Sapphire Ventures
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Aiming to become the definitive source for location data, SafeGraph raises $45M
While there are plenty of companies selling data about physical locations, SafeGraph CEO Auren Hoffman said his startup is “one of the few companies to sell this data to data science teams.”
For the most part, location data has traditionally been sold to marketers, and Hoffman said, “In the marketing world, if your data is like 40% or 50% true, that’s actually amazing.” But that doesn’t cut it for the data scientist who needs to use it to build complex models and algorithms.
So SafeGraph takes what Hoffman described as a “very, very rigorous approach,” crawling and merging data like business listings, foot traffic and building polygons from 20,000 sources. He also noted that while other businesses treat this data as “an exhaust that they sell on the side of their core business,” it represents “100%” of SafeGraph’s revenue.
Hoffman told me that SafeGraph’s customers are using its data in sectors as varied as GIS/mapping, local search, financial services and logistics. Customers include investment company Ares Management, food distribution company Sysco and Choice Hotels — in a statement, Sysco’s senior manager of market, customer and competitive intelligence Ben Anderson described SafeGraph as “the most comprehensive and actionable POI dataset.”
The startup also says that its data is being used by more than 7,000 data scientists and has been cited in more than 300 academic papers.
Image Credits: SafeGraph
Today, SafeGraph announced that it has raised $45 million in Series B funding led by Sapphire Ventures, bringing its total funding to $61 million. Previous investors including Alex Rosen of Ridge Ventures, DNX Ventures and Peter Thiel also participated.
“What stands out about SafeGraph is how they’ve been able to quickly position themselves into a major player in the geospatial data industry,” said Sapphire Partner Cathy Gao in a statement. “By singularly focusing on providing the highest-quality places data to data science teams, they’ve earned the trust of some of the largest public and private institutions.”
Hoffman noted that the startup has been “extremely cash efficient,” only losing $3 million over the past two years, and that it raised the funding simply to “grow much faster.” Growth plans include international expansion — SafeGraph has been focused on the United States and Canada thus far, with a U.K. launch planned in April — as well as possible acquisitions.
He added that particularly with the pandemic forcing many businesses to close or change their hours, “having really accurate data is going to be a lot more important in a post-COVID world.”
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Customer support startup Gorgias raises $25M
Gorgias announced today that it has raised $25 million in Series B funding, bringing the startup’s pre-money valuation to $300 million.
When the company raised its Series A just over a year ago, CEO Romain Lapeyre (who founded Gorgias with CTO Alex Plugaru) told me that it works with e-commerce businesses to automate responses to their most common customer service questions, while also providing tools that help the support team respond more quickly and even convince customers to buy additional products and services.
Gorgias says it now supports more than 4,500 stores, including Steve Madden, Timbuk2, Fjällräven, Marine Layer, Ellana, Electrolux and Sergio Tacchini. And revenue has grown 200% this year.
That may not be surprising, given the overall growth in e-commerce during the pandemic. As Lapeyre put it, merchants saw “a huge boost” in online orders, which resulted in a similar rise in customer service requests — so they’re increasingly turning to Gorgias for help.
Initially, Lapeyre said merchants are just eager to respond to their customers more quickly and to make their support team more efficient. But over time, they become more interested in using customer support “as way to drive sales.” In fact, he recalled talking to one business that used to compensate its support team based on response time and now offers them a sales commission.
Image Credits: Gorgias
He said he expects these trends to continue after the pandemic ends: “We just jumped five years into the future.”
Gorgias has now raised a total of $40 million. The new round was led by Sapphire Ventures, with participation from SaaStr, Alven, Amplify Partners, CRV and Greycroft.
Lapeyere said the money will allow Gorgias to continue hiring (it went from a team of 30 people to more 100 people this year), particularly on the engineering side, where it can develop even more automation for the platform.
“As consumers increasingly shop online, the Gorgias platform powers a new breed of customer support for high-growth e-commerce brands,” said Sapphire Ventures Managing Director Rajeev Dham in a statement. “Co-founder and CEO Romain Lapeyre and team have built an incredible product that provides e-commerce merchants with a single app to manage all of their customer communications — ultimately delivering a far better customer experience.”
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Join us for a live Q&A with Sapphire’s Jai Das right now!
We’re live! Check the links below!
Today’s the day! In just a few hours I am chatting with with Jai Das, a managing director at Sapphire Ventures.
The conversation is part of the second season of our Extra Crunch Live series that has seen all sorts of investors and founders join TechCrunch for a dig into their work.
Das’ participation comes at the perfect moment: He invested early in MuleSoft, which sold to Salesforce for $6.5 billion back in 2018. Salesforce is expected to announce its purchase of Slack later today, perhaps before our chat. Either way, we’ll ask Das about selling companies, selling them to Salesforce in particular and what we should take away concerning the enterprise software M&A market from the deal.
