Monthly Archives: March 2021

News: Coursera prices IPO at top end of its range in boon to edtech valuations

  • March 31, 2021
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Coursera, an edtech unicorn, will begin its life today as a public company after pricing its IPO at $33 per share yesterday evening. Using a simple share count, the company’s valuation comes to $4.30 billion, or $4.38 billion if its underwriters exercise their option to purchase shares at its offering price. A more diluted share

Coursera, an edtech unicorn, will begin its life today as a public company after pricing its IPO at $33 per share yesterday evening. Using a simple share count, the company’s valuation comes to $4.30 billion, or $4.38 billion if its underwriters exercise their option to purchase shares at its offering price.

A more diluted share count pushes the valuation of Coursera over the $5 billion mark.

Coursera was last valued at $2.57 billion after raising $130 million in mid-2020, per PitchBook data. The company’s simple valuation is around a 67% gain on that final private figure; that gain rises to just over 70% if its underwriters purchase their available shares.

Using a diluted valuation, Coursera has roughly doubled its final private price. In under a year. For edtech investors looking to Coursera to help determine public market sentiment regarding the exit-value of their investments, TechCrunch reckons it’s a pretty good day.

The amount of private capital at play in edtech startups is staggering; billions and billions of potential returns could get a further shot in the arm if Coursera trades well this morning. And the very same billions of invested capital could lose the smile that Coursera’s seemingly-strong IPO pricing brought them.

There are other edtech debuts in the wings. TechCrunch has covered Nerdy’s plans to go public, via a SPAC, for example.

Private investors, who put well north of $10 billion into edtech companies globally in 2020, are modestly bullish on edtech exit volume this year. In a prior TechCrunch venture capitalist survey, GSV managing partner Deborah Quazzo said the following:

Exit volume is rising already with a wide range of strategic and financial buyers of edtech companies — something that didn’t exist before. You will see numerous high-value exits in the first half of 2021. It’s the public market “exits” that have really lagged and that I hope turns around in 2021 and 2022. There are numerous global companies that could go public and the addition of SPAC IPOs creates another positive dynamic.

The Coursera IPO pricing at least, meets the mark for a high-value exit. Which could lead where? Extending Quazzo’s thinking a single step, perhaps a strong Coursera first-day trading session will bolster SPAC interest in taking more edtech startups and unicorns public.

Such a move could lock-in valuations for a number of currently illiquid edtech startups, and perhaps begin to return chunks of invested capital in the historically out-of-fashion technology sector.

Adding to that sentiment is Owl Ventures’ managing director Ian Chiu, who told TechCrunch in the same survey that “the pipeline for potential IPO candidates coming from the edtech sector continues to grow larger.” Let’s hope — parsing the Coursera S-1 filing was good fun and we’d like another at-bat with an edtech IPO document.

More when Coursera trades.

News: Spotify adds three new types of personalized playlists with launch of ‘Spotify Mixes’

  • March 31, 2021
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Spotify this morning announced it’s significantly expanding its selection of personalized playlists with the addition of three new categories of playlists under the heading of “Spotify Mixes.” This collection will include artist mixes, genre mixes, and decade mixes — meaning you’ll gain access to a sizable number of new mixes with easy-to-understand titles, like 2010s

Spotify this morning announced it’s significantly expanding its selection of personalized playlists with the addition of three new categories of playlists under the heading of “Spotify Mixes.” This collection will include artist mixes, genre mixes, and decade mixes — meaning you’ll gain access to a sizable number of new mixes with easy-to-understand titles, like 2010s Mix, R&B Mix, Pop Mix, Drake Mix, Selena Gomez Mix, and so on — or whatever reflects your own tastes and interests.

The company says the idea for the Spotify Mixes was inspired by its Daily Mixes, launched in fall 2016.

