Fundings & Exits

Auto Added by WPeMatico

How Pilot charted a course of not raising too much money

A few weeks ago, we wrote about fintech Pilot raising a $100 million Series C that doubled the company’s valuation to $1.2 billion.

Bezos Expeditions — Amazon founder Jeff Bezos’ personal investment fund — and Whale Rock Capital joined the round, adding $40 million to a $60 million raise led by Sequoia about one month prior.

That raise came after a $40 million Series B in April 2019 co-led by Stripe and Index Ventures that valued the company at $355 million.

Both raises were notable and warranted coverage. But sometimes it’s fun to take a peek at the stories behind the raises and dig deeper into the numbers.

So here we go.

First off, San Francisco-based Pilot — which has a mission of affordably providing back-office services such as bookkeeping to startups and SMBs — apparently had term sheets that offered “2x the $40M” raised in its Series B. But it chose not to raise so much capital. 

I also heard that the same investor that ended up leading a now defunct competitor’s $60 million raise first asked to invest $60 million in Pilot as a follow-on to that Series B prior to making the other investment. While I don’t know for sure, I can only presume that what is being referred to is ScaleFactor’s $60 million Series C raise in August 2019 that was led by Coatue Management. (ScaleFactor crashed and burned last year.)

According to CFO Paul Jun: “There were many periods when Pilot turned away new customers and growth capital instead of absolutely maximizing short-term growth…Pilot prioritized building the foundational investments needed for scalability, reliability and high velocity. When it was presented with the opportunity for additional funding towards further growth in 2019, it declined to do so.”

Co-founder and CEO Waseem Daher elaborates, pointing out that the first company that Pilot’s founding team ran, Ksplice, was bootstrapped before getting acquired by Oracle in 2011. (It’s also worth noting that the founding team are all MIT computer scientists.)

“Ultimately, the reason to raise money is you believe that you can deploy the capital, to grow the company or to basically cause the company to grow at the rate you’d like to grow. And it doesn’t make sense to raise money if you don’t need it, or don’t have a good plan for what to do with it,” Daher told TechCrunch. “Too much capital can be bad because it sort of leads you to bad habits…When you have the money, you spend the money.”

So despite what he describes as “a great deal of institutional interest” in 2019, Pilot opted to raise just $40 million, instead of $80 million to $100 million, because it was the amount of capital the company had confidence that it could deploy successfully.

Also, Jun shared some numbers beyond the recent raise amount and valuation.

  • The company has tripled revenue every year since inception, except for 2020 when it doubled revenue.
  • Pilot claims to have had a cash burn of $800,000 per month in 2020 against a starting balance of $40 million.
  • The startup touts a 60% GAAP gross margin. Daher notes: “We feel really good about having long-term unit economics that will work for this business without resorting to offshoring or outsourcing in a way that could compromise quality and compromise relationships.”

Bottom line is companies don’t have to accept all the capital that’s offered to them. And maybe in some cases, they shouldn’t.

Powered by WPeMatico

Amira Learning raises $11M to put its AI-powered literacy tutor in post-COVID classrooms

School closures due to the pandemic have interrupted the learning processes of millions of kids, and without individual attention from teachers, reading skills in particular are taking a hit. Amira Learning aims to address this with an app that reads along with students, intelligently correcting errors in real time. Promising pilots and research mean the company is poised to go big as education changes, and it has raised $11 million to scale up with a new app and growing customer base.

In classrooms, a common exercise is to have students read aloud from a storybook or worksheet. The teacher listens carefully, stopping and correcting students on difficult words. This “guided reading” process is fundamental for both instruction and assessment: It not only helps the kids learn, but the teacher can break the class up into groups with similar reading levels so she can offer tailored lessons.

“Guided reading is needs-based, differentiated instruction and in COVID we couldn’t do it,” said Andrea Burkiett, director of Elementary Curriculum and Instruction at the Savannah-Chatham County Public School System. Breakout sessions are technically possible, “but when you’re talking about a kindergarten student who doesn’t even know how to use a mouse or touchpad, COVID basically made small groups nonexistent.”

