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Salesforce, AWS announce extended partnership with further two-way integration
Salesforce and AWS represent the two most successful cloud companies in their respective categories. Over the last few years the two cloud giants have had an evolving partnership. Today they announced plans for a new set of integration capabilities to make it easier to share data and build applications that cross the two platforms.
Patrick Stokes, EVP and GM for Platform at Salesforce, points out that the companies have worked together in the past to provide features like secure sharing between the two services, but they were hearing from customers that they wanted to take it further and today’s announcement is the first step towards making that happen.
“[The initial phases of the partnership] have really been massively successful. We’re learning a lot from each other and from our mutual customers about the types of things that they want to try to accomplish, both within the Salesforce portfolio of products, as well as all the Amazon products, so that the two solutions complement each other really nicely. And customers are asking us for more, and so we’re excited to enter into this next phase of our partnership,” Stokes explained.
He added, “The goal really is to unify our platforms, so bring [together] all the power of the Amazon services with all of the power of the of the Salesforce platform.” These capabilities could be the next step in accomplishing that.
This involves a couple of new features the companies are working on to help developers on both the platform and application side of the equation. For starters that includes enabling developers to virtualize Amazon data inside Salesforce without having to do all the coding to make that happen manually.
“More specifically, we’re going to virtualize Amazon data within the Salesforce platform, so whether you’re working with an S3 bucket, Amazon RDS or whatever it is we’re going to make it so that that the data is virtualized and just appears just like it’s native data on the Salesforce platform,” he said.
Similarly, developers building applications on Amazon will be able to access Salesforce data and have it appear natively in Amazon. This involves providing connectors between the two systems to make the data flow smoothly without a lot of coding to make that happen.
The companies are also announcing event sharing capabilities, which makes it easier for both Amazon and Salesforce customers to build microservices-based applications that cross both platforms.
“You can build microservices-oriented architecture that spans the services of Salesforce and Amazon platforms, again without having to write any code. To do that, [we’re developing] out of the box connectors so you can click and drag the events that you want.”
The companies are also announcing plans to make it easier from an identity and access management perspective to access the platforms with a guided setup. Finally, the companies are working on applications to build Amazon Chime communications tooling into Service Cloud and other Salesforce services to build things like virtual call centers using AWS machine learning technology.
Amazon VP of Global Marketing Rachel Thorton says that having the two cloud giants work together in this way should make it easier for developers to create solutions that span the two platforms. “I just think it unlocks such possibilities for developers, and the faster and more innovative developers can be, it just unlocks opportunities for businesses, and creates better customer experiences,” Thornton said.
It’s worth noting that Salesforce also has extensive partnerships with other cloud providers including Microsoft Azure and Google Cloud Platform.
As is typically the case with Salesforce announcements, while all of these capabilities are being announced today, they are still in the development stage and won’t go into beta testing until later this year with GA expected sometime next year. The companies are expected to release more details about the partnership at Dreamforce and re:Invent, their respective customer conferences later this year.
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Aircall raises $120 million for its cloud-based phone system
Aircall has raised a $120 million Series D round led by Goldman Sachs Asset Management. Following today’s funding round, the company has reached unicorn status, which means it has a valuation above $1 billion — this is the 16th French unicorn.
The startup has been building a cloud-based phone system for call centers, support lines and sales teams. It integrates with Salesforce, HubSpot, Zendesk, Slack, Intercom and other popular CRM, support and communication systems.
Aircall customers can create local numbers and set up an interactive voice response directory. The service manages the call queue for you and your agents can start answering inbound calls. Agents can transfer calls and put customers on hold. Admins can see analytics, monitor calls and see how everyone is doing.
In addition to Goldman Sachs Asset Management, existing investors DTCP, eFounders, Draper Esprit, Adam Street Partners, NextWorldCap and Gaia are also participating once again in today’s funding round.
