Floodgate
Auto Added by WPeMatico
Forward Kitchens cooks up $2.5M to transform existing kitchens into digital storefronts
Forward Kitchens was working quietly on its digital storefront for restaurants and is now announcing a $2.5 million seed round.
Raghav Poddar started the company two years ago and was part of the Y Combinator Summer 2019 cohort. Poddar told TechCrunch he has been a foodie his entire life. Lately, he was relying on food delivery and pickup services, and while visiting with some of the restaurant owners, he realized a few things: first, not many had a good online presence, and second, these restaurants had the ability to cook cuisine representative of their communities.
That led to the idea of Forward Kitchens, which provides a turnkey tool for restaurants to set up an online presence, including food delivery, where they can create multiple digital storefronts easily and without having to contact each delivery platform. The company ran pilot programs in a handful of restaurants, and this is the first year coming out of stealth.
“It’s an expansion of what they have on the menu, but is not immediately available in the neighborhood,” Poddar added. “Kitchens can keep the costs and headcount the same, but be able to service the demand and get more orders because it is fulfilling a need for the neighborhood, which is why we can grow so fast.”
Here’s how it works: Forward Kitchens goes into a restaurant and takes into account its capacity for additional cooking and the demographic area, as well as what food is available near it, and helps the restaurant create the storefront.
Each restaurant is able to build multiple storefronts, for example, an Italian restaurant setting up a storefront just to sell its popular mac n’ cheese or other small plates on demand. A couple hundred digital storefronts were already created, Poddar said.
A group of investors, including Y Combinator, Floodgate, Slow Ventures and SV Angel and angel investors Michael Seibel of YC, Ram Shriram and Thumbtack’s Jonathan Swanson, were involved in the round.
The new funding will be used to expand the company’s footprint and reach, and to hire a team in operations, sales and engineering to help support the product.
“Forward Kitchens is empowering independent kitchens to create digital storefronts and receive more online sales,” Seibel said via email. “With Forward Kitchens, a kitchen can create world-class digital storefronts at the click of a button.”
Powered by WPeMatico
Do bronze medals ever make sense for unicorns?
Last week, Deliveroo made news when it announced it was preparing to leave the Spanish market. The recently listed Deliveroo couched its explanation in market terms, noting its market position in Spanish on-demand delivery wasn’t sufficient to warrant continued investment. Left unmentioned: A Spanish legal change requiring companies that previously depended on freelance couriers to hire their delivery staff.
Race Capital’s Edith Yeung helped explain the Deliveroo choice to The Exchange, saying the Spanish market doesn’t have a very large population, which may mean that the “potential upside for being #1 in Spain has [a] ceiling.”
While she noted that she doesn’t have access to Deliveroo data, her statement jibes with the company’s own comment that Spain made up less than 2% of its aggregate gross transaction value (GTV) in the first half of 2021.
The Exchange explores startups, markets and money.
Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.
One company exiting a market is not a big deal, but we were curious about Deliveroo’s comments regarding the need for market leadership — or something close to it — to warrant continued investment. Is this the common reality for startups battling for market position, no matter if those markets are cities or countries?
Some startup markets have trended toward monopolies or duopolies. The Uber-Didi battle in China led to the companies agreeing to stop competing. Uber also recently sold its Uber Eats business in India to Zomato. In the United States, Uber and Lyft’s smaller competitors have long been forgotten and both the American ride-hailing giants continue to battle for dominance.
There are other familiar examples of this trend of consolidation. The food delivery game is concentrated amongst leading players. Postmates failed to survive as an independent company, winding up as part of Uber’s operations. Perhaps Gopuff will manage to claw out a spot in the market, but DoorDash and Uber Eats together accounted for 83% of the U.S. food delivery business in June this year, per Second Measure data.
It’s no surprise that some startup markets lean toward monopolies or duopolies. Many countries protect intellectual property via patents that can constrain new innovation to one or two players for an extended period of time. Monopolies can also arise when a new technology or method of business is invented — Google’s internet parsing search tech led to a nigh-monopoly in many markets, for example.
In businesses where efficiencies of scale have a large effect, monopolies can form when leading players consolidate smaller competitors until just one or two companies remain. Standard Oil is the canonical example of this process.
