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Customer support startup Gorgias raises $25M
Gorgias announced today that it has raised $25 million in Series B funding, bringing the startup’s pre-money valuation to $300 million.
When the company raised its Series A just over a year ago, CEO Romain Lapeyre (who founded Gorgias with CTO Alex Plugaru) told me that it works with e-commerce businesses to automate responses to their most common customer service questions, while also providing tools that help the support team respond more quickly and even convince customers to buy additional products and services.
Gorgias says it now supports more than 4,500 stores, including Steve Madden, Timbuk2, Fjällräven, Marine Layer, Ellana, Electrolux and Sergio Tacchini. And revenue has grown 200% this year.
That may not be surprising, given the overall growth in e-commerce during the pandemic. As Lapeyre put it, merchants saw “a huge boost” in online orders, which resulted in a similar rise in customer service requests — so they’re increasingly turning to Gorgias for help.
Initially, Lapeyre said merchants are just eager to respond to their customers more quickly and to make their support team more efficient. But over time, they become more interested in using customer support “as way to drive sales.” In fact, he recalled talking to one business that used to compensate its support team based on response time and now offers them a sales commission.
Image Credits: Gorgias
He said he expects these trends to continue after the pandemic ends: “We just jumped five years into the future.”
Gorgias has now raised a total of $40 million. The new round was led by Sapphire Ventures, with participation from SaaStr, Alven, Amplify Partners, CRV and Greycroft.
Lapeyere said the money will allow Gorgias to continue hiring (it went from a team of 30 people to more 100 people this year), particularly on the engineering side, where it can develop even more automation for the platform.
“As consumers increasingly shop online, the Gorgias platform powers a new breed of customer support for high-growth e-commerce brands,” said Sapphire Ventures Managing Director Rajeev Dham in a statement. “Co-founder and CEO Romain Lapeyre and team have built an incredible product that provides e-commerce merchants with a single app to manage all of their customer communications — ultimately delivering a far better customer experience.”
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Turing nabs $32M more for an AI-based platform to source and manage engineers remotely
As remote work continues to solidify its place as a critical aspect of how businesses exist these days, a startup that has built a platform to help companies source and bring on one specific category of remote employees — engineers — is taking on some more funding to meet demand.
Turing — which has built an AI-based platform to help evaluate prospective, but far-flung, engineers, bring them together into remote teams, then manage them for the company — has picked up $32 million in a Series B round of funding led by WestBridge Capital. Its plan is as ambitious as the world it is addressing is wide: an AI platform to help define the future of how companies source IT talent to grow.
“They have a ton of experience in investing in global IT services, companies like Cognizant and GlobalLogic,” said co-founder and CEO Jonathan Siddharth of its lead investor in an interview the other day. “We see Turing as the next iteration of that model. Once software ate the IT services industry, what would Accenture look like?”
It currently has a database of some 180,000 engineers covering around 100 or so engineering skills, including React, Node, Python, Agular, Swift, Android, Java, Rails, Golang, PHP, Vue, DevOps, machine learning, data engineering and more.
In addition to WestBridge, other investors in this round included Foundation Capital, Altair Capital, Mindset Ventures, Frontier Ventures and Gaingels. There is also a very long list of high-profile angels participating, underscoring the network that the founders themselves have amassed. It includes unnamed executives from Google, Facebook, Amazon, Twitter, Microsoft, Snap and other companies, as well as Adam D’Angelo (Facebook’s first CTO and CEO at Quora), Gokul Rajaram, Cyan Banister and Scott Banister, and Beerud Sheth (the founder of Upwork), among many others (I’ll run the full list below).
Turing is not disclosing its valuation. But as a measure of its momentum, it was only in August that the company raised a seed round of $14 million, led by Foundation. Siddharth said that the growth has been strong enough in the interim that the valuations it was getting and the level of interest compelled the company to skip a Series A altogether and go straight for its Series B.
The company now has signed up to its platform 180,000 developers from across 10,000 cities (compared to 150,000 developers back in August). Some 50,000 of them have gone through automated vetting on the Turing platform, and the task will now be to bring on more companies to tap into that trove of talent.
