Author: azeeadmin

Olist, a Brazilian e-commerce marketplace integrator, has raised $23 million in a Series D round extension led by new investor Goldman Sachs Asset Management that brings its total Series D financing to $80 million.

Existing backer Redpoint Ventures, which first put money in Olist in 2015, also participated in the latest round. With this latest infusion, Olist has now raised over $126 million since its 2015 inception. This round is reportedly its last before the company plans to go public, according to Bloomberg.

SoftBank led the first tranch of Olist’s Series D in November as well as the company’s $46 million Series C in 2019. Valor Capital, Velt Partners, FJ Labs, Península and angel Kevin Efrusy had previously invested in the first tranche of the Series D.

Olist connects small businesses to larger product marketplaces to help entrepreneurs sell their products to a larger customer base. The company was founded with the mission of helping small merchants gain market share across the country through a SaaS licensing model to small brick and mortar businesses.

As of October 2019, Olist had more than 7,000 customers and used a drop-shipping model to send products directly from stores to clients around the country, allowing them to grow with a capital-light model.

Today, Olist says its platform provides tools that support “all the stages of an e-commerce operation” with the goal of helping merchants see “rapid increases in sales volume.” It currently has about 25,000 merchants on its platform.

The startup is no doubt benefiting from the pandemic-fueled e-commerce boom taking place all over the world as more people have turned to online shopping. Latin America, in general, has been home to increased e-commerce adoption.

Olist says its revenue tripled to a record number in the first quarter of 2021 compared to the previous year, although it did not provide hard figures. It also reportedly doubled revenue in 2020, according to Bloomberg.

Olist Store, the company’s flagship product, gives merchants a way to manage product listings, logistics and store payments. It also offers “a unique sales experience” through channels such as Mercado Livre, B2W and Via Varejo. The product saw a record GMV in the first half of the year, which was up 2.5 times over the same period in the prior year, the company said.

Last year, Olist launched a new product, Olist Shops, giving users the ability to create a virtual showcase “in less than 3 minutes” that also offers payment checkout tools and integration with logistics operators. Shops has interfaces in Portuguese, English, and Spanish, and since its launch, it has attracted more than 200,000 users in 180 countries, according to Olist.

“The pandemic has accelerated digitalizing business processes around the world, thus spurring e-commerce growth in a surprising way,” said Tiago Dalvi, Olist’s founder and CEO, in a written statement. 

The company plans to use its new capital to invest in technology and products, pursuing new mergers and acquisitions and boosting its internationalization process. This is on top of two acquisitions Olist made last year — Clickspace and Pax Logistica, which gave Olist entry into the heated logistics space with more than 4,000 registered drivers.

Specifically, CFO Eduardo Ferraz said the company is in preliminary discussions with ERPs, retailers, and companies with complementary solutions to its own.

“That is why we also decided to expand the investment in our Series D and bring Goldman Sachs as another relevant investor to our cap table,” he said.

David Castelblanco, managing director and head of Latin America Corporate and Growth Equity Investing for the Goldman Sachs Asset Management, said his firm was impressed with how Olist empowers SMBs to generate more revenue.

“Tiago and the Olist team are incredibly customer oriented and have created an innovative technological solution for their e-commerce clients,” he added.

Olist is operating in an increasingly crowded space. In March, we covered São Paulo-based Nuvemshop’s $90 million raise that was led by Silicon Valley venture firm Accel. That company has developed an e-commerce platform that aims to allow SMBs and merchants to connect more directly with their consumers. 

If you or a loved one has ever undergone a tumor removal as part of cancer treatment, you’re likely familiar with the period of uncertainty and fear that follows. Will the cancer return, and if so, will the doctors catch it at an early enough stage? C2i Genomics has developed software that’s 100x more sensitive in detecting residual disease, and investors are pouncing on the potential. Today, C2i announced a $100 million Series B led by Casdin Capital. 

“The biggest question in cancer treatment is, ‘Is it working?’ Some patients are getting treatment they don’t benefit from and they are suffering the side effects while other patients are not getting the treatment they need,” said Asaf Zviran, co-founder and CEO of C2i Genomics in an interview.

Historically, the main approach to cancer detection post-surgery has been through the use of MRI or X-ray, but neither of those methods gets super accurate until the cancer progresses to a certain point. As a result, a patient’s cancer may return, but it may be a while before doctors are able to catch it.