The Daily Mixes had been one of the company’s first big expansions in personalization beyond its flagship playlist, Discover Weekly, as they introduced a large set of playlists that reflected users’ listening history. Today, Daily Mixes bring together your recent listens with other tracks to keep you engaged — and the new Spotify Mixes essentially do the same, as they’re populated with music you like plus “fresh tracks.” The difference is that the new mixes have clearer names and a more specific focus, in some cases.

The Spotify Mixes will be available to all users globally, including both Free users and Premium subscribers. At launch, you can find them within Search in the “Made for You” hub.

You’ll easily spot them, too, as Spotify has already populated its app with a selection of mixes in the top three rows of the “Made for You” hub. Here, you’ll find “Your Genre Mixes,” “Your Artist Mixes,” and “Your Decade Mixes” —  each with a horizontally scrollable selection of mixes to get you started. Spotify says each mix category will be updated frequently and will always have several playlists available.

The new feature somewhat competes with a similar offering on Pandora, launched three years ago. The SiriusXM-owned music app had used its Music Genome technology to create personalized playlists across a number of attributes, including also genre and mood. While not an apples-to-apples comparison, necessarily, Pandora’s launch had instantly expanded its users’ access to personalized playlists by the dozens. It’s actually a bit surprising that it took Spotify as long as it did to offer a competitive response.

The launch comes shortly after the addition of new celebrity-inspired playlists to Spotify’s “Workout Hub” earlier this week.

Spotify says the new playlists are rolling out today to global users.

 

News: Oklahoma-based Cortado Ventures raises $20M

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The team behind Cortado Ventures thinks there’s plenty of untapped investment opportunity in the Midwest. To change that, it’s raised $20 million in what appears to be Okalhoma’s largest venture fund to date. The firm is led by partners Nathaniel Harding, David Woods and Mike Moradi. In a Medium post, Harding (an angel investor and

The team behind Cortado Ventures thinks there’s plenty of untapped investment opportunity in the Midwest. To change that, it’s raised $20 million in what appears to be Okalhoma’s largest venture fund to date.

The firm is led by partners Nathaniel Harding, David Woods and Mike Moradi. In a Medium post, Harding (an angel investor and former oil and gas entrepreneur) recalled how he an Moradi had been discussing the need for an Oklahoma-based venture capital fund back in 2017.

They’d planned to launch the firm — which makes seed and Series A investments — just about a year ago, and the pandemic only gave them a greater sense of urgency.

“With the pandemic threatening Oklahoma’s economy, more attention than ever was placed on the need to diversify our economy and create future-ready tech jobs,” Harding said. “There was also a sense that innovation and startups would multiply, and that technology disruption and adoption would accelerate. In fact, we contend that there has never been a better time to start a new company. Our investors sensed this too.”

Although the firm’s first fund only recent hit its cap of $20 million, it has already invested in nine startups including text marketing company RespondFlow in Tulsa, Dallas-based Socialwyze (which helps underemployed people find flexible work) and hybrid materials startup Mito Material Solutions in Stillwater.

Cortado was created with the thesis that the region was “underfunded,” but Harding told me it doesn’t have any geographic restrictions on investments.

“We look at companies from anywhere,” he said. “We care more about what the companies does and less about where they’re located.”

Harding suggested that Oklahoma is particularly rich in entrepreneurs with a background in traditional industries like energy, aerospace, agriculture and manufacturing. And being based in Oklahoma City hasn’t stopped Cortado from backing founders from diverse backgrounds — he said the majority of the portfolio is led by women, people of color and first-generation immigrants.

Asked whether the regional ecosystem will also need more later-stage firms to fund the growth of  successful startups, Harding said, “Funding at the early stage is often very local, but funding at later stages, once you get to nine figure valuations — you’re a known commodity. Once you’re getting to a Series C and D […] you have a global market for investments.”

