eCommerce
Auto Added by WPeMatico
Tapcart, a ‘Shopify for mobile apps,’ raises a $50 million Series B
Shopify changed the e-commerce landscape by making it easier for merchants to set up their websites both quickly and affordably. A startup called Tapcart is now doing the same for mobile commerce.
The company, which has referred to itself as the “Shopify for mobile apps,” today powers the shopping apps for top brands, including Fashion Nova, Pier One Imports, The Hundreds, Patta, Culture Kings, and thousands more. Following a year of 3x revenue growth, in part driven by the pandemic, Tapcart is today announcing the close of a $50 million round of Series B funding, led by Left Lane Capital. Having clearly taken notice of Tapcart’s traction with its own merchant base, Shopify is among the round’s participants.
Other investors in the round include SignalFire, Greycroft, Act One Ventures and Amplify LA.
Tapcart’s co-founders, Sina Mobasser and Eric Netsch, have worked in the mobile app industry for years. Mobasser’s previous company, TestMax, offered one of the first test prep courses on iOS, while Netsch had more recently worked on the agency side to create mobile and digital experiences for brands. Together, the two realized the potential in helping online merchants bring their businesses to mobile, as easily as they were able to go online with Shopify.
Tapcart’s founders Sina Mobasser and Eric Netsch at their Santa Monica HQ. Image Credits: Tapcart
“Now, you can launch an app on our platform in a matter of weeks, where historically it would take up to a year if you wanted to custom build an app,” explains Mobasser. “And you can do it for a low monthly fee.”
Tapcart’s platform itself offers a simple drag-and-drop builder that allows anyone to create a mobile app for their existing Shopify store using tools to design their layout, customize the product detail pages, integrate checkout options, include product reviews, and even optionally add other branded content, like blogs, lookbooks, videos (including live video) and more. Everything is synced directly from Shopify to the app in real-time, so the merchant’s inventory, products and collections are all kept up-to-date. That’s a big differentiator from some rivals, which require duplicate sets of data and data transformation.
Tapcart, meanwhile, leverages all of Shopify’s APIs and SDKs to create a native application that works with Shopify’s existing data structures.
Image Credits: Tapcart
This tight integration with Shopify helps Tapcart because it doesn’t have to focus on the e-commerce infrastructure, as the way things are structured around inventory and collections are roughly 90% the same across brands. Instead, Tapcart focuses on the 10% that makes brands stand out from one another, which includes things like branding, content and design. Its CMS allows merchants to create exclusive content, change the colors and fonts, add videos and more to make the app look and feel fully customized.
Beyond the mobile app creation aspect to its business, Tapcart also helps merchants automate their marketing. Through the Tapcart platform, merchants can communicate with their customers in real-time using push notifications that can alert them to new sales, to encourage them to return to abandoned carts, or any other promotions. The marketing campaigns can be automated, as well, which helps merchants schedule their upcoming launches and product drops ahead of time. The company claims these push notifications deliver click-through rates that are 72% higher than a traditional email or SMS text because of their interactivity and branding.
Image Credits: Tapcart
The platform has quickly found traction with SMB to mid-market enterprise customers who have reached the stage of their business where it makes sense for them to double down on customer retention and conversion and optimize their mobile workflow.
“Our sweet spot is when you have maybe a couple hundred customers in your database,” notes Netsch. “That’s a perfect time to now focus less on the paid acquisition portion of your business and more on how to retain and engage those existing customers, [so they’ll] shop more and have a better experience,” he says.
During the past 12 months, over $1.2 billion in merchant sales have flowed through Tapcart’s platform. And in 2020, Tapcart’s recurring revenue increased by 3x, as mobile apps grew even faster during the pandemic, which had increased consumer mobile screen time by 20% year-over-year from 2019. Mobile commerce spending also grew 55% year-over-year, topping $53 billion globally during the holiday shopping season, the company says. Tapcart’s own merchants saw mobile app orders at a rate of more than once-per-second during this time, and it believes these trends will continue even as the pandemic comes to an end.
Today, Tapcart generates revenue by charging a flat SaaS (software-as-a-service) fee, which differentiates it from a number of competitors who charge a percent of the merchant’s total sales.
Image Credits: Tapcart
With the additional funding, Tapcart plans to focus on its goal of becoming a vertically integrated mobile commerce suite of tools, which more recently includes support for iOS App Clips. It will also soon release an upgraded version of its insights analytics platform and will offer scripts that merchants can install on their mobile websites to compare what works on the site versus what works in the app.
Later this year, Tapcart plans to launch a full marketing automation product that will allow brands to automate and personalize their notifications even further. And it plans to invest in market expansions to make its product better designed for mobile, global commerce.
The funding will allow Santa Monica-based Tapcart to hire another 200 people over the next 24 months, up from the 70 it has currently. These will include new additions across time zones and even in markets like Australia and Europe as it moves toward global expansion.
Shopify’s investment will open up a number of new opportunities as well, including on product, engineering, business strategy and partnerships. It will also help to get Tapcart in front of Shopify’s 1.7 million global merchants.
“There’s still quite a lot of merchants that need better mobile experiences, but have yet to really double down on the mobile effort and get something like a native app,” notes Netsch. “There’s a lot of different ways and methods that merchants are experimenting with mobile growth, and we’re trying to offer all of the best parts of that in a single platform. So there’s tons of expansion for Tapcart to do just that with the existing target addressable market,” he says.
“We believe brands must be where their customers are, and today that means being on their phones,” said Satish Kanwar, VP of product acceleration at Shopify, in a statement. “Tapcart helps merchants create mobile-first shopping experiences that customers love, reinforcing Shopify’s mission to make commerce better for everyone. We look forward to seeing Tapcart expand its success on Shopify with the more than 1.7 million merchants on our platform today.”
Powered by WPeMatico
To win post-pandemic, startups need remote-first growth teams
Growth leaders used to build key relationships across a company while working together in a real-life office. Those relationships could carry over through the pandemic, but let’s say you’re a new company and you’re remote-first.
How do you build this complex collaboration from scratch?
Growth marketer and investor Susan Su tells us that the solution is not just more software tools. In the interview below, she says that after the pandemic, startup founders will need to develop a mentality that places growth at the center of company strategy.
Consultants and agencies can be great additions to this effort, especially if they have previously solved the types of problems you face. (In fact, TechCrunch is asking founders who have worked with growth marketers to share a recommendation in this survey. We’ll use your answers to find more experts to interview.)
Su is currently the head of portfolio strategy for Sound Ventures, previously a growth leader at Stripe and the first hire at Reforge. She also shared a few thoughts on market opportunities after the pandemic in the full interview below. E-commerce is mainstream for good, she says, even as we all try to step away from screens more often. However, many social and mobile sectors are mature, and it’s going to be even harder for startups to compete as real-world activities absorb more time.
Don’t forget: Susan Su will also appear at our Early Stage virtual event on July 8 (and answer questions directly).
How are you seeing startups manage changes in user engagement as more people exit pandemic lockdowns and adjust their daily lives?
