Startups
Auto Added by WPeMatico
Auto Added by WPeMatico
Over the past half a decade, the tidal wave of niche brands delivering new kinds of products to consumers and doing so online has changed the retail and CPG landscapes forever.
This shift has in some way caused a shakeout in traditional retail, with once-popular retailers announcing store closures (JCPenney, Sears) or even liquidation (Payless, Toys R Us) and has sent fashion houses and CPG brands on a soul-searching journey. The changing demographics and desires of shoppers have also fueled the decline of traditional brands and their distribution mechanisms.
This bleak scenario of incumbent consumer brands is in stark contrast to the rapid emergence of a host of digitally-native Direct to Consumer (D2C) brands. A few D2C brands have been successful enough to become unicorns! Retailers like Walmart, Nordstrom, and Target have quickly adapted to the D2C era.
Walmart has made a string of acquisitions beginning with Jet.com and Bonobos. Nordstrom has broadened its assortment to include D2C brands, Target has partnered with Harry’s, Quip, and Flamingo – all of which have rolled out their products in Target’s stores across the country. Target has also invested in Casper, which is the latest D2C brand to become a Unicorn.
Venture capital firms have invested over four billion dollars in D2C brands since 2012, with 2018 alone accounting for over a billion. With investment comes pressure to scale and deliver profits. And this pressure is bringing the focus on some pertinent questions – How are these D2C brands going to evolve and how could they sustain as businesses?
Like always, the pioneering companies find their path and we then derive the playbooks out of them. From PipeCandy’s analysis of several D2C brands, we see the following approaches taken by D2C brands.
We discuss the market size and capital availability factors that influence the paths and the outcomes.
Many of these D2C brands that have experienced early success owe their rise largely to an authentic relationship with consumers that is built on the promise of one product. In many ways, focusing on one product line and a small set of SKUs makes total business sense.
Design, Production, Marketing & Customer Support complexities can stay manageable with such deliberate narrowing down of focus.
In some categories, you could stay focused on one product line for a long time and build a successful company.
Powered by WPeMatico
Pete Curley and Garret Heaton, who previously co-founded team chat app HipChat and sold it to Atlassian, are officially launching their new product, Swoot, today. The app makes it easy for users to recommend podcasts and see what their friends are listening to.
This might seem like a big leap from selling enterprise software — and indeed, Curley said the company was initially focused on creating another set of team collaboration tools.
What they realized, however, was that HipChat is “actually a consumer product that the company just happens to pay for, because the employees demand it” — and he said they weren’t terribly interested in trying to build a business around a more traditional “top-down sales process.”
Meanwhile, Curley said he’d injured his back while lowering one of his children into a crib, which meant that for months, his only form of exercise was walking. He recalled walking around for hours each day and, for the first time, keeping himself entertained by listening to podcasts.
“I was actually way behind the times,” he said. “I didn’t know this, that everyone else was listening to them … This is like the dark web of content.”
The startup has already raised a $3 million seed funding round led by True Ventures .
“Pete and Garret both have incredible product and entrepreneurial experience, plus they have built successful businesses together in the past,” said True Ventures co-founder Jon Callaghan in a statement. “Their focus of solving the disjointed podcast listening experience through Swoot’s elegant design fills a clear gap in media discovery.”
Discovery — namely, finding new podcasts beyond the handful that you already subscribe to — is one of the biggest issues in podcasting right now. It’s something a number of companies are trying to solve, but in Curley’s view, the key is to make the listening experience more social.
He noted that social sharing features are getting added to “literally everything,” including your bathroom scale, except “the one thing that I actually wanted it for.”
Curley also contrasted the podcast listening experience with YouTube: “We don’t realize how big [podcasting] is because there is no social thing where you see that Gangnam Style has 8 billion views, and you realize that the entire world is watching. There’s no view count, no anything that tells you what’s popular.”
So he’s trying to provide that view with Swoot. Instead of focusing on overall listen counts (which might not be that impressive in a new app), Swoot gives you two main ways to track what’s popular among your friends.
There’s a feed that shows you everything that your friends are listening to or recommending, plus a list of episodes that are currently trending, with little icons showing you the friends who have listened to at least 20 percent of an episode.
