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Investors’ thirst for growth could bode well for SentinelOne’s IPO
Turning the page from the early-stage venture capital market to the super late-stage exit market, this morning we’re talking about endpoint security company SentinelOne’s IPO in the context of Sprinklr’s own. We’ll have more on the public offering market later today when Doximity and Confluent price their respective IPOs after the close of trading.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.
SentinelOne’s IPO, expected to price on June 29 and trade June 30, is a fascinating debut. Why? Because the company sports a combination of rapid growth and expanding losses that make it a good heat check for the IPO market. Its debut will allow us to answer whether public investors still value growth above all else. And this week, the company gave us an early dataset regarding its market value in the form of an IPO price range. This means we can do some unpacking and thinking.
A reminder regarding why we dwell on the exit market for unicorns: We care because the value of late-stage startups when they reach a liquidity point helps set valuation comps for myriad smaller startups. Furthermore, the level of public-market enthusiasm for loss-making, growth-focused companies will determine the scale of returns for many a venture capitalist, founder and early employee.
So, let’s talk about SentinelOne’s cybersecurity IPO price range; Sprinklr’s social-media software debut will play foil.
The price of growth
It can make good sense to pay up for a quickly growing company’s shares. This is why you may hear of a startup raising an early-stage round at a very high revenue multiple.
Why put a $50 million price tag on a startup that just crossed the $1 million annual recurring revenue (ARR) threshold? If it’s growing sufficiently quickly, the math can pencil out. If that startup was growing at 300% per year, say, the revenue multiple that you paid in the round valuing the startup at $50 million would fall sharply over the next year, at which point other investors would probably scramble to put more capital into the firm at a higher price.
Bingo! You just got a markup on your initial investment, and the company has found someone else to lead their next round at a higher price, giving it even more capital to keep its growth game going and make your early investment appear prescient. See? Venture capital is easy.1
The same general idea applies to companies going public. Growth matters, and the more rapidly a company is adding revenue, the more money it will be worth because investors can anticipate its future scale (within reason). Some companies that sport quick growth can have other issues that impact their value. Extensive debt, for example, a history of uneven growth, or deteriorating economics could come into play. Or simply very high losses.
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In its first funding in 7 years, profitable fintech Lower raises $100M Series A led by Accel
Lower, an Ohio-based home finance platform, announced today it has raised $100 million in a Series A funding round led by Accel.
This round is notable for a number of reasons. First off, it’s a large Series A even by today’s standards. The financing also marks the previously bootstrapped Lower’s first external round of funding in its seven-year history. Lower is also something that is kind of rare these days in the startup world: profitable. Silicon Valley-based Accel has a history of backing profitable, bootstrapped companies, having also led large Series A rounds for the likes of 1Password, Atlassian, Qualtrics, Webflow, Tenable and Galileo (which went on to be acquired by SoFi).
In fact, Galileo founder Clay Wilkes introduced the VC firm to Dan Snyder, Lower’s founder and CEO. The two companies have a few things in common besides being profitable: they were both bootstrapped for years before taking institutional capital and both have headquarters outside of Silicon Valley.
“We were immediately intrigued because Ohio-based Lower echoes both of these themes,” said Accel partner John Locke, who led the firm’s investment in Lower and is taking a seat on the company’s board as part of the investment. “Like Galileo, Lower will be one of the most successful bootstrapped fintech companies globally. The combination of a company built in a nontraditional region across the globe and a bootstrapped company reminds us of [other] companies we have partnered with for a large Series A.”
There were other unnamed participants in the round, but Accel provided the “majority” of the investment, according to Lower.
Snyder co-founded Lower in 2014 with the goal of making the home-buying process simpler for consumers. The company launched with Homeside, its retail brand that Snyder describes as “a tech-leveraged retail mortgage bank” that works with realtors and builders, among others.
In 2018, the company launched the website for Lower, its direct-to-consumer digital lending brand with the mission of making its platform a one-stop shop where consumers can go online to save for a home, obtain or refinance a mortgage and get insurance through its marketplace. This year, it launched the Lower mobile app with a savings account.
Sitting (L to R): Co-founders Dan Snyder, Grayson Hanes
Standing (L to R): Co-founders Mike Baynes, Chris Miller
Not pictured: Robert Tyson; Image credit: Lower
Over the years, Lower has funded billions of dollars in loans and notched an impressive $300 million in revenue in 2020 after doubling revenue every year, according to Snyder.
“Our history is maybe a little atypical of fintech companies today,” he told TechCrunch. “We’ve had a view going back to the start of the company that we wanted to run it profitably. That’s been one of our pillars, so that’s what we’ve done. Also, we all grew up in the mortgage industry, so we saw firsthand the size of the market, but also how broken it was, so we wanted to change it.”
In launching the direct-to-consumer digital lending brand, the company was working to make the homebuying process more “digital, transparent and easier for consumers to access,” Snyder said.
At the same time, the company didn’t want to lose the human touch.
“We tried to design the app flow in a way where you can get as far along as you can in the application but if you want, at any point in time, to talk or chat with someone, we’re available,” Snyder added.
Image Credits: Lower
Lower’s typical customer is the millennial and now Gen Z who’s aspiring to own their first home, according to Snyder.
“They might be thinking, ‘OK, I might be living in an apartment now, but in the next few years I’m going to meet someone and/or have a child and I want to unlock the investment that is a home,’” he told TechCrunch. “And we’ll help them on that journey.”
Lower’s recently launched new app offers a deposit account it’s dubbed “HomeFund.” The interest-bearing, FDIC-insured deposit account offers a 0.75% Annual Percentage Yield and is designed to help consumers save for a home with a “dollar-for-dollar match in rewards” up to the first $1,000 saved, Snyder said.
Lower works with more than 35 major insurance carriers nationally, including Nationwide, Liberty Mutual and Allstate. It has more than 1,600 employees, about half of which are based in Lower’s home state. That’s up from about 650 employees in June of 2020.
Looking ahead, the company plans to add more services and has an “aggressive roadmap” for adding new features to its platform. Today, for example, Lower sells primarily to Fannie Mae and Freddie Mac. And while it services the majority of its loans, like many large lenders, it uses a subservicer. That will change, however, in early 2022, when Lower intends to launch its own native servicing platform.
