Browsing Tag: Startups

    Startups

    Digging into Europe’s Q1 venture results

    April 23, 2020

    Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

    Today we’re taking a look at a bit of data on the European venture capital scene in Q1. As with our looks at other locales like Silicon Valley and other bits of the United States, we’re taking stock of what happened in the first quarter. Q1 2020 includes pre-COVID-19 results, though as some European countries began to lock-down before the United States, there may be more pandemic-impact in the following results than we’ve seen domestically thus far.

    Today’s grip of data is via the folks over at PitchBook, who compiled a venture-focused dig through the continent’s first three months of the year. Let’s parse the top numbers, make a comparison or two and then look to what’s next.

    Q1: An ok quarter

    Despite COVID-19, China’s broad shuttering and an aged bull market deep, Europe’s venture capital activity in Q1 2020 was mostly fine. It wasn’t great, and there were some less-than-winsome results that could be chalked up to the pandemic, but the first quarter provided an alright start to the year.


    Source: Tech Crunch Startups | Digging into Europe’s Q1 venture results

    Startups

    Miro lands $50M Series B for digital whiteboard as demand surges

    April 23, 2020

    Miro is a company in the right place at the right time. The makers of a digital whiteboard are seeing usage surge right now as businesses move from the workplace and physical whiteboards. Today, the company announced a hefty $50 million Series B.

    Iconiq Capital led the round with help from Accel and a slew of individual investors. Today’s investment brings the total raised to around $75 million, according to the company. Among the company’s angel investors was basketball star Steph Curry.

    What’s attracting this level of investment is that this is a product made for a moment when workers are forced to stay home. One of the primary complaints about working at home is the inability to sit in the same room with colleagues and brainstorm around a whiteboard. This reproduces that to an extent.

    What’s more, Miro isn’t simply light-weight add-in like you might find built into a collaboration tool like Zoom or Microsoft Teams; it’s more of a platform play designed to integrate with many different enterprise tools, much like Slack does for communications.

    Miro co-founder and CEO Andrey Khusid said the company planned the platform idea from its earliest days. “The concept from day one was building something for real-time collaboration and the platform thing is very important because we expect that people will build on top of our product,” Khusid told TechCrunch.

    Image Credit: Miro

    That means that people can build integrations to other common tools and customize the base tool to meet the needs of an individual team or organization. It’s an approach that seems to be working as the company reports it’s profitable with more than 21,000 customers including 80% of the Fortune 100. Customers include Netflix, Salesforce, PwC, Spotify, Expedia and Deloitte.

    Khusid says usage has been skyrocketing among both business and educational customers as the pandemic has forced millions of people to work at home. He says that has been a challenge for his engineering team to keep up with the demand, but one that the company has been able to meet to this point.

    The startup just passed the 300 employee mark this week, and it will continue to hire with this new influx of money. Khusid expects to have another 150 employees before the end of the year to keep up with increasing demand for the product.

    “We understand that we need to come out strong from this situation. The company is growing much faster than we expected, so we need to have a very strong team to maintain the growth at the same pace after the crisis ends.”


    Source: Tech Crunch Startups | Miro lands M Series B for digital whiteboard as demand surges

    Startups

    7 VCs look into the future of fintech

    April 23, 2020

    TechCrunch recently asked a number of venture capitalists who invest in fintech to share their thoughts about the state of the industry; they pulled us into the present moment, drawing from their portfolio companies, deal flow and inboxes.

    Today, we asked them to look into the future.

    Although it looks like the COVID-19 pandemic has clipped the tails of many unicorns, this era won’t last forever. Investors expect the domestic and global economy to recover, perhaps starting in late 2020 or early 2021, though those timelines could be aggressive.

    TechCrunch wanted to find out what improving macro conditions in the future might mean for fintech startups, a cohort that has attracted huge checks and even larger expectations from its backers and founders. To better understand what is coming, we reached out to a group of VCs we selected based on their experience and their firm’s investing history to predict what’s beyond the horizon.

