Category: UNCATEGORIZED

F5, the applications networking company announced today that it is acquiring Volterra, a multi-cloud management startup for $500 million. That breaks down to $440 million in cash and $60 million in deferred and unvested incentive compensation.

Volterra emerged in 2019 with a $50 million investment from multiple sources including Khosla Ventures and Mayfield along with strategic investors like M12 (Microsoft’s venture arm) and Samsung Ventures. As the company described it to me at the time of the funding:

Volterra has innovated a consistent, cloud-native environment that can be deployed across multiple public clouds and edge sites — a distributed cloud platform. Within this SaaS-based offering, Volterra integrates a broad range of services that have normally been siloed across many point products and network or cloud providers.

The solution is designed to provide a single way to view security, operations and management components.

F5 president and CEO François Locoh-Donou sees Volterra’s edge solution integrating across its product line. “With Volterra, we advance our Adaptive Applications vision with an Edge 2.0 platform that solves the complex multi-cloud reality enterprise customers confront. Our platform will create a SaaS solution that solves our customers’ biggest pain points,” he said in a statement.

Volterra founder and CEO Ankur Singla, writing in a company blog post announcing the deal, says the need for this solution only accelerated during 2020 when companies were shifting rapidly to the cloud due to the pandemic. “When we started Volterra, multi-cloud and edge were still buzzwords and venture funding was still searching for tangible use cases. Fast forward three years and COVID-19 has dramatically changed the landscape — it has accelerated digitization of physical experiences and moved more of our day-to-day activities online. This is causing massive spikes in global Internet traffic while creating new attack vectors that impact the security and availability of our increasing set of daily apps,” he wrote.

He sees Volterra’s capabilities fitting in well with the F5 family of products to help solve these issues. While F5 had a quiet 2020 on the M&A front, today’s purchase comes on top of a couple of major acquisitions in 2019 including Shape Security for $1 billion and NGINX for $670 million.

The deal has been approved by both companies boards, and is expected to close before the end of March subject to regulatory approvals.

Online platforms take action against President Trump, Lenovo tries out a swiveling screen and Roblox raises $250 million. This is your Daily Crunch for January 7, 2021.

The big story: Facebook bans Trump for two weeks

After a pro-Trump mob stormed the U.S. Capitol yesterday, a number of online platforms moved to suspend accounts connected to the outgoing president.

For example, Twitter locked Trump’s account for 12 hours after he posted several (subsequently deleted) tweets repeating his unsubstantiated claims of election fraud and expressing support for the rioters (while also calling for an end to violence). Twitch also disabled his channel until the end of his term and Shopify pulled down stores tied to the president and his campaign.

But the most notable move came from Facebook, which banned Trump from both Facebook and Instagram for “at least the next two weeks,” until the end of his term. Mark Zuckerberg wrote that this was necessary due to the “use of our platform to incite violent insurrection against a democratically elected government.”

The tech giants

Waymo is dropping the term ‘self-driving,’ but not everyone in the industry is on board — Alphabet-owned Waymo will no longer use the term “self-driving” to describe its technology.

Lenovo’s new all-in-one has a swiveling screen, because sure, why not? — When it comes to staid product categories, why not try something weird?

Samsung simplifies with a lower-priced premium Chromebook — Samsung just dropped what’s almost certainly one of its biggest pieces of news for CES, with the arrival of the Galaxy Chromebook 2.

Startups, funding and venture capital

SoFi to go public in merger with Chamath Palihapitiya’s newest SPAC — The deal, confirmed by SoFi, would value the fintech company at $8.65 billion.

Roblox raises at $29.5B valuation, readies for direct listing — Roblox is now one of the world’s most valuable private companies in the world.

Local news app News Break raises $115M — CEO Jeff Zheng said there’s “strong user demand” for local news but “weak supply.”

Advice and analysis from Extra Crunch

Decrypted: How bad was the US Capitol breach for cybersecurity? — The breach will likely present a major task for Congress’ IT departments.

The tech-powered wave of smart, not slow, tutoring sessions — While starting a tutoring marketplace is easy, scaling is often where the troubles begin.

With 5 new unicorns in first week of 2021, are we in for a stampede this year? — The pace at which new unicorns are being announced feels incredibly rapid.

(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

Hopin might be the fastest growth story of this era — The Equity team discusses Hopin’s acquisition of livestreaming company StreamYard.

