Author: azeeadmin

The math is simple: Great research universities beget great startups. Pittsburgh certainly has little want for the former, with two world-class research schools — Carnegie Mellon University and the University of Pittsburgh – located in the city.

The latter historically presented a challenge for Pittsburgh, as local startups often left for the greener (in the sense of dollars) pastures of vibrant ecosystems like New York and San Francisco.

After speaking to current mayor Bill Peduto about how Pittsburgh is working to build its own startup community, I hopped on a call with Dave Mawhinney, the executive director of CMU’s Swartz Center for Entrepreneurship. The Center – named for Accel founder Jim Swartz – is tasked with helping grow the student body’s entrepreneurial ambitions.

This interview is part of TechCrunch’s City Spotlight on Pittsburgh. Join us on Tuesday, June 29 for the free online event where we will be joined by Mayor Peduto, Karin Tsai, director of engineering at Duolingo, and Carnegie Mellon University President Farnam Jahanian. Register for the free event here.

TechCrunch: Can you give me a bit of a brief history on how CMU has developed startups over the years?

Dave Mawhinney: First of all, I’m a CMU alum – and I’m not your typical academic. I had a 30-year entrepreneurial and venture capital career before I came back to Carnegie Mellon a decade ago to make it on-par with Stanford, MIT, Berkeley, Harvard and other great entrepreneurial universities[…] When I came back to CMU in 2011, 2012, there were several different activities across campus that were rather siloed.

There was an effort in the computer science department, there was an effort in the engineering department, there was an effort in the business school and they were all doing their own things and not necessarily getting the economies of scale of working together. When the university asked me to come back and run the Don Jones Center at the business school, I said I would only do so if you give me the agency to try to pull together all of our entrepreneurial activities under one rough.

You can create a really breakthrough technology, but that doesn’t necessarily mean you’ve got the ability to market it yourself to create an effective business plan. How much is that built into the curriculum at CMU? And how much cross pollination is there between the various departments?

We have a sign at our front door that says, “the ideal startup team is hacker, hustler, designer.” The hackers are the technical people, the hustlers are the people that are willing to do business, to talk to partners. And I think designers are absolutely key because they are the glue that holds everything together. They make the products and services useable. It’s truly in our DNA and as we do our education in the four-credit classes, or as we do our workshops that are outside the classroom, that concept of design thinking, really getting to know your customer and solving real world problems that they’re willing to pay for now, is critical to getting the company off to the right start.

We also very much believe in the model of mentorship, so all of our startups get assigned mentors that are from the generalized background of the business that they’re going into. And then we have a roster of several hundred experts, from legal experts, accounting experts, marketing experts, manufacturing experts — any type of expertise that you can imagine that our teams can reach out to and tap into, to get questions answered and to get set on the right direction.

What kind of vetting happens on the university side? Does a startup have to pass a certain threshold to gain access to all of these opportunities?

Everybody’s welcome. Our doors are open to everybody, but there are some steps. When you come and sign up to work at the Swartz Center, you get to go to a first come, first serve table. There’s typically 20 of these tables available at any given time. The teams that show dedication, they participate in our programs, they’re showing up on a daily and weekly basis and they’re making progress, they’ll get a dedicated table, where they get to put their branding on the table and keep their equipment there. And the, ultimately, the teams that are making the most progress have customers and perhaps have raised a pre-seed or seed round, they get their own office. We have ten of those called “Startup Garages.” We do have that bit of meritocracy built in, as you go forward, but it is open to everybody. The truth is the founding teams, the entrepreneurs, they have to make it happen. We’re not going to spoon feed you.

Like a lot of other schools located outside of major metropolitan areas, I assume there’s a lot of bleed when it comes to leaving for different markets.

That has been true historically, but it’s changed. Really, the seminal event was when Google put an office in Pittsburgh in 2006. They have over 1,000 employees. Every major tech company — Amazon, Facebook, Apple — have all embedded hundreds of engineers in our community, so we’re growing really, really rapidly. Artificial intelligence was invented at Carnegie Mellon – and that sort of set off the robot revolution […] Now we’re the center of the automated vehicle community. Aurora is co-located here, Argo is here, Aptiv is here. We have a very vibrant community and we do want to continue to grow it.

