Instagram founders join $30M raise for Loom work video messenger

Why are we all trapped in enterprise chat apps if we talk 6X faster than we type, and our brain processes visual info 60,000X faster than text? Thanks to Instagram, we’re not as camera-shy anymore. And everyone’s trying to remain in flow instead of being distracted by multi-tasking.

That’s why now is the time for Loom. It’s an enterprise collaboration video messaging service that lets you send quick clips of yourself so you can get your point across and get back to work. Talk through a problem, explain your solution, or narrate a screenshare. Some engineering hocus pocus sees videos start uploading before you finish recording so you can share instantly viewable links as soon as you’re done.

“What we felt was that more visual communication could be translated into the workplace and deliver disproportionate value” co-founder and CEO Joe Thomas tells me. He actually conducted our whole interview over Loom, responding to emailed questions with video clips.

Launched in 2016, Loom is finally hitting its growth spurt. It’s up from 1.1 million users and 18,000 companies in February to 1.8 million people at 50,000 businesses sharing 15 million minutes of Loom videos per month. Remote workers are especially keen on Loom since it gives them face-to-face time with colleagues without the annoyance of scheduling synchronous video calls. “80% of our professional power users had primarily said that they were communicating with people that they didn’t share office space with” Thomas notes.

A smart product, swift traction, and a shot at riding the consumerization of enterprise trend has secured Loom a $30 million Series B. The round that’s being announced later today was led by prestigious SAAS investor Sequoia and joined by Kleiner Perkins, Figma CEO Dylan Field, Front CEO Mathilde Collin, and Instagram co-founders Kevin Systrom and Mike Krieger.

“At Instagram, one of the biggest things we did was focus on extreme performance and extreme ease of use and that meant optimizing every screen, doing really creative things about when we started uploading, optimizing everything from video codec to networking” Krieger says. “Since then I feel like some products have managed to try to capture some of that but few as much as Loom did. When I first used Loom I turned to Kevin who was my Instagram co-founder and said, ‘oh my god, how did they do that? This feels impossibly fast.’”


Systrom concurs about the similarities, saying “I’m most excited because I see how they’re tackling the problem of visual communication in the same way that we tried to tackle that at Instagram.” Loom is looking to double-down there, potentially adding the ability to Like and follow videos from your favorite productivity gurus or sharpest co-workers.

Loom is also prepping some of its most requested features. The startup is launching an iOS app next month with Android coming the first half of 2020, improving its video editor with blurring for hiding your bad hair day and stitching to connect multiple takes. New branding options will help external sales pitches and presentations look right. What I’m most excited for is transcription, which is also slated for the first half of next year through a partnership with another provider, so you can skim or search a Loom. Sometimes even watching at 2X speed is too slow.

But the point of raising a massive $30 million Series B just a year after Loom’s $11 million Kleiner-led Series A is to nail the enterprise product and sales process. To date, Loom has focused on a bottom-up distribution strategy similar to Dropbox. It tries to get so many individual employees to use Loom that it becomes a team’s default collaboration software. Now it needs to grow up so it can offer the security and permissions features IT managers demand. Loom for teams is rolling out in beta access this year before officially launching in early 2020.

Loom’s bid to become essential to the enterprise, though, is its team video library. This will let employees organize their Looms into folders of a knowledge base so they can explain something once on camera, and everyone else can watch whenever they need to learn that skill. No more redundant one-off messages begging for a team’s best employees to stop and re-teach something. The Loom dashboard offers analytics on who’s actually watching your videos. And integration directly into popular enterprise software suites will let recipients watch without stopping what they’re doing.

To build out these features Loom has already grown to a headcount of 45. It’s also hired away former head of growth at Dropbox Nicole Obst, head of design for Slack Joshua Goldenberg, and VP of commercial product strategy for Intercom Matt Hodges.


Still, the elephants in the room remain Slack and Microsoft Teams. Right now, they’re mainly focused on text messaging with some additional screensharing and video chat integrations. They’re not building Loom-style asynchronous video messaging…yet. “We want to be clear about the fact that we don’t think we’re in competition with Slack or Microsoft Teams at all. We are a complementary tool to chat” Thomas insists. But given the similar productivity and communication ethos, those incumbents could certainly opt to compete. Slack already has 12 million daily users it could provide with video tools.

Loom co-founder and CEO Joe Thomas

Hodges, Loom’s head of marketing, tells me “I agree Slack and Microsoft could choose to get into this territory, but what’s the opportunity cost for them in doing so? It’s the classic build vs. buy vs. integrate argument.” Slack bought screensharing tool Screenhero, but partners with Zoom and Google for video chat. Loom will focus on being easily integratable so it can plug into would-be competitors. And Hodges notes that “Delivering asynchronous video recording and sharing at scale is non-trivial. Loom holds a patent on its streaming, transcoding, and storage technology, which has proven to provide a competitive advantage to this day.”

The tea leaves point to video invading more and more of our communication, so I expect rival startups and features to Loom will crop up. Vidyard and Wistia’s Soapbox are already pushing into the space. As long as it has the head start, Loom needs to move as fast as it can. “It’s really hard to maintain focus to deliver on the core product experience that we set out to deliver versus spreading ourselves too thin. And this is absolutely critical” Thomas tells me.

One thing that could set Loom apart? A commitment to financial fundamentals. “When you grow really fast, you can sometimes lose sight of what is the core reason for a business entity to exist, which is to become profitable. . . Even in a really bold market where cash can be cheap, we’re trying to keep profitability at the top of our minds.”


By Josh Constine

Coralogix announces $10M Series A to bring more intelligence to logging

Coralogix, a startup that wants to bring automation and intelligence to logging, announced a $10 million Series A investment today.

The round was led by Aleph with participation from StageOne Ventures, Janvest Capital Partners and 2B Angels. Today’s investment brings the total raised to $16.2 million, according to the company.

CEO and co-founder Ariel Assaraf says his company focuses on two main areas: logging and analysis. The startup has been doing traditional applications performance monitoring up until now, but today, it also announced it was getting into security logging, where it tracks logs for anomalies and shares this information with security information and event management (SEIM) tools.

