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Edtech startup bina raises $1.4M to teach 4- to 12-year-olds, launch School-as-a-Service
With the pandemic wreaking havoc amongst early years education amid school lockdowns, it’s no wonder edtech startups have piled into the space. But it has also served to highlight the abysmal nature of early years teaching: Some 40 million teachers across the globe are leaving the sector, according to the World Bank. Of the 1.5 billion primary-age children, only a few can access high-quality education, and approximately 58 million primary-age children are out of education, most of whom are girls.
So the opportunity to make a difference, using online teaching, in these very young years, is great, because classes sizes can be reduced online, and the quality of teaching improved.
This is the idea behind bina, which bills itself as a “digital primary education ecosystem”. It has now raised $1.4 million to aim at the education of 4- to 12-year-olds.
The funding round was led by Taizo Son, one of Japan’s billionaires. Other investors and advisors include Jutta Steiner, founder at Parity Technologies, the company behind Polkadot decentralized protocol, and Lord Jim Knight, ex-Minister of Education (U.K.).
Bina’s “schtick” is that it has very small online class sizes of six students (3x smaller than the OECD average).
It also boasts of “adaptive learning paths” that cover international standards; teachers with a minimum of eight years of digital teaching experience; and data-driven decision making for its pedagogical approach.
Noam Gerstein, bina’s CEO and founder said: “I’ve interviewed students, teachers and parents globally for years, and it is clear a new systemic design is needed. With our founding families, we are building a world in which every child has access to quality education, educators’ skills are valued and continuously developed, and parents don’t need to choose between their work and family life.”
He says it also grants pupils company shares (RSUs) as they grow with the school. Currently available to English-speaking students in the CET time zone, the bina School is planning a SaaS product for governments, NGOs and school systems.
“We right now compete against companies like Outschool, Pearson’s online Academy, Primer and Prisma,” he told me over a call. “So these are the big names of the last year for the first phase. But the strategy is that we’re building it in two phases. The first phase is actually building a school that we operate as a ‘lab’ school. And the second phase is what we call ‘bina as a service’. So it’s a SaaS ‘school as a service’. The idea is that we offer collaboration with NGOs and governments, doing accreditation and training and licencing of the product. So for that second part we’re actually competing against the big accreditation system.”
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In its first funding in 7 years, profitable fintech Lower raises $100M Series A led by Accel
Lower, an Ohio-based home finance platform, announced today it has raised $100 million in a Series A funding round led by Accel.
This round is notable for a number of reasons. First off, it’s a large Series A even by today’s standards. The financing also marks the previously bootstrapped Lower’s first external round of funding in its seven-year history. Lower is also something that is kind of rare these days in the startup world: profitable. Silicon Valley-based Accel has a history of backing profitable, bootstrapped companies, having also led large Series A rounds for the likes of 1Password, Atlassian, Qualtrics, Webflow, Tenable and Galileo (which went on to be acquired by SoFi).
In fact, Galileo founder Clay Wilkes introduced the VC firm to Dan Snyder, Lower’s founder and CEO. The two companies have a few things in common besides being profitable: they were both bootstrapped for years before taking institutional capital and both have headquarters outside of Silicon Valley.
“We were immediately intrigued because Ohio-based Lower echoes both of these themes,” said Accel partner John Locke, who led the firm’s investment in Lower and is taking a seat on the company’s board as part of the investment. “Like Galileo, Lower will be one of the most successful bootstrapped fintech companies globally. The combination of a company built in a nontraditional region across the globe and a bootstrapped company reminds us of [other] companies we have partnered with for a large Series A.”
There were other unnamed participants in the round, but Accel provided the “majority” of the investment, according to Lower.
Snyder co-founded Lower in 2014 with the goal of making the home-buying process simpler for consumers. The company launched with Homeside, its retail brand that Snyder describes as “a tech-leveraged retail mortgage bank” that works with realtors and builders, among others.
In 2018, the company launched the website for Lower, its direct-to-consumer digital lending brand with the mission of making its platform a one-stop shop where consumers can go online to save for a home, obtain or refinance a mortgage and get insurance through its marketplace. This year, it launched the Lower mobile app with a savings account.
