Feb
24
2021
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VCs are chasing Hopin upwards of $5-6B valuation

Virtual events platform Hopin is hopin’ for a mega valuation.

According to multiple sources who spoke with TechCrunch, the company, which was founded in mid-2019, is running around the fundraise circuit and perhaps nearing the end of a fundraise in which it is looking to raise roughly $400 million at a pre-money valuation of $5 billion for its Series C. The two names out in front, likely part of a joint ticket, are thought to be Andreessen Horowitz and General Catalyst.

Two sources implied that the valuation could have gone as high as $6 billion, but with greater dilution based on some offered terms the company has received. The deal is in flux, and both the round size and valuation are subject to change.

One source told TechCrunch that the company’s ARR has grown to $60 million, implying a valuation multiple of 80-100x if the valuation we’re hearing pans out. That sort of multiple wouldn’t be out of line with other major fundraises for star companies with SaaS-based business models.

Hopin has been on a fundraise tear in recent months. The company raised $125 million at a $2.125 billion valuation late last year for its Series B, which came just a few months after it raised a Series A of $40 million over the summer and a $6.5 million seed round last winter. All told, the roughly 20-month-old company has raised a known $171.4 million in VC according to Crunchbase.

When we last reported on the company, Hopin’s ARR had gone from $0 to $20 million, while its overall userbase had grown from essentially zero to 3.5 million users in November. The company reported then that it had 50,000 groups using its platform.

Hopin’s platform is designed to translate the in-person events experience into a virtual one, providing tools to recreate the experience of walking exhibition floors, networking one-on-one and spontaneously joining fireside chats and panels. It’s become a darling in the midst of the COVID-19 pandemic, which has seen most business and educational conferences canceled in the midst of mass restrictions on domestic and international travel worldwide.

It’s probably also useful to note that our business team uses Hopin to run all of TechCrunch’s editorial events, including Disrupt, Early Stage, Extra Crunch Live and next week’s TechCrunch Sessions: Justice 2021 event (these software selections and their costs are — thankfully — outside the purview of our editorial team).

Hopin may be the mega-leader of the virtual events space right now, but it isn’t the only startup trying to take on this suddenly vital industry. Run The World raised capital last year, Welcome wants to be the ‘Ritz-Carlton for event platforms,’ Spotify is getting into the business, Clubhouse is arguably a contender here, InEvent raised a seed earlier this month and Hubilo is another entrant which nabbed a check from Lightspeed a few months ago. Plus, quite literally dozens of other startups have either started in the space or are pivoting toward it.

We have reached out to Hopin for comment.

Post updated to report that Andreessen Horowitz and General Catalyst are in the lead.

Feb
22
2021
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Rows, formerly dashdash, raises $16M to build and populate web apps using only spreadsheet skills

Spreadsheet software — led by products like Microsoft’s Excel, Google’s Sheets and Apple’s Numbers — continues to be one of the most-used categories of business apps, with Excel alone clocking up more than a billion users just on its Android version. Now, a startup called Rows that’s built on that ubiquity, with a low-code platform that lets people populate and analyze web apps using just spreadsheet interfaces, is announcing funding and launching a freemium open beta of its expanded service.

The Berlin-based startup — which rebranded from dashdash at the end of last year — closed a Series B round of $16 million, money that it is using to continue investing in its platform as well as in sales and marketing. The platform’s move into an open beta comes with some 50 new integrations with other platforms like LinkedIn, Instagram and more, as well as 200 new features (using known spreadsheet shortcuts) to use in them.

The round was led by Lakestar, with past investors Accel (which led its $8 million Series A in 2018) and Cherry Ventures also participating. Christian Reber has also invested in this round. Reber knows a thing or two about software disrupting legacy productivity software — he is the co-founder and CEO of presentation software startup Pitch and the former CEO and founder of Microsoft-acquired Wunderlist — and notably he is joining Rows’ Advisory Board along with the investment.

A little detail about this Series B: CEO Humberto Ayres Pereira, who is based out of Porto, Portugal, where some of the staff is also based, tells us that this round actually was quietly closed over a year ago, in January 2020 — just ahead of the world shutting down amid the COVID-19 pandemic.

The startup chose to announce that round today to coincide with adding more features to its product and moving it into an open beta, he said.

That open beta is free in its most basic form — the free tier is limited to 10 users or less and a minimal amount of integration usage. Paid tiers, which cover more team members and up to 100,000 integration tasks (which are measured by how many times a spreadsheet queries another service), start at $59 per month.

One strong sign of interest in this latest iteration of the software is the lasting popularity of spreadsheets. Another is Rows’ traction to date: in invite-only mode, it picked up 10,000 users off its waitlist, and hundreds of companies, as customers. Currently most of those are free, Ayres Pereira said.

“Our goal is to have 1,000 paying companies as customers in the 12 months,” he said. That process has only just started, he added, with paying numbers in the modest “dozens” for now. He emphasized though that the company is very cash efficient and has, even without raising more funding, two years of runway on the money it has in the bank now.

The growing appeal of low-code

No-code and low-code software, which let people create and work with apps and other digital content without delving deep into the lines of code that underpin them, have continued to pick up traction in the market in the last several years.

