General Catalyst
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Extra Crunch Live: Join GC’s Peter Boyce and Katherine Boyle for a live Q&A right now
It’s a special day; we’re hosting the year’s final episode of Extra Crunch Live with General Catalyst’s Peter Boyce and Katherine Boyle at 4 p.m. EST/1 p.m. PST.
Extra Crunch members can join the live conversation (details below) or catch it on demand. Questions from the audience are not just allowed, they’re highly encouraged, so if you’re not yet an Extra Crunch member, sign up here and join the fun!
General Catalyst is widely recognized as one of the top venture capital firms, with portfolio companies that include Snap, Kayak, Airbnb, Stripe, HubSpot and GitLab.
Boyce has been with General Catalyst since 2013, leading investments in companies like Ro, Macro, towerIQ and Atom. He also supported some big deals, including investments in Giphy, Jet.com and Circle. He also co-founded Rough Draft Ventures, an investment arm of General Catalyst focused on funding first-time CEOs out of university.
Boyle was previously a business reporter at The Washington Post before joining General Catalyst, which gives her a unique perspective on the entrepreneurial landscape. She’s invested in several companies, including AirMap, Origin and Nova Credit and has joined us for previous events to lay out some advice for startups navigating governmental rules.
We’re amped to discuss which opportunities are exciting them these days, how tech, innovation and venture has changed amid the pandemic, what they look for in a pitch, and much, much more.
You really won’t want to miss it.
Oh, and if this is of interest, I highly suggest you check out our library of ECL episodes right here. We’ve spoken to big names like Roelof Botha, Jason Green, Alexa von Tobel, Aileen Lee, Charles Hudson and many others.
Catch the details for today’s call below.
Event Details
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Render raises $4.5M for its DevOps platform
Render, the winner of our Disrupt SF 2019 Startup Battlefield, today announced that it has added another $4.5 million onto its existing seed funding round, bringing total investment into the company to $6.75 million.
The round was led by General Catalyst, with participation from previous investors South Park Commons Fund and a group of angels that includes Lee Fixel, Elad Gil and GitHub CTO (and former VP of Engineering at Heroku) Jason Warner.
The company, which describes itself as a “Zero DevOps alternative to AWS, Azure and Google Cloud,” originally raised a $2.25 million seed round in April 2019, but it got a lot of inbound interest after winning the Disrupt Battlefield. In the end, though, the team decided to simply raise more money from its existing investors.
Current Render users include Cypress.io, Mux, Bloomscape, Zelos, 99designs and Stripe.
“We spoke to a bunch of people after Disrupt, including Ashton Kutcher’s firm, because he was one of the judges,” Render co-founder and CEO Anurag Goel explained. “In the end, we decided that we would just raise more money from our existing investors because we like them and it helped us get a better deal from our existing investors. And they were all super interested in continuing to invest.”
What makes Render stand out is that it fulfills many of the promises of Heroku and maybe Google Cloud’s App Engine. You simply tell it what kind of service you are going to deploy and it handles the deployment and manages the infrastructure for you.
“Our customers are all people who are writing code. And they just want to deploy this code really easily without having to worry about servers, or maintenance, or depending on DevOps teams — or, in many cases, hiring DevOps teams,” Goel said. “DevOps engineers are extremely expensive to hire and extremely hard to find, especially good ones. Our goal is to eliminate all of that work that DevOps people do at every company, because it’s very similar at every company.”
Image Credits: Render
One new feature the company is launching today is preview environments. You can think of them as disposable staging or development environments that developers can spin up to test their code — and Render promises that the testing environment will look the same as your production environment (or you can specify changes, too). Developers can then test their updates collaboratively with QA or their product and sales teams in this environment.
Development teams on Render specify their infrastructure environments in a YAML file and turning on these new preview environments is as easy as setting a flag in that file.
Image Credits: Render
“Once they do that, then for every pull request — because we’re integrated with GitHub and GitLab — we automatically spin up a copy of that environment. That can include anything you have in production, or things like a Redis instance, or managed Postgres database, or Elasticsearch instance, or obviously APIs and web services and static sites,” Goel said. Every time you push a change to that branch or pull request, the environment is automatically updated, too. Once the pull request is closed or merged, Render destroys the environment automatically.
