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This Labor Day, spare a thought for the workers who made your doorstep delivery possible

Published September 7, 2020

Arjuna Costa
Contributor

Arjuna Costa is a partner at Omidyar Network and early stage investor in Ruma.

Better safety in the warehouse

Imagine there’s a package handler at a major manufacturer named Jack who spends his shifts heaving heavy boxes onto a conveyor belt. It’s an arduous movement that Jack will repeat a few thousand times before he punches out. As a 10-year veteran on the job, Jack has performed this singular task on this same warehouse floor more times than he can count. On this particular night, he’s tired after staying up late playing with his kids, and he slips a disk in his back. Unfortunately, Jack’s plight is all too often a reality for millions of workers today.

According to the Bureau of Labor Statistics, 5% of warehouse workers in the U.S. experience an injury on the job each year—higher than the national average. After service workers, like firefighters and police, transportation/shipping and manufacturing/production rank second and third as the occupations with the largest number of workplace injuries resulting in days away from work. Jobs that involve heavy lifting, arduous repetition and operating complex machinery come with serious risk.

Injuries can be devastating for workers, both physically and financially. Taking time off work can not only result in lost wages, but also drive people into debt due to health-related expenses, creating health-poverty traps that are difficult to climb out of. Worker injuries are also costly for employers. A study from Liberty Mutual, using data from the U.S. Bureau of Labor Statistics and the National Academy of Social Insurance, found that serious, nonfatal injuries cost $84.04 million a week in the transportation and warehousing industry. It is in corporations’ best interest to prioritize workplace safety.

One challenge is that traditional approaches to workplace safety are slow, inaccurate and costly. Without practical interventions, organizations spend an estimated $2,000+ per worker annually on injury prevention. Within manufacturing and logistics industries, it costs an additional $2,000+ annually for workers’ compensation per full-time employee. Currently, there is no standard solution to preventing workplace injuries while lowering costs, leaving workers like Jack without adequate protections. Fortunately, digital platforms and tools that leverage technological innovation, including sensors and wearables, are advancing new ways to prevent workplace accidents and injuries.

Take for example StrongArm, one of Flourish’s portfolio companies. StrongArm has built a technology platform that integrates a new generation of industrial wearables, big data analytics and smart algorithms. It is designed to modernize industry dynamics for workers, employers and workers’ compensation insurers. The company’s GDPR-compliant wearable hardware devices and data platform called FUSE deliver real-time injury prevention feedback and collect data to support precise interventions for overall injury reduction and has reduced injury rates by more than 40% year-over-year for its clients.

StrongArm has also helped keep workers safe during the pandemic by launching a new suite of capabilities on its FUSE platform, including CDC communication, proximity alerts (i.e., notifications to workers within six feet of one another), and exposure analysis (understanding who has interacted with whom, at what time, and for what duration, exposing any potential contact transfer with accuracy). These enhanced capabilities can get workers back to work faster, earning vitally needed income while reducing COVID-19 risk by 95%.

Fetch Robotics is another company using technological innovation and digital platforms to promote worker safety. Fetch makes an Autonomous Mobile Robot (AMR) that can transport materials within warehouses, factories and distribution centers while also gathering environmental data. This can relieve the burden of heavy lifting from human workers and ensure that conditions, like heat, remain safe in work environments. In June 2020, the company announced that it was launching a disinfecting AMR that can decontaminate spaces larger than 100,000 square feet in 1.5 hours, helping workers stay safe and get back to work quicker amid the spread of the virus.

Employers should do more

In its report titled, “The Impact of COVID-19 on Tech Innovation,” Lux Research found that the outbreak of COVID-19 will likely push corporations with major manufacturing and logistics operations to assess the potential of robotics. More companies will explore how they can automate processes, particularly those that are repeatable and predictable. Findings like these inevitably lead to questions about how increased automation will impact workers — the eternal “will robots take all the jobs?” question. However, we are still a long way away from a world where human workers are obsolete (just ask Elon Musk).

Robots are still not good at picking up small or oddly shaped objects, for instance. For the foreseeable future, corporations will depend on logistics workers and have a responsibility to protect the safety of those workers. It’s not enough to plaster the required OSHA sign on the factory or warehouse floor. Corporations need to do more. Fortunately in this case, the right thing to do is the good thing to do. By embracing technological innovation, promoting worker safety is a win-win.

Why a startup with $10M in annual revenue took 18 months to get VC funding

Published September 7, 2020

Back in 2006, Joseph Heller went to China where he spent the next decade learning about the manufacturing business. Based on that experience he eventually built a startup called The Studio. The idea was to help connect people with a small business idea to manufacturers in China in a fully digital way.

By 2016 he had grown his startup into a $10 million annual business with 100 employees around the world. But when it came to fundraising back in the U.S., Heller found it wasn’t easy for a Silicon Valley outsider to get in the door without connections.

He persevered and in 2018 landed an $11 million Series A from Ignition Partners, which allowed him to expand his business. But he still wondered if he would have done even better with the capital and guidance that comes from working with an early-stage VC firm in Silicon Valley much earlier in the process.

We sat down with Heller recently to learn how he built a company from the ground up with little outside help and what it was like to raise those funds.

Starting out

While Heller was in China, he learned how to navigate the manufacturing landscape and was able to build up a nice consulting business by helping big brands get goods manufactured there. But he saw an opportunity to do more, and especially to help smaller businesses looking to manufacture goods in China in much smaller batches than the big operations would typically require.

The latter was much more difficult to do, and Heller sensed there could be a business opportunity to work with small companies empowered by platforms like Shopify with a way to sell goods online. What they lacked was a way to manufacture them.

