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Chilean fintech Xepelin secures $230M in debt and equity from Kaszek, high-profile angels
Chilean startup Xepelin, which has created a financial services platform for SMEs in Latin America, has secured $30 million in equity and $200 million in credit facilities.
LatAm venture fund Kaszek Ventures led the equity portion of the financing, which also included participation from partners of DST Global and a slew of other firms and founders/angel investors. LatAm- and U.S.-based asset managers and hedge funds — including Chilean pension funds — provided the credit facilities. In total over its lifetime, Xepelin has raised over $36 million in equity and $250 million in asset-backed facilities.
Also participating in the round were Picus Capital; Kayak Ventures; Cathay Innovation; MSA Capital; Amarena; FJ Labs; Gilgamesh Ventures. A group of angels also participated in the financing, including Kavak founder and CEO Carlos Garcia; Jackie Reses, executive chairman of Square Financial Services; Justo founder and CEO Ricardo Weder; Tiger Global Management Partner John Curtius; GGV’s Hans Tung; and Gerry Giacoman, founder and CEO of Clara, among others.
Nicolás de Camino and Sebastian Kreis founded Xepelin in mid-2019 with the mission of changing the fact that “only 5% of companies in all LatAm countries have access to recurring financial services.”
“We want all SMEs in LatAm to have access to financial services and capital in a fair and efficient way,” the pair said.
Xepelin is built on a SaaS model designed to give SMEs a way to organize their financial information in real time. Embedded in its software is a way for companies to apply for short-term working capital loans “with just three clicks, and receive the capital in a matter of hours,” the company claimed.
It has developed an AI-driven underwriting engine, which the execs said gives it the ability to make real-time loan approval decisions.
“Any company in LatAm can onboard in just a few minutes and immediately access a free software that helps them organize their information in real time, including cash flow, revenue, sales, tax, bureau info — sort of a free CFO SaaS,” de Camino said. “The circle is virtuous: SMEs use Xepelin to improve their financial habits, obtain more efficient financing, pay their obligations, and collaborate effectively with clients and suppliers, generating relevant impacts in their industries.”
The fintech currently has over 4,000 clients in Chile and Mexico, which currently has a growth rate “four times faster” than when Xepelin started in Chile. Over the past 22 months, it has loaned more than $400 million to SMBs in the two countries. It currently has a portfolio of active loans for $120 million and an asset-backed facility for more than $250 million.
Overall, the company has been seeing a growth rate of 30% per month, the founders said. It has 110 employees, up from 20 a year ago.
Xepelin has more than 60 partnerships (a number that it said is growing each week) with midmarket corporate companies, allowing for their suppliers to onboard to its platform for free and gain access to accounts payable, revenue-based financing. The company also sells its portfolio of non-recourse loans to financial partners, which it says mitigates credit risk exposure and enhances its platform and data play.
“When we talk about creating the largest digital bank for SMEs in LatAm, we are not saying that our goal is to create a bank; perhaps we will never ask for the license to have one, and to be honest, everything we do, we do it differently from the banks, something like a non-bank, a concept used today to exemplify focus,” the founders said.
Both de Camino and Kreis said they share a passion for making financial services more accessible to SMEs all across Latin America and have backgrounds rooted deep in different areas of finance.
“Our goal is to scale a platform that can solve the true pains of all SMEs in LatAm, all in one place that also connects them with their entire ecosystem, and above all, democratized in such a way that everyone can access it,” Kreis said, “regardless of whether you are a company that sells billions of dollars or just a thousand dollars, getting the same service and conditions.”
For now, the company is nearly exclusively focused on the B2B space, but in the future, it believes several of its services “will be very useful for all SMEs and companies in LatAm.”
“Xepelin has developed technology and data science engines to deliver financing to SMBs in Latin America in a seamless way,” Nicolas Szekasy, co-founder and managing partner at Kaszek Ventures, said in a statement. “The team has deep experience in the sector and has proven a perfect fit of their user-friendly product with the needs of the market.”
Chile was home to another large funding earlier this week. NotCo, a food technology company making plant-based milk and meat replacements, closed on a $235 million Series D round that gives it a $1.5 billion valuation.
