Social audio app Clubhouse has now topped 8 million global downloads, despite still being in a prelaunch, invite-only mode, according to new data released today by mobile data and analytics firm App Annie. Per its estimates, Clubhouse grew from over 3.5 million global downloads as of Feb. 1, 2021, to reach 8.1 million by Feb. 16, 2021. This sharp growth is attributed to several high-profile guest appearances, including those from Tesla and SpaceX founder Elon Musk and Facebook CEO Mark Zuckerberg, for example.
App Annie also estimates that 2.6 million-plus of the total global installs took place in the U.S. — a figure that highlights the app’s global appeal.
Image Credits: App Annie
Clubhouse, meanwhile, hasn’t officially shared its total number of downloads or registered users, but CEO Paul Davison revealed in January the app had grown to 2 million weekly active users — which means the app’s monthly active user figure and total registered user count would be much higher. Other estimates have put the app’s registered user base in between 6 million and 10 million (the latter citing unnamed sources.)
Reached for comment on App Annie’s report, Clubhouse said it doesn’t publish user numbers.
It’s worth noting that app install figures aren’t typically a valid proxy for registered users as many people often download an app but then never open it or sign up. But in Clubhouse’s case, the two figures could be more closely aligned as people who are installing the app are motivated to join. The app is not open to the public, so the users installing the app are likely either in possession of a Clubhouse invite or are aiming to get one from a friend or trusted contact who’s already joined.
Also in the new report, App Annie noted how Clubhouse phenomenon is having an impact on the larger app ecosystem. Local rivals to Clubhouse offering their own social audio experience have also gained downloads in recent days, including Dizhua, Tiya and Yalla, which have attracted users in China, the U.S., Egypt, Saudi Arabia and Turkey.
Dizhua, for example, has 174,000 downloads; Tiya has 6 million; and Yalla has 34.5 million, the report says. Yalla, notably, has been live since 2016, but Clubhouse’s popularity is giving it a boost.
Beyond this small handful, there’s been an explosion of social audio experiences, including those in from startups like Sonar, Locker Room, Quilt, Yoni Circle, Roadtrip, Space, Capiche.fm, Yac, Cappuccino, and others. Twitter, meanwhile, is building its own Clubhouse rival with Spaces, which it said yesterday will expand to Android by March. Facebook, too, is reportedly planning a Clubhouse competitor.
The question on everyone’s minds now is how much of this growth is sustainable. Skeptics say Clubhouse lends itself to those who tend to dominate conversations by talking at length; that many of its conversations are just kind of boring; that the app favors the “hustle culture”-obsessed; and so on. Some also wonder to how well social audio apps will fare when the world reopens post-COVID and there’s more to do — including the return traditional networking events.
But these concerns don’t take into account that social audio has the potential to carve out space for itself by supplanting users’ other mobile spoken-word audio activities, like podcast listening or audiobooks. Of course, questions about Clubhouse’s future can’t really be answered now, as the pandemic continues, and with an app that’s not fully open to the public.
Volta Energy Technologies, the energy investment and advisory services firm backed by some of the biggest names in energy and energy storage materials, has closed on nearly $90 million of a targeted $150 million investment fund, according to people familiar with the group’s plans.
The venture investment vehicle compliments an $180 million existing commitment from Volta’s four corporate backers — Equinor, Albermarle, Epsilon, and Hanon Systems — and comes at a time when interest in energy storage technologies couldn’t be stronger.
As the transition away from internal combustion engines and hydrocarbon fuels begins in earnest companies are scrambling to drive down costs and improve performance of battery technologies that will be necessary to power millions of electric cars and store massive amounts of renewable energy that still needs to be developed.
“Capital markets have noticed the enormity of the opportunity in transitioning away from carbon,” said Jeff Chamberlain, Volta’s founder and chief executive.
Born of an idea that that began in 2012 when Chamberlain began talking with the head of the Department of Energy under the Obama Administration back in 2014. What began when Chamberlain was at Argonne National Lab leading the development of JCESR, the lead lab in the US government’s battery research consortium, evolved into Volta Energy as Chamberlain pitched a private sector investment partner that could leverage the best research from National Laboratories and the work being done by private industry to find the best technology.
Support for the Volta project remained strong through both public and private institutions, according to Chamberlain. Even under the Trump Administration, Volta’s initiative was able to thrive and wrangle some of the biggest names in the chemicals, utility, oil and gas and industrial thermal management to invest in a $180 million fund that could be evergreen, Chamberlain said.
