Startups
Auto Added by WPeMatico
Where top VCs are investing in open source and dev tools (Part 1 of 2)
The once-polarizing world of open-source software has recently become one of the hotter destinations for VCs.
As the popularity of open source increases among organizations and developers, startups in the space have reached new heights and monstrous valuations.
Over the past several years, we’ve seen surging open-source companies like Databricks reach unicorn status, as well as VCs who cashed out behind a serious number of exits involving open-source and dev tool companies, deals like IBM’s Red Hat acquisition or Elastic’s late-2018 IPO. Last year, the exit spree continued with transactions like F5 Networks’ acquisition of NGINX and a number of high-profile acquisitions from mainstays like Microsoft and GitHub.
Similarly, venture investment in new startups in the space has continued to swell. More investors are taking shots at finding the next big payout, with annual invested capital in open-source and dev tool startups increasing at a roughly 10% compounded annual growth rate (CAGR) over the last five years, according to data from Crunchbase. Furthermore, attractive returns in the space seem to be adding more fuel to the fire, as open-source and dev tool startups saw more than $2 billion invested in the space in 2019 alone, per Crunchbase data.
As we close out another strong year for innovation and venture investing in the sector, we asked 18 of the top open-source-focused VCs who work at firms spanning early to growth stages to share what’s exciting them most and where they see opportunities. For purposes of length and clarity, responses have been edited and split (in no particular order) into part one and part two of this survey. In part one of our survey, we hear from:
- Vas Natarajan, Accel
- Stephanie Zhan, Sequoia Capital
- Tomasz Tunguz, Redpoint Ventures
- Deepak Jeevankumar, Dell Technologies Capital
- Anna Khan, CRV
- Peter Levine, Andreessen Horowitz
- Ilya Kirnos, SignalFire
- S. Somasegar, Madrona Ventures
Powered by WPeMatico
How Hoop hit #2 with its Tinder for Snapchat
Snapchat’s developer platform is blowing up as a gateway to teen social app users. Hoop is the latest Snap Kit blockbuster, rocketing to No. 2 on the overall App Store charts this month with its Tinder -esque swiping interface for discovering people and asking to message with them over Snapchat. Within a week of going viral, unfunded French startup Dazz saw Hoop score 2.5 million downloads.
The fact that such a dumbfoundingly simple and already ubiquitous style of app was able to climb the charts so fast demonstrates the potential of Snap Kit to drive user lock-in for Snapchat. Because the developer platform lets other apps piggyback on its login system and Bitmoji avatars, it creates new reasons for users to set up a Snapchat account and keep using it. It’s the same strategy that made Facebook an entrenched part of the internet, but this time it’s for a younger crowd.
In the first-ever interview about Hoop, Dazz’s 26-year-old co-founders Lucas Gervais and Alexi Pourret reveal that the idea came from watching user patterns in their previous experiment on the Snap Kit platform. They built an app called Dazz in 2018 that let users create polls and get anonymous answers from friends, but they noticed their 250,000 users “always ended up adding each other on Snap. So we decided to create Hoop, the app to make new Snap friends,” Gervais tells me.
Gervais and Pourret have been friends since age two, growing up in small town in France. They met their two developers in high school, and are now marketing students at university. With Hoop, they say the goal was to “meet everyone’s needs, from connecting people from different cultures to helping lonely people to feel better to simply growing your Snapchat community.”
The Dazz / Hoop team (from left): Developers Julien Maire & Teddy Vallar, co-founders Alexi Pourret & Lucas Gervais
At first, Hoop for iOS or Android looks just like Tinder. You create an account with some photos and bio information, and start swiping through profiles. If you like someone, you tap a Snapchat button to request their Snap username so you can message them.
But then Hoop reveals its savvy virality and monetization strategy. Rather than being able to endlessly “swipe right” and approach people, Hoop limits your asks by making you spend its in-app “diamonds” currency to reach out. After about 10 requests to chat, you’ll have to earn more diamonds. You do that by sharing and getting friends to open your invite link to the app, adding people on Snapchat that you meet on Hoop, logging in each day, taking a survey, watching a video ad and completing offers by signing up for streaming services or car insurance providers. It also trades diamonds for rating Hoop in the App Store, though that might run afoul of Apple’s rules.
