Tag: funding

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India’s OkCredit raises $67M to help small merchants digitize their bookkeeping

OKCredit, a Bangalore-based startup that enables small merchants to turn their bookkeeping digital, has raised $67 million to expand its business in the nation.

The Series B financing round for the two-year-old startup was led by Lightspeed and Tiger Global. The new round, which follows Series A financing round in June this year, climbs OkCredit’s total raise to $87 million.

OkCredit operates an eponymous mobile app that allows merchants to keep track of their day-to-day purchases and sales. Last month, startup founders told TechCrunch that the app had amassed over 5 million active merchants across 2,000 cities in India.

More to follow…

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Shape Security hits $1B valuation with $51M Series F

Anti-fraud startup Shape Security has tipped over the $1 billion valuation mark following its latest Series F round of $51 million.

The Mountain View, Calif.-based company announced the fundraise Thursday, bringing the total amount of outside investment to $173 million since the company debuted in 2011.

C5 Capital led the round along with several other new and returning investors, including Kleiner Perkins, HPE Growth, and Norwest Ventures Partners.

Shape Security protects companies against automated and imitation attacks, which often employ bots to break into networks using stolen or reused credentials. Shape uses artificial intelligence to discern bots from ordinary users by comparing known information such as a user’s location, and collected data like mouse movements to shut down attempted automated logins in real-time.

The company said it now protects against two billion fraudulent logins daily.

C5 managing partner André Pienaar said he believes Shape will become the “definitive” anti-fraud platform for the world’s largest companies.

“While we while we expect a strong financial return, we also believe that we can bring Shape’s platform into many of the leading companies in Europe who look to us for strategic ideas that benefit the entire value-chain where B2C applications are used,” Pienaar told TechCrunch.

Shape’s chief executive Derek Smith said the $51 million injection will go towards the company’s international expansion and product development — particularly the capabilities of its AI system.

He added that Shape was preparing for an IPO.

Anti-fraud startup Shape Security raises $26M in Series E round to drive global expansion

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Patch Homes locks in $5m Series A to give homeowners financial freedom without debt

Homeownership has long been touted as the American dream. But rising rates of mortgage debt, student loan debt, or otherwise are making the pursuit of homeownership a nightmare. Debt burdened individuals or those with inconsistent or tight cash flow can not only struggle to get credit loan approval when buying a home but also struggle to satisfy monthly mortgage payments even after purchase. 

Patch Homes is hoping to keep the proverbial American dream alive. Patch looks to provide homeowners with cash flow and liquidity by allowing them to monetize their homes without taking on debt, interest or burdensome monthly payments. 

Today, Patch took another big step in making its vision a far-reaching reality. The company has announced it’s raised a $5 million Series A round led by Union Square Ventures (USV)  with participation by from Tribe Capital and previous investors Techstars Ventures, Breega Capital, and Greg Schroy.

Patch Home looks to partner with homeowners by investing up to $250,000 (with an average investment of ~$100,000) for an equity stake in the home’s value, generally in the 5% to 20% range. Homeowners aren’t subject to any interest or recurring payments and have ten years to pay back Patch’s investment. Upon doing so, the only incremental money Patch receives is its portion of the change in the home’s value over the course of the ten year period. If the value of the home goes down in value, Patch willingly takes a loss on its investment.

According to Patch Homes CEO and cofounder Sahil Gupta, one of the major motivations behind the company’s model is to align Patch’s incentives with the homeowners, allowing both parties to think of each other as trusted partners even after financing. After Patch’s investment, the company provides a number of ancillary services to homeowners such as credit score monitoring, as well as home value and property tax tracking.

In one instance recounted by Gupta in an interview with TechCrunch, Patch even covered three months of an owner’s mortgage during a liquidity crunch for his small business, allowing him to maintain his home and credit score. Patch is incentivized to provide all services that can help ensure an increase in home value, benefitting both Patch and the homeowner, with the homeowner earning the majority of the asset’s appreciated value.  

Additionally, since Patch’s model isn’t focused on a homeowner’s ability to pay back a loan, interest or periodic payments, Patch is able to provide financing to more people. Patch is able to help those with more variable qualifications that struggle to get traditional loans — such as a 1099 contracted worker — monetize their illiquid assets with less harsh or restrictive terms and without increasing their debt burden. Gupta described this as solving the core problem of providing liquidity to asset-rich but cash-flow sensitive people. 

