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Penta, the digital SME banking upstart, appoints co-founder of solarisBank as new CEO

Hon on the heels of being acquired by company builder Finleap, German SME banking upstart Penta has appointed a new CEO.

Marko Wenthin, who previously co-founded solarisBank (the banking-as-a-service used by Penta), is now heading up the company, having replaced outgoing CEO and Penta co-founder Lav Odorović.

I understand Odorović left Penta last month after it was mutually agreed with new owner Finleap that a CEO with more experience scaling should be brought in. The Penta co-founder remains a shareholder in the SME banking fintech and is thought to be eyeing up his next venture.

Wenthin, who remains on the board of solarisBank according to LinkedIn, stepped down from the banking-as-a-service’s executive team in late 2018 citing “health reasons” and saying that he needed to focus on his recovery. It’s not known what those health issues were, although, regardless, it’s good to see that he’s well-enough to take up a new role as Penta CEO.

Asked to comment on Odorović’s departure, Penta issued the following statement:

“Lav is still part of the shareholders at Penta. His step back from the operational management team was a decision taken by mutual agreement. Lav was the right fit during the building phase of Penta, but by entering a new step of growth, the company faces bigger challenges and needs therefore to position itself differently”.

Penta says that in his new leadership role, Wenthin, who previously spent 16 years at Deutsche Bank, will lead international expansion — next stop Italy — and begin to market the fintech to larger SMEs in addition to its original focus on early-stage startups and other small digital companies. “In the future, the focus will be also on traditional medium-sized companies,” says Penta.

Adds Wenthin in a statement: “I am very much looking forward to my new role at Penta. On the one hand, digital banking for small and medium-sized companies is very important to me, as they are the driver of the economy and I have spent most of my career in this segment. On the other hand, I have known Penta and the team for a long time as successful partners of solarisBank. Penta is the best example of how a very focused banking provider can create real, digital added value for an entire customer segment in cooperation with a banking-as-a-service platform”.

Meanwhile, TechCrunch understands that Odorović’s departure and the appointment of Wenthin isn’t the only recent personnel change within Penta’s leadership team. According to LinkedIn, Aleksandar Orlic, who held the position of CTO, departed the company last month. “We are searching for a new CTO,” said a Penta spokesperson.

Alongside Wenthin, that leaves Penta’s current management team as Jessica Holzbach (Chief Customer Officer), Luka Ivicevic (Chief of Staff), Lukas Zörner (Chief Product Officer (CPO) and Matteo Concas (Chief Marketing Officer).

The Wing poaches Snap’s comms director

Women-focused co-working space The Wing has hired Rachel Racusen as vice president of communications. Racusen has been the director of communications at Snap, the developer of Snapchat, since late 2016.

Racusen’s exit represents the latest in a series of departures at the “camera company.”

Earlier this year, the company’s chief financial officer Tim Stone stepped down. Shortly after, The Wall Street Journal reported that Snap had fired its global security head Francis Racioppi after an investigation uncovered that he had engaged in an inappropriate relationship with an outside contractor. Snap CEO Evan Spiegel reportedly asked the company’s HR chief Jason Halbert to step down as a result of the investigation’s findings.

Racusen worked under Snap’s chief communications officer Julie Henderson, who had joined late last year from 21st Century Fox.

Racusen has a history in politics similar to several other executives at The Wing. Ahead of her Snap tenure, she served as the associate communications director under President Barack Obama . Before that, she was a vice president at MSNBC and the public affairs firm SKDKnickerbocker, where The Wing co-founder and chief executive officer Audrey Gelman worked prior to launching her business.

Four months after closing a $75 million Series C, The Wing is making two other key additions to its management team. The company has brought on Nickey Skarstad as vice president of product and Saumya Manohar as general counsel. Skarstad joins from Airbnb, where she was a product lead on the Airbnb Experiences team. Saumya Manohar spent the last three years as Casper’s vice president of legal.

Backed by Sequoia Capital, Upfront Ventures, NEA, Airbnb, WeWork and others, The Wing has raised more than $100 million to date.

“We’re thrilled to be bringing this group of seasoned and talented women to build out our executive team,” Gelman said in a statement. “The Wing is the perfect home for leaders who thrive on fast growth and want to combine their social values with their work practice.”

Online catering marketplace ezCater gets another $150M at a $1.25B valuation

In 2007, Stefania Mallett and Briscoe Rodgers conceived of ezCater, an online marketplace for business catering, and began building the company in Mallet’s Boston home, mostly at her kitchen table.

Recently, sitting at that same table, Mallett negotiated with Brad Twohig of Lightspeed Venture Partners the final terms of a $150 million Series D-1 at a $1.25 billion valuation. Lightspeed, alongside GIC, co-led the round, with participation from Light Street Capital, Wellington Management, ICONIQ Capital and Quadrille Capital.

“Raising money or getting to unicorn status, it’s all nice validation but that’s not the purpose, the purpose of being in business is to grow a very successful company with happy customers and happy employees,” Mallett, ezCater’s chief executive officer, told TechCrunch. “We are going to have cupcakes with unicorns on them. That will take us about a half hour, then we will get back to work.”

EzCater co-founder and CEO Stefania Mallett

Mallett compares ezCater to Expedia . The travel company doesn’t own and operate hotels, nor do they create them. EzCater, similarly, works with 60,500 restaurants and caterers around the U.S. to fulfill orders, but at no point do they work directly with food nor make any deliveries themselves.

Since its inception, the ezCater marketplace has grown considerably, expanding 100 percent annually for the last eight years, Mallett tells us. Though, like most unicorns, ezCater isn’t profitable yet.

Both Mallett and Rodgers are software industry veterans, establishing engineering careers prior to tackling business catering. The pair bootstrapped the company until 2011, when they secured a small Series A investment of $2.7 million. That same year, U.S. foodtech startups raised $176 million, per PitchBook. EzCater would go on to raise more than $300 million in equity funding, including its latest round, and VC interest in foodtech would explode. Already this year, U.S. foodtech startups have brought in $626 million after pulling in a whopping $5 billion in 2018.

EzCater has benefited from this boom. The company raised a $100 million Series D just 10 months ago.

“We really didn’t need the money, we have quite a lot of money in the bank from the last round,” Mallett said. “There was so much talk of a funding winter and a recession coming so we said maybe we should try to raise money and then people jumped on it so we thought OK, why not? If there is a funding winter, we’re set; if not, well, we are still set.”

The investment comes hot off the heels of ezCater’s acquisition of Monkey Group, a cloud platform for take-out, delivery and catering. Mallett declined to disclose terms of the deal but said the partnership makes ezCater the indisputable market leader in catering management software. The company will use its recently expanded war chest to accelerate its international expansion and, potentially, continue its M&A streak. As for the future, an initial public offering is amongst the possibilities.

“We certainly are considering it,” Mallett said. “As we’ve grown, we’ve become more sophisticated and mature; that puts us in a good position to continue operating as a successful standalone company or be acquired by a public company or go public if we see an opportunity to do that. We are not wedded to any of these outcomes.”

Toast, the restaurant management platform, has raised $250M at a $2.7B valuation

Restaurant sales hit $825 billion last year in the U.S., but with margins averaging at only three to five percent per business, they’re always looking for an edge on efficiency and just generally running things in a smarter way. A startup called Toast, which has built a popular platform for restaurant management, has closed a hefty round of funding to double down on that opportunity to do that.

The company has raised $250 million on a valuation of $2.7 billion, money that it will use to invest in building technology to help restaurants with marketing, recruitment and operational efficiency, as well as start to think about expanding to more territories outside the U.S.

The basics of the funding were flagged earlier today by Prime Unicorn Index and we reached out to the company to confirm. It is being led by TCV and Tiger Global Management, with participation from Bessemer Venture Partners and T. Rowe Price Associates funds and other existing investors.

This Series E is a big bump up for the company: in its previous round in July 2018, the company was valued at $1.4 billion — partly the result of strong growth at the company. While it’s not disclosing revenue numbers or whether it is yet profitable, Toast currently serves tens of thousands of businesses — covering a range of sizes from independent venues to smaller chains — and in the last year tallied up transactions in the tens of billions of dollars, seeing growth of some 148 percent in its revenues, according to CFO Tim Barash.

The restaurant business represents a big opportunity for e-commerce companies, but there have been some notable stumbles where ambitions have not been met with success. Groupon, which spent several years acquiring and organically building a point of sale and restaurant management business, first drastically cut down and then finally called it quits and sold off its efforts, called Breadcrumb, in 2016. Amazon also pulled out of point of sale services (aimed at more than restaurants) and has in certain regions also pulled back on other restaurant efforts like its order management and delivery platform.

Barash said in an interview that he thinks the key to why Toast has steadily grown its business through all that is because a large proportion of its own employees — some 70 percent — have worked in the food service industry themselves.

“I was first a busboy, and then I worked in pizza delivery for years,” he said. “Seventy percent of our employees have worked at restaurants, including those in our product leadership, and that helps us understand the problem.”

Restaurants, as Barash points out, are complicated. “They are essentially manufacturers and retailers at the same time, all in one small physical footprint,” and so the key to building products for them is to understand that and the challenges they face in building and running those businesses.

And that’s before you consider the many other factors that can make restaurants a dicey game, from changing cuisine tastes, to changing eating habits — many get food delivered today — to the precariousness of the commercial real estate market and so much more.

The aim of Toast is to build tools to apply data science and orderly IT processes to address whichever of those variables that can be controlled by the restaurant.

Today, Toast’s products include point of sale services as well as reporting and analytics; display systems for kitchens; online ordering and delivery interfaces; and loyalty programs. It also builds its own hardware, which includes handheld order pads, payment and ordering terminals, self-service kiosks and displays for guests. It also offers links through to a network of some 100 partners, such as Grubhub for takeout food, when a restaurant does not cover those services or functions directly, to help stitch together services to work on its platform.

Tomorrow, the plan is to use the funding to enhance all of those with more advanced features that speak to some of the bigger issues and concerns Barash said its customers are voicing today.

That will include better and more services aimed at guest engagement and retention; better ways to recruit and keep people in an industry that has a high turnover of employees; and of course more tools to address how efficiently a business is operating to make it more profitable. The company has committed some $1 billion in the next five years to R&D to build more hardware and software.

Having access to this kind of tech and platform is a big deal, especially for independently owned places that hope to compete against bigger chains without having to compromise on their core competency: making unique and delicious food.

In the meantime, Barash said that while Toast itself is no stranger to approaches from larger players itself — he declined to say who but said many who have ambitions to do more business with the restaurant industry had approached it over the years — the company’s long-term vision is to grow bigger and remain its own boss.

It’s an ambition that has hit the spot with investors that have an appetite for high-growth businesses.

“At TCV, we invest in companies that have the potential to reshape entire industries. By providing restaurants of all sizes with access to innovative technology, Toast is leveling the playing field and leading the industry’s transition to the cloud,” said David Yuan, general partner at TCV, in a statement, who is joining the board with this round. “Our investment will enable Toast to extend their platform beyond point-of-sale and guest-facing technology, and in doing so, create a powerful SaaS platform with a superlative business model. We’re excited to partner with Toast as they accelerate the growth of the community they serve.”

Alibaba acquires Israeli VR startup Infinity Augmented Reality

Infinity Augmented Reality, an Israeli virtual reality startup, has been acquired by Alibaba, the companies announced this weekend. The deal’s terms were not disclosed. Alibaba and InfinityAR have had a strategic partnership since 2016, when Alibaba Group led InfinityAR’s Series C. Since then, the two have collaborated on augmented reality, computer vision and artificial intelligence projects.

Founded in 2013, the startup’s augmented glasses platform enables developers in a wide range of industries (retail, gaming, medical, etc.) to integrate AR into their apps. InfinityAR’s products include software for ODMs and OEMs and a SDK plug-in for 3D engines.

Alibaba’s foray into virtual reality started three years ago, when it invested in Magic Leap and then announced a new research lab in China to develop ways of incorporating virtual reality into its e-commerce platform.

