Tag: Fundings & Exits

Posted on

Pomelo exits stealth mode with $20M seed to rethink international money transfer

Eric Velasquez Frenkiel had a seemingly simple thought when visiting his family in the Philippines, impressed by the cashless economy that had formed. Instead of sending money to his family once a year — a costly, fee-heavy affair — why can’t he just leave his credit card there?

As with many things in fintech, it wasn’t that simple. But the seed of the idea made the former enterprise chief executive turn his career into a bet on one of fintech’s most elusive problems.

Pomelo, Frenkiel’s new startup launching out of stealth today, wants to make it easier to send remittance payments and conduct international money transfers, with a credit twist.

To execute on that vision, Pomelo has raised a $20 million seed round led by Keith Rabois at Founders Fund and Kevin Hartz at A* Capital, with participation from Afore Capital, Xfund, Josh Buckley and The Chainsmokers. The round also included a $50 million warehouse facility, which will allow Pomelo to give upfront cash to people who want to make transfers.

Venture investors are not the only cohort showing interest; more than 120,000 people have joined Pomelo’s waitlist over six months, according to Frenkiel. (It’s important not to confuse this Pomelo with another Pomelo, a fintech-as-a-service platform for Latin America that has raised $9 million in funding.) Oh, fintech.

Here’s how the startup works: If someone wants to send money overseas, they make a Pomelo account, which comes with up to four credit cards. The creator of the account — let’s just assume that they’re the one that is sending the money — can set limits, pause cards and view spending habits.

Pomelo’s key tweak is around credit. Senders can give cash, in the form of credit, to family members — which the startup thinks will help with instant access to funds, fraud and chargeback protection and, for potential immigrants that may use this to send money back home, a way to boost one’s credit score with more transaction history.

Challenges still await any fintech, whether traditional or scrappy upstart, that is betting its business on backing potentially risky individuals. For example, Pomelo doesn’t want to rely on credit scores when deciding whether or not to trust a sender, because the metric historically leaves out those who don’t have a bounty of access to financial literacy or spending.

Image Credits: Pomelo

“If you do have a credit score and you have enough credit history, you would get up to $1,000 a month,” Frenkiel said. “But if you don’t have credit or wish to improve your credit, we give you a credit builder.” Customers are invited to supply a secure deposit, so that there’s a way to prove creditworthiness down the road, and Pomelo is able to “actually balance the need to extend credit but also ensure we stay in business long term.”

International money transfer continues to be an expensive affair for senders. Unsurprisingly, that pain point has led to a plethora of startups. Startups offer a sliding scale proposition, meaning it costs more to send more money, or a flat-fee value proposition, with a $5 fee for all transfers regardless of size. Per the World Bank, around 6% of a total check is removed via fees and exchange rate markups.

Rethinking remittance thus feels like a common pitch. Frenkiel says that Pomelo’s closest competitors are Xoom and Remitly, although he thinks they differentiate in two keys ways: the focus on credit, and a “fundamentally new revenue model.”

Pomelo doesn’t make money from senders via transfer fees, instead leaning its business on interchange fees paid by merchants. “You shouldn’t have to pay money to send money,” Frenkiel adds.

While interchange fees have their own slew of issues as a business model, let’s end with some insurance: both Visa and Mastercard were interested in partnering with the startup, but the latter won the deal.

“Mastercard allows us to work in more than 100 countries,” Frenkiel said. “Obviously, we’re starting off with a few, but the idea is that there’s far more endpoints to take Mastercard or Visa than having banking as a prerequisite to send money… we hope we can eventually deliver a product to wherever MasterCard is accepted around the world. ”

The startup is servicing the Philippines, but soon plans to expand to Mexico and India as well as other geographies.

Posted on

Pliops lands $100M for chips that accelerate analytics in data centers

Analyzing data generated within the enterprise — for example, sales and purchasing data — can lead to insights that improve operations. But some organizations are struggling to process, store and use their vast amounts of data efficiently. According to an IDC survey commissioned by Seagate, organizations collect only 56% of the data available throughout their lines of business, and out of that 56%, they only use 57%.

Part of the problem is that data-intensive workloads require substantial resources, and that adding the necessary compute and storage infrastructure is often expensive. For companies moving to the cloud specifically, IDG reports that they plan to devote $78 million toward infrastructure this year. Thirty-six percent cited controlling costs as their top challenge.

That’s why Uri Beitler launched Pliops, a startup developing what he calls “data processors” for enterprise and cloud data centers. Pliop’s processors are engineered to boost the performance of databases and other apps that run on flash memory, saving money in the long run, he claims.

