Tag: funding

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JASK nets $25m from Kleiner to build out autonomous security operations

Cyberthreats are on the rise everywhere. Companies are facing a barrage of attacks from hackers near and far, and their security operations centers are struggling to keep up. They can no longer rely on manual processes to respond to automated attacks, forcing security chiefs to consider new approaches to automating their defenses.

That’s where JASK comes in. The startup offers an autonomous security operations platform to respond to this new security environment, and it’s a mission that is finding resonance among investors. After raising a $12 million Series A round led by Dell Technologies Capital last year, the company has now received a $25 million Series B from Ted Schlein of Kleiner Perkins, bringing the company’s total funding to $39 million including its seed. Schlein will join the board of directors.

Schlein is a distinguished security investor, having invested in such noted security exits as Mandiant, LifeLock, and CarbonBlack. He was also the first investor in ArcSight, where JASK founders Greg Martin and Damian Miller led the security operations practice. Shlein is also an investor in stealthy security startup Endgame Systems as well as enterprise analytics startup Segment.

As I wrote in an in-depth profile of JASK earlier this year, the startup is attempting to completely rebuild the modern security operations center from the ground up. Rather than building manual playbooks, it wants to create a hybrid human-artificial intelligence system that can learn and adapt to new threats while offering more engaging feedback to security analysts. The hope is that the platform will massively reduce the burden of security so that human analysts can spend more of their time on challenging cases rather than routine ones.

The challenges in building such an autonomous security operations center (SOC) are multi-fold. Wrangling the data is difficult, since formats can be highly divergent between companies. How companies respond to threats can also be very diverse — some companies may choose to ignore some low-level threats while others have more robust policies, requiring JASK’s platform to adapt to each company in a unique way. Perhaps the toughest challenge is just constantly adapting the system’s machine learning models to counter innovative hackers.

A few weeks ago, the company announced further visualization tools to help security analysts understand their threat environment. Last month, it brought on Greg Fitzgerald as chief marketing officer. Fitzgerald previously served as CMO of security high-flyer Cylance, as well as SVP of marketing at Fortinet and Sourcefire at Cisco. It has also announced a massive expansion of its second headquarters in Austin, where it expects to grow to 100 people this year.

In addition to Kleiner and DTC, other investors included Battery, TenEleven Ventures, and Vertical Venture Partners.

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Instead of points, Bumped gives equity in the companies you shop at

What does brand loyalty even mean anymore? App downloads, points, stars, and other complex reward systems have not just spawned their own media empires trying to decipher them, they have failed at their most basic objective: building a stronger bond between a brand and its consumers.

Bumped wants to reinvent the loyalty space by giving consumers shares of the companies they shop at. Through Bumped’s app, consumers choose their preferred retailer in different categories (think Lowe’s vs The Home Depot in home improvement), and when they spend money at that store using a linked credit card, Bumped will automatically give them ownership in that company.

The startup, which is based in Portland and was founded in March 2017, announced the beta launch of its service today, as well as a $14.1 million series A led by Dan Ciporin at Canaan Partners, along with existing seed investors Peninsula Ventures, Commerce Ventures, and Oregon Venture Partners.

Bumped is a brokerage, and the company told me that it has passed all FINRA and SEC licensing. When consumers spend money at participating retailers, they receive bona fide shares in the companies they shop at. Each retailer determines a loyalty percentage rate, which is a minimum of 1% and can go up to 5%. Bumped then buys shares off the public market to reward consumers, and in cases where it needs to buy fractional shares, it will handle all of those logistics.

Bumped’s app allows users to track their shares

For founder and CEO David Nelsen, the startup doesn’t just make good business sense, it can have a wider social impact of democratizing access to the public equity markets. “A lot of brands need to build an authentic relationship with the customers,” he explained to me. “The brands that have a relationship with consumers, beyond price, are thriving.” With Bumped, Nelsen’s goal is to “align the interests of a shareholder and consumer, and everybody wins.”