Elon Musk has a new title: world’s richest person — He reached the pinnacle Thursday thanks to Tesla’s skyrocketing share price, along with a substantial pay package.

Remembering TechCrunch Japan’s Hirohide Yoshida (1971-2020) — On New Year’s Eve, TechCrunch Japan’s Editor-in-Chief Hirohide Yoshida passed away at age 49.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Epic today announced the acquisition of Rad Game Tools, maker of game development tools for many years. They’ve stayed largely behind the scenes, but many gamers will recognize the colorful Bink Video logo, which has appeared in the openings of many a title over the years.

“Our work with Epic goes back decades, and joining forces is a natural next step given our alignment on products, mission, and culture,” said Rad Game Tools founder and CEO Jeff Roberts said in the announcement. And it has seemingly only intensified recently.

Close integration with engines and platforms makes for good standards, and good standards get embraced by developers. That’s why Epic has been cozying up to Sony as well as snapping up components to fit into its Unreal engine, positioning it as an all-encompassing development platform for next-generation games.

Rad (styled RAD) has been in games for a long time, as its decidedly old-school website attests. Bink is a video codec for games that focuses on high compression and speedy rendering, both important in the gaming world. Oodle, Telemetry, Granny 3D, and Miles Sound System are all development tools beyond what the lay person would understand, but no doubt have many fans.

Epic may be known now as the creator of money printing machine Fortnite, but the company has been around for decades and probably knows the Rad team well. That may help explain the friendly terms under which the acquisition will take place.

“RAD will continue supporting their game industry, film, and television partners, with their sales and business development team maintaining and selling licenses for their products to companies across industries – including those that do not utilize Unreal Engine,” Epic said in its announcement.

So while Bink and the rest will continue to be available for anyone to use outside Epic’s domain, they will almost certainly be better integrated with the Unreal ecosystem. As game development cost and complexity rises, means of simplification are often taken advantage of. Epic is working hard to make Unreal not just the most graphically powerful engine for development, but also the most unified.

A request for comment and further details on the deal sent to Rad Game Tools was intercepted by Epic and declined.

Like many startups, Atlanta-based Voxie was created to solve a problem that founder and CEO Bogdan Constantin faced himself.

In Constantin’s case, this was at his previous tuxedo rental startup Menguin (ultimately acquired by Generation Tux), where he said he had to market a product with a six-to-nine month sales cycle, as customers were usually weighing different options for their weddings.

Email marketing, Constantin said, would result “worse and worse” open rates over time. So one day, he decided to just try texting everyone who signed up, introducing himself as “your personal stylist here at Menguin.” Not surprisingly, he got a lot more responses.

The challenge, of course, is having those kinds of text conversations across a large customer base. And that’s why Voxie — which is announcing that it has raised $6.7 million in Series A funding — offers tools to help businesses automate and manage that process.

Constantin claimed that compared to other text marketing tools, messages sent via Voxie feel like a real, personalized conversation — even though 80% to 90% are actually automated, with the rest of the messages written by people. Plus, Voxie will allow businesses to send their messages from a normal 10-digit phone number (rather than the more common five-digit numbers used for marketing).

Voxie was initially built for large enterprise customers, but Constantin said that during the pandemic, the company built a lower-cost version that is now being used by “a lot of retail, restaurant franchise brands, main street brands that are struggling right now.”

He added, “We’re working with brands that have hundreds of locations all over the country that needed a better way to engage their customers — to ask their names, ask how many kids they have and store that information at the individual profile level.”

Current Voxie customers include LG, Danone, Massage Heights and Buff City Soap.

The funding, meanwhile, was led by Noro-Moseley Partners with participation from Circadian Ventures and Engage Ventures, as well as Atlanta entrepreneurs Wain Kellum, Andy Powell, David Cummings and Fred Castellucci.

“Voxie leads the market as the only platform that allows brands to have personalized conversations with customers at scale, which we believe will be key for its target customers to succeed in a post-COVID world,” said Noro Moseley’s John Ale in a statement. “Businesses love Voxie as they see meaningful revenue uplift quickly and the personalization of the content means customers find the messages useful and highly relevant to their needs.”

Next, Constantin said the company will launch “reply to buy” functionality, allowing customers to place orders directly from their text conversations. And while Voxie is currently focused on SMS messaging, he claimed its vision is broader: “We want to deliver the right message at the right time via the right medium.”