Here are notes from the last episode of Extra Crunch Live with Bessemer’s Byron Deeter.
And as we noted last week, we will also dig into the role of corporate venture capital in 2020 and beyond, the state of early-to-growth stage investing as Sapphire leads rounds from Series A to Series C, API-led startups, along with the importance of geographic location in the pandemic for founding teams and more.
It’s going to be fun! And it’s in just a few hours. So make sure that your Extra Crunch login works, hit the jump, save the time to your calendar and submit a question ahead of time if you want me to see your notes before we start. In the meantime, I’m going to find my most Zoom-friendly shirt and run through my intro a few times.
We’re live in mere hours! See you soon.
Details
Below are links to add the event to your calendar and to save the Zoom link. We’ll share the YouTube link shortly before the discussion:
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Join us for a live Q&A with Sapphire’s Jai Das on Tuesday at 2 pm EST/11 am PST
Sure, we’re heading into a holiday weekend here in America, but that doesn’t mean that the good ship TechCrunch is going to slow down. We’re diving right back in next week with another installment in season two of Extra Crunch Live, our regular interview series with startup founders, venture capitalists and other leaders from the technology community.
This series is for Extra Crunch members, so if you haven’t signed up you can hop on that train right here.
Next week I’m virtually sitting down with Jai Das, a well-known managing director at Sapphire Ventures.
Das has invested in companies like MuleSoft (sold for $6.5 billion), Alteryx (now public), Square (also public), Sumo Logic (yep, public) while at Sapphire, having previously worked corporate venture jobs at Intel Capital and Agilent Ventures. (Sapphire was itself originally SAP’s corporate venture capital arm, but it split off from its parent in 2011, rebranded and kept on raising funds.)
Here are notes from the last episode of Extra Crunch Live with Bessemer’s Byron Deeter.
It’s going to be fun as there’s so much to talk about. I’m still bubbling up my question list, so to avoid giving the Sapphire PR team too much pre-discussion ammo let’s just say that corporate venture capital’s place in the 2020 boom is an interesting topic for both founders and investors alike.
And I’ll want to press Das on the current market for software startups, where we are in the historical arc of SaaS multiples, the importance of API-led tech upstarts, where founders might look to build the next great enterprise startup and if there are any new platforms bubbling up that could be a foundation for future founders to later leverage.
As this is an Extra Crunch Live, I’ll also work in a few questions from the audience (that means you, make sure your Extra Crunch subscription is live), to augment my own clipboard of notes.
This is going to be a good one. I’ll see you next Tuesday for the show.
Details
Below are links to add the event to your calendar and to save the Zoom link. We’ll share the YouTube link shortly before the discussion:
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Unpacking the Sumo Logic S-1 filing
Setting our dive into Palantir’s gross margins aside for another day, Sumo Logic filed to go public this morning. The Redwood City-based, former startup raised around $340 million while private, according to Crunchbase data.
The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
Sumo Logic parses information collected from its customers’ enterprise apps and integrations to help them pinpoint operational and security issues and lets them dashboard additional elements as they wish. The company claims in its S-1 that its code is “continuous intelligence,” which it brands as “a new category of software.”
Our own Ron Miller summarized Sumo Logic as a “cloud data analytics and log analysis company” when it raised a $110 million Series G last May. At the time, it was valued at north of $1 billion, making it a unicorn.
Sumo Logic’s IPO has been in its plans for some time. We can see this in a 2017 TechCrunch headline noting that Sumo had then raised $75 million, and was “on path” to a public offering. So, how healthy is the company, and what have its investors bought with about a third of a billion dollars in capital? Let’s find out.
Sumo Logic’s financial performance
Up top: Sumo Logic operates on a fiscal calendar that ends January 31 of each calendar year. This is super standard for SaaS companies as it allows the firm to not wrap its year during the holiday period. This is good for sales teams and so forth.
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Uptycs lands $30M Series B to keep building security analytics platform
Every company today is struggling to deal with security and understanding what is happening on their systems. This is even more pronounced as companies have had to move their employees to work from home. Uptycs, a Boston-area security analytics startup, announced a $30 million Series B today to help companies detect and understand breaches when they happen.
Sapphire Ventures led the round with help from Comcast Ventures and ForgePoint Capital. The startup has now raised a total of $43 million, according to the company. Under the terms of today’s deal, Sapphire Ventures’ president and managing director Jai Das will be joining the company’s board.
Company co-founder and CEO Ganesh Pai says he and his co-founders previously worked at Akamai, where they observed Akamai’s debugging and diagnostic tools, which were designed to work at massive scale. The founders believed they could use a similar approach to building a security analytics platform, and in 2016 the group launched Uptycs .