His mission is to engage more Americans into the equity markets and the power of ownership. He notes that far too many people fail to setup their 401k, and don’t invest regularly in the stock market, citing a statistic that only 13.9% of people directly own a share of stock. By offering shares, he hopes that Bumped engages consumers to think about their relationship to companies in a whole new way. As Nelsen put it, “we are talking about bringing a whole new class of shareholders into the market.”

This isn’t the first time that Nelsen has built a company in the loyalty space. He previously was a co-founder and CEO of Giftango, a platform for prepaid digital gift cards that was acquired by InComm in late 2012.

Consumers will have to choose their Bumped loyalty partner in each category, like burgers

That previously experience has helped the company build an extensive roster for launch. Bumped has 19 brands participating in the beta, including Chipotle, Netflix, Shake Shack, Walgreens, and The Home Depot. Another 6 brands are currently papering contracts with the firm.

Ciporin of Canaan said that he wanted to fund something new in the loyalty space. “There has been just a complete lack of innovation in the loyalty space,” he explained to me. “I think about it as Robinhood meets airline points programs.” One major decider for Ciporin in making the investment was academic research, such as this paper by Jaakko Aspara, showing that becoming a shareholder in a company tended to make consumers significantly more loyal to those brands.

In the short run, Bumped heads into a crowded loyalty space that includes companies like Drop, which I have covered before on TechCrunch. Nelsen believes that the stock ownership model is “an entirely different mechanism” in loyalty, and that makes it “hard to compare” to other loyalty platforms.

Longer term, he hints at exploring how to offer this sort of equity loyalty model to small and medium businesses, a significantly more complex challenge given the lack of liquid markets for their equity. Today, the company is exclusively focused on publicly-traded companies.

Bumped today has 14 people, and is targeting a team size of around 20 employees.

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India’s Times Internet buys popular video app MX Player for $140M to get into streaming

Times Internet, the digital arm of Indian media firm Times Group, is getting into the digital content space, but not in the way you might think.

The company’s previous venture — an OTT called BoxTV.com — shut down in 2016 after an underwhelming four-year period. Now it is taking a radically different strategy by buying video playback app MX Player for Rs 1,000 crore, or around $140 million. The company didn’t disclose its stake but said it is a majority percentage.

The service originates from Korea but it has become hugely popular in India as a way to play media files, for example from an SD card, on a mobile device. It is a huge hit India, where the app claims 175 million monthly users — while the country accounts for 350 million of its 500 million downloads.

From here, Times Internet plans to introduce a streaming content service to MX Player users which Karan Bedi, MX Player CEO, expects to go live before August. The plan is to introduce at least 20 original shows and more 50,000 content across multiple local languages in India during the first year. The duo said the lion’s share of that investment money would go into developing content.

Bedi, a long-time media executive who took the job at MX Player eight months ago, said the service will be freemium and very much targeted at the idea of providing an alternative to television in India. He added that the deal had been in negotiation for the past year, which validates a January report from The Ken which first broke news of acquisition.

There are plenty of video streaming services in India. Beyond Netflix and Amazon Prime, Hotstar (from Rupert Murdoch-owned Star India) is making waves alongside Jio TV from Reliance Jio, but data from App Annie suggests MX Player is way out ahead. The analytics firm pegs MX Player at nearly 50 million daily users, as of June, well ahead of Hotstar (14.1 million), JioTV (7.4 million) and others.

Both Bedi and Times Internet MD Satyan Gajwani explained to TechCrunch in an interview that a big focus is differentiation and building a digital channel for India’s young since the average viewer demographics for MX player are hugely different to Indian TV audiences. Some 80 percent of the app’s users are aged under 35 (70 percent is aged under 25), while the gender balance is skewed more towards men.