Or, “We are demand-constrained,” which is how Siddharth describes it. At the same time, it’s been growing revenues and growing its customer base, jumping from revenues of $9.5 million in October to $12 million in November, increasing 17x since first becoming generally available 14 months ago. Current customers include VillageMD, Plume, Lambda School, Ohi Tech, Proxy and Carta Healthcare.
Remote work = immediate opportunity
A lot of people talk about remote work today in the context of people no longer able to go into their offices as part of the effort to curtail the spread of COVID-19. But in reality, another form of it has been in existence for decades.
Offshoring and outsourcing by way of help from third parties — such as Accenture and other systems integrators — are two ways that companies have been scaling and operating, paying sums to those third parties to run certain functions or build out specific areas instead of shouldering the operating costs of employing, upsizing and sometimes downsizing that labor force itself.
Turing is essentially tapping into both concepts. On one hand, it has built a new way to source and run teams of people, specifically engineers, on behalf of others. On the other, it’s using the opportunity that has presented itself in the last year to open up the minds of engineering managers and others to consider the idea of bringing on people they might have previously insisted work in their offices, to now work for them remotely, and still be effective.
Siddarth and co-founder Vijay Krishnan (who is the CTO) know the other side of the coin all too well. They are both from India, and both relocated to the Valley first for school (post-graduate degrees at Stanford) and then work at a time when moving to the Valley was effectively the only option for ambitious people like them to get employed by large, global tech companies, or build startups — effectively what could become large, global tech companies.
“Talent is universal, but opportunities are not,” Siddarth said to me earlier this year when describing the state of the situation.
A previous startup co-founded by the pair — content discovery app Rover — highlighted to them a gap in the market. They built the startup around a remote and distributed team of engineers, which helped them keep costs down while still recruiting top talent. Meanwhile, rivals were building teams in the Valley. “All our competitors in Palo Alto and the wider area were burning through tons of cash, and it’s only worse now. Salaries have skyrocketed,” he said.
After Rover was acquired by Revcontent, a recommendation platform that competes against the likes of Taboola and Outbrain, they decided to turn their attention to seeing if they could build a startup based on how they had, basically, built their own previous startup.
There are a number of companies that have been tapping into the different aspects of the remote work opportunity, as it pertains to sourcing talent and how to manage it.
They include the likes of Remote (raised $35 million in November), Deel ($30 million raised in September), Papaya Global ($40 million also in September), Lattice ($45 million in July) and Factorial ($16 million in April), among others.
What’s interesting about Turing is how it’s trying to address and provide services for the different stages you go through when finding new talent. It starts with an AI platform to source and vet candidates. That then moves into matching people with opportunities, and onboarding those engineers. Then, Turing helps manage their work and productivity in a secure fashion, and also provides guidance on the best way to manage that worker in the most compliant way, be it as a contractor or potentially as a full-time remote employee.
The company is not freemium, as such, but gives people two weeks to trial people before committing to a project. So unlike an Accenture, Turing itself tries to build in some elasticity into its own product, not unlike the kind of elasticity that it promises its customers.
It all sounds like a great idea now, but interestingly, it was only after remote work really became the norm around March/April of this year that the idea really started to pick up traction.
“It’s amazing what COVID has done. It’s led to a huge boom for Turing,” said Sumir Chadha, managing director for WestBridge Capital, in an interview. For those who are building out tech teams, he added, there is now “No need for to find engineers and match them with customers. All of that is done in the cloud.”
“Turing has a very interesting business model, which today is especially relevant,” said Igor Ryabenkiy, managing partner at Altair Capital, in a statement. “Access to the best talent worldwide and keeping it well-managed and cost-effective make the offering attractive for many corporations. The energy of the founding team provides fast growth for the company, which will be even more accelerated after the B-round.”
