Humio announces $20M Series B to advance unlimited logging tool

Humio, a startup that has built a modern unlimited logging solution, announced a $20 million Series B investment today.

Dell Technologies Capital led the round with participation from previous investor Accel. Today’s investment brings the total raised to $32 million, according to the company.

Humio co-founder and CEO Geeta Schmidt says the startup wanted to build a solution that would allow companies to log everything, while reducing the overall cost associated with doing that, a tough problem due to the resource and data volume involved. The company deals with customers who are processing multiple terabytes of data per day.

“We really wanted to build an infrastructure where it’s easy to log everything and answer anything in real time. So we built an index-free logging solution which allows you to ask […] ad hoc questions over large volumes of data,” Schmidt told TechCrunch.

They are able to ingest so much data by using streaming technology, says company EVP of sales Morten Gram. “We have this real time streaming engine that makes it possible for customers to monitor whatever they know they want to be looking at. So they can build dashboards and alerts for these [metrics] that will be running in real time,” Gram explained.

What’s more, because the solution enables companies to log everything, rather than pick and choose what to log, they can ask questions about things they might not know, such as an on-going security incident or a major outage, and trace the answer from the data in the logs as the incident is happening.

Perhaps more importantly, the company has come up with technology to reduce the cost associated with processing and storing such high volumes of data. “We have thought a lot about trying to do a lot more with a lot less resources. And so, for example, one of our customers, who moved from a competitor, has gone from 80 servers to 14 doing the same volumes of data,” she said.

Deepak Jeevankumar, managing director and lead investor at Dell Technologies Capital, says that his firm recognized that Humio was solving these issues in a creative and modern way.

“Humio’s team has created a new log analysis architecture for the microservices age. This can support real-time analysis at full-speed ingest, while decreasing cost of storage and analysis by at least an order of magnitude,” he explained. “In a short-period of time, Humio has won the confidence of many Fortune 500 customers who have shifted their log platforms to Humio from legacy, decade-old architectures that do not scale for the cloud world.”

The company’s customers include Netlify, Bloomberg, HP Aruba and Michigan State University. It offers on-prem, cloud and hosted SaaS products. Today, the company also announced it was introducing an unlimited ingest plan for hosted SaaS customers.


By Ron Miller

Espressive lands $30M Series B to build better help chatbots

Espressive, a four-year-old startup from former ServiceNow employees, is working to build a better chatbot to reduce calls to company help desks. Today, the company announced a $30 million Series B investment.

Insight Partners led the round with help from Series A lead investor General Catalyst along with Wing Venture Capital. Under the terms of today’s agreement, Insight founder and managing director Jeff Horing will be joining the Espressive Board. Today’s investment brings the total raised to $53 million, according to the company.

Company founder and CEO Pat Calhoun says that when he was at ServiceNow he observed that, in many companies, employees often got frustrated looking for answers to basic questions. That resulted in a call to a Help Desk requiring human intervention to answer the question.

He believed that there was a way to automate this with AI-driven chatbots, and he founded Espressive to develop a solution. “Our job is to help employees get immediate answers to their questions or solutions or resolutions to their issues, so that they can get back to work,” he said.

They do that by providing a very narrowly focused natural language processing (NLP) engine to understand the question and find answers quickly, while using machine learning to improve on those answers over time.

“We’re not trying to solve every problem that NLP can address. We’re going after a very specific set of use cases which is really around employee language, and as a result, we’ve really tuned our engine to have the highest accuracy possible in the industry,” Calhoun told TechCrunch.

He says what they’ve done to increase accuracy is combine the NLP with image recognition technology. “What we’ve done is we’ve built our NLP engine on top of some image recognition architecture that’s really designed for a high degree of accuracy and essentially breaks down the phrase to understand the true meaning behind the phrase,” he said.

The solution is designed to provide a single immediate answer. If, for some reason, it can’t understand a request, it will open a help ticket automatically and route it to a human to resolve, but they try to keep that to a minimum. He says that when they deploy their solution, they tune it to the individual customers’ buzzwords and terminology.

So far they have been able to reduce help desk calls by 40% to 60% across customers with around 85% employee participation, which shows that they are using the tool and it’s providing the answers they need. In fact, the product understands 750 million employee phrases out of the box.

The company was founded in 2016. It currently has 65 employees and 35 customers, but with the new funding, both of those numbers should increase.


By Ron Miller

Around is the new floating head video chat multitasking app

You have to actually get work done, not just video call all day, but apps like Zoom want to take over your screen. Remote workers who need to stay in touch while staying productive are forced to juggle tabs. Meanwhile, call participants often look and sound far away, dwarfed by their background and drowned in noise.

Today, Around launches its new video chat software that crops participants down to just circles that float on your screen so you have space for other apps. Designed for laptops, Around uses auto-zoom and noise cancelling to keep your face and voice in focus. Instead of crowding around one computer or piling into a big-screen conference room, up to 15 people can call from their own laptop without echo — even from right next to each other.

“Traditional videoconferencing tries to maximize visual presence. But too much presence gets in the way of your work,” says Around CEO Dominik Zane. “People want to make eye contact. They want to connect. But they also want to get stuff done. Around treats video as the means to an end, not the end in itself.”

Around becomes available today by request in invite-only beta for Mac, windows, Linux, and web. It’s been in private beta since last summer, but now users can sign up here for early access to Around. The freemium model means anyone can slide the app into their stack without paying at first.

After two years in stealth, Around’s 12-person distributed team reveals that it’s raised $5.2 million in seed funding over multiple rounds from Floodgate, Initialized Capital, Credo Ventures, AngelList’s Naval Ravikant, Product Hunt’s Ryan Hoover, Crashlytics’ Jeff Seibert, and angel Tommy Leep. The plan is to invest in talent and infrastructure to keep video calls snappy.

