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ZeroDown, valued at $150M, plans to take on Zillow
Days out of Y Combinator, venture capitalists valued ZeroDown, a financial and real estate technology startup, at $150 million, the company has confirmed. The startup had the perfect match of experienced founders and eye-popping ambitions to carve a new path to home ownership.
“I think we will be known as a company that makes it easier to buy a home in every single aspect,” ZeroDown co-founder and chief executive officer Abhijeet Dwivedi tells TechCrunch.
The startup, which has raised $30 million in total equity funding and more than $110 million in debt financing to help Bay Area residents make down payments on homes, now plans to take on Zillow and Redfin with its new home search engine.
The business, founded by former Zenefits chief operating officer Dwivedi, Laks Srini, Zenefits’ former chief technology officer, and Hari Viswanathan, a former Zenefits staff engineer, was founded last year and quickly landed backing from Sam Altman, followed by consumer technology venture capital fund Goodwater Capital. Targeting those in the Bay Area, where costs of home ownership are amongst the highest in the country, ZeroDown charges $10,000 to purchase your home outright and front your entire down payment.
That is, however, if your home is priced between approximately $550,000 and $1,750,000 and you have an individual or combined salary of more than $200,000, stock options and some money put away (or some variation of this). If you meet these criteria, ZeroDown will purchase your home and lease it to you. The goal is to eliminate one of the largest pain points of home-buying, the down payment, and facilitate more real estate purchases.
The company says it intends to expand the service outside the greater San Francisco area to cities like Denver, Seattle and Austin, but given the $10,000 price tag and large population of wealthy tech workers in the Bay, the business could flourish in this area without expanding.
With the launch of its home search engine, Dwivedi says users will be able to learn about more than just the square footage of a home. The tool tells users whether a potential home is naturally lit, if it has a large backyard, if it has a decent commute to your work and to various schools and, most importantly, whether it’s dog friendly.
ZeroDown has also partnered with a number of San Francisco-based tech companies, including Pinterest, Postmates and Square, to provide their employees a rebate if they choose to purchase a home using ZeroDown.
“We know first-hand what companies need to support a great quality of life and keep their employees in the Bay Area,” Dwivedi said. “A part of that is loving where you live — feeling part of a local community.”
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‘We are seeing volume and interest in Peloton explode,’ says company president on listing day
This morning, Peloton (NASDAQ: PTON), the tech-enabled stationary bicycle and fitness content streaming company, raised $1.2 billion in its NASDAQ initial public offering. Despite dropping more than 10% in its first day of trading — ultimately closing down 11% at $25.84 per share — the IPO was a bona fide success. Peloton, once denied (over and over again) by VC skeptics, now has hundreds of millions of dollars to take its business into a new era. One in which, the media, hardware, software, logistics and social company attempts to become a generation-defining company akin to Apple.
Founded in 2012 — six years after Soul Cycle opened its first cycling studio in New York’s Upper East Side and two years before a Soul Cycle founder, Ruth Zukerman, jumped ship to launch her own indoor cycling business, Flywheel Sports — a man by the name of John Foley made the ambitious, some might say foolish, decision to start a company that would sell these exercise bikes direct-to-consumer. That way, you could take a Soul Cycle class, in essence, in the comfort of your own home. Even better, technology would improve the experience.
As my colleague Josh Constine recently described it, these bikes come outfitted with a 22-inch Android screen, transforming an outdated exercising experience and bringing it into 2019: “It makes lazy people like me work out. That’s the genius of the Peloton bicycle. All you have to do is Velcro on the shoes and you’re trapped. You’ve eliminated choice and you will exercise,” Constine writes.
Peloton’s ability to get people exercise — a feature driven by its talented instructors (some of whom were poached from competitor Flywheel Sports) — ultimately had venture capital investors funneling $1 billion, roughly, into the business. Today, Peloton operates dozens of showrooms across the U.S., counts 1.4 million total community members — defined as any individual who has a Peloton account — and over 500,000 paying subscribers. Why? Because the company, as stated in its IPO prospectus, “sells happiness.”
