Author: azeeadmin

In general, ESG stands for “environment-social-governance” and comprises a set of principles that touches on issues from diversity and board structures to labor relations, supply chain, data ethics, environmental impact and legal requirements.

Unlike impact investing, which is squarely focused on the (external) effects of a business, ESG concerns mostly internal practices and processes that could support both a fund and its portfolio companies to make them more sustainable.

While other asset classes from buyout funds to public equities have seen a big push toward ESG ratings and initiatives, venture capital has been lagging behind. What has changed recently?

Over the last several months, quite a few mostly European funds have stepped forward with initiatives to tackle ESG. Balderton, for instance, announced its Sustainable Future Goals with a bang at the startup event Slush in early December 2020. Their efforts are focused both internally on the fund and externally on investment decisions and portfolio support. I asked Colin Hanna, one of the leaders of the development internally and a principal at the firm, how this initiative came about:

While our efforts on this front preceded COVID, this year we saw that a real impact was possible on climate-change-related goals […] we have become accustomed to doing virtual board meetings, cutting down on travel; the challenge will be to continue those efforts going forward and rolling them out to our portfolio companies even as the world returns to normal. Having a framework helps us do that.

This rationale also recently brought a group of about 25 VCs to form a community around ESG for VC for the first time. The initiative is led by GMG Ventures and Houghton Street Venture, a new firm affiliated with the London School of Economics that met for the first time in December with representatives from LocalGlobe and Latitude, Kindred Capital, Balderton, the Westly Group and Blisce. The group’s stated goal is to share expertise from the bottom up and fill the gap where existing frameworks don’t quite work.

This is direly needed right now, says Sophia Bendz, partner at Berlin-based firm Cherry Ventures:

Beginning with topics around DEI and climate issues, we are really keen on upping our ESG game. ESG involves such important issues and we have to dedicate the time to learn more to ultimately do more on these fronts now. Yet, I also believe that true impact doesn’t result from knowledge silos. It’s great that we are learning from and supporting each other to have more societal impacts in our day-to-day roles. I am really passionate about this.

What are the main drivers for this push? 

I asked Susan Winterberg, an ESG consultant who recently finished a two-year fellowship at Harvard producing a groundbreaking report on the subject of ESG for VCs specifically about the “why now”:

There are broadly two sets of reasons why investors and company leaders adopt ESG. The first set relates to increased awareness of how their activities impact external events happening in the world such as climate change and social justice. The second relates to increased awareness of how adopting ESG can advance specific business goals they have such as increasing sales, attracting top talent, and reducing operating risks.”

Obviously, 2020 was a watershed year to drive change based on both of these sets of rationales. Social justice issues — from Black Lives Matter and racial equity, COVID-19 and healthcare to freedom of expression and democracy — were prevalent across the spectrum. Startup leaders and investors were influenced by these societal movements as much as by new research helping them understand how ESG can help advance business objectives in venture capital. The two reports published by CDC/FMO and the Belfer Center are only two examples of this evidence.

What do VCs say, how has change happened for them? Hana told me that at Balderton a combination of factors mentioned by Winterberg above, worked together to start the process:

It was both a push and a pull within Balderton. Our investors and the leaders at the top of our firm were proponents of this change but the efforts were also driven by the younger generation within the firm; they felt it was important. Overall, we were silent about climate change and sustainability for a long time, which was not really an option anymore.

For Martin Weber, founding partner at HV Capital that’s working with the St. Gallen-based ESG initiative ROSE, the conversation really started with Leaders for Climate Action. Weber admits: “We didn’t think about ESG enough […] beyond our own horizon really […] sometimes you really need a kick in the butt, that’s what Leaders for Climate Action did for us; a small change started our awareness and commitment to ESG.”

For HV Capital but also some funds in the U.S. such as the Westly Group a specific ESG vector started the journey — that could be the E as in environment but also DEI as part of the S and G of ESG.

I also spoke to several LPs recently among others moderating a panel at the U.K.-based Allocate conference; the atmosphere seems to be shifting more drastically toward “doing business better” among the asset owners, too. Particularly family offices managing their own money are outspoken already, but big asset owners are becoming aware (and active) as well.

Michael Cappucci, managing director of Compliance and Sustainable Investing at the Harvard Management Company — Harvard’s endowment — thinks that “we are long past the time to ‘wait and see’ if ESG integration is a worthwhile undertaking for investors” (see the UNPRI report for more context).

