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Wednesday, 31 March 2021

Uganda’s Tugende closes $3.6M Series A extension to meet the demand for its asset finance products

Uganda’s Tugende closes $3.6M Series A extension to meet the demand for its asset finance products

Ugandan technology-enabled asset finance company Tugende today announced that it has closed $3.6 million in a Series A extension round.

The investment, which, according to the company, was agreed on and structured in 2020, follows the $6.3 million raised in November 2020 and led by Toyota Tsusho investment fund Mobility 54. This brings Tugende’s total Series A financing to $9.9 million.

San Francisco and Paris-based VC firm, Partech led the round. Enza Capital participated, alongside some unnamed angel investors.

Michael Wilkerson founded Tugende in 2012. The company uses asset finance, technology and a customer support model to help micro, small and medium-sized enterprises own income-generating assets.

While primarily based in East Africa, the company wants to tackle the $331 billion credit gap facing these businesses across Africa. Its core product is for motorcycle riders in Kenya and Uganda, with a lease-to-own or hire-purchase package. These riders get some training, medical and life insurance, safety equipment and hands-on support from their first use of the motorcycle to owning it. 

Between 2006 and 2010, CEO Wilkerson, then a journalist and researcher, spent a great deal of time using motorcycles (Boda bodas) for quick and flexible transport. It was such an effective means for transport for him that he built a large contact list of “go-to” boda boda riders he would call for rides when need be. This was long before ride-hailing made its way to East Africa.

Michael Wilkerson (Tugende CEO). Image Credits: Tugende

These boda boda riders earned enough to pay motorcycle rent and survive, but not enough to build significant savings. While the little amounts they paid for rent could actually service a loan, traditional banks either required significant collateral or very high down payments.

So in 2010, Wilkerson launched Own Your Own Boda, a for-profit enterprise to put these riders on a path toward owning their motorcycles. They began informally with handwritten contracts, but progressed into using technology to scale the solution from 2013 when it rebranded to Tugende. 

Once boda boda riders get on board, they can double their take-home profit from $5 per day to $10 per day after becoming owners, the CEO claims.

“With an average household of five people, this can really transform the lives of our client and their families. Besides just increased daily profit, ownership of an asset is also wealth in itself,” Wilkerson told TechCrunch. “Some clients sell the fully owned motorcycle and use that lump sum of capital to make other investments while coming back to Tugende for a new lease, which is affordable from their daily cash flow.”

In addition to motorcycle taxis, Tugende has broadened the productive assets it finances to boat engines, cars, equipment for retail shops, refrigerators and other income-generating equipment. The company is also currently piloting financing for e-mobility assets. 

Image Credits: Tugende

The pivot to using technology in 2013 allowed Tugende to move fully to digital payments, build its own interoperable payment gateway in 2017 and launch an in-house credit score in 2019 to allow clients to see how they are performing. 

Talking about clients, Tugende currently has more than 43,000 across Kenya and Uganda. Out of that number, 16,000 have achieved full ownership of at least one asset.

Last year was a challenging one for the company, as the pandemic disrupted some of its activities; excluding 2020, Tugende has doubled in team size year-on-year. The company currently has more than 520 employees, with 20 branches in Uganda and four in Kenya.

While the pandemic presented challenges that the company has since maneuvered, it also brought a new investor in Partech. “Last year, in the middle of the pandemic, we decided to invest in Tugende”, said Tidjane Deme, partner at the firm that invested in 82 startups across 24 countries in 2020. “Tugende combines technology and strong operations to aid millions of professionals to grow their businesses and drive economies forward. We will support Michael and his team to build up the tech platform, fine-tune the model and expand in new markets.”

Over the years, Tugende’s demand has come mainly via word of mouth, a strategy Wilkinson says the company has struggled to keep up with. That’s the purpose of the new investment — to provide supply for growing demand. Also, the investment will support the closure of new debt capital to fuel Tugende’s strong portfolio growth in Uganda and Kenya.

Partech is doubling the size of its African venture fund to $143 million

Because of the nature of its business, Tugende needs a steady influx of debt capital. Since its inception, it has raised more than $20 million from debt partners like Partners Group Impact Investments and the U.S. Development Finance Corporation.

So why opt for equity financing this time when it mostly thrives on debt capital? Wilkinson says with the company’s long waiting list of new clients, Tugende has been trying to close new capital fast enough to keep up with this demand.

You see, most lenders require a minimum equity cushion, and even though Tugende has been net income positive for most of the last five years through 2019, its internally generated equity couldn’t anchor enough debt to meet its word of mouth client demand. Now, when you add the company’s goals to grow in new geographies and new asset products, the reason for this equity financing is apparently clear.

“Debt is Tugende’s fuel for growth. But good equity financing is like upgrading the engine, getting a top-notch mechanic and driving coach thrown in on top to help you handle the speed,” Wilkinson added. 

African countries need ‘startup acts’ more than ever to support innovation

There is also the need for balance sheet strength, leading to more capital runway with larger and better-priced debt deals. Besides, there is the multiplier effect of having hands-on equity support.

Unlike many digital or digitally-enabled lenders, Wilkinson says Tugende’s prime focus on long-term value, not today’s credit transaction alone, is what will keep customers in the Tugende ecosystem in the coming years.

“We are particularly enthused by the team’s innovative application of technology, which incorporates a range of social considerations to build a new type of credit score, and which will increase access to capital across a range of African markets where entrepreneurs currently have a limited credit history or access to collateral,” said Mike Mompi, partner at Enza Capital of the investment.



Tuesday, 30 March 2021

Otrium raises $120 million for its end-of-season fashion marketplace

Otrium raises $120 million for its end-of-season fashion marketplace

Otrium has raised a $120 million round just a year after raising its $26 million Series B round. BOND and returning investor Index Ventures are leading the round. Existing investor Eight Roads Ventures is also participating.

The concept behind Otrium is quite simple. When items reach the end-of-season status, brands can list those items on Otrium and keep selling them. Otrium is currently available in Europe. Right now, many brands have their own end-of-season sales. But there are some limits to this model.

Those companies often can’t sell their entire back inventory this way. Moreover, the most luxurious fashion brands don’t necessarily want to put a cheaper price tag on their items in their own stores. That’s why a lot of clothing produced stays unsold — and by unsold, it means that those items often get destroyed.