“It became clear that today’s data needs are incompatible with yesterday’s data center architecture. Massive data growth has collided with legacy compute and storage shortcomings, creating slowdowns in computing, storage bottlenecks and diminishing networking efficiency,” Beitler told TechCrunch in an email interview. “While CPU performance is increasing, it’s not keeping up, especially where accelerated performance is critical. Adding more infrastructure often proves to be cost prohibitive and hard to manage. As a result, organizations are looking for solutions that free CPUs from computationally intensive storage tasks.”

Pliops isn’t the first to market with a processor for data analytics. Nvidia sells the BlueField-3 data processing unit (DPU). Marvell has its Octeon technology. Oracle’s SPARC M7 chip has a data analytics accelerator coprocessor with a specialized set of instructions for data transformation. And in the realm of startups, Blueshift Memory and Speedata are creating hardware that they say can perform analytics tasks significantly faster than standard processors.

Pliops

Image Credits: Pliops

But Pliops claims to be further along than most, with deployments and pilots with customers (albeit unnamed) including fintechs, “medium-sized” communication service providers, data center operators and government labs. The startup’s early traction won over investors, it would seem, which poured $100 million into its Series D round that closed today.

Koch Disruptive Technologies led the tranche, with participation from SK Hynix and Walden International’s Lip-Bu Tan, bringing Pliops’ total capital raised to date to more than $200 million. Beitler says that it’ll be put toward building out the company’s hardware and software roadmap, bolstering Pliops’ footprint with partners and expanding its international headcount.

“Many of our customers saw tremendous growth during the COVID-19 pandemic, thanks in part to their ability to react quickly to the new work environment and conditions of uncertainty. Pliops certainly did. While some customers were affected by supply chain issues, we were not,” Beitler said. “We do not see any slowdown in data growth — or the need to leverage it. Pliops was strong before this latest funding round and even stronger now.”

Accelerating data processing

Beitler, the former director of advanced memory solutions at Samsung’s Israel Research Center, co-founded Pliops in 2017 alongside Moshe Twitto and Aryeh Mergi. Twitto was a research scientist at Samsung developing signal processing technologies for flash memory, while Mergi co-launched a number of startups — including two that were acquired by EMC and SanDisk — prior to joining Pliops.

Pliop’s processor delivers drive fail protection for solid-state drives (SSD) as well as in-line compression, a technology that shrinks the size of data by finding identical data sequences and then saving only the first sequence. Beitler claims the company’s technology can reduce drive space while expanding capacity, mapping “variable-sized” compressed objects within storage to reduce wasted space.

A core component of Pliops’ processor is its hardware-accelerated key-value storage engine. In key-value databases — databases where data is stored in a “key-value” format and optimized for reading and writing — key-value engines manage all the persistent data directly. Beitler makes the case that CPUs are typically over-utilized when running these engines, resulting in apps not taking full advantage of SSD’s capabilities.

“Organizations are looking for solutions that free CPUs from computationally-intensive storage tasks. Our hardware helps create a modern data center architecture by leveraging a new generation of hardware-accelerated data processing and storage management technology — one that delivers orders of magnitude improvement in performance, reliability and scalability,” Beitler said. “In short, Pliops enables getting more out of existing infrastructure investments.”

Pliops’ processor became commercially available last July. The development team’s current focus is accelerating the ingest of data for machine learning use cases, Beitler says — use cases that have grown among Pliops’ current and potential customers.

The road ahead

Certainly, Pliops has its work cut out for it. Nvidia is a formidable competitor in the data processing accelerator space, having spent years developing its BlueField lineup. And AMD acquired DPU vendor Pensando for $1.9 billion, signaling its wider ambitions.

A move that could pay dividends for Pliops is joining the Open Programmable Infrastructure Project (OPI), a relatively new venture under the Linux Foundation that aims to create standards around data accelerator hardware. While Pliops isn’t a member yet — current members include Intel, Nvidia, Marvell, F5, Red Hat, Dell and Keysight Technologies — it stands to reason that becoming one could expose its technology to a larger customer base.

Beitler demurred when asked about OPI, but pointed out that the market for data acceleration is still nascent and growing.

“We continue to see both infrastructure and application teams being overwhelmed with underperforming storage and overwhelmed applications that aren’t meeting company’s data demands,” Beitler said. “The overall feedback is that our processor is a game-changing product and without it companies are required to make years of investments in software and hardware engineering to solve the same problem.”

Posted on

TechCrunch+ roundup: Usage-based billing, web3 fundraising, Serena Williams’ next act

Netflix lost almost a million subscribers in the last quarter, and the streaming giant expects to shed hundreds of thousands more this year.