Sitting (L to R): Co-founders Dan Snyder, Grayson Hanes
Standing (L to R): Co-founders Mike Baynes, Chris Miller
Not pictured: Robert Tyson; Image credit: Lower
Over the years, Lower has funded billions of dollars in loans and notched an impressive $300 million in revenue in 2020 after doubling revenue every year, according to Snyder.
“Our history is maybe a little atypical of fintech companies today,” he told TechCrunch. “We’ve had a view going back to the start of the company that we wanted to run it profitably. That’s been one of our pillars, so that’s what we’ve done. Also, we all grew up in the mortgage industry, so we saw firsthand the size of the market, but also how broken it was, so we wanted to change it.”
In launching the direct-to-consumer digital lending brand, the company was working to make the homebuying process more “digital, transparent and easier for consumers to access,” Snyder said.
At the same time, the company didn’t want to lose the human touch.
“We tried to design the app flow in a way where you can get as far along as you can in the application but if you want, at any point in time, to talk or chat with someone, we’re available,” Snyder added.
Image Credits: Lower
Lower’s typical customer is the millennial and now Gen Z who’s aspiring to own their first home, according to Snyder.
“They might be thinking, ‘OK, I might be living in an apartment now, but in the next few years I’m going to meet someone and/or have a child and I want to unlock the investment that is a home,’” he told TechCrunch. “And we’ll help them on that journey.”
Lower’s recently launched new app offers a deposit account it’s dubbed “HomeFund.” The interest-bearing, FDIC-insured deposit account offers a 0.75% Annual Percentage Yield and is designed to help consumers save for a home with a “dollar-for-dollar match in rewards” up to the first $1,000 saved, Snyder said.
Lower works with more than 35 major insurance carriers nationally, including Nationwide, Liberty Mutual and Allstate. It has more than 1,600 employees, about half of which are based in Lower’s home state. That’s up from about 650 employees in June of 2020.
Looking ahead, the company plans to add more services and has an “aggressive roadmap” for adding new features to its platform. Today, for example, Lower sells primarily to Fannie Mae and Freddie Mac. And while it services the majority of its loans, like many large lenders, it uses a subservicer. That will change, however, in early 2022, when Lower intends to launch its own native servicing platform.
And while the company intends to continue to run profitably, Snyder said he and his co-founders “think the time is now to gain share.”
“We want to become a global brand, raise money and gain market share,” he added. “We’re going to continue to double down on product and build out our capabilities. We are the best-kept secret in fintech and plan to change that with smart branding, advertising and sponsorships.”
And last but not least, Lower is eyeing the public markets as part of its longer-term roadmap.
“Ultimately, we know we can build a great public company,” Snyder told TechCrunch. “We’re of the scale to be a public company right now, but we’re going to keep our heads down and we’re going to keep building for the next few years and then I think we can be in a spot to be a strong public business.”
Accel’s Locke points out that in the U.S., mortgage and home finance are among the largest financial service markets, and they have primarily been handled by large banks.
“For most consumers, getting a mortgage through these banks continues to be an overly complex, slow-moving process,” Locke told TechCrunch. “We believe by providing consumers a great mobile experience, Lower will gain share from incumbent banks, in the same way that companies like Monzo have in banking or Venmo in payments or Trade Republic and Robinhood in stock trading.”
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Mythical Games raises $75M to build an NFT game engine
Even as NFT sales dip below their most speculative highs, startups aiming to tap into their potential are still scoring big funding rounds from investors who believe there’s much more to crypto collectibles than the past few months of hype.
Mythical Games, an NFT games startup based out of Los Angeles, has banked a $75 million raise from new and existing investors betting on the startup’s aim to expand the ambitions of their first title and locate a substantial platform opportunity amid helping developers build blockchain-based gaming experiences.
The round was led by WestCap. Existing investors were joined by 01 Advisors and Gary Vaynerchuk’s VaynerFund in the Series B funding. The startup has raised a whopping $120 million to date.
The company has been building a title called Blankos Block Party that seems to be Fall Guys meets Roblox meets Funko Pop. The PC game capitalizes on a number of big social gaming trends around user-created content, while adding in a marketplace where users can buy avatar figures and accessories crafted by a variety of artists and designers that Mythical has partnered with. Users can buy or sell the limited run or open edition items through their marketplace. Unlike some other NFT platforms, the goods live on a private blockchain so they can’t be re-sold on public marketplace platforms like OpenSea.
