Sep
13
2021
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MarginEdge, a restaurant management software company, raises $18M

MarginEdge announced Monday it raised $18 million in Series B funding to give restaurant operators a real-time view into their costs.

Co-founder and CEO Bo Davis founded the company with Roy Phillips and Brian Mills in 2015. Both Davis and Phillips are veterans of the restaurant industry: Davis was previously the founder of conveyor belt sushi restaurant chain Wasabi, while Phillips was an executive at Bloomin Brands.

What they recognized with independent restaurants was that they struggled with workflow like invoices and tracking food costs and were either building internal tools to help them stay on top of things or were still operating with pen and paper or spreadsheets.

“We focused on building something our friends would like,” Davis told TechCrunch. “We spent three years on the product and worked with 20 restaurants to use the software and focus on getting it right instead of rushing to market.”

MarginEdge’s tool is a restaurant management app that works with a business’ point of sale to streamline inventory, cost-tracking, ordering and recipes to eliminate the paperwork. It also captures all invoices, receipts or bills and converts them to line-item details within 24 hours. It is designed for independent restaurant owners that have under 50 units, Davis said.

Since launching its app in 2018, the Virginia-based company is seeing its platform used in over 2,500 restaurants. It raised a Series A in 2019, then an A2 in 2020 and with the latest round, led by Schooner, has raised $25 million in total.

IGC Hospitality, which operates restaurant properties, is not only an investor, but is also a customer, said Jeffrey Brosi, founder and managing partner. The company was using some different technology platforms to manage inventory and sales, but was looking for something to manage its whole inventory process.

“Bo came in and did a presentation, and it was amazing,” Brosi added. “The biggest thing for us is [being] user friendly. MarginEdge also has great customer service. We’ve invested in a few companies in the hospitality industry, and know the pain points and what we want to fix. If it makes sense financially, we will invest. This was one pain point that we didn’t have, and Bo filled that void.”

Like all restaurants over the past 18 months, Davis said the global pandemic caused MarginEdge to step back and evaluate. Despite many restaurants going out of business, he credits his business taking off again to restaurants rethinking their processes.

“We were lucky enough to be in a good position with capital that we could keep our team,” he added. “Revenue decreased for the first time, but we grew 45% even with COVID and as of Q1 was seeing 200% annual growth.”

MarginEdge has over 400 employees and its platform processes 45,000 invoices a week. Davis intends to invest the new funding in building out the leadership team, product development, building new features for the back office and on data science, an area he just received an advanced degree in, he said.

The company is using benchmark data around sales, food costs and labor costs and would like to provide more insights to its customers as it relates to inflation, which affects all of those aspects, and as a result, the menu prices.

“A lot of it is using data to understand menu pricing and what other people are doing so you are not pricing yourself out of the market or operating on margins where you can’t survive,” Davis added. “It will be all about predicting rather than reporting. The two things in the kitchen that are hardest are the startup prep list and the inventory late at night, and we make both easier.”

Sep
03
2021
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Barbershop technology startup theCut sharpens its platform with new $4.5M round

TheCut, a technology platform designed to handle back-end operations for barbers, raised $4.5 million in new funding.

Nextgen Venture Partners led the round and was joined by Elevate Ventures, Singh Capital and Leadout Capital. The latest funding gives theCut $5.35 million in total funding since the company was founded in 2016, founder Obi Omile Jr. told TechCrunch.

Omile and Kush Patel created the mobile app that provides information and reviews on barbers for potential customers while also managing appointments, mobile payments and pricing on the back end for barbers.

“Kush and I both had terrible experiences with haircuts, and decided to build an app to help find good barbers,” Omile said. “We found there were great barbers, but no way to discover them. You can do a Google search, but it doesn’t list the individual barber. With theCut, you can discover an individual barber and discover if they are a great fit for you and won’t screw up your hair.”

The app also enables barbers, perhaps for the first time, to have a list of clients and keep notes and photos of hair styles, as well as track visits and spending. By providing payments, barbers can also leverage digital trends to provide additional services and extras to bring in more revenue. On the customer side, there is a search function with barber profile, photos of their work, ratings and reviews, a list of service offerings and pricing.

Omile said there are 400,000 to 600,000 barbers in the U.S., and it is one of the fastest-growth markets. As a result, the new funding will be used to hire additional talent, marketing and to grow the business across the country.

“We’ve gotten to a place where we are hitting our stride and seeing business catapulting, so we are in hiring mode,” he added.

Indeed, the company generated more than $500 million in revenue for barbers since its launch and is adding over 100,000 users each month. In addition, the app averages 1.5 million appointment bookings each month.

Next up, Omile wants to build out some new features like a digital store and the ability to process more physical payments by rolling out a card reader for in-person payments. TheCut will also focus on enabling barbers to have more personal relationships with their customers.

“We are building software to empower people to be the best version of themselves, in this case barbers,” he added. “The relationship with customers is an opportunity for the barber to make specific recommendations on products and create a grooming experience.”

As part of the investment, Leadout founder and managing partner Ali Rosenthal joined the company’s board of directors. She said Omile and Patel are the kind of founders that venture capitalists look for — experts in their markets and data-driven technologists.

