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The Org nabs $20M led by Tiger Global to expand its platform based on public organizational charts
LinkedIn normalized the idea of making people’s resume’s visible to anyone who wanted to look at them, and today a startup that’s hoping to do the same for companies and how they are organized and run is announcing some funding. The Org, which wants to build a global, publicly viewable database of company organizational charts — and then utilize that database as a platform to power a host of other services — has raised $20 million, money that it will be using to hire more people, add on more org charts and launch new features, with a recruitment toolkit being first on the list.
The Series B is led by Tiger Global, with previous backers Sequoia, Founders Fund and Balderton Capital also participating alongside new investors Thursday Ventures, Lars Fjeldsoe-Nielsen (a former Balderton partner), Neeraj Arora (formative early WhatsApp exec), investor Gavin Baker, and more. From what we understand, the investment values The Org at $100 million.
Founders Fund led the company’s last round, a Series A in February 2020, and the whole world of work has really changed a lot in the interim because of COVID-19: companies have become more distributed (a result of offices shutting down); the make-up of businesses has changed because of new demands; and many of us have had our sense of connection to our jobs tested in ways that we never thought it would.
All of that has had a massive impact on The Org, and has played into its theory of why org charts are useful, and most useful as a tool for transparency.
“In many ways the pandemic has forced us to reevaluate the norms of how work happens. One of the misconceptions was the idea that you are only working when you are at the office, 9-5. But the future of work is a hybrid set up but you get a lot of issues that arise out of that, communication being one of them. Now it’s much more important to create alignment, a sense of connection, and really feeling a sense of belonging in your company,” Christian Wylonis, the CEO who co-founded the company with Andreas Jarbøl, said in an interview (the two are pictured below). “We think that a lot of these issues are rooted around transparency and that is what The Org is about. Who is doing what, and why?”
Image Credits: The Org
He said that when the coronavirus suddenly ramped up into a global issue — and it really was sudden; our conversation in February 2020 had nothing whatsoever to do with it, yet it was only weeks later that everything shut down — it wasn’t obvious that The Org would have a place in the so-called “new normal.”
“We were as nervous as anyone else, but the idea of what work would look like and how we enable people around that has gotten a lot higher on the agenda,” he said. “The appetite for new tools has improved dramatically, and we can see that in our traffic.”
The Org has indeed seen some very impressive growth. The company now hosts some 130,000 public org charts, sees 30,000 daily visitors and has more than 120,000 registered users. And more casual usage has boomed, too. Wylonis notes that The Org now has close to 1 million visitors each month versus just 100,000 in February 2020, when it only had 16,000 org charts on its platform.
Monetization is coming slowly for the startup. Building, editing and officially “claiming” a profile on the platform are all still free, but in the meantime The Org is working on its platform play and using the database that it is building to power other services. Job hunting is the first area that it will tackle.
Posting jobs will be free, and it’s integrating with Greenhouse to feed information into its system, but recruiters and HR pros are given an option to manage the sourcing and screening process through The Org, a kind of executive recruitment tool, which will come at a charge. Down the line there are plans for more communications and HR tools, Wylonis said. Some of this will be built by way of integrations and APIs with other services, and some tools — such as communications features — will be built in-house, from the ground up.
When I covered the company’s last round, I’d noted that there were some obvious hurdles for The Org, as well as potentially others like Charthop or Visier building business models on providing more transparency and information around hiring and how companies are run.
Sometimes the companies in question don’t actually want to have more transparency. And any database that is based around self-reporting runs the risk of being only as good as the data that is put into it — meaning it may be incomplete, or simply wrong, or just presented to the contributors’ best advantage, not that of the company itself. (This is one of the issues with LinkedIn, too: Even with people’s resumes being public, it’s still very easy to lie about what you actually do, or have done.)
So far, the theory is that some of this will be resolved by way of who The Org is targeting and how it is growing. Today the company’s “sweet spot” is early-stage startups with about 50-200 employees, and generally org charts are created for these businesses in part by The Org itself, and then largely by way of wiki-style user-edited content (anyone with a company email can get involved).
