Startups
Auto Added by WPeMatico
Spectro Cloud launches with $7.5M investment to help developers build Kubernetes clusters their way
By now we know that Kubernetes is a wildly popular container management platform, but if you want to use it, you pretty much have to choose between having someone manage it for you or building it yourself. Spectro Cloud emerged from stealth today with a $7.5 million investment to give you a third choice that falls somewhere in the middle.
The funding was led by Sierra Ventures with participation from Boldstart Ventures.
Ed Sim, founder at Boldstart, says he liked the team and the tech. “Spectro Cloud is solving a massive pain that every large enterprise is struggling with: how to roll your own Kubernetes service on a managed platform without being beholden to any large vendor,” Sim told TechCrunch.
Spectro co-founder and CEO Tenry Fu says an enterprise should not have to compromise between control and ease of use. “We want to be the first company that brings an easy-to-use managed Kubernetes experience to the enterprise, but also gives them the flexibility to define their own Kubernetes infrastructure stacks at scale,” Fu explained.
Fu says that the stack, in this instance, consists of the base operating system to the Kubernetes version to the storage, networking and other layers like security, logging, monitoring, load balancing or anything that’s infrastructure related around Kubernetes.
“Within an organization in the enterprise you can serve the needs of your various groups, down to pretty granular level with respect to what’s in your infrastructure stack, and then you don’t have to worry about lifecycle management,” he explained. That’s because Spectro Cloud handles that for you, while still giving you that control.
That gives enterprise developers greater deployment flexibility and the ability to move between cloud infrastructure providers more easily, something that is top of mind today as companies don’t want to be locked into a single vendor.
“There’s an infrastructure control continuum that forces enterprises into trade-offs against these needs. At one extreme, the managed offerings offer a kind of nirvana around ease of use, but it’s at the expense of control over things like the cloud that you’re on or when you adopt new ecosystem options like updated versions of Kubernetes.”
Fu and his co-founders have a deep background in this, having previously been part of CliQr, a company that helped customers manage applications across hybrid cloud environments. They sold that company to Cisco in 2016 and began developing Spectro Cloud last spring.
It’s early days, but the company has been working with 16 beta customers.
Powered by WPeMatico
Addapptation snares $1.3M seed to build a better UX for Salesforce
Addapptation, a startup that wants to build a practical design layer on top of Salesforce and other enterprise tools, announced a $1.3 million seed investment today.
2048 Ventures led the round with participation from East Coast Angels, The Millworks II Fund and additional angel investors from New Hampshire, where the firm is located
Co-founder Sumner Vanderhoof says the startup’s goal is to build a user experience platform for enterprise tools like Salesforce . “Our goal is to help make simple, easy to use Salesforce.com solutions built on the addapptation UX platform.
“At the end of the day, we’re really helping transform the way companies work, making their employees more efficient, making the job they do easier and more consistent, so they have a bigger impact on the companies that they work for,” Vanderhoof told TechCrunch.
He says they do this by looking at the company workflow and what issue the customer is trying to solve — such as a problem converting deals through the sales cycle. They will then help build tools and an interface to make it easier to pinpoint this information with the goal of being able to reuse whatever solutions they create for other customers.
He says the platform is template-driven and designed to quickly go from idea to solution. A typical solution takes no longer than two weeks to build and implement. Once a customer is using addapptation, employees can log into the addapptation platform or it can be a layer built into Salesforce providing a more guided experience.
The company has built around 40 plug-ins for the platform, including a heat map that identifies where sales is likely to find the best opportunities to close a deal. The solutions they build are designed to work online or on mobile devices as needed.
Photo: addapptation
Vanderhoof says that the company has a good relationship with Salesforce, and it doesn’t compete directly with the company. “Their main focus is providing tools for a wide audience. Ours is extending the platform beyond what it can do,” he said.
The two founders, Vanderhoof and his wife Carla, took three years building the platform, essentially bootstrapping before taking today’s funding. The company has 15 employees in its Exeter, NH, headquarters and has 20 customers including Comcast and Ingram Micro.
Powered by WPeMatico
Torch & Everwise merge into affordable exec coaching for all
While companies might pay for a CEO coach, lower level employees often get stuck with lame skill-building worksheets or no mentorship at all. Not only does that limit their potential productivity, but it also makes them feel stagnated and undervalued, leading them to jump ship.
Therapy… err… executive coaching is finally becoming destigmatized as entrepreneurs and their teams realize that everyone can’t be crushing it all the time. Building a business is hard. It’s okay to cry sometimes. But the best thing you can do is be vulnerable and seek help.
Torch emerged from stealth last year with $18 million in funding to teach empathy to founders and C-suite execs. Since 2013, Everwise has raised $26 million from Sequoia and others for its peer-to-peer mentorship marketplace that makes workplace guidance accessible to rank-and-file staffers. Tomorrow they’ll official announce their merger under the Torch name to become a full-stack career coach for every level of employee.
“As human beings, we face huge existential challenges in the form of pandemics, climate change, the threats coming down the pipe from automation and AI” says Torch co-founder and CEO Cameron Yarbrough. “We need to create leaders at every single level of an organization and ignite these people with tools and human support in order to level up in the world.”
Startup acquisitions and mergers can often be train wrecks because companies with different values but overlapping products are jammed together. But apparently it’s gone quite smoothly since the products are so complementary, with all 70 employees across the two companies keeping their jobs. “Everwise is much more bottom up whereas Torch is about the upper levels, and it just sort of made sense” says Garry Tan, partner and co-founder of Initialized Capital that funded Torch’s Series A and is also a client of its coaching.
How does each work? Torch goes deep, conducting extensive 360-interviews with an executive as well as their reports, employees, and peers to assess their empathy, communication, vision, conflict resolution, and collaboration. Clients’ executives do extensive 360-interviews. It establishes quantifiable goals that executives work towards through video call sessions with Torch’s coaches. They learn about setting healthy workplace boundaries, staying calm amidst arguments, motivating staff without seeming preachy, and managing their own ego.
This coaching can be exceedingly valuable for the leaders setting a company’s strategy and tone. But the one-on-one sessions are typically too expensive to buy for all levels of employees. That’s where Everwise comes in.
