In a statement from the CEO Shanna Tellerman to TechCrunch, Modsy said that “[i]n an effort to maintain a sustainable business during these unprecedented circumstances, we made a round of necessary layoffs and ended a number of designer contracts this week.” The company reaffirmed belief in its “long-term growth plans” in the same statement.
Modsy did not immediately respond when asked about how many individuals were impacted by this layoff. Update: The company declined to share the number of employees impacted.
Modsy bets on individuals looking to glam up their homes by better visualizing the new furniture they want to buy. Users can enter the measurements of their living room and add budget and style preferences, and Modsy will help them with custom designs and finding furniture that fits — literally.
In retrospect there were rumblings that the company was cutting staff. A number of recent reviews from its Glassdoor page note layoffs, with one review from March 25, 2020 calling them “mass” in nature; our original source on the company’s recent cuts also noted their breadth.
You can find other social media posts concerning the company’s layoffs, some noting more than one wave. TechCrunch has not confirmed if the recent layoffs are the first of two, or merely the first set of cuts.
A little over 10 months ago the company was in a very different mood. Back in May of 2019, flush with new capital, Modsy’s CEO said that the “home design space, the inspiration category is thriving.”
“Pinterest just IPO’d, and it seems as if every TV channel is entering the home design category,” she said. “Meanwhile, e-commerce sites have barely changed since the introduction of the Internet.”
Robotics and automation tools are now foundational parts of warehouses and manufacturing facilities around the world. Unlike many other robotics and AI use cases, the technology has moved well beyond the theoretical into practice and is used by small suppliers and large companies like Amazon and Walmart.
There’s no doubt that automation will transform every step of the supply chain, from manufacturing to fulfillment to shipping and logistics. The only question is how long such a revolution will take.
There’s still plenty of market left to transform and lots of room for new players to redefine different verticals, even with many of the existing leaders having already staked their claim. Naturally, VCs are plenty eager to invest millions in the technology. In 2019 alone, manufacturing, machinery and automation saw roughly 800-900 venture-backed fundraising rounds, according to data from Pitchbook and Crunchbase, close to two-thirds of which were still early-stage (pre-seed to Series B) investments.
With our 2020 Robotics+AI sessions event less than two weeks away, we’ve decided to perform temperature checks across some of the hottest robotics sub-verticals to see which trends are coming down the pipe and where checks are actually being written. Just as we did with construction robotics last week, this time, we asked six leading VCs who actively invest in manufacturing automation robotics to share what’s exciting them most and where they see opportunities in the sector:
TC Early Stage SF goes down on April 28, and we are getting pretty damn excited about it!
The show will bring together 50+ experts across startup core competencies, such as fundraising, operations and marketing. We’ll hear from VCs on how to create the perfect pitch deck and how to identify the right investors for you. We’ll hear from lawyers on how to navigate the immigration process when hiring, and how to negotiate the cap table. And we’ll hear from growth hackers on how to build a high-performance SEO engine, and PR experts on how to tell your brand’s story.
And that’s just the tip of the iceberg.
Today, I’m pleased to announce four more breakout sessions.
Toney is the founding managing partner of Plexo Capital, which was incubated and spun out from GV. Before Plexo, Toney was a partner with Comcast Ventures, where he led the Catalyst Fund, and then moved to GV where he focused on marketplace, mobile and consumer products. Toney also has operational experience, having served as the GM of Zynga Poker, the company’s largest franchise at the time.
Think Like a PM for VC Pitch Success
Your pitchdeck is not just a reflection of your business, it’s a product unto itself. Your startup’s success, and avoiding the end of your runway, depends on the conversion rate of that product. Hear from Plexo Capital founding partner Lo Toney about how thinking like a PM when crafting your pitch deck can produce outstanding results.
Krystina Rubino and Lindsay Piper Shaw
Shaw and Rubino are marketing consultants for Right Side Up, a growth marketing consultancy. Prior to Right Side Up, Shaw scaled podcast campaigns for brands like quip, Lyft and Texture, and has worked with brands like McDonald’s, Honda, ampm, and Tempur Sealy. Rubino has worked with companies across all stages and sizes, including Advil, DoorDash, P&G, Lyft and Stitch Fix.