As a cloud-based software product, Aircall works well with remote or hybrid teams. For the past year, many companies have been looking for a new phone system with various lockdowns taking place around the world. And Aircall has capitalized on this influx of customers.
When it comes to metrics, it means that signups increased by 65% in 2020. New customers include Caudalie, OpenClassrooms and Too Good To Go. Overall, Aircall has 8,500 customers. 15% of them are based in France, 35% in the U.S. and 50% in other countries.
With the new funding round, the company plans to iterate on its product with new integrations with third-party tools, and in particular industry-specific integrations. There will be new offices in London and Berlin as well as new hires in the company’s existing offices based in New York, Paris, Sydney and Madrid.
The company also plans to control a bigger chunk of its tech stack. It means that it’ll collaborate with big telecommunications companies to leverage their networks. You can also expect more product features with better transcription and better sentiment analysis.
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How to launch a successful RPA initiative
Robotic process automation (RPA) is rapidly moving beyond the early adoption phase across verticals. Automating just basic workflow processes has resulted in such tremendous efficiency improvements and cost savings that businesses are adapting automation at scale and across the enterprise.
While there is a technical component to robotic automation, RPA is not a traditional IT-driven solution. It is, however, still important to align the business and IT processes around RPA. Adapting business automation for the enterprise should be approached as a business solution that happens to require some technical support.
A strong working relationship between the CFO and CIO will go a long way in getting IT behind, and in support of, the initiative rather than in front of it.
A strong working relationship between the CFO and CIO will go a long way in getting IT behind, and in support of, the initiative rather than in front of it.
More important to the success of a large-scale RPA initiative is support from senior business executives across all lines of business and at every step of the project, with clear communications and an advocacy plan all the way down to LOB managers and employees.
As we’ve seen in real-world examples, successful campaigns for deploying automation at scale require a systematic approach to developing a vision, gathering stakeholder and employee buy-in, identifying use cases, building a center of excellence (CoE) and establishing a governance model.
Create an overarching vision
Your strategy should include defining measurable, strategic objectives. Identify strategic areas that benefit most from automation, such as the supply chain, call centers, AP or revenue cycle, and start with obvious areas where business sees delays due to manual workflow processes. Remember, the goal is not to replace employees; you’re aiming to speed up processes, reduce errors, increase efficiencies and let your employees focus on higher value tasks.
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Gusto makes first acquisition, buying Ardius to expand into R&D tax credits
Free money from the government sounds like winning the lottery, but the reality is that most tech startups and even local retail businesses and restaurants can potentially qualify for tax credits related to research and development in the United States. Those credits, which is what helps tech giants keep their tax rates to near zero, are hard for smaller companies to receive because of extensive documentation requirements and potential audit costs.
So a number of startups have been launched to solve that gap, and now, larger companies are entering the fray as well.
Gusto, which started off with payroll for SMBs and has since expanded into employee on-boarding, insurance, benefits and other HR offerings, today announced that it is acquiring Ardius, a startup designed to automate tax compliance particularly around R&D tax credits.
The Los Angeles-based company was founded by Joshua Lee in 2018, who previously had worked for more than a decade at accounting firm EY. Terms of the deal were not disclosed, and Ardius will run as an independent business with the entire team transitioning to Gusto.
The strategy here is simple: Most R&D credits require payroll documentation, data that is already stored in Gusto’s system of record. Ardius in its current incarnation was designed to tap into a number of payroll data providers and extract that data and turn it into verifiable tax documents. With this tie-up, the companies can simply do that automatically for Gusto’s extensive number of customers.
Joshua Reeves, co-founder and CEO of Gusto, said that the acquisition falls in line with the company’s long-term focus on customers and simplicity. “We want to bring together technology, great service, [and] make government simpler,” he said. “In some ways, a lot of stuff we’re doing — make payroll simpler, make healthcare simpler, make PPP [loans] and tax credits simpler — just make these things work the way they’re intended to work.” The company presumably could have built out such functionality, but he noted that “time to market” was a crucial point in making Ardius the company’s first acquisition.
