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CloudBolt announces $35M Series B debt/equity investment to help manage hybrid cloud
CloudBolt, a Bethesda, Maryland startup that helps companies manage hybrid cloud environments, announced a $35 million Series B investment today. It was split between $15 million in equity investment and $20 million in debt.
Insight Partners provided the equity side of the equation, while Hercules Capital and Bridge Bank supplied the venture debt. The company has now raised more than $61 million in equity and debt, according to Crunchbase data.
CEO Jeff Kukowski says that his company helps customers with cloud and DevOps management including cost control, compliance and security. “We help [our customers] take advantage of the fact that most organizations are already hybrid cloud, multi cloud and/or multi tool. So you have all of this innovation happening in the world, and we make it easier for them to take advantage of it,” he said.
As he sees it, the move to cloud and DevOps, which was supposed to simplify everything, has actually created new complexity, and the tools his company sells are designed to help companies reduce some of that added complexity. What they do is provide a way to automate, secure and optimize their workloads, regardless of the tools or approach to infrastructure they are using.
The company closed the funding round at the end of last quarter and put it to work with a couple of acquisitions — Kumolus and SovLabs — to help accelerate and fill in the road map. Kumolus, which was founded in 2011 and raised $1.7 million, according to Crunchbase, really helps CloudBolt extend its vision from managing on premises to the public cloud.
SovLabs was an early-stage startup working on a very specific problem creating a framework for extending VMware automation.
CloudBolt currently has 170 employees. While Kukowski didn’t want to get specific about the number of additional employees he might be adding to that in the next 12 months, he says that as he does, he thinks about diversity in three ways.
“One is just pure education. So we as a company regularly meet and educate on issues around inclusion, social justice and diversity. We also recruit with those ideas in mind. And then we also have a standing committee within the company that continues to look at issues not only for discussion, but quite frankly for investment in terms of time and fundraising,” he said.
Kukowski says that going remote because of COVID has allowed the company to hire from anywhere, but he still looks forward to a time when he can meet face-to-face with his employees and customers, and sees that as always being part of his company’s culture.
CloudBolt was founded in 2012 and has around 200 customers. Kukowski says that the company is growing between 40% and 50% year over year, although he wouldn’t share specific revenue numbers.
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AI-tool maker Seldon raises £7.1M Series A from AlbionVC and Cambridge Innovation Capital
Seldon is a U.K. startup that specializes in the rarified world of development tools to optimize machine learning. What does this mean? Well, dear reader, it means that the “AI” that companies are so fond of trumpeting does actually end up working.
It has now raised a £7.1 million Series A round co-led by AlbionVC and Cambridge Innovation Capital . The round also includes significant participation from existing investors Amadeus Capital Partners and Global Brain, with follow-on investment from other existing shareholders. The £7.1 million funding will be used to accelerate R&D and drive commercial expansion, take Seldon Deploy — a new enterprise solution — to market and double the size of the team over the next 18 months.
More accurately, Seldon is a cloud-agnostic machine learning (ML) deployment specialist which works in partnership with industry leaders such as Google, Red Hat, IBM and Amazon Web Services.
Key to its success is that its open-source project Seldon Core has more than 700,000 models deployed to date, drastically reducing friction for users deploying ML models. The startup says its customers are getting productivity gains of as much as 92% as a result of utilizing Seldon’s product portfolio.
Alex Housley, CEO and founder of Seldon speaking to TechCrunch explained that companies are using machine learning across thousands of use cases today, “but the model actually only generates real value when it’s actually running inside a real-world application.”
“So what we’ve seen emerge over these last few years are companies that specialize in specific parts of the machine learning pipeline, such as training version control features. And in our case we’re focusing on deployment. So what this means is that organizations can now build a fully bespoke AI platform that suits their needs, so they can gain a competitive advantage,” he said.
In addition, he said Seldon’s open-source model means that companies are not locked-in: “They want to avoid locking as well they want to use tools from various different vendors. So this kind of intersection between machine learning, DevOps and cloud-native tooling is really accelerating a lot of innovation across enterprise and also within startups and growth-stage companies.”
