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Sendoso nabs $100M as its corporate gifting platform passes 20,000 customers
Corporate gift services have come into their own during the COVID-19 pandemic by standing in as a proxy for other kinds of relationship-building activities — office meetings, lunches and hosting at events — that have traditionally been part and parcel of how people do business, but were no longer feasible during lockdowns, social distancing and offices closing their doors.
Now, Sendoso — a popular “end-to-end” gifting platform offering access to 30,000 products, including corporate swag, regular physical gifts, gift cards and more; and then providing services like logistics, packing and sending to get those gifts to the recipients — is announcing $100 million of funding to capitalize on this shift, led by a big new investor.
New backer SoftBank, via its Vision Fund 2, is leading this latest Series C round of funding. Oak HC/FT, Struck Capital, Stage 2 Capital, Craft Ventures, Signia Venture Partners and Felicis Ventures — all previous investors — are also participating.
The company has been on a strong growth trajectory for years now, but it specifically saw a surge of activity as the pandemic kicked off. It now has more than 20,000 businesses signed up and using its services, particularly for sales and marketing outreach, but also to help shore up morale among employees.
“Everyone was stuck at home by themselves, saturated with emails,” said Kris Rudeegraap, the CEO of Sendoso, in an interview. “Having a personal connection to sales prospects, employees and others just meant more.” It has now racked up some 3 million gifts sent since launching in 2016.
Sendoso is not disclosing its valuation, but Rudeegraap hinted that it was four times higher than the startup’s Series B valuation from 2020. PitchBook estimates that to be $160 million, which would make the current valuation $640 million. The company has now raised more than $150 million.
Rudeegraap said Sendoso will be using the funds in part to invest in a couple of areas. First, to hire more talent: It has 500 employees now and plans to grow that by 30% by the end of this year. And second, international expansion: It is setting up a European HQ in Dublin, Ireland to complement its main office in San Francisco.
Comcast, Kimpton Hotels, Thomson Reuters, Nasdaq and eBay are among its current customers — so this is in part to serve those customers’ global user bases, as well as to sign up new gifters. He estimated that the bigger market for corporate gifting is about $100 billion annually, so there is a lot to play for here.
The company was co-founded by Rudeegraap and Braydan Young (who is its chief alliances officer) on the back of a specific need Rudeegraap identified while working as a sales executive. Gifting is a very standard practice in the world of sales and marketing, but he was finding a lot of traction with potential and current customers by taking a personalized approach to this act.
“I was manually packing boxes, grabbing swag, coming up with handwritten notes,” he recalled. “It was inefficient, but it worked so well. So I dreamed up an idea: why not be able to click a button in Salesforce to do this automatically? Sometimes the best company is one that solves a pain point of your own.”
And this is essentially what Sendoso does. The startup’s platform integrates with a company’s existing marketing, sales and management software — Salesforce, HubSpot, SalesLoft among them — and then lets users use this to organize and order gifts through these channels, for example as part of larger sales, marketing or HR strategies. The gifts are wide-ranging, covering corporate swag, other physical presents, gift cards and more, and there are also integrations you can include to share gifting across teams of salespeople, to analyze the campaigns and more.
The Sendoso platform itself, meanwhile, positions itself as having the “marketplace selection and logistics precision of Amazon.com.” But Sendoso also believes it’s better than someone simply using Amazon.com itself since it ultimately takes a more personalized approach in how it presents the gift.
“There are a lot of things we do uniquely in terms of what we have built throughout our software, gifting options and logistics centre. We really personalize our gifts at scale with handwritten notes, special boxing, and more,” something that Amazon cannot do, he added. “We have built a lot of unique technology and logistics software that would make it hard for Amazon to compete.” He said that one of Sendoso’s integrations is actually with Amazon, so Sendoso users can order through there, but then the gift is first routed to Sendoso to be repackaged in a nicer way before being sent out.
At its heart, the startup has built a way of knitting together disparate work practices — some codified in software, and some based on human interactions and significantly more infused with randomness, emotion and ad hoc approaches — and built it all into a technology platform. The ability to scale what feels like an otherwise bespoke level of service is what has helped Sendoso gain traction not just with users, but investors, too.
