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What tech gets right about healthcare

This week, our long-time healthtech correspondent Sarah Buhr href="https://techcrunch.com/2019/08/06/what-tech-gets-right-about-healthcare/">talked to leading health VCs Phin Barnes of First Round Capital, Matt Ocko of DCVC, and Nick Naclerio of Illumina Ventures about what they are seeing in the healthtech ecosystem, how they are thinking about investments in the space, as well as the reasons behind why they led their recent deals in health startups.

[DCVC’s] thesis is simple: if the cost for superior, life-saving care is half to 10x less, and results are 10-100 times better, then adoption happens quickly, and hospitals and insurance companies are hard-pressed to say no to saving money while lives are saved. Some of the healthcare companies we have invested in have achieved dramatic results to help deliver “disruption from within”.

One example is Karius, which uses genomics and AI to advance infectious disease diagnostics. The company can recognize almost every pathogen mankind has ever encountered at the genomic level.

Using machine learning algorithms that allow for rapid analysis of complex genomic data, they are pioneering new testing methodologies to accurately detect and characterize infectious diseases. Instead of relying on a century-old method developed by Louis Pasteur that can take weeks for a result, the Karius gene-based blood test that can return results in a day.

This can make the difference between life and death. And Karius’ technology is backed by multiple large-scale studies, peer-reviewed publications, and a delivery and reimbursement model that satisfies both doctors and administrators in the existing framework of the healthcare system.

How to fundraise in August

Fundraising is always brutal (even if journalists never cover the gritty and gory details). And August would seemingly be the most brutal month to fundraise, what with everyone on vacation. The reality though is that while you can’t fundraise in August the way you might in September or October, there are a lot of strategies you can use to take advantage of the uniquely relaxed tenor that August offers. I provide some context for how to fundraise in August, as well as some tactics to implement to maximize your fundraising efficiency in the fall.

Nike’s market cap has swollen past $100 billion, but the shoe company still sees potential to learn more about what customers want and how to source and stock products to meet those needs. The company announced that it has acquired the Boston area startup Celect to help Nike beef up its predictive analytics strengths.

Like any good Boston startup, Celect’s tech came out of MIT — both of the company’s co-founders were former professors there. The startup’s tech focuses on delivering data insights after being fed a bunch of strctured and unstructured retail data. These insight allow retailers to see cost/benefit analysis of arranging their inventory, something that might interest Nike which banked $36.4 billion in revenue last year.

“As demand for our product grows, we must be insight-driven, data-optimized and hyper-focused on consumer behavior. This is how we serve consumers more personally at scale,” Nike COO Eric Sprunk said in a statement.

Terms of the deal weren’t disclosed. Celect raised over $30 million from investors including August Capital, NGP Capital and Activant Capital. The company most recently closed a $15 million Series C in December of last year.

Getting even the most well-organized team to agree on anything can be hard. Tel Aviv’s Ment.io, formerly known as Epistema, wants to make this process easier by applying smart design and a dose of machine learning to streamline the decision-making process.

Like with so many Israeli startups, Ment.io’s co-founders Joab Rosenberg and Tzvika Katzenelson got their start in Israel’s intelligence service. Indeed, Rosenberg spent 25 years in the intelligence service, where his final role was that of the deputy head analyst. “Our story starts from there, because we had the responsibility of gathering the knowledge of a thousand analysts, surrounded by tens of thousands of collection unit soldiers,” Katzenelson, who is Ment.io’s CRO, told me. He noted that the army had turned decision making into a form of art. But when the founders started looking at the tech industry, they found a very different approach to decision making — and one that they thought needed to change.

If there’s one thing the software industry has, it’s data and analytics. These days, the obvious thing to do with all of that information is to build machine learning models, but Katzenelson (rightly) argues that these models are essentially black boxes. “Data does not speak for itself. Correlations that you may find in the data are certainly not causations,” he said. “Every time you send analysts into the data, they will come up with some patterns that may mislead you.”

So Ment.io is trying to take a very different approach. It uses data and machine learning, but it starts with questions and people. The service actually measures the level of expertise and credibility every team member has around a given topic. “One of the crazy things we’re doing is that for every person, we’re creating their cognitive matrix. We’re able to tell you within the context of your organization how believable you are, how balanced you are, how clearly you are being perceived by your counterparts, because we are gathering all of your clarification requests and every time a person challenges you with something.”

At its core, Ment.io is basically an internal Q&A service. Anybody can pose questions and anybody can answer them with any data source or supporting argument they may have.