According to people with knowledge of the organizations plans, the new investment fund which is targeting $150 million but has hard cap of $225 million would compliment the existing investment vehicle to give the firm more firepower as additional capital floods into the battery industry.
Chamberlain declined to comment specifically on the fund, given restrictions, but did say that his firm had a mandate to invest in technology that is battery and storage related and that “enables the ubiquitous adoption of electric vehicles and the ubiquitous adoption of solar and wind.”
Back during the first cleantech boom the brains behind Volta witnessed a lot of good money getting poured into bad ideas and vaporware that would never amount to commercial success, said Chamberlain. Volta was formed to educate investors on the real opportunities that scientists were tracking in energy storage and back those companies with dollars.
“We knew that investors were throwing money into a dumpster fire. We knew it could have a negative impact on this transition to carbon,” Chamberlain said. “Our whole objective was to help guide individuals deploying massive amounts of their personal wealth and move it from putting money into an ongoing dumpster fire.”
That mission has become even more important as more money floods into the battery market, Chamberlain said.
The SPAC craze set off by Nikola’s public offering in electric vehicles and continuing through QuantumScape’s battery SPAC through a slew of other electric vehicle offerings and into EV charging and battery companies has made the stakes higher for everyone, he said.
Chamberlain thinks of Volta’s mission as finding the best emerging technologies that are coming to market across the battery and power management supply chain and ensure that as manufacturing capacity comes online, the technology is ready to meet growing demand.
“Investors who do not truly understand the energy storage ecosystem and its underlying technology challenges are at a distinct disadvantage,” said Goldman Sachs veteran and early Volta investor Randy Rochman, in a statement. “It has become abundantly clear to me that nothing happens in the world of energy storage without Volta’s knowledge. I can think of no better team to identify energy storage investment opportunities and avoid pitfalls.”
The new fund from Volta has already backed a number of new energy storage and enabling technologies including: Natron, which develops high-power, fire-safe Sodium-ion batteries using Prussian blue chemistry for applications that demand a quick discharge of power; Smart Wires, which develops hardware that acts as a router for electricity to travel across underutilized power lines to optimize the integration of renewable power and energy storage on the grid; and Ionic Materials, which makes solid lithium batteries for both transportation and grid applications. Ionic Materials’ platform technology also enables breakthrough advancements in other growing markets, such as 5G mobile, and rechargeable alkaline batteries.
Volta Energy Technologies, the energy investment and advisory services firm backed by some of the biggest names in energy and energy storage materials, has closed on nearly $90 million of a targeted $150 million investment fund, according to people familiar with the group’s plans.
The venture investment vehicle compliments an $180 million existing commitment from Volta’s four corporate backers — Equinor, Albermarle, Epsilon, and Hanon Systems — and comes at a time when interest in energy storage technologies couldn’t be stronger.
As the transition away from internal combustion engines and hydrocarbon fuels begins in earnest companies are scrambling to drive down costs and improve performance of battery technologies that will be necessary to power millions of electric cars and store massive amounts of renewable energy that still needs to be developed.
“Capital markets have noticed the enormity of the opportunity in transitioning away from carbon,” said Jeff Chamberlain, Volta’s founder and chief executive.
Born of an idea that that began in 2012 when Chamberlain began talking with the head of the Department of Energy under the Obama Administration back in 2014. What began when Chamberlain was at Argonne National Lab leading the development of JCESR, the lead lab in the US government’s battery research consortium, evolved into Volta Energy as Chamberlain pitched a private sector investment partner that could leverage the best research from National Laboratories and the work being done by private industry to find the best technology.
Support for the Volta project remained strong through both public and private institutions, according to Chamberlain. Even under the Trump Administration, Volta’s initiative was able to thrive and wrangle some of the biggest names in the chemicals, utility, oil and gas and industrial thermal management to invest in a $180 million fund that could be evergreen, Chamberlain said.
According to people with knowledge of the organizations plans, the new investment fund which is targeting $150 million but has hard cap of $225 million would compliment the existing investment vehicle to give the firm more firepower as additional capital floods into the battery industry.
Chamberlain declined to comment specifically on the fund, given restrictions, but did say that his firm had a mandate to invest in technology that is battery and storage related and that “enables the ubiquitous adoption of electric vehicles and the ubiquitous adoption of solar and wind.”
Back during the first cleantech boom the brains behind Volta witnessed a lot of good money getting poured into bad ideas and vaporware that would never amount to commercial success, said Chamberlain. Volta was formed to educate investors on the real opportunities that scientists were tracking in energy storage and back those companies with dollars.
