Fundings & Exits
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Rephrase.ai raises $1.5M to use synthetic media for personalized sales pitches
Bangalore-based Rephrase.ai has an ambitious vision for reshaping how movies and videos are made.
CEO Ashray Malhotra laid it out for me yesterday, saying that his co-founder Nisheeth Lahoti “came up with this concept — he wants to build an engine that can take any script as input and create a professional movie,” no filming required.
But Rephrase.ai is starting with what Malhotra said is a more “short-term, monetizable” goal: Offering technology that makes it easy to create personalized sales videos.
The startup was part of the Techstars Bangalore program in 2019 and is announcing today that it has raised $1.5 million in seed funding led by Lightspeed Venture Partners and AV8 Ventures.
Malhotra demonstrated the technology for me, showing me how a salesperson can select a model, a background and a voice, and enter text that the model will recite. They can then export that video for use in a variety of sales tools.
This is valuable for, he said, because sending personalized video messages in sales emails can lead to “an insane increase” in clickthrough rates. But creating all those videos can be a huge chore, if not downright impossible.
And while there are plenty of other startups working on synthetic media, Malhotra said Rephrase.ai is set apart by the 18 months the team spent developing technology that can take 10 minutes of footage and “predict how the lip movements of the person would have been if you’d shot them [saying any phrase] in an actual studio.”
You can see the results for yourself in the video above. Personally, I was impressed by the lip movements but disconcerted by the fact that Rephrase.ai customers can pair any model with any voice, leading to some strange combinations that feel more like badly dubbed movie than an effective sales pitch.
When I brought this up, Malhotra replied that some clients will want to take the time “perfecting it out, finding the right voices, the right costumes, the right personality of the actors,” while other clients might be fine spending less time to create something a little less convincing.
It’s also worth noting that Rephrase.ai has several policies designed to prevent the creation of deceptive deepfakes: Presenters can control who has the authority to create videos using their faces, the platform is only open to authorized businesses and videos are created from scratch, rather than transferring someone’s face onto an existing person.
Malhotra said Rephrase.ai is currently talking to a number of potential customers, but those discussions are in early stages. He also suggested that the technology could expand fairly quickly into areas like chatbots and education.
“I think it’s going to open a whole new world of creativity,” he said. “When you and I want to express something, we’re most likely to write a text document, but as a viewer, we want to see a video. They’ve been disconnected because video creation is really difficult.”
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NUVIA raises $240M from Mithril to make climate-ready enterprise chips
Climate change is on everyone’s minds these days, what with the outer Bay Area on fire, orange skies above San Francisco, and a hurricane season that is bearing down on the East Coast with alacrity (and that’s just the United States in the past two weeks).
A major — and growing — source of those emissions is data centers, the cloud infrastructure that powers most of our devices and experiences. That’s led to some novel ideas, such as Microsoft’s underwater data center Project Natick, which just came back to the surface for testing a bit more than a week ago.
Yet, for all the fun experiments, there is a bit more of an obvious solution: just make the chips more energy efficient.
That’s the thesis of NUVIA, which was founded by three ex-Apple chip designers who led the design of the “A” series chip line for the company’s iPhones and iPads for years. Those chips are wicked fast within a very tight energy envelope, and NUVIA’s premise is essentially what happens when you take those sorts of energy constraints (and the experience of its chip design team) and apply them to the data center.
We did a deep profile of the company last year when it announced its $53 million Series A, so definitely read that to understand the founding story and the company’s mission. Now about one year later, it’s coming back to us with news of a whole bunch of more funding.
NUVIA announced today that it has closed on a $240 million Series B round led by Mithril Capital, with a bunch of others involved listed below.
Since we last chatted with the company, we now have a bit more detail of what it’s working on. It has two products under development, a system-on-chip (SoC) unit dubbed “Orion” and a CPU core dubbed “Phoenix.” The company previewed a bit of Phoenix’s performance last month, although as with most chip companies, it is almost certainly too early to make any long-term predictions about how the technology will settle in with existing and future chips coming to the market.
NUVIA’s view is that chips are limited to about 250-300 watts of power given the cooling and power constraints of most data centers. As more cores become common pre chip, each core is going to have to make do with less power availability while maintaining performance. NUVIA’s tech is trying to solve that problem, lowering total cost of ownership for data center operators while also improving overall energy efficiency.