The reason for this is straightforward: non-technical employees may not code, but they are getting increasingly adept at understanding how services function and what can be achieved within an app.

No-code and low-code platforms let them get more hands-on when it comes to customizing and creating the services that they need to use everyday to get their work done, without the time and effort it might take to get an engineer involved.

“People want to create their own tools,” said Ayres Pereira. “They want to understand and test and iterate.” He said that the majority of Rows’ users so far are based out of North America, and typical use cases include marketing and sales teams, as well as companies using Rows spreadsheets as a dynamic interface to manage logistics and other operations.

Stephen Nundy, the partner at Lakestar who led its investment, describes the army of users taking up no-code tools as “citizen developers.”

Rows is precisely the kind of platform that plays into the low-code trend. For people who are already au fait with the kinds of tools that you find in spreadsheets — and something like Excel has hundreds of functions in it — it presents a way of leaning on those familiar functions to trigger integrations with other apps, and to subsequently use a spreadsheet created in Rows to both analyse data from other apps, as well as update them.

Image: Rows

You might ask, why is it more useful, for example, to look at content from Twitter in Rows rather than Twitter itself? A Rows document might let a person search for a set of Tweets using a certain chain of keywords, and then organise those results based on parameters such as how many “likes” those Tweets received.

Or users responding to a call to action for a promotion on Instagram might then be cross-referenced with a company’s existing database of customers, to analyze how those respondents overlap or present new leads.

You might also wonder why existing spreadsheet products may not have already build functionality like this.

Interestingly, Microsoft did dabble in building a way of linking up Excel with some rudimentary computing functions, in the form of Visual Basic for Applications. This however reached the dubious distinction of topping developers’ “most dreaded” languages list for two years running, and so as you might imagine it has somewhat died a death.

However, it does point to an opportunity for incumbents to disrupt their disruptors.

Apart from those most obvious, entrenched competitors, there have been a number of other startups building tools that are providing similar no- and low-code approaches.

Gyana is focusing more on data science, Tray.io provides a graphical interface to integrate how apps work together, Zapier and Notion also provide simple interfaces to integrate apps and APIs together and Airtable has its own take on reinventing the spreadsheet interface. For now, Ayres Pereira sees these more as compatriots than competitors.

“Yes, we overlap with services like Zapier and Notion,” he said. “But I’d say we are friends. We’re all raising awareness about people being able to do more and not having to be stuck using old tools. It’s not a zero sum game for us.”

When we covered Rows’s Series A two years ago, the startup had built a platform to let people who are comfortable working with data in spreadsheets use that interface to create and populate content in web apps. It had a lot of extensibility, but mainly geared at people still willing to do the work to create those links.

Two years on, while the spreadsheet has remained the anchor, the platform has grown. Ayres Pereira, who co-founded the company with Torben Schulz (both pictured above), said that there are some 50 new integrations now, including ways to analyse and update content on social media platforms like Instagram, YouTube, CrunchBase, Salesforce, Slack, LinkedIn and Twitter, as well as some 200 new features in the platform itself.

While people can import into Rows data from Google Sheets, he noted that the big daddy of them all, Excel, is not supported right now. The reason, he said, is because the vast majority of users of the product use the desktop version, which does not have APIs.

Meanwhile, Rows also has a number of templates available for people to guide them through simple tasks, such as looking up LinkedIn profiles or emails for a list of people, tracking social media counts and so on.

One of the most common aspects of spreadsheets, however, has yet to be built. The interface is still banked around rows and columns, but with no graphical tools to visualize data in different ways such as pie charts or graphs as you might have in a typical spreadsheet program.

It’s for this reason that Rows has yet to exit beta. The feature is one that is requested a lot, Pereira admitted, describing it as “the final frontier.” When Rows is ready to ship with that functionality, likely by Q3 of this year, it will tick over to general “1.0” release, he added.

“Humberto and Torben have really impressed us with their ambition to disrupt the market with a new spreadsheet paradigm that tackles the significant shortcomings of today’s solutions,” said Nundy at Lakestar. “Data integrations are native, the collaboration experience is first class and the ability to share and publish your work as an application is unique and will create more ‘Citizen developers’ to emerge. This is essential to the growing needs of today’s technology literate workforce. The level of interest they’ve received in their private beta is proof of the desirability of platforms like Rows, and we’re excited to be supporting them through their public beta launch and beyond with this investment.” Nundy is also joining Rows’ board with this round.

Feb
17
2021
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Sinch acquires Inteliquent for $1.14B to take on Twilio in the US

After raising $690 million from SoftBank in December to make acquisitions, the Sweden-based cloud communications company Sinch has followed through on its strategy in that department. Today the company announced that it is acquiring Inteliquent, an interconnection provider for voice communications in the U.S. currently owned by private equity firm GTCR, for $1.14 billion in cash.

And to finance the deal, Sinch said it has raised financing totaling SEK8.2 billion — $986 million — from Handelsbanken and Danske Bank, along with other facilities it had in place.

The deal will give Sinch — a competitor to Twilio with a range of messaging, calling and marketing (engagement) APIs for those building communications into their services in mobile apps and other services — a significant foothold in the U.S. market.