Those tactics helped Hoop climb as high as No. 2 on the overall iOS chart and No. #1 on the Social Apps chart on January 24th. It’s now at No. 83 overall and No. 7 in social, putting it above apps like Discord, LinkedIn, Skype and new Vine successor Byte. Hoop had more than 3 million installs as of a week ago.
There are certainly some concerns, though. Gervais claims that “We are not a meeting or dating app. We simply offer an easy way to make new Snap friends.” But because Tinder isn’t available for people under 18, they might be looking to Hoop instead. Thankfully, adults can’t see profiles of users under 18, and vice versa, and users only see potential matches in their age group. However, users can edit their age at any time.
Snap Kit keeps startups lean
Tools like Amazon’s AWS have made building a startup with a lean team and little money increasingly easy. Snap Kit’s ability to let developers skip the account creation and management process is another step in that direction. But the power to imbue overnight virality is something even Facebook never accomplished, though it helped build empires for developers like Zynga.
Another Snap Kit app called Yolo for receiving anonymous responses to questions shot up to No. 1 in May. Seven months later, it’s still at No. 51. That shows Snap Kit can offer longevity, not just flash-in-the-pan download spikes. Gervais calls the platform “a very powerful tool for developers.”
Three years ago I wrote that Snapchat’s anti-developer attitude was a liability. It needed to become a platform with a cadre of allies that could strengthen its role as an identity platform for teens, and insulate it against copycats like Facebook. That’s exactly what it did. By letting other apps launch themselves using its accounts, Stories and Bitmoji, they wouldn’t need to copy its social graph, sharing format or avatars, and instead would drive attention to the originals.
If Snap can keep building useful developer tools, perhaps by adding to its platform real-world object scanning, augmented reality filters and video calling, a Snapchat account could become a must-have for anyone who wants to use the next generation of apps. Then could come the crown jewel of a platform: discovery and virality. By building a section for promoting Snap Kit apps into Snapchat Discover, developers looking for shortcuts in both engineering and growth might join Evan Spiegel’s army.
Powered by WPeMatico
Aiven raises $40M to democratize access to open-source projects through managed cloud services
The growing ubiquity of open-source software has been a big theme in the evolution of enterprise IT. But behind that facade of popularity lies another kind of truth: Companies may be interested in using more open-source technology, but because there is a learning curve with taking on an open-source project, not all of them have the time, money and expertise to adopt it. Today, a startup out of Finland that has built a platform specifically to target that group of users is announcing a big round of funding, underscoring not just demand for its products, but its growth to date.
Aiven — which provides managed, cloud-based services designed to make it easier for businesses to build services on top of open-source projects — is today announcing that it has raised $40 million in funding, a Series B being led by IVP (itself a major player in enterprise software, backing an illustrious list that includes Slack, Dropbox, Datadog, GitHub and HashiCorp).
Previous investors Earlybird VC, Lifeline Ventures and the family offices of Risto Siilasmaa (chairman of Nokia), and Olivier Pomel (founder of Datadog), also participated. The deal brings the total raised by Aiven to $50 million.
Oskari Saarenmaa, the CEO of Aiven who co-founded the company with Hannu Valtonen, Heikki Nousiainen and Mika Eloranta, said in an interview that the company is not disclosing its valuation at this time, but it comes in the wake of some big growth for the company.
It now has 500 companies as customers, including Atlassian, Comcast, OVO Energy and Toyota, and over the previous two years it doubled headcount and tripled its revenues.
“We are on track to do better than that this year,” Saarenmaa added.
It’s a surprising list, given the size of some of those companies. Indeed, Saarenmaa even said that originally he and the co-founders — who got the idea for the startup by first building such implementations for previous employers, which included Nokia and F-Secure — envisioned much smaller organisations using Aiven.
But in truth, the actual uptake speaks not just to the learning curve of open-source projects, but to the fact that even if you do have the talent to work with these, it makes more sense to apply that talent elsewhere and use implementations that have been tried and tested.
The company today provides services on top of eight different open-source projects — Apache Kafka, PostgreSQL, MySQL, Elasticsearch, Cassandra, Redis, InfluxDB and Grafana — which cover a variety of basic functions, from data streams to search and the handling of a variety of functions that involve ordering and managing vast quantities of data. It works across big public clouds, including Google, Azure, AWS, Digital Ocean and more.
The company is running two other open-source technologies in beta — M3 and Flink — which will also soon be added on general release, and the plan will be to add a few more over time, but only a few.
