Startups
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“No bad conversations between companies and their customers is what we’re shooting for,” Kair Käsper tells me. He’s the head of Growth of a relatively new startup called Klaus, which he founded together with old high school friend Martin Kõiva.
Most recently the pair were employees at Pipedrive, holding the roles of director of Product Marketing and global head of Customer Support, respectively. Many years prior to that they shared a flat together and worked on a number of projects. One of those was an applicant-tracking startup called Jobkitten “that didn’t really go anywhere.”
The latest Käsper and Kõiva venture, however, appears to already be on firmer footing. Described as a “conversation review and QA tool for support teams,” Klaus is designed to help companies improve the quality of customer service. Two years in the making but only launched formally six months ago, customers already include Automattic, Wistia and Soundcloud. And today the Estonian startup is disclosing $1.9 million in seed funding led by Creandum, the first Baltic investment by the Swedish VC firm and the first from its new fund.
“The problem is that maintaining an even, high level of customer service quality is hard,” explains Käsper. “It becomes even harder if you have over 20,000 monthly conversations with customers and your support team is 100 people in three offices.
“As the head of customer support, you want everyone on your team to provide answers that meet with internal standards, regardless of how long they’ve been with the company or how seriously they take their job. You get very anxious in this situation, because you have no idea about what’s going on in those thousands of conversations. For you, no visibility means no control.”
He says that his and Kõiva’s firsthand experience at Pipedrive taught them that the key to quality assurance is going through past interactions and giving systematic feedback to agents. “Kind of like code review in engineering or the editorial process in writing,” he says. “Teams all over the world are discovering this now, but they almost always start with a manual process, managed in spreadsheets. They get stuck fast.”
To make this type of feedback loop more scalable, Klaus has created a purpose-built UI for giving internal feedback. Smartly, it also integrates with modern SaaS help desk solutions, such as Zendesk and Intercom.
“[The software also has] countless specialized features that allow you to focus on the actual feedback instead of managing a spreadsheet,” adds the Klaus head of Growth. They include the ability to easily filter out conversations for review, rate them based on a customized score card and notify agents of received feedback through email or Slack.
Meanwhile, the young company makes money by charging a monthly or yearly subscription fee based on how many users are connected to its app. In other words, just like Pipedrive before it, another classic enterprise SaaS play out of Estonia.
Update: An earlier version of this article wrongly said that Kair Käsper is CEO of Klaus; his job title is actually head of Growth.
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Cubyn, the Paris-based logistics startup that lets e-merchants outsource fulfillment and delivery logistics, has raised €12 million in new funding. The round is led by DN Capital, with participation from Partech Ventures, 360 Capital Partners, BNP Paribas Développement and the French investment bank BPI France.
The injection of capital is timed with the launch of “Cubyn Fulfillment,” as the company moves beyond pickup and delivery only. The new service is described as a fully integrated “first mile” solution that covers the entire fulfillment process, including keeping stock in Cubyn’s warehouses. It claims to be offered at a 30% lower price point than competitors.
“We want to make affordable world-class logistics accessible to every single e-merchant, whatever their size,” Cubyn co-founder and CEO Adrien Fernandez Baca tells TechCrunch. “Our typical customer is an e-merchant who sells across sales channels (marketplaces their own website). Size can go from 500 to 50,000 orders shipped per month.”
Launched in 2015, Cubyn says that in four years it has made more than 2 million shipments. It also reckons that because its tech is “built from the ground up,” the startup is well positioned to tackle fulfillment more efficiently than legacy players.
“Most direct competitors are the traditional third-party logistics players who missed the e-commerce revolution and lack technology intelligence,” says Baca. “We are 30% cheaper, with simpler multi-channel integrations and higher delivery quality. Less direct competitors are the fulfillment offer of marketplaces. They do offer a good logistics experience at a good price, but only for orders going through their marketplace.”
This, he argues, means there is a big gap in the market for a solution geared at multi-channel e-merchants. “We are marketplace agnostic and offer a seamless and high-quality multi-channel logistics,” adds the Cubyn CEO.
Specifically, the way the new Cubyn Fulfillment product works is as follows: An e-merchant signs up to Cubyn and plugs in their various sales channels, such as Amazon, Rakuten, eBay, Shopify etc. They then send Cubyn an appropriate amount of inventory to fulfill future orders, which is stored temporarily in a Cubyn warehouse. When an order is placed, Cubyn automatically packs the order and ships via the most suitable carrier to optimise for transit time and cost.
