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How to break into Silicon Valley as an outsider
Domm Holland, co-founder and CEO of e-commerce startup Fast, appears to be living a founder’s dream.
His big idea came from a small moment in his real life. Holland watched as his wife’s grandmother tried to order groceries, but she had forgotten her password and wasn’t able to complete the transaction.
“I just remember thinking it was preposterous,” Holland said. “It defied belief that some arbitrary string of text was a blocker to commerce.”
So he built a prototype of a passwordless authentication system where users would fill out their information once and would never need to do so again. Within 24 hours, tens of thousands of people had used it.
Nothing beats building human networks. That’s the way that you’re going to get this done in terms of fundraising.
Shoppers weren’t the only ones on board with this idea. In less than two years, Holland has raised $124 million in three rounds of fundraising, bringing on partners like Index Ventures and Stripe.
Although the success of Fast’s one-click checkout product has been speedy, it hasn’t been effortless.
For one thing, Holland is Australian, which means he started out as a Silicon Valley outsider. When he arrived in the U.S. in the summer of 2019, he had exactly one Bay Area contact in his phone. He built his network from the ground up, a strategic process he credits to one thing: hard work.
On an episode of the “How I Raised It” podcast, Holland talks about how he built his network, why it’s important — not just for fundraising but for building the entire business — and how to avoid the mistakes he sees new founders make.
Reach out with relevance
Holland’s primary strategy in building networks sounds like an obvious one — reach out to relevant people.
“When I first got to the States, I wanted to build networks,” Holland said, “but I didn’t really know anyone here in the Bay Area. So I spent a lot of time reaching out to relevant people — people working in payments, people working in technology, people working in identity authentication — just really relevant people in the space working in Big Tech who were building large-scale networks.”
One of the people Holland connected with was Allison Barr Allen, then the head of global product operations at Uber. Barr Allen managed her own angel investment fund, but Holland wasn’t actually looking for money when he reached out to her. He was much more interested in her perspective as the leader of an enormous financial services operation.
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Cognixion’s brain-monitoring headset enables fluid communication for people with severe disabilities
Of the many frustrations of having a severe motor impairment, the difficulty of communicating must surely be among the worst. The tech world has not offered much succor to those affected by things like locked-in syndrome, ALS and severe strokes, but startup Cognixion aims to with a novel form of brain monitoring that, combined with a modern interface, could make speaking and interaction far simpler and faster.
The company’s One headset tracks brain activity closely in such a way that the wearer can direct a cursor — reflected on a visor like a heads-up display — in multiple directions, or select from various menus and options. No physical movement is needed, and with the help of modern voice interfaces like Alexa, the user can not only communicate efficiently but freely access all kinds of information and content most people take for granted.
But it’s not a miracle machine, and it isn’t a silver bullet. Here’s how it got started.
Overhauling decades-old brain tech
Everyone with a motor impairment has different needs and capabilities, and there are a variety of assistive technologies that cater to many of these needs. But many of these techs and interfaces are years or decades old — medical equipment that hasn’t been updated for an era of smartphones and high-speed mobile connections.
Some of the most dated interfaces, unfortunately, are those used by people with the most serious limitations: those whose movements are limited to their heads, faces, eyes — or even a single eyelid, like Jean-Dominique Bauby, the famous author of “The Diving Bell and the Butterfly.”
One of the tools in the toolbox is the electroencephalogram, or EEG, which involves detecting activity in the brain via patches on the scalp that record electrical signals. But while they’re useful in medicine and research in many ways, EEGs are noisy and imprecise — more for finding which areas of the brain are active than, say, which sub-region of the sensory cortex or the like. And of course you have to wear a shower cap wired with electrodes (often greasy with conductive gel) — it’s not the kind of thing anyone wants to do for more than an hour, let alone all day every day.
Yet even among those with the most profound physical disabilities, cognition is often unimpaired — as indeed EEG studies have helped demonstrate. It made Andreas Forsland, co-founder and CEO of Cognixion, curious about further possibilities for the venerable technology: “Could a brain-computer interface using EEG be a viable communication system?”
He first used EEG for assistive purposes in a research study some five years ago. They were looking into alternative methods of letting a person control an on-screen cursor, among them an accelerometer for detecting head movements, and tried integrating EEG readings as another signal. But it was far from a breakthrough.
A modern lab with an EEG cap wired to a receiver and laptop — this is an example of how EEG is commonly used. Image Credits: BSIP/Universal Images Group via Getty Images
He ran down the difficulties: “With a read-only system, the way EEG is used today is no good; other headsets have slow sample rates and they’re not accurate enough for a real-time interface. The best BCIs are in a lab, connected to wet electrodes — it’s messy, it’s really a non-starter. So how do we replicate that with dry, passive electrodes? We’re trying to solve some very hard engineering problems here.”
The limitations, Forsland and his colleagues found, were not so much with the EEG itself as with the way it was carried out. This type of brain monitoring is meant for diagnosis and study, not real-time feedback. It would be like taking a tractor to a drag race. Not only do EEGs often work with a slow, thorough check of multiple regions of the brain that may last several seconds, but the signal it produces is analyzed by dated statistical methods. So Cognixion started by questioning both practices.
Improving the speed of the scan is more complicated than overclocking the sensors or something. Activity in the brain must be inferred by collecting a certain amount of data. But that data is collected passively, so Forsland tried bringing an active element into it: a rhythmic electric stimulation that is in a way reflected by the brain region, but changed slightly depending on its state — almost like echolocation.
The Cognixion One headset with its dry EEG terminals visible. Image Credits: Cognixion
They detect these signals with a custom set of six EEG channels in the visual cortex area (up and around the back of your head), and use a machine learning model to interpret the incoming data. Running a convolutional neural network locally on an iPhone — something that wasn’t really possible a couple years ago — the system can not only tease out a signal in short order but make accurate predictions, making for faster and smoother interactions.
