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Rakuten has SoftBank in its sights

Published November 9, 2018

This week, I’ve tried to do something new at TechCrunch with this experimental column — getting obsessed about a topic broadly in tech and writing a continuous stream of thoughts and analysis about it.

With my research consultant and contributor Arman Tabatabai, we’ve covered two topics: Form Ds, the filing that startups usually submit to the SEC after a venture round closes (although increasingly do not), and SoftBank, which faces all kinds of strategic pressure due to its debt binging. If you missed the other episodes, here are links to the editions from Monday, Tuesday, Wednesday and Thursday.

We are experimenting with new content forms at TechCrunch. This is a rough draft of something new — provide your feedback directly to the authors: Danny at danny@techcrunch.com or Arman at Arman.Tabatabai@techcrunch.com if you like or hate something here.

Today, one final round of thoughts on SoftBank and Rakuten (heavily written by Arman) and a lengthy list of articles for your weekend reading.

The Rakuten factor complicates SoftBank’s strategy

BEHROUZ MEHRI/AFP/Getty Images

Understanding SoftBank’s competitive strategy requires a bit of a deep dive into Japanese e-commence giant Rakuten.

Rakuten has been struggling to compete with Amazon and others like SoftBank’s Yahoo! Japan. So at the end of 2017, Rakuten announced it would be entering the telco space, hoping that operating its own network could generate user growth through better incentives around mobile shopping, streaming and payments.

Today, Japan’s telco space is a relatively cozy oligopoly dominated by NTT DoCoMo, au-KDDI and SoftBank. A major reason why Rakuten feels it can succeed where others have failed to break in is because it has the government on its side.

Rakuten’s plan to offer prices at least 30 percent lower than incumbent rates has led to favorable treatment from Prime Minister Shinzo Abe’s government, which has been looking for ways to stimulate market competition to force lower the country’s high phone prices.

Though a new entrant hasn’t been approved to enter the telco market since eAccess in 2007, Rakuten has already gotten the thumbs-up to start operations in 2019. The government also instituted regulations that would make the new kid in town more competitive, such as banning telcos from limiting device portability.

Rakuten’s partnerships with key utilities and infrastructure players will also allow it to build out its network quickly, including one with Japan’s second largest mobile service provider, KDDI.

Just last week, Rakuten and KDDI announced an agreement where Rakuten will help KDDI utilize its payment and logistics infrastructure as KDDI turns its head toward e-commerce and payments, while KDDI will give Rakuten access to its network and nationwide roaming services, allowing Rakuten to provide nationwide service as its builds out its own infrastructure.

The agreement with KDDI is especially scary for SoftBank, the country’s third biggest telco and one of Rakuten’s e-commerce competitors, and whose customers seem most vulnerable to churn. The partnership also makes it seem even more likely that SoftBank’s competitors are looking to push it out of the market or turn into a dud its upcoming mobile segments IPO.

While Rakuten’s head-first dive into the market won’t ease investors into an IPO, it’s important we note that Rakuten is targeting a much smaller market share than the incumbents, targeting 10 million subscribers by 2028, a number lower than the company’s original 15 million subs goal and significantly lower than the 76 million, 52 million and 40 million subscribers NTT, KDDI and SoftBank (respectively) hold currently. And even with its agreements, Rakuten faces a serious and expensive uphill battle in building out its network infrastructure quickly enough to compete.

Ultimately, Rakuten’s telco initiative is a splash, but one that seems like it will merely make its competitors wet and not drown them. For SoftBank, it is an annoying distraction on its telco IPO roadshow, but a distraction that is easily explained to potential investors.

SoftBank growth over the past two decades

Rajeev Misra. Photo by Drew Angerer/Getty Images

Changing gears from Rakuten, emails from readers this week asked us to look deeper into SoftBank’s performance over the last two decades. As we did so, it became clear that SoftBank has had a long history of price competitions and new entrants across its businesses, and it has proven its ability to operate and consistently grow earnings.