There’s a lot more work to be done of course, so expect to see more product announcements and previews from the company as it gets its technology further finalized. With $240 million more dollars in the bank though, it certainly has the resources to make some progress.
Shortly after we chatted with the company last year, Apple sued company founder and CEO Gerald Williams III for breach of contract, with the company arguing that its former chip designer was trying to poach employees for his nascent startup. Williams counter-sued earlier this year, and the two parties are now in the discovery phase of their lawsuit, which remains ongoing.
In addition to lead Mithril, the round was done “in partnership with” the founders of semiconductor giant Marvell (Sehat Sutardja and Weili Dai), funds managed by BlackRock, Fidelity, and Temasek, plus Atlantic Bridge and Redline Capital along with Series A investors Capricorn Investment Group, Dell Technologies Capital, Mayfield, Nepenthe LLC, and WRVI Capital.
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Airship acquires SMS commerce company ReplyBuy
Airship is announcing that it has acquired mobile commerce startup ReplyBuy.
The startup (which was a finalist at TechCrunch’s 1st and Future competition in 2016) works with customers like entertainment venues and professional and college sports teams to send messages and sell tickets to fans via SMS. It raised $4 million in funding from Sand Hill Angels, Kosinski Ventures, SEAG Ventures, Enspire Capital, MRTNZ Ventures and others, according to Crunchbase.
Airship, meanwhile, has been expanding its platform beyond push notifications to cover customer communication across SMS, email, mobile wallets and more. But CEO Brett Caine said this is the first time the company is moving into commerce.
While sports and concerts tickets might not be a booming market right now, Caine suggested that the company is actually seeing increased purchasing activity “in and around the Airship platform” as businesses try to drive more in-app purchases. He also suggested that both the COVID-19 pandemic and increased restrictions on mobile data collection and ad targeting are going to “accelerate direct-to-consumer motion by large brands.”
Airship isn’t disclosing the deal price, but Caine said the seven-person ReplyBuy team will be joining the company, with CEO Brandon O’Halloran becoming Airship’s general manager of commerce and CTO Anthony Saia leading the commerce engineering team.
“Nobody directly connects more brands to mobile consumers than Airship,” O’Halloran said in a statement. “Joining Airship offers ReplyBuy the opportunity to serve the global market with a more comprehensive solution across more industries, and provide more valuable mobile customer experiences.”
Caine added, “These are really key roles, demonstrating the importance, in our view, of extending commerce to the customer engagement experience.”
He also said that Airship will continue to support ReplyBuy as a standalone product, while also integrating and extending its capabilities to other areas of the Airship platform.
“This one-to-one commerce at scale is a key part of the ReplyBuy solution,” he said. “We’re going to bring it into all the digital channels that Airship powers [to create] a seamless, fast, easy experience around commerce.”
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Selling a startup can come with an emotional cost
Every founder dreams of building a substantial company. For those who make it through the myriad challenges, it typically results in an exit. If it’s through an acquisition, that can mean cashing in your equity, paying back investors and rewarding long-time employees, but it also usually results in a loss of power and a substantially reduced role.
Some founders hang around for a while before leaving after an agreed-upon time period, while others depart right away because there is simply no role left for them. However it plays out, being acquired can be an emotional shock: The company you spent years building is no longer under your control,
We spoke to a couple of startup founders who went through this experience to learn what the acquisition process was like, and how it feels to give up something after pouring your heart and soul into building it.
Knowing when it’s time to sell
There has to be some impetus to think about selling: Perhaps you’ve reached a point where growth stalls, or where you need to raise a substantial amount of cash to take you to the next level.
For Tracy Young, co-founder and former CEO at PlanGrid, the forcing event was reaching a point where she needed to raise funds to continue.
After growing a company that helped digitize building plans into a $100 million business, Young ended up selling it to Autodesk for $875 million in 2018. It was a substantial exit, but Young said it was more of a practical matter because the path to further growth was going to be an arduous one.
“When we got the offer from Autodesk, literally we would have had to execute flawlessly and the world had to stay good for the next three years for us to have the same outcome,” she said at a panel on exiting at TechCrunch Disrupt last week.
“As CEO, [my] job is to choose the best path forward for all stakeholders of the company — for our investors, for our team members, for our customers — and that was the path we chose.”
