Fundings & Exits
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Socure raises $100M at $1.3B valuation, proving identity verification is hotter than ever
The COVID-19 pandemic has accelerated digital adoption in a way that no one could have ever anticipated, and as more people conduct more services online and via mobile devices, businesses have had to work even harder to validate users and security. One company working to serve that need, Socure — which uses AI and machine learning to verify identities — announced Tuesday that it has raised $100 million in a Series D funding round at a $1.3 billion valuation.
Given how much of our lives have shifted online, it’s no surprise that the U.S. digital identity market is projected to increase to over $30 billion by 2023 from just under $15 billion in 2019, according to One World Identity. This has led to skyrocketing demand for the services provided by identity verification companies.
The founding team set out on a mission to be able to verify 100% of “good IDs” in real-time while “completely eliminating” identity fraud across the internet.
Historically, Socure has been focused on the financial services industry, but it plans to use its new capital to further expand into “every consumer-facing vertical” including online gaming, healthcare, telco, e-commerce and on-demand services.
The startup’s predictive analytics platform applies artificial intelligence and machine-learning techniques with online/offline data intelligence (from email, phone, address, IP, device, velocity and the broader internet) to verify that people are, in fact, who they say they are when applying for various accounts.
Today, Socure has more than 350 customers including three top five banks, six top 10 card issuers, a “top” credit bureau and over 75 fintechs such as Varo Money, Public, Chime and Stash.
In 2020, Socure grew its customer base by over 85% year over year and expanded its workforce by over 50% to about 240 people today.
Accel led Socure’s latest financing, which included participation from existing backers Commerce Ventures, Scale Venture Partners, Flint Capital, Citi Ventures, Wells Fargo Strategic Capital, Synchrony, Sorenson, Two Sigma Ventures and others.
The round comes less than six months after the company raised $35 million in a round led by Sorenson Ventures, and brings the New York-based company’s total raised to $196 million since its 2012 inception.
Socure founder and CEO Johnny Ayers says his company’s identity management products can help B2C enterprises achieve know-your-customer (KYC) auto-approval rates of up to 97%. This means that financial institutions can more easily capture fraud, for example, via Socure’s single API. The company also claims that by more easily verifying thin-file (those without much credit history) and young consumers, it can help reduce the underbanked population.
The pandemic and resulting shutdowns resulted in a massive demand for trusted digital identity, Ayers believes.
“This growth tracks with a larger trend marked by the broad migration of businesses to accept applications and onboard new customers online, with many companies accelerating their transformation from digital-first to digital-only,” he told TechCrunch.
Overall fraud attempts among Socure’s existing customer base nearly doubled in the second quarter of 2020 — with certain segments seeing rises as high as 150%, according to Ayers.
“These instances did not involve actual fraud but instead were flagged by Socure as suspicious and blocked prior to inflicting damage,” he said.
Looking ahead, the company plans to use its new capital to also enhance its product offering as it continues to develop patents.
Accel partner Amit Jhawar will join Socure’s board as part of the funding round.
In a blog post, Jhawar described Socure as “a purpose-built solution designed to handle the wave of new online users because its machine learning models have learned from every identity it has already seen.”
As former COO at Braintree and general manager at Venmo, Jhawar knows a thing or two about the importance of identity verification, especially in the financial services space.
He wrote: “I knew immediately that the Socure solution would be a game-changer because the solution can be used in every step of the customer lifecycle, from account creation to login to transaction.”
Socure also has hinted that it has an IPO in its future.
In a written statement, Ayers said: “We are incredibly grateful for the chance to innovate and partner to solve this problem with some of the greatest companies in the world and are energized for the opportunities that lay ahead for Socure, especially as we make our march to a potential IPO.”
Via email, he told TechCrunch that the company will “potentially” look at public markets in 2022 or 2023, when it feels “the time is right for the business.”
The story was updated post-publication with live comments from Socure
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London’s Jiffy picks up £2.6M seed to enter the grocery dark store race
Another online grocery delivery and “dark store” operator breaks cover today: London-based Jiffy, which aims to deliver fresh groceries and household essentials in around 15 minutes, has raised £2.6 million in seed funding as it readies for launch.
