Germany’s Xentral nabs $20M led by Sequoia to help online-facing SMBs run back offices better

Small enterprises remain one of the most underserved segments of the business market, but the growth of cloud-based services — easier to buy, easier to provision — has helped that change in recent years. Today, one of the more promising startups out of Europe building software to help SMEs run online businesses is announcing some funding to better tap into both the opportunity to build these services, and to meet a growing demand from the SME segment.

Xentral, a German startup that develops enterprise resource planning software covering a variety of back-office functions for the average online small business, has picked up a Series A of $20 million.

The company’s platform today covers services like order and warehouse management, packaging, fulfillment, accounting and sales management, and the majority of its 1,000 customers are in Germany — they include the likes of direct-to-consumer brands like YFood, KoRo, the Nu Company and Flyeralarm.

But Benedikt Sauter, the co-founder and CEO of Xentral, said the ambition is to expand into the rest of Europe, and eventually other geographies, and to fold in more services to its ERP platform, such as a more powerful API to allow customers to integrate more services — for example in cases where a business might be selling on their own site, but also Amazon, eBay, social platforms and more — to bring their businesses to a wider market.

Mainly, he said, the startup wants “to build a better ecosystem to help our customers run their own businesses better.”

The funding is being led by Sequoia Capital, with Visionaires Club (a B2B-focused VC out of Berlin) also participating.

The deal is notable for being the prolific, high-profile VC’s first investment in Europe since officially opening for business in the region. (Sequoia has backed a number of startups in Europe before this, including Graphcore, Klarna, Tessian, Unity, UiPath, n8n and Evervault — but all of those deals were done from afar.)

Augsburg-based Xentral has been around as a startup since 2018, and “as a startup” is the operative phrase here.

Sauter and his co-founder Claudia Sauter (who is also his co-founder in life: she is his wife) built the early prototype for the service originally for themselves.

The pair were running a business of their own — a hardware company they founded in 2008, selling not nails, hammers and wood, but circuit boards they they designed, along with other hardware to build computers and other connected objects. Around 2013, as the business was starting to pick up steam, they decided that they really needed better tools to manage everything at the backend so that they would have more time to build their actual products.

But Bene Sauter quickly discovered a problem in the process: smaller businesses may have Shopify and its various competitors to help manage e-commerce at the front end, but when it came to the many parts of the process at the backend, there really wasn’t a single, easy solution (remember this was eight years ago, at a time before the Shopifys of the world were yet to expand into these kinds of tools). Being of a DIY and technical persuasion — Sauter had studied hardware engineering at university — he decided that he’d try to build the tools that he wanted to use himself.

The Sauters used those tools for for years, until without much outbound effort, they started to get a some inbound interest from other online businesses to use the software, too. That led to the Sauters balancing both their own hardware business and selling the software on the side, until around 2017/2018 when they decided to wind down the hardware operation and focus on the software full-time. And from then, Xentral was born. It now has, in addition to 1,000 customers, some 65 employees working on developing the platform.

The focus with Xentral is to have a platform that is easy to implement and use, regardless of what kind of SME you might be as long as you are selling online. But even so, Sauter pointed out that the other common thread is that you need at least one person at the business who champions and understands the value of ERP. “It’s really a mindset,” he said.

The challenge with Xentral in that regard will be to see how and if they can bring more businesses to the table and tap into the kinds of tools that it provides, at the same time that a number of other players also eye up the same market. (Others in the same general category of building ERP for small businesses include online payments provider Sage, Netsuite and Acumatica.) ERP overall is forecast to become a $49.5 billion market by 2025.

Sequoia and its new partner in Europe Luciana Lixandru — who is joining Xentral’s board along with Luciana Lixandru and Visionaries’ Robert Lacher — believe however that there remains a golden opportunity to build a new kind of provider from the ground up and out of Europe specifically to target the opportunity in that region.

“I see Xentral becoming the de facto platform for any SMEs to run their businesses online,” she said in an interview. “ERP sounds a bit scary especially because it makes one think of companies like SAP, long implementation cycles, and so on. But here it’s the opposite.” She describes Xentral as “very lean and easy to use because you an start with one module and then add more. For SMEs it has to be super simple. I see this becoming like the Shopify for ERP.”


By Ingrid Lunden

German Bionic raises $20M led by Samsung for exoskeleton tech to supercharge human labor

Exoskeleton technology has been one of the more interesting developments in the world of robotics: instead of building machines that replace humans altogether, build hardware that humans can wear to supercharge their abilities. Today, German Bionic, one of the startups designing exoskeletons specifically aimed at industrial and physical applications — it describes its Cray X robot as “the world’s first connected exoskeleton for industrial use,” that is, to help people lifting and working with heavy objects with more power, precision and safety — is announcing a funding round that underscores the opportunity ahead.

The Augsburg, Germany-based company has raised $20 million, funding that it plans to use to continue building out its business, as well as its technology, both in terms of the hardware and the cloud-based software platform, German Bionic IO, that works with the exoskeletons to optimize them and help them “learn” to work better.

The Cray X currently can compensate up to 30 kg for each lifting movement, the company says.

“With our groundbreaking robotic technology that combines human work with the industrial Internet of Things (IIoT), we literally strengthen the shop floor workers’ backs in an immediate and sustainable way. Measurable data underscores that this ultimately increases productivity and the efficiency of the work done,” says Armin G. Schmidt, CEO of German Bionic, in a statement. “The market for smart human-machine systems is huge and we are now perfectly positioned to take a major share and substantially improve numerous working lives.”

The Series A is being co-led by Samsung Catalyst Fund, a strategic investment arm from the hardware giant, and German investor MIG AG, one of the original backers of BioNtech, the breakthrough company that’s developed the first Covid-19 vaccine to be rolled out globally.

Storm Ventures, Benhamou Global Ventures (founded and led by Eric Benhamou, who was the founding CEO of Palm and before that the CEO of 3com), and IT Farm all also participated. Previously, German Bionic had only raised $3.5 million in seed funding (with IT Farm, Atlantic Labs, and individual investors participating).

German Bionic’s rise comes at an interesting moment in terms of how automation and cloud technology are sweeping the world of work. When people talk about the next generation of industrial work, the focus is usually on more automation and the rise of robots to replace humans in different stages of production.

But at the same time, some robotics technologists have worked on another idea. Since we’re still probably still a long way away unable to make robots that are just like humans but better in terms of cognition and all movements, instead, create hardware that doesn’t replace, but augments, live laborers, to help make them stronger while still being able to retain the reliable and fine-tuned expertise of those humans.

The argument for more automation in industrial settings has taken on a more pointed urgency in recent times, with the rise of the Covid-19 global health pandemic: factories have been one of the focus points for outbreaks, and the tendency has been to reduce physical contact and proximity to reduce the spread of the virus.

Exoskeletons don’t really address that aspect of Covid-19 — even if you might require less of them as a result of using exoskeletons, you still require humans to wear them, after all — but the general focus that automation has had has brought more attention to the opportunity of using them.

And in any case, even putting the pandemic to one side, we are still a long way away from cost-effective robots that completely replace humans in all situations. So, as we roll out vaccinations and develop a better understanding of how the virus operates, this still means a strong market for the exoskeleton concept, which analysts (quoted by German Bionic) predict could be worth as much as $20 billion by 2030.

In that context, it’s interesting to consider Samsung as an investor: the company itself, as one of the world’s leading consumer electronics and industrial electronics providers, is a manufacturing powerhouse in its own right. But it also makes equipment for others to use in their industrial work, both as a direct brand and through subsidiaries like Harman. It’s not clear which of these use cases interests Samsung: whether to use the Cray X in its own manufacturing and logistics work, or whether to become a strategic partner in manufacturing these for others. It could easily be both.

“We are pleased to support German Bionic in its continued development of world-leading exoskeleton technology,” says Young Sohn, Corporate President and Chief Strategy Officer for Samsung Electronics and Chairman of the Board, Harman, in a statement. “Exoskeleton technologies have great promise in enhancing human’s health, wellbeing and productivity. We believe that it can be a transformative technology with mass market potential.”