“They had done so much with so little by the time we met them,” Rosenthal added. “They are creating a passionate community and set of modern, tech-driven features that are tailored to the needs of their customers.”

 

Sep
02
2021
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Pixalate tunes into $18.1M for fraud prevention in television, mobile advertising

Pixalate raised $18.1 million in growth capital for its fraud protection, privacy and compliance analytics platform that monitors connected television and mobile advertising.

Western Technology Investment and Javelin Venture Partners led the latest funding round, which brings Pixalate’s total funding to $22.7 million to date. This includes a $4.6 million Series A round raised back in 2014, Jalal Nasir, founder and CEO of Pixalate, told TechCrunch.

The company, with offices in Palo Alto and London, analyzes over 5 million apps across five app stores and more 2 billion IP addresses across 300 million connected television devices to detect and report fraudulent advertising activity for its customers. In fact, there are over 40 types of invalid traffic, Nasir said.

Nasir grew up going to livestock shows with his grandfather and learned how to spot defects in animals, and he has carried that kind of insight to Pixalate, which can detect the difference between real and fake users of content and if fraudulent ads are being stacked or hidden behind real advertising that zaps smartphone batteries or siphons internet usage and even ad revenue.

Digital advertising is big business. Nasir cited Association of National Advertisers research that estimated $200 billion will be spent globally in digital advertising this year. This is up from $10 billion a year prior to 2010. Meanwhile, estimated ad fraud will cost the industry $35 billion, he added.

“Advertisers are paying a premium to be in front of the right audience, based on consumption data,” Nasir said. “Unfortunately, that data may not be authorized by the user or it is being transmitted without their consent.”

While many of Pixalate’s competitors focus on first-party risks, the company is taking a third-party approach, mainly due to people spending so much time on their devices. Some of the insights the company has found include that 16% of Apple’s apps don’t have privacy policies in place, while that number is 22% in Google’s app store. More crime and more government regulations around privacy mean that advertisers are demanding more answers, he said.

The new funding will go toward adding more privacy and data features to its product, doubling the sales and customer teams and expanding its office in London, while also opening a new office in Singapore.

The company grew 1,200% in revenue since 2014 and is gathering over 2 terabytes of data per month. In addition to the five app stores Pixalate is already monitoring, Nasir intends to add some of the China-based stores like Tencent and Baidu.

Noah Doyle, managing director at Javelin Venture Partners, is also monitoring the digital advertising ecosystem and said with networks growing, every linkage point exposes a place in an app where bad actors can come in, which was inaccessible in the past, and advertisers need a way to protect that.

“Jalal and Amin (Bandeali) have insight from where the fraud could take place and created a unique way to solve this large problem,” Doyle added. “We were impressed by their insight and vision to create an analytical approach to capturing every data point in a series of transactions —  more data than other players in the industry — for comprehensive visibility to help advertisers and marketers maintain quality in their advertising.”

 

Aug
16
2021
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Shopistry bags $2M to provide ‘headless commerce without the headaches’

Canada-based Shopistry wants to turn the concept of headless commerce, well, on its head. On Monday, the e-commerce startup announced $2 million in seed funding to continue developing its toolkit of products, integrations, services and managed infrastructure for brands to scale online.

Jaafer Haidar and Tariq Zabian started Shopistry in 2019. Haidar’s background is as a serial technology founder with exits and ventures in e-commerce and cloud software. He was working as a venture capitalist when he got the idea for Shopistry. Zabian is a former general manager at OLX, an online classified marketplace.

Shopistry enables customers to create personalized commerce experiences accessible to all. Haidar expects headless will become the dominant architecture over the next five years, though he isn’t too keen on calling it “headless.” He much prefers the term “modular.”

“It’s a modular system, we call it ‘headless without the headaches,’ where you grab the framework to manage APIs,” Haidar told TechCrunch. “After a company goes live, they can spend 50% of their budget just to keep the lights on. They use marketplaces like Shopify to do the tech, and we are doing the same thing, but providing way more optionality. We are not a monolithic system.”

Currently, the company offers five products:

  • Shopistry Console: Brands turn on their optimal stack and change anytime without re-platforming. There is support for multiple e-commerce administrative tools like Shopify or Square, payment providers, analytics and marketing capabilities.
  • Shopistry Cloud is a managed infrastructure spearheading performance, data management and orchestration across services.
  • Shopistry Storefront and Mobile to manage web storefronts and mobile apps.
  • Shopistry CMS, a data-driven, headless customer management system to create once and publish across channels.
  • Shopistry Services, an offering to brands that need design and engineering help.

Investors in the seed round include Shoptalk founder Jonathan Weiner, Hatch Labs’ Amar Varma, Garage Capital, Mantella Venture Partners and Raiven Capital.

“At MVP we love companies that can simplify complexity to bring the proven innovations of large, technically sophisticated retailers to the masses of small to midsize retailers trying to compete with them,” said Duncan Hill, co-founder and general partner at Mantella Venture Partners, in a written statement. “Shopistry has the team and tech to be a major player in this next phase of the e-commerce evolution. This was easy to get excited about.”