Everwise goes wide, offering a marketplace with 6,000 mentors across different job levels and roles that can provide more affordable personal guidance or group sessions with 10 employees all learning from each other. It also provides a mentorship platform where bigger companies can let their more senior staffers teach junior employees exactly what it takes to succeed. That’s all stitched together with a curated and personalized curriculum of online learning materials. Meanwhile, a company’s HR team can track everyone’s progress and performance through its Academy Builder dashboard.
“We know Gen Z has grown up with mentors by their side from SAT prep” says Torch CMO Cari Jacobs. Everwise lets them stay mentored, even at early stages of their professional life. “As they advance through their career, they might notch up to more executive private coaching.” Post-merger, Torch can keep them sane and ambitious throughout the journey.
“It really allows us to move up market without sacrificing all the traction we’ve built working with startups and mid-market companies,” Yarbrough tells me. Clients have included Reddit and ZenDesk, but also giants like Best Buy, Genentech, and T-Mobile.
The question is whether Everwise’s materials are engaging enough to not become just another employee handbook buried on an HR site that no one ever reads. Otherwise, it could just feel like bloat tacked onto Torch. Meanwhile, scaling up to bigger clients pits Torch against long-standing pillars of the executive coaching industry like Aon and Korn Ferry that have been around for decades and have billions in revenue. Meanwhile, new mental health and coaching platforms are emerging like BetterUp and Sounding Board.
But the market is massive since so few people get great coaching right now. “No one goes to work and is like, ‘Man, I wish my boss was less mindful,’” Tan jokes. When Yarbrough was his coach, the Torch CEO taught the investor that while many startup employees might think they thrive on flexibility, “people really want high love and high structure.” In essence, that’s what Torch is trying to deliver — a sense of emotional camaraderie mixed with a prod in the direction of fulfilling their destiny.
Powered by WPeMatico
Hashicorp soars above $5B valuation in new $175M venture round
The rise of the cloud over the past decade has forced software developers and DevOps engineers to completely rearchitect the modern web application, ensuring scalability, performance, and security. That’s a really painful proposition when done manually, which is where Hashicorp comes in to play. The company’s suite of products helps everyone in the tech workforce from IT admins to software developers operate in the cloud (mostly) effortlessly and natively.
The company’s products have long garnered rave reviews from technical staffs, and now the company is looking at a brand new massive valuation.
The SF-based startup announced today that it has raised $175 million in Series E financing from Franklin Templeton Investments at a scorching $5.1 billion valuation. For context, when we last covered the company back in late 2018, its valuation was only a “paltry” $1.9 billion following a $100 million round led by growth investor IVP.
The company in its release today touted its success in doubling revenues and customers every year for four straight years as the key reason behind the flush valuation. The company is making a (not so) subtle point that David McJannet, who joined the company as CEO in mid-2016 following a stint as an EIR at Greylock, has seen some success in his new role.
Hashicorp CEO David McJannet. Photo via Hashicorp
The company, founded by Mitchell Hashimoto and Armon Dadgar in 2012, is one of the major pioneers in helping companies build high-quality infrastructure that’s a mix of multi-cloud providers, private cloud, and even legacy systems.
It’s most well-known product is Terraform, which allows developers to write repeatable rules around enterprise infrastructure rather than a patchwork of different scripts that might not work as its writers intended. The idea is that with a consistent framework, Hashicorp’s product can help companies reduce costs (by protecting against, say, over-provisioning of resources) while also helping to balance scale and performance. The company’s other products include Consul around network automation, Vault for security, and Nomad for application deployment.
Hashicorp touches on a bunch of competitive products, but its cohesive set of tools and strong outreach to the developer community has set itself apart from the competition in recent years.
Franklin Templeton is a fairly late stage investor that has funded such enterprise companies as Cloudflare, which went public last year, logs management platform SumoLogic, and cybersecurity business Tanium, all according to Crunchbase.
With a hefty $5.1 billion valuation, the company narrowly missed the catastrophic decline of SaaS stocks over the past few weeks, which have been buffeted by the rapidly spreading global pandemic. But with a new war chest and a focus on a popular and growing enterprise market, the company seems poised to continue its growth.
Powered by WPeMatico
TransferWise partners with Alipay for international money transfers
TransferWise, the London-headquartered international money transfer service most recently valued by investors at $3.5 billion, has partnered with China’s Aliplay for international transfers.
The launch enables TransferWise’s now 7 million-plus users to be able to send Chinese yuan from 17 currencies to users of Alipay, which serves more than 1.2 billion people worldwide including via its local e-wallet partners.
Promising “instant” money transfers — under 20 seconds, apparently — TransferWise users simply need the recipient’s name and Alipay ID to initiate a money transfer. The money will then be sent to the bank account linked to the recipient’s Alipay profile.
It could be a potentially smart bit of business by TransferWise, which has sometimes struggled to secure the kind of partnerships that can accelerate its customer base and increase transaction volume. According to a 2019 report, the fintech is citing, China is projected to be one of the top remittance recipient countries in the world, with £54bn expected to be sent back home by Chinese expats and migrants living abroad.
“The partnership is a major expansion for TransferWise as it reaches a new, additional market of people managing their money via the Alipay platform,” says the company.
With that said, Alipay is the second meaningful partnership that TransferWise has announced in the last few months. In November, it joined forces with GoCardless, the London fintech that lets customers pay via recurring bank payments (known as Direct Debits in the U.K.). GoCardless is used by more than 50,000 businesses worldwide, spanning multinational corporations to SMBs, and the partnership sees its own FX functionality powered by TransferWise.
Powered by WPeMatico
To make locks touchless, Proxy bluetooth ID raises $42M
We need to go hands-off in the age of coronavirus. That means touching fewer doors, elevators, and sign-in iPads. But once a building is using phone-based identity for security, there’s opportunities to speed up access to WIFI networks and printers, or personalize conference rooms and video call set-ups. Keyless office entry startup Proxy wants to deliver all of this while keeping your phone in your pocket.