“Peloton is so much more than a Bike — we believe we have the opportunity to create one of the most innovative global technology platforms of our time,” writes Foley. “It is an opportunity to create one of the most important and influential interactive media companies in the world; a media company that changes lives, inspires greatness, and unites people.”
Peloton’s flagship product, a tech-enabled stationary bike.
Peloton’s community coupled with the high margins on sales of its $2,245 bikes had the company reporting $915 million in total revenue for the year ending June 30, 2019, an increase of 110% from $435 million in fiscal 2018 and $218.6 million in 2017. Its losses, meanwhile, hit $245.7 million in 2019, up significantly from a reported net loss of $47.9 million last year.
What’s next for Peloton? The opportunities are endless, given the company’s firm seat at the intersection of hardware, software, media content and more. A third product may be in the works, expansion to international markets or new instructors. Peloton is going after a massive market ripe for disruption. What’s certain is that we’ll see a whole lot of cash flowing into fitness tech copycats in the next couple of years.
Peloton, following a number of lukewarm consumer IPOs (Uber), nearly doubled its valuation to $8.1 billion this morning after pricing its IPO at the top of its range, $29 per share. To answer some of our most burning questions, we chatted with Peloton’s president William Lynch, the former CEO of Barnes & Noble, about the float.
The following conversation has been edited for length and clarity.
Peloton president and former Barnes & Noble CEO William Lynch.
Kate Clark: What’s next for Peloton?
William Lynch: We now have over a billion in capital to fuel more growth, especially in the area of product innovation.
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At TechCrunch Disrupt, insights into key trends in venture capital
At TechCrunch Disrupt, the original tech startup conference, venture capitalists remain amongst the premier guests.
VCs are responsible for helping startups — the focus of the three-day event — get off the ground, and, as such, they are often the most familiar with trends in the startup ecosystem, ready to deliver insights, anecdotes and advice to our audience of entrepreneurs, investors, operators, managers and more.
In the first half of 2019, VCs spent $66 billion purchasing equity in promising upstarts, according to the latest data from PitchBook. At that pace, VC spending could surpass $100 billion for the second year in a row. We plan to welcome a slew of investors to TechCrunch Disrupt to discuss this major feat and the investing trends that have paved the way for recording funding.
Mega-funds and the promise of unicorn initial public offerings continue to drive investment. SoftBank, of course, began raising its second Vision Fund this year, a vehicle expected to exceed $100 billion. Meanwhile, more traditional VC outfits revisited limited partners to stay competitive with the Japanese telecom giant. Andreessen Horowitz, for example, collected $2.75 billion for two new funds earlier this year. We’ll have a16z general partners Chris Dixon, Angela Strange and Andrew Chen at Disrupt for insight into the firm’s latest activity.
At the early-stage, the fight for seed deals continued, with larger funds moving downstream to muscle their way into seed and Series A financings. Pre-seed has risen to prominence, with new funds from Afore Capital and Bee Partners helping to legitimize the stage. Bolstering the early-stage further, Y Combinator admitted more than 400 companies across its two most recent batches,
We’ll welcome pre-seed and seed investor Charles Hudson of Precursor Ventures and Redpoint Ventures general partner Annie Kadavy to give founders tips on how to raise VC. Plus, Y Combinator CEO Michael Seibel and Ali Rowghani, the CEO of YC’s Continuity Fund, which invests in and advises growth-stage startups, will join us on the Disrupt Extra Crunch stage ready with tips on how to get accepted to the respected accelerator.
Moreover, activity in high-growth sectors, particularly enterprise SaaS, has permitted a series of outsized rounds across all stages of financing. Speaking on this trend, we’ll have AppDynamics founder and Unusual Ventures co-founder Jyoti Bansal and Battery Ventures general partner Neeraj Agrawal in conversation with TechCrunch’s enterprise reporter Ron Miller.