“I just felt that it’s crazy that we’ve democratized the ability to set up a web store with Shopify, and use Instagram to get the message out there. Everything’s been democratized for these small brands, but the manufacturing piece was still really hard to penetrate,” Heller told TechCrunch.

He decided to build on that idea by creating a company that would make it easier for small businesses to order custom goods from micro factories in China, giving them access to the same opportunities as big brands, but in much smaller batches. That idea became The Studio.

“We basically ended up building relationships with these small micro factories in China that we trained to run smaller batch manufacturing, and then we built software that enabled these SMBs to place orders with these factories. So instead of having to order 30,000 pieces, they can order 100 pieces,” he explained.

Image Credits: The Studio

Struggling to get meetings

When Heller went looking for funding, he had built the business to $10 million in annual revenue, and he believed that he had a solid enough organization to draw the attention of venture capitalists.

After all, this was a business he had painstakingly built and grown into a healthy early-stage company based on years of experience in the field. He had taken it to market. He had proven product-market fit. He had customers. Seemed like it would be a slam dunk to get funding.

In reality, though, he struggled to get meetings. While Heller, who is Black, says that it can be difficult for Black founders to get access to venture capital firms, he sees it as part of a larger issue of general lack of access for those who don’t have the right connections.

“For starters, there are certain people that just don’t have access to VCs. And it’s not just a Black issue. I think it’s more of an issue of VCs just being very exclusive and it tends to be mostly White people that have those types of connections,” he said.

He added, “If you’re not in Silicon Valley and not in that very exclusive VC club, it’s basically almost impossible to raise money and so that was never even an option for us [early on],” he said. Instead he bootstrapped the company with his own money, but when he had built the company to the level he had, he wanted outside capital, and he believed he was in a good position to get it.

Climbing the mountain

Heller was able to get a meeting through a connection from his days at the University of California, Berkeley, who had been a venture capitalist. That led to other meetings, which led mostly to a lot of disappointment. To be fair, it’s hard for anyone to break into this system and present a compelling case, but Heller had built his business to $10 million in revenue. That had to count for something.

“It was very clear that I was an outsider in Silicon Valley trying to penetrate it, and this was already a $10 million business with a very competent engineering team. We had proven out a lot of things, and I feel that if I were part of that kind of exclusive VC network, we would have raised money a lot quicker,” Heller lamented.

He did note that he believed being Black was at least a factor in his struggle to get attention from VC firms. “It is particularly difficult for African American and other founders to just get initial capital to start their business. I spent a lot of my personal money, and years making mistakes, because I was so far away from the centers of capital,” he said.

Heller says he felt he might have lost something along the way because of that.”I’ve seen countless founders that have good VC connections able to raise $1 million to $5 million seed rounds, with literally no product and just an idea,” he said. “This option was not available to me.”

Getting to yes

After 18 months of meetings, he finally received $11 million from Ignition Partners. He said because of his struggle and the time and energy he took to keep pitching, it was a great feeling of accomplishment when Ignition finally funded his company.

“This was something that I really wanted, and it kind of validated that we did have a real business that was worthy of being funded,” he said.

Although Heller says this year has been difficult for international manufacturing due to the pandemic, he has built his business to $20 million in annual revenue and around 150 employees since getting his A round in 2018.

He also launched a new business earlier this year called SuppliedShop.com, which allows very small businesses to buy ready-made inventory from factories. He reports that the new business is already growing 50% month over month.

Connections certainly count as Heller found, but sometimes it also takes grit and determination and a good idea to build a company. That’s what Heller brought to this process. He still believes that it’s best to look at the outcome, rather than focus on the struggle it took him to get there.

“I do think that, although there is racism and there are these real struggles, I also think people should be recognized for trying to make changes, and hopefully this will be a catalyst for people making more change,” he said.

The Disrupt 2020 Labor Day flash sale ends tonight

Published September 7, 2020

As the Labor Day weekend winds down here in the states, so too does our flash sale and your chance to save $100 on a Digital Pro pass to Disrupt 2020. Fight off your holiday food coma long enough to buy your pass before 11:59 p.m. (PT) tonight.

Disrupt 2020 takes place September 14-18, and you can’t afford to miss this global opportunity to learn new startup skills, add to your investment portfolio, build brand awareness, expand your network and do whatever it takes to drive your business forward.

We’re also celebrating 10 years of Disrupt. How crazy is that? As part of the celebration, we formed the TC10 — a remarkable group of entrepreneurs and investors who’ve been a big part of Disrupt for the past 10 years. Meet the TC10 here.

They’ll show up throughout Disrupt 2020 and play an important role in our newest event, the Pitch Deck Teardown sessions. Throughout Disrupt, top VCs and entrepreneurs will look at submitted pitch decks, dissect them slide-by-slide and discuss what works and what doesn’t. Want the Teardown treatment? Submit your pitch deck here.

What else can you do with your Digital Pro pass? Take a deep dive into the Disrupt 2020 agenda where you’ll find an incredible line up of experts, founders, investors, tech icons and visionaries. You’ll lean in and learn from folks like Bumble CEO, Whitney Wolfe Herd, Cloudflare Co-founder, Michelle Zatlyn and Sequoia Capital’s Roelof Botha. You’ll even hear from celebrities like Kerry Washington, who’s making quite a name for herself as a tech investor.

Explore hundreds of early-stage startups — including the TC Top Picks — in Digital Startup Alley. Our virtual venue makes it easy to find them and connect.

Take your networking global. The virtual nature of Disrupt 2020 allows anyone from any location to participate, and that spells exponential opportunity. Keep organized and on schedule with CrunchMatch, our AI-powered platform that doesn’t just connect you with people, it connects you with the right people. Simply answer a few quick questions during registration, and you’re ready to schedule 1:1 virtual meetings with founders, investors or other Disrupt attendees.

