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Google and Snap in talks to invest in India’s ShareChat
ShareChat, an Indian social network that added Twitter as an investor in 2019, may soon receive the backing of two more American firms.
The Bangalore-based startup is in advanced stages of talks to raise money from Google and Snap, as well as several existing investors, including Twitter, three sources familiar with the matter told TechCrunch.
The new financing round — a Series E — is slated to be larger than $200 million, with Google alone financing more than $100 million of it, four sources said, requesting anonymity as the talks are private. The round values ShareChat at more than $1 billion, two of the sources said.
ShareChat, Google and Snap did not immediately respond to a request for comment. ShareChat has raised about $264 million to date and was valued at nearly $700 million last year.
The terms of the deal could change and the talks may not materialize into an investment, the sources cautioned. Local TV channel ET Now reported last year that Google was in talks to acquire ShareChat.
ShareChat’s marquee and eponymous app caters to users in 15 Indian languages and has a large following in small Indian cities and towns. Twitter and Snap, on the other hand, are struggling to gain users beyond urban cities in the world’s second-largest internet market. Both Twitter and Snapchat have about 50 million monthly active users in India, according to a popular mobile insight firm.
In an interview with TechCrunch last year, Ankush Sachdeva, co-founder and chief executive of ShareChat, said the app was growing “exponentially” and that users were spending, on average, more than 30 minutes on the app each day.
If the deal goes through, it would be the first investment from Snapchat’s parent company into an Indian startup. Google, on the other hand, has been on a spree of late. The Android-maker last month invested in DailyHunt and InMobi’s Glance, both of which operate short-video apps.
Like the two, ShareChat also operates a short-video app. Its app, called Moj, had amassed more than 80 million monthly active users as of September last year, the startup said at the time. Several of these short videos apps, as well as Times Internet’s MX TakaTak (operated by MX Player), have witnessed an accelerated growth in recent quarters thanks in part to New Delhi banning ByteDance’s TikTok and hundreds of other Chinese apps mid-last year.
Last year, Google announced that it plans to invest $10 billion in India over the course of five to seven years. Days later, the company invested $4.5 billion in Indian telecom giant Jio Platforms. Google and Facebook, which invested $5.7 billion in Jio Platforms last year, reach more than 400 million users in the country.
Google, Facebook, ShareChat, DailyHunt and Glance generate most of their revenue through ads. About 85% of the ad market in India is currently commanded by Facebook and Google, analysts at Bank of America wrote in a report to clients last year. “We estimate this market to be $10 billion by 2024 and see room for Facebook to increase its market-share by 4 percentage points in 4 years led by partnership with Jio. We estimate Facebook may have $4.7 billion revenues by 2024,” they wrote in the equity research report, obtained by TechCrunch.
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India’s CRED raises $81 million, buys back shares worth $1.2 million from employees
Bangalore-based CRED is kickstarting the new year on a high note.
The two-year-old startup, led by high-profile entrepreneur Kunal Shah, said on Monday it has raised $81 million in a new financing round and bought shares worth $1.2 million (about 90 million Indian rupees) from employees.
The Series C financing round, as first reported by TechCrunch in late November, was led by DST Global. Existing investors Sequoia Capital, Ribbit Capital, Tiger Global and General Catalyst also participated in the round, and so did a few new names, including Satyan Gajwani of Indian conglomerate Times Internet, Sofina and Coatue.
The round gave CRED — which operates an eponymous app to reward customers for paying their credit card bill on time and offers deals from interesting online brands — a post-money valuation of $806 million.
In an interview with TechCrunch, Shah said that about 10% of CRED’s cap table is currently allocated to employees, and those who held vested stocks were eligible to sell up to 50% of their shares back to the startup in its first ESOP liquidity program. “We believe that startups should think about creating wealth for every shareholder, including employees.”
CRED has nearly doubled its customer base to about 5.9 million in the past year, or about 20% of the credit card holder base in India. The startup said that the median credit score of its customer was about 830, and about 30% of its customer base today holds a premium credit card. (On a side note, more than 50% of CRED customers pay their bills using UPI.)
CRED is one of the most talked-about startups in India, in part because of the scale at which its valuation has soared and the amount of capital it has been able to raise in such a short period.
