Year: 2019

At TechCrunch Disrupt, the original tech startup conference, venture capitalists remain amongst the premier guests.

VCs are responsible for helping startups — the focus of the three-day event — get off the ground and as such, they are often the most familiar with trends in the startup ecosystem, ready to deliver insights, anecdotes and advice to our audience of entrepreneurs, investors, operators, managers and more.

In the first half of 2019, VCs spent $66 billion purchasing equity in promising upstarts, according to the latest data from PitchBook. At that pace, VC spending could surpass $100 billion for the second year in a row. We plan to welcome a slew of investors to TechCrunch Disrupt to discuss this major feat and the investing trends that have paved the way for recording funding.

Mega-funds and the promise of unicorn initial public offerings continue to drive investment. SoftBank, of course, began raising its second Vision Fund this year, a vehicle expected to exceed $100 billion. Meanwhile, more traditional VC outfits revisited limited partners to stay competitive with the Japanese telecom giant. Andreessen Horowitz, for example, collected $2.75 billion for two new funds earlier this year. We’ll have a16z general partners Chris Dixon, Angela Strange and Andrew Chen at Disrupt for insight into the firm’s latest activity.

At the early-stage, the fight for seed deals continued, with larger funds moving downstream to muscle their way into seed and Series A financings. Pre-seed has risen to prominence, with new funds from Afore Capital and Bee Partners helping to legitimize the stage. Bolstering the early-stage further, Y Combinator admitted more than 400 companies across its two most recent batches,

We’ll welcome pre-seed and seed investor Charles Hudson of Precursor Ventures and Redpoint Ventures general partner Annie Kadavy to give founders tips on how to raise VC. Plus, Y Combinator CEO Michael Seibel and Ali Rowghani, the CEO of YC’s Continuity Fund, which invests in and advises growth-stage startups, will join us on the Disrupt Extra Crunch stage ready with tips on how to get accepted to the respected accelerator.

Moreover, activity in high-growth sectors, particularly enterprise SaaS, has permitted a series of outsized rounds across all stages of financing. Speaking on this trend, we’ll have AppDynamics founder and Unusual Ventures co-founder Jyoti Bansal and Battery Ventures general partner Neeraj Agrawal in conversation with TechCrunch’s enterprise reporter Ron Miller.

We would be remiss not to analyze activity on Wall Street in 2019, too. As top venture funds refueled with new capital, Silicon Valley’s favorite unicorns completed highly-anticipated IPOs, a critical step towards bringing a much needed bout of liquidity to their investors. Uber, Lyft, Pinterest, Zoom, PagerDuty, Slack and several others went public this year and other well-financed companies, including Peloton, Postmates and WeWork have completed paperwork for upcoming public listings. To detail this year’s venture activity and IPO extravaganza, David Krane, CEO and managing partner of Uber and Slack investor GV will be on deck, as will Sequoia general partner Jess Lee, Floodgate’s Ann Miura-Ko and Aspect Ventures’ Theresia Gouw.

There’s more where that came from. In addition to the VCs already named, Disrupt attendees can expect to hear from Bessemer Venture Partners’ Tess Hatch, who will provide her expertise on the growing “space economy.” Forerunner Ventures’ Eurie Kim will give the Extra Crunch Stage audience tips on building a subscription product, Mithril Capital’s Ajay Royan will explore opportunities in the medical robotics field, SOSV’s Arvind Gupta will dive deep into the cutting edge world of health tech and more.

Disrupt SF runs October 2 – 4 at the Moscone Center in the heart of San Francisco. Passes are available here.

Audio sharing is among the more delightful features arriving as part of Apple’s iOS 13 update. With it, users will be able to share songs across nearby device — a sort of 2019 version of buying a headphone splitter or handing someone your earbud.

Beats pinged TechCrunch this morning to let us know that the new addition will be arriving on a number of its new headphones, in addition to AirPods. No surprise, really, given that the company was swallowed up by Apple some years ago, but a nice little bonus for those who H1 and W1-powered models, including Powerbeats Pro (my headphone of choice, of late), Studio3 Wireless, BeatsX, Powerbeats3 Wireless and Solo3 Wireless.

