Tag: Recent Funding

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Aqua Security raises $135M at a $1B valuation for its cloud native security service

Aqua Security, a Boston- and Tel Aviv-based security startup that focuses squarely on securing cloud-native services, today announced that it has raised a $135 million Series E funding round at a $1 billion valuation. The round was led by ION Crossover Partners. Existing investors M12 Ventures, Lightspeed Venture Partners, Insight Partners, TLV Partners, Greenspring Associates and Acrew Capital also participated. In total, Aqua Security has now raised $265 million since it was founded in 2015.

The company was one of the earliest to focus on securing container deployments. And while many of its competitors were acquired over the years, Aqua remains independent and is now likely on a path to an IPO. When it launched, the industry focus was still very much on Docker and Docker containers. To the detriment of Docker, that quickly shifted to Kubernetes, which is now the de facto standard. But enterprises are also now looking at serverless and other new technologies on top of this new stack.

“Enterprises that five years ago were experimenting with different types of technologies are now facing a completely different technology stack, a completely different ecosystem and a completely new set of security requirements,” Aqua CEO Dror Davidoff told me. And with these new security requirements came a plethora of startups, all focusing on specific parts of the stack.

Image Credits: Aqua Security

What set Aqua apart, Dror argues, is that it managed to 1) become the best solution for container security and 2) realized that to succeed in the long run, it had to become a platform that would secure the entire cloud-native environment. About two years ago, the company made this switch from a product to a platform, as Davidoff describes it.

“There was a spree of acquisitions by CheckPoint and Palo Alto [Networks] and Trend [Micro],” Davidoff said. “They all started to acquire pieces and tried to build a more complete offering. The big advantage for Aqua was that we had everything natively built on one platform. […] Five years later, everyone is talking about cloud-native security. No one says ‘container security’ or ‘serverless security’ anymore. And Aqua is practically the broadest cloud-native security [platform].”

One interesting aspect of Aqua’s strategy is that it continues to bet on open source, too. Trivy, its open-source vulnerability scanner, is the default scanner for GitLab’s Harbor Registry and the CNCF’s Artifact Hub, for example.

“We are probably the best security open-source player there is because not only do we secure from vulnerable open source, we are also very active in the open-source community,” Davidoff said (with maybe a bit of hyperbole). “We provide tools to the community that are open source. To keep evolving, we have a whole open-source team. It’s part of the philosophy here that we want to be part of the community and it really helps us to understand it better and provide the right tools.”

In 2020, Aqua, which mostly focuses on mid-size and larger companies, doubled the number of paying customers and it now has more than half a dozen customers with an ARR of over $1 million each.

Davidoff tells me the company wasn’t actively looking for new funding. Its last funding round came together only a year ago, after all. But the team decided that it wanted to be able to double down on its current strategy and raise sooner than originally planned. ION had been interested in working with Aqua for a while, Davidoff told me, and while the company received other offers, the team decided to go ahead with ION as the lead investor (with all of Aqua’s existing investors also participating in this round).

“We want to grow from a product perspective, we want to grow from a go-to-market [perspective] and expand our geographical coverage — and we also want to be a little more acquisitive. That’s another direction we’re looking at because now we have the platform that allows us to do that. […] I feel we can take the company to great heights. That’s the plan. The market opportunity allows us to dream big.”

2020 was a record year for Israel’s security startup ecosystem

 

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Zego, the tech-enabled commercial motor insurer, raises $150M at $1.1B valuation

Zego, the insurtech that got its start by offering flexible motorbike insurance for gig economy workers but has since expanded with a range of tech-enabled commercial motor insurance products, has raised $150 million.

Leading the London-based company’s C round — giving it a $1.1 billion valuation and a unicorn status — is DST Global. Other new backers include General Catalyst, whose founder and MD, Joel Cutler, joins Zego’s board.

Notably, I’m told all existing investors followed on, including Wise’s Taavet Hinrikus, who is also on the Zego board, and Target Global, Balderton Capital and Latitude. Zego has now raised more than $200 million since launching in 2016.

The insurance company says it will use the funding to “rapidly expand across Europe and beyond”. It will also double its workforce, which currently stands at 265 employees, to over 500 employees by the end of 2021, and continue to invest in technology. Late last year, Zeho acquired telematics company Drivit.

The rise of the gig economy helps London-based insurtech Zego to raise $42M

Zego offers commercial motor insurance for businesses, from self-employed drivers and riders to fleets of vehicles, spanning pay-as-you-go insurance to annual policies. It combines tech with multiple data sources to offer insurance products that it claims save time and are more cost-effective. It earned its own insurance license in 2019, enabling it to build and sell its own policies, in addition to working alongside other insurers.

Technical/data integrations include those with companies in the ride-hailing space, such as Uber, Ola and Bolt, and in the delivery space, such as Deliveroo, Uber Eats and Just Eat. More recently, Zego has become a key partner in the U.K.’s burgeoning e-scooter rental market, partnering with companies like Tier, Voi and Dott.

