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Talking the future of media with Northzone’s Pär-Jörgen Pärson
We live in the subscription streaming era of media. Across film, TV, music, and audiobooks, subscription streaming platforms now shape the market. Gaming and podcasting could be next. Where are the startup opportunities in this shift, and in the next shift that will occur?
I sat down with Pär-Jörgen “PJ” Pärson, a partner at European venture firm Northzone, to discuss this at SLUSH this past winter. Pärson – a Swede who now runs Northzone’s office in NYC – led the top early-stage investor in Spotify and led the $35 million Series C in $45/month sports streaming service fuboTV (which has roughly 250,000 subscribers).
In the transcript below, we dive into the core investment thesis that has guided him for 20 years, how he went from running a fish distribution to running a VC firm, his best practices for effective board meetings and VC-entrepreneur relationships, and his assessment of the big social platforms, AR/VR, voice interfaces, blockchain, and the frontier of media. It has been edited for length and clarity.
From Fish to VC
Eric Peckham:
Northzone isn’t your first VC firm — Back in 1998, you created Cell Ventures, which was more of a holding company or studio model. What was your playbook then?
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Femtech’s billion-dollar year
There are a lot of people who never thought they’d see the day venture capitalists would funnel millions into femtech businesses, direct-to-consumer tampon retailers no less. But that’s our new reality and Cora is proof.
San Francisco-based Cora, which develops and sells organic tampons, pads and other personal care products, has just closed a $7.5 million Series A led by Harbinger Ventures. Cora is one of many femtech startups to raise funding this week alone, in what is turning out to be a red-hot year for VC investment in the space.
Femtech, defined as any software, diagnostics, products and services that leverage technology to improve women’s health, has attracted at least $241 million in VC funding so far this year, according to PitchBook. That puts the sector on pace to secure nearly $1 billion in investment by year-end, greatly surpassing last year’s record of $650 million. For more historical context, startups in the space brought in only $62 million in 2012, $225 million in 2014 and $231 million in 2016.
“Investors have realized there is a huge pent-up demand in the market for healthier products for women,” Cora co-founder Molly Hayward tells TechCrunch. “The way in which the VC world is structured, there just has not been a lot of representation. It’s really difficult to understand the value of a product you aren’t ever going to use or to understand a problem you aren’t ever going to have, particularly around period care. This isn’t something we were talking about as a society five years ago.”
The four-year-old startup operates a little differently than your run-of-the-mill D2C company. Like TOMS, the popular footwear brand, Cora donates a month’s supply of products for every month’s supply sold. To date, Cora has donated 5 million pads to girls in India and Kenya and 100,000 products to women in the U.S.
“To me, [Cora] was this incredible, holistic opportunity to change the way that women experience their period,” Hayward said.
Investors must be excited about Cora’s growth. Though she didn’t disclose specific numbers, Hayward says the brand has expanded 400 percent year-over-year, a metric they are expecting to sustain with this new bout of funding. Cora’s products are sold on a subscription basis, with prices ranging from $8 per month for six tampons to $16 per month for 24. For those unfamiliar with the costs of such products, $8 for six tampons comes at quite the premium. A box of 50 Playtex tampons, for example, retails for around $9.
In Cora’s case, customers are shelling out extra cash for millennial-inspired branding, a soothing unboxing experience and a general ease of access to its products, as well as Cora’s organic, hypoallergenic and compostable materials, which aren’t characteristic of many similar products on the market.
Cora plans to use the capital to put more of its items in Target stores, where it already sells its tampons and pads, and expand its portfolio of products. As part of the funding, Cora has added two more women to its board of directors: Lisa Bougie, the former GM of Stitch Fix, and Andrea Freedman, the former chief financial officer of Method. Its board is now 80 percent female.
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Torch takes $10M to teach empathy to executives
When everyone always tells you “yes,” you can become a monster. Leaders especially need honest feedback to grow. “If you look at rich people like Donald Trump and you neglect them, you get more Donald Trumps,” says Torch co-founder and CEO Cameron Yarbrough about our gruff president. His app wants to make executive coaching (a polite word for therapy) part of even the busiest executive’s schedule. Torch conducts a 360-degree interview with a client and their employees to assess weaknesses, lays out improvement goals and provides one-on-one video chat sessions with trained counselors.