Why You Need Podcasts in Your Growth Marketing Mix
Podcast advertising is widely viewed as a nascent medium, but smart companies know it can be a powerful channel in their marketing mix. Opportunity is ripe — get in early and you can own the medium, box out competitors and catapult your growth. Krystina Rubino and Lindsay Piper Shaw have launched and scaled successful podcast ad campaigns for early-stage startups and household name brands and will be sharing their strategies for companies to succeed in this often misunderstood channel.
Jake Saper, the son of serial co-founders, has been obsessed with entrepreneurialism from a young age. His origin in venture capital started at Kleiner Perkins, and he moved on to become a partner at Emergence in 2014, where he became a Kauffman Fellow. He serves on the boards of Textio, Guru, Ironclad, DroneDeploy, and Vymo, and his self-described “nerdy love” of frameworks has only grown over the years.
When It Comes to Fundraising, Timing Is Everything
There are some shockingly common timing mistakes founders make that can turn an otherwise successful fundraise into a failure. We’ll talk through how to avoid them and how to sequence efforts from the time you close your seed to ensure you find the right partner (at the right price!) for Series A and beyond.
Conyers has been in the communications industry for 15 years, currently serving as the senior director of Corporate Communications at Postmates . Before Postmates, Conyers served as a VP at Brew PR, working with clients like Automattic, NetSuite, Oracle, Doctor on Demand and about.me. During that time, she also found herself on BI’s “The 50 Best Public Relations People In The Tech Industry In 2014” list.
The Media Is Misunderstood, But Your Company Shouldn’t Be
With the media industry in a state of flux, navigating the process of telling your story can be confusing and overwhelming. Hear from Postmates Senior Director of Corporate Communication April Conyers on how startups should think about PR, and how to get your message across in a hectic media landscape.
Early Stage SF goes down on April 28, with more than 50 breakout sessions to choose from. However, don’t worry about missing a breakout session, because transcripts from each will be available to show attendees. And most of the folks leading the breakout sessions have agreed to hang at the show for at least half the day and participate in CrunchMatch, TechCrunch’s great app to connect founders and investors based on shared interests.
Here’s the fine print. Each of the 50+ breakout sessions is limited to around 100 attendees. We expect a lot more attendees, of course, so signups for each session are on a first-come, first-serve basis. Buy your ticket today and you can sign up for the breakouts we are announcing today, as well as those already announced. Pass holders will also receive 24-hour advance notice before we announce the next batch. (And yes, you can “drop” a breakout session in favor of a new one, in the event there is a schedule conflict.)
Accepted ventures will gain $50,000 in equity-based funding and enter SportsTech’s three-month accelerator boot camp — with sports industry support and mentorship — to kick off at Comcast’s Atlanta offices August 2020.
Boomtown Accelerators will join Comcast in managing the SportsTech program, with both sharing a minimum of 6% equity in selected startups.
Industry partners, such as NASCAR and U.S. Ski & Snowboard, will play an advisory role in startup selection, but won’t add capital.
An overarching objective for SportsTech emerged during conversations with execs and Jenna Kurath, Comcast’s VP for Startup Partner Development, who will run the new accelerator.
Comcast and partners aim to access innovation that could advance the business and competitive aspects of each organization.
From McDonald’s McD Tech Labs to Mastercard’s Start Path, corporate incubators and accelerators have become common in large cap America, where companies look to tap startup ingenuity and deal-flow to adapt and hedge disruption.
Toward its own goals, SportsTech has designated several preferred startup categories. They include Business of Sports, Team and Coach Success and Athlete and Player Performance.
SportsTech partners, such as NASCAR, hope to access innovation to drive greater audience engagement. The motorsport series (and its advertising-base) has become more device-distributed, and NASCAR streams more race-day data live, from the pits to the driver’s seat.
“The focus has grown into what are we going to do to introduce more technology in the competition side of the sport…the fan experience side and how we operate as a business,” said NASCAR Chief Innovation Officer Craig Neeb.
“We’re confident we’re going to get access to some incredibly strong and innovative companies,” he said of NASCAR’s SportsTech participation.
U.S. Ski & Snowboard — the nonprofit that manages America’s snowsport competition teams — has an eye on performance and medical tech for its athletes.
