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Valued at $500M, investors say HeadSpin is ‘one of the fastest-scaling software companies’ ever
HeadSpin has closed a $20 million Series B, valuing the provider of mobile application performance software at $500 million. New investors ICONIQ Capital, Battery Ventures and EQT Ventures participated in the funding round. Existing backers GV, Telstra Ventures, Danhua Capital, Nexus Ventures Partners and NextWorld Capital did not participate.
The company emerged from stealth last year with Manish Lachwani at the helm. Lachwani was the former principal architect of the Amazon Kindle, chief technology officer of mobile gaming company Zynga and co-founder and chief technology officer of Google-acquired Appurify, which helped developers automate testing and optimization of their mobile apps and websites.
He’s been in the application performance management business for a long time; under his leadership, Palo Alto-based HeadSpin has quickly grown into one of the fastest growing, though relatively unknown, startups in Silicon Valley.
“What HeadSpin has been able to achieve in its first three years is remarkable, and it has already attracted dozens of major clients across the mobile ecosystem,” ICONIQ partner Will Griffith said in a statement. “The company is quickly becoming the new standard of record for all mobile ecosystem players going forward. It’s one of the fastest-scaling software companies we’ve seen.”
HeadSpin works with Tinder, DocuSign and some 200 other app providers, allowing the companies to test and monitor their apps in real-time and on real devices before, during and after an app is released. The AI-enabled platform gives developers the ability to experience their app just as any regular user would and highlights high priority issues so companies can quickly resolve customer’s problems at scale.
Founded in 2015, HeadSpin says it expects to double revenue in 2018 but did not disclose any financial metrics.
Chief technology officer Brien Colwell is the other half of the company’s founding team. Colwell is the founder and former CEO of Nextop.io, a Y Combinator graduate and app optimization startup. Colwell and Lachwani are joined by HeadSpin’s head of product Sriram Krishnan, Tinder’s former head of international growth. Krishnan joined HeadSpin in October 2017 after working with HeadSpin’s toolset in his role at the app-based dating company.
“When I signed up for HeadSpin, I found out how phenomenal the product was,” Krishnan told TechCrunch .
“A lot of what we built was predicated on the fact that the mobile ecosystem is still very new,” he added. “If you think about the apps world, it’s only been around 10 years … It’s the Wild West out there when it comes to understanding performance.”
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Ian Small, former head of TokBox, takes over as Evernote CEO from Chris O’Neill
Former TokBox head Ian Small is replacing Chris O’Neill as CEO of Evernote, the note-taking and productivity app company said this morning. In a blog post, Small said that the leadership change was announced to employees this morning by Evernote’s board. “We are all hugely appreciative of the energy and dedication Chris has shown over the last three years, and in particular for putting Evernote on solid financial footing so we can continue to build for the future,” he wrote.
Small added, “When Stepan Pachikov founded Evernote, he had a vision for how technology could augment memory and how an app could change the way we relate to information at home and at work. Evernote has been more successful at making progress towards Stepan’s dreams than he could have imagined, but Stepan and I both think that there is more to explore and more to invent.”
O”Neill had been Evernote’s CEO since 2015, when he took over the position from co-founder Phil Libin. Small previously served as CEO of TokBox, which operates the OpenTok video calling platform, from 2009 to 2014, and then as its chairman from 2014 to July of this year.
O’Neill’s departure as CEO is the latest significant leadership shift for Evernote, which has withstood several key executive departures over the last few months. In early September, we reported that the company had lost several senior executives, including CTO Anirban Kundu, CFO Vincent Toolan, CPO Erik Wrobel, and head of HR Michelle Wagner, as it sought funding in a potential down-round from the unicorn valuation it hit in 2012. According to TechCrunch’s sources, Evernote had struggled to grow its base of paid users and active users, as well as enterprise clients, for the last six years.
Then a few weeks later, Evernote announced that had to lay off 54 people, or about 15 percent of its workforce. O’Neill wrote a blog post about the company’s future growth strategy, including streamlining specific functions like sales so it could focus on product development and engineering.
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Lime hires its first chief business officer amid push into car-sharing
After four months “on the beach,” per his LinkedIn profile, Uber’s former global head of business and corporate development has a new gig. Lime has hired David Richter (pictured) as its first-ever chief business officer and interim chief financial officer.
