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Databricks crossed $350M run rate in Q3, up from $200M one year ago
The Exchange regularly covers companies as they approach and crest the $100 million revenue mark. Our goal in tracking startups growing at scale is to scout future IPO candidates and better understand the late-stage financing market.
Today we’re digging into a company that is a little bit bigger than that. Namely Databricks, a data analytics company that was most recently valued at around $6.2 billion in its October, 2019 Series F when it raised $400 million.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
The former startup reached a run rate of around $350 million at the end of Q3 2020, up from $200 million in revenue in Q3 2019, putting it on a rapid growth pace for a former startup of its size.
To better dig into the company’s performance, I got on the phone with its CEO, Ali Ghodsi, hoping to better understand how Databricks has managed to grow as much as it has in recent years. Ghodsi took over as CEO in 2016 after serving as the company’s VP of engineering. He’s also a co-founder.
Databricks is an obvious IPO candidate, but it’s also a company with broad private-market options, given its revenue expansion and attractive economics. Today, let’s talk about Databricks’ growth history, how it changed its sales process and what’s ahead for the unicorn more than six times over.
What does Databricks do?
What does Databricks actually do? Normally I’d be content to wave my hands at data analytics and call it a day. Chatting with Ghodsi, however, clarified the matter, so let me help.
Let’s say that a company has a lot of data on its machinery and wants to know when different pieces are going to fail. Or, perhaps a company wants to find patterns in some economic data. How do they find that information?
Ghodsi reckons you need three things: First, data engineering, or getting customer data “massaged into the right forms so that you can actually start using it.” Second, data science, which Ghodsi describes as “the machine learning algorithms, the predictive algorithms that you need to have.” And third, on top, companies “more and more” also want data warehousing and some “basic analytics,” he added.
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With a new focus on marketing software, NewsCred relaunches as Welcome
The company formerly known as NewsCred has a new name and a new product: Welcome.
Co-founder and CEO Shafqat Islam explained that this follows a broader shift in the company’s strategy. While previously known as a content marketing business, Islam said NewsCred has been increasingly focused on building a broader software platform for marketers (a platform that it uses itself).
Eventually, this led the company to sell its content services business to business journalism company Industry Dive and its owner Falfurrias Capital Partners over the summer. Now Welcome is officially unveiling its new brand, which it’s also using for its new marketing orchestration software.
“It’s not often that startups like ours get to close one chapter and open another chapter,” Islam said. “We kind of went back to being a Series A, Series B startup, iterating and working very closely with our customers.”
While today is the official launch of the Welcome platform, Islam said the company has been moving the software in this direction for the past year, and that this side of the business has already seen significant growth, with daily average users up 300% year-over-year.
Islam also suggested that while this was the right time to come up with a new company name, it’s something that’s been discussed repeatedly in the past.
Image Credits: Welcome
“Every time we raised money in last 10 years, the new investor would say, ‘What about the name? Can we change it?’ ” he recalled. “We could never do it, because we had this content heritage built up and enough brand equity. Finally, with this deal, and with the launch of the new software … we came up with the name Welcome.”
While there’s no shortage of marketing software out there already, Islam said marketers need an orchestration system to manage their projects and workflows — most of them, he said, are stuck using “horizontal” project management tools that aren’t really built for their needs, such as Asana or Jira.
“Marketers have very specific needs,” Islam said. “It could be a simple thing like … marketers work with campaigns, so what are your specific campaigns, marketing briefs or marketing-specific workflows? Our approach was: How do we create something that’s really specific to marketers versus all horizontal solutions out there?”
He also noted that “close to half the engineering team works on the interoperability problem,” so that Welcome can integrate all the other tools that marketers are using, like HubSpot and Marketo. The goal, Islam said, is to become “something marketers standardize on,” the way that salespeople log into their Salesforce accounts every day.
Islam also argued Welcome will take advantage of the way that the pandemic has accelerated changes in the enterprise sales process.
“I personally believe the way people buy software is changing,” he said. “The days of wining and dining and selling to the CMO, that still exists, but that’s not how everyone wants to buy anymore.”
To adapt to this new world, Islam said the startup is adopting a more “bottoms up” sales approach, with a free version of the platform due for release next month.
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Dataloop raises $11M Series A round for its AI data management platform
Dataloop, a Tel Aviv-based startup that specializes in helping businesses manage the entire data life cycle for their AI projects, including helping them annotate their data sets, today announced that it has now raised a total of $16 million. This includes a $5 seed round that was previously unreported, as well as an $11 million Series A round that recently closed.
The Series A round was led by Amiti Ventures, with participation from F2 Venture Capital, crowdfunding platform OurCrowd, NextLeap Ventures and SeedIL Ventures.