The company will use the new funding to grow its team and build out its service. The plan, Goel tells me, is to raise a larger Series A round next year.
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This serial founder is taking on Carta with cap table management software she says is better for founders
Yin Wu has co-founded several companies since graduating from Stanford in 2011, including a computer vision company called Double Labs that sold to Microsoft, where she stayed on for a couple of years as a software engineer. In fact, it was only after that sale she she says she “actually understood all of the nuances with a company’s cap table.”
Her newest company, Pulley, a 14-month-old, Mountain View, Ca.-based maker of cap table management software aims to solve that same problem and has so far raised $10 million toward that end led by the payments company Stripe, with participation from Caffeinated Capital, General Catalyst, 8VC and numerous angel investors.
Wu is going up against some pretty powerful competition. Carta was reportedly raising $200 million in fresh funding at a $3 billion valuation as of the spring (a round the company never official confirmed or announced). Last year, it raised $300 million. Morgan Stanley has meanwhile been beefing up its stock plan administration business, acquiring Solium Capital early last year and more recently purchasing Barclay’s stock plan business.
Of course, startups often manage to find a way to take down incumbents and a distraction for Carta, at least, in the form of a very public gender discrimination lawsuit by a former VP of marketing, could be the kind of opening that Pulley needs. We emailed with Yu yesterday to ask if that might be the case. She didn’t answer directly, but she did mention “values,” as well as sharing some more details about what she sees as different about the two products.
TC: Why start this company? Has Carta’s press of late created an opening for a new upstart in the space?
YW: I left Microsoft in 2018 and started Pulley a year later. We skipped the seed and raised the A because of overwhelming demand from investors. Many wanted a better product for their portfolio companies. Many founders are increasingly thinking about choosing with companies, like Pulley, that better align with their values.
TC: How many people are working for Pulley and are any folks you pulled out of Carta?
YW: We’re a team of seven and have four people on the team who are former Y Combinator founders. We attract founders to the team because they’ve experienced firsthand the difficulties of managing a cap table and want to build a better tool for other founders. We have not pulled anyone out of Carta yet.
TC: Carta has raised a lot of funding and it has long tentacles. What can Pulley offer startups that Carta cannot?
YW: We offer startups a better product compared to our competitors. We make every interaction on Pulley easier and faster. 409A valuations take five days instead of weeks, and onboarding is the same day rather than months. By analogy, this is similar to the difference between Stripe and Braintree when Stripe initially launched. There were many different payment processes when Stripe launched. They were able to capture a large portion of the market by building a better product that resonated with developers.
One of the features that stands out on Pulley is our modeling feature [which helps founders model dilution in future rounds and helps employees understand the value of their equity as the company grows]. Founders switch from our competitors to Pulley to use our modeling tool [and it works] with pre-money SAFEs, post-money SAFEs and factors in pro-ratas and discounts. To my knowledge, Pulley’s modeling tool is the most comprehensive product on the market.
TC: How does your pricing compare with Carta’s?
YW: Pulley is free for early-stage companies regardless of how much they raise. We’re price competitive with Carta on our paid plans. Part of the reason we started Pulley is because we had frustrations with other cap table management tools. When using other services, we had to regularly ping our accountants or lawyers to make edits, run reports or get data. Each time we involved the lawyers, it was an expensive legal fee. So there is easily a $2,000 hidden fee when using tools that aren’t self-serve for setting up and updating your cap table.
TC: Is there a business-to-business opportunity here, where maybe attorneys or accountants or wealth managers private label this service? Or are these industry professionals viewed as competitors?
YW: We think there are opportunities to white label the service for accountants and law firms. However, this is currently not our focus.
TC: How adaptable is the software? Can it deal with a complicated scenario, a corner case?
YW: We started Pulley one year ago and we’re launching today because we have invested in building an architecture that can support complex cap table scenarios as companies scale. There are two things that you have to get right with cap table systems, First, never lose the data and second, always make sure the numbers are correct. We haven’t lost data for any customer and we have a comprehensive system of tests that verifies the cap table numbers on Pulley remain accurate.
