By Christine Hall
September 16, 2021
By Romain Dillet
September 16, 2021
By Ron Miller
September 15, 2021
Matillion raises $150M at a $1.5B valuation for its low-code approach to integrating disparate data sources
By Ingrid Lunden
September 15, 2021
By Christine Hall
September 15, 2021
By Ingrid Lunden
September 14, 2021
By Christine Hall
September 14, 2021
By Christine Hall
September 14, 2021
By Christine Hall
September 13, 2021
By Christine Hall
September 13, 2021
Sorcero announced Thursday a $10 million Series A round of funding to continue scaling its medical and technical language intelligence platform.
The latest funding round comes as the company, headquartered in Washington, D.C. and Cambridge, Massachusetts, sees increased demand for its advanced analytics from life sciences and technical companies. Sorcero’s natural language processing platform makes it easier for subject-matter experts to find answers to their questions to aid in better decision making.
CityRock Venture Partners, the growth fund of H/L Ventures, led the round and was joined by new investors Harmonix Fund, Rackhouse, Mighty Capital and Leawood VC, as well as existing investors, Castor Ventures and WorldQuant Ventures. The new investment gives Sorcero a total of $15.7 million in funding since it was founded in 2018.
Prior to starting Sorcero, Dipanwita Das, co-founder and CEO, told TechCrunch she was working in public policy, a place where scientific content is useful, but often a source of confusion and burden. She thought there had to be a more effective way to make better decisions across the healthcare value chain. That’s when she met co-founders Walter Bender and Richard Graves and started the company.
“Everything is in service of subject-matter experts being faster, better and less prone to errors,” Das said. “Advances of deep learning with accuracy add a lot of transparency. We are used by science affairs and regulatory teams whose jobs it is to collect scientific data and effectively communicate it to a variety of stakeholders.”
The total addressable market for language intelligence is big — Das estimated it to be $42 billion just for the life sciences sector. Due to the demand, the co-founders have seen the company grow at 324% year over year since 2020, she added.
Raising a Series A enables the company to serve more customers across the life sciences sector. The company will invest in talent in both engineering and on the commercial side. It will also put some funds into Sorcero’s go-to-market strategy to go after other use cases.
In the next 12 to 18 months, a big focus for the company will be scaling into product market fit in the medical affairs and regulatory space and closing new partnerships.
Oliver Libby, partner at CityRock Venture Partners, said Sorcero’s platform “provides the rails for AI solutions for companies” that have traditionally found issues with AI technologies as they try to integrate data sets that are already in existence in order to run analysis effectively on top of that.
Rather than have to build custom technology and connectors, Sorcero is “revolutionizing it, reducing time and increasing accuracy,” and if AI is to have a future, it needs a universal translator that plugs into everything, he said.
“One of the hallmarks in the response to COVID was how quickly the scientific community had to do revolutionary things,” Libby added. “The time to vaccine was almost a miracle of modern science. One of the first things they did was track medical resources and turn them into a hook for pharmaceutical companies. There couldn’t have been a better use case for Sorcero than COVID.”
By Christine Hall
French startup Skello has raised a $47.3 million funding round (€40 million). The company has been working on a software-as-a-service tool that lets you manage the work schedule of your company. What makes it special is that Skello automatically takes into account local labor laws and collective agreements.
Partech is leading today’s funding round. Existing investors XAnge and Aglaé Ventures are also participating. The startup had previously raised a €300,000 seed round and a €6 million Series A round in 2018.
Skello works with companies across many industries, such as retail, hospitality, pharmacies, bakeries, gyms, escape games and more. And many of them were simply using Microsoft Excel to manage their schedule.
By using Skello, you get an online service that works for both managers and employees. On the manager side, you can view who is working and when. You can assign employees to fill some gaps.
For employees, they can also connect to the platform to see their own schedule. Employees can also say when they are unavailable and request time off. And when something unexpected comes up, employees can trade shifts.
“We really want to put employees at the center of the product,” co-founder and CEO Quitterie Mathelin-Moreaux told me. “They have a mobile app and the idea is to make the work schedule as collaborative as possible in order to allocate resources as efficiently as possible and increase team retention.”