There’s a metric ton more — the Extra Crunch Stage, Startup Battlefield, interactive Q&As and breakout sessions. TL;DR — you can’t afford to miss the abundant opportunities waiting for you at Disrupt 2020. Buy your Digital Pro Pass before the flash sale ends tonight at 11:59 p.m. (PT) and save $100.

Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.

BIMA nabs $30M more for micro- health and life insurance aimed at emerging markets

Published September 7, 2020

The coronavirus global health pandemic — and the new emphasis on social distancing to slow down the spread of COVID-19 — has put healthcare and tech services used to enable healthcare remotely under the spotlight. Today a startup that’s building microinsurance and healthcare services specifically targeting emerging markets is announcing a round of funding to meet a surge in demand for its services.

BIMA, a startup that provides life and health insurance policies, along with telemedicine to support the latter, all via a mobile-first platform targeting consumers in emerging markets whose primary entry point to online services is via phones, not computers, is today announcing that it has raised $30 million in funding, a growth round that the Stockholm/London-based startup plans to use to double down on its health services in the wake increased demand around COVID-19.

The company currently provides telemedicine as a service connected to its health insurance, and it has expanded to include health programs for managing illnesses and offering discounts for pharmacies, and the plan seems to be to bring more services into the mix.

This is the same approach we’re seeing from other insurance startups targeting emerging economies, including China’s Waterdrop, which recently raised $230 million. Looking at the network of services Waterdrop is building, including crowdfunding, gives you an idea of what else BIMA might potentially look to add in, too.

The round is being led by a new investor — China’s CreditEase Fintech Investment Fund (CEFIF) — with previous backers LeapFrog Investments and insurance giant Allianz (who were in BIMA’s previous, $97 million round) also participating.

The startup is not disclosing its valuation this time around, but in its previous round the company was valued at $300 million, and it has grown considerably since then.

BIMA has now clocked up 2 million tele-doctor consultations and has some 35 million insurance and health policies on its books, growing its customer base by some 11 million people in the last two years. It’s now active in 10 countries — Ghana, Tanzania and Senegal in Africa; and Bangladesh, Cambodia, Indonesia, Malaysia, Pakistan, Philippines and Sri Lanka across Asia.

At a time when we have seen a number of insure tech startups emerge in the US and Europe — with some, like Lemonade, growing into publicly-listed companies — BIMA is very notable in part because of who it targets.

It’s not higher economic brackets, or necessarily segments with disposable income, or those in developed markets with stable economies. Rather, its focus is, in its words, underserved families that typically live on less than $10 per day and are at high risk of illness or injury, with 75% of its customers accessing insurance services for the very first time, BIMA notes.

“Telemedicine and insurance are needed more than ever and COVID accelerated awareness and acceptance for these types of products amongst emerging consumers and government. They’ve gone from ‘nice to have’ to a necessity,” said Mathilda Strom, who co-founded the company with CEO Gustaf Agartson, in an interview. “Utilisation nearly doubled in our telemedicine services.” BIMA covers COVID and pandemics in general in its policies, she added. “We have paid out COVID-related claims to families of people who suffered or passed away from the illness.”

It’s also working with health authorities that have been overwhelmed in the pandemic. Pakistani government and Indonesian government now use BIMA to off-load their health services by providing teledoctor consultations or doctors chats to customers.

Aiming at developing economies where middle classes are still only materialising, currencies are potentially unstable, and there is still a lack of infrastructure means that BIMA is contending with a combination of factors that makes the bar high for entry, but it’s also potentially more rewarding because of the lack of competition and tapping a demand that is still rapidly growing.

“The onset of COVID-19 has brought home the value of telemedicine, to help prevent the spread of disease, and the importance of insurance, for peace of mind,” said Agartson in a statement.

“Through digital solutions, and a human touch, we’ve been able to serve hard to reach communities with tools and services that bring them a sense of security at such a challenging time. The funds we have raised will allow us to expand our operations and further invest in our product offering that will help us scale quickly to meet the unprecedented demand for our services.”

It’s interesting to see CreditEase, a Chinese investor, as part of this round: the idea of all-in, full service health services companies banked around the insurance proposition has been one cultivated in the Chinese market. But even with the development of HMOs in the US, it’s interesting that there have been relatively few startups around the world trying to develop similar models. BIMA stands out in part because of that.

“We are very impressed by BIMA’s innovative integration of micro insurance and tele-doctor services, which provide critical coverage to meet large unmet demand in emerging markets, and whose value is accentuated further by the current pandemic,” said Dennis Cong, managing partner at CEFIF, in a statement. “We are very happy to have the opportunity to join this meaningful journey, along with the established leading shareholders, and support the company to grow its business and expand its leadership position in its served markets.”

“The market that BIMA is serving is vast and demand for health services is tremendous,” added Stewart Langdon, a partner at LeapFrog Investments. “BIMA’s unique digital capabilities empower emerging market consumers to access many health and insurance services on a single, easy to use platform. That includes protection for millions of first-time buyers of insurance who would otherwise remain unprotected and at risk.”

“We are happy to continue our partnership with BIMA and jointly deliver telemedicine and remote healthcare services in developing markets,” said Nazim Cetin, CEO at Allianz X, in a statement. “We believe the demand for these services will continue to increase and want to manifest BIMA’s leading position in the market by providing support with our experience and network.”

Freshket lands $3 million Series A led by Openspace to streamline Thailand’s food supply chain

Published September 7, 2020

Based in Bangkok, Freshket simplifies the process of getting fresh produce from farms to tables. Launched in 2017, the startup has now raised a $3 million Series A, led by Openspace Ventures.

