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News: Singapore’s logistics tech startup Parcel Perform raises $20 million

• August 11, 2021
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Singapore-headquartered Parcel Perform, which connects merchants with e-commerce carriers and provides shipment tracking features, said on Wednesday it has raised $20 million in a new financing round as it scales its business in several parts of the world. Cambridge Capital led the logistics tech startup’s Series A financing round, while SoftBank Ventures Asia and existing

Singapore-headquartered Parcel Perform, which connects merchants with e-commerce carriers and provides shipment tracking features, said on Wednesday it has raised $20 million in a new financing round as it scales its business in several parts of the world.

Cambridge Capital led the logistics tech startup’s Series A financing round, while SoftBank Ventures Asia and existing investors including Wavemaker Partners and Investible participated in it.

The SaaS startup helps improve the experience of e-commerce merchants and their customers when engaging with carriers, explained Dr. Arne Jeroschewski, co-founder and chief executive of Parcel Perform, in an interview with TechCrunch.

Nespresso, which sells home coffee machines, capsules and accessories, relies on Parcel Perform to gain access to logistics data, for instance. Based on this data, said Jeroschewski, tracking experience — such as a web page for tracking, a system for authentication — is charted for the firm and the startup also provides tools for customer support.

Parcel Perform also provides these merchants with tools to create additional touchpoints after the checkout to create higher brand loyalty with customers, opportunities to move more inventories, and it has also developed a system to support more than 30 languages to offer the most personalized experience to customers. It says businesses on its platform have increased their customer lifetime value by up to 40%. 

The startup — which is already profitable and has grown its revenue by 5x since the onset of the pandemic — also uses its AI stack to make predictions on things such as when a customer will get their parcel. Parcel Perform, which integrates with over 700 carriers, has courted clients globally and executes more than 100 million parcel updates each day.

“Visibility is a vital market in this age of e-commerce. After evaluating many companies worldwide, we believe that Parcel Perform simply offers the best visibility and experience solution. They have built a unique value proposition for brands, marketplaces and carriers, with the most complete solution for end-to-end shipment tracking,” said Benjamin Gordon, Managing Partner of Cambridge Capital, in a statement. Cambridge focuses exclusively on global logistics and supply chain technology.

Jeroschewski founded the startup with Dana von der Heide. Jeroschewski previously co-founded e-tail unicorn Zalora, and held senior roles in Singapore Post and DHL, where he worked together with Dana. Dana is also an advisory member of the German Logistics Association and part of the distinguished eFounder Fellowship program by Alibaba.

Parcel Perform will deploy the fresh funds to scale further in Asia and Europe and also set up a regional office in North America, said Jeroschewski. The startup is also looking to increase its headcount.

News: CRANQ launches to save developers time when adding text code

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When adding text code from a 3rd party source into a platform, the process is an unavoidable and time-consuming chore. Developers currently spend a large part of their day reviewing things like “NPM” packages, and such. There are developer libraries and text code platforms like JetBrains and Visual Studio, but these don’t entirely solve the

When adding text code from a 3rd party source into a platform, the process is an unavoidable and time-consuming chore. Developers currently spend a large part of their day reviewing things like “NPM” packages, and such. There are developer libraries and text code platforms like JetBrains and Visual Studio, but these don’t entirely solve the problem. A UK startup thinks it might have the answer.

CRANQ is a Low-Code IDE (integrated dev environment, like Visual Studio) which provides component authoring, with, it says, a lot of re-usability. Its focus on standardized datatypes and ports means that intent can be easily checked, says the company. It’s now raised a Pre-Seed £1m funding from Venrex and Profounders.

Developers build their code in the IDE visually, using a drag-and-drop interface. So far it’s been used to built a version of the Educai.io back-end, and Alpha trials will begin this summer.

The cofounders are Toby Rowland and Dan Stocker. Rowland, CEO, is a serial entrepreneur, best-known for co-founding King.com in 2003. His most recent digital startup – Mangahigh.com – was acquired by Westermann Publishing in 2018, and subsequently, Rowland launched RyzeHydrogen.comfor the hydrogen-for-transport market. Stocker, CTO, is an experienced developer, software architect, and inventor. Among other projects, Dan conceived and created Giant, a React competitor, in 2012.

CRANQ’s initial focus on testing will also bring it into competition with Postman.com. The Workflow space (Zapier, N8N etc.) also overlaps with CRANQ.

But CRANQ is addressing a sizeable market. The microservices market is estimated to be worth $32bn in 2023, growing at 16% you, according to some estimates.

News: In the wake of recent racist attacks, Instagram rolls out more anti-abuse features

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Instagram today is rolling out a set of new features aimed at helping people protect their accounts from abuse, including offensive and unwanted comments and messages. The company will introduce tools for filtering abusive direct message (DM) requests as well as a way for users to limit other people from posting comments or sending DMs

Instagram today is rolling out a set of new features aimed at helping people protect their accounts from abuse, including offensive and unwanted comments and messages. The company will introduce tools for filtering abusive direct message (DM) requests as well as a way for users to limit other people from posting comments or sending DMs during spikes of increased attention — like when going viral. In addition, those who attempt to harass others on the service will also see stronger warnings against doing so, which detail the potential consequences.