“Many organizations continue to struggle with moving their AI and ML projects into production as a result of data labeling limitations and a lack of real-time validation that can only be achieved with human input into the system,” said Dataloop CEO Eran Shlomo. “With this investment, we are committed, along with our partners, to overcoming these roadblocks and providing next generation data management tools that will transform the AI industry and meet the rising demand for innovation in global markets.”
Image Credits: Dataloop
For the most part, Dataloop specializes in helping businesses manage and annotate their visual data. It’s agnostic to the vertical its customers are in, but we’re talking about anything from robotics and drones to retail and autonomous driving.
The platform itself centers around the “humans in the loop” model that complements the automated systems, with the ability for humans to train and correct the model as needed. It combines the hosted annotation platform with a Python SDK and REST API for developers, as well as a serverless Functions-as-a-Service environment that runs on top of a Kubernetes cluster for automating dataflows.
Image Credits: Dataloop
The company was founded in 2017. It’ll use the new funding to grow its presence in the U.S. and European markets, something that’s pretty standard for Israeli startups, and build out its engineering team as well.
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Vivun announces $18M Series A to keep growing pre-sales platform
Vivun’s co-founder and CEO, Matt Darrow used to run pre-sales at Zuora and he saw that pre-sales team members had a lot of insight into customers. He believed if he could capture that insight, it would turn into valuable data to be shared across the company. He launched Vivun to build upon that idea in 2018, and today the company announced an $18 million Series A.
Accel led the round with participation from existing investor Unusual Ventures. With today’s investment, Vivun has raised a total of $21 million, according to the company.
Darrow says that the company has caught the attention of investors because this is a unique product category and there has been a lot of demand for it. “It turns out that businesses of all sizes, startups and enterprises, are really craving a solution like Vivun, which is dedicated to pre-sales. It’s a big, expensive department, and there’s never been software for it before,” Darrow told TechCrunch.
He says that a couple of numbers stand out in the company’s first year in business. First of all, the startup grew annual recurring revenue (ARR) six fold (although he wouldn’t share specific numbers) and tripled the workforce growing from 10 to 30, all while doing business as an early stage startup in the midst of a pandemic.
Darrow said while the business has grown this year, he found smaller businesses in the pipeline were cutting back due to the impact of COVID’s, but larger businesses like Okta, Autodesk and Dell Secureworks have filled in nicely, and he says the product actually fits well in larger enterprise organizations.
“If we look at our value proposition and what we do, it increases exponentially with the size of the company. So the larger the team, the larger the silos are, the larger the organization is, the bigger the value of solving the problem for pre-sales becomes,” he said.
After going from a team of 10 to 30 employees in the last year, Darrow wants to double the head count to reach around 60 employees in the next year, fueled in part by the new investment dollars. As he builds the company, the founding team, which is made up of two men and two women, is focused on building a diverse and inclusive employee base.
“It is something that’s really important to us, and we’ve been working at it. Even as we went from 10 to 30, we’ve worked to pay close attention to [diversity and inclusion], and we continue to do so just as part of the culture of how we build the business,” he said.
He’s been having to build that workforce in the middle of COVID, but he says that even before the pandemic shut down offices, he and his founding partners were big on flexibility in terms of time spent in the office versus working from home. “We knew that for mental health strength and stability, that being in the office nine to five, five days a week wasn’t really a modern model that would cut it,” he said.
Even pre-COVID the company was offering two quiet periods a year to let people refresh their batteries. In the midst of COVID, he’s trying to give people Friday afternoons off to go out and exercise and relax their minds.
As the startup grows, those types of things may be harder to do, but it’s the kind of culture Darrow and his founding partners hope to continue to foster as they build the company.
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Discuss the unbundling of early-stage VC with Unusual Ventures’ Sarah Leary & John Vrionis
This year has been everything but business as usual for the venture and tech community. And we still have a presidential election ahead of us.
So, why not listen to the aptly-named experts over at Unusual Ventures? Partners Sarah Leary (co-founder of Nextdoor) and John Vrionis, formerly of Lightspeed Ventures Partners, will join us on Tuesday, October 20 on the Extra Crunch Live virtual stage.
Thanks to all of you who have joined us for our series of live discussions that has included tech leaders like Sydney Sykes, Alexia von Tobel, Mark Cuban and many others (all recordings are still accessible for Extra Crunch subscribers to watch and learn from).
If you’re new, welcome! You’ll have a chance to participate in the live discussion if you have an Extra Crunch subscription.
Unusual Ventures’ investments span the consumer and enterprise space, including companies like Robinhood, AppDynamics, Mulesoft and Winnie.
