Fundings & Exits
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Factorial raises $16M to take on the HR world with a platform for SMBs
A startup that’s hoping to be a contender in the very large and fragmented market of human resources software has captured the eye of a big investor out of the US and become its first investment in Spain.
Barcelona-based Factorial, which is building an all-in-one HR automation platform aimed at small and medium businesses that manages payroll, employee onboarding, time off and other human resource functions, has raised €15 ($16 million) in a Series A round of funding led by CRV, with participation also from existing investors Creandum, Point Nine and K Fund.
The money comes on the heels of Factorial — which has customers in 40 countries — seeing eightfold growth in revenues in 2019, with more than 60,000 customers now using its tools.
Jordi Romero, the CEO who co-founded the company with Pau Ramon (CTO) and Bernat Farrero (head of corporate), said in an interview that the investment will be used both to expand to new markets and add more customers, as well as to double down on tech development to bring on more features. These will include RPA integrations to further automate services, and to move into more back-office product areas such as handling expenses,
Factorial has now raised $18 million and is not disclosing its valuation, he added.
The funding is notable on a couple of levels that speak not just to the wider investing climate but also to the specific area of human resources.
In addition to being CRV’s first deal in Spain, the investment is being made at a time when the whole VC model is under a lot of pressure because of the global coronavirus pandemic — not least in Spain, which has a decent, fledgling technology scene but has been one of the hardest-hit countries in the world when it comes to COVID-19.
“It made the closing of the funding very, very stressful,” Romero said from Barcelona last week (via video conference). “We had a gentleman’s agreement [so to speak] before the virus broke out, but the money was still to be wired. Seeing the world collapse around you, with some accounts closing, and with the bigger business world in a very fragile state, was very nerve wracking.”
Ironically, it’s that fragile state that proved to be a saviour of sorts for Factorial.
“We target HR leaders and they are currently very distracted with furloughs and layoffs right now, so we turned around and focused on how we could provide the best value to them,” Romero said.
The company made its product free to use until lockdowns are eased up, and Factorial has found a new interest from businesses that had never used cloud-based services before but needed to get something quickly up and running to use while working from home. He noted that among new companies signing up to Factorial, most either previously kept all their records in local files or at best a “Dropbox folder, but nothing else.”
The company also put in place more materials and other tools specifically to address the most pressing needs those HR people might have right now, such as guidance on how to implement furloughs and layoffs, best practices for communication policies and more. “We had to get creative,” Romero said.
At $16 million, this is at the larger end of Series A rounds as of January 2020, and while it’s definitely not as big as some of the outsized deals we’ve seen out of the US, it happens to be the biggest funding round so far this year in Spain.
Its rise feels unlikely for another reason, too: it comes at a time when we already have dozens (maybe even hundreds) of human resources software businesses, with many an established name — they include PeopleHR, Workday, Infor, ADP, Zenefits, Gusto, IBM, Oracle, SAP, Rippling, and many others — in a market that analysts project will be worth $38.17 billion by 2027 growing at a CAGR of over 11%.
But as is often the case in tech, status quo breeds disruption, and that’s the case here. Factorial’s approach has been to build HR tools specifically for people who are not HR professionals per se: companies that are small enough not to have specialists, or if they do, they share a lot of the tasks and work with other managers who are not in HR first and foremost.
It’s a formula that Romero said could potentially see the company taking on bigger customers, but for now, investors like it for having built a platform approach for the huge but often under-served SME market.
“Factorial was built for the users, designed for the modern web and workplace,” said Reid Christian, General Partner at CRV, in a statement. “Historically the HR software market has been one of the most lucrative categories for enterprise tech companies, and today, the HR stack looks much different. As we enter the third generation of cloud HR products, with countless point solutions, there’s a strong need for an underlying platform to integrate work across these.”
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Opera Event closes $5M Series A for its esports-focused influencer platform
Today Opera Event, an influencer software service, announced that it closed a $5 million Series A. The Oakland-based startup raised the capital from new lead investor Antera, with prior investors Atlas Ventures, Everblue, and Konvoy Ventures coming along.
According to Crunchbase data, Opera Event had raised at least $1.2 million before this new round.
Opera Event is starting with a focus on influencers in the esports market, a business that founder Brandon Byrne knows well. Byrne previously worked for former esports organization Curse and served as the CFO of Team Liquid; Team Liquid is an active esports organization with players in a number of games, including League of Legends and Starcraft 2.
