Tag: boston

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New data details the decline in Silicon Valley’s Q1 venture activity

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

Today we’re unpacking some new data concerning what happened to Silicon Valley’s venture capital market in Q1, with a special focus on private financings towards the end of the three-month period. If the deterioration in deal volume we’ll go over today persists into Q2, the United States’ largest startup market could be in for more than a bump as the global pandemic slows economic activity.

We’ve already talked to venture capitalists who invest in fintech, social companies, consumer startups, and other niches to understand the present state of the venture capital market. We’re also looking through data on the global and domestic venture scene, digging into local data on Boston and Utah. Other cities and states will be examined in the coming weeks.

Fluid situations demand lots of attention.

However, up until March of 2020, the venture capital and startup market had one speed (fast) and one goal (growth). The new normal of the COVID-19 era is different, and with the help of some excellent data from Fenwick and West, a legal firm that works with technology companies, let’s dig into how Silicon Valley’s venture scene nosedived as Q1 came to a close.

January, February, Ouch

The venture capital scene in Silicon Valley got off to a hot start in 2020. Fenwick’s collected data indicates that there were 126 financings in the region in January of this year — up more than 100% from the preceding year’s January tally of 60.

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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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Top investors predict what’s ahead for Boston’s VC scene in Q1

Before the COVID-19 pandemic shook up the world and reshaped the economy, Boston was quietly setting records.

According to new venture data compiled by TechCrunch, the region set what was at least a local maximum in venture capital raised in the space of a single quarter in Q1 2020.

But while Boston’s startup market announced a number of huge rounds that bolstered its total venture dollars raised in the first quarter, there were signs of weakness: Deal volume was its best since Q2 2019, according to a set of data compiled and released by PwC and CB Insights, but was still a little under the pace set in 2018.

So Boston’s startups raised lots of money, but couldn’t match prior highs when it came to the number of checks written. And those results were largely recorded before COVID-19 shuttered the city. Since then, we’ve seen a number of area startups lay off staff, something we explored last week.

Now, with fresh data in hand, we can take a closer look at the city’s first quarter of 2020. To better understand what we’re unpacking, we asked a number of local venture capitalists to weigh in. Let’s look back at Boston’s Q1 as we stride into Q2 with the help of Venture Lane, .406 Ventures, Volition Capital and Flybridge Capital Partners.

The data

Starting with a programming note is counter-flow, but bear with us. TechCrunch is starting a regular, monthly series on Boston and its startup market. This is a second prelude of sorts. Normally we’d hold news and interviews for a later date so that we’d have plenty of material for a column. In the face of relentless change, however, we didn’t want to hold off on reporting and synthesizing new information. When things are more normal, our pace will follow.

Per PwC and CB Insights, here’s the last few quarters of data, along with a few yearly totals to draw you the picture we can now see:

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Amid unicorn layoffs, Boston startups reflect on the future

As domestic and global economies grapple with the COVID-19 era, its impact on startups is coming into focus: All will be impacted, many will suffer and some will close.

Boston, a city that TechCrunch keeps tabs on, has seen a number of well-known startups struggle in recent weeks. Their misfortunes come quickly after companies in the region recorded huge venture raises, generating notable momentum.

In December, TechCrunch wrote that “despite winter’s chill, the Northeast’s tech ecosystem is white-hot,” taking into account Boston’s historical gains in the venture world. And earlier in 2020 we covered a few huge rounds that the city’s own Toast and Flywire had put together; worth $520 million as a pair, the two venture deals stood out for how large they were and how close to one another they were announced.

Indeed, looking at preliminary venture data from Crunchbase, Boston was on track to crush its 2019 tally of venture rounds of $50 million or more in 2020. That record-setting pace is now in doubt. 

To get a feel for Boston’s new reality, we’ve collected the region’s recent news and spoke to area investors and founders, including David Cancel of Drift (the previous founder of Compete and other companies), Drew Volpe of First Star VC and a team of folks from Underscore VC.

TechCrunch had intended to start a monthly series on Boston and its venture capital and startup scenes later this month. We’re kicking it off early because the news is already here.

Slowdown

Earlier this week, restaurant management platform Toast cut 50% of its staff. The Boston-based company was valued at $5 billion in recent months, and — before the pandemic hit — was planning to spend the next few years gearing up to go public. Toast sits uniquely between fintech and restaurant tech, industries that have been arguably impacted the most by COVID-19’s spread and widespread restaurant closures.