“Wearable technology [to measure performance]…is an area of interest…and things like computer vision and artificial intelligence for us to better understand technical elements, are quite interesting,” said Troy Taylor, U.S. Ski & Snowboard’s Director of High Performance.
Credit: U.S. Ski & Snowboard
Some of that technology could boost prospects of U.S. athletes, such as alpine skiers Tommy Ford and Mikaela Shiffrin, at the 2022 Beijing Winter Olympics.
“We asked ourselves, ‘could we do more?’ The notion of an innovation engine that runs before, during and after the Olympics. Could that give our Team USA a competitive edge in their pursuit for gold?,” said Jenna Kurath.
The answer came up in the affirmative and led to the formation of Comcast’s SportsTech accelerator.
Beyond supporting Olympic achievement, there is a strategic business motivation for Comcast and its new organization.
“The early insights we gain from these companies could lead to other commercial relationships, whether that’s licensing or even acquisition,” Will McIntosh, EVP for NBC Sports Digital and Consumer Business, told TechCrunch.
SportsTech is Comcast’s third accelerator, and the organization has a VC fund, San Francisco-based Comcast Ventures — which has invested in the likes of Lyft, Vimeo and Slack and racked up 67 exits, per Crunchbase data.
After completing the SportsTech accelerator, cohort startups could receive series-level investment or purchase offers from Comcast, its venture arm or industry partners, such as NASCAR.
“Our natural discipline right now is…to have early deliverables. But overtime, with our existing partners, we’ll have conversations about who else could be a logical value-add to bring into this ecosystem,” said Bill Connors, Comcast Central Division President.
As Airbnb absorbs more and more of the demand for housing, it’s exploring how to monetize opportunities beyond vacation rentals. A marketplace for longer term corporate housing could be a huge business, but rather than build that itself, Airbnb is making a strategic investment in one of the market leaders called Zeus Living and will list its homes on the Airbnb site.
In just four years of redecorating landlords’ homes and renting them for 30+ day stays to relocated workers, Zeus Living has grown to a $100 million revenue run rate. It boosted revenue 300% in 2019, and now has 250 employees and over 2000 homes under management. Zeus make money by charging landlords one free month of usage, and marking up the rent charged to customers. It could rent out a $4,000 per month home for $5,000 plus take the extra month to earn $16,000 in a year.
Zeus CEO and co-founder Kulveer Taggar tells me “I fundamentally believe that a lot of human potential is bound by location. At Zeus, we’re deeply committed to making it easier for people to live where opportunity takes them.” It’s already hosted 27,000 residents for a total of 650,000 nights.
Strong margins, swift momentum, and that megatrend of more mobile workforces have earned Zeus Living a new $55 million Series B round it’s announcing on TechCrunch today. The funding comes from Airbnb, Comcast, CEAS Investments, and TI Platform Management, plus existing investors Alumni Ventures Group, Initialized Capital, NFX, and Spike Ventures. The funding comes at a $205 million post-money valuation.
“The opportunity here is huge, consumer spend is going toward housing and everyone needs to stay somewhere. But it’s Kulveer and Zeus’ go-to-market strategy that is impressive” says Initialized co-founder and managing partner Garry Tan. “Zeus decided to start with corporate rentals, which we believe is the best go-to-market since it is the highest margin, and capital efficiency wins in a space with many competitors. Corporate needs are longer term, consistent and predictable, and partnering with Airbnb strengthens this approach as they expand to build a platform for every city.”
Zeus co-founder and CEO Kulveer Taggar
Zeus had previously raised a $2.5 million seed and then an $11.5 million Series A led by Initialized, as well as $10 million in debt to cover taking on properties in the San Francisco Bay, Los Angeles, New York, Seattle, and D.C. Now that it’s scaling up, Zeus could add a sizable debt facility to cover the risk of filling apartments with employees from clients like Brex, Disney, ServiceTitan, and Samsara.
Instead of moving into a bland corporate housing block, struggling to find a place themselves, or ending up in expensive long-term Airbnbs, workers moving to new cities can go to Zeus. It takes over apartments, handles maintenance, and fills them with branded comforts like Parachute bedding and Helix mattresses that Zeus gets at bulk rates. The startup is betting that as workers move between jobs and cities more frequently, fewer will own furniture and instead look for furnished homes like those Zeus offers.
