Tag: 500 startups

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Berlin’s Zenjob gets $30M to take its digital staffing service nationwide and beyond

Berlin -based recruitment startup, Zenjob, which operates a digital platform connecting students with highly flexible temp jobs in sectors such as retail, logistics and hospitality, has closed a €27 million ($30M) Series C led by Forestay Capital. Also participating in the funding round: Redalpine, Acton Capital, Axa Venture Partners and Atlantic Labs.

Prior to this round Zenjob, a 500 startups growth hacking program alum, had raised just under $25M, according to Crunchbase.

The 2015 founded startup says it plans to use the money to further expand in Germany, where it currently offers a service in 14 cities — letting employers book student workers by the hour, with as little as 24 hours’ advance notice. Flush with Series C cash it’s now aiming to be nationwide by the end of the year.

It is also planning its first international expansion — spying opportunity amid the coronavirus crisis as it suggests social distancing requirements are generating demand for additional staff in certain sectors. (Which is something we’ve also heard from other recruitment startups in recent months.)

“The coronavirus crisis requires social distancing, which has created increased demand for staffing in, especially, logistics and retail,” said Fritz Trott, co-founder and CEO, in a statement. “Our service means that we can assist in the almost effortless digital hiring of hundreds of new students every day to fill these gaps.”

The new financing will also go on tech development to push for greater efficiency gains for users.

Zenjob says it wants to be able to use algorithms to further help predict staff demand in future, for example.

As well as job matching, the platform handles billing to cut down admin requirements for employers wanting temps to plug seasonal and/or short term vacancies.

Zenjob says its app reaches more than 15,000 students daily at this stage. It hasn’t provided data on how many employers are signed up to use the service.

Commenting on the Series C in a statement, Forestay Capital’s managing partner, Frederic Wohlwend, said: “We are delighted to have invested in Zenjob and are very much looking forward to working with Fritz and his highly talented team. Zenjob is a company that has deployed disruptive technology to shake-up the temporary employment market and which, prior to this coronavirus crisis, had already proven itself to have an exciting future. Now, during this pandemic, its flexible digital recruiting service has, in our eyes, further been confirmed as a model for keeping the working world moving.”

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NextView Ventures is launching a remote accelerator for startups

Over the weekend, Silicon Valley leader Marc Andreessen broke his usual silence and gave some advice to Silicon Valley: It’s time to build. The famed investor urged CEOs, entrepreneurs and investors alike to welcome new companies into their circles.

The blog post details high-flying pieces of advice that could each land in a unique angle depending on where you sit. But as venture capitalists rush to prove they are open for business, the true test these days is a bit more grounded: cut checks and signed term sheets.

The words are eerily similar to the thesis of NextView Ventures, a Boston-based venture capital firm, and its new remote accelerator program, announced today.

“During this current COVID crisis, we have seen many VCs publicly saying that they are ‘open for business,’ but we wanted to put our money where our mouth is,” according to partner David Beisel.

Using money earmarked from its current fund, NextView will invest $200,000 for an 8% stake in fewer than 10 pre-seed and seed startups. The program will be fully virtual and is investing in founders that drive change in the “everyday lives of everyday people.”

Rob Go, the co-founder of NextView, tweeted about the launch today.

The NextView accelerator is launching at a time when historical incubators like Y Combinator and 500 Startups are rethinking their independent strategies. Today Y Combinator announced its upcoming batch will be fully remote, and last month 500 Startups said it is scrapping its cohort model.

The firm also publicly said what it didn’t like about traditional accelerator programs, like big batch sizes and flashy demo days.

“Accelerators were at their best when they were small and intimate. YC’s initial batch was just eight companies,” Beisel said about the small number of participants. “But over time, accelerators became more of a numbers game.”

Beisel added, “traditional accelerator demo days originated as a way to showcase startups to follow-on investors, but eventually evolved into an elaborate show attempting to satisfy many constituents.”

