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Y Combinator’s new batch features its largest group of Indian startups
Y Combinator’s latest batch — W21 — features 350 startups from 41 nations. Fifty percent of the firms, the highest percentage to date, in the new batch are based outside of the United States.
India is the second-largest demographic represented in the new batch. The world’s second-largest internet market has delivered 43 startups in the new batch, another record figure in the history of the storied venture firm. (For comparison, the W20 batch had 25 Indian startups, up from 14 in S20, 12 each in S19 and W19 and one each in W16, S15 and W15.)
“YC going remote has helped make YC more attractive to companies at different stages and far away geographies. For companies in India, founders no longer have to spend three months away from their customers or teams. Covid has also taught us that building a program that is remote and more software based makes YC more accessible to founders around the globe,” the firm said in a statement to TechCrunch.
“When it comes to choosing founders in India, we accept them based on the same criteria we judge companies from anywhere else. Founders must be able to communicate their local context to investors. That is an important skill.”
Here’s a list of startups, in no particular order, from India that have made it to YC W21, with some context — wherever possible — on what they are attempting to build (several have elected to stay off the record).
QuestBook, from CreatorOS, is an app for professionals to teach in bite-sized courses using chat and a mobile-first experience. We wrote about CreatorOS last year.
Leap Club is attempting to build a Good Eggs for India. Leap Club users can order fresh and organic groceries sourced from local farms through the startup’s website or through WhatsApp. The startup says it delivers the item to customers within 12 hours of harvesting. Leap Club is already garnering over $14,000 in monthly revenue.
CashBook is building a cash account app for small businesses in India. There are over 60 million small businesses in the country, nearly all of which currently rely on traditional ways — pen and paper — for bookkeeping. The startup launched its app just six months ago and has already amassed 200,000 monthly active users. In the month of February, CashBook logged cash transactions of $511 million.
GimBooks is attempting to solve a similar problem as CashBook, though from a different angle. The startup says it offers industry-based invoicing and bookkeeping with integrated banking and payments. Its app has been downloaded more than 1.4 million times, amassed over 11,000 paying customers and clocked revenues of over $450,000.
BusinessOnBot is banking on the popularity of WhatsApp in India, where the Facebook-owned app has amassed over 450 million monthly active users. BusinessOnBot says it is building Shopify on WhatsApp for direct-to-consumer brands and small and medium-sized businesses, helping them acquire users and automate sales.
ZOKO is helping businesses do sales, marketing and customer support on WhatsApp.
Prescribe is a Shopify for hospitals. Its platform is aimed at helping doctor’s offices run their business online. Users can book appointments, chat with the doctor, pay and refer friends on WhatsApp.
Chatwoot is an open-source customer engagement suite alternative to Intercom and Zendesk. Over 1,000 companies are already using Chatwoot and it’s clocking $32,000 in ARR from six customers.
Weekday is helping companies hire engineers who are crowdsourced by their network of scouts. The startup says it has found a way to solve the biggest problem with referrals — that it doesn’t scale.
Fountain9 helps food brands and retailers reduce food wastage. According to some estimates, over $260 billion worth of food is wasted every year due to mismanaged inventory.
Dyte is attempting to build a Stripe for live video calls. The startup says a firm can integrate its branded, configurable and programmable video calling service within 10 minutes using the Dyte SDK.
YourQuote has built a writing platform, with over 100 million posts. It has over 250,000 daily active users. The startup clocked revenues of $200,000 last year and is profitable.
Fifthtry is building a GitHub for product documentation. The tool blocks code changes until documentation has been approved. It has piloted its tool with three companies, all of which have over 100 developers. The startup plans to launch its tool publicly next month.
Voosh is building an OYO for restaurants and dark kitchens in India, helping them improve their economics using tech.
Kodo is building a Brex for India, helping Indian startups and small businesses secure corporate credit cards. (Banks and other credit card companies are still not addressing this opportunity. The problem Brex solved in the U.S. is even acute in India, Deepti Sanghi, co-founder and chief executive of Kodo, said in the presentation.
Krab provides instant loans for trucking companies in India. India’s logistics market, despite being valued at $160 billion, remains one of the most inefficient sectors that continues to drag the economy. In recent years, a handful of startups have started to explore ways to work with trucking companies.
Bueno Finance says it wants to help the next billion users in India get access to financial services. It says it wants to solve for short-term cash needs of customers by using digital credit card over UPI. It was to build a Chime for India, and has amassed 70,000 customers.
Betterhalf is building a Match.com for 100 million Indians. It says it is generating $75,000 in monthly revenues, a figure that is growing 30% every month.