As we exit the pandemic, I expect that we’ll see a natural and obvious spike in some consumer activity that will roll up to midsized businesses and enterprises. Just like with the onset of the pandemic, we’ll see uneven results across sectors:
E-commerce boomed during the pandemic but was really an augmentation of an already-accelerating trend toward digital commerce and streamlined logistics. I don’t think we backtrack from e-commerce because habit formation around online shopping has been building for years; we would be backtracking to an age long before 2020, and that’s not going to happen.
New social-mobile experiences also boomed during the pandemic, but there’s still a valid question around whether 15 months or so is enough time to become part of the ingrained infrastructure of daily life. We are living in an age of mature platforms, so every new service is stealing time away from an existing service. As with pre-pandemic growth, their success rests upon fast-accumulating network effects and great, sticky core product experience. Now that we have parks, friends and dinners out calling to us again, it’s a real test of how compelling some of these new value propositions really are, and whether they can continue to demonstrate their relevance in a more hybridized online-offline world.
That said, the pandemic was an enormous constraint on human society and [the] economy, and these kinds of constraints often breed innovation that doesn’t go away. We will evolve, but we can never go back. It sounds cheesy but it’s true.
Some aspects of the pandemic, like remote work, appear to have radically changed certain industries. How will these societal changes impact how the typical startup thinks about growth?
Growth will always be growth — that is, a process of iterative experimentation to identify and solve customer problems, and then scale those solutions in order to reach and convert bigger and bigger audiences. Platform changes like iOS 14 or Facebook’s periodic algorithm adjustments will have a bigger impact in the near term on the technical functioning of growth, and these aren’t specifically pandemic-related.
One area to watch is how growth teams are built and operated. Growth is a horizontal function that touches many different parts of the org, including product, engineering, marketing, comms and design. Many startup teams have already been working with collaboration tools even while they sat in the same office, but growth is about more than just using tools. The most effective growth leaders succeed by building relationships across the organization; it’s like the fable of Stone Soup — you’re creating this meal that will feed everyone, but you also need each person to bring a pinch of salt, or a dash of pepper, or one carrot, and that requires socialization and relationship-building. I’ll be very interested to see how new growth leaders onboard remote-only teams and what approaches they take to this “networking” need within the function.
From the days of growth hacking on social platforms, growth marketing is now an established part of the world. But it’s not necessarily the main expertise of a startup founder, even if it needs to be. So, how should they think about addressing growth marketing in 2021? What are the essentials they should do in their roles?
Every founder needs to have a growth mentality. They don’t need to memorize all the right buttons to push in an ads dashboard, but they need to be familiar and comfortable with the core work of gap-finding. That said, founders are by definition entrepreneurial — their company exists because they saw an opportunity that no one else did, and this is the fundamental work of growth as well.
Founders will fail if they adopt a mentality that someone else can or should do it for them. The founder’s job is to supply ambition and opinions, and then magnetize high-quality talent to come and pull the levers and bring their creative vision to life. There are many people who can do growth marketing — that is, they know how the platforms work, they understand the rules and the playbooks. But there are very few who can come up with truly visionary strategies that change the game altogether — those people become founders, and those companies become household names. So for a founder, I’d say the most important growth work is to continue to know your market and customer better than anyone else in the whole world, have an opinion about what’s missing, and work to bring the best talent to come in alongside you and be a thought partner, not just a button pusher.
Have you worked with a talented individual or agency who helped you find and keep more users?
Respond to our survey and help us find the best startup growth marketers!
With limited resources, how should early-stage companies think about what to focus on?
This is going to depend on the goals of your company. Are you planning to raise money and need to demonstrate certain KPIs? Are you bootstrapping and need to keep the lights on? Resources should always be allocated to the most strategic purposes, with the longest-term view you can afford. For some companies, this could mean forgoing revenue to focus on viral or word-of-mouth-driven user acquisition to demonstrate to future investors that there’s something special here. For other companies, perhaps in lower volume categories like enterprise, it’s about bringing a few strategic logos into the family as a signal to later customers and other stakeholders, including future employees and investors.
One thing that early-stage companies should always be focused on is building a top-shelf employer brand. You will only ever be as good as the talent you attract to your company, and interestingly growth can actually play a role in this. The best designers, engineers and product people are often flowing toward the companies that have the best growth. In that way, it’s a highly strategic role and function.
What do startups continue to get wrong?
You can’t truly outsource growth or any other core function; you can’t tack on customer acquisition after product development. At the end of the day, if you really think about it, all a company is, is a customer-acquisition engine. This needs to be core; wake up every day and think about growth, not just to hit revenue or user KPIs, but to build the company that the best people are clamoring to work at. It’s not about finding someone sufficient to solve your near-term problems; it’s about framing problems in a way that’s so compelling to the most creative, hardest-working people so that they can’t get it out of their heads. Go for talent moonshots, and figure out how to close them. The rest will fall in line from there.
When should a founder feel comfortable getting help from an outside expert or agency?
Anytime. Agencies are great. They are an extension of your talent, and the best agencies aren’t selling you — they have to be sold on your problem because they have their pick of companies just like yours. That’s the agency or outside expert you want to work with, because they’ll have a priceless perspective from the other best-in-class founders and teams they’ve worked with that they can bring to your challenge. Any agency can run Facebook ads (it’s not rocket science), but you want to find the team that’s solved the gnarliest problems for your hero companies. Then you’ll get not just an ads manager, but a teacher.
Powered by WPeMatico
Uberall raises $115M, acquires MomentFeed to scale up its location marketing services
Location-based services may have had their day as a salient category for hot apps or innovative tech leveraging the arrival of smartphones, but that’s largely because they are now part of the unspoken fabric of how we interact with digital services every day: We rely on location-specific information when we are on search engines, when we are using maps or weather apps, when we are taking and posting photos and more.
Still, there remain a lot of gaps in how location information links up with accurate information, and so today a company that’s made it its business to address that is announcing some funding as it scales up its service.
Uberall, which works with retailers and other brick-and-mortar operators to help them update and provide more accurate information about themselves across the plethora of apps and other services that consumers use to discover them, is announcing $115 million in funding. Alongside that, the Berlin startup is making an acquisition: it’s buying MomentFeed, a location marketing company based out of Los Angeles, to continue scaling its business.
The funding is being led by London-based investor Bregal Milestone, with Level Equity, United Internet and Uberall management also participating. From what we understand from sources, the funding values Uberall at around $500 million, and the deal for MomentFeed was made for between $50 million and $60 million.
The business combination is building way more scale into the platform: Uberall said that together they will manage the online presence for 1.35 million business locations, making the company the biggest in the field, with customers including the gas station operator BP, KFC, clothes and food chain Marks and Spencer, McDonald’s and Pizza Hut.
Florian Hübner, the CEO and co-founder of Uberall, noted in an interview that the companies have quite a lot of overlap, and in fact prior to the deal being made the companies worked together closely in the U.S. market, but all the same, MomentFeed has built some specific technology that will enrich the wider platform, such as a particularly strong tool for measuring sentiment analysis.