Thanks to the premium stays it provides, Zeus charge can clients a lucrative rate while Taggar claims his service is still about half the price of standard corporate housing. For property owners, Zeus makes it easy to get a consistent rent paycheck with none of the traditional landlord work. Zeus takes care of cleaning and key exchanges so owners don’t need to do any chores like if they were running an Airbnb. Its goal is to get the first renters in within 10 days of taking on a property.
The new funding will help Zeus expand to more neighborhoods and cities while retaining a focus on breadth within each market so clients have plenty of homes to pick from. The startup will be revamping its booking and invoicing tools for enterprise partners, and improving how it sources real estate. Meanwhile it will be investing in customer care to maintain its high 70s NPS scores so relocated workers brag to their colleagues about how nice their new place is.
“Finding housing is stressful and time-consuming for both individuals and employers. As someone who has moved countries four times, I’ve lived through that tension” says Taggar. Zeus Living has built technology to remove complexity from housing, turning it into a service that enables a more mobile world.”
Taggar had gotten into the real estate business early, remortgaging his mom’s house to buy a condo in Mumbai to rent out. After moving to the US, he built and sold Y Combinator-backed auction tool Auctomatic with co-founder and future Stripe starter Patrick Collison. It was while working on NFC-triggered task launcher Tagstand that Taggar recognized the hassle of both finding new corporate housing and reliably renting out one’s home. With Uber, Stripe, and more startups growing huge by simplifying processes that move a lot of money around, he was inspired to do the same with Zeus Living.
The PropertyTech Wars
“Modern professionals travel more frequently, stay longer, and seek accommodations that feel like home. As more companies look to Airbnb for Work for extended-stay and relocation solutions, this segment remains a key focus for Airbnb,” says David Holyoke, Global Head of Airbnb For Work. “We have great alignment with the Airbnb team in terms of serving the changing needs of business travelers that want the comforts of home when traveling for extended 30-day stays for work or a project” Taggar follows.
Zeus Living’s co-founders
Zeus’ biggest threat is that it could get overextended, misjudge demand, and end up on the hook to pay rent for two-year leases it can’t fill. And now with more funding, there will be added scrutiny regarding its margins, especially in the wake of the WeWork implosion.
Taggar recognizes these threats. “This is a business where we have to be focused on maximizing the gross profit we generate for the investments we make, with the least amount of risk. At Zeus Living, we’re continuously improving the ways we predict and secure demand.” He’s also building out teams on the ground in different markets to ensure regulatory compliance and push for more conducive laws around 30+ day rental stays.
Property tech has become a heated space, though, so Zeus will have heavy competition. There are traditional corporate housing providers, pure marketplaces that don’t deal with logistics, and direct competitors like $66 million-funded Domio, and juggernaut Sonder which has raised a whopping $360 million. Zeus might also see its model copied abroad before it can get there.
At least with Airbnb as an investor, Zeus won’t have to fear a bitter battle with the tech giant over corporate housing. Instead, Airbnb could keep investing to coin off this adjacent market while listing Zeus properties, or potentially acquired the startup one day. For now though, Taggar just wants to prove startups can be accountable in the real world, acknowledging that taking over people’s homes is “a lot of responsibility! Our homes represent hundreds of millions of dollars of assets we manage and we take that very seriously.”
Rohan Malhotra and Arjun Malhotra left their jobs in London and Silicon Valley to explore opportunities in India in late 2013. A year later, the brothers launched Investopad to connect with local startup founders and product managers and built a community to exchange insight. Somewhere in the journey, they wrote early checks to social-commerce startup Meesho, which now counts Facebook as an investor, Autonomic, which got acquired by Ford, and HyperTrack, among others. Now the duo is ready to be full-time VCs.
On Monday, they announced Good Capital, a VC fund that would invest in early-stage startups. Through Good Capital’s maiden fund of $25 million, the brothers plan to invest in about half a dozen startups in a year and provide between $100,000 to $2 million in their Seed and Series A financing rounds, they told TechCrunch in an interview last week.