“The door is just a starting point” Proxy co-founder and CEO Denis Mars tells me. “We’re . . . empowering a movement to take back control of our privacy, our sense of self, our humanity, our individuality.”
With the contagion concerns and security risks of people rubbing dirty, cloneable, stealable key cards against their office doors, investors see big potential in Proxy. Today it’s announcing here a $42 million Series B led by Scale Venture Partners with participation from former funders Kleiner Perkins and Y Combinator plus new additions Silicon Valley Bank and West Ventures.
The raise brings Proxy to $58.8 million in funding so it can staff up at offices across the world and speed up deployments of its door sensor hardware and access control software. “We’re spread thin” says Mars. “Part of this funding is to try to grow up as quickly as possible and not grow for growth sake. We’re making sure we’re secure, meeting all the privacy requirements.”
How does Proxy work? Employers get their staff to install an app that knows their identity within the company, including when and where they’re allowed entry. Buildings install Proxy’s signal readers, which can either integrate with existing access control software or the startup’s own management dashboard.
Employees can then open doors, elevators, turnstiles, and garages with a Bluetooth low-energy signal without having to even take their phone out. Bosses can also opt to require a facial scan or fingerprint or a wave of the phone near the sensor. Existing keycards and fobs still work with Proxy’s Pro readers. Proxy costs about $300 to $350 per reader, plus installation and a $30 per month per reader subscription to its management software.
Now the company is expanding access to devices once you’re already in the building thanks to its SDK and APIs. Wifi router-makers are starting to pre-provision their hardware to automatically connect the phones of employees or temporarily allow registered guests with Proxy installed — no need for passwords written on whiteboards. Its new Nano sensors can also be hooked up to printers and vending machines to verify access or charge expense accounts. And food delivery companies can add the Proxy SDK so couriers can be granted the momentary ability to open doors when they arrive with lunch.
Rather than just indiscriminately beaming your identity out into the world, Proxy uses tokenized credentials so only its sensors know who you are. Users have to approve of new networks’ ability to read their tokens, Proxy has SOC-2 security audit certification, and complies with GDPR. “We feel very strongly about where the biometrics are stored . . . they should stay on your phone” says Mars.
Yet despite integrating with the technology for two-factor entry unlocks, Mars says “We’re not big fans of facial recognition. You don’t want every random company having your face in their database. The face becomes the password you were supposed to change every 30 days.”
Keeping your data and identity safe as we see an explosion of Internet Of Things devices was actually the impetus for starting Proxy. Mars had sold his teleconferencing startup Bitplay to Jive Software where he met his eventually co-founder Simon Ratner, who’d joined after his video annotation startup Omnisio was acquired by YouTube. Mars was frustrated about every IoT lightbulb and appliance wanting him to download an app, set up a profile, and give it his data.
The duo founded Proxy in 2016 as a universal identity signal. Today it has over 60 customers. While other apps want you to constantly open them, Proxy’s purpose is to work silently in the background and make people more productive. “We believe the most important technologies in the world don’t seek your attention. They work for you, they empower you, and they get out of the way so you can focus your attention on what matters most — living your life.”
Now Proxy could actually help save lives. “The nature of our product is contactless interactions in commercial buildings and workplaces so there’s a bit of an unintended benefit that helps prevent the spread of the virus” Mars explains. “We have seen an uptick in customers starting to set doors and other experiences in longer-range hands-free mode so that users can walk up to an automated door and not have to touch the handles or badge/reader every time.”
The big challenge facing Proxy is maintaining security and dependability since it’s a mission-critical business. A bug or outage could potentially lock employees out of their workplace (when they eventually return from quarantine). It will have to keep hackers out of employee files. Proxy needs to stay ahead of access control incumbents like ADT and HID as well as smaller direct competitors like $10 million-funded Nexkey and $28 million-funded Openpath.
Luckily, Proxy has found a powerful growth flywheel. First an office in a big building gets set up, then they convince the real estate manager to equip the lobby’s turnstiles and elevators with Proxy. Other tenants in the building start to use it, so they buy Proxy for their office. Then they get their offices in other cities on board…starting the flywheel again. That’s why Proxy is doubling down on sales to commercial real estate owners.
The question is when Proxy will start knocking on consumers’ doors. While leveling up into the enterprise access control software business might be tough for home smartlock companies like August, Proxy could go down market if it built more physical lock hardware. Perhaps we’ll start to get smart homes that know who’s home, and stop having to carry pointy metal sticks in our pockets.
Powered by WPeMatico
YC graduate Genecis Bioindustries turns food waste into compostable plastics
Unfortunately, the world doesn’t have a constant quantity of problems, and while governments and most private businesses are focused on tackling the ongoing COVID-19 pandemic, companies like Genecis Bioindustries are working on technologies to solve another major problem: climate change.
For over a decade, sustainability advocates and entrepreneurs have been searching for a way to transform the plastics industry.
While plastics are a building block for modern industry (historically, there’s been a great future in it), they’re also a byproduct of the highly polluting petrochemical business; produce 300 million tons of waste per year (for single use plastic); and production could throw off 1.34 gigatons per year of greenhouse gas emissions over the next decade, according to the NRDC.
That’s why entrepreneurs and investors have sunk hundreds of millions of dollars over the years into companies like NatureWorks, which has raised more than $150 million since its launch in 1997.
Genecis Bioindustries uses bacteria to make compostable bioplastics from food waste. The polymer that the company makes is called PHA, and it works similarly to most plastics. For waste managers, the company can take existing waste off of their hands and plastic manufacturers get a sustainable, biodegradable resin to use. The company already has partnerships with companies like the food services company Sodexo, and has been tapped as a participant in the Innovation Challenge with Novo Nordisk.
Based in Scarborough, Canada, just outside Toronto, Genecis has been developing its technology commercially since 2017 and has filed for at least one patent in the U.S. last year.
The technology at the core of the company’s new PHA manufacturing process is a new species of bacteria that the company evolved. The bacteria converts carbon-based organic waste into organic acids, according to chief executive Luna Yu.
The two-step process is based on two groups of specialized bacteria used throughout the process: The first group digests food waste, producing short-chain carbons as volatile fatty acids, acting as the precursor feed stock for the second group, which eats these carbons and converts them into bioplastics.
