Year: 2018

League founder and CEO Michael Serbinis

League, an online platform that wants to reduce the strain of managing health benefits for companies and employees alike, announced today that it has raised a $62 million Series B. The round was led by TELUS Ventures, with participation from Wittington Ventures and returning investors OMERS, Infinite Potential Group, RBC Ventures and BDC Ventures.

The Toronto-based startup’s last round of funding was a $25 million Series A two years ago. With clients like Uber, Shopify and Unilever, League is currently one of the bigger players in the “employee wellness space,” which encompasses a roster of startups dedicated to boosting retention and productivity rates by improving health benefits. The growth of the sector is fueled by competition for top talent, the rising cost of healthcare and increasing awareness of mental health issues.

League was launched in 2014 by serial entrepreneur Michael Serbinis, who was previously founder and CEO of Kobo, the Kindle competitor acquired by Rakuten in 2011. Serbinis tells TechCrunch that his interest in health technology was sparked by a conversation about healthcare inefficiencies with Patrick Soon-Shiong, the pharmaceutical entrepreneur and NantHealth founder probably better known outside of biotech circles as the newest owner of the Los Angeles Times. Serbinis says Soon-Shiong told him that the healthcare system needed to be fixed by someone outside of the industry, who was able to take a fresh, consumer-driven approach.

“I got into it naively not being a healthcare person, with not even a biology class anywhere in my past, and I very quickly realized that most people think about healthcare through the lens of health insurance, i.e. can I do it, can I afford it?” Serbinis, League’s CEO, says. “The more I learned about it, the more I realized how broken it is. In the U.S. and Canada and Western European nations, healthcare gets more expensive, but you get less and less, and no one loves the experience.”

He notes that health benefits “are a top three requirement for anyone seeking a new job in the U.S. today and for millennials it’s the top one or two, depending on the survey.” At the same time, healthcare is also one of the top three expenses for companies.

While there is a growing roster of startups, including Spring Health, Lyra Health and Lumity, tackling different corporate healthcare issues, Serbinis felt the space was still missing “an end-to-end platform that fits on top of health insurance providers and underwriters, to give employers a way to offer a competitive solution in the war for talent and saving money.”

League’s mission is to let employees take more control over their health plans, while reducing costs for companies by providing a HIPAA-compliant platform that connects all benefits. This enables employees to manage their health plan and benefits with League’s chat-based online assistant and a digital wallet. They also gain more transparency into things like health insurance pricing and flexible spending accounts. League partners with other companies to offer perks like ClassPass or Headspace discounts, prescription delivery services or access fertility treatments that aren’t covered by traditional insurance plans.

On the other end, companies get analytics to help them design healthcare plans and see if the benefits they offer are actually improving employee morale.

Serbinis says League’s ease of use is proven by its high engagement rate. The company claims three-quarters of users log onto the platform each month, and of that number, many access it five to 20 times a month.

One interesting aspect of League’s story is that Amazon, Berkshire Hathaway and JP Morgan are currently making headlines for a new joint health care initiative. While the venture will start by overhauling health benefits at those three organizations, it is being closely watched because of its potential influence on the health care industry. Thanks to Kobo, which was once Kindle’s top competitor, Serbinis already has experience going head-to-head with Amazon.

After learning about the triumvirate’s plans, Serbinis says he emailed Bezos. “I said I love the initiative and would love to help out, because for the most part, what people expect in the short-term is really aggregate purchasing power and driving costs down there. But ultimately, I expect a lot more from them, and the idea of bringing strategic assets and capability, a big pool of employees and technology together is the right strategy,” he says. “I can see Amazon looking for a partner like League.”

He adds that the joint initiative will light a fire in the sector. “I see new entrants into this market accelerate because of Amazon. It really has opened people’s eyes to the idea that this is a massive problem,” Serbinis says. “I see a lot of people getting into the game because of Amazon leading the way, and what I’ve seen already is incumbent players trying to speed up and accelerate their innovation programs.”

In a media statement, TELUS Ventures managing partner Rich Osborn said “We believe that innovative companies like League–which deliver compelling, consumer-centric experiences–will not only drive high employee and employer engagement, but will also deliver fundamental improvements in health outcomes for Canadians through their carrier-friendly open platform.”

