Y Combinator
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Changing policy, Y Combinator cuts its pro rata stake and makes investments case-by-case
In a message posted to its internal communications channel earlier this week, the massive startup accelerator Y Combinator said it will change the terms of its own PPP (the YC pro rata investment program) and investing in companies raising seed and Series A rounds on a case-by-case basis.
The company began a policy of investing in every seed and Series A round for its portfolio companies back in 2015.
Since then, it has taken a 7% stake in every company that raised a priced seed and Series A round, investing in more than 300 Y Combinator companies over nearly 500 rounds.
Under its new policy, the accelerator is reducing its investment size from 7% to 4% and is only investing on a case-by-case basis going forward.
The reason for the change is that the number of companies in its portfolio has gotten too large for it to invest and some of the limited partners who back the accelerator’s operations are balking at making commitments to the pro rata investment program.
“We have significantly exceeded the funds we raised for pro ratas, and the investors who support YC do not have the appetite to fund the pro rata program at the same scale,” the accelerator wrote in a post seen by TechCrunch. “In addition, processing hundreds of follow-on rounds per year has created significant operational complexities for YC that we did not anticipate. Said simply, investing in every round for every YC company requires more capital than we want to raise and manage. We always tell startups to stay small and manage their budgets carefully. In this instance, we failed to follow our own advice.”
For entrepreneurs who take investments from the accelerator, the change is pretty significant. On the accelerator’s internal messaging board they worried about the potential optics of having the accelerator not make a follow-on commitment.
YC addressed those concerns by saying it would not make an investment decision until a company had already received an initial term sheet from a lead investor.
The changes will take effect on May 8, 2020, the investor said.
“In the future, we will no longer invest automatically in every priced seed and Series A/B round. Instead, we will exercise pro rata rights on a case-by-case basis, like other investors on your cap table,” the accelerator wrote. “We’ve heard your feedback that YC’s pro rata allocation is bigger than what some of you would prefer. So for those investments we do make, we will reduce the size of our pro rata and simplify its calculation to be a flat 4% participation right in each priced round. To calculate the size of YC’s pro rata investment in your round, simply multiply the amount of capital you are raising by 4%. If our ownership right before the round is less than 4%, we will cap our investment in the round at our then-current ownership. Our intention is not to have a super pro-rata right.”
Even with the reduced investment size, YC said it would only make investments in roughly one-third of its portfolio.
“The YC Continuity team will manage these investment decisions and will work very hard to inform you within a day or two of receiving your materials,” the accelerator wrote. “We will honor any pending pro rata investments for term sheets signed before May 8. But we wanted to communicate this message broadly so that founders can plan accordingly.”
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WorkClout shifts focus to manufacturing performance support and raises $2.3M seed
WorkClout, a graduate of the Y Combinator Winter 2019 cohort, announced today that it has shifted its focus from manufacturing automation to manufacturing performance support and has raised a $2.3 million seed round.
The funding was led by Spider Capital with participation from Y Combinator, Liquid 2, Soma Capital, Pioneer Fund, Mehta Ventures and several individual investors.
When the company launched last year, it was looking at helping customers drive operational efficiency in their processes, but WorkClout founder and CEO Arjun Patel says they were seeing that there was a ceiling in terms of how much efficiency they could squeeze out of work processes using software.
At that point, Patel decided to take a step back and do some research to figure out how WorkClout could best help manufacturing customers with its software-based solutions. After surveying 124 manufacturers, he says that he realized that these companies really needed help training front-line workers, an area he says is called performance support.
“We found that most of the companies were saying that employees are the biggest challenge that they have to face in terms of how to engage them better or how to empower them better, because ultimately they realize people, even if there is automation, are still the driving force for a lot of sectors,” Patel told TechCrunch.
Towards the end of last year, the company built a new tool to help customers train employees for complex front-line tasks. The workers might have a phone or tablet, which shows them how to complete each task, and gives them feedback as they move through a set of tasks. It also enables these workers to communicate with one another and with management about issues they are seeing on the line. Managers can monitor communication and see how workers are doing on a back-end system in the office.
