Tag: Recent Funding

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Qeepsake, a journaling app that helps families capture and store memories, raises $2M

Qeepsake, a New York-based family journaling app, has raised $2 million in seed funding. Founded in 2015, Qeepsake sends its users daily questions via text or push notifications to encourage them to reflect on their day, children, parenting and more. Text, photo and video responses are then automatically organized into digital journals in Qeepsake’s app.

The app was founded by two parents, Jeff and Stephanie McNeil, who wanted to create a private and secure service that would store their memories and remind them to stay on top of saving fleeting moments. The idea came from Stephanie and Jeff’s experience raising four young children at the time and feeling like they didn’t have the time or help in saving the memories that mattered most to them.

Qeepsake uses simple prompts to help parents save memories that would otherwise be missed. Users also have the option to turn these memories into custom-printed Qeepsake Books. To date, Qeepsake says it has over 700,000 registered users and has helped parents save over 50 million memories.

Once you sign-up for the app, you’re asked to add your child’s name or nickname to create a journal for them. You have the option to add more journals for your other children, as well. From there, you’re asked how many prompts you want to receive in a day and what time you want to receive them. You can also decide if you want to receive prompts for specific holidays, such as New Year’s Day, Valentine’s Day, Christmas and more. When you’re all set up, you’ll start receiving daily prompts.

The app is free to join, but also offers two paid memberships to users who want to unlock more features. The company’s Qeepsake Plus membership, which costs $47.88 per year, gives users access to unlimited entries and photos, up to two questions per day texted to your phone, the ability to answer previous questions and more. The membership also gives users the ability to sync the app with their social media accounts. Once you sync your social media accounts, you can add your posts on Instagram and Facebook to your Qeepsake journal. In addition, you can choose to skip questions and send in any photo and story to create a spontaneous journal entry. 

Qeepsake app

Image Credits: Qeepsake

The company’s Qeepsake Premium membership, which costs $95.99 per year, gives users the ability to add their spouse, partner, grandparent, sister, friend, nanny, daycare teacher, or neighbor to contribute to their journal. The premium membership is designed to capture your family’s journey from every perspective and is the only membership that includes Qeepsake video.

In addition to the funding announcement, Qeepsake also announced the appointment of Tracy Cho as its new CEO. Cho told TechCrunch that Qeepsake plans to explore new monetization opportunities over the next few years. The company also plans to pilot a few partnerships to introduce relevant parenting products and services.

The company’s seed funding round was led by LaunchCapital and included participation from TechStars, Right Side Capital and other strategic angels. Cho says Qeepsake will use the funding to invest in its marketing and engineering teams. Cho also notes that Qeepsake is aiming for “radical growth” in the next three years, as the company acknowledges that technology has evolved since the app’s founding seven years ago.

“Qeepsake was founded in 2015 to make it easier for new parents to document their journey,” Cho told TechCrunch. “And we’re proud to have developed a large and loyal user base. But technology has evolved a lot since then and Qeepsake needs to evolve in order to reach more parents. Consumer’s expectations of products they use every day have risen, and we want the product to be more personalized to each parents’ journey. For example, today, every parent gets the same set of questions. There is a lot of work we can do to tailor those questions based on how parents interact with us.”

Cho also said the company believes Qeepsake can be used beyond those first few years of child’s life, and that the app can grow alongside a child with the purpose of being turned over to them once they’re old enough to continue journaling on their own. She sees Qeepsake as an app that can help a family write a story that is passed on through generations.

With this latest investment, Qeepsake aims to reach more parents, increase engagement with a more personalized user experience and grow subscription revenues.

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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.

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Guesty books $170M to double down on property management tools for Airbnb and other rental platforms

Platforms like Airbnb have boomed with more consumers (and business users) than ever before keen stay in private properties when traveling or working away from their usual home base. That’s also meant a boom for startups building technology to help those renting out properties to manage the process. Guesty — which has built a platform to manage property listings across multiple sites like Airbnb, Vrbo, Expedia and Booking.com — is today announcing that it has raised $170 million, an all-equity round that it will be using to continue fueling its growth, and to tap deeper into providing tools to address our changing habits as consumers.