Using C2i’s technology, doctors can order a liquid biopsy, which is essentially a blood draw that looks for DNA. From there they can sequence the entire genome and upload it to the C2i platform. The software then looks at the sequence and identifies faint patterns that indicate the presence of cancer, and can inform if it’s growing or shrinking.

“C2i is basically providing the software that allows the detection and monitoring of cancer to a global scale. Every lab with a sequencing machine can process samples, upload to the C2i platform and provide detection and monitoring to the patient,” Zviran told TechCrunch.

C2i Genomics’ solution is based on research performed at the New York Genome Center (NYGC) and Weill Cornell Medicine (WCM) by Dr. Zviran, along with Dr. Dan Landau, faculty member at the NYGC and assistant professor of medicine at WCM, who serves as scientific co-founder and member of C2i’s scientific advisory board. The research and findings have been published in the medical journal, Nature Medicine.

While the product is not FDA-approved yet, it’s already being used in clinical research and drug development research at NYU Langone Health, the National Cancer Center of Singapore, Aarhus University Hospital and Lausanne University Hospital.

When and if approved, New York-based C2i has the potential to drastically change cancer treatment, including in the areas of organ preservation. For example, some people have functional organs, such as the bladder or rectum, removed to prevent cancer from returning, leaving them disabled. But what if the unnecessary surgeries could be avoided? That’s one goal that Zviran and his team have their minds set on achieving.

For Zviran, this story is personal. 

“I started my career very far from cancer and biology, and at the age of 28 I was diagnosed with cancer and I went for surgery and radiation. My father and then both of my in-laws were also diagnosed, and they didn’t survive,” he said.

Zviran, who today has a PhD in molecular biology, was previously an engineer with the Israeli Defense Force and some private companies. “As an engineer, looking into this experience, it was very alarming to me about the uncertainty on both the patients’ and physicians’ side,” he said.

This round of funding will be used to accelerate clinical development and commercialization of the company’s C2-Intelligence Platform. Other investors that participated in the round include NFX, Duquesne Family Office, Section 32 (Singapore), iGlobe Partners and Driehaus Capital.

Some weeks are slim pickings when it comes to pulling together interesting robotics stories. This is, decidedly, not one of those weeks. In fact, it’s been a bit tough keeping up with the deluge of robotics activity over the past seven days. I’m going to take that very small sample size as purely anecdotal evidence that investment interest in the category is still white hot.

This is another one of those weeks where investment activity really spanned the entire range of robotics. Surgical, fulfilment and agriculture companies all received funding, along with some key partnerships in groceries and food delivery. All of that, plus underwater snake robots! What’s not to like?

We’ll start with this big Series D from Memic. Following its recent FDA authorization (a huge step for any medical robotics company), the surgical robotics company announced a $96 million raise led by Peregrine Ventures and Ceros. The round more than triples the company’s existing funding of $31.8 million. The Hominis platform is currently designed for transvaginal procedures, though the company is looking to expand to additional surgeries.

A much smaller round for a much newer company, Moray Media just announced a $5.7 million seed – a $3 million increase in the round it had reported earlier this year. The company’s Coral system is being designed for transcatheter mitral valve repair. Like many of these systems, the end goal is increasing the efficacy of procedures across a broad range of different operator skill sets.

Per co-founder and CEO Mark Barrish:

Our Coral platform is designed to empower interventionalists at all skill levels not only to carry out these procedures but also to do so in a cost-efficient manner, with the goal of making certain that millions of additional sick patients who cannot be currently treated will get the life-saving intervention they need.

On the warehouse/fulfillment side, MIT startup Pickle came out of stealth this week, telling TechCrunch that it raised $5.75 million. Silly pun name aside (not to mention a robot called “Dill”), the company says its tech is capable of 1,600 box picks per hour, an impressive number it claims is “double the speed of any competitors.”

As the seed round suggests, we’re still in quite early stages here. Still, it all seems to have come together quite quickly for the company. It’s opening up preorders on its picking system in June and expects to start shipping in early 2022.

Speaking of picking systems, RightHand Robotics announced its third-gen robot. The autonomous system is designed to be faster and pick a wider range of products than its predecessor. The former is certainly a high bar. Speed has long been one of the company’s standouts. The increase is due, in part, to a faster GPU capable of processing data at 6x the speed.