“We do standard log analytics in terms of ingesting, parsing, visualizing, alerting and searching for log data at scale using scaled, secure infrastructure,” Assaraf said. In addition, the company has developed a set of algorithms to analyze the data, and begin to understand patterns of expected behavior, and how to make use of that data to recognize and solve problems in an automated fashion.

“So the idea is to generally monitor a system automatically for customers plus giving them the tools to quickly drill down into data, understand how it behaves and get context to the issues that they see,” he said.

For instance, the tool could recognize that a certain sequence of events like a user logging in, authenticating that user and redirecting him or her to the application or website. All of those events happen every time, so if there is something different, the system will recognize that and share the information with DevOps team that something is amiss.

The company, which has offices in Tel Aviv, San Francisco and Kiev, was founded in 2015. It already has 1500 customers including Postman, Fiverr, KFC and Caesars Palace. They’ve been able to build the company with just 30 people to this point, but want to expand the sales and marketing team to help build it out the customer base further. The new money should help in that regard.


By Ron Miller

Vivun snags $3M seed round to bring order to pre-sales

Vivun, a startup that wants to help companies keep better track of pre-sales data announced a $3 million seed round today led by Unusual Ventures, the venture firm run by Harness CEO Jyoti Bansal.

Vivun founder and CEO Matt Darrow says that pre-sales team works more closely with the customer than anyone else, delivering demos and proof of concepts, and generally helping sales get over the finish line. While sales has CRM to store knowledge about the customer, pre-sales has been lacking a tool to track info about their interactions with customers, and that’s what his company built.

“The main problem that we solve is we give technology to those pre-sales leaders to run and operate their teams, but then take those insights from the group that knows more about the technology and the customer than anybody else, and we deliver that across the organization to the product team, sales team and executive staff,” Darrow explained.

Darrow is a Zuora alumni, and his story is similar to that company’s founder Tien Tzuo, who built the first billing system for Salesforce, then founded Zuroa to build a subscription billing system for everyone else. Similarly, Darrow built a pre-sales tool for Zuroa after finding there wasn’t anything else out there that was devoted specifically to tracking that kind of information.

“At Zuora, I had to build everything from scratch. After the IPO, I realized that this is something that every tech company can take advantage of because every technology company will really need this role to be of high value and impact,” he said.

The company not only tracks information via a mobile app and browser tool, it also has a reporting dashboard to help companies understand and share the information the pre-sales team is hearing from the customer. For example, they might know that x number of customers have been asking for a certain feature, and this information can be organized and passed onto other parts of the company.

Screenshot: Vivun

Bansal, who was previously CEO and co-founder at AppDynamics, a company he sold to Cisco for $3.7 billion just before its IPO in 2017, saw a company filling a big hole in the enterprise software ecosystem. He is not just an investor, he’s also a customer.

“To be successful, a technology company needs to understand three things: where it will be in five years, what its customers need right now, and what the market wants that it’s not currently providing. Pre-sales has answers to all three questions and is a strategically important department that needs management, analytics, and tools for accelerating deals. Yet, no one was making software for this critical department until Vivun,” he said in a statement.

The company was founded in 2018 and has been bootstrapped until now. It spent the first year building out the product. Today, the company has 20 customers including SignalFx (acquired by Splunk in August for $1.05 billion) and Harness.


By Ron Miller

Linear takes $4.2M led by Sequoia to build a better bug tracker and more

Software will eat the world, as the saying goes, but in doing so, some developers are likely to get a little indigestion. That is to say, building products requires working with disparate and distributed teams, and while developers may have an ever-growing array of algorithms, APIs and technology at their disposal to do this, ironically the platforms to track it all haven’t evolved with the times. Now three developers have taken their own experience of that disconnect to create a new kind of platform, Linear, which they believe addresses the needs of software developers better by being faster and more intuitive. It’s bug tracking you actually want to use.

Today, Linear is announcing a seed round of $4.2 million led by Sequoia, with participation also from Index Ventures and a number of investors, startup founders and others that will also advise Linear as it grows. They include Dylan Field (Founder and CEO, Figma), Emily Choi (COO, Coinbase), Charlie Cheever (Co-Founder of Expo & Quora), Gustaf Alströmer (Partner, Y Combinator), Tikhon Berstram (Co-Founder, Parse), Larry Gadea (CEO, Envoy), Jude Gomila (CEO, Golden), James Smith (CEO, Bugsnag), Fred Stevens-Smith (CEO, Rainforest), Bobby Goodlatte, Marc McGabe, Julia DeWahl and others.

Cofounders Karri Saarinen, Tuomas Artman, and Jori Lallo — all Finnish but now based in the Bay Area — know something first-hand about software development and the trials and tribulations of working with disparate and distributed teams. Saarinen was previously the principal designer of Airbnb, as well as the first designer of Coinbase; Artman had been staff engineer and architect at Uber; and Lallo also had been at Coinbase as a senior engineer building its API and front end.

“When we worked at many startups and growth companies we felt that the tools weren’t matching the way we’re thinking or operating,” Saarinen said in an email interview. “It also seemed that no-one had took a fresh look at this as a design problem. We believe there is a much better, modern workflow waiting to be discovered. We believe creators should focus on the work they create, not tracking or reporting what they are doing. Managers should spend their time prioritizing and giving direction, not bugging their teams for updates. Running the process shouldn’t sap your team’s energy and come in the way of creating.”

Linear cofounders (from left): KarriSaarinen, Jori Lallo, and Tuomas Artma

All of that translates to, first and foremost, speed and a platform whose main purpose is to help you work faster. “While some say speed is not really a feature, we believe it’s the core foundation for tools you use daily,” Saarinen noted.

A ⌘K command calls up a menu of shortcuts to edit an issue’s status, assign a task, and more so that everything can be handled with keyboard shortcuts. Pages load quickly and synchronise in real time (and search updates alongside that). Users can work offline if they need to. And of course there is also a dark mode for night owls.

The platform is still very much in its early stages. It currently has three integrations based on some of the most common tools used by developers — GitHub (where you can link Pull Requests and close Linear issues on merge), Figma designs (where you can get image previews and embeds of Figma designs), and Slack (you can create issues from Slack and then get notifications on updates). There are plans to add more over time.