“We believe Sendoso offers the most comprehensive end-to-end gifting platform in the market,” said Priya Saiprasad, a partner at SoftBank Investment Advisers. “Their platform includes a global marketplace of curated vendors, seamless integration with existing tools, global logistics, and deep analytics. As a result, Sendoso serves as the backbone to enterprises’ engagement programs with prospective customers, existing customers, employees and other key stakeholders. We’re excited to lead this Series C round to help Sendoso accelerate its vision.”
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HubSpot acquires media startup The Hustle
Marketing software company HubSpot is acquiring The Hustle, the business and tech media startup behind the popular newsletter of the same name.
Axios broke the news of the deal and reported that it values the startup at around $27 million. HubSpot declined to comment on the deal price, and while tweeting about the acquisition, The Hustle CEO Sam Parr wrote, “Early in my career I was transparent with money. But I didn’t like the result of sharing that stuff. So we’re not disclosing the price and HubSpot has agreed. I’m taking it to the grave!”
In its press release about the acquisition, HubSpot noted that customers are finding its products through content like its YouTube videos and HubSpot Academy.
“By acquiring The Hustle, we’ll be able to better meet the needs of these scaling companies by delivering educational, business and tech trend content in their preferred formats,” said HubSpot’s senior vice president of marketing Kieran Flanagan in a statement. “Sam and his team have a proven ability to create content that entrepreneurs, startups and scaling companies are deeply passionate about, and I’m excited to bring them on board to take that work to the next level.”
BUYERS
We’ve had lots of media co’s try to buy us. We said no. Most ad 1st media companies are dying. And I don’t want to join a sinking, clickbait ship.
I always thought a b2b SAAS biz should buy us. But never thought they’d be bold enough to try.
But HubSpot came along.
— Sam Parr
(@theSamParr) February 3, 2021
HubSpot says The Hustle’s flagship newsletter has 1.5 million subscribers. It also has a subscription offering called Trends and a podcast called My First Million.
“The goal is to build the largest business content network in the world,” Parr tweeted. “Soon, we’ll expand to a variety of mediums on a bunch of different topics and will have really innovative products coming out. We’re also going to hire the best content creators in the world.”
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HubSpot’s new end-to-end sales hub aims to simplify CRM for midmarket customers
HubSpot, the Boston firm that made its name by helping to define the in-bound marketing concept, sees a pandemic landscape that’s changing the way companies sell, forcing more inside sales. Today, the company announced the HubSpot Sales Hub Enterprise at Inbound, their annual conference being held virtually this year.
While the company has been offering a CRM tool for five years now, where they feel they have addressed ease-of-use issues for salespeople, the new tool is about bringing a new end-to-end approach addressing not only the needs of sales people, but management and system admins, as well, says Lou Orfanos, GM and VP of Sales Hub at HubSpot.
“So, this is about [providing customers with a more powerful set of tools] and also just making sure that you can run your sales process end-to-end in our platform. We feel really good about being able to offer that out of the box natively and being able to do everything you need to do [in one tool], which is, I think, pretty unique given the state of the market and having to [cobble] a bunch of things together yourself,” Orfanos explained.
While the previous product was aimed more at smaller businesses, Chief Customer Officer Yamini Rangan, who previously worked at Dropbox, Workday and SAP, says this product is aimed more at midmarket companies with more complex sales workflows.
“What we find is that the customer experience for a 500-person company or for a 1,000-person company is quite different and their expectations are quite different than a 10-person small business. What the Sales Hub Enterprise specifically brings is the ease of use, as well as the powerful features [ … ] to a larger midmarket organization,” Rangan said.
HubSpot specifically sees larger companies in this space, like Adobe, Salesforce and SAP, acquiring different pieces of the stack, then incorporating them into a solution, or customers pulling together different pieces of the stack themselves. The company believes that by building a single integrated solution themselves, it’s going to be naturally easier to use.