Amira replicates the guided reading process by analyzing the child’s speech as they read through a story and identifying things like mispronunciations, skipped words and other common stumbles. It’s based on research going back 20 years that has tested whether learners using such an automated system actually see any gains (and they did, though generally in a lab setting).

In fact I was speaking to Burkiett out of skepticism — “AI” products are thick on the ground and while it does little harm if one recommends you a recipe you don’t like, it’s a serious matter if a kid’s education is impacted. I wanted to be sure this wasn’t a random app hawking old research to lend itself credibility, and after talking with Burkiett and CEO Mark Angel I feel it’s quite the opposite and could actually be a valuable tool for educators. But it needed to convince educators first.

Not a replacement but a force multiplier

“You have to start by truly identifying the reason for wanting to employ a tech tool,” said Burkiett. “There are a lot of tech tools out there that are exciting, fun for kids, etc., but we could use all of them and not impact growth or learning at all because we didn’t stop and say, this tool helps me with this need.”

Amira was decided on as one that addresses the particular need in the K-5 range of steadily improving reading level through constant practice and feedback.

“When COVID hit, every tech tool came out of the woodwork and was made free and available,” Burkiett recalled. “With Amira you’re looking at a 1:1 tutor at their specific level. She’s not a replacement for a teacher — though it has been that way in COVID — but beyond COVID she could become a force multiplier,” said Burkiett.

You can see the old version of Amira in action below, though it’s been updated since:

Testing Amira with her own district’s students, Burkiett replicated the results that have been obtained in more controlled settings: As much as twice or three times as much progress in reading level based on standard assessment tools, some of which are built into the teacher-side Amira app.

Naturally it isn’t possible to simply attribute all this improvement to Amira — there are other variables in play. But it appears to help and doesn’t hinder, and the effect correlates with frequency of use. The exact mechanism isn’t as important as the fact that kids learn faster when they use the app versus when they don’t, and furthermore this allows teachers to better allocate resources and time. A kid who can’t use it as often because their family shares a single computer is at a disadvantage that has nothing to do with their aptitude — but this problem can be detected and accounted for by the teacher, unlike a simple “read at home” assignment.

“Outside COVID we would always have students struggling with reading, and we would have parents with the money and knowledge to support their student,” Burkiett explained. “But now we can take this tool and offer it to students regardless of mom and dad’s time, mom and dad’s ability to pay. We can now give that tutor session to every single student.”

“Radically suboptimal conditions”

This is familiar territory for CEO Mark Angel, though the AI aspect, he admits, is new.

“A lot of the Amira team came from Renaissance Learning. bringing fairly conventional edtech software into elementary school classrooms at scale. The actual tech we used was very simple compared to Amira — the big challenge was trying to figure out how to make applications work with the teacher workflow, or make them friendly and resilient when 6-year-olds are your users,” he told me.

“Not to make it trite, but what we’ve learned is really just listen to teachers — they’re the superusers,” Angel continued. “And to design for radically sub-optimal conditions, like background noise, kids playing with the microphone, the myriad things that happen in real-life circumstances.”

Once they were confident in the ability of the app to reliably decode words, the system was given three fundamental tasks that fall under the broader umbrella of machine learning.

The first is telling the difference between a sentence being read correctly and incorrectly. This can be difficult due to the many normal differences between speakers. Singling out errors that matter, versus simply deviation from an imaginary norm (in speech recognition that is often, effectively, American English as spoken by white people) lets readers go at their own pace and in their own voice, with only actual issues like saying a silent k noted by the app.

On that note, considering the prevalence of English language learners with accents, I asked about the company’s performance and approach there. Angel said they and their research partners went to great lengths to make sure they had a representative dataset, and that the model only flags pronunciations that indicate a word was not read or understood correctly.