“With the ways people live, work, socialize and travel having shifted, the lines between traditional hotels and rental accomodations continue to blur,” co-founder and CEO Amiad Soto told me in an interview. “Hospitality operators — everyone from hosts to property managers to hotel brands — are continuing to adapt to this new reality. The last few years brought new customer personas to the short-term rental market, including classic hotel-goers who have higher demands for guest experiences and services.”

Apax Digital Funds, MSD Partners and Sixth Street Growth co-led the round for Tel Aviv-based Guesty, with previous backers Viola Growth and Flashpoint also participating — motivated in part by that vision of a changing travel and living landscape.

“As alternative property management operations become more complex, Guesty is paving the way for the next generation of digital hospitality services,” said Dave Evans, a partner at Apax Digital, in a statement. “Their track record of success and innovation, along with their platform’s growing suite of tools and intuitive user experience has Guesty positioned to define and consolidate its category, working with hosting businesses of all sizes. We are excited to continue partnering with the company as it continues to transform the industry.”

This is an all-equity Series E, Soto said in our interview (via email, because, coincidentally, I happen to be traveling myself). Soto didn’t say at which valuation, but he told me that the figure had tripled since its last round (a $50 million injection in 2021). PitchBook notes that last round was at a $230 million valuation; if that’s accurate it would put today’s round at $690 million. (We’ll update as and when we learn more.) The company is not yet profitable, Soto said, but it’s aiming for it next year, when it is also on course to surpass $100 million in ARR in the first six months.

The size of the round is big, but perhaps especially notable given the constraints that fundraising has been under in general this year. It’s also a measure of where Guesty is today, and where it’s going.

Soto and Guesty are not disclosing how many properties managed using its platform but directionally say the numbers are growing. “We expect our revenue and listings under management to continue to double year-over-year, both in 2022 and 2023,” Soto told me. (For a point of reference, the last time we reported the number was at the time of a $35 million funding round in 2019, when it noted that it had over 100,000 across 70 countries.)

His explanation for moving away from disclosing property numbers is not to do with the inevitable disruption that Covid-19 brought to the industry (and Guesty’s users in particular), but because Guesty itself has changed as a business, expanding both the kinds of properties that are managed, and the uses of those properties.

“Since our inventory has grown to include more than just short-term rental listings and include more flexible accommodations, such as co-living spaces, aparthotels, glamping and more, the key metrics that demonstrate our growth are our revenue and profitability,” Soto said, adding that Guesty has seen 100% growth year on year and expect this to continue. The startup’s team now numbers 585 employees, which has also doubled in size in the last year.

“We expect these numbers to continue growing even faster,” he noted.

To that end, Guesty is also rapidly expanding in terms of what kinds of tools it’s offering to its users, and thus how the platform generates revenues. There are a lot of travel startups out in the wild, including a huge swathe of those dedicated to property management technology and services, and Guesty has been positioning itself as something of a consolidator. The company’s acquisitions have included MyVR (like Guesty, an alum of Y Combinator) and Your Porter respectively to tap into deeper multimedia tools for its users, and to provide more tools for hosts that work across properties owned by third parties.

The plan is to use some of this funding to continue picking up more businesses that complement Guesty’s strategy, and to continue taking it beyond simply providing tools to manage properties, but to provide other services, and for its users, to give them an end-to-end, one-stop platform to manage their own work as a business. Features today number about 18, including not just calendar management and ways to manage across multiple booking portals, but also channels to manage guest-host communications, analytics and accounting tools, payment tools and more.

“Hospitality operators are now expected to provide more amenities, real-time responses, have more availability for ongoing customer communications and provide an overall elevated guest experience,” Soto said. “The trend of merging of accommodation types will continue, and the ever-growing consumer expectations will push property and hospitality managers to provide increasingly flexible levels of service and accommodations. Guesty’s platform is tailored to meet this need. For example, our technology enables hospitality providers to enhance guest communications by incorporating automation, making guest interactions faster, more intuitive, and providing smartphone tools and options which are most guests’ preferred method of communication.”