With Otrium, brands can add another sales channel for those specific items. And selling those items online makes a ton of sense as you don’t want to manage small end-of-season inventories across multiple stores. One big online inventory is all you need.

And because some brands are reluctant about selling outdated items, Otrium tries to be as friendly as possible with fashion companies. They retain control over pricing, merchandising and visibility of their excess inventory.

The startup also recently launched advanced analytics. The idea here is that Otrium can help brands identify evergreen products that should remain available year after year.

“We believe that the fashion world will see a rebalancing in the next few years, with more sales being driven by iconic items that brands sell year after year, and will be less reliant on new seasonal launches,” co-founder and CEO Milan Daniels said in a statement.

And it would be a win-win for everyone involved. Otrium would end up selling items that remain relevant for a longer time. And fashion brands could slowly build an evergreen collection of items that would nicely complement their fast fashion collections.

With today’s funding round, Otrium plans to expand to the U.S. The company currently works with several well-known fashion houses, such as Karl Lagerfeld, Joseph, Anine Bing, Belstaff, Reiss and ASICS.

Image Credits: Otrium

Otrium raises $26 million to sell end-of-season fashion items



Monk’s Hill Ventures and Glints on how Southeast Asian startups can cope with the region’s talent crunch

Monk’s Hill Ventures and Glints on how Southeast Asian startups can cope with the region’s talent crunch

A lot has changed since Monk’s Hill Ventures released its first report on tech compensation in Southeast Asia five years ago, with base salaries and competition for top talent jumping dramatically. But one thing has remained the same since 2016: startup compensation data, including information about base pay, bonuses and stock options, is still hard to find. To get more data for its latest Southeast Asia Tech Talent Compensation report, which covers startup hiring in Singapore, Indonesia and Vietnam, Monk’s Hill Ventures teamed up with Glints, one of its portfolio companies.

Glints is a recruitment platform that claims 4 million users each month and is used by 30,000 organizations. The report analyzed more than 1,000 data points from Glints’ proprietary database, including job advertisements and placements made through 2020, and surveyed 175 employees in both technical and non-technical roles. It also includes interviews with more than 20 founders, including from Bot MD, Carousell, Horangi, the Asianparent and Ninja Van. The full report can be downloaded here.

The report focused on Singapore, Indonesia and Vietnam because they are three of the fastest-growing markets in Southeast Asia. It found that startups are dealing with several major shifts at the same time. There are more Southeast Asian startups maturing into late stage, but at the same time, large American and Chinese tech companies are setting up regional operations, including TikTok, Tencent, Alibaba and Zoom. This means compensation packages are being driven up and startups face a talent crunch, especially in Singapore. Most of the founders interviewed by Monk’s Hill Ventures and Glints said that base salaries have at least doubled since 2016.

Going remote even before the pandemic

But the range of salaries and talent pool varies widely between Southeast Asian countries, and as a result, tech startups can build strong teams with a regionally distributed strategy. For example, this can look like an engineering team in Vietnam, data science team in Singapore and product management team in Indonesia. Vietnam had the highest salary differences between senior and junior roles, for both tech and non-tech talent, compared to Singapore and Indonesia, which the report said means there is “strong potential for upward salary growth within the Vietnamese tech sector.”

Oswald Yeo, co-founder and chief executive officer of Glints, told TechCrunch that many startups were building regionally distributed engineering hubs before COVID-19 because there was simply not enough talent in Singapore. Now even more founders have become open to remote teams because of the pandemic. But having teams in different countries doesn’t just address the talent crunch. It also lays the groundwork for regional expansion.

“Commercially in Southeast Asia, you can’t stay in a single market unless it’s maybe Indonesia,” said Yeo. “If you stay only in Singapore, Malaysia or even Vietnam, you will not be a large enough business and make the impact you want to make. A lot of startups have to venture out, so they end up having commercial teams in each market anyway and then it’s very normal for them to build product and tech teams in those markets.”

Competing for specialized skills

The report found that tech roles, including product, data science and engineering, earn 54% more than non-technical roles, like marketing, operations or finance. But the base salary between product and data science roles over non-technical roles was one to two times higher than for engineering, suggesting that “while engineering skills are becoming more common across the region, specialized product and data science skills remain hard to come by.”

Founders said that vice presidents of engineering in particular are seen as one of a startup’s most critical hires. Singapore-based startups at Series B and upward paid base monthly salaries ranging from $7,500 to $10,000, with equity compensation from 0.3% to 1.2%. In Indonesia, base salaries for engineering VPs ranged from $2,800 to $7,100 depending on the stage of company, and in Vietnam, early stage companies paid on average $1,000 to $5,000. That amount increased to $5,000 to $6,000 after raising Series A funding, and $8,000 to $10,000 for companies at Series B stage and above.

The competition for top tech talent is also reflected in C-level compensation. The report found that chief executive officers tend to hold more equity in their startups, but chief technology officers consistently have higher median base salaries, “suggesting that CEOs are often willing to take a pay cut in favor of their technical counterparts, who are typically highly valued and considered scarce assets to the company.”

Based on combined data from Singapore, Vietnam and Indonesia, CEO’s median salary increased from $2,600 a month at the $0 to $10 million funding stage, to $6,000 a month at $5 million to $10 million in funding. In comparison, at the same funding stages, CTO’s median salary increased from $3,300 to $7,550 respectively. CEO at startups with funding up to $5 million owned between 15% to 100% of their company’s equity, while the average ownership of CTOs at that stage is 19%.

Cash versus equity

Another noteworthy finding is that less than 32% of tech talent surveyed by Monk’s Hill Ventures and Glints are being compensated in equity. Founders said employees, especially junior-to-mid level hires, still prefer cash. But this is changing as founders spend more time educating their teams about the benefits of equity, and some startups are now also offering annual wage supplements, bonuses, restricted stock units or employee stock ownership plans.

Some founders reported that executives who have worked in the American or Singaporean startup ecosystems are keener on equity options, but in general, there needs to be more startup exits in Southeast Asia for candidates to become open to equity.

