Startups
Auto Added by WPeMatico
Our 9 favorite startups from Y Combinator W19 Demo Day 2
Heathcare kiosks, a home-cooked food marketplace, and a way for startups to earn interest on their funding topped our list of high-potential companies from Y Combinator’s Winter 2019 Demo Day 2. 88 startups launched on stage at the lauded accelerator, though some of the best skipped the stage as they’d already raised tons of money.
Be sure to check out our write-ups of all 85 startups from day 1 plus our top picks, as well as the full set from day 2. But now, after asking investors and conferring with the TechCrunch team, here are our 9 favorites from day 2.
Shef
Two months ago, California passed the first law in the country legalizing the sale of home cooked food. Shef creates a marketplace where home chefs can find nearby customers. Shef’s meals cost around $6.50 compared to $20 per meal for traditional food delivery, and the startup takes a 22 percent cut of every transaction. It’s been growing 50 percent week over week thanks to deals with large property management companies that offer the marketplace as a perk to their residents. Shef wants to be the Airbnb of home cooked food.
Why we picked Shef: Deregulation creates gold rush opportunities and Shef was quick to seize this one, getting started just days after the law passed. Food delivery is a massive megatrend but high costs make it unaffordable or a luxury for many. If a parent is already cooking meals for their whole family, it takes minimal effort to produce a few extra portions to sell to the neighbors at accessible rates.
Handle
This startup automates the collection process of unpaid construction invoices. Construction companies are often forced to pay for their own jobs when customers are late on payments. According to Handle, there are $104 billion in unpaid construction invoices every year. Handle launched six weeks ago and is currently collecting $22,800 in monthly revenue. The founders previously launched an Andreessen Horowitz-backed company called Tenfold.
Why we picked Handle: Construction might seem like an unsexy vertical, but it’s massive and rife with inefficiencies this startup tackles. Handle helps contractors demand payments, instantly file liens that ensure they’re compensated for work or materials, or exchange unpaid invoices for cash. Even modest fees could add up quickly given how much money moves through the industry. And there are surely secondary business models to explore using all the data Handle collects on the construction market.
Blueberry Medical
This pediatric telemedicine company provides medical care instantly to families. Blueberry provides constant contact, the ability to talk to a pediatrician 24/7 and at-home testing kits for a total of $15 per month. They’ve just completed a paid consumer pilot and say they were able to resolve 84 percent of issues without in-person care. They’ve partnered with insurance providers to reduce ER visits.
Why we picked Blueberry: Questionable emergency room visits are a nightmare for parents, a huge source of unnecessary costs, and a drain on resources for needy patients. Parents already spend so much time and money trying to keep their kids safe that this is a no-brainer subscription. And the urgent and emotional pull of pediatrics is a smart wedge into telemedicine for all demographics.
rct studio
Led by a team of YC alums behind Raven, an AI startup acquired by Baidu in 2017, rct studio is a creative studio for immersive and interactive film. The platform provides a real time “text to render “engine (so the text “A man sits on a sofa” would generate 3D imagery of a man sitting on a sofa) that supports mainstream 3D engines like Unity and Unreal, as well as a creative tool for film professionals to craft immersive and open-ended entertainment experiences called Morpheus Engine.
Why we picked rct studio: Netflix’s Bandersnatch was just the start of mainstream interactive film. With strong technology, an innovative application, and proven talent, rct could become a critical tool for creating this kind of media. And even if the tech falls short of producing polished media, it could be used for storyboards and mockups.
Interprime
Provides “Apple level” treasury services to startups. Startups are raising a lot of money with no way to manage it, says Interprime. They want to help these businesses by managing these big investments by helping them earn interest on their funding while retaining liquidity. They take a .25 percent advisory fee for all the investment they oversee. So far, they have $10 million in investment capital they are servicing.
Why we picked Interprime: The explosion of early stage startup funding evidenced by Y Combinator itself has created new banking opportunities. Silicon Valley Bank is ripe for competition and Interprime’s focus on startups could unlock new financial services. With Interprime’s YC affiliation, it has access to tons of potential customers.
Nabis
Nabis is tackling the cannabis shipping and logistics business, working with suppliers to ship out goods to retailers reliably. It’s illegal for FedEx to ship weed so Nabis has swooped in and is helping ship and connect while taking cuts of the proceeds, a price the suppliers are willing to pay due to their 98 percent on-time shipping record.
Why we picked Nabis: Quirky regulation creates efficiency gaps in the marijuana business where incumbents can’t participate since they’re not allowed to handle the flower. As more states legalize and cannabis finds its way into more products, moving goods from farm to processor to retailer could spawn a big market for Nabis with a legal moat. It’s already working with many top marijuana brands, and could sell them additional services around business intelligence and distribution.
WeatherCheck
This startup measures weather damage for insurance companies. WeatherCheck has secured $4.7 million in annual bookings in the five months since it launched to help insurance carriers reduce their overall claims expense. To use the service, insurers upload data about their properties. WeatherCheck then monitors the weather and sends notifications to insurance companies, if, for example, a property has been damaged by hail.
Why we picked WeatherCheck: Extreme weather is only getting worse due to climate change. With 10.7 million US properties impacted by hail damage in 2017, WeatherCheck has found a smart initial market from which to expand. It’s easy to imagine the startup working on flood, earthquake, tornado, and wildfire claims too. Insurance is a fierce market, and old-school providers could get a leg up with WeatherCheck’s tech.