Patch is not only looking to provide easier liquidity to more homeowners, but they’re trying to do so faster than traditional lenders. Interested customers can first receive a free estimate of whether Patch will invest in their home or not, how much its willing to invest and what percentage equity it will take — primarily based on Patch’s machine learning models that focus on asset, market, and location level attributes. 

After the initial estimate, a Patch home advisor will educate the customer on the product and start a formal application process, which includes your standard income and credit score verification and otherwise, that takes 5-10 days. All-in, homeowners have the ability to get money in as little as 14 days, a significantly shorter timeline than your standard home credit process. Once the investment is made, owners have full freedom with how they use the money.

According to Patch, while its customers come from a diverse set of backgrounds, many either accumulated debt have to pay down the net or may struggle making monthly payments. The average Patch homeowner uses 40% of the investment to eliminate debt, adds 40% to their savings account or passive income, and invests 20% into home improvements.

To date, Patch has raised a total of $6 million and believes the latest round of funding will help scale its operations as they team up with advisors like USV that have experience scaling fintech companies (such as a Lending Club or Carta). The funds will be used to invest in product and Patch’s clearing technology in order to further speed up Patch’s lending process.

Patch also hopes to use the investment to help them gradually expand their footprint, with the goal of eventually having a presence all 50 states. (Patch is currently available in 11 regional markets within California and Washington and expects to be in 18 regional markets by the end of the year including those in Utah, Colorado and Oregon.)

Patch Homes Co Founders Sundeep Ambati L and Sahil Gupta R

Image via Patch Homes

What makes homeownership so galvanizing for the Patch team? Patch CEO Sahil Gupta spent years putting his Carnegie Mellon financial engineering degree to work in banking and finance, as well as in financial products and strategy positions at fintech startups backed by heavy hitters such as YC to Goldman Sachs.

After realizing the majority of the US population were homeowners, but were struggling to make monthly payments or save for the future, Sahil wanted to figure out how we could take an illiquid asset like a home and make it easily accessible. 

Around the same time, Sahil’s cofounder Sundeep Ambat was working as a contractor on a new business venture of his and was struggling to get a home equity loan. While these circumstances ultimately led Sahil and Sundeep to found Patch Homes in 2016 out of the TechStars New York accelerator program, the deeper motivation behind Patch can be traced back nearly 30 years when Sahil’s father made an equity sharing agreement with his brother as they were building his family’s home in India.

With a growing family and a pregnant wife, Sunil’s father was adamant about living debt-free and so his brother provided an investment in exchange for an equity stake in the house. According to Sahil, the home is still in the family and has appreciated substantially in value to the benefit of both Sahil’s father and his brother. Longer-term, Patch wants to be the preferred partner for homeownership, helping reduce cash tight owners’ financial anxiety without the debilitating weight of debt. 

“Some companies want to help people buy or sell homes, but homeownership really begins after that point. Patch is built to be inside the home with you and everything that comes thereafter,” Gupta told TechCrunch.

“Patch was created to partner with homeowners to help them unlock their home equity so they can achieve their financial goals along every step of their homeownership journey.

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RYOT co-founder Bryn Mooser launches a new documentary studio called XTR

Bryn Mooser, co-founder of virtual and augmented reality studio RYOT, said he’s “hanging up my VR and AR hats to really focus on more, shall we say, traditional nonfiction storytelling.”

Back in 2016, Mooser sold RYOT to The Huffington Post and AOL (TechCrunch’s parent company, now known as Verizon Media), and he left RYOT at the end of last year. Today he’s announcing XTR, a production company focused on documentary films and nonfiction series.

The company’s name comes from the 16 millimeter camera that Mooser said was part of a “first wave” of tools making documentary filmmaking more accessible. With XTR, Mooser said he wants to continue that process.

“Technology is front-and-center of this revolution that’s happening,” he told me. “What’s happening in documentary films right now is a direct result of cameras getting cheaper,” making it easier for anyone to create a “beautiful, professional film.”

At the same time, he noted that documentary distribution was previously limited to art-house cinemas, HBO and “one row at your local Blockbuster.” Now, social media and streaming services like Netflix and Hulu have opened up new distribution channels that are bringing documentaries to broader audiences.

