Monthly Archives: March 2021

News: Crypto boom continues as Chainalysis raises $100M, doubles valuation to over $2B

• March 26, 2021
• by:   
• in:  Blog 
• note:  no comments 

Chainalysis, a blockchain analysis company, announced Friday it has closed on $100 million in Series D financing, doubling its valuation to over $2 billion. The round comes just four months after the company secured a $100 million Series C round at a $1 billion valuation. Paradigm led the latest funding event while existing backers Addition

Chainalysis, a blockchain analysis company, announced Friday it has closed on $100 million in Series D financing, doubling its valuation to over $2 billion.

The round comes just four months after the company secured a $100 million Series C round at a $1 billion valuation. Paradigm led the latest funding event while existing backers Addition and Ribbit doubled down on their investment in the company. TIME Ventures, Marc Benioff’s investment fund, also participated in the latest financing, which brings Chainalysis’ total raised to $265 million.

This latest round marks Chainalysis’ fourth raise in less than two years. Previous backers in the company also include Accel and Benchmark.

Chainalysis was founded in 2014 as the official investigators into the hack of Mt. Gox, then the world’s largest cryptocurrency exchange. Today, the New York-based company provides data, software, services and research to government agencies, exchanges, financial institutions and insurance and cybersecurity companies in more than 60 countries. Among its 400 customers are fintechs such as Square, financial institutions like Barclays and cryptocurrency businesses like Gemini, Bitstamp and BitPay.

Co-founders Michael Gronager and Jonathan Levin; Image courtesy of Chainalysis

Chainalysis’ self-described mission is “to build trust in blockchains to promote more financial freedom with less risk.”

The company says its data platform powers investigation, compliance and risk management tools “that have been used to solve some of the world’s most high-profile cyber criminal cases and grow consumer access to cryptocurrency safely.”

Chainalysis operates under the belief that eventually every company will use the blockchain to conduct their business, according to co-founder and CEO Michael Gronager.

“We’ve collected more information about what happens on blockchains than anyone in the cryptocurrency industry,” he said. “That information enables our customers to make better data-driven decisions.”

Over the past year, the company says it has achieved the following:

• Increased its annual recurring revenue (ARR) by more than 100% year-over-year
• Doubled its client base to include government agencies in over 30 countries and private sector businesses in over 60 countries
• Grown its support to cover over 100 digital assets across 10 native blockchains, encompassing an estimated approximate 90% of cryptocurrency economic activity
• Doubled its number of employees over the past year to 233 today
• Expanded its partnership program, which now consists of more than 50 companies, including Fireblocks and Flashpoint
• Looking ahead, Chainanalysis said it plans to hire hundreds over the course of 2021; it also plans to use its new funds primarily to expand its enterprise data offering

“We’ll continue to invest in investigations and compliance software, but we’ll also build out new data products both for our existing customer base and new audiences,” Gronager said.

The company is particularly focused on building out its presence in the Asia-Pacific region.

“Cryptocurrency is global, and so is Chainalysis,” said Gronager.

To Chainalysis, cryptocurrencies present unprecedented transparency.

“They are the first global payment systems outside of any one organization’s control, but their blockchains create public, permanent records of all transactions, including illicit activity,” Gronager told TechCrunch.

Blockchain analysis comes in by helping people interpret those public blockchain ledgers. Chainalysis tools aim to help government agencies, cryptocurrency businesses and financial institutions understand which real-world entities transact with each other.

“For example, we can show that a given transaction took place between two different cryptocurrency exchanges, or between a cryptocurrency exchange and an illicit entity, such as a darknet market or a sanctioned organization,” Gronager said.

Paradigm co-founder Fred Ehrsam said his firm was drawn to the way Chainalysis provides key data infrastructure and software for the cryptocurrency ecosystem.

“The team knows the regulatory landscape better than anyone, has been refining their tools for years, and deeply know what their customers want. This is not an overnight success story – rather a team that has built with a long run vision, through multiple crypto cycles, that has created a market leading position for themselves, with the opportunity to compound,” he added. “As cryptocurrency adoption grows, so will demand for Chainalysis offerings.”

As further evidence of a cryptocurrency boom, BlockFi earlier this month announced it closed on a massive $350 million Series D funding at a $3 billion valuation. The financial services company for crypto market investors offers a retail and institutional-facing suite of products.

