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TrueFort snares $30M Series B to expand zero trust application security solution
As companies try to navigate an ever-changing security landscape, it can be challenging to protect everything. Security startup TrueFort has built a zero trust solution focusing on protecting enterprise applications. Today, the company announced a $30 million Series B.
Shasta Ventures led today’s round with participation from new firms Canaan and Ericsson Ventures along with existing investors Evolution Equity Partners, Lytical Ventures and Emerald Development Managers. Under the terms of the agreement Nitin Chopra, managing director at Shasta Ventures, will be joining the company board. Today’s investment brings the total raised to almost $48 million.
CEO and co-founder Sameer Malhotra says that TrueFort protects customers by analyzing at each application and figuring out what normal behavior looks like. Once it understands that, it will flag anything that falls outside of the norm. The company achieves this by gathering data from partners like CrowdStrike and from multiple points within the application and infrastructure.
“Once we get this telemetry, whether it’s networks, endpoints, servers or third-party partners, we then help the customer build a picture of what those applications are doing and what’s normal behavior. We then help them baseline that, and monitor that in real time with response and real-time controls to continue those applications through their normal life cycle,” he said.
Zero trust is a concept where as a matter of policy you assume that you cannot trust any individual or device until the entity proves it belongs on your systems. Malhotra says that customers are becoming more comfortable with the concept and in 2020 the company saw massive 650% YoY revenue growth, with it up 120% YoY this year so far.
“We are seeing the demand, especially as zero trust is becoming a more familiar vernacular amongst the security community […]. Again, it’s having the visibility and understanding, and then being able to then reduce it to the limited number of acceptable relationships or executions,” he said. And he believes that it all comes down to understanding your applications and how they operate.
TrueFort co-founders Nazario Parsacala and Sameer Malhotra. Image Credits: TrueFort
The company currently has 60 employees, with hopes of reaching 85 or 90 by the end of the year. Malhotra says that as they build the employee base, they are driving to make it diverse at every level.
“We look at diversity across our whole management team, all the way from the board down to our different levels. We are quite aggressive in hiring diverse candidates, whether they’re women or LGBTQ or people of color. And we have focused programs where we work with different universities […] to bring on new employees from a diverse talent pool. We also work with different recruiters from that perspective, and our focus is always to look at a different palette and to make sure that we’re as diverse an organization as we can,” he said.
The company was founded in 2015 by Malhotra and his partner Nazario Parsacala, both of whom spent more than 20 years working at big financial services companies — Goldman Sachs and JP Morgan. They worked for a couple of years building the program, launching the first beta in 2017 before bringing the first generally available product to market the following year.
Currently customers can install the solution on prem or in the cloud of their choice, but the company has a SaaS solution in the works as well, that will be ready in the next couple of months.
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Facebook buys game studio BigBox VR
Facebook has bought several virtual reality game studios over the past couple of years, and they added one more to their portfolio Friday with the acquisition of Seattle-based BigBox VR.
The studio’s major title, “Population: One,” was one of the big post-launch releases for Facebook’s Oculus Quest 2 headset and is a pretty direct Fortnite clone, copying a number of key gameplay techniques while adapting them for the movements unique to virtual reality and bringing in their own lore and art style.
As has been the case for most of these studio acquisitions, terms weren’t disclosed. BigBox raised $6.5 million according to Crunchbase, with funding from Shasta Ventures, Outpost Capital, Pioneer Square Labs and GSR Ventures.
“POP: ONE stormed onto the VR scene just nine months ago and has consistently ranked as one the top-performing titles on the Oculus platform, bringing together up to 24 people at a time to connect, play, and compete in a virtual world,” Facebook’s Mike Verdu wrote in a blog post.
It’s not unusual for a gaming hardware platform owner to build up their own web of studios building platform exclusives, but in the VR world things are a little different, given that Facebook has few real competitors.
While many of the developers inside Oculus Studios continue to build titles for Valve’s Steam store, which are accessible with third-party headsets, most non-Facebook VR platforms seem to be a shrinking piece of the overall VR pie, having been priced out of the market by Facebook’s aggressive pursuit of a mass market audience. Facebook’s Oculus Quest 2 retails for $299 and the company has said that it outsold all of its previous devices combined in its first few months.
In April, Facebook acquired Downpour Interactive, maker of the VR shooter “Onward.”
