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Indian online teaching platform Teachmint raises $16.5 million
An Indian startup that began its life after the global pandemic broke last year said on Tuesday it has concluded its third financing round as it enables hundreds of thousands of teachers in the world’s second-largest internet market to run classes online and serve their students.
Bangalore-based Teachmint said today it has raised $16.5 million in its Series A financing round. The round was led by Learn Capital, the San Francisco Bay Area-headquartered venture capital firm that focuses on edtech firms and has backed some of the world’s most promising online learning startups, including Coursera, Udemy, Nerdy, Minerva and Brainly.
CM Ventures, and existing investors Better Capital, which first invested in Teachmint before the startup had even registered itself, and Lightspeed India Partners also participated in the new round, which brings the Indian startup’s to-date raise to $20 million.
Teachmint helps teachers conduct classes online through an app on their Android smartphone, iPhone or the web. The startup has built an all-in-one product that allows teachers to kickstart a live class, do doubt-clearing sessions, take attendance, conduct webinars, collect fees, find new students, offer support via phone calls and take tests, among other tasks.
“When the pandemic broke, teachers were struggling with several tools including Google Meet, Zoom and even YouTube/Facebook Live to teach online. They were using additional tools like Google Forms for tests and WhatsApp for communication. It was a difficult and disconnected experience for most teachers as none of these tools were productised for teaching. That’s when we decided to build a mobile-first video-first solution specifically for teaching,” said Mihir Gupta, co-founder and chief executive of Teachmint, in an interview with TechCrunch.
The product, available in 10 local languages, is highly localised for India-specific needs, said Gupta.
More than 700,000 teachers from over 1,500 cities and towns have signed up on the platform in less than 10 months since the launch of Teachmint’s product, said Gupta.
“From the Learn Capital team’s first meeting with Teachmint’s co-founders several months ago, it was clear that their collective team had meticulously architected an end-to-end, multi-modal, and best-in-class solution enabling teachers in India to instantly and seamlessly digitize their classrooms,” said Vinit Sukhija, partner at Learn Capital, in a statement.
“Now with over 700,000 teachers, Teachmint has become India’s leading online teaching platform,” he said, adding that Learn Capital believes that Teachmint can eventually expand its offering outside of India.
Gupta said Teachmint is currently not monetizing its product, and doesn’t intend to do so in the immediate future as it is currently prioritizing reaching more teachers in India and also expand its offerings.
He said most teachers have learnt about Teachmint through friends as it has limited investment in marketing. Teachmint is open to exploring any strategic acquisition opportunities with smaller startups, he said.
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Persona lands $50M for identity verification after seeing 10x YoY revenue growth
The identity verification space has been heating up for a while and the COVID-19 pandemic has only accelerated demand with more people transacting online.
Persona, a startup focused on creating a personalized identity verification experience “for any use case,” aims to differentiate itself in an increasingly crowded space. And investors are banking on the San Francisco-based company’s ability to help businesses customize the identity verification process — and beyond — via its no-code platform in the form of a $50 million Series B funding round.
Index Ventures led the financing, which also included participation from existing backer Coatue Management. In late January 2020, Persona raised $17.5 million in a Series A round. The company declined to reveal at which valuation this latest round was raised.
Businesses and organizations can access Persona’s platform by way of an API, which lets them use a variety of documents, from government-issued IDs through to biometrics, to verify that customers are who they say they are. The company wants to make it easier for organizations to implement more watertight methods based on third-party documentation, real-time evaluation such as live selfie checks and AI to verify users.
Persona’s platform also collects passive signals such as a user’s device, location, and behavioral signals to provide a more holistic view of a user’s risk profile. It offers a low code and no code option depending on the needs of the customer.
The company’s momentum is reflected in its growth numbers. The startup’s revenue has surged by “more than 10 times” while its customer base has climbed by five times over the past year, according to co-founder and CEO Rick Song, who did not provide hard revenue numbers. Meanwhile, Persona’s headcount has more than tripled to just over 50 people.
