Browsing Tag: Startups

Just a few months after closing a new $185 million fund to continue backing early-stage European startups, Blossom Capital, the VC firm founded by Ophelia Brown, is announcing a new angel investment program seeking to back European unicorn alumnus.

Dubbed “Cultivate,” the new program looks to create a 30-strong angel network made up of founders or operators from European unicorns or those with a European HQ, who will be tasked with backing alumni starting up.

This idea is to act as a catalyst for a more robust angel ecosystem in Europe, and in turn trigger a virtuous cycle as employees inevitably leave successful companies to hopefully build the next generation of European unicorns, backed by experienced operators.

At launch, the Cultivate angel network includes Des Traynor, co-founder and Chief Strategy Officer at Intercom, Guillaume Pousaz, CEO and founder of Checkout.com, Nilan Peiris VP Growth at Transferwise, and Shakil Khan, an early investor in Spotify. Additional angels are expected to join in the coming months.

“In the first year of the program, we’ve just made it available to people spinning out of unicorns,” Ophelia Brown tells me. “And so if you know you’re the CEO of Intercom or the CEO of Checkout, you’re going to have people leave your company, that’s just a fact, and you hope that they’re gonna go off and start something great. So they’re sourcing, in that they can refer either their former employees or anyone else that they meet building a startup, but they’re not going to be spending their day to day sourcing. Blossom is helping with the sourcing as well”.

Over the next 12 months, Blossom says it aims to invest a total of $5 million via the Cultivate program into 20 startups in Europe, with a focus on seed and pre-seed (as apposed to Blossom’s Series A sweet spot). Each startup will get an equal investment of $250,000, although individual angels are invited to make additional co-investments, too. Beyond capital, Cultivate backed founders will be given access to the angel network throughout the year for insights, advice and learnings.

“This is different [from an angel scout program] in that the angels are all acting in concert together,” explains Brown. “They will review the applications as a group and make a decision based on that. I think it’s [the] first of its kind in that it sits somewhere between a scout program and something like Y Combinator, because with YC, the power’s in the network. And we’ve kind of taken the best of both and made it fit for Europe”.

Asked why founders might choose Cultivate over applying to YC, Brown is quick to heap praise on the renowned Silicon Valley accelerator program, but says it doesn’t necessarily make sense for startups in Europe.

“For lots of European businesses that are building their core in Europe, why would you want to move to the valley for that period to come back to build in Europe? It’s disruptive,” she says. “And also I think people are beginning to realise that the 7% tax that YC takes is actually significant when you’re doing future rounds in terms of how diluted it could be. So I think YC is no doubt a great program. Like, it’s absolutely amazing, but it’s not one size fits all. And certainly, for European founders, we wanted them to get access to founders who have experience of scaling businesses in Europe. It’s a different ecosystem”.

On that note, Brown says she hopes to grow the Cultivate angel program over time. This may well include opening it up beyond unicorn alumni, once the concept it proven, and hopefully inspiring the angel network to take on a life of its own.

“Europe really lacks an angel ecosystem in the way that we need it to exist,” adds the Blossom founder. “And so we hope that we spawn the first group and then as they feel comfortable, they’ll go and do it independently of Blossom”.

Source: Tech Crunch Startups | Blossom Capital’s ‘Cultivate’ is an angel program seeking to back European unicorn alumnus

DeHaat, an online platform that offers full-stack agricultural services to farmers, has raised $12 million as it looks to scale its network across India.

The Series A financial round for the eight-year-old Patna and Gurgaon-based startup was led by Sequoia Capital India. Dutch entrepreneurial development bank FMO, and existing investors Omnivore and AgFunder, also participated in the round. The startup, which began to seek funding from external investors last year, has raised $16 million to date and $3 million in venture debt.

DeHaat (which means village in Hindi) eases the burden on farmers by bringing together brands, institutional financers and buyers on one platform, explained Shashank Kumar, co-founder and chief executive of the startup, in an interview with TechCrunch.

The platform helps farmers secure thousands of agri-input products, including seeds and fertilizers, and receive tailored advisory on the crop they should sow in a season. “We have built a comprehensive database of crop tests to offer advice to farmers,” he said.

