Matthew Prince
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Merge raises $4.5M to help B2B companies build customer-facing integrations
Merge, a startup that helps its users build customer-facing integrations with third-party tools, today announced that it has raised a $4.5 million seed round led by NEA. Additional angel investors include former MuleSoft CEO Greg Schott, Cloudflare CEO Matthew Prince, Expanse co-founders Tim Junio and Matt Kraning, and Jumpstart CEO Ben Herman.
Launched in 2020, the core focus of Merge is to give B2B companies a unified API to access data from what is currently about 40 HR, payroll, recruiting and accounting platforms, with plans for expanding to additional areas soon. But Merge co-founders Shensi Ding and Gil Feig, who have been lifelong friends and previously worked at companies like Expanse and Jumpstart, stress that the service isn’t aiming to replace workflow tools Workato or Zapier.
Image Credits: Merge
“What we built is more similar to Plaid than MuleSoft or other things,” Feig said. “We built a unified API, so we’re fully embedded in a customer’s product and they build one integration with us and can automatically offer all these integrations to their customers. On top of that, we offer what we call integrations management, which is a suite of tools to automatically detect issues where the customer would have to get involved — automatically detect that stuff and handle it without ever having to involve engineering again.”
When Merge’s systems detect issues with an integration, maybe because a data schema in an API response has changed without notice (which happens with some regularity), Merge’s engineers can fix that within minutes, in part because the teams also built an internal no-code tool for building and managing these integrations.
Image Credits: Merge
As Ding also noted, B2B buyers today also simply expect their tools to feature integrations with the service they use. “Companies, when they purchase a vendor, they expect that vendor to have integrations with all the other vendors that they own,” she said. “They don’t want to have to purchase a vendor and then purchase a workflow product and then connect those products.”
And while Merge’s focus right now is squarely on a few verticals, the plan is to expand this to far more areas shortly, likely starting with CRM. “Salesforce has a pretty large market share, so we thought that it wasn’t going to be as interesting of a market,” Ding said. “But it turns out that their API is so complex that customers would still prefer to integrate with us instead if we simplify it for them.”
Ding and Feig tell me the company, which came out of stealth about two months ago, already has about 100 organizations on its platform, varying from seed-stage companies to publicly listed enterprises. The team credits its focus on security and reliability (and its SOC II compliance) with being able to bring on some of these larger companies despite being a seed-stage company itself.
To monetize the service, Merge offers a free tier (up to 10,000 API requests per month) and charges $0.01 per API request for additional usage. Unsurprisingly, the company also offers customized enterprise plans for its larger customers.
“The time and expense associated with building and maintaining myriad API integrations is a pain point we hear about consistently from our portfolio companies across all industries,” said NEA managing general partner Scott Sandell, who will join the company’s board. “Merge is tackling this ubiquitous problem head-on via their easy-to-use, unified API platform. Their platform has broad applicability and is a massive upgrade for any software company that needs to build, manage, and maintain multiple API integrations.”
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Decrypted: DEA spying on protesters, DDoS attacks, Signal downloads spike
This week saw protests spread across the world sparked by the murder of George Floyd, an unarmed Black man, killed by a white police officer in Minneapolis last month.
The U.S. hasn’t seen protests like this in a generation, with millions taking to the streets each day to lend their voice and support. But they were met with heavily armored police, drones watching from above, and “covert” surveillance by the federal government.
That’s exactly why cybersecurity and privacy is more important than ever, not least to protect law-abiding protesters demonstrating against police brutality and institutionalized, systemic racism. It’s also prompted those working in cybersecurity — many of which are former law enforcement themselves — to check their own privilege and confront the racism from within their ranks and lend their knowledge to their fellow citizens.
THE BIG PICTURE
DEA allowed ‘covert surveillance’ of protesters
The Justice Department has granted the Drug Enforcement Administration, typically tasked with enforcing federal drug-related laws, the authority to conduct “covert surveillance” on protesters across the U.S., effectively turning the civilian law enforcement division into a domestic intelligence agency.
