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Kraftful raises $1M to help smart home companies make better apps
If a thousand companies make their own smart light bulb, do a thousand companies also have to design a light switch app to control them?
Kraftful, a company out of Y Combinator’s Summer 2019 class, doesn’t think so. Kraftful builds the myriad components that an IoT/smart home company might need, puzzle piecing them together into apps for each company without requiring them to reinvent the light switch (or the padlock button, or the smart thermostat dial) for the nth time.
Because no company wants an app that looks identical to a competitor’s, much of what Kraftful produces is built to be tailored to each company’s branding — all the surface-level stuff, like iconography, fonts, colors, etc. are all customizable. Under the hood, though, everything is built to be reusable.
This focus on finding the parts that can be built once makes sense, especially given the team’s background. CEO Yana Welinder and CTO Nicky Leach were previously head of Product and a senior engineer, respectively, at IFTTT — the web service made up of a zillion reusable, interlinking “recipe” applets that let you hook just about anything (Gmail, Instagram, your cat’s litter box, whatever) into anything else to let one trigger actions on the other.
Kraftful founders Nicky Leach and Yana Welinder
So why now? More smart devices are coming onto the market every day, many of them from legacy appliance companies that don’t have much (or any) history in building smartphone apps. Good apps are the exception — the Philips Hue app is one of the better ones out there, and even it’s a little wonky sometimes. Many of them are… really bad.
Bad apps get bad App Store reviews, and bad reviews dent sales. And even for those who dive in and buy it without checking the reviews first, bad apps means returned devices. According to this iQor survey from 2018, 22% of smart home customers give up and return the products before getting them to work.
“We kind of looked around and realized that 80% of all smart home apps have zero, one or two stars on the App Store,” Welinder tells me.
Knowing what’s working and what’s not with buyers is a strength of Kraftful’s approach; behind the scenes, they can run all sorts of analytics on how users are actually interacting with components in the apps they’re powering and adjust all of them accordingly. If they make a tweak to the setup process in one app, do more users actually get all the way through it? Great. Now roll that out everywhere.
“If you look at some of the leading smart lock apps, they all have very… very similar interfaces. They’ve basically gotten to a standardized user experience, but they’ve all be developed individually,” says Welinder. “So all of these companies are spending the resources designing and developing these apps, but they’re not getting the benefit of being standardized across the board and being able to leverage data from all of these apps to be able to improve them all at once”
Kraftful builds the app for both iOS and Android, tailors it to the brand’s needs, offers cloud functionality like push notifications and activity history, provides analytics for insights on how users are actually using an app and keeps everything working as OS updates roll out and as device display sizes grow ever larger.
Of course, the entire concept of a dedicated app for a smart home device has some pretty fierce competition — between Apple’s HomeKit and Google Home, the platform makers themselves seem pretty set on gobbling up much of the functionality. But most buyers still expect their shiny devices to have their own apps — something branded and purpose-built, something for the manual to point them to. Power users, meanwhile, will always want to do things beyond what the all-encompassing solutions like HomeKit/Home are built for.
Folks at Google seem to agree with Kraftful’s approach — the team counts the Google Assistant Investments Program as one of the investors in the $1 million they’ve raised. Other investors include YC, F7 Ventures, Cleo Capital, Julia Collins (co-founder of Zume Pizza and Planet Forward), Lukas Biewald (co-founder of CrowdFlower), Nicolas Pinto (co-founder of Perceptio) and a number of other angel investors.
Welinder tells me they’re already working with multiple companies to start powering their apps; NDAs prevent her from saying who, at this point, but she notes that they’re “some of the largest brands that provide smart lights, plugs/switches, thermostats and other smart home products.”
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A founder’s guide to recession planning for startups
Schwark Satyavolu is a general partner at Trinity Ventures where he makes early-stage investments in fintech, security and AI. A serial entrepreneur, he co-founded Yodlee (YDLE) and Truaxis, both of which were acquired. Previously, he held senior executive positions at LifeLock and Mastercard. He is an inventor on 15 patents.
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We are living through one of the nation’s longest periods of economic growth. Unfortunately, the good times can’t last forever. A recession is likely on the horizon, even if we can’t pinpoint exactly when. Founders can’t afford to wait until the midst of a downturn to figure out their game plans; that would be like initiating swim lessons only after getting dumped in the open ocean.
