Category: UNCATEGORIZED

This morning OpenView Venture Partners announced that it has closed $450 million for its new, sixth fund. The capital pool is its largest to date, coming in at roughly 50% larger than its preceding fund five.

OpenView is based in Boston, but invests globally. The $450 million fund’s future existence has been known since at least November of last year, thanks to an SEC filing.

The firm’s investment focus, two of its partners told TechCrunch during separate interviews, is not changing with its new capital. Instead, OpenView will continue to focus on what it calls “expansion stage business software,” according to partner John McCullough.

That’s a way of saying business-focused software startups that have between $1 million and $10 million in annual recurring revenue, or ARR. To be more specific, OpenView’s Mackey Craven told TechCrunch that around 80% of its lead deals are into companies with $1 million to $5 million in ARR, with 60% going into companies with between $1 million and $3 million in ARR.

Given that expansion-stage startups are modest in terms of revenue scale, why did OpenView raise so much more capital in its new fund than its prior installments, if it is pursuing the same strategy?

According to McCullough, the firm ran the math on the number of investments it wanted to make — hoping to make 15 to 17, more than the 13 it did out of its preceding fund — the amount of money it needed for follow-on investing, and some constraints it ran into in prior funds when it had to decide between a net-new investment and adding more capital to an existing winner. All that added up to a larger number.

The investor told TechCrunch that OpenView had a lower bound target of $350 million, and a hard max of $450 million for the fund.

New capital is fun and all, but I wanted to know a bit more concerning how the fund views some trends in the tech space that I’ve tried to keep an eye on, namely API-delivered startups, no-code/low-code and insurtech. On the API front, Craven seemed generally bullish, saying that there has been “greater opportunity for software businesses to be built around an API as a product” in recent years, adding that as many API-delivered startups tend toward usage-based pricing, they can also sport attractive net retention metrics.

We riffed on the no-code and low-code worlds as well, noodling on the distinctions between services that allow for greater customizations by non-developers and products that allow for the creation of net new applications sans coding. Both wind up landing inside the no-code and low-code buckets despite being rather different. Regardless, are startups that sell software building in more customization and flexibility? Yes, says Craven. Expect the line of what counts as no-code capability and what is merely neat customizations to blur as time passes.

And, finally, on the insurtech point, Craven indicated that because most of the insurtech world is more financial services than business software, it largely falls outside of their purview. Perhaps Noyo would count as both insurtech and expansion-stage business software?

OpenView has lots of new capital to keep running its playbook. It’s not the only business-focused software VC out there. Shasta’s another. There are more. But with more capital than ever, OpenView has invited more scrutiny onto itself, its results and its new investments. Let’s see where it puts the money to work.

The city of Toronto is going to start operating autonomous shuttles on a trial basis, through an agreement with Local Motors that will see that company’s Olli 2.0 all-electric self-driving shuttle ferry passengers beginning in Spring 2021. The trial is being conducted with Pacific Western Transportation, a transportation operations company, and each ride over the course of the trial will include two full-time staffers, an operator on board from that partner, as well as a customer service rep from either TTC or Metrolinx, the company Toronto contracts for much of its commuter transportation services.

The Olli 2.0 vehicle has a passenger capacity of up to eight people at a time, and includes accessibility features like a wheelchair ramp and securing points. It also includes an AV system for providing information and updates to passengers. The safety operator onboard the vehicle has the ability to take over manual control at any time, should the need arise due to safety concerns or for any other reason.

This pilot route will provide service between West Rouge and Rouge Hill GO station, which is a neighborhood west of the city of Toronto proper in the Greater Toronto Area community of Scarborough. It’s designed to connect commuters to one of the area’s primary light rail networks for longer-distance transportation. The city says that the goal is to also ensure that the autonomous shuffle is maintained up to whatever cleanliness and sanitization standards are in place at the time in light of COVID.

Last mile use cases like this have been a target for autonomous transportation in cities, in part because they involve traveling a predictable, repeated route and doing so at relatively low speeds. This could eventually lead to the deployment of more service routes using Olli shuttles, adding infrastructure connecting the city’s light rail and subway systems to parts of the city not covered by those primary arteries right now.