News: Tips for founders thinking about doing a remote accelerator

  • March 31, 2021
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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines. For this week’s deep dive, the Equity team got ahold of three founders from the recent Y Combinator batch (more here, and here) to chat through their experiences with a remote accelerator. TechCrunch was curious if the

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

For this week’s deep dive, the Equity team got ahold of three founders from the recent Y Combinator batch (more here, and here) to chat through their experiences with a remote accelerator. TechCrunch was curious if the program lived up to founder expectations, how extreme timezone differentials were handled, and how easy it was to build camaraderie during a digital program. Oh, and how their demo day went.

Here’s who is on the show:

The short version is that the founders were generally happy with Y Combinator being remote, and that the setup allowing them to stay in their normal location was plus. We also asked the founders for learnings regarding how to best handle remote accelerators in the future.

More from Equity on Friday, at which point we’ll put Y Combinator aside for a good while.

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday morning at 7:00 a.m. PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

News: Facebook denies its algorithms are a problem, but launches a tool to more easily view a non-algorithmic News Feed

  • March 31, 2021
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Following years of backlash over its algorithms and their ability to push people to more extreme content, which Facebook continues to deny, the company today announced it would give its users new tools to more easily switch over to non-algorithmic views of their News Feed. This includes the recently launched “Favorites,” which shows you posts

Following years of backlash over its algorithms and their ability to push people to more extreme content, which Facebook continues to deny, the company today announced it would give its users new tools to more easily switch over to non-algorithmic views of their News Feed. This includes the recently launched “Favorites,” which shows you posts from up to 30 of your favorite friends and Pages, as well as the “Most Recent” view, which shows posts in chronological order. It also introduced new controls for adjusting who can comment on your posts, and other changes.

The features themselves aren’t entirely new, in some cases, but they’ve been made easier to get to with the addition of a Feed Filter Bar on mobile for changing the view of the News Feed, and an option menu on your posts to control who can comment.

The “Most Recent” view of the News Feed has long existed but has been buried in the extended “more” menu (the three-bar hamburger icon) on the Facebook mobile app. It’s not as useful as it sounds because it shows you all the posts from both friends and Pages in a single chronological view. If you’ve been on Facebook for many years, then you’ve probably “Liked” a number of Facebook Pages for brands, businesses and public figures. These Pages tend to post with more frequency than your friends, so the feed has become largely a long scroll through Page updates.

However, if you still prefer the “Most Recent” view, the Feed Filter Bar will give you a tool to easier switch back and forth between this and other views. The feature will launch on Android first, then roll out to iOS.

Meanwhile, Facebook has offered a way to prioritize who you see in your News Feed through a “See First” setting, but the newer “Favorites” feature rebrands this effort and gives you a single destination under Settings to select and deselect your Favorites, including favorite Pages.

The updated commenting controls are a new take on a habit many Facebook users have already adopted — when they share a post only to a given audience, like family or friends, while excluding other groups like work colleagues or even specific people. Now, users will have the option to instead share their posts but control who can engage in conversations. Public figures, for example, may choose to adopt the feature to restrict their audience to only those brands and profiles they’ve tagged.

Facebook says it will also show more context around suggestions it displays in the News Feed with its “Why am I seeing this?” feature that will explain how its algorithmic suggestions work. It says several factors may be at work here, in terms of what’s shown and why — including your location, whether you or people like you have engaged with related topics, groups or Pages, and more.

The changes arrive at a time when Facebook, along with other tech giants, has come under fire for its role in spreading misinformation leading to deadly events, like the storming of the U.S. Capitol, and serious public health crises, like vaccine hesitancy during a pandemic. Facebook CEO Mark Zuckerberg last week testified before the House’s Subcommittee on Communications and Technology about its failures to remove dangerous misinformation and its allowing of extremists to become more radicalized and to organize online.

Facebook’s official position, however, is that it doesn’t play a role in directing people towards problematic content — they seek it out. And people’s News Feeds are only a reflection of their own choices, in that way.

