Best practices as a service is a key investment theme to watch in 2021

Published February 1, 2021

Enterprise IT has been completely transformed by SaaS the past decade. Okta last week published a report that showed that the largest companies now use 175 apps, a doubling over the past few years. More professionals have more tools to do their jobs than ever before. It’s an explosion of creativity and expressiveness and operational latitude — but also a recipe for disaster.

It’s one thing to give people and businesses tools — and something else to train them to use those tools effectively. Worse, as the number and complexity of software has skyrocketed the past decade, it’s only become harder for end users to grapple with offering their customers the best possible experience.

That’s the opportunity for a range of new tools that are designed to guide — sometimes forcefully — people to use the software they have in the best possible way, in what you might dub “best practices as a service.” It’s software that is opinionated on what “best” looks like within its domain, and ensures that as many people follow that model as possible with minimal dissension. It’s simplicity-in-a-box for a complex world.

Let me give some examples from a few major fields of startups in e-commerce, security, web development and finally, in my chosen profession, writing to illustrate what I mean.

Why calendar invites are worth $3B

Published January 28, 2021

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

Natasha and Danny and Alex and Grace hopped online for our weekly show, sans Gamestop news (which you can find here) to talk about all the other busy news happening in startup world right now.

Here’s a taste of what we got into:

Qualtrics IPO pricing, and the future of major acquisition pricing schemes. This company’s path to the public markets has been a long-time coming, so we had plenty to say.
How Atlanta’s Calendly turned a scheduling nightmare into a $3 billion company. This story was not only neat, but also operated as a sort of palate cleanser for the team.
Rhino‘s interesting insurtech play, and how it is pre-IPO pretty damn early. Revenue questions, the power of insurtech, and public markets impacting startups? This story had it all!
Alex talks about how Fast is raising fast money ($102 million to be exact). Even more, the Fast story fits into a broader narrative of online checkout startups raising a zillion dollars in recent weeks.
A boom in food delivery and restaurant startups, and why Danny is bearish on a plastic-free play. Natasha is in favor. Alex gets a company’s model mixed up with Spoon Rocket.
Natasha explains how Clubhouse isn’t the first company to raise millions off of millions of users with no known near-term monetization plan. Her piece on ClassDojo illustrates how a quiet edtech giant finally turned its 51 million users into a profitable base. There’s also a new edtech investor survey for you to check out (Discount code: EQUITY).
TCV’s record fund, and a female-focused angel fund coming out of Africa.

As always, it was a ton to get through because there is just so much going on. More Monday morning, until then stay cool!

Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts

Checkout wants to be Rapyd and Fast

Published January 16, 2021

Hello and welcome back to Equity, TechCrunch’s venture-capital-focused podcast, where we unpack the numbers behind the headlines. We’re back on this lovely Saturday with a bonus episode!

Again!

There is enough going on that to avoid failing to bring you stuff that we think matters, we are back yet again for more. This time around we are not talking Roblox, we’re talking about ecommerce, and a number of rounds — big and small — that have been raised in the space. Honest question: do y’all plan to release news on the same week? Are trends a social construct?

From Natasha, Grace, Danny, and your humble servant, here’s your run-down:

Webflow raised $140 million in a round that it says it did not need. This is not a new thing. Some startups are doing well, and don’t burn much. So investors offer them more at a nice price. In this case $2.1 billion. (Webflow does no-code
Checkout.com raised $450 million. The rich really do get richer. In this case the founders of Checkout.com, whose company is now worth around $15 billion Checkout.com does, you guessed, online checkout work. Which as Danny explains is complicated and critical.
We also talked about this Bolt round, for context.
And sticking to the ecommerce theme, Rapyd raised $300 million at around a $2.5 billion valuation. There is infinte money available for late-stage fintech.
Early stage as well, it turns out, with Tradeswell raising $15.5 million to help businesses improve their net margins.
Finally, ending with a chat on infrastructure, Nacelle closed an $18 million Series A.

And now we’re going back to bed.

Equity drops every Monday at 7:00 a.m. PST and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

Bolt adds $75M to its Series C, as the battle to rule online checkout continues

Published December 21, 2020

Bolt, a startup that offers online checkout technology to retailers, announced this morning that it has added $75 million to its Series C round, bringing the financing to a total of $125 million.

