redpoint ventures
Auto Added by WPeMatico
Owner.com serves up $10.7M so that independent restaurants can get cooking
Independent restaurants don’t typically have the luxury to create their own online food ordering and delivery capabilities or negotiate for lower rates from legacy ordering platforms like the large restaurant chains do.
Here’s where Owner.com comes in. The Palo Alto-based company provides a free online ordering, delivery and marketing platform for independent restaurants that puts them on similar playing fields with the big guys. And unlike the legacy food delivery services, Owner.com restaurants own their customer data and can automate marketing campaigns.
Adam Guild is the company’s 21-year-old co-founder and CEO, a high school dropout and a Thiel Fellow, who originally started by assisting his mother’s dog grooming business that was having difficulties attracting customers. After stepping in with some online marketing methods, her business grew, and is now looking to expand into multiple locations. Guild then wanted to work with a bigger group of people and stumbled across restaurants while helping some clients create online landing pages.
With consumer demand shifting to primarily online ordering and delivery over the past 18 months, online ordering revenue is expected to double from $248 billion in 2020 to $449 billion by 2025. Ordering platforms like Doordash, Uber Eats and Grubhub control 80% of orders and typically charge between 20% and 30% per order to restaurants and additional fees to consumers.
In contrast, Owner.com is free for restaurants and charges customers a 5% convenience fee when they order from the website. Guild explained that larger restaurant chains have the buying power to negotiate lower rates, while independent restaurants do not. With the inability to keep up, some 110,000 restaurants in the U.S. closed in 2020.
Guild initially bootstrapped his company, working with large restaurant chains, like P.F. Chang’s, drive in-store orders. Then the global pandemic hit. He ended up losing all of his revenue and had to let all of his employees go but one. To add to his bad luck, he was then rejected from Y Combinator and other accelerator programs.
“For the first three days, I was depressed,” Guild told TechCrunch. “I had spent two years building a company and now it was dead. In the same way we were disrupted, I began to think there was no better position to be in than a scrappy startup. I didn’t know what the next business would look like, so I started cold-calling restaurant owners, asking how I can be helpful and what type of technology they were looking for. Many of them told me that online ordering sucked, but if they didn’t solve it soon, they would go out of business.”
One pivot and a year later with co-founder Dean Bloembergen, Owner.com closed on $10.7 million in seed funding led by SaaStr Fund, with participation from Redpoint Ventures and Day One Ventures, as well as a group of individual investors including Naval Ravikant, CNBC’s The Profit host Marcus Lemonis, The Kitchen Restaurant Group’s Kimbal Musk, DoNotPay founder Joshua Browder, Figma founder Dylan Field, The Chainsmokers and independent restaurant owners and customers of Owner.com.
Jason Lemkin, founder of SaaStr Fund, said restaurant SaaS was a space in which his firm was interested in investing, but thought it was a bit boring — there were already quite a few vendors in the space, like Toast and Grubhub, and most were just technology solutions. However, when he heard that Owner.com was a break-out company from the monotony, he said he had to take a look.
“The ability to own the customer relationship is that ultimate differentiation,” Lemkin said. “Their ultimate goal is to provide a robust technology platform to increase margins, have people order more and come back often.”
Meanwhile, Guild intends to use the new funding to continue product development and add new features like landing pages, the ability to make reservations and native apps for white-label service.
Since the launch last year, the company has reached a seven-figure run-rate and over 105% monthly revenue retention across over 700 restaurant locations, Guild said. To date, Owner.com has transacted over $18 million and helped its restaurant customers avoid paying $3 million to online order platform fees annually.
“It’s all about empowering the 40% of the restaurant industry that is run by people who started off in entry-level positions, and over the years, worked their way up to own the ‘American Dream,’ ” he added.
Powered by WPeMatico
Cribl raises $200M to help enterprises do more with their data
At a time when remote work, cybersecurity attacks and increased privacy and compliance requirements threaten a company’s data, more companies are collecting and storing their observability data, but are being locked in with vendors or have difficulty accessing the data.
Enter Cribl. The San Francisco-based company is developing an “open ecosystem of data” for enterprises that utilizes unified data pipelines, called “observability pipelines,” to parse and route any type of data that flows through a corporate IT system. Users can then choose their own analytics tools and storage destinations like Splunk, Datadog and Exabeam, but without becoming dependent on a vendor.