And while the company intends to continue to run profitably, Snyder said he and his co-founders “think the time is now to gain share.”
“We want to become a global brand, raise money and gain market share,” he added. “We’re going to continue to double down on product and build out our capabilities. We are the best-kept secret in fintech and plan to change that with smart branding, advertising and sponsorships.”
And last but not least, Lower is eyeing the public markets as part of its longer-term roadmap.
“Ultimately, we know we can build a great public company,” Snyder told TechCrunch. “We’re of the scale to be a public company right now, but we’re going to keep our heads down and we’re going to keep building for the next few years and then I think we can be in a spot to be a strong public business.”
Accel’s Locke points out that in the U.S., mortgage and home finance are among the largest financial service markets, and they have primarily been handled by large banks.
“For most consumers, getting a mortgage through these banks continues to be an overly complex, slow-moving process,” Locke told TechCrunch. “We believe by providing consumers a great mobile experience, Lower will gain share from incumbent banks, in the same way that companies like Monzo have in banking or Venmo in payments or Trade Republic and Robinhood in stock trading.”
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These Forge cofounders just raised $5 million to work on a new, still-stealth investing startup
Sohail Prasad and Samvit Ramadurgam are cofounders who met during Y Combinator’s 2012 summer batch and went on to cofound Forge, which helps accredited investors and institutions buy and sell private company shares and which most recently raised $150 million in new funding in May.
Forge — originally known as Equidate — has taken off as demand for private company shares has ballooned. The company, launched in 2014, has now raised $250 million altogether, including from, Deutsche Börse, Temasek, Wells Fargo, BNP Paribas, and Munich Re. It acquired rival SharesPost last year for $160 million in cash and stock. According to the company, it now has more than $14 billion in assets under custody.
Prasad and Ramadurgam — who helped hire Forge CEO Kelly Rodriques back in 2018 — say they’re excited about that success. They still own a stake in the company; they remain non-voting board members.
But after spending 18 months as co-president of Forge at the outset of Rodrigues’s tenure, they left early last year to begin tinkering on a new idea, one that Prasad says is centered around giving a much wider pool of people access to private company shares. Called D/XYZ (pronounced “Destiny”), the idea is to enable any investor — not just the 1% — to invest in startups whose services they use and love.
Unfortunately, the two aren’t offering much more of a curtain raiser than that right now, though Prasad suggests D/XYZ is neither a new fund nor a crowdfunding vehicle. It’s also not selling any tokens, we gather. Instead, Prasad hints at an entirely new product, saying the company is being cautious in how much it shares publicly because it first wants to “get the go-ahead from regulators, as well as to ensure we have a clear path to market,” he says.
In the meantime, the two have raised $5 million in seed funding from numerous founders who like the idea of making private company shares easier for their parents, friends, customers, partners, and everyone else who likes what they’re building. Among the round’s participants is Coinbase cofounder Fred Ehrsam; Plaid cofounder and CEO Zach Perret; Quora and Expo cofounder Charlie Cheever; Superhuman founder and CEO Rahul Vohra; and serial entrepreneur Siqi Chen, who most recently founded a finance software company called Runway.
As for some of the nascent startup’s most obvious competition, Prasad doesn’t sound concerned. Asked, for example, about Carta, a well-funded company that helps private companies and their employees manage and sell their stock and options and that has long talked about democratizing access to private company shares, Prasad says it remains very much a direct competitor instead to Forge given that both cater first and foremost to companies, not individuals.
And what of SPACs, the special purpose acquisition companies that are moving private companies onto the public market faster, allowing (at least in theory) more people to access high-growth companies at earlier stages? It’s a partial solution, says Prasad. But the way he sees it, “SPACs are more a reflection that people want late-stage access to private tech and their best option right now is giving money to a SPAC manager who will hopefully find a promising company to merge with in two years or less.” He calls them a “layer of abstraction.”
Of course, there’s also the question of whether Forge will be a friend of foe if whatever Prasad and Ramadurgam are building succeeds. Could their tech be sold back to their first company? Could Forge come to see them as a rival to its business?
“What we’re doing now is not competitive,” insists Prasad. “It’s more picking up the mantle where we left off. Forge is focused on trading, custody, company solutions and data. It has built what some call boring plumbing.” Now that the plumbing has been erected, it has “enabled a lot of other interesting things to be built, too.”
So is D/XYZ working with Forge in some capacity? Prasad demurs. “Potentially,” he says.
In other words, stay tuned.
Pictured above, left to right: Sohail Prasad and Samvit Ramadurgam.
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Holy Grail raises $2.7M seed fund to create modular carbon capture devices
The founders of Holy Grail, a two-year-old startup based in Mountain View, California, are taking a micro approach to solving the outsized problem of capturing carbon.
The startup is prototyping a direct air carbon capture device that is modular and small — a departure from the dozens of projects in the U.S. and abroad that aim to capture CO2 from large, centralized emitters, like power plants or industrial facilities. Holy Grail co-founder Nuno Pereira told TechCrunch that this approach will reduce costs and eliminate the need for permits or project financing.
While Holy Grail has a long development and testing phase ahead, the idea has captured the attention and capital from well-known investors and Silicon Valley founders. Holy Grail recently raised $2.7 million in seed funding from LowerCarbon Capital, Goat Capital, Stripe founder Patrick Collison, Charlie Songhurst, Cruise co-founder Kyle Vogt, Songkick co-founder Ian Hogarth, Starlight Ventures and 35 Ventures. Existing investors Deep Science Ventures, Y Combinator and Oliver Cameron, who co-founded Voyage, the autonomous vehicle acquired by Cruise, also participated.
The carbon capture device is still in the prototype stage, Pereira said, with many specifics — such as the anticipated size of the end product and how long it will likely function — still to be worked out. Cost-effectively separating CO2 from the air is an extremely difficult problem to solve. The company is in the process of filing patents for the technology, so he declined to be too specific about many characteristics of the device, including what it will be made out of. But he did stress that the company is taking a fundamentally different technical approach to carbon capture.