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Platform as a service startup Porter aims to become go-to for deploying, managing cloud-based apps
By the time Porter co-founders Trevor Shim, Alexander Belanger and Justin Rhee decided to build a company around DevOps, the pair were well versed in doing remote development on Kubernetes. And like other users, they were consistently getting burnt by the technology.
They realized that for all of the benefits, the technology was there, but users were having to manage the complexity of hosting solutions as well as incurring the costs associated with a big DevOps team, Rhee told TechCrunch.
They decided to build a solution externally and went through Y Combinator’s Summer 2020 batch, where they found other startup companies trying to do the same.
Today, Porter announced $1.5 million in seed funding from Venrock, Translink Capital, Soma Capital and several angel investors. Its goal is to build a platform as a service that any team can use to manage applications in its own cloud, essentially delivering the full flexibility of Kubernetes through a Heroku-like experience.
Why Heroku? It is the hosting platform that developers are used to, and not just small companies, but also later-stage companies. When they want to move to Amazon Web Services, Google Cloud or DigitalOcean, Porter will be that bridge, Shim said.
However, while Heroku is still popular, the pair said companies are thinking the platform is getting outdated because it is standing still technology-wise. Each year, companies move on from the platform due to technical limitations and cost, Rhee said.
A big part of the bet Porter is taking is not charging users for hosting, and its cost is a pure SaaS product, he said. They aren’t looking to be resellers, so companies can use their own cloud, but Porter will provide the automation and users can pay with their AWS and GCP credits, which gives them flexibility.
A common pattern is a move into Kubernetes, but “the zinger we talk about” is if Heroku was built in 2021, it would have been built on Kubernetes, Shim added.
“So we see ourselves as a successor to Heroku,” he said.
To be that bridge, the company will use the new funding to increase its engineering bandwidth with the goal of “becoming the de facto standard for all startups.” Shim said.
Porter’s platform went live in February, and in six months became the sixth-fastest growing open-source platform download on GitHub, said Ethan Batraski, partner at Venrock. He met the company through YC and was “super impressed with Rhee’s and Shim’s vision.
“Heroku has 100,000 developers, but I believe it has stagnated,” Batraski added. “Porter already has 100 startups on its platform. The growth they’ve seen — four or five times — is what you want to see at this stage.”
His firm has long focused on data infrastructure and is seeing the stack get more complex, saying “at the same time, more developers are wanting to build out an app over a week, and scale it to millions of users, but that takes people resources. With Kubernetes it can turn everyone into an expert developer without them knowing.”
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4 key areas SaaS startups must address to scale infrastructure for the enterprise
Startups and SMBs are usually the first to adopt many SaaS products. But as these customers grow in size and complexity — and as you rope in larger organizations — scaling your infrastructure for the enterprise becomes critical for success.
Below are four tips on how to advance your company’s infrastructure to support and grow with your largest customers.
Address your customers’ security and reliability needs
If you’re building SaaS, odds are you’re holding very important customer data. Regardless of what you build, that makes you a threat vector for attacks on your customers. While security is important for all customers, the stakes certainly get higher the larger they grow.
Given the stakes, it’s paramount to build infrastructure, products and processes that address your customers’ growing security and reliability needs. That includes the ethical and moral obligation you have to make sure your systems and practices meet and exceed any claim you make about security and reliability to your customers.
Here are security and reliability requirements large customers typically ask for:
Formal SLAs around uptime: If you’re building SaaS, customers expect it to be available all the time. Large customers using your software for mission-critical applications will expect to see formal SLAs in contracts committing to 99.9% uptime or higher. As you build infrastructure and product layers, you need to be confident in your uptime and be able to measure uptime on a per customer basis so you know if you’re meeting your contractual obligations.
While it’s hard to prioritize asks from your largest customers, you’ll find that their collective feedback will pull your product roadmap in a specific direction.
Real-time status of your platform: Most larger customers will expect to see your platform’s historical uptime and have real-time visibility into events and incidents as they happen. As you mature and specialize, creating this visibility for customers also drives more collaboration between your customer operations and infrastructure teams. This collaboration is valuable to invest in, as it provides insights into how customers are experiencing a particular degradation in your service and allows for you to communicate back what you found so far and what your ETA is.
Backups: As your customers grow, be prepared for expectations around backups — not just in terms of how long it takes to recover the whole application, but also around backup periodicity, location of your backups and data retention (e.g., are you holding on to the data too long?). If you’re building your backup strategy, thinking about future flexibility around backup management will help you stay ahead of these asks.