When recession inevitably strikes, it will be many founders’ — and even many VCs’ — first experiences navigating a downturn. Every startup executive needs a recession playbook. The time to start building it is now.
While recessions make running any business tough, they don’t necessitate doom. I co-founded two separate startups just before downturns struck, yet I successfully navigated one through the 2000 dot-com bust and the second through the 2008 financial crisis. Both companies not only survived but thrived. One went public and the second was acquired by Mastercard.
I hope my lessons learned prove helpful to building your own recession game plan.
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UPDATE: Los Angeles-based CREXi raises $30 million for its online real estate marketplace
Los Angeles is one of the most desirable locations for commercial real estate in the United States, so it’s little wonder that there’s something of a boom in investments in technology companies servicing the market coming from the region.
It’s one of the reasons that CREXi, the commercial real estate marketplace, was able to establish a strong presence for its digital marketplace and toolkit for buyers, sellers and investors.
Since the company raised its last institutional round in 2018, it has added more than 300,000 properties for sale or lease across the U.S. and increased its user base to 6 million customers, according to a statement.
It has now raised $30 million in new financing from new investors, including Mitsubishi Estate Company (“MEC”), Industry Ventures and Prudence Holdings . Previous investors Lerer Hippeau Ventures and Jackson Square Ventures also participated in the financing.
CREXi makes money three ways. There’s a subscription service for brokers looking to sell or lease property; an auction service where CREXi will earn a fee upon the close of a transaction; and a data and analytics service that allows users to get a view into the latest trends in commercial real estate based on the vast collection of properties on offer through the company’s services.
The company touts its service as the only technology offering that can take a property from marketing to the close of a sale or lease without having to leave the platform.
According to chief executive Mike DeGiorgio, the company is also recession-proof thanks to its auction services. “As more distressed properties hit the market, the best way to sell them is through an online auction,” DeGiorgio says.
So far, the company has seen $700 billion of transactions flow through the platform, and roughly 40% of those deals were exclusive to the company.
“The CRE industry is evolving, and market players, especially younger, digitally native generations are seeking out platforms that provide free and open access to information,” said Gavin Myers, general partner at Prudence Holdings, in a statement. “CREXi directly addresses this market need, providing fair access to a range of CRE information. As CREXi continues to build out its stable of services, features, and functionality, we’re thrilled to partner with them and support the company’s continued momentum.”
CREXi joins the ranks of startups based in Los Angeles that have raised money to reshape the real estate industry. Estimates from Built in LA count roughly 127 companies, which have raised in excess of $2.4 billion, active in the real estate industry in Los Angeles. These companies range from providers of short-term commercial office space, like Knotel, or co-working companies like WeWork, to companies focused on servicing the real estate industry like Luxury Presence, which raised a $5 million round earlier in the year.
Due to inaccurate information provided by the company, an initial version of this story indicated that CREXi had raised $29 million in its Series B round. The correct number is $30 million.
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As SaaS stocks set new records, Atlassian’s earnings show there’s still room to grow
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
SaaS stocks had a good run in late 2019. TechCrunch covered their ascent, a recovery from early-year doldrums and a summer slowdown. In 2020 so far, SaaS and cloud stocks have surged to all-time highs. The latest records are only a hair higher than what the same companies saw in July of last year, but they represent a return to form all the same.
Given that public SaaS companies have now managed to crest their prior highs and have been rewarded for doing so with several days of flat trading, you might think that there isn’t much room left for them to rise. Not so, at least according to Atlassian . The well-known software company reported earnings after-hours yesterday and the market quickly pushed its shares up by more than 10%.
Why? It’s worth understanding, because if we know why Atlassian is suddenly worth lots more, we’ll better grok what investors — public and private — are hunting for in SaaS companies and how much more room they may have to rise.
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Playing traffic cop for drones in cities and towns nets Airspace Link $4 million
As the number of drones proliferates in cities and towns across America, government agencies are scrambling to find ways to manage the oncoming traffic that’s expected to clog up their airspace.
