Month: September 2020

Who needs caffeine after day one of Disrupt 2020? Don’t know about you, but we’re flying high on entrepreneurial euphoria. Are you buckled in and ready to take on day two? Let’s look at just some of the events of the day. You’ve got your work — and fun — cut out for you trying to take in all the stellar startup goodness. Remember, this is merely a taste — you’ll find all the action listed in the Disrupt 2020 agenda. Note: unless otherwise stated, all times are PST.

We have a terrific bunch of breakout sessions scheduled throughout Disrupt. Case in point: Want to create meaningful change in your organization? Don’t miss this timely topic — Diversity as Disruption: Take action now to create a more diverse ecosystem with BBG Ventures’ Nisha Dua; SVB Capital’s Jennifer Friel Goldstein; Moxxie Ventures’ Katie Stanton; and Harlem Capital Partners’ Jarrid Tingle. Hosted by Silicon Valley Bank (9:00 a.m. – 9:50 a.m.).

You’re no longer limited to presenting a pitch deck IRL, and that changes everything. Head over to the Extra Crunch Stage to learn How to Craft Your Pitch Deck for 2020. Sequoia Capital India’s Rajan Anandan; Floodgate’s Ann Miura-Ko; and Plexo Capital’s Lo Toney discuss the latest tactics founders are using around the world (9:45 a.m. – 10:30 a.m.).

Who in the startup world wouldn’t want a crystal ball to gain a better understanding of what’s to come? Well, we don’t have one, but we do have the next best thing. Join Roelof Botha, U.S. head of Sequoia Capital, on the Disrupt Stage for Looking into the Future (9:45 a.m. – 10:05 a.m.).

When you think “startup cred” you can’t help but think about Drew Houston. Head to the Disrupt Stage for Thinking Outside the Dropbox and hear what the super-founder’s company is doing to expedite digital transformation (9:45 a.m. – 10:05 a.m.).

Every early-stage startup founder needs to make it rain — the harder the better. But knowing when and how to start ain’t easy, and one misstep can really set you back. Do you fit the description? Then show up for How to Raise Your First Dollars over at the Extra Crunch Stage with Inspired Capital Partners’ Alexa von Tobel; Homebrew’s Hunter Walk; and Cowboy Ventures’ Ted Wang (12:00 p.m. – 12:45 p.m.).

Don’t miss the world-premiere of the documentary film, Speed of Thought: The First 5G Visionaries on the Disrupt Stage. Industry leaders — Movers and Shakers NYC’s Glenn Cantave and Idris Brewster, along with Verizon Communications’ Sanyogita Shamsunder — will discuss the urgent need for 5G tech and solutions (1:30 p.m. – 3:20 p.m.). Brought to you by Verizon.

That should whet your appetite and keep you excited, informed and connected. We still have passes available to get onto the platform and join the community or you can upgrade your Disrupt Digital Pass to a Digital Pro Pass for even more access. Opportunity’s pounding on the door…go open it!

Trying to outflank competition from neo banks and other potential challengers, two of Brazil’s largest financial services institutions, Bradesco and Itaú Unibanco, have invested in Quanto, a company developing technology to let retailers and other businesses access financial information and services.

Joining Brazil’s two largest banks are Kaszek Ventures, one of Latin America’s largest venture capital firms, and Coatue, the multi-billion dollar hedge fund. 

Bradesco joined the round through its InovaBra Ventures investment fund while Itaú invested directly and had its participation approved by Brazil’s Central Bank, according to a statement.

“Open banking changes the way we understand and consume financial services, but it’s quite exciting to see the Brazilian market embracing this new moment in such a positive way,” said Richard Taveira, Quanto’s chief executive, in a statement. “Brazil has the potential to lead the use of open banking worldwide, and this round is a testament to that.”

Brazil’s Central Bank is deeply invested in the prospect of opening up banking regulation to allow information and data sharing between payment processors and technology providers, retailers, and other service providers in the financial services value chain.

Quanto, which provides standardized bank data application programming interfaces that allow institutions to slash the time it takes to ccess bank account data.

The Quanto technology could enable financial product distribution through the same API platform as business to business services, the company said. Quanto claims that its services will make it easier for customers to access low-interest credit lines with a single sign-on model and to receive competitive interest rates by sharing banking data with multiple lenders in a single flow.

“Quanto provides the rail for banks and fintechs to compete, and consumers are the ones who win”, said Taveira.