Before co-founding Monk’s Hill Ventures, Peng T. Ong was a venture partner at GSR Ventures in China. “In 2010, in that time frame, there were the same issues there. People wanted cash. Fast forward to three years later, when the IPOs started to happen, all that changed. People wanted options,” Ong told TechCrunch. He said that the same shift is gradually starting to happen in Southeast Asia, thanks to Sea Group and Razer’s IPOs.



Amazon partners with Seraphim on AWS accelerator for space startups

Amazon partners with Seraphim on AWS accelerator for space startups

Amazon will soon be a big part of the space economy in the form of its Kuiper satellite internet constellation, but here on Earth its ambitions are more commonplace: get an accelerator going. They’ve partnered with space-focused VC outfit Seraphim Capital to create a four-week program with (among other things) a $100,000 AWS credit for a carrot.

Applications are open now for the AWS Space Accelerator, with the only requirement that you’re aiming for the space sector and plan to use AWS at some point. Ten applicants will be accepted; you have until April 21 to apply.

The program sounds fairly straightforward: a “technical, business, and mentorship” deal where you’ll likely learn how to use AWS properly, get some good tips from the AWS Partner Network and other space-focused experts on tech, regulations and security, then rub shoulders with some VCs to talk about that round you’re putting together. (No doubt Seraphim’s team gets first dibs, but there doesn’t appear to be any strict equity agreement.)

“Selected startups may receive up to $100,000 in AWS Activate credit,” the announcement says, which does hedge somewhat, but probably legal made them put that in.

There are a good amount of space-focused programs out there, but not nearly enough to cover demand — there are a lot of space startups! And they often face a special challenge of being highly technical, have customers in the public sector and need rather a lot of cash to get going compared with your average enterprise SaaS.

We’ll understand more about the program once the first cohort is announced, likely not for at least a month or two.

As launch market matures, space opportunities on the ground take off



Last two crewmembers named for SpaceX’s first all-civilian human spaceflight mission

Last two crewmembers named for SpaceX’s first all-civilian human spaceflight mission

We now know the names of all four individuals who will fly on the historic Inspiration4 mission, the first all-civilian spaceflight in history. In addition to previously revealed crew members Jared Isaacman (who’s footing the entire bill) and St. Jude Children’s Hospital employee Haley Arceneaux, Inspiration4 will include Dr. Sian Proctor and Christopher Sembroski as the final two civilian astronauts. The mission will use a SpaceX Dragon capsule and is set to fly no earlier than September 15, with a total duration of three days.

Dr. Proctor takes the state reserved for the online business competition portion of the crew selection process, which saw entrants taken from submissions based on people who had created businesses on Isaacman’s Shift4Shop e-commerce platform. Sembroski won his seat by contributing to the ongoing St. Jude fundraising drive Isaacman is hosting as part of the mission’s promotional campaign.

Inspiration4 crew member Dr. Sian Proctor

Both Proctor and Sembroski have specific sets of skills relative to spaceflight that seem likely to have factored Ito their selection for the crew. Proctor is a trained pilot, for instance, and Sembroski is a veteran aerospace employee, most recently at Lockheed Martin, and also a literal veteran, having served in the U.S. Air Force.

Inspiration4 crew member Christopher Sembroski

As part of this final crew reveal, Inspiration4 also shared how many entries it received in each category. Somewhat surprisingly, the Shift4Shop e-commerce platform competition only drew a total of “approximately” 200 entries — and use of ‘approximately’ suggests fewer — while the charity drive drew 72,000 entries, and has raised around $113 million to date. That’s still short of the campaign’s $200 million goal, and includes Isaacman’s personal commitment of $100 million, but the drive continues and there are additional awards to be one, even if the top prize of the trip to space is gone.

This whole mission campaign has honestly been one of the most bizarre stories in spaceflight in recent memory, beginning with the big announcement, which included a press conference with SpaceX CEO Elon Musk joining Isaacman to discuss the flight, and seemingly not being aware of any relevant details about mission specifics. Isaacman also dedicated $100 million of his own money to the charity drive for St. Jude, as mentioned, but clearly donations from the community aren’t living up to expectations with around 13% of the total target raised from those to date.

That “approximately 200” entries in the Shift4Payments build-a-business competition might be the most perplexing, since the award was a free trip to space. In retrospect, this seems like it was the path to space with the most likelihood of working out, even if you had to convince an oddly stunt cast panel of judges to select yours as the winner.

SpaceX is aiming to fly the first all-civilian human space mission by the end of 2021



LinkedIn adds Creator mode, video profiles, and in partnership with Microsoft, new career training tools

LinkedIn adds Creator mode, video profiles, and in partnership with Microsoft, new career training tools

LinkedIn, the social network now with 740 million users around the world, has carved out an identity for itself as the place online where professionals go to list their places of work, get headhunted for other work, and look for work. But for years it’s been looking for ways to better leverage that position to move into a plethora of adjacent areas, such as training and education, professional development, networking with others, and news. Today, the company unveiled a series of new features that it will be rolling out over the coming months to play into that strategy, and also, it hopes, increase engagement on the platform:

— The company is bringing more video into people’s profiles, with the launch of a “video Cover Story”, short videos that people can make talking about themselves to live on their home pages. And for people to feel more connected with how they are depicted on LinkedIn, it is also adding a pronoun feature.

— Alongside these, the company is officially launching a new “Creator” mode, a more refined but also more democratic version of the company’s Influencer network (anyone can be a Creator if they so choose, for a start). It’s also carving out more of a solid place for freelancers on the platform, by way of a new Service page attached to your profile.

— LinkedIn’s educational and training efforts are also getting some boost. The program that it launched with Microsoft, which owns LinkedIn, for free online training in 10 different areas, in the wake of the economic shift that Covid-19 brought on the world, is getting extended to the end of this year. And it’s also announcing a new Teams-based app in partnership with Microsoft called Career Coach aimed at students.

Taken together, this seemingly disparate set of announcements all lean into an interesting development for LinkedIn: social media — whether you are a person posting content, or simply looking at posts from others that you feel speak to your situation in life — has a strong undercurrent of empowerment throughout it. Through these different features and products, LinkedIn’s trying in its own way to bring some of that individual identity and voice through to its own platform.

Below are some more detailed thoughts about the various new areas.

