3 views on Jack Dorsey’s decision to step down as Twitter’s CEO

When Twitter co-founder Jack Dorsey announced today his plans to step down as CEO, he didn’t go quietly.

“There’s a lot of talk about the importance of a company being ‘founder-led,'” he wrote. “Ultimately I believe that’s severely limiting and a single point of failure. I’ve worked hard to ensure this company can break away from its founding and founders.”

Dorsey added that he believes “it’s critical that a company can stand on its own, free of its founder’s influence or direction.”

We found this slightly rich, since Dorsey, who is also the CEO and co-founder of fintech giant Square, was Twitter’s first CEO before he stepped down and returned to the role after the five-year reign of Dick Costolo. That’s hardly a lack of founder control.

Still, his comments are pretty counternarrative.

In today’s founder-friendly environment, venture investors often bet on early teams based entirely on their to-date product progress, and founders are increasingly likely to stay at the helm even after their companies have gone public. “[T]here aren’t many founders that choose their company over their own ego,” Dorsey wrote.

After a fun chat about the Dorsey decision on Equity, we hashed out our views about the value of founders who remain in leadership roles long after their companies have reached maturity:

Alex Wilhelm: A call to return to the old normal from the new normal

What’s somewhat incredible about this Dorsey take is that it’s utterly uncontroversial — 15 years ago. Today, sure, but that’s just a mark of how much things have changed.

Recall that investors made the Google founders bring on a business person to be their company’s CEO. You’ve heard of Eric Schmidt. It was commonplace in prior venture eras for founders to step aside from the top job once their company hit scale, as the thinking went that there were folks better suited for the role of scaling a tech company than founders.

What happened to that perspective? Two things. First, major returns from select founder-led businesses. Facebook has done well in financial terms under a single leader. You can throw in a few other names to the mix as well; Coinbase and Airbnb come to mind.

But more important is that venture capitalists have lost much of their prior influence. Gone are the days when VCs could sit in their suburban office parks throne rooms and force founders to come to them. Even more, the explosion in capital available to founders has rendered the core venture conceit — having money to invest — to commodity status. This means that venture folks can’t boss founders around as much as they once could thanks to lower leverage.

So founders get to stay in charge of their companies for as long as they want, often ensconced in a warm blanket of super-voting shares, ensuring lifetime control. Not every VC likes this! Not every VC wants to anoint a king instead of a CEO! And yet, you will not be able to get a single VC to push back on the idea of founder-friendliness, as they all want allocation in the next hot deal. And telling founders that their walking, talking piggy banks might have an opinion, let alone a view that they should be replaced with someone with more operational experience, would not be the move.

But Dorsey is just saying that there are times when founders are not the best folks to lead companies. This is true. While there are great examples of capital creation thanks to long founder tenures, there are perhaps even better examples of the opposite.

Jack is leaving Twitter and we have ~thoughts~

Well, so much for a relaxed post-holiday week on Monday.

News broke this morning that Twitter CEO Jack Dorsey is stepping down from the company entirely. The company’s CTO, Parag Agrawal, will be taking over at the helm. Saleforce exec Bret Taylor will take over as board chairman.

So, Amanda and Natasha and Alex jumped into onto the mics — and, ironically, a Twitter space — to riff on all things Jack and future of Twitter. From the show:

  • Crypto and the CTO, what can we read from the tea leaves?
  • Jack’s dual role, and its detractors.
  • The fact that Twitter’s product work has been great lately, which we don’t want to stop. When is a good time to leave a company, is it on the up and up or when things are quiet?
  • And, finally, Jack’s somewhat biting words regarding founder-led companies, which are, frankly, a bit at odds with his own behavior until now.

The show is back on Wednesday, unless some other major CEO resigns.

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 a.m. PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Co-working and EdTech company Talent Garden acquires Hyper Island to scale online courses globally

Talent Garden is a sort of ‘European-WeWork-meets-General-Assembly’ in that its business model is a combination of co-working spaces (in places like Italy, Austria, Romania, among others) plus online/offline digital courses. It’s also a post Series B company (its last round was $73.5 million), having raised from investors such as 500 Startups and Social Capital. It’s now upping its game further with the acquisition of a majority (54%) stake in Hyper Island a place some Europeans regard as the continent’s ‘Digital Harvard University’.

