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Whatnot raises another $150M for its livestream shopping platform, evolves into a unicorn
Whatnot, a livestreaming shopping platform for collectors to buy and sell things like rare Pokémon cards and Funko Pops, has closed a $150 million Series C — its third round of fundraising in 2021 alone. This round pins Whatnot’s valuation at $1.5 billion, earning it a spot on the ever-growing list of unicorns.
So what’s a Whatnot? The app captures a trend that had been growing popular on platforms like Instagram in the U.S. (and was already hugely popular in China): live shopping. Verified sellers can go on the air at any time, hosting on-the-fly video auctions for their goods. Sometimes buyers know exactly what they’re getting. Other times it’s more of a mystery bag; with the popular “card break” concept, for example, users buy assigned portions of an unopened (and often itself rare) box of Pokémon or sports cards and watch its contents revealed live.
This round was funded by return investors a16z and Y Combinator’s Continuity Fund, along with one new firm joining them: CapitalG (which was known as Google Capital before the Google/Alphabet name change.) They’ve also added a few well-known names to their list of angel investors, including Andre Iguodala of the Golden State Warriors, Zion Williamson of the New Orleans Pelicans and Logan Paul of the YouTube. Initial word of this round broke last week, via The Information.
Whatnot originally started as a more standard (less live) resale platform, at first focused on authenticating just one kind of collectable: Funko Pops. As the pandemic took over and everyone was suddenly stuck at home, they leaned hard into live shopping — and grew rapidly as a result.
Meanwhile, the company has been quickly expanding its scope; it grew from just Funko Pops to all sorts of other collectables, including Pokémon cards, pins, vintage clothing, sneakers and more. Whatnot co-founder Grant Lafontaine tells me that its biggest driver is sports cards, followed by Pokémon and Funko Pops. With each category it dives into, Whatnot focuses on onboarding sellers that are already known and trusted in their respective community; each streamer on the platform is currently vetted by the company before they can go live, helping them keep fraud to a minimum. Doing anything sketchy just means getting booted off the platform and burning your own reputation in the process.
A few other key bits from my conversation with Lafontaine:
- He sees “thousands” of potential categories they can expand into. One they’re working on right now: NFTs. Streamers would be able to import their NFTs into Whatnot, displaying them on screen and bringing them in as (static or animated) overlays in the livestream. Users could tap an onscreen NFT to reveal its metadata and learn more about it.
- He says there are “a couple thousand active livestream sellers” on the platform right now.
- The company’s GMV (the total value of everything sold on the platform) is up 30x since its Series A back in the beginning of this year. Whatnot takes an 8% cut on each sale.
- They’re in the middle of rolling out a “pre-bidding” feature, which will allow users to bid on items they know they want ahead of a livestream — if, for example, the user knows they want a certain thing and want a shot at it, but won’t be able to watch live. Others could still out-bid them, of course.
- The company is soon rolling out a complete rebuild of both its iOS and Android apps, with a new UI meant to make the entire process smoother and easier for both buyers and sellers. Lafontaine expects it to ship to everyone in “the next week or two.”
This round brings the company’s total funds raised to $225 million — pretty much all of that in the last year. Meanwhile, competition in the space is heating up; competitors like Popshop have been raising millions for their platforms, and Miami’s Loupe raised $12 million back in June (and is opening a physical retail space soon) with its focus laser-locked on sports cards live sales. Existing giants want in on it too: YouTube is playing with the live shopping concept, and Amazon has been bringing in influencers to host live sessions. In other words: watch this space. Maybe watch it via livestream.
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Announcing the agenda for TechCrunch Sessions: SaaS
On October 27, we’re taking on the ferociously competitive field of software as a service (SaaS), and we’re thrilled to announce our packed agenda, overflowing with some of the biggest names and most exciting startups in the industry. And you’re in luck, because $75 early-bird tickets are still on sale — make sure you book yours so you can enjoy all the agenda has to offer and save $100 bucks before prices go up!
Throughout the day, you can expect to hear from industry experts, and take part in discussions about the potential of new advances in data, open source, how to deal with the onslaught of security threats, investing in early-stage startups and plenty more.
We’ll be joined by some of the biggest names and the smartest and most prescient people in the industry, including Javier Soltero at Google, Kathy Baxter at Salesforce, Jared Spataro at Microsoft, Jay Kreps at Confluent, Sarah Guo at Greylock and Daniel Dines at UiPath.
