Author: azeeadmin

Gather helps people, well, gather in virtual spaces for any reason, whether it be for weddings, magic conventions, or, just a regular day at work. Over the past few months, as remote workers look for better ways to interact with each other, the startup has quietly amassed more than 4 million users, and today, an investment from the same elite Silicon Valley firm that has backed Zoom and Slack.

Gather CEO Phillip Wang tells TechCrunch that his startup has raised $26 million in a Series A round led by Sequoia Capital. Other investors include Index, YC Continuity and angels including Dylan Field, Jeff Weiner and Kevin Hartz.

Wang says his goal for the startup, which he began with friends after they all graduated from Carnegie Mellon, is simple: Focus on serving its most consistent users, bring in customization elements to make virtual spaces feel homey and hire a lot of engineers.

“We’re a much broader communication platform that is going to be used across all things, but we are leaning heavily into the virtual HQ [use case],” Wang said. The 37-person team has embedded features to promote spontaneity, such as “shoulder taps” to prompt a co-worker to chat, or pool tables where employees can circle around and start a virtual game of pool.

The platform also uses spatial audio technology, which is popular in video games, so that users can get the feel of running into each other. The technology basically allows you to hear someone’s voice louder when you are near them, and softer as you walk away. Wang says that it built its own video-conferencing system from scratch because other solutions didn’t work well with spatial technology.

Wang wouldn’t point to any challenges within the company, but instead said that every startup has bugs it has to deal with. No (virtual) fires yet.

Gather is working on helping its users add in more customization to its platform so it’s easier for users to recreate their office space or apartments in real life. The office tour included seeing a corgi on the desk, jack-o’-lanterns and this reporter even added some floor plants to the setup.

Even though work is Gather’s current focus, a majority of its current monthly revenue, which hovers around $400,000, is coming from one-off events. The end goal, says Wang, is a world where someone can leave their Gather office and enter a Gather bar. If the company can successfully get remote teams to join its platform, it can then help those same teams have off-sites, team-building activities or networking events under its platform.

One of the challenges of building a community platform is figuring out monetization without extracting value. This is one of the reasons that Wang, when I first talked to him in November, always wanted to avoid venture capital money (because the incentives might rush the platform into pursuing business models that weren’t user-friendly).

Months later, Wang said his mind changed when he met with Sequoia Capital’s Shaun Maguire and saw an opportunity to scale the metaverse with venture dollars.

“Sequoia in particular helped Unity, the game engine company, figure out their business model and [that model] is unorthodox,” he said. “I’ve always looked at them [thinking] it would be great if we could do something like that.”

As for if Gather is simply a pandemic phenomenon, Maguire says that him and the Sequoia team believes that “work-from-anywhere is here to stay.”

“Phillip and [his] team’s motivations to create Gather precede the pandemic,” he said. “They realized that certain constraints in the physical world hinder your ability to stay connected with people outside of your immediate community — this was merely intensified during the pandemic.”

It’s true: Gather has been in the works for more than 18 months, since Wang and his friends graduated college. The team first tried to create custom wearables that would show you who was available to talk so you could tap into a conversation. When that didn’t work, they pivoted into apps, VR and full-body robotics. With new capital and millions of users, perhaps “Sims for enterprise” might be the route to go.

The alternative asset market showed promise pre-pandemic but amid a broader rally among traditional asset classes, the number of investors searching for and promoting value in the space has exploded. That has, in turn, promoted a pretty major influx of VC dollars into startups building platforms that wrangle these buyers into specific communities.

Enter, Alt. The young startup has received more than $31 million from top investors intrigued by the particularly hot space it has bulked up its expertise in — physical sports trading cards. The company provides a Goat-like marketplace for the cards, authenticating the transactions and providing buyers with the peace of mind that the slice of cardboard they’re dropping several thousands of dollars on is no fake. While entities like NBA Top Shot have rallied a new generation of buyers around blockchain era digital trading cards, its success has been enabled by the excitement that traditional collectibles markets have been garnering recently.

After years of stocking up on sports trading cards, Alt CEO Leore Avidar is just happy to have more people to talk about his obsession with. Like many in the sports card community, Avidar has spent years collecting cards and engaging with forums online, but it’s been an interest he hasn’t been able to share with friends and family given its somewhat fringe appeal. This isn’t the case today, Avidar says, with old collectors re-entering the market as they dust off aged collections and new collectors intrigued by skyrocketing prices and a more connected online community.

“I’ve talked with a lot of people in the community and one of the things I love is how intergenerational this is, I see a lot of like kids and their parents doing this together,” Avidar tells TechCrunch.

