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Fishtown Analytics raises $29.5M Series B for its data engineering platform
Fishtown Analytics, the Philadelphia-based company behind the dbt open-source data engineering tool, today announced that it has raised a $29.5 million Series B round led by Sequoia Capital, with participation from previous investors Andreessen Horowitz and Amplify Partners.
The company is building a platform that allows data analysts to more easily create and disseminate organizational knowledge. Its focus is on data modeling, with its dbt tool allowing anybody who knows SQL to build data transformation workflows. Dbt also features support for automatically testing data quality and documenting changes, but maybe most importantly it uses standard software engineering techniques to help engineers collaborate on code and integrate changes continuously.
If this all sounds a bit familiar, it’s probably because you saw that Fishtown Analytics also announced a $12.9 million Series A round in April. It’s not often we see both a Series A and B round within half a year, but that goes to show how the market for Fishtown’s service is expanding as companies continue to grapple with how to best make use of their data — and how much investors want to be part of that.
Image Credits: Fishtown
“This was a very productive thing for us,” Fishtown Analytics co-founder and CEO Tristan Handy told me when I asked him why he raised again so quickly. “It’s standard best practice to do quarterly catch-ups with investors and eventually you’ll be ready to fundraise. And Matt Miller from Sequoia showed up to one of these quarterly catch-ups and he shared the 40-page memo that he had written to the Sequoia partnership — and he came with the term sheet.”
Initially, Handy declined. “We’re very bullheaded people, I think, as many founders are. It took some real reflection and thinking about, ‘is this what we want to be doing right now?’ ”
In the end, though, the team decided to go ahead with this round — mostly because this round allowed the team to think long-term and provided stability and certainty.
One thing Handy has always been very clear about is that he did not found Fishtown to purely build the largest possible company but to solve its users’ problems, even as the market looked at companies like Databricks and Snowflake — and their financial success — as potential analogs. “My worry was that the financial markets were driving things that weren’t necessarily going to be good for our users,” Handy said.
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Bootstrapped Clearfind wants to cut your software spend, for a small fee
Software is eating the world, and that grub can be costly. As the market for enterprise tools and software continues to balloon, organizations are spending more and more on that software across an increasingly complicated and rapidly evolving landscape.
That’s where Clearfind comes in.
Clearfind was founded (and bootstrapped) by James Layfield and Jocelyn Simons. The startup aims to provide clarity and transparency to organizations looking to buy enterprise software. Over the past two years, Clearfind has been building out its backend, which is a mix of machine learning and humans, to distill a software offering down to its features.
When clients join the Clearfind platform, they give the startup access to their backend through integrations with products like Sage, Quickbooks, SAP, etc. so that Clearfind can take a look at their overall software spend. CIOs or CTOs can then see if there are any redundancies in their current software suite. These executives can also input the use case they’re looking to solve and Clearfind will deliver a detailed report on which SaaS products have the features to solve for it.
Before Clearfind, this process could be incredibly manual or costs tens and sometimes hundreds of thousands of dollars through a consultancy. And even then, those consultants may likely be recommending the products that have paid for top placement, not necessarily the best fit.
Image Credits: Clearfind
Clearfind makes money by charging 1.2 cents per dollar of annual software spend. The company says that it usually reduces spend by about 30 percent for most of the companies it works with by helping them optimize their software ecosystem and eliminate redundancies.
Clearfind also generates revenue through referral fees that come from search within Clearfind. Layfield and Simons were clear that vendors can not pay to influence search results or for placement on the Clearfind front-end, but rather pay for the leads that come through. These fees vary from vendor to vendor.
“When a vendor gets a lead from us, they prioritize it because it’s the most qualified lead they’ll ever get,” said Layfield. “That vendor will know everything. about the buyer and that the buyer is looking for all the criteria their product meets, and how much the buyer is willing to pay. That’s a level of qualified lead that just does not exist.”