“Essentially we’re trying to help that person develop the capacity to be a more loving human being in the workplace,” Yarbrough explains. That’s crucial in the age of “hustle porn,” where everyone tries to pretend they’re working all the time and constantly “crushing it.” That can leave leaders facing challenges feeling alone and unworthy. Torch wants to provide a private place to reach out for a helping hand or shoulder to cry on.
Now Torch is ready to lead the way to better management for more companies, as it’s just raised a $10 million Series A round led by Norwest Venture Partners, along with Initialized Capital, Y Combinator and West Ventures. It already has 100 clients, including Reddit and Atrium, but the new cash will fuel its go-to market strategy. Rather than trying to democratize access to coaching, Torch is doubling-down on teaching founders, C-suites and other senior executives how to care… or not care too much.
“I came out of a tough family myself and I had to do a ton of therapy and a ton of meditation to emerge and be an effective leader myself,” Yarbrough recalls. “Philosophically, I care about personal growth. It’s just true all the way down to birth for me. What I’m selling is authentic to who I am.”
Torch’s co-founders met when they were in grad school for counseling psychology degrees, practicing group therapy sessions together. Yarbrough went on to practice clinically and start Well Clinic in the Bay Area, while Keegan Walden got his PhD. Yarbrough worked with married couples to resolve troubles, and “the next thing I know I was working with high-profile startup founders, who like anybody have their fair share of conflicts.”
Torch co-founders (from left): Cameron Yarbrough and Keegan Walden
Coaching romantic partners to be upfront about expectations and kind during arguments translated seamlessly to keep co-founders from buckling under stress. As Yarbrough explains, “I was noticing that they were consistently having problems with five different things:
1. Communication – Surfacing problems early with kindness
2. Healthy workplace boundaries – Making sure people don’t step on each others’ toes
3. How to manage conflict in a healthy way – Staying calm and avoiding finger-pointing
4. How to be positively influential – Being motivational without being annoying or pushy
5. How to manage one’s ego, whether that’s insecurity or narcissism – Seeing the team’s win as the first priority
To address those, companies hire Torch to coach one or more of their executives. Torch conducts extensive 360-degree interviews with the exec, as well as their reports, employees and peers. It seeks to score them on empathy, visionary thinking, communication, conflict, management and collaboration, Torch then structures goals and improvement timelines that it tracks with follow-up interviews with the team and quantifiable metrics that can all be tracked by HR through a software dashboard.
To make progress on these fronts, execs do video chat sessions through Torch’s app with coaches trained in these skills. “These are all working people with by nature very tight schedules. They don’t have time to come in for a live session so we come to them in the form of video,” Yarbrough tells me. Rates vary from $500 per month to $1,500 per month for a senior coach in the U.S., Europe, APAC or EMEA, with Torch scoring a significant margin. “We’re B2B only. We’re not focused on being the most affordable solution. We’re focused on being the most effective. And we find that there’s less price sensitivity for senior leaders where the cost of their underperformance is incredibly high to the organization.” Torch’s top source of churn is clients’ going out of business, not ceasing to want its services.
Here are two examples of how big-wigs get better with Torch. “Let’s say we have a client who really just wants to be liked all the time, so much so that they have a hard time getting things done. The feedback from the 360 would come back like ‘I find that Cameron is continually telling me what I want to hear but I don’t know what the expectations are of me and I need him to be more direct,’ ” Yarbrough explains. “The problem is those leaders will eventually fire those people who are failing, but they’ll say they had no idea they weren’t performing because he never told them.” Torch’s coaches can teach them to practice tough-love when necessary and to be more transparent. Meanwhile, a boss who storms around the office and “is super-direct and unkind” could be instructed on how to “develop more empathic attunement.”
Yarbrough specifically designed Torch’s software to not be too prescriptive and leave room for the relationship between the coach and client to unfold. And for privacy, coaches don’t record notes and HR only sees the performance goals and progress, not the content of the video chats. It wants execs to feel comfortable getting real without the worry their personal or trade secrets could leak. “And if someone is bringing in something about trauma or that’s super-sensitive about their personal life, their coach will refer them out to psychotherapists,” Yarbrough assures me.