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Sila banks $13M to offer single API for developing financial products, services
Sila announced Monday it raised $13 million in Series A funding for its banking and payment platform that gives software teams tools to build the next generation of financial products and services.
Revolution Ventures led the round and was joined by existing investors Madrona Venture Group, Oregon Venture Fund and Mucker Capital, as well as Wise co-founder Taavet Hinrikus. The funding brings the total investment to date for Portland, Oregon-based Sila to $20 million.
The company was founded in 2018 by Shamir Karkal, Angela Angelovska, Isaac Hines and Alex Lipton to simplify digital payments and storage in a regulatory compliant way and build on blockchain technology. CEO Karkal has a long history in the fintech space, co-founding Simple, an app unifying various accounts into one accessible bank card, in 2009. It was acquired by BBVA in 2014 for $117 million and shuttered earlier this year.
Karkal told TechCrunch that the idea for Sila was born out of frustration while starting another bank. He saw a need for financial application development, but was hindered by a banking system “still stuck in the 20th century.” He thought consumers expected a different level of service, which is why many flock to fintechs.
However, whenever a business tried to connect existing banking systems, fintechs and cryptocurrency innovators, as it built and scale, would always run into technology and compliance issues, Karkal said.
“The problem with working with banks, is that you have to figure out how to integrate with their mainframe,” he added. “In the process, you end up having to also be compliance experts just to be able to do it.”
Whereas it took Karkal three years to get bank processes set up for other companies, it took Sila 18 months. Its banking APIs enable developers to create their own digital wallets, replacing the need to integrate with legacy financial institutions. Sila also has partnerships with fintech platforms, including Plaid, Alloy, Lithic and Arcus to move money, and is backed by Evolve Bank and Trust.
Sila can now get customers up-and-running in six to eight weeks. And unlike competitors that focus almost exclusively on e-commerce, most of Sila’s customers are doing regulated payments within the fintech, insurtech, commercial real estate and cryptocurrency spaces that tend to be more complex from a compliance basis, Karkal said.
Since the company launched its platform, business was building steadily, and took off in the second half of 2020. The company raised a $7.7 million seed round earlier in the year. In the last 12 months, Sila grew its revenue 10 times and customers’ end users grew over 500% in the last seven months.
Sila will use the new funding to increase headcount, target additional partners and expand product features, including its Ethereum MainNet stablecoin issuance and interoperability between FedWire and the Nacha Automated Clearing House network.
“There is a massive wave of fintechs emerging in the U.S., and we have barely scratched the surface,” Karkal said. “Places like India, Africa and Latin America could accelerate at the same time because they are mainly starting from zero. We are here to ‘arm the rebels’ and help those innovators build applications to give all end users a much better financial experience.”
As part of the investment, Clara Sieg, partner at Revolution Ventures, is joining the company’s board. She told TechCrunch she met the company’s co-founders through the Portland ecosystem.
Revolution tends to look at fintech startups from a consumer angle. Recognizing that the problem with building infrastructure meant dealing with banks, the firm set out how to find a company building the pipes to solve it, she said.
In the landscape of fintech, she considers Dwolla to be a competitor to Sila. Last week, the company raised $21 million to continue developing its API that allows companies to build and facilitate fast payments, specifically with a focus on ACH. However, it comes down to actually signing up customers, and that competitive landscape is pretty thin, Sieg added.
“Sila is building an easy way for people to program money and taking a regulatory eye to things,” Sieg said. “When Shamir was building Simple, he could see how challenging it was for incumbents to provide the tools developers need to embed financial services, and this is why we have confidence in his ability to win.”
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Paystand banks $50M to make B2B payments cashless and with no fees
It’s pretty easy for individuals to send money back and forth, and there are lots of cash apps from which to choose. On the commercial side, however, one business trying to send $100,000 the same way is not as easy.
Paystand wants to change that. The Scotts Valley, California-based company is using cloud technology and the Ethereum blockchain as the engine for its Paystand Bank Network that enables business-to-business payments with zero fees.
The company raised $50 million Series C funding led by NewView Capital, with participation from SoftBank’s SB Opportunity Fund and King River Capital. This brings the company’s total funding to $85 million, Paystand co-founder and CEO Jeremy Almond told TechCrunch.