We started solving the problem from the end-user perspective, the contributor, like an engineer or a designer and starting to address things that are important for them, can help them and their teams,” Saarinen said. “We aim to also bring clarity for the teams by making the concepts simple, clear but powerful. For example, instead of talking about epics, we have Projects that help track larger feature work or tracks of work.”

Indeed, speed is not the only aim with Linear. Saarinen also said another area they hope to address is general work practices, with a take that seems to echo a turn away from time spent on manual management and more focus on automating that process.

“Right now at many companies you have to manually move things around, schedule sprints, and all kinds of other minor things,” he said. “We think that next generation tools should have built in automated workflows that help teams and companies operate much more effectively. Teams shouldn’t spend a third or more of their time a week just for running the process.”

The last objective Linear is hoping to tackle is one that we’re often sorely lacking in the wider world, too: context.

“Companies are setting their high-level goals, roadmaps and teams work on projects,” he said. “Often leadership doesn’t have good visibility into what is actually happening and how projects are tracking. Teams and contributors don’t always have the context or understanding of why they are working on the things, since you cannot follow the chain from your task to the company goal. We think that there are ways to build Linear to be a real-time picture of what is happening in the company when it comes to building products, and give the necessary context to everyone.”

Linear is a late entrant in a world filled with collaboration apps, and specifically workflow and collaboration apps targeting the developer community. These include not just Slack and GitHub, but Atlassian’s Trello and Jira, as well as Asana, Basecamp and many more.

Saarinen would not be drawn out on which of these (or others) that it sees as direct competition, noting that none are addressing developer issues of speed, ease of use and context as well as Linear is.

“There are many tools in the market and many companies are talking about making ‘work better,’” he said. “And while there are many issue tracking and project management tools, they are not supporting the workflow of the individual and team. A lot of the value these tools sell is around tracking work that happens, not actually helping people to be more effective. Since our focus is on the individual contributor and intelligent integration with their workflow, we can support them better and as a side effect makes the information in the system more up to date.”

Stephanie Zhan, the partner at Sequoia whose speciality is seed and Series A investments and who has led this round, said that Linear first came on her radar when it first launched its private beta (it’s still in private beta and has been running a waitlist to bring on new users. In that time it’s picked up hundreds of companies, including Pitch, Render, Albert, Curology, Spoke, Compound and YC startups including Middesk, Catch and Visly). The company had also been flagged by one of Sequoia’s Scouts, who invested earlier this year

Sequoia Logo Natalie Miyake

Although Linear is based out of San Francisco, it’s interesting that the three founders’ roots are in Finland (with Saarinen in Helsinki this week to speak at the Slush event), and brings up an emerging trend of Silicon Valley VCs looking at founders from further afield than just their own back yard.

“The interesting thing about Linear is that as they’re building a software company around the future of work, they’re also building a remote and distributed team themselves,” Zahn said. The company currently has only four employees.

In that vein, we (and others, it seems) had heard that Sequoia — which today invests in several Europe-based startups, including Tessian, Graphcore, Klarna, Tourlane, Evervault  and CEGX — has been considering establishing a more permanent presence in this part of the world, specifically in London.

Sources familiar with the firm, however, tell us that while it has been sounding out VCs at other firms, saying a London office is on the horizon might be premature, as there are as yet no plans to set up shop here. However, with more companies and European founders entering its portfolio, and as more conversations with VCs turn into decisions to make the leap to help Sequoia source more startups, we could see this strategy turning around quickly.


By Ingrid Lunden

SocialRank sells biz to Trufan, pivots to a mobile LinkedIn

What do you do when your startup idea doesn’t prove big enough? Run it as a scrawny but profitable lifestyle business? Or sell it to a competitor and take another swing at the fences? Social audience analytics and ad targeting startup SocialRank chose the latter and is going for glory.

Today, SocialRank announced it’s sold its business, brand, assets, and customers to influencer marketing campaign composer and distributor Trufan which will run it as a standalone product. But SocialRank’s team isn’t joining up. Instead, the full six-person staff is sticking together to work on a mobile-first professional social network called Upstream aiming to nip at LinkedIn.

SocialRank co-founder and CEO Alex Taub

Started in 2014 amidst a flurry of marketing analytics tools, SocialRank had raised $2.1 million from Rainfall Ventures and others before hitting profitability in 2017. But as the business plateaued, the team saw potential to use data science about people’s identity to get them better jobs.

“A few months ago we decided to start building a new product (what has become Upstream). And when we came to the conclusion to go all-in on Upstream, we knew we couldn’t run two businesses at the same time” SocialRank co-founder and CEO Alex Taub tells me. “We decided then to run a bit of a process. We ended up with a few offers but ultimately felt like Trufan was the best one to continue the business into the future.”

The move lets SocialRank avoid stranding its existing customers like the NFL, Netflix, and Samsung that rely on its audience segmentation software. Instead, they’ll continue to be supported by Trufan where Taub and fellow co-founder Michael Schonfeld will become advisors.

“While we built a sustainable business, we essentially knew that if we wanted to go real big, we would need to go to the drawing board” Taub explains.

SocialRank

Two-year-old Trufan has raised $1.8 million Canadian from Round13 Capital, local Toronto startup Clearbanc’s founders, and several NBA players. Trufan helps brands like Western Union and Kay Jewellers design marketing initiatives that engage their customer communities through social media. It’s raising an extra $400,000 USD in venture debt from Round13 to finance the acquisition, which should make Trufan cash-flow positive by the end of the year.

Why isn’t the SocialRank team going along for the ride? Taub said LinkedIn was leaving too much opportunity on the table. While it’s good for putting resumes online and searching for people, “All the social stuff are sort of bolt-ons that came after Facebook and Twitter arrived. People forget but LinkedIn is the oldest active social network out there”, Taub tells me, meaning it’s a bit outdated.

Trufan’s team

Rather than attack head-on, the newly forged Upstream plans to pick the Microsoft-owned professional network apart with better approaches to certain features. “I love the idea of ‘the unbundling of LinkedIn’, ala what’s been happening with Craigslist for the past few years” says Taub. “The first foundational piece we are building is a social professional network around giving and getting help. We’ll also be focused on the unbundling of the groups aspect of LinkedIn.”