Does that mean consumers are suffering from “subscription fatigue?”

Or are there just more options to choose from as studios set up new platforms (and withdraw their content from the big red N)?

Full TechCrunch+ articles are only available to members.
Use discount code TCPLUSROUNDUP to save 20% off a one- or two-year subscription.

“Subscriptions are not dying; they are just evolving,” says Chargebee CMO Sanjay Manchanda, who notes that more than half of all SaaS companies plan to roll out usage-based billing by next year.

To help founders capitalize on this trend, he identified some of the ways companies are evolving as they strive to copy the success of firms like Twilio, Snowflake and Frog.

“Subscriptions are not going anywhere,” says Manchanda. “They have been around since at least the 17th century for a good reason — people like them.”

Thanks very much for reading,

Walter Thompson
Editorial Manager, TechCrunch+
@yourprotagonist

The subscription pie is getting bigger: How to leverage usage-based billing

How to take the BS out of your TAM

On Wednesday, October 19, I’m moderating “How to take the BS out of your TAM,” a panel at TechCrunch Disrupt in San Francisco.

Calculating a company’s prospective market share is notoriously difficult for inexperienced entrepreneurs, and getting it wrong is a red flag for investors. To help founders overcome this hurdle, I’ll talk to three VCso learn more about how to measure TAM in an era when tailwinds are turning into headwinds:

  • Kara Nortman, managing partner, Upfront Ventures
  • Aydin Senkut, founder and managing partner, Felicis Ventures
  • Deena Shakir, partner Lux Capital

Felicis, Lux Capital and Upfront Ventures tackle TAM at Disrupt

Some frank advice for open source startups seeking product-market fit

Open source startups must seek product-market fit like other companies, but their path to market is slightly different: They must attract a critical mass of users, but they’ll also need to foster a community of developers who’ll support their product.

“In this regard, the go-to-market journey for an open source company is often less about acquiring new customers and more about conversion sales — upselling add-on paid features to existing free users,” says Arnav Sahu, an investor at Y Combinator Continuity.

“The playbook to build in the early days is identifying who is a good customer and who may not be.”

Some frank advice for open source startups seeking product-market fit

How should web3 companies approach fundraising during a downturn?

A classic snowman built and photographed at Cuddyback dry lake bed in the Mojave desert California, USA. Photographed with a Canon 1DS Mark II.

Image Credits: Stephen Swintek (opens in a new window) / Getty Images

Most web3 startups are in the same leaky boat: They haven’t reached product-market fit, hiring technical talent is difficult at best, and many of the investors who were eager to take their calls a year ago are ghosting them today.

Thirsty travelers who know where to look can still find water, however, according to Jenny Q. Ta, CEO of GalaxE.io.

In a TechCrunch+ guest post, she offers suggestions for approaching angels, accelerators and traditional VCs, along with some thoughts that may help web3 entrepreneurs level-set.

“Don’t let anxiety call the shots. This too shall pass, but don’t waste the moment.”

How should web3 companies approach fundraising during a downturn?

VCs set sights on African countries beyond the ‘Big Four’

Arrows on the African landscape pointing up and down

Image Credits: Bryce Durbin

Taken together, Kenya, South Africa, Egypt and Nigeria absorb more than 70% of all African venture capital. Known as the “Big Four,” these nations collectively raised around $5 billion last year.

However, in recent months, Nairobi-based TechCrunch reporter Annie Njanja found that investors are increasingly hunting for deals elsewhere.

“Outside the Big Four, investments ballooned to $1.4 billion, up 382% year on year.”

VCs set sights on African countries beyond the ‘Big Four’

Serena Williams’ next act in venture capital is essential in this moment

US player Serena Williams celebrates after beating Czech Republic's Barbora Strycova during their women's singles semi-final match on day ten of the 2019 Wimbledon Championships at The All England Lawn Tennis Club in Wimbledon, southwest London, on July 11, 2019. (Photo by Adam DAVY / POOL / AFP) / RESTRICTED TO EDITORIAL USE (Photo credit should read ADAM DAVY/AFP via Getty Images)

Image Credits: ADAM DAVY / Contributor / Getty Images

Since founding Serena Ventures in 2014, tennis champion Serena Williams has invested in companies like Impossible Foods, Daily Harvest, Billie and MasterClass.

All told, she’s invested in nearly 80 companies, including 16 unicorns, reports Dominic-Madori Davis. And in just a few weeks, she’ll retire from tennis.

“She knows her balancing act and has mastered the art of what it takes to win and lose — essential skills for running an early stage venture fund.”