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Mustard raises $1.7M to improve athletic mechanics with AI
Athletic coaching is a massive, multi-billion-dollar industry. No surprise, really, given the massive revenue some top athletes are able to generate. Mustard is working to supplant — or at least augment — some of that pricey coaching with the launch of a new mobile app designed to analyze an athlete’s mechanics and offer corrective tips to help them improve.
The company was co-founded by Tom House, a former reliever whose coaching career has earned him the reputation as one of the “father[s] of modern pitching mechanics.”
“Too many kids miss out on the power of play and the many physical and mental benefits of sports—studies show that 70% of kids stop playing sports by the age of 13 due to cost and lack of access to quality coaching. Mustard offers every kid access to the same coaching programs and extensive biomechanical analysis used by the best athletes in the world, and the same personalized training protocols that I use with the Hall of Famers I see in person,” House says in a release tied to the news. “We want to make elite personalized coaching accessible to all.”
Mustard announced this week that it has raised $1.7 million to improve its tool, led by Shasta Ventures and Intersect VC, along with a number of angel investors, including David Novak and Mike Dixon, and all-star athletes Nolan Ryan and Drew Brees. Ryan, in fact, has become one of the main faces of the company, gracing its home page, along with a color scheme that appears inspired by his days with the Astros.
The name isn’t great. It’s a reference to the phrase “put some mustard on it” — which refers to the act of adding a bit of an edge to a throw.
The app is opening up for a limited, free public beta, focused solely on baseball to start. “The product will be entirely free at first,” CEO Rocky Collis tells TechCrunch. “Over time, we will add premium features for a low monthly subscription. Even when premium features are added, we plan to continue to offer a free version of the app that offers tremendous value to users.”
The system relies on the smartphone’s camera and then uses proprietary AI algorithms to monitor the player’s motion and approximate human athletic coaching. For the baseball side of things, the company has employed engineers from Major League Baseball Advanced Media (MLBAM). Future sports will be added at some point down the road.
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Leanplum raises another $27M, shakes up its executive ranks
Customer engagement platform Leanplum today announced that it has raised a $27 million extension to its 2017 $47 million Series D round. This additional funding was led by previous investors Norwest Venture Partners and Shasta Ventures. Kleiner Perkins, Canaan and Launchub also participated in this round, which the company says it will use to bolster its product development and go-to-market efforts. With this, Leanplum has now raised a total of $125 million.
Maybe just as importantly, Leanplum also announced a major shakeup of its executive ranks. The company appointed George Garrick as president and CEO, and Sheri Huston as chief financial officer. Co-founder and former CEO Momchil Kyurkchiev will step into the chief product officer role.
Garrick brings a wealth of experience with him, having been the CEO of companies like Flycast, Placeware, Wine.com and Tapjoy . Huston, too, comes into the role with a lot of industry experience as the former CFO at Comscore and LiquiBox. The company is also adding Dynamic Signal founder Russ Fradin to its board of directors.
The company describes the changes in its executive ranks as a “transition.”
“Many if not most startups at some point in their growth realize that a management transition makes sense as the requirements for the CEO evolve from starting and proving a company, to running and scaling it,” Garrick told us in a statement. “Leanplum’s board and founders agreed that such a transition would be appropriate as Leanplum accelerates its growth phase.”
This was echoed by Kyurkchiev: “George is the right leader for Leanplum. His strong management experience with companies at our stage and in our domain will be essential for Leanplum as we continue to drive growth and expand globally.”
Leanplum says about 2 billion people used apps and websites that use its services in 2019.
As for the new funding, the company says it was simply easier to extend its Series D, which has the same investors as the original D round. “The board felt it was easier and more appropriate to just extend the D round rather than move into the next letter. Also, we wanted to minimize ‘letter creep,’ ” Garrick said.
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Leading robotics VCs talk about where they’re investing
The Valley’s affinity for robotics shows no signs of cooling. Technical enhancements through innovations like AI/ML, compute power and big data utilization continue to drive new performance milestones, efficiencies and use cases.
Despite the old saying, “hardware is hard,” investment in the robotics space continues to expand. Money is pouring in across robotics’ billion-dollar sub verticals, including industrial and labor automation, drone delivery, machine vision and a wide range of others.