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The Station: Via hits $2.25B valuation, letters from readers, layoffs in a time of COVID-19

Hi, and welcome back to The Station, a weekly newsletter dedicated to all the ways people and packages travel from Point A to Point B. I’m your host Kirsten Korosec, senior transportation reporter at TechCrunch. If this is your first time, hello; I’m glad you’re with us.

I have started to publish a version of the newsletter on TechCrunch. That’s what you’re reading now. For the whole newsletter, which comes out every weekend, you can subscribe to the newsletter by heading over here, and clicking “The Station.” It’s free!

Last week, I asked readers to share how they were doing amid the COVID-19 pandemic. The response was overwhelming. It wasn’t just the number of you who reached out. It was your words — devoid of pretense, the veneer exposed — that struck me.

There were, of course, those who used the opportunity to make a marketing push or pitch a story. I get the impulse, but you won’t be rewarded here. I’m seeking something different. And I will share below some of what you sent me in hopes that it provides insight, solace, or dare I suggest, an esprit de corps among us.

I will repeat my appeal from last week: Maybe you’re a startup founder, a safety driver at an autonomous vehicle developer, a venture capitalist, engineer or gig economy worker. I’m interested in how you’re doing, what you’re doing to cope and how you’re getting around in your respective cities.

Please reach out and email me at kirsten.korosec@techcrunch.com to share thoughts, opinions or tips or send a direct message to @kirstenkorosec.

Micromobbin’

the station scooter1a

As we’ve seen the past few weeks, operators are stepping up to respond and adjust to the COVID-19 pandemic.

Lyft began offering its scooters for free to healthcare and other essential workers. As part of the program, up to 30-minute rides will be free for members of critical workforces through April 30 in Austin, Denver, Los Angeles, the Washington D.C. metro area, San Diego and Santa Monica.

Spin, similarly, introduced a new initiative that provides free, 30-minute rides and helmets to essential healthcare workers. Spin, which began offering this on April 1, is making this available in Baltimore, Denver, Detroit, Los Angeles, Portland, San Francisco, Tampa and Washington, D.C.

‘Micromobility winter on steroids’

That’s how RideReport CEO William Henderson described the current state of the micromobility industry in a recent interview with TechCrunch reporter Megan Rose Dickey.
Ride Report creates software that enables cities to work with micromobility operators. That gives Henderson a bird’s-eye view on the industry, which he shared with TechCrunch.

Yep, this is an Extra Crunch article, and you need a subscription. A few of the highlights include biking as one of the few bright spots, how some companies have pivoted to providing rides to healthcare workers and insights on how the industry and cities might have reacted had the pandemic occurred two years in the future.

A novel rewards program

These times have sparked a host of new ideas. Here’s one. A Nashville-based startup called Hytch Rewards developed an app that companies and governments can use to give their employees incentives to walk, bike, ride share or use public transit. The company’s entire purpose has been to reward commuter behavior that reduces traffic congestion and lowers emissions.

Now it’s pivoting to reward people for staying at home. The office of Tennessee Congressman Jim Cooper is among the first employer to partner on Hytch’s Shelter in Place initiative, which offers a small daily reward to staff for working from home.

— Megan Rose Dickey  (with a cameo from Kirsten Korosec)

Deal of the week

money the station

This week, we’ll highlight Via’s Series E funding round that was led by Exor. The on-demand shuttle startup raised $400 million, TechCrunch learned. Exor contributed $200 million of that raise. The remaining $200 million came from new investors Macquarie Capital, Mori Building and Shell as well as existing investors 83North, Broadscale Group, Ervington Investments, Hearst Ventures,  Planven Ventures, Pitango and RiverPark Ventures.

Noam Ohana, who heads up Exor Seeds, the holding company’s early-stage investment arm, will join Via’s board.

Via gets the ‘deal of the week’ designation not just because its post-funding valuation is now $2.25 billion. Via’s actions during the pandemic offers a little bit of understanding on how companies are adapting and where opportunities may lie. Via has two sides of its business: a consumer-facing shuttle and a “partnerships” division that sells its software platform to cities and transit authorities that allow them to deploy their own shuttles.

As you might expect the consumer-facing shuttles has been adversely affected by COVID-19. There is some promise with the partnerships side of the business, according to CEO Daniel Ramot .

Existing partners, a list that includes transit authorities in Berlin, Germany, Ohio and Malta, have worked with Via to convert or adapt the software to meet new needs during the pandemic. A city might dedicate its shuttle service to transporting goods or essential personnel. For instance, Berlin converted its 120-shuttle fleet transport to an overnight service that provides free transit to healthcare workers traveling to and from work.