The feature works in one of two ways. Users can either put two iOS devices in close proximity and play music one one from a number of different sources. From there, a Share Audio dialogue box pops up, similar to the one you’ll see during the initial pairing process. Tapping Share Audio will do just that.

The other method involves pairing two pairs of headphones to a single device. It’s the better of the two options if you don’t have access to two devices, but even with Apple’s tech, it can still be a bit of a pain switching between products. Either way, it’s a fun option for sharing playlists on a long commute.

The feature arrives on September 23.

After a setback last week due to a fire on the launch pad, Mitsubishi Heavy Industries (MHI) is ready to take another shot at its HTV-8 mission to deliver supplies and other payloads to the International Space Station. The launch was originally scheduled for September 11, but the fire caused a scrub and led to a subsequent investigation to determine the cause. The new window is an instantaneous one set for 1:30 AM JST on September 24 (12:30 PM/ 9:30 PM ET/PT on September 23).

The investigation has now revealed that the fire, which was extinguished and resulted in no lasting damage to the rocket or its cargo, was most likely caused by built-up static electricity created by oxygen dripping from the exhaust for tof the rocket engine during propellant feeling. MHI has taken the steps necessary to correct for this problem, and say that the rocket and launch facilities are now fully functional and ready to go for this renewed launch attempt.

The H-IIB rocket used for this launch (the configuration of MHI’s M-II series rocket that has the highest lift capacity) will carry supplies, as mentioned, as well as a cubesat launcher with a number of small satellite payloads for various academic and commercial customers. The H-IIB features one central booster and engine with liquid oxygen propellant, and four solid fuel boosters attached to the base of the rocket for additional lift. It can transfer up to 18,000 lbs to geostationary transfer orbit.

This is the second to last mission for the H-IIB, with its final mission planned for next year. After that, MHI has been hard at work on the H3, a fully expendable launch vehicle currently under development that’s specifically aimed at serving more commercial customers with total launch costs that are more or less on par with emerging competitors like SpaceX for medium heavy payloads.

Lookiero, the online personal shopping service for clothes and accessories, has closed a $19 million funding round led by London-based VC MMC Ventures with support from existing investor All Iron Ventures, and new investors Bonsai Partners, 10x and Santander Smart. The company will use the backing to expand in its main markets of Spain, France and the UK. In June last year it closed a funding round of €4 million led by All Iron Ventures.

The startup applies algorithms to a database of personal stylists and customer profiles to thus provide a personalized online shopping experience to its customers. It then delivers a selection of five pieces of clothing or accessories curated by a personal shopper to fit the customer’s individual size, style, and preferences. Customers then decide which items to keep or return (at no additional cost), allowing Lookiero to learn more about the customer’s tase before starting the whole process again.

By generating look-a-like profiles and analyzing previous customer interactions with each item, Lookiero says it can predict how likely a user is going to keep a certain item from a range of more than 150 European brands from a warehousing system that will ship more than 3 million items of clothing this year to seven European countries.

It’s not unlike the well—worn Birchbox model. Lookiero’s main competitor is Stitch Fix (US), which has upwards of $1.5bn in annual revenues and IPO’d November 2017.

Founded in 2015 by Spanish entrepreneur Oier Urrutia, the company says it now has over 1 million registered users and has grown revenue by over 200% from 2017 to 2018.

In a statement Urrutia said: “This investment round provides us with the necessary capital to further increase the accuracy of our technology, which is really exciting. It will allow us to offer the best possible experience for our users and to continue expanding across Europe.”

Simon Menashy, Partner, MMC Ventures, said: “The migration of fashion brands online has improved consumers’ access to clothing, and there is now an almost overwhelming amount of choice. At the same time, it can still be really hard to find exactly what is right for you, especially with high street retail stores in decline. Lookiero provides the best of both worlds, giving every customer a hand-picked selection from their personal stylist.”