Since 2000, SoftBank has grown earnings at a ~30 percent CAGR and experienced revenue growth in all but one year. When eAccess did enter the telco market and picked up four million subscribers, SoftBank bought it and integrated it into its own system.

As we discussed earlier this week, despite having always held on to a clunky amount of debt, SoftBank has managed to deliver consistent growth by making sure its revenue and operating growth outpaced the upticks in its debt and interest expense.

A great example of this came after SoftBank’s acquisition of Vodafone in 2006, when it saw a huge spike in its interest expense, but also in its operating income.

Over the following five years, SoftBank managed to reduce its interest expense at an annual rate of 12 percent while growing its operating income at 16 percent. And regardless of its debt balances, SoftBank has always seemingly been able to secure funding one way or another, as shown by its ability to raise $90+ billion for the Vision Fund in less than a year from when plans for the fund were first reported.

The Vision Fund itself started as a way for SoftBank to continue to invest while its balance sheet was tight due to nearly back-to-back massive acquisitions of Sprint and Arm. Just look at how Rajeev Misra, who oversees the Vision Fund, discussed its creation in an interview with The Economic Times:

We had just bought ARM in June for $32 billion and Masa felt we are on the cusp of a technology revolution over the next 5-10 years with machine learning, AI, robotics and the impact of that in disrupting every industry – from healthcare to financial services to manufacturing.

We felt the world was going through a new industrial revolution. We were constrained financially given that we just did a $32-billion acquisition.

SoftBank, historically over the last 20 years, has invested from its own balance sheet. So, we had two options.

Either monetise some of the gains we made in Alibaba which we decided has a lot more upside… Alibaba has more than doubled in the last 12 months. So we decided to keep it which turned out to be good decision. The second option was to go out and raise money and co-invest with others. We prepared a presentation, went out, and by god’s grace we raised the fund.

Even before the Vision Fund, SoftBank has always had a strategy to make big bets in industries of the future. And while many have failed, the several that have paid off, like its $20 million investment in Alibaba, had massive cash outs that have driven consistent earnings growth for decades. SoftBank seems to be banking its future on the same strategy and, frankly, it’s unclear how much they even care about how competitive their telco is, as shown by this exchange in the same interview with Misra:

Question: What about sectors like telecom?

Misra: Let the dust settle.

What’s next

Our obsession with SoftBank this week is probably going to subside, and we are in the market for our next deep dive topic in tech and finance. Have ideas? Drop us a line at danny@techcrunch.com and arman.tabatabai@techcrunch.com

Thoughts on articles (i.e. weekend reading)

Photo by Darren Johnson / EyeEm via Getty Images

The CIA’s communications suffered a catastrophic compromise. It started in Iran. This is a great follow-up from Yahoo News’ Zach Dorfman and Jenna McLaughlin on one of the most important espionage stories this past decade. The CIA, using an internet-based communications system to connect with spies and sources in the field, failed to keep the security of the system intact, leading to the dismantling of its Iranian, Chinese and potentially other espionage rings. This article advances the story as we know it from the New York Times’ original piece, and Foreign Policy’s excellent follow up also written by Zach Dorfman. Definitely worth a read from a security/technical audience. (3,200 words)

The $6 Trillion Barrier Holding Electric Cars Back. Don’t read — the answer is infrastructure. (1,000 words, but should be one)

The Rodney Brooks Rules for Predicting a Technology’s Commercial Success. A a good reminder that some technologies are much closer to reality than others, and that the key difference between them is our collective experience handling the technology. Rodney Brooks is the right person to cover this subject, although one can’t help but feel that every example is Musk-inspired. (2,800 words)

Uber’s economics team is its secret weapon by Alison Griswold & Soon there may be more economists at tech companies than in policy schools by Roberta Holland, both in Quartz . Griswold does a great job giving an overview of how Uber is using economists not just to improve its product for end users, but also to shape the discussion of public policy around the company. Clearly, Uber is not alone; as Holland notes in her piece, academic economists are very popular in Silicon Valley right now, with salaries that can match the top machine learning experts. (2,750 words and 1,200 words, respectively)