Mythical Games is part of a growing movement to bring blockchain-based game mechanics mainstream while leaving behind elements of crypto platforms that are seen as less ready for primetime. Users can purchase avatars on the platform with cryptocurrency through BitPay but they can also pay with a credit card. Users don’t need to walk through the mechanics of setting up a wallet or writing down a seed phrase either.
While the company has big hopes for Blankos as it onboards more users, the bigger investor opportunity is likely in the game engine that the team is building. The startup’s “Mythical Economic Engine” is being designed to help budding game builders create NFT-based marketplaces that won’t get them in any regulatory trouble, marrying compliance across geographies and tools that help creators comply with anti-money laundering laws and know-your-customer frameworks.
“With any new market like [NFTs], it goes through all these different cycles,” Mythical Games CEO John Linden tells TechCrunch. “We think this will actually change gaming for the long haul. The more we talk to game studios, we’re finding more and more potential use cases.”
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HoneyBook raises $155M at $1B+ valuation to help SMBs, freelancers manage their businesses
HoneyBook, which has built out a client experience and financial management platform for service-based small businesses and freelancers, announced today that it has raised $155 million in a Series D round led by Durable Capital Partners LP.
Tiger Global Management, Battery Ventures, Zeev Ventures, 01 Advisors as well as existing backers Norwest Venture Partners and Citi Ventures also participated in the financing, which brings the San Francisco-based company’s valuation to over $1 billion. With the latest round, HoneyBook has now raised $248 million since its 2013 inception. The Series D is a big jump from the $28 million that HoneyBook raised in March 2019.
When the COVID-19 pandemic hit last year, HoneyBook’s leadership team was concerned about the potential impact on their business and braced themselves for a drop in revenue.
Rather than lay off people, they instead asked everyone to take a pay cut, and that included the executive team, who cut theirs “by double” the rest of the staff.
“I remember it was terrifying. We knew that our customers’ businesses were going to be impacted dramatically, and would impact ours at the same time dramatically,” recalls CEO Oz Alon. “We had to make some hard decisions.”
But the resilience of HoneyBook’s customer base surprised even the company, who ended up reinstating those salaries just a few months later. And, as corporate layoffs driven by the COVID-19 pandemic led to more people deciding to start their own businesses, HoneyBook saw a big surge in demand.
“Our members who saw a hit in demand went out and found demand in another thing,” Oz said. As a result, HoneyBook ended up doubling its number of members on its SaaS platform and tripling its annual recurring revenue (ARR) over the past 12 months. Members booked more than $1 billion in business on the platform in the past nine months alone.
HoneyBook combines on its platform tools like billing, contracts and client communication, with the goal of helping business owners stay organized. Since its inception, service providers across the U.S. and Canada such as graphic designers, event planners, digital marketers and photographers have booked more than $3 billion in business on its platform. And as the pandemic had more people shift to doing more things online, HoneyBook prepared to help its members adapt by being armed with digital tools.
Image Credits: HoneyBook
“Clients now expect streamlined communication, seamless payments, and the same level of exceptional service online that they were used to receiving from business owners in person,” Alon said.
Oz co-founded HoneyBook with wife Naama and longtime friend Dror Shimoni. Oz and Naama were both small business owners themselves at one time, so they had firsthand insight on the pain points of running a service-based business.
HoneyBook’s software not only helps SMBs do more business, but helps them “convert potentials to actual clients,” Oz said.
“We help them communicate with potential clients so they can win their business, and then help them manage the relationship so they can keep them,” Naama said.
The company plans to use its new capital toward continued product development and to “dramatically” boost its 103-person headcount across its New York and Tel Aviv offices.
“We’re seeing so much demand for additional services and products, so we definitely want to invest and create better ways for our members to present themselves online,” Alon told TechCrunch. “We’re also seeing demand for financial products and the ability to access capital faster. So that’s just a few of the things we plan to invest in.”
The company also wants to make its platform “more customizable” for different categories and verticals.
Chelsea Stoner, general partner at Battery Ventures, said her firm recognized that the expansive market of productivity tools to serve small businesses and entrepreneurs was “a market of discrete and separate productivity tools.”
HoneyBook, she said, is a true platform for SMBs, “providing a huge array of functionality in one cohesive UX.”