Companies like Airmap and KittyHawk have raised tens of millions to develop technologies that can help cities manage congestion in the friendly skies, and now they have a new competitor in the Detroit-based startup, Airspace Link, which just raised $4 million from a swarm of investors to bring its services to the broader market.
The financing for Airspace Link follows the company’s reception of a stamp of approval from the Federal Aviation Administration for low-altitude authorization and notification capabilities, according to chief executive Michael Healander.
According to Healander, what distinguishes Airspace Link from the other competitors in the market is its integration with mapping tools used by municipal governments to provide information on ground-based risk.
“We’re creating the roads based on ground-based risk and we push that out into the drone community to let them know where it’s okay to fly,” says Healander.
That knowledge of terrestrial critical assets in cities and towns comes from deep integrations between Airspace Link and the mapping company ESRI, which has long provided federal, state and local governments with mapping capabilities and services.
“We’ve just spent the past month understanding what regulation is going to be around to support it. In two years from now every drone will be live tracked in our platform,” says Healnder. “Today we’re just authorizing flight plans.”
As drone operators increase in number, the autonomous vehicles pose more potential risks to civilian populations in the wrong hands.
Parking lots, sporting events, concerts — really any public area — could be targets for potential attacks using drones.
“Drones are becoming more and more powerful and smarter,” EU Security Commissioner Julian King warned in a statement last summer, “which makes them more and more attractive for legitimate use, but also for hostile acts.”
Already roughly half of the population of the U.S. lives in controlled airspace where drones flying with more than a half a pound of weight require flight plan authorization, according to Healander.
“We build out population data and give state and local governments a tool to create advisories for emergency events or any areas where high densities of people will be,” says Healander. “That creates an advisory that goes through our platform to the drone industry.”
Airspace Link closed a $1 million pre-seed round in September 2019 with a $6 million post-money valuation. The current valuation of the company is undisclosed, but the company’s progress was enough to draw the attention of investors led by Indicator Ventures with participation from 2048 Ventures, Ludlow Ventures, Matchstick Ventures, Detroit Venture Partners and Invest Detroit.
For Healander, Airspace Link is only the latest entrepreneurial venture. He previously founded GeoMetri, an indoor GPS tracking company, which was acquired by Acuity Brands.
I’ve been a partner of ESRI my entire life,” says Healander. “I’ve been in the geospatial industry for four or five companies with them.”
The company has four main components of its service. There’s AirRegistry, where people can opt-in or out of receiving drone deliveries; AirInspect, which is a service that handles city and state permitting for drone operators; AirNetm, which works with the FAA to create approved air routes for drones; and AirLink, an API that connects drone operators with local governments and collects fees for registering drones.
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Layoffs hit Q&A startup Quora
Quora, a 10-year-old question-and-answer startup based in Mountain View, is laying off staff in its Bay Area and New York offices, the company’s CEO announced on the site today.
Like other startup leaders being pushed by investors to focus more heavily on cash flow, CEO Adam D’Angelo wrote that the layoffs and “organizational changes” were being pursued in order to focus on “scaling the organization in a financially responsible way.”
D’Angelo did not disclose the scale of the layoffs. Recode reported last year that Quora was locking down $60 million at a $2 billion valuation, noting at the time that the startup had around 200 employees. The company has publicly disclosed $225 million to date according to Crunchbase, from investors including Benchmark, Peter Thiel and Y Combinator.
We’ve reached out to the company for additional comment.
“[W]e need to reduce our burn rate to a sustainable level from which we can focus on pursuing the mission and growing the business over the long term. We do not want to be dependent on outside capital, so self-reliance and careful management of our resources are crucial to our future,” D’Angelo wrote.
Over the past several weeks, layoffs have been hitting startups, including several in SoftBank’s portfolio as well as Mozilla and, just today, genetic testing startup 23andMe.
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Layoffs reach 23andMe after hitting Mozilla and the Vision Fund portfolio
Layoffs in the technology and venture-backed worlds continued today, as 23andMe confirmed to CNBC that it laid off around 100 people, or about 14% of its formerly 700-person staff. The cuts would be notable by themselves, but given how many other reductions have recently been announced, they indicate that a rolling round of belt-tightening amongst well-funded private companies continues. (TechCrunch confirmed the numbers with the company.)