The movement here seems to be coming even stronger from Europe again, however. As a result, the same group around Houghton Street Ventures and GMG Ventures pushing ESG for VCs is also in the process to get more LPs on board with a special workshop in February, as I learned. The tempo on the LP front is increasing as we speak.

What is still missing?

While lots of progress has been made on the level of individual funds, individual LPs and in baby steps toward a more general industry-wide push, there are still some core elements that are not in place. I believe the five key gaps concern a clear differentiation of ESG from impact, finding the right language, establishing a common framework, agreeing on metrics and real LP commitment.

1. Know what ESG is: Many investors (and LPs) I speak with still don’t really know the difference between impact and ESG. In very simple terms, ESG principles are about the (internal) processes (of a fund, portfolio company, etc.) while impact investing is about outcomes (sometimes operationalized through the Sustainable Development Goals (SDGs)). While impact will likely remain a niche asset class for the foreseeable future, ESG principles should inform the practices of all investors in one way or the other.
2. Find the right language: On a related note, finding the right language to talk about what ESG (versus impact) is, might help us to differentiate better. As Sarah Drinkwater of Omidyar Network made very clear in her post from September last year, we simply don’t have a good word to describe (and own) what ESG expresses in the world of venture capital and technology — principled, progressive, equitable? Possibly, “setting a standard” can help with this issue, too.
3. Somebody, set a standard: ESG (and impact) frameworks developed and deployed slowly in the venture industry are still all over the place; they are influenced by all kinds of other frameworks (from other asset classes and related activities, such as impact) and mostly made up by individual funds themselves. There is certainly a risk of green washing if it stays that way; (self-proclaimed and reported) marketing is one thing but if we really want to change the industry, an authoritative body will have to step forward. What the biggest European anchor investor — the European Investment Fund — has done on that front so far with a very high-level questionnaire is not enough. How about, for instance, the UNPRI descends from the plane of high level down to individual industry principles?
4. What isn’t measured: One part of what could really lead to an industry standard is a set of widely accepted and benchmarkable metrics; what are the most important measurements across early-stage and late-stage VC portfolio companies? The group of funds in London has for good reason announced that this particularly question will be one of the focus points they are working on next. But how will this again be adopted and spread industrywide? Another set of players might get involved in that again: LPs. If they make their GPs report on ESG on an annual basis, this will surely shift the industry as a whole and make the next generation of startups more equitable, responsible and stakeholder-focused.
5. LPs really need to bite: So far, we are still missing real LP commitments when it comes to ESG. On the one hand, many GPs I spoke with that have recently been fundraising reported that LPs in general still don’t ask about ESG. In fact, some LPs particularly in the U.S. believe ESG might be a distraction from generating returns. In any case, ESG still has not become a must-have but is merely regarded a nice-to-do. The ESG questionnaires that do exist — like the EIF framework — are so far really high level and unspecific. When big anchor LPs like the EIF and BBB in Europe or big foundations and university endowments ask about it in their due diligence meetings, GPs will have to comply — all of them. Their influence as agenda setters might in the medium term be the biggest driving factor toward making ESG for VC the normal way of doing business. Given that there is state-money, all of our money, involved here, it seems an absolute no-brainer to take that step.

Analysis of a trove of data extracted from the Chicago Police Department has revealed major differences between how black and white officers, as well as male and female ones, actually enforce the law. This rare apples-to-apples comparison supports the idea that improving diversity in law enforcement may also improve the quality of policing.

Historically hard data from police departments has been extremely hard to come by, for a variety of reasons. As the authors put it in the paper:

Rigorous evaluation of the effects of police diversity has been stymied by a lack of sufficiently fine-grained data on officer deployment and behavior that makes it difficult or impossible to ensure that officers being compared are facing common circumstances while on duty.

…At present, a patchwork of nonstandard record-keeping and disclosure practices across roughly 18,000 U.S. police agencies has severely impeded broader policy evaluation.

This study by B.A. Ba et al., however, is based on highly detailed CPD records resulting from requests made to the department over a period of three years. It’s a collaboration between researchers from UC Irvine, the University of Pennsylvania, Princeton, and Columbia, and was published today in Science (access is free).

The records include millions of shifts and patrols from 2012 through 2015, which the team carefully sorted and pruned until it had a set that would allow the kind of analysis they hoped to do: comparing police work that is similar in all respects except the demographics of the officers doing it.

If on a Monday in March, in the same district at the same time of day, no serious differences could be found between Black officers and white officers, then race could be tentatively ruled out as a major contributor to how police do their work. On the other hand, if there were serious differences found, then that might indicate — as a topic for further study — the possibility of systemic bias of some kind.