“Through Investopad, we helped startup founders raise money, provided guidance, and helped them find customers. We did a ton of events, and learned about the market,” said Arjun, who worked at Capricorn Investment Group and also acted in 2014 blockbuster Bollywood title “Highway.”
Investopad’s first fund portfolio stands at a gross IRR of 138.3% and nine of its 12 investments have realised returns, with every dollar invested already returned, the brothers said.
One example of such startup is the social-commerce startup that has amassed over 2 million users who are engaging with the platform to sell products across India.
In a statement, Vidit Aatrey, cofounder and CEO of Meesho, said, “Rohan and Arjun were our earliest investors. They have a phenomenal global network of entrepreneurs, operators and investors. They helped us early on with introductions to such people; who brought not only capital but, more importantly, valuable operational inputs which helped us learn quickly and find product-market fit faster. While we’ve grown from 2 people to over 1,000+ at Meesho, they remain close confidants!”
Good Capital will focus on investing in startups that are building solutions that address users who have come online in India for the first time in the last two years, they said.
“We don’t have laser-focus on a particular sector,” said Rohan, who previously worked as a sports agent in the talent management business. “Our primary focus is to help startups that are taking a bottom-up approach.”
The VC fund has completed its first close of $12 million from Symphony International Holdings, a host of European family offices, and a number of other Silicon Valley entrepreneurs.
Sundeep Madra, CEO of Ford X, and Yogen Dalal, Partner Emeritus at the Mayfield Fund and founder of Glooko, and Dinesh Moorjani, Managing Director of Comcast Ventures and founder of Hatch Labs and Tinder, will serve as advisors to Good Capital.
“Rohan and Arjun have a unique ability to identify trends and bring together founders and investors to go after the unique problems that India needs to have solved. They operate with a sense of urgency and innovation which is a major key at the seed-stage.” said Madra, who has invested in companies such as Uber and Zenefits.
The fund has also set up an investment committee whose members are Sanjay Kapoor, former CEO of Airtel and now a senior advisor at BCG, Rahul Khanna, formerly a managing partner at Cannan Partners and now founder of Trifecta Capital, and Kashyap Deorah, a serial entrepreneur who is currently building HyperTrack.
Good Capital has also already made two investments: SimSim, a video-based e-commerce platform that is trying to replicate the experience consumers have in offline stores, and Spatial, a cross-reality platform that allows people to collaborate through augmented reality. Garrett Camp, a founder of Uber and Expa, and Samsung Next have also invested in Spatial.
The VC fund is also interested in funding business-to-business startups, though they say these startups would ideally be building solutions for overseas markets. “There we are generally targeting makers, developers and designers, rather than solving problems for heavy-duty sales businesses.”
The arrival of Good Capital should help the Indian startup community, which today has to rely on a handful of VC funds that invest in early stage startups. “Conventionally, funds have targeted the top of the pyramid by exploring visible opportunities and replicated US companies and models,” said Moorjani in a statement.
“In contrast, Good Capital’s first principles thinking applied to India’s larger economy, which is coming online at scale with a supporting ecosystem for the first time, has been refreshing to see. The team is beyond talented.,” he added.
Even as Indian tech startups raised a record $10.5 billion in 2018, early-stage startups saw a decline in the number of deals they participated in and the amount of capital they received.
Early-stage startups participated in 304 deals in 2018 and raised $916 million in funds last year, down from $988 million they raised from 380 rounds in 2017 and $1.096 billion they raised from 430 deals the year before, research firm Venture Intelligence told TechCrunch.
As for Investopad, the brothers said they have hired a number of people who will now continue its operation.
Sarah Paiji had the idea to launch the eco-friendly refillable cleaning supply retailer Blueland after hearing about the abundance of microplastics in the water she was using to dilute her child’s baby formula.
Paiji wanted to cut back on her plastic consumption, and reduce her contribution to the overabundance of plastic waste in the environment, but felt that as a consumer she didn’t have a choice. So the former venture capital investor from the consumer startup brand studio Launch set out to create one.
The answer she came up with is Blueland, a new line of cleaning products that launches today. Blueland’s cleaners — a bathroom cleaner, glass cleaner, and multi-purpose cleaner — are sold as tablets that customers add to the cleaning containers the company provides.
