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What to make of Stripe’s possible $100B valuation

This is The TechCrunch Exchange, a newsletter that goes out on Saturdays, based on the column of the same name. You can sign up for the email here.

Welcome to a special Thanksgiving edition of The Exchange. Today we will be brief. But not silent, as there is much to talk about.

Up top, The Exchange noodled on the Slack-Salesforce deal here, so please catch up if you missed that while eating pie for breakfast yesterday. And, sadly, I have no idea why Palantir is seeing its value skyrocket. Normally we’d discuss it, asking ourselves what its gains could mean for the lower tiers of private SaaS companies. But as its public market movement appears to be an artificial bump in value, we’ll just wait.

Here’s what I want to talk about this fine Saturday: Bloomberg reporting that Stripe is in the market for more money, at a price that could value the company at “more than $70 billion or significantly higher, at as much as $100 billion.”

Hot damn. Stripe would become the first or second most valuable startup in the world at those prices, depending on how you count. Startup is a weird word to use for a company worth that much, but as Stripe is still clinging to the private markets like some sort of liferaft, keeps raising external funds, and is presumably more focused on growth than profitability, it retains the hallmark qualities of a tech startup, so, sure, we can call it one.

Which is odd, because Stripe is a huge concern that could be worth twelve-figures, provided that gets that $100 billion price tag. It’s hard to come up with a good reason for why it’s still private, other than the fact that it can get away with it.

Anyhoo, are those reported, possible prices bonkers? Maybe. But there is some logic to them. Recall that Square and PayPal earnings pointed to strong payments volume in recent quarters, which bodes well for Stripe’s own recent growth. Also note that 14 months ago or so, Stripe was already processing “hundreds of billions of dollars of transactions a year.”

You can do fun math at this juncture. Let’s say Stripe’s processing volume was $200 billion last September, and $400 billion today, thinking of the number as an annualized metric. Stripe charges 2.9% plus $0.30 for a transaction, so let’s call it 3% for the sake of simplicity and being conservative. That math shakes out to a run rate of $12 billion.

Now, the company’s actual numbers could be closer to $100 billion, $150 billion and $4.5 billion, right? And Stripe won’t have the same gross margins as Slack .

But you can start to see why Stripe’s new rumored prices aren’t 100% wild. You can make the multiples work if you are a believer in the company’s growth story. And helping the argument are its public comps. Square’s stock has more than tripled this year. PayPal’s value has more than doubled. Adyen’s shares have almost doubled. That’s the sort of public market pull that can really help a super-late-stage startup looking to raise new capital and secure an aggressive price.

To wrap, Stripe’s possible new valuation could make some sense. The fact that it is still a private company does not.

Market Notes

Various and Sundry

And speaking of edtech, Equity’s Natasha Mascarenhas and our intrepid producer Chris Gates put together a special ep on the education technology market. You can listen to it here. It’s good.

Hugs and let’s both go do some cardio,

Alex

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Slack’s stock climbs on possible Salesforce acquisition

News that Salesforce is interested in buying Slack, the popular workplace chat company, sent shares of the smaller firm sharply higher today.

Slack shares are up just under 25% at the moment, according to Yahoo Finance data. Slack is worth $36.95 per share as of the time of writing, valuing it at around $20.8 billion. The well-known former unicorn has been worth as little as $15.10 per share inside the last year and worth as much as $40.07.

Inversely, shares of Salesforce are trading lower on the news, falling around 3.5% as of the time of writing. Investors in the San Francisco-based SaaS pioneer were either unimpressed at the combination idea, or perhaps worried about the price that would be required to bring the 2019 IPO into their fold.

Why Salesforce, a massive software company with a strong position in the CRM market, and aspirations of becoming an even larger platform player, would want to buy Slack is not immediately clear though there are possible benefits. This includes the possibility of cross-selling the two companies products’ into each others customer bases, possibly unlocking growth for both parties. Slack has wide marketshare inside of fast-growing startups, for example, while Salesforce’s products roost inside a host of megacorps.

TechCrunch reached out to Salesforce, Slack and Slack’s CEO for comment on the deal’s possibility. We’ll update this post with whatever we get.