For Rami Essaid, who founded bot mitigation platform Distil Networks in 2011, slowing growth encouraged him to consider an exit. The company had reached around $25 million run rate, but a lack of momentum meant that shifting to a broader product portfolio would have been too heavy a lift.
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Endel raises $5M to create personalized ‘sound environments’ that improve productivity and sleep
The pitch for Berlin-based Endel is pretty straightforward, according to its co-founder and CEO Oleg Stavitsky.
“The way I usually describe Endel is: This is a technology that is built to help you focus, relax and sleep,” Stavitsky told me. “Of course, the way we do that is a little more complicated than that.”
The startup is announcing today that it has raised $5 million in Series A funding led by Kevin Rose of True Ventures, with participation from SleepScore Ventures, Techstars Ventures (Endel was part of the Techstars Music Accelerator), Impulse Ventures, Plus 8 Equity Partners, Waverley Capital, Amazon Alexa Fund, Target Global and various angel investors.
Stavitsky said that the team previously worked together on children’s app company Bubl. After selling Bubl, Stavitsky said they began to explore the opportunities around sound — after all, he noticed the growth of playlists designed to help with things like sleep and focus, as well as the growth in mindfulness apps.
“When we started, we said, ‘Let’s just build this machine that can generate ambient music,’ ” he recalled. But he said that as the team did more research, they realized, “It has to be personalized. It cannot just be one song or one playlist or one soundscape. It really depends on the space you’re in.”
So that’s essentially what Endel has built. The startup says its Endel Pacific technology creates “sound environments” designed for your needs — whether that’s focusing, sleeping, relaxing or just when you’re on-the-go. Those environments are shaped, in part, by things like the time of day and the weather, as well as the user’s heart rate and motion.
Image Credits: Endel
Rose said he was excited by “this idea of the closed-loop system that uses real-time feedback to manipulate and change the body in a very positive way.” And he emphasized that Endel is “backed by science.”
Stavitsky said Endel’s approach draws on several areas of science, including research around circadian rhythms (so that it complements where you are in your daily sleep cycle), the pentatonic scale (so that its sounds are pleasant) and sound masking (so that you’re less likely to hear anything distracting).
The company is working with partners to do more to validate the science behind its approach, but it says it’s already applied the experience sampling a method developed by psychologist Mihaly Csikszentmihalyi (who developed and wrote the book on the concept of flow) to show that its sound environments can lead to a 6.3x increase in concentration and a 3.6x decrease in anxiety.
I tried it out myself, listening to Endel’s mix of soothing music and white noise as I worked yesterday (including, of course, as I was writing this post). I won’t claim that I felt an immediate or dramatic increase in energy or focus — but as time went on, I noticed I was working for longer than I normally do without getting distracted or tired.
Endel CEO Oleg Stavitsky
The startup has released apps for iOS, Apple Watch, macOS, Amazon Alexa and Android, and it has been downloaded nearly 2 million times. A subscription costs $49.99 per year.
Stavitsky said Endel is also building a significant business around partnerships, for example by working with Japan’s ANA Airlines to feature its technology on planes, and there are supposedly partnerships in the works with automakers and smart speaker manufacturers as well.
The startup has also signed a deal with Warner Music to algorithmically create songs and albums. Stavitsky said he’s hoping to do more work with musicians, so that when they release new music, there can be both a traditional album and also “a functional, adaptive album that is available to you as a soundscape when you have to work, when you want to go to sleep.”
“The big vision is to ultimately go beyond sound,” he added — starting with an Apple TV app due later this year that incorporates video.
Endel has now raised a total of $7.1 million.
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TransferWise reports accelerating revenue growth to 70% in its March, 2020 fiscal year
TransferWise, a European fintech unicorn, announced the financial results of its fiscal year ending March, 2020.
The company posted strong growth, continued profit and new customer records. TransferWise was most recently valued at $5 billion during a secondary sale worth $319 million in July of this year.
On the results front, we can compare the company’s March 2020 year to its March 2019 year, the results of which we also have available. Here are the nuts and bolts, picking from the provided metrics to share the most material:
- TransferWise fiscal 2020 revenue: £302.6 million, up 70% from its fiscal 2019 result of £179 million. That’s a venture-level revenue result from a mature company that is self-powering.
