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Daily Crunch: Behold, The TechCrunch List
TechCrunch launches a major new initiative, Amazon tests a smart shopping cart and ICE backs down from its controversial student visa rule change. Here’s your Daily Crunch for July 14, 2020.
The big story: Behold, The TechCrunch List
Back in June we published a story with the rather grandiose headline “How we’re rebuilding the VC industry. It was, in effect, announcing The TechCrunch List, which has been a months-long project to bring more transparency to who actually writes first checks for startups.
Today, we published the list — or at least the first version. I’ll let Managing Editor Danny Crichton explain:
The TechCrunch List is a verified, curated list of investors who have demonstrated a commitment to first checks and leading rounds from seed through growth, organized by market vertical …
Ultimately, The TechCrunch List is a living and breathing directory of the most active VCs who are willing to lead in the industry. We intend for the List to be regularly updated as founders give us more recommendations and investors change their tastes and their portfolios.
You can read about the 11 VCs who got the most enthusiastic recommendations from founders (Extra Crunch membership required) and browse the full list.
The tech giants
Amazon to test Dash Cart, a smart grocery shopping cart that sees what you buy — The cart, which will identify and charge you for items placed inside its basket, will first be tested in the Amazon grocery store opening in Woodland Hills, California.
UK U-turns on Huawei and 5G, giving operators until 2027 to rip out existing kit — The U.K. government is forbidding telcos from buying 5G equipment from Huawei and ZTE, and must remove any equipment from those companies by 2027.
Google Play Pass expands outside the US, adds more titles and annual pricing — Play Pass is the Android alternative to Apple Arcade, offering subscription access to a variety of apps and games.
Startups, funding and venture capital
Identity platform Auth0 raises $120M Series F funding round at $1.92B valuation — Developers can just add a few lines of code to connect applications to Auth0’s identity management service.
Blackstone’s growth investors lead a $200 million investment into Oatly, the oat-milk juggernaut — Celebrity investors include Oprah Winfrey, Roc Nation, Natalie Portman and former Starbucks CEO Howard Schultz. (I’ve tried the milk. It was fine.)
Everything you could possibly want to learn about fundraising will be covered at TC Early Stage — There will be in-depth sessions, as well as fireside chats with Figma’s Dylan Field, Minted.com’s Mariam Naficy, Sequoia’s James Buckhouse and Jess Lee and Greylock’s Reid Hoffman and Sarah Guo.
Advice and analysis from Extra Crunch
Investors are browsing for Chromium startups — Lucas Matney offers an overview of interesting browser startups building on top of Google’s Chromium project.
The IPO market stays hot, as nCino prices above range and Jamf targets a ~$2B valuation — Alex Wilhelm has the latest on IPO pricing.
(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
After colleges sue, ICE backs down from student visa rule change — A dozen universities and colleges threatened legal action against the administration’s order to revoke visas for international students studying at U.S. colleges that plan to provide their classes exclusively online in the fall.
NBCUniversal’s streaming service Peacock officially launches tomorrow — The service has already been available to parent company Comcast’s Xfinity X1 and Flex cable customers since April, but tomorrow marks the launch to a general audience, with anyone in the United States able to sign up and access Peacock on a range of devices (but not Roku or Amazon Fire TV).
Hand-crank a level of Super Mario Bros. on Lego’s new 2,646-piece NES kit — This is beautiful but I would definitely lose some of those pieces.
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.
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BlueOcean uses automation to deliver affordable brand audits in seven days
BlueOcean is a new startup offering companies a relatively fast and affordable way to see how their brands are performing and what they can do to improve.
CEO Grant McDougall and COO/President Liza Nebel (the pair founded BlueOcean with Chief Data Scientist Matthew Gross) told me they’ve been developing the technology for two years. And although the startup is only officially launching now, it has already worked with prominent brands like Microsoft, Panda Express and Pabst Blue Ribbon.
BlueOcean is focused specifically on the world of brand audits, which are basically detailed analyses of the aspects of a brand that are and aren’t working — and according to Nebel (whose experience includes working on brand and digital strategy at Ogilvy), a single audit can cost brands millions of dollars, often resulting in reports “that aren’t even actionable.”
