Franklin Templeton
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Gong going gangbusters, grabs $250M Series E on $7.25B valuation
Gong, the revenue intelligence startup, has been raising capital at a rapid pace, and today the company announced another $250 million on a $7.25 billion valuation, a number that triples its previous valuation from last summer.
Franklin Templeton led today’s festivities with participation from Coatue, Salesforce Ventures, Sequoia, Thrive Capital and Tiger Global. The company raised $200 million last August at a $2.2 billion valuation, and has now raised $584 million, $450 million coming in the last year.
What is making investors open their wallets and pull out such large sums of cash? The company is helping solve a hard problem on how to bring more intelligence to the revenue process. They do this by using artificial intelligence to listen to every customer interaction, whether that’s a sales or service call (or anything else), and use that information to determine valuable information like who is most likely to buy and who is most likely to churn.
It’s been going well and CEO Amit Bendov says the company’s performance really validates the valuation. While he wasn’t ready to discuss specific numbers, he did say that ARR grew 2.3x between Q1 last year and this year, and he says Q2 is on pace to triple ARR.
“The valuation is up about 3x from last summer, but sales are more than 3x. We have high logo customers. [Last year], it was still unclear how COVID was going to impact us. People believed [our business] was going to do well [during the pandemic], but it wasn’t as obvious. Now, it is obvious. And all the […] financials are way better, so from a pure financials [perspective] our multipliers are pretty reasonable for our revenue trajectory,” he said.
With all this growth, the company is adding employees at a rapid pace. It closed the year with 400 people, and is up to around 550 today with a goal of reaching 950 by year end. It has partnered with a consulting firm called ReadySet, which helps companies build diverse and inclusive organizations, and Bendov says they are an equal-pay company.
Women represent around 40% of the employees and around 4% are Black, a number he hopes to increase by growing the Atlanta office. In the office in Israel, he has set up employment and training programs to build bridges to the Arab community.
Bendov says he looks forward to meeting his U.S. employees in the coming weeks when he’ll be visiting the Atlanta office for the first time.
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Celonis snares $1B Series D on $11B valuation
Celonis, the late-stage process mining software startup, announced a $1 billion Series D investment this morning on an eye-popping $11 billion valuation, up from $2.5 billion in its Series C in 2019, quadrupling its value in just two years.
Durable Capital Partners LP and T. Rowe Price Associates co-led the round, with participation from new investors Franklin Templeton, Splunk Ventures and existing investors Arena Holdings. Other unnamed existing investors also participated.
While it was at it, the company announced it was naming experienced financial pro Carlos Kirjner as CFO. Kirjner’s most recent job was at Google, where he led finance for ads and other key product areas, according to the company.
The presence of institutional investors like T. Rowe Price and Franklin Templeton and the huge influx of capital could be a signal that this is the last private fundraise for the company before it goes public, and Celonis CEO and co-founder Alexander Rinke did not shy away from IPO talk when asked about it.
“It could be, yeah. It’s kind of tough to predict the future, but look, we’re very bullish about the growth and our prospects both as a private — and down the road — a public company, and obviously we now have backers that can invest capital in both [public and private markets],” Rinke told TechCrunch.
Rinke says what’s driving this interest is the tremendous potential of the market even beyond process mining, which he sees as just a starting point for a much larger market. “Process mining where we originated from is really just the gateway to build new processes and better processes for organizations, and as you think about that that’s a much much bigger market that we’re addressing,” he said.
The company’s processing mining software sits at the beginning of the process automation food chain, which includes robotic process automation, no-code workflow and other tools to bring more automated workflows to companies. It’s quite possible that the company could develop other pieces of this or use the new capital to buy talent and functionality, something that Rinke acknowledges is possible now with this much capital behind the company.
Celonis started by mapping out exactly how work flows through an organization, something that used to take high-priced human consultants months to figure out sitting with employees and watching how work flows. Once a company knows how work moves through an organization, it’s easier to find inefficiencies and places that are ripe for using automation tools. Speeding up that first part of the operation with technology can bring down the cost and accelerate innovation and change.
The company made a huge deal with IBM recently where IBM plans on training 10,000 consultants worldwide to use Celonis tooling. That brings the power of a company the size of IBM to one that is still relatively small in comparison — Rinke thinks they’ll reach 2,000 employees by year end — and that could be at least part of the reason investors were willing to pump so much capital into the company.
The company, which recently turned 10, currently has 1,000 enterprise customers, including Uber, Dell, Splunk (which is also an investor), L’Oréal and AstraZeneca.
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Newsela, the replacement for textbooks, raises $100M and becomes a unicorn
Newsela, a SaaS platform for K-12 instructional material backed by the likes of TCV, Kleiner Perkins, Reach Capital and Owl Ventures, announced today that it has raised $100 million in a Series D round. The financing was led by new investor Franklin Templeton, and brings Newsela’s valuation to $1 billion. The new round is larger than the aggregate of Newsela’s prior capital raised to date.
