Month: June 2019

Slack wants to be the new operating system for teams, something it has made clear on more than one occasion, including in its recent S-1 filing. To accomplish that goal, it put together an in-house $80 million venture fund in 2015 to invest in third-party developers building on top of its platform.

Weeks ahead of its direct listing on The New York Stock Exchange, it continues to put that money to work.

Troops is the latest to land additional capital from the enterprise giant. The New York-based startup helps sales teams communicate with a customer relationship management tool plugged directly into Slack. In short, it automates routine sales management activities and creates visibility into important deals through integrations with employee emails and Salesforce.

Troops founder and chief executive officer Dan Reich, who previously co-founded TULA Skincare, told TechCrunch he opted to build a Slackbot rather than create an independent platform because Slack is a rocket ship and he wanted a seat on board: “When you think about where Slack will go in the future, it’s obvious to us that companies all over the world will be using it,” he said.

Troops has raised $12 million in Series B funding in a round led by Aspect Ventures, with participation from the Slack Fund, First Round Capital, Felicis Ventures, Susa Ventures, Chicago Ventures, Hone Capital, InVision founder Clark Valberg and others. The round brings Troops’ total raised to $22 million.

Launched in 2015 by New York tech veterans Reich, Scott Britton and Greg Ratner, the trio weren’t initially sure of Slack’s growth trajectory. It wasn’t until Slack confirmed its intent to support the developer ecosystem with a suite of developer tools and a fund that the team focused its efforts on building a Slackbot.

“People sometimes thought of us, at least in the early days, as a little bit crazy,” Reich said. “But now Slack is the fastest-growing SaaS company ever.”

“We think the biggest opportunity in the [enterprise SaaS] category is going to be tools oriented around the customer-facing employee (CRM), and that’s where we are innovating,” he added.

Troops’ tools are helpful for any customer-facing team, Reich explains. Envoy, WeWork, HubSpot and a few hundred others are monthly paying subscribers of the tool, using it to interact with their CRM in a messaging interface and to receive notifications when a deal has closed. Troops integrates with Salesforce, so employees can use it to search records, schedule automatic reports and celebrate company wins.

Slack, in partnership with a number of venture capital funds, including Accel, Kleiner Perkins and Index, has also deployed capital to a number of other startups, like Lattice, Drafted and Loom.

With Slack’s direct listing afoot, the Troops team is counting on the imminent and long-term growth of the company’s platform.

“We think it’s still early days,” Reich said. “In the future, we see every company using something like Troops to manage their day-to-day.”

Our search continues for audacious early-stage startup founders to participate in Startup Battlefield at Disrupt San Francisco 2019 on October 2-4. But the opportunity clock is running down quickly. You have just one more week to step up and apply to our legendary pitch competition — and launch your startup to the world. Don’t wait — fill out the application today.

Applying is simple, and it doesn’t cost a thing. Neither does competing, but the selection process is competitive. TechCrunch editors with years of Startup Battlefield experience thoroughly vet every applicant. They’ll select anywhere from 15-30 startups to go head-to-head at Disrupt SF ’19.

What’s at stake? The winning founders receive the coveted Disrupt Cup, $100,000 in equity-free cash and they become the media and investor darlings of Disrupt SF. That’ll do wonders to your bottom line, and it can launch your company to the next level and beyond.

But even if you don’t take the title, you still win. TechCrunch shines a bright spotlight on all Startup Battlefield participants, and they receive a huge amount of media and investor attention. Plus, every competing team becomes part of the Startup Battlefield alumni community of more than 850 startups — a group that’s collectively raised more than $8.9 billion in funding and produced more than 110 exits. You’ll be alongside names like Mint, Dropbox, Yammer, TripIt, Getaround and Cloudflare — that’s some good networking territory.

Don’t worry about Main Stage jitters. All teams receive free in-depth pitch coaching from our Startup Battlefield-tested editorial team. You’ll be primed and ready to deliver a six-minute pitch and a live demo to our judges — a panel of experienced VCs and tech experts. Then you’ll answer any questions they throw at you.

Selected finalists will go on to round two — another pitch, demo and question session in front of a fresh set of judges. All the judges confer and then declare the overall Startup Battlefield champion. The whole shebang takes place in front of thousands of influential technologists, founders, journalists and investors. We also live-stream the entire event to the world (and make it available later on-demand) on TechCrunch.com, YouTube, Facebook and Twitter.