But one of the challenges is getting that capital to come into the community. If you look at how much Uber ATG brought in, how much Argo AI and Aurora – collectively, those three companies, which have all licensed CMU technologies, they’ve all got over $7 billion in collective capital. Not all of it will be spent here, but a lot of it will be spent here. But that doesn’t necessarily trickle down to the next AI startup raising their first $3 million. So we do need to keep that connectivity to the money centers in the Bay Area and New York to ensure that our startups will get funded.

Consumer spending in mobile apps hit a record $64.9 billion during the first half of 2021, according to preliminary data from app store intelligence firm Sensor Tower. This figure represents a 24.8% increase in spending seen across both the App Store and Google Play, compared with the year-ago period. But while industry experts believe the accelerated shift to mobile fueled by the pandemic is a trend that will continue, it’s worth noting that — despite the new record — the growth rate for consumer spending has slightly slowed, and the download growth slowed more dramatically.

From the first half of 2019 to the first half of 2020, consumer spending on mobile apps grew 28.4% from $40.5 billion to $52 billion, for comparison — slower than the 24.8% seen in the current period.

Apple’s App Store accounted for $41.5 billion in global consumer spending during the first half of 2021, or 1.8x the $23.4 billion seen by Google Play.

However, Google Play continues to outpace on growth, having jumped 30% from the $18 billion in the first half of 2020 compared with the 22.1% growth from the $34 billion the App Store had seen. This is due, in part, to demand from markets like the Philippines, where the Covid-19 pandemic has forced business closures and quarantines, Sensor Tower noted.

Consumer spend outside of games was driven by sports, finance, business, book and entertainment apps. Subscription-based apps in the top 100 apps (excluding games) were a large part of this spend, too, contributing $8.3 billion during the period. TikTok remained a top grossing app during the first half of 2021, followed by YouTube and regular top earner Tinder.

Of course, mobile game spending continues to contribute to the largest part of the overall consumer spend, reaching $44.7 billion during the first half of the year. The App Store accounted for $26 billion of that figure, but growth slowed from 26.5% in the year-ago period to 13.5% from the first half of 2020 to the first half of 2021.

Top grossing games in the first half of 2021 were, in order, Tencent’s Honor of Kings ($15B+), PUBG Mobile (including its localized version for China, reached nearly $1.5B), Genshin Impact ($848M+), Roblox and Coin Master.

Mobile app download growth also significantly slowed in the first half of this year, the firm found.

Last year, the Covid-19 pandemic contributed to a surge of new mobile app installs around the world, as consumer looked to apps for work, school, shopping, heath, grocery, and more. During the first half of 2020, app installs had jumped 25.7% year-over-year to reach 71.3 billion downloads. But in the first half of 2021, downloads only grew 1.7% to reach 72.5 billion installs.

The App Store even saw a year-over-year decline in non-game installs in the first half of 2021, dropping 10.9% to 16.3 billion from 18.3 billion in the first half of 2020. Sensor Tower believes this is reflective of the increased competition for consumer attention in markets with a high number of iOS users, like the U.S., where businesses have been reopening and in-person activities are resuming.

Meanwhile, Google Play (non-game) installs climbed 6% in the first half of this year to 56.2 billion from the 53 billion in the first half of 2020. This could be tied to the demand for apps in markets where Android is dominant, like India, which has continued to be impacted by the pandemic. As a result, app adoption on Google Play was 3.5 times higher than on the App Store during the first half of 2021.

The (non-game) app with the most downloads was TikTok, which gained 384.6 million new installs during the first half of this year. But this is down by around 38% from the 619 million installs it saw during the year-ago period — a change that can be attributed to its ban from the Indian market last year. The rest of the top 5 most-downloaded app chart was dominated by Facebook, which scored the No. 2, No. 3, and No 4 positions, with Facebook, Instagram and WhatsApp, respectively. Telegram was No. 5 followed by Messenger, Zoom, Snapchat, CapCut and Google Meet.