As you might expect, the analysis found that there are indeed serious differences that, having isolated all the other variables, only correlate with the race of the officer. This may seem obvious to some and controversial to others, but the point of this work is not to assume or confirm assumptions, but to show plainly with data that there are disparities associated with race that need investigation and explanation.

Some of the specific findings can be summarized as follows:

• Minority officers (black and Hispanic, self-identified) “receive vastly different patrol assignments,” something that had to be controlled for in order to provide effective comparisons for the other findings.
• Black officers use force 35 percent less than white officers on average, with most of the difference coming from force used against black civilians.
• Black officers perform far fewer “discretionary stops” for “suspicious behavior.”
• Hispanic officers showed similar, but smaller reductions.
• Female officers use force considerably less often than male ones, again especially when it comes to black civilians.
• Much of the disparity in stops, arrests, and use of force results from differences in pursuing low-level offenses, especially in majority-black neighborhoods.

The data show (as a sort of inverse image of the above list) that white male officers stop, arrest, and use force more often, especially on people of color, and frequently as a result of minor crimes or “discretionary stops” with vague justifications.

This diagram shows a sampling of the collected data, indicating stops, arrests, and uses of force by officers on a map of the Wentworth District of Chicago.

The researchers are careful to point out that as conclusive as the patterns may appear to be, it’s important to understand that there is no causal mechanism studied or suggested. In fact they expressly point out that the data could be interpreted in two directions:

One explanation for these disparities centers on racial bias, i.e., white officers are more likely than Black officers to harass Black civilians. Technically, it is also possible that Black officers respond more leniently when observing crimes in progress.

More study is required, but they point out that one explanation — leniency by Black officers on minor offenses — has very little effect on public safety (violent crimes are addressed largely the same regardless of race and gender). The other — systemic racism — is significantly more harmful. Though they are “observationally equivalent” in the context of this data specifically, they are not equivalent in consequence. (Nor in likelihood — nor are they entirely incompatible with each other.)

In a valuable commentary on the paper and its implications, Yale’s Philip Atiba Goff notes that its findings are rich in implications that we ignore at our peril:

The magnitude of the differences provides strong evidence that — at least in some cities — the number of officers who identify with vulnerable groups can matter quite a bit in predicting police behavior. Although this does not settle the matter, the work stands alone in its ability to make apples-to-apples comparisons across officers – regardless of how many may be bad apples.

Given that Ba et al. find negligible demographic differences in officers’ responses to community violence, such a large difference in discretionary stops compels a reader to ask: Are any of those excess stops by white officers necessary? Should a department even be making them, given the demonstrated risk for abuse so evident in vulnerable communities?

Are any of those excess use of force incidents by white officers necessary? And if the excess force is not necessary for public safety, why does the department target Black communities for so much physical coercion? These questions are difficult to answer outside a broader engagement with the purpose of policing — and its limitations.

In other words, while it may require further study to get at the core of these issues, police departments may look at them and find that their resources are not necessarily being used to best effect. Indeed they may have to face the possibility — if only to refute it — that much of what officers do has little, no, or even negative value to the community. As Goff concludes:

With violence trending downward the past three decades, mostly troubling small geographic areas, and possibly occupying a small portion of police activity, what should the role of police be? Failing to take seriously the possibility that the answer should be “much less” may end up frustrating both researchers and a public that has been asking the question for far longer than most scientists.

This revealing study was only possible because the authors and legal authorities in Chicago compelled the police there to release this data. As noted above it can be difficult, if it is even possible, to collect large-scale data from any department, let alone from many departments for analysis at a national scale. The authors freely admit that their findings, in their specificity to Chicago, may not apply equally in other cities.

But that’s meant to be a call to action; if when finally given access to real data, researchers find problems of this magnitude, every department in the country should be weighing the benefits and risks of continued obfuscation with those of openness and collaboration.

When Sam Lurye looks at a loading dock he sees both a bottleneck in the world’s supply chain and an opportunity. 

The opportunity — driven by a tension between the digital and physical infrastructure at warehouse distribution centers and factories today and the push toward autonomy — prompted Lurye to found Kargo, a smart loading dock platform startup that recently raised $6 million in seed money from Founders Fund, Accomplice, Sozo Ventures and other unnamed investors. 