These thoughts and more were detailed today by Nick Clegg, VP of Global Affairs for Facebook, where he insists personalization algorithms are common across tech companies — Amazon and Netflix use them, too, for instance. And ranking simply makes what’s most relevant to the user appear first — effectively blaming users for the problems here. He also throws back the decisions to be made around Facebook’s role in misinformation peddling to the lawmakers, adding: “It would clearly be better if these [content] decisions were made according to frameworks agreed by democratically accountable lawmakers.”

News: Ensemble raises $3M to help divorced parents avoid arguing about money

  • March 31, 2021
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At the age of 14, Jacklyn Rome saw firsthand how divorce can impact families, and how arguing about finances both during and after the process can impact children. The experience stuck with her. As an adult, after leading new product launches at Uber and Blue Apron,  Rome came up with the concept behind her startup,

At the age of 14, Jacklyn Rome saw firsthand how divorce can impact families, and how arguing about finances both during and after the process can impact children.

The experience stuck with her. As an adult, after leading new product launches at Uber and Blue Apron,  Rome came up with the concept behind her startup, Ensemble. The expense tracking app quietly launched in the App Store in 2020 with the mission of reducing tension among co-parents and making sure kids’ needs aren’t negatively impacted by a divorce.

Today, Ensemble is coming out of stealth with $3 million in seed funding from TTV Capital, Lerer Hippeau and Citi Ventures.

Put simply, Ensemble’s mission is to improve the lives of co-parents and their children by giving parents a streamlined way to track shared expenses.

“Most co-parents either figure out finances on their own ad hoc or rely on child support payments — however, child support only covers food, shelter and clothing, which is only half of the cost of raising a child,” Rome points out. The other half of expenses, including medical bills, extracurricular activities, transportation, etc., often end up being discussed by co-parents via text messages and spreadsheets.

Ensemble founder and CEO Jacklyn Rome. Image courtesy of Ensemble

Ensemble kicked off a six-month pilot in January 2020, when the credit-first version of the app went live. In April 2020, the dual functionality version — where two parents could connect their accounts — went live.

Since its App store launch last spring, Ensemble has seen “strong organic growth and referrals” from its users, according to Rome. Ensemble’s users, on average, are tracking over $1,000 per month in shared expenses for their children.

Roughly 30% of Ensemble’s downloads were organic in people discovering the app in the App Store, she said.

“Even in the most amicable divorces, money is the number one thing that divorced parents end up arguing about. In more contentious divorces, it often gets used as a power lever among two emotionally charged individuals with no other tools at their disposal,” Rome said. “We set out to build a product that eases tense communication about shared finances and serves the nuanced needs of separated parents.”

For now, the app is free. Ensemble plans to begin monetizing with the use of funds from its seed round.

Eventually, the company is planning to build out a paid subscription model. Over the long term, it’s also planning to expand beyond being an expense tracking app to offering a suite of financial products and primarily banking products, for things like shared credit cards with tight spending controls, Rome told TechCrunch.

“Ultimately, we want to help make sure that the children of divorced parents are not at a financial disadvantage when it comes to building for their financial future,” she said.

Rome founded Ensemble while she was an Entrepreneur in Residence (EIR) at Co-Created, a venture studio based in New York, with support and funding from Citi Ventures’ D10X program.

“A key insight that Citi had given us was that for them as a bank, it’s incredibly hard to acquire new customers because people don’t often change banks,” Rome said. “One of the few times in life that people regularly change banks is when they get divorced. And that sparked the thought process around the pain points that people feel through their divorce, specifically as it relates to finances.”

Luis Valdich, managing director of venture investing at Citi Ventures, says the bank has been “tracking for some time” how the financial needs of individuals have been evolving given societal trends, while at the same time identifying potential investment opportunities in startups that address underserved needs.

“One growing gap is for divorced or separate parents to track and manage shared expenses,” Valdich said. “Ensemble solves this problem by striking the optimal balance of delivering ease of use, visibility and empathy for modern co-parents, minimizing the need for back-and-forth communications. While it is early, we found its user experience to be substantially superior to the alternatives in the market, and Jacklyn brings a unique perspective on the challenge Ensemble is trying to solve.”