One area of investment will also be building more automation into the the product, he said, which likely is aimed at working with customers that manage larger amounts of properties and may have more repeatable, repetitive tasks.

“We are working hard to increase the levels of automation within our product as well as enhance AI-based communication tools,” Soto continued. “Guesty’s product provides tools for different types of properties, including multi-unit buildings and multi-location properties, but as our customers evolve, they come with additional needs for different types of guests. With that, we will be enhancing our product to provide hospitality providers with the tools they need to address everything from monthly stays and living-as-a-service, tailored for various types of accommodations – from glamping to more traditional hotel-like properties. To accomplish this, the product must be extremely flexible and accommodate hybrid solutions.”

Lastly, a third area where it’s likely to be investing more efforts is in the financial services it provides to its users. “To boost the value we offer, we will be looking to add to and enhance our fintech offerings, allowing our customers to bill more efficiently, create credit lines and take loans to grow their business, manage risk, and offer more advanced analytics for customers to make informed decisions about growing their business and managing additional aspects of their operations,” he added. Acquisitions that it might make to grow all of that inorganically will be made both across product lines and geographies, said Soto. It will also be by way of integrations. Today these number about 130 with other third-party tools.

The company appears still to have a lot of runway left as a standalone business. While Soto would not comment on whether it’s been approached as an acquisition target — either by other companies that build tools to manage businesses or customer service, or by some of those other online travel booking giants — he was unequivocal in saying that Guesty was not looking to get acquired, but to play the consolidator itself.

“Guesty is not looking for an exit,” he said. “We are strong believers that the industry is fragmented and ripe for consolidation and have already made multiple acquisitions both in-market and vertical expansion to enhance our offering and position. We are proud to have the highest level of business and technology partnerships with all the large travel platforms including Airbnb, Booking.com, Vrbo, Expedia and more, and are able to provide value to the entire ecosystem, which benefits everyone.”

That said, the tethering that it has to certain platforms — Soto notes that Airbnb “is still very popular” among its customers and in terms of activity, although “booking.com may be more popular in Europe and have actually grown in the short-term rental (STR) sector [with booking.com’s expansion into STR] now accounting for around 30% of their business. VRBO (from the Expedia Group) also remains a very popular option in certain areas in the US, especially for family-oriented properties in more rural vacation areas — does seem to imply a natural pool of companies that might be interested in it longer term, as they too look for more ways of diversifying their own revenues and expanding their reach.

Other more direct competitors today include the likes of TravelNest, Hostaway and Lodgify, among many others.

That competitive landscape doesn’t deter investors, though.

“In a largely specialized and localized industry, there is a huge opportunity to bring a global standard of service and excellence to hospitality operators of all shapes and sizes,” added Dan Bitar, MD and co-head of MSD Growth. “Guesty’s robust product offerings, strong R&D team, and proven ability to scale the business across geographies make it the ideal platform to consolidate the currently fragmented market.”

“The tech-enabled real estate ecosystem continues to grow and mature, and we look forward to joining Guesty on its journey to democratize and further professionalize the property management space,” said Michael McGinn, partner and co-head of Sixth Street Growth, in a statement. “With Guesty’s strong management team, long-term vision, product innovation, and marquee customers and partners, we have full confidence in the company’s ability to further cement its leadership in the world of hospitality and property management.”

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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

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Google’s third bet from its Africa Investment Fund is in logistics company Lori Systems

Lori Systems, an African on-demand logistics and trucking company digitizing haulage and providing shippers with solutions to manage their cargo and transporters, has raised a pre-Series B round in which Google participated along with other existing investors. Sources say the company raised at a slightly higher valuation than its last $110 million valuation in 2020. 

This undisclosed investment is Google’s third from the $50 million Africa Investment Fund targeted at the continent’s early- and growth-stage startups, which the company CEO Sundar Pichai announced last October. The fund is part of Google’s plan to invest $1 billion in “tech-led initiatives” over the next five years. The news also comes off the back of the launch of Google’s first product development center on the continent, in Nairobi, Kenya, the city where Lori Systems first launched.