The plan is both to continue working with those smaller startups as they scale up, but also target bigger and bigger businesses. These, however, can be trickier to snag — not least because they will stretch into the realm of public companies, but also because their charts will be more complicated to map and manage consistently. For that reason, The Org is also adding in more features around how companies can “claim” their profiles, including managing permissions for who can edit profiles.
This might mean more managed public profiles, but the idea is that it will be a start, and once more companies post more information, we will see more transparency overall, not unlike how LinkedIn evolved, Wylonis said.
The LinkedIn analogy is interesting for another reason. It seems a no-brainer that LinkedIn, which is at its heart a massive database of information about the world of professional work, and the people and companies involved in it, would have wanted to build its own version of org charts at some point. And yet it hasn’t.
Some of this might be down to how LinkedIn has fundamentally built and organised its own database and knowledge graph, but Wylonis believes it might also be a conceptual difference.
“We think that this might be the fundamental difference between us and them,” Wylonis said of LinkedIn. “They are a database of resumes. ‘I can say whatever I want.’ But for us, the atomic unit is the organization itself. That is an important distinction because it’s a one to many relationship. It can’t be only me editing my profile. And allows us to build structures.”
He added that this was one of the reasons that Keith Rabois — who was an early exec at LinkedIn — became an early investor in The Org: “LinkedIn has been looking at this forever, but they haven’t been able to build it, and so that is how we caught his attention.”
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Tiger Global-led $100M investment makes Apna India’s fastest unicorn
A 22-month-old startup that is helping millions of blue- and gray-collar workers in India learn new skills and find jobs has become the youngest firm to join the coveted unicorn status in the world’s second-largest internet market.
Apna announced on Thursday that it has raised $100 million in a round led by Tiger Global. The new round — a Series C — valued Apna at $1.1 billion. TechCrunch reported last month that Tiger Global, an existing investor in Apna, was in talks to lead a $100 million financing round in the startup at the unicorn valuation.
Owl Ventures, Insight Partners, Sequoia Capital India, Maverick Ventures and GSV Ventures also participated in the new round, which is the third investment secured by Apna this year. Apna was valued at $570 million in its Series B round in June this year.
The investors’ excitement comes as Apna has demonstrated an impressive growth in recent months. The startup has amassed over 16 million users on its 15-month-old eponymous Android app, up from 10 million in June this year.
Indian cities are home to hundreds of millions of low-skilled workers who hail from villages in search of work. Many of them have lost their jobs amid the coronavirus pandemic that has slowed several economic activities in the South Asian market.
Apna has built a platform that provides a community to these workers. In the community, they engage with each other, exchange notes to perform better at interviews and share tips to negotiate better compensation.
Image Credits: Apna
On top of this, Apna connects these workers to potential employers. In an interview with TechCrunch, Apna founder and chief executive Nirmit Parikh said more than 150,000 employers — including Zomato, Bharti AXA, Urban Company, BYJU’S, PhonePe, Burger King, Delhivery, Teamlease and G4S Global — are on the platform, and over 5 million jobs are active.
The startup, whose name is inspired from a cheerful 2019 Bollywood song, has facilitated over 18 million job interviews in the past 30 days, he said. Apna is currently operational in 28 Indian cities.
The idea for Apna came, Parikh has said, after he was puzzled to find that even as there are hundreds of millions of blue- and gray-collar workers in India, locating them when you need assistance with a task often proves very difficult.
Prior to starting Apna, Parikh, who previously worked at Apple, met these workers and went undercover as an electrician and floor manager to understand the problems they were facing. The problem, he found, was the disconnect. Workers had no means to find who needed them for jobs, and they were also not connected with one another. The community aspect of Apna, which now has over 70 such groups, is aimed at addressing this challenge.
The Apna app allows these workers to learn new skills to become eligible for more work opportunities. Apna has emerged as one of the fastest growing upskilling platforms — and that would explain why GSV Ventures and Owl Ventures, two high-profile firms known to back edtech startups, are investing in the Bangalore-based firm.