The company recently confirmed it was testing the new anti-harassment tool, Limits, which Instagram head Adam Mosseri referenced in a video update shared with the Instagram community last month. The feature aims to give Instagram users an easy way to temporarily lock down their accounts when they’re targeted with a flood of harassment.

Such an addition could have been useful to combat the recent racist attacks that took place on Instagram following the Euro 2020 final, which saw several England footballers viciously harassed by angry fans after the team’s defeat. The incidents, which had included racist comments and emoji, raised awareness of how little Instagram users could do to protect themselves when they’ve gone viral in a negative way.

Image Credits: Instagram

During these sudden spikes of attention, Instagram users see an influx of unwanted comments and DM requests from people they don’t know. The Limits feature allows users to choose who can interact with you during these busy times.

From Instagram’s privacy settings, you’ll be able to toggle on limits that restrict accounts that are not following you as well as those belonging to recent followers. When limits are enabled, these accounts can’t post comments or send DM requests for a period of time of your choosing, like a certain number of days or even weeks.

Twitter had been eyeing a similar set of tools for users who go viral, but has yet to put them into action.

Instagram’s Limits feature had already been in testing, but is now becoming globally available.

The company says it’s currently experimenting with using machine learning to detect a spike in comments and DMs in order to prompt people to turn on Limits with a notification in the Instagram app.

Another feature, Hidden Words, is also being expanded.

Designed to protect users from abusive DM requests, Hidden Words automatically filters requests that contain offensive words, phrases and emojis and places them into a Hidden Folder, which you can choose to never view. It also filters out requests that are likely spam or are otherwise low-quality. Instagram doesn’t provide a list of which words it blocks to prevent people from gaming the system, but it has now updated that database with new types of offensive language, including strings of emoji — like those that were used to abuse the footballers — and included them in the filter.

Hidden Words had already been rolled out to a handful of countries earlier this year, but will reach all Instagram users globally by the end of the month. Instagram will push accounts with a larger following to use it, with messages both in their DM inbox and in their Stories tray.

The feature was also expanded with a new option to “Hide More Comments,” which would allow users to easily hide comments that are potentially harmful, but don’t go against Instagram’s rules.

Another change will involve the warnings that are displayed when someone posts a potentially abusive comment. Already, Instagram would warn users when they first try to post a comment, and it would later display an even stronger warning when they tried to post potentially offensive comments multiple times. Now, the company says users will see the stronger message the first time around.

Image Credits: Instagram

The message clearly states the comment may “contain racist language” or other content that goes against its guidelines, and reminds users that the comment may be hidden when it’s posted as a result. It also warns the user if they continue to break the community guidelines, their account “may be deleted.”

While systems to counteract online abuse are necessary and underdeveloped, there’s also the potential for such tools to be misused to silence dissent. For example, if a creator was spreading misinformation or conspiracies, or had people calling them out in the comments, they could turn to anti-abuse tools to hide the negative interactions. This would allow the creator to paint an inaccurate picture of their account as one that was popular and well-liked. And that, in turn, can be leveraged into marketing power and brand deals.

As Instagram puts more power into creators’ hands to handle online abuse, it has to weigh the potential impacts those tools have on the overall creator economy, too.

“We hope these new features will better protect people from seeing abusive content, whether it’s racist, sexist, homophobic or any other type of abuse,” noted Mosseri, in an announcement about the changes. “We know there’s more to do, including improving our systems to find and remove abusive content more quickly, and holding those who post it accountable.”

News: Facebook’s vaccine stance is part of a familiar pattern, says author and NYTimes journalist

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Today, in a new report about “coordinated inauthentic behavior” on its platform, Facebook states that it last month removed hundreds of accounts across its Facebook and Instagram platforms that were tied to anti-vaccination disinformation campaigns operated from Russia. In one campaign, says the company, a newly banned network “posted memes and comments claiming that the

Today, in a new report about “coordinated inauthentic behavior” on its platform, Facebook states that it last month removed hundreds of accounts across its Facebook and Instagram platforms that were tied to anti-vaccination disinformation campaigns operated from Russia. In one campaign, says the company, a newly banned network “posted memes and comments claiming that the AstraZeneca COVID-19 vaccine would turn people into chimpanzees.” More recently, in May, the same network “questioned the safety of the Pfizer vaccine by posting an allegedly hacked and leaked
AstraZeneca document,” says Facebook.

The company publishes such reports as a reminder to the public that it is focused on “finding and removing deceptive campaigns around the world.” Still, a new New York Times investigation into Facebook’s relationship with the Biden administration suggests that the company continues to fall short when it comes to tackling misinformation, including, currently, around vaccine misinformation.

We talked about that reported disconnect earlier today with Sheera Frenkel, a cybersecurity correspondent for the New York Times and recent co-author, with New York Times national correspondent Cecelia Kang, of “An Ugly Truth: Inside Facebook’s Battle for Domination,” which was published in June. Our conversation has been lightly edited for length.

TC: This big story right now about Facebook centers on it shutting down the accounts of NYU researchers whose tools for studying advertising on the network violated its rules, according to the company. A lot of people think those objections don’t hold water. In the meantime, several Democratic senators have sent the company a letter, grilling it about its decision to ban these scholars.  How does this particular situation fit into your understanding of how Facebook operates? 

