Oct
10
2019
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Clari snags $60M Series D on valuation of around $500M

Clari uses AI to help companies find key information like the customers most likely to convert, the state of orders in the sales process or the next big sources of revenue. As its revenue management system continues to flourish, the company announced a $60 million Series D investment today.

Sapphire Ventures led the round with help from newcomer Madrona Venture Group and existing investors Sequoia Capital, Bain Capital Ventures and Tenaya Capital. Today’s investment brings the total raised to $135 million, according to the company.

The valuation, which CEO and co-founder Andy Byrne pegged at around a half a billion, appears to be a hefty raise from what the company was likely valued at in 2018 after its $35 million Series C. As TechCrunch’s Ingrid Lunden wrote at the time:

For some context, Clari, according to Pitchbook, had a relatively modest post-money valuation of $83.5 million in its last round in 2014, so my guess is that it’s now comfortably into hundred-million territory, once you add in this latest $35 million.

Byrne says the company wasn’t even really looking for a new round, but when investors came knocking, he couldn’t refuse. “On the fundraise side, what’s really interesting is how this whole thing went down. We weren’t out looking, but we had a massive amount of interest from a lot of firms. We decided to engage, and we got it done in less than three weeks, which the board was kind of blown away by,” Byrne told TechCrunch.

What’s motivating these companies to invest is that Clari is helping to define this revenue operations category, and has attracted companies like Okta, Zoom and Qualtrics as customers. What they are providing is this AI-fueled way to see where the best sales opportunities are to drive revenue, and that’s what every company is looking for. At the same time, Byrne says that he’s moving companies away from a spreadsheet-driven record keeping system, enabling them to see all of the data in one place.

“Clari is allowing a rep to really understand where they should spend time, automating a lot of things for them to close deals faster, while giving managers new insights they’ve never had before to allow them to drive more revenue. And then we’re getting them out of ‘Excel hell.’ They’re no longer in these spreadsheets. They’re in Clari, and have more predictability in their forecasting,” he said.

Clari was founded in 2012 and is headquartered in Sunnyvale, Calif. It has more than 300 customers and just passed the 200 employee mark, a number that should increase as the company uses this money to begin to accelerate growth and expand the product’s capabilities.

Oct
03
2019
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India’s Fyle bags $4.5M to expand its expense management platform in the US, other international markets

Fyle, a Bangalore-headquartered startup that operates an expense management platform, has extended its previous financing round to add $4.5 million of new investment as it looks to court more clients in overseas markets.

The additional $4.5 million tranche of investment was led by U.S.-based hedge fund Steadview Capital, the startup said. Tiger Global, Freshworks and Pravega Ventures also participated in the round. The new tranche of investment, dubbed Series A1, means that the three-and-a-half-year-old startup has raised $8.7 million as part of its Series A financing round, and $10.5 million to date.

The SaaS startup offers an expense management platform that makes it easier for employees of a firm to report their business expenses. The eponymous service supports a range of popular email providers, including G Suite and Office 365, and uses a proprietary technology to scan and fetch details from emails, Yash Madhusudhan, co-founder and CEO of Fyle, demonstrated to TechCrunch last week.

A user, for instance, could open a flight ticket email and click on Fyle’s Chrome extension to fetch all details and report the expense in a single click in real-time. As part of today’s announcement, Madhusudhan unveiled an integration with WhatsApp . Users will now be able to take pictures of their tickets and other things and forward it to Fyle, which will quickly scan and report expense filings for them.

These integrations come in handy to users. “Eighty percent to ninety percent of a user’s spending patterns land on their email and messaging clients. And traditionally it has been a pain point for them to get done with their expense filings. So we built a platform that looks at the challenges faced by them. At the same time, our platform understands frauds and works with a company’s compliances and policies to ensure that the filings are legitimate,” he said.

“Every company today could make use of an intelligent expense platform like Fyle. Major giants already subscribe to ERP services that offer similar capabilities as part of their offerings. But as a company or startup grows beyond 50 to 100 people, it becomes tedious to manage expense filings,” he added.

Fyle maintains a web application and a mobile app, and users are free to use them. But the rationale behind introducing integrations with popular services is to make it easier than ever for them to report filings. The startup retains its algorithms each month to improve their scanning abilities. “The idea is to extend expense filing to a service that people already use,” he said.

International expansion

Until late last year, Fyle was serving customers in India. Earlier this year, it began searching for clients outside the nation. “Our philosophy was if we are able to sell in India remotely and get people to use the product without any training, we should be able to replicate this in any part of the world,” he said.