TC: At what stage does it make sense for a startup to work with Pulley, and do you have the tools to hang onto them and keep them from switching over to a competitor later?
YW: We work with companies past the Series A, like Fast and Clubhouse. Companies are not looking to change their cap table provider if Pulley has the tool to grow with them. We already have the features of our competitors, including electronic share issuance, ACH transfers for options, modeling tools for multiple rounds and more. We think we can win more startups because Pulley is also easier to use and faster to onboard.
TC: Regarding your paid plans, how much is Pulley charging and for what? How many tiers of service are there?
YW; Pulley is free for early-stage startups with less than 25 stakeholders. We charge $10 per stakeholder per month when companies scale beyond that. A stakeholder is any employee or investor on the cap table. Most companies upgrade to our premium plan after a seed round when they need a 409A valuation.
Cap table management is an area where companies don’t want a free product. Pulley takes our customers’ data privacy and security very seriously. We charge a flat fee for companies so they rest assured that their data will never be sold or used without their permission.
TC: What’s Pulley’s relationship to venture firms?
YW: We’re currently focused on founders rather than investors. We work with accelerators like Y Combinator to help their portfolio companies manage their cap table, but don’t have a formal relationship with any VC firms.
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Collective, a back-office platform that caters to ‘businesses of one,’ just landed a hefty seed round
Americans and other global citizens are increasingly self-employed, thanks to great software, the need for flexibility and because skilled services especially can pay fairly well, among other reasons.
In fact, exactly one year ago, the Freelancers Union and Upwork, a digital platform for freelancers, released a report estimating that 35% of the U.S. workforce had begun freelancing. With COVID-19 still making its way around the country and globe, prompting massive and continued job dislocation for many tens of millions of people, that percentage is likely to rise quickly.
Unsurprisingly, savvy startups see the economic power of these individuals — many of whom aren’t interested in managing anyone or anything other than the steady growth of their own businesses. A case in point is Collective, a 2.5-year-old, 20-person San Francisco-based startup that’s been quietly building back-office services like tax preparation and bookkeeping for what it dubs “business of one” owners, and which just closed on $8.65 million in seed funding.
General Catalyst and QED Investors co-led the round, joined by a string of renowned angel investors, including Uber cofounder Garrett Camp, Figma founder Dylan Field and DoorDash executive Gokul Rajaram.
We talked yesterday with cofounder and CEO Hooman Radfar about Collective’s mission to “empower, support and connect the self-employed community” — and what, exactly, it’s proposing.
TC: You previously founded a company and, even before it sold to Oracle in 2016, you had jumped over to VC, working with Garrett Camp at his startup studio Expa. Why shift back into founder mode?
HR: What I saw across AddThis and Expa and my angel investing is that managing finances is hard. Accounting, taxes, compliance — all that set-up as a small business is annoying.
Two years ago, [Collective cofounder] Ugur [Kaner] came into Expa and he basically pitched me on a startup-in-a-box-type program that we were talking about building from an incubation perspective, but [with more of a pointed focus on back office issues]. He’s an immigrant like me, and because he didn’t quite understand the system, he wound up having tax penalties — penalties that are even worse when you’re a freelancer. Some startups have come up with a bespoke version of what we offer, but we were like, ‘Why do they have to do it?’ These are commodities, but if you put them together in a platform, they can can be powerful.
TC: So is what you’ve created proprietary or are you working with third parties?
HR: Both. We’re an online concierge that’s focused on the back office as the core, meaning accounting and tax services. We also form an S Corp for you because you can save a lot of money [compared with forming a business as an LLC, which features different tax requirements]. So there’s an integration layer plus a dashboard on top of that. If you’re an S Corp, you need to have payroll, so we have a partnership with Gusto that comes with your subscription. We have a partnership with QuickBooks. We work with a third party on compliance. Our vision is to make this easy for you and to set this on autopilot because we understand that time is literally money.
TC: How much are you charging?
HR: For taxes, accounting, business banking and payroll, for the core package, it’s $200 a month. We are piloting bookkeeping and a fuller service package that’s probably [representative of] the direction we’ll head over time, and that will be an additional fee.
TC: How can you persuade these businesses of one that it’s worth that cost?