PS. I said I’d list the full, longer list of investors in this round. In these COVID times, this is likely the biggest kind of party you’ll see for a while. In addition to those listed above, it included [deep breath] Founders Fund, Chapter One Ventures (Jeff Morris Jr.), Plug and Play Tech Ventures (Saeed Amidi), UpHonest Capital (Wei Guo, Ellen Ma), Ideas & Capital (Xavier Ponce de León), 500 Startups Vietnam (Binh Tran and Eddie Thai), Canvas Ventures (Gary Little), B Capital (Karen Appleton Page, Kabir Narang), Peak State Ventures (Bryan Ciambella, Seva Zakharov), Stanford StartX Fund, Amino Capital, Spike Ventures, Visary Capital (Faizan Khan), Brainstorm Ventures (Ariel Jaduszliwer), Dmitry Chernyak, Lorenzo Thione, Shariq Rizvi, Siqi Chen, Yi Ding, Sunil Rajaraman, Parakram Khandpur, Kintan Brahmbhatt, Cameron Drummond, Kevin Moore, Sundeep Ahuja, Auren Hoffman, Greg Back, Sean Foote, Kelly Graziadei, Bobby Balachandran, Ajith Samuel, Aakash Dhuna, Adam Canady, Steffen Nauman, Sybille Nauman, Eric Cohen, Vlad V, Marat Kichikov, Piyush Prahladka, Manas Joglekar, Vladimir Khristenko, Tim and Melinda Thompson, Alexandr Katalov, Joseph and Lea Anne Ng, Jed Ng, Eric Bunting, Rafael Carmona, Jorge Carmona, Viacheslav Turpanov, James Borow, Ray Carroll, Suzanne Fletcher, Denis Beloglazov, Tigran Nazaretian, Andrew Kamotskiy, Ilya Poz, Natalia Shkirtil, Ludmila Khrapchenko, Ustavshchikov Sergey, Maxim Matcin and Peggy Ferrell.
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Fairmarkit lands $30M Series B to modernize procurement
As the pandemic has raged on, it has shone a spotlight on the importance of procurement, especially in certain sectors. Fairmarkit, a Boston startup, is working to bring a modern digital procurement system to the enterprise. Today, the company announced a $30 million Series B.
GGV Capital and Insight Partners led the round with help from existing investors 1984 VC, NewStack and NewFund. Today’s investment brings the total raised to $42 million, according to the company.
Fairmarkit wants to replace large procurement software systems from companies like Oracle and SAP that have been around for decades, says company co-founder and CEO Kevin Frechette. When he looked around a couple of years ago, he saw a space full of these legacy vendors and ripe for disruption.
What’s more, he says that these systems have been designed to track only the biggest purchases over $500,000 or $1 million. Anything under that is what’s known as tail spend. “So procurement really focuses on companies’ biggest purchases, say things over a million, but anything under that size just gets forgotten about and neglected. It’s called tail spend, and it’s still 80% of what they buy, 80% of their vendors and 20% of the budget,” he told me.
This spending accounts for billions of dollars, yet Frechette says, it has lacked a good tracking system. He saw an opportunity, and he and his co-founders built a solution. Its first customer was the MBTA, Boston’s mass transit system (a system that could use all the help it can get in terms of getting more efficient). Today the company has more than 50 customers across a variety of industries.
The system acts as a marketplace for vendors and a central buying system for customers where they can find goods and services at this price point below $1 million. It imports a customer’s vendor data, and then combines this with other data to build a huge database of buying information. From that, they can determine what a customer needs and using AI, find the best prices for a particular order.
Frechette says this not only provides a way to save money — he says customers have been able to cut purchase costs by 10% with his system — it also provides a way to surface diverse vendors, whether that’s businesses owned by women, people of color, veterans, local business or however you define that.
He says too often what happens is that these deals aren’t put under typical procurement department scrutiny and they just get passed through, but Fairmarkit helps surface these companies and give them a shot at the business. “So because the core of our technology is a vendor recommendation engine […], we can help to invite those diverse vendors and really just give them a fair shot,” he said.
The company started the year with 40 employees and have added 30 since. The plan is to double that number next year, and as they do, Frechette hopes to reflect the diversity of the company’s product by building a correspondingly diverse employee base.
“It’s really just keeping it at the forefront. We want to make sure that we’re not just doing surveys around how we are doing for diversity and inclusion, but we’re putting programs in place to help out with it. It’s something I’m very very passionate about because it’s been such a sticking point as well on how we’re helping diverse vendors,” he said.