Serena Williams’ next act in venture capital is essential in this moment

Posted on

Vividly wants to put some sparkle in your next CPG trade promotion campaign

Supply chain shortages and high gasoline prices have forced consumer packaged goods companies to manage trade more effectively over the past year to compete with other brands. Add in a worker shortage, and some brands are finding third parties they relied on are “dropping the ball when it comes to promotion execution,” Alexander Whatley, CEO of Vividly, told TechCrunch.

“We are seeing brands negotiate 20% off a promotion, but it might not run, yet they are still getting charged,” Whatley added.

Given that CPG companies spend over 20% of their revenue on trade promotion management, this is where Vividly comes in. Formerly known as Cresicor, the company provides trade promotion management tools for the $20 million global consumer packaged goods industry, which is forecasted to be valued at $25 million in 2028. The tools manage trade spend from the creation of campaigns to promotion planning, forecasting and deductions management.

Whatley estimates that customers have seen a 90% reduction in time required to complete business processes and a greater than 20% improvement in planning accuracy.

We profiled the company last year, back when it was still Cresicor, and when it raised $5.6 million in seed funding. At the time, it had grown revenue by 2.5x and employee headcount by 4x, to 20.

Cresicor was a company name Whatley had come up with back in 2017 when he founded the company with his brother Daniel, Stuart Kennedy and Nikki McNeil. At the time, he admitted it “was cool,” but as they got more into the trade promotion business, realized it didn’t fit.

Vividly trade promotion trade planning

Vividly’s trade planning feature. Image Credits: Vividly

“It kind of sounded like a drug name, too, so we always knew we wanted to rebrand,” Whatley said. “We help brands process messy data from retailers, feeds and spreadsheets into a clear format and data-driven downstream analyses. Essentially helping brands that often operate opaque processes and shine a light ‘vividly’ on those problems.”

Today, Vividly has since grown revenue by over 4x and grew its customer base by 3x, which includes CPG brands like Liquid Death, Bulletproof and Quinn’s. In addition, employees grew to 60.

In addition, it announced $18 million in Series A dollars, co-led by 645 Ventures and Vertex Ventures US, with participation from existing investors Costanoa Partners and Torch Capital as well as Green Spoon Sales. The new investment, which closed in May, gives the company $23 million in total funding since it was founded.

As part of the investment, 645 Ventures Managing Partner Nnamdi Okike will join Vividly’s board.

Meanwhile, the company will use the new funding to accelerate product development to cater to larger CPG customers and scale its go-to-market team.

Up next, Vividly is eyeing a Series B round as it works on building out optimization and modules within its platform.

Trade promotion management startup Cresicor raises $5.6M to keep tabs on customer spend

The grocery industry’s shopping list: Inventory management, frictionless checkout, computer vision

Posted on

Explo garners $12M Series A as BI dashboard service gains traction

The last time we spoke to Explo, the early stage startup was announcing its $2.3 million seed round. That was back in November, 2020, a very different time, and a lot has happened since then for the Y Combinator Winter 20 alum.

In spite of launching a company at the height of the pandemic, Explo finished building the product and found its first customers. That product is a tool for building customized business intelligence dashboards with a look and feel of your own company, which you can embed in your website or email to customers.

As Explo co-founder and CEO Gary Lin told us at the time of the seed funding:

“In terms of the UI and the output, we had to build out the ability for our end users to create dashboards, for them to embed the dashboards and for them to customize the styles on these dashboards, so that it looks and feels as though it was part of their own product,” Lin told TechCrunch in November 2020.

Lin says one of the things they’ve learned along the way is that Explo is a sticky product and that helped secure the latest $12 million Series A when the company went looking for funding at the beginning of this year. “Since we last chatted, we were heads down building the product, selling the product and around January of this year, we realized that we were actually getting some quite good traction and we thought it might be time to raise a Series A,” he said.

Lin says the venture market was starting to cool when they went looking for funding, but they got a good offer and feel very fortunate about that. “We didn’t actually see the same kind of impacts that founders today see. But it definitely wasn’t as hot of an environment as it was in December of the previous year. So I would say that we got very lucky in terms of timing, and we feel very fortunate about that,” he said. They secured the round in March of this year.

Today, the company is also announcing the official launch of their self-service product with a two-week trial period. The startup currently has 45 paying customers on the books with many others in the process of trying the product, he said. “For the free trials, what happens is that the companies will connect their databases or data warehouses to have the information that they want to be able to analyze. And so Explo will connect directly to these databases, whether it’s Postgres or data warehouses like Snowflake, and then give all of our customers a myriad of ways to kind of share data.”