The future’s so bright, I gotta wear blinders. A short piece by Nicholas Carr fighting back against the notion that computing is still “at the beginning.” Many of our devices and pieces of software are already decades old — if they haven’t had an effect on human behavior or productivity, when are they going to? A useful antidote to some ideas we hear from the Valley every single day. (900 words)

The future of photography is code. Yes, yes, I am very late to this — blame Pocket disease. TechCrunch’s own Devin Coldewey writes a candid essay on the transition from improving photography through hardware like lenses to improving photos through computation. The future is looking very bright for beautiful photos, indeed. (2,400 words)

Freedom on the Net 2018 | Freedom House. And if you are looking for some depressing news, Freedom House’s report (which I am also a bit late to) is dreary. China is now increasingly the source of authoritarian internet control technology, and countries across the world are backtracking on internet freedom (including the U.S.). Sobering, but with so much riding on the openness of the internet, we all need to pay attention and build the kind of future for this technology that we want. (32 page PDF with exec summary)

Reading docket

What we are reading (or at least, trying to read)

Articles

Tech C.E.O.s Are in Love With Their Principal Doomsayer – Nellie Bowles writes about Yuval Noah Harari.
The New Yorker piece called Why Doctors Hate Their Computers (which has been delayed since my paper copy of the New Yorker got eaten by the USPS).
A new report about China’s military and its deep connections into American academic research

Books

Eliot Peper’s new science fiction novel Borderless
Daniel J Hopkins’ The Increasingly United States (about how U.S. elections are more national and less local than ever before).

LinkedIn Learning now includes 3rd party content and Q&A interactive features

Published November 9, 2018

LinkedIn, the Microsoft-owned social network for the working world with some 580 million users, took a big step into professional development and education when it acquired Lynda.com for $1.5 billion and used it as the anchor for LinkedIn Learning. Now, with 13,000 courses on the platform, LinkedIn is announcing two new developments to get more people using the service. It will now offer videos, tutorials and courses from third-parties such as Treehouse and the publishing division of Harvard Business School. And in a social twist, people who use LinkedIn Learning — the students and teachers — will now be able to ask and answer questions around LinkedIn Learning sessions, as well as follow instructors on LinkedIn, and see others’ feedback on courses.

Unlimited access to LinkedIn Learning comes when a person pays for LinkedIn’s Premium Career tier, which costs around $30/month, or when a company takes an enterprise team subscription for the Learning service. Today, LinkedIn tells me that it has around 11,000 enterprise customers; it doesn’t break out how much traffic it has overall on LinkedIn, but says that there has been a 64 percent growth in paid learners since the start of 2017 — a number that it’s clearly looking to boost with these new features.

James Raybould, the director of product for LinkedIn Learning, said that the third-party expansion will come slowly at first, with a handful of partners getting access to integrate with LinkedIn Learning. Over time, this could expand to be a public API for anyone to integrate content, he added, but for now, LinkedIn is doing the curating.

Notably, he also said that LinkedIn itself is not planning on curtailing the amount of content it will continue to produce for Learning: it’s currently adding more than 70 new courses each week on average, he said.

The content in this first wave of third-party providers feels like a natural extension of the influencer-based content that LinkedIn has been running in its main newsfeed: it runs the gamut from actual courses to learn new skills in specific disciplines, to the more nebulous area of professional development.

The first group includes Harvard Business Publishing (e.g. leadership development courses from Harvard Business School’s publishing arm); getAbstract (a Blinkist-style service that provides 10,000+ non-fiction book summaries plus TED talks); Big Think: 500 short-form videos on topics of the day (these are not so much “courses” as they are “life lessons” — subjects include organizing activism and an explainer on how to end bi-partisan politics); Treehouse, with courses on coding and product design skills; and Creative Live, with courses and tutorials for professionals in the creative industries to improve their skills and business acumen.