Taub concludes that entrepreneurs can shackle themselves to impossible goals if they take too much venture capital for the wrong business. As we’ve seen with SoftBank, investors demand huge returns that can require pursuing risky and unsustainable expansion strategies.

“We realized that SocialRank had potential to be a few hundred million dollar in revenue business but venture growth wasn’t exactly the model for it” Taub says. “You need the potential of billions in revenue and a steep growth curve.” A professional network for the smartphone age has that kind of addressable market. And the team might feel better getting out of bed each day knowing they’re unlocking career paths for people instead of just getting them to click ads.


By Josh Constine

Loop Returns picks up $10 million in Series A led by FirstMark Capital

Loop Returns, the startup that helps brands handle returns from online purchases, has today announced the close of a $10 million Series A funding round led by FirstMark Capital. Lerer Hippeau and Ridge Ventures also participated in the round.

Loop started when Jonathan Poma, a cofounder and COO and President, was working at an agency and consulting with a big Shopify brand on how to improve their system for returns and exchanges. After partnering with long-time friend Corbett Morgan Loop Returns was born.

Loop sits on top of Shopify to handle all of a brand’s returns. It first asks the customer if they’d like a different size in the item they bought, quickly managing an exchange. It then asks if the customer would prefer to exchange for a new item altogether, depositing the credit in that person’s account in real time so they can shop for something new immediately.

If an exchange isn’t in the cards, Loop will ask the customer if they’d prefer credit with this brand over a straight-up refund.

The goal, according to Poma and Morgan, is to turn the point of return into a moment where brands can create a life-loyal customer when handled quickly and properly.

The more we shop online, the more brands extend themselves financially, and returns are a big part of that. Returns account for 20 to 30 percent of ecommerce sales, which can become a terrible financial burden on a growing direct-to-consumer brand. And what’s more, the cost of acquiring those users in the first place also goes down the drain.

Loop Returns hopes to keep that customer in the fold by giving them post-purchase options that are more sticky and more lucrative for the brand than a refund.

The company thinks of it as Connection Infrastructure. Most brands already have a customer acquisition architecture, and Shopify and Amazon are ahead when it comes to the infrastructure around customer convenience. But the ties that bind customers to brands haven’t been optimized for the many D2C brands out there looking to make an impact.

“The big problem we’re trying to solve long term is connection infrastructure,” said Morgan. “Why does this brand matter? Why does it mean something to me? Why does the product matter? We want to enforce more mindfulness and meaning into buying.”

Of course, a more mindful shopper doesn’t yield as many returns. Poma and Morgan admit that the goal of their software is to minimize returns, the very reason for the software’s existence. After all, return volume is one of a handful of variables that help Loop Returns determine what it will charge its brand clients.

But the team is thinking about other layers of the connection infrastructure, with plans to launch a product in 2020 that also focuses on the connection point after purchase. Poma and Morgan believe, with an almost religious reverence, that the brands themselves will help lead shoppers and infrastructure providers to a better, more connected shopping experience.

“Brands are the torch bearers,” said Poma. “They will lead us to a more enlightened era of how we think about buying. Empowerment of the brand will lead us to a better consumerism.”

The cofounders stayed mum on any specific plans for the 2020 product, but did say they will use the funding to expand operations and further build out its current and future products.

Of course, Loop is playing in a crowded space. Not only are there other players thinking about post-purchase connection, but Shopify has itself built out tools to help with exchanges and returns, and even acquired Return Magic, a similar service, in the summer of 2018.

That said, Loop Returns believes that there is a long way to go as it builds the ‘connection infrastructure’ and that one clear path forward is actual personalization. With data from returns and exchanges, Loop Returns is relatively well positioned to take on personalization in a meaningful way.

For now, Loop Returns has more than 200 customers and has handled more than 2 million returns, working with brands like Brooklinen, AllBirds, PuraVida and more.


By Jordan Crook

Lawyers hate timekeeping. Ping raises $13M to fix it with AI

Counting billable time in six minute increments is the most annoying part of being a lawyer. It’s a distracting waste. It leads law firms to conservatively under-bill. And it leaves lawyers stuck manually filling out timesheets after a long day when they want to go home to their families.

Life is already short, as Ping CEO and co-founder Ryan Alshak knows too well. The former lawyer spent years caring for his mother as she battled a brain tumor before her passing. “One minute laughing with her was worth a million doing anything else” he tells me. “I became obsessed with the idea that we spend too much of our lives on things we have no need to do — especially at work.”

That’s motivated him as he’s built his startup Ping, which uses artificial intelligence to automatically track lawyers’ work and fill out timesheets for them. There’s a massive opportunity to eliminate a core cause of burnout, lift law firm revenue by around 10%, and give them fresh insights into labor allocation.

Ping co-founder and CEO Ryan Alshak. Image Credit: Margot Duane

That’s why today Ping is announcing a $13.2 million Series A led by Upfront Ventures, along with BoxGroup, First Round, Initialized, and Ulu Ventures. Adding to Ping’s quiet $3.7 million seed led by First Round last year, the startup will spend the cash to scale up enterprise distribution and become the new timekeeping standard.

I was a corporate litigator at Manatt Phelps down in LA and joke that I was voted the world’s worst timekeeper” Alshak tells me. “I could either get better at doing something I dreaded or I could try and build technology that did it for me.”

The promise of eliminating the hassle could make any lawyer who hears about Ping an advocate for the firm buying the startup’s software, like how Dropbox grew as workers demanded easier file sharing. “I’ve experienced first-hand the grind of filling out timesheets” writes Initialized partner and former attorney Alda Leu Dennis. “Ping takes away the drudgery of manual timekeeping and gives lawyers back all those precious hours.”

Traditionally, lawyers have to keep track of their time by themselves down to the tenth of an hour — reviewing documents for the Johnson case, preparing a motion to dismiss for the Lee case, a client phone call for Sriram case. There are timesheets built into legal software suites like MyCase, legal billing software like Timesolv, and one-off tools like Time Miner and iTimeKeep. They typically offer timers that lawyers can manually start and stop on different devices, with some providing tracking of scheduled appointments, call and text logging, and integration with billing systems.

