Interesting startups that our respondents mentioned include: CropSafe, SideQuest, Aflo, Material Evolution, Cloudsmith, LegitFit, Continually, Gratsi, 54 North Design, Animal Manager, Kairos Sports Tech, Budibase, Incisiv, Automated Intelligence, loyalBe, Konvi, Lane 44, Teamfeepay.com, Axial3D, Neurovalens, Payhere, and Civic Dollars.


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The tech investment scene was characterized as being strong in software and life sciences, but sometimes too conservative or risk-averse. However, this seems to be changing for the better, and foreign direct investment (FDI) is an important growth factor for the ecosystem.

Although there remains uncertainty around how Brexit will affect Northern Ireland, one executive said, “If we play our cards right, we can capitalize on it. Being positioned both in the EU and U.K. markets gives us advantages that we would be foolish to waste.”

One of the founders foresees more private capital flowing into Belfast as global investors realize that “the combination of great local universities and very strong FDI has attracted some brilliant engineers.” The low cost of living is also encouraging for talent to stay put in the city, which makes for a tech scene that’s poised to take off, this founder added.

Here’s who we spoke to:

 

Cormac Quinn, founder & CEO, loyalBe

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
We’re strong in cybersecurity and (to an arguably lesser extent) fintech. I’m excited by the droves of new startups being created here in all sorts of sectors — traditionally, Belfast hasn’t had a lot of tech startups, but I can see that changing right before my eyes, which is very exciting. I always anticipated having to leave Belfast for the U.S. to be able to start a tech company, but I’m glad this is no longer a requirement or even the standard any more.

Which are the most interesting startups in your city?
There are a few that stand out: Cloudsmith (devtools), LegitFit (scheduling), Continually (chatbots/marketing), and Automated Intelligence (data management). This is certainly not an exhaustive list of interesting startups, just a few that come to mind.

What are the tech investors like in Belfast? What’s their focus?
Investors here can be somewhat conservative and slightly traditional. If you’re raising investment north of £1 million, you would likely need to look outside the jurisdiction. There also just isn’t enough private capital at the moment, which is a shame, as Belfast has some fantastic talent combined with a very low cost of living, which means investor money tends to go further (no crazy rents, reasonable salaries, etc.). It feels we’re at the beginning of a cycle in Belfast, however — I expect to see many more local exits over the coming years, which will likely lead to new private capital inflows.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
I understand the city was growing pre-pandemic, and I believe this trend will continue once life returns to a semi-normal state. For a long time, Belfast was a city people didn’t want to live in due to historical issues, but that has been slowly changing. New developments are popping up all over the city, from student accommodation to hotels and nice apartments. 15-20 years ago, Belfast had hardly any of this.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Chris McClelland, MD of Ignite NI: He’s a mentor on the city’s top accelerator program. Co-founded BrewBot.
Ian Browne, COO of Ignite NI: Entrepreneur and another mentor to startups in the city.
Mark Dowds: Venture partner at Anthemis, co-founder at Ormeau Baths (in my opinion it’s the city’s best co-working space).

Where do you see your city’s tech scene in five years?
We’re in uncertain times due to Brexit, but I think if we play our cards right, we can capitalize on it. Being positioned both in the EU and U.K. markets gives us advantages that we would be foolish to waste. I do think we will see more private capital flowing into Belfast as global investors realize that the combination of great local universities and very strong FDI has attracted some brilliant engineers. Combine that with the fact that cost of living remains quite low, which means their capital can go much further (rather than going to landlords) and you have a tech scene that’s poised for take-off.

Can you recommend any companies that should appear in our global Startup Battlefield competition?
Cloudsmith.

Susan Kelly, CEO, Respiratory Analytics

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Cybersecurity, fintech, digital — strong medtech — needs building. Great incubator and accelerator in Ignite, but needs expansion to the Northwest where deprivation and poor infrastructure need to be addressed. Public funding supports are good, but too fragmented and hard to access.

Which are the most interesting startups in your city?
CropSafe, SideQuest, Aflo (my startup!), Material Evolution.