“We knew that investors were throwing money into a dumpster fire. We knew it could have a negative impact on this transition to carbon,” Chamberlain said. “Our whole objective was to help guide individuals deploying massive amounts of their personal wealth and move it from putting money into an ongoing dumpster fire.”
That mission has become even more important as more money floods into the battery market, Chamberlain said.
The SPAC craze set off by Nikola’s public offering in electric vehicles and continuing through QuantumScape’s battery SPAC through a slew of other electric vehicle offerings and into EV charging and battery companies has made the stakes higher for everyone, he said.
Chamberlain thinks of Volta’s mission as finding the best emerging technologies that are coming to market across the battery and power management supply chain and ensure that as manufacturing capacity comes online, the technology is ready to meet growing demand.
“Investors who do not truly understand the energy storage ecosystem and its underlying technology challenges are at a distinct disadvantage,” said Goldman Sachs veteran and early Volta investor Randy Rochman, in a statement. “It has become abundantly clear to me that nothing happens in the world of energy storage without Volta’s knowledge. I can think of no better team to identify energy storage investment opportunities and avoid pitfalls.”
The new fund from Volta has already backed a number of new energy storage and enabling technologies including: Natron, which develops high-power, fire-safe Sodium-ion batteries using Prussian blue chemistry for applications that demand a quick discharge of power; Smart Wires, which develops hardware that acts as a router for electricity to travel across underutilized power lines to optimize the integration of renewable power and energy storage on the grid; and Ionic Materials, which makes solid lithium batteries for both transportation and grid applications. Ionic Materials’ platform technology also enables breakthrough advancements in other growing markets, such as 5G mobile, and rechargeable alkaline batteries.
LOT Network, the non-profit that helps businesses of all sizes and across industries defend themselves against patent trolls by creating a shared pool of patents to immunize themselves against them, today announced that TikTik parent ByteDance is joining its group.
ByteDance has acquired its fair share of patents in recent years and is itself embroiled in a patent fight with its rival Triller. That’s not what joining the LOT Network is about, though. ByteDance is joining a group of companies here that includes the likes of IBM, the Coca-Cola Company, Cisco, Lyft, Microsoft, Oracle, Target, Tencent, Tesla, VW, Ford, Waymo, Xiaomi and Zelle. In total, the group now has over 1,300 members.
As LOT CEO Ken Seddon told me, the six-year-old group had a record year in 2020, with 574 companies joining it and bringing its set of immunized patents to over 3 million, including 14% of all patents issued in the U.S.
Among the core features of LOT, which only charges members who make more than $25 million in annual revenue, is that its members aren’t losing control over the patents they add to the pool. They can still buy and trade them as before, but if they decide to sell to what the industry calls a ‘patent assertion entity,’ (PAE) that is, a patent troll, they automatically provide a free licence to that patent to every other member of the group. This essentially turns LOT into what Seddon calls a ‘flu shot ‘ against patent trolls (and one that’s free for startups).
“The conclusion that people are waking up to is, is that we’re basically like a herd, we’re herd immunization, effectively,” Seddon said. “And every time a company joins, people realize that the community of non-members shrinks by one. It’s like those that don’t have the vaccination shrinks — and they are, ‘wait a minute, that makes me a higher risk of getting sued. I’m a bigger target.’ And they’re like, ‘wait a minute, I don’t want to be the target.'”
ByteDance, he argues, is a good example for a company that can profit from membership in LOT. While you may think of patents as purely a sign of a company’s innovativeness, for corporate lawyers, they are also highly effective defense tools (that can be used aggressively as well, if needed). But it can take a small company years to build up a patent portfolio. But a fast-growing, successful company also becomes an obvious target for patent trolls.
“When you are a successful company, you naturally become a target,” Seddon said. “People become jealous and they become threatened by you. And they covet your money and your revenue and your success. One of the ways that companies can defend themselves and protect their innovation is through patents. Some companies grow so fast, they become so successful, that their revenue grows faster than they can grow their patent portfolio organically.” He cited Instacart, which acquired 250 patents from IBM earlier this month, and Airbnb, which was sued by IBM over patent infringement in early 2020 (the companies settled in December), as examples.
ByteDance, thanks to the success of TikTok, now finds itself in a situation where it, too, is likely to become a target of patent trolls. The company has started acquiring patents itself to grow its portfolio faster and now it is joining LOT to strengthen its protection there.
