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Chatbot startup Heyday raises $5.1M
Montreal-based Heyday announced today that it has raised $6.5 million Canadian ($5.1 million in US dollars) in additional seed funding.
Co-founder and CEO Steve Desjarlais told me that the startup’s goal is to allow retailers to support more automation and more personalization in their online customer interactions, while co-founder and CMO Etienne Merineau described it as an “all-in-one unified customer messaging platform.”
So whether a customer is sending a message from Facebook Messenger, WhatsApp and Google’s Business Messages or just via email, Heyday brings all that communication together in one dashboard. It then uses artificial intelligence to determine whether it’s a customer service or sales-related interaction, and it automates basic responses when possible.
Heyday chatbots can provide order updates or even recommend products (it integrates with Salesforce, Shopify, Magento, Lightspeed and PrestaShop), then route the conversation to a human team member when necessary.
There are other platforms that combine customer service and sales, but at the same time, Merineau said it’s important to treat the two categories as distinct and trust that a good service experience will lead to sales in the feature.
Image Credits: Heyday
“We believe that helping is the new selling,” he said.
Desjarlais added, “We’re really against the ticket ID system. A customer is not a ticket …
I truly believe that every single customer is a relationship with a brand that needs to be nurtured over time and that will give more value to the brand over time.”
Heyday was founded in 2017 and says that over the past two quarters, it has doubled recurring revenue. Customers include French sporting good company Decathlon, Danish fashion house Bestseller to food and consumer product brand Dannon — Merineau noted that the platform was “bilingual out of the box” and has seen strong international growth.
“Retailers who believe that [the changes brought about by] COVID-19 are temporary are in the wrong mindset,” he said. “The new mantra of future-forward brands is ‘adapt or die.’ … Brands obviously want to delvier great service, but they care about the bottom line. We help them kill two birds with one stone.”
The startup had previously raised $2 million Canadian, according to Crunchbase. This new round comes from existing investors Innovobot and Desjardins Capital. Merineau said the money will help Heyday “double down on the U.S. and scale.”
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Superpowered lets you see your schedule and join meetings from the Mac menu bar
A newly launched Mac app called Superpowered aims to make it easier to stay on top of all your Zoom calls and Google Meets, without having to scramble to find the meeting link in your inbox or calendar app at the last minute. Instead of relying on calendar reminders, Superpowered offers a notification inbox for the Mac menu bar that alerts you to online meetings just before they start, which you can then join with a click of a button.
To use Superpowered, you first download the app then authorize it to access to your Google Calendar. The app currently works with any Google account, including G Suite, as well as your subscribed calendars.
Once connected, Superpowered pulls all your events into the menu bar, which you can view at any time throughout the day with a click or by using the keyboard shortcut Command+Y.
When you have a meeting coming up, Superpowered will display a drop-down notification to alert you, or you can opt for a more subtle halo effect instead to have it get your attention. You can also configure other preferences — like whether you want a chime to sound, how far in advance you want to be alerted, whether you want a meeting reminder as text to appear in the menu bar ahead of the meeting and so on.
When it’s time for the meeting, all you have to do is click the button it displays to join your Zoom call or Google Meet. The solution is simple, but effective. The startup plans to add support for more integrations going forward, including Microsoft Teams, Cisco WebEx and others.
The idea for the app comes from four computer science and software engineering students from the University of Waterloo, who previously interned at tech companies like Google, Facebook, Asana and Spotify.
Team photo. Image Credits: Superpowered
Wanting to build a startup of their own, the team applied to the accelerator Y Combinator with an idea to build a lecture platform for professors. But they soon faced issues in keeping up with their own calendar appointments as they began to conduct user research interviews.
“We were struggling to keep up with each other’s calendars and balance all these meetings throughout the day,” explains Superpowered co-founder Jordan Dearsley, who built the service alongside teammates Nikhil Gupta, Ibrahim Irfan and Nick Yang. “We would be at lunch and be like, ‘Oh shoot, we have a meeting now — I have to run!’ or just completely miss it altogether,” he says.
