Monthly Archives: November 2020

News: Cato Network snags $100M Series E on $1B valuation as cloud wide area networking thrives

  • November 17, 2020
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Cato Networks has spent the last five years building a cloud-based wide area network that lets individuals connect to network resources regardless of where they are. When the pandemic hit, and many businesses shifted to work from home, it was the perfect moment for technology like this. Today, the company was rewarded with a $100

Cato Networks has spent the last five years building a cloud-based wide area network that lets individuals connect to network resources regardless of where they are. When the pandemic hit, and many businesses shifted to work from home, it was the perfect moment for technology like this. Today, the company was rewarded with a $100 million Series E investment on $1 billion valuation.

Lightspeed Venture Partners led the round with participation from new investor Coatue and existing investors Greylock, Aspect Ventures/Acrew Capital, Singtel Innov8 and Shlomo Kramer (who is the co-founder and CEO of the company). The company reports it has now raised $332 million since inception.

Kramer is a serial entrepreneur. He co-founded Check Point Software, which went public in 1996 and Imperva, which went public in 2011, and was later acquired by private equity firm Thoma Bravo in 2018. He helped launch Cato in 2015. “In 2015, we identified that the wide area networks (WANs), which is a tens of billions of dollars market, was still built on the same technology stack […] that connects physical locations, and appliances that protect physical locations and was primarily sold by the telcos and MSPs for many years,” Kramer explained.

The idea with Cato was to take that technology and redesign it for a mobile and cloud world, not one that was built for the previous generation of software that lived in private data centers and was mostly accessed from an office. Today they have a cloud-based network of 60 Points of Presence (PoPs) around the world, giving customers access to networking resources and network security no matter where they happen to be

The bet they made was a good one because the world has changed, and that became even more pronounced this year when COVID hit and forced many people to work from home. Now suddenly having the ability to sign in from anywhere became more important than ever, and they have been doing well with 2x growth in ARR this year (although he wouldn’t share specific revenue numbers).

As a company getting Series E funding, Kramer doesn’t shy away from the idea of eventually going public, especially since he’s done it twice before, but neither is he ready to commit any time table. For now, he says the company is growing rapidly, with almost 700 customers — and that’s why it decided to take such a large capital influx right now.

Cato currently has 270 employees with plans to grow to 400 by the end of next year. He says that Cato is a global company with headquarters in Israel where diversity involves religion, but he is trying to build a diverse and inclusive culture regardless of the location.

“My feeling is that inclusion needs to happen in the earlier stages of the funnel. I’m personally involved in these efforts, at the educational sector level, and when students are ready to be recruited by startups, we are already competitive, and if you look at our employee base it’s very diverse,” Kramer said.

With the new funds, he plans to keep building the company and the product. “There’s a huge opportunity and we want to move as fast as possible. We are also going to make very big investments on the engineering side to take the solution and go to the next level,” he said.

News: SpaceX’s Crew Dragon docks with the International Space Station for first operational mission

  • November 17, 2020
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SpaceX’s astronaut-ferrying Crew Dragon spacecraft is now docked to the International Space Station in Earth’s orbit, marking the successful completion of the first phase of its inaugural operational mission. Dragon was certified for human spaceflight earlier this month by NASA after having completed the development and testing program with a successful human demonstration flight earlier

SpaceX’s astronaut-ferrying Crew Dragon spacecraft is now docked to the International Space Station in Earth’s orbit, marking the successful completion of the first phase of its inaugural operational mission. Dragon was certified for human spaceflight earlier this month by NASA after having completed the development and testing program with a successful human demonstration flight earlier in 2020.

Dragon lifted off from Florida on Sunday evening, carrying four astronauts, including NASA’s Michael Hopkins, Victor Glover and Shannon Walker, and JAXA’s Soichi Noguchi. The spacecraft then spent a little over a day on orbit, moving into position to meet the Space Station and prepare for docking. It completed that late on Monday night, acting completely autonomously using SpaceX’s automated docking software to connect to the Space Station’s new international docking adapter, and then the hatch was opened by the existing ISS crew and the newly arrived team members made their way over.

The successfully docking and hatch opening means that SpaceX and NASA have achieved their goals so far with the Commercial Crew program: Creating a viable and effective means of launching people from the U.S. to space, and to the ISS. This mission’s astronauts will now spend the next six months at the Space Station, with Dragon attached, and then they’ll return likely next June in the second and final phase of this inaugural mission, which will prove that the system also works for coming back to Earth.

News: Surging homegrown talent and VC spark Italy’s tech renaissance

  • November 17, 2020
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As Italy reinstates many COVID-19 restrictions, the country’s tech ecosystem is watching and waiting to see what the wider effects of the emergency will be. Italy’s ecosystem for tech venture capital and startups has been in development for years and has made decent strides in the last decade. Will the coronavirus stymie their efforts? Put

As Italy reinstates many COVID-19 restrictions, the country’s tech ecosystem is watching and waiting to see what the wider effects of the emergency will be. Italy’s ecosystem for tech venture capital and startups has been in development for years and has made decent strides in the last decade. Will the coronavirus stymie their efforts?

