Tag: enterprise

Posted on

Extra Crunch members get 25% off Otter.ai voice meeting notes

Extra Crunch community perks have a new offer from voice meeting notes service, Otter.ai. Starting today, annual and two-year Extra Crunch members can receive 25% off an annual plan for Otter Premium or Otter for Teams.

Otter.ai is an AI-powered assistant that generates rich notes from meetings, interviews, lectures and other voice conversations. You can record, review, search and edit the notes in real time, and organize the conversations from any device. We also use Otter.ai regularly here at TechCrunch to produce transcripts and voice notes from panels at our events, and it’s a great way to easily organize and search the conversations. Learn more about Otter.ai here. 

To qualify for the Otter.ai community perk from Extra Crunch, you must be an annual or two-year Extra Crunch member. The 25% discount only applies to annual plans with Otter.ai, but it can be used for either the Premium or Teams plan. You can learn more about the pricing for Otter.ai here, and you can sign up for Extra Crunch here.

Extra Crunch is a membership program from TechCrunch that features how-tos and interviews on company building, intelligence on the most disruptive opportunities for startups, an experience on TechCrunch.com that’s free of banner ads, discounts on TechCrunch events and several community perks like the one mentioned in this article. Our goal is to democratize information about startups, and we’d love to have you join our community.

You can sign up for Extra Crunch here.

After signing up for an annual or two-year Extra Crunch membership, you’ll receive a welcome email with a link to sign up for Otter.ai and claim the discount. Otter.ai offers a free plan with capped minutes, and if you are interested in unlocking the full potential, you can purchase the annual plan with the 25% discount.

If you are already an annual or two-year Extra Crunch member, you will receive an email with the offer at some point over the next 24 hours. If you are currently a monthly Extra Crunch subscriber and want to upgrade to annual in order to claim this deal, head over to the “my account” section on TechCrunch.com and click the “upgrade” button.

This is one of several community perks we’ve launched for Extra Crunch annual members. Other community perks include a 20% discount on TechCrunch events, 100,000 Brex rewards points upon credit card sign up and an opportunity to claim $1,000 in AWS credits. For a full list of perks from partners, head here.

If there are other community perks you want to see us add, please let us know by emailing travis@techcrunch.com.

Sign up for an annual Extra Crunch membership today to claim this community perk. You can purchase an annual Extra Crunch membership here.

Disclaimer:

This offer is provided as a business partnership between TechCrunch and Otter.ai, but it is not an endorsement from the TechCrunch editorial team. TechCrunch’s business operations remain separate to ensure editorial integrity. 

Posted on

Three SaaS companies we think will make it to $1B in revenue

What’s the most successful pure SaaS company of all time? The answer is Salesforce, and it’s no contest — the company closed the year on an $18 billion run rate, placing it in a category no other company born in the cloud can touch.

That Salesforce is on such an impressive run rate might suggest that reaching a billion in revenue is a fairly easy proposition for an enterprise SaaS company, but firms in this category grow or drive revenue like Salesforce. Some, in fact, find themselves growing much more slowly than anyone thought, but keep slugging it out as they inch steadily toward the $1 billion mark. This happens to public and private SaaS companies alike, which means that we can look at few public ones thanks to their regular earnings disclosures.

It’s a good time to look back at the year and analyze a few firms that should reach the mythical $1 billion in revenue at some point. Today we’re examining Zuora, a SaaS player focused on building and managing subscription-based services. GuideWire, a company transitioning to SaaS with big ambitions and Box, a well-known SaaS player caught somewhere between big and a billion.

Zuora: betting on SaaS

We’ll start with the smallest company that caught our eye, Zuora . We’ll proceed from here going up in revenue terms.

Zuora is as pure a SaaS company as you can imagine. The San Mateo-based company raised nearly a quarter billion dollars while private to build out the technology that other companies use to help build their own subscription-based businesses. To some degree, Zuora’s success can be viewed as a proxy for SaaS as a whole.

However, while SaaS has chugged along admirably, Zuora has seen its share price fall by more than half in recent quarters.

At issue is the firm’s slowing growth:

  • In the quarter detailed on March 21, 2019, Zuora’s subscription revenue growth slowed to 35% compared to the prior year period. Total revenue growth grew an even slower at 29%.
  • In the quarter announced on May 30, 2019, Zuora’s subscription revenue grew 32% while its total revenue expanded 22%.
  • Moving forward in time, the company’s quarter reported on August 28, 2019 saw subscription revenue growth of 24% and total revenue growth of 21% compared to the year-ago quarter.
  • Finally, in its most recent quarterly report earlier this month, Zuora reported marginally better 25% subscription revenue growth, but slower total revenue growth of 17%.