    Here’s our group for today:

    As always, we will distill and discuss key trends before sharing their responses in full, lightly edited for length and clarity.

    Consolidation, the power of cash, who is doomed and far-off IPOs

    Our first theme is that consolidation is generally expected and could come broadly in the diverse fintech space. Digging through the answers, most said they believed the maturation of the fintech industry is upon us. Horizontal mergers might happen at a faster pace than before as companies struggle and acquisitions become cheaper.

    Investors largely noted that startups in the lending space will not come out of this crisis unscathed, so expect forced combinations in that sector, as well as companies that target SMB customers.

    The second trend we noted deals with who lives and who dies. The answer, contrary to our guess, doesn’t deal with stage but, instead, runway. Preparing this particular survey we had a hunch that later-stage fintech startups would have a better shot at staying alive, given their history of huge capital raises. That was nearly correct, it turned out.

    However, instead of stage, our investor group generally agrees that runway matters more; older startups raised more, but they also may have far worse burn rates. In this vein, one investor noted that super early-stage fintech startups that just raised should do fine, as they’ll just build straight through the downturn.

    Our third trend deals with which cohort of fintech startups will fare the worst. We had the investors rank a number of types of companies and some categories fared poorly. Consumer lending fintech shops do not inspire investor confidence, nor did consumer-oriented payments companies. Business lending was probably around third from the bottom.

    There will naturally be some startups in those categories that do fine, but that’s almost more a comment on the total number of fintech startups than it is a commentary on the viability of any particular sector.

    Trend number four: fintech IPOs are on hold for quarters, if not years. If you were hoping for a quick return to fintech liquidity, prepare to be let down. The investors we questioned said that we might see one in Q4, but that public debuts for fintech players are probably more of a 2021 affair.

    We also asked if the Bill.com IPO — which went well — had any impact on fintech exits. Not really, was the answer, aside from one note that it might have helped drive some later, pre-COVID-19 M&A activity.

    Our final trend: expect doom and gloom for interchange revenue.

    The investors we chatted with said they largely think we’ll see a sharp drop in revenue from interchange fees, a slice of the pie that many card issuers take per transaction. This means that the startups that bet on IC revenue to fund their nifty why-not consumer debit cards will see a drop in their ability to issue. And that hurdle could mean startups struggle to make their credit card bets stay a reality, which brings us back to the first theme we talked about: further consolidation.

    All this said, but one investor disagreed. You’ll have to read the piece to find out which one and why.


    Source: Tech Crunch Startups | 7 VCs look into the future of fintech

    Startups

    Atlanta’s SingleOps raises $6M for its outdoor-care-focused software business

    April 23, 2020

    Today SingleOps, an Atlanta-based software startup, announced that it has raised $6 million in new capital. The startup’s service is built to support companies that deal with outdoor work like landscaping, tree care and lawn maintenance. It’s an example of the vertical SaaS trend that has come to the fore in recent years, with startups building software services tailored to particular business categories.

    The market that SingleOps is focused on isn’t small, mind. The company claims it’s worth $100 billion each year. And that means there is lots of room for SingleOps to grow.

    Before this new $6 million round, SingleOps had raised just $2.5 million, using that to scale up to 30 staff (its software team is remote, making the company more prepared for COVID-19 than most) and around 400 customers. How did it do that in an era when most startups raised $2.5 million to clean their offices? According to the company’s CEO Sean McCormick and president Taylor Gould in an interview with TechCrunch, being capital-efficient has been part of the company’s modus operandi since its early days. (You can build SaaS with limited capital if early customers write you checks, it turns out.)

    The SingleOps team, via the company.

    But toward the end of 2019, SingleOps reviewed its SaaS metrics and, deciding that things looked good, aimed to accelerate by bringing on new capital. The $6 million was led by Kansas City-based Five Elms Capital, with the firm taking a board seat in the transaction. According to McCormick and Gould, they liked Five Elms’ focus on B2B SaaS companies like their own. Diligence with existing Five Elms portfolio companies also helped them in making the choice.

