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As Indian startups raise record capital, losses are widening
Indian tech startups secured nearly $14 billion in 2019, more than they have raised in any other year. This is a major rebound since 2016, when startups in the nation had bagged just $4.3 billion.
But even as more VC funds — many with bigger checks — arrive in India, the financial performance of startups remains a cause for concern.
Whether it’s mobile payments or education learning apps, each startup today faces dozens of competitors in their category. Many of these sectors, such as social commerce and digital bookkeeping, are just beginning to see traction in India, which has resulted in investors backing a large number of similar players.
This has meant more marketing spends; to create awareness among consumers (or merchants) and stand out in a crowd, many firms are heavily marketing their services and offering lofty cashbacks to win users.
What is especially troublesome for startups is that there is no clear path for how they would ever generate big profits. Silicon Valley companies, for instance, have entered and expanded into India in recent years, investing billions of dollars in local operations, but yet, India has yet to make any substantial contribution to their bottom lines.
If that wasn’t challenging enough, many Indian startups compete directly with Silicon Valley giants, which while impressive, is an expensive endeavor.
How expensive? Here’s an exhaustive look at the financial performance of several notable startups and major firms in India as disclosed by them to local regulators in recent weeks. These are Financial Year 2019 figures, which ended on March 31, 2019. Some of the filings were provided to TechCrunch by business intelligence platform Tofler.
Flipkart
Flipkart, which sold a majority stake to Walmart for $16 billion last year, posted a consolidated revenue of $6.11 billion for the financial year that ended in March. Its revenue is up 42% since last year, and its loss, at $2.4 billion, represents a 64% improvement during the same period. The ecommerce giant this year has expanded into many new categories, including food retail.
BigBasket
BigBasket delivers groceries and perishables across India and became a unicorn this year after it raised a $150M Series F led by Mirae Asset-Naver Asia Growth Fund, the U.K.’s CDC Group and Alibaba. The startup posted revenue of $386 million, up from $221 million last year. Its loss, however, more than doubled to $80 million from $38 million during the same period.
Grofers
BigBasket rival Grofers, which raised $200 million in a financing round led by SoftBank Vision Fund, reported $62.6 million on revenue of $169 million. The company’s chief executive and co-founder, Albinder Dhindsa, has said that the startup is on track to sell goods worth $699 million by the end of FY 2020.
MilkBasket
Milkbasket, a micro-delivery startup that allows users to order daily supplies, reported revenue of $11.8 million, up from $4 million last year. During this period, its loss widened to $1.3 million, from $130,000 last year.
Lenskart
Lenskart is an omni-channel retailer for eyewear products. Earlier this month, it raised $275 million this month from SoftBank Vision Fund. It posted a revenue of $68 million — and its loss shrank from $16.5 million to $3.8 million in one year.
Rivigo
Rivigo, a five-year-old startup that is attempting to build a more reliable and safer logistics network, raised $65 million in July this year. Its revenue increased 42% to $143.8 million while its loss also increased to $83 million.
Delhivery
SoftBank-backed logistics firm Delhivery, which raised $413 million earlier this year from SoftBank and others, said its revenue has grown 58% to $237 million since FY18, while its loss has almost tripled to $249 million.
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How two-year-old Loft nabbed $175M led by Andreessen Horowitz
Loft may have better product market fit in Brazil than Opendoor does in the U.S. And now the São Paulo-based property tech company has growth funding to prove it.
Andreessen Horowitz is doubling down on its first Brazil investment with Loft, a two-year-old real estate marketplace. The $175 million Series C was co-led by Vulcan Capital.
In the U.S., sites like Opendoor give us visibility into how much your house or properties you’re interested in are worth. That transparency doesn’t exist in Latin America.
Loft founder and co-CEO Mate Pencz describes the residential real estate market in Latin America as a $6 trillion opportunity. As it exists now, lack of data transparency around property listings results in low-quality listings, disproportionately high asking prices and prolonged selling times. This creates a painful experience for buyers, sellers and brokers. The market is locked up, but Loft thinks it can create transparency and liquidity with open data sets for property value.