Layfield explained there is an even more important reason for vendors to pay a referral fee, which is the implied LTV of a Clearfind lead. A customer that actually wants and needs the product, and the features it provides, is far less likely to churn.
Clearfind isn’t alone in the space. YC-backed Vendr, which is already profitable, is also looking to reduce SaaS spend and Intello, which doesn’t just give a view of software in use but also includes a compliance component.
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Palo Alto Networks to acquire Expanse in deal worth $800M
Palo Alto Networks has been on a buying binge for the last couple of years, and today it added to its haul, announcing a deal to acquire Expanse for $800 million in cash and equity awards. The deal breaks down to $670 million in cash and stock and another $130 million in equity awards to Expanse employees.
Expanse provides a service to help companies understand and protect their attack surface, where they could be most vulnerable to attack. It works by giving the security team a view of how the company’s security profile could look to an attacker trying to gain access.
The plan is to fold Expanse into Palo Alto’s Cortex Suite, an AI-driven set of tools designed to detect and prevent attacks in an automated way. Expanse should provide Palo Alto with a highly valuable set of data to help feed the AI models.
“By integrating Expanse’s attack surface management capabilities into Cortex after closing, we will be able to offer the first solution that combines the outside view of an organization’s attack surface with an inside view to proactively address all security threats,” Palo Alto Networks chairman and CEO Nikesh Arora said in a statement.
Expanse sees the acquisition as a way to accelerate the company road map using the resources of a larger company like Palo Alto, a typical argument from companies being acquired. “Joining forces with Palo Alto Networks will let us achieve our most important business goals years ahead of schedule. During the course of conversations with Palo Alto Networks leadership, we shared optimism that the right combination of technology and people can solve many cybersecurity challenges that to date have seemed intractable,” the startup’s founders wrote in a blog post announcing the deal.
The two co-founders, Dr. Tim Junio and Dr. Matt Kraning, will be joining Palo Alto under the terms of the deal, which is expected to close in Palo Alto’s fiscal second quarter, assuming it passes regulatory muster.
Expanse was founded in 2012 and has raised $136 million, according to Crunchbase data. Its most recent raise was a $70 million Series C last year, which was led by TPG.
Today’s acquisition is Palo Alto’s third in 2020 and the 10th since 2018. Palo Alto stock was up 2.15% in early trading.
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Mozart Data lands $4M seed to provide out-of-the-box data stack
Mozart Data founders Peter Fishman and Dan Silberman have been friends for over 20 years, working at various startups, and even launching a hot sauce company together along the way. As technologists, they saw companies building a data stack over and over. They decided to provide one for them and Mozart Data was born.
The company graduated from the Y Combinator Summer 2020 cohort in August and announced a $4 million seed round today led by Craft Ventures and Array Ventures with participation from Coelius Capital, Jigsaw VC, Signia VC, Taurus VC and various angel investors.
In spite of the detour into hot sauce, the two founders were mostly involved in data over the years and they formed strong opinions about what a data stack should look like. “We wanted to bring the same stack that we’ve been building at all these different startups, and make it available more broadly,” Fishman told TechCrunch.
They see a modern data stack as one that has different databases, SaaS tools and data sources. They pull it together, process it and make it ready for whatever business intelligence tool you use. “We do all of the parts before the BI tool. So we extract and load the data. We manage a data warehouse for you under the hood in Snowflake, and we provide a layer for you to do transformations,” he said.
The service is aimed mostly at technical people who know some SQL like data analysts, data scientists and sales and marketing operations. They founded the company earlier this year with their own money, and joined Y Combinator in June. Today, they have about a dozen customers and six employees. They expect to add 10-12 more in the next year.
Fishman says they have mostly hired from their networks, but have begun looking outward as they make their next hires with a goal of building a diverse company. In fact, they have made offers to several diverse candidates, who didn’t ultimately take the job, but he believes if you start looking at the top of the funnel, you will get good results. “I think if you spend a lot of energy in terms of top of funnel recruiting, you end up getting a good, diverse set at the bottom,” he said.
