Browsing Tag: Startups

VSCO, the popular photo editing app and Instagram rival, is the latest company to undergo layoffs attributed to the COVID-19 crisis, which has put a strain on venture-backed startups. According to a report from NPR, which was then confirmed by VSCO co-founder and CEO Joel Flory on LinkedIn, the company is laying off around 30% of staff, or 45 of its employees.

Though Flory didn’t reference the COVID-19 outbreak by name, his post described the rapid change to the economy which necessitated the layoffs.

“2020 was staged to be a year where we would continue to forward invest into our business,” Flory wrote. “Overnight our environment changed. We realized that we would need to shift towards running a self-sustaining business.”

In other words, VSCO is anticipating a future where venture capital is less readily available and is making the shift toward running a business that’s no longer reliant on outside capital or funding in order to operate. By laying off a portion of staff, VSCO believes it will be able to sustain its business for many years.

To date, VSCO has raised $90 million in outside funding, and sees its app used by more than 20 million active users per week. However, a smaller portion of those users are customers who pay for a VSCO Membership that offers an expanded array of features, tools, presets and other content. VSCO confirmed to TechCrunch in February 2020 that it had around 2+ million paid subscribers.

Late last year, VSCO had said it was on pace to surpass 4 million paid subscribers by 2020 and was approaching $80 million in annual revenue. However, these projections were tied to VSCO’s forward investment this year, and the shift towards becoming self-sustainable will impact these numbers, the company says.

PitchBook data valued the business at $550 million, NPR also reported — a number that’s made the rounds before, as well.

In 2020, VSCO has rolled out several features designed to better support video editing. It gave creators the ability to publish their video edits to the VSCO feed, and last month, for example, launched a more powerful and feature-rich video editing tool called Montage. The latter was meant to grow VSCO’s paid subscriber base, as it requires users to pay in order to save and publish their finished videos.

VSCO’s profile has also been raised beyond its core user base in recent months, after it became associated with a Gen Z meme that circulated on sites like TikTok.

Though perhaps not the marketing the company would have desired, the VSCO girl meme became a way to mock a certain type of girl — one who sports a messy bun, baggy shirts and scrunchies and carries around eco-conscious items like Hydro Flasks or metal straws. VSCO’s app for making your photos look good became associated with this persona, as it’s often used to filter and edit images in order to give them an aesthetic that teenage girls (VSCO girls) supposedly desired.

As for the layoffs, VSCO says its former employees will receive a minimum of seven weeks of severance pay, and a minimum of two months of COBRA health coverage. In terms of equity, VSCO is pro-rating stock option vesting and extending equity exercise periods post-term, it also notes.

Flory’s LinkedIn post additionally offered a way for those interested in hiring the laid-off VSCO employees to reach the company. He said the jobs@vsco.co email address could be used to make inquires about hiring its talent. The company will also be working to provide other job placement resources and support, it says.

“I am deeply saddened to let some incredible people go and am so grateful for everything they’ve done for VSCO and our community,” Flory wrote. “Our mission and vision remain unchanged. Our ability to provide a place for creative expression, inspiration and connection is even more important than ever right now,” he added.

Source: Tech Crunch Startups | Instagram rival VSCO lays off 30% of staff to reduce reliance on outside capital

Disrupt San Francisco 2020, the OG of startup tech conferences, takes place at Moscone West September 14-16. It’s an event you don’t want to miss, and we’re here to tell early-stage founders one of the best ways to get the most out of the Disrupt experience. Apply to compete in Startup Battlefield for a shot at the coveted Disrupt Cup and the even more coveted $100,000 prize.

Let’s pause here for an important message. We know COVID-19 has created many challenges, but Disrupt SF is still on schedule (keep tabs on our updates here). Like startup founders everywhere, we quickly learn where, when and how to pivot. Case in point, check out our new Disrupt Digital Pass option.

This epic pitch competition is the stuff of Silicon Valley legend. Cloudflare, Mint.com, Dropbox, Vurb, Get Around — these are just some of the many companies that have competed in Startup Battlefield. Here’s how it all works.