Not Just A Picturephone

Around CEO Dominik Zane

Around was born out of frustration with remote work collaboration. Zane and fellow Around co-founder Pavel Serbajlo had built mobile marketing company M.dot that was acquired by GoDaddy by using a fully distributed team. But they discovered that Zoom was “built around decades-old assumptions of what a video call should be” says Zane. “A Zoom video call is basically a telephone connected to a video camera. In terms of design, it’s not much different from the original Picturephone demoed at the 1964 World’s Fair.”

So together, they started Around as a video chat app that slips into the background rather than dominating the foreground. “We stripped out every unnecessary pixel by building a real-time panning and zooming technology that automatically keeps callers’ faces–and only their faces–in view at all times” Zane explains. It’s basically Facebook Messenger’s old Chat Heads design, but for the desktop enterprise.

Calls start with a shared link or /Around Slack command. You’re never unexpectedly dumped into a call, so you can stay on task. Since participants are closely cropped to their faces and not blown up full screen, they don’t have to worry about cleaning their workspace or exactly how their hair looks. That reduces the divide between work-from-homers and those in the office.

As for technology, Around’s “EchoTerminator” uses ultrasonic audio to detect nearby laptops and synchronization to eliminate those strange feedback sounds. Around also employs artificial intelligence and the fast CPUs of modern laptops to suppress noise like sirens, dog barks, washing machines, or screaming children. A browser version means you don’t have to wait for people to download anything, and visual emotes like “Cool idea” pop up below people’s faces so they don’t have to interrupt the speaker.

Traditional video chat vs Around

“Around is what you get when you rethink video chat for a 21st-century audience, with 21st-century technology,” says Initialized co-founder and general partner Garry Tan. “Around has cracked an incredibly difficult problem, integrating video into the way people actually work today. It makes other video-call products feel clumsy by comparison.”

There’s one big thing missing from Around: mobile. Since it’s meant for multitasking, it’s desktop/laptop only. But that orthodoxy ignores the fact that a team member on the go might still want to chime in on chats, even with just audio. Mobile apps are on the roadmap, though, with plans to allow direct dial-in and live transitioning from laptop to mobile. The 15-participant limit also prevents Around from working for all-hands meetings.

Competing with video calling giant Zoom will be a serious challenge. Nearly a decade of perfecting its technology gives Zoom super low latency so people don’t talk over each other. Around will have to hope that its smaller windows let it keep delays down. There’s also other multitask video apps like Loom’s asynchronously-recorded video clips that prevent distraction.

With coronavirus putting a new emphasis on video technology for tons of companies, finding great engineers could be difficult. “Talent is scarce, and good video is hard tech. Video products are on the rise. Google and large companies snag all the talent, plus they have the ability and scale to train audio-video professionals at universities in northern Europe” Zane tells me. “Talent wars are the biggest risk and obstacle for all real-time video companies.”

But that rise also means there are tons of people fed up with having to stop work to video chat, kids and pets wandering into their calls, and constantly yelling at co-workers to “mute your damn mic!” If ever there was a perfect time to launch Around, it’s now.

“Eight years ago we were a team of locals and immigrants, traveling frequently, moving between locations and offices” Zane recalls. “We realized that this was the future of work and it’s going to be one of the most significant transformations of modern society over the next 30 years . . . We’re building the product we’ve wanted for ourselves.”

One of the best things about working remotely is you don’t have colleagues randomly bugging you about superfluous nonsense. But the heaviness of traditional video chat swings things too far in the other direction. You’re isolated unless you want to make a big deal out of scheduling a call. We need presence and connection, but also the space to remain in flow. We don’t want to be away or on top of each other. We want to be around.


By Josh Constine

Spectro Cloud launches with $7.5M investment to help developers build Kubernetes clusters their way

By now, we know that Kubernetes is a wildly popular container management platform, but if you want to use it, you pretty much have to choose between having someone manage it for you or building it yourself. Spectro Cloud emerged from stealth today with a $7.5 million investment to give you a third choice which falls somewhere in the middle.

The funding was led by Sierra Ventures with participation from Boldstart Ventures.

Ed Sim, founder at Boldstart says he liked the team and the tech. “Spectro Cloud is solving a massive pain that every large enterprise is struggling with; how to roll your own Kubernetes service on a managed platform without being beholden to any large vendor.” Sim told TechCrunch.

Spectro co-founder and CEO Tenry Fu says that an enterprise should not have to compromise between control and ease of use. “We want to be the first company that brings an easy-to-use managed Kubernetes experience to the enterprise, but also gives them the flexibility to define their own Kubernetes infrastructure stacks at scale,” Fu explained.

Fu says that the stack in this instance consists of the base operating system to the Kubernetes version to the storage, networking and other layers like security, logging, monitoring, load balancing or anything that’s infrastructure related around Kubernetes.

“Within an organization in the enterprise you can serve the needs of your various groups, down to pretty granular level with respect to what’s in your infrastructure stack, and then you don’t have to worry about lifecycle management,” he explained. That’s because they handle that for you, while still giving you that control.

That not only gives enterprise developers greater deployment flexibility, it gives them the ability to move between cloud infrastructure providers more easily, something that is top of mind today as companies don’t want to be locked into a single vendor.

“There’s an infrastructure control continuum that forces enterprises into trade offs against these needs. At one extreme, the managed offerings offer a kind of nirvana around ease of use, but it’s at the expense of control over things like the cloud that you’re on or when you adopt new ecosystem options like updated versions of Kubernetes.”

Fu and his co-founders have a deep background in this, having previously been part of CliQr, a company that helped customers manage applications across hybrid cloud environments. They sold that company to Cisco in 2016, and began developing Spectro Cloud last spring.

