VC’s largest funds make big bets on vertical B2B marketplaces

During the waning days of the first dot-com boom, some of the biggest names in venture capital invested in marketplaces and directories whose sole function was to consolidate information and foster transparency in industries that had remained opaque for decades.

The thesis was that thousands of small businesses were making specialized products consumed by larger businesses in huge industries, but the reach of smaller players was limited by their dependence on a sales structure built on conferences and personal interactions.

Companies making pharmaceuticals, chemicals, construction materials and medical supplies represented trillions in sales, but those huge aggregate numbers hide how fragmented these supply chains are — and how difficult it is for buyers to see the breadth of sellers available.

Now, similar to the way business models popularized by Kozmo.com and Webvan in decades past have since been reincarnated as Postmates and DoorDash, the B2B directory and marketplace rises from the investment graveyard.

The first sign of life for the directory model came with the success of GoodRX back in 2011. The company proved that when information about pricing in a previously opaque industry becomes available, it can unleash a torrent of new demand.


By Jonathan Shieber

Figma raises $50 million Series D led by Andreessen Horowitz

Figma, the design platform that lets folks work collaboratively and in the cloud, has today announced the close of a $50 million Series D financing. The round was led by Andreessen Horowitz, with partner Peter Levine and cofounding partner Marc Andreessen managing the deal for the firm. New angel investors, including Henry Ellenbogen from Durable Capital, also participated in the round alongside existing investors Index, Greylock, KPCB, Sequoia and Founders Fund.

Forbes reports that the latest funding round values Figma at $2 billion.

Figma launched in 2015 after nearly six years of development in stealth. The premise was to create a collaborative, cloud-based design tool that would be the Google Docs of design.

Since, Figma has built out the platform to expand access and usability for individual designers, small firms and giant enterprise companies alike. For example, the company launched plug-ins in 2019, allowing developers to build in their own tools to the app, such as a plug-in for designers to automatically rename and organize their layers as they work (Rename.it) and one that gives users the ability to add placeholder text that they can automatically find and replace later (Content Buddy).

The company also launched an educational platform called Community, which gives designers the ability to share their work and let other users ‘remix’ that design, or simply check out how it was built, layer by layer.

A spokesperson told TechCrunch that this deal was “opportunistic,” and that the company was in a strong cash position pre-financing. The new funding expands Figma’s runway during these uncertain times, with coronavirus halting a lot of enterprise purchasing and ultimately slowing growth of some rising enterprise players.

Figma says that one interesting change they’ve seen in the COVID era is a significant jump in user engagement from teams to collaborate more in Figma. The firm has also seen an uptick in whiteboarding, note taking, slide deck creation and diagramming, as companies start using Figma as a collaborative tool across an entire organization rather than just within a team of designers.


By Jordan Crook

Tecton.ai emerges from stealth with $20M Series A to build machine learning platform

Three former Uber engineers, who helped build the company’s Michelangelo machine learning platform, left the company last year to form Tecton.ai and build an operational machine learning platform for everyone else. Today the company announced a $20 million Series A from a couple of high-profile investors.

Andreessen Horowitz and Sequoia Capital co-led the round with Martin Casado, general partner at a16z and Matt Miller, partner at Sequoia joining the company board under the terms of the agreement. Today’s investment combined with the seed they used to spend the last year building the product comes to $25 million. Not bad in today’s environment.

But when you have the pedigree of these three founders — CEO Mike Del Balso, CTO Kevin Stumpf and VP of Engineering Jeremy Hermann all helped build the Uber system —  investors will spend some money, especially when you are trying to solve a difficult problem around machine learning.

The Michelangelo system was the machine learning platform at Uber that looked at things like driver safety, estimated arrival time and fraud detection, among other things. The three founders wanted to take what they had learned at Uber and put it to work for companies struggling with machine learning.

“What Tecton is really about is helping organizations make it really easy to build production-level machine learning systems, and put them in production and operate them correctly. And we focus on the data layer of machine learning,” CEO Del Balso told TechCrunch.

Image Credit: Tecton.ai

Del Balso says part of the problem, even for companies that are machine learning-savvy, is building and reusing models across different use cases. In fact, he says the vast majority of machine learning projects out there are failing, and Tecton wanted to give these companies the tools to change that.

The company has come up with a solution to make it much easier to create a model and put it to work by connecting to data sources, making it easier to reuse the data and the models across related use cases. “We’re focused on the data tasks related to machine learning, and all the data pipelines that are related to power those models,” Del Balso said.

Certainly Martin Casado from a16z sees a problem in search of a solution and he likes the background of this team and its understanding of building a system like this at scale. “After tracking a number of deep engagements with top ML teams and their interest in what Tecton was building, we invested in Tecton’s A alongside Sequoia. We strongly believe that these systems will continue to increasingly rely on data and ML models, and an entirely new tool chain is needed to aid in developing them…,” he wrote in a blog post announcing the funding.

The company currently has 17 employees and is looking to hire, particularly data scientists and machine learning engineers, with a goal of 30 employees by the end of the year.

While Del Balso is certainly cognizant of the current economic situation, he believes he can still build this company because he’s solving a problem that people genuinely are looking for help with right now around machine learning.