“We gave them the ability to allow employees to capture and share critical information in real time on the factory floor, where the goal is to actually create standardized multimedia and training content for machines, processes and stations, allowing new and existing employees to get better insight into their work, and at the same time, allowing employees to communicate better about problems on the floor and reduce downtime,” he explained.
Patel recognizes that this is a difficult time to pivot, but says he believes it puts the company in a better position to succeed in the long term. He has cut the team from nine to five employees in an effort to run lean for the short term.
He hopes to begin hiring again in the fourth quarter this year or, at the latest, by Q1 next year. He plans to use that time to build out the product and prepare for a big go-to market push whenever the economy begins to rebound.
He sees this money giving him a long runway of 2.5 years with the company’s current burn and revenue rates, and that should give him enough time to wait out the current economic downturn.
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Zelos is like a cross-game battle pass, rewarding you for completing challenges in games you already play
People seem to love the concept of the battle pass.
Largely popularized by Fortnite, battle passes reward players for playing well, and playing often. The better you do, the more XP you earn; the more XP you earn, the more stuff (new looks for your character, or victory dances to fire off at the end of a gunfight) you unlock. Willing to cough up a few bucks for an optional “premium” battle pass? That’ll open up a whole new set of rewards. The model has made its way into countless games over the last couple of years, from PUBG to Rocket League.
Zelos, an LA-based company out of Y Combinator’s Winter 2020 batch, is aiming to make that same concept work across multiple games. Tackle challenges in one game, earn rewards for another — or use your points to buy new games altogether.
Each day, Zelos offers up a handful of challenges across each of the games it supports, like dealing 10,000 damage in League of Legends or getting five kills with Wraith in Apex. Completing a challenge earns you “zips”; most challenges I’ve seen will earn the player somewhere between 15 and 150 zips, depending on how tough it is to pull off.
Once you’ve pooled up a pile of zips, they can be redeemed for all sorts of virtual goodies. The more something would cost otherwise, the more zips it’ll require. For example, 60,000 zips gets you a $5 Steam gift card — or 90,000 zips for $10 worth of Apex Coins. Once you get into the 50,000-200,000 zip range, you can redeem them for digital download codes for games like Rainbow Six Siege, Monster Hunter: World and Tabletop Simulator. Getting the good stuff can mean completing a lot of challenges, but remember: these are games people are playing anyway.
In addition to zips, each challenge earns the player a bit of EXP. EXP levels up your Zelos profile; with each level, you unlock a bundle of zips, additional challenges and items for your Zelos avatar.
Zelos is currently issuing challenges and tracking stats across seven games: Fortnite, Apex, League of Legends, Teamfight Tactics, DOTA 2, Counter Strike: GO and Clash Royale. Stat tracking works a bit better in some games than it does in others, depending on how open a game’s developers are with the data. With League of Legends, for example, they’re able to ping Riot Games’ dedicated API for a rich backlog of match data; with Apex, on the other hand, they’re limited to pulling stats based on a handful of unlockable trackers players can flip on between matches.
Zelos co-founder Jeffrey Tong tells me they’re focused on ensuring they stay above board with the data they pull, making sure they comply with each provider’s ToS. That makes sense, of course: Getting on a developer’s bad side could mean losing access to the data firehouse, in turn squashing Zelos’ ability to support a game. The more popular games Zelos can support, the better the whole idea works.
So if they’re giving stuff away based on challenges in games they themselves aren’t selling… how will they make money? The same way the aforementioned games do: a premium battle pass. Tong tells me that they’re currently testing a subscription-based battle pass that’ll unlock new challenges, award more prizes and increase the rate at which points are earned.
This isn’t Tong’s first foray into the gaming space; he previously built and sold OverStats, an analytics system for tracking a player’s esports stats over time. Co-founder Derek Chiang, meanwhile, was previously a senior software engineer at the decentralized computing company Dfinity.
Tong tells me they raised $2.8 million in the days after YC demo day, eyeing expansion of the platform, supported games and their team. The Zelos team is currently three people, with plans to hire another “six or seven” in the coming weeks. They’re currently seeing more than 50,000 weekly active users, with 55% of their users playing two or more games on the platform.
