Daily Archives: October 17, 2020

News: VCs reload ahead of the election as unicorns power ahead

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter for your weekend enjoyment. There was a steady drumbeat of bullish news for unicorns this week.

This is The TechCrunch Exchange, a newsletter that goes out on Saturdays, based on the column of the same name. You can sign up for the email here.

It was an active week in the technology world broadly, with big news from Facebook and Twitter and Apple. But past the headline-grabbing noise, there was a steady drumbeat of bullish news for unicorns, or private companies worth $1 billion or more.

A bullish week for unicorns

The Exchange spent a good chunk of the week looking into different stories from unicorns, or companies that will soon fit the bill, and it’s surprising to see how much positive financial news there was on tap even past what we got to write about.

Databricks, for example, disclosed a grip of financial data to TechCrunch ahead of regular publication, including the fact that it grew its annual run rate (not ARR) to $350 million by the end of Q3 2020, up from $200 million in Q2 2019. It’s essentially IPO ready, but is not hurrying to the public markets.

Sticking to our theme, Calm wants more money for a huge new valuation, perhaps as high as $2.2 billion which is not a surprise. That’s more good unicorn news. As was the report that “India’s Razorpay [became a] unicorn after its new $100 million funding round” that came out this week.

Razorpay is only one of a number of Indian startups that have become unicorns during COVID-19. (And here’s another digest out this week concerning a half-dozen startups that became unicorns “amidst the pandemic.”)

There was enough good unicorn news lately that we’ve lost track of it all. Things like Seismic raising $92 million, pushing its valuation up to $1.6 billion from a few weeks ago. How did that get lost in the mix?

All this matters because while the IPO market has captured much attention in the last quarter or so, the unicorn world has not sat still. Indeed, it feels that unicorn VC activity is the highest we’ve seen since 2019.

And, as we’ll see in just a moment, the grist for the unicorn mill is getting refilled as we speak. So, expect more of the same until something material breaks our current investing and exit pattern.

Market Notes

What do unicorns eat? Cash. And many, many VCs raised cash in the last seven days.

A partial list follows. It could be that investors are looking to lock in new funds before the election and whatever chaos may ensue. So, in no particular order, here’s who is newly flush:

All that capital needs to go to work, which means lots more rounds for many, many startups. The Exchange also caught up with a somewhat new firm this week: Race Capital. Helmed by Alfred Chuang, formerly or BEA who is an angel investor now in charge of his own fund, the firm has $50 million to invest.

Sticking to private investments into startups for the moment, quite a lot happened this week that we need to know more about. Like API-powered Argyle raising $20 million from Bain Capital Ventures for what FinLedger calls “unlocking and democratizing access to employment records.” TechCrunch is currently tracking the progress of API-led startups.

On the fintech side of things, M1 Finance raised $45 million for its consumer fintech platform in a Series C, while another roboadvisor, Wealthsimple, raised $87 million, becoming a unicorn at the same time. And while we’re in the fintech bucket, Stripe dropped $200 million this week for Nigerian startup Paystack. We need to pay more attention to the African startup scene. On the smaller end of fintech, Alpaca raised $10 million more to help other companies become Robinhood.

A few other notes before we change tack. Kahoot raised $215 million due to a boom in remote education, another trend that is inescapable in 2020 as part of the larger edtech boom (our own Natasha Mascarenhas has more).

Turning from the private market to the public, we have to touch on SPACs for just a moment. The Exchange got on the phone this week with Toby Russell from Shift, which is now a public company, trading after it merged with a SPAC, namely Insurance Acquisition Corp. Early trading is only going so well, but the CEO outlined for us precisely why he pursued a SPAC, which was actually interesting:

  • Shift could have gone public via an IPO, Russell said, but prioritized a SPAC-led debut because his firm wanted to optimize for a capital raise to keep the company growing.
  • How so? The private investment in public equity (PIPE) that the SPAC option came with ensured that Shift would have hundreds of millions in cash.
  • Shift also wanted to minimize what the CEO described as market risk. A SPAC deal could happen regardless of what the broader markets were up to. And as the company made the choice to debut via a SPAC in April, some caution, we reckon, may have made some sense.

So now Shift is public and newly capitalized. Let’s see what happens to its shares as it gets into the groove of reporting quarterly. (Obviously, if it flounders, it’s a bad mark for SPACs, but, conversely, successful trading could lead to a bit more momentum to SPAC-mageddon.)

A few more things and we’re done. Unicorn exits had a good week. First, Datto’s IPO continues to move forward. It set an initial price this week, which could value it above $4 billion. Also this week, Roblox announced that it has filed to go public, albeit privately. It’s worth billions as well. And finally, DoubleVerify is looking to go public for as much as $5 billion early next year.

Not all liquidity comes via the public markets, as we saw this week’s Twilio purchase of Segment, a deal that The Exchange dug into to find out if it was well-priced or not.

Various and Sundry

We’re running long naturally, so here are just a few quick things to add to your weekend mental tea-and-coffee reading!