Shopistry is already working with retailers like Honed and Oura Ring to manage their e-commerce presences without the cost, complexity or need for a big technology team.

Prior to going after the seed funding, Haidar and Zabian spent two years working with high growth brands to build out its infrastructure. Haidar intends to use the new capital to future that development as well as bring on sales and marketing staff.

Haidar was not able to provide growth metrics just yet. He did say the company was growing its customer base and expects to be able to share that growth next year. He is planning to add more flexibility and integrations to the back end of Shopistry’s platform and add support for other platforms.

“We are focusing next on the go-to-market perspective while we gear up for our big launch coming in the fourth quarter,” he added. “There is also a big component to ‘after the sale,’ and we want to create some amazing experiences and focus on back office operations. We want to be the easiest way to control and manage data while maintaining a storefront.”

 

Aug
12
2021
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Consumer goods software company Aforza bags $22M to open US headquarters

Aforza, developing cloud and mobile apps for consumer goods companies, announced a $22 million Series A round led by DN Capital.

The London-based company’s technology is built on the Salesforce and Google Cloud platforms so that consumer goods companies can digitally transform product distribution and customer engagement to combat issues like unprofitable promotions and declining market share, Aforza co-founder and CEO Dominic Dinardo told TechCrunch. Using artificial intelligence, the company recommends products and can predict the order a retailer can make with promotions and pricing based on factors like locations.

The global market for consumer packaged goods apps is forecasted to reach $15 billion by 2024. However, the industry is still using outdated platforms that, in some cases, lead to a loss of 5% of sales when goods are out of stock, Dinardo said.

Aforza’s trade promotion designer mobile image. Image Credits: Aforza

Dinardo and his co-founders, Ed Butterworth and Nick Eales, started the company in 2019. All veterans of Salesforce, they saw how underserved the consumer goods industry was in terms of moving to digital.

Aforza is Dinardo’s first time leading a company. However, from his time at Salesforce he feels he got an education like going to “Marc Benioff’s School of SaaS.” The company raised an undisclosed seed round in 2019 from Bonfire Ventures, Daher Capital, DN Capital, Next47 and Salesforce Ventures.

Then the pandemic happened, which had many of the investors leaning in, which was validation of what Aforza was doing, Dinardo said.

“Even before the pandemic, the consumer goods industry was challenged with new market entrants and horrible legacy systems, but then the pandemic turned off pathways to customers,” he added. “Our mission is to improve the lives of consumers by bringing forth more sustainable products and packaging, but also helping companies be more agile and handle changes as the biggest change is happening.”

Joining DN Capital in the round were Bonfire Ventures, Daher Capital and Next47.

Brett Queener, partner at Bonfire Ventures, said he helped incubate Aforza with Dinardo and Eales, something his firm doesn’t typically do, but saw a unique opportunity to get in on the ground floor.

Also working at Salesforce, he saw the consumer goods industry as a major industry with a compelling reason to make a technology shift as customers began expecting instant availability and there were tons of emerging startups coming into the direct-to-consumer space.

Those startups don’t have a year or two to pull together the kind of technology it took to scale. With Aforza, they can build a product that works both online and off on any device, Queener said. And rather than planning promotions on a quarterly basis, companies can make changes to their promotional spend in real time.

“It is time for Aforza to tell the world about its technology, time to build out its footprint in the U.S. and in Europe, invest more in R&D and execute the Salesforce playbook,” he said. “That is what this round is about.”

Dinardo intends on using the new funding to continue R&D and to double its employee headcount over the next six months as it establishes its new U.S. headquarters in the Northeast. It is already working with customers in 20 countries.

As to growth, Dinardo said he is using his past experiences at startups like Veeva and Vlocity, which was acquired by Salesforce in 2020, as benchmarks for Aforza’s success.

“We have the money and the expertise — now we need to take a moment to breathe, hire people with the passion to do this and invest in new product tiers, digital assets and even payments,” he said.

 

Jun
09
2021
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Sinch snaps up MessageMedia for $1.3B to compete with Twilio in business SMS services

Sinch — the Swedish company that provides a suite of services for companies to build communications and specifically “customer engagement” into their services by way of APIs — has made yet another acquisition in its global march to scale up its business and compete more squarely with Twilio. The company today announced that it has acquired MessageMedia, a provider of SMS and other messaging services for businesses to manage customer relations, user authentication, alerts and more.

The acquisition is being made for $1.3 billion — comprised of $1.1 billion in cash and the rest in shares (or in Sweden’s currency, SEK10,745 million in total based on Sinch’s share price and yesterdays exchange rate). The deal is expected to close in the second half of this year.

The deal is notable not just for giving Sinch a major inroad into the world of business SMS, but also because of the timing. Less than a month ago, Sinch’s big rival Twilio announced that it would acquire ZipWhip, another big player in the same area of business SMS, for $850 million.

MessageMedia, based out of Melbourne, Australia, is currently operational also in New Zealand, the U.S. and Europe, and it focuses on providing services primarily to the SMB market with a self-service platform where customers can build and operate services, with the option of using a web portal provided by MessageMedia to handle the traffic.

