Jan
21
2021
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South African startup Aerobotics raises $17M to scale its AI-for-agriculture platform

As the global agricultural industry stretches to meet expected population growth and food demand, and food security becomes more of a pressing issue with global warming, a startup out of South Africa is using artificial intelligence to help farmers manage their farms, trees, and fruits.

Aerobotics is a South African startup that provides intelligent tools to the world’s agriculture industry. It raised $17 million in an oversubscribed Series B round.

South African consumer internet giant Naspers led the round through its investment arm, Naspers Foundry, investing $5.6 million, according to Aerobotics. Cathay AfricInvest Innovation, FMO: Entrepreneurial Development Bank, and Platform Investment Partners, also participated.

Founded in 2014 by James Paterson and Benji Meltzer, Aerobotics is currently focused on building tools for fruit and tree farmers. Using artificial intelligence, drones and other robotics, its technology helps track and assess the health of these crops, including identifying when trees are sick, tracking pests and diseases, and analytics for better yield management. 

The company has progressed its technology and provides independent and reliable yield estimations and harvest schedules to farmers by collecting and processing both tree and fruit imagery from citrus growers early in the season. In turn, farmers can prepare their stock, predict demand, and ensure their customers have the best quality of produce.

Aerobotics has experienced record growth in the last few years. For one, it claims to have the largest proprietary data set of trees and citrus fruit in the world having processed 81 million trees and more than a million citrus fruit.

The seven-year-old startup is based in Cape Town, South Africa. At a time when many of the startups out of the African continent have focused their attention primarily on identifying and fixing challenges at home, Aerobotics has found a lot of traction for its services abroad, too. It has offices in the U.S., Australia, and Portugal — like Africa, home to other major, global agricultural economies — and operates in 18 countries across Africa, the Americas, Europe, and Australia. 

Image Credits: Aerobotics

Within that, the U.S. is the company’s primary market, and Aerobotics says it has two provisional patents pending in the country, one for systems and methods for estimating tree age and another for systems and methods for predicting yield.  

The company said it plans to use this Series B investment to continue developing more technology and product delivery, both for the U.S. and other markets. 

“We’re committed to providing intelligent tools to optimize automation, minimize inputs and maximize production. We look forward to further co-developing our products with the agricultural industry leaders,” said Paterson, the CEO in a statement.

Once heralded as a frontier for technology centuries ago, the agriculture industry has stalled in that aspect for a long while. However, agritech companies like Aerobotics that support climate-smart agriculture and help farmers have sprung forth trying to take the industry back to its past glory. Investors have taken notice and over the past five years, investments have flowed with breathtaking pace. 

For Aerobotics, it raised $600,000 from 4Di Capital and Savannah Fund as part of its seed round in September 2017. The company then raised a further $4 million in Series A funding in February 2019, led by Nedbank Capital and Paper Plane Ventures.

Naspers Foundry, the lead investor in this Series B round, was launched by Naspers in 2019 as a 1.4 billion rand (~$100 million) fund for tech startups in South Africa. 

Phuthi Mahanyele-Dabengwa, CEO of Naspers South Africa said of the investment, “Food security is of paramount importance in South Africa and the Aerobotics platform provides a positive contribution towards helping to sustain it. This type of tech innovation addresses societal challenges and is exactly the type of early-stage company that Naspers Foundry looks to back.”

Asides Aerobotics, Naspers Foundry has invested in online cleaning service, SweepSouth, and food service platform, Food Supply Network.

Jan
21
2021
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Soci raises $80M for its localized marketing platform

Soci, a startup focused on what it calls “localized marketing,” is announcing that it has raised $80 million in Series D funding.

National and global companies like Ace Hardware, Anytime Fitness, The Hertz Corporation and Nekter Juice Bar use Soci (pronounced soh-shee) to coordinate individual stores as they promote themselves through search, social media, review platforms and ad campaigns. Soci said that in 2020, it brought on more than 100 new customers, representing nearly 30,000 new locations.