“The current technologies, they are very complex. They are basically either [using] temperature or pressure [to capture carbon],” he said. “There is a lot of things that go into it, compressors, calciners and all these things,” referring to additional parts like mechanical pumps, cryogenic air separators and large quantities of water and energy. Pereira said the company will instead use electricity to control a chemical reaction that binds to the CO2. He added that Holy Grail’s devices are not dependent on scale to achieve cost reductions, either. And they will be modular, so they can be stacked or configured depending on a customer’s requirements.
The scrubbers, as Pereira calls them, will focus on raw capture of CO2 rather than conversion (converting the CO2 into fuels, for example). Pereira instead explained — with a heavy caveat that much about the end product still needs to be figured out — that once a Holy Grail unit is full, it could be collected by the company, though where the carbon will end up is still an open question.
The company will start by selling carbon credits, using its devices as the carbon reducing project. The end goal is selling the scrubbers to commercial customers and eventually even individual consumers. That’s right: Holy Grail wants you to have your own carbon capture device, possibly even right in your backyard. But the company still likely has a long road ahead of it.
“We’re essentially shifting the scaling factor from building a very large mega-ton plant and having the project management and all that stuff to building scrubbers in an assembly line, like a consumer product to be manufactured.”
Pereira said many approaches will be needed to tackle the mammoth problem of reducing the amount of CO2 in the atmosphere. “The problem is just too big,” he said.
The story has been updated to reflect that Holy Grail is based in Mountain View, not Cupertino.
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Mobile commerce startup Via rounds up $15 million in Series A funding
Mobile commerce is where it’s at, and rising investment in so-called conversational commerce startups underscores the opportunity.
Via, a two-year-old, Bay Area-based startup, is among those riding the wave, having identified some trends that are becoming clearer by the month. First, more e-commerce sales will be on mobile phones this year than desktops (as much as 70% by some estimates), people tend to read text messages almost immediately and consumers spend upwards of 30 minutes a day engaging with mobile messaging apps.
Via also insists that unlike an expanding pool of startups that are focused on helping retailers and others broadcast their marketing messages in SMS, there’s room for a player to better address the many other pieces that add up to a happy consumer experience, from delivering coupon codes to starting the returns process.
Indeed, according to co-founder and CEO Tejas Konduru — a Brigham Young grad whose parents immigrated to the U.S. from India and who have themselves worked at tech startups — one insight his now 50-person company had early on was that despite that so many of their customers now use the mobile browser to visit and shop from their stores, many retailers use website builders like Shopify or BigCommerce to “cram everything everything into mobile, leaving only enough space for, like, one picture and a Buy button.” Konduru figured there must be a way to take the shopping experience that all these customers have with brands on their website and make them happen in a quick, mobile-native way.
Via’s solution, he says, is to help those businesses interact with customers on the devices and apps they use most often. “When someone uses Shopify or BigCommerce or any of those platforms,” says Konduru, “we also connect it to Via, and it basically takes the entire shopping experience and allows [customers] to quickly swipe right through a menu or like through a catalog on, for example, Facebook Messenger. Via will also create like a native iOS Android app by taking a website, cloning it into a native iOS Android app, then sell the push notification in-app chat layer. Essentially,” he adds, “anytime someone shops on the phone and they’re not using the browser is what Via is handling.”
The “message” seems to be getting through to the right people. Via, which launched last year, says it now employs 54 people on a full-time basis, has 190 brands as customers and just secured $15 million in Series A funding led by Footwork, the new venture firm co-founded by former Stitch Fix COO Mike Smith and former Shasta Ventures investor Nikhil Basu Trivedi.
Other participants in the round include Peterson Ventures, where Konduru once interned; famed founder Josh James of Domo, where Konduru also once interned; and a long list of other notable individual investors, including Ryan Smith of Qualtrics and Lattice co-founder and CEO Jack Altman.
As for how the company charges, it doesn’t ask for a monthly or yearly fee, as per traditional SaaS companies, but instead charges per interaction, whether that’s an SMS or a voice minute or video or a GIF.
It’s starting to add up, according to Konduru, who says that Via’s average customer is seeing 15 times return on its investment and that from May of 2020 — when the company’s service went live — through December, the company generated $51 million in sales. Konduru declined to say exactly how much Via saw from those transactions, but says the company is on track to reach $10 million in annual recurring revenue this year.
As for how brands get started with Via, it’s pretty simple, by the company’s telling. As long as a company is using a commerce platform — from Shopfiy to WooCommerce to Salesforce — it takes just five minutes or so to produce a mobile app with a menu featuring the types of interactions the brand can enable via Via’s platform, says Konduru.
Konduru, who dabbled in investment banking before deciding to launch Via, says he isn’t surprised by the startup’s fast traction, though he says he has been taken aback by the breadth of conversations the company sees. While he imagined Via would be a strong marketing channel for brands that use the platform to push out notifications about abandoned shopping carts and upcoming deliveries, it’s more of a two-way street than he’d imagined.
“Every month, there are maybe 15,000 people who start the returns process through Via and will get a notification from a channel that Via supports. But suddenly — let’s say the customer gets the wrong T-shirt size — people start communicating with the brand. You see everything from fan appreciation to address changes to messaging about bad discount codes to where’s-my-order type exchanges. That’s something I didn’t expect,” says Konduru, who says that before raising its Series A round, Via raised $4.2 million in seed funding led by Peterson Ventures.
“I thought that people would just look at the notification and, like, move it into the abyss somewhere. Instead, people start interacting with the brand.”
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Investors say Eindhoven poised to become Netherlands’ No. 2 tech hub
Eindhoven might not immediately spring to mind as a high-tech hub, but the Netherlands city is keen to position itself as a center for deep tech in Europe.
The Technical University of Eindhoven, High Tech Campus Eindhoven, and locally based corporates like ASML and Philips have been eyeing initiatives across Europe and applying what they’ve learned to the region’s strategy. Philips launched in Eindhoven in 1891 and played no small part in the municipality’s ambitions to become a tech hub.
Eindhoven produces a high number of patents per year considering its small population and has been home to an inordinate number of hardware startups. The local High Tech Campus has a high hardware focus, for instance.
Our survey respondents consider the city strong in areas like photonics, robotics, medical devices, materials science, deep tech, automotive tech, sustainability tech, medtech, Big Data, hardware and precision engineering. They are looking for more mature startups and scaleups focused on AI and hard tech.