“From the customers we’re talking to, they need to solve these problems, and so we don’t see things slowing down,” he said.


By Ron Miller

Fishtown Analytics raises $12.9M Series A for its open-source analytics engineering tool

Philadelphia-based Fishtown Analytics, the company behind the popular open-source data engineering tool dbt, today announced that it has raised a $12.9 million Series A round led by Andreessen Horowitz, with the firm’s general partner Martin Casada joining the company’s board.

“I wrote this blog post in early 2016, essentially saying that analysts needed to work in a fundamentally different way,” Fishtown founder and CEO Tristan Handy told me, when I asked him about how the product came to be. “They needed to work in a way that much more closely mirrored the way the software engineers work and software engineers have been figuring this shit out for years and data analysts are still like sending each other Microsoft Excel docs over email.”

The dbt open-source project forms the basis of this. It allows anyone who can write SQL queries to transform data and then load it into their preferred analytics tools. As such, it sits in-between data warehouses and the tools that load data into them on one end, and specialized analytics tools on the other.

As Casada noted when I talked to him about the investment, data warehouses have now made it affordable for businesses to store all of their data before it is transformed. So what was traditionally “extract, transform, load” (ETL) has now become “extract, load, transform” (ELT). Andreessen Horowitz is already invested in Fivetran, which helps businesses move their data into their warehouses, so it makes sense for the firm to also tackle the other side of this business.

“Dbt is, as far as we can tell, the leading community for transformation and it’s a company we’ve been tracking for at least a year,” Casada said. He also argued that data analysts — unlike data scientists — are not really catered to as a group.

Before this round, Fishtown hadn’t raised a lot of money, even though it has been around for a few years now, except for a small SAFE round from Amplify.

But Handy argued that the company needed this time to prove that it was on to something and build a community. That community now consists of more than 1,700 companies that use the dbt project in some form and over 5,000 people in the dbt Slack community. Fishtown also now has over 250 dbt Cloud customers and the company signed up a number of big enterprise clients earlier this year. With that, the company needed to raise money to expand and also better service its current list of customers.

“We live in Philadelpha. The cost of living is low here and none of us really care to make a quadro-billion dollars, but we do want to answer the question of how do we best serve the community,” Handy said. “And for the first time, in the early part of the year, we were like, holy shit, we can’t keep up with all of the stuff that people need from us.”

The company plans to expand the team from 25 to 50 employees in 2020 and with those, the team plans to improve and expand the product, especially its IDE for data analysts, which Handy admitted could use a bit more polish.


By Frederic Lardinois

$75M legal startup Atrium shuts down, lays off 100

Justin Kan’s hybrid legal software and law firm startup Atrium is shutting down today after failing to figure out how to deliver better efficiency than a traditional law firm, the CEO tells TechCrunch exclusively. The startup has now laid off all its employees, which totaled just over 100. It will return some of its $75.5 million in funding to investors, including Series B lead Andreessen Horowitz. The separate Atrium law firm will continue to operate.

“I’m really grateful to the customers and the team members who came along with me and our investors. It’s unfortunate that this wasn’t the outcome that we wanted but we’re thankful to everyone that came with us on the journey” said Kan. He’d previously founded Justin.tv which pivoted to become Twitch and later sold to Amazon for $970 million. “We decided to call it and wind down the startup operations. There will be some capital returned to investors post wind-down” Kan told me.

Atrium had attempted a pivot back in January, laying off its in-house lawyers to become a more pure software startup with better margins. Some of its lawyers formed a separate standalone legal firm and took on former Atrium clients. But Kan tells me that it was tough to regain momentum coming out of that change, which some Atrium customers tell me felt chaotic and left them unsure of their legal representation.

More layoffs quietly ensued as divisions connected to those lawyers were eliminated. But trying to build software for third-party lawyers, many of which have entrenched processes and older leadership, proved difficult. The streamlined workflows may not have seemed worth the thrash of adopting new technology.

“If you look at our original business model with the veritcalized law firm, a lot of these companies that have this kind of full stack model are not going to survive” Kan explained. “A lot of these companies, Atrium included, did not figure out how to make a dent in operational efficiency.”

Disrupting Law Firms Proves Difficult

Founded in 2017, Atrium built software for startups to navigate fundraising, hiring, acquisition deals, and collaboration with their legal team. Atrium also offered in-house lawyers that could provide counsel and best practices in these matters. The idea was that the collaboration software would make its lawyers more efficient than a traditional law firm so they could get work done faster, translating to savings for clients and Atrium.

Atrium’s software included Records, a Dropbox-esque system for keeping track of legal documents, and Hiring, which instantly generated employment offer letters based on details punched into a form while keeping track of signatures. The startup hoped it could prevent clients and lawyers from wasting time digging through email chains or missing a sign-off that could put them in legal jeopardy.

The company tried to generate client leads by hosting fundraising workshops for startups, starring Kan and his stories from growing Twitch. A charismatic leader with a near-billion dollar exit under his belt, investors and founders alike were quick to buy into Kan’s vision and advice. Startups saw Atrium as an ally with industry expertise that could help them avoid dirty term sheets or botched hires.

