TechCrunch+ roundup: Construction tech survey, founder-CEO friction, diversify your cap table

The technological advances we’ve made over the last few thousand years are stunning, but the construction industry still relies on centuries-old technology.

Configuring a robot to mix cement is easy, but delivering a CementTron 3000 to a job site, training employees on its use, and keeping it maintained are not the kinds of disruptions builders are looking for, especially when margins are so thin and experienced workers are hard to find.

Even so, investors are backing startups bringing robotics, data management, automation and augmented reality into the construction process.

Many major construction firms operate their own R&D divisions, but that hasn’t substantially changed attitudes about adopting new tech: in one survey, more than one-third of respondents who worked in the industry said they are ambivalent about using new tools. Despite their reluctance, growing numbers of construction tech startups are helping builders with bidding, scheduling, modeling software, and, quite frequently, drones.

To learn more about the market forces shaping construction tech in 2022, we spoke to five investors:

  • Nikitas Koutoupes, managing director, Insight Partners
  • Heinrich Gröller, partner, Speedinvest
  • Momei Qu, managing director, PSP Growth
  • Suzanne Fletcher, venture partner, Prime Movers Lab
  • Sungjoon Cho, general partner, D20 Capital

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TechCrunch columnist Sophie Alcorn will join a TechCrunch+ Twitter Space on Tuesday, May 24.

Image Credits: Bryce Durbin/Sophie Alcorn

On Tuesday, May 24 at 8:30 a.m. PT/11:30 a.m. ET, I’m hosting a Twitter Space with Silicon Valley immigration lawyer Sophie Alcorn, who writes the “Dear Sophie” advice column for TechCrunch+ each Wednesday. If you have questions about working and living legally in the United States, please join the conversation.

To get a reminder before the chat, follow @TechCrunchplus on Twitter.

Thanks very much for reading: I hope you have a relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

For better or for worse: Managing founder-CEO tension inside a startup

Hands pulling rubber band

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

Technical founders often recruit a CEO who can fill in gaps in their business experience, but if they cannot build a strong partnership, everyone suffers.

Metaphorically, imagine two people in a lifeboat arguing over which direction leads to land.

Managing potential points of tension is critical, but founders must be pragmatic: Only choose someone you respect, and be prepared to invest time and energy into cultivating a close relationship, advises Max Schireson, an executive-in-residence at Battery Ventures. Previously, the co-founders of MongoDB hired him to be their CEO.

“In the best case, a strong partnership can pioneer new models and build a lasting and impactful company,” says Schireson.

Dear Sophie: Can I do anything to speed up the EAD renewal process?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I’m on an L-2 visa as a dependent spouse to my husband’s L-1A.

My EAD (work permit) is expiring in May — we filed for the extension of both my visa and EAD a few months ago. How long is the current process?

Might there be anything I can do so my employment isn’t affected?

— Career Centered

The one-chart argument that tech valuations have fallen too far

As you may have heard, tech companies are having a bit of a whoopsie.

But is it possible that stock sellers have gone overboard when it comes to devaluing these startups so deeply and so quickly?

Alex Wilhelm says they have, in large part because “select tech concerns are now worth less than they were before the pandemic, despite having a few years of growth in the bank.”

To make his case, he tracked the share price for Okta and found that the identity platform’s share price has rolled back to where it was in early 2019.

“It’s also about three times as large,” writes Alex. “But it is now worth less today than it was back then. Chew on that.”

3 things to remember when diversifying your startup’s cap table

High Angle View Of Multi Colored Toys Over White Background

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

Just as a sales team builds and refines its funnel, early-stage founders in fundraising mode can create an investor funnel that will help sustain their company for years to come.

Oriana Papin-Zoghbi, CEO and co-founder of women’s health startup AOA Dx, shared her investor breakdown with TC+:

  • 35% private investors.
  • 34% women (female investors or female-headed funds).
  • 26% venture capitalists.
  • 23% family and friends.
  • 18% international investors.
  • 15% angel groups.

“When building an investor funnel, vocalizing what you want is crucial to finding the right investors,” says Papin-Zoghbi.

“Finding the right investors is like finding the right team members — you need to be upfront about your expectations and address what you want them to bring to the table.”

Pitch Deck Teardown: BoxedUp’s $2.3M seed round pitch deck

When video production equipment rental company BoxedUp launched, it initially focused on serving corporate customers who hosted events and conferences.