Backing the upstart, which already faces a plethora of better-funded competitors, is venture capital fund LVL1 Group, with participation from AddVenture, TA Ventures, Vladimir Kholiaznikov, and angel investors Oskar Hartmann, Alexander Nevinskiy and Dominique Locher.
Jiffy says it will use the injection of capital to launch its first stores in London, as early as this month. It plans to make the service available in Westminster, Waterloo, Lambeth, Battersea, Clapham Town, Shoreditch, Bethnal Green, Hackney, Whitechapel, Stepney Green and Leytonstone.
The company will then launch a further 20 local fulfillment hubs across the U.K. later this year, and I understand is already out fundraising again. On its deck is likely a slide highlighting an executive team with online and offline retail chops, including former managers from Sainsbury’s and Deliveroo.
“We live in 2021 when you can purchase a ticket to Mars, but you still can’t get your groceries delivered on demand when you need them,” says Jiffy founder Artur Shamalov, who has previously started several companies in the food and delivery space. “The online grocery shopping experience is frustrating for most U.K. customers, as slots are often unavailable for days and weeks in advance, and some stores charge a premium fee for a ‘rapid’ delivery that still takes up to two hours. We believe it shouldn’t be this way, and that getting your groceries should be as accessible and affordable as shopping at an offline grocery store, but with the convenience of an ultrafast delivery service.”
To that end, Shamalov says that Jiffy is creating a service it believes will partially replace the traditional daily grocery shop. This will see it offer a variety of fruits and vegetables, meats, meals and household essentials from popular brands and local suppliers, with a total product range “exceeding” 2,000 SKUs per store.
“Our goal is to make it as accessible as possible for a very wide audience: from busy parents juggling work, raising children and an active social life to busy professionals in urban areas for whom saving time on essential shopping means they are free to use it for activities they really enjoy,” says the Jiffy founder. “We also think of the many vulnerable people who don’t feel safe going to supermarkets these days. They shouldn’t have to worry about their safety when they run out of bread or milk, nor should they have to wait several hours or days for their order to arrive.”
Jiffy joins a host of European startups that have raised money on the promise of delivering grocery and other convenience store items within 10-20 minutes of ordering. They do this by building out their own hyperlocal, delivery-only fulfilment centres — so-called “dark stores” — and recruiting their own delivery personnel. This full-stack or vertical approach and the visibility it provides is then supposed to produce enough supply chain and logistics efficiency to make the unit economics work, although that part is far from proven.
On how competitive the grocery and convenience dark store market is already becoming in the U.K. and elsewhere in Europe, Shamalov notes it’s still a relatively new space, and that all players are creating the infrastructure required to make instant grocery delivery possible. “We believe that within a couple of years, instant grocery delivery will become an essential part of urban infrastructure, in the same way water pipes, broadband lines and telecoms are now,” he says. “So, in a sense, we are all building this new infrastructure together, and we are all competing jointly against the traditional grocery distribution channels.”
The growing (though not definitive) list includes Berlin’s Flink, which has raised $52 million in seed financing in a mixture of equity and debt, and Berlin HQ’d Gorillas, which has raised $44 million in Series A funding and recently expanded to London in addition to Germany and Netherlands. Also operating in London are Weezy, Getir, Dija and Zapp. The U.S. unicorn goPuff is also reportedly looking to expand into Europe and has held talks to acquire or invest in the U.K.’s Fancy.
It’s not just a land grab but a capital grab, too, since the model is an infrastructure play as much as anything. Large amounts of financing will be needed to build stores and run loss leading customer acquisitions campaigns, something that is already ramping up in London. In contrast to competitors, although it is yet to launch, Jiffy appears underfunded.
“We don’t think we are underfunded,” says Shamalov, pushing back. “We take as much capital as we think is efficient considering dilution of the founders and building the company step by step rather than missing out on overpromised ambitions.
“We don’t necessarily agree that having the most funding and overspending on acquisition and expansion will automatically lead to a greater success in this industry. Hyperlocal business models require a hyperlocal approach to everything, so our focus is on expanding within just one market, instead of going globally.”
In addition, Shamalov claims that Jiffy is seeing strong inbound interest from investors, which he says is surprising since the startup is still operating in a stealth mode. “We are confident the next funding round will be a solid step forward,” he adds.