Notably, BlockFi is also a Chainalysis customer. In a written statement, CEO and co-founder Zac Prince said that Chainalysis provides BlockFi with data “that delivers insights beyond compliance that can help inform our business development activities, tailor our offerings, and identify new revenue streams.” 

News: A first look at UiPath’s IPO filing

• March 26, 2021
• by:   
• in:  Blog 
• note:  no comments 

This morning, well-known robotic process automation (RPA) unicorn UiPath has filed to go public. The company’s S-1 filing comes after it raised billions of dollars while private, making it amongst the best-funded startups in history. Over the last year, for example, the company’s rapid-fired fundraising included its Series E and Series F rounds of capital, both

This morning, well-known robotic process automation (RPA) unicorn UiPath has filed to go public.

The company’s S-1 filing comes after it raised billions of dollars while private, making it amongst the best-funded startups in history. Over the last year, for example, the company’s rapid-fired fundraising included its Series E and Series F rounds of capital, both of which came inside the last 12 months.

UiPath’s filing details a rapidly growing company. From its fiscal year ending January 31, 2020, to its fiscal year ending January 31, 2021, UiPaths’s revenues grew from $336.2 million to $607.6 million, which translates to just under 81% growth. That top-line expansion brought with it GAAP net income of –$519.9 million in its year ending in early 2020, and -$94.7 million in the year ending January 31 2021.

UiPath was valued privately at $10.2 billion in mid-2020, and $35 billion in early 2021.

For the company’s 27 known investors, the IPO filing is a critical moment. If UiPath can defend its rich private valuation, its IPO could be viewed as a success. However, investors in that final round — Alkeon Capital and Coatue, the investors that also led its Series E — will want to see its market value appreciate.

If UiPath can reach a public valuation of more than $35 billion remains to be seen.

The company’s financials paint the picture of a high-growth company that got its costs in line after a very expensive fiscal year ending January 31, 2020. UiPath cut its sales and marketing costs, its research and development spend, and even its general and administrative budget in its most recent fiscal year. The result is that its gross profit scaled against a smaller cost base. And the result of that was dramatically improved profitability, and cash generation.

As the S-1 notes: “[UiPath’s] operating cash flows were $(359.4) million and $29.2 million and our free cash flows were $(380.4) million and $26.0 million in the fiscal years ended January 31, 2020 and 2021, respectively.” That’s a massive turnaround, perhaps one that’s even more impressive than the company’s improving GAAP net margins.

There’s more to come from UiPath, namely a dive into its quarterly results, which the company says will come in a “subsequent amendment to [its] prospectus.”

All told, UiPath’s most recent fiscal year shows material operating leverage — something that not every software company going public can brag about.

News: No code, workflow, and RPA line up for their automation moment

• March 26, 2021
• by:   
• in:  Blog 
• note:  no comments 

We’ve seen a lot of trend lines moving throughout 2020 and into 2021 around automation, workflow, robotic process automation (RPA) and the movement to low-code and no-code application building. While all of these technologies can work on their own, they are deeply connected and we are starting to see some movement towards bringing them together.

We’ve seen a lot of trend lines moving throughout 2020 and into 2021 around automation, workflow, robotic process automation (RPA) and the movement to low-code and no-code application building. While all of these technologies can work on their own, they are deeply connected and we are starting to see some movement towards bringing them together.

While the definition of process automation is open to interpretation, and could include things like industrial automation, Statista estimates that the process automation market could be worth $74 billion in 2021. Those are numbers that are going to get the attention of both investors and enterprise software executives.

Just this week, Berlin-based Camunda announced a $98 million Series B to help act as a layer to orchestrate the flow of data between RPA bots, microservices and human employees. Meanwhile UIPath, the pure-play RPA startup that’s going to IPO any minute now, acquired Cloud Elements, giving it a way to move beyond RPA into API automation.

Not enough proof for you? How about ServiceNow announcing this week that it is buying Indian startup Intellibot to give it — you guessed it — RPA capabilities. That acquisition is part of a broader strategy by the company to move into full-scale workflow and automation, which it discussed just a couple of weeks ago.

Meanwhile at the end of last year, SAP bought a different Berlin process automation startup, Signavio, for $1.2 billion after announcing new automated workflow tools and an RPA tool at the beginning of December. Microsoft is in on it too, having acquired process automation startup Softmotive last May, which it then combined with its own automation tool PowerAutomate.