Ander Michelena, co-founding partner of All Iron Ventures, said: “Even if what Oier and his team have achieved to date is remarkable, we believe that Lookiero still has great potential to continue expanding internationally and to become a player of reference in a market segment where there is still a lot to do in terms of innovation and user satisfaction”.

You don’t see a startup get a $50 million seed round all that often, but such was the case with Vianai, an early stage startup launched by Vishal Sikka, former Infosys managing director and SAP executive. The company launched recently with a big check and a vision to transform machine learning.

Just this week, the startup had a coming out party at Oracle Open World where Sikka delivered one of the keynotes and demoed the product for attendees. Over the last couple of years, since he left Infosys, Sikka has been thinking about the impact of AI and machine learning on society and the way it is being delivered today. He didn’t much like what he saw.

It’s worth noting that Sikka got his Ph.D. from Stanford with a specialty in AI in 1996, so this isn’t something that’s new to him. What’s changed, as he points out, is the growing compute power and increasing amounts of data, all fueling the current AI push inside business. What he saw when he began exploring how companies are implementing AI and machine learning today, was a lot of complex tooling, which in his view, was far more complex than it needed to be.

He saw dense Jupyter notebooks filled with code. He said that if you looked at a typical machine learning model, and stripped away all of the code, what you found was a series of mathematical expressions underlying the model He had a vision of making that model-building more about the math, while building a highly visual data science platform from the ground up.

The company has been iterating on a solution over the last year with two core principles in mind: explorability and explainability, which involves interacting with the data and presenting it in a way that helps the user attain their goal faster than the current crop of model-building tools.

“It is about making the system reactive to what the user is doing, making it completely explorable, while making it possible for the developer to experiment with what’s happening in a in a way that is that is incredibly easy. To make it explainable, means being able to go back and forth with the data and the model, using the model to understand the phenomenon that you’re trying to capture in the data,” Sikka told TechCrunch.

He says the tool isn’t just aimed at data scientists, it’s about business users and the data scientists sitting down together and iterating together to get the answers they are seeking, whether it’s finding a way to reduce user churn or discover fraud. These models do not live in a data science vacuum. They all have a business purpose, and he believes the only way to be successful with AI in the enterprise is to have both business users and data scientists sitting together at the same table working with the software to solve a specific problem, while taking advantage of one another’s expertise.

For Sikka, this means refining the actual problem you are trying to solve. “AI is about problem solving, but before you do the problem solving, there is also a [challenge around] finding and articulating a business problem that is relevant to businesses and that has a value to the organization,” he said.

He is very clear, that he isn’t looking to replace humans, but instead wants to use AI to augment human intelligence to solve actual human problems. He points out that this product is not automated machine learning (AutoML), which he considers a deeply flawed idea. “We are not here to automate the jobs of data science practitioners. We are here to augment them,” he said.

As for that massive seed round, Sikka knew it would take a big investment to build a vision like this, and with his reputation and connections, he felt it would be better to get one big investment up front, and he could concentrate on building the product and the company. He says that he was fortunate enough to have investors who believe in the vision, even though as he says, no early business plan survives the test of reality.

For now, the company has a new product and plenty of money in the bank to get to profitability, which he states is his ultimate goal. Sikka could have taken a job running a large organization, but like many startup founders, he saw a problem, and he had an idea how to solve it. That was a challenge he couldn’t resist pursuing.

Enterprise-focused startup accelerator Alchemist is expanding its footprint this morning with the launch of an initiative focused on European startups.

While Alchemist was happy to accept European companies into their US program before — they tell me they’ve had about 25 European startups go through Alchemist already — it hasn’t been a focus.

With the aptly named Alchemist Europe, Alchemist will be opening up an office in Munich and bringing in its first Europe-focused cohort. Alchemist expects this first class of companies to debut with its first Europe Demo Day sometime in early 2020.

Like Alchemist US, Alchemist Europe will focus on enterprise companies and teams that make their money from corporations. More specifically, Alchemist says in its announcement of the program that the European base will specialize in “Industry 4.0, robotics, mobility, power generation and distribution, industrial artificial intelligence and virtual reality”

Ethan Prater, formerly the VP of Product for Castlight Health, will be heading up the Europe division as its Managing Director.

