Browsing Tag: Startups

Do you remember as a kid going to the grocery store with your parents and being just totally overwhelmed by the bright, loud packaging of products on shelf after shelf, aisle after aisle?

I certainly do. Each product had a brand — you’d recognize the Kix by its bright red box and Tide by its loud orange bottle. Every package screamed its brand name at you.

Branded packaging as we know it hasn’t been around that long. While people have been packaging goods for millennia, trademarked printed boxes, tins and shrink-wrapped containers were only invented in the late 1800s — less than 150 years ago, beginning with Uneeda Biscuits around 1896.

When branded packaging was invented, and up until very recently, its purpose and value to nearly every industry made a ton of good sense. The average consumer would shop in a catalog, browsing ads and offerings, or in a store, perusing shelves of products. The more a product stood out and set itself apart, the more memorable it would be and the more likely it would be purchased. Good packaging made products easy to recommend and spread by sharing visually.

And then, the internet came along.

Our team recently launched our new studio product, Regular, a service directed at small businesses hitting their growth inflection point. As we began to design our own website and work on branding, we did a lot of research into branding trends for consumer packaged goods, and what we uncovered was surprising.

We found was that there is a surprising movement towards “unbranding” — specifically choosing not to create a strong association between a product and its maker. Instead of bright packaging, large logos and stamped products, many companies are now going the other direction by operating without logos and offering minimal (or no) packaging.

Pens from MUJI (Photo: Michael/Flickr)

One of the earliest companies to adopt this mindset was Japanese home goods store MUJI, whose name literally means “No Brand” (it doesn’t get more literal than that). Most of its products come unpackaged with just a small price tag, or in minimal packaging with a single informational label (e.g., “lotion,” “body soap”) to identify its contents.

But MUJI has been since the 1980s, so why are we talking about this now?

Source: Tech Crunch Startups | The unbrandening

A company building a very high-tech glove has just gotten its hands on some new money.

HaptX is building a sensor-packed glove for VR and robotics applications that simulates haptic and resistance feedback for enterprise users.

The Seattle startup has raised $12 million in new funding from Mason Avenue Investments, Taylor Frigon Capital Partners, Upheaval Investments, Votiv Capital, Keiretsu Forum, Keiretsu Capital, NetEase and Amit Kapur of Dawn Patrol Ventures. HaptX has now raised $19 million to date.

The company says this funding will go toward the company’s next generation of glove hardware.

I got a chance to demo the company’s glove last year and there are certainly some bizarre experiences that are enabled by the product, which uses an external pneumatic box to expand and contract air pockets inside a glove form factor to make it feel like the virtual object you’re holding onto in VR is actually in your hand.

Needless to say at this point, the virtual reality industry’s consumer ambitions haven’t quite panned out as expected. The enterprise space has found slightly more enduring success, though much of the enterprise use hasn’t expanded too far beyond “internal innovation hubs” and pilot programs. HaptX seems to have zeroed in on the same enterprise customer base as other VR startups, with a lot of its customers using the gloves in design and visualization processes. HaptX has moved away from marketing itself as a VR-only company and has expanded into robotics, reshaping its offering into a solution framed by real-world input and real-world output.

Alongside the funding announcement, HaptX is sharing that it has partnered with Advanced Input Systems to collaborate on “product development, manufacturing, and go-to-market.”

The company is focused on enterprise and unfortunately doesn’t seem to be building a mech suit for Jeff Bezos, although they sent me a great gif of him demoing the technology earlier this year at a conference.

Source: Tech Crunch Startups | HaptX grabs million to build a glove crammed with sensors

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

Today, we’re digging into a host of data concerning the East Coast venture capital scene, specifically looking into the performance of its two key startup markets.

It’s 12 degrees Fahrenheit as I write this in my office situated between Boston and New York City — a perfect vantage point for studying these vibrant tech ecosystems. Let’s see what the data tells us.