“Managing the online presence” is not a company’s website, nor is it its apps, but may nevertheless be its most common digital touchpoints when it comes to actually engaging with consumers online. It includes how those companies appear on local listings services like Yelp or TripAdvisor, or mapping apps like Google’s — which provide not just listings information like addresses and opening hours but also customer reviews — or social apps or location-based advertising. Altogether, when you are considering a company with multiple locations and the multiple touchpoints a consumer might use, it ends up being a complicated mess of places that need to be managed and kept up to date.
“We are the catalyst for this huge ecosystem where we enable the brands to use everything that the other tech platforms are offering in the best possible way,” Hübner told me. The tech platforms, meanwhile, are willing to work with middleware companies like Uberall to make the information on their services more accurate and complete by connecting with businesses when they have not managed to do so directly on their own. (And if you’ve ever been caught out by the wrong opening times on a Google Maps entry, or any other entry or piece of information elsewhere, you know this is an issue.)
And of course expecting any company with potentially hundreds of locations to provide the right details without a tool is also a nonstarter. “Casually updating 100,000 profiles is super hard,” Hübner said.
It also provides services to update information about vaccine and COVID-19 testing clinics, as well as other essential services that also have to contend with the same variations in location, opening hours and customer feedback as any other business on a site like Google Maps.
Altogether, Uberall has built out a platform that essentially connects up all of those end points, so that an Uberall customer can use a dashboard to provide updates that populate automatically everywhere, and also to read and respond to reviews.
Conversely, Uberall also can look out for instances where a company is being unofficially represented, or misrepresented, and locks those down. Alongside those, it has built a location-based marketing service that also serves ads for its customers. It is somewhat akin to social media management tools, which let you manage social media accounts and social media marketing campaigns, except that it’s covering a much more fragmented and disparate set of places where a company might appear online.
The bigger picture here is that just as location-based marketing is a fragmented business, so is the business of providing services to manage it. This move reduces down that field a little more and improves the efficiency of scaling such services.
“As we saw the market trending towards consolidation, we considered several potential companies to merge with. Uberall was by far our most preferred,” said MomentFeed CEO Nick Hedges in a statement. “This combination makes enormous strategic sense for our customers, who represent the who’s-who of leading U.S. omni channel brands. It helps accelerate our already rapid pace of innovation, giving customers an even greater edge in the hyper-competitive world of ’Near Me’ Marketing.” After the deal closes, Hedges will become Uberall’s chief strategy officer and EVP for North America.
“We are thrilled to partner with the Uberall team for this next phase of growth. Our strategic investment will significantly accelerate Uberall’s ambition to become the leading ‘Near Me’ Customer Experience platform worldwide. Uberall’s differentiated full-suite solution is unsurpassed by competition in terms of integration and functionality, providing customers with a real edge to reach, interact with, and convert online customers. We look forward to supporting Florian, Nick and their talented team to deliver on their exciting innovation and expansion roadmap,” said Cyrus Shey, managing partner of Bregal Milestone, in a statement.
Powered by WPeMatico
Fresha raises $100M for its beauty and wellness booking platform and marketplace
Beauty and wellness businesses have come roaring back to life with the decline of COVID-19 restrictions, and a startup that’s built a platform that caters to the many needs of small enterprises in the industry today is announcing a big round of funding to grow with them.
Fresha — a multipurpose commerce tool for independent wellness and beauty businesses such as hair, nail and skin salons, yoga instructors and more, based first and foremost around a completely free subscription platform for those businesses to schedule bookings from customers — has picked up $100 million.
Fresha plans to use the funds to expand the list of countries where it operates, to grow the categories of companies that use its services (mental health practitioners is one example; fitness is another) and to build more services complementing what it already provides, helping customers do their work by providing them with more insights and data about what they do already. It will also be making acquisitions to expand its customer base.
General Atlantic is leading this Series C, with Huda Kattan, Michael Zeisser of FMZ Ventures and Jonathan Green of Lugard Road Capital also participating, along with past investors Partech, Target Global and FJ Labs.
Fresha has raised $132 million to date, and it’s not disclosing its valuation. But as a point of reference, when it closed its Series B (as Shedul; the company rebranded in February 2020), it was valued at $105 million.
Chances are that figure is significantly higher now.
Fresha’s current range of services include a free-to-use platform for booking appointments; free software for managing accounts; a payments service that includes both a physical point of sale and digital interface; and a wider marketplace both to provide goods to the businesses (B2B); and for the businesses to sell goods to customers (B2C).
The London-based company has 50,000 business customers and 150,000 stylists and professionals in 120+ countries (mostly in the U.K., the U.S., Canada, Australia, New Zealand and Europe), with some 250 million appointments booked to date.
And while many businesses did have to curtail how they operated (and in some countries had to stop operating altogether), Fresha found that it was attracting a lot of new business in part because of its “free” model that meant customers didn’t have to pay to maintain a booking platform at a time when they weren’t taking bookings, but could use Fresha to generate revenues in other ways (such as through the sale of goods, vouchers for future services and more.)
So in a year when you might have thought that a company based around providing services to industries that were hard hit by COVID would have also been hard-hit, in fact Fresha saw a 30x increase in card payment transactions versus the year before, and more than $12 billion worth of booking appointments made on its platform.
In a market that is very crowded with tech companies building platforms to book beauty (and other) services and to manage the business of independent retailers — they include giants like Lightspeed POS, as well as smaller players like Booksy (which also recently raised) and StyleSeat, but also players like Square and PayPal, and many others — the core of Fresha’s offering is a booking platform built as a totally free product.
Why free? To attract more users to its other services (such as payments, which do come at a price), and because co-founders William Zeqiri (CEO) and Nick Miller (product chief) — pictured above, respectively left and right — think this the only way to build a business like this in a crowded market.
“We believe that software is a commodity,” said Zeqiri in an interview. “A lot of our competitors are beating each other on price to the bottom. We wanted to consolidate the supply side of the software, gather data about the businesses, how they use what they use.”
That data led, first, to identifying the need for and building out software and launching its B2B and B2C marketplaces, and the idea is that it will likely lead to more products as it continues to mature, whether it’s better analytics for its current customers so that they can better price or develop their services accordingly, or entirely new tools for new categories of users.
Meanwhile, the services that it already provides, like payments, have taken off like a shot, not least because they’ve served a need for any virtual transactions, like selling vouchers or items.
Miller noted that while a lot of its customers actually interface with tech with a lot of reluctance — they are the essence of “physical” retailers when you think about it — they also found themselves having to use more digital services simply because of circumstances. “Looking back at what happened, tech adoption accelerated for our customers,” said Miller. He said that current customers usage for the point-of-sale systems and online payments is roughly equal.
Looking ahead, Fresha’s investor list is notable for its strategic mix and might shed some light on how it grows. Kattan, a “beauty influencer” and the founder of Huda Beauty, is investing by way of HB Investments, a strategic venture arm; while Zeisser’s FMZ focuses on “experience economy” investments today, but he himself has a long history working at tech companies building marketplaces, including years with Alibaba as head of its U.S. investment practice. These speak to areas where Fresha is likely interested in expanding its reach — more marketplace activity; and perhaps more social media angles and exposure for its customers at a time when social media really has become a key way for beauty and wellness businesses to market themselves.