“A lot of people aren’t happy with Indian TV,” Bedi said. “There are a lot is soaps and it is not focused on young people. [The MX PLayer audience] is exactly the opposite of the Indian tv demographic.”

That not only plays into growing a place for ‘millennial’ content, but it also means the streaming service may find success with advertisers if it can offer a gateway to young Indians. Beyond audience, there’s also flexibility. Gajwani explained further that unlike traditional TV and even YouTube, the Times Internet-MX Player service will offer different options for advertisers who “work with content creators to create stuff, sponsor a show, or find various different ways to reach scale.”

“India has a $6 billion TV ad market and we think this could unlock some of the money going to TV,” he said.

Times Internet MD Satyan Gajwani

“This audience on here is genuinely different, [rather than cord-cuttters] they’re almost cord-nevers,” Bedi added. “This is a big new audience that’s never been tapped by broadcasters.”

The idea is to gently introduce programming that is accessible to a large audience in India, who might not be open to paying, and then test other revenue models later.

“Further down the line, we might include subscriptions to scale,” Gajwani added. “Subscription is growing but it’s much much smaller today, what excites us is the idea we’ll have 100 million people streaming a show.”

MX Player might not be well known, but scale is one thing it certainly has in spades. The company just crossed 500 million downloads on Android, but Bedi pointed out that many are not counted because they are side-loaded, which doesn’t register with the Google Play Store.

All told, he said, the app picks up 1.2 million downloads per day with around 350,000 coming from the official Android app store, he said. Bedi said that, among other things, the app is typically distributed by smartphone vendors in tier-two and three Indian cities to help phone buyers get the essential apps for their device right away.

The question now is whether Times Internet can leverage that organic growth to build another business on top of the basic demand for video playback. This is certainly a unique approach.

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Lyft valuation hits $15.1 billion after fresh $600 million in funding

Lyft has raised an additional $600 million in a Series I financing round led by Fidelity Management & Research Company, pushing its post-money valuation to $15.1 billion. The company’s value has more than doubled in the past 14 months.

Senator Investment Group LP joined Fidelity in the capital raise. Fidelity has poured more than $800 million into the ride-hailing company, making it one of Lyft’s largest investors.

Lyft has spent the past 18 months aggressively expanding into new U.S. cities, as well as into Canada and pursuing its autonomous vehicle ambitions. Lyft’s plans — along with some of rival Uber’s scandalous missteps — have helped the company increase its market share in the U.S. to 35 percent. In January 2017, Lyft had just 22 percent market share in the United States.

Of course, scaling up is a costly affair. And Lyft has spent the past year seeking investor money. The ride-hailing company has raised $2.9 billion in primary capital — that includes the $600 million announced Wednesday — since April 2017.

In total, Lyft has raised $5.1 billion since its inception. Other investors from previous rounds include AllianceBernstein, Baillie Gifford, KKR, Janus CapitalG, Rakuten and Ontario Teachers’ Pension Plan.

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Codefresh raises $8M Series B round for its container-centric CI/CD platform

Codefresh, a continuous integration and delivery platform built for the Kubernetes container ecosystem, today announced that it has raised an $8 million Series B round led by M12, Microsoft’s venture fund. Viola Ventures, Hillsven and CEIF also participated in this round, which brings the company’s total funding to $15.1 million.

In a market where there are seemingly more CI/CD platforms every day, Codefresh sets itself apart thanks to its focus on Kubernetes, which is now essentially the de facto standard for container orchestration services and which is seeing a rapid growth in adoption. The service promises that it can help developers to automate their application deployments to Kubernetes and that teams will see “up to 24X faster development times.” That number seems a bit optimistic, but the whole point of adoption Kubernetes and CI/CD is obviously to speed up the development and deployment process.

“The meteoric rise of Kubernetes is happening so fast that most toolchains haven’t kept up, and M12 knows it,” said Raziel Tabib, Codefresh co-founder and CEO. “With this latest round of funding we’re going to aggressively accelerate our roadmap and expand our customer base.”