SF: I was struck by how it fit a pattern that we really showed in [our] book of Facebook taking what seems like a very ad hoc and piecemeal approach to many of its problems. This action they took against NYU was surprising because there are so many others that are using data in the way that NYU is, including, private companies and commercial firms that are using it in ways that we don’t fully understand.

With NYU, the academics there were actually quite transparent and how they were collecting data. They didn’t hide what they were doing. They told journalists about it, and they told Facebook about it. So for Facebook to take action against just them, just as they were about to publish some research that may have been critical of Facebook and may have been damaging to Facebook, seems like a one off thing and really gets to the root of Facebook’s problems about what data the company holds about its own users.

TC: Do you have any sense that investigators in the Senate or in Congress may demand more accountability for more recent industry indiscretions, such as the events of January 6? Typically, there comes a point where Facebook apologizes over a public flap . . . then nothing changes. 

SF: After the book came out, I spoke to one lawmaker who read our book and said, ‘It’s one thing if they apologized once, and we saw a substantial change happen at the company. But what these apologies are showing us is that they think they can get away with just an apology and then changing really surface level things but not getting to the root of the problem.’

So you brought up January 6, which is something that we know Congress is looking at, and I think that what lawmakers are doing is going a step beyond what they usually do . . . they’re taking a step back and saying, ‘How did Facebook allow groups to foment on the platform for months ahead of January 6? How did its algorithms drive people toward these groups? And how did its piecemeal approach to removing some groups but not others allow this movement known as stop-the-steal really take off. That’s fascinating because, until now, they haven’t taken that step back to understand the whole machinery behind Facebook.

TC: Still, if Facebook is not willing to share its data in a more granular way, I wonder how fruitful these investigations will really be.

SF: We reported in the New York Times that Facebook, when asked by the White House for this prevalence data on COVID — the idea being how prevalent is COVID misinformation — couldn’t give it to the White House because they didn’t have it. And the reason they didn’t have it is that when their own data scientists wanted to start tracking that over a year ago at the start of the pandemic, Facebook did not give them the resources or the mandate to start tracking the prevalence of COVID misinformation. One thing lawmakers can do is pressure Facebook to do that in the future and to give the company firm deadlines for when they want to see that data.

TC: Based on your reporting, do you think there’s a reporting issue within Facebook or that these unclosed information loops are by design? In the book, for example, you talk about Russian activity on the platform leading up to the 2016 elections. You say that the company’s then chief security officer, Alex Stamos, had come up with a special team to look at Russian election interference relatively early in 2016, but that after Donald Trump won the election, Mark Zuckerberg and Sheryl Sandberg said they were clueless and frustrated and they didn’t know why they weren’t presented with Stamos’s findings earlier.  

SF: As we were doing reporting for this book, we really wanted to get to the bottom of that. Did Mark Zuckerberg and Sheryl Sandberg avoid knowing what there was to know about Russia, or were they just kept out of the loop? Ultimately, I think only Mark Zuckerberg or Sheryl Sandberg can answer that question.

What I’ll say is that early on, about a week or two after the 2016 elections, Alex Stamos goes to them and says, ‘There was Russian election interference. We don’t know how much; we don’t know the extent. But there definitely was something here and we want to investigate it. And even after being told that startling news, Mark Zuckerberg [and other to brass] didn’t ask for daily or even weekly meetings to be updated on the progress of the security team. I know this is the chief executive of a company and as the CEO [he has] a lot on [his] plate. But you would think if your security team said to you, ‘Hey, there was an unprecedented thing that happened on our platform. Democracy was potentially harmed in a way that we didn’t foresee or expect,’ you would think that as the head of the company, you’d say, ‘This is a really huge priority for me, and I’m going to ask for regular updates and meetings on this.’ We don’t see that happen. And that let’s them monthly to be able to say, ‘Well, we didn’t know. We weren’t totally up to date with things.’

TC: In the meantime, industry participants remain very interested in where regulation goes. What are you watching most closely?

SF: In the next six months to a year, there are two things that are fascinating to me. One is COVID misinformation. It’s the worst problem for Facebook, because it’s been growing on the platform for close to a decade. It’s got deep roots across all parts of Facebook. And it’s homegrown. It’s Americans who are spreading this misinformation to other Americans. So it challenges all Facebook’s tenets on free speech and what it means to be a platform that welcomes free speech but also hasn’t drawn a clear line between what free speech is and what harmful speech is, especially during the time of the pandemic. So I’m really curious to see how they handle the fact that their own algorithms are still pushing people into anti vaccine groups and are still promoting people that definitely off the platform spread incorrect information about about COVID.

The second thing for me is that we’re going into a year where there are a lot of really important elections to be held in other countries with populist leaders, some of whom are modeling their use of Facebook after Donald Trump. After banning Donald Trump. I’m very curious to see how Facebook deals with some of these leaders in other countries who are testing the waters much in the same way that he did.

