Year: 2020

Just a few weeks ago, Seattle-based small business SnapBar — which provides custom photo booth rentals and selfie stations for events nationwide — was thriving, getting ready for a full slate of spring and summer events. But amid business closures and shelter-in-place orders brought on by COVID-19, owner and father-of-three Sam Eitzen and his team of 18 had to get creative — quickly — to keep the company going. After Sam and his leadership team slashed their own salaries by 50% and held a nearly all-night brainstorm session, they pivoted SnapBar’s entire business strategy to ship and sell gift boxes packed with items crafted by local small businesses.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed on March 27 to help business owners like Sam via $350 billion in federal loans and grants. But major structural flaws and implementation issues are preventing these loans from getting to business owners quickly — if at all — and providing the level of help they need.

Small businesses and their employees have already run out of time. Data from my company Gusto, which provides payroll, benefits, compliance and HR software to 100,000 small businesses, shows that layoffs increased by more than 1,000% from February 2020 to March 2020. There was also a 9% gap in overall wages paid to small business employees in March.

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we need to talk about what we’re hearing from the private markets and the public markets, and how different their messages seem to be.

The public markets through yesterday were on the bounce, rising sharply from recent lows, driven by negative news concerning COVID-19 and its ensuing economic damage. As TechCrunch noted yesterday, major American indices had seen their value sharply recover from lows recorded earlier in the year. This was odd, as the news from COVID-19 is far from good — America is still the country with the highest rate of new, confirmed infections and related deaths by some margin — and the economic damage stemming from the nation’s belated efforts to stem the pandemic at home piles up.

You can easily read optimism in the stock market: that the COVID-19 infection footprint at home isn’t as bad as some models indicated, that social distancing is working, and that the economy will quickly rebound from this bother. Ask around the private markets, however, and you’ll hear a very different narrative.

Yesterday while kicking over the business-focused modern software market (enterprise SaaS, if you prefer) with Shasta Ventures‘ Jason Pressman, we discussed the state of affairs for private companies that he’s seeing from his perch inside the startup machine. Taking his notes into account, along with those of other investors that we’ve spoken to recently, it’s hard to understand the level of optimism that public markets are signaling.

Not that Pressman is a pessimist, it would be difficult to be a net-gloomy venture capitalist on the whole, given the risk profile of the investments they make. But some VCs who have invested through prior downturns are comfortable being candid about what they are seeing from private companies, those inside their portfolios and out.

This morning let’s explore the public-private optimism gap for the second time. The last time we undertook this particular theme, public investors were being pessimists and private investors appeared unseasonably bullish. It’s unlikely that there is room for both views to be correct.

Smiles, frowns

Mobile messaging startup Attentive continues to bring in new funding.

The startup raised a $40 million Series B last summer, followed by a $70 million Series C at the beginning of this year. Today it’s announcing that it’s extended the Series C by another $40 million, bringing the total round size to $110 million.

CEO Brian Long (who previously founded TapCommerce with his Attentive co-founder Andrew Jones and sold the company to Twitter) told me that the new funding closed just a week ago. He said the money comes from institutional investors who had wanted to participate in the Series C, but “for whatever reason, the timing didn’t work out.”

Then, as the startup wanted to invest in new areas — particularly in response to the COVID-19 pandemic — Long reached out again. Once they saw Attentive’s numbers for the first quarter of 2020, the firms were willing to invest.

Apparently, the number of new customer sign-ups is only increasing, with Attentive now working with more than 1,000 businesses. Companies like Coach, Urban Outfitters, CB2, PacSun, Lulus and Jack in the Box use the platform to manage their mobile messaging, with tools around adding text message subscribers, creating engaging messages and tracking the results of those campaigns.

And while we’re at the beginning of what’s likely to be a dramatic slowdown in advertising and marketing, Long suggested that even if businesses pull back on acquiring new customers, they’ll still need to maintain a relationship with existing ones.

“CRM is such a critical channel for companies … email and text are the last thing you would shut down,” he said.