The information we’re examining today comes from White Star Capital (often via CBInsights), a venture capital firm that describes itself as “transatlantic” and takes part in seed, Series A and Series B rounds around the globe. The group last raised a $180 million fund that TechCrunch covered here, noting at the time that capital pool was “oversubscribed from an initial target of $140 million” and would be invested into “around 20 new companies from the new fund, writing opening cheques of between $1 million and $6 million.”

With boots on the ground in New York, White Star cares about the East Coast, so the fund’s put dossier on the region isn’t unexpected. What it includes, however, is.

We’ll start with NYC and its surprising 2019 before turning to Boston, digging into its super-giant venture totals and hearing from Founder Collective’s Eric Paley on the state of things in urban Massachusetts.

New York City

White Star’s report details record-breaking figures for NYC’s current year. Off of effectively flat deal volume (New York City sees around 775 venture deals per year at the moment, or a little more than two per day), the overgrown town should set record venture dollar volume in 2019.

Observe the following, astounding chart detailing the abnormality of 2019 from a comparative venture dollar perspective:

By smashing 2017’s local maximum, 2019 appears set to crush the city’s record — and rich — venture investment totals. The graphic also manages to point out (somewhat embarrassingly) that Gotham will manage to best a number of European countries’ aggregate venture dollar investments by itself this year.

That’s is a useful bit of context as in the United States, New York City is always Number Two to Silicon Valley. But, this chart argues, being number two in the number-one market is still a hell of a lot of capital.

Putting New York City’s venture into even sharper comparative perspective, observe the following table:

Source: Tech Crunch Startups | Despite winter’s chill, the Northeast’s tech ecosystem is white-hot

Scott Wolfe, chief executive officer of Levelset, the New Orleans-based money management and payment startup for contractors in the construction industry, always thought he’d be in the grocery business.

His family owned a number of grocery stores around New Orleans and he was readying himself to go into the family business when Hurricane Katrina hit.

As the family business faced significant losses in their stores, the construction and contracting service they’d built to develop the land the stores were on had a tremendous opportunity. Within the span of a year, Wolfe had pivoted the family’s operations to focus on renovations and restorations and launched fully into construction.

It was during that time that Wolfe saw the need for some sort of software service that could manage cash flow and payment for the tens to hundreds of small business contractors involved in getting a project done.

So he built Levelset to be that service.

Now the company has closed on $30 million in financing from Horizons Ventures, the investment firm backed by Li Ka-shing, who is one of the world’s wealthiest billionaire property developers.

When Bart Swanson, an advisor to Horizons, met Levelset through a mutual friend who did some investing around the New Orleans-based Tulane University ecosystem, he immediately felt it was an opportunity that the Horizons investment committee would understand.

“This is a global issue,” says Swanson. “Sixty-four percent of construction businesses fail in their first five years because they have nowhere to turn for help,” when it comes to ensuring payment.

For now, Levelset is focused on digitizing billing and payments and providing insights into who is actually on a job site and the responsibilities that those workers have on site, according to Wolfe.

“There’s a ton of investment that has gone into the field,” says Wolfe. “What has seen a lack of as prolific an investment are things behind the scenes outside of the field that happen in the office. This is the accountants and administrative workers who have to take the information that’s in the field and turn it into money.”

For developers like Cheung Kong Holdings, Li’s development business, the promise of Levelset’s software is a huge boon. The construction industry runs on small businesses that lack software and services to process payments quickly. The time it takes to deal with paperwork can delay a project and ultimately cost developers money.

Horizons was joined in the new round by S3 Ventures, Operating Venture Capital, Altos Ventures and Darren Bechtel of Brick & Mortar Ventures. As a result of the investment, Swanson will take a seat on the company’s board.

In a recent survey of contractors by Levelset and T-Sheets by Quickbooks, more than half of contractors stated they were not paid on time and had significant cash flow challenges, and more than 75% craved more transparency in the payment process. This is no surprise, given PWC’s working capital studies in the past decade demonstrating that construction industry payment speeds are the slowest of all (83+ days). 