But keeping a large squad of lawyers on staff proved costly. Atrium priced packages of its software and legal assistance under subscriptions, with momentous deals like acquisitions incurring add-on fees. The model relied less on milking clients with steep hourly rates measured down to six-minute increments like most law firms.

Yet eliminating the busy work for lawyers through its software didn’t materialize into bountiful profits. The pivot saught to create a professional services network where Atrium could route clients to attorneys. The layoffs had shaken faith in the startup as clients demanded stability lest they be caught without counsel at a tough time

Rather than trudge on, Kan decided to fold the company. The standalone Atrium law firm will continue to operate under partners Michel Narganes and Matthew Melville, but the startup developing legal software is done.

Atrium’s implosion could send ripples through the legaltech scene, and push other entrepreneurs to start with a more focused software-only approach.


By Josh Constine

ChartHop grabs $5M seed led by a16z to automate the org chart

ChartHop, a startup that aims to modernize and automate the organizational chart, announced a $5 million seed investment today led by Andreessen Horowitz.

A big crowd of other investors also participated including Abstract Ventures, the a16z Cultural Leadership Fund, CoFound, Cowboy Ventures, Flybridge Capital, Shrug Capital, Work Life Ventures and a number of unnamed individual investors, as well.

Founder, CEO and CTO, Ian White says that at previous jobs including as CTO and co-founder at Sailthru, he found himself frustrated by the available tools for organizational planning, something that he says every company needs to get a grip on.

White did what any good entrepreneur would do. He left his previous job and spent the last couple of years building the kind of software he felt was missing in the market. “ChartHop is the first org management platform. It’s really a new type of HR software that brings all the different people data together in one place, so that companies can plan, analyze and visualize their organizations in a completely new way,” White told TechCrunch.

While he acknowledges that among his early customers, the Head of HR is a core user, White doesn’t see this as purely an HR issue. “It’s a problem for any executive, leader or manager in any organization that’s growing and trying to plan what the organization is going to look like more strategically,” he explained.

Lead investor at a16z David Ulevitch, also sees this kind of planning as essential to any organization. “How you structure and grow your organization has a tremendous amount of influence on how your company operates. This sounds so obvious, and yet most organizations don’t act thoughtfully when it comes to organizational planning and design,” Ulevitch wrote in a blog post announcing the investment.

The way it works is that out of the box it connects to 15 or 20 standard types of company systems like BambooHR, Carta, ADP and Workday, and based on this information it can build an organizational chart. The company can then slice and dice the data by department, open recs, gender, salary, geography and so forth. There is also a detailed reporting component that gives companies insight into the current makeup and future state of the organization.

The visual org chart itself is set up so that you can scrub through time to see how your company has changed. He says that while it is designed to hide sensitive information like salaries, he does see it as a way of helping employees across the organization understand where they fit and how they relate to other people they might not even know because the size of the company makes that impossible.

ChartHop org chart organized by gender. Screenshot: ChartHop

White says that he has dozens of customers already, who are paying ChartHop by the employee on a subscription basis. While his target market is companies with more than 100 employees, at some point he may offer a version for early-stage startups who could benefit from this type of planning, and could then have a complete history of the organization over the life of the company.

Today, the company has 9 employees, and he only began hiring in the fall when this seed money came through. He expects to double that number in the next year.


By Ron Miller

Symantec’s Sheila Jordan named to Slack’s board of directors

Workplace collaboration software business Slack (NYSE: WORK) has added Sheila Jordan, a senior vice president and chief information officer of Symantec, as an independent member of its board of directors. The hiring comes three months after the business completed a direct listing on the New York Stock Exchange.

Jordan, responsible for driving information technology strategy and operations for Symantec, brings significant cybersecurity expertise to Slack’s board. Prior to joining Symantec in 2014, Jordan was a senior vice president of IT at Cisco and an executive at Disney Destination for nearly 15 years.

With the new appointment, Slack appears to be doubling down on security. In addition to the board announcement, Slack recently published a blog post outlining the company’s latest security strategy in what was likely part of a greater attempt to sway potential customers — particularly those in highly regulated industries — wary of the company’s security processes. The post introduced new features, including the ability to allow teams to work remotely while maintaining compliance to industry and company-specific requirements.

Jordan joins Slack co-founder and chief executive officer Stewart Butterfield, former Goldman Sachs executive Edith Cooper, Accel general partner Andrew Braccia, Nextdoor CEO Sarah Friar, Andreessen Horowitz general partner John O’Farrell, Social Capital CEO Chamath Palihapitiya and former Salesforce chief financial officer Graham Smith on Slack’s board of directors.

“I believe there is nothing more critical than driving organizational alignment and agility within enterprises today,” Jordan said in a statement. “Slack has developed a new category of enterprise software to help unlock this potential and I’m thrilled to now be a part of their story.”

Slack closed up nearly 50% on its first day of trading in June but has since stumbled amid reports of increased competition from Microsoft, which operates a Slack-like product called Teams.

Slack co-founder and chief technology officer Cal Henderson will join us onstage at TechCrunch Disrupt San Francisco next week to discuss the company’s founding, road to the public markets and path forward. Buy tickets here.