Sequoia Capital Global Equities and Coatue are the new investors in the Series C. Sequoia’s venture fund already led (or co-led) the Series C and the Series B, but Long said he was interested in working with the firm’s crossover fund — and with Coatue — partly because they invest in public companies as well.

Not that he has immediate plans for Attentive to go public, but he said, “It just creates optionality,” so that there are fewer financial pressures regardless of the route the company takes.

Other investors in the Series C include IVP, Bain Capital Ventures, NextView Ventures, Eniac Ventures and High Alpha.

“Attentive’s rapid growth is an indicator of how consumers are eager to find a more direct, personalize and efficient channel to interact with businesses,” said Jeff Wang, managing partner at Sequoia Capital Global Equities, in a statement. “We’ve been impressed by how quickly Attentive’s business has scaled, its strong customer momentum, and the expertise of the team. We are thrilled to increase Sequoia’s partnership with Attentive through our Global Equities fund.”

As for how Attentive is responding to COVID-19, the startup plans to create funds to help customers navigate the economic fallout. There will be more details released in the coming weeks, but Long said the idea is to launch funds focused on the e-commerce/retail, food/beverage and educational sectors, providing free access to Attentive tools and services “to help those companies get recharged.”

Long added that he hopes to grow Attentive’s headcount from 260 employees to more than 400 by the end of this year.

BioCatch, a developer of biometrics security technology, said it has raised $145 million in its latest round of funding.

The company’s technology tracks user behavior on websites to determine if a customer is real or a fraudster, according to a statement. Its technology is now used by more than 40 of the largest global financial institutions, the company said.

That top tier client list is likely one reason why the company was able to attract the Bain Capital Tech Opportunities investment team as the lead for its latest round. The growth investing business of the multi-billion dollar private equity firm Bain Capital joined previous investors American Express Ventures, Maverick Ventures, and the Israeli crowd-funding investor, OurCrowd in backing the company.

BIoCatch will use its newfound hoard of cash on research and development and sales and marketing to enter new verticals beyond the financial services world.

The investment will accelerate BioCatch’s rapid growth, broaden its product offerings and further support its expanding client base into new verticals.

“BioCatch’s growth in annual recurring revenue and client base speaks directly to the growing demand for our service and the increasing number of use cases we are able to support,” said Howard Edelstein, the company’s chief executive officer, in a statement. “The current environment has spawned a large increase in bad actors seeking to take advantage of distracted individuals working from home or dispersed companies whose technologists are scattered in remote locations. In such times, technologies like behavioral biometrics become more important than ever.”

Since launching to service the financial services sector, the company has already expanded its footprint in fraud detection and prevention to other verticals — including eCommerce. BioCatch intends to introduce new software for public sector offerings in 2020, the company said.

The company claims its tech can identify the creation of fake accounts or stolen identities at onboarding, recognize account takeovers, and flag social engineering scams using voice recordings.

For Bain, the investment in BioCatch extends the firm’s long history of fintech and cybersecurity deals including investments in Blue Coat, acquired by NortonLifeLock; InAuth, acquired by American Express; and WorldPay, which was snatched up by FIS .

“BioCatch has quickly established itself as a pioneer in the digital identity space by developing next-generation behavioral biometrics technology that integrates fraud detection and authentication capabilities to protect end-users and their most sensitive transactions. Their technology is highly applicable to other verticals beyond financial services that have the same need to balance fraud and the user experience,” said Dewey Awad, a Managing Director at Bain Capital Tech Opportunities.

As companies look for better ways to understand how different departments work at a granular level, engineering has traditionally been a black box of siloed data. Pinpoint, an Austin-based startup has been working on a platform to bring this information into a single view, and today it released a dashboard to help companies understand what’s happening across software engineering from an operational perspective.

Jeff Haynie, co-founder and CEO at Pinpoint says the company’s mission for the last two years has been giving greater visibility into the  engineering department, something he says is even more important in the current context with workers spread out at home.