Just months after it announced a $33 million Series B, Chicago-based M1 Finance today disclosed a $45 Series C.

The new financing event was led by Left Lane Capital, the same investor that led M1’s Series B. Bear in mind that so-called inside rounds are now a bullish sign in 2020, as opposed to in prior VC eras when they were viewed more cooly. Other M1 investors include Jump Capital, Clocktower Technology Ventures and Chicago Ventures, though only the first two appear to have taken part in this round.

Per M1, the Series C comes just 120 days after it raised a Series B. A good question is why M1 has raised more capital, and why Left Lane Capital wanted to lead two rounds for the consumer-focused fintech provider. Going back to our prior coverage, we can figure it out.

In February, we reported that M1 Finance had reached the $1 billion assets under management mark, or AUM.

The startup combines three different traditional fintech services into one (roboadvising, neobanking and lending), allowing it to price the package aggressively. The model appears to be working. When M1 raised its Series B a few months later in June, it had reached the $1.45 billion AUM, or about 45% growth in just over a quarter. That’s very good.

Today, the company announced that it has surpassed the $2 billion AUM mark, up more than 38% in the last four months.

M1 posted slower AUM growth in percentage terms and greater growth in raw AUM over a similar time frame heading into its Series C. But regardless of that nuance, the company’s AUM grew quickly.

That fact helps explain its new round. If you were Left Lane Capital, had just led a round into the company, and then watched it keep growing rapidly, you’d want to double-down quickly. Not only to buy more of the company, but also to get the round done before another investor could show up and buy its own piece of M1, diluting you and nabbing your ascendant position as the startup’s most recent lead investor.

So Left Lane led the Series C, hoping that M1 keeps growing like the proverbial garden irritant.

Revenue, growth

Something fun about M1 is that it shared a revenue target as a percent of AUM earlier in the year, namely that it aims to generate around 1% of its AUM in revenue each year. The company’s CEO Brian Barnes re-confirmed the number for TechCrunch this week.

So, with more than $2 billion in AUM, we can see that M1’s revenues are probably on a run rate of more than $20 million today, and could crest a $25 million run rate by the end of the year, provided that growth continues as it has for the startup.

How is M1 adding so much capital to its platform? Barnes told TechCrunch that M1 has tripled its userbase since the start of the year, and that its current users are bringing more funds in from other financial platforms. The combination is making M1 larger, and quickly.

To wrap, our notes above about Left Lane probably wanting to lead the Series C to keep some other firm from doing it — pre-emption is a regular thing in today’s hot VC market — weren’t mere idle speculation. Barnes told TechCrunch in response to a question about its Series C that his company was “fortunate to have significant investor demand for our Series C, partly due to hitting milestones as quickly” as it has. That sounds like the possibility of competing lead investors to us, at least from our present remove.

The M1 round continues the savings and investing boom we’ve tracked this year. And the round is a win for the Midwest at the same time. More when M1 reaches $3 billion in AUM. Start your countdown.

Electric car company Lucid finally revealed the price of its least expensive vehicle and it will start at $77,400. US buyers also qualify for a $7,500 tax credit making the vehicle eventually cost $69,900.

This version of the Lucid Air comes rightfully less equipped than its more expensive counterparts. For $77,400 buyers get a 480 HP powertrain that Lucid says is good for 408 miles — though the EPA has yet to test it. A dual-motor, all-wheel drive version is also available.

This model is critical to Lucid’s success. The company previously unveiled the specs and prices of the higher priced Air sedans. This model is significantly less expensive than the others, allowing Lucid to reach more buyers while still offering competitive features.

Before today, the company would only commit to saying it would be under $80,000.

During a recent interview with TechCrunch, Lucid CEO Peter Rawlinson told TechCrunch editor Darrell Etherington that the Air would be available at a price “surprisingly lower than $80,000.”

The Lucid Air is launching into a market dominated by Tesla. And at this price, the Lucid Air is still outclassed by the Tesla Model S, which for a similar price, offers the same range from a dual-motor, all-wheel drive affair.