What are the tech investors like in Belfast? What’s their focus?
Too conservative, “stale, pale, male”, and risk-averse. But changing for the better, slowly. Legal’s far too costly. Needs to shift to a more U.S. type model. Too few women on the scene. Focus on software, which is great, but too risk-averse in hardware. Needs more experienced angel investors. Halo Business Angel Network feels staid.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
Huge shift back to Belfast and Northern Ireland in general as a result of COVID.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Ignite NI is driving the startup scene via Propel (Pre-Accelerator) and the Accelerator — doing an amazing job. Clarendon, Techstart, various angels, and Catalyst. Big Motive is a key design engine.

Where do you see your city’s tech scene in five years?
With more support from Invest NI, the whole of Northern Ireland can be an innovation hub linked to Ireland via the startup ecosystem.

Can you recommend any companies that should appear in our global Startup Battlefield competition?
CropSafe.

Ryan Crown, co-founder, Hill Street Hatch

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
We’re strong in the tech industry. We’re excited by changing how we launch hospitality ventures. Belfast is weak in investment and investors.

Which are the most interesting startups in your city?
Payhere, Civic Dollars, and Konvi.

What are the tech investors like in Belfast? What’s their focus?
We’re lacking proper investors in Northern Ireland.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
The cost of living and quality of life is fantastic in Northern Ireland/Belfast. COVID-19 will see a huge influx of people moving from expensive cities such as London, Manchester, or Dublin and relocating to Belfast.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Chris McClelland.

Where do you see your city’s tech scene in five years?
Booming.

Fearghal Campbell, founder, Pitchbooking

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Cybersecurity, SaaS, sportstech. Most excited by a range of early-stage tech companies — [there has been] an explosion in pre-seed and seed level companies over the past two to three years. Weaker at scaling up; relative lack of indigenous scale-up companies. Large number of foreign direct investment from U.S.-based companies into the city.

Which are the most interesting startups in your city?
In the sportstech sector, teamfeepay.com are growing fast. loyalBe are a seed-stage fintech company with big plans for reinventing retail loyalty programs that we always keep an eye on. Later-stage companies like medtech mainstays Axial3D and Neurovalens are doing great things too!

What are the tech investors like in Belfast? What’s their focus?
We have a mix of angel and institutional investors in Belfast. Hard to say a specific focus on a particular industry, but there are a couple of sectors that are strong in the city given the focus of the local universities. Medtech and cybersecurity both feature heavily in the startup scene.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
Belfast benefits from a relatively low cost of living in relation to the rest of the U.K., meaning that we are seeing an increase in startups moving here from other major cities. The support for early-stage startups has also contributed to this influx. As a city, we are well set up for moving to a hybrid way of working. You can traverse across the center of the city in 15 mins on foot, which means popping into a city center office isn’t a big undertaking.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Invest NI – Government support agency.
Ignite NI – Seed-stage accelerator program.
UlsterBank Accelerator – Early-stage accelerator program.
Aurient Investments – Angel investment group with a diverse investment portfolio.

Where do you see your city’s tech scene in five years?
I believe we will see the strongest seed-stage companies from 2017-2020 becoming established companies within our tech scene to match the influx of FDI companies from further afield.

Jack Spargo, co-founder & CEO, Gratsi

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Strong in: Fintech, agritech, hospitality tech, and emerging tech.
Most excited by: support (financial, mentoring, etc.) is available and the cost to build and grow is low.
Weakest in: geographical barriers to rest of UK and EU.

Which are the most interesting startups in your city?
loyalBe, Konvi, and Lane 44.

What are the tech investors like in Belfast? What’s their focus?
Great — good support and intros facilitated by accelerators such as Ignite NI, Catalyst, Techstart, Ormeau Baths, etc.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
More likely to move in: low cost of living and well set up for being remote already.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Chris McClelland and Ian Browne of Ignite NI; Mark Dowds of anthemis, and Cormac Quinn of loyalBe.

Where do you see your city’s tech scene in five years?
Stronger: a tech hub for the UK and the EU.

Brendan Digney, founder, Machine Eye Technology

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Agritech and Constuction tech are industries with huge potential, particularly in Ireland and Northern Ireland, where there are traditional strengths and the opportunity to influence based upon use of AI and data.

Which are the most interesting startups in your city?
Kairos Sports Tech, Budibase, Incisiv, and Automated Intelligence.