“When we look back at the space five to 10 years ago, AI was the next differentiation and every identity verification company is doing AI and machine learning,” Song told TechCrunch. “We believe the next big differentiator is more about tailoring and personalizing the experience for individuals.”
As such, Song believes that growth can be directly tied to Persona’s ability to help companies with “unique” use cases with a SaaS platform that requires little to no code and not as much heavy lifting from their engineering teams. Its end goal, ultimately, is to help businesses deter fraud, stay compliant and build trust and safety while making it easier for them to customize the verification process to their needs. Customers span a variety of industries, and include Square, Robinhood, Sonder, Brex, Udemy, Gusto, BlockFi and AngelList, among others.
“The strategy your business needs for identity verification and management is going to be completely different if you’re a travel company verifying guests versus a delivery service onboarding new couriers versus a crypto company granting access to user funds,” Song added. “Even businesses within the same industry should tailor the identity verification experience to each customer if they want to stand out.”
Image Credits: Persona
For Song, another thing that helps Persona stand out is its ability to help customers beyond the sign-on and verification process.
“We’ve built an identity infrastructure because we don’t just help businesses at a single point in time, but rather throughout the entire lifecycle of a relationship,” he told TechCrunch.
In fact, much of the company’s growth last year came in the form of existing customers finding new use cases within the platform in addition to new customers signing on, Song said.
“We’ve been watching existing customers discover more ways to use Persona. For example, we were working with some of our customer base on a single use case and now we might be working with them on 10 different problems — anywhere from account opening to a bad actor investigation to account recovery and anything in between,” he added. “So that has probably been the biggest driver of our growth.”
Index Ventures Partner Mark Goldberg, who is taking a seat on Persona’s board as part of the financing, said he was impressed by the number of companies in Index’s own portfolio that raved about Persona.
“We’ve had our antennas up for a long time in this space,” he told TechCrunch. “We started to see really rapid adoption of Persona within the Index portfolio and there was the sense of a very powerful and very user friendly tool, which hadn’t really existed in the category before.”
Its personalization capabilities and building block-based approach too, Goldberg said, makes it appealing to a broader pool of users.
“The reality is there’s so many ways to verify a user is who they say they are or not on the internet, and if you give people the flexibility to design the right path to get to a yes or no, you can just get to a much better outcome,” he said. “That was one of the things we heard — that the use cases were not like off the rack, and I think that has really resonated in a time where people want and expect the ability to customize.”
Persona plans to use its new capital to grow its team another twofold by year’s end to support its growth and continue scaling the business.
In recent months, other companies in the space that have raised big rounds include Socure and Sift.
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Acronis raises $250M at a $2.5B+ valuation to double down on cyber protection services
As cybersecurity continues to grow in profile amid an increasingly complex and dangerous landscape of malicious activity, a cybersecurity vendor that specializes in “all-in-one” services covering the many aspects of security IT has closed a big round of funding.
Acronis has raised $250 million in equity, and co-founder and CEO Serguei Beloussov said in an interview the company plans to use the financing both to grow organically, as well as for acquisitions to bring more “proactive” technology into its portfolio. The funding is being led by CVC and values Acronis at over $2.5 billion.
Originally a spinoff from the parent company of virtualization giant Parallels, Acronis initially made its name in data recovery and backup, but has, over time, and to better differentiate itself from competitors like Commvault, Veeam and Barracuda (among others), expanded to provide an all-in-one package of services to include continuous data protection, patch management, anti-malware protection and more.
Integrating with a range of popular enterprise software packages and platforms and service providers, its business is now profitable, with some 10,000 managed service providers and 500,000 businesses (SMBs and bigger) among its customers.
“We didn’t need the money, but now we will invest it to grow faster and capitalise on our leadership,” Beloussov said in an interview.
New-wave revenues, based on its newer (not legacy) products such as Acronis Cyber Protect, grew 100% during the pandemic, he added. “We are spending the money on engineers and M&A to complement our cyber protection,” he said. “We have a single mission, which is to protect all data applications, providing privacy and security in one package. We protect about 10 million workloads today and we are aiming to grow that to 100x. There is a lot to do in terms of making that protection easier and deeper for our customers.”