The result is sub-second latency with 95-100% accuracy in a wireless headset powered by a mobile phone. “The speed, accuracy and reliability are getting to commercial levels — we can match the best in class of the current paradigm of EEGs,” said Forsland.
Dr. William Goldie, a clinical neurologist who has used and studied EEGs and other brain monitoring techniques for decades (and who has been voluntarily helping Cognixion develop and test the headset), offered a positive evaluation of the technology.
“There’s absolutely evidence that brainwave activity responds to thinking patterns in predictable ways,” he noted. This type of stimulation and response was studied years ago. “It was fascinating, but back then it was sort of in the mystery magic world. Now it’s resurfacing with these special techniques and the computerization we have these days. To me it’s an area that’s opening up in a manner that I think clinically could be dramatically effective.”
BCI, meet UI
The first thing Forsland told me was “We’re a UI company.” And indeed even such a step forward in neural interfaces as he later described means little if it can’t be applied to the problem at hand: helping people with severe motor impairment to express themselves quickly and easily.
Sad to say, it’s not hard to imagine improving on the “competition,” things like puff-and-blow tubes and switches that let users laboriously move a cursor right, right a little more, up, up a little more, then click: a letter! Gaze detection is of course a big improvement over this, but it’s not always an option (eyes don’t always work as well as one would like) and the best eye-tracking solutions (like a Tobii Dynavox tablet) aren’t portable.
Why shouldn’t these interfaces be as modern and fluid as any other? The team set about making a UI with this and the capabilities of their next-generation EEG in mind.
Image Credits: Cognixion
Their solution takes bits from the old paradigm and combines them with modern virtual assistants and a radial design that prioritizes quick responses and common needs. It all runs in an app on an iPhone, the display of which is reflected in a visor, acting as a HUD and outward-facing display.
In easy reach of, not to say a single thought but at least a moment’s concentration or a tilt of the head, are everyday questions and responses — yes, no, thank you, etc. Then there are slots to put prepared speech into — names, menu orders and so on. And then there’s a keyboard with word- and sentence-level prediction that allows common words to be popped in without spelling them out.
“We’ve tested the system with people who rely on switches, who might take 30 minutes to make 2 selections. We put the headset on a person with cerebral palsy, and she typed our her name and hit play in 2 minutes,” Forsland said. “It was ridiculous, everyone was crying.”
Goldie noted that there’s something of a learning curve. “When I put it on, I found that it would recognize patterns and follow through on them, but it also sort of taught patterns to me. You’re training the system, and it’s training you — it’s a feedback loop.”
“I can be the loudest person in the room”
One person who has found it extremely useful is Chris Benedict, a DJ, public speaker and disability advocate who himself has Dyskinetic Cerebral Palsy. It limits his movements and ability to speak, but doesn’t stop him from spinning (digital) records at various engagements, however, or from explaining his experience with Cognixion’s One headset over email. (And you can see him demonstrating it in person in the video above.)
Image Credits: Cognixion
“Even though it’s not a tool that I’d need all the time it’s definitely helpful in aiding my communication,” he told me. “Especially when I need to respond quickly or am somewhere that is noisy, which happens often when you are a DJ. If I wear it with a Bluetooth speaker I can be the loudest person in the room.” (He always has a speaker on hand, since “you never know when you might need some music.”)
The benefits offered by the headset give some idea of what is lacking from existing assistive technology (and what many people take for granted).
“I can use it to communicate, but at the same time I can make eye contact with the person I’m talking to, because of the visor. I don’t have to stare at a screen between me and someone else. This really helps me connect with people,” Benedict explained.
“Because it’s a headset I don’t have to worry about getting in and out of places, there is no extra bulk added to my chair that I have to worry about getting damaged in a doorway. The headset is balanced too, so it doesn’t make my head lean back or forward or weigh my neck down,” he continued. “When I set it up to use the first time it had me calibrate, and it measured my personal range of motion so the keyboard and choices fit on the screen specifically for me. It can also be recalibrated at any time, which is important because not every day is my range of motion the same.”
Alexa, which has been extremely helpful to people with a variety of disabilities due to its low cost and wide range of compatible devices, is also part of the Cognixion interface, something Benedict appreciates, having himself adopted the system for smart home and other purposes. “With other systems this isn’t something you can do, or if it is an option, it’s really complicated,” he said.
Next steps
As Benedict demonstrates, there are people for whom a device like Cognixion’s makes a lot of sense, and the hope is it will be embraced as part of the necessarily diverse ecosystem of assistive technology.
Forsland said that the company is working closely with the community, from users to clinical advisors like Goldie and other specialists, like speech therapists, to make the One headset as good as it can be. But the hurdle, as with so many devices in this class, is how to actually put it on people’s heads — financially and logistically speaking.
Cognixion is applying for FDA clearance to get the cost of the headset — which, being powered by a phone, is not as high as it would be with an integrated screen and processor — covered by insurance. But in the meantime the company is working with clinical and corporate labs that are doing neurological and psychological research. Places where you might find an ordinary, cumbersome EEG setup, in other words.
The company has raised funding and is looking for more (hardware development and medical pursuits don’t come cheap), and has also collected a number of grants.
The One headset may still be some years away from wider use (the FDA is never in a hurry), but that allows the company time to refine the device and include new advances. Unlike many other assistive devices, for example a switch or joystick, this one is largely software-limited, meaning better algorithms and UI work will significantly improve it. While many wait for companies like Neuralink to create a brain-computer interface for the modern era, Cognixion has already done so for a group of people who have much more to gain from it.
You can learn more about the Cognixion One headset and sign up to receive the latest at its site here.