Nadine Torbey, an investor at AlbionVC, added: “Seldon is at the forefront of the next wave of tech innovation, and the leadership team are true visionaries. Seldon has been able to build an impressive open-source community and add immediate productivity value to some of the world’s leading companies.”
Vin Lingathoti, partner at Cambridge Innovation Capital, said: “Machine learning has rapidly shifted from a nice-to-have to a must-have for enterprises across all industries. Seldon’s open-source platform operationalizes ML model development and accelerates the time-to-market by eliminating the pain points involved in developing, deploying and monitoring machine learning models at scale.”
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Biden’s infrastructure plans could boost startups
As President-elect Joe Biden readies his transition team and sets the agenda for his first 100 days in office, startups can expect to see some movement on long-stalled infrastructure initiatives that could mean big boosts to their business.
Infrastructure is high on the list of priorities of the incoming Biden Administration as the former vice president hopes to make good on his campaign promise to “build back better.”
American infrastructure has been crumbling for decades without significant investment from the federal government, and much of what will be replaced will also be upgraded with new technology, according to people familiar with the Biden plan.
That means tech companies focused on next-generation telecommunications and utility infrastructure, transportation, housing and construction tech around energy efficiency could see new dollars pour in over the next four years.
“Infrastructure and build out of the clean energy economy … doesn’t necessarily mean large wind or large solar projects. It could mean advanced metering … it can be new engine technologies,” said Dan Goldman, a managing partner at Clean Energy Ventures. “We think that that can be a huge opportunity for job creation … not only putting people back to work but putting people back to work in high quality jobs.”
And there’s a willingness to encourage these infrastructure projects in less partisan ways in states like Massachusetts, Virginia and Florida, which are actively building out electric vehicle infrastructure and renewable energy projects, Goldman said.
While the federal government will ultimately be distributing the cash, startups can expect to see the spending actually come from municipalities and state governments, which often have a better understanding of local needs and where the money should go.
Next-generation energy infrastructure
The electrification of everything — a component of any zero-carbon movement — requires significant upgrades to existing power infrastructure. That means everything from systems management technologies to distribution facilities to ways to store power that can be moved on to the grid.
“Without that infrastructure investment it gets quite challenging,” said Abe Yokell, a co-founder and managing partner of Congruent Ventures.
He pointed to large-scale energy storage technologies as one solution, but management systems for utilities will be another area of interest.
Those infrastructure initiatives will likely mean good things for battery companies like Form Energy, which signed its first major contract with Great River Energy earlier this year; or Antora and Malta, which store energy as heat; or Quidnet, which has a pumped hydroelectric play for large-scale energy storage by pumping water into the gaps between rocks underground that creates pressure and can force water back up through a generator.
Other large-scale energy storage companies working on developing and installing batteries could benefit as well. That means good things for Tesla, which has a few major battery installs under its belt, and Fluence, which manages and operates big install projects.
Natel Energy, another startup working on energy storage (and generation) using hydropower, could also find its technology in the mix, according to company founder, Gia Schneider.
Schneider sees three potential pitches for her company’s technologies. “Climate change is water change,” she said. “We have a bucket in energy, a bucket of stuff in environmental and a bucket of stuff in working lands.”
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Marketing automation platform Klaviyo scores $200M Series C on $4.15B valuation
Boston-based marketing automation firm Klaviyo wants to change the way marketers interact with data, giving them direct access to their data and their customers. It believes that makes it easier to customize the messages and produce better results. Investors apparently agree, awarding the company a $200 million Series C on a hefty $4.15 billion valuation today.
The round was led by Accel, with help from Summit Partners. It comes on the heels of last year’s $150 million Series B, and brings the total raised to $385.5 million, according the company. Accel’s Ping Li will also be joining the company board under the terms of today’s announcement.
Marketing automation and communication takes on a special significance as we find ourselves in the midst of this pandemic and companies need to find ways to communicate in meaningful ways with customers who can’t come into brick and mortar establishments. Company CEO and co-founder Andrew Bialecki says that his company’s unique use of data helps in this regard.
“I think our success is because we are a hybrid customer data and marketing platform. We think about what it takes to create these owned experiences. They’re very contextual and you need all of that customer data, not some of it, all of it, and you need that to be tightly coupled with how you’re building customer experiences,” Bialecki explained.