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TechCrunch’s favorite companies from 500 Startups’ latest demo day
Today 500 Startups hosted a virtual demo day for its 26th batch of startups, a group of companies that TechCrunch covered back in February.
500 is not the only accelerator that moved its traditional investor pitch event online; Y Combinator made a similar move after efforts to flatten the spread of COVID-19 required changes that made its traditional demo day setup temporarily impossible.
In addition to hosting a few dozen startup pitches today, 500 also explained changes to its own format and provided notes on the current state of the venture market.
Regarding how 500 Startups is shaking up how it handles its accelerator, the group intends to pivot to a rolling-admissions setup that will give participants more flexibility; the group will still hold two demo days each year — TechCrunch has more on the changes here.
Regarding the venture market, 500 Startups said venture capital’s investment pace could slow for several months. This seems likely, given how the economy has taken body blows in recent weeks as huge swaths of the world’s economy shut down. What advice did 500 have in the face of the new world? What you’d expect: startups should cut burn and focus on customers.
Got all that? OK, let’s talk about our favorite companies from the current 500 cohort.
Our faves
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Y Combinator is fast-tracking investments in startups tackling COVID-19
Y Combinator wants to bring more startups through its accelerator that can help with the COVID-19 crisis, and the firm is looking to expedite the pace of its application process so it can put money behind the efforts sooner.
The accelerator’s most recent batch “presented” just last week in a virtual demo day that was adjusted in light of the early outbreak. Just a week later, the situation has progressed substantially, and YC’s team says they are looking to bring in a new class of startups to tackle issues relating to the pandemic.
YC shared some of the new fields it was looking to invest in specifically, which include testing and diagnostics, treatments and vaccines, hospital equipment and monitoring/data infrastructure. Startups that fit the bill will be fast-tracked, funded and tossed into a remote program immediately.
Y Combinator responding to COVID-19. https://t.co/Vx9RWQL3UM
— Michael Seibel (@mwseibel) March 25, 2020
YC is looking for companies that can be helpful, but at the same time it’s looking to invest in businesses that can remain viable post-crisis, the company says on its site:
For a startup to have an impact in time to address the current crisis, it will have to move faster than most people think is possible. This means the founders need to have domain expertise in the area; they also need to have a plan for how to have a significant impact globally in a short timeline. They also need to have a path to building a sustainable business after the crisis is over.
In addition to sharing details about funding new companies, YC also shared a website detailing some of the efforts to help being undertaken by their existing portfolio companies.
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YC startup Felix wants to replace antibiotics with programmable viruses
Right now the world is at war. But this is no ordinary war. It’s a fight with an organism so small we can only detect it through use of a microscope — and if we don’t stop it, it could kill millions of us in the next several decades. No, I’m not talking about COVID-19, though that organism is the one on everyone’s mind right now. I’m talking about antibiotic-resistant bacteria.
You see, more than 700,000 people died globally from bacterial infections last year — 35,000 of them in the U.S. If we do nothing, that number could grow to 10 million annually by 2050, according to a United Nations report.
The problem? Antibiotic overuse at the doctor’s office or in livestock and farming practices. We used a lot of drugs over time to kill off all the bad bacteria — but it only killed off most, not all, of the bad bacteria. And, as the famous line from Jeff Goldblum in Jurassic Park goes, “life finds a way.”
Enter Felix, a biotech startup in the latest Y Combinator batch that thinks it has a novel approach to keeping bacterial infections at bay – viruses.
Phage killing bacteria in a petri dish
It seems weird in a time of widespread concern over the corona virus to be looking at any virus in a good light but as co-founder Robert McBride explains it, Felix’s key technology allows him to target his virus to specific sites on bacteria. This not only kills off the bad bacteria but can also halt its ability to evolve and once more become resistant.
But the idea to use a virus to kill off bacteria is not necessarily new. Bacteriophages, or viruses that can “infect” bacteria, were first discovered by an English researcher in 1915 and commercialized phage therapy began in the U.S. in the 1940’s through Eli Lilly and Company. Right about then antibiotics came along and Western scientists just never seemed to explore the therapy further.
However, with too few new solutions being offered and the standard drug model not working effectively to combat the situation, McBride believes his company can put phage therapy back at the forefront.