“We may want to have something to help with analytics and data visualisation,” Saarenmaa said, “but we’re not looking to become a collection of different open-source databases. We want to provide the most interesting and best to our customers. The idea is that we are future-proofing. If there is an interesting technology that comes up and starts to be adopted, our users can trust it will be available on Aiven.”
He says that today the company does not — and has no plans to — position itself as a system integrator or consultancy around open-source technologies. The work that it does do with customers, he said, is free and tends to be part of its pre- and after-sales care.
One primary use of the funding will be to expand its on-the-ground offices in different geographies — Aiven has offices in Helsinki, Berlin and Sydney today — with a specific focus on the U.S., in order to be closer to customers to continue to do precisely that.
But sometimes the mountain comes to Mohamed, so to speak. Saarenmaa said that he was first introduced to IVP at Slush, an annual tech conference in Helsinki held in November, and the deal came about quickly after that introduction.
“The increasing adoption of open-source infrastructure software and public cloud usage are among the incredibly powerful trends in enterprise technology and Aiven is making it possible for customers of all sizes to benefit from the advantages of open source infrastructure,” Eric Liaw, a general partner at IVP, said in a statement.
“In addition to their market potential and explosive yet capital-efficient growth, we were most impressed to hear from customer after customer that ‘Aiven just works.’ The overwhelmingly positive feedback from customers is a testament to their hiring practices and the strong engineering team they have built. We’re thrilled to partner with Aiven’s team and help them build their vision of a single open-source data cloud that serves the needs of customers of all sizes.”
Liaw is joining the board with this round.
Powered by WPeMatico
Clear gets $13M Series A to build high-volume transaction system on the blockchain
Clear is an early-stage startup with a big ambition. It wants to build a blockchain for high-volume transaction systems like payments between telcos. Today it announced a $13 million Series A investment.
The round was led by Eight Roads with participation from Telefónica Innovation Ventures, Telekom Innovation Pool of Deutsche Telekom, HKT and Singtel Innov8.
That the strategic investors were telcos is not a coincidence. The early use case for Clear’s blockchain transaction network involves moving payments between worldwide telcos, a system that today is highly manual and prone to errors.
Clear co-founder Gal Hochberg says what his company does is to take commercial contracts and turn them into digital representations, often known in digital ledger terms as a smart contract.
“What that lets us do is create a trusted view of the true status of the relationship within the company’s business partners because they’re now looking at the same pricing and usage. They can find any issues in real time, either in commercial information or in service delivery, and they can even actually resolve those inside our platform,” Hochberg explained.
By putting these high-volume, cross-border transactions onto the blockchain with these smart contracts to act as automated enforcer of the terms, it means that instead of waiting until the end of the month to find errors and begin a resolution process, this can be done in real time, reducing time to payment and speeding up conflict resolution.
“We use blockchain technology to create those interactions in ways that it is auditable, cryptographically secure and ensures that both sides are synced and seeing the same information,” Hochberg said.
For starters, the company is working with worldwide telco companies because the number of transactions, and the way they cross borders make this a good test case, but Hochberg says this is only the starting point. They are not in full-blown production yet, but he says they have proven they can process hundreds of millions of billable events.
The money should help the company get into full carrier-grade production some time in the first half of this year, and then begin to expand into other verticals beyond telcos with the help of today’s investment.
Powered by WPeMatico
Layoffs hit another Softbank co as $3.2B Flexport cuts 50
Fearing weak fundraising options in the wake of the WeWork implosion, late stage startups are tightening their belts. The latest is another Softbank-funded company, joining Zume Pizza (80% of staff laid off), Wag (80%+), Fair (40%), Getaround (25%), Rappi (6%), and Oyo (5%) that have all cut staff to slow their burn rate and reduce their funding needs. Freight forwarding startup Flexport that is laying off 3% of its global staff.
“We’re restructuring some parts of our organization to move faster and with greater clarity and purpose. With that came the difficult decision to part ways with around 50 employees” a Flexport spokesperson tells TechCrunch after we asked today if it had seen layoffs like its peers.
Flexport CEO Ryan Petersen
Flexport had raised a $1 billion Series D led by SoftBank at a $3.2 billion valuation a year ago, bringing it to $1.3 billion in funding. The company helps move shipping containers full of goods between manufacturers and retailers using digital tools unlike its old-school competitors.