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Fitness ring maker Oura raises $100M
It’s been a wild couple of years for Oura. Last year, in particular, proved to be a major driver for the wearable fitness manufacturer. With the pandemic bringing professional sports to a screeching halt in 2020, a number of major leagues have adopted the ring, including the NBA, WNBA, UFC and NASCAR.
The company has also been making a major push into health research courtesy of UCSF, which has published peer-review studies around the ring’s temperature monitor. That feature in particular has made it a big draw for the aforementioned leagues, as temperature spikes could point to larger issues, including the early stages of COVID-19.
Today the company is announcing a $100 million Series C. The round, led by The Chernin Group and Elysian Park (the Dodgers’ investment arm), brings the wearable company’s total funding up to $148.3 million. New investors include Temasek, JAZZ Venture Partners and Eisai, joining existing investors Forerunner Ventures, Square, MSD Capital, Marc Benioff, Lifeline Ventures, Metaplanet Holdings and Next Ventures.
The company initially set itself apart with its form factor, joining a crowded field that largely revolved around the wrist. Clearly, however, it’s come into its own over the last few years. To date, it’s sold more than 500,000 rings.
“The wearables industry is transitioning from activity trackers to health platforms that can improve people’s lives,” CEO Harpreet Singh Rai said in a press release tied to the news. “Oura focused first on sleep because it’s a daily habit, and lack of sleep has been linked to worsening health conditions including diabetes, cardiac disease, Alzheimer’s, cancer, poor mental health, and more.”
The company says the round will go toward R&D (both hardware and software development) and hiring, including additional marketing and customer experience. The round also sees the hiring of a number of key roles, including head of Science, Shyamal Patel; site leader Tommi Heinonen and Daniel Welch, who has been promoted to CFO.
“This year has shined a spotlight on gaps in our healthcare industry, and the increasing need for each of us to take control over our own health,” Forerunner Managing Director Eurie Kim said in the release. “Oura is emerging as the trusted leader and community in the space by empowering people with personalized data that provides actionable insights for health improvement.”
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Pivoting from offline into virtual events for enterprises nets Tame a $5.5M seed round
In March 2020, Tame had a digital event suite for offline corporate events. But with the pandemic hitting, it did a hard pivot into providing a highly customizable virtual events platform, primarily used by companies for their sales events. The result is that it has now raised a seed round of $5.5 million, a large round for its native Denmark, led by VF Venture (The Danish Growth Fund), along with byFounders and three leading angels: Mikkel Lomholt (CTO and co-founder, Planday); Sune Alstrup (Ex-CEO and co-founder, The Eye Tribe); and Ulrik Lehrskov Schmidt.
The investment will be used to scale from 20 to 60 new employees across Copenhagen, London, and Krakow; expand to the U.K.; and grow revenues.
Founder Jasenko Hadzic, CEO and co-founder, said the pivot to virtual grew revenues “by 700% organically last year. No sales. No marketing. Organically. Therefore, Tame sees a huge opportunity and is going all-in on expanding aggressively to position itself as a market leader.”
Jacob Bratting Pedersen, partner, VF Venture, said: “At VF Venture, we want to help develop and drive innovation. The corona[virus] crisis has brought digital momentum with it, and here Danish IT entrepreneurs have the opportunity to seize that agenda and bring Danish technology and expertise to the global market. Tame is a really good example of that. Tame has great potential to create a strong, global business for the benefit of growth and jobs in Denmark.”
Hadzic himself is already a success story — he eventually made it into the tech industry after arriving in Denmark as a child refugee from war-torn Bosnia during the Yugoslavian civil war.
But don’t mistake Tame for a Hopin. Hadzic told me: “We’re not interested in getting TechCrunch Disrupt as a customer, or the big trade fairs. We just want to focus on those enterprise companies which we sell to a marketing department or an HR department.”
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IAC’s NurseFly rebrands to Vivian Health as it expands its healthcare jobs marketplace
NurseFly, the healthcare jobs marketplace owned by IAC, has rebranded to Vivian Health as it expands its range of services. Originally launched for traveling nurses (or nurses willing to travel for short-term positions), Vivian Health now includes listings for permanent positions, per diem shifts and local openings. It also added employer reviews and a pay database that uses information gathered from the 1.7 million jobs that have come through its system.
Founded in 2017, NurseFly was acquired by IAC in August 2019. It is used by providers like AMN Healthcare, Cross Country Healthcare, Host Healthcare, Trinity Health, SSM Health and Honor Health. During the pandemic, Vivian Health quadrupled its employee headcount in order to meet demand, founder and chief executive officer Parth Bhakta told TechCrunch in an email.
“Over the past year, we’ve grown to fill nearly 10% of all travel nursing positions across the United States, oftentimes helping fill a crisis position in a matter of hours rather than weeks,” Bhakta said. During that time, the platform heard from major health systems “that their challenges around hiring for permanent roles were oftentimes even more dire than filling their travel positions,” he added. “Permanent roles at health systems were taking months to fill, costing tens of thousands of dollars to hire, and leading to short-staffed facilities in the meantime.”
As a result of these conversations, Vivian Health’s team spent three months rebuilding the platform to serve a wider range of healthcare providers and employers. Its rebranding and expansion comes at a time when many healthcare professionals are reporting burnout as a result of the pandemic.
In a study of 1,300 respondents published earlier this month, Vivian Health found that 83% said their mental health had been affected by working in healthcare over the past year. About 43% said they had considered quitting the profession.
One of the main reasons for burnout is working overtime, with 86% of their respondents reporting that their facilities are short-staffed, even as demand for healthcare professionals accelerates. According to the Bureau of Labor Statistics (BLS), about 17.3 million people were employed in the healthcare sector in 2018, and that number is expected to increase 15% to 19.9 million by 2028, making it one of the fastest-growing sectors.
