Category: UNCATEGORIZED

Next Insurance, a three-year-old U.S.-based firm that sells insurance products to small businesses, has become the latest unicorn in the nation after bagging $250 million in a new financing round, the startup said today.

Germany-based Munich Re, one of the world’s largest reinsurers, alone funded Next Insurance’s Series C round, the two said in a statement. The new financing round valued the three year-year-old startup, which has raised $381 million to date, at over $1 billion, the startup said.

Guy Goldstein, co-founder and chief executive of Next Insurance, said the startup will use the fresh capital to build new products and expand its customer initiatives. Next Insurance offers a wide-range of insurance coverage to over 1,000 unique types of business. It has amassed over 70,000 customers in the U.S., the only market where it currently operates.

In a statement, Joachim Wenning, Chairman of the Board of Management at Munich Re, said the new investment will help Munich Re expand its footprint in the U.S.’ insurance market of small and medium-sized commercial customers.

“Next Insurance will benefit from our expertise in primary insurance and reinsurance. This investment emphasizes Munich Re’s commitment to be the leading provider of digital insurance solutions,” added Wenning.

More to follow…

83North has closed its fifth fund, completing an oversubscribed $300 million raise and bringing its total capital under management to $1.1BN+.

The VC firm, which spun out from Silicon Valley giant Greylock Partners in 2015 — and invests in startups in Europe and Israel, out of offices in London and Tel Aviv — last closed a $250M fourth fund back in 2017.

It invests in early and growth stage startups in consumer and enterprise sectors across a broad range of tech areas including fintech, data centre & cloud, enterprise software and marketplaces.

General partner Laurel Bowden, who leads the fund, says the latest close represents investment business as usual, with also no notable changes to the mix of LPs investing for this fifth close.

“As a fund we’re really focused on keeping our fund size down. We think that for just the investment opportunity in Europe and Israel… these are good sized funds to raise and then return and make good multiples on,” she tells TechCrunch. “If you go back in the history of our fundraising we’re always somewhere between $200M-$300M. And that’s the size we like to keep.”

“Of course we do think there’s great opportunities in Europe and Israel but not significantly different than we’ve thought over the last 15 years or so,” she adds.

83North has made around 70 investments to date — which means its five partners are usually making just one investment apiece per year.

The fund typically invests around $1M at the seed level; between $4M-$8M at the Series A level and up to $20M for Series B, with Bowden saying around a quarter of its investments go into seed (primarily into startups out of Israel); ~40% into Series A; and ~30% Series B.

“It’s somewhat evenly mixed between seed, Series A, Series B — but Series A is probably bigger than everything,” she adds.

It invests roughly half and half in its two regions of focus.

The firm has had 15 exits of portfolio companies (three of which it claims as unicorns). Recent multi-billion dollar exits for Bowden are: Just Eat, Hybris (acquired by SAP), iZettle (acquired by PayPal) and Qlik.

While 83North has a pretty broad investment canvas, it’s open to new areas — moving into IoT (with recent investments in Wiliot and VDOO), and also taking what it couches as a “growing interest” in healthtech and vertical SaaS. 

“Some of my colleagues… are looking at areas like lidar, in-vehicle automation, looking at some of the drone technologies, looking at some even healthtech AI,” says Bowden. “We’ve looked at a couple of those in Europe as well. I’ve looked, actually, at some healthtech AI. I haven’t done anything but looked.

“And also all things related to data. Of course the market evolves and the technology evolves but we’ve done things related to BI to process automation through to just management of data ops, management of data. We always look at that area. And think we’ll carry on for a number of years. ”

“In venture you have to expand,” she adds. “You can’t just stay investing in exactly the same things but it’s more small additional add-ons as the market evolves, as opposed to fundamental shifts of investment thesis.”

Discussing startup valuations, Bowden says European startups are not insulated from wider investment dynamics that have been pushing startup valuations higher — and even, arguably, warping the market — as a consequence of more capital being raised generally (not only at the end of the pipe).

“Definitely valuations are getting pushed up,” she says. “Definitely things are getting more competitive but that comes back to exactly why we’re focused on raising smaller funds. Because we just think then we have less pressure to invest if we feel that valuations have got too high or there’s just a level… where startups just feel the inclination to raise way more money than they probably need — and that’s a big reason why we like to keep our fund size relatively small.”

On the heels of Bird closing a $275 million round to help put itself in pole position in the electric scooter market, a smaller European rival has also raised some money to grow its own business. Tier Mobility, a Berlin-based startup that operates a fleet of 20,000 scooters across 40 cities in 12 countries, has raised $60 million, funding that co-founder and CEO Lawrence Leuschner said Tier plans to invest in further geographical expansion and technology.