Loft has been supported by some pretty big Silicon Valley names since its genesis in 2018. Loft raised equity capital from angel investors such as Max Levchin of PayPal, Joe Lonsdale of Palantir, Opendoor founder Eric Wu, Mike Krieger of Instagram, David Vélez of Nubank and Josh Kushner of Thrive Capital, whom Pencz met during undergrad studies at Harvard. It helped that Loft was not Pencz’s first entrepreneurial rodeo — the founder started web-printing company Printi, which exited to Vistaprint in 2014 for a $25 million stake.
Growth-stage funding will enable Loft to scale
Pencz says they’ve transacted on 1,000 properties in their key market of São Paulo, and plans to tackle new cities with the “Uber growth model” of replicating the same service in new cities, like Mexico City. Loft is currently operative in Brazil, and has big plans for Mexico in 2020. Penzc has poached the Latin American head of Uber Eats, Juan Pablo Ramos, to launch Loft’s services in Mexico City within the next two to four months. As Loft mobilizes in Mexico, this could mean trouble for Flat, an existing Opendoor clone in Mexico, which will now fight for market share against a heavily funded competitor.
Loft’s São Paulo HQ
When it comes to marketing, Loft isn’t thinking about Facebook or SEO performance advertising. Pencz sees more value in physically integrating the Loft brand into the fabric of new neighborhoods through festival sponsorships and community events, while leveraging broker channels. “Partnering with brokers and being perceived as a positive brand with a high NPS are the two key pillars of Loft’s expansion strategy,” says Pencz.
The founders began by physically measuring buildings and making estimates about how much houses and apartments were worth. The founders didn’t stop there — they envision the future of Loft as a one-stop shop with services like renovations, property financing for mortgages and insurance through banks. The company wants to completely upend real estate in Latin America, and those big ambitions have piqued investor interest.
Andreessen Horowitz and Vulcan Capital co-led the Series C, with participation from QED Investors, Fifth Wall Ventures, Thrive Capital, Valor Capital and Monashees.
So, what is a16z’s Latin America strategy?
Andreessen Horowitz general partner Alex Rampell notes that while Loft marked the firm’s entry into Brazil, the fund has been active in Latin America for a few years: a16z invested in Colombia’s delivery unicorn Rappi, Uruguayan restaurant management platform Meitre and Colombian point of sale lender ADDI. And, a16z joined in Loft’s $70 million Series B that closed in March 2019.
Rampell, who previously invested in Opendoor and sits on the board of TransferWise, says that a16z doesn’t really have an investment strategy when it comes to Latin America. Instead, the idea with Loft was that while the iBuyer Opendoor for transactional multiple listing services isn’t by any means a proprietary business model, it may work better in a country like Brazil — where buyers and sellers are slowed down by bureaucratic policies and lack of fair market value data — than in the U.S. To put it simply, Loft has better product market fit in Brazil than Opendoor does in the U.S.
Loft hopes its customer-friendly Nubank-esque branding will win over new users
Rampell references the U.S.’s Groupon and Korea’s Coupang for comparison. The Groupon model blew up in Asia as Coupang’s valuation reached $9 billion. Groupon rose fast and fell hard, and now its founders are on to their next entrepreneurial ventures.
“There’s a lot of value in multiple listings services, and the opportunity might be better for a market like Brazil, especially if you back the right entrepreneurs — because that’s all that really matters in the end,” says Rampell.
Loft monetizes through the sale of properties and ancillary products. Cuts from referral and partnership fees from banks or insurance companies will continue to help Loft monetize, in addition to the $275 million in capital it has raised during its two short years in existence.
Pencz declined to comment on Loft’s valuation.
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Exhibit your startup at TC Sessions: Mobility 2020
Mobility mavericks, get ready to strut your stuff at TC Sessions: Mobility 2020 on May 14. Don’t miss our second annual day-long conference devoted to technologies that move people and parcels around the world in new, exciting ways.
More than 1,000 of the industry’s mightiest minds, makers, innovators and investors will converge in San Jose for a mobile mind meld. That spells opportunity for early-stage mobility startup founders. Buy an Early-Stage Startup Exhibitor Package and plant your company in front of the influencers who can drive your mobility dreams to the next level.