Hyper Island emerged in the 90s as a school of excellence in the emerging world of UX and games design and has gone on to produce an enormous range of talent, which is routinely hoovered-up by the biggest tech players.

The combination of the two will no doubt expand both’ ability to scale their online courses (and offline, where applicable).

For instance, Talent Garden offers a myriad of business training courses for the digital world, processing around 20,000 students a year. Likewise, Hyper Island has traditionally been best known for its online education, but with Talent Garden, that inline component will no-doubt be expanded. Talent Garden also has 20 campuses across Europe.

Talent Garden Co-founder Rasa Strumskyte told me: “Over 60% of our courses are online and the rest on campus and we will work to expand existing courses to more markets and create new ones, especially online.”

It’s estimated that some 97 million new digital jobs will emerge in the next few years, with the global digital education market estimated to grow from $8.4 billion in 2020 to $33.2 billion by 2025, making it one of the fastest-growing sectors of the post-pandemic era.

Hyper Island has a global presence operating in Europe, Asia-Pacific, North and South America through physical establishments in the UK, Singapore, USA and Brazil.

The combined entity says it will have expected revenues of €50 million in 2022, 20,000 professionals trained a year, 5,000 students placed on the job market “with a 98% placement rate and more than 4,500 start-ups and digital innovators as teachers and community members.”

Davide Dattoli, Talent Garden’s Co-Founder and Executive President said: “Through joining forces with Hyper Island, our project is making a new leap forward. In such an important but fragmented market, we are readier as ever before to act as aggregators and game-changers. We will expand our training offering for the benefit of many current and future workers who are living through this time of digital transition.”

Irene Boni, new CEO of Talent Garden said: “Talent Garden has an opportunity to grow considerably in the in the digital education market in Europe, also by training individuals as well as large companies that want to take advantage of the benefits of digitization — which is certainly a technological issue, but most of all a question of human capital.”

Before joining Talent Garden, Boni had been working for the past ten years in the unicorn Yoox Net a Porter (today part of Richemont luxury group) as CoGeneral Manager. Before that she worked at McKinsey.

Fredrik Mansson, Chairman of Hyper Island said: “Through the alliance with Talent Garden we will jointly get a substantial increase in the resources to accelerate both companies growth and impact in the world.”

Second-hand car auction platform Motorway hits Unicorn status after $190M raise with Index, ICONIQ

It was only in June that Motorway – a U.K. platform on which professional car dealers can bid in an auction for privately owned cars for sale – raised $67.7 million in a Series B round. It’s now raised a $190m Series C funding round led by Index Ventures and ICONIQ Growth, a leading Silicon Valley technology growth investment firm. Existing investors Latitude, Unbound, and BMW i Ventures also participated in the round. The startup is now claiming a valuation of over $1bn.

Part of the reason is the impact of the COVID pandemic on supply chains. Second-hand cars have boomed in price because new cars are being made in smaller numbers due to the lack of supply of computer chips and other essential equipment from China.

On Motorway consumers can sell their car via a smartphone app that also uses computer vision to assess the state of the car. The cars are then bid on by professional car dealers in a daily online auction, with the car collected for free by the winning dealer within 24 hours. Given it’s also a “contactless” process, dealers and car owners increasingly seeking to buy and sell cars online.

Motorway says it now has a network of 4,000 professional car dealers using the platform and claims it has booked a 300% uplift in third-quarter sales to $411 million compared with $105 million last year. Some 100,000 used cars have been sold on Motorway since launch, with over 8,000 cars currently being sold a month, with over $2bn projected completed sales over the next year.

Motorway is also announcing the appointment of James Wilson, former Director of Marketplace Fulfillment for Amazon UK, as Chief Operating Officer.

Tom Leathes, CEO of Motorway, said: “8,000 car sales a month is still less than one percent of UK used car sales – so there’s a massive opportunity ahead.”

