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Biden’s infrastructure plans could boost startups

Published November 17, 2020

As President-elect Joe Biden readies his transition team and sets the agenda for his first 100 days in office, startups can expect to see some movement on long-stalled infrastructure initiatives that could mean big boosts to their business.

Infrastructure is high on the list of priorities of the incoming Biden Administration as the former vice president hopes to make good on his campaign promise to “build back better.”

American infrastructure has been crumbling for decades without significant investment from the federal government, and much of what will be replaced will also be upgraded with new technology, according to people familiar with the Biden plan.

A Biden presidency doesn’t need a Green New Deal to make progress on climate change

That means tech companies focused on next-generation telecommunications and utility infrastructure, transportation, housing and construction tech around energy efficiency could see new dollars pour in over the next four years.

“Infrastructure and build out of the clean energy economy … doesn’t necessarily mean large wind or large solar projects. It could mean advanced metering … it can be new engine technologies,” said Dan Goldman, a managing partner at Clean Energy Ventures. “We think that that can be a huge opportunity for job creation … not only putting people back to work but putting people back to work in high quality jobs.”

And there’s a willingness to encourage these infrastructure projects in less partisan ways in states like Massachusetts, Virginia and Florida, which are actively building out electric vehicle infrastructure and renewable energy projects, Goldman said.

While the federal government will ultimately be distributing the cash, startups can expect to see the spending actually come from municipalities and state governments, which often have a better understanding of local needs and where the money should go.

Next-generation energy infrastructure

The electrification of everything — a component of any zero-carbon movement — requires significant upgrades to existing power infrastructure. That means everything from systems management technologies to distribution facilities to ways to store power that can be moved on to the grid.

“Without that infrastructure investment it gets quite challenging,” said Abe Yokell, a co-founder and managing partner of Congruent Ventures.

He pointed to large-scale energy storage technologies as one solution, but management systems for utilities will be another area of interest.

Those infrastructure initiatives will likely mean good things for battery companies like Form Energy, which signed its first major contract with Great River Energy earlier this year; or Antora and Malta, which store energy as heat; or Quidnet, which has a pumped hydroelectric play for large-scale energy storage by pumping water into the gaps between rocks underground that creates pressure and can force water back up through a generator.

Other large-scale energy storage companies working on developing and installing batteries could benefit as well. That means good things for Tesla, which has a few major battery installs under its belt, and Fluence, which manages and operates big install projects.

Natel Energy, another startup working on energy storage (and generation) using hydropower, could also find its technology in the mix, according to company founder, Gia Schneider.

Schneider sees three potential pitches for her company’s technologies. “Climate change is water change,” she said. “We have a bucket in energy, a bucket of stuff in environmental and a bucket of stuff in working lands.”

Handle.com helps independent construction workers get paid on time

Published March 13, 2020

From long payment cycles to antiquated processes on how to bill workers, the hefty inefficiencies of the construction industry are long overdue for innovation.

Enter startups such as the large venture-backed Katerra and recently public companies such as Procore. Still, independent contractors or workers from small family businesses often can’t afford hefty fees from SaaS platforms promising better management. Or, they don’t have a parent company behind them to foot the bill.

To help the Bob’s Plumbings and Nicky Roofings of the world get paid on time, Handle.com has raised $4.5 million in known venture capital funding and $20 million in debt financing. The startup was a YC grad, born from a trio of founders: Blake Robertson, Chris Woodard and Patrick Hogan.

The startup uses a mix of software and a financing line to help construction workers get paid on time, a weakness in the current industry, per co-founder Hogan.

Our 9 favorite startups from Y Combinator W19 Demo Day 2

“Construction is one of the largest operations in the country in terms of amount spent,” co-founder Hogan said. “We have a contractor that we work with, that if he does a job for Hilton Hotels and has a $200,000 invoice, it takes over one year for them to pay him back. The impact on his business is substantial.”

In the construction industry, workers often have to submit their own billing, which is lengthy, and there’s room for error. Using software, the startup helps workers automate invoices to limit mistakes, and get documentation to clients on time.