While Salesforce bought Quip for $750 million in 2016, which gave it a kind of document sharing and collaboration, Salesforce Chatter has been the only social tool in the company’s arsenal. Buying Slack would give the CRM giant solid enterprise chat footing and likely a lot of synergy among customers and tooling.

But Slack has always been more than a mere chat client. It enables companies to embed workflows, and this would fit well in the Salesforce family of products, which spans sales, service, marketing and more. It would allow companies to work both inside and outside the Salesforce ecosystem, building smooth and integrated workflows. While it can theoretically do that now, if the two were combined, you can be sure the integrations would be much tighter.

What’s more, Holger Mueller, an analyst at Constellation Research says it would give Salesforce a sticky revenue source, something they are constantly searching for to keep their revenue engine rumbling along. “Slack could be a good candidate to strengthen its platform, but more importantly account for more usage and ‘stickiness’ of Salesforce products — as collaboration not only matters for CRM, but also for the vendor’s growing work.com platform,” Mueller said.  He added that it would be a way to stick it to former-friend-turned-foe Microsoft.

That’s because Slack has come under withering fire from Microsoft in recent quarters, as the Redmond-based software giant poured resources into its competing Teams service. Teams challenges Slack’s chat tooling and Zoom’s video features and has seen huge customer growth in recent quarters.

Finding Slack a corporate home amongst the larger tech players could ensure that Microsoft doesn’t grind it under the bulk of its enterprise software sales leviathan. And Salesforce, a sometimes Microsoft ally, would not mind adding the faster-growing Slack to its own expanding software income.

The question at this juncture comes down to price. Slack investors won’t want to sell for less than a good premium on the pre-pop per-share price, which now feels rather dated.

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Donut launches Watercooler, an easy way to socialize online with co-workers

If you miss hanging out with your co-workers but don’t want to spend a single second more on Zoom, the latest product from Donut might be the answer.

The startup is launching its new Watercooler product today while also announcing that it has raised $12 million in total funding, led by Accel and with participation from Bloomberg Beta, FirstMark, Slack Fund and various angel investors.

Co-founder and CEO Dan Manian told me that this is actually money that the startup raised before the pandemic, across multiple rounds. It just didn’t announce the fundraising until now.

The startup’s vision, Manian said, is “to create human connection between people at work.” Its first product, Intros, connects via Slack teammates who didn’t already know each other, often with the goal of setting up quick coffee meetings (originally in-person and now virtual).

Donut says it has facilitated 4 million connections across 12,000 companies (including The New York Times, Toyota and InVision), with 1 million of those connections made since the beginning of the pandemic.

However, Manian said customers have been asking Donut to facilitate more frequent interactions, especially since most people aren’t going to have these coffee meetings every day. At the same time, people face the dueling issues of isolation and Zoom fatigue, where “the antidote to one thing makes the other pain worse.” And he suggested that one of the hardest things to recreate while so many of us are working remotely are “all the little microinteractions that you have while you’re working.”

That’s where Watercooler comes in — as the name suggests, it’s designed to replicate the feeling of hanging out at the office watercooler, having brief, low-key conversations. Like Intros, it integrates with Slack, creating a new channel where Watercooler will post fun, conversation-starting questions like “‘What’s your favorite form of potato?” or “What’s one thing you’ve learned in your career that you wish you knew sooner?”

Talking about these topics shouldn’t take much time, but Manian argued that brief conversations are important: “Those things add up to friendship over time, they’re what actually transform you from co-worker to friend.” And those friendships are important for employers too, because they help with team cohesion and retention.

I fully endorse the idea of a Slack watercooler — in fact, the TechCrunch editorial team has a very active “watercooler” channel and I’m always happy to waste time there. My big question was: Why do companies need to purchase a product for this?

Donut Watercooler

Donut Watercooler. Image Credits: Donut

Manian said that there were “a bunch of our early adopters” who had tried doing this manually, but it was always in the “past tense”: “It got too hard to come up with the questions, or it took real work coming up with them, whoever was doing it already had a it full time job.”

With Watercooler, on the other hand, the company can choose from pre-selected topics and questions, set the frequency with which those questions are posted and then everything happens automatically.

Manian also noted that different organizations will focus on different types of questions. There are no divisive political questions included, but while some teams will stick to easy questions about things like potatoes and breakfast foods, others will get into more substantive topics like the ways that people prefer to receive feedback.