You’ll be able to find and engage with people from all around the world through world-class networking on our virtual platform — all for $75 and under for a limited time, with even deeper discounts for nonprofits and government agencies, students and up-and-coming founders!
Our agenda showcases some of the powerhouses in the space, but also plenty of smaller teams that are building and debunking fundamental technologies in the industry. We still have a few tricks up our sleeves and will be adding some new names to the agenda over the next month, so keep your eyes open.
In the meantime, check out these agenda highlights:
Survival of the Fittest: Investing in Today’s SaaS Market
with Casey Aylward (Costanoa Ventures), Kobie Fuller (Upfront) and Sarah Guo (Greylock)
- The venture capital world is faster and more competitive than ever. For investors hoping to get into the hottest SaaS deal, things are even crazier. With more nontraditional money pouring into the sector, remote dealmaking now the norm and an increasingly global market for software startups, venture capitalists are being forced to shake up their own operations — and expectations. TechCrunch sits down with three leading investors to discuss how they are fighting for allocation in hot deals, what they’ve changed in their own processes, and what today’s best founders are demanding.
Data, Data Everywhere
with Ali Ghodsi (Databricks)
- As companies struggle to manage and share increasingly large amounts of data, it’s no wonder that Databricks, whose primary product is a data lake, was valued at a whopping $28 billion for its most recent funding round. We’re going to talk to CEO Ali Ghodsi about why his startup is so hot, and what comes next.
SaaS Security, Today and Tomorrow
with Edna Conway (Microsoft), Olivia Rose (Amplitude)
- Enterprises face a constant stream of threats, from nation states to cybercriminals and corporate insiders. After a year where billions worked from home and the cloud reigned supreme, startups and corporations alike can’t afford to stay off the security pulse. Find out what SaaS startups need to know about security now, and in the future.
Automation’s Moment Is Now
with Daniel Dines (UiPath), Laela Sturdy (CapitalG) and Dave Wright (ServiceNow)
- One thing we learned during the pandemic is the importance of automation, and that’s only likely to be more pronounced as we move forward. We’ll be talking to UiPath CEO Daniel Dines, Laela Sturdy, an investor at CapitalG and Dave Wright from ServiceNow about why this is automation’s moment.
Was the Pandemic Cloud Productivity’s Spark
with Javier Soltero (Google)
- One big aspect of SaaS is productivity apps like Gmail, Google Calendar and Google Drive. We’ll talk with executive Javier Soltero about the role Google Workspace plays in the Google cloud strategy.
The Future Is Wide Open
with Abby Kearns (Puppet), Aghi Marietti (Kong) and Jason Warner (Redpoint)
- Many startups today have an open-source component, and it’s no wonder. It builds an audience and helps drive sales. We’ll talk with Abby Kearns from Puppet, Augusto “Aghi” Marietti from Kong and Jason Warner, an investor at Redpoint, about why open source is such a popular way to build a business.
How Microsoft Shifted from On-Prem to the Cloud
with Jared Spataro (Microsoft)
- Jared Spataro has been with Microsoft for over 15 years and he was a part of the shift from strictly on-prem software to that which is dominated by the cloud. Today he runs one of the most successful SaaS products out there, and we’ll talk to him about how Microsoft made that shift and what it’s meant to the company.
How Startups are Turning Data into Software Gold
with Jenn Knight (Agentsync), Barr Moses (Monte Carlo) and Dan Wright (DataRobot)
- The era of big data is behind us. Today’s leading SaaS startups are working with data, instead of merely fighting to help customers collect information. We’ve collected three leaders from three data-focused startups that are forging new markets to get their insight on how today’s SaaS companies are leveraging data to build new companies, attack new problems and, of course, scale like mad.
What Happens After Your Startup Is Acquired
with Jyoti Bansal (Harness), Nick Mehta (GainSight) and Jewel Burkes Solomon (Partpic)
- We’ll speak to three founders about the emotional upheaval of being acquired and what happens after the check clears and the sale closes. Our panel includes Jyoti Bansal who founded AppDynamics, Jewel Burkes Solomon, who founded Partpic and Nick Mehta from GainSight.
Fireside Chat
with Jay Kreps (Confluent)
- Confluent, the streaming platform built on top of Apache Kafka, was born out of a project at LinkedIn, and rode that from startup to IPO. We’ll speak to co-founder and CEO Jay Kreps to learn about what that journey was like.
We’ll have more sessions and names shortly, so stay tuned. But get excited in the meantime, we certainly are.