According to data from Pitchbook and Crunchbase, 2018 saw new highs for the number of venture deals and total invested capital in the space, with roughly $5 billion in investment coming from nearly 400 deals. With robotics well on its way to again set new investment peaks in 2019, we asked 13 leading VCs who work at firms spanning early to growth stages to share what’s exciting them most and where they see opportunity in the sector:
- Shahin Farshchi, Lux Capital
- Kelly Chen, DCVC
- Rob Coneybeer, Shasta Ventures
- Aaron Jacobson, NEA
- Eric Migicovsky, Y Combinator
- Helen Liang, FoundersX Ventures
- Andrew Byrnes, Micron Ventures
- Ludovic Copéré Sony Innovation Fund
- Costantino Mariella, Sony Innovation Fund
- Cyril Ebersweiler, SOSV & HAX
- Peter Barrett, Playground Global
- Bruce Leak, Playground Global
- Jim Adler, Toyota AI Ventures
Participants discuss the compelling business models for robotics startups (such as “Robots as a Service”), current valuations, growth tactics and key robotics KPIs, while also diving into key trends in industrial automation, human replacement, transportation, climate change, and the evolving regulatory environment.
Shahin Farshchi, Lux Capital
Which trends are you most excited in robotics from an investing perspective?
The opportunity to unlock human superpowers:
- Increase productivity to enhance creativity leading to new products and businesses.
- Automating dangerous tasks and eliminating undesirable, dangerous jobs in mining, manufacturing, and shipping/logistics.
- Making the most deadly mode of transport: driving, 100% safe.
How much time are you spending on robotics right now? Is the market under-heated, overheated, or just right?
- Three-quarters of the new opportunities I look at involve some sort of automation.
- The market for robot startups attempting direct human labor replacement, floor-sweeping, and dumb-waiter robots, and robotic lawnmowers and vacuums is OVER heated (too many startups).
- The market for robot startups that assist human workers, increase human productivity, and automate undesirable human tasks is UNDER heated (not enough startups).
Are there startups that you wish you would see in the industry but don’t? Plus any other thoughts you want to share with TechCrunch readers.
I want to see more founders that are building robotics startups that:
- Solve LATENT pain points in specific, well-understood industries (vs. building a cool robot that can do cool things).
- Focus on increasing HUMAN productivity (vs. trying to replace humans).
- Are solving for building interesting BUSINESSES (vs. emphasizing cool robots).
Kelly Chen, DCVC
Three years ago, the most compelling companies to us in the industrial space were in software. We now spend significantly more time in verticalized AI and hardware. Robotic companies we find most exciting today are addressing key driver areas of (1) high labor turnover and shortage and (2) new research around generalization on the software side. For many years, we have seen some pretty impressive science projects out of labs, but once you take these into the real world, they fail. In these changing environmental conditions, it’s crucial that robots work effectively in-the-wild at speeds and economics that make sense. This is an extremely difficult combination of problems, and we’re now finally seeing it happen. A few verticals we believe will experience a significant overhaul in the next 5 years include logistics, waste, micro-fulfillment, and construction.
With this shift in robotic capability, we’re also seeing a shift in customer sentiment. Companies who are used to buying outright machines are now more willing to explore RaaS (Robot as a Service) models for compelling robotic solutions – and that repeat revenue model has opened the door for some formerly enterprise software-only investors. On the other hand, companies exploring robotics in place of tasks with high labor shortages, such as trucking or agriculture, are more willing to explore per hour or per unit pick models.
Adoption won’t be overnight, but in the medium term, we are very enthusiastic about the ways robotics will transform industries. We do believe investing in this space requires the right technical know-how and network to evaluate and support companies, so momentum investors looking to dip their hand into a hot space may be disappointed.
Rob Coneybeer, Shasta Ventures
We’re entering the early stages of the golden age of robotics. Robotics is already a huge, multibillion-dollar market – but today that market is dominated by industrial robotics, such as welding and assembly robots found on automotive assembly lines around the world. These robots repeat basic tasks, over and over, and are usually separated by caged walls from humans for safety. However, this is rapidly changing. Advances in perception, driven by deep learning, machine vision and inexpensive, high-performance cameras allow robots to safely navigate the real world, escape the manufacturing cages, and closely interact with humans.