German Bionic describes its Cray X as a “self-learning power suit” aimed primarily at reinforcing lifting movements and to safeguard the wearer from making bad calls that could cause injuries. That could apply both to those in factories, or those in warehouses, or even sole trader mechanics working in your local garage. The company is not disclosing a list of customers, except to note that it includes, in the words of a spokesperson, “a big logistics player, industrial producers and infrastructure hubs.” One of these, the Stuttgart Airport, is highlighted on its site.  

“Previously, efficiency gains and health promotion in manual labor were often at odds with one another. German Bionic Systems managed to not only break through this paradigm, but also to make manual labor a part of the digital transformation and elegantly integrate it into the smart factory,” says Michael Motschmann, managing partner with MIG in a statement. “We see immense potential with the company and are particularly happy to be working together with a first-class team of experienced entrepreneurs and engineers.”

Exoskeletons as a concept have been around for over a decade already — MIT developed its first exoskeleton, aimed to help soldiers carrying heavy loads — back in 2007, but advancements in cloud computing, smaller processors for the hardware itself, and artificial intelligence have really opened up the idea of where and how these might augment humans. In addition to industry, some of the other applications have included helping people with knee injuries (or looking to avoid knee injuries!) ski better, and for medical purposes, although the recent pandemic has put a strain on some of these use cases, leading to indefinite pauses in production.


By Ingrid Lunden

Firebolt raises $37M to take on Snowflake, Amazon and Google with a new approach to data warehousing

For many organizations, the shift to cloud computing has played out more realistically as a shift to hybrid architectures, where a company’s data is just as likely to reside in one of a number of clouds, as it might in an on-premise deployment, in a data warehouse, or in a data lake. Today, a startup that has built a more comprehensive way to assess, analyse and use that data is announcing funding as it looks to take on Snowflake, Amazon, Google and others in the area of enterprise data analytics.

Firebolt, which has redesigned the concept of a data warehouse to work more efficiently and at a lower cost, is today announcing that it has raised $37 million from Zeev Ventures, TLV Partners, Bessemer Venture Partners and Angular Ventures. It plans to use the funding to continue developing its product and bring on more customers.

The company is officially “launching” today but — as is the case with so many enterprise startups these days operating in stealth — it has been around for two years already building its platform and signing commercial deals. It now has some 12 large enterprise customers and is “really busy” with new business, said CEO is Eldad Farkash in an interview.

The funding may sound like a large amount for a company that has not really been out in the open, but part of the reason is because of the track record of the founders. Farkash, was one of the founders of SiSense, the successful business intelligence startup, and he has co-founded Firebolt with two others who were on SiSense’s founding team, Saar Bitner as COO and Ariel Yaroshevich as CTO.

At SiSense, these three were coming up against an issue: when you are dealing in terabytes of data, cloud data warehouses were straining to deliver good performance to power its analytics and other tools, and the only way to potentially continue to mitigate that was by piling on more cloud capacity.

Farkash is something of a technical savant and said that he decided to move on and build Firebolt to see if he could tackle this, which he described as a new, difficult, and “meaningful” problem. “The only thing I know how to do is build startups,” he joked.

In his opinion, while data warehousing has been a big breakthrough in how to handle the mass of data that companies now amass and want to use better, it has started to feel like a dated solution.

“Data warehouses are solving yesterday’s problem, which was, ‘How do I migrate to the cloud and deal with scale?’” he said, citing Google’s BigQuery, Amazon’s RedShift and Snowflake as fitting answers for that issue. “We see Firebolt as the new entrant in that space, with a new take on design on technology. We change the discussion from one of scale to one of speed and efficiency.”

The startup claims that its performance is up to 182 times faster than that of other data warehouses. It’s a SQL-based system that works on principles that Farkash said came out of academic research that had yet to be applied anywhere, around how to handle data in a lighter way, using new techniques in compression and how data is parsed. Data lakes in turn can be connected up with a wider data ecosystem, and what it translates to is a much smaller requirement for cloud capacity.

This is not just a problem at SiSense. With enterprise data continuing to grow exponentially, cloud analytics is growing with it, and is estimated by 2025 to be a $65 billion market, Firebolt estimates.

Still, Farkash said the Firebolt concept was initially a challenging sell even to the engineers that it eventually hired to build out the business: it required building completely new warehouses from the ground up to run the platform, five of which exist today and will be augmented with more, on the back of this funding, he said.

And it should be pointed out that its competitors are not exactly sitting still either. Just yesterday, Dataform announced that it had been acquired by Google to help it build out and run better performance at BigQuery.

“Firebolt created a SaaS product that changes the analytics experience over big data sets” Oren Zeev of Zeev Ventures said in a statement. “The pace of innovation in the big data space has lagged the explosion in data growth rendering most data warehousing solutions too slow, too expensive, or too complex to scale. Firebolt takes cloud data warehousing to the next level by offering the world’s most powerful analytical engine. This means companies can now analyze multi Terabyte / Petabyte data sets easily at significantly lower costs and provide a truly interactive user experience to their employees, customers or anyone who needs to access the data.”


By Ingrid Lunden

Cellwize raises $32M to help carriers and their partners adopt and run 5G services

As 5G slowly moves from being a theoretical to an active part of the coverage map for the mobile industry — if not for consumers themselves — companies that are helping carriers make the migration less painful and less costly are seeing a boost of attention.

In the latest development, Cellwize, a startup that’s built a platform to automate and optimize data for carriers to run 5G networks within multi-vendor environments, has raised $32 million — funding that it will use to continue expanding its business into more geographies and investing in R&D to bring more capabilities to its flagship CHIME platform.

The funding is notable because of the list of strategic companies doing the investing, as well as because of the amount of traction that Cellwize has had to date.

The Series B round is being co-led Intel Capital and Qualcomm Ventures LLC, and Verizon Ventures (which is part of Verizon, which also owns TechCrunch by way of Verizon Media) and Samsung Next, with existing shareholders also participating. That list includes Deutsche Telekom and Sonae, a Portuguese conglomerate that owns multiple brands in retail, financial services, telecoms and more.

That backing underscores Cellwize’s growth. The company — which is based in Israel with operations also in Dallas and Singapore — says it currently provides services to some 40 carriers (including Verizon, Telefonica and more), covering 16 countries, 3 million cell sites, and 800 million subscribers.

Cellwize is not disclosing its valuation but it has raised $56.5 million from investors to date.

5G holds a lot of promise for carriers, their vendors, handset makers and others in the mobile ecosystem: the belief is that faster and more efficient speeds for wireless data will unlock a new wave of services and usage and revenues from services for consumers and business, covering not just people but IoT networks, too.

Notwithstanding the concerns some have had with health risks, despite much of that theory being debunked over the years, one of the technical issues with 5G has been implementing it.

Migrating can be costly and laborious, not least because carriers will likely be running hybrid systems in the Radio Access Network (RAN, which controls how devices interface with carriers’ networks), where they will be managing legacy networks (eg, 2G, 3G, 4G, LTE) alongside 5G, and working with multiple vendors within 5G itself.

Cellwize positions its CHIME platform — which works as an all-in-one tool that covers configuring new 5G networks, optimizing and monitoring data on them, and also providing APIs for third-party developers to integrate with it — as the bridge to letting carriers operate in the more open-shop approach that is afforded by the move to 5G.

“While large companies have traditionally been more dominant in the RAN market, 5G is changing the landscape for how the entire mobile industry operates,” said Ofir Zemer, Cellwize’s CEO. “These traditional vendors usually offer solutions which plug into their own equipment, while not allowing third parties to connect, and this creates a closed and limited ecosystem. [But] the large operators also are not interested in being tied to one vendor: not technology-wise and not on the business side – as they identify this as an inhibitor to their own innovation.”

Cellwize provides an open platform that allows a carrier to plan, deploy and manage the RAN in that kind of multi-vendor ecosystem. “We have seen an extremely high demand for our solution and as 5G rollouts continue to increase globally, we expect the demand for our product will only continue to grow,” he added.

Previously, Zemer said that carriers would build their own products internally to manage data in the RAN, but these “struggle to support 5G.”

