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Finn.auto — which allows people to subscribe to their car instead of owning it, and offsetting their CO₂ emissions — has raised a $24.2 million / €20 million Series A funding round. White Star Capital (which has also invested in Tier Mobility), and the Zalando co-CEOs Rubin Ritter, David Schneider and Robert Gentz, are new investors in this round. All previous investors participated.
The funding comes just under a year since the company launched, after selling just 1,000 car subscriptions. It’s also partnered with Deutsche Post AG and Deutsche Telekom AG.
A number of car manufacturers have launched similar subscription services powered by various providers, such as Drover, LeasePlan and Wagonex.
U.K.-based startup Drover has raised a total of $40 million in funding over five rounds. Their latest Series B funding round was with Shell Ventures and Cherry Ventures . Plus, there are branded services which include Audi on Demand, BMW, Citroën, DS, Jaguar Carpe, Land Rover Carpe, Mini, Volkswagen and Care by Volvo.
Digitally led subscription services have the potential to disrupt the traditional car sales model, and new startups are entering the market all the time.
The finn.auto model is proving to appeal to environment-conscious millennials. For each car subscription, the company is offsetting the CO₂ emissions of its vehicles, meaning subscribers can drive their cars in a climate-neutral manner. It’s now expanding its range of fully electric vehicles and, in cooperation with ClimatePartner, is supporting selected regional climate protection and development projects.
Key to the Munich-based startups’ play is the automation of fleet management processes and customer interactions, meaning it’s much easier and cheaper to run this kind of subscription operation.
Max-Josef Meier, CEO and founder of finn.auto, said: “We are delighted to have been able to bring such high-caliber investors on board and that our existing investors are cementing their confidence with the current round. Mobility with your own car becomes as easy as buying shoes on the internet. We already offer a large selection of different car brands, whose cars can be ordered online on our platform in just five minutes and at flexible runtimes. The delivery is then conveniently made to the front door.”
Nicholas Stocks, general partner at White Star Capital added: “There is a huge opportunity globally to streamline outdated customer experiences in the automotive retail space and become the Amazon of the automotive industry. This is something finn.auto is excellently placed to capitalize on with its offering of convenience, flexibility, value and sustainability.”
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As a product manager, I’m a true believer that you can solve any problem with the right product and process, even one as gnarly as the multiheaded hydra that is microservice overhead.
Working for Vertex Ventures US this summer was my chance to put this to the test. After interviewing 30+ industry experts from a diverse set of companies — Facebook, Fannie Mae, Confluent, Salesforce and more — and hosting a webinar with the co-founders of PagerDuty, LaunchDarkly and OpsLevel, we were able to answer three main questions:
Out of dozens of companies we spoke with, only two had not yet started their journey to microservices, but both were actively considering it. Industry trends mirror this as well. In an O’Reilly survey of 1500+ respondents, more than 75% had started to adopt microservices.
It’s rare for companies to start building with microservices from the ground up. Of the companies we spoke with, only one had done so. Some startups, such as LaunchDarkly, plan to build their infrastructure using microservices, but turned to a monolith once they realized the high cost of overhead.
“We were spending more time effectively building and operating a system for distributed systems versus actually building our own services so we pulled back hard,” said John Kodumal, CTO and co-founder of LaunchDarkly.
“As an example, the things we were trying to do in mesosphere, they were impossible,” he said. “We couldn’t do any logging. Zero downtime deploys were impossible. There were so many bugs in the infrastructure and we were spending so much time debugging the basic things that we weren’t building our own service.”
As a result, it’s more common for companies to start with a monolith and move to microservices to scale their infrastructure with their organization. Once a company reaches ~30 developers, most begin decentralizing control by moving to a microservice architecture.
Teams may take different routes to arrive at a microservice architecture, but they tend to face a common set of challenges once they get there.
Large companies with established monoliths are keen to move to microservices, but costs are high and the transition can take years. Atlassian’s platform infrastructure is in microservices, but legacy monoliths in Jira and Confluence persist despite ongoing decomposition efforts. Large companies often get stuck in this transition. However, a combination of strong, top-down strategy combined with bottoms-up dev team support can help companies, such as Freddie Mac, make substantial progress.
