Category: UNCATEGORIZED

Rumors have been flying this week that SAP was going to buy Berlin business process automation startup Signavio, and sure enough the company made it official today. The companies did not reveal the purchase price, but Bloomberg reported earlier this week that the deal could be worth $1.2 billion.

With Signavio SAP gets a cloud native business process management tool. SAP CFO Luka Mucic sees a world where understanding and automating businesses processes has become a key part of a company’s digital transformation efforts.

“I cannot overstress the importance for companies to be able to design, benchmark, improve and transform business processes across the enterprise to support new capabilities and business models,” he said in a statement.

While traditional enterprise BPA tools have existed for years, having a cloud native tool gives SAP a much more modern approach to attacking this problem, and being able to automate business processes via the cloud has become more important during the pandemic when many many employees are working entirely from home.

SAP also sees Signavio as a key missing piece in the company’s Business Process Intelligence unit. “The combination of business process intelligence from SAP and Signavio creates a leading end-to-end business process transformation suite to help our customers achieve the requirements needed to gain a competitive edge,” he said.

SAP has been making moves into process automation of late. In fact at SAP TechEd in December, the company announced SAP Intelligent Robotic Process Automation, its foray into the RPA space. This should fit in nicely alongside it.

Dr. Gero Decker, Savigno co-founder and CEO, sees SAP resources helping push the company beyond what it could have done on its own. “Considering the positioning of SAP, its geographical coverage and financial muscle, SAP is the biggest and best platform to bring process intelligence to every organization,” he said in a statement.

The increased resources and reach argument is one that just about every acquired company CEO makes, but being pulled into a company the size of SAP can be a double-edged sword. Yes, it has vast resources, but it’s also hard for an acquired company to find its place in a very large pond. How well they fit in and make that transition from startup to big company piece, will go a long way in determining the success of this transaction in the long run.

Signavio launched in 2009 in Berlin and has raised almost $230 million, according to Crunchbase data. Investors include Apax Digital and Summit Partners. The most recent investment was July 2019 Series C for $177 million, which came in at a $400 million valuation.

Customers include Comcast, Bosch, Liberty Mutual, and yes SAP. Perhaps it will be getting a discount now.

Cryptocurrencies, more so than most other things, are only valuable because of a shared agreement that they are valuable. Their value is a product of digital handshakes over millions of transactions firming up that consensus. For bitcoin, the trust that it has worth has turned more valuable in the past several months; it’s been on a tear.

The (very bizarre) question is whether a new avenue of applying blind trust by brigading trashcan-level stocks and turning them into memes could threaten the appeal of cryptocurrencies for retail investors.

Over the past several days, we’ve seen stocks ranging from GameStop, Blockbuster and AMC make unjustifiable gains as a result of Reddit users in the r/WallStreetBets subreddit triggering a stampede towards stocks being heavily shorted by institutional investors. That in turn has led to a short squeeze troubling hedge funds, causing the price of a stock worth around $5 for the majority of 2020 to swell well above $300 today. In some ways it’s just an Occupy Wall Street protest being held on Robinhood, in other ways it’s a complete rejection of efficient markets and a reinvention of institutional trust.

Bitcoin holds fundamental differences from publicly traded stocks, many of which might matter an awful lot to those betting on the coin as a currency of the future. But to retail investors who aren’t hardcore proponents, I’d imagine FOMO was one of the most intriguing pulls into the cryptocurrency space. But if Bitcoin’s purpose for the time being is merely a “store of value,” I think there’s a world where individual investors might be evolving their interests elsewhere.

Bitcoin and other cryptocurrencies haven’t seen notable price movement in recent days  — Bitcoin is down around 6% in the past 24 hours, a hiccup as far as crypto moves go — but after a few weeks hovering well above $30k and peeking above $40k, the currency seems poised to dip below the $30k range soon unless its trend reverses course.