The competition element is not just lip service: the fact that both Intel and Qualcomm — competitors in key respects — are investing in this round underscores how Cellwize sees itself as a kind of Switzerland in mobile architecture. It also underscores that both view easy and deep integrations with its tech as something worth backing, given the priorities of each of their carrier customers.

“Over the last decade, Intel technologies have been instrumental in enabling the communications industry to transform networks with an agile and scalable infrastructure,” said David Flanagan, VP and senior MD at Intel Capital, in a statement. “With the challenges in managing the high complexity of radio access networks, we are encouraged by the opportunity in front of Cellwize to explore ways to utilize their AI-based automation capabilities as Intel brings the benefits of cloud architectures to service provider and private networks.”

“Qualcomm is at the forefront of 5G expansion, creating a robust ecosystem of technologies that will usher in the new era of connectivity,” added Merav Weinryb, Senior Director of Qualcomm Israel Ltd. and MD of Qualcomm Ventures Israel and Europe. “As a leader in RAN automation and orchestration, Cellwize plays an important role in 5G deployment. We are excited to support Cellwize through the Qualcomm Ventures’ 5G global ecosystem fund as they scale and expedite 5G adoption worldwide.”

And that is the key point. Right now there are precious few 5G deployments, and sometimes, when you read some the less shiny reports of 5G rollouts, you might be forgiven for feeling like it’s more marketing than reality at this point. But Zemer — who is not a co-founder (both of them have left the company) but has been with it since 2013, almost from the start — is sitting in on the meetings with carriers, and he believes that it won’t be long before all that tips.

“Within the next five years, approximately 75% of mobile connections will be powered by 5G, and 2.6 billion 5G mobile subscriptions will be serving 65% of the world’s population,” he said. “While 5G technology holds a tremendous amount of promise, the reality is that it is also hyper-complex, comprised of multiple technologies, architectures, bands, layers, and RAN/vRAN players. We are working with network operators around the world to help them overcome the challenges of rolling out and managing these next generation networks, by automating their entire RAN processes, allowing them to successfully deliver 5G to their customers.”


By Ingrid Lunden

Warren gets $1.4 million to help local cloud infrastructure providers compete against Amazon and other giants

Started as a side project by its founders, Warren is now helping regional cloud infrastructure service providers compete against Amazon, Microsoft, IBM, Google and other tech giants. Based in Tallinn, Estonia, Warren’s self-service distributed cloud platform is gaining traction in Southeast Asia, one of the world’s fastest-growing cloud service markets, and Europe. It recently closed a $1.4 million seed round led by Passion Capital, with plans to expand in South America, where it recently launched in Brazil.

Warren’s seed funding also included participation from Lemonade Stand and angel investors like former Nokia vice president Paul Melin and Marek Kiisa, co-founder of funds Superangel and NordicNinja.

The leading global cloud providers are aggressively expanding their international businesses by growing their marketing teams and data centers around the world (for example, over the past few months, Microsoft has launched a new data center region in Austria, expanded in Brazil and announced it will build a new region in Taiwan as it competes against Amazon Web Services).

But demand for customized service and control over data still prompt many companies, especially smaller ones, to pick local cloud infrastructure providers instead, Warren co-founder and chief executive officer Tarmo Tael told TechCrunch.

“Local providers pay more attention to personal sales and support, in local language, to all clients in general, and more importantly, take the time to focus on SME clients to provide flexibility and address their custom needs,” he said. “Whereas global providers give a personal touch maybe only to a few big clients in the enterprise sectors.” Many local providers also offer lower prices and give a large amount of bandwidth for free, attracting SMEs.

He added that “the data sovereignty aspect that plays an important role in choosing their cloud platform for many of the clients.”

In 2015, Tael and co-founder Henry Vaaderpass began working on the project that eventually became Warren while running a development agency for e-commerce sites. From the beginning, the two wanted to develop a product of their own and tested several ideas out, but weren’t really excited by any of them, he said. At the same time, the agency’s e-commerce clients were running into challenges as their businesses grew.

Tael and Vaaderpass’s clients tended to pick local cloud infrastructure providers because of lower costs and more personalized support. But setting up new e-commerce projects with scalable infrastructure was costly because many local cloud infrastructure providers use different platforms.

“So we started looking for tools to use for managing our e-commerce projects better and more efficiently,” Tael said. “As we didn’t find what we were looking for, we saw this as an opportunity to build our own.”

After creating their first prototype, Tael and Vaaderpass realized that it could be used by other development teams, and decided to seek angel funding from investors, like Kiisa, who have experience working with cloud data centers or infrastructure providers.

Southeast Asia, one of the world’s fastest-growing cloud markets, is an important part of Warren’s business. Warren will continue to expand in Southeast Asia, while focusing on other developing regions with large domestic markets, like South America (starting with Brazil). Tael said the startup is also in discussion with potential partners in other markets, including Russia, Turkey and China.

Warren’s current clients include Estonian cloud provider Pilw.io and Indonesian cloud provider IdCloudHost. Tael said working with Warren means its customers spend less time dealing with technical issues related to infrastructure software, so their teams, including developers, can instead focus on supporting clients and managing other services they sell.

The company’s goal is to give local cloud infrastructure providers the ability to meet increasing demand, and eventually expand internationally, with tools to handle more installations and end users. These include features like automated maintenance and DevOps processes that streamline feature testing and handling different platforms.

Ultimately, Warren wants to connect providers in a network that end users can access through a single API and user interface. It also envisions the network as a community where Warren’s clients can share resources and, eventually, have a marketplace for their apps and services.

In terms of competition, Tael said local cloud infrastructure providers often turn to OpenStack, Virtuozzo, Stratoscale or Mirantis. The advantage these companies currently have over Warren is a wider network, but Warren is busy building out its own. The company will be able to connect several locations to one provider by the first quarter of 2021. After that, Tael said, it will “gradually connect providers to each other, upgrading our user management and billing services to handle all that complexity.”


By Catherine Shu

SimilarWeb raises $120M for its AI-based market intelligence platform for sites and apps

Israeli startup SimilarWeb has made a name for itself with an AI-based platform that lets sites and apps track and understand traffic not just on their own sites, but those of its competitors. Now, it’s taking the next step in its growth. The startup has raised $120 million, funding it will use to continue expanding its platform both through acquisitions and investing in its own R&D, with a focus on providing more analytics services to larger enterprises alongside its current base of individuals and companies of all sizes that do business on the web.

Co-led by ION Crossover Partners and Viola Growth, the round doubles the total amount that the startup has raised to date to $240 million. Or Offer, SimilarWeb’s founder and CEO, said in an interview that it was not disclosing its valuation this time around except to say that his company is now “playing in the big pool.” It counts more than half of the Fortune 100 as customers, with Walmart, P&G, Adidas and Google, among them.

For some context, it hit an $800 million valuation in its last equity round, in 2017.

SimilarWeb’s technology competes with other analytics and market intelligence providers ranging from the likes of Nielsen and ComScore through to the Apptopias of the world in that, at its most basic level, it provides a dashboard to users that provides insights into where people are going on desktop and mobile. Where it differs, Offer said, is in how it gets to its information, and what else it’s doing in the process.

For starters, it focuses not just how many people are visiting, but also a look into what is triggering the activity — the “why”, as it were — behind the activity. Using a host of AI tech such as machine learning algorithms and deep learning — like a lot of tech out of Israel, it’s being built by people with deep expertise in this area — Offer says that SimilarWeb is crunching data from a number of different sources to extrapolate its insights.

He declined to give much detail on those sources but told me that he cheered the arrival of privacy gates and cookie lists for helping ferret out, expose and sometimes eradicate some of the more nefarious “analytics” services out there, and said that SimilarWeb has not been affected at all by that swing to more data protection, since it’s not an analytics service, strictly speaking, and doesn’t sniff data on sights in the same way. It’s also exploring widening its data pool, he added:

“We are always thinking about what new signals we could use,” he said. “Maybe they will include CDNs. But it’s like Google with its rankings in search. It’s a never ending story to try to get the highest accuracy in the world.”