In the first months of the company, which was founded in late 2019, Lurye spent months traveling throughout the United States, visiting warehouse distribution centers and factories and speaking with hundreds of truck drivers, plant workers and supply chain managers to understand where the change in the autonomous logistics was impacting them.

Their primary complaint: loading docks. 

“No matter whether you’re building cars or elevators or distributing things, everyone has loading docks,” Lurye said in a recent interview. “It’s kind of this universal API of the industrial world; a loading dock allows any industrial facility to connect with the outside world.”

Loading docks are ubiquitous, and so are their problems. Bottlenecks are common with the average truck waiting two and half hours to be loaded or unloaded at the dock. For every 15 minutes that the truck waits beyond that average dwell time, the chance of a crash later on in the route increased by 6.2%, according to a study by the U.S. Department of Transportation.

Lurye concluded that warehouses and factories weren’t ready for the coming wave of investment in autonomy, which tends to focus on autonomous trucks and warehouse robotics. 

Kargo’s platform is not just a digital enterprise. The company mounts physical sensor towers to a loading dock. The computer vision sensor is able to automatically identify and verify all incoming and outgoing freight in real time. The accompanying software platform takes in all of that data, which can then be used by customers to take a macro or micro view of its supply chain. 

Image Credits: Kargo

The company makes money by selling the sensor and then offering a software subscription that gives customers access to the data.  

Lurye said the platform has allowed its customers to reduce loading time by more than 40%. As more loading docks are connected to the platform, the predictive feature that Kargo built improves and will allow customers to make informed forecasts of whether a shipment will be late or missed. 

Lurye’s aim in 2021 is to use the new funds to double its 7-person workforce over the next several months and launch its first commercial launch of 50 loading docks with plans to triple that number before the end of the year. In 2022, Lurye wants to add more than 1,000 loading docks to the platform.  

Demand for Kargo’s platform and sensors could rise as e-commerce giants like Amazon as well as hundreds of other distributors add more automation inside their warehouses and factories.

A webcam app installed by thousands of users left an exposed database packed with user data on the internet without a password.

The Elasticsearch database belonged to Adorcam, an app for viewing and controlling several webcam models including Zeeporte and Umino cameras. Security researcher Justin Paine discovered the data exposure and contacted Adorcam, which secured the database.

Paine said in a blog post shared with TechCrunch that the database contained about 124 million rows of  data for the several thousand users, and included live details about the webcam — such as its location, whether the microphone was active, and name of the Wi-Fi network that the camera is connected to — and information about the webcam owner, such as email addresses.

Paine also found evidence of the camera uploading captured stills from the webcam to the app’s cloud, though he could not verify since the links had expired.

He also found hardcoded credentials in the database for the app’s MQTT server, a lightweight messaging protocol often used in internet-connected devices. Paine did not test the credentials (as doing so would be unlawful in the U.S.), but also alerted the app maker to the vulnerability, who then changed the password.

Paine verified that the database was updating live by signing up with a new account and searching for his information in the database. Although the data was limited in sensitivity, Paine warned that a malicious hacker could craft convincing phishing emails, or use the information for extortion.

Adorcam did not return our emails with questions — including if the company planned to inform users of the incident.

Typically when we talk about tech and security, the mind naturally jumps to cybersecurity. But equally important, especially for global companies with large, multinational organizations, is physical security – a key function at most medium-to-large enterprises, and yet one that to date, hasn’t really done much to take advantage of recent advances in technology. Enter Base Operations, a startup founded by risk management professional Cory Siskind in 2018. Base Operations just closed their $2.2 million seed funding round, and will use the money to capitalize on its recent launch of a street-level threat mapping platform for use in supporting enterprise security operations.

The funding, led by Good Growth Capital and including investors like Magma Partners, First In Capital, Gaingels and First Round Capital founder Howard Morgan, will be used primarily for hiring, as Base Operations looks to continue its team growth after doubling its employe base this past month. It’ll also be put to use extending and improving the company’s product, and growing the startup’s global footprint. I talked to Siskind about her company’s plans on the heels of this round, as well as the wider opportunity and how her company is serving the market in a novel way.

“What we do at Base Operations is help companies keep their people in operation secure with ‘Micro Intelligence,’ which is street-level threat assessments that facilitate a variety of routine security tasks in the travel security, real estate and supply chain security buckets,” Siskind explained. “Anything that the Chief Security Officer would be in charge of, but not cyber – so anything that intersects with the physical world.”