Next up, the insurtech is betting big on offering insurance for fleets. “Over the past couple of years, Zego’s focus on powering opportunities for businesses has expanded to include not just self-employed drivers and riders, but also entire fleets of vehicles,” Sten Saar, CEO and co-founder of Zego, tells me, noting that 80% of new vehicles are now sold to commercial customers.

“This has been both a natural progression for the company, with the only real difference being distribution, as well as a focused effort, as Zego aims to capitalise on an ever-growing market currently underserved by the insurance sector”.

To date, Zego has provided more than 17 million insurance policies and covered more than 200,000 vehicles in five countries.

“While most traditional insurers price their insurance products based purely on factors such as age and vehicle type, and while others may use telematics-based driver behaviour data too, Zego is able to price policies based not only on traditional factors, but also driver behaviour data and working habits data,” adds Saar.

“In fact, overall, the information Zego can collect amounts to five times more data per vehicle than competitors, or 50 data points per second. This means that we have a much more comprehensive understanding of risk than competitors, enabling us to provide best-value insurance coverage, from policies ranging from one hour to one year”.

Cue statement from Tom Stafford, managing partner of DST Global: “The shift to digital is occurring across multiple industry categories and is increasingly occurring in the insurance industry. We are excited to partner with Sten and the team at Zego as they leverage internet, technology, telematics and data-driven decisions to provide the best insurance products at the best pricing for their customers.”

Why VCs are dumping money into insurance marketplaces

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Audience engagement startup Trufan raises $2.3M

Trufan, a startup selling tools helping marketers analyze their social followings and collect audience data, announced today that it has raised a $2.3 million seed round.

Despite raising a relatively small amount of funding ($4.1 million total), Trufan has already made two notable acquisitions. First, it acquired the SocialRank product and business in 2019, allowing it to offer capabilities like showing brands their most valuable social media followers. Then last year, it acquired Playr.gg, which marketers use to run giveaways that consumers enter by providing information such as their email addresses.

Across its products, Trufan says it has more than 10,000 free users and more than 600 paying customers, including Netflix, NBA, NFL, Sony Music and United Talent Agency.

Next up, the startup plans to integrate the two main products and launch a consolidated, privacy-compliant customer data and audience engagement platform with new branding and pricing. Co-founder and CEO Swish Goswami told me that the platform should be particularly attractive as regulators introduce new privacy regulations, Apple and Google add new restrictions to ad targeting based on third-party data and as consumers become more sensitive to how their data is used.

Trufan Founders

Trufan founders Aanikh Kler and Swish Goswami. Image Credits: Trufan

“People do not want to be tracked anonymously,” Goswami said. “People do not want their data taken away, but most of those people are attracted to the idea of data sharing if they get something in exchange.”

He added that it’s particularly important for brands to build up first-party customer data given the limitations of social networks: “You can have 50 million followers, but every time you post you don’t reach 50 million people.” If you’ve got 50 million email or phone numbers, on the other hand, you might actually reach most of those inboxes or phones.

In freemium marketing, product analytics are the difference between conversion and confusion

The new funding comes from Moneta Ventures, with Moneta partner Sabya Das joining Trufan’s board of directors. GP Ventures, Protocol Ventures and Athlete Technology Group also participated, as did angel investors including Innovative Fitness founder Curtis Christophersen, Utah Jazz forward Derrick Favors and Chicago Bulls forward Thaddeus Young.

“Trufan is miles ahead in recognizing and removing roadblocks in the customer data space,” Das said in a statement. “We are excited to be backing them because they truly are all-star founders with an incredible team alongside them, and we believe in their conviction and ability to solve the first-party data problem.” 

SocialRank sells biz to Trufan, pivots to a mobile LinkedIn

 

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African payments company Flutterwave raises $170M, now valued at over $1B

The proliferation of fintech services across Africa remains in full swing as investors remain bullish about the opportunities that abound in the sector. Today we behold another unicorn: African payments company Flutterwave announced that it has closed $170 million, valuing the company over $1 billion.

New York-based private investment firm Avenir Growth Capital and U.S. hedge fund and investment firm Tiger Global led the Series C round. New and existing investors who participated include DST Global, Early Capital Berrywood, Green Visor Capital, Greycroft Capital, Insight Ventures, PayPal, Salesforce Ventures, Tiger Management, WorldpayFIS 9yards Capital. 

The Series C round comes a year after Flutterwave closed its $35 million Series B and $20 million Series A in 2018. In total, Flutterwave has raised $225 million and is one of the few African startups to have secured more than $200 million in funding. 

Launched in 2016 as a Nigerian and U.S.-based payments company with offices in Lagos and San Francisco, Flutterwave helps businesses build customizable payments applications through its APIs.

When the company raised its Series B, we reported that Flutterwave had processed 107 million transactions worth $5.4 billion. Right now, those numbers have increased to over 140 million transactions worth over $9 billion. The company, which also helps businesses outside Africa to expand their operations on the continent, has an impressive clientele of international companies. Some of them include Booking.com, Facebook, Flywire, and Uber.