Already Felix has tested its solution on an initial group of 10 people to demonstrate its approach.
Felix researcher helping cystic fibrosis patient Ella Balasa through phage therapy
“We can develop therapies in less time and for less money than traditional antibiotics because we are targeting orphan indications and we already know our therapy can work in humans,” McBride told TechCrunch . “We argue that our approach, which re-sensitizes bacteria to traditional antibiotics could be a first line therapy.”
Felix plans to deploy its treatment in those suffering from cystic fibrosis first as there is no cure for this disease, which tends to require a near constant stream of antibiotics to combat lung infections.
The next step will be to conduct a small clinical trial involving 30 people, then, as the scientific research and development model tends to go, a larger human trial before seeking FDA approval. But McBride hopes his viral solution will prove itself out in time to help the coming onslaught of antibiotic resistance.
“We know the antibiotic resistant challenge is large now and is only going to get worse,” McBride said. “We have an elegant technological solution to this challenge and we know our treatment can work. We want to contribute to a future in which these infections do not kill more than 10 million people a year, a future we can get excited about.”
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The 20 best startups from Y Combinator’s W20 Demo Day
With world events overtaking the tech world’s preferences to meet for coffees and convene at events, Y Combinator skipped its famous two-day live Demo event and went for a radical experiment: no demos at all, but instead a long list of the nearly 200 startups in its Winter 2020 batch, with links to their sites and one-page slides. We’ve done the legwork for you in giving you a full rundown of who does what, and we have also come together on a group video chat on Zoom to talk through our takeaways of the format this year (missed it? here’s the recording). Now, in no particular order, here is our shortlist of some of our overall favorites.
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Listen to the TechCrunch staff’s YC Demo Day wrap-up call here
It’s been a bonkers week in the world, with markets gyrating, companies fretting, investors tweeting and founders re-cutting their 2020 forecasts. But for one collection of startups, the past few days weren’t about work crises or the latest Slack share price. Instead, for Y Combinator’s Winter batch, it was Demo Day week.
TechCrunch has covered Y Combinator companies since time immemorial. And we’ve been present throughout a number of format changes over the years. We’ve been around for things like the old single-day events in the South Bay computer history museum, and we’ve been around for the SF era. Hell, we were there for the two-stage concept.
But this year’s Demo Day brought with it something altogether new: No in-person pitches and demos. Yep, in response to COVID-19, Y Combinator made its demo day virtual, even scooting up its presentations by a full week. Obviously we tuned in en masse, writing a host of posts about the presenting companies (read them here, here, here and here). We also caught up with CEO of Y Combinator, Michael Seibel, to here his take on what’s ahead for the accelerator.
Given the scale of change, however, we weren’t content with just those entries. So, we gathered the TechCrunch crew, hopped on a Zoom, invited in our friends until our Zoom account maxed out (we didn’t know that that was a thing; more capacity coming) to chat over observations and the most interesting startups. We didn’t even miss the usual slew of Y Combinator live tweets — for the most part.
Hit the jump and we’ve got the recording for you. And see which companies the TechCrunch staff liked the most.
The Chat
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Join TC tomorrow at 9 am PT for a chat about the latest YC startup batch
Hello TechCrunch friends and family, tomorrow morning at 9 am Pacific Time we’re gathering on Zoom for an in-depth chat about our favorite startups from the latest Y Combinator Demo Day. This year’s installment of the twice-yearly startup event happened yesterday, a week early and online only.
Like many other things, Demo Day was adapted to a new format in the face of COVID-19 disruptions. Despite that, TechCrunch wrote a host of posts on the companies that presented (you can see our notes here), dug into a number of the startups individually (here and here, for example), and sat down with Y Combinator’s CEO for an interview.
We’re wrapping all of that with a group chat about the entire affair. We’d host this from the office in more regular years, but, it’s 2020, and so we’re all gathering on Zoom which means that everyone is invited to listen in.
Here are the details:
- What? TechCrunch team chat about YC 2020 and all the coolest companies
- When? 9 am Pacific Time
- How long? About 30 minutes, give or take
- Where? Here, on Zoom
- Should I not mute myself and annoy everyone tuned in? No, please mute yourself
We’re recording the chat, and plan to make it available to Extra Crunch subscribers shortly after we’re done. But the main call is open to everyone, so add it to your calendar and we’ll see you there.