“We underinvested in areas that help us serve clients efficiently, and we over-invested in scaling our existing process, when we actually needed to be agile and adaptable to best serve our clients, especially in a year of unprecedented volatility in global trade” the spokesperson explained.
Flexport still had a record year, working with 10,000 clients to finance and transport goods. The shipping industry is so huge that it’s still only the seventh largest freight forwarder on its top Trans-Pacific Eastbound leg. The massive headroom for growth plus its use of software to coordinate supply chains and optimize routing is what attracted SoftBank.
The Flexboard Platform dashboard offers maps, notifications, task lists, and chat for Flexport clients and their factory suppliers.
But many late-stage startups are worried about where they’ll get their next round after taking huge sums of cash from SoftBank at tall valuations. As of November, SoftBank had only managed to raise about $2 billion for its Vision Fund 2 despite plans for a total of $108 billion, Bloomberg reported. LPs were partially spooked by SoftBank’s reckless investment in WeWork. Further layoffs at its portfolio companies could further stoke concerns about entrusting it with more cash.
Unless growth stage startups can cobble together enough institutional investors to build big rounds, or other huge capital sources like sovereign wealth funds materialize for them, they might not be able to raise enough to keep rapidly burning. Those that can’t reach profitability or find an exit may face down-rounds that can come with onerous terms, trigger talent exodus death spirals, or just not provide enough money.
Flexport has managed to escape with just 3% layoffs for now. Being proactive about cuts to reach sustainability may be smarter than gambling that one’s business or the funding climate with suddenly improve. But while other SoftBank startups had to spend tons to edge out direct competitors or make up for weak on-demand service margins, Flexport at least has a tried and true business where incumbents have been asleep at the wheel.
Powered by WPeMatico
Does Asana’s planned direct listing reveal the company’s true value?
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Asana, a well-known workplace productivity company, announced yesterday it has filed privately to go public. The San Francisco-based company is well-funded, having raised more than $200 million; well-known, due in part to its tech-famous founding duo; and valuable, having last raised at a $1.5 billion valuation.
Each of those factors — plus the fact that Asana is going public — makes the company worth exploring, but its plans to offer a direct listing instead of a traditional initial public offering make it irresistible.
Today, we’ll rewind through Asana’s fundraising and valuation history. Then, we’ll mix in what we know about its financial performance, growth rates and capital efficiency to see how much we can tell about the company as we count down to its public S-1 filing. The Asana flotation is going to be big news, so let’s get all our facts and figures straightened out.
Valuations and revenue
Powered by WPeMatico
The Meta, a training platform for gamers, builds on Kovaak’s FPS Aim Trainer
As esports grows and creates opportunities for gamers to level up to the pro or streamer level, there is still a huge barrier in the way. There is not a wealth of training options for gamers. If you can’t get better within the environment of the game itself, then you’ve peaked. Practice makes perfect, but what if there’s no such thing as practice?
The Meta is looking to change that with the launch of a new training platform that builds off the success of Kovaak’s FPS Aim Trainer. Kovaak is a former Quake pro, known for his hyper-accurate aim, who built Kovaak’s FPS Aim Trainer out of personal need. He wanted a way to grind out his mechanical aiming skills, and built out various scenarios across 10+ major titles to practice.
The Meta co-founders Duncan Haberly, Jay Brown, and Chris Olson had been working on their own training platform that focuses on guided trainings around specific skills, with physics and gun mechanics identical to popular titles, to let gamers learn from their mistakes and train better habits.
After the two esports entrepreneurial teams met, they decided to join forces and offer what they believe to be the ultimate training tool.
It’s comprised of two parts. The first is The Meta’s self-guided training platform, with various branches that focus on a different skill set in FPS gaming. The second is Kovaak’s Sandbox, the aim trainer that lets users test the skills they’ve learned by playing through more than 2,600 user-generated scenarios.
For now, The Meta-guided training focuses on flicking (otherwise known as click timing), with plans to introduce tracking and scoping skill branches soon. The self-guided training side of the platform feeds users insights about their deficiencies — maybe they tend to miss their shots when enemies are in the upper-left quadrant of the screen — so they can dedicate time and energy to improving that part of their game in the aim trainer.
The Meta is available on Steam for PC players, with plans to launch for consoles in the future.