Atlassian has been offering collaboration tools, often favored by developers and IT for some time with such stalwarts as Jira for help desk tickets, Confluence to organize your work and BitBucket to organize your development deliverables, but what it lacked was machine learning layer across the platform to help users work smarter within and across the applications in the Atlassian family.

That changed today, when Atlassian announced it has been building that machine learning layer called Atlassian Smarts, and is releasing several tools that take advantage of it. It’s worth noting that unlike Salesforce, which calls its intelligence layer Einstein or Adobe, which calls its Sensei; Atlassian chose to forgo the cutesy marketing terms and just let the technology stand on its own.

Shihab Hamid, the founder of the Smarts and Machine Learning Team at Atlassian, who has been with the company 14 years, says that they avoided a marketing name by design. “I think one of the things that we’re trying to focus on is actually the user experience and so rather than packaging or branding the technology, we’re really about optimizing teamwork,” Hamid told TechCrunch.

Hamid says that the goal of the machine learning layer is to remove the complexity involved with organizing people and information across the platform.

“Simple tasks like finding the right person or the right document becomes a challenge, or at least they slow down productivity and take time away from the creative high-value work that everyone wants to be doing, and teamwork itself is super messy and collaboration is complicated. These are human challenges that don’t really have one right solution,” he said.

He says that Atlassian has decided to solve these problems using machine learning with the goal of speeding up repetitive, time-intensive tasks. Much like Adobe or Salesforce, Atlassian has built this underlying layer of machine smarts, for lack of a better term, that can be distributed across their platform to deliver this kind of machine learning-based functionality wherever it makes sense for the particular product or service.

“We’ve invested in building this functionality directly into the Atlassian platform to bring together IT and development teams to unify work, so the Atlassian flagship products like JIRA and Confluence sit on top of this common platform and benefit from that common functionality across products. And so the idea is if we can build that common predictive capability at the platform layer we can actually proliferate smarts and benefit from the data that we gather across our products,” Hamid said.

The first pieces fit into this vision. For starters, Atlassian is offering a smart search tool that helps users find content across Atlassian tools faster by understanding who you are and how you work. “So by knowing where users work and what they work on, we’re able to proactively provide access to the right documents and accelerate work,” he said.

The second piece is more about collaboration and building teams with the best personnel for a given task. A new tool called predictive user mentions helps Jira and Confluence users find the right people for the job.

“What we’ve done with the Atlassian platform is actually baked in that intelligence, because we know what you work on and who you collaborate with, so we can predict who should be involved and brought into the conversation,” Hamid explained.

Finally, the company announced a tool specifically for Jira users, which bundles together similar sets of help requests and that should lead to faster resolution over doing them manually one at a time.

“We’re soon launching a feature in JIRA Service Desk that allows users to cluster similar tickets together, and operate on them to accelerate IT workflows, and this is done in the background using ML techniques to calculate the similarity of tickets, based on the summary and description, and so on.”

All of this was made possible by the company’s previous shift  from mostly on-premises to the cloud and the flexibility that gave them to build new tooling that crosses the entire platform.

Today’s announcements are just the start of what Atlassian hopes will be a slew of new machine learning-fueled features being added to the platform in the coming months and years.

The Exchange regularly covers companies as they approach and crest the $100 million revenue mark. Our goal in tracking startups growing at scale is to scout future IPO candidates and better understand the late-stage financing market.

Today we’re digging into a company that is a little bit bigger than that. Namely Databricks, a data analytics company that was most recently valued at around $6.2 billion in its October, 2019 Series F when it raised $400 million.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

The former startup reached a run rate of around $350 million at the end of Q3 2020, up from $200 million in revenue in Q3 2019, putting it on a rapid growth pace for a former startup of its size.

To better dig into the company’s performance, I got on the phone with its CEO, Ali Ghodsi, hoping to better understand how Databricks has managed to grow as much as it has in recent years. Ghodsi took over as CEO in 2016 after serving as the company’s VP of engineering. He’s also a co-founder.