At every step of the scheduling process, Skello manages legal requirements. For instance, Skello remembers mandatory weekly rest periods. The platform knows that your employees can’t work across a long time range. And Skello can count overtime hours, holiday hours, Sunday shifts, etc.
When you’re approaching the end of the month, Skello can generate a report with everyone’s timesheet. You can integrate Skello directly with your payroll tool to make this process a bit less tedious as well.
Skello is currently used across 7,000 points of sale. Now, the company wants to expand to more European countries and increase the size of the team from 150 employees to 300 employees by 2022.
By Romain Dillet
Relyance AI, an early stage startup that is helping companies stay in compliance with privacy laws at the code level, announced a $25 million Series A today. At the same time, they revealed a previously unannounced $5 million seed round.
Menlo Ventures and Unusual Ventures led the A round, while Unusual was sole lead on the seed. Serial entrepreneur Jyoti Bansal from Unusual will join the board under the terms of the deal. His partner John Vrionis had previously joined after the seed round. Matt Murphy from Menlo is coming on as a board observer. The company has now raised $30 million.
Relyance takes an unusual approach to verifying that data stays in compliance working at the code level, while ingesting contracts and existing legal requirements as code to ensure that a company is in compliance. Company co-CEO and co-founder Abhi Sharma says that code-level check is key to the solution. “For the first time, we are building the legal compliance and regulation into the source code,” Sharma told me.
He added, “Relyance is actually embedded within the DevOps pipeline of our customers infrastructure. So every time a new ETL pipeline is built or a machine learning model is receiving new source code, we do a compiler-like analysis of how personal sensitive data is flowing between internal microservices, data lakes and data warehouses, and then get a metadata analysis back to the privacy and compliance professionals [inside an organization].”
Leila R. Golchehreh, the other founder and co-CEO brings a strong compliance background to the equation and has experienced the challenge of keeping companies in compliance first-hand. She said that Relayance also enables companies to define policy and contracts as code.
“Our approach is specifically to ingest contracts. We’ve actually created an algorithm around how [you] actually write a good data protection agreement. We’ve extracted those relevant provisions and we will compare that against [your] operational reality. So if there’s a disconnect, we will be able to raise that as an intelligent insight of a data misalignment,” she said.
With 32 employees, the co-founders hope to double or perhaps even triple that number in the next 12-18 months. Golchehreh and Sharma are a diverse co-founder team and they are attempting to build a company that reflects that. They believe being remote first gives them a leg up in this regard, but they also have internal policies to drive it.
“The recruiters we work with have a mandate internally to say, ‘Hey, we really want to hire good people and diverse people.’ Reliance as a company is the genesis of two individuals from two completely different ends of the spectrum coming together. And I think hopefully, we can do our job of relaying that into the company as we scale,” Sharma said.
The two founders have been friends for several years and began talking about forming a company together in 2019 over a pizza dinner. The idea began to gel and they launched the company in February 2020. They spent some time talking to compliance pros to understand their requirements better, then began building the solution they have today in July 2020. They released a beta in February and began quietly selling it in March.
Today they have a number of early customers working with their software including Dialpad, Patreon, Samsara and True.
By Ron Miller
Businesses and the tech companies that serve them are run on data. At best, it can be used to help with decision-making, to understand how well or badly an organization is doing, and to build new systems to run the next generation of services. At its most challenging, though, data can represent a real headache: there is too much of it, in too many places, and too much of a task to bring it into any kind of order.
Enter a startup called Matillion, which has built a platform to help companies harness their data so that it can be used, and what’s more the platform is not just for data scientists, but it’s written with a “low-code” approach that can be used by a wider group of users.
Today, it is announcing a big round of investment — $150 million at a $1.5 billion valuation — a sign not just of Matillion’s traction in this space, but of the market demand for the tech that it has built.
The company currently has “hundreds” of large enterprise customers, including Hundreds of large enterprises including Western Union, FOX, Sony, Slack, National Grid, Peet’s Coffee and Cisco for projects ranging from business intelligence and visualization through to artificial intelligence and machine learning applications.
General Atlantic is leading the funding, with Battery Ventures, Sapphire Ventures, Scale Venture Partners, and Lightspeed Venture Partners — some of the biggest enterprise startup investors in the world — also participating. Matillion last raised money — a Series D of around $100 million million — as recently as February this year, at what was an undisclosed valuation at the time.