“Apna’s viral adoption is driven by a novel social and interactive approach to connecting employers with job seekers. We expect job seekers in search of meaningful connections and vetted opportunities to drive Apna’s continued explosive growth across India — and the world,” said Griffin Schroeder, partner at Tiger Global, in a statement.
Now the startup, which has started to monetize the platform, is ready to aggressively expand. Parikh said Apna will continue to expand to more cities in India and by early next year, Apna will begin its global expansion. Parikh said the startup is eyeing expansion in the USA, South East Asia and Middle East and Africa.
“We have already created a dent. Now we want to impact the lives of 2.3 billion,” he said. “We will require crazy amounts of resources and a world-class team to deliver. It’s a herculean task, and is going to take a village. But somebody has to solve it.”
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Snyk snags another $530M as valuation rises to $8.4B
Snyk, the Boston-based late-stage startup that is trying to help developers deliver more secure code, announced another mega-round today. This one was for $530 million, with $300 million in new money and $230 million in secondary funding, the latter of which is to help employees and early investors cash in some of their stock options.
The long list of investors includes an interesting mix of public investors, VC firms and strategics. Sands Capital Ventures and Tiger Global led the round, with participation from new investors Baillie Gifford, Koch Industries, Lone Pine Capital, T. Rowe Price and Whale Rock Capital Management. Existing investors also came along for the ride, including Accel, Addition, Alkeon, Atlassian Ventures, BlackRock, Boldstart Ventures, Canaan Partners, Coatue, Franklin Templeton, Geodesic Capital, Salesforce Ventures and Temasek.
This round brings the total raised in funding to $775 million, excluding secondary rounds, according to the company. With secondary rounds, it’s up to $1.3 billion, according to Crunchbase data. The company has been raising funds at a rapid clip (note that the last three rounds include the Snyk money plus secondary rounds):
While the company wouldn’t share specific revenue figures, it did say that ARR has grown 158% YoY; given the confidence of this list of investors and the valuation, it would suggest the company is making decent money.
Snyk CEO Peter McKay says that the additional money gives him flexibility to make some acquisitions if the right opportunity comes along, what companies often refer to as “inorganic” growth. “We do believe that a portion of this money will be for inorganic expansion. We’ve made three acquisitions at this point and all three have been very, very successful for us. So it’s definitely a muscle that we’ve been developing,” McKay told me.
The company started this year with 400 people and McKay says they expect to double that number by the end of this year. He says that when it comes to diversity, the work is never really done, but it’s something he is working hard at.
“We’ve been able to build a lot of good programs around the world to increase that diversity and our culture has always been inclusive by nature because we’re highly distributed.” He added, “I’m not by any means saying we’re even remotely close to where we want to be. So I want to make that clear. There’s a lot we still have to do,” he said.
McKay says that today’s investment gives him added flexibility to decide when to take the company public because whenever that happens it won’t have to be because they need another fundraising event. “This raise has allowed us to set up with strong, highly reputable public investors, and it gives us the financial resources to pick the timing. We are in control of when we do it and we will do it when it’s right,” he said.
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Tiger Global in talks to make Apna India’s fastest unicorn
Apna, a 21-month-old startup that is helping millions of blue- and gray-collar workers in India upskill themselves, find communities and land jobs, is inching closer to becoming the fastest tech firm in the world’s second-largest internet market to become a unicorn.
Tiger Global is in advanced stages of talks to lead a $100 million round in Apna, according to four sources familiar with the matter. The proposed terms value the startup at over $1 billion, the sources said.
The round hasn’t closed yet, so terms of the deal may change, some of the sources cautioned.
If the round materializes, Apna will become the youngest Indian startup to attain the much-coveted unicorn status. The startup, which launched its app in December 2019, was valued at $570 million in its Series B financing round in June this year. It will also be the third financing round Apna would have secured in a span of less than seven months.