“We also find that that’s the size of the company where the tech stack, the sales stack and the marketing stack gets super complex, and they’re spending a lot of time trying to integrate a lot of different point solutions and what we find is having all of this — marketing, CMS, sales underlined by a CRM platform — that gives them visibility that they need to run their entire go-to-market operations,” she said.
While the lower end of the market where HubSpot is targeting probably won’t interest larger competitors, especially Salesforce, as they move up in that market to larger companies, they expect to compete with those companies. Rangan says that she believes by providing this new offering, they are giving customers options they didn’t have before.
But she also sees this as a way into companies as they grow, and if HubSpot can catch them earlier in their evolution, they can grow with them and become their vendor of choice, rather than the usual suspects.
“What we find is that companies will start as a 100-person company and grow to become a 500- or a 1,000-person company, and as they grow up on HubSpot we become their growth suite and we become the core platform of record for them to continue to grow,” she said.
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HubSpot unveils new content management system aimed at marketers
HubSpot, the Boston-based inbound marketing firm, announced today it is launching a standalone content management system designed to make it easy for marketing personnel to add and update content.
While content management, in a sense, has been core to HubSpot from the beginning — many companies use their blogging platform, for example — the company built this one from the ground up for marketers, says chief marketing officer Kipp Bodnar.
“For me, the marketer owning the website is one of the most thankless jobs you have. There’s a lot of pain associated with it. Your CEO asks you to update a bio or your legal team needs a new terms of service. Everybody’s coming at you from everywhere and the actual management of websites has just a huge amount of pain associated with it,” he said.
Angela DeFranco, the company’s director of product management, says that HubSpot wanted to address that problem with a product designed specifically for the marketing team. “We wanted to build a content management system and a suite of tools that could stand on its own and take away the pain of content management, not only from the marketer but also from the developer and the people that help the site run,” she said.
The product is built on the notion of themes that allow the marketer and developer helping to build the site to get the look and feel they want, while balancing what De Franco calls “the paradox between powerful and easy-to-use.”
It allows developers to use the languages they want to build the site, while taking advantage of the HubSpot CMS’s modular structure. At the same time, the modules give marketers a friendly interface to make frequent changes required in a modern website.
“When you actually get into the editor and you’re dragging in, for example, your event registration theme module, it inherits the styling and the characteristic, the look and feel of that theme overall that the developers had set up and custom built for your team,” she said.
“The theme module is really the crux of how we were able to achieve some of these more complex functionality features and power, while also allowing that with drag-and-drop ease of use to build a full site as a marketer,” DeFranco added.
HubSpot was founded in 2006. It raised over $100 million, according to Crunchbase data, before going public in 2014.
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Design may be the next entrepreneurial gold rush
Ten years ago, the vast majority of designers were working in Adobe Photoshop, a powerful tool with fine-tuned controls for almost every kind of image manipulation one could imagine. But it was a tool built for an analog world focused on photos, flyers and print magazines; there were no collaborative features, and much more importantly for designers, there were no other options.
Since then, a handful of major players have stepped up to dominate the market alongside the behemoth, including InVision, Sketch, Figma and Canva.
And with the shift in the way designers fit into organizations and the way design fits into business overall, the design ecosystem is following the same path blazed by enterprise SaaS companies in recent years. Undoubtedly, investors are ready to place their bets in design.
Seed stage design tools, low code/no code software, and/or collaboration tools are getting $10 on $40m term sheets.
Not an isolated case.
Shows their bullishness on these spaces. And some FOMO.
— Bilal Zuberi (@bznotes) August 21, 2019
But the question still remains over whether the design industry will follow in the footprints of the sales stack — with Salesforce reigning as king and hundreds of much smaller startup subjects serving at its pleasure — or if it will go the way of the marketing stack, where a lively ecosystem of smaller niche players exist under the umbrella of a handful of major, general-use players.
