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Baillie Gifford’s Charles Plowden on 110 years of investing
“It is our contention that the investment industry may be experiencing a peak of its own, in this case the point of the maximum rate at which it extracts value from its clients’ assets. Let’s call it Peak Gravy.” That’s a recent quote from Tom Coutts, who is one of a few dozen partners at Baillie Gifford (See Arman Tabatabai’s profile here). It’s also typical of the provocative sentiments offered by this band of fund managers who are based in Edinburgh, but scour the world looking for opportunities.
In an effort to distinguish its world view, the firm has introduced the somewhat eyebrow-raising tagline, “We’re actual investors.” For many US technology observers, though, Baillie Gifford is known for its investments in unicorns. But as Extra Crunch’s executive editor Danny Crichton and I found out in a recent conversation with Charles Plowden (one of two senior partners and the overseer of the firm’s investment departments), there’s a lot more to the story and motivations behind this unique 110-year-old partnership that’s still going strong.
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Verified Expert Brand Designer: Character
Character is celebrating its 20-year anniversary this year, and this SF-based branding and design agency has a lot to be proud of. Founded by Ben Pham, Tish Evangelista, and Rishi Shourie, Character has helped startups like Doordash, Glint, Molekule, and many others, launch their companies into the world. We interviewed co-founder Ben Pham about Character’s early days, their commitment to collaborating with mission-driven founders, and why relationships define who they are and what they do as a branding firm.
On working with entrepreneurs:
“When you have an opportunity to sit in the room, hear how passionate they are, how they left a cushy job, and this is their mission, it’s inspiring. Oftentimes, it’s not financially motivated for them. It’s not about their ego. You think about that, and you’re like, “Wow, I get to be in this room with someone that’s really passionate” and we start believing in it. We have to believe in what they’re creating, and we have to believe that they’re leaving a positive impact on our culture. We want to make sure founders are contributing in a positive way. We believe in the people that we’re working with and what they’re doing.”
“The Character team was extremely creative and easy to work with, always open to exploring new ideas.” Howard Nuk, SF, Co-founder at Palm
Character’s branding philosophy:
Great brands, for us, is about relationships. It’s a long-lasting relationship, and those relationships are earned. We think of brands like a character within a story. They have a unique characteristic about them. When you have dinner parties, you’re inviting people into your home who you’re going to enjoy the next three hours drinking wine, eating food, and just talking to them. You always know who you’re going to invite and the dynamic of the room. We think about brands in the same way.
Below, you’ll find the rest of the founder reviews, the full interview, and more details like pricing and fee structures. This profile is part of our ongoing series covering startup brand designers and agencies with whom founders love to work, based on this survey and our own research. The survey is open indefinitely, so please fill it out if you haven’t already.
Interview with Character’s Creative Director & Co-Founder Ben Pham
Yvonne Leow: What’s Character’s origin story? How did it get started?
Ben Pham: We started in 1999, and the reason why we started our agency was, in 1999 if you were in San Francisco, and practicing graphic design during that time, a lot of our work was coming from biotech, and technology companies. Those companies did not look like the life science, biotech companies that we see today, because they were not lifestyle companies. Tech companies, during that time, did not look like lifestyle companies. We’re like, “Well, that’s not an area that we’re really interested in.” We felt like, you know, in southern California to LA, and New York, a lot of branding agencies were focusing on consumer lifestyle brands. Fashion, apparel, interior, and nobody was really doing that in San Francisco, and that was something that we were interested in. So we were like, “Let’s do that.”
As a result, we landed our first project, which is branding for Pottery Barn Kids. That really was a very different way of thinking about branding for kids, because most time, people think of bright primary colors, jumbled type. We realized that kids are not our target audience, it’s really parents, so we made a smooth and sophisticated system. And that got a lot of attention for Character, and then we went on to work with Gary Friedman, the CEO of Restoration Hardware.
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ReachFive manages logins and accounts for e-commerce platforms
French startup ReachFive wants to become Stripe for account management. The company just raised a $10 million Series A funding round led by CapHorn Invest, with Dawn Capital and Ventech also participating — investment bank Avolta Partners handled the fundraising process.
When you buy something on an e-commerce website or app, chances are those companies asked you to create an account before entering your address and payment information. ReachFive creates the login module for dozens of e-commerce and transactional companies.