All that said, Bitcoin is certainly an entity of a different scale than all of these meme stocks bundled together with a market cap above $560 billion and a 24-hour trading volume of $56 billion. Bitcoin has seen stratospheric growth over the past few months so barring an outsized crash, it’s perhaps unlikely that retail investors are going to fully abandon it in favor of buying up crusty old shares of Blockbuster stock. That said…

It’s cheaper to trade these meme stocks and easier for retail investors to get leverage via options. In short, for investors looking to have a good time or shoot the moon, meme stock are a more fun place to be than crypto is.

The main thing to consider is what happens if GameStop, for no reason at all, becomes a long-term store of value? When investors collectively begin placing blind trust in more financial assets for the long-haul, does that devalue blind trust itself and the mammoth entities that had more of a monopoly on it? Most investors aren’t expecting this to happen, but stocks like Tesla are beginning to live comfortably at ridiculous premiums that analysts can’t understand. Tesla and GameStop are very different beasts, but if anything I think institutions have a better grasp of GameStop’s rise.

The foil to all of this is whether this pandemonium births some regulatory backlash, a possibility which of course does not exist in quite the same way for cryptocurrencies from a central governance standpoint. TD Ameritrade and Schwab are already limiting trades of some of these meme stocks tday and I think there is certainly a universe in which the SEC aims to take a pot shot at this saga by means of promoting market sanity and I am much more confident that there’s a world where Reddit is pushed to at least temporarily ban r/WallStreetBets for some unclear reason.

A little less than two years ago, when the actor, producer, and investor Robert Downey Jr. unveiled his new, sustainability focused initiative called the FootPrint Coalition at Amazon’s re:MARS conference it was little more than a static website and a subscription prompt.

Jump cut to today, and the firm now has five portfolio companies, a non-profit initiative, and is launching a rolling venture fund, Footprint Coalition Ventures, at the World Economic Forum’s Digital Davos event.

With the new rolling fund, managed through AngelList, Downey Jr.’s initiative sits the intersection of two of the biggest ideas reshaping the world economy — the democratization of access to capital and investment vehicles and the $10 trillion opportunity to decarbonize global industry.

It’s another arrow in the quiver for an institution that aims to combine storytelling, investing, and non-profit commitments to combat the world’s climate crisis.

Rolling funds and the revolution in finance

There’s a revolution happening in finance right now, whether it’s the rise of the Redittors trying to avenge the malfeasance of short-sellers and big institutional investors that’s happening through investments in stocks like Blockbuster, Nokia, Gamestop and AMC, or the new crowdfunding sources and rolling funds that are allowing regular investors to finance early stage companies, things on Wall Street are definitely changing.

And while the public market gambles are undoubtably minting some new millionaires, opening up access to interesting startup investments is a thesis that’s a stark contrast to the cynicism of day-trading gambles.

Both could leave investors with less than zero in some cases, but with rolling funds or crowdfunding, there’s a real opportunity to build something rather than just sticking it to the man.

Unlike traditional venture funds, rolling funds raise new capital commitments on a quarterly basis and invest as they go, hence the “rolling”. Investors come on for a minimum one-year commitment, and invest at a quarterly cadence. In Downey Jr.’s fund that commitment amounts to $5,000 per quarter for up to 2,000 qualified investors (and a smaller number of accredited ones), according to a person with knowledge of the firm’s plans.

“The idea of opening [the fund] to real people, rather than the ivory tower of the institutional bigwigs… It’s a little bit more slamdance than Sundance [and] I kind of dig it,” said Downey Jr.

A guide to recognizing FootPrint Coalition Ventures

FootPrint Coalition Ventures will be split between early and late stage investment funds and will be looking to make six investments per year in early stage companies and four later stage deals.

Helping Downey Jr. manage the operations are investors like Jonathan Schulthof, who previously founded LOOM Media, which leverages smart urban infrastructure for advertising, founded Motivate International, which manages bike sharing services in cities across the U.S., and served as a managing partner for Global Technology Investments. Schulthof is joined by Steve Levin, who co-founded Team Downey, Downey Jr.’s media production company and Downey Ventures, which invests in media and technology companies. 