Next week we are digging more deeply into Q3 venture capital data, a foretaste of which you can find here, regarding female founders, a topic that we returned to Friday in more depth.

Alex

News: Solve the ‘dead equity’ problem with a longer founder vesting schedule

The four-year vesting schedule that the typical startup uses today is a problem waiting to happen. Here’s how you can fix it forever.

Editor’s note: Get this free weekly recap of TechCrunch news that any startup can use by email every Saturday morning (7 a.m. PT). Subscribe here.

The four-year vesting schedule that the typical startup uses today is a problem waiting to happen. If one founder ends up quitting a year or two before the last cliff, they still own a large share of the cap table through many rounds to come. The departing founder might consider that fair, but the remaining founder(s) are the ones adding on the additional value — and resentment is not the only issue.

“The opportunity cost of dead equity is talent and capital,” Jake Jolis of Matrix Partners explains in a guest post for us this week. “Compensating talent and raising capital are the (only) two things you can use your startup’s equity for, and you need to do both in order for your company to grow large. If you want to build a big business, the road ahead is still long and windy, and you’re going to need every bit of help you can get. If your competitors don’t have dead equity you’re literally competing with a handicap.”

Instead, he argues that founders who are just starting out should consider doubling the vesting schedule to eight years or so. In one example he gives, a founder who leaves after two and a half years on a four-year plan could end up with 22% of the company even after a big new funding round, the creation of an employee stock option pool, and additional shares set aside for a replacement cofounder-level hire. On an eight-year plan, that would be only 11%, and there would be a lot more remaining to entice new cofounders.

Example cap table with eight-year cofounder vesting.

The full article is on Extra Crunch, but I’m including more key parts here given the broad value:

Given the risks still ahead of the business, this level of compensation is often much more fair from a value-creation standpoint. With less dead equity on the cap table, the startup is still attractive in the eyes of VCs and well-positioned to attract a strong co-founder replacement to take the company forward. The alternative can cripple the company, and even co-founder B won’t be happy owning a larger percent of zero. While it’s better to do it when you start the company, a co-founder unit can elongate their vesting later on as well. The main requirement is that all the co-founders believe it’s in their best interest and agree to it. Most repeat founders I’ve talked to agree that four years is too short. Personally, if I started another company, I’d pick something like eight. You definitely don’t need to. You might decide four or six is better for your co-founder unit and your company.

One final thought, from my startup cofounder years. The departing cofounder should still want to see the company succeed as big as possible to maximize the value of their own shares. On the steep slope between failure and success in this business, vesting longer is a powerful way to help the company will deliver the most back to them after the hard work of the early days.

Image Credits: FirstMark

Why one successful early-stage VC firm is getting into SPACs now

SPACs are an exciting development for any type of investor, public or private, Amish Jani of FirstMark Capital tells Connie Loizos. Indeed, his firm has historically focused on writing early-stage checks, so at first it is a bit jarring to see the FirstMark Horizon Acquisition SPAC raise $360 million and head out looking for the right unicorn. But he explains it all quite well an extensive interview this week:

TC: Why SPACs right now? Is it fair to say it’s a shortcut to a hot public market, in a time when no one quite knows when the markets could shift?

AJ: There are a couple of different threads that are coming together. I think the first one is the possibility that [SPACs] work, and really well. [Our portfolio company] DraftKings  [reverse-merged into a SPAC] and did a [private investment in a public equity deal]; it was a fairly complicated transaction and they used this to go public, and the stock has done incredibly well.

In parallel, [privately held companies] over the last five or six years could raise large sums of capital, and that was pushing out the timeline [to going public] fairly substantially. [Now there are] tens of billions of dollars in value sitting in the private markets and [at the same time] an opportunity to go public and build trust with public shareholders and leverage the early tailwinds of growth.

He goes on to explain why public markets are likely to stay hot for the right SPACs far into the future.

AJ: I think a bit of a misconception is this idea that most investors in the public markets want to be hot money or fast money. There are a lot of investors that are interested in being part of a company’s journey and who’ve been frustrated because they’ve been frozen out of being able to access these companies as they’ve stayed private longer. So our investors are some of are our [limited partners], but the vast majority are long-only funds, alternative investment managers and people who are really excited about technology as a long-term disrupter and want to be aligned with this next generation of iconic companies.

Check out the whole thing on TechCrunch.

Peter Reinhardt SegmentDSC00311

SaaS continues to boom with Databricks funding, Segment acquisition

Maybe Segment would have gone public sometime soon, but instead Twilio has scooped it up for $3.2 billion this week. The popular data management tool will now be a part of Twilio’s ever-expanding suite of customer communication products. Perhaps it’s another sign of a consolidation phase taking hold in the sector, after a Pre-Cambrian explosion of SaaS startups over the last decade? Alex Wilhelm dug into the financials of the deal for Extra Crunch and came away thinking that the deal was not too expensive — in fact he thinks Segment may have been able to hold out for a little more, especially considering the multiplication of Twilio’s stock price this year.