Tomer London, co-founder and chief product officer, said that “we’ve been looking at this space for a long time because it kind of connects to one of our original product principles of building a product that is opinionated,” he said. In a space as complicated as HR, “we want to be out there and be an advisor, not just a tool. And this is just such a great example of where you can take the payroll data that we already have and in just a few clicks and in a matter of a few days, get access to really important cash flow for a business.” He noted that tax credits is “something that’s been on our roadmap for a long time.”
Gusto works with more than 100 third-party services that integrate on top of its platform. Reeves emphasized that while Ardius is part of Gusto, all companies — even those that might compete directly with the product — will continue to have equal access to the platform’s data. In its release, the company pointed out that Boast.ai, Clarus, Neo.Tax and TaxTaker are just some of the other tax products that integrate with Gusto today.
Of course, Ardius is just one of a number of competitors that have popped up in the R&D and economic development tax credit space. MainStreet, which I last profiled in 2020 for its seed round, just raised $60 million in funding in March led by SignalFire. Meanwhile, Neo.tax, which I also profiled last year, has raised a total of $5.5 million.
Reeves was sanguine about the attention the space is garnering and the potential competition for Ardius. When it comes to R&D tax credits, “whatever creates more accessibility, we’re a fan of,” he said. “It’s great that there’s more awareness because it’s still under-utilized frankly.” He emphasized that Gusto would be able to offer a more vertically-integrated solution given its data and software than other competitors in the space.
While the pandemic particularly hit SMBs, who often lacked the financial wherewithal of larger companies to survive the crisis, Gusto actually expanded its business as new companies sprouted up. Reeves said the company grew its customer base 50% in its last fiscal year, which ended in April. It “turns out in a health pandemic and in an economic crisis, things like payroll and accessing health care are quite important,” he said. Gusto launched a program to help SMBs collect the government’s stimulus PPP loans.
The company’s main bases of operation are in San Francisco, Denver and New York City, and the company has a growing contingent of remote workers, including the Ardius crew, who will remain based in LA. While Reeves demurred on future acquisitions, Gusto’s focus on expanding to a comprehensive financial wellness platform for both employees and businesses would likely suggest that additional acquisitions may well be in the offing in the future.
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Edtech investors are flocking to SaaS guidance counselors
ApplyBoard, a startup that helps international students find opportunities to study abroad, announced today that it has nearly doubled its valuation in a little over a year. The Ontario-based company is now worth around $3.2 billion after raising a $300 million Series D round led by the Ontario Teachers’ Pension Plan Board.
Startups that help students navigate institutional bureaucracy so they can get more value out of their educational experience may become a growing focus for investors as consumer demand for virtual personalized learning increases.
ApplyBoard makes money from revenue-sharing agreements with colleges and universities. If a student attends a college after using their services, ApplyBoard receives a cut of the tuition. Meanwhile, the service, which helps students search and apply to schools, is free to use.
Co-founder and CEO Martin Basiri did not share specifics on revenue, but he confirmed that his company is growing its sales at a 400% year-over-year rate in 2021. For context, sales in 2019 hit $300 million, meaning that ApplyBoard is making at least $1.2 billion in sales this year.
These figures violate the prevailing edtech narrative from last year: Higher ed is dead! Students don’t want to attend college anymore. Bring back the gap year, but make it permanent!
Instead, this company is proving that the university tech stack is more lucrative than many assumed, especially if you look beyond content offerings and into back-end marketing support.
My take: Startups that help students navigate institutional bureaucracy so they can get more value out of their educational experience may become a growing focus for investors as consumer demand for virtual personalized learning increases.
“Students want a seamless and pain-free application process”
ApplyBoard’s recent fundraising efforts shed a light on its strategy to become, effectively, a tech-savvy guidance counselor for the approximately 200,000 students that it has served to date.