As the market has moved more mainstream, platforms like Alt have also begun seeing more investor interest. In the span of a few months, Alt wrapped a pair of funding rounds from investors hungry to embrace a play in the market — a seed round led by First Round and a Series A led by Reddit co-founder Alexis Ohanian’s new firm Seven Seven Six. Other Alt investors include John and Patrick Collison, Kevin Durant, SV Angel, BoxGroup, Sue Wagner, and Jeff Morris’s Chapter One.

Avidar wants Alt’s platform to increase transparency and liquidity in the alternative assets space and make acquiring assets here just as easy as platforms like Robinhood have made buying and selling stocks. Avidar’s central strategy to capturing this market and bringing it to his platform is by significantly undercutting the fees structure of other sites, with Alt charging 1.5% of the total sales price including processing fees.

In addition to authenticating its stock, Alt has had to build some infrastructure that’s somewhat custom to the trading cards market. Users that are less concerned with holding their physical cards and more worried about them being lost or damaged over time can opt to have Alt store their physical cards in a temperature and light-controlled vault (for a fee), ensuring that physical degradations of the card don’t affect its value. One of Alt’s key features that Avidar expects to be popular with collectors is their Zestimate-like Alt Value rating which will give card buyers and sellers a closer idea of what the market value of their card is based on historic transactions and the trending growth metrics.

The team is launching the Alt market with sports trading cards, but plans to expand its reach to other alternative assets as the marketplace matures further, with Avidar highlighting markets like watches, sneakers and art as potential growth areas.

Pakistan has banned TikTok again in the country after reviewing a complaint that said the popular video app hosted immoral and objectionable content.

A high court in the city of Peshawar on Thursday ordered the nation’s telecom authority — Pakistan Telecom Authority (PTA) — to ban TikTok.

In a statement Thursday evening, Pakistan Telecom Authority said it was complying with the order and had “issued directions to the service providers to immediately block access to the TikTok app.”

TikTok had about 33 million users in Pakistan last month, according to mobile insight firm App Annie (data of which an industry executive shared with TechCrunch). There are about 100 million internet users in the South Asian nation.

The Peshawar High Court’s Chief Justice Qaiser Rashid Khan described some videos on TikTok as “unacceptable for Pakistaini society,” and said these videos were “peddling vulgarity,” according to local media reports.

TikTok did not immediately respond to a request for comment.

This isn’t the first time ByteDance’s app has been banned by Pakistan. PTA had briefly banned TikTok in the country last year, saying at the time that the Chinese social app hadn’t addressed concerns about the nature of some videos on its platform despite warnings spanning several months.

Pakistan’s move follows its neighboring nation, India, also banning TikTok last year. New Delhi banned TikTok — and eventually 200 additional apps with links to China — over cybersecurity concerns. Prior to the ban, India was the biggest international market for TikTok, which had amassed over 200 million users in the world’s second largest internet market.

Like India, the government in Pakistan has also sought to assume more control over content on digital services operating in the country in recent years.

While global tech giants, most of which count India as a key overseas market, haven’t made much fuss about New Delhi’s new rules for social media, they banded together in Pakistan late last year and threatened to leave the country over rules proposed by Islamabad.

Through a group called the Asia Internet Coalition (AIC), the tech firms said in November that they were “alarmed” by the scope of Pakistan’s new law targeting internet firms.” In addition to Facebook, Google and Twitter, AIC represents Apple, Amazon, LinkedIn, SAP, Expedia Group, Yahoo, Airbnb, Grab, Rakuten, Booking.com, Line and Cloudflare.

We’re just a few weeks out from the first TC Early Stage 2021 event on April 1-2. This two-day bootcamp helps early-inning founders develop core entrepreneurial skills for startup success. We’re talking essential topics led by experts in their field.

Case in point. Intellectual property is your bread and butter — you need to safeguard it and understand its value from a VC’s perspective. And while you’re an early-stage founder, it’s never too early to learn the ins and outs of mergers and acquisitions because you don’t ever want to get caught flatfooted — especially if your startup takes rapid flight.

With all that in mind, we’ve lined up a group of heavy hitters — from Perkins Coie, Merus Capital and Brainbase — to share their expertise on M&A and protecting IP. Don’t miss these three interactive breakout sessions with some of the best minds in the business.