What we have here is a frothy mix of startups and large companies racing to provide a comprehensive spectrum of workflow automation tools to empower companies to spin up workflows quickly and move work involving both human and machine labor through an organization.

The result is hot startups getting prodigious funding, while other startups are exiting via acquisition to these larger companies looking to buy instead of build to gain a quick foothold in this market.

Cathy Tornbohm, Distinguished Research Vice President at Gartner, says part of the reason for the rapidly growing interest is that these companies have stayed on the sidelines up until now, but they see an opportunity and are using their checkbooks to play catch up.

“IBM, SAP, Pega, Appian, Microsoft, ServiceNow all bought into the RPA market because for years they didn’t focus on how data got into their systems when operating between organizations or without a human. [Instead] they focused more on what happens inside the client’s organization. The drive to be digitally more efficient necessitates optimizing data ingestion and data flows,” Tornbohm told me.

For all the bluster from the big vendors, they do not control the pure-play RPA market. In fact, Gartner found that the top three players in this space are UIPath, Automation Anywhere and Blue Prism.

But Tornbohm says that, even as the traditional enterprise vendors try to push their way into the space, these pure-play companies are not sitting still. They are expanding beyond their RPA roots into the broader automation space, which could explain why UIPath came up from its pre-IPO quiet period to make the Cloud Elements announcement this week.

Dharmesh Thakker, managing partner at Battery Ventures, agrees with Tornbohm, saying that the shift to the cloud, accelerated by COVID-19, has led to an expansion of what RPA vendors are doing.

“RPA has traditionally focused on automation-UI flow and user steps, but we believe a full automation suite requires that ability to automate processes across the stack. For larger companies, we see their interest in the category as a way to take action on data within their systems. And for standalone RPA vendors, we see this as validation of the category and an invitation to expand their offerings to other pillars of automation,” Thakker said.

The activity we have seen across the automation and workflow space over the last year could be just the beginning of what Thakker and Tornbohm are describing, as companies of all sizes fight to become the automation stack of choice in the coming years.

Early Stage is the premier ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, product market fit, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included for audience questions and discussion. Use code “TCARTICLE” at checkout to get 20 percent off tickets right here.

News: Vibrant raises $7.5M for a drug-free mechanical pill to treat constipation

• March 26, 2021
• by:   
• in:  Blog 
• note:  no comments 

Vibrant, a medical technology company that’s developed a disposable vibrating pill to treat chronic constipation, today announced its Series E for $7.5 million. The company is based in Tel Aviv and is lead by Lior Ben-Tsur, a startup veteran. Since its founding in 2007, the company has raised a total of $25 million. This round is

Vibrant, a medical technology company that’s developed a disposable vibrating pill to treat chronic constipation, today announced its Series E for $7.5 million. The company is based in Tel Aviv and is lead by Lior Ben-Tsur, a startup veteran. Since its founding in 2007, the company has raised a total of $25 million. This round is being led by Unorthodox Ventures with participation by Sequoia.

Vibrant, which is going through its third and final round of Food and Drug Administration (FDA) testing, plans to launch in the U.S. in the next year. The capsules are about the size of a multi-vitamin, Ben-Tsur said.

“Patients are used to taking drugs day in and day out, so this wouldn’t be a different experience in that regard, but this pill doesn’t have any medication,” Ben-Tsur said. While Ben-Tsur is not a founder, he was brought on about 10 years ago to serve as the company’s CEO.

According to a study published in the American Gastroenterological Association, about 16% of American adults suffer from constipation, and the number jumps to 33.5% in adults between the ages of 60-101. Also, constipation is 1.5 times more common in women than in men.

The most common way to treat constipation is through the use of over-the-counter or prescription drugs, most of which target the nerves in the colon which in turn prompt a bowel movement. The Vibrant Capsule, however, “once swallowed, kickstarts the natural impulses of your intestinal wall to contract, relax and get things moving again — without the use of chemicals,” the company said in a statement.

In addition to being medication-free, the value of Vibrant over laxatives, according to the company, is that the bowel movements are more controlled, whereas laxatives can cause unexpected diarrhea and long-term side effects. Also, while laxatives are meant to be taken on a daily basis, the disposable capsule can be used anywhere from 2-5 times per week. The capsules connect to an app that automatically records when you take a pill, and upon having a bowel movement, the person notes it in the app which then sends a monthly report to the patient’s doctor, allowing them to monitor and adjust the treatment protocol as necessary.