And that bet has worked. Fyle has amassed more than 300 clients, more than 250 of which are from outside of India. Today, the startup says it has customers in 17 nations, including the U.S. and the U.K. Furthermore, Fyle’s revenue has grown by five times in the last five months, said Madhusudhan, without disclosing the exact figures.

To accelerate its momentum, the startup is today also launching an enterprise version of Fyle that will serve the needs of major companies. The enterprise version supports a range of additional security features, such as IP restriction and a single sign-in option.

Fyle will use the new capital to develop more product solutions and integrations and expand its footprint in international markets, Madhusudhan said. The startup, which just recently set up its sales and marketing team, will also expand the headcount, he said.

Moving forward, Madhusudhan said the startup would also explore tie-ups with ERP providers and other ways to extend the reach of Fyle.

In a statement, Ravi Mehta, MD at Steadview Capital, said, “intelligent and automated systems will empower businesses to be more efficient in the coming decade. We are excited to partner with Fyle to transform one of the core business processes of expense management through intelligence and automation.”

Oct
02
2019
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A startup factory? $1.2B-exit team launches $65M super{set}

Think Jack Dorsey’s jobs are tough? Well, Tom Chavez is running six startups. He thinks building businesses can be boiled down to science, so today he’s unveiling his laboratory for founding, funding and operating companies. He and his team have already proven they can do it themselves after selling their startups Rapt to Microsoft and Krux to Salesforce for a combined $1.2 billion. Now they’ve raised a $65 million fund for “super{set}”, an enterprise startup studio with a half-dozen companies currently in motion.

The idea is that {super}set either conceptualizes a company or brings in founders whose dream they can make a reality. The studio provides early funding and expertise while the startup works from their shared space in San Francisco, plus future ones in New York and Boston. The secret sauce is the “super{set} Code,” an execution playbook plus technological tools and building blocks that guide the strategy and eliminate redundant work. “Our belief is that we can make the companies 10x faster and increase capital efficiency by 5X,” says Chavez of his partnership with {super}set co-founders Vivek Vaidya, who acts as CTO, and Jae Lim who manages the fund.

Superset Team

The {super}set team (from left): Tom Chavez, Jae Lim, Jen Elena and Vivek Vaidya

Perhaps the question isn’t whether the portfolio startups can scale, but if the humans behind them can without breaking. It’s stressful running a single company, let alone six. Even with the order of operations nailed down, each encounters unique challenges and no plan is one-size-fits-all. But after delivering 17.5X returns to their past investors, Chavez et al. have proven their power to repeatedly recognize what enterprises need and build admittedly boring but bountiful products in customer data management, and advertising yield.

The studio’s playbooks cover business plan formation, pitch strategies, go to market, revenue, machine learning, management principles, HR processes, sales methods, pipeline measurement, product sequencing, finance, legal and more. There’s also shared engineering code it provides, so each startup doesn’t have to reinvent the wheel. “I don’t think you can systemize it but I do think you can accelerate and de-risk the path,” Chavez explains.

Superset Code 1

{super}set Code

Today, the first {super}set company is coming out of stealth. Eskalera helps enterprises retain top talent by tracking diversity and inclusion stats of employees to engage them with career growth and community programs. Chavez is the CEO, but plans to install a new one shortly so he can focus more time on founding more startups. There are 55 employees across the first six companies, with two already generating revenue and most ready to emerge in the next nine months.

The funding for Eskalera and other {super}set companies comes with unique terms. Because Chavez and the team aren’t just board members you hear from once a quarter but “shoulder to shoulder with the entrepreneurs” as he repeats several times in our interview, the startups pay more equity for the cash.

The hope is having seasoned leadership aboard is worth it. “We’re product people first and foremost,” Chavez tells me. “What are you going to build? Who’s going to buy it? Why? What’s the technical moat? We’re not people doing jazz hands.” The {super}set team has plenty of skin in the game, though, given Chavez himself put in a big chunk of the $65 million, and the fund sticks to a standard management fee.

Eskalera

Eskalera

To supercharge the companies, {super}set brings in expert staffers in artificial intelligence, data science and more, who then align with the most relevant companies in the portfolio. They get equity grants to incentivize them to work hard on the startups’ behalf. “The worry I have about these larger funds is that they have an incentive disconnect where they work for the fees” Chavez says. His fund hopes to win through follow-on funding of its winners.