Disrupt San Francisco 2019 takes place October 2-4. Be bold. Be audacious. Apply to compete in Startup Battlefield — you have just one week left to get it done!

Not quite ready to take on Startup Battlefield? We’re looking for outstanding startups to apply for our TC Top Picks program. If selected, you’ll receive a free Startup Alley Exhibitor Package, VIP treatment and loads of media and investor exposure.

Interested in sponsoring or exhibiting at Disrupt SF 2019? Contact our sponsorship sales team by filling out this form.

Since 2013, SparkLabs Group has invested in more than 230 companies, and my general advice to our founders and portfolio companies hasn’t changed: I always tell them not to overthink valuation, know what they need in terms of capital for their seed round and how there is “good dilution” and “bad dilution.” Whether your dilution ends up being good or bad (or ugly) generally depends on how well you execute.

To solidify my advice, I sometimes go through the math of possible seed rounds and how future rounds can play out. To keep the discussion simple and focus on my core points, I keep the amount of investment the same and assume the company is starting with a 20% stock option pool, which venture capital firms typically require by a startup’s Series A round.

Three scenarios

I map out three valuations, representing a standard Silicon Valley startup with a pre-money valuation of $5 million (Scenario “A”), a “hot” startup with an $8 million pre-money valuation (Scenario “B”) and an outlier with a pre-money valuation of $12 million (Scenario “C”).

Let’s look at the typical pathway where the founders raise a $2 million seed round on a pre-money valuation of $5 million. They build their product, launch, gain great momentum and successfully raise an $8 million Series A, where even though they don’t get that many lead interests, they get a decent $20 million pre-money valuation.

Let’s assume this startup is in a mature startup space where investors are looking for good revenue traction.  With the $8 million raised, a startup team can face “The Good,” which I define as executing on all cylinders, or “The Bad,” which I would define as a struggle.

Sometimes it’s not about executing poorly or mismanagement. A product can be too early, deal with longer than expected sales cycles or face other factors outside a startup team’s control. Regardless, “The Bad” situation can be where a company isn’t able to raise their Series B at all — or struggles to find investors that still believe in the product and team, and gets funding but not at the best valuation for the founders and team ($15 million raised on a post-money valuation of $50 million).

“The Good” would be a startup hitting traffic, revenues, clients sales or whatever metrics help drive success.  Here the same startup raises a $15 million Series B on a post-money valuation of $95 million.

Scenario “C” was the startup with the outlier valuation at their seed stage that raised a $2 million seed round with a post-money valuation of $14 million. Probably a company founded by a co-founder of Twitter or a hot YC company. Their Series A continues on a similar trajectory, raising $8 million with a post-money valuation of $38 million. Their fork in the road is similar to the prior situation. “The Good” is a Series B that raises $15 million with a post-money valuation of $115 million, while the “The Bad” raises the same amount but has a post-money valuation of $85 million, and the founders owning 39.9% of the company versus 45.1%.

Don’t overthink or overplan your fundraising rounds

The easy conclusion is that it is really hard for founders and a team to predict and plan their fundraising rounds over the next several years, much less how well their product will turn out.

But you can make sure you’re better prepared as entrepreneurs by asking yourself some basic questions:

• How much capital do you really need to last you 12-18 months?
• Will this amount allow you to hit milestones to raise your Series A or Series B?

Some startups don’t need much capital to take off, while others need more. An entrepreneur’s problem can be raising too little or too much capital.

During my second startup in 2000 — during the first internet boom when money was flowing easier than today — we raised $7 million as our first round. I would describe that experience as “big rounds are like meth for entrepreneurs,” which typically ends in “The Ugly.” Money burns quicker than most entrepreneurs think. It’s not paper, it’s paper soaked in kerosene. Luckily, while facing bankruptcy, we closed an additional $7.5 million and the company became profitable — but not without a lot of pain and torment.

We have seen a fair number of our founders underestimate their cash needs at the seed round. Then they have to raise additional seed capital, which isn’t easy. Some might have been too confident in their sales ability or how efficient they would be with their capital. Investors might assume those were issues, plus question whether the market is really there, or whether the management team made too many missteps. Be prepared to answer these types of questions if you need to raise additional seed capital.