Why is Zuora’s growth slowing? There’s no single reason to point out. Reading through coverage of the firm’s earnings report reveals a number of issues that the company has dealt with this year, including slow sales rep ramp and some technology complaints. Add in Stripe’s meteoric rise (the unicorn added tools for subscription billing in 2018, expanding the product to Europe earlier this year) and you can see why Zuora has had a tough year.

Adding to its difficulties, the company has lost more money while its growth has slowed. Zuora’s net loss expanded from $53.6 million in the three calendar quarters of 2018. That rose to $59.9 million over the same period in 2019. But the news is not all bad.

In spite of these numbers, Zuora is still growing; the company expects around $276 to $278 million in revenue in its current fiscal year and between $206 and $207 million in subscription top-line revenue over the same period.

At the revenue growth pace set in its most recent quarter (17% in the third quarter of its fiscal 2020) the company is eight years from reaching $1 billion in revenue. However, Zuora’s rising subscription growth rate in the same period is very encouraging. And, the company’s cash burn is declining. Indeed, in the most recent quarter Zuora’s operations generated cash. That improvement led to the firm’s free cash flow improving by half in the first three calendar quarters of 2019.

It also has pedigree on its side. Founder and CEO Tien Tzuo was employee number 11 at Salesforce when the company launched in 1999. He left the company in 2007 to start Zuora after realizing that traditional accounting methods designed to account for selling a widget wouldn’t work in the subscription world.

Zuora’s subscription revenue is high-margin, but the rest of its revenue (services, mostly) is not. So, with less thirst for cash and modestly improving subscription revenue growth, Zuora is still on the path towards the next revenue threshold despite a rough past year.

Guidewire: going SaaS the hard way

Posted on

Tech startups going public raise 3x more today than in 2015

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

Today we’re exploring the 2019 IPO cohort from a capital-in perspective. How much did tech companies going public in 2019 raise before they went public, and what impact that did that have on their valuation when they debuted?

Looking ahead, the tech startups and other venture-backed companies expected to go public in 2020 will include a similar mix of mid-sized offerings, unicorn debuts and perhaps a huge direct listing. What we’ve seen in 2019 should be a good prelude to the 2020 IPO market.

With that in mind, let’s examine how much money tech companies that went public this year raised before their IPO. Spoiler: It’s a lot more than was normal just a few years ago. Afterwards, I have a question regarding what to call companies in the $100 million ARR club (more here) that we’ve been exploring lately. Let’s go!

Privately rich

According to CBInsights’ recent IPO 2020 IPO report, there’s a sharp, upward swing in the amount of capital that tech companies raise before they go public. It’s so steep that the data draw a nearly linear breakout from a preceding, comfortable normal.

Here’s the chart:

There are two distinct periods; from 2012 to 2015, raising up to $100 million was the norm (median) for tech companies going public. That’s still a lot of cash, mind.

The second period is more exciting. From 2016 on we can see a private capital arms race in which tech companies going public stacked ever-greater sums under their mattresses before debuting. This is generally consistent with a different trend that you are also aware of, namely the rise of $100 million financings.

Before we turn back to the CBInsights data, let’s observe a chart from Crunchbase News that underscores the simply astounding rise of $100 million financings that was published just a few weeks ago. As you look at this chart, remember that prior to 2016, more than half of venture-backed technology companies going public had raised less than $100 million total:

Now, compare the two data sets.

Posted on

Huckleberry raises $18M to put small business insurance online

The insurance industry, sleepy and ancient, is ripe for disruption. We’ve seen companies like Lemonade, Hippo and Rhino get in on that opportunity. Today, an insurtech company focused on small business insurance has raised $18 to keep growing.

Meet Huckleberry, whose Series A was led by Tribe Capital, with participation from Amaranthine, Crosslink Capital and Uncork Capital.

Huckleberry launched in 2017 to offer business insurance, including workers’ compensation and general liability, all through an online portal.

Small business insurance coverage is not like car insurance or renters insurance. It’s not as simple as filling out a few forms and getting a quote. Even if a few platforms do have algorithms for providing quote, you can’t really close the deal unless you get on the phone.

It’s an incredibly tedious and stressful process. In fact, Huckleberry cofounders Bryan O’Connell and Steve Au first came up with the idea for Huckleberry when they were seeking out his own small business coverage for a previous startup idea.