It’s early days, but the company has been working with 16 Beta customers.


By Ron Miller

Addapptation snares $1.3M seed to build a better UX for Salesforce

Addapptation, a startup that wants to build a practical design layer on top of Salesforce and other enterprise tools, announced a $1.3 million seed investment today.

2048 Ventures led the round with participation from East Coast Angles, The Millworks II Fund and additional angel investors from New Hampshire, where the firm is located

Co-founder Sumner Vanderhoof says the startup’s goal is to build a user experience platform for enterprise tools like Salesforce . “Our goal is to help make simple, easy to use Salesforce.com solutions built on the addapptation UX platform.

“At the end of the day, we’re really helping transform the way companies work, making their employees more efficient, making the job they do easier and more consistent, so they have a bigger impact on the companies that they work for,” Vanderhoof told TechCrunch.

He says they do this by looking at the company workflow and what issue the customer is trying to solve — such as a problem converting deals through the sales cycle. They will then help build tools and an interface to make it easier to pinpoint this information with the goal of being able to reuse whatever solutions they create for other customers.

He says the platform is template-driven and designed to quickly go from idea to solution. A typical solution takes no longer than two weeks to build and implement. Once a customer is using addapptation, employees can log into the addapptation platform or it can be a layer built into Salesforce providing a more guided experience.

The company has built around 40 plug-ins for the platform, including a heat map that identifies where sales is likely to find the best opportunities to close a deal. The solutions they build are designed to work online or on mobile devices as needed.

Photo: addapptation

Vanderhoof says that the company has a good relationship with Salesforce, and it doesn’t compete directly with the company. “Their main focus is providing tools for a wide audience. Ours is extending the platform beyond what it can do,” he said.

The two founders, Vanderhoof and his wife Carla, took three years building the platform, essentially bootstrapping before taking today’s funding.  The company has 15 employees in its Exeter, NH, headquarters and has 20 customers including Comcast and Ingram Micro.


By Ron Miller

Hashicorp soars above $5B valuation in new $175M venture round

The rise of the cloud over the past decade has forced software developers and DevOps engineers to completely rearchitect the modern web application, ensuring scalability, performance, and security. That’s a really painful proposition when done manually, which is where Hashicorp comes in to play. The company’s suite of products helps everyone in the tech workforce from IT admins to software developers operate in the cloud (mostly) effortlessly and natively.

The company’s products have long garnered rave reviews from technical staffs, and now the company is looking at a brand new massive valuation.

The SF-based startup announced today that it has raised $175 million in Series E financing from Franklin Templeton Investments at a scorching $5.1 billion valuation. For context, when we last covered the company back in late 2018, its valuation was only a “paltry” $1.9 billion following a $100 million round led by growth investor IVP.

The company in its release today touted its success in doubling revenues and customers every year for four straight years as the key reason behind the flush valuation. The company is making a (not so) subtle point that David McJannet, who joined the company as CEO in mid-2016 following a stint as an EIR at Greylock, has seen some success in his new role.

Hashicorp CEO David McJannet. Photo via Hashicorp

The company, founded by Mitchell Hashimoto and Armon Dadgar in 2012, is one of the major pioneers in helping companies build high-quality infrastructure that’s a mix of multi-cloud providers, private cloud, and even legacy systems.

It’s most well-known product is Terraform, which allows developers to write repeatable rules around enterprise infrastructure rather than a patchwork of different scripts that might not work as its writers intended. The idea is that with a consistent framework, Hashicorp’s product can help companies reduce costs (by protecting against, say, over-provisioning of resources) while also helping to balance scale and performance. The company’s other products include Consul around network automation, Vault for security, and Nomad for application deployment.

Hashicorp touches on a bunch of competitive products, but its cohesive set of tools and strong outreach to the developer community has set itself apart from the competition in recent years.

Franklin Templeton is a fairly late stage investor that has funded such enterprise companies as Cloudflare, which went public last year, logs management platform SumoLogic, and cybersecurity business Tanium, all according to Crunchbase.

With a hefty $5.1 billion valuation, the company narrowly missed the catastrophic decline of SaaS stocks over the past few weeks, which have been buffeted by the rapidly spreading global pandemic. But with a new war chest and a focus on a popular and growing enterprise market, the company seems poised to continue its growth.


By Danny Crichton

To make locks touchless, Proxy bluetooth ID raises $42M

We need to go hands-off in the age of coronavirus. That means touching fewer doors, elevators, and sign-in iPads. But once a building is using phone-based identity for security, there’s opportunities to speed up access to WIFI networks and printers, or personalize conference rooms and video call set-ups. Keyless office entry startup Proxy wants to deliver all of this while keeping your phone in your pocket.

The door is just a starting point” Proxy co-founder and CEO Denis Mars tells me. “We’re . . . empowering a movement to take back control of our privacy, our sense of self, our humanity, our individuality.”

With the contagion concerns and security risks of people rubbing dirty, cloneable, stealable key cards against their office doors, investors see big potential in Proxy. Today it’s announcing here a $42 million Series B led by Scale Venture Partners with participation from former funders Kleiner Perkins and Y Combinator plus new additions Silicon Valley Bank and West Ventures.

The raise brings Proxy to $58.8 million in funding so it can staff up at offices across the world and speed up deployments of its door sensor hardware and access control software. “We’re spread thin” says Mars. “Part of this funding is to try to grow up as quickly as possible and not grow for growth sake. We’re making sure we’re secure, meeting all the privacy requirements.”

How does Proxy work? Employers get their staff to install an app that knows their identity within the company, including when and where they’re allowed entry. Buildings install Proxy’s signal readers, which can either integrate with existing access control software or the startup’s own management dashboard.