“Deca-billion-dollar SaaS categories aren’t born everyday,” said InVision CEO Clark Valberg . “From my perspective, the majority of investors are still trying to understand the ontology of the space, while remaining sufficiently aware of its current and future economic impact so as to eagerly secure their foothold. The space is new and important enough to create gold-rush momentum, but evolving at a speed to produce the illusion of micro-categorization, which, in many cases, will ultimately fail to pass the test of time and avoid inevitable consolidation.”
I spoke to several notable players in the design space — Sketch CEO Pieter Omvlee, InVision CEO Clark Valberg, Figma CEO Dylan Field, Adobe Product Director Mark Webster, InVision VP and former VP of Design at Twitter Mike Davidson, Sequoia General Partner Andrew Reed and FirstMark Capital General Partner Amish Jani — and asked them what the fierce competition means for the future of the ecosystem.
But let’s first back up.
Past
Sketch launched in 2010, offering the first viable alternative to Photoshop. Made for design and not photo-editing with a specific focus on UI and UX design, Sketch arrived just as the app craze was picking up serious steam.
A year later, InVision landed in the mix. Rather than focus on the tools designers used, it concentrated on the evolution of design within organizations. With designers consolidating from many specialties to overarching positions like product and user experience designers, and with the screen becoming a primary point of contact between every company and its customers, InVision filled the gap of collaboration with its focus on prototypes.
If designs could look and feel like the real thing — without the resources spent by engineering — to allow executives, product leads and others to weigh in, the time it takes to bring a product to market could be cut significantly, and InVision capitalized on this new efficiency.
In 2012, came Canva, a product that focused primarily on non-designers and folks who need to ‘design’ without all the bells and whistles professionals use. The thesis: no matter which department you work in, you still need design, whether it’s for an internal meeting, an external sales deck, or simply a side project you’re working on in your personal time. Canva, like many tech firms these days, has taken its top-of-funnel approach to the enterprise, giving businesses an opportunity to unify non-designers within the org for their various decks and materials.
In 2016, the industry felt two more big shifts. In the first, Adobe woke up, realized it still had to compete and launched Adobe XD, which allowed designers to collaborate amongst themselves and within the organization, not unlike InVision, complete with prototyping capabilities. The second shift was the introduction of a little company called Figma.
Where Sketch innovated on price, focus and usability, and where InVision helped evolve design’s position within an organization, Figma changed the game with straight-up technology. If Github is Google Drive, Figma is Google Docs. Not only does Figma allow organizations to store and share design files, it actually allows multiple designers to work in the same file at one time. Oh, and it’s all on the web.
In 2018, InVision started to move up stream with the launch of Studio, a design tool meant to take on the likes of Adobe and Sketch and, yes, Figma.
Present
When it comes to design tools in 2019, we have an embarrassment of riches, but the success of these players can’t be fully credited to the products themselves.
A shift in the way businesses think about digital presence has been underway since the early 2000s. In the not-too-distant past, not every company had a website and many that did offered a very basic site without much utility.
In short, designers were needed and valued at digital-first businesses and consumer-facing companies moving toward e-commerce, but very early-stage digital products, or incumbents in traditional industries had a free pass to focus on issues other than design. Remember the original MySpace? Here’s what Amazon looked like when it launched.
In the not-too-distant past, the aesthetic bar for internet design was very, very low. That’s no longer the case.
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The next service marketplace wave: Vertical market-networks
Ivan Smolnikov
Contributor
Contributor
Ivan Smolnikov is the CEO and founder of Smartcat, the market network platform for the translation industry.
The last few decades have produced many successful marketplaces. We went from goods marketplace pioneers such as eBay and Amazon to simple service marketplaces such as Uber, Lyft, Doordash, Upwork, Thumbtack, TaskRabbit, and Fiverr. But why haven’t we seen many successful B2B service marketplaces?
Table of Contents
- Why Many B2B Service Marketplaces Failed
- What Makes A Successful Service Marketplace?
- Summary: Figure Out How to Unlock Value for All
Why Many B2B Service Marketplaces Failed
Some would argue that companies such as Upwork, Thumbtack, Fiverr, or TaskRabbit are horizontal B2B marketplaces in the sense that they provide access to suppliers of different services. But while businesses do indeed transact with freelancers on such “horizontal” marketplaces, for most service verticals these are limited-value, one-off transactions. They fail to enable long-term business collaborations.