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Customer experience startup Sprinklr files confidential S-1 with SEC
Sprinklr, a New York-based customer experience company, announced today it has filed a confidential S-1 ahead of a possible IPO.
“Sprinklr today announced that it has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (the ‘SEC”) relating to the proposed initial public offering of its common stock,” the company said in a statement.
It also indicated that it will determine the exact number of shares and the price range at a later point after it receives approval from the SEC to go public.
The company most recently raised $200 million on a $2.7 billion valuation last year. It was its first fundraise in 4 years. At the time, founder and CEO Ragy Thomas said his company expected to end 2020 with $400 million in ARR, certainly a healthy number on which to embark as a public company.
He also said that Sprinklr’s next fundraise would be an IPO, making him true to his word. “I’ve been public about the pathway around this, and the path is that the next financial milestone will be an IPO,” he told me at the time of the $200 million round. He said that with COVID, it probably was a year or so away, but the timing appears to have sped up.
Sprinklr sees customer experience management as a natural extension of CRM, and as such a huge market potentially worth $100 billion, according to Thomas. But he also admitted that he was up against some big competitors like Salesforce and Adobe, helping explain why he fundraised last year.
Sprinklr was founded in 2009 with a focus on social media listening, but it announced a hard push into customer experience in 2017 when it added marketing, advertising, research, customer and e-commerce to its social efforts.
The company has raised $585 million to date, and has also been highly acquisitive, buying 11 companies along the way as it added functionality to the base platform, according to Crunchbase data.
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Should there be some law against raising three times in one year?
Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.
Ready? Let’s talk money, startups and spicy IPO rumors.
Every quarter we dig into the venture capital market’s global, national, and sector-based results to get a feel for what the temperature of the private market is at that point in time. These imperfect snapshots are useful. But sometimes, it’s better to focus on a single story to show what’s really going on.
Enter AgentSync. I covered AgentSync for the first time last August, when the API-focused insurtech player raised a $4.4 million seed round. It’s a neat company, helping others track the eligibility of individual brokers in the market. It’s a big space, and the startup was showing rapid initial traction in the form of $1.9 million in annual recurring revenue (ARR).
But then AgentSync raised again in December, sharing at the time of its $6.4 million round that the valuation cap had grown by 4x since its last round. And that it had seen 4x revenue growth since the start of the pandemic.
All that must sound pretty pedestrian; a quickly-growing software company raising two rounds? Quelle surprise.
But then AgentSync raised again this week, with another grip of datapoints. Becca Szkutak and Alex Konrad’s Midas Touch newsletter reported the sheaf of data, and The Exchange confirmed the numbers with AgentSync CEO Niji Sabharwal. They are as follows:
- Present-day revenues of less than $10 million, but with ARR growing by 6x in 2020 after 10x expansion in 2019.
- No customer churn to date.
- Its $25 million Series A valued the company at $220 million, which Konrad and Szkutak describe as “exactly 10x AgentSync’s valuation from eight months ago.”
That means AgentSync was worth $22 million when it raised $4.4 million, and the December round was raised at a cap of around $80 million. Fun.
Back to our original point, the big datasets can provide useful you-are-here guidance for the sector, but it’s stories like AgentSync that I think better show what the market is really like today for hot startups. It’s bonkers fast and, even more, often backed up by material growth.
Sabharwal also told The Exchange that his company has closed another $1 million in ARR since the term sheet. So its multiples are contracting even before it shared its news.
2021, there you have it.
Meet Conscience.vc
Also this week I got to meet Ariana Thacker, who is building a venture capital fund. Her route to her own venture shop included stops at Rhapsody Venture Partners, and some time at Predictive VC. Now she’s working on Conscience.vc, or perhaps just Conscience.
Her new fund will invest in companies worth less than $15 million, have some form of consumer-facing business model (B2B and B2B2C are both fine, she said), and something to do with science, be it a patentable technology or other sort of IP. Why the science focus? It’s Thacker’s background, thanks to her background in chemical engineering and time as a facilities engineer for a joint Exxon-Shell project.
All that’s neat and interesting, but as we cover zero new-fund announcements on The Exchange and almost never mini-profile VCs, why break out of the pattern? Because unlike nearly everyone in her profession, Thacker was super upfront with data and metrics.