“The effort required to get paid, and the cash stress put on contractors is unbelievable,” said Wolfe, in a statement. “The world’s biggest industry is full of small and medium businesses who are the fabric of our economy. It’s crucial that they can do their work without worrying about cash.”

Source: Tech Crunch Startups | Levelset raises million to improve money management for contractors in construction

Leapfin, a startup selling corporate finance tooling, announced a $4.5 million round this morning. The funding event was led by Bowery Capital, and included dollars from a number of former technology executives.

Before its newly announced investment, the company had raised just a small seed round. The small capital amounts may seem inconsequential, but they’re more strategic than anything. According to Leapfin CEO Raymond Lau, the company is running lean and keeping an eye on profitability.

After being founded in 2015 and starting commercialization of its product in 2018, the company is stepping a bit further out of the shadows this morning. Let’s talk about what it does, and why both its product and business philosophy are neat.

What it does

Leapfin helps companies track their revenue and cost of revenue expenses.

In more human terms, Leapfin helps companies track sales, and how much it costs to create and distribute its goods and services to customers. “Cost of revenue,” also known (roughly) as “cost of goods sold,” may sound like a jargony accounting term, but in reality it’s a bedrock business concept that anyone involved with startups needs to understand.

Let’s explain why. Once you deduct costs of revenue from revenue itself, you’re left with gross profit. That’s what businesses use to cover their operating costs. And, crucially, the larger a company’s gross profit is in relation to its revenue, the higher margin its revenue is; investors love high gross margin revenue.

In part, their high gross margins are why software startups are worth so much.

Back to Leapfin, its product is a shot at making business a more limpid process. In a call with TechCrunch, Leapfin’s Lau explained that many companies only have “one-in-thirty” visibility into their operations; that business owners only manage to fully collate their revenue and cost of revenue results monthly, meaning that the rest of the time they are flying at least partially blind.

The goal of Leapfin, according to Lau, is to provide a “single source of truth” for ongoing business results, using “robotic process automation” to help companies cut down on repetitive work. So Lepafin does two things: helps companies know where they stand financially, and saves them time on rote tasks that tend to come with accounting.

The company is pretty happy with its ability to sell its product so far. Lau told TechCrunch that it has found “very, very strong product market fit,” for example. Asked to describe when he felt that Leapfin had gelled with the market, Lau explained that in his view, product market fit is more “process” than a “tipping point,” but that he was confident in Leapfin’s product-market harmony when its customers began referring other companies (to a product that costs six-figures annually), and its sales cycle tightened.

Why the company is cool

Leapfin is run a bit differently from most SaaS companies that we cover. Instead of raising lots to invest in blow-out sales and marketing expenses, Leapfin is running pretty lean.

TechCrunch asked Lau why he only raised $4.5 million in the new round, which, given the product progress his company has made, felt modest. He said that the Leapfin staff “are outsiders in a way,” and that while his “peers are raising tens of millions,” his company could be profitable by the third quarter of next year. So Leapfin doesn’t need more money, and selling shares ahead of growth is an expensive way to raise capital.

Lau also said, however, that his company’s small raise “doesn’t mean that [it] won’t raise more down the road.” Another check in 2020 to ward off any downturn fears would make some sense. But Leapfin probably won’t sweat a crash too much, as the company keeps profitability and cash flow positivity “in sight,” according to its CEO.

Despite that, the company expects to hire quickly, expanding from around 20 people today to 50 by the end of next year. What we need next from Leapfin is an ARR number so we can vet just how much product market fit it really has.

Source: Tech Crunch Startups | Leapfin raises .5M to help companies track revenue while keeping its own profitability in view

Extra Crunch community perks have a new offer from voice meeting notes service, Otter.ai. Starting today, annual and two-year Extra Crunch members can receive 25% off an annual plan for Otter Premium or Otter for Teams.

Otter.ai is an AI-powered assistant that generates rich notes from meetings, interviews, lectures and other voice conversations. You can record, review, search and edit the notes in real time, and organize the conversations from any device. We also use Otter.ai regularly here at TechCrunch to produce transcripts and voice notes from panels at our events, and it’s a great way to easily organize and search the conversations. Learn more about Otter.ai here. 