And then, it pivoted: Earlier this year, BoxedUp raised a $2.3 million seed round to scale up its rental marketplace where individuals can rent high-end equipment directly to creators.

“We found a $10 billion opportunity where owner-operators are renting things out via Instagram and rental shops are still using really old websites,” said CEO and founder Donald Boone.

“Instead of spending $30,000 to buy a camera to rent out one at a time, we could instead create the platform to connect people that have that $30,000 camera,” he told TechCrunch in March.

To help other founders replicate his success with BoxedUp’s seed round, he’s shared the unreacted 22-slide pitch deck with TechCrunch+.

Carbon capture is headed for the high seas

Unless you live near a port, you probably don’t think much of the tens of thousands of container ships tearing through the seas, hauling some 1.8 billion metric tons of stuff each year. Yet these vessels run on some of the dirtiest fuel there is, spewing more greenhouse gases than airplanes do in the process. The industry is exploring alternative fuels, and electrification, to solve the problem for next-generation ships, but in the meantime a Y Combinator-backed startup is gearing up to (hopefully) help decarbonize the big boats that’re already in the water.

London-based Seabound is currently prototyping carbon capture equipment that connects to ships’ smokestacks, using a “lime-based approach” to cut carbon emissions by as much as 95%, cofounder and CEO Alisha Fredriksson said in a call with TechCrunch. The startup’s tech works by routing the exhaust into a container that’s filled with porous, calcium oxide pebbles, which in turn “bind to carbon dioxide to form calcium carbonate,”—essentially, limestone, per Fredriksson.

Though carbon capture has yet to really catch on for ships, Seabound is just one of the companies out to prove the tech can eventually scale. Others, including Japanese shipping firm K Line and Netherlands-based Value Maritime, are developing their own carbon-capture tech for ships, typically utilizing the better-established, solvent-based approach (which is increasingly used in factories). Yet this comparably tried-and-true method demands more space and energy aboard ships, because the process of isolating the CO2 happens on the vessel, according to Fredriksson.

In contrast, Seabound intends to process the CO2 on land, if at all. When the ships return from their journey, the limestone can be sold as is or separated via heat. In the latter case, the calcium oxide would be reused and the carbon sold for use or sequestration, per Fredriksson, who previously helped build maritime fuel startup Liquid Wind. Her cofounder, CTO Roujia Wen, previously worked on AI products at Amazon.

Seabound says it has signed six letters of intent with “major shipowners,” and it aims to trial the tech aboard ships beginning next year. To get there, the company has secured $4.4 million in a seed round led by Chris Sacca’s Lowercarbon Capital. Several other firms also chipped in on the deal, including Eastern Pacific Shipping, Emles Venture Partners, Hawktail, Rebel Fund and Soma Capital.

Beyond carbon capture, another Y Combinator-backed startup is setting out to decarbonize existing ships via a novel battery-swapping scheme. New Orleans-based Fleetzero aims to power electrified ships using shipping container-sized battery packs, which could be recharged through a network of charging stations at small ports.

Galley Solutions turns kitchen chaos into recipe for streamlined operations

Galley Solutions, a food data company providing food operators with technology to make more profitable decisions around their culinary operations, raised $14.2 million in Series A funding.

Ian Christopher, COO, started the company with his brother-in-law, Benji Koltai, CEO, in 2017. The food enterprise resource planning tool came out of Koltai’s previous work at Sprig, a delivery-only restaurant started by CEO Gagan Biyani and former Google executive chef Nate Keller.

Christopher explained that in the early days, there was not a system of record, so much of the work was done in a low-tech environment — spreadsheets or pen and pencil. Koltai, who has food sensitivities, kept getting mislabeled meals and having health reactions.

“He went to the culinary team and just said, like, ‘Why are we getting this wrong?’” Christopher told TechCrunch. “We have this source of truth for our recipes, so why isn’t this propagating every other corner of this operation, including the labeling and the allergen information. That was when a sous chef kindly walked him through the chaos that was their kitchen operations.”

Koltai, working with Keller, took a recipe-centric approach and coded the first version of Galley, which provides clean recipe data, predictive purchasing, smart inventory and accurate food production planning. Keller is now working with Galley as a part of its customer success program.

Galley Solutions

Galley Solutions website example. Image Credits: Galley Solutions

The company’s technology is a kitchen productivity tool that focuses on core recipe data, and the purchasing and inventory aspects stem from that. For example, the carrots for a carrot soup are mapped to real-time vendor items so the kitchen can make better purchasing decisions and more accurate recipe margins.