Eindhoven is considered weaker in fintech and consumer products, and it exists in a small region with limited global visibility.
Over the next five years, one respondent said, “Eindhoven will have evolved to the Netherlands’ second-largest tech ecosystem, behind Amsterdam. On a European scale, Eindhoven will have entered the top 10.”
To learn more about Eindhoven, we queried the following investors:
- Robert AL, Systema Circularis
- Nathan van den Dool, CEO, Space4Good
- Pepijn Herman, venture builder, Brabantse Ontwikkelings Maat schappij
- Betsy Lindsey, CFO, Aircision
- Andy Lurling, founding partner, LUMO Labs
- Han Dirkx, CEO and co-founder, AlphaBeats
- Jonas Onland, managing partner, Serendipity
- Daan A.J. Kersten, CEO, PhotonFirst
- Daniel den Boer, CEO and co-founder, Vaulut
Robert AL, Systema Circularis
What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
High-tech systems, photonics, robotics, medical devices.
Which are the most interesting startups in your city?
Lightyear, Bio-TRIP, EFFECT photonics, Nemo Healthcare, Sorama.
What are the tech investors like? What is the investment scene like in your city? What’s their focus?
Fully dedicated.
Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Steef Blok, Harm de Vries, Piet van der Wielen, Andy Lurling, Mark Cox.
Where do you see your city’s tech scene in five years’ time?
More mature, more focused on inclusive development, less quality coming from university spinoffs.
Nathan van den Dool, CEO, Space4Good
What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
High-tech systems and materials, the real high-tech and deep tech stuff that either leads to scientific breakthroughs or turns scientific breakthroughs into companies. Lithography makes a major contribution to that, as well as medical devices and production technologies.
Which are the most interesting startups in your city?
Nearfield Instruments, Optiflux, Dynaxion, AlphaBeats, Incooling.
What are the tech investors like? What is the investment scene like in your city? What’s their focus?
They focus mainly on high-tech machine building and software development, AI.
With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out or will others move in?
Largely unaffected.
Where do you see your city’s tech scene in five years’ time?
More integrated between AI and hard tech and production.
Pepijn Herman, venture builder, Brabantse Ontwikkelings Maat schappij
What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
The pros are high-tech systems, collaboration culture and excellent startup ecosystem; The cons are that it’s a small region with limited visibility globally.
Which are the most interesting startups in your city?
LionVolt, DENS, Lightyear, Morphotonics.
What are the tech investors like? What is the investment scene like in your city? What’s their focus?
They focus mainly on high-tech machine building and software development, AI.
With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out or will others move in?
Others will move in! Housing is extremely expensive but the demand for a skilled workforce is extremely high. If people move to surrounding areas, within 30 km, housing prices skyrocket all over.
Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
BOM (that’s us!), Braventure, Brainport Development, TNO.
Where do you see your city’s tech scene in five years’ time?
Leading worldwide in several technology areas, mainly, high-precision, roll-to-roll processing atomic layer deposition, material handling, industry 4.0, silicon processing equipment.
Betsy Lindsey, CFO, Aircision
What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
The region is strong in deep tech, automotive tech, sustainability tech, medtech, Big Data, hardware and precision engineering. Most excited by sustainability tech and deep tech. The region is weak in fintech.
Which are the most interesting startups in your city?
Lightyear, Incooling.
What are the tech investors like? What is the investment scene like in your city? What’s their focus?
Conservative, non-risk-taking — there are so many subsidies they don’t need to take risks, so once the tech risk is gone, they are good, but they are not global enough; hardware.
With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out or will others move in?
Hardware is hands-on — people are still moving in! We have a housing “crisis!”
Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Innovation Industries.
Where do you see your city’s tech scene in five years’ time?
More mature startups and scaleups on the scene!
Andy Lurling, founding partner, LUMO Labs
What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
The region is strong in sustainable cities, health and well-being, and education.
Which are the most interesting startups in your city?
FruitPunch AI, AlphaBeats, Vaulut, Lightyear, Serendipity.
What are the tech investors like? What is the investment scene like in your city? What’s their focus?
Mainly hardware; LUMO Labs has an early-stage software focus.
With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out or will others move in?
Stay.
Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Nard Sintenie, Frank Claassen, Hans Bloemen.
Where do you see your city’s tech scene in five years’ time?
Competing on a global scale.
Han Dirkx, CEO and co-founder, AlphaBeats
What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
The region is strong in deep tech and health. I’m excited about opportunities for cooperation between different companies. It’s weak in seed investment.
Which are the most interesting startups in your city?
Lightyear, AlphaBeats, Carbyon, FruitPunch, Serendipity.
What are the tech investors like? What is the investment scene like in your city? What’s their focus?
Tech investors are mainly government-regulated constitutions or angels. Focus on scaleup.
With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out or will others move in?
They will stay; working from home has some benefits but meeting people in an inspiring environment gives the best synergy.
Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
LUMO Labs, HighTechXL, Andy Lurling, Sven Bakkes, John Bell, Guus Frericks, Bert-Jan Woertman.
Where do you see your city’s tech scene in five years’ time?
Leading in the world.
Jonas Onland, managing partner, Serendipity
What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
The region is strong in building sustainable and resilient cities and a platform between cities/society and tech market.
Which are the most interesting startups in your city?
Digital Toolbox (a Serendipity spinoff), Amber (mobility), Active Esports Arena and other portfolio companies of LUMO Labs.
What are the tech investors like? What is the investment scene like in your city? What’s their focus?
Through LUMO Labs, there is a focus on societal investments; the rest is investment in high tech due to the big industries (VDLK, ASML, NXP, Phillips).
With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out or will others move in?
Work at home or mix in the office and at home.
Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
A combination of accelerators (LUMO Labs, HighTechXL, Braventure) and Brainport (ecosystem management) supported by the Eindhoven University of Technology and big corporates.
Where do you see your city’s tech scene in five years’ time?
Leading in the world on societal/systemic change — moving from high-tech toward impact (more software and digitization).
Daan A.J. Kersten, CEO, PhotonFirst
What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
It’s strong in high-tech equipment, hardware, photonics, additive manufacturing, lighting, electronics, semiconductor technology and health tech, and weak in consumer products and apps.
Which are the most interesting startups in your city?