Tom Chavez Superset

{super}set co-founder Tom Chavez

If portfolio companies hit hard times, Chavez says {super}set will stick with them. “My first company had multiple layoffs and a major pivot. We had an enterperenur that walked away. They lost conviction, but we brought that company to an $180 million exit after people said there was no effing way and that felt really good,” Chavez says of staying the course. “The good entrepreneurs have that demonic energy.” But if everyone involved agrees a project isn’t working, they’ll shutter it. “It comes back to opportunity cost of people’s time.”

Chavez has respect for studios taking different approaches, like Atomic in consumer startups, Science in e-commerce and Pioneer Square Labs, which maintains a larger fund staff. “What excites me is moving entrepreneurship a step forward. Why couldn’t we franchise this in other cities?” He hopes {super}set can attract top talent that “just want to work on cool shit” rather than getting sucked into a single company.

Can {super}set keep all the plates spinning and really lower their risk? “If we’re wrong there will be a giant orange plume streak across the sky. The early returns are promising but we have to prove it,” Chavez says. But after accruing plenty of wealth for himself, he says the thrill that keeps him in the startup game is seeing life-changing outcomes for his teams. “I have spreadsheets showing the wealth generated by employees of companies I’ve built and nothing makes me happier than seeing them pay for tuitions, property, or retiring.”

Sep
26
2019
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Battlefield vets StrongSalt (formerly OverNest) announces $3M seed round

StrongSalt, then known as OverNest, appeared at the TechCrunch Disrupt NYC Battlefield in 2016, and announced a product for searching encrypted code, which remains unusual to this day. Today, the company announced a $3 million seed round led by Valley Capital Partners.

StrongSalt founder and CEO Ed Yu says encryption remains a difficult proposition, and that when you look at the majority of breaches, encryption wasn’t used. He said that his company wants to simplify adding encryption to applications, and came up with a new service to let developers add encryption in the form of an API. “We decided to come up with what we call an API platform. It’s like infrastructure that allows you to integrate our solution into any existing or any new applications,” he said.

The company’s original idea was to create a product to search encrypted code, but Yu says the tech has much more utility as an API that’s applicable across applications, and that’s why they decided to package it as a service. It’s not unlike Twilio for communications or Stripe for payments, except in this case you can build in searchable encryption.

The searchable part is actually a pretty big deal because, as Yu points out, when you encrypt data it is no longer searchable. “If you encrypt all your data, you cannot search within it, and if you cannot search within it, you cannot find the data you’re looking for, and obviously you can’t really use the data. So we actually solved that problem,” he said.

Developers can add searchable encryption as part of their applications. For customers already using a commercial product, the company’s API actually integrates with popular services, enabling customers to encrypt the data stored there, while keeping it searchable.

“We will offer a storage API on top of Box, AWS S3, Google Cloud, Azure — depending on what the customer has or wants. If the customer already has AWS S3 storage, for example, then when they use our API, and after encrypting the data, it will be stored in their AWS repository,” Yu explained.

For those companies that don’t have a storage service, the company is offering one. What’s more, they are using the blockchain to provide a mechanism for sharing, auditing and managing encrypted data. “We also use the blockchain for sharing data by recording the authorization by the sender, so the receiver can retrieve the information needed to reconstruct the keys in order to retrieve the data. This simplifies key management in the case of sharing and ensures auditability and revocability of the sharing by the sender,” Yu said.

If you’re wondering how the company has been surviving since 2016, while only getting its seed round today, it had a couple of small seed rounds prior to this, and a contract with the U.S. Department of Defense, which replaced the need for substantial earlier funding.

“The DOD was looking for a solution to have secure communication between computers, and they needed to have a way to securely store data, and so we were providing a solution for them,” he said. In fact, this work was what led them to build the commercial API platform they are offering today.

The company, which was founded in 2015, currently has 12 employees spread across the globe.

Sep
25
2019
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India’s Darwinbox raises $15M to bring its HR tech platform to more Asian markets

An Indian SaaS startup, which is increasingly courting clients from outside the country, just raised a significant amount of capital to expand its business.

Hyderabad-based Darwinbox, which operates a cloud-based human resource management platform, said on Thursday it has raised $15 million in a new financing round. The Series B round — which moves the firm’s total raise to $19.7 million — was led by Sequoia India and saw participation from existing investors Lightspeed India Partners, Endiya Partners and 3one4 Capital.

More than 200 firms — including giants such as adtech firm InMobi, fintech startup Paytm, drink conglomerate Bisleri, automobile maker Mahindra, Kotak group and delivery firms Swiggy and Milkbasket — use Darwinbox’s HR platform to serve half a million of their employees in 50 nations, Rohit Chennamaneni, co-founder of Darwinbox, told TechCrunch in an interview.