The global health pandemic has driven a huge amount of activity on the web this year, with people turning to sites and apps not just for leisure — something to do while staying indoors, to offset all the usual activities that have been cancelled — but for business, whether it be consumers using e-commerce services for shopping, or workers taking everything online and to the cloud to continue operating.

That has also seen a boost of business for all the various companies that help the wheels turn on that machine, SimilarWeb included.

“Consumer behavior is changing dramatically, and all companies need better visibility,” said Offer. “It started with toilet paper and hand sanitizer, then moved to desks and office chairs, but now it’s not just e-commerce but everything. Think about big banks, whose business was 70% offline and is now 70-80% online. Companies are building and undergoing a digital transformation.”

That in turn is driving more people to understand how well their web presence is working, he said, with the basic big question being: “What is my marketshare, and how does that compare to my competition? Everything is about digital visibility, especially in times of change.”

Like many other companies, SimilarWeb did see an initial dip in business, Offer said, and to that end the company has taken on some debt as part of Israel’s Paycheck Protection Program, to help safeguard some jobs that needed to be furloughed. But he added that most of its customers prior to the pandemic kicking off are now back, along with customers from new categories that hadn’t been active much before, like automotive portals.

That change in customer composition is also opening some doors of opportunity for the company. Offer noted that in recent months, a lot of large enterprises — which might have previously used SimilarWeb’s technology indirectly, via a consultancy, for example — have been coming to the company direct.

“We’ve started a new advisory service [where] our own expert works with a big customer that might have more deep and complex questions about the behaviour we are observing. They are questions all big businesses have right now.” The service sounds like a partly-educational effort, teaching companies that are not necessarily digital-first be more proactive, and partly consulting.

New customer segments, and new priorities in the world of business, are two of the things that drove this round, say investors.

“SimilarWeb was always an incredible tool for any digital professional,” said Gili Iohan of ION Crossover Partners, in a statement. “But over the last few months it has become apparent that traffic intelligence — the unparalleled data and digital insight that SimilarWeb offers — is an absolute essential for any company that wants to win in the digital world.”

As for acquisitions, SimilarWeb has historically made these to accelerate its technical march. For example, in 2015 it acquired Quettra to move deeper into mobile analytics and it acquired Swayy to move into content discovery insights (key for e-commerce intelligence). Offer would not go into too much detail about what it has identified as a further target but given that there are quite a lot of companies building tech in this area currently, that there might be a case for some consolidation around bigger platforms to combine some of the features and functionality. Offer said that it was looking at “companies with great data and digital intelligence, with a good product. There are a lot of opportunities right now on the table.”

The company will also be doing some hiring, with the plan to be to add 200 more people globally by January (it has around 600 employees today).

“Since we joined the company three years ago, SimilarWeb has executed a strategic transformation from a general-purpose measurement platform to vertical-based solutions, which has significantly expanded its market opportunity and generated immense customer value,” said Harel Beit-On, Founder and General Partner at Viola Growth, in a statement. “With a stellar management team of accomplished executives, we believe this round positions the company to own the digital intelligence category, and capitalize on the acceleration of the digital era.”


By Ingrid Lunden

Tipalti receives $150M at a $2B+ valuation after its accounts payable platform sees a surge in use

Digital transformation has been one of the big enterprise themes of 2020: organizations are doubling down on cloud services both to link up suddenly remote teams and centralize apps, documents and data in a more efficient way. Today, one of the startups that has filled out that story with a cloud-based suite of accounting services is announcing a major round of funding on the back of massive growth.

Tipalti, an Israeli company that helps businesses manage suppliers, invoices, purchase orders, tax compliance, payments and billing and other accounting services from a single cloud platform, has raised $150 million at a valuation that the company says is now over $2 billion.

The plan is to use the funding to continue enhancing Tipalti’s accounts payable suite with more tools; hire across all departments; and for business development. Tipalti’s aim, according to founder and CEO Chen Amit, is to provide easy to integrate accounts payable services to a base of fast-scaling businesses, which need AP services to function well, but would never consider them core functions of their businesses in themselves.

“Accounts payable is the last area that companies in the mid market would want to invest in,” said founder and CEO Chen Amit. “They will invest in literally anything else other than building software to pay or manage suppliers.”

The round, a Series E, is being led by Durable Capital Partners (the firm founded last year by Henry Ellenbogen, previously a star at T. Rowe Price), with participation also from Greenoaks Capital and existing investor 01 Advisors, the firm co-founded by Twitter alums Dick Costolo and Adam Bain.

Tipalti’s growth comes as the result of a perfect storm of sorts for the startup.

The Covid-19 health pandemic has led to a global economic crunch, and businesses are especially focused now on watching where money is coming in and where it is going.

But at the same time, even before the coronavirus pandemic, Tipalti had been seeing a lot of inbound business from organizations that were scaling fast and looking for solutions that could integrate easily into their current systems.

The backstory and necessity around accounts payable can be told in a few words: it’s a boring but necessary area, and if it goes wrong, it can potentially bring a whole company down because of the tax, fraud and auditing implications.

Tipalti describes accounts payable as “the most time-consuming function in finance”, noting that 47% of finance organizations in a recent survey said they still spend around 520 hours per year on manual accounts payable tasks, with 27% of respondents indicating that their teams dedicate up to 80 people-hours per month on AP tasks, or 1,040 hours annually.

Tipalti, which fittingly means “I’ll handle it” in Hebrew, is positioned as a helper in this context. By way of an API, it integrates with a number of other accounting and tracking platforms that its customers use including NetSuite, Sage, QuickBooks, Affise, Cake, Everflow, HitPath, LinkTrust, Paladin, Tune (HasOffers) and Vidooly and lets companies run and track how payments are being made relative to actives within the organization, all with relatively little input from the companies themselves, essentially giving them time and other resources to focus on other areas.

The pandemic has hit some of Tipalti’s customers hard. But overall, Chen said that it’s seen more business as a result, not just from companies suddenly growing much faster (as in the case, for example, for e-commerce businesses, or those catering to people spending much more time at home and on screens), but from businesses that simply need to pay much more attention to how money is moving around.

In 2020 so far, Tipalti has seen transaction volume on its platform balloon to $12 billion, up 80% on a year ago. It now has some 1,000 customers on its books, with a specifically strong emphasis on fast-growing tech companies. The list includes Amazon Twitch, Amplitude, Roku, Duolingo, Gitlab, Medium, ClassPass, Toast, Automattic, Twitter, Business Insider, GoDaddy, Zola, Boston Globe Media, Noom, Roblox, Headspace, Fiverr, Vimeo, Stack Overflow, ZipRecruiter, AppLovin, Canva, Indeed, and Foursquare.

Indeed, as we have described before, it was Tipalti’s initial work with Twitter on its own accounts payable services (central to how it can make money on its ad business) that served as its first introduction to Costolo and Bain, who went on to invest in it after they left the social network and started 01 Advisors.

“We are pleased to have the opportunity to increase our investment in Tipalti during a time in which organizations have been focused on rapidly transforming and modernizing the way they operate,” said Dick Costolo, Founding Partner of 01 Advisors and former Chief Executive Officer of Twitter, in a statement. “When I ran Twitter, I saw first-hand the importance and value of Tipalti in automating financial operations. Tipalti transformed our processes and opened up our expansion, growth, and scalability strategies.”

It’s worth pointing out that the rise in valuation is a huge spike for Tipalti, a sign not just of its growth but investors’ bet that there will be more of that to come.

Chen Amit, the company’s founder and CEO, said it is four times the size of its valuation in its previous round (it raised $76 million in a Series D round led by 01 Advisors a little over a year ago, which would have been at around a $500 million valuation), and a whopping 14 times what Tipalti was valued in 2017). Indeed, even with other competitors like Bill.com and Coupa also targeting the same users as Tipalti, Amit estimates that between them all, they have just 3-4% of the addressable market.

“The accounts payable automation space has an extremely large total addressable market with significant growth potential,” explained Henry Ellenbogen, Founder, Managing Partner and Chief Investment Officer of Durable Capital Partners LP, in a statement. “We believe that Tipalti has the potential to become a much larger company within the Midmarket space due to its differentiated holistic platform, superior global capabilities and management team. This has resulted in leading retention and customer satisfaction.”