Employees can then open doors, elevators, turnstiles, and garages with a Bluetooth low-energy signal without having to even take their phone out. Bosses can also opt to require a facial scan or fingerprint or a wave of the phone near the sensor. Existing keycards and fobs still work with Proxy’s Pro readers. Proxy costs about $300 to $350 per reader, plus installation and a $30 per month per reader subscription to its management software.

Now the company is expanding access to devices once you’re already in the building thanks to its SDK and APIs. Wifi router-makers are starting to pre-provision their hardware to automatically connect the phones of employees or temporarily allow registered guests with Proxy installed — no need for passwords written on whiteboards. Its new Nano sensors can also be hooked up to printers and vending machines to verify access or charge expense accounts. And food delivery companies can add the Proxy SDK so couriers can be granted the momentary ability to open doors when they arrive with lunch.

Rather than just indiscriminately beaming your identity out into the world, Proxy uses tokenized credentials so only its sensors know who you are. Users have to approve of new networks’ ability to read their tokens, Proxy has SOC-2 security audit certification, and complies with GDPR. “We feel very strongly about where the biometrics are stored . . . they should stay on your phone” says Mars.

Yet despite integrating with the technology for two-factor entry unlocks, Mars says “We’re not big fans of facial recognition. You don’t want every random company having your face in their database. The face becomes the password you were supposed to change every 30 days.”

Keeping your data and identity safe as we see an explosion of Internet Of Things devices was actually the impetus for starting Proxy. Mars had sold his teleconferencing startup Bitplay to Jive Software where he met his eventually co-founder Simon Ratner, who’d joined after his video annotation startup  Omnisio was acquired by YouTube. Mars was frustrated about every IoT lightbulb and appliance wanting him to download an app, set up a profile, and give it his data.

The duo founded Proxy in 2013 as a universal identity signal. Today it has over 60 customers. While other apps want you to constantly open them, Proxy’s purpose is to work silently in the background and make people more productive. “We believe the most important technologies in the world don’t seek your attention. They work for you, they empower you, and they get out of the way so you can focus your attention on what matters most — living your life.”

Now Proxy could actually help save lives. “The nature of our product is contactless interactions in commercial buildings and workplaces so there’s a bit of an unintended benefit that helps prevent the spread of the virus” Mars explains. “We have seen an uptick in customers starting to set doors and other experiences in longer-range hands-free mode so that users can walk up to an automated door and not have to touch the handles or badge/reader every time.”

The big challenge facing Proxy is maintaining security and dependability since it’s a mission-critical business. A bug or outage could potentially lock employees out of their workplace (when they eventually return from quarantine). It will have to keep hackers out of employee files. Proxy needs to stay ahead of access control incumbents like ADT and Honeywell as well as smaller direct competitors like $10 million-funded Nexkey and $28 million-funded Openpath.

Luckily, Proxy has found a powerful growth flywheel. First an office in a big building gets set up, then they convince the real estate manager to equip the lobby’s turnstiles and elevators with Proxy. Other tenants in the building start to use it, so they buy Proxy for their office. Then they get their offices in other cities on board…starting the flywheel again. That’s why Proxy is doubling down on sales to commercial real estate owners.

The question is when Proxy will start knocking on consumers’ doors. While leveling up into the enterprise access control software business might be tough for home smartlock companies like August, Proxy could go down market if it built more physical lock hardware. Perhaps we’ll start to get smart homes that know who’s home, and stop having to carry pointy metal sticks in our pockets.


By Josh Constine

Electric reopens Series B to make room for Dick Costolo and Adam Bain

Electric, the platform that delivers IT services to small and medium businesses, has today announced that it has raised an additional $14.5 million on its Series B from 01 Advisors, the fund led by Twitter alums Dick Costolo and Adam Bain.

Though the funding is a part of the company’s Series B financing, founder Ryan Denehy explained that the deal was signed on a uptick in valuation, though wouldn’t elaborate further.

Electric raised a $25 million Series B led by GGV in January of 2019.

The company allows businesses with small IT teams, or no IT team, to get on the platform and either automate or manage with one click the various administrative facets of that role. Most IT tasks are focused on administration, distribution and maintenance of software programs.

Electric customers ensure that the software is installed on every corporate machine, effectively giving the top IT employee or decision-maker an easy way to grant and revoke permissions, assign roles, and make sure software is up to date on various machines.

The hope is that this allows IT specialists to focus on the jobs that are best suited to their skills, such as troubleshooting, hardware installation and other more difficult tasks.

Denehy said that this new fundraise was all about bringing strategic operators under the tent, not cash. He explained that at the close of last year, VCs started reaching out to get in on the company’s Series C. The team sat down for a board meeting where they weighed their options, one of which being a $40 million Series C.

“We have no immediate use for most of that money,” said Denehy. “Is it going to make our customers happy or is it going to make us a better run company? It’s kind of a philosophical question. A lot of founders sort of equate success to the fact that they raised two rounds within six months of each other, and I just took the contrarian view. I wondered what we could actually do to make our company run better and the conclusion was to get the best business leaders and operators in tech to get around the table at our company.”

This brings Electric’s total funding to just over $50 million. Denehy says part of the reluctance around fundraising stemmed from the fact that Electric had tripled top line growth over the past two years. But that doesn’t mean he had all the answers when it comes to hyper growth and scaling the business.

Costolo recalled when Bain first met Ryan Denehy, and came back excited about his willingness to learn.

“Ryan is a really enthusiastic founder/CEO,” said Costolo. “Some founders know they don’t have the answers to everything and that there’s still a lot to learn, and they want to learn. And Ryan is right down the middle for that.”

Costolo also explained that he’s excited about how well Electric fits in to the dogma of ‘software is eating the world’, automating these low-level tasks to free up resources and energy for higher-order tasks.