“Fresha has emerged as a leader powering the beauty and wellness industry,” said Aaron Goldman, Global co-head of financial services and managing director at General Atlantic, in a statement. “William, Nick and the Fresha team have built a product that is resonating with the market and creating long-term value through the intersection of its payments, software and marketplace offerings. We are thrilled to be partnering with the company and believe Fresha has significant opportunity to further scale its innovative platform.”
“I’ve witnessed firsthand the positive impact Fresha has for beauty entrepreneurs,” added Kattan. “The company is a force for good in the growing community of beauty professionals around the globe, who are increasingly adopting a self-employed approach. By making top business software accessible without any subscription fees, Fresha lets professionals focus on what they do best — offering great experiences for their customers.”
Powered by WPeMatico
Payments giant Stripe launches Stripe Tax to integrate sales tax calculations for 30+ countries
On the heels of acquiring sales tax specialist TaxJar in April, today Stripe is making another big move in the area of tax. The $95 billion payments behemoth is launching a new product called Stripe Tax, which will provide automatic, updated sales tax calculations (covering sales tax, VAT and GST) and related accounting services to Stripe payments customers initially in some 30 countries and across the U.S.
Stripe Tax is a separate service from TaxJar, but the two are not unconnected. As Stripe Tax was being built out of Stripe’s offices in Dublin over the last several months, Stripe’s business lead for EMEA Matt Henderson told me that the team had identified TaxJar as a strong company in the field. That ultimately led to M&A between them.
Sales tax — and specifically a more seamless way to deal with charging and tracking sales tax — is a painful issue for people doing business online.
Digital and physical goods are taxed in over 130 countries, Stripe said, and within that there can be a huge amount of variation and compliance complexity, since codes get updated all the time, too. Mishandled sales tax, meanwhile, can result in pretty hefty fines, sometimes up to 30% interest on past-due amounts.
Unsurprisingly, a sales tax tool has been the most-requested feature from Stripe’s customers, Henderson said, a call that presumably only got louder in the last year, as e-commerce and digital transactions went through the roof with COVID-19.
Arguably, that makes Stripe Tax one of the company’s more significant product launches, not to mention the first since announcing its monster funding round earlier this year.
Previously, Stripe customers would have resorted to using a third-party service (like TaxJar) to work out sales tax. Or, more typically, those Stripe customers would have opted to limit the number of places they sold goods and services, in order to minimize the pain of dealing with multiple, complex and usually quite localized tax codes.
“No one leaps out of bed in the morning excited to deal with taxes,” said John Collison, co-founder and president of Stripe in a statement. “For most businesses, managing tax compliance is a painful distraction. We simplify everything about calculating and collecting sales taxes, VAT, and GST, so our users can focus on building their businesses.”
Stripe said that a survey of its customers found that two-thirds of respondents said the challenge of implementing sales tax actually limited their growth.
TaxJar has built a strong system for handling that, but the company — based out of Massachusetts but with a remote team — is primarily focused on the U.S. market, which has sales tax that is complicated enough (there are 11,000 different tax jurisdictions in the country).
That leaves a lot on the table for building out sales tax tools for the rest of the world: The wider focus of Stripe Tax thus fills a particular geographical gap for the company, regardless of how well TaxJar and Stripe integrate over time.
There is another key difference worth noting between the two.
TaxJar came to Stripe’s attention with an established operation — 23,000 customers at the time of the announcement. Stripe (wisely) bolted that on as a standalone business, which means that new and existing customers that use TaxJar can continue to use it as is. That is to say, at least for now, they do not need to be Stripe payments customers in order to use TaxJar, even if the integration between the two platforms will only improve over time.
Stripe Tax, on the other hand, is being built from the ground up as a product aimed specifically at increasing touchpoints and stickiness with Stripe customers.
Stripe Tax provides real-time tax calculation based on customer location and product sold; transparent itemizing for customers; tax ID management in areas (like Europe) where business customers can provide their code and get a reverse charge on tax if they are under a certain turnover threshold themselves; and reconciliation and reporting across all transactions to make filing and remittance easier.
But there is for now no way to use Stripe Tax outside of Stripe payments.
This could pose some problems for some customers. These days, many of the strongest retailers will take an “omnichannel” approach that might cover selling through marketplaces, selling through websites, selling through social media and more — and not all of those experiences may be powered by Stripe. It will be worth watching whether future iterations of Stripe Tax can account for that.
Stripe’s most significant product launch prior to Stripe Tax — Stripe Treasury last December — underscores how the company is currently very focused on diversifying outside of its basic payments business and opening the platform to much wider, more scaled transactions.
Treasury, which is still in invite-only mode, saw Stripe partner with established banks to provide a business banking service, providing a way for its customers to handle money that they generate from their Stripe-powered businesses.
The full country list where Stripe Tax is launching is Australia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, New Zealand, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, the United States and the United Kingdom.
Updated to correct the number of customers TaxJar has to 23,000.
Powered by WPeMatico
Equity Monday: Jeff’s going to space, and everyone wants a piece of Flipkart
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.
It’s WWDC week, so expect a deluge of Apple news to overtake your Twitter feed here and there over the next few days. But there’s a lot more going on, so let’s dig in:
- The Weekend: A supercharged, supercharged Model S Tesla car is not coming out. Instead, a merely supercharged version will come out. It’s still stupid fast and expensive. And Nigeria’s war with Twitter continued, with new efforts from the African nation to limit access to the social media service within its borders.
- This Morning: Flipkart is raising $3 billion at a roughly $40 billion valuation. The deal underscores not just how big the Indian tech scene is, but also how much investor interest there is in e-commerce bets more generally. And Jeff Bezos is going to space. Soon!
- Funding Rounds: Trulioo raised a $394 million Series D. The Canadian startup is now worth far more than $1 billion. And Chinese company Kanzhun is going public in the United States, which raised an eyebrow here amongst the Equity Morning Crew.
- Take The Damn Equity Survey: Take it! All the cools kids are taking it!
And that’s your start to the week. More to come from your friends here on Wednesday, and Friday. Chat soon!
Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!
Powered by WPeMatico
Extra Crunch roundup: Guest posts wanted, ‘mango’ seed rounds, Expensify’s tech stack
Prospective contributors regularly ask us about which topics Extra Crunch subscribers would like to hear more about, and the answer is always the same:
- Actionable advice that is backed up by data and/or experience.
- Strategic insights that go beyond best practices and offer specific recommendations readers can try out for themselves.
- Industry analysis that paints a clear picture of the companies, products and services that characterize individual tech sectors.
Our submission guidelines haven’t changed, but Managing Editor Eric Eldon and I wrote a short post that identifies the topics we’re prioritizing at the moment:
- How-to articles for early-stage founders.
- Market analysis of different tech sectors.
- Growth marketing strategies.
- Alternative fundraising.
- Quality of life (personal health, sustainability, proptech, transportation).
If you’re a skillful entrepreneur, founder or investor who’s interested in helping someone else build their business, please read our latest guidelines, then send your ideas to guestcolumns@techcrunch.com.