“Our customers pay based on the number of parcels they ship,” explains Baca. “Logistics is a game of volume and thanks to technology we can manage volumes that couldn’t be managed by historical players. This allow us to offer… cheaper prices and still have great margins.”
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Hot startup Superhuman has been getting some backlash, as often happens when someone notices the precise methodology that a startup is using to enable a core feature. We’re well into stage 2 now when, inevitably, the backlash itself gets backlash.
The nut of it is that people have been exposed to the idea that Superhuman tracks email you send and receive and gives you tools to help you manage it. They do it on your behalf, but without the permission of the recipient.
You can read a review of the service by Lucas Matney, who spent six months with it, here on TC.
The best thing about all of this defense against the backlash chatter coming in is that the backlash itself is really not specious at all. People are literally just pointing out what they do, which is track email. And it provides real, genuine value.
This isn’t a new idea. It’s done by every marketing platform worth a darn that uses email. Every single email that comes in from a BRAND has some sort of this stuff happening. As do all websites (including this one). People are just not used to it being applied to a consumer product as intimate as personal email, and that sort of in-your-face use of commerce-grade tracking is perking up ears.
A few years back a startup founder with a suite of productivity apps (not Superhuman) asked me about this cool new feature they were planning on shipping: email tracking for senders, built right in. Read receipts and action items and all kinds of cool-sounding stuff to make your life easier. He was asking what I thought of it, and whether Apple would have an issue with it if they shipped it on the store.
I told him it sounded like a great idea, but that I would be very cautions of actually rolling it out because it was impossible to get verification from the other side before you began tracking them. There was no opt-in.
I advised him to look at the way Apple handles it, where email tracking happens outside the body of the email in a sort of passive radar fashion. Instead of active “pings” using tracking pixels or other image-hosting tricks, you’re getting a lighter client-side data set to work from. It’s opt in on your side, and doesn’t extend to them.
I warned on it for the same reason that I opt out of services that route my work email through their own servers, I choose not to employ any tracking apps and set up my emails not to auto-display images. It’s not because I don’t want actionable insights, it’s because I am unable to obtain the permission of the people I send it to to begin tracking them.
Yeah, for sure, they’re already tracked 10 ways to Sunday by every spam email from Groupon to The Gap, but this is coming from me, an individual. It’s different, in my opinion, which is why people are reacting the way they are.
Flash forward and now we’ve got a very well-capitalized startup with this at the core of their business. It seems like the founders have thought a lot about this and have decided that this tracking is good and defensible. So it shouldn’t be a shock when it comes time to defend those choices.
If you’re a founder, I think that’s a core lesson: always be willing to die on whatever hill you’re building.
I don’t think that the chatter about the tracking feature of Superhuman is a case of people turning on a startup that has become successful. Superhuman is very new, but very buzzy. And, as I said above, the backlash mostly consists of people highlighting their marquee features in detail. I’d bet a lot of people became even more interested in what it’s doing reading the various and sundry tweets and posts about it, including a Big Profile post in the NYT that kicked off this latest round of discussion.
We’ve been covering Superhuman for a few years now, including detailed explanations of what they want to accomplish and what the origins of the product and team are. That’s pretty much our job — to make sure we see this stuff years before anyone else. (We even covered the last startup to use the name Superhuman for a productivity app.)
The tracking has come up in our stories, but I think that people are just more willing to be skeptical of this stuff given the way that the last couple of years have gone. This is something that we have found happening with a lot of privacy issues recently.
In fact, the most astute criticism of the way Superhuman uses tracking came in a post by designer Mike Davidson, who has spent a lot of time working on large systems that have dangerous, as well as exciting, potential. And that post is anything but a “drive-by” on the model. It’s a thoughtful critique that actually offers some possible solutions.
I do think they are trying to solve a real problem. But there are clearly components of the way that they implemented their key feature that have potential for abuse.
It is, and I do find it a bit amusing that I have to say this in twenty-nineteen, OK for people to want to discuss this and to examine the trade offs in a product that makes other people’s privacy choices for them. This isn’t backlash, this is discussion, and it’s good.