Announcing this latest round at a $1.5 billion valuation is significant not just for Matillion. The startup was founded in Manchester (it now also has a base in Denver), and this makes it one of a handful of tech startups out of the city — others we’ve recently covered include The Hut Group, Peak AI and Fractory — now hitting the big leagues and helping to put it on the innovation map as an urban center to watch.
Matthew Scullion, the startup’s CEO and founder, explained that the crux of the issue Matillion is addressing is the diamond-in-the-rough promise of big data. Typically, large organizations are producing giant amounts of data every day, hugely valuable information as long as it can be tapped efficiently. The problem is that this data is often sitting across a lot of different places — typically large organizations might have over 1,000 data sources, apps sitting across multiple clouds and servers, and storage across Snowflake, Amazon Redshift, and Databricks. On top of this, while a lot of that data is very structured, those sources are not necessarily aligned with each other.
“Data has become the new currency, and the world is pivoting to that,” he said. “It’s changing all aspects of how we work, and it is happening very fast. But the problem is that the world’s ability to innovate with data is constrained. It’s not the shortage of data or demand to put it to work, but the point is the world’s ability to make that data useful.”
Matillion has answered that with a framework and system that can both identify data sources and basically bring order to them, without needing to move the data from one place to another in order to be used. It’s an ETL (extract, transform, and load) provider, and it is far from being the only one in the market, with others like Dataiku, Talent, SnapLogic, as well as cloud providers like AWS and Microsoft, among the many trying to address this area.
The difference with Matillion, Scullion said, is that it has democratized platform, so that organizations don’t have to rely on data scientists to get involved in order to use it, by building a low-code interface around it.
“We have made it accessible, intuitive and easy to use by bringing in a low-code approach,” he said. “We’ve developed a platform and data operating system that has all the things in the kit bag that an organization needs to make it useful.”
This is important because, as big data analytics and the tools to build these processes become more mainstream and themselves take on low-code interfaces, Matillion is providing a way for those less technical users to source and use their data, too. This means more efficiency, less cost, and more time for data scientists to work on more difficult problems and do less busy work.
“As organizations look for ways to harness data to make better business decisions, the market for cloud data integration and transformation is expanding,” said Chris Caulkin, MD and Head of Technology for EMEA at General Atlantic. “We believe that Matillion’s low-code ETL platform simplifies the process of constructing data pipelines and preparing data for analysis, enabling citizen data scientists and data engineers alike to play a valuable role in extracting data-based insights. We look forward to supporting the team through its next phase of growth and expansion.”
By Ingrid Lunden
Cross-border commerce company Zonos raised $69 million in a Series A, led by Silversmith Capital Partners, to continue building its APIs that auto classify goods and calculate an accurate total landed cost on international transactions.
St. George, Utah-based Zonos is classifying the round as a minority investment that also included individual investors Eric Rea, CEO of Podium, and Aaron Skonnard, co-founder and CEO of Pluralsight. The Series A is the first outside capital Zonos has raised since it was founded in 2009, Clint Reid, founder and CEO, told TechCrunch.
As Reid explained it, “total landed cost” refers to the duties, taxes, import and shipping fees someone from another country might pay when purchasing items from the U.S. However, it is often difficult for businesses to figure out the exact cost of those fees.
Global cross-border e-commerce was estimated to be over $400 billion in 2018, but is growing at twice the rate of domestic e-commerce. This is where Zonos comes in: The company’s APIs, apps and plugins simplify cross-border sales by providing an accurate final price a consumer pays for an item on an international purchase. Businesses can choose which one or multiple shipping carriers they want to work with and even enable customers to choose at the time of purchase.
“Businesses can’t know all of a country’s laws,” Reid added. “Our mission is to create trust in global trade. If you are transparent, you bring trust. This was traditionally thought to be a shipping problem, but it is really a technology problem.”
As part of the investment Todd MacLean, managing partner at Silversmith Capital Partners, joined the Zonos board of directors. One of the things that attracted MacLean to the company was that Reid was building a company outside of Silicon Valley and disrupting global trade far from any port.
He says while looking into international commerce, he found people wound up being charged additional fees after they have already purchased the item, leading to bad customer experiences, especially when a merchant is trying to build brand loyalty.