What are the tech investors like in Belfast? What’s their focus?
There are a number of VCs/funds that are generally linked to each other and Invest NI. INI is a big support and funder. Catalyst are a not-for-profit support who are possibly the most valuable in the whole system. Investment focus is generally around software and life sciences, although other funds are around. Strong focus on foreign and inward businesses.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
[People will] move out to rural areas within an hour’s drive of the city.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Catalyst, Ormeau Baths, and Raise Ventures.

Where do you see your city’s tech scene in five years?
Significant growth in the scene, with an expansion into more later-stage businesses.

Toyah Warnock, co-founder, Lane 44

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Belfast is a growing hub of fantastic businesses and funding opportunities.

Which are the most interesting startups in your city?
Gratsi, 54 North Design, and Animal Manager.

What are the tech investors like in Belfast? What’s their focus?
SaaS.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
Belfast is inexpensive to live in. Many people will be moving in.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Ormeau Baths.

Where do you see your city’s tech scene in five years?
It will grow rapidly. Belfast is going through a period of gentrification.

Can you recommend any companies that should appear in our global Startup Battlefield competition?
Lane 44, Animal Manager, and Gratsi.

Alan Carson, CEO, Cloudsmith

Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Strong in security, fintech, and medtech. Excited about devtools.

Which are the most interesting startups in your city?
Cloudsmith and Axial3D.

What are the tech investors like in Belfast? What’s their focus?
Small investor scene, but with an ambitious founder scene. Medtech and security are popular.

With the shift to remote working, do you think people will stay in Belfast? Will they move out? Will others move in?
No idea. Probably a bit of both.

Who are the key startup people in your city (e.g. Investors, founders, lawyers, designers)?
Techstart Ventures, Ignite NI, Catalyst, Clarendon Co-Fund, Denis Murphy, Colm McGoldrick, and Alastair Bell.

Where do you see your city’s tech scene in five years?
Bigger and better than ever.

Can you recommend any companies that should appear in our global Startup Battlefield competition?
VideoFirst.



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Friday, April 23, 2021

Filing: Snap paid $124M for Fit Analytics as it gears up for a bigger e-commerce push

Earlier this year we reported on how Snap had acquired Berlin-based Fit Analytics, an AI-based fitting technology startup, as part of a wider push into e-commerce services, specifically to gain technology that can help prospective online shoppers get a better sense of how a particular item or size would fit them. A 10-Q filing from Snap today has now put a price tag on that deal.

Snap paid a total of $124.4 million, covering technology, IP, customer relationships and payouts to the team. The filing also noted that Snap spent a total of $204.5 million on acquisitions in 2020, but did not break them out.

The news comes ahead of Snap — whose flagship app Snapchat now has 280 million daily active users — preparing for its Snap Partner Conference in May. Sources say the company plans to announce, among other news, deeper commerce features for Snapchat — specifically tools to make it easier for Snapchat users to interact with and buy items that appear in the app, either in ads or more organically in content shared by other users.

While the exact details of those commerce tools, and the timing of when they might come online, are not yet known, Snap has hardly kept its interest in commerce a secret.

Snap has been hiring for roles to support its commerce efforts. Currently it’s advertising for a variety of engineering, marketing and product roles in commerce, to, in the words of one of the listings, for a Product Manager, “develop and launch shopping experiences and services that make shopping fun for Snapchatters and drive results for brands.” The listings also include a role specifically to work on Snapchat-based e-commerce efforts for direct-to-consumer (D2C) businesses.

And it has been making other recent acquisitions in addition to Fit Analytics that also line up with that.

They have included Screenshop, an app that describes itself as “the first AI-back style lens,” which can identify shoppable items in photos and then build a custom catalog of similar products that you can buy (akin to “shop the look” features that you will have come across in fashion media). And it’s also acquired Ariel AI, which has built technology to quickly render people in 3D, technology that can be used in a diverse set of applications, from games to virtual try-ons of clothing, makeup or accessories.

Snap confirmed the Ariel acquisition to CNBC in January. And while Screenshop deal was first reported earlier this month by The Information, Snap has declined to comment on it, although we have found people who worked at the startup now working at Snap.