Tier earlier this year started to describe itself as a “micro mobility” player, with plans to augment scooters with other transportation options, but in an interview Leuschner declined to say what those might be, or when they will come online. In the meantime, it’s been upgrading its fleet to a more robust hardware to cut down on maintenance costs (which has typically been one of the biggest strains on scooter startups): these newer scooters have lifespans of around 18 months and now make up some 80% of Tier’s current fleet, Leuschner said.

This latest funding, a Series B, is being co-led by Mubadala Capital and Goodwater Capital. Mubadala is the state fund for Abu Dhabi, which is currently the only non-European market where Tier operates. Mubadala made some headlines earlier this year when it was revealed that Softbank was backing its $400 million fund for European investments. (Indirectly, this also means that Softbank is backing Tier.)

“We firmly believe that micro-mobility as a form of transportation is here to stay, especially in Europe,” said Amer Alaily from Mubadala Capital in a statement. “We are confident that Tier Mobility is best positioned to become the leading player in Europe and globally. We are excited and look forward to building a global category leading company out of Europe.”

Others in this round include insurance giant Axa Germany, Evli Growth Partners, White Star Capital, Northzone, Speedinvest, Point9, Indico, Kibo Ventures, Market One Capital and Formula One racing champion Nico Rosberg, and the valuation is not being disclosed.

The scooter market is a crowded one, but Tier’s rapid growth points both to the opportunity for those building services in it, and Tier’s own success. Since raising its Series A (initially €25 million, but expanded to €32 million in February of this year), Tier has grown to 10 million rides, adding 8 million in the last four months both through its direct services and by way of partnerships with others, such as car rental company Sixt. That growth has led Tier to claim that it is currently the fastest-growing mobility company “in the world.” Leuschner — who co-founded the company with Matthias Laug (now CTO) — said the goal now is to hit between 3 million and 5 million rides monthly.

The funding today takes the total raised by Tier to around $95 million, a relatively modest amount when you consider the hundreds of millions raised by the likes of Bird (capital that it’s using in part to grow in Europe in direct competition with Tier).

Tier has taken the view, however, that big money isn’t the only way to build a big service. “With our series A funding of €32 million, we built the fastest growing mobility company,” Leuschner said. “We achieved that with a fraction of the capital of Bird and Lime. That shows how efficiently we are operating. With this round we will now accelerate the growth based on our scalable infrastructure and positive unit economics.”

With scooter market’s unit economics unlike that of car-based on-demand transportation (the vehicles are owned, and there are not drivers to pay out, for starters), he said that Tier is already profitable in some of its markets.

One of the big sticking points that has hindered the growth of more scooter services has been regulation and specifically safety concerns, with reports of faulty software and human error / reckless driving both contributing to a number of accidents.

Leuschner noted that Tier has had around 250 accidents to date across its 10 million rides, with “the vast majority minor accidents.”

“We continue to educate users, but I can’t see a significant safety issue compared to other vehicles,” he added. “I think Tier is has taken a leadership role in safety with the safest scooter on the market, permanent education of our users and insurance for every driver in every city.”

In this regard, having an insurance company — Axa — now on board as a strategic investor will potentially see both more safety initiatives rolled out by Tier, but also potentially the emergence of insurance policies provided to customers as part of the service.

“Tier Mobility is not only the fastest growing mobility company in the world, but one of the fastest growing companies in consumer tech history,” noted Chi-Hua Chien, the star investor and Goodwater Capital co-founder who had previously been at Kleiner Perkins and before that Accel. “With phenomenal execution they have emerged as the leading micro-mobility provider in Europe on only a fraction of the invested capital of their competitors. This is a true testament to the uniquely capital efficient and profitable model the team chose to deploy from the outset. Tier’s unique approach to operations and partnerships yields superior unit economics and defensibility.”

India’s budget lodging startup Oyo Hotels and Homes said today it plans to raise about $1.5 billion as part of a new financing round as the startup looks to expand its footprints in the U.S. and Europe.

Ritesh Agarwal, the founder and CEO of Oyo, has committed to infuse $700 million to buy new shares in the company, which has already become one of the largest hotel chains in Asia. Existing investors SoftBank Group, Lightspeed Venture Partners, Sequoia India also intend to participate in the round, which would value the six-year-old startup at $10 billion.

In a statement, the 25-year-old founder said the “continued support of our investors like SoftBank Vision Fund, Lightspeed, Sequoia Capital is a testament to the love, trust, and relentless support of our asset owners and customers.”