First things first. Applying, training and competing is 100% free. TechCrunch charges no fees and does not take any equity. Who can apply to compete in Startup Battlefield? Excellent question. You can apply — regardless of location or industry — if your startup clears these low bars:

• Your startup must be early stage
• You have an MVP with a tech component — software, hardware or platform
• You’ve received little to no major media coverage

TechCrunch editors closely vet every application and will choose roughly 20 of the most innovative startups. If you make the cut, your team will receive several weeks of intense training with our Startup Battlefield team. You’ll fine-tune your pitch, business model and live demo. No need to stress — you’ll be thoroughly prepped to impress.

On the big day, you’ll step onto the Disrupt Main Stage in front of thousands of influential attendees, investors and global media. Plus, we live-stream the event to the world on TechCrunch.com. You’ll be hard-pressed to find a more enthusiastic audience or a better launch pad for your startup.

Teams have just six minutes to pitch and demo to a panel of expert judges (highly regarded VCs and technologists). Judges follow up each pitch with a probing Q&A. Only four to six startups will make it to the finals for another round of pitch, demo and grill in front of a new set of judges.

From that elite set of finalists, one startup will emerge to win the Disrupt Cup, the $100,000 equity-free prize and massive media exposure and investor attention. Buckle up, because it can be a life-changing experience.

But keep this in mind — all Startup Battlefield competitors reap the benefits of standing in that bright media and investor spotlight. They also become part of the Startup Battlefield Alumni Community. These elite companies have collectively raised $9 billion and produced more than 115 successful exits (IPOs or acquisitions). Imagine the networking possibilities.

Disrupt San Francisco 2020 takes place September 14-16. Don’t miss your shot to launch your startup in a big, big way. Apply to compete in Startup Battlefield today. Come and show the world what you’ve got!

Is your company interested in sponsoring or exhibiting at Disrupt San Francisco 2020? Contact our sponsorship sales team by filling out this form.

Source: Tech Crunch Startups | Apply to compete in Startup Battlefield at Disrupt SF 2020

I recently got an email from a company that once sold me a pair of jeans. They wanted to talk about COVID-19. I’ve gotten a lot of these emails over the last few weeks, as more and more companies are blasting their contacts, expressing concern, making commitments and vowing that we will get through this together.

I used to run communications teams, so I get it; no one knows what to do these days, and all of us are looking for ways to help. But as comforting as it is to know my insurance company, food delivery service and apparel retailers are looking out for me, I find myself hoping that there’s more to the plan — that they are helping the people who actually need it (not me).

As an investor and advisor to founders, I’ve spent the last couple of weeks as part strategist, part therapist. This crisis is unlike anything that has come before in our lifetimes, but there are things we can learn from other crises and from each other to navigate the uncertainty ahead. This is not a post about layoffs or expense planning, although there are important things to say about both. Instead, this is a collection of ideas that have come out of brainstorming sessions I’ve had with startup founders over the last few weeks focused on how to think about sales and marketing in the time of COVID-19.

No one has a playbook for this. But we can experiment. We can stop a bunch of activity that was normal just weeks ago. We can learn from each other. We can plan for both short-term disruptions and long-term realities. And we can give each other some actionable steps to take at a time when everyone is trying to figure out the best way forward.

To that end, here are a few things I’ve brainstormed with founders, divided into three categories:

1) Things to reconsider or stop doing;

2) Strategies you may want to start using;

3) Places where you can double down.

Source: Tech Crunch Startups | Traditional sales and marketing strategies won’t see you through this crisis

Just a few weeks ago, Seattle-based small business SnapBar — which provides custom photo booth rentals and selfie stations for events nationwide — was thriving, getting ready for a full slate of spring and summer events. But amid business closures and shelter-in-place orders brought on by COVID-19, owner and father-of-three Sam Eitzen and his team of 18 had to get creative — quickly — to keep the company going. After Sam and his leadership team slashed their own salaries by 50% and held a nearly all-night brainstorm session, they pivoted SnapBar’s entire business strategy to ship and sell gift boxes packed with items crafted by local small businesses.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed on March 27 to help business owners like Sam via $350 billion in federal loans and grants. But major structural flaws and implementation issues are preventing these loans from getting to business owners quickly — if at all — and providing the level of help they need.