Both acquisitions closed in 2020, according to reports, meaning that they came out of that year’s $204.5 million acquisition run. (Snap also noted a smaller acquisition, for $7.6 million, in the most recent quarter, but it did not disclose any further details.)

Even before all this, Snap had been making smaller efforts and tests in commerce going back years, although none of them have tipped into mainstream efforts.

Among them, in 2018 it launched a Snap Store — but that so far has not progressed beyond selling merchandise based on Bitmoji characters. And work on a Gucci shoe campaign last year, where Snapchat users could try shoes on in AR and then buy them, was seen by some as its big step into commerce — “we’ve moved from pure entertainment and expanded the use-case. And so with brands, it’s a really exciting time, especially in fashion and beauty. The Snapchat camera is connecting brands to their audiences in new ways,” a Snapchat AR executive said at the time — but that also didn’t develop into much beyond a one-off effort.

But with the pandemic leading to a surge of shopping online, and technology continuing to improve, the iron may finally be hot here.

As we said around the Fit Analytics acquisition, the idea of diversifying Snapchat’s revenue streams by building in more commerce experiences makes a lot of sense.

It gives the company another revenue stream at a time when Apple is introducing changes that might well affect how advertising can run and be monetized in the future. (The company most recently posted average revenues per user of $2.74, a figure Wall Street will be hoping will grow, not shrink.) It also plays into the demographics that Snapchat targets, where younger consumers are using social media apps to discover, share and shop for goods.

And specifically in the case of fashion, building experiences to shop for items on Snapchat leans into the augmented reality, image-altering, hyper-visual technology that has become a well-known and much-used hallmark of Snapchat and its owner, self-titled “camera company” Snap.



from Social – TechCrunch https://ift.tt/eA8V8J Filing: Snap paid $124M for Fit Analytics as it gears up for a bigger e-commerce push Ingrid Lunden https://ift.tt/3vk8uVV
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Extra Crunch roundup: Klaviyo EC-1, micromobility’s second wave, UiPath CFO interview, more

Origin stories are satisfying because we already know the hero will overcome the odds — and in doing so, they’ll reveal their core strengths.

This week, we published a four-part series about how Klaviyo co-founders Andrew Bialecki and Ed Hallen bootstrapped their startup into an e-commerce marketing automation platform now valued at $4.15 billion.

Neither founder was bitten by a radioactive spider or received a serum that enhanced their entrepreneurial skills; instead, they focused on outreach to prospective customers to find out what they were willing to pay for and largely ignored the competition.

“Bootstrapping Klaviyo, it came out of this: ‘Hey, if we are super-disciplined about finding a problem that someone will pay us to solve, we have a real company,'” said Hallen.


Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription


Even though millions of us respond every day to the personalized, automated emails sent through its platform, Klaviyo still isn’t a well-known brand. Our ongoing series of EC-1s offers entrepreneurs real insight into growing and scaling successful companies, but they’re also extremely useful for consumers who want to understand how the internet really works.

Thanks very much for reading Extra Crunch; I hope you have a great weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

The Klaviyo EC-1

Image Credits: Nigel Sussman

Micromobility’s next big business is software, not vehicles

Set of 3 electric kick scooters with map location pin and different percent of battery charge indicator isolated on white background. Micromobility city transport. Vector illustration eps10.

Image Credits: slowcentury (opens in a new window) / Getty Images

Several micromobility companies once operated in my city, but consolidation has reduced that to a small handful.

Now that many consumers are buying their own e-bikes and e-scooters, shared dockless micromobility “just hasn’t proven itself to be a profitable line of business,” Puneeth Meruva, an associate at Trucks Venture Capital, told TechCrunch.

There’s only one dockless electric moped provider in my town, so price is no longer a consideration. Instead, my first priority is to find a vehicle with the best-charged battery. (San Francisco has a lot of hills, and you never know where the day might take you.)

Larger players like Lime and Bird have vertically integrated tech stacks for fleet management features like this, but there are also opportunities for startups — imagine a “phantom scooter” that drives itself to a neighborhood with high demand or a moped that alerts drivers if there’s traffic ahead.

This in-depth industry analysis shows how increased regulation on the local level and changing consumer habits are pushing micromobility providers to adapt and innovate.