“There has been a real interest in emergency services,” Ramot told me, adding he expects to see more demand for the software platform and the flexibility it provides as the pandemic unfolds.

Via isn’t the only company shifting its attention to emergency services. Moovit, an Israeli-based Mobility as a Service startup launched an Emergency Mobilization On-Demand service. The feature was developed to turn unused vehicle fleets into an on-demand solution to get essential workers to their destination. Moovit is also offering transit agencies and operators a transit data manager for free for three months. This management tool lets transit agencies communicate schedule, line changes, and service alerts to users.

Other deals:

  • Qcraft.ai raised what it described as an “eight-figure USD investment” in a seed funding round from IDG Capital, Vision+ Capital, and Tide Capital. Qraft didn’t provide the exact number; VentureBeat reported it is $24 million.
  • Phantom.ai, which has focused on advanced driver assistance systems, raised $22 million in a Series A round led by Celeres Investments and were joined by Ford Motor and Korean telecommunications giant KT. Two existing investors, Millennium Technology Value Partners and DSC Investment, also participated in the round.
  • Seegrid, a company that makes self-driving industrial vehicle for material handling, closed a $25 million growth equity investment from G2VP.
  • GM and Honda deepened their relationship and said they will jointly develop two new electric vehicles slated for 2024. Under the plan, the automakers will focus on their respective areas of expertise. Honda will design the exterior and interiors of the new electric vehicles; GM will contribute its new electric vehicle architecture and Ultium batteries, its OnStar safety and security services and its hands-free advanced driver assistance technology, known as Super Cruise
  • Enovix, which has developed a silicon-based lithium-ion battery, has raised $45 million in new funds. The company said T. J. Rodgers and York Capital participated as well as an unnamed “major new strategic investor.”

Layoffs in a time of COVID-19

We’ve all seen the bars, restaurants, retail shops and salons in our community shuttered because of stay-at-home directives from local and state governments. We’ve started to see the results of those closures in the form of tens of thousands of jobless claims.

Startups are not immune. It is difficult to get an exact number, but Layoffs.fyi is working to track what is going on in the startup world. As of April 4, the site had calculated 126 startups had laid off more than 10,000 people since March 11.

The transportation sector has been among those hardest hit. Some of the companies that have laid off 20% or more of their staff include shared scooter company Bird, peer-to-peer car rental  startups Getaround and Turo, Cabin, freight brokerage KeepTruckin, Moovel and Zipcar.

Maybe your company is actually hiring. If so, go check out Layoffs.fyi, the site doesn’t just list layoffs. The site also includes spreadsheet that list employees who you might want to hire.

From you

I have selected a few excerpts from readers who shared with me — and now you all — their observations about the what is happening in their lives in this COVID-19 world. I have edited these for length and clarity.

I plan to share more with you in the weeks ahead, so please reach out.

From Canoo CPO James Cox, who also advises founders of Routable.ai, a startup that developed a real-time routing engine for high-capacity rides. Cox explained in his email to me that Routable’s CEO wrote a piece in Medium (which you can read here) about providing critical transportation during the COVID-19 pandemic.

As a result of the piece, the Boston Medical Center reached out last week. They’ve now adapted their technology to provide rides to homeless people and solve an allocation problem of which bed in which hospital in Boston to send them to.

They’ve worked directly with the frontline doctors and nurses and IT teams on it. They were previously using a whiteboard, which is obviously not going to scale to solve the problem! The trial launches Monday and is a really interesting short-term pivot that is solely focussed on doing good and adjusting to this crazy world we are now living in.

From Aryan Bhasin, a college student under lockdown in India:

There is no sense of transportation at all. Public transport is becoming interesting because even though all forms of transport are banned (one can only use a vehicle to buy essentials at grocery stores), the Indian government has been sending hoards of buses to get villagers back to their villages — completely blowing apart all rules of social distancing.

Airlines, too, have been a very interesting sector to follow. Most airlines have changed their business models significantly in lieu of COVID-19 as governments organize airlifts for stranded citizens.

From Luis Orsini-Rosenberg, CEO of GetHenry, a Berlin-based micromobility startup that focuses on B2B services. GetHenry, which is part of the Techstars Smart Mobility Accelerator, operates in Austria, Germany and Spain. He shared what is happening in Austria.

All of our business partners in Austria had to close its gates. A day after the lockdown was communicated by the government, we started to reach out to hundreds of restaurants, deliveries, couriers, hospitals, pharmacies and medical services to offer them our vehicles for individual transportation or last-mile delivery cases. Last week, the first e-scooters went out to restaurant partners and medical services.

