Nov
20
2020
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Onit acquires legal startup McCarthyFinch to inject AI into legal workflows

Onit, a workflow software company based in Houston, announced this week that it has acquired 2018 TechCrunch Disrupt Battlefield alum McCarthyFinch. Onit intends to use the startup’s AI skills to beef up its legal workflow software offerings.

The companies did not share the purchase price.

After evaluating a number of companies in the space, Onit focused on McCarthyFinch, which gives it an artificial intelligence component the company’s legal workflow software had been lacking. “We evaluated about a dozen companies in the AI space and dug in deep on six of them. McCarthyFinch stood out from the pack. They had the strongest technology and the strongest team,” Eric M. Elfman, CEO and co-founder of Onit told TechCrunch.

The company intends to inject that AI into its existing Aptitude workflow platform. “Part of what really got me excited about McCarthyFinch was the very first conversation I had with their CEO, Nick Whitehouse. They considered themselves an AI platform, which complemented our approach and our workflow automation platform, Aptitude,” Elfman said.

McCarthyFinch CEO and co-founder Whitehouse says the startup was considering whether to raise more money or look at being acquired earlier this year when Onit made its interest known. At first, he wasn’t really interested in being acquired and was hoping to go the partner route, but over time that changed.

“I was very much on the partner track, and was probably quite dismissive to begin with because I was quite focused on that partner strategy. But as we talked, all egos aside, it just made sense [to move to acquisition talks],” Whitehouse said.

The talks heated up in May and the deal officially closed last week. With Onit headquartered in Houston and McCarthyFinch in New Zealand the negotiations and meetings all happened on Zoom. The two companies’ principals have never met in person. The plan is for McCarthyFinch to stay in place, even after the pandemic ends. Whitehouse expects to make a trip to Houston whenever it is safe to do so.

Whitehouse says his experience with Battlefield has had a huge influence on him. “Just the insights that we got through Battlefield, the coaching that we got, those things have stuck with me and they’ll stick with me for the rest of my life,” he said.

The company had 45 customers and 17 employees at the time of the acquisition. It raised US$5 million along the way. Now it becomes part of Onit as the journey continues.

Nov
19
2020
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FireEye acquires Respond Software for $186M, announces $400M investment

The security sector is ever frothy and acquisitive. Just last week Palo Alto Networks grabbed Expanse for $800 million. Today it was FireEye’s turn, snagging Respond Software, a company that helps customers investigate and understand security incidents, while reducing the need for highly trained (and scarce) security analysts. The deal has closed, according to the company.

FireEye had its eye on Respond’s Analyst product, which it plans to fold into its Mandiant Solutions platform. Like many companies today, FireEye is focused on using machine learning to help bolster its solutions and bring a level of automation to sorting through the data, finding real issues and weeding out false positives. The acquisition gives them a quick influx of machine learning-fueled software.

FireEye sees a product that can help add speed to its existing tooling. “With Mandiant’s position on the front lines, we know what to look for in an attack, and Respond’s cloud-based machine learning productizes our expertise to deliver faster outcomes and protect more customers,” Kevin Mandia, FireEye CEO said in a statement announcing the deal.

Mike Armistead, CEO at Respond, wrote in a company blog post that today’s acquisition marks the end of a four-year journey for the startup, but it believes it has landed in a good home with FireEye. “We are proud to announce that after many months of discussion, we are becoming part of the Mandiant Solutions portfolio, a solution organization inside FireEye,” Armistead wrote.

While FireEye was at it, it also announced a $400 million investment from Blackstone Tactical Opportunities fund and ClearSky (an investor in Respond), giving the public company a new influx of cash to make additional moves like the acquisition it made today.

It didn’t come cheap. “Under the terms of its investment, Blackstone and ClearSky will purchase $400 million in shares of a newly designated 4.5% Series A Convertible Preferred Stock of FireEye (the ‘Series A Preferred’), with a purchase price of $1,000 per share. The Series A Preferred will be convertible into shares of FireEye’s common stock at a conversion price of $18.00 per share,” the company explained in a statement. The stock closed at $14.24 today.