Danny Rimer, Partner at Index Ventures, said: “Since joining the board, following our initial investment in June, I have experienced first-hand just how fast Motorway is growing and how agile the team is in scaling the business to support this incredible growth.”

Yoonkee Sull, Partner at ICONIQ Growth said: “The used car market’s move online is only accelerating and we believe Motorway is delivering the best consumer experience and the most differentiated supply to dealers in the UK.”

This latest investment brings Motorway’s all-time raise to $273m since it was founded by Leathes, Harry Jones and Alex Buttle in 2017.

In a call with me Leathes added: “There’s no connection with BMW particularly, but they are automotive specialists so they bring quite a lot of knowledge to the white broader market and trends that are happening. They were also part of the B along with Latitude and Unbound.”

“What motorway does differently to a lot of competitors is that we are we’re not a retailer. We don’t own inventory. We’re a marketplace. And so that that allows us to scale much more quickly,” he said.

Investors: Up your ante at the iMerit ML DataOps Summit 2021

The “oil bidness,” as they say in Texas, is so 20th century. Data, artificial intelligence and machine learning are the power triad fueling the future. If you’re an investor placing bets on the data operations market, you can’t afford to miss the iMerit ML DataOps Summit on December 2, 2021.

This free, one-day virtual conference will explore the AI and ML landscape as it exists today and what it holds for future tech industries across the spectrum including autonomous mobility, healthcare AI and geospatial.

Pro Tip: Attending iMerit ML DataOps Summit is free, but you must register here to attend.

The summit is sponsored by iMerit, a leading AI data solutions company providing high-quality data across computer vision, natural language processing and content that powers machine learning and artificial intelligence applications.

Here are just two presentations that savvy investors won’t want to miss.

Radha Basu, iMerit’s founder and CEO, opens the conference with 2022: The Year of ML DataOps – The Ground Truth of AI. She’ll share why machine learning data operations play a critical role in bringing artificial intelligence to market at scale and unveils why 2022 is shaping up to be the “Year of ML DataOps.”

State of the Industry: Exploring the AI and ML DataOps Market — Join this discussion with Gartner’s Sumit Agarwal, Bessemer Venture Partners’ Ethan Kurzweil and iMerit’s CRO Jeff Mills as they take a deep dive into the current and future state of the artificial intelligence and machine learning data operations market.

Explore the full event agenda, and just look at some of the VC companies that will attend the iMerit ML DataOps Summit. Talk about a prime networking opportunity.

  • Insight Partners
  • Accel
  • Bessemer Venture Partners
  • J.P. Morgan
  • Xerox Ventures
  • DNX Ventures
  • Ridge Ventures
  • Sutter Hill Ventures
  • BMW i Ventures
  • Red Ventures
  • First Ascent Ventures

The iMerit ML DataOps Summit 2021 takes place on December 2, 2021. Investors, take this opportunity to expand your knowledge of these rapidly evolving technologies, place more-informed bets on the AI and ML data ops market and move your business forward. Register today for this free, virtual event.

Vauban, an AngelList-like platform for VCs and angels to run and raise funds, closes $6.3m

It’s always been a slight puzzle why AngelList never really properly took off in Europe, especially when, a few years ago, there was such a dearth of funding options for poorly served European startups. But the reasons are fairly simple when you look at them. For starters, the US tech industry boomed in the last ten years. Why bother spreading your resources, when your home market is taking off, right? Secondly, the sheer complexity of building such a platform across Europe’s myriad regulatory borders would tend to dissuade even the boldest of actors. So this is why the market for such a fund-raising platform has been more or less wide open for such a long time. Until now.

Vauban is a new startup based out of London which provides venture capital fund managers with tools to raise a fund and invest capital. It’s now closed a Post-Seed / Pre-Series A funding round of £4.7m or $6.3m.

Vauban says it will now deepen its tech and regulatory infrastructure, and launch a new office in Luxembourg to strengthen its European / EU offering, alongside its headquarters in London. Thus it will be able to span the entire European ecosystem.