One of the biggest questions surrounding CRED is just how it makes money, given how most fintech startups in the country — and there are many of them — are struggling to find a business model.
Shah said CRED makes money by cross-selling financing products — for which it has a revenue-sharing arrangement with banks and other financial institutions — and levies a similar cut from merchants who are on the platform today. More than 1,300 brands — including big names Starbucks, TAGG, Eat.Fit, Nykaa and emerging premium direct-to-consumer brands such as The Man Company, Sleepy Cat and Crossbeats –have joined the platform in recent years.
Direct-to-consumer market in India is still in its nascent stage, though some estimates say it could be worth $100 billion by 2025.
“I don’t think we were very deliberate to make D2C happen. It just so happened that in the early days when we offered rewards for D2C brands, they started to see huge traction,” he said, adding that CRED drove more than 30% sales for some brands.
“We realized that we were able to solve the discovery problem for customers. We are approaching this with themes — work-from-home and coffee — and it’s working out well. We are now playing matchmaking role between customers and brands that otherwise had to spend a lot of money in marketing.”
One of the biggest propositions of CRED is that it has been able to court some of the most sought-after customers in India. Unlike many other startups and giants such as Google and Facebook, CRED is not going after the next billion users.
“About 20 million customers account for 90% of all online consumption in India. These are the customers we are focusing on,” said Shah, who previously ran financial services firm Freecharge and delivered one of the rare successful exits in the country. The core challenge in chasing customers in smaller cities and towns in India is that very few people have the financial capacity to buy things, Shah said.
For that model to work, the GDP of India — where the average annual income of an individual is about $2,000 — needs to grow. And for that, we need more participation from females, said Shah. Less than 10% of the female population in India are currently part of the workforce, compared to over 90% in China.
An interesting use case for CRED today is that it could potentially license to venture firms data about the traction D2C brands are seeing on its platform, which could use it as a signal to inform their investment decisions.
Shah cautioned that the startup is “extraordinarily sensitive about data” but said the team is thinking about ways to help venture firms discover these firms. “We are planning to create a newsletter to showcase many of these brands to the investor world,” he said.
And finally, will CRED launch a credit card or other banking products? “Can we partner with banks to cross-sell every product that they today offer? The answer is yes,” said Shah, though he cautioned that the startup is in no hurry to supercharge its offerings.
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Known for 5G mmWave testing solutions, Taiwan’s TMYTEK sets its sights on base stations
TMYTEK recently raised a Series A+ round of about $10 million for products that make it easier to test 5G millimeter wave equipment. So far, the company’s clients include KDDI, NTT DoCoMo and research institutions. But the Taiwanese startup has aspirations to sell its own base stations, too, competing with well-established players like Nokia, Ericsson, Samsung and Huawei. TMYTEK plans to use its expertise, gleaned from helping other researchers develop 5G infrastructure, to create what its chief executive officer describes as a “complete 5G industrial chain.”
Its latest funding round was led by TMYTEK’s manufacturing partner Inventec, one of the largest OEMs in Taiwan, and brings the startup’s total funding so far to $13.3 million. Other investors included Taisic Materials, ITEQ, Tamagawa Electronics and Taiwan’s National Development Fund. TMYTEK also recently took part in SparkLabs Taipei’s accelerator program.
Co-founder and chief executive officer Su-Wei Chang told TechCrunch that it plans to raise a Series B next to develop and commercialize its base stations. To get ready for its base station business, TMYTEK recently joined the O-RAN Alliance, founded by some of the world’s biggest telecoms to create more interoperable mobile networks, in a bid to encourage the development of new technology and faster deployment.
Chang said TMYTEK’s base in Taiwan gives it a strategic advantage. 5G manufacturing is an important part of Taiwan’s economy, with exports reaching record highs during the second half of 2020, thanks in part to demand for 5G-related equipment and technology for smartphones, autonomous vehicles and smart devices.
Chang studied at University of Massachusetts Amherst and when TMYTEK was founded six years ago, he was often asked why he didn’t stay in the United States, where it would have been easier to secure startup funding. But being in Taiwan puts the company closer to many important markets, including Japan, where 30% of its current business comes from, and gives TMYTEK a good foundation to expand into the U.S. and European market, he said.