Other participants included Thai private equity firm ECG-Research; Innospace; and Pamitra Wineka and Ivan Sustiawan, the co-founders of Indonesian agriculture technology startup TaniHub. French-Singaporean food conglomerate Denis Asia Pacific and Thai family office Seedersclub, who made previous investments in Freshket, also returned for the Series A.

Freshket’s technology includes an e-commerce marketplace that connects farmers and food processors to businesses, like restaurants, and consumers in Thailand. The startup was co-founded by chief executive Ponglada Paniangwet and chief marketing officer Tuangploi Chiwalaksanangkoon, who each worked in marketing before launching Freshket three years ago.

Paniangwet told TechCrunch she wanted to enter agritech because her family has worked in the agriculture business for 25 years. “I grew up learning a lot about what worked and didn’t work in the industry,” Paniangwet said. “Overall, the industry is tedious, messy and highly manual.”

Freshket’s goal is to become “an enabler for the entire food supply chain,” she added.

Before Freshket, Paniangwet started a processing center, which sources, cuts and trims fresh produce at wholesale fresh markets before delivering them to restaurants and other customers. She realized technology could be used to simplify the supply chain, increasing farmers’ incomes and the quality of produce received by customers.

There is also ample market opportunity. According to an April 2019 Euromonitor International report, the food service market in Thailand is worth over $7.7 billion in annual purchases, made by more than 200,000 restaurants (link in Thai).

Chiwalaksanangkoon, who was already good friends with Paniangwet, left her position at one of Thailand’s largest banks to co-found Freshket. The company’s platform pull together Thailand’s fragmented produce supply chain by bringing together processing centers and suppliers, and connecting them directly with farmers, who usually rely on middlemen. Freshket also provides its users with data to help them predict supply and demand for their crops.

The expenses of operating a delivery business, especially for perishable goods, can be very high. To stay cost-efficient, Freshket itself doesn’t stock fresh produce. Instead, Freshket tells its network, including farmers, how much product they will need to provide on a daily basis, so they can plan their supply chains.

Paniangwet also said the B2B food delivery business has high average order values, fortifying its unit economics. Freshket’s order, warehouse and logistics management systems are all linked together and “because of that, we are able to control the flow of goods, limit additional and labor costs and keep our overall cost base manageable,” she said.

Freshket’s main rivals in the B2B space are traditional supply chain businesses; in the consumer space, it is up against include grocery delivery startups. It competes with delivery apps by offering lower retail prices, since Freshket is already tapped into a streamlined supply chain. For B2B customers, Freshket’s selling points include more precise delivery, a wider variety of products and produce gradings.

Freshket’s new funding will be used to upgrade its supply management technology. In the future, Paniangwet said the company plans to add more services, like financing, demand forecasting and price matching.

Freshket is among several startups in Southeast Asia markets focused on streamlining the food supply chain in different countries. Others include TaniHub and Eden Farm in Indonesia, Agribuddy in Cambodia and Singapore-based Glife.

This is the third agritech investment Openspace Ventures, which focuses on early-stage companies in Southeast Asia, has made (the other are TaniHub and Singaporean grocery platform RedMart).

In a press statement about the investment, Openspace Ventures founding partner Hian Goh said, “As Openspace Ventures’ second investment in Thailand this year, Freshket reflects our growing conviction in the potential of the Thai market for high quality and innovative startups.”

Meet the TC Top Picks for Disrupt 2020

Published September 6, 2020

We’ve been extremely privileged to witness thousands of early stage startups launch and take flight at Disrupt over the past 10 years, and they just keep getting bettter. You’ll be hard-pressed to find more creative, game-changing startups than the ones that earned our TC Top Picks designation for Disrupt 2020.

The all-virtual nature of this Disrupt meant we received applications from startups around the world. Talk about a tough vetting process! Highly determined and highly caffeinated TechCrunch editors took on the task of narrowing the field to find the best of the best.

The TC Top Picks program showcases outstanding early-stage startups across these categories: Artificial Intelligence/Machine Learning, Biotech/HealthTech, Education/Social Impact, Enterprise/SaaS, Fintech, Mobility, Retail/E-commerce, Robotics/Hardware/IOT and Security/Privacy.

Each TC Top Pick will exhibit in Digital Startup Alley Package and have an exclusive, virtual interview with a TechCrunch writer. We record the interviews and promote them across our social media platforms. It’s terrific exposure and they make a killer long-term marketing tool, so consider applying to the TC Top Pick program next year.

It’s time to announce the Disrupt 2020 TC Top Picks cohort. Peruse these 26 impressive startups, buy your pass to Disrupt, and make a plan to connect with them in Digital Startup Alley. Opportunity knocks!

AI/Machine Learning

iLoF – Intelligent Lab on Fiber

Kings Distributed Systems

Resonance AI

Biotech/HealthTech

Nutrix

Parrots Inc.

SmartTab

Education/Social Impact

Enterprise/SaaS

FinTech

Retail/E-commerce

Mobility

Robotics/Hardware/IOT

Kibus Petcare

LimeLoop

WATTS Battery

Security + Privacy

Allthenticate

Hummingbirds AI

WebTotem

Chief CEO Carolyn Childers, Reboot.io CEO Jerry Colona, Ureeka co-founder Melissa Bradley are coming to Disrupt 2020

Published September 6, 2020

Becoming a successful leader isn’t a one-size-fits-all formula. Each startup — depending on the industry and internal culture — has its own needs.

The hard part is figuring out what leadership style best suits the personality of the CEO or founder as well as the needs and culture of their startup and employees who work there.

This year at TechCrunch’s virtual Disrupt 2020 on September 14-18, we’ll talk to the people who with the expertise and insight to help startup founders and other C-suite level executives — as well as those who someday hope to be in that spot — find the right leadership style for their business. We’re excited to announced that joining us on the Extra Crunch stage to discuss leadership styles is Carolyn Childers, co-founder and CEO of women leadership network Chief, Melissa Bradley co-founder of SMB networking platform Ureeka and Jerry Colonna, co-founder and CEO of executive coaching firm Reboot.io.