Pro tip: Keep your finger on the pulse of TC Sessions: SaaS. Get updates when we announce new speakers, add events and offer ticket discounts.
Why should you carve a day out of your hectic schedule to attend TC Sessions: SaaS? This may be the first year we’ve focused on SaaS, but this ain’t our first rodeo. Here’s what other attendees have to say about their TC Sessions experience.
“TC Sessions: Mobility offers several big benefits. First, networking opportunities that result in concrete partnerships. Second, the chance to learn the latest trends and how mobility will evolve. Third, the opportunity for unknown startups to connect with other mobility companies and build brand awareness.” — Karin Maake, senior director of communications at FlashParking.
“People want to be around what’s interesting and learn what trends and issues they need to pay attention to. Even large companies like GM and Ford were there, because they’re starting to see the trend move toward mobility. They want to learn from the experts, and TC Sessions: Mobility has all the experts.” — Melika Jahangiri, vice president at Wunder Mobility.
TC Sessions: SaaS 2021 takes place on October 27. Grab your team, join your community and create opportunity. Don’t wait — jump on the early bird ticket sale right now.
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Notarize raises $130M, tripling valuation on the back of 600% YoY revenue growth
When the world shifted toward virtual one year ago, one service in particular saw heated demand: remote online notarization.
The ability to get a document notarized without leaving one’s home suddenly became more of a necessity than a luxury. Pat Kinsel, founder and CEO of Boston-based Notarize, worked to get appropriate legislation passed across the country to make it possible for more people in more states to get documents notarized digitally.
That hard work has paid off. Today, Notarize has announced $130 million in Series D funding led by fintech-focused VC firm Canapi Ventures after experiencing 600% year over year revenue growth. The round values Notarize at $760 million, which is triple its valuation at the time of its $35 million Series C in March of 2020. This latest round is larger than the sum of all of the company’s previous rounds to date, and brings Notarize’s total raised to $213 million since its 2015 inception.
A slew of other investors participated in the round, including Alphabet’s independent growth fund CapitalG, Citi Ventures, Wells Fargo, True Bridge Capital Partners and existing backers Camber Creek, Ludlow Ventures, NAR’s Second Century Ventures and Fifth Wall Ventures.
Notarize insists that it “isn’t just a notary company.” Rather, Canapi Ventures partner Neil Underwood described it as the “last mile” of businesses (such as iBuyers, for example).
The company has also evolved to “also bring trust and identity verification” into those businesses’ processes.
Over the past year, Notarize has seen a massive increase in transactions and inked new partnerships with companies such as Adobe, Dropbox, Stripe and Zillow Group, among others. It’s seen big spikes in demand from the real estate, financial services, retail and automotive sectors.
“In 2020, the world rushed to digitize. Online commerce ballooned, and businesses in almost every industry needed to transition to digital basically overnight so they could continue uninterrupted,” Kinsel said. “Notarize was there to help them safely close these deals with trust and convenience.”
The company plans to use its new capital to expand its platform and product and scale “to serve enterprises of all sizes.” It also plans to double down on hiring in the next year.
“Notarize is disrupting outdated business models and technologies, and there’s massive potential, particularly in the financial services space, as more companies will need to offer secure digital alternatives to in-person transactions,” Canapi’s Underwood said.
Notarize’s success comes after a difficult 2019, when the company saw “critical financing” fall through and had to lay off staff, according to Kinsel. Talk about a turnaround story.
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Orca Security raises $210M Series C at a unicorn valuation
Orca Security, an Israeli cybersecurity startup that offers an agent-less security platform for protecting cloud-based assets, today announced that it has raised a $210 million Series C round at a $1.2 billion valuation. The round was led by Alphabet’s independent growth fund CapitalG and Redpoint Ventures. Existing investors GGV Capital, ICONIQ Growth and angel syndicate Silicon Valley CISO Investment also participated. YL Ventures, which led Orca’s seed round and participated in previous rounds, is not participating in this round — and it’s worth noting that the firm recently sold its stake in Axonius after that company reached unicorn status.
If all of this sounds familiar, that may be because Orca only raised its $55 million Series B round in December, after it announced its $20.5 million Series A round in May. That’s a lot of funding rounds in a short amount of time, but something we’ve been seeing more often in the last year or so.