Co-founder and CEO Afif Khoury told me that the pandemic was a crucial moment for the platform, with so many businesses “scrambling to find a real solution to connect with local audiences.”

One of the key advantages to Soci’s approach, Khoury said, is to allow the national marketing team to share content and assets so that each location stays true to the “national corporate personality,” while also allowing each location to express  a “local personality.” During the pandemic, businesses could share basic information about “who’s open, who’s not” while also “commiserating and expressing the humanity that’s often missing element from marketing nationally.”

“The result there was businesses that had to close, when they had their grand reopenings, people wanted to support that business,” he said. “It created a sort of bond that hopefully lasts forever.”

Khoury also emphasized that Soci has built a comprehensive platform that businesses can use to manage all their localized marketing, because “nobody wants to have seven different logins to seven different systems, especially at the local level.”

The new funding, he said, will allow Soci to make the platform even more comprehensive, both through acquisitions and integrations: “We want to connect into the CRM, the point-of-sale, the rewards program and take all that data and marry that to our search, social, reviews data to start to build a profile on a customer.”

Soci has now raised a total of $110 million. The Series D was led by JMI Equity, with participation from Ankona Capital, Seismic CEO Doug Winter and Khoury himself.

“All signs point to an equally difficult first few months of this year for restaurants and other businesses dependent on their communities,” said JMI’s Suken Vakil in a statement. “This means there will be a continued need for localized marketing campaigns that align with national brand values but also provide for community-specific messaging. SOCi’s multi-location functionality positions it as a market leader that currently stands far beyond its competitors as the must-have platform solution for multi-location franchises/brands.”

Jan
19
2021
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StackPulse announces $28M investment to help developers manage outages

When a system outage happens, chaos can ensue as the team tries to figure out what’s happening and how to fix it. StackPulse, a new startup that wants to help developers manage these crisis situations more efficiently, emerged from stealth today with a $28 million investment.

The round actually breaks down to a previously unannounced $8 million seed investment and a new $20 million Series A. GGV led the A round, while Bessemer Venture Partners led the seed and also participated in the A. Glenn Solomon at GGV and Amit Karp at Bessemer will join the StackPulse board.

Nobody is immune to these outages. We’ve seen incidents from companies as varied as Amazon and Slack in recent months. The biggest companies like Google, Facebook and Amazon employ site reliability engineers and build customized platforms to help remediate these kinds of situations. StackPulse hopes to put this kind of capability within reach of companies, whose only defense is the on-call developers.

Company co-founder and CEO Ofer Smadari says that in the midst of a crisis with signals coming at you from Slack and PagerDuty and other sources, it’s hard to figure out what’s happening. StackPulse is designed to help sort out the details to get you back to equilibrium as quickly as possible.

First off, it helps identify the severity of the incident. Is it a false alarm or something that requires your team’s immediate attention or something that can be put off for a later maintenance cycle? If there is something going wrong that needs to be fixed right now, StackPulse can not only identify the source of the problem, but also help fix it automatically, Smadari explained.

After the incident has been resolved, it can also help with a post-mortem to figure out what exactly went wrong by pulling in all of the alert communications and incident data into the platform.

As the company emerges from stealth, it has some early customers, and 35 employees based in Portland, Oregon and Tel Aviv. Smadari says that he hopes to have 100 employees by the end of this year. As he builds the organization, he is thinking about how to build a diverse team for a diverse customer base. He believes that people with diverse backgrounds build a better product. He adds that diversity is a top level goal for the company, which already has an HR leader in place to help.

Glenn Solomon from GGV, who will be joining the company board, saw a strong founding team solving a big problem for companies and wanted to invest. “When they described the vision for the product they wanted to build, it made sense to us,” he said.

Customers are impatient with down time and Solomon sees developers on the front line trying to solve these issues. “Performance is more important than ever. When there is downtime, it’s damaging to companies,” he said. He believes StackPulse can help.