Put off by high taxes and paperwork in their home country, many Italian entrepreneurs moved to places like London in years past to startup. Indeed, the Italian Ministry of Economic Development and the Italian Trade & Investment Agency in London have even been known to fund Italian entrepreneurs abroad to help them gain more experience. There are an estimated 100,000 Italians already living in London, attracting the likes of Riccardo Zacconi, co-founder of King.com (maker of Candy Crush) and Simon Beckerman of social shopping app Depop.

Rome has more than 20 incubators/accelerators and many established VCs; because of its lower costs compared to other European cities, it’s become a major base for startups. However, while many startups exist in cities like Turin, Bologna, Naples and Rome, Milan is generally seen as a bigger ecosystem because of its mercantile culture and a significant share of VC funds.

The good news: VC funding in Italy has grown. In 2019, Italian startups attracted $850 million, compared to just €140 million in 2017, as the VC ecosystem became less insular and more international investors arrived. Milan tends to attract the lion’s share of VC funding — in 2019, startups located there received €311 million, according to NGP Capital. In 2019, about 300 deals were venture-backed.

Even so, Italy is still very much behind its European counterparts, which means founders tend to move their HQ to fundraise elsewhere, while keeping their comparatively cheaper workforce at home. Italy continues to have structural problems for startups: Credit is based on a company’s financial history, so loans are off-limits.

However, in June 2020, the Italian government sponsored a €1 billion investment program aimed at the native startup ecosystem, creating a new venture arm: CDP Venture Capital.

This has seven different funds under management, including a VC fund-of-funds, “Series A/B matching” funds and acceleration funds. It has also launched two different acceleration projects aimed at supporting SMEs and startups with mentoring, networking and support services.

Additionally, the Ministry of Economic Development launched an initiative called The Italian Startup Act that bundled previously passed legislation to incentivize the Italian ecosystem with tools like tax breaks on early-stage investments and R&D credits, plus a startup visa to attract talent.

Entrepreneurs still face plenty of red tape, however, which is tough enough for Italians, let alone outsiders who might consider relocating. And skeptical observers are concerned that some of the government-backed initiatives look like the government is trying to pick winners, which rarely ends well. Plus, there is controversy about how a €209 billion recovery fund from the European Union, earmarked for the country’s 11,000 startups, will be spent.

But the talent pool is increasing, with Italian universities attracting more overseas students with English-language-based courses and big corporates investing. Microsoft has announced a $1.5 billion investment plan, which includes its first cloud data center in the country. NTT data is investing in Calabria. Amazon has invested in new infrastructure. And Apple has sponsored a Naples-based developer academy.

With a population of 60 million (for comparison, U.K.: 66 million, Germany: 83 million, Spain: 46 million), Italy is not lacking in people, but GDP per capita is a low $34,000. It has an estimated 67 VC funds, with 18 of them started since 2015.

Notable startups from Italy include MoneyFarm (which has raised $127 million from United Ventures, Allianz), Prima.it (€100 million, Blackstone, Goldman Sachs), Soldo (€83 million, Accel, Battery Ventures), Casavo (€59 million, Greenoaks, Picus, Project A, 360 Capital), Milkman (€32 million, p101, 360 Capital Partners) and Mosaicoon (€12 million).

Approximately half of seed to Series A funds have raised $100 million+ funds in the last year. However, seed rounds for startups remain low, even for Europe, ranging from anywhere from €300,000 to €1 million.

ScaleIT is a notable tech business event for the country (which clearly took over from the fabulous TechCrunch Italy events of a million years ago).

And finally, WeWork is opening two more buildings in Milan, taking it to five locations in the city, by mid-2021. Milan-born Talent Garden, which has raised €56 million, is still bullish about co-working despite the pandemic. While this was announced before news of a vaccine emerged, it’s clear that major players are still betting on Italy’s emerging tech ecosystem.

These are the investors we interviewed:

Giulia Giovannini, partner, United Ventures

What trends are you most excited about investing in, generally?

We are sector-agnostic in our approach, and we invest both in B2B and B2C tech/digital companies from various industries. We mainly invest in SaaS companies with some proven traction in the market – but overall, we seek the best technology entrepreneurs that want to make an impact. Our focus is on entrepreneurial and technological initiatives aimed at digitalizing and increasing the productivity of traditionally undigitized sectors. Lately, we have been looking into insurtech and medtech.

What’s your latest, most exciting investment?

In October 2020, we led a $7M Series A round in Boom Image Studio, a Milan-based company on a mission to reshuffle the world of commercial photography by transforming the way digital photo content is generated. We believe that Boom will significantly accelerate the photography industry’s digital transformation, dramatically improving the photo production experience for customers and photographers.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?

The strategy of venture capital is not to capitalize on the continuity of trends already existing on the market or to focus on the hype of the moment, but rather the exercise of imagining the demands of tomorrow, intercepting products and services capable of reinventing entire sectors with a view to a future industrial policy. Startups using tech to foster remote work, education, healthcare are undoubtedly in the spotlight at the moment: the key question is which technologies and platforms can meet current priorities and remain relevant in the post-pandemic future.