We would be remiss not to analyze activity on Wall Street in 2019, too. As top venture funds refueled with new capital, Silicon Valley’s favorite unicorns completed highly anticipated IPOs, a critical step toward bringing a much needed bout of liquidity to their investors. Uber, Lyft, Pinterest, Zoom, PagerDuty, Slack and several others went public this year, and other well-financed companies, including Peloton, Postmates and WeWork, have completed paperwork for upcoming public listings. To detail this year’s venture activity and IPO extravaganza, David Krane, CEO and managing partner of Uber and Slack investor GV, will be on deck, as will Sequoia general partner Jess Lee, Floodgate’s Ann Miura-Ko and Aspect Ventures’ Theresia Gouw.
There’s more where that came from. In addition to the VCs already named, Disrupt attendees can expect to hear from Bessemer Venture Partners’ Tess Hatch, who will provide her expertise on the growing “space economy.” Forerunner Ventures’ Eurie Kim will give the Extra Crunch Stage audience tips on building a subscription product, Mithril Capital’s Ajay Royan will explore opportunities in the medical robotics field and SOSV’s Arvind Gupta will dive deep into the cutting-edge world of health tech and more.
Disrupt SF runs October 2-4 at the Moscone Center in the heart of San Francisco. Passes are available here.
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How to get people to open your emails
Julian Shapiro is the founder of BellCurve.com, a growth marketing agency that trains you to become a marketing professional. He also writes at Julian.com.
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We’ve aggregated the world’s best growth marketers into one community. Twice a month, we ask them to share their most effective growth tactics, and we compile them into this Growth Report.
This is how you’re going stay up-to-date on growth marketing tactics — with advice you can’t get elsewhere.
Our community consists of 600 startup founders paired with VP’s of growth from later-stage companies. We have 300 YC founders plus senior marketers from companies including Medium, Docker, Invision, Intuit, Pinterest, Discord, Webflow, Lambda School, Perfect Keto, Typeform, Modern Fertility, Segment, Udemy, Puma, Cameo, and Ritual .
You can participate in our community by joining Demand Curve’s marketing webinars, Slack group, or marketing training program. See past growth reports here and here.
Without further ado, onto the advice.
How can you send email campaigns that get opened by 100% of your mailing list?
Based on insights from Nick Selman, Fletcher Richman of Halp, and Wes Wagner.
- First, a few obvious pieces of advice for avoiding low open rates:
- Avoid spam filters by avoiding keywords commonly used in spam emails.
- Consider using email subjects (1) that are clearly descriptive and (2) look like they were written by a friend. Then A/B your top choices.
- Include the recipient’s name in your email body. This signals to spam filters that you do in fact know the recipient.
- Now, for the real advice: Let’s say 60% of your audience opens your mailing, how can you get the remaining 40% to open and read it too?
- First, wait 2 weeks to give everyone a chance to open the initial email.
- Next, export a list of those who haven’t opened. Mailchimp lets you do this.
- Important note: The reason many recipients don’t open your email is because it was sent to Spam, it was buried in Promotions, or it was insta-deleted because it looked like spam (but wasn’t). The goal here is to resuscitate these people. You have two options for doing so:
- (1) Duplicate the initial email then selectively re-send it to non-openers. This time, use a new subject (try a new hook) and downgrade the email to plain text: remove images and link tracking. De-enriching the email in this way can help bypass spam filters and the Promotions tab.
- (2) Alternatively, export your list of non-openers to a third-party email tool like Mailshake (or Mixmax).
- First, connect Mailshake to a new Gmail account on your company domain.
- Next, configure Mailshake to automatically dole out small batches of emails on a daily schedule. Let it churn through non-openers slowly so that Gmail doesn’t flag your account as a spammer.
- Emails sent through Mailshake are more likely to get opened than emails sent through Mailchimp. Why? Mailshake sends emails through your Gmail account, and Gmail-to-Gmail emails have a greater chance of bypassing Spam and Promotions folders, particularly if the sender doesn’t have a history of its emails being marked as spam.