In a 2019 human trial organized by Vibrant, 250 patients were enrolled in a double-blind study (Vibrant Capsule = 133, placebo = 117). The results showed that those who took the Vibrant Capsule were more likely to experience a bowel movement within three hours. The trial details and the results were published in the journal of Neurogastroenterology and Motility.

Several years ago a group of doctors and engineers performed a test in a live pig’s colon, and accidentally pinched the side of the colon wall. As a result, they noticed that the pig promptly had a bowel movement. The test was actually about something totally unrelated to constipation, and the results were a random discovery. To replicate the effects, the team created a vibrating belt that when worn for about three hours, would also cause a bowel movement.

“The problem is no one wants to shake for three hours to have a bowel movement,” said Ben-Tsur. With this information in hand, the group set out to develop a treatment for constipation in humans that would produce similar results but where the vibrations couldn’t be felt. There were other mechanical capsules already on the market such as the Smart Pill, a mechanical diagnostic capsule that reports on generalized motility through the entire digestive tract and aids doctors in diagnosing motility disorders, so the team knew that people could safely swallow and excrete capsules.

According to Ben-Tsur, there hasn’t been any development in the treatment of constipation in the last 20 years — the treatment protocol has continued to focus on medication. When he learned about the market size, the lack of innovation in the space, and the potential, he was convinced that he wanted to lead Vibrant.

Vibrant plans on using this round of funding to take the capsule to market in the U.S. — its first market. The company is currently speaking with healthcare providers and insurance companies so that the capsule will be covered by insurance starting at the time of launch. The Smart Pill, while only used once as a diagnostic test, is still not covered and costs, on average, about $1,400 out of pocket. Ben-Tsur and his team aim to offer a product that is accessible. “From day one we were on a mission to build something that wouldn’t be more expensive than existing drugs,” he said.

News: Google backs one-year-old Indian startup DotPe in $27.5 million fundraise

• March 26, 2021
• by:   
• in:  Blog 
• note:  no comments 

Google’s latest investment in India is a startup that is helping businesses come online. One-year-old DotPe, a Gurgaon-based startup, said on Friday it has raised $27.5 million in its Series A financing round. The round was led by PayU, with participation from existing investor Info Edge Ventures and Google. The young startup, now valued at

Google’s latest investment in India is a startup that is helping businesses come online.

One-year-old DotPe, a Gurgaon-based startup, said on Friday it has raised $27.5 million in its Series A financing round. The round was led by PayU, with participation from existing investor Info Edge Ventures and Google.

The young startup, now valued at about $90 million, helps brick and mortar stores sell to customers online and collect payments digitally.

It’s a problem that scores of startups in India are solving today, but DotPe has some additional hooks. It helps merchants scan their inventories and quickly establish a log online.

Once the catalog is ready, a business can then make it available on WhatsApp and reach customers there. WhatsApp is the most popular smartphone app in India with over 450 million users. DotPe says it also helps businesses get visibility on Google Search.

The startup, co-founded by Shailaz Nag, formerly co-founder and managing director of PayU, also enables neighborhood stores to collect payments from walk-in customers and features tools to offer loyalty points and discounts to customers to boost engagement.

“This new partnership will empower businesses to be more discoverable, expand business avenues and conduct commerce like never before,” said Nag. “Pandemic or not, we are here to reimagine the way offline businesses work and bring the digital revolution to the doorstep of every entrepreneur.”

DotPe says its platform, which doesn’t require businesses to install an app, has amassed over 5 million merchants in the last six months. These merchants are seeing over 38% of daily orders from repeat customers, the startup said.

“In a very short time, DotPe has acquired a promising merchant base with its impeccable product experience and innovation,” said Anirban Mukherjee, CEO, PayU India.

Sanjay Gupta, VP and Country Head of Google India, said in a statement that the company’s investment in DotPe is illustrative of Google’s belief in “working with India’s start-up ecosystem towards the goal of building a more inclusive digital economy that will benefit everyone.”

Google announced a $10 billion fund for India last year, its biggest market by users. The Android-maker has invested in several startups in the country including hyperlocal delivery firm Dunzo, InMobi Group’s Glance, and DailyHunt.

DotPe said it will deploy the fresh capital to reach more merchants in India and scale its technology stack to meet the growing demand.