Respond, which was founded in 2016, raised $32 million, including a $12 million Series A in 2017 led by CRV and Foundation Capital and a $20 million Series B led by ClearSky last year, according to Crunchbase data.

Nov
19
2020
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Amazon S3 Storage Lens gives IT visibility into complex S3 usage

As your S3 storage requirements grow, it gets harder to understand exactly what you have, and this especially true when it crosses multiple regions. This could have broad implications for administrators, who are forced to build their own solutions to get that missing visibility. AWS changed that this week when it announced a new product called Amazon S3 Storage Lens, a way to understand highly complex S3 storage environments.

The tool provides analytics that help you understand what’s happening across your S3 object storage installations, and to take action when needed. As the company describes the new service in a blog post, “This is the first cloud storage analytics solution to give you organization-wide visibility into object storage, with point-in-time metrics and trend lines as well as actionable recommendations,” the company wrote in the post.

Amazon S3 Storage Lens Console

Image Credits: Amazon

The idea is to present a set of 29 metrics in a dashboard that help you “discover anomalies, identify cost efficiencies and apply data protection best practices,” according to the company. IT administrators can get a view of their storage landscape and can drill down into specific instances when necessary, such as if there is a problem that requires attention. The product comes out of the box with a default dashboard, but admins can also create their own customized dashboards, and even export S3 Lens data to other Amazon tools.

For companies with complex storage requirements, as in thousands or even tens of thousands of S3 storage instances, who have had to kludge together ways to understand what’s happening across the systems, this gives them a single view across it all.

S3 Storage Lens is now available in all AWS regions, according to the company.

Nov
19
2020
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Datafold raises seed from NEA to keep improving the lives of data engineers

Data engineering is one of these new disciplines that has gone from buzzword to mission critical in just a few years. Data engineers design and build all the connections between sources of raw data (your payments information or ad-tracking data or what have you) and the ultimate analytics dashboards used by business executives and data scientists to make decisions. As data has exploded, so has their challenge of doing this key work, which is why a new set of tools has arrived to make data engineering easier, faster and better than ever.

One of those tools is Datafold, a YC-backed startup I covered just a few weeks ago as it was preparing for its end-of-summer Demo Day presentation.

Well, that Demo Day presentation and the company’s trajectory clearly caught the eyes of investors, since the startup locked in $2.1 million in seed funding from NEA, the company announced this morning.

As I wrote back in August:

With Datafold, changes made by data engineers in their extractions and transformations can be compared for unintentional changes. For instance, maybe a function that formerly returned an integer now returns a text string, an accidental mistake introduced by the engineer. Rather than wait until BI tools flop and a bunch of alerts come in from managers, Datafold will indicate that there is likely some sort of problem, and identify what happened.

Definitely read our profile if you want to learn more about the product and origin story.

Not a whole heck of a lot has changed over the past few weeks (some new features, some new customers), but with more money in its billfold, Datafold is going to keep on growing, hiring and taking on the world of data engineering.

Nov
18
2020
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Will Zoom Apps be the next hot startup platform?

When Zoom announced Zapps last month — the name has since been wisely changed to Zoom Apps — VC Twitter immediately began speculating that Zoom could make the leap from successful video conferencing service to becoming a launching pad for startup innovation. It certainly caught the attention of former TechCrunch writer and current investor at Signal Fire Josh Constine, who tweeted that “Zoom’s new ‘Zapps’ app platform will crush or king-make lots of startups.”

As Zoom usage exploded during the pandemic and it became a key tool for business and education, the idea of using a video conferencing platform to build a set of adjacent tooling makes a lot of sense. While the pandemic will come to an end, we have learned enough about remote work that the need for tools like Zoom will remain long after we get the all-clear to return to schools and offices.