The Codefresh platform hit general availability in 2017 and the company currently claims about 20,000 users, including the likes Giphy.

 

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CloudBees raises $62M for its devops platform

CloudBees, the Jenkins-based devops platform that recently acquired Codeship, today announced that it has raised a $62 million funding round. The round consists of a traditional $37 million equity round led by Delta-v Capital and $25 million of growth financing from Golub Capital’s Late Stage Lending. Existing investors, including Matrix Partners, Lightspeed Ventures, Unusual Ventures and Verizon Ventures, also participated.

With this round, CloudBees has now raised a total of over $100 million since it was founded back in 2010. In a fast-growing and competitive business like devops, that’s the kind of funding you need to be able to buy up smaller players and expand quickly to gain the kind of market share you need to compete with the other large players in this business.

“Today, virtually every company is using software to continuously improve its products and business,” said Matt Parson, CloudBees’ chief financial officer. “The DevOps market is exploding as the transformation to a global continuous economy emerges. We have seen significant growth in our business over the last several years, but we now see an even bigger opportunity just in front of us as continuous software delivery becomes a strategic imperative for every business.”

CloudBees’ customers currently include 46 of the Fortune 100 enterprises and three of the Fortune 10.

The open source Jenkins automation server forms the core of CloudBees’ product lineup (and it also offers training and certification for Jenkins). Like similar open-source companies, CloudBees then extends Jenkins with additional enterprise features and bundles them into its various offerings. With the recently acquired CodeShip, it now also offers an additional continuous integration and delivery platform that it can offer as a hosted service that isn’t so closely tied to Jenkins.

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Highland Europe closes new €463M fund to invest in growth-stage tech

Highland Europe, the European “growth-stage” technology investor, has closed a new €463 million fund, the firm’s third fund in just six years.

Targeting “globally ambitious” European software and internet-enabled businesses, the VC typically writes initial cheques of between €10 million and €30 million. It says that startups seeking investment need to demonstrate that they have reached sufficient scale “to confirm the validity of their business model.”

That may seem quite conservative by some venture standards. However, it’s an investment criteria that Highland Europe says is working, with all of its main LPs bullish enough to return for a third bite of the apple. “Significantly oversubscribed, the fund was raised in just 12 weeks and takes the firm’s assets under management to €1.1 billion,” says the VC.

On that note, Highland Europe counts 29 active companies in its portfolio, with combined revenues of €1.1 billion in 2017. In terms of exits, over the last 18 months, the firm has most recently sold stakes in luxury fashion retailer MatchesFashion.com, game developer SocialPoint and waste industry software provider AMCS Group.

Meanwhile, Berlin-based GetYourGuide, another Highland Europe-backed startup, raised $75 million in a follow-on round last year.

“There are different kinds of players in our industry and there is room for everybody,” Highland Europe partner and co-founder Fergal Mullen told me on a call last week. “Let’s be clear, we are not the early-stage people who make a bet on a concept, that’s not what we do. We need proof points, and if the proof points are there we have got 10 to 50 or 60 million available capital for each company.”

Asked how the European startup ecosystem has changed in the last few years and how it currently compares to Silicon Valley, Mullen says that although the U.S. still has a lot more capital to deploy — and is probably overcapitalized — European founders are more ambitious than ever and European companies continue to punch way above their funding weight.

“If you look at the mentality and ambition of the of young entrepreneurs in Europe nowadays, as far as I’m concerned there’s no difference between Europe and the U.S., the ambition level is there now,” he says. “The big thinking is there. The positive frame of mind. And the willingness to push the boat out, maybe fail, make mistakes, but pick up and move on. Therefore, the young entrepreneurs that we meet are looking to match up with venture capital and growth equity players who are prepared to help them achieve their full ambition and go for it. That’s a huge change and that’s a lot to do with the maturing of the market here in Europe.”