Creating and Protecting IP Value in Connection with VC Financings (Perkins Coie)

How do venture capital investors value formal Intellectual Property (IP) rights when deciding to fund a technology or life sciences start-up? How do they conduct IP due diligence? How do investors and founders, post-funding, ensure their start-ups pursue an IP strategy that optimizes exit valuation for all? Perkins Coie partners Michael Glenn (Patent Prosecution) and Matt Oshinsky (Emerging Companies Venture Capital) join a seasoned venture capitalist to discuss these and other questions regarding safeguarding IP rights and maximizing the value of all technology development activities. Brought to you by Perkins Coie.

An M&A Playbook for Startup Founders – Lessons from Google & Microsoft (Merus Capital)

One of the most important decisions a founding team makes is when to consider selling the company to a strategic buyer. In this session, learn how to approach acquirors, avoid common pitfalls and maximize your chances for an eye-popping valuation. Hear from Sean Dempsey, founding partner of Merus Capital, who spent 10 years leading acquisitions for Google and Microsoft, and Dave Sobota, VP of Corporate Development at Instacart, and former M&A leader at Google. Brought to you by Merus Capital.

Naming & Protecting Your Company’s Intellectual Property (Brainbase)

You have an idea for a game-changing product or service — what do you call it? Once you’ve picked a name, how do you make sure nobody else is using it? Is the domain and Twitter handle available? Brainbase makes it easy for anyone to file a trademark without a lawyer, and instantly own your brand across all channels. In this session, company co-founder and CEO, Nate Cavanaugh explains the importance of owning your company’s trademark — both for brand protection and for fundraising due diligence. Brought to you by Brainbase.

Whew, that’s some good stuff right there. And you’ll find plenty more whip-smart presentations in the Early Stage 2021 agenda. Check it out and strategize your day.

TC Early Stage 2021: Operations and Fundraising takes place on April 1-2. Get your pass right here and join your colleagues to learn the best ways to build a startup. Pro tip: Attend both Early Stage 2021 events and double your knowledge. TC Early Stage 2021: Marketing and Fundraising runs July 8-9. Early-bird pricing on dual-event tickets remains in play until March 26 at 11:59 pm (PST). Buy yours before the deadline and save up to $100.

So, this is going to sound like a cop out (because, honestly, it kind of is), but the through line for the past week’s robotics investments is variety. That is to say that this week’s round of funding is all over the place, in terms of verticals, which is probably an overall positive sign of the health of robotics investing in general. VCs seem to be pretty bullish about automation across a variety of different sectors.

Medical continues to be a biggie. What’s wild about surgical robots is how long they’ve actually been in practice. The earliest date back to the mid-80s, for things like orthopedic surgeries. As for more mainstream usage, Intuitive’s da Vinci has been around for more than 20 years. At last count, there were somewhere in the neighborhood of 5,000 of these devices deployed, worldwide.

Fittingly, Intuitive cofounder Frederic Moll is among the new advisors for ForSight Robotics. The Israeli startup just raised $10 million in what it calls a “mega-seed round” for its eye surgery platform. Ophthalmological procedures, for what should be obvious reasons, have even less room for error than most surgeries.

The company says it can “democratize” the difficult procedure across different geographies – particularly those where access to professionals may be lacking. Per numbers from the British Journal of Ophthalmology, there are around 3.7 qualified surgeons per million citizens in developing countries. The hope is that getting machines like these in more medical facilities could help level the playing field to some degree.

Here’s an interesting piece on Rani Therapeutics. Robotic pills are an interesting idea that has been floating around research facilities for a long time (MIT, in particular, has been pretty big on it), and it’s great to see someone take steps toward commercializing the concept. Specifically, the company’s product is designed to deliver subcutaneous injections to the small intestine.

Speaking of bringing concepts into practice, one of the more interesting things about Nimble Robotics is the speed with which they’ve deployed into the real world. The company is earning that name – and, apparently, that $50 million Series A raise. It’s also enlisted big names like Fei-Fei Li and Sebastian Thrun as advisors. The company builds on the deep imitation learning concept to deliver adaptable pick and place fulfillment robots.

“We’re not the first robotic pick, place and pack company that’s out there. We’ve grown really fast and have a lot of robots deployed in production,” The CEO told me this week. “A lot of people have show robots in the corner of a warehouse. Right now, we have heaps of robots deployed, and we’re growing really quickly. These are robots that are in production and picking tens of thousands of real orders every single day for each of our customers.”

Bedrock Ocean Exploration’s $8 million raise isn’t huge, by comparison, but there’s plenty of growth potential here. There’s a reason, after all, that Shell ran an underwater exploration XPrize not all that long ago. Launched by Nautilus Labs cofounder Anthony DiMare, the company is deploying advanced underwater robotics to survey the ocean floor for a variety of different applications, from wind farms to laying intercontinental cables.