Even if someone chooses not to purchase the item due to the fees being too high, MacLean believes the purchasing experience will be different because the pricing and shipping information was provided up front.
“Our diligence said Zonos is the only player to take the data that exists out there and make sense of it,” MacLean said. “Customers love it — we got the most impressive customer references because this demand is already out there, and they are seeing more revenue and their customers have more loyalty because it just works.”
In fact, it is common for companies to see 25% to 30% year over year increase in sales, Reid added. He went on to say that due to fees associated with shipping, it doesn’t always mean an increase in revenue for companies. There may be a small decrease, but a longer lifetime value with customers.
Going after venture capital at this time was important to Reid, who saw global trade becoming more complex as countries added new tax laws and stopped using other trade regulations. However, it was not just about getting the funding, but finding the right partner that recognizes that this problem won’t be solved in the next five years, but will need to be in it for the long haul, which Reid said he saw in Silversmith.
The new investment provides fuel for Zonos to grow in product development and go-to-market while also expanding its worldwide team into Europe and Asia Pacific. Eighteen months ago, the company had 30 employees, and now there are over 100. It also has more than 1,500 customers around the world and provides them with millions of landed cost quotes every day.
“Right now, we are the leader for APIs in cross-border e-commerce, but we need to also be the technology leader regardless of the industry,” Reid added. “We can’t just accept that we are good enough, we need to be better at doing this. We are looking at expanding into additional markets because it is more than just servicing U.S. companies, but need to be where our customers are.”
By Christine Hall
When LinkedIn first launched Stories format, and later expanded its tools for creators earlier this year, one noticeable detail was that the Microsoft-owned network for professionals hadn’t built any kind of obvious monetization into the program — noticeable, given that creators earn a living on other platforms like Instagram, YouTube and TikTok, and those apps had lured creators, their content, and their audiences in part by paying out.
“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,” is how LinkedIn explained its holding pattern on payouts to me at the time. But that strategy may have backfired for the company — or at least may have played a role in what came next: last month, LinkedIn announced it would be scrapping its Stories format and going back to the proverbial drawing board to work on other short-form video content for the platform.
Now comes the latest iteration in that effort. To bring more creators to the platform, the company today announced that it would be launching a new $25 million creator fund, which initially will be focused around a new Creator Accelerator Program.
It’s coming on the heels of LinkedIn also continuing to work on one of its other new-content experiments: a Clubhouse-style live conversation platform. As we previously reported, LinkedIn began working on this back in March of this year. Now, we are hearing that the feature will make an appearance as part of a broader events strategy for the company.
Notably, in a blog post announcing the creator fund, LinkedIn also listed a number of creator events coming up. Will the Clubhouse-style feature pop up there? Watch this space. Or maybe… listen up.
In any case, the creator accelerator that LinkedIn is announcing today could help feed into that wider pool of people that LinkedIn is hoping to cultivate on its platform as a more dynamic and lively set of voices to get more people talking and spending time on LinkedIn.
Andrei Santalo, global head of community at LinkedIn, noted in the blog post that the accelerator/incubator will be focused on the whole creator and the many ways that one can engage on LinkedIn.
“Creating content on LinkedIn is about creating opportunity, for yourselves and others,” he writes. “How can your words, videos and conversations make 774+ million professionals better at what they do or help them see the world in new ways?”
The incubator will last for 10 weeks and will take on 100 creators in the U.S. to coach them on building content for LinkedIn. It will also give them chances to network with like-minded individuals (naturally… it is LinkedIn), as well as a $15,000 grant to do their work. The deadline for applying (which you do here) is October 12.
The idea of starting a fund to incentivize creators to build video for a particular platform is definitely not new — and that is one reason why it was overdue for LinkedIn to think about its own approach.
Leading social media platforms like TikTok, Snapchat, Instagram and Facebook, and YouTube all have announced hundreds of millions of dollars in payouts in the form of creator funds to bring more original content to their platforms.
You could argue that for mass-market social media sites, it’s important to pay creators because competition is so fierce among them for consumer attention.