Siskind has first-hand experience about the complexity and challenges that enter into enterprise security, since she began her career working for global strategic risk consultancy firm Control Risks in Mexico City. Because of her time in the industry, she’s keenly aware of just how far physical and political security operations lag behind their cybersecurity counterparts. It’s an often-overlooked aspect of corporate risk management, particularly since in the past it’s been something that most employees at North American companies only ever encounter periodically, when their roles involve frequent travel. The events of the past couple of years have changed that, however.

“This was the last bastion of a company that hadn’t been optimized by a SaaS platform, basically, so there was some resistance and some allegiance to legacy players,” Siskind told me. “However, the events of 2020 sort of turned everything on its head, and companies realized that the security department ,and what happens in the physical world, is not just about compliance – it’s actually a strategic advantage to invest in those sort of services, because it helps you maintain business continuity.”

The COVID-19 pandemic, increased frequency and severity of natural disasters, and global political unrest all had significant impact on businesses worldwide in 2020, and Siskind says that this has proven a watershed moment in how enterprises consider physical security in their overall risk profile and strategic planning cycles.

“[Companies] have just realized that if you don’t invest and how to keep your operations running smoothly in the face of rising catastrophic events, you’re never going to achieve the the profits that you need, because it’s too choppy, and you have all sorts of problems,” she said.

Base Operations addresses this problem by taking available data from a range of sources and pulling it together to inform threat profiles. Their technology is all about making sense of the myriad stream of information we encounter daily – taking the wash of news that we sometimes associate with ‘doom-scrolling’ on social media, for instance, and combining it with other sources using machine learning to extrapolate actionable insights.

Those sources of information include “government statistics, social media, local news, data from partnerships, like NGOs and universities,” Siskind said. That data set powers their Micro Intelligence platform, and while the startup’s focus today is on helping enterprises keep people safe, while maintaining their operations, you can easily see how the same information could power everything from planning future geographical expansion, to tailoring product development to address specific markets.

Siskind saw there was a need for this kind of approach to an aspect of business that’s essential, but that has been relatively slow to adopt new technologies. From her vantage point two years ago, however, she couldn’t have anticipated just how urgent the need for better, more scalable enterprise security solutions would arise, and Base Operations now seems perfectly positioned to help with that need.

Just three years after its founding, biotech startup Immunai has raised $60 million in Series A funding, bringing its total raised to over $80 million. Despite its youth, Immunai has already established the largest database in the world for single cell immunity characteristics, and it has already used its machine learning-powered immunity analysts platform to enhance the performance of existing immunotherapies, but aided by this new funding, it’s now ready to expand into the development of entirely new therapies based on the strength and breadth of its data and ML.

Immunai’s approach to developing new insights around the human immune system uses a ‘multi-omic’ approach – essentially layering analysis of different types of biological data, including a cell’s genome, microbiome, epigenome (a genome’s chemical instruction set) and more. The startup’s unique edge is in combining the largest and richest data set of its type available, formed in partnership with world-leading immunological research organizations, with its own machine learning technology to deliver analytics at unprecedented scale.

“I hope it doesn’t sound corny, but we don’t have the luxury to move more slowly,” explained Immunai co-founder and CEO Noam Solomon in an interview. “Because I think that we are in kind of a perfect storm, where a lot of advances in machine learning and compute computations have led us to the point where we can actually leverage those methods to mine important insights. You have a limit or ceiling to how fast you can go by the number of people that you have – so I think with the vision that we have, and thanks to our very think large network between MIT, and Cambridge to Stanford in the Bay Area, and Tel Aviv, we just moved very quickly to harness people to say, let’s solve this problem together.”

Solomon and his co-founder and CTO Luis Voloch both have extensive computer science and machine learning backgrounds, and they initially connected and identified a need for the application of this kind of technology in immunology. Scientific co-founder and SVP of Strategic Research Danny Wells then helped them refine their approach to focus on improving efficacy of immunotherapies designed to treat cancerous tumors.

Immunai has already demonstrated that its platform can help identify optimal targets for existing therapies, including in a partnership with the Baylor College of Medicine where it assisted with a cell therapy product for use in treating neuroblastoma (a type of cancer that develops from immune cells, often in the adrenal glands). The company is now also moving into new territory with therapies, using its machine learning platform and industry-leading cell database to new therapy discovery – not only identifying and validating targets for existing therapies, but helping to create entirely new ones.