With BlueOcean, on the other hand, a brand provides only two things — their website and a list of their competitors. Then they get their brand audit one week later, for just $17,000, including recommendations for how to improve.
To do this, the company says it’s applying an “automation-first approach.” McDougall said BlueOcean is pulling from hundreds of different data sources, which will vary from industry to industry, and applying algorithms to understand things like, “What’s the right taxonomy? How do we acquire that data?”
BlueOcean founders Grant McDougall and Liza Nebel (Image Credits: BlueOcean)
He added, “Strategically, we tend to move up in the organization,” giving both marketing teams and C-level executives the advice they need.
For example, Nebel said that one of BlueOcean’s clients include a large alcohol holding company, which recently launched a line of hard seltzer under an existing alcohol brand. The startup’s brand audit recommended that the company (which Nebel declined to identify) launch a separate hard seltzer brand instead — and now, the company will be launching three different brands.
Nebel also walked me through what she called the “five-minute version” of a brand audit for TechCrunch, which looked at our performance in terms of potential customers, positioning, messaging, offerings and existing customers. Ultimately, BlueOcean gave us a “moderate” score of 97 (but hey, we scored well on being “memorable” and “inspiring”) and recommended steps like publishing a more “steady drumbeat” of content on social media and improving our app experience.
“BlueOcean has become a great addition to further enable us to sharpen our ability to monitor, understand and act through the lens of brand across all of our commercial offerings,” said Microsoft’s director of brand strategy Tim Hoppin in a statement. “We’re excited to work with BlueOcean and use their tools and expertise to strengthen our relationship with the millions of global customers we connect with daily.”
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Recurrency is taking on giants like SAP with a modern twist on ERP
Recurrency, a member of the Summer 2020 Y Combinator cohort, was started by a 21 year old just out of college. He decided to take on a highly established market that is led by giants like SAP, Infor, Oracle and Microsoft, but instead of taking a highly complex area of enterprise software in one big bite, he is starting by helping wholesale businesses.
Sole founder and company CEO Sam Oshay just graduated from the University of Pennsylvania with a dual degree that straddled engineering and business, before joining the summer batch. Oshay is bringing a modern twist to ERP by using machine learning to drive more data-driven decision making.
“What makes us different from other ERPs like SAP, Infor and Epicor is that we can tell the user something that they don’t already know.” He says these traditional ERPs are basically data entry systems. For example, you could enter a pricing list, but you can’t do anything with it in terms of predictions.
“We can scan historical data and make pricing recommendations and predictions. So we are an ERP that not only does data analysis, but also imports external data and matches it to internal data to make recommendations and predictions,” Oshay explained.
While he doesn’t expect to remain confined to just the wholesale side of the business, it makes sense that he started with it because his family has a history of running these kinds of businesses. In fact, his grandfather immigrated to the U.S. after World War II and started a hardware wholesale business that his uncle still runs today. His dad started his own business selling wholesale shipping supplies, and he grew up in the family business, giving him some insight that most recent college grads probably wouldn’t have.
“I learned about the wholesale business at a very deep level. And what I observed is that so many of the issues with my dad’s business came down to issues with his ERP system. It occurred to me that if someone were to build an ERP extension or a better ERP, they could unlock so much of the value that is currently locked inside these legacy systems,” he said.
So he did what good entrepreneurs do, and began building it. For starters, his system plugs into legacy systems like SAP or NetSuite, but the plan is to build a better ERP, one step at a time. For now, it’s about wholesale, but he has a much broader vision for his company.
He originally applied to YC during the Fall 2019 semester of his junior year, and was admitted to the winter batch, but deferred to the Summer 2020 group to complete his studies. He spent his remaining time at UPenn sprinting to early graduation, taking 10 classes to come close to finishing his studies (with just a dissertation standing between him and his degree).
With this batch being delivered remotely, he says that the YC team has taken that into account and is still offering a meaningful experience for the summer group. “All of the events that YC would normally be doing are still happening, just remotely. And to my knowledge, some of the events we’re doing are designed specifically for this weird set of circumstances. The YC team has put quite a bit of thought into making this batch meaningful and I think they’ve succeeded,” he said.