Thanks for reading; I hope you have a great weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription
Opting for a debt round can take you from Series A startup to Series B unicorn
Image Credits: olegkalina (opens in a new window) / Getty Images
Debt is a tool, and like any other — be it a hammer or handsaw — it’s extremely valuable when used skillfully but can cause a lot of pain when mismanaged. This is a story about how it can go right.
Mario Ciabarra, the founder and CEO of Quantum Metric, breaks down how his company was on a “tremendous growth curve” — and then the pandemic hit.
“As the weeks following the initial shelter-in-place orders ticked by, the rush toward digital grew exponentially, and opportunities to secure new customers started piling up,” Ciabarra writes. “A solution to our money problems, perhaps? Not so fast — it was a classic case of needing to spend in order to make.”
If companies want to preserve equity, debt can be an advantageous choice. Here’s how Quantum Metric did it.
4 proven approaches to CX strategy that make customers feel loved
Image Credits: mucahiddin / Getty Images
People have been working to optimize customer experiences (CX) since we began selling things to each other.
A famous San Francisco bakery has an exhaust fan at street level; each morning, its neighbors awake to the scent of orange-cinnamon morning buns wafting down the block. Similarly, savvy hairstylists know to greet returning customers by asking if they want a repeat or something new.
Online, CX may encompass anything from recommending the right shoes to AI that knows when to send a frustrated traveler an upgrade for a delayed flight.
In light of Qualtrics’ spinout and IPO and Sprinklr’s recent S-1, Rebecca Liu-Doyle, principal at Insight Partners, describes four key attributes shared by “companies that have upped their CX game.”
Twitter’s acquisition strategy: Eat the public conversation
Image Credits: We Are (opens in a new window) / Getty Images
What is a microblogging service doing buying a social podcasting company and a newsletter tool while also building a live broadcasting sub-app? Is there even a strategy at all?
Yes. Twitter is trying to revitalize itself by adding more contexts for discourse to its repertoire. The result, if everything goes right, will be an influence superapp that hasn’t existed anywhere before. The alternative is nothing less than the destruction of Twitter into a link-forwarding service.
Let’s talk about how Twitter is trying to eat the public conversation.
Reading the IPO market’s tea leaves
Image Credits: Nigel Sussman (opens in a new window)
Although it was a truncated holiday week here in the United States, there was a bushel of IPO news. We sorted through the updates and came up with a series of sentiment calls regarding these public offerings.
Earlier this week, we took a look at:
- Marqeta‘s first IPO price range (fintech).
- 1st Dibs‘ first IPO price range (e-commerce).
- Zeta Global‘s IPO pricing (martech).
- The start of SoFi trading post-SPAC (fintech).
- The latest from BarkBox (e-commerce).
How Expensify hacked its way to a robust, scalable tech stack
Image Credits: Nigel Sussman
Part 4 of Expensify’s EC-1 digs into the company’s engineering and technology, with Anna Heim noting that the group of P2P pirates/hackers set out to build an expense management app by sticking to their gut and making their own rules.
They asked questions few considered, like: Why have lots of employees when you can find a way to get work done and reach impressive profitability with a few? Why work from an office in San Francisco when the internet lets you work from anywhere, even a sailboat in the Caribbean?
It makes sense in a way: If you’re a pirate, to hell with the rules, right?
With that in mind, one could assume Expensify decided to ask itself: Why not build our own totally custom tech stack?
Indeed, Expensify has made several tech decisions that were met with disbelief, but its belief in its own choices has paid off over the years, and the company is ready to IPO any day now.
How much of a tech advantage Expensify enjoys owing to such choices is an open question, but one thing is clear: These choices are key to understanding Expensify and its roadmap. Let’s take a look.
Etsy asks, ‘How do you do, fellow kids?’ with $1.6B Depop purchase
Image Credits: Getty Images
The news this week that e-commerce marketplace Etsy will buy Depop, a startup that provides a secondhand e-commerce marketplace, for more than $1.6 billion may not have made a large impact on the acquiring company’s share price thus far, but it provides a fascinating look into what brands may be willing to pay for access to the Gen Z market.
Etsy is buying Gen Z love. Think about it — Gen Z is probably not the first demographic that comes to mind when you consider Etsy, so you can see why the deal may pencil out in the larger company’s mind.
But it isn’t cheap. The lesson from the Etsy-Depop deal appears to be that large e-commerce players are willing to splash out for youth-approved marketplaces. That’s good news for yet-private companies that are popular with the budding generation.
Confluent’s IPO brings a high-growth, high-burn SaaS model to the public markets
Image Credits: Andriy Onufriyenko / Getty Images
Confluent became the latest company to announce its intent to take the IPO route, officially filing its S-1 paperwork this week.
The company, which has raised over $455 million since it launched in 2014, was most recently valued at just over $4.5 billion when it raised $250 million last April.
What does Confluent do? It built a streaming data platform on top of the open-source Apache Kafka project. In addition to its open-source roots, Confluent has a free tier of its commercial cloud offering to complement its paid products, helping generate top-of-funnel inflows that it converts to sales.
What we can see in Confluent is nearly an old-school, high-burn SaaS business. It has taken on oodles of capital and used it in an increasingly expensive sales model.
How to win consulting, board and deal roles with PE and VC funds
Image Credits: Orla (opens in a new window) / Getty Images
Would you like to work with private equity and venture capital funds?
There are relatively few jobs directly inside private equity and venture capital funds, and those jobs are highly competitive.
However, there are many other ways you can work and earn money within the industry — as a consultant, an interim executive, a board member, a deal executive partnering to buy a company, an executive in residence or as an entrepreneur in residence.
Let’s take a look at the different ways you can work with the investment community.
The existential cost of decelerated growth
Image Credits: Nigel Sussman (opens in a new window)
Even among the most valuable tech shops, shareholder return is concentrated in share price appreciation, and buybacks, which is the same thing to a degree.
Slowly growing tech companies worth single-digit billions can’t play the buyback game to the same degree as the majors. And they are growing more slowly, so even a similar buyback program in relative scale would excite less.
Grow or die, in other words. Or at least grow or come under heavy fire from external investors who want to oust the founder-CEO and “reform” the company. But if you can grow quickly, welcome to the land of milk and honey.
Even among the most valuable tech shops, shareholder return is concentrated in share price appreciation, and buybacks, which is the same thing to a degree.
Slowly growing tech companies worth single-digit billions can’t play the buyback game to the same degree as the majors. And they are growing more slowly, so even a similar buyback program in relative scale would excite less.
Grow or die, in other words. Or at least grow or come under heavy fire from external investors who want to oust the founder-CEO and “reform” the company. But if you can grow quickly, welcome to the land of milk and honey.
Hormonal health is a massive opportunity: Where are the unicorns?
Image Credits: Carol Yepes (opens in a new window) / Getty Images
There is a growing group of entrepreneurs who are betting that hormonal health is the key wedge into the digital health boom.
Hormones are fluctuating, ever-evolving, and diverse — but these founders say they’re also key to solving many health conditions that disproportionately impact women, from diabetes to infertility to mental health challenges.
Many believe it’s that complexity that underscores the opportunity. Hormonal health sits at the center of conversations around personalized medicine and women’s health: By 2025, women’s health could be a $50 billion industry, and by 2026, digital health more broadly is estimated to hit $221 billion.