The investment round was co-led by Pentech and Outward, in addition to 7percent Ventures and MJ Hudson. A roster of angel investors have also participated including CEO of Nested Matt Robinson;  the founder of Grabayo, Will Neale; the founder and CEO of ComplyAdvantage, Charles Delingpole; Partner at Augmentum Fintech Perry Blacher; and Al Giles, from legal services provider Axiom.

Vauban allows VCs and angel investors to raise funds, create angel syndicates, and manage fundraising and investment activities. The platform claims it enables users to set-up and deploy Funds and SPVs, from multiple global investment jurisdictions, at “a fraction of the usual time and cost”, covering structuring, legal documents, investor onboarding, banking, and reporting.

Vauban says it is onboarding “at least one new client every day” and current VC users include Anthemis, Passion Capital and Octopus Ventures. In total, it says over 5,000 LPs are using its platform.

Founder and Co-CEO Rémy Astié said: “Our goal is to reduce the friction between those who have the capital, and those who need it to solve humanity’s biggest problems. So, we decided to start by rebuilding the infrastructure on digital rails, because it’s mission-critical in order to provide a great UX to everyone in the industry: GPs, LPs and Founders.”

Vauban has appeared at a time when there is huge investment activity in European tech. Some €41.8bn was raised across Europe in the first half of 2021, up from €32.6bn in 2020.

With VC firms now managing several funds and now often using Special Purpose Vehicles (SPVs) to participate in specific deals, make secondary investments, or set up ‘sidecar’ funds alongside EIS vehicles or their main institutional funds, the whole process is becoming more complex, hence the increasing ‘platformization’ of the space. Doing all this on spreadsheets or, similarly simple tools, will no longer cut it.

Furthermore, European angel investors are more and more professionalizing and syndicating deals to boost dealmaking and dealflow, hence why a dedicated platform is likely to be welcome.

Ulric Musset, Founder and Co-CEO says, “One of the biggest catalysts for new startup creation was the launch of Amazon Web Services in the early 2000s. We believe Vauban will have the same impact that AWS has had on the startup ecosystem.”

Andi Kazeroonian, Investor at Outward VC, commented: “Despite the meteoric growth in alternative investments in recent years, the infrastructure the industry relies on has failed to evolve. Simply creating and administering an investment vehicle remains synonymous with lengthy, cumbersome and expensive processes fragmented across multiple service providers. Vauban’s integrated platform has turned this on its head with a relentless focus on product and user experience, which has unsurprisingly led to exceptional organic growth and its emergence as the standout category leader in Europe.”

Craig Anderson, Partner at Pentech added: “We like to invest in category-leading companies with big ambitions for growth. We believe Vauban is building a modern infrastructure for the alternate asset market which enables users to set up, deploy and manage their funds and SPVs in just a few hours.”

Founder and Co-CEO Rémy Astié told me over a call: “We are different to AngelList in that we are very international and global by design. The idea is to create a global platform, which means that you can raise from LPS anywhere in the world, to invest in a company that’s anywhere in the world. And yeah, we think that’s our core strength, that we build everything with international LPs in mind, so you can raise in multiple currencies.”

Dent Reality raises $3.4M to bring augmented reality into the grocery store

Despite Apple and Facebook investing billions into a “metaverse” future, in recent years there’s been a distinct drop-off in venture deals for startups focused on finding opportunities in augmented reality. Many VCs who have been burned by investments in large-scale efforts like Magic Leap now see the near-term spoils of augmented reality tech as opportunities largely left for big tech companies, but smaller startups are still finding inroads that appeal to investors.

For London-based Dent Reality, one opportunity is in creating specific small-scale experiences that showcase the powers of the technology — and hyper-localized mapping — starting in venues like grocery stores. In the case of a grocery store, the team’s augmented reality platform can provides shoppers with a small-scale layout of the store’s aisles, while integrating with the store’s database to provide shelf-specific data on where to find particular items. AR capabilities allow users to hold their phone up to chart a path to the object of their desire.

CEO Andrew Hart says that retailers are more broadly interested in finding ways to bring their online toolsets into the experience of real-world shoppers because those personalization tools have grown to make online shoppers much more valuable to them. Dent Reality isn’t specifically a platform for finding things in grocery stores, but Hart says that their high density of products makes them an ideal location to stress test their tech.