Pensil is helping teachers who use YouTube monetize their courses. “YouTube is the largest education platform in India — but it’s not built for teachers,” said Surender Singh, co-founder of Pensil, at the presentation on Tuesday. The startup has built tools to allow teachers to create content, facilitate discussions and collect payments.
AcadPal operates an eponymous app for India’s 10 million teachers to share homework with a tap. The startup is attempting to target a $1.4 billion market, which consists of over 400,000 private schools.
Pragmatic Leaders is attempting to build a platform to provide cost-effective alternative to an MBA. It is already clocking a monthly revenue of $112,000 and is cash-flow positive.
Splitsub is addressing a problem that tens of millions of users in India face — subscription fatigue. It says it has built a Pinduoduo for online subscriptions in India, allowing group buying and sharing of online subscriptions for services such as Netflix and Spotify.
Zingbus has built a platform for bus travel between Indian cities. (Several startups in India are helping users get cabs, three-wheelers autos and two-wheelers bikes. Buses have remained largely untapped.)
Tilt is building a docked bike-sharing platform for Indian campuses. The startup, which has generated about $20,000 in revenues this month so far, says it has been profitable for the past 18 months.
FanPlay is a platform for social media influencers, helping them monetize by playing mobile games with their fans and followers.
(Also read: Why Y Combinator Went 8,725 Miles Away From Mountain View To Find The Next Big Startup)
In India only a fraction of the nation’s 1.3 billion people currently have access to insurance and some analysts say that digital firms could prove crucial in bringing these services to the masses. According to rating agency ICRA, insurance products had reached less than 3% of the population as of 2017.
An average Indian makes about $2,100 a year, according to the World Bank. ICRA estimated that of those Indians who had purchased an insurance product, they were spending less than $50 on it in 2017.
Three startups in the current batch are planning to disrupt this market, which is largely commanded by state and bank-backed insurers.
GroMo is an app for independent agents to sell insurance in India. Most insurance policies in India are sold by agents. The startup says it is already generating monthly revenues of over $200,000.
Bimaplan is attempting to replace the agents with an app and reach users by a referral network. The app launched last month and has already sold 700 policies this month.
BimaPe helps users better understand their policies, and make informed decisions about whether those policies are right for them. The startup, leveraging New Delhi’s new regulations, is using a government issued ID card to fetch insurance policies.
Codingal is an online, after-school program for K-12 students in India to learn computer science. There are roughly 270 million K-12 students in the country.
Unschool provides professional education for college students in India. The founders say, “As former leaders in youth-run organisations with 3,000 members and edtech startups in India, we saw how colleges are not preparing students for the real world.”
Flux Auto builds self-driving kits for trucks.
SigNoz is an open-source alternative to DataDog, a $30 billion company, helping developers find and solve issues in their software deployed on cloud. The startup says recent laws such as GDPR and CPRA have helped drive adoption of SigNoz.
Pibit.ai are APIs to turn unstructured documents into structured data.
Invoid creates identity workflows in India. It’s tapping into a huge market opportunity: About 11 billion know-your-customers authentication is conduced by firms in India each year.
Redcliffe Lifesciences performs genetic testing and IVF treatments across India. Its revenue in March has topped $600,000.
Veera Health is an online clinic that treats Polycystic Ovary Syndrome (PCOS), a lifelong condition that affects 10-20% women in India. The startup says it launched 12 weeks ago, and 85% members have reported feeling “in control” of their PCOS after 1 month.
Snazzy is SmileDirectClub for India. The startup says it sells clear aligners that are 70% cheaper than those sold by dentists.
BeWell Digital is building the operating system for India’s 1.5 million hospitals, labs, clinics and pharmacies by starting with insurance regulatory compliance.
Triomics is operating a SaaS platform for end-to-end automation of clinical trials.
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Nigeria’s Termii raises $1.4M seed led by Future Africa and Kepple Africa Ventures
Ideally, it is expected of every business to reach its customers effectively. However, that’s not the case, as limiting factors that hinder proper digital communication come into play at different growth stages. Termii, a Nigerian communications platform-as-a-service startup that solves this problem for African businesses, announced today that it has closed a $1.4 million seed round.
The round was co-led by African early-stage VC firm Future Africa and Japanese but Africa-focused VC Kepple Africa Ventures. Other investors include Acuity Ventures, Aidi Ventures, Assembly Capital, Kairos Angels, Nama Ventures, RallyCap Ventures and Remapped Ventures.
Angel investors like Ham Serunjogi, co-founder and CEO of Chipper Cash; Josh Jones, former co-founder and CTO, Dreamhost; and Tayo Oviosu, co-founder and CEO of Paga also participated.