Small businesses and their employees have already run out of time. Data from my company Gusto, which provides payroll, benefits, compliance and HR software to 100,000 small businesses, shows that layoffs increased by more than 1,000% from February 2020 to March 2020. There was also a 9% gap in overall wages paid to small business employees in March.

Source: Tech Crunch Startups | Small businesses are out of time, but COVID-19 aid comes with massive roadblocks

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

Today we need to talk about what we’re hearing from the private markets and the public markets, and how different their messages seem to be.

The public markets through yesterday were on the bounce, rising sharply from recent lows, driven by negative news concerning COVID-19 and its ensuing economic damage. As TechCrunch noted yesterday, major American indices had seen their value sharply recover from lows recorded earlier in the year. This was odd, as the news from COVID-19 is far from good — America is still the country with the highest rate of new, confirmed infections and related deaths by some margin — and the economic damage stemming from the nation’s belated efforts to stem the pandemic at home piles up.

You can easily read optimism in the stock market: that the COVID-19 infection footprint at home isn’t as bad as some models indicated, that social distancing is working, and that the economy will quickly rebound from this bother. Ask around the private markets, however, and you’ll hear a very different narrative.

Yesterday while kicking over the business-focused modern software market (enterprise SaaS, if you prefer) with Shasta Ventures‘ Jason Pressman, we discussed the state of affairs for private companies that he’s seeing from his perch inside the startup machine. Taking his notes into account, along with those of other investors that we’ve spoken to recently, it’s hard to understand the level of optimism that public markets are signaling.

Not that Pressman is a pessimist, it would be difficult to be a net-gloomy venture capitalist on the whole, given the risk profile of the investments they make. But some VCs who have invested through prior downturns are comfortable being candid about what they are seeing from private companies, those inside their portfolios and out.

This morning let’s explore the public-private optimism gap for the second time. The last time we undertook this particular theme, public investors were being pessimists and private investors appeared unseasonably bullish. It’s unlikely that there is room for both views to be correct.

Smiles, frowns

Source: Tech Crunch Startups | As stocks recover, private investors aren’t buying the hype

Mobile messaging startup Attentive continues to bring in new funding.

The startup raised a $40 million Series B last summer, followed by a $70 million Series C at the beginning of this year. Today it’s announcing that it’s extended the Series C by another $40 million, bringing the total round size to $110 million.

CEO Brian Long (who previously founded TapCommerce with his Attentive co-founder Andrew Jones and sold the company to Twitter) told me that the new funding closed just a week ago. He said the money comes from institutional investors who had wanted to participate in the Series C, but “for whatever reason, the timing didn’t work out.”

Then, as the startup wanted to invest in new areas — particularly in response to the COVID-19 pandemic — Long reached out again. Once they saw Attentive’s numbers for the first quarter of 2020, the firms were willing to invest.

Apparently, the number of new customer sign-ups is only increasing, with Attentive now working with more than 1,000 businesses. Companies like Coach, Urban Outfitters, CB2, PacSun, Lulus and Jack in the Box use the platform to manage their mobile messaging, with tools around adding text message subscribers, creating engaging messages and tracking the results of those campaigns.

And while we’re at the beginning of what’s likely to be a dramatic slowdown in advertising and marketing, Long suggested that even if businesses pull back on acquiring new customers, they’ll still need to maintain a relationship with existing ones.

“CRM is such a critical channel for companies … email and text are the last thing you would shut down,” he said.

Sequoia Capital Global Equities and Coatue are the new investors in the Series C. Sequoia’s venture fund already led (or co-led) the Series C and the Series B, but Long said he was interested in working with the firm’s crossover fund — and with Coatue — partly because they invest in public companies as well.

Not that he has immediate plans for Attentive to go public, but he said, “It just creates optionality,” so that there are fewer financial pressures regardless of the route the company takes.

Other investors in the Series C include IVP, Bain Capital Ventures, NextView Ventures, Eniac Ventures and High Alpha.

“Attentive’s rapid growth is an indicator of how consumers are eager to find a more direct, personalized and efficient channel to interact with businesses,” said Jeff Wang, managing partner at Sequoia Capital Global Equities, in a statement. “We’ve been impressed by how quickly Attentive’s business has scaled, its strong customer momentum, and the expertise of the team. We are thrilled to increase Sequoia’s partnership with Attentive through our Global Equities fund.”