Mobile game downloads, meanwhile, fell 22.8% to 4.4 billion on the App Store but grew 3.9% on Google Play to 23.7 billion in the first half of 2021.

The app data presented is a preliminary analysis that may become more precise over time. It’s also worth comparing it to related reports from other firms for a fuller picture.

Ahead of our TechCrunch City Spotlight: Pittsburgh event tomorrow, I spoke to current Mayor Bill Peduto and Dave Mawhinney, the executive director of Carnegie Mellon University’s Swartz Center for Entrepreneurship. Like many in the Steel City startup community, both share a focus on the historically difficult task of keeping startups in town.

For more on investing in Pittsburgh, be sure to tune in to our City Spotlight on Tuesday, June 29, where we will be joined by Peduto, Duolingo director of engineering Karin Tsai, and Carnegie Mellon University President Farnam Jahanian. Register for the free event here.

I asked Peduto and Mawhinney what the single biggest obstacle has been in building out Pittsburgh’s startup ecosystem. Both responded the same way: venture capital. Raising funding is, of course, a hurdle regardless of location, but many VCs have been reluctant to invest in startups outside of traditional hubs like San Francisco and New York.

“But one of the challenges is getting that capital to come into the community,” said Mawhinney, who leads CMU’s startup efforts. “If you look at how much Uber ATG brought in, how much Argo AI and Aurora  — collectively, those three companies, which have all licensed CMU technologies, they’ve all got over $7 billion in collective capital. Not all of it will be spent here, but a lot of it will be spent here. But that doesn’t necessarily trickle down to the next AI startup raising their first $3 million.”

Peduto said growing the VC pipeline has been a focus during his time as mayor.

“I think we’ve been able to convince investors from the coast that the companies don’t need to leave Pittsburgh in order to be highly successful and see their investment pay off,” he told TechCrunch. “However, I believe if we had more venture capital arriving here to help to take early-stage companies into that critical next stage of expansion, it would build off itself and it would excel growth in all of the industry cluster, significantly.”

Side, a real estate technology company that works to turn agents and independent brokerages into boutique brands and businesses, has raised “$50 million-plus” in a funding round that doubles its valuation to $2 billion.

The latest financing comes just three months after the San Francisco-based startup raised $150 million in a Series D funding round led by Coatue Management at a $1 billion valuation. Tiger Global Management led the latest investment, which also included participation from ICONIQ Capital and D1 Capital Partners. With the latest capital infusion, Side’s total raised since its 2017 inception now totals over $250 million. Matrix Partners, Sapphire Ventures, Trinity Ventures and 8VC led its earlier rounds.

Side says that it is now “backed by the three top technology initial public offering (IPO) underwriters” and that the latest funding “sets the stage for a future IPO.”

The startup pulled in between “$30 million and $50 million in revenue” in 2020 (a wide range, we know), and expects to double revenue this year. In 2019, Side represented over $5 billion in annual home sales across all of its partners. Today, the company’s community of agent partners represents over $15 billion in annual production volume. And it’s predicting that by the end of 2021, it will have closed over $20 billion in home sales, positioning the company “as a top 10 national brokerage by volume.”

Today, Side supports more than 1,800 partner agents across California, Texas and Florida. It says it’s seen a 200% year-over-year increase in agent-represented home sales across its three operating markets of California, Texas and Florida. The company plans to enter 15 new states by year’s end.

Guy Gal, Edward Wu and Hilary Saunders founded Side on the premise that most real estate agents are “underserved and underappreciated” by traditional brokerage models.

CEO Gal said existing brokerages are designed to support “average” agents and as such, the top-producing agents end up having to do “all of the heavy lifting.”

Side’s white label model works with agents and teams by exclusively marketing their boutique brand, while also providing the required technology and support needed on the back end. The goal is to help partner agents “predictably grow” their businesses and improve their productivity.

“The way to think about Side is the way you think about what Shopify does for e-commerce […] When partnering with Side, top-producing agents, teams and independent brokerages, for the first time in history, gain full ownership of their own brand and business without having to operate a brokerage,” Gal told me at the time of the company’s last raise. “When you spend years solving the problems of this very specific community of agents, you are able to use software to drive enormous efficiency for them in a way that has never been done before.”