It has also given the company a supply chain advantage. TMYTEK has manufacturing partners across Asia, including Inventec in Taiwan, and factories in Vietnam and Thailand, in addition to China. Chang said this means TMYTEK was not limited by the COVID-19 pandemic or the U.S.-China trade war.
Before launching TMYTEK in 2014, Chang and co-founder Ethan Lin both worked at Academia Sinica, one of the top research institutions in Taiwan, where they focused on millimeter waves even though at the time most researchers were more interested in the mid-band spectrum.
But as more devices and applications began to crowd the 4G spectrum, mmWave became less niche. With Qualcomm’s launch of next-generation 5G mmWave hardware and chips, and more carriers launching mmWave coverage, mmWave is poised to become mainstream.
Millimeter waves offer powerful signals with wide bandwidth and low latency, but drawbacks include difficulty traveling through obstacles like buildings. It also has a limited range, which is why millimeter waves need more base stations. Beamforming, which directs signals toward a specific device, and antenna array, or multiple antennas that work like a single antenna, are used to extend its coverage.
Making mmWave development faster
One of the main challenges for the millimeter wave market, however, is the lack of R&D tools to speed up their development and time to market, resulting in higher costs and slower deployment.
To keep up with market opportunities, TMYTEK transitioned from design and manufacturing projects for clients to offering 5G-focused solutions like the BBox, which stands for “beamforming box.” The BBox was created after a professor at National Taiwan University told Chang that his team was working on antenna design, but didn’t have the resources to work on beamforming technology, too. It lets researchers create 16 beams and control the signal’s amplitude and phase with software, so they can test how it works with antennas and other hardware more quickly. TMYTEK claims the BBox can save researchers and engineers up to 80% in time and cost.
Chang said TMYTEK realized that if researchers at NTU, one of Taiwan’s largest research universities, needed a solution, then other labs did, too. So far, it has delivered 30 sets to companies including KDDI, NTT DoCoMo, Fujitsu, several Fortune 500 companies and research institutions.
While the BBox was created for antenna designers, the company also began exploring solutions to help other designers, including algorithm developers who want to test beam tracking, communicate with base stations and collect data.
TMYTEK vice president Ethan Lin holds the antenna-in-package for its XBeam millimeter wave testing solution (Image Credits: TMYTEK)
For that scenario, TMYTEK created the XBeam, which it describes as a “total solution,” and is meant for the mass production phase, testing modules, smartphones and base stations before they are shipped. Traditional solutions to test modules rely on mechanical rotators, but Chang said this is more suited to the research and development process. The XBeam, which is based on the BBox, electronically scans beams instead. The company claims the XBeam is up to 20 times faster than other testing solutions.
TMYTEK created the XBeam’s prototype in 2019 and launched the commercialized version in November 2020.
The BBox and XBeam will help TMYTEK build its own base station business in two ways, Chang said. First, having its own solutions will allow TMYTEK to test base stations and bring them to market faster. Second, the startup hopes building a reputation on effective research and development tools will help it market its base stations to private and public networks. This is especially important to TMYTEK’s ambitions since their base stations will be up against products from major players like Nokia, Ericsson, Samsung and Huawei.
“Our advantage at TMYTEK is that we’re doing the design and we have good partners for manufacturing. Inventec, our investor, is a top five manufacturer in Taiwan,” he said. “And TMYTEK also builds our own testing solution, so our value is that we can provide a total solution to our customers.”
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Union Square Ventures and Learn Capital file paperwork indicating new funds
As 2020 comes to a long-awaited end, a series of filings indicate that venture capitalists are ending the year with fresh money. According to SEC paperwork, Learn Capital and USV have filed paperwork that shows the firms have raised new, multimillion-dollar funds.
If you’ve been paying attention to news this past year, it’s clear that much of venture capital isn’t just surviving 2020 – it’s flourishing through it. Zoom investing, it seems, is working just fine for cash-rich firms looking to double down on bets in categories from edtech to climate.