Welcome to Tuesday of TechCrunch Disrupt week. In a few hours, I’m hosting a panel about how startups can reach $100 million in annual recurring revenue (ARR) with the CEOs of Egnyte, GitLab and the President of Kaltura. It’s going to be a jam. Bring your questions!

Right now, however, let’s talk about some bigger companies, namely all the unicorns that are going public this week. We can set aside Corsair Gaming, Palantir and Asana, as they debut next week. This morning let’s get settled on what’s ahead for JFrog, Snowflake, Sumo Logic and Unity.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

We explored the most recent pricing ranges for Snowflake and JFrog yesterday, helping set the stage. With both companies setting new, richer price targets for their debuts, the technology market looks hot. That’s good news for Sumo Logic and Unity, which should also begin trading this week.

Read on for your cheat sheet on all things upcoming from the realm of IPOs, and, in response to Twitter kerfuffle, notes on why Snowflake is seeing such investor demand despite a history of losses. It’s a good day to remind ourselves why some losses are very bad and others are pretty OK, given a certain set of circumstances.

Big-ass IPO week

After trading today we expect to see JFrog and Snowflake price their IPOs. As a quick reminder, this is what the two companies are expecting, starting with developer-focused service provider JFrog:

• Price target: $39 to $41 per share
• Implied valuation range: $3.46 billion to $3.64 billion, discounting underwriters’ shares
• Final private valuation: $1.0 billion
  
  

As medical providers across the world turn to digital delivery of consultations and services, OnCall Health a Toronto-based provider of back-end services for telemedicine is having a moment.

The company, which competes with services like Truepill to offer physicians, pharmacies and other potential point of care services a way to consult online, has grown exceptionally quickly since the onset of the COVID-19 pandemic.

OnCall Health’s services include the ability to schedule a video or text appointment with a physician, hosting those video consultations on its secured servers, and the integration of back end billing systems so physicians can get paid.

Services like OnCall and TruePill’s have increased exponentially since the advent of lockdown orders put in place to combat the COVID-19 pandemic. In a sign of how hungry investors are for these kinds of deals, Truepill just raised $75 million to expand its own health services offerings.

“Since COVID-19, telemedicine has shifted from a nice-to-have revenue source for primary care, mental health, and home care and chronic conditions to a need-to-have,” said Base10 Partners principal Chris Zeoli, who led the investment into OnCall.

Joining Base10 in its $6 million investment into OnCall were several existing investors from the company’s $2 million seed round, including Ripple Ventures, Panache Ventures, and Stout Street Capital.

The bulk of the company’s customers come from small and medium-sized physician’s practices, according to Zeoli. Roughly 500 of the company’s existing customers consist of offices with less than ten practicing doctors.

Capturing this long tail is important because it actually represents a huge proportion of healthcare providers.

“OnCall provides everything that healthcare brands like pharmaceutical companies, insurers, and direct to consumer digital health startups need to get into the space and launch their own virtual care programs, often for the first time,” said Nicholas Chepesiuk, founder and CEO of OnCall Health. “Meanwhile, we are well positioned to help conventional healthcare clinics and systems adopt virtual care technology in the context of their operational processes. In the past year we have been able to roll out our technology with two global insurance companies, several leading pharmaceutical brands, and many rapidly growing digital health startups.”

OnCall now has over 30 employees and supports 7,000 primary care, mental health, and paramedical service providers across North America.

As medical providers across the world turn to digital delivery of consultations and services, OnCall Health a Toronto-based provider of back-end services for telemedicine is having a moment.

The company, which competes with services like Truepill to offer physicians, pharmacies and other potential point of care services a way to consult online, has grown exceptionally quickly since the onset of the COVID-19 pandemic.

OnCall Health’s services include the ability to schedule a video or text appointment with a physician, hosting those video consultations on its secured servers, and the integration of back end billing systems so physicians can get paid.

Services like OnCall and TruePill’s have increased exponentially since the advent of lockdown orders put in place to combat the COVID-19 pandemic. In a sign of how hungry investors are for these kinds of deals, Truepill just raised $75 million to expand its own health services offerings.

“Since COVID-19, telemedicine has shifted from a nice-to-have revenue source for primary care, mental health, and home care and chronic conditions to a need-to-have,” said Base10 Partners principal Chris Zeoli, who led the investment into OnCall.

Joining Base10 in its $6 million investment into OnCall were several existing investors from the company’s $2 million seed round, including Ripple Ventures, Panache Ventures, and Stout Street Capital.

The bulk of the company’s customers come from small and medium-sized physician’s practices, according to Zeoli. Roughly 500 of the company’s existing customers consist of offices with less than ten practicing doctors.