Andrew Bialecki, CEO and co-founder at Klaviyo Image Credits: Klaviyo
He believes that by providing a platform of this scope that combines the data, the ability to customize messages and the use of machine learning to keep improving that, it will help them compete with the largest platforms. In fact his goal is to help companies understand that they don’t have to give up their customer data to Amazon, Google and Facebook.
“The flip side of that is growing through Amazon where you give up all your customer data, or Facebook or Google where you kind of are delegated to wherever their algorithms decide where you get to show up,” he said. With Klaviyo, the company retains its own data, and Ping Li, who is leading the investment at Accel, says that it where the e-commerce market is going.
“So the question is, is there a tool that allows you to do that as easily as going on Facebook and Google, and I think that’s the vision and the promise that Klaviyo is delivering on,” Li said. He believes that this will allow their customers to actually build that kind of fidelity with their customers by going directly to them, instead of through a third-party intermediary.
The company has seen some significant success, with 50,000 customers in 125 countries along with that lofty valuation. The customer number has doubled year over year, even during the economic malaise brought on by the pandemic.
Today, the company has 500 employees with plans to double that in the next year. As he grows his company, Bialecki believes diversity is not just the right thing to do, it’s also smart business. “I think the competitive advantages that tech companies are going to have going forward, especially for the tech companies that are not the leaders today, but [could be] leaders in the coming decades, it’s because they have the most diverse teams and inclusive culture and those are both big focuses for us,” he said.
As they move forward flush with this cash, the company wants to continue to build out the platform, giving customers access to a set of tools that allow them to know their own customers on an increasingly granular level, while delivering more meaningful interactions. “It’s all about accelerating product development and getting into new markets,” Bialecki said. They certainly have plenty of runway to do that now.
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Cato Network snags $130M Series E on $1B valuation as cloud wide area networking thrives
Cato Networks has spent the last five years building a cloud-based wide area network that lets individuals connect to network resources regardless of where they are. When the pandemic hit, and many businesses shifted to work from home, it was the perfect moment for technology like this. Today, the company was rewarded with a $130 million Series E investment on $1 billion valuation.
Lightspeed Venture Partners led the round, with participation from new investor Coatue and existing investors Greylock, Aspect Ventures/Acrew Capital, Singtel Innov8 and Shlomo Kramer (who is the co-founder and CEO of the company). The company reports it has now raised $332 million since inception.
Kramer is a serial entrepreneur. He co-founded Check Point Software, which went public in 1996, and Imperva, which went public in 2011 and was later acquired by private equity firm Thoma Bravo in 2018. He helped launch Cato in 2015. “In 2015, we identified that the wide area networks (WANs), which is a tens of billions of dollars market, was still built on the same technology stack […] that connects physical locations, and appliances that protect physical locations and was primarily sold by the telcos and MSPs for many years,” Kramer explained.
The idea with Cato was to take that technology and redesign it for a mobile and cloud world, not one that was built for the previous generation of software that lived in private data centers and was mostly accessed from an office. Today they have a cloud-based network of 60 Points of Presence (PoPs) around the world, giving customers access to networking resources and network security no matter where they happen to be.
The bet they made was a good one because the world has changed, and that became even more pronounced this year when COVID hit and forced many people to work from home. Now suddenly having the ability to sign in from anywhere became more important than ever, and they have been doing well, with 2x growth in ARR this year (although he wouldn’t share specific revenue numbers).
As a company getting Series E funding, Kramer doesn’t shy away from the idea of eventually going public, especially since he’s done it twice before, but neither is he ready to commit any time table. For now, he says the company is growing rapidly, with almost 700 customers — and that’s why it decided to take such a large capital influx right now.
Cato currently has 270 employees, with plans to grow to 400 by the end of next year. He says that Cato is a global company with headquarters in Israel, where diversity involves religion, but he is trying to build a diverse and inclusive culture regardless of the location.
“My feeling is that inclusion needs to happen in the earlier stages of the funnel. I’m personally involved in these efforts, at the educational sector level, and when students are ready to be recruited by startups, we are already competitive, and if you look at our employee base it’s very diverse,” Kramer said.