Upsolve
Upsolve wants to help low-income individuals file for bankruptcy more easily. The non-profit service gets referral fees from pointing non low-income families to bankruptcy lawyers and is able to offer the service for free. The company says that medical bills, layoffs and predatory loans can leave low-income families in dire situations and that in the last 6 months, their non-profit has alleviated customers from $24 million in debt.
Why we picked Upsolve: Financial hardship is rampant. With the potential for another recession and automation threatening jobs, many families could be at risk for bankruptcy. But the process is so stigmatized that some people avoid it at all costs. Upsolve could democratize access to this financial strategy while inserting itself into a lucrative transaction type.
Pulse Active Stations Network
This startup makes health kiosks for India, meant to be installed in train stations. Co-founder Joginder Tanikella says that there are 600,000 preventable deaths in India as many in the region don’t get regular doctor checkups. “But everyone takes trains,” he says. Their in-station kiosk measures 21 health parameters. The company made $28,000 in revenue last month. Charging $1 per test, Tanikella says each machine pays for itself within 3 months. In the future, the kiosks will allow them to sell insurance and refer users to doctors.
Why we picked Pulse: Telemedicine can’t do everything, but plenty of people around the world can’t make it in to a full-fledged doctor’s office. Pulse creates a mid-point where hardware sensors can measure body fat, blood pressure, pulse, and bone strength to improve accuracy for diagnosing diabetes, osteoarthritis, cardiac problems, and more. Pulse’s companion app could spark additional revenue streams, and there’s clearly a much bigger market for this than just India.
Honorable Mentions
-Allo, a marketplace where parents can exchange babysitting and errand-running
-Shiok, a lab-grown shrimp substitute
-WithFriends, a subscription platform for small retail businesses
—
More Y Combinator coverage from TechCrunch:
Additional reporting by Kate Clark, Lucas Matney, and Greg Kumparak
Powered by WPeMatico
To fund Y Combinator’s top startups, VCs scoop them before Demo Day
Hundreds gathered this week at San Francisco’s Pier 48 to see the more than 200 companies in Y Combinator’s Winter 2019 cohort present their two-minute pitches. The audience of venture capitalists, who collectively manage hundreds of billions of dollars, noted their favorites. The very best investors, however, had already had their pick of the litter.
What many don’t realize about the Demo Day tradition is that pitching isn’t a requirement; in fact, some YC graduates skip out on their stage opportunity altogether. Why? Because they’ve already raised capital or are in the final stages of closing a deal.
ZeroDown, Overview.AI and Catch are among the startups in YC’s W19 batch that forwent Demo Day this week, having already pocketed venture capital. ZeroDown, a financing solution for real estate purchases in the Bay Area, raised a round upwards of $10 million at a $75 million valuation, sources tell TechCrunch. ZeroDown hasn’t responded to requests for comment, nor has its rumored lead investor: Goodwater Capital.
Without requiring a down payment, ZeroDown purchases homes outright for customers and helps them work toward ownership with monthly payments determined by their income. The business was founded by Zenefits co-founder and former chief technology officer Laks Srini, former Zenefits chief operating officer Abhijeet Dwivedi and Hari Viswanathan, a former Zenefits staff engineer.
The founders’ experience building Zenefits, despite its shortcomings, helped ZeroDown garner significant buzz ahead of Demo Day. Sources tell TechCrunch the startup had actually raised a small seed round ahead of YC from former YC president Sam Altman, who recently stepped down from the role to focus on OpenAI, an AI research organization. Altman is said to have encouraged ZeroDown to complete the respected Silicon Valley accelerator program, which, if nothing else, grants its companies a priceless network with which no other incubator or accelerator can compete.
Overview .AI’s founders’ resumes are impressive, too. Russell Nibbelink and Christopher Van Dyke were previously engineers at Salesforce and Tesla, respectively. An industrial automation startup, Overview is developing a smart camera capable of learning a machine’s routine to detect deviations, crashes or anomalies. TechCrunch hasn’t been able to get in touch with Overview’s team or pinpoint the size of its seed round, though sources confirm it skipped Demo Day because of a deal.
Catch, for its part, closed a $5.1 million seed round co-led by Khosla Ventures, NYCA Partners and Steve Jang prior to Demo Day. Instead of pitching their health insurance platform at the big event, Catch published a blog post announcing its first feature, The Catch Health Explorer.
“This is only the first glimpse of what we’re building this year,” Catch wrote in the blog post. “In a few months, we’ll be bringing end-to-end health insurance enrollment for individual plans into Catch to provide the best health insurance enrollment experience in the country.”
TechCrunch has more details on the healthtech startup’s funding, which included participation from Kleiner Perkins, the Urban Innovation Fund and the Graduate Fund.
Four more startups, Truora, Middesk, Glide and FlockJay had deals in the final stages when they walked onto the Demo Day stage, deciding to make their pitches rather than skip the big finale. Sources tell TechCrunch that renowned venture capital firm Accel invested in both Truora and Middesk, among other YC W19 graduates. Truora offers fast, reliable and affordable background checks for the Latin America market, while Middesk does due diligence for businesses to help them conduct risk and compliance assessments on customers.