So, such marketplaces haven’t delivered more valuable services nor introduced a new paradigm for how businesses buy specific services at scale and on an on-going basis. Why is that?
Horizontal marketplaces are stuck at the discovery process
Horizontal services marketplaces don’t provide much value beyond matching clients with quality service providers. In other words, they don’t facilitate collaboration between buyers and suppliers, never mind provide ways for the two parties to collaborate more efficiently over time as they engage in follow-on projects.
In essence, the model these marketplaces were built around is not much different from the likes of Craigslist, which put a convenient UX on traditional classified advertisements.
Complex B2B services require workflow and collaboration tools
In their article “What’s Next for Marketplace Startups?,” Andrew Chen and Li Jin found that there aren’t many successful service marketplaces because those offerings are complex, diverse, and difficult to evaluate. It’s challenging to define a successful transaction in a service marketplace because it’s harder to quantify success.
One reason is that several service providers must often work together to complete a single job for a buyer, requiring a complex workflow from end to end. As a result, it’s difficult for marketplaces to not only mediate service delivery but also make it significantly more efficient for buyers and suppliers. If both the buyer and suppliers don’t see a significant efficiency gain other than being initially matched, why would they continue using the marketplace?
(Image via Getty Images / Lidiia Moor)
The $50 billion translation industry is a prime example of complex B2B services marketplaces. On the supply side are roughly 50,000 small agencies around the globe responsible for more than 85% of this $50 billion industry. (Note we are referring to agencies here as suppliers, though they play on both sides.)
On the demand side are businesses that need to translate text from one language into another. Plus about 1,500,000 freelance linguists work in this industry, many of whom are more specialized than professionals in other industries.
Anyone can find and hire a translator on Fiverr or Upwork. Both provide a vast selection of language translators. However, the quality and cost of the translation depends on the translation tools available to the translator as well as their subject expertise.
Neither Fiverr nor Upwork provide computer-aided translation (CAT) and collaborative workflow solutions for users of their platforms. Additionally, neither provides an effective way for all parties to collaborate and continuously improve the efficiency and quality.
But the problem with traditional marketplaces goes even further: Multiple translators and reviewers are usually needed to complete a single job for a customer. Multi-language translation projects are even more complicated. Such projects require multiple service providers and cost estimates, in addition to project management tools.
This is why building a B2B service marketplace is difficult. Service marketplaces must not only connect buyers and suppliers, but also provide tools to enable an efficient and collaborative workflow that reduces wasted time and effort.
Horizontal marketplaces suffer high attrition
In addition to the problems already outlined, traditional marketplaces experience another issue that prevents them from growing and retaining market participants: Buyer and supplier attrition.
Many business services are based on regularly recurring engagements. In some cases, a buyer and a service provider interact daily, requiring a different workflow than gig-marketplaces are built around.
Buyers and suppliers have little motivation to continue interacting on a platform with no workflow automation solutions. They lack a way to improve service efficiency and quality, automate collaboration, payment, paperwork, and other basic processes required for a business.
This is why many traditional marketplaces suffer from slow network effects and high attrition. (A network effect is what happens when a platform, product, or service delivers more value the more it is used.
Think Facebook, eBay, WhatsApp.) Why wouldn’t companies work directly with service providers outside of a marketplace after they were introduced? What incentives keep the service transaction on the marketplace? These are critical questions to answer when building a marketplace.
Traditional marketplaces target broad services, making it nearly impossible to provide workflow solutions for buyers and suppliers. Going forward, successful service marketplaces will be developed relying on an industry-specific SaaS workflow. This will focus buyers and suppliers on longer-term projects and interactions that serve the unique needs of collaborations and transactions in a specific vertical.
Image via Getty Images / OstapenkoOlena
What makes a successful service marketplace?
In “The next 10 Years Will Be About Market Networks,” James Currier, Managing Partner at NFX Ventures, defines a new era of service marketplaces, which he calls market networks.