With the new funds, he plans to keep building the company and the product. “There’s a huge opportunity and we want to move as fast as possible. We are also going to make very big investments on the engineering side to take the solution and go to the next level,” he said.
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Cooper raises $2M to build a professional network centered on introductions
In a period of social distancing, making new professional connections feels harder than ever. So Amsterdam-based Cooper is building a network that’s all about making and receiving introductions.
“Everything that happens in the network is based on the foundation of introductions,” CEO Robert Gaal told me. “You should never get an unwanted message, and there’s no such thing as a connection request, because it’s not necessary if you have an introduction.”
The startup is launching internationally today and announcing that it has raised $2 million in seed funding.
Gaal (who co-founded the company with CTO Emiel van Liere) described Cooper as “a private professional network that’s not about how many connections do I have, it’s about bringing the people that you already trust into a circle.”
That’s in contrast with existing professional networking sites, which are most useful as “directories” of online résumés, and usually emphasize the quantity of connections, rather than the quality. (I’ll admit that on LinkedIn, I’m connected to a bunch of people I barely know.)
So Cooper tries to take the opposite approach, limiting users’ connections to people they really know. To do this, it can pull data from a user’s online calendar, and it also provides them with a personal invite code that they can share with their professional contacts.
Image Credits: Cooper
Users then post requests or opportunities, which are viewable by their connections and by friends of friends, who can offer to make useful introductions via email or in Cooper itself.
In fact, Gaal said that during the initial beta test, multiple people have successfully used Cooper to find new jobs — sometimes after pandemic-related layoffs, which they’re comfortable sharing with their inner circle but don’t want to broadcast to the world at large.
“There’s more discovery, more trust and you can reinvent other things on top of that — what the résumé is, what mentorship is — if you get trust right first,” he said.
Of course, simply sharing a calendar invite with someone doesn’t really mean you trust them or know them well. Cooper could eventually start looking at other measures that indicate your “connectivity” with someone, like how often you email with them, Gaal said — but the first step is simply recreating the professional circle in which you feel comfortable saying, “Oh, you’re looking for a job? My friend is hiring.”
Yes, those kinds of conversations are already happening offline, but he noted that most of us can only remember “a handful of people” at once. Cooper is making that “marketplace” much more visible and easy to track.
The startup doesn’t sell ads or user data. Instead, Gaal hopes to make money by charging membership fees for features like customizing your profile or promoting your request more broadly.
The startup’s seed funding was led by Comcast Ventures, with participation from LocalGlobe and 468 Capital.
“At a time when the ability to connect is limited, Cooper is building a professional network fostering meaningful and substantive connections,” said Daniel Gulati, founding partner at Forecast Fund and former managing director at Comcast Ventures, in a statement. “We are excited to support the team on their journey ahead.”
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PingCAP, the open-source developer behind TiDB, closes $270 million Series D
PingCAP, the open-source software developer best known for NewSQL database TiDB, has raised a $270 million Series D. TiDB handles hybrid transactional and analytical processing (HTAP), and is aimed at high-growth companies, including payment and e-commerce services, that need to handle increasingly large amounts of data.
The round’s lead investors were GGV Capital, Access Technology Ventures, Anatole Investment, Jeneration Capital and 5Y Capital (formerly known as Morningside Venture Capital). It also included participation from Coatue, Bertelsmann Asia Investment Fund, FutureX Capital, Kunlun Capital, Trustbridge Partners, and returning investors Matrix Partners China and Yunqi Partners.
The funding brings PingCAP’s total raised so far to $341.6 million. Its last round, a Series C of $50 million, was announced back in September 2018.
PingCAP says TiDB has been adopted by about 1,500 companies across the world. Some examples include Square; Japanese mobile payments company PayPay; e-commerce app Shopee; video-sharing platform Dailymotion; and ticketing platfrom BookMyShow. TiDB handles online transactional processing (OLTP) and online analytical processing (OLAP) in the same database, which PingCAP says results in faster real-time analytics than other distributed databases.
In June, PingCAP launched TiDB Cloud, which it describes as fully-managed “TiDB as a Service,” on Amazon Web Services and Google Cloud. The company plans to add more platforms, and part of the funding will be used to increase TiDB Cloud’s global user base.
