Tag: 01 advisors

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Postscript takes in $65M so Shopify merchants can send more personalized texts to customers

Postscript, an SMS marketing company, raised $65 million in Series C funding and will usher in more ways for brands to personally engage with their customers.

We previously checked in on the company last year when it took in $35 million in Series B funding to continue helping Shopify stores stay in touch with customers via SMS. We also profiled Postscript when it raised $4.5 million in 2019.

In 2021, the company had 61 employees with over 3,500 customers. Today, that has grown to 230 employees and its brand base on Shopify has more than doubled to over 8,500 brands, company CEO Adam Turner told me. It now includes brands like Brooklinen, Homesick, Native, Spikeball and Kopari. In addition, the company more than doubled its revenue.

On average, customers see a 25-time return on their investment using Postscript, Turner said. One of the biggest days the company looks at for traction is Black Friday, but this year, Memorial Day became the company’s largest SMS sending day. He says between 30 and 40 million texts were sent compared to an average of between 5 and 10 million.

He went on to explain that while merchants are worried about a recession, Postscript’s return, essentially $25 for every $1 they put in, enables them to lean into the SMS strategy. For example, merchants who have been using this approach for the past 1 or 2 years are driving 40% of the gross merchandise volume for their stores, he added.

“Merchants are having success, even as Facebook advertising costs increase, and are seeing customer lifetime values stay high,” he added. “They are also more sophisticated and are using SMS as a two-way platform to reply to customers to create a purchase. That creates more value to the end user because it is not just a billboard, but an interaction channel where you can reply and get support for your purchase.”

The company went after new funding after seeing that e-commerce sales via SMS in the United States account for 16% compared to sales via communication systems, like WeChat, where it is 26%, Turner said. “We want to bring the U.S. into the modern times of e-commerce and retail by helping merchants develop relationships and other channels outside their websites,” he added.

Postscript will continue working with Shopify merchants, but the new funding also gives it an opportunity to work with some of its best customers on other platforms. Turner also intends to deploy the funding across sales and marketing, go-to-market and product engineering.

There is still a challenge to provide personalized experiences to customers, but Turner believes that Postscript is creating the best possible approach for using SMS marketing and will continue to build more features with those customers in mind.

Dick Costolo’s venture firm 01 Advisors led the new investment that included participation from Twilio Ventures, Expanding Capital and m]x[v Capital and existing investors at Greylock, Accomplice, Elephant and OpenView. In total, Postscript raised over $100 million in venture-backed funding since the company was founded in 2019.

“In the same way texting changed the way people communicate with each other, Postscript transformed how brands communicate with their customers,” said Costolo in a written statement. “We invest in companies with strong product market fit that are focused on further innovation and scale to bring them into their next phase of growth, and Postscript is the epitome of this profile. They are the future of commerce.”

Postscript raises $35M to give Shopify stores SMS superpowers

New data underscores a slowing e-commerce market

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BrightHire scores $20.5M Series B for Zoom-based job interview app

BrightHire, a startup that wants to transform the way people are hired inside organizations, announced a $20.5 million Series B investment today led by 01 Advisors with participation from Index Ventures and Zoom Apps Fund.

The fact that Zoom Apps Fund is involved is not a coincidence, as the company is based on taking information from a Zoom-based interview and using the data to drive hiring decision making. Company co-founder and CEO Ben Sesser says that while most business decisions are grounded in data, hiring decisions have been an obvious exception with a lot of emotion and gut feelings involved. He is hoping to change that.

“Our goal is to transform the way teams are built. In business, it’s kind of expected that any critical decision will be grounded in hard data and rigorous analysis. And yet in hiring which is perhaps the most important thing a company does for its future, the decisions are made largely based on gut feel and memories and recollections,” Sesser told me.

He said that most companies are not terribly consistent about the way they hire and BrightHire brings some order to the hiring exercise and in that way improves the experience for everyone involved.

The company records and transcribes each interview, which is conducted over Zoom, enabling the interviewer to concentrate solely on the candidate, and not on taking notes or other tasks. In addition, throughout the interview, the software will surface critical questions to ask the candidate, which helps ensure every interview is conducted in a consistent way.

After every interview, the software surfaces highlights and insights that help companies as they hire new employees and ultimately to continually improve hiring overall.

Dick Costolo, who is managing partner at lead investor 01A, says that one of the reasons he liked what BrightHire was doing was because he recognized that they were solving a fundamental hiring problem he had when he was running Twitter from 2009-2015 during a period of extreme growth.