A market network is a platform that combines elements of an n-sided marketplace, a network, and workflow solutions. An n-sided marketplace is one that requires coordination of multiple supply-side parties to provide a complex service for a single buyer.
Market networks enable multiple buyers and suppliers to interact, collaborate, and transact on the same platform. They provide users with industry-specific workflow solutions that enable efficient, ongoing collaboration on long-term projects. This reduces costs and leads to a higher quality of services and increased overall value for all users.
But how do you actually build a successful market-network platform? While the answer to that varies from company to company, here is our approach. We were able to build a market network for the translation industry that combines the components: network, marketplace, and workflow solution.
STEP 1: SaaS workflow platform unlocks high-value collaboration
The first step to building an effective complex market network is to develop a workflow that is easy for users to embrace. It might not seem like much, but this increases productivity by enabling teams to perform tasks that were previously impossible.
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VCs bet $12M on Troops, a Slackbot for sales teams
Slack wants to be the new operating system for teams, something it has made clear on more than one occasion, including in its recent S-1 filing. To accomplish that goal, it put together an in-house $80 million venture fund in 2015 to invest in third-party developers building on top of its platform.
Weeks ahead of its direct listing on The New York Stock Exchange, it continues to put that money to work.
Troops is the latest to land additional capital from the enterprise giant. The New York-based startup helps sales teams communicate with a customer relationship management tool plugged directly into Slack. In short, it automates routine sales management activities and creates visibility into important deals through integrations with employee emails and Salesforce.
Troops founder and chief executive officer Dan Reich, who previously co-founded TULA Skincare, told TechCrunch he opted to build a Slackbot rather than create an independent platform because Slack is a rocket ship and he wanted a seat on board: “When you think about where Slack will go in the future, it’s obvious to us that companies all over the world will be using it,” he said.
Troops has raised $12 million in Series B funding in a round led by Aspect Ventures, with participation from the Slack Fund, First Round Capital, Felicis Ventures, Susa Ventures, Chicago Ventures, Hone Capital, InVision founder Clark Valberg and others. The round brings Troops’ total raised to $22 million.
Launched in 2015 by New York tech veterans Reich, Scott Britton and Greg Ratner, the trio weren’t initially sure of Slack’s growth trajectory. It wasn’t until Slack confirmed its intent to support the developer ecosystem with a suite of developer tools and a fund that the team focused its efforts on building a Slackbot.
“People sometimes thought of us, at least in the early days, as a little bit crazy,” Reich said. “But now Slack is the fastest-growing SaaS company ever.”
“We think the biggest opportunity in the [enterprise SaaS] category is going to be tools oriented around the customer-facing employee (CRM), and that’s where we are innovating,” he added.
Troops’ tools are helpful for any customer-facing team, Reich explains. Envoy, WeWork, HubSpot and a few hundred others are monthly paying subscribers of the tool, using it to interact with their CRM in a messaging interface and to receive notifications when a deal has closed. Troops integrates with Salesforce, so employees can use it to search records, schedule automatic reports and celebrate company wins.
Slack, in partnership with a number of venture capital funds, including Accel, Kleiner Perkins and Index, has also deployed capital to a number of other startups, like Lattice, Drafted and Loom.
With Slack’s direct listing afoot, the Troops team is counting on the imminent and long-term growth of the company’s platform.
“We think it’s still early days,” Reich said. “In the future, we see every company using something like Troops to manage their day-to-day.”
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How we scaled our startup by being remote first
Michael Risse
Contributor
Contributor
Michael Risse is VP & chief marketing officer at Seeq, a company building advanced applications for engineers to accelerate insights into process manufacturing data. He was formerly a consultant with big data platform and application companies, and prior to that worked with Microsoft for 20 years.
Startups are often associated with the benefits and toys provided in their offices. Foosball tables! Free food! Dog friendly! But what if the future of startups was less about physical office space and more about remote-first work environments? What if, in fact, the most compelling aspect of a startup work environment is that the employees don’t have to go to one?