Still, an unavoidable truth about demo days is that it connects startups to founders and ideally that first check. What happens to deal success when you don’t have a buzzy room of journalists, venture capitalists and bright lights on founder faces?

After YC and 500 Startups hosted their first-ever virtual demo days this year, we’ve heard grumblings of mixed results. Y Combinator last week changed from always investing in YC graduates to reviewing on a case by case basis, hinting at conservatism within the accelerator.

NextView also approaches post-accelerator funding conservatively. The firm says it will connect its small cohort to next-round investors, but will “intentionally not lead the next round of financing.” The firm is being upfront about its choice to not lead follow-on investing to “avoid potential signaling issues for future financings.” The company will participate with at least pro-rata for all companies in any subsequent round of financing to help the cohort.

An optimistic read of this decision is that NextView is viewing its accelerator as a separate function of its investment firm and wants to be more of a helper than a robust pipeline for deal flow. Alternatively, it could mean that the firm doesn’t want to over-promise capital in an unpredictable time for the economy. And in the chance that it does find a gem within this batch, it would be surprising for NextView to not invest in the company.

The bottom line is that NextView is launching an accelerator and investing in startups during a time when many are not. So while we’ll wait to see how successful the firm is in cultivating young startups with ripe returns, for now it’s building. And in today’s new normal, building is a welcome sign.

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Venture capitalists chat edtech’s new normal after COVID-19 

There’s no doubt that the coronavirus has had a monumental impact on the way we view technology’s relationship with education. For now, students are learning from home. But what happens when they return to school?

Picking up where we left off in last week’s survey, we asked top investors in the space for their predictions on what is ahead once life resumes to its new normal. One investor mentioned how in March, they spent a third of their time in edtech. Now, they’re spending almost all their time vetting startups there. Another said that the sector has always been underfunded. Time will tell if venture capitalists become more bullish on the sector, and more importantly, if adoption from schools with strict budgets becomes more lenient.

A harsh statistic sums the dynamic of adoption and investment pretty well: according to Tetyana Astashkina and Jean Hammond of Learn Launch, less than 5% of the $1.6 trillion spent on education in the U.S. is attributed to edtech. Let’s see if other investors think that percentage will shift forward after the pandemic ceases.

Their responses have been edited for length and clarity.

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Founder worries increase as investors pump the brakes

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

So far, 2020 has proven to be a year of surprises and disappointments. Over the past month, we’ve seen companies like Toast go from raising huge new rounds this year at heightened valuations to layoffs in mere months. TripActions is another example. Indeed, BounceX went from a rebrand and an announcement that it had reached $100 million ARR earlier this year to layoffs as well.

TechCrunch has been talking to VCs, founders and all sorts of folks to figure out what they are seeing in the market as we race to learn more about venture and startups in the COVID-19 era. To further that goal, this morning we’re going to run a survey of surveys, looking at sentiment and performance data collected by valuation shop Preferred Return, NFX, a venture firm, and 500 Startups, a startup accelerator and investing group.

As a bit of a spoiler, there aren’t too many smiles ahead. But march forward we must.

Rewinding the clock

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Stripe goes Fast for $20M, D2C tips and tricks and what’s happening to tech internships?

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

The three of us were back today — Natasha, Danny and Alex — to dig our way through a host of startup-focused topics. Sure, the world is stuffed full of COVID-19 news — and, to be clear, the topic did come up some — but Equity decided to circle back to its roots and talks startups and accelerators and how many pieces of luggage does an urban-living person really need?