InfinityAR’s research and development team will begin working out of Alibaba’s Israel Machine Laboratory, part of Alibaba DAMO Academy, the R&D initiative it is pouring $15 billion into with the goal of eventually serving two billion customers and creating 100 million jobs by 2036. DAMO Academy collaborates with universities around the world and Alibaba’s Israel Machine Laboratory has a partnership with Tel Aviv University focused on video analysis and machine learning.

In a press statement, the laboratory’s head, Lihi Zelnik-Manor, said “Alibaba is delighted to be working with InfinityAR as one team after three years of partnership. The talented team brings unique knowhow in sensor fusion, computer vision and navigation technologies. We look forward to exploring these leading technologies and offering additional benefits to customers, partners and developers.”

Decade in review: Trends in seed- and early-stage funding

We’ve decided to step back from the breaking news for a minute to conduct a review of seed and early-stage funding trends over the last decade for U.S.-based companies.

I’m fairly certain we can all agree that the environment for startups has changed dramatically in the past 10 years, specifically in two major ways:

  1. The development of seed funding as its own class and;
  2. The expansion of growth stage investing.

What we’ve also seen are recent concerns raised about the decline in seed stage funding by Mark Suster, a partner at UpFront Ventures, as there has not been commensurate growth in early stage funding (Series A and B), to meet this growth in seed-financed companies. This is often expressed as the Series A crunch.

So with venture funding at an all-time high, along with increased growth in supergiant rounds, now seems like an appropriate time to conduct this kind of review.

Setting the stage

First, let’s set the stage for our analysis and explain where our data comes from with a few quick facts:

  • Rounds below $1 million can be the most difficult to capture adequately as many angel and pre-seed deals are not reported.
  • Luckily, Crunchbase has an “active founder community” that adds early stage financings.
  • By “active founder community” we are referring to many founders who are active on Crunchbase adding their company, themselves as founders, and their fundings.
  • Around 47 percent of fundings below $5 million in the U.S. are added by contributors, as distinct from our analyst teams who process the news, track Twitter, and work directly with our venture partners.
  • For this study, we bucket U.S. funding rounds by size to indicate stage.
  • Given the high percentage of self-reported seed financing, data added after the end of a quarter needs to be factored in.
  • For this reason we use projected data for many of the Crunchbase quarterly reports in order to more accurately reflect recent funding trends. For the charts below we are using actual data, with some provisions for the data lag when discussing the trends.

Now, let’s take a look at the trends.

Rounds below $1 million are slumping

Since 2014 we have seen mostly double-digit declines in less than $1 million rounds each year – a strong pivot from 2008-2014 when we saw double-digit growth.

In 2018 seed funding counts and amounts below $1 million were down from 2015 at 41 and 35 percent respectively. Given that data at this stage can be added long after the round took place, we assess there could be a 20 percentage-point relative increase in 2018 compared to 2017.

If we factor this in, 2018 seed funding counts and amounts below $1 million are down from 2015 at 30 and 23 percent respectively. In other words, seed below $1 million are closer to 2012 and 2017 levels.

$1 million to $5 million rounds are flattening

Round from $1 million to $5 million also experienced growth from 2008 through 2015, more than threefold for counts and close to threefold for amounts. Upward growth stalled from 2015. However, we do not see a substantial downward trend in the last three years. Dollars invested are stable at $7.5 billion from 2015 through 2017. Counts and amounts are down in 2018 from the 2015 height by 12 percent for deal count and 6 percent for amounts.

At Crunchbase we are always cautious about reporting downward trends for the most recent year or quarter, as data does flow in after the close of the most recent time period. If the trend is over a greater time period, that is a stronger signal for change in the market. Based on data continuing to be added after the end of a year for the previous year, we assess around 10 percentage point increase relative to 2017. This would make 2018 roughly equivalent  to 2017 on rounds and slightly up on amounts.

Seed funds take bigger stakes

Why is seed flattening? Seed investors report putting more dollars into fewer deals. Or as they raise more substantial subsequent funds, they are putting more dollars into the same number of transactions. Seed funds need to get enough equity for a meaningful stake, should a startup survive to raise subsequent rounds. Seed funds are investing in fewer startups for more equity.

Larger venture funds taking a less active role in seed

UpFront Ventures’ Suster (referenced earlier) also talks about larger venture firms becoming less active in seed, as investing at the seed stage can limit their ability down the road to invest in competitive startups who emerge as growing contenders in a specific sector. The growth of more substantial funds in venture allows firms to see deals mature before investing, perhaps paying more to get the equity they want, and allowing startups not growing as quickly to fail or get acquired.

As Fred Wilson from Union Square Ventures notes, “In the first five years of this decade, we saw the seed portion of the market explode. In the last five years of this decade we saw the growth portion of the market explode. But over those last ten years, the middle part, the traditional venture capital market, has not changed much.”

The middle is growing

For the middle, Series A and B rounds (which used to be the first institutional money in), the market for $5 million to $10 million rounds has almost doubled, but it has taken from 2008 to 2018. In that same period, growth has been slower than round below $5 million. Growth has continued past 2015. Since 2015, rounds are down slightly for one year, and then continue to grow in 2017 and 2018. Counts are up from 2015 by 17 percent and dollars by 18 percent.

$10 to $25 million rounds are growing

Rounds of $10 million to $25 million have grown over 11 years by 73 percentage points for counts, and 78 percentage points for amounts. This is a slower pace than $5 million to $10 million rounds, but continuing to edge up year over year.

Seed is maturing

Seed is its own class that is here to stay. Indeed pre-seed, seed and seed extension all seem to have specific dynamics. Of the 600-plus active seed funds who have raised a fund below $100 million, close to half have raised more than one fund. In the last three years in the U.S. we have not seen a slowing of seed funds raised for $100 million and below.

Conclusion

When we take into account the data lag, dollars for below $5 million is projected to be $8.5 billion, close to the height in 2015 of $8.6 billion. Deal counts are down from the height by a fifth, which does mean less seed-funded startups in the U.S. Provided that capital allocation is greater than $5 million continues to grow, less seed funded startups will die before raising a Series A. More companies have a chance to succeed, which is good for seed funds, and ultimately for the whole ecosystem.

Which types of startups are most often profitable?

Julian Shapiro
Contributor

Julian Shapiro is the founder of BellCurve.com, a growth marketing agency that trains you to become a marketing professional. He also writes at Julian.com.
More posts by this contributor

I co-run an agency that teaches a hundred startups per year how to do growth marketing. This gives me a unique vantage point: I know which types of startups most often reach profitability.

That’s an important metric, because startups that don’t reach this milestone typically fail to raise additional funding — then die.

Here’s what we’ll learn:

  1. Companies are increasingly living and dying by ads. Because it’s the startup’s approach to customer acquisition — not its business model or market — that most determines its early-stage profitability.
  2. E-commerce companies lend themselves best to ads, and SMB SaaS the worst. Meanwhile, most startup founders in 2019 are starting SaaS companies. They’d benefit from the data we share in this post.
  3. In fact, our agency has found that every other type of business reaches profitability quicker than SMB SaaS, including mobile apps, Chrome extensions and enterprise SaaS.

Our sampling of startups isn’t as biased as startup valuation leaderboards, because we also see those that failed. That’s the key.

You can use our experience to de-risk your startup. That’s what this post explores: How to change your product roadmap to pursue a path more likely to reach profitability.

The startups that frequently reach profitability

Here’s the data my agency is referencing for this post:

  • We train 12+ venture-backed and bootstrapped startups every month. Half are Y Combinator graduates. This is how we study early-stage product-market fit trends.
  • We run ads full-time for between 20 and 30 mature companies per year. On average, each spends $2.5 million annually on paid acquisition. And, on average, each has 30 employees. Our clients include Tovala.com, PerfectKeto.com, SPYSCAPE.com, ImperfectProduce.com, Clearbit.com and Woodpath.com.
  • Our students and clients are roughly evenly distributed across D2C e-commerce, B2B, mobile apps and marketplaces.

When we try to control for founder skill and funds raised, the types of startups that first reach profitability do so in this order:

  1. E-commerce
  2. Chrome extensions
  3. Mobile apps
  4. Enterprise SaaS
  5. Small-to-medium business SaaS

On average, an e-commerce company is more likely to first reach profitability than an SMB SaaS company.

Before I explain why, let me explain how we’re differentiating startups: I use the word “type” instead of “business model” or “markets” because I’ve learned that business model and market are often not the best predictors of success. Instead, it’s your approach to customer acquisition. That’s what typically determines the likelihood of profitability.

Car rental startup Virtuo picks up €20M Series B

Virtuo, the Paris-headquartered car rentals startup, has raised €20 million in Series B funding. The round is backed by Iris Capital, Balderton Capital and Raise Ventures, and will be used to continue expanding across the U.K. and other European countries.

Originally founded in France and available in 19 French and 2 Belgium locations, Virtuo launched in London last Summer, and says it plans to bring the service to U.K. cities Manchester, Bristol and Edinburgh later this year.

The company will also expand to Spain and Germany in 2019, creating what Virtuo claims will be a “truly pan-European rental option,” for drivers who are seeking an alternative to the big five incumbent car rental companies.

Designed to bring car rentals into the mobile age and in turn improve the user experience, the Virtuo app lets you book and unlock a Mercedes A-Class or GLA “in minutes,” at stations across the various cities the company operates, eradicating long wait times and arduous paperwork often associated with renting a car.

Like a plethora of mobility startups, the idea is to provide more options to a generation of non-car owners and in turn help creative a longer-term alternative to car ownership more generally.

“From the outset, we have been new challengers in an industry that has long-been dominated by 5 key players, whose bricks and mortar approach is deeply ingrained, not just in terms of market coverage, but also consumer rental habits,” Virtuo co-founder Karim Kaddoura tells me.

“We were the first to come into this industry with the fundamental belief that a 100 percent mobile approach is the only way to rebuild and re-think how car rental can be delivered from the ground up… From an operational perspective, by not being tied to bricks and mortar, we are able to launch stations, markets and services at a pace that has not been seen in the industry before”.

Kaddoura says Virtuo is also taking a data-driven and customer centric approach to building out its product, helping the company to innovate and improve every facet of renting a car. This has seen Virtuo garner 500,000 downloads of its app, which is popular with drivers between the age of 25 and 35.

I’m also told the average number of days of each rental is 4, averaging 325 miles per rental. Meanwhile, 80 percent of customers go for the compact A Class, while 20 percent take SUV.

“By continually listening to customer pain-points around booking processes, damage reporting, refuelling, communication and transparency, we can tackle these long-standing issues in new ways with technology as the solution,” he says. “The series B will play a key role in being able to provide greater availability across Europe and our existing markets”.

Adds Bernard Liautaud, managing partner of Balderton Capital: “Technology in cars and other areas of mobility is evolving rapidly, due to concerns over the environment and congestion. Given these shifts, renting a car as and when you need it is becoming a viable alternative to buying, particularly for younger people who have come of age as the sharing economy took off”.

Subscription platform Substack adds podcast support

Substack started out by providing individual writers and publishers with a set of tools enabling them to charge a subscription fee for their newsletters. Now it’s giving them the ability to do the same thing with podcasts.

In fact, Morgan Creek Digital Assets founder Anthony “Pomp” Pompliano is already using the platform to introduce a daily podcast to complement his existing, crypto-focused Off the Chain newsletter.

“We’ve always thought the magic of what Substack is doing is the fact that we’re disintermediating the people creating stuff and the people who are consuming it — you are the brand they’re paying for,” Substack CEO Chris Best told me. “That whole model works incredibly well for newsletters, and to us, there’s no reason why it wouldn’t be a great model for podcast content.”

Substack’s podcasting capabilities will allow publishers to either offer a podcast-specific subscription — or, like Pompliano, to include it as part of a broader package with their newsletter subscription. The podcast itself will be distributed through an audio player that can be embedded in both newsletters and on the web.

A web-based audio player might seem like a clunky way to listen to podcasts, but Substack’s player (which you can try out here) works pretty smoothly and includes features like the ability to jump backward and forward 30 seconds, and to play podcasts at various speeds.