“We’re moving from just observing cells, but actually to going and perturbing them, and seeing what the outcome is,” explained Voloch. This, from the computational side, later allows us to move from correlative assessments to actually causal assessments, which makes our models a lot more powerful. Both on the computational side and on the on the lab side, this is really bleeding edge technologies that I think we will be the first to really put together at any kind of real scale.”

“The next step is to say ‘Okay, now that we understand the human immune profile, can we develop new drugs?’,” said Solomon. “You can think about it like we’ve been building a Google Maps for the immune system of a few years – so we are mapping different roads and paths in the in the immune system. But at some point, we figured out that there are certain roads or bridges that haven’t been built yet. And we will be able to support building new roads and new and new bridges, and hopefully leading from current states of disease or cities of disease, to building cities of health.”

Apps saw record downloads and consumer spending in 2020, globally reaching somewhere around $111 billion to $112 billion, according to various estimates. But a growing part of that spend was subscription payments, a new report from Sensor Tower indicates. Last year, global subscription app revenue from the top 100 subscription apps (excluding games), climbed 34% year-over-year to $13 billion, up from $9.7 billion in 2019.

The App Store, not surprisingly, accounted for a sizable chunk of this subscription revenue, given it has historically outpaced the Play Store on consumer spending. In 2020, the top 100 subscription apps worldwide generated $10.3 billion on the App Store, up 32% over 2019, compared with $2.7 billion on Google Play, which grew 42% from $1.9 billion in 2019.

Image Credits: Sensor Tower

There are some signs that subscription revenue growth may be hitting a peak. (Or it could be that subscriptions were a luxury some consumers cut in a down economy.)

Globally, subscription app revenue from the top 100 apps was around 11.7% of the total ~$111 billion consumers spent on in-app purchases in 2020 — which is roughly the same share it saw in 2019.

And in the fourth quarter of 2020, 86 of the top 100 earning apps worldwide offered subscriptions, which was down from the 89 that did so in the fourth quarter of 2019.

In addition, subscription app revenue growth in the U.S. is now trailing the global trends.

Although subscription app revenue was still up 26% on a year-over-year basis to reach nearly $5.9 billion in 2020, that was slower growth than the 34% seen worldwide.

Image Credits: Sensor Tower

What’s more, subscription app spending in the U.S. last year represented a smaller percentage of the total consumer spend than in 2019, the report found. In 2020, subscription payments from the top 100 subscription apps were 17.6% of the $33 billion U.S. consumers spent on in-app purchases, down from the 21% share they accounted for in 2019.

And out of the 100 top grossing apps in the U.S. in the fourth quarter 2020, 91 were subscription-based, down from 93 in the year ago quarter.

The top subscription apps in the U.S. looked different between the App Store and Google Play. On the former, YouTube was the top grosser in this category, while Google Pay users spent on Google One (Google’s cloud storage product). Tinder, meanwhile, was No. 2 on the App Store, while Disney+ took the second spot on Google Play.

Image Credits: Sensor Tower

Overall, the top 10 across both stores were YouTube, Disney+, Tinder, Pandora, Google One, Twitch, Bumble, HBO Max, Hulu, and ESPN. These top earners indicate that consumers are willing to pay for their entertainment — like streaming services — on subscription, but it’s more difficult for other categories to break into the top charts. Dating apps. however, remain an exception.

MetroMile began trading as a public company yesterday. Its exit from the private market was accelerated by its decision to combine with a special purpose acquisition company, or SPAC.

Such transactions have exploded in popularity in recent years, bridging the gap between a host of richly-valued private companies and endless bored capital. SPACs raise cash, go public and then merge with a private entity. The SPAC then dissolves itself into the combined entity, a process that often includes an additional slug of money (PIPE) for good measure.

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SPAC-led debuts can move faster than a traditional IPO, making them attractive to companies in a hurry. And with more visibility into how much capital might be raised than during a traditional public-offering pricing run, they can smooth worries amongst target-companies regarding how much cash they can attract by leaving the private-market fold.

MetroMile is hardly the final company we expect to debut this year via a SPAC. The list is long and may include fellow neoinsurance company Hippo. (Hippo declined to comment on the matter.)

But with many more SPACs coming our way, we took MetroMile’s debut as a learning moment. To that end, we got on the horn with CEO Dan Preston to chat about what the day meant for his company, and to elicit a note or two on the SPAC process for our own enjoyment.

MetroMile’s SPACtacular debut

TechCrunch asked Preston about the SPAC world and how his combination came about. He said his firm started by dipping its toe into the blank-check waters, kicking off with small set of conversations, chats that quickly gathered traction.