I think the biggest opportunities in robotics are those which attack enormous markets where it’s difficult to hire and retain labor. One great example is long-haul trucking. Highway driving represents one of the easiest problems for autonomous vehicles, since the lanes tend to be well-marked, the roads have gentle curves, and all traffic runs in the same direction. In the United States alone, long haul trucking is a multi-hundred billion dollar market every year. The customer set is remarkably scalable with standard trailer sizes and requirements for shipping freight. Yet at the same time, trucking companies have trouble hiring and retaining drivers. It’s the perfect recipe for robotic opportunity.
I’m intrigued by agricultural robots. I’ve seen dozens of companies attacking every part of the farming equation – from field clearing and preparation, to seeding, to weeding, applying fertilizer, and eventually harvesting. I think there’s a lot of value to be “harvested” here by robots, especially since seasonal field labor is becoming harder to find and increasingly expensive. One enormous challenge in this market, however, is that growing seasons mean that the robotic machinery has a lot of downtime and the cost of equipment isn’t as easily amortized in other markets with higher utilization. The other big challenge is that fields are very, very tough on hardware and electronics due to environmental conditions like rain, dust and mud.
There are a ton of important problems to be solved in robotics. The biggest open challenges in my mind are locomotion and grasping. Specifically, I think that for in-building applications, robots need to be able to do all the thing which humans can do – specifically opening and closing doors, climbing stairs, and picking items off of shelves and putting them down gently. Plenty of startups have tackled subsets of these problems, but to date no one has built a generalized solution. To be fair, to get to parity with humans on generalized locomotion and grasping, it’s probably going to take another several decades.
Overall, I feel like the funding environment for robotics is about right, with a handful of overfunded areas (like autonomous passenger vehicles). I think that the most overlooked near-term opportunity in robotics is teleoperation. Specifically, pairing fully automated robotic operations with occasional human remote operation of individual robots. Starship Technologies is a perfect example of this. Starship is actively deploying local delivery robots around the world today. Their first major deployment is at George Mason University in Virginia. They have nearly 50 active robots delivering food around the campus. They’re autonomous most of the time, but when they encounter a problem or obstacle they can’t solve, a human operator in a teleoperation center manually controls the robot remotely. At the same time. Starship tracks and prioritizes these problems for engineers to solve, and slowly incrementally reduces the number of problems the robots can’t solve on their own. I think people view robotics as a “zero or one” solution when in fact there’s a world where humans and robots work together for a long time.
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MediaLab acquires messaging app Kik, expanding its app portfolio
Popular messaging app Kik is, indeed, “here to stay” following an acquisition by the Los Angeles-based multimedia holding company, MediaLab.
It echoes the same message from Kik’s chief executive Tim Livingston last week when he rebuffed earlier reports that the company would shut down amid an ongoing battle with the U.S. Securities and Exchange Commission. Livingston had tweeted that Kik had signed a letter-of-intent with a “great company,” but that it was “not a done deal.”
Now we know the the company: MediaLab. In a post on Kik’s blog on Friday the MediaLab said that it has “finalized an agreement” to acquire Kik Messenger.
“Kik is one of those amazing places that brings us back to those early aspirations,” the blog post read. “Whether it be a passion for an obscure manga or your favorite football team, Kik has shown an incredible ability to provide a platform for new friendships to be forged through your mobile phone.”
MediaLab is a holding company that owns several other mobile properties, including anonymous social network Whisper and mixtape app DatPiff. In acquiring Kik, the holding company is expanding its mobile app portfolio.
MediaLab said it has “some ideas” for developing Kik going forwards, including making the app faster and reducing the amount of unwanted messages and spam bots. The company said it will introduce ads “over the coming weeks” in order to “cover our expenses” of running the platform.
Buying the Kik messaging platform adds another social media weapon to the arsenal for MediaLab and its chief executive, Michael Heyward .
Heyward was an early star of the budding Los Angeles startup community with the launch of the anonymous messaging service, Whisper nearly 8 years ago. At the time, the company was one of a clutch of anonymous apps — including Secret and YikYak — that raised tens of millions of dollars to offer online iterations of the confessional journal, the burn book, and the bathroom wall (respectively).
In 2017, TechCrunch reported that Whisper underwent significant layoffs to stave off collapse and put the company on a path to profitability.