The second is knowing what action to take to correct an error. In the case of a silent k, it matters whether this is a first grader who is still learning spelling or a fourth grader who is proficient. And is this the first time they’ve made that mistake, or the tenth? Do they need an explanation of why the word is this way, or several examples of similar words? “It’s about helping a student at a moment in time,” Angel said, both in the moment of reading that word, and in the context of their current state as a learner.

Screenshot of a reading assessment in the app Amira.

Image Credits: Amira Learning

Third is a data-based triage system that warns students and parents if a kid may potentially have a language learning disorder like dyslexia. The patterns are there in how they read — and while a system like Amira can’t actually diagnose, it can flag kids who may be high risk to receive a more thorough screening. (A note on privacy: Angel assured me that all information is totally private and by default is considered to belong to the district. “You’d have to be insane to take advantage of it. We’d be out of business in a nanosecond.”)

The $11 million in funding comes at what could be a hockey-stick moment for Amira’s adoption. The round was led by Authentic Ventures II, LP, with participation from Vertical Ventures, Owl Ventures and Rethink Education.

“COVID was a gigantic spotlight on the problem that Amira was created to solve,” Angel said. “We’ve always struggled in this country to help our children become fluent readers. The data is quite scary — more than two-thirds of our fourth graders aren’t proficient readers, and those two-thirds aren’t equally distributed by income or race. It’s a decades-long struggle.”

Having basically given the product away for a year, the company is now looking at how to convert those users into customers. It seems like, just like the rest of society, “going back to normal” doesn’t necessarily mean going back to 2019 entirely. The lessons of the pandemic era are sticking.

“They don’t have the intention to just go back to the old ways,” Angel explained. “They’re searching for a new synthesis — how to incorporate tech, but do it in a classroom with kids elbow to elbow and interacting with teachers. So we’re focused on making Amira the norm in a post-COVID classroom.”

Part of that is making sure the app works with language learners at more levels and grades, so the team is working to expand its capabilities upward to include middle-school students as well as elementary. Another is building out the management side so that success at the classroom and district levels can be more easily understood.

Cartoon illustration of an adventurous looking woman in front of a jungle and zeppelin.

Amira’s appearance got an update in the new app as well. Image Credits: Amira Learning

The company is also launching a new app aimed at parents rather than teachers. “A year ago 100% of our usage was in the classroom, then three weeks later 100% of our usage was at home. We had to learn a lot about how to adapt. Out of that learning we’re shipping Amira and the Story Craft that helps parents work with their children.”

Hundreds of districts are on board provisionally — aided by a distribution partnership with Houghton Mifflin Harcourt, also an investor — but decisions are still being kicked down the road as they deal with outbreaks, frustrated parents and every other chaotic aspect of getting back to “normal.”

Perhaps a bit of celebrity juice may help tip the balance in their favor. A new partnership with Miami Dolphins (former Houston Texans) linebacker Brennan Scarlett has the NFL player advising the board and covering the cost of 100 students at a Portland, OR school through his education charity, the Big Yard Foundation — and more to come. It may be a drop in the bucket in the scheme of things, with a year of schooling disrupted, but teachers know that every drop counts.

Powered by WPeMatico

Coinbase sets direct listing reference price at $250/share, valuing the company at as much as $65B

Coinbase, the American cryptocurrency trading giant, has set a reference price for its direct listing at $250 per share. According to the company’s most recent SEC filing, it has a fully diluted share count of 261.3 million, giving the company a valuation of $65.3 billion. Using a simple share count of 196,760,122 provided in its most recent S-1/A filing, Coinbase would be worth a slimmer $49.2 billion.

Regardless of which share count is used to calculate the company’s valuation, its new worth is miles above its final private price set in 2018 when the company was worth $8 billion.

Immediate chatter following the company’s direct listing reference price was that the price could be low. While Coinbase will not suffer usual venture capital censure if its shares quickly appreciate as it is not selling stock in its flotation, it would still be slightly humorous if its set reference price was merely a reference to an overly conservative estimate of its worth.