So why expand now? Alchemist US managing director Ravi Belani tells me its because they’ve now sufficiently built out their network and internal software to sufficiently support European companies “with the full experience of the US program, remotely.”

And it helps that they’ve found a pretty significant partner in the region. Alchemist is building out this European initiative in a partnership with Next47 — the VC/investing arm of European mega co. Siemens, which also happens to be headquartered in Munich.

I’m told Next47 has committed $2.5 million to Alchemist as part of the deal, and has reserved an additional $2.5 million for potential further investment.

Alchemist Accelerator in the US, meanwhile, is just about to wrap up its latest class. It’ll host its 22nd demo day today, with 23 companies launching in all. They’ll have a livestream of the event here, with presentations beginning at 3 PM Pacific.

Google announced today that it was investing 3 billion euro (approximately $3.3 billion USD) to expand its data center presence in Europe. What’s more, the company pledged the data centers would be environmentally friendly.

This new investment is in addition to the $7 billion the company has invested since 2007 in the EU, but today’s announcement was focused on Google’s commitment to building data centers running on clean energy, as much as the data centers themselves.

In a blog post announcing the new investment, CEO Sundar Pichai, made it clear that the company was focusing on running these data centers on carbon-free fuels, pointing out that he was in Finland today to discuss building sustainable economic development in conjunction with a carbon-free future with prime minister Antti Rinne.

Of the 3 billion Euros, the company plans to spend, it will invest 600 million to expand its presence in Hamina, Finland, which he wrote “serves as a model of sustainability and energy efficiency for all of our data centers.” Further, the company already announced 18 new renewable energy deals earlier this week, which encompass a total of 1,600-megawatts in the US, South America and Europe.

In the blog post, Pichai outlined how the new data center projects in Europe would include some of these previously announced projects:

Today I’m announcing that nearly half of the megawatts produced will be here in Europe, through the launch of 10 renewable energy projects. These agreements will spur the construction of more than 1 billion euros in new energy infrastructure in the EU, ranging from a new offshore wind project in Belgium, to five solar energy projects in Denmark, and two wind energy projects in Sweden. In Finland, we are committing to two new wind energy projects that will more than double our renewable energy capacity in the country, and ensure we continue to match almost all of the electricity consumption at our Finnish data center with local carbon-free sources, even as we grow our operations.

The company is also helping by investing in new skills training, so people can have the tools to be able to handle the new types of jobs these data centers and other high tech jobs will require. The company claims it has previously trained 5 million people in Europe for free in crucial digital skills, and recently opened a Google skills hub in Helsinki.

It’s obviously not a coincidence that company is making an announcement related to clean energy on Global Climate Strike Day, a day when people from around the world are walking out of schools and off their jobs to encourage world leaders and businesses to take action on the climate crisis. Google is attempting to answer the call with these announcements.

Another startup in India is cashing in on the popularity of WhatsApp, the most popular app in the country with more than 400 million users, to build a business around it.

Digi-Prex is a seven-month old startup that runs an eponymous online subscription pharmacy in Hyderabad and serves patients with chronic diseases. Patients share their prescription with Digi-Prex through WhatsApp and the startup’s workers then deliver the medication to them on a recurring cycle.

Delivery is not the only thing Digi-Prex is trying to provide. It helps patients better track when they need a new supply of medicine, and checks if they are seeing improvements. The startup has amassed thousands of customers in Hyderabad, Samarth Sindhi, founder of Digi-Prex, told TechCrunch in an interview.

Digi-Prex just closed its seed round from a range of highly-influential VC firms. It’s also one of the largest seed financing rounds for an Indian startup.

The startup has raised $5.5 million from Khosla Ventures, Vedanta Capital, Y Combinator, Quiet Capital, and SV Angel. Justin Mateen, a founder of Tinder, also participated in the round, said Sindhi.