Torch’s direct competition comes from boutique executive coaching firms around the world, while on the tech side, BetterUp is trying to make coaching scale to every type of employee. But its biggest foe is the stubborn status quo of stiff-upper-lipping it.
The startup world has been plagued by too many tragic suicides, deep depression and paralyzing burnout. It’s easy for founders to judge their own worth not by self-confidence or even the absolute value of their accomplishments, but by their status relative to yesterday. That means one blown deal, employee quitting or product delay can make an executive feel awful. But if they turn to their peers or investors, it could hurt their partnership and fundraising prospects. To keep putting in the work, they need an emotional outlet.
“We ultimately have to create this great software that super-powers human beings. People are not robots yet. They will be someday, but not yet,” Yarbrough concludes with a laugh. IQ alone doesn’t make people succeed. Torch can help them develop the EQ, or emotional intelligence quotient, they need to become a boss that’s looked up to.
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Snap CEO’s sister Caroline Spiegel starts a no-visuals porn site
If you took the photos and videos out of pornography, could it appeal to a new audience? Caroline Spiegel’s first startup Quinn aims to bring some imagination to adult entertainment. Her older brother, Snapchat CEO Evan Spiegel, spent years trying to convince people his app wasn’t just for sexy texting. Now Caroline is building a website dedicated to sexy text and audio. The 22-year-old college senior tells TechCrunch that on April 13th she’ll launch Quinn, which she describes as “a much less gross, more fun Pornhub for women.”
TechCrunch checked out Quinn’s private beta site, which is pretty bare bones right now. Caroline tells us she’s already raised less than a million dollars for the project. But given her brother’s success spotting the next generation’s behavior patterns and turning them into beloved products, Caroline might find investors are eager to throw cash at Quinn. That’s especially true given she’s taking a contrarian approach. There will be no imagery on Quinn.
Caroline explains that “There’s no visual content on the site — just audio and written stories. And the whole thing is open source, so people can submit content and fantasies, etc. Everything is vetted by us before it goes on the site.” The computer science major is building Quinn with a three-woman team of her best friends she met while at Stanford, including Greta Meyer, though they plan to relocate to LA after graduation.
“His dream girl was named ‘Quinn’ “
The idea for Quinn sprung from a deeply personal need. “I came up with it because I had to leave Stanford my junior year because I was struggling with anorexia and sexual dysfunction that came along with that,” Caroline tells me. “I started to do a lot of research into sexual dysfunction cures. There are about 30 FDA-approved drugs for sexual dysfunction for men but zero for women, and that’s a big bummer.”
She believes there’s still a stigma around women pleasuring themselves, leading to a lack of products offering assistance. Sure, there are plenty of porn sites, but few are explicitly designed for women, and fewer stray outside of visual content. Caroline says photos and videos can create body image pressure, but with text and audio, anyone can imagine themselves in a scene. “Most visual media perpetuates the male gaze … all mainstream porn tells one story … You don’t have to fit one idea of what a woman should look like.”
That concept fits with the startup’s name “Quinn,” which Caroline says one of her best guy friends thought up. “He said this girl he met — his dream girl — was named ‘Quinn.’ ”
Caroline took to Reddit and Tumblr to find Quinn’s first creators. Reddit stuck to text and links for much of its history, fostering the kinky literature and audio communities. And when Tumblr banned porn in December, it left a legion of adult content makers looking for a new home. “Our audio ranges from guided masturbation to overheard sex, and there’s also narrated stories. It’s literally everything. Different strokes for different for folks, know what I mean?” Caroline says with a cheeky laugh.
To establish its brand, Quinn is running social media influencer campaigns where “The basic idea is to make people feel like it’s okay to experience pleasure. It’s hard to make something like masturbation cool, so that’s a little bit of a lofty goal. We’re just trying to make it feel okay, and even more okay than it is for men.”
As for the business model, Caroline’s research found younger women were embarrassed to pay for porn. Instead, Quinn plans to run ads, though there could be commerce opportunities too. And because the site doesn’t bombard users with nude photos or hardcore videos, it might be able to attract sponsors that most porn sites can’t.
