Tag Archives: Blog

News: RepairSmith raises $42M Series B to bring auto repair to customers’ doorsteps

• August 19, 2021
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Needing to get your car fixed is like having a toothache: It’s painful, hard to ignore and likely means someone messing around under the hood. RepairSmith, launched in 2019, wants to make that process a little smoother through its mobile auto repair service that sends a mechanic right to the driver’s home. The startup is

Needing to get your car fixed is like having a toothache: It’s painful, hard to ignore and likely means someone messing around under the hood. RepairSmith, launched in 2019, wants to make that process a little smoother through its mobile auto repair service that sends a mechanic right to the driver’s home.

The startup is already in seven states and now, with a new round of $42 million funding, is looking to grow its operations to encompass every major metropolitan area in the U.S. by the end of 2022.

“Fundamentally what we’re doing here is e-commerce plus logistics,” Milne said. “We’re trying to disrupt probably the biggest retail industry that’s untouched by tech.” RepairSmith aims to do so by letting customers book an appointment online and have a mechanic perform an inspection or repair from their driveway, a far cry from the conventional auto repair process.

RepairSmith was incepted at Mercedes-Benz’ incubator program, and the company’s first few funding rounds were furnished solely by the automaker. Now that RepairSmith has a solid footing in multiple metros, with the data to show it’s an attractive business, the company decided to bring in new investors TI Capital, Porsche Ventures and Spring Mountain Capital to the latest Series B, in addition to Mercedes.

“We built this business from the beginning to be multibrand as an industry solution,” RepairSmith CEO Joel Milne told TechCrunch in an interview. “While [Mercedes] seeded it, it was never meant to be a Mercedes solution. That was always the intent.”

Depending on the market, users can have a repair technician at their home in as little as one or two days. Milne said around 90% of appointments can be completed on-site. For those remaining 10% or so, the customer can either drive their car (or if it’s not drivable) have it towed to a network of auto body shops that have partnered with RepairSmith.

In some cases, the customer knows what is wrong with their car in advance, but when they don’t, RepairSmith schedules an inspection visit and generates a quote for the service after.

The company launched focusing on the consumer market, but it’s also expanded to working with fleets, rental car agencies and dealerships. A little over a quarter of the company’s services are now B2B. “They’re both equally big markets and very attractive opportunities for us,” Milne said. “It’s really a function of, we focused on consumer first, but part of this capital raise [is] we’re aggressively growing out our B2B services.”

All RepairSmith technicians are also employees, rather than contractors, a decision that ultimately came down to wanting to attract top talent.

“We didn’t feel that we could be competitive in recruiting the quality of technicians we were looking for, not giving them standard employment terms. All technicians at repair shops are employees today, and that’s the market that we compete in for labor,” Milne said. He added that the company also didn’t want to have to deal with legal issues over what counts as a contractor versus employee.

The startup has big goals — entering all major metro markets by the end of next year, which doesn’t just include hiring more auto technicians but also continuing to improve the company’s software and logistics platform, which it built from the ground up. Milne demurred on whether it might need additional capital to get there. “Ultimately, if the market is good, we’ll be looking for further investment to grow, whether it’s internationally, whether it’s to grow our service offering. But this raise gets us a long way on the way there, depending on how fast we want to go.”

News: Amazon rolls out India’s first celebrity voice on Alexa with Amitabh Bachchan

• August 19, 2021
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Amazon has rolled out India’s first celebrity voice feature on Alexa with the nation’s biggest movie star Amitabh Bachchan as the company makes a push to lure more users in the world’s second-most populated nation. The company, which rolled out the voice of Samuel Jackson on Alexa in the U.S. in 2019, said users in

Amazon has rolled out India’s first celebrity voice feature on Alexa with the nation’s biggest movie star Amitabh Bachchan as the company makes a push to lure more users in the world’s second-most populated nation.

The company, which rolled out the voice of Samuel Jackson on Alexa in the U.S. in 2019, said users in India can add the Bollywood legend’s voice to their Echo devices (starting today) or Amazon shopping app (in a few weeks) for an introductory price of 149 Indian rupees ($2) for the first year. (Starting second year, the annual price will move to $4.)