The flicking trainer has more than 40 sub-levels, with support for Overwatch and Fortnite. Kovaak’s Sandbox, as the FPS Aim Trainer is now known, has more than 2,600 user-created scenarios, and supports titles like Overwatch, Fortnite, Quake, Call of Duty, Apex Legends, Paladins, CS:GO, Battlefield and Rainbow 6.
The Meta is $9.99 as a single-time payment, and the company says it’s currently averaging 20,000 units sold per month. The gaming startup has raised $2.5 million in funding from investors like Village Global, Canaan Beta Fund, Courtside VC, AET Fund (Akatsuki Entertainment Technology), betaworks and GFR Fund (GREE).
There is movement in the esports space around training and improvement. In 2018, Epic Games introduced Playground Mode to allow players a chance to experience the Fortnite environment without dropping in alongside 99 other gamers. PlayVS, the startup looking to take the esports infrastructure to the high school and college level, is investing heavily in data, reporting stats and analysis to players, coaches, fans and recruiters. StateSpace, a direct competitor to The Meta with $4 million in funding, uses neuroscience to help gamers train, hoping to create a standardized metric by which gamers’ skills can be measured.
Esports is growing across almost every metric, from viewership to awareness to revenue, and with that, we can only expect to see more startups dive into the space and stake their claim.
Powered by WPeMatico
Emerge raises $20M to take its digital freight marketplace for truckers up a gear
Trucking is currently the most popular mode of transporting freight in the U.S., accounting for around $12.5 billion of the $17 billion freight market, according to the Bureau of Transportation Statistics. But with thousands of small and single-vehicle operators and legacy (often paper-based) systems underpinning communications, it’s also one of the most inefficient.
Now there are signs that this is changing. A startup out of Phoenix, Ariz. called Emerge, which has built a platform for shippers and brokers to find and allocate truck freight more effectively across the long tail of available truck-based carriers (a little like a Flexport but for trucks), is announcing a round of $20 million, funding it will use to continue building out its technology, as well as to keep expanding business.
The Series A — led by NewRoad Capital Partners, with previous investors Greycroft and 9Yards Capital also participating — comes on the heels of some already strong traction for Emerge. Since being founded in 2018 by brothers Andrew and Michael Leto, the company has processed more than $1 billion in freight with 1,500% year-over-year growth between 2018 and 2019. Emerge has now raised just over $40 million and we understand that its valuation is currently at more than $100 million.
Some of its traction so far is down to the founders. Both are vets of the trucking industry whose previous company, a multimodal shipment visibility/supply chain solutions platform called 10-4, sold to Trimble in a $400 million deal. And some of that is down to the gap in the market that Emerge is filling.
“Gap” is actually the operative word here. How shipments are booked on trucks today is quite inefficient, with orders often leaving empty spaces on truck beds that could be filled with goods going in the same direction; and in about 20% of all journeys carrying no load at all.
Part of the reason for this is the antiquated way that shippers book space on trucks, and part of the reason is because there is just simply too much fragmentation in the system, with 80% of all shipments today contract-based and the remaining 20% operating as a “spot market” and booked on the fly, and neither of them particularly efficient when it comes to truck occupancy. (Most of the latter spot market is booked through spreadsheets and email, Michael Leto, the CEO, said in an interview.)
Emerge’s solution is something of a stick-and-carrot approach that reminds me a little also of how advertising exchanges work.
A shipper that wants to use the Emerge platform essentially activates/lists its entire inventory of truck providers on the platform to get started. That list and inventory, in turn, become part of a bigger database of other providers: and again, this is a long-tail approach, with typically the trucking companies on the platform having no more than 200 trucks (and often fewer) in their fleets.
Then, when a shipper goes to Emerge to book a shipment, options are provided that might include previous truckers, but might also include others. The idea is that this provides a more efficient picture, and that in turn gets passed on as cost savings to the customers, who can typically reduce shipping costs by as much as 20% using the platform.
If the cost savings and expanded choice are the carrots, the stick comes in the form of the requirement to upload truck data and share it with other shippers: you can’t use the system without doing it.
“But it’s a network effect,” Leto explained when I asked if Emerge ever saw resistance to the model. “We allow these companies to share capacity to drive efficiencies, and to drive and lower costs with less deadhead miles. There are a lot of benefits to capacity sharing.” It doesn’t seem to have deterred too many in any case. There are currently some 30,000 carrier profiles on the platform, and 12,000 transportation entities — including carriers, brokers or other shippers — transacted in Q4 alone, speaking to activity on the platform being strong.