While the pandemic has created new challenges for an early-stage business, he says that in some ways it’s helped him focus better. Instead of going out with friends, he’s home with his head down working on his company with little distraction.
As you would expect, it’s early days for the product, but he has three customers who are operational and two more in the implementation phase. He also has two employees so far, a front end and back end engineer.
For now, he’s going to continue building his product and his business, and he sees the pandemic as a time when businesses might be more open to changing a system like a legacy ERP. “If they want to try something new, and you can make it easier for them to try that, I’ve found that’s a place where you can make a sale,” he said.
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Macro just raised $4.3M to make your never-ending Zoom calls more useful
In this pandemic world, in-person meetings are a thing of the past. Most meetings these days are done via video conference, and no company has capitalized on the shift quite like Zoom.
Macro, a new FirstMark-backed company, is looking to capitalize on the capitalization. To Capitalism!
Sorry. Let’s get back on track. Macro is a native app that employs the Zoom SDK to add depth and analysis to your daily work meetings.
There are two modes. The first is essentially focused on collaboration, which turns the usual Zoom meeting into a light overlay, where folks are shown in small, circular bubbles at the top of the screen. This mode is to be used when folks are working on the same project, such as a wireframe or a collaborative document. The UI is meant to kind of fade into the background, allowing users to click on taps or objects behind other attendees’ bubbles.
The other mode is an Arena or Stadium mode, which is meant for hands-on meetings and presentations. It has two distinct features. The first is an Airtime feature, which shows how much different participants have ‘had the floor’ for the past five minutes, thirty minutes, or in total during the meeting. The second is a text-input system on the right side of the UI that lets people enter Questions, Takeaways, Action Items and Insights from the call.
Macro automatically adds that text to a Google Doc, and formats it into something instantly shareable.
There is no extra hassle involved in getting Macro up and running. When a user installs Macro on their computer, they’re instantly loaded into Macro each time they click a Zoom link, whether it’s in an email, a calendar invite, or in Slack.
Macro cofounders Ankith Harathi and John Keck explained to TechCrunch that this isn’t your usual enterprise play. The product is free to use and, with the Google Doc export, is still useful even as a single-player product. The Google Doc is auto-formatted with Macro messaging, explaining that it was compiled by the company with a link to the product.
In other words, Harathi and Keck want to see individuals within organizations get Macro for themselves and let the product grow organically within an organization, rather than trying to sell to large teams right off the bat.
“A lot of collaborative productivity SaaS applications need your whole team to switch over to get any value out of them,” said Harathi. “That’s a pretty big barrier, especially since so many new products are coming out and teams are constantly switching and that creates a lot of noise. So our plan was to ensure one person can use this and get value out of it, and nobody else is affected. They get the better interface and other team members will want to switch over without any requirement to do so.”
This is possible in large part to the cost of the Zoom SDK, which is $0. The heavy lifting of audio and video is handled by Zoom, as is the high compute cost. This means that Macro can offer its product for free at a relatively low cost to the company as it tries to grow.
Of course, there is some risk involved with building on an existing platform. Namely, one Zoom platform change could wreak havoc on Macro’s product or model. However, the team has plans to expand beyond Zoom to other video conferencing platforms like Google, BlueJeans, WebEx, etc. Roelof Botha told TechCrunch back in May that businesses built on other platforms have a much greater chance of success when there is platform across that sector, as there certainly is here.
And there seems to be some competition for Macro in particular — for one, Microsoft Teams just added some new features to its video conferencing UI to relieve brain fatigue and Hello is looking to offer app-free video chat via browser.
Macro is also looking to add additional functionality to the platform, such as the ability to integrate an agenda into the meeting and break up the accompanying Google doc by agenda item.
The company has raised a total of $4.8 million since launch, including a new $4.3 million seed round from FirstMark Capital, General Catalyst and Underscore VC. Other investors include NextView Ventures, Jason Warner (CTO GitHub), Julie Zhuo (former VP Design Facebook), Harry Stebbings (Founder/Host of 20minVC), Adam Nash (Dropbox, Wealthfront, LinkedIn), Clark Valberg (CEO Invision), among others.
Macro has more than 25,000 users and has been a part of 50,000 meetings to date.