“We decided on grocery stores, because it’s the hardest challenge that we could have solved,” Hart tells TechCrunch.

Investors see an opportunity in Dent’s efforts, the London startup has closed a $3.4 million seed round led by Pi Labs with participation from Sugar Capital and 7Percent Ventures.

In the years following the launch of Apple’s ARKit augmented reality developer platform, Hart has built up an audience on Twitter showcasing many of the futuristic augmented reality tech demoes he’s created. Dent Reality was an effort to turn some of these future-flung use cases into a present-day tech platform for developers. While smartphones are an imperfect device for augmented reality, they still offer consumers a way to experience and interact with 3D interfaces which Hart believes will be central to the utility of an upcoming wave of augmented reality glasses devices.

“Interfaces in general have been trapped in 2D and phone screens,” Hart says. “There’s so much opportunity in AR for things we just can’t do with a 2D interface.”

Down the road, Dent Reality wants to tackle everything from large office complexes to hospitals to college campuses, leveraging hyper-localized map data, augmented reality and their unique approach to localizing users with public WiFi data and smartphone sensors that doesn’t require buildings to integrate new hardware infrastructure.

Dent Reality raises $3.4M to bring augmented reality into the grocery store

Despite Apple and Facebook investing billions into a “metaverse” future, in recent years there’s been a distinct drop-off in venture deals for startups focused on finding opportunities in augmented reality. Many VCs who have been burned by investments in large-scale efforts like Magic Leap now see the near-term spoils of augmented reality tech as opportunities largely left for big tech companies, but smaller startups are still finding inroads that appeal to investors.

For London-based Dent Reality, one opportunity is in creating specific small-scale experiences that showcase the powers of the technology — and hyper-localized mapping — starting in venues like grocery stores. In the case of a grocery store, the team’s augmented reality platform can provides shoppers with a small-scale layout of the store’s aisles, while integrating with the store’s database to provide shelf-specific data on where to find particular items. AR capabilities allow users to hold their phone up to chart a path to the object of their desire.

CEO Andrew Hart says that retailers are more broadly interested in finding ways to bring their online toolsets into the experience of real-world shoppers because those personalization tools have grown to make online shoppers much more valuable to them. Dent Reality isn’t specifically a platform for finding things in grocery stores, but Hart says that their high density of products makes them an ideal location to stress test their tech.

“We decided on grocery stores, because it’s the hardest challenge that we could have solved,” Hart tells TechCrunch.

Investors see an opportunity in Dent’s efforts, the London startup has closed a $3.4 million seed round led by Pi Labs with participation from Sugar Capital and 7Percent Ventures.

In the years following the launch of Apple’s ARKit augmented reality developer platform, Hart has built up an audience on Twitter showcasing many of the futuristic augmented reality tech demoes he’s created. Dent Reality was an effort to turn some of these future-flung use cases into a present-day tech platform for developers. While smartphones are an imperfect device for augmented reality, they still offer consumers a way to experience and interact with 3D interfaces which Hart believes will be central to the utility of an upcoming wave of augmented reality glasses devices.

“Interfaces in general have been trapped in 2D and phone screens,” Hart says. “There’s so much opportunity in AR for things we just can’t do with a 2D interface.”

Down the road, Dent Reality wants to tackle everything from large office complexes to hospitals to college campuses, leveraging hyper-localized map data, augmented reality and their unique approach to localizing users with public WiFi data and smartphone sensors that doesn’t require buildings to integrate new hardware infrastructure.

South Africa’s Mobiz nabs $4M to expand personalized SMS marketing into the US

Mobiz, a South African startup integrating hyper-personalization into mobile marketing, has raised a pre-Series A round of $ 4 million from HAVAÍC, Futuregrowth, Launch Africa, Allan Gray E-Squared Ventures, CapaciTech and Endeavor’s Harvest Fund.

The investment comes as the startup is ramping up efforts to expand into the U.S. and double down on marketing, sales and account management. Part of the investment will be used to hire more staff in South Africa and support the commercial expansion to the U.S.