Orca Security co-founders Gil Geron (left) and Avi Shua (right). Image Credits: Orca Security
As Orca co-founder and CEO Avi Shua told me, the company is seeing impressive growth and it — and its investors — want to capitalize on this. The company ended last year beating its own forecast from a few months before, which he noted was already aggressive, by more than 50%. Its current slate of customers includes Robinhood, Databricks, Unity, Live Oak Bank, Lemonade and BeyondTrust.
“We are growing at an unprecedented speed,” Shua said. “We were 20-something people last year. We are now closer to a hundred and we are going to double that by the end of the year. And yes, we’re using this funding to accelerate on every front, from dramatically increasing the product organization to add more capabilities to our platform, for post-breach capabilities, for identity access management and many other areas. And, of course, to increase our go-to-market activities.”
Shua argues that most current cloud security tools don’t really work in this new environment. Many, because they are driven by metadata, can only detect a small fraction of the risks, and agent-based solutions may take months to deploy and still not cover a business’ entire cloud estate. The promise of Orca Security is that it can not only cover a company’s entire range of cloud assets but that it is also able to help security teams prioritize the risks they need to focus on. It does so by using what the company calls its “SideScanning” technology, which allows it to map out a company’s entire cloud environment and file systems.
“Almost all tools are essentially just looking at discrete risk trees and not the forest. The risk is not just about how pickable the lock is, it’s also where the lock resides and what’s inside the box. But most tools just look at the issues themselves and prioritize the most pickable lock, ignoring the business impact and exposure — and we change that.”
It’s no secret that there isn’t a lot of love lost between Orca and some of its competitors. Last year, Palo Alto Networks sent Orca Security a sternly worded letter (PDF) to stop it from comparing the two services. Shua was not amused at the time and decided to fight it. “I completely believe there is space in the markets for many vendors, and they’ve created a lot of great products. But I think the thing that simply cannot be overlooked, is a large company that simply tries to silence competition. This is something that I believe is counterproductive to the industry. It tries to harm competition, it’s illegal, it’s unconstitutional. You can’t use lawyers to take your competitors out of the media.”
Currently, though, it doesn’t look like Orca needs to worry too much about the competition. As GGV Capital managing partner Glenn Solomon told me, as the company continues to grow and bring in new customers — and learn from the data it pulls in from them — it is also able to improve its technology.
“Because of the novel technology that Avi and [Orca Security co-founder and CPO] Gil [Geron] have developed — and that Orca is now based on — they see so much. They’re just discovering more and more ways and have more and more plans to continue to expand the value that Orca is going to provide to customers. They sit in a very good spot to be able to continue to leverage information that they have and help DevOps teams and security teams really execute on good hygiene in every imaginable way going forward. I’m super excited about that future.”
As for this funding round, Shua noted that he found CapitalG to be a “huge believer” in this space and an investor that is looking to invest into the company for the long run (and not just trying to make a quick buck). The fact that CapitalG is associated with Alphabet was obviously also a draw.
“Being associated with Alphabet, which is one of the three major cloud providers, allowed us to strengthen the relationship, which is definitely a benefit for Orca,” he said. “During the evaluation, they essentially put Orca in front of the security leadership at Google. Definitely, they’ve done their own very deep due diligence as part of that.”
Early Stage is the premier ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, product market fit, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included for audience questions and discussion. Use code “TCARTICLE” at checkout to get 20 percent off tickets right here.
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Expel lands $50M Series D as security operations increase in importance
Even in these trying economic times, there are some services that companies can’t do without. Having good security tools is one of them. Expel, a four-year-old startup that offers security operations as a service, announced a $50 million Series D financing today.
CapitalG led the round with participation from existing investors Battery Ventures, Greycroft, Index Ventures, Paladin Capital Group and Scale Venture Partners. The company has now raised almost $117 million, according to PitchBook data.
It’s never easy finding quality security talent to help protect a large organization. The idea behind Expel is to give customers a set of tools to help use automation to reduce the number of people required to keep an organization safe.
Most companies struggle to find experienced security employees, so it’s using automation to solve a real pain point for them. While co-founder and CEO Dave Merkel says you still need to staff the security operations center, you can do it with fewer people with his platform.
“You may have a 24×7 Security Operations Center, but you don’t need the number of people everybody else does to protect your customers because Workbench does all of the heavy lifting for you. So instead of a SOC with 100 people, maybe you’ve got one with 15 people, and that gives tremendous leverage through this platform, and the platform ensures that you can provide high quality security without having to continually grow headcount,” Merkel explained.