Ping goes a big step further. It uses AI and machine learning to figure out whether an activity is billable, for which client, a description of the activity, and its codification beyond just how long it lasted. Instead of merely filling in the minutes, it completes all the logs automatically with entries like “Writing up a deposition – Jenkins Case – 18 minutes”. Then it presents the timesheet to the user for review before the send it to billing.

The big challenge now for Alshak and the team he’s assembled is to grow up. They need to go from cat-in-sunglasses logo Ping to mature wordmark Ping.  “We have to graduate from being a startup to being an enterprise software company” the CEO tells meThat means learning to sell to C-suites and IT teams, rather than just build solid product. In the relationship-driven world of law, that’s a very different skill set. Ping will have to convince clients it’s worth switching to not just for the time savings and revenue boost, but for deep data on how they could run a more efficient firm.

Along the way, Ping has to avoid any embarrassing data breaches or concerns about how its scanning technology could violate attorney-client privilege. If it can win this lucrative first business in legal, it could barge into the consulting and accounting verticals next to grow truly huge.

With eager customers, a massive market, a weak status quo, and a driven founder, Ping just needs to avoid getting in over its heads with all its new cash. Spent well, the startup could leap ahead of the less tech-savvy competition.

Alshak seems determined to get it right. “We have an opportunity to build a company that gives people back their most valuable resource — time — to spend more time with their loved ones because they spent less time working” he tells me. “My mom will live forever because she taught me the value of time. I am deeply motivated to build something that lasts . . . and do so in her name.”


By Josh Constine

Alpaca nabs $6M for stocks API so anyone can build a Robinhood

Stock trading app Robinhood is valued at $7.6 billion, but it only operates in the US. Freshly-funded fintech startup Alpaca does the dirty work so developers worldwide can launch their own competitors to that investing unicorn. Like the Stripe of stocks, Alpaca’s API handles the banking, security, and regulatory complexity, allowing other startups to quickly build brokerage apps on top for free. It’s already crossed $1 billion in transaction within a year of launch.

The potential to power the backend of a new generation of fintech apps has attracted a $6 million Series A round for Alpaca led by Spark Capital . Instead of charging developers, Alpaca earns its money through payment for order flow, interest on cash deposits, and margin lending much like Robinhood.

“I want to make sure that people even outside the US have access” to a way of building wealth that’s historically only “available to rich people” Alpaca co-founder and CEO Yoshi Yokokawa tells me.

Alpaca co-founder and CEO Yoshi Yokokawa

Hailing from Japan, Yokokawa followed his friends into the investment banking industry where he worked at Lehman Brothers until its collapse. After his grandmother got sick, he moved into day-trading for three years and realized “all the broker dealer business tools were pretty bad”. But when he heard of Robinhood in 2013 and saw it actually catering to users’ needs, he thought “I need to be involved in this new transformation” of fintech.

Yokokawa ended up first building a business selling deep learning AI to banks and trading firms in the foreign exchange market. Watching clients struggle to quickly integrate new technology revealed the lack of available developer tools. By 2017, he was pivoting the business and applying for FINRA approval. Alpaca launched in late 2018, letting developers paste in code to let their users buy and sell securities.

Now international developers and small hedge funds are building atop the Alpaca API so they don’t have to reinvent the underlying infrastructure themselves right away. Alpaca works with clearing broker NTC, and then marks up margin trading while earning interest and payment for order flow. It also offers products like AlpacaForecast with short-term predictions of stock prices, AlpacaRadar for detecting price swings, and its MarketStore financial database server.

AlpacaForecast

The $6 million from Spark Capital, Social Leverage, Portag3, Fathom Capital, and Zillionize adds to $5.8 million in previous funding from investors including Y Combinator. The startup plans to spend the cash on hiring up to handle partnerships with bigger businesses, supporting its developer community, and ensuring compliance.

One major question is whether fintech businesses that start to grow atop Alpaca and drive its revenues will try to declare independence and later invest in their own technology stack. There’s the additional risk of a security breach that might scare away clients.

Alpaca’s top competitor Interactive Brokers offers trading APIs but other services as well that distract it from fostering a robust developer community, Yokokawa tells me. Alpaca focuses on providing great documentation, open source contribution, and SDKs in different languages that make it more developer-friendly. It will also have to watch out for other fintech services startups like DriveWealth and well-funded Galileo.

There’s a big opportunity to capitalize on the race to integrate stock trading into other finance apps to drive stickiness since it’s a consistent voluntary behavior rather than a chore or something only done a few times a year. Lender Sofi and point-of-sale system Square both recently became broker dealers as well, and Yokokawa predicts more and more apps will push into the space.

Why would we need so many stock trading apps? “Every single person is involved with money so the market is huge. Instead of one-player takes all, there will be different players that can all do well” Yokokawa tells me. “Like banks and investment banks co-exist, it will never be that Bank Of America takes 80% of the pie. I think differentiation will be on customer acquisition, and operations management efficiency.”

The co-founder’s biggest concern is keeping up with all the new opportunities in financial services, from cash management and cryptocurrency that Robinhood already deals in, to security token offerings, and fractional investing. Yokokawa says “I need to make sure I’m on top of everything and that we’re executing with the right timing so we don’t lose.”

The CEO hopes that Alpaca will one day power broader access to the US stock market back in Japan, noting that if a modern nation still lags behind in fintech, the rest of world surely fares even worse. “I want to connect this asset class to as many people as possible on the earth.”


By Josh Constine

Coveo raises $227M at $1B+ valuation for AI-based enterprise search and personalization

Search and personalization services continue to be a major area of investment among enterprises, both to make their products and services more discoverable (and used) by customers, and to help their own workers get their jobs done, with the market estimated to be worth some $100 billion annually. Today, one of the big startups building services in this area raised a large round of growth funding to continue tapping that opportunity. Coveo, a Canadian company that builds search and personalisation services powered by artificial intelligence — used by its enterprise customers by way of clould-based, software-as-a-service — has closed a $227 million round, which CEO Louis Tetu tells me values the company at “well above” $1 billion, “Canadian or US dollars.”

The round is being led by Omers Capital Private Growth Equity Group, the investing arm of the Canadian pensions giant that makes large, later-stage bets (the company has been stepping up the pace of investments lately), with participation also from Evergreen Coast Capital, FSTQ, and IQ Ventures. Evergreen led the company’s last round of $100 million in April 2018, and in total the company has now raised just over $402 million with this round.