News: “Link-in-bio” company Linktree raises $45M Series B for its social commerce features

• March 26, 2021
• by:   
• in:  Blog 
• note:  no comments 

If you browse Instagram, you are probably familiar with the term “link in bio.” Links aren’t allowed in post captions, and users are only allowed one URL in their bios, so many create a simple website with multiple links for their followers. Linktree, one of the most popular “link in bio” services with more than

If you browse Instagram, you are probably familiar with the term “link in bio.” Links aren’t allowed in post captions, and users are only allowed one URL in their bios, so many create a simple website with multiple links for their followers. Linktree, one of the most popular “link in bio” services with more than 12 million users, announced today it has raised $45 million in Series B funding. The round was co-led by Index Ventures and Coatue, with participation from returning investors AirTree Ventures and Insight Partners.

Coatue chairman Dan Rose will join Linktree’s board of directors. The Sydney, Australia-based startup’s last round was a $10.7 million Series A announced in October 2020. Linktree’s latest funding will be used on tools that make social commerce easier.

Linktree says about a third, or 4 million, of its users signed up within the last three months. This is in partly because people have been spending more time on social media and e-commerce shopping during the pandemic.

Founded in 2016, Linktree now competes with a roster of “link in bio” services, including Shorby, Linkin.bio and the recently launched Beacons.

“When we launched Linktree, we created an entirely new category. We were first to market and, with over 12 million users globally, still hold 88% of market share,” founder and chief executive officer Alex Zaccaria told TechCrunch. “Inevitably we’ve seen plenty of competitors pop up as a result, but part of the uniqueness of Linktree is its deceptively simple design.”

Zaccaria added that one of Linktree’s differentiators is its adoption by users in a wide range of categories, including health and wellness, real estate, sports, music, politics, publishing and food. It’s used for bio links by Shopify, Facebook, TikTok, YSL, HBO and Major League Baseball, and celebrities like Jonathan Van Ness, Jamie Oliver and Pharrell.

“We might have started as a link-in-bio tool, but over time Linktree has evolved and the platform has become a social identity layer of the internet. Our vision for how the platform will sit at the intersection of digital self-expression and action means we’re thinking boldly when it comes to our roadmap.”

News: YC-backed Homebase is an alternative to traditional mortgages for home buyers in Vietnam

• March 26, 2021
• by:   
• in:  Blog 
• note:  no comments 

The home ownership rate in Vietnam is about 90%, but many millennials are struggling to join that number. Rising property prices in cities, coupled with a lack of financing options, mean more people have to delay buying their first homes unless they have family support. Part of Y Combinator’s latest batch, Homebase was founded in 2019

Homebase co-founders Phillip An and Junyuan Tan

The home ownership rate in Vietnam is about 90%, but many millennials are struggling to join that number. Rising property prices in cities, coupled with a lack of financing options, mean more people have to delay buying their first homes unless they have family support.

Part of Y Combinator’s latest batch, Homebase was founded in 2019 to give prospective buyers in Vietnam an alternative to traditional financing. Homebase acts as a co-investor, buying a share of property with customers, who then have the option of purchasing equity from Homebase until they take full ownership, or selling the property for their portion of the proceeds. In the meantime, buyers pay rent to Homebase that corresponds to the company’s stake, and have full usage rights to the home, so they can live in or rent it.

Co-founders Junyuan Tan and Phillip An originally started Homebase in Singapore, but decided to focus on Vietnam because Tan had lived there while working on his previous startups, RePrice Technologies and Atlantis Lab. Tan wanted to buy a home, but found bank mortgages charged high interest rates even on short-term loans.

“If you look at the whole of Southeast Asia, compared to Europe or the U.S., there are really no other solutions, like government schemes or rent-to-own financing solutions,” Homebase chief operating officer Phillip An told TechCrunch.

Its model is similar to Divvy Homes and ZeroDown in the United States and, in fact, leaders from both startups have invested in Homebase (Divvy Homes co-founder Brian Ma and ZeroDown’s former COO Troy Steckenrider). Homebase’s other backers include VinaCapital Ventures, Class 5 Global, Pegasus Technology Ventures, 1982 Ventures, Antler and Darius Cheung, the founder and CEO of 99.co.

Most of Homebase’s transactions are currently in Ho Chi Minh City and Saigon, and it plans to expand into Hanoi and Danang by the end of this year. Ultimately, Homebase’s goal is to enter other Southeast Asian markets where home owners also face a dearth of financing options, like Singapore, Thailand and Indonesia.