The company’s Series B will be used to open offices in San Francisco, New York and London. League launched in the United States in 2017, starting with an office in Chicago, and is now licensed to operate in all 50 states. Serbinis says one of the markets that will help its American expansion are employers with less than 50 “full-time equivalent” employees who aren’t mandated to provide coverage under the Affordable Care Act, but still need to offer health benefits in order to attract talent. Another new opening is the recent Department of Labor ruling on “association health plans” that makes it easier for small businesses in the same sector to team up and buy employee health insurance together.

League also plans to begin operating in the United Kingdom and European Union next year, which will make it easier to attract multinational clients who want to use the same platform to manage health benefits in different countries.

“When you think about the future of health insurance, it’s easy to think about more of the same, but with a better website or app,” says Serbinis. “But the fact is that the future of health insurance is not just about insurance, but health and there is the idea of focusing on consumers and delivering personalized experiences, a digital experience that is data driven and helps them every day, instead of waiting to the point where they are sick and have to go to a website under duress to find out what to do.”

WeWork may be doubling down on Asia, having initially focused its efforts on China, but that isn’t stopping local players from hatching ambitious expansion plans of their own.

One of those eying new markets is Hong Kong-based Campfire, which tries to stand out from the crowd with industry-focused spaces. Today, the startup announced it has raised an $18 million Series A ahead of planned expansions to three overseas countries: Singapore, Australia and the UK. It previously raised $6 million in March 2017.

Two-year-old Campfire’s business right now is in Hong Kong, where it has eight locations which include co-education, co-retail and co-living sites, as well as more standard co-working venues. In the case of its fashion-focused location, that even includes runway, photo studio, fabric facility and 3D printer.

The new capital comes from a trio of real estate firms in Hong Kong, they are Kwai Jung Group, Fast Global Holdings — which is a subsidiary of Rykadan Capital — and Sa Sa. In the latter case, Sa Sa is actually a cosmetics brand that operates across Greater China and parts of Southeast Asia, but the firm owns a significant retail footprint. That includes the building that houses Campfire’s ‘V Point’ space in Causeway Bay, Hong Kong, so the relationship is already well advanced.

A Campfire representative confirmed that the capital is all provided up front and equity-based, in other words it is an investment in the business not specific locations or joint ventures, as is sometimes the case with investment deals in co-working firms.

Going beyond Hong Kong, the group is set to open its first overseas space in London (Shoreditch) with co-working locations in Melbourne, Sydney and Singapore planned thereafter. Further down the line, it is looking to move into “global gateway cities,” with the likes of Tokyo, Osaka, Bangkok and Brisbane among those that are on the list.

Co-working is sufficiently developed worldwide that most countries across Asia have a number of local players who compete with WeWork, the global leader valued at $35 billion, either now or else soon in the future. Some of the more developed of that bunch include Singapore’s JustCo, EV Hive in Indonesia and China’s Ucommune. WeWork has actually been busy consolidating its position, having snapped up Spacemob in Southeast Asia and its main rival in China, Naked Hub.

Israel-based AllCloud, a professional services provider for Salesforce users and businesses who want a bit of help in managing their application on AWS and Google Cloud, today announced that it has acquired Figur8, another professional services company with a focus on Salesforce consulting, implementations and development services.

While the two companies did not disclose the price of the acquisition, the deal was at least partly enabled by AllCloud’s new $7 million funding round led by the company’s existing investors and new investors Discount Capital and Hallett Capital. With this, AllCloud has now raised a total of $15 million.

And to cap things off, AllCloud also today announced that that it is bringing on Eran Gil, the co-founder of Cloud Sherpas (which was acquired by Accenture in 2015), as its new CEO. The company’s current CEO, Ronit Rubin, will remain at the company, but become GM of EMEA.

“The acquisition of Figur8 provides us the ability to better support our customers’ digital transformation efforts on a global scale,” said Gil in today’s announcement. “The new capital provides us the flexibility to grow organically or, if we prefer, through more acquisitions. With a seasoned management team and plenty of resources, AllCloud is in a very strong position to serve our customers wherever and however they need us.”