A couple of last-mile delivery robotics co’s warrant mention this week. I wrote about Refraction.AI, which debuted on our Mobility stage a few years back. The last-mile delivery company built is robot on a bicycle frame, making an ideal form factor for cruising around in bike lines. The Ann Arbor startup just raised $4.2 million and is planning to expand to additional markets.

Bay Area startup, Tortoise, meanwhile, just got a nice viability boost from Albertsons. The grocery mega-conglomerate plans to pilot the company’s robots in a couple of Nor cal Safeway stores. If that goes well, the delivery carts will be arriving in even more West Coast locations.

On the other side of the food chain is Strawbot, another in a long list of ag-tech robotics that has been popping up in recent years. The company says it can offer farmers a labor cost savings of up to one-third by following pickers around. It’s a different take on strawberry crops that Traptic offers. And while it doesn’t actually do the picking, the company certainly wins the name game.

One quick mention of Anki, before we go – er, Digital Dream Labs, I guess. The Pittsburgh-based ed-tech company bought Anki’s IP after the well-funded startup imploded. This week, it announced plans to relaunch the popular Cozmo and Vector robotics toys. Per the piece,

Anki invested tremendous resources into bringing them to life, including the hiring of ex-Pixar and DreamWorks staff to make the robots more lifelike. A lot of thought went into giving the robots a distinct personality, whereas, for instance, Vector’s new owners are making the robot open-source. Cozmo, meanwhile, will have programmable functionality through the company’s app.

So, hello again, old friend.

Coursera’s S-1 dropped last Friday, giving us a glimpse of the financial impact that COVID-19 had on a large edtech company.

We worked through the numbers on the day the filing happened, but here are the core data points: Coursera’s 2020 revenue came to $293.5 million, up 59% from the year prior. During the same period, Coursera had a net loss of nearly $67 million, up 46% from the previous year’s $46.7 million net deficit.

The company is still unprofitable, despite the pandemic’s general lift to its business and customer base. But does it have a path to profits? Piggybacking from our Coinbase S-1 analysis piece, let’s ask five questions concerning Coursera’s S-1 that we’ll answer as we go.

• Has the company’s freemium push been worth it? The freemium model is a popular strategy used by edtech companies to get a large top-of-funnel pool of free users, but the true test as a business is whether you can convert those costly unpaid users into paid customers. Coursera’s historical performance provides key insights into how much this strategy, which edtech companies heavily relied on during the pandemic, costs and creates.
• Will non-consumer revenues bolster its business health? Consumer revenue can be notoriously volatile, so we’ll explore how Coursera’s other offerings play into its overall business, and whether there is growth potential to be found.
• Does its work with universities to point to future profits? A big question for edtech founders is whether they should try to empower — or erase — colleges. Coursera launched a campus product during the pandemic to help colleges offer online instruction, but now we can understand if the company is too dependent on it as a revenue generator.
• Did the pandemic create enough momentum for online education to stay relevant? This is a question poised to never be fully answered, but we’ll explore how one risk factor that Coursera outlined indicates its sentiment on its market’s future, and what trust needs to be built between consumers and businesses.
• Will international revenue prove to be a big opportunity for Coursera? It’s well known that consumer edtech spending in international markets such as China and India outpaces that of the United States. We’ll see if Coursera’s business shows that, or if there are shifting tides on the willingness of people within the States to spend on education.

Our work will help us grok not just Coursera’s performance, but the health of other companies in the edtech space as well. So let’s get into the numbers and work toward better comprehension of one of the most active categories in the startup world, that of turning technology to bear on the global education market.

Has the company’s freemium push been worth it?

Coursera has two freemium lines of business, one targeted at consumers, and the other at a portion of its enterprise business, namely “Coursera for Campus.” In the case of the latter, Coursera made parts of its enterprise offering free to use during the pandemic.

We had two questions: First, can we track the impact of rising freemium usage on Coursera’s growth? And can we weigh that growth against the costs of the service to compare the two? The answer to both is yes.

Regarding the impact of freemium on consumer usage, we can intuit from a sharply rising “registered learner” count in recent quarters that offering a free tier was useful in filling the top of Coursera’s funnel during COVID. Here’s the data: From 2018 to 2019, Coursera’s registered learner count grew from 37.3 million to 46.4 million. Then from 2019 to 2020, it shot to 76.6 million. The accelerated growth was aided by the pandemic, but made possible in part by the fact that there was no cost (no barrier to entry) to sign up for the company’s mass-market offering.