“These cleaners are mostly water,” says Paiji. “I’m paying for a plastic bottle that I don’t really need and water which I have at home for free.”
By adding water to the company’s cleaning formulation in refillable containers the company sells, Blueland thinks its customers over time can eliminate the need for 100 billion single-use plastic bottles in the U.S.
Blueland cleaning products/Image courtesy of Blueland
To provide the initial marketing push and continue its product development and sales efforts, the company has raised $3 million in a new round of funding from Global Founders Capital, Comcast Ventures, Cross Culture Ventures, BAM Ventures, along with individual investors like Justin Timberlake and the founder of the Los Angeles-based sustainable fast food chain, Sweetgreen, Nicholas Jammet; and sustainable online food retailer, Thrive Market, Nick Green.
After coming up with the idea Paiji had to find a manufacturer, who’d be willing to help reinvent an entire product category for a startup retailer.
Blueland also wasn’t Paiji’s first choice for a new startup idea. That would have been a botox bar that would sell cosmetic treatments to folks who wanted treatments, but didn’t want to pay high prices for them.
After putting the brakes on the botox business, Paiji reached out on LinkedIn to Syed Naqzi, the director of research and development at Method with her pitch for the cleaning product business.
With Naqzi on board, the company began filing patents for its unique process and the products it’s bringing to market, says Paiji. “Everything is proprietary everything is backed by patents,” she says.
While Paiji won’t disclose who the manufacturing partner is for the cleaning supplies, she did note that the company was in an adjacent consumables category to cleaners.
Within a year of reaching out to Naqzi last April, Paiji had a product supplier and the $3 million she needed to go to market.
Joining Paiji and Naqzi in setting up the business was John Moscari, a fellow Harvard Business School classmate of Paiji’s who’d launched a company called Bundle Organics.
The company’s refills cost $2 and the initial cleanup kits clock in at $30. “With the refills it’s unequivocally cheaper than buying a full bottle on the market,” says Paiji.
The refills are 300 times lighter and 200 times smaller than traditional packaging for cleaning supplies and the company has plans to develop new products with similar packaging footprints across adjacent categories each quarter.
“Just from a shipping perspective alone we cut out 90% because one to one we’re that much smaller,” says Paiji.
Last year, a coalition of major manufacturers of consumer packaged goods and foods formed Loop — an ambitious project to create zero-waste supply chains for their products with consumers who’d opt in.
Taking their cues from the milkman models of years long passed, companies like Procter & Gamble, Nestle, PepsiCo, Unilever, worked with the company TerraCycle to develop an updated version of the plan.
Consumers get refillable containers and as they use up the items, they can call a Loop pick up driver to take their containers away to be refilled or send them off at a UPS store.
Paiji argues that Blueland does something different — with lower carbon emissions coming from the process and a greater impact on reuse.
“We’ve completely invented a new form factor for this,” she says. “And we’re providing a more convenient way for people to reuse and refill.”
Orai, a startup building communication coaching tools, is announcing that it’s raised $2.3 million in seed funding.
CEO Danish Dhamani said that he co-founded the company with Paritosh Gupta and Aasim Sani to address a need in his own life — the fact that he was “held back personally and professionally” by lackluster “communications skills and public speaking skills.”
Dhamani said he attended Toastmasters International meetings hoping to improve those skills, where he came to a surprising conclusion — that he could build an algorithm to analyze your speaking abilities and give tips on how to improve.
To be clear, Orai isn’t necessarily trying to replace groups like Toastmasters, or individual speaking coaches. However, Dhamani said the “status quo” involves a “one-to-one” approach, where a human coach gives feedback to one person. Orai, on the other hand, can coach “entire IT teams, entire student bodies.”
“I am a big advocate of personalized, one-on-one coaching as well,” he said. “Orai not replacing that, it’s enhancing that if used together.”
The startup has created iOS and Android smartphone apps to demonstrate the technology, which offer focused lessons and then assess your progress by analyzing recordings of your voice. (I did the initial assessment, and although I was praised for not using any “filler words,” I was told that I need to slow down — something I hear a lot.)
The real business model involves selling the tools to businesses, who can then assign Orai lessons to salespeople or other teams, create their own lessons and track everyone’s progress.