By Ingrid Lunden

As it closes in on ARM, Nvidia announces UK supercomputer dedicated to medical research

As Nvidia continues to work through its deal to acquire ARM for $40 billion from SoftBank, the computing giant is making another big move to lay out its commitment to investing in UK technology. Today the company announced plans to develop Cambridge-1, a new AI supercomputer that will be used for research in the health industry in the country, the first supercomputer built by Nvidia specifically for external research access, it said.

Nvidia said it is already working with GSK, AstraZeneca, London hospitals Guy’s and St Thomas’ NHS Foundation Trust, King’s College London and Oxford Nanopore to use the Cambridge-1. The supercomputer is due to come online by the end of the year and will be the company’s second supercomputer in the country. The first is already in development at the company’s AI Center of Excellence in Cambridge, and the plan is to add more supercomputers over time.

The growing role of AI has underscored an interesting crossroads in medical research. One one hand, leading researchers all acknowledge the role it will be playing in their work. On the other, none of them and their institutions have the resources to meet that demand on their own. That’s driving them all to get involved much more deeply with big tech companies like Google, Microsoft and in this case Nvidia, to carry out work.

Alongside the supercomputer news, Nvidia is making a second announcement in the area of healthcare in the UK: it has inked a partnership with GSK, which has established an AI hub in London, to build AI-based computational processes that will be using in drug vaccine and discovery — an especially timely piece of news, given that we are in a global health pandemic and all drug makers and researchers are on the hunt to understand more about, and build vaccines for, Covid-19.

The news is coinciding with Nvidia’s industry event, the GPU Technology Conference.

“Tackling the world’s most pressing challenges in healthcare requires massively powerful computing resources to harness the capabilities of AI,” said Jensen Huang, founder and CEO of NVIDIA, will say in his keynote at the event. “The Cambridge-1 supercomputer will serve as a hub of innovation for the U.K., and further the groundbreaking work being done by the nation’s researchers in critical healthcare and drug discovery.”

The company plans to dedicate Cambridge-1 resources in four areas, it said: industry research, in particular joint research on projects that exceed the resources of any single institution; university-granted compute time; health-focused AI startups; and education for future AI practitioners. It’s already building specific applications in areas, like the drug discovery work it’s doing with GSK, that will be run on the machine.

The Cambridge-1 will be built on Nvidia’s DGX SuperPOD system, which can process 400 petaflops of AI performance and 8 petaflops of Linpack performance. Nvidia said this will rank it as the 29th fastest supercomputer in the world.

“Number 29” doesn’t sound very groundbreaking, but there are other reasons why the announcement is significant.

For starters, it underscores how the supercomputing market — while still not a mass-market enterprise — is increasingly developing more focus around specific areas of research and industries. In this case, it underscores how health research has become more complex, and how applications of artificial intelligence have both spurred that complexity but, in the case of building stronger computing power, also provides a better route — some might say one of the only viable routes in the most complex of cases — to medical breakthroughs and discoveries.

It’s also notable that the effort is being forged in the UK. Nvidia’s deal to buy ARM has seen some resistance in the market — with one group leading a campaign to stop the sale and take ARM independent — but this latest announcement underscores that the company is already involved pretty deeply in the UK market, bolstering Nvidia’s case to double down even further. (Yes, chip reference designs and building supercomputers are different enterprises, but the argument for Nvidia is one of commitment and presence.)

“AI and machine learning are like a new microscope that will help scientists to see things that they couldn’t see otherwise,” said Dr. Hal Barron, Chief Scientific Officer and President, R&D, GSK, in a statement. “NVIDIA’s investment in computing, combined with the power of deep learning, will enable solutions to some of the life sciences industry’s greatest challenges and help us continue to deliver transformational medicines and vaccines to patients. Together with GSK’s new AI lab in London, I am delighted that these advanced technologies will now be available to help the U.K.’s outstanding scientists.”

“The use of big data, supercomputing and artificial intelligence have the potential to transform research and development; from target identification through clinical research and all the way to the launch of new medicines,” added James Weatherall, PhD, Head of Data Science and AI, Astrazeneca, in his statement.

“Recent advances in AI have seen increasingly powerful models being used for complex tasks such as image recognition and natural language understanding,” said Sebastien Ourselin, Head, School of Biomedical Engineering & Imaging Sciences at King’s College London. “These models have achieved previously unimaginable performance by using an unprecedented scale of computational power, amassing millions of GPU hours per model. Through this partnership, for the first time, such a scale of computational power will be available to healthcare research – it will be truly transformational for patient health and treatment pathways.”

Dr. Ian Abbs, Chief Executive & Chief Medical Director of Guy’s and St Thomas’ NHS Foundation Trust Officer, said: “If AI is to be deployed at scale for patient care, then accuracy, robustness and safety are of paramount importance. We need to ensure AI researchers have access to the largest and most comprehensive datasets that the NHS has to offer, our clinical expertise, and the required computational infrastructure to make sense of the data. This approach is not only necessary, but also the only ethical way to deliver AI in healthcare – more advanced AI means better care for our patients.”

“Compact AI has enabled real-time sequencing in the palm of your hand, and AI supercomputers are enabling new scientific discoveries in large-scale genomic datasets,” added Gordon Sanghera, CEO, Oxford Nanopore Technologies. “These complementary innovations in data analysis support a wealth of impactful science in the UK, and critically, support our goal of bringing genomic analysis to anyone, anywhere.”

 


By Ingrid Lunden

Ripjar, founded by GCHQ alums, raises $36.8M for AI that detects financial crime

Financial crime as a wider category of cybercrime continues to be one of the most potent of online threats, covering nefarious actives as diverse as fraud, money laundering and funding terrorism. Today, one of the startups that has been building data intelligence solutions to help combat that is announcing a fundraise to continue fueling its growth.

Ripjar, a UK company founded by five data scientists who previously worked together in British intelligence at the Government Communications Headquarters (GCHQ, the UK’s equivalent of the NSA), has raised $36.8 million (£28 million) in a Series B, money that it plans to use to continue expanding the scope of its AI platform — which it calls Labyrinth — and scaling the business.

Labyrinth, as Ripjar describes it, works with both structured and unstructured data, using natural language processing and an API-based platform that lets organizations incorporate any data source they would like to analyse and monitor for activity.

Sources close to the company say that the funding values the startup in the region of £100 million, or about $127 million. Ripjar is currently profitable, the company confirmed.

The funding is being led by Long Ridge Equity Partners, a specialist fintech investor, with previous investors Winton Capital Ltd and Accenture plc also participating. Accenture is a strategic partner: the consultancy/systems integrator uses Ripjar’s tech to work with a number of clients in the financial services sector. Ripjar also has government clients, where its platform is used for counterterrorism work. It declines to disclose any specific names but it does note that its extensive partner list also includes the likes of PWC, BAE Systems, Dow Jones and more.

“We are excited to partner with Long Ridge who bring expertise and resources in scaling fast-growing software companies,” said Jeremy Annis, the co-founder who is both the CEO and CTO of Ripjar. “This investment signals enormous confidence in our world-leading data intelligence technology and ability to protect companies and governments from criminal behaviour which threatens their assets and prosperity. With this funding, we will accelerate the expansion of Ripjar worldwide to provide our customers with the most advanced financial crime solutions, as well as creating new iterations of the Labyrinth platform.”

The startup says that it’s had its biggest year yet — no surprise, given the circumstances. Not only has there been huge shift to online transactions in 2020 because of the rise of the Covid-19 global health pandemic; but a tightening of the world economy has led to more financial scrambling and new nefarious activity, as well as criminal acts to profit from the instability.

That’s led to inking deals with six new enterprise customers and expanding deals with four existing major clients, and Ripjar said that it now has some 20,000 clients globally.

London, as one of the world’s financial centers, has developed a strong reputation for hatching and growing interesting fintech startups, and that has also meant the UK — which also has a strong talent base in artificial intelligence — has become very fertile ground also for startups building services to help protect those fintechs.