He said that while the company is continuing to remain private, it’s also starting to think about its next steps, which could involve a public listing or a sale, in the next 12-24 months.
“With private equity investors like Goldman Sachs [which led its previous round in 2019] and CVC, they definitely expect liquidity at some point,” Beloussov said.
The funding and Acronis’s strategy to double down on growing its business comes at a key moment in the world of cybersecurity. The bigger landscape in the world of business has seen a huge shift in the last year to more people working remotely and across a wider set of geographies and devices. Although that shift was pushed along by the COVID-19 pandemic, many believe that the longer-term effect will be a very different working environment, with a greater acceptance that fewer people will be spending all of their time in their offices, and that it won’t necessarily impact productivity.
What it has impacted is how IT provisions and manages networks and the device that run on them, and specifically has exposed some of the loopholes in company’s cybersecurity policies. Malicious hackers, who were hard at work well before the pandemic, have jumped on this and exploited it.
Acronis has been one of the companies that has seen a growing demand for its services as a result of all that, with Acronis’s software sold via managed service providers seeing a particular lift.
“Last year definitely pushed customers to understand that IT is mission critical and that is for every business,” Beloussov said, with security coming along with that by association. With security, though, organizations have realized that “managing by in-house resources is not always ideal so outsourcing to special service providers can guarantee service levels. With internal IT people, you can only shout at them, and that is okay because they are used to it.” Third parties, by contrast, operate with service-level agreements that are easier to enforce if something goes wrong.
“Acronis’ talented management and R&D teams have invested significant resources developing an innovative cloud-native ‘MSP in a box’ solution, with integrated backup, disaster recovery, cybersecurity, remote management, and workflow tools,” said Leif Lindbäck, senior managing director of CVC Capital Partners. “Acronis provides mission-critical solutions to more than 10,000 MSPs and half a million small and medium businesses. CVC has a strong track record in cybersecurity and partnering up with successful entrepreneurs, and we are looking forward to teaming up with Serguei Beloussov and the Acronis team to accelerate the company’s growth.”
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alt.bank, Brazil’s latest fintech targeting the unbanked, raises $5.5M
It looks like everyone and their mother is trying to reinvent the Brazilian banking system. Earlier this year we wrote about Nubank’s $400 million Series G, last month there was the PicPay IPO filing and today, alt.bank, a Brazilian neobank, announced a $5.5 million Series A led by Union Square Ventures (USV).
It’s no secret that the Brazilian banking system has been poised for disruption, considering the sector’s little attention to customer service and exorbitant fee structure that’s left most Brazilians unbanked, and alt.bank is just the latest company trying to take home a piece of the pie.
Following Nubank’s strategy of launching a bank with colors that are very un-bank-like, signaling that they do things differently, alt.bank similarly launched its first financial product in 2019 — a fluorescent-yellow debit card which the locals have endearingly dubbed, “o amarelinho,” meaning, “the little yellow card.”
The company, founded by serial entrepreneur Brad Liebmann, follows the founder’s $480 million exit of Simply Business, which was acquired by U.S. insurance giant Travelers in 2017.
Unlike many fintechs, alt.bank has a strong social mission and pays commissions for referrals that last for the customer’s lifetime.
“Most fintechs just help wealthy people get wealthier, so I thought let’s do something with a social mission,” Liebmann told TechCrunch in an interview.
To drive home the mission, and really target the unbanked, Liebman and his team of 80 employees have designed an app that can be used by the illiterate. Instead of words, users can follow color-coded prompts to complete a transaction. The company also plans to launch credit products soon.
According to the company, close to a million people have downloaded the android app since launch, but Liebman declined to disclose how many active users the company actually has.
Today, the company’s core offerings include the debit card, a prepaid credit card, Pix (similar to Zelle), a savings account and even telemedicine visits via a partnership with Dr. Consulta, a network of healthcare clinics throughout the country. The prepaid credit card is key because online stores in Brazil don’t accept debit card purchases.