Databricks is an obvious IPO candidate, but it’s also a company with broad private-market options, given its revenue expansion and attractive economics. Today, let’s talk about Databricks’ growth history, how it changed its sales process, and what’s ahead for the unicorn more than six times over.

What does Databricks do?

What does Databricks actually do? Normally I’d be content to wave my hands at data analytics and call it a day. Chatting with Ghodsi, however, clarified the matter, so let me help.

Let’s say that a company has a lot of data on its machinery and wants to know when different pieces are going to fail. Or, perhaps a company wants find patterns in some economic data. How do they find that information?

Ghodsi reckons you need three things: First, data engineering, or getting customer data “massaged into the right forms so that you can actually start using it.” Second, data science, which Ghodsi describes as “the machine learning algorithms, the predictive algorithms that you need to have.” And third, on top, companies “more and more” also want data warehousing and some “basic analytics,” he added.

Zoom is hosting its virtual Zoomtopia user conference this week. Given the attention the company has received as the de facto standard video meeting service since the start of the pandemic, it’s no surprise that the company is using the event to launch a number of new products. For the most part, though, we’re not talking about any enhancements to the core Zoom experience here. Instead, the company is using the event to launch its OnZoom events platform and marketplace into general availability (it was previously only available as a private beta) and it is launching Zapps, which brings apps from the company’s 35 launch partners right into the Zoom experience.

Image Credits: Zoom

OnZoom allows hosts to run one-time events or event series with up 100 or 1,000 attendees (depending on their license) and sell tickets for them. The idea here is for anybody — whether a yoga teacher, nonprofit or a professional event organizer — to list and sell tickets on the OnZoom marketplace. Right now, Zoom accepts PayPal and credit card payments, with the team saying that it may look into other payment options in the future. For non-profits, Zoom is also integrating the ability to receive donations through events through its partnership with Pledgeling.

Based on the demo the team shared ahead of today’s announcement, it’s a pretty straightforward experience for both hosts and viewers.

Image Credits: Zoom

For the day-to-day Zoom user, the launch of Zapps (yeah – I don’t love that name either) is probably the more interesting announcement. The idea here is to integrate apps directly into the Zoom experience so that users don’t have to switch back and forth between multiple applications on their desktops.

“Zapps help surface all the applications you need to be productive and enable the free flow of information between teams before, during, and after the meeting,” the company writes. “Think of Zapps as an app store right where you need it most — in a Zoom meeting, chat, webinar, phone call, and even your contacts directory.”

These apps can be launched as screen shares, but more importantly, you can send them to all participants for real-time collaboration.

The 35 launch partners include the likes of Asana, Atlassian, Dropbox, Hubspot, Slack, SurveyMonkey, Wrike and Zendesk.

Spotify today is launching a new feature that combines spoken word audio commentary with music tracks. The new format will allow Spotify to reproduce the radio-like experience of listening to a DJ or a music journalist offering their perspective on the music. But Spotify is also making it possible for anyone to use the format to create a music-filled podcast through an integration with Spotify’s own DIY podcasting app, Anchor.

Spotify says the new shows will still compensate the artist the same as if the track was streamed normally, as the format relies on Spotify’s music catalog licenses just like regular streams.

However, the experience will be customized to listeners based on what tier of Spotify’s service they use.

Image Credits: Spotify

Premium subscribers will be able to hear the full tracks as part of the shows, Spotify explains, while free listeners will only hear the 30-second previews.

Listeners can also interact with the music content within the shows as they otherwise could in a playlist — by liking the songs, saving the track, or viewing more information about the track without having to leave the episode page or do a search. To do this, you’ll hit “Explore Episode” on the show’s episode page, or tap the play bar at the bottom of the screen to pull up the track list.

Image Credits:

The format is similar in some ways to Pandora’s Stories, also a combination of music and podcasting, introduced last year. But Pandora’s effort focused on allowing artists to add narratives to their music — like talking about the meaning of a song or what inspires them. Other creators could also apply for access.

Spotify’s new format, meanwhile, is immediately open to all users in supported regions.