African fintech firm Flutterwave raises $35M, partners with Worldpay

Flutterwave says over 290,000 businesses use its platform to carry out payments. And according to the company’s statement, they can do so “in 150 currencies and multiple payment modes including local and international cards, mobile wallets, bank transfers, Barter by Flutterwave.”

While its website shows an active presence in 11 African countries, Flutterwave CEO Olugbenga Agboola, also known as GB, told TechCrunch the company is live in 20 African countries with an infrastructure reach in over 33 countries on the continent.

Last year was a pivotal one for the five-year-old company. Its second investment came just in time before the COVID-19 pandemic hit Africa, negatively impacting some businesses but not payments companies like Flutterwave.

Agboola says his company grew more than 100% in revenue within the past year due to the pandemic without giving specifics on numbers. It also contributed to its compound annual growth rate (CAGR) of 226% from 2018.  

According to the CEO, this growth resulted from an increase in activities in “COVID beneficiary sectors”  — a term used by Flutterwave to describe sectors positively impacted by the pandemic. They include streaming, gaming, remittance, e-commerce, among others. Agboola adds that the company plans to ride on these sectors’ growth and continue in that trajectory.

Besides, Flutterwave’s response in introducing the Flutterwave Store for merchants during pandemic-induced lockdowns was instrumental as well. The product, which went live across 15 African countries, helps over 20,000 merchants to create storefronts and sell their products online.

Image Credits: Flutterwave

Flutterwave wants to become a global payments company, and the Series C investment helps to reach that goal. The company says it plans to use the funds to speed up customer acquisition in its present markets. It will also improve existing product offerings like Barter, where it has over 500,000 users, and introduce new offerings. One such is Flutterwave Mobile, which in the founder’s words “will turn merchants’ mobile devices into a point of sale, allowing them to accept payments and make sales.”

In a statement, Agboola gives credit to the company’s more than 300 staff, investors, customers, and regulatory bodies like the Central Bank of Nigeria (CBN) for creating the backbone for Flutterwave’s success.

For some, it would come off as strange that the CEO mentioned the last stakeholder given the unfavourable and questionable regulations it has recently placed on fintechs in Nigeria.

Fintechs could see $100 billion of liquidity in 2021

However, Agboola thinks the reverse is the case. He makes a bold statement by saying that under the current CBN governor’s current administration, the Central Bank has shown a consistent regulatory framework that has allowed fintechs like Flutterwave to thrive.

“Flutterwave, for instance, launched when the governor just came in. We got our license and scaled our business because of a favourable regime that allowed it to be possible. There are so many trailblazing innovations that we don’t talk about a lot about Nigeria, like the BVN and the NIP system. Nigeria has consistently been at the forefront of payments innovation for over a decade, and all it was possible because of the forward-looking CBN policies,” he said.

On exits, acquisitions, and the billion-dollar club

One fintech company that has unquestionably championed payments in this timeframe is Interswitch. The payments giant is currently worth $1 billion after Visa acquired a 20% stake in 2019 and Flutterwave joins the company as the only fintechs in Nigeria to have reached that valuation. This number increases to four in Africa when including publicly traded African e-commerce company, Jumia and Egyptian payments company Fawry.

Flutterwave’s $170 million mammoth raise and its billion-dollar valuation represent a landmark achievement for the African startup scene. While the aforementioned companies’ valuations can’t be disputed, there are question marks on whether some are startups or others, African companies.

Interswitch, for instance, was founded in 2002, which doesn’t necessarily make it a startup despite still being private. Fawry was launched in 2007 but didn’t become a billion-dollar company until 2020, a year after going public. Jumia, albeit public, reached unicorn status as a private company in 2016; however, there are varying consensus if it is an African company or not.

Rising African venture investment powers fintech, clean tech bets in 2020

Unlike the others, Flutterwave checks all the boxes of what a billion-dollar African startup should ideally look like — founded by Africans in Africa while reaching a $1 billion valuation in fewer than 10 years.

Most stakeholders in Africa’s tech ecosystem knew this would happen, but the timing expected was later rather than sooner. After raising $35 million in a Series B in 2020, who would have thought Flutterwave was going to raise almost five times that amount the following round and be valued at more than $1 billion the next year? Maybe just a few.

Well, these numbers rarely matter to Agboola, as I ask him what he thinks of Flutterwave’s new growth metric. “I’ll say valuation is both art and science. At some point, we were also the most valuable African company at YC, but it’s not really a metric we’re focused on at Flutterwave because they move up and down,” he smiles. “Our key metrics have always been revenue, customer growth and retention.”

Aptly said, but as the company continues to grow, questions around profitability and exit will become more frequent.

Stripe acquires Nigeria’s Paystack for $200M+ to expand into the African continent

Paystack, another Nigerian payments company that is often compared to Flutterwave got acquired by Stripe for more than $200 million last year. At the time, there were also rumours of Flutterwave taking the same route, but this Series C raise suggests that the company is not looking to exit at the moment. However, if the YC-backed company indeed does, it might be through an IPO.

“Like every other startup, we’re thinking about ways to create exit tools for our investors. So, a listing is very much in our plans, but for now, we’re focused on giving the best value to our customers,” Agboola said. 