We are already seeing promising startups like Mmhmm, Docket and ClassEdu built with Zoom in mind, and these companies are garnering investor attention. In fact, some investors believe Zoom could be the next great startup ecosystem.

Moving beyond video conferencing

Salesforce paved the way for Zoom more than a decade ago when it opened up its platform to developers and later launched the AppExchange as a distribution channel. Both were revolutionary ideas at the time. Today we are seeing Zoom building on that.

Jim Scheinman, founding managing partner at Maven Ventures and an early Zoom investor (who is credited with naming the company) says he always saw the service as potentially a platform play. “I’ve been saying publicly, before anyone realized it, that Zoom is the next great open platform on which to build billion-dollar businesses,” Scheinman told me.

He says he talked with Zoom leadership about opening up the platform to external developers several years ago before the IPO. It wasn’t really a priority at that point, but COVID-19 pushed the idea to the forefront. “Post-IPO and COVID, with the massive growth of Zoom on both the enterprise and consumer side, it became very clear that an app marketplace is now a critical growth area for Zoom, which creates a huge opportunity for nascent startups to scale,” he said.

Jason Green, founder and managing director at Emergence Capital (another early investor in Zoom and Salesforce) agreed: “Zoom believes that adding capabilities to the core Zoom platform to make it more functional for specific use cases is an opportunity to build an ecosystem of partners similar to what Salesforce did with AppExchange in the past.”

Building the platform

Before a platform can succeed with developers, it requires a critical mass of users, a bar that Zoom has clearly passed. It also needs a set of developer tools to connect to the various services on the platform. Then the substantial user base acts as a ready market for the startup. Finally, it requires a way to distribute those creations in a marketplace.

Zoom has been working on the developer components and brought in industry veteran Ross Mayfield, who has been part of two collaboration startups in his career, to run the developer program. He says that the Zoom Apps development toolset has been designed with flexibility to allow developers to build applications the way that they want.

For starters, Zoom has created WebViews, a way to embed functionality into an application like Zoom. To build WebViews in Zoom, the company created a JS Kit, which in combination with existing Zoom APIs enables developers to build functionality inside the Zoom experience. “So we’re giving developers a lot of flexibility in what experience they create with WebViews plus using our very rich set of API’s that are part of the existing platform and creating some new API’s to create the experience,” he said.

Nov
18
2020
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IBM is acquiring APM startup Instana as it continues to expand hybrid cloud vision

As IBM transitions from software and services to a company fully focussed on hybrid cloud management, it announced  its intention to buy Instana, an applications performance management startup with a cloud native approach that fits firmly within that strategy.

The companies did not reveal the purchase price.

With Instana, IBM can build on its internal management tools, giving it a way to monitor containerized environments running Kubernetes. It hopes by adding the startup to the fold it can give customers a way to manage complex hybrid and multi-cloud environments.

“Our clients today are faced with managing a complex technology landscape filled with mission-critical applications and data that are running across a variety of hybrid cloud environments – from public clouds, private clouds and on-premises,” Rob Thomas, senior vice president for cloud and data platform said in a statement. He believes Instana will help ease that load, while using machine learning to provide deeper insights.

At the time of the company’s $30 million Series C in 2018, TechCrunch’s Frederic Lardinois described the company this way. “What really makes Instana stand out is its ability to automatically discover and monitor the ever-changing infrastructure that makes up a modern application, especially when it comes to running containerized microservices.” That would seem to be precisely the type of solution that IBM would be looking for.

As for Instana, the founders see a good fit for the two companies, especially in light of the Red Hat acquisition in 2018 that is core to IBM’s hybrid approach. “The combination of Instana’s next generation APM and Observability platform with IBM’s Hybrid Cloud and AI technologies excited me from the day IBM approached us with the idea of joining forces and combining our technologies,” CEO Mirko Novakovic wrote in a blog post announcing the deal.