A remote-first company model has been Seeq’s strategy since our founding in 2013. We have raised $35 million and grown to more than 100 employees around the globe. Remote-first is clearly working for us and may be the best model for other software companies as well.
So, who is Seeq and what’s been the key to making the remote-first model work for us? And why did we do it in the first place?
Seeq is a remote-first startup – i.e. it was founded with the intention of not having a physical headquarters or offices, and still operates that way – that is developing an advanced analytics application that enables process engineers and subject matter experts in oil & gas, pharmaceuticals, utilities, and other process manufacturing industries to investigate and publish insights from the massive amounts of sensor data they generate and store.
To succeed, we needed to build a team quickly with two skill sets: 1) software development expertise, including machine learning, AI, data visualization, open source, agile development processes, cloud, etc. and 2) deep domain expertise in the industries we target.
Which means there is no one location where we can hire all the employees we need: Silicon Valley for software, Houston for oil & gas, New Jersey for fine chemicals, Seattle for cloud expertise, water utilities across the country, and so forth. But being remote-first has made recruiting and hiring these high-demand roles easier much easier than if we were collocated.
Image via Seeq Corporation
Job postings on remote-specific web sites like FlexJobs, Remote.co and Remote OK typically draw hundreds of applicants in a matter of days. This enables Seeq to hire great employees who might not call Seattle, Houston or Silicon Valley home – and is particularly attractive to employees with location-dependent spouses or employees who simply want to work where they want to live.
But a remote-first strategy and hiring quality employees for the skills you need is not enough: succeeding as a remote-first company requires a plan and execution around the “3 C’s of remote-first”.
The three requirements to remote-first success are the three C’s: communication, commitment and culture.
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Brex has partnered with WeWork, AWS and more for its new rewards program
Brex, the corporate card built for startups, unveiled its new rewards program today.
The billion-dollar company, which announced its $125 million Series C three weeks ago, has partnered with Amazon Web Services, WeWork, Instacart, Google Ads, SendGrid, Salesforce Essentials, Twilio, Zendesk, Caviar, HubSpot, Orrick, Snap, Clerky and DoorDash to give entrepreneurs the ability to accrue and spend points on services and products they use regularly.
Brex is lead by a pair of 22-year-old serial entrepreneurs who are well aware of the costs associated with building a startup. They’ve been carefully crafting Brex’s list of partners over the last year and say their cardholders will earn roughly 20 percent more rewards on Brex than from any competitor program.
“We didn’t want it to be something that everyone else was doing so we thought, what’s different about startups compared to traditional small businesses?” Brex co-founder and chief executive officer Henrique Dubugras told TechCrunch. “The biggest difference is where they spend money. Most credit card reward systems are designed for personal spend but startups spend a lot more on business.”
Companies that use Brex exclusively will receive 7x points on rideshare, 3x on restaurants, 3x on travel, 2x on recurring software and 1x on all other expenses with no cap on points earned. Brex carriers still using other corporate cards will receive just 1x points on all expenses.
Most corporate cards offer similar benefits for travel and restaurant expenses, but Brex is in a league of its own with the rideshare benefits its offering and especially with the recurring software (SalesForce, HubSpot, etc.) benefits.
San Francisco-based Brex has raised about $200 million to date from investors including Greenoaks Capital, DST Global and IVP. At the time of its fundraise, the company told TechCrunch it planned to use its latest capital infusion to build out its rewards program, hire engineers and figure out how to grow the business’s client base beyond only tech startups.
“This is going to allow us to compete even more with Amex, Chase and the big banks,” Dubugras said.
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Boston-area startups are on pace to overtake NYC venture totals
Joanna Glasner
Contributor
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Boston has regained its longstanding place as the second-largest U.S. startup funding hub.
After years of trailing New York City in total annual venture investment, Massachusetts is taking the lead in 2018. Venture investment in the Boston metro area hit $5.2 billion so far this year, on track to be the highest annual total in years.
The Massachusetts numbers year-to-date are about 15 percent higher than the New York City total. That puts Boston’s biotech-heavy venture haul apparently second only to Silicon Valley among domestic locales thus far this year. And for New England VCs, the latest numbers also confirm already well-ingrained opinions about the superior talents of local entrepreneurs.