“Instead of trying to acquire customers online, we work with physicians and pharmacies to serve customers,” said Sindhi, an alum of Brown University who worked with a healthcare firm in the U.S. before returning to India. The startup shares some margin with physicians and pharmacies, but more importantly, it says this arrangement works for everyone because it is able to serve customers who are living at distant neighborhoods.

Digi-Prex works directly with medicine distributors to secure supplies at lower costs. It then undercuts the pricing of over-the-top counters, providing medicines to its customers at discounted rates.

Sindhi said the startup will use the fresh capital to expand its business to 10 cities in India, and find ways to be more useful to the patients. Some of the things that Digi-Prex is working on includes providing patients with access to better physicians and offering them more information about their disease.

It’s not surprising why Digi-Prex is using WhatsApp as a distribution platform. “When I returned to India, I was fascinated by how nobody was texting anymore. Everyone was doing everything on WhatsApp,” he said.

WhatsApp, which is already the most popular app in India, is increasingly finding business applications in the country. Vahan, another Y Combinator-backed startup, is using WhatsApp to help white-collar workers find jobs with logistics companies.

Another startup in India is cashing in on the popularity of WhatsApp, the most popular app in the country with more than 400 million users, to build a business around it.

Digi-Prex is a seven-month old startup that runs an eponymous online subscription pharmacy in Hyderabad and serves patients with chronic diseases. Patients share their prescription with Digi-Prex through WhatsApp and the startup’s workers then deliver the medication to them on a recurring cycle.

Delivery is not the only thing Digi-Prex is trying to provide. It helps patients better track when they need a new supply of medicine, and checks if they are seeing improvements. The startup has amassed thousands of customers in Hyderabad, Samarth Sindhi, founder of Digi-Prex, told TechCrunch in an interview.

Digi-Prex just closed its seed round from a range of highly-influential VC firms. It’s also one of the largest seed financing rounds for an Indian startup.

The startup has raised $5.5 million from Khosla Ventures, Vedanta Capital, Y Combinator, Quiet Capital, and SV Angel. Justin Mateen, a founder of Tinder, also participated in the round, said Sindhi.

“Instead of trying to acquire customers online, we work with physicians and pharmacies to serve customers,” said Sindhi, an alum of Brown University who worked with a healthcare firm in the U.S. before returning to India. The startup shares some margin with physicians and pharmacies, but more importantly, it says this arrangement works for everyone because it is able to serve customers who are living at distant neighborhoods.

Digi-Prex works directly with medicine distributors to secure supplies at lower costs. It then undercuts the pricing of over-the-top counters, providing medicines to its customers at discounted rates.

Sindhi said the startup will use the fresh capital to expand its business to 10 cities in India, and find ways to be more useful to the patients. Some of the things that Digi-Prex is working on includes providing patients with access to better physicians and offering them more information about their disease.

It’s not surprising why Digi-Prex is using WhatsApp as a distribution platform. “When I returned to India, I was fascinated by how nobody was texting anymore. Everyone was doing everything on WhatsApp,” he said.

WhatsApp, which is already the most popular app in India, is increasingly finding business applications in the country. Vahan, another Y Combinator-backed startup, is using WhatsApp to help white-collar workers find jobs with logistics companies.

The world of on-demand storage has seen some ups and downs, with some of the biggest hopefuls pivoting into new areas, some as unrelated as cryptocurrency, in the search for better product-market fit. One that found its groove early on, however, is today announcing an acquisition to expand its existing business into a new market category. Clutter, the on-demand removals and storage company backed by SoftBank, is today announcing that it has acquired The Storage Fox, a startup that will spearhead Clutter’s expansion in to self-storage services in urban locations, starting first in the New York metro area where The Storage Fox is currently active.

The deal is valued at $152 million, Clutter said. Ari Mir, Clutter’s co-founder and CEO, added in an interview that  Clutter did not need to raise any extra funding to finance this acquisition, but said his company is likely to be taking on more financing in the future for growth.