The startup, which competes with giants such as SAP and Oracle, said its platform enables a high level of configurability and ease of use, and understands the needs of modern employees. “The employees today who have grown accustomed to using consumer-focused services such as Uber and Amazon are left disappointed in their experience with their own firm’s HR offerings,” said Gowthami Kanumuru, VP Marketing at Darwinbox, in an interview.

Darwinbox’s HR platform offers a range of features, including the ability for firms to offer their employees insurance and early salary as loans. Its platform also features social networks for employees within a company to connect and talk, as well as an AI assistant that allows them to apply for a leave or set up meetings with quick voice commands from their phone.

“The AI system is not just looking for certain keywords. If an employee tells the system he or she is not feeling well today, it automatically applies a leave for them,” she said.

Darwinbox’s platform is built to handle onboarding new employees, keep a tab on their performance, monitor attrition rate and maintain an ongoing feedback loop. Or as Kanumuru puts it, the entire “hiring to retiring” cycle.

One of Darwinbox’s clients is L&T, which is tasked with setting up subways in many Indian cities. L&T is using Darwin’s geo-fencing feature to log the attendance of employees. “They are not using biometric punch machine that is typically used by other firms. Instead, they just require their 1,200 employees to check-in from the workplace using their phones,” said Kanumuru.

darwinbox event

Additionally, Darwinbox is largely focusing on serving companies based in Asia as it believes Western companies’ solutions are not a great fit for people here, said Kanumuru. The startup began courting clients in Southeast Asian markets last year.

“Our growth is a huge validation for our vision,” she said. “Within six months of operations, we had the delivery giant Delhivery with over 23,000 employees use our platform.”

In a statement to TechCrunch, Dev Khare, a partner at Lightspeed Venture, said, “there is a new trend of SaaS companies targeting the India/SE Asia markets. This trend is gathering steam and is disproving the conventional wisdom that Asia-focused SaaS companies cannot get to be big companies. We firmly believe that Asia-focused SaaS companies can get to large impact value and become large and profitable. Darwinbox is one of these companies.”

Darwinbox’s Chennamaneni said the startup will use the fresh capital to expand its footprints in Indonesia, Malaysia, Thailand and other Southeast Asian markets. Darwinbox also will expand its product offerings to address more of employees’ needs. The startup is also looking to make its platform enable tasks such as booking of flights and hotels.

Chennamaneni, an alum of Google and McKinsey, said Darwinbox aims to double the number of clients it has in the next six to nine months.

Sep
25
2019
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Netdata, a monitoring startup with 50-year-old founder, announces $17M Series A

Nearly everything about Netdata, makers of an open-source monitoring tool, defies standard thinking about startups. Consider that the founder is a polished, experienced 50-year-old executive who started his company several years ago when he became frustrated by what he was seeing in the monitoring tools space. Like any good founder, he decided to build his own, and today the company announced a $17 million Series A led by Bain Capital.

Marathon Ventures also participated in the round. The company received a $3.7 million seed round earlier this year, which was led by Marathon.

Costa Tsaousis, the company’s founder and CEO, was working as an executive for a company in Greece in 2014 when he decided he had had enough of the monitoring tools he was seeing. “At that time, I decided to do something about it myself — actually, I was pissed off by the industry. So I started writing a tool at night and on weekends to simplify monitoring significantly, and also provide a lot more insights,” Tsaousis told TechCrunch.

Mind you, he was a 45-year-old executive who hadn’t done much coding in years, but he was determined, as any startup founder tends to be, and he took two years to create his monitoring tool. As he tells it, he released it to open source in 2016 and it just took off. “In 2016, I released this project to the public, and it went viral, I wrote a single Reddit post, and immediately started building a huge community. It grew up about 10,000 GitHub stars in a matter of a week,” he said. Even today, he says that it gets a half million downloads every single day, and hundreds of people are contributing to the open-source version of the product, relieving him of the burden of supporting the product himself.

Panos Papadopoulos, who led the investment at Marathon, says Tsaousis is not your typical early-stage startup founder. “He is not following many norms. He is 50 years old, and he was a C-level executive. His presentation and the depth of his thinking, and even his core materials, are unlike anything else have seen in an early-stage startup,” he said.