On the enterprise side, we can track the growth of its university-facing work somewhat easily. Enterprise revenue — which encompasses Coursera for Campus, the product that added a free tier in 2020 — has grown in recent years. From 2018 to 2019, the top line from the segment grew from $26.8 million to $48.3 million. Then from 2019 to 2020, it expanded further to $70.8 million. And from 2019 to 2020, the number of paid enterprise customers grew from 240 to 387.

Here, it’s harder to parse the possible impact of the freemium effort. From the numbers, you might wonder where the freemium model might have had an impact; Coursera added around $22 million in enterprise revenue during both 2019 and 2020, so can we find a bump at all?

It’s probably yet to come. The company notes in its S-1 filing that its “Campus Response Initiative [i.e., freemium move] enabled over 4,000 institutions globally, including approximately 10% of all degree-granting institutions, to tap into ready-made, high-quality digital curricula from leading universities with minimal upfront costs.” Coursera goes on to note that it intends to convert those customers as part of its growth plan.

Summarizing: On the consumer side, we can see rapid adoption, and on the enterprise side, we see the potential to accelerate future growth.

That set of mostly good news was not cheap; the company’s sales and marketing costs rose from 31% of revenue in 2019 to 37% in 2020. The company explained it spent $9.2 million more in 2020 than it paid in 2019 to host and support new, free users.

However, given that the company’s full-year revenue was more than 30 times that amount, the expense seems to fit neatly next to the company’s rapidly-growing consumer user base that we feel was boosted by having a freemium offering; whether the enterprise side of the coin will convert is not yet clear, but having an option on future high-margin, low-churn revenues is likely attractive for Coursera and its potential investors.

A key question for edtech startups in the wake of the pandemic is whether a temporary increase of use will actually lead to long-term impact on adoption. Giving your platform away for free can always feel like a question mark; but in edtech, that organic, limitless consumer growth can help it land key enterprise deals eventually and a good reputation. For example, only 3% of Duolingo’s users pay, but they are worth $180 million in bookings.

Coursera’s general success with a freemium business model shows that top-of-funnel edtech, which is good for widespread adoption, can be a lucrative route for founders to consider.

We know that a lot of elements go into the formation of a startup ecosystem. When your city is outside of the major coastal tech centers, it takes a deliberate effort to get such a system off the ground. For Indianapolis, Indiana, it started with the creation of ExactTarget in 2000. When that company was sold to Salesforce for $2.5 billion in 2013, it helped bring a bushel of cash into the startup system.

Today, the venture capital firm that connects back to that ExactTarget acquisition, High Alpha Capital, announced a new $110 million fund. The company concentrates on B2B SaaS startups. Kristian Andersen, partner and co-founder at High Alpha sees the fund in the context of the pandemic and the changes it has brought to how businesses are run.

“We are living in a [time] of almost unrivaled disruption, which has created a host of challenges for individuals, businesses, and society as a whole. In spite (or possibly because) of those challenges, we’re more confident and motivated than ever to help support the next generation of founders as they seek to transform the world through the marriage of entrepreneurship and technology,” Anderson said.

Of course, cash is a key ingredient in any startup system recipe. ExactTarget’s founders were flush with it after the acquisition and Scott Dorsey, one of the firm’s founders says they wanted to build a system from the ground up that included education, a system to encourage entrepreneurship, math skills, a pool of engineering talent and of course, a venture capital firm to drive investment.

“I think of the recipe as talent, capital, support and mentorship. So talent has to be a sharp focus, which is certainly is for us at High Alpha and across the Indianapolis market. The second piece is capital, and markets like Indy often don’t have access to capital and that’s been important that we’re raising our own funds,” he said.

He added, “Thirdly, I think it’s just support and mentorship and that’s really what High Alpha is built to do. We have 40 of us on the team with SaaS experts across design, marketing, product engineering, finance and HR —  all Centers of Excellence you need to start and scale a SaaS company,” he said.

The firm is divided into two parts. The first is High Alpha Studio, which is a kind of incubator for really early stage founders and the second is High Alpha Capital, which is the focus of today’s announcement.

This is third fund for the company. The first was High Alpha One worth $21 million. The second one, High Alpha Two was worth $85 million. Combined with today’s announcement, the total raised across the three funds is $216 million. While the first two funds’ investments were mostly in the Indy area, the plan with the newest one is to expand beyond the region with at least some of the investments.