To qualify for the Otter.ai community perk from Extra Crunch, you must be an annual or two-year Extra Crunch member. The 25% discount only applies to annual plans with Otter.ai, but it can be used for either the Premium or Teams plan. You can learn more about the pricing for Otter.ai here, and you can sign up for Extra Crunch here.

Extra Crunch is a membership program from TechCrunch that features how-tos and interviews on company building, intelligence on the most disruptive opportunities for startups, an experience on TechCrunch.com that’s free of banner ads, discounts on TechCrunch events and several community perks like the one mentioned in this article. Our goal is to democratize information about startups, and we’d love to have you join our community.

You can sign up for Extra Crunch here.

After signing up for an annual or two-year Extra Crunch membership, you’ll receive a welcome email with a link to sign up for Otter.ai and claim the discount. Otter.ai offers a free plan with capped minutes, and if you are interested in unlocking the full potential, you can purchase the annual plan with the 25% discount.

If you are already an annual or two-year Extra Crunch member, you will receive an email with the offer at some point over the next 24 hours. If you are currently a monthly Extra Crunch subscriber and want to upgrade to annual in order to claim this deal, head over to the “my account” section on TechCrunch.com and click the “upgrade” button.

This is one of several community perks we’ve launched for Extra Crunch annual members. Other community perks include a 20% discount on TechCrunch events, 100,000 Brex rewards points upon credit card sign up and an opportunity to claim $1,000 in AWS credits. For a full list of perks from partners, head here.

If there are other community perks you want to see us add, please let us know by emailing travis@techcrunch.com.

Sign up for an annual Extra Crunch membership today to claim this community perk. You can purchase an annual Extra Crunch membership here.

Disclaimer:

This offer is provided as a business partnership between TechCrunch and Otter.ai, but it is not an endorsement from the TechCrunch editorial team. TechCrunch’s business operations remain separate to ensure editorial integrity. 

Source: Tech Crunch Startups | Extra Crunch members get 25% off Otter.ai voice meeting notes

“We were in the back washing blenders so they could keep taking Snackpass orders,” recalls co-founder and CEO Kevin Tan. The team from order-ahead food startup Snackpass was willing to get their hands dirty to keep up with demand at one of their first restaurant partners, Tropical Smoothie Cafe on the Yale University campus.

Why were people so eager to pay for takeout through Snackpass? Because it lets them earn loyalty points to redeem for free food — both for themselves and as gifts for their friends. Sending people Snackpass rewards became a new way to flirt or show gratitude at Yale. And through the Venmo-esque Snackpass social feed, users could keep up with a fresh form of gossip while discovering restaurants.

“Anywhere someone is standing in line to order something, we can solve that with Snackpass,” says Tan. “Consumer spending will be social in the future.”

That future is already taking hold. Two years after launch, Snackpass is on 11 college campuses across the U.S., often boasting a 75% penetration rate amongst students within six months. It takes a cut of every order and keeps margins high because users pick up the food themselves rather than waiting for delivery. While other food ordering startups battle to offer discounts as marauding users deal-hop between apps, Snackpass keeps users coming back through its loyalty program.

Its momentum, retention and opportunity to expand from colleges to dense cities has now won Snackpass a $21 million Series A led by Andreessen Horowitz partner Andrew Chen. The round was joined by other heavy hitters, like Y Combinator, General Catalyst, Inspired Capital and First Round, plus angels, including musician Nas, NFL star Larry Fitzgerald and legendary talent agent Michael Ovitz. Building on Snackpass’ $2.7 million seed, the cash will go toward hiring up with the goal of reaching 100 campuses in two years.

“Takeout is an important market because it’s huge — also in the hundreds of billions — and fragmented,” writes Chen. “The opportunity complements the food delivery market in a big way: For the average restaurant, there are 6 takeout orders for every delivery order!”

