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SoftBank-backed Embark Veterinary valued at $700M after $75M Series B
Now that you have that COVID dog, Embark Veterinary wants to help him or her be in your life for a long time by offering DNA testing with the goal of curbing preventable diseases and increasing the lifespan of dogs by three years within the next decade.
The Boston-based dog genetics company raised $75 million in Series B funding in what the company is calling “the biggest Series B for a pet startup to date.” SoftBank Vision Fund 2 was the lead investor and was joined by existing investors F-Prime Capital, SV Angel, Slow Ventures, Freestyle Capital and Third Kind Venture Capital.
The new round boosts Embark’s total funding to $94.3 million since the company was founded in 2015, according to Crunchbase data. It also gives it a post-money valuation of $700 million, Embark founder and CEO Ryan Boyko told TechCrunch.
Boyko has been a dog lover all his life, and also interested in biology and evolution. Dogs, in particular, are fascinating to him because of their variety: they can be bred to be two pounds or 200 pounds, and come in all shapes and sizes. His interest led him to study dogs in order to understand their evolution.
“I began to think about health problems, and honestly, dogs are a better system for using genetics to better their health than humans,” Boyko said. “You can breed them, so genetics has as much power to cause health problems as it can improve quality and life.”
Embark’s dog DNA test retails for $199 and enables dog owners, breeders and veterinarians to personalize care plans based on a dog’s unique genetic profile. It can test for over 350 breeds and 200 genetic health risks, as well as physical traits. Similar to a 23andMe test, test users can learn characteristics about breed, health and ancestry.
For example, the test could show that a healthy dog may have a gene that predisposes them to slipped discs. If the dog has that, then weight management would be an important factor in their care regime, as would not allowing them to jump off the couch. Another common genetic risk is HUU, or Hyperuricosuria, which is elevated levels of uric acid in urine that could lead to bladder stones due to the way dogs process minerals. By changing the dog’s diet, it could reduce the risk for developing the stones, which are painful and expensive to treat, Boyko said.
The test’s technology revolves around proprietary genotyping technology that analyzes more than 200,000 genetic markers, currently two times more information than any other dog DNA test on the market, Boyko said. This gives Embark the world’s largest database of canine health and biological information, enabling the company to provide insights into certain conditions and make new discoveries about health risks, traits and breeds.
Embark aims to become the standard of care for dog owners and vets. It grew 235% between 2019 and 2020 and saw five times the sales over the past two years. To support that growth, the company intends to use the new funding to bring on key hires and expand its database. Boyko anticipates adding more than 100 employees between 2021 and 2022.
Boyko said the opportunity in the pet startup space is huge. Indeed, U.S. spending on pets reached nearly $100 billion in 2020, up from $95.7 billion in 2019, according to the American Pet Products Association.
At the same time, venture capital interest in U.S. pet-focused companies, from nutrition to travel to healthcare, grew 29.5% from 2019 and 2020, according to Crunchbase data. In addition to Embark’s funding, 2021 was good to other pet startups as well, including pet insurance company Wagmo, raising $12.5 million, connected pet collar company Fi received $30 million and Rover, which announced plans to go public via SPAC.
Lydia Jett, partner at SoftBank Investment Advisers, told TechCrunch that this was her first pet-based investment, and what Embark is doing brings advances to a category right now where people care about their pets enough that they want to do something that will expand their value of life.
Jett said the management team being dedicated to DNA-based analytics is the future, and Embark is starting this big curve when it comes to pets and the convergence of real emotional ties to pets and the ability to improve their lives.
“This company is a driver of change to happen,” she added. “We are the largest consumer investor in the world, and Embark is very much aligned with what we are seeing across our portfolio that consumers are revisiting priorities and choices. That is a major trend, but still early in the cycle of personalization for their pets.”
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Papa co-founder lands seed funding for a second swing in eldercare: UpsideHōM
Jake Rothstein is the co-founder of Papa, a Miami-based company that offers care and companionship to seniors. The business, which pairs elderly Americans with uncertified-yet-vetted pals, helps offer casual services, such as technology support, grocery delivery or even a fun conversation. It has raised upwards of $91 million in venture capital to date.
While Rothstein left day to day responsibilities at Papa in 2017, his experience there gave him a deeper look into the priorities of older adults and families as they go through the aging journey. While Papa was about meeting the elderly where they are, the co-founder began to think of a more complex question: What if “where they are” isn’t as supportive as it should be 24/7?
After a stint at another tech company, Rothstein launched a more modern take on senior living communities in January 2020, alongside co-worker turned co-founder Peter Badgley. UpsideHōM is a fully managed, tech-enabled living space for older adults in the United States. After a year of beta testing, the duo announced today that they have raised a $2.25 million seed round for UpsideHōM, led by Triple Impact Capital and Freestyle Capital, with participation from Techstars.