Curley said the team has been beta testing the app by simply releasing it on the App Store and telling friends about it, then letting it spread by word of mouth until it was in the hands of around 1,000 users. During that test, it found that 25 percent of the podcasts that users listened to were coming from friends.
Curley also noted that this approach is “episode-centric” rather than “show-centric.” In other words, it’s not just helping you find the next podcast that you want to subscribe to and listen to for years — it also helps surface the specific episode that everyone’s listening to right now.
“In the 700,000 shows that exist, if you’re the 690,000 worst-ranked show, but you have one great episode that should be able to go viral, that’s basically impossible to do right now, because audio is crazy hard to share,” Curley said.
In the course of our conversation, I brought up my experience with Spotify — I like knowing what’s popular, but when a friend recently mentioned specific songs that they could see I’d been listening to on the service, I was a bit creeped out.
“It’s funny, I actually thought, how ironic that Spotify is getting into podcasting now [through the acquisitions of Gimlet and Anchor],” Curley replied. “They actually had this correct mechanism applied to the wrong thing. Music is a deeply personal thing.”
Which isn’t to say that podcast listening isn’t personal, but there’s more of an opportunity to discover overlapping interests, say the fact that you and your friends all listen to true crime podcasts.
Curley also said that the app is deliberately designed to ensure that “the service does not get worse because a ton of people follow you” — so they see what you are listening to, but they can’t comment on it or tell you that you’re an idiot for listening.
At the same time, he also said the team will be adding a mode to only share podcasts you actively recommend, rather than posting everything you listen to.
As for making money, Curley suggested that he’s interested in exploring a variety of possibilities, whether that’s integrating with other subscription or tipping services, or in creating ad opportunities around promoting podcasts.
“My actual answer is, there are a bunch of people trying to monetize right now, but I don’t think there’s a platform even close to mature enough to even try to monetize podcasting yet, other than podcasters doing their own advertising,” he said. “I think the endgame, where the real money is made in podcasting, actually hasn’t been come up with yet.”
Powered by WPeMatico
Spotinst, the cloud automation and optimization startup founded in Tel Aviv but now with offices in San Francisco, New York and London, has acquired AWS partner StratCloud. Terms of the deal remain undisclosed, although I’m hearing it combines both cash and stock and was somewhere in the region of $5 million.
As part of the acquisition, StratCloud’s team of 15 people will be joining Spotinst, including founder Patrick Gartlan, who will become VP, Cloud Services at Spotinst. StratCloud hadn’t raised any venture capital but instead was bootstrapped by Gartlan, who was the former CTO of cloud optimization company CloudCheckr.
Founded in 2015, Spotinst enables enterprises to optimize their cloud infrastructure usage by automating the process of using excess — and therefore cheaper — capacity from leading cloud providers.
As TechCrunch’s Ron Miller previously explained, cloud platforms like AWS, Microsoft Azure and Google Cloud Platform, all of which Spotinst supports, have to maintain more resources than they need at any given time. All three companies offer steep discounts to customers who want to access these resources, but they come with a strict condition that the platforms can take those resources back whenever they need them — which is where Spotinst (and today’s acquisition of StratCloud) comes in.
Spotinst’s platform manages the process of acquiring spare capacity, powered by predictive AI, and seamlessly switches providers before it’s withdrawn. This ensures that cloud computing “workloads” keep functioning, while the customer still receives the best possible price.
Meanwhile, StratCloud tech is described as an “optimization platform” that buys, sells and converts reserved capacity, therefore maximizing savings for on-demand infrastructure. “This leads to lower compute payments, without engineers having to change anything in the applications and infrastructure they manage,” explains Spotinst.
Related to this, Spotinst will migrate StratCloud’s several dozen customers to the Spotinst platform, where they’ll continue to receive all of the current functionality.
Overall, the acquisition means Spotinst can now offer a complete solution for cloud users, including offering reserved instances and unused computer power so that enterprises can run any workload and support large-scale migrations on any cloud provider. In addition, Spotinst says the combined technologies give Managed Service Providers (MSPs) a comprehensive tool to optimize cloud workloads for all of their managed customers.