Inteliquent — a profitable company with 500 employees and revenues of $533 million, gross profit of $256 million and EBITDA of $135 million in 2020 — claims to be one of the biggest voice carriers in North America, serving both other service providers and enterprises. Its network connects to all the major telcos, covering 94% of the U.S. population, with more than 300 billion minutes of voice calls and 100 million phone numbers handled annually for customers.

Sinch is publicly traded in Sweden — where its market cap is currently at $13 billion (just over 108 billion Swedish krona) — and the acquisition begs the question of whether the company plans to establish more of a financial presence in the U.S., for example with a listing there. We have asked the company what its next steps might be and will update this post as and when we learn more.

“Becoming a leader in the U.S. voice market is key to establish Sinch as the leading global cloud communications platform,” said Oscar Werner, Sinch CEO, in a statement. “Inteliquent serves the largest and most demanding voice customers in America with superior quality backed by a fully-owned network across the entire U.S.. Our joint strengths in voice and messaging provide a unique position to grow our business and power a superior customer experience for our customers.”

Inteliquent provides two main areas of service, Communications-Platform-as-a-Service (CPaaS) for API-based services to provide voice calling and phone numbers; and more legacy Infrastructure-as-a-Service (IaaS) products for telcos such as off-net call termination (when a call is handed off from one carrier to another) and toll-free numbers. These each account for roughly half of the total business although — unsurprisingly — the CPaaS business is growing at twice the rate of IaaS.

Its business, like many others focusing on services for people who are relying more on communications services as they are seeing each other in person less — saw a surge of use this past year, it said. (Revenues adjusted without COVID lift, it noted, would have been $499 million, so still healthy.)

Sinch is focused on delivering unparalleled customer experiences at scale and with the investors we have today, we believe we have the financial muscle for both extensive product development and M&A that is needed to take advantage of a consolidating global market as we continue building the leading CPaaS company,” Werner told TechCrunch over email.

As for Sinch, since being founded by CLX in 2008 (its name was a rebrand after CLX acquired Sinch, which spun out from Rebtel in 2014) to take on the business of providing communications tools to developers, it has been on an acquisition roll to bulk up its geographical reach and the services that it provides to those customers.

Deals have included, most recently, buying ACL in India for $70 million and SAP’s digital interconnect business for $250 million. The deals — combined with Twilio’s own acquisitions of companies like SendGrid for $2 billion and last year’s Segment for $3.2 billon, speak both to the bigger trend of consolidation in the digital (API-based) communications space, as well as the huge value that is contained within it.

Inteliquent itself had been in private equity hands before this, controlled by GTCR based in Chicago, like Inteliquent itself. According to PitchBook, its most recent financing was a mezzanine loan from Oaktree Capital in 2018 for just under $19 million.

Interestingly, Inteliquent itself has been an investor in innovative communications startups, participating in a Series B for Zipwhip, a startup that is building better ways to integrate mobile messaging tools into landline services.

“We’re excited about the tremendous opportunities this combination unlocks, expanding the services we can provide to our customers. Combining our leading voice offering with Sinch’s global messaging capabilities truly positions us for leadership in the rapidly developing market for cloud communications“, comments Ed O’Hara, Inteliquent CEO, in a statement.

Feb
04
2021
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BigChange raises $102M for a platform to help manage service fleets

We talk a lot these days about the future of work and the proliferation of new and better tools for distributed workforces, but companies focused on developing fleet management software — even if they have not really been viewed as “tech startups” — have been working on this problem for many years already. Today, one of the older players in the field is announcing its first significant round of investment, a sign both of how investors are taking more notice of these B2B players, and how the companies themselves are seeing a new opportunity for growth.

BigChange, a U.K. startup that builds fleet management software to help track and direct jobs to those on the go whose “offices” tend to be vehicles, has closed a round of £75 million ($102 million at today’s rates). U.S. investor Great Hill Partners led the round.

The company has built a business by tapping into the advances of technology to build apps for field service engineers and those back at the mothership who run operations and help manage their jobs, workers who in the past might have used phone calls, paperwork and lots of extra round trips between offices and sites in order to run things.

“I founded BigChange to revolutionise mobile workforce management and bring it into the 21st century. Our platform eliminates paperwork, dramatically cuts carbon, creates efficiency, promotes safer driving and means that engineers are spending less time on the roads or filling out forms and more time completing jobs,” said founder and CEO Martin Port in a statement. “We are incredibly excited to partner with Great Hill and leverage their successful track-record scaling vertical and enterprise software companies both in the U.K. and overseas.”

BigChange said that Great Hill’s stake values the company at £100 million (or $136 million). One report points to part of that funding being a secondary transaction, with Port pocketing £48 million of that. The company has been around since 2012 and appears to be profitable. It has raised very little in funding (around $2 million) before this, at one point trying to raise an angel round but cancelling the process before it completed, according to filings tracked by PitchBook.

As the technology industry continues to become essentially a part of every other industry in the world, this deal is notable as a sign of how its boundaries are expanding and getting more blurred.