In Vietnam, about 70% of adults are “unbanked,” meaning they don’t have a bank account, which makes it difficult to apply for mortgages. An said some of Homebase’s customers use the service because they are unbanked. Other customers have financial accounts, but see Homebase as a faster, more flexible option to bank loans.

Its contracts range from one to 10 years, and at the end, customers have the option of buying all the equity in the property or selling it with Homebase to get back their investment. The amount of equity customers buy at the start also varies. For example, home buyers who are using Homebase as an alternative to mortgages typically take an initial 20% to 30% stake in the property, while real estate investors often start with a 50% stake.

Homebase finances its stake in properties in part by working with third-party financial institutions, including private high-net worth individuals and family offices who see it as an opportunity to diversify their holdings into a new asset class. An said the company is also talking to different types of funds, including equity, hedge, real estate debt and emerging market debt, from Europe, the United States and Singapore.

To screen applicants, Homebase has an internal checklist and onboarding process, and it also works with real estate agents, developers and other partners in Vietnam.

For those third parties, Homebase serves as a value-add tool that helps them close more deals by providing a way for customers to get financing. Homebase also performs due diligence on potential properties, including examining documentation and permits, and has built an asset valuation model based on existing property data, transaction data and information from developers.

An said this valuation service, which Homebase is expanding, is a key part of the business because it provides assurance to buyers that the company’s incentives are aligned with theirs.

“We stand to risk our investment, too,” he said. “Many customers are also first-time buyers and they want more help to find a good property.”

News: Amid pandemic, Middle East adtech startups play essential role in business growth

• March 26, 2021
• by:   
• in:  Blog 
• note:  no comments 

There is tremendous potential in the Middle East for adtech startups and digital marketing agencies. Although consumers there used to prefer traditional advertising, the internet took over in 2020.

The pandemic’s impact on the business world encouraged adtech startups and digital marketing agencies to collaborate more, helping brands survive the pandemic by bringing businesses closer to consumers.

Although overall spending on advertising slowed in 2020, it is expected to recover in 2021 and reach $630 billion in 2024. According to Statista, North America spends the most on advertising, with second place going to Asia and Western Europe. The rest of Europe, Africa and the Middle East lag behind.

However, the Middle East embodies great potential. According to Statista, it boasts the highest growth, with a 600% increase in digital advertising in the MENA region between 2010 and 2015. Although consumers in the region used to prefer traditional advertising channels, the internet took over in 2020, with 44.2% of the total ad expenditures, while TV dropped to 30%.

Here are several essential characteristics of digital advertising in the Middle East region:

1. According to a PwC report, 39% of shoppers in the Middle East use social media to find inspiration for purchases, compared to the global average of 29%.
2. Due to the existence of a shadow economy, political regulations and unofficial business, the amount of digital ad spending in the MENA region ranged from $1 billion to $1.2 billion in 2020.
3. Paid social is the leading category in digital advertising expenditures in the MENA region. Saudi Arabia and Egypt are the largest in terms of active YouTube users.
4. There are more than 500 digital agencies listed in the region. UAE is leading in terms of big advertising agencies, while Egypt and Saudi Arabia are famous for small- and medium-size agencies. Most digital marketing talent and creative resources reside in Egypt, Lebanon and Jordan, while most adtech startups are born in Israel, UAE and Qatar, according to digital marketing consultant Yasser Ahmad.
5. E-commerce is driving growth, hitting $17 billion in the Middle East in 2020, according to Statista, with many online shoppers increasing the frequency of purchases during the pandemic.

News: BBG Ventures just closed on $50 million to fund more women-led startups

• March 26, 2021
• by:   
• in:  Blog 
• note:  no comments 

BBG Ventures, a now eight-year-old, New York-based seed- and early-stage venture firm that only backs founding teams which feature at least one woman, just locked down $50 million in capital for its third fund, a major leap over its first two funds, both sized at $10 million. One determining factor in the bigger fund is

BBG Ventures, a now eight-year-old, New York-based seed- and early-stage venture firm that only backs founding teams which feature at least one woman, just locked down $50 million in capital for its third fund, a major leap over its first two funds, both sized at $10 million.