During the 2008 economic downturn, Almond’s family lost their home. He decided to go back to graduate school and did his thesis on how commercial banking could be better and how digital transformation would be the answer. Gleaning his company vision from the enterprise side, Almond said what Venmo does for consumers, Paystand does for commercial transactions between mid-market and enterprise customers.
“Revenue is the lifeblood of a business, and money has become software, yet everything is in the cloud except for revenue,” he added.
He estimates that almost half of enterprise payments still involve a paper check, while fintech bets heavily on cards that come with 2% to 3% transaction fees, which Almond said is untenable when a business is routinely sending $100,000 invoices. Paystand is charging a flat monthly rate rather than a fee per transaction.
Paystand’s platform. Image Credits: Paystand
On the consumer side, companies like Square and Stripe were among the first wave of companies predominantly focused on accounts payable and then building business process software on top of an existing infrastructure.
Paystand’s view of the world is that the accounts receivables side is harder and why there aren’t many competitors. This is why Paystand is surfing the next wave of fintech, driven by blockchain and decentralized finance, to transform the $125 trillion B2B payment industry by offering an autonomous, cashless and feeless payment network that will be an alternative to cards, Almond said.
Customers using Paystand over a three-year period are able to yield average benefits like 50% savings on the cost of receivables and $850,000 savings on transaction fees. The company is seeing a 200% increase in monthly network payment value and customers grew two-fold in the past year.
The company said it will use the new funding to continue to grow the business by investing in open infrastructure. Specifically, Almond would like to reboot digital finance, starting with B2B payments, and reimagine the entire CFO stack.
“I’ve wanted something like this to exist for 20 years,” Almond said. “Sometimes it is the unsexy areas that can have the biggest impacts.”
As part of the investment, Jazmin Medina, principal at NewView Capital, will join Paystand’s board. She told TechCrunch that while the venture firm is a generalist, it is rooted in fintech and fintech infrastructure.
She also agrees with Almond that the B2B payments space is lagging in terms of innovation and has “strong conviction” in what Almond is doing to help mid-market companies proactively manage their cash needs.
“There is a wide blue ocean of the payment industry, and all of these companies have to be entirely digital to stay competitive,” Medina added. “There is a glaring hole if your revenue is holding you back because you are not digital. That is why the time is now.”
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Tailor Brands raises $50M, aims to be one-stop shop for small businesses to launch
Tailor Brands, a startup that automates parts of the branding and marketing process for small businesses, announced Thursday it has raised $50 million in Series C funding.
GoDaddy led the round as a strategic partner and was joined by OurCrowd and existing investors Pitango Growth, Mangrove Capital Partners, Armat Group, Disruptive VC and Whip Media founder Richard Rosenblatt. Tailor Brands has now raised a total of $70 million since its inception in 2015.
“GoDaddy is empowering everyday entrepreneurs around the world by providing all of the help and tools to succeed online,” said Andrew Morbitzer, vice president of corporate development at GoDaddy, in a written statement. “We are excited to invest in Tailor Brands — and its team — as we believe in their vision. Their platform truly helps entrepreneurs start their business quickly and easily with AI-powered logo design and branding services.”
When Tailor Brands, which launched at TechCrunch’s Startup Battlefield in 2014, raised its last round, a $15.5 million Series B, in 2018, the company was focused on AI-driven logo creation.
The company, headquartered in New York and Tel Aviv, is now compiling the components for a one-stop SaaS platform — providing the design, branding and marketing services a small business owner needs to launch and scale operations, and within minutes, Yali Saar, co-founder and CEO of Tailor Brands told TechCrunch.
Over the past year, more users are flocking to Tailor Brands; the company is onboarding some 700,000 new users per month for help in the earliest stages of setting up their business. In fact, the company saw a 27% increase in new business incorporations as the creator and gig economy gained traction in 2020, Saar said.
In addition to the scores of new users, the company crossed 30 million businesses using the platform. At the end of 2019, Tailor Brands started monetizing its offerings and “grew at a staggering rate,” Saar added. The company yielded triple-digit annual growth in revenue.
To support that growth, the new funding will be used on R&D, to double the team and create additional capabilities and functions. There may also be future acquisition opportunities on the table.