And while he could not speak to specific plans between Citi and Ensemble, Valdich said that Citi Ventures’ approach has always been to invest in companies with an eye toward future collaborations.

“We are proud that the majority of our portfolio has been commercialized within Citi and/or with Citi clients and we will certainly explore opportunities for collaboration when mutually convenient for both parties, as we always do,” Valdich added.

Meanwhile, TTV Capital Partner Mark Johnson said his firm has been investing in fintech for over 20 years and that it’s clear “people are craving digital tools to simplify communication and finances.”

He called Ensemble’s app “a sleek and simple platform” that addresses those needs for co-parents.

News: Diversity-focused Harlem Capital raises $134M

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Harlem Capital is announcing that it has raised $134 million for its second fund — well above its target of $100 million and its initial cap of $125 million. The firm was founded in 2015 by managing partners Henri Pierre-Jacques and Jarrid Tingle. It started out as an angel syndicate with the goal of investing

Harlem Capital is announcing that it has raised $134 million for its second fund — well above its target of $100 million and its initial cap of $125 million.

The firm was founded in 2015 by managing partners Henri Pierre-Jacques and Jarrid Tingle. It started out as an angel syndicate with the goal of investing in founders from diverse backgrounds, then announced its first VC fund of $40 million at the end of 2019. The firm’s investments include e-commerce companies Pangaea, CashDrop, Malomo and Repeat, as well as wellness startups, Wellory, Expectful, Wagmo and Shine. 

It hasn’t invested all of that initial $40 million yet — the firm says it’s aiming to make five more investments from Fund I. Apparently 61% of Harlem Capital’s Fund I portfolio companies are led by Black or Latinx executives, while 43% are led exclusively by women. While the firm was founded in New York City’s Harlem neighborhood — where I live and am typing these words — it invests in startups across the United States.

Meanwhile, with Fund II, it’s shifting its focus to seed stage investments in companies that are post-product, aiming to invest between $750,000 and $1.5 million and take a 10% stake or more. The firm says it’s industry agnostic, but will be focusing on both consumer and enterprise tech with the new fund. It will also introduce the idea of “culture carry,” where the founders backed by the fund will split 1% of the carry — basically, they’re getting a stake in the fund’s profits and in each other’s success.

The focus on diversity extends to the limited partners who invested in Fund II, with 42% of LPs being women or people of color.

“We are focused on building an institution and platform to support diverse founders for many generations,” said Managing Partner Henri Pierre-Jacques in a statement. “Fund II is one step closer to our mission, but we know the work and journey continues. We are excited to provide more capital and resources to even more diverse founders tackling unique problems.”

Last week, Harlem Capital also announced that it had promoted Brandon Bryant to partner and Gabby Cazeau and Kelly Goldstein to principal.

News: Moveworks expands IT chatbot platform to encompass entire organization

  • March 31, 2021
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When investors gave Moveworks a hefty $75 million Series B at the end of 2019, they were investing in a chatbot startup that to that point had been tuned to answer IT help question in an automated way. Today, the company announced it had used that money to expand the platform to encompass employee questions

When investors gave Moveworks a hefty $75 million Series B at the end of 2019, they were investing in a chatbot startup that to that point had been tuned to answer IT help question in an automated way. Today, the company announced it had used that money to expand the platform to encompass employee questions across all lines of business.

At the time of that funding, nobody could have anticipated a pandemic either, but throughout last year as companies moved to work from home, having an automated systems in place like Moveworks became even more crucial, says CEO and company co-founder Bhavin Shah.

“It was a tragic year on a variety of fronts, but what it did was it coalesced a lot of energy around people’s need for support, people’s need for speed and help,” Shah said. It helps that employees typically access the Moveworks chatbot inside collaboration tools like Slack or Microsoft Teams, and people have been spending more time in these tools while working at home.