This isn’t just about storing an email and password. ReachFive lets you do interesting things with your customer database. For instance, ReachFive works across different channels.
If you shop on L’Occitane’s website and then purchase cosmetics in a store, they can find your account. This way, you get accurate information about your customers. ReachFive complies with GDPR.
ReachFive also supports social logins, such as Facebook Connect or “Sign in with Google.” The company also supports two-factor authentication. And, of course, you can integrate ReachFive with other services, such as a CRM, a CMS, a recommendation engine, etc.
If you’re creating a brand from scratch, you might rely heavily on newsletters and content. You can let people sign up to the newsletter without creating a full-fledged account. They can create an account when they make their first purchase later down the road — ReachFive will reconcile profiles.
Forty companies are using ReachFive, including Boulanger, Etam Group, L’Occitane, Hachette Group, Engie and La Redoute. The startup manages 40 million user accounts overall. The company uses a software-as-a-service pricing model, and you can be sure that each contract must be quite valuable.
ReachFive proves that an omnichannel strategy doesn’t just mean that you should merge your inventories and catalogs across your online and offline platforms. It also means that you should be able to provide a unified customer experience by understanding a customer from start to finish.
Big retail companies have already unified their user accounts — when you buy an Apple product in an Apple store, you can see the receipt in your online account. But ReachFive could become an essential widget for all mid-tier e-commerce platforms.
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Public health startup Cityblock raises $65M Series B
Redpoint Ventures has led a $65 million Series B in Cityblock, a healthcare company focused on providing improved care to low-income neighborhoods.
The business launched roughly 18 months ago out of Alphabet’s Sidewalk Labs, an urban innovation incubator known for projects like mobility data startup Coord, which itself raised a $5 million round in October.
“We’re a tech-enabled services company focused on caring for a population that has been traditionally overlooked by the innovation community and generally underserved across healthcare,” co-founder and chief executive officer Iyah Romm told TechCrunch. “We believe we can fundamentally redefine the way that health services are built across the country for low-income populations. These are populations that have never been prioritized.”
Romm has spent his entire career in the public health sector. Prior to joining Sidewalk Labs as an entrepreneur-in-residence in 2017, he spent one year as the chief transformation officer of the Commonwealth Care Alliance, a nonprofit medical care delivery organization.
Cityblock provides personalized medical and behavioral health and social services across a growing number of clinics on the East Coast. The company will use the investment to open additional clinics and continue the development of its core platform, Commons. The care delivery platform helps care workers collaborate and stay up to date on patients, with real-time hospital admission alerts to tools for tracking treatment progress.
Cityblock opened its first clinic, or “neighborhood hub,” in Brooklyn, New York after forging a partnership with EmblemHealth, a New York neighborhood health insurance business. They’ve since expanded to Connecticut via a partnership with ConnectiCare, a Connecticut insurance provider. Cityblock will open clinics in North Carolina later this year. Cityblock’s services come at no additional costs to members covered by partner insurance businesses.
The startup’s hope is to get these low-income demographics regular access to more affordable care. Preventative care, after all, is a whole lot cheaper than emergency room visits.
“People end up going to the ER when problems are really bad, for conditions that can be managed,” Redpoint partner and newly appointed Cityblock board member Elliot Geidt told TechCrunch. “There are 75 million people on Medicaid alone and a good portion of these people are living in the inner cities. It’s a problem that has a scope larger than most things that we see in the venture community. The big problem with this population is the existing healthcare system doesn’t work for them, it falls short on so many levels.”
New investors 8VC, Echo Health Ventures and StartUp Health also participated in the latest round, as did existing investors including Sidewalk Labs, Thrive Capital, Maverick Ventures, Town Hall Ventures and EmblemHealth.
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Rasa raises $13M led by Accel for its developer-friendly open-source approach to chatbots
Conversational AI and the use of chatbots have been through multiple cycles of hype and disillusionment in the tech world. You know the story: first you get a launch from the likes of Apple, Facebook, Microsoft, Amazon, Google or any number of other companies, and then you get the many examples of how their services don’t work as intended at the slightest challenge. But time brings improvements and more focused expectations, and today a startup that has been harnessing all those learnings is announcing funding to take to the next level its own approach to conversational AI.