“Companies give engineering a bunch of money, and they build a bunch of amazing things, but in the end it is just a black box and we really don’t know what happens,” Haynie said. He says his company has been working to take all of the data to try and contextualize it, bring it together and correlate that information.

Today, they are introducing a dashboard that takes what they’ve been building and pulls it together into a single view, which is 100% self serve. Prior to this you needed a bunch of hand-holding from Pinpoint personnel to get it up and running, but today you can download the product and sign into your various services such as your git repository, your CI/CD software, your IDE and so forth.

What’s more it provides a way for engineering personnel to communicate with one another without leaving the tool.

Pinpoint software engineering dashboard. Image Credit: Pinpoint

“Obviously we will handhold and help people as they need it, and we have an enterprise version of the product with a higher level of SLA, and we have a customer success team to do that, but we’ve really focused this new release on purely self service,” Haynie said.

What’s more, while there is a free version already for teams under 10 people that’s free forever, with the release of today’s product, the company is offering unlimited access to the dashboard for free for three months.

Haynie says they’re like any startup right now, but having experience with several other startups and having lived through 9/11, the dot-com crash, 2008 and so forth, he knows how to hunker down and preserve cash. At the same time, he says they are seeing a lot of in-bound interest in the product, and they wanted to come up with a creative way to help customers through this crisis, while putting the product out there for people to use.

“We’re like any other startup or any other business frankly at this point: we’re nervous and scared. How do you survive this [and how long will it last]. The other side of it is that we’re rushing to take advantage of this inbound interest that we’re getting and trying to sort of seize the opportunity and try to be creative about how we help them.”

The startup hopes that if companies find the product useful, after three months they won’t mind paying for the full version. For now, it’s just putting it out there for free and seeing what happens with it — just another startup trying to find a way through this crisis.

At-home antibody testing for COVID-19 is the subject of ample debate among the scientific and medical community, with some seeing it as a necessary step in the process of selectively re-opening parts of the economy through verification of individuals with immunity within the community, and others debating the accuracy and efficacy of currently available testing methods. Regardless of which side you’re on, it remains true that further testing is needed, and startup Scanwell has begun a sizeable study for its at-home antibody test, while it continues to work with the FDA on emergency use authorization for the diagnostic.

Scanwell is working with the state of North Carolina and Raleigh-based Wake Forest Baptist Health to distribute 1,000 of its at-home antibody test kits to a random sampling of citizens, funded in part by $100,000 from the state legislature. The sample population, chosen from the patient pool of Wake Forest Baptist Health’s system, and meant to be a statistically representative snapshot of the larger population, will get a finger-prick blood sample collection kit by mail, every month for a full year, in order to hopefully track the virus and immunity over time.

The Scanwell test can only be used for research purposes at this time, since it hasn’t yet received an emergency use authorization by the FDA. The FDA has so far specifically not authorized any at-home tests for COVID-19, including those supported by telemedicine, but it has recently updated its guidance to note that it “sees the public health value in expanding the availability of COVID-19 testing through safe and accurate tests that may include home collection,” and it says it is in the process of actively pursuing the development of tests that fit that profile in partnership with diagnostic companies.

LA-based Scanwell Health, which already provides at-home diagnostics for detecting UTIs, announced its work on securing FDA authorization for use of its at-home serological antibody test last month. The test kits can provide results in as little as 15 minutes once they’re received by diagnostic labs, but questions have been raised about the general accuracy of antibody testing overall regarding COVID-19, and there’s still some debate about the nature and duration of post-infection immunity for people who have contracted and recovered from the virus.

Better understanding immunity and who has recovered are key ingredients in any attempt to gradually relax isolation restrictions, so immunity testing is a core component that. It’s something that will be needed at scale, along with infection testing through existing molecular testing methods, and contact tracing, like the system being put in place through Apple and Google.

GE Healthcare is extending its longtime collaboration with Microsoft to launch a cloud-based COVID-19 patient monitoring software for health systems.