Lightyear, ELEO Technologies, EFFECT Photonics, SMART Photonics, PhotonFirst, Amber.
What are the tech investors like? What is the investment scene like in your city? What’s their focus?
There is a relatively low number of investors in early stage.
With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out or will others move in?
They will stay. Eindhoven is a hot spot with many cultures, international tech community and great infrastructure, while it feels like a village.
Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
Nard Sintenie, startup founders, HighTechXL.
Where do you see your city’s tech scene in five years’ time?
Worldwide dominance in high-tech hardware scaleups.
Daniel den Boer, CEO and co-founder, Vaulut
What industry sectors is your tech ecosystem strong in? What are you most excited by? What is it weak in?
The Eindhoven ecosystem is really strong in the sectors of mobility, smart city and energy. I’m most excited about smart city. This is our focus sector and it is the embodiment of ecosystem collaboration with impact solutions.
Which are the most interesting startups in your city?
Vaulut, Roseman Labs, FruitPunch AI, Amber, Sendcloud, Lightyear.
What are the tech investors like? What is the investment scene like in your city? What’s their focus?
The investment scene is getting better. They are increasingly realizing that deep tech takes time and needs to be nurtured, but the potential impact is massive and can have a dramatic effect on the entire ecosystem. There are still relatively few early-stage impact drive investors. LUMO Labs is leading the pack on that front.
With the shift to remote working during the COVID-19 pandemic, will people stay in your city, move out or will others move in?
I think more people will stay as the need to move to Amsterdam as the tech hub of the Netherlands diminishes, giving Eindhoven a boost to strengthen its own ecosystem, which will in turn make even more people stay and attract people to move in the city. As a result, COVID-19 will have a positive effect on Eindhoven’s tech ecosystem, I believe.
Who are the key startup people in your city (e.g., investors, founders, lawyers, designers, etc.)?
LUMO Labs, the Eindhoven University of Technology, High Tech Campus, Amber, Brainport Eindhoven.
Where do you see your city’s tech scene in five years’ time?
In five years, I believe Eindhoven will have evolved to Netherlands’ second-largest tech ecosystem, behind Amsterdam. On a European scale, Eindhoven will have entered the top 10.
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Extra Crunch roundup: influencer marketing 101, spotting future unicorns, Apple AirTags teardown
With the right message, even a small startup can connect with established and emerging stars on TikTok, Instagram and YouTube who will promote your products and services — as long as your marketing team understands the influencer marketplace.
Creators have a wide variety of brands and revenue channels to choose from, but marketers who understand how to court these influencers can make inroads no matter the size of their budget. Although brand partnerships are still the top source of revenue for creators, many are starting to diversify.
If you’re in charge of marketing at an early-stage startup, this post explains how to connect with an influencer who authentically resonates with your brand and covers the basics of setting up a revenue-share structure that works for everyone.
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Use discount code ECFriday to save 20% off a one- or two-year subscription
Our upcoming TC Early Stage event is devoted to marketing and fundraising, so expect to see more articles than usual about growth marketing in the near future.
We also ran a post this week with tips for making the first marketing hire, and Managing Editor Eric Eldon spoke to growth leader Susan Su to get her thoughts about building remote marketing teams.
We’re off today to celebrate the Juneteenth holiday in the United States. I hope you have a safe and relaxing weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
As the economy reopens, startups are uniquely positioned to recruit talent
Image Credits: ballyscanlon (opens in a new window) / Getty Images
The pandemic forced a reckoning about the way we work — and whether we want to keep working in the same way, with the same people, for the same company — and many are looking for something different on the other side.
Art Zeile, the CEO of DHI Group, notes this means it’s a great time for startups to recruit talent.
“While all startups are certainly not focused on being disruptive, they often rely on cutting-edge technology and processes to give their customers something truly new,” Zeile writes. “Many are trying to change the pattern in their particular industry. So, by definition, they generally have a really interesting mission or purpose that may be more appealing to tech professionals.”
Here are four considerations for high-growth company founders building their post-pandemic team.
Refraction AI’s Matthew Johnson-Roberson on finding the middle path to robotic delivery
Image Credits: Bryce Durbin
“Refraction AI calls itself the Goldilocks of robotic delivery,” Rebecca Bellan writes. “The Ann Arbor-based company … was founded by two University of Michigan professors who think delivery via full-size autonomous vehicles (AV) is not nearly as close as many promise, and sidewalk delivery comes with too many hassles and not enough payoff.
“Their ‘just right’ solution? Find a middle path, or rather, a bike path.”
Rebecca sat down with the company’s CEO to discuss his motivation to make “something that is useful to the general public.”
How to identify unicorn founders when they’re still early-stage
Image Credits: RichVintage (opens in a new window)/ Getty Images
What are investors looking for?
Founders often tie themselves in knots as they try to project qualities they hope investors are seeking. In reality, few entrepreneurs have the acting skills required to convince someone that they’re patient, dedicated or hard working.
Johan Brenner, general partner at Creandum, was an early backer of Klarna, Spotify and several other European startups. Over the last two decades, he’s identified five key traits shared by people who create billion-dollar companies.
“A true unicorn founder doesn’t need to have all of those capabilities on day one,” Brenner, writes “but they should already be thinking big while executing small and demonstrating that they understand how to scale a company.”
Founders Ben Schippers and Evette Ellis are riding the EV sales wave
Image Credits: TechCrunch
EV sales are driving demand for services and startups that fulfill the new needs of drivers, charging station operators and others.
Evette Ellis and Ben Schippers took to the main stage at TC Sessions: Mobility 2021 to share how their companies capitalized on the new opportunities presented by the electric transportation revolution.
Scale AI CEO Alex Wang weighs in on software bugs and what will make AV tech good enough
Image Credits: Alexandr Wang
Scale co-founder and CEO Alex Wang joined us at TechCrunch Sessions: Mobility 2021 to discuss his company’s role in the autonomous driving industry and how it’s changed in the five years since its founding.
Scale helps large and small AV players establish reliable “ground truth” through data annotation and management, and along the way, the standards for what that means have shifted as the industry matures.
Even if two algorithms in autonomous driving might be created more or less equal, their real-world performance could vary dramatically based on what they’re consuming in terms of input data. That’s where Scale’s value prop to the industry starts, and Wang explains why.