News: Pave gets Y Combinator to back better startup compensation tools, again

• August 10, 2021
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Pave, a San Francisco-based startup that helps companies benchmark, plan and communicate compensation to their employees, has raised a $46 million Series B. YC Continuity led the round, which also saw participation from Andreessen Horowitz and Bessemer Venture Partners. The round comes eight months after Pave closed a $16 million Series A round. Today’s financing

Pave, a San Francisco-based startup that helps companies benchmark, plan and communicate compensation to their employees, has raised a $46 million Series B. YC Continuity led the round, which also saw participation from Andreessen Horowitz and Bessemer Venture Partners. The round comes eight months after Pave closed a $16 million Series A round. Today’s financing puts Pave’s valuation at $400 million, up from $75 million one year ago.

Pave launched with an ambitious goal: Can it measure pay across venture-backed tech companies in real time, and help startups move their comp table off of spreadsheets? AngelList and Glassdoor have already tried to build a similar benchmark-worthy data set, but Pave may have a built-in advantage over the companies that tried to fix the same problem before. Y Combinator, which helped incubate Pave and is now leading its most recent round through its later-stage capital vehicle, is one of the largest startup accelerators in the world. Of Pave’s 900 customers to date, one-third come from Y Combinator, and CEO Matthew Schulman only sees that number growing.

“Having YC’s deep support of Pave as the YC-stamped leader in the burgeoning [compensation technology] industry is and will continue to be game changing for our distribution and ability to have ample data coverage in our benchmarking product,” Schulman said. He compared Pave’s distribution trajectory as similar to what fintech company Brex, also backed by Y Combinator Continuity, managed. The founder estimates that 60% of YC companies are active Brex customers.

The reliance on YC could engender platform risk, considering how often the accelerator invests in competitors — often within the same batch. That said, an investment from Y Combinator Continuity, which does Series B rounds and higher, may be a signal that YC has found the comptech player it wants to back. Ali Rowghani, the managing director of the fund and former COO of Twitter, is joining Pave’s board.

Data is everything for the startup, supporting each of Pave’s three main services that it offers to companies. First, Pave uses market and partner data to help companies benchmark salaries for their employees. Second, the startup integrates with HR tools such as Workday, Carta and Greenhouse to give its customers a holistic picture on how employees are currently being compensated, and what makes sense for promotion cycles and salary bumps. And third, the data work culminates into formal offers and compensation packages that employers can then offer to new and old employees.

Pave’s current customers account for data on over 65,000 employee records. The first product serves as a free top of funnel service, while the last two are paid services offered up like any ol’ enterprise software contract.

The world of compensation is rife with inequity, leading to the gender wage gap, and the gaps we can see in the market regarding minority pay disparity.

Schulman views one of Pave’s goals as getting companies to go from doing their D&I analysis from once a year, to doing it consistently. The company plans to build diversity and inclusion-specific dashboards that allow companies to see inequities and access ways or suggestions to improve their breakdown.

“What gets measured, gets improved,” Schulman said. Pave has begun to track its own compensation and diversity metrics, in an effort to be more transparent with its employees and maybe inspire some companies to do the same. About 33% of Pave’s workforce identify as women, compared to an industry average of 28.8%. Half of Pave’s executives, and half of Pave’s board members, identify as women. The company has committed to having 50% of its client-facing roles, which include customer success managers and sales members, “to be female or persons from underrepresented groups.”

While Pave is starting to disclose its own internal benchmarks, transparency around diversity isn’t yet a standard within tech companies — it’s far easier to get valuations than to get specifics around the makeup of historically overlooked individuals within organizations. Pave recently launched the Pave Data Lab, which uses its data set to showcase compensation trends and inequities within how tech workers are paid. That said, Pave doesn’t currently require the companies it works with to upload gender and race information into their benchmarking tool, and didn’t disclose what specific percentage of companies on its platform share that data.

It is hoping noise will make a difference. Pave’s compensation benchmarking data is now free for all companies to use, which will bring more data underneath its umbrella, and more standards to the confusing world of compensation.

News: Daily Crunch: Apple’s head of Privacy addresses concerns over Messages safety, child abuse detection

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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 10, 2021. Today we have all sorts of goodies for you: Apple’s privacy stance, cannabis tech, even some crypto-focused items. Please enjoy.

Also note that Salesforce’s Kathy Baxter is coming to TC Sessions: SaaS to talk AI, which is going to be a hoot. — Alex

The TechCrunch Top 3

• Apple makes its privacy case: In a TechCrunch interview with Apple’s privacy chief Erik Neuenschwander, our own Matthew Panzarino got to ask questions about Cupertino’s impending software rollout of a method to detect certain abusive material. The decision by Apple has caused an uproar among privacy-minded groups.
• We need more disaster tech: That’s Danny Crichton’s thesis after reading the latest IPCC report on climate change and considering his time reporting on startups building tech to better respond to increasingly common fires, floods and other forms of natural mischief. If you were hunting for a market where you might be able to build a company and make a difference, this could be your jam.
• Salesforce announces Salesforce+: And yes, it is a streaming network of sorts. For context, Salesfoce used to host a yearly in-person event called Dreamforce. Then the pandemic hit. Now Salesforce is looking to build a home for Dreamforce online and extend its general video-and-content remit by producing more stuff, more often. The streaming service, which will focus on business topics, will be free when it launches later this year.