Heck, in her first email she included a list of her investments across different capital vehicles with actual information about the deals. And then she shared more material on different investments and the like. Imagine if more VCs shared more of their stuff? That would rock.
Conscience had its first close in mid-January, though more capital might land before she wraps up the fundraising process. She’s reached $4 million to $5 million in commits, with a cap of $10 million on the fund. And, she told The Exchange, she didn’t know a single LP before last summer and only secured an anchor investor last October.
Let’s see what Thacker gets done. But at a minimum I think she’ll be willing to be somewhat transparent as she invests from her first fund. That alone will command more attention from these pages than most micro-funds could ever manage.
A whole bunch of other important shit
The week was super busy, so I missed a host of things that I would have otherwise liked to have written about. Here they are in no particular order:
- FalconX, a startup that powers crypto-trading on other platforms, raised $50 million this week. The round comes after the company raised $17 million last May. I wrote about that here. Tiger Global led the round, natch, as it has led nearly every round in the last month.
- The FalconX round matters as the company grew from what we presume was a modest trading and revenue base into something much larger. Per the company, in “less than a year” the company’s “trading volume” grew by 12x and its “net revenue” grew 46x. That’s a lot.
- Privacera also raised $50 million this week. Insight Partners led the round. The deal caught my eye as it promised a “cloud-based data governance and security solution.” That reminded me of Skyflow, a quickly-growing startup that I thought might have a similar product. Privacera CEO Balaji Ganesan politely corrected my confusion in an email saying that “Skyflow is like a vault for customer data. They replace customer data with tokens. Our focus is on data governance, so it is broader. We don’t store customer data within our solution.” Fair enough. It’s still an interesting space.
- And then there’s Woflow, which VentureBeat actually got to before I could. I chatted with the company this week, but sadly have more notes than open word count today. So let it suffice to say that the company’s model of selling structured merchant data is super cool. And the fact that it has linked up with customers in its first vertical (restaurants) like DoorDash is impressive.
- Its round was led by Craft Ventures, a firm that has been pretty damn active in the API-powered startup landscape in recent months. More to come on Woflow.
Various and Sundry
Closing, I learned a lot about software valuations here, got to noodle on the epic Roblox direct listing here, dug into fintech’s venture successes and weaknesses, and checked out the Global-e IPO filing. Oh, and M1 Finance raised again, while Clara and Arist raised small, but fun rounds.
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TaxDown banks ~$3M for tech that helps people get their taxes done
Madrid-based TaxDown, which automates income tax filing by calculating regional deductions due to users so they don’t have to navigate complex tax rules themselves, has raised €2.4 million (~$3M) in seed funding.
US-based FJ Labs has joined TaxDown’s investment board as it closes the seed round. It says all its previous investors participated in the round, including James Argalas (Presidio Union); Abac Nest, Abac’s venture capital business; Baldomero Falcones, the former Chairman at Mastercard; and the founders of Jobandtalent, Juan Urdiales and Felipe Navío (another Madrid-based startup).
For the past three years TaxDown been offering a service in Spain but is now eyeing international expansion, as well as further growth in its home market.
Last year, it says it managed more than €29M in taxes for users — delivering savings of €4M+ to users.
Its target is to hit 500,000 users in Spain this year. While international expansion is planned for the second half of 2021, with TaxDown saying it’s focused on other European and Latin American markets.
“From the beginning, our ambition has been to help people fill in their taxes all over the world. That is why we developed our proprietary software/tax language that allows a tax expert with no coding capabilities to translate the tax law into calculation and logic that can be interpreted by our backend seamlessly,” says Enrique García, CEO and co-founder. “This tax language allowed us to launch in Spain in 4 months with only one tax consultant. We are confident that we can launch a new country in only 6 months.”
“The tax filing process is far from being simple,” he goes on, explaining how its tech simplifies income tax filing in Spain. “Currently, when using the Spanish Tax Agency tax-filling tool, taxpayers need to manually apply deductions on their tax forms. The problem is, with national regional deductions being different in each region in Spain, taxpayers often do not even know they’re entitled to those deductions. Thus, by not applying them to their tax form, they lose money. What TaxDown does is leverage the advanced Spanish Tax Agency technology, which offers an API to request the financial data related to a taxpayer — always with prior authorization from the user — with 2.000+ datapoints.