The 78-year-old actor is providing Amazon with stories from his life, a selection of poems from his father, tongue twisters, and motivational quotes. Amazon customers can also ask Alexa to play music, set alarms, get weather updates and get answers in Bachchan’s signature style.

And the company said it is also applying neural speech technology to make Alexa sound like Bachchan even if there’s no direct pre-recording. (Amit ji, remind me to ask you about Amazon’s antitrust situation in India later today.)

Image credits: Amazon

“Working with Amazon to introduce my voice on Alexa was a new experience in bringing together the magic of voice technology and artistic creativity. I am excited that my well-wishers can now interact with me via this new medium, and looking forward to hear how they feel about this,” said Bachchan in a statement.

A household name, Bachchan emerged as Bollywood’s top star in the 1970s playing characters who battled corruption and social injustice. He has also done scores of advertisements for brands and initiatives from everything including hair oil, biscuits, cold drinks, jewelry, state tourism, banks to UNICEF-backed polio vaccination campaign.

The company announced its collaboration with Bollywood legend last year. But the pandemic forced Amazon’s engineering teams to work remotely for this project. There were also additional complications. Globally, users can trigger Alexa with one-word wake alert. Alexa, do this, for instance. But in case of Bachchan, Amazon has introduce a two-word wake system to Alexa. “Amit ji.” (Where ‘ji’ is a Hindi word to pay respect.)

“At Amazon & Alexa, we consistently innovate on behalf of our customers and building the Amitabh Bachchan celebrity voice experience with one of India’s most iconic voices has been a labor of love. Creating the world’s first bi-lingual celebrity voice required us to invent & re-invent across almost every element of speech science – wake word, speech recognition, neural text-to-speech and more,” said Puneesh Kumar, Country Leader for Alexa, Amazon India, in a statement.

“While we are proud of the many India-first innovations and desi-delighters in this, it’s still Day 1 and we will continue to enrich this experience as science evolves.”

India is a key overseas market for Amazon, which has deployed over $6.5 billion and is increasingly making investment in startups. This isn’t the first time the company has signed up Bachchan for one of its businesses. The company last year acquired Bachchan’s “Gulabo Sitabo” movie rights for streaming globally on Prime Video.

News: Apple is changing Mail Privacy Protection and email marketers must prepare

• August 18, 2021
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Effectively leveraging email analytics and data to inform future emails and multichannel campaigns requires marketers to start preparing now.

The most critical phase in a marketing team’s mix and overall multichannel strategy happens after you press send on an email campaign: the post-send and performance pillars of email marketing.

During this phase, marketers should gather metrics and data to guide insights impacting future emails and entire marketing campaigns. Email metrics can influence ad messaging and social posts and guide the design, content and product marketing teams. When used strategically, these metrics increase email programs’ ROI while raising marketing channel and workflow efficiency and effectiveness.

As one of the most lucrative channels for reaching target audiences — for every dollar invested in email marketing, brands receive $36 in return — email enables brands to reach their core consumer base: email subscribers.

They have opted-in to email touch points because they want to hear from the brand. By applying these insights via analytics, marketers optimize marketing spend and messaging to hit business goals.

Email impacts marketing strategy and enables better overall business success. It’s the lifeblood of an effective multichannel campaign. However, Apple’s Mail Privacy Protection — announced earlier this summer with its iOS 15 update — attempts to eliminate metrics and data associated with email.

According to the Litmus Email Client Market Share, in 2020, Apple iPhone, Apple Mail and Apple iPad accounted for nearly half of all email opens. Lacking these insights will create marketing roadblocks for segmented and personalized touch points. Marketers and businesses must prepare by adjusting email strategy and processes before the update occurs.

Companies and consumers have talked about privacy quite a bit lately. Companies fearing breaches, reputation damage and potentially lost revenue want to protect consumer data. Consumer awareness of privacy concerns has grown, too.

In a 2021 survey, over half the respondents expressed more concern about online privacy than in 2020. Consumers expect brands to demonstrate trustworthiness before they willingly share sensitive personal information.

