Product Management Confabulation
What Product Managers are talking about.
finmid is building an embedded finance product that targets that relationship between marketplaces and sellers, and raised a Series A round to further build out its product and enter new markets.
© 2024 TechCrunch. All rights reserved. For personal use only.
Germany-based Earlybird Health announced the final closing of its second fund of €173 million (around $185 million). This is more than twice the size of Earlybird's first healthcare-focused fund.
© 2024 TechCrunch. All rights reserved. For personal use only.
Product-led growth (PLG) is defined by VC firm OpenView as “a growth model where product usage drives customer acquisition, retention and expansion.” This is a major shift from growth driven by hands-on selling efforts, with broader implications than it may initially seem.
A key difference is that the most successful product-led companies only reach out to a small portion of users that sign up for their product — 14%, according to OpenView’s third annual product benchmarks report.
For companies hoping to emulate the success of Figma, Slack, Zoom and the like, this leaves a tough question to solve: Which of their users should they reach out to, and when?
Uncovering sales opportunities is what Swedish startup Ripe is offering its product-led clients. The role of its platform is to help them “understand which users are both successful and fit their ideal customer profiles, and what next steps to take with them,” its CEO and co-founder, Elin Lütz, told TechCrunch.
Lütz and her co-founder, Jonatan Dykert, have firsthand experience building SaaS products and realized that product-led companies don’t necessarily need more data: They just need to be able to connect the dots between product and sales, which is what Ripe does.
The duo joined forces to found their company in Stockholm in 2021, which was initially called Chimer. Lütz explained that the new name is meant to reflect the company’s role in helping customers “target the right ripest accounts within [their] own existing use cases.”
The data that Ripe is relying on comes from clients themselves — but from various sources that were previously disconnected and inaccessible to sales teams.
“We saw that there was something very strange happening with data being stuck in the product […] and not served throughout the whole organization,” Lütz said. “There was a huge discrepancy between what sales worked with and how product worked.”
In a product-led company, it is critical for customer success teams to have access to product usage data; otherwise, they have no way of knowing which users are worth their time. Static profile data doesn’t help much; they need to know who’s engaging with the product and how.
Think of signing up for a freemium product: How will the company behind it know if you are just a single user who will never leave the free tier or someone who represents an enterprise-sized lead? In a sales-driven process, the sales team would already know. With bottom-up adoption, which is more and more common, answering this question requires connecting data.
The fact that more B2B companies are adopting a freemium model undoubtedly creates tailwinds for companies like Ripe.
“The way that enterprise software is being purchased has shifted, attributing most of the buying power to the end-user. Yet, there is no infrastructure allowing sellers and buyers to instantly connect with each other,” VC Paul Klemm said. “Entering into this relationship at the right time and manner represents a huge opportunity.”
Klemm is a partner at European venture fund Earlybird Venture Capital, which co-led Ripe’s $2 million pre-seed round alongside Norway-based firm Alliance Venture. Individuals from Europe’s B2B SaaS and tech scene also participated in the funding round, such as Pleo’s and Mentimeter’s VPs of sales, Soundtrap’s co-founder, and Livi’s CEO and CTO, Ripe said.
Similar companies already exist in the U.S., such as Endgame, Correlated and Pocus. But with a growing number of businesses adopting product-led growth, there seems to be plenty of space for service providers that can help them avoid building their own internal dashboards. After SaaS for SaaS, companies enabling product-led growth are a new trend to watch.
Stockholm-based Ripe helps product-led B2B companies find the ripest leads in their customer base by Anna Heim originally published on TechCrunch
Welcome to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s inspired by the daily TechCrunch+ column where it gets its name. Want it in your inbox every Saturday? Sign up here.
Reading recently about Germany’s €30 billion plan for its startups, I was intrigued. Did the country start to envy La French Tech? Is it hoping to rival post-Brexit U.K.? Perhaps both, but it also has a national goal — making sure that profits from homegrown successes stay home. Let’s explore. — Anna
European startups have been weathering the venture capital downturn quite well, and funding declined only slightly in the second quarter compared to the first three months of 2022.