What are you looking for in your next investment, in general?

There is no such thing as a “typical United Ventures company,” but there is a paradigm that all our best investments have in common: ambitious founders with strong values and who know how to inspire their team, with an entrepreneurial project focused on a large growing market and the ability to scale internationally.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?

I have seen too many startups in payment services. I think the wave has passed.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?

We are a European VC with a strong focus – approximately 50% – on the Italian ecosystem, where we are best placed to support teams in terms of value-add. We are committed to making the most of the Italian market’s peculiarities, connecting Italian entrepreneurs and talents to the global market. On a national level, we are active all around Italy, with startups headquartered in Milan, Rome, Bologna, Pisa.

Which industries in your city and region seem well-positioned to thrive, or not long-term? What are companies you are excited about (your portfolio or not), which founders?

Milan is well positioned on fintech matters, while Italy is home to many exciting initiatives very much oriented towards deep technologies thanks to research centers of excellence such as Milan and Turin Polytechnics and the IIT (Italian Institute of Technology). Concerning our portfolio, I am very excited by Credimi, a digital lending platform offering digital factoring solutions to enterprises experiencing significant growth rates, and I’m looking forward to working with Boom, our latest investment.

How should investors in other cities think about the overall investment climate and opportunities in your city?

The Italian ecosystem is still small compared to other European hubs, but it has been developing rapidly in recent years. Milan has earned a national hub’s status and reached that critical mass — of large companies, multinationals, universities with cosmopolitan vocation, new companies — capable of generating an ecosystem able to attract the best talents and connect them with other continental and global hubs.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?

I think startups will continue to gravitate around big cities’ hubs because they bring value in terms of network and contamination. However, the pandemic has allowed an acceleration in the adoption of remote work organization, enabling the search and recruitment of talents from abroad. Many of our portfolio companies opened up fully-remote roles.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?

B2C startups are certainly favored due to the increased penetration of e-commerce. On the other side, the adoption of new B2B business models may be slowed down by the modus operandi of large companies that are not at their ease signing remote commercial agreements, causing delays.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?

Our role, as Venture Capital investors, is to support our portfolio companies at our best capacity. Getting fundraising done and signing customer deals has been challenging in these months, so our advice is, first of all, to control and manage the cash carefully. We highlighted the need to communicate effectively and realistically with their employees, clients, and stakeholders. Concerning our investment strategy, we refocused on the Italian market.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?

Tech startups are facing challenges and opportunities. Our portfolio is navigating the pandemic with determination and creativity. For example, Credimi has put in place several initiatives to aid Italian SMEs to face the COVID-19 emergency. More generally, B2C startups have seen significant growth in revenues, while B2B startups have, in some cases, seen a lengthening in the average time taken to underwrite commercial contracts.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.

Having managed to close the investment in BOOM working remotely with the startup from the first meetings to the closing, I had the confirmation that our job can be easily managed through remote work.

Any other thoughts you want to share with TechCrunch readers?

Technology is driving radical change across all aspects of our life, and the uncertain times we are going through has accelerated the digital transformation in multiple ways. Our job requires a long-term outlook: now more than ever, we are confident in technological innovation’s potential to lay the groundwork for a brighter future.

Anna Tampieri, partner, ENEA Tech

What trends are you most excited about investing in, generally?

Material science and biotech.

What’s your latest, most exciting investment?

Green Bone Ortho.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?

Startups dealing with new materials.

What are you looking for in your next investment, in general?

Innovative materials and solutions coming from recycling and the circular economy.

What are companies you are excited about (your portfolio or not), which founders?

Food and beverage, biotech, automation and tourism.

How should investors in other cities think about the overall investment climate and opportunities in your city?

Before the pandemic the business climate was positive, even if it was challenging.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
No, I don’t expect that: I think that the pandemic will create a move towards “localism.”

What are the opportunities startups may be able to tap into during these unprecedented times?

Mainly biotech and company involved in developing various anti-COVID solutions.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?

Startups dealing with new solutions for personal mobility.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?

Many.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.

The moment that I contacted a newco developing an innovative cure for COVID-19 using monoclonal antibodies.

Any other thoughts you want to share with TechCrunch readers?

I would share an unpopular thought: To focus more on true innovations versus the short-term economic return.

Giuseppe Donvito, partner, P101 Ventures

News: Twentyeight Health partners with Healthify to expand its reproductive and sexual health services

  • November 17, 2020
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Targeting the population that’s most underserved with new treatment options has been part of the mission fro Twentyeight Health since its launch. Now a new partnership with the venture-backed startup, Healthify, means that the company will be able to expand its reach.  Healthify works with managed care organizations and case workers to integrate social determinants

Targeting the population that’s most underserved with new treatment options has been part of the mission fro Twentyeight Health since its launch. Now a new partnership with the venture-backed startup, Healthify, means that the company will be able to expand its reach. 

Healthify works with managed care organizations and case workers to integrate social determinants of health into the healthcare system.

Social factors have a significant role to play in patient outcomes, according to new research, and both Twentyeight Health and Healthify are trying to do their part to ensure that access to care becomes less of an issue.