Based in San Francisco, Richter will be overseeing the bike- and e-scooter-sharing startup’s business operations. Richter spent more than four years at Uber leading the ride-hailing giant’s global business development, corporate development, experiential marketing, autonomous vehicle alliances and brand relevance teams. He left in May after expressing frustrations with a series of departures in his group, according to The Information.
“As Lime continues to grow, David will bring in unparalleled expertise, particularly in the realm of business development and corporate partnerships, as well as in managing our overall business strategy and deal flow,” Lime co-founder and chief executive officer Toby Sun said in a statement. “His leadership experience, coupled with his keen understanding of the fast-moving shared mobility industry will be a huge advantage to our company as we continue to expand our global footprint.”
Lime is said to be completing the fundraising circuit right now, asking investors for a valuation north of $3 billion. The company, which entered the unicorn club in June, has raised a total of $467 million to date from GV, Andreessen Horowitz, IVP, Section 32, GGV Capital and more.
The company is using the buckets of capital to expand beyond bikes and scooters. Last Monday, rumors emerged that it was planning a brick-and-mortar push. The company confirmed that it would indeed build scooter “lifestyle stores” in major U.S. and international markets, starting with Santa Monica, Calif.
The next day on stage at the JD Power Automotive Roundtable, Lime announced its official foray into car-sharing. The company has since applied for a car-sharing permit in Seattle and plans to rent out small electric vehicles, which it’s calling “transit pods,” by the end of the year.
According to Axios, Lime plans to spend $50 million on the pods, which will cost $1 for consumers to start, plus an additional 40 cents per minute.
“You can expect electric vehicles to be an additional micro-mobility option for Lime riders to choose from within the Lime app soon,” a spokesperson for Lime said in a statement provided to TechCrunch. “More details on timing, specs of the vehicle, locations for the first rollout, etc. will be announced in the coming weeks.”
Lime launched in 2017 and has since recorded 11.5 million scooter and bike rides.
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YC-backed Observant uses the iPhone’s infrared depth sensors to analyze user emotions
Observant has found a new way to use the fancy infrared depth sensors included on the iPhone X, XS and XR: analyzing people’s facial expression in order to understand how they’re responding to a product or a piece of content.
Observant was part of the winter batch of startups at accelerator Y Combinator, but was still in stealth mode on Demo Day. It was created by the same company behind bug-reporting product Buglife, and CEO Dave Schukin said his team created it because they wanted to find better ways to capture user reactions.
We’ve written about other startups that try to do something similar using webcams and eye tracking, but Schukin (who co-founded the company with CTO Daniel DeCovnick) argued that those approaches are less accurate than Observant’s — in particular, he argued that they don’t capture subtler “microexpressions,” and they don’t do as well in low-light settings.
In contrast, he said the infrared depth sensors can map your face in high levels of detail regardless of lighting, and Observant has also created deep learning technology to translate the facial data into emotions in real time.
Observant has created an SDK that can be installed in any iOS app, and it can provide either a full, real-time stream of emotional analysis, or individual snapshots of user responses tied to specific in-app events. The product is currently invite-only, but Schukin said it’s already live in some retail and e-commerce apps, and it’s also being used in focus group testing.
Of course, the idea of your iPhone capturing all your facial expressions might sound a little creepy, so he emphasized that as Observant brings on new customers, it’s working with them to ensure that when the data is collected, “users are crystal clear how it’s being used.” Plus, all the analysis actually happens on the users’ device, so no facial footage or biometric data gets uploaded.
Eventually, Schukin suggested that the technology could be applied more broadly, whether that’s by helping companies provide better recommendations, introduce more “emotional intelligence” to their chatbots or even detect sleepy driving.
As for whether Observant can achieve those goals when it’s only working on three phones, Schukin said, “When we started working on this almost a year go, the iPhone X was the only iPhone [with these depth sensors]. Our thinking at the time was, we know how Apple works, we know how this technology propagates over time, so we’re going to place a bet that eventually these depth sensors will be on every iPhone and every iPad, and they’ll be emulated and replicated on Android.”