Whether you’re racing to perfect autonomous vehicles or flying cars, developing AI-based applications, focused on improving battery technology — or you want to recruit a few brilliant engineers — exhibiting at TC Sessions: Mobility offers invaluable exposure and opportunity.
Your exhibitor package includes a 30-inch high-boy table, power, linen and signage. Even better — it includes four tickets to the event. That’s four times the networking power. And it gives you time to take in some of the show’s many panel discussions, fireside chats and workshops.
Because, of course, the day will be loaded with top-notch speakers who, along with TC editors, will discuss the opportunities and challenges — social, economic and regulatory — that come from creating new mobile paradigms.
We’re building our slate of speakers for this year’s event, and we’ll be announcing them on a rolling basis in the coming months. Know someone who should be onstage at this event? You can nominate a speaker here. In the meantime, here are just a couple of examples of what went down at last year’s Session.
Alisyn Malek, co-founder and COO of May Mobility, an autonomous transportation startup, talked about making transportation easier and accessible for everyone, and Jesse Levinson, Zoox CTO and co-founder, shared specifics on the company’s autonomous vehicle hardware design.
And here are just a few more of the speakers who graced the TC Sessions: Mobility 2019 stage:
- Seleta Reynolds, head of the Los Angeles Department of Transportation
- Caroline Samponaro, Lyft, head of Micromobility Policy
- Ted Serbinski, Techstars, founder and managing director of The Mobility Program
- Sarah Smith, Bain Capital Ventures, partner
You get the idea. And you can expect more high-caliber technologists, policy makers and investors to be in the house when TC Sessions: Mobility takes place May 14, 2020.
Plenty of reason to attend — and even more reason to exhibit. But don’t wait. Exhibition space is limited, and so are the number of packages available. Reserve your demo table here, and get ready to move your early-stage mobility startup in a whole new direction.
Is your company interested in sponsoring or exhibiting at TC Sessions: Mobility 2020? Contact our sponsorship sales team by filling out this form.
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Apply to present your startup at TechCrunch’s CES Pitch Night
CES is a magical place full of gizmos, gadgets and communicable diseases.
TechCrunch is hosting another pitch-off event this year. Called Pitch Night, select early-stage companies will take the stage and have 60 seconds to present their wares to TechCrunch editorial and industry experts.
This event is free. Obtain a ticket here. Want to pitch at the event? Apply below.
This Vegas Pitch Night isn’t a polished show with massive screens, celebrity guests and life-changing cash prizes. This event is quick and efficient, held in a co-working event space outside of downtown Vegas. There will be coolers of beer, sodas and whatever snacks we can find at a 7-11.
We’ve held these events for years and they’re among our favorite to host. There are countless startups in town for CES and we just want to hang out away from the noise of the Vegas strip.
Space is very limited. Register as soon as possible.
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Kicking off 2020 with 4 new members of the $100M ARR club
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re adding four new names to the growing $100 million annual recurring revenue (ARR) club. The firms — Sisense, SiteMinder, Monday.com, and Lemonade — add diversity to our current group of yet-private companies which have reached the nine-figure recurring revenue threshold.
Our goal in tracking the companies in this high-flying cohort is to keep tabs on the private firms (often unicorns, it should be said) that could go public if needed. While not every unicorn will or could go public, companies with nine-figure ARR have a clear path to the public markets provided that their economics are in reasonable shape.
And we’ve seen some remarkably efficient companies meet the mark, including Egnyte with just $137.5 million raised, and Braze, with only $175 million on its books. For growth-oriented, venture-backed companies, those are efficient results.
But let’s add a few more members to the club today. Please meet our new centurions, centaurs, or whatever we end up calling them.
Sisense: more than $100 million ARR
Sisense is a business intelligence company that merged with Periscope Data earlier this year. The combined firm has raised just over $200 million, according to Crunchbase, with the lion’s share of that landing in Sisense’s column (about $175 million).
What’s notable about the combination is that the two firms were public about saying that, when brought together, they would have combined ARR of $100 million. That was back in May. Today, Sisense has crested the $100 million mark by itself, according to an interview with TechCrunch. With Periscope added to the mix the company’s total ARR is naturally higher.