Existing brokerages, he argues, actively discourage agents from becoming top producers and teams, because agents who serve fewer clients can be forced into paying much higher commission fees on every transaction, which means the incentives between brokerages and top agents and teams are misaligned.

“Top producers want to grow and differentiate, and brokerages want them to do less business at higher fees and be one more of the same under the same brand,” Gal said. “Side, rather than discouraging and competing with top producing agents and teams, enables them to grow and scale their own business and brand.”

According to the EPA, the U.S. alone produces 292.4 million tons of municipal solid waste a year. That figure works out to around 4.9 pounds per person, per day. To say the world – and the United States in particular – has a waste problem is putting it mildly. No one solution is going to address this growing issue – but thankfully, we’ve seen a number of innovations surface in recent years.

This year, we’re playing host to the Extreme Tech Challenge Global Finals on July 22. The pitch-off competition will feature some of the most innovative forward-looking startups across a range of categories, including many dealing with sustainability. The day will also feature panels, including a number hosted by TechCrunch editors.

One highlight worth tuning in for is “Waste Matters.” The conversation will include a trio of folks from companies taking unique approaches to managing the waste stream.

Leon Farrant is the co-founder and CEO of, Green Li-Ion, a company dedicated to dramatically accelerating the process of recycling lithium-ion batteries. It’s a key issue as a wide range of different consumer electronics grow more ubiquitous around the world.

Matanya Horowitz is the founder and CEO of AMP Robotics. The Denver-based company uses AI and robotics better sort a wide range of recyclables from waste. Material Evolution co-founder and CEO Elizabeth Gilligan will also join us to discuss her company’s novel and sustainable approach to creating concrete.

Join us on July 22 to find out how the most innovative startups are working to solve some of the world’s biggest problems. And best of all, tickets are free – book yours today!

With less than a month to go before the Olympics kick off in Tokyo, cord-cutting services like YouTube TV are attempting to woo new subscribers who are looking for a way to watch summer sports. But whether or not you’re eager to watch Simone Biles defy gravity, YouTube TV’s latest upgrades enhance the product with audio and video improvements. Today, YouTube TV announced a 4K Plus add-on package with offline downloads, 5.1 Dolby audio, and features that make it easier to watch live sports. The company previously teased these features in February.

YouTube TV is already one of the pricier streaming services out there — at $64.99 per month, you might not save much money by choosing YouTube in lieu of your cable service. Hulu + Live TV is priced the same, but offers a Disney+ and ESPN+ add-on for a total of $72.99 per month. But if you want to kick your video quality (and your monthly bill) up a notch, you can now enable 4K streaming for an extra $19.99 per month, bringing your grand total to $84.98 monthly.

The 4K Plus add-on package will also allow subscribers to download shows from DVR to watch offline — currently, that’s not possible on the standard $64.99 per month package. Subscribers will be able to try out the package for free for a month, then pay $9.99 per month for a year before the price increases to $19.99. This is pretty consistent with YouTube TV’s continual price hikes over the years.

Meanwhile, the 5.1 Dolby audio capabilities will be a free addition for all YouTube TV members — in a blog post, the company says this has been one of users’ “biggest requests.” Over the coming weeks, these surround-sound audio capabilities will begin rolling out to select devices. The sports upgrades also come at no additional cost — one new feature will let viewers jump to key plays and specific highlight moments when watching a DVR recording or trying to catch up live. So, if you’re tuning in an hour late, you can view key moments from the game, then jump right in live. YouTube TV will also let users search for specific sports to add to their DVR, which has no storage space limit. So, again, if you’re determined not to miss a single Simone Biles floor routine, it will be easier to make sure you’re in the loop. There will also be a Medal count view during the Olympics within the app.

As the Olympics draw nearer, we can expect other cord-cutting services to up the ante on their live sports offerings — the $9.99 monthly Paramount+ Premium plan includes a wide range of international soccer matches, but no word on the Olympics yet. Still, the service is far less expensive than YouTube TV and already offers 4K, HDR, and Dolby Vision. YouTube TV had 3 million subscribers as of October 2020, but did not offer an update for Q1 of 2021. As of March, Hulu had 4.1 million subscribers to its Live TV service, which will also air the Olympics.