“We’re doing structuring,” Katzenelson explained. “And that’s basically our philosophy: knowledge is just arguments and counterarguments. And the more structure you can put in place, the more logic you can apply.”

In a sense, the company is doing this because natural language processing (NLP) technology isn’t yet able to understand the nuances of a discussion.If you’re anything like me, though, the last thing you want is to have to use yet another SaaS product at work. The Ment.io team is quite aware of that and has built a deep integration with Slack already and is about to launch support for Microsoft Teams in the next few days, which doesn’t come as a surprise, given that the team has participated in the Microsoft ScaleUp accelerator program.

The overall idea here, Katzenelson explained, is to provide a kind of intelligence layer on top of tools like Slack and Teams that can capture a lot of the institutional knowledge that is now often shared in relatively ephemeral chats.

Ment.io is the first Israeli company to raise funding from Peter Thiel’s late-stage fund, as well as from the Slack Fund, which surely creates some interesting friction, given the company’s involvement with both Slack and Microsoft, but Katzenelson argues that this is not actually a problem.

Microsoft is also a current Ment.io customer, together with the likes of Intel, Citibank and Fiverr.

August is often considered the black hole of venture capital fundraising. Everyone is on vacation (well, everyone who’s not a founder anyway), while half of Silicon Valley is slogging down to Black Rock City for Burning Man. It understandably can just seem like an exercise in futility to try to raise any funding at all.

I’m here to tell you though that August is not the bleakest month of the year for fundraising (that actually would be December according to data from DocSend we’ve published). In fact, using August effectively for fundraising is perhaps the single most important factor for success in the coming fundraising season (there is a reason that YC Demo Day, one of the largest fundraising events in the calendar, is set for August 19-20 after all).

Let’s walk through a plan of attack.

First, the truth about VCs and vacation

Let’s get one thing out of the way: Yes, VCs take vacation, sometimes sparklingly expensive ones, like the kinds with yachts or the kinds where someone rents out a whole ski chalet (or two). It can seem like an incredibly enviable lifestyle, and it is at a certain point of success, particularly in comparison to the context of a founder who is working around the clock and eating instant ramen.

PodcastOne, the celebrity podcasting network from the founder of radio powerhouse WestwoodOne, is launching a free hosting platform for podcasters.

The Los Angeles-based syndicated podcasting platform, which counts athletes, politicians, talk radio, and reality television stars like Adam Carolla, Shaquille O’Neal, Steve Austin, Kaitlyn Bristowe, Dan Patrick, Spencer and Heidi Pratt, Jim Harbaugh, Ladygang, Dr. Drew, Chael Sonnen, Rich Eisen, Barbara Boxer, is angling to get insight into potential new talent through the venture. 

“We will see which podcasts are performing well and offer them the opportunity to partner and grow with PodcastOne, and provide them with all the resources the network offers, including production, talent booking, promotion, a dedicated sales team and more,” said PodcastOne chief executive, Peter Morris, in a statement. “As the leading ad-supported podcast network, we are embracing the over 700,000 podcasts out there, and are here to support the long-term growth of independent podcasters.”

Called Launchpad Digital Media, the new hosting service is pitching podcasters a free platform including unlimited hosting; access to analytics including listenership, geography, and device data; total ownership of direct monetization channels for a podcast’s subscriber base, and complete control over how podcasts are distributed via Apple, Spotify or other services.

The company is also billing itself as a discovery platform, offering free promotion for the services various podcasts across its own network of popular podcasting talent.

“Over the years, people have shared with us how hard it can be out there in the desert of independent podcasting: you have to pay to host and get your podcast heard; you get no help in discoverability; you’re scared to leave and stop paying your hosting platform because you might lose your subscribers; and it’s virtually impossible to get noticed by a major podcast network who can help you take your hard work to the next level,” said Morris, in a statement. “Launchpad was built with the independent podcaster in mind. We wanted to help solve these problems… for free.”

Since nothing is actually free, and since PodcastOne wants to get paid, the catch is the company’s own ability to insert pre- and mid-roll advertising into podcasts that are hosted on the new service.

So podcasters can manage their direct advertising, but they give PodcastOne the ability to slot in ads that the company chooses across any of the podcasts that agree to be hosted on the service. It gives the company access to both marquee talent for high value, big spending advertisers, and a way to flood other podcasts with whatever ads the company wants.

Ads that LaunchpadDM inserts won’t be longer than two total minutes per episode and podcasters can determine the location of the midroll spot when uploading the episode.