“Boston often gets dismissed as a has-been startup city. But the successes are often overlooked and don’t get the same attention as less successful, but more hypey companies in San Francisco,” Blake Bartlett, a partner at Boston-based venture firm OpenView, told Crunchbase News. He points to local success stories like online prescription service PillPack, which Amazon just snapped up for $1 billion, and online auto marketplace CarGurus, which went public in October and is now valued around $4.7 billion.
Meanwhile, fresh capital is piling up in the coffers of local startups with all the intensity of a New England snowstorm. In the chart below, we look at funding totals since 2012, along with reported round counts.
In the interest of rivalry, we are also showing how the Massachusetts startup ecosystem compares to New York over the past five years.
Who’s getting funded?
So what’s the reason for Boston’s 2018 successes? It’s impossible to pinpoint a single cause. The New England city’s startup scene is broad and has deep pockets of expertise in biotech, enterprise software, AI, consumer apps and other areas.
Still, we’d be remiss not to give biotech the lion’s share of the credit. So far this year, biotech and healthcare have led the New England dealmaking surge, accounting for the majority of invested capital. Once again, local investors are not surprised.
“Boston has been the center of the biotech universe forever,” said Dylan Morris, a partner at Boston and Silicon Valley-based VC firm CRV. That makes the city well-poised to be a leading hub in the sector’s latest funding and exit boom, which is capitalizing on a long-term shift toward more computational approaches to diagnosing and curing disease.
Moreover, it goes without saying that the home city of MIT has a particularly strong reputation for so-called deep tech — using really complicated technology to solve really hard problems. That’s reflected in the big funding rounds.
For instance, the largest Boston-based funding recipient of 2018, Moderna Therapeutics, is a developer of mRNA-based drugs that raised $625 million across two late-stage rounds. Besides Moderna, other big rounds for companies with a deep tech bent went to TCR2, which is focused on engineering T cells for cancer therapy, and Starry (based in both Boston and New York), which is deploying the world’s first millimeter wave band active phased array technology for consumer broadband.
Other sectors saw some jumbo-sized rounds too, including enterprise software, 3D printing and even apparel.
Boston also benefits from the rise of supergiant funding rounds. A plethora of rounds raised at $100 million or more fueled the city’s rise in the venture funding rankings. So far this year, at least 15 Massachusetts companies have raised rounds of that magnitude or more, compared to 12 in all of 2017.
Exits are happening, too
Boston companies are going public and getting acquired at a brisk pace too this year, and often for big sums.
At least seven metro-area startups have sold for $100 million or more in disclosed-price acquisitions this year, according to Crunchbase data. In the lead is online prescription drug service PillPack . The second-biggest deal was Kensho, a provider of analytics for big financial institutions that sold to S&P Global for $550 million.
IPOs are huge, too. A total of 17 Boston-area venture-backed companies have gone public so far this year, of which 15 are life science startups. The largest offering was for Rubius Therapeutics, a developer of red cell therapeutics, followed by cybersecurity provider Carbon Black.
Meanwhile, many local companies that went public in the past few years have since seen their values skyrocket. Bartlett points to examples including online retailer Wayfair (market cap of $10 billion), marketing platform HubSpot (market cap $4.8 billion) and enterprise software provider Demandware (sold to Salesforce for $2.8 billion).
New England heats up
Recollections of a frigid April sojourn in Massachusetts are too fresh for me to comfortably utter the phrase “Boston is hot.” However, speaking purely about startup funding, and putting weather aside, the Boston scene does appear to be seeing some real escalation in temperature.
Of course, it’s not just Boston. Supergiant venture funds are surging all over the place this year. Morris is even bullish on the arch-rival a few hours south: “New York and Boston love to hate each other. But New York’s doing some amazing things too,” he said, pointing to efforts to invigorate the biotech startup ecosystem.
Still, so far, it seems safe to say 2018 is shaping up as Boston’s year for startups.
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