Two stories worth highlighting this week about robotics reaching a wider audience through service partnerships. On Monday, pizza giant Domino’s announced that it would be rolling out (so to speak) robotic delivery via a partnership with Nuro. Customers in Houston can get a pie delivered by the company’s R2 robot. Those buying pizza from the chain’s Woodland Heights location can actually specially request the ‘bot.

Supermarket chain Kroger, meanwhile, is finally delivering on a deal with Ocado, opening a massive warehouse just outside of Cincinnati. The company says the 375,000-square-foot space will employ 1,000 robots alongside 400 human workers. The location will service around 20 brick-and-mortar stores in the area.

On the acquisitions side, indoor farming company AppHarvest announced its intent to buy Root AI. The $60 million deal finds AppHarvest picking up the Boston-based robotics startup with the intention of gaining access to the data gathering functionality of its crop harvesting tech.

“Farming as we’ve known it is broken because of the increasing number of variables such as extreme weather, droughts, fire and contamination by animals that make our food system unreliable,” AppHarvest founder and CEO Jonathan Webb said. “Indoor farming solves for many of those challenges, and the data gathered can exponentially deliver more insights that help us predict and control crop quality and yield.”

Seattle-based Carbon Robotics this week announced a massive weeding robot. The Autonomous Weeder uses computer vision and lasers to get rid of some 100,000 weeds an hour. That certainly seems to fall under the “dull” distinction, and probably a nice win for farmers looking to eliminate undesired plants without the use of herbicides.

On the research side, it’s always fun to see when CMU figures out new uses for its long-standing snake robot. Seems like each time I visit the campus, they’ve cooked up something new, but I’m a little sad not to have seen the project’s newfangled swimming abilities in person. The team is looking to deploy the tech for inspections on hard to reach underwater surfaces like submarines and the bottoms of boats.

Four years ago, MasterClass, a platform that sells celebrity-taught classes, invited chess legend Garry Kasparov to teach a class. He said yes, but soon realized that creating a message that could satisfy a majority of players was a “struggle throughout the process.”

While the class did pretty well, Kasparov found it “a little bit annoying” that he had to downplay concepts and stick to a specific structure. So, now, Kasparov is launching a platform he says has been several years in the making: Kasparovchess.

Kasparovchess will be a platform in which legendary chess players will have free reign to share tips and tricks with players from various levels. Financed by private investors, and media conglomerate Vivendi, the company declined to disclose its total capital raised to date.

The platform, produced by Vivendi, includes documentaries, podcasts, articles and interviews between experts and known players in the chess community. Moe than 1,000 videos have been recorded to date, Kasparov said. Beyond content, Kasparovchess will have an exclusive Discord server attached to it and playing zones.

In many ways, it’s a vertical-specific version of the chess MasterClass he did years ago, with a big focus on community and variety. MasterClass, which is reportedly raising funding that would value it at $2.5 billion, has been a leader in the “edutainment” space, which monetizes off of documentary-style entertainment. One of the unicorn’s biggest characteristics, as Kasparov alluded to earlier, is that it has to appeal to a wide audience so subscribers can hop from one class to another. Within the same month, a user could go from a Kasparovchess class to general pontifications from RuPaul on self expression. The more classes that MasterClass can get you to take, the longer you’ll keep your subscription.

MasterClass might consider its broad view as a differentiator, but it’s clear that Kasparov views it as an opportunity.

Kasparovchess has a monthly or yearly subscription of $13.99 or $119.99, respectively. The majority of lessons from experts and retrospective analysis on games you’ve played sit behind the paywall. The premium product also grants users access to a database of 50,000 manually created puzzles that allows players to train certain skills. The product will be available to the public by the end of month.

A popular competitor already exists: Chess.com. It’s a chess server, forum and networking site that launched in 2005, with premium subscription that ranges between $5 a month or $29 a year. Kasparovchess is significantly more expensive.

Kasparov says his biggest differentiator will be a focus on community. The long-term goal of Kasparovchess is to connect global chess communities with each other, unearth prodigies that might not have access otherwise and give others access to his experiences. He thinks that remote education during the pandemic has shown the need to have more interactive solutions, beyond buzzy promises.

“It’s time to actually switch from what we’re teaching to how students can apply it,” he said. “And that helps us indirectly because chess has been recognized for centuries as a nexus for intelligence and creativity.”