The firm already has four companies in its portfolio through investments it made using the founders’ own capital. And while those investments were all under $1 million, the firm expects that the size of its commitments will grow as it raises additional cash. Footprint Coalition has also maintained pro-rata investment rights so that it can increase the size of its stake in businesses over time. And the investments it made to date were sized in anticipation of potential for follow-ons at much higher valuations.

A venture fund inside of a coalition

The initiative that Downey Jr. hopes to build is more than just an investment arm. Both he and his co-founders see the investment side as a single piece of a broader platform that leverages the massive social following Downey Jr. has created and the storytelling skills he and his team have mastered through decades spent working in the movie business.

That broader team includes Rachel Kropa, the former head of the CAA Foundation, who will lead scientific and philanthropic efforts and serve as the fund’s Impact Advisor and liaison to the scientific and research communities, according to a statement.

Rachel Kropa, former head of the CAA Foundation who joined Footprint Coalition to lead scientific and philanthropic efforts last year, will serve as the fund’s Impact Advisor and liaison to the scientific and research communities.

“The idea that the content that we made can be related back to the individual is very powerful,” said Kropa. “This problem is so intractable and interconnected across the world. It does matter that the fish that you eat are made using a sustainable feed.”

Kropa is referring to a piece that the FootPrint Coalition put out around sustainable aquaculture tied to the group’s recent investment in Ÿnsect, a company that makes protein from crickets for use in animal feed and human food.

“Our content around Cellular Agriculture, exemplifies the type of content we can create in the course of taking a deep dive into a particular industry. Though we have not (yet) invested in the space, we do believe there are interesting stories to tell,” said one person who works with the company.

That media is additive to activate the group’s audience, and is not something that it charges for — or considers part of its investment valuation. “We’ve been creating edited video segments with Robert doing voice over and overlaying animation all of which we’ve been posting to social. We do this for free to the companies, and we don’t charge / strong-arm / cajole for warrants, advisor shares, or the like in return,” the person said.

Weird science and sustainability

While Ÿnsect is one example of a company that the FootPrint Coalition has backed that’s doing something which may be a little outside of the purview of most of Downey Jr.’s following, other businesses like the bamboo toilet paper company, Cloud Paper, and the new investment in the sustainability focused financial services company, Aspiration, have definite direct consumer ties.

That balance is something that Schulthof said the firm was looking for as it pursues not just environmental and sustainability returns, but, more concretely, profit.

“We look at things that are meaningful and impactful [and] I get to be purely capitalist. The question is this a good opportunity is something that has to do with its margins, its scale, its risk profile, the people involved and fundamentally what are the terms… do we think the company will deliver value to investors,” said Schulthof. “We’re looking for returns.”

The opportunity for returns is enormous. As the group noted, the ESG sector – funds that focus on the Environmental, Social and Governance issues – continues to grow rapidly Part of the broader stakeholder capitalism movement, impact investing funds have topped $250 billion, and sustainability assets have doubled in value over the past three years.

“We see two powerful trends working together to support the environment. First, engaging content and media distribution enable us to create a passionate community from Robert’s 100 million followers and to use that audience to access great investments. Second, a turnkey technology platform now enables us to manage a broad set of individual investors,” said Schulthof in a statement. “Venture funds traditionally have high minimums that exclude only the wealthiest individuals, or endowments and foundations. With much lower minimums and shorter investment periods, we can now offer access to these same companies to a much broader group. When these investors further ignite our passionate audience, we hope to set a positive feedback loop in motion with environmental technologies as the ultimate beneficiary.”

Spin, the micromobility startup acquired by Ford, has developed a new scooter with partners Segway-Ninebot and software startup Tortoise that aims to solve the sidewalk clutter problem for good.