Databricks, meanwhile, has evolved from an open-source data analytics platform that struggled to make revenues to a run rate of $350 million. Per an interview that Alex did for EC with chief executive Ali Ghodsi, the factors in this growth included a shift to focus on more proprietary code, big customers and sophisticated features. It’s now aiming for an IPO next year.

And what about that IPO market, which was a bit quieter this week? Alex gives a letter grade to each of the 18 most notable tech companies that have gone public this year, and observes that most them are continuing to stay in positive territory from their initial prices.

Image Credits: Brent Franson for Paystack

Nigeria startup scene gets watershed exit with Paystack deal

Lagos has been building a strong local startup scene for years, and this week that translated into a win that could mark a new era for the city, country and beyond. Stripe has agreed to acquire payments provider Paystack in a deal that Ingrid Lunden hears was worth more than $200 million. With Stripe’s own aims for a massive IPO, Paystack is poised to produce ongoing returns for the company and its investors, as well as providing Nigeria with a new generation of investors, founders and highly skilled employees who are tightly interlinked with Silicon Valley and other innovation centers.

A startup hub just needs one or two of the right deals to change everything. Readers who were paying attention when Google bought YouTube almost exactly 14 years ago today will remember the ensuing surge in fundings, foundings, acquisitions and overall consumer internet industry activity that helped the Silicon Valley internet scene get back on its feet (and helped this site get on the map, too). Stripe has said it is planning more global expansion that could include additional deals like this, so more cities around the world could be getting their moments this way.

Donau City development area - Vienna, Austria

Donau City development area – Vienna, Austria

Vienna startups finding new opportunities during the pandemic

In this week’s European investor survey for Extra Crunch, Mike Butcher checks in on Vienna, Austria, which has been tallying up growth in local startup activity recently. Here’s Eva Ahr of Capital 300, which focuses on Germanic and Central Eastern European investments, regarding about the impact of the pandemic on the local markets:

Telemedicine, online education has been accelerated. We see a shift that otherwise would have taken years, especially in the relatively conservative German-speaking area. As mentioned previously, mental health solutions, hiring and employing remotely are some of the opportunities highlighted by COVID-19. Companies that are heavily exposed are those that have been serving the long tail of companies, small merchants, and local businesses that were closed down or experienced much less traffic in past months and hence are extremely sensitive around their cost base, discontinuing services that are not 110% essential.

Mike is also working on a Lisbon survey and we’d love to hear from any investors focused on the city and Portugal in general.

Around TechCrunch

Discuss the unbundling of early-stage VC with Unusual Ventures’ Sarah Leary & John Vrionis

Across the week

TechCrunch:

If the ad industry is serious about transparency, let’s open-source our SDKs

Brazil’s Black Silicon Valley could be an epicenter of innovation in Latin America

South Korea pushes for AI semiconductors as global demand grows

The need for true equity in equity compensation

Trump’s latest immigration restrictions are bad news for American workers

Extra Crunch:

How COVID-19 and the resulting recession are impacting female founders

Startup founders set up hacker homes to recreate Silicon Valley synergy

Brighteye Ventures’ Alex Latsis talks European edtech funding in 2020

Dear Sophie: I came on a B-1 visa, then COVID-19 happened. How can I stay?

What the iPhone 12 tells us about the state of the smartphone industry in 2020

#EquityPod

From Alex:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

The whole crew was back today, with Natasha and Danny and I gathered to parse over what was really a blast of news. Lots of startups are raising. Lots of VCs are raising. And some unicorns are shooting to go public. It’s a lot to get through, but we’re here to catch you up.

Here’s what we got into:

And with that, we’re off until Monday morning. Chat soon, and stay safe.

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

News: This Week in Apps: Apple’s big event, lidar comes to iPhone, Android gets a new IDE

Welcome back to This Week in Apps, the TechCrunch series that recaps the latest OS news, the applications they support and the money that flows through it all. The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day

Welcome back to This Week in Apps, the TechCrunch series that recaps the latest OS news, the applications they support and the money that flows through it all.

The app industry is as hot as ever, with a record 204 billion downloads and $120 billion in consumer spending in 2019. People are now spending three hours and 40 minutes per day using apps, rivaling TV. Apps aren’t just a way to pass idle hours — they’re a big business. In 2019, mobile-first companies had a combined $544 billion valuation, 6.5x higher than those without a mobile focus.

In this series, we help you keep up with the latest news from the world of apps, delivered on a weekly basis.

Top Story

Apple introduces four new iPhones (and more)

Apple hosted its iPhone event this week, where it introduced the new iPhone 12… and the iPhone 12 mini, the iPhone 12 Pro and the iPhone 12 Pro Max — effectively plugging all the holes in the market. With the release of the four new iPhones, app developers will have a range of devices to build for, from small to very large — the 12 Pro Max, for example, introduces the iPhone’s biggest-ever screen and the highest resolution, at nearly 3.5M pixels.