- TransferWise grew more quickly in its March 2020 year than in its March 2019 year, when it managed a slower 53% growth rate per the company. Accelerating revenue growth at this scale is very valuable.
- TransferWise managed a fourth year of consecutive profitability, generating £21.3 million in “net profit after tax” for the March 2020 fiscal year. The company first started generating profit “since 2017” per its own release, which we presume means the year ending March 2017.
- The company reported that it now has 8 million worldwide customers, up from 6 million in the preceding fiscal year. That’s 33% growth.
- The pace at which business customers sign up for TransferWise appeared to include slower growth, moving from 10,000 per month in the March 2019 year to “over 10,000” in its most recent release.
- TransferWise processed £42 billion in “cross currency transfers,” or around 63% of its total processing volume of £67 billion.
Instead of merely shouting at this point that TransferWise should go public, as it is providing granular data on its performance we’re already somewhat sated. More notes on gross margins would be good, for example, but this level of transparency is still welcome.
Turning to future growth, TransferWise stated in a release that APAC is the company’s “fastest growing region.” Its U.S. business was worth around a fourth of its March 2020 year’s revenue. Europe was just over half for the same period.
The company’s ability to pay for its own growth means that it has not raised money for some time. Indeed, the last equity round that we have on the company is its November, 2017 investment. That capital was $280 million raised at a $1.3 billion pre-money valuation in a deal led by Merian Global Investors and IVP. Since then the company has sold secondary shares from time to time.
That should lessen internal demands for a traditional liquidity event, but not quash them altogether. The unavoidable question is why not go public when the firm already reports so much public performance data. On the other hand, when a company needs no capital, it need not accept advice, either.
Regardless, TransferWise shows that fintech can make money after all.
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Despite a rough year for digital media, Blavity and The Shade Room are thriving
Last week at TechCrunch Disrupt, TechCrunch media and advertising reporter Anthony Ha sat down with Blavity CEO Morgan DeBaun and The Shade Room CEO Angelica Nwandu to chat about their respective media companies, 2020 in the media world and how they view a recent conversation inside of media to hire and retain more diverse workforces.
Blavity is a network of online publications focused on Black audiences across verticals like politics, travel and technology. To date, the company has raised $9.4 million, according to Crunchbase data.
The Shade Room is an Instagram-focused media company that publishes hourly updates on national news, celebrity updates and fashion. Focused on the Black perspective, The Shade Room has attracted more than 20 million followers on Instagram and comments on issues of importance during key national moments.
During her conversation with Ha, Nwandu said that during the Black Lives Matters protests, The Shade Room was akin to a Black CNN.
With both companies founded in 2014, both CEOs have kept their media startups alive during a particularly difficult period. In the last six years, many media brands have shuttered, sold, slimmed or slunk away to the ash heap of history.
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Mirakl raises $300 million for its marketplace platform
French startup Mirakl has raised a $300 million funding round at a $1.5 billion valuation — the company is now a unicorn. Mirakl helps you launch and manage a marketplace on your e-commerce website. Many customers also rely on Mirakl-powered marketplaces for B2B transactions.
Permira Advisers is leading the round, with existing investors 83North, Bain Capital Ventures, Elaia Partners and Felix Capital also participating.
“We’ve closed this round in 43 days,” co-founder and U.S. CEO Adrien Nussenbaum told me. But the due diligence process has been intense. “[Permira Advisers] made 250 calls to clients, leads, partners and former employees.”
Many e-commerce companies rely on third-party sellers to increase their offering. Instead of having one seller selling to many customers, marketplaces let you sell products from many sellers to many customers. Mirakl has built a solution to manage the marketplace of your e-commerce platform.
300 companies have been working with Mirakl for their marketplace, such as Best Buy Canada, Carrefour, Darty and Office Depot. More recently, Mirakl has been increasingly working with B2B clients as well.
These industry-specific marketplaces can be used for procurement or bulk selling of parts. In this category, clients include Airbus Helicopters, Toyota Material Handling and Accor’s Astore. 60% of Mirakl’s marketplace are still consumer-facing marketplaces, but the company is adding as many B2B and B2C marketplaces these days.
“We’ve developed a lot of features that enable platform business models that go further than simple marketplaces,” co-founder and CEO Philippe Corrot told me. “For instance, we’ve invested in services — it lets our clients develop service platforms.”