Alongside the funding, UpsideHōM announced its next big bet, dubbed a relaunch, that will sit atop furnished and furnished apartments that sit throughout Raleigh, Atlanta, Jacksonville, Tampa and South Florida: a software platform to take out all the clutter from move-in and maintenance. The platform will give residents one spot to chat with their house manager, pay bills and access perks such as on-demand tech support, house-keeping and companion visits thanks to a partnership with Papa. The company also offers add-on services and amenities, including freshly prepared meals, grocery delivery, fitness programming and accompanied transportation.
Image Credits: UpsideHōM
Part of UpsideHōM’s focus is in creating personalized solutions. Elders are diverse in age, needs and financial circumstances — which means the turnkey solution needs to be easily adaptable to service needs when they pop up. The company needs to be careful though: It can’t offer traditional caregiver services due to state by state compliance; instead Rothstein describes the offerings as supportive services, not in replacement of health assistant caregivers.
Image Credits: UpsideHoM
When the company first launched, it was betting on a more unconventional idea.
“I thought, let’s solve loneliness even more completely than what Papa is doing by building in companionship,” Rothstein said, instead of letting people order it on demand. The company decided to offer roommate matching services for elders as one of its core services, alongside the aforementioned supported living characteristics. It didn’t fully stick. Over half of inbound participants responded to the marketing efforts by saying that they liked the idea, but didn’t want to share the space. Today, 50% of UpsideHōM’s business covers individuals or people with spouses or significant others; the other half covers those looking to share units.
The synergies between UpsideHōM and Papa, Rothstein’s previous company, are clear beyond an overlapping customer base. Papa offered up to and almost including actual care, stopping at traditional care-giving services, which require their own vetting and compliance measures. UpsideHōM offers up to and almost including traditional senior living services, but gives supportive services instead of assisted living services, which similarly have their own logistic hurdles to figure out.
As for why Rothstein didn’t just launch supportive living services as a new product vertical within his earlier company, he chalked it up to the “tremendous” opportunity in the former, which warranted it’s own company. He also said that customer acquisition looks different between the two companies.
“At Papa, what we found was that acquiring customers in this space was incredibly challenging [so we went through] the Medicare Advantage route,” he said. “But senior living is a completely different segment.”
The millions in new venture capital money are coming as UpsideHōM prepares for aggressive growth. While the company did not disclose revenue or total residents, it did say it has hit 1,000% in new resident headcount in the first half of 2021 as a vague proxy. As the startup prepares for its next phase of growth, the co-founders will need to focus heavily on sustainable customer acquisition.
Rothstein thinks that downsizing elders into homes that work for them is a simple argument to make.
“You can age in place for as long as it’s practical, but there’s going to be a day and time when it’s not [going to] be practical,” Rothstein said. “Why would you want to make this decision after you’ve broken your hip, after you run out of money or after your spouse died?”
Editor’s note: A previous version of this story wrote that Rothstein had spent six years scaling Papa. This is incorrect. He left in 2017 but remains an investor in the company.
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Extension rounds help some startups play offense during COVID-19
The venture capital world is constantly changing, and its evolution can sometimes flip pieces of conventional wisdom on their heads. For example, a recent flurry of extension rounds from Silicon Valley’s hottest startups like Stripe and Robinhood seem to signal that the investment type has suddenly become cool.
Extensions evolving from unloved to hot is not the first time that a type of VC deal has gained, or lost luster. In past times, for example, raising consecutive rounds from the same lead investor was often perceived as a negative signal; why couldn’t the startup find a new, different lead investor? Today, in contrast, venture capitalists are using inside rounds to double-down on winning startups, a way of helping ensure returns for their own backers.
The recent phenomenon of extensions becoming vogue is a tale of the times, in which the best startups get to play offense, and startups that can’t show accelerating growth are left behind. Let’s explore what has changed.
A series of fortunate extensions
TechCrunch first wrote about the new extension-round trend after seeing what felt like a wave of the deals crop up. Some were large, like MariaDB’s huge $25 million add-on to its Series C, or Robinhood’s biblical $320 million addition to its Series F.
But most were smaller events like Sayari adding $2.5 million to its Series B, or CALA adding $3 million to its seed round. Even more recently, Eterneva raised another $3 million on top of its seed round, and also out this week was a million pounds more for Edinburgh-based Machine Labs’ seed round.
One reason for the growth of extension rounds in 2020 has been runway — making sure that a startup has enough. Upstarts often raise on an 18-month cadence. But because of COVID-19 and its constituent economic disruptions, many have reduced costs in a bid to bolster how long they have until their cash stores reach zero.