In a legacy industry, oftentimes it’s hard to get both parties to adopt. So that’s why Handle.com made it so only the workers need to use the platform. Along with small businesses, it also helps larger contractors handle massive influxes of invoices.

“It’s not a two-way street: it only requires the party who is going to be receiving the payment to use it,” Hogan said. “If you have to get two parties to agree to use a solution, it’s very difficult, because you have a two-sided marketplace type of problem. In construction, one party has more leverage than the other party. You may have reasons for one party to not have things more efficient.”

Now on to Handle.com’s financing side of its business. As every startup ever becomes a bank, Handle.com differs from the group in that it had a software fintech mix since launching out of YC. And in this case, Handle.com secured $20 million in debt equity so credit financing could be part of its business model.

Handle.com uses a credit line to become a lender to construction workers who are waiting for a check to process and need capital before they can head to their next project. The startup claims that construction workers traditionally have a hard time securing capital loans from banks. “Contractors and subcontractors, Woodard said, “don’t have access [to capital], and it’s the ceiling on their business because they can only grow as fast as they’re getting paid back.”

Every startup is a bank — or wants to be

The startup says that of the customers that use its software, “a growing portion” use the financing option too.

As for growth, when Handle.com left YC it was six weeks in and collected $22,800 in monthly revenue. The startup declined to share revenue and growth statistics on the cuff of this funding round, beyond that it has been increasing its customer base by “an average of 30% month over month over the past year.”

Market map: the 200+ innovative startups transforming affordable housing

Published May 13, 2019

Daniel Wu
Contributor

Dan Wu is a privacy counsel and legal engineer at Immuta. He holds a JD from Harvard University, and is a PhD candidate for Social Policy and Sociology at The Harvard Kennedy School.

Reducing Construction Costs

This is one of the top three challenges developers face, exacerbated by rising building material costs and labor shortages.

The 10 largest US venture rounds of 2018

Published December 26, 2018

Three U.S. companies raised more than $1 billion in just one funding round in 2018, a year in which total deal value for U.S. startups is expected to surpass $100 billion for the first time.

For the most part, it was the usual suspects, and yes, SoftBank was an accessory in many of these rounds. Here’s a look at the 10 largest venture rounds of 2018.

Epic Games: $1.25 billion

The video game Fortnite Battle Royale was the star of the year 2018; more than 200 million players worldwide are registered online. (Photo Illustration by Chesnot/Getty Images)

Given the absolute phenomenon Fortnite became in just one year from its original release, it was no surprise private investors wanted to put money into Epic Games, the company behind it. In October, Epic Games announced a whopping $1.25 billion round at $15 billion valuation from KKR, Iconiq Capital, Smash Ventures, Vulcan Capital, Kleiner Perkins and Lightspeed Venture Partners to continue growing its Fortnite empire. That game alone is expected to bring in $2 billion in revenue in 2018 and reports 200 million registered players — not too shabby.

Cary, N.C.-based Epic Games’ monstrous fundraise was a standout in a year when funding for gaming and esports startups really took off. According to Crunchbase, global venture investment in the industry increased nearly 75 percent, to $701 million in the first half of 2018. Given Epic’s round, Discord’s $150 million infusion of capital this week and several others since June, the second half of 2018 undoubtedly set major records in the space.

Uber: $1.2 billion

Travis Kalanick, co-founder and former chief executive officer of Uber Technologies Inc., speaks during the TiE Global Entrepreneurs Summit in New Delhi, India, on Friday, December 16, 2016. Kalanick said the company will introduce Uber Moto across India. Photographer: Udit Kulshrestha/Bloomberg via Getty Images

One of the largest rounds of 2018 was also one of the first big financings of the year. To be fair, the negotiations behind Uber’s $1.2 billion SoftBank investment and much of the press coverage surrounding it came in 2017, but the deal officially closed in January. This deal was monumental for many reasons. First of all, it made Uber founder and former chief executive officer Travis Kalanick a billionaire — not just on paper — and it cemented SoftBank’s position as the ride-hailing giant’s largest shareholder.