It also, of course, includes serious camera improvements, from a redesign of the three-lens system to including a new deeper telephoto camera, now a 65 mm-equivalent instead of 52 mm, as on previous models. There’s also an improved wide-angle lens, larger sensor, the addition of sensor-level image stabilization and a revamped Night Mode. Photographers will appreciate the new Apple ProRAW format, as well. (More on that here).

The iPhone 12 mini, meanwhile, aims to serve the customer base that prefers a smaller phone, like the iPhone SE, but without sacrificing functionality.

All the devices share some key features, including 5G connectivity, the new MagSafe connector for wireless charging and snap-on magnetic accessories, OLED displays and the A14 chip. They also have a more classic look, with straight edges that allow for additional antennas, providing next-gen wireless connectivity.

One of the bigger differences, however, between the Pro models and the regular iPhone 12 is the addition of the LiDAR Scanner, which is also found in the latest iPad Pro. The scanner measures how long it takes for light to reach an object and reflect back. The new depth-sensing technology has big implications for AR, as it allows augmented reality objects to interact with objects in the real world. AR apps will be more user-friendly, too, as they won’t need to first scan the room to place the AR object in the real world. It can be placed instantly.

Apple is leveraging the sensor for the iPhone 12 Pro camera to offer up to 6x faster focus in low-light conditions. Developers, meanwhile, can leverage lidar for use cases like AR-enabled games that work in the real world, social media (like Snapchat’s new lidar-powered Lens), home design and improvement apps involving room scans, spatial layout planning (like JigSpace), better AR shopping experiences and more.

The company also announced an affordable version of its HomePod smart speaker, the $99 HomePod Mini. The item works best for those fully locked inside the Apple universe, as it will stream a handful of music services, but not one of the most popular — Spotify. However, Apple also introduced a nifty feature for the HomePod devices, Intercom, which lets you send announcements across the speakers. While Apple and Google have offered a similar feature for their smart speakers, Intercom also works across other Apple devices, including iPhone, iPod, AirPods and even CarPlay. (What, no Mac?)

If Apple isn’t too late to capture smart speaker market share, the new speaker could see more users adopting smart home devices they can voice control through the HomePod Mini.

During the event, Apple also subtly snubbed its nose at Epic’s Fortnite with the announcement that
League of Legends: Wild Rift would be coming to iPhone 12 to take advantage of its new 5G capabilities and A14 Bionic chip.

Weekly News Round-Up

Platforms

  • Lidar comes to iPhone 12 Pro. Developers can now build AR experiences that interact with real-world objects, and AR apps can now instantly place AR objects in the real world without scanning the room. The update will mean a huge increase in the usability of AR apps but is limited to the Pro model of iPhone for now. Snapchat is already using it.
  • Apple developers can now make their apps available for pre-order even earlier — up to 180 days before release on the App Store.
  • Android Studio 4.1 launches. The new, stable version of the IDE for building Android apps introduces better TensorFlow Lite support and a new database inspector. The team also fixed a whopping 2,370 bugs during this release cycle and closed 275 public issues.
  • Google introduces the Android for Cars library. The library, now in open beta, gives developers tools to design, develop and test new navigation, parking or charging apps for Android Auto. The Google Play Store will be enabled for publishing beta apps in the “coming months.”
  • Google stops selling music. The company no longer sells tracks and albums on its Play Store, shifting all its focus to YouTube Music. The latter also just launched on Apple Watch this week.

Trends

  • Shopping apps forecast. U.S. consumers were expected to spend 60M hours in Android shopping apps during Prime Day week, (which just wrapped) according to one forecast from App Annie.
  • Prime Day downloads grow. Sensor Tower estimates global installs of the Amazon app grew 23% year-over-year, to 684K, as Prime Day neared. Installs on Wednesday were up 33% to 750K. However, U.S. installs were down by 22% 10/13-10/14. Apptopia noted that app sessions, however, were up 27% year-over-year.
  • Shopping, Food & Drink app launches up more than 50% year-over-year. Shopping apps grew 52% while Food & Drink apps grew 60%, due to COVID-19 impacts, according to Sensor Tower.
  • Subscriptions. U.S. consumers spend $20.78 per month on app subscriptions, Adjust study says.
  • TikTok sale impact on ad industry. 73% of marketers said a TikTok sale in the U.S. would impact their 2021 advertising plans. 41% also believed the deal could allow Walmart to overtake Amazon in e-commerce.
  • Amazon expands AR experimentation to its boxes. The retailer launched a new AR application that works with QR codes on the company’s shipping boxes to create “interactive, shareable” AR experiences, like a pumpkin that comes to life.

Security

  • Robinhood said a “limited number” of its users’ accounts were hacked. The service itself was not hacked, but around 2,000 customers had accounts compromised by cybercriminals who first compromised users’ personal emails outside the trading app.