“Hitting $1 billion [in valuation] doesn’t change a thing,” Newsela CEO Matthew Gross told TechCrunch. But the startup is joining Quizlet, ApplyBoard and CourseHero as companies within the sector that have hit the unicorn mark as remote education continues to gain traction.
Newsela has created a platform that strings together a number of different third-party content, such as primary source documents or the latest National Geographic articles. Gross defines it as “material that isn’t purpose-built for education, [but] purpose-built for being interesting and informative.” If Newsela is doing its job right, the content can replace textbooks within a classroom altogether, while helping teachers give fresh, personalized material.
“Textbooks are dead in classrooms, but are well-and-live in district purchasing,” Gross said. The startup is on a mission to distribute its product better, and the money will be used to get it into more classrooms. Part of this, Gross explains, is telling teachers what else it can provide along with textbooks. Analytics has become a big part of Newsela’s business, as remote learning hurts student engagement.
The startup’s paid product is between $6 to $14 per student, which contrasts with textbooks that can cost a school $20 to $40 per student “even on an annualized basis.”
Like other edtech companies, Newsela offered its product for free in the beginning of the pandemic, which gave it a healthy bump of new users.
Newsela estimates that gross bookings have grown 115% over the pandemic, and that revenue grew 81%. It declined to share revenue numbers or if it has hit profitability. There will be more than 11 million students using Newsela licensing by the end of 2021, Gross said.
Newsela estimates that two-thirds of public schools in the United States are using their platform, likely aided by school district flexibility that has grown amid the pandemic.
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Voyage raises $31 million to bring driverless taxis to communities
Voyage, the autonomous vehicle startup that spun out of Udacity, announced Thursday it has raised $31 million in a round led by Franklin Templeton.
Khosla Ventures, Jaguar Land Rover’s InMotion Ventures and Chevron Technology Ventures also participated in the round. The company, which operates a ride-hailing service in retirement communities using self-driving cars supported by human safety drivers, has raised a total of $52 million since launching in 2017. The new funding includes a $3 million convertible note.
Voyage CEO Oliver Cameron has big plans for the fresh injection of capital, including hiring and expanding its fleet of self-driving Chrysler Pacifica minivans, which always have a human safety driver behind the wheel.
Ultimately, the expanded G2 fleet and staff are just the means toward Cameron’s grander mission to turn Voyage into a truly driverless and profitable ride-hailing company.
“It’s not just about solving self-driving technology,” Cameron told TechCrunch in a recent interview, explaining that a cost-effective vehicle designed to be driverless is the essential piece required to make this a profitable business.
The company is in the midst of a hiring campaign that Cameron hopes will take its 55-person staff to more than 150 over the next year. Voyage has had some success attracting high-profile people to fill executive-level positions, including CTO Drew Gray, who previously worked at Uber ATG, Otto, Cruise and Tesla, as well as former NIO and Tesla employee Davide Bacchet as director of autonomy.
Funds will also be used to increase its fleet of second-generation self-driving cars (called G2) that are currently being used in a 4,000-resident retirement community in San Jose, Calif., as well as The Villages, a 40-square-mile, 125,000-resident retirement city in Florida. Voyage’s G2 fleet has 12 vehicles. Cameron didn’t provide details on how many vehicles it will add to its G2 fleet, only describing it as a “nice jump that will allow us to serve consumers.”
Voyage used the G2 vehicles to create a template of sorts for its eventual driverless vehicle. This driverless product — a term Cameron has used in a previous post on Medium — will initially be limited to 25 miles per hour, which is the driving speed within the two retirement communities in which Voyage currently tests and operates. The vehicle might operate at a low speed, but they are capable of handling complex traffic interactions, he wrote.
“It won’t be the most cost-effective vehicle ever made because the industry still is in its infancy, but it will be a huge, huge, huge improvement over our G2 vehicle in terms of being be able to scale out a commercial service and make money on each ride,” Cameron said.
Voyage initially used modified Ford Fusion vehicles to test its autonomous vehicle technology, then introduced in July 2018 Chrysler Pacifica minivans, its second generation of autonomous vehicles. But the end goal has always been a driverless product.
TechCrunch previously reported that the company has partnered with an automaker to provide this next-generation vehicle that has been designed specifically for autonomous driving. Cameron wouldn’t name the automaker. The vehicle will be electric and it won’t be a retrofit like the Chrysler Pacifica Hybrid vehicles Voyage currently uses or its first-generation vehicle, a Ford Fusion.
Most importantly, and a detail Cameron did share with TechCrunch, is that the vehicle it uses for its driverless service will have redundancies and safety-critical applications built into it.
Voyage also has deals in place with Enterprise rental cars and Intact insurance company to help it scale.
“You can imagine leasing is much more optimal than purchasing and owning vehicles on your balance sheet,” Cameron said. “We have those deals in place that will allow us to not only get the vehicle costs down, but other aspects of the vehicle into the right place as well.”
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