The Spin S-200 scooter not only has three wheels — a design change that helps it stand out in a crowded pool of two-wheelers — it’s also equipped with repositioning software that allows remote operators thousands of miles away to move vehicles off the sidewalk and into a proper parking spot. A fleet of about 300 Spin S-200 scooters will be tested in Boise, Idaho this spring. But the goal is much grander. Spin ultimately wants to roll out remotely operated scooters to cities in North America and Europe in 2021.

These scooters, which operate on the so-called Spin Valet platform, are equipped with front and rear-facing cameras. When combined with Tortoise’s software, the scooters can be controlled remotely.

The remote operations team will initially use the repositioning software to move the scooters if they’re blocking a sidewalk, crosswalk or handicapped space. Eventually, users will be able to hail a scooter, which will travel up to several blocks to their location, according to Tortoise co-founder and president Dmitry Shevelenko. 

“We’re focused on making Boise wildly successful and I think if that happens, then the numbers kind of take care of themselves,” Shevelenko said in a recent interview. “If this Spin scooter gets even 25% more rentals per day than their standard fleet, they’re going to shift their fleet as quickly as possible.”

If that happens, the only real hurdle is getting the scooters manufactured. Shevelenko said a manufacturing bottleneck is unlikely because Segway-Ninebot has the tooling in place to make this a mass-produced product. “They have a lot of conviction around it,” he added in reference to Segway.

Image Credits: Spin

“There has been a lot of fanfare around the potential of remote-controlled e-scooters, but this partnership marks a turning point in tangible operational plans to bring them to city streets,” Spin’s chief business officer Ben Bear said in a statement. “In addition to providing reliability to consumers and more order to city streets, this could significantly improve unit economics, reducing carbon emissions and the operational work required to maintain and reposition fleets.”

Shevelenko said as important as the reposition is, the design of the actual scooter deserves attention as well. The S-200 is equipped with three independent braking systems — a regenerative rear brake, front and rear drum brakes — and turn signals located on handlebars and near the rear wheel.

“I think in some ways the three-wheeled scooter is as big of a deal,” Shevelenko said. “It’s necessary because it solves the balancing issue without a kickstand, but it’s also appealing to riders who aren’t dudes in their 20s. It’s higher up, you feel sturdier and it’s really hard to tip over and fall. And so, in terms of making sure people in their 40s and 50s and 60s feel comfortable getting on, I think this going to be very disruptive.”

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.

Dear Sophie:

I just got my U.S. citizenship! My husband and I want to bring my mom and her husband to the U.S. to help us take care of our preschooler and toddler.

My biological dad passed away several years ago when I was an adult and my mom has since remarried. Can they get green cards?

— Appreciative in Aptos

Dear Appreciative:

Congrats on becoming a citizen! That is a long road, and you did it. :) For all those out there awaiting citizenship, good news: It’s a priority for the Biden administration to speed up processing times. Other good news — the Muslim Ban is cancelled! And USCIS is going to make things a lot better for Dreamers seeking DACA.

We can definitely figure out a plan to support your mom and stepdad to get green cards in the U.S. As your mom married your stepdad after you turned 18, you can’t sponsor him directly. You need to sponsor your mom for a green card first, and then she can sponsor him as her husband. My law partner, Anita Koumriqian, who is an expert in family-based immigration, and I discussed getting green cards for parents and siblings in a recent podcast. Check it out for more details. To set clear expectations, this is a multistep process that will probably take a few years. So you may want to consider hiring a nanny if you need childcare sooner than that! ;)

Alternatively, to speed things up for your stepdad, if he has a daughter, son or sibling who is a U.S. citizen, any of them can sponsor him for a green card. If your mom ends up sponsoring him once she’s a permanent resident, that’s quicker than a U.S. citizen sibling sponsoring a brother, for example, but generally is not as quick as a U.S. citizen child sponsoring a parent.

Since your mom is abroad, she won’t be able to come to the U.S. until the U.S. embassy or consulate in her home country reopens and resumes processing routine visa and green card applications. However, U.S. Citizenship and Immigration Services (USCIS) is currently open.