The answer, as far as we can work it out, is either one piece or seven. Regardless, here’s what we got through this week:

  • Big news from 500 Startups, and our favorite companies from the accelerator’s latest demo day. Y Combinator is not the only game in town, so TechCrunch spent part of the day peekin’ at 500 and its latest batch of companies. We got into some of the startups that stuck out, tackling problems within the influencer market, trash pickup and esports.
  • Plastiq raised $75 million to help people and businesses use their credit card anywhere they want. And no, it wasn’t closed after the pandemic hit.
  • We also talked through Fast’s latest $20 million round led by Stripe. Stripe, as everyone recalls, was most recently a topic on the show thanks to a venture whoopsie in the form of a check from Sequoia to Finix.1 But all that’s behind us. Fast is building a new login and checkout service for the internet that is supposed to be both speedy and independent.
  • All the Stripe talk reminded us of one of the startups that launched so it could beat it out: Brex. The startup, which has amassed over $300 million in known venture capital to date, recently acquired three companies.
  • We chatted through the highlights of our D2C venture survey, focused on rising CAC costs in select channels, the importance of solid gross margins and why Casper wasn’t really a bellwether for its industry.

After that we had two quick hits, namely Natasha’s look at how tech internships cancellations are impacting our future workforce, and the latest from Slack.

And that wraps up what felt like a refreshing show. We hope you think so too, and thank you for listening. Stay healthy, all.

Equity drops every Monday at 7:00 AM PT and Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

  1. What do you call a check from Sequoia? A cheque!
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TechCrunch’s favorite companies from 500 Startups’ latest demo day

Today 500 Startups hosted a virtual demo day for its 26th batch of startups, a group of companies that TechCrunch covered back in February.

500 is not the only accelerator that moved its traditional investor pitch event online; Y Combinator made a similar move after efforts to flatten the spread of COVID-19 required changes that made its traditional demo day setup temporarily impossible.

In addition to hosting a few dozen startup pitches today, 500 also explained changes to its own format and provided notes on the current state of the venture market.

Regarding how 500 Startups is shaking up how it handles its accelerator, the group intends to pivot to a rolling-admissions setup that will give participants more flexibility; the group will still hold two demo days each year — TechCrunch has more on the changes here.

Regarding the venture market, 500 Startups said venture capital’s investment pace could slow for several months. This seems likely given how the economy has taken body blows in recent weeks as huge swaths of the world’s economy shut down. What advice did 500 have in the face of the new world? What you’d expect: startups should cut burn and focus on customers.

Got all that? Ok, let’s talk about our favorite companies from the current 500 cohort.

Our faves

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500 Startups moves to rolling admissions instead of cohorts

500 Startups is scrapping its cohort model for accelerating companies and moving to a rolling admissions process, the accelerator said during its latest demo day.

One of the progenitors of the accelerator model in the US along with Techstars and Y Combinator, 500 has been a cornerstone of the early-stage company building platform. The move to a rolling admissions mirrors an approach taken by other accelerator programs including MuckerLab, the wildly successful Los Angeles-based early stage program.

“Demo is changing the way it runs its accelerator to be rolling recruitment,” said Aaron Blumenthal, a 500 Startups venture partner. “It will be making investment decisions year round instead of twice a year. Demo Days will still happen twice a year, founders can pick which Demo Day they want to be a part of.”

Given the profusion of accelerator programs globally, the move to a rolling admissions schedule likely makes sense, giving entrepreneurs more flexibility around when and how they join.

The decision from 500 follows other significant changes from Y Combinator, which is moving to a virtual model for its own accelerator program — a decision influenced by the global response to the COVID-19 epidemic which has disrupted economies and threatened lives globally.

Blumenthal explained the switch in a blog post. Writing:

In a business where timing is everything, I realized the current accelerator model was serving an injustice to founders. That’s why shortly after I was put in charge of our flagship accelerator, I knew it was time to do exactly what we tell our founders to do every day—to innovate. So, after shepherding 26 batches of thousands of founders over the past 10 years, 500 is shaking things up.

We’re proud to announce that we’ve designed an entirely new platform that’s flexible and tailored to our founders’ timing and needs—not our own. Our goal is to move away from the one-size-fits-all approach of the past, and towards delivering relevant content, based on each founders’ growth stage and needs, precisely when they’re ready for it.

This new flexible approach reinforces our continued commitment to invest in founders from all over the world. We realize it’s not always feasible for every founder to move to San Francisco for four months at the drop of a hat, and we want to accommodate for that.