Galley works with companies like DoorDash, Aramark and Chowbotics. The company grew its subscription revenue by 280% from last year and saw a 146% net dollar retention in the first quarter of 2022, Christopher said.

It was also at the point in its growth where it was reaching profitability and was close to cash-flow positive when leadership decided to take advantage of its position to aggressively scale.

That’s where the Series A comes in. The investment was led by Astanor Ventures and includes participation from existing investor Zetta Venture Partners. This gives the company $20 million in total funding to date. Galley is the latest startup, bringing technology into the kitchen, to receive funding. Earlier this year, we also saw Meez raise $6.5 million for its recipe software.

Meanwhile, the new funding enables the company to scale and move into secondary marketplaces to connect supply and demand with a focus on automating the purchasing decision and purchasing activity.

“We were able to get to millions of dollars in revenue with two salespeople in our organization, so we have to scale our sales team,” Christopher said. The new funding will also go toward product and engineering.

Up next, the company is focusing on sustainability as part of its partnership with Astanor, including sustainability impacts and initiatives around food waste.

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Belong secures $80M to take the pain out of rental property management

Historically, the relationship between landlords and tenants can be a contentious one.

At the same time, the experiences of managing a property, and renting one, are not always smooth.

Belong, a startup that aims to address both these issues while giving renters a way to save toward home ownership, has just raised $50 million in equity and secured $30 million in debt to expand its offerings and markets it serves. Fifth Wall led the equity financing with returning backers Battery Ventures, Andreessen Horowitz (a16z) and GGV Capital. The round was preempted by Fifth Wall, noted Belong co-founder and president Owen Savir.

Founded in 2019 by Argentine-born Ale Resnik, Savir and Tyler Infelise, Belong is a three-sided marketplace that provides services for both homeowners that are landlords and renters.

From the homeowner perspective, Belong offers home management services that it says makes owning a rental home easier. For example, if a rental property needs a repair, the startup has an in-house maintenance team that can handle those on a landlord’s behalf. It also provides the homeowners with financial tools to manage their investment, as well as guaranteed rent on the first of each month. And it will also help an owner fix up a property and get it in rental-ready shape.

On the renters side, Belong says it has created a system that gives them a way to build home ownership themselves. For example, with each one-time rent payment, residents get around 3% of the price of rent back, which accumulates in an account with the aim of being used toward a down payment on the purchase of a home — but only if it’s used to buy a home through its platform. You see, the company serves as a real estate brokerage as well.

The mission is similar to that of Divvy’s, a proptech unicorn, but with a different model. Divvy, which raised $200 million in funding last August at a $2 billion valuation, buys homes on behalf of renters and helps them become homeowners.

For its part, Belong differs from other offerings in the space in that it addresses the property management piece, according to Resnik, a former entrepreneur-in-residence at a16z, who previously founded three other startups.

Resnik said the concept for Belong was inspired by the “pain” he and one of his co-founders had when renting homes.

“We’re painfully aware of all the pains that people go through when they need to rent a home,” he told TechCrunch, “and how difficult it is to be able to afford a home.”

As they studied the problem, they discovered a “concerning” trend that more institutional investors were increasingly owning a share of the housing stock market.

“We dug into why there were not more individual homeowners, which would be net positive for the economy,” Resnik said. “And we realized it wasn’t easy to buy a home and manage it and do it in a way that’s stress free.”

Image Credits: Belong

Put simply, Belong wants to take residents out of “second-class citizen status” and connect them with homeowners “that want to give them a great experience” while those homeowners turn over management to the startup.

While Resnik declined to reveal valuation or hard revenue figures, he did say that San Mateo, California-based Belong grew its revenue by nearly 3x in 2021. With the latest financing, it has raised a total of $95 million in equity and secured $30 million in debt to date.

The startup has a variety of revenue streams, according to Resnik. For one, homeowners pay 8% of the rent that Belong collects for the service of “managing their home end to end.” It has a built-in payments infrastructure so that renters pay through the platform so the money comes out of that automatically. Every time the startup sources a resident for a home, they get a 6% share of the rent. It also allows homeowners to finance any maintenance or repairs that need to be conducted in a home.

Today, Belong operates in the Bay Area, Southern California, Miami and Seattle with an engineering team distributed across LatAm, a source of pride for Resnik. Thousands of homeowners and nearly 7,000 renters are on its platform currently. The company is looking to expand to new markets with the new capital as well as do more hiring and focus on product development.

