Insight Partners
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PayCargo raises $35M from Insight for its cloud-based platform targeting the freight industry
Shipping has long been one of the more antiquated, and least technological, segments in the world of commerce, with its physical aspects — rooted in massive cargo tankers, giant fleets of aircraft and trucks, and trains of linked-up containers — underscoring some of the more obvious analogue attributes of the business.
That has also made it a ripe opportunity for startups, and today, one called PayCargo, which has built a suite of cloud-based payment and financing services for the cargo industry, is announcing $35 million in funding to expand its business in the wake of COVID-19.
The investment is coming from a single, high-profile investor, Insight Partners, which back in April announced a monster $9.5 billon fund that it planned to use not just to support portfolio companies through the global health pandemic, but to seek out new opportunities emerging in the wake of it.
PayCargo appears to be one of the latter. Eduardo Del Riego, the CEO (PayCargo was co-founded by COO Juan Carlos Dieppa and chairman Sergio Lemme), said that while the cargo industry has faced a lot of turmoil with the pandemic — production in some places ground to a halt, social distancing rules created new challenges for how shippers could work and move physical goods — it also highlighted how solutions like PayCargo’s were essential in getting things working properly again.
“With COVID, there was tremendous uncertainty about the impact of the global supply chain,” he said in an interview, “and like many other industries, the pandemic accelerated the need and demand for a paperless and contactless solution, which in turn accelerated PayCargo’s business.”
And while many of us brace ourselves for more fallout about how the world economy is contracting, PayCargo is profitable and has been from its start, the company said, and it has been growing — which in itself could be a positive signal about how production is indeed picking up again.
PayCargo provides a platform that offers tools for payers to send payments, vendors to receive them, APIs to integrate the tools into an existing IT, and financing services for those who do not want to pay for the shipments up front. All of these, for the majority of those working in this area, still are fixed in paperwork and can take weeks to resolve, making it a prime area to tackle with electronic services.
These days, PayCargo is processing some $4 billion in payments annually from some 12,000 shippers and carriers and a network of 4,000 vendors — customers span land, sea and air and include Kuehne + Nagel, DHL, DB Schenker, BDP, Seko Logistics, UPS, YUSEN Logistics and vendors like Hapag-Lloyd, MSC, Ocean Network Express, Alliance Ground, Swissport and Air France — with transaction volume up 80% over last year. By way of its APIs, PayCargo also works with a number of partners to serve customers, including the International Air Transport Association (IATA), Cargo Network Services (CNS), CHAMP Cargosystems, IBS, Accelya, Unisys and Kale Logistics.
We have written before about the very fragmented and analogue freight industry, which still bases a lot of transactions around faxes, actual paperwork physically exchanged between parties and people transferring not just goods but documents hand to hand. The same goes for the payments infrastructure that underpins it all.
That has spawned a number of other startups looking to tackle the market with tech. Emerge has been building a digital marketplace specifically for the trucking industry, while Cargo.com is targeting air freight; Europe’s Zencargo, FreightHub and Sennder are focusing on bringing cloud-based infrastructure into freight-forwarding (and Sennder is positioning itself as a consolidator in this market, recently acquiring Uber’s European business in this area); and Flexport has positioned itself as one to watch in its own take on shipping SaaS.
PayCargo itself also has a number of competitors, which might include those building bigger suites of services, of which payments is just one. In addition to all of the ones we’ve covered, there is GlobalTranz, CloudTrade and others. (Del Riego refused to name any competitors directly. “PayCargo is the premier and most robust solution in the marketplace,” he said flatly.)
Overall, CrunchBase estimates that some $5.5 billion has been invested in shipping-related tech companies looking to bring more updated processes to what is, at the end of the day, ultimately a very physical business.
But with the industry significantly bigger than that — one estimate forecasts that the shipping logistics market in the U.S. alone will be worth $1.3 trillion by 2023 — you can see how building and addressing that would be a lucrative opportunity.