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6 VCs explain why seed investors now favor enterprise startups
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today we’re digging into seed-stage companies, the vanguard of the venture market. In particular, we’re trying to understand why the ratio of seed deals now favor enterprise startups over their consumer-focused brethren. The fact that seed investors recently inverted their preferences, cutting more checks to enterprise (B2B) startups in 2019 than consumer-oriented companies (B2C) was news.
We wrote about the trend here, as regular readers will recall.
To better understand what’s going on, I spoke with a number of early-stage venture investors who recently dropped by Equity, came highly recommended by peers, and several I know personally. The goal was to get a handful of inputs from different firms to get under the skin of the trend.
What in the hell is going on in seed? Let’s find out.
Why are enterprise seed deals on top?
This morning we’ll hear from Jenny Lefcourt at Freestyle Capital, Jomayra Herrera of Cowboy Ventures, Hunter Walk from Homebrew, Iris Choi of Floodgate, Sarah Guo from Greylock and Ajay Agarwal of Bain Capital Ventures. As you can see, we picked a list of investors form firms of different sizes, theses and focus. However, each investing group either focuses on early-stage investments that include seed deals or dabbles in them.
Here’s what we want to know: why did the the majority of seed deals swap from consumer-focused startups to enterprise-focused deals?
Our investing group detailed a number of explanations, a handful of which echoed each other. To best convey their thinking, we’ll quote each investor at moderate length. If you are in a hurry, the most common point made against consumer-focused seed deals is go-to-market difficulty in the current market.
Other reasons include price, secular changes to the technology landscape, and the changing experience profile of the investing class themselves. (Minor edits made to select responses for clarity.)
Freestyle’s Jenny Lefcourt said via email that consumers are an increasingly difficult cohort to sell to, because they “became fickle with the proliferation of VC-backed, consumer-focused startups over the past few years.” As a result, consumers became “harder and more expensive to acquire and even harder to retain,” meaning higher customer acquisition costs (CAC) and lower lifetime value (LTV).
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Newly renamed Superside raises $3.5M for its outsourced design platform
Superside, a startup aiming to create a premium alternative to the existing crowdsourced design platforms, is announcing that it has raised $3.5 million in new funding.
It’s also adding new features like the ability to work on user interfaces, interaction design and motion graphics. Co-founder and CEO Fredrik Thomassen said this allows the company to offer “a full-service design solution.”
You may have heard about Superside under its old name Konsus . In a blog post, Thomassen explained the recent change in name and branding, writing, “We changed our name and look to align with what we had become: The world’s top team of international designers and creatives.”
He told me Superside was created to address his own frustrations after trying to use marketplaces like 99designs and Fiverr. He argued that there’s a problem with “adverse selection on those platforms.” In other words, “The best people … don’t remain, because they don’t have a career path — they’re fighting with other freelancers to get the jobs.”
Superside, on the other hand, is picky about the designers it works with — it claims to select 100 designers from the more than 50,000 applications it receives each year. But if they are accepted, they’re guaranteed full-time work.
Thomassen said the platform is built for large enterprises that have their own design and marketing teams but still need additional support. Customers include Uber, LinkedIn, L’Oreal, Cisco, Santander, Amazon, Walmart Tiffany & Co. Hewlett Packard and Airbus
In addition to choosing good designers, Superside also built a broader project management platform.
“We’re basically automating everything: Finding people, screening people, on-boarding, on-the-job learning, invoicing of customers, project management, all of the nitty gritty,” Thomassen said. “The only thing not automated is design — that’s where the human element and the creativity come in.”
Plus, Thomassen said Superside can turn around a standard piece of artwork in 12 hours: “Nobody else can do what we’re doing in terms of speed.”
The new funding comes from Freestyle Capital, with participation from High Alpha Ventures, Y Combinator and Alliance Ventures.
“We’re very much a mission-driven company,” Thomassen added. “For me, the reason to go to work in the morning is to help build an online labor market and create equal economic opportunity for everyone in the world.”
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TrueFacet, which sells pre-owned, authenticated watches and jewelry, is raising a $10 million round of funding
The secondary luxury goods market has been growing wildly in recent years, with more shoppers opting to both sell their lightly used luxury goods like clothing and jewelry for cold, hard cash, as well as buying the pre-owned, authenticated luxury goods of others.
One of the biggest beneficiaries of the trend is The RealReal, a nearly eight-year-old shopping destination for the growing population of people who might not be willing or able to purchase a new Hermes Birkin bag but are willing to buy one in like-new condition for considerably less. The idea — which seems to be working — is to create a virtuous cycle, wherein the bag’s original purchaser receives the bulk of that re-sale price, then uses the money to buy another new handbag (or a used one) that can be resold at a later point in time.