German startups, however, had it worse: According to EY, they collectively attracted 20% less capital in the first half of 2022 than during the same period last year. This includes private equity, but venture capital declined even more sharply, from €4.44 billion to €2.89 billion (which is roughly the same amount in U.S. dollars.)
Berlin-based Mayd, a startup that’s building an on-demand medicine delivery platform in Europe, has fast followed a chunky seed raise last fall — with a €30 million (~$34M) Series A funding round led by US investor Lightspeed Venture Partners.
Previous investors Target Global, 468 Capital and Earlybird Venture Capital also chipped into the Series A.
The round brings Mayd’s total raised to date, since the business was founded at the beginning of 2021, to €43M.
This early funding velocity looks akin to the pace investor cash has been flying into European on-demand grocery delivery platforms since the pandemic supercharged app-based delivery.
Grocery delivery startups have gone on to pull in some very beefy B and C raises in recent years, such as the almost $1BN Series C for Berlin’s Gorillas in October. So it’ll be interesting to see whether investors feel moved to plough similarly heady sums into more specialist on-demand startups, as founders work to slice and dice opportunities around app-based ordering and speedy local delivery. (See also, for example, the $20M Series A raise earlier this month for another German ‘instant delivery’ startup which is focused on premium, branded goods.)
For now, though, Mayd is keeping schtum on its valuation.
Demand for medicines and/or non-prescription products sold in pharmacies — all of which Mayd’s platform is being designed to deliver at speed — is fairly universal, if not quite up there with the daily human need to eat. So investors are likely attracted by the prospect of solid demand — assuming execution is strong.
That said, grocery as a category isn’t purely food; there are overlapping products vs what you can find in a pharmacy — so there is some direct inventory competition here, even as prescription medicines (which will be coming to Mayd) are a specialist type of order that isn’t typically possible via an ‘instant grocery’ delivery.
Plus, the convenience of in-app ordering and to-the-door delivery for meds may offer more of a pull vs general food delivery — given pharmacy shoppers are disproportionately likely to be feeling unwell or caring for someone who’s sick so may be especially keen to avoid leaving home to make an essential purchase.
Mayd’s delivery pledge in the cities where it operates is to get the order to your door within 30 minutes — for orders made between the hours of 8am and midnight (next day delivery thereafter).
It’s scaled out quickly from its first city, Berlin, also launching into Hamburg, Munich, Frankfurt am Main, Cologne and Düsseldorf. Across this footprint it currently offers access to 2,000+ prescription-free medicines and other pharmacy products, ahead of changes to the e-prescription system due this month which will enable it to also take orders for prescription drugs in Germany.
This pace of expansion means the startup has already grown to 100+ employees, as well as 350+ delivery riders — who it says are “permanently employed” (this means “directly contracted” with Mayd, i.e. not employed via subcontractors).
The Series A funds will be used to further step on the growth gas — with Mayd eyeing expanding into two more European markets over the new few months and scores more cities.
“We will use the new funds to invest in the company’s expansion in Germany and Europe, hiring key positions with a focus on technology, as well as in the further ramp up operations,” it tells TechCrunch. “Until the end of Q2 we plan to launch in two other markets in Europe and currently are looking at our best options.”
The startup says typical customers for its pharmacy order delivery service so far skew more female than male, and tend to fall into the 35-45 age range — having a focus on “convenience first”. (Aka: “Our customer base is urban, digital and appreciates our 24/7 service a lot.”)
Mayd also says its shoppers are ringing up bigger basket sizes than for online groceries.
But, well, medicines and ailment potions tend to be relatively expensive vs general groceries so that’s not too surprising. It is important to making the unit economics stack up for the speedy delivery though.
“Highly in demand are ailments against the common cold, OTC products for acute health problems like dry eyes. Beyond that everything for the needs of Mother & Child is popular amongst our customers,” it adds.
Mayd says it takes a commission on sales of non-prescription pharmacy products but does not charge for delivery.