It has some 60,000 customers and handles 5 billion+ messages annually, Sinch said. Growth is particularly strong in the U.S. market, where MessageMedia is adding 1,500 new customers each month. Alongside SMS, it also provides tech for companies to build MMS experiences and mobile landing pages, and it also provides them with tools to integrate other features as well as an API gateway.

Sinch itself says it handles some 150 billion mobile customer engagements for its customers annually, and it has eight of the 10 biggest tech companies as customers.

Sinch is publicly traded in Sweden and currently has a market cap of $13.6 billion, and the deal comes just weeks after the company announced that it would be raising $1.1 billion for more acquisitions, with a big chunk of the money coming from SoftBank, one of its major backers.

Given the size of this deal announced today, now we know which deal Sinch had in mind. It would be interesting to know whether Sinch’s move to buy MessageMedia predated Twilio’s for ZipWhip, which definitely does not feel like a coincidence.

“Sinch powers mobile customer engagement for some of the largest brands and technology platforms in the world. With the acquisition of MessageMedia, Sinch will now be able to bring the benefits of enhanced mobile customer engagement to every small business on the planet,” CEO Oscar Werner said to TechCrunch. “No longer will you need the deep pockets of an enterprise or the technical skills of an engineer to deliver first-class customer experiences.”

Sinch has been on a fast pace of buying up companies in recent times to scale up its existing business, tapping not just into the huge surge of people using phones and the internet to communicate in these pandemic-stricken times, but also to bulk up and have more economies of scale in the communications industry, essentially a business built on aggregating incremental revenues.

That fact has led to a lot of consolidation, with Twilio also buying up strategic, smaller businesses in quick order.

In this regard, MessageMedia is a strong buy for Sinch because it’s generating strong cash. MessageMedia is expected to make $151 million in profits for the year ending June 30, with gross profits of $94 million and EBITDA of $51 million, Sinch said. Sinch itself is also profitable.

Sinch’s other deals have included Inteliquent for $1.14 billion, ACL in India for $70 million and SAP’s digital interconnect business for $250 million.

For its part, MessageMedia very much plays into and is a product of the same API economy that has lifted the likes of Twilio, Stripe and many others built on the premise of knitting together very complex services, which customers can then use by way of simple lines of code that they integrate into their own digital operations, be it websites, apps, or internal systems.

Communications, and specifically messaging API-based systems are estimated to be a $9-13 billion market, Sinch said, with the U.S. accounting for 30% of that, and the global market projected to grow between 25-30% until 2024. SMBs, who might lack the resources to build such tools from the ground up, are a big part of that activity.

“Mobile messaging delivers tremendous ROI but smaller businesses often lack tools that cater to their specific needs,” said Paul Perrett, MessageMedia CEO, in a statement. “Serving these customers presents a tremendous opportunity, and with Sinch we can build a global leader in our field.”

May
20
2021
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Kleiner spots Spot Meetings $5M to modernize walk-and-talks for the Zoom generation

Trees, those deciduous entities you can occasionally see outdoors when not locked down or strapped down at a desktop ruminating on a video call, have long been the inspiration for fresh new ideas. Stories abound of how founders built companies while walking the foothills in Silicon Valley or around parks in San Francisco, and yet, we’ve managed over the past year to take movement mostly out of our remote work lives.

Chicago-based Spot Meetings wants to reinvigorate our meetings — and displace Zoom as the default meeting medium at the same time.

The product and company are just a few months old and remain in closed beta (albeit opening up a bit shortly here), and today the company is announcing $5 million in seed funding led by Ilya Fushman at Kleiner Perkins. That follows a $1.9 million pre-seed round led by Chapter One earlier this year.

CEO and co-founder Greg Caplan said that the team is looking to rebuild the meeting from the ground up for an audio-only environment. “On mobile, it needs to be abundantly simple to be very functional and understood for users so that they can actually use it on the go,” he described. In practice, that requires product development across a wide range of layers.

The product’s most notable feature today is that it has an assistant, aptly named Spot, which listens in on the call and which participants can direct commands to while speaking. For instance, saying “Spot Fetch” will pull the last 40 seconds of conversation, transcribe it, create a note in the meeting and save it for follow-up. That prevents the multi-hand tapping required to save a note or to-do list for follow-up with our current meeting products. You “don’t even need to take your phone out,” Caplan points out.

What gets more interesting is the collaboration layer the company has built into the product. Every audio meeting has a text-based scratch pad shared with all participants, allowing users to copy and paste snippets into the meeting as needed. Those notes and any information that Spot pulls in are saved into workspaces that can be referenced later. Spot also sends out emails to participants with follow-ups from these notes. If the same participants join another audio meeting later, Spot will pull in the notes from their last meeting so there is a running timeline of what’s been happening.

Spot’s product design emphasizes collaboration within an audio-focused experience. Image Credits: Spot Meetings

Obviously, transcription features are built-in, but Spot sees opportunities in offering edited transcripts of long calls where only a few minutes of snippets might be worth specifically following up on. So the product is a bit more deliberate in encouraging users to select the parts of a conversation that are relevant for their needs, rather than delivering a whole bolus of text that no one is ever actually going to read.