Yu and her team initially collected samples by scouring municipal waste facilities to identify where organic material was decomposing really quickly (talk about turning trash into treasure).
“We really try to look at anywhere that has a high turnover rate,” said Yu. That meant going online and searching through databases to look at soil degradation rates in different areas and going to waste facilities to find new strains of bacteria.
Genecis already has a 4,000-square-foot pilot facility where it’s manufacturing roughly one kilogram of PHA per week, and has partnered with the National Research Council of Canada to build out the next scale of its manufacturing plant. That plant, funded with a $1.6 million grant from the Canadian government, will produce between 50 and 70 kilograms of PHA on a weekly basis and process more than two tons of organic waste, Yu said.
By contrast, large scale commercial plastic facilities make between 50 to 100 tons of similar material per day. Yu says that her company can reach those production numbers in a commercial facility.
Not only can they make the compostable plastic, reducing the plastic waste in the environment, but by using food waste as a feed stock Yu said her company can reduce greenhouse gas emissions by 80%.
And its target price point for PHA is roughly 30-40% less than what’s currently available on the market.
For investors who remember the clean technology revolution of the mid-to-late 2000s, this may all sound very familiar, but Yu said there’s a difference between what happened (and failed to happen) over a decade ago.
“Back in the 2000s most companies were using sugars as a feed stock and they were encountering bottlenecks to increase the yield,” she said. The companies also didn’t have access to computational biology and the necessary tools to make true engineering of the microbes work, Yu said.
“A lot of these bottlenecks came because companies were solely focused on engineering bacteria to increase yield,” Yu said. New tools enabling programmable biology mean bacteria can do more to reduce the cost — eliminating more of the mechanical processing steps and letting the biological processes do more of the work, she said.
Yu concedes that the company’s compostable plastics won’t be cost-competitive with commodity petroleum plastics, especially as the price of oil drops to unprecedented lows, but believes there’s still a market in premium foods, 3D filaments and the medical industry.
“The biggest opportunity we saw is the organic acids we could get from food waste that we could turn into specialty chemicals much more effectively and cheaper than using corn or sugarcane,” Yu said. “At the end of the day, our vision is to create sustainable materials using sustainable feed stock.”
Powered by WPeMatico
This startup got a meeting with Mark Suster by getting clever with Google ads
Startups have done some wild things to get the attention of VCs. In fact, Instacart founder Apoorva Mehta sent YC partner (at the time) Garry Tan a six-pack of beer through the service after missing the deadline for Y Combinator by two months.
Yesterday, the ingenuity of startups struck again.
Tadabase.io, an enterprise startup that offers no-code tools to help businesses automate their processes, has had an ad running that was… well, hyper targeted.
ProductHunt founder and WeekendFund investor Ryan Hoover discovered the ad and shared it on Twitter.
I google’d @msuster’s LinkedIn and this is what I found
pic.twitter.com/ANMZ2dg6AD
— Ryan Hoover (@rrhoover) March 13, 2020
Hoover told TechCrunch he was Googling Mark Suster to facilitate an introduction between Suster and one of Hoover’s portfolio companies. Instead, he found a Google ad directed squarely at Suster from Tadabase.io.
“Mark Suster, you haven’t invested in nocode” read the paid listing. “Therefore, we put this ad here to get your attention. If you’re not Mark, please don’t click here and save us some money.”
I reached out to Suster, managing partner at UpFront Ventures, to see what he thought of the ad. He told me he “loved it” and has already contacted the CEO to set up a call for next week.
Whether this clever Google ad will result in an actual investment is yet to be determined. Also unclear: will Ryan Hoover get in on the deal?
I reached out to Tadabase founder and CEO Moe Levine via email to ask about the ad, how they went about targeting, and how he feels about his upcoming phone call next week. He hasn’t responded yet. I’ll update if/when he does.
Powered by WPeMatico
Three travel startups tell us how they’re responding to the coronavirus crisis
With the globalized world going into partial or complete lock down over the Covid-19 pandemic, startups in the travel sector are facing a huge stress test and immediate disruption to business as usual as public health concern spirals and entire populations are encouraged or even forced not to travel.
The traditional travel hub of Europe has emerged as a secondary hotspot for the virus, after SARS-CoV-2 first emerged in China late last year.
Italy, France and Spain have all reported thousands of cases apiece, with the latter declaring a state of high alert today. Earlier this week Italy — the hardest hit EU country so far — imposed nationwide travel restrictions, with confirmed cases passing 12,000 as of yesterday. Several other EU countries have also implemented varying quarantine measures. More lockdowns are expected in the coming weeks.
In a further development, US President Trump sent shockwaves through EU institutions earlier this week by unilaterally announcing a 30-day ban on travel from most countries in the bloc.
Today the European Commission came out with its own response — laying out a $37BN package of measures intended to mitigate the socio-economic impact of Covid-19, including bringing forward €1BN out of the EU budget to act as a guarantee to the European Investment Fund to encourage banks to lend to SMEs in affected sectors.
“This is expected to mobilise €8BN of working capital financing and support at least 100,000 small and medium-sized businesses and small mid-cap companies in the EU,” the Commission said, suggesting banks will be in a position to act on the liquidity injection from April 2020.
Of course travel startups with investor capital in the bank aren’t waiting around to react to the coronavirus crisis. They’re already ripping up 2020 roadmaps and thinking again — swapping out marketing plans and doubling down on product and engineering, according to three businesses we spoke to.
We asked three European travel startups how they’re being impacted by the coronavirus crisis and what steps they’re taking to manage a demand crunch combined with ongoing — and potentially long term — uncertainty in the sector.
Berlin-based GetYourGuide, which has built a marketplace selling sightseeing tours and other travel experiences, and last year bagged a $484M Series E round; Omio, another Berlin-based startup that’s built a multi-modal travel aggregator and booking platform, backed by nearly $300M to-date; and Barcelona-based TravelPerk, a fast-growing business travel booking platform that’s pulled in more than $130M in VC funding as it shakes up a legacy space.