By Kate Clark

Fivetran hauls in $44M Series B as data pipeline business booms

Fivetran, a startup that helps companies move data from disparate repositories to data warehouses, announced $44 million Series B financing today, less than a year after collecting a $15 million Series A round.

Andreessen Horowitz (A16Z) led the round with participation from existing investors Matrix Partners and CEAS Investments. As part of the deal, Martin Casado from A16Z will join the Fivetran board. Today’s investment brings the total raised to over $59 million, according to Crunchbase.

Company co-founder and CEO George Fraser said they raised a little sooner than expected, but they needed a cash infusion to keep up with the steady growth they have been seeing. He said the company also wanted to get the funding done while the capital markets were still strong. “If we wait four months or six months, the terms are not going to be that much better — and, who knows, there could be a recession. You never know how long the sun shines, and we had interest from some really good firms that we liked, and that’s a big factor too obviously.” he said.

He added that it’s not purely an economic decision. “We’re really happy with where we landed with Martin [Casado] joining the board and Andreessen Horowitz on the cap table, but [the economic outlook] was definitely part of our calculus.”

And Casado is happy to have invested in Fivetran. Writing in a blog post today about the investment, he sees a company that’s solving a big problem in a modern context. “Fivetran is a SaaS service that connects to the critical data sources in an organization, pulls and processes all the data, and then dumps it into a warehouse (e.g., Snowflake, BigQuery or RedShift) for SQL access and further transformations, if needed. If data is the new oil, then Fivetran is the pipes that get it from the source to the refinery,” he wrote.

He said that the company already has over 750 customers and A16Z is included among them. It certainly doesn’t hurt when your lead investor uses your product.

The company was founded in 2012 and has been growing steadily. Last year it 80 employees at the time of its Series A and today it has 175. Fraser expects that to double again over the next year, and it’s all driven by business needs. He says that over the last 12 months revenue has grown 3x.

With 150 connectors today, the company wants to continue to expand its array of data connection tools and cover more data requirements. But he says the connectors are complicated and that will take an investment in more engineering talent. Today’s announcement should help in that regard.


By Ron Miller

Work Life Ventures raises $5M for debut enterprise SaaS seed fund

Brianne Kimmel had no trouble transitioning from angel investor to general partner.

Initially setting out to garner $3 million in capital commitments, Kimmel, in just two weeks’ time, closed on $5 million for her debut venture capital fund Work Life Ventures. The enterprise SaaS-focused vehicle boasts an impressive roster of limited partners, too, including the likes of Zoom chief executive officer Eric Yuan, InVision CEO Clark Valberg, Twitch co-founder Kevin Lin, Cameo CEO Steven Galanis, Andreessen Horowitz general partners’ Marc Andreessen and Chris Dixon, Initialized Capital GP Garry Tan and fund-of-funds Slow Ventures, Felicis Ventures and NFX.

At the helm of the new fund, Kimmel joins a small group of solo female general partners. Dream Machine’s Alexia Bonatsos is targeting $25 million for her first fund. Day One Ventures’ Masha Drokova raised an undisclosed amount for her debut effort last year. Sarah Cone launched Social Impact Capital, a fund specializing in impact investing, in 2016, among others.

Meanwhile, venture capital fundraising is poised to reach all-time highs in 2019. In the first half of the year, a total of $20.6 billion in new capital was introduced to the startup market across more than 100 funds.

For most, the process of raising a successful venture fund can be daunting and difficult. For well-connected and established investors in the Bay Area, like Kimmel, raising a fund can be relatively seamless. Given the speed and ease of fund one in Kimmel’s case, she plans to raise her second fund with a $25 million target in as little as 12 months.

“The desire for the fund is to take a step back and imagine how do we build great consumer experiences in the workplace,” Kimmel tells TechCrunch.

Kimmel has been an active angel investor for years, sourcing top enterprise deals via SaaS School, an invite-only workshop she created to educate early-stage SaaS founders on SaaS growth, monetization, sales and customer success. Prior to launching SaaS School, which will continue to run twice a year, Kimmel led go-to-market strategy at Zendesk, where she built the Zendesk for Startups program.

 

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“You start by advising, then you start with very small angel checks,” Kimmel explains. “I reached this inflection point and it felt like a great moment to raise my own fund. I had friends like Ryan Hoover, who started Weekend Fund focused on consumer, and Alexia is one of my friends as well and I saw what she was doing with Dream Machine, which is also consumer. It felt like it was the right time to come out with a SaaS-focused fund.”

Emerging from stealth today, Work Life Ventures will invest up to $150,000 per company. To date, Kimmel has backed three companies with capital from the fund: Tandem, Dover and Command E. The first, Tandem, was amongst the most coveted deals in Y Combinator’s latest batch of companies. The startup graduated from the accelerator with millions from Andreessen Horowitz at a valuation north of $30 million.

Dover, another recent YC alum, provides recruitment software and is said to be backed by Founders Fund in addition to Work Life. Command E, currently in beta, is a tool that facilities search across multiple desktop applications. Kimmel is also an angel investor in Webflow, Girlboss, TechCrunch Disrupt 2018 Startup Battlefield winner Forethought, Voyage and others.