WestCap and General Atlantic led the new tranche, which Bolt CEO Ryan Breslow told TechCrunch was raised at around twice its Series C valuation. PitchBook pegs the company’s Series C at a post-money valuation of $500 million, implying that the Series C1 values Bolt at around $1 billion.

The company is calling the latest check its “Series C1.” Why not just call it a Series D? According to Breslow, Bolt’s future Series D will be much larger.

While Bolt’s creatively demarcated Series C1 is interesting, the capital event is in line with how the checkout space is growing in aggregate right now. There’s a lot of money being put to work on solving a particular e-commerce pain point.

Stripe leads $20M Series A into Fast, which is building a universal checkout service for e-commerce

Fast, a competing online checkout software provider, raised $20 million in March. And this June, Checkout.com, which is based in England but has a global stable of offices, raised $150 million at a $5.5 billion valuation.

Bolt, meanwhile, announced the first $50 million of its Series C in July. The company’s C1 event, therefore, represents not only the fourth major investment into checkout tech this year, but it also fits into a now-regular trend of fast-growing startups raising two checks in 2020 — companies like Welcome, Skyflow, AgentSync and Bestow also completed the feat this year.

Checkout.com, the UK payments startup, raises another $150M, now valued at $5.5B

But enough talking about its market. Let’s dig into what Bolt is building and why it just took on another truckload of cash.

Series C1

Bolt offers four connected services: checkout, payments, user accounts and fraud protection.

The company’s core offering is its checkout product, which it claims is both faster than comparable industry averages and has higher conversion rates. The startup’s payments and fraud services fits into its checkout universe by ensuring that transactions are real and that payments can be accepted. Finally, Bolt’s user accounts (shoppers are prompted to save their credentials when they first execute a purchase with the startup’s tech) boost the chance that someone who has checked out online using its tech will do so again in the future, helping Bolt to sell its service and ensure customers benefit from it.

The more shoppers that Bolt can attract, the more accounts it will have in the market feeding more data into its anti-fraud tool and checkout personalization technology.

And Bolt is reaching more online buyers, with the company claiming a roughly 10x gain of the number of people who have made accounts with its service this year. According to Breslow, the number was around 450,000 last December. It’s around 4.5 million now, he said, and Bolt expects the figure to reach 30 million next year.

Given the huge scale of its expected account creation, TechCrunch asked Breslow about his confidence interval in the number. He said 90%, thanks to Authentic Brands Group (ABG) linking up with Bolt, a deal that his company announced last month. Breslow said that ABG has 50 million shoppers; perhaps the 30 million figure is possible.

(Distribution for checkout tech is like oxygen, so competing companies in the space love to chat about their availability gains. Here’s Fast talking about being supported by WooCommerce from last week, for example. Fast declined to share processing growth metrics with TechCrunch after that announcement.)

Bolt’s historical shopper growth has paid dividends for its total transaction volume. The company told TechCrunch that it processed around $1 billion in transactions this year, up around 3.5x from its 2019 gross merchandise volume (GMV). That approximate pace of growth implies a roughly $286 million GMV result for Bolt last year; how far the company can scale that figure in 2021 will be our chief measuring stick for how well its ABG deal performs.

Breslow told TechCrunch that Bolt expects to 3x its GMV in 2021, which we read as implying a roughly $3 billion number.

But don’t just take that figure, apply a payment processing percentage and walk away with a revenue guess for Bolt. The company does make money from payments, but also from charging for its other services — like fraud protection — on a SaaS basis. So Bolt is a hybrid payments-and-software company, an increasingly popular model, though one that certain categories of software are slow to pick up on.

Underpinning Bolt’s plans to treble GMV and greatly expand its shopper network is its new capital. The $75 million cache of new dollars is going into handling market demand, moving upmarket and engineering, the company said. In short there’s a lot of in-market demand for better checkout tech — hence all the venture activity — and larger customers need more customizations and sales support. Bolt is going to spend on that.

Given that Bolt just reloaded, it would not be a surprise to see Fast or Checkout.com raise more capital in Q1 or Q2 of 2021. More when that happens.

Ramp raises $30M as the battle to own corporate spend heats up