And yes, Manian thinks companies will still need these tools after the pandemic is over.

“Work has fundamentally changed,” he said. “I don’t think we’ll put remote work back in the bottle. I think it’s here to stay.”

At the same time, he described the past few months as “training wheels” for a hybrid model, where some team members go back to the office while others continue working remotely. In his view, teams will face an even bigger challenge then: To keep their remote members feeling like they’re connected and in-the-loop.

 

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Acapela, from the founder of Dubsmash, hopes ‘asynchronous meetings’ can end Zoom fatigue

Acapela, a new startup co-founded by Dubsmash founder Roland Grenke, is breaking cover today in a bid to re-imagine online meetings for remote teams.

Hoping to put an end to video meeting fatigue, the product is described as an “asynchronous meeting platform,” which Grenke and Acapela’s other co-founder, ex-Googler Heiki Riesenkampf (who has a deep learning computer science background), believe could be the key to unlock better and more efficient collaboration. In some ways the product can be thought of as the antithesis to Zoom and Slack’s real-time and attention-hogging downsides.

To launch, the Berlin -based and “remote friendly” company has raised €2.5 million in funding. The round is led by Visionaries Club with participation from various angel investors, including Christian Reber (founder of Pitch and Wunderlist) and Taavet Hinrikus (founder of TransferWise). I also understand Entrepreneur First is a backer and has assigned EF venture partner Benedict Evans to work on the problem. If you’ve seen the ex-Andreessen Horowitz analyst writing about a post-Zoom world lately, now you know why.

Specifically, Acapela says it will use the injection of cash to expand the core team, focusing on product, design and engineering as it continues to build out its offering.

“Our mission is to make remote teams work together more effectively by having fewer but better meetings,” Grenke tells me. “With Acapela, we aim to define a new category of team collaboration that provides more structure and personality than written messages (Slack or email) and more flexibility than video conferencing (Zoom or Google Meet)”.

Grenke believes some form of asynchronous meetings is the answer, where participants don’t have to interact in real-time but the meeting still has an agenda, goals, a deadline and — if successfully run — actionable outcomes.

“Instead of sitting through hours of video calls on a daily basis, users can connect their calendars and select meetings they would like to discuss asynchronously,” he says. “So, as an alternative to everyone being in the same call at the same time, team members contribute to conversations more flexibly over time. Like communication apps in the consumer space, Acapela allows rich media formats to be used to express your opinion with voice or video messages while integrating deeply with existing productivity tools (like GSuite, Atlassian, Asana, Trello, Notion, etc.)”.

In addition, Acapela will utilise what Grenke says is the latest machine learning techniques to help automate repetitive meeting tasks as well as to summarise the contents of a meeting and any decisions taken. If made to work, that in itself could be significant.

“Initially, we are targeting high-growth tech companies which have a high willingness to try out new tools while having an increasing need for better processes as their teams grow,” adds the Acapela founder. “In addition to that, they tend to have a technical global workforce across multiple time zones which makes synchronous communication much more costly. In the long run we see a great potential tapping into the space of SMEs and larger enterprises, since COVID has been a significant driver of the decentralization of work also in the more traditional industrial sectors. Those companies make up more than 90% of our European market and many of them have not switched to new communication tools yet”.

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Slack introduces new features to ease messaging between business partners

Slack is holding its Frontiers conference this week — virtually like everyone else in 2020 — and it’s introducing some new features to make it easier to message between partners. At the same time, it’s talking about some experimental features that could appear in the platform at some point (or not).

Let’s start with some features to help communicate with partners outside of your company in a secure way. This is always a tough nut to crack whether it’s collaboration or file sharing or any of the things that trusted partners do when they are working closely together.

To help solve that, the company is creating the notion of trusted partners, and this has a few components. The first is Slack Connect DMs (direct messages), which allows users inside an organization to collaborate with anyone outside their company simply by sending an invite.

“You can now direct message anyone in the Slack ecosystem. That means that anyone that has a Slack license can connect to one another,” Ilan Frank, VP of product at Slack told TechCrunch. While the company is introducing the new capability this week, it won’t be widely available until next year as the company wants to make sure this is used for business purposes only in a secure and non-spammy way.