Frechette says that he has managed to grow the company and build a culture in spite of the pandemic not allowing employees to come into an office. He doesn’t see a world where the office will be a requirement in the future.
“We’ve hit an inflection point this year where there’s no world where we need everyone to be in an office […], which once again only helps to accelerate our business because we’re not constricted by everyone in this one small [geographical] sector. We can operate across the board [from anywhere],” he said.
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Hibob raises $70M for its new take on human resources
Productivity software has been getting a major re-examination this year, and human resources platforms — used for hiring, firing, paying and managing employees — have been no exception. Today, one of the startups that’s built what it believes is the next generation of how HR should and will work is announcing a big fundraise, underscoring its own growth and the focus on the category.
Hibob, the startup behind the HR platform that goes by the name of “bob” (the company name is pronounced, “Hi, Bob!”), has picked up $70 million in funding at a valuation that reliable sources close to the company tell us is around $500 million.
“Our mission is to modernize HR technology,” said Ronni Zehavi, Hibob’s CEO, who co-founded the company with Israel David. “We are a people management platform for how people work today. Whether that’s remotely or physically collaborative, our customers face challenges with work. We believe that the HR platforms of the future will not be clunky systems, annoying, giant platforms. We believe it should be different. We are a system of engagement rather than record.”
The Series B is being led by SEEK and Israel Growth Partners, with participation also from Bessemer Venture Partners, Battery Ventures, Eight Roads Ventures, Arbor Ventures, Presidio Ventures, Entree Capital, Cerca Partners and Perpetual Partners, the same group that also backed Hibob in its last round (a Series A extension) in 2019. It has raised $124 million to date.
The company has its roots in Israel but these days describes its headquarters as London and New York, and the funding comes on the back of strong growth in multiple markets. In an interview, Zehavi said that Hibob specialises in the mid-market customers and says that it has more than 1,000 of them currently on its books across the U.S., Europe and Asia, including Monzo, Revolut, Happy Socks, ironSource, Receipt Bank, Fiverr, Gong and VaynerMedia. In the last year Hibob has had “triple-digit” year-on-year growth (it didn’t specify what those digits are).
Human resources has never been at the more glamorous end of how a company works, and it can sometimes even be looked on with some disdain. However, HR has found itself in a new spotlight in 2020, the year when every company — whether one based around people sitting at desks or in more interactive and active environments — had to change how it worked.
That might have involved sending everyone home to sign in from offices possibly made out of corners of bedrooms or kitchens, or that might have involved a vastly different set of practices in terms of when and where workers showed up and how they interacted with people once they did. But regardless of the implementations, they all involved a team of people who needed to be linked together, still feeling connected and managed; and sometimes hired, furloughed, or let go.
That focus has started to reveal the strains of how some legacy systems worked, with older systems built to consider little more than creating an employee identity number that could then be tracked for payroll and other purposes.
Hibob — Zehavi said they chose the name after the person who owned the bob.com domain wanted too much to sell it, but they liked “bob” for the actual product — takes an approach from the ground up that is in line with how many people work today, balancing different software and apps depending on what they are doing, and linking them up by way of integrations: its own includes Slack, Microsoft Teams and Mercer, and other packages that are popular with HR departments.
While it covers all of the necessary HR bases like payroll and further compensation, onboarding, managing time off and benefits, it further brings in a variety of other features that help build out bigger profiles of users, such as performance and culture, with the ability for peers, managers and workers themselves to provide feedback to enhance their own engagement with the company, and for the company to have a better idea of how they are fitting into the organization, and what might need more attention in the future.
That then links into a bigger organizational chart and conceptual charts that highlight strong performers, those who are possible flight risks, those who are leaders and so on. While there have been a number of others in the HR world that have built standalone apps that cover some of these features (for example, 15five was early to spot the value of a platform that made it much easier to set goals and provide feedback), what’s notable here is how they are all folded into one system together.
The end effect, as you can see here, looks less like word salad and more interactive, graphic interfaces that are presumably a lot more enjoyable and at least easier to use for HR people themselves.