“One of the things we noticed at Twitter was there was all this unconscious or unintentional bias in the interview process or even in the promotion process,” he said. This led them to try to seek a more data-driven way to make better decisions, something that’s much easier to do with a tool like BrightHire. “This would have solved so many issues we had around subjectivity and unconscious bias,” he said.

During the pandemic when so much business was shifting online, the idea of interviewing over Zoom became much more normalized than perhaps it would have been when the company launched in 2019.

“Six months or seven months prior to the pandemic, just based on the problem, hiring was too important to not fix in really fundamental ways, but ultimately 2020 was a very interesting year due to the pandemic, and ultimately there have been a bunch of changes that have been big accelerants for our business,” Sesser said.

As the company grows, Sesser says he is using the product to drive diversity in hiring inside his own organization, but it’s just one tool in the arsenal. “We don’t solve diversity in hiring, but what our product does is create a more equitable process,” he said.

He adds, “How can you have an equitable approval process if you’re assessing candidates inconsistently […], and if we have no grounding or basis for our decisions that we can fall back on or hold ourselves accountable to. Otherwise, it’s literally our subjective memory and our feelings, which is a really really hard thing to do.”

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Nomad Homes raises $20M to create a personalized house hunting platform for Europe, Middle East

Not every country has a Multiple Listing Service to aid in buying and selling a home. This often makes the process complicated as buyers weed through fake and duplicate listings and little pricing data, unlike in the United States.

Property technology startup Nomad Homes is working to change that by creating a personalized real estate buying experience in Europe, the Middle East and Africa, a region that represents $20 trillion in real estate, company CEO Helen Chen told TechCrunch.

“We are like Stitch Fix for real estate,” she added. “We are matching you to the best home for you. Instead of searching the old way by going through thousands of listings, you can take a ‘style quiz,’ and we match you with properties.”

Nomad Homes mockup. Image Credits: Nomad Homes

Today, Nomad Homes announced a $20 million Series A funding co-led by 01 Advisors, an investment fund co-founded by former Twitter executives Dick Costolo and Adam Bain, and The Spruce House Partnership. There was also a group of new and existing investors that participated, including Goodwater Capital, HighSage Ventures, Abstract Ventures, Partech, Class 5 Global, Precursor Ventures and Alta Park Capital.

Angel investors in the round included co-founder and former CEO of Zillow and Pacaso Spencer Rascoff through his firm 75 & Sunny, Opendoor CEO Eric Wu, former Compass COO/CFO David Snider, Flyhomes CEO Tushar Garg, Landis co-founders Cyril Berdugo and Tom Petit and DST Global partner Saurabh Gupta.

The company has raised a total of $24 million since Chen, Dan Piehler and Damien Drap started the company in 2019 after bonding over finding a place to live in a new city. They have collective backgrounds in Blackstone, Addepar and Uber, while Chen also left the Stanford Graduate School of Business to start the company.

Nomad Homes is creating its own MLS for the region and applies technology to the expertise provided by local customer services experts to provide home buyers with all of the information they need, from the initial search to financing and signing all of the documents.

Fresh out of YC, Houm raises $8M to improve the home rental and sales market in LatAm

“Nomad Homes has built an incredible platform that is shaping the future of real estate across EMEA,” said Dick Costolo, managing partner of 01 Advisors, in a written statement. “What the team is building is increasing market liquidity and simplifying the consumer experience. We have invested in similarly transformative companies in the U.S. and are excited to partner with these founders and the entire team as they expand.”

After announcing its launch and seed round in 2020, the company’s platform is now online in Paris and Dubai. It is expanding into Southern Europe and building out its team in the United States and Europe.

As transaction volumes grew over 16 times through the first half of the year, the Series A was an opportunity to accelerate into new markets and heavily invest in the technology and product to improve the experience for customers, Chen said. A portion of the proceeds will also go toward fintech products and doubling its team of 32 by year-end.

“We will continue to deliver the best customer experience and expand our offerings across more markets,” she added. “We are also excited about all of the investors around the table. They are multistage investors, and we have a tremendous amount to learn from them, especially Spencer from Zillow and Eric from Opendoor, who are both experts in the space.”

No pen required: The digital future of real estate closings

 

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Slice raises $40M to power ordering and marketing for independent pizzerias

Slice, a startup that helps independent pizzerias build an online business, has raised another $40 million in Series D funding.

The round was led by Cross Creek, with participation from KKR, GGV Capital and Primary Ventures, as well as Twitter’s former CEO Dick Costolo and former COO Adam Bain (through their firm 01 Advisors).