What he created was an open-source monitoring tool, one that he says simplifies monitoring significantly, and also provides a lot more insights, offering hundreds of metrics as soon as you install it. He says it is also much faster, providing those insights every second, and it’s distributed, meaning Netdata doesn’t actually collect the data, just provides insights on it wherever it lives.

Screenshot 2019 09 25 09.58.36

Live dashboard on the Netdata website

Today, the company has 24 employees and Tsaousis has set up shop in San Francisco. In addition, to the open-source version of the product, there is a SaaS version, which also has what he calls a “massively free plan.” He says the open-source monitoring agent is “a gift to the world.” The SaaS tool is about democratizing monitoring and the pay version is even different from most monitoring tools, charging by the seat instead of by the amount of infrastructure you are monitoring.

Tsaousis wants no less than to lead the monitoring space eventually, and believes that the free tiers will lead the way. “I think Netdata can change the way people perceive and understand monitoring, but in order to do this, I think that offering free services in a massive way is essential. Otherwise, it will not work. So my aim is to lead monitoring. This may sound arrogant, and Netdata is not there yet, but I think it can be,” he said.

Sep
25
2019
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Arceo.ai raises $37 million to expand cyber insurance coverage and access

Critical cyber attacks on both businesses and individuals have been grabbing headlines at an alarming rate. Cybersecurity has moved from a background risk for enterprises to a critical day-to-day threat to business operations, forcing executive teams to pour time and hundreds of billions in capital into monitoring and prevention efforts.

Yet even as investment in security ticks up, the frequency and cost of cybercrime to businesses continues to rapidly accelerate, with the World Economic Forum estimating the economic loss due to cybercrime could reach $3 trillion by 2020.

More companies are now turning to cyber insurance as a means of mitigating financial exposure. However, for traditional insurers, cybersecurity remains a relatively nascent and unfamiliar issue, requiring risk-assessment data points and methodologies largely different from those seen in traditional insurance products. As a result, businesses often struggle to get the scale of cybersecurity coverage they require.

Arceo.ai is hoping to expand the size and scope of the cyber insurance market for both insurers and companies, by providing insurers with effective real-time data, analytics and context, necessary for safely and efficiently underwrite cyber risk.

This morning, Arceo took a major step in achieving that goal, announcing the company has raised a $37 million round of funding led by Lightspeed Venture Partners and Founders Fund with participation from CRV and  UL Ventures.

Arceo logoUsing an expansive set of global sources across a customer’s digital footprint, Arceo.AI collects internal, external and macro cyber risk data which it uses to evaluate a company’s security and cyber risk management behavior. By automating the data collection process and connecting it with insurer underwriting processes, Arceo is able to keep its data and policy assessments up to date in real-time and enable faster, more efficient quotes.

A vital component of Arceo’s platform is its analytics offering. Using patented data science and cyber risk models, Arceo generates analytics-driven insights for insurance carriers, brokers and end-insured customers. For end-insured customers, Arceo helps companies understand whether they’re using the best mitigation strategies by providing policy recommendations and industry benchmarking to help contextualize day-to-day cyber behavior and hygiene. For underwriters, Arceo can provide specific insurance recommendations based on particular policy coverages.

Ultimately, Arceo looks to provide both insurers and the insured with actionable answers to key questions such as how one assesses cyber risk, how one determines what risks can be mitigated with technology alone, how one knows which systems are best and whether those systems are being used appropriately.

Raj Shah

Arceo.ai Chairman Raj Shah. Image via Arceo.ai

In an interview with TechCrunch, Arceo Chairman Raj Shah explained that the company’s background expertise, proprietary data systems, and deep pedigree in both the security and insurance truly differentiate Arceo from competing solutions. For starters, both Shah and Arceo co-founder and CEO Vishaal Hariprasad have spent close to the entirety of their careers in national security and cybersecurity. Hariprasad started his career in the Airforce’s first cohort of cyber warfare officers, before teaming up with Shah to start Morta Security in 2012, a security startup the two sold to Palo Alto networks in just roughly two years.

After selling the company, Shah and Hariprasad remained in the security world before realizing that there was a natural intersection between security and insurance, and a real opportunity for risk transfer solutions.

“Having studied the market, we saw that people are spending more and more dollars on cybersecurity products… There are hundreds of thousands of new vendors every year… Spend is going up, but we don’t feel any safer!” Shah told TechCrunch.

“That’s when we said ‘Hey, we need to move beyond just thinking about technology points and products, and think about holistic cyber risk management.’ And this is where insurance has historically done a great job. Putting a price on behavior and making people think and letting them take risks… From life and death and health to buyers and property and casualty. And so cyber is that next class risk… So that’s really why we started the business. We wanted to provide a real way to manage the cyber stress that they’re facing and that will impact every single one of our digital lives.”