“[ByteDance] is being a visionary and trying to get ahead of the wave,” Seddon noted. “They are a successful global company that needs to develop a global IP strategy. Historically, PAEs were just a US problem, but now ByteDance has to worry about PAEs being an issue in China and Europe as well. By joining LOT, they protect themselves and their investments from over 3 million patents should they ever fall into the hands of a PAE.”
Lynn Wu, Director and Chief IP Counsel, Global IP and Digital Licensing Strategy at ByteDance, agrees. “Innovation is core to the culture at ByteDance, and we believe it’s important to protect our diverse technical and creative community,” she said in today’s announcement. “As champions for the fair use of IP, we encourage other companies to help us make the industry safer by joining LOT Network. If we work together, we can protect the industry from exploitation and continue advancing innovation, which is key to the growth and success of the entire community.”
There’s another reason companies are so eager to join the group now, though, and that’s because these patent assertion entities, which had faded into the background a bit in the mid- to late-2010s, may be making a comeback. The core assumption here is a bit gloomy: many companies seem to assume we’re in for an economic downturn. If we hit a recession, a lot of patent holders will start looking at their patent portfolios and start selling off some their more valuable patents in order to stay afloat. Since beggars can’t be choosers, that often means they’ll sell to a patent troll if that troll is the highest bidder. Last year, a patent troll sued Uber using a patent sold by IBM, for example (and IBM gets a bit of a bad rap for this, but, hey, it’s business).
That’s what happened after the last recession — though it typically takes a few years for the effect to be felt. Nothing in the patent world moves quickly.
Now, when LOT members sell to a troll, that troll can’t sue other LOT members over it. Take IBM, for example, which joined LOT last year.
“People give IBM a lot of grief and criticism for selling to PAEs, but at least IBM is giving everybody a chance to get a free license,” Seddon told me. “IBM joined LOT last year and what IBM is effectively doing is saying to everybody, ‘look, I joined LOT.’ And they put all of their entire patent portfolio into LOT. And they’re saying to everybody, ‘look, I have the right to sell my patents to anybody I want, and I’m going to sell it to the highest bidder. And if I sell it to a patent troll and you don’t join LOT — and if you get sued by a troll, is that my fault or your fault? Because if you join LOT, you could have gotten a free license.'”
CoinDesk reported yesterday that crypto trading startup Coinbase is being valued at $77 billion on private exchanges. And Forbes reported that Stripe is being valued at $115 billion on secondary markets, where private shares can be bought and sold, albeit in a limited fashion.
I instantly wanted to write a piece headlined “Beware those super hot secondary market valuations,“ but after a little digging, I cannot. It turns out that the public markets are so hot, there is historical precedent for seemingly aggressive secondary market transactions being conservative compared to later IPO valuations. And there is further precedent for private market transactions that are more conservative in price terms than venture-determined valuations also working out.
The hot equities market is making stock pickers out of many startup investors, regardless of whether they are leading priced rounds of buying shares on modern secondary markets.
It’s hard to overvalue a startup when the public market is willing to double its valuation the moment it starts to trade.
Let’s explore the new prices for Coinbase and Stripe by starting with a look at their dated private valuations, their new, reported secondary prices and where some companies that went public with notable secondary prices wound up trading today.
Its new $77 billion price tag might seem somewhat pedestrian in that mix, but recall that we’re largely discussing the valuations associated with Coinbase set by buyers not in the know; retail secondary buyers of shares in the cryptocurrency exchange are probably not its board members.
So, the public is, to some degree, repricing Coinbase. The question is whether those prices make any sense. Hold your answer: we have more work to do.
Stripe at $115 billion on secondary exchanges is perhaps bonkers, or perhaps nothing more than rationality. In its last round, a $600 million Series G that came in mid-2020, Stripe was valued at around $36 billion. And, it is rumored to be raising capital at a $100 billion valuation.
Census, a startup that helps businesses sync their customer data from their data warehouses to their various business tools like Salesforce and Marketo, today announced that it has raised a $16 million Series A round led by Sequoia Capital. Other participants in this round include Andreessen Horowitz, which led the company’s $4.3 million seed round last year, as well as several notable angles, including Figma CEO Dylan Field, GitHub CTO Jason Warner, Notion COO Akshay Kothari and Rippling CEO Parker Conrad.