Kasparov became the youngest world chess champion in 1985. He retired from public chess in 2005, and has since launched a foundation to help children have access to chess worldwide. Most recently, he helped advise for “Queen’s Gambit,” a show about a chess prodigy that became Netflix’s most-watched scripted limited series to date on the platform. The show was so ubiquitously popular that sales for chess boards soon skyrocketed.

“I was so happy because it was the first time where we could see chess as a positive factor,” he said. “We had so many years with chess being seen as potential destruction and something that could push kids to the dark area of psychological instability.”

The freshness of this message mixed with an uptick in remote education has given Kasparov confidence that his years-long project is finally ready to launch.

“It’s not just about teaching the game, or playing the game, or debating the game,” he said. Instead, he hopes people who come to the platform focus on the culture of chess, its survival and its seemingly timeless power.

Polestar, Volvo Car Group’s standalone electric performance brand, has raised $550 million in its first external round led by Chongqing Chengxing Equity Investment Fund Partnership, Zibo Financial Holding and Zibo Hightech Industrial Investment.

SK Inc., the South Korean global conglomerate, and a range of other investors also participated.

While this is Polestar’s first external round, the company’s comments suggest it won’t be its last. Polestar said Thursday that the growing market for electric vehicles coupled with advancements in technology that have made EVs more economical have attracted investors. Polestar added that it is in ongoing discussions with global investors about possible additional fund raising.

“Our new investors have recognized that Polestar offers an alluring combination of established industrial and technological capability alongside superlative growth potential as the global auto industry goes electric,” Polestar CEO Thomas Ingenlath said in a statement.

The new capital will diversify’s Polestar’s funding structure and “deepens the pool of resources available to accelerate product development and technological capabilities ahead of launching several ground-breaking cars in the coming years,” the company said in its announcement.

 

Polestar was once a high-performance brand under Volvo Cars. In 2017, the company was recast as an electric performance brand aimed at producing exciting and fun-to-drive electric vehicles — a niche that Tesla was the first to fill and has dominated ever since. Polestar is jointly owned by Volvo Car Group and Zhejiang Geely Holding of China. Volvo was acquired by Geely in 2010.

Since its launch, Polestar has opened a manufacturing facility in China, built a global sales and distribution operation, and launched two vehicles, the Polestar 1 and the all-electric Polestar 2.

The company is adding its lineup, announcing this week that it will produce two additional versions of the Polestar 2 EV with lower base prices.

One new variant will be a new single motor Polestar 2 that retains the 78 kWh battery of the dual motor model, and delivers an estimated EPA range of about 260 miles. Polestar offers the Plus Pack, which extends the range up to 10%. The single motor Polestar 2 will arrive in North America at the end of 2021.

Polestar said it will also a more simply configured dual motor version. The dual motor Polestar 2 has estimated EPA range of 240 miles, and can go even further on a charge when fitted with the new Plus Pack.

The company also announced grander ambitions to build the first climate-neutral car by 2030. That climate neutral badge won’t be earned throough carbon offsets, but by fundamentally change the way the new EV is made, Polestar said, including rethinking every piece of the supply chain, from materials sourcing through to manufacturing, and even by making the vehicle more energy efficient.

 

 

Polestar, Volvo Car Group’s standalone electric performance brand, has raised $550 million in its first external round led by Chongqing Chengxing Equity Investment Fund Partnership, Zibo Financial Holding and Zibo Hightech Industrial Investment.

SK Inc., the South Korean global conglomerate, and a range of other investors also participated.

While this is Polestar’s first external round, the company’s comments suggest it won’t be its last. Polestar said Thursday that the growing market for electric vehicles coupled with advancements in technology that have made EVs more economical have attracted investors. Polestar added that it is in ongoing discussions with global investors about possible additional fund raising.

“Our new investors have recognized that Polestar offers an alluring combination of established industrial and technological capability alongside superlative growth potential as the global auto industry goes electric,” Polestar CEO Thomas Ingenlath said in a statement.

The new capital will diversify’s Polestar’s funding structure and “deepens the pool of resources available to accelerate product development and technological capabilities ahead of launching several ground-breaking cars in the coming years,” the company said in its announcement.