Irfan had the idea to just put a button in the Mac menu bar to make it easier to join Zoom meetings and soon the team pivoted to work on Superpowered instead.
The product itself is very new. Development work began roughly two months ago and Superpowered opened up to users just last month — a quick pace that Dearsley says was possible because three of the four team members are engineers, and the other, Yang, is the designer.
Image Credits: Superpowered
Although it’s a paid product offered at $10 per month, Superpowered already has hundreds of users who are interacting with the app, on average, 10 times per day. Busier users, like product managers, are clicking on Superpowered as many as 20 to 40 times per day — an indication that it’s found a place in users’ workflows. In the month since its launch, the app has connected users with over 10,000 online meetings, the company says.
Superpowered is not the first to add calendar appointments to the Mac’s menu bar. It competes with a range of products, like MeetingBar, Meeter, Next Meeting and others. But users have been responding to Superpowered’s sleek, clean design.
The company also has a vision for the product’s future that extends beyond meetings. After solving this particular pain point, Superpowered plans to broaden its scope to fix other annoyances for knowledge workers — like Slack notifications, for example.
“It’s really annoying to be pinged all the time while I’m coding … and I don’t know if it’s something that’s worth seeing because Slack doesn’t really give me those controls or ability to peek,” explains Dearsley. Meanwhile, Mac’s built-in Notification Center isn’t smart enough to show you just those items that you really need to know about.
To address this, the team is now working on a Slack integration that will let you quickly check your messages and reply without having to launch the Slack app. Further down the road, the team wants to integrate support for other platforms — like Google Docs, JIRA and GitHub — which would all be pulled into Superpowered’s universal notification inbox.
For the time being, Superpowered is $10 per month for Mac users or $8 per month for those who sign up with a team. Annual pricing is not yet available.
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Passive collaboration is essential to remote work’s long-term success
In 1998, Sun Microsystems piloted its “Open Work” program, letting roughly half of their workforce work flexibly from wherever they wanted. The project required new hardware, software and telecommunications solutions, and took about 24 months to implement.
Results were very positive, with a reduction in costs and the company’s carbon footprint. Despite this outcome, long-term remote work never really caught on more broadly. In fact, the 2010s were focused on going the other direction, as open offices, on-site perks and coworking spaces sprung up around the idea that in-person community is an essential component of innovation.
In 2020, companies of all sizes, in all corners of the world, were forced to shift to remote work with the onset of COVID-19. While some companies were better positioned than others — whether it be due to a previously distributed workforce, a reliance on cloud apps and services, or already-established flexible work policies — the adjustment to a fully remote workforce has been challenging for everyone. The truth is that even the largest companies have had to rely on the heroics of employees making sacrifices and persevering through numerous challenges to get through this time.
The best engineering work isn’t done in isolation, but in collaboration, as teams discuss, wrangle and brainstorm through problems.
Technology like high-quality video conferencing and the cloud have been integral in making remote work possible. But we don’t yet have a complete substitute for in-person work because we continue to lack tooling in one critical area: passive collaboration. While active collaboration (which is the lion’s share) can happen over virtual meetings and emails, we haven’t fully solved for enabling the types of serendipitous conversations and chance connections that often power our biggest innovations and serve as the cornerstone of passive collaboration.
Active versus passive collaboration
Those outside of the tech industry may think that software engineers only need a computer and a secure internet connection to do their work. But the stereotype of the lone engineer coding away in solitude has long been shattered. The best engineering work isn’t done in isolation, but in collaboration, as teams discuss, wrangle and brainstorm through problems. Video conference platforms and chat applications help us collaborate actively, and tools like Microsoft Visual Studio Code and Google Docs allow for dedicated asynchronous collaboration, too.
But what we currently lack are the moments of spontaneous engagement that energize us and invite new ideas that otherwise wouldn’t have been part of the conversation. The long-term impact of not having access to this has not yet been measured, but it’s my belief that it will have a negative effect on innovation because passive collaboration plays such a critical role in fostering creativity.