Spotinst claims more than 1,500 enterprise customers in 52 countries, including Samsung, N26, Duolingo, Ticketmaster and Wix. The company currently employs approximately 150 staff across its four offices and has raised $52 million in VC funding to date.
Powered by WPeMatico
Pinterest priced shares of its stock, “PINS,” above its anticipated range on Wednesday evening, CNBC reports. The company will sell 75 million shares of Class A common stock at $19 apiece in an offering that will attract $1.4 billion in new capital for the visual search engine.
The NYSE-listed business had planned to sell its shares at between $15 to $17 and didn’t increase the size of its planned offering prior to Wednesday’s pricing.
Valued at $12.3 billion in 2017, the initial public offering gives Pinterest a fully diluted market cap of $12.6 billion.
The IPO has been a long time coming for the nearly 10-year-old company led by co-founder and chief executive officer Ben Silbermann . Given Wall Street’s lackluster demand for ride-hailing company Lyft, another consumer technology stock that recently made its Nasdaq debut, it’s unclear just how well Pinterest will perform in the days, weeks, months and years to come. Pinterest is unprofitable like its fellow unicorns Lyft and Uber, but its financials, disclosed in its IPO prospectus, illustrate a clear path to profitability. As for Lyft and Uber, Wall Street analysts, among others, still question whether either of the businesses will ever achieve profitability.
Eric Kim of consumer tech investment firm Goodwater Capital says despite the fact that Pinterest and Lyft are very different companies, Lyft’s falling stock has undoubtedly impacted Pinterest’s offering.
“They are so close together, it’s hard for those not to influence one another,” Kim told TechCrunch. “It’s a much different category, but they are still both consumer tech and they will both be trading at a double-digital revenue multiple.
The San Francisco-based company posted revenue of $755.9 million in the year ending December 31, 2018 — 16 times less than its latest decacorn valuation — on losses of $62.9 million. That’s up from $472.8 million in revenue in 2017 on losses of $130 million.
The stock offering represents a big liquidity event for a handful of investors. Pinterest had raised a modest $1.47 billion in equity funding from Bessemer Venture Partners, which holds a 13.1 percent pre-IPO stake, FirstMark Capital (9.8 percent), Andreessen Horowitz (9.6 percent), Fidelity Investments (7.1 percent) and Valiant Capital Partners (6 percent). Bessemer’s stake is worth upwards of $1 billion. FirstMark and a16z’s shares will be worth more than $700 million each.
Zoom — another tech company going public on Thursday that, unlike its peers, is actually profitable — priced its shares on Wednesday too after increasing the price range of its IPO earlier this week. The price values Zoom at roughly $9 billion, nearly surpassing Pinterest, an impressive feat considering Zoom was last valued at $1 billion in 2017 around when Pinterest’s Series H valued it at a whopping $12.3 billion.
Profitability, as it turns out, may mean more to Wall Street than Silicon Valley thinks.
Powered by WPeMatico
Zoom, a relatively under-the-radar tech unicorn, has defied expectations with its initial public offering. The video conferencing business priced its IPO above its planned range on Wednesday, confirming plans to sell shares of its Nasdaq stock, titled “ZM,” at $36 apiece, CNBC reports.
The company initially planned to price its shares at between $28 and $32 per share, but following big demand for a piece of a profitable tech business, Zoom increased expectations, announcing plans to sell shares at between $33 and $35 apiece.
The offering gives Zoom an initial market cap of roughly $9 billion, or nine times that of its most recent private market valuation.
Zoom plans to sell 9,911,434 shares of Class A common stock in the listing, to bring in about $350 million in new capital.
If you haven’t had the chance to dive into Zoom’s IPO prospectus, here’s a quick run-down of its financials:
Zoom is backed by Emergence Capital, which owns a 12.2 percent pre-IPO stake; Sequoia Capital (11.1 percent); Digital Mobile Venture, a fund affiliated with former Zoom board member Samuel Chen (8.5 percent); and Bucantini Enterprises Limited (5.9 percent), a fund owned by Chinese billionaire Li Ka-shing.
Zoom will debut on the Nasdaq the same day Pinterest will go public on the NYSE. Pinterest, for its part, has priced its shares above its planned range, per The Wall Street Journal.