Attendees of TechCrunch’s Disrupt SF hackathon may recognize the team, which presented a body language analyzer in 2017 called Vocalytics. So you can probably guess that Dhamani’s plans go beyond audio.
As tech companies continue their race to control the smart home, a promising energy startup has raised a round of funding from traditionally-tech and strategic investors, for a geothermal solution to heat and cool houses. Dandelion Energy, a spinout from Alphabet X, has raised $16 million in a Series A round of funding, with strategic investors Comcast Ventures leading the round along with GV, the investment arm of Alphabet formerly known as Google Ventures.
Lennar Corporation, the home building giant, is also coming in as an investor, as are previous backers NEA, Collaborative Fund, Ground Up, and Zhenfund, and other unnamed investors. Notably, Lennar once worked with Apple but is now collaborating with Amazon on smart homes.
As a side note, Dandelion’s investment is a timely reminder of how central “new home” startups are right now in smart home plays. Amazon just yesterday announced one more big move in its own connected home strategy with the acquisition of Mesh WiFi startup eero, which helps extend the range and quality of WiFi coverage in a property.
This is the second funding round for Dandelion in the space of a year, after the company raised a seed round of $4.5 million in March 2018, a mark of how the company has been seeing a demand for its services and now needs the capital to scale. In the past year, it had accrued a waitlist of “thousands” of homeowners requesting its services across America, where it is estimated that millions of homeowners heat their homes with fossil fuels, which are estimated to account for 11 percent of all carbon emissions.
The company is based out of New York, and for now New York is the only state where its services are offered. The funding may help change that. It will be used in part for R&D, but also to hire more people, open new warehouses for its equipment and supplies, and for business development.
It’s not clear what Dandelion’s valuation is — we will be asking — but in its last round the company had a modest post-money valuation of $15 million, according to PitchBook. It has now raised $23 million in total since spinning out from Alphabet X, the company’s moonshot lab, in May 2017.
The premise of Dandelion’s business is that it provides a source of heating and cooling homes that takes people away from consuming traditional, energy grid-based services — which represent significant costs, both in terms of financial and environmental impact. If you calculate usage over a period of years, Dandelion claims that it can cut a household’s energy bills in half while also being significantly more friendly for the environment compared to conventional systems that use gas and fossil fuels.
While there have been a number of efforts over the years to tap geothermal currents to provide home heating and cooling, many of the solutions up to now have been challenging to put in place, with services typically using wide drills and digging wells at depths of over 1,000 feet.
“These machines are unnecessarily large and slow for installing a system that needs only a few 4” diameter holes at depths of a few hundred feet,” Kathy Hannun, cofounder and CEO of Dandelion, has said in the past. “So we decided to try to design a better drill that could reduce the time, mess and hassle of installing these pipes, which could in turn reduce the final cost of a system to homeowners.”
The smaller scale of what Dandelion builds also means that the company can do an installation in one day.
While a pared-down approach this means a lower set of costs (half the price of traditional geothermal systems) and quicker installation, that doesn’t mean that upfront costs are non-existent. Dandelion installations run between $20,000 and $25,000, although home owners can subsequently rack up savings of $35,000 over 20 years. (Many choose to finance the installation which also brings down the upfront cost.)
This is also where Lennar comes in. The company is in the business of building homes, and it has been investing in particular in the idea of building the next generation of homes by incorporating better connectivity, more services — and potentially alternative energy sources — from the ground up.
“We’re incredibly excited to invest in Dandelion Energy,” said Eric Feder, Managing General Partner for Lennar Ventures, in a statement. “The possibility of incorporating geothermal heating & cooling systems in our new homes is something we’ve explored for years, but the math never made sense. Dandelion Energy is finally making geothermal affordable and we look forward to the possibility of including it in the homes Lennar builds.”
The fact that Comcast is among the investors in Dandelion is a very notable development.
The company has been acquiring, and taking strategic stakes in, a number of connected-home businesses as it builds its own connected home offering, where it not only brings broadband and entertainment to your TV and come computers, and also provides the tools to link up other connected devices to that network to control them from a centralised point.
Dandelion is literally “off grid” in its approach to providing home energy, and while you might think that it doesn’t make sense for a company that is investing in and peddling services and electronic devices connected to a centralised (equally electricity-consuming) internet to be endorsing a company that’s trying to build an alternative, it actually does.