We are starting to generate some revenues again, but it will not be enough to keep the business alive long-term. We have applied for public aid funds and wage subsidies and will cut costs to an absolute minimum in the coming weeks. Going forward, we will either: wait and do nothing or solely focus on the last-mile delivery service.

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Flagship Pioneering raises $1.1 billion to spend on sustainability and health-focused biotech

Flagship Pioneering, the Boston-based biotech company incubator and holding company, said it has raised $1.1 billion for its Flagship Labs unit.

Flagship, which raised $1 billion back in 2019 for growth stage investment vehicles, develops and operates startups that leverage biotechnology innovation to provide goods and services that improve human health and promote sustainable industries.

“We’re honored to have the strong support of our existing Limited Partners, as well as the interest from a select group of new Limited Partners, to support Flagship’s unique form of company origination during this time of unprecedented economic uncertainty,” said Noubar Afeyan, the founder and chief executive of Flagship Pioneering, in a statement.

In addition to its previous focus on health and sustainability, Flagship will use the new funds to focus on new medicines, artificial intelligence and “health security”, which the company says is “designed to create a range of products and therapies to improve societal health defenses by treating pre-disease states before they escalate,” according to Afeyan.

Flagship companies are already on the forefront of the healthcare industry’s efforts to stop the COVID-19 pandemic. Portfolio company Moderna is one of the companies leading efforts to develop a vaccine for the novel coronavirus which causes COVID-19.

In the 20 years since its launch, Flagship has 15 wholly owned companies and another 26 growth stage companies among its portfolio of investments.

New companies include: Senda Biosciences, Generate Biomedicines, Tessera Therapeutics, Cellarity, Cygnal Therapeutics, Ring Therapeutics, and Integral Health. Growth Companies developed or backed by Flagship include Ohana Biosciences, Kintai Therapeutics, and Repertoire Immune Medicines.

Two of the companies in the Flagship Labs portfolio have already had initial public offerings in the past two years, the company said. Kaleido Biosciences and Axcella Health raised public capital in 2019 and Moderna Therapeutics conducted a $575 million secondary offering earlier this year.

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As national COVID-19 cases top 1000, insurers waive treatment fees and U.S. preps stimulus

The number of COVID-19 cases in the U.S. crossed 1,000 on Tuesday as President Donald Trump met with the nation’s largest insurers and members of his cabinet to discuss how to pay for treatment and lessen the financial blow of the disease’s spread.

With the nation’s healthcare apparatus beginning to get a better understanding of the proliferation of the virus within its borders, efforts have shifted fully from containing the disease’s spread to stopping the contagion from getting worse.

“What we would like the country to realize is that as a nation we can’t be doing the kinds of things we would be doing a few months ago,” said Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases, during the daily briefing from the President’s Coronavirus Task Force. “It doesn’t matter if you’re in a state that has no cases or one case, you have to start taking seriously what you can do now, if and when the infections will come, and they will come.”

The government and private testing facilities Quest and LabCorp are quickly distributing new test kits, with the expectation that 5 million will be made available by the end of the week. The availability of testing means that more cases will be diagnosed and efforts will be made to limit the spread in the new clusters as they’re identified.

However, that rollout might be hampered by a potential shortage of a critical component of the tests — the “RNA extraction” kits, first reported by Politico earlier on Tuesday.

“RNA extraction is the first step in being able to perform” a COVID-19 test, Michael Mina, associate medical director of molecular diagnostics at Brigham and Women’s Hospital in Boston told Politico. “If we cannot perform this step, the [coronavirus] test cannot be performed.”

More roadblocks to testing could limit the identification of clusters of the virus and stop governments from taking the kinds of dramatic action that medical professionals think could be necessary to mitigate the spread of the virus.

“When you have community spread you’re going to ratchet up the kinds of mitigations that you have,” said Fauci. “Everyone should be saying all hands on deck. This is what we need to be doing.”

In New York state that’s meant establishing a containment zone around New Rochelle, a city that has been the focal point for the disease’s spread in the region.

That mitigation strategy looks like an extreme version of the steps that Dr. Scott Gottlieb, the former Food and Drug Administration chief recommended over the weekend.

US response to the COVID-19 coronavirus moves from ‘containment’ to ‘mitigation’

Meanwhile, more companies made calls for remote work for their employees and took steps to shield their workers from financial hardship caused by the disease — either through illness or because of the mitigation strategies imposed by the companies themselves. Their commitments come as President Trump and his economic advisors move forward with a stimulus package to boost the economy and provide a safety net for companies that are paying for workers’ time off.