DeHaat, which employs 242 people, also helps them connect with 200 institutional partners to provide farmers with working capital, and when the season is over, helps them sell their yields to bulk buyers such as Reliance Fresh, food delivery startup Zomato and business-to-business e-commerce giant Udaan.

DeHaat today operates in 20 regional hubs in the eastern part of India — states such as Bihar, Uttar Pradesh, and Jharkhand — and serves more than 210,000 farmers, said Kumar.

Shashank Kumar, Amrendra Singh, Adarsh Srivastav and Shyam Sundar Singh co-founded DeHaat in 2012

The startup has developed a network of hundreds of micro-entrepreneurs in rural areas that distribute agri-input goods to farmers from their regional hubs and then bring back the output to the same hub.

“We have an app in local languages and a helpline desk that farmers, many of whom don’t own a smartphone, use to reach out to us and explain their pain points and needs,” he said.

DeHaat does not charge any fee for its advisory, but takes a cut whenever farmers use its platform to buy agri-inputs or sell their crop yields.

The startup will use the fresh capital to extend its network to 2,000 rural retail centres, on-board more micro-entrepreneurs for last-mile delivery and reach 1 million farmers by June of next year, said Kumar. DeHaat is also working on automating its supply chain and developing more sophisticated data analytics, he said.

At stake is India’s agriculture market that is worth $350 billion and serves nearly 100 million small and independent farmers, said Abhishek Mohan, VP at Sequoia Capital India, the VC fund that writes more checks than anyone else in the country.

“This industry is on the brink of a massive transformation thanks to ease of regulation, farmers getting organized and increasing penetration of smartphones. DeHaat is leveraging these trends to build the next-gen product in agricultural supply chain,” said Mohan in a statement.

“The tipping point that led to Sequoia India’s decision to partner with them was the field visit, where the farmers expressed how proud they were to be associated with a platform they felt truly worked in their favour. This impact and deep brand loyalty stems from the leadership team’s razor-sharp focus, deep empathy and fine execution,” he added.

Source: Tech Crunch Startups | Agritech startup DeHaat raises M to reach more farmers in India

Business at Tushy is booming.

While the circumstances that led to the boom are sobering, the bidet company needed to adapt its strategy after seeing an uptick in business amid the COVID-19 pandemic. Other companies in this cohort include video conferencing service Zoom, meal kit service Blue Apron and Facebook, thanks to its social network, video hardware Portal and Oculus Quest VR headset. These companies all have something in common — they offer solutions to problems that, until recently, were not all that urgent.

Founded in 2015 by Thinx founder Miki Agrawal, Tushy aims to replace toilet paper, CEO Jason Ojalvo tells TechCrunch. Ojalvo, who joined the company as CEO in 2018, says North America has been a holdout when it comes to bidets. As a result, the nation flushes about 15 million trees down the toilet every year.

Tushy, which has raised $2.9 million since its founding, has been profitable for the last two years. That’s in part thanks to the company’s focus on sustainability — not just from an environmental standpoint, but from a business one, Ojalvo says. That means not over-hiring or spending too much on marketing.

“We’re really careful about doing it in a way so we won’t explode like some other direct-to-consumer companies can do when they raise too much money and they over-hire and then they have to let people go,” Ojalvo says. “That’s just a debacle that I’ve seen first hand and I don’t want to be part of it. Not only do I not want to be part of it but I don’t want to be the leader of the company that does that.”

Prior to the coronavirus pandemic, Tushy saw its growth double year-over-year. Ojalvo says that’s partly been a result of having customers who evangelize on their behalf. Fast-forward to around March 9, when sales really started to double beyond the norm; a few days later, Tushy was having days where it brought in $500,000 in sales.

Source: Tech Crunch Startups | Bidet startup Tushy scales up to meet demand amid toilet paper shortage

“Our real focus is on democratizing mental healthcare,” says SonderMind co-founder chief executive, Mark Frank.

His company, founded back in 2017, is having a moment. With the restrictions and economic stresses caused by the government’s efforts to mitigate the spread of the COVID-19 epidemic in the U.S., demand for mental health services is soaring. And it’s compounding what was already a mental health crisis in the U.S. 