Evan is “very supportive”
Until monetization spins up, Quinn has the sub-$1 million in funding that Caroline won’t reveal the source of, though she confirms it’s not from her brother. “I wouldn’t say that he’s particularly involved other than he’s one of the most important people in my life and I talk to him all the time. He gives me the best advice I can imagine,” the younger sibling says. “He doesn’t have any qualms, he’s very supportive.”
Quinn will need all the morale it can get, as Caroline bluntly admits, “We have a lot of competitors.” There’s the traditional stuff like Pornhub, user-generated content sites like Make Love Not Porn and spontaneous communities like on Reddit. She calls $5 million-funded audio porn startup Dipsea “an exciting competitor,” though she notes that “we sway a little more erotic than they do, but we’re so supportive of their mission.” How friendly.
Quinn’s biggest rival will likely be outdated but institutionalized site Literotica, which SimilarWeb ranks as the 60th most popular adult website, 631st most visited site overall, showing it gets 53 million hits per month. But the fact that Literotica looks like a web 1.0 forum yet has so much traffic signals a massive opportunity for Quinn. With rules prohibiting Quinn from launching native mobile apps, it will have to put all its effort into making its website stand out if it’s going to survive.
But more than competition, Caroline fears that Quinn will have to convince women to give its style of porn a try. “Basically, there’s this idea that for men, masturbation is an innate drive and for women it’s a ‘could do without it, could do with it.’ Quinn is going to have to make a market alongside a product and that terrifies me,” Caroline says, her voice building with enthusiasm. “But that’s what excites me the most about it, because what I’m banking on is if you’ve never had chocolate before, you don’t know. But once you have it, you start craving it. A lot of women haven’t experienced raw, visceral pleasure before, [but once we help them find it] we’ll have momentum.”
Most importantly, Quinn wants all women to feel they have rightful access to whatever they fancy. “It’s not about deserving to feel great. You don’t have to do Pilates to use this. You don’t have to always eat right. There’s no deserving with our product. Our mission is for women to be more in touch with themselves and feel fucking great. It’s all about pleasure and good vibes.”
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User Interviews, a platform for product feedback, raises $5 million
It’s not uncommon to hear CEOs and business leaders talk about focusing on the consumer. But the only way to build for the consumer is to hear what they want, which can be a resource-intensive thing to retrieve.
User Interviews, an ERA-backed company out of New York, is looking to lighten that load with a fresh $5 million in seed funding from Accomplice, Las Olas, FJ Labs and ERA.
User Interviews actually started out as Mobile Suites, an amenities logistics platform for hotels. It was a dud, and the team — Basel Fakhoury, Dennis Meng and Bob Saris — decided to do far more user research before determining the next product.
In the process of talking to customers to understand their pain points, they realized just how difficult collecting user feedback could be.
That’s how User Interviews was born. The platform’s first product, called Recruit, offers a network of non-users that can be matched with companies to provide feedback. In fact, User Interviews’ first sales were made by simply responding to Craigslist ads posted by companies looking for non-users from which they could collect feedback.
But because the majority of user research is based on existing users, the company also built Research Hub, which is essentially a CRM system for user feedback and research. To be clear, User Interviews doesn’t facilitate the actual interviews with users, but tracks the feedback, facilitates sending emails and ensures that no one from the research team is reaching out to a single user too often.
With Recruit, User Interviews charges $30/person that it matches with a company for feedback. Research Hub costs starts at $150/month.
“Right now, our greatest challenge is that our clients are the best product people in the world, and we have a huge pipeline of amazing ideas that are very valuable and no one is doing yet that our clients would love,” said CEO and cofounder Basel Fakhoury. “But we have to build it fast enough.”
No mention of what those forthcoming products might be, but the current iteration sure seems attractive enough. User Interviews clients include Eventbrite, Glassdoor, AT&T, DirecTV, Lola, LogMeIn, Thumbtack, Casper, ClassPass, Fandango, NNG, Pinterest, Pandora, Colgate, Uber and REI, to name a few.