BigChange is not a London startup, nor from the Cambridge or Oxford areas, nor from Bristol or anywhere in the south. It’s from the north, specifically Leeds — a city that has an impressive number of startups in it even if these have not had anything like the funding or attention that startups in cities and areas in the South have attracted. (One eye-catching exception is the online store Pharmacy2U: the Leeds startup has been backed by Atomico, BGF and others: given the interest of companies like Amazon to grow in this space, it’s likely one to watch.)

One of the big themes in technology right now is how a lot of the action is getting decentralised — a result of many of us now working remotely to stave off the spread of COVID-19, many people using that situation to reconsider whether they need to be living in any specific place at all, and subsequently choosing to relocate from expensive regions like the Bay Area to other places for better quality of life.

There are of course other cities, like Manchester, Edinburg, Cardiff and more in the U.K., with technology ecosystems (just as there have been across many cities in the U.S. for years). But when one of these, this time out of Leeds, attracts a significant funding round, it points to the potential of something similar playing out in the U.K., too, with not just talent but more money going into regions beyond the usual suspects.

The other part of the decentralisation story here focuses on what BigChange is actually building.

Here, it’s one of the many companies that have dived into the area of building apps and larger pieces of software aimed not at “knowledge workers” but those who do not sit at desks, are on the move and tend to work with their hands. For those who are on the road, it has apps to better manage their jobs and routes (which it calls JourneyWatch). For those back in the dispatch part of the operations, it has an app to track them better and use the software to balance the jobs and gain further analytics from the work (sold as JobWatch). These work on ruggedised devices and lean on SaaS architecture for distribution, and there are some 50,000 people across some 1,500 organizations using its apps today, with those customers located around the world, but with a large proportion of them in the U.K. itself.

BigChange is not the only company targeting workers in the field. We covered a significant funding round for another one of them out of North America, Jobber, which builds software for service professionals, just last month. Others tapping into the opportunity of bringing tech to a wider audience beyond knowledge workers include Hover (technology and a wider set of tools for home repair people to source materials, make pricing and work estimates, and run the administration of their businesses) and GoSite (a platform to help all kinds of SMBs — the key factor being that many of them are coming online for the first time — build out and run their businesses). Others in this specific area include Klipboard, Azuga, ServiceTitan, ServiceMax and more.

You might recognise the name Great Hill Partners as the PE firm that has taken majority stakes in a range of media companies like Gizmodo, Ziff Davis (way back when) and Storyblocks, and backed companies like The RealReal and Wayfair. In this case, the company was attracted by how BigChange was being adopted by a very wide range of industries that fall under “field service” as part of their workload.

“Unlike niche players that focus on smaller customers and specific sub-verticals, Martin and his accomplished team have built a flexible, all-in-one platform for field service professionals and operators,” said Drew Loucks, a partner at Great Hill Partners, in a statement. “BigChange’s technology is differentiated not only by its ability to serve commercial and residential clients of nearly any scale or vertical, but also by its award-winning product development and customer service capabilities.”

Feb
03
2021
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Granulate nabs $30M for software to optimize workloads and latency

Services like video streaming, gaming, media-intensive advertising and marketing technology are putting more strain on bandwidth and backend latency than ever before due to the surge of online traffic in the last year. But for most organizations in today’s usage-based cloud world, that can represent a huge cost in compute power — or a major investment in a company’s own latency technology — to try to address that.

This has created an opportunity for startups building optimization tools. Today, one called Granulate — which has built software for organizations to handle those loads more intelligently and cost-effectively — is announcing a round of funding after seeing a huge boost in business in the last 10 months, with customer growth up 360% and revenues growing 570%.

The Tel Aviv startup has picked up $30 million, a Series B, led by Red Dot Capital Partners, with previous backers Insight Partners, TLV Partners and Hetz Ventures, and new backer Dawn Capital, also participating.

The timing of this Series B speaks to the demand in the market right now: It comes on the back of Granulate closing a $12 million Series A only in April last year. Investors say that its business growth is what prompted them to re-up so soon.

“Granulate’s unique technology and impressive growth since their last funding round reflects a rising market demand for their game-changing optimization solution,” said Yaniv Stern, managing partner at Red Dot Capital Partners, in a statement. “For companies facing rising infrastructure costs or focusing on operating cost reduction, Granulate offers a solution that can drive additional improvement regardless of any other solutions already deployed by their clients.”

Granulate is not disclosing its valuation with this latest round, which brings the total raised by the startup to $45 million. 

The opportunity in the market that Granulate is targeting is the fact that media-heavy content, and services like e-commerce that rely on efficient responsiveness on sites and apps to keep people from abandoning their shopping carts, are all on the rise.

But as companies look to keep customers happy with better-quality services, they are also trying to keep an eye on margins and therefore want to keep infrastructure and computing costs low.

Granulate’s solution is software that sits at the server layer — either in the cloud or on-premises, as a customer prefers — that uses AI to detect workloads that a customer tags as important and prioritize them so that they work more efficiently. Granulate said that its software can improve response times by up to 40%, and throughput up to five times, while reducing costs by up to 60%. The company today has partnerships with AWS and Microsoft’s Azure and is in the “early stages” of talks with Google Cloud Platform.

Bigger tech companies like Netflix, Google and Amazon typically invest huge sums to build their own optimization technology, but it’s an area that smaller organizations (and you can still be huge while still being smaller than companies like Google) will not have the bandwidth — pun intended — to address in the same way.