The DEA is one of the most tech-savvy government agencies in the federal government, with access to “stingray” cell site simulators to track and locate phones, a secret program that allows the agency access to billions of domestic phone records, and facial recognition technology.
Lawmakers decried the Justice Department’s move to allow the DEA to spy on protesters, calling on the government to “immediately rescind” the order, describing it as “antithetical” to Americans’ right to peacefully assembly.
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Why CEOs should spend up to half their time recruiting
Hiring the right people may be the most important thing you do when you start a new company. But how much time should founders spend on hiring when there are so many other competing demands?
Last week, we discussed team-building and several other issues during a panel on the Extra Crunch stage at Disrupt Berlin with Cloudflare CEO Matthew Prince and Red Points CEO Laura Urquizu.
“I was looking through early emails the other day,” said Prince . “I had forgotten how hard it was to hire people in the very beginning. I think that [Cloudflare co-founder] Michelle [Zatlyn] and I spent probably at least 70% of our time in the first two years just begging people to work for us.”
While it’s a hard job to get right, Prince said he didn’t believe that this was a job he should have outsourced to recruiters. “Fundamentally, as the founder and leader of an organization, your job is to attract and retain the best best possible people,” Prince argued. “And so even to this day, at least a third of my time is spent on recruiting.”
Red Points co-founder Urquizu agreed, noting that she also spends at least a third of her time on recruiting. But she also argued that as you grow as a company, your needs may change and you may need to let some people go.
“I usually say that what brought us here is not going to bring us to the next stage — and that includes people,” she said. “It’s not pleasant and it is very hard when you have to say ‘bye’ to people that have been with you in the journey for two years, or for one year, or three years, but then you need to find the next people that are gonna come along with you in the next stage.”
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5 unicorns that will probably go public in 2019 (besides Uber and Lyft)
There’s been plenty of fanfare surrounding Uber and Lyft’s initial public offerings — slated for early 2019 — since the two companies filed confidential IPO paperwork with the U.S. Securities and Exchange Commission in early December. On top of that, public and private investors have had plenty to say about Slack and Pinterest’s rumored 2019 IPOs but those aren’t the only “unicorn” exits we should expect to witness in the year ahead.
Using its proprietary company rating algorithm, data provider CB Insights ranked five billion dollar companies most likely to perform IPOs next year in its latest tech IPO report. The algorithm analyzes non-traditional public signals, including hiring activity, web traffic and mobile app data to make its predictions. These are the startups that topped their list.
Peloton
Peloton Co-Founder and CEO John Foley speaks onstage during TechCrunch Disrupt SF 2018 on September 6, 2018 in San Francisco, California. (Photo by Kimberly White/Getty Images for TechCrunch).
Peloton, dubbed the “Netflix of fitness,” has raised nearly $1 billion in venture capital funding in the six years since it was founded by John Foley, most recently raising $550 million at a $4 billion valuation. The manufacturer of tech-enabled exercise equipment is more than doubling in size every year and is “weirdly profitable,” an unusual characteristic for a venture-backed business of its age. Headquartered in New York, Peloton doesn’t have any public IPO plans, though Foley recently told The Wall Street Journal that 2019 “makes a lot of sense” for its stock market debut.
Select investors: L Catterton, True Ventures, Tiger Global
Cloudflare
Cloudflare co-founder and CEO Matthew Prince appears on stage at the 2014 TechCrunch Disrupt Europe/London. (Photo by Anthony Harvey/Getty Images for TechCrunch)
Cybersecurity unicorn Cloudflare is likely to transition to the public markets in the first half of 2019 in what is poised to be a strong year for IPOs in the security industry. The web performance and security platform is said to be preparing for an IPO at a potential valuation of more than $3.5 billion after last raising capital in 2015 at a $1.8 billion valuation. Since it was founded in 2009, the San Francisco-based company has raised just north of $250 million in VC funding. CrowdStrike, another security unicorn, is also on track to go public next year and it wouldn’t be surprising to see Illumio and Lookout make the jump to the public markets as well.