Some startups, like Instacart, first shifted to a modular monolith that allows the code to reside in a single repository while beginning the process of distributing ownership of discrete code functions to relevant teams. This enables them to mitigate the overhead associated with a microservice architecture by balancing the visibility of having a centralized repository and release pipeline with the flexibility of discrete ownership over portions of the codebase.
Teams may take different routes to arrive at a microservice architecture, but they tend to face a common set of challenges once they get there. John Laban, CEO and co-founder of OpsLevel, which helps teams build and manage microservices told us that “with a distributed or microservices based architecture your teams benefit from being able to move independently from each other, but there are some gotchas to look out for.”
Indeed, the linked O’Reilly chart shows how the top 10 challenges organizations face when adopting microservices are shared by 25%+ of respondents. While we discussed some of the adoption blockers above, feedback from our interviews highlighted issues around managing complexity.
The lack of a coherent definition for a service can cause teams to generate unnecessary overhead by creating too many similar services or spreading related services across different groups. One company we spoke with went down the path of decomposing their monolith and took it too far. Their service definitions were too narrow, and by the time decomposition was complete, they were left with 4,000+ microservices to manage. They then had to backtrack and consolidate down to a more manageable number.
Defining too many services creates unnecessary organizational and technical silos while increasing complexity and overhead. Logging and monitoring must be present on each service, but with ownership spread across different teams, a lack of standardized tooling can create observability headaches. It’s challenging for teams to get a single-pane-of-glass view with too many different interacting systems and services that span the entire architecture.
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Tecton.ai, the startup founded by three former Uber engineers who wanted to bring the machine learning feature store idea to the masses, announced a $35 million Series B today, just seven months after announcing their $20 million Series A.
When we spoke to the company in April, it was working with early customers in a beta version of the product, but today, in addition to the funding, they are also announcing the general availability of the platform.
As with their Series A, this round has Andreessen Horowitz and Sequoia Capital co-leading the investment. The company has now raised $60 million.
The reason these two firms are so committed to Tecton is the specific problem around machine learning the company is trying to solve. “We help organizations put machine learning into production. That’s the whole goal of our company, helping someone build an operational machine learning application, meaning an application that’s powering their fraud system or something real for them […] and making it easy for them to build and deploy and maintain,” company CEO and co-founder Mike Del Balso explained.
They do this by providing the concept of a feature store, an idea they came up with and which is becoming a machine learning category unto itself. Just last week, AWS announced the Sagemaker Feature store, which the company saw as major validation of their idea.
As Tecton defines it, a feature store is an end-to-end machine learning management system that includes the pipelines to transform the data into what are called feature values, then it stores and manages all of that feature data and finally it serves a consistent set of data.
Del Balso says this works hand-in-hand with the other layers of a machine learning stack. “When you build a machine learning application, you use a machine learning stack that could include a model training system, maybe a model serving system or an MLOps kind of layer that does all the model management, and then you have a feature management layer, a feature store which is us — and so we’re an end-to-end life cycle for the data pipelines,” he said.
With so much money behind the company it is growing fast, going from 17 employees to 26 since we spoke in April, with plans to more than double that number by the end of next year. Del Balso says he and his co-founders are committed to building a diverse and inclusive company, but he acknowledges it’s not easy to do.
“It’s actually something that we have a primary recruiting initiative on. It’s very hard, and it takes a lot of effort, it’s not something that you can just make like a second priority and not take it seriously,” he said. To that end, the company has sponsored and attended diversity hiring conferences and has focused its recruiting efforts on finding a diverse set of candidates, he said.
Unlike a lot of startups we’ve spoken to, Del Balso wants to return to an office setup as soon as it is feasible to do so, seeing it as a way to build more personal connections between employees.
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When one of AWS’s east coast data centers went down at the end of last month, it had an impact on countless companies relying on its services, including Roku, Adobe and Shipt. When the incident was resolved, the company had to analyze what happened. For most companies, that involves manually pulling together information from various internal tools, not a focused incident platform.
Jeli.io wants to change that by providing one central place for incident analysis, and today the company announced a $4 million seed round led by Boldstart Ventures with participation by Harrison Metal and Heavybit.