As for how Attentive is responding to COVID-19, the startup plans to create funds to help customers navigate the economic fallout. There will be more details released in the coming weeks, but Long said the idea is to launch funds focused on the e-commerce/retail, food/beverage and educational sectors, providing free access to Attentive tools and services “to help those companies get recharged.”

Long added that he hopes to grow Attentive’s headcount from 260 employees to more than 400 by the end of this year.

Source: Tech Crunch Startups | Attentive raises another M for mobile messaging, will invest in helping customers respond to COVID-19

Frame AI, a New York City startup that uses artificial intelligence and machine learning to help companies understand their customers better across multiple channels, announced a $6.3 million Series A investment today.

G20 Ventures and Greycroft led the round together. Bill Wiberg, co-founder and partner at G20, will join Frame’s board under the terms of the deal. The total raised with an earlier seed round is over $10 million, according to the company.

“Frame is basically an early warning system and continuous monitoring tool for your customer voice,” Frame CEO and co-founder George Davis told TechCrunch . What that means, in practice, is the tool plugs into help desk software, call center tooling, CRM systems and anywhere else in a company that communicates with a customer.

“We then use natural language understanding to pull out emerging themes and basically aggregate them to account and segment levels so that customer experience leaders can prioritize taking actions to improve their relationships,” Davis explained.

He believes that customer experience leaders are being asked to do more and more in terms of talking to customers on ever more channels and digesting that into useful information for the rest of their company to be responsive to customer needs, and he says that there isn’t a lot of tooling to help with this particular part of the customer experience problem.

“We don’t think they have the right tools to do either the listening in the first place or the analysis. We’re trying to make it possible for them to hear their customers everywhere they’re already talking to them, and then act on that information,” he said.

He says they work alongside customer data platforms (CDPs) like Segment, Salesforce Customer 360 and Adobe Real-time CDP. “We can take the customer voice information from all of these unstructured sources, all these natural language sources and turn it into moments that can be contributed back to one of these structured data platforms.”

Davis certainly recognizes that his company is getting this money in the middle of a health and economic crisis, and he hopes that a tool like his that can help take the pulse of the customer across multiple channels can help companies succeed at a time when a data-driven approach to customer experience is more important than ever.

He says that by continuing to hire through this and building his company, he can contribute to restarting the economic engine, even if in some small way.

“It’s a bleak time, but I have a lot of confidence in New York and in the country, in the customer experience community and in the world’s ability to bounce back strong from this. I think it’s actually created a lot of solidarity that we’re all going to find a lot of new opportunities, and we’re going to just keep building Frame as fast as we can.”

Source: Tech Crunch Startups | Frame AI raises .3M Series A to help understand customers across channels

Contactless transactions have become a major priority at a time when people all around the world are minimising their contact with others outside their households to slow down the often-insidious spread of the novel coronavirus. But if a lot of the consumer focus lately has been on things like payments or deliveries, that’s overlooking the fact that the “contactless” paradigm has been a big trend for years already.

Today, a London-based startup building tools to enable virtual identity verification — that is, a way of verifying you without requiring in-person, face-to-face interactions — is announcing a big round of funding.

Onfido, which uses AI to “read” a person’s identity documents and then uses facial recognition and other datapoints to verify that a person is who she or he says they are online — customers for its tech include major banks, government bodies, and businesses doing recruitment: any organization running parts of its processes virtually — is today announcing that it has raised $100 million.

It plans to use the money in a few ways. First, to expand its existing business, which has been growing especially strong in the US. Second, to fill out its ambition of building an alternative “identity verification” layer of the internet to replace credit bureaus, Facebook logins and other established channels. And third, to work on a new set of use cases that are now being talked about even more because of the pandemic, ranging from virtual voting and passport/visa applications through to secure ways of carrying out contact tracing to track the spread of a virus without compromising user privacy.

Ultimately, across all three, the aim is to solve what it sees as a long-standing problem on the internet and digital platforms overall: verifying people are who they say they are, and doing so in a way that doesn’t compromise a user’s privacy and security.