The $1 billion+ valuation appears to be a huge leap in the context of Coveo’s funding history: in that last round, it had a post-money valuation of about $370 million, according to PitchBook data.

Part of the reason for that is because of Coveo’s business trajectory, and part is due to the heat of the overall market.

Coveo’s round is coming about two weeks after another company that builds enterprise search solutions, Algolia, raised $110 million. The two aim at slightly different ends of the market, Tetu tells me, not directly competing in terms of target customers, and even services. “Algolia is in a different zip code,” he said. Good thing, too, if that’s the case: Salesforce — which is one of Coveo’s biggest partners and customers — was also a strategic investor in the Algolia round. Even if these two do not compete, there are plenty of others vying for the same end of the enterprise search and personalization continuum — they include Google, Microsoft, Elastic, IBM, Lucidworks, and many more. That, again, underscores the size of the market opportunity.

In terms of Coveo’s own business, the company works with some 500 customers today and says SaaS subscription revenues grew more than 55 percent year-over-year this year. Five hundred may sound like a small number, but it covers a lot of very large enterprises spanning web-facing businesses, commerce-based organizations, service-facing companies, and enterprise solutions.

In addition to Salesforce, it includes Visa, Tableau (also Salesforce now!), Honeywell, a Fortune 50 healthcare company (whose name is not getting disclosed), and what Tetu described to me as an Amazon competitor that does $21 billion in sales annually but doesn’t want to be named.

Coveo’s basic selling point is that the better discoverability and personalization that it provides helps its customers avoid as many call-center interactions (reducing operating expenditures), improving sales (boosting conversions and reducing cart abandonment), and help companies themselves just work faster.

“We believe that Coveo is the market leader in leveraging data and AI to personalize at scale,” said Mark Shulgan, Managing Director and Head of Growth Equity at Omers, in a statement. “Coveo fits our investment thesis precisely: an A-plus leadership team with deep expertise in enterprise SaaS, a Fortune 1000 customer base who deeply love the product, and a track record of high growth in a market worth over $100 billion. This makes Coveo a highly-coveted asset. We are glad to be partnering to scale this business.”

Alongside business development on its own steam, the company is going to be using this funding for acquisitions. Tetu notes that Coveo still has a lot of money in the bank from previous rounds.

“We are a real company with real positive economics,” he said. “This round is mostly to have dry powder to invest in a way that is commensurate in the AI space, and within commerce in particular.” To get the ball rolling on that, this past July, Coveo acquired Tooso, a specialist in AI-based digital commerce technology.


By Ingrid Lunden

Chronosphere launches with $11M Series A to build scalable, cloud-native monitoring tool

Chronoshere, a startup from two ex-Uber engineers, who helped create the open source M3 monitoring project to handle Uber-level scale, officially launched today with the goal of building a commercial company on top of the open source project.

It also announced an $11 million investment led by Greylock with participation from venture capitalist, Lee Fixel.

While the founders, CEO Martin Mao and CTO Rob Skillington, were working at Uber they recognized a gap in the monitoring industry, particularly around cloud native technologies like containers and micro services. There weren’t any tools available on the market that could handle Uber’s scaling requirements. So like any good engineers, they went out and built their own.

“We looked around at the market at the time and couldn’t find anything in open source or commercially available that could really scale to our needs. So we ended up building and open sourcing our solution, which is M3. Over the last three to four years we’ve scaled M3 to one of the largest production monitoring systems in the world today,” Mao explained.

The essential difference between M3 and other open source, cloud native monitoring solutions like Prometheus is that ability to scale, he says.

One of the main reasons they left to start a company, with the blessing of Uber, was that the community began asking for features that didn’t really make sense for Uber. By launching Chronosphere, Mao and Skillington would be taking on the management of the project moving forward (although sharing governance for the time being with Uber), while building those enterprise features the community has been clamoring for.

The new company’s first product will be a cloud version of M3 to help reduce some of the complexity associated with managing an M3 project. “M3 itself is a fairly complex piece of technology to run. It is solving a fairly complex problem at large scale, and running it actually requires a decent amount of investment to run at large scale, so the first thing we’re doing is taking care of that management,” Mao said.

Jerry Chen, who led the investment at Greylock, saw a company solving a big problem. “They were providing such a high resolution view of what’s going on in your cloud infrastructure and doing that at scale at a cost that actually makes sense. They solved that problem at Uber, and I saw them, and I was like wow, the rest of the market needs what guys built and I wrote the Series A check. It was as simple as that,” Chen told TechCrunch.

The cloud product is currently in private Beta, and they expect to open to public Beta early next year.


By Ron Miller

CTO.ai’s developer shortcuts eliminate coding busywork

There’s too much hype about mythical “10X developers”. Everyone’s desperate to hire these ‘ninja rockstars’. In reality, it’s smarter to find ways of deleting annoying chores for the coders you already have. That’s where CTO.ai comes in.

Emerging from stealth today, CTO.ai lets developers build and borrow DevOps shortcuts. These automate long series of steps they usually have to do manually thanks to integrations with GitHub, AWS, Slack, and more. CTO.ai claims it can turn a days-long process like setting up a Kubernetes cluster into a 15-minute task even sales people can handle. The startup offers both a platform for engineering and sharing shortcuts, and a service where it can custom build shortcuts for big customers.

What’s remarkable about CTO.ai is that amidst a frothy funding environment, the 60-person team quietly bootstrapped its way to profitability over the past two years. Why take funding when revenue was up 400% in 18 months? But after a chance meeting aboard a plane connected its high school dropout founder Kyle Campbell with Slack CEO Stewart Butterfield, CTO.ai just raised a $7.5 million seed round led by Slack Fund and Tiger Global.

“Building tools that streamline software development is really expensive for companies, especially when they need their developers focused on building features and shipping to customers” Campbell tells me. The same way startups don’t build their own cloud infrastructure and just use AWS, or don’t build their own telecom APIs and just use Twilio, he wants CTO.ai to be the ‘easy button’ for developer tools.

Teaching Snakes To Eat Elephants

“I’ve been a software engineer since the age of 8” Campbell recalls. In skate-punk attire with a snapback hat, the young man meeting me in a San Francisco mission district cafe almost looked too chill to be a prolific coder. But that’s kind of the point. His startup makes being a developer more accessible.