Capturing this long tail is important because it actually represents a huge proportion of healthcare providers.

“OnCall provides everything that healthcare brands like pharmaceutical companies, insurers, and direct to consumer digital health startups need to get into the space and launch their own virtual care programs, often for the first time,” said Nicholas Chepesiuk, founder and CEO of OnCall Health. “Meanwhile, we are well positioned to help conventional healthcare clinics and systems adopt virtual care technology in the context of their operational processes. In the past year we have been able to roll out our technology with two global insurance companies, several leading pharmaceutical brands, and many rapidly growing digital health startups.”

OnCall now has over 30 employees and supports 7,000 primary care, mental health, and paramedical service providers across North America.

Today, Social Capital Hedosophia II, the blank-check company associated with investor Chamath Palihapitiya, announced that it will merge with Opendoor, taking the private real estate startup public in the process.

The transaction comes during a wave of market interest in special purpose acquisition companies, or SPACs, often called blank-check companies. They exist as publicly traded entities in search of a private company to combine with, taking the private entity public without the hassle of an IPO.

In this case, the SPAC Social Capital Hedosophia II is combining with Opendoor, a richly-valued private technology company that operates in the real-estate market.

“This is one of many milestones towards our mission and will help us accelerate the path towards building the digital one-stop-shop to move,” Eric Wu, co-founder and CEO of Opendoor said to TechCrunch in a statement. “I am grateful for the continued support from my teammates and shareholders and most thankful for the tens of thousands – and I hope soon to be hundreds of thousands – of families, couples and individuals that trust Opendoor with the largest financial decision of their life.”

Palihapitiya, and his press team did not immediately respond to requests for comment from TechCrunch over phone and e-mail.

Shares of Social Capital Hedosophia II, which trade under the ticker symbol IPOB, were up around 14% in pre-market trading this morning.

According to a notice associated with the transaction, Opendoor will have an enterprise value of $4.8 billion in the deal, including equity value of around $6.2 billion and around $1.5 billion in cash. Social Capital Hedosophia II will provide “up to” $414 million in cash as part of the deal, while a private investment in public equity transaction, or PIPE, will provide another $600 million.

Some $200 million of the $600 million PIPE, or a third, will be funded by investors in the SPAC, with Chamath Palihapitiya himself providing $100 million.

Palihapitiya is not subtle about his plans to use SPACs to pursue his ambitions to be the next Berkshire Hathaway. He famously brought Virgin Galactic to the public markets through a SPAC, which played a role in the $1.7 billion profit that Social Capital made in 2019.

If not acquiring a public through a SPAC, he’s also used personal capital to take majority stakes in businesses. When describing his appetite for acquisitions, he put it curtly to TechCrunch: “I like businesses that build non-obvious data links.”

The rest of the PIPE will be funded by another Palihapitiya group, some private entities like Access Industries, and what a release hyped as “top-tier institutional investors” including Blackrock and a pension plan.

A total of $1 billion in cash is expected to be provided in the transaction. Notably all the cash will flow to Opendoor itself, with shareholders in the company “rolling 100 percent of their equity into the combined company,” per a notice. Along with the transaction, Adam Bain, former Twitter COO and founder of 01 advisors, will join the board, CNBC reports.

Opendoor last raised $300 million at a $3.5 billion pre-money valuation in March of 2019. Of that, $1.3 billion was in equity with nearly $3 billion in debt financing. Investors in the company include General Atlantic, the SoftBank Vision Fund, NEA, Norwest Venture Partners, GV, GGV Capital, Access Technology Ventures, SV Angel, Fifth Wall Ventures, along with others.

One of the three companies chosen by NASA to create a Human Landing System (HLS) for NASA has completed a key step by building a full-scale test article of its lander for its team and NASA to evaluate and review. The Dynetics HLS is roughly the size of the Apollo Moon lander, but it’s laid out very differently, as you can see in the image above.

Dynetics provided a brief overview of the test article and its purpose in a video introduction on Tuesday. As you can see in the walkthrough below, it’s essentially a true-to-size 3D model that includes modular, re-arrangeable components. These don’t include actual working electronics or anything – they’re more like lego blocks that NASA and the Dynetics engineers working on the product can use together to ensure that the HLS design works well ergonomically and functionally for the astronauts who will eventually be using it to make the trip down to the lunar surface.

The components of this test article include the crew module where astronauts will be living and working during their stay at the Moon, as well as the tanks that will hold the propellant fo r the ascent and descent phases of its flight, a autonomous cargo platform, and the tall solar arrays that will help power the spacecraft. Dynetics and its subcontractor LSINC created the mock vehicle in just three months after being awarded the contract by NASA.