For this chat, I plan to spend some time talking to Leary and Vrionis about how early-stage venture capital has changed with the rise of rolling funds, community funds and syndicates. Unusual Ventures claims “there’s an enormous opportunity to raise the bar on what seed-stage investors provide for early-stage founders,” so we’ll get into that opportunity as well.
And if we have time, we’ll discuss remote work, building in public and the U.S. presidential election.
So, what are you waiting for? Add the deets to your calendar (below the jump!) and join me next Tuesday.
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Spendesk raises another $18 million for its corporate card and expense service
French startup Spendesk has added $18 million to its Series B round. The company already raised $38.4 million as part of its Series B last year, which means that it raised $56.4 million as part of this round. Eight Roads Ventures is investing in today’s extension round.
Spendesk, as the name suggests, focuses on all things related to spend management. The company issues virtual and physical cards for employees, lets you set up an approval workflow and manages expense reimbursements. It can also centralize all your invoices and receipts on the platform.
By centralizing everything on the same platform, it lets you control your spending in real-time and save time on accounting tasks. Reconciliation is easier if you combine transactions and receipts on Spendesk. Clients can also export data to Xero, Datev, Netsuite or Sage.
Image Credits: Spendesk
For big expenses, you can send a request to your manager. If they approve your request, you receive a single-use virtual card for that expense.
Similarly, if your company gives you a physical debit card, you get a pre-defined budget. Your manager can top up your card for big expenses, block ATM withdrawals, block weekend transactions and more. Employees can check their payments from the mobile app, see their card balance and add receipts.
Spendesk is a software-as-a-service product with a monthly subscription fee. While transactions have probably slowed down due to the economic crisis, the company says that its subscription revenue has doubled year-over-year. In just a year, the company grew from 100 to 200 people.
It remains focused on small and medium companies across Europe. There are 40,000 people using Spendesk through their companies. Clients include Algolia, Curve, Doctolib, Raisin and Wefox. The company has hired Joseph Smith as Chief Revenue Officer, pictured left above with the company’s CEO Rodolphe Ardant (pictured right).
Image Credits: Spendesk
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Edge computing startup Edgify secures $6.5M seed from Octopus, Mangrove and semiconductor
Edgify, which builds AI for edge computing, has secured a $6.5 million seed funding round backed by Octopus Ventures, Mangrove Capital Partners and an unnamed semiconductor giant. The name was not released but TechCrunch understands it may be Intel Corp. or Qualcomm Inc.
Edgify’s technology allows “edge devices” (devices at the edge of the internet) to interpret vast amounts of data, train an AI model locally and then share that learning across its network of similar devices. This then trains all the other devices in anything from computer vision, NLP, voice recognition or any other form of AI.
The technology can be applied to anything from MRI machines, connected cars, checkout lanes, mobile devices and anything that has a CPU, GPU or NPU. Edgify’s technology is already being used in supermarkets, for instance.
Ofri Ben-Porat, CEO and co-founder of Edgify, commented in a statement: “Edgify allows companies, from any industry, to train complete deep learning and machine learning models, directly on their own edge devices. This mitigates the need for any data transfer to the Cloud and also grants them close to perfect accuracy every time, and without the need to retrain centrally.”
Mangrove partner Hans-Jürgen Schmitz, who will join Edgify’s Board comments: “We expect a surge in AI adoption across multiple industries with significant long-term potential for Edgify in medical and manufacturing, just to name a few.”
Simon King, partner and Deep Tech Investor at Octopus Ventures added: “As the interconnected world we live in produces more and more data, AI at the edge is becoming increasingly important to process large volumes of information.”
So-called “edge computing” is seen as being one of the forefronts of deep tech right now.
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Nym Health raises $16.5 million for its auditable machine learning tools for automating hospital billing
A little less than two years after raising its seed round, the Israeli-based Nym Health has added another $16.5 million to its cash haul so it can roll out its technology developing auditable machine learning tools for automating hospital billing.
The new financing came from investors, including GV (the investment arm of Google previously known as Google Ventures), and will be used by the company to expand its technology development and sales and marketing efforts across the U.S.
Billing has been a huge problem for healthcare systems in the U.S., thanks to complicated coding that needs to be entered to ensure insurance providers pay for the services medical professionals give to patients.
Nym claims to have solved the problem by developing technologies that can convert medical charts and electronic medical records from physician’s consultations into proper billing codes automatically. The company uses natural language processing and taxonomies that were specifically developed to understand clinical language to determine the optimal charge for each procedure, examination and diagnostic conducted for a patient, according to Nym.
The company was founded in 2018 by two former members of Israel’s 8200 cybersecurity unit of the army. Adam Rimon and Amihai Neiderman both wanted to work on something together and Neiderman was set on doing something in the medical space involving natural language processing. Rimon had just finished a doctorate in computational linguistics, so the move into charting and medical coding seemed natural.