Foursquare co-founder Dennis Crowley has announced that he is stepping back of his full-time role at the company. During the first seven years of the company, he was the startup’s Chief Executive Officer. In 2016, Crowley moved to an executive chairman position. He’s also been running the Foursquare Labs R&D group since then.

Going forward, Crowley won’t be working full-time at the company. He’ll remain on the Board of Directors as co-chair with Factual founder Gil Elbaz.

In 2009, Foursquare was better-known for its location-based social network. People would check in to locations to share what they’ve been up to with their friends. Users would earn badges and mayorships.

Over the years, the most active users had amassed thousands of checkins. Foursquare became a great app to keep track of places you like. You could also use it to discover your friends’ favorite places.

That’s why the company decided to split its main app into two separate apps — the Foursquare City Guide and Swarm. At the same time, the company started workin on developer APIs and SDKs so that other companies could take advantage of Foursquare’s location data.

That business in particular has been quite lucrative. With the company’s Pilgrim SDK, developers can build location-aware apps. For instance, an advertiser can send a personalized notification based on where you are. Foursquare tries to be as accurate as possible and can sometimes even figure out when you enter or exit a venue.

That SDK enables many different possibilities. It’s easy to track the impact of an advertising campaign on online sales — but what about offline interest?

Foursquare’s SDK can help advertisers and brand see whether an advertising campaign has an impact on foot traffic. Of course, you can also combine that data with other customer data.

The company has become an important advertising and marketing platform focused on location. Overall, the company has generated more than $100 million in revenue in 2020. And it plans to grow in 2021 and beat that number.

Dennis Crowley mentions two reasons why he’s leaving now. According to him, the company is doing well, and he’s been working on the same thing for twelve years already.

“Foursquare hasn’t just found its way… it leads the way. I used to say that my goal was to make the name ‘Foursquare’ synonymous with ‘innovation in contextual aware computing’… And, here in 2021, we’ve built the tools and frameworks that can make that so,” Crowley writes in a blog post.

“Also, twelve years is a lot of time. I have lots of things I still want to build — many of which don’t fit neatly into the Foursquare of 2021 (and, hey fellow founder, it’s fine to feel this way!),” he adds. He’s also going to spend some well-deserved time with his family.

Crowley has been an iconic startup founder during Web 2.0 era. He managed to attract tens of millions of users. It’s clear that he’s been a great product CEO during the early years of the company. And now, the company is also generating revenue. So it’s going to be interesting to see what he builds next.

Brian Armstrong, the founder and CEO of cryptocurrency exchange Coinbase, is coming to Disrupt this September 21-23, and given how much there is to discuss, we couldn’t be more excited to host him.

As some industry observers will know, Armstrong, a native of San Jose, Calif., whose parents were both engineers, nabbed two degrees from Rice University in Texas before joining Airbnb as a software engineer in 2011 as a technical product manager focused on fraud prevention.

The role gave him the opportunity to learn about payment systems — and payment problems — across the world. It relatedly fueled a then-burgeoning interest in cryptocoins, which he began to buy and store and, more important, he began to believe would ultimately replace fiat money. In fact, after just 14 months with Airbnb, Armstrong left the company to join Y Combinator and found Coinbase.

He wasn’t focused on making money, by his telling. Instead, as he told Forbes last year, “I wanted the world to have a global, open financial system that drove innovation and freedom.” Either way, along the way, Armstrong became very wealthy, as have many Coinbase employees and investors, including Andreessen Horowitz, which built the biggest stake in Coinbase over the years and whose position was valued at a reported $11 billion at the time of Coinbase’s direct listing this past April.

Still, the success of Coinbase — which has established itself as the clean, well-lit place to invest in cryptocurrencies — has also invariably led to greater scrutiny. The company has been widely accused by its customers of focusing on security at the expense of adequate customer service. Several of Armstrong’s managerial decisions, including to clamp down on political speech inside of Coinbase, has cost the company valued employees, while others have said they were treated unfairly because of their race or gender.