The company is part of a new crop of startups that are building on top of data warehouses. The general idea behind Census is to help businesses operationalize the data in their data warehouses, which was traditionally only used for analytics and reporting use cases. But as businesses realized that all the data they needed was already available in their data warehouses and that they could use that as a single source of truth without having to build additional integrations, an ecosystem of companies that operationalize this data started to form.
The company argues that the modern data stack, with data warehouses like Amazon Redshift, Google BigQuery and Snowflake at its core, offers all of the tools a business needs to extract and transform data (like Fivetran, dbt) and then visualize it (think Looker).
Tools like Census then essentially function as a new layer that sits between the data warehouse and the business tools that can help companies extract value from this data. With that, users can easily sync their product data into a marketing tool like Marketo or a CRM service like Salesforce, for example.
Image Credits: Census
“Three years ago, we were the first to ask, ‘Why are we relying on a clumsy tangle of wires connecting every app when everything we need is already in the warehouse? What if you could leverage your data team to drive operations?’ When the data warehouse is connected to the rest of the business, the possibilities are limitless.” Census explains in today’s announcement. “When we launched, our focus was enabling product-led companies like Figma, Canva, and Notion to drive better marketing, sales, and customer success. Along the way, our customers have pulled Census into more and more scenarios, like auto-prioritizing support tickets in Zendesk, automating invoices in Netsuite, or even integrating with HR systems.“
Census already integrates with dozens of different services and data tools and its customers include the likes of Clearbit, Figma, Fivetran, LogDNA, Loom and Notion.
Looking ahead, Census plans to use the new funding to launch new features like deeper data validation and a visual query experience. In addition, it also plans to launch code-based orchestration to make Census workflows versionable and make it easier to integrate them into enterprise orchestration system.
Census, a startup that helps businesses sync their customer data from their data warehouses to their various business tools like Salesforce and Marketo, today announced that it has raised a $16 million Series A round led by Sequoia Capital. Other participants in this round include Andreessen Horowitz, which led the company’s $4.3 million seed round last year, as well as several notable angles, including Figma CEO Dylan Field, GitHub CTO Jason Warner, Notion COO Akshay Kothari and Rippling CEO Parker Conrad.
The company is part of a new crop of startups that are building on top of data warehouses. The general idea behind Census is to help businesses operationalize the data in their data warehouses, which was traditionally only used for analytics and reporting use cases. But as businesses realized that all the data they needed was already available in their data warehouses and that they could use that as a single source of truth without having to build additional integrations, an ecosystem of companies that operationalize this data started to form.
The company argues that the modern data stack, with data warehouses like Amazon Redshift, Google BigQuery and Snowflake at its core, offers all of the tools a business needs to extract and transform data (like Fivetran, dbt) and then visualize it (think Looker).
Tools like Census then essentially function as a new layer that sits between the data warehouse and the business tools that can help companies extract value from this data. With that, users can easily sync their product data into a marketing tool like Marketo or a CRM service like Salesforce, for example.
Image Credits: Census
“Three years ago, we were the first to ask, ‘Why are we relying on a clumsy tangle of wires connecting every app when everything we need is already in the warehouse? What if you could leverage your data team to drive operations?’ When the data warehouse is connected to the rest of the business, the possibilities are limitless.” Census explains in today’s announcement. “When we launched, our focus was enabling product-led companies like Figma, Canva, and Notion to drive better marketing, sales, and customer success. Along the way, our customers have pulled Census into more and more scenarios, like auto-prioritizing support tickets in Zendesk, automating invoices in Netsuite, or even integrating with HR systems.“
Census already integrates with dozens of different services and data tools and its customers include the likes of Clearbit, Figma, Fivetran, LogDNA, Loom and Notion.
Looking ahead, Census plans to use the new funding to launch new features like deeper data validation and a visual query experience. In addition, it also plans to launch code-based orchestration to make Census workflows versionable and make it easier to integrate them into enterprise orchestration system.
In Humio, CrowdStrike gets a company that will provide it with the ability to collect unlimited logging information. Most companies have to pick and choose what to log and how long to keep it, but with Humio, they don’t have to make these choices with customers processing multiple terabytes of data every single day.
Humio CEO Geeta Schmidt writing in a company blog post announcing the deal described her company in similar terms to Scalyr, a data lake for log information:
“Humio had become the data lake for these enterprises enabling searches for longer periods of time and from more data sources allowing them to understand their entire environment, prepare for the unknown, proactively prevent issues, recover quickly from incidents, and get to the root cause,” she wrote.