Finally, Glide, which allows users to quickly and easily create well-designed mobile apps from Google Sheets pages, landed support from First Round Capital, and FlockJay, the operator an online sales academy that teaches job seekers from underrepresented backgrounds the skills and training they need to pursue a career in tech sales, secured investment from Lightspeed Venture Partners, according to sources familiar with the deal.
Pre-Demo Day M&A
Raising ahead of Demo Day isn’t a new phenomenon. Companies, thanks to the invaluable YC network, increase their chances at raising, as well as their valuation, the moment they enroll in the accelerator. They can begin chatting with VCs when they see fit, and they’re encouraged to mingle with YC alumni, a process that can result in pre-Demo Day acquisitions.
This year, Elph, a blockchain infrastructure startup, was bought by Brex, a buzzworthy fintech unicorn that itself graduated from YC only two years ago. The deal closed just one week before Demo Day. Brex’s head of engineering, Cosmin Nicolaescu, tells TechCrunch the Elph five-person team — including co-founders Ritik Malhotra and Tanooj Luthra, who previously founded the Box-acquired startup Steem — were being eyed by several larger companies as Brex negotiated the deal.
“For me, it was important to get them before batch day because that opens the floodgates,” Nicolaescu told TechCrunch. “The reason why I really liked them is they are very entrepreneurial, which aligns with what we want to do. Each of our products is really like its own business.”
Of course, Brex offers a credit card for startups and has no plans to dabble with blockchain or cryptocurrency. The Elph team, rather, will bring their infrastructure security know-how to Brex, helping the $1.1 billion company build its next product, a credit card for large enterprises. Brex declined to disclose the terms of its acquisition.
Hunting for the best deals
Y Combinator partners Michael Seibel and Dalton Caldwell, and moderator Josh Constine, speak onstage during TechCrunch Disrupt SF 2018. (Photo by Kimberly White/Getty Images)
Ultimately, it’s up to startups to determine the cost at which they’ll give up equity. YC companies raise capital under the SAFE model, or a simple agreement for future equity, a form of fundraising invented by YC. Basically, an investor makes a cash investment in a YC startup, then receives company stock at a later date, typically upon a Series A or post-seed deal. YC made the switch from investing in startups on a pre-money safe basis to a post-money safe in 2018 to make cap table math easier for founders.
Michael Seibel, the chief executive officer of YC, says the accelerator works with each startup to develop a personalized fundraising plan. The businesses that raise at valuations north of $10 million, he explained, do so because of high demand.
“Each company decides on the amount of money they want to raise, the valuation they want to raise at, and when they want to start fundraising,” Seibel told TechCrunch via email. “YC is only an advisor and does not dictate how our companies operate. The vast majority of companies complete fundraising in the 1 to 2 months after Demo Day. According to our data, there is little correlation between the companies who are most in demand on Demo Day and ones who go on to become extremely successful. Our advice to founders is not to over optimize the fundraising process.”
Though Seibel says the majority raise in the months following Demo Day, it seems the very best investors know to be proactive about reviewing and investing in the batch before the big event.
Khosla Ventures, like other top VC firms, meets with YC companies as early as possible, partner Kristina Simmons tells TechCrunch, even scheduling interviews with companies in the period between when a startup is accepted to YC to before they actually begin the program. Another Khosla partner, Evan Moore, echoed Seibel’s statement, claiming there isn’t a correlation between the future unicorns and those that raise capital ahead of Demo Day. Moore is a co-founder of DoorDash, a YC graduate now worth $7.1 billion. DoorDash closed its first round of capital in the weeks following Demo Day.
“I think a lot of the activity before demo day is driven by investor FOMO,” Moore wrote in an email to TechCrunch. “I’ve had investors ask me how to get into a company without even knowing what the company does! I mostly see this as a side effect of a good thing: YC has helped tip the scale toward founders by creating an environment where investors compete. This dynamic isn’t what many investors are used to, so every batch some complain about valuations and how easy the founders have it, but making it easier for ambitious entrepreneurs to get funding and pursue their vision is a good thing for the economy.”
This year, given the number of recent changes at YC — namely the size of its latest batch — there was added pressure on the accelerator to showcase its best group yet. And while some did tell TechCrunch they were especially impressed with the lineup, others indeed expressed frustration with valuations.
Many YC startups are fundraising at valuations at or higher than $10 million. For context, that’s actually perfectly in line with the median seed-stage valuation in 2018. According to PitchBook, U.S. startups raised seed rounds at a median post-valuation of $10 million last year; so far this year, companies are raising seed rounds at a slightly higher post-valuation of $11 million. With that said, many of the startups in YC’s cohorts are not as mature as the average seed-stage company. Per PitchBook, a company can be several years of age before it secures its seed round.
I did not talk to a single company in this batch raising under $10M post (admittedly I only was able to speak with a fraction of the 205).
— Peter Rojas (@peterrojas) March 20, 2019
Nonetheless, pricey deals can come as a disappointment to the seed investors who find themselves at YC every year but because their reputations aren’t as lofty as say, Accel, aren’t able to book pre-Demo Day meetings with YC’s top of class.