Other News

  • Zoom’s new events platform brings apps to video conferencing calls.
  • Messenger update brings new features, including cross-app communication with Instagram. The app gets fun features like chat themes, custom reactions and, soon, selfie stickers and vanish mode. But the bigger news is the (potentially anti-competitive) merging of Facebook’s chat platforms.
  • Life360 leverages TikTok teens’ complaints to start a dialogue and invent a new feature, “Bubbles,” which allows teens (or anyone) to share a generalized location instead of an exact one. The feature gives teens a bit more freedom to roam and make choices without so much parental oversight. Parents, meanwhile, can still be sure their teen is OK, as features like emergency SOS and crash alerts remain functional.
  • Must-read: The MacStories iOS and iPadOS 14 Review. Federico Viticci offers a 23-page deep dive into the latest version of Apple’s mobile operating system.

Funding and M&A

    • Future raises $24M Series B for its $150/mo workout coaching app amid at-home fitness boom. The app pairs users with real-life fitness coaching for personal training at home. The round was led by Trustbridge Partners with Caffeinated Capital and Series A investors Kleiner Perkins participating.
    • River raises $10.4M for its app offering news, events and other happenings from around the web, ranging from news stories from top publishers to sports to even notable tweets. The app presents the information in a real-time stream, browsed vertically. There’s also a “For You” page, similar to TikTok.
    • Roblox confidentially filed with the SEC to go public. This cross-platform gaming platform has boomed during coronavirus lockdowns. According to reports, the listing could double Robox’s $4B valuation.
    • Robo Adviser Wealthsimple raises $87M. The funding for the investing app with comparisons to Robinhood was led by Menlo Park-based Technology Crossover Ventures (TCV), valuing the business at $1B.
    • Fitness platform Playbook raises $9.3M. The company offers tools for personal trainers who want to make their own videos, which consumers then browse in Playbook’s mobile app. Backers include E.ventures, Michael Ovitz, Abstract, Algae Ventures, Porsche Ventures and FJ Labs.
    • Live streaming app Moment House raises $1.5M seed. The startup aims to recreate live events in a digital format. LA area investors invested, including Scooter Braun, Troy Carter, Kygo’s Palm Tree Crew and Jared Leto. Patreon chief executive Jack Conte and Sequoia Capital partner Jess Lee also participated.
    • Twilio acquires Segment for $3.2B to help developers build data-fueled apps.
    • E-learning platform Kahoot raises $215M from SoftBank. The Norwegian startup claims to have hosted 1.3 billion “participating players” in the last 12 months. The company’s gamified e-learning platform is used both in schools and in enterprise environments.

Downloads

Mycons

Mycons is a new app that makes it easier for users, including non-designers, to create and buy custom icons for their iOS home screen makeovers. In the app’s “Icon Studio,” users can create icons by swapping out the background, choosing a symbol and placing it on the icon accordingly. You can also create a whole set of icons in a batch export. If you don’t feel like designing your own, you can opt to purchase premade packs instead.

The app is a free download with a one-time, in-app purchase to unlock the fully functionality of the icon designer. The icon packs, which include different variations and matching wallpaper, range from $7.99-$9.99.

Spotify’s new iOS 14 widget

Image Credits: TechCrunch screenshot of Spotify widget

It’s here! The widget a number of people have waited for since the launch of the new version of iOS has arrived. 

The widget, which arrives in the latest version of the Spotify iOS app, comes in two sizes. The smaller widget will display just your most recently listened to item, while the medium-sized widget will instead show the five most recent items — four in a horizontal row and the most recent at the top. In that case, you can actually tap on the small thumbnail for which of the five you want to now stream to be taken directly to that page in the Spotify app. The widget also automatically updates its background color to match the thumbnail photo.

News: Original Content podcast: It’s hard to resist the silliness of ‘Emily in Paris’

“Emily in Paris,” a new series on Netflix, has provoked skeptical responses from actual Parisians who are happy to point out the abundant clichés in its story of a young American (played by Lily Collins) who takes a last-minute transfer to a marketing agency in Paris. Some fairly obvious culture clash moments ensue, along with

“Emily in Paris,” a new series on Netflix, has provoked skeptical responses from actual Parisians who are happy to point out the abundant clichés in its story of a young American (played by Lily Collins) who takes a last-minute transfer to a marketing agency in Paris.

Some fairly obvious culture clash moments ensue, along with equally implausible storylines where Emily’s extremely basic ideas about social media are treated as controversial and groundbreaking by her employer.

And yet, as we discuss on the latest episode of the Original Content podcast, we actually found the show delightful — or at the very least, highly watchable.

Yes, the show’s Paris is a fantasy, but it’s a fantasy that we’re happy to visit, particularly now. Yes, most of the show’s characters are basically cartoons, but they’re entertaining and fun cartoons. And at the end of the day, we’re all suckers for a slick, escapist romantic comedy, which is exactly what “Emily in Paris” delivers.

