Apr
17
2019
--

The Exit: an AI startup’s McPivot

Five years ago, Dynamic Yield was courting an investment from The New York Times as it looked to shift how publishers paywalled their content. Last month, Chicago-based fast food king McDonald’s bought the Israeli company for $300 million, a source told TechCrunch, with the purpose of rethinking how people order drive-thru chicken nuggets.

The pivot from courting the grey lady to the golden arches isn’t as drastic as it sounds. In a lot of ways, it’s the result of the company learning to say “no” to certain customers. At least, that’s what Bessemer’s Adam Fisher tells us.

The Exit is a new series at TechCrunch. It’s an exit interview of sorts with a VC who was in the right place at the right time but made the right call on an investment that paid off. 

Fisher

Fisher was Dynamic Yield founder Liad Agmon’s first call when he started looking for funds from institutional investors. Bessemer bankrolled the bulk of a $1.7 million funding round which valued the startup at $5 million pre-money back in 2013. The firm ended up putting about $15 million into Dynamic Yield, which raised ~$85 million in total from backers including Marker Capital, Union Tech Ventures, Baidu and The New York Times.

Fisher and I chatted at length about the company’s challenging rise and how Israel’s tech scene is still being underestimated. Fisher has 11 years at Bessemer under his belt and 14 exits including Wix, Intucell, Ravello and Leaba.

The interview has been edited for length and clarity. 


Saying “No”

Lucas Matney: So, right off the bat, how exactly did this tool initially built for publishers end up becoming something that McDonalds wanted?

Adam Fisher: I mean, the story of Dynamic Yield is unique. Liad, the founder and CEO, he was an entrepreneur in residence in our Herzliya office back in 2011. I’d identified him earlier from his previous company, and I just said, ‘Well, that’s the kind of guy I’d love to work with.’ I didn’t like his previous company, but there was something about his charisma, his technology background, his youth, which I just felt like “Wow, he’s going to do something interesting.” And so when he sold his previous company, coincidentally to another Chicago based company called Sears, I invited him and I think he found it very flattering, so he joined us as an EIR.

And really only at the very end of his residence did he come up with this idea that would become Dynamic Yield. He came about it very much focused on the problem he saw with publishers being outwitted by ad buyers. He felt like all the big publishers really didn’t understand their digital businesses, didn’t understand their users, didn’t understand how performance ad buying was working, and he began to build a product that could dynamically optimize a publisher’s website to maximize revenue, hence the yield … the dynamic yield.

But very quickly, we told him, ‘That’s interesting, but we’re not sure how big that market is. And, you know it’s not always great to sell to those kind of weak customers. Sometimes they’re weak for a reason.’

Apr
03
2019
--

WeWork acquires Managed by Q

Managed by Q, the office management platform based out of New York, has today been acquired by The We Company, formerly known as WeWork.

Financial terms were not disclosed. The WSJ reports that it was a cash and stock deal. Managed by Q, which has 500 employees, will remain as a wholly owned separate entity and CEO Dan Teran will remain following the acquisition to join WeWork leadership.

Upon its latest financing in January, Managed by Q was valued at $249 million, according to PitchBook.

Here’s what Teran had to say in a prepared statement:

We are excited for this incredible opportunity to deepen our commitment to realizing our ambitious vision of building an operating system for the built world. WeWork is uniquely positioned to invest in workplace technology and services, and I look forward to partnering with their team to build more robust products for our clients and create a global platform to help companies push the bounds on our collective potential.

Managed by Q was founded in 2014 with a plan to change the way that offices run. The platform allowed office managers and other decision-makers to handle supply stocking, cleaning, IT support and other non-work related tasks in the office by simply using the Managed by Q dashboard. Managed by Q serves the demand through a combination of in-house operators and third-party vendors and service providers.

Notably, Managed by Q took a different tack than most other logistics companies, employing their operators as W2 workers instead of 1099 contractors. Moreover, Managed by Q offered a stock option plan to operators that gives 5 percent of the company back to those employees.

The company has raised a total of $128.25 million since launch from investors such as GV, RRE and Kapor Capital. Managed by Q currently serves the markets of New York, San Francisco, Los Angeles, Chicago, Boston and Silicon Valley, with plans to aggressively expand following the acquisition, according to the WSJ.