AllCloud was an early Salesforce partner, so today’s acquisition strengthens its expertise in this area. What’s maybe just as important, though, is that this acquisition gives AllCloud a foothold in North America, thanks to Figur8’s offices in San Francisco, New York, Toronto and Vancouver. These will complement the company’s existing offices in Israel, Munich and Berlin. Figur8’s co-founders, Ojay Malonzo and Richard Lockson, who started the company in 2012, will remain at AllCloud as SVP Sales North America and SVP Delivery North America, respectively.

Life without Uber should be simple for Grab, but a battle with regulators in Singapore could see the company’s acquisition of Uber’s Southeast Asia business unwound while some consumers have voiced concern around a lack of competition.

Grab co-founder Hooi Ling Tan recently claimed competition remains in the market, but that hasn’t stopped another consumer backlash after the ride-hailing firm altered its loyalty program without warning.

To be fair to Grab, earning loyalty points for taxi rides is something unique — Uber doesn’t offer any kind of program, for example — and the changes initiated last week seem aimed at spreading the benefit beyond taxis and into Grab’s newer ventures, which include its GrabPay payment service and food deliveries.

However, in doing so, the company made two cardinal sins. The changes included the lowering of benefits for Grab’s highest tier (read: most loyal) customers — with rebates dropping from a range of 3.5-4.5 percent to 0.7-1.7 percent, as MileLion explains in thorough detail. Worse than that, it initiated the new terms, which include these drastic drops, on a Friday and with immediate effect.

That meant points earned over the past year were suddenly devalued with no apparent recourse.

10 July 2018; Tan Hooi Ling, Co-Founder, Grab, speaks at a pressconferencee during day one of RISE 2018 at the Hong Kong Convention and Exhibition Centre in Hong Kong. Photo by Stephen McCarthy / RISE via Sportsfile

Unsurprisingly that sparked a backlash, with many consumers accusing Grab of making the changes to save on money. (Grab has said it hasn’t increased prices after Uber’s exit despite some consumers claiming to the contrary.)

That led to a second announcement, made late on Monday, that postponed the introduction of the new loyalty program terms until September 30. However, it hasn’t scrapped the new changes themselves. That’s the right move, and it gives customers the chance to spend the credit they earned in the way they believed it would be redeemed before the change kicks in.

“We acknowledge that customers would appreciate time to adjust to the changes. Effective tomorrow (24 July) at 8am until 30 September, GrabRewards members can claim ride reward points at the previous rates. Customers who have purchased Grab ride rewards based on the new rates will have the difference in points refunded,” the company said in a statement.

It added that it plans to introduce “more exclusive perks” for its higher-tier ‘platinum” and ‘gold’ customers before the end of the year. TechCrunch understands that will relate to partnerships with third-parties, enabling users to spend points accumulated with Grab in more places although details aren’t finalized.

In the past, competition with Uber might have given Grab some leeway for messing up communication with users. But, as this latest saga shows, the removal of that competition has dented consumer confidence in Grab, and that means every misstep has the potential to alienate or upset users more than it did in the past. That’s part and parcel of adjusting from being the underdog fighting a global giant to being the biggest fish in the pond.

Catering marketplace company ezCater is already putting its big $100 million funding round to good use. The company is acquiring GoCater, a European marketplace that operates in the same field. This is ezCater’s first international expansion move.

If you’re in charge of ordering catered lunch at your office, you probably have heard about ezCater . The company lets you order breakfast, lunch or dinner for 10, 30 or maybe 100 people at once. This service could be particularly useful to impress a client, throw an office party, get lunch together during an off-site and more.

But ezCater doesn’t cook anything itself. The company is a marketplace and connects you with catering companies and big restaurants around you. In other words, ezCater lets you browse the menu of dozens of restaurants around you from the same website and place an order without picking up the phone.

Of course, ezCater didn’t invent catering. But catering is a fragmented industry with a lot of friction. It’s hard to know how much you’re going to pay in advance, it takes a lot of effort to find a new restaurant outside of your usual list. And restaurants could use a new way to promote their offering. Those are the perfect ingredients to create an online marketplace.