Gbolade Emmanuel and Ayomide Awe launched Termii after Emmanuel’s experience as a digital marketer helped him recognize the need for businesses to have exceptional communication channels. The CEO consulted for these companies and leveraged emails to retain customers, but as he found out that this process was lethargic, he sought other channels as a replacement.
“That got me to start thinking about multichannel messaging. What it meant was that we needed to find how to allow companies to use WhatsApp, voice, SMS effectively,” he said to TechCrunch. “And we had to make the process simple because in the African market, you can’t do complex stuff. You have to be as simple as possible.”
In 2017, the company officially launched and subsequently secured investment from Lagos-based VC Microtraction. Emmanuel says the company found product-market fit two years later after collating enough data from companies in different industries to understand what they really wanted.
Termii found out that in addition to assisting businesses to retain customers, there was a clear need to verify, authenticate and engage them.
“Many of these businesses we started engaging said they required tools to effectively communicate and verify customers because they were losing money at those points. For us, we saw it was a bigger problem,” Emmanuel added.
After making some tweaks, the team began to see an increase in customer numbers, especially amongst fintech startups. Positioning itself in the fast-moving space, Termii created an API-based communication infrastructure that caters to more than 500 fintech startups across the continent. That’s not all. More than 1,000 businesses and developers are also using Termii’s API.
Some of these businesses include uLesson, Yassir, Helium Health, PiggyVest, Bankly, Paga and TeamApt.
Playing in a $3.6 billion B2C communications market estimated to grow 6% annually, Termii runs a B2B2C model. But how does it make money? While a subscription-based model would’ve made sense, the two years spent by the company trying to find PMF made them think otherwise.
So the company leverages a virtual wallet system tied to a bank account and customers can make payments to the platform using mobile money, bank transfer and credit cards. The startup charges these wallets on a per-message basis. It also does the same on every successful customer verification made toward customers’ contacts.
The Termii team. Image Credits: Termii
In early 2020, Termii started seeing immense progress and this coincided with their acceptance into Y Combinator. The growth continued throughout the year, growing its messaging transactions by 1,000% and experiencing a 400% increase in its ARR.
Spilling into this year, Emmanuel says the company’s revenue is growing 60% month-on-month as a result of the surge in online financial transactions, which to date makes up for 68% of the company’s total messaging transactions.
The seed investment that is coming a year after Termii graduated from YC will be used for expansion and launch more messaging offerings across Africa.
Emmanuel says the company has its sights set on North Africa with a physical presence in Algeria for the expansion. The reason lies behind the fact that in this quarter, Nigeria has accounted for 76% of the company’s messaging transactions, while Algeria currently accounts for 15%.
With this new fundraising, the company plans to tap into the wealth of experience from some of its new investors like Oviosu and Serunjogi, who have also taken local companies into expansion phases.
Termii’s round is also noteworthy because it strays away from the usual fintech, mobility, agritech and cleantech sectors that investors typically notice. In fact, there are only a handful of venture-backed communications platform-as-a-service companies on the continent. A notable example is Kenya’s Africa Talking. It might be a stretch to say we might see more funding activity from this segment, but one thing is apparent — investors are willing to place bets on less popular sectors.
Another highlight of Termii’s investment is that while foreign investors continue to dominate rounds in African tech startups, local and Africa-focused firms are beginning to step up by leading some, which is a good sign for the bubbling ecosystem.
This round is also a big step for Future Africa. According to publicly available information, the firm is leading a million-dollar round for the first time since officially launching last year. This achievement is a continuation of its work over the past three quarters, having invested in more than 10 African startups in the last three quarters and 30 startups in general.
Kepple Africa Ventures, the co-lead, is also an active investor and can be argued to be the most early-stage VC firm on the continent — in terms of the number of deals made. So far, the firm has invested in 79 companies across 11 countries.
Speaking on the investment for Kepple Africa, Satoshi Shinada, a partner at the firm, said, “Fragmented and unstable communication channels are one of the biggest challenges for the digitization of businesses in Africa. Emmanuel has proven that with his visionary goals and solid implementation of iterations on the ground, his team is unparalleled to build an innovative solution in this space.”
Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product-market fit, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included for audience questions and discussion. Use code “TCARTICLE” at checkout to get 20% off tickets right here.
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Pregame Y Combinator with Equity
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
This is our Wednesday show, where we niche down and focus on a single topic, or theme. This is our sweet spot: going beyond definitions and into the dirty and deep impact of how a phenomenon could impact startups and tech. We are hoping to explore more than answer, and debate more than agree.
This week we’re riffing on the impending Y Combinator Demo Day class, all hailing from the Winter 2021 cohort. As we stated on the show, we’re not saying that these are the only startups worth looking at. They’re simply the startups from the batch that TechCrunch has already covered, as well as some crowdsourced favorites.