“We’re going to be focused on, before we make this widely available, a lot of different information privacy and security [components] to make sure that we account for things like spam and phishing attacks and all that. This should not be a LinkedIn or Facebook Messenger where anyone can connect with you. This is [going to focus on] business for business work,” Frank explained.

Slack is introducing a couple of concepts to help ensure that happens. For starters, it’s adding Verified Organizations, which works a bit like verified users on Twitter, to help ensure you are dealing with someone from an organization you trust and work with before you start exchanging information on Slack.

“So if someone connects to you through direct message or through a channel, before you even make that connection, [you can ensure] if they are [from] a verified Slack organization versus someone who has just signed up on the internet, and you have not heard them, don’t have a relationship with them and don’t know who they are,” Frank said.

The last piece is called Managed Connections, which lets Slack admins control which organizations and individuals can connect with people inside your organization on Slack in a streamlined manner, which helps ensure that the other two new features are used in a responsible way.

“Organizations have told us that they want to go even deeper into the granularity of control, and they want to have different policies by external organizations that they’re connected to,” he said. Managed Connections lets admins set policies around different types of relationships with outside organizations.

All of these new tools are being introduced this week, but will be released later this year or early next year.

Among the other things the company working on in is enabling customers to embed video or audio in a Slack channel, extending it beyond a pure text messaging tool. The company was careful to point out that these features are just experiments for now and may or may not end up in the product in the future.

Note: Since we published, Slack contacted us to say that it has since decided to release the audio and video tools before the end of this year. 

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5 steps for building a thriving developer community

Bear Douglas
Contributor

Bear Douglas leads Developer Relations at Slack, where she and her team help developers build more pleasant and productive ways to work.

Elizabeth Kinsey
Contributor

Elizabeth Kinsey is a Senior Marketing Manager, Community at Slack and leads community programs for Slack developers, builders and makers who want to share their experiences, connect and learn from each other.

Every API or platform that has been successful long term owes a large part of their success to a thriving developer community — including Slack. As the lead of our Developer Relations team and a senior marketing manager, we oversee the Slack Platform Community. The community has grown quickly, so we’re both often asked how to successfully build a similar group.

At Slack, our app ecosystem has expanded alongside the product. The Slack App Directory contains 2,200 apps and over 600,000 custom apps (apps people build just for their teams) are used every week. No technology company creates its ecosystem alone. The growth in ours is part of a wider trend, as the total number of APIs has increased by 30% over the last few years. We’re also currently experiencing a surge in app submissions as more workforces operate entirely at home, and companies need tools to support remote operations. In early April, we saw a 100% increase in app submissions week-over-week.

As more developers try a platform, community support is critical to everyone — the platform company, new developers and those who have been developing for years. If your platform doesn’t have a developer community yet, creating one takes a few purposeful steps. Here are some of the best practices we’ve learned over nearly three decades’ worth of combined work in developer communities.

Start (and continue) listening

You can’t build a community without participating in one first. If you already have people developing on your platform, and they’re open to receiving contact from you, reach out! Get to know the people behind the integrations you’re seeing built.

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Slack and Atlassian strengthen their partnership with deeper integrations

A lot of “partnerships” between tech companies don’t get very far beyond a press release and maybe some half-hearted co-selling attempts. When Atlassian sold its chat services to Slack in 2018, the two companies said they would form a new partnership and with Atlassian leaving the chat space, a lot of people were skeptical about what that would really mean.

Since then, things got pretty quiet around the collaboration between the two companies, but today the companies announced some of the deep integration work they’ve done, especially within Slack .

Image Credits: Atlassian

Over the course of the last two years, Slack and Atlassian shipped 11 product integrations, which now see about a million active users every month, with Jira being the most often used integration, followed by Halp, which Atlassian acquired earlier this year.

Every month, Atlassian currently sends 42 million Jira notifications to Slack — and that number continues to grow.

At the core of these integrations is the ability to get rich unfurls of deep links to Atlassian products in Slack, no matter whether that’s in DMs, public or private channels. Coming soon, those unfurls will become a default feature within Slack, even if the user who is seeing the link isn’t an Atlassian user yet.

