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To rebuild satellite communications, Ubiquitilink starts at ground level
Communications satellites are multiplying year by year as more companies vie to create an orbital network that brings high-speed internet to the globe. Ubiquitilink, a new company headed by Nanoracks co-founder Charles Miller, is taking a different tack: reinventing the Earthbound side of the technology stack.
Miller’s intuition, backed by approval and funding from a number of investors and communications giants, is that people are competing to solve the wrong problem in the comsat world. Driving down the cost of satellites isn’t going to create the revolution they hope. Instead, he thinks the way forward lies in completely rebuilding the “user terminal,” usually a ground station or large antenna.
“If you’re focused on bridging the digital divide, say you have to build a thousand satellites and a hundred million user terminals,” he said, “which should you optimize for cost?”
Of course, dropping the price of satellites has plenty of benefits on its own, but he does have a point. What happens when a satellite network is in place to cover most of the planet but the only devices that can access it cost thousands of dollars or have to be in proximity to some subsidized high-tech hub?
There are billions of phones on the planet, he points out, yet only 10 percent of the world has anything like a mobile connection. Serving the hundreds of millions who at any given moment have no signal, he suggests, is a no-brainer. And you’re not going to do it by adding more towers; if that was a valid business proposition, telecoms would have done it years ago.
Instead, Miller’s plan is to outfit phones with a new hardware-software stack that will offer a baseline level of communication whenever a phone would otherwise lapse into “no service.” And he claims it’ll be possible for less than $5 per person.
He was coy about the exact nature of this tech, but I didn’t get the sense that it’s vaporware or anything like that. Miller and his team are seasoned space and telecoms people, and of course you don’t generally launch a satellite to test vaporware.
But Ubiquitilink does have a bird in the air, with testing of their tech set to start next month and two more launches planned. The stack has already been proven on the ground, Miller said, and has garnered serious interest.
“We’ve been in stealth for several years and have signed up 22 partners — 20 are multi-billion-dollar companies,” he said, adding that the latter are mainly communications companies, though he declined to name them. The company has also gotten regulatory clearance to test in five countries, including the U.S.
Miller self-funded the company at the outset, but soon raised a pre-seed round led by Blazar Ventures (and indirectly, telecoms infrastructure standby Neustar). Unshackled Ventures led the seed round, along with RRE Ventures, Rise of the Rest, and One Way Ventures. All told, the company is working with a total $6.5 million, which it will use to finance its launches and tests; once they’ve taken place, it will be safer to dispel a bit of the mystery around the tech.
“Ubiquitilink represents one of the largest opportunities in telecommunications,” Unshackled founding partner Manan Mehta said, calling the company’s team “maniacally focused.”
I’m more than a little interested to find out more about this stealth attempt, three years in the making so far, to rebuild satellite communications from the ground up. Some skepticism is warranted, but the pedigree here is difficult to doubt; we’ll know more once orbital testing commences in the next few months.
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Mooncard raises $5.7 million for its expense platform
French startup Mooncard raised a $5.7 million funding round (€5 million) from Raise Ventures, Aglaé Ventures and business angels. The company provides a service to track and manage your company’s expenses with the help of good old plastic cards.
Corporate credit cards aren’t as widespread in France as in the U.S. and other countries. That’s why fintech startups have been trying to find a way to streamline expenses for French startups.
Mooncard lets you get as many cards as you want for your team. Managers can set different kinds of rules with different limits and validation processes.
Every time you pay with your card, you get a text message with a link. When you tap on the link, you can take a photo of the receipt, add details and submit your expense. Your accounting team can see expenses in real time and share reports with accountants.
Behind the scenes, companies create a specific account for expenses and top up that account. Mooncard works with Wirecard for the banking integration.
So far, 1,000 companies are using Mooncard, such as Air France, Vinci, Virtuo, Ledger and others. Companies pay between €13 and €15 per user per month, and Mooncard plans to have 200,000 users within three years.
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Varsity Tutors acquires Veritas Prep to expand into live online classes
Varsity Tutors, the online learning platform that launched in 2007, has today announced the acquisition of Veritas Prep.
