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Edge computing startup Pensando comes out of stealth mode with a total of $278 million in funding
Pensando, an edge computing startup founded by former Cisco engineers, came out of stealth mode today with an announcement that it has raised a $145 million Series C. The company’s software and hardware technology, created to give data centers more of the flexibility of cloud computing servers, is being positioned as a competitor to Amazon Web Services Nitro.
The round was led by Hewlett Packard Enterprise and Lightspeed Venture Partners and brings Pensando’s total raised so far to $278 million. HPE chief technology officer Mark Potter and Lightspeed Venture partner Barry Eggers will join Pensando’s board of directors. The company’s chairman is former Cisco CEO John Chambers, who is also one of Pensando’s investors through JC2 Ventures.
Pensando was founded in 2017 by Mario Mazzola, Prem Jain, Luca Cafiero and Soni Jiandani, a team of engineers who spearheaded the development of several of Cisco’s key technologies, and founded four startups that were acquired by Cisco, including Insieme Networks. (In an interview with Reuters, Pensando chief financial officer Randy Pond, a former Cisco executive vice president, said it isn’t clear if Cisco is interested in acquiring the startup, adding “our aspirations at this point would be to IPO. But, you know, there’s always other possibilities for monetization events.”)
The startup claims its edge computing platform performs five to nine times better than AWS Nitro, in terms of productivity and scale. Pensando prepares data center infrastructure for edge computing, better equipping them to handle data from 5G, artificial intelligence and Internet of Things applications. While in stealth mode, Pensando acquired customers including HPE, Goldman Sachs, NetApp and Equinix.
In a press statement, Potter said “Today’s rapidly transforming, hyper-connected world requires enterprises to operate with even greater flexibility and choices than ever before. HPE’s expanding relationship with Pensando Systems stems from our shared understanding of enterprises and the cloud. We are proud to announce our investment and solution partnership with Pensando and will continue to drive solutions that anticipate our customers’ needs together.”
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Labor leaders and startup founders talk how to build a sustainable gig economy
Over the past few years, gig economy companies and the treatment of their labor force has become a hot button issue for public and private sector debate.
At our recent annual Disrupt event in San Francisco, we dug into how founders, companies and the broader community can play a positive role in the gig economy, with help from Derecka Mehrens, an executive director at Working Partnerships USA and co-founder of Silicon Valley Rising — an advocacy campaign focused on fighting for tech worker rights and creating an inclusive tech economy — and Amanda de Cadenet, founder of Girlgaze, a platform that connects advertisers with a network of 200,000 female-identifying and non-binary creatives.
Derecka and Amanda dove deep into where incumbent gig companies have fallen short, what they’re doing to right the ship, whether VC and hyper-growth mentalities fit into a sustainable gig economy, as well as thoughts on Uber’s new ‘Uber Works’ platform and CA AB-5. The following has been lightly edited for length and clarity.
Where current gig companies are failing
Arman Tabatabai: What was the original promise and value proposition of the gig economy? What went wrong?
Derecka Mehrens: The gig economy exists in a larger context, which is one in which neoliberalism is failing, trickle-down economics is proven wrong, and every day working people aren’t surviving and are looking for something more.
And so you have a situation in which the system we put together to create employment, to create our communities, to build our housing, to give us jobs is dysfunctional. And within that, folks are going to come up with disruptive solutions to pieces of it with a promise in mind to solve a problem. But without a larger solution, that will end up, in our view, exacerbating existing inequalities.
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Symantec’s Sheila Jordan named to Slack’s board of directors
Workplace collaboration software business Slack (NYSE: WORK) has added Sheila Jordan, a senior vice president and chief information officer of Symantec, as an independent member of its board of directors. The hiring comes three months after the business completed a direct listing on the New York Stock Exchange.
Jordan, responsible for driving information technology strategy and operations for Symantec, brings significant cybersecurity expertise to Slack’s board. Prior to joining Symantec in 2014, Jordan was a senior vice president of IT at Cisco and an executive at Disney Destination for nearly 15 years.