Last December, Google announced its first investment in Ugandan super app SafeBoda. During the announcement, Nitin Gajria, the managing director of sub-Saharan Africa, said that the Africa Investment Fund wouldn’t restrict itself to specific verticals or regions. “We are focusing on investments where we believe that Google could add value. If founders are building interesting products solving real challenges in Africa, that would fall squarely within our investment thesis,” he added. 

The following month, the fund participated in South African games publisher and studio Carry1st’s $20 million Series A extension round led by a16z. With its most recent investment in Lori Systems, a Google spokesperson — when quizzed about the fund’s investment strategy considering its investments have come from three different sectors — told TechCrunch that the Africa Investment Fund has an eye for startups that it has a strategic overlap in key verticals, including fintech, logistics, e-commerce and local language content.

Lori Systems

Image Credits: Lori Systems

In Africa, more than $180 billion is spent annually on haulage, and logistics account for more than 70% of a product’s price, according to reports. For comparison, it’s 6% in the U.S. The influence of logistical operations on products leads to various problems for operators, from inconsistent pricing, which stems from a fragmented supply and demand market, to paper documentation and little or no access to financing.

Companies like Lori solve such problems and reduce costs with their on-demand logistics and trucking marketplaces, which connect shippers to transportation, help them move cargo, extend working capital facilities and provide them with software to manage their operations. Lori, in a statement, said it has helped thousands of shippers and carriers move over $10 billion worth of cargo across the continent since launching in 2016.

Google’s Africa Investment Fund makes first investment in Uganda’s SafeBoda

The TechCrunch Startup Battlefield Africa winner in 2017 is currently present in Kenya, Uganda and Nigeria. In 2019, we reported the firm’s Series A round, which several publications quoted to be between $20-30 million, led by Imperial Logistics (recently acquired by Dubai Ports World). Lori has raised a total of $38.2 million, according to Crunchbase. Some of its competitors include Kobo360, Sendy and Sote.

Given that its last raise was almost three years ago, I asked CEO Uche Ogboi why it took Lori, one of the most funded logistics companies on the continent, that long to obtain subsequent funding and why it opted for an extension instead of a new priced round. She stated that Lori has been focusing on growth, sustainability and a path to profitability since its last funding round. According to the chief executive, the company has significantly broadened its product range and now offers a “fully digitized transport management platform,” built in response to the pandemic, which disrupted trade flows of shippers and transporters. Its new products have tripled transaction volume, while its marketplace take rate has almost doubled, she said. 

“At this stage in our journey, and in this current market, we made the strategic decision to extend our Series A rather than raise a Series B on unfavorable terms,” Ogboi answered in an email response concerning the company’s fundraising efforts and the current VC landscape. “We are excited by this opportunity to partner with Google and expect to reevaluate our investment options sometime in the first half of next year.” Lori wants to use the new funds to scale new product lines and reach profitability, Jean-Claude Homawoo, co-founder and chief product officer added. 

It couldn’t be learned how much Google’s Africa Investment Fund put into this round, just as with investments in Safeboda and Carry1st. Yet, it’s noteworthy that the fund — which, according to its spokesperson doesn’t intend to lead investments but “partner with top investors who have a regional presence and local knowledge” — has primarily participated in extension deals via convertible notes. 

“At Google, we understand the transformative power digitization can bring to the African continent. There is so much potential in the region, but it’s only through innovation that this can be fully unlocked,” commented Gajria on Google’s participation. “Lori Systems is a great example of how technology can be scalable across Africa, and how, in turn, this can drive meaningful economic development.”

a16z, Avenir and Google back South African mobile games publisher Carry1st in $20M round

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Mycel’s mushroom-based biomaterials sprout $10M in funding

Mycel, a South Korean startup making fungal-based biomaterials that can replace leather and meat, said it has raised $10 million (13 billion WON) in a pre-Series A round of funding.

