Author: azeeadmin

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

For this week’s deep dive, Alex and Natasha dug into Danny’s latest mega-project: A long, fascinating, and deeply-reported series into the world of disaster tech. It’s all about the market, startups, and their backers, so it was perfect fare for our Wednesday episode, in which we dive deep into a single topic.

Part 1: The most disastrous sales cycle in the world

Part 2: Data was the new oil, until the oil caught fire

Part 3: When the Earth is gone, at least the internet will still be working

Part 4: The human-focused startups of the hellfire

We were super curious why Danny had picked disaster tech to niche into, as we hadn’t heard that much about it, frankly. But past the fact that it’s a world where sales cycles can last as long as House Congressional tenures, there was quite a lot to get into:

• Consumer: Dorothy wants to to provide bridge loans to folks who get rekt by a hurricane. As government, and insurance money can take ages to arrive, the startup could be onto something. and Perimeter wants to take data, and help folks actually know where to go when there is am emergency.
• Data: Danny’s deep dive into the world of data in the disaster space came with a provocative headline, but the market backs him up. In this space we took a look at Cornea, which just raised $15 million to help firefighters better understand conflagrations, and Gridware raised $5.3 million to install boxes on power lines. Very smart boxes, we should add.
• Mental health: We end with a riff on how companies are preparing humans to better handle disaster before and after it strikes. Alto Neuroscience, which is a stealthy startup founded by Amit Etkin, is looking to solve PTSD with brain-wave data, while NeuroFlow uses polling, and savvy collabs with practitioners to monitor emerging symptoms. Psychedelic therapeutics also might have some opportunity to shine thanks to Osmind.

The series was fun to mine through, and expect Danny’s byline to be all over the topic in the coming weeks. Talk soon, unless – actually especially, if – all of hell breaks loose!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday morning at 7:00 a.m. PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

Treet, a company rethinking the resale retail market, announced the close of a $2.8 million seed round today. The financing comes from Bling Capital, Matchstick Ventures, Techstars, BABM Ventures, BBG Ventures, Green Meadow, Interlace Ventures, V1.VC, and Alante Capital.

Despite the fact that selling old clothes is the most sustainable, and most financially beneficial way to dispose of them, the process can be super tedious for both sellers and buyers.

Treet’s approach to simplifying its market and lowering consumer friction is to go through brands. Essentially, Treet helps brands set up their own resale sites where buyers and sellers can list and find items. Because Treet is tied in with the brand itself, sellers can easily list their items based on SKU and buyers can trust that the items they’re browsing are the real deal.

For brands, they get the chance to own their secondhand market and potentially gain new customers. The company says that 30 percent of buyers on Treet haven’t purchased directly from the brand before.

Involving brands benefits Treet in a big way, too. Brands are best positioned to know who has their items, and can send emails and messaging encouraging resale through Treet. They also have the distribution to put potential customers on to the resale site.

Treet gives sellers two options to redeem their funds. If they choose cash, a ten percent cut goes to the brand and a ten percent cut goes to Treet. If they choose to redeem via brand credit, only Treet takes 10 percent.

The startup’s customer list currently includes Boyish, Coclico, Altar, and époque évolution, with Goodfair and Birdy Grey launching soon.

“The greatest challenge is brands being hesitant about getting into resale,” said cofounder and CEO Jake Disraeli. “For a brand, promoting a used item with lesser margins is kind of a scary thought. We’re starting to prove out that they can expand their potential customer base and give brands the chance to participate alongside their customers who are reselling items on third-party platforms anyway.”

The clothing and fashion startup market has been active in recent quarters. The Real Real went public back in 2019, Poshmark went public last year, while fellow resale company ThreadUp held an IPO this year, and UK-based Lyst raised $85 million the other week. Treet’s funding fits neatly into the theme.

Insurtech is picking up steam in a big way, but startup Parametrix thinks there is still plenty of room left to innovate. The company, which today announced the close of a $17.5 million funding round, offers insurance policies for companies who rely on third-party cloud providers, ecommerce services, payment gateways and CRM systems.

In essence, downtime from one of these services can cost a company millions in revenue, but it’s completely out of their control. A fact of life, one might say, until Parametrix.