Powered by WPeMatico
Investors have forked over $33 million in a new round of funding for Redox, hoping that the company can execute on its bid to serve as the link between healthcare providers and the technology companies bringing new digital services to market.
The financing comes just two months after Redox sealed a deal with Microsoft to act as the integration partner connecting Microsoft’s Teams product to electronic health records through the Fast Healthcare Interoperability Resources standard.
Redox sits at a critically important crossroads in the modern healthcare industry. Its founder, a former employee at the electronic health record software provider Epic, knows more than most about the central position that data occupies in U.S. healthcare at the moment.
“What we’re doing, we’re building the platform and connector to help health systems integrate with technologies in the cloud,” says chief executive, Luke Bonney.
Bonney served as a team lead in various divisions at Epic before launching Redox, and the Madison, Wis.-based company was crafted with the challenges other vendors faced when trying to integrate with legacy systems like the health record provider.
“The fundamental problem is helping a large health system use a third-party tool that they want to use,” says Bonney. And the biggest obstacle, he said, is finding a way to organize into a format that application developers can work with the data coming from healthcare providers.
Investors including RRE Ventures, Intermountain Ventures and .406 Ventures joined new investor Battery Ventures in financing the $33 million round. As part of the deal, Battery Ventures general partner Chelsea Stoner will take a seat on the company’s board.
Application developers pay for the number of integrations they have with a health system, and Redox enables them to connect through a standard application programming interface, according to the company.
Its approach allows secure messaging across any format associated with an organization’s electronic health record (EHR), the company said.
Redox works with more than 450 healthcare providers and hundreds of application developers, the company said.
High-profile healthcare networks that work with the company include AdventHealth, Atrium Health, Brigham & Women’s, Clarify Health, Cleveland Clinic, Geisinger, HCA, Healthgrades, Intermountain Healthcare, Invitae, Fitbit, Memorial Sloan Kettering, Microsoft, Ochsner, OSF HealthCare, PointClickCare, R1, ResMed, Stryker, UCSF, University of Pennsylvania and WellStar.
Powered by WPeMatico
With air quality not improving any time soon (hello pollution!), respiratory conditions are on the rise. This has created an opportunity for startups to employ smartphones to monitor respiratory diseases with apps and smart devices.
ResApp’s smartphone app, called ResAppDx, diagnoses a wide range of respiratory illnesses accurately by using cough sounds. Healthymize listens for signals of COPD (chronic obstructive pulmonary disease) when you make calls.
NuvoAir is a new digital therapeutics startup that is also tackling this problem. It has now closed a financing round of $3 million led by venture capital firm Industrifonden, one of the largest life science and tech investors in the Nordics. The round also saw participation from existing investor Investment AB Spiltan.
Aria, NuvoAir’s digital therapeutics software, sends a patient personalized care suggestions based their condition.
NuvoAir aims to make respiratory diseases measurable and more treatable. Established in 2015, NuvoAir launched a smartphone-connected “spirometer,” making real-time lung function assessment possible at home. It has now collected more than 500,000 spirometry tests in the last three years. These tests power its machine learning algorithms to provide insights to patients, their physicians and pharma companies.
Lorenzo Consoli, CEO of NuvoAir, said, “This investment and partnership can significantly advance our focus on digital therapeutics and bring to market new smart devices to help patients manage their condition while improving physicians’ clinical decisions.”
Powered by WPeMatico
Quotes from articles are much more eye-catching than links on Twitter, so the social giant is scooping up the team behind highlight-sharing app Highly. This talent could help Twitter build its own version of Highly or develop other ways to excerpt the best content from websites and get it into the timeline.
Twitter confirmed to TechCrunch that the deal was an acqui-hire, and a spokesperson provided this statement: “We are excited to welcome the Highly team to Twitter. Their expertise will accelerate our product and design thinking around making Twitter more conversational.” We’ve asked about what data portability options Highly will offer.
Highly will shut down its iOS and Slack app on April 26th, though it promises that “No highlights will be harmed.” It’s also making its paid “Crowd Control” for private highlight sharing plus Highly For Teams free in the meantime.