Recognizing an increased desire for better privacy control, Apple revealed new privacy protections in its iOS 15 update, including its Mail Privacy Protection. Apple Mail users may hide their IP addresses, locations and additional data from senders, preventing brands from pulling information like open rates and location. Apple said that “Mail Privacy Protection stops senders from using invisible pixels to collect information about the user.”

What does this update mean for marketers? The potential disappearance of a critical phase in the marketing mix and multichannel strategy: the post-send and performance pillars of email marketing. No open-rate-specific data — the brand will appear to have a 100% open rate.

News: Facebook releases a glimpse of its most popular posts, but we don’t learn much

• August 18, 2021
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Facebook is out with a new report collecting the most popular posts on the platform, responding to critics who believe the company is deliberately opaque about its top performing content. Facebook’s new “widely viewed content reports” will come out quarterly, reflecting most viewed top News Feed posts in the U.S. every three months — not

Facebook is out with a new report collecting the most popular posts on the platform, responding to critics who believe the company is deliberately opaque about its top performing content.

Facebook’s new “widely viewed content reports” will come out quarterly, reflecting most viewed top News Feed posts in the U.S. every three months — not exactly the kind of realtime data monitoring that might prove useful for observing emerging trends.

With the new data set, Facebook hopes to push back against criticism that its algorithms operate within a black box. But like its often misleading blogged rebuttals and the other sets of cherry-picked data it shares, the company’s latest gesture at transparency is better than nothing, but not particularly useful.

So what do we learn? According to the new data set, 87 percent of posts that people viewed in the U.S. during Q2 of this year didn’t include an outside link. That’s notable but not very telling since Facebook still has an incredibly massive swath of people sharing and seeing links on a daily basis.

YouTube is predictably the top domain by Facebook’s chosen metric of “content viewers,” which it defines as any account that saw a piece of content on the News Feed, though we don’t get anything in the way of potentially helpful granular data there. Amazon, Gofundme, TikTok and others also in the top ten, no surprises there either.

Things get weirder when Facebook starts breaking down its most viewed links. The top five links include a website for alumni of the Green Bay Packers football team, a random online CBD marketplace and reppnforchrist.com, an apparently prominent portal for Christianity-themed graphic t-shirts. The subscription page for the Epoch Times, a site well-known for spreading pro-Trump conspiracies and other disinformation, comes in at number ten, though it was beaten by a Tumblr link to two cats walking with their tails intertwined.

Yahoo and ABC News are the only prominent national media outlets that make the top 20 when the data is sliced and diced in this particular way. Facebook also breaks down which posts the most people viewed during the period with a list of mostly benign if odd memes, including one that reads “If your VAGINA [cat emoji] or PENIS [eggplant emoji] was named after the last TV show/Move u watched what would it be.”

If you’re wondering why Facebook chose to collect and present this set of data in this specific way, it’s because the company is desperately trying to prove a point: that its platform isn’t overrun by the political conspiracies and controversial right-wing personalities that make headlines.

The dataset is Facebook’s latest argument in its long feud with New York Times reporter Kevin Roose, who created a Twitter account that surfaces Facebook’s most engaging posts on a daily basis, as measured through the Facebook-owned social monitoring tool CrowdTangle.

By the metric of engagement, Facebook’s list of top performing posts in the U.S. are regularly dominated by far-right personalities and sites like Newsmax, which pushes election conspiracies that Facebook would prefer to distance itself from.

The company argues that Facebook posts with the most interactions don’t accurately represent the top content on the platform. Facebook insists that reach data, which measures how many people see a given post, is a superior metric, but there’s no reason that engagement data isn’t just as relevant if not more so.

“The content that’s seen by the most people isn’t necessarily the content that also gets the most engagement,” Facebook wrote, in a dig clearly aimed at Roose.

The platform wants to de-emphasize political content across the board, which isn’t surprising given its track record of amplifying Russian disinformation, violent far-right militias and the Stop the Steal movement, which culminated in deadly violence at the U.S. Capitol in January.

As The New York Times previously reported, Facebook actually scrapped plans to make its reach data widely available through a public dashboard over fears that even that version of its top performing posts wouldn’t reflect well on the company.