“Its own language”

Like many of the best startup ideas, Snackpass was born out of the founders’ own needs at Yale. Slow and expensive food delivery services didn’t make sense for smaller orders like a coffee, ice cream or a pepperoni slice on campuses small enough for customers to walk or bike to the restaurant. Tan says, “I was dabbling in several side projects, including helping a friend who managed a local pizza shop build a website to help better reach the local student community.” He realized how tough it was for restaurants around colleges to retain and reward customers, especially as regulars graduated.

Tan joined up with neuroscience student and Thiel Fellow Jamie Marshall, who became Snackpass’ COO. “I had grown up calling in every order,” Marshall tells me. “Waiting in line didn’t make sense for me. I used every order-ahead platform and thought this was the future.” Jonathan Cameron, a serial entrepreneur who’d built his own order-ahead app called Happy Hour, rounded out the founding team.

Snackpass founders (from left): Jamie Marshall and Kevin Tan

Snackpass offers users a list of nearby restaurants from which they can order ahead, with special tags for ones offering deals. Menu items include counts of how many people have ordered them and how many rewards points you’ll earn buying them. You pay in the app, skip the line at the restaurant and grab your order from the counter. Each restaurant can configure their own rewards system with how much items earn and cost, such as giving you a free coffee for every 10 you buy.

Users can then spend their points to get themselves free menu items, or send a virtual Snackpass gift card to any of their phone contacts or people they find via search. This gives Snackpass a way to grow virally that most food apps lack. Thankfully, you can block people on Snackpass if they get creepy showering you with gifts.

Each purchase and gift on Snackpass shows up in its social feed unless you make it private. “That’s become its own language. People use it to flirt with each other, or bond and connect with someone new,” Tan tells me. “There’s some drama or intrigue there seeing who’s sending gifts to who. People even look at the feed in the way they look at someone’s Instagram to see what’s going on with them.”

Snackpass has also done some integration work specifically for the college market that sets it apart from other order-ahead and delivery services. It can sync with students’ campus meal plans so they can spend them through the app. And student groups from clubs to fraternities can pre-load and replenish accounts for their members. Snackpass works with the same organizations to launch on new campuses. “We host parties, sponsor tailgates and make it feel like a student-led effort so it grows organically across campus communities,” Tan explains. “These efforts, combined with the social feed which would give anyone FOMO if they’re not in the app.”

Network effect commerce

With all the competition in the space, restaurants can be inundated with apps to manage, some of which just exacerbate spikes in demand that overwhelm kitchens. “There is certainly a risk that local restaurants will start to get platform fatigue, finding that using some apps will take too big of a bite out of their margins,” says Tan. That’s why Snackpass built features that let restaurants batch orders and control how many come in at a certain time so dine-in patients and non-app users aren’t stuck with unreasonable delays.

Snackpass has recruited talent from Uber Eats and an advisor from Yelp’s executive team to help it navigate the tricky SMB sales process. One ace up its sleeve is that it can offer to send push notifications to announce recently signed partners or specials they’re launching, driving the new customers restaurants are desperate for. Tan says his startup is considering if it could charge for this kind of promotion down the line. Most customers who walk into restaurants are effectively in incognito mode, but Snackpass provides its partners with analytics to help them improve their own businesses.

“At the surface level there is a lot of competition in this space,” Tan admits. “The social aspect of the app has been the key differentiator for us. Other companies have been focused on creating the fastest, cheapest, most efficient delivery service, but it’s really hard to make those margins work and consumers are trained to shop around on different apps to get the best deal or fastest delivery time . . . Eating food is supposed to be fun and social, and our generation grew up online and in social networks. We’re combining the social aspect of eating with the utility of order ahead, which has helped us build loyalty and enable retention amongst our users.”

It will still be a battle to overtake long-running competitors like Allset, Level Up and Ritual, plus incumbents that offer takeout pickup like Uber and Grubhub. Logistics is a cut-throat business, and plenty of startups have already failed in the restaurant loyalty space.