The terms of the deal were not disclosed, but, according to the press release, the Veritas Prep team will remain at its Calabasas, CA office and that the product will continue on as a separate brand.
Veritas Prep launched in 2002 with a suite of test prep courses. Over the years, Veritas built out its online live classes as well as a business around admissions consulting. As Varsity Tutors focuses on geographical and product expansion, the Veritas Prep acquisition allows the company to get into live online courses (alongside one-to-one tutoring).
“Over the course of its 17 years, Veritas has built up a lot of expertise in how to deliver exceptional live online classes,” said Varsity Tutors founder and CEO Chuck Cohn. “We looked at a lot of companies out there, and we saw huge potential to really accelerate our own product development cycle by buying that expertise.”
Varsity Tutors originally launched with a platform that connected students with tutors for IRL study sessions and lessons. Over time, that product has transformed to offer fully on-demand digital lessons with tutors via live video chat, complete with whiteboard functionality, doc editing and other tools. Students can also access free online content (sans instructor) through Varsity Tutors’ Learning Tools.
Cohn says that the Live Learning platform can connect a student with a tutor and begin a session in as few as 20 seconds, and that more than 75 percent of new customers are opting for online/mobile tutoring instead of in-person.
Beyond expanding the product, Varsity Tutors is also looking to expand the number of subjects it offers to customers. Right now, the company offers more than 1000 different subjects (including traditional learning) with more than 250 subjects available for instant tutoring on the Live Learning platform.
Varsity Tutors has raised a total of $107 million from investors like Learn Capital, CZI, and TCV. This marks the company’s second acquisition, with Varsity Tutors buying First Tutors in the UK in 2018 to kickstart geographic expansion.
The 600-employee company has more than 40,000 tutors on the platform and has provided more than 4 million hours of live one-on-one instruction/tutoring since launch.
Editor’s Note: An earlier version of this article said that Varsity Tutors launched in 2011. The article has been updated for accuracy.
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Adtech veteran Marcus Startzel becomes CEO at Whitebox
Marcus Startzel is moving from adtech to e-commerce: He’s becoming the new CEO at Whitebox.
One of his first tasks, apparently, will be raising a Series A.
Startzel was previously an executive at AppNexus, which he joined after the acquisition of MediaGlu, where he was CEO. (He departed AppNexus after it was bought by AT&T.) He’s also had senior roles at Millennial Media and Advertising.com.
Whitebox, meanwhile, was founded in 2013 by previous CEO Rob Wray. The company helps businesses manage some of the most challenging parts of e-commerce — for example, it handles warehousing and fulfillment, while also creating and optimizing listings on Amazon, eBay and the seller’s own website.
Startzel said he was attracted to the company because it taps into broader trends around the growth of e-commerce, and because of the opportunity provided by all of Whitebox’s data around “finding the best way to get the product to the consumer.” He also said he was impressed by the recent hiring of Chief Operating Officer Rob Hahn and Chief Data Officer Andrew Bignell, both from Amazon.
And while this may seem like a big change from his previous roles, Startzel said he’s still drawing on his leadership experience, and on his approach of “just understanding the market from a customer lens, just being customer focused when you’re a brand.”
“I’m excited to sell products, not just advertise them,” he added.
Wray, meanwhile, will remain at Whitebox as its chief product officer.
“We started Whitebox because brands were getting crushed by the enormous complexity of selling online,” he said in a statement. “Brands need a unified approach to e-commerce to scale while lowering costs. We are thrilled to have Marcus join and apply his knowledge and experience.”
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Dosh raises $40M on $300M valuation as its cashback app passes $50M doled out to shoppers
When it comes to reaching would-be customers today, one of the biggest investments that brands and retailers will make is in advertising, to the tune of nearly $630 billion globally. Now, a startup called Dosh, which offers cash back on purchases, is announcing that it has raised $40 million to take on the advertising industry, with the pitch that its app provides a more targeted and guaranteed way of getting consumers to bite.
The funding — $20 million in equity and $20 million in venture debt — is led by Goodwater Capital and Western Technology Investment. Previous investor PayPal, along with new investors BAM Capital and Anthem Venture Partners, also participated. Sources close to the company confirm that the funding was done on approximately a $300 million valuation. It has raised $96 million in total, including both equity and debt.