More, following a very long run, enthusiasm over cryptocurrencies has abruptly slowed over the last month or so. While Armstrong has seen enthusiasm for crypto grow and wane before, Coinbase is now a publicly traded company, and as questions bubble up about Bitcoin, Coinbase’s shares are down, too. (As of this writing, they are trading at around $217, almost half of where they were valued at their peak price in April of about $429.)

Little wonder Armstrong has been laser-focused on not only strengthening what Coinbase has already built but setting it up to become an even larger enterprise, including by acquiring a company early this year that sets up Coinbase to operate as a kind of AWS, enabling companies that, say, want to connect their wallet app to a blockchain to click a few buttons rather than hire a team of engineers to spin up the necessary nodes.

How else is Armstrong, 38, dealing with the markets ups and downs as he builds a completely new financial institution? Where does he want to take Coinbase over the next 12 months? How does he respond to criticisms about some of his very public decisions concerning Coinbase employees? These are among the many things we’ll talk with him about at this year’s Disrupt for an appearance that we know attendees won’t want to miss. We’re certainly excited to sit down with him.

Join him and over 10,000 of the startup worlds most influential people at Disrupt 2021 online this September 21-23. Get your pass to attend now for under $99 for a limited time!

As the second quarter races to a close, we’re down to the wire for IPOs looking to get out before June ends. One such company is SentinelOne, a cybersecurity startup backed by Insight Venture Partners, Redpoint, Tiger Global Management, Data Collective and Anchorage Capital, among others.

SentinelOne raised an ocean of capital while private, including nearly $500 million across two rounds in 2020. Its debut is therefore a huge liquidity event for a host of investing groups. And today, the cybersecurity unicorn had good news in the form of an upgrade to its IPO price range.

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

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Last week, The Exchange wrote that the company’s IPO would be a “good heat check for the IPO market” given its rapid growth and pace of losses. How investors valued it would help explain the public market’s current appetite for loss-making startups. Today’s news implies healthy appetites.

SentinelOne raised its IPO price range this morning from $26 to $29 per share to $31 to $32 per share, a sizable lift to its valuation and IPO raise.

This morning, we’re unpacking the company’s new valuation range, thinking about SentinelOne’s growth and revenue results compared to similar public companies, and working to understand if the company is inexpensive, neutrally priced or expensive compared to current comps. Sound fun? It will be!

What’s SentinelOne worth?

Recall that when SentinelOne last raised capital it was valued at $2.7 billion on a pre-money basis. The company was therefore worth just under $3 billion after the $267 million round. The unicorn is going to yeet that figure into space in its IPO, barring something catastrophic.

Its new IPO price range of $31 to $32 per share values the company on a much richer basis. With an anticipated simple share count of 253,530,006 after its IPO, inclusive of a private placement, the company would be worth $7.86 billion to $8.11 billion.

Shopify changed the e-commerce landscape by making it easier for merchants to set up their websites both quickly and affordably. A startup called Tapcart is now doing the same for mobile commerce.

The company, which has referred to itself as the “Shopify for mobile apps,” today powers the shopping apps for top brands, including Fashion Nova, Pier One Imports, The Hundreds, Patta, Culture Kings, and thousands more. Following a year of 3x revenue growth, in part driven by the pandemic, Tapcart is today announcing the close of a $50 million round of Series B funding, led by Left Lane Capital. Having clearly taken notice of Tapcart’s traction with its own merchant base, Shopify is among the round’s participants.

Other investors in the round include SignalFire, Greycroft, Act One Ventures and Amplify LA.

Tapcart’s co-founders, Sina Mobasser and Eric Netsch, have worked in the mobile app industry for years. Mobasser’s previous company, TestMax, offered one of the first test prep courses on iOS, while Netsch had more recently worked on the agency side to create mobile and digital experiences for brands. Together, the two realized the potential in helping online merchants bring their businesses to mobile, as easily as they were able to go online with Shopify.

“Now, you can launch an app on our platform in a matter of weeks, where historically it would take up to a year if you wanted to custom build an app,” explains Mobasser. “And you can do it for a low monthly fee.”