He added that the startup, which today operates in over 80 markets and manages over 1.2 million rooms, “can build a truly global brand out of India, while ensuring that the business is run efficiently and with a clear path to profitability.”

Oyo, which employs about 20,000 people, said it maintains a strong balance sheet of about $2 billion across different verticals, and plans to invest a significant part of it in the business. Agarwal said the startup is “operating profitably at the building level but at the same time our EBIDTA has also improved by 50%” over the last year.

Oyo, which entered China last year, claims to have 590,000 rooms there and presence in 332 cities. In the U.S., it has established presence in 21 states and 60 cities. In August this year, the company said it was investing $335 million in its rental business in Europe.

In July this year, Agarwal said he was planning to spend $2 billion through an entity called RA Hospitality Holdings, to raise his stake in the company from 10% to 30%. Early investors Lightspeed and Sequoia have agreed to sell part of their stake in the startup. Prior to today’s announcement, Oyo had raised about $1.7 billion — $1 billion of which came from its last year’s financing round. Oyo today counts Airbnb as one of its investors.

A show of hands, startuppers. Who’s ready to save some money on passes to Disrupt Berlin 2019, our premier tech conference that takes place on 11-12 December? Then listen up, because our super early bird pricing ends in just five days. Right now, passes start at €345 + VAT and, depending on which pass you choose, you can save up to €600. Ka-ching!

Save your euros. Buy your passes to Disrupt Berlin before the Friday, 11 October at 11:59 p.m. (CEST) deadline. Then plan your strategy to make sure you take full advantage of Disrupt. Let’s look at what’s in store.

We’re talking two full days of programming. A roster of world-class speakers and panelists — founders, investors and icons. These are folks who have done the hard work in the trenches. They know how to succeed, and they’ll share their experiences, insights and advice.

We’re thrilled that our roster includes the likes of Julian Stiefel, co-founder/co-CEO of Tourlane. The company’s ongoing mission? Using a recent round of funding ($47 million) to address the challenging problems associated with booking group travel.

You’ll also hear from Jen Rubio, co-founder and chief brand officer of Away, one of the most successful consumer brands in years. How successful? The company, which launched in 2015, has sold more than 1 million suitcases, raised a $100 million round at a $1.4 billion valuation earlier this year and turned profitable in 2018. We’re guessing she might have just one or two tips for aspiring direct-to-consumer entrepreneurs.

Don’t miss the legendary entrepreneurial showdown that is Startup Battlefield. This epic pitch competition has, since its inception, launched 857 companies that have gone on to collective raise $8.9 billion and produce 113 exits. Be in the room and cheer on some of the world’s top early-stage startups as they compete for the $50,000 equity-free prize, investor love and global media attention.

Ready to network? There’s no better place to start than Startup Alley, the Disrupt expo floor. You’ll find hundreds of innovative early-stage startups exhibiting their tech products, services and platforms. Make connecting with the people who can help move your business forward by using CrunchMatch.

Our business-matching platform makes it easier to find and connect with people who share your business interests. You create a profile listing your specific criteria and goals. The CrunchMatch algorithm suggests matches and, subject to your approval, proposes meeting times and sends meeting requests.

When you’re in Startup Alley, be sure to keep an eye out for our TC Top Picks. These companies, curated and selected by TechCrunch editors, represent the best early-stage startups in these categories: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, CRM/Enterprise and Education.

An amazing slate of speakers, a world-class pitch competition, hundreds of exhibitors and full-tilt networking. That’s just a small taste of what’s waiting for you at Disrupt Berlin 2019  on 11-12 December. Why pay more than necessary? The super early bird pricing disappears on Friday, 11 October at 11:59 p.m. (CEST) deadline. Buy your passes here today.

Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact our sponsorship sales team by filling out this form.

A show of hands, startuppers. Who’s ready to save some money on passes to Disrupt Berlin 2019, our premier tech conference that takes place on 11-12 December? Then listen up, because our super early bird pricing ends in just five days. Right now, passes start at €345 + VAT and, depending on which pass you choose, you can save up to €600. Ka-ching!

Save your euros. Buy your passes to Disrupt Berlin before the Friday, 11 October at 11:59 p.m. (CEST) deadline. Then plan your strategy to make sure you take full advantage of Disrupt. Let’s look at what’s in store.

We’re talking two full days of programming. A roster of world-class speakers and panelists — founders, investors and icons. These are folks who have done the hard work in the trenches. They know how to succeed, and they’ll share their experiences, insights and advice.

We’re thrilled that our roster includes the likes of Julian Stiefel, co-founder/co-CEO of Tourlane. The company’s ongoing mission? Using a recent round of funding ($47 million) to address the challenging problems associated with booking group travel.