Tiger Global, an existing investor in Apna, didn’t respond to a request for comment earlier this month. Apna founder and chief executive Nirmit Parikh, an Apple alum, declined to comment on Tuesday.
Indian cities are home to hundreds of millions of low-skilled workers who hail from villages in search of work. Many of them have lost their jobs amid the coronavirus pandemic that has slowed several economic activities in the world’s second-largest internet market.
Apna, whose name is inspired from a 2019 Bollywood song, is building a scalable networking infrastructure so that these workers can connect to the right employers and secure jobs. On its eponymous Android app, users also upskill themselves, review their interview skills and become eligible for more jobs.
As of June this year, Apna had amassed over 10 million users and was facilitating more than 15 million job interviews each month. All jobs listed on the Apna platform are verified by the startup and free of cost for the candidates.
The startup has also partnered with some of India’s leading public and private organizations and is providing support to the Ministry of Minority Affairs of India, National Skill Development Corporation and UNICEF YuWaah to provide better skilling and job opportunities to candidates.
The investment talks further illustrate Tiger Global’s growing interest in India. The New York-headquartered firm has made several high-profile investments in India this year, including in BharatPe, Gupshup, DealShare, Classplus, Urban Company, CoinSwitch Kuber and Groww.
More than two dozen Indian startups have become a unicorn this year, up from 11 last year, as several high-profile investors, including Tiger Global, SoftBank and Falcon Edge, have increased the pace of their investments in the world’s second most populous nation.
Apna also counts Insight Partners, Lightspeed and Sequoia Capital among its existing investors.
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The SEC and the DOJ just charged this startup founder with fraud, saying he lied to Tiger and others
Today, both the U.S. Department of Justice and the Securities and Exchange Commission charged Manish Lachwani, co-founder of mobile app testing company HeadSpin, with fraud. The SEC says he violated antifraud provisions, and the civil penalties it’s seeking include a permanent injunction, a conduct-based injunction, and to bar him for serving as a corporate executive or board member.
The DOJ, which arrested Lachwani earlier, has accused him of one count of wire fraud and one count of securities fraud, and the associated penalties if he’s found guilty are more harsh, including, for wire fraud, a maximum sentence of 20 years in prison and a fine of $250,000. If he’s found guilty of securities fraud, he faces a maximum sentence of 20 years in prison and a fine of $5,000,000.
Both the the SEC and the DOJ say Lachwani — who led the six-year-old company as CEO until May of last year — defrauded investors out of $80 million by falsely claiming that HeadSpin had “achieved strong and consistent growth in acquiring customers and generating revenue” when he was pitching its Series C round to potential backers.
By the SEC’s telling, his fabrications were designed to help secure the round at a so-called unicorn valuation. That apparent plan worked, too, with Palo Alto-based HeadSpin attracting coverage in Forbes in February of last year after Dell Technologies Capital, Iconiq Capital and Tiger Global provided the company with $60 million in Series C funding at a $1.16 billion valuation. Forbes reported at the time that the valuation was double the valuation investors assigned HeadSpin when it closed its Series B round in October 2018.
The SEC also says that Lachwani was looking to enrich himself, saying he did so “by selling $2.5 million of his HeadSpin shares in a fundraising round during which he made misrepresentations to an existing HeadSpin investor.” (It isn’t clear from its complaint whether the SEC is referring to the Series C or an earlier round.)
The two federal complaints suggest that Lachwani’s alleged scheming to inflate HeadSpin’s valuation dates back to “at least 2018,” and the DOJ says it picked up momentum when the company was fundraising in late 2019.
More specifically, the DOJ complaint alleges that “in materials and presentations to potential investors, Lachwani reported false revenue and overstated key financial metrics of the company … he maintained control over operations, sales, and record-keeping, including invoicing, and he was the final decision-maker on what revenue was booked and included in the company’s financial records.”
In the investigation that led to the DOJ’s charges, the FBI discovered “multiple examples” of Lachwani “instructing employees to include revenue from potential customers that inquired but did not engage HeadSpin, from past customers who no longer did business with HeadSpin, and from existing customers whose business was far less than the reported revenue,” says the department.