For e-prescription orders it has said the model will either entail a delivery fee or listing fee.
Asked about the looming launch of e-prescriptions in Germany, Mayd claims it will be “the first company on the market to integrate the instant delivery service into our system”, adding: “This way we will be able to fully cover all needs in the area of health. Customers will have the chance to order their prescription medicines in an instant, in a convenient and time-saving way.”
Looking ahead, the startup says it expects to pass 100,000 customers over the course of this year as it expands out from (currently) six cities — soon to be seven, as it dials up service in Stuttgart next week — to more than 50 cities across its operational footprint in the first half of 2022.
Austrian synthetic data startup MOSTLY AI today announced that it has raised a $25 million Series B round. British VC firm Molten Ventures led the operation, with participation from new investor Citi Ventures. Two existing investors also returned: Munich-based 42CAP, and Berlin-based Earlybird, which had led MOSTLY AI’s $5 million Series A round in 2020.
Synthetic data is fake data, but not random: MOSTLY AI uses artificial intelligence to achieve a high degree of fidelity to its clients’ databases. Its data sets “look just as real as a company’s original customer data with just as many details, but without the original personal data points,” the company says.
Talking to TechCrunch, MOSTLY AI CEO Tobias Hann said that the company plans to use the proceeds to push the boundaries of what its product can do, grow its team, and gain more customers both in Europe and in the U.S., where it already has offices in New York City.
MOSTLY AI was founded in Vienna in 2017, and the General Data Protection Regulation (GDPR) was implemented across the EU one year later. This demand for privacy-preserving solutions and the concomitant rise of machine learning have created significant momentum for synthetic data. Gartner predicts that by 2024, 60% of the data used for the development of AI and analytics projects will be synthetically generated.
MOSTLY AI’s typical clients are Fortune 100 banks and insurers, as well as telcos. These three highly regulated sectors drive most of the demand for synthetic tabular data, alongside healthcare.
Unlike some of its competitors, MOSTLY AI hasn’t put its focus on healthcare in the past, but it could change. “It’s certainly something that we are watching closely and we are actually starting some pilot projects this year,” the CEO said.
The democratization of AI means that synthetic data will eventually be used well beyond Fortune 100 companies, Hann told TechCrunch. His company therefore plans to serve smaller organizations and a wider range of sectors in the future. But until now, it made sense for MOSTLY AI to focus on enterprise-level clients.
At the moment, enterprise companies are the ones that have the budgets, need and sophistication to work with synthetic data, Hann said. To match their expectations, MOSTLY AI obtained ISO certifications.
Talking to Hann, one thing becomes clear: While the startup has a solid technical footing, it is equally invested in the commercialization of its technology and in the business value it can add for its clients. “MOSTLY AI is leading this emerging and rapidly-growing space in terms of both customer deployments and expertise,” Molten Ventures’ investment director Christoph Hornung said.
The need to comply with privacy laws such as the GDPR and CCPA clearly drives demand for synthetic data, but it’s not the only factor at play. For instance, demand in Europe is also driven by a wider cultural context; while in the U.S., it also results from a desire to innovate. For instance, use cases can include advanced analytics, predictive algorithms, fraud detection and pricing models – but without data that can be traced back to specific users.
“Many companies are proactively approaching the space because they understand that customers value privacy,” Hann said. “These companies understand that they can also gain a competitive advantage when dealing and working with data in a privacy-preserving way.”
Seeing more U.S. companies wanting to adopt synthetic data in innovative ways is the key reason why MOSTLY AI wants to grow its team in the U.S. But it is also recruiting more generally, both in Vienna and remotely. Its plan is to increase its headcount from 35 to 65 people by the end of the year.
Hann expects 2022 to be “the year where synthetic data will take off,” and beyond this year, “a really strong decade for synthetic data.” This will be supported by growing demand for responsible AI, articulated around key concepts such as AI fairness and explainability. Synthetic data helps answer these challenges. “It enables enterprises to augment and de-bias their data sets,” Hann said.