XTR studio

XTR studio

XTR will be based out of LA’s Echo Park neighborhood, in a warehouse that will serve as office, post-production facility and event space. And rather than operating like a traditional production company, Mooser said he wants XTR to take “more of a tech startup approach.”

He explained, “We have a vision to really scale it out: How do we work with a lot of new directors? How do we work with all the platforms? How do we think about audiences globally?”

That approach also involves outside capital. XTR said it’s already raised an undisclosed amount of funding from former AOL CEO Tim Armstrong, Airbnb co-founder Joe Gebbia, Franklin McLarty, Christina and David Arquette, Josh Kushner, Lyn and Norman Lear, Bryan Baum and Zem and James Joaquin.

While Mooser is officially unveiling the company today, he said it’s already developing eight documentaries (which will be announced later this year) with partners like Vice Studios, Futurism and Anonymous Content.

“There’s a real opportunity to have a new company in there, looking out for those new filmmakers, and [trying] to shift the power balance a little bit,” he said. “The way we do that is, we look for great talent and we empower them to do what they want to do … at every step of way.”

Original Content podcast: Director Theo Love explains ‘The Legend of Cocaine Island’

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Explorium reveals $19.1M in total funding for machine learning data discovery platform

Explorium, a data discovery platform for machine learning models, received a couple of unannounced funding rounds over the last year — a $3.6 million seed round last September and a $15.5 million Series A round in March. Today, it made both of these rounds public.

The seed round was led by Emerge with participation of F2 Capital. The Series A was led by Zeev Ventures with participation from the seed investors. The total raised is $19.1 million.

The company founders, who have a data science background, found that it was problematic to find the right data to build a machine learning model. Like most good startup founders confronted with a problem, they decided to solve it themselves by building a data discovery platform for data scientists.

CEO and co-founder, Maor Shlomo says that the company wanted to focus on the quality of the data because not much work has been done there. “A lot of work has been invested on the algorithmic part of machine learning, but the algorithms themselves have very much become commodities. The challenge now is really finding the right data to feed into those algorithms,” Sholmo told TechCrunch.

It’s a hard problem to solve, so they built a kind of search engine that can go out and find the best data wherever it happens to live, whether it’s internally or in an open data set, public data or premium databases. The company has partnered with thousands of data sources, according to Schlomo, to help data scientist customers find the best data for their particular model.

“We developed a new type of search engine that’s capable of looking at the customers data, connecting and enriching it with literally thousands of data sources, while automatically selecting what are the best pieces of data, and what are the best variables or features, which could actually generate the best performing machine learning model,” he explained.

Shlomo sees a big role for partnerships, whether that involves data sources or consulting firms, who can help push Explorium into more companies.

Explorium has 63 employees spread across offices in Tel Aviv, Kiev and San Francisco. It’s still early days, but Sholmo reports “tens of customers.” As more customers try to bring data science to their companies, especially with a shortage of data scientists, having a tool like Explorium could help fill that gap.

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ScyllaDB takes on Amazon with new DynamoDB migration tool

There are a lot of open source databases out there, and ScyllaDB, a NoSQL variety, is looking to differentiate itself by attracting none other than Amazon users. Today, it announced a DynamoDB migration tool to help Amazon customers move to its product.

It’s a bold move, but Scylla, which has a free open source product along with paid versions, has always had a penchant for going after bigger players. It has had a tool to help move Cassandra users to ScyllaDB for some time.

CEO Dor Laor says DynamoDB customers can now also migrate existing code with little modification. “If you’re using DynamoDB today, you will still be using the same drivers and the same client code. In fact, you don’t need to modify your client code one bit. You just need to redirect access to a different IP address running Scylla,” Laor told TechCrunch.

He says that the reason customers would want to switch to Scylla is because it offers a faster and cheaper experience by utilizing the hardware more efficiently. That means companies can run the same workloads on fewer machines, and do it faster, which ultimately should translate to lower costs.

The company also announced a $25 million Series C extension led by Eight Roads Ventures. Existing investors Bessemer Venture Partners, Magma Venture Partners, Qualcomm Ventures and TLV Partners also participated. Scylla has raised a total of $60 million, according to the company.