The startup wants to help esports teams monetize, a likely welcome effort given the industry’s historical issues with revenue generation, and reward micro-influencer fans. How it intends to do that is its core software service, one that Byrne expects will in time work for other verticals and influencer sets. Let’s explore.
Opera Event in practice
It’s perhaps best to explain what Opera Event does with a hypothetical example, built off notes from an interview with Opera Event’s Byrne. Let’s say that Alex Wilhelm Super Awesome Esports (AWSAE) is a small Starcraft 2 team — it’s just big enough to attract some sponsorship, but not as much as the team would like. However, AWSAE’s Starcraft 2 players have dedicated fans, many of whom also stream on Twitch and maintain a presence on Twitter.
By using Opera Event, AWSAE’s fans that stream can join the team’s commercial world, adding its sponsors to their Twitch pages, tweeting out the same campaigns and more. Opera Event sits between the team, its community and capital sources (brands), helping make everything click. It’s a situation that works well for Alex Wilhelm Super Awesome Esports. With its community streaming under its commercial banner, its demonstrable in-market impact (tweet impressions, minutes engaged on Twitch, etc) grows sharply. Its associate small streamers and fans get to take part in in the team’s world, and can be rewarded with things like social follows and other bits of love — all while brands can better deploy capital. (Opera Event calls this “the ability to engage and manage content creators efficiently and at scale.”)
Now AWSAE can get bigger sponsors as it can offer a bigger audience, it can share revenues or provide other succor to its fanbase, and brands can get their whatnot in front of more viewers at once.
One team that Byrne detailed had about 39 members doing around 50 million engaged minutes each month on Twitch. Using his startups software to create two affiliate programs, the same team grew to over 3,000 influencers that generated north of 450 million minutes per month of viewership. The latter set of figures are far more commercially viable.
The aggregation of small streamers is more than adding up views, it turns out. Byrne told TechCrunch that smaller esports streamers have better click through rates than the entertainment categories giants, which could help team fans and other community members that sign up as part of their Opera Event network have outsized impact on sponsor results.
Opera Event takes a material cut of deals it lands through its sales team (25% to 30% per the company) and a small cut for deals that flow through its platform but originated elsewhere (2% to 3%). The model generated around $1.8 million for the startup in 2019, and Opera Event hopes to reach $9 million in revenue this year.
Particularly important in today’s changed market, Byrne told TechCrunch that Opera Event is a quarter away from breaking even. That should keep the company safe during a downturn.
In time, Opera Event wants to add more niches to its stable. Its founder mentioned yoga as an example. Where there are influencers big and small, the startup wants to show up and help facilitate influencer commerce and collaboration.
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Digging into Europe’s Q1 venture results
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re taking a look at a bit of data on the European venture capital scene in Q1. As with our looks at other locales like Silicon Valley and other bits of the United States, we’re taking stock of what happened in the first quarter. Q1 2020 includes pre-COVID-19 results, though as some European countries began to lock-down before the United States, there may be more pandemic-impact in the following results than we’ve seen domestically thus far.
Today’s grip of data is via the folks over at PitchBook, who compiled a venture-focused dig through the continent’s first three months of the year. Let’s parse the top numbers, make a comparison or two and then look to what’s next.
Q1: An ok quarter
Despite COVID-19, China’s broad shuttering and an aged bull market deep, Europe’s venture capital activity in Q1 2020 was mostly fine. It wasn’t great, and there were some less-than-winsome results that could be chalked up to the pandemic, but the first quarter provided an alright start to the year.
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Libeo lets you pay your suppliers without going through your bank account
Meet Libeo, a French startup that just raised a $4.4 million (€4 million) funding round led by LocalGlobe, with Breega and various business angels also participating. The company has built a service that helps you pay your providers much more easily. You no longer have to manually keep track of invoices, log into your banking interface, enter banking information and transfer money.
Libeo targets small and medium companies that don’t necessarily have a dedicated accounting team. It wants to simplify payment processes as much as possible.
It starts by collecting invoices from your suppliers. You can import invoices to your Libeo account directly on Libeo by forwarding emails to a special address, by connecting Libeo to popular services, such as Amazon, or by connecting Libeo with your existing accounting platform, such as QuickBooks or Receipt Bank.
Once your invoices are all on Libeo, the startup automatically fills out payment information based on information on the invoice. It also can identify duplicates and keep track of VAT payments.