You’ll also hear from Jen Rubio, co-founder and chief brand officer of Away, one of the most successful consumer brands in years. How successful? The company, which launched in 2015, has sold more than 1 million suitcases, raised a $100 million round at a $1.4 billion valuation earlier this year and turned profitable in 2018. We’re guessing she might have just one or two tips for aspiring direct-to-consumer entrepreneurs.

Don’t miss the legendary entrepreneurial showdown that is Startup Battlefield. This epic pitch competition has, since its inception, launched 857 companies that have gone on to collective raise $8.9 billion and produce 113 exits. Be in the room and cheer on some of the world’s top early-stage startups as they compete for the $50,000 equity-free prize, investor love and global media attention.

Ready to network? There’s no better place to start than Startup Alley, the Disrupt expo floor. You’ll find hundreds of innovative early-stage startups exhibiting their tech products, services and platforms. Make connecting with the people who can help move your business forward by using CrunchMatch.

Our business-matching platform makes it easier to find and connect with people who share your business interests. You create a profile listing your specific criteria and goals. The CrunchMatch algorithm suggests matches and, subject to your approval, proposes meeting times and sends meeting requests.

When you’re in Startup Alley, be sure to keep an eye out for our TC Top Picks. These companies, curated and selected by TechCrunch editors, represent the best early-stage startups in these categories: AI/Machine Learning, Biotech/Healthtech, Blockchain, Fintech, Mobility, Privacy/Security, Retail/E-commerce, Robotics/IoT/Hardware, CRM/Enterprise and Education.

An amazing slate of speakers, a world-class pitch competition, hundreds of exhibitors and full-tilt networking. That’s just a small taste of what’s waiting for you at Disrupt Berlin 2019  on 11-12 December. Why pay more than necessary? The super early bird pricing disappears on Friday, 11 October at 11:59 p.m. (CEST) deadline. Buy your passes here today.

Is your company interested in sponsoring or exhibiting at Disrupt Berlin 2019? Contact our sponsorship sales team by filling out this form.

Welcome back to This Week in Apps, the new Extra Crunch series where we’ll help you keep up with the latest news from the world of apps — including everything from the OS’s to the apps that run upon them, as well as the money that flows through it all.

The app industry in 2018 saw 194 billion downloads and over $100 in consumer spending. Beyond that, the business of user acquisition and advertising generates even more money. And all because we’re spending more time on our phones than we do watching TV.

This week, the news was centered on the app stores’ ability to censor, the censorship in apps, and also how the antritrust investigations are forcing companies to open up access more to third parties.

Headlines

Third-party iOS apps will get to tap into Siri

According to Bloomberg and confirmed elsewhere, Apple will allow third-party messaging and phone apps to work better with the Siri digital assistant. That means, if you regularly use WhatsApp to message friends, Siri will launch that app instead of iMessage. Currently, you have to say the name of the app you want to invoke. The update is largely about Apple’s attempt to demonstrate anti-competitive behavior, in light of increased regulatory scrutiny and antitrust claims. But the change will also be a huge win for consumers as their iPhones will become more personalized to them.

In a wide-ranging conversation at TechCrunch Disrupt San Francisco last week, Postmates co-founder and chief executive officer Bastian Lehmann made light of the company’s lack of IPO documents.

The San Francisco-based on-demand delivery business was expected to publicly file its IPO prospectus in September in preparation for a fall exit, sources familiar with the matter told TechCrunch this summer. September, however, has come and gone and we’re still waiting on Postmates to release the critical document.

“The reality is that we will IPO when we believe we find the right time for the business and the right time for the markets,” Lehmann told TechCrunch. “And if you look at the markets right now, I believe they are a little choppy. They are a little choppy when it comes to growth companies specifically … We are hopeful that we find a good window to get out there.”

Lehmann made reference to Uber and other companies to recently float, citing market conditions as an IPO deterrent. Uber, Lyft, Slack and other fast-growing unicorns have struggled since entering the public markets earlier this year despite sky-high private market valuations. WeWork, a money-losing endeavor, recently decided to delay its IPO after demand from Wall Street devalued the business by the billions. Whether Postmates will complete its debut by the end of the year is unclear.

Postmates confidentially filed with the U.S. Securities and Exchange Commission for an IPO in February. Shortly after, Postmates held M&A talks with DoorDash, another food delivery unicorn, according to people familiar with the matter, but failed to come to mutually favorable terms. DoorDash has previously declined to comment on these reports. On stage last week, Lehmann declined to confirm the reports.