Image Credits: Sophie Alcorn (opens in a new window)(opens in a new window)

It’s possible to get started sponsoring your mom for a green card now, and you can work with an attorney to streamline the process. You need to be at least 21 years of age and be a U.S. citizen. As her sponsor, you will also need to accept legal responsibility for financially supporting her.

You will need to initially submit to USCIS documents such as your birth certificate and proof of U.S. citizenship, and make sure that all foreign language documents have certified English translations. Currently, the USCIS California Service Center is taking about seven months to process green card applications for parents.

At TC Sessions: Justice on March 3, we’re going to dive head-first into data discrimination, algorithmic bias and how to ensure a more just future, as technology companies rely more on automated processes to make decisions.

Algorithms are sets of rules that computers follow in order to solve problems and make decisions about a particular course of action. But there is an inherent problem with algorithms that begins at the most base level and persists throughout its adaption: human bias that is baked into these machine-based decision-makers.

Algorithms driven by bad data are what leads to biased arrests and imprisonment of Black people. They’re also the same kind of algorithms that Google used to label photos of Black people as gorillas and that Microsoft’s Tay bot used to become a white supremacist.

At TC Sessions: Justice, we’ll hear from three experts in this field. Let’s meet them.

Dr. Safiya Umoja Noble

Image Credits: Stella Kallnina (opens in a new window)

Associate Professor at University of California Los Angeles a professor at the University of Southern California and author of “Algorithms of Oppression: How Search Engines Reinforce Racism,” Noble has become known for her analyses around the intersection of race and technology.

In her aforementioned book, Noble discusses the ways in which algorithms are biased and perpetuate racism. She calls this data discrimination.

“I think that the ways in which people get coded or encoded particularly in search engines can have an incredible amount of harm,” Noble told me back in 2018 on an episode of TC Mixtape, formerly known as CTRL+T. “And this is part of what I mean when I say data discrimination.”

Mutale Nkonde

Image Credits: Via Mutale Nkonde

It’s important to explicitly call out race in order to create just technological futures, according to Nkonde. In her research paper, “Automated Anti-Blackness: Facial Recognition in Brooklyn, New York,” Nkonde examines the use of facial recognition, the history of the surveillance of Black people in New York and presents potential ways to regulate facial recognition in the future.

Nkonde is also a United Nations adviser on race and artificial intelligence and is currently working with Amnesty International to advance a global ban on facial recognition technology.

Haben Girma

Image Credits: Courtesy of Haben Girma

Author of memoir “Haben: The Deafblind Woman Who Conquered Harvard Law,” and human rights lawyer, Girma focuses on advancing disability justice.

At Sight Tech Global last month, Girma spoke about how discussions around algorithmic bias as it pertains to race have become somewhat normalized, but too often do those conversations exclude the effects of algorithms on disabled people. Girma told me at that when it comes to robots, for example, the topic of algorithmic bias is lacking among developers and designers.

“Don’t blame the robots,” she said. “It’s the people who build the robots who are inserting their biases that are causing ableism and racism to continue in our society. If designers built robots in collaboration with disabled people who use our sidewalks and blind people who would Use these delivery apps, then the robots and the delivery apps would be fully accessible. So we need the people designing the services to have these conversations and work with us.”

If you’ve made it this far in the post, you’re probably wondering how to attend. Well, you can snag your ticket right here for just $5.

Stilt founders Priyank Singh and Rohit Mittal

Stilt, a provider of financial services for immigrants in the United States, announced today it has raised a $100 million warehouse facility from Silicon Valley Bank for lending to its customers. This brings Stilt’s total debt facilities so far to $225 million, and will enable it to reach more than $350 million in annualized loan volume. The company also announced the public launch of its no-fee checking accounts, which have been in private beta since September.

A Y Combinator alum, Stilt was founded five years ago by Rohit Mittal and Priyank Singh. Both dealt with the challenges of accessing financial services as immigrants and wanted to created a company to serve other people without Social Security numbers or credit histories.