Viewed in terms of the segment of customers that Comcast is targeting, it’s selling a bundle of connected home services to a demographic of users who are not afraid of using (and buying) new and alternative technology to do things a different way from how their parents did it. Dandelion may not be “connected” but even its approach to disconnecting will appeal to a person who may already be thinking of ways of reducing his or her carbon footprint and energy bills (especially since they may be consuming vast amounts of electricity to run their connected homes).
“The home heating and cooling industry has been constrained by lack of innovation and high-costs,” said Sam Landman, managing director of Comcast Ventures, in a statement. “The team at Dandelion and their modern approach to implementing geothermal technology is transforming the industry and giving consumers a convenient, safe, and cost-effective way to heat and cool their homes while reducing carbon emissions.”
Landman and Shaun Maguire, a partner at GV, will both be joining Dandelion’s board with this round.
“In a short amount of time, Dandelion has already proven to be an effective and affordable alternative for home heating and cooling, leveraging best-in-class geothermal technology,” said Maguire, in a statement. “Driven by an exceptional leadership team, including CEO Kathy Hannun, Dandelion Energy is poised to have a meaningful impact on adoption of geothermal energy solutions among homeowners.”
To better measure aptitude of applicants, online career marketplace Hired has acquired Py, which helps companies like Opendoor and Niantic identify talent with app-based interactive courses on Python, iOS development and more.
As part of the deal, Hired will launch a new feature called Hired Assessments, leveraging tools from the Py platform, as well as a tiered subscription model. The base-level package, called Hired Essential, will provide enhanced search functionality, tools to help candidates arrive to interviews as prepared as possible and more. A spokesperson for Py declined to disclose terms of the deal but did say that Py counts 500,000 users who’ve completed 2 million coding assignments. They also offered this little anecdote:
Py’s co-founder, Derek Lo had initial conversations with Hired’s VP of Strategic Development, Andre Charoo back in October of 2018. But it wasn’t until Lo randomly met one of Hired’s co-founders at a Y Combinator networking event that the partnership started to come into fruition. The Hired co-founder that Lo met was Allan Grant — also a part of the Y Combinator community — and he wasn’t aware of the initial conversations but agreed to have Lo over to his house the next day to share advice about running an early-stage startup. Over coffee at Grant’s house, Lo learned a lot about the purpose of Hired and began to understand why Hired would be a great fit for his product and team. From there, the rest was history.
Derek Lo, founder and chief executive officer of Py, first began building the mobile app in May 2016 before completing Y Combinator’s accelerator program in summer 2017. Lo started the company in his dorm room after becoming frustrated with Yale’s computer sciences courses, which he felt were useless when it came to real business applications.
Lo has joined Hired as its head of product.
In a conversation with TechCrunch while Py was still completing the accelerator, Lo said the company had decided to turn down a $1 million investment offer because it was unnecessary for such an early-stage startup. At the time, the Py team had brought in $20,000 in pre-seed funding from Dorm Room Fund, plus another $100,000 from the Yale Venture Creation Program. In total, Py has raised $615,000.
“With Py founder Derek Lo, we saw a shared vision for making hiring easier for everyone,” Hired’s vice president of strategic development Andre Charoo said in a statement. “For companies, this means helping them hire in-demand talent quickly and predictably, and for job seekers, it is about empowering them to land their dream job. By combining Py’s technical assessment expertise with Hired’s dependable pipeline of first-rate talent, we’re ready to transform today’s hiring standards.”
Hired Assessments will include online coding quizzes, standardized testing, projects and a “live code” environment where hiring managers can “view, rewind, fast forward and save live candidate challenges.” The features are customizable so companies can tweak assessments based on their hiring needs.
Hired Essential will use machine learning to curate lists of candidates for available roles, as well as help candidates arrive at interviews prepared with a clear outline of hiring steps, expectations and tips.
Founded in 2012, San Francisco-based Hired is backed by venture capital firms including Comcast Ventures, Sherpa Capital, Lumia Ventures and Uncork Capital. To date, the business has raised $133 million, most recently at a post-valuation of $550 million, according to PitchBook.