One determining factor in the bigger fund is that BBGV, formerly backed exclusively by AOL (now Verizon Media), now has a broader pool of institutional and individual investors, including the State of Michigan Retirement Systems, the George Kaiser Family Foundation and Verizon Ventures, along with Poshmark cofounder Tracy Sun, ClassPass cofounder Payal Kadakia, and venture capitalists Aileen Lee, Theresia Gouw, and Jennifer Fonstad.

The young firm also has a track record to which to point. Though an investment in the coworking space The Wing may have taken an unexpected turn, hurt by a national lockdown and internal turmoil, other bets have been growing, including the e-commerce platform Zola; the feminine hygiene brand Lola; and Spring Health, a mental health benefits platform for employers that recently closed on $76 million in Series B funding led by Tiger Global Management.

That’s saying nothing of the vast and underserved opportunity to invest in women-led teams that BBGV’s founders, Susan Lyne and Nisha Dua, believe most venture firms still don’t fully appreciate.

We talked earlier today about why that is with Lyne, who is a former ABC president, former Martha Stewart Living CEO and former CEO of AOL Brand Group; and Dua, who is a former lawyer, management consultant, chief of staff to Lyne, and founder. Our conversation has been edited for length.

TC You’ve raised $50 million. What size checks will you be writing? Are you looking to take bigger positions or do you have a more diverse approach?

ND: We’re looking at writing $500,000 to $1 million checks. We look for 7.5% to 10% ownership, and we’re open to co-leading, but we prefer to lead. We’ve been leading rounds already with this with this fund. We’ll likely do about 30 companies from the fund, backing a mix of pre-seed and seed-stage startups, with reserves for follow-on funding.

SL: We’ve actually done 11 investments; we started investing after the first close.

TC: You’ve invested in nearly 80 startups over the years. What has been your biggest investment to date?

ND: Planet Forward, which was founded by Zume cofounder Julia Collins.

TC: Have you — or would you — ever form a special purpose vehicle to invest more in a startup than your fund enables?

SL: We didn’t do it for our last funds, but we did our first SPV for this fund, in a company called Starface, which is skincare company that takes a very different approach to the acne problem. You’ve probably seen the gold stars [that its customers apply to their pimples] on social media. They’ve been growing very fast and did a Series A recently and we took part of it ourselves but we also opened an SPV for one of our LPs.

TC: What themes interest you right now?

SL: We’ve done a lot of investing thus far in health and well being. That’s our largest category. The second is the future of work and education; the third is climate-friendly commerce; and the fourth is really underestimated, or emerging consumers. In all of those areas, we have actually found there are many, many, many female founders who are active and building great companies

ND: Also, we [have historically] described ourselves as a consumer fund, but we are doing more B2B in this fund, where we think that the B2B approach could solve a bigger consumer problem, including for many millions of consumers.

TC: What’s an example of what you mean?

SL: Grayce, which is doing eldercare and actually selling to employers as an employee benefit. If you look at the cost to companies because of the number of hours and days that many people invest in taking care of an aging parent or trying to figure out what the next step is for them [you appreciate the need for this kind of service]. This platform not only allows you to connect with someone who can help you plan but also points you to the resources you need, including financial resources, legal resources, and living resources.

ND: Another is Full Harvest, a marketplace and logistics platform that takes all the excess food on a farm that doesn’t meet cosmetic standards and resells it to juice and salad makers and other food brands and manufacturers.

TC: You mentioned Julia Collins. Do you know how many first-time founders you’ve backed versus repeat entrepreneurs?

ND: There’s a mix. We don’t have a preference.

TC: Do you have a geographic focus?

SL: I would say, New York City is definitely our primary source for for companies for a lot of reasons, including that there’s a very rich and active female founder community here. This is the headquarters for many different kinds of industries, so you get a range of talent here. But we’ve also invested in San Francisco companies, companies in Los Angeles, in Milwaukee, in San Diego. [We see] opportunity in at least a dozen cities across the country.

TC Have have your syndicate partners changed over time, if at all?

ND: That’s been one of the most exciting things of the past few years. We love to partner with women GPs — folks like Kara Norton of Upfront Ventures and Jess Lee of Sequoia. There is a great spiderweb of women GPs emerging at these top venture funds who can create these strong relationships and are ultimately leads for follow-on rounds.

TC: Do think women-led teams are receiving the valuations they would if they were all-male teams? I was horrified to read earlier today that the wage gap between men and women has improved by 8 cents over the last 25 years. 