The company announced Wednesday a $200 million round of Series C funding to value Cribl at $1.5 billion, according to a source close to the company. Greylock and Redpoint Ventures co-led the round and were joined by new investor IVP, existing investors Sequoia and CRV and strategic investment from Citi Ventures and CrowdStrike. The new capital infusion gives Cribl a total of $254 million in funding since the company was started in 2017, Cribl co-founder and CEO Clint Sharp told TechCrunch.
Sharp did not discuss the valuation; however, he believes that the round is “validation that the observability pipeline category is legit.” Data is growing at a compound annual growth rate of 25%, and organizations are collecting five times more data today than they did 10 years ago, he explained.
“Ultimately, they want to ask and answer questions, especially for IT and security people,” Sharp added. “When Zoom sends data on who started a phone call, that might be data I need to know so I know who is on the call from a security perspective and who they are communicating with. Also, who is sending files to whom and what machines are communicating together in case there is a malicious actor. We can also find out who is having a bad experience with the system and what resources they can access to try and troubleshoot the problem.”
Cribl also enables users to choose how they want to store their data, which is different from competitors that often lock companies into using only their products. Instead, customers can buy the best products from different categories and they will all talk to each other through Cribl, Sharp said.
Though Cribl is developing a pipeline for data, Sharp sees it more as an “observability lake,” as more companies have differing data storage needs. He explains that the lake is where all of the data will go that doesn’t need to go into an existing storage solution. The pipelines will send the data to specific tools and then collect the data, and what doesn’t fit will go back into the lake so companies have it to go back to later. Companies can keep the data for longer and more cost effectively.
Cribl said it is seven times more efficient at processing event data and boasts a customer list that includes Whole Foods, Vodafone, FINRA, Fannie Mae and Cox Automotive.
Sharp went after additional funding after seeing huge traction in its existing customer base, saying that “when you see that kind of traction, you want to keep doubling down.” His aim is to have a presence in every North American city and in Europe, to continue launching new products and growing the engineering team.
Up next, the company is focusing on go-to-market and engineering growth. Its headcount is 150 currently, and Sharp expects to grow that to 250 by the end of the year.
Over the last fiscal year, Cribl grew its revenue 293%, and Sharp expects that same trajectory for this year. The company is now at a growth stage, and with the new investment, he believes Cribl is the “future leader in observability.”
“This is a great investment for us, and every dollar, we believe, is going to create an outsized return as we are the only commercial company in this space,” he added.
Scott Raney, managing director at Redpoint Ventures, said his firm is a big enterprise investor in software, particularly in companies that help organizations leverage data to protect themselves, a sweet spot that Cribl falls into.
He feels Sharp is leading a team, having come from Splunk, that has accomplished a lot, has a vision and a handle on the business and knows the market well. Where Splunk is capturing the machine data and using its systems to extract the data, Cribl is doing something similar in directing the data where it needs to go, while also enabling companies to utilize multiple vendors and build apps to sit on top of its infrastructure.
“Cribl is adding opportunity by enriching the data flowing through, and the benefits are going to be meaningful in cost reduction,” Raney said. “The attitude out there is to put data in cheaper places, and afford more flexibility to extract data. Step one is to make that transition, and step two is how to drive the data sitting there. Cribl is doing something that will go from being a big business to a legacy company 30 years from now.”
Powered by WPeMatico
Transform launches with $24.5M in funding for a tool to query and build metrics out of data troves
The biggest tech companies have put a lot of time and money into building tools and platforms for their data science teams and those who work with them to glean insights and metrics out of the masses of data that their companies produce: how a company is performing, how a new feature is working, when something is broken, or when something might be selling well (and why) are all things you can figure out if you know how to read the data.
Now, three alums that worked with data in the world of Big Tech have founded a startup that aims to build a “metrics store” so that the rest of the enterprise world — much of which lacks the resources to build tools like this from scratch — can easily use metrics to figure things out like this, too.
Transform, as the startup is called, is coming out of stealth today, and it’s doing so with an impressive amount of early backing — a sign not just of investor confidence in these particular founders, but also the recognition that there is a gap in the market for, as the company describes it, a “single source of truth for business data” that could be usefully filled.