Jan
18
2021
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Salesforce leads $15M investment in Asian HR tech platform Darwinbox

Darwinbox, which operates a cloud-based human resource management platform, has raised $15 million in a new financing round as the Indian startup looks to further expand in the country and Southeast Asian markets.

The new round — a Series C — for the Hyderabad-headquartered startup was led by Salesforce Ventures, the venture arm of the American enterprise giant. This is one of Salesforce Ventures’ rare investments in Asia. Existing investors, including Lightspeed India and Sequoia Capital India, also participated in the round, which brings the five-year-old startup’s raise to-date to about $35 million.

More than 500 firms — including Tokopedia, Indorama, JG Summit Group, Zilingo, Zalora, Fave, Adani, Mahindra, Kotak, TVS, National Stock Exchange, Ujjivan Small Finance Bank, Dr.Reddy’s, Nivea, Puma, Swiggy and Bigbasket — use Darwinbox’s HR platform to provide more than a million employees of theirs with a range of features in 60 nations, up from about 200 firms across 50 nations in late 2019, said Chaitanya Peddi, co-founder of Darwinbox, in an interview with TechCrunch.

Peddi said the startup has always looked up to Salesforce for inspiration, and investment from the enterprise giant is “nothing sort of a child receiving validation from their father,” he said.

The fundraise caps the most successful year for the startup that started with uncertainty as the coronavirus spread across Asian nations. The startup initially took a hit as its customers scrambled to navigate through the global pandemic, but the last two quarters have been its best to date, said Peddi.

Overall, the startup’s revenue has ballooned by 300% since September 2019, when it last raised money, he said. “In HR tech and SaaS space, we are now only behind SAP and Oracle in India in terms of revenue,” he said.

Dev Khare, a partner at Lightspeed India, an early backer of the startup, said that Darwinbox has become the preferred human capital management solution for Asian conglomerates, governments and high-growth businesses and multi-national corporations operating in Asia as they witness digital transformation.

Image Credits: Darwinbox

Darwinbox’s platform is built to take care of the entire “hiring to retiring” cycle needs of employees. It handles onboarding of new hires, keeps a tab on their performance, monitors attrition rate, and provides an ongoing feedback loop.

It also provides its customers with a social network for their employees to remain connected with one another and an AI assistant to apply for a leave or set up meetings with quick voice commands from their phones.

Peddi said the startup will deploy the fresh capital to expand to several more countries, especially in more emerging markets in the Middle East Asia and Africa, and broaden its offerings. “We will be leveraging the power of our platform to do a lot more. We are a product-led firm and our focus will remain on innovation in that space,” he said. The startup is also open to exploring opportunities to acquire smaller firms for inorganic growth, he said.

“India is home to one of the world’s youngest populations, and by 2050, it is expected to account for over 18% of the global working age population,” said Arundhati Bhattacharya, chairperson and CEO, Salesforce India, in a statement. “This makes technology platforms like Darwinbox, that focuses on workforces, incredibly important. I’m proud that Salesforce is supporting Darwinbox on their journey as they continue to grow and innovate in this space.”

Alex Kayyal, partner and head of international at Salesforce Ventures, told TechCrunch in an interview that the firm helps its partners in a number of ways, including exposing them to the firm’s customers, executives and their networks, and helping startups scale their business.

“We have one of the most innovative and disruptive customer bases that are looking for cloud solutions and digital transformation. So the opportunity to expose companies like Darwinbox to our customer base is something we get really excited about,” said Kayyal. Salesforce Ventures is exploring more investment opportunities in India, he said.

Jan
17
2021
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Personio raises $125M on a $1.7B valuation for an HR platform targeting SMEs

With the last year changing how (and where) many of us work, organizations have started to rethink how well they manage their employees, and what tools they use to do that. Today, one of the startups that is building technology to address this challenge is announcing a major round of funding that underscores its traction to date.

Personio — the German startup that targets small- and medium-sized businesses (10-2,000 employees) with an all-in-one HR platform covering recruiting and onboarding, payroll, absence tracking and other major HR functions — has picked up $125 million in funding at a $1.7 billion post-money valuation.

