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Kiddom grabs early revenue amid $35M Series C funding
Kiddom, a platform that offers a digital curriculum that fits the core standards required by states, announced today that it has raised a $35 million Series C round led by Altos Ventures, with participation from Owl Ventures, Khosla Ventures and Outcomes Collective. The financing came nearly three years after Kiddom’s Series B, a $15 million round led by Owl.
The startup didn’t just raise money, it finally learned how to make some. Founded in 2012, Kiddom was able to raise millions without revenue or a clear business model. But Ahsan Rizvi, CEO and co-founder of Kiddom, and Abbas Manjee, chief academic officer and co-founder of Kiddom, think an early focus on adoption instead of monetization was necessary.
“At our Series B, we were definitely not making money,” Manjee said. “But we have a free product that teachers and students use, and the idea was to build an enterprise product on top of it.” It’s a common strategy with bottom up sales. For example, ClassDojo prioritized adoption for years before it finally introduced a paying version of its classroom socialization product.
Kiddom poured most of its capital into research and development into its enterprise product. It has two parts. First, it offers a platform that helps schools integrate all of their different platforms into an interface that tracks student utilization and achievement. Second, it offers that platform alongside the product it’s built up for years, a digital curriculum that fits in with Common Core, a set of math and English academic standards that students are required to learn on a grade by grade level. The latter is perhaps the hardest sell for Kiddom, but also the most lucrative.
Manjee explained vendor approval processes across the States can take a long time, and the stakes are high since decision-makers will only turn to a handful of vendors when it comes to meeting core standards.
A lot of Kiddom’s success depends on if traditional curriculum providers, like the Pearsons and McGraw-Hills of the world, don’t catch up to the digitization of education. Rizvi explained that older companies are “losing market share rapidly” right now. Last year, McGraw-Hill and Cengage terminated a proposed merger that would’ve added some fresh competition to the curriculum world.
The product has resonated with some users. While Kiddom declined to give specifics, it said that new ARR growth grew 2,525% its first year. In 2020 to 2021, ARR growth is on track to be 300%. It said that at least one teacher uses its product in 70% of schools in the United States, a metric that has remained consistent since 2018.
Kiddom’s fresh funding and revenue shows that its years of product development have kept it competitive in the eyes of investors, synergistic unicorns and the stingiest enterprise customer of them all, school districts.
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Dragos raises $110M Series C as demand to secure industrial systems soars
Cybersecurity firm Dragos has raised $110 million in its Series C, almost triple the amount that it raised two years ago in its last round.
Dragos was founded in 2016 to detect and respond to threats facing industrial control systems (ICS), the devices critical to the continued operations of power plants, water and energy supplies, and other critical infrastructure. The company’s threat detection platform — its moneymaker — helps companies with industrial control systems defend against hackers trying to get into important operational systems. Its platform kicks out hackers that could shut down manufacturing lines or control energy supply systems, while its research arm keeps tabs on the hackers that can break into these highly complex and segmented industrial networks in the first place.
The startup’s latest round was led by National Grid Partners and Koch Disruptive Technologies, with both firms adding a member each to Dragos’ board. The round also saw participation from Saudi Aramco Energy Ventures and Hewlett Packard Enterprise, as well as return investors Allegis Cyber, Canaan Partners, DataTribe, Energy Impact Partners and Schweitzer Engineering Labs.
This latest round of funding will help the company with its go-to-market efforts, as well as growing its customer support team with 30 staff and building up its sales and marketing team. Lee said the company’s priority had been to work on its threat platform, and less selling it.
About one-third of the company’s employees work in software engineering to build its threat platform.
Dragos founder and chief executive Robert Lee said the pandemic, which forced vast swathes of the world to work remotely from home under lockdown restrictions, served as a wake-up call for companies with critical infrastructure.
“When you’re talking about critical infrastructure sites and people’s utilities, you need to put your best foot forward on the tech first,” he said.
Many companies were already trying to adapt with the digital age, but Lee said many companies realized they had underinvested in ICS security.
A team photo of Dragos employees. Image Credits: Dragos
Based just outside Washington D.C., Dragos now has over 220 employees and will be adding more, close to doubling its headcount since last year, and adding new offices in Melbourne, Dubai and in the United Kingdom.
Lee said the U.K.’s transition out of the European Union would all but ensure that the new U.K. office could not serve as an EU hub for the company, but that it was necessary to “to go where the problems are.”