“Instead of taking all in equity we decided to split because of the strength of the company at the moment,” said Ryan Wuerch, Dosh’s founder and CEO, in an interview, who said the funding would be used for hiring, business development and technology investment. “We want to be opportunistic.”
It was only nine months ago that Dosh last raised dosh; $44 million on a $241 million valuation. In the interim, the startup has been on a roll — at one point, in the holiday spending period, hitting No. 1 among U.S. shopping apps and clocking in some $50 million in cash back to its users, doubling those returns since last April. It now has 3 million card-linked subscribers and more than 150,000 retailers and brands signed up to its platform.
Up to now, Dosh’s business model has been to forge deals with retailers and brands — partners include Nike, Toms, Gap, Walgreens, Walmart, Jack in the Box and more — and payment card providers like Visa and Mastercard. When a user links up a card, and she or he buys something from the retailers and brands connected with Dosh, the user gets money back. That money can in turn be paid into your bank account, your PayPal account, toward further purchases or to charity. Dosh itself makes money by taking a cut on each transaction, although it does not provide details of its percentage.
Going forward, the idea will be to continue to expand its business along the same lines by building more technology into the platform to make the offers you are getting more targeted to what you might be most likely to buy, and to use the same tech to increase rewards to entice you to buy things that you may be less likely to naturally buy.
The company’s viewpoint is that a direct cash reward is a much stronger driver for retail intent than advertising can ever be, and because of how Dosh links up with card providers, it’s much easier to see how an offer is linked to an actual purchase.
“When you think about advertising over the years, at first all you had was radio and TV and print with little attribution,” Wuerch said. “Now digital gives you clicks and impressions, but true attribution is when you get to the consummation of the purchase, which is what we are able to show. The tech that we built and continue to build enables us to understand consumers.”
Given the billions that are spent on advertising today, even moving the needle a little to get more retailers working with Dosh on more deals could prove very lucrative to the company… and its investors.
“Dosh’s mission is to put billions of dollars of wasted advertising spend directly into consumers’ pockets,” said Chi-Hua Chien, co-founder and managing partner at Goodwater Capital, which is leading its investment in Dosh. “They are the clear leader in the rapidly growing card-linked offers market and we are confident this latest round of funding will accelerate their achievement of that mission.” (And to be clear, there are many others in the same space of offering cash back on purchases, such as Drop and Ebates.)
Offers are specific to people on the platform. As Wuerch explained it, he and I might both get offers for Sam’s Club cash back, but because he visited the store three days ago and is a very regular visitor, whereas I never go there, we may have very different cashback offers on the table.
Loyalty programs have become a strong driver for how people purchase goods and services. Amazon Prime is perhaps the strongest example of how that is being played out in e-commerce: To keep people using Amazon, under one umbrella, Amazon is offering users free and fast shipping on a range of items, plus access to services that ordinary customers will not get, all for a single monthly fee.
Dosh is taking a very different approach, in that it has “no plans” said Wuerch to sell items directly on its app, instead focusing on leading consumers to physical (or online) retail experiences.
“Our goal is to drive consumers into stores, and we have found that the cash stimulus really does create a change in consumer behavior,” he said.
Today, Dosh is only in the U.S., and Wuerch said that international expansion is likely to come in 2020. Whether that will come by way of organic growth or acquisition remains to be seen. In the U.K., for example, Quidco provides a similar cashback experience to users.
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Wynd raises $82 million for its store management service
French startup Wynd raised another $82 million (€72 million) from Natixis, Sofina and BNF Capital. The company started with a point-of-sale solution for restaurants and other brick-and-mortar stores. It now provides a one-stop-shop for all your digital needs when it comes to managing your offline and online sales.
The startup has raised $127 million in total (€112 million) from today’s new investors, as well as Sodexo, Orange and Alven.
Wynd provides a software-as-a-service platform for everything that can be powered by computers. The service manages your inventory, handles orders and payments and tells your staff what they’re supposed to do to prepare orders for your customers.
Everything is omnichannel, which means that an online sale and an offline sale are handled the same way in the system — there’s just a different parameter when it comes to delivery. Your inventory is unified across your e-commerce websites and stores. And Wynd can also replace your product information management service.
