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Extra Crunch roundup: The Nuro EC-1, early-stage growth tactics, understanding Salesforce+
In 2010, Google’s autonomous vehicle project placed self-driving cars on Bay Area streets and freeways, but practical applications were thought to be at least a decade away.
The futurists were right on schedule: In 2020, Mountain View-based Nuro was testing its second-generation R2 robotic vehicle, the first to earn a federal exemption to operate an autonomous vehicle.
But before Nuro could even consider reaching product-market fit, its founders had to overcome technological challenges, win over regulators and strike partnerships with a range of consumer-facing companies.
“Neither JZ nor I think of ourselves as classic entrepreneurs or that starting a company is something we had to do in our lives,” says co-founder Dave Ferguson. “It was much more the result of soul searching and trying to figure out what is the biggest possible impact that we could have.”
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Across four articles, reporter Mark Harris (The Guardian, Wired, MIT Technology Review) explores Nuro’s origins and operations, including the founders’ decision to focus on creating autonomous delivery vehicles instead of entering the passenger EV market.
I’ve lived inside the San Francisco Bay Area bubble for most of my adult life, so it’s interesting to see how people in Houston’s Woodland Heights neighborhood react to seeing Nuro’s R2 delivering pizza and prescriptions on a limited basis.
As one Redditor recently posted in r/houston: “With these self-driving cars, it’s only a matter of time before a country song is written about a guy’s truck leaving him.”
Part 1: How Google’s self-driving car project accidentally spawned its robotic delivery rival
Part 2: Why regulators love Nuro’s self-driving delivery vehicles
Part 3: How Nuro became the robotic face of Domino’s
Part 4: Here’s what the inevitable friendly neighborhood robot invasion looks like
Thanks very much for reading Extra Crunch!
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Why fintechs are buying up legacy financial services companies
Image Credits: Peter Dazeley (opens in a new window) / Getty Images
Why bother to beat the competition when you can buy them outright?
“It used to be that if you were a fintech startup or, for lack of a better term, a digitally native financial services business, you might be eyeing an acquisition from an incumbent in the industry,” Ryan Lawler writes.
“But lately, fintech upstarts are the ones doing the acquiring.”
Growth tactics that will jump-start your customer base
Image Credits: Jasmin Merdan (opens in a new window) / Getty Images
“With audiences spread out over so many platforms, reaching cult status requires some level of hacking,” Jenny Wang, a principal investor at Neo, writes in a guest column.
Covering everything from collecting user-generated content to launching splashy guerrilla marketing strategies that can take advantage of someone else’s events, she shares several growth tactics for startups, plus the metrics required to track their success.
There could be more to the Salesforce+ video streaming service than meets the eye
Image Credits: ppengcreative / Getty Images
Salesforce announced last week that it plans to launch a video streaming service.
The industry analysts who enterprise reporter Ron Miller interviewed said the initiative has tremendous potential, but one noted that Salesforce will have to dig deep to compete in today’s crowded media landscape.
Salesforce hasn’t released details on the type of programming it plans to offer, but given its vast and diverse customer base, its options are many. Said Brent Leary of CRM Essentials:
“A customer could sponsor a show, advertise a show or possibly collaborate on a show. And have leads generated from the show [which could be] directly tied to the activity from those options and track ROI. And it’s all done on one platform. And the content lives on with ads living on with them.”
More companies should shift to a work-from-home model
Image Credits: Ann Schwede (opens in a new window) / Getty Images
Karl Laughton, president and COO of Insightly, offers best practices for companies looking to make the move to a remote model.
“Employers are at a crucial crossroads when it comes to deciding where and how to let employers do their jobs,” he writes in a guest column. “There are those who will adopt the work-from-anywhere model and those who resist it.
“Those who resist it will likely struggle to keep employees.”
Early-stage benchmarks for young cybersecurity companies
Image Credits: Getty Images under a Olivier Le Moal (opens in a new window) license.
YL Ventures’ Yoav Leitersdorf and Michael Cortez lay out a roadmap for founders of early-stage cybersecurity companies that are heading toward unicorn status.
“The early days of any young startup decide how successful it can be, which is why we’ve developed a focused, value-add program to support cybersecurity founders during this most critical stage and maximize their potential in building market-leading companies,” they write in a guest column.
“It’s never too early to think big, and, with the right support, launch the next industry titan.”
The hyperactive late-stage market should keep the startup investing game afoot
Image Credits: Nigel Sussman (opens in a new window)
Alex Wilhelm considers last week’s funding news from Carta, Chime and Discord and noodles on what the recent rounds mean for startups.
“Understanding why investors are so willing to buy minute stakes in dozens of private companies worth billions of dollars is key to grokking the crush of investment we see among younger technology startups.”
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YL Ventures sells its stake in cybersecurity unicorn Axonius for $270M
YL Ventures, the Israel-focused cybersecurity seed fund, today announced that it has sold its stake in cybersecurity asset management startup Axonius, which only a week ago announced a $100 million Series D funding round that now values it at around $1.2 billion.
ICONIQ Growth, Alkeon Capital Management, DTCP and Harmony Partners acquired YL Venture’s stake for $270 million. This marks YL’s first return from its third $75 million fund, which it raised in 2017, and the largest return in the firm’s history.
With this sale, the company’s third fund still has six portfolio companies remaining. It closed its fourth fund with $120 million in committed capital in the middle of 2019.
Unlike YL, which focuses on early-stage companies — though it also tends to participate in some later-stage rounds — the investors that are buying its stake specialize in later-stage companies that are often on an IPO path. ICONIQ Growth has invested in the likes of Adyen, CrowdStrike, Datadog and Zoom, for example, and has also regularly partnered with YL Ventures on its later-stage investments.
“The transition from early-stage to late-stage investors just makes sense as we drive toward IPO, and it allows each investor to focus on what they do best,” said Dean Sysman, co-founder and CEO of Axonius. “We appreciate the guidance and support the YL Ventures team has provided during the early stages of our company and we congratulate them on this successful journey.”
To put this sale into perspective for the Silicon Valley and Tel Aviv-based YL Ventures, it’s worth noting that it currently manages about $300 million. Its current portfolio includes the likes of Orca Security, Hunters and Cycode. This sale is a huge win for the firm.
Its most headline-grabbing exit so far was Twistlock, which was acquired by Palo Alto Networks for $410 million in 2019, but it has also seen exits of its portfolio companies to Microsoft, Proofpoint, CA Technologies and Walmart, among others. The fund participated in Axonius’ $4 million seed round in 2017 up to its $58 million Series C round a year ago.
It seems like YL Ventures is taking a very pragmatic approach here. It doesn’t specialize in late-stage firms — and until recently, Israeli startups always tended to sell long before they got to a late-stage round anyway. And it can generate a nice — and guaranteed — return for its own investors, too.
“This exit netted $270 million in cash directly to our third fund, which had $75 million total in capital commitments, and this fund still has six outstanding portfolio companies remaining,” Yoav Leitersdorf, YL Ventures’ founder and managing partner, told me. “Returning multiple times that fund now with a single exit, with the rest of the portfolio companies still there for the upside is the most responsible — yet highly profitable path — we could have taken for our fund at this time. And all this while diverting our energies and means more towards our seed-stage companies (where our help is more impactful), and at the same time supporting Axonius by enabling it to bring aboard such excellent late-stage investors as ICONIQ and Alkeon — a true win-win-win situation for everyone involved!”
He also noted that this sale achieved a top-decile return for the firm’s limited partners and allows it to focus its resources and attention toward the younger companies in its portfolio.
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