The company is announcing that it has closed, while in stealth, a Series A of $20 million, and an earlier seed round of $4.5 million — both led by Index Ventures and Redpoint Ventures. The seed, the company said, also had dozens of angel investors, with the list including Elad Gil of Color Genomics, Lenny Rachitsky of Airbnb and Cristina Cordova of Notion.
The big breakthrough that Transform has made is that it’s built a metrics engine that a company can apply to its structured data — a tool similar to what Big Tech companies have built for their own use, but that hasn’t really been created (at least until now) for others who are not those Big Tech companies to use, too.
Transform can work with vast troves of data from the warehouse, or data that is being tracked in real time, to generate insights and analytics about different actions around a company’s products. Transform can be used and queried by nontechnical people who still have to deal with data, Handel said.
The impetus for building the product came to Nick Handel, James Mayfield and Paul Yang — respectively Transform’s CEO, COO and software engineer — when they all worked together at Airbnb (previously Mayfield and Yang were also at Facebook together) in a mix of roles that included product management and engineering.
There, they could see firsthand both the promise that data held for helping make decisions around a product, or for measuring how something is used, or to plan future features, but also the demands of harnessing it to work, and getting everyone on the same page to do so.
“There is a growing trend among tech companies to test every single feature, every single iteration of whatever. And so as a part of that, we built this tool [at Airbnb] that basically allowed you to define the various metrics that you wanted to track to understand your experiment,” Handel recalled in an interview. “But you also want to understand so many other things like, how many people are searching for listings in certain areas? How many people are instantly booking those listings? Are they contacting customer service, are they having trust and safety issues?” The tool Airbnb built was Minerva, optimised specifically for the kinds of questions Airbnb might typically have for its own data.
“By locking down all of the definitions for the metrics, you could basically have a data engineering team, a centralized data infrastructure team, do all the calculation for these metrics, and then serve those to the data scientists to then go in and do kind of deeper, more interesting work, because they weren’t bogged down in calculating those metrics over and over,” he continued. This platform evolved within Airbnb. “We were really inspired by some of the early work that we saw happen on this tool.”
The issue is that not every company is built to, well, build tools like these tailored to whatever their own business interests might be.
“There’s a handful of companies who do similar things in the metrics space,” Mayfield said, “really top flight companies like LinkedIn, Airbnb and Uber. They have really started to invest in metrics. But it’s only those companies that can devote teams of eight or 10, engineers, designers who can build those things in house. And I think that was probably, you know, a big part of the impetus for wanting to start this company was to say, not every organization is going to be able to devote eight or 10 engineers to building this metrics tool.”
And the other issue is that metrics have become an increasingly important — maybe the most important — lever for decision making in the world of product design and wider business strategy for a tech (and maybe by default, any) company.
We have moved away from “move fast and break things.” Instead, we now embrace — as Mayfield put it — “If you can’t measure it, you can’t move it.”
Image Credits: Transform (opens in a new window)
Transform is built around three basic priorities, Handel said.
The first of these has to do with collective ownership of metrics: by building a single framework for measuring these and identifying them, their theory is that it’s easier for a company to all get on the same page with using them. The second of these is to use Transform to simply make the work of the data team more efficient and easier, by turning the most repetitive parts of extracting insights into automated scripts that can be used and reused, giving the data team the ability to spend more time analyzing the data rather than just building data sets. And third of all, to provide customers with APIs that they can use to embed the metric-extracting tools into other applications, whether in business intelligence or elsewhere.
The three products it’s introducing today, called Metrics Framework, Metrics Catalog and Metrics API, follow from these principles.
Transform is only really launching publicly today, but Handel said that it’s already working with a small handful of customers (unnamed) in a small beta, enough to be confident that what it’s built works as it was intended. The funding will be used to continue building out the product as well as bring on more talent and hopefully onboard more businesses to using it.
Hopefully might be less a tenuous word than its investors would use, convinced that it’s filling a strong need in the market.
“Transform is filling a critical gap within the industry. Just as we invested in Looker early on for its innovative approach to business intelligence, Transform takes it one step further by providing a powerful yet streamlined single source of truth for metrics,” said Tomasz Tunguz, MD, Redpoint Ventures, in a statement.