For applicants without traditional credit reports, Stilt’s loan application process considers their personal information, including bank transactions, education, employment and visa status, and also uses proprietary machine-learning algorithms that draws on demographic data from a wide range of financial and non-financial sources.

TechCrunch last covered Stilt when it announced a $7.5 million seed round in May 2020.  During the pandemic, demand for loans increased for a wide range of reasons. Some customers sought new loans because their working hours got cut. Other borrowers’ own jobs weren’t impacted, but they needed to transfer money to family members in other countries who had lost income. Several used loans to pay for additional visa processing and many customers turned to Stilt because other financial providers shut down or reduced their loan programs over concerns about repayment.

Despite the economic challenges caused by the COVID-19 pandemic, Stilt’s loan performance has remained steady. Many of Stilt’s customers are using their loans to build a credit history in the United States and even borrowers who lost income because of the pandemic continued making payments on time (Stilt also created temporary programs, including waiving interest for a few months, to help those who were struggling financially).

Mittal said immigrants are also in general more creditworthy, because many moved to the United States to pursue educational or career opportunities. The difficulty of securing visas means “all immigrants move to the U.S. after jumping through a lot of hoops,” said Mittal. He added that “it isn’t just people coming from other countries. We also see it in DACA applicants. They tend to be the best risk-adjusted return customers. These are people who are going to school, they are working, they have seen their families work, they are helping their parents, they are doing all these things, and they understand the value of money, so they end up being a lot more financially responsible.”

Stilt’s money transfer feature

Stilt’s new checking accounts, powered by Evolve Bank and Trust, are also designed for immigrants, with features like spot-rate remittance to about 50 countries. Users can also apply for credit lines and pre-approved loans through their accounts. Since opening to existing customers in September, the number of active checking accounts is growing 50% month over month, with many using it for direct deposits of their salaries.

The new debt facility from Silicon Valley Bank means Stilt will be able to provide larger loan volumes and better interest rates, said Mittal. Stilt’s average interest rate is about 12% to 14%, compared to the 30% to 100% charged by other programs, like payday loans, that people without Social Security numbers or credit reports often use.

Last year, we hit you with 44(!) episodes of Extra Crunch Live, a series that gives startups and founders direct insights from the experts who know best. We’re making Extra Crunch Live even better in 2021: we’ll take a look at funding deals through the eyes of the founders and investors who made them happen, and those same tech leaders will go through your pitch decks and give feedback and advice. Every single Wednesday at 12pm PT/3pm ET!

Today, I’m thrilled to announce the February slate for Extra Crunch Live.

Gaurav Gupta (Lightspeed Venture Partners) + Raj Dutt (Grafana Labs)

February 3, 12pm PT/3pm ET

Grafana Labs, the open-source platform for monitoring, visualization and metric analytics, has raised more than $75 million since its 2014 inception. Lightspeed’s Raj Dutt has partnered with the company throughout its journey, leading Grafana’s Series A and B. Hear from Gupta and Grafana cofounder Raj Dutt about how that Series A deal came together, and take a look at the startup’s original Series A pitch deck on the next episode of Extra Crunch Live. And don’t forget! Gupta and Dutt will be giving live feedback to Extra Crunch members who have submitted their own pitch decks.

Aydin Senkut (Felicis Ventures) + Kevin Busque (Guideline)

February 10, 12pm PT/3pm ET

In 2014, Guideline stepped into the ring with giants, launching an all-inclusive 401k platform for fast-growing businesses. Since, it’s raised nearly $140 million in funding, including a $15 million Series B round led by Felicis Ventures. Hear the behind-the-scenes story of how Guideline CEO Kevin Busque and Felicis partner Aydin Senkut came together for that deal, with a walk through the pitch deck that started it all, and get the founder/investor duo’s live feedback on your own pitch deck.