GE Healthcare had originally intended to debut its Mural Virtual Care Solution at the Healthcare Information and Management Systems Society meeting earlier this year. When the COVID-19 epidemic scuttled those plans the company went redesigned the software offering — initially intended to be a new feature for its Edison platform — to focus on a COVID-19 application that could be distributed quickly to hospitals that need it using Microsoft’s Azure Cloud.

GE Healthcare and Microsoft are waiving everything but the installation costs for the software until January 2021, the companies said.

The software is designed to provide a central hub from which hospital staff can monitor patients in intensive care units — including those on medical ventilation.

As Dr. David Rhew, the chief global medical officer of Microsoft noted, the remote monitoring tools could help hospital staff limit their exposure to infected patients and help conserve needed personal protective equipment.

“If you think about what the solution was originally built on it was built on an on-prem solution that would take weeks to install and would take time to set up the servers,” said Rhew. “It clearly is a great way for us to more efficiently monitor… [And] because you don’t need to walk into the room it saves PPE… decreasing that risk… of exposure.” 

A Mural installation can monitor a 100-bed, multi-site ICU network with just three senior nurses and two intensivists, according to a company statement. The software collects real-time data from ventilators, existing patient monitoring systems, electronic medical records, labs and other diagnostics into a single surveillance hub, the companies said.

“Facing the daunting outlook of a COVID-19 surge, it is imperative that I and my fellow healthcare workers use virtual ICU technology to safely monitor and care for our sickest patients while preserving PPE,” said Matthias Merkel, M.D., Ph.D., OHSU’s Chief Medical Capacity Officer, Vice Chair of Critical Care Medicine, and Professor of Anesthesiology and Perioperative Medicine, in a statement. “Remaining closely connected and supported through technology enables us to progress our patients’ care across a geographic distance that we would otherwise be unable to manage.” 

Frame AI, a New York City startup that uses artificial intelligence and machine learning to help companies understand their customers better across multiple channels, announced a $6.3 million Series A investment today.

G20 Ventures and Greycroft led the round together. Bill Wiberg, co-founder and partner at G20, will join Frame’s board under the terms of the deal. The total raised with an earlier seed round is over $10 million, according to the company.

“Frame is basically an early warning system and continuous monitoring tool for your customer voice,” Frame CEO and co-founder George Davis told TechCrunch. What that means, in practice, is the tool plugs into help desk software, call center tooling, CRM systems and anywhere else in a company that communicates with a customer.

“We then use natural language understanding to pull out emerging themes and basically aggregate them to account and segment levels so that customer experience leaders can prioritize taking actions to improve their relationships,” Davis explained.

He believes that customer experience leaders are being asked to do more and more in terms of talking to customers on ever more channels and digesting that into useful information for the rest of their company to be responsive to customer needs, and he says that there isn’t a lot of tooling to help with this particular part of the customer experience problem.

“We don’t think they have the right tools to do either the listening in the first place or the analysis. We’re trying to make it possible for them to hear their customers everywhere they’re already talking to them, and then act on that information,” he said.

He says they work alongside customer data platforms (CDPs) like Segment, Salesforce Customer 360 and Adobe Real-time CDP. “We can take the customer voice information from all of these unstructured sources, all these natural language sources and turn it into moments that can be contributed back to one of these structured data platforms.”

Davis certainly recognizes that his company is getting this money in the middle of a health and economic crisis, and he hopes that a tool like his that can help take the pulse of the customer across multiple channels can help companies succeed at a time when a data-driven approach to customer experience is more important than ever.

He says that by continuing to hire through this and building his company, he can contribute to restarting the economic engine, even if in some small way.

“It’s a bleak time, but I have a lot of confidence in New York and in the country, in the customer experience community and in the world’s ability to bounce back strong from this. I think it’s actually created a lot of solidarity that we’re all going to find a lot of new opportunities, and we’re going to just keep building Frame as fast as we can.”