In addition to the perk of ongoing commissions, alt.bank has also partnered with three major drugstores, allowing their users to get 5-30% off any item at the stores, including medication.
While the company is based in São Paulo and São Carlos, Liebmann and his family are currently based in London due to regulations around the pandemic.
The investment in alt.bank marks USV’s first investment in South America, solidifying a trend by other major U.S. investors such as Sequoia who only in the last several years have started looking to LatAm for deals.
“The bar was high for our first investment in South America,” said Union Square Ventures partner John Buttrick. “The combination of the alt.bank business model and world-class management team enticed us to expand our geographic focus to help build the leading digital bank targeting the 100 million Brazilians who are currently being neglected by traditional lenders,” he added in a statement.
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Riot Games and Konvoy Ventures back games publisher Carry1st in $6M Series A
Africa is the last frontier for basically anything. Mobile gaming is no exception. For a continent that is home to more than 1 billion millennials and Gen Zers, mobile gaming has never really picked up, despite the continent witnessing rapid economic growth and smartphone adoption.
Two issues have proved detrimental to this growth: distribution and payments. With fragmented and unresolved distribution and digital payments ecosystems, game studios have found it difficult to serve African consumers and make a ton of money doing so. Carry1st is a mobile games publishing platform fixing this problem, and today it is announcing the close of its $6 million Series A round.
This month last year, we reported that the company had just raised a $2.5 million seed investment. CRE Ventures led that round, but this time, the company, which has offices in Cape Town and New York, brought in a blue-chip group of investors spanning gaming, media and fintech.
U.S. VC firm Konvoy Ventures led the Series A round. The firm is known for its investment in the video gaming industry’s infrastructure, technology, tools and platforms. Riot Games (developer of League of Legends), Tokyo’s Akatsuki Entertainment Technology Fund (the company behind Dragon Ball Z), Raine Ventures and fintech VC TTV Capital participated.
Carry1st was founded by Cordel Robbin-Coker, Lucy Hoffman and Tinotenda Mundangepfupfu in 2018. The company started as a game studio, developing and launching its own mobile games. But a projection on what it could be in the long run made the company switch tactics.
Instead of the studio model (quite popular among gaming companies in Africa), Carry1st sought to become a regional publisher, thereby opening the continent to international studios. Also, the company helps local studios that find it difficult to create games with a global appeal by pairing them with strong operators.
“We learned that African users don’t need their own games; they want to play the best games in the world,” CEO Robbin-Coker told TechCrunch.
COO Hoffman said that the company provides a full-stack publishing platform for its partners. It also handles localization, distribution, user acquisition, monetization, customer experience for studios and licenses their games on exclusive, long-term contracts.
“We fund user acquisition so that the games are played by as many users as possible, and then send our partners a royalty in return for the ability to leverage their IP,” Hoffman said.
L-R: Cordel Robbin-Coker (CEO), Lucy Hoffman (COO) and Tinotenda Mundangepfupfu (CTO). Image Credits: Carry1st
This is somewhat akin to how Tencent-backed Sea Limited (parent company of Garena) took off. The company was the publisher of League of Legends across Southeast Asia but launched its own game, Free Fire. Now, the company has built out the largest consumer payments and e-commerce platform in the region, which is now worth over $130 billion. Carry1st aspires to do the same for Africa.
Although there aren’t many details about its e-commerce activity, Carry1st is tackling payments and difficult monetization issues by partnering with some fintechs like Paystack, Safaricom and Cellulant. These partnerships have been pivotal to developing its in-house payments platform Pay1st, which allows customers to pay in their preferred way. “For global studios, this is the difference between making money and not,” Robbin-Coker added.
Demand for Carry1st has grown rapidly. Since its seed round last year, the company has signed seven games with well-known mobile gaming studios. They include Sweden’s Raketspel (the company has more than 120 million downloads across its portfolio), Cosi Games and Ethiopia’s Qene Games.
All these signups happened in 2020 and the catalyst for this growth has pandemic-induced lockdowns written all over it. The African mobile gaming market has always pointed toward a strong growth market, but being forced indoors surely skyrocketed mobile usage and gaming.