Jeli CEO and founder Nora Jones knows a thing or two about incident analysis. She helped build the chaos engineering tools at Netflix, and later headed chaos engineering at Slack. While chaos engineering helps simulate possible incidents by stress-testing systems, incidents still happen, of course. She knew that there was a lot to learn from them, but there wasn’t a way to pull together all of the data around an incident automatically. She created Jeli to do that.
“While I was at Netflix pre-pandemic, I discovered the secret that looking at incidents when they happen — like when Netflix goes down, when Slack goes down or when any other organization goes down — that’s actually a catalyst for understanding the delta between how you think your org works and how your org actually works,” Jones told me.
She began to see that there would be great value in trying to figure out the decision-making processes, the people and tools involved and what companies could learn from how they reacted in these highly stressful situations, how they resolved them and what they could do to prevent similar outages from happening again in the future. With no products to help, Jones began building tooling herself at her previous jobs, but she believed there needed to be a broader solution.
“We started Jeli and began building tooling to help engineers by [serving] the insights to help them know where to look after incidents,” she said. They do this by pulling together all of the data from emails, Slack channels, PagerDuty, Zoom recordings, logs and so forth that captured information about the incident, surfacing insights to help understand what happened without having to manually pull all of this information together.
The startup currently has eight employees, with plans to add people across the board in 2021. As she does this, she is cognizant of the importance of building a diverse workforce. “I am extremely committed to diversity and inclusion. It is something that’s been important and a requirement for me from day one. I’ve been in situations in organizations before where I was the only one represented, and I know how that feels. I want to make sure I’m including that from day one because ultimately it leads to a better product,” she said.
The product is currently in private beta, and the company is working with early customers to refine the platform. The plan is to continue to invite companies in the coming months, then open that up more widely some time next year.
Eliot Durbin, general partner at Boldstart Ventures, says that he began talking to Jones a couple of years ago when she was at Netflix just to learn about this space, and when she was ready to start a company, his firm jumped at the chance to write an early check, even while the startup was pre-revenue.
“When we met Nora we realized that she’s on a lifelong mission to make things much more resilient […]. And we had the benefit of getting to know her for years before she started the company, so it was really a natural continuation to a conversation that we were already in,” Durbin explained.
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If this year has taught us a lesson about the world of work, it’s that collectively, we weren’t very well-equipped in terms of the technology we use to translate the in-person experience seamlessly to a remote version. That’s led to a rush of companies launching new services to fill that hole — cloud computing and data warehousing startups, collaboration platforms, sales tools and more — and today one of the latest startups in the area of videoconferencing is announcing a round of funding to see its business scale to the next level.
Wonder, a Berlin startup that has built a platform for people to come together in video-based groups to meet up, network and collaborate, while also having a bird’s-eye view of a larger space where they can more serendipitously, or more intentionally, interact with others — not unlike in an office or other business venue — is today announcing that it has raised $11 million (€9 million) in a substantial seed round.
The funding was led by European VC EQT Ventures, with BlueYard Capital — which led a pre-seed round in the startup when it was previously called “YoTribe” — also participating.
It comes on the heels of the young startup seeing some impressive traction this year.
Wonder now has 200,000 monthly users from a pretty diverse set of organizations, including NASA, Deloitte, Harvard and SAP, which are using it for a variety of purposes, from team collaboration through to career fairs. The company will use the funding both to add in more features as requested by current users, as well as to hire more people for its team, co-founder Stephane Roux said in an interview. Those features will include sharing files and other technical services, but they will not be piled on quickly or thickly.
“We think of this less in terms of content and more about people,” he said. “The core experience is about live interaction, not just repositories of stuff. We want to build a place for collaboration and communication. Interesting ways to carve up a group virtually.”
Now, you may be thinking: another workplace video app? Hasn’t this $14 billion space race already been “won” by Zoom (which some of us now use as a verb for videoconferencing, regardless of which app we actually use)? Or Microsoft or Google or BlueJeans, or whatever it is that your organization has inevitably already signed up and paid for?