“I don’t think it does any good to speculate on M&A,” he said. “I think you have four well-funded players here in the U.S. in this space. I think everyone is well aware of the strengths and the weaknesses of each other and you know at some point down the line, if we take Europe for example, you will see consolidation in the market. People have conversations all the time but I wouldn’t read too much into it.”

Postmates operates its on-demand delivery platform, powered by a network of local gig economy workers, in more than 3,500 cities across all 50 states. The company does not yet operate in any international markets aside from Mexico City, however, Lehmann’s comments suggest the business could be plotting a foray into Europe, where Deliveroo, Just Eat and others dominate the market.

Postmates has raised about $900 million to date, including a $225 million round announced last month that valued the company at $2.4 billion. DoorDash, on the other hand, reached a $12.6 billion valuation in May with a $600 million Series G and has raised more than double that of Postmates. When asked why DoorDash, a similar and competing business, needed that much more capital, Lehmann joked “Maybe [DoorDash CEO Tony Xu] needs a jet, I don’t know.”

Postmates, founded in 2011 by Lehmann, is backed by Spark Capital, Founders Fund, Uncork Capital, Slow Ventures, Tiger Global, Blackrock and others. In our interview with Lehmann, the long-time CEO discussed the ‘choppy’ public markets, competitors, the company’s autonomous robotics delivery efforts and more.

Dr. Stuart Russell, a distinguished AI researcher and computer scientist at UC Berkeley, believes there is a fundamental and potentially civilization-ending shortcoming in the “standard model” of AI, which is taught (and Dr. Russell wrote the main textbook) and applied virtually everywhere. Dr. Russell’s new book, Human Compatible: Artificial Intelligence and the Problem of Control, argues that unless we re-think the building blocks of AI, the arrival of superhuman AI may become the “last event in human history.”

That may sound a bit wild-eyed, but Human Compatible is a carefully written explanation of the concepts underlying AI as well as the history of their development. If you want to understand how fast AI is developing and why the technology is so dangerous, Human Compatible is your guide, literally starting with Aristotle and closing with OpenAI Five’s Dota 2 triumph.

Stuart’s aim is help non-technologists grasp why AI systems must be designed not simply to fulfill “objectives” assigned to them, the so-called “Standard Model” in AI development today, but to operate so “that machines will necessarily defer to humans: they will ask permission, they will accept correction, and they will allow themselves to be switched off.”

(UC Berkeley’s Dr. Stuart Russell’s new book, “Human Compatible: Artificial Intelligence and the Problem of Control, goes on sale Oct. 8. I’ve written a review, “Human Compatible” is a provocative prescription to re-think AI before it’s too late,” and the following in an interview I conducted with Dr. Russell in his UC Berkeley office on September 3, 2019.)

Ned Desmond: Why did you write Human Compatible?

Dr. Russell: I’ve been thinking about this problem – what if we succeed with AI? – on and off since the early 90s. The more I thought about it, the more I saw that the path we were on doesn’t end well.

(AI Researchers) had mostly just doing toy stuff in the lab, or games, none of which represented any threat to anyone. It’s a little like a physicist playing tiny bits of uranium. Nothing happens, right? So we’ll just make more of it, and everything will be fine. But it just doesn’t work that way.  When you start crossing over to systems that are more intelligent, operating on a global scale, and having real-world impact, like trading algorithms, for example, or social media content selection, then all of a sudden, you are having a big impact on real-world, and it’s hard to control. It’s hard to undo. And that’s just going to get worse and worse and worse.

Dean’s Society – October 23, 2006; Stuart Russell

Desmond: Who should read Human Compatible?

Dr. Russell: I think everyone, because everyone is going to be affected by this.  As progress occurs towards human level (AI), each big step is going to magnify the impact by another factor of 10, or another factor of 100. Everyone’s life is going to be radically affected by this. People need to understand it. More specifically, it would be policymakers, the people who run the large companies like Google and Amazon, and people in AI, related disciplines, like control theory, cognitive science and so on.

My basic view was so much of this debate is going on without any understanding of what AI is.  It’s just this magic potion that will make things intelligent. And in these debates, people don’t understand the building blocks, how it fits together, how it works, how you make an intelligent system. So chapter two (of Human Compatible was) sort of mammoth and some people said, “Oh, this is too much to get through and others said, “No, you absolutely have to keep it.”  So I compromised and put the pedagogical stuff in the appendices.

Desmond: Why did computer scientists tend to overlook the issue of uncertainty in the objective function for AI systems?

Dr. Russell: Funnily enough, in AI, we took uncertainty (in the decision-making function) to heart starting in the 80s. Before that, most AI people said let’s just work on cases where we have definite knowledge, and we can come up with guaranteed plans.