Another one of those places is Saudi Arabia, one of the world’s largest oil and gas producers, where Dragos has an office and now draws an investment. Saudi oil and gas manufacturing plants have been the target of several cyberattacks, including the Trisis malware in 2017 that shut down one of the kingdom’s biggest petrochemical plants. But the country has faced extensive criticism for its human rights record by international rights groups. Lee said the company works to protect infrastructure that serves civilians and has actively rejected military contracts that would fall afoul of those values. “I don’t want to put asterisks on that mission,” he said.
Lee told TechCrunch that the company has grown at a rapid pace since it was founded four years ago.
“Our goal was never to get acquired,” he said. Echoing remarks he made last year, Lee said that the company’s plan was to continue growing and investing in the problems that Dragos sees — with an eventual goal to take the company public. “But we’re not rushed,” he said.
“The hallmark of Dragos being successful won’t be a successful IPO,” said Lee. “The hallmark will be having validated and built the market large enough that there can be other companies that come behind us serving the other more niche aspects of the ICS market and building out the community, and making sure our infrastructure is safer.”
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Pure Storage acquires data service platform Portworx for $370M
Pure Storage, the public enterprise data storage company, today announced that it has acquired Portworx, a well-funded startup that provides a cloud-native storage and data-management platform based on Kubernetes, for $370 million in cash. This marks Pure Storage’s largest acquisition to date and shows how important this market for multicloud data services has become.
Current Portworx enterprise customers include the likes of Carrefour, Comcast, GE Digital, Kroger, Lufthansa, and T-Mobile. At the core of the service is its ability to help users migrate their data and create backups. It creates a storage layer that allows developers to then access that data, no matter where it resides.
Pure Storage will use Portworx’s technology to expand its hybrid and multicloud services and provide Kubernetes -based data services across clouds.
Image Credits: Portworx
“I’m tremendously proud of what we’ve built at Portworx: An unparalleled data services platform for customers running mission-critical applications in hybrid and multicloud environments,” said Portworx CEO Murli Thirumale. “The traction and growth we see in our business daily shows that containers and Kubernetes are fundamental to the next-generation application architecture and thus competitiveness. We are excited for the accelerated growth and customer impact we will be able to achieve as a part of Pure.”
When the company raised its Series C round last year, Thirumale told me that Portworx had expanded its customer base by over 100% and its bookings increased by 376 from 2018 to 2019.
“As forward-thinking enterprises adopt cloud-native strategies to advance their business, we are thrilled to have the Portworx team and their groundbreaking technology joining us at Pure to expand our success in delivering multicloud data services for Kubernetes,” said Charles Giancarlo, chairman and CEO of Pure Storage. “This acquisition marks a significant milestone in expanding our Modern Data Experience to cover traditional and cloud native applications alike.”
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Airtable raises $185M and launches new low-code and automation features
The spreadsheet-centric database and no-code platform Airtable today announced that it has raised a $185 million Series D funding round, putting the company at a $2.585 billion post-money valuation.
Thrive Capital led the round, with additional funding by existing investors Benchmark, Coatue, Caffeinated Capital and CRV, as well as new investor D1 Capital. With this, Airtable, which says it now has 200,000 companies using its service, has raised a total of about $350 million. Current customers include Netflix, HBO, Condé Nast Entertainment, TIME, City of Los Angeles, MIT Media Lab and IBM.
In addition, the company is also launching one of its largest feature updates today, which starts to execute on the company’s overall platform vision that goes beyond its current no-code capabilities and brings tools to the service more low-code features, as well new automation (think IFTTT for Airtable) and data management.
As Airtable founder and CEO Howie Liu told me, a number of investors approached the company since it raised its Series C round in 2018, in part because the market clearly realized the potential size of the low-code/no-code market.
“I think there’s this increasing market recognition that the space is real, and the space is very large […],” he told me. “While we didn’t strictly need the funding, it allowed us to continue to invest aggressively into furthering our platform, vision and really executing aggressively, […] without having to worry about, ‘well, what happens with COVID?’ There’s a lot of uncertainty, right? And I think even today there’s still a lot of uncertainty about what the next year will bear.”
The company started opening the round a couple of months after the first shelter in place orders in California, and for most investors, this was a purely digital process.
Liu has always been open about the fact that he wants to build this company for the long haul — especially after he sold his last company to Salesforce at an early stage. As a founder, that likely means he is trying to keep his stake in the company high, even as Airtable continues to raise more money. He argues, though, that more so than the legal and structural controls, being aligned with his investors is what matters most.