“Social highlights can make sharing stories online feel personal, efficient and alive — like retelling a story to a friend, over coffee. They give people shared context and spark meaningful conversations,” the Highly team writes.
Quotes can make the difference between someone breezing past a link they don’t want to leave Twitter to explore, and getting a peek at what’s smart about an article so they know if it’s worth diving deeper. Many people use OneShot to generate Twitter-formatted screenshots of posts. But Highly lets you just rub your finger over text to turn it into an image with a link back to the article for easy tweeting. You could also search an archive of your past highlights, and follow curators who spot the best quotes. Its browser extensions and native app let you highlight from wherever you read.
Get Highly before Twitter shuts down its appshttps://t.co/3yLbfWW25l pic.twitter.com/xAEMG7oJai
— Josh Constine (@JoshConstine) April 17, 2019
“Sharing highlights, not headlines — sharing thinking instead of lazily linking — helps spark the kind of conversation that leaves participants and observers alike a bit better off than they started. We’d like to see more of this,” the Highly teams writes. That’s why it’s joining Twitter to work on improving conversation health. Founded in 2014, Highly had raised a seed round in 2017.
Twitter’s shift to algorithmic ranking of the timeline means every tweet has to compete to be seen. Blasting out links that are a chore to open and read can lead to low engagement, causing Twitter to show it to fewer people. Tools like Highly can give tweeters a leg up. And if Twitter can build these tools right into its service, it could allow more people to create appealing tweets so they actually feel heard.
Powered by WPeMatico
Sick of pausing and rewinding YouTube tutorials to replay that tricky part? Jumprope is a new instructional social network offering a powerful how-to video slideshow creation tool. Jumprope helps people make step-by-step guides to cooking, beauty, crafts, parenting and more using voice-overed looping GIFs for each phase. And creators can export their whole lesson for sharing on Instagram, YouTube or wherever.
Jumprope officially launches its iOS app today with plenty of how-tos for making chocolate chip bars, Easter eggs, flower boxes or fierce eyebrows. “By switching from free-form linear video to something much more structured, we can make it much easier for people to share their knowledge and hacks,” says Jumprope co-founder and CEO Jake Poses.
The rise of Snapchat Stories and Pinterest have made people comfortable jumping on camera and showing off their niche interests. By building a new medium, Jumprope could become the home for rapid-fire learning. And because viewers will have tons of purchase intent for the makeup, art supplies or equipment they’ll need to follow along, Jumprope could make serious cash off ads or affiliate commerce.
The opportunity to bring instruction manuals into the mobile video era has attracted a $4.5 million seed round led by Lightspeed Venture Partners and joined by strategic angels like Adobe Chief Product Officer Scott Belsky and Thumbtack co-founders Marco Zappacosta and Jonathan Swanson. People are already devouring casual education content on HGTV and the Food Network, but Jumprope democratizes its creation.
Jumprope co-founders (from left): CTO Travis Johnson and CEO Jake Poses
The idea came from a deeply personal place for Poses. “My brother has pretty severe learning differences, and so growing up with him gave me this appreciation for figuring out how to break things down and explain them to people,” Poses reveals. “I think that attached me to this problem of ‘how do you organize information so it’s simple and easy to understand?’ Lots and lots of people have this information trapped in their heads because there isn’t a way to easily share that.”
Poses was formerly the VP of Product at Thumbtack where he helped grow the company from 8 to 500 people and a $1.25 billion valuation. He teamed up with AppNexus’ VP of engineering Travis Johnson, who’d been leading a 50-person team of coders. “The product takes people who have knowledge and passion but not the skill to make video [and gives them] guard rails that make it easy to communicate,” Poses explains.
Disrupting incumbents like YouTube’s grip on viewers might take years, but Jumprope sees its guide creation and export tool as a way to infiltrate and steal their users. That strategy mirrors how TikTok’s watermarked exports colonized the web.
Jumprope lays out everything you’ll need to upload, including a cover image, introduction video, supplies list and all your steps. For each, you’ll record a video that you can then enhance with voice-over, increased speed, music and filters.