Last spring, the startup announced a $43 million Series C. Why not raise more money this time? Founder and CEO Ilir Sela described this as “a quick round” to get Costolo and Bain  on-board as investors. He also suggested there may be additional fundraising conversations in the not-too-distant future.

“Slice has emerged as the leader in powering these types of small businesses that have been serving our communities for decades,” Bain said in a statement. “We look forward to working with Ilir and the incredible team at Slice to marry our significant operating and business-scaling experience with Slice’s focus on enabling economic growth in this category.”

Slice has built a mobile app and website for ordering from local pizzerias, but it also provides tools so they can build their own websites, run marketing campaigns, improve their search engine optimization and more. Slice only charges those pizzerias a fixed $2.25 per order, and last fall it even removed the fee for orders under $10.

Slice, an online ordering and marketing platform for pizzerias, raises $43M

The company continues to expand its products and services with the recent launch of a point-of-sale system for pizzerias called Slice Register, as well as a cross-pizzeria loyalty program called Slice Rewards.

Some of this might sound a bit niche — a POS system, just for pizzerias? — but when I brought this up with Sela, he replied, “I love it when people say that, because then they continue to stay out of the way.”

Slice already has 15,000 pizzerias on the platform, with plans to increase that number to 20,000 at the end of the year. He added that although the current addressable market consists of 57,000 independent and small chain U.S. shops, with the Slice Accelerate program (where the startup provides select pizzerias with $15,000 worth of technology and services) “there could be 100,000 in the U.S.”

“With Accelerate, we’re taking inefficient pizza shops who are predominantly offline and helping them realize their vision for their brand,” he continued. That might mean improving an existing location, or it might mean launching new ones. In fact, he said the new program has already helped to revamp Pizza Mia in Staten Island and will work with Crown Heights-based Billy’s Pizza & Pasta to open a second location.

“I definitely think that long term, there’s a big question whether our very unique model could be applied to other verticals,” he said. “I think it can, but it would be a mistake to move into those verticals today, because of the opportunity that it exists in pizza.

Slice is launching a point-of-sale system for pizzerias

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MasterClass just raised $100 million for celebrity-fueled content

MasterClass, a startup that sells celebrity-taught classes to people, has raised $100 million in a Series E round. The round was led by Fidelity Management & Research Company with participation from new investors including Owl Ventures, 01 Advisors and existing investors NEA, IVP, Atomico and NextEquity Partners.

The new financing brings MasterClass’ valuation to $800 million, according to Bloomberg, which broke the news of the edtech company’s then-impending funding round earlier this month. MasterClass declined to disclose its new valuation.

MasterClass charges a $180 annual subscription fee for users to access its library of content. The subscription model is responsible for 80 percent of the company’s revenue.

MasterClass views itself as neatly on the intersection of entertainment and education. The startup has produced 85 classes taught by celebrities, or “masters,” on their specialities. The platform has garnered blockbuster names like Anna Wintour to talk about how to grow a business, Gordon Ramsey on how to cook, and David Sedaris on how to be funny. The previews of classes are called “trailers.”

It also touches on the public’s innate curiosity about how famous people think and work. MasterClass tugs on that idea a bit by also offering classes that fundamentally do not make sense to be “digitized.” Think high-contact sports, like a tennis lesson from Serena Williams or a basketball lesson from Steph Curry. Or just general pontifications from RuPaul on self expression and Neil deGrasse Tyson on scientific thinking and communication.

Despite its flashy line up of stars, MasterClass doesn’t sell access but instead sells a window into someone’s work diary. Celebrities are not interacting with students on a day-to-day basis, and sometimes, not at all.

It is relatively a light lift for celebrities once they get their content on the platform, which of course only happens if they are personally invited to from the company. Any MasterClass on the site includes a number of lessons, broken down in separate videos that range from 20 to 30 minutes, and a downloadable workbook. Students for each class can flock to community hubs to chat with their fellow virtual classmates. There are opportunities for celebrities to interact with students, but nothing is put in the contract to make the instructors give back.

MasterClass proudly touts the few exceptions where celebrities have chosen favorites in class: Electronic music producer DeadMau5 reportedly invited one of their MasterClass students to record a track alongside him. Serena Williams reportedly invited one of her students to play a game with her.

MasterClass declined to share how it pays the celebrities.

Last year, MasterClass more than doubled in terms of sales. The company also says its content is so engaging that people might sign on for a Steph Curry workshop, but then eavesdrop in on a Ramsey cooking session.