“We help people to solve intrusion detection, compliance and audit and incident investigation. These are table stakes requirements [for security solutions] that most large scale organizations have, and of course with their scale the challenges vary. What we at Uptycs do is provide a solution for that,” Pai told TechCrunch.
The company uses a flight recorder approach to security, giving security operations teams the ability to sift through the data and review exactly how a detection happened and how the intruder got through the company’s defenses.
He recognizes his company is fortunate to get a round this large right now, but he says the solution has attracted a number of customers signing seven-digit contracts and this in turn got the attention of investors. “That customer engagement, their experience and this commitment from our customers led to this substantial round of funding,” he said.
The company currently has 65 employees spread across offices in Waltham, a Boston suburb, as well as two offices in India. Pai says the plan is to double that number in the next 12 months. “Between the cash flow from our existing customers and the pipeline for us and the funding, we are planning to grow in a meaningful way. If everything aligns with our expectation we will double our team size in the next 12 months,” he said.
As he grows his company in this way, Pai says they are talking to their investors about how to build a diverse workforce. “We’ve thought long and hard about it, both in terms of diversity and inclusion. It is a lot harder to execute because at the end of the day, there is a finite talent pool, but we are having conversations with our investors, who have seen patterns of success in terms of implementing such plans from growth stage ventures,” he said.
He added, “And of course we are a very early-stage company, but we are extremely cognizant, and given the current circumstances are acutely aware that we need to do our very best and make a difference.”
As the company has moved to work from home across its operations, he says it has benefited from working in the cloud from the start. “As an organization we are very fortunate that we built our organization so that everything runs in the cloud and everyone has been able to remain very productive,” he said.
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Contentful raises $80M Series E round for its headless CMS
Headless CMS company Contentful today announced that it has raised an $80 million Series E funding round led by Sapphire Ventures, with participation from General Catalyst, Salesforce Ventures and a number of other new and existing investors. With this, the company has now raised a total of $158.3 million and a Contentful spokesperson tells me that it is approaching a $1 billion valuation.
In addition, the company also today announced that it has hired Bridget Perry as its CMO. She previously led Adobe’s marketing efforts across Europe, the Middle East and Africa.
Currently, 28% of the Fortune 500 use Contentful to manage their content across platforms. The company says it has a total of 2,200 paying customers right now and these include the likes of Spotify, ITV, the British Museum, Telus and Urban Outfitters.
Steve Sloan, the company’s CEO who joined the company late last year, attributes its success to the fact that virtually every business today is in the process of figuring out how to become digital and serve its customers across platforms — and that’s a process that has only been accelerated by the coronavirus pandemic.
“Ten or 15 years ago, when these content platforms or content management systems were created, they were a) really built for a web-only world and b) where the website was a complement to some other business,” he said. “Today, the mobile app, the mobile web experience is the front door to every business on the planet. And that’s never been any more clear than in this recent COVID crisis, where we’ve seen many, many businesses — even those that are very traditional businesses — realize that the dominant and, in some cases, only way their customers can interact with them is through that digital experience.”
But as they are looking at their options, many decide that they don’t just want to take an off-the-shelf product, Sloan argues, because it doesn’t allow them to build a differentiated offering.
Image Credits: Contentful
Perry also noted that this is something she saw at Adobe, too, as it built its digital experience business. “Leading marketing at Adobe, we used it ourselves,” she said. “And so the challenge that we heard from customers in the market was how complex it was in some cases to implement, to organize around it, to build those experiences fast and see value and impact on the business. And part of that challenge, I think, stemmed from the kind of monolithic, all-in-one type of suite that Adobe offered. Even as a marketer at Adobe, we had challenges with that kind of time to market and agility. And so what’s really interesting to me — and one of the reasons why I joined Contentful — is that Contentful approaches this in a very different way.”
Sloan noted that putting the round together was a bit of an adventure. Contentful’s existing investors approached the company around the holidays because they wanted to make a bigger investment in the company to fuel its long-term growth. But at the time, the company wasn’t ready to raise new capital yet.
“And then in January and February, we had inbound interest from people who weren’t yet investors, who came to us and said, ‘hey, we really want to invest in this company, we’ve seen the trend and we really believe in it.’ So we went back to our insiders and said, ‘hey, we’re going to think about actually moving in our timeline for raising capital,” Sloan told me. “And then, right about that time is when COVID really broke out, particularly in Western Europe in North America.”
That didn’t faze Contentful’s investors, though.
“One of the things that really stood out about our investors — and particularly our lead investor for this round Sapphire — is that when everybody else was really, really frightened, they were really clear about the opportunity, about their belief in the team and about their understanding of the progress we had already made. And they were really unflinching in terms of their support,” Sloan said.
Unsurprisingly, the company plans to use the new funding to expand its go-to-market efforts (that’s why it hired Perry, after all), but Sloan also noted that Contentful plans to invest quite a bit into R&D, as well, as it looks to help its customers solve more adjacent problems.