What’s interesting about the on-demand delivery market is that it is both incredibly expensive but isn’t very technologically difficult to get into, which has meant that many companies have jumped into the sector around the world. This means on-demand delivery is the opposite of other patent-protected markets from which we might expect monopolies to form or competition to be extinguished past the top two players.
Yet, it’s also an industry where economies of scale can play a key role in profit generation, and increased competition can lead to price wars and advertising tussles. It’s a ripe market, then, for consolidation, even if it lacks an exploitable IP base.
Powered by WPeMatico
Ann Miura-Ko’s framework for building a startup
As an early-stage investor, Floodgate’s Ann Miura-Ko looks for two breakthroughs in order to invest in a startup: The first happens in the value-seeking stage of a startup’s journey and the second occurs in its growth-seeking phase.
“There are really two stages to building a company,” Miura-Ko said at the TechCrunch Early Stage virtual event earlier this week. “One is what we call value-seeking mode, and this is where you’re really trying to figure out what the company actually looks like, including what’s the product? Who are you selling to? How do you price it? All of these things are still being discovered in the value-seeking mode.”
After founders have answered those questions, they can move into growth-seeking mode, she said. That’s the point when startups are trying to attract as many customers as possible.
Throughout these two distinct stages, Miura-Ko says she looks for the two breakthroughs: the inflection insight and product-market fit.
Inflection insights
The idea of an inflection insight, Miura-Ko said, is a relatively new framework Floodgate is exploring. Often times, she said founders need to ride some massive, exponential curves that allow their businesses to grow sustainably and scale.
These inflections have two parts to it: cause and impact. The causes are generally either technological (cloud, 5G), regulatory (GDPR, AV regulation) or societal (belief or behavior shifts). On the impact side, products and distribution may become cheaper or faster, while also presenting new use cases or customers, she said.
“Or even more interesting, you have something that was impossible that now is possible,” she said. “And that is an exponential impact that you could ride on.”
But simply finding that inflection insight doesn’t mean you should create a business. What founders must do next is determine if the insight is right and nonconsensus.
Powered by WPeMatico
Around is the new floating head video chat multitasking app
You have to actually get work done, not just video call all day, but apps like Zoom want to take over your screen. Remote workers who need to stay in touch while staying productive are forced to juggle tabs. Meanwhile, call participants often look and sound far away, dwarfed by their background and drowned in noise.
Today, Around launches its new video chat software that crops participants down to just circles that float on your screen so you have space for other apps. Designed for laptops, Around uses auto-zoom and noise cancelling to keep your face and voice in focus. Instead of crowding around one computer or piling into a big-screen conference room, up to 15 people can call from their own laptop without echo — even from right next to each other.
“Traditional videoconferencing tries to maximize visual presence. But too much presence gets in the way of your work,” says Around CEO Dominik Zane. “People want to make eye contact. They want to connect. But they also want to get stuff done. Around treats video as the means to an end, not the end in itself.”
Around becomes available today by request in invite-only beta for Mac, windows, Linux, and web. It’s been in private beta since last summer, but now users can sign up here for early access to Around. The freemium model means anyone can slide the app into their stack without paying at first.
After two years in stealth, Around’s 12-person distributed team reveals that it’s raised $5.2 million in seed funding over multiple rounds from Floodgate, Initialized Capital, Credo Ventures, AngelList’s Naval Ravikant, Product Hunt’s Ryan Hoover, Crashlytics’ Jeff Seibert, and angel Tommy Leep. The plan is to invest in talent and infrastructure to keep video calls snappy.
Not Just A Picturephone
Around CEO Dominik Zane
Around was born out of frustration with remote work collaboration. Zane and fellow Around co-founder Pavel Serbajlo had built mobile marketing company M.dot that was acquired by GoDaddy by using a fully distributed team. But they discovered that Zoom was “built around decades-old assumptions of what a video call should be” says Zane. “A Zoom video call is basically a telephone connected to a video camera. In terms of design, it’s not much different from the original Picturephone demoed at the 1964 World’s Fair.”