Substack audio

Best added that he’s also open to the idea of creating a private, subscriber-only feed that can be accessed by podcast apps.

“We’re going to put it out there and see what people want,” he said. But he argued that the “existing feed-based podcast system” is “not living up to its potential” when it comes to enabling podcasters to make money from subscriptions.

We spoke shortly after Spotify announced that it was acquiring podcast companies Gimlet and Anchor, which Best said illustrates the importance of a tool like Substack, because it’s focused on “empowering individuals”: “We let people get paid directly by people, rather than aggregated into a wider system.”

I also brought up the patronage model for supporting content creators enabled by Patreon (which is currently how I support one of my favorite podcasts).

“We definitely think the world is big enough for both of those things,” Best replied. While he expressed admiration for the Patreon model, he argued, “There’s also room for another kind of thing, where you say, ‘Hey, I’m doing this professionally, it’s my job, I do a good job with it and you should pay for it.’”

And Best doesn’t intend to stop with newsletters and podcasts. There are plans to support other media formats, although the exact timing will depend on Substack’s customers.

“We are hyper-focused on serving the authors that we’re working with,” he said. “The timing tends to depend on when we find people that want to do it. Why we did the podcast thing now [comes from] Pomp wanting to do it now.”

GBatteries let you charge your car as quickly as visiting the pump

A YC startup called GBatteries has come out of stealth with a bold claim: they can recharge an electric car as quickly as it takes to full up a tank of gas.

Created by aerospace engineer Kostya Khomutov, electrical engineers Alex Tkachenko and Nick Sherstyuk, and CCO Tim Sherstyuk, the company is funded by the likes of Airbus Ventures, Initialized Capital, Plug and Play, and SV Angel.

The system uses AI to optimize the charging systems in electric cars.

“Most companies are focused on developing new chemistries or materials (ex. Enevate, Storedot) to improve charging speed of batteries. Developing new materials is difficult, and scaling up production to the needs of automotive companies requires billions of $,” said Khomutov. “Our technology is a combination of software algorithms (AI) and electronics, that works with off-the-shelf Li-ion batteries that have already been validated, tested, and produced by battery manufacturers. Nothing else needs to change.”

The team makes some bold claims. The product allows users to charge a 60kWh EV battery pack with 119 miles of range in 15 minutes as compared to 15 miles in 15 minutes today. “The technology works with off-the-shelf lithium ion batteries and existing fast charge infrastructure by integrating via a patented self-contained adapter on a car charge port,” writes the team. They demonstrated their product at CES this year.

Most charging systems depend on fairly primitive systems for topping up batteries. Various factors – including temperature – can slow down or stop a charge. GBatteries manages this by setting a very specific charging model that “slows down” and “speeds up” the charge as necessary. This allows the charge to go much faster under the right conditions.

The company bloomed out of frustration.

“We’ve always tinkered with stuff together since before I was even a teenager, and over time had created a burgeoning hardware lab in our basement,” said Sherstyuk. “While I was studying Chemistry at Carleton University in Ottawa, we’d often debate and discuss why batteries in our phones got so bad so rapidly – you’d buy a phone, and a year later it would almost be unusable because the battery degraded so badly.”

“This sparked us to see if we can solve the problem by somehow extending the cycle life of batteries and achieve better performance, so that we’d have something that lasts. We spent a few weeks in our basement lab wiring together a simple control system along with an algorithm to charge a few battery cells, and after 6 months of testing and iterations we started seeing a noticeable difference between batteries charged conventionally, and ones using our algorithm. A year and a half later of constant iterations and development, we applied and were accepted in 2014 into YC.”

While it’s not clear when this technology will hit commercial vehicles, it could be the breakthrough we all need to start replacing our gas cars with something a little more environmentally-friendly.

Fintech investors and founders to judge Startup Battlefield Africa

TechCrunch will soon be returning to Africa to hold its Startup Battlefield competition dedicated to the African continent.

The event, in Lagos, Nigeria, on December 11, will showcase the launch of 15 of the hottest startups in Africa onstage for the first time. We’ll also be joined by some of the leading investment firms in the region. The event is now sold out, but keep your eyes on TechCrunch for video of all the panels and the Battlefield competition.

Here are just some of the investors and founders who will be judging the startups competing for US$25,000.


Olugbenga Agboola, Flutterwave

Olugbenga Agboola is the CEO of Flutterwave, a payments technology company headquartered in San Francisco with operations and offices across Africa and Europe. Prior to co-founding Flutterwave, Olugbenga contributed to the development of fintech solutions at several tech companies and financial institutions such as PayPal and Standard Bank, among others. He is a serial entrepreneur with two successful exits under his belt. He is a software engineer with a Master’s Degree in Information Technology Security and Behavioral Engineering, as well as an MBA.

Barbara Iyayi, Element

Barbara Iyayi is the chief growth officer and managing director of Africa for Element, which deploys AI-powered mobile biometrics software to develop digital platforms globally. Barbara was part of the founding team of Atlas Mara, a London stock exchange-listed company, co-founded by Bob Diamond, ex-CEO of Barclays Bank, which was the first-ever entity to raise more than $1 billion to invest in, operate and manage financial institutions in Sub-Saharan Africa. As the Regional Lead for M&A and Investments, she led investments into banks and developed the banking platform’s entry into seven countries in Africa. Notably, she led the acquisition and first-ever merger of two banks in Rwanda, to be the leading innovative retail bank — Banque Populaire du Rwanda — and led a $250 million equity investment in Union Bank of Nigeria.

Aaron Fu, MEST Africa

Aaron is an early-stage investor, entrepreneur and strategic advisor to both startups as they scale and corporates as they transform to gain agility for disruptive innovation. Over the last five years he has specifically focused on innovation in Africa, working with global brands and entrepreneurs across diverse industries, from financial services to health to mobile to agriculture.

As managing director at MEST, he is dedicated to training, investing in and incubating the next generation of global software entrepreneurs in Africa. He manages a portfolio of 30-plus startups spanning fintech, media, e-commerce and agritech. 

Sam Gichuru, Nailab

Sam Gichuru is founder and CEO of Nailab, one of Kenya’ s leading business incubators. His contribution in establishing the startup business ecosystem in Kenya, through Nailab, has been significant, and as a result was invited as a key speaker during the 2015 Global Entrepreneurship Summit, held in Nairobi and officiated by then U.S. President Barack Obama.

Sam has been instrumental in propagating the development of a strong and vibrant entrepreneurship ecosystem, and it’s through this engagement that he was most recently selected by Jack Ma to lead, through Nailab, the Africa Netpreneur Prize Initiative, a $10 million Initiative that seeks to discover, spotlight and support 10 African entrepreneurs every year for the next 10 years.

Olufunbi Falayi, Savannah Fund


Olufunbi Falayi  is a partner at Passion Incubator, an early-stage technology incubator and accelerator that invests in early-stage startups. He co-led investment in 12 startups, including Riby, BeatDrone, AdsDirect, TradeBuza and Waracake. Olufunbi also a principal at Savannah Fund, driving investment in West Africa.

Growing pains at venture-backed Moogsoft lead to layoffs

Eight months after bringing in a $40 million Series D, Moogsoft‘s co-founder and chief executive officer Phil Tee confirmed to TechCrunch that the IT incident management startup had shed 18 percent of its workforce, or just over 30 employees.

The layoffs took place at the end of October; shortly after, Moogsoft announced two executive hires. Among the additions was Amer Deeba, who recently resigned from Qualys after the U.S. Securities and Exchange Commission charged him with insider trading.

Founded in 2012, San Francisco-based Moogsoft provides artificial intelligence for IT operations (AIOps) to help teams work more efficiently and avoid outages. The startup has raised $90 million in equity funding to date, garnering a $220 million valuation with its latest round, according to PitchBook. It’s backed by Goldman Sachs, Wing Venture Capital, Redpoint Ventures, Dell’s corporate venture capital arm, Singtel Innov8, Northgate Capital and others. Wing VC founder and long-time Accel managing partner Peter Wagner and Redpoint partner John Walecka are among the investors currently sitting on Moogsoft’s board of directors.

Tee, the founder of two public companies (Micromuse and Riversoft) admitted the layoffs affected several teams across the company. The cuts, however, are not a sign of a struggling business, he said, but rather a right of passage for a startup seeking venture scale.

“We are a classic VC-backed startup that has sort of grown up,” Tee told TechCrunch earlier today. “In pretty much every successful company, there is a point in time where there’s an adjustment in strategy … Unfortunately, when you do that, it becomes a question of do we have the right people?”

Moogsoft doubled revenue last year and added 50 Fortune 200 companies as customers, according to a statement announcing its latest capital infusion. Tee said he’s “extremely chipper” about the road ahead and the company’s recent C-suite hires.

Moogsoft’s newest hires, CFO Raman Kapur (left) and COO Amer Deeba (right).

Moogsoft announced its latest executive hires on November 2, only one week after completing the round of layoffs, a common strategy for companies looking to cast a shadow on less-than-stellar news, like major staff cuts. Those hires include former Splunk vice president of finance Raman Kapur as Moogsoft’s first-ever chief financial officer and Amer Deeba, a long-time Qualys executive, as its chief operating officer.

Deeba spent the last 17 years at Qualys, a publicly traded provider of cloud-based security and compliance solutions. In August, he resigned amid allegations of insider trading. The SEC announced its charges against Deeba on August 30, claiming he had notified his two brothers of Qualys’ missed revenue targets before the company publicly announced its financial results in the spring of 2015.

“Deeba informed his two brothers about the miss and contacted his brothers’ brokerage firm to coordinate the sale of all of his brothers’ Qualys stock,” the SEC wrote in a statement. “When Qualys publicly announced its financial results, it reported that it had missed its previously-announced first-quarter revenue guidance and that it was revising its full-year 2015 revenue guidance downward. On the same day, Deeba sent a message to one of his brothers saying, ‘We announced the bad news today.’ The next day, Qualys’s stock price dropped 25%. Although Deeba made no profits from his conduct, Deeba’s brothers collectively avoided losses of $581,170 by selling their Qualys stock.”

Under the terms of Deeba’s settlement, he is ineligible to serve as an officer or director of any SEC-reporting company for two years and has been ordered to pay a $581,170 penalty.

Tee, for his part, said there was never any admission of guilt from Deeba and that he’s already had a positive impact on Moogsoft.

“[Deeba] is a tremendously impressive individual and he has the full confidence of myself and the board,” Tee said.

 

Edo raises $12M to measure TV ad effectiveness

Edo, an ad analytics startup founded by Daniel Nadler and actor Edward Norton, announced today that it has raised $12 million in Series A funding.

Nadler and Norton have both had startup success before — Nadler co-founded and led Kensho, which S&P Global acquired for $550 million. Norton invested in Kensho and co-founded CrowdRise, which was acquired by GoFundMe.

Even so, ad analytics might seem like an arcane industry for an actor/filmmaker to want to tackle. However, Norton said he was actually the one to convince Nadler that it was worth starting the company, and he argued that this is an important topic to both of them as creators. (Nadler’s a poet.)

“Movie studios and publishers, they take risks on talent, on creative people like us,” Norton said. “We want them to do well … The better they do with the dollars they spend, the less risk averse they become.”

Nadler and Norton recruited Kevin Krim, the former head of digital at CNBC, to serve as Edo’s CEO.

Krim explained that while linear TV advertising still accounts for the majority of ad budgets, the effectiveness of those ads is still measured using old-fashioned “survey-based methodologies.” There are other measurement companies looking online; Norton said they’re focused on social media sentiment and other “weak proxies” for consumer behavior.

Edo screenshot

In contrast, Edo pulls data from sources like search engines and content sites where people are doing research before making a purchase. By applying data science, Krim said, “We basically can measure the change in consumer engagement, the behaviors that are indicative of intent. We can measure the change in consumer behavior for every ad.”

In fact, Edo says that since its founding in 2015, it has created a database of 47 million ad airings, so advertisers can see not just their own ad performance, but also that of their competitors. This allows advertisers to adjust their campaigns based on consumer engagement — Krim said that in some cases, advertisers will receive the overnight data and then adjust their ad rotation for that very night.