As of today, the Anchor app will now allow any user to create a show using this format in the U.S., U.K., Canada, Australia, New Zealand, and Ireland, to start.

The app’s update will allow users to select a new “Music” tool, which then connects them with the entire Spotify music catalog of over 65 million tracks. Users will also be able to connect their Spotify account to browse and select songs from their own playlists to add to shows.

This is a significant update, as limitations around streaming rights had previously limited podcast creators from being able to easily integrate licensed music in their programs.

Image Credits: Spotify

Creators will also be about to insert ads in their shows, via Anchor Sponsorships. The company notes that this process is still considered a beta, and it will be manually reviewing shows using the format for now. The review process can take up to 24 hours.

Spotify says the feature will expand to more markets soon.

At launch, Spotify is also launching its own set of seven Spotify Original Shows that put the new format to work, which can be found in the new “Shows With Music” hub in the Browse section of the Spotify app or in a programmed shelf in your Home tab.

These first seven shows include (descriptions via Spotify):

• Halleloo Happy Hour with DJ Shangela – Grab a drink and join our effervescent host, “Shangela” (A Star is Born, Ru Paul’s Drag Race), for her weekly happy hour playlist! Featuring games, guests, and tea. Halleloo!
• Murder Ballads – Explore the history and folklore behind some of America’s most mysterious and violent songs.
  60 Songs That Explain the 90s – The 1990s were a turning point in music. Listen along as The Ringer’s preeminent music critic Rob Harvilla curates and explores 60 iconic songs from the ‘90s that define the decade.
• Our Love Song – Every week a couple shares the soundtrack that defines their love story. As a culture we are fascinated by love and romance. It is why the majority of songs are about love and heartbreak. This show will not only explore entertaining love stories, but also the classic songs that define these relationships.
• Conspiracy Theories: Music Edition – A deeper look at some of the most fascinating theories surrounding famous artists and the music industry as it affects the world.
• Rock This with Allison Hagendorf – Rock This with Allison Hagendorf is a weekly show celebrating all things Rock & Alternative culture, featuring one of a kind interviews and highlighting music from your favorite and emerging artists.
• 10 Songs That Made Me – An artist or celebrity creates a storytelling playlist of 10 songs that mark meaningful moments in their lives, providing personal insights into each song choice.

The company formerly known as NewsCred has a new name and a new product: Welcome.

Co-founder and CEO Shafqat Islam explained that this follows a broader shift in the company’s strategy. While previously known as a content marketing business, Islam said NewsCred has been increasingly focused on building a broader software platform for marketers (a platform that it used itself).

Eventually, this led the company to sell its content services business to business journalism company Industry Dive and its owner Falfurrias Capital Partners over the summer. Now Welcome is officially unveiling its new brand, whcih it’s also using for its new marketing orchestration software.

“It’s not often not often that startups like ours get to close one chapter and open another chapter,” Islam said. “We kind of went back to being a Series A, Series B startup, iterating and working very closely with our customers.”

While today is the official launch of Welcome platform, Islam said the company has been moving the software in this direction for the past year, and that this side of the business has already seen significant growth, with daily average users up 300% year-over-year.

Islam also suggested that while this was the right time to come up with a new company name, it’s something that’s been discussed repeatedly in the past.

Image Credits: Welcome

“Every time we raised money ever in last 10 years, the new investor would say, ‘What about the name? Can we change it?'” he recalled. “We could never do it, because we had this content heritage built up and enough brand equity. Finally, with this deal, and with the launch of the new software … we came up with the name Welcome.”

While there’s no shortage of marketing software out there already, Islam said marketers need an orchestration system to manage their projects and workflows — most of them, he said, are stuck using “horizontal” project management tools that aren’t really built for their needs, such as Asana or Jira.

“Marketers have very specific needs,” Islam said. “It could be a simple thing like … marketers work with campaigns, so what are your specific campaigns, marketing briefs or marketing-specific workflows? Our approach was: How do we create something that’s really specific to marketers versus all horizontal solutions out there?”