“We’ve seen companies across the globe struggle to make sense of endless data sources or turn them into actionable, trusted metrics. We invested in Transform because they’ve developed an elegant solution to this problem that will change how companies think about their data,” added Shardul Shah, a partner at Index Ventures.
Powered by WPeMatico
Timescale grabs $40M Series B as it goes all in on cloud version of time series database
Timescale, makers of the open-source TimescaleDB time series database, announced a $40 million Series B financing round today. The investment comes just over two years after it got a $15 million Series A.
Redpoint Ventures led today’s round, with help from existing investors Benchmark, New Enterprise Associates, Icon Ventures and Two Sigma Ventures. The company reports it has now raised approximately $70 million.
TimescaleDB lets users measure data across a time dimension, so anything that would change over time. “What we found is we need a purpose-built database for it to handle scalability, reliability and performance, and we like to think of ourselves as the category-defining relational database for time series,” CEO and co-founder Ajay Kulkarni explained.
He says that the choice to build their database on top of Postgres when it launched four years ago was a key decision. “There are a few different databases that are designed for time series, but we’re the only one where developers get the purpose-built time series database plus a complete Postgres database all in one,” he said.
While the company has an open-source version, last year it decided rather than selling an enterprise version (as it had been), it was going to include all of that functionality in the free version of the product and place a bet entirely on the cloud for revenue.
“We decided that we’re going to make a bold bet on the cloud. We think cloud is where the future of database adoption is, and so in the last year […] we made all of our enterprise features free. If you want to test it yourself, you get the whole thing, but if you want a managed service, then we’re available to run it for you,” he said.
The community approach is working to attract users, with over 2 million monthly active databases, some of which the company is betting will convert to the cloud service over time. Timescale is based in New York City, but it’s a truly remote organization, with 60 employees spread across 20 countries and every continent except Antarctica.
He says that as a global company, it creates new dimensions of diversity and different ways of thinking about it. “I think one thing that is actually kind of an interesting challenge for us is what does D&I mean in a totally global org. A lot of people focus on diversity and inclusion within the U.S., but we think we’re doing better than most tech companies in terms of racial diversity, gender diversity,” he said.
And being remote-first isn’t going to change even when we get past the pandemic. “I think it may not work for every business, but I think being remote first has been a really good thing for us,” he said.
Powered by WPeMatico
Orca Security raises $210M Series C at a unicorn valuation
Orca Security, an Israeli cybersecurity startup that offers an agent-less security platform for protecting cloud-based assets, today announced that it has raised a $210 million Series C round at a $1.2 billion valuation. The round was led by Alphabet’s independent growth fund CapitalG and Redpoint Ventures. Existing investors GGV Capital, ICONIQ Growth and angel syndicate Silicon Valley CISO Investment also participated. YL Ventures, which led Orca’s seed round and participated in previous rounds, is not participating in this round — and it’s worth noting that the firm recently sold its stake in Axonius after that company reached unicorn status.
If all of this sounds familiar, that may be because Orca only raised its $55 million Series B round in December, after it announced its $20.5 million Series A round in May. That’s a lot of funding rounds in a short amount of time, but something we’ve been seeing more often in the last year or so.
Orca Security co-founders Gil Geron (left) and Avi Shua (right). Image Credits: Orca Security
As Orca co-founder and CEO Avi Shua told me, the company is seeing impressive growth and it — and its investors — want to capitalize on this. The company ended last year beating its own forecast from a few months before, which he noted was already aggressive, by more than 50%. Its current slate of customers includes Robinhood, Databricks, Unity, Live Oak Bank, Lemonade and BeyondTrust.
“We are growing at an unprecedented speed,” Shua said. “We were 20-something people last year. We are now closer to a hundred and we are going to double that by the end of the year. And yes, we’re using this funding to accelerate on every front, from dramatically increasing the product organization to add more capabilities to our platform, for post-breach capabilities, for identity access management and many other areas. And, of course, to increase our go-to-market activities.”
Shua argues that most current cloud security tools don’t really work in this new environment. Many, because they are driven by metadata, can only detect a small fraction of the risks, and agent-based solutions may take months to deploy and still not cover a business’ entire cloud estate. The promise of Orca Security is that it can not only cover a company’s entire range of cloud assets but that it is also able to help security teams prioritize the risks they need to focus on. It does so by using what the company calls its “SideScanning” technology, which allows it to map out a company’s entire cloud environment and file systems.