At the time Whisper had roughly 20 million monthly active users across its app and website, which the company was looking to monetize through programmatic advertising, rather than brand-sponsored campaigns that had provided some of the company’s revenue in the past. Through widgets, the company had an additional 10 million viewers of its content per-month using various widgets and a reach of around 250 million through Facebook and other social networks on which it published posts.
People familiar with the company said at the time that it was seeing gross revenues of roughly $1 million and was going to hit $12.5 million in revenue for that calendar year. By 2018 that revenue was expected to top $30 million, according to sources at the time.
The flagship Whisper app let people post short bits of anonymous text and images that other folks could like or comment about. Heyward intended it to be a way for people to share more personal and intimate details — to be a social network for confessions and support rather than harassment.
The idea caught on with investors and Whisper managed to raise $61 million from investors including Sequoia, Lightspeed Venture Partners, and Shasta Ventures . Whisper’s last round was a $36 million Series C back in 2014.
Fast forward to 2018 when Secret had been shut down for three years while YikYak also went bust — selling off its engineering team to Square for around $1 million. Whisper, meanwhile, seemingly set up MediaLab as a holding company for its app and additional assets that Heyward would look to roll up. The company filed registration documents in California in June 2018.
According to the filings, Susan Stone, a partner with the investment firm Sierra Wasatch Capital, is listed as a director for the company.
Heyward did not respond to a request for comment.
Zack Whittaker contributed reporting for this article.
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Meme editor Kapwing grows 10X, raises $11M
Kapwing is a laymen’s Adobe Creative Suite built for what people actually do on the internet: make memes and remix media. Need to resize a video? Add text or subtitles to a video? Trim or crop or loop or frame or rotate or soundtrack or… then you need Kapwing. The free web and mobile tool is built for everyone, not just designers. No software download or tutorials to slog through. Just efficient creativity.
In a year since coming out of stealth with 100,000 users, Kapwing has grown 10X, to more than 1 million. Now it going pro, building out its $20/month collaboration tools for social media managers and scrappy teams. But it won’t forget its roots with teens, so it has dropped its pay-$6-to-remove-watermarks tier while keeping its core features free.
Eager to capitalize on the meme and mobile content business, CRV has just led an $11 million Series A round for Kapwing. It’s joined by follow-on cash from Village Global, Sinai and Shasta Ventures, plus new investors Jane VC, Harry Stebbings, Vector and the Xoogler Syndicate. CRV partners “the venture twins” Justine and Olivia Moore actually met Kapwing co-founder and CEO Julia Enthoven while they all worked at The Stanford Daily newspaper in 2012.
Need to edit a meme or video? Kapwing has all the resizing, GIF, & subtitle tools you need https://t.co/FXDjShlUTq pic.twitter.com/1fEHxGoboz
— Josh Constine (@JoshConstine) September 24, 2019
“As a team, we love memes. We talk about internet fads almost every day at lunch and pay close attention to digital media trends,” says Enthoven, who started the company with fellow Googler Eric Lu. “One of our cultural tenets is to respect the importance of design, art and culture in the world, and another one is to not take ourselves too seriously.” But it is taking on serious clients.
As Kapwing’s toolset has grown, it has seen paying customers coming from Amazon, Sony, Netflix and Spotify. Now only 13% of what’s made with it are traditional text-plus-media memes. “Kapwing will always be designed for creators first: the students, artists, influencers, entrepreneurs, etc. who define and spread culture,” says Enthoven. “But we make money from the creative professionals, marketers, media teams and office workers who need to create content for work.”
That’s why in addition to plenty of templates for employing the latest trending memes, Kapwing now helps Pro subscribers with permanent hosting, saving throughout the creation process and re-editing after export. Eventually it plans to sell enterprise licenses to let whole companies use Kapwing.
Copycats are trying to chip away at its business, but Kapwing will use its new funding to keep up a breakneck pace of development. Pronounced “Ka-Pwing,” like a bullet ricochet, it’s trying to stay ahead of Imgflip, ILoveIMG, Imgur’s on-site tool and more robust apps like Canva.
If you’ve ever been stuck with a landscape video that won’t fit in an Instagram Story, a bunch of clips you want to stitch together or the need to subtitle something for accessibility, you’ll know the frustration of lacking a purpose-built tool. And if you’re on mobile, there are even fewer options. Unlike some software suites you have to install on a desktop, Kapwing works right from a browser.