The importance for investors has been that the product and the startup has identified the opportunity, but has delivered not just more engagement, but a strong piece of software that still provides the essentials.
“This is certainly not a Workday,” said Adam Fisher, a partner at Bessemer, in an interview. “Our overall thesis has been that HR is only growing in importance. And while engagement is super important, that opportunity is not enough to create the market.”
The end result is a platform that has a significant shot at building in even more over time. For example, another large area that has been seeing traction in the world of enterprise and B2B software is employee training. Specifically, enterprise learning systems are creating another way to help keep people not only up to speed on important aspects of how they work, but also engaged at a time when connections are under strain.
“Training, a SuccessFactors -style offering, is definitely in our road map,” said Zehavi, who noted they are adding new features all the time. The latest has been compensation, sometimes known as merit increase cycles. “That is a very complex issue and requires deeper integrations finance and the CFO’s office. We streamlined it and made it easy to use. We launched two months ago and it’s on fire. After learning and development there are other modules also down the road.”
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Arthur.ai snags $15M Series A to grow machine learning monitoring tool
At a time when more companies are building machine learning models, Arthur.ai wants to help by ensuring the model accuracy doesn’t begin slipping over time, thereby losing its ability to precisely measure what it was supposed to. As demand for this type of tool has increased this year, in spite of the pandemic, the startup announced a $15 million Series A today.
The investment was led by Index Ventures with help from newcomers Acrew and Plexo Capital, along with previous investors Homebrew, AME Ventures and Work-Bench. The round comes almost exactly a year after its $3.3 million seed round.
As CEO and co-founder Adam Wenchel explains, data scientists build and test machine learning models in the lab under ideal conditions, but as these models are put into production, the performance can begin to deteriorate under real-world scrutiny. Arthur.ai is designed to root out when that happens.
Even as COVID has wreaked havoc throughout much of this year, the company has grown revenue 300% in the last six months smack dab in the middle of all that. “Over the course of 2020, we have begun to open up more and talk to [more] customers. And so we are starting to get some really nice initial customer traction, both in traditional enterprises as well as digital tech companies,” Wenchel told me. With 15 customers, the company is finding that the solution is resonating with companies.
It’s interesting to note that AWS announced a similar tool yesterday at re:Invent called SageMaker Clarify, but Wenchel sees this as more of a validation of what his startup has been trying to do, rather than an existential threat. “I think it helps create awareness, and because this is our 100% focus, our tools go well beyond what the major cloud providers provide,” he said.
Investor Mike Volpi from Index certainly sees the value proposition of this company. “One of the most critical aspects of the AI stack is in the area of performance monitoring and risk mitigation. Simply put, is the AI system behaving like it’s supposed to?” he wrote in a blog post announcing the funding.
When we spoke a year ago, the company had eight employees. Today it has 17 and it expects to double again by the end of next year. Wenchel says that as a company whose product looks for different types of bias, it’s especially important to have a diverse workforce. He says that starts with having a diverse investment team and board makeup, which he has been able to achieve, and goes from there.
“We’ve sponsored and work with groups that focus on both general sort of coding for different underrepresented groups as well as specifically AI, and that’s something that we’ll continue to do. And actually I think when we can get together for in-person events again, we will really go out there and support great organizations like AI for All and Black Girls Code,” he said. He believes that by working with these groups, it will give the startup a pipeline to underrepresented groups, which they can draw upon for hiring as the needs arise.
Wenchel says that when he can go back to the office, he wants to bring employees back, at least for part of the week for certain kinds of work that will benefit from being in the same space.
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WorkRamp raises $17M to ramp up its enterprise learning platform
Remote learning and training have become a large priority this year for organizations looking to keep employees engaged and up to date on work practices at a time when many of them are not working in an office — and, in the case of those who have joined in 2020, may have never met any of their work colleagues in person, ever. Today one of the startups that’s built a new, more user-friendly approach to creating and provisioning those learning materials is announcing some funding as it experiences a boost in its growth.