One of the reasons that we’ve gotten to a place where large platforms have been able to be mis-used to manipulate audiences at scale is that not enough people were listening to the conversations that were had about these possibilities early enough.
In context, it is very hard to argue that a genuine moment of thoughtfulness about any startup that has traction, raises significant capital and is aiming to have the most users possible see the world from its point of view is a bad thing.
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Podimo, a Copenhagen-based startup building what it hopes will become Europe’s “Netflix for podcasts,” has raised €6 million in seed funding prior to launch. The round is co-led by Germany’s E.ventures and Denmark’s Heartcore, reflecting the young company’s two planned country launches later this year.
Founded by Morten Strunge, who has a track record in subscription media products via audio books service Mofibo (which he sold to Storytel), Podimo is hoping to capitalise on the rise in consumption in podcasts. Ambitiously, this will include both a free and paid version of its product, with the aim of creating a reliable revenue stream for podcast producers. The startup’s other founders are Nikolaj Koppel, Andreas Sachse and Sverre Dueholm.
“Podcasts have finally come of age and we are seeing a lot of demand for audio content globally across many different demographics,” Strunge tells me. “Consumers are increasingly looking for premium, ad-free services and we see a huge potential in the podcasting space.”
The Podimo app has been designed to provide a “superior experience” in discovery and recommendation compared to existing podcast streaming and download services. The idea, says Strunge, is to make it as seamless and easy as possible to find your next podcast.
“We believe that with the fast increasing amount of podcasts available, curation and discovery becomes more and more important to both unfold content in a relevant context and to the right individual user, which will benefit both podcast creators and consumers,” he says.
By launching a freemium model, where a paid version provides unlimited listening and features, Strunge believes there is an opportunity to work closely with podcast creators to strengthen the podcast ecosystem and make it less reliant on advertising revenue. “We want to become the preferred partner for creators, by both working closely with their content, curate and match it with each individual user, but also by offering a superior monetisation model,” he explains.
The hope then is that a more robust revenue stream will enable new podcasters to enter the market and allow existing ones to earn more. In turn that could give podcasters the financial headroom to invest even more time and effort into “creating great content.”
“Our dream is that with around 20% of people in Europe listening to podcasts on a weekly basis, many creators should be able to make a living out of creating podcasts, it shouldn’t just be for the few,” says Strunge, perhaps ignoring the fact that media often scales to become a hits-driven business. “We will offer revenue share to all existing podcasters out there, but also co-produce and produce original content,” he adds.
More broadly, Strunge says he remains a strong believer in audio as a format. He says not only is it easier to listen than it is to read but that podcasts are built for subscriptions. “It’s a short format, actuality driven, series driven and niche and broad at the same time,” says the Podimo CEO.
In addition, production costs are low so it’s possible to keep to a price point below music and VOD services, and Strunge is convinced we will continue to see a significant increase in the number of podcasts produced. This will include the broader market, but also podcasts from more professional media players yet to invest strategically in the audio format.
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TikTok is being investigated in the U.K. for how it handles the safety and personal data of underage users. According to The Guardian, information commissioner Elizabeth Denham told a parliamentary committee that the probe started in February after the U.S. Federal Trade Commission levied a $5.7 million fine against TikTok for breaking children’s privacy law.
Denham told The Guardian that the commission is examining how TikTok collects private data and has concerns about the open messaging system, which may allow adult users to contact children. “We are looking at the transparency tools for children. We’re looking at the messaging system, which is completely open, we’re looking at the kind of videos that are collected and shared by children online. We do have an active investigation into TikTok right now, so watch this space,” she said.
The investigation will also examine if the popular app, owned by ByteDance, violates the General Data Protection Regulation (GDPR), which requires companies to put special protections in place for underage users and provide them with different services than adults.
The FTC’s investigation, which began when TikTok was still known as Musical.ly, ruled that the app broke the Children’s Online Privacy Protection Act by failing to seek parental consent before collecting names, email addresses and other personal information from users under 13. The ruling resulted in an age gate being added to an app that prevents users under 13 from filming and posting videos on it.
ByteDance, the Chinese media startup now valued at $75 billion, told The Guardian in a statement that “We cooperate with organizations such as the ICO to provide relevant information about our product to support their work. Ensuring data protection principles are upheld is a top priority for TikTok.”