HR: There are almost three million people in the U.S. who [employ only themselves and] are making more than $100,000 a year and if you think about how many of these [different products] they are already using, it’s a great deal. QuickBooks and Gusto is cheaper with us. You see savings through expensing. The magic is really running your S Corp the right way. Part of that is normal income tax, but you also have a distribution and it’s taxed differently than an income — it’s taxed less. So we pull in salary data and look at expenses and across states, and say, ‘This is what we’d recommend to you based on how your cash flow is coming in, so you recognize this distribution in a compliant way.’
TC: Interesting about this useful data that you’ll be amassing from your customers. How might you use it?
HR: Our first concern is making sure the right people are seeing it [meaning we’re focused on privacy]. But there’s a lot we can do with the aggregation of that data once we’ve earned the right to use it. Among the things we could do, theoretically, includes creating a new level of scoring. If you’re a business of one, for example, it’s very difficult to get mortgages and loans, because credit agencies don’t have the tools to assess you. But if we have your financial history for years, we can represent that you’re a great person, you have a great business.
Another interesting direction as we reach more members — we’ll get to 2,000 soon — would be to use our power as a collective to get our members less expensive insurance, [help facilitate] credit, [help them with a] 401(k).
TC: There are a lot of other things you can get into presumably, too, from project management to graphic design . . .
HR: Right now, we want to make sure our core service is nailed.
Think about the transparency and peace of mind that Uber brought to ridesharing, or that Uber Eats brings to food delivery. You know when something is cooking, when it’s on its way, when it’s arriving. We’ve gotten used to that level of transparency and accountability with so many things, but when it comes to accounting, it’s not there and that’s crazy. This is your money. We want to change that.
TC: Going after “businesses of one” means you’re addressing a highly fragmented market. What kinds of partnerships are you striking to reach potential customers?
HR: We’re having those conversations now, but you can imagine neo banks make sense, along with vertical marketplaces for nurses and doctors and realtors and writers. There are a lot of possibilities.
Pictured, left to right, Collective’s cofounders: CTO Bugra Akcay, CEO Hooman Radfar and CPO Ugur Kaner.
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Digital elective care and telemedicine provider Ro raises $200 million at a reported $1.5 billion valuation
In three years Zachariah Reitano’s startup, Ro, has managed to hit a reported $1.5 billion valuation for its transformation from a company focused on treating erectile dysfunction to a telemedicine service for a range of elective and urgent care-focused treatments.
Through Rory for women’s health, Roman for men’s health and Zero for smoking cessation, Reitano and fellow co-founders Saman Rahmanian, and Rob Schutz, built a company that now treats 20 conditions, including sexual health, weight loss, dermatology, allergies and more, according to a statement from the company.
Image Credit: Zero
Ro also has a new pharmacy business, Ro Pharmacy, which is an online cash pay pharmacy offering more than 500 generic medications for just $5 per month per drug. And the company is getting into the weight loss business through a partnership with the private equity-backed healthcare company, Gelesis.
Ro’s also becoming a gateway into patient acquisition for primary care providers through Ribbon Health, and a test-case for the use of Pfizer’s Greenstone service, which provides certification that a generic drug is validated by one of the major pharmaceuticals.
The company’s $1.5 billion valuation is courtesy of a new $200 million investment from existing investors led by General Catalyst and including FirstMark Capital, Torch, SignalFire, TQ Ventures, Initialized Capital, 3L and BoxGroup. New first-time investor The Chernin Group also participated. In all, Ro has raised $376 million since it launched in 2017.
“This new investment will further our mission to become every patient’s first call. We’ll continue to invest in our vertically-integrated healthcare ecosystem, from our Collaborative Care Center to our national pharmacy operating system. This is just the beginning of Ro’s patient-centered healthcare platform.”
It’s all part of the company’s mission to provide a point of entry into the healthcare system independent of insurance qualifications.
“Telehealth companies like Ro are using technology to address long-standing healthcare disparities that have been exacerbated by COVID-19,” said Dr. Joycelyn Elders, MD, Ro Medical Advisor and Former U.S. Surgeon General. “By empowering providers to leverage their skills as efficiently and effectively as possible, Ro delivers affordable, high-quality care regardless of a patient’s location, insurance status, or physical access to physicians and pharmacies.”