How far off were these collective calculations? The complaint says that ultimately, Lachwani “provided investors false information that overstated HeadSpin’s annual recurring revenue … by approximately $51 million to $55 million.”
According to the complaint, Lachwani’s fraud unraveled after the company’s board of directors conducted an internal investigation and revised HeadSpin’s valuation down from $1.1 billion to $300 million. Indeed, in August of last year, The Information reported that the company was planning to lower the value of its Series C stock by nearly 80%.
The outlet reported at the time that Lachwani had already been replaced by another executive. That person, according to LinkedIn, is Rajeev Butani, who joined HeadSpin as its chief sales officer early last year.
Nikesh Arora, a former SoftBank president and the current CEO and chairman of Palo Alto Networks, helped lead the internal review as a then-director on the board of HeadSpin, said The Information.
The SEC says its investigation is continuing. The DOJ similarly notes in its announcement that “a complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.”
Either way, the outlook doesn’t look very promising right now for Lachwani, who, according to Forbes, previously sold a mobile cloud business to Google and wound up co-founding HeadSpin after Yahoo co-founder Jerry Yang introduced him to Brien Colwell, a former Palantir and Quora engineer who was working at the time on a different startup.
Colwell remains with HeadSpin as its CTO. He has not been named in either the SEC or the DOJ’s complaints relating to HeadSpin.
The company itself, which says it has been cooperating with the government’s investigation, was also not charged.
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Shelf.io closes huge $52.5M Series B after posting 4x ARR growth in the last year
Covering public companies can be a bit of a drag. They grow some modest amount each year, and their constituent analysts pester them with questions about gross margin expansion and sales rep efficiency. It can be a little dull. Then there are startups, which grow much more quickly — and are more fun to talk about.
That’s the case with Shelf.io. The company announced an impressive set of metrics this morning, including that from July 2020 to July 2021, it grew its annual recurring revenue (ARR) 4x. Shelf also disclosed that it secured a $52.5 million Series B led by Tiger Global and Insight Partners.
That’s quick growth for a post-Series A startup. Crunchbase reckons that the company raised $8.2 million before its Series B, while PitchBook pegs the number at $6.5 million. Regardless, the company was efficiently expanding from a limited capital base before its latest fundraising event.
What does the company’s software do? Shelf plugs into a company’s information systems, learns from the data and then helps employees respond to queries without forcing them to execute searches or otherwise hunt for information.
The company is starting with customer service as its target vertical. According to Shelf CEO Sedarius Perrotta, Shelf can absorb information from, say, Salesforce, SharePoint, legacy knowledge management platforms and Zendesk. Then, after training models and staff, the company’s software can begin to provide support staff with answers to customer questions as they talk to customers in real time.
The company’s tech can also power responses to customer queries not aimed at a human agent and provide a searchable database of company knowledge to help workers more quickly solve customer issues.
Per Perrotta, Shelf is targeting the sales market next, with others to follow. How might Shelf fit into sales? According to the company, its software may be able to offer staff already written proposals for similar-seeming deals and other related content. The gist is that at companies that have lots of workers doing similar tasks — clicking around in Salesforce, or answering support queries, say — Shelf can learn from the activity and get smarter in helping employees with their tasks. I presume that the software’s learning ability will improve over time, as well.
Shelf, around 100 people today, hopes to double in size by the end of the year, and then double again next year.
That’s where the new capital comes in. Hiring folks in the worlds of machine learning and data science is very expensive. And because the company wants to scale those hires quickly, it will need a large bank balance to lean on.
Quick ARR growth was not the only reason Shelf was able to secure such an outsized Series B, at least when compared to how much capital it had raised before. Per Perrotta, Shelf has 130% net dollar retention and no churn to report, meaning its customers are both sticky and expand organically.
While Shelf is interesting today and has certainly found niches it can sell into in its current form, I am more curious about how far the company can take its machine learning system, called MerlinAI. If its tech can get sufficiently smart, its ability to prompt and help employees could reduce onboarding time and the overall cost of employee training. That would be a huge market.