Twentyeight Health sells and delivers birth control pills, patches, rings, shots and emergency contraception prescriptions at a low-cost — or covered by insurance including Medicaid.

Through the Healthify integration, the company will be able to offer its services through health plans and providers that use Healthify to determine social factors that may influence treatment, the companies said.

“This partnership comes at a time when many women in vulnerable communities are in need of prescription delivery or virtual healthcare services due to COVID-19,” said Amy Fan, Co-Founder of Twentyeight Health. “By working with Healthify, we can strengthen our efforts to ensure that all women who want birth control are able to access it.”

Since its launch two years ago, Twentyeight Health is now operating in six states including Florida, Maryland, New Jersey, New York, North Carolina and Pennsylvania.

“Together, we can expand Twentyeight Health’s impact by offering their services to help individuals receive the low- or no- cost birth control that is right for them,” said Manik Bhat, Founder and Chief Executive Officer of Healthify.

To date, Healthify has raised $25.5 million from investors including Primary Venture Partners and BlueCross Blue Shield Venture Partners. Twentyeight Health recently announced a $5 million early stage round of funding and is backed by investors including Third Prime and Town Hall Ventures.

News: Extra Crunch Live: Join Bessemer’s Byron Deeter for a live Q&A today at 12pm PT/3pm ET

  • November 17, 2020
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Byron Deeter’s portfolio includes Twilio, DocuSign, Box, Canva, Intercom, SendGrid and many more. He is one of the most knowledgeable and experienced SaaS and cloud investors in the biz, which is why Alex Wilhelm and I are more than thrilled to lead a live Q&A with Deeter on today’s forthcoming episode of Extra Crunch Live.

Byron Deeter’s portfolio includes Twilio, DocuSign, Box, Canva, Intercom, SendGrid and many more. He is one of the most knowledgeable and experienced SaaS and cloud investors in the biz, which is why Alex Wilhelm and I are more than thrilled to lead a live Q&A with Deeter on today’s forthcoming episode of Extra Crunch Live.

Deeter co-authors Bessemer Venture Partners’ 10 Laws of Cloud Computing and the annual State of the Cloud report, created the Bessemer Forbes Cloud 100 and is now the host of Bessemer’s new podcast Cloud Giants. To say this man has his head in the cloud would be an understatement.

The move over to the cloud had plenty of momentum behind it before the pandemic struck, which has only served to speed up that transition even more. With businesses across almost every industry moving to the cloud, and startups clamoring to get a piece of the pie, Deeter has a unique perspective on what it takes to win big in this market.

We’ll chat with Deeter about what he looks for in SaaS and cloud startups, both subjectively (founder qualities) and objectively (metrics), and which trends he foresees in the year ahead.

I’ll also Q Deeter about his investment in Team SoloMid as anyone who knows me knows I can’t resist a good discussion about esports, especially considering that investment is a bit of an outlier in Deeter’s portfolio.

Of course, Alex and I won’t be the only ones asking questions. Extra Crunch Members are more than encouraged to submit their own question (you can do that ahead of time using the link below), which we’ll pass on to Deeter during the conversation.

You can catch the chat live at 3pm ET/12pm PT today or watch it on demand right here. (Pro Tip: That link will also take you to the full library of all Extra Crunch Live episodes of the past, which include conversations with guests such as Mark Cuban, Roelof Botha, Aileen Lee, Charles Hudson, Max Levchin, Zack Perret and many, many more.)

If you’re not yet an Extra Crunch member, what the hell are you waiting for? You can sign up here (and you really should!).

Details:

Below are links to add the event to your calendar and to save the Zoom link. We’ll share the YouTube link shortly before the discussion:

News: OpenPhone rings up $14 million to put your work phone in an app

  • November 17, 2020
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Communication tools are evolving quickly. We have all kinds of social media for our personal lives, Slack for chatting with our coworkers, Discord for gaming and other communities, and Zoom and FaceTime for when we want to look someone (almost) in the eyes. But the business phone has been mostly stuck in the past. OpenPhone

Communication tools are evolving quickly. We have all kinds of social media for our personal lives, Slack for chatting with our coworkers, Discord for gaming and other communities, and Zoom and FaceTime for when we want to look someone (almost) in the eyes.

But the business phone has been mostly stuck in the past. OpenPhone wants to change that.

The company, which today announced the close of a $14 million Series A financing, is looking to bring the same modern communications features that we use every day to our work phone. The round. was led by Craft Ventures’ David Sacks with participation from Slow Ventures, Kindred Ventures, Y Combinator, Garage Capital and Chapter One Ventures.

OpenPhone lets employees make calls, send texts, and add context to their business contacts all from an app on their phone or computer. Moreover, the app lets an organization work collaboratively across the platform. For example, a company or department can have a single shared number, as well as their own individual numbers, and can also share and sync information about contacts across the org.

Alongside the announcement of the funding, OpenPhone is also releasing a handful of new features on the platform, including new integrations with HubSpot and Zapier. The app is also introducing international calling, group messaging among teammates, search functionality, and analytics around OpenPhone usage.