Explo dashboard

Image Credits: Explo

And in terms of the impact of the current economic situation, so far at least Explo hasn’t seen a slowdown. “The type of product and type of role that Explo fulfills for customers, is what we’re defining as a necessity, but not a core competency. And so as people are actually trying to make sure that their workforce…is focusing on what’s core to their business, they’re actually even more willing to outsource dashboarding and analytics to a tool like Explo. And so we’ve actually seen sales, not really go down but stay strong as we’ve seen before,” he said.

With 15 employees today, Lin says the plan is to double in the next year, but he will let performance be the guide for that, rather than some hard goal. He says the company is working with a recruiter to keep building a diverse team, and he says the key is finding candidates early in the process.

“We’re really proud of the team that we’ve built. And the team has remained extremely diverse, which we’re excited about. One of the biggest things that we’ve learned over time is that what actually helps the most when it comes to hiring for diverse candidates is the top of the funnel,” he said. That means using a variety of external sources from the beginning of the process to surface a slate of diverse candidates for each open rec.

Today’s $12 million Series A was led by Craft Ventures with participation from Felicis Ventures, Amplo VC and various industry angels.

Rill wants to rethink BI dashboards with embedded database and instant UX

Posted on

Omni looks to take on Looker with its cloud-powered BI platform

There’s been an explosion of business intelligence (BI) tools in recent years, or tools that analyze and convert raw data into info for use in decision making. Investments in them are on the rise, but companies are still struggling to become “data-driven” — at least, according to some survey results. NewVantage Partners’ 2022 poll of chief data and analytics officers found that less than half (47.4%) believed that they’re competing on data and analytics. They cited company culture and the overwhelming growth of data as the top blockers, as well as concerns over data ownership and privacy.

Colin Zima believes that there’s another major challenge businesses adopting BI tools have to overcome: poor usability. He’s the co-founder and CEO of Omni, a BI platform that aims to simplify working with data across an organization. As such, Zima might not be incredibly impartial. But on the other hand, he’s a longtime participant in the data analytics community, having worked at Google on the Search quality team and at Looker as the chief analytics officer and VP of product.  

“In an era where every employee is expected to be a data user, getting the basics done is still way too hard: Looking up data across many different systems or waiting on the data team to pull data or being forced to learn structured query language (SQL) to answer questions,” Zima said. “The reality is business users need great, simple tools to do their jobs better and data teams need powerful tools to manage that process and do high-value work that complements core reporting.”

Zima co-launched Omni in early 2022 alongside Jamie Davidson and Chris Merrick, who spent several years at Looker and Stitch, respectively, before joining the startup. The three co-founders were spurred by a mutual desire to build a product that made it easier for data teams to perform “high-value” work that complemented core business reporting processes, Zima said. 

“There are … some painful trade-offs folks make when they use a centralized platform — it feels so heavy to make changes, so folks were complementing with analyst tools or other point solutions and this fragmentation has only accelerated. This creates trade-offs — and really, tension — between data people and business teams, or folks that want to move quickly and your board reporting,” Zima said. “While legacy BI platforms unified teams around reliable, centralized data, it still meant a heavy upfront data modeling process. With Omni, we’re filling the gap between instant-gratification analytics and the reliability and governance of mature enterprise BI.”

Investors believe in Omni’s vision, having pledged $26.9 million toward the startup, including a seed round joined by Box Group, Quiet and Scribble and a $17.5 million Series A led by Redpoint with participation from First Round and GV. Omni’s post-money valuation stands close to $100 million, according to a source familiar with the matter. As for the proceeds, Zima said they’ll be put toward go-to-market efforts; he claims that Omni still hasn’t spent the seed. 

Omni is comparable to existing BI tools like the aforementioned Looker and Tableau, Zima says. But the platform can also take raw SQL — the language used to communicate with databases — and break it into modeled components. Omni’s built-in tools generate data models and components from SQL, creating a “sandbox” data model and allowing users to promote metrics to the official, shared model that the whole organization can use. Beyond this, Omni runs “automated aggregates” in-database to accelerate queries and manage costs for users (and their employers).

“The compromise most companies are forced to make with monolithic, centralized BI tools is that they hamstring employees and teams to work outside the core paths. That leaves the choice of either not using data or folding in shadow IT like Excel or isolated analytical tools to complete a workflow,” Zima said. To his point, research suggests that roughly half of organizations struggle to use and access quality data. “By bridging this gap between IT and business units, Omni is building a system that gives IT more control by promoting manageable decentralization versus just spinning up isolated tools to solve problems. Ultimately, this means all that business logic and data control can be retained and observed by IT and data teams, and thoughtfully integrated into core systems versus left on islands.