Since the company’s founding, Raj and Vishaal have been joined by a deep network of cyber and insurance experts. Today, Arceo also announced that Hemant Shah, founder and former CEO of catastrophe risk modeling company RMS has joined Arceo’s Board of Directors. Additionally, earlier this month, the company announced that Mario Vitale, the former CEO of publically-traded insurance companies Willis Towers Watson and Zurich Insurance Group, would be joining the Arceo team as the company’s President.

The company noted that participation from high-profile industry vets like Hemant and Mario not only further advance Arceo’s competitive advantage but also acts as another major validation of the company’s future and work to date.

According to Arceo Chairman Raj Shah, after years of investing in R&D, the latest funds will be used towards expansion efforts and scaling Arceo to the broader ecosystem of insurance and brokers. Longer-term, the company hopes to offer the most complete combined cybersecurity and risk transfer solution to insurers and the insured, easing the stress around cyber threats for both enterprises and individuals and ultimately improving broader cyber resiliency.

If you’d like to hear more from Arceo’s Raj Shah, Raj will also be joining us this year on the Extra Crunch stage at TechCrunch Disrupt SF, where he’ll discuss how founders and companies should think about potential US government investment. Grab tickets here and we hope to see you there!

Sep
25
2019
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Vannevar Labs comes out of stealth to bring best-in-class AI tech to national security agencies

Few organizations have the complex data and analytics problems that challenge the defense and intelligence communities every single day. Whether it is managing petabytes of text, audio, or video data, finding extraordinarily small patterns in the noise, or processing multilingual analytics, the agencies at the heart of America’s national security system confront cutting-edge problems every day.

Despite the desire for better tools though, intelligence analysts are often stymied to procure up-to-date software due to the byzantine rules that drive Pentagon and intelligence procurement.

That’s why a former intelligence official and former intelligence investor are looking to build a new platform that connects the best minds in artificial intelligence, machine learning, and natural language processing and bundling it together into a service purchasable by these government agencies.

Through Palo Alto-based Vannevar, co-founders Brett Granberg and Nini Moorhead are hoping to launch their first product, which is focused on bringing NLP technologies like feature detection to international counterterrorism missions.

Vannevar Labs

Co-founders Nimi Moorhead and Brett Granberg of Vannevar Labs. Photo via Vannevar Labs.

The company is named for Vannevar Bush, who is often credited with inventing an early form of the computer, putting together the Manhattan Project which led to the atom bomb, and for writing a seminal essay that sort of predicted the internet decades before its inception.

The two chose this particular product as an entrée because of their past experiences. Before beginning Vannevar, Granberg spent two years at In-Q-Tel, the non-profit VC firm that works deeply with the intelligence community to supply agencies with the best in startup technology. He also was an advisor at Lilt, a real-time deep learning translation product that spun out of Chris Manning’s famed Stanford NLP research lab.

Meanwhile, Moorhead spent seven years working as a counterterrorism officer within the intelligence community, working to disrupt terrorist networks.

The two met while they overlapped at Stanford GSB and realized they had seen similar problems that they both wanted to solve. While in business school, “top of mind for me was some of the technological challenges that I encountered as an end user [and] analyst in the intelligence community,” Moorhead said. “We immediately connected and shared a lot of experiences in common in terms of seeing gaps between the really hard domain problems that I’d been working on in my career as an analyst and some of the technology that was available to me,” she said. The two actually met the first day of school.

Their approach is to take proven techniques and attempt to translate them into government use cases. “We’re not sort of inventing new math to solve these problems, we’re more taking cutting-edge approaches and just applying them to specific use cases,” Granberg said.

While the project is early, the team raised a $4.5 million seed venture capital funding from fellow GSB alum Katherine Boyle of General Catalyst and Costanoa Ventures. Boyle has made a big push into defense and highly-regulated industries as part of her investment practice, where she previously funded Anduril, the company started by Oculus founder Palmer Luckey that has attempted to apply ML technology to security issues such as battlefield awareness and border control (and gotten into some controversy along the way as well).