The company claims that 77 percent of consumers use text for business communication and that upwards of 80 percent of small businesses use a personal cell phone for professional calls. That said, legacy solutions are often highly complicated phones with no messaging capabilities.

There are, however, several competitors looking to bring the work phone into the 21st century alongside OpenPhone. RingCentral and DialPad are just two that also put the work phone in the cloud, and they’ve raised $44 million and $220 million respectively with an impressive list of investors across the two of them (such as Sequoia and A16Z).

OpenPhone costs $10/month per user for the base tier, with more expensive options for more complicated use cases. The startup is happy to sell directly to individuals within an organization for a bottom-up approach.

“The biggest challenge so far is breaking out of the noise,” said cofounder and CEO Mahyar Raissi. “Our strategy is to build OpenPhone for startups because they’re small businesses that grow up and can become difficult to serve, and if we can build for that kind of company that means we’re the type of solution that can potentially be applied in most use cases.”

OpenPhone has a team of 11 employees, with just over 25 percent female team members and the same ratio of non-white employees. Four of the 11 employees are first-generation immigrants, including the cofounders.

The company says its tripled revenue since the beginning of the pandemic, in March 2020, and has powered more than 7.5 million calls and more than 17.3 million messages since launch.

News: Giraffe360, a robotic camera for real estate, raises $4.5M from LAUNCHub and Hoxton Ventures

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Giraffe360 has a robotic camera, combined with a subscription service, which enables real estate agents and brokers to generate high-resolution photos of properties, floor plans and virtual tours easily. It’s now raised $4.5M in a funding round led by LAUNCHub Ventures and Hoxton Ventures. Also participating is HCVC (Hardware Club), alongside existing investor Change Ventures.

Giraffe360 has a robotic camera, combined with a subscription service, which enables real estate agents and brokers to generate high-resolution photos of properties, floor plans and virtual tours easily. It’s now raised $4.5M in a funding round led by LAUNCHub Ventures and Hoxton Ventures. Also participating is HCVC (Hardware Club), alongside existing investor Change Ventures.

The startup is leaning into the opportunity of 2020 qs property viewings have migrated from physical to virtual, in large part because of the pandemic.

Giraffe360 uses a high-specification sensor, LIDAR laser technology and robotics. The camera is sold as a service for £399 per month to real estate agents and brokers. It was founded in 2016 in Riga, Latvia by two brothers Mikus Opelts and Madars Opelts and is headquartered in London, UK.

The competition is obviously the older model of hiring a professional photographer or the agent taking their own pictures. The 3D rendering or virtual tour also usually requires professional help.

In the US, a similar company, Matterport, has raised $114M to date.

Mikus Opelts, founder and CEO of Giraffe360 said in a statement: “Our growth numbers speak for themselves. Subscriptions grew 800% in 2019 and will be even higher in 2020. More than ever this year, our clients and prospective buyers and tenants have started to see virtual viewing as the default way to look at a property.”

Todor Breshkov, partner at LAUNCHub Ventures said: “We’re always keeping an eye on proptech trends and we’re impressed with the potential their product has to modernize the real estate industry.”

Hussein Kanji, partner at Hoxton Ventures: “Giraffe360 has global potential with customers in 26 countries, including industry-leading brands such as RE/MAX, CBRE, and BNP Paribas Real Estate.”

News: Amazon launches Amazon Pharmacy, a delivery service for prescription medications

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A little over two years after its $753 million acquisition of the prescription medicine delivery service Pillpack, Amazon has finally launched Amazon Pharmacy, its online and mobile prescription medication ordering and fulfillment service. Using a secure pharmacy profile, customers can add their insurance information, manage prescriptions and choose payment options all through Amazon’s service. And

A little over two years after its $753 million acquisition of the prescription medicine delivery service Pillpack, Amazon has finally launched Amazon Pharmacy, its online and mobile prescription medication ordering and fulfillment service.

Using a secure pharmacy profile, customers can add their insurance information, manage prescriptions and choose payment options all through Amazon’s service. And in another small push towards wider healthcare services, and not just selling items (although, yes, the outcome is to sell items), users are provided with “self-service help” tools on Amazon’s portal, and they also have the option to speak to pharmacists either via over the phone, for advice: “Friendly and knowledgeable pharmacists are available 24/7 to answer questions about medications.”

After launching its own line of over-the-counter drugs in 2019, this is arguably Amazon’s broadest push into the healthcare business to-date, one that could open up very large, new revenue opportunities for the company, especially as the ongoing COVID-19 pandemic pushes consumers both toward more remote care, and using online channels for all their shopping needs.

Indeed, this is also more than just Amazon’s continued expansion as a one-stop shop for medicine and wellness. For many consumers, shopping at the pharmacy and shopping for groceries goes hand-in-hand (and of course over decades, many standalone pharmacies have moved more into becoming like stores selling food, while those selling food also have pharmacy counters).