The video-based Cover Story plays on the idea of how people create short videos about themselves that they might post as a status on a more consumer-focused social media platform. If the list of places where you work and have worked or studied tell one kind of story about who you are, the idea is that the video selfie can tell another to fill in more gaps.

As LinkedIn’s chief product officer Tomer Cohen describes it, you can use the space to give yourself a more human angle, describing something about your interests or aspirations that might not come across in your resume. These also auto play when people come to visit your profile, which Cohen aptly refers to as a “Harry Potter” effect, in reference to the animated Daily Prophet newspaper in the wizarding world. For now these will only appear in your profile, but in time the animals may also expand to search results.

It all sounds interesting enough, except that it relies quite a lot on people using the format successfully rather than creating something that might actually deter recruiters. Ironically, if the trend is to remove some of what might profile and pigeonhole people too much when job-hunting, adding in these videos could serve to bring some of that kind of judgement back into play. It will depend on how they are adopted and used and viewed, at the end of the day.

LinkedIn’s focus on video comes as part of the company’s bigger engagement with the medium over the last several years, adding services like Live broadcasts into the timeline for example. It’s no surprise, considering how sticky video has been in the bigger realm of social media across services like TikTok, Snapchat, Facebook and Twitter.

That seems to also be playing out at LinkedIn and areas that align more closely with the company’s business: it said in a survey it conducted, some 61% of job seekers said that recorded video could be the next iteration of the traditional cover letter, and that among hiring managers, nearly 80% say video figures strongly in their candidate vetting. So it’s not a matter of testing the waters, but perhaps just making sure you have the tools to stay afloat.

Video is playing a bigger role beyond just that of helping everyone with profiles. For the most proactive, LinkedIn is launching a Creator mode, where people who already make LinkedIn Live videos and other content can shift over their profiles to becoming Creators instead of ordinary LinkedIn citizens. This is something you choose yourself, unlike the Influencer tag that LinkedIn confers on a smaller subset of thought leaders, and it means you can be “followed” on LinkedIn for people to watch and stay up to date with what you post.

While it’s hard to think of who might come to LinkedIn for entertainment in the same way that they might come to Instagram to follow a creator, the idea is that creating content for LinkedIn becomes the end in itself for both the person watching and the person being watched.

It looks like the natural progression of the original content that LinkedIn has been building up through its editorial operation led by Dan Roth — indeed the company announced the first steps for its Creator product last month, led by Roth. But unlike creators on platforms like Instagram or YouTube or TikTok, for now it doesn’t look like there are direct routes to monetization when you are a LinkedIn Creator. That might change, however.

“Indirectly we’ve been connecting people to opportunities since we first enabled people to share content on LinkedIn.  Our members get leads and grow their business and following on LinkedIn,” said Keren Baruch, group product manager for LinkedIn’s creator strategy. She cited Quentin Allums, “jobless, broke, and desperate when he started posting LinkedIn videos. Then they started to go viral and he created his own business on LinkedIn from this success.

“As we continue to listen to feedback from our members as we consider future opportunities, we’ll also continue to evolve how we create more value for our creators,” she added.

The Service Pages also appear to be something that is the start of a product and project that LinkedIn started to seed in February, which will comprise a larger freelancer marketplace, reportedly by September.



Weather platform ClimaCell is now Tomorrow.io and raises $77M

Weather intelligence platform ClimaCell today announced that it has raised a $77 million Series D funding round led by private equity firm Stonecourt Capital, with participation by Highline Capital. This brings the company’s total funding to about $185 million. In addition to the new funding, ClimaCell announced that it has changed its name to Tomorrow.io, with “The Tomorrow Companies Inc.” as its new legal name.

Today’s announcement comes only a month after the company announced that it would launch a fleet of small radar-equipped weather satellites to improve its weather monitoring and forecasting capabilities. That’s also, at least in part, where the name change comes from.

Image Credits: ClimaCell/Tomorrow.ai

Originally, ClimaCell/Tomorrow.io built out a novel technology to collect weather data using wireless network infrastructure and IoT devices. That’s where the “cell” in ClimaCell came from. But as the company’s CEO and co-founder Shimon Elkabetz told me, while the company isn’t abandoning this approach, its focus today is much broader.

“The mission is really to help countries, businesses, organizations, to better manage their weather-related challenges,” he said. “And the ambition was always to be that largest weather enterprise in the world, the most disruptive, the most industry-defining. And I think this is the perfect timing for us to come up with a new name, not only because of the funding but because we were able to explain to ourselves that really, we’re helping others take control of tomorrow, today.”

ClimaCell plans to launch its own satellites to improve its weather predictions

That’s something Stonecourt partner Rock Davis agrees with. “While the company’s growth has been tremendous since launch, there is a larger opportunity at play here,” he said. “What Tomorrow.io is building, corroborated by their recent announcement of launching radar-equipped satellites into space, is only further proof that this company represents the future of weather forecasting for the entire planet. The privatization of the weather industry is now, and that type of vision is what compels the team here at Stonecourt Capital.”

As Elkabetz noted, Tomorrow.io isn’t a typical investment for a private investment firm like Stonecourt. Last year, the firm acquired 365 Data Centers, but it is also backing the Denver-based freight rail company Alpenglow Rail, for example.

And while many of Tomorrow.io’s customers saw their business decline during the pandemic (the company counts Uber and Delta among its users, for example), Elkabetz tells me that its team focused on diversifying its customer base and managed to sign up a number of large logistics companies, including major railways in the U.S. and Mexico, but also smaller companies in the drone, autonomous driving and electric vehicle space. In total, the company says, it saw a 200% net revenue retention rate and its annual contract value grew 850% during the past two years.

The company plans to use the new funding to launch more satellites, but also to improve its overall product and accelerate its go-to-market activities.

“We’re an interesting company because we’re a SaaS company that is now going to space,” Elkabetz said. “A lot of the Earth observations companies are now scratching their heads and saying, ‘Oh, we can’t just sell observations, it’s not monetizable or becoming a commodity. We now need to become a software company and build the platform and do the analytics.’ Good luck.”