Co-founder and CEO of Mycel Sungjin Sah told TechCrunch that the company uses mycelium, a root-like structure of mushroom, to make leather substitutes that can be used in car seats and luxury cosmetic products, and fashion products like shoes, clothes and bags. Mycel is in talks with global cosmetic brands to co-develop the mycelium-based leather products as well as cosmetics ingredients, Sah said, adding that it aims to commercialize its mushroom leather in 2023.

The Seoul-headquartered startup will use this new funding to open a production plant in South Korea for scaling the manufacture of its fungal-based biomaterials and double its headcount to 42 employees, Sah said in an interview with TechCrunch. The spin-off company from Hyundai Motor’s in-house startup program was founded in 2020 by former Hyundai Motor employees Sah, Sungwon Kim (COO) and Yunggon Park (CSO).

Mycel isn’t the only company using mycelium to make leather. There are at least eight companies across the globe using mycelium to make leather, per the 2021 Material Innovation Initiative report. These mycelium-based materials innovators have attracted investors to ramp up mushroom- and plant-derived leather. A San Francisco-based startup called MycoWorks raised $125 million in a Series C round early this year, while Bolt Threads also secured $253 million at a 1.15 billion valuation in September 2021. Ecovative Design also closed $60 million in March 2021.

Investors in Mycel’s latest financing round include Korea Development Bank, Industrial Bank of Korea, Hyundai Motor’s Zero 1 Fund, also known as ZER0 1NE 2 Fund, Stone Bridge, We Ventures and Spring Camp. Its pre-money valuation is approximately $40 million (50 billion WON), according to Sah.

The global wholesale market of next-generation fabrics to replace leather, silk, down, wool, fur and exotic skins with plant-based, microbe-derived, mycelium, recycled and other sustainable materials is projected to reach approximately $2.2 billion by 2026.

A range of fashion brands is searching for next-gen materials to partner with, per the 2021 MII report. In July, Global luxury brand Stella McCartney, which has been working with Bolt Threads since 2017, launched a limited run of 100 mushroom-derived leather bags. Additionally, Hermes collaborated with MycoWorks to make a handbag using mushroom-derived leather.

Bolt Threads partners with Adidas, owners of Balenciaga and Gucci, and Stella McCartney on mushroom leather

Mycel

Image Credits: Mycel’s Myco leather

Mycel is also competing in the alternative protein space with fungi-based food developers like Mycorena and Quorn.

On top of the mushroom leather, Mycel develops a fungi-based biomaterial that can be used as an alternative protein to disrupt the meat sector — this biomaterial, which is different from Mycel’s mycelium in the leather, is a fungus but technically not mushrooms, Sah clarified. Back in 2020, the startup tried to pivot to its main biomaterial product for alternative protein, which was experiencing a boom in early 2020 in South Korea. But the company now develops biomaterials for both mushroom-based leather substitutes and alternative proteins, Sah explained.

The company aims to enter Singapore with its fungi-based biomaterial that will be used in alternative proteins as early as next year, Sah noted.

Mycel

Image Credits: Myco protein

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a16z says ‘WeBack’ to WeWork’s Neumann with its biggest check ever

Andreessen Horowitz (a16z) seems determined to keep the capital flowing to controversial WeWork founder Adam Neumann. The storied venture firm wrote its largest individual check ever, at $350 million, to Flow, Neumann’s new residential real estate company focused on rentals, the New York Times reported today.

The funding round values Flow at over $1 billion, making it a unicorn before it even commences operations, which it plans to do in 2023, according to the Times. The startup is set to operate over 3,000 apartment units Neumann has purchased in Miami, Fort Lauderdale, Atlanta and Nashville as part of its vision to bring community-oriented features to the rental market, the Times added.

In a blog post on a16z’s website today, Marc Andreessen described Neumann as a “visionary leader” and credits him with “revolutionizing” real estate. Andreessen’s post did not address any of the financial terms of the investment.

The investment marks a16z’s second show of support for a Neumann-founded company this year: In May, the firm put $70 million into the entrepreneur’s blockchain-based carbon credit platform, Flowcarbon, which appears to have no relation to Flow besides its shared co-founder. Curiously, Andreessen’s blog post today calls Flow Neumann’s “first venture since WeWork,” although he is listed as a co-founder of Flowcarbon in a16z’s earlier post about that investment.