Work Life is betting on the consumerization of the enterprise, or the idea that the next best companies for modern workers will be consumer-friendly tools. In her pitch deck to LPs, she cites the success of Superhuman and Notion, a well-designed email tool and a note-taking app, respectively, as examples of the heightened demand for digestible, easy-to-use B2B products.

“The next generation of applications for the workplace sees people spinning out of Uber, Coinbase and Airbnb,” Kimmel said. “They’ve faced these challenges inside their highly efficient tech company so we are seeing more consumer product builders deeply passionate about the enterprise space.”

But Kimmel doesn’t want to bury her thesis in jargon, she says, so you won’t find any B2B lingo on Work Life’s website or Instagram.

She’s focusing her efforts on a more important issue often vacant from conversations surrounding investment in the future of work: diversity & inclusion.

Kimmel meets with every new female hire of her portfolio companies. Though it’s “increasingly non-scalable,” she admits, it’s part of a greater effort to ensure her companies are thoughtful about D&I from the beginning: “Because I have a very focused fund, it’s about maintaining this community and ensuring that people feel like their voices are heard,” she said.

“I want to be mindful that I am a female GP and I feel honored to have that title.”


By Kate Clark

Visa funds $40M for no-password crypto vault Anchorage

Visa and Andreessen Horowitz are betting even bigger on cryptocurrency, funding a big round for fellow Facebook Libra Association member Anchorage’s omnimetric blockchain security system. Instead of using passwords that can be stolen, Anchorage requires cryptocurrency withdrawals to be approved by a client’s other employees. Then the company uses both human and AI review of biometrics and more to validate transactions before they’re executed, while offering end-to-end insurance coverage.

This new-age approach to cryptocurrency protection has attracted a $40 million Series B for Anchorage led by Blockchain Capital and joined by Visa and Andreessen Horowitz. The round adds to Anchorage’s $17 million Series A that Andreessen led just six months ago, demonstrating extraordinary momentum for the security startup.

As a custodian, our work is focused on building financial plumbing that other companies depend on for their operations to run smoothly. In this regard we have always looked at Visa as a model” Anchorage co-founder and president Diogo Mónica tells me.

“Visa was ‘fintech’ before the term existed, and has always been on the vanguard of financial infrastructure. Visa’s investment in Anchorage is helpful not only to our company but to our industry, as a validation of the entire ecosystem and a recognition that crypto will play a key role in the future of global finance.”

Anchorage Crypto 1

Cold-storage, where assets are held in computers not connected to the Internet, has become a popular method of securing Bitcoin, Ether, and other tokens. But the problem is that this can prevent owners from participating in governance of certain cryptocurrency where votes are based on their holdings, or earning dividends. Anchorage tells me it’s purposefully designed to permit this kind of participation, helping clients to get the most out of their assets like capturing returns from staking and inflation, or joining in on-chain governance.

As 3 of the 28 founding members of the Libra Association that will govern the new Facebook-incubated cryptocurrency; Anchorage, Visa, and Andreessen Horowitz will be responsible for ensuring the stablecoin stays secure. While Facebook is building its own custodial wallet called Calibra for users, other Association members and companies hoping to dive into the ecosystem will need ways to protect their Libra stockpiles.

“Libra is exactly the kind of asset that Anchorage was created to hold” Mónica wrote the day Libra was revealed. “Our custody solution , so that asset-holders don’t face a trade-off between security and usability.” The company believes that custodians shouldn’t dictate what coins their clients hold, so it’s working to support all types of digital assets. Anchorage tells me that will include support for securing Libra in the future.

Libra Association Founding Partners

You’ve probably already used technology secured by Anchorage’s founders, who engineered Docker’s containers that are used by Microsoft, and Square’s first encrypted card reader. Mónica was at Square when he met his future Anchorage co-founder Nathan McCauley who’d been working on anti-reverse engineering tech for the U.S. military. When a company that had lost the password to a $1 million cryptocurrency account asked for their help with security, they recognized a recognized the need for a more idiot-proof take on asset protection.

“Anchorage applies the best of modern security engineering for a more advanced approach: we generate and store private keys in secure hardware so they are never exposed at any point in their life cycle, and we eliminate human operations that expose assets to risk” Mónica says. The startup competes with other crypto custody firms like Bitgo, Ledger, Coinbase, and Gemini.

Anchorage CryptocurrencyLast time we spoke, Anchorage was cagey about what I could reveal regarding how its transaction validation system worked. With the new funding, it’s feeling a little more secure about its market position and was willing to share more.

Anchorage ditches usernames, passwords, email addresses, and phone numbers completely. That way a hacker can’t just dump your coins into their account by stealing your private key or SIM-porting your number to their phone. Instead, clients whitelist devices held by their employees, who use the Anchorage app to submit transactions. You’d propose selling $10 million worth of Bitcoin or transferring it to someone else as payment, and a minimum of two-thirds of your designated co-workers would need to concur to form a quorum that approves the transfer.

But first, Anchorage would’s artificial intelligence and human staff would check for any suspicious signals that might indicate a hack in progress. It uses behavioral analysis (do you act like a real human and similar to how you have before), biometric signals (do you look like you), and network signals (is your device what and where it should be) to confirm the transaction is legitimate. The same process goes down if you try to add a new whitelisted device or change who has permission to do what.