She is particularly excited about new ways for startups to secure government contracts at a speed faster than the sun burning out. Talking to me about the potential in this industry, she said:

We’ve been spending a lot of time with companies that are going after what’s known as Other Transaction Authorities, which are a new type of contracting vehicle that was developed in 2015 by former Secretary of Defense Ash Carter, to help tech companies work very quickly with the Department of Defense and with the intelligence community. So what historically might have taken 18 months to get a contract now takes 30 to 60 days for critical pieces of technology

Boyle explained that Vannevar fits directly into her thesis for the future of government procurement. “Our view is that the companies that do best in the space are people who have worked in government or understand how to sell to governments,” she said. She noted that the company is very early, and her investment was primarily focused on the team.

I asked about recent controversies that have hit companies like Google, which saw a revolt by some employees over its involvement with a defense program called Project Maven, which attempted to use machine learning technology and apply that to the battlefield, so that, for instance, drones could increase their effectiveness during strikes.

Granberg said that “we think that the people that defend our country should have access to the best tools and technologies to do their job. We know these people, we used to work with them, and we want to help them.”

He understands the concerns of critics though, and says that Vannevar intends to work with the government to ensure ethics remains core to its product. “We believe it’s our responsibility to sort of shape that technology and help the government think about putting in place policies that … prevent the misuse from happening.”

Boyle agreed. “One of the things that we’ve noticed is that if you’re very transparent and upfront about the types of products you’re going to be building in the beginning, it’s not a recruitment problem, it’s not an ethics problem.” Unlike Google, which had a six-figure large workforce with many employees who don’t want to touch defense-related code, the hope for Granberg and Moorhead is that a company like Vannevar can build a coalition of the willing, as it were, and maybe solve some serious security problems as well.

Sep
25
2019
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ZenBusiness raises $15M to help founders launch and grow ‘worry-free’

There are two sides to starting a new business. On one side, entrepreneurs need creativity, imagination — a dream, essentially — to find, build, and market a new product to users and consumers. But on the other side, they have to deal with the regulatory state and all the minutia that comes with running any business in the 21st century.

That includes such delightful topics as choosing a particular model for incorporation, ensuring that a business has the right licenses to operate, and tracking all the legal changes happening in 50 state legislatures every year. It can be inordinately complicated (and expensive!) to ensure that your business is ready and legal.

That’s where ZenBusiness comes in. The Austin-based startup wants to empower entrepreneurs to build businesses large and small by dramatically simplifying the processes required to launch a business and then grow it.

When I last chatted with the company 18 months ago, they had just raised a $4.5 million seed round and had launched its platform. Today, it’s announcing that it has raised a new $15 million series A round led by return backer Greycroft, along with returning investors Lerer Hippeau and Revolution’s Rise of the Rest fund, alongside new investors Rosecliff Venture Partners, Interlock Partners and Recruit Strategic Partners.

The company launched with a product that was essentially an automated registered agent for new entrepreneurs. Under state incorporation laws, companies must designate a so-called “registered agent” to receive official notices from regulatory agencies, and so ZenBusiness chose this strategic point for entry into the market.

When I last chatted with CEO Russ Buhrdorf, he described rolling up this market as one of the key initial targets for the company:

ZenBusiness is the brainchild of Ross Buhrdorf, who joined vacation rental marketplace HomeAway five months after its inception as founding CTO, and stayed for a decade until its acquisition by Expedia in 2015 for $3.9 billion. Buhrdorf intended to take a year off, but “didn’t quite make it a year” he told me.

He explained to me that HomeAway in many ways followed a rollup playbook, “raising $400 million and acquired 26 companies.” Bringing that rollup lens while exploring new spaces, he ran into the corporate legal services market, which offers help to companies to keep them in compliance with the law. Buhrdorf liked what he saw. “It’s different in all 50 states, highly-regulated, which is great for technology, it is overpriced, and they underserve their customers.” He says the space is “completely ripe for disruption.”

Since that time, the company has expanded its product to help entrepreneurs get beyond merely incorporating to actually building out their business by recommending services like banking, lending, tax preparation, website building, and more. The hope is to provide a “worry-free” guarantee to entrepreneurs so that they can get those early critical logistics out of the way and back to actually operating and growing their business.

“Small businesses come through this funnel, they don’t necessarily know exactly what to do. So we curate that solution, and then we provide them with the basics for them to get up and running and to be successful,” Buhrdorf said.

He explained that the company has built out some tools itself such as a simple webpage creator, but in the long run, he hopes to partner with other providers who integrate into the ZenBusiness platform. For instance, ZenBusiness has partnered with Xero as the company’s main accounting provider, while also backstopping that offering with accountants working at ZenBusiness. The idea is that the automated tooling plus a little human touch can help most owners handle the day-to-day challenges of running a business.