Pitching the valuation game

We typically remind our founders that the best way to increase their valuation is to execute well and gain enough interest to be offered at least two term sheets.

If you are raising a Series A and your seed round was a convertible note or a SAFE, that cap really isn’t your valuation, so don’t get fixated on that as a minimum. We’ve had portfolio companies with valuation caps of over $30 million pre-money, but their Series A was priced above $20 million. We’ve also had a founder overzealously focused on their valuation cap from their seed round on, who ruined negotiations with a top 10 VC firm because they wouldn’t go lower than their cap.

If you have one potential lead, I generally recommend knowing your value and negotiating reasonably. If your lead lowballs you, of course you should walk away. But if it’s within range, don’t nickel and dime on the valuation.

Your goal is to create investor interest from multiple firms while generating the least amount of friction to quickly close your round. It might be a difficult balance between knowing your value but respecting what investors are looking for, but don’t kill your fundraising efforts by not being flexible on valuation. Remember, it’s not all about the money and your ownership percentage. If one of our portfolio companies had a term sheet for a $10 million pre-money valuation from an unknown family office or an $8 million pre-money valuation from a top-tier venture capital firm, we would tell them to take the lesser valuation, even if it’s a smaller gain on our books.

Although raising money while navigating dilution can be tricky, with the right preparation and mindset, it’s possible to close your round with the best value for your company.

Whole Biome has pulled in $35 million in Series B financing from a list of investing titans, including Sequoia, Khosla, True Ventures, the Mayo Foundation and AME Ventues — just to name a few. The goal? to heal what ails you using microscopic bugs.

Medical science has caught on in the last few years about the importance of gut health using these bugs (also known as probiotics). Now startups are pitching in using venture money to come up with new and novel ideas.

“We’re at a unique point in time as the field of microbiome biology converges with enabling cutting-edge technologies and bioinformatics that will open up a whole new world of innovative health products,” said Colleen Cutcliffe, Whole Biome’s co-founder and chief executive officer.

Cutliffe, who hails from DNA sequencing company Pacific Biosciences, along with her partners Jim Bullard and John Eid, built a platform able to compute information from varying populations and compare microbiome sequencing to get a clear picture of what’s missing in a patient’s flora for overall health.

The next step is to use the raised funds to launch a product for the management of Type 2 Diabetes.

Many of the prescription diabetes medications out on the market today can come with a load of side effects like upset stomach, dizziness, rashes or inability to consume alcohol. However, Whole Biome says their product will not have any side effects.

Slated for release in early 2020, the startup has conducted double-blinded, placebo-controlled, randomized clinical trials for a product, which releases special probiotics into your gut with the goal of reducing glucose spikes.

“Whole Biome is creating novel, disease-targeting microbiome interventions that have the potential to improve the course of many of the significant health issues facing people today,” said Sequoia partner Roelof Botha. “They have built an integrated approach and a multi-disciplinary team across research, development and commercialization to unlock complex microbiome biology and create products with both clinical efficacy and unparalleled safety.”

To date, Whole Biome has now raised $57 million in funding.

Open source has become the de facto standard for building the software that underpins the complex infrastructure that runs everything from your favorite mobile apps to your company’s barely usable expense tool. Over the course of the last few years, a lot of new software is being deployed on top of Kubernetes, the tool for managing large server clusters running containers that Google open sourced five years ago.

Today, Kubernetes is the fastest growing open-source project and earlier this month, the bi-annual KubeCon+CloudNativeCon conference attracted almost 8,000 developers to sunny Barcelona, Spain, making the event the largest open-source conference in Europe yet.

To talk about how Kubernetes came to be, I sat down with Craig McLuckie, one of the co-founders of Kubernetes at Google (who then went on to his own startup, Heptio, which he sold to VMware); Tim Hockin, another Googler who was an early member on the project and was also on Google’s Borg team; and Gabe Monroy, who co-founded Deis, one of the first successful Kubernetes startups, and then sold it to Microsoft, where he is now the lead PM for Azure Container Compute (and often the public face of Microsoft’s efforts in this area).