“As the cargo industry rapidly shifts to electronic payments, PayCargo has established itself as the market leading platform for doing business by successfully automating the payments process and ensuring efficiency for both payers and vendors,” said Ryan Hinkle, managing director at Insight Partners, in a statement. “We are excited to work with PayCargo to continue to scale its global payments network and through our Insight Onsite team of ScaleUp and operational experts, help bring additional resources to its impressive list of customers.” Hinkle is joining the board with this round.
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Optimizely acquired by content management company Episerver
Episerver is announcing that it has reached an agreement to acquire Optimizely for an undisclosed sum.
Optimizely was founded in 2009 by Dan Siroker and Pete Koomen. It became synonymous with A/B testing, subsequently building a broader suite of tools for marketers to experiment with and personalize their websites and apps, with more than 1,000 customers, including Gap, StubHub, IBM and The Wall Street Journal.
The company had raised more than $200 million in funding from Goldman Sachs, Index Ventures, Andreessen Horowitz, GV and others. Earlier this year, it laid off 15% of its staff, citing the impact of COVID-19.
Episerver, meanwhile, was founded in Stockholm back in 1994 and offers tools for marketers to manage their digital content. Accel-KKR sold the company to Insight Partners for $1.1 billion in 2018. (Today’s announcement describes Insight as a “strategic advisor and sponsor” in the acquisition.)
In a statement, Episerver CEO Alex Atzberger said this is “the most significant transformation in our company’s history – one that will set a new industry standard for digital experience platforms.” It sounds like the idea is to extend Episerver’s capabilities around content and commerce with Optimizely’s experimentation tools.
“The breakthrough combination of Episerver and Optimizely will transform digital experience creation and optimization, enabling digital teams to replace guesswork with evidence-based outcomes,” Atzberger said. “This, along with our shared mission to empower growing companies to compete digitally, makes me thrilled to welcome the Optimizely team to Episerver, as we prove there are no extraordinary experiences without experimentation.”
A company spokesperson said the deal is for a mix of cash and stock. The acquisition is expected to close in the fourth quarter of this year, with the companies remaining fully staffed and independent until then.
“Winning in today’s digital world requires delivering the best and most personalized digital experiences,” said Jay Larson, who replaced Siroker as Optimizely CEO in 2017, in a statement. “Episerver and Optimizely have a shared vision to optimize every customer touchpoint through the use of experimentation. Together, we will enable our customers to do more testing, in more places, with greater ease than ever before.”
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Unpacking Duck Creek Technologies’ IPO and hoped-for $2.7B valuation
Tech stocks retain their highs as the second quarter’s earnings season begins to fade into the rearview mirror, and there are still a number of companies looking to go public while the times are good. It looks like a smart move, as public investors are hungry for growth-oriented shares — which is just what tech and venture-backed companies have in spades.
The companies currently looking to go public are diverse. China-based real-estate giant KE Holdings — a hybrid listings company and digital transaction portal for housing — is looking to raise as much as $2.3 billion in a U.S. listing. Xpeng, another China-based company that builds electric vehicles, is looking to list in the U.S as well. Xpeng has the distinction of being gross-margin negative in every key time period detailed in its S-1 filing.
The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
And then there’s Duck Creek Technologies, a domestic tech company looking to go public on the back of growing SaaS revenues. This morning let’s quickly spin through Duck Creek’s history, peek at its financial results, calculate its expected valuation and see how its pricing fits compared to current norms.
Duck Creek is a Boston-based software company that serves the property and casualty (P&C) insurance market. Its customers include names like AIG, Geico and Progressive, along with smaller players that aren’t as well known to the American mass market.
The KE IPO will be a big affair because the company is huge and profitable with $3.86 billion in H1 2020 revenue leading to $227.5 million in net income. The Xpeng IPO will be interesting because Tesla’s strong share price has given float to a great many EV boats. But Duck Creek is a company slowly letting go of perpetual license software sales and scaling its SaaS incomes while still generating nearly half its revenues from services. It’s a company we can understand, in other words.