“Once we have that, our algorithm ‘RITA’ is capable of understanding the user’s personal and financial data, select the optimum questions that the user needs to answer — an average of 9 over a database of 3.000+ – and precisely calculate the tax return, with no errors.”
“Technology is the heart of TaxDown,” he adds. “Besides our algorithm RITA that has been trained with over 40.000+ tax returns, today we also use AI to help our ‘taxers’ with tips on how to lower future tax bills, and we have started working on live income tax simulation for our users throughout the entire year.”
García says TaxDown calculated more than 42,000 tax returns last year with a team of just two in-house tax experts — thanks to proprietary internal tools which allow them to handle this scale (by being “80x more efficient than the Spanish average”, as he puts it). He adds that further efficiency gains are expected.
“We have developed a machine-learning tool that flags the tax returns that need to be reviewed before filing based on historical data. Thus, we continuously increase the percentage of tax returns that are automatically submitted with no manual intervention,” he tells TechCrunch, adding: “Thanks to this feature, we expect to improve our efficiency at least 5x versus last year.”
According to García, TaxDown has never had any filings rejected for inaccuracies because he says its algorithms continually run tests and validate the information with the authorities. “Furthermore, our technology can flag errors in real time in case that there is a discrepancy, so our tax experts can manually check the tax return form if needed,” he adds.
Its business model — currently — is a sort of twist on freemium, in that it will only charge users if the income tax savings it calculates for them exceed €35.
García says that so far an average of three out of 10 users see financial savings from using its tool — but he suggests it’s not only savings that motivate users; he says they also want reassurance that they are taking “the best approach with their taxes: doing them effortlessly, correctly, with all the guarantees, tapping for experts’ live help at any time, ensuring the best result they can get, and of course knowing that we have their backs in case of an audit”.
Given that wider relationship it’s building with users, TaxDown sees potential to evolve its business model by expanding to offer additional fintech services, such as financial advice, in the future.
“Our vision goes far beyond income tax return preparation, we believe that tax data is becoming one of the most valuable data assets for people (take Trump’s tax returns for example), and we want to assess our ’taxers’ based on the best and more qualitative information that we can get,” says García. “Therefore, in the future we want to be a trusted financial advisor not just for taxes, but for personal finances as well. We believe we are well positioned to be an intermediary between our users and financial institutions.”
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Why I’m hitting pause on ARR-focused coverage
As 2021 kicked off, I reformulated a series of posts we published last year focused on startups that had reached the $100 million ARR (annual recurring revenue) mark. In our refreshed effort, we cut the target in half and dug up companies around the $50 million ARR threshold. The goal was to figure out what those firms were going through as they reached material scale, not after they had achieved effective pre-IPO status.
And the results were a bit medium.
While it was fun to chat with OwnBackup, Assembly, SimpleNexus and PicsArt, ultimately we were getting similar notes from each company: Hiring is incredibly important as a company scales, founders have to cede decision-making, and as startups grow from $30 million ARR to $50 million or more, they must harden internal systems and build business infrastructure.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
All that made sense, but it wasn’t entirely scintillating. I meant to keep the project going; I had publicly made noise about the effort and had a few interviews in the bag that were collecting dust (and emails from various PR folks).
But they wound up in the Google Docs graveyard as the news cycle somehow managed to keep accelerating, meaning that the time required to execute the somewhat effort-intensive series dried up as I held on for dear life as the early, middle, late and IPO-stage startup market stormed.
And so after some reflection, it’s time to admit defeat.
For now, I’m hitting pause on the $50 million ARR series and whatever might have come from the $100 million ARR legacy effort. I may bring it back at some point, but for now, there are just more pressing and interesting things to work on.
What follows is what I believe to be the remainder of my notes from interviews that never saw the light of day. So, one last time, let’s discuss some big startups that are scaling quickly: Appspace, Synack and Druva. We’ll proceed in alphabetical order.