This is the sort of deal that we expect to see Tiger in — an outsized investment (compared to prior rounds) into a high-growth company that has lots of market room. Whatever price Tiger just paid for the company’s stock, a few years of continued growth should de-risk the investment. By our read, Tiger is really just the market-leading bull on software market growth in the long term. Shelf fits into that thesis neatly.
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Tiger Global backs Nacelle with $50M for its e-commerce infrastructure
Consumer shift to buying online during the global pandemic — and keeping that habit — continues to boost revenue for makers of developer tools that help e-commerce sites provide better shopping experiences.
LA-based Nacelle is one of the e-commerce infrastructure companies continuing to attract investor attention, and at a speedy clip, too. It closed on a $50 million Series B round from Tiger Global. This is just six months after its $18 million Series A round, led by Inovia, and follows a $4.8 million seed round in 2020.
The company is working in “headless” commerce, which means it is disconnecting the front end of a website, a.k.a. the storefront, from the back end, where all of the data lives, to create a better shopping experience, CEO Brian Anderson told TechCrunch. By doing this, the back end of the store, essentially where all the magic happens, can be updated and maintained without changing the front end.
“Online shopping is not new, but how the customer relates to it keeps changing,” he said. “The technology for online shopping is not up to snuff — when you click on something, everything has to reload compared to an app like Instagram.”
More people shopping on their mobile devices creates friction due to downloading an app for each brand. That is “sucking the fun out of shopping online,” because no one wants that many apps on their phone, Anderson added.
Steven Kramer, board member and former EVP of Hybris, said via email that over the past two decades, the e-commerce industry went through several waves of innovation. Now, maturing consumer behaviors and expectations are accelerating the current phase.
“Retailers and brands are struggling with adopting the latest technologies to meet today’s requirements of agility, speed and user experience,” Kramer added. “Nacelle gives organizations a future-proof way to accelerate their innovation, leverage existing investments and do so with material ROI.”
Data already shows that COVID-era trends accelerated e-commerce by roughly five years, and Gartner predicts that 50% of new commerce capabilities will be incorporated as API-centric SaaS services by 2023.
Those kinds of trends are bringing in competitors that are also attracting investor attention — for example, Shopistry, Swell, Fabric, Commerce Layer and Vue Storefront are just a few of the companies that raised funding this year alone.
Anderson notes that the market continues to be hot and one that can’t be ignored, especially as the share of online retail sales grows. He explained that some of his competitors force customers to migrate off of their current tech stack and onto their respective platforms so that their users can get a good customer experience. In contrast, Nacelle enables customers to keep their tech stack and put components together as they see fit.
“That is painful in any vertical, but especially for e-commerce,” he said. “That is your direct line to revenue.”
Meanwhile, Nacelle itself grew 690% in the past year in terms of revenue, and customers are signing multiyear contracts, Anderson said.
Anderson, who is an engineer by trade, wants to sink his teeth into new products as adoption of headless commerce grows. These include providing a dynamic layer of functionality on top of the tech stack for storefronts that are traditionally static, and even introducing some livestream capabilities later this year.
As such, Nacelle will invest the new round into its go-to-market strategy and expand its customer success, partner relations and product development. He said Nacelle is already “the de facto standard” for Shopify Plus merchants going headless.
“We want to put everything in a tailor-made API for e-commerce that lets front-end developers do their thing with ease,” Anderson added. “We also offer starter kits for merchants as a starting point to get up-and-running.”
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India’s BharatPe valued at $2.85 billion in Tiger Global-led $370 million funding
Indian fintech startup BharatPe has raised $370 million in a new round of financing as it looks to aggressively scale its business in the next two years. It’s the nineteenth Indian startup to become a unicorn this year (up from 11 last year) as several high-profile global investors double down in the South Asian market.