The company raised a $55 million extension round in September to bring on a partner, Education Testing Services (ETS) Strategy Capital, the venture arm of the world’s largest nonprofit education testing and assessment organization. ETS helps administer the TOEFL English-language proficiency test and the GRE graduate admissions test.
The synergies there led ApplyBoard to launch ApplyProof, a service that helps admissions and immigrant officers verify documents that international students need to apply to colleges around the world. Today’s financing event similarly brings in a strategic investor, Ontario Teachers’ Pension Plan.
“The demand remains high post-pandemic and we continue to see a strong, pent-up demand from students wishing to study abroad,” Basiri said. “Students want a seamless and pain-free application process and be able to have all the information they need to make an informed decision.”
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Anrok raises $4.3M to solve sales tax for SaaS companies
It’s easier than ever to build a product and sell it around the United States, or the world. But if you want to do so without incurring the wrath of any particular state, or nation-state, you’d best have your tax matters in order. This is why Stripe’s news last week that it has built tax-focused tooling to help its customers manage their state bills mattered.
But for SaaS companies, things can be more complicated from a tax perspective. That’s what Anrok, a startup working to build sales tax software for SaaS firms, told TechCrunch.
The company’s CEO, Michelle Valentine, said that modern software companies need specialized help. And her startup is announcing a $4.3 million fundraise today to back its efforts. The capital event was led by Sequoia and Index, the latter firm a place where Valentine used to work.
Anrok delivers its service via an API, and charges based on the total dollar value of sales that it helps a customer manage. Its percentage-fee falls with volume, and you can’t pay more than 0.19% of managed revenue, so it’s pretty cheap regardless, given how strong software gross margins tend to be.
The Anrok founding team: Michelle Valentine, and Kannan Goundan. Via the company.
Valentine said that there are three things that make SaaS tax issues more complex than other products. The first deals with addresses. Software companies have to pay sales tax where customers are located, and often only have partial information. Anrok will help with that problem. The CEO also said that variable SaaS billing makes charging the right amount of tax an interesting issue, and that states have tax laws specifically aimed at the software market that must be navigated.
So, a more mass-market solution might not be the best fit for SaaS companies looking to avoid both trouble with states and the work of handling tax matters themselves.
It’s not hard to see why Anrok was able to raise capital. The company is early-stage with its first customers onboarded, so it’s not posting the sort of revenue growth that investors covet at the later stages. What then were its more fetching attributes? From our perspective, on-demand pricing and a simply gigantic market.
Sure, Anrok is serving SaaS businesses, but it’s doing so using what could be described as a post-SaaS business model; on-demand, or usage-based pricing is an increasingly popular way to charge for software products today, putting Anrok closer to the cutting edge in business-model terms. And the company’s market is essentially every software business out there. That’s a lot of TAM to carve into, something that investors love to see.
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Tiger Global leads $30M investment into Briq, a fintech for the construction industry
Briq, which has developed a fintech platform used by the construction industry, has raised $30 million in a Series B funding round led by Tiger Global Management.
The financing is among the largest Series B fundraises by a construction software startup, according to the company, and brings Briq’s total raised to $43 million since its January 2018 inception. Existing backers Eniac Ventures and Blackhorn Ventures also participated in the round.
Briq CEO and co-founder Bassem Hamdy is a former executive at construction tech giant Procore (which recently went public and has a market cap of $10.4 billion) and Canadian software giant CMiC. Wall Street veteran Ron Goldshmidt is co-founder and COO.
Briq describes its offering as a financial planning and workflow automation platform that “drastically reduces” the time to run critical financial processes, while increasing the accuracy of forecasts and financial plans.
Briq has developed a toolbox of proprietary technology that it says allows it to extract and manipulate financial data without the use of APIs. It also has developed construction-specific data models that allows it to build out projections and create models of how much a project might cost, and how much could conceivably be made. Currently, Briq manages or forecasts about $30 billion in construction volume.