A 2019 article from Bloomberg Businessweek laid out the scope of the problem in stark terms. In 2017, 47,000 people died by suicide in the U.S. and there were 1.4 million suicide attempts — a suicide rate that’s the country’s highest since World War II, according to the Centers for Disease Control and Prevention. Drug overdoses, another measure of the nation’s anguish, killed 70,000 people in 2017. Another 7% of U.S. adults reported suffering at least one major depressive episode in 2018.

Taken together, the data points to a tremendous health problem. One that the current healthcare system is only now grappling with.

SonderMind’s chief executive sees his company as part of the solution.

Most mental health practitioners don’t operate within a healthcare network or take insurance, which means that the only folks with access to care are the ones that can afford the high price of therapy. SonderMind changes that equation by offering practitioners a toolkit and back office services so they can bill insurance providers and take care of the operational side of running a healthcare practice. It also acts as a funnel, gauging the needs of potential patients and connecting them to the therapists that are best suited to provide them the care they need. That lets practitioners focus on seeing patients, the company said.

The company currently counts 500 providers on its marketplace, which operates in Colorado, Arizona and Texas, and has raised $27 million in its latest round of financing to extend its services to other parts of the U.S.

The San Francisco-based investment firm General Catalyst led the financing, which also included additional new investors F-Prime Capital and participation from previous investors like the Kickstart Seed Fund, Diōko Ventures (managed by FCA Venture Partners) and Jonathan Bush. 

“This financing provides the fuel to support our growth objectives and advance our mission to make behavioral health more accessible, approachable and utilized by building a modern marketplace that holds great appeal to both clinician and patient,” said Frank in a statement.

The investment extends General Catalyst’s funding into healthcare services in recent years and represents a continued emphasis on healthcare services for the firm. “Healthcare is obviously a really important thesis for GC as a whole,” says Holly Maloney, a managing director at General Catalyst. “This is going to be one of the largest value drivers for VC this decade.”

General Catalyst already had a robust portfolio of healthcare-focused companies — including Livongo, OM1 and Oscar Health.

For Maloney, the investment in SonderMind grew out of the firm’s exposure to mental health investment through another portfolio company, Mindstrong Health. “Mindstrong forced us to explore… access to care and finding care,” says Maloney. 

The General Catalyst investor sees the investment in SonderMind as also helping to open doors for more people to join the profession.

“It helps people to start their business for sure. It helps more people pursue it as a career path,” she said. And that’s good for a country where more mental health professionals and better access to care are desperately needed. 

Source: Tech Crunch Startups | As demand for mental health services soars, SonderMind raises million to expand its services

Airbnb said Monday that it has raised $1 billion in debt and equity from private equity firms Silver Lake and Sixth Street Partners, even as the online rental marketplace has seen its business plummet due to the COVID-19 pandemic.

Terms of the deal were not disclosed. It’s unclear how this funding might alter Airbnb’s previously shared plans to go public.

COVID-19, the disease caused by coronavirus, prompted governments throughout the world to issue stay-at-home orders, triggering a wave of cancellations in the travel and hospitality industries. Airbnb emphasized that the funds would support its ongoing work to invest over the long term, a statement aimed at couching this raise as strategic and not a bailout in troubled times. 

“While the current environment is clearly a difficult one for the hospitality industry, the desire to travel and have authentic experiences is fundamental and enduring,” Silver Lake co-CEO and managing partner Egon Durban said in a statement. “Airbnb’s diverse, global, and resilient business model is particularly well suited to prosper as the world inevitably recovers and we all get back out to experience it.”

Airbnb CEO Brian Chesky acknowledged Monday that while the desire to connect and travel has been reinforced during this time, the “way it manifests will evolve as the world changes.”

Airbnb is betting how and where people work will evolve. As a result, the company said it will direct its attention and new funds toward three core products: hosts, long-term stays and Airbnb experiences.

Last month, Airbnb said it would direct $250 million to help hosts who have been impacted by COVID-19. The funds will be used to pay a host 25% of what they would normally receive through their cancellation policy if a guest cancels a reservation due to COVID-19 between March 14 and May 31. Airbnb said this policy applies retroactively to all cancellations during that period.