Steve Loughlin (Accel) + Jason Boehmig (Ironclad)

February 17, 12pm PT/3pm ET

Steve Loughlin views the techworld through a prismatic lens. He’s been a founder, he’s been through an acquisition, and now he invests as a partner at Accel. One such investment includes Ironclad, a contract management platform that recently raised a $100 million Series D and is valued at nearly $1 billion. Hear CEO Jason Boehmig and Loughlin talk through their original Series A deal and get live feedback on your own pitch deck from the founder/investor duo.

Matt Harris (Bain Capital) + Isaac Oats (Justworks)

February 24, 12pm PT/3pm ET

Justworks’ back-office software has garnered the attention of many investors. The company has raised $143 million from firms including FirstMark Capital, Union Square Ventures, Thrive, Redpoint, and Bain Capital. Hear from Justworks founder and CEO Isaac Oats and Bain Capital Partner Matt Harris as they describe how their partnership began and get their live feedback on your own pitch deck.

Extra Crunch Live is for EC members only. If you’re not already signed up, get on it right here. Registration info for each of these episodes is below. See you soon!

The current list of venture-backed private companies we expect to go public — and the number of companies that might say yes to a SPAC-led debut — underscore just how many large startups there are in the market.

After years of rising venture capital investment and a wave of huge rounds, many startups and unicorns could leave the private markets this year or the next.

Last year, The Exchange wrote about former startups that had scaled to around the $100 million annual recurring revenue (ARR) mark, or had revenues that were roughly equivalent if they didn’t sell software. But that wound up being a bit less interesting than we’d hoped, as companies that have reached that scale tend to be fully baked by the time we got them on the phone.

So, we’re shooting for the $50 million ARR range this year. Our goal is to see what we can ferret out from companies that are moving from the middle-late startup years and into the unicorn realm.

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

What broke during the last year? Which teams have they doubled down on? How has hiring gone? We have questions. And, happily, companies have raised their hand. Today, we’re talking about OwnBackup and Assembly. Next week, it’s SimpleNexus and Kaseya. And we have Picsart on deck as a company somewhat in between our two target revenue bands.

But before we start, a final note. The following bits of journalism are more exploratory than hard-hitting. But as private companies tend to share nothing other than the occasional press release strained of personality and flavor, I’m working to bring more raw data points and observations to you even if they do not constitute the grittiest reporting you’ve ever read.

Let’s get into our first two $50 million (or around there) ARR companies.

OwnBackup

OwnBackup is a company you might have heard of as it raised a $50 million round last July, an event TechCrunch covered. The company reached out regarding our $50 million ARR series by noting that its growth had accelerated since that round, so we decided to find out more.

The Exchange spoke with CEO Sam Gutman and CMO Jamie Grenney about OwnBackup’s recent growth.

According to the execs, OwnBackup is around $50 million ARR today. The company, as its name hints, provides cloud backup services to other companies. And it’s built atop the Salesforce platform, a service had a good 2020 when nCino, another company that leverages the service, went public to great effect. (That debut led to TechCrunch reporting on the trend of building atop someone else’s software to IPO scale.)

And OwnBackup has lots of room to grow inside of its current platform home. It thinks it has around 2% penetration of the Salesforce ecosystem, meaning that its current 100% yearly growth pace can continue for quite some time without a material change in strategy.

Asked if OwnBackup was worried about platform risk, Gutman and Grenney said they weren’t. Not only is Salesforce Ventures an investor, the execs noted, but the Salesforce platform is a huge SaaS ecosystem; it’s not something that could be switched off like a Google web product and consigned to the ash heap of the Internet.

Charlie, a personal finance app that began as a chatbot, is relaunching today with a revamped experience focused on the larger goal of helping everyday Americans get out of debt. To do so, Charlie presents users with a full picture of their current debt and how long it will take them to pay it off. Users then connect their bank account to Charlie for personalized assistance in reducing their bills. It also “gamifies” saving money to make the process of setting money aside for paying down debt more fun.

According to Charlie CEO Ilian Georgiev, the idea to turn saving into more of game arose from his prior experience in the mobile gaming industry. At a company called Pocket Gems, he helped scale apps that generated millions of dollars in revenue growth from across millions of users.