“I think actually, what’s more important in my view, is having philosophical alignment and expectations alignment with the investors,” he said. “Because I don’t want to be in a position where it comes down to a legal right or structural debate over the future of the company. That almost feels to me like the last resort where it’s already gotten to a place where things are ugly. I’d much rather be in a position where all the investors around the table, whether they have legal say or not, are fully aligned with what we’re trying to do with this business.”
Just as important as the new funding though, are the various new features the company is launching today. Maybe the most important of these is Airtable Apps. Previously, Airtable users could use pre-built blocks to add maps, Gantt charts and other features to their tables. But while being a no-code service surely helped Airtable’s users get started, there’s always an inevitable point where the pre-built functionality just isn’t enough and users need more custom tools (Liu calls this an escape valve). So with Airtable Apps, more sophisticated users can now build additional functionality in JavaScript — and if they choose to do so, they can then share those new capabilities with other users in the new Airtable Marketplace.
Image Credits: Airtable
“You may or may not need an escape valve and obviously, we’ve gotten this far with 200,000 organizations using Airtable without that kind of escape valve,” he noted. “But I think that we open up a lot more use cases when you can say, well, Airtable by itself is 99% there, but that last 1% is make or break. You need it. And then, just having that outlet and making it much more leveraged to build that use case on Airtable with 1% effort, rather than building the full-stack application as a custom built application is all the difference.”
Image Credits: Airtable
The other major new feature is Airtable Automations. With this, you can build custom, automated workflows to generate reports or perform other repetitive steps. You can do a lot of that through the service’s graphical interface or use JavaScript to build your own custom flows and integrations, too. For now, this feature is available for free, but the team is looking into how to charge for it over time, given that these automated flows may become costly if you run them often.
The last new feature is Airtable Sync. With this, teams can more easily share data across an organization, while also providing controls for who can see what. “The goal is to enable people who built software with Airtable to make that software interconnected and to be able to share a source of truth table between different instances of our tables,” Liu explained.
Image Credits: Airtable
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Brad Feld: what founders need to know about recent changes in VC deal terms
Extra Crunch offers members the opportunity to tune into conference calls led and moderated by the TechCrunch writers you read every day. This week, TechCrunch’s Connie Loizos hopped on the line with prominent investor, entrepreneur, thought leader, and Techstars co-founder Brad Feld to chat about the latest edition of his book “Venture Deals,” his advice to founders and investors, and his take on hot-button issues of the day.
In their conversation, Brad and Connie discuss the need to know information when it comes to preparing for, structuring and executing venture deals, and how that information has changed over the past several decades. Feld walks through the major topics that have been added in the latest edition of the book, such as how to handle venture debt, along with tactical attributes that aren’t currently in the book, such as secondary market trading.
Brad also shares his take on the most effective fundraising tactics for founders, and which common pieces of advice might be overblown.
Brad Feld: “I think the approach to the amount of money that you’re raising is both nuanced and evolves based on what financing round you’re at. So if you’re in an early round, some of the characteristics are different than if you’re in a later round. But I think the general truism… that I like to use when people say, ‘Well, how much money should I raise?’
I start with two variables and you the entrepreneur get to define those two variables. The two variables are: the amount of money you raise and what getting to the next level means. The amount of money you should raise is the amount of money that you need to get your business to the next level. There are lots of different ways to define what next level is and by forcing yourself internally to define next level and then define what you need in terms of capital to get to that next level… when you’re raising that first round of financing or even the second or third round of financing, it helps you size rationally what you need versus reactively to whatever the market characteristics are.
I actually encourage entrepreneurs to raise the least amount of money they need to get to the next level, or at least that’s the number that they go out to market with. Not a range, not a big number because you’re trying to drive some kind of valuation characteristic off a big number, but the amount of money that you actually think you need to get to the next level. Then if you can be oversubscribed, that’s an awesome situation.”
Feld and Connie dive deeper into current issues in the startup and venture landscape, including Brad’s take on the impact of the SoftBank Vision Fund, what went down internally and externally at both WeWork and Uber, as well as how boards, executives and founders can manage cult of personality and static company cultures.
For access to the full transcription and the call audio — and for the opportunity to participate in future conference calls — become a member of Extra Crunch. Learn more and try it for free.
Connie Loizos: I think the last time I saw you in person was out here in San Francisco at an event I was hosting and that was maybe two years ago?
Brad Feld: Yup, that’s right. That was at the Autodesk Lab if I remember correctly.