“Today, if you do drop a Jira link in your channel and you’re not a user — or even if you are and you’re not authed in — you just see a link,” Brad Armstrong said.

“You don’t get the benefit of the unfurl. And so one of the things we’re doing is making that unfurl available to everybody, regardless of whether you are logged in and regardless of whether you’re even an Atlassian customer.”

Image Credits: Atlassian

The two companies also worked closely together on making moving between the products easier. If you are a Jira user, for example, you’ll soon be able to click on a link in Slack and if you’re not currently logged into your Atlassian account, you’ll be automatically logged in. The two companies are taking this even further by automatically creating Jira accounts for users when they come from Slack.

“Even if you’re not a user, when you click on the link, we will then map you from Slack and create a Jira user for you that provisions you and auths you in so you’re immediately becoming a Jira user by virtue of wanting to collaborate on that piece of content in Slack,” Armstrong explained.

That, the two companies argue, turns Slack into something akin to a passport that gives you access to the Atlassian product suite — and that should also make onboarding a lot easier for new users.

Image Credits: Atlassian

“As you could probably imagine, as you know, onboarding is a pain, it’s hard because you have different roles, different size teams, so on and so forth,” said Bryant Lee, Atlassian’s head of product partnerships. “And that’s where you see some of the authentication stuff, the unfurling discovery piece really being an understanding of what those practices are. But the way that we look at it is not just about the product but people, products and practices. So it’s really about understanding who it is that we’re trying to optimize for.”

In addition to these new integrations that are launching soon, the two companies are also expanding their co-marketing efforts, starting with a new 50%-off offer for Atlassian users who want to also use Slack.

“We’re building on the strong foundation of our partnership’s success from the past two years, which has yielded tremendous shared customer momentum and impactful product integrations,” said Slack co-founder and CEO Stewart Butterfield . “Thanks to our strategic alliance, Slack and Atlassian have become the technology stack of choice for developer teams.”

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Daily Crunch: Slack files antitrust complaint against Microsoft

An antitrust battle is brewing between Microsoft and Slack, Apple continues to defend its App Store policies and Dexterity raises funding for warehouse robots. Here’s your Daily Crunch for July 22, 2020.

PS: I’m going to be on vacation until Wednesday of next week. Until then, I leave you in Darrell Etherington’s capable hands!

The big story: Slack files antitrust complaint against Microsoft

The complaint was filed in the European Union and alleges that Microsoft is unfairly bundling its Teams product with the broader Office suite.

“Microsoft has illegally tied its Teams product into its market-dominant Office productivity suite, force installing it for millions, blocking its removal, and hiding the true cost to enterprise customers,” Slack said in a statement.

When Microsoft first announced Teams in 2016, Slack took out an ad mocking the company and saying it welcomed competition. In April, Microsoft said Teams has grown to 75 million daily active users, compared to the 12.5 million that Slack reported in March.

The tech giants

Apple digs in heels over its App Store commission structure with release of new study — Apple has been commissioning research that defends its 30% commission on App Store purchases.

Spotify and Universal sign new licensing deal, will partner on development of marketing tools — In addition to re-securing Universal’s catalog for the music streaming service, the deal signs up Universal as an early adopter of Spotify’s future products for labels and artists.

Twitter cracks down on QAnon conspiracy theory, banning 7,000 accounts — Moving forward, Twitter said it will be removing QAnon-related topics from its trending pages and algorithmic recommendations and blocking any associated URLs.

Startups, funding and venture capital

Dexterity exits stealth with $56.2 million raised for its collaborative warehouse robots — The startup’s system combines hardware and software for warehouse tasks like bin picking and box packing.

Misfits Market raises $85 million Series B to send you ‘ugly’ fruits and veggies — Users sign up for a weekly produce box and can also add chocolate, snacks, chips, coffee, herbs, grains, lentils, sauces and spices.

YC-backed Glimpse helps Airbnb hosts make money through product placement — Airbnbs could the perfect place to convince someone to try a new mattress or a new kind of coffee.

Advice and analysis from Extra Crunch

What you need to know before selling your company’s stock — Part 3 of financial adviser Peyton Carr’s guide for startup founders.

Messenger tools can help you recover millions in lost revenue — Rank Secure CEO Baruch Labunski says messenger tools have helped a single client recover more than $5 million in lost revenue.