You can expect to see our new model in action in the near future. After we wrap up Batch 26’s Demo Day on March 26th, our accelerator applications will open indefinitely. We’ll begin accepting founders to our program on a continuous rolling basis, with more flexibility on start and end dates. That means no more application deadlines, and no more missing out on companies because the timing isn’t right. There will still be two demo days per year and plenty of opportunities to take advantage of the expertise the entire 500 community has to offer — all that changes is our flexibility to invest in companies and founders we believe in and their ability to join our programming when it’s the right time for them.

TechCrunch has covered 500’s current batch of startups here, and will have a post up shortly about our favorites from its demo day.

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Meet 500 Startups’ 26th batch of startups

Following TechCrunch’s coverage of 500 Startups’ 25th batch (and numbers 24, 23, 22, and 21, in case you wanted to go back in time), today we’re saying hello to  the accelerator’s 26th cohort.

500 Startups, in case you weren’t aware, is a seed-stage accelerator and a collection of venture funds. The group, now with a few dozen accelerator batches under its belt, has several thousand companies in its universe. 500’s 26th cohort contains 29 companies, including a handful that we’d already heard of (Juked.gg, to pick one).

Data, diversity

Before we get to the startups themselves, a few notes. To get a handle on the companies included in the batch, TechCrunch spoke with Aaron Blumenthal, a venture partner at the firm. After sharing a number of batch metrics with TechCrunch, we pressed for a bit more detail on the makeup of the startups in the group.

Here’s a hybrid of our notes, and his details (condensed and edited for clarity), on the batch that the venture partner called “another rung on the ladder of our diversity and inclusion state of mind”:

  • 37% of the startups are international. According to Blumenthal, “this particular batch from the ‘outside United States perspective’ is a little bit smaller — we usually see north of 50% outside the United States.”
  • 30% of the companies’ founding teams include a woman. TechCrunch asked Blumenthal if that number was up, flat or down, to which he responded that 500’s “average is usually in the mid 30s or so. Our last batch, for example, was 26% female. And this one is more [in] that direction which, of course, we are a fan of.”
  • 70% of the founding teams of the batch “have one or more founders who identify as a racial minority,” according to the firm.

It would be interesting to see a more granular breakdown for future cohorts, but the information provided was more than I expected, and the numbers a bit better. And on the subject of numbers, Crunchbase has recorded 215 exits for 500 Startups. From its accelerator, 500 cites TalkDesk and Shippo as highlights.

Turning to mechanics, 500 Startups invests $150,000 apiece into its accelerator companies for 6% of their equity, and charges a $37,500 for the program itself. So, in effect, it’s a bit less capital for the same ownership percentage.

What else? Just that we’re walking into demo day season. 500 Startups will host the showcase for its 26th batch on March 19. Y Combinator will hold its own on March 23 and 24. The Techstars website defeated my hunt for its next demo day, but in the name of fairness, it’s probably hosting one around the same time somewhere in the world.

Here’s the list of companies in batch 26, with small notes from 500 on what they do:

  • Acadium: Connects business owners and marketing professionals with aspiring digital marketers.

  • Alloy Card: Offers a consumer credit card with automation that gives people more control over their finances while saving time.

  • Amixr: Incident management software that helps engineering teams around the world optimize their workflow while minimizing hassles.

  • AppBind: Lets partners buy and resell online software subscriptions as easily as licensed software, by bringing B2B SaaS into the global reseller market of implementation consultants, system integrators and distributors.

  • Bliinx: Offers an easy and fast way to find information on business relationships by aggregating all interactions with contacts into Office 365.

  • Briza: Provides an insurance-as-a-service API that enables instant quoting, binding and issuance of commercial insurance policies.

  • Butlr: Through sensor networks and AI, Butlr helps retail stores increase in-store sales by applying real-time customer behavior analytics.