Edtech investors are flocking to SaaS guidance counselors
Image Credits: Getty Images / Vertigo3d
The prevailing post-pandemic edtech narrative, which predicted higher ed would be DOA as soon as everyone got their vaccine and took off for a gap year, might not be quite true.
Natasha Mascarenhas explores a new crop of edtech SaaS startups that function like guidance counselors, helping students with everything from study-abroad opportunities to swiping right on a captivating college (really!).
“Startups that help students navigate institutional bureaucracy so they can get more value out of their educational experience may become a growing focus for investors as consumer demand for virtual personalized learning increases,” she writes.
Dear Sophie: Is it possible to expand our startup in the US?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
My co-founders and I launched a software startup in Iran a few years ago, and I’m happy to say it’s now thriving. We’d like to expand our company in California.
Now that President Joe Biden has eliminated the Muslim ban, is it possible to do that? Is the pandemic still standing in the way? Do you have any suggestions?
— Talented in Tehran
Companies should utilize real-time compensation data to ensure equal pay
Image Credits: Rudzhan Nagiev (opens in a new window) / Getty Images
Chris Jackson, the vice president of client development at CompTrak, writes in a guest column that having a conversation about diversity, equity and inclusion initiatives and “agreeing on the need for equality doesn’t mean it will be achieved on an organizational scale.”
He lays out a data-driven proposal that brings in everyone from directors to HR to the talent acquisition team to get companies closer to actual equity — not just talking about it.
Investors Clara Brenner, Quin Garcia and Rachel Holt on SPACs, micromobility and how COVID-19 shaped VC
Image Credits: TechCrunch
Few people are more closely tapped into the innovations in the transportation space than investors.
They’re paying close attention to what startups and tech companies are doing to develop and commercialize autonomous vehicle technology, electrification, micromobility, robotics and so much more.
For TC Sessions: Mobility 2021, we talked to three VCs about everything from the pandemic to the most overlooked opportunities within the transportation space.
Experts from Ford, Toyota and Hyundai outline why automakers are pouring money into robotics
Image Credits: TechCrunch
Automakers’ interest in robotics is not a new phenomenon, of course: Robots and automation have long played a role in manufacturing and are both clearly central to their push into AVs.
But recently, many companies are going even deeper into the field, with plans to be involved in the wide spectrum of categories that robotics touch.
At TC Sessions: Mobility 2021, we spoke to a trio of experts at three major automakers about their companies’ unique approaches to robotics.
Apple AirTags UX teardown: The trade-off between privacy and user experience
Image Credits: James D. Morgan/Getty Images
Apple’s location devices — called AirTags — have been out for more than a month now. The initial impressions were good, but as we concluded back in April: “It will be interesting to see these play out once AirTags are out getting lost in the wild.”
That’s exactly what our resident UX analyst, Peter Ramsey, has been doing for the last month — intentionally losing AirTags to test their user experience at the limits.
This Extra Crunch exclusive helps bridge the gap between Apple’s mistakes and how you can make meaningful changes to your product’s UX.
How to launch a successful RPA initiative
Image Credits: NanoStockk (opens in a new window) / Getty Images
Robotic process automation (RPA) is no longer in the early-adopter phase.
Though it requires buy-in from across the organization, contributor Kevin Buckley writes, it’s time to gather everyone around and get to work.
“Automating just basic workflow processes has resulted in such tremendous efficiency improvements and cost savings that businesses are adapting automation at scale and across the enterprise,” he writes.
Long story short: “Adapting business automation for the enterprise should be approached as a business solution that happens to require some technical support.”
Mobility startups can be equitable, accessible and profitable
Image Credits: TechCrunch
Mobility should be a right, but too often it’s a privilege. Can startups provide the technology and the systems necessary to help correct this injustice?
At our TC Sessions: Mobility 2021 event, we sat down with Revel CEO and co-founder Frank Reig, Remix CEO and co-founder Tiffany Chu, and community organizer, transportation consultant and lawyer Tamika L. Butler to discuss how mobility companies should think about equity, why incorporating it from the get-go will save money in the long run, and how they can partner with cities to expand accessible and sustainable mobility.
CEO Shishir Mehrotra and investor S. Somasegar reveal what sings in Coda’s pitch doc
Image Credits: Carlin Ma / Madrona Venture Group/Brian Smale
Coda CEO Shishir Mehrotra and Madrona partner S. Somasegar joined Extra Crunch Live to go through Coda’s pitch doc (not deck. Doc) and stuck around for the ECL Pitch-off, where founders in the audience come “onstage” to pitch their products to our guests.
Extra Crunch Live takes place every Wednesday at 3 p.m. EDT/noon PDT. Anyone can hang out during the episode (which includes networking with other attendees), but access to past episodes is reserved exclusively for Extra Crunch members. Join here.
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Yana’s mental health tool for Spanish speakers nears 5 million users
Andrea Campos has struggled with depression since she was eight years old. Over the years, she’s tried all sorts of therapies — from behavioral to pharmacotherapy.
In 2017, when Campos was in her early 20s, she learned to program and created a system to help manage her mental health. It started as a personal project, but as she talked to more people, Campos realized that many others might benefit from the system as well.
So she built an application to provide access to mental health tools for Spanish-speaking people and began testing it with a small group. At first, Campos herself was her own chatbot, texting with users who were tired of dealing with depression.
“During the month, I was pretending I was an app, and would send these people a list of activities they had to complete during the day, such as writing in a gratitude journal, and then asking them how those activities made them feel,” Campos recalls.
Her thinking was that sometimes with depression and anxiety comes “a lot of avoidance,” where people resist potential treatment out of fear.
The results from her small experiment were encouraging. So, Campos set out to conduct a bigger sample of experiments, and raised about $10,000 via a crowdfunding campaign. With that money, she hired a developer to build a chatbot for her app, which was mostly being used via Facebook Messenger.
Then an earthquake hit Mexico City and that developer lost everything — including his home and computer — and had to relocate.
“I was left with nothing,” Campos says. But that developer introduced her to another, who disappeared with his payment, and again, left Campos, “with nothing.”
“I realized at the beginning of 2019, I was going to have to do this by myself,” Campos said. So she used a site that she described as a “Wix for chatbots,” and created one herself.