    SingleOps’ product, notably, isn’t narrow. Instead, the company’s service can log leads, handle scheduling, help provide estimates, has a mobile app and deals with scheduling, cost tracking and invoicing and payments. With a little tact, the self-described “green industry” that SingleOps works with is not renowned for being on the cutting edge of technological change; by offering a broader feature set, SingleOps can sell a single service to bring businesses in its target niche all the way into the cloud era.

    The package of features is sitting well with the market so far, with SingleOps growing both GAAP revenue and ARR by “well over” 100% in the last 12 months, per its executives. And for the SaaS fans out there, SingleOps averaged 120% net retention over the last 12 months.

    It was the first call for TechCrunch that I’ve had that involved several mentions of tree climbing as part of a startup’s go to market motion. As such, we had no choice but to write about the company, as it’s different than most startups we talk to, and therefore rather interesting.


    Source: Tech Crunch Startups | Atlanta’s SingleOps raises M for its outdoor-care-focused software business

    Startups

    Paige adds $5M from Goldman Sachs to double down on AI-based cancer therapies

    April 23, 2020

    Paige, the Sloan-Kettering spinout that has been building an artificial intelligence platform to improve cancer pathology and subsequently use those insights to develop better drug therapies, has raised an additional $5 million in funding to continue its work commercialising its platform and expanding its research reach, while also getting FDA clearance to launch in hospitals in North America and Europe.

    The round comes from Goldman Sachs, specifically its merchant banking division, and is an extension to the Series B of $45 million that Paige announced in December 2019 led by Breyer Capital at a valuation (per PitchBook) of about $208 million.

    Leo Grady, Paige’s CEO, said that the startup has not been doing any COVID-19-related work — its focus is squarely on cancer research at the moment — but he also said that the recent health pandemic has shone a light on some of the shortcomings that existed in the medical world, an area that Paige is addressing in its work.

    “We haven’t worked on COVID-19 related research specifically, but what we have seen is that CV19 has had a strong impact on the pathology community,” he said. “It has highlighted that they are unable to work remotely. The technology we have been building supports the pathology community’s ability to work safely and remotely, and can further accelerate their work through the use of AI technology. Because pathologists’ inability to work remotely is becoming more apparent, it is creating an urgency for going digital.”

    Indeed, the ongoing coronavirus pandemic has led to a big focus on the role that tech could play in addressing it and health crises in general, with answers coming in the form of using more AI in research and improving telemedicine and other remote health monitoring solutions, through to more basic things like using the financial resources and consumer reach of tech companies to get vital supplies and information to people who need them.

    Paige falls generally into the first of these categories, and Grady said that the new cash is specifically strategic, given Goldman Sachs’ wider investment efforts in cancer research.

    It has a very close relationship with the renowned cancer hospital and research center Memorial Sloan Kettering — which has meant it has had exclusive access to MSK’s 25 million pathology slides as well as its intellectual property related to the AI-based computational pathology, two key assets since the slides represent one of the biggest repositories of its kind in the world, and machine learning platforms are only as good as the data that’s fed into them. It recently also announced a deal with Invicro LLC, a subsidiary of Konica Minolta, to provide integrated pathology solutions for pharmaceutical and biotechnology sponsors running drug discovery and development initiatives.

    “Goldman Sachs recognizes that we have an enormous opportunity, not only with our clinical-grade AI but also with the platform, and viewer, which has the ability to enable pathologists to work remotely,” he said, adding that although the startup is already well-capitalized, “the goal with this new influx of $5M is really to provide an extra push with product development as pathologist’s need to work remotely continues to grow. Additionally, the cancer networks Goldman Sachs have invested in and our ability to support those networks around the world with our technology, make this a great working relationship.”

    Grady said that since announcing the Series B, Paige has added several beta sites that have completed a number of studies that will be publishing soon. “These beta studies really form the basis for validating the value proposition that our technology brings into the cancer and pathology workflow. This validation is instrumental in pushing the commercialization of our technology,” he said.

    No plans right now for another round, he added.