If you’re already using other services for some parts of your business, Wynd has an API and integrates with third-party services. For instance, you can connect Wynd with your ERP.
Wynd also lets you get detailed reports on your products and your staff. On this front, Wynd competes with Excel and good old static exports. Having dynamic dashboards can help you be more reactive and understand why a specific product is taking off, for example.
And now, big brands are using Wynd to manage their sales, such as Carrefour, Total, MK2 and Monceau Fleurs; 30 percent of the company’s revenue comes from other countries.
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Citizens Reserve is building a supply chain platform on the blockchain
Citizens Reserve, a Bay Area startup, has a broad goal of digitizing the supply chain. Last fall, the company launched the Alpha version of Suku, a Supply Chain as a Service platform built on the blockchain. Today, it announced a partnership with Smartrac, an RFID tag manufacturer, based in Amsterdam, as a key identity piece for the platform.
Companies use RFID to track products from field or factory to market. Eric Piscini, CEO at Citizens, says this partnership helps solve a crucial piece of digitizing the supply chain. It provides a way to trace products on their journey to market, and ensure their provenance, whether that is to be sure no labor was exploited in production, environmental standards were maintained or that the products were stored under the proper conditions to ensure freshness.
One of the big issues in track and trace on the supply chain is simply identifying the universe of items in motion across the world at any given moment. RFID tagging provides a way to give each of these items a digital identity, which can be placed on the blockchain to help prevent fraud. Once you have an irrefutable digital identity, it solves a big problem around digitizing the supply chain.
He said this is all part of a broader effort to move the supply chain to the digital realm by building a platform on the blockchain. This not only provides an irrefutable, traceable digital record, it can have all kinds of additional benefits, like reducing theft and fraud and ensuring provenance.
There are so many parties involved in this process, from farmers and manufacturers to customs authorities to shipping and container companies to logistics companies moving the products to market to the stores that sell the goods. Getting all of the various parties involved in the supply chain to move to a blockchain solution remains a huge challenge.
Today’s partnership offers one way to help build an identity mechanism for the Citizens Reserve solution. The company is also working on other partnerships to help solve other problems, like warehouse management and logistics.
The company currently has 11 employees based in Los Gatos, Calif. It has raised $11 million, according to Piscini.
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Adjust expands its anti-ad fraud tech by acquiring Unbotify
Adjust, a Berlin-headquartered company focused on mobile ad measurement and fraud prevention, is acquiring bot detection startup Unbotify.
Founded in 2012, Adjust has become increasingly focused on ad fraud, and in fact created an industry group called the Coalition Against Ad Fraud a little over a year ago. Co-founder and CTO Paul Müller argued that although the industry has become increasingly concerned about fraud, Adjust has led the way in taking a more proactive approach: “Instead of just telling our clients, ‘Hey, you just spent money on fraud,’ we actively intervened and rejected attribution to a fraudulent source.”
In Müller’s view, Unbotify fits in with the company’s broader philosophy because the Israeli startup isn’t just trying to detect bots — it also “produces explainable results,” providing a clear explanation of why an impression couldn’t have come from a real human being.
“We strongly believe fraud isn’t a problem that can be solved with a magical black box or eight ball,” he said. “Fraud should not be an opinion. We believe in clear, transparent measurement of why something is fraud.”
Adjust co-founder and CEO Christian Henschel said the entire 25-person Unbotify team will be joining the company, and will continue working as an independent office in Tel Aviv. In fact, Adjust plans to double the size of the team by the end of the year.
The financial terms of the acquisition were not disclosed. Unbotify was founded in 2015 by Yaron Oliker and Alon Dayan. According to Crunchbase, it raised $2 million in funding from Maverick Ventures Israel.
Ultimately, Henschel said, “What we’d like to achieve is to end fraud for digital media.”
Not that they think that Adjust alone can put a stop to all fraud. Instead, they hope to simply make it too costly and difficult for fraudsters to target Adjust customers.
“If you have a lot of houses on the street, and some of the doors are heavily fortified, most of the time [the thieves] will go with the door leaning open,” Müller said. “For us, the goal is not to eliminate fraud on an idealistic level, but actually to make it financially unviable.”