The company has been able to start from scratch in the midst of a pandemic and add employees and customers because the founders had a good network to pitch the product to, but they understand that moving forward they will have to move outside of that. They plan to use their experience as users to drive their message.
“I think talking about some of the whys and the rationale is our strategy for adding value to customers […], it’s about basically how would we set up a data stack if we were at this type of startup,” he said.
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SentinelOne, an AI-based endpoint security firm, confirms $267M raise on a $3.1B valuation
This year, more than ever before because of the COVID-19 pandemic, huge droves of workers and consumers have been turning to the internet to communicate, get things done and entertain themselves. That has created a huge bonanza for cybercriminals, but also companies that are building tools to combat them.
In the latest development, an Israel-hatched, Mountain View-based enterprise startup called SentinelOne — which has built a machine learning-based solution that it sells under the brand Singularity that works across the entire edge of the network to monitor and secure laptops, phones, containerised applications and the many other devices and services connected to a network — has closed $267 million in funding to continue expanding its business to meet demand, which has seen business boom this year. Its valuation is now over $3 billion.
Given the large sums the company has now raised — $430 million to date — the funding will likely be used for acquisitions (cyber is a very crowded market and will likely see some strong consolidation in the coming years), as well as more in-house development and sales and marketing. Earlier this year, CEO and founder Tomer Weingarten told me that an IPO “would be the next logical step” for the company. “But we’re not in any rush,” he said at the time. “We have one to two years of growth left as a private company.”
SentinelOne contacted TechCrunch with the above details but said that an official press release was due only to be released at 3 p.m. U.K. time. We’ll update with more details if they’re available when they are published. In the meantime, other outlets such as Calcalist in Israel (in Hebrew) have also published these details. And it should be noted that the round was rumored for almost a month ahead of this, although the sums raised were off by quite a bit: the reports had said $150-200 million.
(Side note: Why the pointless games with timings and exclusives? Who knows — I certainly don’t. )
This round included Tiger Global, Sequoia, Insight Partners, Third Point Ventures and Qualcomm Ventures . It looks like Sequoia — which is currently building up a new European operation to look more closely at opportunities on this side of the globe — is the only new name in that list. The others have all backed SentinelOne in previous rounds.
It was only in February of this year that SentinelOne had raised $200 million at a $1.1 billion valuation.
The rapid fundraising, from a top-shelf list of firms, is a notable aspect of this story.
In the world of startups, we are firmly living in a time when investors are looking for strong opportunities to back companies that are shining in a market that is particularly challenging. COVID-19 has all but decimated the travel industry and live in-person event industry, among others.
But services that are helping people continue to live their lives, and those that are helping find a cure or at least solutions to minimise the impact, are very much in demand.
The cybersecurity market — in particular companies that are providing solutions that can immediately prove to be effective in what is an increasingly sophisticated threat landscape — is incredibly active right now, even more than it already was.
“Around 450 cybersecurity companies are operating in Israel, constituting 5% of the global cybersecurity market, in some cyber segments the two world leaders are by Israeli founders like CheckPoint and Palo Alto,” noted Avihai Michaeli, an advisor who scouts startups for corporate VCs.
Within that, endpoint security, the area where SentinelOne concentrates its efforts, is particularly strong. Last year, endpoint security solutions was estimated to be around an $8 billion market, and analysts project that it could be worth as much as $18.4 billion by 2024.
While SentinelOne has a lot of competitors — they include Microsoft, CrowdStrike, Kaspersky, McAfee and Symantec — it is also a strong player in the market. Relying on the advances of AI and with roots in the Israeli cyberintelligence community, its platform is built around the idea of working automatically not just to detect endpoints and their vulnerabilities, but to apply behavioral models, and various modes of protection, detection and response in one go.
“We are seeing more automated and real-time attacks that themselves are using more machine learning,” Weingarten said to me this year. “That translates to the fact that you need defence that moves in real time as with as much automation as possible.”