Mullen is impressed by the number of valuable companies being created in Europe and says that the quality of these companies is “exceptional.” “When I say quality I mean our companies are more capital efficient. They have to be because there’s not as much capital available so they use less capital to get to the same value as a U.S. unicorn. And they have typically twice the revenue of a U.S. unicorn on average. So they have to get to a bigger scale for a similar value.”

Longer-term, he references the pipeline of talent Europe has as another factor in its favor, pointing me to the most recent Mary Meeker “Internet Trends” report that suggests the EU is churning out many more STEM graduates than the U.S., even if China is accelerating fastest.

“This is often forgotten, [but] Europe right now is graduating hundreds of thousands more STEM graduates per year than the United States. At the PhD level, we are graduating 35,000 to 40,000 more per year. So that data point alone to me is a very compelling reason to be long on European tech for the next few decades,” says Mullen.

One thing Highland Europe won’t do is invest in a particular sector just because it is in vogue, says Mullen, after I note the VC firm has only invested in a couple of fintech companies and none you are likely to have heard of. “We don’t invest in the hype phase of any sector,” he says. “We look at fintech all the time, but our criteria are very, very strict. If you don’t have a certain amount of revenue and you’re not demonstrating real capital efficiency, we’re not going to jump in just because fintech is hot.”

Likewise, Mullen singles out AI, arguing that a lot of the concepts being pitched as AI-based aren’t true AI. “At best they might be NL, but they’re not AI. If you define it as an algorithmic-based approach with the ability of the algorithm to evolve itself and it learns and ingests more data… there is very little that is genuinely AI. That sector is very much overhyped, but it doesn’t mean we’re not looking and looking hard. At the end of the day we don’t care what it is as long as it is really working and working well.”

Challenged to name sectors that are under-hyped, the Highland Capital partner says mundane industries offer a great opportunity, citing AMCS, which operates in the waste management industry. “That’s a trillion-plus industry that is completely under invested from a tech stack standpoint.”

Adds Mullen: “At the end of the day, what’s our objective? Our objective is to deliver fantastic results to our investors and along the way we want to have a great time with wonderful entrepreneurs that we enjoy working with. If you have all of that you don’t have a job, you’ve got a vocation. It’s just an extraordinary business to be in.”

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Confirmed: Sequoia has already secured three-quarters of what will be an $8 billion global fund

Sequoia Capital, the 46-year-old venture firm, has secured $6 billion in capital commitments for an $8 billion global fund, according to a new report in the Financial Times. The report echoes a late April piece in The Wall Street Journal that reported Sequoia investors had already committed “roughly” $6 billion to the new fund.

A source familiar with the matter confirms for us that both stories are accurate.

The capital commitments thus far have come from investors with no prior relationship to Sequoia. The firm intends to turn to its previous investors for the rest of the capital commitments, which Sequoia is securing in increments of $250 million or more.

Sequoia now makes more than 50 cents from every dollar returned to its investors from its overseas bets, according to a separate source close to the firm, with the firm’s China strategy proving particularly fruitful. Like numerous Silicon Valley firms, Sequoia decided to dip its toe into the market beginning in 2005. Unlike most Silicon Valley firms that opted not to remain in China, owing either to attrition or because of tenuous relationships with local VCs, Sequoia stayed put, empowering the founder of Sequoia Capital China, Neil Shen, to eventually build up offices in Beijing, Hong Kong and Shanghai — and to assemble a portfolio that is today rife with highly valuable companies.

Among the many companies Sequoia Capital China has funded: Meituan-Dianping, the group-discount service that sells locally found products and retail services and just filed to go public in Hong Kong; Ele.me, the food ordering company that sold a controlling stake in its business to Alibaba in April for $9.5 billion; DJI, the drone company, which was reported to be raising $1 billion in new funding this spring at a $15 billion valuation; VIP.com, the commerce platform that went public in 2012 and currently boasts a $7.2 billion market cap; and Didi, the mobile transportation giant that’s in a race against its U.S. rival Uber to conquer the global ride-hailing market.