Startups/VC

• Speaking of climate change: A startup called 44.01 just closed a $5 million round. What’s the money for? The company’s tech that turns carbon dioxide into stones. The process, called mineralizing, is known but not on a commercial scale. If 44.01 has its way, that could change.
• In case you thought college kids had too much to do: Kiwibot, makers of a cute little robot that can deliver food, has “announced a partnership with food services and facilities management giant Sodexo to bring its robots to U.S. college campuses.” Now college students can ingest substances and not have to go pick up said vittles themselves. This makes me at once jealous and somewhat cranky about being old.
• Auto insurance comparison app raises again: Jerry, which raised a $28 million Series B just a few months ago, is back with a new, larger round. This time it’s a $75 million Series C. Jerry, which has built an app that lets users compare insurance options, is in competitive territory. But given its new round, we presume that it has found an angle on its market that is proving lucrative thus far.
• The Hyundai self-driving car program is coming to LA: Motional, a joint effort from Aptiv and Hyundai, is bringing its autonomous cars to Los Angeles via a new facility to do testing. What’s fun about this particular bit of news is that there are so many self-driving companies that I cannot keep them straight. Which means that perhaps one of them will nail the problem and I never have to drive again.
• Surfside raises $4M for cannabis marketing tech: I suppose I didn’t know that cannabis needed marketing help, as it seems to sell itself rather well. But all the same, with myriad smaller cannabis brands getting started as the U.S. and other markets work in decriminalizing the drug, Surfside is building tech that may help them get to market.
• In case you need just a little bit more, TechCrunch took a look at just how many crypto exchanges are raising money. Call it the Coinbase effect.

What’s driving the global surge in retail media spending?

As the pandemic changed consumer behavior and regulations began to reshape digital marketing tools, advertisers are turning to retail media.

Using the reams of data collected at the individual and aggregate level, retail media produce high-margin revenue streams. “And like most things, there is a bad, a good and a much better way of doing things,” advises Cynthia Luo, head of Marketing at e-commerce marketing stack Epsilo.

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

Big Tech Inc.

• OpenAI’s coding tool gets upgrades: The team behind GPT3 built something called Codex, which was designed to turn text into code. Now, with some improvements, it could be a service that even non-developers could use. It’s going into a private beta. Honestly, I can’t wait to try this out and see what I can build.
• Amazon will comp users for defective products sold by third parties: For purchases of less than $1,000, if a third party sells a defective good on Amazon, the megacorp will directly reimburse customers. This is a big upgrade. And will provide a natural incentive for Amazon to clean up its marketplace of substandard goods.
• Robinhood buys Say Technologies: Today in a $140 million all-cash deal, Robinhood announced that it will buy Say Technologies, which provides software that connects investors and public companies that they have backed. You can see how the model could fit into Robinhood neatly, perhaps making its service stand out from a pack of similar companies offering low- and zero-cost trading services.
• Venmo users can now get crypto back instead of cash: If you use a Venmo credit card, you will be able to get cash back in the form of cryptocurrency instead of cash. You know, if you wanted to boost your portfolio risk slightly. Jokes aside, it’s a neat feature and shows how the major C2C payment platforms can keep elbowing their way into the crypto market.

TechCrunch Experts: Growth Marketing

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

We’re reaching out to startup founders to tell us who they turn to when they want the most up-to-date growth marketing practices. Fill out the survey here.

Read one of the testimonials below about a Nigeria-based growth agency.

Marketer: Bili Sule, alGROWithm

Recommended by: Femi Aiki, Foodlocker

Testimonial: “Bili has a proven track record of driving growth, as the former vice president of Growth Marketing at Jumia Nigeria and as a senior growth consultant for Founders Factory Africa. She’s able to cut through the jargon/vanity metrics and has found a way to consistently and reliably engineer growth for us. What’s unique about Bili’s approach is that her strategy moves beyond just marketing. She is data-driven and takes an iterative experimental approach to unlocking growth across various business pillars, from marketing to product and operations.”

News: Extra Crunch roundup: Influencer marketing, China’s tech clampdown, drafting growth teams

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Before you hire a marketing consultant who doesn’t understand your products or commit to a CMO who has several years of experience — but none in your sector — consider influencer marketing.

Before you hire a marketing consultant who doesn’t understand your products or commit to a CMO who has several years of experience — but none in your sector — consider influencer marketing.

If the phrase evokes images of celebrities hawking hard seltzer, think again: An influencer can be as humble as an enthusiastic Reddit user who manages your Telegram channel.

According to Uber growth marketing manager Jonathan Martinez:

“ … You don’t need to find influencers with millions of followers. Instead, lean toward microinfluencers for testing, which will bring cost efficiency and the ability to sponsor a diverse range of people.”

If your startup has a clear brand pitch, “an enticing offer” and “clear next steps,” you’re ready to reach out to influencers, he says.

In a guest post, Martinez explains how to structure offers that will maximize conversions and keep your representatives motivated to promote your products and services.

Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.

Image Credits: Julian Shapiro

This morning, we published an interview with growth expert Julian Shapiro, a founder and angel investor who also advises startups on the best way to present themselves.

Marketing is data-driven, but good storytelling is an art, says Shapiro.

To connect with consumers on an emotional level, “you need a mix of goodwill, what-we-stand-for ideology, social prestige and customer delight — among other affinity-building ingredients.”

Thanks very much for reading Extra Crunch this week!