“It unites and connects every task for the solopreneurs, from creating and distributing marketing collateral, to organizing and executing proposals, to sending invoices and collecting payments,” Stoner said. “The company is constantly innovating and iterating in response to its members; we also see a lot of opportunity with payments going forward…And, due to COVID-19 and other factors, the company is sitting on pent-up demand that will accelerate growth even more.”
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Better Health raises $3.5M seed round to reinvent medical supply shopping through e-commerce
The home medical supply market in the U.S. is significant and growing, but the way that Americans go about getting much-needed medical supplies, particularly for those with chronic conditions, relies on outdated and clumsy sales mechanisms that often have very poor customer experiences. New startup Better Health aims to change that, with an e-commerce approach to serving customers in need of medical supplies for chronic conditions, and it has raised $3.5 million in a new seed round to pursue its goals.
Better Health estimates the total value of the home medical supplies market in the U.S., which covers all reimbursable devices and supplies needed for chronic conditions, including things like colostomy bags, catheters, mobility aids, insulin pumps and more, is around $60 billion annually. But the market is obviously a specialized one relative to other specialized goods businesses, in part because it requires working not only with customers who make the final decisions about what supplies to use, but also payers, who typically foot the bill through insurance reimbursements.
The other challenge is that individuals with chronic care needs often require a lot of guidance and support when making the decision about what equipment and supplies to select — and the choices they make can have a significant impact on quality of life. Better Health co-founder and CEO Naama Stauber Breckler explained how she came to identify the problems in the industry, and why she set out to address them.
“The first company I started was right out of school, it’s called CompactCath,” she explained in an interview. “We created a novel intermittent catheter, because we identified that there’s a gap in the existing options for people with chronic bladder issues that need to use a catheter on a day-to-day basis […] In the process of bringing it to market, I was exposed to the medical devices and supplies industry. I was just shocked when I realized how hard it is for people today to get life-saving medical supplies, and basically realized that it’s not just about inventing a better product, there’s kind of a bigger systematic problem that locks consumer choice, and also prevents innovation in the space.”
Stauber Breckler’s founding story isn’t too dissimilar from the founding story of another e-commerce pioneer: Shopify. The now-public heavyweight originally got started when founder Tobi Lütke, himself a software engineer like Stauber Breckler, found that the available options for running his online snowboard store were poorly designed and built. With Better Health, she’s created a marketplace, rather than a platform like Shopify, but the pain points and desire to address the problem at a more fundamental level are the same.
Better Health head of Product Adam Breckler, left, and CEO Naama Stauber Breckler, right. Image Credits: Better Health
With CompactCath, she said they ended up having to build their own direct-to-consumer marketing and sales product, and through that process, they ended up talking to thousands of customers with chronic conditions about their experiences, and what they found exposed the extent of the problems in the existing market.
“We kept hearing the same stories again, and again — it’s hard to find the right supplier, often it’s a local store, the process is extremely manual and lengthy and prone to errors, they get the surprise bills they weren’t expecting,” Stauber Breckler said. “But mostly, it’s just that there is this really sharp drop in care, from the time that you have a surgery or you were diagnosed, to when you need to now start using this device, when you’re essentially left at home and are given a general prescription.”
Unlike in the prescription drug market, where your choices essentially amount to whether you pick the brand name or the generic, and the outcome is pretty much the same regardless, in medical supplies which solution you choose can have a dramatically different effect on your experience. Customers might not be aware, for example, that something like CompactCath exists, and would instead choose a different catheter option that limits their mobility because of how frequently it needs changing and how intensive the process is. Physicians and medical professionals also might not be the best to advise them on their choice, because while they’ve obviously seen patients with these conditions, they generally haven’t lived with them themselves.
“We have talked to people who tell us, ‘I’ve had an ostomy for 19 years, and this is the first time I don’t have constant leakages’ or someone who had been using a catheter for three years and hasn’t left her house for more than two hours, because they didn’t feel comfortable with the product that they had to use it in a public restroom,” Stauber Breckler said. “So they told us things like ‘I finally went to visit my parents, they live in a town three hours away.’ ”
Better Health can provide this kind of clarity to customers because it employs advisors who can talk patients through the equipment selection process with one-to-one coaching and product use education. The startup also helps with navigating the insurance side, managing paperwork, estimating costs and even arguing the case for a specific piece of equipment in case of difficulty getting the claim approved. The company leverages peers who have firsthand experience with the chronic conditions it serves to help better serve its customers.