WorkRamp, which has built a platform that helps organizations build their own training materials, and then distribute them both to their workforce and to partners, has raised $17 million, a Series B round of funding that’s being led by OMERS Ventures, with Bow Capital also participating.
Its big pitch is that it has built the tools to make it easy for companies to build their own training and learning materials, incorporating tests, videos, slide shows and more, and by making it easier for companies to build these themselves, the materials themselves become more engaging and less stiff.
“We’re disrupting the legacy LMS [learning management system] providers, the Cornerstones of the world, with our bite-size training platform,” said CEO and founder Ted Blosser in an interview. “We want to do what Peloton did for the exercise market, but with corporate training. We are aiming for a consumer-grade experience.”
The company, originally incubated in Y Combinator, has now raised $27 million.
The funding comes on the back of strong growth for WorkRamp . Blosser said that it now has around 250 customers, with 1 million courses collectively created on its platform. That list includes fast-growing tech companies like Zoom, Box, Reddit and Intercom, as well as Disney, GlobalData and PayPal. As it continues to expand, it will be interesting to see how and if it can also snag more legacy, late adopters who are not as focused on tech in their own DNA.
WorkRamp estimates that there is some $20 billion spent annually by organizations on corporate training. Unsurprisingly, that has meant the proliferation of a number of companies building tools to address that market.
Just Google WorkRamp and you’re likely to encounter a number of its competitors who have bought its name as a keyword to snag a little more attention. There are both big and small players in the space, including Leapsome, Capterra, Lessonly, LearnUpon (which itself recently raised a big round), SuccessFactors and TalentLMS.
The interesting thing about what WorkRamp has built is that it plays on the idea of the “creator,” which really has been a huge development in our digital world. YouTube may have kicked things off with the concept of “user-generated content.” but today we have TikTok, Snapchat, Facebook, Twitter and so many more platforms — not to mention smartphones themselves, with their easy facilities to shoot videos and photos of others, or of yourself, and then share with others — which have made the idea of building your own work, and looking at that of others, extremely accessible.
That has effectively laid the groundwork for a new way of conceiving of even more prosaic things, like corporate training. (Can there really be anything more comedically prosaic than that?) Other startups like Kahoot have also played on this idea, by making it easy for enterprises to build their own games to help train their staff.
This is what WorkRamp has aimed to tap into with its own take on the learning market, to help its customers eschew the idea of hiring outside production companies to make training materials, or expect WorkRamp to build those materials for them: Instead, the people who are going to use the training now have the control.
“I think it’s critical to be able to build your own customer education,” Blosser said. “That’s a big trend for clients that want both to rapidly onboard people but also reduce costs.”
The company’s platform includes user-friendly drag-and-drop functionality, which also lets people build slide shows, flip cards and questions that viewers can answer. The plan is to bring on more “Accenture” style consultants, Blosser said, for bigger customers who may not be as tech savvy to help them take better advantage of the tools. It also integrates with third-party packages like Salesforce.com, Workday and Zoom both to build out training as well as distribute it.
“Since 2000, we have seen three major technology shifts in the enterprise: the transition from on-premise to SaaS, the growth of mobile, and the most recent – sweeping digital transformation across almost every part of every business,” said Eugene Lee of OMERS Ventures, in a statement. “The pandemic has forced adoption of a digital-first approach towards customers and employees across virtually all industries. WorkRamp’s platform is foundational to empowering both of these important audiences today and in the future. We are bullish on the massive opportunity in front of the company and are excited to get involved.” Lee is joining the board with this round.
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Is 2020 bringing more edtech rounds than ever, or does it simply feel that way?
Venture capital activity is high at the moment, making it difficult to keep up with the influx of new rounds that are being announced.
Our cup runneth over, and I would much rather be busy than bored, but not all sectors are as busy as others. We’re not drowning in consumer social rounds, for example. We are, however, seemingly suffering from a deluge of edtech investments.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
Happily for the TechCrunch crew, Natasha Mascarenhas has become our resident expert on the sector, covering it week in and week out. But even though it’s her beat, I couldn’t help but wonder this morning upon yet another large edtech round coming across the wires, just what is going on in the sector in aggregate?