As of February, it had 3,500 customers, including three of the biggest companies in the world, and “hundreds” from the global 2,000 enterprises, with 113% year-on-year new bookings growth, revenue growth of 104% year-on-year and 150% growth year-on-year in transactions over $2 million. Those numbers will have likely grown significantly since then. (We’ll update as and when we learn more.)
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Accelerators embrace change forced by pandemic
Accelerators have become a major force in the startup world, but these teeming masses of potential have been forced, like every other industry, to adopt major changes with the pandemic. Surprisingly, however, they have not just rolled with the punches but seem to be thriving in the new virtual environment.
I spoke with the heads of three accelerators about the challenges and opportunities presented by the new restrictions. David Brown is the founder and CEO of the large international accelerator Techstars (though he will be stepping down in 2021). Cyril Ebersweiler is a venture partner at SOSV and founder of the HAX hardware accelerator. Daniela Fernandez founded the Sustainable Oceans Alliance and its comparatively new Ocean Solutions Accelerator.
TechCrunch: What were some of the immediate difficulties or opportunities you ran into when the pandemic hit?
Brown: I feel like a duck — above the surface everything is normal, below the surface the feet are paddling like crazy.
When the lockdown came in March, the move to virtual over like 24 hours was hard, but we’re lucky that we’re a global organization. We had a program in Italy so they had gone into lockdown earlier, and a program in Singapore before that, so we were able to be better prepared. And we’ve had a virtual program for four years.
Image Credits: Techstars
Ebersweiler: Anything that’s physical, if it requires your eyes and for you to play with things, it got a lot harder. People prefer in general to have the physical experience. Now we do virtual tech shares where people get to show to everyone else and we comment on it. It actually works well. Pitch practices are fine to do online as well.
People are for some reason more participative and have more feedback than physically — it’s pretty strange.
People are for some reason more participative and have more feedback than physically — it’s pretty strange. Perhaps because you’re not facing the people and you don’t want to say some things in person.
Fernandez: Our content is very intense and in the past, it has been hard for founders to juggle being a full-time founder and participate in a rigorous program. The virtual nature of the program this year seems to have increased our overall engagement with founders. Cutting out the commute time in a busy city leaves founders with more time for workshops, mentor matchmaking, pitch practice and other important sessions. Everybody just has more flexibility and tranquility.
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5 VCs discuss the future of SaaS and software after Pfizer’s vaccine breakthrough
Monday’s news that a COVID-19 vaccine candidate looks to be incredibly effective gave investors reasons to believe in a better future. Perhaps COVID-19 won’t be with us for years, investors appeared to think, but will instead become something that we can bend the curve on sooner than we thought.
A strong vaccine would be key toward moving back to life as it was. And for many companies battered by the pandemic, news that one was coming was more than a shot in the arm — it was stock market salvation. Airline shares soared. Cruise companies jumped. Even long-suffering Boeing shares took flight.
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But amidst the cheering, one sector of the stock market, a key comp for a host of startups, took hits. Yes, the high-flying SaaS and cloud stocks that have been such a key narrative in 2020 thanks to the pandemic and low interest rates, fell sharply while other sectors rallied off the vaccine tidings.
SaaS and cloud stocks are off more this morning, though their declines are shallower than Monday’s losses.
We asked yesterday what signal public investors were trying to send with their trades. But that’s just one angle of the picture. So, to better understand how private investors are viewing the same signals, I reached out to a few VCs who invest in SaaS and, in my experience, are worth listening to.
Below I’ve compiled notes from Bessemer’s Mary D’Onofrio, Work Life Ventures’ Brianne Kimmel, Day One Ventures’ Masha Drokova, Floodgate’s Iris Choi and Shasta’s Jacob Mullins on our question.
Are the bulls still bullish? Let’s find out.
SaaS, vaccines and the future of work
D’Onofrio wrote that her firm was still digesting the vaccine news and that it was “too early to say decisively whether or not people will be back to a pre-COVID life in the next few quarters.” That’s fair. Some good vaccine news does not mean that I’ll be back to speed-running United Economy Plus across the country every two weeks come April.