Image Credits: Charlie; CEO and co-founder Ilian Georgiev

“A really well-designed mobile game gets people to obsessively manage a virtual economy,” he explains. “And what I was curious about was how do we get people to do better in the real-world economy by using the same kind of tools?”

To help on that front, Charlie’s team includes people with backgrounds in not only computer science and engineering, but also in psychology. Using similar psychological tricks as found in gaming — rules, progress bars and reward mechanisms — the app helps nudge its users towards saving.

The original version of the Charlie app, launched in 2016, worked a little differently, however. It would analyze transaction data to look for areas where the user could improve their finances. It also worked over texting and through Facebook Messenger — platforms Charlie adopted with the idea that users needed a simpler way to connect with their finances.

“But the thing that we kept hearing over and over again, both qualitatively and quantitatively, is that the biggest concern that our users had is ‘how do I get out of debt? So then we said, instead of casting this really wide net…let’s laser focus on this one particular problem,” says Georgiev.

Today, the chatbot still lives on as a feature inside the new Charlie app, but it’s not the core experience.

Image Credits: Charlie

Instead, users begin by providing the app with information about their debt. Georgiev stresses that many Americans often know their debt down to the penny — whether that’s how much they have left on student loans, how much left on their car, how much credit card debt they have, and so on.

The app then calculates how long it would take to pay off this debt if you only made minimum payments. This number helps shock people into action, as they’ll often discover they’re going to be in debt for another 40 or 50 years.

“For most users, that’s an epiphany because they’ve never seen these numbers before, and the math required — even if you do it in Excel — the math required to figure that out is beyond most people,” Georgiev says.

The app then encourages users to learn how they can reduce the time it would take them to get out of debt by paying more than the minimums. By clicking a button, they can visualize the what happens if you pay, for example, $20 or $50 more per month.

The final step is to help users find that extra cash. In part, this may come from savings the app locates on users’ behalf. But it also comes from the money-saving “game.”

Charlie helps users create autosave rules which, when applied, auto-transfer money from the user’s connected bank account to Charlie’s digital wallet (an account held at partner bank, Evolve). These can be fun rules or even sort of ridiculous ones. For example, you could create “Guilty Pleasures” rules where Charlie will put away 10% every time you eat McDonalds, or it could save $1 for you every time a contestant on “The Bachelor” says they’re “here for the right reasons.”

Image Credits: Charlie

As those rules apply, money is saved and a little progress bar fills. The app rewards you with rainbow confetti as you achieve, also similar to some mobile gaming experiences.

At the end of the month, the user can take that saved money to make a larger payment towards their debt. Currently, Charlie doesn’t manage the bill pay aspects itself — which is a limitation. You have to transfer the funds back to your bank. But a bill pay feature is due to arrive in a couple’ months time, we’re told.

Later this year, Charlie plans to offer debt refinancing services to users. In this case, the team believes they can give the users lower interest rates because Charlie users will have proven, through their use of the app, that they’re lower risk.

Further down the road, Charlie aims to move more into neobank territory by issuing a debit card to users that works with users’ Charlie account. To differentiate from the growing number of neobanks, Charlie will continue to focus on paying down debt and savings.

Georgiev notes that the app’s business model is not built around user data collection, however. Data that’s ingested is sanitized and encrypted, and the app has a strict privacy policy. Plus, Charlie mainly helps people save money, but those funds are actually stored with a partner bank, not in Charlie itself. And because it’s involved in the act of moving money, it has to adhere to regulations around security and fraud prevention.

Today, Charlie charges a $4.99 per month subscription, which the company aims to make up for by helping people reduce their larger debt loads more quickly. However, even that small amount could give money-sensitive users pause, despite Charlie’s perks and successes.

To date, Charlie has registered a half million users for its older chatbot experience. It hopes to now grow that figure with its new tools.

The app is available on iOS and Android.