I had to know. So, I’ve done a little digging into Crunchbase data, parsed through some other information and have something approaching an idea. My goal is to help us both understand if there are more edtech rounds than ever being announced, or if it simply seems that way.
Into the breach!
Edtech VC activity
The best way to start examining at a sector is to take its aggregate performance data and cut it into smaller bits. Companies do this with quarterly results, for example, an utterly arbitrary period of time to report on that is also very useful.
To get a handle on edtech in 2020, I went a bit more caveman and decided to look at the sector’s funding totals in 2020 by merely comparing the first and second half of the year.
Per Crunchbase’s “edtech” category, here’s what that data looks like:
- H1 2020: 211 rounds, $2.68 billion.
- H2 (YTD) 2020: 135 rounds, $5.25 billion.
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DealShare raises $21 million to expand its e-commerce platform to 100 Indian cities and towns
DealShare, a startup in India that has built an e-commerce platform for middle and lower-income groups of consumers, said on Tuesday it has raised $21 million in a new financing round as it looks to expand its footprint in the world’s second-largest internet market.
WestBridge Capital led the Series C round of the three-year-old startup, which is based in Bangalore. Alpha Wave Incubation, a venture fund managed by Falcon Edge Capital, Z3Partners and existing investors Matrix Partners India and Omidyar Network India also participated in the round, bringing DealShare’s to-date raise to $34 million.
DealShare kickstarted its journey the day Walmart acquired Flipkart, the startup’s founder and chief executive Vineet Rao said at a recent virtual conference. Rao said that even as Amazon and Flipkart had been able to create a market for themselves in the urban Indian cities, much of the nation was still underserved. There was an opportunity for someone to jump in, he said.
The startup began as an e-commerce platform on WhatsApp, where it offered hundreds of products to consumers. It didn’t take long before a major consumer spending pattern was visible, Rao said. People were only interested in buying items that were selling at discounted rates, said Rao.
Over time, that idea has become part of DealShare’s core offering. Today it incentivizes consumers — by offering them discounts and cashbacks — to share deals on products with their friends. The startup, which has since launched its own app and website, now operates in over two dozen cities in India.
Consumers wanted products that were relevant to them and they wanted to buy these items at a price that instilled the most value for their bucks, said Rao. “We focused on locally produced items instead of national brands. Even today, 80% to 90% of items we sell are locally produced,” he said.
“We started building a network of these suppliers. It was very tough because none of these guys fancied joining modern retail like e-commerce. Some of them had tried to work with e-commerce firms before but the experience left a lot to be desired,” he said.
Sandeep Singhal, co-founder and managing director of WestBridge, said in a statement, “Majority of Indian population is currently residing in the non-metros and there is a huge business opportunity in these regions. The buying pattern of low and middle-income group is different especially in smaller markets and DealShare seems to have understood the nuances very well. We are very impressed with how the team has scaled up in the last 2 years, while retaining a sharp focus on low cost, high impact model.”
The startup says it spent the last 18 months to improve its finances and is nearing profitability. Now it plans to invest in its technology stack and expand its platform to 100 cities and towns in five states of India in the next year. It did not disclose how many customers it serves today, but said it is working to reach 10 million customers and clock $339 million in annual GMV.
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Tecton.ai nabs $35M Series B as it releases machine learning feature store
Tecton.ai, the startup founded by three former Uber engineers who wanted to bring the machine learning feature store idea to the masses, announced a $35 million Series B today, just seven months after announcing their $20 million Series A.
When we spoke to the company in April, it was working with early customers in a beta version of the product, but today, in addition to the funding, they are also announcing the general availability of the platform.
As with their Series A, this round has Andreessen Horowitz and Sequoia Capital co-leading the investment. The company has now raised $60 million.
The reason these two firms are so committed to Tecton is the specific problem around machine learning the company is trying to solve. “We help organizations put machine learning into production. That’s the whole goal of our company, helping someone build an operational machine learning application, meaning an application that’s powering their fraud system or something real for them […] and making it easy for them to build and deploy and maintain,” company CEO and co-founder Mike Del Balso explained.