Loizos: Yes. It’s good to hear your voice, and thank you for joining us on this call. We have a lot of readers who are big fans of yours that are on the line and are eager to learn about your book “Venture Deals” and your broader thoughts about the current state of the market. That said — and I know you only have so much time — let’s dive first into the book. So Wiley, your publisher has just put out the fourth edition of this book “Venture Deals,” and it’s really easy to appreciate why. I was looking through it and it’s so incredibly instructive how venture deals come together and possible pitfalls to avoid. And given there are always new entrepreneurs emerging, it continues to be highly relevant.
How do you go about updating a book like this, given that some things change and some things stay the same?
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Locus Robotics raises $26 million for warehouse automation
Warehouse automation is all the rage in robotics these days. No surprise then, that another emerging player just got a healthy slice of venture funding. Massachusetts-based Locus Robotics this week announced that it has secured a $26 million Series C. The round, led by Zebra Ventures and Scale Venture Partners, brings the startup’s total funding to around $66 million.
The five-year-old company produces robotic shelving designed to transfer bins inside of warehouses. Founder Bruce E. Welty was onstage at our robotics event back in 2017 demonstrating the technology.
It’s a similar principle to many other players in the space, including Amazon’s Kiva and Bay Area-based Fetch. And like those companies, Locus has garnered interest from some big players — most notably delivery giant, DHL.
The robotics automation space has heated up quite a bit in 2019. Colorado-based Canvas, which makes autonomous warehouse delivery carts, was acquired by Amazon last week. Even Boston Dynamics is looking at the category as a way forward for its own impressive technologies, putting its robot Handle to work in a fulfillment center.
“We have seen a massive uptick in demand for the flexible automation incorporated into Locus’s multi-bot solution, which is uniquely suited to address these challenges,” CEO Rick Faulk says in a release tied to the news. “Not only is our solution proven to dramatically improve productivity and drive down costs, but it is also a source of scalable labor that can be adapted to meet the demands of numerous product and customer profiles. This new funding will enable us to scale to meet growing demand for our revolutionary solution worldwide.”
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Startups Weekly: Squad’s screen-shares and Slack’s swastika
We’re three weeks into January. We’ve recovered from our CES hangover and, hopefully, from the CES flu. We’ve started writing the correct year, 2019, not 2018.
Venture capitalists have gone full steam ahead with fundraising efforts, several startups have closed multi-hundred million dollar rounds, a virtual influencer raised equity funding and yet, all anyone wants to talk about is Slack’s new logo… As part of its public listing prep, Slack announced some changes to its branding this week, including a vaguely different looking logo. Considering the flack the $7 billion startup received instantaneously and accusations that the negative space in the logo resembled a swastika — Slack would’ve been better off leaving its original logo alone; alas…
On to more important matters.
Rubrik more than doubled its valuation
The data management startup raised a $261 million Series E funding at a $3.3 billion valuation, an increase from the $1.3 billion valuation it garnered with a previous round. In true unicorn form, Rubrik’s CEO told TechCrunch’s Ingrid Lunden it’s intentionally unprofitable: “Our goal is to build a long-term, iconic company, and so we want to become profitable but not at the cost of growth,” he said. “We are leading this market transformation while it continues to grow.”
Deal of the week: Knock gets $400M to take on Opendoor
Will 2019 be a banner year for real estate tech investment? As $4.65 billion was funneled into the space in 2018 across more than 350 deals and with high-flying startups attracting investors (Compass, Opendoor, Knock), the excitement is poised to continue. This week, Knock brought in $400 million at an undisclosed valuation to accelerate its national expansion. “We are trying to make it as easy to trade in your house as it is to trade in your car,” Knock CEO Sean Black told me.
While we’re on the subject of VCs’ favorite industries, TechCrunch cybersecurity reporter Zack Whittaker highlights some new data on venture investment in the industry. Strategic Cyber Ventures says more than $5.3 billion was funneled into companies focused on protecting networks, systems and data across the world, despite fewer deals done during the year. We can thank Tanium, CrowdStrike and Anchorfree’s massive deals for a good chunk of that activity.
Send me tips, suggestions and more to kate.clark@techcrunch.com or @KateClarkTweets.
I would be remiss not to highlight a slew of venture firms that made public their intent to raise new funds this week. Peter Thiel’s Valar Ventures filed to raise $350 million across two new funds and Redpoint Ventures set a $400 million target for two new China-focused funds. Meanwhile, Resolute Ventures closed on $75 million for its fourth early-stage fund, BlueRun Ventures nabbed $130 million for its sixth effort, Maverick Ventures announced a $382 million evergreen fund, First Round Capital introduced a new pre-seed fund that will target recent graduates, Techstars decided to double down on its corporate connections with the launch of a new venture studio and, last but not least, Lance Armstrong wrote his very first check as a VC out of his new fund, Next Ventures.