The Series D is being co-led by Index Ventures and Meritech, with previous backers Accel, Lightspeed Venture Partners, Northzone, Global Founders Capital and Picus all participating.

The $1.7 billion valuation is a big jump on the company’s $500 million valuation a year ago, and it comes after a year where the startup has doubled its revenues and was not on the hunt to raise, with much of its previous fundraising still in the bank.

Personio currently counts some 3,000 SMEs in Europe as customers.

In an interview, Hanno Renner, the co-founder and CEO of Personio, said that the startup would be using the funding to continue building out the product — which operates a little like Workday, but built for much smaller organizations — as well as expanding its presence in Europe.

Although SMEs can be a notoriously challenging customer segment, Renner said that a new opportunity has emerged: A new wave of people in the SME sector have started to realise the value of having a modern and integrated HR platform.

“We started Personio in 2016 wanting to become the leading HR platform for midmarket companies, and we knew it could be a great company, but we realize it can be hard to grasp what HR really means,” he said. “But I think what has driven our business in the past year has been the realization that HR is not just an important part, but maybe the most important part, of any business.”

It may take one magic turn to convert users, he said, by providing (as one example) tools to recruit, sign contracts and onboard new employees remotely. Still, he acknowledges that the midmarket — especially those companies not built around technology — has been “lagging for years,” with many still working off Excel spreadsheets, or even more surprisingly, pen and paper. “Supporting them by helping them to digitize in a more efficient way has been driving our business.”

Personio is not the only startup hopeful that the shift in how we work will bring a new appreciation (and appetite) for purchasing HR tools. Others like Hibob have also seen a big boost in their business and have also been raising money to tap into the opportunity more aggressively.

Hibob is looking to build in more training tools, underscoring the feature race that Personio will also have to run to keep up.

But given the sheer numbers of SMBs in the European market — more than 25 million, and accounting for more than 99% of all enterprises, according to research from the European Union — the fact that many of them have yet to adopt any kind of HR platform at all, there remains a lot of growth for a number of players.

“SMEs are the backbone of the European economy, employing 100 million people across the continent, but it is also a sector that has been neglected by software companies focused predominantly on large enterprises,” Martin Mignot, a partner at Index who sits on Personio’s board, said in a statement. “Personio changes that, having created a set of powerful tools tailored to address the needs of small businesses.”

“We have had the pleasure of working with some of the most successful SaaS companies in the world, and given Personio’s success over the past five years and the immense market potential, we strongly believe in Personio’s ability to build an equally successful and impactful business,” added Alex Clayton, general partner at Meritech Capital, in his own statement. “After many great discussions with Hanno over recent years, we are now excited to be joining the journey.” Clayton is also joining the board with this round.

Jan
15
2021
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GitLab oversaw a $195 million secondary sale that values the company at $6 billion

GitLab has confirmed with TechCrunch that it oversaw a $195 million secondary sale that values the company at $6 billion. CNBC broke the story earlier today.

The company’s impressive valuation comes after its most recent 2019 Series E in which it raised $268 million on a 2.75 billion valuation, an increase of $3.25 billion in under 18 months. Company co-founder and CEO Sid Sijbrandij believes the increase is due to his company’s progress adding functionality to the platform.

“We believe the increase in valuation over the past year reflects the progress of our complete DevOps platform towards realizing a greater share of the growing, multi-billion dollar software development market,” he told TechCrunch.

While the startup has raised over $434 million, this round involved buying employee stock options, a move that allows the company’s workers to cash in some of their equity prior to going public. CNBC reported that the firms buying the stock included Alta Park, HMI Capital, OMERS Growth Equity, TCV and Verition.

The next logical step would appear to be IPO, something the company has never shied away from. In fact, it actually at one point included the proposed date of November 18, 2020 as a target IPO date on the company wiki. While they didn’t quite make that goal, Sijbrandij still sees the company going public at some point. He’s just not being so specific as in the past, suggesting that the company has plenty of runway left from the last funding round and can go public when the timing is right.