(Reminder: Extra Crunch is our subscription membership program, which aims to democratize information about startups. You can sign up here.)

Everything else

GEDmatch confirms data breach after users’ DNA profile data made available to police — The company said that during the breach, “Users who did not opt-in for law enforcement matching were also available for law enforcement matching, and conversely, all law enforcement profiles were made visible to Gedmatch users.”

Go SPAC yourself — I’d never heard of SPACs before today, but the latest episode of Equity explains that they could offer a way for companies to go public through a different pricing mechanism.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

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Creating a robust churn-reversal system

Julian Shapiro
Contributor

Julian Shapiro is the founder of BellCurve.com, a growth marketing team that trains startups in advanced growth, helps hire senior growth marketers and finds vetted growth agencies. He also writes at Julian.com.

We’ve aggregated many of the world’s best growth marketers into one community. Twice a month, we ask them to share their most effective growth tactics, and we compile them into this Growth Report.

This is how you stay up-to-date on growth marketing tactics — with advice that’s hard to find elsewhere.

Our community consists of startup founders and heads of growth. You can participate by joining Demand Curve’s marketing training program or its Slack group.

Without further ado, on to our community’s advice.


Creating a robust churn-reversal system

Insights from Matthew Morley of Savvy

Generally, it’s far more efficient to keep a current client than it is to close a new one. You’ll want a system to help you identify which users are at risk of churning. This way, you can proactively reach out to them before they leave.

Start by identifying your high-value customers at risk of churning:

Who is:

  • Spending within the top 10% of time using your app?
  • Has a substantial number of seats of your product?
  • Or, say, has a company size of at least 50 people — reflecting their upselling potential?

But also:

  • Is using the product 30% less in a given month
  • Has submitted at least one non-trivial support ticket in the last month
  • And has their subscription renew in less than 90 days

And so on.

You can stitch this information together from multiple sources like Stripe, Mixpanel, Crunchbase and Intercom. Then, set up an alert to notify your team once someone falls into these buckets.

Then reach out with something personal to win back their enthusiasm. It can be high leverage to get them on the phone to uncover what’s keeping them around.

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An unsurprising wave of video-focused startups is trying to make video calls better

As Zoom and Microsoft and Google hammer it out for video-chat hegemony, startups are developing apps and services that either add on or compete with the major players.

There hasn’t been enough activity — yet — to call it a boom, but there’s enough going on to warrant our attention. Call it a boomlet, if you will, of startups looking to ride the wave of demand that video-conferencing has seen during the COVID-19 pandemic.


The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or receive it for free in your inbox. Sign up for The Exchange newsletter, which drops Saturdays starting July 25.


The big players are not sitting still. Zoom has spent lots of 2020 on platform security after a surge in popularity exposed some frayed ends. Google has been working to make Meet, its own video-chat service, better and easier to find. And Microsoft has been hammering Teams’s abilities into stronger form as it uses the same product to fend off both Slack and Zoom, which is a tall order.

Other giants are getting into the mix. Reliance Jio, the Indian telecom subsidiary of megacorp Reliance, recently launched JioMeet, which has turned heads for looking rather similar to Zoom. It also quickly raced to millions of downloads. (That Google just put billions into JioMeet’s parent is an odd twist in the video-chatting wars; Google has effectively helped fund a competitor in the country, it appears.)

TechCrunch’s parent company, Verizon, recently bought BlueJeans, giving the American telecom company its own video chatting service. (It’s also eyeing the Indian market.)

But that’s only part of the action. More recently we’ve seen interesting rounds for video-chat software startups Macro and Mmhmm. And we’ve seen money go into companies like Daily.co, which want to let any company bake video-chatting capabilities into their service. And Y Combinator-backed Sidekick has been in the press lately, after building a hardware solution in mind for today’s remote workers who need video comms.

An upstart boomlet, then, amid a war of the majors. But should we have expected anything less from the huge wave of demand that COVID-19 kicked off? Zoom was growing quickly before the pandemic. Now the public company and a host of rivals, big and small, all want a larger slice of an expanding pie.

Video-conferencing startups

The two most interesting recent venture rounds for video-conferencing startups are those belonging to Mmhmm and Macro.

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