Having this alongside Amazon’s very aggressive and ambitious grocery and food play — which mirrors its drug strategy by spanning its own brands as well as those it has bought it, including Amazon Fresh, Whole Foods, Amazon’s own brand items, and physical Amazon grocery stores — gives the company a more complete experience, where shoppers can more fully replace their shopping needs using Amazon alone.

While Amazon Pharmacy looks to be a US-only launch for now, it’s a global opportunity. Online pharmacy services are projected to hit revenues of $131 billion by 2025 worldwide. Prescription drugs, meanwhile, have been estimated to be a $904 billion industry this year, growing to nearly $1.3 trillion by 2025.

“As more and more people look to complete everyday errands from home, pharmacy is an important and needed addition to the Amazon online store,” said Doug Herrington, Senior Vice President of North American Consumer at Amazon, in a statement. “PillPack has provided exceptional pharmacy service for individuals with chronic health conditions for over six years. Now, we’re expanding our pharmacy offering to Amazon.com, which will help more customers save time, save money, simplify their lives, and feel healthier.”

In addition to the basic Amazon Pharmacy service, Amazon is rolling out special features for Prime members: those subscribing to Amazon’s premium membership tier can receive unlimited, free two-day delivery on Amazon orders, the company said in a statement.

Prime members can also save on medications when they pay without insurance on Amazon Pharmacy — and receive the same discounts at 50,000 other participating pharmacies nationwide. Amazon Prime prescription savings benefit can save members up to 805 off of generic and 40% of of brand name medications when paying without insurance.

Prime members can access their prescription savings at checkout and all Amazon customers will be able to shop for medications — including branded and generic versions and different form factors and dosages — and order them online.

Amazon is also letting customers compare prices with their insurance co-pay, without insurance or with the savings available through the Prime prescription savings plan to choose the lowest option. Amazon is also staffing a pharmacy service accessible at all hours so that customers can answer questions about their medications.

“We understand the importance of access to affordable medication, and we believe Prime members will find tremendous value with the new Amazon Prime prescription savings benefit,” said Jamil Ghani, Vice President, Amazon Prime, in a statement. “Our goal is for Prime to make members’ lives easier and more convenient every day, and we’re excited to extend the incredible savings, seamless shopping experience, and fast, free delivery members know and love with Prime to Amazon Pharmacy.”

The launch of the new Pharmacy service within Amazon is a blow to other discount prescription services like the publicly traded GoodRx and companies like RxSaver and delivery services like ExactCare Pharmacy.

The competition from Amazon was likely one reason why GoodRx began offering telemedicine services as a point of differentiation and to move up the value chain. It will be interesting to see if Amazon will also move to providing virtual care for more than its employees. Last year, the company rolled out Amazon Care for its workers in Seattle as part of a pilot service that provided both in-person and telemedicine services.

At the time, the company limited its pilot to employees, but (as TechCrunch reported) the highly publicized nature of their approach, and the amount of product development that clearly went into developing the initial app, user experience and brand could indicate that it has the broader U.S. market in mind as a potential expansion opportunity down the line. Reports from last year also suggested that Amazon could make a play in consumer health with new wearable fitness tracking devices, which could very nicely complement insurance and healthcare services offered at the enterprise and individual level.

News: India’s insurance platform Turtlemint raises $30 million

  • November 17, 2020
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Turtlemint, an Indian startup that is helping consumers identify and purchase the most appropriate insurance policies for them, has raised $30 million in a new financing round as it looks to reach more users in small cities and towns in the world’s second largest internet market. The new round, the five-year-old Mumbai-headquartered startup’s Series D,

Turtlemint, an Indian startup that is helping consumers identify and purchase the most appropriate insurance policies for them, has raised $30 million in a new financing round as it looks to reach more users in small cities and towns in the world’s second largest internet market.

The new round, the five-year-old Mumbai-headquartered startup’s Series D, was led by GGV Capital . American Family Ventures, MassMutual Ventures and SIG, and existing investors Blume Ventures, Sequoia Capital India, Nexus Venture Partners, Dream Incubator and Trifecta Capital also participated in the round, which brings Turtlemint’s total to-date raise to $55 million.

Only a fraction of India’s 1.3 billion people currently have access to insurance. Insurance products had reached less than 3% of the population as of 2017, according to rating agency ICRA. An average Indian makes about $2,100 a year, according to the World Bank. ICRA estimated that of those Indians who had purchased an insurance product, they were spending less than $50 on it in 2017.

A range of startups in India are trying to disrupt this market. Analysts at Goldman Sachs estimated the online insurance market in India — which in recent years has attracted several major giants including Amazon and Paytm — to be worth $3 billion in a report they recently sent to clients.

Another major reason why existing insurance firms are struggling to sell to consumers is because they are too reliant on on-ground advisors.

Turtlemint co-founders Anand Prabhudesai (left) and Dhirendra Mahyavanshi pose for a picture (Turtlemint)

Instead of bypassing these advisors, Turtlemint is embracing them. It works with over 100,000 such agents, equipping them with digital tools to offer wider and more relevant recommendations to consumers and speed-up the onboarding process, which has traditionally required a lot of paperwork.