Not only has Managed by Q swiftly matured into a big player in the NY tech scene and Future of Work space, but it has also fostered interesting competition and consolidation within the space. Managed by Q has itself made several acquisitions, including the purchase of NVS (an office space planning and project management service) and Hivy (an internal comms tool to let employees tell office managers what they need).

Mar
18
2019
--

Atlassian acquires AgileCraft for $166M

Atlassian today announced that it has acquired AgileCraft, a service that aims to give enterprises plan their strategic projects and workstreams. The service provides business leaders with additional insights into the current status of technical projects and gives them insights into the bottlenecks, risks and dependencies of these projects. Indeed, the focus of AgileCraft is less on technical teams than on the business teams that support them and help them manage the digital transformation of their businesses.

The price total of the acquisition is about $166 million, with $154 million in cash and the remainder in restricted shares.

“Many leaders are still making mission-critical decisions using their instincts and best guesses instead of data,” said Scott Farquhar, Atlassian’s co-founder and co-CEO, in today’s announcement. “As Atlassian tools spread through organizations, technology leaders need better visibility into work performed by their teams. With AgileCraft joining Atlassian, we believe we’re the best company to help executives align the work across their organization – providing an all-encompassing view that connects strategy, work, and outcomes.”

As the name implies, AgileCraft focuses on the Agile methodology, though it also offers a bit of flexibility there with support for frameworks like SAFe, LeSS, Spotify. It supports pulling in data from tools like Atlassian’s Jira, but also Microsoft’s Team Foundation Server, IBM’s RTC and other services.

Atlassian will continue to operate AgileCraft, which had raised about $10.1 million before the acquisition. as a standalone service. “We will continue to focus relentlessly on our customers’ success,” writes AgileCraft’s founder and CEO Steve Elliott. “We remain dedicated to pioneering enterprise agility and are thrilled to team up with the outstanding people at Atlassian to help our customers thrive.”

Over the years, Atlassian started embracing users and use cases for its tools that go beyond its core tools for development tools. Jira and Confluence are the prime examples for this. Today’s acquisition continues this trend in that AgileCraft aims to bring many of the methodologies that tech teams use to the rest of the company.

“One of the critical roles we play for lots of organizations is in helping drive this kind of digital transformation where we’re really empowering the teams that are building and developing the kind of technology that moves our customers forward,” Atlassian president Jay Simons told me. “AgileCraft basically complements all of that by extending visibility into what teams are using Atlassian products to do up into key stakeholders and leaders in the business that are trying to manage better visibility at a portfolio or program level.”

Simons also stressed that AgileCraft already has very strong integrations into the existing Atlassian tools — and indeed, that was one of the main drivers of the acquisition. He noted that the company plans to improve those and think about additional patterns. “We’ll continue doing what we’re doing,” he said.

Simons also noted that he expects that a lot of Jira customers will now look at AgileCraft as an additional tool in helping the businesses manage their business’s digital transformation.

Atlassian doesn’t typically make a lot of acquisitions. Its pace is close to about one major buy per year. Last year, the company picked up OpsGenie for $295 million. In 2017, it acquired Trello for $425 million, the company’s biggest acquisition to date. Other major products the company acquired include StatusPage, BlueJimp, HipChat and Bitbucket (all the way back in 2010).

Mar
08
2019
--

Okta to acquire workflow automation startup Azuqua for $52.5M

During its earnings report yesterday afternoon, Okta announced it intends to acquire Azuqua, a Seattle, Wash. workflow automation startup, for $52.5 million.

In a blog post announcing the news, Okta co-founder and COO Frederic Kerrest saw the combining of the two companies as a way to move smoothly between applications in a complex workflow without having to constantly present your credentials.

“With Okta and Azuqua, IT teams will be able to use pre-built connectors and logic to create streamlined identity processes and increase operational speed. And, product teams will be able to embed this technology in their own applications alongside Okta’s core authentication and user management technology to build…integrated customer experiences,” Kerrest wrote.

In a modern enterprise, people and work are constantly shifting and moving between applications and services and combining automation software with identity and access management could offer a seamless way to move between them.

This represents Okta’s largest acquisition to-date and follows Stormpath almost exactly two years ago and ScaleFT last July. Taken together, you can see a company that is trying to become a more comprehensive identity platform.