First up, New York-based USV submitted a pair of filings on late Thursday. The first filing shows that the firm has closed $151 million for USV Climate 2021, which one can assume is focused on climate-tech investments. As my colleague Jonathan Shieber has pointed out, climate tech.
The other, more nebulous filing, is the firm’s $22.4 million investment vehicle titled USV Bundled. It’s unclear what this is focused on, but a recent blog post suggests that the firm will continue to double down on its education investments.
Speaking of edtech, Learn Capital, an education-focused venture capital fund, filed paperwork indicating that it has closed $132 million in capital. It plans to raise a total of $250 million for this fund, which will be the firm’s fourth investment vehicle to date. The edtech category has obviously been booming with interest, which also fueled Owl Ventures to close $585 million in new capital in September.
Finally, I’ll give an honorable mention to Lattice CEO Jack Altman’s New Years Eve filing, which shows that the executive plans to raise $20 million for a new fund. It’s unclear if this filing indicates Apollo’s next step, a venture fund started by the Altman brothers. The trio, beyond Jack, includes Max and Sam, the former president of Y Combinator who currently serves as the CEO of OpenAI.
I reached out for comment to all three entities, but (unsurprisingly) haven’t heard back. It’s New Year’s Eve after all. So for now, back to the Champagne. See you all in the New Year.
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Extra Crunch’s top 10 stories of 2020
I edited hundreds of stories in 2020, so choosing my favorites would be an exercise in futility.
Instead, I’ve tried to gather a sample of Extra Crunch stories that taught me something new. (Which means this top 10 list betrays my ignorance, a humbling admission for a know-it-all like myself.)
While narrowing down the field of candidates, I realized that we’re covering each of the topics on this list in greater depth next year. We already have stories in the works about no-code software, the emergence of edtech, proptech and B2B marketplaces, to name just a few.
Some readers are skeptical about paywalls, but without being boastful, Extra Crunch is a premium product, just like Netflix or Disney+. I know: We’re not as entertaining as a historical drama about the reign of Queen Elizabeth II or a space western about a bounty hunter.
But, speaking as someone who’s worked at several startups, Extra Crunch stories contain actionable information you can use to build a company and/or look smart in meetings — and that’s worth something.
Thanks for reading, and I hope you have a very happy new year.
Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription
1. The VCs who founders love the most
Image Credits: Bryce Durbin/TechCrunch
Managing Editor Danny Crichton spearheaded the development of The TechCrunch List earlier this year to help seed-stage founders connect with VCs who write first checks.
The TechCrunch List has no paywall and contains details and recommendations about more than 400 investors across 22 verticals. Once it launched, Danny crunched the data to pick out 11 investors for which “founders were particularly effusive in their praise.”
2. API startups are so hot right now
Image Credits: Juana Mari Moya(opens in a new window)/Getty Images (Image has been modified)
Alex Wilhelm uses his weekday column The Exchange to keep a close eye on “private companies, public markets and the gray space in between,” but one effort stood out: An overview of six API-based startups that were “raising capital in rapid-fire fashion” when many companies were trying to find their COVID-19 footing.
For me, this was particularly interesting because it helped me better understand that an optimal pricing structure can be key to a SaaS company’s initial success.
3. ‘No code’ will define the next generation of software
4. Tracking the growth of low-code/no-code startups
Image Credits: Richard Drury(opens in a new window)/Getty Images
Two stories about the advent of no-code/low-code software that we ran in July take the third and fourth position on this list.
I have been a no-code user for some time: Using Zapier to send automated invitations via Slack for group lunches was a real time-saver in the pre-pandemic days.
“Enterprise expenditure on custom software is on track to double from $250 billion in 2015 to $500 billion in 2020,” so we’ll definitely be diving deeper into this topic in the coming months.
5. ‘Edtech is no longer optional’: Investors’ deep dive into the future of the market
Image Credits: PM Images(opens in a new window)/Getty Images
Natasha Mascarenhas picked up TechCrunch’s edtech beat when she joined us just before the pandemic. Twelve months later, she’s an expert on the topic.
In July, she surveyed six edtech investors to “get into the macro-impact of rapid change on edtech as a whole.”