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Boundless gets $7.8M to help immigrants navigate the convoluted green card process
Two years ago, former Amazon product manager Xiao Wang stood on the stage at TechCrunch Disrupt San Francisco and made the case for a platform meant to help couples apply for marriage green cards, a complex process made worse by bureaucracy and red tape.
Called Boundless, the startup had spun out of Seattle startup studio Pioneer Square Labs and raised a $3.5 million seed round. Now, Foundry Group’s Brad Feld has led a $7.8 million Series A in the startup, with participation from existing investors Trilogy Equity Partners, PSL, Two Sigma Ventures and Founders’ Co-Op.
“Families have really only had two choices, they could spend weeks or months trying to figure this out on their own, or they can spend thousands and thousands of dollars on an immigration attorney,” Wang, Boundless co-founder and chief executive officer, told TechCrunch. “What we are trying to do is basically give everyone access to the information, the tools and the support that was previously only available to those that could afford high-priced attorneys.”
Boundless charges $750 for its online green card application support services, which includes ensuring families correctly complete applications and have access to an immigration lawyer to review those applications. The fee comes at a major discount to the costs of an immigration lawyer and streamlines a process that can be delayed months when errors are made. The startup also offers a recently launched $395 naturalization product meant to assist eligible green card holders with their U.S. citizenship applications.
Wang founded Boundless in 2017 after helping build Amazon Go, the e-commerce giant’s line of cashierless convenience stores. Wang is an immigrant, having relocated to the U.S. from China when he was a child.
“We spent almost five months of rent money on an immigration attorney because the stakes were so high and we only had one shot,” Wang said. “We wanted to make sure we were doing it right. This is a story that is echoed by millions of families every year; this is such an important part of them starting a new life in a new country.”
Wang, after three years at Amazon, realized he could use his technology background and data prowess to build an information platform supportive of these millions of families.
“This is exactly what tech and data is meant to do,” he said. “I believe there is a moral obligation for tech to be used in meaningfully improving people’s lives.”
Boundless plans to use this investment to expand its team and product offerings, as well as build out its content library, which Wang said is rapidly becoming the go-to place for immigrants navigating the legal labyrinth that is the U.S. green card and citizenship process. Its resources page, which includes straightforward guides, a number of forms and more, counts 300,000 unique visitors per month.
“We hold their hand through the entire process,” Wang said. “We want to be the single source of information and tools for all family-based immigration.”
Wang and his team also hope to shine a brighter light on immigration policy. In late 2018, as part of its effort to be louder advocates for immigrants, Boundless, alongside Warby Parker, Foursquare, Foundation Capital and more, published an open letter to the U.S. Department of Homeland Security opposing its proposed “public charge” immigration regulation, which would allow for non-citizens who are in the country legally to be denied a visa or a green card if they have a medical condition, financial liabilities and other disqualifiers.
“The stakes for making sure your application is correct have never been higher; the government has far more leeway to be able to deny applications,” Wang said. “While we can’t speed up the government processing times, we can make meaningful improvements to helping families gather all the materials they need to send in the right information.”
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Kong raises $43M Series C for its API platform
Kong, the open core API management and life cycle management company previously known as Mashape, today announced that it has raised a $43 million Series C round led by Index Ventures. Previous investors Andreessen Horowitz and Charles River Ventures (CRV), as well as new investors GGV Capital and World Innovation Lab, also participated. With this round, Kong has now raised a total of $71 million.
The company’s CEO and co-founder Augusto Marietti tells me the company plans to use the funds to build out its service control platform. He likened this service to the “nervous system for an organization’s software architecture.”
Right now, Kong is just offering the first pieces of this, though. One area the company plans to especially focus on is security, in addition to its existing management tools, where Kong plans to add more machine learning capabilities over time, too. “It’s obviously a 10-year journey, but those two things — immunity with security and machine learning with [Kong] Brain — are really a 10-year journey of building an intelligent platform that can manage all the traffic in and out of an organization,” he said.
In addition, the company also plans to invest heavily in its expansion in both Europe and the Asia Pacific market. This also explains the addition of World Innovation Lab as an investor. The firm, after all, focuses heavily on connecting companies in the U.S. with partners in Asia — and especially Japan. As Marietti told me, the company is seeing a lot of demand in Japan and China right now, so it makes sense to capitalize on this, especially as the Chinese market is about to become more easily accessible for foreign companies.