Lead investor Fifth Wall has made investments in companies that help streamline the home buying and selling process for consumers. But Partner Dan Wenhold believes that Belong fills “an important gap in the market through its technology offering that serves consumers after they become homeowners or renters.”

“We believe Belong’s people-first model raises the bar for the future state of home rentals and ownership,” he said, noting that Belong’s focus on the retail segment of single family residential owners and renters is “a key differentiator.”

“These groups have been traditionally underserved by offline property managers who do not use technology or a tech-first approach to solving problems,” Wenhold told TechCrunch. “With in-house operations and service professionals in each market in which they operate, Belong brings a full-stack approach to property management.”

Generally, we’re seeing an increased number of companies focused on renters. Earlier this week, TechCrunch reported on Arrived’s $25 million Series A. That startup raised capital from Forerunner Ventures and Bezos Expeditions (Jeff Bezos’ private investment fund) to give people the ability to buy shares in single-family rentals with “as little as $100.”

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FloorFound grabs more capital to grow its oversized recommerce business

While we had the chance to be at home more over the past few years, you may have spruced up a home office or replaced a couch. However, once the new item was in your home, you may have had some buyer’s remorse or the item didn’t live up to its website photo.

In any case, that oversized item needs a new home, and FloorFound is working with brands and retailers to give that couch to someone who will love it, while avoiding the landfill.

We first caught up with the Austin-based company and its founder and CEO Chris Richter in 2020 when FloorFound was getting started. The company went on to raise $4 million in seed funding in 2021 and is now back with a $10.5 million Series A financing round.

The round was co-led by Next Coast Ventures and LiveOak Venture Partners with participation from existing investors Flybridge Capital Partners and Schematic Ventures and new investor Data Point Capital.

Richter told TechCrunch that the funding comes as more people are interested in purchasing resale. The company-sponsored survey done in 2021 found that over 90 percent of U.S. consumers reported buying resale items, while research from First Insight and the Wharton School suggests 83% of consumers who have purchased secondhand products plan to do so again, which is up from 17% in 2019.

“The tailwinds that were supportive of our business in 2020 and 2021 have only gotten better, as has consumer sentiment around sustainability, so we have grown accordingly,” he added.

Reverse logistics don’t work without a plan on how to handle the return and resale of those larger items, however, and FloorFound is making this process simpler through its end-to-end technology platform that streamlines both the recovery and resale of returned, lightly used and open-box items.

In February 2021, the company launched its solution and since then has more than doubled its recommerce sales each quarter on average. It also grew its client base five times, which includes furniture brands like Inside Weather, Floyd and Burrow. And, Richter noted, FloorFound worked with its clients to keep nearly 450,000 pounds of furniture in circulation and out of landfills so far.

FloorFound is the latest to raise funding within a U.S. resale industry poised to grow over 150% in the next decade and be valued at $330 billion, according to research from Mercari and GlobalData. It joins Loveseat, also based in Austin, which raised $7 million in Series A funding in March for its returned home goods marketplace. On the fashion front, companies like Recurate announced $17.5 million Series A funding this week.

Meanwhile, FloorFound intends to use the new funding to expand its market presence in the U.S. and move into additional retail verticals like appliances, mattresses and exercise equipment. The company currently has four major third-party logistics partnerships and over 40 warehouse hubs, a number Richter plans to triple this year.

What makes FloorFound stand out from its competitors is its approach to putting retailers, which often struggle with how to effectively do returns, at the center of recommerce, according to Richter.

“Retailers are going to miss out on a revenue opportunity if they don’t participate in recommerce, but trade-in and buy-back is a leap for many of them,” he added. “By focusing on the problem of oversized returns, we can help them use that inventory to launch new sales channels.”

Fetcher raises $27M to automate aspects of job candidate sourcing

Reflecting the growing investor interest in HR technology startups, Fetcher, the talent acquisition platform formerly known as Scout, today closed a $27 million Series B funding round led by Tola Capital with participation from G20 Ventures, KFund, and Accomplice. The new money — $7 million in debt and $20 million in equity — brings the startup’s total capital raised to $40 million, which co-founder and CEO Andres Blank says is being put toward international expansion and building out the Fetcher platform with new applicant tracking system (ATS) integrations and customer relationship management capabilities.