Indeed, in a recent interview IBM CEO Arvind Krishna told CNBC’s Jon Fortt, that they are betting the farm on hybrid cloud management with Red Hat at the center. When you combine that with the decision to spin out the company’s managed infrastructure services business, this purchase shows that they intend to pursue every angle

“The Red Hat acquisition gave us the technology base on which to build a hybrid cloud technology platform based on open-source, and based on giving choice to our clients as they embark on this journey. With the success of that acquisition now giving us the fuel, we can then take the next step, and the larger step, of taking the managed infrastructure services out. So the rest of the company can be absolutely focused on hybrid cloud and artificial intelligence,” Krishna told CNBC.

Instana, which is based in Chicago with offices in Munich, was founded in 2015 in the early days of Kubernetes and the startup’s APM solution has evolved to focus more on the needs of monitoring in a cloud native environment. The company raised $57 million along the way with the most recent round being that Series C in 2018.

The deal per usual is subject to regulatory approvals, but the company believes it should close in the next few months.

Nov
18
2020
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Abacus.AI raises another $22M and launches new AI modules

AI startup RealityEngines.AI changed its name to Abacus.AI in July. At the same time, it announced a $13 million Series A round. Today, only a few months later, it is not changing its name again, but it is announcing a $22 million Series B round, led by Coatue, with Decibel Ventures and Index Partners participating as well. With this, the company, which was co-founded by former AWS and Google exec Bindu Reddy, has now raised a total of $40.3 million.

Abacus co-founder Bindu Reddy, Arvind Sundararajan and Siddartha Naidu. Image Credits: Abacus.AI

In addition to the new funding, Abacus.AI is also launching a new product today, which it calls Abacus.AI Deconstructed. Originally, the idea behind RealityEngines/Abacus.AI was to provide its users with a platform that would simplify building AI models by using AI to automatically train and optimize them. That hasn’t changed, but as it turns out, a lot of (potential) customers had already invested into their own workflows for building and training deep learning models but were looking for help in putting them into production and managing them throughout their lifecycle.

“One of the big pain points [businesses] had was, ‘look, I have data scientists and I have my models that I’ve built in-house. My data scientists have built them on laptops, but I don’t know how to push them to production. I don’t know how to maintain and keep models in production.’ I think pretty much every startup now is thinking of that problem,” Reddy said.

Image Credits: Abacus.AI

Since Abacus.AI had already built those tools anyway, the company decided to now also break its service down into three parts that users can adapt without relying on the full platform. That means you can now bring your model to the service and have the company host and monitor the model for you, for example. The service will manage the model in production and, for example, monitor for model drift.

Another area Abacus.AI has long focused on is model explainability and de-biasing, so it’s making that available as a module as well, as well as its real-time machine learning feature store that helps organizations create, store and share their machine learning features and deploy them into production.

As for the funding, Reddy tells me the company didn’t really have to raise a new round at this point. After the company announced its first round earlier this year, there was quite a lot of interest from others to also invest. “So we decided that we may as well raise the next round because we were seeing adoption, we felt we were ready product-wise. But we didn’t have a large enough sales team. And raising a little early made sense to build up the sales team,” she said.

Reddy also stressed that unlike some of the company’s competitors, Abacus.AI is trying to build a full-stack self-service solution that can essentially compete with the offerings of the big cloud vendors. That — and the engineering talent to build it — doesn’t come cheap.

Image Credits: Abacus.AI

It’s no surprise then that Abacus.AI plans to use the new funding to increase its R&D team, but it will also increase its go-to-market team from two to ten in the coming months. While the company is betting on a self-service model — and is seeing good traction with small- and medium-sized companies — you still need a sales team to work with large enterprises.

Come January, the company also plans to launch support for more languages and more machine vision use cases.