Sequoia Capital China is also an investor in the electric car company Nio, which filed confidentially for a U.S. IPO last month.

Many of the aforementioned companies started as earlier-stage investments for Sequoia, and a source familiar with the matter to says expect the same, no matter how much Sequoia raises. This person observes that the majority of the funds from Sequoia’s first two global growth funds — which were $700 billion and $2 billion, respectively — have been funneled to companies with which Sequoia was already in business, adding that its new funds will also go mostly to existing portfolio companies and new opportunities.

The race to gather up an unprecedented amount of money — by Sequoia most notably, but also numerous other firms that have been raising record-breaking amounts this year — is directly correlated to one of the biggest disruptive trends in the venture industry in recent years: SoftBank’s Vision Fund, a $100 billion fund for now, though SoftBank CEO Masayoshi Son has said expect more gargantuan funds in the not-too-distant future. “The Vision Fund was just the first step,” he told the Nikkei last fall. “Ten trillion yen [$88 billion] is simply not enough. We will briskly expand the scale. Vision Funds 2, 3 and 4 will be established every two to three years.”

As sources close to the Vision Fund explained its strategy to us last fall, its mission is not to produce venture-like returns. The idea is instead to return more money to investors than private equity firms like KKR, whose first 18 private equity funds wound up delivering more than two times total capital invested on a gross basis, and produced a net IRR of 18.9 percent. Said one source in particular, “If someone is investing in [Vision Fund], he’s expecting to get better returns than with KKR and Blackstone.” Indeed, added this person, 20 percent IRR over seven years — the time SoftBank estimates it will take most of Vision Fund’s bets to play out — is the “worst-case scenario.”

Shen meanwhile suggests that, SoftBank notwithstanding, the game has changed. As he tells the Financial Times of Sequoia’s massive new fundraising effort: “The magnitude is different today because the companies are different today . . . To be the lead investor in a company you can no longer just invest $100 million . . . if you want to build a company that is worth several billion. For that you need $400 million or $500 million.”

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Confirmed: Sequoia has already secured three-quarters of what will be an $8 billion global fund

Sequoia Capital, the 46-year-old venture firm, has secured $6 billion in capital commitments for an $8 billion global fund, according to a new report in the Financial Times. The report echoes a late April piece in The Wall Street Journal that reported Sequoia investors had already committed “roughly” $6 billion to the new fund.

A source familiar with the matter confirms for us that both stories are accurate.

The capital commitments thus far have come from investors with no prior relationship to Sequoia. The firm intends to turn to its previous investors for the rest of the capital commitments, which Sequoia is securing in increments of $250 million or more.

Sequoia now makes more than 50 cents from every dollar returned to its investors from its overseas bets, according to a separate source close to the firm, with the firm’s China strategy proving particularly fruitful. Like numerous Silicon Valley firms, Sequoia decided to dip its toe into the market beginning in 2005. Unlike most Silicon Valley firms that opted not to remain in China, owing either to attrition or because of tenuous relationships with local VCs, Sequoia stayed put, empowering the founder of Sequoia Capital China, Neil Shen, to eventually build up offices in Beijing, Hong Kong and Shanghai — and to assemble a portfolio that is today rife with highly valuable companies.

Among the many companies Sequoia Capital China has funded: Meituan-Dianping, the group-discount service that sells locally found products and retail services and just filed to go public in Hong Kong; Ele.me, the food ordering company that sold a controlling stake in its business to Alibaba in April for $9.5 billion; DJI, the drone company, which was reported to be raising $1 billion in new funding this spring at a $15 billion valuation; VIP.com, the commerce platform that went public in 2012 and currently boasts a $7.2 billion market cap; and Didi, the mobile transportation giant that’s in a race against its U.S. rival Uber to conquer the global ride-hailing market.