As for the Series A, it was led by Breyer Capital. (Jim Breyer has backed everything from Facebook to Etsy to Marvel.) Vista Equity co-founders Robert Smith and Brian Sheth participated in the round, as did WGI Group.

“For more than a decade I’ve watched the data science talent arbitrage transform industries from finance to defense, from transportation to commerce,” Breyer said in the funding announcement. “We needed someone to bring these capabilities to bear on the systemic inefficiencies and methodological shortcomings of measurement and analytics in media and advertising.”

On the customer side, Edo is already working with ESPN, Turner, NBCUniversal and Warner Bros. I wondered whether some of the TV networks might have been worried about what Edo would reveal about their ads, but Norton said the opposite was true.

“I don’t sense that they in any way have trepidation that we’re going to pull their pants down — quite the opposite,” he said. “They are absolutely thrilled with our ability to help burnish and validate their assertions about the strength of what they’re offering.”

Brex has partnered with WeWork, AWS and more for its new rewards program

Brex, the corporate card built for startups, unveiled its new rewards program today.

The billion-dollar company, which announced its $125 million Series C three weeks ago, has partnered with Amazon Web Services, WeWork, Instacart, Google Ads, SendGrid, Salesforce Essentials, Twilio, Zendesk, Caviar, HubSpot, Orrick, Snap, Clerky and DoorDash to give entrepreneurs the ability to accrue and spend points on services and products they use regularly.

Brex is lead by a pair of 22-year-old serial entrepreneurs who are well aware of the costs associated with building a startup. They’ve been carefully crafting Brex’s list of partners over the last year and say their cardholders will earn roughly 20 percent more rewards on Brex than from any competitor program.

“We didn’t want it to be something that everyone else was doing so we thought, what’s different about startups compared to traditional small businesses?” Brex co-founder and chief executive officer Henrique Dubugras told TechCrunch. “The biggest difference is where they spend money. Most credit card reward systems are designed for personal spend but startups spend a lot more on business.”

Companies that use Brex exclusively will receive 7x points on rideshare, 3x on restaurants, 3x on travel, 2x on recurring software and 1x on all other expenses with no cap on points earned. Brex carriers still using other corporate cards will receive just 1x points on all expenses.

Most corporate cards offer similar benefits for travel and restaurant expenses, but Brex is in a league of its own with the rideshare benefits its offering and especially with the recurring software (SalesForce, HubSpot, etc.) benefits.

San Francisco-based Brex has raised about $200 million to date from investors including Greenoaks Capital, DST Global and IVP.  At the time of its fundraise, the company told TechCrunch it planned to use its latest capital infusion to build out its rewards program, hire engineers and figure out how to grow the business’s client base beyond only tech startups.

“This is going to allow us to compete even more with Amex, Chase and the big banks,” Dubugras said.

Ian Small, former head of TokBox, takes over as Evernote CEO from Chris O’Neill

Former TokBox head Ian Small is replacing Chris O’Neill as CEO of Evernote, the note-taking and productivity app company said this morning. In a blog post, Small said that the leadership change was announced to employees this morning by Evernote’s board. “We are all hugely appreciative of the energy and dedication Chris has shown over the last three years, and in particular for putting Evernote on solid financial footing so we can continue to build for the future,” he wrote.

Small added, “When Stepan Pachikov founded Evernote, he had a vision for how technology could augment memory and how an app could change the way we relate to information at home and at work. Evernote has been more successful at making progress towards Stepan’s dreams than he could have imagined, but Stepan and I both think that there is more to explore and more to invent.”

O”Neill had been Evernote’s CEO since 2015, when he took over the position from co-founder Phil Libin. Small previously served as CEO of TokBox, which operates the OpenTok video calling platform, from 2009 to 2014, and then as its chairman from 2014 to July of this year.

O’Neill’s departure as CEO is the latest significant leadership shift for Evernote, which has withstood several key executive departures over the last few months. In early September, we reported that the company had lost several senior executives, including CTO Anirban Kundu, CFO Vincent Toolan, CPO Erik Wrobel, and head of HR Michelle Wagner, as it sought funding in a potential down-round from the unicorn valuation it hit in 2012. According to TechCrunch’s sources, Evernote had struggled to grow its base of paid users and active users, as well as enterprise clients, for the last six years.

Then a few weeks later, Evernote announced that had to lay off 54 people, or about 15 percent of its workforce. O’Neill wrote a blog post about the company’s future growth strategy, including streamlining specific functions like sales so it could focus on product development and engineering.

Jane.VC, a new fund for female entrepreneurs, wants founders to cold email them

Want to pitch a venture capitalist? You’ll need a “warm introduction” first. At least that’s what most in the business will advise.

Find a person, typically a man, who made the VC you’re interested in pitching a whole bunch of money at some point and have them introduce you. Why? Because VCs love people who’ve made them money; naturally, they’ll be willing to hear you out if you’ve got at least one money maker on your side.

There’s a big problem with that cycle. Not all entrepreneurs are friendly with millionaires and not all entrepreneurs, especially those based outside Silicon Valley or from underrepresented backgrounds, have anyone in their network to provide them that coveted intro.

Jane.VC, a new venture fund based out of Cleveland and London wants entrepreneurs to cold email them. Send them your pitch, no wealthy or successful intermediary necessary. The fund, which has so far raised $2 million to invest between $25,000 and $150,000 in early-stage female-founded companies across industries, is scrapping the opaque, inaccessible model of VC that’s been less than favorable toward women.

“We like to say that Jane.VC is venture for every woman,” the firm’s co-founder Jennifer Neundorfer told TechCrunch.

Neundorfer, who previously founded and led an accelerator for Midwest startups called Flashstarts after stints at 21st Century Fox and YouTube, partnered with her former Stanford business school classmate Maren Bannon, the former chief executive officer and co-founder of LittleLane. So far, they’ve backed insurtech company Proformex and Hatch Apps, an enterprise software startup that makes it easier for companies to create and distribute mobile and web apps.

“We are going to shoot them straight”

Jane.VC, like many members of the next generation of venture capital funds, is bucking the idea that the best founders can only be found in Silicon Valley. Instead, the firm is going global and operating under the philosophy that a system of radical transparency and honesty will pay off.

“Let’s be efficient with an entrepreneur’s time and say no if it’s not a hit,” Neundorfer said. “I’ve been on the opposite end of that coaching. So many entrepreneurs think a VC is interested and they aren’t. An entrepreneur’s time is so valuable and we want to protect that. We are going to shoot them straight.”

Though Jane.VC plans to invest across the globe, the firm isn’t turning its back on Bay Area founders. Neundorfer and Bannon will leverage their Silicon Valley network and work with an investment committee of nine women based throughout the U.S. to source deals. 

“We are women that have raised money and have been through the ups and downs of raising money in what is a very male-dominated world,” Neundorfer added. “We believe that investing in women is not only the right thing to do but that you can make a lot of money doing it.”

Cryptocurrency wallet startup Cobo raises $13M Series A to enter the U.S. and Southeast Asia

Cobo, a cryptocurrency wallet startup headquartered in Beijing, has raised a $13 million Series A to enter new international markets. The round was led by DHVC and Wu Capital, a family office based in China. Cobo plans to expand in the United States and Southeast Asia, in particular Vietnam and Indonesia. Cobo is also now taking pre-orders for Cobo Vault, a hardware wallet (pictured above) that it claims is military grade. Cobo’s Series A brings its total funding to $20 million so far.

Cobo Wallet allows users to store both proof-of-stake and proof-of-work coins. One incentive for people to pick the app over its competitors is the ability to pool proof-of-stake assets with other users so they can increase their chances of mining and validating new blocks on the blockchain. Since launching earlier this year, Cobo says its digital wallet has gained more than 500,000 users.

The startup was founded last year by CEO Shixing Mao, who is known as Discus Fish in the crypto community, and CTO Changhao Jiang, a former platform engineer at Facebook and Google who co-founded Bihang, a cryptocurrency wallet acquired by OKCoin in 2013. Discus Fish, meanwhile, is known for launching F2Pool, China’s first mining pool.

Cobo Vault, which will retail for $479, meets the MIL-STD-810G U.S. military standard for equipment, Cobo’s head of hardware Lixin Liu said in an email, adding that it was built with proprietary firmware created especially for the device, a bank-grade encryption chip and military-grade aluminum.

Cobo Vault’s creation was prompted by an August 2017 incident in which F2Pool was hacked and more than 8,000 ETH was stolen from Discus Fish’s account. Fish also refunded customers’ lost ETH from his own assets. “As a result, Discus Fish was resolute on the fact that for crypto to gain mass market adoption, products had to be made to be hacker-resistant and truly safe,” said Liu.

Samsung acquires network analytics startup Zhilabs to help its transition to 5G

Samsung Electronics is betting that acquiring Zhilabs, a real-time networks analytics startup based in Barcelona, will ease its transition from 4G to 5G technologies. Financial details of the deal, which was announced today, have not been disclosed. Zhilabs will be fully owned by Samsung, but it will continue to operate independently under its own management.

The acquisition of Zhilabs is part of Samsung’s initiative, announced in August, to invest 25 trillion won (about $22 billion) in businesses working on AI, 5G, components for self-driving vehicles, and biopharmaceutical technologies.

In a statement, Youngky Kim, Samsung Electronic’s president and head of networks business, said “5G will enable unprecedented services attributed to the generation of exponential data traffic, for which automated and intelligent network analytics tools are vital. The acquisition of Zhilabs will help Samsung meet these demands to assure each subscriber receives the best possible service.”

Founded in 2008, Zhilabs’ products are used by customers including Hewlett Packard Enterprise, Vodafone, and Telefonica to analyze and test network performance in real-time. Because its solutions allow service issues to be automatically detected and fixed, Zhilabs’ AI-based automation will help Samsung launch new services related to the industrial Internet of Things and smart cars.

Lime wants to block Scoot and Skip from deploying electric scooters in SF next week

Lime is doing the most right now. In light of the San Francisco Municipal Transportation Agency denying Lime a permit to operate electric scooters in the city, Lime is gearing up to request a temporary restraining order.

“Lime believes that after selecting two other less experienced electric scooter companies and comparatively weaker applications in a process that was riddled with bias, the SFMTA should revisit the decision and employ a fair selection process,” the company wrote in a press release.

Those two “less experienced” electric scooter companies Lime’s referring to are Skip, which currently operates via an official permit in Washington, D.C., and Scoot, which has successfully and legally operated shared electric mopeds in the city for several years.

Following the SFMTA’s decision, Lime sent an appeal requesting the agency reevaluate its application. At the time, the SFMTA said it was “confident” it picked the right companies.

Now, since the SFMTA still plans to enable both Scoot and Skip to deploy their respective scooters on Monday, Lime says it “believes that it has no choice but to seek emergency relief in the court.”

Ahead of the decision in Santa Monica, Lime, along with Bird, protested recommendations for the city to not grant Lime a permit. Though, the city did end up granting Lime a permit. Lime, however, is not the only company that has appealed the decision in San Francisco. Earlier this week, Lyft reportedly petitioned SF Mayor London Breed, asking her to reconsider the SFMTA’s decision to only grant two permits for electric scooters.

“It’s unfortunate Lime has chosen this course,” John Coté, communications director for City Attorney Dennis Herrera said in a statement. “The SFMTA’s permitting process for the pilot program was thoughtful, fair and transparent. It includes an appeal process that Lime should be pursuing instead of wasting everyone’s resources by running to court.”

He added:

Lime appears to be playing games. It had weeks to resolve this and instead chose a last-minute motion in an effort to shut down the entire scooter program. Lime fails to admit that its application simply didn’t match those of its competitors. If Lime succeeds, it will be hurting the very people it purports to want to help – those who are ready to use scooters on Monday.

Last spring, Lime told San Franciscans that electric scooters were a great transportation alternative. Now, Lime is saying that if they can’t run electric scooters in San Francisco, no one can. It’s sour grapes from Lime, plain and simple.