So let’s get under the skin of the Boston-based company that also claims low-code functionality. This will be fun.
Duck Creek by the numbers
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OwnBackup lands $50M as backup for Salesforce ecosystem thrives
OwnBackup has made a name for itself primarily as a backup and disaster recovery system for the Salesforce ecosystem, and today the company announced a $50 million investment.
Insight Partners led the round, with participation from Salesforce Ventures and Vertex Ventures. This chunk of money comes on top of a $23 million round from a year ago, and brings the total raised to more than $100 million, according to the company.
It shouldn’t come as a surprise that Salesforce Ventures chipped in when the majority of the company’s backup and recovery business involves the Salesforce ecosystem, although the company will be looking to expand beyond that with the new money.
“We’ve seen such growth over the last two and a half years around the Salesforce ecosystem, and the other ISV partners like Veeva and nCino that we’ve remained focused within the Salesforce space. But with this funding, we will expand over the next 12 months into a few new ecosystems,” company CEO Sam Gutmann told TechCrunch.
In spite of the pandemic, the company continues to grow, adding 250 new customers last quarter, bringing it to over 2,000 customers and 250 employees, according to Gutmann.
He says that raising the round, which closed at the beginning of May, had some hairy moments as the pandemic began to take hold across the world and worsen in the U.S. For a time, he began talking to new investors in case his existing ones got cold feet. As it turned out, when the quarterly numbers came in strong, the existing ones came back and the round was oversubscribed, Gutmann said.
“Q2 frankly was a record quarter for us, adding over 250 new accounts, and we’re seeing companies start to really understand how critical this is,” he said.
The company plans to continue hiring through the pandemic, although he says it might not be quite as aggressively as they once thought. Like many companies, even though they plan to hire, they are continually assessing the market. At this point, he foresees growing the workforce by about another 50 people this year, but that’s about as far as he can look ahead right now.
Gutmann says he is working with his management team to make sure he has a diverse workforce right up to the executive level, but he says it’s challenging. “I think our lower ranks are actually quite diverse, but as you get up into the leadership team, you can see on the website unfortunately we’re not there yet,” he said.
They are instructing their recruiting teams to look for diverse candidates whether by gender or ethnicity, and employees have formed a diversity and inclusion task force with internal training, particularly for managers around interviewing techniques.
He says going remote has been difficult, and he misses seeing his employees in the office. He hopes to have at least some come back before the end of the summer and slowly add more as we get into the fall, but that will depend on how things go.
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Spike raises $8 million to make your email look like a chat app
Asynchronous chat apps like Slack have done their best to kill email, but maybe the key to chat replacing email is just making email look like chat? That’s the idea of Spike, a productivity startup that has built an email app that organizes emails into chat bubbles with an interface that encourages users to keep it short and simple.
Spike’s software began with a focus solely on re-skinning the email experience, but today they’re also launching support for collaborative notes and tasks into their interface as they look to provide a cohesive solution for productivity. The company is fitting an awful lot of functionality into one window, but they hope that streamlining these apps together can leave users spending less time tabbing through separate windows and more time getting stuff done.
“Email is a collection of your tasks, so why should it be separated from where your other tasks are?” asks CEO Dvir Ben-Aroya.
The new functionality widens the ambitions of the software but also refocuses the app on a more complete business use case. Ben-Aroya admits that the company hasn’t pushed monetization very hard in the past, instead looking to scale up its base of free users in an effort to eventually scale up inside organizations. As the app looks to bring small businesses and larger enterprises onboard, the app is keeping its free tier, but to get past limits on message history and note/task creation users are going to have to upgrade to a $7.99 per month per user plan ($5.99 per month when billed annually).
Alongside its product news, the startup also shared today that it has raised $8 million in a Series A round led by Insight Partners . Wix, NFX and Koa Labs also participated in the round. The company plans to use the cash to aggressively scale hiring and double its team this year.