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NS1 nets $40M ‘true coronavirus fundraise’ amidst surging customer demand
Apparently, the internet is still popular.
With the novel coronavirus marooning people at home for work and play, those “tubes” carrying our data back and forth have become ever more important to our livelihoods. Yet while we often as consumers think of the internet as what we buy from a service provider like Spectrum or TechCrunch’s parent company Verizon, the reality is that businesses need key network services like DNS and IP Address Management in order to optimize their performance and costs.
That’s where New York City-based NS1 has done particularly well. My colleague Ron Miller first covered the company and its founding story for us two years ago, as part of our in-depth look at the New York City enterprise software ecosystem. Fast forward two years, and NS1 couldn’t be doing better: in just the first quarter of this year, new customer bookings were up 159% year over year according to the company, and it currently serves 600 customers.
That traction in a critical infrastructure segment of the market attracted the attention of even more growth capital. Today, the company announced that Energy Impact Partners, which has traditionally invested in sustainable energy startups but has recently expanded into software and internet services, is leading a $40 million Series D round into the startup, bringing its total fundraising to date to $125 million. The round was led by Shawn Cherian, a partner at EIP who just joined the firm at the beginning of June (nothing like getting a deal done your first day on the job).
Kris Beevers, cofounder and CEO of NS1, said that COVID-19 has had a huge impact on the startup’s growth the past few months. “For example, [a] large software customer of ours [said] that our number two KPI for our coronavirus task force is network performance and saturation as managed by NS1.” Customers have made network management significantly higher priority since degradations in latency and reliability can dramatically limit a service’s viability for stay-at-home workers and consumers.
NS1’s Founding Team
“The quip that I have used a few times recently is digital transformation initiatives have compressed from five or ten years down to months or a year at this point. Everybody’s just having to accelerate all of these things,” Beevers said.
The company has doubled down on its key tools like DNS and IP management, but it has also launched new features using feedback from customers. “For example, we launched a VPN steering capability to help our customers optimize their VPN footprints because obviously those suddenly are more important than they’ve ever been,” he said. Virtual Private Networks (VPNs) allow employees to login to their company’s network as if they were physically present in the office.
While NS1 had money in the bank and increasing appetite from customers, the company was also starting a fundraise in the middle of a global pandemic. Beevers said that it was hard at first to get momentum. “April was a dead zone,” he said. “All the VCs were sort of turtle up.”
The tide began to turn by early May as VCs got a handle on their portfolios and started to survey where the opportunities were in the market given the lessons of the early days of COVID-19. “We actually started to get a huge amount of inbound interest in early May timeframe,” he said.
“Call it like a true coronavirus fundraise,” Beevers explained. It was “end to end like less than a month getting to know [Cherian] to term sheet, and all virtual. Partner meeting was all virtual, diligence all virtual. Not a single in-person interaction in the whole fundraising process, and that was the case with everybody else who was involved in the round too, so all the folks that didn’t in the end write the winning term sheet.”
What made Cherian stand out was Energy Impact Partners’ portfolio, which touches on energy, industry and IoT — sectors that are increasingly being digitized and need the kind of internet infrastructure services that NS1 provides. Also, Cherian led a round into Packet, which is a fellow NYC enterprise company that sold to Equinox for more than $300 million. Packet’s founder Zac Smith and Beevers worked together at Voxel and are part of the so-called “Voxel mafia” of infrastructure engineers in Manhattan.
With the new funding, NS1 intends to continue to expand its traction in the network layer while also doubling down on new markets like IoT.
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App Annie launches ad analytics product Ascend
App Annie is building on last year’s acquisition of analytics company Libring with the launch of a new version of Libring, rebranded as App Annie Ascend.
CEO Ted Krantz told me that while Ascend will be sold to existing App Annie customers, the real hope is to reach “a dramatically different market” as App Annie moves beyond just providing app market data by offering advertising analytics as well — particularly for game publishers and other companies on the supply side of the ad industry.
Krantz argued that with mobile platforms and browsers adding more limitations to user tracking (most recently with Apple’s announcement that it will give users the ability to decline app ad tracking), “the room is going to get pretty dark” for advertisers — creating an opportunity for App Annie’s approach of combining broader market data with a publisher’s own first party data.