MadeiraMadeira, the Brazilian answer to Wayfair or Ikea, is now worth $1 billion after raising $190 million in late stage financing from investors led by SoftBank’s Latin American investment fund and the Brazilian public and private investment firm, Dynamo.

An online marketplace specializing in home products, MadeiraMadeira offers roughly 300,000 products so customers can build furnish, renovate and decorate their homes.

Founded in 2009 by Daniel Scandian, Marcelo Scandian and Robson Privado, the company has seen huge tailwinds come from the shift to online shopping in Brazil as a result of the global COVID-19 pandemic.

With stores closed, online shopping in Brazil surged. As Daniel Scandian noted, before the pandemic ecommerce penetration in Brazil was at roughly 7%, that number ballooned to 17% at the height of the pandemic in Brazil and has now stabilized at around 10%.

Combining third party sales with private labeled goods and its own shipping and logistics facilities has meant that MadeiraMadeira can take the best practices from several online retailers and home furnishing stores, Scandian said.

There are more than 10,000 sellers on the MadeiraMadeira platform and roughly 2.5 million stock keeping units. In recent years the company has added showrooms to its mix of retail facilities, where customers can check out merchandise, but complete their orders online.

“That’s the way we can tackle the offline market with a digital mindset,” Scandian said. 

Money from the most recent financing will be used to invest in expanding its logistics capabilities with the addition of new warehouse facilities to expand on its existing ten locations. The company also intends to add same day delivery and the expansion of its private label services.

The new capital, likely the last round before a potential public offering, included previous investors like Flybridge and Monashees along with public-focused investment firms Velt, Brasil Capital and Lakewood.

Early investors like Monashees, Kaszek, Fundo Avila, Endeavour Catalyst and angel backers like Niraj Shah, the founder of Wayfair, and Build.com founder Christian Friedland were instrumental to MadeiraMadeira’s early success, Scandian said.

Based in Curitiba, MadeiraMadeira has over 1300 employees, with the majority of them focused on technology, logistics and product development.

“With this new investment, we are raising our commitment to MadeiraMadeira’s long-term value creation vision as the company consolidates its position as the leader in Latin America’s home goods market. Since our initial investment, MadeiraMadeira’s management team has delivered everything they’ve promised, and our faith in them continues to grow,” said Paulo Passoni, Managing Investment Partner to SoftBank Latin America fund.

RedHat today announced that it’s acquiring container security startup StackRox . The companies did not share the purchase price.

RedHat, which is perhaps best known for its enterprise Linux products has been making the shift to the cloud in recent years. IBM purchased the company in 2018 for a hefty $34 billion and has been leveraging that acquisition as part of a shift to a hybrid cloud strategy under CEO Arvind Krishna.

The acquisition fits nicely with RedHat OpenShift, its container platform, but the company says it will continue to support StackRox usage on other platforms including AWS, Azure and Google Cloud Platform. This approach is consistent with IBM’s strategy of supporting multi-cloud, hybrid environments.

In fact, Red Hat president and CEO Paul Cormier sees the two companies working together well. “Red Hat adds StackRox’s Kubernetes-native capabilities to OpenShift’s layered security approach, furthering our mission to bring product-ready open innovation to every organization across the open hybrid cloud across IT footprints,” he said in a statement.

CEO Kamal Shah, writing in a company blog post announcing the acquisition, explained that the company made a bet a couple of years ago on Kubernetes and it has paid off. “Over two and half years ago, we made a strategic decision to focus exclusively on Kubernetes and pivoted our entire product to be Kubernetes-native. While this seems obvious today; it wasn’t so then. Fast forward to 2020 and Kubernetes has emerged as the de facto operating system for cloud-native applications and hybrid cloud environments,” Shah wrote.

Shah sees the purchase as a way to expand the company and the road map more quickly using the resources of Red Hat (and IBM), a typical argument from CEOs of smaller acquired companies. But the trick is always finding a way to stay relevant inside such a large organization.

StackRox’s acquisition is part of some consolidation we have been seeing in the Kubernetes space in general and the security space more specifically. That includes Palo Alto Networks acquiring competitor TwistLock for $410 million in 2019. Another competitor, Aqua Security, which has raised $130 million, remains independent.

StackRox was founded in 2014 and raised over $65 million, according to Crunchbase data. Investors included Menlo Ventures, Redpoint and Sequoia Capital. The deal is expected to close this quarter subject to normal regulatory scrutiny.