“We definitely saw a lot more interest in the market, and part of that was fueled by the large scale adoption of collaboration tools like Slack and Microsoft Teams by enterprises around the world,” he said.

The company is working with 100 large enterprise customers today, and those customers were looking for a more automated way for employees to ask questions about a variety of tooling from HR to finance and facilities management. While Shah says expanding the platform to move beyond IT into other parts of an organization had been on the roadmap, the pandemic definitely underscored the need to expand even more.

While the company spent its first several years tuning the underlying artificial intelligence technology for IT language, they had built it with expansion in mind. “We learned how to build a conversational system so that it can be dynamic and not be predicated on some person’s forethought around [what the question and answer will be] — that approach doesn’t scale. So there were a lot of things around dealing with all these enterprise resources and so forth that really prepared us to be an enterprise-wide partner,” Shah said.

The company also announced a new communications tool that enables companies to use the Moveworks bot to communicate directly with employees to get them to take some action. Shah says companies usually send out an email that for example, employees have to update their password. The bot tells you it’s time to do that and provides a link to walk you through the process. He says that beta testers have seen a 70% increase in responses using the bot to communicate about an action instead of email.

Shah recognizes that a technology that understands language is going to have a lot of cultural variances and nuances and that requires a diverse team to build a tool like this. He says that his HR team has a set of mandates to make sure they are interviewing people in under-represented roles to build a team that reflects the needs of the customer base and the world at large.

The company has been working with about a dozen customers over the last 9 months on the platform expansion, iterating with these customers to improve the quality of the responses, regardless of the type of question or which department it involves. Today, these tools are generally available.

News: Zapp, the on-demand delivery and ‘dark’ store operator, picks up backing from Lightspeed and Atomico

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Zapp, one of a number of startups currently battling it out in London and beyond by promising to let you order everyday items on-demand from its own delivery-only stores, has quietly raised a new round of funding from leading VCs, TechCrunch has learned. According to multiple sources, Silicon Valley’s Lightspeed and Europe’s Atomico (the VC

Zapp, one of a number of startups currently battling it out in London and beyond by promising to let you order everyday items on-demand from its own delivery-only stores, has quietly raised a new round of funding from leading VCs, TechCrunch has learned.

According to multiple sources, Silicon Valley’s Lightspeed and Europe’s Atomico (the VC firm started by Skype founder Niklas Zennström) have invested in Zapp’s unannounced Series A. Those same sources have also confirmed that Zapp has raised around $100 million in total, including via an earlier seed round.

In addition to Lightspeed and Atomico, other investors in Zapp include 468 Capital, and Burda, alongside notable angels such as Mato Peric, Christopher North (former Amazon UK CEO), and Stefan Smalla (Westwing CEO). One source tells me that the startup’s Series A is the first deal that consumer-focused partner, Sasha Astafyeva, has led on Atomico’s behalf since joining the London-headquartered VC firm.

“We’re relentlessly focused on delighting our customers and generally do not comment on our capital structure. We are excited to bring Zapp to millions of customers in London and beyond this year,” said Zapp, in a statement issued to TechCrunch when asked about the Series A and list of investors.

Started last summer, Zapp’s founders are Joe Falter, who was part of the founding team at Jumia where he led the on-demand services business through to the group’s IPO, and Navid Hadzaad, who most recently was a product leader at Amazon’s Seattle HQ after founding GoButler and scaling several ventures at Rocket Internet. The leadership team also spans ex-employees of Deliveroo, Just Eat, Dominoes and Tesco, to name just a few.

Zapp operates a vertical or “dark store” model, seeing it set up its own micro fulfillment centers. They include several locations in London already: Kensington, Chelsea, Fulham, Notting Hill, Hammersmith, Shepherd’s Bush, Shoreditch, Islington and Angel.

Shunning the gig economy model used by companies like Deliveroo, Zapp employs its riders directly. It also emphasises sustainability and utilises an all-electric fleet.