Emerge is not the only company that has identified the opportunity in providing a better and more updated platform to communicate and book space in the fragmented truck market. Sennder out of Berlin — which last year raised a sizeable round of funding — has also built a platform to centralise communications around booking shipments. It, however, seems to have less of an emphasis on encouraging shippers to take the lead in expanding that network effect that Leto describes.
Others that are tackling the wider shipping and logistics market and trying to improve how it runs include Sendy out of Kenya, which recently also announced a $20 million raise; Flexport, which now has a $3.2 billion valuation; Zencargo, which has also raised $20 million; and FreightHub ($30 million), Bringg ($25 million) and NEXT ($97 million).
But within that, Emerge’s performance so far, coupled with the Leto brothers’ history as founders, is giving the startup some extra mileage as we enter the next phase of what trucking might hold, which could include a critical mass of autonomous and electric vehicles on pre-defined routes.
“Uniquely, Emerge combines an exciting new technology designed to serve existing, unmet market need with experienced industry operators and entrepreneurs,” said Tracy Black of NewRoad in a statement. “Andrew and Michael are building the most innovative marketplace we’ve seen in the freight and digital marketplace industry — bringing contracts and carriers together to create new capacity. We are excited to be leading their Series A and I am thrilled to join the board to support their growth.”
Powered by WPeMatico
Nomagic, a startup out of Poland, picks up $8.6M for its pick-and-place warehouse robots
Factories and warehouses have been two of the biggest markets for robots in the last several years, with machines taking on mundane, if limited, processes to speed up work and free up humans to do other, more complex tasks. Now, a startup out of Poland that is widening the scope of what those robots can do is announcing funding, a sign not just of how robotic technology has been evolving, but of the growing demand for more automation, specifically in the world of logistics and fulfilment.
Nomagic, which has developed way for a robotic arm to identify an item from an unordered selection, pick it up and then pack it into a box, is today announcing that it has raised $8.6 million in funding, one of the largest-ever seed rounds for a Polish startup. Co-led by Khosla Ventures and Hoxton Ventures, the round also included participation from DN Capital, Capnamic Ventures and Manta Ray, all previous backers of Nomagic.
There are a number of robotic arms on the market today that can be programmed to pick up and deposit items from Point A to Point B. But we are only starting to see a new wave of companies focus on bringing these to fulfilment environments because of the limitations of those arms: they can only work when the items are already “ordered” in a predictable way, such as on an assembly line, which has mean that fulfilment of, for example, online orders is usually carried out by humans.
Nomagic has incorporated a new degree of computer vision, machine learning and other AI-based technologies to elevate the capabilities of those robotic arm. Robots powered by its tech can successfully select items from an “unstructured” group of objects — that is, not an assembly line, but potentially another box — before picking it up and placing it elsewhere.
Kacper Nowicki, the ex-Googler CEO of Nomagic who co-founded the company with Marek Cygan (an academic) and Tristan d’Orgeval (formerly of Climate Corporation), noted that while there has been some work on the problem of unstructured objects and industrial robots — in the US, there are some live implementations taking shape, with one, Covariant, recently exiting stealth mode — it has been mostly a “missing piece” in terms of the innovation that has been done to make logistics and fulfilment more efficient.
That is to say, there has been little in the way of bigger commercial roll outs of the technology, creating an opportunity in what is a huge market: fulfilment services are projected to be a $56 billion market by 2021 (currently the US is the biggest single region, estimated at between $13.5 billion and $15.5 billion).
“If every product were a tablet or phone, you could automate a regular robotic arm to pick and pack,” Nowicki said. “But if you have something else, say something in plastic, or a really huge diversity of products, then that is where the problems come in.”
Nowicki was a longtime Googler who moved from Silicon Valley back to Poland to build the company’s first engineering team in the country. In his years at Google, Nowicki worked in areas including Google Cloud and search, but also saw the AI developments underway at Google’s DeepMind subsidiary, and decided he wanted to tackle a new problem for his next challenge.