That said, D’Onofrio doesn’t appear too worried about the early-week selloff, noting that SaaS and cloud stocks — as measured via her firm’s cloud index — are still far ahead of other, broader indices this year. Why does that matter? “Stocks are forward-looking,” she said, which tells her “that even with more visibility into returning to ‘normal,’ the market anticipates that cloud companies will still be able to capitalize on the [market expansion] and growth opportunities that COVID helped to propel.”
“The pie,” she concluded, “has expanded.” That’s bullish and fair, I reckon.
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What I wish I’d known about venture capital when I was a founder
Andy Areitio is a partner at the early-stage fund TheVentureCity, a new venture and acceleration model that helps diverse founders achieve global impact.
When you’re running your own venture — especially if it’s your first — it’s unlikely you will find the time to deep dive into how venture capital firms work. Fundraising is distracting for founders and can even hurt their company in the early days. But if you only start learning about VCs when you’re already down the fundraising path, you’ll already be too late.
Founders tend to make a series of classic mistakes when raising funding. Error number one (and two) is to raise the wrong amount of money and to do it at the wrong time. This double whammy results in founders being very diluted too early or not raising enough money to reach the next funding stage.
They can also put all their eggs in one basket too early. I made that mistake. I had signed a term-sheet (a nonbinding agreement) for a €2.5 million Series A round, passed the due diligence process, and the investment committee had approved the deal. But at the very last minute, a claim from one of the angels on my cap table made the prospect investor change his mind. In a Point Nine Capital survey, founders said that the two most stressful elements of raising venture capital are not knowing where in the fundraising process they are and not understanding why VCs have rejected their proposal.
On the other hand, if you know what VCs all about, you’ll be geared up for the ride, know the kind of investor personality you’re aiming for, and crucially — you’ll optimize the value of your equity in the long run. Founders who manage to raise more VC funds end up having a greater value stake in their company when the time comes to IPO, according to statistical research. The learning curve is steep; you’re not just studying VC as an industry, but the individual investors themselves. So, I’ve decided to share the main lessons about VC that I wish I’d known when I was a startup founder chasing venture capital.
1. It’s not about raising, it’s about raising the right amount at the right time
Startups are all about reaching two milestones: (a) product/market fit and (b) a profitable, repeatable and scalable growth model. Once those two corners are turned, the risk of a startup decreases enormously, which is normally reflected in the valuation. As an early-stage founder, if you want to protect your ownership, make sure you’re raising small amounts of money while your valuations are low.
Save your cash until you de-risk your early-stage startup. Then, raise aggressively when you finally have hard evidence that you have a strong product/market fit and a clear growth model. Be sure you understand when your company reaches that stage and becomes a scaleup. You don’t want to be a founder that has successfully raised a Series A round but has very little ownership and a very long road ahead.
Sometimes, the timing is out of your hands. The price of equity in startups is governed by the supply and demand of capital. Investors themselves have to raise money from another type of investor called Limited Partners (LPs), who may hold stakes in a variety of assets. If LPs have a strong interest in VC assets, there is more supply of capital and the price of startup equity will rise. But the opposite is also true. If you take a look at the last two recessions in the United States (2000 and 2008), you will see that the stock market crash coincided with corrections to valuations in the VC market.
So, be strategic and raise when “the market” has a strong appetite for your equity; otherwise, stretch your runway and wait for the right time. Right now, it’s common to see startups postponing their next raise to 2021, looking for stronger winds.
2. Location: Tell me where you are and I’ll tell you how much you’ll raise
I see two conditions for startups to raise a large round: (a) a large market that can justify a sizable exit, and (b) a large VC fund (small funds don’t need super sizable exits to be successful).
Assuming the first condition is met, where can we find those large VC funds? Typically, they’ll be in locations close to large markets, with a track record of sizable exits.