Sisense had a few original goals according to CEO Amir Orad, including helping businesses “take complex data and bring it together to get insights.” Its second focus is helping companies “take complex data sets and build [them out] as an analytical application in their products,” he said.
Periscope came into the picture when Orad and the smaller company’s CEO Harry Glaser (now Sisense’s CMO) started talking as friends about their respective markets. According to Orad, Glaser outlined a new sort of organization being built inside some companies that “were not traditional BI teams” or “traditional product teams,” but instead brought together “data engineers and data scientists and very capable individuals who [wanted] to make sense of [the] data sitting in the cloud.” Periscope had built “a very impressive business” supporting those new organizations, with “many hundreds of customers,” Orad said.
That meant that Sisense’s pair of focuses were somewhat two of out three, making the corporate combination an obvious bet.
Regarding what changed as Sisense grew, cresting the $50 million ARR mark and later the $100 million ARR mark, Orad told TechCrunch that what differed was “scale,” saying that at its size “what you do impacts more people, more individuals, more companies, [and] more customers.” (I have interesting notes on how the two companies managed their combination from a culture perspective, let me know if you’d like to read them.)
SiteMinder: AU$100 million ARR
The first Australian member of the nine-figure ARR club is SiteMinder, which we’re letting in on a technicality; the firm’s ARR figure is in Australian dollars, which works out to around $70 million USD. However, its growth curve appears steep so we’re not too worried about including it a little early from a domestic dollar perspective.
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Lowkey.gg is an esports tournament platform for adult gamers
It’s tough to be a competitive gamer once you’re an adult. Simply fitting tournament time into a busy schedule is challenge enough, but even if you can make the time, where do you go to find other adults who are competitively playing the games you love?
That’s where Lowkey.gg comes in. Lowkey.gg is a tournament platform for adult gamers. The company is particularly focused on helping professional organizations set up their esports squads just like company basketball or softball teams.
One of the challenges here is that it’s incredibly difficult for adult gamers to find each other. Most of them don’t usually broadcast their affinity for video games. Searching for other competitive gamers who are above the age of 18 is a bit of a lost cause.
The hope for Lowkey is that they can connect adult gamers with one another to get the most out of their gaming experience. Everyone playing through Lowkey must be 18 years of age or older and have a full-time job.
Users can register as a solo gamer for $39, plus a subscription fee of $13/month, and get automatically matched with a team. Lowkey takes into account things like location, job, alma mater and other bits of information (all shown on your public Lowkey profile) to create teams with like-minded players. The company says this transparency reduces the toxicity around teammates. Conversely, users also can form a squad in real life and sign up as a pre-made team for $195/month.
Thus far, Lowkey has signed up teams from Google, Apple, Robinhood and Twitch.
Lowkey is launching with League of Legends as its first game, and Season 1 starts on January 13.
Seasons last a minimum of eight weeks, with players scheduled to play for one hour one night a week. Lowkey has also built a relatively sophisticated Discord chatbot that lets users check in to say they’re ready for a game and automatically puts the teams in a chat together to coordinate the match.
Like many startups, Lowkey is actually the result of a pivot. The company was originally called Camelot.
In March of 2017, Camelot launched out of YC to allow YouTube and Twitch audiences to pay to see what they want. Users could submit bounties to see their favorite YouTuber play a game with pistols only, or to play a game while standing on a skateboard.
Turns out, there were two big issues. Co-founder Jesse Zhang explained that it wasn’t sustainable to build a platform on top of a platform, particularly a platform that is incredibly top heavy and potentially overhyped.
“Sometimes hype can be misaligned with the size of the market, and it felt like streaming was one example of that,” said Zhang. “Even after we organically got several really large streamers using it, and the product performed almost perfectly, the volume is still not nearly the scale that you could turn into a real business.”
Which brings us to the second issue. The money that flows through Twitch from viewers to streamers is almost always based on altruism and emotion. It’s exciting to hear your favorite streamer thank you for a $5 donation or gifted sub. Viewers aren’t paying for the content; they’re paying for a connection.