Mobiz works as a code-free tool that helps marketers, enterprises and SMBs create and send SMS campaigns to their customers without any marketing experience. CEO Greg Chen founded the company in 2014 came from his 15-year span in the mobile industry, noticing how enterprises in South Africa struggled to target and engage their customers via SMS efficiently.

“In South Africa and Africa general, there are a lot of companies using SMS marketing, but it’s not giving any value to them because they lack digital marketing skills,” he said to TechCrunch over a call. “So we came to enable businesses to deliver personalized digital content via a personal landing page that can be built easily within the Mobiz platform and deliver on the SMS channel.”

Seven years in, the company works with more than 100 brands, such as MultiChoice, Experian, HomeChoice and New Balance. Per data from Mobiz’s website, SMS messages delivered by the company are read within three minutes with a 98% open rate.

The company said that these messages range from offers and specials and loyalty programs to crisis communication and ticket sales.

Having gained a significant market share in the South African SMS marketing space, Mobiz is turning its sights on providing its service to small and medium businesses. However, the target market is in the U.S. and not the African country where the company started. According to Chen, the company sees potential in the U.S.’ small and medium business market because “its product is easy to use and suited for the big market opportunity in the U.S.” 

“How we’ve disrupted our space in South Africa, we see an opportunity over there. So we want to help many SMBs easily produce beautiful customer engagements that are personalized at scale to make them clickable within 10 minutes on their platforms. That’s our thesis and we are very hopeful that we will work out.”

The SMB market in the U.S. is projected to reach $12.5 billion and is expected to register a CAGR of 20.3% from 2019 to 2025, according to a report by Grandview Research.

Chen says that part of this growth is buoyed by the ineffectiveness of email marketing in the U.S (similar to SMS marketing in Africa) where customers are inundated and spammed. 

SMS marketing in the U.S., on the other hand, has more value because customers need to give marketers and businesses consent to receive regular SMS messages from them. For these businesses, it means that customers who provide them with access actually want to engage.

“This has revolutionized the way marketers used to think about things when they used to say more is better. Now it’s talking to the people who actually want to buy from you and spending more money in acquiring them in a consent way and then engage with a very high return investment in the most direct channel and is no more direct channel than SMS,” said the CEO.

With Mobiz, small and medium businesses such as a coffee shop can quickly know the particular type of coffee 100+ customers like because of the information gathered from templates used on the platform. This dynamic and instant customization improves conversions, results, sales, and engagement rates for these businesses. 

This month, the company is going live with more than 200-plus beta users in the U.S. currently active on the platform.

As an early backer of the company, partner at HAVAÍC Grant Rock said his firm has been most impressed with Mobiz’s execution in South Africa. But with the company going across borders, it will need to consider pricing as it faces competition with incumbents such as Textedly and TextMagic. Its subscription fees start at $29 per month and increases depending on the number of SMS businesses and marketers want to send.

Chen adds that now that the company is going full tilt in the U.S. market, plans are set to raise a subsequent Series A round in the coming months.

Kettle books $25M for its reinsurance platform against fire and other catastrophes

One of the most noticeable — and noted — effects of climate change has been its impact on how other events in the environment — be they natural or man-made occurrences — play out: forest fires burn more violently and for longer; floods happen more often and are more severe when they do; and so on, with climate change often cited as the main culprit for all of the catastrophes. Today, an insurance startup called Kettle that believes it has built a better product — specifically, reinsurance underwriting product to insure insurers — to account for catastrophic events like these, by way of better data science, is announcing some funding on the heels of (sadly) more need for its services.

It has closed a Series A of $25 million, money that it will be using to build out tools and services for a specific set of catastrophes in one specific market: fires in California. Acrew Capital is leading the round, with Homebrew, True Ventures, Anthemis, Valor, DCVC, and LowerCarbon Capital also participating.

Kettle’s longer-term plan is to expand to more disaster types, and more states, in the coming years, but for now, fires in California present a particularly acute set of problems.