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The new era of tech-enabled banks is coming, even in regulation-heavy Japan. Kyash, a fintech company with visions on becoming Japan’s first challenger bank, said today it has raised $14 million to continue its expansion.
To be clear, Kyash isn’t a bank. Yet. But it is currently applying for a host of licenses in Japan that could allow it to offer banking-style features, including checking accounts, ATM withdrawals and money remittance. Right now, it is a payment app that offers a connected Visa card in the style of Monzo, N26, Revolut (which has a Japan license) and others of that ilk.
The startup was founded in 2015 by Shinichi Takatori, a former banker and management consultant who saw the potential to merge tech and finance.
“I really noticed that information and communication has become ubiquitous but money itself hasn’t changed for a long time,” Takatori told TechCrunch in an interview.
The company took some time — two years — before it released a consumer product, but it quickly tied up with Visa to offer a prepaid debit card that connects to the Kyash app. That provides benefits like instant payment notifications, clear balance and lower fees for overseas spending, while costs are borne by merchants rather than users. They might seem elementary today, but they are still not standard among Japan’s traditional banks, Takatori explained.
The company declined to share its user numbers, but Takatori said this new round of funding — Kyash’s Series B — is a validation of the progress it has made.
The $14 million investment is co-led by Goodwater Capital, a U.S. investor that has backed fintech startups like Monzo, Stash and Toss in Korea, and Mitsubishi UFJ Capital, the investment arm of Japan’s largest bank.
Mitsubishi’s involvement means that Kyash counts Japan’s three largest banks as investors, with SMBC and Mizuho having previously put money into the company. Others that took part in this Series B include Toppan Printing, JAFCO and Shinsei Corporate Investment Limited.
So many banks on the cap table might seem like a strange thing for a disruptor — let alone the banks, which tend to behave territorially — but Takatori believes that there’s the potential for cooperation, not to mention that it will help the startup with its licensing efforts. Already, he revealed, Mitsubishi plans to integrate its card with the Kyash app to provide its customers with the best of both worlds.
“We’re not here to win over existing banks, but instead inform [them of] how money should work in next decade,” explained Takatori. “So why not collaborate in some way.”
Kyash has a tie-up with Visa that allows it to offer its customers a connected debit card and also provide issuing services to other fintech startups
There’s also the fact that, even with a license, Kyash and others are unlikely to be able to offer full banking services. That means they will have to serve as complementary offerings to the industry, which would likely mean that cooperation is good — essential — for both sides.
But, beyond the consumer play, a notable piece of Kyash’s business that has investors excited is its B2B payment business.
The company developed its own payment processing system to reduce costs, which is one reason it took time to launch. Thanks to a tie-up with Visa, it offers both issuing and processing of prepaid Visa cards to fintech companies in Japan that want to go down the payment route.
That’s increasingly popular, given the government push to make the country a “cashless society” ahead of the 2020 Olympic Games next year. It also could appeal to crypto companies in Japan, which offers the world’s most robust licensing, that want to follow the example of the Coinbase card in Europe or startups like Crypto.com and TenX, which offer similar prepaid cards.
Takatori said Kyash is “in discussions” with crypto companies, but that it has not made a decision on how to proceed yet. The company is also eyeing potential overseas expansions, although that is some way down the line.
“We have open eyes for globalization, it’s just a matter of when,” he told TechCrunch. “We still have a far way to go [in Japan, but] maybe after the Olympics.”
More pressingly, he sees the company looking to raise a “pretty quick” Series C round to give it acceleration into next year. That’s likely to go to more expansion and user acquisition as the licenses the startup has applied for are unlikely to be granted this year.
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Every year hundreds of startups launch with dreams of becoming the next enterprise software unicorn. And it’s no wonder, given the $500 billion market and the rate at which the enterprise giants snap up emerging players. If you’re the founder of an early-stage enterprise startup, join us for TC Sessions: Enterprise in San Francisco on September 5 at the Yerba Buena Center for the Arts.
Even better, grab the opportunity by the horns and buy a Startup Demo Package. There is limited space available. This is your chance to plant your company in front of some of the most influential enterprise movers and shakers — we’re talking more than 1,000 attendees. Demo tables are reserved for startups with less than $3 million in funding and are available for $2,000, which includes four tickets to the event.