Azuqua, which has raised $16 million since it launched in 2013, appears to have given investors a pretty decent return. When the deal closes, Okta intends to move the Azuqua team to its Bellevue offices, increasing its presence in the Northwest. Okta’s headquarters are in San Francisco. Azuqua customers include Airbnb, McDonald’s, VMware and HubSpot,

Okta was founded in 2009 and raised over $229 million before going public April, 2017.

Feb
27
2019
--

Compass acquires Contactually, a CRM provider to the real estate industry

Compass, the real estate tech platform that is now worth $4.4 billion, has made an acquisition to give its agents a boost when it comes to looking for good leads on properties to sell. It is acquiring Contactually, an AI-based CRM platform designed specifically for the industry, which includes features like linking up a list of homes sold by a brokerage with records of sales in the area and other property indexes to determine which properties might be good targets to tap for future listings.

Contactually had already been powering Compass’s own CRM service that it launched last year, so there is already a degree of integration between the two.

Terms of the deal are not being disclosed. Crunchbase notes that Contactually had raised around $18 million from VCs that included Rally Ventures, Grotech and Point Nine Capital, and it was last valued at around $30 million in 2016, according to PitchBook. From what I understand, the startup had strong penetration in the market, so it’s likely that the price was a bit higher than this previous valuation.

The plan is to bring over all of Contactually’s team of 32 employees, led by Zvi Band, the co-founder and CEO, to integrate the company’s product into Compass’s platform completely. They will report to CTO Joseph Sirosh and head of product Eytan Seidman. It will also mean a bigger operation for Compass in Washington, DC, which is where Contactually had been based.

“The Contactually team has worked for the past 8 years to build a best-in-class CRM that aggregates relationships and automatically documents every touchpoint,” said Band in a statement “We are proud that our investment into machine learning has resulted in new features like Best Time to Email and other data-driven, follow-up recommendations which help agents be more effective in their day-to-day. After working extensively with the Compass team, it was apparent that joining forces would accelerate our missions of building the future of the industry.”

For the time being, customers who are already using the product — and a large number of real estate brokers and agents in the U.S. already were, at prices that ranged from $59/month to $399/month depending on the level of service — will continue their contracts as before.

I suspect that the longer-term plan, however, will be a little different: You have to wonder if agents who compete against Compass would be happy to use a service where their data is being processed by it, and for Compass itself. I would suspect that having this tech for itself would give it an edge over the others.

Compass, I understand from sources, is on track to make $2 billion in revenues in 2019 (its 2018 targets were $1 billion on $34 billion in property sales, and it had previously said it would be doubling that this year). Now in 100 cities, it’s come a long way from its founding in 2012 by Ori Allon and Robert Reffkin.

The bigger picture beyond real estate is that, as with many other analog industries, those who are tackling them with tech-first approaches are sweeping up not only existing business, but in many cases helping the whole market to expand. Contactually, as a tool that can help source potential properties for sale that owners hadn’t previously considered putting on the market, could end up serving that very end for Compass.

The focus on using tech to storm into a legacy industry is also coming at an interesting time. As we’ve pointed out before, the housing market is predicted to cool this year, and that will put the squeeze on agents who do not have strong networks of clients and the tools to maximise whatever opportunities there are out there to list and sell properties.

The likes of Opendoor — which appears to be raising money and inching closer to Compass in terms of valuation — is also trying out a different model, which essentially involves becoming a middle part in the chain, buying properties from sellers and selling them on to buyers, to speed up the process and cut out some of the expenses for the end users. That approach underscores the fact that, while the infusion of technology is an inevitable trend, there will be multiple ways of applying that.

This appears to be Compass’s first full acquisition of a tech startup, although it has made partial acqui-hires in the past.

Feb
12
2019
--

Datadog acquires app testing company Madumbo

Datadog, the popular monitoring and analytics platform, today announced that it has acquired Madumbo, an AI-based application testing platform.

“We’re excited to have the Madumbo team join Datadog,” said Olivier Pomel, Datadog’s CEO. “They’ve built a sophisticated AI platform that can quickly determine if a web application is behaving correctly. We see their core technology strengthening our platform and extending into many new digital experience monitoring capabilities for our customers.”