With the new appointment, Slack appears to be doubling down on security. In addition to the board announcement, Slack recently published a blog post outlining the company’s latest security strategy in what was likely part of a greater attempt to sway potential customers — particularly those in highly regulated industries — wary of the company’s security processes. The post introduced new features, including the ability to allow teams to work remotely while maintaining compliance to industry and company-specific requirements.
Jordan joins Slack co-founder and chief executive officer Stewart Butterfield, former Goldman Sachs executive Edith Cooper, Accel general partner Andrew Braccia, Nextdoor CEO Sarah Friar, Andreessen Horowitz general partner John O’Farrell, Social Capital CEO Chamath Palihapitiya and former Salesforce chief financial officer Graham Smith on Slack’s board of directors.
“I believe there is nothing more critical than driving organizational alignment and agility within enterprises today,” Jordan said in a statement. “Slack has developed a new category of enterprise software to help unlock this potential and I’m thrilled to now be a part of their story.”
Slack closed up nearly 50% on its first day of trading in June but has since stumbled amid reports of increased competition from Microsoft, which operates a Slack-like product called Teams.
Slack co-founder and chief technology officer Cal Henderson will join us onstage at TechCrunch Disrupt San Francisco next week to discuss the company’s founding, road to the public markets and path forward. Buy tickets here.
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Duo’s Wendy Nather to talk security at TC Sessions: Enterprise
When it comes to enterprise security, how do you move fast without breaking things?
Enter Duo’s Wendy Nather, who will join us at TC Sessions: Enterprise in San Francisco on September 5, where we will get the inside track on how to keep enterprise networks secure without slowing growth.
Nather is head of advisory CISOs at Duo Security, a Cisco company, and one of the most respected and trusted voices in the cybersecurity community as a regular speaker on a range of topics, from threat intelligence to risk analysis, incident response, data security and privacy issues.
Prior to her role at Duo, she was the research director at the Retail ISAC, and served as the research director of the Information Security Practice at independent analyst firm 451 Research.
She also led IT security for the EMEA region of the investment banking division of Swiss Bank Corporation — now UBS.
Nather also co-authored “The Cloud Security Rules,” and was listed as one of SC Magazine’s Women in IT Security “Power Players” in 2014.
We’re excited to have Nather discuss some of the challenges startups and enterprises face in security — threats from both inside and outside the firewall. Companies large and small face similar challenges, from keeping data in to keeping hackers out. How do companies navigate the litany of issues and threats without hampering growth?
Who else will we have onstage, you ask? Good question! We’ll be joined by some of the biggest names and the smartest and most prescient people in the industry, including Bill McDermott at SAP, Scott Farquhar at Atlassian, Julie Larson-Green at Qualtrics, Aaron Levie at Box and Andrew Ng at Landing AI and many, many more. See the whole agenda right here.
Early-bird tickets are on sale right now! For just $249 you can see Nather and these other awesome speakers live at TC Sessions: Enterprise. But hurry, early-bird sales end on August 9; after that, prices jump up by $100. Book here.
If you’re a student on a budget, don’t worry, we’ve got a super-reduced ticket for just $75 when you apply for a student ticket right here.
Enterprise-focused startups can bring the whole crew when you book a Startup Demo table for just $2,000. Each table gives you a primo location to be seen by attendees, investors and other sponsors, in addition to four tickets to enjoy the show. We only have a limited amount of demo tables and we will sell out. Book yours here.
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Diving deep into Africa’s blossoming tech scene
Jumia may be the first startup you’ve heard of from Africa. But the e-commerce venture that recently listed on the NYSE is definitely not the first or last word in African tech.
The continent has an expansive digital innovation scene, the components of which are intersecting rapidly across Africa’s 54 countries and 1.2 billion people.
When measured by monetary values, Africa’s tech ecosystem is tiny by Shenzen or Silicon Valley standards.
But when you look at volumes and year over year expansion in VC, startup formation, and tech hubs, it’s one of the fastest growing tech markets in the world. In 2017, the continent also saw the largest global increase in internet users—20 percent.