“We are aware of similar things going on inside of Netflix as what we have built,” Asaf Ezra, co-founder and CEO of Granulate, said in an interview. “But to us, it’s a testament of how large you need to be to address this issue and the talent you need to hire to address the lowest-level issues.”

The company’s customers include at least one major retailer (which it can’t name), AppsFlyer, Period and PicsArt.

What will be interesting to watch is how the growth of 5G will affect the bigger problem: As Ezra notes, it will undoubtedly improve front-end latency.

“5G will not cannibalize Granulate,” he said. “In fact, when it becomes standard, the round trip time will be reduced for data, but the front end will be less of the ratio of the time, while the back-end latency will become more of the problem. 5G would solve only the access to your server, but not latency at the server itself.”

Longer term, it’s likely that Granulate will add more optimization and management solutions around those it already offers for latency, Ezra said, while also looking for ways to stand out apart from others in the same space. Competitors are in the process of some consolidation — witness Spot acquired by NetApp last June — so features based around a wider platform will likely be a key way to keep customers interested.

Feb
02
2021
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Oyster snaps up $20M for its HR platform aimed at distributed workforces

The growth of remote working and managing workforces that are distributed well beyond the confines of a centralized physical office — or even a single country — have put a spotlight on the human resources technology that organizations use to help manage those people. Today, one of the HR startups that’s been seeing a surge of growth is announcing a round of funding to double down on its business.

Oyster, a startup and platform that helps companies through the process of hiring, onboarding and then providing contractors and full-time employees in the area  of “knowledge work” with HR services like payroll, benefits and salary management, has closed a Series A round of $20 million.

The company is already working in 100 countries, and CEO and Tony Jamous (who co-founded the company with Jack Mardack) said in an interview that the plan is to expand that list of markets, and also bring in new services, particularly to address the opportunity in emerging markets to hire more people.

Currently, Oyster does not cover candidate sourcing or any of the interviewing and evaluation process: those could be areas where it might build its own tech or partner to provide them as part of its one-stop shop. It has dabbled in virtual job fairs, as a pointer to one potential product that it might explore.

“There are 1.5 billion knowledge workers coming into the workforce in the next 10 years, mostly from emerging economies, while in developed economies there are some 90 million jobs unfilled,” Jamous said. “There are super powers you can gain from being globally distributed, but it poses a major challenge around HR and payroll.”

Emergence Capital, the B2B VC that has backed the likes of Zoom, Salesforce, Bill.com and our former sister site Crunchbase, is leading the funding. The Slack Fund (Slack’s strategic investment vehicle) and London firm Connect Ventures (which has previously backed the company at seed stage) are also participating. The investment will accelerate Oyster’s rapid growth, and support its mission of enabling people to work from anywhere.

Oyster’s valuation is not being disclosed. The startup has raised about $24 million to date.

One of the great ironies of the global health pandemic is that while our worlds have become much smaller — travel and even local activities have been drastically curtailed, and many of us spend day in, day out at home — the employment opportunity and scope of how organizations are expected to operate has become significantly bigger.

Public health-enforced remote working has led to companies de-coupling workers from offices, and that has opened the door to seeking out and working with the best talent, regardless of location.

This predicament may have become more acute in the last year, but it’s been one that has been gradually coming into focus for years, helped by trends in cloud computing and globalization. Jamous said that the idea for Oyster that came to him was something he’s been thinking about for years, but became more apparent when he was still at his previous startup, Nexmo — the cloud communications provider that was acquired by Vonage for $230 million in in 2016. 

At Nexmo we wanted to be a great local employer. We were headquartered in two countries but wanted to have people everywhere,” he said. “We spent millions building employment infrastructure to do that, becoming knowledgeable about local laws in France, Korea and more countries.” He realized quickly that this was a highly inefficient way to work. “We weren’t ready for the complexity and diversity of issues that would come up.”

After he moved on from Nexmo and did some angel investing (he backs other distributed work juggernauts like Hopin, among others), he decided that he would try to tackle the workforce challenge as the focus of his next venture.

That was in mid-2019, pre-pandemic. It turned out that the timing was spot on, with every organization looking in the next year at ways to address their own distributed workforce challenges.

The emerging market focus, meanwhile, also has a direct link to Jamous himself: He left his home country of Lebanon to study in France when he was 17, and has essentially lived abroad since then. But as with many people who move from developed into emerging markets, he knew that the base of technical talent in his home country was something that was worth tapping and nurturing to help residents and the countries themselves improve their lots in life; and he thought he could use tech to help there, too.

Related to that wider social mission, Oyster has a pending application to become a B-Corporation.

Jamous is not the only one that has founded an HR company based on his personal experience: Turing’s founders have cited their own backgrounds growing up in India and working with people remotely from there as part of their own impetus for building Turing; and Remote’s founder hails from Europe but built GitLab (where he had been head of product) based on a similar premise of tapping into the talent he knew existed all around the world.

And indeed, Oyster is not alone in tackling this opportunity. The list of HR startups looking to be the ADPs of the world of distributed work include Deel, Remote, Hibob, Papaya Global, Personio, Factorial, Lattice, Turing and Rippling. And these are just some of the HR startups that have raised money in the last year; there are many, many more.