Walter Thompson

Senior Editor, TechCrunch

@yourprotagonist

Everyone wants to fund the next Coinbase

Image Credits: Nigel Sussman (opens in a new window)

“In celebration of Coinbase’s earnings report today, investors poured a mountain of cash into one of the company’s global competitors,” Alex Wilhelm writes in The Exchange.

Rolling up his sleeves, he dug into numbers from Coinbase, FalconX and FTX to give readers some perspective on the state of cryptocurrency exchanges.

How to hire and structure a growth team

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

Companies that have reached $5 million to $10 million in annual revenue are more likely to assemble growth teams; it’s a smart investment for any startup that’s achieved product-market fit.

It can also be potentially disruptive: Early marketing and product managers may feel sidelined by new cross-functional teams that suddenly take a leadership role.

In a detailed walkthrough, senior director of growth at OpenView Sam Richard explains the core players needed to build a growth team and how to integrate them into the organization smoothly, and shares some useful experiments to run.

“Don’t expect a single hire to scratch the growth itch for you,” Richard warns.

“A brilliant hire is going to come up with ideas, but will absolutely need a team to support them, turn them into experiments and then make them a reality.”

Indiegogo’s CEO on how crowdfunding navigated the pandemic

Image Credits: Bryce Durbin

In an interview with Brian Heater, Indiegogo CEO Andy Yang spoke about how the pandemic has impacted the crowdfunding platform, the challenges of stepping into the role after the previous CEO departed, and how the company reached profitability.

The company wasn’t profitable when you joined?

We weren’t profitable. I joined and then we cut to profitability, or at least kind of a neutral state, and with any kind of change in leadership, some tenured folks opted out, and we basically became a new team overnight to kind of re-found the company, and we’ve been slowly adding people over the last couple years, but always with that eye on profitability and controlling our own destiny.

Kickstarter’s CEO on the future of crowdfunding

Image Credits: Bryce Durbin

Last week, Kickstarter announced that people have backed more than 200,000 projects with $6 billion in pledges since the company launched in 2009. Just 15 months ago, it crossed the $5 billion threshold.

Brian Heater spoke to CEO Aziz Hasan, who took over in 2019, about last year’s substantial of layoffs, the pandemic’s long-term impact on crowdfunding, and how he’s working to build a more resilient company:

I think for us some of the most important things are to really just understand how we’re operating the business, making sure that we are sufficient in the buffer that we have for the business to make sure that we’re operating in a way that we can feel confident that the team is going to have some stability, that they’re going to have this resilience.

Craft your pitch deck around ‘that one thing that can really hook an investor’

We frequently run articles with advice for founders who are working on pitch decks. It’s a fundamental step in every startup’s journey, and there are myriad ways to approach the task.

Michelle Davey of telehealth staffing and services company Wheel and Jordan Nof of Tusk Venture Partners appeared on Extra Crunch Live recently to analyze Wheel’s Series A pitch.

Nof said entrepreneurs should candidly explain to potential investors what they’ll need to believe to back their startup.

” … It takes a lot of guesswork out of the equation for the investor and it reorients them to focus on the right problem set that you’re solving,” he said.

“You get this one shot to kind of influence what they think they need to believe to get an investment here … if you don’t do that … we could get pretty off base.”

Online retailers: Stop trying to beat Amazon

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

Going up against global e-commerce behemoth Amazon might seem futile, but smaller players can leverage value adds that give them a leg up when it comes to ensuring a loyal customer base, says Kenny Small, vice president SAP and Enterprise at Qualitest Group.

“The reality is that Amazon’s true unique selling proposition is its distribution network,” he writes in a guest post. “Online retailers will not be able to compete on this point because Amazon’s distribution network is so fast.

“Instead, it’s important to focus on areas where they can excel — without having to become a third-party seller on Amazon’s platform.”

The China tech crackdown continues

Image Credits: Nigel Sussman (opens in a new window)

Edtech and fintech have been in the Chinese Communist Party crosshairs in recent weeks — now, chat apps and gaming are among the targets.

Beijing filed a civil suit against Tencent over claims that its WeChat Youth Mode flouts laws protecting minors, and state media criticized the gaming industry as the digital equivalent of passing out drugs to kids, Alex Wilhelm writes in The Exchange.

He writes that the “news appears to indicate that we should expect more of the same as we’ve seen in recent months from the Chinese government: More complaints about the impact of ‘excessive’ capital in its industries, more tumbling share prices and more held IPOs.”

5 ways AI can help mitigate the global shipping crisis

Image Credits: Yuichiro Chino (opens in a new window) / Getty Images

In an increasingly on-demand world, shipping delays and disruptions are a major roadblock to customer happiness.

AI can help, says Ahmer Inam, chief artificial intelligence officer at Pactera EDGE, who offers five strategies for using AI that can help startups understand supply chain disruptions and prepare for a Plan B.

“While AI won’t protect startups, manufacturers and retailers from these types of disruptions in the future, it can help them sense, anticipate, reroute and respond to them more effectively.”

News: Starship Technologies is bringing food delivery robots to four more US college campuses this year

• August 10, 2021
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Starship Technologies, an autonomous delivery services company, announced that it will begin delivery service on four additional college campuses this fall, adding to the 20 campuses on which it already operates. The University of Illinois Chicago (UIC), the University of Kentucky (UK), the University of Nevada, Reno (UNR) and Embry-Riddle Aeronautical University’s Daytona Beach, Florida

Starship Technologies, an autonomous delivery services company, announced that it will begin delivery service on four additional college campuses this fall, adding to the 20 campuses on which it already operates.