If you’re a VC or founder in London, Bangalore, or San Francisco, you’ll likely interact with some part of Africa’s tech landscape for the first time—or more—in the near future.
That’s why TechCrunch put together this Extra-Crunch deep-dive on Africa’s technology sector.
Tech Hubs
A foundation for African tech is the continent’s 442 active hubs, accelerators, and incubators (as tallied by GSMA). These spaces have become focal points for startup formation, digital skills building, events, and IT activity on the continent.
Prominent tech hubs in Africa include CcHub in Nigeria, Pan-African incubator MEST, and Kenya’s iHub, with over 200 resident members. More of these organizations are receiving funds from DFIs, such as the World Bank, and aid agencies, including France’s $76 million African tech fund.
Blue-chip companies such as Google and Microsoft are also providing money and support. In 2018 Facebook opened its own Hub_NG in Lagos with partner CcHub, to foster startups using AI and machine learning.
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Unveiling its latest cohort, Alchemist announces $4 million in funding for its enterprise accelerator
The enterprise software and services-focused accelerator Alchemist has raised $4 million in fresh financing from investors BASF and the Qatar Development Bank, just in time for its latest demo day unveiling 20 new companies.
Qatar and BASF join previous investors, including the venture firms Mayfield, Khosla Ventures, Foundation Capital, DFJ and USVP, and corporate investors like Cisco, Siemens and Juniper Networks.
While the roster of successes from Alchemist’s fund isn’t as lengthy as Y Combinator, the accelerator program has launched the likes of the quantum computing upstart Rigetti, the soft-launch developer tool LaunchDarkly and drone startup Matternet .
Some (personal) highlights of the latest cohort include:
- Bayware: Helmed by a former head of software-defined networking from Cisco, the company is pitching a tool that makes creating networks in multi-cloud environments as easy as copying and pasting.
- MotorCortex.AI: Co-founded by a Stanford engineering professor and a Carnegie Mellon roboticist, the company is using computer vision, machine learning and robotics to create a fruit packer for packaging lines. Starting with avocados, the company is aiming to tackle the entire packaging side of pick and pack in logistics.
- Resilio: With claims of a 96% effectiveness rate and $35,000 in annual recurring revenue with another $1 million in the pipeline, Resilio is already seeing companies embrace its mobile app that uses a phone’s camera to track stress levels and application-based prompts on how to lower it, according to Alchemist.
- Operant Networks: It’s a long-held belief (of mine) that if computing networks are already irrevocably compromised, the best thing that companies and individuals can do is just encrypt the hell out of their data. Apparently Operant agrees with me. The company is claiming 50% time savings with this approach, and have booked $1.9 million in 2019 as proof, according to Alchemist.
- HPC Hub: HPC Hub wants to democratize access to supercomputers by overlaying a virtualization layer and pre-installed software on underutilized super computers to give more companies and researchers easier access to machines… and they’ve booked $92,000 worth of annual recurring revenue.
- DinoPlusAI: This chip developer is designing a low latency chip for artificial intelligence applications, reducing latency by 12 times over a competing Nvidia chip, according to the company. DinoPlusAI sees applications for its tech in things like real-time AI markets and autonomous driving. Its team is led by a designer from Cadence and Broadcom and the company already has $8 million in letters of intent signed, according to Alchemist.
- Aero Systems West: Co-founders from the Air Force’s Research Labs and MIT are aiming to take humans out of drone operations and maintenance. The company contends that for every hour of flight time, drones require seven hours of maintenance and check ups. Aero Systems aims to reduce that by using remote analytics, self-inspection, autonomous deployment and automated maintenance to take humans out of the drone business.
Watch a live stream of Alchemist’s demo day pitches, starting at 3PM, here.
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Cisco open sources MindMeld conversational AI platform
Cisco announced today that it was open-sourcing the MindMeld conversation AI platform, making it available to anyone who wants to use it under the Apache 2.0 license.
MindMeld is the conversational AI company that Cisco bought in 2017. The company put the technology to use in Cisco Spark Assistant later that year to help bring voice commands to meeting hardware, which was just beginning to emerge at the time.