I’ve reached out to the SFMTA and will update this story if I hear back.

Ola raises $50M at a $4.3B valuation from two Chinese funds

Ola, the arch-rival of Uber in India, has raised $50 million at a valuation of about $4.3 billion from Sailing Capital, a Hong Kong-based private equity firm, and the China-Eurasian Economic Cooperation Fund (CEECF), a state-backed Chinese fund. The funding was disclosed in regulatory documents sourced by Paper.vc and reviewed by Indian financial publication Mint.

According to Mint, Sailing Capital and CEECF will hold a combined stake of more than 1% in Ola . An Ola spokesperson said the company has no comment.

Ola’s last funding announcement was in October, when it raised $1.1 billion (its largest funding round to date) from Tencent and returning investor SoftBank Group. Ola also said it planned to raise an additional $1 billion from other investors that would take the round’s final amount to about $2.1 billion.

At the time, a source with knowledge of the deal told TechCrunch that Ola was headed toward a post-money valuation of $7 billion once the $2.1 bllion raise was finalized. So while the funding from Sailing Capital and CEECF brings it closer to its funding goal, the latest valuation of $4.3 billion is still lower than the projected amount.

Ola needs plenty of cash to fuel its ambitious expansion both within and outside of India. In addition to ride hailing, Ola got back into the food delivery game at the end of last year by acquiring Foodpanda’s Indian operations to compete with UberEats, Swiggy, Zomato and Google’s Areo. It was a bold move to make as India’s food delivery industry consolidated, especially since Ola had previously launched a food delivery service that shut down after less than one year. To ensure the survival of Foodpanda, Ola poured $200 million into its new acquisition.

A few months later after buying Foodpanda, Ola announced the acquisition of public transportation ticketing startup Ridlr in an all-stock deal. Outside of India, Ola has been focused on a series of international launches. It announced today that it will begin operating in New Zealand, fast on the heels of launches in the United Kingdom and Australia (its first country outside of India) this year.

Job Today gets a $16M top up as it preps for Brexit bump

Accel-backed mobile-first jobs app Job Today has pulled in another $16M — an expansion to its November 2016 $20M Series B round. It raised a $10M Series A in January of the same year.

The 2015 founded startup offers a mobile app for job seekers that does away with the need for a CV.

Instead job seekers create a profile in the app and can apply to relevant jobs. Employers can then triage potential applicants via the app and chat to any they like the look of via its messaging platform.

The approach has been especially popular with fast turnover jobs in the service industry, such as hospitality and retail.

Job Today says it has more than five million job seekers registered on its platform, and claims to have delivered more than 100 million candidate applications to the 400,000+ predominantly small businesses posting jobs via the app to date (with 1M+ jobs posted). It currently operates in two markets: Spain and the UK.

The additional funding will be put towards expanding its presence in the UK market — where it says it’s seen “significant growth” in both job postings and candidate applications.

It says the overall volume of applications has increased by 46% year-on-year in the market, with the number of applications per candidate growing by 32% in the same period. The likes of Costa Coffee, Pret A Manger and Eat are named as among its “regular hirers”.

It’s also envisaging a Brexit bump for the local casual job market, as the UK’s decision to leave the European Union looks set to impact the supply of labor for employers…

Commenting in a statement, CEO Eugene Mizin, said: “The casual job market is often the first to experience the effects from macro-economic forces and Brexit will mean that many non-skilled and non-British workers will leave the UK. This will create a demand to fill casual jobs and create new opportunities for the less-skilled school, college and university leavers entering the workforce for the first time in 2019.”

The Series B expansion funds are coming from New York based investor 14W.

Job Today says it got additional growth uplift after integrating with Google Jobs — aka Google search’s built in AI-powered jobs engine. This launched in the UK in July 2018, and Job Today said it saw 101% growth in users in the first month of integration.

Not hog dog? PixFood lets you shoot and identify food

What happens when you add AI to food? Surprisingly, you don’t get a hungry robot. Instead you get something like PixFood. PixFood lets you take pictures of food, identify available ingredients, and, at this stage, find out recipes you can make from your larder.

It is privately funded.

“There are tons of recipe apps out there, but all they give you is, well, recipes,” said Tonnesson. “On the other hand, PixFood has the ability to help users get the right recipe for them at that particular moment. There are apps that cover some of the mentioned, but it’s still an exhausting process – since you have to fill in a 50-question quiz so it can understand what you like.”

They launched in August and currently have 3,000 monthly active users from 10,000 downloads. They’re working on perfecting the system for their first users.

“PixFood is AI-driven food app with advanced photo recognition. The user experience is quite simple: it all starts with users taking a photo of any ingredient they would like to cook with, in the kitchen or in the supermarket,” said Tonnesson. “Why did we do it like this? Because it’s personalized. After you take a photo, the app instantly sends you tailored recipe suggestions! At first, they are more or le

ss the same for everyone, but as you continue using it, it starts to learn what you precisely like, by connecting patterns and taking into consideration different behaviors.”

In my rudimentary tests the AI worked acceptably well and did not encourage me to eat a monkey. While the app begs the obvious question – why not just type in “corn?” – it’s an interesting use of vision technology that is definitely a step in the right direction.

 

Tonnesson expects the AI to start connecting you with other players in the food space, allowing you to order corn (but not a monkey) from a number of providers.

“Users should also expect partnerships with restaurants, grocery, meal-kit, and other food delivery services will be part of the future experiences,” he said.

WSJ reports that Theranos will finally dissolve

Theranos is reportedly finally closing down for good, nearly three years after a Wall Street Journal investigation called its blood testing technology into question. The WSJ said the company, whose dramatic downfall spawned a best-selling book that’s set to be filmed with Jennifer Lawrence starring as Theranos founder and CEO Elizabeth Holmes, sent shareholders an email saying it will formally dissolve and seek to pay unsecured creditors its remaining cash in the coming months.

Holmes resigned as CEO in June after she and Theranos’ former president, Ramesh “Sunny” Balwani, were charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud in June.

Both Holmes and Balwani had already been charged with fraud by the Securities and Exchange Commission (the criminal charges are separate from the civil ones filed by the SEC). In its complaint, the SEC said the two engaged in “an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business and financial performance,” which ultimately enabled them to raise more than $700 million from investors.

Holmes and the SEC settled the charges by having Holmes agree to pay a $500,000 penalty and be barred from serving as an officer or director of a public company for 10 years. She was also required to return the remaining 18.9 million shares she obtained while engaging in fraud and relinquish voting control of Theranos.

TechCrunch has sent an email to Theranos’ public relations address asking for comment.

Shine grabs $9.3 million to build a bank for freelancers

French startup Shine is raising a $9.3 million (€8 million) Series A round. The company is building an alternative to traditional bank accounts for freelancers working in France.

XAnge is leading today’s round with existing investor Daphni also participating, as well as business angels Gilles Samoun and Ed Zimmerman. The company previously raised $3.3 million (€2.8 million) from Daphni, Kima Ventures and various business angels.

While it’s pretty easy to get started as a freelancer in many countries, France is not one of them. You need to register a “micro-company”, report your earnings for corporate taxes, report sales tax collection in some cases and more.

Arguably, it has gotten much easier recently with a ton of resources to get started. But Shine wants to go one step further and package everything you need in an app.

Shine starts by helping you register your company. After downloading the app, the company will guide you through the process — you need to take a photo of your ID and fill out a form. It feels like signing up to a social network. Compared to the official process, Shine’s process is less intimidating and easier to understand.

You can send and receive money from your Shine account just like in any banking app. Shine gives you your own banking information (IBAN) to receive payments and pay using direct debit. A few days later, you receive a debit card. You can temporarily lock the card or disable some features in the app, such as ATM withdrawals and online payments.

Shine doesn’t handle IBAN and cards directly. The company partners with Treezor for those banking features.

If you’re a rider on Deliveroo and UberEats, or if you work with a freelancer marketplace, such as Malt, Side, Upwork and Brigad, all you need to do is enter your Shine IBAN on those platforms. If you work with clients directly, Shine has an integrated invoicing system. It generates a web page and a PDF that you can send to your clients. When a client opens the page, you get a notification. They can pay with a card.

Finally, Shine reminds you when you have to pay your taxes and has a customer support team that can help you figure out what you need to do. They’re slowly building a comprehensive knowledge base on being a freelancer in France.

Shine is free for everything I just described except if you choose to accept card payments on your invoices. But even for that feature, it remains quite cheap.

The company plans to launch a premium plan in the coming months with advanced accounting features. So far, 25,000 freelancers are using Shine in France. And 10 percent of new freelancers (“micro-entrepreneurs”) register their company through Shine.

While challenger banks, such as N26 and Revolut are widely successful, it’s great to see some companies focus on niche markets with the same approach. Shine is a breath of fresh air for freelancers in France. The company is making the process so much easier for newcomers.

How Silicon Valley should celebrate Labor Day

Ask any 25-year old engineer what Labor Day means to him or her, and you might get an answer like: it’s the surprise three-day weekend after a summer of vacationing. Or it’s the day everyone barbecues at Dolores Park. Or it’s the annual Tahoe trip where everyone gets to relive college.

Or simply, it’s the day we get off because we all work so hard.

And while founders and employees in startup land certainly work hard, wearing their 80-hour workweeks as a badge of honor, closing deals on conference calls in an air-conditioned WeWork is a far cry from the backbreaking working conditions of the 1880s, the era when Labor Day was born.

For everyone here in Silicon Valley, we should not be celebrating this holiday triumphantly over beers and hot dogs, complacent in the belief that our gravest labor issues are behind us, but instead use this holiday as a moment to reflect on how much further we have to go in making our workplaces and companies more equitable, diverse, inclusive and ethically responsible.

Bloody Beginnings

On September 5th, 1882, 10,000 workers gathered at a “monster labor festival” to protest the 12-hours per day, seven days a week harsh working conditions they faced in order to cobble together a survivable wage. Even children as “young as 5 or 6 toiled in mills, factories and mines across the country.”

This all erupted in a climax in 1894 when the American Railway Union went on a nationwide strike, crippling the nation’s transportation infrastructure, which included trains that delivered postal mail. President Grover Cleveland declared this a federal crime and sent in federal troops to break up the strike, which resulted in one of the bloodiest encounters in labor history, leaving 30 dead and countless injured.

Labor Day was declared a national holiday a few month later in an effort to mend wounds and make peace with a reeling and restless workforce (it also conveniently coincided with President Cleveland’s reelection bid).

The Battle is Not Yet Won

Today in Silicon Valley, this battle for fair working conditions and a living wage seems distant from our reality of nap rooms and lucrative stock grants.  By all accounts, we have made tremendous strides on a number of critical labor issues. While working long hours is still a cause for concern, most of us can admit that we often voluntarily choose to work more than we have to. Our workplace environments are not perfect (i.e. our standing desks may not be perfectly ergonomic), but they are far from life-threatening or hazardous to our health. And while equal wages are still a concern, earning a living wage is not, particularly if the worst case scenario after “failing” at a startup means joining a tech titan and clocking in as a middle manager with a six-figure salary.

Even though the workplace challenges of today are not as grave as life or death, the fight is not yet over. Our workplaces are far from perfect, and the power dynamic between companies and employees is far from equal.