His interest underscores what has been something of a fork in artificial intelligence in recent years. While some of the earliest implementations of the principles of AI were indeed on robots, these days a lot of robotic hardware seems clunky and even outmoded, while much more of the focus of AI has shifted to software and “non-physical” systems aimed at replicating and improving upon human thought. Even the word “robot” is now just as likely to be seen in the phrase “robotic process automation”, which in fact has nothing to do with physical robots, but software.
“A lot of AI applications are not that appealing,” Nowicki simply noted (indeed, while Nowicki didn’t spell it out, DeepMind in particular has faced a lot of controversy over its own work in areas like healthcare). “But improvements in existing robotics systems by applying machine learning and computer vision so that they can operate in unstructured environments caught my attention. There has been so little automation actually in physical systems, and I believe it’s a place where we still will see a lot of change.”
Interestingly, while the company is focusing on hardware, it’s not actually building hardware per se, but is working on software that can run on the most popular robotic arms in the market today to make them “smarter”.
“We believe that most of the intellectual property in in AI is in the software stack, not the hardware,” said Orgeval. “We look at it as a mechatronics problem, but even there, we believe that this is mainly a software problem.”
Having Khosla as a backer is notable given that a very large part of the VC’s prolific investing has been in North America up to now. Nowicki said he had a connection to the firm by way of his time in the Bay Area, where before Google, Vinod Khosla backed a startup of his (which went bust in one of the dot-com downturns).
While there is an opportunity for Nomagic to take its idea global, for now Khosla’s interested because of the a closer opportunity at home, where Nomagic is already working with third-party logistics and fulfilment providers, as well as retailers like Cdiscount, a French Amazon-style, soup-to-nuts online marketplace.
“The Nomagic team has made significant strides since its founding in 2017,” says Sven Strohband, Managing Director of Khosla Ventures, in a statement. “There’s a massive opportunity within the European market for warehouse robotics and automation, and NoMagic is well-positioned to capture some of that market share.”
Powered by WPeMatico
AI startup Cresta launches from stealth with millions from Greylock and a16z
As Silicon Valley’s entrepreneurs cluster around the worldview that artificial intelligence is poised to change how we work, investors are deciding which use cases make the most sense to pump money into right now. One focus has been the relentless communication between companies and customers that takes place at call centers.
Call center tech has spawned dozens if not hundreds of AI startups, many of which have focused on automating services and using robotic voices to point customers somewhere they can spend money. There has been a lot of progress, but not all of those products have delivered. Cresta is more focused on using AI suggestions to help human contact center workers make the most of an individual call or chat session and lean on what’s worked well for past interactions that were deemed successful.
“I think that there will always be very basic boring stuff that can be automated like frequently asked questions and ‘Oh, what’s the status of my order?,’ ” CEO Zayd Enam says. “But there’s always the role of the person that’s building the relationship between the company and the customer, and that’s a really strategic role for companies in the modern age.”
Udacity co-founder Sebastian Thrun is the startup’s board chairman and is listed as a co-founder. Enam met Thrun during his PhD research at Stanford focused on workplace productivity. Cresta is launching from stealth and announcing that they’ve raised $21 million in funding from investors including Greylock Partners and Andreessen Horowitz. The company recently closed a $15 million Series A round.
Cresta wants to use AI to school customer service workers and salespeople on how to close the deal.
There’s quite a lot of turnover in contact center jobs and that can leave companies reticent to spend a ton of time investing in each employee’s training. Naturally, there are some inherent issues where the workers interacting with an individual customer might not have the experience necessary to suggest a solution that they might if they had more experience. In terms of live feedback, for many, fumbling through paper scripts at their desk can be about as good as it gets. Cresta is hoping that by tapping improvements in natural language processing, their software can help alleviate some stress for contact center workers and help them move conversations in the direction of selling something else for their company.
Cresta is entering a field where there’s already quite a bit of interest from established software giants. Salesforce, Google and Twilio all operate AI-driven products for contact centers. Even with substantial competition, Enam believes Cresta’s team of 30 can offer its customers a lot more individual attention.
“We’re one of the few technical teams where we’re just obsessed with the customer, to the point where it’s normal for people on our team to fly to the customer and live by a call center in an Airbnb for a week,” Enam said. “When Greylock led the Series A, they had heard that and said that’s what gave them so much conviction that we were the team to solve the problem.”
Sun Microsystems co-founder Andy Bechtolsheim, Mark Leslie and Vivi Nevo are also investors in Cresta.
Powered by WPeMatico