Paris-based Madumbo, which was incubated at Station F and launched in 2017, offers its users a way to test their web apps without having to write any additional code. It promises to let developers build tests by simply interacting with the site, using the Madumbo test recorder, and to help them build test emails, password and testing data on the fly. The Madumbo system then watches your site and adapts its check to whatever changes you make. This bot also watches for JavaScript errors and other warnings and can be integrated into a deployment script.

The team will join Datadog’s existing Paris office and will work on new products, which Datadog says will be announced later this year. Datadog will phase out the Madumbo platform over the course of the next few months.

“Joining Datadog and bringing Madumbo’s AI-powered testing technology to its platform is an amazing opportunity,” said Gabriel-James Safar, CEO of Madumbo. “We’ve long admired Datadog and its leadership, and are excited to expand the scope of our existing technology by integrating tightly with Datadog’s other offerings.”

Jan
24
2019
--

Microsoft acquires Citus Data

Microsoft today announced that it has acquired Citus Data, a company that focused on making PostgreSQL databases faster and more scalable. Citus’ open-source PostgreSQL extension essentially turns the application into a distributed database and, while there has been a lot of hype around the NoSQL movement and document stores, relational databases — and especially PostgreSQL — are still a growing market, in part because of tools from companies like Citus that overcome some of their earlier limitations.

Unsurprisingly, Microsoft plans to work with the Citus Data team to “accelerate the delivery of key, enterprise-ready features from Azure to PostgreSQL and enable critical PostgreSQL workloads to run on Azure with confidence.” The Citus co-founders echo this in their own statement, noting that “as part of Microsoft, we will stay focused on building an amazing database on top of PostgreSQL that gives our users the game-changing scale, performance, and resilience they need. We will continue to drive innovation in this space.”

PostgreSQL is obviously an open-source tool, and while the fact that Microsoft is now a major open-source contributor doesn’t come as a surprise anymore, it’s worth noting that the company stresses that it will continue to work with the PostgreSQL community. In an email, a Microsoft spokesperson also noted that “the acquisition is a proof point in the company’s commitment to open source and accelerating Azure PostgreSQL performance and scale.”

Current Citus customers include the likes of real-time analytics service Chartbeat, email security service Agari and PushOwl, though the company notes that it also counts a number of Fortune 100 companies among its users (they tend to stay anonymous). The company offers both a database as a service, an on-premises enterprise version and the free open-source edition. For the time being, it seems like that’s not changing, though over time I would suspect that Microsoft will transition users of the hosted service to Azure.

The price of the acquisition was not disclosed. Citus Data, which was founded in 2010 and graduated from the Y Combinator program, previously raised more than $13 million from the likes of Khosla Ventures, SV Angel and Data Collective.

Jan
15
2019
--

Campaign Monitor acquires email enterprise services Sailthru and Liveclicker

CM Group, the organization behind email-centric services like Campaign Monitor and Emma, today announced that it has acquired marketing automation firm Sailthru and the email personalization service Liveclicker. The group did not disclose the acquisition price but noted that the acquisition would bring in about $60 million in additional revenue and 540 new customers, including Bloomberg and Samsung. Both of these acquisitions quietly closed in 2018.

Compared to Sailthru, which had raised a total of about $250 million in venture funding before the acquisition, Liveclicker is a relatively small company that was bootstrapped and never raised any outside funding. Still, Liveclicker managed to attract customers like AT&T, Quicken Loans and TJX Companies by offering them the ability to personalize their email messages and tailor them to their customers.

Sailthru’s product portfolio is also quite a bit broader and includes similar email marketing tools, but also services to personalize mobile and web experiences, as well as tools to predict churn and make other retail-focused predictions.

“Sailthru and Liveclicker are extraordinary technologies capable of solving important marketing problems, and we will be making additional investments in the businesses to further accelerate their growth,” writes Wellford Dillard, CEO of CM Group. “Bringing these brands together makes it possible for us to provide marketers with the ideal solution for their needs as they navigate the complex and rapidly changing environments in which they operate.”

With this acquisition, the CM Group now has 500 employees and 300,000 customers.