Parametrix approaches this problem in two key ways.

The first is that the company has developed a system that continuously monitors third-party IT services all over the world, giving the startup a direct view into service interruptions down to the millisecond. This system is also aware of the interdependent nature of many of these services and incorporates that into the precision monitoring.

The second differentiator is its pricing model, which uses millions of data points to help customers estimate the financial risk involved with downtime and lets them customize the payout per hour of downtime. The model spits out a premium based on that payout rate.

“We’ve all felt the pain of downtime,” said co-founder and CTO Neta Rozy. “When any part of the infrastructure goes down, the companies go down as well. Normally, when you have a pain caused by technology, you try to fix it with technology. Downtime is inevitable. It doesn’t matter how great your infrastructure is or how redundant your platform is and there are almost always direct financial losses.”

The combination of the pricing model and monitoring system means that this product that looks very different from the insurance policies we’re used to in another key way. Parametrix is named for the parametric model it uses. Essentially, if the insurer event happens, the customer gets compensation immediately, with no claim process and no proof of loss.

Parametrix is not a carrier itself, but rather partners with incumbent insurance carriers to payout customers. As you can imagine, when it rains it pours for something like downtime insurance, where infrastructure downtime could affect many policy holders at once.

The Parametrix team is 30 people, and gender diversity is split down the middle across the entire team, including upper management and the founding team.

FirstMark Capital and F2 Venture Capital led this new $17.5 million funding round.

The big media consolidation continues — day after rumors swirled around Amazon’s acquisition of MGM, the online massive retailer confirmed today that it will be acquiring the nearly 100-year-old studio for a cool $8.45 billion.

The deal is another big step toward bolster Amazon’s fight in the streaming wars, with some 4,000 films. The list includes the James Bond and Rocky series and classics ranging from Fargo to Robocop to Silence of the Lambs. Also included are more than 17,000 TV shows. Once the deal closes, the short term impact will be unfettered access for Amazon’s Prime Video platform, giving the service a leg up against rivals like Netflix, Hulu and HBO Max.

As we’ve seen with the launch of studio streaming platforms like Disney+, the deal will also likely result in that content being pulled from competing services, once existing contracts end. “The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” Amazon Studios/Prime Video SVP Mike Hopkins said in a release. “It’s very exciting and provides so many opportunities for high-quality storytelling.”

Amazon also says it will be making efforts to preserve older films. The press material includes all of the standard language you would expect about marrying the old with the new. Here’s MGM Board Chairman, Kevin Ulrich, “I am very proud that MGM’s Lion, which has long evoked the Golden Age of Hollywood, will continue its storied history, and the idea born from the creation of United Artists lives on in a way the founders originally intended, driven by the talent and their vision. The opportunity to align MGM’s storied history with Amazon is an inspiring combination.”

Amazon has, of course, already been making an aggressive push into original content through its own production studio and distribution. On the film side, it has produced notable titles like Manchester By the Sea, which nabbed a screenwriting Oscar and its list of shows includes Transparent. The company is also embarking on a massive (and massively expensive) series based on Lord of Rings.

As ever with these massive deals, the acquisition is pending all sorts of regulator scrutiny.

Developing…

Facebook this week will begin to publicly roll out the option to hide Likes on posts across both Facebook and Instagram, following earlier tests beginning in 2019. The project, which puts the decision about Likes in the hands of the company’s global user base, had been in development for years, but was deprioritized due to the COVID-19 pandemic and the response work required on Facebook’s part, the company says.

Originally, the idea to hide Like counts on Facebook’s social networks was focused on depressurizing the experience for users. Often, users faced anxiety and embarrassment around their posts if they didn’t receive enough Likes to be considered “popular.” This problem was particularly difficult for younger users who highly value what peers think of them — so much so that they would take down posts that didn’t receive enough Likes.

Like-chasing on Instagram, especially, also helped create an environment where people posted to gain clout and notoriety, which can be a less authentic experience. On Facebook, gaining Likes or other forms of engagement could also be associated with posting polarizing content that required a reaction.