    David Castelblanco, an MD at the investment bank, is joining the board with this round. “Paige is transforming pathology and translational research in the cancer field and is working closely with biopharma companies to create custom diagnostic solutions and drug development technologies to improve patient care,” he said in a statement. “We look forward to supporting the Company’s important mission of improving cancer care through its AI technology.”

    “Paige’s leadership is doing a fantastic job in building a stellar team and seizing opportunities in this exciting market,” added Jim Breyer, founder and CEO of Breyer Capital, also in a statement.


    Source: Tech Crunch Startups | Paige adds M from Goldman Sachs to double down on AI-based cancer therapies

    Startups

    Heartcore Capital’s ‘Fellowship’ offers pre-seed funding for founders building consumer tech during lockdown

    April 23, 2020

    The new “normal” offers new opportunities. That’s the thinking behind a new pre-seed funding program from Heartcore Capital . The European consumer-focused VC usually invests in startups at seed and Series A, but recognising that many potential founders are in lockdown and with time of their hands, is moving to the top of the funnel with the launch of a pre-seed fellowship programme.

    Specifically, entrepreneurs interested in starting a consumer technology company during lockdown can apply for a pre-seed investment of €100,000 per founder to finance development of a prototype. The entire investment process will be conducted online and begins via a simple web form, followed by Zoom conversations with the investment team.

    “Heartcore is offering €100,000 per founder for a 7% equity stake per company – to reflect that a larger founding team will also mean a larger initial cost base,” explains the VC. “The investment instrument is a convertible note. The company does not need to be founded yet, nor is an idea required to apply. All companies must operate within consumer technology (B2C/B2B2C) and be based in Europe”.

    More broadly, the goal of Fellowship financing is to “build a prototype, with a view to raising a seed round when normal life resumes”.

    To find out more, I caught up with Heartcore Capital General Partner Max Niederhofer, where we discussed the program’s inception, who it competes with, and startup opportunities after lockdown.

    TechCrunch: How did the idea of the fellowship come about or was Heartcore working on a pre-seed model before the coronavirus crisis hit (I gather it might be the latter)?

    Max Niederhofer: Heartcore has been investing from inception to Series A since we got started in 2007. Half of the investments in the last twelve months have been in a team and a plan, often pre-product. But many of these were sizeable funding rounds where there was already a fully fleshed out idea, already a larger team, already a company.

    This is different. We sat down two weeks ago, after we had worked to make sure that our portfolio is well funded, and after closing the three deals we had in the pipe from pre-lockdown. And we asked ourselves: what if this lasts longer? Is there an instrument that we could come up with that is tailored to this situation, that lives the Heartcore ethos of “no fear, no greed” and puts founders’ needs first.

    Everyone seems to be examining their life right now, including their life’s work. We know some exceptional people have lost their jobs. Others might have more time to think about the big idea they’ve been mulling over for a while. What can we offer them to get going right now, rather than having to wait until normal life resumes?

    Will the fellowship continue to be open to applications if/when lockdown restrictions are lifted across Europe?

    The intention is to keep it open through 2020, potentially into 2021, depending on how long it takes to resume “normal life.” We will see what happens this year, whether the offering resonates with entrepreneurs, and we will adjust accordingly.

    There’s certainly a possibility that this becomes part of our operating model going forward. But like any startup, we will iterate it to make sure that it’s something that makes sense for founders given the overall fundraising environment.

    Arguably, with the maturity of remote working tools, a period of lockdown is a good opportunity for a small team to build an MVP or have a prolonged period of product development without worrying too much about go-to market. Is that your thinking?

    That is certainly part of it. This is a great time for focused product work. But we also think it’s a great time to launch prototypes, get people using them, and collect feedback. App downloads are significantly up. The willingness to try new things is high.

    More than that, however, we think that founding teams will want to be ready to raise larger seed financing when restrictions are lifted. We want to put them in a position to do so.

    Which funding sources or other programs do you think the Heartcore fellowship most closely competes with?

    It’s like Y Combinator for people who can’t leave their house.