Deep Science: Using machine learning to study anatomy, weather and earthquakes



Virgin Galactic debuts its first third-generation spaceship, ‘VSS Imagine’

Commercial human spaceflight company Virgin Galactic has unveiled the first ever Spaceship III, the third major iteration of its spacecraft design. The first in this new series is called ‘VSS (Virgin SpaceShip) Imagine,’ and will start ground testing now with the aim of beginning its first glide flights starting this summer. VSS Imagine has a snazzy new external look, including a mirrored wraparound finish that’s designed to reflect the spacecraft’s changing environment as it makes its way from the ground to space — but more importantly, it moves Virgin Galactic closer to achieving the engineering goals it requires to produce a fleet of spacecraft at scale.

I spoke to Virgin Galactic CEO Michael Colglazier about VSS Imagine, and what it represents for the company.

“We can build these at a faster pace,” he explained. “These are still relatively slow, versus what we want in our next class of spaceships. But what we do expect to have here is, we’ve taken all the learnings from [VSS] Unity, and built-in what we need to do so that we can turn these ships at a faster pace, because obviously, the number of flights we can do is the product of how many ships you have, and how quickly you can turn them.”

Unlike Unity, which is the spacecraft that Virgin Galactic first flew in September 2016, and that it ‘s still using in New Mexico now for its testing and commercial launch preparation program, Imagine has a “modular design” that makes it much easier to maintain, and increases the rate at which it can fly subsequent missions. As Colglazier mentioned, there’s still more work to be done in that regard to get the Spaceship design to the point where it’s able to support the company’s target of around 400 flights per year, per individual spaceport, but it’s a big upgrade, and the company is already beginning manufacturing work on a second Spaceship III-class vehicle, ‘VSS Inspire.’

Image Credits: Virgin Galactic

Imagine and Inspire are technical achievements, to be sure, but Colglazier, who came to Virgin Galactic from Disney Parks International in July 2020, also emphasized the importance of this spacecraft debut in terms of the company’s consumer brand.

“What you’re seeing in the images, the choice of the livery, the film that we’ve put out, is a very clear step, as a consumer brand launch, and as we’re stepping in and building that, that will build over the course of the summer as we build up towards Richard [Branson]’s flight,” he said. “Very purposefully, we’ve used these lofty words of ‘democratizing space’ — but space is meant for everyone. It may take a while, just for everyone to get there, but it’s coming. And so this was leading with a very consumer facing, ‘Why are we doing this?'”

In fact, that focus on the consumer side of the business has been a lot of Colglazier’s work over the past eight months since joining the company. He said that the Virgin Galactic he joined had a “world-class team” that had the aerospace pieces completely locked in, but that his particular contribution has been in building up the commercial side of the business to match.

“We’re now bringing some talent in that is used to scaling this kind of a business, so Swami Iyer actually started Monday of last week,” he said. “And when you see a guy like Joe Rohde, who came in on the experience side, there’s no replacement — that’s additive to building out now the shoulders around this experience.”

Iyer joined as President of Aerospace Systems, and brings years of experience in the commercial space and defense industry, across GKN Advanced Defernce Systems, Honeywell Aerospace and more. Rohde, on the other hand, boasts a very different background, as a longtime Disney Imagineer, who joins the company as its first ‘Experience Architect,’ focused squarely on defining what the Virgin Galactic experience is for its astronaut customers, their friends and family, and the broader public, too.

Colglazier said that their vision for what the experience will look like will also be different depending on what part of the world you’re flying from, noting that weather you fly from a spaceport in Europe, Asia, India or Australia should result in something “dramatically different,” even if the spacecraft themselves are all used in the same way as they are in New Mexico. That definitely seems like a logical approach from an executive whose prior experience includes leading Disney’s parks in Burbank, Paris, Hong Kong, Shanghai and Tokyo.

Image Credits: Virgin Galactic

In the end, Colglazier said that the core philosophy Virgin Galactic will pursue in terms of consumer brand will be one focused on inclusion, even if the actual ‘going to space’ part of its offering remains out of reach for most in the short term.

“This is for everyone, it has to be for everyone,” he said. That aspiration may take some number of years to actually be realized, but in the meantime, we have to find a way that our brand and our company can be accessed, that what we do can be accessed by all sorts of people at all different layers of engagement, so we’re going to be very purposeful about that. You’re going to hear us talking mostly about, effectively the apex experience — actually taking the new ships to space. But the ability to tier down out of that is really, really important, and the ability for us to be a brand that’s reaching out to everyone is incredibly important.”

That begins with the approach to this spacecraft debut today, Colglazier says, and is apparent in the tone of the video the company debuted (embedded above) to mark the reveal. And Virgin Galactic also still has 600 passengers booked and waiting for their own flights, so that’s obviously a key focus after Branson’s flight targeted for later this year.

Finally, I asked Colglazier when he himself intends to go up, since he said he definitely plans to when joining the company. Mostly, he said, he doesn’t want to cut in front of any paying customers.

“Okay, there are 600 or so people that are going to be a little ticked at me, if I jumped the line, so I’m going to keep focused at the consumer level,” he said. “But nobody else is in line yet, so I’m gonna get in before anybody else comes in line.”



HYCU raises $87.5M to take on Rubrik and the rest in multi-cloud data backup and recovery

HYCU raises $87.5M to take on Rubrik and the rest in multi-cloud data backup and recovery

As more companies become ever more reliant on digital infrastructure for everyday work, the more they become major targets for malicious hackers — both trends accelerated by the pandemic — and that is leading to an ever-greater need for IT and security departments to find ways of protecting data should it become compromised. Today, one of the companies that has emerged as a strong player in data backup and recovery is announcing its first major round of funding.

HYCU, which provides multi-cloud backup and recovery services for mid-market and enterprise customers, has raised $87.5 million, a Series A that it the Boston-based startup will be using to invest in building out its platform further, to bring its services into more markets, and to hire 100 more people.

HYCU’s premise and ambition, CEO and founder Simon Taylor said in an interview, is to provide backup and storage services that are as simple to use “as backing up in iCloud for consumers.”

“If you look at primary storage, it’s become very SaaS-ifed, with no professional services required,” he continued. “But backup has stayed very legacy. It’s still mostly focused on one specific environment and can’t perform well when multi-cloud is being used.”