“Whether you want to stack regulatory compliance on the vehicles, do safety features like ADAS or add mapping content, you kind of need this platform where you can actively develop and launch new apps on the vehicle without having to bring it back to the factory,” Meruva said.

Enterprise security attackers are one password away from your worst day

If the definition of insanity is doing the same thing over and over and expecting a different outcome, then one might say the cybersecurity industry is insane.

Criminals continue to innovate with highly sophisticated attack methods, but many security organizations still use the same technological approaches they did 10 years ago. The world has changed, but cybersecurity hasn’t kept pace.

Data scientists: Bring the narrative to the forefront

Book on wooden deck with glowing graph illustrations and symbols

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By 2025, 463 exabytes of data will be created each day, according to some estimates. It’s now easier than ever to translate physical and digital actions into data, and businesses of all types have raced to amass as much data as possible in order to gain a competitive edge.

However, in our collective infatuation with data (and obtaining more of it), what’s often overlooked is the role that storytelling plays in extracting real value from data.

The reality is that data by itself is insufficient to really influence human behavior. Whether the goal is to improve a business’ bottom line or convince people to stay home amid a pandemic, it’s the narrative that compels action, not the numbers alone.

As more data is collected and analyzed, communication and storytelling will become even more integral in the data science discipline because of their role in separating the signal from the noise.

Business continuity planning is a necessity for your fund and portfolio

Close-Up Of Dominoes On Table

Image Credits: Raquel Segato/EyeEm (opens in a new window) / Getty Images

We all need to be taking precautionary measures, not just in light of COVID, but to ensure our firms can continue to thrive when faced with unexpected tragedy.

So ask yourself this question: “What would happen if I or my partner(s) checked into the hospital tomorrow and had no phone and/or was too sick to call anyone, and that went on for two or three weeks (or longer)?”

If the answer is “I’m really not sure,” then you don’t have a business continuity plan.

Outdoor startups see supercharged growth during COVID-19 era

Two couples sitting by a campfire

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After years of sustained growth, the pandemic supercharged the outdoor recreation industry. Startups that provide services like camper vans, private campsites and trail-finding apps became relevant to millions of new users when COVID-19 shut down indoor recreation, building on an existing boom in outdoor recreation.

Startups like Outdoorsy, AllTrails, Cabana, Hipcamp, Kibbo and Lowergear Outdoors have seen significant growth, but to keep it going, consumers who discovered a fondness for the great outdoors during the pandemic must turn it into a lifelong interest.

Once VMware is free from Dell, who might fancy buying it?

Barcelona, Spain - October 13, 2014: View of the exhibition center. News & Training at VMworld exhibition of VMWARE in Barcelona, Spain.

Image Credits: MaboHH / Getty Images

Dell last week agreed to spin out VMware in exchange for a huge one-time dividend, a five-year commercial partnership agreement, lots of stock for existing Dell shareholders and Michael Dell retaining his role as chairman of its board.

So, where does the deal leave VMware in terms of independence, and in terms of Dell influence?

Time-strapped IT teams can use low-code software to drive quick growth

Image of a white cube with smaller red cubes being outsourced.

Image Credits: Westend61 (opens in a new window) / Getty Images

Many emerging and mature organizations survive or die based on their ability to scale. Scale quicker. Scale cheaper. Scale right.

Typically the IT team bears that burden — on top of countless other demands. IT teams move mountains for their organizations while scaling the tech platform as fast as possible, putting out the latest infrastructure fire and responding to countless day-to-day requests.

The most helpful gift any chief information officer or chief technology officer can give their IT teams is more time. Many people think that means adding another team member. But it could be as simple as introducing a low-code integration platform.

European VC soars in Q1

A stunning first quarter in venture capital funding was not restricted to the United States; Europe also had one hell of a start to the year.

The venture capital world kicked off its 2021 European investing cycle with enough activity to set the continent on the path that would crush yearly records.

Inside the data, there’s lots to unpack, including which sectors of European startups stood out in terms of capital raised, rising seed and late-stage deals, and dollar volume. We’ll also need to discuss exits — the Deliveroo IPO and its various woes was not the only transaction from the period worth understanding.