The firm concentrates on enterprise B2B SaaS companies from pre-seed through Series A investments, so concentrating on early stage companies that it can help nurture and learn from their experiences building ExactTarget into a successful company.

Among the companies they invested in include Attentive, SalesLoft, Zylo, Terminus, The Mom Project, Lessonly, LogicGate, MetaCX and Socio.

The popularity of video and other streamed content like podcasts is continuing to grow at a breakneck speed, and today a startup called Epidemic Sound, a marketplace to source the background music for that media, is announcing a huge round of funding to scale along with it. The Stockholm-based startup has raised $450 million from Blackstone Group and EQT Growth, an equity round that values Epidemic Sound at $1.4 billion.

Epidemic currently features some 32,000 music tracks and 60,000 sound effects, and the plan will be to continue building out the technology on its platform to provide better tools to creators for matching music to media, to expand that catalogue, to grow its customer base, and to take the service global with more localized offerings.

$450 million may sound like a lot of money for a company that — if you’ll excuse the pun — hasn’t made a lot of noise up to now. But the funding is underpinned with some big ambitions and significant metrics.

“It ties into the size of the vision,” co-founder and CEO Oscar Höglund said in an interview. “We are trying to soundtrack the internet. That’s what it comes down to.”

For an idea of how the startup is growing, when we last covered funding for Epidemic Sound in 2019 (a more modest $20 million at a $370 million valuation), it saw its tracks playing for an average of 250 million hours each month on YouTube alone.

Since then, that figure has grown by more than 400% and is now well over 1 billion hours each month. Höglund says that in terms of streams, YouTube videos using music from Epidemic Sound artists are played 1.5 billion times each day. And that’s before you consider the traffic for Epidemic music used across TikTok, Facebook and Instagram, Snapchat and other platforms.

“The macro trend is exploding,” Höglund said. Counting composers and other creators, there are around 150,000 people using its platform today.

But considering that there are around 37 million YouTube channels, and that’s not counting the many other places like Twitch, TikTok, Instagram, Snapchat and elsewhere that you might find people, there is a lot of room to grow.

“We look for huge open-ended markets, and [in this market] Epidemic is growing into an industry leader,” Jon Korngold, the global head of Blackstone Growth who led on its investment, said in an interview.

Two-sided music marketplace

Epidemic Sound, positions itself as a marketplace, where musicians can upload their recorded tracks, and those who want to use them can come with some ideas in mind of what they’d like to find — music is searchable by genre, mood, instruments, tempo, track length and popularity — and then purchase them with pricing based on where they will be used, not how often they will be heard.

It also offers subscriptions for unlimited use based on personal use ($15/month) or commercial use ($49/month). It’s a formula that helped the startup tip into profitability, although at the moment it’s focused more on growth and is back in red.

Founded back in 2009, Epidemic was started by Höglund and Jan Zachrisson to address a specific gap in the market: their aim was to make it easier, and less legally risky, to add music to digital media. It’s funny to think of it, but 11 years ago, the digital music market was still mostly about downloads, and most of them (95%) were illegal. This report from the IFPI at the time didn’t even seem to mention streaming as a concept.

And to Epidemic’s opportunity, there were also no clear, easy to use marketplaces in existence to make music available, and to buy it under easy licensing terms.

“At the core, Epidemic was and is about the restriction free experience for creators,” said Victor Englesson, a partner and investment advisor at EQT Partners. “That was one of the big pain points for user-generated content, and that has been true since its inception. Epidemic Sound controls 100% of the rights in its library.”

Fast forward to today, and the opportunity is less about offering easy licensing, which now seems to be table stakes, but more directly addressing a huge demand.

In a world where video has proven to be a hugely popular with consumers — Cisco previously estimated that video accounted for some 80% of all internet traffic in 2020, but with those numbers dating from pre-pandemic, I wouldn’t be surprised if it was more — it has also proliferated as a medium for creators. Unsurprisingly, a lot of companies have emerged to provide tools for creators to produce and distribute their video content, and that has included providing them with music.

That has led to a pretty crowded market for soundtracking platforms. Others in the same area include the likes of Artlist (which also provides a catalogue of stills and video; it also raised money last year), Upbeat, and Comma.

Platforms themselves also provide music tools to creators, casual and otherwise, and that has extended far beyond YouTube.

On TikTok, tracks themselves go viral and become earworms overnight. And it’s interesting that Snap last year made a move that points to how it might leverage a role for itself in the music creation and dissemination marketplace. Last year, it quietly acquired an app called Voisy, which lets people overlay and edit their own tunes and vocals over a selection of beats, and then share those creations.