TeamPhoto2018

The ZenBusiness team in 2018. Photo via ZenBusiness.

Buhrdorf is particularly focused on keeping the product very self-service and automated to allow it to focus on these smaller customers. “Many of the companies that you cover that are in the enterprise space, who provide solutions for medium-sized businesses, they have to charge, they have to have sales forces, it’s very competitive there,” Buhrdorf said. “What we’re after is the segment that’s underserved, it’s the long tail of the small business segment.”

ZenBusiness has expanded its services, and it is hoping to use the fresh infusion of capital to invest in building out community features that will allow small business owners to swap tips with each other and help one another grow their businesses (presumably with some guidance from ZenBusiness community managers and experts).

The company is now 40 employees predominantly in Austin with a small office in Peru. Since we last checked in, the company has transitioned to become a public benefit corporation, which Buhrdorf said was an attempt to better align the company’s charter with its mission orientation to help small business entrepreneurs.

Update: The funding total was changed from $10m to $15m. Sorry about that.

Sep
24
2019
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Meme editor Kapwing grows 10X, raises $11M

Kapwing is a laymen’s Adobe Creative Suite built for what people actually do on the internet: make memes and remix media. Need to resize a video? Add text or subtitles to a video? Trim or crop or loop or frame or rotate or soundtrack or… then you need Kapwing. The free web and mobile tool is built for everyone, not just designers. No software download or tutorials to slog through. Just efficient creativity.

Kapwing Video Editor

In a year since coming out of stealth with 100,000 users, Kapwing has grown 10X, to more than 1 million. Now it going pro, building out its $20/month collaboration tools for social media managers and scrappy teams. But it won’t forget its roots with teens, so it has dropped its pay-$6-to-remove-watermarks tier while keeping its core features free.

Eager to capitalize on the meme and mobile content business, CRV has just led an $11 million Series A round for Kapwing. It’s joined by follow-on cash from Village Global, Sinai and Shasta Ventures, plus new investors Jane VC, Harry Stebbings, Vector and the Xoogler Syndicate. CRV partners “the venture twins” Justine and Olivia Moore actually met Kapwing co-founder and CEO Julia Enthoven while they all worked at The Stanford Daily newspaper in 2012.

“As a team, we love memes. We talk about internet fads almost every day at lunch and pay close attention to digital media trends,” says Enthoven, who started the company with fellow Googler Eric Lu. “One of our cultural tenets is to respect the importance of design, art and culture in the world, and another one is to not take ourselves too seriously.” But it is taking on serious clients.

As Kapwing’s toolset has grown, it has seen paying customers coming from Amazon, Sony, Netflix and Spotify. Now only 13% of what’s made with it are traditional text-plus-media memes. “Kapwing will always be designed for creators first: the students, artists, influencers, entrepreneurs, etc. who define and spread culture,” says Enthoven. “But we make money from the creative professionals, marketers, media teams and office workers who need to create content for work.”

Kapwing Tools

That’s why in addition to plenty of templates for employing the latest trending memes, Kapwing now helps Pro subscribers with permanent hosting, saving throughout the creation process and re-editing after export. Eventually it plans to sell enterprise licenses to let whole companies use Kapwing.

Kapwing Tools 1

Copycats are trying to chip away at its business, but Kapwing will use its new funding to keep up a breakneck pace of development. Pronounced “Ka-Pwing,” like a bullet ricochet, it’s trying to stay ahead of Imgflip, ILoveIMG, Imgur’s on-site tool and more robust apps like Canva.

If you’ve ever been stuck with a landscape video that won’t fit in an Instagram Story, a bunch of clips you want to stitch together or the need to subtitle something for accessibility, you’ll know the frustration of lacking a purpose-built tool. And if you’re on mobile, there are even fewer options. Unlike some software suites you have to install on a desktop, Kapwing works right from a browser.

Trending Memes Kapwing

” ‘Memes’ is such a broad category of media nowadays. It could refer to a compilation like the political singalong videos, animations like Shooting Star memes or a change in music like the AOC Dancing memes,” Enthoven explains. “Although they used to be edgy, memes have become more mainstream . . . Memes popularized new types of multimedia formats and made raw, authentic footage more acceptable on social media.”

As communication continues to shift from text to visual media, design can’t only be the domain of designers. Kapwing empowers anyone to storytell and entertain, whether out of whimsy or professional necessity. If big-name creative software from Adobe or Apple don’t simplify and offer easy paths through common use cases, they’ll see themselves usurped by the tools of the people.

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