Rasa, which has built an open-source platform for third parties to design and manage their own conversational (text or voice) AI chatbots, is today announcing that it has raised $13 million in a Series A round of funding led by Accel, with participation from Basis Set Ventures, Greg Brockman (co-founder & CTO OpenAI), Daniel Dines (founder & CEO UiPath) and Mitchell Hashimoto (co-founder & CTO Hashicorp).
Rasa was founded in Berlin, but with this round, it will be moving its headquarters to San Francisco, with a plan to hire more people there in sales, marketing and business development; and to continue its tech development with its roadmap including plans to expand the platform to cover images, too.
The company was founded 2.5 years ago, by co-founder/CEO Alex Weidauer’s own admission “when chatbot hype was at its peak.”
Rasa itself was not immune to it, too: “Everyone wanted to automate conversations, and so we set out to build something, too,” he said. “But we quickly realised it was extremely hard to do and that the developer tools were just not there yet.”
Rather than posing an insurmountable roadblock, the shortcomings of chatbots became the problem that Rasa set out to fix.
Alan Nichols, the co-founder who is now the CTO, is an AI PhD, not in natural language as you might expect, but in machine learning.
“What we do is more is address this as a mathematical, machine learning problem rather than one of language,” Weidauer said. Specifically, that means building a model that can be used by any company to tap its own resources to train their bots, in particular with unstructured information, which has been one of the trickier problems to solve in conversational AI.
At a time when many have raised concerns about who might “own” the progress of artificial intelligence, and specifically the data that goes into building these systems, Rasa’s approach is a refreshing one.
Typically, when an organization wants to build an AI chatbot either to interact with customers or to run something in the back end of their business, their developers most commonly opt for third-party cloud APIs that have restrictions on how they can be customized, or they build their own from scratch — but if the organization is not already a large tech company, it will be challenged to have the human or other resources to execute this.
Rasa underscores an emerging trend for a strong third contender. The company has built a stack of tools that it has open-sourced, meaning that anyone can (and thousands of developers do) use it for free, with a paid enterprise version that includes extra tools, including customer support, testing and training tools, and production container deployment. (It’s priced depending on size of organization and usage.)
Importantly, whichever package is used, the tools run on a company’s own training data; and the company can ultimately host their bots wherever they choose, which have been some of the unique selling points for those using Rasa’s platform, when they are less interested in working with organizations that might also be competitors.
Adobe’s new AI assistant for searching on Adobe Stock, which has some 100 million images, was built on Rasa.
“We wanted to give our users an AI assistant that lets them search with natural language commands,” said Brett Butterfield, director of software development at Adobe, in a statement. “We looked at several online services, and, in the end, Rasa was the clear choice because we were able to host our own servers and protect our user’s data privacy. Being able to automate full conversations and the fact it is open source were key elements for us.”
Other customers include Parallon and TalkSpace, Zurich and Allianz, Telekom and UBS.
Open source has become big business in the last several years, and so a startup that’s built an AI platform that has a very direct application in the enterprise built on it presents an obvious attraction for VCs.
“Automation is the next battleground for the enterprise, and while this is a very difficult space to win, especially for unstructured information like text and voice, we are confident Rasa has what it takes given their impressive adoption by developers,” said Andrei Brasoveanu, partner at Accel, in a statement.
“Existing solutions don’t let in-house developer teams control their own automation destiny. Rasa is applying commercial open source software solutions for AI environments similarly to what open source leaders such as Cloudera, Mulesoft, and Hashicorp have done for others.”
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Armis nabs $65M Series C as IoT security biz grows in leaps and bounds
Armis is helping companies protect IoT devices on the network without using an agent, and it’s apparently a problem that is resonating with the market, as the startup reports 700 percent growth in the last year. That caught the attention of investors, who awarded them a $65 million Series C investment to help keep accelerating that growth.
Sequoia Capital led the round with help from new investors Insight Venture Partners and Intermountain Ventures. Returning investors Bain Capital Ventures, Red Dot Capital Partners and Tenaya Capital also participated. Today’s investment brings the total raised to $112 million, according to the company.