These advisors, who continue to command over 90% of all insurance sales in the country, “play a critical role in bridging the gap in tier 2 and 3 towns and cities, where low physical presence of insurance companies greatly impacts seamless access to insurance products and information,” the startup said.

Turtlemint works with over 40 insurance companies in India and serves as a broker, charging these firms a commission for policies it sells. The startup said it has amassed more than 1.5 million customers.

“By developing products for the micro-entrepreneurs and the rising middle class, Turtlemint has an opportunity to have a positive impact on India’s economy,” said Hans Tung, Managing Partner at GGV Capital, in a statement. “Dhirendra, Anand, and their team built an incredible platform that enables over 100,000 mom-and-pop financial advisors to serve consumers’ best interests with digital tools, helping middle-class families in India get insured with the best products available.”

In an interview with TechCrunch, Turtlemint co-founder Anand Prabhudesai said the startup will deploy the fresh capital to grow its network of advisors and improve its technology stack to further improve the experience for consumers. The startup today also offers training to these advisors and has built tools to help them digitally reach potential customers.

“Continuous education is a very important aspect of being a successful financial entrepreneur. To this end, we have created an online education product with a wide range of courses on financial products, advice-based sales techniques and other soft skills. Our content is now available in seven regional languages and over 20,000 learners are active each month on our edtech platform. A lot of these are first-time advisors who are taking their first steps towards starting their advisory business. Our target is to create a million successful financial entrepreneurs over the next 3-5 years,” he said.

News: Spacemaker, AI software for urban development, is acquired by Autodesk for $240M

  • November 17, 2020
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Autodesk, the U.S. publicly listed software and services company that targets engineering and design industries, has acquired Norway’s Spacemaker, a startup that has developed AI-supported software for urban development. The price of the acquisition is $240 million in a mostly all-cash deal. Spacemaker’s VC backers include European firms Atomico and Northzone, which co-led the company’s

Autodesk, the U.S. publicly listed software and services company that targets engineering and design industries, has acquired Norway’s Spacemaker, a startup that has developed AI-supported software for urban development.

The price of the acquisition is $240 million in a mostly all-cash deal. Spacemaker’s VC backers include European firms Atomico and Northzone, which co-led the company’s $25 million Series A round in 2019. Other investors on the cap table include Nordic real estate innovator NREP, Nordic property developer OBOS, U.K. real estate technology fund Round Hill Ventures and Norway’s Construct Venture.

Founded by Håvard Haukeland, Carl Christensen and Anders Kvale, and based in Oslo, Norway — but with a number of other outposts around the globe — the 115-person Spacemaker team develops and sells cloud-based software that utilises AI to help architects, urban designers and real estate developers make more informed design decisions. By having Spacemaker look over a designer’s shoulder, as CEO Haukeland likes to say, the software aims to augment the work of humans and not only speed up the urban development design and planning process but also improve outcomes, including around sustainability and quality of life for the people who will ultimately live in the resulting spaces.

To do this, the platform enables users to quickly “generate, optimize, and iterate on” design alternatives, taking into account design criteria and data like terrain, maps, wind, lighting, traffic and zoning, etc. Spacemaker then returns design alternatives optimized for the full potential of the site.

“It was never our plan in the beginning of 2020 to sell the company,” Haukeland told me on a call last week. “But when we started talking to Autodesk, who have reached out for a while, we realized they share our vision. And we understood that this can put our vision on steroids and we can really reach that vision much faster. And that’s what drives us, that’s what we want to do: We want to realize our vision and get our offering out in the world, at the hands of millions of architects and engineers and developers”.

During a call late Friday, Andrew Anagnost, CEO and president of Autodesk, said the acquisition of Spacemaker is in line with the company’s long-term strategy of using the power of the cloud, “cheap compute” and machine learning to evolve and change the way people design things.

“This is something strategically we’ve been working towards, both with the products we make internally with the capabilities we roll out that are more cutting edge, and also our initiative when we look at companies we’re interested in acquiring,” he said.

“We’ve been watching this space for a while; the application that Spacemaker has built we would characterize it, from our terminology, as ‘generative design’ for urban planning, meaning the machine generating options and option explorations for urban planning-type applications.

“Spacemaker really stands out in terms of applying cloud computing, artificial intelligence, data science, to really helping people explore multiple options and come up with better decisions”.

Image Credits: Spacemaker

Post-acquisition, the plan is to keep Spacemaker as an autonomous unit within Autodesk and (hopefully) not interfere too much with the formula and startup ethos that has seemingly been working, while also enabling the team to have the resources needed to continue on their mission.

“They want to let Spacemaker be Spacemaker; they’re not [just] acquiring our product, they’re acquiring the potential and the journey we’re on as a team,” says Haukeland. “They’re acquiring the mission we’re on, the way we work, the knowledge we have, [and] all our failed attempts along the way… so it’s much more than just swallowing the product”.

That knowledge and those “failed attempts” span not only the Spacemaker CEO’s own background as an architect, but the path to product-market-fit and the technology itself.