And HYCU’s name fits with that ethos. It is pronounced “haiku”, which Taylor told me refers not just to that Japanese poetic form that looks simple but hides a lot of meaning, but also “hybrid cloud uptime.”

The company is probably known best for its integration with Nutanix, but has over time expanded to serve enterprises building and operating IT and apps over VMware, Google Cloud, Azure and AWS. The company also has built a tool to help migrate data for enterprises, HYCU Protégé, which will also be expanded.

The funding is being led by Bain Capital Ventures, with participation also from Acrew Capital (which was also in the news last week as an investor in the $118 million round for Pie Insurance). The valuation is not being disclosed.

This is the first major outside funding that the company has announced since being founded in 2018, but in that time it has grown into a sizeable competitor against others like Rubrik, Veeam, Veritas and CommVault. The Rubrik comparison is interesting, given that it is also backed by Bain (which led a $261 million round in Rubrik in 2019). HYCU now has more than 2,000 customers in 75 countries. Taylor says that not taking funding while growing into what it has become meant that it was “listening and closer to the needs of our customers,” rather than spending more time paying attention to what investors says.

Now that it’s reached a certain scale, though, things appear to be shifting and there will probably be more money down the line. “This is just round one for us,” Taylor said.

He added that this funding came in the wake of a lot of inbound interest that included not just the usual range of VCs and private equity firms that are getting more involved in VC, but also, it turns out, SPACs, which as they grow in number, seem to be exploring what kinds and stages of companies they tap with their quick finance-and-go-public model.

And although HYCU hadn’t been proactively pitching investors for funding, it would have been on their radars. In fact, Bain is a major backer of Nutanix, putting some $750 million into the company last August. There is some strategic sense in supporting businesses that figure strongly in the infrastructure of your other portfolio companies.

There is another important reason for HYCU raising capital to expand beyond what its balance sheet could provide to fuel growth: HYCU’s would-be competition is itself going through a moment of investment and expansion. For example, Veeam, which was acquired by Insight last January for $5 billion, then proceeded to acquire Kasten to move into serving enterprises that used Kubernetes-native workloads across on-premises and cloud environments. And Rubrik last year acquired Igneous to bring management of unstructured data into its purview. And it’s not a given that just because this is a sector seeing a lot of demand, that it’s all smooth sailing. Igneous was on the rocks at the time of its deal, and Rubrik itself had a data leak in 2019, highlighting that even those who are expert in protecting data can run up against problems.

Taylor notes that ransomware indeed remains a very persistent problem for its customers — reflecting what others in the security world have observed — and its approach for now is to remain focused on how it delivers services in an agent-less environment. “We integrate into the platform,” he said. “That is incredibly important. It means that you can be up and running immediately, with no need for professional services to do the integrating, and we also make it a lot harder for criminals because of this.”

Longer term, it will keep its focus on backup and recovery with no immediate plans to move into adjacent areas though such as more security services or other tools. “We’re not trying to be a Veritas and own the entire business end-to-end,” Taylor said. “The goal is to make sure the IT department has visibility and the cloud journey is protected.”

Enrique Salem, a partner at Bain Capital Ventures and the former CEO of Symantec, is joining HYCU’s board with this round and sees the opportunity in the market for a product like HYCU’s.

“We are in the early days of a multi-decade shift to the public cloud, but existing on-premises backup vendors are poorly equipped to enable this transition, creating tremendous opportunity for a new category of cloud-native backup providers,” he said in a statement. “As one of the early players in multi-cloud backup as a service bringing true SaaS to both on-premises and cloud-native environments, HYCU is a clear leader in a space that will continue to create large multi-billion dollar companies.”

Stefan Cohen, a principal at Bain Capital Ventures, will also be joining the board.



Ecovative sees a fungal future for fashion, food, and foam packaging and has a fresh $60M to make it

Ecovative sees a fungal future for fashion, food, and foam packaging and has a fresh $60M to make it

Eben Bayer has spent the better part of fourteen years proving out the power of the humble mushroom as the world’s truly functional food. 

As the chief executive and founder of Ecovative Design, Bayer has made replacements for foam packaging, lamps and furniture, leather materials, and even meats like bacon from mighty mushroom mycelia (they even grew a tiny. home).

Now the company has $60 million in financing to create new applications for its mycelial products and scale up existing business units.

The core of Ecovative Design’s business is in packaging. That’s where the company has been developing its tech the longest and where its replacements for styrofoam packaging have had the most commercial traction.

But there’s far more to Ecovative’s mushrooms than that and the company’s new investors including Viking Global Investors, with support from Senator Investment Group, AiiM Partners, Trousdale Ventures and other undisclosed backers want to see just how far the company can go. 

Part of the money will be used to build out a discovery platform for new materials and new strains in an effort to make Ecovative, the Gingko Bioworks of the mushroom business. While another chunk of change will be used to build out a larger production facility for its mushroom production.

The Gingko analogy may not be that much of a stretch. Using its platform for manufacturing and deep knowledge of fungi, Ecovative has already spun up a food company called Atlast, which raised $7 million to begin building a fake meat empire on the back of a mushroom-made bacon substitute.

A person in a lab coat stands with their back to several trays of Ecovative’s mushroom material growing in trays. Image Credit: Ecovative Design

And the company also has fashion on the brain. A licensing agreement between Ecovative and Bolt Threads helped power that massively funded startup’s push into manufacturing a leather replacement from mushrooms back in 2018.

The deal between the two ended in acrimony and litigation — and now Ecovative is going it alone, looking to be a provider of bulk leather replacements for anything from shoes to belts, to buckskin jackets.

“It seems like there’s a need for somebody who could not be a branded supplier, but to be someone who can provide scalable mushroom leather,” said Bayer. 

Other companies are working on trying to convince consumers to make the switch to mushrooms or other plant-based leather substitutes. Those are businesses like Mycoworks, which raised $45 million from a slew of celebrities last year to build out its own commercial scale mycelial manufacturing business. Or Natural Fiber Welding, which is backed by none other than the omnipresent eco-conscious fashion accessory adorning the feet of almost every venture investor — Allbirds (or are Atoms the new thing? I can’t keep up.)