In the course of the company’s journey to this point, it has remained big on partnerships. In 2019, Flutterwave partnered with Visa to launch Barter and Alipay to offer digital payments between Africa and China. Then last year, the company announced a partnership with Worldpay FIS for payments in Africa.

Although Flutterwave has done this with bigger establishments, Agboola says the company will be looking to do the same with smaller companies, opening the doors to potential acquisitions.

“We believe in payments in partnership as you have to partner to scale. So, if in the course of making partnerships and scaling and we identify promising companies with a similar ethos and have our vision in mind, that is in making Africa a country, an acquisition isn’t off the table,” he said.

After capturing much of Sub-Saharan Africa, Agboola says Flutterwave’s next plan is to go live in North Africa. There, it will likely face competition from a local leader, Fawry, but that doesn’t matter. The African fintech market is large enough to accommodate multiple players.

That’s one reason why it has also been a popular bet with investors. The sector, which is both local and international investors’ top destination, attracted between 25% to 31% of the total VC funding last year from varying sources.

How African startups raised investments in 2020

But from the information on their websites, this is the first time Flutterwave’s lead investors —  Avenir Growth Capital and Tiger Global — are backing an African fintech startup. For the former, Flutterwave represents the first African startup in its portfolio, but Tiger Global is known to have invested in Nigerian media company iROKOtv and South African e-commerce company, Takealot.

Via their partners — Jamie Reynolds of Avenir Growth Capital and Scott Shleifer of Tiger Global, both firms said they’re backing Flutterwave on its quest to build a global and world-class payments company.

Looking into the future, Agboola insists that the company’s focus remains to support its 290,000 merchants and help them build global businesses.

“We look forward to increasing our investments across the continent and deepening the impact our platform has on lives and livelihoods as we take more businesses in Africa to the world, and at the same time continue to bring more of the world to Africa,” he said.

All B2B startups are in the payments business

 

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Capsule gets $1.5M to build ‘super simple’ decentralized social media

Capsule‘s plan to launch a super simple decentralized social media platform which is safe from censorship by Big Tech has advanced another stage: The nascent startup has closed a seed round of funding ($1.5M) led by Beacon Fund, a dedicated crypto fund by Polychain Capital — which is itself focused on startups building on Dfinity’s decentralized network for next-gen ‘open’ apps (aka, the Internet Computer).

As we reported in January, the idea for Capsule started with a tweet that almost immediately pulled in a pre-seed raise of $100k. That’s now been topped up with seed financing to get a prototype to market later this month.

Mobile apps are also on the cards and the funding will be used to build out Capsule’s team as well (currently it’s around four people).

Capsule founder Nadim Kobeissi, a cryptography researcher who previously authored the open-source E2E-encrypted desktop chat app Cryptocat, says they’re on track to put out an MVP this month — once they’ve made a few tweaks to the infrastructure.

“The prototype is ready,” he tells TechCrunch. “We’re investigating switching some of the infrastructure from GUN to IPFS [InterPlanetary File System; aka a p2p hypermedia protocol], and improving the user interface. We could launch an MVP now but are choosing to hold off by a few weeks.”

Cryptocat author gets insanely fast backing to build P2P tech for social media

Polychain Capital outted its Beacon Fund last September. The $14.5M investment vehicle is funded by Polychain, Andreessen Horowitz, and the Dfinity Foundation — and aims to support entrepreneurs and teams building on Dfinity’s the Internet Computer (TIC); aka a serverless architecture for natively hosting software and services (which it refers to as the “first blockchain computer that runs at web speed with infinite capacity”).

Kobeissi’s original concept for Capsule, meanwhile, was to create self-hosting microservices. He says that hasn’t changed — but sees potential for TIC to help solve some specific technical issues.

“The Internet Computer will hopefully be helping us build a ‘customized mini-blockchain’ to solve two issues with Capsule: Global authenticated timestamps for posts as well as a root of trust for user’s authentication keys for posts,” he says. “We were looking to solve these issues somehow before this investment and were already considering Dfinity as the potential solution given that it has a programming language that allows for building these ‘custom mini-blockchains’ as we see them.”

“The rest will still be a self-hosting, self-contained, precisely engineered micro-services concept, with IPFS (previously GUN) as a decentralized database/connectivity back-end,” he adds.

Given the intent with TIC is to hosts all sorts of decentralized apps it’s possible — indeed, likely — that a bunch of decentralized social media plays will emerge. Last year, for example, Dfinity launched a proof of concept for an ‘open’ version of the professional social network, LinkedIn — which it punningly called ‘LinkedUp’.

It went on to demo a TikTok clone — and to open TIC up to outside developers last summer. So there could soon be a bunch of apps built atop its network touting social networking services without the meddling hand of Big Tech. Where, then, does Kobeissi see Capsule’s USP — i.e. if/when there’s a sea of decentralized ‘mega-apps’ that can also claim resilience to censorship?

“We think Capsule’s value will lie in its exceptional user experience, quality, performance, ease of use and high quality engineering that draws on advanced technologies such as TIC and IPFS without saddling bloat,” he says. “Others may use the same technology but I think we can do a good job on building something simple that just works and that is a pleasure to use.”