The fact that LinkedIn is adding more learning material that’s a natural extension of the kind of content it already offers to users in their timelines is not the only parallel between main LinkedIn and LinkedIn Learning. Raybould said that to help users discover content that might be most interesting to them, it uses data about what users browse and click on in the regular site.

“We have rich information about the network, including on engagement,” he said, and that helps LinkedIn’s algorithms suggest what to populate in individual learning libraries.

This is also, presumably, one of the reasons why third-parties will want to integrate: to get new audiences that are more targeted to the kind of content they are producing.

“At Harvard Business Publishing, we work to create the world’s best learning experiences to help organizations discover new ways to solve their most pressing leadership development challenges,” said Rich Gravelin, director of Partnerships and Alliances at Harvard Business Publishing, in a statement. “As an inaugural partner in the LinkedIn Learning Content Partner Program, we are bringing rich leadership development content to professionals across the globe, helping them navigate today’s complex business landscape. Thanks to the robust platform that LinkedIn Learning has built, we’re able to meet learners where they are and provide them with the unique and personalized learning experiences they need to succeed in their organizations.”

The social features also follow this model. Last year, LinkedIn rolled out a mentorship product across selected markets to pair users with people who steer them on their career development. That product set a precedent for how LinkedIn might use its wider social network and communication features to engage users in different ways, in the name of professional development.

The addition of Q&A features follows on from that, giving those taking courses or watching videos a way of interacting and following up with those who are doing the teaching. Adding that it could see more engagement across the whole of the Learning product.

It’s a surprise, in a way, that it’s taken this long for LinkedIn to add an interactive Q&A feature, considering that direct messaging and users interacting with each other has been a cornerstone of the product. On the other hand, it will be interesting to see if it proves to be a compelling enough feature to bring in more users to LinkedIn, luring them away from the Udemys and Skillsofts of the world.

Sneaker marketplace GOAT announces an AR-centric Black Friday giveaway

Published November 9, 2018

Black Friday giveaways have become a tradition for online sneaker marketplace GOAT. Today it’s announcing the details of this year’s campaign, which will be its first to incorporate augmented reality.

Director of Communications Liz Goodno described this as “the largest digital sneaker event of the year.” The company says it will be offering more than 1,000 prizes, including sneakers like the Air Jordan 1 Retro High OG Shattered Backboard, KAWSx Air Jordan 4 Retro Black, Pharrell x BBC x NMD Human Race Trail Heart/Mind, plus curated sneaker packs and up to $10,000 in GOAT credit.

You can enter the drawing anytime between now and 11:59pm Pacific on Thursday, November 22, with the winners notified at noon on Black Friday.

All participants will receive 100 tickets, but you can earn bonus tickets by visiting locations on an interactive GOAT map, which will highlight spots around the world that are tied to all-time great athletes and to sneaker history. Those locations really are global, and they include “Sneaker Street” in Hong Kong, San Francisco’s Moscone Center (where the iPhone debuted) and the location of Muhammad Ali’s historic victory over George Foreman in the Democratic Republic of Congo.

Also on the list are the New York and Los Angeles locations of Flight Club, the famous sneaker retailer that GOAT merged with earlier this year. And you can earn even more tickets by sharing augmented reality graphics that superimpose a “Greatest of All Time” message, or a newspaper highlighting sneaker history, on real-world imagery.

IT Manager Clint Arndt, CEO Eddy Lu

GOAT showed off the AR capabilities at an event with Apple last week at Flight Club New York. The AR elements were built using Apple’s ARKit, and it sounds like the startup plans to do more with the technology in the future.

“We’ve always wanted to incorporate augmented reality technology,” Goodno said, but the challenge, until ARKit, was integrating the technology into the GOAT app. “As a sneaker marketplace there are so many use cases for AR.” (Nike has also been using AR to connect with sneakerheads through its SNKRS app.)