“The demand for new biomaterials in the fashion industry, such as mycelium, far outstrips the current supply.  Ecovative is tackling this challenge head-on, committing to building a next generation platform capable of producing mycelium at scale,” said Katrin Ley, Managing Director of Fashion For Good, in a statement. 

Allbirds is investing in a plant-based leather substitute, plans faux-leather shoe drop in December

While Ecovative makes small batches of products under brands like Atlast, Bayer wants his company to be more of a white-label material provider than a branded business making shoes, packaging, and plant-based meat replacements.

The new financing comes on the heels of Ecovative’s partnership with UK packaging licensee Magical Mushroom Company, which recently announced the opening of four more facilities to supply the UK and EU markets with green packaging solutions, the company said. 

“Mycelium is a unique material that outperforms other sustainable alternatives in industries as diverse as fashion and food,” said Evan Lodes, Partner at Senator Investment Group, which first backed Ecovative back in 2019. “Ecovative pioneered the field of mycelium materials, and has invested in the research and development necessary to deliver it at the scale and cost necessary to make a significant impact.” 



Byju’s in talks to acquire US-based reading platform Epic

Byju’s in talks to acquire US-based reading platform Epic

Byju’s is eying acquisition of a startup that could help the biggest e-learning Indian firm deepen its footprint in the U.S.

The Indian startup is in talks to acquire online reading platform Epic, a startup that offers unlimited access to over 40,000 books, videos, and quizzes from more than 250 publishers to kids aged 12 or younger, two people familiar with the matter told TechCrunch.

The deal values Epic at “significantly” over $300 million dollars, according to one person, who like the other requested anonymity as the matter is private. The terms of the deal may change and/or the acquisition may not materialize, people warned.

An Epic spokesperson declined to comment Monday evening, and Byju’s did not respond to a request for comment on Tuesday.

Epic, backed by Evolution Media, reaches over 50 million kids in the U.S., a figure that has ballooned from 20 million last year.

The California-based startup, which has raised over $51 million to date, claimed in a press release last year that over 1 million teachers across more than 90% of U.S. elementary schools use Epic.

On Epic, founded by Suren Markosian and Kevin Donahue, children read over a billion books last year. The firm now plans to release several print versions of its original titles at Walmart, Target, and Sam’s Club later this year.

Some original titles released by Epic

Epic collects and analyzes real-time anonymized and aggregated data on how many children read a book, how deeply they engage with it, and where their interests start to fall off.

If the deal goes through, the startup’s offerings would align with Byju’s current playbook in the U.S. In 2019, the Indian startup acquired U.S.-based Osmo, which offers “blended learning” apps to integrate offline activities for kids aged between five to 12.

Byju’s is separately in the middle of concluding a new funding round whose size is expected to balloon over $600 million, TechCrunch reported last week. The new round is expected to value Byju’s at $15 billion.

The new financing round, a major tranche of which has already concluded (about $460 million at $13 billion valuation, per a filing), will be used to finance the new acquisition, the source said.

The Indian giant, which prepares students pursuing undergraduate and graduate-level courses, has witnessed skyrocketing growth amid the pandemic after New Delhi issued a months-long lockdown and closed schools.

India’s second most valuable startup, which serves over 80 million users, has additionally been aggressively exploring ways to grow inorganically.

Byju’s, which acquired coding platform aimed at kids WhiteHat Jr for $300 million last year, is conducting due diligence to acquire decades-old Indian brick-and-mortar institute Aakash and Toppr, another online learning startup in the world’s second largest internet market. These two deals are being financed with the over $1 billion funds Byju’s raised last year, one person familiar with the matter said.

WhiteHat Jr, which sparked controversy last year when it sued two critics, currently generates nearly half of its revenue from the U.S.



MessageBird acquires 24sessions to bring video to its ‘omnichannel’ platform

MessageBird acquires 24sessions to bring video to its ‘omnichannel’ platform

MessageBird, the omnichannel cloud communications platform recently valued at $3 billion, is continuing to ramp up its M&A activity. Following last year’s acquisition of Pusher, a company that provides real-time web technologies, it is announcing that it has acquired “video-first” customer engagement platform 24sessions, and customer data platform Hull.

Terms of the two new deals aren’t being disclosed, although MessageBird founder and CEO Robert Vis tells me the three acquisitions add up to about $100 million in total, and we alreadly know that Pusher’s acquisition price was $35 million. I also understand that the 24sessions and Hull acquisitions saw both companies’ investors exit entirely.

Originally seen as a European or “rest of the world” competitor to U.S.-based Twilio — offering a cloud communications platform that supports voice, video and text capabilities all wrapped up in an API — MessageBird has since repositioned itself as an “Omnichannel Platform-as-a-Service” (OPaaS). The idea is to easily enable enterprises and medium and smaller-sized companies to communicate with customers on any channel of their choosing.

MessageBird acquires real-time notifications and in-app messaging platform Pusher for $35M

Out of the box, this includes support for WhatsApp, Messenger, WeChat, Twitter, Line, Telegram, SMS, email and voice. Customers can start online and then move their support request or query over to a more convenient channel, such as their favourite mobile messaging app, which, of course, can go with them. It’s all part of MessageBird Vis’ big bet that the future of customer interactions is omni-channel.

To that end, the acquisition of 24sessions adds another channel: video. This, Vis tells me, is a particularly important channel where in-person interactions are being replicated digitally. However, he says it’s not just enough to have a video option — you need one that is compliant and secure. This is especially true for regulated industries such as financial services and healthcare. In addition, 24sessions is web-based, meaning that end-users aren’t required to install an app.

“Bringing a safe, secure and customizable video platform into the MessageBird family is the next step in our strategic journey,” said Vis in a statement. “Our portfolio of owned services already includes SMS, voice, email, OTT, social, live chat and push. The addition of 24sessions’ video platform gives us one of the world’s most comprehensive and powerful omnichannel offerings, and is consistent with our having end-to-end control of the stack in order to create magical experiences for our customers”.

“By joining forces with MessageBird, we’re making a leap forward in our mission to improve personal customer contact and turn it into a smooth digital experience, without losing the human touch,” adds Rutger Teunissen, CEO of 24sessions. “Video has become a more embedded, instant, intelligent, and integrated part of the omnichannel customer experience”.