Saar said Tailor Brands is at a point where it can begin leveraging the massive amount of data on small businesses it gathers to help them be proactive rather than reactive, turning the platform into a “consultant of sorts” to guide customers through the next steps of their businesses.
“Users are looking for us to provide them with everything, so we are starting to incorporate more products with the goal of creating an ecosystem, like WeChat, where you don’t need to leave the platform at all to manage your business,” Saar said.
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Andreessen Horowitz funds Vitally’s $9M round for customer experience software
Customer success company Vitally raised $9 million in Series A funding from Andreessen Horowitz to continue developing its SaaS platform automating customer experiences.
Co-founder and CEO Jamie Davidson got the idea for Vitally while he was at his previous company, Pathgather. As chief customer officer, he was looking at tools and “was underwhelmed” by the available tools to automate repetitive tasks. So he set out to build one.
The global pandemic thrust customer satisfaction into the limelight as brands realized that the same ways they were engaging with customers had to change now that everyone was making the majority of their purchases online. Previously, a customer service representative may have managed a dozen accounts, but nowadays with product-led growth, they tackle a portfolio of thousands of customers, Davidson told TechCrunch.
New York-based Vitally, founded in 2017, unifies all of that customer data into one place and flows it through an engine to provide engagement insights, like what help customers need, which ones are at risk of churning and which to target for expanded revenue opportunities. Its software also provides automation to balance workflow and steer customer success teams to the tasks with the right customers so that they are engaging at the correct time.
Andreessen approached Davidson for the Series A, and he liked the alignment in customer success vision, he said. Including the new funding, Vitally raised a total of $10.6 million, which includes $1.2 million in September 2019.
From the beginning, Vitally was bringing in strong revenue growth, which enabled the company to focus on building its platform and hold off on fundraising.
“A Series A was certainly on our mind and road map, but we weren’t actively fundraising,” Davidson said. “However, we saw a great fit and great backing to help us grow. Tools have lagged in the customer success area and how to manage that. Andreessen can help us scale and grow with our customers as they manage the thousands of their customers.”
Davidson intends to use the new funding to scale Vitally’s team across the board and build out its marketing efforts to introduce the company to the market. He expects to grow to 30 by the end of the year to support the company’s annual revenue growth — averaging 3x — and customer acquisition. Vitally is already working with big customers like Segment, Productboard and Calendly.
As part of the investment, Andreessen general partner David Ulevitch is joining the Vitally board. He saw an opportunity for the reimagining of how SaaS companies delivered customer success, he told TechCrunch via email.
Similar to Davidson, he thought that customer success teams were now instrumental to growing SaaS businesses, but technology lagged behind market need, especially with so many SaaS companies taking a self-serve or product-led approach that attracted more orders than legacy tools.
Before the firm met Vitally, it was hearing “rave reviews” from its customers, Ulevitch said.
“The feedback was overwhelmingly positive and affirmed the fact that Vitally simply had the best product on the market since it actually mapped to how businesses operated and interacted with customers, particularly businesses with a long-tail of paying customers,” he added. “The first dollar into a SaaS company is great, but it’s the renewal and expansion dollars that really set the winners apart from everyone else. Vitally is in the best position to help companies get that renewal, help their customers expand accounts and ultimately win the space.”
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JLL, Khosla lead Jones’ $12.5M Series A for real estate vendor compliance
Commercial real estate tenants and property managers have to abide by strict liability rules that any vendor entering the property must have insurance certificates and meet other requirements. The approval process for this currently can take days and is still largely done on paper.
Enter Jones. The New York-based commercial real estate startup is curating a marketplace of pre-approved vendors for tenants and property managers to find and hire the people they need in a compliant way.
To continue advancing its network, the company announced Monday it raised $12.5 million in Series A funding led by JLL Spark and Khosla Ventures that also included strategic investors Camber Creek, Rudin Management, DivcoWest and Sage Realty. This new investment brings Jones’ total raised to $20 million, according to Crunchbase data.
Jones, founded in 2017, also manages certifications and approvals, moving the whole process online. Its technology can process an insurance certificate in less than an hour and reduce the overall vendor approval time to 2.5 days — from 12 days — with 99.9% accuracy, co-founder and CEO Omri Stern told TechCrunch.