Within all that, Epidemic is more than just a simple platform for exchange, however.

In addition to operating its own platform, Epidemic also partners with other platforms where people are creating content, such as Adobe, Canva, Getty and Lightricks, which offer Epidemic’s music streams as part of their one-stop shops.

And there is also the “brain” behind what Epidemic has built. It tracks which music is used the most, and then how that music plays with audiences, it has been building a gradual picture of the music tastes of the global market — a music graph, as it were — information that it in turn uses to help sort music, match it up better with those looking for it, and to help encourage composers to create further tracks to meet demand.

“Because we collect data and because music leaves a footprint, we can see when there is a huge ask for metal lullabies, for example,” said Höglund. “We can then commission more of that kind of track, and it will get picked up.”

The growth of Spotify, and the massive investments made by Apple, Google, Facebook and others into music streaming, tells a story of how the physical music business has declined but music listening very much has not, a trend only accentuated in the last year, where concerts were cancelled and virtual streaming took their place.

Epidemic is an interesting counterpoint to all of these, focusing not on deals with labels and the Billie’s and Beyonce’s of the world, but a very long tail of creators who may have no deals of the sort in their sights.

While companies like Spotify have turned their attention to building out brands as monetization platforms for artists, that was a part of the equation for the start for Epidemic.

Music creatives receive an upfront payment for each track Epidemic buys, with payment varying depending on the track. It also splits the revenue from streaming platforms where the music might later get played.

The company says that on average musicians can make tens of thousands of dollars year, with a select few making hundreds of thousands of dollars per year. “It’s massive distribution and reach,” he said.

And some grow in their own right, not just as anonymous partners to video creators. Ooyy, Kospy and Loving Caliber are three that have crossed over into their own stardom, so the gap between what Epidemic Sound is doing for musicians and what a platform like, say, Spotify or YouTube might do is not as wide as you might think. (That also also points to some very obvious and formidable competitors — or acquirers or partners — down the line.)

Combined with its size and growth, it’s this engine that has helped Epidemic Sound grow in what has become a pretty crowded market.

“This is, at the end of the day, a data business,” said Korngold at Blackstone Growth.

TechCrunch Sessions: Justice covered a wide variety of topics. From DEI to labor to accessibility, the sessions went deep on the issues that matter most in the tech world.

For example, we had an illuminating conversation with Arlan Hamilton around how to find the next unicorn. Congresswoman Barbara Lee, who has represented Oakland and the surrounding East Bay cities for more than two decades, discussed equity in tech and the ‘pipeline problem.’ We even sat down with the heads of DEI at behemoths like Netflix, Facebook and Uber to hear their thoughts on growing diversity within the tech space.

If you didn’t have a chance to join us last week, you can still check out all the conversations we had right here.

• The rise of the tech workers union and what comes next with Parul Koul (Alphabet Workers Union), Grace Recker (OPEIU), and Clarissa Redwine (New York University
• The path forward for essential workers with Vanessa Bain (Gig Workers Collective), Jessica E. Martinez (National Council for Occupational Safety and Health), and Christian Smalls (The Congress of Essential Workers)
• Investors discuss alt-financing and the role of venture capital with Brian Brackeen (Lightship Capital), Astrid Scholz (Zebras Unites), and Sydney Thomas (Precursor Ventures)
• A glimpse inside the minds of tech’s DEI leaders with Sandra Altine (Facebook), Wade Davis (Netflix), and Bo Young Lee (Uber)
• Backstage Capital’s Arlan Hamilton discusses how to find the next unicorn
• Rep. Barbara Lee says the pipeline problem is “a total myth”
• Tech leaders discuss how social media is broken and what we can do about it
• Designing with accessibility in mind: a conversation with Cynthia Bennett (Carnegie Mellon University), Srin Madipalli, and Mara Mills (New York University)
• Pathways for returning citizens with Jason Jones (The Last Mile), Deepti Rohatgi (Slack), and Aly Tamboura (Chan Zuckerberg Initiative)

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Early Stage is the premier ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, product market fit, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included for audience questions and discussion. Use code “TCARTICLE at checkout to get 20 percent off tickets right here.
 

Seth Rogen and four friends-turned-co-founders have been building a weed company for close to ten years, and its products are now available in the United States. The company’s house goods will be available through its website and select dispensaries in Los Angeles will carry Houseplant’s three strains of cannabis.