To date, Clutter has raised $310 million, according to PitchBook, including a $200 million round earlier this year led by SoftBank that valued the company at $600 million post-money. Future financing is likely to come in the form of debt to acquire property, as well as equity to expand the business’s platform, hiring and more. It’s currently active in 1,000 cities and towns across the US and the plan will be to stay domestic until it has wider penetration, before exploring how to grow internationally. The deal will bring the total amount of space that Clutter leases and owns up to two million square feet.

“Expanding into self-storage is something we have been discussing since Clutter’s Series A pitch to Sequoia and we are excited to see it come to fruition,” said Omar Hamoui, partner at Sequoia Capital, in a statement. “The acquisition reinforces Clutter’s market leadership and expands Clutter services by offering a better experience for customers who need self-storage or on-demand storage.”

(Notably, too, is that Clutter had to actively bid for this business: “Portfolios like that of The Storage Fox are extremely rare, and this acquisition signals that Clutter is uniquely positioned to take on and succeed in the self-storage industry,” said Eliav Dan, Head of West Coast Real Estate Finance at Barclays, which acted as Clutter’s exclusive financial advisor, in a statement. “Clutter competed with multiple self-storage REITs throughout the bidding process to win the deal — a testament to the strength of the company’s management team and its ability to execute on an innovative business model.”)

Up to now, Clutter business has focused on extending the on-demand model — which has become a cornerstone for a huge wave of e-commerce startups that are tapping into new innovations for managing logistics, the rise of the gig-economy, the proliferation of smartphones, and consumer tastes for instant gratification — to the messy business of helping people move and store their worldly possessions, from which Clutter makes revenues by charging service fees.

Customers might typically be urban dwellers — for example moving to smaller digs or simply looking for a way to, yes, de-Clutter — but the storage centers themselves tend to be far outside city centers. On top of this, Clutter has largely operated on a long-term lease model with the facilities that it uses.

In that regard, this acquisition will be giving the company a couple of interesting new possessions of its own, to tap the self-storage market, estimated to be worth $40 billion annually.

The Storage Fox’s facilities, like other self-storage businesses, are located in areas that are much closer to urban centers, since the model is predicated more on people being able to dip in and out of their storage units quickly and potentially very regularly. In its case, its facilities today are in Yonkers, White Plains, Queens and Brooklyn.

It will also give Clutter a trove of real estate that it will now own: The Storage Fox didn’t appear to raise any traditional VC funding, but it did have large finance agreements in place in order to buy property. That is a pattern that Clutter is likely to continue, Mir said.

Now that there will be more accessible space on Clutter’s platform that it actually owns, it will also give the company a point of entry into a new potential range of business services alongside the self-storage. Could that extend into something like office space, potentially pitting Clutter against one of its portfolio neighbors, WeWork? Mir declined to answer specifically but we’ve seen some outlier cases — such as this guy who lived out of his storage unit — that, while not exactly okay for a number of reasons, does underscore that there is a lot of potential there.

“There are over 52,000 self-storage facilities in the US alone,” Mir said. “If you take all that and add it up, there are more square feet in those storage spaces than there are in McDonald’s and Starbucks in the US, combined. At the same time, inside of cities, we’re running out of space. So our vision is to apply all the technology that we’ve built in house to increase the value that these self-storage facilities provide across society.”

Clutter has already made some moves beyond simple storage in its existing business: it’s already actively advertising the option to rent, sell, donate and dispose of your items if you choose — although it seems that these four services are not yet actively live. Earlier this year, it acquired the storage business of Omni, which itself is currently focusing on rentals.

Storage over all has not been an easy area to tackle for a lot of reasons: on top of the usual issues of needing to ensure that the contractors — the face and engine of your business — are responsible and good at their jobs, the cargo can be unexpectedly large or fragile, and the movement of it might be tied up in all kinds of backstories that make getting from A to B and eventually back to the owner again very complicated.

Mir concedes that the customer satisfaction aspect has been challenging: it’s one of those areas that people are quick to publicly complain when something has gone awry. He also insists that its ratings and Clutter’s efforts are generally improving, and frankly it’s great to hear him be honest about this and not deny that criticism is a challenge and that the company is always working to make this better.