People who might not have previously needed a mobile phone have now come to rely on them to keep in touch with family and friends. For the average user using a smartphone for the first time, there’s a natural tendency to explore the fun things available on their device.
“Typically, the first things people do when they get their first smartphone is to chat with friends and play games. This is the same all over the world — Africa is no different. For that reason, we are seeing more and more mobile gamers across Africa,” remarked Robbin-Coker.
The company has also grown its team from 18 to 26 across 11 countries with recruits from Carlyle, King, Jumia, Rovio, Socialpoint, Ubisoft and Wargaming — a testament to the company’s global ambitions to be a top gaming publisher.
Expanding the team, which cuts across product, engineering and growth departments, is one way Carry1st will put the new investment to use. The company also plans to secure new partnerships with global gaming studios while launching and scaling its existing games like Carry1st Trivia and All-Star Soccer.
User playing a Carry1st game. Image Credits: Carry1st
With this investment, Carry1st has raised a total of $9.5 million. On the caliber of investors brought on, Robbin-Coker said their investment in the company would put them in a place to “delight millions of users across Africa and the globe.”
Carry1st is Konvoy Ventures first foray into the African gaming market (same can be said for Riot Games), and representatives from both teams (Konvoy managing partner Jackson Vaughan and Riot Games head of corporate development Brendan Mulligan) believe the company is unequivocally solving the continent’s distribution and gaming experience problems. Vaughan will also join the company’s board.
Africa’s gaming industry has lacked innovation in times past. While we’ve seen companies try to change the narrative, most have operated as studios. Carry1st is one of the few companies to operate a hybrid model, but the endgame for the company really is to be one of the region’s dominant consumer internet companies.
“We think social games and payments is the best first step to doing so, but we have very large ambitions. If we execute this, we will catalyze massive growth in the digital ecosystem across the region, creating tons of high-quality jobs in the process. We think all of the ingredients are in place — we want to be the catalyst,” Hoffman said.
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How one founder made the most of Y Combinator in a pandemic year
This week, we welcome guest Hana Mohan to our podcast Found. Hana is the co-founder and CEO of MagicBell, a new startup she created with Josue Montano that recently graduated from Y Combinator’s Winter 2021 cohort. MagicBell is a full-featured plug-and-play notifications inbox aimed at developers who want to build one into their own product, but don’t want to have to build one from scratch.
Hana’s experience as an entrepreneur spans multiple companies, including her last one, which she grew to significant success in terms of annual revenue. She’s also a proud transgender woman, who underwent her transition mid-way through her existing history as a founder and entrepreneur. Hana talks to us about the challenges she faced taking on her transition in an industry where the focus is often exclusively on how hard you’re hustling and what you’re building next, and about her origin story as a founder coming from an environment where there weren’t necessarily many examples with similar life experience to look to for inspiration.
During our chat, Hana also shared lots of insight into YC, and what it provides founders, as well as perspective on what it was like going through the program during a global pandemic in a remote context. Finally, she offers some great context on finding your first investors and customers as a distributed team.
We loved talking to Hana, and we hope you love the episode. You can subscribe to Found in Apple Podcasts, on Spotify, on Google Podcasts or in your podcast app of choice. Definitely leave us a review and let us know what you think, or send us direct feedback either on Twitter or via email. Come back next week for yet another great conversation with a founder all about their own one-of-a-kind startup journey.
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Ford, BMW lead Solid Power’s $130M Series B round
A Solid Power manufacturing engineer holds two 20 ampere hour (Ah) all solid state battery cells for the BMW Group and Ford Motor Company. The 20 ampere hour (Ah) all solid state battery cells were produced on Solid Power’s Colorado-based pilot production line. Source: Solid Power.
Solid state battery systems have long been considered the next breakthrough in battery technology, with multiple startups vying to be the first to commercialization. Automakers have been some of the top investors in the technology, each of them seeking the edge that will make their electric vehicles safer, faster and with increased range.
Ford Motor Company and BMW Group have put their money on battery technology company Solid Power.