After experimenting with the app with a sample of 700 people, Campos was even more encouraged and raised an angel round of funding for Yana, the startup behind her app. (Yana is an acronym for “You Are Not Alone.”) By early 2020, with just three months of runway left, she pivoted to create an app with chatbot integration that wasn’t just limited to use via Facebook Messenger.
Campos ended up launching the app more broadly during the same week that her city in Mexico went into quarantine.
Image Credits: Yana
At first, she said, she saw “normal, steady growth.” But then on October 10, 2020, Apple’s App Store highlighted Yana for International Mental Health Day, and the response was overwhelming.
“It was also my birthday so I was at a spa in a nearby town, relaxing, when I started hearing my cell phone go crazy,” Campos recalls. “Everything went nuts. I had to go back to Mexico City because our servers were exploding since they were not used to having that kind of volume.”
As a result of that exposure, Yana went from having around 80,000 users to reaching 1 million users two weeks later. Soon after that, Google highlighted the app as one of best for personal growth in 2020, and that too led to another spike in users. Today, Yana is about to hit the 5 million-user mark and is also announcing it has raised $1.5 million in funding led by Mexico’s ALLVP, which has also invested in the likes of Cornershop, Flink and Nuvocargo.
When the pandemic hit last year, six of Yana’s nine-person team decided to quarantine together in a “startup house” in Cancun to focus on building the company. Earlier this year, the company had raised $315,000 from investors such as 500 Startups, Magma and Hustle Fund. The company had pitched ALLVP, which was intrigued but wanted to wait until it could write a bigger check.
That time is now, and Yana is now among the top three downloaded apps in Mexico and 12 countries, including Spain, Chile, Ecuador and Venezuela.
With its new capital, Yana is planning to “move away from the depression/anxiety narrative,” according to Campos.
“We want to compete in the wellness space,” she told TechCrunch. “A lot of people were looking for us to deal with crises such as a breakup or a loss but then they didn’t always see a necessity to keep using Yana for longer than the crisis lasted.”
Some of those people would download the app again months later when hit with another crisis.
“We don’t want to be that app anymore,” Campos said. “We want to focus on whole wellness and mental health and transmit something that needs to be built every single day, just like we do with exercise.”
Moving forward, Yana aims to help people with their mental health not just during a crisis but with activities they can do on a daily basis, including a gratitude journal, a mood tracker and meditation — “things that prevent depression and anxiety,” Campos said.
“We want to be a vitamin for our soul, and keeping people mentally healthy on an ongoing basis,” she said. “We also want to include a community inside our application.”
ALLVP’s Federico Antoni is enthusiastic about the startup’s potential. He first met Campos when she was participating in an accelerator program in 2017, and then again recently.
The firm led Yana’s latest round because it “wanted to be on her team.”
“She [Campos] has turned into an amazing leader, and we realized her potential and strength,” he said. “Plus, Yana is an amazing product. When you download it, it’s almost like you can see a soul in there.”
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The air taxi market prepares to take flight
Twelve years ago, Joby Aviation consisted of a team of seven engineers working out of founder JoeBen Bevirt’s ranch in the Santa Cruz mountains. Today, the startup has swelled to 800 people and a $6.6 billion valuation, ranking itself as the highest-valued electric vertical take-off and landing (eVTOL) company in the industry.
As in any disruptive industry, the forecast may be cloudier than the rosy picture painted by passionate founders and investors.
It’s not the only air taxi company to reach unicorn status. The field is now dotted with new or soon-to-be publicly traded companies courtesy of mergers and special purpose acquisition companies. Partnerships with major automakers and airlines are on the rise, and CEOs have promised commercialization as early as 2024.
As in any disruptive industry, the forecast may be cloudier than the rosy picture painted by passionate founders and investors. A quick peek at comments and posts on LinkedIn reveals squabbles among industry insiders and analysts about when this emerging technology will truly take off and which companies will come out ahead.
Other disagreements have higher stakes. Wisk Aero filed a lawsuit against Archer Aviation alleging trade secret misappropriation. Meanwhile, valuations for companies that have no revenue yet to speak of — and may not for the foreseeable future — are skyrocketing.
Electric air mobility is gaining elevation. But there’s going to be some turbulence ahead.
Big goals and bigger expenses
Taking an eVTOL from design through to manufacturing and certification will likely cost about $1 billion, Mark Moore, then-head of Uber Elevate, estimated in April 2020 during a conference held by the Air Force’s Agility Prime program.
That means in some sense, the companies that will come out on top will likely be the ones that have managed to raise enough money to pay for all the expenses associated with engineering, certification, manufacturing and infrastructure.
“The startups that have successfully raised or that will be able to raise significant amounts of capital to get them through the certification process … that’s the number one thing that’s going to separate the strong from the weak,” Asad Hussain, a senior analyst in mobility technology at PitchBook, told TechCrunch. “There’s over 100 startups in the space. Not all of them are going to be able to do that.”
Just consider some of the expenses accrued by the biggest eVTOLs last year: Joby Aviation spent a whopping $108 million on research and development, a $30 million increase from 2019. Archer spent $21 million in R&D in 2020, according to regulatory filings. Meanwhile, Joby’s net loss last year was $114.2 million and Archer’s was $24.8 million, though, of course, neither company has brought a product to market yet. Operating expenses will likely only continue to grow into the future as companies enter into manufacturing and deployment phases.
What that means for the future of the industry is likely two things: more SPAC deals and more acquisitions.
Mobility companies, including those working on electrified transport, are often pre-revenue and have capitally intensive business models — a combination that can make it difficult to find buyers in a traditional IPO. SPACs have become increasingly popular as a shorter, less expensive path to becoming a public company. SPACs have also historically received less scrutiny than IPOs. Should the U.S. Securities Exchange Commission start to take a closer look at SPAC mergers in the future, it may impair the ability of other air taxi companies to go public this way, Hussain said.
That means market consolidation is nearly guaranteed, as smaller companies may find it more advantageous to sell than continue to raise more capital. It’s already begun: At the end of April, eVTOL developer Astro Aerospace announced the acquisition of Horizon Aircraft.