The startup has been around for 6 years and customers include Comcast, GE, IBM and Samsung. Laor says that Comcast went from running Cassandra on 400 machines to running the same workloads with Scylla on just 60.

Laor is playing the long game in the database market, and it’s not about taking on Cassandra, DynamoDB or any other individual product. “Our main goal is to be the default NoSQL database where if someone has big data, real-time workloads, they’ll think about us first, and we will become the default.”

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Nigerian online-only bank startup Kuda raises $1.6M

Nigerian fintech startup Kuda — a digital-only retail bank — has raised $1.6 million in pre-seed funding.

The Lagos and London-based company recently launched the beta version of its online mobile finance platform. Kuda also received its banking license from the Nigerian Central Bank, giving it a distinction compared to other fintech startups.

“Kuda is the first digital-only bank in Nigeria with a standalone license. We’re not a mobile wallet or simply a mobile app piggybacking on an existing bank,” Kuda bank founder Babs Ogundeyi told TechCrunch.

“We have built our own full-stack banking software from scratch. We can also take deposits and connect directly to the switch,” Ogundeyi added, referring to the Nigeria’s Central Switch — a SWIFT-like system that facilitates bank communication and settlements.

A representative for the Central Bank of Nigeria (speaking on background) confirmed Kuda’s banking license and status, telling TechCrunch, “As far as I’m aware there is no other digital bank [in Nigeria] that has a micro-finance license.”

 

Kuda Transaction Screen Card

Kuda offers checking accounts with no monthly-fees, a free debit card, and plans to offer consumer savings and P2P payments options on its platform in coming months.

“You can open a bank account within five minutes, do all the KYC in the app, and you get issued a new bank account number,” according to Ogundeyi. Kuda bank Founder CEO Babs OgundeyiOgundeyi — a repeat founder who exited classifieds site Motortradertrader.ng and worked in a finance advisory role to the Nigerian government — co-founded Kuda in 2018 with former Stanbic Bank software developer Musty Mustapha.

The two convinced investor Haresh Aswani to lead the $1.6 million pre-seed funding, along with Ragnar Meitern and other angel investors. Aswani confirmed his investment to TechCrunch and that he will take a position on Kuda’s board.

Kuda plans to use its seed funds to go from beta to live launch in Nigeria by fourth-quarter 2019. The startup will also build out the tech of its banking platform, including support for its developer team located in Lagos and Cape Town, according to Ogundeyi.

Kuda also intends to expand in the near future. “It’s Nigeria for right now, but the plan is build a Pan-African digital-only bank,” he said.

As of 2014, Nigeria has held the dual distinction as Africa’s largest economy and most populous country (with 190 million people).

To scale there, and add some physical infrastructure to its online model, Kuda has correspondent relationships with three of Nigeria’s largest financial institutions: GTBank, Access Bank and Zenith Bank.

He clarified the banks are partners and not investors. Kuda customers can use these banks’ branches and ATMs to put money into bank accounts or withdraw funds without a fee.

“Even though we don’t own a single branch, we actually have the largest branch network in the country,” Ogundeyi claimed.

Kuda’s plans to generate revenues focus largely around leveraging its bank balances. “We plan to match different liability classes to the different asset classes that we create. That’s how we make money, that’s how we get efficiency in terms of income,” Ogundeyi said.

In Nigeria, Kuda enters a potentially revenue-rich market, but its one that already hosts a crowded fintech field — as the country becomes ground zero for payments startups and tech investment in Africa.

Briter Bridges Lagos Nigeria Fintech MapIn both raw and per capita numbers, Nigeria has been slower to convert to digital payments than leading African countries, such as Kenya, according to joint McKinsey Company and Gates Foundation analysis done several years ago. The same study estimated there could be nearly $1.3 billion in revenue up for grabs if Nigeria could reach the same digital-payments penetration as Kenya.

A number of startups — established and new — are going after that prize in the West African country — several with a strategy to scale in Nigeria first before expanding outward on the continent and globally.

San Francisco-based, no-fee payment venture Chipper Cash entered Nigeria this month.

SF-based African fintech startup Chipper Cash expands to Nigeria

Series B-stage Nigerian payments company Paga raised $10 million in 2018 to further grow its customer base (that now tallies 13 million) and expand to Asia and Latin America.