“[W]e see a massive addressable market for centralized communication hubs to connect disparate messaging channels,” Insight Partners VP Daniel Aronovitz said in a statement. “The current climate and associated macro-tailwinds behind remote teamwork have only strengthened our belief that there is a sizable and growing demand for digital collaboration tools.”
The company’s platform is compatible with most email services and the app is available on Android, iOS, Mac and Windows.
Email startups are often privy to some of a user’s most sensitive data and can receive a lot of inquiries regarding privacy. As a result, Ben-Aroya believes his company is far ahead of competitors when it comes to safety. “Unlike many other available email clients, we’re never touching, manipulating, using, reusing or selling any part of the user data,” he says.
Spike has raised $16 million in funding to date.
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API platform Postman delivers $150M Series C on $2B valuation
APIs provide a way to build connections to a set of disparate applications and data sources, and can help simplify a lot of the complex integration issues companies face. Postman has built an enterprise API platform and today it got rewarded with a $150 million Series C investment on a whopping $2 billion valuation — all during a pandemic.
Insight Partners led the round with help from existing investors CRV and Nexus Venture Partners. Today’s investment brings the total raised to $207 million, according to the company. That includes a $50 million Series B from a year ago, making it $200 million raised in just a year. That’s a lot of cash.
Abhinav Asthana, CEO and co-founder at Postman, says that what’s attracting all that dough is an end-to-end platform for building APIs. “We help developers, QA, DevOps — anybody who is in the business of building APIs — work on the same platform. They can use our tools for designing, documentation, testing and monitoring to build high-quality APIs, and they do that faster,” Asthana told TechCrunch.
He says that he was not actively looking for funding before this round came together. In fact, he says that investors approached him after the pandemic shut everything down in California in March, and he sees it as a form of validation for the startup.
“We think it shows the strength of the company. We have phenomenal adoption across developers and enterprises and the pandemic has [not had much of an impact on us]. The company has been receiving crazy inbound interest [from investors],” he said.
He didn’t want to touch the question of going public just yet, but he feels the hefty valuation sends a message to the market that this is a solid company that is going to be around for the long term.
Jeff Horing, co-founder and managing director at lead investor Insight Partners, certainly sees it that way. “The combination of the market opportunity, the management team and Postman’s proven track record of success shows that they are ready to become the software industry’s next great success,” he said in a statement.
Today the company has around 250 employees divided between the U.S. and Bangalore in India, and he sees doubling that number in the next year. One thing the pandemic has shown him is that his employees can work from anywhere and he intends to hire people across the world to take advantage of the most diverse talent pool possible.
“Looking for diverse talent as part of our large community as we build this workforce up is going to be a key way in which we want to solve this. Along with that, we are bringing people from diverse communities into our events and making sure that we are constantly in touch with those communities, which should help us build up a very strong diverse kind of hiring function,” he said.
He added, “We want to be deliberate about that, and over the coming months we will also shed more light on what specifically we are doing.”
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Decrypted: DEA spying on protesters, DDoS attacks, Signal downloads spike
This week saw protests spread across the world sparked by the murder of George Floyd, an unarmed Black man, killed by a white police officer in Minneapolis last month.
The U.S. hasn’t seen protests like this in a generation, with millions taking to the streets each day to lend their voice and support. But they were met with heavily armored police, drones watching from above, and “covert” surveillance by the federal government.
That’s exactly why cybersecurity and privacy is more important than ever, not least to protect law-abiding protesters demonstrating against police brutality and institutionalized, systemic racism. It’s also prompted those working in cybersecurity — many of which are former law enforcement themselves — to check their own privilege and confront the racism from within their ranks and lend their knowledge to their fellow citizens.
THE BIG PICTURE
DEA allowed ‘covert surveillance’ of protesters
The Justice Department has granted the Drug Enforcement Administration, typically tasked with enforcing federal drug-related laws, the authority to conduct “covert surveillance” on protesters across the U.S., effectively turning the civilian law enforcement division into a domestic intelligence agency.