Appspace
The Exchange caught up with Appspace a bit ago, chatting with a few of its executives, including CMO Scott Chao and CEO Brandon Miles. It’s an interesting company that sells a software platform that powers in-office displays and kiosks. You’ve seen office sign-in screens at a welcome desk, screens outside conference rooms showing how booked they are, or company messaging and the like on various large screens? That’s what Appspace’s software does.
And the company has an interesting vibe. Unlike nearly every other startup I’ve met, Appspace doesn’t think it is saving the world. In our chat, the company joked that its culture is to move quickly, but with the cognizance that they aren’t curing cancer.
Such modesty might feel odd, but it was actually refreshing. Appspace’s job is to white-label itself, let its customers speak to their workers through its various apps (including mobile) and services, and simply feature rock-solid uptime.
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Disruptel raises $1.1M to make smart TVs smarter
St. Louis-based voice assistant startup Disruptel is announcing that it has raised $1.1 million in seed funding.
The money comes from an impressive group of investors who seem well-aligned with what the startup is aiming to do — namely, build a voice assistant that can provide detailed information about what’s happening on your TV screen. Those investors include PJC and Progress Ventures (which led the round), along with DataXu co-founder and former CEO Mike Baker, Siri co-founder Adam Cheyer, Sky executive Andrew Olson and DataXu co-founder Bill Simmons.
Disruptel CEO Alex Quinn told me that he began to pursue the idea in high school — the initial idea was more focused on TV gesture controls, but he decided that there was a bigger opportunity in the fact that “smart TVs don’t know what’s going on on their own screen.”
So he said Disruptel has built technology that has “a contextual understanding of everything that’s happening on the screen — every product, all of that data.” So for example, you could use the technology to ask your TV, “Who is the person in the brown shirt?”
Quinn’s description reminded me of Amazon’s X-Ray technology, which can tell you about the actors on-screen, as well as additional trivia about whatever movie or TV you’re watching on Amazon Prime. But he said that Amazon’s solution (as well as a similar one from Google) involves “static data — the videos have all been pre-processed.” With Disruptel, on the other hand, “everything is happening in real time,” which means it could theoretically work with any piece of content.
Disruptel’s flagship product Context is a voice assistant designed to work with smart TVs and their remotes. Quinn said he’s hoping to partner with smart TV manufacturers and streaming services and get this into the hands of viewers in the second half of this year.
In the meantime, the company has already created a Smart Screen extension for Google Chrome that you can try right now (using the extension, I successfully identified the actors on-screen during multiple scenes of an episode of “The Flash”). Quinn said the company is using the extension as way to test the product and gather engagement data.
Baker (who sold his adtech company dataxu to Roku in 2019) said that he was convinced to back the company after seeing a demo of the product: “It was interesting to see the power, the fluidity of the experience.”
He also suggested that Disruptel’s tech creates new opportunities to improve on the smart TV advertising experience, which he described as largely consisting of “crap” — though he also pointed to Hulu as an example of a service that can be successful with “non-intrusive advertising and interstitial ads.”
Asked how a high school student could create this kind of technology, Quinn (who is now 21) said, “We had to learn. Our team is very focused on machine learning, and our machine learning engineers were reading research paper after research paper. We think that we have found the best research solutions.”
He added that if Disruptel had followed the leads of the big players and focused on pre-processing content, “We would never even have begun that journey.”
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Can you beat Google with Google’s brains?
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
Natasha and Danny and Alex and Grace were all here to chat through the week’s biggest tech happenings. Like every week, we had to leave a lot of great stuff on the cutting-room floor. But, we did get to touch on a bunch of news that we feel really matters.
Also we do wind up talking about a few Extra Crunch pieces, which is where our deeper analysis on news items lives. If the paywall is a bother, you can get access while saving 50% with the code “EQUITY.”
Here’s what we got into:
- Crypto-art and the NFT boom continue. Check out what Beeple just did. Danny has an opinion on the matter.
- The Roblox direct-listing does very little actually solve the IPO pricing issue. That said, well done Bloxburg.
- We talked about the Coursera S-1, which gave us the first financial peek into an education company revitalized by the pandemic.
- The numbers needed context, so our follow up coverage gives readers 5 takeaways from the Coursera IPO.
- Language learning has a market, and it’s big. We talked about Preply’s $35 million raise and why tutoring marketplaces make sense.