The industry itself is incredibly fragmented, which is caused in part by the fact that small business coverage underwriting varies wildly from business to business. For example, the policy for three or four restaurants might look relatively similar. However, a fast food restaurant might be identified as a higher risk with regards to workers compensation than a Michelin star restaurant, where workers might be more eager to get back to work and take home their tip money. These differences come in the form of location, operations, and many other factors, as well as business vertical.

Huckleberry has worked to build out myriad coverage verticals, including food and beverage, fitness, retail, legal, healthcare, hair and beauty, and more.

The firm offers worker’s comp, as well as a package policy that includes general liability, property and business interruption insurance. Customers can also purchase add-ons like hired and non-owned auto insurance, employment practices liability insurance (EPLI), liquor liability insurance, employee dishonesty coverage, professional liability insurance, equipment breakdown coverage and spoilage coverage.

Huckleberry isn’t itself an insurance carrier, but does have the authority to underwrite and sell policies on behalf of the carrier. That said, Huckleberry’s expansion both by vertical and geography is more difficult than your average software startup. The regulatory landscape of insurance int he U.S. goes state by state.

“Our biggest challenge is navigating 50 states worth of extremely complicated regulations on something that is much more complicated than a software product,” said O’Connell. “We’re trying to protect individual workers and businesses all while staying fully compliant in every market.”

Posted on

SAP spinout Sapphire Ventures raises $1.4B for new investments

Sapphire Ventures, the former corporate venture arm of SAP, has raised $1.4 billion for growth investments, including a $150 million opportunity fund to support larger deals.

The firm, which focuses primarily on enterprise tech companies in the U.S., Europe and Israel, writes checks to Series B through pre-IPO businesses. Its portfolio includes 23andMe, Sumo Logic and TransferWise.

The new funds brings Sapphire Ventures, which became independent from the German software company SAP in 2011, assets under management to north of $4 billion. Sapphire will write checks sized between $5 million and $100 million with the new funds, allowing the team “to do any financing we need to or want to,” chief executive officer and managing director Nino Marakovic tells TechCrunch. Sapphire’s fourth growth fund is the firm’s largest to date at more than double the size of Sapphire Ventures $700 million Fund III. 

“Wee need this fund because companies are staying private much longer because they want to get to a $200 million revenue run rate before they go public,” Sapphire Ventures president and co-founder Jai Das (pictured) tells TechCrunch. “We want to have the capital to support these companies as they keep growing.”

News of the fund comes nearly one year after Sapphire Ventures lassoed $115 million from new limited partners to invest at the intersection of tech, sports, media and entertainment. Sapphire Sport has ties to the sports industry, from City Football Group, which owns English Premier League team Manchester City, to Adidas, the owners of the Indiana Pacers, New York Jets, San Jose Sharks and Tampa Bay Lightning, among others.

Before that, the firm closed on $1 billion for its third flagship venture fund.

With seven check writers and another seven investment professionals focused on growth-stage investments, Sapphire has had a number of recent wins, counting a total of 21 initial public offerings and 55 exits since the firm’s inception.

“We’re excited to have no reached critical mass with $4 billion under management,” Marakovic said. “We are the right size to take advantage of our target area of early and later-stage enterprise software companies. We are innovating on the model by adding value-add LPs and trying to align our whole model of services to the target companies to serve them as best as possible.”

Posted on

Google details its approach to cloud-native security

Over the years, Google’s various whitepapers, detailing how the company solves specific problems at scale, have regularly spawned new startup ecosystems and changed how other enterprises think about scaling their own tools. Today, the company is publishing a new security whitepaper that details how it keeps it cloud-native architecture safe.

The name, BeyondProd, already indicates that this is an extension of the BeyondCorp zero trust system the company first introduced a few years ago. While BeyondCorp is about shifting security away from VPNs and firewalls on the perimeter to the individual users and devices, BeyondProd focuses on Google’s zero trust approach to how it connects machines, workloads and services.

Unsurprisingly, BeyondProd is based on pretty much the same principles as BeyondCorp, including network protection at the end, no mutual trust between services, trusted machines running known code, automated and standardized change rollout, and isolated workloads. All of this, of course, focuses on securing cloud-native application that generally communicate over APIs and run on modern infrastructure.

“Altogether, these controls mean that containers and the microservices running inside can be deployed, communicate with each other, and run next to each other, securely; without burdening individual microservice developers with the security and implementation details of the underlying infrastructure,” Google explains.