Still, as funding for women’s health startups drops and stigma continues to impact where venture dollars go, it’s unclear whether the sector will remain in its infancy or hit a true inflection point.
3 lessons we learned after raising $6.3M from 50 investors
Image Credits: sorbetto (opens in a new window)/ Getty Images
Two years ago, founders of calendar assistant platform Reclaim were looking for a “mango” seed round — a boodle of cash large enough to help them transition from the prototype phase to staffing up for a public launch.
Although the team received offers, co-founder Henry Shapiro says the few that materialized were poor options, partially because Reclaim was still pre-product.
“So one summer morning, my co-founder and I sat down in his garage — where we’d been prototyping, pitching and iterating for the past year — and realized that as hard as it was, we would have to walk away entirely and do a full reset on our fundraising strategy,” he writes.
Shapiro shares what he learned from embracing failure and offers three conclusions “every founder should consider before they decide to go out and pitch investors.”
For SaaS startups, differentiation is an iterative process
Image Credits: Kevin Schafer / Getty Images
Although software as a service has been thriving as a sector for years, it has gone into overdrive in the past year as businesses responded to the pandemic by speeding up the migration of important functions to the cloud, ActiveCampaign founder and CEO Jason VandeBoom writes in a guest column.
“We’ve all seen the news of SaaS startups raising large funding rounds, with deal sizes and valuations steadily climbing. But as tech industry watchers know only too well, large funding rounds and valuations are not foolproof indicators of sustainable growth and longevity.”
VandeBoom notes that to scale sustainably, SaaS startups need to “stand apart from the herd at every phase of development. Failure to do so means a poor outcome for founders and investors.”
“As a founder who pivoted from on-premise to SaaS back in 2016, I have focused on scaling my company (most recently crossing 145,000 customers) and in the process, learned quite a bit about making a mark,” VandeBoom writes. “Here is some advice on differentiation at the various stages in the life of a SaaS startup.”
Powered by WPeMatico
Architect Capital brings alternative capital to the early stage with new $100M fund
Early-stage startups are increasingly looking for alternative ways to access capital, meaning not every company wants to raise money from VCs or take on debt.
In recent years, a flurry of startups have emerged to give companies other options. (Think Pipe, for example.)
And today, San Francisco-based Architect Capital is a new firm that is launching with over $100 million in funds to serve as an “asset-based lender” to “high-growth,” early-stage tech companies. Specifically, the new firm aims to provide non-dilutive or less-dilutive financing options to asset-rich fintech, e-commerce and SaaS companies in the U.S. and Latin America, but with an emphasis on the latter. The region, Architect maintains, does not have a plethora of institutional financing available against assets.
The firm is not out to replace traditional venture capital or venture debt, emphasizes founder and CEO James Sagan, but rather to offer asset-based products that will complement them.
For some context, Sagan is no stranger to the startup world, having co-founded and served as managing partner of Arc Labs, an early-stage credit fund focused on lending to technology-enabled businesses. He’s been investing in Latin America for years, and recognized the need for new forms of financing to fund “novel and underappreciated assets.”
Also, he believes the region is home to “the most prominent fintech ecosystem in the world.”
To Sagan, traditional forms of equity and debt financing in the venture world are vital for things like growing headcount, but he believes they are “not engineered to support the growth of a company’s underlying financial products.”
“VC is highly dilutive and should be used for ROI activities such as hiring engineers and building great teams,” Sagan told TechCrunch. “It’s expensive to use equity to fund assets. Equity should not be put in a loan book. We’ll fund the loan book.”
Image Credits: Architect Capital founder James Sagan / Architect Capital
Architect’s goal is to provide “tailored and less dilutive funding,” especially to companies that produce repeatable revenues, such as SaaS and subscription businesses.
Sagan said he first discovered the strategy in 2015 when he was working for a multifamily office that was lending against a bunch of traditional assets.
“A colleague and good friend of mine started a business and raised some equity and venture debt, but he couldn’t find the asset-specific financing for the receivables he was generating,” Sagan recalls. “He was lending to small businesses and needed asset-specific financing against those receivables.”
Venture debt doesn’t really work for receivables-based lending because venture debt shops typically are underwriting assets, or rather, underwriting the quality of the investors in the company, Sagan believes.
“So we really tailor our underwriting towards those assets themselves right and those assets range from unsecured consumer receivables to secure small business receivables to real estate,” he told TechCrunch. “Essentially, we’re providing an additional instrument for asset-heavy businesses that will allow them to scale in a way that venture debt will not.”
Architect’s LPs are mostly large institutions, as opposed to traditional high net worth individuals. The firm’s average check size will land at around $10 million to $15 million.
“Our portfolio allocation is more concentrated in general,” Sagan said. “We expect to grow our AUM (assets under management) pretty precipitously.”
Architect Capital has invested in six companies since inception, including PayJoy, a company that delivers consumer financing and smartphone technology to customers in emerging markets; Forum Brands, a U.S.-based e-commerce marketplace aggregator; and ADDI, a fintech that aims to give Colombian consumers access to fair and affordable credit through point-of-sale-financing that recently raised $65 million.
Powered by WPeMatico
6 investors and founders forecast hockey-stick growth for Edinburgh’s startup scene
Scotland is slowly but surely drawing attention in the UK’s startup space. In 2020, Scottish startups collectively raised £345 million, according to Tech Nation, and with nearly 2,500 startups, it has the highest number of budding tech companies outside London. Venture capital fundraises are also consistently on the rise every year.
Scotland’s capital Edinburgh boasts a beautiful, hilly landscape, a robust education system and good access to grant funding, public and private investment. It’s also one of the top financial centers in the U.K., making it a great place to begin a business.
So to find out what the startup scene in Edinburgh looks like, we spoke to six founders, executives and investors. The city’s tech ecosystem appears to have a robust space for machine learning, artificial intelligence, biomedicine, fintech, travel tech, oil, renewables, e-commerce, gaming, health tech, deep tech, space tech and insurtech.
Use discount code SCOTLANDSURVEY to save 25% off an annual or two-year Extra Crunch membership.
This offer is only available to readers in the UK Europe and expires on June 30, 2021.
However, the city’s tech scene is apparently lackluster when it comes to legal tech, blockchain and consumer-facing technology.
Breakout companies that were founded in Edinburgh include Skyscanner and FanDuel. Notable among the current crop are Desana, Continuum Industries, Parsley Box, Current Health, Boundary, Zumo, Appointedd, Criton, Mallzee, TravelNest, TVSquared, Care Sourcer, Stampede, For-Sight, Vistalworks, Reath, InfraCost, Speech Graphics and Cyan Forensics.
The Edinburgh business-angel community appears to be quite strong, but it seems local founders find it difficult to get London-based investors to take an interest. Scottish investors are said to be “pretty conservative and risk-adverse” with some notable exceptions.