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How to get your ads working, and whether PR is worth it
Julian Shapiro is the founder of BellCurve.com, a growth marketing agency that trains you to become a marketing professional. He also writes at Julian.com.
More posts by this contributor
We’ve aggregated the world’s best growth marketers into one community. Twice a month, we ask them to share their most effective growth tactics, and we compile them into this Growth Report.
This is how you’re going stay up-to-date on growth marketing tactics — with advice you can’t get elsewhere.
Our community consists of 600 startup founders paired with VP’s of growth from later-stage companies. We have 300 YC founders plus senior marketers from companies including Medium, Docker, Invision, Intuit, Pinterest, Discord, Webflow, Lambda School, Perfect Keto, Typeform, Modern Fertility, Segment, Udemy, Puma, Cameo, and Ritual.
You can participate in our community by joining Demand Curve’s marketing webinars, Slack group, or marketing training program. See past growth reports here.
Without further ado, onto the advice.
How to get customer testimonials from hard-to-reach executives
Based on insights from Guillaume Cabane.
A customer testimonial from a well-known executive may be the social proof that improves conversion rates on your landing pages or in sales collateral. But executives of reputable companies are generally busy and difficult to reach.
Here’s how to get the testimonial:
- Contract with a freelance journalist who’s written for a reputable publication like the New York Times.
- Reach out to your executive customers with something like “Hey, we have a journalist who has previously written for NYT who’s interested in speaking to a few of our customers for a piece. Do you have 15 minutes for a quick call?”
- For $200 in freelancer time, you get a testimonial you can use (in the words you want) from a reputable executive. Be sure to figure out some way to make it worth the executive’s time.
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How to work with top influencers and avoid ad blockers
Julian Shapiro is the founder of BellCurve.com, a growth marketing agency that trains you to become a marketing professional. He also writes at Julian.com.
More posts by this contributor
We’ve aggregated the world’s best growth marketers into one community. Twice a month, we ask them to share their most effective growth tactics, and we compile them into this Growth Report.
This is how you’re going stay up-to-date on growth marketing tactics — with advice you can’t get elsewhere.
Our community consists of 600 startup founders paired with VP’s of growth from later-stage companies. We have 300 YC founders plus senior marketers from companies including Medium, Docker, Invision, Intuit, Pinterest, Discord, Webflow, Lambda School, Perfect Keto, Typeform, Modern Fertility, Segment, Udemy, Puma, Cameo, and Ritual.
You can participate in our community by joining Demand Curve’s marketing webinars, Slack group, or marketing training program.
Without further ado, onto the advice.
Editor’s note: This is the first of a new series of articles on startup growth tactics in 2019 for Extra Crunch. This first article has been unlocked for all TechCrunch readers.
Don’t abandon email unsubscribers. They’re still useful.
Based on insights from Matt Sornson of Clearbit.
You’ve launched a new feature and want to tell your audience about it. You can send an email to your newsletter subscribers, but how do you reach the 20%+ who unsubscribed? Most people mistakenly consider this audience to be a lost cause.
- Create a custom audience of all newsletter unsubscribers on Facebook.
- Run ads announcing the new feature to that audience.
- Now you’ve reactivated people who at one point had an interest in your product — instead of forever ignoring them.
Tips for effectively working with influencers
Based on insights from Barron Caster of Rev.
- Create a referral system for influencers: Influencers who sign up others get a % of their sales or signups. This makes a mini-pyramid structure and turns your influencers into a salesforce. Why is this important? Some influencers don’t actually sell products, but just sign up tons of other influencers. Find these people.
- Get everything you can out of an engagement (e.g. permission to use them as a testimonial for emails, social proof, etc.).
- Working with influencers is a relationship-building game:
- Actually go to conferences to meet influencers.
- Treat influencers like royalty. Surprise them with gifts like flowers/donuts. $100 to send a gift can pay hefty dividends if they like your brand more and share that with their followers.