But it turns out that for all the growth and use that these other platforms have had, they are sorely lacking in their overall experience, as it pertains to what it’s like to be in physical spaces with other people. One of the key points, it turns out, is that a lot of solutions are not really built with the user experience of the larger group in mind.
Wonder is built around the idea of a “shared space” that you enter. That space comes not from a VR experience as you might expect, but something much simpler that takes a tip from more rudimentary but very effective older game dynamics. You get a single window where you can “see” from an aerial view, as it were, all of the other people who are in the same space, and the areas within that space where they might cluster together.
Those clusters could be designed around a specific interest (such as marketing or HR or product) or — if the product is being used at a career fair, for example, at a list of different companies taking part; or — at a conference — different conference sessions, plus an exhibition space.
You can move around all of the clusters, or start your own, or sit in the margins with another person, and when you do come together with one or more people, you can join them in a video chat to interact. In the future, the plan is to do more than just join a video chat; you might also be able to access documents related to that cluster, and more.
The clusters can be “public” for anyone to join, or set to private, as you might have in a physical meeting room. The overall effect is that, without actually being in a physical space, you get the sense of a collective group of people in motion.
The startup was originally the brainchild of Leonard Witteler, who built a version of this last year as a coding project at university before showing it to friends and family and getting positive feedback.
As another co-founder, Pascal Steck, describes it, he, Witteler and Roux, who all knew each other, had been looking to build a startup together, but around a completely different idea — a portal for photographers and other creatives in the wedding industry.
Given how drastically curtailed weddings and other group gatherings have been this year, that didn’t really go anywhere at all. But the three could see an opportunity, a very different one, with the software that Witteler had built while still a student. So in the grand tradition of startups, they pivoted.
Wonder had previously been called YoTribe, which sounds a little like YouTube and also plays on the idea of groups of friends who come together around special interests.
And from how Steck and Roux described it to me in an interview (over Wonder of course), it didn’t sound like the initial idea was to target enterprises at all, but people who found themselves a bit at a loss when music festivals and other events like that suddenly died a death because of COVID-19.
Indeed, they themselves were all too aware of the state of the market for videoconferencing apps: it was very, very crowded.
“The space is very busy and some great products are already out there. But as soon as you zoom into this space” — no pun intended, Steck said — “when it’s about large group meetings, these other tools do not allow for serendipitous conversations or bottom-up gatherings, and the list gets very thin very quickly. Our focus is around improving presentations, but in the case of large groups, there is just not a lot out there. Especially something building an association as we know it to how we do things in the offline world. We think we have a unique spot in the market.
“A meeting for three people can use Zoom or Teams perfectly. There is no need for anything else, but for larger groups, that is not the case and it seems like the market is really open for something like Wonder.”
The name “Wonder” is an interesting choice when the startup rebranded from YoTribe. Wonder’s main meaning is surprise and discovery, but it has long been thought and assumed that “wonder” is also connected to the word “wander”. (In fact, the two are not related etymologically, but have often crossed paths and wandered into each other’s territories over the centuries.) Similarly, the idea with Wonder the app is that you can “wander” around a room, and find who and what you are looking for in the process.
Wonder is not the only upstart video app that has picked up some attention in the last several months. In fact, there has been a wave of them launching or announcing funding (or both) in 2020 to try to address the gaps — or opportunities — that exist as a result of the features from the current leaders.
Other launches have included mmhmm (Phil Libin’s latest startup that adds lots of bells and whistles to make the presentations more than just a talking head); Headroom (founded by ex-Google and ex-Magic Leap entrepreneurs, using AI to get more meaningful insights from the video conversations); Vowel (which lets people search across video chats to follow up items and dig into what people said across different calls); and Descript, Andrew Mason’s audio effort, now also has video features.
But if anything, a lot of these newer tools fail to address the shortcomings of what it’s like being a part of a big group using a video app. In fact, many of these newer entrants highlight another set of challenges, those of the speaker, who is thus graced with better presentation tools in mmhmm, or given way better insights into the audience with Headroom, etc.
In any case, Wonder has found, serendipitously, a lot of traction from people who have identified and lamented the problems with so much else out there today. The app is still free to use, and the plan will be to keep it that way until some time in 2021, Roux said. Ironically, he pointed out that many of its current customers are asking to be charged, not least because it lends using it more credibility, which is important with IT departments and so on. All that might mean the charging plan gets pushed up sooner.