Google, of course, notes that it is making all of these features available to developers through its own services like GKE and Anthos, its hybrid cloud platform. In addition, though, the company also stresses that a lot of its open-source tools also allow enterprises to build systems that adhere to the same platforms, including the likes of Envoy, Istio, gVisor and others.

“n the same way that BeyondCorp helped us to evolve beyond a perimeter-based security model, BeyondProd represents a similar leap forward in our approach to production security,” Google says. “By applying the security principles in the BeyondProd model to your own cloud-native infrastructure, you can benefit from our experience, to strengthen the deployment of your workloads, how your their communications are secured, and how they affect other workloads.”

You can read the full whitepaper here.

Posted on

Odoo grabs $90M to sell more SMEs on its business app suite

Belgium-based all-in-one business software maker Odoo, which offers an open source version as well as subscription-based enterprise software and SaaS, has taken in $90 million in funding led by a new investor: Global growth equity investor Summit Partners.

Odoo’s executive management team and existing investor SRIW and its affiliate Noshaq also participated in the round. The 2005-founded company — which used to go by the name of OpenERP before transitioning to its current open core model in 2015 — last took in a $10M Series B back in 2014, per Crunchbase.

Odoo offers some 30 applications via its Enterprise platform — including ERP, accounting, stock, manufacturing, CRM, project management, marketing, human resources, website, eCommerce and point-of-sale apps — while a community of ~20,000 active members has contributed 16,000+ apps to the open source version of its software, addressing a broader swathe of business needs.

It focuses on the SME business apps segment, competing with the likes of Oracle, SAP and Zoho, to name a few. Odoo says it has in excess of 4.5 million users worldwide at this point, and touts revenue growth “consistently above 50% over the last ten years”.

Summit Partners told us the latest funding will be used to accelerate product development — and for continued global expansion.

“In our experience, traditional ERP is expensive and frequently fails to adapt to the unique needs of dynamic businesses. With its flexible suite of applications and a relentless focus on product, we believe Odoo is ideally positioned to capture this large and compelling market opportunity,” said Antony Clavel, a Summit Partners principal who has joined the Odoo board, in a supporting statement.

Posted on

Satori Cyber raises $5.25M to help businesses protect their data flows

The amount of data that most companies now store — and the places they store it — continues to increase rapidly. With that, the risk of the wrong people managing to get access to this data also increases, so it’s no surprise that we’re now seeing a number of startups that focus on protecting this data and how it flows between clouds and on-premises servers. Satori Cyber, which focuses on data protecting and governance, today announced that it has raised a $5.25 million seed round led by YL Ventures.

“We believe in the transformative power of data to drive innovation and competitive advantage for businesses,” the company says. “We are also aware of the security, privacy and operational challenges data-driven organizations face in their journey to enable broad and optimized data access for their teams, partners and customers. This is especially true for companies leveraging cloud data technologies.”

Satori is officially coming out of stealth mode today and launching its first product, the Satori Cyber Secure Data Access Cloud. This service provides enterprises with the tools to provide access controls for their data, but maybe just as importantly, it also offers these companies and their security teams visibility into their data flows across cloud and hybrid environments. The company argues that data is “a moving target” because it’s often hard to know how exactly it moves between services and who actually has access to it. With most companies now splitting their data between lots of different data stores, that problem only becomes more prevalent over time and continuous visibility becomes harder to come by.

“Until now, security teams have relied on a combination of highly segregated and restrictive data access and one-off technology-specific access controls within each data store, which has only slowed enterprises down,” said Satori Cyber CEO and Co-founder Eldad Chai. “The Satori Cyber platform streamlines this process, accelerates data access and provides a holistic view across all organizational data flows, data stores and access, as well as granular access controls, to accelerate an organization’s data strategy without those constraints.”

Both co-founders previously spent nine years building security solutions at Imperva and Incapsula (which acquired Imperva in 2014). Based on this experience, they understood that onboarding had to be as easy as possible and that operations would have to be transparent to the users. “We built Satori’s Secure Data Access Cloud with that in mind, and have designed the onboarding process to be just as quick, easy and painless. On-boarding Satori involves a simple host name change and does not require any changes in how your organizational data is accessed or used,” they explain.

 

 

Posted on

Cisco acquires ultra-low latency networking specialist Exablaze

Cisco today announced that it has acquired Exablaze, an Australia-based company that designs and builds advanced networking gear based on field programmable gate arrays (FPGAs). The company focuses on solutions for businesses that need ultra-low latency networking, with a special emphasis on high-frequency trading. Cisco plans to integrate Exablaze’s technology into its own product portfolio.