Instead, the company opted to offer a taste of that data in a quarterly report and the result shows plenty of junk content, but less in the way of politics. Facebook’s cursory gesture of transparency notwithstanding, it’s worth remembering that nothing is stopping the company from letting people see a leaderboard of its most popular content at any given time — in realtime even! — beyond the its own fear of bad press.

News: The hottest fintech market you aren’t paying attention to

• August 18, 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 our Wednesday show this week, Natasha and Alex and Danny had colleague Tage Kene-Okafor on the show to chat about the burgeoning African startup scene. Tage has become TechCrunch’s key correspondent in the area, chronicling the continent’s expanding venture capital totals,

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

For our Wednesday show this week, Natasha and Alex and Danny had colleague Tage Kene-Okafor on the show to chat about the burgeoning African startup scene. Tage has become TechCrunch’s key correspondent in the area, chronicling the continent’s expanding venture capital totals, public company performance and startup ecosystem.

Given that we’ve paid attention to just how much money African startups are raising, we wanted to have Tage on to give us a better, deeper understanding of the continent’s technology activity. Here’s what we got into:

• The power of Y Combinator in Africa: Is the well-known American accelerator a kingmaker in Africa? Or are we merely seeing more of its activity thanks to our own information biases?
• Fintech as core focus: As in many markets, fintech investment and startup activity stand out in Africa. We wanted to better understand why that’s the case in Africa, and what startups are building in the realm of financial technology.
• African e-commerce: The continent’s e-commerce market is perhaps best known through the lens of Jumia, a public tech company that works in the sale of goods online, and their delivery. How quickly is e-commerce growing in Africa, and which startups could be the next breakouts? We asked Tage.

Equity is back on Friday with our weekly news roundup!

News: Daily Crunch: T-Mobile confirms ‘highly sophisticated cyberattack’ affecting 47M customer accounts

• August 18, 2021
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Hello friends and welcome to Daily Crunch, bringing you the most important startup, tech and venture capital news in a single package.

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello and welcome to Daily Crunch for August 18, 2021! Good news up top: A big welcome to Kate Park, who recently joined the TechCrunch family. She’s helping expand our coverage of Asia, with a special eye on South Korea. Make sure to follow her on Twitter and say hello.

Now let’s talk Apple and crypto and startups! — Alex

The TechCrunch Top 3

• Apple under fire: Apple’s not having the world’s best day, retreating on a controversial browser design choice while also coming under fresh criticism for its anti-CSAM system that, it turns out, suffers from hash collisions. Not sure what that means? Our own Zack Whittaker has you covered.
• Good news from crypto: In the wake of Coinbase’s direct listing, we’ve seen global venture capitalists invest in a number of crypto exchanges. Raising money is never a bad sign for any technology niche. But the good news from cryptoland is more extensive than just venture activity. TechCrunch explores.
• T-Mobile hacked: The possible T-Mobile hack that we shared in Daily Crunch recently is real — and impacts tens of millions of customers. As TechCrunch notes, this is the “fifth time that T-Mobile was hacked in recent years.” Not good.

Startups/VC

Our newest TechCruncher has been hard at work, which means we can highlight some of her reporting already. Here’s Park on South Korean secondhand marketplace Danggeun Market and its recent $162 million round that values the company at $2.7 billion.

Before we dive into the funding round rundown, Mayfield investor Navin Chaddha wants to know what happened to risky venture capital bets. His essay is a response to a particular piece from The Information. We’ve explored the concept before, but Chaddha’s notes are well worth reading.

Now, the rest of today’s key startup news:

• APIs are big business: So big in fact, that API-delivered startups aren’t the only companies raising money off the model of building developer-friendly services. Postman just raised $225 million at a $5.6 billion valuation to help other developers build APIs. So that other developers can more easily plug into technology products. Postman competes with Stoplight and Kong, among others.
• Worm protein cometh: Food tech is neat. Who doesn’t like that startups are working on all sorts of alternative proteins, right? Raising cows is trash for the environment, and we all know it. But what about insects? Beta Hatch just raised $10 million for its insect-focused protein work. Perhaps the future is crunchy.
• KaiPod bets on tiny schools: One piece of the 2020 and 2021 boom in edtech startup activity involves pods, or “micro-schools.” Per our own Natasha Mascarenhas, Boston-based KaiPod is betting that the model is here to stay and is focusing on the homeschool market to start.
• Middle-income fintech? One neat element of the world of fintech has been the use of financial technology to reduce the cost of financial services and bring more money-management tooling to underserved communities. One is not doing that. Instead, the company is building fintech for the middle class. The startup wants to build an “all-in-one” solution, Mary Ann Azevedo reports.
• Planning for a wet future: That’s what FloodMapp is doing, per Danny Crichton. The startup, based in Australia, “is aiming to wash out the old approaches to hydrology and predictive analytics and put in place a much more modern approach to help emergency managers and citizens know when the floods are coming.” Once you know what is coming, you can prepare, goes the idea.
• More venture wagers on no-code: The latest service hoping to take no-code app development mainstream is Stacker. You may have heard of them. Ron Miller reports that the company just landed $20 million from a16z in its Series A round. As with some other services, Stacker lets users turn spreadsheets into apps. (Some startups are taking the opposite approach, notably.)
• Today in great startup names, RaRa Delivery just raised $3.25 million. The Indonesian startup wants to bring same-day delivery to its home market. Sequoia Capital India’s Surge program and East Ventures led the round.

How to establish a health tech startup advisory board

Most startups could use an advisory board, but in health tech, it’s a core requirement.

Founders seeking to innovate in this area have a unique need for mentors who have experience navigating regulations, raising capital and managing R&D, to name just a few areas.

Based on his own experience, Patrick Frank, co-founder and COO of PatientPartner, shared some very specific ideas about who to recruit, where to find them and how to fit them into your cap table.

“You want to leverage these individuals so you are able to focus on the full view of the company to ensure it is something that both the market and investors want at scale,” says Frank.

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

Big Tech Inc.

• Twitter wants developers to build for its live-audio product: Twitter Spaces is no passing fad at the social media giant, it appears. Twitter is adding Spaces to its recently rebuilt API, allowing external developers to extend its capabilities. Frankly, we think Twitter Spaces are pretty neat, so this is a welcome piece of news.
• Amazon invests in India: In the form of a $40 million Series C for Bangalore-based financial services startup smallcase. When we think about tech megacompanies that are active investors, Amazon isn’t high on the list, making this transaction more notable than most corporate venture deals.

TechCrunch Experts: Growth Marketing

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

TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this survey along to your clients; we’d like to hear about why they loved working with you.

If you’re curious about how these surveys are shaping our coverage, check out this interview Anna Heim did with Ascendant co-founder Gus Ferguson and partner Alyssa Crankshaw, “For British agency Ascendant, growth marketing is much more than a set of tactics.”

Community

Join Danny Crichton on Thursday, August 19, at 2 p.m. PDT/5 p.m. EDT for a Twitter Spaces interview with Sukhinder Singh Cassidy, author of “Choose Possibility: Take Risks and Thrive (Even When You Fail).”

TechCrunch Disrupt 2021

It’s almost that time when startup followers from around the world gather at our annual conference, Disrupt, which will be held virtually again this year. Join the community September 21-23 to expand your horizons and your network with founders and CEOs of Coinbase, Dapper Labs, GitLab, Canva and more. Attend for less than $100, or you can get a free Innovator Pass if you are one of the first 10 people to register with promo code DAILYCRUNCHFREE. But you’ll want to hurry — it’s first come, first served, and once they’re gone, they’re gone!

News: VC Geoff Lewis on moving to Austin and popping Silicon Valley’s ‘self-referential’ bubble

• August 18, 2021
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“I don’t believe everyone should move to Austin. I don’t think it’s right for everyone, but I do think it’s right for us.”

Austin has made headlines over the past year for a number of reasons: It’s home to Oracle’s new headquarters. Tesla is building a massive gigafactory in the Texas capital. People, mostly tech workers, are leaving the Bay Area in droves to settle in the city, driving up home prices in the process.

But, it’s not just tech workers. A number of venture capitalists have set up shop in Austin, including Jim Breyer of Breyer Capital and Palantir co-founder Joe Lonsdale, who said last year he was moving his venture capital firm, 8VC, from Silicon Valley to the city.