Costolo and Bain operate slightly unusually for a growth-stage fund (01 Advisors writes checks for later A rounds and B rounds). The duo don’t want to take board seats, as they’d rather be “sitting next to the founder instead of across the table from the founder.”

This results in a hands-on approach based on their experience as operators. Remember, Costolo grew Twitter to a market cap of $23.4 billion before stepping down, and Bain spent six years at Twitter as President of Global Revenue and Partnerships before stepping into the COO role.

Costolo and Bain have already brought their hands-on approach to Electric, having conversations with the Head of HR around how to introduce HR business partners to different departments and how to scale and set goals for the enterprise sales team.


By Jordan Crook

BackboneAI scores $4.7M seed to bring order to intercompany data sharing

BackboneAI, an early-stage startup that wants to help companies dealing with lots of data, particularly coming from a variety of external sources, announced a $4.7 million seed investment today.

The round was led by Fika Ventures with participation from Boldstart Ventures, Dynamo Ventures, GGV Capital, MetaProp, Spider VC and several other unnamed investors.

Company founder Rob Bailey says he has spent a lot of time in his career watching how data flows in organizations. There are still a myriad of challenges related to moving data between organizations, and that’s what his company is trying to solve. “BackboneAI is an AI platform specifically built for automating data flows within and between companies,” he said.

This could involve any number of scenarios from keeping large, complex data catalogues up-to-date to coordinating the intricate flow of construction materials between companies or content rights management across an entertainment industry.

Bailey says that he spent 18 months talking to companies before he built the product. “What we found is that every company we talked to was, in some way or another, concerned about an absolute flood of data from all these different applications and from all the companies that they’re working with externally,” he explained.

The BackboneAI platform aims to solve a number of problems related to this. For starters, it automates the acquisition of this data, usually from third parties like suppliers, customers, regulatory agencies and so forth. Then it handles ingestion of the data, and finally it takes care of a lot of actual processing from external sources, while mapping it to internal systems like the company ERP system.

As an example, he uses an industrial supply company that may deal with a million SKUs across a couple of dozen divisions. Trying to track that with manual or even legacy systems is difficult. “They take all this product data in [from external suppliers], and then process the information in their own [internal] product catalog, and then finally present that data about those products to hundreds of thousands of customers. It’s an incredibly large and challenging data problem as you’re processing millions and millions of SKUs and orders, and you have to keep that data current on a regular basis,” he explained.

The company is just getting started. It spent 2019 incubating inside of Boldstart Ventures . Today the company has close to 20 employees in New York City, and it has signed its first Fortune 500 customer. Bailey says they have 15 additional Fortune 500 companies in the pipeline. With the seed money, he hopes to build on this initial success.


By Ron Miller

Netlify nabs $53M Series C as micro services approach to web development grows

Netlify, the startup that wants to kill the web server and change the way developers build websites, announced a $53 million Series C today.

EQT Ventures Fund led the round with contributions from existing investors Andreessen Horowitz and Kleiner Perkins and newcomer Preston-Werner Ventures. Under the terms of the deal Laura Yao, deal partner and investment advisor at EQT Ventures will be joining the Netlify board. The startup has now raised $97 million, according to the company.

Like many startups recently, Netlify’s co-founder Chris Bach says they weren’t looking for new funding, but felt with the company growing rapidly, it would be prudent to take the money to help continue that growth.

While Bach and CEO Matt Biilmann didn’t want to discuss valuation, they said it was “very generous” and in line with how they see their business. Neither did they want to disclose specific revenue figures, but did say that the company has tripled revenue three years running.

One thing fueling that growth is the sheer number of developers joining the platform. When we spoke to the company for its Series B in 2018, it had 300,000 sign-ups. Today that number has ballooned to 800,000.

As we wrote about the company in a 2018 article, it wants to change the way people develop web sites:

“Netlify has abstracted away the concept of a web server, which it says is slow to deploy and hard to secure and scale. By shifting from a monolithic website to a static front end with back-end microservices, it believes it can solve security and scaling issues and deliver the site much faster.”

While developer popularity is a good starting point, getting larger customers on board is the ultimate goal that will drive more revenue, and the company wants to use its new injection of capital to build the enterprise side of the business. Current enterprise customers include Google, Facebook, Citrix and Unilever.

Netlify has grown from 38 to 97 employees since the beginning of last year and hopes to reach 180 by year’s end.


By Ron Miller

Thought Machine nabs $83M for a cloud-based platform that powers banking services

The world of consumer banking has seen a massive shift in the last ten years. Gone are the days where you could open an account, take out a loan, or discuss changing the terms of your banking only by visiting a physical branch. Now, you can do all this and more with a few quick taps on your phone screen — a shift that has accelerated with customers expecting and demanding even faster and more responsive banking services.

As one mark of that switch, today a startup called Thought Machine, which has built cloud-based technology that powers this new generation of services on behalf of both old and new banks, is announcing some significant funding — $83 million — a Series B that the company plans to use to continue investing in its platform and growing its customer base.

To date, Thought Machine’s customers are primarily in Europe and Asia — they include large, legacy outfits like Standard Chartered, Lloyds Banking Group, and Sweden’s SEB through to “challenger” (AKA neo-) banks like Atom Bank. Some of this financing will go towards boosting the startup’s activities in the US, including opening an office in the country later this year and moving ahead with commercial deals.

The funding is being led by Draper Esprit, with participation also from existing investors Lloyds Banking Group, IQ Capital, Backed and Playfair.

Thought Machine, which started in 2014 and now employs 300, is not disclosing its valuation but Paul Taylor, the CEO and founder, noted that the market cap is currently “increasing healthily.” In its last round, according to PitchBook estimates, the company was valued at around $143 million, which at this stage of funding puts this latest round potentially in the range of between $220 million and $320 million.