The whiteboard
The best way to think about the differences between passive and active collaboration is to look at a whiteboard. Someone recently asked me, “What is it with people in tech and whiteboards? Why are they such a big deal?” Whiteboards are simple and “low-tech,” yet have become quintessential in our industry. That’s because they represent a source of multimodal collaboration for engineers. Let’s think back to before COVID. How many times have you walked by (or been a part of) a scrum meeting of engineers huddled around a whiteboard?
Have you ever stopped by because you overheard a snippet of a conversation and wanted to learn more or share your perspective? Or maybe something on a whiteboard caught your eye and caused you to start a conversation with another colleague, leading to a breakthrough. These are all moments of passive collaboration, which whiteboards so excellently enable (in addition to being a tool for real-time, active collaboration). They’re low-friction ways to invite new ideas and perspectives to the conversation that otherwise wouldn’t have been considered.
While whiteboards are one mode of facilitating passive collaboration, they aren’t the only option. Serendipitous meetings in the break room, overhearing a conversation from the next cubicle over, or spotting someone across the room who’s free for a quick gut check are also examples of passive collaboration. These interactions are a critical piece of how we work together and the hardest to recreate in a world of remote work. Just as silos in the development process are detrimental to software quality, so too is a lack of passive collaboration.
We need tools that will help us peek over at what other people are working on without the pressure of a dedicated meeting time or update email. The free and open exchange of ideas is a birthplace for innovation, but we haven’t yet figured out how to create a good virtual space for this.
Looking forward
The future of work is one in which teams are more distributed than ever before, meaning we need new tools for passive collaboration not just for this year, but for the future, too. Our own internal survey results tell us that while some employees prefer the option to be fully remote once the pandemic is behind us, the majority want a more flexible solution in the future.
Crucially, the answer is not to create more meetings or email threads, but instead to reimagine virtual spaces that can function like the classic whiteboard and other serendipitous modes of collaboration. As we all still look for ways to solve this challenge, we at LinkedIn have been thinking about how to encourage cross-team conversations and open Q&As to share resources, as a start.
For decades, the tech industry has paved the way for innovations in employee experience, creating spaces and benefits that reduced friction in collaboration and productivity. Now, as we look ahead to a hybrid work world, we must find new ways to continue supporting employee productivity and creativity. It’s only when we’re able to fully realize passive collaboration virtually that we’ll have unlocked the full potential of remote and hybrid work situations.
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Welcome to Bloxburg, public investors
As Roblox began to trade today, the company’s shares shot above its reference price of $45 per share. Currently, Roblox is trading at $71.10 per share, up just over 60% from the reference price that it announced last night. That effort finally set a directional value of sorts on Roblox’s shares before it floated on the public markets.
Roblox, a gaming company aimed at children and powered by an internal economy and third-party development activity, has had a tumultuous if exciting path to the public markets. The company initially intended to list in a traditional IPO, but after enthusiastic market conditions sent the value of some public-offering shares higher after they began to trade, Roblox hit pause.
The former startup then raised a Series H round of capital, a $520 million investment that boosted the value of Roblox from around $4 billion to $29.5 billion. TechCrunch jokes that, far from IPOs mispricing IPOs, that $4 billion price set in early 2020 was the real theft, given where the company was valued just a year later. Sure, the pandemic was good for Roblox, but seeing a 5x repricing in four quarters was hilarious.
Regardless. At $45 per share, Roblox’s direct listing reference price, the company was worth $29.1 billion, per Renaissance Capital, an IPO-focused group. Barron’s placed the number at $29.3 billion. No matter which is closer to the truth, they were both right next to the company’s final private price.
So, the Series H investors nailed the value of Roblox, or the company merely tied its reference price to that price. Either way, we had a pretty clear Series H → direct listing reference price handoff.