Horizon cited “greater access to capital” as one of the many benefits of the transaction, and other companies will likely find the buy or sell route to be the most beneficial on the road to commercialization. And just last week, British eVTOL Vertical Aerospace, which has an order for 150 aircraft from Virgin Atlantic, said it would go public via a merger with Broadstone Acquisition Corp. at an equity value of around $2.2 billion.
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Extra Crunch roundup: EU insurtech, 30 years of ‘Crossing the Chasm,’ embedded finance’s endgame
This morning, Anna Heim and Alex Wilhelm dug into the EU insurtech market, interviewing European VCs and collating the biggest recent rounds to take the temperature of the waters across the pond:
- Alex Timm, CEO, Root
- Dan Preston, CEO, MetroMile
- Luca Bocchio, partner, Accel
- Florian Graillot, investor, Astorya.vc
- Stephen Brittain, director and founder, Insurtech Gateway
Several European-based insurtech startups entered unicorn territory this year, such as Bought By Many, which offers pet insurance; London-based Zego; and Alan, a French startup that raised a $220 million round.
According to Brittain, EU startups in this sector are “still at the very early stages of innovation,” having only shown “a fraction of what’s possible” in a market that is “as large as banking.” Interestingly, he predicted that AI will play a larger role in the future as companies deploy it for fraud detection, improved customer experiences and processing claims more quickly.
“We are fully expecting the next generation of AI-driven business to unlock real-time risk analysis, pricing and claims resolution in the next few years,” he said.
Thanks very much for reading Extra Crunch; I hope you have a safe, relaxing weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
What do these 4 IPOs tell us about the state of the market?
Image Credits: Nigel Sussman (opens in a new window)
Earlier this week, The Exchange assessed the looming Monday.com IPO before reading the tea leaves about that flotation and three others to sum up the overall state of the market.
So what do the Marqeta, Monday.com, Zeta Global and 1stDibs debuts tell us? We may have been too conservative.
Toast’s Aman Narang and BVP’s Kent Bennett on how customer obsession is everything
Image Credits: Bessemer Venture Partners / Toast
On a recent episode of Extra Crunch Live, we spoke to Toast founder Aman Narang and Kent Bennett of Bessemer Venture Partners about how they came together for a deal, what makes the difference for both founders and investors when fundraising, and the biggest lessons they’ve learned so far.
The episode also featured the Extra Crunch Live Pitch-Off, where audience members pitched their products to Bennett and Narang and received live feedback.
Extra Crunch Live is open to everyone each Wednesday at 3 p.m. EDT/noon PDT, but only Extra Crunch members are able to stream these sessions afterward and watch previous shows on-demand in our episode library.
AI startup investment is on pace for a record year
Image Credits: Nigel Sussman (opens in a new window)
Alex Wilhelm and Anna Heim solicited feedback from investors to get a temperature on the market for AI startup investments.
“The startup investing market is crowded, expensive and rapid-fire today as venture capitalists work to preempt one another, hoping to deploy funds into hot companies before their competitors,” they write. “The AI startup market may be even hotter than the average technology niche.”
But that’s not surprising. The Exchange was on it.
“In the wake of the Microsoft-Nuance deal, The Exchange reported that it would be reasonable to anticipate an even more active and competitive market for AI-powered startups,” Alex and Anna note. “Our thesis was that after Redmond dropped nearly $20 billion for the AI company, investors would have a fresh incentive to invest in upstarts with an AI focus or strong AI component; exits, especially large transactions, have a way of spurring investor interest in related companies.”
Their expectation is coming true: Investors reported a fierce market for AI startups.
Dear Sophie: What is a diversity green card and how do I apply for one?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
I started a tech company about two years ago, and ever since I’ve dreamed of expanding my company in the United States.
I would love to have a green card. Someone mentioned that I should apply for a diversity green card. Would you please provide me with more details about it and how to apply?
— Technical in Tanzania
How to start a company in 4 days
Image Credits: MediaProduction (opens in a new window) / Getty Images
Pulley founder and three-time YC alum Yin Wu offers a tactical guide to getting a startup running in four days. Yes, just four days.
“The logistics of setting up a startup should be simple, because over the long run, complicated equity setups and cap tables cost more money in legal fees and administration time,” Wu notes.
Read on for guidance on how to get your business going in less than a week.
Health clouds are set to play a key role in healthcare innovation
Image Credits: Natali_Mis / Getty Images
Innovaccer founder and CEO Abhinav Shashank and CTO Mike Sutten write in a guest column that the U.S. healthcare industry is in the middle of a massive transformation.
This shift, they write, “is being stimulated by federal mandates, technological innovation, and the need to improve clinical outcomes and communication between providers, patients and payers.”
Improving healthcare now means we need to process tremendous amounts of healthcare data. How do we do it? The cloud, which “plays a pivotal role in meeting the current needs of healthcare organizations.”
What SOSV’s Climate Tech 100 tells founders about investors in the space
Image Credits: MrJub / Getty Images
SOSV’s Benjamin Joffe and Meghan Hind round up a “who’s who” from the venture capital firm’s SOSV Climate Tech 100, a list of the best startups addressing climate change that SOSV has supported from the very beginning.
“What can founders learn from the list about climate tech investors? In other words, who invested in the Climate Tech 100?” they ask.
The fintech endgame: New supercompanies combine the best of software and financials
Image Credits: Donald Iain Smith (opens in a new window) / Getty Images
Now that we can transact from anywhere, a new, hybrid class of software companies with embedded financial services are scooping up consumers — and investors are following the action.
Using data from a Battery Ventures report about “the intersection of software and financial services,” this post examines why these companies can be so hard to value and offers a framework for better understanding their business models and investor appeal.
After 30 years, ‘Crossing the Chasm’ is due for a refresh
Image Credits: Grant Faint (opens in a new window) / Getty Images
Geoffrey Moore’s “Chasm,” a framework for marketing technology products that has been one of the canonical foundational concepts to product-market fit for three decades, needs a bit of an upgrade, Flybridge Capital’s Jeff Bussgang writes.
“I have been reflecting on why it is that we venture capitalists and founders keep making the same mistake over and over again — a mistake that has become even more glaring in recent years,” he writes.
Bussgang goes on to consider the Chasm — and propose tweaks for thinking about market size in the modern era.
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