“We are proud to be leading the Series B investment in Abacus.AI, because we think that Abacus.AI’s unique cloud service now makes state-of-the-art AI easily accessible for organizations of all sizes, including start-ups,” Yanda Erlich, a p artner at Coatue Ventures  told me. “Abacus.AI’s end-to-end autonomous AI service powered by their Neural Architecture Search invention helps organizations with no ML expertise easily deploy deep learning systems in production.”

 

Nov
18
2020
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Grouparoo snares $3M seed to build open source customer data integration framework

Creating a great customer experience requires a lot of data from a variety of sources, and pulling that disparate data together has captured the attention of companies and big and small from Salesforce and Adobe to Segment and Klaviyo. Today, Grouparoo, a new startup from three industry vets is the next company up with an open source framework designed to make it easier for developers to access and make use of customer data.

The company announced a $3 million seed investment led by Eniac Ventures and Fuel Capital with participation from Hack VC, Liquid2, SCM Advisors and several unnamed angel investors.

Grouparoo CEO and co-founder Brian Leonard says that his company has created this open source customer data framework based on his own experience and difficulty getting customer data into the various tools he has been using since he was technical founder at TaskRabbit in 2008.

“We’re an open source data framework that helps companies easily sync their customer data from their database or warehouse to all of the SaaS tools where they need it. [After you] install it, you teach it about your customers, like what properties are important in each of those profiles. And then it allows you to segment them into the groups that matter,” Leonard explained.

This could be something like high earners in San Francisco along with names and addresses. Grouparoo can grab this data and transfer it to a marketing tool like Marketo or Zendesk and these tools could then learn who your VIP customers are.

For now the company is just the three founders Leonard, CTO Evan Tahler and COO Andy Jih, and while he wasn’t ready to commit to how many people he might hire in the next 12 months, he sees it being less than 10. At this early stage, the three co-founders have already been considering how to build a diverse and inclusive company, something he helped contribute to while he was at TaskRabbit.

“So, coming from [what we built at TaskRabbit] and starting something new, it’s important to all three of us to start [building a diverse company] from the beginning, and especially combined with this notion that we’re building something open source. We’ve been talking a lot about being open about our culture and what’s important to us,” he said.

TaskRabbit also comes into play in their investment where Fuel GP Leah Solivan was also founder of TaskRabbit. “Grouparoo is solving a real and acute issue that companies grapple with as they scale — giving every member of the team access to the data they need to drive revenue, acquire customers and improve real-time decision making. Brian, Andy and Evan have developed an elegant solution to an issue we experienced firsthand at TaskRabbit,” she said.

For now the company is taking an open source approach to build a community around the tool. It is still pre-revenue, but the plan is to find a way to build something commercial on top of the open source tooling. They are considering an open core license where they can add features or support or offer the tool as a service. Leonard says that is something they intend to work out in 2021.

Nov
18
2020
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CloudBolt announces $35M Series B debt/equity investment to help manage hybrid cloud

CloudBolt, a Bethesda, Maryland startup that helps companies manage hybrid cloud environments, announced a $35 million Series B investment today. It was split between $15 million in equity investment and $20 million in debt.

Insight Partners provided the equity side of the equation, while Hercules Capital and Bridge Bank supplied the venture debt. The company has now raised more than $61 million in equity and debt, according to Crunchbase data.

CEO Jeff Kukowski says that his company helps customers with cloud and DevOps management including cost control, compliance and security. “We help [our customers] take advantage of the fact that most organizations are already hybrid cloud, multi cloud and/or multi tool. So you have all of this innovation happening in the world, and we make it easier for them to take advantage of it,” he said.

As he sees it, the move to cloud and DevOps, which was supposed to simplify everything, has actually created new complexity, and the tools his company sells are designed to help companies reduce some of that added complexity. What they do is provide a way to automate, secure and optimize their workloads, regardless of the tools or approach to infrastructure they are using.

The company closed the funding round at the end of last quarter and put it to work with a couple of acquisitions — Kumolus and SovLabs — to help accelerate and fill in the road map. Kumolus, which was founded in 2011 and raised $1.7 million, according to Crunchbase, really helps CloudBolt extend its vision from managing on premises to the public cloud.