You can listen to our review in the player below, subscribe using Apple Podcasts or find us in your podcast player of choice. If you like the show, please let us know by leaving a review on Apple. You can also follow us on Twitter or send us feedback directly. (Or suggest shows and movies for us to review!)

And if you’d like to skip ahead, here’s how the episode breaks down:
0:00 Intro
0:31 “Emily in Paris” review
30:43 “Emily in Paris” spoiler discussion

News: Three views on the future of media startups

The Equity crew this week chewed through a trio of media stories, each dealing with private companies and their successes. The Wall Street Journal recently reported that Axios was growing rapidly and near profitability. The paper also broke news that Morning Brew might exit to Business Insider for a hefty $75 million potential payout. Meanwhile,

The Equity crew this week chewed through a trio of media stories, each dealing with private companies and their successes. The Wall Street Journal recently reported that Axios was growing rapidly and near profitability. The paper also broke news that Morning Brew might exit to Business Insider for a hefty $75 million potential payout. Meanwhile, we covered the news that The Juggernaut raised $2 million for its paywalled publication focused on South Asian news.

The conversation, as a result, was a fairly indulgent and nerdy affair. It’s always fun to celebrate other journalists finding success in different ways, and this week felt like a moment for the media news landscape. Because the topic is so near to our hearts, for better or worse, we’re fitting our broader thoughts into this post about the future of media.

Our own Natasha Mascarenhas writes about how inequity in media and who gets to succeed, Danny Crichton has some pretty strong feelings about digital advertising and Alex Wilhelm writes about how the varied methods of recent media success are themselves heartening.

So this weekend let’s pause for a minute to ruminate on the upstart media world, a place where too often private capital and media economics have had a falling out.

Natasha Mascarenhas

This week, it was announced that advertising might not be a bad idea after all. Axios is reportedly expected to become profitable this year, and Morning Brew, a free newsletter about business insights, could get acquired for between $50 million to $75 million by Business Insider. Both of these media companies make money off of newsletters. And if you end the story there, it’s clear that news isn’t simply a fundamental aspect of our democracy — it makes money, too.

But, the story shouldn’t end there.

News: Pear hosted its invite-only demo day online year; here’s what you might have missed

Pear, the eight-year-old, Palo Alto, Calif.-based seed-stage venture firm that has, from its outset, attracted the attention of VCs who think the firm has an eye for nascent talent, staged its seventh annual demo day earlier this week, and while it was virtual, one of the startups has already signed a term sheet from a

Pear, the eight-year-old, Palo Alto, Calif.-based seed-stage venture firm that has, from its outset, attracted the attention of VCs who think the firm has an eye for nascent talent, staged its seventh annual demo day earlier this week, and while it was virtual, one of the startups has already signed a term sheet from a top-tier venture firm.

To give the rest of you a sneak peak, here’s a bit about all of the startups that presented, in broad strokes:


  1. ) AccessBell

What it does: Video conferencing platform for enterprise workflows

Website: accessbell.com

Founders: Martin Aguinis (CEO), Josh Payne (COO), Kamil Ali (CTO)

The pitch: Video has emerged as one of the prominent ways for enterprises to communicate internally and externally with their customers and partners. Current video conferencing tools like Zoom and WebEx are great for standalone video but they have their own ecosystems and don’t integrate into thousands of enterprise workflows. That means that API tools that do integrate, like Agora and Twilio, still require manual work from developer teams to customize and maintain. AccessBell is aiming to provide the scalability and reliability of Zoom, as well as the customizability and integrations of Twilio, in a low code integration and no code extensible customization platform.

It’s a big market the team is chasing, one that’s expected to grow to $8.6 billion by 2027. The cost right now for users who want to test out AccessBell is $27 per host per month.


2.) FarmRaise

What it does: Unlock financial opportunities for farmers to create sustainable farms and improve their livelihoods.

Website: farmraise.com

Founders: Jayce Hafner (CEO), Sami Tellatin (COO), Albert Abedi (Product)

The pitch: Over half of American farms don’t have the tools or bandwidth they need to identify ways to improve their farms and become profitable. The startup’s API links to farmers’ bank accounts, where its algorithm assesses financials to provide a “farm read,” scoring the farms’ financial health. It then regularly monitors farm data to continuously provide clean financials and recommendations on how to improve its customers’ farms, as well as to connect farmers with capital in order to improve their score. (It might suggest that a farm invest in certain sustainability practices, for example.)

Eventually, the idea is to also use the granular insights it’s garnering and sell these to hedge funds, state governments, and other outfits that want a better handle on what’s coming — be it around food security or climate changes.


3.) Sequel

What it does: Re-engineering life’s essential products – starting with tampons.

Website: thesequelisbetter.com

Founders: Greta Meyer (CEO),  Amanda Calabrese (COO)

The pitch: Founded by student athletes from Stanford, Sequel argues that seven out of 10 women don’t trust tampons, which were first designed in 1931 (by a man). New brands like Lola have catchy brands and new material, but they perform even worse than legacy products. Sequel has focused instead on fluid mechanics and specifically on slowing flow rates so a tampon wont leak before it’s full whether they’re in the “boardroom” or the “stadium.” The company says it has already filed patents and secured manufacturing partners and that it expects that the product will be available for consumers to buy directly from its website, as well as in other stores, next year.