This day-long intensive event features speakers, panel discussions, demos, workshops and world-class networking. Get ready for a head-on, hype-free exploration of the considerable challenges enterprise companies face — regardless of their size.
TechCrunch editors will interview founders and leaders from both established and up-and-coming companies on topics ranging from intelligent marketing automation and the cloud to machine learning and AI. And they’ll question enterprise-focused VCs about where they’re directing their early, middle and late-stage investments.
The full roster of speakers is still to be announced, but here’s a quick hit of who you can expect at TC Sessions: Enterprise.
You’ll hear from Scott Farquhar, co-founder and co-CEO of Atlassian, a company that’s changed the way developers work. Want to hear more about enterprise and the cloud? Snowflake’s co-founder and president of product, Benoit Dageville, will be on hand to talk about the company’s mission to bring the enterprise database to the cloud.
Have someone you want to hear from our stage? Submit your speaker suggestion here.
Pro Tip: For each TC Sessions: Enterprise ticket you buy, we’ll register you for a complimentary Expo Only pass to TechCrunch Disrupt SF on October 2-4.
TC Sessions: Enterprise takes place September 5 at San Francisco’s Yerba Buena Center for the Arts. Don’t miss this opportunity to showcase your early-stage enterprise startup in front of leading enterprise software founders, investors and technologists. Buy your Startup Demo Package today.
Looking for sponsorship opportunities? Contact our TechCrunch team to learn about the benefits associated with sponsoring TC Sessions: Enterprise 2019.
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Sam Lessin, a former product management executive at Facebook and old friend to Mark Zuckerberg, incorporated his latest startup under the name “Fin Exploration Company.”
Why? Well, because he wanted to explore. The company — co-founded alongside Andrew Kortina, best known for launching the successful payments app Venmo — was conceived as a consumer voice assistant in 2015 after the two entrepreneurs realized the impact 24/7 access to a virtual assistant would have on their digital to-do lists.
The thing is, developing an AI assistant capable of booking flights, arranging trips, teaching users how to play poker, identifying places to purchase specific items for a birthday party and answering wide-ranging zany questions like “can you look up a place where I can milk a goat?” requires a whole lot more human power than one might think. Capital-intensive and hard-to-scale, an app for “instantly offloading” chores wasn’t the best business. Neither Lessin nor Kortina will admit to failure, but Fin‘s excursion into B2B enterprise software eight months ago suggests the assistant technology wasn’t a billion-dollar idea.
Staying true to its name, the Fin Exploration Company is exploring again.
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Kabbage, the AI-based small business loans platform backed by SoftBank and others, is adding more firepower to its lending machine: the Atlanta-based startup has secured an additional $200 million in the form of a revolving credit facility from an unnamed subsidiary of a large life insurance company, managed and administered by 20 Gates Management, and Atalaya Capital Management.
The money comes on the heels of a $700 million securitization Kabbage secured just three months ago and it is notable not just for its size but its terms: it’s a four-year facility, a length of time that underscores a level of confidence in the company’s performance.
Kabbage, which loans up to $250,000 in a single deal to small and medium businesses, has built a platform that harnesses the long tail of big data from across the web. It uses not just indicators from a company’s own public activities, but also sources comparative information from across a wider group of similar companies, with “2 million live data connections” currently helping to feed its algorithm.
Together, these help Kabbage determine whether to provide the loans, and at what rates. Notably, the whole process takes mere minutes, making Kabbage disruptive to the traditional route of applying for loans from banks, which can come at higher rates, often take longer to close and may never get approved.
The company was last valued at $1.2 billion in its most recent equity round from the Vision Fund in 2017, with about $500 million raised in equity to date from it and other investors, including BlueRun Ventures and Mohr Davidow Ventures. Rob Frohwein, the co-founder and CEO, confirmed to me via email that there are “no plans on the equity side right now.” We’ve asked about IPO plans and will update if we learn anything more on that front.
More importantly, alongside its equity story is the company’s business story: Kabbage has to date loaned out $7 billion in capital — amassed through securitizations and other facilities alongside that — to 185,000 businesses, and the company has seen an acceleration of business activity over the last two years. Nearly $700 million was loaned out in Q2 of this year, passing the record in Q1 of $600 million. This puts Kabbage on track to loan out between $2.4 billion and $3 billion this year.