Thought Machine is not yet profitable, mainly because it is in growth mode, said Taylor. Of note, the startup has been through one major bankruptcy restructuring, although it appears that this was mainly for organisational purposes: all assets, employees and customers from one business controlled by Taylor were acquired by another.

Thought Machine’s primary product and technology is called VaultOS, a platform that contains a range of banking services — they include current/checking accounts; savings accounts; loans; credit cards and mortgages — that Thought Machine does not sell directly to consumers, but sells by way of a B2B2C model.

The services are provisioned by way of smart contracts, which allows Thought Machine and its banking customers to personalise, vary and segment the terms for each bank — and potentially for each customer of the bank.

It’s a little odd to think that there is an active market for banking services that are not built and owned by the banks themselves. After all, aren’t these the core of what banks are supposed to do?

But one way to think about it is in the context of eating out. Restaurants’ kitchens will often make in-house what they sell and serve. But in some cases, when it makes sense, even the best places will buy in (and subsequently sell) food that was crafted elsewhere. For example, a restaurant will re-sell cheese or charcuterie, and the wine is likely to come from somewhere else, too.

The same is the case for banks, whose “Crown Jewels” are in fact not the mechanics of their banking services, but their customer service, their customer lists, and their deposits. Better banking services (which may not have been built “in-house”) are key to growing these other three.

“There are all sorts of banks, and they are all trying to find niches,” said Taylor. Indeed, the startup is not the only one chasing that business. Others include Mambu, Temenos and Italy’s Edera.

In the case of the legacy banks that work with the startup, the idea is that these behemoths can migrate into the next generation of consumer banking services and banking infrastructure by cherry-picking services from the VaultOS platform.

“Banks have not kept up and are marooned on their own tech, and as each year goes by, it comes more problematic,” noted Taylor.

In the case of neobanks, Thought Machine’s pitch is that it has already built the rails to run a banking service, so a startup — “new challengers like Monzo and Revolut that are creating quite a lot of disruption in the market” (and are growing very quickly as a result) — can integrate into these to get off the ground more quickly and handle scaling with less complexity (and lower costs).

It’s not the only company providing a platform for banking services that are in turn

Taylor was new to fintech when he founded Thought Machine, but he has a notable track record in the world of tech that you could argue played a big role in his subsequent foray into banking.

Formerly an academic specialising in linguistics and engineering, his first startup, Rhetorical Systems, commercialised some of his early speech-to-text research and was later sold to Nuance in 2004.

His second entrepreneurial effort, Phonetic Arts, was another speech startup, aimed at tech that could be used in gaming interactions. In 2010, Google approached the startup to see if it wanted to work on a new speech-to-text service it was building. It ended up acquiring Phonetic Arts, and Taylor took on the role of building and launching Google Now, with that voice tech eventually making its way to Google Maps, accessibility services, the Google Assistant and other places where you speech-based interaction makes an appearance in Google products.

While he was working for years in the field, the step changes that really accelerated voice recognition and speech technology, Taylor said, were the rapid increases in computing power and data networks that “took us over the edge” in terms of what a machine could do, specifically in the cloud.

And those are the same forces, in fact, that led to consumers being able to run our banking services from smartphone apps, and for us to want and expect more personalised services overall. Taylor’s move into building and offering a platform-based service to address the need for multiple third-party banking services follows from that, and also is the natural heir to the platform model you could argue Google and other tech companies have perfected over the years.

Draper Esprit has to date built up a strong portfolio of fintech startups that includes Revolut, N26, TransferWise and Freetrade. Thought Machine’s platform approach is an obvious complement to that list. (Taylor did not disclose if any of those companies are already customers of Thought Machine’s, but if they are not, this investment could be a good way of building inroads.)

“We are delighted to be partnering with Thought Machine in this phase of their growth,” said Vinoth Jayakumar, Investment Director, Draper Esprit, in a statement. “Our investments in Revolut and N26 demonstrate how banking is undergoing a once in a generation transformation in the technology it uses and the benefit it confers to the customers of the bank. We continue to invest in our thesis of the technology layer that forms the backbone of banking. Thought Machine stands out by way of the strength of its engineering capability, and is unique in being the only company in the banking technology space that has developed a platform capable of hosting and migrating international Tier 1 banks. This allows innovative banks to expand beyond digital retail propositions to being able to run every function and type of financial transaction in the cloud.”

“We first backed Thought Machine at seed stage in 2016 and have seen it grow from a startup to a 300-person strong global scaleup with a global customer base and potential to become one of the most valuable European fintech companies,” said Max Bautin, Founding Partner of IQ Capital, in a statement. “I am delighted to continue to support Paul and the team on this journey, with an additional £15 million investment from our £100 million Growth Fund, aimed at our venture portfolio outperformers.”


By Ingrid Lunden

Notivize makes it easier for non-technical teams to optimize app notifications

A new startup called Notivize aims to give product teams direct access to one of their most important tools for increasing user engagement — notifications.

The company has been testing the product with select customers since last year and says it has already sent hundreds of thousands of notifications. And this week, it announced that it has raised $500,000 in seed funding led by Heroic Ventures.

Notivize co-founder Matt Bornski has worked at a number of startups including AppLovin and Wink, and he said he has “so many stories I can tell you about the time it takes to change a notification that’s deeply embedded in your stack.”

To be clear, Bornski isn’t talking about a simple marketing message that’s part of a scheduled campaign. Instead, he said that the “most valuable” notifications (e.g., the ones that users actually respond to) are usually driven by activity in an app.

For example, it might sound obvious to send an SMS message to a customer once the product they’ve purchased has shipped, but Bornski said that actually creating a notification like that would normally require an engineer to write new code.