In tech, we face a myriad of issues that need grassroots, employee-driven movements to effect change. Each of the following issues has complexities and nuances that deserve an article of its own, but I’ve tried to summarize them briefly: 

  1. Equal pay for equal work – while gender wage gaps are better in tech than other industries (4% average in tech vs. 20% average across other industries), the discrepancy in wages for women in technical roles is twice the average for other roles in tech.
  2. Diversity – research shows that diverse teams perform better, yet 76% of technical jobs are still held by men, and only 5% of tech workers are Black or Latino. The more alarming statistic in a recent Atlassian survey is that more than 40% of respondents felt that their company’s diversity programs needed no further improvement.
  3. Inclusion – an inclusive workplace should be a basic fundamental right, but harassment and discrimination still exist. A survey by Women Who Tech found that 53 percent of women working in tech companies reported experiencing harassment (most frequently in the form of sexism, offensive slurs, and sexual harassment) compared to 16 percent of men.
  4. Outsourced / 1099 employees – while corporate employees at companies like Amazon are enjoying the benefits of a ballooning stock, the reality is much bleaker for warehouse workers who are on the fringes of the corporate empire. A new book by undercover journalist James Bloodworth found that Amazon workers in a UK warehouse “use bottles instead of the actual toilet, which is located too far away.” A separate survey conducted found that 55% of these workers suffer from depression, and 80% said they would not work at Amazon again.Similarly, Foxconn is under fire once again for unfair pay practices, adding to the growing list of concerns including suicide, underage workers, and onsite accidents. The company is the largest electronics manufacturer in the world, and builds products for Amazon, Apple, and a host of other tech companies.
  5. Corporate Citizenship & Ethics – while Silicon Valley may be a bubble, the products created here are not. As we’ve seen with Facebook and the Cambridge Analytica breach, these products impact millions of lives. The general uncertainty and uneasiness around the implications of automation and AI also spark difficult conversations about job displacement for entire swaths of the global population (22.7M by 2025 in the US alone, according to Forrester).

Thus, the reversal in sentiment against Silicon Valley this past year is sending a message that should resonate loud and clear — the products we build and the industries we disrupt here in the Valley have real consequences for workers that need to be taken seriously.

Laboring toward a better future

To solve these problems, employees in Silicon Valley needs to find a way to organize. However, there are many reasons why traditional union structures may not be the answer.

The first is simply that traditional unions and tech don’t get along. Specifically, the AFL-CIO, one of the largest unions in America, has taken a hard stance against the libertarian ethos of the Valley, drawing a bright line dividing the tech elite from the working class. In a recent speech about how technology is changing work, the President of the AFL-CIO did not mince words when he said that the “events of the last few years should have made clear that the alternative to a just society is not the libertarian paradise of Silicon Valley billionaires. It is a racist and authoritarian nightmare.”

But perhaps the biggest difference between what an organized labor movement would look like in Silicon Valley and that of traditional organized labor is that it would be a fight not to advance the interest of the majority, but to protect the minority. In the 1880s, poor working conditions and substandard pay affected nearly everyone — men, women, and children. Unions were the vehicles of change for the majority.

But today, for the average male 25-year old engineer, promoting diversity and inclusion or speaking out about improper treatment of offshore employees is unlikely to affect his pay, desirability in the job market, or working conditions. He will still enjoy the privileges of being fawned over as a scarce resource in a competitive job market. But the person delivering the on-demand service he’s building won’t. His female coworker with an oppressive boss won’t. This is why it is ever more important that we wake up and not only become allies or partners, but champions of the causes that affect our less-privileged fellow coworkers, and the people that our companies and products touch.

So this Labor Day, enjoy your beer and hot dog, but take a moment to remember the individuals who fought and bled on this day to bring about a better workplace for all. And on Tuesday, be ready to challenge your coworkers on how we can continue that fight to build more diverse, inclusive, and ethically responsible companies for the future. 

Cootek, the Chinese maker of TouchPal keyboard, files for $100M US IPO

Cootek, the Chinese mobile internet company best known for keyboard app TouchPal, has filed for a public offering in the United States. In its F-1 form, submitted last week to the Securities and Exchange Commission, Cootek said it wants to raise up to $100 million.

The Shanghai-based company began operating in 2008, when TouchPal was launched, and incorporated as CooTek in March 2012. In its SEC filing, Cootek said it currently has 132 million daily active users, with average DAUs increasing 75% year-over-year as of June. It also said it achieved 453% total ad revenue growth in the six month period before June.

While AI-based TouchPal, which offers glide typing and predictive text, is Cootek’s most popular product, it also has 15 other apps in its portfolio, including fitness apps HiFit and ManFIT and a virtual assistant called Talia. The company uses its proprietary AI and big data technology to analyze language data collected from users and the Internet. Then it uses those insights to develop lifestyle, healthcare and entertainment apps. Together, those 15 apps reached an average of 22.2 million monthly average users and 7.3 million daily average users in June.

TouchPal itself had 125.4 million daily average users in June 2018, with active users launching the app an average of 72 times a day. It currently supports 110 languages.

Most of Cootek’s revenue comes from mobile advertising. It says net revenue grew from $11 million in 2016 to $37.3 million in 2017, or 238.5% year-over-year, while its net loss dropped from $30.7 million in 2016 to $23.7 million in 2017. It achieved net income of $3.5 million for the six months ending in June, compared to a net loss of $16.2 million in the same period a year ago.

Cootek plans to be listed under the ticker symbol CTK on the New York Stock Exchange and will use the IPO’s proceeds to grow its user base, invest in AI and natural language processing tech and improve advertising performance. The offering will be underwritten by underwritten by Credit Suisse, BofA Merrill Lync and Citi.

ezCater acquires GoCater to expand beyond the US

Catering marketplace company ezCater is already putting its big $100 million funding round to good use. The company is acquiring GoCater, a European marketplace that operates in the same field. This is ezCater’s first international expansion move.

If you’re in charge of ordering catered lunch at your office, you probably have heard about ezCater . The company lets you order breakfast, lunch or dinner for 10, 30 or maybe 100 people at once. This service could be particularly useful to impress a client, throw an office party, get lunch together during an off-site and more.

But ezCater doesn’t cook anything itself. The company is a marketplace and connects you with catering companies and big restaurants around you. In other words, ezCater lets you browse the menu of dozens of restaurants around you from the same website and place an order without picking up the phone.

Of course, ezCater didn’t invent catering. But catering is a fragmented industry with a lot of friction. It’s hard to know how much you’re going to pay in advance, it takes a lot of effort to find a new restaurant outside of your usual list. And restaurants could use a new way to promote their offering. Those are the perfect ingredients to create an online marketplace.

You may already know all the options around your office, but ordering through ezCater provides additional benefits. For instance, all your receipts are centralized in the same interface, which lets you get a clear overview of your spendings on catering.

You can also let other people order food for their clients and events. ezCater lets you set maximum amounts, tipping policies and more.

GoCater offers more or less the same thing, but in France and Germany. The company started as a spinoff from French startup La Belle Assiette. GoCater lets you create a whitelist of catering options. You can also set up an approval system so that the intern doesn’t order ice creams for everyone. Finally, GoCater clients only get billed once per month, even if companies order multiple times.

You pay the same price if you order through GoCater or the catering company directly. Catering companies end up paying a cut on GoCater orders. But the startup takes care of billing, accounting and accounts receivable. This way, you can focus on your core business instead of chasing money from past clients.

ezCater is an order of magnitude bigger than GoCater. ezCater works with 60,000 restaurants, while GoCater only has a few hundred restaurants on its platform. It’s worth noting that ezCater has been around for much longer.

But GoCater has one big advantage over ezCater — they have a team on the ground in Europe, ready to attract new restaurants and corporate clients. It’s clear that ezCater was looking for a way to get started in Europe, and GoCater seems like the right fit.

For now, the company will keep both brands after the acquisition. The teams will slowly merge the platforms into a single product.

“The entire GoCater team is staying, and we’re now going to rapidly expand the European team of the company — both the sales team for Europe and the tech and product team for the group,” GoCater founder and CEO Stephen Leguillon told me.

SessionM customer loyalty data aggregator snags $23.8 M investment

SessionM announced a $23.8 million Series E investment led by Salesforce Ventures. A bushel of existing investors including Causeway Media Partners, CRV, General Atlantic, Highland Capital and Kleiner Perkins Caufield & Byers also contributed to the round. The company has now raised over $97 million.

At its core, SessionM aggregates loyalty data for brands to help them understand their customer better, says company co-founder and CEO Lars Albright. “We are a customer data and engagement platform that helps companies build more loyal and profitable relationships with their consumers,” he explained.

Essentially that means, they are pulling data from a variety of sources and helping brands offer customers more targeted incentives, offers and product recommendations “We give [our users] a holistic view of that customer and what motivates them,” he said.

Screenshot: SessionM (cropped)

To achieve this, SessionM takes advantage of machine learning to analyze the data stream and integrates with partner platforms like Salesforce, Adobe and others. This certainly fits in with Adobe’s goal to build a customer service experience system of record and Salesforce’s acquisition of Mulesoft in March to integrate data from across an organization, all in the interest of better understanding the customer.

When it comes to using data like this, especially with the advent of GDPR in the EU in May, Albright recognizes that companies need to be more careful with data, and that it has really enhanced the sensitivity around stewardship for all data-driven businesses like his.

“We’ve been at the forefront of adopting the right product requirements and features that allow our clients and businesses to give their consumers the necessary control to be sure we’re complying with all the GDPR regulations,” he explained.

The company was not discussing valuation or revenue. Their most recent round prior to today’s announcement, was a Series D in 2016 for $35 million also led by Salesforce Ventures.

SessionM, which was founded in 2011, has around 200 employees with headquarters in downtown Boston. Customers include Coca-Cola, L’Oreal and Barney’s.

Cogito scores $37M as AI-driven sentiment analysis biz grows

Cogito announced a $37 million Series C investment today led by Goldman Sachs Growth Equity. Previous investors Salesforce Ventures and OpenView also chipped in. Mark Midle of Goldman Sachs’ Merchant Banking Division, has joined Cogito’s Board of Directors

The company has raised over $64 million since it emerged from the MIT Human Dynamics Lab back in 2007 trying to use the artificial intelligence technology available at the time to understand sentiment and apply it in a business context.

While it took some time for the technology to catch up with the vision, and find the right use case, company CEO and founder Joshua Feast says today they are helping customer service representatives understand the sentiment and emotional context of the person on the line and give them behavioral cues on how to proceed.

“We sell software to very large software, premium brands with many thousands of people in contact centers. The purpose of our solution is to help provide a really wonderful service experience in moments of truth,” he explained. Anyone who deals with a large company’s customer service has likely felt there is sometimes a disconnect between the person on the phone and their ability to understand your predicament and solve your problem.

Cogito in action giving customer service reps real-time feedback.

He says using his company’s solution, which analyzes the contents of the call in real time, and provides relevant feedback, the goal is to not just complete the service call, but to leave the customer feeling good about the brand and the experience. Certainly a bad experience can have the opposite effect.

He wants to use technology to make the experience a more human interaction and he recognizes that as an organization grows, layers of business process make it harder for the customer service representative to convey that humanity. Feast believes that technology has helped create this problem and it can help solve it too.

While the company is not talking about valuation or specific revenue at this point, Feast reports that revenue has grown 3X over the last year. Among their customers are Humana and Metlife, two large insurance companies, each with thousands of customer service agents.

Cogito is based in downtown Boston with 117 employees at last count, and of course they hope to use the money to add on to that number and help scale this vision further.

“This is about scaling our organization to meet client’s needs. It’s also about deepening what we do. In a lot of ways, we are only scratching the surface [of the underlying technology] in terms of how we can use AI to support emotional connections and help organizations be more human,” Feast said.

Propelling deep space flight with a new fuel source, Momentus prepares for liftoff

Mikhail Kokorich, the founder of Momentus, a new Y Combinator-backed propulsion technology developer for space flight, hadn’t always dreamed of going to the moon.

A physicist who graduated from Russia’s top-ranked Novosibirsk University, Kokorich was a serial entrepreneur in who grew up in Siberia and made his name and his first fortunes in the years after the fall of the Soviet Union.

The heart of Momentus’ technology is a new propulsion system that uses water as a propellant instead of chemicals.

Image courtesy Momentus

Using water has several benefits, Kokorich says. One, it’s a fuel source that’s abundant in outer space, and it’s ultimately better and more efficient fuel for flight beyond low earth orbit. “If you move something with a chemical booster stage to the moon. Chemical propulsion is good when you need to have a very high thrust,” according to Kokorich. Once a ship gets beyond gravity’s pull, water simply works better, he says.