The new round — a Series E — was led by Tiger Global and valued the New Delhi-based startup at $2.85 billion (post-money), it said in a statement Tuesday evening. Dragoneer Investor Group and Steadfast Capital also participated in the new round, which brings the startup’s to-date raise to over $580 million against equity.
Tuesday’s news confirms a TechCrunch scoop from June in which we reported that the four-year-old startup was looking to raise about $250 million at a pre-money valuation of $2.5 billion. BharatPe was valued at about $900 million in its Series D round in February this year, and $425 million last year.
BharatPe co-founder Ashneer Grover confirmed that the startup was indeed looking to raise $250 million until inbound requests from investors prompted an oversubscription. The new investment also includes some secondary transactions.
BharatPe, which counts Coatue, Ribbit Capital and Sequoia Capital India among its existing investors, operates an eponymous service to help offline merchants accept digital payments and secure working capital.
Even as India has already emerged as the second-largest internet market, with more than 650 million users, much of the country remains offline.
Among those outside of the reach of the internet are merchants running small businesses, such as roadside tea stalls and neighborhood stores. To make these merchants comfortable with accepting digital payments, BharatPe relies on QR codes and point of sale machines that support government-backed UPI payments infrastructure.
Scores of giants and startups are attempting to serve neighborhood stores in India. Image Credits: Bank of America Research
The startup, which serves more than 7 million merchants in over 130 Indian cities, said it has disbursed close to $300 million to merchant partners. It does not charge merchants for universal QR code access, but is looking to make money by lending.
The startup plans to expand its product offerings as well as work with Centrum Financial Services, with which it was recently granted the license by India’s central bank (Reserve Bank of India) to set up a small finance bank. (Centrum Financial Services has collaborated with BharatPe for the license, and the Indian startup says the two are “equal” partners.)
Tuesday’s development further illustrates the growing interest of Tiger Global in India. The New York-headquartered firm has backed dozens of Indian startups, including social commerce startup DealShare, edtech Classplus, Apna (an app that helps blue-collar workers connect with recruiters) and home services platform Urban Company in recent months.
On Tuesday, Infra.Market, an Indian startup that helps construction and real estate companies procure materials and handle logistics for their projects, said it had raised $125 million in a round led also by Tiger Global.
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Growth is not enough
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
We were a smaller team this week, with Natasha and Alex joined by Grace and Chris to sort through a week that brought together both this quarter’s earnings cycle and the Q3 IPO rush. So, it was just a little busy!
Before we get to topics, however, a note that we are having a lot of fun recording these live on Twitter Spaces. We’ve found a hacky way to capture local audio and also share the chats live. So, hit us up on Twitter so you can hang out with us. It’s fun — and we may even bring you up on stage to play guest host.
OK, now, to the Great List of Subjects:
- Robinhood went public! Yep, at long last, it is done. The company priced at $38 per share, the low end of its range, and had a medium-weak day of trading once it started to float. In short, Robinhood seems to have deftly priced its IPO, leaving zero fat on the table. It’s now public and richer than ever. More here.
- Earnings! We took a moment to chat about earnings reports from Alphabet, Microsoft and Shopify. Why? Because we care lots about the cloud and platform companies. So, we took a minute to discuss public cloud results and what Shopify got up to.
- Batteries! Tesla is moving toward iron-based batteries and is looking to source other materials direct. At the same time, battery recycling is raising lots of cash and Nikola is not dead. We call it two truths and a lie.
- Unicorns and soon-to-be’s: Contentful raised $175M at a $3B valuation from Tiger for its content delivery service; Squire, a barbershop tech platform, tripled its valuation (again) with Tiger Global (again); and Class squashed acquisition rumors with SoftBank Vision Fund II funding,
- More venture rounds! To cap off our venture roundup, two neat healthtech investments stood out, namely rounds from Oova and Peppy. Both startups agree with the idea that hormonal health is a massive yet nascent opportunity. (We did an entire show about the imbalanced world of hormone startups if you’re interested).
- We ended on a musical note, which, luckily for you all, didn’t include us singing: Meet a quartet of early-stage music startups.