The three speakers will dig into what makes a successful leader and how to find the right management style as well as tackle other challenges that founders, CEOs and other executives face while building a company.

Bradley’s company Ureeka gives small business access to the expertise needed to grow their business. She is also founder and managing partner of 1863 Ventures, a business development program, and serves as advisor to the New Voices Foundation and New Voices Fund, as well as the Halcyon Fund. Bradley is the former Co-Chair, National Advisory Council for Innovation and Entrepreneurship and was recently named one of The Most Entrepreneurial Women Investors in 2018.

Chief, which Childers and partner Lindsay Kaplan launched in January 2019, is a private network to drive more women into positions of power and keep them there. The organization is designed for senior women leaders. Prior to founding Chief, Childers was senior vice president of operations at Handy, led the launch of the site Soap.com (Quidsi) and acted as its GM through its acquisition by Amazon. Childers’ work landed her on Inc.’s 2019 Female Founders 100 List.

Colonna’s company Reboot.io specializes in executive coaching and leadership development. Colonna, who has experience as an executive, venture capitalist, journalist and board member, is also the author of ‘REBOOT: Leadership and the Art of Growing Up.’

You may have heard that we’re taking Disrupt virtual this year, a move that lets us make the event accessible to more people than ever before while keeping everyone safe. Disrupt 2020 is scheduled to run from September 14 through September 19. Buy the Disrupt Digital Pro Pass or a Digital Startup Alley Exhibitor Package today and get access to all the interviews on our main Disrupt stage, workshops over on the Extra Crunch Stage where you can get actionable tips as well as CrunchMatch, our free, AI-powered networking platform. As soon as you register for Disrupt, you will have access to CrunchMatch and can start connecting with people now. Use the tool to schedule one-on-one video calls with potential customers and investors or to recruit and interview prospective employees.

We’ll see you there!

How one VC firm wound up with no-code startups as part of its investing thesis

Published September 5, 2020

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading.

Ready? Let’s talk money, startups and spicy IPO rumors.

How one VC firm wound up with no-code startups as part of its investing thesis

Throughout all the chaos of 2020’s economic upheaval in the startup world, I’ve worked to pay more attention to low-code and no-code services. The short gist of chats I’ve had with investors and founders and public company execs in the past few weeks is that market awareness of no-code/low-code terminology is starting to spread more broadly.

Why? Again, summarizing aggressively, it seems that the gap between what different business units need (marketing, say) and what in-house or external engineering teams are capable of providing is widening. This means there is more total pain in the market, hunting for a solution, often with a tooling budget in hand.

Enter no-code and low-code startups, and even big-company services alike that can help non-developers do more without having to beg for engineering inputs.

I spoke with Arun Mathew this week. He’s a partner at Accel, a venture firm that has invested in all sorts of companies that you’ve heard of — including Webflow, which raised a $72 million Series A last August that Mathew led for his firm. (More on the round here, and notes from TechCrunch on Webflow’s early days here, and here, if you are curious.)

More interesting than that single round is how Accel wound up building a thesis around no-code startups. According to Mathew, Accel had made large investments into companies like Qualtrics, for example, when they were already pretty big and had found product-market fit. That same general approach led to the Webflow deal last year.

At the time, Webflow “wasn’t really defining what they were doing as n- code, they just said ‘we have a very simple drag and drop UI, to build websites, and soon full web applications, very simply,’ ” he told TechCrunch. But, according to Mathew, what Webflow was doing “lined up really well” with the “rising movement of no-code.”

From there, Accel “made a couple [more no-code] investments in Europe where [it has] an early-stage team and a growth team,” along with a few more in India. In the investor’s view, some of the investing activity was “thesis driven because we think [no-code is] a really interesting theme,” but some of the deals “happened opportunistically” where Accel had found “really talented founders in the space that we thought was interesting, executing on a vision that we found appealing.”

In the “span of a year, year-and-a-half,” Accel totted up “seven or eight companies in this no-code space,” which over the last five or six quarters became “a real thesis” for the firm, Mathew said. Accel now has “a global team” of around a dozen people “spending a lot of our time in and around no-code” he added.

Apologies for the length there, but what Mathew said makes me feel a bit less behind. After dipping a toe into learning more about no-code services and tooling (and, yes, low-code as well) it felt somewhat like I was playing catch-up. But as I covered that Webflow round and have since started paying more attention to no-code as well, perhaps you and I are right on time.

(We also recently ran an investor survey on the no-code topic, so hit it up if you want more VC scribbles on the topic.)

Market Notes

For Market Notes this week, we have four things. First, riffs from chats with two public company execs about the software market, some public market stuff and then some neat Airbnb spend data by which I am confounded:

I spoke with Apple MDM company Jamf’s CFO Jill Putman this week, after her company reported its first set of earnings as a public company. I wanted to know a bit more about the education market — a hot topic here at TechCrunch, given outsized rounds and huge market demand — and the medical world.
Regarding the software market for education, Putman noted that schools are buying lots of hardware, and that software sales should follow. Our read from that is that the boom in education software is not going to slow for some time as schools work on reopening.
Ditto the medical market, where Jamf has found uptake as hospitals roll out hardware to patients and families thereof to facilitate all sorts of demand that COVID has engendered. (Hardware needs software, enter Jamf!)
Chatting with the CFO our key takeaway was that there are still sectors that could generate a continued COVID tailwind, even if not all Jamf customers fit that bill. For startups that did catch a wave, this is probably good news.
And then there was Yext, a company that helps other companies’ customers find accurate information about them around the Web, and has recently gotten into the search game. Yext launched at a TechCrunch conference back in 2009, which is a neat bit of history. Anyway, Yext is public company now and we wanted to chat about which industries are driving growth for the former startup, and how the general climate for software is for the company, so we got on Zoom with its CEO, Howard Lerman.
So, which sectors are accelerating from Yext’s perspective? Government, education (again), insurance and financial services. Let that guide your take on the health of various startups.
Turning to the business climate, Lerman had some notes: “I will tell you in Q2,” he said, “things came back a bit from Q1.” In what sense? Retention rates, for one, according to the CEO. A return to form is welcome, but Lerman did caution that some companies were slower to “pull the trigger on big deals.”
Lerman also said that his perspective on the macro-climate has bounced back as well from a local-minima set around 30 days ago.