Its private backers are in for a bonanza either way. Around four years ago in 2017 Coinbase was worth just $1.6 billion, according to Crunchbase data. For investors in that round, let alone its earlier fundraises, the valuation implied by a $250 per-share price represents a multiple of around 40x from the price that they paid.

The Coinbase direct listing was turbocharged recently when the company provided a first-look at its Q1 2021 performance. As TechCrunch reported at the time, the company’s recent growth was impressive, with revenue scaling from $585.1 million in Q4 2020, to $1.8 billion in the first three months of this year. The new numbers set an already-hot company’s public debut on fire.

Place your bets now concerning where Coinbase might open, and how high its value may rise. It’s going to be quite the show.

Powered by WPeMatico

5 questions about Grab’s epic SPAC investor deck

As expected, Southeast Asian superapp Grab is going public via a SPAC.

The combination, which TechCrunch discussed over the weekend, will value Grab on an equity basis at $39.6 billion and will provide around $4.5 billion in cash, $4 billion of which will come in the form of a private investment in public equity, or PIPE. Altimeter Capital is putting up $750 million in the PIPE — fitting, as Grab is merging with one of Altimeter’s SPACs.

Ride-sharing is a profitable business for Grab, though the segment did take a pandemic-induced whacking.

Grab, which provides ride-hailing, payments and food delivery, will trade under the ticker symbol “GRAB” on Nasdaq when the deal closes. The announcement comes a day after Uber told its investors it was seeing recovery in certain transactions, including ride-hailing and delivery.

Uber also told the investing public that it’s still on track to reach adjusted EBITDA profitability in Q4 2021. The American ride-hailing giant did a surprising amount of work clearing brush for the Grab deal. Extra Crunch examined Uber’s ramp toward profitability yesterday.

This morning, let’s talk through several key points from Grab’s SPAC investor deck. We’ll discuss growth, segment profitability, aggregate costs and COVID-19, among other factors. You can read along in the presentation here.

How harshly did COVID-19 impact the business?

The impact on Grab’s operations from COVID-19 resembles what happened to Uber in that the company’s deliveries business had a stellar 2020, while its ride-hailing business did not.

From a high level, Grab’s gross merchandise volume (GMV) was essentially flat from 2019 to 2020, rising from $12.2 billion to $12.5 billion. However, the company did manage to greatly boost its adjusted net revenue over the same period, which rose from $1 billion to $1.6 billion.

Powered by WPeMatico

Hatch, a neobank for SMBs, launches with $20M in funding from investors like Kleiner Perkins, Foundation and Plaid’s founders

After his last startup, Framed Data, was acquired by Square, Thomson Nguyen began exploring new ideas. While an entrepreneur-in-residence at Kleiner Perkins, Nguyen interviewed hundreds of small business owners and realized that many pay hundreds of dollars in fees to maintain a business checking account. “Most small businesses are low margin, high cash flow, so they don’t have $4,000 just laying around,” Nguyen told TechCrunch. “We found in our analysis that micro-SMBs actually end up paying on average $450 in overdraft fees a year.”

Nguyen’s new startup Hatch recently launched its first two products and announced today it has secured a total of $20 million in funding from investors like Kleiner Perkins, Foundation Capital, SVB and Plaid’s founders. The fintech’s Hatch Business Checking accounts cost $10 a month, don’t charge non-sufficient funds (NSF) or overdraft fees and include cashback offers. Eligible account holders can also enroll in Hatch Cover, which covers overdrafts up to $100, or apply for lines of credit.

Some of Hatch’s customers have hundreds of employees, but Nguyen said the startup primarily focuses on businesses with up to 20 people. Many are run by only one person, who might be setting up a business account for the first time.