The DEA is one of the most tech-savvy government agencies in the federal government, with access to “stingray” cell site simulators to track and locate phones, a secret program that allows the agency access to billions of domestic phone records, and facial recognition technology.
Lawmakers decried the Justice Department’s move to allow the DEA to spy on protesters, calling on the government to “immediately rescind” the order, describing it as “antithetical” to Americans’ right to peacefully assembly.
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UpKeep raises $36 million Series B to help facilities and maintenance teams go mobile
UpKeep, a mobile-first platform for maintenance and operations collaboration, has today announced the close of a $36 million Series B financing round. The round was led by Insight Partners, with participation from existing investors Emergence Capital, Battery Ventures, Y Combinator, Mucker Capital and Fundersclub.
UpKeep was founded by Ryan Chan. Chan worked at Trisep Corporation, a chemical manufacturing company, before founding UpKeep and saw first-hand how plant maintenance was handled. Despite the fact that the plant had purchased software for facilities maintenance and operations, most of the data was written down on pen and paper before being input into the system because that software was desktop only.
The idea for UpKeep was born.
UpKeep meets maintenance workers where they are, which could be just about anywhere.
With any maintenance job, from changing a lightbulb in an office building to repairing a complicated piece of machinery on the floor of a manufacturing plant, there are usually three parties involved: the requester, the facilities manager, and the technician.
Before UpKeep, the requester would either send an email to the facilities manager or perhaps use some other software to let them know of the problem. The facilities manager would prioritize the various requests of the day and send out technicians to resolve them.
Technicians have to log plenty of information when they’re out on the job, but this usually involved writing this info down on paper and then returning to a desk to input the data into the system.
With UpKeep, the requester can use the app itself to notify the facilities manager of problems, or send an email that flows directly into the UpKeep system. Facilities managers use UpKeep to prioritize and assign issues to their team of technicians, who then receive the work orders right on UpKeep.
Instead of logging information on paper, these technicians can take pictures of the problem and note the parts they need or other details of the job right in the app. No duplication of effort.
UpKeep operates on a freemium model, allowing technicians to manage their own work for free. Collaborative use of the product across an organization costs on a per user on both an annual or monthly basis. The company offers various tiers, from a Starter Plan ($35/month/user) to an Enterprise Plan ($180/month/user).
Higher tier plans offer more in-depth reporting and analysis around the work that gets done. Chan explained that these reports are not necessarily about tracking people, though.
“Yes, we track technicians and it’s a tool to manage work done by people,” said Chan. “But a manufacturing facility really cares much more about the equipment. They can use UpKeep to manage things like how many hours of downtime a piece of equipment has, etc. It’s more targeted toward the actual asset and the equipment versus the person completing their work.”
Chan said that around 80 percent of the company’s 400,000 users are on the free version of the app. Some brands on the app include Unilever, Siemens, DHL, McDonald’s, and Jet.com. Chan said UpKeep saw a 206 percent increase in revenue in 2019.
Important to the company’s future, UpKeep is working with OSHA and a group called SQF (Safe Quality Food) to offer templates around best practices during the pandemic. Now, maintenance workers and facilities staffs have a whole new checklist around sanitation and safety that many businesses are just getting up to speed on. UpKeep is working to make these new practices easier to adopt by providing those checklists directly to facilities managers.
This latest funding round brings UpKeep’s total funding to $48.8 million.
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Granulate announces $12M Series A to optimize infrastructure performance
As companies increasingly look to find ways to cut costs, Granulate, an early-stage Israeli startup, has come up with a clever way to optimize infrastructure usage. Today it was rewarded with a tidy $12 million Series A investment.
Insight Partners led the round with participation from TLV Partners and Hetz Ventures. Lonne Jaffe, managing director at Insight Partners, will be joining the Granulate board under the terms of the agreement. Today’s investment brings the total raised to $15.6 million, according to the company.