Kong notes that it doubled its headcount in 2018 and now has more than 100 enterprise customers, including Yahoo! Japan, Ferrari, SoulCycle and WeWork.
It’s worth noting that while this is officially a Series C investment, Marietti is thinking of it more like a Series B round, given that the company went through a major pivot when it moved from being Mashape to its focus on Kong, which was already its most popular open-source tool.
“Modern software is now built in the cloud, with applications consuming other applications, service to service,” said Martin Casado, general partner at Andreessen Horowitz . “We’re at the tipping point of enterprise adoption of microservices architectures, and companies are turning to new open-source-based developer tools and platforms to fuel their next wave of innovation. Kong is uniquely suited to help enterprises as they make this shift by supporting an organization’s entire service architecture, from centralized or decentralized, monolith or microservices.”
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Ocean drone startup merger spawns Sofar, the DJI of the sea
What lies beneath the murky depths? SolarCity co-founder Peter Rive wants to help you and the scientific community find out. He’s just led a $7 million Series A for Sofar Ocean Technologies, a new startup formed from a merger he orchestrated between underwater drone maker OpenROV and sea sensor developer Spoondrift. Together, they’re teaming up their 1080p Trident drone and solar-powered Spotter sensor to let you collect data above and below the surface. They can help you shoot awesome video footage, track waves and weather, spot fishing and diving spots, inspect boats or infrastructure for damage, monitor acquaculture sites or catch smugglers.
Sofar’s Trident drone (left) and Spotter sensor (right)
“Aerial drones give us a different perspective of something we know pretty well. Ocean drones give us a view at something we don’t really know at all,” former Spoondrift and now Sofar CEO Tim Janssen tells me. “The Trident drone was created for field usage by scientists and is now usable by anyone. This is pushing the barrier towards the unknown.”
But while Rive has a soft spot for the ecological potential of DIY ocean exploration, the sea is crowded with competing drones. There are more expensive professional research-focused devices like the Saildrone, DeepTrekker and SeaOtter-2, as well as plenty of consumer-level devices like the $800 Robosea Biki, $1,000 Fathom ONE and $5,000 iBubble. The $1,700 Sofar Trident, which requires a cord to a surface buoy to power its three hours of dive time and two meters per second speed, sits in the middle of the pack, but Sofar co-founder David Lang things Trident can win with simplicity, robustness and durability. The question is whether Sofar can become the DJI of the water, leading the space, or if it will become just another commoditized hardware maker drowning in knock-offs.
From left: Peter Rive (chairman of Sofar), David Lang (co-founder of OpenROV) and Tim Janssen (co-founder and CEO of Sofar)
Spoondrift launched in 2016 and raised $350,000 to build affordable ocean sensors that can produce climate-tracking data. “These buoys (Spotters) are surprisingly easy to deploy, very light and easy to handle, and can be lowered in the water by hand using a line. As a result, you can deploy them in almost any kind of conditions,” says Dr. Aitana Forcén-Vázquez of MetOcean Solutions.
OpenROV (it stands for Remotely Operated Vehicle) started seven years ago and raised $1.3 million in funding from True Ventures and National Geographic, which was also one of its biggest Trident buyers. “Everyone who has a boat should have an underwater drone for hull inspection. Any dock should have its own weather station with wind and weather sensors,” Sofar’s new chairman Rive declares.
Spotter could unlock data about the ocean at scale
Sofar will need to scale to accomplish Rive’s mission to get enough sensors in the sea to give us more data on the progress of climate change and other ecological issues. “We know very little about our oceans since we have so little data, because putting systems in the ocean is extremely expensive. It can cost millions for sensors and for boats,” he tells me. We gave everyone GPS sensors and cameras and got better maps. The ability to put low-cost sensors on citizens’ rooftops unlocked tons of weather forecasting data. That’s more feasible with Spotter, which costs $4,900 compared to $100,000 for some sea sensors.