“We continue to believe that being a public company is an integral part of realizing our mission. As a public company, GitLab would benefit from enhanced brand awareness, access to capital, shareholder liquidity, autonomy and transparency,” he said.

He added, “That said, we want to maximize the outcome by selecting an opportune time. Our most recent capital raise was in 2019 and contributed to an already healthy balance sheet. A strong balance sheet and business model enables us to select a period that works best for realizing our long-term goals.”

GitLab has not only published IPO goals on its Wiki, but its entire company philosophy, goals and OKRs for everyone to see. Sijbrandij told TechCrunch’s Alex Wilhelm at a TechCrunch Disrupt panel in September that he believes that transparency helps attract and keep employees. It doesn’t hurt that the company was and remains a fully remote organization, even pre-COVID.

“We started [this level of] transparency to connect with the wider community around GitLab, but it turned out to be super beneficial for attracting great talent as well,” Sijbrandij told Wilhelm in September.

The company, which launched in 2014, offers a DevOps platform to help move applications through the programming lifecycle.

Update: The original headline of this story has been changed from ‘GitLab raises $195M in secondary funding on $6 billion valuation.’

 

Jan
14
2021
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Harness snags $85M Series C on $1.7B valuation as revenue grows 3x

Harness, the startup that wants to create a suite of engineering tools to give every company the kind of technological reach that the biggest companies have, announced an $85 million Series C today on a $1.7 billion valuation.

Today’s round comes after 2019’s $60 million Series B, which had a $500 million valuation, showing a company rapidly increasing in value. For a company that launched just three years ago, this is a fairly remarkable trajectory.

Alkeon Capital led the round with help from new investors Battery Ventures, Citi Ventures, Norwest Venture Partners, Sorenson Capital and Thomvest Ventures. The startup also revealed a previously unannounced $30 million B-1 round raised after the $60 million round, bringing the total raised to date to $195 million.

Company founder and CEO Jyoti Bansal previously founded AppDynamics, which he sold to Cisco in 2017 for $3.7 billion. With his track record, investors came looking for him this round. It didn’t hurt that revenue grew almost 3x last year.

“The business is doing very well, so the investor community has been proactively reaching out and trying to invest in us. We were not actually planning to raise a round until later this year. We had enough capital to get through that, but there were a lot of people wanting to invest,” Bansal told me.

In fact, he said there is so much investor interest that he could have raised twice as much, but didn’t feel a need to take on that much capital at this time. “Overall, the investor community sees the value in developer tools and the DevOps market. There are so many big public companies now in that space that have gone out in the last three to five years and that has definitely created even more validation of this space,” he said.

Bansal says that he started the company with the goal of making every company as good as Google or Facebook when it comes to engineering efficiency. Since most companies lack the engineering resources of these large companies, that’s a tall task, but one he thinks he can solve through software.

The company started by building a continuous delivery module. A cloud cost-efficiency module followed. Last year the company bought open-source continuous integration company Drone.io and they are working on building that into the platform now, with it currently in beta. There are additional modules on the product roadmap coming this year, according to Bansal.

As the company continued to grow revenue and build out the platform in 2020, it also added a slew of new employees, growing from 200 to 300 during the pandemic. Bansal says that he has plans to add another 200 by the end of this year. Harness has a reputation of being a good place to work, recently landing on Glassdoor’s best companies list.

As an experienced entrepreneur, Bansal takes building a diverse company with a welcoming culture very seriously. “Yes, you have to provide equal opportunity and make sure that you are open to hiring people from diverse backgrounds, but you have to be more proactive about it in the sense that you have to make sure that your company environment and company culture feels very welcoming to everyone,” he said.

It’s been a difficult time building a company during the pandemic, adding so many new employees, and finding a way to make everyone feel welcome and included. Bansal says he has actually seen productivity increase during the pandemic, but now has to guard against employee burnout.