So together, they started Around as a video chat app that slips into the background rather than dominating the foreground. “We stripped out every unnecessary pixel by building a real-time panning and zooming technology that automatically keeps callers’ faces–and only their faces–in view at all times” Zane explains. It’s basically Facebook Messenger’s old Chat Heads design, but for the desktop enterprise.
Calls start with a shared link or /Around Slack command. You’re never unexpectedly dumped into a call, so you can stay on task. Since participants are closely cropped to their faces and not blown up full screen, they don’t have to worry about cleaning their workspace or exactly how their hair looks. That reduces the divide between work-from-homers and those in the office.
As for technology, Around’s “EchoTerminator” uses ultrasonic audio to detect nearby laptops and synchronization to eliminate those strange feedback sounds. Around also employs artificial intelligence and the fast CPUs of modern laptops to suppress noise like sirens, dog barks, washing machines, or screaming children. A browser version means you don’t have to wait for people to download anything, and visual emotes like “Cool idea” pop up below people’s faces so they don’t have to interrupt the speaker.
Traditional video chat vs Around
“Around is what you get when you rethink video chat for a 21st-century audience, with 21st-century technology,” says Initialized co-founder and general partner Garry Tan. “Around has cracked an incredibly difficult problem, integrating video into the way people actually work today. It makes other video-call products feel clumsy by comparison.”
There’s one big thing missing from Around: mobile. Since it’s meant for multitasking, it’s desktop/laptop only. But that orthodoxy ignores the fact that a team member on the go might still want to chime in on chats, even with just audio. Mobile apps are on the roadmap, though, with plans to allow direct dial-in and live transitioning from laptop to mobile. The 15-participant limit also prevents Around from working for all-hands meetings.
Competing with video calling giant Zoom will be a serious challenge. Nearly a decade of perfecting its technology gives Zoom super low latency so people don’t talk over each other. Around will have to hope that its smaller windows let it keep delays down. There’s also other multitask video apps like Loom’s asynchronously-recorded video clips that prevent distraction.
With coronavirus putting a new emphasis on video technology for tons of companies, finding great engineers could be difficult. “Talent is scarce, and good video is hard tech. Video products are on the rise. Google and large companies snag all the talent, plus they have the ability and scale to train audio-video professionals at universities in northern Europe” Zane tells me. “Talent wars are the biggest risk and obstacle for all real-time video companies.”
But that rise also means there are tons of people fed up with having to stop work to video chat, kids and pets wandering into their calls, and constantly yelling at co-workers to “mute your damn mic!” If ever there was a perfect time to launch Around, it’s now.
“Eight years ago we were a team of locals and immigrants, traveling frequently, moving between locations and offices” Zane recalls. “We realized that this was the future of work and it’s going to be one of the most significant transformations of modern society over the next 30 years . . . We’re building the product we’ve wanted for ourselves.”
One of the best things about working remotely is you don’t have colleagues randomly bugging you about superfluous nonsense. But the heaviness of traditional video chat swings things too far in the other direction. You’re isolated unless you want to make a big deal out of scheduling a call. We need presence and connection, but also the space to remain in flow. We don’t want to be away or on top of each other. We want to be around.
Powered by WPeMatico
Theresia Gouw and Ann Miura-Ko are coming to Disrupt
For a very long time, the venture industry was stubbornly resistant to change. The same people sat back in their chairs on Sand Hill Road while nervous founders made the rounds, hoping one of these firms would champion their cause.
No longer. Since roughly the advent of Y Combinator, the landscape has seemed to shift by the year, with more startups raising capital every year, more people becoming VCs, more Medium posts, more newsletters, more events, more great founders, more bad behavior, more congestion, and more money from all over the world finding its way to Silicon Valley and a growing number of smaller but fast-growing hubs.
How to make sense of it all? At Disrupt, we do our best to answer that question by sitting down each year with top venture capitalists who tell us what they are seeing. In 2015, for example, we talked with VCs about why you can start, but not always scale, a company from anywhere. In 2016, the discussion turned to why VCs were gathering up so much capital when the IPO market was (at the time) all but closed to new tech issuers. In 2017, we examined how then-new U.S. President Donald Trump might impact the venture and startup industry. By last year, we were talking about Softbank, mega rounds, and whether Silicon Valley is losing its gravitational pull.