Here’s a brief rundown of the show, bucketed by market choice, loosely:
- Startups serving startups: The largest group of startups in our rundown, we chatted about BrioHR, which is building HR software for Southeast Asia (TechCrunch coverage here); Firstbase, which is building a remote-work onboarding service (TechCrunch coverage here); ContentFly, which wants to use a hybrid of computer and human intelligence to provide writing services; Runway, which wants to help companies better manage app rollouts (TechCrunch coverage here); and Mono, which is building a Plaid for Africa (TechCrunch coverage here).
- Marketplaces: Here we found two companies to discuss, the first being Providence’s own Pangea, and Queenly. Pangea (TechCrunch coverage here) is building a freelance marketplace for digitally savvy college kids and small businesses, while Queenly is a marketplace for formalwear (TechCrunch coverage here).
- Space: Alex demanded that we include Albedo, which is aiming to launch a satellite constellation to improve imaging of the planet using low-orbit flight paths.
- Biotech: And then there were two biotech companies. The first, Pipe|Bio does big data management for drug development, and Nuntius Therapeutics, which is working on delivering “large genetic payloads into the correct cells.” Which sounds cool.
The actual Demo Day is happening next Tuesday, so TechCrunch and Extra Crunch will be all over day-of coverage as per usual. Talk then!
Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday morning at 7:00 a.m. PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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Superpowered lets you see your schedule and join meetings from the Mac menu bar
A newly launched Mac app called Superpowered aims to make it easier to stay on top of all your Zoom calls and Google Meets, without having to scramble to find the meeting link in your inbox or calendar app at the last minute. Instead of relying on calendar reminders, Superpowered offers a notification inbox for the Mac menu bar that alerts you to online meetings just before they start, which you can then join with a click of a button.
To use Superpowered, you first download the app then authorize it to access to your Google Calendar. The app currently works with any Google account, including G Suite, as well as your subscribed calendars.
Once connected, Superpowered pulls all your events into the menu bar, which you can view at any time throughout the day with a click or by using the keyboard shortcut Command+Y.
When you have a meeting coming up, Superpowered will display a drop-down notification to alert you, or you can opt for a more subtle halo effect instead to have it get your attention. You can also configure other preferences — like whether you want a chime to sound, how far in advance you want to be alerted, whether you want a meeting reminder as text to appear in the menu bar ahead of the meeting and so on.
When it’s time for the meeting, all you have to do is click the button it displays to join your Zoom call or Google Meet. The solution is simple, but effective. The startup plans to add support for more integrations going forward, including Microsoft Teams, Cisco WebEx and others.
The idea for the app comes from four computer science and software engineering students from the University of Waterloo, who previously interned at tech companies like Google, Facebook, Asana and Spotify.
Team photo. Image Credits: Superpowered
Wanting to build a startup of their own, the team applied to the accelerator Y Combinator with an idea to build a lecture platform for professors. But they soon faced issues in keeping up with their own calendar appointments as they began to conduct user research interviews.
“We were struggling to keep up with each other’s calendars and balance all these meetings throughout the day,” explains Superpowered co-founder Jordan Dearsley, who built the service alongside teammates Nikhil Gupta, Ibrahim Irfan and Nick Yang. “We would be at lunch and be like, ‘Oh shoot, we have a meeting now — I have to run!’ or just completely miss it altogether,” he says.
Irfan had the idea to just put a button in the Mac menu bar to make it easier to join Zoom meetings and soon the team pivoted to work on Superpowered instead.
The product itself is very new. Development work began roughly two months ago and Superpowered opened up to users just last month — a quick pace that Dearsley says was possible because three of the four team members are engineers, and the other, Yang, is the designer.
Image Credits: Superpowered
Although it’s a paid product offered at $10 per month, Superpowered already has hundreds of users who are interacting with the app, on average, 10 times per day. Busier users, like product managers, are clicking on Superpowered as many as 20 to 40 times per day — an indication that it’s found a place in users’ workflows. In the month since its launch, the app has connected users with over 10,000 online meetings, the company says.
Superpowered is not the first to add calendar appointments to the Mac’s menu bar. It competes with a range of products, like MeetingBar, Meeter, Next Meeting and others. But users have been responding to Superpowered’s sleek, clean design.
The company also has a vision for the product’s future that extends beyond meetings. After solving this particular pain point, Superpowered plans to broaden its scope to fix other annoyances for knowledge workers — like Slack notifications, for example.
“It’s really annoying to be pinged all the time while I’m coding … and I don’t know if it’s something that’s worth seeing because Slack doesn’t really give me those controls or ability to peek,” explains Dearsley. Meanwhile, Mac’s built-in Notification Center isn’t smart enough to show you just those items that you really need to know about.