To achieve this, Ascend offers what Krantz said are “hundreds of connectors” to pull data from the different platforms like AdColony, Unity and Chartboost, allowing customers to see these data sets “side by side.” Krantz emphasized that this data is very much for the customer’s own use and will be “quarantined” from App Annie’s larger market data, at least initially.
“Over time, we have the ability to open that up [for] benchmarking data,” he said, adding that this approach is part of what makes Ascend unique: “You’ve got to have that benchmarking data from your peer group. Without the market data, you can’t be certain you’re making the right calls.”
Companies already using Ascend include Reddit and Jam City.
”Ascend takes away the burden of integrating, maintaining and constantly updating dozens of APIs, allowing us to focus on what matters: achieving our KPIs and improving our campaigns,” said Reddit’s director of marketing Spiros Christakopoulos in a statement. “ Thanks to the critical insights Ascend provides, via its well designed reporting tools, it has become an essential part of our marketing analytics infrastructure.”
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BigCommerce files to go public
As expected, BigCommerce has filed to go public. The Austin, Texas, based e-commerce company raised over $200 million while private. The company’s IPO filing lists a $100 million placeholder figure for its IPO raise, giving us directional indication that this IPO will be in the lower, and not upper, nine-figure range.
BigCommerce, similar to public market darling Shopify, provides e-commerce services to merchants. Given how enamored public investors are with its Canadian rival, the timing of BigCommerce’s debut is utterly unsurprising and is prima facie intelligent.
Of course, we’ll know more when it prices. Today, however, the timing appears fortuitous.
The numbers
BigCommerce is a SaaS business, meaning that it sells a digital service for a recurring payment. For more on how it derives revenue from customers, head here. For our purposes what matters is that public investors will classify it along with a very popular — today’s trading notwithstanding — market segment.
Starting with broad strokes, here’s how the company performed in 2019 compared to 2018, and Q1 2020 in contrast to Q1 2019:
- In 2019, BigCommerce’s revenue grew to $112.1 million, a gain of around 22% from its 2018 result of $91.9 million.
- In Q1 2020, BigCommerce’s revenue grew to $33.2 million, up around 30% from its Q1 2019 result of $25.6 million.
BigCommerce didn’t grow too quickly in 2019, but its Q1 2020 expansion pace is much better. BigCommerce will file an S-1/A with more information in Q2 2020, we expect; it can’t go public without sharing more about its recent financial performance.
If the company’s revenue growth acceleration continues in the most recent period — bearing in mind that e-commerce as a segment has proven attractive to many businesses during the COVID-19 pandemic — BigCommerce’s IPO timing would appear even more intelligent than it did at first blush. Investors love growth acceleration.
Moving from revenue growth to revenue quality, BigCommerce’s Q1 2020 gross margins came in at 77.5%, a solid SaaS result. In Q1 2019 its gross margin was 76.8%, a slightly worse figure. Still, improving gross margins are popular as they indicate that future cash flows will grow at a faster clip than revenues, all else held equal.
In 2018 BigCommerce lost $38.9 million on a GAAP basis. Its net loss expanded modestly to $42.6 million in 2020, a larger dollar figure in gross terms, but a slimmer percent of its yearly top line. You can read those results however you’d like. In Q1 2020, however, things got better, as the company’s GAAP net loss fell to $4 million from its year-ago Q1 result of $10.5 million.
The BigCommerce big commerce business is growing more slowly than I had anticipated, but its overall operational health is better than I expected.
A few other notes, before we tear deeper into its S-1 filing tomorrow morning. BigCommerce’s adjusted EBITDA, a metric that gives a distorted, partial view of a company’s profitability, improved along similar lines to its net income, falling from -$9.2 million in Q1 2019 to -$5.7 million in Q1 2020.
The company’s cash flow is, akin to its adjusted EBITDA, worse than its net loss figures would have you guess. BigCommerce’s operating activities consumed $10 million in Q1 2020, an improvement from its Q1 2019 operating cash burn of $11.1 million.