- Ian Chiu, Owl Ventures
- Shauntel Garvey and Jennifer Carolan, Reach Capital
- Jan Lynn-Matern, Emerge Education
- David Eichler, TCV
- Jomayra Hererra, Cowboy Ventures
6. B2B marketplaces will be the next billion-dollar e-commerce startups
Image Credits: Kmatta(opens in a new window)/Getty Images
In 2018, B2B marketplaces saw an estimated $680 billion in sales, but that figure is expected to reach $3.6 trillion by 2024.
As companies shifted their purchasing online, these platforms are adding a range of complementary services like payment management, targeted advertising and logistics while also hardening their infrastructure.
7. Facebook’s former PR chief explains why no one is paying attention to your startup
Caryn Marooney, right, vice president of technology communications at Facebook, poses for a picture on the red carpet for the 6th annual 2018 Breakthrough Prizes at Moffett Federal Airfield, Hangar One in Mountain View, Calif., on Sunday, Dec. 3, 2017. Image Credits: Nhat V. Meyer/Bay Area News Group
Reporter Lucas Matney spoke to Caryn Marooney in August at TechCrunch Early Stage about how startup founders who hope to expand their reach need to do a better job of connecting with journalists.
“People just fundamentally aren’t walking around caring about this new startup,” she said. “Actually, nobody does.”
Speaking as someone who’s been on both sides of this equation, I most appreciated her advice about focusing on “simplicity and staying consistent” when it comes to messaging.
“Don’t let the complexity of your intellect cloud what needs to be simple,” she said.
8. You need a minimum viable company, not a minimum viable product
Image Credits: alvarez(opens in a new window)/Getty Images
In a guest post for Extra Crunch, seed-stage VC Ann Miura-Ko shared some of what she’s learned about “the magic of product-market fit,” which she termed “the defining quality of an early-stage startup.”
According to Miura-Ko, a co-founding partner at Floodgate, startups can only reach this stage when their business model, value propositions and ecosystem are in balance.
Using lessons learned from her portfolio companies like Lyft, Refinery29 and Twitch, this article should be required reading for every founder. As one commenter posted, “I read this thinking, ‘I need to add some slides to my deck!’”
9. 6 investment trends that could emerge from the COVID-19 pandemic
10 January 2020, Berlin: Doctor Olaf Göing, chief physician of the clinic for internal medicine at the Sana Klinikum Lichtenberg, tests mixed-reality 3D glasses for use in cardiology. They can thus access their patients’ medical data and visualize the finest structures for diagnostics and operation planning by hand and speech. The Sana Clinic is, according to its own statements, the first hospital in the world to use this novel technology in cardiology. Image Credits: Jens Kalaene/picture alliance via Getty Images
During “the early innings of this period of uncertainty,” an article we published offered several predictions about investor behavior in the U.S.
Although we posted this in April, each of these forecasts seem spot-on:
- Future of work: promoting intimacy and trust.
- Healthcare IT: telemedicine and remote patient monitoring.
- Robotics and supply chain.
- Cybersecurity.
- Education = knowledge transfer + social + signaling.
- Fintech.
10. Construction tech startups are poised to shake up a $1.3-trillion-dollar industry
Image Credits: Steve Proehl(opens in a new window)/Getty Images
I’ve always found the concept of total addressable market (TAM) hard to embrace fully — the arrival of a single disruptive company could change an industry’s TAM in a week.
However, several factors are combining to transform the construction industry: high fragmentation, poor communication, a skilled labor shortage and a lack of data transparency.
Startups that help builders manage aspects like pre-construction, workflow and site visualization are making huge strides, but because “construction firms spend less than 2% of annual sales volume on IT,” the size of this TAM is not at all speculative.
11. Don’t let VCs be the gatekeepers of your success
Image Credits: PM Images(opens in a new window)/Getty Images
As a bonus, I’m including a TechCrunch op-ed written by insurtech founder Kevin Henderson that describes the myriad challenges he has faced as a Black entrepreneur in Silicon Valley.
Some of the discussions about the lack of diversity in tech can feel abstract, but his post describes its concrete consequences. For starters: he’s never had an opportunity to pitch at a VC firm where there was another Black person in the room.
“Black founders have a better chance playing pro sports than they do landing venture investments,” says Henderson.