They do this by providing the concept of a feature store, an idea they came up with and which is becoming a machine learning category unto itself. Just last week, AWS announced the Sagemaker Feature store, which the company saw as major validation of their idea.
As Tecton defines it, a feature store is an end-to-end machine learning management system that includes the pipelines to transform the data into what are called feature values, then it stores and manages all of that feature data and finally it serves a consistent set of data.
Del Balso says this works hand-in-hand with the other layers of a machine learning stack. “When you build a machine learning application, you use a machine learning stack that could include a model training system, maybe a model serving system or an MLOps kind of layer that does all the model management, and then you have a feature management layer, a feature store which is us — and so we’re an end-to-end life cycle for the data pipelines,” he said.
With so much money behind the company it is growing fast, going from 17 employees to 26 since we spoke in April, with plans to more than double that number by the end of next year. Del Balso says he and his co-founders are committed to building a diverse and inclusive company, but he acknowledges it’s not easy to do.
“It’s actually something that we have a primary recruiting initiative on. It’s very hard, and it takes a lot of effort, it’s not something that you can just make like a second priority and not take it seriously,” he said. To that end, the company has sponsored and attended diversity hiring conferences and has focused its recruiting efforts on finding a diverse set of candidates, he said.
Unlike a lot of startups we’ve spoken to, Del Balso wants to return to an office setup as soon as it is feasible to do so, seeing it as a way to build more personal connections between employees.
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Jeli.io announces $4M seed to build incident analysis platform
When one of AWS’s east coast data centers went down at the end of last month, it had an impact on countless companies relying on its services, including Roku, Adobe and Shipt. When the incident was resolved, the company had to analyze what happened. For most companies, that involves manually pulling together information from various internal tools, not a focused incident platform.
Jeli.io wants to change that by providing one central place for incident analysis, and today the company announced a $4 million seed round led by Boldstart Ventures with participation by Harrison Metal and Heavybit.
Jeli CEO and founder Nora Jones knows a thing or two about incident analysis. She helped build the chaos engineering tools at Netflix, and later headed chaos engineering at Slack. While chaos engineering helps simulate possible incidents by stress-testing systems, incidents still happen, of course. She knew that there was a lot to learn from them, but there wasn’t a way to pull together all of the data around an incident automatically. She created Jeli to do that.
“While I was at Netflix pre-pandemic, I discovered the secret that looking at incidents when they happen — like when Netflix goes down, when Slack goes down or when any other organization goes down — that’s actually a catalyst for understanding the delta between how you think your org works and how your org actually works,” Jones told me.
She began to see that there would be great value in trying to figure out the decision-making processes, the people and tools involved and what companies could learn from how they reacted in these highly stressful situations, how they resolved them and what they could do to prevent similar outages from happening again in the future. With no products to help, Jones began building tooling herself at her previous jobs, but she believed there needed to be a broader solution.
“We started Jeli and began building tooling to help engineers by [serving] the insights to help them know where to look after incidents,” she said. They do this by pulling together all of the data from emails, Slack channels, PagerDuty, Zoom recordings, logs and so forth that captured information about the incident, surfacing insights to help understand what happened without having to manually pull all of this information together.
The startup currently has eight employees, with plans to add people across the board in 2021. As she does this, she is cognizant of the importance of building a diverse workforce. “I am extremely committed to diversity and inclusion. It is something that’s been important and a requirement for me from day one. I’ve been in situations in organizations before where I was the only one represented, and I know how that feels. I want to make sure I’m including that from day one because ultimately it leads to a better product,” she said.
The product is currently in private beta, and the company is working with early customers to refine the platform. The plan is to continue to invite companies in the coming months, then open that up more widely some time next year.
Eliot Durbin, general partner at Boldstart Ventures, says that he began talking to Jones a couple of years ago when she was at Netflix just to learn about this space, and when she was ready to start a company, his firm jumped at the chance to write an early check, even while the startup was pre-revenue.
“When we met Nora we realized that she’s on a lifelong mission to make things much more resilient […]. And we had the benefit of getting to know her for years before she started the company, so it was really a natural continuation to a conversation that we were already in,” Durbin explained.
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