“Ultimately, I think that Capsule will be to Facebook what healthy, vegetarian diets are to a McDonald’s diet,” he adds more generally of his intent for the service. “Capsule may be a social media service but its relationship with its users and developers will be fundamentally different than Big Tech platforms.”

Below are a few screenshots showing current mock-ups of the Capsule interface.

[gallery ids="2122777,2122775,2122776"]

DFINITY raises $102M from a16z and Polychain for a decentralised ‘Internet Computer’ to rival AWS

Dfinity launches an open-source platform aimed at the social networking giants

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Calixa raises $4.25M seed to manage ‘bottom up’ sales approach

Many companies have turned to self-serve sales, which may encourage people to try freemium or open source versions of a product. Some percentage of these users may turn into paying customers, and in the best case will act as leaders to bring a product into their organization.

Calixa, an early stage startup believes that this type of sale, known as a bottom up sales motion, requires a new kind of tool to manage the process, and today it announced a $4.25 million seed round.

Kleiner Perkins led the round with help from Operator Collective, Liquid 2 Ventures and a bunch of individual investors. The round closed in February 2020, but is only being announced today.

Calixa co-founder and CEO Thomas Schiavone says the roots of the company began when he was working at Twilio in 2010, and saw how powerful it was for developers to purchase tooling themselves. And an idea began to form that CRM tools like Salesforce weren’t built to deal with this kind of sales motion.

“What I realized [at Twilio] was that developers were just signing up more and more every day, and that if you really wanted to stay on top of what was going on and try to effectively grow and retain those accounts, you weren’t looking in Salesforce,” Schiavone told me.

He said that he decided to start Calixa in 2019 to solve this problem once and for all. While this kind of user-driven, bottom up sale has been in place at software companies for years, he still saw a dearth of tools for dealing with its unique qualities in one place.

“We saw a great opportunity to build something that democratizes […] running a bottom up company by not only giving all customer facing teams the ability to see what’s going on with customers, but also take action,” he said.

This ability to manage the process and maybe extend a trial, issue a credit or even reset a password while letting these teams see and understand the underlying customer data was what set it apart from traditional CRMs.

“The central thesis here is that Salesforce and other CRMs, don’t have that data. They’re too divorced or too much in this rigid world of the typical sales model, and you need something different to be an effective company,” he said.

To use the product, you simply sign up and then link the various accounts the product needs to compile the data it needs. It uses various API connectors to make this happen, and all it requires is that you enter your user name and password to access the accounts and begins pulling together the data.

Bucky Moore, a partner at lead investor Kleiner Perkins says that the pandemic has accelerated the move to a bottom up approach as in person sales models have been impossible. “Core to the success of this strategy is a data-driven understanding of each customer and user. By democratizing this capability to companies of all sizes, Calixa’s opportunity is to become the de-facto customer operations platform for the modern software business,” Moore said.

Schiavone reports the company has 7 employees spread across the U.S., Canada and Columbia. He says that as he hires, he will have offices in cities close to his clusters of employees, but he sees a hybrid approach where employees can decide just how much they want to be in the office.

The company spent last year building the product and working with 21 beta customers. The product will be generally available starting today.

In freemium marketing, product analytics are the difference between conversion and confusion

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Could Valo Health become one of Flagship Pioneering’s biggest companies yet?

The investment firm Flagship Pioneering has incubated a lot of life sciences companies since it was founded in 2000. In fact, while a general partner with Flagship Pioneering over the last 15 years, David Berry has started more than 30 companies, five of which trade publicly right now: Seres Therapeutics, Sensen Bio, Evelo Biosciences, T2 Biosystems, and Axcella Health.

Berry is often a company’s first CEO, then transitions out of the company within 18 months. But he has no plans to leave his post as CEO of Valo Health, a three-year-old, Boston-based, 110-person drug discovery company that Berry and Flagship seem to think could become one of the firm’s most important companies yet. That’s notable, considering that Flagship incubated 11-year-old Moderna, which currently boasts a $50 billion market cap thanks in large part its coronavirus vaccine.

Perhaps it’s no surprise, given Berry’s and Flagship’s track record that Valo has attracted believers. Notably, today it is announcing a fresh $110 million in extended Series B financing from Koch Disruptive Industries that brings the round total to $300 million and the overall amount the young company has raised to more than $450 million.

Still, given that there are hundreds of drug discovery companies in the world seizing on the latest advancements in AI, machine learning and computation, it’s easy to wonder what’s so special about this one. We got Berry’s take during a chat with him yesterday, parts of which we are featuring below edited for length and clarity.

TC: Valo is trying to accelerate the creation of drugs, and it has a computational platform called Opal to do it faster and more effectively than many rivals. Is there a way to make it clearer to outsiders why this platform is so unique? 

DB: First, from day one, we were operating on a different scale [than past Flagship Pioneering companies]. Typically, when you look at Flagship companies, there’s an [exclusive] initial commitment by Flagship of plus or minus $50 million. But because of the scale of the opportunity that we saw ahead of us with Valo, we actually started out by bringing in external financing partners as part of a Series A that was right around $100 million.