The company’s performance today makes that effort appear somewhat meaningless as both prices were wildly under what traders were willing to cough up during its first day of trading; naturally, we’ll keep tabs on its price as time continues, and one day is not a trend, but seeing Roblox trade so very far above its direct listing reference price and final private valuation appears to undercut the argument that this sort of debut can sort out pricing issues inherent in more traditional IPOs.
To understand the company’s early trading activity, however, we need to understand just how well Roblox performed in Q4 2020. When we last noodled on the company’s valuation, we only had data through the third quarter of last year. Now we have data through December 31, 2020. Let’s check how much Roblox grew in that final period, and if it helps explain how the company managed that epic Series H markup.
Gaming is popular, who knew
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Dear Sophie: What are the pros and cons of the H-1B, O-1A and EB-1A?
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
Dear Sophie:
I’m an entrepreneur who wants to expand my startup to the U.S. What are the benefits and drawbacks of various types of visas and green cards?
The ones I’ve heard the most about are the H-1B, O-1 and EB-1A.
— Intelligent in India
Dear Intelligent:
I’m happy to hear you’re considering the O-1A extraordinary ability visa and the EB-1A extraordinary green card! Individuals often assume they need to have won a Nobel Prize or some other major award or be well known in their field to qualify for either the O-1A or the EB-1A — and that’s simply not the case.
Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)
“Particularly for folks from Asia, being a self-promoter is massively looked down upon. Humility is important,” says Navroop Sahdev, a pioneering economist and blockchain expert I recently interviewed for my podcast. Sahdev is founder and CEO of The Digital Economist, a Connection Science Fellow at Massachusetts Institute of Technology and a partner at NextGen Venture Partners.
She spoke with me about her immigration journey to the United States, which included two H-1B visas, an O-1A visa and an EB-1A green card.
Here are the pros and cons of each visa and green card that you listed.
H-1B visa
Overall, the requirements for the H-1B specialty occupation visa are not as stringent as those for the O-1A visa and the EB-1A green card, which is why many employers sponsor international students who are on an F-1 visa and recently graduated or on OPT (Optional Practical Training) or STEM OPT for an H-1B.
Because demand for the H-1B far exceeds the annual supply of 85,000, U.S. Citizenship and Immigration Services (USCIS) holds a random lottery to determine who can apply for an H-1B. (That random lottery is slated to switch to a wage-based selection process next year.)
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Arist adds $2M to its seed round to grow its SMS-based training service
This morning Arist, a startup that sells software allowing other organizations to offer SMS-based training to staff, announced that it has extended its seed round to $3.9 million after adding $2 million to its prior raise.
TechCrunch has covered the company modestly before this seed-extension, noting that it was part of the CRV-backed Liftoff List, and reporting on some of its business details when it took part in a recent Y Combinator demo day.
Something that stood out in our notes on the company when it presented at the accelerator’s graduation event was its economics, with our piece noting that the startup “already [has] several big ticket clients and [says it] will soon be profitable.” Profitable is just not a word TechCrunch hears often when it comes to early-stage, high-growth companies.
So, when the company picked up more capital, we picked up the phone. TechCrunch spoke with the company’s founding team, including Maxine Anderson, the company’s current COO; Ryan Laverty, its president; and Michael Ioffe, its CEO, about its latest round.
According to the trio, Arist raised its initial $1.9 million around the time it left Y Combinator, a round that was led by Craft Ventures at a $15 million valuation. Following that early investment, the company’s business with large clients performed well, leading to it closing $2 million more last December. The founders said that the new funds were raised at a higher price-point than its previous seed tranche.
The second deal was led by Global Founders Capital.
The company’s enterprise adoption makes sense, as all large companies have regular training requirements for their workers; and as anyone who has worked for a megacorp knows, current training, while improved in recent years, is far from perfect. Arist is a bet that lots of corporate training — and the training that emanates from governments, nonprofits and the like — can be sliced into small pieces and ingested via text-message.
For that the company charges around $1,000 per month, minimum.
Arist did catch something of a COVID wave, with its founding team telling TechCrunch that pitching its service to large companies got easier after the pandemic hit. Many concerns better realized how busy their staff was when they moved to working from home, the trio explained, and with some folks suffering from limited internet connectivity, text-based training helped pick up slack.