This year, we’re again going to be taking stock of what trends have so far defined 2019 — and what may be around the corner — and we’re thrilled to announce the VCs who will help us to answer some of these questions: Ann Miura-Ko, a cofounder of the seed- and early-stage venture firm Floodgate, and Theresia Gouw, a cofounder of the early-stage venture firm Aspect Ventures.
Both of these longtime investors bring a lot of deep insights to any venture discussion. Miura-Ko has been in the industry since before the last major tech boom, starting in the late ’90s. Then a McKinsey analyst who was focused on wireless technologies, she went on to become an analyst at the venture firm CRV before cofounding with partner Mike Maples the venture firm Floodgate in 2008. Since joining forces, Floodgate has backed a long list of powerful companies, including Twitch, Sonos, Chegg, AdRoll, BazaarVoice, and Lyft, where Miura-Ko remains on the board of directors. She has seen plenty of ups and downs, within both Floodgate’s portfolio and the broader startup industry.
Gouw, meanwhile, also has a perspective on the industry that many newer investors don’t enjoy, having worked as a VP at a Bay Area startup during the dot.com run-up, then joining the venture firm Accel in 1999, just a year before the industry imploded. It could have been a short-lived stint. Instead, she helping the firm sift through the wreckage and right itself before leaving in 2014 to start her own firm — Aspect — with partner and former DFJ partner Jennifer Fonstad. Since then, the firm has backed a wide variety of companies, from The RealReal to Exabeam, HotelTonight to Forescout. Put another way, Gouw also knows what the deal is.
We can’t wait to sit down with both of these top investors to talk about the trends shaping the industry right now, from the growing secondary market to IPO trends, from what excites them the most to what their biggest concerns are for their firms and their portfolio companies as we sail toward 2020.
It’s a conversation you will not want to miss if you want a better understanding of what’s happening on the ground right now. Join us at Disrupt SF, which runs October 2 to 4 at the Moscone Center. Tickets are available here.
Powered by WPeMatico
Ashton Kutcher, Ann Miura-Ko and Mamoon Hamid are coming to Disrupt!
The Disrupt Battlefield is one of the best parts of the conference. Twenty+ startups step on to the Disrupt Main Stage with a product, a pitch and a dream. They have six minutes to convey how they’re going to fundamentally disrupt their industry, and six minutes of Q&A with world-renowned judges from the VC world.
Pride. Anxiety. Despair. Glory. Anything could happen on that stage, particularly with judges that are at the top of their game and can smell bullshit from a mile away.
This year, at Disrupt SF 2019, we’ll be joined by Ashton Kutcher, Ann Miura-Ko and Mamoon Hamid in the final round of the Battlefield. And we couldn’t be more excited!
This won’t be Kutcher’s first time at Disrupt. He’s hung out with us a couple of times to discuss his investment strategy for Sound Ventures, and previously, A-Grade investments. This will be his first time as a Finals Judge for the Battlefield, however, and it’ll be fascinating to see the superstar investor work in real time on the Main Stage.
Ann Miura-Ko, co-founding partner at Floodgate, will be returning as a Battlefield judge. Miura-Ko is a repeat member of the Forbes Midas List, The New York Times Top 20 Venture Capitalists Worldwide, and has been called the most powerful woman in startups. Her portfolio includes Lyft, which went public this year, as well as Refinery29, Xamarin and Thinkful.
Kleiner Perkins partner Mamoon Hamid will also be judging the Battlefield Finals. Hamid was a co-founder at Social Capital and a partner at US Venture Partners before joining Kleiner Perkins, and has invested in companies like Slack, Yammer, Box and Figma.
We’re amped to have such amazing VCs join us for the final round of the Startup Battlefield competition. Join us at Disrupt SF, which runs October 2 to 4 at the Moscone Center. Tickets are still available at an early-bird rate, but that ends this week.
See you there!
Powered by WPeMatico
Rimeto lands $10M Series A to modernize the corporate directory
The notion of the corporate directory has been around for many years, but in a time of more frequent turnover and shifting responsibilities, the founders of Rimeto, a three-year-old San Francisco startup, wanted to update it to reflect those changes.
Today, the company announced a $10 million Series A investment from USVP, Bow Capital, Floodgate and Ray Dalio, founder of Bridgewater Associates.