    You’re targeting companies within consumer technology (B2C/B2B2C) that are based in Europe. Within this definition, what type of products or sectors do you think have the best opportunity to be founded in the current crisis and (hopefully) as we come out of it?

    The crisis serves as an accelerant to some of the secular trends we’ve been seeing anyway, e.g. the convergence of online and offline. Of course everyone is talking about the “digital only” companies right now, but we invest in B2C and marketplaces across the entire consumer spend spectrum: in health, food, finance, insurance, real estate, mobility, travel, retail/ecommerce, education, media/entertainment, and of course consumer productivity tools.

    We are also happily counter-cyclical: we definitely want to speak with founders in the travel sector. We believe travel will rebound in a big way and that online travel companies will disproportionately benefit.

    We are big believers in technology’s potential to give people superpowers, but also to help them become more human by addressing our common desires to belong, to stay safe and protect others, to have fun and work on something meaningful.


    Source: Tech Crunch Startups | Heartcore Capital’s ‘Fellowship’ offers pre-seed funding for founders building consumer tech during lockdown

    Startups

    Hong Kong insurtech startup OneDegree launches its first product, medical coverage for pets

    April 23, 2020

    OneDegree, the Hong Kong-based insurance technology startup, launched its first product today, a line of medical plans for pets called Pawfect Care. The company will introduce other products, including cyber insurance and medical coverage for humans, all available completely online, over the next 12 months.

    Founded in 2016, OneDegree raised $30 million in Series A funding last year, and its investors include BitRock Capital, Cyperport Macro Fund and Cathay Ventures.

    Co-founder and CEO Alvin Kwock told TechCrunch that it took OneDegree two years to launch Pawfect Care because of the stringent regulatory approval process required to get an insurance license in Hong Kong.

    The first two virtual insurance licenses issued by Hong Kong’s Insurance Authority went to companies owned by existing insurance providers (Sun Life’s Bow Tie and Asia Insurance’s Avo), in an effort to encourage more legacy players to go digital. OneDegree was the first independent insurance company to start online to be granted a license.

    OneDegree will gradually launch cyber and human medical insurance plans over the next year. Kwock said the COVID-19 pandemic has created a “paradigm shift,” because face-to-face activities have declined dramatically, and the Insurance Authority is now issuing new virtual insurance licenses and allowing more products to be sold online.

    The company decided to start with pet insurance because the company estimates that even though there are about half a million pet dogs and cats in Hong Kong, only about 3% of them have medical insurance despite the high cost of veterinary care. OneDegree lets customers buy and manage policies and file claims through a mobile app. It says that about 90% of approved claims will be paid within two working days.

    In response to the pandemic, Pawfect Care’s pet insurance includes coverage of medical costs related to COVID-19. OneDegree emphasizes that there have only been a few known cases of pets testing positive for the virus so far and no evidence of them acting as carriers so far, but added the coverage for customers’ peace of mind.


    Source: Tech Crunch Startups | Hong Kong insurtech startup OneDegree launches its first product, medical coverage for pets

    Startups

    Bunq lets you create joint accounts with non-Bunq Premium users

    April 23, 2020

    Challenger bank Bunq has revamped joint accounts to give you more flexibility. If you’re a premium users (ie not just a Bunq Travel customer), you can create a sub-account with someone else who’s not a premium user for €2.99 per month. Bunq also lets you create multiple sub-accounts, meaning that you can have an account with your partner, another one with your kid, etc.

    The feature is called Bunq +1 and is different from traditional Bunq sub-accounts. With Bunq +1, you can invite someone who isn’t already a Bunq user and share an account with them. They don’t have to pay €7.99 for a Bunq Premium subscription. The main Bunq account holder pays €2.99 per month for each +1 account.

    After that, you can both deposit money, view transactions and spend money. Each user gets their own Bunq card. This feature can be particularly useful for parents who want to manage allowance on Bunq. The parent could instantly transfer money from their main account to the +1 account — they can view transactions at all time. The kid could spend money with a Bunq card.