The latest VC to call Austin home is Geoff Lewis, founder and managing partner of Bedrock Capital, a 4-year-old early-stage venture capital firm with $1 billion in assets under management. Lewis started his investing career at Founders Fund, where he was a partner for several years. He either serves or has served on the board of companies such as Lyft, Nubank, Vercel and Workrise.

Lewis also led early investments in Wish, Upstart, Tilray, Canva, Rippling, ClearCo, Flock Safety and a number of other unicorns. He’s largely credited with popularizing the phrase “narrative violation” to describe promising companies that are overlooked or underestimated because they are incongruent with popular narratives.

In making the move to Austin, the investor said he had grown disillusioned with Silicon Valley and the region’s continued lack of focus on solving what he described as real-world problems.

In a Medium post, Lewis said he was first introduced to Austin after backing Workrise (formerly called RigUp), a marketplace for skilled trade workers. In fact, he was the company’s first seed investor eight years ago and has gone on to invest in the company eight subsequent times. Today, Workrise is valued at nearly $3 billion.

Lewis said he was drawn to the company not just because it was “going to be huge” but also because it was “much more concerned with real people and real places than today’s Silicon Valley behemoths.”

“Put simply, it is a more humane technology company,” Lewis writes. “And it’s my search for this more humane genre of technological innovation that brought me to Texas. I’ve lived on the coasts and built my career as a Silicon Valley technology entrepreneur and investor, but I’ve never felt of the coasts or as an insider in Silicon Valley — I didn’t go to Stanford nor grow up rich.”

TechCrunch talked with Lewis to get more details around his decision to move his firm to Austin, learn more of his views on why Silicon Valley is too much of “a bubble” (spoiler alert: they may not be popular with many of you!) and how he plans to invest in more of Texas’ nexus of startups.

This interview has been edited for length and clarity.

I understand that you grew up in Canada. How did you first get involved in the tech industry to begin with?

I started off as an entrepreneur myself, building a SaaS company in the travel space [Topguest]. I founded that business in New York City, and in 2009 ended up moving my team to San Francisco. I spent most of my career from 2009 to 2021 bouncing between New York and SF. We ended up selling that company in 2011 and it was a reasonably OK outcome. I joined Founders Fund in 2012, where I just fell in love with investing. I ended up really having a special trajectory there and 2012 was a great time to be a young VC in San Francisco and Silicon Valley. I ended up specializing in marketplaces, both consumer and enterprise, backing companies like Lyft and Canva early. I also did the firm’s first fintech investment in Latin America, backing Nubank, and now that company has a $30 billion valuation.

I grew up with pretty modest means and by 2017, I figured I had done well enough as a VC and I should strike out on trying to get back to what I wanted to do, which was more entrepreneurial. So we founded Bedrock in late 2017. We’re on Fund III now and it’s been consistent with the investment philosophy I pursued — trying to find what we call narrative violations, or these counternarrative companies that are being overlooked or underestimated. We were very early investors in Cameo, which is now obviously a pretty well-known business, for example.

You initially chose to base Bedrock in New York. Why?

When I was at Founders Fund I had a home in both cities (SF and NYC), so I was the kid who grew up in Calgary, Canada and wanted to live on the coasts and be in the center of the action. But we decided to actually headquarter Bedrock in New York in 2017 because we had an inclination that Silicon Valley was becoming a little bit overly self-referential and wanted to be a bit outside of the noise. New York is less of a one-horse town, so we decided to base the firm there, but really invested in, and continue to invest, everywhere across the country and quite honestly around the world. We invested in WordPress in the early days and more recently in Argyle and Lambda School.

News: Would the math work if Databricks were valued at $38B?

• August 18, 2021
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Databricks, the open-source data lake and data management powerhouse has been on quite a financial run lately. Today Bloomberg reported the company could be raising a new round worth at least $1.5 billion at an otherworldly $38 billion valuation. That price tag is up $10 billion from its last fundraise in February when it snagged

Databricks, the open-source data lake and data management powerhouse has been on quite a financial run lately. Today Bloomberg reported the company could be raising a new round worth at least $1.5 billion at an otherworldly $38 billion valuation. That price tag is up $10 billion from its last fundraise in February when it snagged $1 billion at a $28 billion valuation.