We were also curious about how the startup onboards customers to the somewhat new text-based learning world; is there a steep learning curve to be managed? As it turns out, the startup helps new customers build their first course. And, in response to our question about the expense of that effort, the Arist crew said that they use freelancers for the task, keeping costs low.
Recently Arist has expanded its engineering staff, and plans to scale from around 11 people today to around 30 by the end of the year. And while Anderson, Laverty and Ioffe are based in Boston, they are hiring remotely. The startup serves global customers via a WhatsApp integration. So Arist should be able to scale its staff and customer base around the world effectively from birth. (This is the new normal, we reckon.)
What’s ahead? Arist wants to grow its revenues by 5x to 10x by the end of the year, hire, and might share if it wants to raise more capital around the end of the year.
Oh, and it partners with Twilio to some degree, though the group was coy on just what sort of discounts it may receive; the founding team merely noted that they liked the SMS giant and deferred further commentary.
All told, Arist is what we look for in an early-stage startup in terms of growth, vision and potential market scale — the startup thinks that 80% of training should be via SMS or Slack and Teams, the latter two of which are a hint about its product direction. But Arist feels a bit more mature financially than some of its peers, perhaps due to its price point. Regardless, we’ll check back in at the mid-point of the year and see how growth is ticking along at the company.
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There have never been more $100M+ fintech rounds than right now
We’re putting aside the IPO news cycle this morning to check in on the venture capital world and the fintech market in particular.
As we all know, fintech is booming: Between Robinhood and Public and M1 Finance raising competing rounds, payment-tech startup Finix moving to diversify its cap table, and ideas that work in one market finding purchase and capital in others, it’s a damn good time to build financial technology.
But perhaps even with all that recent knowledge, we’re still missing the point.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
A provisional report from data and research group CB Insights indicates that we’re not merely in a warm period for fintech funding — we are in a period of all-time record investment for so-called mega-rounds, or investments of $100 million or more inside the fintech realm.
The first quarter of 2020 had stiff competition to overcome to set a mega-round record. The preceding period, Q4 2020, for example, saw 30 fintech rounds across the globe that were worth nine figures. But, to date, Q1 2021 is ahead and is thus guaranteed to set a new record, having already bested the preceding all-time high.
This morning we’re talking big money and fintech, with a splash of early-stage digging. I asked a CB Insights analyst about what appears to be falling fintech seed deal volume. Is this the result of data reporting delays inherent to seed data, the impact of SAFEs and other sorts of notes limiting visibility into the earliest stages of venture, or just a plain-old slowdown? Let’s find out.
Big, bigger, small, fewer
Per the interim CB Insights dataset, there have been some 33 fintech mega-rounds so far in 2021. For context, it’s more than 50% more such rounds in Q1 2020 and Q1 2019. Via the preliminary report, here’s the data:
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Rent the Runway’s first iOS team launches Runway, an easier way to coordinate app releases
A team of mobile app engineers and designers from companies like Rent the Runway, ClassPass, Kickstarter and others, are now launching their own startup, Runway, to address the common pain points they experienced around the mobile app release cycle. With Runway, teams can connect their existing tools to keep track of the progress of an app’s release, automate many of the manual steps along the way and better facilitate communication among all those involved.
“Mobile app releases are exercises in herding cats, we often say. There’s a lot of moving pieces and a lot of fragmentation across tools,” explains Runway co-founder Gabriel Savit, who met his fellow co-founders — Isabel Barrera, David Filion, and Matt Varghese — when they all worked together as the first mobile app team at Rent the Runway.
“The result is a lot of overhead in terms of time spent and wasted, a lot of back and forth on Slack to make sure things are ready to ship,” he says.
Typically, interdisciplinary teams involving engineers, product, marketing, design, QA and more, will keep each other updated on the app’s progress using things like spreadsheets and other shared documents, in addition to Slack.