Having Andreessen Horowitz’s support could give Snackpass some extra firepower. “A16z has better support and services for their portfolio companies than any other VC we’ve come across and they’ve delivered,” Tan tells me. “We knew that Andrew Chen understands growth and marketplaces from his blog and his Twitter.” That’s critical in a crowded space where such a precise balance of customer acquisition and lifetime value is necessary.

Snapchat, TikTok and Fortnite have all tapped into the youth market with a lighthearted nature that keeps users coming back until they develop network effect. Snackpass is managing to do the same, not with a messaging app or game, but a commerce platform. “We play up creativity, silliness and delight in areas where most companies focus on utility and convenience,” Tan concludes. “We built Snackpass for ourselves and our friends. We’ve carried on this philosophy: if something makes us laugh, we put it in the app.”

Source: Tech Crunch Startups | Snackpass snags M to let you earn friends free takeout

Risk and compliance startup Osano, which earlier this year debuted on the Battlefield stage at TechCrunch Disrupt SF, has raised $5.4 million in its Series A round.

The company told TechCrunch that the round was led by LiveOak Venture Partners and Next Coast Ventures, both of which invested in the company’s seed round. Its Series A fundraise also included participation from several individual investors, putting Osano’s total amount raised to date at $8.4 million.

The Austin, Texas-based startup bills itself as a privacy platform that helps businesses understand and address their compliance with state and international privacy laws, like Europe’s GDPR and California’s new statewide privacy law, set to take effect on January 1. One of the company’s flagship features is providing cookie and consent management on customer websites, allowing users to choose their privacy settings in their own language.

To date, the turnkey platform is used by more than 750,000 companies — including some Fortune 500 companies — to secure over 3.5 million websites.

Osano plans to use the new funds to further invest in research and development, marketing and hiring to meet “growing demand” for its service, the company said.

“We are proud to continue into the next round with our original investors,” said Arlo Gilbert, Osano’s co-founder and chief executive. “Heading into 2020, we are moving quickly to add talent to our growing team and to deepen Osano’s position as a leading data privacy platform.”

“There is a definitive need to bring transparency to the process of how companies deal with privacy, and we are very excited about taking on this challenge to empower both individuals and organizations,” said Gilbert.

Source: Tech Crunch Startups | Osano, a risk and compliance startup, raises M in Series A

Despite near-miraculous advances in the treatment of cancer in the U.S. and around the world, the disease remains the second leading cause of death in America.

The problem is that every manifestation of the disease is unique to the patient that is afflicted by it, because everyone’s body is actually different. Most cancer treatments are determined by their ability to cure the largest population afflicted with a particular cancer type.

As understanding of the disease has advanced, more targeted treatments are coming to market to treat particular types of the disease. And now, Xilis has developed a process that its founders hope will make those treatments even more effective.

Founded by Xiling Shen and Dr. David Hsu, two Duke University professors and researchers, the company’s technology is based on research conducted by the Dutch research scientist Hans Clevers. Clevers, who won the Breakthrough Prize for life sciences in 2004 and serves on the board of directors of Roche, helped refine a technique for growing small versions of human organs for research.

Shen and Hsu have taken that research and advanced it, developing a process that can cultivate and sustain tumors from a cancer patient — allowing physicians and pharmaceutical companies to develop even more tailored treatments that can respond to the particular type of cancer.

“Our technology creates 10,000 micro tumors from a single cancer biopsy which then tests which cancer treatments will or won’t work for a patient, saving them critical time in his/her cancer treatment plan,” said Shen in a statement. “Already in clinical trials, we have data showing our technology can successfully predict treatment success and finding new therapy for drug resistant patients.”

Shen and his co-founder first initiated clinical trials on their new discovery early in 2019. Their results were so promising that the two decided to form a company around the innovation and raise capital to accelerate the time-to-clinic so that patients could reap the benefits of these more targeted therapies.

Indeed, the technology is so compelling that Clevers, the progenitor of the company’s technology, has agreed to join the company as a co-founder and collaborate on future development, according to an interview with Shen.

“What we have invented is this microfluidics droplet,” says Shen. “We’re growing miniature organoids so these cancer cells are growing in a 3D tumor micro environment.”