Sofar hardware owners do not have to share data back to the startup, but Rive says many customers are eager to. They’ve requested better data portability so they can share with fellow researchers. The startup believes it can find ways to monetize that data in the future, which is partly what attracted the funding from Rive and fellow investors True Ventures and David Sacks’ Craft Ventures. The funding will build up that data business and also help Sofar develop safeguards to make sure its Trident drones don’t go where they shouldn’t. That’s obviously important, given London’s Gatwick airport shutdown due to a trespassing drone.
Spotter can relay weather conditions and other climate data to your phone
“The ultimate mission of the company is to connect humanity to the ocean as we’re mostly conservationists at heart,” Rive concludes. “As more commercialization and business opportunities arise, we’ll have to have conversations about whether those are directly benefiting the ocean. It will be important to have our moral compass facing in the right direction to protect the earth.”
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Proxy raises $13.6M to unlock anything with Bluetooth identity
You know how kings used to have trumpeters heralding their arrival wherever they went? Proxy wants to do that with Bluetooth. The startup lets you instantly unlock office doors and reserve meeting rooms using Bluetooth Low Energy signal. You never even have to pull out your phone or open an app. But Proxy is gearing up to build an entire Bluetooth identity layer for the world that could invisibly hover around its users. That could allow devices around the workplace and beyond to instantly recognize your credentials and preferences to sign you into teleconferences, pay for public transit or ask the barista for your usual.
Today, Proxy emerges from stealth after piloting its keyless, badgeless office entry tech with 50 companies. It’s raised a $13.6 million Series A round led by Kleiner Perkins to turn your phone into your skeleton key. “The door is a forcing function to solve all the hard problems — everything from safety to reliability to the experience to privacy,” says Proxy co-founder and CEO Denis Mars. “If you’re gonna do this, it’s gonna have to work right, and especially if you’re going to do this in the workplace with enterprises where there’s no room to fix it.”
But rather than creepily trying to capitalize on your data, Proxy believes you should own and control it. Each interaction is powered by an encrypted one-time token so you’re not just beaming your unprotected information out into the universe. “I’ve been really worried about how the internet world spills over to the physical world. Cookies are everywhere with no control. What’s the future going to be like? Are we going to be tracked everywhere or is there a better way?” He figured the best path to the destiny he wanted was to build it himself.
Mars and his co-founder Simon Ratner, both Australian, have been best buddies for 10 years. Ratner co-founded a video annotation startup called Omnisio that was acquired by YouTube, while Mars co-founded teleconferencing company Bitplay, which was bought by Jive Software. Ratner ended up joining Jive where the pair began plotting a new startup. “We asked ourselves what we wanted to do with the next 10 or 20 years of our lives. We both had kids and it changed our perspective. What’s meaningful that’s worth working on for a long time?”
They decided to fix a real problem while also addressing their privacy concerns. As he experimented with Internet of Things devices, Mars found every fridge and light bulb wanted you to download an app, set up a profile, enter your password and then hit a button to make something happen. He became convinced this couldn’t scale and we’d need a hands-free way to tell computers who we are. The idea for Proxy emerged. Mars wanted to know, “Can we create this universal signal that anything can pick up?”
Most offices already have infrastructure for badge-based RFID entry. The problem is that employees often forget their badges, waste time fumbling to scan them and don’t get additional value from the system elsewhere.
So rather than re-invent the wheel, Proxy integrates with existing access control systems at offices. It just replaces your cards with an app authorized to constantly emit a Bluetooth Low Energy signal with an encrypted identifier of your identity. The signal is picked up by readers that fit onto the existing fixtures. Employees can then just walk up to a door with their phone within about six feet of the sensor and the door pops open. Meanwhile, their bosses can define who can go where using the same software as before, but the user still owns their credentials.
“Data is valuable, but how does the end user benefit? How do we change all that value being stuck with these big tech companies and instead give it to the user?” Mars asks. “We need to make privacy a thing that’s not exploited.”
Mars believes now’s the time for Proxy because phone battery life is finally getting good enough that people aren’t constantly worried about running out of juice. Proxy’s Bluetooth Low Energy signal doesn’t suck up much, and geofencing can wake up the app in case it shuts down while on a long stint away from the office. Proxy has even considered putting inductive charging into its sensors so you could top up until your phone turns back on and you can unlock the door.