- Dropbox is buying DocSend, which makes pretty good sense. Even if the exit price won’t matter much for bigger funds. We’re still witnessing Dropbox and Box add more features to their product via acquisitions. Let’s see how it impacts their revenue growth.
- Zapier buys Makerpad. We struggled to pronounce Zapier, but did have some notes on the deal and what it might mean for the no-code space.
- Sticking the acquisition theme, PayPal bought Curv. If you were looking for more evidence that big companies are taking crypto seriously, well, here it is.
- And to close we nerded out about Neeva. Can a Google-competitor take on Google if it was founded by ex-Googlers?
The show is back Monday morning. Stay cool!
Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!
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Coupang follows Roblox to a strong first day of trading
Another day brings another pubic debut of a multibillion dollar company that performed well out of the gate.
This time it’s Coupang, whose shares are currently up just over 46% to more than $51 after pricing at $35, $1 above the South Korean e-commerce giant’s IPO price range. Raising one’s range and then pricing above it only to see the public markets take the new equity higher is somewhat par for the course when it comes to the most successful recent debuts, to which we can add Coupang.
The company’s mix of rapid growth and slimming deficits appear to have found an audience among public money types, so let’s quickly explore the price they paid. What was the company worth at its IPO price, and what is worth now? And, of course, we’ll want to calculate revenue run rates for each figure.
Oh — we’ll also need to calculate how much money SoftBank made. Inverted J-Curve indeed!
Coupang’s IPO and current value
As Renaissance Capital notes, Coupang boosted its share allocation to 130 million shares from 120 million. This made the value of both primary and secondary shares in its public offering worth a total of $4.55 billion. That’s a lot of damn money.
At its IPO price of $35, the same source pegged the company’s fully diluted IPO valuation at $62.9 billion. By our accounting, the company’s simple valuation at its IPO price came to $60.4 billion. Those numbers are close enough that we’ll just stick with the diluted number out of kindness to the company’s fans.
Doing some quick math, Coupang is worth around $92 billion at the moment. That’s a huge number that nearly zero companies will ever reach. Some do, of course, but as a percentage of startups that start it’s an outlier figure.
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Chatbot startup Heyday raises $5.1M
Montreal-based Heyday announced today that it has raised $6.5 million Canadian ($5.1 million in US dollars) in additional seed funding.
Co-founder and CEO Steve Desjarlais told me that the startup’s goal is to allow retailers to support more automation and more personalization in their online customer interactions, while co-founder and CMO Etienne Merineau described it as an “all-in-one unified customer messaging platform.”
So whether a customer is sending a message from Facebook Messenger, WhatsApp and Google’s Business Messages or just via email, Heyday brings all that communication together in one dashboard. It then uses artificial intelligence to determine whether it’s a customer service or sales-related interaction, and it automates basic responses when possible.
Heyday chatbots can provide order updates or even recommend products (it integrates with Salesforce, Shopify, Magento, Lightspeed and PrestaShop), then route the conversation to a human team member when necessary.
There are other platforms that combine customer service and sales, but at the same time, Merineau said it’s important to treat the two categories as distinct and trust that a good service experience will lead to sales in the feature.
Image Credits: Heyday
“We believe that helping is the new selling,” he said.
Desjarlais added, “We’re really against the ticket ID system. A customer is not a ticket …
I truly believe that every single customer is a relationship with a brand that needs to be nurtured over time and that will give more value to the brand over time.”
Heyday was founded in 2017 and says that over the past two quarters, it has doubled recurring revenue. Customers include French sporting good company Decathlon, Danish fashion house Bestseller to food and consumer product brand Dannon — Merineau noted that the platform was “bilingual out of the box” and has seen strong international growth.
“Retailers who believe that [the changes brought about by] COVID-19 are temporary are in the wrong mindset,” he said. “The new mantra of future-forward brands is ‘adapt or die.’ … Brands obviously want to delvier great service, but they care about the bottom line. We help them kill two birds with one stone.”
The startup had previously raised $2 million Canadian, according to Crunchbase. This new round comes from existing investors Innovobot and Desjardins Capital. Merineau said the money will help Heyday “double down on the U.S. and scale.”
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