The Louisville, Colorado-based SSB developer said Monday its latest $130 million Series B funding round was led by Ford and BMW, the latest signal that the two OEMs see SSBs powering the future of transportation. Under the investment, Ford and BMW are equal equity owners, and company representatives will join Solid Power’s board.
Solid Power received additional investment in the round from Volta Energy Technologies, the venture capital firm spun out of the U.S. Department of Energy’s Argonne National Laboratory.
Solid state batteries are so named because they lack a liquid electrolyte, as Mark Harris explained in an Extra Crunch article earlier this year. Liquid electrolyte solutions are usually flammable and at risk of overheating, so SSBs are considered to be generally safer. The real value of SSBs versus their lithium-ion counterparts is the energy density. Solid Power says its batteries can provide as much as a 50% to 100% increase in energy density compared to rechargeable batteries. Theoretically, electric vehicles with more energy-dense batteries can travel longer distances on a single charge.
This latest round of investment will help Solid Power boost its manufacturing to produce battery cells with the company’s highest ampere hour (Ah) output yet. Under separate joint development agreements with Ford and BMW, it will deliver to the OEMs 100 Ah cells for testing and vehicle integration from 2022.
Until this point, the company has been manufacturing cells with 2 Ah and 20 Ah output. “Hundreds” of 2 Ah battery cells were validated by Ford and BMW late last year, Solid Power said in a statement. Meanwhile, it is currently producing 20 Ah solid state batteries on a pilot basis with standard lithium-ion equipment.
As opposed to the 20 Ah pilot-scale cells — which are composed of 22-layers at 9×20 cm — these 100 Ah cells will have a larger footprint and even more layers, Solid Power spokesman Will McKenna told TechCrunch. (“Layers” refers to the number of double-sided cathodes, McKenna explained — so the 20 Ah cell has 22 cathodes and 22 anodes, with an all-solid electrolyte separator in between each, all in a single cell.)
Unlike Solid Power’s manufacturing, traditional lithium-ion batteries must undergo electrolyte filling and cycling in their production processes. Solid Power says these additional steps account for 5% and 30% of capital expenditure in a typical GWh-scale lithium-ion facility.
This isn’t the first time Solid Power has landed investments from the automakers. The company’s $20 million Series A in 2018 attracted capital from BMW and Ford, as well as Samsung, Hyundai, Volta and others. It’s part of a new wave of companies that have attracted the attention of OEMs. Other notable examples include Volkswagen-backed QuantumScape and General Motors, which has put its money on SES.
Ford is also independently researching advanced battery technologies and is planning to open a $185 million R&D battery lab, the company said last week.
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Sony announces investment and partnership with Discord to bring the chat app to PlayStation
Sony and Discord have announced a partnership that will integrate the latter’s popular gaming-focused chat app with PlayStation’s own built-in social tools. It’s a big move and a fairly surprising one given how recently acquisition talks were in the air — Sony appears to have offered a better deal than Microsoft, taking an undisclosed minority stake in the company ahead of a rumored IPO.
The exact nature of the partnership is not expressed in the brief announcement post. The closest we come to hearing what will actually happen is that the two companies plan to “bring the Discord and PlayStation experiences closer together on console and mobile starting early next year,” which at least is easy enough to imagine.
Discord has partnered with console platforms before, though its deal with Microsoft was not a particularly deep integration. This is almost certainly more than a “friends can see what you’re playing on PS5” and more of a “this is an alternative chat infrastructure for anyone on a Sony system.” Chances are it’ll be a deep, system-wide but clearly Discord-branded option — such as “Start a voice chat with Discord” option when you invite a friend to your game or join theirs.
The timeline of early 2022 also suggests that this is a major product change, probably coinciding with a big platform update on Sony’s long-term PS5 roadmap.
While the new PlayStation is better than the old one when it comes to voice chat, the old one wasn’t great to begin with, and Discord is not just easier to use but something millions of gamers already do use daily. And these days, if a game isn’t an exclusive, being robustly cross-platform is the next best option — so PS5 players being able to seamlessly join and chat with PC players will reduce a pain point there.