4.) Interface Bio

What it does: Unlocking the therapeutic potential of the microbiome with a high-throughput pipeline for characterizing microbes, metabolites, and therapeutic response, based on years of research at Stanford.

Founders: Will Van Treuren, Hannah Wastyk

The pitch: The microbiome plays a major role in a wide range of human diseases, including heart disease, kidney disease, liver disease, and cancer. In fact, Interface’s founders — both of whom are PhDs —  say that microbiome-influenced diseases are responsible for four of the top 10 causes of death in the United States. So how do they better size on the opportunity to identify therapeutics by harnessing the microbiome? Well, they say they’ll do it via a “high-speed pipeline for characterizing metabolites and their immune phenotypes,” which they’ll create by developing the world’s largest database of microbiome-mediated chemistry, which the startup will then screen for potential metabolites that can lead to new therapies.


5.) Gryps

What it does: Gryps is tackling construction information silos to create a common information layer that gives building and facility owners quick, enriched and permanent access to document-centric information.

Website: gryps.io

Founders: Dareen Salama, Amir Tasbihi

The pitch: The vast size and complexity of the construction industry has resulted in all kinds of software and services that address various aspects of the construction processes, resulting in data and documents being spread across many siloed tools. Gryps says it picks up where all the construction-centered tools leave off: Taking delivery of the projects at the end of a construction job and providing all the information that facility owners need to operate, renovate, or build future projects through a platform that ingests data from various construction tools, mines the embedded information, then provides operational access through owner-centered workflows. 


6.) Expedock

What it does: Automation infrastructure for supply chain businesses, starting with AI-Powered Freight Forwarder solutions.

Website: expedock.com

Founders: King Alandy Dy (CEO), Jeff Tan (COO), Rui Aguiar (CTO)

The pitch: Freight Forwarders take care of all the logistics of shipping containers including financials, approvals and paper work for all the local entities on both sides of the sender and receiver geographies, but communications with these local entities are often done through unstructured data, including forms, documents, and emails and can subsequently eat up to 60% of operational expenses. Expedock is looking to transform the freight forwarding industry by digitizing and automating the processing and inputting of unstructured data into various local partner and governmental systems, including via a “huan in the loop” AI software service.


7.) Illume

What it does: A new way to share praise

Website: illumenotes.com

Founders: Sohale Sizar (CEO), Phil Armour (Engineering), Maxine Stern (Design)

The pitch: The process of thanking people is full of friction. Paper cards have to be purchased, signed, passed around; greetings on Facebook only mean so much. Using Illume, teams and individuals can download its app or come together on Slack and create a customized, private, and also shareable note. The nascent startup says one card typically has 10 contributors; it charging enterprises $3 per user per month, ostensibly so sales teams, among others, can use them.


8.) Quansa

What it does: Quansa improves Latin American workers’ financial lives via employer-based financial care

Website: quansa.io

Founders: Gonzalo Blanco, Mafalda Barros

The pitch: Fully 40% of employees across Latin America have missed work in the past 12 months due to financial problems. Quansa wants to help them get on the right track financially with the help of employers that use its software to link their employees’ payroll data with banks, fintechs and other financial institutions.

There is strength in numbers, says the firm. By funneling more customers to lenders through their employers, for example, these employees should ultimately be able to access to cheaper car loans, among other things.


9.) SpotlightAI

What it does: Spotlight turns sensitive customer information from a burden to an asset by using NLP techniques to identify, anonymize, and manage access to PII and other sensitive business data.

Website: hellospotlight.com

Founder: Austin Osborne (CEO)

The pitch: Data privacy legislation like GDPR and CCPA is creating an era where companies can no longer use their customer data to run their business due to the risks of fines, lawsuits, and negative media coverage. These lawsuits relating to misuse of personal data can reach billions of dollars and take years to settle. Spotlight’s software plugs into existing data storage engines via APIs and operates as a middleware within a company’s network. With advanced NLP and OCR techniques, it says it’s able to detect sensitive information in unstructured data, perform multiple types of anonymization, and provide a deep access control layer.


10.) Bennu

What it does: Bennu closes the loop on management communication

Website: bennu.io

Founder: Brenda Jin (CEO)

The pitch: Today’s work communication is done through forms, email, Slack, and docs; the timelines are unnatural.  Bennu is trying to solve the problem with communication loops that use integrations and smart topic suggestions to help employees prepare for substantive management conversations in seconds, not hours. 


11.) Playbook

What it does: Playbook automates the people coordination in your repeatable workflows with a simple system to create, execute and track any process with your team, customers, and more.