Ripjar’s raise, and rise, come within months of two other companies building AI to combat fraud and financial crime also raising money and growing. In July, ComplyAdvantage, which has also been building a database and platform to help combat financial crime, announced a $50 million raise. And a week before that, another UK company also building AI for financial and other cybercrime detection, Quantexa, raised $64.7 million.

Ripjar counts both of these, as well as bigger targets like Palantir, among its competitors. As is most likely, the big institutions that are grappling with financial crime are most likely using a several companies’ technology at the same time.

Indeed, with the issue of money laundering alone a $2 trillion problem (with only 1-2% of that ever identified and recovered), you can see why, at least for right now, banks, governments and others would be willing to put multiple resources on the problem to try to tackle it.

“Financial institutions, corporates and government agencies face ever-increasing risks associated with financial crime and cyber threats” said Kevin Bhatt, a Managing Partner at Long Ridge, in a statement. “We believe Ripjar is well-positioned to provide artificial intelligence solutions that will allow its clients to reduce the cost of compliance, while uncovering new threats through automation. We are incredibly excited to partner with Ripjar to support their continued growth and look forward to working closely with the Ripjar team as they expand to new geographies, customers, and verticals.”


By Ingrid Lunden

User-generated e-learning site Kahoot acquires Actimo for up to $33M to double down on corporate sector

Norwegian company Kahoot originally made its name with a platform the lets educators and students create and share game-based online learning lessons, in the process building up a huge public catalogue of gamified lessons created by its community. Today the startup — now valued at over $2 billion — is announcing an acquisition to give a boost to another segment of its business: corporate customers.

Kahoot has acquired Danish startup Actimo, which provides a platform for businesses to train and engage with employees. Kahoot said that the purchase is being made with a combination of cash and shares, and works to to a total enterprise value of between $26 million and $33 million for the smaller company, with the sale expected to be completed in October 2020.

It may sound like a modest sum in a tech market where companies are currently and regularly seeing paper valuations in the hundreds of millions at Series A stage, but it also presents a different kind of trajectory both for founders and their investors.

This is actually a strong exit for Actimo, which had raised less than $500,000, according to data from PitchBook. And it puts Actimo under the wing of a company that has been scaling globally fast, finding — like others in the areas of online education and remote working — that the current state of social distancing due to Covid-19 is resulting in a boost to its business.

To give you an idea of the scale and growth of Kahoot, the company says that currently it has over 1 billion active users, on top of some 4.4 billion users in aggregate since first launching the platform in 2013. In the last 12 months, some 200 games have been played on its platform. In June, when Kahoot announced that it had raised $28 million in funding, it told us that 100 million games had been played.

In light of its growth and the future opportunity — even putting aside the progression of the coronavirus, it looks like remote work and remote learning will at the least become a lot more common as a longer-term option — the company has also seen a rise in its valuation. With some of its shares traded on the Merkur Market in Norway, the company currently has a market cap of 18.716 billion Norwegian Krone, which at today’s rates is about $2.08 billion. That figure was $1.4 billion in June.

Kahoot’s targeting of the corporate sector is not new. The company has been building a business in this space for years. It says that in the last 12 months, it logged 2 million sessions across 20 million participating “players” of its corporate training “games”, with some 97% of the Fortune 500 among those users. Customers include the likes of Facebook (for sales training), Oyo (hospitality training and onboarding) and Qualys (for taking polls during a conference), among others.

Critically, while a lot of Kahoot’s audience is in education, its corporate most of the revenues come in, one reason why it’s keen to grow that segment with more services and users.

The aim with Actimo, Kahoot says, is to build out a product set aimed at helping organisations with company culture — which, with many organisations now going on eight months and counting of entire teams working regularly outside of their physical offices, has grown as a priority.

Keeping a team feeling like a team, and an individual feeling more than a transactional regard for an employer, is not a simple thing in the best of times. Now, as we continue to work physically away from each other, it will take even more tools and efforts to get the balance right.

In that context, Actimo’s solution is just one aspect, but potentially an interesting one: it has built a platform where employees can track the training that they have done or need to do, engage with other co-workers, and provide feedback, and employers can use it to generally track and encourage how employees are engaging across the company and its various efforts. It counts some 200 enterprises, including Circle K, Hi3G, and Compass Group, among its customers, and has current ARR of $5 million.

For comparison, Kahoot, in its Q2 financials published in August, reported ARR of $25 million, with invoiced revenue for the quarter at $9.6 million, growing some 317% on the same quarter a year before. The company has also raised some $110 million in private funding from the likes of Microsoft and Disney.

As Kahoot looks to find more than just a transient place in a company’s IT and software fabric — transience of attention always being a risk with anything gaming-based — it makes a lot of sense to pick up Actimo and work on ways of coupling the platform with its other corporate work. You can also imagine a time when it might create a similar kind of dashboard for the educational sector.

“We are excited to welcome the Actimo team to be part of the fast-growing Kahoot! family,” said Kahoot! CEO, Eilert Hanoa, in a statement. “This acquisition will further extend Kahoot!’s corporate learning offerings, by providing solutions tailored for the frontline segment, as well as to solidify company culture and engagement among remote and distributed teams in companies of all types and sizes. This continues our expressed ambition to also grow through M&A by adding strategic capabilities that we can leverage across our global platform.”

“We are thrilled to join forces with Kahoot! in our mission to develop next-level solutions that connect remote employees and boost employee engagement and productivity,” said Eske Gunge, CEO at Actimo, in a statement. “Being part of Kahoot! and with our experience from working with innovative and ambitious enterprises across industries, we can together set a new standard for corporate learning and engagement.”


By Ingrid Lunden

In 2020, Warsaw’s startup ecosystem is ‘a place to observe carefully’

If you listed the trends that have captured the attention of 20 Warsaw-focused investors who replied to our recent surveys, automation/AI, enterprise SaaS, cleantech, health, remote work and the sharing economy would top the list. These VCs said they are seeking opportunities in the “digital twin” space, proptech and expanded blockchain tokenization inside industries.

Investors in Central and Eastern Europe are generally looking for the same things as VCs based elsewhere: startups that have a unique value proposition, capital efficiency, motivated teams, post-revenue and a well-defined market niche.

Out of the cohort we interviewed, several told us that COVID-19 had not yet substantially transformed how they do business. As Michał Papuga, a partner at Flashpoint VC put it, “the situation since March hasn’t changed a lot, but we went from extreme panic to extreme bullishness. Neither of these is good and I would recommend to stick to the long-term goals and not to be pressured.”

Said Pawel Lipkowski of RBL_VC, “Warsaw is at its pivotal point — think Berlin in the ‘90s. It’s a place to observe carefully.”

Here’s who we interviewed for part one:

For the conclusion, we spoke to the following investors:

Karol Szubstarski, partner, OTB Ventures

What trends are you most excited about investing in, generally?
Gradual shift of enterprises toward increased use of automation and AI, that enables dramatic improvement of efficiency, cost reduction and transfer of enterprise resources from tedious, repeatable and mundane tasks to more exciting, value added opportunities.

What’s your latest, most exciting investment?
One of the most exciting opportunities is ICEYE. The company is a leader and first mover in synthetic-aperture radar (SAR) technology for microsatellites. It is building and operating its own commercial constellation of SAR microsatellites capable of providing satellite imagery regardless of the cloud cover, weather conditions and time of the day and night (comparable resolution to traditional SAR satellites with 100x lower cost factor), which is disrupting the multibillion dollar satellite imagery market.

Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
I would love to see more startups in the digital twin space; technology that enables creation of an exact digital replica/copy of something in physical space — a product, process or even the whole ecosystem. This kind of solution enables experiments and [the implementation of] changes that otherwise could be extremely costly or risky – it can provide immense value added for customers.

What are you looking for in your next investment, in general?
A company with unique value proposition to its customers, deep tech component that provides competitive edge over other players in the market and a founder with global vision and focus on execution of that vision.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
No market/sector is too saturated and has no room for innovation. Some markets seem to be more challenging than others due to immense competitive landscape (e.g., food delivery, language-learning apps) but still can be the subject of disruption due to a unique value proposition of a new entrant.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
OTB is focused on opportunities with links to Central Eastern European talent (with no bias toward any hub in the region), meaning companies that leverage local engineering/entrepreneurial talent in order to build world-class products to compete globally (usually HQ outside CEE).