The financing brought San Francisco-based Uber’s total raised to date to just over $20 billion at a valuation said to be around $72 billion. Of course, Uber has since privately filed for an initial public offering slated for the first quarter of 2019.

Juul Labs: $1.2 billion

Juul Labs, the maker of the popular e-cigarette brand that has recently come under fire from health officials over its popularity with young adults, plans to introduce a line of lower-nicotine pods. Photographer: Gabby Jones/Bloomberg via Getty Images

Juul, one of the buzziest companies of 2018, raised $1.2 billion from private investors Tiger Global, Fidelity and more in mid-2018. Then, this month, the developer of e-cigarettes popular among teenagers accepted a $12.8 billion investment from the makers of Marlboro that valued it at $38 billion. Not only has Juul created significant controversy surrounding the ethics, or lack thereof, of its core product and its marketing to the younger generation in a short time, but it has also accumulated value at a clip rarely seen before. Juul, for context, surpassed a $10 billion valuation just seven months after its first round of VC backing — that’s four times faster than Facebook.

2019 is poised to be an interesting year for San Francisco-based Juul as it navigates public scrutiny, regulations and the completion of its partnership with Altria Group, which, according to Juul’s CEO Kevin Burns, will “help accelerate [Juul’s] success switching adult smokers.”

Magic Leap: $963M

Magic Leap’s flagship product, the Magic Leap One AR headset, began shipping to consumers this year.

It wouldn’t be an end of the year round-up of the largest VC deals without any mention of Magic Leap, the extremely well-funded virtual reality company. Tucked away in Plantation, Fla., 8-year-old Magic Leap has closed round after round, raising more than $2 billion to develop its hardware and software. The key investors in this year’s big round, which valued the company at $6.3 billion, were Temasek and AT&T, which announced it would become the exclusive “wireless distributor” of Magic Leap products in the U.S. starting this summer. Magic Leap is also backed by Google, Alibaba and Axel Springer.

Magic Leap is real and it’s a janky marvel

Not only did Magic Leap land one of the largest VC deals this year, but it also finally began shipping to consumers its flagship product, the Magic Leap One AR headset. That was a long time coming — years, in fact. So long, many doubted whether the buzzy headsets would ever see the light of day. Now, the headsets are available to buyers in 48 states, though it’s worth mentioning they cost more than two grand.

Instacart: $600M

Founder and CEO of Instacart Apoorva Mehta and moderator Megan Rose Dickey speak onstage during TechCrunch Disrupt SF 2016 at Pier 48 on September 14, 2016 in San Francisco, California. (Photo by Steve Jennings/Getty Images for TechCrunch)

Instacart has a lofty goal of delivering groceries to every household in the U.S., and it needs a lot of cash to get there. The company has raised VC every year since it completed the Y Combinator startup accelerator in 2012, and 2018 was no different. In October, the service brought in $600 million at a $7.6 billion valuation in a round led by D1 Capital Partners. Headquartered in San Francisco, the company has raised $1.6 billion to date from Coatue Management, Thrive Capital, Canaan Partners, Andreessen Horowitz and several others.

Instacart CEO Apoorva Mehta told TechCrunch at the time that the startup didn’t really need the capital and that this was more of an “opportunistic” battle. The market is hot, after all, and Instacart has ambitious plans to scale and it has a fierce competitor in Amazon to take on. As for an IPO, Mehta said “it will be on the horizon.”

Katerra: $865M

SoftBank-backed Katerra says it’s brought in more than $1.3 billion in bookings for new construction ranging from residential to hospitality and student housing.

One of SoftBank’s first major bets of 2018 was on construction technology, with an $865 million investment in Katerra at a $3 billion valuation out of its Vision Fund. Katerra, a tech startup based out of Menlo Park, develops, designs and constructs buildings. At the time of its January fundraise, Katerra told TechCrunch it had brought in more than $1.3 billion in bookings for new construction ranging from residential to hospitality and student housing. Founded in 2015 by three former private equity barons, the company has raised a total of $1.1 billion to date from SoftBank, Foxconn, Greenoaks Capital and others.