“Demand is dropping off a cliff”
All three told us they’ve seen a major drop in bookings combined with a rise in customer service demand as people with existing travel plans seek to get in touch to cancel or reschedule trips.
As of this week GetYourGuide said bookings for new experiences are down nearly 50% globally vs its demand forecasts for the past two weeks. While customer service enquiries have tripled in the past two weeks, and its global cancellation rate has ticked up by 20%.
Those that are still planning trips are doing so closer to home or with less advanced notice than normal — with bookings made within three days of the start time up 15%.
“It’s the biggest nuclear winter I’ve ever seen in online travel,” co-founder and CEO Johannes Reck told TechCrunch. “Everyone goes and prepares for Easter break and that is not at all happening. All of the European countries seem to be in lockdown.
“None of our Italian customers are booking, the German customers have degraded rapidly. France and Spain have recently followed. The UK has been more stable but seems to follow the same course now. And the US since [Trump announced the travel ban] as well… The US travel ban is now sealing it. So this will be a year of extreme turbulence of the travel market.”
For Omio it’s a similar story — with bookings over the last two weeks down between 30-40% overall across all markets, according to founder and CEO Naren Shaam, and a big spike in demand for customer service as worried customers look to cancel trips.
“The whole company is actually stepping in to help customer service because we’ve seen a spike in cancellations,” he said. “In general the impact is heavy. Demand is dropping off a cliff but it’s not as bad as we thought — but it is definitely heavy.”
It’s seeing similar changes in booking behavior. “Advanced booking has come down drastically,” he noted. “But we see a spike in short term last minute trips when people feel comfortable on the region — so that’s gone up a lot.”
TravelPerk told us it’s currently dealing with a drop in business globally of around 50%. Though co-founder and CEO Avi Meir is braced for further drops if more of the West goes into lockdown forcing more companies to scrap business trips.
“You would expect that it dropped to zero but right now people are still travelling,” he told us. “Everybody who can avoid traveling right now probably should and does but you have many people who just critically have to keep travelling — so we see around 50% drop right now.”
“Regionally of course as expected APACS has been the most affected in terms of our volumes — Japan, South Korea, Hong Kong and China down north of 95%. 100% depending on which day you’re looking and what country you’re looking at,” he added. “China is actually starting to open up a little bit but at the peak we looked at 100% — nothing was being booked in terms of destination.
“In terms of the more core markets for us, Italy is 84% down right now… You also see significant impact in Belgium, Netherlands, Holland, Sweden.
“France, Spain and UK are down year-on-year but not significantly yet. In the Western part of the continent and the UK people are still traveling relatively more than other countries.”
Demand for TravelPerk’s customer support has also never been so busy, he also said.
“We actually are switching some of our sales team to customer support in the coming weeks just to support the volume of tickets,” he noted. “We’re very proud that our metrics are not declining — meaning specifically service level; how fast we solve cases; our ‘C-sats’, customer satisfaction. The metrics we really care about. Are people happy and are we solving their cases fast?
“We’re keeping them although, so far, the past weeks have been the busiest in customer support since we started the company via number of tickets.”
TravelPerk has also seen radical changes to the usual booking window. “Most of the trips we see right now is somebody booking for tomorrow or for two days from now because they for know they can travel or have certainty they can travel,” said Meir. “Which is unusual compared to normal times. In normal times people book 20-21 days ahead on average. So you have a huge decrease in the booking window.”
While of its flagship products is actually seeing high demand in the current crisis situation, per Meir — given it’s designed to offer resilience against unforeseen changes to plans.
“We have this product, FlexiPerk, which allows the users to cancel or change for any reason and if they do they get at least 90% of the money back. FlexiPerk has been really, really on fire over the past few weeks — both in terms of users, those who are already on FlexiPerk and also new sign-ups which is actually driving a lot of our growth in terms of signs ups.
“It gives people the certainty — or it reduces the uncertainty — about the mid- term or long term future. So if you are planning a trip in September or in October it’s reasonable to expect to be able to travel but you don’t really know. And FlexiPerk really plugs this gap because it allows you to book now for September knowing that if you have to change your plans you can do so without losing the money.”
“Right now most of the airlines have changed their cancelation policies so we are able to get full refunds in many cases,” he added.
All three European businesses said the changes in demand had hit extremely rapidly.
“Up until maybe 2-3 weeks ago we were still growing,” Meir told us. “Because most of our travellers — or at least the headquarters of the travellers — are concentrated in Europe and North America so the impact was kind of delayed.”
“Since we’re more a global business we already started noticing Chinese outbound dropping — because we have an office in China — it hit us already around January, February. So we already saw that in our Chinese outbound dropping by 90+%,” added Omio’s Shaam.
GetYourGuide’s Reck said it was also forewarned of the looming crunch via their Asian business.
“We had already seen a significant decline in our Asian business,” he told us. “That was still so small and the overall growth in Europe and the US was so strong that it was negligible at that point in time — but it gave us a glimpse.”
Two of its investors, Japan-based Softbank and Singapore-based Temasek, also put GetYourGuide on early “red alert” over the novel coronavirus because other portfolio companies were suffering heavy impacts.
“We had two weeks to prepare which I guess put us ahead of the curve for most other US and European companies,” said Reck. “Then when corona hit, at the end of February, we’ve seen a very rapid decline and now the current global travel demand is roughly 60% down from where it should be at this point in time so we are massively depressed.”
The change is more marked for being set against “a tremendous start to the year” before the virus hit Europe — Reck dubs it “the best time in history of the company” — with January and February seeing it close to doubling business.
Rerouting resources in a travel crunch
So how are the three founders coping with a sudden revenue crunch combined with spiralling global uncertainty falling over their sector?
All three described being relatively well cushioned — on account of recent financing.
“We are in an incredible position because we’ve raised this massive round last year and we haven’t spent a lot of it,” said GetYourGuide’s Reck. “We’ve been very frugal with it. In the early months after the fund raise SoftBank was very angry with us that we were so disciplined and we weren’t investing more in growth. Now they’re, I think, very, very happy — the new role model for the portfolio.
“The good news is that as we come from a position of strength and we will survive and prevail for sure. That’s the positive news.”