Already, Better Health is a Medicare-licensed provider in 48 states, and it has partnerships in place with commercial providers like Humana and Oscar Health. This funding round was led by 8VC, a firm with plenty of expertise in the healthcare industry and an investor in Stauber Breckler’s prior ventures, and includes participation from Caffeinated Capital, Anorak Ventures and angels Robert Hurley and Scott Flanders of remote health pioneer eHealth.
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With Goat Capital, Justin Kan and Robin Chan want to keep founding alongside the right teams
Justin Kan and Robin Chan have each been angel investing for more than a decade. They’re starting a new fund together now, though, to stay involved as cofounders of more startups.
Goat Capital is a hybrid incubator versus a pure seed investment firm, Chan explains. It will be writing checks ranging between roughly half a million and $3 million dollars, and it is only planning to raise $40 million — so the checks will be selective.
The offering is that “you’re going to be working with Justin and Robin,” he says, as a direct collaboration to help your company succeed. With $25 million closed already from themselves and several family offices, the fund has begun investing globally with particular interests in digital health, ecommerce, digital entertainment and gaming, robotics and climate change.
The goal is not just about being the Greatest Of All Time, Kan adds. In a startup, you “climb high heights and eat shit to get there. That tenacity is what we want.”
It’s a nod to their own successes and struggles as founders over the years, and what they have seen as investors and advisors to a wide range of companies around the world (Twitter, Xiaomi, Bird, Uber, Square, Ginkgo Bioworks, Scale.ai, Cruise, Razorpay, Xendit, Equipment Share, Wave, Teachable, Semantic Machines, Rippling, Built Robotics, etc.)
Kan was a cofounder of Justin.tv, which became Twitch as well as Socialcam. He later had an on-demand company called Exec and previously a calendar app called Kiko, both of which sold for small amounts. Most recently, he took a big shot at the traditional legal industry with Atrium, a law firm and legal software startup that raised big rounds of funding before shuttering earlier this year.
His prototype for Goat is Alto Pharmacy, a booming digital health unicorn today that the founders started in his living room.
“We do think founders should be treated like athletes, going for gold really hard… the Olympic metaphor,” Kan qualifies about the name. “That means grinding for years — and having to rest, too. I’m very passionate about mental health and wellness as part of the journey.” (More on that here.)
Chan, meanwhile, sold his gaming startup in China to Zynga a decade ago, then helped lead a failed attempt to buy Blackberry before founding Operator, a well-funded ecommerce company that closed a few years ago. During the pandemic, he helped create Operation Masks, a nonprofit that has been providing PPE across the US. He’s also an ongoing advisor to Sleeper, Bird, Expa and Flipboard.
The focus will be fully global now. Chan explains that even though you’re seeing more challenges to building a truly global company these days, there’s more space for local startups to win big.
“There’s the US internet, the China internet, the India internet, the EU internet — in some ways it makes those markets more valuable to win, like traditional media. Broadcast and cable are highly geographic but the franchise value becomes higher because of the regulatory moat.”
Chan, on that note, met Kan back when he was a director at [current TechCrunch owner] Verizon Wireless, when Justin.tv was trying to negotiate for free data. When I asked if they had worked out a deal during a phone interview, Kan said “you [expletive] didn’t.”
But it did lead to other co-investments later on, including Ramp, Workstream and others, and now this fund.
Today, Kan says that the focus on teams will be as flexible as the times. “When we started, the internet was America,” he says. “If you weren’t there, you weren’t a company. It’s been a complete reversal of that. Now teams are international, talent is international, more and more companies are building remote first — although you’d seen that before given the costs of the Bay. We have an entirely remote company in North Carolina, Grammarly in Europe… it’s more and more the norm. Smart founders are going anywhere to find talent.
For the two partners, this new fund will be about staying connected to that certain startup feeling that is elusive for anyone trying to build something great.
“There’s nothing more magical than being in the first step of a special company,” Chan says. “That glimpse of the future. We wouldn’t get the same feeling at the growth stage versus working with small teams or a single founder. I think we have the instinct.”
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Alexa von Tobel: Eliminating risk is the key to building a startup during an economic downturn
Launching a company, even in the best of times, is one of the most challenging exercises a person can go through. In an economic recession, it can seem downright impossible. But founders across the country, and indeed across the globe, are in the midst of that process as I write.