More money goes toward scooters
In case you were concerned there wasn’t enough VC investment in electric scooter startups, worry no more! Flash, a Berlin-based micro-mobility company, emerged from stealth this week with a whopping €55 million in Series A funding. Flash is already operating in Switzerland and Portugal, with plans to launch into France, Italy and Spain in 2019. Bird and Lime are in the process of raising $700 million between them, too, indicating the scooter funding extravaganza of 2018 will extend into 2019 — oh boy!
- Niantic finally closed its Series C with $245 million in capital commitments and a lofty $4 billion valuation.
- Outdoorsy, which connects customers with underused RVs, raised $50 million in Series C funding led by Greenspring Associates, with participation from Aviva Ventures, Altos Ventures, AutoTech Ventures and Tandem Capital.
- Ciitizen, a developer of tools to help cancer patients organize and share their medical records, has raised $17 million in new funding in a round led by Andreessen Horowitz.
- Footwear startup Birdies — no, I don’t mean Allbirds or Rothy’s — brought in an $8 million Series A led by Norwest Venture Partners, with participation from Slow Ventures and earlier investor Forerunner Ventures.
- And Brud, the company behind the virtual celebrity Lil Miquela, is now worth $125 million with new funding.
TechCrunch’s Josh Constine introduced readers to Squad this week, a screensharing app for social phone addicts.
If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase editor-in-chief Alex Wilhelm and I marveled at the dollars going into scooter startups, discussed Slack’s upcoming direct listing and debated how the government shutdown might impact the IPO market.
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Contentful raises $33.5M for its headless CMS platform
Contentful, a Berlin- and San Francisco-based startup that provides content management infrastructure for companies like Spotify, Nike, Lyft and others, today announced that it has raised a $33.5 million Series D funding round led by Sapphire Ventures, with participation from OMERS Ventures and Salesforce Ventures, as well as existing investors General Catalyst, Benchmark, Balderton Capital and Hercules. In total, the company has now raised $78.3 million.
It’s been less than a year since the company raised its Series C round and, as Contentful co-founder and CEO Sascha Konietzke told me, the company didn’t really need to raise right now. “We had just raised our last round about a year ago. We still had plenty of cash in our bank account and we didn’t need to raise as of now,” said Konietzke. “But we saw a lot of economic uncertainty, so we thought it might be a good moment in time to recharge. And at the same time, we already had some interesting conversations ongoing with Sapphire [formerly SAP Ventures] and Salesforce. So we saw the opportunity to add more funding and also start getting into a tight relationship with both of these players.”
The original plan for Contentful was to focus almost explicitly on mobile. As it turns out, though, the company’s customers also wanted to use the service to handle its web-based applications and these days, Contentful happily supports both. “What we’re seeing is that everything is becoming an application,” he told me. “We started with native mobile application, but even the websites nowadays are often an application.”
In its early days, Contentful focused only on developers. Now, however, that’s changing, and having these connections to large enterprise players like SAP and Salesforce surely isn’t going to hurt the company as it looks to bring on larger enterprise accounts.
Currently, the company’s focus is very much on Europe and North America, which account for about 80 percent of its customers. For now, Contentful plans to continue to focus on these regions, though it obviously supports customers anywhere in the world.
Contentful only exists as a hosted platform. As of now, the company doesn’t have any plans for offering a self-hosted version, though Konietzke noted that he does occasionally get requests for this.
What the company is planning to do in the near future, though, is to enable more integrations with existing enterprise tools. “Customers are asking for deeper integrations into their enterprise stack,” Konietzke said. “And that’s what we’re beginning to focus on and where we’re building a lot of capabilities around that.” In addition, support for GraphQL and an expanded rich text editing experience is coming up. The company also recently launched a new editing experience.
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Epic! raises $8 million to keep kids reading in a digital age
The makers of Epic!, one of many apps jockeying to become a “Netflix for books,” have raised $8 million in a round led by Reach Capital, the education-specialized venture firm. Epic! at its core is an on-demand digital library that includes about 25,000 different books and videos appropriate for kids in elementary school, or between the ages of about five and twelve. Read More
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Farmer’s Business Network cultivates $40 million to help farmers buy seeds at favorable prices
GV (formerly known as Google Ventures) and DBL Partners co-led a $40 million investment in Farmer’s Business Network, Inc., the company announced on Tuesday. FBN started as something of a professional network for farmers and other agronomists. It allowed people working in agriculture to anonymously share information about what they were paying for seeds, fertilizers and other… Read More
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