You may already know all the options around your office, but ordering through ezCater provides additional benefits. For instance, all your receipts are centralized in the same interface, which lets you get a clear overview of your spendings on catering.

You can also let other people order food for their clients and events. ezCater lets you set maximum amounts, tipping policies and more.

GoCater offers more or less the same thing, but in France and Germany. The company started as a spinoff from French startup La Belle Assiette. GoCater lets you create a whitelist of catering options. You can also set up an approval system so that the intern doesn’t order ice creams for everyone. Finally, GoCater clients only get billed once per month, even if companies order multiple times.

You pay the same price if you order through GoCater or the catering company directly. Catering companies end up paying a cut on GoCater orders. But the startup takes care of billing, accounting and accounts receivable. This way, you can focus on your core business instead of chasing money from past clients.

ezCater is an order of magnitude bigger than GoCater. ezCater works with 60,000 restaurants, while GoCater only has a few hundred restaurants on its platform. It’s worth noting that ezCater has been around for much longer.

But GoCater has one big advantage over ezCater — they have a team on the ground in Europe, ready to attract new restaurants and corporate clients. It’s clear that ezCater was looking for a way to get started in Europe, and GoCater seems like the right fit.

For now, the company will keep both brands after the acquisition. The teams will slowly merge the platforms into a single product.

“The entire GoCater team is staying, and we’re now going to rapidly expand the European team of the company — both the sales team for Europe and the tech and product team for the group,” GoCater founder and CEO Stephen Leguillon told me.

It was revealed at E3 last month that Microsoft was building a cloud gaming system. A report today calls that system Scarlett Cloud and it’s only part of Microsoft next-gen Xbox strategy. And it makes a lot of sense, too.

According to Thurrott.com, noted site for all things Microsoft, the next Xbox will come in two flavors. One, will be a traditional gaming console where games are processed locally. You know, like how it works on game systems right now. The other system will be a lower-powered system that will stream games from the cloud — most likely, Microsoft’s Azure cloud.

This streaming system will still have some processing power, which is in part to counter latency traditionally associated with streaming games. Apparently part of the game will run locally while the rest is streamed to the system.

The streaming Xbox will likely be available at a much lower cost than the traditional Xbox. And why not. Microsoft has sold Xbox systems with a slim profit margin, relying on sales of games and online services to make up the difference. A streaming service that’s talk about on Thurrott would further take advantage of this model while tapping into Microsoft’s deep understanding of cloud computing.

A few companies have tried streaming full video games. Onlive was one of the first and while successful for a time, but eventually went through a dramatic round of layoffs before a surprise sale for $4.8 million in 2012. Sony offers an extensive library of PS2, PS3 and PS4 games for streaming through its PlayStation Now service. Nvidia got into the streaming game this year and offers a small selection of streaming through GeForce Now. But these are all side projects for the companies.

Sony and Nintendo do not have the global cloud computing platform of Microsoft, and if Microsoft’s streaming service hits, it could change the landscape and force competitors to reevaluate everything.

The title could just as easily be Sweet Justice.

The Boston-headquartered publishing house Little, Brown has agreed to publish a new book about Cameron and Tyler Winklevoss, who famously settled a 2008 lawsuit against their former Harvard classmate Mark Zuckerberg over Facebook’s earliest days, then made a much larger fortune with their settlement money by investing it in bitcoin.

According to the business magazine The Bookseller, the new opus, titled Bitcoin Billionaires, covers a lot of territory, from the brothers trying without success to raise a venture fund in Silicon Valley (no one wanted to upset Zuckerberg, is the claim) to first hearing about bitcoin on a jaunt to Ibiza, Spain. In fact, they reportedly wound up gathering up one percent of all the bitcoin in circulation during or around 2012. 

Whether the book is made into a movie remains to be seen, but it seems as likely as not, given that its author is fellow Harvard grad Ben Mezrich, who also authored The Accidental Billionaires.

That book was eventually adapted by Aaron Sorkin into the Academy Award-winning movie about Facebook’s origins, The Social Network. In fact, when Mezrich began pitching his newest effort to publishing houses in the spring, the New York Post reported on “buzz that there’s already a movie deal in the works for the planned book.”