The question is who is Y Combinator serving? And the answer is founders, not investors. YC is under no obligation to serve up deals of a certain valuation nor is it responsible for which investors gain access to its best companies at what time. After all, startups are raking in larger and larger rounds, earlier in their lifespans; shouldn’t YC, a microcosm for the Silicon Valley startup ecosystem, advise their startups to charge the best investors the going rate?
Powered by WPeMatico
Gig workers need health & benefits — Catch is their safety net
One of the hottest Y Combinator startups just raised a big seed round to clean up the mess created by Uber, Postmates and the gig economy. Catch sells health insurance, retirement savings plans and tax withholding directly to freelancers, contractors, or anyone uncovered. By building and curating simplified benefits services, Catch can offer a safety net for the future of work.
“In order to stay competitive as a society, we need to address inequality and volatility. We think Catch is the first step to offering alternatives to the mandate that benefits can only come from an employer or the government,” writes Catch co-founder and COO Kristen Tyrrell. Her co-founder and CEO Andrew Ambrosino, a former Kleiner Perkins design fellow, stumbled onto the problem as he struggled to juggle all the paperwork and programs companies typically hire an HR manager to handle. “Setting up a benefits plan was a pain. You had to become an expert in the space, and even once you were, executing and getting the stuff you needed was pretty difficult.” Catch does all this annoying but essential work for you.
Now Catch is getting its first press after piloting its product with tens of thousands of users. TechCrunch caught wind of its highly competitive seed round closing, and Catch confirms it has raised $5.1 million at a $20.5 million post-money valuation co-led by Khosla Ventures, Kindred Ventures, and NYCA Partners. This follow-up to its $1 million pre-seed will fuel its expansion into full heath insurance enrollment, life insurance and more. Catch is part of a growing trend that sees the best Y Combinator startup fully funded before Demo Day even arrives.
“Benefits, as a system built and provided by employers, created the mid-century middle class. In the post-war economic boom, companies offering benefits in the form of health insurance and pensions enabled familial stability that led to expansive growth and prosperity,” recalls Tyrrell, who was formerly the director of product at student debt repayment benefits startup FutureFuel.io. “Emboldened by private-sector growth (and apparent self-sufficiency), the 1970s and 80s saw a massive shift in financial risk management from the government to employers. The public safety net contracted in favor of privatized solutions. As technological advances progressed, employers and employees continued to redefine what work looked like. The bureaucratic and inflexible benefits system was unable to keep up. The private safety net crumbled.”
That problem has ballooned in recent years with the advent of the on-demand economy, where millions become Uber drivers, Instacart shoppers, DoorDash deliverers and TaskRabbits. Meanwhile, the destigmatization of remote work and digital nomadism has turned more people into permanent freelancers and contractors, or full-time employees without benefits. “A new class of worker emerged: one with volatile, complex income streams and limited access to second-order financial products like automated savings, individual retirement plans, and independent health insurance. We entered the new millennium with rot under the surface of new opportunity from the proliferation of the internet,” Tyrrell declares. “The last 15 years are borrowed time for the unconventional proletariat. It is time to come to terms and design a safety net that is personal, portable, modern and flexible. That’s why we built Catch.”
Catch co-founders Andrew Ambrosino and Kristen Tyrrell
Currently Catch offers the following services, each with their own way of earning the startup revenue:
- Health Explorer lets users compare plans from insurers and calculate subsidies, while Catch serves as a broker collecting a fee from insurance providers
- Retirement Savings gives users a Catch robo-advisor compatible with IRA and Roth IRA, while Catch earns the industry standard 1 basis point on saved assets
- Tax Withholding provides an FDIC-insured Catch account that automatically saves what you’ll need to pay taxes later, while Catch earns interest on the funds
- Time Off Savings similarly lets you automatically squirrel away money to finance “paid” time off, while Catch earns interest
These and the rest of Catch’s services are curated through its Guide. You answer a few questions about which benefits you have and need, connect your bank account, choose which programs you want and get push notifications whenever Catch needs your decisions or approvals. It’s designed to minimize busy work so if you have a child, you can add them to all your programs with a click instead of slogging through reconfiguring them all one at a time. That simplicity has ignited explosive growth for Catch, with the balances it holds for tax withholding, time off and retirement balances up 300 percent in each of the last three months.
In 2019 it plans to add Catch-branded student loan refinancing, vision and dental enrollment plus payments via existing providers, life insurance through a partner such as Ladder or Ethos and full health insurance enrollment plus subsidies and premium payments via existing insurance companies like Blue Shield and Oscar. And in 2020 it’s hoping to build out its own blended retirement savings solution and income-smoothing tools.
If any of this sounds boring, that’s kind of the point. Instead of sorting through this mind-numbing stuff unassisted, Catch holds your hand. Its benefits Guide is available on the web today and it’s beta testing iOS and Android apps that will launch soon. Catch is focused on direct-to-consumer sales because “We’ve seen too many startups waste time on channels/partnerships before they know people truly want their product and get lost along the way,” Tyrrell writes. Eventually it wants to set up integrations directly into where users get paid.
Catch’s biggest competition is people haphazardly managing benefits with Excel spreadsheets and a mishmash of healthcare.gov and solutions for specific programs. Twenty-one percent of Americans have saved $0 for retirement, which you could see as either a challenge to scaling Catch or a massive greenfield opportunity. Track.tax, one of its direct competitors, charges a subscription price that has driven users to Catch. And automated advisors like Betterment and Wealthfront accounts don’t work so well for gig workers with lots of income volatility.