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All the companies from Y Combinator’s W20 Demo Day, Part IV: Healthcare, Biotech, Fintech and Nonprofits
Y Combinator’s Demo Day was a bit different this time around.
As concerns grew over the spread of COVID-19, Y Combinator shifted the event format away from the two-day gathering in San Francisco we’ve gotten used to, instead opting to have its entire class debut to invited investors and media via YC’s Demo Day website.
In a bit of a surprise twist, YC also moved Demo Day forward one week citing accelerated pacing from investors. Alas, this meant switching up its plan for each company to have a recorded pitch on the Demo Day website; instead, each company pitched via slides, a few paragraphs outlining what they’re doing and the traction they’re seeing, and team bios. It’s unclear so far how this new format — in combination with the rapidly evolving investment climate — will impact this class.
As we do with each class, we’ve collected our notes on each company based on information gathered from their pitches, websites and, in some cases, our earlier coverage of them.
To make things a bit easier to read, we’ve split things up by category rather than have it be one huge wall of text. These are the healthcare, biotech, fintech and nonprofit companies. You can find the other categories (such as B2B, consumer and robotics) here.
Healthcare and Biotech
Simple Stripes: Aims to make glucose testing cheaper and more accessible by making strips that can be read by any smartphone camera, rather than requiring a dedicated glucose meter. The company says it expects to submit its strips for FDA approval in June.
nplex biosciences: A faster, cheaper way to do the protein panels required in the development of new medications. The company says it has over $4 million in letters-of-intent in the works, including one from a major pharma company.
Healthlane: An app meant to help users in Africa communicate with their doctors, make appointments and track lab results. The company says it has already reached profitability, with a retention rate of 98%.
Breathe Well-being: A 16-week program meant to help users in India with chronic conditions (such as diabetes) in their efforts to lose weight. The company offers a one-on-one diabetes coach who helps the user with tracking things like weight/meals/activity and trains them in cognitive behavioral therapy techniques meant to reduce stress. Currently seeing an $11.2K MRR.
Dropprint Genomics: “Single cell genomics” software meant to reduce the time/financial cost of analyzing individual cell activity to enable better drug discovery. They’ve signed over $1 million in LOIs in two months.
Newman’s: A digital health clinic for men in Indonesia. They’re focusing on problems that are often seen as either embarrassing (hair loss, erectile dysfunction) or are often abandoned (quitting smoking) by making doctor visits easier, cheaper and more private by way of remote consultation. Find our previous coverage of Newman’s here.
Loop Health: Loop Health says that most health insurance in India covers “only hospital stays, not doctor visits.” They’re looking to improve this by offering unlimited access to their designated Loop Health clinics, along with app-based telemedicine.
Synapsica Healthcare: An “AI reporting assistant.” Currently focusing on spinal MRIs, the company says it saves radiologists 80% of their reporting time by automatically annotating measurements and characterizing disc degeneration. The company says it’s currently in a $100K pilot program with a radiology practice tapped by 250 chiropractic clinics.
Volumetric: Volumetric makes 3D bioprinters that create vascularized human tissue. Founded by two PhDs, Volumetric sells its photoactive tissue to pharmaceutical companies and scientists. It’s using the proceeds to move toward building bioprinters and bioinks that can generate functional tissue and even organs. Find our previous coverage of Volumetric here.
Ophelia: Ophelia replaces rehab with telemedicine for America’s 3 million opioid addicts. It lets patients do teleconferenced doctor visits, get prescribed and delivered medications like Buprenorphine and Naloxone, and access therapy without the stigma. The founder started the company after a longtime girlfriend died from opioid addiction, and Ophelia has now treated 40 patients.
Lilia: Claiming that “in the future, women will freeze their eggs upon graduation,” Lilia is an egg-freezing concierge service. The startup charges $500 for concierge, and gets another $500 when somebody is placed in a clinic. Lilia says its total addressable market is $33 billion.