Hatch draws on Nguyen’s professional and personal backgrounds. Framed Data, a predictive analytics company, was acquired by Square in 2016. He worked as Square Capital’s head of data science before becoming an entrepreneur-in-residence at Kleiner Perkins in 2018, focusing on fintech and machine learning problems. As a child of immigrants, Nguyen saw firsthand the challenges small businesses can face.

“During my time at Kleiner, the goal was to think about what other problems I wanted to solve. I definitely wanted to solve additional problems within small businesses. I think a lot of what I appreciate about Square’s mission of economic empowerment for small businesses also really resonated with my own family story,” he said. “My parents immigrated here from Vietnam after the war and were like so many immigrants to the States to start small businesses. Figuring out how to use whatever talents I had to try to make it easier to start small businesses was definitely something I wanted to pursue.”

Hatch’s leadership team, including alumni of fintech companies and major financial institutions like Square, Stripe, Morgan Stanley and JP Morgan, talked to small business owners, and found that recent immigrants or people without credit histories were paying the majority of bank fees. The startup raised a $5 million seed round from Kleiner Perkins, Abstract Ventures and former Square executive Gokul Rajaram in January 2019, then a $14 million Series A round from Foundation Capital, SVB and Plaid founders William Hockey and Zack Perret in February 2020.

Hatch Business Checking began rolling out in January and currently has 4,000 users. The company’s inception coincided with an especially brutal time for many small business owners, as they weathered the COVID-19 pandemic’s economic impact and navigated the process of getting government aid through the Coronavirus Aid, Relief and Economic Security (CARES) Act.

“Initially I was a little worried, but as I was talking to all of our small business customers and even as I was doing these interviews, I realized that amidst a global pandemic, it’s been humbling to see the grit and perseverance of small business owners trying to innovate and learn,” Nguyen said.

For example, some of Hatch’s users are restaurants that hadn’t done deliveries before, but quickly signed up for multiple on-demand platforms like Postmates or Uber Eats. Others include accountants and lawyers who figured out how to move their practices online.

Hatch serves businesses in a wide range of sectors, including first-time entrepreneurs.

“There’s been this interesting trend of sole proprietors and individual creators who maybe had a side hustle, and after they were laid off during COVID, they decided, okay, I’m going start a small business,” Nguyen said. “Through our research, that’s actually how a lot of small businesses think of themselves, not as Thomson Tacos LLC for example, but just as myself, as Thomson, a person who is running this business.”

The startup uses machine learning to automate Hatch Business Checking’s online sign-up process and its know your customer (KYC) and know your business (KYB) requirements. This includes confirming business incorporation paperwork, social security or employer ID numbers and regulatory compliance like Office of Foreign Asset Control (OFAC) checks. Hatch can approve applications in less than five minutes. Once that process is complete, customers get a Mastercard virtual number and can link external bank accounts. Hatch also uses machine learning for real-time fraud and risk monitoring.

Nguyen said Hatch launched its overdraft coverage program because “we found it is a really great way for folks to get themselves out of a bind, finish the point sale and then top up their account later.”

If a business with a Hatch Business Checking account needs more working capital, it can apply for a Hatch Business Line of Credit, or loans between $200 to $5,000 at an APR of 18% to 24%. Hatch does not do hard credit checks and sees the credit lines as an alternative to the payday lenders or check cashers that customers without a FICO score or subprime ratings often use.

To screen loan applicants, Hatch uses information from their Business Checking accounts, including activity from connected point-of-sale systems. This allows Hatch to see real-time data and forecast a business’ potential forward revenue. It also enables the company to approve credit lines in as little as two hours.

“A hard credit check is actually quite difficult for recent immigrants or Americans who had trouble in their recent history. If you declare bankruptcy, it takes seven years to get it struck off your credit history,” said Nguyen. “To us, I think the more important factors are whether you actually have a business and whether that business is growing. We have a couple of examples of folks who declared bankruptcy three or four years ago, but they have a business that is booming and growing, and we’re happy to underwrite or originate that line of credit for them.”