That means with Humio in the fold, CrowdStrike can use this massive amount of data to help deal with threats and attacks in real time as they are happening, rather than reacting to them and trying to figure out what happened later, a point by the way that SentinelOne also made when it purchased Scalyr.
“The combination of real-time analytics and smart filtering built into CrowdStrike’s proprietary Threat Graph and Humio’s blazing-fast log management and index-free data ingestion dramatically accelerates our [eXtended Detection and Response (XDR)] capabilities beyond anything the market has seen to date,” CrowdStrike CEO and co-founder George Kurtz said in a statement.
While two acquisitions don’t necessarily make a trend, it’s clear that security platform players are suddenly seeing the value of being able to process the large amounts of information found in logs, and they are willing to put up some cash to get that capability. It will be interesting to see if any other security companies react with a similar move in the coming months.
Humio was founded in 2016 and raised just over $31 million, according to Pitchbook Data. Its most recent funding round came in March 2020, a $20 million Series B led by Dell Technologies Capital. It would appear to be a decent exit for the startup.
CrowdStrike was founded in 2011 and raised over $480 million along the way before going public in 2019. The deal is expected to close in the first quarter, and is subject to typical regulatory oversight.
California’s Department of Motor Vehicles is warning of a potential data breach after a contractor was hit by ransomware.
The Seattle-based Automatic Funds Transfer Services (AFTS), which the DMV said it has used for verifying changes of address with the national database since 2019, was hit by an unspecified strain of ransomware earlier this month.
In a statement sent by email, the DMV said that the attack may have compromised “the last 20 months of California vehicle registration records that contain names, addresses, license plate numbers and vehicle identification numbers.” But the DMV said AFTS does not have access to customers’ Social Security numbers, dates of birth, voter registration, immigration status or driver’s license information, and was not compromised.
The DMV said it has since stopped all data transfers to AFTS and has since initiated an emergency contract to prevent any downtime.
AFTS is used across the United States to process payments, invoices and verify addresses. Several municipalities have already confirmed that they are affected by the data breach, suggesting it may not be limited to California’s DMV. But it’s not known what kind of ransomware hit AFTS. Ransomware typically encrypts a company’s files and will unlock them in exchange for a ransom. But since many companies have backups, some ransomware groups threaten to publish the stolen files online unless the ransom is paid.
AFTS could not be immediately reached for comment. Its website is offline, with a short message: “The website for AFTS and all related payment processing website [sic] are unavailable due to technical issues. We are working on restoring them as quickly as possible.”
“We are looking at additional measures to implement to bolster security to protect information held by the DMV and companies that we contract with,” said Steve Gordon, the director of the state’s DMV.
The rise of “Zoom University” was only possible because edtech wasn’t ready to address the biggest opportunity of the past year: remote learning at scale. Of course, the term encapsulates more than just Zoom, it’s a nod to how schools had to rapidly adopt enterprise video conferencing software to keep school in session in the wake of closures brought on by the virus’ rapid spread.
Now, nearly a year since students were first sent home because of the coronavirus, a cohort of edtech companies is emerging, emboldened with millions in venture capital, ready to take back the market.
The new wave of startups are slicing and dicing the same market of students and teachers who are fatigued by Zoom University, which — at best — often looks like a gallery view with a chat bar. Four of the companies that are gaining traction include Class, Engageli, Top Hat and InSpace. It signals a shift from startups playing in the supplemental education space and searching to win a spot in the largest chunk of a students day: the classroom.
While each startup has its own unique strategy and product, the founders behind them all need to answer the same question: Can they make digital learning a preferred mode of pedagogy and comprehension — and not merely a backup — after the pandemic is over?
Answering that question begins with deciding whether videoconferencing is what online, live learning should look like.
Ground up
“This is completely grounds up; there is no Zoom, Google Meets or Microsoft Teams anywhere in the vicinity,” said Dan Avida, co-founder of Engageli, just a few minutes into the demo of his product.
Engageli, a new startup founded by Avida, Daphne Koeller and Serge Plotkin, raised $14.5 million in October to bring digital learning to college universities. The startup wants to make big lecture-style classes feel more intimate, and thinks digitizing everything from the professor monologues to side conversations between students is the way to go.
Engageli is a videoconferencing platform in that it connects students and professors over live video, but the real product feature that differentiates it, according to Avida, is in how it views the virtual classroom.
Upon joining the platform, each student is placed at a virtual table with another small group of students. Within those pods, students can chat, trade notes, screenshot the lecture and collaborate, all while hearing a professor lecture simultaneously.