However, communicating with customers more efficiently doesn’t just mean interacting with them on the channels of their choosing and building backend workflows to support this, it also requires a better understanding of the customer and the context of their query. That’s where the acquisition of Hull, based in France and the U.S., comes into play.

Described as a customer data platform (CDP), Hull’s team and technology will be deployed to create an “in-depth analytics layer” between MessageBird’s omnichannel offering and the workflow solutions it provides to customers.

“We want to empower clients to have easy, frictionless conversations with customers, so it’s crucial that we understand where those customers are and how they like to communicate,” said Vis. “To do that, it’s crucial that our platform is able to collect, unify and enrich product, marketing, and sales data and synchronize it across the workflow.”

In total, 45 staff will join from 24sessions, and 14 will join from Hull. The combined M&A brings MessageBird’s total headcount to almost 500 people across its nine hubs globally.

MessageBird, the ‘omnichannel platform-as-a-service,’ raises $200M Series C at $3B valuation



Zoomin raises $52M to help companies turn disparate product content into useful customer support data

Zoomin raises $52M to help companies turn disparate product content into useful customer support data

User guides, knowledge articles and community discussions form a detailed, yet very fragmented, landscape of information about a company and its products. Today, a company that’s built a platform both to organize that data, and help those who need it to tap into it more effectively, is announcing a round of funding that underscores the demand it’s seeing in the market for its technology.

Zoomin, an Israeli startup that uses machine learning, natural language processing and some big data magic to help companies build self-service experiences that bring together information and answers pulled from all of the content that’s being generated by customers and the company itself across various channels, has picked up $52 million in a Series C led by General Atlantic, with previous backers Bessemer Venture Partners, Salesforce Ventures and Viola Growth also participating. The company is not disclosing the valuation.

Zoomin will be using the money to continue building out the functionality of its product and to double down on new customer segments.

Originally targeting tech companies and the needs of business end users — early customers included Dell and McAfee, among others — it’s found some interesting growth into other sectors like the food industry, where customers include Burger King, Tim Hortons, and Popeyes, because, as CEO and co-founder Gal Oron describes it, “your typical fast food company has a lot of franchises, and they use a lot of operating manuals. Just like ServiceNow or McAfee.”

It’s also moving into other sectors like finance and healthcare, he added, and expanding to more than just technical support, which in the B2B world is closely connected to sales support, and sales. That could see Zoomin building products that lay out the information in different ways too.

“Technical content is the new marketing,” Oron said. “Companies invest millions in creating marketing material, but they have hundreds of thousands of pages of HTML with all the relevant details, and their customers are interested in technical stuff.”

Zoomin taps into “content” — the source of its answers — in real time wherever it is being made, and those are also typically the places where Zoomin-generated answers are being delivered, too. Documentation sites, customer service portals, support communities, product applications and anywhere that people are searching for help and chatting are also the typical sources of information that get fed into the Zoomin machine.

The financing underscores how much attention investors (and customers) are giving to business support software these days.

The pandemic led to a major shift in how many of us worked and interacted with services — many more people started to work remotely and carried out all of their everyday duties online. In terms of needing assistance when something isn’t going right, all of that has also shifted online, and has put an immense amount of pressure on the infrastructure that had been built to help with that.

Even at the best of times, customer support is in a tough place. It’s where users go when something isn’t working correctly or when they have another complaint, so even out of the starting gate, it can be a fraught interaction. And agents don’t have it much better at the other end, either. On top of the customers and their demands, they’re also typically working under time, cost, revenue and organizational constraints from the company itself, the classic scylla and charybdis scenario. Given all of that, and the particular circumstances of the last year, tools like Zoomin’s have come into the foreground for companies as one way to cope with all of that.

This round comes just three months after the startup came out of stealth with $21 million disclosed in funding since quietly opening for business in 2019. Oron said that the company has served 60.4 million answers to date to its customers (55 million in 2020): that volume grew 300% last year and its customer base doubled in the same period.

The company is banking on some bigger trends in the industry to see that growth continue. It notes that digital support channels — those site pages you visit that include either chatbots or intuitive search, dialogue boxes across the site, apps, and other places that don’t have live agents helping you — have grown in ubiquity, with some 60% of businesses projected to build self-service portals in the next 12 to 18 months. The proof is in the pudding, so to speak: Zoomin says that the product content that it helps surface can account for up to 70% of a company’s overall web traffic.

That brings up an interesting parallel between what Zoomin does and one of the major traffic controllers of modern times: the search engine. Google dominates how many of us use and discover things on the internet, and it’s been getting increasingly specific with the help that it provides to people, giving “answers” directly on search result pages — whether they are answers to questions, shopping suggestions, news, locations, videos, or any other number of end points.

Oron is quick to say that he has no interest in ever expanding what Zoomin does to make it a consumer-facing tool like Google’s, but it does highlight what a big and tricky problem information organization — or “knowledge orchestration”, as Zoomin refers to it — can be in our disjointed digital world, and the power of a company that can help bring order to that.

While Zoomin may not be interested in climbing the mountain that is competing with Google on its terms, it would be interesting to see how Google evolves its own work in site search, and whether that becomes a competitor on Zoomin’s terms. Zoomin’s terms are to get people to search on company sites themselves, not Google, for answers.

“The first place — a company’s site — is the right location,” Oron said.

Meanwhile, all of the “what ifs” show is that there is indeed a lot of potential here, one reason you’re seeing companies like Salesforce investing alongside the big financial backers.

“We are excited to be supporting Zoomin in this important step of their growth story through an investment that marks our third-ever partnership in the burgeoning Israeli tech market. At General Atlantic, we pride ourselves on identifying category builders and growth-oriented disruptors, and view Zoomin as a natural fit given those priorities,” said Alex Crisses, MD, Global Head of New Investment Sourcing and Co-Head of Emerging Growth at General Atlantic, in a statement.

“Having helped build the increasingly important field of knowledge orchestration from the ground up, Zoomin is providing much-needed value to large enterprises,” added Gary Reiner, a current General Atlantic Operating Partner and previous GE Chief Information Officer. “We look forward to partnering with and supporting Zoomin as they continue to innovate the way that customers experience crucial enterprise product content.”



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