“Crisis-level staffing shortages” are compounded by the amount of time, sometimes up to 120 days, it can take to hire a permanent employee. Shortening the amount of time it takes to fill positions has a ripple effect because clinicians need to work less overtime. Meanwhile, recruiters can focus on the right leads. Bhakta said employers have been able to use Vivian Health to fill permanent positions in as little as one week, and are typically able to do so within 30 days.
Vivian Heath built a proprietary data set of healthcare industry information through the 1.7 million jobs that have come through its systems and asks all of its staffing agency partners to include pay rates in their listings. As a result, job seekers are able to see how a position’s compensation compares against the market, while employers can quickly adjust their rates to be more competitive.
Bhakta said Vivian Health added pay information because “our business is built on transparency, which we believe is a crucial element in solving the healthcare hiring crisis.”
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As Q2’s lull fades, unicorn IPOs are revving up
The public markets give, and the public markets take away. Earlier this morning, enterprise cloud storage and productivity company Box got into a more public spat with some of its shareholders upset with its performance and management decisions. But while Box endures the more difficult chapters of being a public company, other companies are racing to join the ranks of the listed concerns of the world.
If it feels like IPO news slowed for a few weeks at the start of the second quarter, your gut is correct. Investors previously told The Exchange that the first, third and fourth quarters of 2021 would be hot periods for public debuts, but that Q2 would be slower. Their argument revolved around reporting cadences and how long it takes for certain periods of accounting work to be completed.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.
So we weren’t surprised when the second quarter’s IPO cycle began to feel a bit soft compared to the rapid-fire first quarter. And, as we’ve all heard in recent days, the great SPAC rush is slowing.
But that hasn’t stopped a number of firms from defying expectations and going public all the same. Online hosting and website builder Squarespace has not only filed but filled in its public filing with notes on its anticipated direct listing. We have to talk about its choice to list directly in light of new financial information we have concerning its recent performance.
But there’s more: Expensify filed to go public yesterday, albeit privately. And the SmartRent SPAC combination, though now slightly dated, is also worth a moment of our time.
The final element in the current IPO landscape is the recent Darktrace IPO in the United Kingdom, which, after that market had a rough start to its tech IPO calendar, is now seeing better results. So, let’s discuss IPOs to fully understand where we stand today in the realm of unicorn liquidity.
Squarespace’s direct listing
When The Exchange first dug into Squarespace’s IPO filing, we did our best to parse its full-year results because we lacked its quarterly details. This leaves us with two things to chew on: Why is Squarespace pursuing a direct listing over another listing technique, and what can its current and more granular operating results tell us about the choice?
On the first count, if Squarespace is direct listing, we can presume that it doesn’t need more cash to operate. So, how much cash does the company have on hand? A good chunk of change: $183.3 million.
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Headway raises $70M at a $750M valuation to help connect therapists with people and insurance schemes
Mental health, and how it is getting addressed, has been one of the major leitmotifs of the past year of pandemic living. COVID-19 not only has led to a lot of people getting ill or worse; it has increased isolation, economic uncertainty and led to a lot of other kinds of disappointments, and that all has had a knock-on effect on our collective and individual state of mind.
Today a startup called Headway, which has been working on building a better way for people to attend to themselves — by way of a three-sided marketplace of sorts, by helping a person to find and afford a therapist via a free-to-use portal, by making it possible for those therapists to accept a wider range of insurance plans and by helping those insurance plans facilitate more therapy appointments for their patient networks — is announcing a major round of funding on the heels of strong growth.
The startup has raised $70 million, money that it will be using to continue expanding its platform with more partnerships, more hiring for its team (it wants to have 300 people this year) and opening in new regions, aiming to be nationwide this year in the U.S. This round, a Series B, has a number of big names attached to it: It is being led by Andreessen Horowitz, with Thrive, GV and Accel also participating. (The latter three are repeat investors: Thrive and GV led its Series A, while Accel led its seed.) This Series B is coming in at a $750 million valuation.
The rapid pace of funding, the backers and that valuation all underscore the timeliness of the concept, and also the traction that Headway is getting for its approach.
When we last covered Headway — it raised $26 million just last November, six months ago — it said it had registered some 1,800 therapists on its platform in the New York metro area, where it is based. Now that number is up to more than 3,000 with its network now covering not just NYC, but also New Jersey, Florida, North Carolina, Texas, Georgia, Michigan, Virginia, Washington, Illinois and Colorado. It has more than 2,000 patients joining the platform each month and has so far helped facilitate 300,000 appointments, with a current average of 30,000 appointments each month. Revenues have in the last year, meanwhile, grown nine-fold.
The approach that Headway is taking — creating not just a vertical search portal for therapists, but building a back-end system to help those therapists grow their business by making it easier for them to accept insurance coverage — comes directly out of the experiences faced by one of the startup’s co-founders.
Andrew Adams, the CEO of Headway, told me last year he came up with the idea after he moved to New York from California several years ago to take a job. In seeking a therapist, he found most unwilling to accept his insurance plan as payment, making getting therapy unaffordable.
This is a very typical problem, he said. Some 70% of therapists do not accept insurance today because it’s too complicated for them to integrate, since about 85% of all therapists happen to be solo practitioners. So something that should be accessible to everyone becomes something typically only used by those who can afford it, or have entered into social care programs that might provide it. But that leaves a massive gap in the middle.
“This is the defining problem in the space,” he said at the time. “Health insurance is built around a medical world dominated by billers and admins, but therapists are small practitioners and don’t have the bandwidth to handle that, so they don’t. So we thought if we could make it easier for them to, they would, and they have.”