“Collaboration from now and the future is going to be primarily digital … in-person is forever going to be the exception and not the rule,” Caplan explained. Longer term, the company wants to add additional voice commands to the product and continue building an audio-first (and really, an audio-only) environment. Audio “very uniquely helps people focus on the conversation at hand,” he said, noting that video fatigue is a very real phenomenon today for workers. To that end, more audio features like smarter muting are coming. When a participant isn’t talking, their background noise will automatically melt away.

Before Spot Meetings, Caplan was the CEO and co-founder of Remote Year, a startup that was designing a service for company employees to take working trips overseas. I first covered it back in 2015, and it went on to raise some serious venture dollars before the pandemic hit last year and the company laid off 50% of its workforce. Caplan left as CEO in April last year, and the company was ultimately sold to Selina, which offers co-working spaces to travelers, in October.

Caplan’s co-founder who leads product and engineering at Spot Meetings is Hans Petter “HP” Eikemo. The duo met during the very first Remote Year cohort. “He has been a software engineer for two decades [and was] literally the first person I called,” Caplan said. The team will grow further with the new funding, and the company hopes to start opening its beta to its 6,000 waitlist users over the next 3-4 weeks.

May
08
2021
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When the Earth is gone, at least the internet will still be working

The internet is now our nervous system. We are constantly streaming and buying and watching and liking, our brains locked into the global information matrix as one universal and coruscating emanation of thought and emotion.

What happens when the machine stops though?

It’s a question that E.M. Forster was intensely focused on more than a century ago in a short story called, rightly enough, “The Machine Stops,” about a human civilization connected entirely through machines that one day just turn off.

Those fears of downtime are not just science fiction anymore. Outages aren’t just missing a must-watch TikTok clip. Hospitals, law enforcement, the government, every corporation — the entire spectrum of human institutions that constitute civilization now deeply rely on connectivity to function.

So when it comes to disaster response, the world has dramatically changed. In decades past, the singular focus could be roughly summarized as rescue and mitigation — save who you can while trying to limit the scale of destruction. Today though, the highest priority is by necessity internet access, not just for citizens, but increasingly for the on-the-ground first responders who need bandwidth to protect themselves, keep abreast of their mission objectives, and have real-time ground truth on where dangers lurk and where help is needed.

While the sales cycles might be arduous as we learned in part one and the data trickles have finally turned to streams in part two, the reality is that none of that matters if there isn’t connectivity to begin with. So in part three of this series on the future of technology and disaster response, we’re going to analyze the changing nature of bandwidth and connectivity and how they intersect with emergencies, taking a look at how telcos are creating resilience in their networks while defending against climate change, how first responders are integrating connectivity into their operations, and finally, exploring how new technologies like 5G and satellite internet will affect these critical activities.

Wireless resilience as the world burns

Climate change is inducing more intense weather patterns all around the world, creating second- and third-order effects for industries that rely on environmental stability for operations. Few industries have to be as dynamic to the changing context as telecom companies, whose wired and wireless infrastructure is regularly buffeted by severe storms. Resiliency of these networks isn’t just needed for consumers — it’s absolutely necessary for the very responders trying to mitigate disasters and get the network back up in the first place.

Unsurprisingly, no issue looms larger for telcos than access to power — no juice, no bars. So all three of America’s major telcos — Verizon (which owns TechCrunch’s parent company Verizon Media, although not for much longer), AT&T and T-Mobile — have had to dramatically scale up their resiliency efforts in recent years to compensate both for the demand for wireless and the growing damage wrought by weather.

Jay Naillon, senior director of national technology service operations strategy at T-Mobile, said that the company has made resilience a key part of its network buildout in recent years, with investments in generators at cell towers that can be relied upon when the grid cannot. In “areas that have been hit by hurricanes or places that have fragile grids … that is where we have invested most of our fixed assets,” he said.

Like all three telcos, T-Mobile pre-deploys equipment in anticipation for disruptions. So when a hurricane begins to swirl in the Atlantic Ocean, the company will strategically fly in portable generators and mobile cell towers in anticipation of potential outages. “We look at storm forecasts for the year,” Naillon explained, and do “lots of preventative planning.” They also work with emergency managers and “run through various drills with them and respond and collaborate effectively with them” to determine which parts of the network are most at risk for damage in an emergency. Last year, the company partnered with StormGeo to accurately predict weather events.

Predictive AI for disasters is also a critical need for AT&T. Jason Porter, who leads public sector and the company’s FirstNet first-responder network, said that AT&T teamed up with Argonne National Laboratory to create a climate-change analysis tool to evaluate the siting of its cell towers and how they will weather the next 30 years of “floods, hurricanes, droughts and wildfires.” “We redesigned our buildout … based on what our algorithms told us would come,” he said, and the company has been elevating vulnerable cell towers four to eight feet high on “stilts” to improve their resiliency to at least some weather events. That “gave ourselves some additional buffer.”