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Equity Shot: Airbnb’s IPO is finally here
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
Today we have an Equity Shot for you about Airbnb’s S-1 filing, as it looks to go public before the year is out.
- First we get into Airbnb’s macro performance, which shows a stable-picture historical revenue growth. There are a ton of numbers to get to so get ready for a quick dive into net revenue, gross margins and losses.
- Then we discuss the dramatic drop in bookings, the promising comeback and if short-term travel is Airbnb’s future.
- There’s a weird quarter of profitability that you should all know about, and a heads-up on what to look for in Q4 numbers.
- Finally, we talk about the bullish and bearish case on Airbnb, which poetically filed the same day that Moderna announced a promising vaccine trial.
All that, and our trusty other host Danny Crichton was busy filing a post about the winners and losers of the Airbnb IPO. Ownership, you quiet, billionaire beast. There’s more coming from TechCrunch on the company’s IPO, and from the Equity crew on everything else we ferret out on Thursday. Stay tuned!
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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Airbnb files to go public
Airbnb filed to go public today, bringing the well-known unicorn one step closer to being a public company.
The financial results show a company on the rebound, but smaller than it was. Its more granular financial results also make clear how hard the pandemic was on the travel-reliant unicorn. Regarding Airbnb’s worth, investors will have to balance how they value recovery and recent profits over the company’s disrupted historical growth arc.
How did we get here?
The home-sharing startup had a tumultuous year, with the COVID-19 pandemic harming its business in the first and second quarters of the year, and Airbnb later recovering on the strength of more local bookings.
Its filing comes mere days after fellow unicorns DoorDash and C3.ai themselves filed to go public in what could be a rush to the public markets by richly valued startups.
Airbnb’s S-1 filing was expected to come last week, but was delayed due to purported election concerns, a concept that TechCrunch staff did not find entirely convincing.
We’ve scraped together quite a lot about Airbnb’s recent financial performance, but its S-1 is the real treasure trove. What follows is a dive into the company’s high-level numbers. From there, TechCrunch will dig into the company’s financial nuances and ownership stakes.
Airbnb’s financial performance
What we want to know is how the pandemic impacted Airbnb’s business; its year-to-date results, and what we can suss out from its quarterly trends.
Up top in Airbnb’s S-1 is a chart that shows monthly bookings on its platform. The implication is somewhat simple; namely that Airbnb knows what we want to know and wanted to share. Here are those numbers:
Image Credits: Airbnb S-1
As expected, Airbnb took a huge hit in March. But by May things were back to year-over-year growth, where they stayed.
Now, the company has seen precious little bookings growth since June — indeed it has seen bookings fall in the months since. And, worse, the company’s gross bookings after removing cancellations are down on a year-over-year basis. (Update: We misread this table at first, and have updated our notes on it.)
So, what does all of that look like in more traditional accounting figures? Here’s Airbnb’s reported income statement:
Image Credits: Airbnb S-1
As expected, Airbnb’s year has not been tremendous. Indeed, the company is on track to match its 2018 size, if we have our math correct.
What changed from the first three quarters of 2019 to the first three quarters of 2020? The biggest thing, apart from expected lower revenue costs — less revenue costs less — is the huge decline in sales and marketing spend at the company. Airbnb slashed S&M outlays from $1.18 billion in the first three quarters of 2019 to just $545.5 million in the same period of 2020.
So, where will Airbnb wind up in 2020 once it’s all done? We’ll need to peek at its quarterly results for that. Here they are:
Image Credits: Airbnb S-1
Airbnb’s growth continues in year-over-year terms right until the March 31, 2020 quarter, when it was effectively flat compared to Q1 2019. Or, the company would have grown sans COVID-19. In the June 30, 2020 quarter we see the real damage, with Airbnb’s revenue falling from $1.2 billion in the year-ago quarter to just $334.8 million. That’s a shocking decline.
But, looking ahead to Q3 2020 we see a large return to form. Yes, Airbnb’s third quarter was smaller than its Q3 2019, with $1.34 billion in top line instead of $1.65 billion in 2019, but the company effectively quadrupled from its preceding quarter. If the company manages another Q3 worth of revenue in Q4, it would be larger than it was in 2018 by a few hundred million.