We surveyed:
- Wendy Lamin, managing director, Holoxica
- Andrew Noble, partner, Par Equity
- Danae Shell, co-founder and CEO, Valla
- Allan Nelson, co-founder and CEO, For-Sight
- Lysimachos Zografos, founder, Parkure
- Bertie Wilson, co-founder in stealth mode
Wendy Lamin, managing director, Holoxica
Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
It’s strong in space, biomedicine, fintech/insurtech, AI.
What are the tech investors like in Edinburgh? What’s their focus?
The Scottish business-angel community is said to be the largest in Europe. It’s difficult to get London-based investors take an interest in Scotland — investors can tend to look at where companies are based. It is hard for “underrepresented founders” to get investments in Scotland and beyond.
With the shift to remote working, do you think people will stay in Edinburgh or will they move out? Will others move in?
Stay. Not always easy to get people to come and live in Scotland. Edinburgh, there are lots of prejudices, despite it being one of the best cities to live in in the whole of the U.K.
Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Good to see more focus on impact investing. Par Equity is one of Edinburgh’s biggest investors, whereas Archangels is one of the biggest angel investors. Poonam Malik is great for diversity and female entrepreneurs, and she is on the board of Scottish Enterprise, and is a social entrepreneur and investor. Garry Bernstein is also an investor — he leads the Scottish chapter of Tech London Advocates and Global Tech Advocates, and as such is the founder of Tech Scot Advocates.
Where do you think the city’s tech scene will be in five years?
Thriving. The government is doing its best for the tech sector. Education in tech is currently an issue, though. Hope Brexit won’t be too much of an issue.
Andrew Noble, partner, Par Equity
Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Strong in fintech, health tech, data science, deep tech. Excited by quantum computing, advanced materials, AI in Edinburgh. Weak in blockchain and consumer.
Which are the most interesting startups in Edinburgh?
Current Health, InfraCost, Speech Graphics and Cyan Forensics.
What are the tech investors like in Edinburgh? What’s their focus?
Good at seed stage up to £1 million, okay for pre-series A (£1 million to £3 million) and non-existent for Series A (£3 million-£10 million). Quality of investors is improving. Par Equity is leading the way.
With the shift to remote working, do you think people will stay in Edinburgh, or will they move out? Will others move in?
Experiencing influx of new talent due to COVID-19. Edinburgh is a highly desirable city to live in. Recent new residents include Aaron Ross (Predictable Revenue) and Jules Pursuad (early employee at Airbnb and now VP at Omio).
Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Par Equity (investor), Paul Atkinson, Alistair Forbes, Mark Logan, Lesley Eccles, Chris McCann, CodeBase.
Where do you think the city’s tech scene will be in five years?
One to two new unicorns. Promising number of high-growth tech companies. A much more sophisticated investor scene in the Series A space.
Danae Shell, co-founder and CEO, Valla
Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Edinburgh is strong in fintech because of our proximity to so many financial services companies and banks. Also, there are some exciting games tech companies because of our history of games companies. We’re pretty weak in law tech, Valla’s area.
Which are the most interesting startups in Edinburgh?
Vistalworks for consumer tech; Sustainably for fintech; Reath for sustainable tech.
What are the tech investors like in Edinburgh? What’s their focus?
As a rule, Scottish investors are pretty conservative and risk-averse. The only real exception is Techstart Ventures, in my experience.
With the shift to remote working, do you think people will stay in Edinburgh, or will they move out? Will others move in?
I think more people will come to Edinburgh from London because the quality of life and cost of living are both so much better here.
Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Calum Forsyth and Mark Hogarth at Techstart Ventures; Janine Matheson at CodeBase; Jackie Waring from the Investing Women angel syndicate; Jim Newbury is a very well-respected developer and coach, and my co-founder Kate Ho is also well known. Also Danny Helson who runs the EIE event with the Bayes Centre.
Where do you think the city’s tech scene will be in five years?
We’ve had a few exits in the past few years (Skyscanner, FreeAgent), which means that talent is spreading out across the ecosystem here and we’re getting some fantastic new startups kicking off. In five years, that first crop should be coming into the Series A stage so we could see a lot of super exciting businesses!
Allan Nelson, co-founder and CEO, For-Sight
Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Strong in fintech, travel tech, health, oil, renewables, e-commerce, gaming (both video game and gambling tech). Excited by all bar oil (great driver of revenue, but not the future).
Which are the most interesting startups in Edinburgh?
Boundary, Parsley Box, Appointedd, Criton, Mallzee, TravelNest, TVSquared, Care Sourcer, Stampede, For-Sight.
What are the tech investors like in Edinburgh? What’s their focus?
Big fintech scene here. Travel tech is growing too, with Skyscanner’s influence strong.
With the shift to remote working, do you think people will stay in Edinburgh, or will they move out? Will others move in?
Most will stay, as it’s a very attractive city to live and work in. It’s a globally recognized and unique city. Very international flavor as evidenced by the makeup of our team.
Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Ex-Skyscanner people including Gareth Williams, Mark Logan, etc. Ian Ritchie, Alistair Forbes, the FanDuel’s founders and the CodeBase founders.
Where do you think the city’s tech scene will be in five years?
A lot bigger, as tech is a key growth target of the Scottish government and is underpinned/influenced/inspired by Skyscanner and FanDuel.
Lysimachos Zografos, founder, Parkure
Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
Strong in machine learning/AI/digital. Weak in deep tech discovery, especially in biotech/therapeutics. Excited by the rise in adoption of AI in drug discovery — all these ideas that were sci-fi 20 years ago are now adopted in £B deals.
Which are the most interesting startups in Edinburgh?
Pheno Therapeutics.
What are the tech investors like in Edinburgh? What’s their focus?
Conservative angels and a few tech seed VCs.
With the shift to remote working, do you think people will stay in Edinburgh, or will they move out? Will others move in?
Move in.
Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Investors: Archangels, Techstart Ventures and Epidarex.
Where do you think the city’s tech scene will be in five years?
Growing.
Bertie Wilson, co-founder, “Stealth mode”
Which sectors is your tech ecosystem strong in? What are you most excited by? What does it lack?
I don’t think there are any sectors that stand out — it’s fairly evenly split. A good strength of the city is the talent that comes from the universities. There are some really good engineers that come from Edinburgh, Heriot Watt and Edinburgh Napier. The main weakness is that the ecosystem doesn’t favor the most ambitious founders. Most investors in the region are angels and aren’t interested in finding outliers that could grow 1000x and are more interested in backing companies that are less risky but might 5x their money. If you want to find investors that will back risky (but very ambitious) plans, it’s easier to find that elsewhere.
Which are the most interesting startups in Edinburgh?
Desana, Continuum Industries, Parsley Box, Current Health, Boundary, Zumo.
What are the tech investors like in Edinburgh? What’s their focus?
I would say it’s getting better, but there are still a lot of issues with the ecosystem. It is being helped in Scotland by the likes of Techstart investing at the earliest stages with high conviction and term sheets that are more similar to London VCs. Outside of this, though, it’s easy for founders to end up with a messy cap table due to the number of angels and lack of VCs looking for VC-type returns — the messiness of these cap tables can then make it hard to raise venture funding down the line. This is fine for a lot of companies that aren’t aiming for a venture-scale return (which admittedly is a lot), but it can hurt those that are.