[Also unique is the] breadth of what we’re trying to achieve through our systematic approach to R&D, as opposed to a targeted approach to thinking about it. There’s been an historical challenge in life sciences in that companies are primarily viewed based on what their lead therapeutic asset looks like. But if you have the potential to change the scope, the scale, the potential, the speed, the probability of success, [and] the cost of developing drugs, you’re not going to look like a typical therapeutics company.

TC: So your focus on multiple therapeutic areas at once — oncology, neurodegenerative, and cardiovascular diseases — is a distinguishing element of the company. How are you tackling so much simultaneously?

DB: The legacy biopharma model is basically this point-to-point system [where up to 15 groups] do some work, and then they basically take the result of it and they throw it over a wall to another group that has its own framework. The model is intrinsically disintegrated. They use mice. They use cell lines. They use extracted organs. And those just don’t represent what a full, intact living human actually looks like, and they don’t reflect what the disease looks like in the context of that human.

What we’re doing is what I would call that next transformation . . . enabled by high-quality human-centric data [that we analyze] in an end-to-end, but componentized manner. What I mean by that is we’ve created a single underlying architecture so that we’re using the same species, we’re using the same decision-making criteria. we’re using the same KPIs throughout the entirety of the R&D cascade, [and] we’re using the same bases of the core computation. We’re using the same self-reinforcing model to learn as we go. We have a local expression, because we have to perform a certain set of tasks in order to comply with the regulatory environment. But by doing it in this way as we do those tasks, we’re learning a lot more and we’re keeping that human centricity, so when we uncover, for example, a new target in cardiovascular disease or neurodegenerative disease, it’s based on our human data. It’s not based on a dog model or mouse model or something along those lines. It’s not based on cells adapted to plastic in a lab.

TC: Where is that human data coming from? Is the data you’re feeing into Opal somehow better or different than what others are using?

DB: We haven’t we haven’t yet disclosed where our datasets are coming from, but we have reason to believe that the scale and quality of the data sets are substantially high. We have not seen data sets that compare in scope and size. We have announced one subset of our data lake, but I would call it a small subset through a data partnership we announced earlier. [Editor’s note: this is with a company called Global Genomics Group, which gives Valo access to a cardio-metabolic dataset.]

TC: You’ve been at this for a few years. Have you had any major breakthroughs?

DB: I believe what we’ve done over the last two years is build an incredibly strong technology basis and foundation [for] transformation. We’ve announced four therapeutic programs that we’ve launched thus far, and each represents not only something where we’ve been able to develop a therapeutic candidate in very short periods of time, but we’ve also been able to overcome historical barriers that made developing those sorts of candidates much more difficult, and we were able to overcome those barriers in weeks.

TC: Can you elaborate on one of those therapies to underscore your point?

DB: One of the programs we announced is called NAMPT. What was really interesting about it is it’s a very powerful cancer target. The downside of it is it’s known to cause a very particular toxicological effect — it causes retinal toxicity — and we wanted to figure out whether we could get the benefit of the molecule by targeting the target but avoid getting that molecule into the retina, which required a very specific design. Long story short, in a couple of weeks, we were able to achieve a molecule that had enough differentiation between the blood in the eye that it shouldn’t have any substantial effects.

TC: Are any of these four candidates heading into the market any time soon?

DB: I would love them to be in the market soon, but they’re not yet there. We are expecting that with the financing in hand, we should ultimately have molecules in clinical trials, and ultimately, we’re very excited to be able to transition some of the drugs that we are developing into [viable offerings in the market].

TC: Would you sell then sell these to a big pharma company, or would Valo be marketing these itself?

DB: Both are viable potential paths. Because we’re developing a number of different therapeutics, it gives us flexibility in the way we think about our ultimate business model.

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Meet SeekOut, a profitable diverse hiring startup that just raised $65M

Most companies claim they want a diverse staff but at the same time, complain they don’t know how to go about recruiting more diverse candidates.

Enter SeekOut — a startup that is out to give companies no excuses with its AI-powered platform.

A group of former Microsoft executives and engineers —  Anoop Gupta, Aravind Bala, John Tippett, Vikas Manocha — founded SeekOut in 2016. The team started out building a messaging platform that provided a deep level of information about people that others might be emailing. When they realized that what customers really were after was the information they were uncovering, and not so much the messaging capability, the company pivoted in 2017.

Today, SeekOut’s goal is to help talent acquisition teams to recruit “hard-to-find and diverse talent.” The startup wouldn’t name names but said it is working with 6 out of the 10 “most highly valued companies” by market cap in the U.S. Overall, it had about 500 customers as of January across a range of industries from technology to pharmaceutical to aerospace and defense to banking.

Over the years, SeekOut has built out a database with hundreds of millions of profiles using its AI-powered talent search engine and “deep interactive analytics.” It finds talent by scouring public data and using natural-language and machine-learning technologies to understand the expertise of each candidate and build a complete 360-degree view of each potential employee. Specifically, it blends info from public profiles, GitHub, papers and patents, employee referrals, company alumni, candidates in ATS systems.