“We understand how difficult it is to build something like this and we love seeing repeat-founders build on past successes by growing from lessons learned,” Andreessen wrote in today’s blog post, implicitly referring to Neumann’s time at WeWork.

WeWork’s attempt at an IPO under Neumann (remember community-adjusted EBITDA?) was so calamitous that its Silicon Valley and Wall Street investors ended up paying Neumann an enormous exit package, worth ~$1 billion, just to leave the company.

Neumann managed to get that handsome payout despite that under his reign, the company tanked in value from ~$47 billion to ~$8 billion and gained a reputation for mismanagement and poor treatment of employees.

Throughout Neumann’s tenure, missteps abounded. He famously trademarked the word “We” and sold it back to his own company for nearly $6 million, though he ended up returning the money to the company after this arrangement was revealed during the company’s IPO attempt and subsequently lambasted by investors and the public.

After Neumann burned investors’ cash on copious amounts of booze for the office, a school for his wife’s vanity project and a wave pool, it’s somewhat surprising to see Silicon Valley coming back for seconds. a16z’s deal with Flowcarbon may well have been negotiated before the rout in the equity markets but its deal with Flow announced today likely was not, meaning today’s deal is an even bigger sign of the investor’s confidence in Neumann’s leadership amid broadly difficult market conditions.

To be sure, WeWork’s approach to co-working spaces was prescient in a pre-pandemic world, regardless of the company’s other controversies. As remote work rises in popularity, there may well be a tremendous opportunity in building community among renters — an idea Neumann has been keen to pursue for years. He took a pass at this concept before with WeLive, a set of residential communities he planned to build under the WeWork brand that fizzled out after opening just two locations.

In his blog post today, Andreessen mused at length about how Flow is poised to solve the nation’s housing crisis, writing that “limited access to home ownership continues to be a driving force behind inequality and anxiety,” though details in the post about exactly how Flow will set out to achieve this were scant.

Today’s investment in Flow comes just after reports surfaced that Andreessen fought against a proposal to build new affordable housing units in his ultra-wealthy hometown of Atherton, CA.

Adam Neumann’s blockchain-based redemption story now sponsored by a16z

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Gorgias’ valuation rises to $710M with $30M Series C for e-commerce customer support

Gorgias, developing customer service tools for e-commerce companies, raised $30 million in new Series C capital in a round that boosted its valuation to $710 million.

Transpose Platform and Shopify led the round and were joined by previous investors Jason Lemkin of SaaStr, Rajeev Dham from Sapphire Ventures, CRV and Alven.

It’s been a few years since we profiled the company, whose total funding to date is $72.4 million. In late 2020, the company had raised $25 million in Series B funding on a $305 million valuation. The company was valued at $680 million prior to this round, Gorgias co-founder and CEO Romain Lapeyre told TechCrunch via email.

At the time of the Series B, it was supporting more than 4,500 stores with its technology that brings all of the channels that shoppers use to contact online stores into one feed for each company. This way support tickets can be managed in a number of different ways, including live chat, email, phone, SMS, messaging apps and social media.

Today, the six-year-old company is working with more than 10,000 online stores, including Princess Polly, Steve Madden, Olipop and Marine Layer, which are selling products via Shopify, BigCommerce and Adobe Commerce.

Customer support startup Gorgias raises $25M

It also has grown to 245 employees across offices in San Francisco, Paris, Toronto, New York City, Sydney, Belgrade and Charlotte.

Over the past year, Lapeyre said brands are seeing advertising costs rise on channels like Facebook and Google, in some cases five times their previous rates, “which is wearing that playbook thin.”

“Mix in continued supply chain issues and the higher cost of raw materials and direct-to-consumer brands are feeling the margin squeeze at both ends,” he added.