But on the other hand, those platforms have appeal for creators because of the potential audience size. At 774 million users, LinkedIn isn’t exactly small, but the kind of content that tends to live on there is so different, and maybe drier — it’s focused on professional development, work, and “serious” topics — that perhaps it might need the most financial incentive of all to get creators to bite.
LinkedIn’s bread and butter up to now has been around professional development: people use it to look for work, to get better jobs, to hire people, and to connect with people who might help them get ahead in their professional lives.
But it’s done so in a very prescribed set of formats that do not leave much room for exploring “authenticity” — not in the modern sense of “authentic self”, and not in the more old-school sense of just letting down your guard and being yourself. (Even relatively newer initiatives like its education focus directly play into this bigger framework.)
With authenticity becoming an increasing priority for people — and maybe more so as we have started to blur the lines between work and home because of Covid-19 and the changes that it has forced on us — I can’t help but wonder whether LinkedIn will use this opportunity to rethink, or at least expand the concept of, what it means to spend time on its platform.
By Ingrid Lunden
EverAfter secured $13 million in seed funding to continue developing its no-code customer-facing tool that streamlines onboarding and retention and enables business-to-business clients to embed personalized customer portals within any product.
The Tel Aviv-based company was founded in 2020 by Noa Danon and Tal Shemesh. CEO Danon, who comes from a project management background, said they saw a disconnect between the user and product experience.
The company’s name, EverAfter, comes from the concept that in SaaS companies, someone has to be in charge of the “EverAfter,” with customers, even as the relationship changes, Danon told TechCrunch.
Via its no-code platform, customer success teams are able to build a website in weeks using drop-and-drag widgets like training materials, timelines, task management and meeting summaries, and then configure what each user sees. Then there is a snippet of code that is embedded into the product.
EverAfter also integrates with existing customer relationship management, project management and service ticket tools, while also updating Salesforce and HubSpot directly through an interface.
“It’s like the customer owns a piece of real estate inside the product,” Danon said.
TLV Partners and Vertex Ventures co-led the round and were joined by angel investors Benny Shneider, Zohar Gilon and Amit Gilon.
Yanai Oron, general partner at Vertex Ventures, said he is seeing best-in-breed companies try to solve customer churn or improve the relationship process on their own and failing, which speaks to the complexity of the problem.
Startups in this space are coming online and raising money, but with EverAfter, they are differentiating themselves by not only putting a dashboard on their product, but launching with the capabilities to manage thousands of customers using the product, he added.
“I’ve been tracking the customer success space over the past few years, and it is a growing field with the least sophisticated tools,” Oron said. “During COVID, companies realized it was easier to retain customers rather than get new ones. We are all used to more self-service and wanting to get the answer ourselves, and customers are the same. Companies also started to be more at ease in letting customers develop things on their own and leave R&D departments to do other things.”
Clients include Taboola, AppsFlyer and Verbit, with Verbit reporting its company’s customer success managers save 10 hours a week managing ongoing customer communication by using EverAfter, Danon added. This comes as CallMiner reports that unplanned customer churn costs companies $35.3 billion in the U.S. alone.
EverAfter offers both customer success and partner management software and clients can choose a high-touch service or kits and templates for self-service.
The new funding will enable the company to focus on integration and expansion into additional use cases. Since being founded, EverAfter has grown to 20 employees and 30 customers. The founders also want to utilize the data they are collecting on what works and doesn’t work for each customer.
“There are so many interesting things that happen between companies and customers, from onboarding to business reviews, and we are going to expand on those,” Danon said. “We want to be the first thing companies put inside their product to figure out the relationship between customers and customer success teams and managers.”
By Christine Hall
SellersFunding secured $166.5 million in a combination of Series A equity funding and a credit facility to continue developing its technology and payments platforms for e-commerce businesses.
Northzone led the round and was joined by Endeavor Catalyst and Fasanara. SellersFunding CEO Ricardo Pero did not disclose the funding breakdown, but did say the company previously raised two seed rounds for a total of $40 million in equity and more than $100 million in credit facilities, including one that the company was expanding to $200 million.
SellersFunding, with offices in Florida, New York and London, created a digital platform that delivers financial tools and resources to streamline global commerce for thousands of marketplaces, including working capital, cross-border cash management, tax solutions and business valuation.