Select investors: Pelion Venture Partners, NEA, Venrock
Zoom
San Jose-based Zoom Video Communications has reportedly tapped Morgan Stanley to lead its upcoming IPO.
Zoom, a provider of video conferencing services, online meeting and group messaging tools that’s raised $160 million in VC cash to date, is eyeing a multi-billion IPO in 2019 and has reportedly hired Morgan Stanley to lead the offering. Founded in 2011, the company most recently brought in a $100 million Series D financing, entirely funded by Sequoia, at a $1 billion valuation in early 2017. Based in San Jose, Zoom is hoping to garner a valuation significantly larger than $1 billion when it IPOs, according to Reuters.
Select investors: Sequoia, Emergence Capital Partners, Horizons Ventures
Rubrik
Data management company Rubrik co-founder and CEO Bipul Sinha.
Data management company Rubrik has quietly made moves indicative of an impending IPO. The startup, which provides data backup and recovery services for businesses across cloud and on-premises environments, hired former Atlassian chief financial officer Murray Demo as its CFO earlier this year, as well as its first chief legal officer, Peter McGoff. Palo Alto-based Rubrik was valued at over of $1 billion with a $180 million funding round in 2017. The company has raised nearly $300 million to date.
Select investors: Lightspeed Venture Partners, Greylock, Khosla Ventures
Medallia
Medallia, a customer experience management platform that’s nearly two decades old, may finally become a public company in 2019. The San Mateo-based company, which has been rumored to be planning an IPO for several years, hired a new CEO this year and reported $250 million in GAAP revenue for the year ending Jan. 31, 2018, according to Forbes. Medallia hasn’t raised capital since 2015, when it secured a $150 million funding deal at a $1.2 billion valuation. It has raised a total of just over $250 million.
Select investor: Sequoia
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Cloudflare introduces free network monitoring tool for mobile app developers
When Cloudflare acquired Neumob, a mobile performance startup last fall, it was a sign that the company wanted to move beyond web performance into helping mobile app developers understand what’s happening at the network level. Today, the company introduced Cloudflare Mobile SDK, a free tool which could help developers understand network-level performance problems.
Cloudflare’s co-founder and CEO Matthew Prince says developers have had tools at their disposal to understand why apps crash on the device itself, but they have lacked visibility into the network, which can be a major contributor to app instability.
Developers access the monitoring capability by adding a couple of lines of code to their iOS or Android apps. After that, they can log into a web console to see network performance metrics. The tool is designed to surface problems like dropping packets because of a poor signal or moving from WiFi to a mobile a network, each of which can cause an app to hang or otherwise misbehave.
Screenshot: Cloudflare
The tool gives you the ability to see how the network is performing in various parts of the world and where you are seeing issues and as it gathers and display information, it should help correlate performance issues with a flaky network and the impact that could be having on app performance.
Over time, he says they will be partnering with other monitoring tools to give developers a single place to check their performance issues. “Our goal is how can we get networks to perform better and give app developers better insight about network behavior.” Prince said.
Prince says, for starters they are providing some basic suggestions on how to improve performance, but in the future, they plan to integrate the network monitoring tool more deeply with the rest of the Cloudflare toolkit to make it easier to tweak performance problems.
Cloudflare also sees this as a way to build a better understanding of how networks are performing in general, and as they pull this data together, they plan to publish a mobile network reliability report. “We expect as this gets built into [more apps], and gives us visibility into mobile network providers, we will able to see who is providing the highest level of service and who has spotty or bad data services,” he explained.
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CloudFlare Hints IPO Coud Be Coming, But Not This Year
Just this morning, CloudFlare announced a $110 million round led by Fidelity Investments, and on stage today at TechCrunch Disrupt, Michelle Zatlyn, CloudFlare’s head of customer experience, told TechCrunch’s Frederic Lardinois the company definitely won’t be IPOing this year — but she hinted that it’s out there on the horizon. When a big round is led by… Read More
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