Earlier in the day in a briefing at the White House, Vice President Mike Pence outlined the steps that insurance companies would be taking to ensure that patients receive the treatment they need.

“All the insurance companies here — either today or before today — have agreed to waive all copays on coronavirus testing and extend coverage for coronavirus treatment in all of their benefit plans,” Vice President Pence said. Last week the government said that Medicare and Medicaid beneficiaries would have their testing and treatment covered.

“They’ve also agreed to cover telemedicine so that anyone, particularly among the vulnerable senior population, would not feel it necessary to go to a hospital or go to their doctor,” said Pence. “They’ll know that telemedicine is covered.”

And for tech companies like Instacart, Postmates, Alphabet, Microsoft, Amazon, Salesforce, and Facebook, which have all committed to paying for hourly workers sickened by the virus or who have lost work due to office closures, the Federal government may provide some financial assistance (not that the tech companies need it).

Google expands work from home recommendation to all North American employees, establishes ‘COVID-19 fund’

Following up on the commitment made yesterday,  Director of the United States National Economic Council Larry Kudlow said at Tuesday’s briefing that the administration is putting together a proposal for a payroll tax cut and tax deferrals for small and medium-sized businesses who are impacted by the spread of COVID-19. 

Technology companies and the billionaires that own them are also chipping in to help local communities and finance initiatives looking for new diagnostics to identify the disease and treatments for the sick.

Earlier today, Amazon announced a $5 million initiative to help local businesses affected by the outbreak of COVID-19 in Seattle, while the Gates Foundation committed $50 million to a $125 million effort to develop treatments.

Still, executives at startups operating clinics in geographies affected by the virus are saying that the infrastructure is not yet in place to adequately and effectively diagnose and treat COVID-19.

“Testing isn’t being done widely,” said one executive at a startup that runs a network of clinics and urgent care centers. “The supplies in the country are just very limited right now.” 

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SpaceX’s spin-outs are helping build LA’s startup ecosystem

During the days when Snapchat’s popularity was booming, investors thought the company would become the anchor for a new Los Angeles technology scene.

Snapchat, they hoped, would spin-off entrepreneurs and angel investors who would reinvest in the local ecosystem and create new companies that would in turn foster more wealth, establishing LA as a hub for tech talent and venture dollars on par with New York and Boston.

In the ensuing years, Los Angeles and its entrepreneurial talent pool has captured more attention from local and national investors, but it’s not Snap that’s been the source for the next generation of local founders. Instead, several former SpaceX employees have launched a raft of new companies, capturing the imagination and dollars of some of the biggest names in venture capital.

“There was a buzz, but it doesn’t quite have the depth of bench of people that investors wanted it to become,” says one longtime VC based in the City of Angels. “It was a company in LA more than it was an LA company.” 

Perhaps the most successful SpaceX offshoot is Relativity Space, founded by Jordan Noone and Tim Ellis. Since Noone, a former SpaceX engineer, and Ellis, a former Blue Origin engineer, founded their company, the business has been (forgive the expression) a rocket ship. Over the past four years, Relativity href="https://techcrunch.com/2019/10/01/relativity-a-new-star-in-the-space-race-raises-160-million-for-its-3-d-printed-rockets/"> has raised $185.7 million, received special dispensations from NASA to test its rockets at a facility in Alabama, will launch vehicles from Cape Canaveral and has signed up an early customer in Momentus, which provides satellite tug services in orbit.

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Boston’s year jump starts as two local startups raise $520M in two rounds

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

Late last week two Boston-based companies raised big rounds. The size of the two investments — each over the $100 million mark — and their rapid succession made them stand out.

The pair of investments raised a question: Is Boston seeing an acceleration in the pace at which it attracts venture capital? Of course, Toast raising $400 million and Flywire raising $120 million within a day of each other does not, by itself, constitute a trend. So we’ve pulled some recent, and historical data from Boston to figure out what’s up.

Today let’s take a look at how many rounds of $50 million or more, and $100 million or more, have been raised in Boston so far in 2020 compared to the city’s full-year 2019 results from each category. We’ll be able to see if Boston is ahead of the pace it set last year. This will let us know if Boston’s venture scene is heating up, or cooling thus far in 2020. (Recall that we wrote about the Northeast in December, and found its venture activity to be intense.)

We’ll start with a quick peek at the Flywire and Toast rounds, and then dig into the data.

Winged Bread

Toast, Boston’s restaurant payment processing unicorn, put together $400 million in fresh funding last week, adding to its preceding haul of just over $500 million in known capital. The company, founded in 2011, has now raised $902 million, according to Crunchbase.

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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