“Initially they targeted architects directly, but realised that they have relatively small budgets,” recalls Michiel Kotting, who led the startup’s Series A round on behalf of Northzone. “From Håvards experience in the industry they decided to pivot to serving [property] developers who then give the software to their in-house and external architects. They were surprised to see that they could get significant six-figure deals per project out of the gate”.

He also says the team was convinced early on that generative design is the future. “Rather than be software that can do what architects used to do on paper, the full power of modern day compute is put at the disposal of architects,” he told me. “The path to get there has been a bit like Deep Mind’s AlphaGo project — a myriad of different techniques, ML, AI, rules based optimisation etc. that jointly provide the most powerful result, rather than just ‘lets just throw the latest deep learning model at the project and see what sticks’ “.

“They were actually solving a problem, a problem that our customers were telling us that they wanted solved and liked the way they were solving it,” says Anagnost. “So it wasn’t just a great team with a great idea and some great technology, they actually solved the problem. And I think this is really important: You can play with technology all you like, but if you can’t find the intersection of either creating a whole new opportunity or market or solving an existing problem in a completely new and disruptive way, then you really haven’t created something useful. They’ve created something useful”.

“When we led Spacemaker’s Series A round less than two years ago, we saw a world-leading product and a company with the DNA to push the boundaries of what was possible in applying AI to architecture and property development,” says Atomico’s Ben Blume . “As the global leader in architecture, engineering and construction (AEC) software, and with products that set the standard across the industry, Autodesk’s acquisition validates our belief that world-class AI products are being built here in Europe”.

Image Credits: Spacemaker

In building out the product iteratively, Northzone’s Kotting says the Spacemaker team “honed the art of ‘human in the loop’ “. “The generative design calculates the possible solution space, and the architect can then navigate that space and figure out interesting starting points and see the impact of design choices. So you can design something that is both beautiful/fit for purpose and optimal”.

He also doesn’t think the team would have been able to do that if it wasn’t for a combination of architectural talent and “bleeding-edge” software designers. This is where founding the company in Norway may have been an advantage. “It might not be so obvious you’d find a lot of those in Norway, but some of the hard-core optimisation problems in oil and gas are very similar to the Spacemaker problem, so it is actually a very fertile country for that,” adds Kotting.

The challenge then wasn’t Norway’s talent pool but persuading the most talented people to work for a startup. This is where Spacemaker’s mission, and Nordic culture more generally, was also a strength.

Reflects Haukeland: “What we experienced in the early days is that when you’re trying to solve such a hard problem, [with] such an ambitious journey, you need incredibly talented people who are able to get a lot of autonomy and solve problems, because there are so many problems you need to solve. And I think what we experienced in Norway four years ago was that a lot of the really good people went into either oil and gas or, you know, consulting. And what we saw was that people really want to join a mission where they can have a positive impact, and they can use their capacity and their talent and their brains to solve difficult problems. We were lucky to get so much incredible talent to join us because of that”.

Anagnost also cites Spacemaker’s culture and its European vantage-point as a differentiator. “This is a European high technology company using cutting-edge algorithms and approaches in the cloud and they start it from an ethical framework that might not be as common as startups in other places,” he tells me. “So if you were to ask me what was differentiating here, I think the ethical framework they’re coming in with this is, ‘we’re going to use this data to enable this audience to do a better job of what they do every day. And we’re going to do it in such a way that we’re partnering with the customers, and we’re also creating better outcomes, not just for them but for the whole ecosystem of stakeholders… and one of the stakeholders is the environment of the area. That ethos from a technology company, probably, you know, rose up faster in the European market than it might have in some of the U.S. markets where it’s more about, ‘let’s plow through things,’ and not so much about what is my ethical foundation here and what I’m trying to accomplish?”

However, with Europe’s current infatuation with unicorns — and a growing track record of producing companies valued at $1 billion dollars (or a lot more) — one legitimate question that can be asked is did the Norwegian startup sell too early?

“I think that’s a very VC-oriented perspective, because what it’s really about is, are they selling out earlier on the return for the VCs?” argues the Autodesk CEO. “I think if you look at it through the lens of what the employees and the company is trying to accomplish, they’re going to be able to accomplish more working closely inside of Autodesk than they would have, even if they continue to accept dollars and have their valuation increase. Maybe the VCs might see a smaller return, [but] I don’t think the employees are going to see a bigger net return to their vision. And if you’ve talked to these people, they’re very passionate about what they do”.

“Even though for our taste this exit comes early in the journey, we share the enthusiasm for achieving maximum impact fast, and have seen in the process how important Autodesk believes the Spacemaker product is in their future,” says Kotting.

Meanwhile, Haukeland maintains that Spacemaker has only built “5% of what can be built” and says the industry as a whole is at the beginning of a huge transformation in the way people work. “When you go from designing something and checking how it works to asking your computer for help and having the computer advising you on your shoulder, it’s really changing the game. That is such a fundamental change that it’s more than just putting a product out there. It’s really a shift that’s going to be changing the industry over the years”.

“We’re going to continue to encourage them and drive them to build out that product,” says Anagnost, “but they’re also going to have other avenues to extend their technology and other places where they can link their technology to parts of the Autodesk ecosystem”.

  


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