AT&T has also had to manage the growing complexity of creating reliability with the chaos of a climate-change-induced world. In recent years, “we quickly realized that many of our deployments were due to weather-related events,” and the company has been “very focused on expanding our generator coverage over the past few years,” Porter said. It’s also been very focused on building out its portable infrastructure. “We essentially deploy entire data centers on trucks so that we can stand up essentially a central office,” he said, empathizing that the company’s national disaster recovery team responded to thousands of events last year.

Particularly on its FirstNet service, AT&T has pioneered two new technologies to try to get bandwidth to disaster-hit regions faster. First, it has invested in drones to offer wireless services from the sky. After Hurricane Laura hit Louisiana last year with record-setting winds, our “cell towers were twisted up like recycled aluminum cans … so we needed to deploy a sustainable solution,” Porter described. So the company deployed what it dubs the FirstNet One — a “dirigible” that “can cover twice the cell coverage range of a cell tower on a truck, and it can stay up for literally weeks, refuel in less than an hour and go back up — so long-term, sustainable coverage,” he said.

AT&T’s FirstNet One dirigible to offer internet access from the air for first responders. Image Credits: AT&T/FirstNet

Secondly, the company has been building out what it calls FirstNet MegaRange — a set of high-powered wireless equipment that it announced earlier this year that can deploy signals from miles away, say from a ship moored off a coast, to deliver reliable connectivity to first responders in the hardest-hit disaster zones.

As the internet has absorbed more of daily life, the norms for network resilience have become ever more exacting. Small outages can disrupt not just a first responder, but a child taking virtual classes and a doctor conducting remote surgery. From fixed and portable generators to rapid-deployment mobile cell towers and dirigibles, telcos are investing major resources to keep their networks running continuously.

Yet, these initiatives are ultimately costs borne by telcos increasingly confronting a world burning up. Across conversations with all three telcos and others in the disaster response space, there was a general sense that utilities just increasingly have to self-insulate themselves in a climate-changed world. For instance, cell towers need their own generators because — as we saw with Texas earlier this year — even the power grid itself can’t be guaranteed to be there. Critical applications need to have offline capabilities, since internet outages can’t always be prevented. The machine runs, but the machine stops, too.

The trend lines on the frontlines are data lines

While we may rely on connectivity in our daily lives as consumers, disaster responders have been much more hesitant to fully transition to connected services. It is precisely in the middle of a tornado and the cell tower is down that you realize a printed map might have been nice to have. Paper, pens, compasses — the old staples of survival flicks remain just as important in the field today as they were decades ago.

Yet, the power of software and connectivity to improve emergency response has forced a rethinking of field communications and how deeply technology is integrated on the ground. Data from the frontlines is extremely useful, and if it can be transmitted, dramatically improves the ability of operations planners to respond safely and efficiently.

Both AT&T and Verizon have made large investments in directly servicing the unique needs of the first responder community, with AT&T in particular gaining prominence with its FirstNet network, which it exclusively operates through a public-private partnership with the Department of Commerce’s First Responder Network Authority. The government offered a special spectrum license to the FirstNet authority in Band 14 in exchange for the buildout of a responder-exclusive network, a key recommendation of the 9/11 Commission, which found that first responders couldn’t communicate with each other on the day of those deadly terrorist attacks. Now, Porter of AT&T says that the company’s buildout is “90% complete” and is approaching 3 million square miles of coverage.

Why so much attention on first responders? The telcos are investing here because in many ways, the first responders are on the frontiers of technology. They need edge computing, AI/ML rapid decision-making, the bandwidth and latency of 5G (which we will get to in a bit), high reliability, and in general, are fairly profitable customers to boot. In other words, what first responders need today are what consumers in general are going to want tomorrow.

Cory Davis, director of public safety strategy and crisis response at Verizon, explained that “more than ever, first responders are relying on technology to go out there and save lives.” His counterpart, Nick Nilan, who leads product management for the public sector, said that “when we became Verizon, it was really about voice [and] what’s changed over the last five [years] is the importance of data.” He brings attention to tools for situational awareness, mapping, and more that are a becoming standard in the field. Everything first responders do “comes back to the network — do you have the coverage where you need it, do you have the network access when something happens?”

The challenge for the telcos is that we all want access to that network when catastrophe strikes, which is precisely when network resources are most scarce. The first responder trying to communicate with their team on the ground or their operations center is inevitably competing with a citizen letting friends know they are safe — or perhaps just watching the latest episode of a TV show in their vehicle as they are fleeing the evacuation zone.

That competition is the argument for a completely segmented network like FirstNet, which has its own dedicated spectrum with devices that can only be used by first responders. “With remote learning, remote work and general congestion,” Porter said, telcos and other bandwidth providers were overwhelmed with consumer demand. “Thankfully we saw through FirstNet … clearing that 20 MHz of spectrum for first responders” helped keep the lines clear for high-priority communications.

FirstNet’s big emphasis is on its dedicated spectrum, but that’s just one component of a larger strategy to give first responders always-on and ready access to wireless services. AT&T and Verizon have made prioritization and preemption key operational components of their networks in recent years. Prioritization gives public safety users better access to the network, while preemption can include actively kicking off lower-priority consumers from the network to ensure first responders have immediate access.