In a new statement issued by former First Lady Michelle Obama, she calls on Silicon Valley specifically to address its role in the violent insurrection attempt by pro-Trump rioters at the U.S. Capitol building on Wednesday. Obama’s statement also calls out the obviously biased treatment that the primarily white pro-Trump fanatics faced by law enforcement relative to that received by mostly peaceful BLM supporters during their lawful demonstrations (as opposed to Wednesday’s criminal activity), but it includes a specific redress for the tech industry’s leaders and platform operators.

“Now is the time for companies to stop enabling this monstrous behavior – and go even further than they have already by permanently banning this man from their platforms and putting in place policies to prevent their technology from being used by the nation’s leaders to fuel insurrection,” Obama wrote in her statement, which she shared on Twitter and on Facebook.

The call for action goes beyond what most social platforms have done already: Facebook has banned Trump, but though it describes the term of the suspension as “indefinite,” it left open the possibility for a restoration of his accounts in as little as two weeks’ time once Joe Biden has officially assumed the presidency. Twitter, meanwhile, initially removed three tweets it found offended its rules by inciting violence, and then locked Trump’s account pending his deletion of the same. Earlier on Thursday, Twitter confirmed that Trump had removed these, and that his account would subsequently be restored twelve hours after their deletion. Twitch has also disabled Trump’s channel at least until the end of his term, while Shopify has removed Trump’s official merchandise stores from its platform.

No social platform thus far has permanently banned Trump, so far as TechCrunch is aware, which is what Obama is calling for in her statement. And while both Twitter and Facebook have discussed how Trump’s recent behavior have violated their policies regarding use of their platform, neither have yet provided any detailed information regarding how they’ll address any potential similar behavior from other world leaders going forward. In other words, we don’t yet know what would be different (if anything) should another Trump-styled megalomaniac take office and use available social channels in a similar manner.

Obama is hardly the only political figure to call for action from social media platforms around “sustained misuse of their platforms to sow discord and violence,” as Senator Mark Warner put it in a statement on Wednesday. Likely once the dust clears from this week’s events, Facebook, Twitter, YouTube, et al. will face renewed scrutiny from lawmakers and public interest groups around any corrective action they’re taking.

In a new statement issued by former First Lady Michelle Obama, she calls on Silicon Valley specifically to address its role in the violent insurrection attempt by pro-Trump rioters at the U.S. Capitol building on Wednesday. Obama’s statement also calls out the obviously biased treatment that the primarily white pro-Trump fanatics faced by law enforcement relative to that received by mostly peaceful BLM supporters during their lawful demonstrations (as opposed to Wednesday’s criminal activity), but it includes a specific redress for the tech industry’s leaders and platform operators.

“Now is the time for companies to stop enabling this monstrous behavior – and go even further than they have already by permanently banning this man from their platforms and putting in place policies to prevent their technology from being used by the nation’s leaders to fuel insurrection,” Obama wrote in her statement, which she shared on Twitter and on Facebook.

The call for action goes beyond what most social platforms have done already: Facebook has banned Trump, but though it describes the term of the suspension as “indefinite,” it left open the possibility for a restoration of his accounts in as little as two weeks’ time once Joe Biden has officially assumed the presidency. Twitter, meanwhile, initially removed three tweets it found offended its rules by inciting violence, and then locked Trump’s account pending his deletion of the same. Earlier on Thursday, Twitter confirmed that Trump had removed these, and that his account would subsequently be restored twelve hours after their deletion. Twitch has also disabled Trump’s channel at least until the end of his term, while Shopify has removed Trump’s official merchandise stores from its platform.

No social platform thus far has permanently banned Trump, so far as TechCrunch is aware, which is what Obama is calling for in her statement. And while both Twitter and Facebook have discussed how Trump’s recent behavior have violated their policies regarding use of their platform, neither have yet provided any detailed information regarding how they’ll address any potential similar behavior from other world leaders going forward. In other words, we don’t yet know what would be different (if anything) should another Trump-styled megalomaniac take office and use available social channels in a similar manner.

Obama is hardly the only political figure to call for action from social media platforms around “sustained misuse of their platforms to sow discord and violence,” as Senator Mark Warner put it in a statement on Wednesday. Likely once the dust clears from this week’s events, Facebook, Twitter, YouTube, et al. will face renewed scrutiny from lawmakers and public interest groups around any corrective action they’re taking.