So while it’s too early to say whether Observant’s bet will pay off, Schukin pointed to the fact that these sensors have expanded from one to three iPhone models as a sign that things are moving in the right direction.
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Expedia acquires Pillow and ApartmentJet to conquer the short-term rental market
To keep up with the rising demand for short-term rentals in U.S. cities and compete with the home-sharing giant Airbnb, travel booking site Expedia has picked up a pair of venture-backed hospitality startups, Pillow and ApartmentJet.
Employees of both companies will join Expedia . The company declined to disclose the financial terms of the deals.
“Acquiring Pillow and ApartmentJet will help unlock urban growth opportunities that, over time, will contribute to HomeAway’s ability to add an even broader selection of accommodations to its marketplace and marketplaces across Expedia Group brands, ensuring travelers always find the perfect place to stay,” the company explained in a statement.
Expedia paid $3.9 billion for HomeAway and its portfolio of travel brands in 2015. The deal was its first major move in the alternative accommodations space, as well as the beginning of a series of efforts to outdo VC darling Airbnb. Its latest targets provide software tools for property managers to easily manage short-term rentals on Airbnb competitors like HomeAway and VRBO.
Located in San Francisco, Pillow helps residents list their apartments as short-term rentals without violating their leases. It’s raised a total of $16.5 million in VC backing since 2013, including a $13.5 million round last year led by Mayfield, with participation from Sterling.VC, Peak Capital Partners, Expansion VC, Chris Anderson, Gary Vaynerchuk, Dennis Phelps and Veritas Investments.
ApartmentJet helps property owners earn money off vacancies. Founded in 2016, the Chicago-headquartered startup had raised a reported $1.2 million in capital from Network Ventures and BlueTree.
Bellevue-based Expedia Group owns several travel brands, including HomeAway, VRBO, Travelocity, trivago, Orbitz and Hotels.com. The company is both an active investor in and acquirer of startups.
Expedia’s shares rose 9.4 percent Thursday after its third-quarter earnings beat analyst expectations. The company posted $3.28 billion in revenue, a notable increase from last year’s $2.97 billion.
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Chat fiction startup Hooked unveils ‘Dark Matter,’ its first feature-length thriller
Chat fiction startups have been exploring the types of stories you can tell in the form of text message conversations, and now Hooked is taking that exploration one step further with the launch of “Dark Matter.” The company describes this as its first feature-length story.
“Dark Matter” tells the story of Tasneem (Taz) Singh, a South Asian American student at Stanford who, after the mysterious death of her twin sister, discovers that she has the ability to interact with the paranormal.
The story debuts today on Snapchat, with a new chapter coming out every day until Tuesday, October 30. According to CEO Prerna Gupta, the full script totals 32,000 words — the length of a feature film script or short novel: “I think it’s fair to say this is the longest chat fiction story. It’s certainly the longest one we’ve ever produced for Hooked.”
If you’re not already a chat fiction fan, you may be skeptical about reading something that long in text message format. Gupta admitted that she and her husband Parag Chordia had similar doubts when they started the company together.
“I would be lying if I didn’t say if we also didn’t have that question ourselves,” she told me. “When a new kind of format or really new medium comes up, you start with the basics first. You tell the simplest stories, then as you become more adept at communicating with that format, you can start to go deeper.”
That’s meant going beyond text — “Dark Matter,” for example, will include a voice track and custom illustrations.
“The length makes a big difference,” Gupta added. “You can take your time, slow it down and spend more time with world building, developing deeper relationships between the characters.”
“Dark Matter” was written by Hooked staff writer Elyse Endick, but Gupta said the writing process was “almost more like a writers’ room — it was very collaborative, she did a show bible, then at each step she and I and our head of content would sit in a Google Hangout and just kind of flesh it out.”
Although the story is premiering on Snapchat, it will also make its way to the main Hooked app. Gupta said that she’s less focused on owning the distribution channel than on reaching big, global audiences — and distributing via Snapchat can help with that. (The company says 100 million unique readers have accessed its stories across the Hooked app and Snapchat.)
“I’m not trying to be the next Instagram,” she said. “It’s not about the app or any given app. For me, it’s really about our stories.”