In France, Conforama can upsell customers with different services when they buy some furniture for instance. Mirakl has also launched its own catalog manager so that you can merge listings, add information, etc.
The company is using artificial intelligence to do the heavy-lifting on this front. There are other AI-enabled features, such as fraud detection.
Given that Mirakl is a marketplace expert, it’s not surprising that the company has also created a sort of marketplace of marketplaces with Mirakl Connect.
“Mirakl Connect is a platform that is going to be the single entry point for everybody in the marketplace ecosystem, from sellers to operators and partners,” Corrot said.
For sellers, it’s quite obvious. You can create a company profile and promote products on multiple marketplaces at once. But the company is also starting to work with payment service providers, fulfillment companies, feed aggregators and other partners. The company wants to become a one-stop shop on marketplaces with those partners.
Overall, Mirakl-powered marketplaces have generated $1.2 billion in gross merchandise volume (GMV) during the first half of 2020. It represents a 111% year-over-year increase, despite the economic crisis.
With today’s funding round, the company plans to expand across all areas — same features, same business model, but with more resources. It plans to hire 500 engineers and scale its sales and customer success teams.
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How has Corsair Gaming posted such impressive pre-IPO numbers?
After the last few weeks of IPOs, you’d be forgiven if you missed Corsair Gaming’s own public offering.
The company is not our usual fare. Here at TechCrunch, we care a lot of about startups, usually technology startups, which often collect capital from private sources on their way to either the bin, an IPO or a buyout.
Corsair is some of those things. It is a private company that builds technology products and it has raised some money while private. But from there it’s a slim list. The company was founded in 1994, making it more a mature business than a startup. And it sold a majority of itself to a private equity group in 2017, valued at $525 million at the time.
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Fair enough. But flipping through the company’s S-1 filings this morning over coffee, I was impressed all the same and want to walk you through a few of the company’s numbers.
If you care about the impending public debuts of Asana (more here) and Palantir (more here) that we expect next week, Corsair will not provide much directional guidance. But its IPO will be a fascinating debut all the same.
Corsair has managed to stay in the gaming hardware world since I was in short pants, and, even better, has managed to turn the streaming boom into material profit. Its S-1 is an interesting document to read. So let’s get into it, because Corsair Gaming is expected to price later today and trade tomorrow morning.
A gaming giant
As with any private-equity-backed IPO, the company’s SEC filings are a mess of predecessor and successor companies, along with long sections that, once you boil them down, ensure that the private equity firm will retain control.
But once you parse the firm’s numbers, here’s the gist from the first six months of 2020:
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The Peloton effect
During the most recent quarter, only a few earnings reports stood out from the rest. Zoom’s set of results were one of them, with the video-communications company showing enormous acceleration as the world replaced in-person contact with remote chat.
Another was Peloton’s earnings from the fourth quarter of its fiscal 2020, which it reported September 10th. The company’s revenue and profitability spiked as folks stuck at home turned to the connected fitness company’s wares.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
Shares of Peloton have rallied around 4x since March, roughly the start of when the COVID-19 pandemic began to impact life in the United States, driving demand for the company’s at-home workout equipment. In late June, the leisure company Lululemon bought Mirror, another connected fitness company aimed at the home market for around $500 million.
With Peloton’s 2019 IPO and its growth along with Mirror’s exit in 2020, connected fitness is demonstrably hot, and private-market investors are taking notice. A recent Tweet from fitness tech watcher Joe Vennare detailing a host of recent funding rounds raised by “digital fitness” companies made the point last week, piquing our curiosity at the same time.
Is there really some sort of Peloton effect driving private investment into lots of connected fitness startups? How hot is the more nascent side of connected fitness?
This morning let’s take a look through some recent funding rounds in the space to get a feel for what’s going on. (If you’re a VC who cares about the sector, feel free to email in your own notes, subject line “connected fitness” please.) We’ll then execute the same search for Q3 2019 and see how the data compares.
Hot Wheels
To start with the current market I pulled a Crunchbase query for all Q3 funding rounds for companies tagged as “fitness” and then filtered out the cruft to get a look at the most pertinent funding events.
Here’s what I came up for for Q3 2020, to date:
- Zwift’s $450 million Series C (TechCrunch coverage).
- Tonal’s $110 million Series D (TechCrunch coverage).
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