Co-founder Ted Zagat says that the founders observed shifting workplace demographics and changes in the way people work. They believed it required a better way to locate people inside large organizations, which typically used homegrown methods or relied on Outlook or other corporate email systems.
“On one hand, we have people being asked to work much more collaboratively and cross-functionally. On the other, is an increasingly fragmented workplace. Employees really need help to be able to understand each other and work together effectively. That’s a real challenge for them,” Zagat explained.
Rimeto has developed a richer directory by sitting between various corporate systems like HR, CRM and other tools that contain additional details about the employee. It of course includes a name, title, email and phone like the basic corporate system, but it goes beyond that to find areas of expertise, projects the person is working on and other details that can help you find the right person when you’re searching the directory.
Rimeto directory on mobile and web (Screenshot: Rimeto)
Zagat says that by connecting to these various corporate systems and layering on a quality search tool with a variety of filters to narrow the search, it can help employees connect to others inside an organization more easily, something that is often difficult to do in large companies.
The tool can be accessed via web or mobile app, or incorporated into a company intranet. It also could be accessed from a tool like Slack or Microsoft Teams.
The three founders — Zagat, Neville Bowers and Maxwell Hayman — all previously worked at Facebook. Unlike a lot of early-stage startups, the company has paying customers (although it won’t share exactly how many) and reports that it’s cash-flow positive. Up to this point, the three founders had bootstrapped the company, but they wanted to go out and raise some capital to begin to expand more rapidly.
Powered by WPeMatico
This startup is helping food app delivery workers start their own damn delivery companies
Following many months of pressure, DoorDash, one of the most frequently used food delivery apps in the U.S., said late last month that it was finally changing its tipping policy to pass along to workers 100% of tips, rather than employ some of that money toward defraying its own costs.
The move was a step in the right direction, but as a New York Times piece recently underscored, there are many remaining challenges for food delivery couriers, including not knowing where a delivery is going until a worker picks it up (Uber Eats), having just seconds to decide whether or not to accept an order (Postmates) and not being guaranteed a minimum wage (Deliveroo) — not to mention the threat of delivery robots taking their jobs.
It’s a big enough problem that a young, nine-person startup called Dumpling has decided to tackle it directly. Its big idea: turn today’s delivery workers into “solopreneurs” who build their own book of clients and keep much more of the money.
It newly has $3 million in backing from two venture firms that know the gig economy well, too: Floodgate, an early investor in Lyft (firm co-founder Ann Miura-Ko is on Lyft’s board), and Fuel Capital, where TaskRabbit founder Leah Busque is now a general partner.
We talked with Dumpling’s co-founders and co-CEOs earlier this week to learn more about the company and how viable it might be. Nate D’Anna spent eight years as a director of corporate development at Cisco; Joel Shapiro spent more than 13 years with National Instruments, where he held a variety of roles, including as a marketing director focused on emerging markets.
National Instruments, based in Austin, is also where Shapiro and D’Anna first met back in 2002. Our chat, edited lightly for length, follows:
TC: You started working together out of college. What prompted you to come together to start Dumpling?
JS: We’d stayed good friends as we’d done different things with our careers, but we were both seeing rising inequality happening at companies and within their workforces, and we were both interested in using our [respective] background and experiences to try and make a difference.
ND: When we were first started, Dumpling wasn’t a platform for people to start their own business. It was a place for people to voice opinions — kind of like a Glassdoor for workers with hourly jobs, including in retail. What jumped out at us was how many gig workers began using the platform to talk about the horrible ways they were being treated, not having a traditional boss and not being protected by traditional policies.
TC: At what point did you think you were onto a separate opportunity?
ND: We knew that a mission-driven company that’s trying to do good by people who’ve been exploited by Silicon Valley companies has to be profitable. I was an investor at Cisco, and I was very clear that the money side has to work. So we started talking with gig workers and we asked, ‘Why are you working for a terrible company where you’re getting injured, where you’re getting penalized for not taking the next job?’ And the response was ‘money.’ It was, ‘I need to be able to buy these groceries and I don’t want to put them on my own credit card.’ That was an epiphany for us. If the biggest pain point to running these businesses is working capital and we can solve that — if business owners will pay for access to capital and for tools that help them run their business — that clicked for us.