With plenty of capital still in the bank the team has been able to quickly redirect resources on servicing near-term customer needs during the travel crunch.
“The way we’re seeing this internally is with every major crisis comes major opportunity. At this point in time we believe there’s incredible opportunity to make a real different for our customers, our suppliers and our ecosystem broadly,” Reck added. “For instance, for customers we have pushed immediately after we saw the news coming full flexibility on bookings and cancelations.
“Customers can now cancel all of the experiences 24 hours in advance, no questions asked, for a refund. If you go under 24 hours you actually get a gift coupon so you can rebook of the full value in the future. And if you’re affected by a lockdown you will get the full amount back no questions asked.”
“We’ve been doing mass cancellations for Italy. We’re just doing it for France. We’re doing it for the US because of the travel ban now. We refund our customers fully, no questions asked,” he added.
Reck also said it’s doing what it can to support suppliers who will also clearly be struggling from the same demand crunch.
“Wherever there’s an opening where we see demand popping up again we make sure it gets as quickly as possible to our suppliers,” he told us, saying its doubling down on its GetYourGuide Originals in-house short tours product. “We want to be a good partner. We don’t go in now and start to negotiate on commission rates or anything like that.”
Another area it’s spending on right now is localization — in order that it can support suppliers by being able to cater to demand cropping up off the beaten track.
“We’re translating our offering into more languages,” he noted. “We’re making sure the offering itself has better terms for the customers in terms of cancelation policies and we’re educating the suppliers around that — and that will ultimately drive their bookings. So we are doing quite a bit in order to make sure that they survive and that they get the revenue through our platform that they deserve.”
Zooming out, Reck told us he’s taking “a really long term view” on travel.
“The travel landscape through this crisis will inevitably change,” he predicted. “When the corona crisis is over online travel will look very different and just survival is going to be an incredible competitive advantage vs the rest. We believe that a lot of players will go bust. And we see that already as we speak so over the next couple of days you’ll see major layoffs, you’ll see restructurings, you’ll see people scramble.”
“That’s what we always said when we raised the SoftBank round. Ironically I never knew that long term view would actually mean that we freeze down for a year… but if you look at online travel over the course of history and you look at the big dips — like 9/11 was a massive dip and the following recession; the financial crisis was a massive dip — you see overall travel is a long term trend. And I think if you look at a ten year timespan even this corona crisis will just be a small dip in a growth curve.
“So I’m very long on travel over a longer period of time. And that’s where we’re doubling down. So we’re rather taking the opportunity now to really focus on product and engineering — and that’s something really liberating to me. Of not really having a 2020 budget anymore.
“The conversion gains on the margin won’t matter. So we can really double down on significantly improving the product for our customer and that means giving a better search and discovery experience, more personalized, curating more GetYourGuide Originals with our suppliers… So that when we come out of this crisis we come out with a better technology product and a much better supply base.”
“I think, as I said, just surviving will be a competitive advantage. Surviving with a better product and better supply will be magic — and that’s really what we’re betting on.”
Omio, meanwhile, is also in a position to look beyond the current crisis in demand.
“We are lucky to be well funded and have raised a lot of capital,” said Shaam. “We’re lucky to have very long term investors when you think of Kinnevik and Temasek — both of them…. almost like a mutual fund so basically long term capital.”
Nonetheless, the business has responded to plunging demand by trimming variable costs — while also viewing the demand crunch as an opportunity to rechannel investment into the core product.
“We’re cutting all variable costs, managing the costs better, taking precautions — using the crisis as an opportunity… fixing all the systems we could never invest in in scale because every month there’s a metric to meet. And really then rearchitecting for scalability,” he told us.
“Because the main thing is if you think of travel, human inherent desire to travel is never going to go down. Right now what we’re doing is bottling that in for 3-4 months but you’ve got to open the lid at some point — I hope — and when that comes out the demand will grow even faster. And we want to be ready for that. So we’re using this, call it, crisis as an opportunity to really build scalability. All the underlying architecture, campaign structures, whatever data flows were not perfect before, product messaging etc.
“The cash position of course is something we have an eye on, as stewards of capital, but it’s more so that we’re also using this as an opportunity to really think long term and how we actually benefit.”
Duty of care
As a crisis response, Shaam said Omio has put together three internal task forces to respond to immediate challenges — one focused on supporting its customers; another on its own employees; and a third concentrating on business stability and figuring out where to invest and where to pull back during unusual times.
On the customer support side Omio’s suppliers define cancellation policies so there’s only so much it can do but Shaam said it’s been putting out messaging to help users — creating a spreadsheet of cancellation policies listing companies that give refunds and those that don’t, and publishing updates on things like cancelled flights.
On the employee support side there’s a mix of well-being and practical issues being tackled.
“How can we protect safety regulations? Trigger points. We have clear guidelines… today we triggered that we work from home for 15 days,” he said. “How to protect mental health so nobody goes crazy sitting at home all day? Connectivity, all of that stuff. What if you have school shut down — how do you balance children at home alone with working at the same time? All of this stuff.
“There’s a lot of practical questions that come up — like the design team need to take their chunky monitors home so they can actually design. All of these things are being tackled by that task force.”
“As a startup you can actually bring these together very quickly,” Shaam added. “Today we had a small team — that team is now quite large, 10+ people going at all three workstreams. So let’s see how we survive.
“Again, there’s a lot of uncertainty but I feel that the best thing I can do is bring stability, bring confidence into the organization.”
TravelPerk’s Meir said the business is also most focused on responding to immediate challenges and needs — including keeping up with the demand it’s seeing.
Even though bookings are down new sign ups are up, he told us.
“The focus right now as an organization is really on the day by day — we need to make sure we keep providing the service,” he said. “We keep actually selling and a lot of companies are signing up. Sign ups are actually dramatically up. People are signing up they’re just obviously not travelling so we have a lot of short term priorities that are extremely important.
“Maybe if we hadn’t raised a C round last year — $100+ million — we would be in a different situation but right now we are fortunate to be in this position so we have to focus on short term priorities without knowing where it’s going to end.”
The company is also using a moment of plunging sales to direct attention on product. And is hiring more engineers to be able to accelerate product dev — including to build crisis response features.