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The Equity crew predicts what’s to come in 2021
What could go wrong?
Hello and welcome back to Equity, TechCrunch’s venture-capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines. As you can see, this is our yearly predictions episode. Our behind-the-scenes guru Chris Gates joins us on the mic, we take shots at our prior prognostications, and nosh on what we feel is positively persaged.
As always, this episode is in good fun. If you don’t agree with we think is up ahead, that’s fine. You’re probably right. But we’re nothing if not up for a challenge, so we kept the tradition alive this year.
This is the last Equity episode of 2020. While we can’t tell you yet what our plans are for 2021, we can say — nay, project — that there are a lot of fun and big things coming for Equity. We’re planning our busiest year ever, by far.
And with that, we’re out of here. Thanks for several million downloads this year, our biggest annum to date.
Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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Amazon acquires podcast network Wondery
Amazon just announced that it’s acquiring Wondery, the network behind podcasts including “Dirty John” and “Dr. Death.”
Wondery will become part of Amazon Music, which added support for podcasts (including its own original shows) in September. At the same time, the announcement claims that “nothing will change for listeners” and that the network’s podcasts will continue to be available from “a variety of providers.”
Media companies and streaming audio platforms are all making big bets on podcasting, with Spotify making a series of acquisitions including podcast network Gimlet, SiriusXM acquiring Stitcher and The New York Times acquiring Serial Productions. Amazon is coming relatively late to this market, but it will now have the support of a popular podcast maker as it works to catch up.
“With Amazon Music, Wondery will be able to provide even more high-quality, innovative content and continue their mission of bringing a world of entertainment and knowledge to their audiences, wherever they listen,” Amazon wrote.
Financial terms were not disclosed. The Wall Street Journal previously reported that acquisition talks were in the works, and that those talks valued Wondery at around $300 million.
The startup was founded in 2016 by former Fox executive Hernan Lopez (who’s currently fighting federal corruption charges tied to his time at Fox). Numbers from Podtrac rank it as the fourth largest podcast publisher in November, with an audience in the U.S. of more than 9 million unique listeners.
Wondery has raised a total of $15 million in funding from Advancit Capital, BDMI, Greycroft, Lerer Hippeau and others, according to Crunchbase.
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Dear Sophie: Tips for getting a National Interest green card by myself?
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 working in the Bay Area on an H-1B visa and my employer won’t sponsor my green card.
I really want permanent residence, but I never won a Nobel prize; I’m single; and I don’t have a million dollars yet. However, I think I might qualify for an EB-2 NIW green card.
What can you share?
— National in Napa
Dear National:
Wonderful that you’re taking matters into your own hands! This is a complicated process, so the most important advice I can give you is to retain an experienced business immigration attorney to represent you and prepare and file your green card case.
For additional do’s and don’ts in U.S. immigration, please check out the recent podcast that my law firm partner, Anita Koumriqian, and I posted on the commandments of immigration (and especially what to not do when it comes to visas and green cards).
This particular episode focuses on family-based green cards, but these recommendations are timeless and apply to individuals who are self-petitioning for employment-based green cards, such as the EB-2 NIW (National Interest Waiver) for exceptional ability and the EB-1A for extraordinary ability. Our top recommendation in that podcast episode is to avoid DIY immigration, so definitely retain legal counsel!
Filing for an EB-2 NIW or any green card requires more than just filling out the appropriate forms. The process needs to be understood, as the law and legal requirements, and the analysis of whether and how you can best qualify is complicated.
With any immigration matter, one needs to have the resources to fully understand the process, the steps for applying, and the timing and deadlines. We want to always make sure that you always maintain legal status (never falling out of status) so that you can remain in the U.S. (and don’t have to leave).
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Student-founded Develop for Good surpasses 25,000 volunteer hours connecting students with nonprofits
This has been the year of the social organization. As the COVID-19 pandemic swept across the world and the United States, governments and a patchwork of nonprofits and volunteer organizations sprang into action, offering everything from food and medical supplies to children’s books and clothing to individuals and families struggling in the virus’s wake.
Perhaps the biggest divide though to getting people help has been digital — non-profits need to connect with their beneficiaries over the internet just as much as any retailer today. Unfortunately, tech talent is expensive and hard to find, particularly for often cash-strapped nonprofits.