Kuda CEO Babs Ogundeyi believes the startup can scale and compete in Nigeria on a number of factors, one being financial safety. He names the company’s official bank status and the Nigeria Deposit Insurance Corporation security that brings as something that can attract cash-comfortable bank clients to digital finance.

Ogundeyi also points to offerings and price.”We look to be the next generation bank where you can do everything— savings, payments and transfers — and also the one that’s least expensive,” he said.

These startups are locating in SF and Africa to win in global fintech

 

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Nextdoor adds new funding from Mary Meeker’s Bond, closes growth round at $170M

Social networking platform for neighbors, Nextdoor, today announced it has secured additional funding to close out its $170 million growth round. The new financing includes the $123 million Nextdoor raised in May from new investor Riverwood Capital along with existing investors Benchmark, Tiger Global Management and Kleiner Perkins. The additional funding announced today comes from Mary Meeker’s tech investment firm, Bond.

As a result of the new investment, Meeker will join Nextdoor’s board.

Meeker had left Kleiner Perkins last year, where she was well-known for her popular Internet Trends Report, released annually. She has since founded Bond, taking Kleiner’s entire former growth team with her, and raised $1.25 billion for Bond’s debut growth fund. 

As of the May 2019 round, Nextdoor was valued at $2.1 billion for its neighborhood-level networking platform which today generates revenue from sponsored posts and its real estate vertical for local agents. The company had said it was on track to double its revenue in 2019.

We understand the valuation remains at $2.1 billion, even with the additional funding.

Since its 2010 founding, the Nextdoor platform has grown to over 247,000 neighborhoods across 10 countries. Its international growth potential appears to be of interest to Meeker, as does the verification process Nextdoor uses to ensure its users actually live in the neighborhoods they join.

This is not how Facebook’s Groups product works, where verification is left up to individual Group admins. That results in neighboorhood groups filled with people who are just looking to research the area, those who used to live there but have since moved, businesses looking to advertise to locals, people who live nearby but don’t have a neighborhood group of their own, and various other non-neighbors.

“Nextdoor has proven itself as the leader in local connectivity. Nextdoor is built on trust – verifying each members’ name, address, and neighborhood – which creates the transparency and accountability that is core to building communities,” Meeker said. “Nextdoor is connecting people to the information and services that matter most, and I am excited to work with this impressive team to help expand Nextdoor’s local utility as well as it’s growing global footprint,” she added.

In recent months, Nextdoor has also grown its team with new hires Antonio Silveira as its head of engineering; Tatyana Mamut, head of product; Bryan Power, head of people; and Craig Lisowski, head of data, information systems and trust.

“We could not be more thrilled to welcome Bond to our family of investors. Mary Meeker has been a strong supporter of Nextdoor for many years and is deeply knowledgeable about consumer technology,” stated Sarah Friar, CEO of Nextdoor, in a statement. “At Nextdoor, we believe that change starts with each of us opening our front doors and building deeper connections with the people nearest to us: our neighbors. We’re thrilled and honored to partner with all of our forward-looking investors to catalyze neighbors’ ability to connect with relevant local conversations, organizations, and businesses, engage in real-world interactions, and unlock the global power of local.”

 

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New investment firm wants to change the way we fund early stage companies — from New Hampshire

The three founders of York IE have a vision about how to change the way early stage startups get funding. They have experience shattering norms, having built a successful startup, Dyn, in Manchester, New Hampshire, which is not exactly a hot-bed of startup activity.

The founders want to take that same spirit and apply it to investing, while maintaining its headquarters in New Hampshire (and Boston). In fact, the three founders — Kyle York, Joe Raczka and Adam Coughlin — launched Dyn and built it to $30 million in ARR before taking a dime in venture funding. They went onto raise $88 million before being acquired by Oracle in 2016. They believe they can apply the lessons that they learned to other early stage startups.

“We think, especially in B2B and SaaS, there is a way to build a scalable, effective and efficient business without chasing massive fund raises, diluting your company, bringing on traditional venture investors and chasing those kind of on-paper vanity metrics,” company CEO and co-founder Kyle York told TechCrunch.