Merkel sees the same economy everyone else does, but he believes that companies will continue to invest in security because they have to.
“Security tends to be a need as opposed to a want in many organizations, and so we still do see business happening. We will be using some of the money to continue to invest smartly in sales and marketing, but we’ll just need to be deliberate to make sure that we’re picking the right things that are still effective right now,” he said.
One thing that’s remarkable about this round is that Expel didn’t go looking for this new money. In fact, CapitalG came knocking, according to CapitalG general partner Gene Frantz.
“We sought out Expel, first and foremost. It wasn’t that Expel sought out to raise money and they called a bunch of people. We called them, and that was in response to a bunch of thematic work that we continually do in the security space,” Frantz told TechCrunch.
That work involved three main areas, where Expel happened to check all the boxes. The first was the threat landscape becoming ever more treacherous. The second was information overload from a variety of security products, and finally the dearth of experienced security personnel to deal with the first two problems.
“And so our bet is that this is the company in the space that actually will take on and address these challenges,” Frantz said.
Merkel describes having a company like CapitalG come to him as a humbling experience for him and his co-founders, especially under the current circumstances.
“It’s tremendous validation, but it is also humbling. We’re pretty thankful to be in that position, and we want to make sure that we do the right things to continue to honor the opportunity that we see in front of us.”
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Freshworks raises $150M Series H on $3.5B valuation
Freshworks, a company that makes a variety of business software tools, from CRM to help-desk software, announced a $150 million Series H investment today from Sequoia Capital, CapitalG (formerly Google Capital) and Accel on a hefty $3.5 billion valuation. The late-stage startup has raised almost $400 million, according to Crunchbase data.
The company has been building an enterprise SaaS platform to give customers a set of integrated business tools, but CEO and co-founder Girish Mathrubootham says they will be investing part of this money in R&D to keep building out the platform.
To that end, the company also announced today a new unified data platform called the “Customer-for-Life Cloud” that runs across all of its tools. “We are actually investing in really bringing all of this together to create the “Customer-for-Life Cloud,” which is how you take marketing, sales, support and customer success — all of the aspects of a customer across the entire life cycle journey and bring them to a common data model where a business that is using Freshworks can see the entire life cycle of the customer,” Mathrubootham explained.
While Mathrubootham was not ready to commit to an IPO, he said they are in the process of hiring a CFO and are looking ahead to one day becoming a public company. “We don’t have a definite timeline. We want to go public at the right time. We are making sure that as a company that we are ready with the right processes and teams and predictability in the business,” he said.
In addition, he says he will continue to look for good acquisition targets, and having this money in the bank will help the company fill in gaps in the product set should the right opportunity arise. “We don’t generally acquire revenue, but we are looking for good technology teams both in terms of talent, as well as technology that would help give us a jumpstart in terms of go-to-market.” It hasn’t been afraid to target small companies in the past, having acquired 12 already.
Freshworks, which launched in 2010, has almost 2,500 employees, a number that’s sure to go up with this new investment. It has 250,00 customers worldwide, including almost 40,000 paying customers. These including Bridgestone Tires, Honda, Hugo Boss, Toshiba and Cisco.
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Gusto raises $140 million to go after small business payroll and benefits with more gusto
Gusto, which sells payroll, benefits and human resources management and monitoring services to small businesses, has raised $140 million in its latest round of funding.
The company said it will use the money to add new services to increase payment flexibility for employees. The company launched a new service called Flexible Pay, which gives employees a way to get paid no matter when a company’s pay schedule dictates. It seems sort of like a payday loan, where a percentage of the salary is taken by Gusto for providing money upfront.
The late-stage round was led by T. Rowe Price Associates portfolio, MSD Capital (the family investment fund for Michael Dell), Dragoneer Investment Group and Y Combinator’s Continuity Fund.
Previous investors, including General Catalyst, CapitalG, Kleiner Perkins, 137 Ventures and Emergence Capital, also participated in the round.
The company claims that it processes tens of billions of dollars in payroll and offers a range of benefits, including health insurance, 401(k) plans and college savings plans.
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Looker catches the fancy of CapitalG, Goldman and Geodesic with $81.5M Series D
Business intelligence platform Looker is announcing an $81.5 million Series D today led by CapitalG. Rather than compete in segmented markets against visualization and data preparation startups, Looker wants to own the vertical of business intelligence. The company supports the adoption of enterprise machine learning by providing a source of clean and reliable data. Read More
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