Rookout, a startup that provides debugging across a variety of environments including serverless and containers, announced an $8 million Series A investment today. It plans to use the money to expand beyond its debugging roots.

The round was led by Cisco Investments along with existing investors TLV Partners and Emerge. Nat Friedman, CEO of GitHub; John Kodumal, CTO and co-founder of LaunchDarkly, and Raymond Colletti, VP of revenue at Codecov also participated.

“Rookout from day one has been working to provide production debugging and collection capabilities to all platforms,” Or Weis, co-founder and CEO of Rookout told TechCrunch. That has included serverless like AWS Lambda, containers and Kubernetes and Platform as a Service like Google App Engine and Elastic Beanstalk

The company is also giving visibility into platforms that are sometimes hard to observe because of the ephemeral nature of the technology, and that go beyond its pure debugging capabilities. “In the last year, we’ve discovered that our customers are finding completely new ways to use Rookout’s code-level data collection capabilities and that we need to accommodate, support and enhance the many varied uses of code-level observability and pipelining,” Weiss said in a statement.

It was particularly telling that a company like Cisco was deeply involved in the round. Rob Salvagno, vice president of Cisco Global Corporate Development and Cisco Investments, likes the developer focus of the company.

“Developers have become key influencers of enterprise IT spend. By collecting data on-demand without re-deploying, Rookout created a Developer-centric software, which short-circuits complexities in the production debugging, increases Developer efficiency and reduces the friction which exists between IT Ops and Developers,” Salvagno said in a statement.

Rookout, which launched in 2017, has offices in San Francisco and Tel Aviv with a total of 20 employees so far. It has raised over $12 million.

For the past decade, Brian Faux has been fighting on the front lines of housing finance. In between pursuing a career in mortgage lending and holding stints at Freddie Mac and Wells Fargo, Faux spent more than two years in the detritus of the 2008 financial crisis advising the Department of Housing and Urban Development on how to recover the housing markets through the creation of the Distressed Asset Stabilization Program.

Now Faux, along with co-founders Nora Apsel and Adam Rothblatt, is working to take those hard-learned lessons and build a streamlined and simple mortgage broker online, particularly for first-time homebuyers. Through New York City-based Morty, the trio and their team have launched a tool that allows homebuyers to understand exactly what their buying power is and which homes they can afford.

That product has captured the attention of investors. The company announced today an $8.5 million Series A fundraise led by Prudence Holdings, with participation from Lerer Hippeau and Thrive Capital, the firm which had led Morty’s seed round in 2017. Prudence, a family office managed by Gavin Myers, previously backed real estate brokering startup Compass, and the Morty team first met the firm through participation in TechStars New York.

Morty’s main product guides homebuyers through the process of getting mortgage pre-approval and then finding and signing a loan with a mortgage lender. Through a “Home Financing Score,” the platform visually breaks down the factors that can lead to approval or rejection of a mortgage application, allowing users to optimize their finances to maximize their buying power.

While code operates much of the underwriting and origination process, there is a human touch as well. Faux explained that with current mortgage options, “It’s still too scary. It’s still too opaque, [so consumers] want that human interaction, eventually, but they just wanted it on their terms. And nobody’s kind of brought that to them” before Morty.

Apsel said that “As well as having a digital platform that automatically verifies and underwrites people so that they know exactly how much they qualify for, we also have have mortgage experts on staff available to help people through every step of the home buying process.”

She says that transparency and education have been key to Morty’s early indicators of success. “What we have found is that as long as you are communicating those things to all of the necessary parties — the homebuyer, the realtor, the title agent, everybody — it works. It’s the lack of transparency, and it’s the lack of communication that I think has frustrated this industry for so long,“ she said.

Morty founders Adam Rothblatt, Brian Faux, and Nora Apsel. Photo via Morty

Morty, which at launch had licenses to operate in 10 states, has now expanded to cover 34 states. One notable exception though is New York, which has particularly stringent and slow-moving licensing processes. The company is hoping to have full nationwide coverage in the years ahead.

Faux says that while the startup focuses on first-time homebuyers, there is nothing preventing the company from expanding to repeat home sales as well. “Once you build trust, and once you show them who you truly are, unbiased and just looking out for their well being, they’ll come back to you,” he said.

Startups related to home buying have received intense attention from investors, with companies like Blend and Opendoor receiving nine-figure infusions of capital over the past few weeks. And Morty is also up against incumbents like LendingTree, which aggregates loans in a variety of categories. Morty’s differentiation is ultimately its focus on ease-of-use, as well as its wide licensing.