“The FaceTime session going on with friends or any other communication platform is going to happen,” Avida said. “So it might as well run it through our platform.”
The tables can easily be scrambled to promote different conversation or debates, and teachers can pop in and out without leaving their main screen. It’s a riff on Zoom’s breakout rooms, which let participants jump into separate calls within a bigger call.
There’s also a notetaking feature that allows students to screenshot slides and live annotate them within the Engageli platform. Each screenshot comes with a hyperlink that will take the student back to the live recording of that note, which could help with studying.
“We don’t want to be better than Zoom, we want to be different than Zoom,” Avida said. Engageli can run on a variety of products of differing bandwidth, from Chromebooks to iPads and PCs.
Engageli is feature-rich to the point that it has to onboard teachers, its main customer, in two phases, a process that can take over an hour. While Avida says that it only takes five minutes to figure out how to use the platform to hold a class, it does take longer to figure out how to fully take advantage of all the different modules. Teachers and students need to have some sort of digital savviness to be able to use the platform, which is both a barrier to entry for adoption but also a reason why Engageli can tout that it’s better than a simple call. Complexity, as Avida sees it, requires well-worth-it time.
The startup’s ambition doesn’t block it from dealing with contract issues. Other video conferencing platforms can afford to be free or already have been budgeted into. Engageli currently charges $9.99 or less per student seat for its platform. Avida says that with Zoom, “it’s effectively free because people have already paid for it, so we have to demonstrate why we’re much better than those products.”
Engageli’s biggest hurdle is another startup’s biggest advantage.
Built on top of Zoom
Class, launched less than a year ago by Blackboard co-founder Michael Chasen, integrates exclusively with Zoom to offer a more customized classroom for students and teachers alike. The product, currently in private paid beta, helps teachers launch live assignments, track attendance and understand student engagement levels in real time.
While positioning an entire business on Zoom could lead to platform risk, Chasen sees it as a competitive advantage that will help the startup stay relevant after the pandemic.
“We’re not really pitching it as pandemic-related,” Chasen said. “No school has only said that we’re going to plan to use this for a month, and very few K-12 schools say we’re only looking at this in case a pandemic comes again.” Chasen says that most beta customers say online learning will be part of their instructional strategy going forward.
Investors clearly see the opportunity in the company’s strategy, from distribution to execution. Earlier this month, Class announced it had raised $30 million in Series A financing, just 10 weeks after raising a $16 million seed round. Raising that much pre-launch gives the startup key wiggle room, but it also gives validation: a number of Zoom’s earliest investors, including Emergence Capital and Bill Tai, who wrote the first check into Zoom, have put money into Class.
“At Blackboard, we had a six to nine month sales cycle; we’d have to explain that e-learning is a thing,” Chasen said, who was at the LMS business for 15 years. “[With Class] we don’t even have to pitch. It wraps up in a month, and our sales cycle is just showing people the product.
Unlike Engageli, Class is selling to both K-12 institutions and higher-education institutions, which means its product is more focused on access and ease of use instead of specialized features. The startup has over 6,000 institutions, from high schools to higher education institutions, on the waitlist to join.
Image Credits: Class
Right now, Class software is only usable on Macs, but its beta will be available on iPhone, Windows and Android in the near future. The public launch is at the end of the quarter.
“K-12 is in a bigger bind,” he said, but higher-ed institutions are fully committed to using synchronous online learning for the “long haul.”
“Higher-ed has already been taking this step towards online learning, and they’re now taking the next step,” he said. “Whereas with a lot of K-12, I’m actually seeing that this is the first step that they’re taking.”
The big hurdle for Class, and any startup selling e-learning solutions to institutions, is post-pandemic utility. While institutions have traditionally been slow to adopt software due to red tape, Chasen says that both of Class’ customers, higher ed and K-12, are actively allocating budget for these tools. The price for Class ranges between $10,000 to $65,000 annually, depending on the number of students in the classes.
“We have not run into a budgeting problem in a single school,” he said. “Higher ed has already been taking this step towards online learning, and they’re now taking the next step, whereas K-12, this is the first step they’re taking.”
Asynchronously, silly
Engageli and Class are both trying to innovate on the live learning experience, but Top Hat, which raised $130 million in a Series E round this past week, thinks that the future is pre-recorded video.
Top Hat digitizes textbooks, but instead of putting a PDF on a screen, the startup fits features such as polls and interactive graphics in the text. The platform has attracted millions of students on this premise.
