May
20
2020
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Directly, which taps experts to train chatbots, raises $11M, closes out Series B at $51M

Directly, a startup whose mission is to help build better customer service chatbots by using experts in specific areas to train them, has raised more funding as it opens up a new front to grow its business: APIs and a partner ecosystem that can now also tap into its expert network. Today Directly is announcing that it has added $11 million to close out its Series B at $51 million (it raised $20 million back in January of this year, and another $20 million as part of the Series B back in 2018).

The funding is coming from Triangle Peak Partners and Toba Capital, while its previous investors in the round included strategic backers Samsung NEXT and Microsoft’s M12 Ventures (who are both customers, alongside companies like Airbnb), as well as Industry Ventures, True Ventures, Costanoa Ventures and Northgate. (As we reported when covering the initial close, Directly’s valuation at that time was at $110 million post-money, and so this would likely put it at $120 million or higher, given how the business has expanded.)

While chatbots have now been around for years, a key focus in the tech world has been how to help them work better, after initial efforts saw so many disappointing results that it was fair to ask whether they were even worth the trouble.

Directly’s premise is that the most important part of getting a chatbot to work well is to make sure that it’s trained correctly, and its approach to that is very practical: find experts both to troubleshoot questions and provide answers.

As we’ve described before, its platform helps businesses identify and reach out to “experts” in the business or product in question, collect knowledge from them, and then fold that into a company’s AI to help train it and answer questions more accurately. It also looks at data input and output into those AI systems to figure out what is working, and what is not, and how to fix that, too.

The information is typically collected by way of question-and-answer sessions. Directly compensates experts both for submitting information as well as to pay out royalties when their knowledge has been put to use, “just as you would in traditional copyright licensing in music,” its co-founder Antony Brydon explained to me earlier this year.

It can take as little as 100 experts, but potentially many more, to train a system, depending on how much the information needs to be updated over time. (Directly’s work for Xbox, for example, used 1,000 experts but has to date answered millions of questions.)

Directly’s pitch to customers is that building a better chatbot can help deflect more questions from actual live agents (and subsequently cut operational costs for a business). It claims that customer contacts can be reduced by up to 80%, with customer satisfaction by up to 20%, as a result.

What’s interesting is that now Directly sees an opportunity in expanding that expert ecosystem to a wider group of partners, some of which might have previously been seen as competitors. (Not unlike Amazon’s AI powering a multitude of other businesses, some of which might also be in the market of selling the same services that Amazon does).

The partner ecosystem, as Directly calls it, use APIs to link into Directly’s platform. Meya, Percept.ai, and SmartAction — which themselves provide a range of customer service automation tools — are three of the first users.

“The team at Directly have quickly proven to be trusted and invaluable partners,” said Erik Kalviainen, CEO at Meya, in a statement. “As a result of our collaboration, Meya is now able to take advantage of a whole new set of capabilities that will enable us to deliver automated solutions both faster and with higher resolution rates, without customers needing to deploy significant internal resources. That’s a powerful advantage at a time when scale and efficiency are key to any successful customer support operation.”

The prospect of a bigger business funnel beyond even what Directly was pulling in itself is likely what attracted the most recent investment.

“Directly has established itself as a true leader in helping customers thrive during these turbulent economic times,” said Tyler Peterson, Partner at Triangle Peak Partners, in a statement. “There is little doubt that automation will play a tremendous role in the future of customer support, but Directly is realizing that potential today. Their platform enables businesses to strike just the right balance between automation and human support, helping them adopt AI-powered solutions in a way that is practical, accessible, and demonstrably effective.”

In January, Mike de la Cruz, who took over as CEO at the time of the funding announcement, said the company was gearing up for a larger Series C in 2021. It’s not clear how and if that will be impacted by the current state of the world. But in the meantime, as more organizations are looking for ways to connect with customers outside of channels that might require people to physically visit stores, or for employees to sit in call centres, it presents a huge opportunity for companies like this one.

“At its core, our business is about helping customer support leaders resolve customer issues with the right mix of automation and human support,” said de la Cruz in a statement. “It’s one thing to deliver a great product today, but we’re committed to ensuring that our customers have the solutions they need over the long term. That means constantly investing in our platform and expanding our capabilities, so that we can keep up with the rapid pace of technological change and an unpredictable economic landscape. These new partnerships and this latest expansion of our recent funding round have positioned us to do just that. We’re excited to be collaborating with our new partners, and very thankful to all of our investors for their support.”

May
20
2020
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Identity management startup Truework raises $30M to help you verify your work history

As organizations look for safe and efficient ways of running their services in the new global paradigm of increased social distancing, a startup that has built a platform to help people verify their work details in a secure way is announcing a round of growth funding.

Truework, which provides a way for banks, apartment-rental agencies, and others to check the employment details of an applicant in a quick and secure manner online, has raised $30 million, money that CEO and co-founder Ryan Sandler said in an interview that it would use both grow its existing business, as well to explore adding more details — both via its own service and via third-party partnerships — to the identity information that it shares.