But don’t take that to mean that any company will elicit a similar market response. Preston said SPACs are designed for a specific class of company; namely those that want or need to share a bit more story when they go public. Younger companies, in other words, for whom a traditional S-1 filing might not be provide a sufficient summation of its potential.

Shell’s plan to roll out 500,000 electric charging station in just four years is the latest sign of an EV charging infrastructure boom that has prompted investors to pour cash into the industry and inspired a few companies to become public companies in search of the capital needed to meet demand.

Since the beginning of the year, three companies have been acquired by special purpose acquisition vehicles and are on a path to go public, while a third has raised tens of millions from some of the biggest names in private equity investing for its own path to commercial viability.

The SPAC attack began in September when an electric vehicle charging network ChargePoint struck a deal to merge with special-purpose acquisition company Switchback Energy Acquisition Corporation, with a market valuation of $2.4 billion. The company’s public listing will debut February 16 on the New York Stock Exchange.

In January, EVgo, an owner and operator of electric vehicle charging infrastructure, agreed to merge with the SPAC Climate Change Crisis Real Impact I Acquisition for a valuation of $2.6 billion— a huge win for the company’s privately held owner, the power development and investment company LS Power. LS Power and EVgo management, which today own 100% of the company will be rolling all of its equity into the transaction. Once the transaction closes in the second quarter, LS Power and EVgo will hold a 74% stake in the newly combined company.

One more deal soon followed. Volta Industries agreed to merge this month with Tortoise Acquisition II, a tie-up that would give the charging company named after battery inventor Alessandro Volta a $1.4 billion valuation. The deal sent shares of the SPAC company, trading under the ticker SNPR, rocketing up 31.9% in trading earlier this week to $17.01. The stock is currently trading around $15 per-share.

Not to be outdone, private equity firms are also getting into the game. Riverstone Holdings, one of the biggest names in private equity energy investment, placed its own bet on the charging space with an investment in FreeWire. That company raised $50 million in new round of funding earlier this year.

“The writing is on the wall and the investors have to take the time. There’s been a flight out of the traditional investment opportunities in markets,” said FreeWire chief executive, Arcady Sosinov, in an interview. “There’s been a flight out fo the oil and gas companies and out fo the traditional utilities. You have to look at other opportunities… This is going to be the largest growth opportunity of the next ten years.”

FreeWire deploys its infrastructure with BP currently, but the company’s charging technology can be rolled out to fast food companies, post offices, grocery stores, or anywhere where people go and spend somewhere between 20 minutes and an hour. With the Biden Administration’s plan to boost EV adoption in federal fleets, post offices actually represent another big opportunity for charging networks, Sosinov said.

“One of the reasons we find electrification of mobility so attractive is because it’s not if or how, it’s when,” said Robert Tichio, a partner at Riverstone in charge of the firm’s ESG efforts. “Penetration rates are incredibly low… compare that to Norway or Northern Europe. They have already achieved double digit percentages.”

A recent Super Bowl commercial from GM featuring Will Farrell showed just how far ahead Norway is when it comes to electric vehicle adoption. 

“The demands onc capital in the electrification of transport will begin to approach three quarters of a trillion annually,” Tichio said. “The short answer to your question is that the needs for capital now that we have collectively, politically, socially economically come to a consensus in terms of where we’re going and we couldn’t say that 18 months ago is going to be at a tipping point.”

Shell already has electric vehicle charging infrastructure that it has deployed in some markets. Back in 2019 the company acquired the Los Angeles-based company Greenlots, an EV charging developer. And earlier this year Shell made another move into electric vehicle charging with the acquisition of Ubitricity in the UK.

“As our customers’ needs evolve, we will increasingly offer a range of alternative energy sources, supported by digital technologies, to give people choice and the flexibility, wherever they need to go and whatever they drive,” said Mark Gainsborough, Executive Vice President, New Energies for Shell, in a statement at the time of the Greenlots acquisition. “This latest investment in meeting the low-carbon energy needs of US drivers today is part of our wider efforts to make a better tomorrow. It is a step towards making EV charging more accessible and more attractive to utilities, businesses and communities.”

Maisonette, a four-year-old, New York-based company has aimed from the outset to become a one-stop curated shop for everything a family might need for their young children.

That plan appears to be working. Today, the company — which launched with preppy young children’s apparel and has steadily built out categories that include home decor, home furniture, toys, gear, and accessories — says it doubled its number of customers last year and tripled its revenue. Indeed, even as COVID could have crimped its style — sale of children’s dress-up clothes slowed for a time — its DIY and STEM toy sales shot up 1,400%.