Website: startplaybook.com

Founders: Alkarim Lalani (CEO), Blaise Bradley (CTO)

The pitch: Whether you’re collecting time cards from 20 hourly workers every week, or managing 30 customer onboardings – you’re coordinating repetitive workflows across people over email and tracking it over spreadsheets. Playbook says it coordinates workflows between people at scale by taking programming concepts such as variables and conditional logic that let its customers model any workflow, and all packaged in an interface that enables anyone to build out their workflows in minutes.


12.) June Motherhood

What it does: Community-based care for life’s most important transitions.

Website: junemotherhood.com

Founders: Tina Beilinson (CEO), Julia Cole (COO), Sophia Richter (CPO)

The pitch: June is a digital health company focused on maternal health, with community at the core. Like a Livongo for diabetes management, June combines the latest research around shared appointments, peer-to-peer support and cognitive behavioral therapy to improve outcomes and lower costs, including through weekly programs and social networks that encourage peer-to-peer support. 


13.) Wagr

What it does: Challenge anyone to a friendly bet.

Website: wagr.us

Founders: Mario Malavé (CEO), Eliana Eskinazi (CPO)

The pitch: Wagr will allow sports fans to bet with peers in a social, fair, and simple way. Sending a bet requires just three steps, too: pick a team, set an amount, and send away. Wagr sets the right odds and handles the money.

Users can challenge friends, start groups, track leaderboards, and see what others are betting on, so they feel connected even if they aren’t together in the stadium. Customers pay a commission when they use the platform to find them a match, but bets against friends are free. The plan is to go live in Tennessee first and expand outward from there.


14.) Federato

What it does: Intelligence for a new era of risk

Website: federato.ai

Founders: Will Ross (CEO), William Steenbergen (CTO)

The pitch: Insurance companies are struggling to manage their accumulation of risk as natural catastrophes continue to grow in volume and severity. Reinsurance is no longer a reliable backstop, with some of the largest insurers taking $600 million-plus single-quarter losses net of reinsurance. 

Federato is building an underwriter workflow that uses dynamic optimization across the portfolio to steer underwriters to a better portfolio balance. The software lets actuaries and portfolio analysts drive high-level risk analysis into the hands of underwriters on the front lines to help them understand the “next best action” at a given point in time.


15.) rePurpose Global

What it does: A plastic credit platform to help consumer brands of any size go plastic neutral

Website: business.repurpose.global

Founders: Svanika Balasubramanian (CEO), Aditya Siroya (CIO), Peter Wang Hjemdahl (CMO

The pitch: Consumers worldwide are demanding businesses to take action on eliminating plastic waste, 3.8 million pounds of which are leaked into the environment every few minutes. Yet even as brands try, alternatives are often too expensive or worse for the environment. Through this startup, a brand can commit to the removal of a certain amount of plastic, which will then be removed by the startup’s loal watse management partners and recycled on the brand’s behalf (with rePurpose verifying that the process adheres to certain standards). The startup says it can keep a healthy margin while also running this plastic credit market, and that its ultimate vision is to our vision is to become a “one-stop shop for companies to create social, economic, and environmental impact.”


16.) Ladder

What it does: A professional community platform for the next generation

Website: ladder.io

Founders: Akshaya Dinesh (CEO), Andrew Tan

The pitch: LinkedIn sucks, everyone hates it. Ladder (which may have a trademark infringement battle ahead of it) is building a platform around community instead of networks. The idea is that users will opt in to join communities with like-minded individuals in their respective industries and roles of interest. Once engaged, they can participate in AMAs with industry experts, share opportunities, and have 1:1 conversations.

The longer term ‘moat’ is the data it collects from users, from which it thinks it can generate more revenue per user than LinkedIn. (By the way, this is the startup that has already signed a term sheet with a firm whose team was watching the demo day live on Tuesday.)


Exporta

How it works: Exporta is building a B2B wholesale marketplace connecting suppliers in Latin America with buyers in North America.

Website: exporta.io

Founders: Pierre Thys (CEO), Robert Monaco (President)

The pitch: The U.S. now imports more each year from Latin America than from China, but LatAm sourcing remains fragmented and manual. Exporta builds on-the-ground relationships to bring LatAm suppliers onto a tech-enabled platform that matches them to U.S. buyers looking for faster turnaround times and more transparent manufacturing relationships.


Via

What it does: Via helps companies build their own teams in new countries as simply as if they were in their HQ.

Website: via.work

Founders:  Maite Diez-Canedo, Itziar Diez-Canedo

The pitch: Setting up a team in a new country is very complex. Companies need local entities, contracts, payroll, benefits, accounting, tax, compliance…and the list goes on. Via enables companies to build their own teams in new countries quickly and compliantly by leveraging  local entities to legally employ teams on their behalf, and integrate local contracts, payroll, and benefits in one platform. By plugging into the local hiring ecosystem, Via does all the heavy lifting for its customers, even promising to stand up a team in 48 hours and at less expense than traditional alternatives. (It’s charging $600 per employee per month in Canada and Mexico, where it says it has already launched.)

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