The Series B is being led by Activant Capital — a VC that focuses on B2B2C startups — with participation also from Sequoia Capital and Khosla Ventures, as well as a number of high profile execs and entrepreneurs — Jeff Weiner (LinkedIn); Tom Gonser (Docusign); William Hockey (Plaid); and Daniel Yanisse (Checkr) among them.

The LinkedIn connection is an interesting one. Both Sandler and co-founder Victor Kabdebon were engineers at LinkedIn working on profile and improving the kind of data that LinkedIn sources on its users (the third co-founder, Ethan Winchell, previously worked elsewhere), and while Sandler tells me that the idea for Truework came to them after both left the company, he sees LinkedIn “as a potential partner here,” so watch this space.

The problem that Truework is aiming to solve is the very clunky, and often insecure, nature of how organizations typically verify an individual’s employment information. Details about salary and where you work, and the job you do, are typically essential for larger financial transactions, whether it’s securing a mortgage or another financing loan, or renting an apartment, or for others who might need to verify that information for other purposes, such as staffing agencies.

Typically that kind of information gathering is time-consuming both to reach out to get and to confirm (Sandler cites statistics that say on average an HR person spends over 1,000 hours annually answering questions like these). And some of the systems that have been put in place to do that work — specifically consumer reporting agencies — have been proven not be as watertight in their security as you would hope.

“Your data is flowing around lots of third party platforms,” Sandler said. “You’re releasing a lot of information about yourself and you don’t know where the data is going and if it’s even accurate.”

Truework’s solution is based around a platform, and now an API, that a company buys into. In turn, it gives its employees the ability to consent to using it. If the employee agrees, Truework sources a worker’s place of employment and salary details. Then when a third party wants to verify that information for the person in question, it uses Truework to do so, rather than contacting the company directly.

Then, when those queries come in, Truework contacts the individual with an email or text about the inquiry, so that he/she can okay (or reject) the request. Truework’s Sandler said that it uses ISO27001, SOC2 Type 1 & 2 protections, but he also confirmed that it does store your data.

Currently the idea is that if you leave your job, your next employer would need to also be a Truework customer in order to update the information it has on you: the startup makes money by charging both larger enterprises to make the platform accessible to employees as well as those organizations that are querying for the information/verifications (small business employers using the platform can use it for free).

Over time, the plan will be to configure a way to update your profiles regardless of where you work.

So far, the concept has seen a lot of traction: there are 20,000 small businesses using the platform, as well as 100 enterprises, with the number of verifiers (its term for those requesting information) now at 40,000. Customers include The College Board, The Real Real, Oscar Health, The Motley Fool, and Tuft & Needle.

While all of this was built at a time before COVID-19, the global health pandemic has highlighted the importance of having more efficient and secure systems for doing work, especially at a time when many people are not in the office.

“Our biggest competitor is the fax machine and the phone call,” Sandler said, “but as companies move to more remote working, no one is manning the phones or fax machines. But these operations still need to happen.” Indeed, he points out that at the end of 2019, Truework had 25,000 verifiers. Nearly doubling its end-user customers speaks to the huge boost in business it has seen in the last five months.

That is part of the reason the company has attracted the investment it has.

“Truework’s platform sits at the center of consumers’ most important transactions and life events – from purchasing a home, to securing a new job,” said Steve Sarracino, founder and partner at Activant Capital, in a statement. “Up until now, the identity verification process has been painful, expensive, and opaque for all parties involved, something we’ve seen first-hand in the mortgage space. Starting with income and employment, Truework is setting the standard for consent-based verifications and unlocking the next wave of the digital economy. We’re thrilled to be partnering with this exceptional team as they continue to scale the platform.” Sarracino is joining the board with this round.

While a big focus in the world of tech right now may be on building more and better ways of connecting goods and services to people in as contact-free a way as possible, the bigger play around identity management has been around for years, and will continue to be a huge part of how the internet develops in the future.

The fax and phone may be the primary tools these days for verifying employment information, but on a more general level, there are companies like Facebook, Google and Apple already playing a big role in how we “log in” and use all kinds of services online. They, along with others focused squarely on the identity and verification space (and Truework works with some of them), and using a myriad of approaches that include biometrics, ‘wallet’-style passports that link to information elsewhere, and more, will all continue to try to make the case for why they might be the most trusted provider of that layer of information, at a time when we may want to share less and especially share less with multiple parties.

That is the bigger opportunity that investors are betting on here.

“The increasing momentum Truework has seen since its founding in 2017 demonstrates the critical need for transformation in this space,” said Alfred Lin, partner at Sequoia, in a statement. “Privacy, especially around identity data, is becoming increasingly top of mind for consumers and how they make transactions online.”

Truework has now raised close to $45 million, and it’s not disclosing its valuation.

May
13
2020
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Startups are transforming global trade in the COVID-19 era

Global trade watchers breathed a sigh of relief on January 15, 2020.

After two years of threats, tariffs and tweets, there was finally a truce in the trade war between the U.S. and China. The agreement signed by President Trump and Chinese Vice Premier Liu He in the Oval Office didn’t resolve all trade tensions and maintained most of the $360 billion in tariffs the administration had put on Chinese goods. But for the first time in months, it looked like manufacturers, importers and shippers could start to put two difficult years behind them.