The goal for Dynetics, as well as for Blue Origin and SpaceX, is to compete with one another for the initial contract to take humans to the surface of the Moon for NASA’s initial human landing as part of its Artemis program, currently scheduled for 2024. Earlier this week, Blue Origin announced that it had passed a critical initial design requirements review, and Dynetics says it has accomplished the same. Blue Origin also delivered a full scale test article of its own to NASA back in August.

Brightseed, the company launched by former Hampton Creek head of research and development, Jim Flatt, to identify the presence of specific nutrients in plants that are believed to boost human health, has raised $27 million in its latest round of funding, the company said.

Brightseed will use the financing, in part, to complete clinical studies to prove out the benefits of phytonutrients and the claims that the company and its partners are looking to make.

The company’s first product is a phytonutrient compound believed to be beneficial to metabolic health and a way to manage and treat fatty liver disease.

Using the company’s machine learning platform called “Forager”, Brightseed can identify the presence of phytonutrients in species of plants. Those plants can then be cultivated or their compounds manufactured to produce ingredients for consumer foods.

It’s a variation on the thesis Flatt developed at Hampton Creek. There the idea was to use machine learning to identify combinations of plant proteins that could be used to make protein replacement products for traditional animal-derived foods. 

Instead of looking at protein replacements broadly, Flatt has shifted the focus at Brightseed to concentrate on human health and functional ingredients — chiefly these phytonutrients. “The strength and the power of nutrition is to make modest changes over a long period of time that have important health benefits,” said Flatt in an interview. 

To make his case, Flatt pointed to a study from Geisinger that followed pre-diabetic patients and showed how their conditions could be controlled and improved by concentrating on their metabolic health.

“With patients that spent $200 on whole foods… they saw a 40 percent reduction in their A1c levels [and] that’s more than double what the existing class drugs can achieve,” said Flatt. “From an economic perspective they reduced their cost of healthcare by 80% thanks to lower hospitalizations and insulin use.”

Brightseed intends to bring its own ingredient discoveries to market itself but will work with partners using the Forager system to collaborate on new ingredient discoveries that can be shared with producers, Flatt said.

The dual path to market is likely one of the reasons why Brightseed was able to raise new capital from Lewis & Clark AgriFood and previous investors including Seed 2 Growth Ventures, Horizons Ventures, CGC Ventures, Fifty Years, Germin8, and AgFunder. 

“This capital raise is  going to really allow us to really accelerate that exploration of the dark matter of nutrition. All of these phytonutrients that we know exist,” said Flatt. “This forager AI platform that we’ve built… we’ve developed a proprietary library that’s about 5 times what the world knows [and] one of the powers of Forager is as we do find known or new compounds we’re able to predict their utility with respect to health.”

The company already has one major partnership in place with Danone North America, which it announced earlier this year.

“As a leader in plant-based food and beverages, Danone North America values external partnerships that can help us improve and optimize the taste, texture and nutritional aspects of our products, and contribute to our biodiversity vision.” said Takoua Debeche, SVP Research & Innovation at Danone North America, in a statement at the time. 

Forager’s nutrient identification technology also has implications far beyond ingredient science, said Flatt.

“What forager can do is really help create what we’ll call a virtuous cycle to incentivize adoption of a more biodiverse food supply chain and to move towards more regenerative agricultural practices and we do this by revealing the hidden qualities or benefits of some of these lesser known crops and highlighting why they can be of greater value and tell a story,” he said.  

For instance, Brightseed is already partnering with a company to evaluate an underutilized superfruit and work on improving and boosting its cultivation.

“There’s some albeit limited data that shows that agricultural practices can influence these phytonutrient contents. What Forager does is help valorize those phyotnutrients and creates a story that helps drive consumer adoption and demand for more restorative products that are produced with more regenerative agricultural practices that lead to more nutrients in crops,” Flatt said. 

Although the company’s revenues are currently hovering under $10 million, Flatt and his investors expect that to change rapidly.

“Brightseed’s application of technology is transforming how we understand the resources available for our health and well-being in nature,” said Dr. David Russell, Operating Partner at Lewis & Clark AgriFood, in a statement. “These discoveries already have a major impact on ingredient selection and how we’re formulating the things we consume every day. This is a new approach that provides a much deeper understanding of the biological connections between plants and people. We’re looking forward to supporting Brightseed in leading these breakthroughs.”