- Give influencers a tangible benefit to share with their followers. They care about their followers and want to beneficially incentivize them to click on their link and buy with them.
More tips for working with influencers
Based on insights from Cezar Grigore of Tremo Books.
- Geo rollouts: Your ROI increases when a bunch of influencers in the same category / region share your product within an interval of 2-4 weeks. It gives the impression that everyone is talking about your product.
- Initially focus on influencers with 10-150k audiences. They’re smaller and more willing to accept bartered deals. There are enough influencers in this range willing to work in exchange for a free product. Most may not be producing results, but some work well, bringing in 50-200 customers within 24 hours. As you build up your following and reputation for your brand, it becomes much easier to work with more influential people.
- It’s harder to cut deals with bigger influencers (100k-2M). Only about 5-10% of bigger influencers are willing to work on an affiliate basis (e.g. $10/customer).
Overcoming ad blockers that screw up your conversion data
- Ad blockers can block FB’s tracking libraries and underreport ad conversions (even by 50%). The trick? Consider using the static IMG FB pixel — not the JavaScript one — which ad blockers don’t appear to block. — C.
- Here’s another ad block workaround: You can extract UTM tags from the URL then save them into LocalStorage using JavaScript. Next, send that stored data plus the user’s on-site conversion behavior to a custom backend that, inherently, will circumvent ad blockers. Just be diligent about ensuring your marketing links all have UTM tags. —Neal O’Grady of Demand Curve
- Remember that the use of ad blockers varies heavily by audience and device type. Depending on who your audience is, ad blockers can either be a huge problem or a non-problem. —Neal O’Grady of Demand Curve
- So, for example, few people on mobile have ad blockers. Not much of a problem there.
- However, on desktop, up to ~75% of millennial gamers and techies may have it installed.
- In contrast, on desktop, maybe only 25% of middle-aged Americans outside of tech hub cities may have it installed.
- These are hand-wavy numbers. Google for specifics.
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Light Phone’s founders discuss life beyond the smartphone
For a seemingly tough pitch, Light has had little trouble getting noticed. The company has run two successful crowdfunding campaigns for a pair of minimalist phones designed to augment or replace the smartphone. Today the startup announced that it will be shipping the second version of the handset, which introduces a handful of features back into the product, like texting.
Ahead of the launch, we spoke to Light’s founders, Kaiwei Tang and Joe Hollier, about funding, feature glut and the future of the handset.
How it all began
Brian Heater: The project essentially started as an in-house at Google, is that correct?
Kaiwei Tang: We met in 2014 in Google’s incubator called 30 Weeks. That’s where we met and started talking about Light Phone eventually.
Joe Hollier: 30 Weeks program was an experiment that came out of the Google creative lab, and their hypothesis was that if given the right resources, guidance, designers might be able to create new creative startups, and that designers should be on the founding table of companies.
So their hypothesis was that we as designers would be able to imagine a new startup in the software application space, and then through designing the end product, which is how the Google creative lab works, we’d be able to inspire the engineers and investors that we would need to make the product a reality.
Brian: What did you see in the market that wasn’t being fulfilled by countless different smartphone companies?
Joe: People were feeling overwhelmed by their smartphone and craving some escape, and we didn’t really see an escape.
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Why commerce companies are the advertising players to watch in a privacy-centric world
Justin Choi is the founder and CEO of Nativo, which empowers brands and publishers through its advanced platform for content.
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The unchecked digital land grab for consumers’ personal data that has been going on for more than a decade is coming to an end, and the dominoes have begun to fall when it comes to the regulation of consumer privacy and data security.
We’re witnessing the beginning of a sweeping upheaval in how companies are allowed to obtain, process, manage, use and sell consumer data, and the implications for the digital ad competitive landscape are massive.
On the backdrop of evolving privacy expectations and requirements, we’re seeing the rise of a new class of digital advertising player: consumer-facing apps and commerce platforms. These commerce companies are emerging as the most likely beneficiaries of this new regulatory privacy landscape — and we’re not just talking about e-commerce giants like Amazon.