In June, Katerra announced it would merge with KEF Infra, an offsite manufacturing technology specialist, and would begin operating in India and the Middle East markets.

Opendoor: $725M

Yet another SoftBank investment, San Francisco-based Opendoor is also backed by Fifth Wall Ventures, GV, Andreessen Horowitz and more.

Opendoor’s two big SoftBank-backed investments this year totaled $725 million, valuing the company at $2.5 billion. The deal gave SoftBank a minority stake in Opendoor, an online real estate marketplace, and put one of its five managing directors, Jeff Housenbold, on the company’s board of directors. The round brought Opendoor’s total funding to slightly more than $1 billion — most of which it acquired in 2018, a major year for the company. Founded in 2014, the San Francisco-based startup is also backed by Fifth Wall Ventures, GV, Andreessen Horowitz and more.

According to TechCrunch’s Connie Loizos, Housenbold had hoped to work with Opendoor co-founder and CEO Eric Wu for some time. “The minute he joined [SoftBank] he reached out to me and let me know … saying if there was an opportunity to work together, to reach out to him,” Wu said.

Lyft: $600M

Uber competitor Lyft expanded aggressively in 2018, raised hundreds of millions in additional venture capital funding, and filed confidentially to go public.

Lyft managed to stay quite busy this year. Not only did the ridesharing company raise a $600 million round at a $15.1 billion valuation, it also acquired bike-share operator Motivate and filed confidentially to go public. Founded in 2012 by Logan Green and John Zimmer, the company has long competed with Uber, and will continue to do so as the pair race to the public markets in early-2019. Lyft, much smaller than Uber and only active in the U.S. and Canada, has raised nearly $5 billion in venture backing from KKR, Mayfield, Didi Chuxing, Floodgate and others.

San Francisco-based Lyft has spent much of the last two years expanding rapidly across the U.S. market, as well as pursuing its autonomous vehicle ambitions.

Automation Anywhere: $550M

Automation Anywhere raised a monstrous $550 million Series A in 2018, with support from the SoftBank Vision Fund.

The only surprise to make this list is Automation Anywhere, a 15-year-old provider of robotic process automation. The company raised a total of $550 million in Series A funding, a large chunk of which came from the SoftBank Vision Fund, as well as NEA, General Atlantic and Goldman Sachs. The round valued Automation Anywhere at $2.6 billion. According to PitchBook, this was the first round of institutional backing for the San Jose, Calif.-based company.

In a conversation with TechCrunch, Automation Anywhere CEO Mihir Shukla said they were attracted to SoftBank because of Masayoshi So — the CEO and founder of SoftBank: “[He} has a vision and he is investing in foundational platforms that will change how we work and travel. We share that vision.”

Peloton: $500M

SAN FRANCISCO, CA – SEPTEMBER 06: Peloton Co-Founder/CEO John Foley speaks onstage during Day 2 of TechCrunch Disrupt SF 2018 at Moscone Center on September 6, 2018 in San Francisco, California. (Photo by Kimberly White/Getty Images for TechCrunch)

Peloton’s growth exploded in 2018 as it launched its $4,000 treadmill, doubled down on original fitness streaming content and raised an additional $500 million in equity funding at a $5 billion valuation. The New York-based startup, often referred to as the “Netflix of fitness,” has raised nearly $1 billion in venture capital funding in the six years since it was founded by John Foley. It’s backed by L Catterton, True Ventures, Tiger Global and others.

It’s likely Peloton will take the public markets plunge in 2019 much like Uber and Lyft. Foley earlier this year told The Wall Street Journal that though he doesn’t have any concrete plans, 2019 “makes a lot of sense” for its stock market debut.

5 unicorns that will probably go public in 2019 (besides Uber and Lyft)

Construction startup Katerra gets $865M in Softbank’s latest mega-round

Published January 24, 2018

There’s another big financing round led by Softbank’s mammoth vision fund today, with the firm this time pouring $865 million into a construction startup called Katerra that’s a one-stop shop for getting a building up off the ground. Katerra is creating a full-stack provider for, well, buildings. The company runs the process of getting a building up and people inside it from… Read More