So do the founders think the gig economy, with its suppression of benefits, helps or hinders our species? “We believe the story is complex, but overall, the existing state of the gig economy is hurting society. Without better systems to provide support for freelance/contract workers, we are making people more precarious and less likely to succeed financially.”
When I ask what keeps the founders up at night, Tyrrell admits “The safety net is not built for individuals. It’s built to be distributed through HR departments and employers. We are very worried that the products we offer aren’t on equal footing with group/company products.” For example, there’s a $6,000/year IRA limit for individuals while the corporate equivalent 401k limit is $19,000, and health insurance is much cheaper for groups than individuals.
To surmount those humps, Catch assembled a huge list of angel investors who’ve built a range of financial services, including NerdWallet founder Jake Gibson, Earnest founders Louis Beryl and Ben Hutchinson, ANDCO (acquired by Fiverr) founder Leif Abraham, Totem founder Neal Khosla, Commuter Club founder Petko Plachkov, Playable (acquired by Stripe) founder Tad Milbourn and Synapse founder Bruno Faviero. It also brought on a wide range of venture funds to open doors for it. Those include Urban Innovation Fund, Kleiner Perkins, Y Combinator, Tempo Ventures, Prehype, Loup Ventures, Indicator Ventures, Ground Up Ventures and Graduate Fund.
Hopefully the fact that there are three lead investors and so many more in the round won’t mean that none feel truly accountable to oversee the company. With 80 million Americans lacking employer-sponsored benefits and 27 million without health insurance and median job tenure down to 2.8 years for people ages 25 to 34 leading to more gaps between jobs, our workforce is vulnerable. Catch can’t operate like a traditional software startup with leniency for screw-ups. If it can move cautiously and fix things, it could earn labor’s trust and become a fundamental piece of the welfare stack.
Powered by WPeMatico
Epic Games CEO says Apex Legends hasn’t made a dent in Fortnite
In the wake of Apex Legends, which has briskly grown to 50 million players, many have wondered whether Fortnite has felt the impact.
But Epic Games CEO Tim Sweeney told GamesBeat that Apex hasn’t really made a dent. Without being asked about Apex Legends, Sweeney said “an Apex Legends worth” of players have come over to Fortnite.
“We’re very close to hitting 250 million Fortnite players,” said Sweeney. “Since Apex Legends came out, we’ve gained an Apex Legends worth of Fortnite players, which is amazing.”
He went on to say that the only game that noticeably takes Fortnite gamers away from Fortnite is FIFA.
“We hit a Fortnite non-event peak twice after Apex was out,” said Sweeney. “We haven’t seen any visible cut into Fortnite. It’s a funny thing. The only game you can see where its peaks cut into Fortnite playtime is FIFA. It’s another game for everybody, wildly popular around the world.”
On the one hand, Apex only has about one-fifth of the players that Fortnite has. In a world where Netflix sees Fortnite as a greater threat than HBO, the scale of the two games isn’t comparable.
However, Apex is picking up some serious steam. It only took seven days for Apex to hit 25 million users (it took Fortnite 41 days), and one month to hit 50 million users (it took Fortnite more than four months).
As impressive as that is, it’s also to be expected that a game like Apex, a relative latecomer to the Battle Royale genre, would grow faster by reaping the benefits of the entire industry’s years of work and growth. It’s also worth noting that EA paid a pretty penny to successfully launch Apex Legends, with Ninja alone earning $1 million for streaming the game at launch.
“What Apex Legends has done is re-energized a lot of shooter players, people who come in and out of shooters depending on what’s popular,” said Sweeney. “It’s awesome to see other games picking up on battle royale, adding their unique spin to it and advancing the state of the industry.”
Adding a unique spin is exactly what Apex Legends has done. They’ve taken the fundamental building blocks of Battle Royale and the free-to-play model and tweaked them to be, in some ways, better.
Where play is concerned, Apex is a markedly team-oriented game, complete with a beautifully executed non-verbal comms system and a Jumpmaster mechanic to encourage teammates to land and play as a unit. Plus, Apex uses a hero system to give each character their own unique abilities.
This not only makes each fight interesting, but it gives Apex a different way to monetize beyond its recently launched BattlePass. The company just introduced its first new character, which can be unlocked with Apex Coins, the games virtual currency.
Only time will tell if Respawn and EA can build something as sticky as Fortnite, which has truly become a pop culture phenomenon. But there is one clear winner in this epic competition between Fortnite and Apex, and that’s gamers.
Powered by WPeMatico
MoviePass co-founder’s new startup PreShow gives you free movie tickets for watching ads
As founding CEO of MoviePass, Stacy Spikes has already changed the way we think about paying for movie tickets. Now he’s pursuing a new approach — providing a free ticket to people who watch 15 to 20 minutes of ads.
Spikes noted that when it comes to watching movies outside the theater, there are three basic business models — pay-per-view, subscription and ad-supported. MoviePass brought a subscription approach into theaters, but Spikes (who stepped down as MoviePass CEO in 2016) told me he kept wondering, “Well, why can’t you have an ad-supported version that will allow you to go to movies for free?”