Some companies are trying to guide micro-satellites with technologies like Phase 4 which use ionized gases like Xenon, but according to Kokorich those are more expensive and slower. “When ionized propulsion is used for geostationary satellites to orbit, it takes months,” says Kokorich, using water can half the time.

“We can carry ten tons to geostationary orbit and it’s much faster,” says Kokorich.

The company has already signed an agreement with ECM Space, a European launch services provider, which will provide the initial trip for the company’s first test of its propulsion system on a micro-satellite — slated for early 2019.

That first product, “Zeal,” has specific impulses of 150 to 180 seconds and power up to 30 watts.

Kokorich started his first business, Dauria, in the mid-90s amid the collapse of the Soviet Union, selling explosives and engineering services to mining companies in Siberia. Kokorich sold that business and went into retail, eventually building a network of stores that sold home goods and housewares across Russia.

That raked in more millions for Kokorich, who then said he diversified into electronics by buying Russia’s BestBuy chain out bankruptcy. But space was never far from his mind, and, eventually he returned to it.

“In 2011 I hit my middle-aged crisis,” Korkorich says. “So I founded the first private Russian aerospace company.”

That company, Dauria Aerospace, was initially feted by the government, garnering the entrepreneur a place in Skolkovo, and its inaugural cohort of space companies. In an announcement of the successes the space program had achieved in 2014 Kokorich co-authored a piece with the Russian cosmonaut Sergey Zhukov, who remains the executive director of the networking and aerospace programs at the multi-billion-dollar boondoggle startup incubator.

Utilis detects water leaks underground using satellite imagery.

A few months later Kokorich would be in the U.S. working to back the first of what’s now a triumvirate of startups focused on space.

“With all the problems with Russia in the Western world, I moved to the U.S.,” says Kokorich. Dauria had quickly raised $30 million for its work, but as this Moscow Times article notes, stiff competition from U.S. firms and the sanctions leveled against Russia in the wake of its invasion and annexation of Crimea were taking their toll on the entrepreneur’s business. “It was a purely political immigration,” Korkorich says. “I don’t have purely business opportunities, because you have to work with the government [and] because the government would not like me.”

For all of his protestations, Kokorich has maintained several economic ties with partners in Russia. It’s through an investment firm called Oden Holdings Ltd. that Kokorich took an investment stake in the Canadian company Helios Wire, which was one of his first forays into space entrepreneurship outside of Russia. That company makes cryptographically secured applications for the transmission and reception of data from internet-enabled devices.

The second space company that the co-founder has built since moving to the U.S. is the satellite company Astra Digital, which processes data from satellites to make that information more accessible.

Now, with Momentus, Kokorich is turning to the problem of propulsion. “When transportation costs decrease, many business models emerge” Kokorich says. And Kokorich sees Momentus’ propulsion technology driving down the costs of traveling further into space — opening up opportunities for new businesses like asteroid mining and lunar transit.

The Momentus team is already thinking well beyond the initial launch. The company’s eyes are on a prize well beyond geostationary orbit.

Indeed, with water as a power source, the company says it will lay the groundwork for future cislunar and interplanetary rides. The company envisions a future where it will power water prospecting and delivery throughout the solar system, solar power stations, in-space manufacturing and space tourism.

Online learning platform Unacademy gets $21M Series C from Sequoia India, SAIF and Nexus

Unacademy founders Roman Saini, Gaurav Munjal and Hemesh Singh

Bangalore-based Unacademy will add more educators to its online learning platform, which claims to be India’s largest, after closing a $21 million Series C. The funding comes from Sequoia India, SAIF Partners and Nexus Venture Partners, with participation from Blume Ventures (all four firms are returning from Unacademy’s Series B last year).

Originally a YouTube channel created in 2010 by Gaurav Munjal, Unacademy was officially launched as a startup in 2015 by founders Munjal, Roman Saini and Hemesh Singh. It has now raised $38.6 million in total.

While Unacademy offers a wide range of courses, its most popular offerings include preparation for important exams in India. Its platform includes two apps: one that lets educators create lessons and another that allows users to access them. Unacademy says it has 10,000 registered educators and three million users. Last month, the startup claims 3,000 educators were active on the platform and lessons were watched more than 40 million times.

Many lessons are available for free, though last year Unacademy launched a paid service called Plus that gives users access to features like private discussion forums and live video classes for a per-course fee. Unacademy claims it has achieved six times growth in monthly revenue since launching Plus. The premium classes also help it differentiate from other online learning platforms like Mrunal, a popular site that provides free test preparation for Indian students.

In addition to bringing on more teachers, Unacademy will use its new funding to expand key categories like pre-med, the Graduate Aptitude Test in Engineering (GATE) and the Common Admission Test (CAT), which are required by many post-graduate programs.

In a media statement, SAIF partner Alok Goel said “Unacademy has demonstrated tremendous progress towards their goal of delivering personalized learning by connecting great quality educators and students on their platform. The company has diversified across several new domains and has achieved amazing word of mouth among learners.”

All charges against ex-Vungle CEO Zain Jaffer, including lewd act on a child, dismissed by judge

All charges against former Vungle CEO Zain Jaffer, including a sexual abuse of a child, have been dropped. According to a statement from Jaffer’s representatives, San Mateo County Judge Stephanie Garratt dismissed the charges today. Jaffer was arrested last October and charged with several serious offenses, including a lewd act on one of his children, child abuse and battery on a police officer.

The dismissal is confirmed by San Mateo County Superior Court’s online records. The case (number 17NF012415A) had been scheduled to go to jury trial in late August.

Jaffer, whose full name is Zainali Jaffer, said in a statement that:

Being wrongfully accused of these crimes has been a terrible experience, which has had a deep and lasting impact on my family and the employees of my business. Those closest to me knew I was innocent and were confident that all of the charges against me would eventually be dismissed. I want to thank the San Mateo County District Attorney’s Office for carefully reviewing and considering all of the information and evidence in this case and dropping all the charges. I am also incredibly grateful for the continued and unwavering support of my wife and family, and look forward to spending some quality time with them.

Vungle, the fast-rising mobile ad startup Jaffer co-founded in 2011, removed him from the company immediately after they learned about the charges in October. TechCrunch has contacted Vungle and the San Mateo County District Attorney’s Office for comment.

“Social selling” startup Meesho lands $11.5M Series B led by Sequoia India

Y Combinator alum Meesho, one of several “social selling” startups gaining speed in India, will add more features to its e-commerce platform after closing a $11.5 million Series B led by Sequoia India. Existing investors SAIF Partners, Y Combinator and Venture Highway also returned for the round, which brings the Bangalore-based startup’s total funding so far to $15 million. Its last round of funding, a $3.4 million Series A, was announced last October.

Like social selling competitors including GlowRoad and Zepo, Meesho’s model combines dropshipping from its wholesale partners with a comprehensive suite of e-commerce tools and services. This reduces overhead while making it easy for sellers, who Meesho says includes many housewives, students and retirees, to set up an online business through WhatsApp, Facebook and other social media.

Meesho’s tools include an online platform that allows sellers to manage purchases and process payments, as well as a network of wholesale suppliers (its main categories are currently fashion and lifestyle items) and logistics providers. In other words, it offers almost everything its vendors need to start selling online. This leaves vendors responsible for customer acquisition, picking what items they want to include in their online shops and marketing them.

This reselling model appeals to small stores, as well as individuals, who want to make more money but don’t want the expense of setting up an e-commerce business from scratch and carrying inventory. Meesho’s rivals include e-commerce startups like GlowRoad, Shopmatic and Zepo, which have also recently raised large funding rounds. All of these companies attract sellers by offering a significant amount of help with order management, payment processing, fulfillment and logistics.

In order to differentiate, chief executive officer Vidit Aatrey, who co-founded Meesho in 2015 with Sanjeev Barnwal, its chief technology officer, tells TechCrunch it focuses on product quality, pricing and personalization to help resellers improve their sales and customer service. Meesho claims that more than 800,000 resellers have used its platform and that a “typical” reseller earns between 20,000 to 25,000 rupees per month (about $298 to $373).

In a press statement about the funding, Sequoia India managing director Mohit Bhatnagar said “Social commerce is the future of e-commerce in India. People buy from people they trust, and that’s what Meesho enables.  Entrepreneurs, many of them women, use the Meesho platform to recommend, customize and sell to their family and friends. Social selling is a huge trend and Sequoia India is excited to partner with Meesho, which is the early leader in this space.”

Aatrey says Meesho’s Series B capital will be used to hire more people for its tech and product teams in order to build a suite of new customer acquisition and selling tools. The startup also plans to add more personalization options for its resellers and product categories.

Microsoft acquires conversational AI startup Semantic Machines to help bots sound more lifelike

Microsoft announced today that it has acquired Semantic Machines, a Berkeley-based startup that wants to solve one of the biggest challenges in conversational AI: making chatbots sound more human and less like, well, bots.

In a blog post, Microsoft AI & Research chief technology officer David Ku wrote that “with the acquisition of Semantic Machines, we will establish a conversational AI center of excellence in Berkeley to push forward the boundaries of what is possible in language interfaces.”

According to Crunchbase, Semantic Machines was founded in 2014 and raised about $20.9 million in funding from investors including General Catalyst and Bain Capital Ventures.

In a 2016 profile, co-founder and chief scientist Dan Klein told TechCrunch that “today’s dialog technology is mostly orthogonal. You want a conversational system to be contextual so when you interpret a sentence things don’t stand in isolation.” By focusing on memory, Semantic Machines’ AI can produce conversations that not only answer or predict questions more accurately, but also flow naturally.

Instead of building its own consumer products, Semantic Machines focused on enterprise customers. This means it will fit in well with Microsoft’s conversational AI-based products, including Microsoft Cognitive Services and Azure Bot Service, which are used by one million and 300,000 developers, respectively, and virtual assistants Cortana and Xiaolce.

Munchery shuts down operations in LA, New York and Seattle

Munchery, the on-demand food delivery startup, has shut down its operations in Los Angeles, New York and Seattle, the company announced on its blog today. That means the teams from those cities are also being let go. In total, 257 people (about 30 percent of workforce) were let go, according to a Munchery spokesperson.

“We recognize the impact this will have on the members of our team in those regions,” Munchery CEO James Beriker wrote on the company blog. “Our teams in each city have built their businesses from scratch and worked tirelessly to serve our customers and their communities. I am grateful for their unwavering commitment to Munchery’s mission and success. I truly wish that the outcome would have been different.”

With LA, New York and Seattle off the table, Munchery says it’s going to focus more on its business in San Francisco, its first and largest market. This shift in operations will also enable Munchery to “achieve profitability on the near term, and build a long-term, sustainable business.”

The last couple of years for Munchery has not gone very well, between scathing reports of the company wasting an average of 16 percent of the food it makes, laying off 30 employees and burning through most of the money it raised.

During that time, Munchery tried a number of different strategies. Munchery, which began as a ready-to-heat meal delivery service, in 2015 started delivering meal recipes and ingredients for people who want to cook. Then, Munchery launched an $8.95 a month subscription plan for people who order several times a month. In late 2016, Munchery opened up a shop inside a San Francisco BART station to try to bring in new business.

But it’s not just Munchery that has struggled. The on-demand food delivery business is tough in general. Over the last couple of years, a number of companies have shuttered due to the now well-known fact that the on-demand business is tough when it comes to margins. The most recent casualty was Sprig, which shut down last May, after raising $56.7 million in funding. Other casualties include Maple, Spoonrocket and India’s Ola.

Munchery has raised more than $120 million in capital from Menlo Ventures, Sherpa Capital and others. In March, the company was reportedly seeking $15 million in funding to help keep its head above water.

Pivotal CEO talks IPO and balancing life in Dell family of companies

Pivotal has kind of a strange role for a company. On one hand its part of the EMC federation companies that Dell acquired in 2016 for a cool $67 billion, but it’s also an independently operated entity within that broader Dell family of companies — and that has to be a fine line to walk.

Whatever the challenges, the company went public yesterday and joined VMware as a  separately traded company within Dell. CEO Rob Mee says the company took the step of IPOing because it wanted additional capital.