For the past five years, while working at Oracle after the acquisition, the founders have been testing their theories while advising startups and acting as angel investors. They believed it was time to take all of those learnings and apply it to their own firm.

“I started thinking about how to transition out of Oracle, and what I wanted to do from a career perspective and we wanted to build a modern investment firm less focused on how to deploy as much capital as possible for the limited partners, and more on working with the entrepreneurs to help coach them on a path to success,” York said.

The company still wants to act as investors, and to make money along the way, but they want to help build more solid, grounded companies. York says that they want the founders truly understand that they are selling a part of their company in exchange for those dollars, and that it makes sense to have a strong foundation before taking on money.

York wants to change this culture of fund raising for fund raising’s sake. He acknowledges that some companies with deep tech or deep infrastructure require that kind of substantial up-front investment to get off the ground, but SaaS companies are supposed to be able to take advantage of modern technology to build companies more easily, and he wants to see them build solid companies first and foremost.

“The goal shouldn’t be to raise more capital. The goal should be to build a healthy successful, scalable company,” he said.

To put their money where their mouth is, the new firm will not take management fees. “We are investing like a normal investor and coming through with equity position, but we are betting on the future. In essence, if the startup wins, then we win.”

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Snyk grabs $70M more to detect security vulnerabilities in open source code and containers

A growing number of IT breaches has led to security becoming a critical and central aspect of how computing systems are run and maintained. Today, a startup that focuses on one specific area — developing security tools aimed at developers and the work they do — has closed a major funding round that underscores the growth of that area.

Snyk — a London and Boston-based company that got its start identifying and developing security solutions for developers working on open source code — is today announcing that it has raised $70 million, funding that it will be using to continue expanding its capabilities and overall business. For example, the company has more recently expanded to building security solutions to help developers identify and fix vulnerabilities around containers, an increasingly standard unit of software used to package up and run code across different computing environments.

Open source — Snyk works as an integration into existing developer workflows, compatible with the likes of GitHub, Bitbucket and GitLab, as well as CI/CD pipelines — was an easy target to hit. It’s used in 95% of all enterprises, with up to 77% of open source components liable to have vulnerabilities, by Snyk’s estimates. Containers are a different issue.

“The security concerns around containers are almost more about ownership than technology,” Guy Podjarny, the president who co-founded the company with Assaf Hefetz and Danny Grander, explained in an interview. “They are in a twilight zone between infrastructure and code. They look like virtual machines and suffer many of same concerns such as being unpatched or having permissions that are too permissive.”

While containers are present in fewer than 30% of computing environments today, their growth is on the rise, according to Gartner, which forecasts that by 2022, over 75% of global organizations will run containerized applications. Snyk estimates that a full 44% of Docker image scans (Docker being one of the major container vendors) have known vulnerabilities.

This latest round is being led by Accel with participation from existing investors GV and Boldstart Ventures. These three, along with a fourth investor (Heavybit) also put $22 million into the company as recently as September 2018. That round was made at a valuation of $100 million, and from what we understand from a source close to the startup, it’s now in the “range” of $500 million.

“Accel has a long history in the security market and we believe Snyk is bringing a truly unique, developer-first approach to security in the enterprise,” said Matt Weigand of Accel said in a statement. “The strength of Snyk’s customer base, rapidly growing free user community, leadership team and innovative product development prove the company is ready for this next exciting phase of growth and execution.”

Indeed, the company has hit some big milestones in the last year that could explain that hike. It now has some 300,000 developers using it around the globe, with its customer base growing some 200 percent this year and including the likes of Google, Microsoft, Salesforce and ASOS (sidenote: you know that if developers at developer-centric places themselves working at the vanguard of computing, like Google and Microsoft, are using your product, that is a good sign). Notably, that has largely come by word of mouth — inbound interest.

The company in July of this year took on a new CEO, Peter McKay, who replaced Podjarny. McKay was the company’s first investor and has a track record in helping to grow large enterprise security businesses, a sign of the trajectory that Snyk is hoping to follow.

“Today, every business, from manufacturing to retail and finance, is becoming a software business,” said McKay. “There is an immediate and fast growing need for software security solutions that scale at the same pace as software development. This investment helps us continue to bring Snyk’s product-led and developer-focused solutions to more companies across the globe, helping them stay secure as they embrace digital innovation – without slowing down.”