That was part of the impetus for two Stanford seniors, Mary Zhu and Amay Aggarwal, to co-found Develop for Good, a matching service designed to connect motivated and ambitious undergrads in computer science, design and economics to nonprofits with specific projects that require expertise. They launched the network in March as the pandemic started spreading rapidly, and since then, the organization has itself started growing exponentially as well.
Develop for Good “was in response to [the pandemic], but at the same time, a lot of our peers were having their internships canceled, [and] a lot of companies were having hiring freezes,” Zhu explained. “People were also seeking opportunities to be able to develop their professional skills and develop their project experience.” This coincidence of needs among both students and nonprofits helped accelerate the matching that Develop for Good offers.
So far, the 501(c)(3) non-profit has coordinated more than 25,000 volunteer hours across groups like the Ronald McDonald House, UNICEF, the Native American Rights Fund (NARF), Easterseals, The Nature Conservancy, Save the Children, AARP and more. The program, which in its first batch focused on Zhu and Aggarwal’s network at Stanford, has since expanded to more than a dozen schools across the United States. The two first reached out to nonprofits through Stanford’s alumni network, although as the program’s reputation has grown, they have started getting inbound interest as well.
Volunteers take on a project for 5-10 hours per week for 10 weeks, typically in teams. Each team meets their nonprofit client at least weekly to ensure the project matches expectations. Typical projects include application development, data visualization, and web design. Most projects conclude at the end of the batch, although the founders note that some in-depth projects like product development can cross over into future batches. As the program has expanded, Zhu and Aggarwal have added a more formal mentorship component to the program to help guide students through their work.
Applications for the next batch starting in January are currently open for students (they’re due January 2nd, so get them in quick!). The founders told me that they are expecting 800 applications, and are likely going to be able to match about 200 volunteers to 32 projects. Applications are mostly about matching interests with potential programs for the best fit, rather than a purely competitive exercise. So far, the program has worked on 50 projects to date.
For this next batch, Amazon Web Services will sponsor a stipend for first-generation and low-income students to help defray the financial impact of volunteer work for some students. “Over the past cycle, a few people had to drop out because they said, ‘they’re unable to work for free because they’re having a lot of financial stress for their families’,” Aggarwal said. The new stipend is meant to help these students continue to volunteer while alleviating some of that financial burden.
Aggarwal said that two-thirds of the program’s volunteer developers and designers are female, and one-third are first-generation or low-income.
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On the diversity front, 2020 may prove a tipping point
Since Minneapolis police officers killed George Floyd in May and kicked off months of nationwide protests, the corporate world — including venture capitalists — have attempted to respond to the Black Lives Matter movement.
Indeed, many quickly took to social media to voice their support, broadcast their new diversity-focused networking groups and pledge to do better, particularly when it comes to finding and funding more Black founders and other underrepresented entrepreneurs.
As of 2018, 81% of venture firms still lacked a single Black investor.
It was tempting to dismiss it as so much hot air, given that VCs have talked about diversity for eons without doing much about it.
As of February 2020, according to a report by All Raise, an organization that promotes female founders, 65% of VC firms still had no female partners. As of 2018, 81% of venture firms still lacked a single Black investor, per an analysis by Equal Ventures partner Richard Kerby.
Those numbers are comparatively rosy when considering the percentage of women and Black investors in senior decision-making roles. According to recent PitchBook data, at the start of this year, just 12.4% of decision-makers at U.S. venture firms were women (up slightly from the 9.65% at the start of 2019). As for for the number of Black investors in senior positions, it has long hovered around just 2%.
But here’s the good news: While it remains an ongoing challenge to get these numbers in sync with other industries, there were two developments specifically in 2020 that may beget more action in 2021.
We’d first point to the decision this fall by Yale’s endowment to require its asset managers to do better when it comes to diversity. Specifically, the school’s $32 billion endowment — led since 1985 by investor David Swensen — told its 70 U.S. money managers that from here on out, they will be measured annually on their progress in increasing the diversity of their investment staff, from hiring to training to mentoring to their retention of women and minorities.
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