Nilan of Verizon said, “The network is built for everybody … but once we start thinking about who absolutely needs access to the network at a period of time, we prioritize our first responders.” Verizon has prioritization, preemption, and now virtual segmentation — “we separate their traffic from consumer traffic” so that first responders don’t have to compete if bandwidth is limited in the middle of a disaster. He noted that all three approaches have been enabled since 2018, and Verizon’s suite of bandwidth and software for first responders comes under the newly christened Verizon Frontline brand that launched in March.

With increased bandwidth reliability, first responders are increasingly connected in ways that even a decade ago would have been unfathomable. Tablets, sensors, connected devices and tools — equipment that would have been manual are now increasingly digital.

That opens up a wealth of possibilities now that the infrastructure is established. My interview subjects suggested applications as diverse as the decentralized coordination of response team movements through GPS and 5G; real-time updated maps that offer up-to-date risk analysis of how a disaster might progress; pathfinding for evacuees that’s updated as routes fluctuate; AI damage assessments even before the recovery process begins; and much, much more. In fact, when it comes to the ferment of the imagination, many of those possibilities will finally be realized in the coming years — when they have only ever been marketing-speak and technical promises in the past.

Five, Gee

We’ve been hearing about 5G for years now, and even 6G every once in a while just to cause reporters heart attacks, but what does 5G even mean in the context of disaster response? After years of speculation, we are finally starting to get answers.

Naillon of T-Mobile noted that the biggest benefit of 5G is that it “allows us to have greater coverage” particularly given the low-band spectrum that the standard partially uses. That said, “As far as applications — we are not really there at that point from an emergency response perspective,” he said.

Meanwhile, Porter of AT&T said that “the beauty of 5G that we have seen there is less about the speed and more about the latency.” Consumers have often seen marketing around voluminous bandwidths, but in the first-responder world, latency and edge computing tends to be the most desirable features. For instance, devices can relay video to each other on the frontlines, without necessarily needing a backhaul to the main wireless network. On-board processing of image data could allow for rapid decision-making in environments where seconds can be vital to the success of a mission.

That flexibility is allowing for many new applications in disaster response, and “we are seeing some amazing use cases coming out of our 5G deployments [and] we have launched some of our pilots with the [Department of Defense],” Porter said. He offered an example of “robotic dogs to go and do bomb dismantling or inspecting and recovery.”

Verizon has made innovating on new applications a strategic goal, launching a 5G First Responders Lab dedicated to guiding a new generation of startups to build at this crossroads. Nilan of Verizon said that the incubator has had more than 20 companies across four different cohorts, working on everything from virtual reality training environments to AR applications that allow firefighters to “see through walls.” His colleague Davis said that “artificial intelligence is going to continue to get better and better and better.”

Blueforce is a company that went through the first cohort of the Lab. The company uses 5G to connect sensors and devices together to allow first responders to make the best decisions they can with the most up-to-date data. Michael Helfrich, founder and CEO, said that “because of these new networks … commanders are able to leave the vehicle and go into the field and get the same fidelity” of information that they normally would have to be in a command center to receive. He noted that in addition to classic user interfaces, the company is exploring other ways of presenting information to responders. “They don’t have to look at a screen anymore, and [we’re] exploring different cognitive models like audio, vibration and heads-up displays.”

5G will offer many new ways to improve emergency responses, but that doesn’t mean that our current 4G networks will just disappear. Davis said that many sensors in the field don’t need the kind of latency or bandwidth that 5G offers. “LTE is going to be around for many, many more years,” he said, pointing to the hardware and applications taking advantage of LTE-M standards for Internet of Things (IoT) devices as a key development for the future here.

Michael Martin of emergency response data platform RapidSOS said that “it does feel like there is renewed energy to solve real problems,” in the disaster response market, which he dubbed the “Elon Musk effect.” And that effect definitely does exist when it comes to connectivity, where SpaceX’s satellite bandwidth project Starlink comes into play.

The Future of Technology and Disaster Response

Satellite uplinks have historically had horrific latency and bandwidth constraints, making them difficult to use in disaster contexts. Furthermore, depending on the particular type of disaster, satellite uplinks can be astonishingly challenging to setup given the ground environment. Starlink promises to shatter all of those barriers — easier connections, fat pipes, low latencies and a global footprint that would be the envy of any first responder globally. Its network is still under active development, so it is difficult to foresee today precisely what its impact will be on the disaster response market, but it’s an offering to watch closely in the years ahead, because it has the potential to completely upend the way we respond to disasters this century if its promises pan out.

Yet, even if we discount Starlink, the change coming this decade in emergency response represents a complete revolution. The depth and resilience of connectivity is changing the equation for first responders from complete reliance on antiquated tools to an embrace of the future of digital computing. The machine is no longer stoppable.

Apr
08
2021
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Quiq acquires Snaps to create a combined customer messaging platform

At first glance, Quiq and Snaps might sound like similar startups — they both help businesses talk to their customers via text messaging and other messaging apps. But Snaps CEO Christian Brucculeri said “there’s almost no overlap in what we do” and that the companies are “almost complete complements.”