As a result of this pressure to perform, some users grew hungry for a “Like-free” safer space, where they could engage with friends or the wider public without trying to earn these popularity points. That, in turn, gave rise to a new crop of social networking and photo-sharing apps such as Minutiae, Vero, Dayflash, Oggl and, now, newcomers like Dispo and newly viral Poparazzi.

Though Facebook and Instagram could have chosen to remove Likes entirely and take its social networks in a new direction, the company soon found that the metric was too deeply integrated into the product experience to be fully removed. One key issue was how the influencer community today trades on Likes as a form of currency that allows them to exchange their online popularity for brand deals and job opportunities. Removing Likes, then, is not necessarily an option for these users.

Instagram realized that if it made a decision for its users, it would anger one side or the other — even if the move in either direction didn’t really impact other core metrics, like app usage.

“How many likes [users] got, or other people got — it turned out that it didn’t actually change nearly as much about the experience, in terms of how people felt or how much they use experience, as we thought it would. But it did end up being pretty polarizing,” admitted Instagram head, Adam Mosseri. “Some people really liked it and some people really didn’t.”

“For those who liked it, it was mostly what we had hoped — which is that it depressurized the experience. And, for those who didn’t, they used Likes to get a sense for what was trending or was relevant on Instagram and on Facebook. And they were just super annoyed that we took it away,” he added. This latter group sometimes included smaller creators still working on establishing a presence across social media, though larger influencers were sometimes in favor of Like removals. (Mosseri name-checked Katy Perry as being pro Like removals, in fact.)

Ultimately, the company decided to split the difference. Instead of making a hard choice about the future of its online communities, it’s rolling out the “no Likes” option as a user-controlled setting on both platforms.

On Instagram, both content consumers and content producers can turn on or off Like and View counts on posts — which means you can choose to not see these metrics when scrolling your own Feed and you can choose whether to allow Likes to be viewed by others when you’re posting. These are configured as two different settings, which provides for more flexibility and control.

On Facebook, meanwhile, users access the new setting from the “Settings & Privacy” area under News Feed Settings (or News Feed Preferences on desktop). From here, you’ll find an option to “Hide number of reactions” to turn this setting off for both your own posts and for posts from others in News Feed, groups and Pages.

The feature will be made available to both public and private profiles, Facebook tells us, and will include posts you’ve published previously.

Instagram last month restarted its tests on this feature in order to work out any final bugs before making the new settings live for global users, and said a Facebook test would come soon. But it’s now forging ahead with making the feature available publicly. When asked why such a short test, Instagram told TechCrunch it had been testing various iterations on this experience since 2019, so it felt it had enough data to proceed with a global launch.

Mosseri also pushed back at the idea that a decision on Likes would have majorly impacted the network. While removal of Likes on Instagram had some impact on user behavior, he said, it was not enough to be concerning. In some groups, users posted more — signaling that they felt less pressure to perform, perhaps. But others engaged less, Mosseri said.

“Often people say, ‘oh, this has a bunch of Likes. I’m gonna go check it out,’ ” the exec explained. “Then they read the comments, or go deeper, or swipe to the carousel. There’s been some small effects — some positive, some negative — but they’ve all been small,” he noted. Instagram also believes users may toggle on and off the feature at various times, based on how they’re feeling.

In addition, Mosseri pointed out, “there’s no rigorous research that suggests Likes are bad for people’s well-being” — a statement that pushes back over the growing concerns that a gamified social media space is bad for users’ mental health. Instead, he argued that Instagram is still a small part of people’s day, so how Likes function doesn’t affect people’s overall well-being.

“As big as we are, we have to be careful not to overestimate our influence,” Mosseri said.

He also dismissed some of the current research pointing to negative impacts of social media use as being overly reliant on methodologies that ask users to self-report their use, rather than measure it directly.

In other words, this is not a company that feels motivated to remove Likes entirely due to the negative mental health outcomes attributed to its popularity metrics.

It’s worth mentioning that another factor that could have come into play here is Instagram’s plan to make a version of its app available to children under the age of 13, as competitor TikTok did following its FTC settlement. In that case, hiding Likes by default — or perhaps adding a parental control option — would necessitate such a setting. Instagram tells TechCrunch that, while it’s too soon to know what it would do with a kids app, it will “definitely explore” a no Likes by default option.