Though the company keeps its sales numbers private, its growth is interesting, particularly given the unabated growth of Amazon, which became the nation’s leading apparel retailer somewhere around the end of 2018.

Seemingly, much of Maisonette’s traction owes to the trust it has built with customers, who see its offerings as high-end yet accessible relative to the many high-end fashion brands that are also increasingly focused on the children’s market, like Gucci and Burberry.

Specifically, the 75-person company has a merchandising team that prides itself on working with independent brands and surfacing items that are hard to find elsewhere.

Maisonette also launched its own apparel line roughly 30 months ago called Maison Me. Focused around “elevated basics” at a more reasonable price point, the line, made in China, is seeing brisk sales to families who buy items time and again as their kids outgrow or wear holes in them, says the company.

It helps that Maisonette’s founders have an eye for what’s chic. Cofounder Sylvana Ward Durrett and Luisana Mendoza Roccia met at Vogue magazine, where Durrett spent 15 years, joining the staff straight from Princeton and becoming its director of events (work that earned her a high profile in fashion circles). Roccia joined straight from Georgetown the same year, 2003, and left as the magazine’s accessories editor in 2008.

For those who might be curious, their former boss, Anna Wintour, is a champion of theirs. Yet they also have some other powerful advocates, including NEA investor Tony Florence, a kind of e-commerce whisperer who has also led previous investments on behalf of his firm in Jet, Goop, and Casper.

NEA is an investor in Maisonette, as is Thrive Capital and the growth-stage venture firm G Squared, which just today announced it led a $30 million round in the company that brings its total funding to $50 million.

Another ally is Marissa Mayer, who first met Durrett back in 2009 when Mayer was still known as Google’s first female engineer its most fashionable executive. Not only has their friendship endured — Mayer says she named one of her twin daughters Sylvana because she adored the name — but Mayer is on the board of Maisonette, where she has presumably helped refine its data strategy, including around an inherent advantage that the company enjoys: its very young customers.

“One of the things that’s really helpful when it comes to data and e-commerce is when you can capture people at a particular life stage,” Mayer explains. “It’s why people liked wedding registries. You get married, then you have children and [the retailer] can follow the children’s ages and start anticipating that customer’s needs and what they’re going to want two years from now.”

In terms of “predictable supply chain, for inventory selection, for just being able to meet that moment, having insight into those stages is really important and helpful,” she says. It can also be very lucrative for Maisonette as it continues to build out its business, notes Mayer,

Certainly, much is working in the company’s favor already. To Mayer’s point, Roccia says that more than half of Maisonette’s sales last year came from repeat customers. More, it already has an audience of more than 800,000 people who either receive emails from the company or follow its social media channels. (Maisonette also features a healthy dose of content at its site.)

Unlike some e-commerce businesses, Maisonette is asset-lite, too. Though it has opened a handful of pop-up stores previously and was contemplating a bigger move into retail (“that’s now on pause,” says Durrett), the company doesn’t have warehouses to manage. Instead, items are shipped directly to customers from the various retailers featured at its site.

Perhaps most meaningful of all, the company is competing in what is a massive and growing market. In the U.S. alone, the children’s apparel market is estimated to be $34 billion. Meanwhile, the children’s market is $630 billion globally. While Maisonette is selling to U.S. customers alone right now, it plans to use some of that new funding to move into international markets, says Roccia, who has been living in Milan with her own four children during the pandemic, while Durrett began working out Maisonette’s mostly empty Brooklyn headquarters in January to create a bit of space from her three.

Indeed, on a Zoom call from their far-flung locations, they talk at length about parents needing to create new space to work from home right now, as well as to update rooms for kids attending virtual school. While no one asked for a global shutdown, home decor is a “category that has picked up due to the Covid effect,” notes Roccia.

Asked what other trends the two are tracking — for example, Maisonette features the mommy-and-me clothing pairings that have become big business in recent years — Roccia says that even with the world shut down, it remains a “huge” trend. “It started with holiday pajamas — that was kind of the catalyst to this whole movement — and now swimwear and just casual dressing has become a pretty big piece of the business, too.”

As for what Durrett has noticed, she laughs. “Llamas are big. We sell a llama music player that we had to bring back on the site several times over the holidays.” Also “rainbows and unicorns. As cliche as it sounds, we literally can’t keep them in stock.”

Unicorns, she adds, “are a thing.”