To address this, the team is now working on a Slack integration that will let you quickly check your messages and reply without having to launch the Slack app. Further down the road, the team wants to integrate support for other platforms — like Google Docs, JIRA and GitHub — which would all be pulled into Superpowered’s universal notification inbox.
For the time being, Superpowered is $10 per month for Mac users or $8 per month for those who sign up with a team. Annual pricing is not yet available.
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Arist adds $2M to its seed round to grow its SMS-based training service
This morning Arist, a startup that sells software allowing other organizations to offer SMS-based training to staff, announced that it has extended its seed round to $3.9 million after adding $2 million to its prior raise.
TechCrunch has covered the company modestly before this seed-extension, noting that it was part of the CRV-backed Liftoff List, and reporting on some of its business details when it took part in a recent Y Combinator demo day.
Something that stood out in our notes on the company when it presented at the accelerator’s graduation event was its economics, with our piece noting that the startup “already [has] several big ticket clients and [says it] will soon be profitable.” Profitable is just not a word TechCrunch hears often when it comes to early-stage, high-growth companies.
So, when the company picked up more capital, we picked up the phone. TechCrunch spoke with the company’s founding team, including Maxine Anderson, the company’s current COO; Ryan Laverty, its president; and Michael Ioffe, its CEO, about its latest round.
According to the trio, Arist raised its initial $1.9 million around the time it left Y Combinator, a round that was led by Craft Ventures at a $15 million valuation. Following that early investment, the company’s business with large clients performed well, leading to it closing $2 million more last December. The founders said that the new funds were raised at a higher price-point than its previous seed tranche.
The second deal was led by Global Founders Capital.
The company’s enterprise adoption makes sense, as all large companies have regular training requirements for their workers; and as anyone who has worked for a megacorp knows, current training, while improved in recent years, is far from perfect. Arist is a bet that lots of corporate training — and the training that emanates from governments, nonprofits and the like — can be sliced into small pieces and ingested via text-message.
For that the company charges around $1,000 per month, minimum.
Arist did catch something of a COVID wave, with its founding team telling TechCrunch that pitching its service to large companies got easier after the pandemic hit. Many concerns better realized how busy their staff was when they moved to working from home, the trio explained, and with some folks suffering from limited internet connectivity, text-based training helped pick up slack.
We were also curious about how the startup onboards customers to the somewhat new text-based learning world; is there a steep learning curve to be managed? As it turns out, the startup helps new customers build their first course. And, in response to our question about the expense of that effort, the Arist crew said that they use freelancers for the task, keeping costs low.
Recently Arist has expanded its engineering staff, and plans to scale from around 11 people today to around 30 by the end of the year. And while Anderson, Laverty and Ioffe are based in Boston, they are hiring remotely. The startup serves global customers via a WhatsApp integration. So Arist should be able to scale its staff and customer base around the world effectively from birth. (This is the new normal, we reckon.)
What’s ahead? Arist wants to grow its revenues by 5x to 10x by the end of the year, hire, and might share if it wants to raise more capital around the end of the year.
Oh, and it partners with Twilio to some degree, though the group was coy on just what sort of discounts it may receive; the founding team merely noted that they liked the SMS giant and deferred further commentary.
All told, Arist is what we look for in an early-stage startup in terms of growth, vision and potential market scale — the startup thinks that 80% of training should be via SMS or Slack and Teams, the latter two of which are a hint about its product direction. But Arist feels a bit more mature financially than some of its peers, perhaps due to its price point. Regardless, we’ll check back in at the mid-point of the year and see how growth is ticking along at the company.
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Rent the Runway’s first iOS team launches Runway, an easier way to coordinate app releases
A team of mobile app engineers and designers from companies like Rent the Runway, ClassPass, Kickstarter and others, are now launching their own startup, Runway, to address the common pain points they experienced around the mobile app release cycle. With Runway, teams can connect their existing tools to keep track of the progress of an app’s release, automate many of the manual steps along the way and better facilitate communication among all those involved.
“Mobile app releases are exercises in herding cats, we often say. There’s a lot of moving pieces and a lot of fragmentation across tools,” explains Runway co-founder Gabriel Savit, who met his fellow co-founders — Isabel Barrera, David Filion, and Matt Varghese — when they all worked together as the first mobile app team at Rent the Runway.
“The result is a lot of overhead in terms of time spent and wasted, a lot of back and forth on Slack to make sure things are ready to ship,” he says.
Typically, interdisciplinary teams involving engineers, product, marketing, design, QA and more, will keep each other updated on the app’s progress using things like spreadsheets and other shared documents, in addition to Slack.