In the meantime, the Winklevoss brothers are receiving some fresh attention in Fortune, which included them in a new 40 Under 40 List that the outlet published this morning and which focuses on young movers and shakers at the “edge of finance and technology.” The reasoning behind their inclusion: the brothers, now 36, run one of the world’s most influential crypto funds with their New York and L.A.-based firm Winklevoss Capital. They also oversee the three-year-old digital asset exchange Gemini, which they founded in 2015.

Pokémon GO just got a little surprise update, complete with a curious new feature: “Lucky” Pokémon

Most things in Pokémon GO are adapted from things that already exist in the Pokémon universe. Items like incense, lucky eggs, and the like all exist in the main Pokémon series (though what these items actually do tends to be a bit different in GO.)

Lucky Pokémon, as far as I know, is a new concept all together.

So what are they? And how are they different from existing Shiny Pokémon?

Shiny Pokémon are rare variations of existing Pokémon with colors that differ from the standard. You might tap on your 398th Dratini, for example, only to find that it’s bright pink instead of the standard blue. You might randomly tap a Minun to find that it has green ears instead of blue, or an Aron with red eyes instead of blue. It’s a fun way to keep players tapping on Pokémon even after their Pokédex is technically complete. The differences are only skin deep, though; beyond the visual shift, Shiny Pokémon are generally functionally the same as their non-shiny version.

The new “Lucky” Pokémon, meanwhile, don’t look much different (save for a sparkly background when you look at them in your collection). They do, however, have a little functional advantage: powering them up requires less stardust. In other words, you’ll be able to make them stronger faster and with less work.

How do you get’em? By trading. While folks are still working out the exact mechanics, it looks like non-Lucky Pokémon have a chance to become Lucky Pokémon when traded from one player to another. According to Niantic, the odds of a Pokémon becoming “lucky” after a trade increase based on how long ago it was originally caught.

And for the collectors out there: yes, for better or worse, “Lucky” Pokémon are now a category in the Pokédex. Niantic just added trading to Pokémon GO a month ago, and this is a clever way to get players to care about trading even after they’ve already caught everything there is to catch.

This update also brings a few other small changes, mostly just polishing up the way the friend/trading system works:

• You can now give friends nicknames. That’s super useful for remembering who is who, or for remembering that you added PikaFan87 because they promised to trade you a Kangaskhan
• You now get a bit of XP for sending gifts
• Gifts can now contain stardust
• You can now delete gifts from your inventory

Doughbies should have been a bakery, not a venture-backed startup. Founded in the frothy days of 2013 and funded with $670,000 by investors including 500 Startups, Doughbies built a same-day cookie delivery service. But it was never destined to be capable of delivering the returns required by the VC model that depends on massive successes to cover the majority of bets that fail. The startup became the butt of jokes about how anything could get funding.

This weekend, Doughbies announced it was shutting down immediately. Surprisingly, it didn’t run out of money. Doughbies was profitable, with 36 percent gross margins and 12 percent net profit, co-founder and CEO Daniel Conway told TechCrunch. “The reason we were able to succeed, at this level and thus far, is because we focused on unit economics and customer feedback (NPS scoring). That’s it.”

Many other startups in the on-demand space missed that memo and vaporized. Shyp mailed stuff for you and Washio dry cleaned your clothes, until they both died sudden deaths. Food delivery has become a particularly crowded cemetary, with Sprig, Maple, Juicero, and more biting the dust. Asked his advice for others in the space, Conway said to “Make sure your business makes sense – that you’re making money, and make sure your customers are happy.”

Doughbies certainly did that latter. They made one of the most consistently delicious chocolate chip cookies in the Bay Area. I had them cater our engagement party. At roughly $3 per cookie plus $5 for delivery, it was pricey compared to baking at home, but not outrageous given SF restaurant rates. From its launch at 500 Startups Demo Day with an ‘Oprah’ moment where investors looked beneath their seats to find Doughbies waiting for them, it cared a lot about the experience.