Formlabs was one of a few desktop 3D printing companies to weather the massive tech bubble a few years back. The Somerville, Massachusetts-based company set itself apart by bringing advanced industrial 3D-printing technologies to the consumer space. In recent years, the tech has also positioned the startup ahead of the competition when it comes to expanding into different manufacturing aspects.

Medical and dental have been two key targets. Products like prosthetics and retainers are two prime exemplars of products that can benefit from both customization and speedy manufacturing. Today, the company announced the Form 3BL, a medical and dental-focused take on the recently announced Form 3L, its $10,000 large-format stereolithography printer.

The Form 3BL shares most of the 3L’s specs, including a build volume that’s roughly five times larger than the standard Form 3 printer. The biggest differentiator is optimization for biocompatible materials. The system is designed to be used in-office for healthcare providers and dental providers to produce models and dental needs quickly in-house.

Also new today is the Wash L + Cure L, for treating large-scale objects after initial printing. That’s set to ship at some point in 2021. The Form 3L actually starts shipping today, meanwhile, and the 3BL is up for pre-order today and will ship at some point next month.

Varada, a Tel Aviv-based startup that focuses on making it easier for businesses to query data across services, today announced that it has raised a $12 million Series A round led by Israeli early-stage fund MizMaa Ventures, with participation by Gefen Capital.

“If you look at the storage aspect for big data, there’s always innovation, but we can put a lot of data in one place,” Varada CEO and co-founder Eran Vanounou told me. “But translating data into insight? It’s so hard. It’s costly. It’s slow. It’s complicated.”

That’s a lesson he learned during his time as CTO of LivePerson, which he described as a classic big data company. And just like at LivePerson, where the team had to reinvent the wheel to solve its data problems, again and again, every company — and not just the large enterprises — now struggles with managing their data and getting insights out of it, Vanounou argued.

Image Credits: Varada

The rest of the founding team, David Krakov, Roman Vainbrand and Tal Ben-Moshe, already had a lot of experience in dealing with these problems, too, with Ben-Moshe having served at the Chief Software Architect of Dell EMC’s XtremIO flash array unit, for example. They built the system for indexing big data that’s at the core of Varada’s platform (with the open-source Presto SQL query engine being one of the other cornerstones).

Image Credits: Varada

Essentially, Varada embraces the idea of data lakes and enriches that with its indexing capabilities. And those indexing capabilities is where Varada’s smarts can be found. As Vanounou explained, the company is using a machine learning system to understand when users tend to run certain workloads and then caches the data ahead of time, making the system far faster than its competitors.

“If you think about big organizations and think about the workloads and the queries, what happens during the morning time is different from evening time. What happened yesterday is not what happened today. What happened on a rainy day is not what happened on a shiny day. […] We listen to what’s going on and we optimize. We leverage the indexing technology. We index what is needed when it is needed.”

That helps speed up queries, but it also means less data has to be replicated, which also brings down the cost. AÅs Mizmaa’s Aaron Applebaum noted, since Varada is not a SaaS solution, the buyers still get all of the discounts from their cloud providers, too.

In addition, the system can allocate resources intelligently to that different users can tap into different amounts of bandwidth. You can tell it to give customers more bandwidth than your financial analysts, for example.

“Data is growing like crazy: in volume, in scale, in complexity, in who requires it and what the business intelligence uses are, what the API uses are,” Applebaum said when I asked him why he decided to invest. “And compute is getting slightly cheaper, but not really, and storage is getting cheaper. So if you can make the trade-off to store more stuff, and access things more intelligently, more quickly, more agile — that was the basis of our thesis, as long as you can do it without compromising performance.”

Varada, with its team of experienced executives, architects and engineers, ticked a lot of the company’s boxes in this regard, but he also noted that unlike some other Israeli startups, the team understood that it had to listen to customers and understand their needs, too.

“In Israel, you have a history — and it’s become less and less the case — but historically, there’s a joke that it’s ‘ready, fire, aim.’ You build a technology, you’ve got this beautiful thing and you’re like, ‘alright, we did it,’ but without listening to the needs of the customer,” he explained.

The Varada team is not afraid to compare itself to Snowflake, which at least at first glance seems to make similar promises. Vananou praised the company for opening up the data warehousing market and proving that people are willing to pay for good analytics. But he argues that Varada’s approach is fundamentally different.

“We embrace the data lake. So if you are Mr. Customer, your data is your data. We’re not going to take it, move it, copy it. This is your single source of truth,” he said. And in addition, the data can stay in the company’s virtual private cloud. He also argues that Varada isn’t so much focused on the business users but the technologists inside a company.