The challenge will be scaling security to an ever-broadening range of digital assets, each with their own blockchain quirks and complex smart contracts. Even if Anchorage keeps coins safely in custody, those variables could expose assets to risk while in transit. Now with deeper pockets and the Visa vote of confidence, Anchorage could solve those problems as clients line up.

While most blockchain attention has focused on the cryptocurrencies themselves and the exchanges where you can buy and sell them, a second order of critical infrastructure startups is emerging. Companies like Anchorage could make Bitcoin, Ether, Libra, and more not just objects of speculation or the domain of experts, but safely functioning elements of the new world economy.


By Josh Constine

Orderful nabs $10M from A16Z to modernise the B2B supply chain network

The march of globalization continues unabated, and with it comes a growing demand for companies of all sizes to communicate with and sell to each other, regardless of the distance or any other barrier. Now, a startup that has built a platform to help them do that better and more cheaply is announcing a round of funding to capitalize on the opportunity. Orderful, which aims to modernize supply chain management through an API-based cloud service, has raised $10 million in a Series A from Andreessen Horowitz.

The new funding comes on the back of a previous seed round from Initialized Capital and a period of time mostly bootstrapping the business. It will be used to continue building out more functionality on the platform and to continue to expand the network of partners using it. Today there are 1,000 retailers, 10,000 vendors and 5,000 carriers on Orderful’s platform, but even that still only represents a small part of the wider industry of businesses that buy, sell and transport components and full products from A to B.

To understand the problem that Orderful is trying to fix, a little rundown on how supply chain management works today is helpful. In the old, pre-computer days, all information exchange happened by way of phone, fax, post, and documents that often were delivered along with goods, which all required manual assessment and recording.

The rise of computers and the internet did push that system into the digital world, but only just: electronic data interchange (EDI), as this general area is known, is a loosely organised set of technical standards to use computers to communicate this data between businesses to enable purchases, make accounting reconciliations, and transfer shipping details.

It’s a business that has boomed with the growth of globalization and companies trading with each other at an increasing pace. Supply chain management software is a market that ballooned to $14 billion in value in 2018, according to Gartner. Incumbent leaders include the likes of SAP, Oracle and JDA.

The problem is that EDI is actually not as easy as it ought to be. It’s a hodge-podge of standards, you usually need a team of specialists to integrate the services at each end point, and it doesn’t allow for a wider network effect that you might get from being “online” with one supplier already. All of that translates to it being actually quite slow and expensive.

Erik Kiser, the founder and CEO of Orderful, found and identified this inefficiency while he was working as one of those specialists, realizing that with the rise of APIs, large database technology and cloud-based software-as-a-service, there was an opportunity to build a new kind of platform that could do everything that EDI did, but on a supercharged basis.

Marc Andreessen (co-founder of A16Z) coined the phrase ‘software will eat the world,’ Kiser noted to me, “But actually software eats software sometimes, too.”

The idea behind Orderful is that it has created a series of APIs that can adapt to whatever systems a business is already using, in turn “translating” that business’s product and other data into information that can be imported into the Orderful platform to in turn be picked up by buyers, sellers, and shippers.

(In other words, there is no expectation of ripping out legacy systems, but simply creating bridges to migrate what is already there to newer and better platforms.) This also brings down the operational costs of hiring teams to build and potentially run EDI integrations.

“EDI predates the internet, and there are not many digital protocols that we use today that are pre-internet,” David Ulevitch, the partner at Andreessen Horowitz who led the investment and joined the board, said in an interview.

“Orderful, and Erik, recognised that as more commerce was becoming digital, there needed to be a better way to do all this. There is currently no SaaS company out there addressing this and removing the friction. It provides velocity between distributors and producers because when you connect once you can then trade with a number of partners. Time is up for EDI.”

While there may be no direct competitor to Orderful at the moment, there are a lot of potential players that I can see posing a challenge down the line (or potentially working with or even buying Orderful if not). They include the incumbents in supply-chain management like Oracle, SAP and the rest.

But also companies like Amazon, which has built its own EDI alternative (or version, you might say) that is used for its own management of suppliers. The company is very well known for building for itself, and then productizing, but for now Kiser says that it’s a partner, and customers can interface and sell to Amazon on Orderful using its APIs.

One thing that Amazon is instructive about, though, is when considering how Orderful’s data trove could be used for more analytics and business intelligence down the line.

“I don’t think companies not doing business with Amazon will be inclined to use its platform for trading,” Kiser said. “But they do have a lot of information about their network.”

Indeed, he pointed out that it’s been said there are some 30 economists at the company looking at its B2B supply chain data, and considering how it can be parsed for example to predict inflation.

“They are already using the data. With Orderful we have the opportunity to be the most influential software company if we can be the plumbing that connects companies,” Kiser said. “There are a ton of services that we can add on the platform and that’s where we are going even if right now we are focused on the plumbing and simply making it easy to trade data.”