So Camelot quickly went back to the drawing board and came out on the other side as Lowkey.gg.
Lowkey has raised capital but declined to share the amount. After the launch of League of Legends, the company plans to launch seasons for other titles, including Overwatch, TFT, DotA and Smash Ultimate.
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Trifo raises $15M, announces new robot vacuum
Just over two years ago, PerceptIn announced an $8 million Series A. The funding followed a $2 million seed round, and found the startup essentially coming out of stealth to showcase the sensors it was building for a wide range of form factors, from cars to robot vacuums.
The company’s been quite busy in the meantime. In fact, it even went so far as changing its name. PerceptIn is now “Trifo” — a punchier name, if not quite as memorable. The company’s currently on its third robotic vacuum, announced today and set to be officially unveiled at CES in a few days.
Along with the arrival of “Lucy” comes some more big funding from the Samsung Ventures-supported startup. Trifo has just raised a $15 million Series B, bringing its total funding up to $26 million. The round includes backing from Yidu Cloud, Tsinghua AI Fund and Matrix Partners, with a focus on producing more hardware and software solutions in the home robotics space, additional hiring and pushing into the U.S. and European markets.
For now, robot vacuums appear to be the company’s primary public-facing output. It’s a tough market — one that’s traditionally been dominated by one player (iRobot). Still, there’s no shortage of alternatives from players big and small looking to crack it.
As for what sets Lucy apart, there are a pair of cameras on board — that could either be a plus or minus, depending on where you land on matters of privacy. The pair combine 1080p color images with depth sensing to provide home surveillance and mapping in light and dark settings. The robot can also be designed to “patrol” the home in predefined routes.
Lucy also features built-in obstacle avoidance for objects as short as one inch, room-by-room cleaning and and a 5,200 mAh battery for up to two hours of cleaning on a charge. Pricing is $799, putting it in line with iRobot’s offerings. It’s set to arrive at some point in Q1.
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Airbnb’s New Year’s Eve guest volume shows its falling growth rate
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
It’s finally 2020, the year that should bring us a direct listing from home-sharing giant Airbnb, a technology company valued at tens of billions of dollars. The company’s flotation will be a key event in this coming year’s technology exit market. Expect the NYSE and Nasdaq to compete for the listing, bankers to queue to take part, and endless media coverage.
Given that that’s ahead, we’re going to take periodic looks at Airbnb as we tick closer to its eventual public market debut. And that means that this morning we’re looking back through time to see how fast the company has grown by using a quirky data point.
Airbnb releases a regular tally of its expected “guest stays” for New Year’s Eve each year, including 2019. We can therefore look back in time, tracking how quickly (or not) Airbnb’s New Year Eve guest tally has risen. This exercise will provide a loose, but fun proxy for the company’s growth as a whole.
The numbers
Before we look into the figures themselves, keep in mind that we are looking at a guest figure which is at best a proxy for revenue. We don’t know the revenue mix of the guest stays, for example, meaning that Airbnb could have seen a 10% drop in per-guest revenue this New Year’s Eve — even with more guest stays — and we’d have no idea.
So, the cliche about grains of salt and taking, please.
But as more guests tends to mean more rentals which points towards more revenue, the New Year’s Eve figures are useful as we work to understand how quickly Airbnb is growing now compared to how fast it grew in the past. The faster the company is expanding today, the more it’s worth. And given recent news that the company has ditched profitability in favor of boosting its sales and marketing spend (leading to sharp, regular deficits in its quarterly results), how fast Airbnb can grow through higher spend is a key question for the highly-backed, San Francisco-based private company.
Here’s the tally of guest stays in Airbnb’s during New Years Eve (data via CNBC, Jon Erlichman, Airbnb), and their resulting year-over-year growth rates:
- 2009: 1,400
- 2010: 6,000 (+329%)
- 2011: 3,1000 (+417%)
- 2012: 108,000 (248%)
- 2013: 250,000 (+131%)
- 2014: 540,000 (+116%)
- 2015: 1,100,000 (+104%)
- 2016: 2,000,000 (+82%)
- 2017: 3,000,000 (+50%)
- 2018: 3,700,000 (+23%)
- 2019: 4,500,000 (+22%)
In chart form, that looks like this:
Let’s talk about a few things that stand out. First is that the company’s growth rate managed to stay over 100% for as long as it did. In case you’re a SaaS fan, what Airbnb pulled off in its early years (again, using this fun proxy for revenue growth) was far better than a triple-triple-double-double-double.