Equator Therapeutics: Equator Therapeutics is developing a drug to help users burn calories without exercise. Founded by a duo of PhDs and a data scientist who worked at a company developing an anti-aging drug, Equator Therapeutics is targeting people dealing with obesity and type 2 diabetes.
Altay Therapeutics: Located inside the Bayer Collaborator in San Francisco, Altay Therapeutics has developed small molecule therapies that block disease-causing DNA-binding proteins (or transcriptional regulators). The company’s initial therapies are focused on arthritis, fibrosis, ulcerative colitis and liver cancer.
Tambua Health: Tambua Health uses an “acoustic” stethoscope and proprietary software to provide advanced imaging for lung imaging without the radiation of an x-ray.
Abalone Bio: Founded by serial life sciences entrepreneurs, Abalone Bio is using libraries of yeast cells expressing billions of antibody variants to grow specific antibodies that can activate or inhibit a drug target. Using gene sequencing, machine learning and synthetic biology, the company makes recombinant protein versions of its antibodies and confirms their efficacy in human cell assays. The company’s initial targets are drugs for pain, inflammatory diseases, rare cancer and rare kidney disease.
Felix Biotechnology: Founded by the famous Yale University researcher Paul Turner, Felix Biotechnologies is developing treatments to address antibiotic-resistant strains of bacteria and fungi. These pathogens cause more than 2.8 million infections and 35,000 deaths in the United States alone each year, according to the company. On average, someone in the U.S. dies from an antibiotic-resistant infection every 15 minutes. Researchers have warned that more people will die from antibiotic resistance than from cancer by the year 2050.
Genecis Bioindustries: Genecis Bioindustries is turning food waste into compostable plastics. Find our previous coverage on Genecis here.
Candid Health: Candid Health has developed automated billing software for the healthcare industry that follows up with insurance companies and automatically appeals denied claims. It takes a 5% cut of each payment.
Ochre Bio: Ochre says that most donated livers are discarded — despite there being a shortage — due to them containing too much fat for a successful transplant. They’re aiming to “rejuvenate livers outside the body” by finding ways to treat them prior to transplant.
Fintech
Facio: Brazil has a banking problem. An oligarchy of five banks manage the Brazilian market, and they’re slow, have terrible customer service, high APR and don’t serve SMBs. Facio wants to keep workers from falling victim to predatory debt and instead gain financial freedom with a low-priced payroll loan to employees. It integrates with the employer, deducting loans right from their payroll.
delt.ai: Delt.ai is a digital bank that handles payments, invoicing and corporate cards for poorly served SMEs and freelancers in Mexico. The startup is targeting the $50 billion+ market of business deposits in Latin America. Think of Delt.ai is a Brex or a Mercury, but focused on Latin America.
Nexu: Like many other personal financing operations in Latin America, car financing is an expensive, low-tech, arduous process. Nexu, a financing platform for Latin American car dealerships, uses dynamic credit scoring to give car buyers an approval with a turnaround of a few seconds. The founding team met as Wharton MBA candidates.
Fondeadora: Fondeadora is joining Mexico’s saturated fintech scene, with its alternative neobanking debit card. The company offers a fully mobile digital savings account run within its app. Fondeadora says it has 65,000 users and $6.5 million monthly transactions. Albo, another Mexico-focused debit card, currently owns the market share with 200,000 monthly active customers who are spending and making transactions in its platform and $26 million in capital raised. But the banking problem in Mexico is big enough that multiple startups can thrive. Out of the 130 million population of Mexico, 45% are underbanked, meaning they lack deep financial products designed to help them compound wealth through lending and savings features.
Jenfi: Loans money to small businesses in Asia — typically about $10,000 to $100,000 — based on the business’ revenue. We wrote about Jenfi previously here.
yBANQ: A collections and reconciliation system for large B2B companies in India. The company says it has found 18 customers since launching in late January, reaching a GMV of around $18K.
ZeFi: A savings account that converts USD deposits to/from “stablecoin” cryptocurrencies behind the scenes, with ZeFi lending these funds out to borrowers to gain interest.
Grain: Grain hooks your existing debit card to a “responsible” amount of credit (currently capped at $500, and based on your income/cash low), hopefully helping those with minimal/bad credit build up their credit report over time. In the three months since launch, the company says it has signed up 1,000 customers, and expects to make around $80 per customer per year.