Nearly every smoker has been there: Deep into a sesh with friends, someone has an idea of starting a weed company. It sounds great in the haze, but the idea fizzles as the high fades. That was ten years ago for co-founders Seth Rogen and Evan Goldberg. Yeah, the same Seth and Evan who starred in and produced some of the last decade’s best comedies. Together they launched Houseplant by teamed up with friends Michael Mohr, Alex Mcatee, and James Weaver and hired Melissa Greenberg as Chief Consumer Officer and Haneen Davis as Chief Commercial Officer.

Called Houseplant, the brand started in Canada in 2019 and launching today in the United States with three weed strains and a collection of design-first house goods.

Houseplant’s CEO Michael Mohr spoke to TechCrunch ahead of Houseplant’s US launch. He explains Houseplant sees itself as able to rise above competitors because its co-founders live the life they’re trying to sell. And to this company, success is not defined by just a financial windfall.

Mohr explains that he’s surprised at how little attention is given to social responsibility and impact within the cannabis industry. The company set up extensive social impact programs that to address three areas: education and advocacy, community empowerment and economic opportunity, and diversity, equity, and inclusion. They are also working with organizations addressing criminal justice and drug policy reform.

“[Houseplant] we recognize the issues,” Mohr said, “We recognize our advantages and our privilege. And we define our success not just financially, but we also grade ourselves on the impact that we’re able to make.”

Mohr pushes back that Houseplant is just another celebrity branding play. He explained that Rogen and Goldberg have shown they can authentically communicate a cannabis lifestyle because that’s how they live.

“[Rogen and Goldberg] put more thought into the cannabis products and the surrounding lifestyle than anyone else because that’s the life they live,” Mohr said. “And it’s through that personal experience we can create a line of house goods that are immediately well received by the cannabis community and the design community.”

As Mohr spoke, the vision became more apparent. Houseplant sees itself as having the potential to be a top-tier cannabis brand and not a side project for some celebrities.

“This industry needs brands that can bring trust and awareness to the space,” Mohr said. “It’s more than using [Rogen and Goldberg’s] name. It’s using their expertise to accomplish the goal and deliver an experience to consumers across the country.”

These claims are easily verified. Look at Seth Rogen’s Twitter account. Over the last week, he’s tweeted several times about Houseplant’s launch, teasing products and showing off the company’s hand-selected strains. Rogen’s enthusiasm is contagious. In one three-minute video, Rogen sits behind a pottery wheel and shows off some excellent pottery skills. In another, he dances (kind of) to a track from a set of vinyl records Houseplant sells. These videos have been viewed millions of times.

Houseplant sees an opportunity to create a friendly cannabis brand. CEO Mohr looks to Apple for inspiration, explaining he hopes Houseplant does for cannabis what Apple did for computers and smartphones by turning an intimidating product into something everyone can use.

The company has three product lines: cannabis flower and THC-infused beverages and a line of house goods. Eventually, Houseplant will release two house good products a month, which will be sold directly to consumers through its website.

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The flower is hand-selected and includes three strains: two Sativa strains and one indica strain. All test high and come from California growers. Pink Moon is an Indica strain, crossed from Tangie and Kosher Kush, and results in a euphoric and creative high without the lively effects of a Sativa. The two Sativa strains claim to result in different effects. Diablo Wind is a cross of Jack Here and G13 Haze for a soaring, cerebral, and euphoric high. Pancake Ice is a cross of Chem Dawg, I-95, and Mandarin Cookies. Rogen tweeted twice he smokes this strain all day. The company says Pancake Ice results in a serene and pleasant body high that is not sedating.

The house goods portion of Houseplant has the same gas found in its weed. These products are uniquely suited for cannabis consumers yet are interesting enough for purchase by anyone. The ashtray even comes with a matching flower vase. Ashtray Set By Seth, as it’s called, retails for $85 and is inspired by Rogen’s new-found love for pottery (which he has been very vocal about on social media). The Block Lighter costs $220 and is clearly designed never to be lost like other lighters. Lastly, Houseplant sells a box set of vinyl records intended to be played with certain strains — you know, a playlist but in real life.

Despite the small line of products, the company seems poised to impact the growing cannabis market.

Houseplant is funded by two of the co-founders, Seth Rogen and Evan Goldberg. CEO Mohr tells TechCrunch they have not taken any outside investment yet.

To launch Houseplant in Canada in 2019, the company partnered with cannabis giant Canopy Growth Corp. Out of this deal, the company brought to market a line of cannabis strains and THC-infused beverages. Canopy Growth is not part of the United States launch.