“Almost all tools are essentially just looking at discrete risk trees and not the forest. The risk is not just about how pickable the lock is, it’s also where the lock resides and what’s inside the box. But most tools just look at the issues themselves and prioritize the most pickable lock, ignoring the business impact and exposure — and we change that.”
It’s no secret that there isn’t a lot of love lost between Orca and some of its competitors. Last year, Palo Alto Networks sent Orca Security a sternly worded letter (PDF) to stop it from comparing the two services. Shua was not amused at the time and decided to fight it. “I completely believe there is space in the markets for many vendors, and they’ve created a lot of great products. But I think the thing that simply cannot be overlooked, is a large company that simply tries to silence competition. This is something that I believe is counterproductive to the industry. It tries to harm competition, it’s illegal, it’s unconstitutional. You can’t use lawyers to take your competitors out of the media.”
Currently, though, it doesn’t look like Orca needs to worry too much about the competition. As GGV Capital managing partner Glenn Solomon told me, as the company continues to grow and bring in new customers — and learn from the data it pulls in from them — it is also able to improve its technology.
“Because of the novel technology that Avi and [Orca Security co-founder and CPO] Gil [Geron] have developed — and that Orca is now based on — they see so much. They’re just discovering more and more ways and have more and more plans to continue to expand the value that Orca is going to provide to customers. They sit in a very good spot to be able to continue to leverage information that they have and help DevOps teams and security teams really execute on good hygiene in every imaginable way going forward. I’m super excited about that future.”
As for this funding round, Shua noted that he found CapitalG to be a “huge believer” in this space and an investor that is looking to invest into the company for the long run (and not just trying to make a quick buck). The fact that CapitalG is associated with Alphabet was obviously also a draw.
“Being associated with Alphabet, which is one of the three major cloud providers, allowed us to strengthen the relationship, which is definitely a benefit for Orca,” he said. “During the evaluation, they essentially put Orca in front of the security leadership at Google. Definitely, they’ve done their own very deep due diligence as part of that.”
Early Stage is the premier ‘how-to’ event for startup entrepreneurs and investors. You’ll hear first-hand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, product market fit, PR, marketing and brand building. Each session also has audience participation built-in – there’s ample time included for audience questions and discussion. Use code “TCARTICLE” at checkout to get 20 percent off tickets right here.
Powered by WPeMatico
Providing healthcare to lower-income communities values Cityblock Health at $1 billion
Cityblock Health, a company that provides healthcare services to low-income communities, is now commanding a high-priced valuation of over $1 billion after venture capitalists poured $160 million into the company.
The round was led by new investor General Catalyst with participation from crossover investor Wellington Management and support from major existing investors, including Kinnevik AB, Maverick Ventures, Thrive Capital, Redpoint Ventures and more, according to a statement from the company.
Cityblock works with community caregivers to work with residents to provide primary care, behavioral health and other services to address social determinants of health, in person and… increasingly… through virtual consultations.
The company first spun out of Alphabet’s Sidewalk Labs in 2017 and initially partnered with EmblemHealth. By relying primarily on licensed clinical social workers, community health partners and a network of specialized practice clinicians and doctors to provide basic primary care and supporting health services, Cityblock believes it can drive down the costs of healthcare.
Some 70,000 patients use Cityblock services in four major U.S. cities, the company said.
To date, Cityblock has raised $300 million.
The company said in a statement that the new funding will be used to support Cityblock’s national expansion in caring for Medicaid and dually-eligible communities, to attract and onboard talent across its product, engineering, data science, clinical and business operations, to launch new service lines and to continue investing in its proprietary technology platform, Commons.
Powered by WPeMatico
Redpoint and Sequoia are backing a startup to copyedit your shit code
Code is the lifeblood of the modern world, yet the tooling for some programming environments can be remarkably spartan. While developers have long had access to graphical programming environments (IDEs) and performance profilers and debuggers, advanced products to analyze and improve lines of code have been harder to find.
These days, the most typical tool in the kit is a linter, which scans through code pointing out flaws that might cause issues. For instance, there might be too many spaces on a line, or a particular line might have a well-known ambiguity that could cause bugs that are hard to diagnose and would best be avoided.
