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Testing platform Tricentis acquires performance testing service Neotys
If you develop software for a large enterprise company, chances are you’ve heard of Tricentis. If you don’t develop software for a large enterprise company, chances are you haven’t. The software testing company with a focus on modern cloud and enterprise applications was founded in Austria in 2007 and grew from a small consulting firm to a major player in this field, with customers like Allianz, BMW, Starbucks, Deutsche Bank, Toyota and UBS. In 2017, the company raised a $165 million Series B round led by Insight Venture Partners.
Today, Tricentis announced that it has acquired Neotys, a popular performance testing service with a focus on modern enterprise applications and a tests-as-code philosophy. The two companies did not disclose the price of the acquisition. France-based Neotys launched in 2005 and raised about €3 million before the acquisition. Today, it has about 600 customers for its NeoLoad platform. These include BNP Paribas, Dell, Lufthansa, McKesson and TechCrunch’s own corporate parent, Verizon.
As Tricentis CEO Sandeep Johri noted, testing tools were traditionally script-based, which also meant they were very fragile whenever an application changed. Early on, Tricentis introduced a low-code tool that made the automation process both easier and resilient. Now, as even traditional enterprises move to DevOps and release code at a faster speed than ever before, testing is becoming both more important and harder for these companies to implement.
“You have to have automation and you cannot have it be fragile, where it breaks, because then you spend as much time fixing the automation as you do testing the software,” Johri said. “Our core differentiator was the fact that we were a low-code, model-based automation engine. That’s what allowed us to go from $6 million in recurring revenue eight years ago to $200 million this year.”
Tricentis, he added, wants to be the testing platform of choice for large enterprises. “We want to make sure we do everything that a customer would need, from a testing perspective, end to end. Automation, test management, test data, test case design,” he said.
The acquisition of Neotys allows the company to expand this portfolio by adding load and performance testing as well. It’s one thing to do the standard kind of functional testing that Tricentis already did before launching an update, but once an application goes into production, load and performance testing becomes critical as well.
“Before you put it into production — or before you deploy it — you need to make sure that your application not only works as you expect it, you need to make sure that it can handle the workload and that it has acceptable performance,” Johri noted. “That’s where load and performance testing comes in and that’s why we acquired Neotys. We have some capability there, but that was primarily focused on the developers. But we needed something that would allow us to do end-to-end performance testing and load testing.”
The two companies already had an existing partnership and had integrated their tools before the acquisition — and many of its customers were already using both tools, too.
“We are looking forward to joining Tricentis, the industry leader in continuous testing,” said Thibaud Bussière, president and co-founder at Neotys. “Today’s Agile and DevOps teams are looking for ways to be more strategic and eliminate manual tasks and implement automated solutions to work more efficiently and effectively. As part of Tricentis, we’ll be able to eliminate laborious testing tasks to allow teams to focus on high-value analysis and performance engineering.”
NeoLoad will continue to exist as a stand-alone product, but users will likely see deeper integrations with Tricentis’ existing tools over time, include Tricentis Analytics, for example.
Johri tells me that he considers Tricentis one of the “best kept secrets in Silicon Valley” because the company not only started out in Europe (even though its headquarters is now in Silicon Valley) but also because it hasn’t raised a lot of venture rounds over the years. But that’s very much in line with Johri’s philosophy of building a company.
“A lot of Silicon Valley tends to pay attention only when you raise money,” he told me. “I actually think every time you raise money, you’re diluting yourself and everybody else. So if you can succeed without raising too much money, that’s the best thing. We feel pretty good that we have been very capital efficient and now we’re recognized as a leader in the category — which is a huge category with $30 billion spend in the category. So we’re feeling pretty good about it.”
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Pie Insurance raises $118M for data-driven workers’ comp coverage
Pie Insurance, a startup offering workers’ compensation insurance to small businesses, announced this morning that it has closed on $118 million in a Series C round of funding.
Allianz X — investment arm of German financial services giant Allianz — and Acrew Capital co-led the round, which brings the Washington, D.C.-based startup’s total equity funding raised to over $300 million since its 2017 inception. Pie declined to disclose the valuation at which its latest round was raised, other than to say it was “a significant increase.”
Return backers Greycroft, SVB Capital, SiriusPoint, Elefund and Moxley Holdings also participated in the Series C financing.
The startup, which uses data and analytics in its effort to offer SMBs a way to get insurance digitally and more affordably, has seen its revenues climb by 150% since it raised $127 million in a Series B extension last May. Its headcount too has risen — to 260 from 140 last year.
Pie began selling its insurance policies in March 2018. The company declined to give recent hard revenue numbers, saying it only has grown its gross written premium to over $100 million and partnered with over 1,000 agencies nationwide. Last year, execs told me that in the first quarter of 2020, the company had written nearly $19 million in premiums, up 150% from just under $7.5 million during the same period in 2019.