  • CENOS: Easy-to-use simulation software that allows engineers to iterate designs faster than physical prototypes for induction heating and antenna design, among others.

  • Connected Analytics: Nigeria-based company helping businesses and banks integrate data analytics and rewards in order to retain customers and increase revenue.

  • Fakespot: Eliminates misinformation and deceptive content on e-commerce sites for consumers, brands and platforms.

  • GamerzClass: Offers exclusive esports masterclasses with professionals to shape the future of gaming.

  • Get on Board: Recruitment platform that connects global companies with the best Latin American tech talent.

  • Juked: Aggregates information on esports games, including live streams, player profiles, scores and calendars to make esports easier to watch and to promote engagement.

  • Kyndoo: Helps advertisers weed out fraudulent social media influencers, and provides data around their authenticity and performance.

  • Mero Technologies: Retrofits commercial buildings with sensors to analyze in real time traffic and consumables, such as toilet paper and soap, to inform cleaning routes.

  • Omnitron Sensors: Enables full autonomy of self-driving cars and drones with novel silicon photonics processes for sensors in safety-critical systems.

  • Pilota:  Applies machine learning to predict flight disruptions for passengers and automatically re-books a traveler’s flight for free.

  • Plant an App: Gives IT teams the speed of low-code development without compromising flexibility.

  • Pluto: Customizes sleep pillows at scale based on the user’s body stats, such as height, neck-to-shoulder ratio and sleep preferences in order to optimize sleep.

  • Predina: Applies AI to predict the risk of vehicle crashes for insurance and safety purposes, by analyzing more than 14 million historical crashes and other factors, such as street intersections, weather conditions and time.

  • Renetec: Enables the creation of GUIs for embedded systems with HTML, CSS and JavaScript, which reduces development time and costs.

  • ShardSecure: Enables enterprises to securely move and store sensitive information to the cloud.

  • Shiplyst: India-based ocean freight procurement marketplace that reduces costs for exporters and importers and gives them greater visibility into their shipments.

  • Silk + Sonder: Provides a women’s mental wellness subscription service that makes daily self-help more personalized through journaling and peer-to-peer support.

  • Sira Medical: Helps clinicians plan surgeries more efficiently through augmented reality, by providing them with high-fidelity 3D holograms of CT scans and MRIs.

  • The Atlas: An online community of city officials crowdsourcing ideas that is modernizing the $1.6 trillion local government market.

  • Thematic: Matches content creators who need great songs for their videos with music artists who need influencer marketing.

  • Trash Warrior: Offers on-demand junk removal services for businesses. Customers can book services online for affordable pricing and reliable quality.

  • Userpilot: Helps software product managers personalize the in-app experience across the user journey at scale.

Living in the unicorn era as we have now for some time, it’s easy to lose track of the earliest-stages of startup investment. But accelerators do have a history of helping birth some impressive companies. So it’s worth paying attention. More when we get to the various demo days.

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Where top VCs are investing in adtech and martech

Lately, the venture community’s relationship with advertising tech has been a rocky one.

Advertising is no longer the venture oasis it was in the past, with the flow of VC dollars in the space dropping dramatically in recent years. According to data from Crunchbase, adtech deal flow has fallen at a roughly 10% compounded annual growth rate over the last five years.

While subsectors like privacy or automation still manage to pull in funding, with an estimated 90%-plus of digital ad spend growth going to incumbent behemoths like Facebook and Google, the amount of high-growth opportunities in the adtech space seems to grow narrower by the week.

Despite these pains, funding for marketing technology has remained much more stable and healthy; over the last five years, deal flow in marketing tech has only dropped at a 3.5% compounded annual growth rate according to Crunchbase, with annual invested capital in the space hovering just under $2 billion.

Given the movement in the adtech and martech sectors, we wanted to try to gauge where opportunity still exists in the verticals and which startups may have the best chance at attracting venture funding today. We asked four leading VCs who work at firms spanning early to growth stages to share what’s exciting them most and where they see opportunity in marketing and advertising:

Several of the firms we spoke to (both included and not included in this survey) stated that they are not actively investing in advertising tech at present.