Today, there is a concerted effort to bring voice to enterprise use cases, and Cisco is offering the means for developers to do that with the MindMeld tool set. “Today, Cisco is taking a big step towards empowering developers with more comprehensive and practical tools for building conversational applications by open-sourcing the MindMeld Conversational AI Platform,” Cisco’s head of machine learning Karthik Raghunathan wrote in a blog post.
The company also wants to make it easier for developers to get going with the platform, so it is releasing the Conversational AI Playbook, a step-by-step guide book to help developers get started with conversation-driven applications. Cisco says this is about empowering developers, and that’s probably a big part of the reason.
But it would also be in Cisco’s best interest to have developers outside of Cisco working with and on this set of tools. By open-sourcing them, the hope is that a community of developers, whether Cisco customers or others, will begin using, testing and improving the tools; helping it to develop the platform faster and more broadly than it could, even inside an organization as large as Cisco.
Of course, just because they offer it doesn’t necessarily automatically mean the community of interested developers will emerge, but given the growing popularity of voice-enabled used cases, chances are some will give it a look. It will be up to Cisco to keep them engaged.
Cisco is making all of this available on its own DevNet platform starting today.
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Harness hauls in $60M Series B investment on $500M valuation
Series B rounds used to be about establishing a product-market fit, but for some startups the whole process seems to be accelerating. Harness, the startup founded by AppDynamics co-founder and CEO Jyoti Bansal is one of those companies that is putting the pedal the metal with his second startup, taking his learnings and a $60 million round to build the company much more quickly.
Harness already has an eye-popping half billion dollar valuation. It’s not terribly often I hear valuations in a Series B discussion. More typically CEOs want to talk growth rates, but Bansal volunteered the information, excited by the startup’s rapid development.
The round was led by IVP, GV (formerly Google Ventures) and ServiceNow Ventures. Existing investors Big Labs, Menlo Ventures and Unusual Ventures also participated. Today’s investment brings the total raised to $80 million, according to Crunchbase data.
Bansal obviously made a fair bit of money when he sold AppDynamics to Cisco in 2017 for $3.7 billion and he could have rested after his great success. Instead he turned his attention almost immediately to a new challenge, helping companies move to a new continuous delivery model more rapidly by offering Continuous Delivery as a Service.
As companies move to containers and the cloud, they face challenges implementing new software delivery models. As is often the case, large web scale companies like Facebook, Google and Netflix have the resources to deliver these kinds of solutions quickly, but it’s much more difficult for most other companies.
Bansal saw an opportunity here to package continuous delivery approaches as a service. “Our approach in the market is Continuous Delivery as a Service, and instead of you trying to engineer this, you get this platform that can solve this problem and bring you the best tooling that a Google or Facebook or Netflix would have,” Basal explained.
The approach has gained traction quickly. The company has grown from 25 employees at launch in 2017 to 100 today. It boasts 50 enterprise customers including Home Depot, Santander Bank and McAfee.
He says that the continuous delivery piece could just be a starting point, and the money from the round will be plowed back into engineering efforts to expand the platform and solve other problems DevOps teams face with a modern software delivery approach.
Bansal admits that it’s unusual to have this kind of traction this early, and he says that his growth is much faster than it was at AppDynamics at the same stage, but he believes the opportunity here is huge as companies look for more efficient ways to deliver software. “I’m a little bit surprised. I thought this was a big problem when I started, but it’s an even bigger problem than I thought and how much pain was out there and how ready the market was to look at a very different way of solving this problem,” he said.
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Homeland Security warns of security flaws in enterprise VPN apps
Several enterprise virtual private networking apps are vulnerable to a security bug that can allow an attacker to remotely break into a company’s internal network, according to a warning issued by Homeland Security’s cybersecurity division.
An alert was published Friday by the government’s Cybersecurity and Infrastructure Security Agency following a public disclosure by CERT/CC, the vulnerability disclosure center at Carnegie Mellon University.