With the shift to remote working, do you think people will stay in Edinburgh, or will they move out? Will others move in?
I imagine and hope others will move in. It is a great place to live with a very high quality of life, and this should be a natural attraction for people who want a good standard of living but want to remain in a city.
Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
SEP (investor), Techstart Ventures (investor), Gareth Williams (founder/investor), MBM Commercial (lawyers), Pentech, Bill Dobbie (investor), Jamie Coleman.
Where do you think the city’s tech scene will be in five years?
Optimistically, I hope that there will be a good number of companies that are at the Series B/Series C stage, which will invite a lot more interest from investors outside of Edinburgh (London, Berlin, Paris, New York, San Francisco, etc.) to start investing more actively in the city at the earliest stages as well as these stages.
Powered by WPeMatico
Extra Crunch roundup: first-check myths, Miami relocation checklist, standout SaaSy startups
This may seem like a great time to launch a SaaS startup, but the landscape is crowded with well-designed applications that promise “blazingly fast and delightfully simple” experiences, according to seed-stage investor John Chen of Fika Ventures.
Most SaaS startups will fail, but not because of a sour marketing campaign or server downtime. The majority of these companies will fall victim to what Chen calls “the myth of frictionless onboarding.”
Despite the hype about ease of use, enterprise companies always ask customers to abandon familiar tools so they can learn something new.
“Just like with a new fitness program, participants feel good after completing the workout, but it takes a lot of activation energy to start and hard work to get there,” Chen notes.
Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription
Instead of putting the onus on customers to roll up their sleeves, he suggests that SaaS startups learn from cryptocurrency culture and find ways to “incentivize users to do the necessary work to have the right experience.”
But how do you encourage users to put in the time and effort required to produce an optimal customer experience?
“In a world where there is a surplus of alternatives for every job to be done, the scarce resource is not content, tooling, or hacks and tricks,” says Chen. “It’s attention.”
We’re off on Monday, May 31 in observance of Memorial Day; I hope you have a relaxing weekend!
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Dismantling the myths around raising your first check
Image Credits: Klaus Vedfelt (opens in a new window) / Getty Images
As startups and venture capital grow in tandem, fundraising has gone from a formal affair on Sand Hill Road to a process that can happen anywhere from Twitter to Zoom.
While fundraising may no longer require a trip to California, it might depend on whether you got an invite to a private audio app. And while you may not need to be an insider, second-time founders — largely male and white — still have a competitive advantage.
The growing complexity of fundraising has the opportunity to make tech either inclusive or exclusive.
VC is the flashy gold medal, but the rapid growth of emerging fund managers means that a first check can be piecemealed together from a variety of different sources. The options for financing are seemingly endless: syndicates, public crowdfunding, VC firms, accelerators, debt financing, rolling funds, and, for the profitable few, bootstrapping.
Doximity’s S-1 may explain why healthcare exits are heating up
Image Credits: Nigel Sussman (opens in a new window)
Telehealth startup Doximity filed to go public earlier today. Notably, the company has not fundraised since 2014, a year in which it attracted just under $82 million at a valuation of $355 million, per PitchBook data.
How has it managed to not raise money for so long? By generating lots of cash and profit over the years. Healthtech communications, it turns out, can be a lucrative endeavor.
What Vimeo’s growth, profits and value tell us about the online video market
Image Credits: Avishek Das/SOPA Images/LightRocket via Getty Images
The spin-out of video platform Vimeo from IAC completed this week, and the smaller company is now trading as an independent entity under the ticker ‘VMEO’.
If you missed the news that the internet conglomerate was spinning out the video service, don’t feel bad; it slipped past many radars. But with the company now trading, our access to its historical results, and our minds still enthralled by YouTube’s recent financial performance for Alphabet, it’s worth taking a moment to digest the company’s health.
Flywire’s flotation suggests the IPO slowdown is behind us
Image Credits: Nigel Sussman (opens in a new window)
The Flywire IPO is neat from a financial perspective and notable in that it’s a Boston exit as opposed to yet another New York or San Francisco-based flotation. It’s nice to see some other cities put points on the board.
But more than that, this IPO is a useful measuring stick for keeping tabs on the IPO market as a whole. This year and the last are shaping up to be key exit periods for startups and unicorns of all shapes and sizes; many a venture capital fund return rests on these public debuts.
Dear Sophie: Any unique immigration strategies for quick hiring?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
I do recruitment for tech startups. With a surge of VC investing, many startups are urgently hiring.
Which visas offer the quickest options for international talent? Are there any unique strategies that you would recommend we explore?
— Maverick in Milpitas
7 questions to ask before relocating your startup to Florida
Image Credits: Artur Debat (opens in a new window) / Getty Images
Cities like Miami, Pittsburgh and Austin have been drawing talent and wealth from Silicon Valley for years, but the COVID-19 pandemic accelerated the trend.
In recent months, many investors and entrepreneurs have noisily departed for Miami, citing the region’s favorable business climate and quality of life.
It’s always good to consider one’s options, but before booking a moving van for the Sunshine State — or any emerging tech hub, for that matter — here are some basic questions entrepreneurs should ask themselves.
Vise CEO Samir Vasavada and Sequoia’s Shaun Maguire break down the art of the pitch
Image Credits: Sequoia Capital / Wolfe + Von / TechCrunch
In just a few short years, Vise has gone from launching on the Disrupt Battlefield stage to a unicorn. Co-founders Samir Vasavada and Runik Mehrotra met Sequoia’s Shaun Maguire at an after-party at the event, and Maguire ended up leading a seed and Series A round while Sequoia led the Series B.
Last week, Vise raised its Series C of $65 million and was officially valued at $1 billion post-money.
We spoke to the pair about the early fundraising process for Vise, what Vasavada has learned about delivering a good fundraising pitch, and what stood out about the pitch and the product for Maguire.
Acorns’ SPAC listing depicts a consumer fintech business with a SaaSy revenue mix
Image Credits: Nigel Sussman (opens in a new window)
Another day, another unicorn public offering.
On Thursday, it was Acorns, a consumer fintech service that blends saving and investing into a freemium product.
Acorns fits inside the larger savings-and-investing boom seen over the last four or five quarters as consumers buffeted by the economic changes brought on by COVID-19 turned to stashing cash and boosting their equities investing cadence.
By now this is old news, but we haven’t had a clear picture of the economics of consumer fintech startups accelerated by the pandemic. Now that Acorns has decided to list via a SPAC — more on that in a moment — we do.
Poor onboarding is the enemy of good hiring
Image Credits: Olga Strelnikova (opens in a new window) / Getty Images
The world of hybrid work is here, and the usual 10-minute intro call, swag bag and first-day team lunch are just not enough to make your new employee feel welcome.
While many companies have found a way to interview and select candidates in a fully remote environment, few have spent time and resources on aligning the “pre-boarding” and onboarding process for the new hybrid world of work. Many employers still rely on old ways of welcoming new hires, despite our totally changed work environment.
It’s important to capitalize on candidates’ enthusiasm and eagerness from the moment the offer is signed instead of when they log in on Day One, because first impressions can make or break a candidate’s chances of staying at a company.
Powered by WPeMatico