He says that people didn’t know how to draw boundaries when working at home. One thing he did was introduce a program to give everyone one Friday a month off to recharge. The company also recently announced it would be a “work from anywhere” company post-COVID, but Bansal still plans on having regional offices where people can meet when needed.

Jan
13
2021
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Germany’s Xentral nabs $20M led by Sequoia to help online-facing SMBs run back offices better

Small enterprises remain one of the most underserved segments of the business market, but the growth of cloud-based services — easier to buy, easier to provision — has helped that change in recent years. Today, one of the more promising startups out of Europe building software to help SMEs run online businesses is announcing some funding to better tap into both the opportunity to build these services, and to meet a growing demand from the SME segment.

Xentral, a German startup that develops enterprise resource planning software covering a variety of back-office functions for the average online small business, has picked up a Series A of $20 million.

The company’s platform today covers services like order and warehouse management, packaging, fulfillment, accounting and sales management, and the majority of its 1,000 customers are in Germany — they include the likes of direct-to-consumer brands like YFood, KoRo, the Nu Company and Flyeralarm.

But Benedikt Sauter, the co-founder and CEO of Xentral, said the ambition is to expand into the rest of Europe, and eventually other geographies, and to fold in more services to its ERP platform, such as a more powerful API to allow customers to integrate more services — for example in cases where a business might be selling on their own site, but also Amazon, eBay, social platforms and more — to bring their businesses to a wider market.

Mainly, he said, the startup wants “to build a better ecosystem to help our customers run their own businesses better.”

The funding is being led by Sequoia Capital, with Visionaires Club (a B2B-focused VC out of Berlin) also participating.

The deal is notable for being the prolific, high-profile VC’s first investment in Europe since officially opening for business in the region. (Sequoia has backed a number of startups in Europe before this, including Graphcore, Klarna, Tessian, Unity, UiPath, n8n and Evervault — but all of those deals were done from afar.)

Augsburg-based Xentral has been around as a startup since 2018, and “as a startup” is the operative phrase here.

Sauter and his co-founder Claudia Sauter (who is also his co-founder in life: she is his wife) built the early prototype for the service originally for themselves.

The pair were running a business of their own — a hardware company they founded in 2008, selling not nails, hammers and wood, but circuit boards they designed, along with other hardware to build computers and other connected objects. Around 2013, as the business was starting to pick up steam, they decided that they really needed better tools to manage everything at the backend so that they would have more time to build their actual products.

But Bene Sauter quickly discovered a problem in the process: smaller businesses may have Shopify and its various competitors to help manage e-commerce at the front end, but when it came to the many parts of the process at the backend, there really wasn’t a single, easy solution (remember this was eight years ago, at a time before the Shopifys of the world were yet to expand into these kinds of tools). Being of a DIY and technical persuasion — Sauter had studied hardware engineering at university — he decided that he’d try to build the tools that he wanted to use.

The Sauters used those tools for years, until without much outbound effort, they started to get some inbound interest from other online businesses to use the software, too. That led to the Sauters balancing both their own hardware business and selling the software on the side, until around 2017/2018 when they decided to wind down the hardware operation and focus on the software full time. And from then, Xentral was born. It now has, in addition to 1,000 customers, some 65 employees working on developing the platform.

The focus with Xentral is to have a platform that is easy to implement and use, regardless of what kind of SME you might be as long as you are selling online. But even so, Sauter pointed out that the other common thread is that you need at least one person at the business who champions and understands the value of ERP. “It’s really a mindset,” he said.

The challenge with Xentral in that regard will be to see how and if they can bring more businesses to the table and tap into the kinds of tools that it provides, at the same time that a number of other players also eye up the same market. (Others in the same general category of building ERP for small businesses include online payments provider Sage, NetSuite and Acumatica.) ERP overall is forecast to become a $49.5 billion market by 2025.

Sequoia and its new partner in Europe, Luciana Lixandru — who is joining Xentral’s board along with Visionaries’ Robert Lacher — believe however that there remains a golden opportunity to build a new kind of provider from the ground up and out of Europe specifically to target the opportunity in that region.