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Four days left to save big on tickets to TC Sessions: Space 2020
If you’re a part of the early-stage startup space race, or aspire to such celestial heights, don’t miss out on early-bird savings to TC Sessions: Space 2020 on December 16-17. We’re at T-minus four days and counting — buy your pass before the countdown clock strikes 11:59 p.m. (PT) November 13, and you’ll save $100.
Spend two days learning from and engaging with people forging the future of space travel, exploration, communications, manufacturing and so much more. We’re talking top industry founders, investors, government and military officials — across the public, private and defense sectors.
How cool is 3D printing? It’s exponentially cooler when you’re printing rockets like Tim Ellis, CEO of Relativity Space. That’s just one of many hot topics and experienced leaders waiting to help you learn and move your business forward. Check out the event agenda and start planning your schedule now.
You’ll have access to all live sessions, and you can access video on demand. Whether you need to meet with clients, network at the event or check out early-stage exhibitors in the expo, VOD lets you conquer FOMO — fear of missing out.
Networking’s essential for startup success and CrunchMatch, our free AI-powered platform, makes it simple and easy to meet, greet, connect and collaborate with the people who align with your business goals. You never know what might develop from a CrunchMatch connection.
This is our first TC Sessions dedicated to space, but it is by no means our first dance. TC Sessions of all stripes are synonymous with opportunity. Case in point: Karin Maake, senior director of communications at FlashParking, had this to say about her TC Sessions experience:
TC Sessions wasn’t just an educational opportunity, it was a real networking opportunity. Everyone was passionate and open to creating pilot programs or other partnerships. That was the most exciting part. And now — thanks to a conference connection — we’re talking with Goodyear’s Innovation Lab.
Join this intrepid global community at TC Sessions: Space 2020 on December 16-17. The four-day countdown to savings is on — don’t miss your chance to keep $100 in your pocket. Buy your early-bird pass before prices go up on November 13 at 11:59 p.m. (PT).
Is your company interested in sponsoring TC Sessions: Space 2020? Click here to talk with us about available opportunities.
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Pioneers of in-space refueling and manufacturing join TC Sessions: Space 2020
One of the problems with putting a satellite in orbit is that once you do, it’s pretty much out of your hands. If anything goes wrong, or it runs out of fuel, that’s all she wrote. Fortunately there are companies that aim to change this, and three leaders in the field — Orbit Fab, Astroscale and Maxar — will be joining us at TC Sessions: Space in December.
Also at TC Sessions: Space
You may remember Orbit Fab from Disrupt’s Startup Battlefield around this time last year. CEO and co-founder Daniel Faber debuted its refueling interface, RAFTI, and showed how that and a network of “tanker” satellites could save companies hundreds of millions by keeping their spacecraft in orbit rather than sending up replacements.
Astroscale is embarking on a similar effort for satellites in geosynchronous orbits, which are even more expensive to replace. But the Japan-based company is also aiming at taking down the innumerable dead satellites and debris scattered throughout other orbits, and has raised huge sums to do so. Astroscale’s U.S. president, Ron Lopez, will join the panel to discuss the many potential approaches to improving sustainability in space.
Maxar is of course a well-known name in space operations, and we’ve had head of space robotics Lucy Condrakchian onstage at TC Sessions: Robotics. Her team is currently working on the ambitious Restore-L mission, which will demonstrate on-orbit refueling, manufacturing and assembly. Why build it down here if you can do it up there?
These three panelists will discuss the possibilities of this emerging industry and what it could mean for startups and established enterprises here on the ground. With costs of launch dropping, the cost of building and maintaining a major satellite becomes a greater issue — but tiny, cheap satellites are also beginning to proliferate.
How will the market evolve? Can proprietary but practical tech like RAFTI make a difference? How close are we to the first satellite built entirely in space? All this and more will be on the table for our panel next month.
Get an early-bird ticket for just $125 until this Friday, November 13. And we have discounts available for groups, students, active military/government employees and for early-stage space startup founders who want to pitch and give their startup some extra visibility.
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