And while Snapchat has recently lost some of its luster (daily active user count fell by another 1 percent in its most recent quarter), Gupta said, “I think people are underestimating their whole strategy around entertainment, around being TV for the next generation.”
She added that engagement around Hooked content on Snapchat has been “insane.”
“Why are we investing our resources with Snap? Because of what we’re seeing,” she said. “Our audience and how engaged they are, that’s real.”
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Tap, a new startup from Sam Rosen, wants to be the Google of drinking water
MakeSpace founder and former CEO Samuel Rosen is ready to launch his next venture, and it has little or nothing to do with the on-demand economy. This time, Rosen is setting his sights on the world of water.
Tap aims to be the world’s first public index and global search engine for drinking water.
Plastic water bottles are, in many ways, the scourge of the planet. More than 90 percent of the environmental impact of plastic water bottles happens during manufacture, and the Guardian reported that more than 1 million plastic water bottles were sold a minute across the globe in 2016.
Some people have switched over to reusable water bottles and canteens, but once they do, there is no way to search for water fountains or sources of drinking water. That’s where Tap comes in.
In its first iteration, Tap is a bit like the Waze for water. Using a combination of user-generated content and data from water fountain manufacturers, Tap aims to be a public search engine for where to find water. As it stands now, Tap has more than 34,000 Refill Stations across 30 countries indexed on the app.
But Tap also has ambitions to offer a backend system for water fountain companies. Normally, these companies sell a number of units to airports or other commercial or government properties. Those customers then install the fountains wherever they see fit, and the water fountain company is more or less uninvolved.
However, those companies then need to maintain the fountains, installing new filters and repairing broken parts, etc. But one fountain may be far more trafficked than another, and thus need higher frequency maintenance.
Tap wants to offer an SDK to these companies so that when users report bad filters or a broken water fountain, that information shows up on their dashboard.
Rosen sees an opportunity to generate revenue in a manner similar to Google, offering an advertising product for companies down the line.
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Quizlet hits 50M monthly users
Most students in the U.S. have used or at least heard of Quizlet, the website for creating digital flashcards.
The company leverages machine learning to predict in which areas its users need the most help and provides 300 million user-generated study decks, maps, charts and other tools for learning.
Roughly eight months after closing a $20 million financing, Quizlet chief executive officer Matthew Glotzbach has disclosed some notable feats for the emerging edtech: it’s reached 50 million monthly active users, up from 30 million one year ago, and though it’s not profitable yet, its revenue is growing 100 percent YoY.
As a result of its recent growth, the company is opening its first office outside of Silicon Valley, in Denver.
“We by no means feel like our work is done; 50 million is a very small fraction of the 1.4 billion students on the planet,” Glotzbach told TechCrunch. “Our focus is growing the platform. If we continue to be successful in that mission, we will be the largest study and learning brand.”
The company has been around for a while. Founded in 2005 by then 15-year-old Andrew Sutherland, Quizlet was fully bootstrapped until 2015.
Its growth really began when Glotzbach, a seasoned executive most recently at YouTube, took the reigns in 2016. The $20 million round earlier this year, its largest yet, has allowed the company to blossom, too. Led by Icon Ventures, with participation from Union Square Ventures, Costanoa Ventures and others, it brought Quizlet’s total raised to just over $30 million.
Part of its growth, according to Glotzbach, has to do with its recent focus on its international users. The site has always been accessible around the world, but not until late 2016 did Quizlet begin offering the tool in other languages. Today, it’s available in more than 15 languages, a number the company is actively working to expand.
Newly added capabilities have also contributed to recent spikes in MAUs. Students can now access diagram-based content, which is helpful for STEM subjects, an area the company has historically been less helpful with.
Quizlet operates a freemium model but has three subscription products for power users. At $12 per year, Quizlet Go has no ads and provides an offline studying option on mobile. Quizlet Plus, at $20 per year, also provides an ad-free study experience, as well as image uploading and voice recording capabilities. Finally, Quizlet for Teachers offers educators a $35 per year option that lets them create their own decks for students and access to additional data, analytics and reporting.
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NBA All-Star Michael Jordan leads a $26 million round for esports group aXiomatic
NBA legend Michael Jordan is playing the esports game now, leading a $26 million round of funding for the ownership group aXiomatic.