Of course Microsoft has its own advantages, running both the Xbox and Windows ecosystems, but it has repeatedly fumbled this opportunity and the acquisition of Discord might have been the missing piece that tied it all together. That bird has flown, of course, and while Microsoft’s acquisition talks reportedly valued Discord at some $10 billion, it seems the growing chat app decided it would rather fly free with an IPO and attempt to become the dominant voice platform everywhere rather than become a prized pet.
Sony has done its part, financially speaking, by taking part in Discord’s recent $100 million H round. The amount they contributed is unknown, but perforce it can’t be more than a small minority stake, given how much the company has taken on and its total valuation.
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As companies prioritize diversity, startups are trying to productize diverse hiring
When the iconic American power tools company Stanley Black & Decker began looking for ways to improve the pipeline of diverse candidates that the company was reviewing for potential roles, it turned to an Israeli-based startup called Talenya for help.
The company wasn’t alone in looking to startups for support in new hiring initiatives. Last year’s social reckoning that occurred in the wake of nationwide protests against systemic racism triggered by the murder of George Floyd pushed companies around the country to reassess their own role in perpetuating inequality.
As part of that assessment, companies came to the realization that the hiring tools they’d been using to simplify the process of recruiting, cultivating and promoting talent weren’t capturing the broadest and most capable applicants.
“If we want to claim that it’s a pipeline issue, we would first have to claim that we’ve hired what is available in the pipeline,” Uber Chief Diversity Officer Bo Young Lee told TechCrunch. “It’s not a pipeline issue as much as it is a recruiting process challenge.”
That’s where tools like Talenya, Textio, TalVista, WayUp, Handshake, The Mom Project, Flockjay, Kanarys, JumpStart and SeekOut have come in. All told, these companies have raised more than $200 million in financing over the past few years to increase diversity and inclusion and help solve tech’s diversity problem.
“Part of our diversity, inclusion and belonging strategy focuses on having a diverse pipeline to ensure incoming talent better reflects the markets and communities we serve. To accelerate our progress, we started using Talenya’s AI software in 2020 to help increase the candidate pool of women and people of color,” said Suzan Morno-Wade, EVP and chief human resources officer at Xerox, another company using Talenya’s software, in a statement.
It seems that women and people of color use fewer keywords and are less effusive when they describe themselves in profiles or on job applications, according to a recent study published by Talenya.
That’s why startups like Talenya and Textio try to highlight how to improve the screening process for candidates by using broader language in both the text of the job description (Textio) and in the filters used to select qualified candidates (Talenya).
“Keyword search is highly discriminatory to everyone,” said Talenya chief executive and co-founder Gal Almog. “Minorities and women tend to put 20% to 30% less skills on their profiles. That applies not only to women and to minorities. We added an algorithm that can predict and add missing skills.”
In some ways, that functionality seems a lot like tools on offer from companies like SeekOut, the recruiting startup that just landed a whopping $65 million round from investors including Tiger Global, Madrona Group and Mayfield.
“The focus on diversity hiring and our unique approach to finding the talent and offering blind hiring features has super charged the adoption,” chief executive Anoop Gupta said in an interview earlier this year. That same toolkit is something that Talenya pitches its own customers.
Meanwhile, businesses like WayUp are attempting to give employers a window into how the funnel narrows after the screening process. The company’s new tool provides an assessment for how diverse applicant pools are slowly winnowed down to a group of candidates that is far less diverse through the testing process.
WayUp co-founder and chief executive Liz Wessel said that the pool of applicants often narrows significantly after a battery of technical assessment and programming tests.
“Similar to the SATs, many technical assessments have high correlation to socioeconomics status,” Wessel told TechCrunch.
While some startups focus on the hiring process itself, other companies are taking approaches to diversify-specific jobs or to try to recruit from particular talent pools to help increase diversity in the tech industry.
That’s the mission that companies like Flockjay and The Mom Project have set for themselves.
