Felicis, Lux Capital and Upfront Ventures tackle TAM at Disrupt

Perception is everything — especially when it comes to the value of software startups and total addressable markets (TAM). During 2020 and 2021, as COVID bit into the economy, tech products turned out to be more recession-resistant than expected. What’s more, tech companies grew faster than previously anticipated.

Those conditions combined to make TAM feel huge last year, which, in turn, led investors to pay far more for startup shares, calculated against their existing revenues. However, the growth rates of companies that caught a demand tailwind from COVID have dropped sharply, meaning that some TAM expectations were, perhaps, misplaced.

Where does that leave startups trying to measure their TAM today? Exploring the answer to that question is just one reason we’re thrilled that Kara Nortman, managing partner at Upfront Ventures; Aydin Senkut, founder and managing partner of Felicis Ventures; and Deena Shakir, a partner at Lux Capital, will join us onstage at TechCrunch Disrupt on October 18–20.

In a conversation called “Taking the BS Out of Your TAM,” these three experts will discuss how founders and investors should think about TAM and readjust their perceptions to avoid deluding themselves or their colleagues.

Kara Nortman is a managing partner at Upfront Ventures. Her portfolio includes investments in Parachute Home, Time by Ping, Endgame, Writer, Open Raven, Britive and Fleetsmith (acquired by Apple in 2020).

Prior to joining Upfront, Nortman co-founded Moonfrye, a children’s e-commerce company. She also spent seven years at IAC, where she co-led the M&A group, oversaw the initial investment in Tinder, and served as SVP and GM of Urbanspoon and Citysearch.

Nortman, a founding member of All Raise — a VC-led group dedicated to increased diversity in funders and founders — is also a founder of LA’s professional women’s soccer team, Angel City Football Club.

Aydin Senkut, the founder and managing partner of Felicis Ventures, is a super-angel turned multistage investor. Senkut has appeared on Forbes’ Midas List nine times and on the New York Times’ Top 20 Venture Capitalists list four times.

Since founding Felicis in 2006, he has earned notoriety as an early backer of iconic companies, including Credit Karma (acquired by Intuit), Fitbit, Guardant Health, Guideline, Notion, Opendoor, Pluralsight, Rovio, Shopify and Soundhound. Currently, his areas of focus include infrastructure, security and the future of health.

Deena Shakir is a partner at Lux Capital, where she seeks out extraordinary, mission-driven founders and invests in transformative technologies that improve lives and livelihoods.

Her portfolio investment areas include women’s health (Maven Clinic, Alife, Gameto, Adyn), digital health infrastructure (SteadyMD, H1, AllStripes, Everly Health), health equity (Waymark, Galileo, Miga), food tech (Shiru) and fintech (Mos, Ramp, Neo.Tax).

Prior to Lux, Shakir was a partner at GV, where she led product partnerships at Google (for health, search and AI/ML) and directed social impact investments at Google.org. As a Presidential Management Fellow at the U.S. Department of State, Shakir helped launch President Barack Obama’s first Global Entrepreneurship Summit.

TechCrunch Disrupt takes place on October 18–20 in San Francisco. Buy your pass now and save up to $1,100. Student, government and nonprofit passes are available for just $295. Prices increase September 16.

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Endgame grabs another cash infusion as product-led growth momentum builds

Product-led sales and growth were big buzzwords last year, and startups are continuing to raise new infusions of capital as they develop their approaches.

In Endgame’s case, the company announced Tuesday it closed on $30 million in Series B funding. The company touts itself as “the world’s first product-led sales platform” and enables software companies to turn customer observations into go-to-market strategies.

Endgame’s product essentially connects the dots between product usage and sales opportunities so that instead of software being sold to executives and funneling its way down to employees that don’t use it, employees are in the driver’s seat — able to try software initially for free and then buy what they like. Revenue teams can tap into those conversion behaviors to better target their sales.

“The product-led growth momentum has been strong with capital following businesses, which for us, has led to powerful early customer wins, like LaunchDarkly, Airbyte, Retool, Algolia, Grain and Shortcut,” said CEO Alex Bilmes. “The other thing that was helpful for us was a more defined product-led sales category that landed incredibly well, which led people to ask us how to do this well and successfully.”

This new round is a fast turnaround from the company’s $17 million round from last July that gives Endgame $47.5 million in total funding since the company was founded 10 months ago by Bilmes. EQT Ventures led the round with participation from Lachy Groom and existing investors Menlo Ventures, Upfront Ventures and Unusual Ventures.