“This transaction further diversifies Kabbage’s committed sources of funding and prepares us to meet the escalating demand for capital access among small businesses,” said Kabbage head of Capital Markets, Deepesh Jain, in a statement. “2019 has proven to be a tide-shifting year as customers accessed more than $670 million from Kabbage in Q2 2019, well surpassing our previously set record last quarter.”
While a lot of Kabbage’s business has come out of its direct consumer relationships, it’s also been expanding by way of more third-party relationships. It has white-label partnerships with banks to power their own loan offerings for SMBs, and earlier this year it was also tapped by e-commerce giant Alibaba to provide loans to its small business customers of up to $150,000 to help finance purchases, part of the latter company’s redoubled efforts to build out its business in the U.S. by way of its quiet acquisition of OpenSky.
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Even as much of the world is digitizing its governance, in small towns and villages of India, data about its citizens is still being largely logged on long and thick notebooks. Have they received the subsidized cooking gas cylinders? How frequent are the power cuts in the village? If these data points exist at all, they are probably stored in big paperbacks stacked in a corner of some agency’s office.
Five years ago, two young entrepreneurs — Prukalpa Sankar and Varun Banka — set out to modernize this system. They founded SocialCops, a startup that builds tools that make it easier for government officials — and anyone else — to quickly conduct surveys and maintain digital records that could be accessed from anywhere.
The Indian government was so impressed with SocialCops’ offering that it partnered with the startup on National Data Platform, a project to connect and bring more transparency within many of the state-run initiatives; and Ujjwala Yojana, a project to deliver subsidized cooking gas cylinders to poor women across the nation.
“This is a crucial step towards good governance through which we will be able to monitor everything centrally,” India’s Prime Minister Narendra Modi said of National Data Platform. “It will enable us to effectively monitor every village of the country.”
Two years ago, the duo wondered if the internal tools that they built for their own teams to manage their projects could help data teams around the world? The early results are in: Atlan, a startup they founded using learnings from SocialCops, has secured more than 200 customers from over 50 nations and has raised $2.5 million in pre-Series A funding led by Waterbridge Ventures, an early stage venture fund.
The startup, which employs about 80 people, has also received backing from Ratan Tata, Chairman Emeritus of conglomerate Tata Sons, Rajan Anandan, the former head of Google Southeast Asia, and 500 Startups. On Tuesday, Singapore-headquartered Atlan moved out of stealth mode.
The premise of Atlan’s products is simple. It’s built on the assumption that the way most people in enterprises deal with data is inefficient and broken, Sankar and Banka told TechCrunch in an interview. Typically, there is no central system to keep track of all these data points that often live in their own silos. This often results in people spending days to figure out what their compliance policy is, for instance.
“Atlan wants to democratize data inside organizations,” said Sankar.
Teams within a typical company currently use a number of different tools to gather and manage data. Atlan has built products — dubbed Discovery, Grid, and Workflows — to create a collaboration layer, bringing together diverse data (from internal and external sources), tools and people to one interface.
“We are reimagining every human interaction with data. For instance, code has a profile on GitHub—what would a “profile” of data look like? What if you could share data as easily as a Google Sheets link, without worrying about the size or format? Or what would a data versioning and approval workflow look like? What if data scientists could acquire external data within minutes, instead of the months it takes right now?” said Banka.
The startup has also built a product called Collect that allows an organization to quickly deploy apps to collect granular data. These apps can collect data even when there is no internet connection. All of these data points, too, then find their way to the interface.
Atlan intends to use the capital it has raised on product development and sign more customers. It has already won some big names including Unilever, Milkbasket, Barbeque Nation, WPP and GroupM, Mahindra Group and InMobi in India, Chuan Lim Construction in Singapore, ServeHaiti in Haiti, Swansea University in the UK, the Ministry of Environment in Costa Rica, and Varun Beverages in Zambia.
In a prepared statement, Manish Kheterpal, Managing Partner at WaterBridge Ventures, said, “companies are struggling to overcome the friction that arises when diverse individuals need to collaborate, leading to project failure. The IPOs of companies like Slack and Zoom are proof that we live in the era of consumerization of the enterprise. With its sharp focus on data democratization, Atlan is well-positioned to reimagine the future of how data teams work.”
As for SocialCops, Sankar said it will live on as a data science community and pursue its signature “social good” mission.
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