Public company execs are pretty guarded in how they talk because they have to be. But what Putman and Lerman seemed to intimate is that economic damage — provided you are selling to business, and not individuals — seems more contained on a per-sector basis than I would have anticipated. And that there are some good things ahead, at least in a handful of hot sectors.

Opening our aperture a bit, some SaaS companies struggled this week to meet investor expectations, even as more companies added themselves to the IPO queue. It’s going to be very busy for a few quarters. (Speaking of which, you can find the good and bad from the new Sumo IPO filing here.)

The economy is still garbage for many, but at least for companies it’s improving. And on that note, some data regarding Airbnb. According to the folks over at Edison Trends, things are going better for the home-booking site than I would have guessed. Per the group:

Airbnb’s bookings recovery outstripped its traditional rivals, growing “32% week-over-week” from late April into early June.
And, most critically: “Airbnb spending in July was up 22% over the previous July, and spending the week of August 17 was 75% higher than the equivalent week in 2019.”

Wild, right? Perhaps that’s why Airbnb has filed to go public.

Various and Sundry

We’re a tiny bit short on space, so I’ll keep our V&S dose short this week to respect your time. Here’s what I couldn’t not share:

Read this a16z post on the IPO market. It does a great job pulling the Twitter-bullshit out of regular IPO complaints to make some salient points about what is actually good, and bad, about the venerable initial public offering.
And then read this Fred Wilson piece on SPACs, and how he thinks about them today.
Fast made a bunch of noise this week, launching its checkout product after a lot of hype. I thought they were doing something more than a product launch, given the sheer number of tweets I kept seeing. Not sure how I feel about the final thing, but I covered their raise earlier this year, so wanted to flag this all the same.
And, finally, Palantir. In a new S-1 filing, Palantir kinda fessed up to the fact that its structure makes it look like a controlled company. Danny did the digging on the matter here. And then I shouted about it here.
We got data on Boston’s venture capital results in 2020, broken down by month. Hot damn, that wasn’t really what we expected.
The JFrog IPO pricing dance is going to tell us how much profits are worth in the SaaS world.
And Zoom’s insane, bonkers, hell-yeah quarter.

And with that, we are out of room. Hugs, fist bumps and good vibes, and thank you so much for reading this little newsletter on the weekends. It’s a treat to write, and I hope you like it.

Hit me up with notes at alex.wilhelm@techcrunch.com. (I don’t know if you reply to this email if I will get the response. But try it so that we can find out?)

Alex

Grab a Labor Day flash sale pass to Disrupt 2020 and save $100

Published September 5, 2020

No matter how you celebrate Labor Day weekend, we urge you to mask up, keep your distance when grilling burgers and dogs and — most of all — take advantage of our flash sale on Digital Pro passes to Disrupt 2020. Right now, you can save $100 on your pass — whether you observe the holiday or not. We don’t judge.

This sweet deal won’t last long. Buy your Digital Pro pass before Monday, September 7 at 11:59 p.m. (PT) when this sale disappears in, well, a flash.

A Digital Pro pass provides access to everything Disrupt 2020 offers from September 14-18. Our virtual venue makes it easy to explore Digital Startup Alley and discover hundreds of new startups from all around the world. That’s also where you’ll find this year’s TC Top Picks. TechCrunch editors hand selected this cohort of stellar startups from hundreds of applications. These startups span the tech spectrum, and you won’t want to miss an opportunity to connect and see their demos.

Don’t miss the one, the only, the always-epic Startup Battlefield. It’s the OG of pitch competitions, and we have roughly 20 international contenders ready to throw down hard. They’ll pitch and demo to this impressive list of judges until only one team remains to claim bragging rights, the storied Disrupt Cup and $100,000 in equity-free cash.

As always, we bring the top experts, leaders and visionaries to the Disrupt stages, and this year is no different in that respect. And since virtual equals global, we have time zone-friendly programming for Europe and Asia. Here’s a taste of the Disrupt 2020 agenda.

Looking into the Future: Roelof Botha is the U.S. head of Sequoia Capital. It’s a powerful position but it also comes with great responsibility, including to help steer the company’s portfolio companies through the pandemic and its ripple effects. Hear how Botha is advising founders and why, even in trying times, he expects startup founders to reshape the world.

Live Q&A with Mette Lykke: Come to this live Q&A prepared with your questions for Endomondo’s CEO and co-founder (11:00 AM, CET)

Looking Toward the Future of Tech in China and Silicon Valley: Edith Yeung, general partner at Race Capital and the creator of the China Internet Report, has invested in over 50 startups including Lightyear/Stellar, Silk Labs, Chirp and Fleksy. Join us in a conversation about which emerging technology trends in China and the United States will leave an impact (1 p.m. HKT).

We can’t fit five days of Disrupt 2020 into one post. You need to see and experience it for yourself, and this is your chance to save $100 off the price of a Disrupt Digital Pro Pass. The sale ends Monday, September 7 at 11:59 p.m. (PT) — now, go fire up that grill.

Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.

The future of retail and office space is up in the air, and proptech investors are optimistic

Published September 5, 2020

Editor’s note: Get this free weekly recap of TechCrunch news that any startup can use by email every Saturday morning (7 a.m. PT). Subscribe here.

The malls and grocery stores of the 20th century are being converted into industrial conveyor belts of goods and services traveling from the internet to your home. The customer is no longer even allowed inside, as Connie Loizos details this week in a closer look at Amazon and other online-first companies taking over commercial spaces near you.

Americans sort of knew this was coming. Still, the pace at which buildings of all sizes are being either built or converted into e-commerce fulfillment centers — and closer to city centers — has become a bit breathtaking. According to the commercial real estate services firm CBRE, since 2017 at least 59 projects in the U.S. have centered on converting 14 million square feet of retail space into 15.5 million square feet of industrial space, and that trend is “absolutely going to continue,” says Matthew Walaszek, an associate director of industrial and logistics research at CBRE.

Some huge portion of existing retail space is disappearing from public life. Meanwhile, remote work is simultaneously gutting office demand, the even more lucrative part of commercial real estate.

No doubt there will be wonderful new in-real-life experiences that commercial spaces provide for work and any other function. But the sector is taking massive systemic cuts and destroying landlords in one of the historically slowest moving industries in the world. This alone makes it incredibly exciting as a topic for TechCrunch to cover. The impact on startups makes the changes today profound. Will superstar cities and startub hubs retain the pull they’ve had in recent decades? Even if you want to be remote-first, what if you want to get out of the house and your team does too? What if you don’t want to live in a house, actually?

To get more answers at the bleeding edge, Kirsten Korosec and your faithful correspondent did a fresh survey of 9 of the top investors in real estate and proptech (based on our TechCrunch List and other research). Extra Crunch readers can check out what they think will happen to startups soon in the middle of pandemic changes, and where they see proptech going along with the rest of the trends longer term. Here’s one of my favorite excerpts, from Brad Griewe of Fifth Wall:

We don’t believe that abandonment of central business districts will remain an issue following the pandemic. Because the concentration of startup and entrepreneurial activity occurring in cities such as San Francisco and New York is on the decline, we can expect smaller metro areas throughout the U.S. to benefit from a surge in innovation, and the pandemic only stands to accelerate this trend, with many entrepreneurs and knowledge workers having already discovered the benefits of remote work and life outside of high-density areas. While this will not alter our investment strategy, we’re spending time with the office landlords in our network considering alternative spaces for work (e.g., flexible workplace solutions, flex passes, smaller and scattered HQs, cross-purpose retail and dynamic food venues), advances in collaboration technology and the ways in which physical assets can accommodate strong connectivity.

Stay tuned for part two of survey responses coming next week, looking at specific trends that investors are seeing now, like the ongoing growth of coliving.

As markets adjust to Softbank, will we see a slowdown in tech IPOs?

In addition to the numerous other reasons for real and unreal enthusiasm in the stock market, Softbank has been buying up huge shares of tech stocks, and propelling the market further upwards — until this information become clearer in the last few days and the market dropped below what had been surprising peaks. Here’s Alex Wilhelm summing up how the week ended and what’s next:

Tech stocks are taking the worst hits. And inside of tech stocks, SaaS and cloud stocks are enduring even bigger declines. As we’ve noted that some tech shares have taken lumps when their growth has underwhelmed investors, perhaps we’re seeing the entire SaaS sector see their growth expectations slip?

Bulls may say that the above declines are merely a few weeks’ gains and that the accelerated digital transformation is still a key tailwind for SaaS. Bears may say that this is the start of a real correction in the value of tech shares that had become simply too expensive for their fundamentals. What we can say with confidence is that software shares are in a technical correction, and other equities cohorts that we care about are not far behind.

Monday is an off day for stocks. Let’s see what happens Tuesday and if the bleeding stops or simply keeps on letting.

With this update in mind, here’s our ongoing coverage of the busy return (to date) of the IPO market after the pandemic:

The IPO parade continues as Wish files, Bumble targets an eventual debut

What happens when public SaaS companies don’t meet heightened investor expectations?

In amended filing, Palantir admits it won’t have independent board governance for up to a year

An IPO expert bats back at the narrative that traditional IPOs are for ‘morons’

Frugal startups should pay attention to how JFrog’s IPO prices

Everybody is racing to an IPO — even Laird Hamilton’s young ‘superfood’ company

Zoom’s Q2 report details some of the most extraordinary growth I’ve ever seen

The good and the less-good from Sumo Logic’s updated IPO filing

Image: TechCrunch

Snapchat a winner so far from TikTok ban threat

As the September 15 deadline looms for Bytedance, and the likelihood of either a full shutdown or hollow acquisition seem to grow, TikTok users are moving. Even if you’re not working on a consumer startup, the future may be getting rewritten now for your marketing plans on hot social platforms. Nearly every company these days needs to have a public brand presence and a growing number sell direct, after all. So get ready for… Snapchat.

Our resident app expert, Sarah Perez, writes that Snap’s app has a massive 28.5 million new app installs over August, a 29% year-over-year growth rate nearing or beating its past records, and well above July’s (pre-ban announcement) 9%. What about other platforms? It’s harder to track the impact on larger social sites like Facebook and Instagram, as she notes. But my guess is you’ll probably still be buying those Facebook ads well into the future, and probably for more videos too.

The bans probably aren’t done, either. India, which was first to ban TikTok, has added dozens more apps from China, as those two countries continue an armed face-off in real life. Manish Singh, our startup reporter in India, has been following the story closely, and writes for Extra Crunch that so far, TikTok replacements have not been emerging so clearly.