Pero got the idea for the company after spending 20 years in the financial industry. He left JP Morgan in 2016 with a drive to start his own company. He was consulting for a friend selling on Amazon who asked him to help make sense of Amazon’s fees and to review the next year’s budget because the friend was struggling to keep up with growth.
“I helped him address the fees issue, but when I went to talk to traditional lenders, I found that they have no clue about e-commerce and the needs of SMEs,” he said.
In addition to being a lending source for businesses selling on these marketplaces, SellersFunding leverages sales data provided by the marketplaces and e-commerce platforms to create sales and cash flow estimates based on the credit limits given to clients so that owners can better understand the fees they are paying and make more informed decisions.
He founded the company in 2017, and today has over 30,000 registered users and is approaching $10 billion in sales volume that is feeding data into SellersFunding’s daily models. The company makes money as both a lender and on fees it charges for payments collected by its customers. Merchants can collect money from marketplaces and pay their suppliers in local or foreign currency.
SellersFunding has consistently grown 300% year over year, Pero said. As such, he intends to use the new funding to scale globally, expand the team, create a marketing budget and look for two small acquisitions in the U.S. and Europe.
The company will continue to invest on the payments side and to promote cross-border payments.
“When I look at the payments landscape, companies are competing on pricing and I don’t think we will ever have a focus there, but instead will compete on customer experience,” Pero added. “Our core business will always be lending and our core investments will be payments and technology, but then we will extend to other services that our clients want.”
With an eye on expanding internationally, it fit to bring on Northzone as a partner, he added. The venture firm is based in Europe and was of a similar vision for thinking globally.
Jeppe Zink, general partner at Northzone, said via email that Pero and his team “are the most experienced in this category” and are building a category leader that is “more experienced and understanding of the lending side than its competitors.”
“We have seen this massive rise in e-shopping, most of the new ones coming from marketplaces like Amazon and Shopify, and if you look at the sellers, thousands are small businesses sourcing their goods which means that they are very important customers,” Zink added. “Normal banks like Barclay can’t check credit. SellersFinding is helping small businesses get this credit, and rightly so. In the same way we thought neobanks won with accounts created when it comes to delivering credit and banking products, they are nowhere to be found yet.”
By Christine Hall
MarginEdge announced Monday it raised $18 million in Series B funding to give restaurant operators a real-time view into their costs.
Co-founder and CEO Bo Davis founded the company with Roy Phillips and Brian Mills in 2015. Both Davis and Phillips are veterans of the restaurant industry: Davis was previously the founder of conveyor belt sushi restaurant chain Wasabi, while Phillips was an executive at Bloomin Brands.
What they recognized with independent restaurants was that they struggled with workflow like invoices and tracking food costs and were either building internal tools to help them stay on top of things or were still operating with pen and paper or spreadsheets.
“We focused on building something our friends would like,” Davis told TechCrunch. “We spent three years on the product and worked with 20 restaurants to use the software and focus on getting it right instead of rushing to market.”
MarginEdge’s tool is a restaurant management app that works with a business’ point of sale to streamline inventory, cost-tracking, ordering and recipes to eliminate the paperwork. It also captures all invoices, receipts or bills and converts them to line-item details within 24 hours. It is designed for independent restaurant owners that have under 50 units, Davis said.
Since launching its app in 2018, the Virginia-based company is seeing its platform used in over 2,500 restaurants. It raised a Series A in 2019, then an A2 in 2020 and with the latest round, led by IGC Hospitality, has raised $25 million in total.
IGC Hospitality, which operates restaurant properties, is not only an investor, but is also a customer, said Jeffrey Brosi, founder and managing partner. The company was using some different technology platforms to manage inventory and sales, but was looking for something to manage its whole inventory process.
“Bo came in and did a presentation, and it was amazing,” Brosi added. “The biggest thing for us is [being] user friendly. MarginEdge also has great customer service. We’ve invested in a few companies in the hospitality industry, and know the pain points and what we want to fix. If it makes sense financially, we will invest. This was one pain point that we didn’t have, and Bo filled that void.”
Like all restaurants over the past 18 months, Davis said the global pandemic caused MarginEdge to step back and evaluate. Despite many restaurants going out of business, he credits his business taking off again to restaurants rethinking their processes.