At the event, co-founder and CEO Eddy Lu also talked about the company’s plans beyond AR, saying that “next year, international is a huge thing for us” — which means it’ll be doing more to localize its apps. In addition, it’s getting ready to open its next Flight Club store, this time in Miami.

David Attenborough to voice Netflix’s nature conservation series, Our Planet

Published November 9, 2018

Netflix has persuaded everyone’s favorite naturalist, David Attenborough, to voice its forthcoming original nature documentary series, Our Planet, which is slated to put conservation squarely in the frame, not just offer glorious animal eye-candy.

It’s a timely moment to focus on conservation, with climate change posing existential threats to global biodiversity — unless humans act to limit temperature rises.

Since the 1970s, Attenborough has voiced and fronted myriad major BBC nature documentaries, including the recent critically acclaimed Blue Planet series.

Some of his output has been available to stream on Netflix. But now the on-demand video platform has signed the 92-year-old to voice an eight-part original nature series it’s been creating in collaboration with Silverback Films — whose director, Alastair Fothergill, was the creator of both Blue Planet and the also critically acclaimed Planet Earth documentary series — and conservation charity WWF .

Our Planet is due to premiere on Netflix on April 5 next year and is slated to showcase the planet’s “most precious species and fragile habitats,” making use of “the latest in 4k camera technology.”

Netflix said yesterday it is “delighted” that Attenborough will voice the series, which will be made simultaneously available to its subscriber base, spanning more than 190 countries.

Filming for the series has been taking place in 50 countries across all continents of the world, with 600+ crew members capturing more than 3.5k filming days to bring the project together.

Speaking at WWF’s State of the Planet Address event in London yesterday, Attenborough said: “Our Planet will take viewers on a spectacular journey of discovery showcasing the beauty and fragility of our natural world. Today we have become the greatest threat to the health of our home but there’s still time for us to address the challenges we’ve created, if we act now. We need the world to pay attention. Our Planet brings together some of the world’s best filmmakers and conservationists and I’m delighted to help bring this important story to millions of people worldwide.“

“We hope it will inspire and delight hundreds of millions of people across the world so they can understand our planet, and the environmental threat it faces, as never before,” added Fothergill in another supporting statement. “By launching on Netflix at the same time all over the world, this series will enable people to connect to and understand the shared responsibility we all have. We are genuinely all in this together.”

Netflix’s says the partnership with WWF means the series will be part of a wider global project that’s intended to promote conservation awareness, including via online resources and educational programs for schools.

National Grid unveils $250M corporate venture capital arm

Published November 8, 2018

National Grid, the Northeast’s natural gas and electricity company, is planting a flag in Silicon Valley with the launch of National Grid Partners.

Led by former Intel Capital vice president and managing director Lisa Lambert, NGP has $250 million to invest in growth-stage technology startups over the next two to three years. Based in Las Gatos, NGP plans to fund 10 to 15 startups per year.

“We want to disrupt ourselves before we are disrupted,” Lambert told TechCrunch. “That’s the only way to protect yourself in a world where really nobody is safe.”

Deal size will vary, according to Lambert. NGP plans to back cleantech companies across sectors such as artificial intelligence, smart assets, enterprise SaaS, security and blockchain.

The purpose of the in-house venture fund is to bring a much-needed infusion of innovation into the utility industry.

“You can’t be satisfied with the status quo,” Lambert added. “If the telecom sector could do it all over again when mobile broke out — I think they would have done it differently. We don’t want to be in the same situation where we are resting on the strength of our asset profile or the fact that we are regulated; other industries had that same profile, it was hard for startups to break in and still, they got disrupted — massively disrupted.”

NGP has deployed capital to five startups so far, including big data analytics startup AutoGrid, which aims to help with predictive maintenance and commercial industrial demand response in the U.S.; weather forecasting startup ClimaCell; distributed energy resources marketplace Leap; Omnidian, a provider of protection plans for investments in residential and commercial solar energy systems; and Sitetracker, a SaaS platform focused on utilities and telecom.