“There’s the traditional way that these things are built: The product team specs out that we need to send this email when this happens, or send this SMS or notification when this happens, then the engineering team will go in and find the part of the code where they detect that such a thing has happened,” he said. “What we really want to do is give [the product team] the toolkit, and I think we have.”

Notivize rule

So with Notivize, non-coding members of the product and marketing team can write “if-then” rules that will trigger a notification. And this, Bornski said, also makes it easier to “A/B test and optimize your copy and your send times and your channels” to ensure that your notifications are as effective as possible.

He added that companies usually don’t build this for themselves, because when they’re first building an app, it’s “not a rational thing to invest your time and effort in when you’re just testing the market or you’re struggling for product market fit.” Later on, however, it can be challenging to “go in and rip out all the old stuff” — so instead, you can just take advantage of what Notivize has already built.

Bornski also emphasized that the company isn’t trying to replace services that provide the “plumbing” for notifications. Indeed, Notivize actually integrates with SendGrid and Twilio to send the notifications.

“The actual sending is not the core value [of what we do],” he said. “We’re improving the quality of what you’re paying for, of what you send.”

Notivize allows customers to send up to 100 messages per month for free. After that, pricing starts at $14.99 per month.

“The steady march of low-code and no-code solutions into the product management and marketing stack continues to unlock market velocity and product innovation,” said Heroic Ventures founder Michael Fertik in a statement. “Having been an early investor in several developer platforms, it is clear that Notivize has cracked the code on how to empower non-technical teams to manage critical yet complex product workflows.”


By Anthony Ha

London-based Gyana raises $3.9M for a no-code approach to data science

Coding and other computer science expertise remain some of the more important skills that a person can have in the working world today, but in the last few years, we have also seen a big rise in a new generation of tools providing an alternative way of reaping the fruits of technology: “no-code” software, which lets anyone — technical or non-technical — build apps, games, AI-based chatbots, and other products that used to be the exclusive terrain of engineers and computer scientists.

Today, one of the newer startups in the category — London-based Gyana, which lets non-technical people run data science analytics on any structured dataset — is announcing a round of £3 million to fuel its next stage of growth.

Led by UK firm Fuel Ventures, other investors in this round include Biz Stone of Twitter, Green Shores Capital and U+I , and it brings the total raised by the startup to $6.8 million since being founded in 2015.

Gyana (Sanskrit for “knowledge”) was co-founded by Joyeeta Das and David Kell, who were both pursuing post-graduate degrees at Oxford: Das, a former engineer, was getting an MBA, and Kell was doing a PhD in physics.

Das said that the idea of building this tool came out of the fact that the pair could see a big disconnect emerging not just in their studies, but also in the world at large — not so much a digital divide, as a digital light year in terms of the distance between the groups of who and who doesn’t know how to work in the realm of data science.

“Everyone talks about using data to inform decision making, and the world becoming data-driven, but actually that proposition is available to less than one percent of the world,” she said.

Out of that, the pair decided to work on building a platform that Das describes as a way to empower “citizen data scientists”, by letting users upload any structured data set (for example, a .CSV file) and running a series of queries on it to be able to visualise trends and other insights more easily.

While the longer term goal may be for any person to be able to produce an analytical insight out of a long list of numbers, the more practical and immediate application has been in enterprise services and building tools for non-technical knowledge workers to make better, data-driven decisions.

To prove out its software, the startup first built an app based on the platform that it calls Neera (Sanskrit for “water”), which specifically parses footfall and other “human movement” metrics, useful for applications in retail, real estate and civic planning — for example to determine well certain retail locations are performing, footfall in popular locations, decisions on where to place or remove stores, or how to price a piece of property.

Starting out with the aim of mid-market and smaller companies — those most likely not to have in-house data scientists to meet their business needs — startup has already picked up a series of customers that are actually quite a lot bigger than that. They include Vodafone, Barclays, EY, Pret a Manger, Knight Frank and the UK Ministry of Defense. It says it has some £1 million in contracts with these firms currently.

That, in turn, has served as the trigger to raise this latest round of funding and to launch Vayu (Sanskrit for “air”) — a more general purpose app that covers a wider set of parameters that can be applied to a dataset. So far, it has been adopted by academic researchers, financial services employees, and others that use analysis in their work, Das said.

With both Vayu and Neera, the aim — refreshingly — is to make the whole experience as privacy-friendly as possible, Das noted. Currently, you download an app if you want to use Gyana, and you keep your data local as you work on it. Gyana has no “anonymization” and no retention of data in its processes, except things like analytics around where your cursor hovers, so that Gyana knows how it can improve its product.

“There are always ways to reverse engineer these things,” Das said of anonymization. “We just wanted to make sure that we are not accidentally creating a situation where, despite learning from anaonyised materials, you can’t reverse engineer what people are analysing. We are just not convinced.”

While there is something commendable about building and shipping a tool with a lot of potential to it, Gyana runs the risk of facing what I think of as the “water, water everywhere” problem. Sometimes if a person really has no experience or specific aim, it can be hard to think of how to get started when you can do anything. Das said they have also identified this, and so while currently Gyana already offers some tutorials and helper tools within the app to nudge the user along, the plan is to eventually bring in a large variety of datasets for people to get started with, and also to develop a more intuitive way to “read” the basics of the files in order to figure out what kinds of data inquiries a person is most likely to want to make.

The rise of “no-code” software has been a swift one in the world of tech spanning the proliferation of startups, big acquisitions, and large funding rounds. Companies like Airtable and DashDash are aimed at building analytics leaning on interfaces that follow the basic design of a spreadsheet; AppSheet, which is a no-code mobile app building platform, was recently acquired by Google; and Roblox (for building games without needing to code) and Uncorq (for app development) have both raised significant funding just this week. In the area of no-code data analytics and visualisation, there are biggies like Tableau, as well as Trifacta, RapidMiner and more.