 

Polestar was once a high-performance brand under Volvo Cars. In 2017, the company was recast as an electric performance brand aimed at producing exciting and fun-to-drive electric vehicles — a niche that Tesla was the first to fill and has dominated ever since. Polestar is jointly owned by Volvo Car Group and Zhejiang Geely Holding of China. Volvo was acquired by Geely in 2010.

Since its launch, Polestar has opened a manufacturing facility in China, built a global sales and distribution operation, and launched two vehicles, the Polestar 1 and the all-electric Polestar 2.

The company is adding its lineup, announcing this week that it will produce two additional versions of the Polestar 2 EV with lower base prices.

One new variant will be a new single motor Polestar 2 that retains the 78 kWh battery of the dual motor model, and delivers an estimated EPA range of about 260 miles. Polestar offers the Plus Pack, which extends the range up to 10%. The single motor Polestar 2 will arrive in North America at the end of 2021.

Polestar said it will also a more simply configured dual motor version. The dual motor Polestar 2 has estimated EPA range of 240 miles, and can go even further on a charge when fitted with the new Plus Pack.

The company also announced grander ambitions to build the first climate-neutral car by 2030. That climate neutral badge won’t be earned throough carbon offsets, but by fundamentally change the way the new EV is made, Polestar said, including rethinking every piece of the supply chain, from materials sourcing through to manufacturing, and even by making the vehicle more energy efficient.

 

 

Pearpop, the marketplace for social collaborations between the teeming hordes of musicians, craftspeople, chefs, clowns, diarists, dancers, artists, actors, acrobats, aspiring celebrities and actual celebrities, has raised $16 million in funding that includes what seems like half of Hollywood, along with Alexis Ohanian’s Seven Seven Six venture firm and Bessemer Venture Partners.

The funding was actually split between a $6 million seed funding round co-led by Ashton Kutcher and Guy Oseary’s Sound Ventures and Slow Ventures, with participation from Atelier Ventures and Chapter One Ventures and a $10 million additional investment led by Ohanian’s Seven Seven Six with participation from Bessemer.

TechCrunch first covered pearpop last year and there’s no denying that the startup is on to something. It basically takes Cameo’s celebrity marketplace for private shout-outs and makes it public. Allowing social media personalities to boost their followers by paying more popular personalities to shout out, duet, or comment on their posts.

“I’ve invested in pearpop because it’s been on my mind for a while that the creator economy has resulted in a lot of not equitable outcomes for creators. Where i talked about the missing middle class of the creator economy,” said Li Jin, the founder of Atelier Ventures and author of a critical piece on creator economics, “The creator economy needs a middle class“. 

“When I saw pearpop I felt like there was a really big potential for pearpop to be the one of the creators of the creative middle class. They’ve introduced this mechanism by which larger creators can help smaller creators and everyone has something of value to offer something to everyone else in the ecosystem.”

Jin discovered pearpop through the TechCrunch piece, she said. “You wrote that article and then i reached out to the team,” said Jin.

The idea was so appealing, it brought in a slew of musicians, athletes, actors and entertainers, including: Abel Makkonen (The Weeknd), Amy Schumer, The Chainsmokers, Diddy, Gary Vaynerchuk, Griffin Johnson, Josh Richards, Kevin Durant (Thirty 5 Ventures), Kevin Hart (HartBeat Ventures), Mark Cuban, Marshmello, Moe Shalizi, Michael Gruen (Animal Capital), MrBeast (Night Media Ventures), Rich Miner (Android co-founder) and Snoop Dogg.

“Pearpop has the potential to benefit all social media platforms by delivering new users and engagement, while simultaneously leveling the playing field of opportunity for creators,” said Alexis Ohanian, Founder, Seven Seven Six, in a statement. “The company has created a revolutionary new marketplace model that is set to completely reimagine how we think of social media monetization. As both a social media founder and an investor, I’m excited for what’s to come with pearpop.”

Already Heidi Klum, Loren Gray, Snoop Dogg, and Tony Hawk have gotten paid to appear in social media posts from aspiring auteurs on the social media platform TikTok.

Using the platform is relatively simple. A social media user (for now, that means just TikTok) sends a post that exists on their social feed and requests that another social media user interacts with it in some way — either commenting, posting a video in response, or adding a sound. If the request seems okay, or “on brand”, then the person who accepts the request performs the prescribed action.