Specifically, Briq has two main offerings: Briq’s Corporate Performance Management (CPM) platform, which models financial outcomes at the project and corporate level, and BriqCash, a construction-specific banking platform for managing invoices and payments.
Put simply, Briq aims to allow contractors “to go from plan to pay” in one platform with the goal of solving the age-old problem of construction projects (very often) going over budget. Its longer-term, ambitious mission is to “manage 80% of the money workflows in construction within 10 years.”
The company’s strategy, so far, seems to be working.
From January 2020 to today, ARR has climbed by 200%, according to Hamdy. Briq currently has about 100 employees, compared to 35 a year ago.
Briq has 150 customers, and serves general and specialty contractors from $10 million to $1 billion in revenue. They include Cafco Construction Management, WestCor Companies and Choate Construction and Harper Construction. The company is currently focused on contractors in North America but does have long-term plans to address larger international markets, Hamdy told TechCrunch.
Some context
Hamdy came up with the idea for Santa Barbara, California-based Briq after realizing the vast amount of inefficiencies on the financial side of the construction industry. His goal was to do for construction financials what Procore did to document management, and PlanGrid to construction drawing. He started Briq with his own cash, amassed through secondary sales as Procore climbed the ranks of startups to become a construction industry unicorn.
Briq CEO and co-founder Bassem Hamdy. Image Credits: Briq
“I wanted to figure out how to bring the best of fintech into a construction industry that really guesses every month what the financial outcomes are for projects,” Hamdy told me at the time of the company’s last raise — a $10 million Series A led by Blackhorn Ventures announced in May of 2020. “Getting a handle on financial outcomes is really hard. The vast majority of the time, the forecasted cost to completion is plain wrong. By a lot.”
In fact, according to McKinsey, an astounding 80% of projects run over budget, resulting in significant waste and profit loss.
So at the end of a project, contractors often find themselves having doled out more money and resources than originally planned. This can lead to negative cash flow and profit loss. Briq’s platform aims to help contractors identify outliers, and which projects are more at risk.
Throughout the COVID-19 pandemic, Briq has proven to be “extremely valuable” to contractors, Hamdy said.
“In an industry where margins are so thin, we have given contractors the ability to truly understand where they stand on cash, profit and labor,” he added.
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Extra Crunch roundup: Guest posts wanted, ‘mango’ seed rounds, Expensify’s tech stack
Prospective contributors regularly ask us about which topics Extra Crunch subscribers would like to hear more about, and the answer is always the same:
- Actionable advice that is backed up by data and/or experience.
- Strategic insights that go beyond best practices and offer specific recommendations readers can try out for themselves.
- Industry analysis that paints a clear picture of the companies, products and services that characterize individual tech sectors.
Our submission guidelines haven’t changed, but Managing Editor Eric Eldon and I wrote a short post that identifies the topics we’re prioritizing at the moment:
- How-to articles for early-stage founders.
- Market analysis of different tech sectors.
- Growth marketing strategies.
- Alternative fundraising.
- Quality of life (personal health, sustainability, proptech, transportation).
If you’re a skillful entrepreneur, founder or investor who’s interested in helping someone else build their business, please read our latest guidelines, then send your ideas to guestcolumns@techcrunch.com.
Thanks for reading; I hope you have a great weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Full Extra Crunch articles are only available to members
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Opting for a debt round can take you from Series A startup to Series B unicorn
Image Credits: olegkalina (opens in a new window) / Getty Images
Debt is a tool, and like any other — be it a hammer or handsaw — it’s extremely valuable when used skillfully but can cause a lot of pain when mismanaged. This is a story about how it can go right.
Mario Ciabarra, the founder and CEO of Quantum Metric, breaks down how his company was on a “tremendous growth curve” — and then the pandemic hit.
“As the weeks following the initial shelter-in-place orders ticked by, the rush toward digital grew exponentially, and opportunities to secure new customers started piling up,” Ciabarra writes. “A solution to our money problems, perhaps? Not so fast — it was a classic case of needing to spend in order to make.”