The accuracy portion is key. With much of the work being done by hand, current accuracy is at about 30%, he added. In addition, the certifications are lengthy, and it is typically up to property managers to parse through the insurance documents to identify what is missing rather than spending time with tenants.
“In the consumer world, a homeowner expects to go on a marketplace and find a service and hire them,” Stern said. “Office managers and tenants can’t get their preferred vendors through the approval process, so we want to provide a similar digital experience that they can consume and use in real estate.”
He says Jones’ differentiator from competitors is that all of the stakeholders are in place: a group of high-profile real estate customers, including Lincoln Property Co., Prologis, DivcoWest, Rudin Management, Sage Realty and JLL.
Yishai Lerner, co-CEO of JLL Spark, agrees, telling TechCrunch that commercial real estate is one of the largest and last asset classes that is undergoing a technology transformation, similar to what fintech was 20 years ago.
He estimates the U.S. market to be $16 trillion, of which technology could unlock a lot of the value. That opportunity was one of the drivers for JLL to create JLL Spark, where Jones is one of the first investments.
Though Lerner spent time with property management teams on the ground, he became up close and personal with the problem when his wife, while moving offices, found out her vendors were not allowed in the building because they didn’t have the right insurance.
“We learned that property managers spend half of their time just working to verify the compliance of vendors coming into their building,” Lerner said. “We wondered why there wasn’t technology for this. Jones was doing construction at the time, and we brought them into commercial real estate because they had an example of how technology could solve the problem.”
Meanwhile, the Series A comes at a time when Stern is seeing Jones’s SaaS tool take off in the past 10 months. He would not get specific with growth metrics, but did say that what is driving growth is “competing against the status quo” as companies are searching for and adapting workflow solutions.
The company intends to use the new funds on product development in both quicker and easier approvals and bringing on new vendors. Jones already works with tens of thousands of vendors. It will also focus on integration, offering an API that could be used in other industry verticals where compliance is necessary.
Stern would also like to continue building the team. Having brought in real estate experts, he is now also looking for people with backgrounds in fintech, cybersecurity and insurtech to bring in additional perspectives.
“We are building an incredible company with the opportunity to be the next big digital marketplace,” he added.
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Digital lending platform Blend valued at over $4B in its public debut
Mortgages may not be considered sexy, but they are a big business.
If you’ve refinanced or purchased a home digitally lately, you may not have noticed the company powering the software behind it — but there’s a good chance that company is Blend.
Founded in 2012, the startup has steadily grown to be a leader in the mortgage tech industry. Blend’s white label technology powers mortgage applications on the site of banks including Wells Fargo and U.S. Bank, for example, with the goal of making the process faster, simpler and more transparent.
The San Francisco-based startup’s SaaS (software-as-a-service) platform currently processes over $5 billion in mortgages and consumer loans per day, up from nearly $3 billion last July.
Today, Blend made its debut as a publicly traded company on the New York Stock Exchange, trading under the symbol “BLND.” As of early afternoon, Eastern Time, the stock was trading up over 13% at $20.36.
On Thursday night, the company had said it would offer 20 million shares at a price of $18 per share, indicating the company was targeting a valuation of $3.6 billion.
That compares to a $3.3 billion valuation at the time of its last raise in January — a $300 million Series G funding round that included participation from Coatue and Tiger Global Management. Also, let’s not forget that Blend only became a unicorn last August when it raised a $75 million Series F. Over its lifetime, Blend had raised $665 million before Friday’s public market debut.
In filing its S-1 on June 21, Blend revealed that its revenue had climbed to $96 million in 2020 from $50.7 million in 2019. Meanwhile, its net loss narrowed from $81.5 million in 2019 to $74.6 million in 2020.
In 2020, the San Francisco-based startup significantly expanded its digital consumer lending platform. With that expansion, Blend began offering its lender customers new configuration capabilities so that they could launch any consumer banking product “in days rather than months.”
Looking ahead, the company had said it expects its revenue growth rate “to decline in future periods.” It also doesn’t envision achieving profitability anytime soon as it continues to focus on growth. Blend also revealed that in 2020, its top five customers accounted for 34% of its revenue.
Today, TechCrunch spoke with co-founder and CEO Nima Ghamsari about the company’s decision to go with a traditional IPO versus the ubiquitous SPAC or even a direct listing.