” ‘Memes’ is such a broad category of media nowadays. It could refer to a compilation like the political singalong videos, animations like Shooting Star memes or a change in music like the AOC Dancing memes,” Enthoven explains. “Although they used to be edgy, memes have become more mainstream . . . Memes popularized new types of multimedia formats and made raw, authentic footage more acceptable on social media.”
As communication continues to shift from text to visual media, design can’t only be the domain of designers. Kapwing empowers anyone to storytell and entertain, whether out of whimsy or professional necessity. If big-name creative software from Adobe or Apple don’t simplify and offer easy paths through common use cases, they’ll see themselves usurped by the tools of the people.
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Prodly announces $3.5M seed to automate low-code cloud deployments
Low-code programming is supposed to make things easier on companies, right? Low-code means you can count on trained administrators instead of more expensive software engineers to handle most tasks, but like any issue solved by technology, there are always unintended consequences. While running his former company, Steelbrick, which he sold to Salesforce in 2015 for $360 million, Max Rudman identified a persistent problem with low-code deployments. He decided to fix it with automation and testing, and the idea for his latest venture, Prodly, was born.
The company announced a $3.5 million seed round today, but more important than the money is the customer momentum. In spite of being a very early-stage startup, the company already has 100 customers using the product, a testament to the fact that other people were probably experiencing that same pain point Rudman was feeling, and there is a clear market for his idea.
As Rudman learned with his former company, going live with the data on a platform like Salesforce is just part of the journey. If you are updating configuration and pricing information on a regular basis, that means updating all the tables associated with that information. Sure, it’s been designed to be point and click, but if you have changes across 48 tables, it becomes a very tedious task, indeed.
The idea behind Prodly is to automate much of the configuration, provide a testing environment to be sure all the information is correct and, finally, automate deployment. For now, the company is just concentrating on configuration, but with the funding it plans to expand the product to solve the other problems, as well.
Rudman is careful to point out that his company’s solution is not built strictly for the Salesforce platform. The startup is taking aim at Salesforce admins for its first go-round, but he sees the same problem with other cloud services that make heavy use of trained administrators to make changes.
“The plan is to start with Salesforce, but this problem actually exists on most cloud platforms — ServiceNow, Workday — none of them have the tools we have focused on for admins, and making the admins more productive and building the tooling that they need to efficiently manage a complex application,” Rudman told TechCrunch.
Customers include Nutanix, Johnson & Johnson, Splunk, Tableau and Verizon (which owns this publication). The $3.5 million round was led by Shasta Ventures, with participation from Norwest Venture Partners.
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Lattice raises another $15M to improve performance reviews
Sam Altman’s little brother Jack is an entrepreneur, too.
Jack Altman, whose resume includes a stint as vice president of business development at Teespring, has raised $15 million in Series B funding for his startup, Lattice, a modern approach to corporate goal setting. Shasta Ventures led the round, with participation from Thrive Capital, Khosla Ventures and Y Combinator, the latter being the organization his brother led as president until very recently.
Lattice, used by high-growth companies like Reddit, Slack, Coinbase and Glossier, helps human resources professionals develop insights about their teams. Founded in 2015, Altman and Eric Koslow, like most entrepreneurs, developed the idea for Lattice out of their own pain points.
“We realized that with quarterly goal settings, OKRs, we would write them up and get the leadership together and then they would sit on a shelf and nothing would happen,” Altman told TechCrunch.
Lattice, a SaaS business, is a flexible platform that caters to startups and larger businesses’ specific cultures, management practices and varying approaches to employee engagement. The product, inspired by platforms like Gmail and Slack, is designed with consumers in mind. Lattice, the team hopes, has a look and feel that makes incumbent HR platforms feel antiquated.
The product makes it simple for employees and their managers to complete engagement surveys, share feedback, arrange one-on-one meetings and complete comprehensive performance reviews with a larger goal of reworking the company goal-setting process entirely. No more once-yearly check-ins; Lattice enables businesses to check-in with their employees on a weekly basis.
Lattice currently has 1,200 customers, 60 employees and was cash flow break-even for the first time in Q1 2019. With the latest financing, the San Francisco-based startup plans to invest in product development.
“Life is short,” Altman said. “You want to have work that you enjoy and an office that feels good to be at.”