 


By Ingrid Lunden

Apollo raises $22M for its GraphQL platform

Apollo, a San Francisco-based startup that provides a number of developer and operator tools and services around the GraphQL query language, today announced that it has raised a $22 million growth funding round co-led by Andreessen Horowitz and Matrix Partners. Existing investors Trinity Ventures and Webb Investment Network also participated in this round.

Today, Apollo is probably the biggest player in the GraphQL ecosystem. At its core, the company’s services allow businesses to use the Facebook-incubated GraphQL technology to shield their developers from the patchwork of legacy APIs and databases as they look to modernize their technology stacks. The team argues that while REST APIs that talked directly to other services and databases still made sense a few years ago, it doesn’t anymore now that the number of API endpoints keeps increasing rapidly.

Apollo replaces this with what it calls the Data Graph. “There is basically a missing piece where we think about how people build apps today, which is the piece that connects the billions of devices out there,” Apollo co-founder and CEO Geoff Schmidt told me. “You probably don’t just have one app anymore, you probably have three, for the web, iOS and Android . Or maybe six. And if you’re a two-sided marketplace you’ve got one for buyers, one for sellers and another for your ops team.” Managing the interfaces between all of these apps quickly becomes complicated and means you have to write a lot of custom code for every new feature. The promise of the Data Graph is that developers can use GraphQL to query the data in the graph and move on, all without having to write the boilerplate code that typically slows them down. At the same time, the ops teams can use the Graph to enforce access policies and implement other security features.

“If you think about it, there’s a lot of analogies to what happened with relational databases in the 80s,” Schmidt said. “There is a need for a new layer in the stack. Previously, your query planner was a human being, not a piece of software, and a relational databased is a piece of software that would just give you a database. And you needed a way to query that database and that syntax was called SQL.”

Geoff Schmidt, Apollo CEO, and Matt DeBergalis, CTO.

GraphQL itself, of course, is open source. Apollo is now building a lot of the proprietary tools around this idea of the Data Graph that make it useful for businesses. There’s a cloud-hosted graph manager, for example, that lets you track your schema, as well as a dashboard to track performance, as well as integrations with continuous integration services. “It’s basically a set of services that keep track of the metadata about your graph and help you manage the configuration of your graph and all the workflows and processes around it,” Schmidt said.

The development of Apollo didn’t come out of nowhere. The founders previously launched Meteor, a framework and set of hosted services that allowed developers to write their apps in JavaScript, both on the front-end and back-end. Meteor was tightly coupled to MongoDB, though, which worked well for some use cases but also held the platform back in the long run. With Apollo, the team decided to go in the opposite direction and instead build a platform that makes being database agnostic the core of its value proposition.

The company also recently launched Apollo Federation, which makes it easier for businesses to work with a distributed graph. Sometimes, after all, your data lives in lots of different places. Federation allows for a distributed architecture that combines all of the different data sources into a single schema that developers can then query.

Schmidt tells me that the company started to get some serious traction last year and by December, it was getting calls from VCs that heard from their portfolio companies that they were using Apollo.

The company plans to use the new funding to build out its technology to scale its field team to support the enterprises that bet on its technology, including the open source technologies that power both the service.

“I see the Data Graph as a core new layer of the stack, just like we as an industry invested in the relational databased for decades, making it better and better,” Schmidt said. “We’re still finding new uses for SQL and that relational database model. I think the Data Graph is going to be the same way.”


By Frederic Lardinois

Colombian point-of-sale lender ADDI nabs $12.5 million from Andreessen Horowitz

Andreessen Horowitz <3 Latin American startups.

Latin America is the only region outside of the U.S. where the venture firm is routinely investing capital, and it just made another commitment, doubling down on its early-stage support for the point-of-sale lending startup ADDI.

ADDI picked up $12.5 million in new financing in April of this year as the company looks to expand its lending services online.

For an American audience, the closest corollary to what ADDI is up to is likely Affirm, the point-of-sale lender that’s raised a ton of cash and come in for some (valid) criticism for its basic business model.

Like Affirm, ADDI lets its borrowers apply for credit at the moment of purchase. The company likens its service to the layaway and credit plans that already exist in Colombia — but involve pretty onerous requirements to use. Company co-founder Santiago Suarez and Andreessen Horowitz general partner Angela Strange both commented on how, in some cases, Colombian shoppers have to have three people vouch for a borrower before a store will issue credit or agree to a layaway plan.

The difference between an ADDI loan — or any loan — and layaway is that an installment payment plan doesn’t charge interest (and even with the fees that installment plans do charge, they are often still cheaper than taking out a loan).

But financial products are coming for consumers in Latin America whether those buyers like it or not — and for the most part, it seems they do like it.

Historically, only the wealthiest clientele in Latin America received anything resembling the kinds of financial products that are more widely available in the United States, according to Strange. And the investment in ADDI is just part of her firm’s thesis in trying to make more services more broadly available in a region where a technological transformation is creating unprecedented opportunities for challengers.

That assessment is what drew Santiago Suarez back to Latin America only two years ago. A former executive at Lending Club who previously had worked as the head of New Product Development and Emerging Services at J.P. Morgan, Suarez saw the tremendous growth happening in Latin America and returned to Colombia to see if he could bring some much needed services to his home country.