Meanwhile, the actual work taking place to prepare for the release is being managed with a variety of separate tools, like GitHub, JIRA, Trello, Bitrise, CircleCI and others.
Image Credits: Runway
Runway is designed to work as an integration layer across all the team’s tools. Using a simple OAuth authentication flow, the team connects whichever tools they use with Runway, then configure a few settings that allow Runway to understand their unique workflow — like what their branching strategy is, how they create release branches, how they tag releases and so on.
In other words, teams train Runway to understand how they operate — they don’t have to change their own processes or behavior to accommodate Runway.
Once set up, Runway reads the information from the various integration points, interprets it and takes action. Everyone on the team is able to log into Runway via its web interface and see exactly where they are in the release cycle and what still needs to be done.
“We’re forming this glue, this connective tissue between all of the moving pieces and the tools, and creating a true source of truth that everybody can refer to and sync or gather around. That really facilitates and improves the level of collaboration and getting people on the same page,” Savit says.
Image Credits: Runway
As the work continues, Runway helps to identify problems, like missing JIRA tags, for example. It then automatically backfills those tags. It can also help prevent other mistakes, like when the incorrect build is being selected for submission.
Another automation involves Slack communication. Because Runway understands who’s responsible for what, it can direct Slack notifications and updates to specific members of the team. This reduces the noise in the Slack channel and ensures that everyone knows what they’re meant to be working on.
Currently, Runway is focused on all the parts of the mobile app release cycle from kickoff to submission to the actual app store releases. On its near-term roadmap, it plans to expand its integrations to include connections to things like bug reporting and beta testing platforms. Longer term, the company wants to expand its workflow to include launching apps on other platforms, like desktop.
Image Credits: Runway
The startup is currently in pilot testing with a few early customers, including ClassPass, Kickstarter, Capsule and a few others. These customers, though not all yet paying clients, have already used the system in production for over 40 app release cycles.
The startup’s pricing will begin at $400 per app per month, which allows for unlimited release managers and unlimited apps, access to all integrations, and iOS and Android support, among other things. Custom pricing will be offered to those who want higher levels of customer support and consulting services.
The startup doesn’t have an exact ETA to when it will launch publicly as it’s working to onboard each customer and work closely with them to address their specific integration needs for now. Today, Runway supports integrations with the App Store, Google Play, GitHub, JIRA, Slack, Circle, fastlane, GitLab, Bitrise, Linear, Jenkins and others, but may add more integrations as customers require.
Runway’s team of four is mostly New York-based and is currently participating in Y Combinator’s Winter 2021 virtual program. The company hasn’t yet raised a seed round.
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DataGrail snares $30M Series B to help deal with privacy regulations
DataGrail, a startup that helps customers understand where their data lives in order to help comply with a growing body of privacy regulations, announced a $30 million Series B today.
Felicis Ventures led the round with help from Basis Set Ventures, Operator Collective and previous investors. One of the interesting aspects of this round was the participation from several strategic investors including HubSpot, Okta and Next47, the venture firm backed by Siemens. The company has now raised over $39 million, according to Crunchbase data.
That investor interest could stem from the fact that DataGrail helps organizations find data by building connectors to popular applications and then helps ensure that they are in compliance with customer privacy regulations such as GDPR, CCPA and similar laws.
“DataGrail [is really] the first integrated solution with over 900 integrations (up from 180 in 2019) to different apps and infrastructure platforms that allow the product to detect when new apps or new infrastructure platforms are added, and then also perform automated data discovery across those applications,” company CEO and co-founder Daniel Barber explained to me. This helps users find customer data wherever it lives and enables them to comply with legal requirements to manage and protect that data.
Victoria Treyger, general partner at lead investors Felicis Ventures says that one of the things that attracted her to DataGrail was that she had to help implement GDPR regulations at a previous venture and felt the pain first hand. She said that her firm tends to look for startups in large markets where the product or service being offered is a critical need, rather an option, and she believes that DataGrail is an example of that.