For one, Blend said he wanted to show its customers that it is an “around for a long time company” by making sure there’s enough on its balance sheet to continue to grow.
“We had to talk and convince some of the biggest investors in the world to invest in us, and that speaks to how long we’ll be around to serve these customers,” he said. “So it was a combination of our capital need and wanting to cement ourselves as a really credible software provider to one of the most regulated industries.”
Ghamsari emphasized that Blend is a software company that powers the mortgage process and is not the one offering the mortgages. As such, it works with the flock of fintechs that are working to provide mortgages.
“A lot of them are using Blend under the hood, as the infrastructure layer,” he said.
Overall, Ghamsari believes this is just the beginning for Blend.
“One of the things about financial services is that it’s still mostly powered by paper. So a lot of Blend’s growth is just going deeper into this process that we got started in years ago,” he said. As mentioned above, the company started out with its mortgage product but just keeps adding to it. Today, it also powers other loans such as auto, personal and home equity.
“A lot of our growth is actually powered by our other lines of business,” Ghamsari told TechCrunch. “There’s a lot to build because the larger digitization trends are just getting started in financial services. It’s a relatively large industry that has lots of change.”
In May, digital mortgage lender Better.com announced it would combine with a SPAC, taking itself public in the second half of 2021.
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Taste intelligence startup Halla closes $4.5M Series A1 to predict which grocery items shoppers will buy
Halla wants to answer the question of how people decide what to eat, and now has $4.5 million in fresh Series A1 capital from Food Retail Ventures to do it.
Headquartered in New York, Halla was founded in 2016 by Gabriel Nipote, Henry Michaelson and Spencer Price to develop “taste intelligence,” using human behavior to steer shoppers to food items they want while also discovering new ones as they shop online. This all results in bigger basket orders for stores. SOSV and E&A Venture Capital joined in on the round, which brings Halla’s total capital raised to $8.5 million, CEO Price told TechCrunch.
The company’s API technology is a plug-and-play platform that leverages more than 100 billion shopper and product data points and funnels it into three engines: Search, which takes into account a shopper’s preferences; Recommend, which reveals relevant complementary products as someone shops; and Substitute, which identifies replacement options.
Halla’s Substitute product was released earlier this year as an answer to better recommendations for out-of-stock items that even retailers like Walmart are creating technology to solve. Price cited a McKinsey report that found 20% of grocery shoppers sought out competitors following a negative outcome from bad substitutions.
Halla Substitute. Image Credits: Halla
None of these data points are linked to any shoppers’ private data, just the attributes around the shopping itself. The APIs, rather, are looking for context to return relevant recommendations and substitutions. For example, Halla’s platform would take into account the way someone adds items to their cart and suggest next ones: if you added turkey and then bread, the platform may suggest cheese and condiments.
“It’s also about personalization when it comes to grocery shopping and food,” Price said. “When you want organic eggs from a specific brand and it is out of stock, it is often up to your personal shopper’s discretion. We want to lead them to the right substitutions, so you can still cook the meal you intended instead of ‘close enough.’ ”
Halla’s technology is now live in more than 1,100 e-commerce storefronts. The new funding gives Halla some fuel for the fire Price said is happening within the company, including plans to double the number of stores it supports across accounts. He also expects to double employees to 30 in order to support growth and customer base, admitting there is “more inbound interest that we can handle.” Halla has been busy fast-tracking big customers for pilots, and at the same time, wants to expand internationally with additional product lines over the next 18 months.
The company is also seeing “a near infinite increase in recurring revenue,” as it attracts six- and seven-figure contracts that push the company closer to cash flow positivity. All of that growth is positioning Halla for a Series B if it needs it, Price said.
Meanwhile, as part of the investment, Food Retail Ventures’ James McCann will join Halla’s board of directors.
McCann, who only invests in food and retail technology, told TechCrunch that grocery stores need a way to inspire shoppers, that Halla is doing that and in a better way than other intelligence versions he has seen.
“Their technology is miles ahead of everyone else,” he added. “They have a terrific team and a terrific product. They are seeing huge uplifts in terms of suggestions and what people are buying, and their measurements are out of this world.”
Photo includes Halla co-founders, from left, Spencer Price (CEO), Henry Michaelson (CTO & President) and Gabriel Nipote (COO).
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