It’s hard to imagine digital advertising being worth enough to really pay for that ticket, but Spikes insisted, “You’re paying your way. This is not going to be a loss-leader model. It’s an ad-revenue based business.”
To make that work, he said the new service, called PreShow, is bringing a of couple innovations to the table. First, there’s facial recognition technology that ensures you’re actually present and watching the ad.
Spikes demonstrated this feature for me last week, showing me how his face unlocked the PreShow app. Once he’d chosen the film he wanted to watch, he was presented with a package of video ads that were specifically selected to run with that movie — and any time he looked away from the screen or moved too far away from his phone, the ads would stop playing. (Apparently the sensitivity can be dialed up or down depending on user feedback.)
Spikes also said the ads should tie into the film in some way, whether that’s thematically, or by highlighting products that are also featured in the movie. And they’ll always include an opportunity to further engage with the advertiser.
So although 15 to 20 minutes might sound like a long time to watch ads, it should be more interesting for the viewer than just a random collection of promotional videos. And for the advertisers that are already paying for product placement in a film, this could be a way to reinforce their message with consumers who are actually watching the movie. (Spikes also compared this to the marketing packages that usually play before showtime in theaters — hence the company name.)
By watching one of these 15 to 20-minute packages, you should earn enough points to purchase a ticket at the theater using a virtual credit card provided by PreShow. Technically, those points can be used to buy any movie ticket, but Spikes said you won’t be able to earn more than two tickets at once, “so people don’t stockpile.”
As for whether PreShow is competing with his old company, Spikes said, “I don’t think they’re competitive in any way. If you compare a subscription platform to an ad platform to a pay-per-view platform, they’re different animals.”
Stacy Spikes
The plan is to start testing the service with a select group of users in the next three to six months, and to find those users, PreShow is launching a Kickstarter campaign today. Pledge levels range from $15 to $60, with the amount you pay determining how early you get access, and how many friend invites you receive.
Spikes said he’s less interested in raising money (which is why the campaign’s official goal is only $10,000) and more in attracting film lovers who want to try the app.
“It’s a way to have innovation happen more organically, versus if you just open it up for the general public,” Spikes said.
Powered by WPeMatico
Morphin instantly Deepfakes your face into GIFs
Want to star in your favorite memes and movie scenes? Upload a selfie to Morphin, choose your favorite GIF and your face is grafted in to create a personalized copy you can share anywhere. Become Tony Stark as he suits up like Iron Man. Drop the mic like Obama, dance like Drake or slap your mug on Fortnite characters.
Now after three years in stealth developing image-mapping technology, Morphin is ready to launch its put-you-in-a-GIF maker. While it might look like just a toy, investors see real business potential. Morphin raised $1 million last summer from Betaworks, the incubator that spawned Giphy, plus Founders Fund, Precursor, Shrug Capital and Boost.vc’s accelerator.
Elon Musk as Iron Man
“We believe in the future you’ll be able to be the main character in your own film. Imagine a super hero movie where you’re the main protagonist?,” co-founder Loic Ledoux asks. “That sounded like science fiction a few years ago and now with AI and computer vision we definitely see our tech going there.”
Ledoux also wants to reclaim faceswaps as something fun rather than a weapon for misinformation. “Deepfakes brought something pretty negative to computer vision. But it’s not all bad. It’s about how you use the tech to give people a new tool for self expressions and storytelling.” And since Morphin re-generates the whole clip from scratch with CGI animation, they look right at a glance, but clearly aren’t manipulated copies of the original video designed to fool anyone.
Kanye performs magic
Morphin started three years ago with the intention to build personalized avatars for games and VR so you could be a FIFA soccer player or Skyrim knight. Ledoux had started a 3D printing company to explore opportunities in scanning and modeling when he saw a chance to connect your real and virtual faces. He teamed up with his co-founder Nicholas Heriveaux, who’d spent 13 years working on 3D tech while modding games like Grand Theft Auto to insert his avatar and assets.
What they quickly recognized was that “People were just reacting to themselves on the screen,” ignoring the gameplay, Ledoux recalls. “Being able to see yourself as a hero was the underlying sentiment, so we focused on video completely.” Recognizable GIFs became its preferred medium, as they combine familiarity and the ability to convey complex emotions with a template that’s easy to personalize so they stand out.
Morphin’s tech no longer requires 3D scanning hardware and it works with just a regular selfie. You just snap a headshot, select a GIF from its iOS or Android app’s library and a few seconds later you have a CGI version of yourself in the scene (with no watermark) that you can export and post. “We wanted it to be super straightforward because we wanted people to relate to the content,” Ledoux notes. Over 1 million scenes have been created by 50,000 beta users, and each time a celebrity shares one of the GIFs Morphin has been sending them for marketing, scores of their followers demand to know which app they were using.
Morphin’s nine-person French team will have to keep innovating to stay ahead of avatar-making competitors like the ubiquitous Snapchat Bitmoji, Genies, Moji Edit and Mirror AI. Facebook, Microsoft and Google all have launched or are building their own avatar creators. But these typically live as 2D stickers or 3D AR animations you overlay on the real world. By using GIFs as a canvas, Morphin takes the pressure off your visage looking perfect and instead emphasizes the message you’re trying to get across.