Machine learning aside, MOSTLY AI sees lots of potential for synthetic data to be leveraged in software testing. Supporting these use cases requires making synthetic data accessible not only to data scientists, but also to software engineers and quality testers. It’s with them in mind that MOSTLY AI came up a few months ago with version 2.0 of its platform. “MOSTLY AI 2.0 can be implemented on premise or in a private cloud, and adapts to different data structures of the company using it,” the company wrote at the time.
“We are clearly a B2B software infrastructure company,” Hann said. Both in its Series A and B rounds, the company looked for investors who understood that approach.
Molten Ventures being a publicly listed VC and consequently not subject to typical funding cycles also carried some weight, Hann confirmed when I asked. “Having this long term commitment from a partner is something that was very appealing to us, because it’s a little more flexible.”
It doesn’t hurt either that Citi Ventures is the venture arm of Citigroup, and that it is headquartered in the U.S. “We’re significantly increasing the team in the U.S., and it’s always great to also have a U.S.-based investor that can help with network and relationships there,” Hann said.
With $25 million in new funding and an increased U.S. presence, MOSTLY AI will now have more resources to compete against other companies in its segment of the synthetic data space. These include Tonic.ai, which raised a $35 million Series B last September; Gretel AI, which disclosed a $50 million Series B round last October; and seed-funded British startup Hazy, as well as players that focus on specific verticals.
“We do see more and more players emerging in the space and in the market in general, so it certainly shows that there’s a lot of interest there,” Hann said.
Over the last few years, we’ve seen the rise of FinTech startups like N26 and Monzo to challenge the incumbents with new products like challenger banks. But what if the big banks wanted to compete in that game themselves? This is the aim of FintechOS a Romanian startup that actually aims to help incumbents compete in this brave new, competitive, world.
FintechOS allows banks and insurance companies to act and react faster than the new upstarts on the scene with plug and play products.
It’s announcing today that it has secured $14 million (£10.7 million) in a Series A investment led by the Digital East Fund of Earlybird Venture Capital and OTB Ventures, with participation from existing investors Gapminder Ventures and Launchub.
The additional capital will be used to continue the growth and expansion across Europe, and to expand into South East Asia and the US.
FintechOS’s technology platform lets traditional banks and insurance companies adapt to rapidly changing customer expectations, and match the speed and flexibility of Fintech startups with personalized products and services, in weeks rather than months or years.
The banks and insurance companies can then launch multi-cloud SaaS deployments, transitioning to the cloud and on-premises deployments, working alongside the existing technology infrastructure. It now has existing partnerships with Microsoft, EY, Deloitte, Publicis Sapient and CapGemini allow deployment in multiple markets.
Started in 2017 by serial entrepreneurs Teodor Blidarus and Sergiu Negut, the company now has customers in more than 20 countries across three continents.
Teo Blidarus, CEO and Co-Founder of FintechOS, commented: “Our disruptive approach is customer, not technology-driven. We created FintechOS to transform the financial industry, empowering banks and insurance companies to act and react faster than fintech startups,
to create a smarter, slicker customer experience.”
Dan Lupu, Partner at Earlybird, said: “FintechOS is a pioneer in a booming market, with a vision to transform the way financial institutions react to market and regulatory changes. We are proud to become part of a journey that will shape the future of financial services.”
Berlin rose as one of Europe’s leading startup hubs over the last decade, featuring unicorns N26, Delivery Hero, HelloFresh, and Auto1 Group. Berlin attracts developers from Eastern Europe and elsewhere into an international hub where English is the linga franca among startups and costs are noticeably lower than in London or Paris. Rocket Internet, while criticized for launching copycats of successful US startups has trained a deep bench of young software executives in rapidly scaling companies.
As we gear up for our Disrupt Berlin conference in December, I wanted to get a pulse on the types of startups that top VCs in Berlin’s ecosystem are looking to invest in right now, so I asked eleven of them to share examples of the trends they find most exciting:
The range of interests hints at the expanse of Berlin’s startup ecosystem right now, with VCs focused on everything from fintech, agtech, and B2B marketplaces to audio, travel, and transportation.