Jan
08
2019
--

Daily Crunch: The age of quantum computing is here

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here:

1. IBM unveils its first commercial quantum computer

The 20-qubit system combines the quantum and classical computing parts it takes to use a machine like this for research and business applications into a single package. While it’s worth stressing that the 20-qubit machine is nowhere near powerful enough for most commercial applications, IBM sees this as the first step towards tackling problems that are too complex for classical systems.

2. Apple’s trillion-dollar market cap was always a false idol

Nothing grows forever, not even Apple. Back in August we splashed headlines across the globe glorifying Apple’s brief stint as the world’s first $1 trillion company, but in the end it didn’t matter. Fast-forward four months and Apple has lost more than a third of its stock value, and last week the company lost $75 billion in market cap in a single day.

3. GitHub Free users now get unlimited private repositories

Starting today, free GitHub users will now get unlimited private projects with up to three collaborators. Previously, GitHub had a caveat for its free users that code had to be public if they didn’t pay for the service.

Photo credit: Chesnot/Getty Images

4. Uber’s IPO may not be as eye-popping as we expected

Uber’s public debut later this year is undoubtedly the most anticipated IPO of 2019, but the company’s lofty valuation (valued by some as high as $120 billion) has some investors feeling uneasy.

5. Amazon is getting more serious about Alexa in the car with Telenav deal

Amazon has announced a new partnership with Telenav, a Santa Clara-based provider of connected car services. The collaboration will play a huge role in expanding Amazon’s ability to give drivers relevant information and furthers the company’s mission to bake Alexa into every aspect of your life.

6. I used VR in a car going 90 mph and didn’t get sick

The future of in-vehicle entertainment could be VR. Audi announced at CES that it’s rolling out a new company called Holoride to bring adaptive VR entertainment to cars. The secret sauce here is matching VR content to the slight movements of the vehicle to help those who often get motion sickness.

7. Verizon and T-Mobile call out AT&T over fake 5G labels

Nothing like some CES drama to start your day. AT&T recently shared a shady marketing campaign that labeled its 4G networks as 5G and rivals Verizon and T-Mobile are having none of it.

Oct
03
2018
--

Palo Alto Networks to acquire RedLock for $173 M to beef up cloud security

Palo Alto Networks launched in 2005 in the age of firewalls. As we all know by now, the enterprise expanded beyond the cozy confines of a firewall long ago and vendors like Palo Alto have moved to securing data in the cloud now too. To that end, the company announced its intent to pay $173 million for RedLock today, an early-stage startup that helps companies make sure their cloud instances are locked down and secure.

The cloud vendors take responsibility for securing their own infrastructure, and for the most part the major vendors have done a decent job. What they can’t do is save their customers from themselves and that’s where a company like RedLock comes in.

As we’ve seen time and again, data has been exposed in cloud storage services like Amazon S3, not through any fault of Amazon itself, but because a faulty configuration has left the data exposed to the open internet. RedLock watches configurations like this and warns companies when something looks amiss.

When the company emerged from stealth just a year ago, Varun Badhwar, company founder and CEO told TechCrunch that this is part of Amazon’s shared responsibility model. “They have diagrams where they have responsibility to secure physical infrastructure, but ultimately it’s the customer’s responsibility to secure the content, applications and firewall settings,” Badhwar told TechCrunch last year.

Badhwar speaking in a video interview about the acquisition says they have been focused on helping developers build cloud applications safely and securely, whether that’s Amazon Web Services, Microsoft Azure or Google Cloud Platform. “We think about [RedLock] as guardrails or as bumper lanes in a bowling alley and just not letting somebody get that gutter ball and from a security standpoint, just making sure we don’t deviate from the best practices,” he explained.

“We built a technology platform that’s entirely cloud-based and very quick time to value since customers can just turn it on through API’s, and we love to shine the light and show our customers how to safely move into public cloud,” he added.

The acquisition will also fit nicely with Evident.io, a cloud infrastructure security startup, the company acquired in March for $300 million. Badhwar believes that customers will benefit from Evident’s compliance capabilities being combined with Red Lock’s analytics capabilities to provide a more complete cloud security solution.

RedLock launched in 2015 and has raised $12 million. The $173 million purchase would appear to be a great return for the investors who put their faith in the startup.

Powered by WordPress | Theme: Aeros 2.0 by TheBuckmaker.com