Like many other companies over the past year, Pie Insurance — with its internet-driven, cloud-based platform — has benefited from the increasing further adoption of digital technologies.
“We are riding that wave,” said Pie Insurance co-founder and CEO John Swigart. “We believe small businesses deserve better than they have historically gotten. And we think that technology can be the means by which that better experience, that more efficient process, and fundamentally, that lower price can be delivered to them.”
Pie’s customer base includes a range of small businesses including trades, contractors, landscapers, janitors, auto shops and restaurants. Pie sells its insurance directly through its website and also mostly through thousands of independent insurance agents.
Workers’ compensation insurance is the only commercial insurance mandated for nearly every company in the United States, points out Lauren Kolodny, founding partner at Acrew Capital.
“Historically, it’s been extremely cumbersome to qualify, onboard and manage workers’ comp insurance — particularly for America’s small businesses which haven’t been prioritized by larger carriers,” she wrote via email.
Pie, Koldony said, is able to offer underwriting decisions “almost instantly,” digitally and more affordably than legacy insurance carriers.
“I have seen very few insurtech teams that come close,” she added.
Dr. Nazim Cetin, CEO of Allianz X, told TechCrunch via email that his firm believes Pie is operating in an “attractive and growing market that is ripe for digital disruption.”
The company, he said, leverages “excellent,” proprietary data and advanced analytics to be able to provide tailored underwriting and automation.
“We see some great collaboration opportunities with Allianz companies too,” he added.
Looking ahead, the company plans to use its new capital to invest further in technology and automation, as well as to grow its core workers’ comp insurance business and “lay the groundwork for new business offerings in 2021 and beyond.”
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Africa’s ride-hail markets are hot spots for startups and VC
When it comes to VC, vehicles, and startups, Africa’s ride-hail markets are becoming a multi-wheeled and global affair.
The big players such as Uber and Bolt are competing in Kampala and Nairobi—where in addition to car-service—they offer rickshaw taxis. On-demand motorcycle startups are multiplying and piloting EVs with funds from international partners. And many ride-hail companies in Africa are adapting unique product solutions to local transit needs.
In this analysis, I take a look at the leading startups in the mobility space and how the future of transportation on the continent will increasingly come from new entrants.
Africa’s in the midst of digital innovation boom
Africa’s in the midst of digital innovation boom, the components of which are intersecting rapidly across its 54 countries and 1.2 billion people.
Smartphone penetration is improving and in 2017, the continent saw the largest global increase in internet users—20 percent.
By Partech data, the continent surpassed the $1 billion VC mark in 2018. And greater connectivity and venture funding are fueling thousands of startups in every imaginable sector, including digital-transit.
While reliable markets stats for the size and potential of Africa’s ride-hail markets are sparse, there are some indicators of the sector’s potential.
Car ownership and cars per capita in Africa is among the lowest in the world. Parallel to that, any eyes and ears survey of the continent’s big cities reveals that shared transport by buses, cars, or motorcycles is big business that’s already ingrained in consumer culture. Millions of people daily pay fares to pack onto East and West Africa’s Mutatu and Danfo minibuses and Okada and Boda Boda motorbike taxis.
As Africa continues to urbanize, converts to smartphones, and discretionary consumer spending continues to rise—it all adds up to suggest strong potential for conversion to on-demand mobility services.
Unsurprisingly, the most active markets for ride-hail startups and investment in Africa align with the continent’s top spots for VC and tech activity: primarily Nigeria, Kenya, and South Africa.
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Nigeria’s Gokada raises $5.3M round for its motorcycle ride-hail biz
In many large cities across Africa, motorcycle taxis are as common as yellow cabs in New York.
That includes Lagos, Nigeria, where ride-hail startup Gokada has raised a $5.3 million Series A round to grow its two-wheel transit business.
Gokada has trained and on-boarded more than 1,000 motorcycles and their pilots on its app that connects commuters to moto-taxis and the company’s signature green, DOT– approved helmets.
The startup has completed nearly 1 million rides since it was co-founded in 2018 by Fahim Saleh — a Bangladeshi entrepreneur who previously founded and exited Pathao, a motorcycle, bicycle and car transportation company.
For Gokada’s Series A, Rise Capital led the investment, joined by Adventure Capital, IC Global Partners and Illinois-based First MidWest Group. Coinciding with the round, Nigerian investor and Jobberman founder Ayodeji Adewunmi will join Gokada as co-CEO.