He also noted that “close to half the engineering team works on the interoperability problem,” so that Welcome can integrate all the other tools that marketers are using, like HubSpot and Marketo. The goal, Islam said, is to become “something marketers standardize on,” the way that salespeople log into their Salesforce accounts every day.

Islam also argued Welcome will take advantage of the way that the pandemic has accelerated changes in the enterprise sales process.

“I personally believe the way people buy software is changing,” he said. “The days of wining and dining and selling to the CMO, that still exists, but that’s not how everyone wants to buy anymore.”

To adapt to this new world, Islam said the startup is adopting a more “bottoms up” sales approach, with a free version of the platform due for release next month.

An investigation into this summer’s Twitter hack by the New York State Department of Financial Services (NYSDFS) has ended with a stinging rebuke for how easily Twitter let itself be duped by a “simple” social engineering technique — and with a wider call for key social media platforms to be regulated on security.

In the report, the NYSDFS points, by way of contrasting example, to how quickly regulated cryptocurrency companies acted to prevent the Twitter hackers scamming even more people — arguing this demonstrates that tech innovation and regulation aren’t mutually exclusive.

Its point is that the biggest social media platforms have huge societal power (with all the associated consumer risk) but no regulated responsibilities to protect users.

The report concludes this is a problem U.S. lawmakers need to get on and tackle stat — recommending that an oversight council be established (to “designate systemically important social media companies”) and an “appropriate” regulator appointed to ‘monitor and supervise’ the security practices of mainstream social media platforms.

“Social media companies have evolved into an indispensable means of communications: more than half of Americans use social media to get news, and connect with colleagues, family, and friends. This evolution calls for a regulatory regime that reflects social media as critical infrastructure,” the NYSDFS writes, before going on to point out there is still “no dedicated state or federal regulator empowered to ensure adequate cybersecurity practices to prevent fraud, disinformation, and other systemic threats to social media giants”.

“The Twitter Hack demonstrates, more than anything, the risk to society when systemically important institutions are left to regulate themselves,” it adds. “Protecting systemically important social media against misuse is crucial for all of us — consumers, voters, government, and industry. The time for government action is now.”

We’ve reached out to Twitter for comment on the report

Among the key findings from the Department’s investigation are that the hackers broke into Twitter’s systems by calling employees and claiming to be from Twitter’s IT department — through which simple social engineering method they were able to trick four employees into handing over their log-in credentials. From there they were able to access the Twitter accounts of high profile politicians, celebrities, and entrepreneurs, including Barack Obama, Kim Kardashian West, Jeff Bezos, Elon Musk, and a number of cryptocurrency companies — using the hijacked accounts to tweet out a crypto scam to millions of users.

Twitter has previously confirmed that a “phone spear phishing” attack was used to gain credentials.

Per the report, the hackers’ “double your bitcoin” scam messages, which contained links to make a payment in bitcoins, enabled them to steal more than $118,000 worth of bitcoins from Twitter users.

Although a considerably larger sum was prevented from being stolen as a result of swift action taken by regulated crypto companies — namely: Coinbase, Square, Gemini Trust Company and Bitstamp — who the Department said blocked scores of attempted transfers by the fraudsters.

“This swift action blocked over 6,000 attempted transfers worth approximately $1.5 million to the Hackers’ bitcoin addresses,” the report notes.

Twitter is also called out for not having a cybersecurity chief in post at the time of the hack — after failing to replace Michael Coates, who left in March. (Last month it announced Rinki Sethi had been hired as CISO).

“Despite being a global social media platform boasting over 330 million average monthly users in 2019, Twitter lacked adequate cybersecurity protection,” the NYSDFS writes. “At the time of the attack, Twitter did not have a chief information security officer, adequate access controls and identity management, and adequate security monitoring — some of the core measures required by the Department’s first-in-the-nation cybersecurity regulation.”

European Union data protection law already bakes in security requirements as part of a comprehensive privacy and security framework (with major penalties possible for security breaches). However an investigation by the Irish DPC of a 2018 Twitter security incident is still yet to conclude after a draft decision failed to gain the backing of the other EU data watchdogs this August — triggering a further delay to the pan-EU regulatory process.