The VPN apps built by four vendors — Cisco, Palo Alto Networks, Pulse Secure and F5 Networks — improperly store authentication tokens and session cookies on a user’s computer. These aren’t your traditional consumer VPN apps used to protect your privacy, but enterprise VPN apps that are typically rolled out by a company’s IT staff to allow remote workers to access resources on a company’s network.
The apps generate tokens from a user’s password and are stored on their computer to keep the user logged in without having to reenter their password every time. But if stolen, these tokens can allow access to that user’s account without needing their password.
But with access to a user’s computer — such as through malware — an attacker could steal those tokens and use them to gain access to a company’s network with the same level of access as the user. That includes company apps, systems and data.
So far, only Palo Alto Networks has confirmed its GlobalProtect app was vulnerable. The company issued a patch for both its Windows and Mac clients.
Neither Cisco nor Pulse Secure have patched their apps. F5 Networks is said to have known about storing since at least 2013 but advised users to roll out two-factor authentication instead of releasing a patch.
CERT warned that hundreds of other apps could be affected — but more testing was required.
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Zoom addresses CFO’s past workplace conduct ahead of IPO
Zoom, the only profitable unicorn in line to go public, priced its initial public offering at between $28 and $32 per share Monday morning. The video conferencing business plans to trade on the Nasdaq under the ticker symbol “ZM.”
Zoom, valued at $1 billion in 2017, initially filed to go public in March. According to its amended IPO filing, the company will raise up to $348.1 million by selling 10.9 million Class A shares. The offering will grant Zoom a fully diluted market value of $8.7 billion, a more than 8x increase to its latest private market valuation.
Although the company has garnered praise for its stellar financials — Zoom posted $330 million in revenue in the year ending January 31, 2019, a remarkable 2x increase year-over-year, with a gross profit of $269.5 million — the road to IPO hasn’t been without hiccups.
The company’s founder and chief executive officer Eric Yuan last night published an open letter concerning the conduct of Zoom’s chief financial officer Kelly Steckelberg. According to the letter, Zoom was recently informed by an anonymous source that Steckelberg had an “undisclosed, consensual relationship” during her tenure at a previous employer.
Steckelberg was most recently the CEO of the online dating site Zoosk; before that, she was a senior director in consumer finance at Cisco . The letter does not specify where the relationship took place, when or with whom.
Losing a CFO mere days before an IPO would have been a major loss for Zoom. CFOs often become the face of the IPO, handling the grueling tasks associated with crafting an IPO prospectus, leading the roadshow and more, while also maintaining day-to-day financial operations.
Yuan writes that the Zoom’s board of directors conducted a full investigation into the matter and determined that Steckelberg would stay on as Zoom’s CFO: “Kelly expressed regret for what transpired at her former employer, took ownership for the situation, and made clear to us that she had learned valuable lessons from the experience,” he wrote.
“We appreciated Kelly’s openness and candor during this process,” he continued. “It is clear that this matter related only to circumstances at her former employer. During Kelly’s tenure at Zoom, she has been an incredible contributor, as well as a model steward of our culture, values, and high standards since joining the Company.”
We reached out to Zoosk for comment. Zoom declined to comment further.
Zoom, expected to make the final call on its IPO price next Wednesday, will likely price at the top of the range and see a clean pop on its first day on the markets given its clean track record and positive financials. The business was founded in 2011 by Eric Yuan, an early engineer at WebEx, which sold to Cisco for $3.2 billion in 2007. Before launching Zoom, he spent four years at Cisco as its vice president of engineering.
Zoom has raised $145 million to date from investors, including Emergence Capital, which owns a 12.2 percent pre-IPO stake; Sequoia Capital (11.1 percent pre-IPO stake); Digital Mobile Venture (8.5 percent), a fund affiliated with former Zoom board member Samuel Chen; and Bucantini Enterprises Limited (5.9 percent), a fund owned by Li Ka-shing, a Chinese billionaire and among the richest people in the world.
Morgan Stanley, JP Morgan and Goldman Sachs are leading its offering.
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