Databricks declined to comment on the Bloomberg post and its possible new valuation.

The company has been growing like gangbusters, giving credence to the investor thesis that the more your startup makes, the more it is likely to make. Consider that Databricks closed 2020 with $425 million in annual recurring revenue, which in itself was up 75% from the previous year.

As revenue goes up so does valuation, and Databricks is a great example of that rule in action. In October 2019, the company raised $400 million at a seemingly modest $6.2 billion valuation (if a valuation like that can be called modest). By February 2021, that had ballooned to $28 billion, and today it could be up to $38 billion if that rumor turns out to be true.

One of the reasons that Databricks is doing so well is it operates on a consumption model. The more data you move through the Databricks product family, the more money it makes, and with data exploding, it’s doing quite well, thank you very much.

It’s worth noting that Databricks’s primary competitor, Snowflake went public last year and has a market cap of almost $83 billion. In that context, the new figure doesn’t feel quite so outrageous, But what does it mean in terms of revenue to warrant a valuation like that. Let’s find out.

Valuation math

Let’s rewind the clock and observe the company’s recent valuation marks and various revenue results at different points in time:

• Q3 2019: $200 million run rate, $6.2 billion valuation
• Q3 2020: $350 million run rate, no known valuation change
• EoY 2020: $425 million run rate, $28 billion valuation (Q1 valuation)
• Q3 2021: Unclear run rate, possible $38 billion valuation

The company’s 2019 venture round gave Databricks a 31x run rate multiple. By the first quarter of 2021, that had swelled to a roughly 66x multiple if we compare its final 2020 revenue pace to its then-fresh valuation. Certainly software multiples were higher at the start of 2021 than they were in late 2019, but Databricks’s $28 billion valuation was still more than impressive; investors were betting on the company like it was going to be a key breakout winner, and a technology company that would go public eventually in a big way.

To see the company possibly raise more funds would therefore not be surprising. Presumably the company has had a good few quarters since its last round, given its history of revenue accretion. And there’s only more money available today for growing software companies than before.

But what to make of the $38 billion figure? If Databricks merely held onto its early 2021 run rate multiple, the company would need to have reached a roughly $575 million run rate, give or take. That would work out to around 36% growth in the last two-and-a-bit quarters. That works out to less than $75 million in new run rate per quarter since the end of 2020.

Is that possible? Yeah. The company added $75 million in run rate between Q3 2020 and the end of the year. So you can back-of-the-envelope the company’s growth to make a $38 billion valuation somewhat reasonable at a flat multiple. (There’s some fuzz in all of our numbers, as we are discussing rough timelines from the company; we’ll be able to go back and do more precise math once we get the Databricks S-1 filing in due time.)

All this raises the question of whether Databricks should be able to command such a high multiple. There’s some precedent. Recently, public software company Monday.com has a run rate multiple north of 50x, for example. It earned that mark on the back of a strong first quarter as a public company.

Databricks securing a higher multiple while private is not crazy, though we wonder if the data-focused company is managing a similar growth rate. Monday.com grew 94% on a year-over-year basis in its most recent quarter.

All this is to say that you can make the math shake out for Databricks to raise at a $38 billion valuation, but built into that price is quite a lot of anticipated growth. Top quartile public software companies today trade for around 23x their forward revenues, and around 27x their present-day revenues, per Bessemer. To defend its possible new valuation when public, then, leaves quite a lot of work ahead of Databricks.

The company’s CEO, Ali Ghodsi, will join us at TC Sessions: SaaS on October 27th, and we should know by then if this rumor is, indeed true. Either way, you can be sure we are going to ask him about it.

News: Two senators urge the FTC to investigate Tesla over “Full Self-Driving” statements

• August 18, 2021
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Two Democratic senators have asked the new chair of the Federal Trade Commission to investigate Tesla’s statements about the autonomous capabilities of its Autopilot and Full Self-Driving systems. The senators, Edward Markey (D-Mass.) and Richard Blumenthal (D-Conn.), expressed particular concern over Tesla misleading customers into thinking their vehicles are capable of fully autonomous driving. “Tesla’s

Two Democratic senators have asked the new chair of the Federal Trade Commission to investigate Tesla’s statements about the autonomous capabilities of its Autopilot and Full Self-Driving systems. The senators, Edward Markey (D-Mass.) and Richard Blumenthal (D-Conn.), expressed particular concern over Tesla misleading customers into thinking their vehicles are capable of fully autonomous driving.