After that, Libeo wants to simplify payments. When you sign up, you share your company’s IBAN with Libeo so that it can take money from your account using direct debits. Whenever there’s an outstanding invoice in your Libeo account, you can decide to pay it now or schedule payment for later. Libeo transfers money to your recipient and collects money from your bank account at the same time.
What if it’s a new supplier and you don’t have their banking information? Instead of going back and forth with your supplier to get their IBAN, your supplier receives an email from Libeo with a link. The supplier drags and drops their bank details on Libeo’s web page. Libeo then checks that everything matches with the invoice and automatically adds the IBAN information to the payment.
Over time, if you use Libeo, you get an address book of all your suppliers. You can see how much you’re spending with a specific supplier, track your cash flow and more.
Like modern software-as-a-service tools, Libeo lets you collaborate on your invoices. Multiple people can have a Libeo account with different rights. You can set up an approval workflow as well.
There’s a free plan, but it’s limited to five payments per month. You can then pay to access advanced features and get bigger limits. Five thousand companies are currently using Libeo four months after the initial release. The company has facilitated €2 million in payments.
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Medallia acquires voice-to-text specialist Voci Technologies for $59M
M&A has largely slowed down in the current market, but there remain pockets of activity when the timing and price are right. Today, Medallia — a customer experience platform that scans online reviews, social media, and other sources to provide better insights into what a company is doing right and wrong and what needs to get addressed — announced that it would acquire Voci Technologies, a speech-to-text startup, for $59 million in cash.
Medallia plans to integrate the startup’s AI technology so that voice-based interactions — for example from calls into call centers — can be part of the data crunched by its analytics platform. Despite the rise of social media, messaging channels, and (currently) a shift for people to do a lot more online, voice still accounts for the majority of customer interactions for a business, so this is an important area for Medallia to tackle.
“Voci transcribes 100% of live and recorded calls into text that can be analyzed quickly to determine customer satisfaction, adding a powerful set of signals to the Medallia Experience Cloud,” said Leslie Stretch, president and CEO of Medallia, in a statement. “At the same time, Voci enables call analysis moments after each interaction has completed, optimizing every aspect of call center operations securely. Especially important as virtual and remote contact center operations take shape.”
While there are a lot of speech-to-text offerings in the market today, the key with Voci is that it is able to discern a number of other details in the call, including emotion, gender, sentiment, and voice biometric identity. It’s also able to filter out personal identifiable information to ensure more privacy around using the data for further analytics.
Voci started life as a spinout from Carnegie Mellon University (its three founders were all PhDs from the school), and it had raised a total of about $18 million from investors that included Grotech Ventures, Harbert Growth Parnters, and the university itself. It was last valued at $28 million in March 2018 (during a Series B raise), meaning that today’s acquisition was slightly more than double that value.
The company seems to have been on an upswing with its business. Voci has to date processed some 2 billion minutes of speech, and in January, the company published some momentum numbers that said bookings had grown some 63% in the last quarter, boosted by contact center customers.
In addition to contact centers, the company catered to companies in finance, healthcare, insurance and others areas of business process outsourcing, although it does not disclose names. As with all companies and organizations that have products that cater to offering services remotely, Voci has seen stronger demand for its business in recent weeks, at a time when many have curtailed physical contact due to COVID-19-related movement restrictions.
“Our whole company is delighted to be joining forces with experience management leader Medallia. We are thrilled that Voci’s powerful speech to text capabilities will become part of Medallia Experience Cloud,” said Mike Coney, CEO of Voci, in a statement. “The consolidation of all contact center signals with video, survey and other critical feedback is a game changer for the industry.”
It’s not clear whether Voci had been trying to raise money in the last few months, or if this was a proactive approach from Medallia. But more generally, M&A has found itself in a particularly key position in the world of tech: startups are finding it more challenging right now to raise money, and one big question has been whether that will lead to more hail-mary-style M&A plays, as one route for promising businesses and technologies to avoid shutting down altogether.
For its part, Medallia, which went public in July 2019 after raising money from the likes of Sequoia, has seen its stock hit like the rest of the market in recent weeks. Its current market cap is at around $2.8 billion, just $400 million more than its last private valuation.
The deal is expected to close in May 2020, Medallia said.
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Fishtown Analytics raises $12.9M Series A for its open-source analytics engineering tool
Philadelphia-based Fishtown Analytics, the company behind the popular open-source data engineering tool dbt, today announced that it has raised a $12.9 million Series A round led by Andreessen Horowitz, with the firm’s general partner Martin Casado joining the company’s board.