(Photo by Julien Mattia/Anadolu Agency via Getty Images)

Investing in startup hubs around the world

Speaking of the uncertain future of startup hub cities versus the world, the EC team took a different angle to the question this week, by considering the question of how geography-focused investors remain by today? Here’s a blisteringly spicy take from resident former VC Danny Crichton:

It should never have mattered before, of course, but then, sometimes ~~idiots~~ Harvard Business grads need a global pandemic to prove that they can actually do their jobs in novel ways. The arbitrage that existed for geographical-focused venture funds is gone, and there is now functionally a nationwide market for VC investments compared to the archipelago of local regions that existed before.

There is still room for the absolute earliest capital in these regions, accelerators and pre-PMF funds that will invest in founders with no idea for a startup yet. For all other funds larger than a few million though, the transition is clear: they will likely build upon a successful portfolio company or an area of interest and become vertical-focused. The knowledge arbitrage for an industry vertical is much more defensible than knowledge that the 279 should be avoided at certain times of the day in downtown Pittsburgh or that Tomukun is the best Korean BBQ in Ann Arbor.

Editor-at-large Mike Butcher has also been getting at this question through a series of Extra Crunch surveys with investors across key European startup cities. This week he talked to dozens of investors across Paris and Berlin. The unsurprising theme is that basically everyone is investing across the Continent already, and maybe well beyond. At the same time, many investors in each city expressed a strong belief in the particular city where they are located. Maybe the future unicorns coming out of Europe won’t have massive headquarters in their home cities, but these companies will still be arising from the ether of local people who work in technology — so it won’t end up feeling that different? Here’s how Berlin-based Mathias Ockenfels of Vienna-headquartered Speedinvest explains it:

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
The Network Effects team works from Speedinvest offices in Vienna, London, Berlin and Munich. We’ve made about 75% of our investments within these hubs, and more than half specifically in London and Berlin. While a local focus is very important to us, we do not shy away from making investments in what other investors may consider “fringe” locations, such as Utah in the U.S., Helsinki or Warsaw.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not)? Which founders?
Berlin continues to be a major hub for fintechs — despite not having a strong finance ecosystem. It also has a strong base of consumer tech companies, such as Zalando, Lieferando/TakeAway and Delivery Hero, but has seen a surge in more B2B-oriented startups in recent years.

I believe the startup ecosystem in Berlin will continue to grow and become even more diverse, as it attracts great talent from across the world and becomes a go-to “playground” for entrepreneurs. As the first batch of successful B2B founders are exiting their companies and inspiring other entrepreneurs, I expect more opportunities in the B2B space in the future.

Madrid and Barcelona-based investors, Mike is heading your way next — tell him your views on your cities and your own plans via this link.

Around TechCrunch

Triller CEO Mike Lu to talk taking on TikTok at Disrupt 2020

Fabletics’ Adam Goldenberg and Kevin Hart to talk D2C at Disrupt 2020

Laura Deming, Frederik Groce, Amish Jani, Jessica Verrilli and Vanessa Larco are coming to Disrupt

How to craft the right pitch deck for your company at Disrupt 2020

Submit your pitch deck to Disrupt 2020’s Pitch Deck Teardown

Learn how to raise your first dollars at Disrupt 2020

Some of the brightest minds in Europe are joining us at Disrupt

Welcome to the most important panel on product development in the history of Disrupt

Across the week

TechCrunch

On the matter of who was really behind @VCBrags

Banks aren’t as stupid as enterprise AI and fintech entrepreneurs think

There’s a growing movement where startup founders look to exit to community

The startup world needs a ‘Black Minds Matter’ awakening

Building paths to funding for Black female founders

Dear Sophie: Can we sponsor an H-1B university researcher for an EB-1B green card?

Extra Crunch

Edtech startups find demand from an unlikely customer: Public schools

Your first sales hire should be a missionary, not a mercenary

Jeff Lawson on API startups, picking a market and getting dissed by VCs

What does GPT-3 mean for the future of the legal profession?

Media Roundup: Patreon joins unicorn club, Facebook could ban news in Australia, more

Venture capital LPs are the missing link to solving Silicon Valley’s diversity problem

#EquityPod: Edtech is the new SaaS

From Alex:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

The whole crew was back, with Natasha Mascarenhas and Danny Crichton and myself chattering, with Chris Gates behind the scenes making it all work. An extra shout-out to Natasha this week as we spent a lot of time talking about edtech, a category that she spearheads for us and has brought to the show. It’s a big deal!

We’re on YouTube now, don’t forget, and with that, let’s get into the news:

Climax Foods raised $7.5 million to help fuel its work to develop alt-foods that are not animal-based. The Equity crew votes that this is a tasty deal. And, Capchase has raised $4.6 million to help cash-out SaaS contracts ahead of their real revenue accrual. Our read is that more financing options for SaaS companies will lead to lower costs of capital for those startups that want it. And, the Envision Accelerator made it through batch one and is on to batch two.
Then we chatted about edtech, with Natasha talking us through Owl Ventures raising huge new funds, Course Hero extending its Series B, Juni hitting $10 million ARR and raising about as much and Unacademy raising tons of cash from Vision Fund 2.
Next up, Patreon also got a new check, which means that it eventually has to go public at some point, given that it is now a fancy unicorn.
And speaking of IPOs, Bumble is thinking about going public in 2021, Wish has filed, albeit privately, and GoodRX is going public as well. And it makes money.
What else? This a16z post on IPOs that we fangirl/fanboy’d over, as it is good. And we forgot to mention this Fred Wilson post, but it is also good.

And with that, we are nearly at the weekend, which is a long one thanks to a holiday, so expect Equity Monday to be, in fact, Equity Tuesday next week. Hugs and good vibes from the Equity Crew!

Equity drops every Monday at 7:00 a.m. PT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.