Google’s cloud and the rise of containers

To set the stage a bit, it’s worth remembering where Google Cloud and container management were five years ago.

According to recent numbers from the World Health Organization, roughly half of people aged 12-35 are at risk for hearing loss. That’s due in no small part to explosive growth in “personal listening devices” like smartphones. Young people are cranking up the volume on their headphones and could be doing irreparable damage to their hearing in the process.

One of the health features Apple didn’t get around to discussing on stage yesterday tracks headphone volume levels over time. The feature, which available as part of the Health app, is able to track listening levels on calibrated and MFi headphones (including AirPods, Beats and the like). That information will be logged as either “OK” or “Loud” based on guidance from the W.H.O. 

The feature joins the new Noise app, which uses uses the Apple Watch’s built-in microphones to measure ambient noise. That app will send notifications if sound levels reach 90dBs — the level at which sustained exposure can lead to hearing loss.

The headphone health feature is a less proactive — assumedly because users have to opt into loud headphone volumes. Still, there’s something to be said for the ability to receive notifications when levels get loud, particularly over a sustained time period. I know I’ve certainly been in situations where I’ve unknowingly cranked the volume up on my headphones at, say, the gym where I’m using my own music to counteract whatever they’re pumping through the PA.

As this generation ages, this issue will likely only become more critical. But by the time many begin to discover the problem with prolonged volumes, it could be too late.

According to recent numbers from the World Health Organization, roughly half of people aged 12-35 are at risk for hearing loss. That’s due in no small part to explosive growth in “personal listening devices” like smartphones. Young people are cranking up the volume on their headphones and could be doing irreparable damage to their hearing in the process.

One of the health features Apple didn’t get around to discussing on stage yesterday tracks headphone volume levels over time. The feature, which available as part of the Health app, is able to track listening levels on calibrated and MFi headphones (including AirPods, Beats and the like). That information will be logged as either “OK” or “Loud” based on guidance from the W.H.O. 

The feature joins the new Noise app, which uses uses the Apple Watch’s built-in microphones to measure ambient noise. That app will send notifications if sound levels reach 90dBs — the level at which sustained exposure can lead to hearing loss.

The headphone health feature is a less proactive — assumedly because users have to opt into loud headphone volumes. Still, there’s something to be said for the ability to receive notifications when levels get loud, particularly over a sustained time period. I know I’ve certainly been in situations where I’ve unknowingly cranked the volume up on my headphones at, say, the gym where I’m using my own music to counteract whatever they’re pumping through the PA.

As this generation ages, this issue will likely only become more critical. But by the time many begin to discover the problem with prolonged volumes, it could be too late.

Air travel accounts for a significant chunk of greenhouse gas emissions and other pollutants, and the amount of air travel has risen steadily over the past few decades, with emissions from aviation predicted to grow significantly through 2020 and beyond. Electric passenger planes are in the works, but unlikely to replace our workhorse passenger jets any time soon – which is why efforts like a new type of conventional fuel aircraft designed being backed by KLM Airlines.

The new aircraft design, conceived by designer Justus Benad and being further realized by a team of researchers at the Netherlands’ Delft University of Technology, per CNN. The look of the aircraft is clearly different from the start, ditching the typical cylindrical tube main fuselage for a ‘squat slice of pizza’ look that extends the body through the wings of the plane.

This beefed up core holds passengers, fuel and cargo, and through this distribution, which improves the aircraft’s overall aerodynamics, the plane will manage to be 20 percent more fuel-efficient vs. the Airbus A350, which carries approximately the same amount of passengers depending on its configuration.

A savings of 20 percent in fuel consumption may not seem like much, but over time, and at scale, it could potentially make a huge difference – especially if the pace of electric aircraft development and other alternatives doesn’t pick up. That said, timelines for deployment aren’t super immediate: These could enter service sometime between 2040 and 2050 based on the current development schedule, which isn’t exactly tomorrow.

Testing an all-new design for passenger jets, which basically look like they did when they were first introduced, is obviously not something one undertakes lightly, however. The good news is that the team is hoping to put a scale model into real-world flight testing later this year.

Here’s an important reminder to all the shoe-string startups, frugal founders, budget-minded makers and, well, anyone else who loves to save a buck. You have two weeks left to reap the biggest savings on passes to Disrupt San Francisco 2019.