Lattice has previously raised capital from investors including SV Angel, Marc Benioff, Slack Fund and Fuel Capital, Sam Altman, Elad Gil, Alexis Ohanian, Kevin Mahaffey, Daniel Gross and Jake Gibson. Lattice completed the Y Combinator startup accelerator in 2016.
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Tonal raises $45 million to bring strength training to more living rooms
Tonal is today announcing its Series C financing that it hopes will allow the company to bring its at-home gym to even more homes. The funding round shows investors’ excitement around the new generation of personal exercise equipment that combines on-demand training with smart features. Tonal, like Peloton, offers features previously unavailable outside of gyms, and with this injection of capital, the company expects to build new personal features and invest in marketing and retail experiences.
L Catterton’s Growth Fund led the $45 million Series C round, which included investments from Evolution Media, Shasta Ventures, Mayfield, Sapphire Sport and others. This financing round brings the total amount raised to $90 million.
Tonal is based out of San Francisco and was founded by Aly Orady in 2015. The company launched its strength-training product in 2018. The wall-mounted Tonal uses electromagnetism to simulate and control weight, allowing the slender device to replicate (and replace) a lot of weight-lifting machines.
The Tonal machine costs $2,995, and for $49 a month, Tonal offers members access to personal training sessions, recommended programs and workouts. Since launching, CEO Orady tells TechCrunch there have been virtually no returns. He says their customer care teams proactively work with members to ensure a good experience.
Orady is excited to have L Catterton participating in this financing round, saying their deep network and unparalleled experience building premium fitness brands globally is an incredibly exciting new resource for the company. The Connecticut-based investment firm helped fund Peloton, ThirdLove, ClassPass and The Honest Company.
“As the fitness landscape continues to evolve, we have seen a clear shift toward personalized, content-driven, at-home workout experiences,” said Scott Dahnke, Global co-CEO of L Catterton in a released statement. “Tonal is the first connected fitness brand focused on strength training and represents an opportunity to invest behind an innovative concept with tremendous growth potential. We look forward to leveraging our deep knowledge of consumer behavior and significant experience in the connected fitness space to bring Tonal’s dynamic technology and content platform to more homes across the country.”
Tonal shares a market with Peloton, and Orady says a significant amount of Tonal owners also own Peloton equipment. Yet, feature-by-feature, Peloton and Tonal are different. While they’re both in-home devices that offer on-demand instructors, Peloton targets cardiovascular exercises while Tonal is a strength-training machine. Orady states his customers find the two companies offer complementary experiences.
“The common thread with our members is that they understand the value of investing in their fitness and overall health,” said Aly Orady, “All of our members are looking to take their fitness to the next level with strength training. Tonal offers the ability to strength train at home by providing a comprehensive, challenging full body workout without having to sacrifice quality for convenience.”
This is an enormous market he says the company can rely on for years to come. The majority of Tonal’s customers are between 30 and 55 years old and live in, or adjacent to, the top 10 major metro U.S. markets. There’s an even split, he says, between male and female members.
Tonal is similar to Mirror, another at-home, wall-mounted exercise device that costs $1,495. While Tonal focuses on strength training through resistance, Mirror offers yoga, boxing, Pilates and other exercises and activities with on-demand instruction and real-time stats. Mirror also launched in 2018 and the company has raised $40 million.
Going forward, Tonal expects to expand its software to provide new personalization features to its members. The hope is to build experiences that motivate users while serving up real-time feedback. This includes building new workout categories and additional fitness experiences, even when users travel and don’t have access to their Tonal machine.
The company sees it expanding its retail and marketing presence. Right now, just eight months after the product’s debut, customers have very limited access to try the Tonal machine. It’s only on display at Tonal’s flagship San Francisco store and is coming to a pop-up store in Newport Beach, Calif.
Orady tells TechCrunch the company needs new talent to help the company achieve its mission. Tonal is hiring and looking to hire in hardware, software, design, video production and marketing.
At-home exercise equipment is a massive market, and Tonal offers a unique set of features and advantages that should allow it to stand apart from competitors. This isn’t just another treadmill. Tonal is a strength-training super machine the size of a thick HDTV. Challenges abound, but the company seemingly has a solid plan to utilize its latest round of financing that should allow it to reach more customers and show them why the Tonal machine is worth the cost.
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