Pearpop takes a 25% cut of all transactions with the social media user who’s performing the task getting the other 75%.

The company wouldn’t comment on revenue numbers, except to say that it’s on track to bring in seven figures this year.

Users on the platform set their prices and determine which kinds of services they’re willing to provide to boost the social media posts of their contractors.

Prices range anywhere from $5 to $10,000 depending on the size of a user’s following and the type of request that’s being made. Right now, the most requested personality on the marketplace is the TikTok star, Anna Banana.

These kinds of transactions do have impacts. The company said that personalities on the platform were able to increase their follower count with the service. For instance, Leah Svoboda went from 20K to 141K followers, after a pearpop duet with Anna Shumate.

If this all makes you feel like you’ve tripped and fallen through a Black Mirror into a dystopian hellscape where everything and every interaction is a commodity to be mined for money, well… that’s life.

“What I appreciate most about pearpop is the control it gives me as a creator,” said Anna Shumate, TikTok influencer @annabananaxdddd. “The platform allows me to post what I want and when I want. My followers still love my content because it’s authentic and true to me, which is what sets pearpop apart from all of the other opportunities on social media.”

Talent agencies, too, see the draw. Early adopters include Talent X, Get Engaged, and Next Step Talent and The Fuel Injector, which has added its entire roster of talent to pearpop, which includes Kody Antle, Brooke Monk and Harry Raftus, the company said.

“The initial concept came out of an obvious gap within the space: no marketplace existed for creators of all sizes to monetize through simple, authentic collaborations that are mutually beneficial,” said Cole Mason, co-founder & CEO, pearpop.  “It soon became clear that this was a product that people had been waiting for, as thousands of people rely on our platform today to gain full control of their social capital for the first time starting with TikTok.”

We hope you can make our virtual meetup in Detroit today. The event is free, features a pitch-off with Detroit startups, a talk regarding StockX, and a panel with Detroit VCs on best practices when fundraising.

This event is the second in TechCrunch’s new series, City Spotlights where TechCrunch focuses on an area to highlight successes and bring light to the growing area. Last month we were in Miami and soon we’re going to Pittsburgh.

Today’s event features talks on how to get hired at a startup and a fireside chat with two local investors: Jonathan Triest from Ludlow Ventures, and Patti Glaza from Invest Detroit Ventures. Both are key players in the local area and have a lot to share regarding the best way to raise cash in and out of Detroit. Following the chat with these investors, Ryan Landau, founder of Purpose Jobs, is speaking on startup hiring practices and trends in the Midwest.

The event starts with a talk regarding Detroit’s latest unicorn, StockX. TechCrunch recently published a deep dive on the company, and TechCrunch editor Alex Whilhem is speaking with the author of the feature, Rae Witte.

A pitch-off follows the StockX and features four Detroit-area startups and investors as judges.

Pitch-off companies

• Rivet Work
• Diet ID
• Plain Sight
• FixMyCar

Pitch-off judges

• Jim Tenzillo, VP at Invest Michigan
• Dawn Batts, Capital Strategist at TechTown and Co-Founder of Commune Angels
• Ben Bernstein, Principal at Invest Detroit Ventures

Register here!

Dan Gilbert loves his hometown of Detroit. He loves it so much that the billionaire founder of what would eventually become the mortgage lender Quicken Loans has poured at least $2.5 billion into rehabilitating buildings in the heart of the city.

He has also invested in many companies that are now tenants in those buildings, along with the restaurants and retailers that have made the scene far livelier than before Gilbert began his campaign to reestablish Detroit as one of the most important cities in the country.

We had a chance to talk recently with Gilbert, a father of five whose other notable interests include the highly valued e-commerce marketplace StockX, which he cofounded in 2015, and the Cleveland Cavaliers NBA team, which he acquired — along with their arena in downtown Cleveland — for a reported $375 million in 2005.

He shared why Detroit should be top of mind for founders from across the U.S. We also talked a bit about sports and why he chose a traditional IPO path for Rocket Companies, the parent company of Quicken that he took public in August of last year. Excerpts from that conversation follow.

TC: As a native Clevelander and longtime Cavs fan, I’m curious about your connection to Cleveland.

D: When the Cavs came up for sale in 2005 or 2004, the banker who was selling them called us up because our group had made an attempt at the Milwaukee Brewers baseball team, and they thought we may want to buy the team. And the seller at the time [businessman Gordan Gund] wanted a very simple, non-complex process with one buyer. So they called us up, and we decided to do it.