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Catalyst Fund gets $15M from JP Morgan, UK Aid to back 30 EM fintech startups

The Catalyst Fund has gained $15 million in new support from JP Morgan and UK Aid and will back 30 fintech startups in Africa, Asia, and Latin America over the next three years.

The Boston based accelerator provides mentorship and non-equity funding to early-stage tech ventures focused on driving financial inclusion in emerging and frontier markets.

That means connecting people who may not have access to basic financial services — like a bank account, credit or lending options — to those products.

Catalyst Fund will choose an annual cohort of 10 fintech startups in five designated countries: Kenya, Nigeria, South Africa, India and Mexico. Those selected will gain grant-funds and go through a six-month accelerator program. The details of that and how to apply are found here.

“We’re offering grants of up to $100,000 to early-stage companies, plus venture building support…and really…putting these companies on a path to product market fit,” Catalyst Fund Director Maelis Carraro told TechCrunch.

Program participants gain exposure to the fund’s investor networks and investor advisory committee, that include Accion and 500 Startups. With the $15 million Catalyst Fund will also make some additions to its network of global partners that support the accelerator program. Names will be forthcoming, but Carraro, was able to disclose that India’s Yes Bank and University of Cambridge are among them.

Catalyst fund has already accelerated 25 startups through its program. Companies, such as African payments venture ChipperCash and SokoWatch — an East African B2B e-commerce startup for informal retailers — have gone on to raise seven-figure rounds and expand to new markets.

Payment startup Chipper Cash raises $6M for Southern Africa expansion

Those are kinds of business moves Catalyst Fund aims to spur with its program. The accelerator was founded in 2016, backed by JP Morgan and the Bill & Melinda Gates Foundation.

Catalyst Fund is now supported and managed by Rockefeller Philanthropy Advisors and global tech consulting firm BFA.

African fintech startups have dominated the accelerator’s startups, comprising 56% of the portfolio into 2019.

That trend continued with Catalyst Fund’s most recent cohort, where five of six fintech ventures — Pesakit, Kwara, Cowrywise, Meerkat and Spoon — are African and one, agtech credit startup Farmart, operates in India.

The draw to Africa is because the continent demonstrates some of the greatest need for Catalyst Fund’s financial inclusion mission.

By several estimates, Africa is home to the largest share of the world’s unbanked population and has a sizable number of underbanked consumers and SMEs.

Roughly 66% of Sub-Saharan Africa’s 1 billion people don’t have a bank account, according to World Bank data.

Collectively, these numbers have led to the bulk of Africa’s VC funding going to thousands of fintech startups attempting to scale finance solutions on the continent.

Digital finance in Africa has also caught the attention of notable outside names. Twitter/Square CEO Jack Dorsey recently took an interest in Africa’s cryptocurrency potential and Wall Street giant Goldman Sachs has invested in fintech related startups on the continent.

This lends to the question of JP Morgan’s interests vis-a-vis Catalyst Fund and Africa’s financial sector.

For now, JP Morgan doesn’t have plans to invest directly in Africa startups and is taking a long-view in its support of the accelerator, according to Colleen Briggs — JP Morgan’s Head of Community Innovation

“We find financial health and financial inclusion is a…cornerstone for inclusive growth…For us if you care about a stable economy, you have to start with financial inclusion,” said Briggs, who also oversees the Catalyst Fund.

This take aligns with JP Morgan’s 2019 announcement of a $125 million, philanthropic, five-year global commitment to improve financial health in the U.S. and globally.

More recently, JP Morgan Chase posted some of the strongest financial results on Wall Street, with Q4 profits of $2.9 billion. It’ll be worth following if the company shifts any of its income-generating prowess to business and venture funding activities in Catalyst Fund markets like Nigeria, India and Mexico.

What we know (and don’t) about Goldman Sachs’ Africa VC investing