We’ll keep in mind that all venture capital data lags reality somewhat, as many deals from a particular period are not disclosed or discovered until long after they actually occurred.

In this case, it makes the numbers all the more impressive.

UiPath raises IPO range, still targets lower valuation than final private round

Robot paper holding pen, space for text

Image Credits: Zastrozhnov (opens in a new window) / Getty Images

Robotic process automation unicorn UiPath went public this week, concentrating our focus on its value.

UiPath raised its last private round when the markets were most interested in public offerings and is now going public in a slightly altered climate.

In numerical terms, UiPath raised its IPO range from $43 to $50 per share to $52 to $54 per share. That’s a 21% jump in the value of the lower end of its range and an 8% gain to the value of the upper end of its per-share IPO price interval.

UiPath is also selling more shares than before, which should make its total valuation slightly larger at the top end than a mere 8% gain. So let’s go through the math one more time.

Insurtech startups are leveraging rapid growth to raise big money

The investment landscape for insurtech startups is off to a hot start in Q2 2021. Since the end of the first quarter, we’ve seen several players in the broad startup category announce new capital.

But, as anyone who’s familiar with startups that offer insurance-related products and services knows, the sector is enough of a mixed bag that one needs to segment down to get clarity on how constituent companies are performing.

Let’s discuss insurtech’s 2020 as a whole, peek at some preliminary 2021 venture data and then dive deep into what we’ve collected regarding growth among insurtech marketplace players.

Covering longitudinal progress of specific startup categories is one of our favorite things to do. So, please, walk with us!

Deep Science: Introspective, detail-oriented and disaster-chasing AIs

Image Credits: Kehan Chen / Getty Images

Research papers come out far too frequently for anyone to read them all. That’s especially true in the field of machine learning, which now affects (and produces papers in) practically every industry and company.

This column aims to collect some of the most relevant recent discoveries and papers — particularly in, but not limited to, artificial intelligence — and explain why they matter.

This week, we dove into “introspective failure prediction,” using ML to identify dangerous moles, and spotting cows from space.

Who’s funding privacy tech?

3d rendering of question mark made up of dollar banknotes on blue background. Banking and finance. Business success. Management and production.

Image Credits: Gearstd (opens in a new window) / Getty Images

With strict privacy laws such as GDPR and CCPA already listing big-ticket penalties — and a growing number of countries following suit — businesses have little option but to comply.

It’s not just bigger, established businesses offering privacy and compliance tech; brand-new startups are filling in the gaps in this emerging and growing space.

Privacy isn’t dead, as many would have you believe. New regulations, stricter cross-border data transfer rules and increasing calls for data sovereignty have helped the privacy startup space grow thanks to an uptick in investor support.

This is how we got here, and where investors are spending.

A cooling trend in public markets makes UiPath’s down-round IPO a win for the company

UiPath is not worth $36 billion, as we might have expected, but at a figure below $30 billion.

At $29.1 billion, UiPath has a roughly 35x run-rate multiple. That just about ties it for eighth-best overall. Among all public cloud companies. That means that UiPath is insanely valuable, just not that insanely valuable.

So what went wrong with the company’s final private round? The Exchange’s hunch is that UiPath’s final private investors expected the market to stay as hot as it once was, but it has cooled since the first two months of the year. So, instead of UiPath coming to the market in the expected climate, the company instead had to price where it did because the weather predicted by its final private price had already chilled.

Those investors gambled, in other words, hoping that a last-minute, pre-IPO round could snag them a rapid return on a company going public in a hot market. That didn’t work out.

And how bad is that? Not very! UiPath’s IPO is more a meeting of private-market exuberance and modestly more conservative public markets. It’s nothing to cry about.

4 ways martech will shift in 2021

Smiling young Asian woman using smartphone on social media network application while having meal in the restaurant, viewing or giving likes, love, comment, friends and pages. Social media addiction concept

Image Credits: d3sign (opens in a new window) / Getty Images

The second half of 2021 will bring incredible growth, the likes of which we haven’t seen in a long time.

Here’s how marketing in tech will shift — and what you need to know to reach more customers and accelerate growth this year.

First and foremost, differentiation is going to be imperative. It’s already hard enough to stand out and get noticed, and it’s about to get much more difficult as new companies emerge and investments and budgets balloon in the latter half of the year.