“I’m sure we’re not unique in the tech world but we’re actually investing more in the product. So we keep hiring — we actually increased our hiring plan for product and engineering. And so far we’re not reducing our burn let’s say but we’re shifting that towards really what matters for our customers.
“We’re already ahead of the curve in product but this is a really good opportunity to keep pushing on our strengths and another one we’re doing is adjusting the business and the business model as well.”
Meir gave the example of a premium concierge service which it’s just decided to provide for free for all its users for the next three months. “Although it’s going to increase dramatically our costs in customer care it’s the right thing to do for our customers,” he said of that particular coronavirus triggered business adjustment.
“You’ll see some really cool stuff coming out,” he added. “The product team, together with the commercial team is changing roadmaps. In a way we threw the roadmap of 2020 to the bin and we started working on a weekly basis.”
Another example he gave is a new feature it’s launched in partnership with medical and travel security company, International SoS, to help companies not only track where in the world their employees are but ensure they have the medical or other crisis expertise support available should the worst happen off-site.
“It’s the best company in the world for duty of care,” said Meir. “It’s one of those topics that in normal times people don’t really like to think about it — but this is probably the highest request we were getting in the past 2-3 weeks from customers.”
“We went from idea to releasing it in less than 5 days of work,” he added. “So again reducing the risk, reducing the uncertainty piece. This is a thing that we’re going to do more and more as this situation evolves. If we have a request for a feature like ‘duty of care’ — which makes tonnes of sense right now — we’re going to shift the roadmap and do more of these kind of things.”
“This is a moment to be decisive and adaptable but also courageous and to invest in what makes TravelPerk stronger this year, next year and ten years,” he added. “This doesn’t change — we have great investors. We have a good cash position, great team. So we should keep hiring, we should keep investing in the product, we should keep investing in our service — so my biggest worry is that we [don’t] act out of panic or out of confusion — and that’s something we should be aware of and not do. But I’m happy to say that that’s not the case.”
As part of its own pro-active crisis response, TravelPerk has this week switched to 100% remote working — a radical change for Meir, who has deliberately required presence from his staff up to now for workplace culture reasons.
“We don’t do remote work. It’s something that’s one of these trendy things that we decided not to do yet for various reasons. We just think our culture is much stronger when people are physically in the same space and we switched from nobody does remote work to 100% remote,” he told us.
“We thought that the government — especially in Spain where most of our team is — is not reacting fast enough and aggressively enough [to Covid-19]. This is really unfair for the elderly and those who have previous health conditions…So we decided to take action… And I was just amazed how fast we transitioned from a company that doesn’t do remote to full on remote.”
GetYourGuide has also gone fully remote. “We did that on Monday,” said Reck. “Everyone called me crazy and now on Friday everyone wants to have our best practices playbook.”
“The health and safety of our employees and most importantly of the community around us [is our biggest concern],” he added. “We are in constant contact with everyone — to make sure people feel safe.
“They are now at home, they follow the news all the time. There’s huge psychological pressure — the travel market’s going down, the stock market’s going down — so for me by biggest role is to keep that strong engagement and morale and that people don’t feel threatened by the situation around them.”
As it happens, Reck is a biochemist by education — so likely one of relatively few founders in the travel space with hands-on lab experience of viruses. He’s also braced for the longest ‘nuclear winter’ of business disruption of the three startups we spoke to.
“What we know about this virus is there is no immunity in the population — meaning that this will continue to spread,” he said. “Every potential person is a host. And it’s very infectious and it seems to stick around quite a bit. And it puts a lot of stress on public health systems. So I personally anticipate there will be a very long lockdown in a lot of countries. And there will be only a very slow recovery. If you’d ask me we might see some reopening of the travel landscape in summer but I think that will be far diminished from a typical season. We’ll only see a full recovery towards May, June, July 2021. I don’t think it will be earlier than that.”
“It will get worse,” he added. “We know now it’s very likely there will be a lockdown [across the West]. My biggest wish for the next couple of weeks will be that employees continue to be healthy, safe and continue to be able to work and contribute like they’ve done.”
Omio’s Shaam is expecting at least several months of disruption to business as usual — pointing to the lack of a swift and coordinated response from governments to implement quarantine measures.
“We need a system-wide [response] like China or Singapore has done beautifully to really prevent it and I don’t believe that’s going to happen so we’re bracing for 3-4 months impact,” he told us.
“I just went out last night in Berlin with my wife for dinner and the restaurants are full, it’s crowded, the subways are full — full! Like not even 20% lower. Completely full. We had to make a reservation to get a table etc. So unless governments, in a very coordinated way, shut down borders for a period of 4-6 weeks so everybody goes into isolation in one go and everybody comes out — it’s going to drip feed for a long time because people are acting in different points of time on their own means.”
On the question of whether there will be a lasting impact on the travel market as the pandemic undoes global supply chains and routines, Shaam said again that’s likely to depend on how co-ordinated or otherwise the response is.
“There’s a lot of fixed costs part of travel. So I think the answer to that largely depends on how co-ordinated and how quickly we can contain. If we all actually manage to come back in 3-4 months I think we’re in a good place because it’ll bounce back quite strongly. If it’s drip feeding, and it takes the wind out for a very long time, then there will be a different situation but I hope not.”
In the meanwhile, with so many businesses getting au fait with virtual meetings and videoconferencing tools, the coronavirus crisis could also have a long term impact on demand for business travel — if lots of companies realize quite how much can be done remotely.
On this element of the crisis, TravelPerk’s Meir isn’t concerned.
“It’s an interesting theory,” he said, deferring from hazarding a guess on whether it will come to pass or not. “It doesn’t really matter for us as a company. Because companies spend $1.6TR a year on business travel. And it’s a market that is growing. Before this crisis predicted growth of 6 or 7% in 2020 — which is huge compared to the size of the market. So even if we’re talking about 10-20%, let’s say, at the edges this doesn’t change the picture. You still will have a tonne of business travel when we come back out of it.”