MasterClass raised the round as millions are at home with nothing to do. CEO and co-founder David Rogier said that the most watched chapter of a class is Chris Voss, former FBI negotiator, and his thoughts on the art of tactical empathy.

Beyond this anecdote, Rogier repeatedly denied to share any data on how MasterClass’ usage has changed since coronavirus began. The silence is notable only because its competitors and neighbors in the edtech space have been noisy as of late. The massive shift to remote education has already helped edtech companies raise millions across the board, from new unicorns to seed stage deals.

The silence might be because MasterClass has positioned its content as more entertainment-focused than simply education-focused. Since the company produces high quality, documentary-style content, it means that it might struggle to produce, similarly to the delays we’re seeing in the entertainment industry right now due to COVID-19 shutdowns.

Similar to other edtech companies, however, MasterClass claims that the new financing was closed less out of necessity and more out of opportunity.

Rogier said that the capital will be used to create new classes for students and up production to one class a week. The company is also experimenting with an audio-only mode, short form and augmented reality.

“Imagine if we had Steph Curry, but you had augmented reality on your phone so you could actually see where to put your feet,” he said.

MasterClass’s marketing strategy has recently been a topic of conversation because of how aggressive and ever-present it is. It seems like every YouTube video you watch, there is a MasterClass ad waiting to be your commercial break. It seemingly has only increased as everyone started to work from home.

While Rogier would not disclose MasterClass’ marketing budget (or how in the world it managed to crowd already crowded challenges) the strategy is a bit telling. MasterClass doesn’t compete with YouTube, it advertises on the platform. It is betting that the world wants a highly produced, celebrity-led class, and is willing to pay for it.

“If you’ve seen more ads, it is because they are working,” he said.

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Electric gets another $7 million in funding from 01 Advisors and the Slack Fund

Electric, the platform that puts the IT department in the cloud, has today announced new funding following a continuation of its Series B earlier this year.

Dick Costolo and Adam Bain (01 Advisors) and the Slack Fund participated in the $7 million capital infusion.

01 Advisors put up the majority of the financing ($6 million) with the Slack Fund putting up a little under $1 million and other insiders covering the rest, according to Electric founder and CEO Ryan Denehy.

The funding situation with Electric is a bit unique. Electric raised a $25 million Series B round led by GGV in January of 2019. In March of this year, just before the lockdown, the company reopened the Series B at a higher valuation to make room for Dick Costolo and Adam Bain, raising an additional $14.5 million.

Then the coronavirus pandemic rocked the globe. On Monday March 9, the stock market felt it, triggering a temporary halt on trading. The following week was total financial chaos.

That’s when Adam Bain called up Denehy again. They ‘rapped out’ about the potential for Electric during this turbulent time.

“The increase in remote work is going to be dramatic,” said Denehy, relaying his conversation with Bain. “Larger companies are going to get smarter about budgeting and there is a lot of urgency for them to find ways to spend money around back office tasks like IT more efficiently. Electric becomes more appealing because, dollar for dollar, it’s a lot more efficient than building a big IT department.”

The first week of April, Bain called Denehy again, this time saying that 01 Advisors want to put in more money and be aggressive investing in Electric.

Electric is a platform designed to support the existing IT department of an organization, or in some cases, replace the outsourced IT department. Most of IT’s responsibilities focus on administration, distribution and maintenance of software programs. Electric allows IT to install its software on every corporate machine, giving the IT department a bird’s-eye view of the organization’s IT situation. It also gives IT departments more time to focus on real problem-solving and troubleshooting tasks.

From their own machine, lead IT professionals can grant and revoke permissions, assign roles and ensure all employees’ software is up to date.

Electric is also integrated with the APIs of top software programs, like Dropbox and G-suite, letting IT handle most of their day-to-day tasks through the Electric dashboard. Moreover, Electric is also integrated with Slack, letting folks within the organization flag an issue or ask a question from the platform where they spend the most time.

“The biggest challenge for Electric is keeping up with demand,” said Jason Spinell from the Slack Fund, who also mentioned that he passed on investing in Electric’s seed round and is “excited to sort of rectify [his] mistake.”

Electric also added a new self-service product that can live in the dock, letting employees look at all the software applications provided by the organization from their remote office.

“There are so many stretched IT departments now that have to do a lot more with a lot less,” said Denehy. “There are also companies who were working with an outsourced IT provider and relied on them showing up to the office a few times a week, and all of a sudden that doesn’t work anymore.”

With the current ecosystem, Electric is continuing to spend on marketing but with 180 percent increase in interest from potential clients in the pipeline, according to Denehy.