“Identity is broken and needs fixing,” Husayn Kassai, the CEO and co-founder, said in an internet. “That’s been a large part of our focus, and as time goes on, our processes in digitisation, privacy and security have been proven out in parallel with how the world is shifting.”

The round is being led by TPG Growth, the deep-pocketed firm that has backed the likes of Airbnb and Uber (which both run the kinds of businesses that need the kind of identity verification services that Onfido builds) over the years with billions of dollars of investment.

Onfido is not disclosing its valuation with this round but Kassai confirmed that it is definitely an upround. Onfido has now raised $200 million in total, with its last round — $50 million almost exactly a year ago — including Microsoft, Salesforce and SBI (once a SoftBank affiliate, now apparently separate) among the investors.

Kassai said that he started raising this round in January, just as the novel coronavirus was kicking off in China and eventually everywhere else around the world. The final stages of this deal were all done virtually. Between then and now, he said that business — already growing at a healthy clip — has picked up a new, urgent set of verticals that need to consider faster and safer ways to identify and verify users.

Onfido’s business up to now had largely been focused on helping rapidly scaling businesses like transportation-on-demand companies to help add on more drivers to their books while making sure they pass all their safety and other checks. More recently, organizations in healthcare, remittance and payments and non-profits verifying people who want to volunteer in relief efforts have emerged as key customers. These have respectively spiked 4x, 1.3x and 6x in recent weeks. The idea is that organizations using Onfido can speed up the time it takes to identify people to get them enrolled into healthcare services, or sending money, or helping those in need.

“About 750,000 people have volunteered to help the NHS in the UK,” he said, referring to the effort that the UK government set up to get more people to deliver medications and food, and help out hospitals in non-clinical capacities. “That’s great, but why wait for weeks to be verified? If you can sign up for a bank in moments why do you have to wait a week [or more] to help in a health crisis?”

While Onfido continues to build out this aspect of its business — R&D based in London, with a lot of the business team in California — Kassai said it is also working on trials of new kinds of identity and verification services that are still in development.

In essence, these are concepts for verifying without physical presence that have been considered for a while now for other reasons — be they more convenience for users, or cost-cutting, or to keep better digital track records of a process — that have taken on a new sense of urgency during the current pandemic.

Specifically, there are trials underway for working on secure, virtual voting; helping to verify people for passport and visa applications remotely; and ways of doing contact tracing of users for those trying to track and contain outbreaks of the novel coronavirus, or whatever virus comes next on the horizon.

The idea with these, Kassai said, is that there needs to be a way of identifying users without requiring them to share personal or other sensitive details every time, and that’s where the company’s ambition in building an “identity layer” comes in: if a company like Onfido can verify a user once, and then discard the information, it can then simply have a record of the person and not require documents or other personal information each time.

This is the theory, at least. There will be a number of regulated industries that will still have to hold on to personal information. But at a time when security breaches have chipped away at our various personal details and led to a vast wave on online crime — identity fraud is the most commonly committed crime in the US, Onfido points out, and one of the fastest growing in the world, with $2 trillion of related money laundering resulting from that — this could be a compelling idea to consider.

“Onfido’s use of AI to develop market leading tech is extraordinary,” said Mike Zappert Partner of TPG Growth, in a statement. “There is enormous demand for secure and simple identity verification and authentication across major sectors and we see Onfido becoming the new standard for digital access. Their team has done a remarkable job in a relatively short period of time, and we look forward to partnering with them to continue their momentum into new use cases and geographies.”

Source: Tech Crunch Startups | Onfido, the AI-based ID verification platform, raises 0M led by TPG

Credit Kudos, a U.K. fintech using open banking to provide more accurate credit scoring, has raised £5 million in Series A funding.

Leading the round is AlbionVC, which is joined by TriplePoint, Plug & Play Ventures, Ascension Ventures’ Fair by Design fund, and Entrepreneur First (EF). In addition, a number of fintech angels participated.

They are Christian Faes (LendInvest), Tom Stafford (DST Global Managing Partner), Charlie Delingpole (ComplyAdvantage and MarketInvoice), Will Neale (Grabyo and Fonix Mobile) and Daniel Gandesha (PropertyPartner).