Launching a company during a downturn isn’t easy, although Zima says that Omni was insulated in many ways because of its founders’ longstanding relationships with Omni’s investors. Regardless of the macroeconomy, the core focuses this year will be hiring and customer acquisition, Zima says — Omni only worked with five development partners prior to today, which marks the platform’s public launch. Omni has about 16 employees currently and plans to expand that number by 25% by 2023.

The trick will be maintaining growth in the face of competition like Y42, Metabase and MachEye, the last of which raised $4.6 million in seed funding two years ago. More formidable is Pyramid Analytics, a business intelligence and analytics firm that landed $120 million last May. There’s also Noogata, Fractal Analytics, Tredence, LatentView and Mu Sigma.

For Zima’s part, he expects the down market to work in Omni’s favor at the expense of rivals as companies seek to consolidate their tools and “streamline their data stacks.”

“[Omni] is the only BI platform that combines the consistency of a shared data model with the freedom of SQL … [and] enables this virtuous feedback loop between one-off speed work and the governed model,” Zima said. “A core part of our thesis is that the central challenge that remains in business intelligence is tackling and uniting the entire surface area, which is mostly made up of point solutions … The emergence of the cloud data era [opens] up new, more ambitious possibilities like proactively optimizing performance.”

Posted on

Sync Computing rakes in $15.5M to automatically optimize cloud resources

After a pandemic-driven cloud adoption boom in the enterprise, costs are finally coming under a microscope. More than a third of businesses report having cloud budget overruns of up to 40%, according to a recent poll by observability software vendor Pepperdata. A separate survey from Flexera found that optimizing the existing use of cloud services is a top initiative at 59% of companies — cost being the main motivation. 

An entire cottage industry of startups has sprung up around optimizing cloud compute. But one in the race, Sync Computing, claims to uniquely tie business objectives like cost and runtime reduction directly to low-level infrastructure configurations. Founded as a spinout from MIT’s Lincoln Laboratory, Sync today landed $12 million in a venture funding round (plus $3.5 million in debt) led by Costanoa Ventures, with participation from The Engine, Moore Strategic Ventures and National Grid Partners.

Sync co-founders Jeff Chou and Suraj Bramhavar both worked as members of the technical staff at the MIT Lincoln Laboratory prior to launching the startup. Bramhavar came to MIT by way of a photonics research position at Intel, while Chou co-founded another startup — Anoka Microsystems — designing a low-cost optical switch.

Sync was born out of innovations developed at the Lincoln Lab, including a method to accelerate a mathematical optimization problem commonly found in logistics applications. While many cloud cost solutions either provide recommendations for high-level optimization or support workflows that tune workloads, Sync goes deeper, Chou and Bramhavar say, with app-specific details and suggestions based on algorithms designed to “order” the appropriate resources.

“[We realized that our methods] can dramatically improve resource utilization of all large-scale computing systems,” Chou told TechCrunch in an email interview. “As Moore’s Law slows down, this will become a key technological choke point.”

Chou claims that Sync doesn’t require much in the way of historical data to begin optimizing data pipelines and provisioning low-level cloud resources. For example, he says, with just the data from a single previous run, some customers have accelerated their Apache Spark jobs by up to 80% — Apache Spark being the popular analytics source engine for data processing.

Sync recently released an API and “autotuner” for Spark on AWS EMR, Amazon’s cloud big data platform, and Databricks on AWS. Self-service support for Databricks on Azure is in the works.

“The launch of our public API will allow users to programmatically apply the Sync autotuner to a large number of jobs and enable continuous monitoring of [cloud environments] with custom integration,” Chou said. “The C-suite cares about managing cloud computing costs, and our Sync autotuner does this while also accelerating the output of data science and data analytics teams … The product also allows data engineers to quickly change infrastructure settings to achieve business goals. For example, one day, teams may need to minimize costs and de-prioritize runtime, but the next day, they may have a hard deadline, therefore needing to accelerate runtime. With Sync, this can be done with a single click.”

Sync first applied its technology inside MIT’s Supercomputing Center before working with larger government high-performance compute centers, including the Department of Defense — with which it has a $1 million contract. Now, Sync says it has roughly 300 registered users on its self-service app and “several dozen” design partners testing and providing feedback, including Duolingo and engineers at Disney’s Streaming Services group. 