Ro’s new financing is one of several forays by tech investors into reshaping the healthcare system at a time when patient care has been severely disrupted by attempts to mitigate the spread of COVID-19.
Digital medicine is assuming a central position in the healthcare world, with most consultations now occurring online. Reimbursement schemes for telemedicine have changed dramatically and investors see an opportunity to capitalize on these changes by aggressively backing the expansion plans of companies looking to bring digital healthcare directly to consumers.
That’s one of the reasons why Ro’s major competitor, Hims, is reported to be seeking access to public markets through its sale to a special purpose acquisition company for roughly $1 billion, according to Reuters.
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Macro just raised $4.3M to make your never-ending Zoom calls more useful
In this pandemic world, in-person meetings are a thing of the past. Most meetings these days are done via video conference, and no company has capitalized on the shift quite like Zoom.
Macro, a new FirstMark-backed company, is looking to capitalize on the capitalization. To Capitalism!
Sorry. Let’s get back on track. Macro is a native app that employs the Zoom SDK to add depth and analysis to your daily work meetings.
There are two modes. The first is essentially focused on collaboration, which turns the usual Zoom meeting into a light overlay, where folks are shown in small, circular bubbles at the top of the screen. This mode is to be used when folks are working on the same project, such as a wireframe or a collaborative document. The UI is meant to kind of fade into the background, allowing users to click on taps or objects behind other attendees’ bubbles.
The other mode is an Arena or Stadium mode, which is meant for hands-on meetings and presentations. It has two distinct features. The first is an Airtime feature, which shows how much different participants have ‘had the floor’ for the past five minutes, thirty minutes, or in total during the meeting. The second is a text-input system on the right side of the UI that lets people enter Questions, Takeaways, Action Items and Insights from the call.
Macro automatically adds that text to a Google Doc, and formats it into something instantly shareable.
There is no extra hassle involved in getting Macro up and running. When a user installs Macro on their computer, they’re instantly loaded into Macro each time they click a Zoom link, whether it’s in an email, a calendar invite, or in Slack.
Macro cofounders Ankith Harathi and John Keck explained to TechCrunch that this isn’t your usual enterprise play. The product is free to use and, with the Google Doc export, is still useful even as a single-player product. The Google Doc is auto-formatted with Macro messaging, explaining that it was compiled by the company with a link to the product.
In other words, Harathi and Keck want to see individuals within organizations get Macro for themselves and let the product grow organically within an organization, rather than trying to sell to large teams right off the bat.
“A lot of collaborative productivity SaaS applications need your whole team to switch over to get any value out of them,” said Harathi. “That’s a pretty big barrier, especially since so many new products are coming out and teams are constantly switching and that creates a lot of noise. So our plan was to ensure one person can use this and get value out of it, and nobody else is affected. They get the better interface and other team members will want to switch over without any requirement to do so.”
This is possible in large part to the cost of the Zoom SDK, which is $0. The heavy lifting of audio and video is handled by Zoom, as is the high compute cost. This means that Macro can offer its product for free at a relatively low cost to the company as it tries to grow.
Of course, there is some risk involved with building on an existing platform. Namely, one Zoom platform change could wreak havoc on Macro’s product or model. However, the team has plans to expand beyond Zoom to other video conferencing platforms like Google, BlueJeans, WebEx, etc. Roelof Botha told TechCrunch back in May that businesses built on other platforms have a much greater chance of success when there is platform across that sector, as there certainly is here.
And there seems to be some competition for Macro in particular — for one, Microsoft Teams just added some new features to its video conferencing UI to relieve brain fatigue and Hello is looking to offer app-free video chat via browser.
Macro is also looking to add additional functionality to the platform, such as the ability to integrate an agenda into the meeting and break up the accompanying Google doc by agenda item.
The company has raised a total of $4.8 million since launch, including a new $4.3 million seed round from FirstMark Capital, General Catalyst and Underscore VC. Other investors include NextView Ventures, Jason Warner (CTO GitHub), Julie Zhuo (former VP Design Facebook), Harry Stebbings (Founder/Host of 20minVC), Adam Nash (Dropbox, Wealthfront, LinkedIn), Clark Valberg (CEO Invision), among others.