Next, the company’s growth rate in percentage terms has slowed dramatically, including in 2019. At the same time the firm managed to re-accelerate its gross guest growth in 2019. In numerical terms, Airbnb added 1,000,000 New Year’s Eve guest stays in 2017, 700,000 in 2018, and 800,000 in 2019. So 2019’s gross adds was not a record, but it was a better result than its year-ago tally.
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Counting down Boston’s biggest venture rounds from 2019
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today, the last day of 2019, we’re taking a second look at Boston. Regular readers of this column will recall that we recently took a peek at Boston’s startup ecosystem, and that we compiled a short countdown of the largest rounds that took place this year in Utah. Today we’re doing the latter with the former.
What follows is a countdown of Boston’s seven largest venture rounds from the year, including details concerning what the company does and who backed it. We’re also taking a shot after each entry at where we think the companies are on the path to going public.
As before, we’re using Crunchbase data for this project (here). And we’re only looking at venture rounds, so no post-IPO action, no grants, no secondaries, no debt, and no private equity-style buyouts.
Ready? Let’s have some fun.
Countdown
Boston has produced a number of big exits in recent years, like Carbon Black’s IPO, DraftKings’ impending kinda-IPO, Cayan’s billion-dollar exit, and SimpliVity’s huge sale to HP. Despite that, however, Boston is often pigeon-holed as a biotech hotbed with little technology that folks from San Francisco can understand. That’s not really fair, it turns out. There’s plenty of SaaS in Boston.
As you read the list, keep tabs on what percent of the companies included you were already familiar with. These are startups that will to take up more and more media attention as they march towards the public markets. It’s better to know them now than later.
Following the pattern set with Utah, we’ll start at the smallest round of our group and then count up to the largest.
7. Motif FoodWorks’ $90 million Series A
We could actually call the Motif FoodWorks‘ Series A a $117.5 million round as it came in two parts. However, the first tranche was $90 million total and landed in 2019 so that’s our selection for the uses of this post. The company is backed by Fonterra Ventures, Louis Dreyfus Corp, and General Atlantic.
Motif works in the alternative food space, creating things like fake meat and alt-dairy. Given the meteoric rise of Beyond Meat and Impossible Food’s big year, the space is hot. Lots of folks want to eat less meat for ethical or ecological reasons (often the two intertwine). That demand is powering a number of companies forward. Motif is riding a powerful wave.
The company’s known raised capital is encompassed in a large, early-stage round. That means that we won’t see an S-1 from this company for a long, long time.
6. Klaviyo’s $150 million Series B
An email marketing and analytics company, Klaviyo gets point for having a pricing page that actually makes sense — a rarity in the enterprise software world.
The Boston-based company was founded in 2012 and, according to Crunchbase data, has raised a total of $158.5 million. It raised just $8.5 million in total (across a small Seed round and a modest Series A) before its mega-round. How did it manage to raise such an enormous infusion in one go? As TechCrunch reported when the round was announced in April of this year:
The company is growing in leaps and bounds. It currently has 12,000 customers. To put that into perspective, it had just 1,000 at the end of 2016 and 5,000 at the end of 2017.
That will get the attention of anyone with a checkbook. The Summit Partners and Astral Capital-backed company has huge capital reserves for what we presume is the first time in its life. That means it’s not going public any time soon, even if our back-of-the-napkin math puts it comfortably over the $100 million ARR mark (warning: estimates were used in the creation of that number).
5. ezCater’s $150 million Series D
ezCater is an online catering marketplace. That’s an attractive business, it turns out, as evinced by the Boston company’s funding history. The startup has raised over $300 million to date according to Crunchbase, including capital from Insight Partners, ICONIQ Capital, Wellington Management, GIC, and Lightspeed.