Mozilla, for example, cut 70 staffers earlier this year. As TechCrunch’s Frederic Lardinois reported earlier in January, the company’s revenue-generating products were taking longer to reach market than expected. And with less revenue coming in than expected, its human footprint had to be reduced.
23andMe and Mozilla are not alone, however. Playful Studios cut staff just this week, 2019 itself saw more than 300% more tech layoffs than in the preceding year and TechCrunch has covered a litany of layoffs at Vision Fund-backed companies over the past few months, including:
- Staff cuts at Zume, the startup famous for considering making mobile pizza robots
- Personnel reductions at Rappi, an e-commerce company
- Cuts at Getaround, a car rental service
- Layoffs at Oyo, a budget hotel unicorn
Scooter unicorns Lime and Bird have also reduced staff this year. The for-profit drive is firing on all cylinders in the wake of the failed WeWork IPO attempt. WeWork was an outlier in terms of how bad its financial results were, but the fear it introduced to the market appears pretty damn mainstream by this point. (Forsake hope, alle ye whoe require a Series H.)
The money at risk, let alone the human cost, is high. Zume has raised more than $400 million. 23andMe has raised an even sharper $786.1 million. Rappi? How about $1.4 billion. And Oyo? $3.2 billion so far. Every company that loses money eventually dies. And every company that always makes money lives forever. It seems that lots of companies want to jump over the fence, make some money and rebuild investor confidence in their shares.
It’s just too bad that the rank-and-file are taking the brunt of the correction.
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Cortex Labs helps data scientists deploy machine learning models in the cloud
It’s one thing to develop a working machine learning model, it’s another to put it to work in an application. Cortex Labs is an early-stage startup with some open-source tooling designed to help data scientists take that last step.
The company’s founders were students at Berkeley when they observed that one of the problems around creating machine learning models was finding a way to deploy them. While there was a lot of open-source tooling available, data scientists are not experts in infrastructure.
CEO Omer Spillinger says that infrastructure was something the four members of the founding team — himself, CTO David Eliahu, head of engineering Vishal Bollu and head of growth Caleb Kaiser — understood well.
What the four founders did was take a set of open-source tools and combine them with AWS services to provide a way to deploy models more easily. “We take open-source tools like TensorFlow, Kubernetes and Docker and we combine them with AWS services like CloudWatch, EKS (Amazon’s flavor of Kubernetes) and S3 to basically give one API for developers to deploy their models,” Spillinger explained.
He says that a data scientist starts by uploading an exported model file to S3 cloud storage. “Then we pull it, containerize it and deploy it on Kubernetes behind the scenes. We automatically scale the workload, and let you switch to GPUs if it’s compute intensive. We stream logs and expose [the model] to the web. We help you manage security around that, stuff like that,” he said.
While he acknowledges this is not unlike Amazon SageMaker, the company’s long-term goal is to support all of the major cloud platforms. SageMaker, of course, only works on the Amazon cloud, while Cortex will eventually work on any cloud. In fact, Spillinger says the biggest feature request they’ve gotten to this point is to support Google Cloud. He says that and support for Microsoft Azure are on the road map.
The Cortex founders have been keeping their head above water while they wait for a commercial product with the help of an $888,888 seed round from Engineering Capital in 2018. If you’re wondering about that oddly specific number, it’s partly an inside joke — Spillinger’s birthday is August 8th — and partly a number arrived at to make the valuation work, he said.
For now, the company is offering the open-source tools, and building a community of developers and data scientists. Eventually, it wants to monetize by building a cloud service for companies that don’t want to manage clusters — but that is down the road, Spillinger said.
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One Medical targets IPO valuation of up to $2B as we unpack its Q4 results
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re digging into One Medical’s updated IPO filing released this week. The document contains directional pricing information that will help us understand where the tech-enabled medical care startup expects the market to value itself and also details its Q4 2019 Preliminary Estimated Unaudited Financial Results, which gives us a fuller picture of its financial health.
As we’ll see, One Medical’s expected valuation matches secondary-market transactions in the firm’s equity, and, at the upper-end of its proposed IPO range, represents a solid boost to its final private valuation. Afterwards, we’ll dig back through the company’s numbers, figure out its implied revenue multiple and make a bullish and bearish argument for the company’s hoped-for IPO valuation.