Macro has more than 25,000 users and has been a part of 50,000 meetings to date.
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BigCommerce files to go public
As expected, BigCommerce has filed to go public. The Austin, Texas, based e-commerce company raised over $200 million while private. The company’s IPO filing lists a $100 million placeholder figure for its IPO raise, giving us directional indication that this IPO will be in the lower, and not upper, nine-figure range.
BigCommerce, similar to public market darling Shopify, provides e-commerce services to merchants. Given how enamored public investors are with its Canadian rival, the timing of BigCommerce’s debut is utterly unsurprising and is prima facie intelligent.
Of course, we’ll know more when it prices. Today, however, the timing appears fortuitous.
The numbers
BigCommerce is a SaaS business, meaning that it sells a digital service for a recurring payment. For more on how it derives revenue from customers, head here. For our purposes what matters is that public investors will classify it along with a very popular — today’s trading notwithstanding — market segment.
Starting with broad strokes, here’s how the company performed in 2019 compared to 2018, and Q1 2020 in contrast to Q1 2019:
- In 2019, BigCommerce’s revenue grew to $112.1 million, a gain of around 22% from its 2018 result of $91.9 million.
- In Q1 2020, BigCommerce’s revenue grew to $33.2 million, up around 30% from its Q1 2019 result of $25.6 million.
BigCommerce didn’t grow too quickly in 2019, but its Q1 2020 expansion pace is much better. BigCommerce will file an S-1/A with more information in Q2 2020, we expect; it can’t go public without sharing more about its recent financial performance.
If the company’s revenue growth acceleration continues in the most recent period — bearing in mind that e-commerce as a segment has proven attractive to many businesses during the COVID-19 pandemic — BigCommerce’s IPO timing would appear even more intelligent than it did at first blush. Investors love growth acceleration.
Moving from revenue growth to revenue quality, BigCommerce’s Q1 2020 gross margins came in at 77.5%, a solid SaaS result. In Q1 2019 its gross margin was 76.8%, a slightly worse figure. Still, improving gross margins are popular as they indicate that future cash flows will grow at a faster clip than revenues, all else held equal.
In 2018 BigCommerce lost $38.9 million on a GAAP basis. Its net loss expanded modestly to $42.6 million in 2020, a larger dollar figure in gross terms, but a slimmer percent of its yearly top line. You can read those results however you’d like. In Q1 2020, however, things got better, as the company’s GAAP net loss fell to $4 million from its year-ago Q1 result of $10.5 million.
The BigCommerce big commerce business is growing more slowly than I had anticipated, but its overall operational health is better than I expected.
A few other notes, before we tear deeper into its S-1 filing tomorrow morning. BigCommerce’s adjusted EBITDA, a metric that gives a distorted, partial view of a company’s profitability, improved along similar lines to its net income, falling from -$9.2 million in Q1 2019 to -$5.7 million in Q1 2020.
The company’s cash flow is, akin to its adjusted EBITDA, worse than its net loss figures would have you guess. BigCommerce’s operating activities consumed $10 million in Q1 2020, an improvement from its Q1 2019 operating cash burn of $11.1 million.
The company is further in debt than many SaaS companies, but not so far as to be a problem. BigCommerce’s long-term debt, net of its current portion, was just over $69 million at the end of Q1 2020. It’s not a nice figure, per se, but it is one small enough that a good IPO haul could sharply reduce while still providing good amounts of working capital for the business.
Investors listed in its IPO document include Revolution, General Catalyst, GGV Capital, and SoftBank.
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Fivetran snares $100M Series C on $1.2B valuation for data connectivity solution
A big problem for companies these days is finding ways to connect various data sources to their data repositories, and Fivetran is a startup with a solution to solve that very problem. No surprise then that even during a pandemic, the company announced today that it has raised a $100 million Series C on a $1.2 billion valuation.
The company didn’t mess around, with top flight firms Andreessen Horowitz and General Catalyst leading the investment, with participation from existing investors CEAS Investments and Matrix Partners. Today’s money brings the total raised so far to $163 million, according to the company.