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
CEE region is recognized for its sizable and highly skilled talent pool in the fields of engineering and software development. The region is well-positioned to build up solutions that leverage deep, unique tech regardless of vertical (especially B2B). Historically, the region was especially strong in AI/ML, voice/speech/NLP technologies, cybersecurity, data analytics, etc.

How should investors in other cities think about the overall investment climate and opportunities in your city?
CEE (including Poland and Warsaw) has always been recognized as an exceptionally strong region in terms of engineering/IT talent. Inherent risk aversion of entrepreneurs has driven, for a number of years, a more “copycat”/local market approach, while holding back more ambitious, deep tech opportunities. In recent years we are witnessing a paradigm shift with a new generation of entrepreneurs tackling problems with unique, deep tech solutions, putting emphasis on global expansion, neglecting shallow local markets. As such, the quality of deals has been steadily growing and currently reflects top quality on global scale, especially on tech level. CEE market demonstrates also a growing number of startups (in total), which is mostly driven by an abundance of early-stage capital and success stories in the region (e.g., DataRobot, Bolt, UiPath) that are successfully evangelizing entrepreneurship among corporates/engineers.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I believe that local hubs will hold their dominant position in the ecosystem. The remote/digital workforce will grow in numbers but proximity to capital, human resources and markets still will remain the prevalent force in shaping local startup communities.

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
OTB invests in general in companies with clearly defined technological advantage, making quantifiable and near-term difference to their customers (usually in the B2B sector), which is a value-add regardless of the market cycle. The economic downturn works generally in favor of technological solutions enabling enterprise clients to increase efficiency, cut costs, bring optimization and replace manual labour with automation — and the vast majority of OTB portfolio fits that description. As such, the majority of the OTB portfolio has not been heavily impacted by the COVID pandemic.

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
The COVID pandemic has not impacted our investment strategy in any way. OTB still pursues unique tech opportunities that can provide its customers with immediate value added. This kind of approach provides a relatively high level of resilience against economic downturns (obviously, sales cycles are extending but in general sales pipeline/prospects/retention remains intact). Liquidity in portfolio is always the number one concern in uncertain, challenging times. Lean approach needs to be reintroduced, companies need to preserve cash and keep optimizing — that’s the only way to get through the crisis.

Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
A good example in our portfolio is Segron, a provider of an automated testing platform for applications, databases and enterprise network infrastructure. Software development, deployment and maintenance in enterprise IT ecosystem requires continuous and rigorous testing protocols and as such a lot of manual heavy lifting with highly skilled engineering talent being involved (which can be used in a more productive way elsewhere). The COVID pandemic has kept engineers home (with no ability for remote testing) while driving demand for digital services (and as such demand for a reliable IT ecosystem). The Segron automated framework enables full automation of enterprise testing leading to increased efficiency, cutting operating costs and giving enterprise customers peace of mind and a good night’s sleep regarding their IT infrastructure in the challenging economic environment.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
I remain impressed by the unshakeable determination of multiple founders and their teams to overcome all the challenges of the unfavorable economic ecosystem.


By Mike Butcher

Hypatos gets $11.8M for a deep learning approach to document processing

Process automation startup Hypatos has raised a €10 million (~$11.8M) seed round of funding from investors including Blackfin Tech, Grazia Equity, UVC Partners and Plug & Play Ventures.

The Germany- and Poland-based company was spun out of AI for accounting startup, Smacc, at the back end of 2018 to apply deep learning tech to power a wider range of back-office automation, with a focus on industries with heavy financial document processing needs, such as the financial and insurance sectors.

Hypatos is applying language processing AI and computer vision tech to speed up financial document processing for business use-cases such as invoices, travel and expense management, loan application validation and insurance claims handling via — touting a training dataset of more than 10M annotated data entities.

It says the new seed funding will go on R&D to expand its portfolio of AI models so it can automate business processing for more types of documents, as well as for fuelling growth in Europe, North American and Asia. Its customer base at this point includes Fortune 500 companies, major accounting firms and more than 300 software companies.

While there are plenty of business process automation plays, Hypatos says its use of deep learning tech supports an “in-depth understanding” of document content — which in turn allows it to offer customers a ‘soup to nuts’ automation menu that covers document classification, information capturing, content validation, and data enrichment.

It dubs its approach “cognitive process automation” (CPA) vs more basic applications of business process automation with software robots (RPA) which it argues aren’t so contextually savvy — thereby claiming an edge.

As well as document processing solutions, it has developed machine learning modules for enhancing customers’ existing systems (e.g. ECM, ERP, CRM, RPA); and offers APIs for software providers to draw on its machine learning tech for their own applications.

“All offerings include machine learning pipeline software for continuous model training in the cloud or in on-premise deployments,” it notes in a press release.

“We have deep knowledge of how financial documents are processed and millions of data entities in our training data,” says chief commercial officer, Cem Dilmegani, discussing where Hypatos fits in the business process automation landscape. “We get compared to RPA companies like UiPath, enterprise content management (ECM) companies like Kofax Readsoft as well as generalist ML document automation companies like Hyperscience. However, we are quite different.

“We focus on end-to-end automation, we don’t only help companies capture data, we help them process it using our deep domain understanding, enabling higher rates of automation. For example, to automate incoming invoice processing (A/P automation) we apply our document understanding AI to capture all data, classify the document, identify the specific goods and services, validate for internal/external compliance and assign financial accounts, cost centers, cost categories etc. to automate all processing tasks.”

“Finally, we offer this technology as components easily accessible via APIs. This allows RPA or ECM users to leverage our technology and increase their level of automation,” he adds.

Hypatos claims it’s seeing uplift as a result of the coronavirus pandemic — noting it’s providing a service to more than a dozen Fortune 500 companies to help with in-shoring efforts which it says are accelerating as a result of COVID-19 putting pressure on the traditional business process outsourcing model as offshore workforce productivity in lower wage regions is affected by coronavirus lockdowns.

“We believe that we are in a pivotal moment of machine learning adoption in large organizations,” adds Andreas Unseld, partner at UVC Partners, in a supporting statement. “Hypatos’ technology provides ample opportunity to transform many core business processes. We’re impressed by the Hypatos machine learning technology and see the team in a perfect position to take a leading role in the machine learning revolution to come.”


By Natasha Lomas

12 Paris-based VCs look at the state of their city

Four years after the Great Recession, France’s newly elected socialist president François Hollande raised taxes and increased regulations on founder-led startups. The subsequent flight of entrepreneurs to places like London and Silicon Valley portrayed France as a tough place to launch a company. By 2016, France’s national statistics bureau estimated that about three million native-born citizens had moved abroad.

Those who remained fought back: The Family was an early accelerator that encouraged French entrepreneurs to adopt Silicon Valley’s startup methodology, and the 2012 creation of Bpifrance, a public investment bank, put money into the startup ecosystem system via investors. Organizers founded La French Tech to beat the drum about native startups.

When President Emmanuel Macron took office in May 2017, he scrapped the wealth tax on everything except property assets and introduced a flat 30% tax rate on capital gains. Station F, a giant startup campus funded by billionaire entrepreneur Xavier Niel on the site of a former railway station, began attracting international talent. Tony Fadell, one of the fathers of the iPod and founder of Nest Labs, moved to Paris to set up investment firm Future Shape; VivaTech was created with government backing to become one of Europe’s largest startup conference and expos.

Now, in the COVID-19 era, the government has made €4 billion available to entrepreneurs to keep the lights on. According to a recent report from VC firm Atomico, there are 11 unicorns in France, including BlaBlaCar, OVHcloud, Deezer and Veepee. More appear to be coming; last year Macron said he wanted to see “25 French unicorns by 2025.”

According to Station F, by the end of August, there had been 24 funding rounds led by international VCs and a few big transactions. Enterprise artificial intelligence and machine-learning platform Dataiku raised a $100 million Series D round, and Paris-based gaming startup Voodoo raised an undisclosed amount from Tencent Holdings.

We asked 12 Paris -based investors to comment on the state of play in their city:

Alison Imbert, Partech

What trends are you most excited about investing in, generally?