While SeekOut initially focused strictly on technical talent, it has since broadened its base to helping recruiters and sources find more diverse candidates in general as well as people with simply “hard-to-find” skill sets. And it claims to do it with “unprecedented speed and precision” via a blind hiring method designed to reduce bias. SeekOut then gives recruiters a way to engage with candidates instantly by getting access to the right contact information in a “single click.”

SeekOut co-founders (left to right) Anoop Gupta, Aravind Bala, Vikas Manocha and John Tippett. Image courtesy of SeekOut

The startup is hitting such a sweet spot that it attracted the attention of Tiger Global Management, the global investment firm that just led a $65 million Series B that values SeekOut at around $500 million.

Existing backers Madrona Venture Group and Mayfield also participated in the financing, which brings SeekOut’s total funding since inception to $73 million.

In a world where so many startups have yet to turn a profit, SeekOut is a refreshing exception. Since its $6 million Series A raise in May 2019, the SaaS company says it has grown its subscription revenue (ARR) by “more than 10-fold” (although it declined to reveal hard revenue figures). And it’s been profitable, or cash-flow positive, each of the last two years.

Gupta, who serves as the company’s CEO, said its platform (dubbed Talent-360) helps companies not only find diverse talent, but helps them improve retention by finding the “right” candidate to begin with.

While there was a pause almost across the board in hiring when the COVID-19 pandemic began, the emergence of remote work as a new normal has forced companies to think more creatively about hiring — especially since they are not constricted by geography as in the past — according to Gupta.

“This freedom also means their need for tools like SeekOut increased and we have seen our business take off as a result,” he told TechCrunch. “The focus on diversity hiring and our unique approach to finding the talent and offering blind hiring features has super charged the adoption.”

SeekOut’s Insights dashboard. Image courtesy of SeekOut

Mario Linares, head of talent acquisition at Aviatrix, acknowledges that competition for talent among software companies is fiercer than ever

“SeekOut’s innovative AI-powered search, global power filters, diversity filters, and talent pool insight have been critical components of Aviatrix’s global growth plan,” he said in a written statement.

For Tiger Global Partner John Curtius, SeekOut’s platform has the potential “to transform the world of HR.”

“We are impressed by the customer love and traction SeekOut is experiencing,” he said in a written statement.

Looking ahead, SeekOut plans to use its new capital to speed up the development and expansion of its platform and build customer success, engineering, sales and marketing teams in Seattle. And it plans to use its own platform to do it.

The company also plans to double its headcount of 50 over the next year.

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Fueled by the pandemic, Daily raises $15M Series A for its real-time video platform

Daily, the makers of a developer platform for real-time audio and video, has been booming in recent months — in part, due to the pandemic’s impact on remote work, virtual events, telehealth and more. Over the past year, Daily saw around a 20x increase in the number of paying customers and a 30x increase in revenue, it says. Though the team was initially hesitant to raise funds in light of this growth, they have now closed on $15 million Series A funding.

The new round was led by early Stripe employee-turned-investor Lachy Groom, who became connected with the startup via his portfolio company Interval.com, a Daily customer. Tiger Global, other angels and most of Daily’s seed investors also participated, bringing Daily’s total raise to date to $22 million.

Daily itself was founded in 2016 as a big bet on video, and WebRTC in particular, but has been boosted by the pandemic and the market shifts that resulted.

“We believed back then and have believed for a while that video would be everywhere. It would be a crucial part of how we live and work and engage with all sorts of products,” explains Daily co-founder Nina Kuruvilla. “We thought that this shift would require new platforms and tools to make working with video as easy as possible,” she says.

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As it turns out, Daily’s bet was a good one — though it took a few years and a global pandemic to see the hockey stick growth that startups aspire to.

Today, Daily is used by a number of companies focused on the future of work, like virtual office startup Tandem, virtual HQ platform Teamflow, presentation startup Pitch, pair programming tool GitDuck, virtual recruiting startup Flo Recruit and others. It’s also been adopted by enterprises in spaces like healthcare and customer support.

With Daily’s platform, developers can either use a prebuilt UI to integrate video calls with just two lines of code, or they can opt to build out their own custom video UI and UX. With the former, developers can embed a video call widget that features video chat, screen sharing and recording capabilities. Meanwhile, the latter gives developers more control over the layout, workflow and video and audio tracks.

Image Credits: Daily website

“Video is a big challenging problem — real-time video and real-time audio. You need some set of tools to help you do it — especially if you’re going to roll it out quickly and you’re going to then scale it,” explains Daily co-founder Kwindla Kramer. “We give you the APIs that let you develop really quickly, [that are] flexible enough for you to keep improving the product over time. And then we also have this global infrastructure that makes it possible for our customers to scale without having to, you know, build a whole equivalent of AWS themselves,” he says.

With Daily, developers gain access to servers spread out in different regions all over the world, to protect against latency issues. Daily also does the heavy lifting in terms of making sure the product works well across all platforms and devices.