What if we could expand the power of linters to do a lot more though? What if programmers had an assistant that could analyze their code and actively point out new security issues, erroneous code, style problems and bad logic?
Static code analysis is a whole interesting branch of computer science, and some of those ideas have trickled into the real-world with tools like semgrep, which was developed at Facebook to add more robust code-checking tools to its developer workflow. Semgrep is an open-source project, and it’s being commercialized through r2c, a startup that wants to bring the power of this tool to the developer masses.
The whole project has found enough traction among developers that Satish Dharmaraj at Redpoint and Jim Goetz at Sequoia teamed up to pour $13 million into the company for its Series A round, and also backed the company in an earlier, unannounced seed round.
The company was founded by three MIT grads — CEO Isaac Evans and Drew Dennison were roommates in college, and they joined up with head of product Luke O’Malley. Across their various experiences, they have worked at Palantir, the intelligence community, and Fortune 500 companies, and when Evans and Dennison were EIRs at Redpoint, they explored ideas based on what they had seen in their wide-ranging coding experiences.
The r2c team, which I assume only writes bug-free code. Image by r2c.
“Facebook, Apple, and Amazon are so far ahead when it comes to what they do at the code level to bake security [into their products compared to] other companies, it’s really not even funny,” Evans explained. The big tech companies have massively scaled their coding infrastructure to ensure uniform coding standards, but few others have access to the talent or technology to be on an equal playing field. Through r2c and semgrep, the founders want to close the gap.
With r2c’s technology, developers can scan their codebases on-demand or enforce a regular code check through their continuous integration platform. The company provides its own template rulesets (“rule packs”) to check for issues like security holes, complicated errors and other potential bugs, and developers and companies can add their own custom rulesets to enforce their own standards. Currently, r2c supports eight programming languages, including JavaScript and Python, and a variety of frameworks, and it is actively working on more compatibility.
One unique focus for r2c has been getting developers onboard with the model. The core technology remains open-sourced. Evans said that “if you actually want something that’s going to get broad developer adoption, it has to be predominantly open source so that developers can actually mess with it and hack on it and see whether or not it’s valuable without having to worry about some kind of super restrictive license.”
Beyond its model, the key has been getting developers to actually use the tool. No one likes bugs, and no developer wants to find more bugs that they have to fix. With semgrep and r2c though, developers can get much more immediate and comprehensive feedback — helping them fix tricky errors before they move on and forget the context of what they were engineering.
“I think one of the coolest things for us is that none of the existing tools in the space have ever been adopted by developers, but for us, it’s about 50/50 developer teams who are getting excited about it versus security teams getting excited about it,” Evans said. Developers hate finding more bugs, but they also hate writing them in the first place. Evans notes that the company’s key metric is the number of bugs found that are actually fixed by developers, indicating that they are offering “good, actionable results” through the product. One area that r2c has explored is actively patching obvious bugs, saving developers time.
Breaches, errors and downtime are a bedrock of software, but it doesn’t have to be that way. With more than a dozen employees and a hefty pool of capital, r2c hopes to improve the reliability of all the experiences we enjoy — and save developers time in the process.
Powered by WPeMatico
Sutter Hill strikes ice-cold, $2.5B pre-market return with Snowflake’s IPO filing
Today is the day for huge VC returns.
We talked a bit about Sequoia’s coming huge win with the IPO of game engine Unity this morning. Now, Sequoia might actually have the second largest return among companies filing to go public with the SEC today.
Snowflake filed its S-1 this afternoon, and it looks like Sutter Hill is going to make bank. The long-time VC firm, which invests heavily in the enterprise space and generally keeps a lower media profile, is the big winner across the board here, coming out with an aggregate 20.3% stake in the data management platform, which was last privately valued at $12.4 billion earlier this year. At its last valuation, Sutter Hill’s full stake is worth $2.5 billion. My colleagues Ron Miller and Alex Wilhelm looked a bit at the financials of the IPO filing.
Sutter Hill has been intimately connected to Snowflake’s early build-out and success, providing a $5 million Series A funding back in 2012, the year of the company’s founding, according to Crunchbase.