The challenge will be for Morphin to become a consistent part of people’s communication stack. It’s easy to imagine playing with it and posting a few GIFs. But iconic new GIFs don’t emerge each day and without a social network to stay for, Morphin is at risk of becoming merely a forgotten tool. The app might need TikTok-style challenges like submitting the best personalized GIF to match a prompt or a GIF browsing feed to keep people coming back.
Turning Donald Glover into Jay Gatsby
Morphin isn’t racing to monetize yet, but sees a chance to sell longer premium video scenes à la carte or as an unlimited subscription. Ledoux eventually hopes to unlock new forms of storytelling beyond existing GIFs. There’s also a chance for Morphin to highlight sponsored clips from upcoming movies or TV shows. “In the long-term we’re more interested in the analogy of Lil Miquela and how people are interacting with digital characters,” Ledoux explains, citing a virtual pop star whose developer Brud recently raised at a $125 million valuation.
One of the most exciting things about Morphin is that it will allow people to take the spotlight no matter how they look. Often times certain races, genders and looks are unfairly excluded from starring in today’s most popular media. But Morphin could let the underrepresented take their rightful place as stars of the screen.
Your faithful author Josh Constine dropping the mic like Obama
Powered by WPeMatico
Skymind raises $11.5M to bring deep learning to more enterprises
Skymind, a Y Combinator-incubated AI platform that aims to make deep learning more accessible to enterprises, today announced that it has raised an $11.5 million Series A round led by TransLink Capital, with participation from ServiceNow, Sumitomo’s Presidio Ventures, UpHonest Capital and GovTech Fund. Early investors Y Combinator, Tencent, Mandra Capital, Hemi Ventures, and GMO Ventures, also joined the round/ With this, the company has now raised a total of $17.9 million in funding.
The inclusion of TransLink Capital gives a hint as to how the company is planning to use the funding. One of TransLink’s specialties is helping entrepreneurs develop customers in Asia. Skymind believes that it has a major opportunity in that market, so having TransLink lead this round makes a lot of sense. Skymind also plans to use the round to build out its team in North America and fuel customer acquisition there.
“TransLink is the perfect lead for this round, because they know how to make connections between North America and Asia,” Skymind CEO Chris Nicholson told me. “That’s where the most growth is globally, and there are a lot of potential synergies. We’re also really excited to have strategic investors like ServiceNow and Sumitomo’s Presidio Ventures backing us for the first time. We’re already collaborating with ServiceNow, and Skymind software will be part of some powerful new technologies they roll out.”
It’s no secret that enterprises know that they have to adapt AI in some form but are struggling with figuring out how to do so. Skymind’s tools, including its core SKIL framework, allow data scientists to create workflows that take them from ingesting the data to cleaning it up, training their models and putting them into production. The promise here is that Skymind’s tools eliminate the gap that often exists between the data scientists and IT.
“The two big opportunities with AI are better customer experiences and more efficiency, and both are based on making smarter decisions about data, which is what AI does,” said Nicholson. “The main types of data that matter to enterprises are text and time series data (think web logs or payments). So we see a lot of demand for natural-language processing and for predictions around streams of data, like logs.”
Current Skymind customers include the likes of ServiceNow and telco company Orange, while some of its technology partners that integrate its services into their portfolio include Cisco and SoftBank .
It’s worth noting that Skymind is also the company behind Deeplearning4j, one of the most popular open-source AI tools for Java. The company is also a major contributor to the Python-based Keras deep learning framework.
Powered by WPeMatico
Music’s next big startup Splice raises $57.5M to sell samples
Tech has a bad reputation for pulling money out of musicians’ pockets, but Splice is changing that. The audio sample marketplace and music production collaboration tool has now paid out $15 million to artists since 2013, doubling in the last year. Splice lets musicians sell their sounds for royalty-free use, and songs by Eminem, Ariana Grande and Marshmello that were powered by those samples have topped the charts. Splice charges $7.99 per month for unlimited access to its array of 3 million synthesizers, drum hits, vocal flares and other sounds. Despite being designed for serious musicians, Splice’s suite of tools now has 2.5 million users, up from 1.5 million a year ago.
Steve Martocci
“Music is going through a beautiful moment,” says Steve Martocci, Splice’s co-founder and CEO who formerly built and sold GroupMe. “The tailwinds from the success of streaming are great. As more people realize how big the market it, how much people want to create music, there’s a huge opportunity here.”
Now Union Square Ventures and True Ventures are seizing on that opportunity, co-leading a $57.5 million Series C for Splice. “It’s all about scale,” Martocci tells me. “We’re investing in ourselves. Continuing to build new products. Continuing to work with bigger artists. We think there’s so much about the creative process and ecosystem of musicians that needs to be fixed. We want to diversify the content available so all artists in all genres feel like we have what they need.”
The round, which includes DFJ Growth, Flybridge, Lerer Hippeau, Liontree, Founders Circle Capital and Matt Pincus, brings Splice to $104.5 million in total funding. Splice wouldn’t disclose the valuation, but using the industry standard of selling 20 percent equity for a Series C, Splice could be valued in the ballpark of $285 million. That would make it one of the top music startups that isn’t selling streaming, tickets or hardware. Its success has also begun to draw competition from companies like Native Instruments, which launched its Sounds.com marketplace last year.