And indeed, if you are needing to see a therapist, the very last thing you need or want to be doing is spending your time trying to work out the economics of doing so: You need to be focused on finding someone you feel you can talk to; someone who can help you.
The problem is a huge one. In the U.S. alone it’s estimated that there are some 82 million people who have treatable health conditions. Headway was founded on the premise that most of them currently do not seek that treatment because of cost or accessibility.
A lot of therapy has traditionally been about seeing people in person — and arguably the fact that we’ve had so much reduced contact with people has contributed to mental health issues this past year — but in the event, Headway has definitely adapted to the current climate.
The company says that some 89% of its appointments at the moment are being carried out remotely. This is down from 97% at the peak of the pandemic in the U.S., and has been slowly starting to taper off, the company said. Some of the increased volume, meanwhile, is a direct result of therapists working remotely — they can fit more people in to a daily schedule as a result.
In terms of insurers, the company currently works with Aetna, Cigna, United Healthcare, Oscar and Oxford and says the list will be growing. One interesting detail is that Headway has not only built out a bigger funnel for these insurers in terms of the practitioners they work with and individuals who can subsequently use insurance to pay for therapy, but conversely has served to be a conduit for those insurance groups in bringing more patients through to those therapists, who are now a part of their networks, by way of Headway’s platform.
Headway says that using its system can help a patient get an appointment within five days, versus the the 30-day average you typically face when using an insurance directory.
It’s the kind of scale and “software eating the world” efficiency that has attracted Andreessen Horowitz to backing companies before, with the added detail of this being particularly relevant to the time we are living in.
“By getting the mental health provider community on the same page with insurance companies for the first time, Headway unlocks affordable mental healthcare for millions of Americans,” said Scott Kupor, managing partner at Andreessen Horowitz. “We’re incredibly excited to work alongside the Headway team.” Kupor is also joining Headway’s board with this round.
Cherry Miao, a former partner at Accel and Headway’s lead seed investor, is also joining as head of Finance & Data.
“I’ve been fortunate to work with some of the world’s most influential startups, and know that being part of Headway’s meaningful mission, robust business model, and incredibly talented team is a once-in-a-lifetime opportunity,” she said. “I’m thrilled to be helping rebuild America’s mental healthcare system for access and affordability.”
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Personalized nutrition startup Zoe closes out Series B at $53M total raise
Personalized nutrition startup Zoe — named not for a person but after the Greek word for ‘life’ — has topped up its Series B round with $20M, bringing the total raised to $53M.
The latest close of the B round was led by Ahren Innovation Capital, which the startup notes counts two Nobel laureates as science partners. Also participating are two former American football players, Eli Manning and Ositadimma “Osi” Umenyiora; Boston, US-based seed fund Accomplice; healthcare-focused VC firm THVC and early stage European VC, Daphni.
The U.K.- and U.S.-based startup was founded back in 2017 but operated in stealth mode for three years, while it was conducting research into the microbiome — working with scientists from Massachusetts General Hospital, Stanford Medicine, Harvard T.H. Chan School of Public Health, and King’s College London.
One of the founders, professor Tim Spector of King’s College — who is also the author of a number of popular science books focused on food — became interested in the role of food (generally) and the microbiome (in particular) on overall health after spending decades researching twins to try to understand the role of genetics (nature) vs nurture (environmental and lifestyle factors) on human health.
Zoe used data from two large-scale microbiome studies to build its first algorithm which it began commercializing last September — launching its first product into the U.S. market: A home testing kit that enables program participants to learn how their body responds to different foods and get personalized nutrition advice.
The program costs around $360 (which Zoe takes in six instalments) and requires participants to (self) administer a number of tests so that it can analyze their biology, gleaning information about their metabolic and gut health by looking at changes in blood lipids, blood sugar levels and the types of bacteria in their gut.
Zoe uses big data and machine learning to come up with predictive insights on how people will respond to different foods so that it can offer individuals guided advice on what and how to eat, with the goal of improving gut health and reducing inflammatory responses caused by diet.
The combination of biological responses it analyzes sets it apart from other personalized nutrition startups with products focused on measuring one element (such as blood sugar) — is the claim.
But, to be clear, Zoe’s first product is not a regulated medical device — and its FAQ clearly states that it does not offer medical diagnosis or treatment for specific conditions. Instead it says only that it’s “a tool that is meant for general wellness purposes only”. So — for now — users have to take it on trust that the nutrition advice it dishes up is actually helpful for them.
The field of scientific research into the microbiome is undoubtedly early — Zoe’s co-founder states that very clearly when we talk — so there’s a strong component here, as is often the case when startups seek to use data and AI to generate valuable personalized predictions, whereby early adopters are helping to further Zoe’s research by contributing their data. Potentially ahead of the sought for individual efficacy, given so much is still unknown around how what we eat affects our health.
For those willing to take a punt (and pay up), they get an individual report detailing their biological responses to specific foods that compares them to thousands of others. The startup also provides them with individualized ‘Zoe’ scores for specific foods in order to support meal planning that’s touted as healthier for them.
“Reduce your dietary inflammation and improve gut health with a 4 week plan tailored to your unique biology and life,” runs the blurb on Zoe’s website. “Built around your food scores, our app will teach you how to make smart swaps, week by week.”
The marketing also claims no food is “off limits” — implying there’s a difference between Zoe’s custom food scores and (weight-loss focused) diets that perhaps require people to cut out a food group (or groups) entirely.
“Our aim is to empower you with the information and tools you need to make the best decisions for your body,” is Zoe’s smooth claim.
The underlying premise is that each person’s biology responds differently to different foods. Or, to put it another way, while we all most likely know at least one person who stays rake-thin and (seemingly) healthy regardless of what (or even how much) they eat, if we ate the same diet we’d probably expect much less pleasing results.