Fetcher was co-launched in 2014 by Blank, Chris Calmeyn, Javier Castiarena, and Santi Aimetta as a professional networking app called Caliber. After a few years, the founding Fetcher team decided to pivot into recruitment, leveraging some of the automation technology they’d built into Caliber.

“Hiring high-quality, diverse candidates had always been a pain point for me. At one of my prior startups, I personally experienced this issue, and after bringing on a recruiting team to help scale hiring efforts, I saw that their time was also too valuable to be spent on the manual, repetitive tasks that come with sourcing candidates,” Blank told TechCrunch in an email interview. “Rather than relying on expensive staffing fees, I thought there must be a better way to keep sourcing in-house, without it taking up too much time and energy on the talent acquisition teams and hiring managers.”

Through a Chrome extension, Fetcher’s platform ties in with ATS products as well as Gmail and Outlook to allow recruiters to source candidates directly from LinkedIn. Fetcher filters jobseekers into prebuilt email workflows, offering analytics including progress toward diversity goals at the individual, team, position, and company levels.

Fetcher

The Fetcher candidate directory.

Fetcher also performs predictive modeling, automatically gauging the interest of job candidates from their replies, and “automated sourcing,” which runs in the background to push applicants through vetting processes via automated emails.

“A great candidate experience is essential for any company, and part of that experience comes from building long-term relationships with candidates over time. Fetcher’s candidate directory allows companies to remarket to qualified candidates, set up reminders for future connections, and add additional outreach emails to the automated sequences,” Blank said. “Overall, the goal is to make it simple for companies to store, update, and connect with great candidates over time, messaging them about future job opportunities, milestones at the company, and more.”

The reliance on algorithms is a bit concerning, given the potential for bias — Amazon infamously scrapped a recruitment algorithm that favored male engineers and New York City recently placed restrictions on the use of AI in hiring. When asked about it, Blank asserted that the platform’s automation technologies allow for “a more diverse group of prospects” to push through the hiring funnel. He also highlighted Fetcher’s outreach policy, noting that people who don’t wish to be contacted about opportunities via Fetcher can send data deletion requests.

“[O]ur secret sauce here at Fetcher is combining both machine and human intelligence in order to minimize the biases that exist on both sides,” Blank said. “Beyond this, we also have diversity metrics on each search (visible on our platform to the client too), which keeps us in check. If we’re over- or under-indexing anywhere on the gender or demographics front, the platform can course correct. Finally, we remove selection biases from the client. The way we do this is that once a client trusts that the search is heading in the right direction (after vetting a handful of candidates upfront), they place the search on full automation. This means that going forward, they are no longer vetting every candidate, but simply reaching out to all qualified candidates that are found for [a given] open role.”

Blank linked to case studies from customers like Frame.io, which recently used Fetcher to hire employees mostly from underrepresented groups. But biases can enter at many different, often unpredictable stages of the pipeline. As Harvard Business Review’s Miranda Bogen writes: “For example, if [a] system notices that recruiters happen to interact more frequently with white men, it may well find proxies for those characteristics (like being named Jared or playing high school lacrosse) and replicate that pattern. This sort of adverse impact can happen without explicit instruction, and worse, without anyone realizing.”

Fetcher

Image Credits: Fetcher

The risk doesn’t appear to be dissuading recruiters. Fetcher currently has over 350 customers (growing 10% month-over-month) including Behr Paint, Albertson’s, Foursquare, and Shutterstock., and annual recurring revenue tripled in the last 12 months.

Beyond the strong top-line numbers, Fetcher is benefiting from the broader boom in the HR tech segment, which has seen high venture capital activity over the past few months. According to Pitchbook, HR tech startups collected more than $9.2 billion in venture capital funding globally from January 2021 to October 2021 — a 130% jump from 2020’s total.

“Fetcher is uniquely positioned as one of the only software-as-a-service recruiting platforms to automate both candidate sourcing and email outreach efficiently,” Blank said. “Rather than using a straight database model, Fetcher is the only sourcing solution that can truly automate the sourcing process for companies, based on its unique combination of ‘machine learning with human intelligence.’ This model allows for what feels like a 24/7 sourcer to work in the background for each client. By automating both the sourcing and outreach sides of recruiting, Fetcher can reduce the number of internal sourcers and recruiters a company needs, as well as significantly reduce the budget being spent on outside recruiting firms, agencies, or consultants.”

Fetcher employs 45 people, currently, and plans to double that number by the end of the year.