It’s going to be fun! (For a general dive into the company’s IPO filing, head here.)
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Jeff Clavier, Sarah Guo, Ali Partovi and Caryn Marooney to speak at Early Stage SF
Early Stage SF is sneaking up on us and there is plenty to be excited about. The one-day event, which brings together a wide variety of startup experts to host breakout sessions, is going down on April 28 and we have a handful of speakers to announce.
So without any further ado:
We’re thrilled to announce that Jeff Clavier, Sarah Guo, Caryn Marooney and Ali Partovi will be joining us at the event.
Jeff Clavier is managing partner and founder at Uncork Capital, with portfolio companies that include Eventbrite, SendGrid, Fitbit, Vungle and Mint.com. His current investments include Vidyard, Postmates, Molekule, Shippo and Front.
Seed Funding Tips and Tricks – Jeff Clavier
There are now a thousand micro-VCs entrepreneurs can raise capital from, creating confusing market dynamics. Learn tips and tricks on fund raising from Uncork Capital’s managing partner, Jeff Clavier.
Sarah Guo joined Greylock Partners in 2013 and led the firm’s investments in Cleo, Demisto, Sqreen and Utmost, and sits on the boards of several startups. Before Greylock, she was at Goldman Sachs, where she invested at the growth level in companies like Dropbox, and advised pre-IPO tech companies and public tech companies alike, including Workday (the former) and Netflix, Zynga and Nvidia (the latter).
SaaS Fundraising and Growth – Sarah Guo
Sarah Guo, partner at Greylock, is an early-stage investor in enterprise software, with over half a dozen investments made across cybersecurity, AI, HR and health. She’ll give a rundown on why strong storytelling, a focus on solving a single problem well and a thesis on defensibility are all essential in a pitch, and why making seed and Series A investments often comes down to betting on the founding team.
Ali Partovi runs Neo, a mentorship community and VC fund that brings together tech veterans with diverse startup leaders. Partovi has backed the likes of Airbnb, Dropbox, Facebook and Uber, and also founded Code.org. Partovi also has experience as an entrepreneur, selling his first startup LinkExchange all the way back in 1998.
Hiring Your First 5 Engineers – Ali Partovi
The first few employees determine a startup’s trajectory. Learn the dos and don’ts of hiring your early engineers.
Caryn Marooney is a partner at Coatue Management, sitting on the boards of Zendesk and Elastic, with an advisory role at Airtable. Before Coatue, Caryn oversaw communications for Facebook, Instagram, WhatsApp and Oculus for eight years. Marooney is also a co-founder of the OutCast Agency, where she worked with companies across a wide spectrum of industries and sizes, including Salesforce, Amazon, Netflix and VMware.
Why Should Anyone Care? (Making Your Brand Stand Out) – Caryn Marooney
Startups often struggle to create a narrative that stands out. As a general partner at Coatue, former head of Comms at Facebook and co-founder of the OutCast Agency, Caryn Marooney has seen it all. Come learn the brand and messaging framework that can help your company stand out (while staying true to yourself).
There will be about 50+ breakout sessions at the show, and attendees will have an opportunity to attend at least seven. The sessions will cover all the core topics confronting early-stage founders — up through Series A — as they build a company, from raising capital to building a team to growth. Each breakout session will be led by notables in the startup world on par with the folks we’ve announced today.
Don’t worry about missing a breakout session, because transcripts from each will be available to show attendees. And most of the folks leading the breakout sessions have agreed to hang at the show for at least half the day and participate in CrunchMatch, TechCrunch’s great app to connect founders and investors based on shared interests.
Here’s the fine print. Each of the 50+ breakout sessions is limited to around 100 attendees. We expect a lot more attendees, of course, so signups for each session are on a first-come, first-serve basis. Buy your ticket today and you can sign up for the breakouts we are announcing today. Pass holders will also receive 24-hour advance notice before we announce the next batch. (And yes, you can “drop” a breakout session in favor of a new one, in the event there is a schedule conflict.)
We’re absolutely thrilled for this event, and we hope you are, too. Buy a pass to Early Stage SF 2020 right here!
Interested in sponsoring Early Stage? Hit us up here.
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