The company is further in debt than many SaaS companies, but not so far as to be a problem. BigCommerce’s long-term debt, net of its current portion, was just over $69 million at the end of Q1 2020. It’s not a nice figure, per se, but it is one small enough that a good IPO haul could sharply reduce while still providing good amounts of working capital for the business.
Investors listed in its IPO document include Revolution, General Catalyst, GGV Capital, and SoftBank.
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Mighty Health created a wellness app with older adults top of mind
Virtual classes might make it easier to work out anywhere, anytime, but not for anyone. Mainstream fitness tech often targets the young and fit, in advertisements and cardio-heavy exercises. It effectively excludes aging adults from participating.
This gap between mainstream fitness and elders is where Mighty Health, a Y Combinator graduate, comes in.
Mighty Health has created a nutrition and fitness wellness app that is tailored to older adults who might have achy hips or joint problems. Today, the San Francisco-based startup has announced it raised $2.8 million in funding by Y Combinator, NextView Ventures, RRE Ventures, Liquid2 Ventures, Soma Capital and more.
Founder and CEO James Li is the child of immigrants, a detail he says helped him lean into entrepreneurship. He had the idea for Mighty Health after his father was rushed to the hospital for emergency open-heart surgery.
“Growing up, we can often think of our parents as invincible — they look after you and take care of you, and you usually don’t worry too much about them,” Li said. His dad survived the surgery, and Li thought about the evolving health needs and limitations of folks over 50 years old. He teamed up with co-founder Dr. Bernard Chang, the youngest-ever ED doctor to receive a top-tier NIH grant and the vice chair of research at Columbia University Medical Center, to create Mighty Health.
Mighty Health’s product is focused on three things: live coaching; content focused on nutrition, preventative checkups and workouts; and celebrations that let family members tune into their loved ones’ achievements.
The app has inclusivity built into its functionality. Everyday, a user logs in and gets a set of three to five tasks to complete, distributed among nutrition, exercise and workouts. The workouts are pre-recorded videos with trainers that have focused on the over-50 population. Think indoor cardio sets focused on being kinder to joints or lower her impacts.
Image Credits: Mighty Health
One customer, Elizabeth, is a 56-year-old mother who joined Mighty Health after suffering a cardiac incident. The app got her to start walking 9,000 steps a day, lose weigh, lower cholesterol and, best of all, discover a love for a vegetable she had recently written off: brussels sprouts.
Mighty Health’s other core focus, beyond fitness, is nutrition. The app pairs users with a coach to help them create healthy habits around nutrition and lifestyle. The coaching is done through text message. Li says this was intentional because in the early days of Mighty Health, he saw that coaching in-app was difficult for users to navigate.
Image Credits: Mighty Health
“You have to meet them in the middle where they are,” Li said. The live coaching is also met with phone calls, although 90% of coach interactions are text-message based.
The nutrition program also accounts for a diverse user base. Mighty Health chose not to offer or push recipes upon members, unlike a lot of other applications, because all countries and cultures might not find generic recipes accessible.
“Instead, we focus on the ingredient level,” he said. “We send them ingredients that they can piece together however they like at home in the way that they cook their cultural meals.”
The company offers a free seven-day trail, followed by a membership fee of $20 per month. It’s also having discussions with a number of health insurers to offer Mighty Health as a benefit.
With the new capital, the startup hired a few engineers and a designer to build out product integrations with fitness trackers, plus add new content. For now, Li sees his father’s progress with pride.
“Though I’m sure he sometimes thinks I just went from nagging him directly to nagging him through my product, he’s been eating healthier and exercising nearly every day,” Li said. So far, his father has lost 25 pounds.
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Former Tinder VP Jeff Morris Jr. opens up Product Club, an accelerator meant to stay small and focused
Startup accelerators tend to grow the size of each new class over time, as more of their portfolio companies find exits, their network of mentors expands and they find new ways to scale things up. The most recognized example of this is almost certainly Y Combinator, which started with a group of just eight companies in 2005 and has since grown to over 150 companies per recent batch.
VC and former Tinder VP Jeff Morris Jr. is taking a different approach with his new accelerator, Product Club: start small and stay small.
The first Product Club batch will be made up of just three companies. While Morris tells me this might grow a bit over time, he doesn’t see it expanding drastically. “I imagine it being up to 10,” he says. “But no more.”