Martin Casado from a16z described the company succinctly in a blog post he wrote after its $44 million Series B in September 2019, in which his firm also participated. “Fivetran is a SaaS service that connects to the critical data sources in an organization, pulls and processes all the data, and then dumps it into a warehouse (e.g., Snowflake, BigQuery or RedShift) for SQL access and further transformations, if needed. If data is the new oil, then Fivetran is the pipes that get it from the source to the refinery,” he wrote.
Writing in a blog post today announcing the new funding, CEO George Fraser added that in spite of current conditions, the company has continued to add customers. “Despite recent economic uncertainty, Fivetran has continued to grow rapidly as customers see the opportunity to reduce their total cost of ownership by adopting our product in place of highly customized, in-house ETL pipelines that require constant maintenance,” he wrote.
In fact, the company reports 75% customer growth over the prior 12 months. It now has more than 1,100 customers, which is a pretty good benchmark for a Series C company. Customers include Databricks, DocuSign, Forever 21, Square, Udacity and Urban Outfitters, crossing a variety of verticals.
Fivetran hopes to continue to build new data connectors as it expands the reach of its product and to push into new markets, even in the midst of today’s economic climate. With $100 million in the bank, it should have enough runway to ride this out, while expanding where it makes sense.
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Oscar’s health insurance platform nabs another $225 million
The direct-to-consumer health insurer Oscar has raised another $225 million in its latest, late-stage round of funding as its vision of tech-enabled healthcare services to drive down consumer costs becomes more and more of a reality.
In an effort to prevent a patient’s potential exposure to the novel coronavirus, COVID-19, most healthcare practices are seeing patients remotely via virtual consultations, and more patients are embracing digital health services voluntarily, which reduces costs for insurers and potentially provides better access to basic healthcare needs. Indeed, Oscar now has a $2 billion revenue base to point to and now a fresh pile of cash from which to draw.
“Transforming the health insurance experience requires the creation of personalized, affordable experiences at scale,” said Mario Schlosser, the co-founder and chief executive of Oscar.
Oscar’s insurance customers have the distinction of being among the most active users of telemedicine among all insurance providers in the U.S., according to the company. Around 30% of patients with insurance plans from the company have used telemedical services, versus only 10% of the country as a whole.
The new late-stage funding for Oscar includes new investors Baillie Gifford and Coatue, two late-stage investor that typically come in before a public offering. Other previous investors, including Alphabet, General Catalyst, Khosla Ventures, Lakestar and Thrive Capital, also participated in the round.
With the new funding, Oscar was able to shrug off the latest criticisms and controversies that swirled around the company and its relationship with White House official Jared Kushner as the president prepared its response to the COVID-19 epidemic.
As the Atlantic reported, engineers at Oscar spent days building a standalone website that would ask Americans to self report their symptoms and, if at risk, direct them to a COVID-19 test location. The project was scrapped within days of its creation, according to the same report.
The company now offers its services in 15 states and 29 U.S. cities, with more than 420,000 members in individual, Medicare Advantage and small group products, the company said.
As Oscar gets more ballast on its balance sheet, it may be readying itself for a public offering. The insurer wouldn’t be the first new startup to test public investor appetite for new listings. Lemonade, which provides personal and home insurance, has already filed to go public.
Oscar’s investors and executives may be watching closely to see how that listing performs. Despite its anemic target, the public market response could signal that more startups in the insurance space could make lemonade from frothy market conditions — even as employment numbers and the broader national economy continue to suffer from pandemic-induced economic shocks.
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Plume is building a healthcare service specifically for the transgender community
Plume, the Denver-based startup that provides hormone replacement therapies and medical consultations tailored to the trans community, could not be launching at a time when the company’s services are more needed.
It’s no hyperbole to say that transgender citizens in the United States are under attack. Whether from government policies that are intended to defund their access to insurer-provided medical care, or actual physical assaults, transgender Americans are living in physically and politically perilous times.
That’s one reason why Matthew Wetschler and his co-founder Jerrica Kirkley founded Plume, which provides telehealth services tailored for the transgender community.