Bilmes told TechCrunch that the company wasn’t planning to raise, but when he saw the momentum of early design partners converting into customers, and as a result, offering to pay for its product sooner than expected, he took the opportunity to add to Endgame’s war chest.

Though Bilmes would not divulge growth figures or valuation, he did say the company went from several people in 2021 to 15 and will now triple the size of the team with the new funding. He says Endgame has an “ambitious product roadmap” that will leverage data sets that will require scaling of the team in the areas of R&D, data scientists, engineering, product management and go-to-market.

The customer relationship management market is growing at 11% annually and is expected to reach $96 billion by 2027. It’s been interesting to see how the product-led growth market has been going, Bilmes said.

“There has been fascinating dynamics with companies raising money, like Figma, Notion and Airtable, to name a few,” he added. “As companies like that raise capital with the expected elevation in terms of growth, the numbers are huge for us. Now that we all have this capital, we will see a jump in growth revenue, and Endgame will effectively be helping them know which accounts and users are significant.”

Laura Yao, lead investor in the Series B round and partner at EQT Ventures, said that she is attracted to product-led businesses. The model has been around for a while — think Dropbox a decade ago — but she is seeing it become popular again, especially in the venture capital ecosystem.

The aspect that has struck her more recently is the rise of product-led sales. A lot of people have a lot of software, but sales teams can’t often say how many times a person has used a particular piece of software. More efficient sales need a different set of tools to harvest leads among users a business already has. That’s where Endgame comes in, she said.

“Where we expect companies to go, they have to be super proactive about those opportunities,” Yao added. “Endgame is providing that tool stack for product-led sales. The company gets this is a data problem in a way other companies, like Salesforce, just can’t solve. Endgame is wrangling this messy data on customer usage and billing across SaaS apps and turns it into something meaningful.”

Product-led sales startup Endgame raises over $17M

Endgame, enabling software companies to turn customer observations into go-to-market strategies, announced Tuesday it raised a total of $17 million in back-to-back seed and Series A funding rounds.

The $12.25 million Series A was led by Menlo Ventures, while the $5 million seed round was led by Upfront Ventures. Also participating in the round are a group of investors including Todd and Rahul’s Fund, Liquid 2 Ventures and Gainsight CEO Nick Mehta.

Los Angeles-based Endgame was founded in 2020 and provides a self-service look at what’s happening in a software trial so that a sales team can prioritize accounts based on user behavior signals and act on them faster without having to be a data scientist or engineer.

Company CEO Alex Bilmes told TechCrunch that the concepts of product-led sales and product-led growth have taken over the sale of software. Today’s customers sign up for a trial, and if they like it, they invite their friends to try it.

However, at a certain point, some sales pressure is needed to close the deal. That’s where Endgame comes in: It shows who is doing what, and what features are being used — data that is typically opaque to sales and revenue teams.

Traditional customer relationship management systems are designed to be user-driven, meaning the sales rep is responsible for adding notes. It’s simpler if a rep only has a few accounts, but across tens of millions of users, Endgame analyzes the data and identifies which accounts are most likely to convert, who are the users to engage, what makes a good customer and how to take action with the right people.

Endgame is not competing against other companies so much as in-house developers that are cobbling a bunch of apps together in efforts to create a system that works for them, Bilmes said.

“Most of this is solved with do-it-yourself,” he added. “I have built Endgame a number of times at other companies using databases and other piece-meals to put together something so I could mash data from lots of places and build subscriptive views for revenue teams. We compete with those data scientists and internal teams stitching together horizontal tools.”

Endgame is pre-revenue and is already catering to a group of beta customers like Figma, Loom, Airtable, Clubhouse, Mode, Retool and Algolia that are looking for a dedicated software platform to capture product-led value.

Bilmes said the customer relationship management market, both huge and fast-growing at 35% annually, is expected to reach $114 billion by 2027. To meet demand, he intends to use the new funds to continue hiring aggressively. He has already tripled the size of the team to nine in the past few months, and expects to double that in the coming year. In addition, funds will go toward R&D and to further define the product-led sales landscape.

Growth over the next year will be customer-focused as Endgame works to get into the hands of the right customers and making it as accessible as possible for people to begin doing product-led motions.

“Our efforts are product-focused,” Bilmes said. “We’ve seen more demand than we can possibly hope to fill given the problem is so real for so many.”