    If you’re trying to share an account with an existing Bunq Premium user, you can create a sub-account and share it. Each user will have a full-fledged Bunq account with their own personal account. They’ll also have a shared sub-account with its own IBAN.

    Of course, you both have to pay €7.99 per month for a Bunq Premium subscription. Bunq Premium users can create up to 25 sub-accounts for free.

    Business customers can also leverage Bunq +1 to hand out corporate cards to their employee. Each employee could have their own +1 account with their own card. Businesses could then manage expenses and top up accounts.


    Source: Tech Crunch Startups | Bunq lets you create joint accounts with non-Bunq Premium users

    Startups

    Doctolib shares some metrics on video consultations

    April 23, 2020

    French startup Doctolib is sharing some metrics on its video consultation feature. While the startup first started as a way to help doctors manage appointments and let them accept online appointments, the company has been taking advantage of its huge community of health professionals to add video consultations on top of that.

    Since the start of the COVID-19 pandemic, users have booked 2.5 million online appointments in France and Germany. More than 31,000 physicians offer video consultations and 872,000 patients have used the service at least once over the past five weeks.

    Usually, Doctolib charges practitioners a monthly fee to access the service and use it to replace their calendar. Practitioners can choose to pay an additional €79 per month ($90) on top of their standard Doctolib plan to start accepting remote appointments.

    During the epidemic, the startup has chosen to waive video consultation subscription fees. It’s the right thing to do, but it’s also a great way to convince more practitioners to start accepting remote appointments.

    The result is explosive growth. Doctolib jumped from 1,000 to 100,000 video consultations per day in just a month. The good news is that it isn’t just for young people — 28% of users who book an online appointment are 55 years old and beyond.

    Those appointments comply with France’s national healthcare system. Patients get reimbursed just like a normal appointment. But there are some legal restrictions. Usually, you can’t book a remote appointment and get reimbursed if the doctor doesn’t know you already.

    But that restriction has been lifted during the lockdown. Let’s see if the momentum will hold when the national healthcare system puts back some limits on video consultations.


    Source: Tech Crunch Startups | Doctolib shares some metrics on video consultations

    Startups

    6 investment trends that could emerge from the COVID-19 pandemic

    April 22, 2020

    While some U.S. investors might have taken comfort from China’s rebound, we still find ourselves in the early innings of this period of uncertainty.

    Some epidemiologists have estimated that COVID-19 cases will peak in April, but PitchBook reports that dealmaking was down -26% in March, compared to February’s weekly average. The decline is likely to continue in coming weeks — many of the deals that closed last month were initiated before the pandemic, and there is a lag between when deals are made and when they are announced.

    However, there’s still hope. A recent report concluded that because valuations are lower and there’s less competition for deals, “the best-performing vintages tend to be those that invest at the nadir of a downturn and into the early stage of recovery.” There are countless examples from the 2008 recession, including many highly valued VC-backed businesses such as WhatsApp, Venmo, Groupon, Uber, Slack and Square. Other early-stage VCs seem to have arrived at a similar conclusion.

    Also, early-stage investing seems more resilient. During the last recession, angel and seed activity increased 34% as interest in the stage boomed during a period of prolonged growth.

    Furthermore, there is still capital to be deployed in categories that interested investors before the pandemic, which may set the new order in a post-COVID-19 world. According to data provider Preqin Ltd., VC dry powder rose for a seventh consecutive year to roughly $276 billion in 2019, and another $21 billion were raised last quarter. And looking at the deals on the early-stage side that were made year to date, especially in March, the vertical categories that garnered the most funding were enterprise SaaS, fintech, life sciences, healthcare IT, edtech and cybersecurity.

    Image Credits: PitchBook

    That said, if VCs have the capital to deploy and are able to overcome the obstacle of “having never met in person,” here are six investment trends that could emerge when the pandemic is over.

    1. Future of work: promoting intimacy and trust


    Source: Tech Crunch Startups | 6 investment trends that could emerge from the COVID-19 pandemic