The company is solving a hard problem around device management on a network. If you have devices where you cannot apply an agent to track them, how do you manage them? Nadir Izrael, company co-founder and CTO, says you have to do it very carefully because even scanning for ports could be too much for older devices and they could shut down. Instead, he says that Armis takes a passive approach to security, watching and learning and understanding what normal device behavior looks like — a kind of behavioral fingerprinting.
“We observe what devices do on the network. We look at their behavior, and we figure out from that everything we need to know,” Izrael told TechCrunch. He adds, “Armis in a nutshell is a giant device behavior crowdsourcing engine. Basically, every client of Armis is constantly learning how devices behave. And those statistical models, those machine learning models, they get merged into master models.”
Whatever they are doing, they seem to have hit upon a security pain point. They announced a $30 million Series B almost exactly a year ago, and they went back for more because they were growing quickly and needed the capital to hire people to keep up.
That kind of growth is a challenge for any startup. The company expects to double its 125-person work force before the end of the year, but the company is working to put systems in place to incorporate those new people and service all of those new customers.
The company plans to hire more people in sales and marketing, of course, but they will concentrate on customer support and building out partnership programs to get some help from systems integrators, ISVs and MSPs, who can do some of the customer hand-holding for them.
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InVision announces new integrations with Jira
Today InVision announced even deeper integrations with Jira, letting users embed actual InVision prototypes right within a Jira ticket. The company also announced the Jira app for InVision Studio, letting designers in Studio see interactive Jira tickets in real time.
InVision has already had lighter integrations with Atlassian products, including Jira, Confluence and Trello. It’s also worth noting that Atlassian participated in InVision’s $115 million Series F funding round.
The partnership makes sense. Atlassian provides a parallel product to InVision, except instead of serving designers, Atlassian serves engineers.
But it brings up an interesting challenge for InVision, last valued at $1.9 billion. The company went from creating its own market with a paid prototyping and collaboration tool to competing with giants and startups alike as it introduced new products.
InVision Studio, for instance, is meant to compete with the likes of Adobe XD, Sketch, and Figma, among others.
At the same time, InVision’s strategy has always been to become a connective tissue for the broader design landscape. CEO Clark Valberg has said in the past that he sees InVision becoming the Salesforce of the design world, with a broad array of partnerships and integrations across the industry to handle each, nuanced fraction of the process in a single, fluid place.
“Up until now we’ve been a fairly horizontal player,” said VP of Product Mike Davidson. “We created the market for prototyping. There was no paid market for a prototyping tool until InVision came along. Now that you see us provide a more vertical stack of tools, we don’t want to lose the great thing we’ve built with the InVision Prototyping tool. It’s been more popular than we could have ever imagined.”
Davidson added that InVision now serves 100 of the Fortune 100 companies.
And since its launch in 2011, InVision has maintained that original strategic course of staying open, particularly with Atlassian. But InVision isn’t just friendly with Atlassian. The company also introduced an App Store and Asset Store in InVision Studio (partnerships include Slack, Dribbble, and Getty), with plans to launch a developer API so anyone can build apps for InVision Studio. Plus, InVision has made a handful of acquisitions, and launched the Design Forward Fund, which allocates $5 million toward investing in design startups.
VP of Partnerships and Community Mike Davidson believes that balancing this open garden philosophy with the desire to provide the very best products across the entire process (automatically putting InVision in competition with other design startups) is one of the company’s greatest challenges.
“We want to provide a first-cclass experience from beginning to end but we also want to provide a system that’s open enough where you can use your tool of choice for any one of the particular functions,” said Davidson. “It’s a difficult balance. We want to allow for designers and developers to choose which tools they use for whatever job they’re trying to do, but we also want to be the best choice for each one of those functions.”
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The definitive Niantic reading guide
In just a few years, Niantic has evolved from internal side project into an independent industry trailblazer. Having reached tremendous scale in such a short period of time, Niantic acts as a poignant crash course for founders and company builders. As our EC-1 deep-dive into the company shows, lessons from the team’s experience building the Niantic’s product offering remain just as fresh as painful flashbacks to the problems encountered along the way.
As we did for our Patreon EC-1, we’ve poured through every analysis we could find on Niantic and have compiled a supplemental list of resources and readings that are particularly useful for getting up to speed on the company.
Reading time for this article is about 9.5 minutes. It is part of the Extra Crunch EC-1 on Niantic. Feature illustration by Bryce Durbin / TechCrunch.