As cloud costs rise, startups making spend-optimizing tech see sunny days ahead

“The pandemic and recent economic climate have been a boon for Sync, as controlling cloud costs through improved efficiency is now top of mind for many cloud software-as-a-service-native companies. Many companies are on hiring freezes and need an ‘easy button’ to drop cloud costs without adding burden or overhead to teams already at over capacity,” Chou said. “With the recent economic downturn, the demand for Sync’s unique approach has accelerated dramatically, already getting adopted by major enterprise customers. Our main challenge is for developers and CTOs to see how what we’ve built is different and also realize both can dramatically benefit by using it.”

Chou says the funding from the latest round, which bring’s Boston-based Sync’s total capital raised to $21.6 million, will be put toward customer acquisition, marketing and sales, product development, and R&D, including adding integrations with existing engineering workflows. Sync currently has 14 employees, a number that Chou expects will grow to 25 by the end of the year.

Posted on

Upskilling platform GrowthSpace secures $25M to grow its global business

As the jobs market remains tight (mass layoffs and hiring freezes in tech aside), companies are laser-focused on retaining staff. One of the areas they’re investing in is upskilling, which aims to teach employees new skills in departments with which they’re unfamiliar. For example, Walmart announced in 2021 that it would invest nearly $1 billion over the next five years to provide its employees with access to higher education and training.

Unsurprisingly, “skilling” platforms have benefited enormously from these investments. According to Crunchbase, upskilling and reskilling startups raised $2.1 billion from VCs between early 2021 and 2022. One of the winners is GrowthSpace, founded by Omer Glass, which leverages algorithms to match individual employees and groups of employees with experts for development sprints. The company today announced that it raised $25 million in Series B financing led by Zeev Ventures, with participation from M12 (Microsoft’s venture fund) and Vertex Ventures, bringing GrowthSpace’s total raised to $44 million.

GrowthSpace was founded in 2018 by Dan Terner, Izhak Kedar and Glass. A former management consultant, Glass was approached several years ago by Terner, who was then the COO of Signals Analytics, a company with a significant churn problem.

“Terner realized that there was no effective, outcome-driven employee development platform to enable companies [including his] to better invest in their employees,” Glass said. “This led to the creation of GrowthSpace … During the pandemic and amid current economic uncertainty, companies have realized that they needed to double down on talent development.”

GrowthSpace combines a software-as-a-service platform with a marketplace of experts — providers of mentoring, coaching, training and workshops. Drawing on a taxonomy of professional backgrounds and skills, which includes tags across expertise areas, industries and roles, the platform’s AI model attempts to predict the right programs and coach-student matches with the highest probability of achieving desired development outcomes.

GrowthSpace

Image Credits: GrowthSpace

Of course, AI doesn’t always get it right. Biased datasets can lead to unreliable predictions, and — as the case may be — coach-student matches. Upskilling already suffers from a human bias issue, with research from PwC showing that companies focus too much on upskilling postgraduate degree holders at the expense of almost all others. Workers are often passed over for training on the basis of their ethnicities and genders, PwC also found, with women twice as likely to report gender discrimination as men.

When asked, Glass didn’t provide a detailed account of GrowthSpace’s debiasing efforts. But he said that the AI system tries to mitigate bias by presenting a “mirror data image” of each user that excludes personal characteristics like race, gender and age.

“GrowthSpace has developed a unique algorithm that eliminates 90% of users’ personal data from its platform within three weeks of user onboarding, once the data is no longer in frequent use,” Glass said. “[This enables] it to reduce to a minimum its exposure to user personal data.”

The GrowthSpace platform can be implemented modularly to address the requirements of larger corporations or set up as a comprehensive solution, Glass says, allowing executives to allocate resources between different types of programs. All of the startup’s services are mapped to business KPIs to provide management with reports by which to measure the impact of upskilling programs on business performance.

“The industry needs to evolve significantly to meet company growth and professional development demands in the next decade,” Glass said. “The Great Recession accentuated the importance of measuring growth more accurately, offering more scalable and consistent means for employees to upskill and reskill at a much faster pace. Learning and development also needs to be more agile and accountable.”

GrowthSpace competes with platforms like GOMYCODE, Worker.ai and Scaler, the last of which topped a $700 million valuation in January. But Glass claims that GrowthSpace has seen substantial growth over the past year, now reaching 3,000 active users across 200 paying customers, including a U.S. government agency, Microsoft, Siemens, EY and Johnson & Johnson.

In fact, Glass says that he wasn’t actively looking to raise capital.

“Once investors became aware of the recent growth … they approached [me] to invest,” he said. “GrowthSpace will use these funds to expand globally to meet rapidly growing demand and to continue to expand its competitive edge through tech innovation.”