“Tesla’s marketing has repeatedly overstated the capabilities of its vehicles, and these statements increasingly pose a threat to motorists and other users of the road,” they said. “Accordingly, we urge you to open an investigation into potentially deceptive and unfair practices in Tesla’s advertising and marketing of its driving automation systems and take appropriate enforcement action to ensure the safety of all drivers on the road.”

In their letter to new FTC Chair Lina Khan, they point to a 2019 Youtube video Tesla posted to its channel, which shows a Tesla driving autonomously. The roughly two-minute-long video is titled “Full Self-Driving” and has been viewed over 18 million times.

“Their claims put Tesla drivers – and all of the travelling public – at risk of serious injury or death,” the Senators said.

When it comes to Tesla and formal investigations, when it rains, it pours. The letter was published just two days after the National Highway Transportation Safety Administration said it had opened a preliminary investigation into incidents involving Teslas crashing into parked emergency vehicles.

Lina Khan is the youngest person to ever chair the FTC. She’s widely considered the most progressive appointment in recent history, particularly for her scholarship on antitrust law. But should the FTC choose to investigate Tesla, the case would likely have nothing to do with antitrust law and instead fall under the purview of consumer protection. The FTC has the authority to investigate false or misleading claims from companies regarding their products.

This is not the first time prominent figures have called on the FTC to open an investigation into Tesla’s claims. The Center for Auto Safety and Consumer Watchdog, two special interest groups, also sent a letter in 2018 to the commission over the marketing of Autopilot features. The following year, the NHTSA urged the FTC to investigate whether claims made by Tesla CEO Elon Musk on the Model 3’s safety “constitute[d] unfair or deceptive acts or practices.”

Tesla charges $10,000 for access to a “Full Self-Driving” option at the point of sale, or as a subscription. The company is currently testing beta version 9 of FSD with a few thousand drivers, but the Senators take aim at the beta version, too. “After the [beta 9] update, drivers have posted videos online showing their updated Tesla vehicles making unexpected maneuvers that require human intervention to prevent a crash,” they write. “Mr. Musk’s tepid precautions tucked away on social media are no excuse for misleading drivers and endangering the lives of everyone on the road.”

News: How to establish a health tech startup advisory board

• August 18, 2021
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Three to five people is an ideal starting point for an advisory board, depending on the size and stage of your company.

When you enter the health tech industry as a new startup, an advisory board is a crucial foundational step. A board can guide you through industry-specific nuances, help you make important decisions and prove your legitimacy to investors looking for a strong industry background.

An advisory board will be able to give you strategic insights about both your company and the wider healthcare and technology industries.

In my experience of raising capital, the unpredictable financial situation at the beginning of the pandemic meant we nearly lost our $2 million round, but came through with a committed $250,000, which we used to bring in about $500,000 in revenue.

Something that helped this process was building our advisory board and starting small — we didn’t go for all of healthcare but instead focused on two healthcare verticals. This allowed us to prove our concept, build case studies and win contracts with specific teams in our customers’ companies.

It pays off to stay focused and prove your worth so that your advisory board members can champion you in niche markets, with the potential to expand in the future. For this reason, it’s important to identify the main intention behind your board, and exactly who should be on it.

Who to recruit

Three to five people is an ideal starting point for an advisory board, depending on the size and stage of your company. In health tech, you need more than just the healthcare perspective — you also need the insight of those who have already grown technology companies, perhaps outside of the industry. Our company’s board is an even split of two healthcare and two technology advisers, and, ideally, you want to find a fifth who is well versed in both industries.

An M.D., a Ph.D. from a respected institution or a thought leader in your relevant field of healthcare is the most important asset to an advisory board. These are the highly decorated physicians who have strong connections and act as a reference for their peers.

They provide instant credibility for your company, help you get into the minds of both patients and healthcare providers, and can outline how various health systems work.