Traditional commerce companies like eBay, Target and Walmart have publicly spoken about advertising as a major focus area for growth, but even companies like Starbucks and Uber have an edge in consumer data consent and, thus, an edge over incumbent media players in the fight for ad revenues.
Tectonic regulatory shifts
Image via Getty Images / alashi
By now, most executives, investors and entrepreneurs are aware of the growing acronym soup of privacy regulation, the two most prominent ingredients being the GDPR (General Data Protection Regulation) and the CCPA (California Consumer Privacy Act).
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The rise of the new crypto “mafias”
Ash Egan
Contributor
Contributor
Ash Egan leads crypto investing at Accomplice. He formerly was a VC at ConsenSys Ventures and Converge.
In the early 2000s, journalists popularized the term “PayPal mafia” to describe the PayPal founders and employees who left to start their own wildly successful tech companies, including Peter Thiel, Reid Hoffman, and Elon Musk. Drawing from that idea, this article seeks to cover the formation and flow of talent within the crypto landscape today.
I’m fascinated by the concept of tech mafias, popularized by Paypal in the early 00s.
Early signs of crypto mafias:
Coinbase
@0xProject @dydxprotocol
Ethereum/ConsenSys
MIT
IC3Others?
— Ash Egan (@AshAEgan) April 3, 2019
The crypto world is in a constant state of flux, with new startups entrants joining the industry every single day. These new startups have the potential either to be superstars within a portfolio company or to start the next Coinbase. Additionally, there are already impressive spin-outs from some of the more established crypto companies.
For ease of framing, I’ve separated these early-forming mafias into four categories: Crypto, Tech, Wall Street, and Academia. Since 2009, there have been 186 spinout companies originating from those four categories (33% from Academia, 28% from Crypto, 24% from Tech, and 15% from Wall Street).
Obvious but important disclaimer: this article does not intend to promote organized crime within crypto.
Criteria
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‘This is Your Life in Silicon Valley’: Former Pinterest President, Moment CEO Tim Kendall on Smartphone Addiction
Welcome to this week’s transcribed edition of This is Your Life in Silicon Valley. We’re running an experiment for Extra Crunch members that puts This is Your Life in Silicon Valley in words – so you can read from wherever you are.
This is Your Life in Silicon Valley was originally started by Sunil Rajaraman and Jascha Kaykas-Wolff in 2018. Rajaraman is a serial entrepreneur and writer (Co-Founded Scripted.com, and is currently an EIR at Foundation Capital), Kaykas-Wolff is the current CMO at Mozilla and ran marketing at BitTorrent. Rajaraman and Kaykas-Wolff started the podcast after a series of blog posts that Sunil wrote for The Bold Italic went viral.
The goal of the podcast is to cover issues at the intersection of technology and culture – sharing a different perspective of life in the Bay Area. Their guests include entrepreneurs like Sam Lessin, journalists like Kara Swisher and politicians like Mayor Libby Schaaf and local business owners like David White of Flour + Water.
This week’s edition of This is Your Life in Silicon Valley features Tim Kendall, the former President of Pinterest and current CEO of Moment. Tim ran monetization at Facebook, and has very strong opinions on smartphone addiction and what it is doing to all of us. Tim is an architect of much of the modern social media monetization machinery, so you definitely do not want to miss his perspective on this important subject.
For access to the full transcription, become a member of Extra Crunch. Learn more and try it for free.
Sunil Rajaraman: Welcome to season three of This is Your Life in Silicon Valley. A Podcast about the Bay Area, technology, and culture. I’m your host, Sunil Rajaraman and I’m joined by my cohost, Jascha Kaykas-Wolff.
Jascha Kaykas-Wolff: Are you recording?
Rajaraman: I’m recording.
Kaykas-Wolff: I’m almost done. My phone’s been buzzing all afternoon and I just have to finish this text message.
Rajaraman: So you’re one of those people who can’t go five seconds without checking their phone.
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