Opening office doors isn’t super exciting, though. What comes next is. Proxy is polishing its features that auto-reserve conference rooms when you walk inside, that sign you into your teleconferencing system when you approach the screen and that personalize workstations when you arrive. It’s also working on better office guest check-in to eliminate the annoying iPad sign-in process in the lobby. Next, Mars is eyeing “Your car, your home, all your devices. All these things are going to ask ‘can I sense you and do something useful for you?’ ”
After demoing at Y Combinator, thousands of companies reached out to Proxy, from hotel chains to corporate conglomerates to theme parks. Proxy charges for its hardware, plus a monthly subscription fee per reader. Employees are eager to ditch their keycards, so Proxy sees 90 percent adoption across all its deployments. Customers only churn if something breaks, and it hasn’t lost a customer in two years, Mars claims.
The status quo of keycards, competitors like Openpath and long-standing incumbents all typically only handle doors, while Proxy wants to build an omni-device identity system. Now Proxy has the cash to challenge them, thanks to the $13.6 million from Kleiner, Y Combinator, Coatue Management and strategic investor WeWork. In fact, Proxy now counts WeWork’s headquarters and Dropbox as clients. “With Proxy, we can give our employees, contractors and visitors a seamless smartphone-enabled access experience they love, while actually bolstering security,” says Christopher Bauer, Dropbox’s physical security systems architect.
The cash will help answer the question of “How do we turn this into a protocol so we don’t have to build the other side for everyone?,” Mars explains. Proxy will build out SDKs that can be integrated into any device, like a smoke detector that could recognize which people are in the vicinity and report that to first responders. Mars thinks hotel rooms that learn your climate, wake-up call and housekeeping preferences would be a no-brainer. Amazon Go-style autonomous retail could also benefit from the tech.
When asked what keeps him up at night, Mars concludes that “the biggest thing that scares me is that this requires us to be the most trustworthy company on the planet. There is no ‘move fast, break things’ here. It’s ‘move fast, do it right, don’t screw it up.’ “
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Australian influencer marketing startup Tribe raises $7.5M as it eyes US expansion
Tribe, which helps brands acquire content from so-called “micro-influencers,” has raised $7.5 million in Series A funding.
The startup was founded in Australia in 2015 by TV and radio host Jules Lund, who told me he was responding to the growing demand for branded content.
“Brands are desperate for content,” Lund said. “When you have a hundred customer profiles and the ability to be hyper personalized and targeted and social, you now need 100 beautiful pieces of content. Creative agencies can’t supply that at the right cost and the right turnaround, and stock images are the antithesis of personalization, because they don’t feature your brand.”
As for how Tribe differs from all the other influencer marketing companies out there, Lund noted that it’s a purely self-serve product, where brands post their requests — either for an “influencer campaign,” where the influencers are creating content and promoting it to their followers, or a “content campaign,” which is just about creating the content — then users submit their work and get paid if the brand decides to use it.
Plus, the brands on the platform aren’t sending free stuff to influencers who may or may not be a good fit. Instead, Tribe is connecting them with influencers who already own (and presumably like) their products.
“Tribe’s role is to simply unlock all of that branded content that sits within people’s iPhones and Samsungs,” Lund said. “The micro-influencers are looking in their pantry or their wardrobe, looking at the apps in their phones, all of these products that they already use.”
Tribe says it’s already working with brands like Unilever, L’Oréal and Marvel and generating more than $250,000 worth of branded content every day. And while the United Kingdom is currently the company’s biggest market, the United States already accounts for 20 percent of the more than 50,000 influencers on the platform.
With the new funding, Tribe is officially launching in the U.S. and opening an office at One World Trade Center in Manhattan, which will be led by CEO Anthony Svirskis. He said the money will also allow Tribe to continue investing in its product.
“With TRIBE we’re finally seeing influencer marketing done right,” said Chris Burch, founder and CEO of investor Burch Creative Capital, in a statement. “The U.S. market has been waiting for a tech platform like this for years and as soon as we heard they were launching stateside, we knew we needed to be a part of it.”
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