“If we zoom out a bit from this situation — there is a trend for more sustainable approach to travel,” Meir added. “So if so many things can turn into a Zoom call I don’t think it’s a bad idea for the planet. And we will do well. We’re not worried about a scenario like this.”
Here TravelPerk isn’t worried because the startup has another product for that: GreenPerk — a carbon offset offering it launched earlier this month. It’s been developed in partnership with non-profit Atmosfair, which works on decarbonization via UN-endorsed carbon mitigation projects.
“Many companies asked us to help them offset and reduce the impact that their travel generates and we thought that just reporting on what harm you do is not good enough. We wanted actually to make a difference,” said Meir. “One of the projects that we chose is efficient cooking stoves in Rwanda.”
GreenPerk uses an algorithm to calculate the carbon footprint of a given trip and then applies a per booking fee proportional to the pollution created — with the fee going to fund the carbon offset project.
GreenPerk is an opt in product — and Meir says it’s already had “amazing traction”, with more than 50 companies already signed up and using it.
“It’s unfair for us — people who live in very comfortable counties — to ask people in Rwanda to stop cooking their food but if we can help them transition to efficient and also faster ways of cooking then we should definitely do that… so the project funds efficient cooking stoves to replace the polluting ones.”
“If the world after this crisis looks like we are conscious about how we travel — when we do travel we try not to have an impact — and if, sometimes, making Zoom calls are better than face to face I think it’s not a bad scenario for the world. And we as a travel company will adapt like we always have,” he added. “It’s more interesting to look at the long term implication — rather than ‘is it good for our quarter or not’.”
Powered by WPeMatico
Glisten uses computer vision to break down product photos to their most important parts
It’s amazing that in this day and age, the best way to search for new clothes is to click a few check boxes and then scroll through endless pictures. Why can’t you search for “green patterned scoop neck dress” and see one? Glisten is a new startup enabling just that by using computer vision to understand and list the most important aspects of the products in any photo.
Now, you may think this already exists. In a way, it does — but not a way that’s helpful. Co-founder Sarah Wooders encountered this while working on a fashion search project of her own while going to MIT.
“I was procrastinating by shopping online, and I searched for v-neck crop shirt, and only like two things came up. But when I scrolled through there were 20 or so,” she said. “I realized things were tagged in very inconsistent ways — and if the data is that gross when consumers see it, it’s probably even worse in the backend.”
As it turns out, computer vision systems have been trained to identify, really quite effectively, features of all kinds of images, from identifying dog breeds to recognizing facial expressions. When it comes to fashion and other relatively complex products, they do the same sort of thing: Look at the image and generate a list of features with corresponding confidence levels.
So for a given image, it would produce a sort of tag list, like this:
As you can imagine, that’s actually pretty useful. But it also leaves a lot to be desired. The system doesn’t really understand what “maroon” and “sleeve” really mean, except that they’re present in this image. If you asked the system what color the shirt is, it would be stumped unless you manually sorted through the list and said, these two things are colors, these are styles, these are variations of styles, and so on.
That’s not hard to do for one image, but a clothing retailer might have thousands of products, each with a dozen pictures, and new ones coming in weekly. Do you want to be the intern assigned to copying and pasting tags into sorted fields? No, and neither does anyone else. That’s the problem Glisten solves, by making the computer vision engine considerably more context-aware and its outputs much more useful.
Here’s the same image as it might be processed by Glisten’s system:
Better, right?
“Our API response will be actually, the neckline is this, the color is this, the pattern is this,” Wooders said.
That kind of structured data can be plugged far more easily into a database and queried with confidence. Users (not necessarily consumers, as Wooders explained later) can mix and match, knowing that when they say “long sleeves” the system has actually looked at the sleeves of the garment and determined that they are long.
The system was trained on a growing library of around 11 million product images and corresponding descriptions, which the system parses using natural language processing to figure out what’s referring to what. That gives important contextual clues that prevent the model from thinking “formal” is a color or “cute” is an occasion. But you’d be right in thinking that it’s not quite as easy as just plugging in the data and letting the network figure it out.
Here’s a sort of idealized version of how it looks:
“There’s a lot of ambiguity in fashion terms and that’s definitely a problem,” Wooders admitted, but far from an insurmountable one. “When we provide the output for our customers we sort of give each attribute a score. So if it’s ambiguous, whether it’s a crew neck or a scoop neck, if the algorithm is working correctly it’ll put a lot of weight on both. If it’s not sure, it’ll give a lower confidence score. Our models are trained on the aggregate of how people labeled things, so you get an average of what people’s opinion is.”
The model was initially aimed at fashion and clothing in general, but with the right training data it can apply to plenty of other categories as well — the same algorithms could find the defining characteristics of cars, beauty products and so on. Here’s how it might look for a shampoo bottle — instead of sleeves, cut and occasion you have volume, hair type and paraben content.
Although shoppers will likely see the benefits of Glisten’s tech in time, the company has found that its customers are actually two steps removed from the point of sale.
“What we realized over time was that the right customer is the customer who feels the pain point of having messy unreliable product data,” Wooders explained. “That’s mainly tech companies that work with retailers. Our first customer was actually a pricing optimization company, another was a digital marketing company. Those are pretty outside what we thought the applications would be.”
It makes sense if you think about it. The more you know about the product, the more data you have to correlate with consumer behaviors, trends and such. Knowing summer dresses are coming back, but knowing blue and green floral designs with 3/4 sleeves are coming back is better.
Glisten co-founders Sarah Wooders (left) and Alice Deng
Competition is mainly internal tagging teams (the manual review we established none of us would like to do) and general-purpose computer vision algorithms, which don’t produce the kind of structured data Glisten does.
Even ahead of Y Combinator’s demo day next week the company is already seeing five figures of monthly recurring revenue, with their sales process limited to individual outreach to people they thought would find it useful. “There’s been a crazy amount of sales these past few weeks,” Wooders said.
Soon Glisten may be powering many a product search engine online, though ideally you won’t even notice — with luck you’ll just find what you’re looking for that much easier.
(This article originally had Alice Deng quoted throughout when in fact it was Wooders the whole time — a mistake in my notes. It has also been updated to better reflect that the system is applicable to products beyond fashion.)
Powered by WPeMatico