The fund will also support early-stage startups looking for product-market fit and will mentor and train aspiring investors through a venture fellows program.

AdRoll expands its B2B data and tech by acquiring Growlabs

Published November 8, 2018

AdRoll Group announced today that it has acquired Growlabs, a two-year-old startup with business-to-business sales tools and data.

While AdRoll is best known for its retargeting technology for consumer advertising, it’s been building out a suite of B2B marketing technology under its RollWorks business unit, which launched earlier this year.

The company says that by marrying its artificial intelligence technology with Growlabs’ database of 12 million companies and 320 million business identities, as well as the startup’s lead generation and sales automation tools, it can help customers run multi-channel campaigns with messages that are automatically sequenced to the sales stage.

Asked why Growlabs was an appealing acquisition target, CEO Toby Gabriner (who joined AdRoll last year) told me via email that both quantity and quality of data is crucial for building an account-based marketing program.

“Growlabs has not only built one of the largest B2B data-sets, but more importantly they have developed a number of industry leading techniques to ensure that the data is accurate,” Gabriner said. “With the combination of the Growlabs and AdRoll Group identity graphs, our RollWorks division will provide our customers access to one of the largest independent B2B identity graphs in the world.”

The financial terms of the acquisition were not disclosed, but Gabriner said the entire 18-person Growlabs team will be joining AdRoll.

“Our mission has always been to help marketers grow fast — a mission we share with AdRoll Group,” said Growlabs CEO Ben Raffi in the acquisition announcement. “Together, we’ll accelerate marketers’ ability to drive revenue.”

Olho do Dono is the winner of Startup Battlefield Latin America

Published November 8, 2018

Fifteen startups spent the day presenting onstage in São Paulo, Brazil. For the finalists, that meant presenting twice — once in the initial rounds, then again for our finalist judges.

This was all part of Startup Battlefield Latin America, an event that we put on in partnership with Facebook’s FB Start program. After a full day of pitches and panels, the judges have chosen a winner, who will receive $25,000 (equity free) and a trip for two to TechCrunch Disrupt San Francisco 2019.

Check back on TechCrunch tomorrow to watch the full videos of the presentation. In the meantime, our winner (all descriptions provided by the companies):

Olho do Dono

Olho do Dono offers software that uses a portable 3D camera to estimate cattle weight, allowing cattle owners to monitor livestock weight evolution in a frequent and stress-free manner.

And our runner up:

Unima

Unima developed a fast and low-cost diagnostic and disease surveillance technology that allows anyone, even people with no technical training, to diagnose a disease at the point of care, without using lab equipment, with results in 15 minutes and at $1 per test.

And our finalists:

1Doc3

1Doc3 has developed a platform that allows users to ask healthcare questions to doctors anonymously, and for free.

Agilis

Agilis is an online asset-backed lending platform, based in Argentina. Agilis monetizes customer assets to empower them with simple and fast access to convenient financing.

Cuenca

Cuenca offers a no fee, fast response banking service.

Chrome adds new security features to stop mobile subscription scams

Published November 8, 2018

Google today announced that Chrome will soon get a new feature that aims to stop mobile subscription scams. Those are the kind of sites that ask you for your phone number and that then, unbeknownst to you, sign you up for a mobile subscription that’s billed through your carrier. Starting with the launch of Chrome 71 in December, Google will pop up a prominent warning when a site doesn’t make it clear that users are signing up for a mobile subscription.

To make sure that developers who are legitimately using this flow to offer users a subscription don’t get caught up in this new system, Google also published a set of best practices for mobile billing today. Generally, developers are expected to make their billing information visible and obvious to users, display the actual cost and have a simple and straightforward fee structure.

If that information is not available, Google will throw up a prominent full-page warning, but users can always opt to proceed. Before throwing up the warning page, Google will notify webmasters in the Search Console when it detects a potential scam (there’s always a chance for false positives, after all).