After spending his 20s in software engineering groups in the Bay, Campbell started his own company Retsly that bridged developers to real estate listings. In 2014, it was acquired by property tech giant Zillow where he worked for a few years.

That’s when he discovered the difficulty of building dev tools inside companies with other priorities. “It’s the equivalent of a snake swallowing an elephant” he jokes. Yet given these tools determine how much time expensive engineers waste on tasks below their skill level, their absence can drag down big enterprises or keep startups from rising.

CTO.ai shrinks the elephant. For example, the busywork of creating a Kubernetes cluster such as having to the create EC2 instances, provision on those instances, and then provision a master node gets slimmed down to just running a shortcut. Campbell writes that “tedious tasks like running reports can be reduced from 1,000 steps down to 10″ through standardization of workflows that turn confusing code essays into simple fill-in-the-blank and multiple-choice questions.

 

The CTO.ai platform offers a wide range of pre-made shortcuts that clients can piggyback on, or they can make and publish their own through a flexible JavaScript environment for the rest of their team or the whole community to use. Companies that need extra help can pay for its DevOps-As-A-Service and reliability offerings to get shortcuts made to solve their biggest problems while keeping everything running smoothly.

5(2X) = 10X

Campbell envisions a new way to create a 10X engineer that doesn’t depend on widely-mocked advice on how to spot and capture them like trophy animals. Instead, he believes 1 developer can make 5 others 2X more efficient by building them shortcuts. And it doesn’t require indulging bad workplace or collaboration habits.

With the new funding that also comes from Yaletown Partners, Pallasite Ventures, Panache Ventures and Jonathan Bixby, CTO.ai wants to build deeper integrations with Slack so developers can run more commands right from the messaging app. The less coding required for use, the broader the set of employees that can use the startup’s tools. CTO.ai may also build a self-service tier to augment its seats plus complexity model for enterprise pricing.

Now it’s time to ramp up community outreach to drive adoption. CTO.ai recently released a podcast which saw 15,000 downloads in its first 3 weeks, and it’s planning some conference appearances. It also sees virality through its shortcut author pages, which like GitHub profiles let developers show off their contributions and find their next gig.

One risk is that GitHub or another core developer infrastructure provider could try to barge directly into CTO.ai’s business. Google already has Cloud Composer while GitHub launched Actions last year. Campbell says its defense comes through neutrally integrating with everyone, thereby turning potential competitors into partners.

The funding firepower could help CTO.ai build a lead. With every company embracing software, employers battling to keep developers happy, and teams looking to get more of their staff working with code, the startup sits at the intersection of some lucrative trends of technological empowerment.

“I have 3-year-old at home and I think about what it will be like when he comes into creating things online” Campbell concludes. “We want to create an amazing future for software developers, introducing automation so they can focus on what makes them such an important aspect. Devs are defining society!”

[Image Credit: Disney/Pixar via WallHere Goodfon]


By Josh Constine

Volterra announces $50M investment to manage apps in hybrid environment

Volterra is an early stage startup that has been quietly working on a comprehensive solution to help companies manage applications in hybrid environments. The company emerged from stealth today with a $50 million investment and a set of products.

Investors include Khosla Ventures and Mayfield along with strategic investors M12 (Microsoft’s venture arm), Itochu Technology Ventures and Samsung NEXT. The company, which was founded in 2017, already has 100 employees and more than 30 customers.

What has attracted these investors and customers is a full stack solution that includes both hardware and software to manage applications in the cloud or on prem. Volterra founder and CEO Ankur Singla says when he was at his previous company, Contrail Systems, which was acquired by Juniper Networks in 2012 for $176 million, he saw first-hand how large companies were struggling with the transition to hybrid.

“The big problem we saw was in building and operating application that scale is a really hard problem. They were adopting multiple hybrid cloud strategies, and none of them solved the problem of unifying the application and the infrastructure layer, so that the application developers and DevOps teams don’t have to worry about that,” Singla explained.

He says the Volterra solution includes three main products, VoltStack​, VoltMesh and VoltConsole to help solve this scaling and management problem. As Volterra describes the total solution, “Volterra has innovated a consistent, cloud-native environment that can be deployed across multiple public clouds and edge sites — a distributed cloud platform. Within this SaaS-based offering, Volterra integrates a broad range of services that have normally been siloed across many point products and network or cloud providers.” This includes not only the single management plane, but security, management and operations components.

Diagram: Volterra

The money has come over a couple of rounds, helping to build the solution to this point, and it required a complex combination of hardware and software to do it. They are hoping to help organizations that have been looking for a cloud native approach to large-scale applications such as industrial automation will adopt this approach.


By Ron Miller

Robocorp announces $5.6M seed to bring open source option to RPA

Robotic Process Automation (RPA) has been a hot commodity in recent years as it helps automate tedious manual workflows inside large organizations. Robocorp, a San Francisco startup, wants to bring open source and RPA together. Today it announced a $5.6 million seed investment.

Benchmark led the round with participation from Slow Ventures, firstminute Capital, Bret Taylor, president and chief product officer at Salesforce and Docker CEO Rob Bearden. In addition, Benchmark’s Peter Fenton will be joining the company’s board.

Robocorp co-founder and CEO Antti Karjalainen has been around open source projects for years, and he saw an enterprise software category that was lacking in open source options. “We actually have a unique angle on RPA, where we are introducing open source and cloud native technology into the market and focusing on developer-led technologies,” Karjalainen said.

He sees a market that’s top-down and focused on heavy sales cycles. He wants to bring the focus back to the developers who will be using the tools. “We are all about removing friction from developers. So, we are focused on giving developers tools that they like to use, and want to use for RPA, and doing it in an open source model where the tools themselves are free to use,” he said.

The company is built on the open source Robot Framework project, which was originally developed as an open source software testing environment, but he sees RPA having a lot in common with testing, and his team has been able to take the project and apply it to RPA.

If you’re wondering how the company will make money they are offering a cloud service to reduce the complexity even further of using the open source tools, and that includes the kinds of features enterprises tend to demand from these projects like security, identity and access management, and so forth.