“I’ve spoken to a lot of people who’ve built accelerators and have said ‘There’s no way you’ll find a winner with class sizes that small,’ ” Morris tells me. “But I’m kind of okay with that if it means we can be more hands-on.”
Product Club will invest $100,000 in each company, taking 5% equity in return. In addition to investment, the program will provide one-on-one mentorship with a different mentor each week, with each session “100% focused on product development.”
Though new, Product Club has already built up a pretty notable roster of mentors, including:
- Danny Trinh (head of Design at Zenly)
- Merci Victoria Grace (investor at Lightspeed, formerly head of Growth at Slack)
- Scott Belsky (founder of Behance, CPO at Adobe)
- Sriram Krishnan (investor, formerly led consumer product teams at Twitter)
- Manik Gupta (investor, former Chief Product Officer at Uber)
- Brian Norgard (investor, former CPO at Tinder)
- Jules Walter (product monetization at Slack, co-founder of the BlackPM network)
- Josh Elman (board partner at Greylock, investor, former VP of Product at Robinhood)
They’ve also partnered with a handful of product designers who will provide hands-on help to the companies on things like branding and UX.
Morris tells me that he intends for Product Club to be a good bit more transparent than other accelerators traditionally have been. Rather than keeping things largely under wraps until Demo Day, he says, they’re “just going to tell everybody from the start who’s in each batch,” with the intent of doing things like founder office hours with users, with product development and changes happening mostly out in the open “almost like a change log.” They’ll have a Demo Day for investors, but it’ll be more of an overview and less of a reveal.
Product Club will operate as part of Chapter One, the early-stage seed fund that Morris founded in 2017. Prior to becoming an investor, Morris led the revenue team at Tinder, where he built things like Tinder Gold — the dating app’s subscription tier that lets you see who “liked” you without you first having to swipe. He was also the director of Product Growth at Lambda School for a few months prior to parting ways with the company to focus on investing full time.
The program’s first session (the Summer 2020 batch) is scheduled to start on August 3, running for a total of 10 weeks. They’re accepting applications immediately, with the deadline to apply currently set for July 19. The program will be entirely remote, so applications are open globally.
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SaaS and cloud stocks finally give back ground
After a heated run, SaaS and cloud stocks dipped sharply during regular trading on Monday.
According to the category-tracking Bessemer cloud index, public SaaS and cloud stocks dropped around 6.5% today, a material blow to the value of some of the world’s most highly valued companies, measured by sector-averaged revenue multiples.
After recovering all their COVID-19-related losses earlier this year, SaaS and cloud stocks kept on rising, reaching new all-time highs with regularity. But earnings season is starting, meaning that the value of modern software and digital infrastructure companies will soon be tested against Q2 results — results that were recorded fully during the global pandemic.
To hear bulls — both private and public — tell the story, COVID-19 and its ensuing workplace disruptions have provided software companies with a huge boon. Namely, that customers current and future have radically changed their procurement models and will need more software solutions, more quickly, than they previously anticipated. (Stay tuned to The Exchange for more on this later in the week.)
The thought that there are more and better customers coming for SaaS and cloud companies made them relative safe havens in otherwise turbulent public markets; while other industries had uncertain demand curves, the thinking went, software companies were being pushed forward by an accelerating secular shift.
Today, however, the broader markets slipped from early-day positions of strength while SaaS and cloud shares dropped sharply. Prior patterns in investor behavior didn’t hold up, in other words.
Why today brought such sharp selling is not clear. No more, really, than reasons for prior days’ gains were clear at the time. Profit taking? Rotation to other sectors? Whatever you want to ascribe to the day’s declines you can make stick.
For our purposes here at TechCrunch, the dropping share prices of public software companies serves as an anti-signal for late-stage valuations in SaaS startups, and a general headwind toward venture investors making more early-stage bets in the sector. Of course, one day doesn’t change the game. But several days of sharp losses could begin to change sentiment, and days when shares of modern software companies drop by 6% are few and far between.
Earnings are next, but for many companies in the SaaS and cloud world, reporting their results just got easier. When expectations drop, everyone loses a bit of worry, right?
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