The startup — which has $44 million in the bank — also plans to expand its 70-person, New York City-based team, with the goal of reaching 100 employees by the end of the year.

Posted on

YC-backed Arc, a digital bank for ‘high-growth’ SaaS startups, lands $20M Series A

Arc, a company that aims to give SaaS startups “a way to borrow, save and spend” in one place, has raised $20 million in a Series A round of funding.

The raise comes seven months after Arc emerged from stealth with $150 million in debt financing and $11 million in seed funding. The startup graduated from Y Combinator in March.

While it’s early days still, Arc says it has seen strong early interest in its offering, which offers both debt funding and digital banking services to SaaS startups. The company says that on average, its revenue has grown by 250% every month since the fourth quarter of 2021. It is partnered with Stripe, one of the world’s largest and most valuable private fintechs.

When TechCrunch first covered Arc in mid-January, the company noted that since it had launched its introductory product — Arc Advance — last summer, more than 100 startups had signed up for the Arc platform. That offering gives founders a way “to convert future revenue into upfront capital.” Fast forward to today and co-founder and CEO Don Muir told TechCrunch that Arc is deploying “tens of millions of dollars in volume” and now has more than 1,000 companies on its platform.

Further, he said that Arc has a backlog of over $3 billion of demand for its Arc Advance funding product from companies already signed up on its platform. Over the next 12 months, Muir projects that Arc will activate over $500 million of funding and deposits for its customers.

Muir, Nick Lombardo (president) and Raven Jiang (CTO) founded Arc in January of 2021 and incorporated the company in April of that year. 

Left Lane led Arc’s Series A financing, which also included participation from NFX, Y Combinator, Bain Capital Ventures, Clocktower Technology Ventures, Torch Capital and Atalaya, as well as founders from Wayflyer, Plaid, Column, Chargebee, Vouch and Jeeves, among others.

“All of our existing investors with pro rata rights came into the round again, which we view as a point of validation,” Muir said.

There have been a flurry of startups emerging to offer financing alternatives outside of venture capital, especially to SaaS startups. Those companies are appealing to lend to because of their predictable recurring revenue.

Other players in the space include Founderpath, Pipe and Capchase, among others.

Muir said Arc is not deterred by the competition, viewing it as “a good thing.”

“The reality is that the market is currently dominated by the legacy offline banks who have entrenched relationships in the startup ecosystem,” he told TechCrunch. “Collectively, the fintech players still represent a low single-digit percentage of the annual deposit and funding volume in the market.”

The startup’s biggest differentiator, in Muir’s view, is that it goes beyond offering upfront revenue to also offer banking services.

“Arc is the first digital business bank that is purpose-built for high-growth startups,” he said. “So for the first time ever, startups can convert their future revenue into upfront capital, deposit those funds into a digital bank account with all the bells and whistles of a traditional bank account and leverage our insights and analytics to spend that capital, more efficiently, which is revolutionary for the startup ecosystem.”

In June, Arc announced the launch of its Arc Treasury offering, which it describes as a “digitally native and vertically integrated deposit account that enables startups to access all of the banking services they need including checking, card issuance, and FDIC insurance eligibility.” The product was built in partnership with Stripe.

Arc works with both bootstrapped and VC-backed “high-growth, premium” software startups — the majority of which are B2B. The evolving macro environment has led to a “meaningful increase in demand,” according to Muir.

“You’re seeing software valuations being cut in half in the public markets and that’s starting to trickle down, all the way down to Series A and even seed-stage valuations,” he told TechCrunch. “So equity becomes meaningfully more expensive, it makes alternative sources of financing that much more attractive.” 

While the San Francisco-based company declined to reveal its valuation, Muir said it was “a meaningful step up.” Meanwhile, Arc has doubled the size of its team to 30 since January.

Not to jinx it, but SaaS valuations appear to be staging a recovery

Dan Ahrens, partner and founder of Left Lane Capital, said he was drawn to the market opportunity when deciding to lead Arc’s round as a new investor. 

“Given the way that equity markets have fundamentally shifted and meaningfully shifted over the last six months or so, we feel like availability for capital for founders is going to be a bigger issue now and more prominent issue in their minds now than it has been for several years prior to this when equity markets were a bit more forgiving,” Ahrens told TechCrunch in an interview.

“And then having a really broad vision for the future product roadmap of a much more holistic banking solution, where you tie in Treasury, you tie in the FDIC insured bank account and you have a much more complete solution that’s ultimately solving a lot of needs for the end customer,” he added.

My weekly fintech newsletter, The Interchange, launched on May 1! Sign up here to get it in your inbox.

Arc wants to build the de facto finance solution for SaaS startups