That’s why Quiq (based in Bozeman, Montana) is acquiring Snaps (based in New York). The entire Snaps team is joining Quiq, with Brucculeri becoming senior vice president of sales and customer success for the combined organization.

Quiq CEO Mike Myer echoed Bruccleri’s point, comparing the situation to dumping two pieces of a jigsaw puzzle on the floor and discovering “the two pieces fit perfectly.”

More specifically, he told me that Quiq has generally focused on customer service messaging, with a “do it yourself, toolset approach.” After all, the company was founded by two technical co-founders, and Myer joked, “We can’t understand why [a customer] can’t just call an API.” Snaps, meanwhile, has focused more on marketing conversations, and on a managed service approach where it handles all of the technical work for its customers.

In addition, Myer said that while Quiq has “really focused on the platform aspect from beginning” — building integrations with more than a dozen messaging channels including Apple Business Chat, Google’s Business Messages, Instagram, Facebook Messenger and WhatsApp — it doesn’t have “a deep natural language or conversational AI capability” the way Snaps does.

Myer said that demand for Quiq’s offering has been growing dramatically, with revenue up 300% year-over-year in the last six months of 2020. At the same time, he suggested that the divisions between marketing and customer service are beginning to dissolve, with service teams increasingly given sales goals, and “at younger, more commerce-focused organizations, they don’t have this differentiation between marketing and customer service” at all.

Apparently the two companies were already working together to create a combined offering for direct messaging on Instagram, which prompted broader discussions about how to bring the two products together. Moving forward, they will offer a combined platform for a variety of customers under the Quiq brand. (Quiq’s customers include Overstock.com, West Elm, Men’s Wearhouse and Brinks Home Security, while Snaps’ include Bryant, Live Nation, General Assembly, Clairol and Nioxin.) Brucculeri said this will give businesses one product to manage their conversations across “the full customer journey.”

“The key term you’re hearing is conversation,” Myer added. “It’s not about a ticket or a case or a question […] it’s an ongoing conversation.”

Snaps had raised $13 million in total funding from investors including Signal Peak Ventures. The financial terms of the acquisition were not disclosed.

Mar
01
2021
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Twilio to become minority owner in Syniverse Technologies with $750M investment

Syniverse Technologies, a company that helps mobile providers move communications across public and private networks, announced an extensive partnership with Twilio this morning. Under the agreement, Twilio is investing up to $750 million to become a minority owner in the company.

The idea behind the partnership is to combine Twilio’s API communications expertise with Syniverse’s mobile carrier contacts to create this end-to-end communications system. Twilio’s strength has always been its ability to deliver communications like texts without having a carrier relationship. This deal gives them access to that side of the equation.

James Attwood, executive chairman at Syniverse, certainly saw the value of the two companies working together. “The partnership will provide Syniverse access to Twilio’s extensive enterprise and API services expertise, creating opportunities to continue to build on Syniverse’s highly innovative product portfolio that helps mobile network operators and enterprises make communications better for their customers,” Attwood said in a statement.

Today’s deal comes on the heels of the company’s $3.2 billion acquisition of Segment at the end of last year as it continues to look for ways to expand its markets. Will Townsend, an analyst at Moor Insight & Strategy who covers the network and carrier markets, sees this deal giving Twilio access to a broader set of technologies.

“Twilio [gets] access to Syniverse’s significant capabilities in massive industrial IoT and private 4G LTE and 5G cellular networking. Both are poised to ramp significantly given newfound enterprise access to licensed spectrum via recent C-Band and CBRS auctions,” Townsend told me. He believes this will help Twilio reach parts of the enterprise not connected by Wi-FI or where the customers are dealing with “a mishmash of solutions that don’t scale or propagate well.”

As it turns out, it’s not a coincidence the two companies are coming together like this. In fact, Twilio has been a Syniverse customer for some time, according to Chee Chew, chief product officer at Twilio.

It’s a case of an old-school company like Syniverse, which was founded in 1987, combining forces with a more modern approach to communications like Twilio, which provides developers with APIs to deliver communications services inside applications with just a couple of lines of code.

The Wall Street Journal, which broke the news of this deal, is also reporting the company could go public via SPAC at a value of between $2 and $3 billion some time later this year. That would suggest that it has not gained much value since the 2010 deal.

Holger Mueller, an analyst at Constellation Research, says the SPAC provides an interesting additional component to the deal. “The high-flying stock market creates all kind of new chickens, one of them being a SPAC, and that’s the financial opportunity that Twilio is likely pursuing with the investment into Syniverse. The more immediate benefit is for Twilio to use the messaging vendor for its services. Call it a partnership with investment upside,” Mueller said.

According to Syniverse, “the company is one of the largest private IP Packet Exchange (IPX) providers in the world and offers a range of networking solutions, excelling in scenarios where seamless connections must cross over networks — either across multiple private networks or between public and private networks.”

The company is currently owned by the Carlyle Group private equity firm, which bought it in 2010 for $2.6 billion. Twilio launched in 2008 and raised over $236 million before going public in 2016 at $15 per share. The stock was up 3.82% in early trading, suggesting that Wall Street approves of the deal.


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