The company’s 2019 $150 million Series D-1 that valued the company at $1.25 billion wasn’t its only nine-figure round; ezCater’s 2018 Series D was also over the mark, weighing in at $100 million.
When might the Northeast unicorn go public? An interview earlier this year put 2021 on the map as a target for the startup. That’s ages away from now, sadly, as I’d love to know how the company’s gross margin have changed since it started raising venture capital in huge gulps.
4. Cybereason’s $200 million Series E
Cybereason competes with CrowdStrike. That’s a good space to play in as CrowStrike went public earlier this year, and it went pretty well. That fact makes the Boston’s endpoint security shop’s $200 million investment pretty easy to understand. Indeed, CrowdStrike went public to great effect in June of 2019; Cybereason announced its huge round two months later in August. Surprise.
As far as backing goes, Cybereason has friends at SoftBank, with the Japanese conglomerate leading its Series C, D, and E rounds. Prior leads include CRV and Spark Capital.
The market is hot for SaaS-y security companies, meaning that there is natural pressure on Cybereason to go public. The firm, worth a flat $1.0 billion post-money after its latest round, is therefore an obvious IPO candidate for 2020. If it has the guts, that is. With SoftBank in your corner, there’s probably always another $100 million lying around you can snap up to avoid filing. (More from CrowdStrike’s CEO coming later this week on the 2019 and 2020 IPO markets, by the way. Stay tuned.)
3. DataRobot’s $206 million Series E
DataRobot does enterprise AI, allowing companies to use computer intelligence to help their flesh-and-blood staffers do more, more quickly. That’s the gist I got from learning what I could this morning, but as with all things AI I cannot tell you what’s real and what’s not.
Given its investor list, though, I’d bet that DataRobot is onto something. New Enterprise Associates led its 2014, 2016, and 2017 Series A, B, and C rounds. Meritech and Sapphire took over at the Series D, with Sapphire heroing DataRobot’s $206 million Series E. That round creatively valued the firm at, you guessed it, $1.0 billion according to Crunchbase.
DataRobot is hiring like mad (343 open positions as of this morning) and buying other companies (three in 2019). Flush with its largest round ever, I don’t see the company in a hurry to go public. That means no 2020 debut unless it’s monetizing faster than expected.
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InsightFinder gets a $2M seed to automate outage prevention
InsightFinder, a startup from North Carolina based on 15 years of academic research, wants to bring machine learning to system monitoring to automatically identify and fix common issues. Today, the company announced a $2 million seed round.
IDEA Fund Partners, a VC out of Durham, N.C., led the round, with participation from Eight Roads Ventures and Acadia Woods Partners. The company was founded by North Carolina State University professor Helen Gu, who spent 15 years researching this problem before launching the startup in 2015.
Gu also announced that she had brought on former Distil Networks co-founder and CEO Rami Essaid to be chief operating officer. Essaid, who sold his company earlier this year, says his new company focuses on taking a proactive approach to application and infrastructure monitoring.
“We found that these problems happen to be repeatable, and the signals are there. We use artificial intelligence to predict and get out ahead of these issues,” he said. He adds that it’s about using technology to be proactive, and he says that today the software can prevent about half of the issues before they even become problems.
If you’re thinking that this sounds a lot like what Splunk, New Relic and Datadog are doing, you wouldn’t be wrong, but Essaid says that these products take a siloed look at one part of the company technology stack, whereas InsightFinder can act as a layer on top of these solutions to help companies reduce alert noise, track a problem when there are multiple alerts flashing and completely automate issue resolution when possible.
“It’s the only company that can actually take a lot of signals and use them to predict when something’s going to go bad. It doesn’t just help you reduce the alerts and help you find the problem faster, it actually takes all of that data and can crunch it using artificial intelligence to predict and prevent [problems], which nobody else right now is able to do,” Essaid said.
For now, the software is installed on-prem at its current set of customers, but the startup plans to create a SaaS version of the product in 2020 to make it accessible to more customers.
The company launched in 2015, and has been building out the product using a couple of National Science Foundation grants before this investment. Essaid says the product is in use today in 10 large companies (which he can’t name yet), but it doesn’t have any true go-to-market motion. The startup intends to use this investment to begin to develop that in 2020.
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