The attraction of Oyster seems to come in the simplicity of how the services are provided — you have options for contractors and full-timers, and full, larger staff deployments in other countries. You have options to add benefits for employees if you choose. And you have some tools to work out how hires fit into your bigger budgets, and also to guide you on remuneration in each local market. Pricing ranges from $29 per person, per month for contractors, to $399 for working with full employees, to other packages for larger deployments.

Oyster works with local partners to provide some aspects of these services, but it has built the technology to make the process seamless for the customer. As with other services, it essentially handles the employment and payroll as a local provider on behalf of its customers, but can do so under contract terms that reconcile both a company’s own policies and those of the local jurisdictions (which can differ widely between each other in areas like vacation time, redundancy terms, maternity leave and more).

“It has a few well-funded competitors, but that’s usually a good signal,” said Jason Green, the Emergence partner who led its investment. “But you want to bet on the horse that will lead the race, and that comes down to execution. Here, we are betting on a team that’s done it before, an entrepreneur experienced in building a company and selling it. Tony’s made money and knows how to build a business. But more than that, he’s mission driven and that will matter in the space, and to employees.”

Jan
22
2021
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Extra Crunch roundup: Digital health VC survey, edtech M&A, deep tech marketing, more

I had my first telehealth consultation last year, and there’s a high probability that you did, too. Since the pandemic began, consumer adoption of remote healthcare has increased 300%.

Speaking as an unvaccinated urban dweller: I’d rather speak to a nurse or doctor via my laptop than try to remain physically distanced on a bus or hailed ride traveling to/from their office.

Even after things return to (rolls eyes) normal, if I thought there was a reliable way to receive high-quality healthcare in my living room, I’d choose it.

Clearly, I’m not alone: a May 2020 McKinsey study pegged yearly domestic telehealth revenue at $3 billion before the coronavirus, but estimated that “up to $250 billion of current U.S. healthcare spend could potentially be virtualized” after the pandemic abates.

That’s a staggering number, but in a category that includes startups focused on sexual health, women’s health, pediatrics, mental health, data management and testing, it’s clear to see why digital-health funding topped more than $10 billion in the first three quarters of 2020.

Drawing from The TechCrunch List, reporter Sarah Buhr interviewed eight active health tech VCs to learn more about the companies and industry verticals that have captured their interest in 2021:

  • Bryan Roberts and Bob Kocher, partners, Venrock
  • Nan Li, managing director, Obvious Ventures
  • Elizabeth Yin, general partner, Hustle Fund
  • Christina Farr, principal investor and health tech lead, OMERS Ventures
  • Ursheet Parikh, partner, Mayfield Ventures
  • Nnamdi Okike, co-founder and managing partner, 645 Ventures
  • Emily Melton, founder and managing partner, Threshold Ventures

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Since COVID-19 has renewed Washington’s focus on healthcare, many investors said they expect a friendly regulatory environment for telehealth in 2021. Additionally, healthcare providers are looking for ways to reduce costs and lower barriers for patients seeking behavioral support.

“Remote really does work,” said Elizabeth Yin, general partner at Hustle Fund.

We’ll cover digital health in more depth this year through additional surveys, vertical reporting, founder interviews and much more.

Thanks very much for reading Extra Crunch this week; I hope you have a relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

8 VCs agree: Behavioral support and remote visits make digital health a strong bet for 2021

Woman having a medicine video conferencing with her doctor using digital tablet. Senior woman on a video call with a doctor using her tablet computer at home.

Image Credits: Luis Alvarez (opens in a new window) / Getty Images

Lessons from Top Hat’s acquisition spree

Image Credits: Bryce Durbin

In the last year, edtech startup Top Hat acquired three publishing companies: Fountainhead Press, Bludoor and Nelson HigherEd.

Natasha Mascarenhas interviewed CEO and founder Mike Silagadze to learn more about his content acquisition strategy, but her story also discussed “some rumblings of consolidation and exits in edtech land.”

How VCs invested in Asia and Europe in 2020

Last year, U.S.-based VCs invested an average of $428 million each day in domestic startups, with much of the benefits flowing to fintech companies.

This morning, Alex Wilhelm examined Q4 VC totals for Europe, which had its lowest deal count since Q1 2019, despite a record $14.3 billion in investments.

Asia’s VC industry, which saw $25.2 billion invested across 1,398 deals is seeing “a muted recovery,” says Alex.

“Falling seed volume, lots of big rounds. That’s 2020 VC around the world in a nutshell.”

Decrypted: With more SolarWinds fallout, Biden picks his cybersecurity team

Image Credits: Treedeo (opens in a new window) / Getty Images

In this week’s Decrypted, security reporter Zack Whittaker covered the latest news in the unfolding SolarWinds espionage campaign, now revealed to have impacted the U.S. Bureau of Labor Statistics and Malwarebytes.

In other news, the controversy regarding WhatsApp’s privacy policy change appears to be driving users to encrypted messaging app Signal, Zack reported. Facebook has put changes at WhatsApp on hold “until it could figure out how to explain the change without losing millions of users,” apparently.