Meanwhile, the actual work taking place to prepare for the release is being managed with a variety of separate tools, like GitHub, JIRA, Trello, Bitrise, CircleCI and others.
Image Credits: Runway
Runway is designed to work as an integration layer across all the team’s tools. Using a simple OAuth authentication flow, the team connects whichever tools they use with Runway, then configure a few settings that allow Runway to understand their unique workflow — like what their branching strategy is, how they create release branches, how they tag releases and so on.
In other words, teams train Runway to understand how they operate — they don’t have to change their own processes or behavior to accommodate Runway.
Once set up, Runway reads the information from the various integration points, interprets it and takes action. Everyone on the team is able to log into Runway via its web interface and see exactly where they are in the release cycle and what still needs to be done.
“We’re forming this glue, this connective tissue between all of the moving pieces and the tools, and creating a true source of truth that everybody can refer to and sync or gather around. That really facilitates and improves the level of collaboration and getting people on the same page,” Savit says.
Image Credits: Runway
As the work continues, Runway helps to identify problems, like missing JIRA tags, for example. It then automatically backfills those tags. It can also help prevent other mistakes, like when the incorrect build is being selected for submission.
Another automation involves Slack communication. Because Runway understands who’s responsible for what, it can direct Slack notifications and updates to specific members of the team. This reduces the noise in the Slack channel and ensures that everyone knows what they’re meant to be working on.
Currently, Runway is focused on all the parts of the mobile app release cycle from kickoff to submission to the actual app store releases. On its near-term roadmap, it plans to expand its integrations to include connections to things like bug reporting and beta testing platforms. Longer term, the company wants to expand its workflow to include launching apps on other platforms, like desktop.
Image Credits: Runway
The startup is currently in pilot testing with a few early customers, including ClassPass, Kickstarter, Capsule and a few others. These customers, though not all yet paying clients, have already used the system in production for over 40 app release cycles.
The startup’s pricing will begin at $400 per app per month, which allows for unlimited release managers and unlimited apps, access to all integrations, and iOS and Android support, among other things. Custom pricing will be offered to those who want higher levels of customer support and consulting services.
The startup doesn’t have an exact ETA to when it will launch publicly as it’s working to onboard each customer and work closely with them to address their specific integration needs for now. Today, Runway supports integrations with the App Store, Google Play, GitHub, JIRA, Slack, Circle, fastlane, GitLab, Bitrise, Linear, Jenkins and others, but may add more integrations as customers require.
Runway’s team of four is mostly New York-based and is currently participating in Y Combinator’s Winter 2021 virtual program. The company hasn’t yet raised a seed round.
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Vendr raises huge $60M Series A as its SaaS-purchasing service scales
This morning Vendr announced a $60 million Series A round, a huge funding event led by Tiger Global, with participation from Y Combinator, Sound Ventures, Craft Ventures, F-Prime Capital and Garage Capital.
The outsized Series A comes after Vendr last raised $4 million in a mid-2020 seed round, with TechCrunch reporting that the company was profitable at the time. Vendr had raised just over $6 million total before this latest round.
TechCrunch had a few questions. First, how the company had managed to attract so much capital so quickly. According to an interview with Vendr CEO Ryan Neu, his startup grew just under 5x in 2020, and was cash flow-positive last year as well. The startup’s model of standing between SaaS buyers and sellers, speeding up transactions while lowering their cost, appears to have fit well into 2020’s twin trends of rising software reliance and a focus on cost control.
Second, how did the company manage to grow so much? Vendr charges its customers between 1% and 5% of their software spend that it manages, which can add up. Neu told TechCrunch that a somewhat standard 500-person company might spend $2 million to $3.5 million on software each year, which by our math would make that company worth no less than $20,000 to $35,000 in revenue for Vendr at 1% of spend. At Vendr’s midpoint 2.5%, those figures rise $50,000 to $87,500.
At those prices, Vendr can stack up annual revenue pretty quickly. But why would Vendr customers pay it to handle their software spend? Savings, effectively. So long as they save more than Vendr charges, they are coming out ahead. And as the startup claims that it can cut the time to buying, its own customers can reduce time spent on securing tooling.
Everyone wins, it seems, except for software sellers. After all, they are the ones losing a chance to get less-sophisticated buyers to pay more for their code, right? Neu said that his company’s model isn’t too bad for selling companies as they close deals much more quickly, at a higher rate of closure. That could save their sales team time, which might help balance the price differential.
Pressed on what Vendr might be able to do for the selling side of the software market given its present-day buyer focus, Neu declined to share any possible plans.