“I think we can definitely use the capital to invest in marketing and R&D. The wider technology ecosystem is moving quickly. It does take additional investment to keep up,” Mee told TechCrunch just a few hours after his company rang the bell at the New York Stock Exchange.

As for that relationship of being a Dell company, he said that Michael Dell let him know early on after the EMC acquisition that he understood the company’s position. “From the time Dell acquired EMC, Michael was clear with me: You run the company. I’m just here to help. Dell is our largest shareholder, but we run independently. There have been opportunities to test that [since the acquisition] and it has held true,” Mee said.

Mee says that independence is essential because Pivotal has to remain technology-agnostic and it can’t favor Dell products and services over that mission. “It’s necessary because our core product is a cloud-agnostic platform. Our core value proposition is independence from any provider — and Dell and VMware are infrastructure providers,” he said.

That said, Mee also can play both sides because he can build products and services that do align with Dell and VMware offerings. “Certainly the companies inside the Dell family are customers of ours. Michael Dell has encouraged the IT group to adopt our methods and they are doing so,” he said. They have also started working more closely with VMware, announcing a container partnership last year.

Photo: Ron Miller

Overall though he sees his company’s mission in much broader terms, doing nothing less than helping the world’s largest companies transform their organizations. “Our mission is to transform how the world builds software. We are focused on the largest organizations in the world. What is a tailwind for us is that the reality is these large companies are at a tipping point of adopting how they digitize and develop software for strategic advantage,” Mee said.

The stock closed up 5 percent last night, but Mee says this isn’t about a single day. “We do very much focus on the long term. We have been executing to a quarterly cadence and have behaved like a public company inside Pivotal [even before the IPO]. We know how to do that while keeping an eye on the long term,” he said.

Minds aims to decentralize the social network

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

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

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

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

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

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

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

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

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

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

Tribe combines arcade games with group video chat

Sick of chatting but want to stay connected? Tribe‘s app lets you play clones of Space Invaders, Flappy Bird, Fruit Ninja, Name That Tune and more while video chatting with up to seven friends or strangers. Originally a video messaging app, Tribe failed to gain traction in the face of Snapchat and Facebook Messenger. But thanks to a $3 million funding round led by Kleiner Perkins in June, Tribe had the runway to pivot into video chat gaming that could prove popular, even if not in its app.

“As we all know, Messaging is a super-crowded area,” says Tribe co-founder Cyril Paglino. “If you look closely, very few communication products have been blowing up in the past three years.” Now, he says “we’re building a ‘Social Game Boy.’”

A former breakdancer, Paglino formed his team in France before renting a “hacker house” and moving to San Francisco. They saw traction in late 2016, hitting 500,000 downloads. Tribe’s most innovative feature was speech recognition that could turn a mention of “coffee” into a pre-made calendar request, a celebrity’s name into a link to their social media accounts, locations into maps and even offer Spotify links to songs playing in the background.

The promise of being the next hit teen app secured Tribe a $500,000 pre-seed from Kima and Ludlow Ventures in 2015, a $2.5 million seed in 2016 led by prestigious fund Sequoia Capital and then the June 2017 $3 million bridge from KPCB and others. But that $6 million couldn’t change the fact that people didn’t want to sign up for a new chat app when their friends were already established on others.

Luckily, Tribe saw a new trend emerging. Between HQ Trivia’s rise, the Apple App Store adding a Gaming tab, celebrities like Drake streaming their gameplay and Snapchat acquiring 3D gaming engine PlayCanvas, the Tribe team believed there was demand for a new way to play.

Tribe’s rebuilt iOS and Android apps let you rally a crew of friends or join in with strangers to play one of its old-school games. You’ll hear their voices and see their faces in the corner of the screen as everyone in your squad vies for first place. It’s like Houseparty’s group video chat, but with something to do. Facebook Messenger has its own gaming platform, but the games are largely asynchronous. That means you play separately and merely compare scores. That’s a lot less fun than laughing it up together as one of your buddies runs their race car off the road or gets attacked by an alien.

The only problem is that since your friends probably aren’t on Tribe already, the app is vulnerable to cloning by its bigger competitors. Paglino cited technical challenges his team has overcome, its young demographic and lessons learned from 18 months of iterations as what could keep Tribe from being easily co-opted. But as even public companies like Snapchat have learned, it can be tough to stay ahead of tech giants like Facebook with huge development teams, plenty of cash and apps that are already popular.
Tribe’s games are legitimately fun, and the video chat makes them feel a lot more like hanging out with friends and less like a waste of time. Even if Tribe isn’t the one to make mobile group video chat gaming ubiquitous, it could see its idea entertain millions… just in someone else’s app.

Alibaba to buy all remaining outstanding shares of local delivery service Ele.me

As expected since February, Alibaba will buy all outstanding shares of Ele.me that it doesn’t already own. Best-known for food deliveries, Ele.me claims to be China’s biggest online delivery and local services platform. In an announcement, Alibaba said the deal values Ele.me at $9.5 billion. Alibaba, which first invested in Ele.me two years ago, and its affiliate Ant Small and Micro Financial Services Group currently hold about 43% of the company’s outstanding voting shares.

This is the latest in a string of investments and acquisitions by Alibaba to expand its physical retail presence as part of its so-called “new retail” strategy to combine e-commerce and offline retail. The company’s goal is to make it easier for users to move (and spend money) between brick-and-mortar stores and Alibaba businesses like Tmall and Taobao. For example, they may view products at pop-up stores and then order them on their smartphones for almost-immediate home delivery.

Ele.me, which will continue to operate under its own brand, is at its heart a logistics technology company. Founded in 2008, it utilizes its logistics system to provide services like Fengniao, an express courier for local deliveries. After the deal is finalized, Alibaba said that founder and chief executive officer Zhang Zhuhao (also known as Mark Zhang) will become chairman of Ele.me and special advisor to Alibaba Group CEO Daniel Zhang on its new retail strategy. Wang Lei, currently vice president of Alibaba Group, will take over as Ele.me’s CEO.

In a press release, Zhang said “Under the leadership of its founder and management team, Ele.me has achieved leading market share in China’s online food delivery and local services sector. Our shared belief that New Retail will create more value for customers and merchants has brought us together. Looking forward, Ele.me can leverage Alibaba’s infrastructure in commerce and
find new synergies with Alibaba’s diverse businesses to add further momentum to the New Retail initiative.”

Bloomberg reported at the end of February that Alibaba planned to buy the rest of Ele.me’s shares from its other investors, including Baidu.

The deal deepens Alibaba’s competition with Tencent, in particular its own local services and delivery platform, Meituan Dianping, which was formed by a merger in 2015. Alibaba previously owned shares in Meituan Dianping, thanks to its investment in Meituan, but began offloading them soon after the merger with Dianping.

In a statement, Alibaba said Ele.me complements its affiliate Koubei, a platform that gives restaurants and stores a way to go online and reach more local customers.

“By combining Ele.me’s online home delivery services with Koubei’s consumer acquisition and engagement capability for a range of restaurants and service establishments, Alibaba will be able to offer an integrated experiences to customers both online and offline,” said the company.

Monarch is a new platform from surgical robot pioneer Frederic Moll

Auris Health (née Auris Surgical Robots) has done a pretty good job flying under the radar, in spite of raising a massive amount of capital and listing one of the key people behind the da Vinci surgical robot among its founders. With FDA clearance finally out of the way, however, the Redwood City-based startup medical startup is ready to start talking.

This week, Auris revealed the Monarch Platform, which swaps the da Vinci’s surgical approach for something far less invasive. The system utilizes the common endoscopy procedure to a insert a flexible robot into hard to reach places inside the human body. A doctor trained on the system uses a video game-style controller to navigate inside, with help from 3D models.

Monarch’s first target is lung cancer, the which tops the list of deadliest cancers. More deaths could be stopped, if doctors were able to catch the disease in its early stages, but the lung’s complex structures, combined with current techniques, make the process difficult. According to the company,  “More than 90-percent of people diagnosed with lung cancer do not survive, in part because it is often found at an advanced stage.”

“A CT scan shows a mass or a lesion,” CEO Frederic Moll tells TechCrunch. “It doesn’t tell you what it is. Then you have to get a piece of lung, and if it’s a small lesion. It isn’t that easy — it can be quite a traumatic procedure. So you’d like to do it a very systematic and minimally invasive fashion. Currently it’s difficult with manual techniques and 40-percent of the time, there is no diagnosis. This is has been a problem for many years and [inhibits] the ability of a clinician to diagnose and treat early-stage cancer.

Auris was founded half a dozen years ago, in which time the company has managed to raise a jaw-dropping $500 million, courtesy of Mithril Capital Management, Lux Capital, Coatue Management and Highland Capital. The company says the large VC raise and long runway were necessary factors in building its robust platform.

“We are incredibly fortunate to have an investor base that is supportive of our vision and committed to us for the long-term,” CSO Josh DeFonzo tells TechCrunch. “The investments that have been made in Auris are to support both the development of a very robust product pipeline, as well as successful clinical adoption of our technology to improve patient outcomes.”

With that funding and FDA approval for Monarch out of the way, the company has an aggressive timeline. Moll says Auris is hoping to bring the system to hospitals and outpatient centers by the end of the year. And once it’s out in the wild, Monarch’s disease detecting capabilities will eventually extend beyond lung cancer.

“We have developed what we call a platform technology,” says Moll. “Bronchoscopy is the first application, but this platform will do other robotic endoscopies.”

Tinder owner Match is suing Bumble over patents

Drama is heating up between the dating apps.

Tinder, which is owned by Match Group, is suing rival Bumble, alleging patent infringement and misuse of intellectual property.

The suit alleges that Bumble “copied Tinder’s world-changing, card-swipe-based, mutual opt-in premise.” The lawsuit also accuses Tinder-turned-Bumble employees Chris Gulczynski and Sarah Mick of copying elements of the design. “Bumble has released at least two features that its co-founders learned of and developed confidentially while at Tinder in violation of confidentiality agreements.”

It’s complicated because Bumble was founded by CEO Whitney Wolfe, who was also a co-founder at Tinder. She wound up suing Tinder for sexual harassment. 

Yet Match hasn’t let the history stop it from trying to buy hotter-than-hot Bumble anyway. As Axios’s Dan Primack pointed out, this lawsuit may actually try to force the hand for a deal. Bumble is majority-owned by Badoo, a dating company based in London and Moscow.

(It wouldn’t be the first time a dating site sued another and then bought it. JDate did this with JSwipe.)

Match provided the following statement:

Match Group has invested significant resources and creative expertise in the development of our industry-leading suite of products. We are committed to protecting the intellectual property and proprietary data that defines our business. Accordingly, we are prepared when necessary to enforce our patents and other intellectual property rights against any operator in the dating space who infringes upon those rights.

I have, um, tested out both Tinder and Bumble and they are similar. Both let you swipe on nearby users with limited information like photos, age, school and employer. And users can only chat if both opt-in.

However, Tinder has developed more of the reputation as a “hookup” app and Bumble doesn’t seem to have quite the same image, largely because it requires women to initiate the conversation, thus setting the tone.

As TechCrunch’s Sarah Perez pointed out recently, “according to App Annie, Tinder is more than 10x bigger in terms of monthly users and 7x bigger in terms of downloads in the last 12 months, versus Bumble.”

We’ve reached out to Bumble for comment.

Revolut broke even in December, now has 1.5 million customers

 Fintech startup Revolut can’t stop and won’t stop growing. The company has had an amazing month of December with a huge increase in the total volume of transactions and signups. Because of that, Revolut broke even in December for the first time ever. The company told me that it wasn’t just a lucky month and January is looking good as well. Revolut announced that it had reached… Read More

The Rise of the Rest seed fund announces its first group of investments

 The Rise of the Rest seed fund’s first round of startup investments cover eight states that are usually overlooked by tech investors, including Kentucky, South Carolina and Ohio. The $150 million fund was launched in December by Steve Case and J.D. Vance, with backing from many of America’s most influential businesspeople, to support tech ecosystems outside of Silicon Valley, New… Read More