Testing, testing. Is this emergency warning system on? We’re about to find out.

The Federal Emergency Management Agency, or FEMA, will later today buzz every television and radio in the U.S. with a test of the Emergency Alert System (EAS).

If you’re watching television or listening to radio at 2:20pm ET (11:20am PT), you’ll see and hear the test message.

“THIS IS A TEST of the National Emergency Alert System,” the message will read. “If this had been an actual emergency an official message would have followed the tone alert you heard at the start of this message. No action is required.”

FEMA’s Emergency Alert System is one of several systems in place to communicate emergency messages to the public on a mass scale.

As mobile devices became more common across the U.S. population than televisions and radios, FEMA began working on the Wireless Emergency System to send notifications to smartphone users. It was designed to allow the sitting president to send a message to all U.S. phones in the event of national emergency. Its first test ran last year after a short delay following Hurricane Florence on the east coast.

Today’s test, however, is to measure the system’s readiness to alert in the absence of cell service or internet connectivity.

“Other radio and television broadcast and cable stations in each state that monitor PEP stations will receive and broadcast the test message so that within minutes the test message should be presented by all radio and television, cable, wireline service providers and direct broadcast satellite service providers nationwide,” said FEMA in a blog post.

The first nationwide test was in 2011. This is the first nationwide test of the system this year, and the fifth test to date.

FedEx is ending a partnership with Amazon to supply the ecommerce company with ground delivery shipping after its current contract ends this month, the company confirmed to Bloomberg. This is the second contract FedEx has allowed to end without renewal with Amazon, following a similar decision in June that covered only Express air shipments.

The new contract termination is more significant than the earlier one, in that it means FedEx will not be providing any last-mile delivery service for Amazon, the largest online retailer, in addition to its less sizeable Express air freight. FedEx previously said that Amazon actually makes up less than 1.3 percent of the shipper’s total revenue, as measured over the year that ended on December 31, 2018.

Amazon is expanding its own shipping capabilities considerably, adding more aircraft to its fleet, and deploying ground-based wheeled delivery robots for last-mile package transportation. The ecommerce giant also recently began its own Delivery Service Partner program to fund and support delivery startup businesses that can help address its need for logistics. It has increasingly relied on its own contracted last-mile delivery services in recent years, and also allocates more of this business to both UPS and USPS than to FedEx even outside its other offerings.

FedEx did explicitly point out that its Express contract ending had no impact on other aspects of its relationship with Amazon at the time, noting that its international and “other” business units (including ground) weren’t affected. The company also says it’s looking to capitalize on the demand for ecommerce outside of Amazon, and building its network intentionally to “serve thousands of retailers in the e-commerce space.”

CircleCI has been supporting continuous integration for Linux and Mac programmers for some time, but up until today, Microsoft developers have been left on the outside looking in. Today, the company changed that announcing new support for Microsoft programmers using Windows Server 2019.

CircleCI, which announced a $56 million Series D investment last month, is surely looking for ways to expand its market reach, and providing support for Microsoft programmers is a good place to start, as it represents a huge untapped market for the company.

“We’re really happy to announce that we are going to support Windows because customers are asking for it. Windows [comprises] 40% of the development market, according to a Stack Overflow survey from earlier this year,” Alexey Klochay, CircleCI product manager for Windows told TechCrunch.

Microsoft programmers could have used continuous integration before outside of CircleCI, but it was much harder. Klochay says that with CircleCI, they are getting a much more integrated solution. For starters, he says, developers can get up and running right away without the help of an engineer. “We give the power to developers to do exactly what they need to do at their own pace without getting locked into anything. We’re providing  ease of use and ease of maintenance,” he explained.

CircleCI also provides greater visibility across a development team. “We are also giving companies tools to get to get better visibility into what everyone is building, and how everyone is interacting with the system,” he said.

Klochay says that much of this is possible because of the changes in Windows Server 2019, which was released last year. “Because of all the changes that Microsoft has been introducing, in the latest Windows Server, it has been a smoother experience than if we had to start the year ago,” he said.

Nathan Dintenfass from CircleCI says that in general, the Microsoft ecosystem has shifted in recent years to be more welcoming to the kind of approach that CircleCI provides for developers. “We have observed a maturation of the Windows ecosystem, and being more and more attracted to the kinds of teams that are investing in really high throughput software delivery automation, while at the same time same a maturation of the underlying cloud infrastructure that makes Windows available, and makes it much easier for us to operate,” he explained.