Then came COVID-19, at first a local disruption in Wuhan, China. Then it spread throughout Hubei province, causing havoc in a concentric circle that eventually engulfed the rest of China, where industrial production fell by more than 13.5% in the first two months of the year. When the virus spread everywhere, chaos ensued: Factories shuttered. Borders closed. Supply chains crumbled.

“It has had a cascading effect through the entire world’s economy,” says Anja Manuel, co-founder and managing partner of Rice, Hadley, Gates & Manuel LLC, an international strategic consulting firm based in Silicon Valley.

The crisis has caused a drastic contraction in global trade; the World Trade Organization estimates trade volumes will fall 13-20% in 2020. And spinning activity back up could be tricky: Even as China starts to get back online, the slowdown there could reduce worldwide exports by $50 billion this year. When factories do reopen, there’s no guarantee whether they will have parts available or empty warehouses, says Manuel, who also serves on the advisory board of Flexport, a shipping logistics startup. “Our supply chains are so tightly-knit and so just-in-time that throw a few wrenches in it like we’ve just done, and it’s going to be really hard to stand it back up again. The idea that we go back to normal the moment we lift restrictions is unlikely, fanciful, even.”

Getting to that new normal, though, is a job that a number of logistics startups are embracing. Already on the rise, companies like Flexport, Haven and Factiv see a global trade crisis as a setback, but also an opportunity to demonstrate the value of their digital platforms in a very much analog industry.

May
05
2020
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Orca Security raises $20M Series A for its multi-cloud security platform

Orca Security, an Israeli cloud security firm that focuses on giving enterprises better visibility into their multi-cloud deployments on AWS, Azure and GCP, today announced that it has raised a $20 million Series A round led by GGV Capital. YL Ventures and Silicon Valley CISO Investments also participated in this round. Together with its seed investment led by YL Ventures, this brings Orca’s total funding to $27 million.

One feature that makes Orca stand out is its ability to quickly provide workload-level visibility without the need for an agent or network scanner. Instead, Orca uses low-level APIs that allow it to gain visibility into what exactly is running in your cloud.

The founders of Orca all have a background as architects and CTOs at other companies, including the likes of Check Point Technologies, as well as the Israeli army’s Unit 8200. As Orca CPO and co-founder Gil Geron told me in a meeting in Tel Aviv earlier this year, the founders were looking for a big enough problem to solve and it quickly became clear that at the core of most security breaches were misconfigurations or the lack of security tools in the right places. “What we deduced is that in too many cases, we have the security tools that can protect us, but we don’t have them in the right place at the right time,” Geron, who previously led a security team at Check Point, said. “And this is because there is this friction between the business’ need to grow and the need to have it secure.”

Orca delivers its solution as a SaaS platform and on top of providing work level visibility into these public clouds, it also offers security tools that can scan for vulnerabilities, malware, misconfigurations, password issues, secret keys in personally identifiable information.

“In a software-driven world that is moving faster than ever before, it’s extremely difficult for security teams to properly discover and protect every cloud asset,” said GGV managing partner Glenn Solomon . “Orca Security’s novel approach provides unparalleled visibility into these assets and brings this power back to the CISO without slowing down engineering.”

Orca Security is barely a year and a half old, but it also counts companies like Flexport, Fiverr, Sisene and Qubole among its customers.

Mar
05
2020
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Nvidia acquires data storage and management platform SwiftStack

Nvidia today announced that it has acquired SwiftStack, a software-centric data storage and management platform that supports public cloud, on-premises and edge deployments.

The company’s recent launches focused on improving its support for AI, high-performance computing and accelerated computing workloads, which is surely what Nvidia is most interested in here.

“Building AI supercomputers is exciting to the entire SwiftStack team,” says the company’s co-founder and CPO Joe Arnold in today’s announcement. “We couldn’t be more thrilled to work with the talented folks at NVIDIA and look forward to contributing to its world-leading accelerated computing solutions.”

The two companies did not disclose the price of the acquisition, but SwiftStack had previously raised about $23.6 million in Series A and B rounds led by Mayfield Fund and OpenView Venture Partners. Other investors include Storm Ventures and UMC Capital.

SwiftStack, which was founded in 2011, placed an early bet on OpenStack, the massive open-source project that aimed to give enterprises an AWS-like management experience in their own data centers. The company was one of the largest contributors to OpenStack’s Swift object storage platform and offered a number of services around this, though it seems like in recent years, it has downplayed the OpenStack relationship as that platform’s popularity has fizzled in many verticals.

SwiftStack lists the likes of PayPal, Rogers, data center provider DC Blox, Snapfish and Verizon (TechCrunch’s parent company) on its customer page. Nvidia, too, is a customer.

SwiftStack notes that it team will continue to maintain existing set of open source tools like Swift, ProxyFS, 1space and Controller.

“SwiftStack’s technology is already a key part of NVIDIA’s GPU-powered AI infrastructure, and this acquisition will strengthen what we do for you,” says Arnold.

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