“What we’re able to start scientifically putting some evidence behind is something that people have talked about for a long time,” says co-founder George Hadjigeorgiou. “It’s early [for scientific research into the microbiome] but we have shown now to the world that even twins have different gut microbiomes, we can change our gut microbiomes through diet, lifestyle and how we live — and also that there are associations around particular [gut] bacteria and foods and a way to improve them which people can actually do through our product.”
Users of Zoe’s first product need to be willing (and able) to get pretty involved with their own biology — collecting stool samples, performing finger prick tests and wearing a blood glucose monitor to feed in data so it can analyze how their body responds to different foods and offer up personalized nutrition advice.
Another component of its study of biological responses to food has involved thousands of people eating “special scientific muffins”, which it makes to standardized recipes, so it can benchmark and compare nutritional responses to a particular blend of calories, carbohydrate, fat, and protein.
While eating muffins for science sounds pretty fine, the level of intervention required to make use of Zoe’s first at-home test kit product is unlikely to appeal to those with only a casual interest in improving their nutrition.
Hadjigeorgiou readily agrees the program, as it is now, is for those with a particular problem to solve that can be linked to diet/nutrition (whether obesity, high cholesterol or a disease like type 2 diabetes, and so on). But he says Zoe’s goal is to be able to open up access to personalized nutrition advice much more widely as it keeps gathering more data and insights.
“The idea is, as always, we start with a focused set of people with problems to solve who we believe will have a life-changing experience,” he tells TechCrunch. “At this point we are not trying to create a product for everyone — and we understand that that has limitations in terms of how much we scale in the beginning. Although even still within this focused group of people I can assure you there’s tonnes of people!
“But absolutely the whole idea is that after we get a first [set of users]… then with more data and with more experience we can simplify and start making this simpler and more accessible — both in terms of its simplicity and also it’s price. So more and more people. Because at the end of the day everyone has this right to be able to optimize and understand and be in control — and we want to make that available to everyone.
“Regardless of background and regardless of socio-economic status. And, in fact, many of the people who have the biggest problems around health etc are the ones who have maybe less means and ability to do that.”
Zoe isn’t disclosing how many early users it’s onboarded so far but Hadjigeorgiou says demand is high (it’s currently operating a wait-list for new sign ups).
He also touts promising early results from interim trial with its first users — saying participants experienced more energy (90%), felt less hunger (80%) and lost an average of 11 pounds after three months of following their AI-aided, personalized nutrition plan. Albeit, without data on how many people are involved in the trials it’s not possible to quantify the value of those metrics.
The extra Series B funding will be used to accelerate the rollout of availability of the program, with a U.K. launch planned for this year — and other geographies on the cards for 2022. Spending will also go on continued recruitment in engineering and science, it says.
Zoe already grabbed some eyeballs last year, as the coronavirus pandemic hit the West, when it launched a COVID-19 symptom self-reporting app. It has used that data to help scientists and policy makers understand how the virus affects people.
The Zoe COVID-19 app has had some 5M users over the last year, per Hadjigeorgiou — who points to that (not-for-profit) effort as an example of the kind of transformative intervention the company hopes to drive in the nutrition space down the line.
“Overnight we got millions and millions of people contributing to help uncover new insights around science around COVID-19,” he says, highlighting that it’s been able to publish a number of research papers based on data contributed by app users. “For example the lack of smell and taste… was something that we first [were able to prove] scientifically, and then it became — because of that — an official symptom in the list of the government in the U.K.
“So that was a great example how through the participation of people — in a very, very fast way, which we couldn’t predict when we launched it — we managed to have a big impact.”
Returning to diet, aren’t there some pretty simple ‘rules of thumb’ that anyone can apply to eat more healthily — i.e. without the need to shell out for a bespoke nutrition plan? Basic stuff like eat your greens, avoid processed foods and cut down (or out) sugar?
“There are definitely rules of thumb,” Hadjigeorgiou agrees. “We’ll be crazy to say they’re not. I think it all comes back to the point that although there are rules of thumb and over time — and also through our research, for example — they can become better, the fact of the matter is that most people are becoming less and less healthy. And the fact of the matter is that life is messy and people do not eat even according to these rules of thumb so I think part of the challenge is… [to] educate and empower people for their messy lives and their lifestyle to actually make better choices and apply them in a way that’s sustainable and motivating so they can be healthier.
“And that’s what we’re finding with our customers. We are helping them to make these choices in an empowering way — they don’t need to count calories, they don’t need to restrict themselves through a Keto [diet] regime or something like that. We basically empower them to understand this is the impact food has on your body — real time, how your blood sugar levels change, how your bacteria change, how your blood fat levels changes. And through that empowerment through insight then we say hey, now we’ll give you this course, it’s very simple, it’s like a game — and we’ll given you all these tools to combine different foods, make foods work for you. No food is off limits — but try to eat most days a 75 score [based on the food points Zoe’s app assigns].
“In that very empowering way we see people get very excited, they see a fun game that is also impacting their gut and metabolism and they start feeling these amazing effects — in terms of less hunger, more energy, losing weight and over time as well evolving their health. That’s why they say it’s life changing as well.”
Gamifying research for the goal of a greater good? To the average person that surely sounds more appetitizing than ‘eat your greens’.
Though, as Hadjigeorgiou concedes, research in the field of microbiome — where Zoe’s commercial interests and research USP lie — is “early”. Which means that gathering more data to do more research will remain a key component of the business for the foreseeable future. And with so much still to be understood about the complex interactions between food, exercise and other lifestyle factors and human health, the mission is indeed massive.
In the meanwhile, Zoe will be taking it one suggestive nudge at a time.