If companies want to preserve equity, debt can be an advantageous choice. Here’s how Quantum Metric did it.
4 proven approaches to CX strategy that make customers feel loved
Image Credits: mucahiddin / Getty Images
People have been working to optimize customer experiences (CX) since we began selling things to each other.
A famous San Francisco bakery has an exhaust fan at street level; each morning, its neighbors awake to the scent of orange-cinnamon morning buns wafting down the block. Similarly, savvy hairstylists know to greet returning customers by asking if they want a repeat or something new.
Online, CX may encompass anything from recommending the right shoes to AI that knows when to send a frustrated traveler an upgrade for a delayed flight.
In light of Qualtrics’ spinout and IPO and Sprinklr’s recent S-1, Rebecca Liu-Doyle, principal at Insight Partners, describes four key attributes shared by “companies that have upped their CX game.”
Twitter’s acquisition strategy: Eat the public conversation
Image Credits: We Are (opens in a new window) / Getty Images
What is a microblogging service doing buying a social podcasting company and a newsletter tool while also building a live broadcasting sub-app? Is there even a strategy at all?
Yes. Twitter is trying to revitalize itself by adding more contexts for discourse to its repertoire. The result, if everything goes right, will be an influence superapp that hasn’t existed anywhere before. The alternative is nothing less than the destruction of Twitter into a link-forwarding service.
Let’s talk about how Twitter is trying to eat the public conversation.
Reading the IPO market’s tea leaves
Image Credits: Nigel Sussman (opens in a new window)
Although it was a truncated holiday week here in the United States, there was a bushel of IPO news. We sorted through the updates and came up with a series of sentiment calls regarding these public offerings.
Earlier this week, we took a look at:
- Marqeta‘s first IPO price range (fintech).
- 1st Dibs‘ first IPO price range (e-commerce).
- Zeta Global‘s IPO pricing (martech).
- The start of SoFi trading post-SPAC (fintech).
- The latest from BarkBox (e-commerce).
How Expensify hacked its way to a robust, scalable tech stack
Image Credits: Nigel Sussman
Part 4 of Expensify’s EC-1 digs into the company’s engineering and technology, with Anna Heim noting that the group of P2P pirates/hackers set out to build an expense management app by sticking to their gut and making their own rules.
They asked questions few considered, like: Why have lots of employees when you can find a way to get work done and reach impressive profitability with a few? Why work from an office in San Francisco when the internet lets you work from anywhere, even a sailboat in the Caribbean?
It makes sense in a way: If you’re a pirate, to hell with the rules, right?
With that in mind, one could assume Expensify decided to ask itself: Why not build our own totally custom tech stack?
Indeed, Expensify has made several tech decisions that were met with disbelief, but its belief in its own choices has paid off over the years, and the company is ready to IPO any day now.
How much of a tech advantage Expensify enjoys owing to such choices is an open question, but one thing is clear: These choices are key to understanding Expensify and its roadmap. Let’s take a look.
Etsy asks, ‘How do you do, fellow kids?’ with $1.6B Depop purchase
Image Credits: Getty Images
The news this week that e-commerce marketplace Etsy will buy Depop, a startup that provides a secondhand e-commerce marketplace, for more than $1.6 billion may not have made a large impact on the acquiring company’s share price thus far, but it provides a fascinating look into what brands may be willing to pay for access to the Gen Z market.
Etsy is buying Gen Z love. Think about it — Gen Z is probably not the first demographic that comes to mind when you consider Etsy, so you can see why the deal may pencil out in the larger company’s mind.
But it isn’t cheap. The lesson from the Etsy-Depop deal appears to be that large e-commerce players are willing to splash out for youth-approved marketplaces. That’s good news for yet-private companies that are popular with the budding generation.