Another beneficiary of the trend: TrueFacet, a five-year-old, New York-based marketplace that claims to have more than 40,000 watches and 55,000 pieces of pre-owned authenticated watches and jewelry for sale at its site, and that has more recently begun offering pre-owned timepieces directly through brands like Fendi Timepieces, Raymond Weil and Roberto Coin that now partner with TrueFacet to carry their pre-owned timepieces with a manufacture warranty.
Apparently, shoppers are buying what they’re collectively selling. The company, which had previously raised $14.7 million in funding from investors, looks to be closing in on another $10 million round, judging by freshly filed SEC paperwork that shows it has so far raised $7 million in funding and is targeting $9.8 million altogether.
TrueFacet’s backers include Founders Co-op, Freestyle Capital and Maveron, led by partner Jason Stoffer, who also happens to sit on the board of Dolls Kill, an edgy clothing marketplace that we wrote about on Monday.
TrueFacet has some tough competition in the space, including Crown & Caliber, a six-year-old, Atlanta, Ga.-based company that has never announced outside funding, and 15-year-old, Germany-based Chrono24, which has raised €21 million over the years. Both sell timepieces alone, however.
It also competes directly with The RealReal, which has raised nearly $300 million from investors and sells clothing and high-end home decor, as well as jewelry and watches. (The company doesn’t break out publicly which of these categories outpace the others in terms of sales.)
Interestingly, like The RealReal, which now operates permanent offline stores in both New York and L.A., TrueFacet is also crossing the chasm into the offline world, though it’s taking baby steps toward that end.
Specifically, earlier this month, it announced a partnership with Stephen Silver Fine Jewelry, which sells timepieces to many monied Bay Area VCs and other Silicon Valley bigs at stores in Redwood City and Menlo Park, Calif. For the time being at least, the jeweler will also sell pieces from TrueFacet’s collection.
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CREXi raises $11 million to bring commercial real estate out of the Dark Ages
Managing, buying and selling commercial real estate is a fairly primitive process. CREXi founder Mike DeGiorgio remembers one experience in 2014 when he was required to fax and mail details about an urgent transaction to the leasing office, a move that made him think he was back in the era of Pogs and MTV’s Real World Season 1.
“There simply was no great industry solution for researching markets, finding comps, transacting, connecting with key stakeholders, purchasing or investing in properties, renting or leasing space, getting a loan, finding partners to purchase properties with, marketing yourself or the properties you own, sell or lease etc.,” he said. “I started thinking about technology solutions for the commercial real estate industry to solve many of these inefficiencies in the CRE space. I could not figure out why it hadn’t been done and set out to build CREXi to help industry stakeholders be more efficient and to make the industry more liquid, transparent and easier to access.”
CREXi — the CRE stands for “commercial real estate” — has been around since 2015, but recently announced an $11 million Series A as well as some interesting user numbers. Key investors include Jackson Square Ventures, Manifest Investment Partners, Lerer Hippeau, Freestyle Capital, TenOneTen Ventures and Founder Collective. The company has managed more than 100,000 “properties brought to market” on its platform and they have 200,000 users per month. They see more than 6,000 properties listed on the site each month.
The service is a suite of tools that streamlines the entire CRE processing.
“We give brokers the ability to find, manage and qualify leads, market their properties with customizable emails, and communicate with interested parties through in-app messaging. Additionally, our features help brokers interact with the industry and its stakeholders; solicit, make, accept, counter and negotiate offers; run competitive bidding processes; run escrow and closing processes; research markets and sold properties etc.,” said DeGiorgio.
While CRE isn’t very sexy, it’s clear that the industry can use all the help it can get. Considering CREXi manages $450 billion in property value, it’s also clear that this is a lucrative market ripe for disruption.
“We are the first platform to take the entire commercial real estate transaction process online with a simple to use and intuitive interface,” said DeGiorgio. “We collaborate with brokers and principals to blend technology with the fundamentals of CRE transactions, addressing the shifting needs of industry professionals to maximize revenue and minimize time spent on administrative tasks.”
Now he just has to get everyone to throw away their postal scales and fax machines and help CRE enter the era of Honey Boo Boo and leave the era of the Olsen Twins.
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Narvar raises $22 million to help internet retailers deliver physical goods without frustrating customers
Battery Ventures led a $22 million, Series B investment in Narvar Inc., a company helping internet retailers keep their customers happy post-purchase, meaning until their packages are delivered, and if need be, successfully returned for an exchange or refund. Battery was joined by Fung Capital, a logistics-focused fund, and Narvar’s earlier backers Accel Partners and Freestyle… Read More
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