SL: I can’t speak authoritatively about whether women are getting lower valuations across the board. We certainly know that they are getting a vastly lower percentage of the venture capital investment. If you look at the stats about the amount of funding for women in 2020 versus men, it’s definitely disturbing and shows the vast majority of venture capital is still going to all all male teams. I think some of that is due to the megarounds that we’ve seen, but not enough of it to make a significant difference.

ND: I think it was Harvard Business Review that did some really interesting research at a [2017] TechCrunch Disrupt event that overwhelmingly suggested that men are judged on their potential and women are often judged on their current expertise, and we [might] surmise that [these factors] could have something to do with valuations.

It’s why we’re leading rounds. We see the opportunities that these female-led teams are going after — and we have the opportunity to assess them on their exact merits.

News: Daily Crunch: Zuckerberg defends Facebook over role in Capitol attack

• March 25, 2021
• by:   
• in:  Blog 
• note:  no comments 

Tech executives face Congress, Spotify gets a redesign and Snapchat is developing a new Remix feature. This is your Daily Crunch for March 25, 2021. The big story: Zuckerberg defends Facebook over role in Capitol attack Facebook’s Mark Zuckerberg, Twitter’s Jack Dorsey and Google’s Sundar Pichai appeared at a hearing today with the House Energy

Tech executives face Congress, Spotify gets a redesign and Snapchat is developing a new Remix feature. This is your Daily Crunch for March 25, 2021.

The big story: Zuckerberg defends Facebook over role in Capitol attack

Facebook’s Mark Zuckerberg, Twitter’s Jack Dorsey and Google’s Sundar Pichai appeared at a hearing today with the House Energy and Commerce Committee on the theme of misinformation, particularly the role that their platforms may have played in the Capitol attack by allowing lies and extremism to spread.

In his opening statement, Zuckerberg advocated for reforms to Section 230 and said that Facebook “did our part” to protect last year’s presidential election, putting the blame for the Capitol riots squarely on former President Donald Trump.

Pressed by Rep. Mike Doyle (D-PA) on whether Facebook bears some responsibility, Zuckerberg replied, “I think the responsibility lies with the people who took the actions to break the law and do the insurrection. Secondarily, also with the people who spread that content, including the president but others as well, with repeated rhetoric over time, saying that the election was rigged and encouraging people to organize, I think that those people bear the primary responsibility as well.”

The tech giants

Spotify rolls out redesigned desktop and web apps — Overall, the update gives the Spotify app a more streamlined, less cluttered look and feel.

Snapchat is developing its own take on TikTok Duets with a new ‘Remix’ feature — This feature will allow users to create new content using their friends’ Snaps.

Startups, funding and venture capital

PPRO extends latest round to $270M, adding JPMorgan and Eldridge to grow its localized payments platform — PPRO’s core product is a set of APIs that e-commerce companies can integrate into their check-outs to accept payments in whatever local methods and currencies consumers prefer.

Notarize raises $130M, tripling valuation on the back of 600% YoY revenue growth — When the world shifted toward virtual a year ago, one service in particular saw heated demand: remote online notarization.

Everlywell acquires two healthcare companies and forms parent Everly Health — The new parent entity will now offer services including at-home lab testing kits and education, population-scale testing through a U.S.-wide clinician network, telehealth and a payer-supported/enterprise self-collected lab test.

Advice and analysis from Extra Crunch

Automakers, suppliers and startups see growing market for in-vehicle AR/VR applications — A new battle for market share is emerging inside vehicles.

How VC and private equity funds can launch portfolio-acceleration platforms — Almost every private equity and venture capital investor now advertises that they have a platform to support their portfolio companies.

Will fading YOLO sentiment impact Robinhood, Coinbase and other trading platforms? — What happens to hot fintech startups that have benefited from a rise in consumer trading activity if regular folks lose interest in financial wagers?

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

FatFace tells customers to keep its data breach ‘strictly private’ — Clothing giant FatFace had a data breach, but it doesn’t want you to tell anyone about it.

EV makers oppose delay to automotive emissions penalty increase — Electric vehicle manufacturers are pushing back against a decision to delay penalty increases for automakers who fail to meet fuel efficiency standards.

New York moves to legalize recreational marijuana — New York State officials struck a deal with Gov. Andrew Cuomo to allow recreational use of cannabis.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.