“I wrote this blog post in early 2016, essentially saying that analysts needed to work in a fundamentally different way,” Fishtown founder and CEO Tristan Handy told me, when I asked him about how the product came to be. “They needed to work in a way that much more closely mirrored the way the software engineers work and software engineers have been figuring this shit out for years and data analysts are still like sending each other Microsoft Excel docs over email.”
The dbt open-source project forms the basis of this. It allows anyone who can write SQL queries to transform data and then load it into their preferred analytics tools. As such, it sits in-between data warehouses and the tools that load data into them on one end, and specialized analytics tools on the other.
As Casado noted when I talked to him about the investment, data warehouses have now made it affordable for businesses to store all of their data before it is transformed. So what was traditionally “extract, transform, load” (ETL) has now become “extract, load, transform” (ELT). Andreessen Horowitz is already invested in Fivetran, which helps businesses move their data into their warehouses, so it makes sense for the firm to also tackle the other side of this business.
“Dbt is, as far as we can tell, the leading community for transformation and it’s a company we’ve been tracking for at least a year,” Casado said. He also argued that data analysts — unlike data scientists — are not really catered to as a group.
Before this round, Fishtown hadn’t raised a lot of money, even though it has been around for a few years now, except for a small SAFE round from Amplify.
But Handy argued that the company needed this time to prove that it was on to something and build a community. That community now consists of more than 1,700 companies that use the dbt project in some form and over 5,000 people in the dbt Slack community. Fishtown also now has over 250 dbt Cloud customers and the company signed up a number of big enterprise clients earlier this year. With that, the company needed to raise money to expand and also better service its current list of customers.
“We live in Philadelphia. The cost of living is low here and none of us really care to make a quadro-billion dollars, but we do want to answer the question of how do we best serve the community,” Handy said. “And for the first time, in the early part of the year, we were like, holy shit, we can’t keep up with all of the stuff that people need from us.”
The company plans to expand the team from 25 to 50 employees in 2020 and with those, the team plans to improve and expand the product, especially its IDE for data analysts, which Handy admitted could use a bit more polish.
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Vestiaire Collective raises $64.2 million for its second-hand fashion platform
Vestiaire Collective just closed another big round of funding in the middle of an economic crisis — the round closed in early April. The startup raised $64.2 million (€59 million) and the company has raised more than $240 million over the year, according to Crunchbase. Vestiaire Collective operates a marketplace of pre-owned fashion items. Users can both sell and buy clothes and accessories on the platform.
There’s a huge list of investors in today’s round — Korelya Capital, Fidelity International-managed funds, Vaultier7, Cuit Invest and existing investors Eurazeo (Eurazeo Growth and Idinvest Venture funds), Bpifrance, Vitruvian Partners, Condé Nast, Luxury Tech Fund and Vestiaire Collective CEO Max Bittner are all participating.
With 9 million members across 90 countries, Vestiaire Collective has become a huge marketplace. And it makes sense that an e-commerce website focused on pre-owned items is working well. There has been a ton of backlash against fast fashion over the past few years.
People now also value circular business models as it becomes more affordable to refresh your wardrobe, especially during an economic crisis, and it is better for the environment.
As always, Vestiaire Collective will use the new influx of cash to expand to more countries. In particular, with Korelya Capital as a new backer, the company will expand to South Korea and Japan this year. While the company started in France, 80% of transactions are now cross-border transactions.
Originally, Vestiaire Collective asked you to send your items to its warehouses to check them before putting them on sale. The startup has been betting on direct shipping from the seller to the buyer in Europe and it has been working well. You can get reimbursed if there’s something wrong with what you ordered though.
Direct shipping has been available in Europe since September 2019 and it now represents over 50% of orders in the region. Up next, Vestiaire Collective will introduce direct shipping in the U.S. this summer and in Asia by the end of 2020.
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Verizon’s BlueJeans acquisition is about more than the work-from-home trend
It would be easy to assume that Verizon’s purchase last week of video-conferencing tool BlueJeans was an opportunistic move to capitalize on the sudden shift to remote work, but the ball began rolling last June and has implications far beyond current work-from-home requirements.
The video-chat darling of the moment is Zoom, but BlueJeans is considered by many to be the enterprise tool of choice. The problem, it seems, is that it had grown as far as it could on its own and went looking for a larger partner to help it reach the next level.
BlueJeans started working with Verizon (which owns this publication) as an authorized reseller before the talks turned toward a deeper relationship that culminated in the acquisition. Assuming the deal passes regulatory scrutiny, Verizon will use its emerging 5G technology to produce much more advanced video-conferencing scenarios.