Additionally, tech companies need to be mindful not to ignore the most important part of the ecosystem: people. Technology will only take you so far, and it’s not going to be enough to survive the competition.

Tactically, the most successful tech companies will embrace video and experimentation in their marketing — two components that will catapult them ahead of the competition.

Ignoring these predictions, backed by empirical evidence, will be detrimental and devastating. Fasten your seatbelts: 2021 is going to be a turbocharged year of growth opportunities for marketing in tech.

Dear Sophie: How can I get my startup off the ground and visit the US?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I’m a female entrepreneur who created my first startup a few months ago.

Once my startup gets off the ground — and as COVID-19 gets under control — I’d like to visit the United States to test the market and meet with investors. Which visas would allow me to do that?

—Noteworthy in Nairobi

As UiPath closes above its final private valuation, CFO Ashim Gupta discusses his company’s path to market

Despite a somewhat circuitous route, UiPath closed its first day as a public company worth more than it was in its Series F round — when it sold 12,043,202 shares at $62.27576 apiece, per SEC filings. More simply, UiPath closed on Wednesday worth more per-share than it was in February.

How you might value the company, whether you prefer a simple or fully diluted share count, is somewhat immaterial at this juncture. UiPath had a good day.

TechCrunch spoke with UiPath CFO Ashim Gupta, curious about the company’s choice of a traditional IPO, its general avoidance of adjusted metrics in its SEC filings and the IPO market’s current temperature.

How are VCs handling diligence in a world where deals open and close in days, not months?

The global venture capital market had a cracking start to the year. Coming off a 2020 high, VC totals in the United States, in Europe, and among competitive verticals like insurtech and AI are on pace to set new records in 2021.

The rapid-fire deal-making and trend of larger venture checks at higher valuations that The Exchange has tracked for some time require private-market investors to make decisions faster than ever. For venture capitalists, the timeline for reaching conviction around a startup’s thesis and executing due diligence has become compressed.

Some venture capitalists are turning to data to move more quickly. Some are spending more time preparing to be vetted themselves. And some investors are simply doing the work beforehand.

We were tipped off to the concept of pre-diligence during the reporting process for a look into recent fundraising trends in the AI/ML space. Sapphire investor Jai Das, when asked about how he was handling a competitive and swiftly moving market for AI startup investments, said that “most firms are completing their due diligence way before the financing actually happens.”

How does that work in practice?

Customer care as a service: Outsourcing can help your startup wow clients 24/7

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Image Credits: MartinvBarraud (opens in a new window) / Getty Images

Your clients might not demand 24/7 customer service yet, but they’re certainly hoping for it.

But how can a startup with a lean staff provide round-the-clock customer care? There are several options available, but more than ever, outsourcing is one of them.

When should your startup consider outsourcing its customer care? And what should you look for in a provider?

Here are some insights on what customer care as a service (CCaaS) can do for you, and how fast-growing startups have been leveraging this new class of partners to boost customer satisfaction.

5 emerging use cases for productivity infrastructure in 2021

Image Credits: Erik Isakson / Getty Images

Productivity infrastructure is on the rise and will continue to be front and center as companies evaluate what their future of work entails and how to maintain productivity, rapid software development and innovation with distributed teams.

Understanding the benefits, use cases and steps to consider can propel organizations into the next phase of digital transformation.

To sell or not to sell: Lessons from a bootstrapped CEO

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Image Credits: Klaus Vedfelt (opens in a new window) / Getty Images

The clock begins ticking on a startup the day the doors open. Regardless of a young company’s struggles or success, sooner or later the question of when, how or whether to sell the enterprise presents itself. It’s possibly the biggest question an entrepreneur will face.

For founders who self-funded (bootstrapped) their startup, a boardroom full of additional factors comes into play. Some are the same as for investor-funded firms, but many are unique.

After 18 years of bootstrapping a BI software firm into a business that now serves 28,000 companies and 3 million users in 75 countries, here’s what I’ve learned about myself, my company, about entrepreneurship and about when to grab for that brass ring.

Put happiness at the center of the decision, and let your intuition — the instincts that made you the person you are today — be your guide.



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