Instead, he believes that to succeed in this kind of environment, “DTC brands need to generate more money from their existing customers” by improving the customer experience. Gorgias offers insights on how to do that with a DTC growth playbook that Lapeyre estimates can result in 44% more revenue for its e-commerce customers.

Meanwhile, Gorgias more than doubled in size since its Series B, Lapeyre said. In addition to the 10,000 online stores and 245 employees, it has twice as many customers, and its annual recurring revenue and valuation have more than doubled as well.

“The environment we’re working in has changed quite a bit,” he added. “The 2020 e-commerce boom that helped fuel our growth up to our Series B has subsided, but it’s never been a more important time to upgrade the customer experience of online stores. Lower margins and higher acquisition costs require businesses to capture more revenue from their existing customers, and customer experience is at the heart of that effort.”

Even with all of that growth, the company is monitoring its cash burn rate in this new economic environment. The company’s goals early on were to “hire and grow in a sustainable way,” Lapeyre said. However, it has “slowed down hiring on the go-to-market side, assessed where we can cut costs and asked the team to be smart about how we use the cash we have on hand.”

In fact, Gorgias wasn’t planning to raise new venture capital so soon, but Lapeyre said he jumped at the opportunity to work with Transpose Platform and Shopify.

The company will use the new funding to accelerate development of its Automation Add-on feature, which can deflect up to a third of incoming repetitive support tickets by providing customers with instant answers. It also has a new feature coming out soon called Revenue Add-on, which will identify customers that may generate further revenue through online customer services.

“Both the automation and ticket prioritization will further merchant revenue goals by better identifying shoppers who are ready to buy and by increasing conversion rates through proactive support — an innovation in the current helpdesk market,” Lapeyre added. “This is made possible by the volume of e-commerce-specific support tickets handled by the Gorgias platform, which are used to train the company’s proprietary algorithms to detect intent and auto-tag appropriately.”

Study up on churn rate basics to set customer and revenue benchmarks

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Your future shrimp meal could come from Atarraya’s farming technology

Atarraya, creator of Shrimpbox, a sustainable “plug-and-play” shrimp farming technology, is swimming to the surface after being in stealth mode since 2019. The Mexico City-based company emerges with new funding, $3.9 million in Series A dollars, and a new U.S. headquarters in Indianapolis.

The company is claiming this is the “world’s first” technology of its kind, and Daniel Russek, founder and CEO of Atarraya, told TechCrunch that Shrimpbox was an idea he got after college in 2005 when he started with a non-government organization working with fishing communities.

That grew into aquaculture farming technology with Russek and his team creating a startup company around it called Maricultura Vigas. That company mainly focused on the biotechnology aspects of aquaculture, including the challenge of raising shrimp in a closed loop system.

“We wanted to make the shrimp business more sustainable and more efficient without destroying the environment,” Russek said. “We decided to take a bet on the technology and became a startup. We raised some money, got some grants from the Mexican government.”

However, in 2019, the company realized that the challenge was a bit bigger than the founders previously anticipated. In addition to biotech, Russek felt there also needed to be software and automation components. So they created Atarraya, a U.S.-based company tasked with the challenge of making the shrimp farming technology sustainable and more affordable.

A Shrimpbox farm system enables farmers to become vertical aquaculture farming operations. This includes cargo containers that can be located even in landlocked areas and moved accordingly to suit production needs.

The three-pronged technology includes biofloc technology, which creates an ideal environment to protect shrimp from disease and so they can grow without the need for antibiotics or harsh chemicals and with minimal need for water discharge. Then there is the software aspect that enables remote operation management of the production and workflow mapped out with data so that it is easier to train and perform the farming tasks. Finally, artificial intelligence-powered automation and engineering components are designed to remote-monitor the water quality, regulate temperature and oxygenation and feed the shrimp.

“This technology is basically everything in a hyper modular solution,” Russek said. “The idea is that we can manufacture Shrimpbox anywhere in the world that is ready to use with plug-and-play and can be moved around efficiently using an intermodal transportation system.”