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SaaS earnings rise as pandemic pushes companies more rapidly to the cloud
As the pandemic surged and companies moved from offices to working at home, they needed tools to ensure the continuity of their business operations. SaaS companies have always been focused on allowing work from anywhere there’s access to a computer and internet connection, and while the economy is reeling from COVID-19 fallout, modern software companies are thriving.
That’s because the pandemic has forced companies that might have been thinking about moving to the cloud to find tools what will get them there much faster. SaaS companies like Zoom, Box, Slack, Okta and Salesforce were there to help; cloud security companies like CrowdStrike also benefited.
While it’s too soon to say how the pandemic will affect work long term when it’s safe for all employees to return to the office, it seems that companies have learned that you can work from anywhere and still get work done, something that could change how we think about working in the future.
One thing is clear: SaaS companies that have reported recent earnings have done well, with Zoom being the most successful example. Revenue was up an eye-popping 169% year-over-year as the world shifted in a big way to online meetings, swelling its balance sheet.
There is a clear connection between the domestic economy’s rapid transition to the cloud and the earnings reports we are seeing — from infrastructure to software and services. The pandemic is forcing a big change to happen faster than we ever imagined.
Big numbers
Zoom and CrowdStrike are two companies expected to grow rapidly thanks to the recent acceleration of the digital transformation of work. Their earnings reports this week made those expectations concrete, with both firms beating expectations while posting impressive revenue growth and profitability results.
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Continuous delivery pioneer CircleCI scores $100M Series E
CircleCI, an early adherent to the notion of continuous delivery when it launched in 2011, announced a $100 million Series E investment today. It comes on top of a $56 million round last July.
The round was led by IVP and Sapphire Ventures . Under the terms of the deal, Cack Wilhelm will be joining the CircleCI board. Jai Das from Sapphire will also be joining the board as an observer.
Today’s investment brings the total raised to $215 million, according to the company, with $156 million coming over the last 8 months. The company did not want to discuss its current valuation.
Circle CI CEO Jim Rose says with so much uncertainty because of COVID-19 he welcomes not only the money, but the quality of the firms and people involved in the investment.
“We’re really excited to get both IVP and Sapphire because they’ve seen all of it all the way through public and beyond. Given all of the nuttiness over the last few months obviously having cash on the balance sheet is extremely helpful, but the other part, too is that this a time when you want to have more brains around the table, not fewer. And so being able to get people to help out and just think about the problems that we’re encountering right now is really helpful,” Rose told TechCrunch .
Rose recognizes the huge challenge everyone is facing, but he sees this switch to remote workforces really driving the need for more automation, something his company is in a position to help DevOps teams with.
“What we’ve seen from a DevOps perspective is that this forced migration to remote-only for so many organizations has really driven the urgency for more automation in the DevOps pipeline,” he said.
He said this has led to a huge surge in usage on the platform in recent weeks, and today’s investment will at least partly go towards making sure there are enough resources in place to keep the platform stable whatever comes.
“When we think about money and we think about where we’re investing in the near term, we’re investing a lot in making sure that the platform is stable and available and supporting all of our customers as they go through this. You know this is a difficult time, a difficult transition and we’re trying to make sure that we’re doing everything we can to support our customers through that process,” Rose said.
Many companies at this stage of startup maturity begin to look ahead to an IPO, but Rose isn’t ready to discuss that, especially in the current economic climate. “We’re going to have to get folks to some kind of liquidity at some point, but I think right now our focus is on really investing in the platform and investing in our customers and then we’ll let the market clear out and figure out what the new normal looks like,” he said.
The company would consider making some acquisitions with its base of capital if the right opportunity came along. “We’re always evaluating and always looking around. One of the interesting things about our space is that it’s flooded with new and innovative approaches to point problems. There are a lot of companies that are interesting, so we’re definitely always looking around,” he said.
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Meet 5 cybersecurity unicorns that could IPO in 2020
There was a lot of moving and shaking in the cybersecurity unicorn world in 2019.
It was a year that saw two of the biggest exits in cybersecurity history: CrowdStrike went public valued at $3.35 billion and Cloudflare rocketed 20% in its first day on the stock market.
Clearly, the cybersecurity market is booming. Recent data suggests that cybersecurity investing could reach $250 billion by 2023, and spending rose in 2019 more than any other industry. If that pace keeps up, there’s little to suggest that the cybersecurity “bubble” will burst any time soon.
A number of cybersecurity companies are firmly in the club of private companies worth $1 billion or more. These unicorns represent some of the best talent, technologies and offerings in cybersecurity, but the club is getting crowded. Now that CrowdStrike and Cloudflare have graduated to the public market, there are a number of cybersecurity companies that could make the leap.
Tanium
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