“I see Xentral becoming the de facto platform for any SMEs to run their businesses online,” she said in an interview. “ERP sounds a bit scary especially because it makes one think of companies like SAP, long implementation cycles, and so on. But here it’s the opposite.” She describes Xentral as “very lean and easy to use because you an start with one module and then add more. For SMEs it has to be super simple. I see this becoming like the Shopify for ERP.”

Jan
13
2021
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Vdoo raises $25M more to develop its AI-based security for IoT and connected devices

It’s estimated that there were some 50 billion connected devices globally in 2020, and while that really says a lot about how far we’ve come in tech, for many it also speaks to a big issue: security vulnerabilities, with the devices themselves, plus all the components and services running on them, all potential targets for anything from malicious hackers to not-so-intentional data leaks.

Today, Israeli startup Vdoo — which has been developing AI-based services to detect and fix those kinds of vulnerabilities in IoT devices — is announcing $25 million in funding, money that it plans to use to help it better address the wider issue as it applies to all connected objects. With its initial focus on large industrial deployments, medical systems, communications infrastructure and automotive, Vdoo also is looking more deeply now at the wider network of devices that use communications chips, providing quick (as in minutes) assessments to identify and remediate or directly fix various issues: it cites zero-day vulnerabilities, CVEs, configuration and hardening issues, and standard incompliances among them.

The funding — an extension to the $32 million round that Vdoo announced in April 2019 — is coming from two investors, Israel’s Qumra Capital and Verizon Ventures (the investing arm of Verizon, which — by way of its acquisition of Aol many years ago — also owns TechCrunch).

Verizon’s interest in Vdoo is strategic and speaks to the opportunity in the market. As CEO Netanel Davidi (who co-founded the company with Uri Alter and Asaf Karas) describes it, operators like Verizon are interested because of their role as a distributer and reseller of hardware as part of their wider services play, be it for broadband access, or a telematics service or something for the connected home or connected office.

“They sell connected devices to enterprises and home users that are not made by them, yet the carriers are responsible for the security,” he said, “so the solution is to bake that into devices” to make it work more seamlessly, he said.

Verizon is not the startup’s only strategic backer. Others in the first tranche of this round included another carrier, Japan’s NTT Docomo, MS&AD Ventures (the venture arm of the global cyber insurance firm) and Dell Technology Capital, the VC arm of Dell.

The company has now raised around $70 million, and while it’s not disclosing valuation, Davidi confirmed that it has more than doubled this year.

(In April 2019, PitchBook estimated that it was just under $100 million, which would make it now at over $200 million if that figure is accurate.)

Davidi said that the decision to raise this money as an extension to the previous round rather than a new round was strategic: it gave the company the chance to raise funding more quickly, and to take more time to prepare for a bigger funding round in the near future.

And the reason for raising quickly was to address what was a quickly moving target: One of the by-products of the COVID-19 pandemic has been a dramatic shift to people working from home, buying new devices to enable that and in general using their communications networks much more heavily than before.

Connected-device security typically focuses on monitoring activity on the hardware, how data is moving in and out of it. Vdoo’s approach has been to build a platform that monitors the behavior of the devices themselves, using AI to compare that behavior to identify when something is not working as it should. 

“For any kind of vulnerability, using deep binary analysis capabilities, we try to understand the broader idea, to figure out how a similar vulnerability can emerge,” is how Davidi described the process when we talked about the first part of this round back in 2019.

Vdoo generates specific “tailor-made on-device micro-agents” to continue the detection and repair process, which Davidi likens to a modern approach to some cancer care: preventive measures such as periodic monitoring checks, followed by a “tailored immunotherapy” based on prior analysis of DNA.

Vdoo is a play on the Hebrew word that sounds like “vee-doo” and means “making sure”, and points to the basic idea of how it approaches the verification around its device monitoring. It also feels somewhat like the next step in endpoint security, which was the focus of Davidi and Alter’s previous startup, Cyvera, which was eventually acquired by Palo Alto Networks.