SovLabs was an early-stage startup working on a very specific problem creating a framework for extending VMware automation.

CloudBolt currently has 170 employees. While Kukowski didn’t want to get specific about the number of additional employees he might be adding to that in the next 12 months, he says that as he does, he thinks about diversity in three ways.

“One is just pure education. So we as a company regularly meet and educate on issues around inclusion, social justice and diversity. We also recruit with those ideas in mind. And then we also have a standing committee within the company that continues to look at issues not only for discussion, but quite frankly for investment in terms of time and fundraising,” he said.

Kukowski says that going remote because of COVID has allowed the company to hire from anywhere, but he still looks forward to a time when he can meet face-to-face with his employees and customers, and sees that as always being part of his company’s culture.

CloudBolt was founded in 2012 and has around 200 customers. Kukowski says that the company is growing between 40% and 50% year over year, although he wouldn’t share specific revenue numbers.

Nov
17
2020
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Marketing automation platform Klaviyo scores $200M Series C on $4.15B valuation

Boston-based marketing automation firm Klaviyo wants to change the way marketers interact with data, giving them direct access to their data and their customers. It believes that makes it easier to customize the messages and produce better results. Investors apparently agree, awarding the company a $200 million Series C on a hefty $4.15 billion valuation today.

The round was led by Accel with help from Summit Partners. It comes on the heels of last year’s $150 million Series B, and brings the total raised to $385.5 million, according the company. Accel’s Ping Li will also be joining the company board under the terms of today’s announcement.

Marketing automation and communication takes on a special significance as we find ourselves in the midst of this pandemic and companies need to find ways to communicate in meaningful ways with customers who can’t come into brick and mortar establishments. Company CEO and co-founder Andrew Bialecki says that his company’s unique use of data helps in this regard.

“I think our success is because we are a hybrid customer data and marketing platform. We think about what it takes to create these owned experiences. They’re very contextual and you need all of that customer data, not some of it, all of it, and you need that to be tightly coupled with how you’re building customer experiences,” Bialecki explained.

Andrew Bialecki, CEO and co-founder at Klaviyo

Andrew Bialecki, CEO and co-founder at Klaviyo Image Credits: Klaviyo

He believes that by providing a platform of this scope that combines the data, the ability to customize messages and the use of machine learning to keep improving that, it will help them compete with the largest platforms. In fact his goal is to help companies understand that they don’t have to give up their customer data to Amazon, Google and Facebook.

“The flip side of that is growing through Amazon where you give up all your customer data, or Facebook or Google where you kind of are delegated to wherever their algorithms decide where you get to show up,” he said. With Klaviyo, the company retains its own data, and Ping Li, who is leading the investment at Accel says that it where the e-commerce market is going.

“So the question is, is there a tool that allows you to do that as easily as going on Facebook and Google, and I think that’s the vision and the promise that Klaviyo is delivering on,” Li said.  He believes that this will allow their customers to actually build that kind of fidelity with their customers by going directly to them, instead of through a third-party intermediary.

The company has seen some significant success with 50,000 customers in 125 countries along with that lofty valuation. The customer number has doubled year over year, even during the economic malaise brought on by the pandemic.

Today, the company has 500 employees with plans to double that in the next year. As he grows his company, Bialecki believes diversity is not just the right thing to do, it’s also smart business. “I think the competitive advantages that tech companies are going to have going forward, especially for the tech companies that are not the leaders today, but [could be] leaders in the coming decades, it’s because they have the most diverse teams and inclusive culture and those are both big focuses for us,” he said.

As they move forward flush with this cash, the company wants to continue to build out the platform, giving customers access to a set of tools that allow them to know their own customers on an increasingly granular level, while delivering more meaningful interactions. “It’s all about accelerating product development and getting into new markets,” Bialecki said. They certainly have plenty of runway to do that now.

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