Returning to the round, why did Vendr raise the money at all if it was doing just fine sans new external funding? The company told TechCrunch that it has scaled its staff to 60 from 10 a year ago, and that it wanted a stronger balance sheet. That’s fine. We’d be hard-pressed to find the startup that wouldn’t take such a large check from Tiger, given the valuation gain the raise implies for Vendr, so there isn’t too much mystery to unpack.
A theme that TechCrunch has explored in recent weeks has been the huge depth of the software market. Given the TAM for bits and bytes, Vendr may be able to keep up the hypergrowth that its new round implies its investors will expect. Let’s see how 2021 winds up for the company.
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YC-backed Pangea discusses growth, fundraising ahead of demo day
Pangea, a marketplace startup that wants to connect college freelancers and companies in need of digital help, is seeing its growth rate accelerate as it races toward the impending Y Combinator demo day.
It’s traditional around this time that startups in the accelerator reach out to say hello. Provided that they are willing to chat growth metrics, we’re willing to listen.
Pangea, based in Providence, Rhode Island, is one such company. TechCrunch previously covered the company when it announced a $400,000 pre-seed round last April. Now most of the way through the YC accelerator, the company dished regarding its recent growth and the fact that it added more capital to its accounts late last year.
The Pangea team, from their shared house/office. Via the company.
On the growth side of the coin, Pangea CEO Adam Alpert told TechCrunch the company has grown its gross merchandise volume (GMV) sequentially by 35% in each of the last two months. That’s a steep pace of GMV expansion. And the growth is adding up to real numbers, with Pangea facilitating $50,000 in transactions between college freelancers and businesses in the last four weeks.
Alpert said that its year-ago number was around $3,000 or $4,000.
And the company has managed to expand its market take rate to around 25%, tinkering with how it charges for its service. The result is a model that might resonate with anyone familiar with Fiverr, and may help the company more rapidly expand its net revenue.
The company’s recent growth comes after it secured another $350,000 in November 2020 at a higher cap to its previously known pre-seed round. And, of course, it raised $125,000 from Y Combinator, funds that landed in its accounts this January.
Pangea is now active in 600 campuses, Alpert said. And it has found where its service is most in-demand, namely among emerging brands and smaller tech startups. Those firms often need the types of services that college kids are good at — social media, design, etc. — making them a good fit.
The company was somewhat coy on upcoming product news but was clear that it’s looking for investing partners as it works toward Series A scale. Let’s see how Pangea does in a few weeks.
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Bottomless closes $4.5M Series A to scale its subscription coffee business
As a devoted coffee drinker I was enthused by the idea of Bottomless. The Y Combinator-backed startup sends its users coffee as they run low so that they never run out of the Magic Juice of Life. What could be better?
Because life is somewhat funny, after signing up for its service the company reached out to share that it had raised a Series A. So I got on the phone with Liana Herrera, the company’s co-founder, to chat about the startup, which is part coffee-sourcing engine, part subscription/e-commerce play and part hardware effort.
So before we talk about its Series A, let’s work better to understand what Bottomless is building, and how it works.
What’s Bottomless?
Born from its founders’ issues ordering the right amount of Soylent when they actually needed it, and wondering why there wasn’t a better way to subscribe to goods consumed on a regular basis, Herrera uncovered the idea for Bottomless.
Today the product works by letting users pick the type of coffee they are interested in, be it caffeine level, price and the like. The company then provides customers with a small digital scale that they connect to their home internet. And then as users consume coffee that Bottomless sends them, placing the bag on the hardware in between uses, the scale notes how much is left and orders more before they run out.
A Bottomless scale, via the company as my kitchen lighting is bad.
You can set the sensitivity of the scale, asking it to either be ambitious in keeping you from running out of beans or ground coffee, or more relaxed. As I write to you today, I think that my third bag of decaf has arrived. It’s a neat system.
And from a business perspective, the Bottomless model has plusses. I honestly do not recall the price range of coffee that I picked, and do not know how much I am actually paying Bottomless at the moment. But I do know that having different types of coffee arrive at the house as I run low is pretty damn cool.
To make that happen, however, is not easy. The startup’s business is a little complex. Before and even after Bottomless went through Y Combinator back in 2019, the company hand-built its coffee-weighing scales. Herrera told TechCrunch that the old Silicon Valley saw that hardware is hard is in fact an understatement. After all the soldering she described during an interview, I believe her.
Still, after finishing the accelerator program the company managed to grow in 2019 by what Herrera said was around 10x. That customer expansion allowed the company to order bulk hardware from China in early 2020. After its first production run finished — a few thousand units — COVID-19 shut down that country’s supply chain. Happily for the startup, by the time COVID-19 had taken over America, the Chinese economy opened up and production could begin again.