The focus on devices, in some ways, is a significantly more complex approach, given that it’s not just about the device, but the many components that go into them. As we have seen with Meltdown and Spectre, vulnerabilities might exist at the processor level.

And as Davidi pointed out to me this week, at times those issues aren’t even intentional but still mean data can leak out, and at worst that can be exploitable by bad actors.

“Backdoors are being built into many devices, and some are not even intentional,” he said. “It may be that the developer wanted to create a shortcut to make something else easier in the future. Some will see that as a back door, and some will not.”

The fractal-like nature of the issue is what Vdoo is digging into with its widening approach.

“Initially we wanted to serve the ecosystem of manufacturers, since they are the cause of the problem and the origin of the security issues,” he said. “We started there with Fortune 500 customers in areas like automotive and industrial and medical and telco and aviation. The idea was to make a platform that could serve and protect security stakeholders. But then we saw that this was a big unserved market.”

Indeed, Vdoo quotes figures from research firm MarketsandMarkets that forecast that the global device security market will grow to $36.6 billion by 2025 from $12.5 billion in 2020.

“The number of connected IoT devices is rapidly growing, creating greater opportunities for security breaches,” said Boaz Dinte, managing partner of Qumra Capital, in a statement. “Vdoo’s unique device-centric, deep technology automated approach has already brought immediate value to vendors in a very short period of time. We believe the market opportunity is huge, and with newly infused growth capital, Vdoo is well-positioned to become the leading global player for securing connected devices.”

“With the expansion of 5G networks and mobile edge compute, there’s a need for an end-to-end, device-centric security approach to IoT,” added Verizon Ventures MD Tammy Mahn in a statement. “As the venture arm of a leading telco, Verizon Ventures is proud to invest in Vdoo and its world-class team on their journey to solve this global need, while ushering in a new era of security by design in our increasingly connected world.”

Jan
12
2021
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‘Brandtech’ company You and Mr. Jones adds $60M to its Series B

You & Mr. Jones announced today that it has added $60 million in new funding from Merian Chrysalis, bringing the Series B round announced in December to a total of $260 million.

The round values the company at $1.36 billion, post-money.

You & Mr. Jones takes its name from CEO David Jones, who founded the company in 2015. After having served as the CEO of ad giant Havas, Jones told me that his goal in starting what he called “a brandtech group” was to provide marketers with something that neither traditional agencies nor technology companies could give them.

“At that moment, the choices were to go work with an agency group, which is great at brand and marketing, but they don’t understanding tech, or with a tech company, which will only ever recommend their platform and don’t have the same [brand and marketing] expertise,” he said.

So You & Mr. Jones has built its own technology platform to help marketers with their digital, mobile and e-commerce needs, while also investing in companies like Pinterest and Niantic. And it makes acquisitions — last year, for example, it bought influencer marketing company Collectively.

You & Mr. Jones has grown to 3,000 employees, and its clients include Unilever, Accenture, Google, Adidas, Marriott and Microsoft. In fact, Jones said that as of the third quarter of 2020, its net revenue had grown 27% year-over-year.

That’s particularly impressive given the impact of the pandemic on ad spending, but Jones said that’s one of the key distinctions between digital advertising and the broader brandtech category, with he said has grown steadily, even during the pandemic, and which also sets the company apart from agencies that are “digital and tech in press release only.”

“We’re not an ad agency, we’ll never acquire agencies,” he said. “We have the technology platform, process and people to deliver all of your end-to-end, always-on content — social, digital, e-commerce, community management.”

In addition to the funding, company is announcing that it has hired Paulette Forte, who was previously senior director of human services at the NBA, as its first chief people officer.

“The Brandtech category didn’t even exist before You & Mr Jones was established,” Forte said in a statement. “The company became a true industry disruptor in short order, and growth has been swift. In order to keep up with the momentum, it’s critical to have systems in place that help talent develop their skills, encourage diversity and creativity, and find pathways to improving workflow. I am excited to join the leadership team to drive this crucial work forward.”

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