The announcement comes just a month after Adjust announced it was buying data aggregation company Acquired.io.
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Roger Dickey ditches $32M-funded Gigster to start Untitled Labs
Most founders don’t walk away from their startup after raising $32 million and reaching 1000 clients. But Roger Dickey’s heart is in consumer tech, and his company Gigster had pivoted to doing outsourced app development for enterprises instead of scrappy entrepreneurs.
So today Dickey announced that he’d left his role as Gigster CEO, with former VMware VP Christopher Keane who’d sold it his startup WaveMaker coming in to lead Gigster in October. Now, Dickey is launching Untitled Labs, a “search lab” designed to test multiple consumer tech ideas in “social and professional networking, mobility, personal finance, premium services, health & wellness, travel, photography, and dating” before building out one
Untitled Labs is starting off with $2.8 million in seed funding from early Gigster investors and other angels including Founders Fund, Felicis Ventures, Caffeinated Capital, Joe Montana’s Liquid Ventures, Ashton Kutcher, Nikita Bier of TBH (acquired by Facebook), and Zynga co-founder Justin Waldron.
Investors lined up after seeing the success of Dickey’s last two search labs. In 2007, his Curiosoft lab revamped classic DOS game Drugwars as a Facebook game called Dopewars and sold it to Zynga where it became the wildly popular Mafia Wars. He did it again in 2014, building Gigster out of Liquid Labs and eventually raising $32 million for it in rounds led by Andreessen Horowitz and Redpoint. Dickey had proven he wasn’t just dicking around and his search labs could experiment their way to an A-grade startup.
“I loved learning about B2B but over the years I realized my true passions were in consumer and I kinda got the itch to try something new” Dickey tells me. “These things happen in the life-cycle of a company. The person who starts it isn’t always the same person to take it to an IPO. Gigster’s doing incredibly well. It was just a really vanilla separation in the best interest of all parties.”
Gigster co-founders (from left): Debo Olaosebikan and Roger Dickey
Gigster’s remaining co-founder and CTO Debo Olaosebikan will stay with the startup, but tells me he’ll be “moving away from a lot of the day-to-day management.” He’ll be in a more public facing role, evangelizing the vision of digital transformation to big clients hoping Gigster can equip them with the apps their customers demand. “We’ve gotten to a really good place on the backs of the founders and to get it to the next level inside of enterprise, having people who’ve done this, lived this, worked in enterprise for a long time makes sense for the company.”
Olaosebikan and Dickey both confirm there was no misconduct or other funny business that triggered the CEO’s departure, and he’ll stay on the Gigster board. Dickey tells me that Gigster’s business managing teams of freelance product managers, engineers, and designers to handle product development for big clients has grown revenue every quarter. It now has 1200 clients including almost 10% of Fortune 500 companies. Olaosebikan says “We have a great repeatable sales model. We can grow profitably and then we can figure out financing. We’re not in a hurry to raise money.”
Since leaving Gigster, Dickey has been meeting with investors and entrepreneurs to noodle on what’s in their “idea shelf” — the product and company concepts these techies imagine but are too busy to implement themselves. Meanwhile, he’s seeking a few elite engineers and designers to work through Untitled’s prospects.
Dickey said he came up with the “search labs” definition since he and others had found success with the strategy that no one had formalized. The search labs model contrasts with three other ways people typically form startups:
- Traditional Startup: Founders come up with one idea and raise from venture firms to build it into a company that’s quick to start and lets them keep a lot of equity, but these startups often fail because they lack product market fit. Examples: Facebook, SpaceX.
- Startup Accelerators and Incubators: Founders come up with one idea and enter an accelerator or incubator that provides funding and education for lots of startups in exchange for a small slice of equity. Founders sometimes learn their idea won’t work and pivot during the program, which is why accelerators seek to fund great teams, but otherwise operate traditionally. Examples: Y Combinator, 500 Startups.
- Startup Studio: The studios’ founders work with entrepreneurs to come up with a small number of ideas while keeping a significant of the equity. The entrepreneurs operate semi-autonomously but with the advantage of shared resources. Examples: Expa, Betaworks.