TC: Well, you got us back in the game, so to speak, so thank you. In the meantime, you’ve obviously been very focused on Detroit, where you grew up and went to college. What’s the case for Detroit over other Midwestern cities?

DG: First of all, one of the metrics that companies use when they decide on a city is how many people they can reach within a five-hour drive, because they figure that talent within that five-hour circumference is willing to drive in or at least explore that city. And there are 60 million people within five hours of Detroit, including in Chicago, Toronto, all of Michigan, all of Ohio, Indianapolis, Pittsburgh — I could go on and on.

The same is true of universities. There are something like 30 major universities within a five-hour drive, including the University of Michigan, Michigan State, Wayne State, Carnegie Mellon, and Ohio State, and those are just the bigger schools. There are also a bunch of great schools in Canada that specialize in software development. Collectively, that’s a huge advantage when it comes to tapping into possible talent.

Detroit has had so many decades of bad PR that it’s hard to get over that image without seeing it for yourself, but once you spend two hours here, you get it. You feel the energy. You feel the passion. You see the young people.

TC: Do you think Detroit is better suited for companies of a certain size? Things are changing quickly but there’s a learning curve in some cities regarding the specific needs of startups. I talked with Drive Capital in Columbus recently, and they said they’d had to do a lot to educate landlords. Of course, you’re among the biggest landlords in Detroit. 

DG: That’s a really great insight from Drive. At this point, Detroit is home to both [big and small companies]. We first moved around 1,400 people from the suburbs into downtown Detroit in the summer of 2010 and we now have more than 20,000 people at this tech company, which Quicken Loans clearly is. And [that kind of hub] allows you to create an ecosystem of people and ideas that interest VCs, so that’s become one part of it.

We control a couple million square feet of real estate ourselves, but then we have another four or five million square feet that we’re building or that’s already bought, so we can accommodate startups and be flexible around their growth. But on top of that, we have three locations in downtown Detroit that companies like Pinterest and Snap have used; you’ve got existing big tech companies with locations here like Amazon, which has an engineering office with more than 500 people downtown, and Google, which has a 50,000-square foot office, and Microsoft, which has 50,000 square feet in the same building I’m in. So it’s not just the startup scene.

TC: Are there enough venture dollars in Detroit to support what you’re trying to build? The Drive team also talked about missing opportunities because they don’t have the bandwidth to fund everything they are seeing. They need backup. Do you?

DG: Certain VCs have discovered us. Ron Conway of SV Angel, for example, fell in love with Detroit a couple of years ago and he has exposed us to everybody in his network. He has invested in a lot of our deals here. And there are others. Google Ventures and Battery Ventures came in early. DST Global, General Atlantic, GGV Capital, Altimeter, Whale Rock Capital, Tiger Global have put money into startups here.

It’s kind of a new thing for us. Quicken Loans just went public after 35 years, and we never really raised much VC money because we never had to because of our cash flow. So it’s a little bit of a new thing for us with StockX; we never really had a startup blow up that suddenly. But every brick in the wall helps.

TC: Speaking of StockX, its tagline is the “stock market of things.” Might one of those things be non-fungible tokens at some point? A lot of people are suddenly buying and selling digital items.

DG: Like NBA Top Shot? We love that model. We have some similar models that we’re working on right now. We’re in research and development on some things that are very close to it. I have four teenagers out of five kids at home, and I can tell you that’s definitely the hot thing right now.

TC: What is the next step for StockX? Is it an IPO?

DG: I think the next step for StockX will probably be an IPO. It’s just a matter of when. Probably sometime in 2022. I’m not saying anything official here; I’m just saying there’s a good chance it will.

TC: Do you have strong feelings about traditional IPOs versus other ways that companies are going public? You took Quicken public through a traditional IPO. Another Detroit-based mortgage company, United Wholesale Mortgage, more recently took the SPAC route instead.

DG: I think [a StockX offering] would probably be traditional only because, to be honest with you, I don’t know much about the complications and all the details of trying to do it a different way. We had success with Quicken Loans, so that’s what we’re coming off of.