The move was an attempt by Airbnb to make amends to its hosts who complained that the company’s policy would allow guests to cancel reservations and receive a full refund. That policy, which is still active, lets guests who booked reservations on or before March 14 that begin anytime on or before May 31 to cancel and receive a standard refund or travel credit.

Source: Tech Crunch Startups | Airbnb turns to private equity to raise billion

Looks like things haven’t gone completely smoothly with Quibi‘s launch.

The issue appears to have been resolved, but the Quibi customer support account tweeted this afternoon that “some users may be experiencing problems with the Quibi app,” only to add an hour later that “Users should once again be able to use the Quibi app normally. Thank you for your patience.”

It’s not clear how widespread the outage was, but according to The Verge, one staffer saw an error screen and was unable to browse the app, while another was unable to create an account. The app seems to be working normally as I write this shortly after 4pm Eastern.

If nothing else, it’s a reminder that reliably delivering streaming video is hard, even for a startup that’s raised $1.75 billion. Heck, even Disney experienced widespread streaming issues when it launched Disney+ in November. (It all worked out fine.)

A quick catch-up for those of you still wondering what Quibi even is: It’s a short-form video service founded by Hollywood executive Jeffrey Katzenberg and led by CEO Meg Whitman (previously CEO of Hewlett Packard Enterprise and eBay).

The app is launching with nearly 50 shows today, all of them created specifically for mobile, with episodes that are less than 10 minutes long. After a 90-day free trial, it’ll cost you $4.99 with ads or $7.99 per month without ads.

Source: Tech Crunch Startups | Quibi had a launch day outage

While a number of startups have been hard hit by efforts to curb the spread of the COVID-19 virus, refurbishing firm Back Market is showing increased growth globally.

The Paris -based startup encourages customers to send in their old devices so they can be refurbished and resold into the e-commerce secondhand market. The growth achieved in the midst of the COVID-19 crisis is partly due to increased laptop sales as people seek better devices to work remotely.

For people who are unsure whether refurbished products are reliable, Back Market permits customers to send in old devices, exchange them for newer versions and pay the difference. CEO Thibaud Hug de Larauze said this payback service is currently possible only in France, but starting in Q2, it will be available in other markets.

Founded in 2014, Back Market has raised a total of €48 million in funding over two rounds, most recently a Series B in June 2018. The company is profitable and reportedly still has money to spend from its last funding round.

“We don’t release the gross merchandise volume, but it’s a three-digit growth rate,” Hug de Larauze told TechCrunch. “We saw an increase in demand for laptops, printers and other devices needed for working at home. Demand for refurbished phones is going down as people seek to get the first necessity items, like food for their situation.”

Over the past two weeks, Back Market saw skyrocketing demand from Italy, a nation with a high coronavirus death toll where citizens were warned they would be confined to their homes for four weeks.

Another factor that helped the platform’s growth: Smartphone brands like Apple and Samsung closed their retail stores, a move that turned Back Market into a major supply channel. While offline retailers and carriers are shut down in Europe, Hug de Larauze says Chinese offline retailers and refurbishing factories are starting to get back to work.

Source: Tech Crunch Startups | COVID-19 crisis spurs triple-digit growth for refurbishing startup Back Market

TechCrunch confirmed today that BounceX (the firm is rebranding this year) has executed layoffs and salary cuts in the wake of recent COVID-19-led economic disruptions.

Many startups are undergoing staff cuts as the domestic and global economies slow, making individual reductions less newsworthy as the layoff tally rises. However, as BounceX is a company we’ve recently highlighted for its growth and capital efficiency, its own cuts are worth noting.

Reductions

TechCrunch was tipped concerning the BounceX staff cuts and salary reductions earlier today, events that the company confirmed this afternoon. Our original tipster pegged the cuts at around 20% of staff, with pay cuts for the rest of its denizens.

The company confirmed the existence of salary cuts and layoffs, but did not affirm our figures. Here’s BounceX on its hard day; the firm confirmed pay cuts via a spokesperson separately from this comment:

COVID-19 has hit our client base really hard, especially if they had significant retail presence. In order to accommodate clients and help stabilize our business & their businesses, we made the immensely difficult decision to move forward with a reduction in force. While we expected over 30% growth this year and adding 150 new roles by year end, we were forced to consolidate roles in order to do everything we could to take care of as many of our people as possible and continue to help our clients get through this.