We offer passes to suit every budget and, depending on the type of pass you buy, the super early-bird pricing can save you up to $1,800. But that opportunity to save big disappears on June 21 at precisely 11:59 p.m. (PT). Procrastination is not your friend. Be a super early bird, buy your pass today and save yourself some serious dough. Plus, you can lock in this super-low price but spread your payments for the event over time by selecting the payment plan option during checkout.

Now get ready to experience all the opportunity, innovation and inspiration that TechCrunch’s flagship Disrupt event offers. We expect more than 10,000 attendees to join us for three jam-packed days of programming dedicated to early-stage startups.

Let’s start with just some of the incredible speakers. You’ll hear from Greg Brockman and Sam Altman, co-founders of OpenAI. They’ll discuss, among other things, their concern about the effect of artificial general intelligence on employment, cyberwarfare and concentration of power.

Online privacy and data protection are seriously hot topics. And who better to discuss them than Gabriel Weinberg — founder and CEO of the pro-privacy search engine DuckDuckGo. We can’t wait to hear his thoughts on what privacy really means, the potential revival of a Do Not Track browser standard and how he’s built a profitable company by selling principled products.

If you want to launch your startup to the world, there’s no better way to do it than by participating in Startup Battlefield, TechCrunch’s epic pitch competition. The grand prize is a very epic $100,000. Think your startup has what it takes to win? Then get moving, because you have less than a week left to apply to Startup Battlefield.

If you’re ready for world-class networking, then head directly to Startup Alley, the exhibit hall where you’ll find hundreds of early-stage startups displaying innovative products, platforms and services that span the tech spectrum.

Pro tip: Use CrunchMatch to make your networking so much easier. It helps you find and connect with the right people — based on your specific business goals.

Startup Alley’s also home base for TechCrunch’s Top Picks, a curated collection of outstanding startups representing these categories: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, SaaS and Social Impact & Education.

Top Pick designees receive a free Startup Alley Exhibition package and VIP invitations to special events at Disrupt SF. Hey, why not see whether your startup makes the cut? Apply to be a TC Top Pick.

There’s so much more at Disrupt SF 2019 — workshops, Q&A Sessions, demos, the Hackathon. Why not join us on October 2-4 at the lowest possible price? Buy your super early-bird pass now before that opportunity flies the coop on June 21 at 11:59 p.m. (PT).

With Congressional probes and greater scrutiny from Federal regulators on the horizon, Apple has abruptly reversed course on its bans of parental control apps available in its app store.

As reported by The New York Times, Apple quietly updated its App Store guidelines to reverse its decision to ban certain parental control apps.

The battle between Apple and certain app developers dates back to last year when the iPhone maker first put companies on notice that it would cut their access to the app store if they didn’t make changes to their monitoring technologies.

The heart of the issue is the use of mobile device management (MDM) technologies in the parental control apps that Apple has removed from the App Store, Apple said in a statement earlier this year.

These device management tools give control and access over a device’s user location, app use, email accounts, camera permissions and browsing history to a third party.

“We started exploring this use of MDM by non-enterprise developers back in early 2017 and updated our guidelines based on that work in mid-2017,” the company said.

Apple acknowledged that the technology has legitimate uses in the context of businesses looking to monitor and manage corporate devices to control proprietary data and hardware, but, the company said, it is “a clear violation of App Store policies — for a private, consumer-focused app business to install MDM control over a customer’s device.”

Last month, developers of these parental monitoring tools banded together to offer a solution. In a joint statement issued by app developers including OurPact, Screentime, Kidslox, Qustodio, Boomerang, Safe Lagoon, and FamilyOrbit, the companies said simply, “Apple should release a public API granting developers access to the same functionalities that Apple’s native “Screen Time” uses.”

By providing access to its screen time app, Apple would obviate the need for the kind of controls that developers had put in place to work around Apple’s restrictions.

Essentially it just reverses the company’s policy without granting access to Screen Time as the consortium of companies have suggested.

“It’s been a hellish roller coaster,” said Dustin Dailey, a senior product manager at OurPact, told The New York Times . OurPact had been the top parental control app in the App Store before it was pulled in February. The company estimated that Apple’s move cost it around $3 million, a spokeswoman told the Times.