Creators are free to suggest their own products or enter affiliate links to monetize their videos. Once it has enough viewers, Jumprope plans to introduce advertising, but it could also add tipping, subscriptions, paid how-tos or brand sponsorship options down the line. Creators can export their lessons with five different border themes and seven different aspect ratios for posting to Instagram’s feed, IGTV, Snapchat Stories, YouTube or embedding on their blog.
“Like with Stories, you basically tap through at your own pace,” Poses says of the viewing experience. Jumprope offers some rudimentary discovery through categories, themed collections or what’s new and popular. The startup has done extensive legwork to sign up featured creators in all its top categories. That means Jumprope’s catalog is already extensive, with food guides ranging from cinnabuns to pot roasts to how to perfectly chop an onion.
“You’re not constantly dealing with the frustration of cooking something and trying to start and stop the video with greasy hands. And if you don’t want all the details, you can tap through it much faster” than trying to skim a YouTube video or blog post, Poses tells me. Next the company wants to build a commenting feature where you can leave notes, substitution suggestions and more on each step of a guide.
Poses claims there’s no one building a direct competitor to its mobile video how-to editor. But he admits it will be an uphill climb to displace viewership on Instagram and YouTube. One challenge facing Jumprope is that most people aren’t hunting down how-to videos every day. The app will have to work to remind users it exists and that they shouldn’t just go with the lazy default of letting Google recommend the videos it hosts.
The internet has gathered communities around every conceivable interest. But greater access to creation and consumption necessitates better tools for production and curation. As we move from a material to an experiential culture, people crave skills that will help them forge memories and contribute to the world around them. Jumprope makes it a lot less work to leap into the life of a guru.
You can watch my first Jumprope here or below to learn how to tie up headphones without knots:
Powered by WPeMatico
Five years ago, Dynamic Yield was courting an investment from The New York Times as it looked to shift how publishers paywalled their content. Last month, Chicago-based fast food king McDonald’s bought the Israeli company for $300 million, a source told TechCrunch, with the purpose of rethinking how people order drive-thru chicken nuggets.
The pivot from courting the grey lady to the golden arches isn’t as drastic as it sounds. In a lot of ways, it’s the result of the company learning to say “no” to certain customers. At least, that’s what Bessemer’s Adam Fisher tells us.
The Exit is a new series at TechCrunch. It’s an exit interview of sorts with a VC who was in the right place at the right time but made the right call on an investment that paid off.
Fisher
Fisher was Dynamic Yield founder Liad Agmon’s first call when he started looking for funds from institutional investors. Bessemer bankrolled the bulk of a $1.7 million funding round which valued the startup at $5 million pre-money back in 2013. The firm ended up putting about $15 million into Dynamic Yield, which raised ~$85 million in total from backers including Marker Capital, Union Tech Ventures, Baidu and The New York Times.
Fisher and I chatted at length about the company’s challenging rise and how Israel’s tech scene is still being underestimated. Fisher has 11 years at Bessemer under his belt and 14 exits including Wix, Intucell, Ravello and Leaba.
The interview has been edited for length and clarity.
Lucas Matney: So, right off the bat, how exactly did this tool initially built for publishers end up becoming something that McDonalds wanted?
Adam Fisher: I mean, the story of Dynamic Yield is unique. Liad, the founder and CEO, he was an entrepreneur in residence in our Herzliya office back in 2011. I’d identified him earlier from his previous company, and I just said, ‘Well, that’s the kind of guy I’d love to work with.’ I didn’t like his previous company, but there was something about his charisma, his technology background, his youth, which I just felt like “Wow, he’s going to do something interesting.” And so when he sold his previous company, coincidentally to another Chicago based company called Sears, I invited him and I think he found it very flattering, so he joined us as an EIR.
And really only at the very end of his residence did he come up with this idea that would become Dynamic Yield. He came about it very much focused on the problem he saw with publishers being outwitted by ad buyers. He felt like all the big publishers really didn’t understand their digital businesses, didn’t understand their users, didn’t understand how performance ad buying was working, and he began to build a product that could dynamically optimize a publisher’s website to maximize revenue, hence the yield … the dynamic yield.
But very quickly, we told him, ‘That’s interesting, but we’re not sure how big that market is. And, you know it’s not always great to sell to those kind of weak customers. Sometimes they’re weak for a reason.’
Powered by WPeMatico