But did it make sense for a bakery to have an app and deliver on-demand? Probably not. There was just no way to maintain a healthy Doughbies habit. You were either gunning for the graveyard yourself by ordering every week, or like most people you just bought a few for special occassions. Startups like Uber succeed by getting people to routinely drop $30 per day, not twice a year. And with the push for nutricious and efficient offices, it was surely hard for enterprise customers to justify keeping cookies stocked.

Flanked by Instacart and Uber Eats, there weren’t many ripe adjacent markets for Doughbies to conquer. It was stuck delivering baked goods to customers who were deterred from growing their cart size by a sense of gluttony.

Without stellar growth or massive sales volumes, there aren’t a lot of exciting challenges to face for people like Conway and his co-founder Mariam Khan. “Ultimately we shutdown because our team is ready to move on to something new” Conway says.

The startup just emailed customers explaining that “We’re currently working on finding a new home for Doughbies, but we can’t make any promises at this time.” Perhaps a grocery store or broader food company will want its logistics technology or customer base. But delivery is a brutal market to break into, dominated by those like Uber who’ve built economies scale through massive fleets of drivers to maximize routing efficiency. 

In the end, Doughbies was a lifestyle business. That’s not a dirty word. A few co-founders with dream can earn a respectable living doing what they care about. But they have to do it lean, without the advantage of deep-pocketed investors.

As soon as a company takes venture funding, it’s under pressure to deliver adequate returns. Not 2X or 5X, but 10X, 100X, even 1000X what they raise. That can lead to investors breathing down their neck, encouraging big risks that could tank the business just for a shot at those outcomes. Two years ago we saw a correction hit the ecosystem, writing down the value of many startups, and we continue to see the ripple effect as companies funded before hit the end of their runway.

Desperate for cash, founders can accept dirty funding terms that screw over not just themselves, but their early employees and investors. FanDuel raised over $416 million at a peak valuation of $1.3 billion. But when it sold for $465 million, the founders and employees received zero as the returns all flowed to the late-stage investors who’d secured non-standard liquidation preferences. After nearly 10 years of hard work, the original team got nothing.

Not every business is a startup. Not every startup is a rocket ship. It takes more than just building a great product to succeed. I can require suddenly cutting costs to become profitable before you run out of funding. Or cutting ambitions and taking less cash at a lower valuation so you can realistically hit milestones. Or accepting a low-ball acquisition offer because it’s better than nothing. Or not raising in the first place, and building up revenues the old-fashioned way so even modest growth is an accomplishment.

Investors are often rightfully blamed for inflating the bubble, pushing up raises and valuations to lure startups to take their money instead of someone else’s. But when it comes to deciding what could be a fast-growing business, sometimes its the founders who need the adjustment.

San Francisco is one of the most beautiful, diverse cities in the world. If you’re planning a trip to San Francisco this September during Labor Day week, maybe for some sightseeing, maybe for TechCrunch Disrupt SF, then you’ll want to make sure you take advantage of these killer hotel deals TechCrunch has negotiated.

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• Complimentary Wi-Fi
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All these hotels are within easy walking distance of public transportation and major SF sights. You can check out the complete list of hotels right here. You do not need to be registered for Disrupt SF 2018 to take advantage of these awesome hotel discounts.

Hotel highlights

Grand Hyatt San Francisco
Towering 36 stories above newly renovated historic Union Square in the heart of downtown San Francisco, the Grand Hyatt is the perfect place to relax after a busy day around the city. See more.

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InterContinental San Francisco
Towering 32 stories high, the 550-room InterContinental San Francisco Hotel features 43,000 square feet of flexible meeting space, destination restaurant and companion bar, 10-room treatment spa, health club and indoor swimming pool. See more.

About Disrupt SF 2018
Disrupt SF 2018 (September 5-7) is where thousands of startups, investors, founders and entrepreneurs gather to hear from thought leaders and discover the latest tech innovations. With three stages hosting awesome content, a $100,000 pitch competition and a startup-filled expo floor, Disrupt SF 2018 is an event you won’t want to miss. Early-bird ticket sales end July 25. Book your tickets here.

Have more questions about booking your hotel room, or traveling with a big group? Email TechCrunch@38nconnections.com.