In any case, even if companies are also using something else, they are also adopting Wonder, and that has in turn piqued the interest of investors who are interested to see where it might go next.
“Throughout COVID-19, real-time video has become the default for both private and professional interactions, and hybrid working is here to stay,” said Jenny Dreier, investor at EQT Ventures Berlin, in a statement. “No other video tools come anywhere near as close to replicating real-life interactions as Wonder, so the product has explosive potential, already foreshadowed with the platform’s stellar organic growth. It’s incredibly exciting to be working with the team and to be part of the journey; I can’t wait to be a part of their next chapter.”
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Funding-round stories are TechCrunch’s bread and butter.
For early-stage companies, the fact that an investor has put thousands, millions (or billions) into an idea that will likely fail, and might never make money, is big news. That’s a story that we can tell every day.
From time to time, a debate pops up about the role of funding-round stories: Are financings the right metric to focus on? Should the trend be scratched and reinvented? After all, raising money is not indicative of making money. Let’s be real: news needs news to be published. There needs to be a tension, or a surprise, but most of all, a reason for the reader to keep reading.
It’s a healthy conversation, and one the Equity crew decided to discuss last Friday:
It’s easy to mock funding-round coverage: There are far more rounds than hands to write them, so the coverage is inherently partial; they are a poor milestone to use as a benchmark for growth; and coverage of the startup in question nearly always has an overly positive tilt, given that the piece in question centers around something that is a win for the company.
Yet, I still think they are worth writing and try to get to a few each week.
There are good reasons for doing so that run counter to the obvious complaints. Sure, there are more rounds than we could ever cover, but in theory we’re filtering as best we can for the most interesting, the furthest outlying and the trend-elucidating rounds that we can use as a light to better illuminate how the broader startup and technology worlds are changing.
I think TechCrunch does a reasonable job of picking the right companies to cover and we spend a good amount of time aggregating discrete funding events into trends. It’s super-hard work, as covering a single round is time-consuming and ultimately not incredibly well-read.
And yes, funding rounds are not really milestones to celebrate. The startup isn’t suddenly destined to win. Capital just means that the venture class has increased its wager on the startup generating more wealth for themselves and their backers, whom are largely already rich.
But trying to lever any information from private companies is an exercise in sadistic dentistry, and startups tend to open up the most around funding rounds. So, if you want to chat with a CEO on the record for half an hour, the next time their startup raises is probably your best chance.
And there is signal in a venture round. Someone felt strongly enough about the company’s prospects to inject it with more capital, making a funding event a reasonable signal that something is going on at the company.
Then there’s the issue of positive bias. All publications have a bias. TechCrunch has many biases, the most important and salutary of which is that we think that startups are cool. We do! Quickly-growing, private companies are inherently interesting and I came back to this publication in part so that I could keep writing about them. I am never bored.
So, yes, funding-round coverage tends to be a bit more on the positive side of balanced than I would like, but I balance that by becoming increasingly orthodox as a startup scales. When a young company raises its first few million, the chat with the CEO is her telling me about her small team, first customers and fitful progress.
By the time she raises a $50 million Series C, we’re talking gross margin expansion, YoY ARR growth and diversity metrics. Before she takes her unicorn public, I’m asking pressing questions about GAAP results, the public markets and what sort of external offers are coming in for the whole concern.
Being slightly optimistic about startups when they’re young is, then, tempered by increasing scrutiny as the company grows. That seems like a fair balance for the company and our readers.
So I won’t stop covering funding rounds. Even if I didn’t have this job I probably still would for my personal blog. I always learn something from high-growth companies; they have a window into the market that is dynamic and far from ossified. And early-stage founders tend to not be overly media-trained, so they are still interesting.
And sometimes something you write winds up changing the direction of a startup. That’s always a very weird and disconcerting feeling. But as this impact is nearly always good for the company in question, you’ve only accidentally made the lives of others a bit better for a short while. It’s not so harsh a sentence.
Covering startups is one of the hardest news beats out there (trust me, I’m unbiased — I cover startups for a living).