Benchmark’s Peter Fenton, who has worked for several successful open source startups including JBoss, SpringSource and Elastic, sees RPA as an area that’s ripe for developer-focused open source option. “We’re living in the era of the developer, where cloud-native and open source provide the freedom to innovate without constraint. Robocorp’s RPA approach provides developers the cloud native, open source tools to bring RPA into their organizations without the burdensome constraints of existing offerings,” Fenton said.

The company intends to use the money to add new employees and continue scaling the cloud product, while working to build the underlying open source community.

While UIPath, a fast growing startup with a hefty $7.1 billion valuation recently announced it was laying off 400 people, Gartner published a study in June showing that RPA is the fastest growing enterprise software category.


By Ron Miller

Datameer announces $40M investment as it pivots away from Hadoop roots

Datameer, the company that was born as a data prep startup on top of the open source Hadoop project, announced a $40 million investment and a big pivot away from Hadoop, while staying true to its big data roots.

The investment was led by existing investor ST Telemedia . Other existing investors including Redpoint Ventures, Kleiner Perkins, Nextworld Capital, Citi Ventures and Top Tier Capital Partners also participated. Today’s investment brings the total raised to almost $140 million, according to Crunchbase data.

Company CEO Christian Rodatus says the company’s original mission was about making Hadoop easier to use for data scientists, business analysts and engineers. In the last year, the three biggest commercial Hadoop vendors — Cloudera, Hortonworks and MapR — fell on hard times. Cloudera and Hortonworks merged and MapR was sold to HPE in a fire sale.

Starting almost two years ago, Datameer recognized that against this backdrop, it was time for a change. It began developing a couple of new products. It didn’t want to abandon its existing customer base entirely of course, so it began rebuilding its Hadoop product and is now calling it Datameer X. It is a modern cloud-native product built to run on Kubernetes, the popular open source container orchestration tool. Instead of Hadoop, it will be based on Spark. He reports they are about two-thirds done with this pivot, but the product has been in the hands of customers.

The company also announced Neebo, an entirely new SaaS tool to give data scientists the ability to process data in whatever form it takes. Rodatus sees a world coming where data will take many forms from traditional data to Python code from data analysts or data scientists to SaaS vendor dashboards. He sees Neebo bringing all of this together in a managed service with the hope that it will free data scientists to concentrate on getting insight from the data. It will work with data visualization tools like Tableau and Looker, and should be generally available in the coming weeks.

The money should help them get through this pivot, hire more engineers to continue the process and build a go-to-market team for the new products. It’s never easy pivoting like this, but the investors are hoping that the company can build on its existing customer base, while taking advantage of the market need for data science processing tools. Time will tell if it works.


By Ron Miller

WeFarm rakes in $13M to grow its marketplace and network for independent farmers

Huge networks like Facebook and LinkedIn have a huge gravitational force in the world of social media — the size of their audiences make them important platforms for advertising and those who want information (for better or worse) to reach as many people as possible. But alongside their growth, we’re seeing a lasting role for platforms and networks focused on more narrow special interests, and today one of them — focused on farmers, of all communities — is picking up a round of funding to propel its growth.

WeFarm, a marketplace and networking site for small-holder farmers (that is, farms not controlled by large agribusinesses), has raised $13 million in a Series A round of funding, with plans to use the money to continue adding more users — farmers — and more services geared to their needs.

The round, which brings the total raised by the company to a modest $20 million, is being led by True Ventures, with AgFunder, June Fund; previous investors LocalGlobe, ADV and Norrsken Foundation; and others also participating.

WeFarm today has around 1.9 million registered users, and its early moves into providing a marketplace — helping to put farmers in touch with local suppliers of goods and gear such as seed and fertilizers — generated $1 million in sales in its first eight months of operations, a sign that there is business to be had here. The startup points out that this growth has been, in fact, “faster… than both Amazon and eBay in their early stages.”

WeFarm is based out of London, but while the startup does have users out of the UK and the rest of Europe, Kenny Ewan, the company’s founder and CEO, said in an interview that it is seeing much more robust activity and growth out of developing economies, where small-scale agriculture reigns supreme, but those working the farms have been massively underserved when it comes to new, digital services.

“We are building an ecosystem for global small scale agriculture, on behalf of farmers,” Ewan said, noting that there are roughly 500 million small scale farms globally, with some 1 billion people working those holdings, which typically extend 1.5-2 hectares and often are focused around staple commercial crops like rice, coffee, cattle or vegetables. “This is probably the biggest industry on Earth, accounting for some 75-80% of the global supply chain, and yet no one has built anything for them. This is significant on many levels.”

The service that WeFarm provides, in turn, is two-fold. The network, which is free to join, first of all serves as sounding board, where farmers — who might live in a community with other farmers, but might also be quite solitary — can ask each other questions or get advice on agricultural or smallholding matters. Think less Facebook and more Stack Exchange here.

That provided a natural progression to WeFarm’s second utility track: a marketplace. Initially Ewan said that it’s been working with — and importantly, vetting — local suppliers to help them connect with farmers and the wider ecosystem for goods and services that they might need

Longer term, the aim will be to provide a place where smallholding famers might be able to exchange goods with each other, or sell on what they are producing.

In addition to providing access to goods for sale, WeFarm is helping to manage the e-commerce process behind it. For example, in regions like Africa, mobile wallets have become de facto bank accounts and proxies for payment cards, so one of the key ways that people can pay for items is via SMS.

“For 90% of our users, we are the only digital service they use, so we have to make sure we can fulfil their trust,” Ewan said. “This is a network of trust for the biggest industry on earth and we have to make sure it works well.”

For True and other investors, this is a long-term play, where financial returns might not be as obvious as moral ones.

“We are enormously inspired by how Kenny and the Wefarm team have empowered the world’s farmers, and we see great potential for their future,” said Jon Callaghan, co-founder of True Ventures, in a statement. “The company is not only impact-driven, but the impressive growth of the Wefarm Marketplace demonstrates exciting commercial opportunities that will connect those farmers to more of what they need to the benefit of all, across the food supply chain. This is a big, global business.”

Still, given the bigger size of the long tail, the company that can consolidate and manage that community potentially has a very valuable business on its hands, too.


By Ingrid Lunden