But he emphasizes that Hatch, a signatory of the Small Business Owner’s Bill of Rights, does not see lending as a permanent solution and will not encourage its users to take on unnecessary debt.

“I think the reason we feel so strongly about this is that we want to win when our customers win,” Nguyen said. “If all we did was lending, then you would almost have a misalignment of incentives where you want to encourage lending retention. Given our business bank accounts and our revenue model, which is $10 a month and debit interchange, we really win when the business continues to exist. So for us, it’s almost a matter of building that financial independence for our customers.”

Hatch currently covers overdrafts and credit lines with its own balance sheet. “Because we’re using machine learning data to understand our own risk position, the main focus right now is to understand how businesses grow and model those products accordingly,” said Nguyen.

In an emailed statement, Kleiner Perkins partner Ilya Fushman told TechCrunch, “Small businesses account for nearly half of all economic activity in the U.S., but are often hamstrung by the banking ecosystem today. Hatch is democratizing access to the financial resources that small businesses need to start out and grow. Thomson and team are already working with thousands of SMBs and are uniquely suited with the technology and industry expertise to help them grow with the financial resources they need to be successful.”

In his statement about Foundation Capital’s investment, partner Charles Moldow said, “Our view at Foundation Capital is that the next phase of financial innovation is confluence: a coming together of lending and mobile banking. Hatch is a breaker wave of this movement for small businesses. That Thomson and his team were able to so rapidly stand up the only full-solution, mobile-first bank offering for SMBs is a testament to what they can and will accomplish.”

Since Hatch’s Series A, it has grown its team from eight people to 48, hiring remotely during the pandemic. Its plan is to expand its Business Checking accounts and continue building products for the estimated 40 million small businesses in the United States.

“When I think of the future products we can provide, it really centers around how do we make sure that a small business succeeds in starting up correctly and efficiently, and scaling their business,” said Nguyen. “Sometimes that’s financial products like our business accounts. Potentially, it could be software products that help you actually start that business. So there’s a wealth of different ideas and directions in which we can take Hatch.”

Powered by WPeMatico

Bandwango raises $3.1M to power tourism- and experience-focused deals

You might think that a startup whose primary customers are tourism bureaus would have had a pretty rough 2020, but CEO Monir Parikh said Bandwango‘s customer base more than doubled in the past year, growing from 75 to 200.

In Parikh’s words, the Murray, Utah-based startup has built a platform called the Destination Experience Engine which is designed for “connecting businesses with communities.” That means bringing together offers from local restaurants, retailers, wineries, breweries, state parks and more into package deals — such as the Newport Beach Dine Pass and the Travel Iowa State Passport — which are then sold by tourism bureaus.

Obviously, the pandemic dealt a big blow to tourism, but in response, many of these organizations shifted focus to deals that could entice locals to support nearby businesses and attractions. Parikh predicted that even after the pandemic, tourism bureaus will continue to understand that “local-focused tourism is going to be part of the mix of what we do — locals are your ambassadors, they are the best organic marketing channel.”

Plus, Parikh said that as new privacy regulations make it harder to collect data about online visitors, it’s becoming more challenging for tourism bureaus “to prove to their funders that they’re having an economic impact.” So where bureaus were content in the past to advertise deals and then link out to other sites where customers could make the actual purchases, selling the deals themselves has become a new way to prove their worth.

Bandwango founder and CEO Monir Parikh

Bandwango founder and CEO Monir Parikh. Image Credits: Bandwango

With last year’s growth, Bandwango has raised $3.1 million in seed funding led by Next Frontier Capital, with participation from Kickstart, Signal Peak Ventures, SaaS Ventures and Ocean Azul Partners. (The startup had previously raised only $700,000 in funding.)

Parikh said that until now, Bandwango has been a largely full-service option. The selling point, after all, is that the tourism bureaus already “have great relationships with these local businesses,” but the startup can handle the hard work of “trying to wrangle 200 of their local businesses” to offer deals and accept those deals in-store.