All the fintechs addressing SMBs to help them to focus more on their core business (including banks disintermediation by fintech, new infrastructures tech that are lowering the barrier to entry to nonfintech companies).

What’s your latest, most exciting investment?

77foods (plant-based bacon) — love that alternative proteins trend as well. Obviously, we need to transform our diet toward more sustainable food. It’s the next challenge for humanity.

What are you looking for in your next investment, in general?
Impact investment: Logistic companies tackling the life cycle of products to reduce their carbon footprint and green fintech that reinvent our spending and investment strategy around more sustainable products.

Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
D2C products.

How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
100% investing in France as I’m managing Paris Saclay Seed Fund, a €53 million fund, investing in pre-seed and seed startups launched by graduates and researchers from the best engineering and business schools from this ecosystem.

Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Deep tech, biotech and medical devices. Paris, and France in general, has thousands of outstanding engineers that graduate each year. Researchers are more and more willing to found companies to have a true impact on our society. I do believe that the ecosystem is more and more structured to help them to build such companies.

How should investors in other cities think about the overall investment climate and opportunities in your city?
Paris is booming for sure. It’s still behind London and Berlin probably. But we are seeing more and more European VC offices opening in the city to get direct access to our ecosystem. Even in seed rounds, we start to have European VCs competing against us. It’s good — that means that our startups are moving to the next level.

Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
For sure startups will more and more push for remote organizations. It’s an amazing way to combine quality of life for employees and attracting talent. Yet I don’t think it will be the majority. Not all founders are willing/able to build a fully remote company. It’s an important cultural choice and it’s adapted to a certain type of business. I believe in more flexible organization (e.g., tech team working remotely or 1-2 days a week for any employee).

Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
Travel and hospitality sectors are of course hugely impacted. Yet there are opportunities for helping those incumbents to face current challenges (e.g., better customer care and services, stronger flexibility, cost reduction and process automation).

How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
Cash is king more than ever before. My only piece of advice will be to keep a good level of cash as we have a limited view on events coming ahead. It’s easy to say but much more difficult to put in practice (e.g., to what extend should I reduce my cash burn? Should I keep on investing in the product? What is the impact on the sales team?). Startups should focus only on what is mission-critical for their clients. Yet it doesn’t impact our seed investments as we invest pre-revenue and often pre-product.

What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
There is no reason to be hopeless. Crises have happened in the past. Humanity has faced other pandemics. Humans are resilient and resourceful enough to adapt to a new environment and new constraints.


By Mike Butcher

InfoSum raises $15.1M for its privacy-first, federated approach to big data analytics

Data protection and data privacy have gone from niche concerns to mainstream issues in the last several years, thanks to new regulations and a cascade of costly breaches that have laid bare the problems that arise when information and data security are treated haphazardly.

Yet that swing has also thrown up a whole series of issues for organisations and business functions that depend on sharing and exchanging data in order to work. Today, a startup that has built a new way of exchanging data while still keeping privacy in mind — starting first by applying the concept to the “marketing industrial complex” — is announcing a round of funding as it continues to pick up momentum.

InfoSum, a London startup that has built a way for organizations to share their data with each other without passing it on to each other — by way of a federated, decentralized architecture that uses mathematical representations to organise, “read” and query the data — is today announcing that it has raised $15.1 million.

Data may be the new oil, but according to founder and CEO Nick Halstead, that just means “it’s sticky and gets all over the place.” That is to say, InfoSum is looking for a new way to use data that is less messy, and less prone to leakage, and ultimately devaluation.

The Series A is being co-led by Upfront Ventures and IA Ventures. A number of strategics using InfoSum — Ascential, Akamai, Experian, British broadcaster ITV and AT&T’s Xandr — are also participating in the round. The startup has raised $23 million to date.

Nicholas Halstead, the founder and CEO who previously had founded and led another big data company, DataSift (the startup that gained early fame as a middleman for Twitter’s firehose of data, until Twitter called time on that relationship to push its own business strategy), said in an interview that the plan is to use the funding to continue fuelling its growth, with a specific focus on the US market.

To that end, Brian Lesser — the founder and former CEO of Xandr (AT&T’s adtech business that is now a part of AT&T’s WarnerMedia), and previous to that the North American CEO of GroupM — is joining the company as executive chairman. Lesser had originally led Xandr’s investment into InfoSum and had previously been on the board of the startup.

InfoSum got its start several years ago as CognitiveLogic, founded at a time when Halstead was first starting to get his head around the problems that were becoming increasingly urgent in how data was being used by companies, and how newer information architecture models using data warehousing and cloud computing could help solve that.

“I saw the opportunity for data collaboration in a more private way, helping enable companies to work together when it came to customer data,” he said. This eventually led to the company releasing its first product two years ago.

In the interim, and since then, that trend, he noted, has only gained momentum, spurred by the rise of companies like Snowflake that have disrupted the world of data warehousing, cookies have started to increasingly go out of style (and some believe will disappear altogether over time), and the concept of federated architecture has become much more ubiquitous, applied to identity management and other areas.

All of this means that InfoSum’s solution today may be aimed at martech, but it is something that affects a number of industries. Indeed, the decision to focus on marketing technology, he said, was partly because that is the industry that Halstead worked most closely with at DataSift, although the plan is to expand to other verticals as well.

“We’ve done a lot of work to change the marketing industrial complex,” said Lesser, “but its bigger uses cases are in areas like finance and healthcare.”


By Ingrid Lunden

As the pandemic creates supply chain chaos, Craft raises $10M to apply some intelligence

During the COVID-19 pandemic, supply chains have suddenly become hot. Who knew that would ever happen? The race to secure PPE, ventilators and minor things like food was and still is an enormous issue. But perhaps, predictably, the world of “supply chain software” could use some updating. Most of the platforms are deployed “empty” and require the client to populate them with their own data, or “bring their own data.” The UIs can be outdated and still have to be juggled with manual and offline workflows. So startups working in this space are now attracting some timely attention.

Thus, Craft, the enterprise intelligence company, today announces it has closed a $10 million Series A financing round to build what it characterizes as a “supply chain intelligence platform.” With the new funding, Craft will expand its offices in San Francisco, London and Minsk, and grow remote teams across engineering, sales, marketing and operations in North America and Europe.

It competes with some large incumbents, such as Dun & Bradstreet, Bureau van Dijk and Thomson Reuters . These are traditional data providers focused primarily on providing financial data about public companies, rather than real-time data from data sources such as operating metrics, human capital and risk metrics.

The idea is to allow companies to monitor and optimize their supply chain and enterprise systems. The financing was led by High Alpha Capital, alongside Greycroft. Craft also has some high-flying angel investors, including Sam Palmisano, chairman of the Center for Global Enterprise and former CEO and chairman of IBM; Jim Moffatt, former CEO of Deloitte Consulting; Frederic Kerrest, executive vice chairman, COO and co-founder of Okta; and Uncork Capital, which previously led Craft’s seed financing. High Alpha partner Kristian Andersen is joining Craft’s board of directors.

The problem Craft is attacking is a lack of visibility into complex global supply chains. For obvious reasons, COVID-19 disrupted global supply chains, which tended to reveal a lot of risks, structural weaknesses across industries and a lack of intelligence about how it’s all holding together. Craft’s solution is a proprietary data platform, API and portal that integrates into existing enterprise workflows.

While many business intelligence products require clients to bring their own data, Craft’s data platform comes pre-deployed with data from thousands of financial and alternative sources, such as 300+ data points that are refreshed using both Machine Learning and human validation. Its open-to-the-web company profiles appear in 50 million search results, for instance.

Ilya Levtov, co-founder and CEO of Craft, said in a statement: “Today, we are focused on providing powerful tracking and visibility to enterprise supply chains, while our ultimate vision is to build the intelligence layer of the enterprise technology stack.”

Kristian Andersen, partner with High Alpha commented: “We have a deep conviction that supply chain management remains an underinvested and under-innovated category in enterprise software.”

In the first half of 2020, Craft claims its revenues have grown nearly threefold, with Fortune 100 companies, government and military agencies, and SMEs among its clients.


By Mike Butcher