Facebook and Instagram both told TechCrunch the feature will roll out starting on Wednesday but will reach global users over time. On Instagram, that may take a matter of days.

Facebook, meanwhile, says a small percentage of users will have the feature Wednesday — notified through an alert on News Feed — but it will reach Facebook’s global audience “over the next few weeks.”

Lightrun, a startup that helps developers debug their live production code, today announced that it has raised a $23 million Series A round led by Insight Partners. Glilot Capital Partners, which led the company’s $4 million seed round, also participated in this round.

What makes Lightrun stand out in a sea of monitoring startups is its focus on developers (more so than IT teams) and its ability to help developers debug their production code right from their IDEs. With a few keystrokes, they can also instrument the code for monitoring, but the key here is that Lightrun offers what the company calls an “ops-free” process that puts the developers in control. This “shift-left” approach moves the application monitoring process away from ops-centric tools like Splunk and New Relic and instead puts them right into the workspaces with which developers are already familiar.

“The observability market has been very oriented towards IT operators. When an IT operator gets that dreaded page that a service is down, they see health metrics on running instances on servers and have a variety of failover methods and ways to restore service health,” Lightrun co-founder and CEO Ilan Peleg explained. “And they do this all natively on the same interfaces that they use every day for systems management. But when a developer gets that dreaded notification that there is a bug, it’s like the early stages of a crime scene investigation that has no suspects and usually only minor clues.”

Currently, the service only supports Java and the IntelliJ development environment, but the team plans to expand its language and platform coverage by adding support for Python and Node.js, as well as additional IDEs.

“We’ve seen a number of observability solutions joining the market, but found Lightrun’s shift-left approach to be truly unique,” said Teddie Wardi, managing director, Insight Partners, who led the round and will join the board of directors. “The main point of shifting observability to the left in the software development lifecycle is incorporating observability into the day-to-day developer workflow. Lightrun makes observability more ops-free, real-time and ergonomic to the development process than any other platform, and we believe they are in a position to capture a large international market of development teams at enterprises that prioritize rapid feature development and frequent shipping.”

The company recently launched a free community edition of its service and introduced a set of new integrations with services like Datadog, IntelliJ IDEA, Logz.io, Prometheus, Slack and StatsD. Some of Lightrun’s current customers include Taboola, Sisense and Tufin.

The company doubled its employee count over the course of the last year. It will continue to use the new funding to expand its developer community and hire across functions. The company also plans to expand its U.S. presence.

 

Another sizable raise for a pet (cats and dogs) tracking company this morning. Austria-based Tractive has announced a $35 million Series A, led by Guidepost Growth Equity. The round is the company’s first since 2013, when its GPS-based tracker first hit the market.

Along with the funding round, the company is also announcing its official push into the U.S. market — though Tractive has had some presence here through a “soft launch” of an LTE tracker over the summer. That product apparently made the States its fastest growing market, in spite of a lack of official presence.

The funding will go toward its expansion into the U.S./North American market, along with additional scaling and headcount. For the latter, the company is already naming a new EVP of North America and a VP of marketing.

“Tractive is like a seatbelt for your dog or cat. It provides coverage when and where they need it,” said co-founder and CEO Michael Hurnaus in a release. “We designed Tractive to deliver the best possible experience, with up-to-the-second information, so that all pet parents can care for their dogs and cats the way they want and deserve — whether that means monitoring activity levels to reduce the risk of obesity or tracking a dog or cat that slipped out of the yard.”

Also new is the arrival of an upgraded tracker from the company, primarily focused on improved battery life. The big change is the use of Wi-Fi to reduce battery strain when a pet is in the home. The company says it’s able to bump up battery life up to 5x. The tracker is available for $50 in the U.S., plus a monthly subscription fee.

In February, smart pet collar maker Fi announced a $30 million Series B.

 

Imagine if Google Docs was end-to-end encrypted so that not even Google could access your documents. That’s Skiff, in a nutshell.