“Our mantra is: We become your back office,” he added. But with the new funding, he wants the startup to build a self-serve product as well. “What I say to my team is that a 90-year-old grandmother, as well as 12-year-old teenager, should be able to come into our platform and say, ‘I want to create a local savings program or an ale trail’ and do it end-to-end, without our assistance.”

And while Bandwango is currently focused on providing a white-label solution to its customers (rather than building a consumer deal destination of its own), Parikh said it will eventually distribute these deals more broadly by creating its own “private label brands.”

Powered by WPeMatico

With a team that helped build the brain behind Alexa, HomeX raises $90M

HomeX, a home services platform for homeowners and service providers, has raised $90 million in a funding round led by New Mountain Capital.

New Mountain Capital, a New York-based investment firm with more than $30 billion in assets under management, was the only institutional investor to put money in this round alongside company executives. The company was bootstrapped until a 2019 $50 million-plus debt financing.

Founded in 2017, Chicago-based HomeX aims to “radically improve” home services by pairing service workers with homeowners, both virtually and in person. It also has built software, and offers services for, contractors that are aimed at helping them drive and manage demand “more efficiently.”

Notably, one of the company’s co-founders, CTO Simon Weaver, and several team members were on the development team of Evi, a startup that had built an AI program that can be communicated with using natural language via an app, that was acquired by Amazon in 2012. That technology was essentially the brain behind Amazon’s virtual assistant Alexa. 

HomeX uses artificial intelligence to diagnose home issues virtually before a contractor even goes out to a home, with the goal of helping them resolve a problem faster (by having the necessary equipment ahead of time for example), which in turn makes customers happier. 

“We’re using machine-generated content to create solutions that are specific to a homeowner’s issues,” said  co-founder and president Vincent Payen. “Using machines to understand symptoms, the questions to ask and to actually get to a diagnosis and a recommendation or resolution is where AI absolutely shines and allows us to do things that were not possible even three or five years ago.”

Founder and CEO Michael Werner worked in the $500 billion services industry for years (his family founded Werner Ladders) and recognized just how fragmented it was. He also acknowledges that, especially in certain markets, “there’s a terrible imbalance between very high demand and not enough contractors to do the work, or rather, a terrible labor shortage.”

HomeX Remote Assist in particular virtually connects homeowners (via phone, video or chat) with HomeX’s licensed technicians to diagnose and repair common home issues. That business unit has experienced more than 400% growth in less than a year, according to Werner. Last year, the company grew by “about 5x” the number of contractors on its platform. It declined to reveal revenue figures.

Image courtesy of HomeX

“For homeowners, we’re making home maintenance less complicated,” Werner said. “At the same time, we want to help the contractor succeed. Similar to how telemedicine has changed how medicine is delivered, HomeX Remote Assist is going to change the service experience for taking care of your home.”

Another area of HomeX’s business that is growing rapidly is its B2B offering. Home warranty and insurance companies see remote services “as very additive to make their business more efficient,” notes Payen.

“We are using some of our capital toward a pilot program and a number of business development opportunities there,” he said.

For now, while the company is not profitable overall, it is profitable in the services side of its business, according to Werner. In the last 12 months alone, it has served “hundreds of thousands” of clients via its platform, defined by unique virtual and physical appointments.  

New Mountain Capital Managing Director Harris Kealey said his firm viewed HomeX as a business that is primed to reshape the home and commercial services industry.

“The market is massive and the need for change and innovation is substantial,” he said in a written statement.

Another company in the space, Thumbtack, recently expanded into video home checkups. Thumbtack, a marketplace where you can hire local professionals for home improvement and other services such as repairs, in December acquired Setter, a startup which provided its customers with video home checkups conducted by experts, and then offered personalized plans for how to address any issues.