Six years after launching its service linking employer-sponsored insurance plans with surgical centers of excellence, the Carrum Health has raised $40 million in a new round of financing to capitalize on tailwinds propelling its business forward. 

As the COVID-19 pandemic exposes cracks in the U.S. healthcare system, one of the ways that employers have tried to manage the significant costs of insuring employees is by taking on the management of care themselves.

As they shoulder more of the burden, companies like Carrum, which offer servies that manage some of the necessary points of care for businesses, at lower costs, are becoming increasingly attractive targets for investors.

That’s why Carrum was able to attract investors led by Tiger Global Management, GreatPoint Ventures, and Cross Creek, all firms that joined returning investors Wildcat Venture Partners and SpringRock Ventures in backing the company’s Series A round.

Carrum said the money will go towards sales and marketing to more customers, adding more services and improving its existing technology stack.

Carrum uses machine learning to collect and analyze data on surgical outcomes and care to identify what it considers to be surgical centers of excellence across the U.S.

The company offers self-insured employers the opportunity to buy services directly from surgical centers for a bundled price. That can mean savings of up to 50% on surgical expenses.

Using Carrum, there are no co-pays, deductibles, and co-insurance. Instead, Carrum Health’s customers pay a fee and in return receive a 30-day warranty on procedures, meaning that the healthcare provider will cover any costs associated with care from botched operations or complications.

Employees have access to a mobile applications that gives them access to virtual care before, during, and after surgeries.

“For years, the industry has talked about redesigning healthcare to benefit patients, but the only way to really do that is to tackle the underlying economics of care, a truly difficult task,” said Sach Jain, CEO and founder of Carrum Health, in a statement. “Employers now have a modern, technology-driven solution to help patients get better care without financial headache and we’re not stopping at surgery. In 2021 we’ll be expanding our reach and impact with additional services. It’s such an honor to pave the way for a better healthcare future and we’re so excited for what’s to come.”

Carrum Health’s customers include Quest Diagnostics, US Foods, and other, undisclosed organizations in retail, manufacturing, communications and insurance, the company said.

Centers of excellence on the platform include Johns Hopkins HealthCare, Mayo Clinic, and Tenet Healthcare .

 

Hello and welcome back to Equity, TechCrunch’s venture-capital-focused podcast, where we unpack the numbers behind the headlines. Happy 2021, or as our own Danny Crichton aptly names it, December 38, 2020.

Equity crew is back to start the new year in full force, with Alex, Natasha, and Danny on the mics and Chris behind the scenes. The reunion led to extreme Dad joke energy from all of us, which helped get through the mountain of tech news that we had in front of us.

In fact, there was so much to talk about that we have a bonus episode coming out Saturday dealing with Roblox and the gaming environment. Stay tuned.

For now, here’s what’s in today’s episode:

• The remote work space is rushing to cure your Zoom fatigue, or at least give you new ways to handle it. This week, we saw GitHub alumni raise millions for a video repository tool, and Teamflow raise more for a virtual platform meant to mimic the serendipity (and productivity) of your currently-shuttered office.
• WeLink raised a $185 million Series A round and, while we could have made financial nomenclature jokes, there was much to unpack on the opportunity of 5G and wireless.
• Divvy locked down $165 million, making itself a unicorn in the process. Consider this one another win for Utah, and a big moment for the company itself, which is working in a very competitive space.
• We also noted a series of new VC funds that closed in the final days of 2020, including One Way, USV, Learn Capital, and Madrona.
• Hopin went shoppin’, picking up StreamYard for a quarter-billion because they thought it was boppin’. Please forgive our attempt at poetry. Regardless, Hopin spent $250 million for StreamYard, a livestreaming technology platform that it intends to operate independently. The combined company has around $65 million in annual recurring revenue, with the purchased-entity bringing $30 million of that on its own. A big deal.
• Twitter is also out in the market with a checkbook, picking up a podcasting app and a design studio.
• And on the podcast front, Amazon is also in the market. This brings up the question, what really is Amazon Prime, anyways?
• Finally, we had few words on why P&G backing off from buying Billie impacts DTC startups everywhere. 

As you can tell by our laughs and jokes this week, it is really good to be back. Enjoy the show, and don’t forget the Saturday extra!

Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.