This new feature will be available on both mobile and desktop, as well as in Android’s WebView.

Abbyy looks to RPA to breathe new life into scanning and workflow

Published November 8, 2018

Abbyy has been around for a long time helping companies with scanning and workflow tools, but like many older vendors it has been looking for ways to extend its traditional business model. One way to do that is by teaming up with robotics process automation companies like UIPath. Today, the company announced it has launched the Abbyy FlexiCapture Connector in the UiPath Go! App store.

Bruce Orcutt, senior vice president for product marketing at Abbyy, says the connector provides the ability to pull content into UIPath or to take Abbyy content and push it to another part of the automated workflow in UIPath.

UIPath is on a tear these days. Just two months ago, it scored a $225 million Series C investment on a $3 billion valuation. It was able to grow from $1 million to $100 million in annual recurring revenue in just 21 months. As I wrote at the time of the funding, “[UIPath] allows companies to bring a level of automation to legacy processes like accounts payable, employee onboarding, procurement and reconciliation without actually having to replace legacy systems.”

Orcutt sees a natural connection to his company’s workflow roots, bringing it into a more modern context. “RPA simplifies the user experience. Abbyy brings content and context,” he told TechCrunch. He says that while they are still doing OCR to scrape unstructured content, it can do this in fully automated digital process and UIPath can take that content and move it through other parts of an automated workflow.

For Abbyy, UIPath is a big partner, but it’s part of a broader strategy to expand the company’s capabilities to RPA. He says they are working with a variety of RPA vendors beyond UIPath and also with systems integrators as they look to breathe new life into the company’s brand and products.

Orcutt says this is part of a significant focus and investment on the part of the company. RPA is clearly a natural fit for Abbyy, but he wasn’t willing to speculate on any deeper partnership. “We’re focusing on what we can do the best we can, and they can focus on merits of their platform. Abbyy can complement those capabilities.”

Datacoral raises $10M Series A for its data infrastructure service

Published November 8, 2018

Datacoral aims to make it easier for enterprises to build data products by abstracting away all of the complex infrastructure to organize and process data. The company today announced that it has raised a $10 million Series A financing round led by Madrona Venture Group, with participation from Social Capital, which also led its $4 million seed round in 2017.

Datacoral CEO Raghu Murthy tells me that the company plans to use the new funding to grow its business team in order to be able to reach more potential customers and to expand its engineering team.

The promise of Datacoral is to offer enterprises an end-to-end data infrastructure that will allow businesses and their data scientists to focus on generating insights over having to manage and integrate their data sources. Because nobody wants to move large amounts of data between clouds — and take the performance hit that comes with that — Datacoral sits right inside a company’s AWS systems. It’s still a fully managed service, though, but the data is encrypted and never leaves a customer’s virtual private cloud.

“As companies look to their data to deliver value – data practitioners are finding that configuring and managing their own data infrastructure is a time-consuming job that is expensive and fraught with errors,” said Murthy. “We have built a platform that easily and automatically brings together data from different applications and databases, organizes that data in any query engine and acts on insights that are critical to running their business. A crucial component is that it works securely and privately within the customer’s cloud, instead of us ingesting data from their systems.”

Murthy was an early engineer at Facebook and part of the team that was in charge of scaling that company’s data infrastructure and ran a part of the engineering team at Bebop, Diane Greene’s startup that was later acquired by Google.

To scale Datacoral, the team is betting on a serverless platform itself. It’s making extensive use of AWS Lambda and other PaaS solutions on Amazon’s cloud computing platform. That doesn’t mean Datacoral plans to only support AWS, though. Murthy tells me that Azure support is next. “We plan to work across all of the top cloud providers by leveraging their unique services and provide a consistent ‘data-centric interface’ to our customers — essentially be ‘cloud best’ instead of ‘cloud agnostic.’”

Current Datacoral users include Greenhouse, Front, Ezetap, Swing Education, mPharma and Mason Finance.