“Most people don’t even know that a job in tech sales is even a possibility,” Shaan Hathiramani, the founder and chief executive of Flockjay, a company offering a tech sales training curriculum to the masses, said earlier this year.
Hathiramani said his startup could be an on-ramp to the tech industry for legions of workers who have the skill sets to work in tech, but lack the network to see themselves in the business. Just like coding bootcamps have enabled thousands to get jobs as programmers in the tech business, Flockjay helps talented people who had never considered a job in tech get into the industry.
It’s a way for non-coders to leverage soft-skills they’d developed in other industries, including retail and food services, to jump into the higher paid world of tech companies. And it’s a way for those tech companies to find a more diverse pool of workers who can bring different skill sets and perspectives to the table.
A few hundred students have gone through the program so far, Hathiramani said, and the goal is to train 1,000 people over the course of 2021. The average income of a student before they go through Flockjay’s training program is $30,000 to $35,000 typically, Hathiramani said.
Upon graduation, those students can expect to make between $75,000 and $85,000, he said.
It’s obvious that tech needs to “do better” on inclusion, and The Mom Project — a Chicago startup that focuses on connecting women, including parents, with jobs from organizations specifically open to employing people who meet that profile — is one company tackling an aspect of the problem that’s become acute in the pandemic.
“Sixty percent of the job losses in the pandemic have been women, and the statistics have been even worse for women of color,” said Mom Project chief executive Allison Robinson. “It’s like a canary in the coal mine.”
While The Mom Project doesn’t have any tools today to surface candidates that meet more diverse profiles on that front, Robinson told TechCrunch that they are considering it and how to approach that in a way that works.
Ultimately these are considerations that matter for companies of any size, according to Bain Capital Ventures managing director, Sarah Smith.
“No matter what, it’s important that from day one [that] you have an eye on how to build an inclusive culture, where in an ideal world, even that first person you’re bringing onto the team could walk in and feel fairly welcomed. And… you really want people to bring their best selves and they bring their perspectives and their ideas,” Smith told the audience at TechCrunch’s Early Stage Conference. “I think it’s pretty common that a team might grow to like four or five from within the network, including the founders, [but] I think once you get to like number six, if you don’t have some type of gender or racial diversity yet… it’s gonna start to get really tough.”
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Will fintech unicorn Flywire’s proposed IPO reach escape velocity?
It’s a big morning for fintech startups today: Flywire, a Boston-based magnet for venture capital, has filed to go public.
Flywire is a global payments company that attracted more than $300 million as a startup, according to Crunchbase, most recently raising a $60 million Series F last month. We don’t have its most recent valuation, but PitchBook data indicates that the company’s February 2020, $120 million round valued Flywire at $1 billion on a post-money basis.
So what we’re looking at here is a fintech unicorn IPO. A great way to kick off the week, to be honest, though I’d thought that Robinhood would be the next such debut.
Fintech venture capital activity has been hot lately, which makes the Flywire IPO interesting. Its success or failure could dictate the pace of fintech exits and fintech startup valuations in general, so we have to care about it.
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Regardless, we’re doing our regular work this morning. First, what does Flywire do and with whom does it compete? Then, a closer look at its financial results as we hope to get our hands around its revenue quality, aggregate economics and growth prospects.
After that, we’ll discuss valuations and which venture capital groups are set to do well in its flotation. The company had a number of backers, but Spark Capital, Temasek, F-Prime Capital and Bain Capital Ventures made the major shareholder list, along with Goldman Sachs. So, a number of firms and funds are hoping for a big Flywire exit. Let’s dig in.
What is Flywire?
Flywire is a global payments company. Or, as it states in its S-1 filing, it’s “a leading global payments enablement and software company.” And it thinks that its market, and by extension itself, has lots of room to grow. While “substantial strides [have been] made in payments technology in the retail and e-commerce industries,” the company wrote, “massive sectors of our global economy—including education, healthcare, travel, and business-to-business, or B2B, payments—are still in the early stages of digital transformation.”
That’s the same logic behind Stripe’s epic valuation and the rising value of payments-focused companies like Finix.
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