Hot IPOs hang onto gains as investors keep betting on tech

A big IPO debut is a juicy topic for a few news cycles, but because there’s always another unicorn ready to break free from its corral and leap into the public markets, it doesn’t leave a lot of time to reflect.

Alex studied companies like Lemonade, Airbnb and Affirm to see how well these IPO pop stars have retained their value. Not only have most held steady, “many have actually run up the score in the ensuing weeks,” he found.

Dear Sophie: What are Biden’s immigration changes?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin / TechCrunch

Dear Sophie:

I work in HR for a tech firm. I understand that Biden is rolling out a new immigration plan today.

What is your sense as to how the new administration will change business, corporate and startup founder immigration to the U.S.?

—Free in Fremont

Hello, Extra Crunch community!

Hello in Different Languages

Image Credits: atakan (opens in a new window) / Getty Images

I began my career as an avid TechCrunch reader and remained one even when I joined as a writer, when I left to work on other things and now that I’ve returned to focus on better serving our community.

I’ve been chatting with some of the folks in our community and I’d love to talk to you, too. Nothing fancy, just 5-10 minutes of your time to hear more about what you want to see from us and get some feedback on what we’ve been doing so far.

If you would be so kind as to take a minute or two to fill out this form, I’ll drop you a note and hopefully we can have a chat about the future of the Extra Crunch community before we formally roll out some of the ideas we’re cooking up.

Drew Olanoff
@yoda

In 2020, VCs invested $428m into US-based startups every day

Last year was a disaster across the board thanks to a global pandemic, economic uncertainty and widespread social and political upheaval.

But if you were involved in the private markets, however, 2020 had some very clear upside — VCs flowed $156.2 billion into U.S.-based startups, “or around $428 million for each day,” reports Alex Wilhelm.

“The huge sum of money, however, was itself dwarfed by the amount of liquidity that American startups generated, some $290.1 billion.”

Using data sourced from the National Venture Capital Association and PitchBook, Alex used Monday’s column to recap last year’s seed, early-stage and late-stage rounds.

How and when to build marketing teams at deep tech companies

Pole lifting rubber duck with hook in its head

Image Credits: Andy Roberts (opens in a new window) / Getty Images

Building a marketing team is one of the most opaque parts of spinning up a startup, but for a deep tech company, the stakes couldn’t be higher.

How can technical founders working on bleeding-edge technology find the right people to tell their story?

If you work at a post-revenue, early-stage deep tech startup (or know someone who does), this post explains when to hire a team, whether they’ll need prior industry experience, and how to source and evaluate talent.

Bustle CEO Bryan Goldberg explains his plans for taking the company public

Bustle Digital Group CEO Bryan Goldberg

Bustle Digital Group CEO Bryan Goldberg. Image Credits: Bustle Digital Group

Senior Writer Anthony Ha interviewed Bustle Digital Group CEO Bryan Goldberg to get his thoughts on the state of digital media.

Their conversation covered a lot of ground, but the biggest news it contained focuses on Goldberg’s short-term plans.

“Where do I want to see the company in three years? I want to see three things: I want to be public, I want to see us driving a lot of profits and I want it to be a lot bigger, because we’ve consolidated a lot of other publications,” he said.

It may not be as glamorous as D2C, but beauty tech is big money

Directly Above Shot Of Razors On Green Background

Image Credits: Laia Divols Escude/EyeEm (opens in a new window) / Getty Images

The U.S. Federal Trade Commission is not a huge fan of personal-care D2C brands merging with traditional consumer product companies.

This month, razor startup Billie and Proctor & Gamble announced they were calling off their planned merger after the FTC filed suit.

For similar reasons, Edgewell Personal Care dropped its plans last year to buy Harry’s for $1.37 billion.

In a harsher regulatory environment, “the path to profitability has become a more important part of the startup story versus growth at all costs,” it seems.

Twilio CEO says wisdom lies with your developers

SAN FRANCISCO, CA – SEPTEMBER 12: Founder and CEO of Twilio Jeff Lawson speaks onstage during TechCrunch Disrupt SF 2016 at Pier 48 on September 12, 2016 in San Francisco, California. Image Credits: Steve Jennings/Getty Images for TechCrunch

Companies that build their own tools “tend to win the hearts, minds and wallets of their customers,” according to Twilio CEO Jeff Lawson.

In an interview with enterprise reporter Ron Miller for his new book, “Ask Your Developer,” Lawson says founders should use developer teams as a sounding board when making build-versus-buy decisions.

“Lawson’s basic philosophy in the book is that if you can build it, you should,” says Ron.

Jan
19
2021
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UK’s WhiteHat rebrands as Multiverse, raises $44M to build tech apprenticeships in the US

University education is getting more expensive, and at the moment it feels a bit like a Petri dish for infections, but the long-term trends continue to show a dramatic growth in the number of people worldwide getting degrees beyond high school, with one big reason for this being that a college degree generally provides better economic security.

But today, a startup that is exploring a different route for those interested in technology and knowledge worker positions — specifically by way of apprenticeships to bring in and train younger people on the job — is announcing a significant round of growth funding to see if it can provide a credible, scalable alternative to that model.