- Search Lab: Founders conceptualize and experiment with a small number of startup ideas, then focus the company around the most promising prototype. Examples: Untitled Labs, Midnight Labs (turned into TBH)
Dickey tells me that after 80 angel investments, going to every recent Y Combinator Demo Day, and talking with key players across the industry, the search lab method was the best way to hone in on his best idea rather than just going on a hunch. Given that approach, he went with “Untitled” so he could save the branding work for when the right product emerges. Dickey concludes “We’re trying to keep it really barebones. We don’t have an office, don’t have a logo, and we’re not going to make swag. We’re just going to find the next business as efficiently as possible.”
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The AI market is growing, but how quickly is tough to pin down
Holden Page is an editor and journalist at Crunchbase News.
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If you work in tech, you’ve heard about artificial intelligence: how it’s going to replace us, whether it’s over-hyped or not and which nations will leverage it to prevent, or instigate, war.
Our editorial bent is more clear-cut: How much money is going into startups? Who is putting that money in? And what trends can we suss out about the health of the market over time?
So let’s talk about the state of AI startups and how much capital is being raised. Here’s what I can tell you: funding totals for AI startups are growing year-over-year; I just don’t know precisely how quickly. Regardless, startups are certainly raising massive sums of money off the buzzword.
To make that point, here are just a few of the biggest rounds announced and recorded by Crunchbase in 2018:
- SenseTime, a China-based startup that is quite good at tracking your face wherever it may be, raised a $1 billion Series D round. It was the largest round of the year in the AI category, according to Crunchbase. But what’s more mind-blowing is that the company raised a total of $2.2 billion in just one year across three rounds. A picture is worth a thousand words, but a face is worth billions of dollars.
- UBTech Robotics, another China-based startup focusing on robotics, raised an $820 million Series C. Just a cursory look at its website, however, makes UBTech appear to be a high-end toy maker rather than an AI innovator.
- And biotech startup Zymergen, which “manufactures microbes for Fortune 500 companies,” according to Crunchbase, raised a $400 million Series C.
Now, this is the part I normally include a chart and 400 words of copy to contextualize the AI market. But if you read the above descriptions closely, you’ll see our problem: What the hell does “AI” mean?
Take Zymergen as an example. Crunchbase tags it with the AI marker. Bloomberg, citing data from CB Insights, agrees. But if you were making the decision, would you demarcate it as an AI company?
Zymergen’s own website doesn’t employ the phrase. Rather, it uses buzzwords commonly associated with AI — machine learning, automation. Zymergen’s home page, technology page and careers page are devoid of the term.
Instead, the company focuses on molecular technology. Artificial intelligence is not, in fact, what Zymergen is selling. We also know that Zymergen uses some AI-related tools to help it understand its data sets (check its jobs page for more). But is that enough to call it an AI startup? I don’t think so. I would call it biotech.
That brings us back to the data. In the spirit of transparency, CB Insights reports a 72 percent boost in 2018 AI investment over 2017 funding totals. Crunchbase data pegs 2018’s AI funding totals at a more modest 38 percent increase over the preceding year.
So we know that AI fundraising for private companies is growing. The two numbers make that plain. But it’s increasingly clear to me after nearly two years of staring at AI funding rounds that there’s no market consensus over exactly what counts as an AI startup. Bloomberg in its coverage of CB Insights’ report doesn’t offer a definition. What would yours be?
If you don’t have one, don’t worry; you’re not alone. Professionals constantly debate what AI actually means, and who actually deserves the classification. There’s no taxonomy for startups like how we classify animals. It’s flexible, and with PR, you can bend perception past reality.
I have a suspicion there are startups that overstate their proximity to AI. For instance, is employing Amazon’s artificial intelligence services in your back end enough to call yourself an AI startup? I would say no. But after perusing Crunchbase data, you can see plenty of startups that classify themselves on such slippery grounds.
And the problem we’re encountering rhymes well with a broader definitional crisis: What exactly is a tech company? In the case of Blue Apron, public investors certainly differed with private investors over the definition, as Alex Wilhelm has touched on before.
So what I can tell you is that AI startup funding is up. By how much? A good amount. But the precise figure is hard to pin down until we all agree what counts as an AI startup.
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