The University of Illinois Chicago (UIC), the University of Kentucky (UK), the University of Nevada, Reno (UNR) and Embry-Riddle Aeronautical University’s Daytona Beach, Florida campus will all be graced with the Estonian-born company’s little six-wheeled, zero-emissions delivery robots.

This announcement comes the same day as Kiwibot, another autonomous sidewalk delivery robot company, has partnered with hospitality giant Sodexo to bring food delivery to college campuses. Whereas Kiwibot will focus more on delivering food from dining halls and university stores, it looks like Starship will work with on-campus merchants like Starbucks, Panda Express and Panera Bread, among others. Despite the different approaches, the outcome is the same: Delivery companies are preparing for a more “normal” school year, even though the Delta variant continues to ramp up case loads. That could either be a blessing or a problem for the Starships and Kiwibots of the world. On the one hand, more ‘Rona means more students staying inside and avoiding other humans. On the other, it could also mean school shutdowns and a bunch of useless bots.

“We see the Starship robots as an important part of safely bringing students back to campus,” said Dean Kennedy, executive director of residential life, housing and food services at UNR, in a statement. “Everyone wants to resume in-person classes and be back on campus so we’re doing everything we can to make sure it’s done responsibly. The robots offer several advantages – they make social distancing easier, they are convenient, the students we have spoken with love this idea and they continue our heritage of being an innovative campus.”

UIC will have 25 Starship robots and UNR and Embry-Riddle will get 20 robots each, all of which add to Starship’s fleet of over 1,000 delivery robots. The company says it has completed more than 1.5 million rides since its founding in 2014. It has raised a total of $102 million, including its recent $17 million funding round.

“We’ve worked hard to become a trusted and integrated partner on our campus communities and that hard work has paid off,” said Alastair Westgarth, CEO of Starship, in a statement. “We are continuing to add new schools every semester, with more to be announced this fall. The students love the robots and the schools appreciate the ability to offer this service. We can’t wait to meet the students at each of these schools and look forward to hiring students on all of the campuses to give them real world experience working with robots and AI.”

Students and faculty will be able to download the Starship Food Delivery app to choose meals and then drop a pin where they want their delivery to be sent. They can track the robot or they can wait for an alert to go outside and meet the robot once it has arrived, where they can then unlock it through the app. Starship says it aims to train and hire students at local campuses who are interested in joining the team and learning more about autonomous technology.

News: Coinbase crushes Q2 expectations, notes Q3 trading volume is trending lower

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After the bell today, Coinbase reported another period of impressive results in its second quarter earnings report. During the quarter, Coinbase’s total revenue reached $2.23 billion, which helped the company generate net income of $1.61 billion in the three-month period. The company benefited from a one-time line item worth $737.5 million, which stemmed from what

After the bell today, Coinbase reported another period of impressive results in its second quarter earnings report.

During the quarter, Coinbase’s total revenue reached $2.23 billion, which helped the company generate net income of $1.61 billion in the three-month period. The company benefited from a one-time line item worth $737.5 million, which stemmed from what Coinbase described as a “tax benefit” from its direct listing earlier the quarter.

This puts us in the odd position of leaning more heavily on the company’s adjusted EBITDA metric, a figure that we usually discount, rather than the stricter net income result. This quarter the adjusted metric is actually a bit clearer regarding the company’s regular profitability. Coinbase posted adjusted EBITDA of $1.1 billion in the period.

The company easily bested expectations, with the market expecting revenues of just $1.85 billion, and adjusted EBITDA of $961.5 million, per Yahoo Finance.

All that’s well and good, but the company provided a fascinating set of data for us to peruse that may help us better understand where the crypto economy stands today. Let’s get into the details.

Trading volume

There are two datasets from Coinbase’s Q2 that we need. The first deals with monthly transacting users, and overall trading volume:

Seeing Coinbase continue to add MTUs in the second quarter was impressive, as was the company’s Q2 trading volume result in light of the falling platform asset figure. Quite simply, Coinbase managed to accrete trading volume despite generally falling crypto prices over the time period in question.

Or as the company put it, “[d]espite price movements, we saw billions of dollars of net asset
inflows and new customers added throughout Q2.”

The next dataset deals with a breakdown of trading volume by source, and type:

The incremental growth in retail volume from Q1 2021 to Q2 2021 is impressive for a single quarter, frankly, but the pace at which Coinbase added institutional volume in the quarter is even stronger. It’s a huge result.

For the more crypto-focused than financials-focused out there, the second set of numbers is even more notable. Ethereum trading volume beat bitcoin trading volume, while “other” was more than twice what bitcoin itself managed.

A changing of the guard? The company listed three reasons for why this happened, the second of which is the most interesting. Per the earnings report:

[The mix shift was driven by] meaningful growth in Ethereum trading volumes, surpassing Bitcoin trading volumes on Coinbase for the first time driven by growth in the DeFi and NFT ecosystems (where Ethereum is an important underlying blockchain), and increased demand driven by our ETH2 staking product.