Suarez partnered with his childhood friend, Elmer Ortega, who was working as the chief technology officer of the local hedge fund where he had previously been employed as a derivatives trader before learning how to code.

Together, the two men, who had known each other since they were five years old, set out to transform how credit was offered in retail shops. It’s an industry that Suarez had known well since his parents had owned stores.

“In the U.S. there are all of these gaps that fintech companies are filling,” says Suarez. “But the gaps in Latin America are bigger.”

Suarez and Ortega incorporated the company in September 2018, around the same time they raised $2.3 million from the regional investment firm, Monashees, Andreessen and Village Global. They then raised another $1.5 million in an internal round of financing before closing the most recent funding.

The company offers loans at annual percentage rates ranging from 19.99% to 28.90%. The company started with a digital solution for brick and mortar retailers because 90% of retail in Colombia still happens offline. 

Although it’s in its early days, the company has already originated 10,000 borrowers and typically loans out roughly $500 since it launched on February 22, according to Suarez. He declined to comment on the company’s default rate on loans.

Now with 40 employees on staff, the company is looking to bring its lending tool to more e-commerce and physical retailers, according to Suarez. And despite the threat of cyclical political turmoil, Suarez says there’s no better time to be investing in Colombia. 

“It’s the most stable country outside of Chile… Way more stable than Brazil, way more stable than Argentina and way more stable than Mexico,” Suarez says. “What we’re looking at is more than cyclical instability… those things go beyond that. Nubank was able to build a multibillion business in the worst political and economic crisis in Brazil’s history. I think Colombia is an incredibly attractive space with a deep talent pool.”


By Jonathan Shieber

Slack to livestream pitch to shareholders on Monday ahead of direct listing

Slack, the ubiquitous workplace messaging tool, will make its pitch to prospective shareholders on Monday at an invite-only event in New York City, the company confirmed in a blog post on Wednesday. Slack stock is expected to begin trading on the New York Stock Exchange as soon as next month.

Slack, which is pursuing a direct listing, will livestream Monday’s Investor Day on its website.

An alternative to an initial public offering, direct listings allow businesses to forgo issuing new shares and instead sell existing shares held by insiders, employees and investors directly to the market. Slack, like Spotify, has been able to bypass the traditional roadshow process expected of an IPO-ready business, as well as some of the exorbitant Wall Street’s fees.

Spotify, if you remember, similarly livestreamed an event that is typically for investor’s eyes only. If Slack’s event is anything like the music streaming giant’s, Slack co-founder and chief executive officer Stewart Butterfield will speak to the company’s greater mission alongside several other executives.

Slack unveiled documents for a public listing two weeks ago. In its SEC filing, the company disclosed a net loss of $138.9 million and revenue of $400.6 million in the fiscal year ending January 31, 2019. That’s compared to a loss of $140.1 million on revenue of $220.5 million for the year before.

Additionally, the company said it reached 10 million daily active users earlier this year across more than 600,000 organizations.

Slack has previously raised a total of $1.2 billion in funding from investors including Accel, Andreessen Horowitz, Social Capital, SoftBank, Google Ventures and Kleiner Perkins.


By Kate Clark

Okta unveils $50M in-house venture capital fund

Identity management software provider Okta, which went public two years ago in what was one of the first pure-cloud subscription-based company IPOs, wants to fund the next generation of identity, security and privacy startups.

At its big customer conference Oktane, where the company has also announced a new level of identity protection at the server level, chief operating officer Frederic Kerrest (pictured above, right, with chief executive officer Todd McKinnon) will unveil a $50 million investment fund meant to back early-stage startups leveraging artificial intelligence, machine learning and blockchain technology.

“We view this as a natural extension of what we are doing today,” Okta senior vice president Monty Gray told TechCrunch. Gray was hired last year to oversee corporate development, i.e. beef up Okta’s M&A strategy.

Gray and Kerrest tell TechCrunch that Okta Ventures will invest capital in existing Okta partners, as well as other companies in the burgeoning identity management ecosystem. The team managing the fund will look to Okta’s former backers, Sequoia, Andreessen Horowitz and Greylock, for support in the deal sourcing process.

Okta Ventures will write checks sized between $250,000 and $2 million to eight to 10 early-stage businesses per year.

“It’s just a way of making sure we are aligning all our work and support with the right companies who have the right vision and values because there’s a lot of noise around identity, ML and AI,” Kerrest said. “It’s about formalizing the support strategy we’ve had for years and making sure people are clear of the fact we are helping these organizations build because it’s helpful to our customers.”

Okta Ventures’ first bet is Trusted Key, a blockchain-based digital identity platform that previously raised $3 million from Founders Co-Op. Okta’s investment in the startup, founded by former Microsoft, Oracle and Symantec executives, represents its expanding interest in the blockchain.

“Blockchain as a backdrop for identity is cutting edge if not bleeding edge,” Gray said.

Okta, founded in 2009, had raised precisely $231 million from Sequoia, Andreessen Horowitz, Greylock, Khosla Ventures, Floodgate and others prior to its exit. The company’s stock has fared well since its IPO, debuting at $17 per share in 2017 and climbing to more than $85 apiece with a market cap of $9.6 billion as of Tuesday closing.


By Kate Clark