Confluent’s IPO brings a high-growth, high-burn SaaS model to the public markets
Image Credits: Andriy Onufriyenko / Getty Images
Confluent became the latest company to announce its intent to take the IPO route, officially filing its S-1 paperwork this week.
The company, which has raised over $455 million since it launched in 2014, was most recently valued at just over $4.5 billion when it raised $250 million last April.
What does Confluent do? It built a streaming data platform on top of the open-source Apache Kafka project. In addition to its open-source roots, Confluent has a free tier of its commercial cloud offering to complement its paid products, helping generate top-of-funnel inflows that it converts to sales.
What we can see in Confluent is nearly an old-school, high-burn SaaS business. It has taken on oodles of capital and used it in an increasingly expensive sales model.
How to win consulting, board and deal roles with PE and VC funds
Image Credits: Orla (opens in a new window) / Getty Images
Would you like to work with private equity and venture capital funds?
There are relatively few jobs directly inside private equity and venture capital funds, and those jobs are highly competitive.
However, there are many other ways you can work and earn money within the industry — as a consultant, an interim executive, a board member, a deal executive partnering to buy a company, an executive in residence or as an entrepreneur in residence.
Let’s take a look at the different ways you can work with the investment community.
The existential cost of decelerated growth
Image Credits: Nigel Sussman (opens in a new window)
Even among the most valuable tech shops, shareholder return is concentrated in share price appreciation, and buybacks, which is the same thing to a degree.
Slowly growing tech companies worth single-digit billions can’t play the buyback game to the same degree as the majors. And they are growing more slowly, so even a similar buyback program in relative scale would excite less.
Grow or die, in other words. Or at least grow or come under heavy fire from external investors who want to oust the founder-CEO and “reform” the company. But if you can grow quickly, welcome to the land of milk and honey.
Even among the most valuable tech shops, shareholder return is concentrated in share price appreciation, and buybacks, which is the same thing to a degree.
Slowly growing tech companies worth single-digit billions can’t play the buyback game to the same degree as the majors. And they are growing more slowly, so even a similar buyback program in relative scale would excite less.
Grow or die, in other words. Or at least grow or come under heavy fire from external investors who want to oust the founder-CEO and “reform” the company. But if you can grow quickly, welcome to the land of milk and honey.
Hormonal health is a massive opportunity: Where are the unicorns?
Image Credits: Carol Yepes (opens in a new window) / Getty Images
There is a growing group of entrepreneurs who are betting that hormonal health is the key wedge into the digital health boom.
Hormones are fluctuating, ever-evolving, and diverse — but these founders say they’re also key to solving many health conditions that disproportionately impact women, from diabetes to infertility to mental health challenges.
Many believe it’s that complexity that underscores the opportunity. Hormonal health sits at the center of conversations around personalized medicine and women’s health: By 2025, women’s health could be a $50 billion industry, and by 2026, digital health more broadly is estimated to hit $221 billion.
Still, as funding for women’s health startups drops and stigma continues to impact where venture dollars go, it’s unclear whether the sector will remain in its infancy or hit a true inflection point.
3 lessons we learned after raising $6.3M from 50 investors
Image Credits: sorbetto (opens in a new window)/ Getty Images
Two years ago, founders of calendar assistant platform Reclaim were looking for a “mango” seed round — a boodle of cash large enough to help them transition from the prototype phase to staffing up for a public launch.
Although the team received offers, co-founder Henry Shapiro says the few that materialized were poor options, partially because Reclaim was still pre-product.
“So one summer morning, my co-founder and I sat down in his garage — where we’d been prototyping, pitching and iterating for the past year — and realized that as hard as it was, we would have to walk away entirely and do a full reset on our fundraising strategy,” he writes.
Shapiro shares what he learned from embracing failure and offers three conclusions “every founder should consider before they decide to go out and pitch investors.”