Splice’s subscription revenue is pooled and then doled out to artists based on whose samples got the most downloads. Creators range from bedroom tinkerers to Drake’s Grammy-winning producer Boi-1da. Martocci confirms that artists receive the majority of Splice’s sample marketplace revenue, saying, “they’re very favorable deals.” That’s especially great for the music production industry, because a lot of Splice’s sample creators aren’t celebrity DJs; Martocci says they’re audio engineers and other “people behind the scenes getting an opportunity to step into the light with an amazing revenue opportunity, but also an opportunity to be seen for their creative contributions.”
Splice began with a eureka moment at a concert. A friend asked Martocci why there weren’t great tools for producing music like there are for building software like GroupMe. After eventually leaving his chat app that Skype acquired, Martocci connected with Splice co-founder Matt Aimonetti and discovered he’d been an audio engineer for half of his life. They saw a chance to build a GitHub for music, with version control and admin permissions for making saving and collaborating on productions simple. By 2015 Splice had launched its Sounds subscription library, and the next year began selling rent-to-own software synthesizers to make avoiding piracy affordable for creators.
Fast-forward and Martocci tells me prioritization across Splice’s different product lines will be one of its big challenges. Luckily, he has a new crew of lieutenants to help. Former product lead for Apple Music and Beats by Dre VP Ryan Walsh has joined as chief product officer because, Martocci says, “he felt like his mission in music was unfinished.” Former chief financial officer of Marvel Entertainment Chris Acquaviva is now Splice’s CFO, who offers deep licensing expertise. And bringing the creator community vibe, MakerBot’s former CHRO, Kavita Vora, has become Splice’s chief people officer.
In an era when tech public image has been tested by non-stop scandals from the industry giants, Splice is pulling in ace talent that want to work on something unequivocally positive. Martocci tells me parents tell him that their kids spend all their time playing Fortnite and making music on Splice, but the latter is screen time they’re happy to encourage.
Powered by WPeMatico
Skedulo raises $28M for its mobile workforce management service
Skedulo, a service that helps businesses manage their mobile employees, today announced that it has raised a $28 million Series B funding round led by M12, Microsoft’s venture fund. Existing investors Blackbird and Castanoa Ventures also participated in this round.
The company’s service offers businesses all the necessary tools to manage their mobile employees, including their schedules. A lot of small businesses still use basic spreadsheets and email to do this, but that’s obviously not the most efficient way to match the right employee to the right job, for example.
“Workforce management has traditionally been focused on employees that are sitting at a desk for the majority of their day,” Skedulo CEO and co-founder Matt Fairhurst told me. “The overwhelming majority — 80 percent — of workers will be deskless by 2020 and so far, there has been no one that has addressed the needs of this growing population at scale. We’re excited to help enterprises confront these challenges head-on so they can compete and lean into rapidly changing customer and employee expectations.”
At the core of Skedulo, which offers both a mobile app and web-based interface, is the company’s so-called “Mastermind” engine that helps businesses automatically match the right employee to a job based on the priorities the company has specified. The company plans to use the new funding to enhance this tool through new machine learning capabilities. Skedulo will also soon offer new analytics tools and integrations with third-party services like HR and financial management tools, as well as payroll systems.
The company also plans to use the new funding to double its headcount, which includes hiring at least 60 new employees in its Australian offices in Brisbane and Sydney.
As part of this round, Priya Saiprasad, principal of M12, will join Skedulo’s board of directors. “We found a strong sense of aligned purpose with Priya Saiprasad and the team at M12 — and their desire to invest in companies that help reduce cycles in a person’s working day,” Fairhurst said. “Fundamentally, Skedulo is a productivity company. We help companies, the back-office and mobile workforce, reduce the number of cycles it takes to get work done. This gives them time back to focus on the work that matters most.”
Powered by WPeMatico
Movius raises $45M for its business communications service
Atlanta-based Movius, a company that allows companies to assign a separate business number for voice calls and texting to any phone, today announced that it has raised a $45 million Series D round led by JPMorgan Chase, with participation from existing investors PointGuard Ventures, New Enterprise Associates and Anschutz Investment company. With this, the company has now raised a total of $100 million.
In addition to the new funding, Movius also today announced that it has brought on former Adobe and Sun executive John Loiacono as its new CEO. Loiacono was also the founding CEO of network analytics startup Jolata.
“The Movius opportunity is pervasive. Almost every company on planet Earth is mobilizing their workforce but are challenged to find a way to securely interact with their customers and constituents using all the preferred communication vehicles – be that voice, SMS or any other channel they use in their daily lives,” said Loiacono. “I’m thrilled because I’m joining a team that features highly passionate and proven innovators who are maniacally focused on delivering this very solution. I look forward to leading this next chapter of growth for the company.”
Sanjay Jain, the chief strategy officer at Hyperloop Transportation Technologies, and Larry Feinsmith, the head of JPMorgan Chase’s Technology Innovation, Strategy & Partnerships office, are joining the company’s board.
Movius currently counts more than 1,400 businesses as its customers, and its carrier partners include Sprint, Telstra and Telefonica. What’s important to note is that Movius is more than a basic VoIP app on your phone. What the company promises is a carrier-grade network that allows businesses to assign a second number to their employees’ phones. That way, the employer remains in charge, even as employees bring their own devices to work.
Powered by WPeMatico