Here are their responses:
Luis Hanemann, Partner at e.Ventures
“We see multiple trends emerging, in the B2C segment we see Audio is booming and is right for disruption. It’s amazing to see the development in the space. Our beloved Berlin-based portfolio company Blinkist is addressing this topic and we have done a recent investment in Podimo, which is building the Netflix for Podcasts, launching soon in Germany.”
David Rosskamp, Partner at June Fund
“We spend a lot of time thinking around large macro themes and investing into them in a structured way. One central field of attention has been the agricultural world, in particular the flow of goods and information. We see a large need, and an equally large economic opportunity in digitizing these flows, in providing transparent access to agricultural supplies and in empowering millions of small-scale farmers. So June has invested in agricultural trading networks from Europe to Africa. It clearly matches our investment thesis: global, network-driven enterprises that the world needs. We have similar investments in healthcare or decentralized networks, to name a few.”
Dr. Fabian Heilemann, Partner at Earlybird
“At Earlybird we believe that the first wave of innovation within Logistics, being rather of a transformative nature, e.g. digital freight marketplaces and forwarder models, has reached its peak. We are now particular excited w.r.t the second wave of LogTech innovation, which we expect to have a truly disruptive impact on the industry. It is our conviction that the availability of structured data, but also the increasing maturity of for example distributed ledger technologies, entail the opportunity for digital service providers to expand their technology driven lead over incumbent players. Whereas competitive forces in Logistics today are mainly adhere to scale effects, we think that next generation of logistics companies will leverage technology to drive profitability.”
Simon Schmincke, Partner at Creandum
“We continue to see the consumerization of enterprise grade solutions—enabling self-onboarding in a toned-down SME-oriented solution. The FinTech scene here in Berlin is something we continue to be excited about, both for businesses and consumers. Also, anything real estate related immediately grabs our attention—co-living, financing, intelligent design, construction automation. The most important change, however, is that we see entrepreneurs aiming higher and building bigger companies, due, in large part, to the impressive role models the ecosystem has produced in recent years.”
Jan Miczaika, Partner at HV Holtzbrinck Ventures
“Over the past 20 years we’ve seen a significant shift in the focus of Berlin-based startups. Originally there was a strong focus on e-commerce and marketplaces. Today this is significantly broader. Berlin is a fintech hotspot, a global proving ground for mobility concepts, the HQ for digital B2C champions and has strong growth in B2B/SaaS. Berlin is also highly relevant for Blockchain, which fits extraordinarily well with the anarchical spirit of the city. As a broad, multi-stage investor we at HV are excited to cover all of the above, trying to find inspirational entrepreneurs with a strong vision for the future. I personally am most interested in companies with a strong data angle, across both B2C and B2B.”
Pawel Chudzinski, Partner at Point Nine Capital
“Marketplaces have transformed how consumers access products and services across many categories vs. in B2B this process feels like 10-15 years behind. We see more and more startups pursue marketplace opportunities across various b2b categories and we want to discover them as early as possible. We are industry agnostic, but the industries in which we have been spending most time recently were probably supply chain and logistics, and financial services (incl. crypto). We also expect a rise in sustainability focused startups and we started diving into this space as well – mainly from the SaaS and marketplace angle.”
Ciaran O’Leary, Partner at Blueyard Capital
“BlueYard is a thesis driven early stage firm that backs founders with transformative ideas that decentralize markets and empower humanity. Today BlueYard is focused on the reinvention of the internet for permission-less innovation through decentralized web protocols and services that can untangle the server-side monopolies (e.g. p2p protocols and networks), the ability to use nature / biology itself paired with breakthrough engineering and computation to solve humanity’s largest planetary challenges (e.g. synthetic biology, quantum computing), the re-thinking of the knowledge worker stack by liberating users and data from the current tools designed in the 1980s (e.g. alternatives to PowerPoint, Excel, etc) and the separation of state and money through algorithmically transparent and programmable money.”