Equity drops every Monday at 7:00 a.m. PDT, Wednesday, and Friday morning at 7:00 a.m. PDT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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Business messaging platform Gupshup raises $240 million from Tiger Global, Fidelity and others
Gupshup, a business messaging platform that began its journey in India 15 years ago, surprised many when it raised $100 million in April this year, roughly 10 years after its last financing round, and attained the coveted unicorn status. Now just three months later, the San Francisco-headquartered startup has secured even more capital from high-profile investors.
On Wednesday, Gupshup said it had raised an additional $240 million as part of the same Series F financing round. The new investment was led by Fidelity Management, Tiger Global, Think Investments, Malabar Investments, Harbor Spring Capital, certain accounts managed by Neuberger Berman Investment Advisers and White Oak.
Neeraj Arora, formerly a high-profile executive at WhatsApp who played an instrumental role in helping the messaging platform sell to Facebook, also wrote a significant check to Gupshup in the new tranche of investment, which continues to value the startup at $1.4 billion as in April.
In an interview with TechCrunch earlier this week, Beerud Sheth, co-founder and chief executive of Gupshup, said he extended the financing round after receiving too many inbound requests from investors. The new investors will provide the startup with crucial insight and expertise, he said. The round is now closed, he continued.
The startup, which operates a conversational messaging platform that is used by over 100,000 businesses and developers today to build their own messaging and conversational experiences to serve their users and customers, is beginning to consider exploring the public markets by next year, said Sheth, though he cautioned a final decision is yet to be made.
“Conversation is becoming a bigger part of doing business and it has partly been driven by the pandemic,” he said over a phone call. “Second, we have always been the leader in this space, but the product innovation we have focused on in the last two to three years has worked in our favor.”
The new investment, which includes some secondary buyback (some early investors and employees are selling their stakes), will be deployed into broadening the product offerings of Gupshup, he said. The startup is also eyeing some M&A opportunities and may close some deals this year, he added.
Some of the notable customers of Gupshup, which leads the business messaging market. Image Credits: Gupshup
Before Gupshup became so popular with businesses, it existed in a different avatar. For the first six years of its existence, Gupshup was best known for enabling users in India to send group messages to friends. (These cheap texts and other clever techniques enabled tens of millions of Indians to stay in touch with one another on phones a decade ago.)
That model eventually became unfeasible to continue, Sheth told TechCrunch in an earlier interview.
“For that service to work, Gupshup was subsidizing the messages. We were paying the cost to the mobile operators. The idea was that once we scale up, we will put advertisements in those messages. Long story short, we thought as the volume of messages increases, operators will lower their prices, but they didn’t. And also the regulator said we can’t put ads in the messages,” he said earlier this year.
That’s when Gupshup decided to pivot. “We were neither able to subsidize the messages, nor monetize our user base. But we had all of this advanced technology for high-performance messaging. So we switched from a consumer model to an enterprise model. So we started to serve banks, e-commerce firms and airlines that need to send high-level messages and can afford to pay for it,” said Sheth, who also co-founded freelance workplace Elance in 1998.
Over the years, Gupshup has expanded to newer messaging channels, including conversational bots and it also helps businesses set up and run their WhatsApp channels to engage with customers.
Sheth said scores of major firms worldwide in banking, e-commerce, travel and hospitality and other sectors are among the clients of Gupshup. These firms are using Gupshup to send their customers transaction information and authentication codes, among other use cases. “These are not advertising or promotional messages. These are core service information,” he said.
“We have followed Gupshup’s progress for a long while and believe that they are the most evolved customer communications platform In India and increasingly in other emerging markets, with a leadership position in the most attractive and fastest growing subsegments of the market,” said Sumeet Nagar, managing director of Malabar Investments, in a statement.
“We believe that Beerud and team have the unique opportunity to expand the addressable market on the back of new offerings and scale the business up significantly, which is a perfect recipe for massive value creation. I have known Beerud for over three decades, and all of us at Malabar are delighted to partner with Gupshup in the next stage of their journey.”
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