Gokada will use the financing to increase its fleet and ride volume, while developing a network to offer goods and services to its drivers. “We’re going to start a Gokada club in each of the cities with a restaurant where drivers can relax, and we’ll experiment with a Gokada Shop, where drivers can get things they need on a regular basis, such as plantains, yams and rice,” Saleh told TechCrunch.
The startup differs from other ride-hail ventures in that it doesn’t split fare revenue with drivers. Gokada charges drivers a flat-fee of 3,000 Nigerian Naira a day (around $8) to work on their platform. The company is looking to generate a larger share of its revenue from building a commercial network around its rider community.
“We don’t do anything with the fares. We want to create an Amazon Prime-type membership…and ecosystem around the driver where we’re going to provide them more and more services, such as motorcycle insurance, maintenance, personal life-insurance and micro-finance loans,” Saleh said.
“We’re trying to provide a network of great services for our drivers that makes them stick with us, and not necessarily see a reason to switch to other platforms,” said Saleh.
Competition among those platforms is heating up, as global players enter Africa’s motorcycle taxi market and local startups raise VC and expand to new countries.
Uber began offering a two-wheel transit option in East Africa in 2018, around the same time Bolt (previously Taxify) started motorcycle taxi service in Kenya.
Rwanda has motorbike taxi startups SafeMotos and Yegomoto. Uganda-based motorcycle ride-hail company SafeBoda expanded into Kenya in 2018 and this month raised a Series B round of an undisclosed amount, co-led by the venture arms of Germany’s Allianz and Indonesia’s Go-Jek.
SafeBoda will use the round to further expand in East Africa and Nigeria in the near future, the startup’s co-CEO Maxime Dieudonne confirmed to TechCrunch.
In Nigeria, Gokada faces a competitor in local startup MAX.ng, which offers mobile-based passenger and logistics delivery services.
Overall, Africa’s motorcycle taxi market is becoming a significant sub-sector in the continent’s e-transport startup landscape. Two-wheel transit startups are vying to digitize a share of Africa’s boda boda and okada markets (the name for motorcycle taxis in East and West Africa) — representing a collective revenue pool of $4 billion and expected to double to $9 billion by 2021, according to a TechSci study.
“There is a formalization of an informal sector play here…to make it safer and higher quality,” Gokada investor Nazar Yasin of Rise Capital told TechCrunch.
The appeal to passengers is the lower cost of motorbike transit compared to buses or cabs ($1.85 is Gokada’s average fare) and the ability of two-wheelers to cut through the heavy congestion in cities such as Lagos and Nairobi.
A notable facet of motorcycle ride-hail companies in Africa is better organizing a space with a reputation for being somewhat chaotic and downright dangerous (see Nigeria’s past bans on the sector entirely due to safety).
For Gokada that includes training courses and certification of riders, the ability to track trips and safety stats from the app, and quality control for motorcycles — something that’s been lacking in East and West Africa’s non-digital moto-taxi space.
The company’s rider program offers a way for drivers to buy, own and maintain their motorcycles as they earn. Gokada has entered into partnership with Indian motorcycle maker TVS Motors to create a custom version of the company’s TVS Apache motorcycles for Gokada drivers.
Gokada is also experimenting with adding sensors to its fleet to better track safety standards. “We’re looking at seat sensors and another GPS sensor to track things like ‘did this driver add more than one passenger on the bike’ and all that data will feed back into our servers,” Saleh said.
The company won’t enter any new countries in Africa in the near future. “We plan to expand all over Nigeria. We think it’s a large enough market for now,” said Saleh. Nigeria is Africa’s most populous nation (190 million) and largest economy.
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Startups Weekly: Flexport, Clutter and SoftBank’s blood money
The Wall Street Journal published a thought-provoking story this week, highlighting limited partners’ concerns with the SoftBank Vision Fund’s investment strategy. The fund’s “decision-making process is chaotic,” it’s over-paying for equity in top tech startups and it’s encouraging inflated valuations, sources told the WSJ.
The report emerged during a particularly busy time for the Vision Fund, which this week led two notable VC deals in Clutter and Flexport, as well as participated in DoorDash’s $400 million round; more on all those below. So given all this SoftBank news, let us remind you that given its $45 billion commitment, Saudi Arabia’s Public Investment Fund (PIF) is the Vision Fund’s largest investor. Saudi Arabia is responsible for the planned killing of dissident journalist Jamal Khashoggi.
Here’s what I’m wondering this week: Do CEOs of companies like Flexport and Clutter have a responsibility to address the source of their capital? Should they be more transparent to their customers about whose money they are spending to achieve rapid scale? Send me your thoughts. And thanks to those who wrote me last week re: At what point is a Y Combinator cohort too big? The general consensus was this: the size of the cohort is irrelevant, all that matters is the quality. We’ll have more to say on quality soon enough, as YC demo days begin on March 18.