Ed Lascelles, from AlbionVC, takes up a seat on the Credit Kudos board alongside the company’s co-founders Freddy Kelly (CEO) and Matt Schofield (CTO).

Calling itself a “challenger credit bureau,” Credit Kudos is using open banking to replace what it calls “traditional, narrow methods” of credit assessment in order to make credit fairer and more accessible. As it stands, credit scores are typically a blackbox and based on very primitive assumptions about a person’s financial health.

By securely analysing bank account data via open banking, Credit Kudos says it enables lenders to make faster and more informed credit decisions, while also reducing defaults — and, crucially, at a significantly lower cost than less scalable methods of assessment.

“Traditionally, credit scores are calculated based on past borrowing history and a few other simple measures such as being on the electoral roll and frequency of credit applications,” explains co-founder and CEO Freddy Kelly. “These existing scores are a very weak signal of financial health as they don’t consider an individual’s day-to-day income and expenditure. Because of this, many borrowers are forced to pay higher interest rates or are rejected entirely”.

Kelly says that by using open banking data provided by customers when they apply for credit, Credit Kudos is able to create a far more accurate picture of someone’s financial health and creditworthiness. “We do this by analysing past banking transaction data alongside factors such as whether they repaid on time,” he says. “We have built a platform that allows lenders to integrate open banking data into their existing processes in order to make more accurate decisions and reach a far wider audience”.

An alumni of company builder program EF, last year the startup on-boarded over 50 new lenders ranging from FTSE100 firms to independent credit unions and community finance vendors. Most recently, Credit Kudos has partnered with a number of credit intermediaries including ClearScore, CarFinance 247, and Mojo Mortgages. This is seeing customers use their bank data to secure better offers across unsecured loans, car finance and mortgages.

Meanwhile, Kelly cites traditional credit reference agencies (CRAs) in the U.K., such as Experian, TransUnion and Equifax, as its main competitors. “Each of the existing CRAs provides a standardised credit dataset based on past borrowing behaviour, sometimes referred to as the FICO model,” he tells me. “However, Credit Kudos is the first regulated challenger in the market that is putting control in the hands of borrowers by allowing them to share their bank transaction data through open banking”.

To that end, Credit Kudos’ revenue model is simple enough. The fintech startup charges lenders a monthly fee for its data based on the volume of transactions they process.

Source: Tech Crunch Startups | Credit Kudos raises £5M Series A to use open banking for credit scoring

French startup Slite has raised an $11 million Series A round led by Spark Capital with existing investors also participating. Slite is a sort of multiplayer Evernote. It lets you collect and organize documentation, create shared documents and build a company handbook.

Many companies struggle to keep a single source of truth when it comes to corporate policies, project documentation and product roadmaps. Services like Google Docs and Dropbox Paper have partly solved this issue by transforming documents into shareable links.

But it’s a mess as you have to grant access to the right people, share folders with your team and dig around multiple documents to find what you’re looking for.

A new category of tools have solved that issue by expanding beyond documents to create a knowledge base for your company. Confluence and Notion are particularly popular among tech companies for instance.

Slite wants to build a product that is as simple to use as Google Docs but as powerful as Confluence. Companies with hundreds or thousands of employees should be able to use it without ever feeling lost.

“[Slite] can be used by literally everyone in the company, by the engineering team of course, but also by the support team, operations team, marketing team, etc.” co-founder and CEO Christophe Pasquier told me.

A Slite document can contain text, tasks, tables and links to other documents. You can create a wiki-like experience for your most essential documents.

You can organize documents by channel, which lets you manage permissions easily. A channel can be your entire company, a department in particular or people working on a new project across multiple departments.

And because everything is centralized in the service, you can search across multiple documents and channels. You can also create templates that you can easily reuse across multiple meetings for instance. It could be useful for monthly reports as well.

When it comes to editing a document, multiple people can edit a document in real time. You can mention other team members to send them a notification, see previous versions of a document, create a link and share it on other services.

Slite has attracted 4,000 companies, including Airbnb, Spotify and WeTransfer. The startup had raised $4 million before today’s funding round and participated in Y Combinator a couple of years ago.

Source: Tech Crunch Startups | Slite raises million for its internal notes tool