“By adding Exablaze’s segment leading ultra-low latency devices and FPGA-based applications to our portfolio, financial and HFT customers will be better positioned to achieve their business objectives and deliver on their customer value proposition,” writes Cisco’s head of corporate development Rob Salvagno.

Founded in 2013, Exablaze has offices in Sydney, New York, London and Shanghai. While financial trading is an obvious application for its solutions, the company also notes that it has users in the big data analytics, high-performance computing and telecom space.

Cisco plans to add Exablaze to its Nexus portfolio of data center switches. The company also argues that in addition to integrating Exablaze’s current portfolio, the two companies will work on next-generation switches, with an emphasis on creating opportunities for expanding its solutions into AI and ML segments.

“The acquisition will bring together Cisco’s global reach, extensive sales and support teams, and broad technology and manufacturing base, with Exablaze’s cutting-edge low-latency networking, layer 1 switching, timing and time synchronization technologies, and low-latency FPGA expertise,” explains Exablaze co-founder and chairman Greg Robinson.

Cisco, which has always been quite acquisitive, has now made six acquisitions this year. Most of these were software companies, but with Acacia Communications, it also recently announced its intention to acquire another fabless semiconductor companies that builds optical interconnects.

 

Posted on

OneConnect’s drastic IPO value cut underscores the risk of high-growth, high-burn companies

OneConnect’s US-listed IPO flew under our radar last week, which won’t do. The company’s public offering is both interesting and important, so let’s take a few minutes this morning to understand what we missed and why we care.

The now-public company sells financial technology that banks in China and select foreign countries can use to bring their services into the modern era. OneConnect charges mostly for usage of its products, driving over three-quarters of its revenue from transactions, including API calls.

After pricing its shares at $10 apiece, the SoftBank Vision Fund-backed company wrapped last week worth the same: $10 per share.

One one hand, OneConnect is merely another China-based IPO listing domestically here in the United States, making it merely one member of a crowd. So, why do we care about its listing?

A few reasons. We care because the listing is another liquidity event for SoftBank and its Vision Fund. As the Japanese conglomerate revs up its second Vision Fund cycle (Vision Fund 2, more here), returns and proof of its ability to pick winners and fuel them with capital are key. OneConnect’s success as a public company, therefore, matters.

And for us market observers, the debut is doubly-exciting from a financial perspective. No, OneConnect doesn’t make money (very much the opposite). What’s curious about the company is that it brought huge losses to sale when it was pitching its equity. Which, in a post-WeWork world, are supposed to be out of style. Let’s see how well it priced.

What’s it worth?

OneConnect targeted a $9 to $10 per-share IPO price. That makes its final, $10 per-share pricing the top of its range. That said, given how narrow its range was, the result doesn’t look like much of a coup for the company. That’s doubly true when we recall that OneConnect lowered its IPO price range from $12 to $14 per share (a more standard price band) to the lower figures. So, the company managed to price at the top of its expectations, but only after those were cut to size.

When it all wrapped, OneConnect was worth about $3.7 billion at its IPO price according to math from the New York Times. TechCrunch’s own calculations value the firm at a slightly richer $3.8 billion . Regardless, the figure was a disappointment.

When OneConnect raised from SoftBank’s Vision Fund in early 2018, $650 million was invested at a $6.8 billion pre-money valuation according to Crunchbase data. That put a $7.45 billion post-money price tag on the Ping An-sourced business. To see the company forced to cut its IPO valuation so far is difficult for OneConnect itself, its parent Ping An, and its backer SoftBank.

Why so little?

I promised to be brief when we started, so let’s stay curt: OneConnect’s business was worth far less than expected because while it posted impressive revenue gains, the company’s deep unprofitability made it less palatable than expected to public investors.

OneConnect managed to post revenue growth of over 70 percent in the first three quarters of 2019, expanding top line to $217.5 million in the period. However, during that time it generated just $70.9 million in gross profit, the sum it could use to cover its operating costs. The company’s cost structure, however, was far larger than its gross profit.

Over the same nine-month period, OneConnect’s sales and marketing costs alone outstripped its total gross profit. All told OneConnect posted operating costs of $227.6 million in the first three quarters of 2019, leading to an operating loss of $156.6 million in the period.

The company will, therefore, burn lots of cash as grows; OneConnect is still deep in its investment motion, and far from the sort of near-profitability that we hear is in vogue. In a sense OneConnect bears the narrative out. It had to endure a sharp valuation reduction to get out. You can see the market’s changed mood in that fact alone.

Photo by Roberto Júnior on Unsplash