Multiverse, a U.K. startup that works with organizations to develop these apprenticeships, and then helps source promising, diverse candidates to fill those roles, has raised $44 million, funding that it will be using to spearhead a move into the U.S. market after picking up some 300 clients in the U.K. and thousands of apprentices.

The Series B is being led by General Catalyst (which has been especially active this week with U.K. startups: it also led a large round yesterday for Bloom & Wild), with GV (formerly known as Google Ventures), Audacious Ventures, Latitude and SemperVirens also participating. Index Ventures and Lightspeed Venture Partners, which first invested in the company in its $16 million Series A in 2020, also participated.

Valuation is not being disclosed, but for what it’s worth, the round was one that generated a lot of interest. In between getting pitched this story and publishing it, the size of the Series B grew by $8 million (it was originally closed at $36 million). The FT notes that the valuation was around $200 million with this round, but the company says that is “speculation on the FT’s part.”

The company was originally co-founded as WhiteHat and is officially rebranding today. Co-founder Euan Blair (who happens to be the son of the former U.K. Prime Minister Tony Blair and his accomplished barrister wife Cherie Booth Blair) said the name change was because the original name was a reference to how the startup sought to “hack the system for good.”

However, he added, “The scale has become bigger and more evolved.” The new name is to convey that — as in gaming, which is probably the arena where you might have heard this term before — “anything is possible.”

There are “multiple universes” one can inhabit as a post-18 young adult, Blair continued. While it’s been assumed that to get into tech, the obvious route was a two-to-four year (and often more) tour through college or university to pick up a higher education degree, the bet that Multiverse is making here is that apprenticeships can easily, and widely, become another. “We want to build an outstanding alternative to university and college,” he said. These typically last 1.5 years. 

The idea of an “outstanding alternative” is especially important when thinking of how to target more marginalized groups and how this ties up with how tech companies are looking to be more diverse in the future, without cutting down on the quality of what people are getting out of the experience, or the resulting talent that is getting recruited.

There’s long been a stigma attached to less prestigious institutions, and putting money or effort into another channel to perpetuate that doesn’t really make sense or point to progress.

Blair said that currently over half of the people making their way through Multiverse are people of color, and 57% are women, and the plan is to build tools to make that an even firmer part of its mission. 

The startup sees itself as part tech company and part education enterprise.

It works with tech companies and others to open up opportunities for people who have not had any higher education or any training, where fresh high school graduates can come in, learn the ropes of a job while getting paid and then continue on working their way up the ladder with that knowledge base in place.

Apprenticeships on the platform right now range from data analysts through to exhibition designers, and the idea is that by opening up and targeting the U.S. market, the breadth, number and location of roles will grow.

This is not just a social enterprise: There is actual money in this area. Blair said that prices it charges the companies it works with range by qualification, “but are broadly around the $15,000 mark.” (The individuals applying don’t pay anything, and they will also be paid by the companies providing the apprenticeships.)

On the educational front, Multiverse doesn’t just connect people as a recruiter might: it has a team in place to build out what the “curriculum” might be for a particular apprenticeship, and how to deliver and train people with the requisite skills alongside the practice experience of working, and more.

That latter role, of course, has taken on a more poignant dimension in the last year: Concepts like remote training and virtual mentorship have very much come into their own at a time when offices are largely standing empty to help reduce the spread of COVID-19.

Regardless of what happens in the year ahead — fingers crossed that vaccinations and other efforts will help us collectively move past where we are right now — many believe that the infrastructure that has been put into place to keep working virtually will continue to be used, which bodes well for a company like Multiverse that is building a business around that, both with technology it creates itself and will bring in from third parties and partners.

Indeed, the ecosystem of companies building tools to deliver educational content, provide training and work collaboratively has really boomed in the pandemic, giving companies like Multiverse a large library of options for how to bring people into new work situations. (Google, which is now an investor in Multiverse, is very much one of the makers of such education tools.)

Apprenticeships are an interesting area for a startup to tackle. Traditionally, it’s a term that would have been associated mainly with skilled labor positions, rather than “knowledge workers.”

But you can argue that with the bigger swing that the globe has seen away from industrial and towards knowledge economies, there is an argument to be made for building more enterprises and opportunities for an ever wider pool of users, rather than expecting everyone to be shoehorned into the models of the last 50 years. (The latter would essentially imply that college is possibly the only way up.)

You might also be fair to claim that Blair’s connections helped him secure funding and open doors with would-be customers, and that might well be the case, but ultimately the startup will live or die by how well it executes on its premise, whether it finds a good way to connect more people, engage them in opportunities and keep them on board.

This is what really attracted the investors, said Joel Cutler, managing director and co-founder of General Catalyst.

“Euan has a genuine belief that this is important, and when you talk to him, you get a  feeling of manifest destiny,” Cutler said in an interview. In response to the question of family connections, he said that this was precisely the kind of issue that the technology industry should be tackling to fight.

“Of all the industries to break the mold of where you went to school, it should be the tech world that will do that, since it is far more of a meritocracy than others. This is the perfect place to start to break that mold,” he said. “Education will be super valuable but apprenticeships will also be important.” He noted that another company that General Catalyst invests in, Guild Education, is addressing similar opportunities, or rather the gaps in current opportunities, for older people.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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