If you cover the Senate, you report regularly on 100 individuals, their staffs and interactions. If you cover banking, you watch a handful of banks since no one gives a flying rat’s tushy about the industry’s middle market. There’s generally a limited scope in political and general business reporting where you know the key players and the key newsmakers.
In startups, you cover … everything. There are a couple of hot sectors that everyone is talking about … and then there is every other sector that might be the next hot sector, but no one has ever heard of it. It’s probably not important. But it might just be. That startup you talked to this week sounds boring. Four years later, it sells for $20 billion. The startup world is constantly changing, and unless you blow up your whole worldview on a regular basis, you’ll never keep up.
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Did you follow all of the unicorn news from the last couple of weeks? No? Here’s a list of headlines to catch you up, because this holiday season is already featuring mega acquisitions, even more IPO filings, and a steady drumbeat of fundraises.
Somehow, after one of the toughest years in recent memory, the tech industry is heading into December with more enthusiasm than ever. (Still remember the WeWork IPO fiasco from last year? No?)
Salesforce buys Slack in a $27.7B megadeal
Everyone has an opinion on the $27.7B Slack acquisition
What to make of Stripe’s possible $100B valuation
How the pandemic drove the IPO wave we see today
A roundup of recent unicorn news
C3.ai’s initial IPO pricing guidance spotlights the public market’s tech appetite (EC)
Working to understand C3.ai’s growth story (EC)
Insurtech’s big year gets bigger as Metromile looks to go public (EC)
Wall Street needs to relax, as startups show remote work is here to stay (EC)
In first IPO price range, Airbnb’s valuation recovers to pre-pandemic levels (EC)
3 new $100M ARR club members and a call for the next generation of growth-stage startups (EC)

Connie Loizos sat down with Jason Green of leading enterprise-focused firm Emergence Capital to get his view of SPACs, and how they are likely to be used next year and beyond. But early-stage startups, don’t miss his affirmation of Zoom meetings as part of the fundraising process going forward.
I would say that over the last five years, we’ve made almost a total transition. Now we’re very much a data-driven, thesis-driven outbound firm, where we’re reaching out to entrepreneurs soon after they’ve started their companies or gotten seed financing. The last three investments that we made were all relationships that [date back] a year to 18 months before we started engaging in the actual financing process with them. I think that’s what’s required to build a relationship and the conviction, because financings are happening so fast.
I think we’re going to actually do more investments this year than we maybe have ever done in the history of the firm, which is amazing to me [considering] COVID. I think we’ve really honed our ability to build this pipeline and have conviction, and then in this market environment, Zoom is actually helping expand the landscape that we’re willing to invest in. We’re probably seeing 50% to 100% more companies and trying to whittle them down over time and really focus on the 20 to 25 that we want to dig deep on as a team.
Thousands of startup founders will resume the trek around Silicon Valley VC offices, once the vaccines arrive. But we’ll remember 2020 as the year that venture truly joined the cloud.
Image Credits: Brighteye Ventures
Every level of education was forced online by the pandemic this year, at least temporarily. While the children might be back in the classroom already, higher education and corporate education are still booming remotely. Natasha Mascarenhas analyzed the latest market changes for Extra Crunch, and put together a panel of industry leaders for a special Thanksgiving edition of Equity. Here’s more about what you’ll find on the show:
For this Equity Dive, we zero onto one part of that conversation: Edtech’s impact on higher education. We brought together Udacity co-founder and Kitty Hawk CEO Sebastian Thrun, Eschaton founder and college dropout Ian Dilick, and Cowboy Ventures investor Jomayra Herrera to answer our biggest questions.
Here’s what we got into:
- How the state of remote school is leading to gap years among students.
- A framework for how to think of higher education’s main three products (including which is most defensible over time).
- What learnings we can take from this COVID-19 experiment on remote schooling to apply to the future.
- Why edtech is flocking to the notion of life-long learning.
- The reality of who self-paced learning serves — and who it leaves out.