“Because of our approach we can generate full audit trails,” said Neiderman. “We can explain how we understood everything in patient charts.”
Having automated processes that are also auditable is important for healthcare providers in case they need to provide justification to insurance companies for the services they performed.
Nym’s software can’t address fraud if physicians are padding their bills with services they didn’t offer, but it can provide an audit and justification for the services that a hospital coded for — and potentially wring more money for hospitals that lose out thanks to improperly coded bills. “On the medical decision-making we never intervene. We assume that the physician is trying to do their best and they’re sticking to the protocol,” said Neiderman.
Interest in developing better billing systems for healthcare is high among venture investors, considering that coding related denials of payment can cost hospitals $15 billion, according to Nym. It’s a service that brought attention not just from GV, but Bessemer Venture Partners, Dynamic Loop Capital, Lightspeed, Tiger Global, and angel investors including Zach Weinberg and Nat Turner from Flatiron Health.
“Inaccurate coding is bad for everybody,” says Ben Robbins, a venture partner at GV.
Nym charges between $1 and $4 per chart it analyzes, and is already working with around 40 medical providers in the U.S., according to the company.
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Genemod raises cash for its lab inventory management service used by research institutions around the US
Genemod, a software for laboratory inventory management used by institutions like the University of Washington School of Medicine; the University of California, Berkeley; and the National Institutes of Health; has raised $1.7 million from a clutch of top venture investors.
The small seed round came from Defy.vc, with additional commitments from Omicron, Unpopular Ventures, Underdog Labs and Canaan Partners.
With the capital, the company said it would develop a product management software to complement its existing inventory management service.
These are small stepping stones on the way to paving a new road to pharmaceutical development based on collaborative data-sharing technology, the company said.
It’s a road that companies like Owkin and Within3 have raised big dollars to pave already. They’re just two companies in the market that are building collaborative software for the pharmaceutical industries.
Genemod’s pitch is that it can increase productivity by giving researchers a better window into the tools they have and the tools they need to accelerate the process of experimentation without downtime while waiting for supplies.
“While the life sciences industry is known for developing inventive solutions to some of the world’s biggest health problems, many scientists are working with manual, siloed and inefficient processes,” said Jacob Lee, the company’s chief executive.
Alongside the funding, Defy.vc will serve as a growth partner for Genemod, supporting the company as it works to roll out its product road map for the latter half of the year. Neil Sequeira, co-founder and managing director of Defy.vc, will join Genemod’s board of directors.
Founded in 2018, Genemod was part of the first cohort of Venture Out Startups, a pre-seed investment program designed to encourage entrepreneurs to start their own businesses.
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Join Yext’s Howard Lerman for a live Q&A right now
Today’s the day! This afternoon at 2 p.m. EDT/11 a.m. PDT, Yext CEO Howard Lerman will join TechCrunch for a live chat.
The conversation is part of our continuing Extra Crunch Live series, now in its second season. What are we up to in the second installment of the conversations? The same as before, bringing the most interesting founders and investors ’round for a chat that you can contribute to by bringing your own questions. (Make sure you’re signed up so you can jump right in.)
As we wrote last week, Lerman is not just another public company CEO: His company, Yext, has some old-fashioned history with TechCrunch, having pitched at one of our events back in 2009. It went well, with Yext quickly raising money afterward.
We’ll spend a little bit of time in the past talking about Yext’s history as a startup. I want to know at what stage did Howard begin to consciously prep Yext for an IPO — the company went public in 2017 — and how long until he felt the company was ready? Given that we just came off one of the most active quarters in recent history for technology companies going public, it’s a good time to dig into the matter.
We’ll also get Howard’s take on the public markets in 2020 and whether he was happy with Yext’s IPO timing.
For the early-stage founders in the crowd, we have stuff prepped for you as well. Yext has moved from a business best-known for building a system that helps companies keep their diverse online listings up to date with their most pertinent information, to a search-first company that is leading its customer acquisition cycles with its “Answers” product.
How did the company manage to build the latter while eating off the former, and how has the company balanced its continued development since? What can startups learn from the choices that Yext has made?
And, TechCrunch recently reviewed Howard’s social media posts regarding Black Lives Matter: “As CEO, I will see to it that our company continues to be advocates for equality and justice.” So, how does he view the role of politics inside of tech companies, and what advice does he have for founders who are looking to build a lasting culture?
It’s going to be a great chat. Make sure you’ve signed up for Extra Crunch and I’ll see you in a few hours.
Bring your best questions. Howard is a good chat, so he’ll have something to say if you ask something great. Details after the jump.
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Below are links to add the event to your calendar and to save the Zoom link. We’ll share the YouTube link shortly before the discussion:
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