CrowdForce: Lets local merchants in Africa act as bank branches, serving as an intermediary on transactions when a bank is too far away. The company says it made $70K in net revenue last month, making an average of $20 per year per customer.
Stark Bank: A banking API to handle B2B transactions for tech companies in Brazil. A little over a year after launch, the company says it’s seeing $12 million in monthly gross volume.
Bamboo: An online brokerage for high-wealth individuals in Africa to buy securities from around the world. The company says it already has over 2,100 investors who have traded over $1.6 million on the platform since launching roughly five months ago, currently accounting for over $10,000 in monthly revenue.
Swipe: Pitching itself as “Brex for Africa,” Swipe gives African SMBs a credit card to help cover payroll and expenses. They onboard businesses by providing them with free expensing/billing tools, then offer credit accordingly. The company says it’s currently working with 30 companies, with $200K in credit deployed.
goDutch: A payments card for splitting costs amongst groups that often share bills, such as roommates. Focusing on India. Charges are put onto one card and deducted from each group member’s account automatically.
Paymobil: Uses stablecoin cryptocurrencies to transfer money across the globe through a Venmo-style app. The founder, Daniel Nordh, notes that he previously led consumer design at Coinbase.
Karat: Karat offers banking, loans and credit cards to influencers. By using data on their popularity to manage risk, Karat has achieved 40% APR on its loans with an average repayment time of 45 days. Thanks to its founders’ experience building influencer tools at Instagram and structuring debt at Goldman Sachs, it’s already signing up stars with over 10 million followers.
Homestead: Homestead helps home owners convert their garages into rental properties at no upfront cost. Homestead pays for all the construction, tenant search and management, and then splits the rent income with the home owner. A new California law allows the state’s 8 million garages to be rented out as living spaces, creating an enormous market opportunity. Homestead’s founders met at MIT’s graduate school of architecture and city planning, and the startup has already done $1 million in sales.
Benepass: Benepass offers a benefits card for startups and small businesses. Using the Benepass debit card, employees can pay for tax-advantaged benefits and wellness perks like flexible spending accounts, childcare, commuting, fitness and education while an app tracks their buying. Free for employers, Benepass has a 6% take rate but can save thousands on income and payroll taxes. With startups desperate to compete with tech giants for top talent, Benepass could ensure employees feel supported.
GAS POS: U.S. gas station owners are racing to upgrade outside pumps with EMV technology, a global standard for credit cards equipped with computer chips. GAS POS was founded to deliver a modern point-of-sale system that will help North America’s 180,000 gas stations comply with EMV and make transactions more secure. The company has several sources of revenue, a 3% fee on processed payments, SaaS free for equipment and an offer to customers to provide next-day funding.
YearEnd: YearEnd is building tax software for the paper rich, helping startup employees file their taxes while optimizing for their equity. The startup charges $330 per year for individual users and is hoping to sell to businesses that can add YearEnd as an employee benefit.
GIGI Benefits: India’s GIGI Benefits is looking to be the benefits provider for the nation’s gig economy workers. The business takes a page from companies like last year’s hottest Y Combinator startup, Catch, or the venture-backed Trupo, to provide things like health insurance and retirement investment accounts to gig economy workers.
Easyplan: Easyplan is the Qapital or Digit for India, allowing users to seamlessly save money for certain specific goals.
Haven: Haven is a next-gen platform for servicing home mortgages, offering more modern customer interfaces, better payment modeling for lenders and more.
WorkPay: WorkPay describes itself as “Gusto for Africa” — next-gen payroll and related services targeting small and medium businesses in the region.
Spenny: Spenny is a savings tool for Indian consumers that lets customers start banking money away by rounding up their purchases.
Kosh: Kosh is an algorithmically enhanced savings and investment platform for India, allowing those with good credit to effectively vouch for friends with limited credit to help them borrow.
Nonprofit
Potential: Potential is a nonprofit that wants to connect the formerly incarcerated to jobs and resources. The company works with detention centers and employment organizations to make a more friendly hiring environment.
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