Anyways…
Surprise! Sort of. Not really. Pinterest has joined a growing list of tech unicorns planning to go public in 2019. The visual search engine filed confidentially to go public on Thursday. Reports indicate the business will float at a $12 billion valuation by June. Pinterest’s key backers — which will make lots of money when it goes public — include Bessemer Venture Partners, Andreessen Horowitz, FirstMark Capital, Fidelity and SV Angel.
Ride-hailing company Lyft plans to go public on the Nasdaq in March, likely beating rival Uber to the milestone. Lyft’s S-1 will be made public as soon as next week; its roadshow will begin the week of March 18. The nuts and bolts: JPMorgan Chase has been hired to lead the offering; Lyft was last valued at more than $15 billion, while competitor Uber is valued north of $100 billion.
Despite scrutiny for subsidizing its drivers’ wages with customer tips, venture capitalists plowed another $400 million into food delivery platform DoorDash at a whopping $7.1 billion valuation, up considerably from a previous valuation of $3.75 billion. The round, led by Temasek and Dragoneer Investment Group, with participation from previous investors SoftBank Vision Fund, DST Global, Coatue Management, GIC, Sequoia Capital and Y Combinator, will help DoorDash compete with Uber Eats. The company is currently seeing 325 percent growth, year-over-year.
Here are some more details on those big Vision Fund Deals: Clutter, an LA-based on-demand storage startup, closed a $200 million SoftBank-led round this week at a valuation between $400 million and $500 million, according to TechCrunch’s Ingrid Lunden’s reporting. Meanwhile, Flexport, a five-year-old, San Francisco-based full-service air and ocean freight forwarder, raised $1 billion in fresh funding led by the SoftBank Vision Fund at a $3.2 billion valuation. Earlier backers of the company, including Founders Fund, DST Global, Cherubic Ventures, Susa Ventures and SF Express all participated in the round.
Here’s your weekly reminder to send me tips, suggestions and more to kate.clark@techcrunch.com or @KateClarkTweets.
Menlo Ventures has a new $500 million late-stage fund. Dubbed its “inflection” fund, it will be investing between $20 million and $40 million in companies that are seeing at least $5 million in annual recurring revenue, growth of 100 percent year-over-year, early signs of retention and are operating in areas like cloud infrastructure, fintech, marketplaces, mobility and SaaS. Plus, Allianz X, the venture capital arm attached to German insurance giant Allianz, has increased the size of its fund to $1.1 billion and London’s Entrepreneur First brought in $115 million for what is one of the largest “pre-seed” funds ever raised.
Flipkart co-founder invests $92M in Ola
Redis Labs raises a $60M Series E round
Chinese startup Panda Selected nabs $50M from Tiger Global
Image recognition startup ViSenze raises $20M Series C
Circle raises $20M Series B to help even more parents limit screen time
Showfields announces $9M seed funding for a flexible approach to brick-and-mortar retail
Podcasting startup WaitWhat raises $4.3M
Zoba raises $3M to help mobility companies predict demand
Indian delivery men working with the food delivery apps Uber Eats and Swiggy wait to pick up an order outside a restaurant in Mumbai. ( INDRANIL MUKHERJEE/AFP/Getty Images)
According to Indian media reports, Uber is in the final stages of selling its Indian food delivery business to local player Swiggy, a food delivery service that recently raised $1 billion in venture capital funding. Uber Eats plans to sell its Indian food delivery unit in exchange for a 10 percent share of Swiggy’s business. Swiggy was most recently said to be valued at $3.3 billion following that billion-dollar round, which was led by Naspers and included new backers Tencent and Uber investor Coatue.
Lalamove, a Hong Kong-based on-demand logistics startup, is the latest venture-backed business to enter the unicorn club with the close of a $300 million Series D round this week. The latest round is split into two, with Hillhouse Capital leading the “D1” tranche and Sequoia China heading up the “D2” portion. New backers Eastern Bell Venture Capital and PV Capital and returning investors ShunWei Capital, Xiang He Capital and MindWorks Ventures also participated.
Longtime investor Keith Rabois is joining Founders Fund as a general partner. Here’s more from TechCrunch’s Connie Loizos: “The move is wholly unsurprising in ways, though the timing seems to suggest that another big fund from Founders Fund is around the corner, as the firm is also bringing aboard a new principal at the same time — Delian Asparouhov — and firms tend to bulk up as they’re meeting with investors. It’s also kind of time, as these things go. Founders Fund closed its last flagship fund with $1.3 billion in 2016.”
If you enjoy this newsletter, be sure to check out TechCrunch’s venture capital-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I discuss Pinterest’s IPO, DoorDash’s big round and SoftBank’s upset LPs.
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