Gartner predicts that by 2024, some 65% of all app development will be made on low- or no-code platforms, and Forrester estimates that the no- and low-code market will be worth some $10 billion this year, rising to $21.2 billion by 2024.

That represents a big business opportunity for the likes of Gyana, which has been unique in using the no-code approach specifically to tackle the area of data science.

However, in the spirit of citizen data scientists, the intention is to keep a consumer version of the apps free to use as it works on signing up enterprise users with more enhanced paid products, which will be priced on an annual license basis (currently clients are paying between $6,000 and $12,000 depending on usage, she said).

“We want to do free for as long as we can,” Das said, both in relation to the data tools and the datasets that it will offer to users. “The biggest value add is not about accessing premium data that is hard to get. We are not a data marketplace but we want to provide data that makes sense to access,” adding that even with business users, “we’d like you to do 90% of what you want to do without paying for anything.”


By Ingrid Lunden

Lightspeed leads Laiye’s $42M round to bet on Chinese enterprise IT

Laiye, a Chinese startup that offers robotic process automation services to several major tech firms in the nation and government agencies, has raised $42 million in a new funding round as it looks to scale its business.

The new financing round, Series C, was co-led by Lightspeed Venture Partners and Lightspeed China Partners. Cathay Innovation, which led the startup’s Series B+ round and Wu Capital, which led the Series B round, also participated in the new round.

China has been the hub for some of the cheapest labor in the world. But in recent years, a number of companies and government agencies have started to improve their efficiency with the help of technology.

That’s where Laiye comes into play. Robotic process automation (RPA) allows software to mimic several human behaviors such as keyboard strokes and mouse clicks.

“For instance, a number of banks did not previously offer APIs, so humans had to sign in and fetch the data and then feed it into some other software. Processes like these could be automated by our platform,” said Arvid Wang, co-founder and co-chief executive of Laiye, in an interview with TechCrunch.

The four-and-a-half-year-old startup, which has raised more than $100 million to date, will use the fresh capital to hire talent from across the globe and expand its services. “We believe robotic process automation will achieve its full potential when it combines AI and the best human talent,” he said.

Laiye’s announcement today comes as the market for robotic automation process is still in nascent stage in China. There are a handful of startups looking into this space, but Laiye, which counts Microsoft as an investor, and Sequoia-backed UiPath are the two clear leaders in the market currently.

As my colleague Rita Liao wrote last year, it was only recently that some entrepreneurs and investors in China started to shift their attention from consumer-facing products to business applications.

Globally, RPA has emerged as the fastest growing market in enterprise space. A Gartner report found last year that RPA market grew over 63% in 2018. Recent surveys have shown that most enterprises in China today are also showing interest in enhancing their RPA projects and AI capabilities.

Laiye today has more than 200 partners and more than 200,000 developers have registered to use its multilingual UiBot RPA platform. UiBot enables integration with Laiye’s native and third-party AI capabilities such as natural language processing, optical character recognition, computer vision, chatbot and machine learning.

“We are very bullish on China, and the opportunities there are massive,” said Lightspeed partner Amy Wu in an interview. “Laiye is doing phenomenally there, and with this new fundraise, they can look to expand globally,” she said.


By Manish Singh

DSP Concepts raises $14.5M for its Audio Weaver platform

DSP Concepts — a startup whose Audio Weaver software is used by companies as varied as Tesla, Porsche, GoPro and Braun Audio — is announcing that it’s raised $14.5 million in Series B funding.

The startup goal, as explained to me by CEO Chin Beckmann and CTO Paul Beckmann (yep, they’re a husband-and-wife founding team), is to create the standard framework that companies use to develop their audio processing software.

To that end, Chin told me they were “picky about who we wanted on the B round, we wanted it to represent the support and endorsement of the industry.”

So the round was led by Taiwania Capital, but it also includes investments from the strategic arms of DSP Concepts’ industry partners — BMW i Ventures (which led the Series A), the Sony Innovation Growth Fund by Innovation Growth Ventures, MediaTek Ventures, Porsche Ventures and the ARM IoT Fund.

Paul said Audio Weaver started out as the “secret weapon” of the Beckmanns’ consulting business, which he could use to “whip out” the results of an audio engineering project. At a certain point, consulting customers started asking him, “Hey, how about you teach me how to use that?” so they decided to launch a startup focused on the Audio Weaver platform.

Audio Weaver - AWE Designer

Paul described the software as a “graphical block diagram editor.” Basically, it provides a way for audio engineers to combine and customize different software modules for audio processing.

“Audio is still in the Stone Ages compared to other industries,” he said. “Suppose you’re building a product with a touchscreen — are you going write the graphics from scratch or use a framework like Qt?”

Similarly, he suggested that while many audio engineers are still “down in the weeds writing code,” they can take advantage of Audio Weaver’s graphical interface to piece everything together, as well as the company’s “hundreds of different modules — pre-written, pre-tested, pre-optimized functions to build up your system.”

For example, Paul said that by using the Audio Weaver platform, DSP Concepts engineers could test out “hundreds out ideas” for algorithms that for reducing wind noise in the footage captured by GoPro cameras, then ultimately “handed the algorithms over to GoPro,” whose team could them plug the algorithms into their software and modify it themselves.

The Beckmanns said the company also works closely with chip manufacturers to ensure that audio software will work properly on any device powered by a given chipset.

Other modules include TalkTo, which is designed to give voice assistants like Alexa “super-hearing,” so that they can still isolate voice commands and cancel out all the other noise in loud environments, even rock concerts. (You can watch a TalkTo demo in the video below.)

DSP Concepts has now raised more than $25 million in total funding.

 


By Anthony Ha