For Jordan and new co-investor Declaration Capital — the family office investing the personal wealth of David Rubenstein, who co-founded and serves as co-executive chairman of the multi-billion-dollar private equity firm, The Carlyle Group — investing in esports looks like a slam dunk.
The company announced the investment from Jordan, Declaration Capital and Curtis Polk, the managing partner and alternate governor of Hornets Sports & Entertainment, and manager of the financial and business affairs of Michael Jordan and his related companies, earlier today. Bloomberg reported the $26 million figure.
As owners of the TeamLiquid esports franchise, which Forbes estimates as the second most valuable gaming team in the industry, aXiomatic has a solid base in the budding world of esports — an increasingly lucrative market.
Indeed, the most successful esports company, Cloud9, just raised $53.6 million in a new round of funding, according to documents filed with the Securities and Exchange Commission.
“I’m excited to expand my sports equity portfolio through my investment in aXiomatic. Esports is a fast-growing, international industry and I’m glad to partner with this great group of investors,” said Jordan, in a statement.
Athletes and owners of professional sports teams have flooded into the esports industry, plunking down $20 million to own teams in the officially sanctioned Overwatch League and placing similar-sized and smaller bets on companies developing services for the esports ecosystem.
The Philadelphia 76ers were among the first NBA teams to dip their toe in the esports waters when they acquired Team Dignitas in a deal that was rumored to be worth up to $15 million at the time. Earlier this year, Dignitas brought home a world championship in RocketLeague for the Sixers.
Now, the Golden State Warriors, Cleveland Cavaliers and Houston Rockets are all backing esports teams in Riot Games’ League of Legends tournaments, according to a recent report in Bloomberg.
“The next generation of sports fans are esports fans,” said Ted Leonsis, co-executive chairman of aXiomatic and the founder, chairman, chief executive and majority owner of Monumental Sports & Entertainment (which owns the Washington Wizards, Capitals and the WNBA Mystics franchise), in a statement. “Esports is the fastest-growing sector in sports and entertainment, and aXiomatic is at the forefront of that growth. We are thrilled to welcome Michael and Declaration Capital to aXiomatic and look forward to working together on some truly cutting-edge opportunities.”
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Daily Crunch: Tesla is profitable again
The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here:
1. Tesla earns its first profit in two years
Tesla reported a profit in the third quarter, reversing seven consecutive quarters of losses. This is only the third time in the company’s history that it has achieved this milestone.
The turnaround was driven by sales of the Model 3. The company said customers are trading up their relatively cheaper vehicles to buy a Model 3, even though there is not yet a leasing option and the starting price was $49,000.
2. Trump has two ‘secure’ iPhones, but the Chinese are still listening
A new report by The New York Times puts a spotlight on the president’s array of devices and how he uses them. However, both Trump and a spokesperson for China’s foreign ministry have denied the story.
(BRENDAN SMIALOWSKI/AFP/Getty Images)
3. Red Dead Redemption 2 sets the bar high for the next generation of open world games
Tomorrow, Red Dead Redemption 2 goes live after months of breathless speculation. And according to Devin Coldewey and Jordan Crook, it’s as good as you’ve been hoping.
4. Facebook is building Lasso, a video music app to steal TikTok’s teens
Facebook is building a standalone product where users can record and share videos of themselves lip syncing or dancing to popular songs, according to information from current and former employees.
5. One-year-old Ribbon raises $225m to remove the biggest stress of home buying
The startup wants to replace the incredible stress of securing a mortgage during the home-buying process with a Ribbon Offer: If a buyer can’t secure a mortgage in time for close, Ribbon will pay for the house itself and give the buyer extra time to get financing.
6. Twitter beats Wall St Q3 estimates with $758M in revenue
Twitter reported a 29 percent increase in ad revenue to $650 million, and the company says total ad engagements increased 50 percent year over year. However, user growth didn’t quite match expectations.
7. Confirmed: ShopRunner acquires Spring, raises $40M
ShopRunner is announcing its first infusion of venture funding under CEO Sam Yagan, plus an acquisition of the shopping app Spring. Sources also say it’s readying a major overhaul of its mobile app.
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