“Sugar is bad, kale’s great but the whole kind of magic happens in the middle,” Hadjigeorgiou goes on. “Is oatmeal good for you? Is rice good for you? Is wholewheat pasta good for you? How do you combine wholewheat pasta and butter? How much do you have? This is where basically most of our life happens.
“Because people don’t eat ice-cream the whole day and people don’t eat kale the whole day. They eat all these other foods in the middle and that’s where the magic is — knowing how much to have, how to combine them to make it better, how to combine it with exercise to make it better? How to eat a food that doesn’t dip your sugar levels three hours after you eat it which causes hunger for you. Theses are all the things we’re able to predict and present in a simple and compelling way through a score system to people — and in turn help them [understand their] metabolic response to food.”
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Radical Ethereum entrepreneurs are redefining what ‘rape kit’ means
Their investors call them disruptive innovators. Detractors like North Carolina Attorney General Josh Stein call them “dirty scammers.” But Leda Health co-founders Madison Campbell and Liesel Vaidya think of themselves as advocates for sexual assault survivors.
Among the feminists leveraging Ethereum for subversive use cases, Leda Health’s do-it-yourself evidence-collecting kit for sexual assault survivors is among the most ambitious projects. So far, 16 members of Congress condemned Leda Health’s upcoming kits, which Michigan Attorney General Dana Nessel described as “shamelessly trying to take financial advantage of the #MeToo movement.” Leda Health’s DIY kit was nearly banned in New Hampshire and Utah before it even launched. But that hasn’t deterred Campbell and Vaidya.
Campbell is a survivor herself, so she knows the reasons people don’t immediately go to police after an assault. In her case, by the time she’d grappled with the trauma and was ready to come forward, it would have just been her word against his.
“There are also rape kits in every state that have been lost,” Campbell said. “The sheer amount of sexual assault survivors that reach out to me and tell me this product could change their lives, that’s what keeps me going.”
As such, Campbell said her startup plans to launch these kits in fall 2021, partnering with several universities for a beta rollout. Support services, to complement the take-home kits, include therapy and transformative justice groups run by licensed facilitators.
“We plan on being a business-to-business company, for universities and corporations and the military, partners like that,” Campbell said. “Our goal is for institutions to eventually pay for products and services to help these students. We know it will be difficult, that we’ll need a lot of case studies showing whether this helps… including healing work with people who committed harm about accountability and boundaries, to end that cycle of harm.”
Starting by offering institutions free therapy services and resources should seem like a no-brainer. Yet critics argue these kits give survivors false hope, because they are less effective in court than rape kits managed by law enforcement and related clinics. On the other hand, every year tens of thousands of rape kits aren’t tested by police.
Vaidya said Leda Health’s Ethereum-powered mobile app gives survivors the choice to document their own accounts, using blockchain technology for time-stamping evidence collected in the kit, which puts power back in survivors’ hands.
“We’re not in the business of proving consent. We’re just in the business of providing resources,” Vaidya said.
According to Chief Deputy District Attorney John Henry, in California’s Riverside County, this commercial product will be the first of its kind. He said it’s too soon to tell whether this could help survivors who are, for whatever reason, reluctant to immediately turn to law enforcement. Timing is also a factor. If the survivor is unable to get to a clinic promptly after the assault, there won’t be any biological evidence left to collect.
Love them or hate them, there’s no denying these blockchain-savvy entrepreneurs are challenging the status quo in a space where women are horrifically underserved.
“Nurses and police have some degree of experience and training on what to ask, where to follow up, what information is important. That is information the general public doesn’t have. As a prosecutor, I’d rather have those statements, and the additional investigation that goes on, done by law enforcement and medical personnel,” Henry said. “If a kit is collected in a way that is inconsistent with regulations and best practices, it’s not inadmissible. But that is something the jury would need to take into account… I can see the benefit of some type of evidence, as opposed to none. I can’t give a definitive opinion yet about whether it [Leda Health] is a good idea or a bad idea.”
A rape kit alone, of any variety, cannot result in a conviction or expulsion. It is merely a tool used as part of a broader investigation. Even so, the idea of survivors managing their own data has sparked vehement backlash.
“Back in 2019, our office was broken into,” Vaidya said. “We’ve also documented potential investors engaging with social media posts calling for us to be jailed.”
Campbell added they are now both subjected to routine online harassment.
“We also take Ubers home from meetings or offices ever since 2019, because our lawyers told us not to take the subway. We might be followed,” Campbell said.
The way this controversial kit works is a nondescript box comes with plastic bags, swabs and instructions all labeled with QR codes. Users download Leda Health’s app and are prompted to type in information while they save evidence of the assault, such as ripped panties, in separate Ziploc bags.
“The blockchain creates a sense of accountability, because these records can’t be changed,” Vaidya said. “There’s only myself and perhaps one more person in the company that has access to the data and it’s encrypted…there are access locks regarding when and how and we might access that data if compelled to by a legal authority.”
Leda Health outsources most of the tricky Ethereum software support to the blockchain startup Deqode. Deqode engineer Shivam Bohare said Leda Health’s system relies on Ethereum infrastructure services from Blocknative, a company that attracted investment from Coinbase Ventures, and Infura, a startup partially owned by Ethereum co-founder Joe Lubin. The encrypted data and profile are attached to a specific user account, not any self-custodied token, so the blockchain aspects of this app all occur under the hood. Users don’t need to know anything about Ethereum.
“Access to the user data is guarded using strict authorization,” Bohare said. “Even the users don’t have access to their own data (without proper authorization from Leda Health administration) once it’s been uploaded to the cloud.”
Unlike a kit administered by police, survivors can physically hold the kit until they turn it over to lawyers or authorities, rather than hoping their case isn’t one of the thousands that gets lost in the system. Plus, the DIY kit, combined with the records stored through the app, can be used for mediation outside of court, like group therapy sessions.