Now, there are some caveats on that number. Sutter Hill Ventures (aka “the fund”) owns roughly 55% of the firm’s total stake, with the balance owned by other entities owned by the firm’s management committee members. Michael Speiser, the firm’s partner who sits on Snowflake’s board, owns slightly more than 10% of Sutter Hill’s stake directly himself according to the SEC filing.
In addition to Sutter Hill, Sequoia also got a large slice of the data computing company: its growth fund is listed as having an 8.4% stake in the coming IPO. That makes for two Sequoia Growth IPOs today — a nice way to start the week this Monday afternoon.
Finally, Altimeter Capital, which did the Series C, owns 14.8%; ICONIQ owns 13.8%; and Redpoint, which did the Series B, owns 9.0%.
To see the breakdown in returns, let’s start by taking a look at the company’s share price and carrying values for each of its rounds of capital:
On top of that, what’s interesting is that Snowflake broke down the share purchases by firm for the last four rounds (D through G-1) the company fundraised:
That level of detail actually allows us to grossly compare the multiples on invested capital for these firms.
Sutter Hill, despite owning large sections of the company early on, continued to buy up shares all the way through the Series G, investing an additional $140 million in the later-stage rounds of the company. Adding in the entirety of its $5 million Series A round and a bit from the Series B assuming pro rata, the firm is looking on the order of a 16x return (assuming the IPO price is at least as good as the last round price).
Outside Sutter Hill, Redpoint has the best multiple return profile, given that it only invested $60 million in these later-stage rounds while still maintaining a 9.0% ownership stake. Both Sutter Hill and Redpoint purchased roughly 20% of their overall stakes in these later-stage rounds. Doing some roughly calculating, Redpoint is looking at a return of about 12-13x.
Sequoia’s multiple on investment is capped a bit given that it only invested in the most recent funding rounds. Its 8.4% stake was purchased for nearly $272 million, all of which came in these late-stage rounds. At Snowflake’s last round valuation of $12.4 billion, Sequoia’s stake is valued at $1.04 billion — a return of slightly less than 4x. That’s very good for mezzanine capital, but nothing like the multiple that Sutter Hill or Redpoint got for investing early.
Doing the same back-of-the-envelope math and Altimeter is looking at a better than 6x return, and ICONIQ got 7x. As before, if the stock zooms up, those returns will look all the better (and of course, if the stock crashes, well…)
One final note: The pattern for these last four funding rounds is unusual for venture capital: Snowflake appears to have “spread the love around,” having multiple firms build up stakes in the startup over several rounds rather than having one definitive lead.
Powered by WPeMatico
Crossbeam announces $25M Series B to keep growing partnerships platform
As sales teams partner with other companies, they go through a process called account mapping to find common customers and prospects. This is usually a highly manual activity tracked in spreadsheets. Crossbeam, a Philadelphia startup, has come up with a way to automate partnership data integration. Today the company announced a $25 million Series B investment.
Redpoint Ventures led the round with help from existing investors FirstMark Capital, Salesforce Ventures, Slack Fund and Uncork Capital, along with new investors Okta Ventures and Partnership Leaders, a partnership industry association. All in all, an interesting mix of traditional VCs and strategic investors that Crossbeam could potentially partner with as they grow the business.
The funding comes on the heels of a $3.5 million seed round in 2018 and a $12.5 million Series A a year ago. The startup has now raised a total of $41 million.
Crossbeam has been growing steadily, and that attracted the attention of investors, whom CEO and co-founder Bob Moore says approached him. He was actually not thinking about fundraising until next year, but when the opportunity presented itself, he decided to seize it.
The platform has a natural networking effect built into it with over 900 companies using it so far. As new companies come on, they invite partners, who can join and invite more partners, and that creates a constant sales motion for them without much effort at all.
“We didn’t go out fundraising. We caught the eye of Redpoint because they could see the virality of the product and the extent to which it was being used by many of their portfolio companies and companies out in the market […],” Moore told TechCrunch.
Image Credits: Crossbeam
To accelerate interest in the product, the company also announced a new free tier, which replaces the limited free trial and a starter level that previously cost $500 per month. Prior to this move, if you didn’t move to the starter tier, you would lose your data when the trial was over.