SaaS is continuing to be reshaped by consumer internet techniques, with top companies of our era competing through word-of-mouth growth versus incumbent sales forces. The revenue model must be precise for this to scale, though. In a guest post for Extra Crunch, Caryn Marooney and David Cahn of Coatue lay out a strategic framework for how to price your bottoms-up SaaS product the right way for the market. Called “MAP,” for Metrics, Activity and People, it helps you sort your product against the actual ways that people are trying to use and pay for it. Here’s how they describe the A:
Activity: How do your customers really use your product and how do they describe themselves? Are they creators? Are they editors? Do different customers use your product differently? Instead of metrics, a key anchor for pricing may be the different roles users have within an organization and what they want and need in your product. If you choose to anchor on activity, you will need to align feature sets and capabilities with usage patterns (e.g., creators get access to deeper tooling than viewers, or admins get high privileges versus line-level users). For example:
- Figma — Editors versus viewers: Free to view, starts changing after two edits.
- Monday — Creators versus viewers: Free to view, creators are charged $10-$20/month.
- Smartsheet — Creators versus viewers: Free to view, creators are charged $10+/month.
Extra Crunch membership now available to readers in Israel
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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.
We’re back with not an Equity Shot or Dive of Monday, this is just the regular show! So, we got back to our roots by looking at a huge number of early-stage rounds. And a few other things that we were just too excited about to not mention.
So from Chris and Danny and Natasha and I, here’s the rundown:
That was a lot, but how could we leave any of it out? We’re back Monday with more!
Equity drops every Monday at 7:00 a.m. PDT 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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Zephr has raised $8 million in a new funding round led by Bertelsmann Digital Media Investments (owned by media giant Bertelsmann).
The London-headquarted startup’s customers already include publishers like McClatchy, News Corp Australia, Dennis Publishing and PEI Media. CEO James Henderson told me via email that rather than creating “a monolithic product that tries to do a bit of everything,” Zephr is “focused entirely on the experience and journey for the prospect or customer,” driving an average 150% increase in conversion rates and 25% increase in subscription revenue within the first six months.
Henderson added, “By offering the right product, package or message at the right time to the right person, Zephr improves conversion rates, drastically decreases churn and drives new, stable revenue.”
To do this, Zephr largely relies on the publisher’s first-party data about its readers — Henderson said that this data is “by far the most important and powerful type of data that Zephr both uses and generates.” But it also takes advantage of contextual data, such as “time of day, to location, device or consumption patterns.”
He also noted that Zephr is a no-code tool, allowing non-technical members of the marketing, revenue and product teams to use a drag-and-drop editor to create different customer journeys.
Image Credits: Zephr
Asked how the pandemic has affected the startup’s business, Henderson said there were both “positive and negative indicators,” with newsrooms seeing record readership but in some cases also freezing spending.
“As firms prepare for a ‘post-pandemic’ world, we are beginning to see our markets seize the opportunity of all these new potential subscribers and invest in subscription models — and in Zephr.” he said. “In publishing and news media, the old model of dominant advertising revenue is on the way out and we are well-placed to capitalize on that interest.”
The new funding also includes financing from Silicon Valley Bank UK Branch and brings Zephr’s total funding to $11 million. Previous investors include Knight Capital and Nauta Capital.
According to the company’s funding announcement, this money will go toward further product development (with a focus on increased personalization), as well as expansion across the United States, Europe and Asia.
“The recent weakness in the advertising market increased pressure for media companies to diversify revenue streams and aim to introduce or optimize subscription models,” said BDMI Managing Director Urs Cete in a statement. “We recognise Zephr’s excellent technology that empowers publishers to galvanise the online subscription opportunity and create customer journeys that are truly unique.”
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Fintech startup Revolut is launching its own acquiring solution. With this move, the company is competing directly with Stripe, Adyen, Braintree or Checkout.com. This is an in-house product and not just a fresh coat of paint on an existing solution.
As a reminder, Revolut already offers business accounts. It lets you send and receive international payments, and exchange funds in multiple currencies. You also can order debit cards to spend money from your Revolut account directly.
With Revolut’s acquiring solution, the company is going one step further, as you can now accept card payments from your customers. Revolut supports 14 currencies and settles payments on your Revolut Business account the next day.