Tapcart’s platform itself offers a simple drag-and-drop builder that allows anyone to create a mobile app for their existing Shopify store using tools to design their layout, customize the product detail pages, integrate checkout options, include product reviews, and even optionally add other branded content, like blogs, lookbooks, videos (including live video) and more. Everything is synced directly from Shopify to the app in real-time, so the merchant’s inventory, products and collections are all kept up-to-date. That’s a big differentiator from some rivals, which require duplicate sets of data and data transformation.

Tapcart, meanwhile, leverages all of Shopify’s APIs and SDKs to create a native application that works with Shopify’s existing data structures.

 

This tight integration with Shopify helps Tapcart because it doesn’t have to focus on the e-commerce infrastructure, as the way things are structured around inventory and collections are roughly 90% the same across brands. Instead, Tapcart focuses on the 10% that makes brands stand out from one another, which includes things like branding, content and design. Its CMS allows merchants to create exclusive content, change the colors and fonts, add videos and more to make the app look and feel fully customized.

Beyond the mobile app creation aspect to its business, Tapcart also helps merchants automate their marketing. Through the Tapcart platform, merchants can communicate with their customers in real-time using push notifications that can alert them to new sales, to encourage them to return to abandoned carts, or any other promotions. The marketing campaigns can be automated, as well, which helps merchants schedule their upcoming launches and product drops ahead of time. The company claims these push notifications deliver click-through rates that are 72% higher than a traditional email or SMS text because of their interactivity and branding.

The platform has quickly found traction with SMB to mid-market enterprise customers who have reached the stage of their business where it makes sense for them to double down on customer retention and conversion and optimize their mobile workflow.

“Our sweet spot is when you have maybe a couple hundred customers in your database,” notes Netsch. “That’s a perfect time to now focus less on the paid acquisition portion of your business and more on how to retain and engage those existing customers, [so they’ll] shop more and have a better experience,” he says.

During the past 12 months, over $1.2 billion in merchant sales have flowed through Tapcart’s platform. And in 2020, Tapcart’s recurring revenue increased by 3x, as mobile apps grew even faster during the pandemic, which had increased consumer mobile screen time by 20% year-over-year from 2019. Mobile commerce spending also grew 55% year-over-year, topping $53 billion globally during the holiday shopping season, the company says. Tapcart’s own merchants saw mobile app orders at a rate of more than once-per-second during this time, and it believes these trends will continue even as the pandemic comes to an end.

Today, Tapcart generates revenue by charging a flat SaaS (software-as-a-service) fee, which differentiates it from a number of competitors who charge a percent of the merchant’s total sales.

With the additional funding, Tapcart plans to focus on its goal of becoming a vertically integrated mobile commerce suite of tools, which more recently includes support for iOS App Clips. It will also soon release an upgraded version of its insights analytics platform and will offer scripts that merchants can install on their mobile websites to compare what works on the site versus what works in the app.

Later this year, Tapcart plans to launch a full marketing automation product that will allow brands to automate and personalize their notifications even further. And it plans to invest in market expansions to make its product better designed for mobile, global commerce.

The funding will allow Santa Monica-based Tapcart to hire another 200 people over the next 24 months, up from the 70 it has currently. These will include new additions across time zones and even in markets like Australia and Europe as it moves toward global expansion.

Shopify’s investment will open up a number of new opportunities as well, including on product, engineering, business strategy and partnerships. It will also help to get Tapcart in front of Shopify’s 1.7 million global merchants.

“There’s still quite a lot of merchants that need better mobile experiences, but have yet to really double down on the mobile effort and get something like a native app,” notes Netsch. “There’s a lot of different ways and methods that merchants are experimenting with mobile growth, and we’re trying to offer all of the best parts of that in a single platform. So there’s tons of expansion for Tapcart to do just that with the existing target addressable market,” he says.

“We believe brands must be where their customers are, and today that means being on their phones,” said Satish Kanwar, VP of product acceleration at Shopify, in a statement. “Tapcart helps merchants create mobile-first shopping experiences that customers love, reinforcing Shopify’s mission to make commerce better for everyone. We look forward to seeing Tapcart expand its success on Shopify with the more than 1.7 million merchants on our platform today.”