Sequoia Capital China is also an investor in the electric car company Nio, which filed confidentially for a U.S. IPO last month.

Many of the aforementioned companies started as earlier-stage investments for Sequoia, and a source familiar with the matter to says expect the same, no matter how much Sequoia raises. This person observes that the majority of the funds from Sequoia’s first two global growth funds — which were $700 billion and $2 billion, respectively — have been funneled to companies with which Sequoia was already in business, adding that its new funds will also go mostly to existing portfolio companies and new opportunities.

The race to gather up an unprecedented amount of money — by Sequoia most notably, but also numerous other firms that have been raising record-breaking amounts this year — is directly correlated to one of the biggest disruptive trends in the venture industry in recent years: SoftBank’s Vision Fund, a $100 billion fund for now, though SoftBank CEO Masayoshi Son has said expect more gargantuan funds in the not-too-distant future. “The Vision Fund was just the first step,” he told the Nikkei last fall. “Ten trillion yen [$88 billion] is simply not enough. We will briskly expand the scale. Vision Funds 2, 3 and 4 will be established every two to three years.”

As sources close to the Vision Fund explained its strategy to us last fall, its mission is not to produce venture-like returns. The idea is instead to return more money to investors than private equity firms like KKR, whose first 18 private equity funds wound up delivering more than two times total capital invested on a gross basis, and produced a net IRR of 18.9 percent. Said one source in particular, “If someone is investing in [Vision Fund], he’s expecting to get better returns than with KKR and Blackstone.” Indeed, added this person, 20 percent IRR over seven years — the time SoftBank estimates it will take most of Vision Fund’s bets to play out — is the “worst-case scenario.”

Shen meanwhile suggests that, SoftBank notwithstanding, the game has changed. As he tells the Financial Times of Sequoia’s massive new fundraising effort: “The magnitude is different today because the companies are different today . . . To be the lead investor in a company you can no longer just invest $100 million . . . if you want to build a company that is worth several billion. For that you need $400 million or $500 million.”

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b8ta raises $19 million Series B led by Macy’s

b8ta, the retail-as-a-service startup, has closed a $19 million Series B round led by Macy’s, with participation from Sound Ventures, Palm Drive Capital, Capitaland, Graphene Ventures, Khosla Ventures and Plug and Play Ventures. This round brings b8ta’s total funding to $39 million.

Macy’s decision to lead this round comes in light of its recent partnership with b8ta to enhance the retailer’s experiential-based concept called The Market. Macy’s is also expanding its partnership with b8ta to launch The Market in a larger space, entirely powered by Built by b8ta, which functions as a retail-as-a-service platform for brands that want a physical presence. b8ta’s software solution includes checkout, inventory, point of sale, inventory management, staff scheduling services and more.

“Testing a shop with them in their store and having really good success made us feel bullish that this model would work well for them,” b8ta CEO Vibhu Norby told TechCrunch.

To the outsider, there’s this idea that Macy’s is struggling — in light of a bunch of store closures. That was a conversation b8ta had internally, Norby said.

“As an example, our board was initially not certain we should do something with them, but I felt like it was worth a shot,” Norby told me. “For us to get comfortable, we spent a lot of time trying to understand their business. What we found was that perception in the media didn’t really meet the reality for us. The reality is Macy’s is one of the most important companies in the country.”

Macy’s, Norby said, is also one of the largest real estate companies in the world and owns “so much real estate in all of the best places.”

He added, “it’s not that retail itself is dying, it’s just that it’s changing. The way people want to shop is changing and we have a shared alignment on bringing that next generation of a company into the space.”

In addition to the expanded partnership with Macy’s, b8ta is opening new flagship stores in Chicago and Tysons Corner, Va. b8ta currently has more than 78 flagship stores across the country to let consumers experience tech gadgets in real life.