They aren’t the first. Alexa von Tobel, founder of LearnVest and founding partner at Inspired Capital, publicly launched her fintech startup in 2009, and founded it in May of 2007. In that span of time, Lehman Brothers went under — in December of 2008.
The company was launched in the midst of the worst economic downturn in at least three generations (current circumstances notwithstanding). We briefly chatted with von Tobel about this in a recent episode of Extra Crunch Live, but the topic deserved much more exploration. Von Tobel was gracious enough to talk to us again, and gave us her advice and insights on what it means, and what it takes, to launch a business in the midst of economic uncertainty.
Write it down
Von Tobel says that one of the most important exercises in forming LearnVest — a company that was acquired for $375 million by Northwestern Mutual — was writing out a business plan. It was 75 pages, and by no means a formal document. Rather, the LearnVest business plan was a brain dump of everything von Tobel could possibly think of as it relates to her idea.
“It was nothing beautiful and by no means a work of art,” said von Tobel. “But it was valuable to put it together and walk through this blueprint of all the big questions, all the concerns. How would the customer feel? How big was the market? What was the competition? I even drew up a product plan of how I would roll it out. It was a budget, looking at how much money we think we need to get up and running.”
This business plan also included the areas in which von Tobel felt she was not an expert. She wanted a clear expression of her own strengths and weaknesses built into the business from its very inception.
von Tobel had never written a formal business plan before. She had taken a few business classes at Harvard Business School, but didn’t see the exercise as preparation for publication, but rather her own personal space to develop a product and business.
“It was a macro, more thoughtful plan that allowed me to understand where things were positioned,” said von Tobel. “Perfect is the enemy of good enough. You don’t have to be perfect, but you have to do enough that you have a really clear sense of the picture and a really clear sense of the cracks.”
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Lucid Lane has developed a service to get patients off of pain meds and avoid addiction
Four years ago, Adnan Asar, the founder of the new addiction prevention service Lucid Lane, was enjoying a successful career working as the founding chief technology officer at Livongo Health. It was the serial senior tech executive’s most recent job after a long stint at Shutterfly and he was shepherding the company through the development of its suite of hardware and software for the management of chronic conditions.
But when Asar’s wife was diagnosed with non-Hodgkin’s Lymphoma, he stepped away from the technology world to be with his family while she underwent treatment.
He did not know at the time that the decision would set him on the path to founding Lucid Lane. The company’s mission is to help give patients who have been prescribed medications to address pain and anxiety ways to wean themselves off those drugs and avoid addiction — and its purpose is born from the struggle Asar witnessed as his wife wrestled with how to stop taking the medication she was prescribed during her illness.
Asar’s wife isn’t alone. In 2018, there were roughly 168.2 million prescriptions for opioids written in the United States, according to data from the Centers for Disease Control and Prevention. Lucid Lane estimates that 50 million people are prescribed opioids and another 13 million are prescribed benzodiazepines each year either after surgery or in conjunction with cancer treatments — all without a plan for how to manage or taper the use of these highly addictive medications.
For Asar’s wife, it was the benzodiazepine prescribed as part of her cancer treatment that became an issue. “She was hit by very severe withdrawal symptoms and we didn’t know what was going on,” Asar said. When they consulted her physician he gave the couple two options — quitting cold turkey or remaining on the medication.
“My wife decided to go cold turkey,” Asar said. “It was really debilitating for the whole family.”
It took nine months of therapy and regular consultations with psychiatrists to help with tailoring medication dosages and tapering to get her off of the medication, said Asar. And that experience led to the launch of Lucid Lane.
“Our goal is to prevent and control medication and substance dependence,” Asar said.
The company’s telehealth solution is built on a proprietary treatment protocol meant to provide continuous daily support and interventions, along with proactive monitoring of a personalized treatment plan — all on an ongoing basis, said Asar.
And the COVID-19 pandemic is only accelerating the need for telehealth services. “COVID-19 has made telehealth a mandatory service instead of a discretionary service,” said Asar. “There’s a surge in anxiety, depression, substance use and medication use. We’re seeing a surge of patients who are reaching out to us.”