Per the company, Bottomless scaled another 5-7x in 2020. An October 2020 CNN piece notes that the company had around 750 customers in late 2019, and some 6,000 by the time of publication. Herrera wants to massively expand that number, telling TechCrunch that she’d like to grow by 10x again this year, and that 5x expansion was the lower-end of her expectations.
Powering that growth are a host of coffee companies that Bottomless works with. Those companies handle roasting the beans and sending them to different Bottomless customers. So that no one reaches a zero-coffee state. And dies. Or whatever happens when one actually runs out of coffee.
The startup told TechCrunch that there are some 500 roasters on their wait list, implying that it will have the capacity to take on more customers this year.
Despite all the growth, the company still has some edges to refine. Setting up Wi-Fi on my scale wasn’t super-simple, for example. Herrera did note that her firm has a new scale coming out in the next three months. That could lower the difficulty barrier for new customers. Still, with 6,000 customers last October ordering three to four bags of coffee monthly, per Herrera’s estimate, the company had reached a comfortable seven-figure GMV run-rate before 2021 began.
For coffee roasters who may have seen their customer base slow during the pandemic, and consumers increasingly willing to dive into e-commerce, the company’s model could have long-term legs. Which brings us to the investors making that bet.
The round
Bottomless raised a $4.5 million Series A in January of 2021. It’s a smaller A than we tend to see in recent years, but Herrera said that her company has always been scrappy, which we take to mean that it has a history of being frugal. Patrick OShaughnessy led the round.
TechCrunch asked if the $4.5 million was a lot of money for the startup, as we didn’t have a clear picture at the time of its fundraising history. Herrera said that Bottomless has gotten to where it is today on just $2 million. So, the Series A is more than double all the money that the company as raised to date. It’s a lot of money, in other words.
Besides the new scale design, when asked about what the company intends to do with its funds, Herrera detailed the type of person she’s looking to hire — namely intellectually flexible folks who are informal, scrappy and very hack-y. More staff, in other words.
Let’s see how far Bottomless can get with its new check. Apparently I will be helping its KPIs for the foreseeable future as a customer.
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Airbyte raises $5.2M for its open-source data integration platform
Airbyte, an open-source data integration platform, today announced that it has raised a $5.2 million seed funding round led by Accel. Other investors include Y Combinator, 8VC, Segment co-founder Calvin French-Owen, former Cloudera GM Charles Zedlewski, LiveRamp and Safegraph CEO Auren Hoffman, Datavant CEO Travis May and Alain Rossmann, the president of Machinify.
The company was co-founded by Michel Tricot, the former director of engineering and head of integrations at LiverRamp and RideOS, and John Lafleur, a serial entrepreneur who focuses on developer tools and B2B services. The last startup he co-founded was Anaxi.
Image Credits: Airbyte
In its early days, the team was actually working on a slightly different project that focused on data connectivity for marketing companies. The founders were accepted into Y Combinator and built out their application, but once the COVID pandemic hit, a lot of the companies that had placed early bets on Airbyte’s original project faced budget freezes and layoffs.
“At that point, we decided to go into deeper data integration and that’s how we started the Airbyte project and product as we know it today,” Tricot explained.
Today’s Airbyte is geared toward data engineering, without the specific industry focus of its early incarnation, but it offers both a graphical UI for building connectors, as well as APIs for developers to hook into.
As Tricot noted, a lot of companies start out by building their own data connectors — and that tends to work alright at first. But the real complexity is in maintaining them. “You have zero control over how they behave,” he noted. “So either they’re going to fail, or they’re going to change something. The cost of data integration is in the maintenance.”
Even for a company that specializes in building these connectors, the complexity will quickly outpace its ability to keep up, so the team decided on building Airbyte as an open-source company. The team also argues that while there are companies like Fivetran that focus on data integration, a lot of customers end up with use cases that aren’t supported by Airbyte’s closed-source competitors and that they had to build themselves from the ground up.
“Our mission with Airbyte is really to become the standard to replicate data,” Lafleur said. “To do that, we will open source every feature that addresses the need of the individual contributor, so all the connectors.” He also noted that Airbyte will exclusively focus on its open-source tools until it raises a Series A round — likely early next year.
To monetize its service, Airbyte plans to use an open-core model, where all of the features that address the needs of a company (think enterprise features like data quality, privacy, user management, etc.) will be licensed. The team is also looking at white-labeling its containerized connectors to others.
Currently, about 600 companies use Airbyte’s connectors — up from 250 just a month ago. Its users include the likes of Safegraph, Dribbble, Mercato, GraniteRock, Agridigital and Cart.com.
The company plans to use the new funding to double its team from about 12 people to 25 by the end of the year. Right now, the company’s focus is on establishing its user base, and then it plans to start monetizing that — and raise more funding — next year.
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