I. Background: The Story of Niantic
Google-Incubated Niantic, Maker of Ingress, Stepping Out on Its Own | August 2015 | In August of 2015, Niantic announced that it would spin out from Google and become an independent company. As discussed in WSJ’s coverage of the news, Niantic looked at the spin out as a way to accelerate growth and collaborate with the broader entertainment ecosystem.
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Esports org OverActive Media gets investment from The Weeknd
OverActive Media, the company that owns the Splyce esports org and the Overwatch League’s Toronto Defiant team, have announced that The Weeknd (real name: Abel Tesfaye) has invested in the company.
In the world of esports, OAM is a big organization — the Toronto-based company, which launched in 2017, has teams in the League of Legends European Championship, Overwatch League, Call of Duty World League, Rocket League, Starcraft and Smite. OAM is one of only five esports orgs in the world with permanent slots both in League of Legends and the Overwatch League.
If you have no idea what I’m talking about, here’s a look at one of the Toronto Defiant’s recent Overwatch League games.
The terms of the investment were not disclosed, but it would appear that The Weeknd will be contributing to some marketing efforts and building brand awareness around Splyce and the Toronto Defiant.
“Abel’s standing in the music industry will provide our Toronto Defiant and Splyce brands the opportunity to reach more fans and engage new audiences,” said OAM CEO and president Chris Overholt.
The release also mentions that Toronto Defiant fans will see “unique joint efforts” with The Weeknd throughout the 2019 Overwatch League seasons.
Here’s what The Weeknd had to say, via the release:
As a big esports fan, I am really excited to be involved in this project. I am looking forward to collaborating with OverActive Media in unique and innovative ways.
The Weeknd is not the first musical artist to invest in an esports org. Drake and Scooter Braun invested in esports company 100 Thieves in October of 2018.
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Movo grabs $22.5M to get more cities in LatAm scooting
Madrid-based micromobility startup Movo has closed a €20 million (~$22.5M) Series A funding round to accelerate international expansion.
The 2017-founded Spanish startup targets cities in its home market and in markets across LatAm, offering last-mile mobility via rentable electric scooters (e-mopeds and e-scooters) plotted on an app map. It’s a subsidiary of local ride-hailing firm Cabify, which provided the seed funding for the startup.
Movo’s Series A round is led by two new investors: Insurance firm Mutua Madrileña, doubtless spying strategic investment potential in helping diversify its business by growing the market for humans to scoot around cities on two wheels — and VC fund Seaya Ventures, an early investor in Cabify.
Both Mutua Madrileña and Seaya Ventures are now taking a seat on Movo’s board.
Commenting on the Series A in a statement, Javier Mira, general director of Mutua Madrileña, said: “The equity investment in Movo reflects Mutua Madrileña’s aspiration to respond to the new mobility needs that are emerging, and to the economic and social changes that are occurring and that are transforming our life habits.”
Movo currently operates in six cities across five countries — Spain, México, Colombia, Perú and Chile.
It first launched an e-moped service in Madrid a year ago, according to a spokeswoman, and has since expanded domestic operations to the southern Spanish coastal city of Malaga, as well as riding into Latin America.
The new funding is mostly pegged for further international expansion, with a plan to expand into new markets in LatAm, including Argentina, Brazil and Uruguay. Movo is targeting operating in a total of 10 countries by the end of 2019.
The Series A will also be used to grow its vehicle fleet in existing markets, it said.
“We are very excited to be able to offer a solution to the problems of mobility in cities, particularly for short distances in areas with high population density,” said CEO Pedro Rivas in a statement. “We are committed to working together with governments to complement mass public transport with these new micromobility alternatives, so that people can get around in a more sustainable and efficient way.”
Commenting on its investment in the Cabify subsidiary, Seaya Ventures’ Beatriz Gonzalez, founder and managing partner, said the fund is “committed to the evolution of mobility towards sustainable alternatives in the world’s major cities.”
“We want to be part of the transport revolution by promoting projects like Cabify and, of course, Movo,” she said in a statement, which seeks to paint micromobility as a solution for urban congestion and poor air quality. “We are motivated to continue to promote companies with which we share this sense of responsibility towards the development and improvement of people’s quality of life.”
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