It is not a surprise that BounceX was planning revenue growth and 150 new roles; the company recently crossed the $100 million ARR threshold, an event that TechCrunch covered as part of our long-running series focused on companies that reach the revenue threshold.

Indeed, in February, when BounceX shared the milestone, the firm also announced a rebrand, stating that it would change its name to Wunderkind. As you can read from the name, BounceX was feeling good at the time, looking to the future, proud of its growth and track record of efficient capital use.

As TechCrunch wrote at the time:

Wunderkind has been super efficient to date, with [CEO Ryan] Urban telling TechCrunch that “the amount of equity [his company has] actually put to work is probably sub-$35 million,” with less than $50 million in equity capital raised. The company also has debt lines that it can use, the CEO noted.

Given its history of conservative capital management, it doesn’t seem likely that BounceX is in existential danger after its layoffs. The company’s debt line — though we don’t know anything about its covenants — could provide more cushion. But its quick turnaround in fortunes shows how fast things can change.

The impact of COVID-19 on BounceX shows that no company, no matter how successful they were in February, is safe in April. Heck, TripActions was crowing about a huge new debt facility it secured right before COVID-19; the firm has since pared staff as well.

Source: Tech Crunch Startups | BounceX cuts staff, reduces salaries in wake of COVID-19 economic disruptions

What’s it like to take a company with 3,000 employees distributed across 25 offices and make it fully remote with just a few weeks’ notice?

I hopped on a call with Twilio CEO Jeff Lawson to hear about how their transition has gone so far, and what he’s learned from the process.

Twilio CEO Jeff Lawson

Remote work isn’t brand-new for Twilio; as with a lot of software companies, many employees have worked remotely. But it’s still a massive shift: Prior to the coronavirus outbreak, Lawson says around 10% of the company worked remotely. Today, it’s everyone.

“For a company like us to go from partially virtual to fully virtual in a short period of time,” he says, “it’s not without its hiccups, but it has worked pretty well.”

Things are weird for everyone right now, so compassion is key

Shifting to remote work might make things feel different for a while — but those differences pale in comparison to the other changes people are coping with in the shadow of the COVID-19 pandemic.

“I think the fact that you are distributed is lesser than the fact that you’re like, not allowed to go outside,” says Lawson. “You’re worried about friends and family and you’re reading the news… those things are more impactful.”

Source: Tech Crunch Startups | Twilio CEO Jeff Lawson on shifting a 3,000-person company to fully remote

Space startup Swarm emerged from stealth mode in an unusual way two years ago when it turned out that it had launched some of its satellites in contravention of an FCC order not to do so. The regulator had argued that their satellites, which are tiny spacecraft smaller even than most CubeSats, were in fact too small and couldn’t be reliably tracked using existing technology. Now, two years later, Swarm has announced that it has cleared all the requisite regulatory hurdles in order to begin operating commercially in the U.S.

Already last year, Swarm got approval from the FCC to send up the 150 satellites it planned for its initial constellation, as well as up to a total of 600, and it gained approval to use the wireless spectrum that it requires to transmit from its satellites to Earth. On top of that, the company has now added regulatory approval to operate in the U.K., New Zealand, Germany, Sweden, Antarctica and in international waters, and it gained approval for ground stations in the U.S., the U.K., Antarctica, New Zealand and the Azores, with plans for more to come online through the remainder of this year, bringing its total ground station network to 30 by the end of summer, if all goes to plan.

Swarm’s ultimate goal is to provide a worldwide, affordable satellite data network that will be suitable for use in IoT applications, including maritime and ground logistics tracking, and agriculture, as well as for basic communication services for areas that have inadequate ground infrastructure. It’s now at the point where it can begin turning on services using the nine satellites it already has on orbit, as it continues to work toward launching more and expanding its regulatory approvals to cover active operations across more countries.

Source: Tech Crunch Startups | Swarm gets all the approvals it needs to begin operating its satellite connectivity service in the US