Skiff is a document editor with a similar look and feel to Google Docs, allowing you to write, edit and collaborate in real-time with colleagues with privacy baked in. Because the document editor is built on a foundation of end-to-end encryption, Skiff doesn’t have access to anyone’s documents — only users, and those who are invited to collaborate, do.

It’s an idea that has already attracted the attention of investors. Skiff’s co-founders Andrew Milich (CEO) and Jason Ginsberg (CTO) announced today that the startup has raised $3.7 million in seed funding from venture firm Sequoia Capital, just over a year since Skiff was founded in March 2020. Alphabet chairman John Hennessy, former Yahoo chief executive Jerry Yang, and Eventbrite co-founders Julia and Kevin Hartz also participated in the round.

Milich and Ginsberg told TechCrunch that the company will use the seed funding to grow the team and build out the platform.

Skiff isn’t that much different from WhatsApp or Signal, which are also end-to-end encrypted, underneath its document editor. “Instead of using it to send messages to a bunch of people, we’re using it to send little pieces of documents and then piecing those together into a collaborative workspace,” said Milich.

But the co-founders acknowledged that putting your sensitive documents in the cloud requires users to put a lot of trust into the startup, particularly one that hasn’t been around for long. That’s why Skiff published a whitepaper with technical details of how its technology works, and has begun to open source parts of its code, allowing anyone to see how the platform works. Milich said Skiff has also gone through at least one comprehensive security audit, and the company counts advisors from the Signal Foundation to Trail of Bits.

It seems to be working. In the months since Skiff soft-launched through an invite-only program, thousands of users — including journalists, research scientists and human rights lawyers — use Skiff every day, with another 8,000 users on a waitlist.

“The group of users that we’re most excited about are just regular people that care about privacy,” said Ginsberg. “There are just so many privacy communities and people that are advocates for these types of products that really care about how they’re built and have sort of lost trust in big companies.”

“They’re using us because they’re really excited about the vision and the future of end-to-end encryption,” he said.

Uptycs, a Boston-area startup that uses data to help understand and prevent security attacks, announced a $50 million Series C today, 11 months after announcing a $30 million Series B. Norwest Venture Partners led the round with participation from Sapphire Ventures and ServiceNow Ventures.

Company co-founder and CEO Ganesh Pai says that he was still well capitalized from last year’s investment, and wasn’t actually looking to raise funds, but the investors came looking for him and he saw a way to speed up some aspects of the company’s roadmap.

“It was one of those things where the round came in primarily as a function of execution and success to date, and we decided to capitalize on that because we know the partners and raised the capital so that we could use it meaningfully for a couple of different things, primarily sales and marketing acceleration,” Pai said.

He said that part of the reason for the company’s success over the last year was that the pandemic generated more customer interest as people moved to work from home, the SolarWinds hack happened and companies were moving to the cloud faster. “We provided a solution which was telemetric powered and very insightful when it came to solving their security problems and that’s what led to triple digit growth over the last year,” he said.

But Pai says that the company has not been sitting still in terms of the platform. While last year, he described it primarily as a forensic security data solution, helping customers figure out what happened after a security issue has happened, he says that the company has begun expanding on that vision to include all four main areas of security including being proactive, reactive, predictive and protective.

The company started primarily in being reactive by figuring what happened in the past, but has begun to expand into these other areas over the last year, and the plan is to continue to build out that functionality.

“In the context of SolarWinds, what everyone is trying to figure out is how soon into the supply chain can you figure out what could be potentially wrong by looking at indications of behavior or indications of compromise, and our ability to ingest telemetry from a diverse set of sources, not as a bolt on solution, but something which is built from the ground up, resonated really well,” Pai explained.

The company had 65 employees when we spoke last year for the Series B. Today, Pai says that number is approaching 140 and he is adding new people every week with a goal to get to around 200 people by the end of the year. He says as the company grows, he keeps diversity top of mind.

“As we grow and as we raise capital diversity has been something which has been a high priority and very critical for us,” he said. In fact, he reports that more than 50% of his employees come from under-represented groups whether it’s Latinx, Black or Asian heritage.

Pai says that one of the reasons he has been able to build a diverse workforce is his commitment to a remote workplace, which means he can hire from anywhere, something he will continue to do even after the pandemic ends.