When it comes to fees, you get a small allowance of free card payment processing fees depending on your plan. Above that limit, you pay 1.3% on card transactions from customers based in Europe and the U.K. For other cards, you pay 2.8% on all transactions — there’s no free allowance.
This is slightly cheaper than Stripe, which costs 1.4% + £0.20 for European cards and 2.9% + £0.20 for non-European cards. Of course, companies like Stripe have been optimizing their payments infrastructure for many years. Right now, Stripe supports more payment methods, more currencies, advanced fraud prevention features, etc.
After you’ve created your merchant account, Revolut offers plugins for WooCommerce, Prestashop and Magento. You can also use the Merchant API to add a checkout widget on your custom website.
If you’re a freelancer and you just need to send a couple of invoices per month, you can also generate payment links. The recipient can then pay from a web page hosted by Revolut.
The main advantage of Revolut’s acquiring solution is that it’s integrated with Revolut Business. You can see payments and banking in the same interface, you don’t need to alternate between your Stripe account and your bank account to reconcile transaction data.
It could work particularly well for B2B businesses that don’t handle a ton of transactions and don’t want to set up a separate payments solution. Let’s see what customers think of the API when they start using it.
Online payments are available for business customers in the U.K., Austria, Belgium, Denmark, France, Germany, Ireland, Italy, Netherlands, Poland, Portugal, Spain and Sweden. The rest of the European Economic Area should get the feature soon.
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Many companies will not see the uncertainty of a global pandemic as the perfect moment to go international, but for others (particularly in healthcare, online communications, and workplace mobility) the market is stronger than ever and companies are having to respond quickly internationally to both service existing clients and take advantage of the growth in demand.
We and our team at Taylor Wessing advise 50 to 75 venture-backed North American companies each year on setting up in Europe or Asia. We’ve helped companies such as TaskRabbit, Lime, Glossier, InVision and many others translate their domestic success to new jurisdictions and cultures and to thrive as global businesses.
This is a practical guide to international expansion with the challenges of the current time in mind. It’s a quick-read providing some practical tips and sharing best practices from peer companies to help you come out of the pandemic with a strong international presence. A great deal of this advice is evergreen and will serve you well whatever the circumstances may be.
In particular, we’ll cover the rise (and risks) of distributed workforces — a way for CEOs to hire the best talent anywhere in the world. This has taken on new significance with the boom in remote working as one of several options for CEOs looking for strategic growth during and after COVID.
Ten years ago, the timing question was much simpler. Founders would first of all focus on developing a product and winning over their domestic market, funded through their Series A and B rounds, and then go on to raise their Series C round, which investors would expect to be used to push into new markets.
Since then, with the age of the smartphone in full swing and international direct ordering ubiquitous, opportunities to sell into new markets appeared far earlier in a company’s growth and there is no longer a canned strategy for timing your international expansion.
The current circumstances have exaggerated this trend. There are many challenges in traditional sectors, but also many new market opportunities quickly appearing in healthcare and other technology sectors with founders wanting to move quickly into new markets.
Although it may be tempting to just get a few sales people on the ground to go for it, we would still recommend laying some groundwork and making some key decisions before diving in. For example: ensuring management can give sufficient time and attention to the new market; tweaking your product to comply with local regulations; reworking your sales approach.
If you are early-stage, tread carefully. Our belief is that the Series B round is still the earliest a founder or board should consider international expansion.
If you are early-stage, tread carefully. Our belief is that the Series B round is still the earliest a founder or board should consider international expansion. The companies we’ve worked with who have moved earlier than the B round will generally end up realizing it’s too early. They’ll end up pressing pause, or making a full strategic exit, tail between legs.
International expansion is a matter of focus, as well as financial resources. Once you’re selling into a new market, everyone in the business needs to be thinking internationally, including the CEO, CFO, general counsel, the board, engineers and staff. It can stretch everyone before there are the necessary resources in place to cope.
Even in the best of times our advice would be to not experiment or push the boundaries when it comes to your international strategy, do that elsewhere in your business. You should follow the path most travelled at this stage. This is especially true in the current climate. If you’re thinking of doing something new, something your peers haven’t done before, we should have a conversation first.
Whichever market you’ve chosen, there are some universal first steps (although they might vary slightly between jurisdictions). For example:
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