“I really liked the fact that privacy management is such a hard problem, and it is not optional. As a business, you have to manage privacy requests, which you may do manually or you may do it with a solution like DataGrail,” Treyger told me.
HubSpot’s Andrew Lindsay, who is SVP of corporate and business development, says his company is both a customer and an investor because DataGrail is helping HubSpot customers navigate the complexity of privacy regulation. “DataGrail’s unique ecosystem approach, where they are integrating with key Saas and business applications is an easy way for many of our joint customers to protect their customers’ privacy,” Lindsay said.
The company has 40 employees today with plans to grow to 90 or 100 by the end of this year. It’s worth noting that Treyger is joining the Board, which already has 3 other women. That shows shows a commitment to gender diversity at the board level that is not typical for startups.
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Aqua Security raises $135M at a $1B valuation for its cloud native security platform
Aqua Security, a Boston- and Tel Aviv-based security startup that focuses squarely on securing cloud-native services, today announced that it has raised a $135 million Series E funding round at a $1 billion valuation. The round was led by ION Crossover Partners. Existing investors M12 Ventures, Lightspeed Venture Partners, Insight Partners, TLV Partners, Greenspring Associates and Acrew Capital also participated. In total, Aqua Security has now raised $265 million since it was founded in 2015.
The company was one of the earliest to focus on securing container deployments. And while many of its competitors were acquired over the years, Aqua remains independent and is now likely on a path to an IPO. When it launched, the industry focus was still very much on Docker and Docker containers. To the detriment of Docker, that quickly shifted to Kubernetes, which is now the de facto standard. But enterprises are also now looking at serverless and other new technologies on top of this new stack.
“Enterprises that five years ago were experimenting with different types of technologies are now facing a completely different technology stack, a completely different ecosystem and a completely new set of security requirements,” Aqua CEO Dror Davidoff told me. And with these new security requirements came a plethora of startups, all focusing on specific parts of the stack.
Image Credits: Aqua Security
What set Aqua apart, Dror argues, is that it managed to 1) become the best solution for container security and 2) realized that to succeed in the long run, it had to become a platform that would secure the entire cloud-native environment. About two years ago, the company made this switch from a product to a platform, as Davidoff describes it.
“There was a spree of acquisitions by CheckPoint and Palo Alto [Networks] and Trend [Micro],” Davidoff said. “They all started to acquire pieces and tried to build a more complete offering. The big advantage for Aqua was that we had everything natively built on one platform. […] Five years later, everyone is talking about cloud-native security. No one says ‘container security’ or ‘serverless security’ anymore. And Aqua is practically the broadest cloud-native security [platform].”
One interesting aspect of Aqua’s strategy is that it continues to bet on open source, too. Trivy, its open-source vulnerability scanner, is the default scanner for GitLab’s Harbor Registry and the CNCF’s Artifact Hub, for example.
“We are probably the best security open-source player there is because not only do we secure from vulnerable open source, we are also very active in the open-source community,” Davidoff said (with maybe a bit of hyperbole). “We provide tools to the community that are open source. To keep evolving, we have a whole open-source team. It’s part of the philosophy here that we want to be part of the community and it really helps us to understand it better and provide the right tools.”
In 2020, Aqua, which mostly focuses on mid-size and larger companies, doubled the number of paying customers and it now has more than half a dozen customers with an ARR of over $1 million each.
Davidoff tells me the company wasn’t actively looking for new funding. Its last funding round came together only a year ago, after all. But the team decided that it wanted to be able to double down on its current strategy and raise sooner than originally planned. ION had been interested in working with Aqua for a while, Davidoff told me, and while the company received other offers, the team decided to go ahead with ION as the lead investor (with all of Aqua’s existing investors also participating in this round).
“We want to grow from a product perspective, we want to grow from a go-to-market [perspective] and expand our geographical coverage — and we also want to be a little more acquisitive. That’s another direction we’re looking at because now we have the platform that allows us to do that. […] I feel we can take the company to great heights. That’s the plan. The market opportunity allows us to dream big.”
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