The two doctors met and became friends in medical school. From the earliest days, the two were inseparable, Dr. Wetschler recalled. “She and I spent nearly 12 hours a day together,” he said.
Dr. Jerrica Kirkley, Plume co-founder Image Credit: Plume
After medical school, Wetschler moved to the Bay Area to finish his residency at Stanford and then went on to run a consulting firm that worked primarily with digital health startups. Kirkley, who is transgender, focused on gender therapy in the trans community.
A little over a year ago the two began to discuss the potential for creating a primarily telehealth service for the trans community, Wetschler said.
“We have always shared a belief that the healthcare system can do better for patients and doctors,” he said. And almost no population is quite as exposed to the shortcomings of the current healthcare system as the transgender community.
“I had been increasingly interested in the telehealth space and the emerging trend of leveraging mobile technology to provide unparalleled access to clinical care at the touch of a button,” said Wetschler. “And many of the problems [Kirkley] was seeing with her patients involved finding doctors with expertise and safe sources of medications.”
In many instances, despite the duty of care that physicians have to maintain, transgender patients are subjected to discriminatory practices and even the denial of care. Roughly 20% of transgender patients who seek care are either denied that care or harassed because of their gender identity, Wetschler said.
Many patients don’t have access to the medications they need, which can lead to up to 30% of patients seeking out the medications they need on the black market.
It’s an issue for the more than 1.4 million Americans who identify as transgender.
Plume provides a safe, on-demand service for patients that need it, said Wetschler. And does it for $99 per month.
The company doesn’t perform gender reassignment surgeries, but that’s about the only limitation on the care that the company offers. It can recommend local surgeons who will perform those procedures and it will provide consultations for patients or potential patients considering various hormone-related or surgical therapies. A majority of the Plume care team is transgender, according to Wetschler.
“What we’re proud of with Plume is that we offer a way of accessing this way of trans-specific care regardless of policy or insurance coverage,” said Wetschler.
At the heart of Plume’s services is access to gender-affirming hormone therapy. “This is the fundamental medical treatment for the trans community,” Wetschler said. “The trans experience is unique in that for most it involves navigating a gender and cis-normative healthcare system that may not understand their experiences. It can be highly traumatic.”
Plume offers a medical evaluation, ongoing monitoring and lab assignments and prescriptions. Soon, the company will also provide medication delivery, as well.
For most Americans, there’s a presumption that medical care will be delivered in a non-judgmental and safe way (both psychologically and physically). For many trans Americans there’s a lack of comfort and risk that’s inherent in the end-to-end care experience. Plume is trying to solve for that.
Dr. Matthew Wetschler, Plume, co-founder Image Credit: Plume
Investors from the nation’s top venture capital firms, General Catalyst and Slow Ventures, believe in the company’s vision and have backed it with $2.9 million in seed financing. Springbank Collective is also an investor in the company.
“What I was drawn to with Plume is the commitment and conviction Mathew and Jerrica operate with in providing the trans community — a woefully underserved group with access to the health care they deserve,” wrote General Catalyst partner, Olivia Lew, in a statement. “The rollback of healthcare protections for the trans community this past week have only heightened awareness for the dire need for this company. One of the things we’re most excited about in the next wave of health innovation are companies that are using modern platforms like telehealth to serve people’s individual needs with more consumer friendly, personalized experiences.”
These personalized services become even more important for populations at risk, like the trans community, and they’re also more valuable.
“When people take hormone therapy… there’s an opportunity to have an ongoing longitudinal relationship and that’s something that’s highly valued,” said Wetschler.
Currently the transgender population spends around $4.5 billion to $6 billion on medication. And there’s an opportunity to provide better emotional and behavioral support to patients, as well, according to Wetschler.
Plume began providing services in Colorado a year ago, and is now available in California, New York, Florida, Texas, Colorado, North Carolina, Virginia, Oregon, Maine and Massachusetts.
There are roughly 700,000 transgender patients who can now avail themselves of the services Plume offers, but the population, and therefore the need, is growing.
“The estimates on the size of the trans population since a decade ago has been growing 20% year over year,” says Wetschler. “And Generation Z is five times more likely than baby boomers to identify as trans. The full visibility of the trans community is yet to be realized.”
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