Jan Borgstädt, Partner at JOIN Capital
“We are deeply entrenched in identifying technologies that lay the foundation of our industrial future – or what we call the Neue Industry. I look for companies whose founders have deep technical knowledge to build transformative tools that augment human capabilities in essential processes. Think about the construction industry, and how advanced modeling tools and software can revolutionize the backbone of the way our civilization is built. Or the automation of processes such as circuit mapping and production planning. These are among the trends that excite us right now.”
Christoph Schuh, Partner at Lakestar
Berlin is the tech ecosystem where we have done the most investments out of our existing portfolio of more than 50 companies. For example Travel & Mobility is the space where we are very much interested and active. We’ve invested into Berlin-based travel tech companies like GetYourGuide, HomeToGo and Omio and we’re still looking for new stars. At Lakestar, we also like B2B plays where industries are in transformation and tech can enable a new level of efficiency for the ecosystem. So we also invested into the Berlin based logistic player Sennder, the #1 digital freight forwarder in Europe. Actually, we also look into industry disruption in 3.0/4.0/RPA space and others.”
Anton Waitz, Partner at Project A
“At Project A, we think and work in industry deep dives. That means we pick 5-6 industries at the time on which we spend most of our energy and where we do the majority of our investments. It’s interesting to see how recently our deep dives have let us think about some of the most fundamental questions in life: How will we work in 10 years time (Deep Dive: Business Software/Process Automation)? How will we reside (Deep dive: Real Estate)? How will we move us (Mobility) and things (Logistics)? How will we produce (Industry 4.0)? And how will we stay healthy (Digital Health)? I guess it shows how deep digitization has reached the very basics of our life – and how exciting our job actually is!”
Filip Dames, Partner at Cherry Ventures
“We believe the next years will show successful companies in industries which have traditionally been very hard to tackle for startups. For example, we’re just at the very beginning of seeing the effects of technology innovation in healthcare or manufacturing, two spaces we actively investing in with Cherry. Data, leveraged through AI or intelligent user interfaces can have a huge impact on solving problems in these industries. In Berlin, we’re excited to see that the city is becoming more and more a home for deep tech companies, attracting technical talent from around the world.”
Join TechCrunch in Berlin on December 11-12 for Disrupt Berlin…
UiPath, a robotics process automation platform targeting IT businesses, is raising more than $400 million in Series D funding from venture capital investors at a valuation north of $7 billion, sources have confirmed to TechCrunch following a report from Business Insider.
We’ve reached out to the company for comment.
UiPath, founded in 2005, has raised $409 million to date, meaning the new round of capital will double the total capital invested in the startup, as well as its valuation. Its $225 million Series C, raised just six months ago, valued the business at $3 billion, according to PitchBook. UiPath is backed by top-tier investors CapitalG and Sequoia Capital, which co-led its Series C, as well as Accel, Credo Ventures and Earlybird Venture Capital, among others.
The latest funding round is being led by a public institutional investor.
UiPath develops automated software workflows meant to facilitate the tedious, everyday tasks within business operations. RPA is probably a misnomer. It’s not necessarily a robot in the way we think of it today. It’s more like a highly sophisticated macro recorder or workflow automation tool, letting a computer handle a series of highly repeatable activities in a common workflow, like accounts payable.
For example, the process could start by scanning a check, then use OCR to read the payer and the amount, add that information to an Excel spreadsheet and send an email to a human to confirm it has been done. Humans still have a role, especially in processing exceptions, but it provides a way to bring a level of automation to legacy systems, which might not otherwise benefit from more modern tooling.
The company began raising private capital in 2015 and has since experienced rapid growth of its valuation and annual recurring revenue (ARR). UiPath garnered a $1.1 billion valuation with its Series B in March 2018, more than doubled it with its Series C and is again seeing a 2x increase in value with this latest round. This is a result of its swelling ARR.
The company says it went from $1 million to $100 million in annual recurring revenue in less than two years. With its Series C, it counted 1,800 enterprise customers and was adding six new customers a day. Sources tell TechCrunch that UiPath did 180 million in ARR last year and is on track to do $450 million in ARR in 2019.