Basically, the neat stuff that the Ethereum blockchain enables is driving volume in its underlying coin, ether. Bitcoin may be the oldest crypto, but its crown may be starting to rust. Bitcoin remains the largest asset on Coinbase, at 47 percent, however.

Now let’s talk revenues.

Top line

While institutional trading volume was an impressive source of growth for Coinbase, the company’s revenue breakdown remained retail-heavy. Here’s the data:

The transaction revenue growth from Q1 to Q2 speaks for itself, and was a key driver of the company’s strong second-quarter aggregate results. But perhaps more notable was the huge differential in subscription and services revenue at the company, growing nearly 100 percent from $56.4 million in Q1 2021 to $102.6 million in the most recent period.

Certainly, Coinbase remains a transaction-led company, but in revenue terms, its third line-item is becoming material.

Now, the somewhat bad news.

What about Q3 2021?

Let’s start with how Coinbase describes the start to its third quarter:

In July, retail MTUs and total Trading Volume were 6.3 million and $57.0 billion, respectively, as crypto asset prices and crypto asset volatility declined significantly relative to Q2 levels. August month-to-date, retail MTUs and Trading Volume levels have slightly improved compared to July levels but remain lower than earlier in the year. As a result, we believe retail MTUs and total Trading Volume will be lower in Q3 as compared to Q2.

In contrast, Q2 MTUs were 8.8 million and total trading volume, pro-rated for each month of the quarter, came to $154 billion. Therefore, Coinbase had a far smaller July than what it managed on a monthly basis in Q2. That August is trending better than July is a small consolation, but it does appear that Coinbase will be a smaller business in Q3 than it was in Q1 or Q2.

If you were curious why Coinbase’s stock is not flying in the wake of its strong Q2 results, this is likely why. Of course, any serious investor in a crypto exchange is aware of how variable results can be in the sector. So a decrease after a few periods of strong results is not a huge lump to swallow.

Coinbase is worth $267.55 per share in after-hours trading as of the time of writing, off around three-quarters of a percent. That’s not even a haircut.

All told, Coinbase’s second quarter was excellent.

News: Perform a quality of earnings analysis to make the most of M&A

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Every entrepreneur must understand how to properly form a view of their company’s proper adjusted EBITDA and adjusted revenue.

As a startup founder, there will be three scenarios in which you’ll need to understand how to properly do a quality of earnings (QofE) if you want to maximize value.

The first scenario will be when you decide to raise a Series A and subsequent VC rounds, followed by when you do a strategic acquisition, and lastly, when you sell your company.

This post is a framework for how to think and organize your QofE and go through the most common items that you’ll want to keep top of mind for every M&A and private equity transaction you may be part of.

Why perform a QofE?

The goal of a QofE is to adjust the reported EBITDA to calculate a restated EBITDA that best reflects the current state of the company on an ongoing basis. It also presents a historical adjusted EBITDA that is comparable throughout the last two or three years.

QofE can have a significant impact on a company valuation for three main reasons:

1. The adjusted EBITDA will be used by a buyer/investor as the basis for valuation (for companies valued based on an EBITDA multiple).
2. The adjusted revenue will be used to recalculate the effective growth rate.
3. The adjusted revenue and EBITDA will form the basis of forecasts.

With that in mind, every entrepreneur must understand how to properly form a view of what is the proper adjusted EBITDA and adjusted revenue of your company. It is common for founders in an M&A process to be unfamiliar with the notion of QofE and leave value on the table.

This breakdown aims to ensure that you won’t be that founder and that you’ll be armed to negotiate your company valuation on equal ground with your investors. If you are in the seller’s shoes, you will get the advantage of understanding how an experienced investor or buyer thinks. If you’re in the buyer’s shoes, you’ll benefit from understanding and valuing your acquisitions better.

How is a QofE professionally performed?

When performed by a professional transaction service advisory team, the quality of earnings is a result of a thorough review of all the documents generally available in a data room. These include, but are not limited to: Legal documentation, financial statements (P&L, balance sheet, cash flow), audit reports, management presentation and contracts.

When doing a QofE analysis, it’s key to consistently ask yourself: “Can or should this information translate into an adjustment of revenue or EBITDA, net working capital (NWC) or net debt?”

Why did we include NWC and net debt? That is because they often have an indirect impact on adjusted EBITDA. Think of an adjustment to the historical level of inventory. Less inventory likely means fewer storage costs. So if you adjust historical inventory, you’ll want to also impact your adjusted EBITDA.

On top of reviewing all the aforementioned documents, your QofE analysis will heavily rely on interviewing management. No matter how long you look at the financials, if you can’t have management confirm information or explain trends, you won’t be able to draw proper conclusions and understand the numbers.

Principles for efficiently building your QofE

1. Automatically link everything you read and hear to potential QofE adjustments. This has to become second nature during the engagement.
2. Always think about all the ways an event or item that qualifies for an adjustment impacts the financial statements overall. For instance, if the event impacted revenue, did it impact costs in some way as well?
3. Make sure that the cost you are adjusting was not already offset by another accounting entry (i.e., had no impact on EBITDA).
4. Make sure that the cost you adjust for was classified above EBITDA in the first place.
5. Make sure that you can quantify each adjustment in the most objective and rational way. This is sometimes not possible and you may have to come up with a range.