The European Commission has set out a plan for co-ordinating the lifting of regional coronavirus restrictions that includes a role for digital tools — in what the EU executive couches as “a robust system of reporting and contact tracing”. However it has reiterated that such tools must “fully respect data privacy”.

Last week the Commission made a similar call for a common approach to data and apps for fighting the coronavirus, emphasizing the need for technical measures to be taken to ensure that citizens’ rights and freedoms aren’t torched in the scramble for a tech fix.

Today’s toolbox of measures and principles is the next step in its push to coordinate a pan-EU response.

“Responsible planning on the ground, wisely balancing the interests of protection of public health with those of the functioning of our societies, needs a solid foundation. That’s why the Commission has drawn up a catalogue of guidelines, criteria and measures that provide a basis for thoughtful action,” said EC president Ursula von der Leyen, commenting on the full roadmap in a statement.

“The strength of Europe lies in its social and economic balance. Together we learn from each other and help our European Union out of this crisis,” she added.

Harmonized data gathering and sharing by public health authorities — “on the spread of the virus, the characteristics of infected and recovered persons and their potential direct contacts” — is another key plank of the plan for lifting coronavirus restrictions on citizens within the 27 Member State bloc.

While ‘anonymized and aggregated’ data from commercial sources — such as telcos and social media platforms — is seen as a potential aid to pandemic modelling and forecasting efforts, per the plan.

“Social media and mobile network operators can offer a wealth of data on mobility, social interactions, as well as voluntary reports of mild disease cases (e.g. via participatory surveillance) and/or indirect early signals of disease spread (e.g. searches/posts on unusual symptoms),” it writes. “Such data, if pooled and used in anonymised, aggregated format in compliance with EU data protection and privacy rules, could contribute to improve the quality of modelling and forecasting for the pandemic at EU level.”

The Commission has been leaning on telcos to hand over fuzzy metadata for coronavirus modelling which it wants done by the EU’s Joint Research Centre. It wrote to 19 mobile operators last week to formalize its request, per Euractiv, which reported yesterday that its aim is to have the data exchange system operational ‘as soon as possible’ — with the hope being it will cover all the EU’s member states.

Other measures included in the wider roadmap are the need for states to expand their coronavirus testing capacity and harmonize tesing methodologies — with the Commission today issuing guidelines to support the development of “safe and reliable testing”.

Steps to support the reopening of internal and external EU borders is another area of focus, with the executive generally urging a gradual and phased lifting of coronavirus restrictions.

On contacts tracing apps specifically, the Commission writes:

“Mobile applications that warn citizens of an increased risk due to contact with a person tested positive for COVID-19 are particularly relevant in the phase of lifting containment measures, when the infection risk grows as more and more people get in contact with each other. As experienced by other countries dealing with the COVID-19 pandemic, these applications can help interrupt infection chains and reduce the risk of further virus transmission. They should thus be an important element in the strategies put in place by Member States, complementing other measures like increased testing capacities.

“The use of such mobile applications should be voluntary for individuals, based on users’ consent and fully respecting European privacy and personal data protection rules. When using tracing apps, users should remain in control of their data. National health authorities should be involved in the design of the system. Tracing close proximity between mobile devices should be allowed only on an anonymous and aggregated basis, without any tracking of citizens, and names of possibly infected persons should not be disclosed to other users. Mobile tracing and warning applications should be subject to demanding transparency requirements, be deactivated as soon as the COVID-19 crisis is over and any remaining data erased.”

“Confidence in these applications and their respect of privacy and data protection are paramount to their success and effectiveness,” it adds.

Earlier this week Apple and Google announced a collaboration around coronavirus contracts tracing — throwing their weight behind a privacy-sensitive decentralized approach to proximity tracking that would see ephemeral IDs processed locally on devices, rather than being continually uploaded and held on a central server.

A similar decentralized infrastructure for Bluetooth-based COVID-19 contacts tracing had already been suggested by a European coalition of privacy and security experts, as we reported last week.