“We were lucky enough to be in a good position with capital that we could keep our team,” he added. “Revenue decreased for the first time, but we grew 45% even with COVID and as of Q1 was seeing 200% annual growth.”
MarginEdge has over 400 employees and its platform processes 45,000 invoices a week. Davis intends to invest the new funding in building out the leadership team, product development, building new features for the back office and on data science, an area he just received an advanced degree in, he said.
The company is using benchmark data around sales, food costs and labor costs and would like to provide more insights to its customers as it relates to inflation, which affects all of those aspects, and as a result, the menu prices.
“A lot of it is using data to understand menu pricing and what other people are doing so you are not pricing yourself out of the market or operating on margins where you can’t survive,” Davis added. “It will be all about predicting rather than reporting. The two things in the kitchen that are hardest are the startup prep list and the inventory late at night, and we make both easier.”
By Christine Hall
Cresicor, a consumer packaged goods trade management platform startup, raised $5.6 million in seed funding to further develop its tools for more accurate data and analytics.
The company, based remotely, focuses on small to midsize CPG companies, providing them with an automated way to manage their trade promotion, a process co-founder and CEO Alexander Whatley said is done primarily manually using spreadsheets.
Here’s what happens in a trade promotion: When a company wants to run a discount on one of their slower-selling items, the company has to spend money to do this — to have displays set up in a store or have that item on a certain shelf. If it works, more people will buy the item at the lower price point. Essentially, a trade promotion is the process of spending money to get more money in the future, Whatley told TechCrunch.
Figuring out all of the trade promotions is a complicated process, Whatley explained. Companies receive data feeds on the promotions from several different places, revenue data from retailers, accounting source data to show how many units were shipped and then maybe data directly from retailers. All of that has to be matched against the promotion.
“No API is bringing this data back to brands, so our software helps to automate and track these manual processes so companies can do analytics to see how the promotions are doing,” he added. “It also helps the finance team understand expenses, including which are valid and those that are not.”
What certain companies spend on trade promotions can represent their second-largest cost behind manufacturing, and companies often end up reinvesting between 20% and 30% of their revenue into trade promotions, Whatley said. This is a big market, representing untapped growth, especially with U.S. CPG sales topping $720 billion in 2020.
“You can see how messy the whole industry is, which is why we have a bright future and huge TAM,” he added. “With this new funding, we can target other parts of the P&L like supply chain and salaries. We also provide analytics for their strategy and where they should be spending it — which store, on which supply. By allocating resources the right way, companies typically see a 10% boost in sales as a result.”
Whatley started the company in 2017 with his brother, Daniel, Stuart Kennedy and Nikki McNeil while a Harvard undergrad. Since raising the funding back in February, the company has grown 2.5x in revenue, while employee headcount grew 4x over the past 12 months to 20.
Costanoa Ventures led the investment and was joined by Torch Capital and a group of angel investors including Fivestars CTO Matt Doka and Hu’s Kitchen CEO Mark Ramadan.
John Cowgill, partner at Costanoa, said though Cresicor raised a seed round, the company was already acquiring brands and capital before releasing a product and grew to almost a Series A company without any outside capital, saying it “blew me away.”
Cresicor is the “perfect example” of a company that Costanoa would get excited about — a vertical software company using data or machine learning to augment a pain point, Cowgill added.
“The CPG industry is in the middle of a rapid change where we see all of these emerging, digital native and mission-driven brands rapidly eating share from incumbents,” he added. “For the next generation of brands to compete, they have to win in trade promotion management. Cresicor’s opportunity to go beyond trade is significant. It is just a starting point to build a company that is the core enabler of great brands.”
The new funding will be used mainly to hire more talent in the areas of engineering and customer success so the company can hit its next benchmarks, Alexander Whatley said. He also intends to use the funding to acquire new brands and on software development. Cresicor boasts a list of customers including Perfect Snacks, Oatly and Hint Water.
The retail industry is valued at $5.5 trillion, and one-fifth of it is CPG, Whatley said. As a result, he has his eye on going after other verticals within CPG, like electronics and pet food, and then expanding into other areas.
“We are also going to work with enterprise companies — we see an opportunity to work with companies like P&G and General Mills, and we also want to build an ecosystem around trade promotion and launch into other profit and loss areas,” Whatley said.
By Christine Hall