Saikat Dey, the founder of Detroit’s own Guardhat Technologies, got his start working in the steel industry. His last job, before founding Guardhat, was serving as the chief executive officer of Severstal International, the multinational steel conglomerate whose headquarters were in Dearborn, Mich.

There, managing the global business of the fourth largest steelmaker by volume and revenue, with 3,600 employees in Mississippi, Michigan, and the coal mines of West Virginia, Dey became obsessed with safety, he said.

Beyond tracking cash flow and EBITDA, the typical numbers companies use, Dey said that worker safety was another measurement that effected compensation. “One of the key metrics is how well and how safe we keep our frontline workers,” Dey said. 

Dey’s concerns over safety at his plants is what led him to reach out to union leadership and begin developing the technology that would form the core of Guardhat’s offerings.

The company pitches a multi-product intelligent safety system that integrates wearable technology and proprietary software to detect, alert, and prevent hazardous industrial work-related incidents.

Investors including Dan Gilbert’s Detroit Venture Partners, General Catalyst, and RTP Ventures, the venture investment firm led by Ru-Net Holdings co-founder, Leonid Boguslavsky, are backing Dey’s vision, which also has buy-in from the most important audience of all, the unions representing the workers that use the company’s tech.

Made in Detroit, built for the world’s industrial workers

Roughly fifteen workers are killed every day on the job in industrial jobs like mining, metals and oil and gas and another 3 million people are injured every year. For executives in the industry, the issue is as much a financial concern as it is an ethical one. At Severstal, 40 percent of Dey’s salary was tied to worker safety, he said.

In fact, the idea for Guardhat hit Dey while he was walking the floor of the company’s Detroit-area steel plant. On one of his regular walks through the factory Dey said he wandered past a man working on a piece of equipment when the employee’s carbon monoxide alarm started to buzz. Instead of trying to find the source of the leak, the man turned off his monitor.

“You’re taking about a steel facility in the heart of Detroit having the largest blast furnace in North America,” said Dey. “Whatever that individual was doing, it could have led to a catastrophic accident.”

That’s what inspired Guardhat’s technology that Dey said was designed to answer a few simple, situational questions that apply to any factory anywhere in the world: Where are you? What conditions do you face? When can help get to you? Those are the questions that Guardhat’s technology is designed to answer.

“We didn’t have effective means to prevent or if an accident happens to intervene with timely information,” Dey said. 

The technology may have been designed by executives, but it was made in consultation with the heads of the Detroit area unions, to ensure that workers would actually use the product.

“We decided that we wanted to do this in September 2014,” Dey said. “And when I was struggling with whether to scratch that itch and start the business, the union guys said go for it and do it…. I was a person of color with a $6 billion P&L running one of the six largest steelmakers in the U.S. building this literally out of the garage. It took a lot of guts, stupidity, and it took a lot of support from regular friends at the UAW.” 

That collaboration ensured that the union’s workers were comfortable that the information wasn’t being generated and stored in a way that employees would not feel that they were being monitored unnecessarily or punitively.

From prototype to product

The company’s first product was the HC1 — a helmet that comes jam-packed with sensor equipment. “You want to put it on something that everyone wears and is mandated to wear,” Dey said.

Initially the thought was to just create the wearable, but over time Dey and his team realized that the device alone wouldn’t be enough. “The helmet is just another form factor… [and] whatever the form factor, you need to know how you make this information the single source of truth for the platform of all things that surround the worker.”

Like dozens of other Detroit-area startups that came before them, when Dey and his team needed to raise cash, they first turned to Dan Gilbert.

Gilbert tested the prototype by running around a building and asking the GuardHat team if they could find him and tell him where they thought he was.

With Gilbert on board, the product design firm frog labs came into the picture and so did 3M. By then, it was time to test the prototype.

“I still remember the first day we were in testing in a third party certified lab in Akron, Ohio,” sad Dey. These guys were dropping a metal ball from 5 meters and each one of those puppies was $3,000 a-piece and 27 of those hats got ground down to powder,” Dey said. “We failed every test because we didn’t know how to build a helmet.”

Assistance from frog and others brought the device over the finish line and it’s now being used by over 5,000 workers and prevented or alerted workers to at least 2,000 potentially dangerous incidents. 

For Dey, the business could only have come from Detroit. “The Detroit thing is symbolic,” he said. It’s a symbol of the school of hard knocks that educated its founding team in the ways these heavy industries.