Critically, Airbnb managed to swing from a number of unprofitable quarters to a profit in Q3, akin to its 2019 Q3 when it was also in the black. Of course, Airbnb’s $219.3 million in GAAP net income during the third quarter pales compared to its losses tallied earlier in the year. The company will not break even in 2020.
Airbnb also reported adjusted profit metrics. Its adjusted EBITDA results are based on the following definition:
Adjusted EBITDA is defined as net income or loss adjusted for (i) provision for income taxes; (ii) interest income, interest expense, and other income (expense), net; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) net changes to the reserves for lodging taxes for which we may be held jointly liable with hosts for collecting and remitting such taxes; and (vi) restructuring charges.
The decision to remove restructuring costs raised eyebrows, with Amy Cheetham, an investor at Costanoa Ventures, saying that “it feels like leaving out restructuring costs is a little aggressive?” We agree, as it gives the company too much flexibility to count the good in its results, like lower operating costs, while discounting what it took to get those results, like restructuring its business operations.
That’s having your cake and eating it as well and not counting the calories.
Still, who are we to withhold numbers from you? Here is the very adjusted EBITDA that Airbnb claims:
Image Credits: Airbnb S-1
The numbers are still not good even after ripping out so very any costs. Worse, perhaps is the company’s cash burn in the year. That deficit helps explain why Airbnb took on more capital when it did earlier this year.
It’s hard to put a firm grade on this S-1. It contains what we expected, but how investors weigh the company’s year-over-year revenue declines in Q3 2020 against its rapid comeback from Q2 2020 should help decide its eventual value. On the whole Airbnb has managed something incredibly impressive — bouncing back from so low a low.
But, now that it’s going public we can’t merely say “good job”; it wants to price itself well and trade strongly. So, all eyes on its first IPO range as that should tell us what investors just might be willing to pay for the famous company’s equity.
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Ride Vision raises $7M for its AI-based motorcycle safety system
Ride Vision, an Israeli startup that is building an AI-driven safety system to prevent motorcycle collisions, today announced that it has raised a $7 million Series A round led by crowdsourcing platform OurCrowd. YL Ventures, which typically specializes in cybersecurity startups but also led the company’s $2.5 million seed round in 2018, Mobilion VC and motorcycle mirror manufacturer Metagal also participated in this round. The company has now raised a total of $10 million.
In addition to this new funding round, Ride Vision also today announced a new partnership with automotive parts manufacturer Continental .
“As motorcycle enthusiasts, we at Ride Vision are excited at the prospect of our international launch and our partnership with Continental,” Uri Lavi, CEO and co-founder of Ride Vision, said in today’s announcement. “This moment is a major milestone, as we stride toward our dream of empowering bikers to feel truly safe while they enjoy the ride.”
The general idea here is pretty straightforward and comparable with the blind-spot monitoring system in your car. Using computer vision, Ride Vision’s system, the Ride Vision 1, analyzes the traffic around a rider in real time. It provides forward collision alerts and monitors your blind spot, but it can also tell you when you’re following another rider or car too closely. It can also simply record your ride and, coming soon, it’ll be able to make emergency calls on your behalf when things go awry.
As the company argues, the number of motorcycles (and other motorized two-wheeled vehicles) has only increased during the pandemic, as people started avoiding public transport and looked for relatively affordable alternatives. In Europe, sales of two-wheeled vehicles increased by 30% during the pandemic.
The hardware on the motorcycle itself is pretty straightforward. It includes two wide-angle cameras (one each at the front and rear), as well as alert indicators on the mirrors, as well as the main computing unit. Ride Vision has patents on its human-machine warning interface and vision algorithms.
It’s worth noting that there are some blind-spot monitoring solutions for motorcycles on the market already, including those from Innovv and Senzar. Honda also has patents on similar technologies. These do not provide the kind of 360-degree view that Ride Vision is aiming for.
Ride Vision says its products will be available in Italy, Germany, Austria, Spain, France, Greece, Israel and the U.K. in early 2021, with the U.S., Brazil, Canada, Australia, Japan, India, China and others following later.
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