Asar sees Lucid Lane’s competitors as companies like Lyra Health and Ginger, or point solutions building digital diagnostics to detect anxiety and depression. But unlike some companies that are launching to treat addiction or addictive behaviors, Asar sees his startup as preventing dependency and addiction.
“A lot of people are sliding into these addictions through something that happens at the doctor’s office,” said Asar. ” Our solution does not prescribe any of these medications.”
The company is working on clinical studies that are set to start at the Palo Alto VA hospital, and has raised $4 million in seed funding from investors including Battery Ventures and AME Cloud Ventures, the investment firm founded by Jerry Yang.
“We see great potential for Lucid Lane, as it has developed a scalable solution to one of the biggest problems facing society today,” said Battery general partner Dharmesh Thakker, in a statement. “Telehealth solutions have emerged as highly capable of addressing complex problems, and Lucid Lane has embraced remote care from its beginning. Its design enables care anytime, anywhere for patients in their moment of need. This can make a tremendous difference in the battle between recovery and relapse. We believe that it will help millions of people lead better lives.”
Joining Asar in the development of the company and its healthcare protocols are a seasoned team of health professionals, including Dr. Ahmed Zaafran, a board certified anesthesiologist at Santa Clara Valley Medical Center and assistant professor of anesthesiology (affiliated) at Stanford University School of Medicine; and advisors like Dr. Vanila Singh, who was also previously chairperson of the HHS Task Force in conjunction with the DOD and the VA to address the opioid drug crisis; Dr. Carin Hagberg, the chair of anesthesiology, perioperative and pain medicine of MD Anderson Cancer Center; and Sherif Zaafran, the president of the Texas Medical Board and chair of multiple national committees on pain management, including the subcommittee Taskforce on Pain Management Services for HHS, as well as the department’s Pain Clinical Pathways Committee.
“Lucid Lane provides a patient-centered solution that allows for the best clinical outcomes for patients after surgery and those bravely finishing chemotherapy,” said Dr. Singh, in a statement. “For the many patients who require short-term opioids and benzodiazepine medications, Lucid Lane’s treatment can limit the risk of prolonged dependence of these medications while also ensuring effective pain control with a resulting improved quality of life and functioning.”
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Patch Homes locks in $5M Series A to give homeowners financial freedom without debt
Home ownership has long been touted as the American dream. But rising rates of mortgage debt and student loan debt are making the pursuit of home ownership a nightmare. Debt-burdened individuals or those with inconsistent or tight cash flow can not only struggle to get credit loan approval when buying a home but also struggle to satisfy monthly mortgage payments even after purchase.
Patch Homes is hoping to keep the proverbial American dream alive. Patch looks to provide homeowners with cash flow and liquidity by allowing them to monetize their homes without taking on debt, interest or burdensome monthly payments.
Today, Patch took another big step in making its vision a far-reaching reality. The company has announced it has raised a $5 million Series A round led by Union Square Ventures (USV), with participation by from Tribe Capital and previous investors Techstars Ventures, Breega Capital and Greg Schroy.
Patch Home looks to partner with homeowners by investing up to $250,000 (with an average investment of ~$100,000) for an equity stake in the home’s value, generally in the 5% to 20% range. Homeowners aren’t subject to any interest or recurring payments and have 10 years to pay back Patch’s investment. Upon doing so, the only incremental money Patch receives is its portion of the change in the home’s value over the course of the 10-year period. If the value of the home goes down in value, Patch willingly takes a loss on its investment.
According to Patch Homes CEO and co-founder Sahil Gupta, one of the major motivations behind the company’s model is to align Patch’s incentives with the homeowners’, allowing both parties to think of each other as trusted partners even after financing. After Patch’s investment, the company provides a number of ancillary services to homeowners, such as credit score monitoring, as well as home value and property tax tracking.
In one instance recounted by Gupta in an interview with TechCrunch, Patch even covered three months of an owner’s mortgage during a liquidity crunch for his small business, allowing him to maintain his home and credit score. Patch is incentivized to provide all services that can help ensure an increase in home value, benefiting both Patch and the homeowner, with the homeowner earning the majority of the asset’s appreciated value.
Additionally, since Patch’s model isn’t focused on a homeowner’s ability to pay back a loan, interest or periodic payments, Patch is able to provide financing to more people. Patch is able to help those with more variable qualifications that struggle to get traditional loans — such as a 1099 contracted worker — monetize their illiquid assets with less harsh or restrictive terms and without increasing their debt burden. Gupta described this as solving the core problem of providing liquidity to asset-rich but cash-flow sensitive people.