“We’re seeing a lot of companies putting emphasis on creating a virtual classroom,” he said. “But replicating the same thing in a different medium is never a good idea…nobody wants to stare at a screen and then have the restraint of having to show up at a previous pre-prescribed time.”
In July, Top Hat launched Community to give teachers a way to make class more than just a YouTube video. Similar to ClassDojo, Community provides a space for teachers and students to converse and stay up to date on shared materials. The interface also allows students to create private channels to discuss assignments and work on projects, as well as direct message their teachers.
CEO Mike Silagadze says that Top Hat tried a virtual classroom tool early on, and “very quickly learned that it was fundamentally just the wrong strategy.” His mindset contrasts with the demand that Class and Engageli have proven so far, to which Silagadze says might not be as long-term as they think.
“There’s definitely a lot of interest that’s generated in people signing up to beta lists and like wanting to try it out. But when people really get into it, everyone pretty much drops off and focuses more on asynchronous, small and in-person groups.”
Instead, the founder thinks that “schools are going to double down on the really valuable in-person aspects of higher education that they couldn’t provide before” and deliver other content, like large lecture-style classes or meetings, through asynchronous content delivery.
This is similar to what Jeff Maggioncalda, the CEO of Coursera, told TechCrunch in November: Colleges are going to re-invest in their in-person and residential experiences, and begin offering credentials and content online to fill in the gaps.
“We’ve been on the journey to create a more and more complete platform that our customers can use since almost day one,” Silagadze said. “What the pandemic has brought is much more comprehensive testing functionality that Top Hat has rolled out and better communication tooling so basically better chat and communication tooling for professors.”
Community costs $30 per semester, per student. Currently Top Hat has most of its paying customers coming in through its content offering, the digital textbooks, instead of this learning platform.
College spin-out
InSpace, a startup spinning out of Champlain college, is similarly focused on making the communication between professors and students more natural. Dr. Narine Hall, the founder of the startup, is a professor herself who just wanted class to “feel more natural” when it was being conducted.
InSpace is similar to some of the virtual HQ platforms that have popped up over the past few months. The platforms, which my colleague Devin Coldewey aptly dubbed Sims for Enterprise, are trying to create the feel of an office or classroom online but without a traditional gallery view or conference call vibe. The potential success of inSpace and others could signal how the future of work will blend gaming and socialization for distributed teams.
InSpace is using spatial gaming infrastructure to create spontaneity. The technology allows users to only hear people within their nearby proximity, and get quieter as they walk, or click, away. When applied to a virtual world, spatial technology can give the feeling of a hallway bump-in.
Similar to Engageli, inSpace is rethinking how an actual class is conducted. In inSpace, students don’t have to leave the main call to have a conversation during inSpace, which they do in Zoom. Students can just toggle over to their own areas and a professor can see teamwork being done in real time. When a student has a question, their bubble becomes bigger, which is easier to track than the hand-raise feature, says Hall.
InSpace has a different monetization strategy than other startups. It charges $15 a month per-educator or “host” versus per-student, which Hall says was so educators could close contracts “as fast as possible.” Hall agrees with other founders that schools have a high demand for the product, but she says that the decision-making process around buying new tooling continues to be difficult in schools with tight budgets, even amid a pandemic. There are currently 100 customers on the platform.
So far, Hall sees inSpace working best with classes that include 25 people, with a max of 50 people.
The company was born out of her own frustrations as a teacher. In grad school, Hall worked on research that combined proximity-based interactions with humans. When August rolled around and she needed a better solution than WebEx or Zoom, she turned to that same research and began building code atop of her teachings. It led to inSpace, which recently announced that it has landed $2.5 million in financing led by Boston Seed Capital.
The differences between each startup, from strategy to monetization to its view of the competition, are music to Zoom’s ears. Anne Keough Keehn, who was hired as Zoom’s Global Education Lead just nine months ago, says that the platform has a “very open attitude and policy about looking at how we best integrate…and sometimes that’s going to be a co-opetition.”
“In the past there has been too much consolidation and therefore it limits choices,” Keehn said. “And we know everybody in education likes to have choices.” Zoom will be used differently in a career office versus a class, and in a happy hour versus a wedding; the platform sees opportunity in it all beyond the “monolithic definition” that video-conferencing has had for so long.
And, despite the fact that this type of response is expected by a well-trained executive at a big company in the spotlight, maybe Keehn is onto something here: Maybe the biggest opportunity in edtech right now is that there is opportunity and money in the first place, for remote learning, for better video-conferencing and for more communication.