“People tend to forget that self-collected evidence is extremely common in the U.S. court system and analyzed for admissibility and other issues on a regular basis,” said attorney Jiadai Lin, who provides outside counsel to Leda Health.
Indeed, rape kits donated by another private manufacturer were reportedly used in April 2020 in Monterey County, California, under a temporary process developed for the pandemic.
“I believe survivors should have the right to gather information about their own bodies on their own terms, and entrepreneurs should have the right to try their hand at innovation,” Lin said. “In my view, legislative efforts to ban the product have been excessively restrictive. And that makes me feel even more strongly about standing behind Leda Health.”
Critics cast the startup’s entrepreneurial approach as greedy opportunism. Leda Health investors like Romeen Sheth, a Harvard law school alum and former co-president of the Harvard Association for Law and Business, invested in the startup so far because he believes the for-profit strategy can complement nonprofit organizations already working in this space. So far, Leda Health has raised roughly $2 million.
“Disruptive innovation in any industry is never comfortable; it never starts out as something that the incumbents are pleased with,” Sheth said. “I’m bullish on products and services that keep users as the top priority… I’m interested in investing in forward progress, not in maintaining the status quo. Leda Health defines that ethos and I’m hopeful their efforts make sexual trauma and sexual harassment less embarrassing, painful and traumatic.”
Now, as Campbell and Vaidya finish work on the prototype, Leda Health already started offering support groups for sexual assault survivors, led by licensed therapists.
“We have two groups going right now and another five starting in May,” Vaidya said.
Love them or hate them, there’s no denying these blockchain-savvy entrepreneurs are challenging the status quo in a space where women, in particular, are horrifically underserved by current resources.
“For sexual assault victims, the cost of the status quo, which includes under-reporting, a massive kit processing backlog and general lack of support services, is very high. Leda is demonstrating there are innovative low-risk solutions available,” said investor Duriya Farooqui. “Second, among the reasons an assault victim may not immediately report is because the procedure for collecting evidence via a rape kit can feel invasive and in itself can add to trauma. Leda wants to provide options.”
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HoneyBook raises $155M at $1B+ valuation to help SMBs, freelancers manage their businesses
HoneyBook, which has built out a client experience and financial management platform for service-based small businesses and freelancers, announced today that it has raised $155 million in a Series D round led by Durable Capital Partners LP.
Tiger Global Management, Battery Ventures, Zeev Ventures, 01 Advisors as well as existing backers Norwest Venture Partners and Citi Ventures also participated in the financing, which brings the San Francisco-based company’s valuation to over $1 billion. With the latest round, HoneyBook has now raised $248 million since its 2013 inception. The Series D is a big jump from the $28 million that HoneyBook raised in March 2019.
When the COVID-19 pandemic hit last year, HoneyBook’s leadership team was concerned about the potential impact on their business and braced themselves for a drop in revenue.
Rather than lay off people, they instead asked everyone to take a pay cut, and that included the executive team, who cut theirs “by double” the rest of the staff.
“I remember it was terrifying. We knew that our customers’ businesses were going to be impacted dramatically, and would impact ours at the same time dramatically,” recalls CEO Oz Alon. “We had to make some hard decisions.”
But the resilience of HoneyBook’s customer base surprised even the company, who ended up reinstating those salaries just a few months later. And, as corporate layoffs driven by the COVID-19 pandemic led to more people deciding to start their own businesses, HoneyBook saw a big surge in demand.
“Our members who saw a hit in demand went out and found demand in another thing,” Oz said. As a result, HoneyBook ended up doubling its number of members on its SaaS platform and tripling its annual recurring revenue (ARR) over the past 12 months. Members booked more than $1 billion in business on the platform in the past nine months alone.
HoneyBook combines on its platform tools like billing, contracts and client communication, with the goal of helping business owners stay organized. Since its inception, service providers across the U.S. and Canada such as graphic designers, event planners, digital marketers and photographers have booked more than $3 billion in business on its platform. And as the pandemic had more people shift to doing more things online, HoneyBook prepared to help its members adapt by being armed with digital tools.
Image Credits: HoneyBook
“Clients now expect streamlined communication, seamless payments, and the same level of exceptional service online that they were used to receiving from business owners in person,” Alon said.
Oz co-founded HoneyBook with wife Naama and longtime friend Dror Shimoni. Oz and Naama were both small business owners themselves at one time, so they had firsthand insight on the pain points of running a service-based business.
HoneyBook’s software not only helps SMBs do more business, but helps them “convert potentials to actual clients,” Oz said.
“We help them communicate with potential clients so they can win their business, and then help them manage the relationship so they can keep them,” Naama said.
The company plans to use its new capital toward continued product development and to “dramatically” boost its 103-person headcount across its New York and Tel Aviv offices.
“We’re seeing so much demand for additional services and products, so we definitely want to invest and create better ways for our members to present themselves online,” Alon told TechCrunch. “We’re also seeing demand for financial products and the ability to access capital faster. So that’s just a few of the things we plan to invest in.”
The company also wants to make its platform “more customizable” for different categories and verticals.
Chelsea Stoner, general partner at Battery Ventures, said her firm recognized that the expansive market of productivity tools to serve small businesses and entrepreneurs was “a market of discrete and separate productivity tools.”
HoneyBook, she said, is a true platform for SMBs, “providing a huge array of functionality in one cohesive UX.”
“It unites and connects every task for the solopreneurs, from creating and distributing marketing collateral, to organizing and executing proposals, to sending invoices and collecting payments,” Stoner said. “The company is constantly innovating and iterating in response to its members; we also see a lot of opportunity with payments going forward…And, due to COVID-19 and other factors, the company is sitting on pent-up demand that will accelerate growth even more.”
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