“The idea here is what we’ve seen in the data is that we can create a whole lot of value for people and demonstrate really strong ROI once they get in the door and actually have access to that data, and they don’t have to worry about a free trial where the data is going away,” Moore explained.
Moore says they currently have 28 employees and have ambitious plans to add new people to the mix in the coming months, expecting to reach 50 employees by early 2021. As the company revs up on the personnel side, Moore says diversity is front and center of their plans.
“As far as Crossbeam specifically goes, we’ve made sure that diversity, equity and inclusion is part of our entire recruiting process and also the cultural experience that we create for people that are at the company,” he said. Although he didn’t discuss specific numbers, he said the company was making progress, particularly in the latest round of hires.
While the company has an office in Philly, even before COVID hit, it was a remote first organization with about half of the employees working from home. “I think a lot of our culture was kind of built to make sure that remote team members are first-class citizens in every respect in the company. So we already had all the controls, technology and practices in place, and when we shut the office, it was about as smooth as could be,” he said.
Powered by WPeMatico
VESoft raises $8M to meet China’s growing need for graph databases
Sherman Ye founded VESoft in 2018 when he saw a growing demand for graph databases in China. Its predecessors, like Neo4j and TigerGraph, had already been growing aggressively in the West for a few years, while China was just getting to know the technology that leverages graph structures to store data sets and depict their relationships, such as those used for social media analysis, e-commerce recommendations and financial risk management.
VESoft is ready for further growth after closing an $8 million funding round led by Redpoint China Ventures, an investment firm launched by Silicon Valley-based Redpoint Ventures in 2005. Existing investor Matrix Partners China also participated in the Series pre-A round. The new capital will allow the startup to develop products and expand to markets in North America, Europe and other parts of Asia.
The 30-people team is comprised of former employees from Alibaba, Facebook, Huawei and IBM. It’s based in Hangzhou, a scenic city known for its rich history and housing Alibaba and its financial affiliate Ant Financial, where Ye previously worked as a senior engineer after his four-year stint with Facebook in California. From 2017 to 2018, the entrepreneur noticed that Ant Financial’s customers were increasingly interested in adopting graph databases as an alternative to relational databases, a model that had been popular since the 80s and normally organizes data into tables.
“While relational databases are capable of achieving many functions carried out by graph databases… they deteriorate in performance as the quantity of data grows,” Ye told TechCrunch during an interview. “We didn’t use to have so much data.”
Information explosion is one reason why Chinese companies are turning to graph databases, which can handle millions of transactions to discover patterns within scattered data. The technology’s rise is also a response to new forms of online businesses that depend more on relationships.
“Take recommendations for example. The old model recommends content based purely on user profiles, but the problem of relying on personal browsing history is it fails to recommend new things. That was fine for a long time as the Chinese [internet] market was big enough to accommodate many players. But as the industry becomes saturated and crowded… companies need to ponder how to retain existing users, lengthen their time spent, and win users from rivals.”
The key lies in serving people content and products they find appealing. Graph databases come in handy, suggested Ye, when services try to predict users’ interest or behavior as the model uncovers what their friends or people within their social circles like. “That’s a lot more effective than feeding them what’s trending.”
Neo4j compares relational and graph databases (Link)
The company has made its software open source, which the founder believed can help cultivate a community of graph database users and educate the market in China. It will also allow VESoft to reach more engineers in the English-speaking world who are well-acquainted with the open-source culture.
“There is no such thing as being ‘international’ or ‘domestic’ for a technology-driven company. There are no boundaries between countries in the open-source world,” reckoned Ye.
When it comes to generating income, the startup plans to launch a paid version for enterprises, which will come with customized plug-ins and host services.
The Nebula Graph, the brand of VESoft’s database product, is now serving 20 enterprise clients from areas across social media, e-commerce and finance, including big names like food delivery giant Meituan, popular social commerce app Xiaohongshu and e-commerce leader JD.com. A number of overseas companies are also trialing Nebula.
The time is ripe for enterprise-facing startups with a technological moat in China as the market for consumers has been divided by incumbents like Tencent and Alibaba. This makes fundraising relatively easy for VESoft. The founder is confident that Chinese companies are rapidly catching up with their Western counterparts in the space, for the gargantuan amount of data and the myriad of ways data is used in the country “will propel the technology forward.”
Powered by WPeMatico