We spoke to the principals involved in this deal and several industry experts to get a sense of where this could lead. As with any large company buying a startup, outcomes are uncertain; sometimes the acquired company gets lost in the larger corporate bureaucracy, and sometimes additional resources will help grow the company much faster than it could have on its own.
What is BlueJeans?
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Top investors predict what’s ahead for Boston’s VC scene in Q1
Before the COVID-19 pandemic shook up the world and reshaped the economy, Boston was quietly setting records.
According to new venture data compiled by TechCrunch, the region set what was at least a local maximum in venture capital raised in the space of a single quarter in Q1 2020.
But while Boston’s startup market announced a number of huge rounds that bolstered its total venture dollars raised in the first quarter, there were signs of weakness: Deal volume was its best since Q2 2019, according to a set of data compiled and released by PwC and CB Insights, but was still a little under the pace set in 2018.
So Boston’s startups raised lots of money, but couldn’t match prior highs when it came to the number of checks written. And those results were largely recorded before COVID-19 shuttered the city. Since then, we’ve seen a number of area startups lay off staff, something we explored last week.
Now, with fresh data in hand, we can take a closer look at the city’s first quarter of 2020. To better understand what we’re unpacking, we asked a number of local venture capitalists to weigh in. Let’s look back at Boston’s Q1 as we stride into Q2 with the help of Venture Lane, .406 Ventures, Volition Capital and Flybridge Capital Partners.
The data
Starting with a programming note is counter-flow, but bear with us. TechCrunch is starting a regular, monthly series on Boston and its startup market. This is a second prelude of sorts. Normally we’d hold news and interviews for a later date so that we’d have plenty of material for a column. In the face of relentless change, however, we didn’t want to hold off on reporting and synthesizing new information. When things are more normal, our pace will follow.
Per PwC and CB Insights, here’s the last few quarters of data, along with a few yearly totals to draw you the picture we can now see:
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Autofleet raises $7.5M to help fleets put idle vehicles into drive
On-demand mobility, when done successfully, strikes a balance between demand and supply while providing reliable service and making a profit. It’s a sweet spot that can be difficult, if not impossible, to find.
Autofleet, a startup that develops fleet optimization software to redirect underused vehicles into ride-hailing and delivery services, wants to solve that mission impossible. Now, the company founded by former Avis and Gett employees, has raised $7.5 million in seed and Series A funding to expand into international markets and grow its research and development team.
The Series A was led by MizMaa Ventures with participation from Maniv Mobility, Next Gear Ventures and Liil Ventures. Its seed financing was led by Maniv Mobility.
Autofleet developed a fleet management platform that can be used by rental car companies, car sharing operators and automakers to launch or better manage mobility services. The platform includes a booking app and integrations to delivery services, demand prediction, pooling and optimization algorithms as well as a driver app, and control center. The company also has developed a simulator tool that lets operators plan how a fleet will be deployed before a single vehicle hits the road.
For example, a rental company with abundant inventory and little demand for traditional multi-day contracts could use the platform to launch and then manage a car-sharing service. Autofleet already has partnerships with Avis Budget Group, Zipcar, Keolis and Suzuki .
That focus on managing supply side constraints is what attracted Maniv Mobility to invest in the seeding and Series A rounds, according the firm’s general partner Olaf Sakkers.
Autofleet’s biggest markets today are in Europe and the U.S., CEO Kobi Eisenberg told TechCrunch . The company is seeing early traction and fast growth in Latin America and Asia-Pacific. Eisenberg said they plan to double down on these markets. The company also expects to announce a partnership in Asia to accelerate growth in that region.
Autofleet is also looking for new opportunities for how vehicle fleets can be used, including ways to help micromobility companies improve their unit economics, according to Eisenberg.
In this age of COVID-19 — when asset-heavy businesses like rental car companies have seen their businesses upended — Autofleet has already discovered new uses for its platform. The platform is being used to help companies shift fleets to meet today’s demand for logistics and medical transportation. Autofleet is also selling its platform to companies looking to leverage their vehicle assets for their delivery services.
“We’re hearing from fleet partners around the globe who are experiencing dramatic drops in demand, and therefore significant portions of their fleet and drivers are un-utilized,” Eisenberg said. “At the same time, we have seen a sharp increase in demand for delivery services from businesses across all verticals: retail and supermarkets, restaurants.”
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