While a separate coalition of European technologists and researchers has been pushing a standardization effort for COVID-19 contacts tracing that they’ve said will support either centralized or decentralized approaches — in the hopes of garnering the broadest possible international backing.

For its part the Commission has urged the use of technologies such as decentralization for COVID-19 contacts tracing to ensure tools align with core EU principles for handling personal data and safeguarding individual privacy, such as data minimization.

However governments in the region are working on a variety of apps and approaches for coronavirus contacts tracing that don’t all look as if they will check a ‘rights respecting’ box…

In a video address last week, Europe’s lead privacy regulator, the EDPS, intervened to call for a “panEuropean model ‘COVID-19 mobile application’, coordinated at EU level” — in light of varied tech efforts by Member States which involve the processing of personal data for a claimed public health purpose.

“The use of temporary broadcast identifiers and bluetooth technology for contact tracing seems to be a useful path to achieve privacy and personal data protection effectively,” said Wojciech Wiewiórowski on Monday week. “Given these divergences, the European Data Protection Supervisor calls for a panEuropean model “COVID-19 mobile application”, coordinated at EU level. Ideally, coordination with the World Health Organisation should also take place, to ensure data protection by design globally from the start.”

The Commission has not gone so far in today’s plan — calling instead for Member States to ensure their own efforts align with the EU’s existing data protection framework.

Though its roadmap is also heavy on talk of the need for “coordination between Member States, to avoid negative effects” — dubbing it “a matter of common European interest”. But, for now, the Commission has issued a list of recommendations; it’s up to Member States to choose to fall in behind them or not.

With the caveat that EU regulators are watching very carefully how states’ handle citizens’ data.

“Legality, transparency and proportionality are essential for me,” warned Wiewiórowski, ending last week’s intervention on the EU digital response to the coronavirus with a call for “digital solidarity, which should make data working for all people in Europe and especially for the most vulnerable” — and a cry against “the now tarnished and discredited business models of constant surveillance and targeting that have so damaged trust in the digital society”.

Nifty Games is aiming to reshape the mobile gaming strategies of national sports leagues, partnering with associations like the NFL and NBA to publish officially licensed titles that the startup hopes can take better advantage of mobile gaming trends.

The Bay Area games publisher announced Wednesday that they had recently closed a $12 million Series A round of fundraising led by March Capital Partners.  Defy Partners, aXiomatic Gaming, Vulcan Capital, Courtside Ventures, Transcend Fund, Century Game and OneTeam Ventures also participated in the round, which the Nifty team tells us closed earlier this year. Nifty Games also closed a $3 million seed deal in late 2018.

Co-founders Jon Middleton and Pete Wanat have been in the games industry since the 90s and have relied on their deep rolodexes to form partnerships for Nifty Games’ next set of titles.

The team announced that they were working with the NFL and an undisclosed game development partner to publish a head-to-head football title called NFL Clash that is set to debut later this year. In February, Nifty announced that they had partnered with the NBA to release a head-to-head mobile title this year as well.

With the latter half of the NBA season already suspended and doubts arising for the fate of other leagues’ seasons, delivering solid gaming experiences could grow to become even more critical as the organizations look to satiate fans during a disruptive pandemic.

The national leagues have historically banked on long-term gaming partnerships with mega publishers like EA and 2K to keep them up to date across platforms, but officially sanctioned mobile titles have largely seemed to echo the full simulation console titles that have been standard for 20+ years. In the past decade-plus, the mobile games industry has learned quite a bit about networked play and mobile monetization, Nifty Games is hoping that it can channel these partnerships into titles that can offer sports fans more varied official experiences on mobile than they may have gotten in the past.

“We definitely believe in quick sessions,” Wanat told TechCrunch in an interview. “We want to be super fun to play but with the authenticity that comes with partnering with the leagues and associations directly.”

The studio did not comment on future league partnerships beyond the NFL and NBA, but the startup says early investors in the company also include owners from the MLB, MLS, NHL and eSports leagues.