Thumbtack had laid off 250 employees at the end of March 2020, after the company saw big declines in its major markets. Since then, however, CEO Marco Zappacosta told TechCrunch there’s been “a renewed focus on the home and an acceleration of digital adoption.”

Powered by WPeMatico

Vietnamese electric motorbike startup Dat Bike raises $2.6M led by Jungle Ventures

Son Nguyen, founder and chief executive officer of Dat Bike on one of the startup's motorbikes

Son Nguyen, founder and chief executive officer of Dat Bike

Dat Bike, a Vietnamese startup with ambitions to become the top electric motorbike company in Southeast Asia, has raised $2.6 million in pre-Series A funding led by Jungle Ventures. Made in Vietnam with mostly domestic parts, Dat Bike’s selling point is its ability to compete with gas motorbikes in terms of pricing and performance. Its new funding is the first time Jungle Ventures has invested in the mobility sector and included participation from Wavemaker Partners, Hustle Fund and iSeed Ventures.

Founder and chief executive officer Son Nguyen began learning how to build bikes from scrap parts while working as a software engineer in Silicon Valley. In 2018, he moved back to Vietnam and launched Dat Bike. More than 80% of households in Indonesia, Malaysia, Thailand and Vietnam own two-wheeled vehicles, but the majority are fueled by gas. Nguyen told TechCrunch that many people want to switch to electric motorbikes, but a major obstacle is performance.

Nguyen said that Dat Bike offers three times the performance (5 kW versus 1.5 kW) and 2 times the range (100 km versus 50 km) of most electric motorbikes in the market, at the same price point. The company’s flagship motorbike, called Weaver, was created to compete against gas motorbikes. It seats two people, which Nguyen noted is an important selling point in Southeast Asian countries, and has a 5000W motor that accelerates from 0 to 50 km per hour in three seconds. The Weaver can be fully charged at a standard electric outlet in about three hours, and reach up to 100 km on one charge (the motorbike’s next iteration will go up to 200 km on one charge).

Dat Bike’s opened its first physical store in Ho Chi Minh City last December. Nguyen said the company “has shipped a few hundred motorbikes so far and still have a backlog of orders.” He added that it saw a 35% month-over-month growth in new orders after the Ho Chi Minh City store opened.

At 39.9 million dong, or about $1,700 USD, Weaver’s pricing is also comparable to the median price of gas motorbikes. Dat Bike partners with banks and financial institutions to offer consumers twelve-month payment plans with no interest.

“These guys are competing with each other to put the emerging middle class of Vietnam on the digital financial market for the first time ever and as a result, we get a very favorable rate,” he said.

While Vietnam’s government hasn’t implemented subsidies for electric motorbikes yet, the Ministry of Transportation has proposed new regulations mandating electric infrastructure at parking lots and bike stations, which Nguyen said will increase the adoption of electric vehicles. Other Vietnamese companies making electric two-wheeled vehicles include VinFast and PEGA.

One of Dat Bike’s advantages is that its bikes are developed in house, with locally-sourced parts. Nguyen said the benefits of manufacturing in Vietnam, instead of sourcing from China and other countries, include streamlined logistics and a more efficient supply chain, since most of Dat Bike’s suppliers are also domestic.

“There are also huge tax advantages for being local, as import tax for bikes is 45% and for bike parts ranging from 15% to 30%,” said Nguyen. “Trade within Southeast Asia is tariff-free though, which means that we have a competitive advantage to expand to the region, compare to foreign imported bikes.”

Dat Bike plans to expand by building its supply chain in Southeast Asia over the next two to three years, with the help of investors like Jungle Ventures.

In a statement, Jungle Ventures founding partner Amit Anand said, “The $25 billion two-wheeler industry in Southeast Asia in particular is ripe for reaping benefits of new developments in electric vehicles and automation. We believe that Dat Bike will lead this charge and create a new benchmark not just in the region but potentially globally for what the next generation of two-wheeler electric vehicles will look and perform like.”

Powered by WPeMatico