Patch is not only looking to provide easier liquidity to more homeowners, but they’re trying to do so faster than traditional lenders. Interested customers can first receive a free estimate of whether Patch will invest in their home or not, how much it’s willing to invest and what percentage equity it will take — primarily based on Patch’s machine learning models that focus on asset, market and location-level attributes.
After the initial estimate, a Patch home advisor will educate the customer on the product and start a formal application process, which includes your standard income and credit score verification, which takes 5-10 days. All-in, homeowners have the ability to get money in as little as 14 days, a significantly shorter timeline than your standard home credit process. Once the investment is made, owners have full freedom with how they use the money.
According to Patch, while its customers come from a diverse set of backgrounds, many either with accumulated debt have to pay down the net or may struggle making monthly payments. The average Patch homeowner uses 40% of the investment to eliminate debt, adds 40% to their savings account or passive income and invests 20% into home improvements.
To date, Patch has raised a total of $6 million and believes the latest round of funding will help scale its operations as they team up with advisors like USV that have experience scaling fintech companies (such as a Lending Club or Carta). The funds will be used to invest in product and Patch’s clearing technology in order to further expedite Patch’s lending process.
Patch also hopes to use the investment to help them gradually expand their footprint, with the goal of eventually having a presence all 50 states. (Patch is currently available in 11 regional markets within California and Washington and expects to be in 18 regional markets by the end of the year including those in Utah, Colorado and Oregon.)
Image via Patch Homes
What makes home ownership so galvanizing for the Patch team? Patch CEO Sahil Gupta spent years putting his Carnegie Mellon financial engineering degree to work in banking and finance, as well as in financial products and strategy positions at fintech startups backed by heavy hitters such as YC and Goldman Sachs.
After realizing the majority of the U.S. population are homeowners, but were struggling to make monthly payments or save for the future, Sahil wanted to figure out to take an illiquid asset like a home and make it easily accessible.
Around the same time, Sahil’s co-founder Sundeep Ambati was working as a contractor on a new business venture of his and was struggling to get a home equity loan. While these circumstances ultimately led Sahil and Sundeep to found Patch Homes in 2016 out of the Techstars New York accelerator program, the deeper motivation behind Patch can be traced back nearly 30 years when Sahil’s father made an equity-sharing agreement with his brother as they were building his family’s home in India.
With a growing family and a pregnant wife, Sunil’s father was adamant about living debt-free, so his brother provided an investment in exchange for an equity stake in the house. According to Sahil, the home is still in the family and has appreciated substantially in value to the benefit of both Sahil’s father and his brother. Longer-term, Patch wants to be the preferred partner for home ownership, helping reduce cash-tight owners’ financial anxiety without the debilitating weight of debt.
“Some companies want to help people buy or sell homes, but home ownership really begins after that point. Patch is built to be inside the home with you and everything that comes thereafter,” Gupta told TechCrunch.
“Patch was created to partner with homeowners to help them unlock their home equity so they can achieve their financial goals along every step of their home ownership journey.
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What tech gets right about healthcare
Why is tech still aiming for the healthcare industry? It seems full of endless regulatory hurdles or stories of misguided founders with no knowledge of the space, running headlong into it, only to fall on their faces.
Theranos is a prime example of a founder with zero health background or understanding of the industry — and just look what happened there! The company folded not long after founder Elizabeth Holmes came under criminal investigation and was barred from operating in her own labs for carelessly handling sensitive health data and test results.
But sometimes tech figures it out. It took years for 23andMe to breakthrough FDA regulations — it’s since more than tripled its business and moved into drug discovery.
And then there’s Oscar Health, which first made a mint on Obamacare and has since ventured into Medicare. Combined with Bright, the two health insurance startups have pulled in a whopping $3 billion so far.
It’s easy to shake our fists at fool-hardy founders hoping to cash in on an industry that cannot rely on the old motto “move fast and break things.” But it doesn’t have to be the code tech lives or dies by.
So which startups have the mojo to keep at it and rise to the top? Venture capitalists often get to see a lot before deciding to invest. So we asked a few of our favorite health VC’s to share their insights.
Phin Barnes – First Round Capital
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