The startup claims it can cut infrastructure costs, whether on-prem or in the cloud, from between 20% and 80%. This is not insignificant if they can pull this off, especially in the economic maelstrom in which we find ourselves.
Asaf Ezra, co-founder and CEO at Granulate, says the company achieved the efficiency through a lot of studying about how Linux virtual machines work. Over six months of experimentation, they simply moved the bottleneck around until they learned how to take advantage of the way the Linux kernel operates to gain massive efficiencies.
It turns out that Linux has been optimized for resource fairness, but Granulate’s founders wanted to flip this idea on its head and look for repetitiveness, concentrating on one function instead of fair allocation across many functions, some of which might not really need access at any given moment.
“When it comes to production systems, you have a lot of repetitiveness in the machine, and you basically want it to do one thing really well,” he said.
He points out that it doesn’t even have to be a VM. It could also be a container or a pod in Kubernetes. The important thing to remember is that you no longer care about the interactivity and fairness inherent in Linux; instead, you want that the machine to be optimized for certain things.
“You let us know what your utility function for that production system is, then our agents. basically optimize all the decision making for that utility function. That means that you don’t even have to do any code changes to gain the benefit,” Ezra explained.
What’s more, the solution uses machine learning to help understand how the different utility functions work to provide greater optimization to improve performance even more over time.
Insight’s Jaffe certainly recognized the potential of such a solution, especially right now.
“The need to have high-performance digital experiences and lower infrastructure costs has never been more important, and Granulate has a highly differentiated offering powered by machine learning that’s not dependent on configuration management or cloud resource purchasing solutions,” Jaffe said in a statement.
Ezra understands that a product like his could be particularly helpful at the moment. “We’re in a unique position. Our offering right now helps organizations survive the downturn by saving costs without firing people,” he said.
The company was founded in 2018 and currently has 20 employees. They plan to double that by the end of 2020.
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Tyto Care raises $50 million as it looks to buy and build new services during COVID-19 demand surge
Tyto Care, the provider of a home health diagnostic device and telemedicine consultation app, said it has raised $50 million in a new round of funding.
The round was led by Insight Partners, Olive Tree Ventures, and Qualcomm Ventures, according to a statement, and brings the startup’s total capital raised to more than $105 million.
The funding comes just as Tyto has seen a dramatic surge in demand brought on by the global response to the COVID-19 pandemic. Tyto Care’s toolkit is being used as a telehealth diagnostic solution that was already seeing three times sales growth in 2019 alone.
Last year, the company inked a deal with Best Buy and works with most of the major telemedicine providers, including American Well, Teladoc and others.
Previous investors Orbimed, Echo Health, Qure, Teuza and others also participated in the new financing, the company said in a statement.
With the financing, Tyto Care is well-positioned to both buy and build new tools based on its existing diagnostics platform, as well as expand its home health testing kit into new areas.
Companies like Scanwell Health are providing at-home diagnostic tests for things like urinary tract infections, and Tyto Care chief executive Dedi Gilad definitely sees options for new products around different kinds of at-home tests, the Tyto Care founder said in an interview.
All of this new capital comes with surging demand where Tyto Care’s telehealth technology is being used by every hospital in Israel to provide remote examinations of quarantined and isolated patients infected with COVID-19. Other hospital networks are also turning to the company’s diagnostics tools for similar applications, the company said.
The remote medical exams can protect health providers from exposure to SARS-Cov-2, the virus that causes COVID-19, and enables uninfected patients to get an examination of their basic health remotely, without needing to go to a medical facility.
“Over the past two years, Tyto Care has increased momentum faster than ever before and is playing a leading role in changing how people receive healthcare. Telehealth is heeding the call of the COVID-19 pandemic and we are proud that our unique solution is aiding health systems and consumers around the world in the fight against the virus,” said Gilad, in a statement. “This new funding comes at a pivotal moment in the evolution of telehealth and will enable us to continue to transform the global healthcare industry with the best virtual care solutions.”
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