Atarraya Shrimpbox

Atarraya’s Shrimpbox aims to sustainably grow shrimp. Image Credits: Atarraya

CellMEAT, a South Korean lab-grown shrimp producer, bags $8.1M Series A funding  

Now armed with $3.9 million in Series A angel investment, the first Shrimpbox prototypes are currently being assembled in Guapinole, Oaxaca, Mexico and a farm for training and demo purposes is expected to open later this year in partnership with the Indiana Economic Development Corp.

The funding was led by Jeffrey Horing and a group of angel investors, including Mark K. Gormley, Geoffrey Kalish, Robert Stavis and Robert Goodman. This brings Atarraya’s total funding to $10 million to date, Russek said.

The company grew its Mexican business 5x between 2020 and 2021. Russek expects Atarraya to begin an early adopter program in 2023 and will start scaling in the second half of the year.

“That growth has enabled us now to be in a very strong position to make an impact in the industry,” he added. “Our goal is to create a new farming industry in the United States and to create infrastructure and technology that is as easy to use as a laundry machine so that anybody can become a shrimp farmer.”

While Atarraya is working with real shrimp, lab-grown and plant-based alternatives have also seen love from venture capital this year. For example, South Korea-based CellMEAT raised $8.1 million for lab-grown shrimp.

What’s beyond Beyond Meat and Impossible Foods in the future of food?

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Meta invests in Take App, a Singaporean startup that helps merchants sell via WhatsApp

WhatsApp has long transcended its roots as a simple messaging app for friends, and is now a core communication tool for businesses seeking a direct channel to their customers’ pockets — both literally, and metaphorically. Countless companies have turned to the omnipresent messaging app as they build the very foundation of their business, something that hasn’t gone unnoticed by WhatsApp’s parent company.

Indeed, Meta Platforms Inc. — the corporate megabrand behind Facebook, Instagram, Messenger, and WhatsApp — recently invested in Take App, a fledgling Singaporean startup founded by former Facebook engineering manager Youmin Kim, who left the social network last year to work on a new product that promises to bridge the digital gap for small-business owners in Southeast Asia.

At its core, Take App serves as an easy way for those with little technical know-how to set up a simple website to facilitate online orders, replete with a shopping cart, payments, and a direct connection to WhatsApp for managing and tracking the final order.

Take App: WhatsApp ordering

While restaurants are a central focus for the Take App service, the company also works with bakeries, grocery businesses, beauty salons, among others.

“Our unique selling point is that we let merchants keep direct WhatsApp conversations with customers,” Kim explained to TechCrunch. “Merchants love the idea that they receive notifications and order details directly in WhatsApp — no other app or login is required.”

On top of that, Take App is looking to help businesses drive repeat custom through maintaining a database, with support for creating and sending newsletters (like a “Mailchimp for WhatsApp”) that include special offers or relevant company updates.

Take App: Newsletters

While the core Take App service is free, the company also offers a bunch of premium features which includes things like advanced analytics, unlimited image uploads, and custom domain names.

The story so far

Kim initially started Take App as a non-profit to help small restaurants in Singapore accept online orders at the start of the pandemic, but he soon realized there was a significant opportunity to turn this into a commercial venture. Today, the company claims 1,000 businesses have used Take App from across 35 different markets, though the vast majority are based in Singapore, Malaysia, and Indonesia.

Take App also recently graduated Y Combinator (YC) as part of the accelerator’s Winter 22 batch, which led YC to invest in the company as part of a $1 million round alongside Meta and an undisclosed list of angels — this seed funding round was quietly closed back in June.

Take App follows in the footsteps of other similar startups, such as Germany-based Charles, which recently raised $20 million to bring conversational commerce — and newsletters — to WhatsApp in Europe. It’s impossible to ignore the parallels here, but Kim maintains that Take App is purpose-built for a very specific type of company, in a very specific part of the world — simplicity is the name of the game.

“In Southeast Asia, WhatsApp is the most common way to talk to business, but it incurs heavy operation costs as employees have to respond to a number of conversations,” Kim explained to TechCrunch. “There are ‘western’ CRM solutions that make this more efficient, but they are too expensive or difficult for our merchants. We focus on traditional businesses with a digital gap.”