TC: A big part of your premise is that while gig economy companies have anonymized people as best they can, there’s a meaningful segment of services where a stranger or a robot isn’t going to work.
JS: Shoppers for gig companies often hear, ‘When you [specifically] come, it makes my day,’ so our philosophy was to build a platform that supports the person. When you run a business and build a clientele that you get to know, you’re incentivized for that [client] to have a good experience. So we wondered, how do we provide tools for someone who has done personal shopping and who not only needs funds to shop but also help with marketing and a website and training so they can promote their services?
ND: We also realized that to help business owners succeed that we needed to lower the transaction cost for them to find customers, so we created a marketplace where shoppers can look at reviews, understand different shoppers’ knowledge regarding when it comes to various specialties and stores, then help match them.
TC: How many shoppers are now running their own businesses on Dumpling and what do they get from you exactly?
JS: More than 500 across the country are operating in 37 states. And we want to give them everything they need. A big part of that is capital, so we give [them] a credit card, then it’s effectively the operational support, including order management, customer relationship functionality, customer communication, a storefront, an app that they can use to run their business from their phone. . .
TC: What about insurance, tax help, that sort of stuff?
ND: A lot of VCs pushed us in that direction. The good news is a lot of companies are coming up to provide those ancillary services, and we’ll eventually partner with them if you want to export your data to Intuit or someone else. Right now, we’re really focused on [shoppers’] core business, helping then to operate it, to find customers, that’s our sweet spot for the immediate future.
TC: What are you charging? Who are you charging?
JS: A subscription model is an obvious way for us to go at some point, but right now, because we’re in the transaction flow, we’re taking a percentage of each transaction. The [solopreneuer] pays us $5 per transaction as a platform fee; the shopper pays us 5% atop the delivery fee set by the [person who is delivering their goods]. So if someone spends $100 on groceries, that customer pays us $5, and the shopper pays us $5 and the shopper gets that delivery fee, plus his or her tip.
The vast amount goes to the shopper, unlike with today’s model [wherein the vast majority goes to delivery companies]. Our average shopper is bringing home $32 in earnings per order, roughly three times as much as when they work for other grocery delivery apps. I think that’s partly because we communicate to [shoppers] that they are supporting local businesses and local entrepreneurs and they are receiving an average tip of 17% on their orders. But also, when you know your shopper and that person gets to know your preferences, you’re much more comfortable ordering non-perishables, like produce picked the way you like. That leads to huge order sizes, which is another reason that average earnings are higher.
TC: You’re fronting the cost for groceries. Is that money coming from your venture funding? Do you have a debt facility?
ND: We don’t. The money moves so fast. The shoppers are using the card to shop, then getting the money back again, so the cycle time is quick. It’s two days, not six months.
TC: How does this whole thing scale? Are you collecting data that you hope will inform future products?
ND: We definitely want to use tech to empower [shoppers] instead of control them. But [our CTO and third co-founder Tom Schoellhammer] came from Google doing search there, and eventually we [expect to] recommend similar stores, or [extend into] beauty or pet other local services. Grocery delivery is one obvious place where the market is broken, but where you want a trusted person involved, and you’re in the flow when people are looking for something [the opportunity opens up]. Shoppers’ knowledge of their local operation zone can be leveraged much more.
Powered by WPeMatico
JoyRun, a food delivery app with a twist, raises $8.5 million
A Santa Clara, Calif. startup called JoyRun has raised about $10 million in Series A and seed funding for its peer-to-peer food and drinks delivery app. It may be hard to believe that VCs are still putting money into food delivery concepts that don’t involve self-driving cars, robots or drones. What’s new about JoyRun is not so much technology as business model innovation. Read More
Powered by WPeMatico
Driver’s ed app Aceable raises $4 million
Although self-driving vehicles feel like a near future reality, people still need driver’s licenses to get around independently in cars today. Now, an Austin, Texas startup called Aceable has raised $4 million in Series A funding to deliver driver’s education in a mobile app. Silverton Partners and Floodgate Ventures co-led the round. Aceable’s app alleviates the need… Read More
Powered by WPeMatico