From what we can glean online and through conversations with sources, Zapp also looks to be focusing less on fresh food/groceries and more on convenience a la goPuff in the U.S., thus targeting impulse purchases rather than trying to usurp the traditional grocery shop. This is in contrast to many of the other dark store competitors, although there is clearly cross-over in all of the offerings from a multitude of players.

Alongside Zapp, dark store operators in London alone include Getir, Gorillas, Jiffy, Dija and Weezy — with some also raising and deploying significant amounts of capital, including, in some instances, employing heavy discounting as the land grab accelerates.

News: Strength-training startup Tonal crosses unicorn status after raising $250M

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When the pandemic unfolded last year, demand for at-home fitness equipment skyrocketed, and Tonal was no exception. The maker of a smart home fitness trainer experienced an explosive increase in sales, and now the six-year-old San Francisco-based startup is gearing up for its next stage of growth. Tonal is adding $250 million of new funding

When the pandemic unfolded last year, demand for at-home fitness equipment skyrocketed, and Tonal was no exception. The maker of a smart home fitness trainer experienced an explosive increase in sales, and now the six-year-old San Francisco-based startup is gearing up for its next stage of growth. Tonal is adding $250 million of new funding in a Series E round valuing the startup at $1.6 billion.

Participants in the round include Dragoneer, Cobalt Capital, L Catterton, Sapphire Ventures, and athlete investors Drew Brees, Larry Fitzgerald, Maria Sharapova, Mike Tyson and Sue Bird. According to Tonal, the new funds will allow it to spend more on marketing its strength-training product to shoppers to increase brand visibility, grow its catalog of streamed fitness classes, and invest further in operations and scaling its business to meet increased demand. To date, the at-home fitness tech startup has raised $450 million.

“We’re really getting ready to scale the business: we’re pouring a lot more capital into marketing and brand awareness, and we’re pouring a lot more capital into scaling our supply chain to get ready for the next phase, which I really think is the next two holiday seasons,” says Orady.

As part of its efforts to increase staffing across the organization, Tonal also added three new executives to its bench: COO Shannon Crespin, a former Johnson & Johnson executive; Chief Strategy Officer Gregory de Gunzburg, who previously served as Head of Corporate Strategy and Development at NBCUniversal; and CTO Bryan James, whose previous employers include Google, Nest, and Apple. Ostensibly, Crespin, de Gunzburg, and James will be crucial to Tonal’s next chapter, as the startup continues to scale on all fronts, including hardware and content production.

This latest round of funding and set of new hires are all steps the startup is taking as part of a slow march towards an IPO, says Orady, although Tonal’s chief executive declined to give a timeline regarding when the startup may go public.

“We’re going to IPO at a time when it’s best for the business, because being a public company can be incredibly distracting,” adds Orady. “I get SPAC offers, or inquiries almost daily, and our answer is consistently ‘no.’ While an IPO Is a great milestone for the business and gives us access to a certain class of capital and liquidity, we also know that you’ve got to do it at the right time.”

Founded in March 2015 by Orady, who was motivated to start Tonal by his own personal quest to shed weight and strength train, Tonal has since carved out a reputation among fitness enthusiasts for an all-in-one design and digital weights system that enables the device to replicate different gym weight stations. Extra Crunch’s EC-1 on Tonal, published earlier this week, offers a unique deep dive into this rapidly growing fitness startup, exploring Tonal’s origin story, product launch, customer engagement strategy, and future outlook.

Tonal’s Series E follows an extremely eventful year-and-a-half for the startup, which saw sales increase 800% from December 2019 to December 2020, causing delivery delays of between 10 to 12 weeks — an issue the company previously told TechCrunch it’s working to address by ramping up production of devices, increasing employee headcount, and air-shipping equipment from Taiwan to the U.S. to meet demand. This March, Tonal also announced a new partnership with Nordstrom, placing 50-square-foot stations in the women’s activewear departments of at least 40 Nordstrom locations across the U.S., bringing the total number of Tonal physical locations to 60 by the end of 2021.

  


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