For SaaS startups, differentiation is an iterative process
Image Credits: Kevin Schafer / Getty Images
Although software as a service has been thriving as a sector for years, it has gone into overdrive in the past year as businesses responded to the pandemic by speeding up the migration of important functions to the cloud, ActiveCampaign founder and CEO Jason VandeBoom writes in a guest column.
“We’ve all seen the news of SaaS startups raising large funding rounds, with deal sizes and valuations steadily climbing. But as tech industry watchers know only too well, large funding rounds and valuations are not foolproof indicators of sustainable growth and longevity.”
VandeBoom notes that to scale sustainably, SaaS startups need to “stand apart from the herd at every phase of development. Failure to do so means a poor outcome for founders and investors.”
“As a founder who pivoted from on-premise to SaaS back in 2016, I have focused on scaling my company (most recently crossing 145,000 customers) and in the process, learned quite a bit about making a mark,” VandeBoom writes. “Here is some advice on differentiation at the various stages in the life of a SaaS startup.”
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For SaaS startups, differentiation is an iterative process
Software as a service has been thriving as a sector for years, but it has gone into overdrive in the past year as businesses responded to the pandemic by speeding up the migration of important functions to the cloud. We’ve all seen the news of SaaS startups raising large funding rounds, with deal sizes and valuations steadily climbing. But as tech industry watchers know only too well, large funding rounds and valuations are not foolproof indicators of sustainable growth and longevity.
Failing to come across as a unique, differentiated company will likely mean settling for an exit that feels mediocre instead of incredible.
To scale sustainably, grow its customer base and mature to the point of an exit, a SaaS startup needs to stand apart from the herd at every phase of development. Failure to do so means a poor outcome for founders and investors.
As a founder who pivoted from on-premise to SaaS back in 2016, I have focused on scaling my company (most recently crossing 145,000 customers) and in the process, learned quite a bit about making a mark. Here is some advice on differentiation at the various stages in the life of a SaaS startup.
Launch and early years
Differentiation is crucial early on, because it’s one of the only ways to attract customers. Customers can help lay the groundwork for everything from your product roadmap to pricing.
The more you know about your target customers’ pain points with current solutions, the easier it will be to stand out. Take every opportunity to learn about the people you are aiming to serve, and which problems they want to solve the most. Analyst reports about specific sectors may be useful, but there is no better source of information than the people who, hopefully, will pay to use your solution.
The key to success in the SaaS space is solving real problems. Take DocuSign, for example — the company found a way to simply and elegantly solve a niche problem for users with its software. This is something that sounds easy, but in reality, it means spending hours listening to the customer and tailoring your product accordingly.
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The existential cost of decelerated growth
What happens to technology companies with slowing growth and a rising focus on profitability before they reach behemoth scale? How much does the market value hypergrowth?
Just because a technology startup has a hot start, that doesn’t mean it will grow quickly forever. Most will wind up somewhere in the middle — or worse. Put simply, there is a larger number of tech companies that do fine or a little bit worse after they reach scale.
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But what every investor hopes for is the hot company that can keep growth alive even after reaching material scale, running through walls, competitors, economic headwinds and anything else that comes its way. Those companies don’t end up worth a few hundred million, or a billion, but can end up valued in the dozens of billions or more.
In reverse, tech companies — even those with strong gross margins — with slipping growth can see their multiples compress rapidly. Then, the vultures circle.
Which explains some of the news we’ve seen recently in the market. As Dropbox comes under fresh pressure from external parties, joining its erstwhile rival Box in the public-market growth penalty box, we’re seeing companies like Braze, Gong, Shippo and others rip ahead with rapid-fire funding rounds or public brags about their growth.
While the differential between the two groups is clear, it’s still worth exploring in more detail. Let’s talk about the growth dividend. Or, if you’d prefer, the existential cost of growth deceleration.
Grow or die
The news this week that Dropbox has attracted an activist shareholder should not have been a surprise. Its former rival Box is in the midst of a long-running struggle with an activist investor of its own. (More here.)
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