To accelerate the commercialization of the technology, Xilis has raised $3 million in seed funding from investors including Felicis Ventures, an early investor in the multibillion-dollar cancer treatment technology developer Guardant Health, former NFL superstar Joe Montana’s Liquid 2 Ventures fund, along with Pear and 8VC.

While the near-term value of the company’s technology is in its ability to better target therapies for patients, longer term, there’s value in the data set that the company is amassing. “We’re accumulating a micro-organoid bank that pharma would love to test these things on,” says Shen.

The potential to save pharmaceutical companies millions of dollars to do initial testing on how effective a treatment is can’t be overlooked, according to Shen. Using the technology, pharma companies “can do massive drug screening at a much higher throughput with a much lower cost.” 

Source: Tech Crunch Startups | Xilis believes cultivating micro-tumors may hold the key to more effective cancer treatments

Like it or loathe it, Uber changed the face of modern urban transportation by providing a relatively pain-free way to order a car to take you from A to B. But the company’s growth has done more than catapult Uber into the ranks of the biggest (and most-watched) tech companies: it’s helped open the door to a new raft of transportation startups.

But while Uber’s aggressive growth has been fueled by huge fundraises and hefty losses, its approach is not the only way ahead. Blacklane, a transportation-on-demand startup from Berlin, provides a template for another kind of strategy, one based on minimal outside funding, a focus on very specific customer segments and slow growth that relies on partner ecosystems to achieve global reach.

“We’ve never been distracted. We have always wanted to be a channel player, largely playing a local game,” said CEO Jens Wohltorf in an interview in Berlin earlier this month.

Some have described Blacklane as something similar to what Uber was like when it first started out, and on the surface, there is some truth to that: users order cars through its app, and the vehicles are always “black cars;” larger sedans and comfort-oriented vehicles. But unlike Uber, which from its earliest days always traded on the idea of providing five-star service at an affordable price, Blacklane aims at the higher end of the market, targeting corporate workers, executives and those who have the means to pay extra for higher levels of service when they travel.

And its success has led to a whole new level of interest in the company.

“In the first couple of years, VCs always asked me the question of how we would react to the big ride-hailing players. How do we compete, and how could we be more similar?” said Wohltorf. “Today, it’s changed 180 degrees. Now the question is ‘what’s your strategy to be different?’”

Indeed, for those building or thinking about building or investing in a transportation-on-demand startup, it’s worth considering Blacklane’s example: for all of the outsized nature of biggies like Uber and Didi, Blacklane, with around $77 million in funding, is much closer to the average player in the world of transportation-on-demand.

Collectively, nearly $81 billion has been raised by 428 ride-sharing startups, according to data from Crunchbase. But it’s a very uneven spread: about 75% of that has been highly concentrated in about ten companies led by Uber and Didi (respectively raising around $25 billion and $21 billion), with the list rounded out by the likes of Grab, Lyft, Ola, Chinese trucking company Manbang, and bike companies like Ofo, HelloBike and Meituan.

If you take the rest of the funding and distribute it equally among the rest of the field, it works out to a significantly more modest $48 million per startup — with many raising far less than that (and some still significantly more, if not $25 billion more).

The most recent financials for the company cover 2017, when it reported revenues of 44 million euros and a net loss of 10.5 million euros. From what we understand, it’s managed to keep that net loss rate steady in 2018 and 2019 while revenues have continued to grow.

This also makes Blacklane a relatively rare thing in the ride-sharing world: a quiet but healthily growing startup.

The message here is that for the rest of the field, and for any other founders looking at building a transportation or on-demand-distribution-of-anything startup, there is an interesting lesson to be learned about whether it’s possible to build a long-term company in this space without going large like an Uber, and if so… how.

The concept for Blacklane first came to cofounders Jens Wohltorf and Frank Steuer in 2009 — the same year Uber was conceived, as it happens.

Source: Tech Crunch Startups | Blacklane is on the road to building a profitable on-demand transportation platform