From a security and privacy standpoint, it’s HIPAA compliant and doesn’t capture customer data. It’s also transparent about when and how encryption is applied. For example, Daily’s peer-to-peer calls are end-to-end encrypted, while calls routed through media servers are encrypted to and from the servers, but are decrypted on the servers in order to do things like forwarding and recording.

The technology itself is flexible, too. Daily lets customers specify if they don’t want audio and video packets to move outside the EU, for regulatory reasons. Customers can choose to integrate with their preferred transcription engine or other major recording and live streaming APIs.

Through Daily’s developer dashboard, customers can view call quality insights and visualizations.

Image Credits: Daily

To attract customers, Daily kept its pricing model simple. It has introductory plans for smaller customers that grow to the larger “Scale” plan at $199 per month for 10,000 minutes. From there, customers just pay an additional rate per minute as they grow.

The company was already seeing steady demand for video ahead of COVID, particularly in areas like remote work and healthcare. But COVID accelerated those use cases and impacted others, as well. After March 2020, the world quickly woke up to the need to prioritize video.

“Productivity and the future of work is rapidly changing. Online events, healthcare, customer support, interactive live streaming. IoT and robotics use cases. Social and gaming,” Kuruvilla says, rattling off the various Daily use cases.

During the first six months of the pandemic, Daily’s adoption grew as customers looked to get up-and-running with video quickly. Later, they began to shift toward innovating around what it means to build a digitally native service with video.

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That’s helped to advance new models for how video can be used — like virtual fitness classes where people not only see the instructor, but also their friends who signed up with them. Or hybrid video and audio experiences for live events; real-time video conversations during livestreams; live e-commerce events; and more.

The company believes that this leap forward means Daily has a future even when, post-pandemic, things “go back to normal.”

“I think some traditional video call usage is probably going to stagnate or go down, but all of these new use cases just feel like they’re ramping up — because it’s early innings and they’re really genuinely useful,” notes Kramer.

The team says they chose to work with Lachy Groom because — unlike the dozens of investors they pitched during their seed stage who thought video was a niche market — Lachy understood what Daily was doing.

“It’s only after we got to know Lachy that we really felt like there was another investor, like [seed investor] Jenny [Lefcourt from Freestyle], who really understood what we needed to do as a company to be the best possible company we could be. And that was worth raising a round with,” says Kramer.

With the additional funds, Daily will hire more engineers and focus on various product initiatives around call quality and reliability, expanding its global infrastructure and supporting larger calls and more hybrid use cases.

In addition to Lachy Groom and Tiger, Daily is backed by Freestyle Capital, Root Ventures, Y Combinator, Slack Fund, Moxxie Ventures, Haystack Ventures, TenOneTen Ventures, Ground Up Ventures, Offline Ventures, Work Life Ventures, Basement Fund, Compound, and numerous angel investors.

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Demostack announces $17.3M investment for demo building platform

Demostack, an early stage startup that wants to make it easy for companies to build software demos, announced $17.3 million in funding today. The company also announced it was coming out of stealth.

That investment breaks down into a $13.3 million Series A led by Bessemer Venture Partners with help from GTM Fund and several individual investors. They also announced a $4 million seed from last December led by Amiti Ventures with participation from Operator Collective, Cerca Partners and a slew of individual investors. All the seed investors also participated in the A round, according to the company.

Software companies of all types face challenges in building a quality demo, one that doesn’t expose actual customer information, yet shows all of the functionality in a reasonably realistic way. It’s a problem that co-founder and CEO Jonathan Friedman experienced in his previous job and he wanted to do something about it.

“We’re building a perfect demo environment. And what that means is that it’s one that is controlled by sales or marketing. […] There is no need for [engineering] at all, and it’s customized for each prospect by default,” Friedman explained.

He said that it removes that anxiety that the demo won’t work, or that you will expose data you’re not supposed to. “Demo anxiety is real. Just having to worry about PII (personally identifiable information), and having people logging on and coming in and creating stuff within our production environment was unsustainable,” he told me.

Friedman founded Demostack to change that. They provide a full demo building tool that starts with a recording of the environment, so it looks and feels like the live product, and you can create auto customization with variables like customer name that link to the CRM tool and pull in information for you as you build the demo for a particular prospect.

It’s a solution that caught the attention of Adam Fisher, partner at lead investor Bessemer Venture Partners. “Demostack gives every software business a powerful competitive advantage, allowing them to better engage their prospective customers, doing away with old school temperamental demos,” he said in a statement.

Demostack already has 20 employees with plans to triple that number by the end of this year. He said the company is already embracing diversity among its early employees, and sees this as an important building block.

“One of the main reasons that we wanted to lean into this early is because being a diverse company is not a bonus. It’s not like, ‘Oh I’ll do this to make people happy about me’. You can’t understand how people from different walks of life see reality. Everyone sees a different slice of reality. If you can’t grasp that you will never build a company that is successful,” Friedman said.

The company launched last September and released an early version of the product in February. Today, Demostack is publicly unveiling the company, although it doesn’t expect to have the complete product ready for distribution until mid-year.

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