As part of the investment, Upfront Ventures Partner Kara Nortman and Menlo Ventures Partner Naomi Ionita will join Endgame’s board of directors. Sandhya Hegde, partner at Unusual Ventures, which also participated in both rounds, joins as a board observer to create an all-women investor board.

When Endgame was raising its seed fund, it wanted to work with Nortman, who has expertise in applying consumer concepts to enterprise, Bilmes said. When it came to the Series A, Bilmes said he felt Ionita was the perfect partner due to her similar background to Bilmes and expertise in teaching salespeople how to engage.

Ionita told TechCrunch she learned about Endgame from Nortman, with whom she has invested in other startups. The company understands the pain point and is also providing something self-serve that gives the “why and how.”

“This intelligence doesn’t exist, and I know that because I lived it — building in-house or seeing companies flying blind,” she added. “Alex just gets this, and I see Endgame being the system of record and intelligence for bridging self-serve. They will be the final bridge that needs to exist between product teams and product-facing sales reps for which accounts to address and why.”


Elastic adds endpoint security to its expanding toolset

Elastic acquired Endgame Security in June for $234 million, and as a result of that deal, today the company announced Elastic Endpoint security to help customers secure laptops and servers. It also announced the acquisition has officially closed.

Elastic CEO and co-founder Shay Banon says that the company has already been helping threat hunters inside organizations find security events via its security information and event management (SIEM) tool. With Endgame, the company it wanted to extend its security coverage to laptops and servers. It’s probably not a coincidence that Endpoint is built on top of Elastic technology.

The company announced that it’s going to offer an unusual pricing model for this tool. Banon says that instead of charging by the machine as is the industry norm, it’s going to charge based on the amount of data stored. He says it’s an essential change to carry the security and coverage across the range of tools.

“We deeply believe in order to converge segments like SIEM and endpoint, you not only want to have the same technology stack, but you also want to provide customers with the same packaging and pricing. This is a first in the endpoint market, and we think it’s a big deal when it comes to security users and CISOs and CIOs out there,” Banon told TechCrunch.

Elastic is at its heart a search tool, but it has been expanding what that search tool covers over the years beyond web and enterprise search to other areas like applications performance management, log management and security.

Today’s announcement is about expanding that security component to enable the company to offer more comprehensive coverage across an organization. Endpoint’s 150 employees, which are mostly engineers and data scientists, have joined Elastic and will be providing the company with a machine learning knowledge boost to help make sense of the growing amounts of data across the Elastic toolset.

Endgame is based in Arlington, Virginia and will keep its offices there. It raised over $111 million (according to Crunchbase data) before being acquired.

Watch India’s Chandrayaan-2 make its historic moon landing attempt right here

It’s a big day for India’s highly audacious Chandrayaan-2 mission. The nation will attempt to land its lunar orbit on the moon’s surface later today as it inches closer to become the fourth in the world to complete a successful lunar landing.
ISRO, India’s equivalent of NASA, will be live streaming the landing on its website, and YouTube channel.

Additionally, if you are tuning in from India, dozens of channels including Doordarshan (DD1), Disney India, National Geographic, Star Plus and Star Bharat, DD News, will live telecast the India’s mission to the moon. The landing is scheduled for between 1pm and 2pm Pacific Time (4pm to 5pm Eastern Time; 8pm to 9pm GMT).

ISRO launched its 142 feet tall spacecraft from the the Satish Dhawan Space Centre, Sriharikota in Andhra Pradesh on July 15. The spacecraft consists of an orbiter, a lander named Vikram (named after Vikram Sarabhai, the father of India’s space program), and a six-wheeled rover named Pragyaan (Sanskrit for “wisdom”). Earlier this week, the lander that carried the rover detached from the orbiter.

The mission’s budget is just $141 million, significantly lower than those of other countries, and less than half of the recently released blockbuster “Avengers: Endgame .”

Commenting on the landing, India’s Prime Minister Narendra Modi, who will be watching the nation’s attempt at the moon landing from ISRO’s office, said earlier today that, “India, and the rest of the world will yet again see the exemplary prowess of our space scientists.”

Chandrayaan-2 aims to land on a plain surface that covers the ground between two of the Moon’s craters, Simpelius N and Manzinus C — that is about 375 miles from the South Pole. It’s an understudied region that no one has seen closely yet.

NASA astronaut Jerry Linenger, said in a televised program today, “I just want everyone to know that the whole world is following this and it is not just Indians. This is the first time any country is going to the South Pole of the Moon! India is leading this and as a representative of the US, we are nervous and we are hoping for success. This increases the knowledge base of the Moon.”