Events like the Caldor and Dixie fires have contributed to an overall rise in the rate and size of wildfires in California, Kettle says. 2020 saw over 4% of the state burning. On average there are some 10,000 fires every year in California, but the outsized nature of some of the fires seems to be growing, with 14 fires causing 98% of the damage due to wildfire in the state.

Nathaniel Manning, Kettle’s CEO who co-founded the company with Andrew Engler, said that these forces have created a gap in the market for insurance: in short, those who might want to insure their homes against these kinds of wildfires are either unable to, or end up having to pay exorbitant premiums.

Manning said that this is primarily because insurance companies — while ironically being the trailblazers in data science decades ago to determine risk for unexpected events — have failed to keep up with how to use that technology to account for recent developments like climate change, subsequent catastrophic environmental events, and their impact on the things that typically get insured like property, life, automobiles and so on.

“The industry hasn’t updated,” he said. “It’s the classic innovator’s dilemma.” Typically, insurance companies are using the same modeling that they have always used to try to understand what are new kinds of risks, “but you can’t look at the last five years and determine the next ten years anymore.” Communication, and making it more accurate and reflective of the situation at hand, is something of a fixation for Manning: prior to Kettle, he had been the CEO of Ushahidi, the crowdsourced information startup.

Kettle mostly presents itself as a reinsurance technology provider to customer-facing insurance companies (it also currently resells insurance that it underwrites via one channel, aimed at the most expensive properties and their owners, starting at anything over $3 million and up to $10 million).

This is a huge business, typified by incumbent behemoths like Lloyd’s of London, who in theory mitigate the risk insurance companies face when they get the formula wrong. Manning’s belief is that reinsurance companies also are not using enough data, and accurate enough data science or technology overall, to do their jobs to match today’s circumstances.

Reinsurance is currently a $400 billion-a-year industry, but it’s struggling with the cracks just starting to emerge. There has been, Kettle said, a 68% drop in return on equity because catastrophes, and their unintended consequences, have caused more than $1 billion in damage over the past 15 years. This presents an opportunity to provide a different spin on how to provide this service. Kettle’s approach is to pinpoint specific situations — in this case wildfires in California — to provide reinsurance specifically for policies or parts of policies that cover just that.

Using machine learning in which it combines weather data, satellite imagery and other data sets, Kettle applies a lot what has helped AI stand out from non-AI processes in other fields: the ability for machines to simply make more calculations than any human or even group of humans can.

“Normally, an insurance company will run between 10,000 and 100,000 simulations to predict outcomes,” Manning said. “We run over 500 bill This means that it can account better for eventualities to help create pricing that meets them. Kettle claims to have been accurate on its predictions 89% of the time so far. In August, Kettle said that some 26 insurance carriers have been in contact with it to help model their risk, and Manning told me that the company expects three to four commercial deals to close by the end of this year.

There is often something a little weird feeling about technology that essentially is built around the idea of bad events happening, and potentially profits from those things that go wrong. Insurance often falls into the category, not least because a lot of insurance hasn’t really been built that well, to fit modern times, and often feels exploitative, or arbitrary, or there by grace of lobbyists making sure it is mandated, more than any actual need for it. (And insurance fraud speaks to the other side of that inefficiency coin.)

Manning accepts this, but also sees it very differently.

“I think the industry itself is very poorly managed,” he admitted. “The incentives are not in the right direction, and creating a system where the customer and company have different incentive structures is not great.

“But I do think it’s important,” he continued. “As a homeowner, if my home burns down I’ll get its value back. That can be a truly life changing thing.”

For investors, the disruptiveness Kettle is bringing is what attracted them, although longer term you have to imagine that the big incumbents can’t not be considering how to update their data models, too. And that could mean more business for Kettle, or an acquisition, or… death, which is perhaps fitting for a insuretech. For now, though, there’s a lot of potential still for this young startup.

“When you take a minute to think about it, it becomes very obvious why traditional reinsurers can’t accurately underwrite climate risk — their methodologies  look to the past,” says Lauren Kolodny, Partner at Acrew Capital, in a statement. “And our climate is changing in ways that can’t be predicted on the basis of historical data. Kettle is solving a massive, global problem. And we’re so thrilled to deepen our partnership with this incredible team.”