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Stacey Abrams co-founded fintech company Now raises $9.5M

After co-founding Insomnia Consulting, Stacey Abrams and Lara O’Connor Hodgson started Nourish to address a personal problem.

“We were at a meeting, I think for one of my campaigns,” explains Abrams, the Georgia-based lawyer and politician whose voting rights work became a focal point for the country in 2020. “[O’Connor Hodgson] needed to put together a baby bottle and had to trust the waiter to take the bottle back and wash it. She said, ‘I just wish there was a Dasani for babies.’ ”

Ultimately, however, Nourish ran into an issue. The company was a victim of its own successes, to hear Abrams describe it — or, more accurately, a victim of a system that didn’t provide it the right tools to grow. A problem with invoicing ultimately stopped the childcare in its tracks. But it was precisely those failings that planted the seed for their next company, the simply named Now.

“We started looking for a loan. All we needed was the money to meet the order. This was during the credit crunch, and we could not get it,” Abrams tells TechCrunch. “We went from bank to credit union to factoring, and every time we got near the end, the credit model changed and we got kicked out of the program. Finally, unfortunately, we had to let our business die. We grew to death. We got too big to meet the needs and didn’t have a solution.”

Abrams and O’Connor Hodgson founded Now in 2010 to provide small businesses a quicker method for getting invoices paid. When a business submits an invoice through NowAccount, the service pays 100% of the invoice, minus a 3% merchant fee.

“We sell bonds in the capital market, just like American Express does,” O’Connor Hodgson explains. “We have very low-cost capital that we’re able to give that small business their revenue immediately. And then we’ve built a system that allows us to manage the cost and risk of that, because we’re going to then wait 30+ days to get paid.”

Today the Georgia-based company announced that it has raised $9.5 million in Series A funding. The round, led by Virgo Investment Group and featuring Cresset Capital Partners, will be used to help scale Now’s offerings. It comes as the pandemic has put even more of a strain on invoices for many companies. O’Connor Hodgson says the average wait time for invoice payment expanded from around 50 days to between 70-80.

“We have served over 1,000 small businesses and we have processed over $700 million in transactions,” says O’Connor Hodgson. “So that’s $700 million of their capital that they have received sooner.”

Thus far, Now’s growth has largely been a product of word of mouth. The new influx of funding will go, in part, to market and advertising to get the product in front of more small businesses.

“When you’re a small business and someone tells you we have a solution to a problem that no one has been willing to solve, we sound like magic,” says Abrams. “And what we want people to understand and a big part of our scaling challenge has been, you have to experience it to believe it. And getting companies to understand that this actually does work the way we say that it does actually benefit you in the way we imagine, and that it works.”

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Join Accel’s Arun Mathew at TechCrunch Disrupt in our debate around alt-financing

TechCrunch Disrupt has a long history of bringing leading venture capitalists to the stage to yammer about their industry. Our impending TC Disrupt conference happening on September 21-23 is no different. This time around one of our investor guests is Arun Mathew of Accel, a venture capitalist that you might recall from his recent participation in Webflow’s huge $140 million Series B.

But we aren’t merely asking Mathew out to the event to chat low-code, or SaaS, or simply current intra-venture capital investing dynamics. Instead, he’ll be taking part in our panel on alternative financing (alt-finance) with a few folks that aren’t venture capitalists, but still deploy capital into startups.

Having an Accel partner take part in the panel makes good sense, as the venture firm has an interesting way of approaching bootstrapped companies. Namely that it is willing to show up to pretty large companies and write huge checks. That’s how Accel got into Qualtrics, for example, a deal that worked out pretty well.

But Accel invests from seed through super-late stage, making Mathew the perfect person to bring the venture perspective to the conversation.

The chat should hit on revenue-based financing, other more exotic forms of alt-finance and where the venture world may see capital partnerships, and funding rivalries. Our goal won’t be to incite an argument, but instead to unfold the private capital markets in a manner that helps fans of traditional VC — if there is still such a thing in today’s Tiger Global-led world — and believers in newer methods of capital deployment learn from each other. And so that founders can carve the most reasonable path for themselves as they seek to grow their businesses.

All told it should be a bop and I will see you there!

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Segment launches customer journey tool to build fine-grained personal experiences

Twilio Segment announced a tool, which is available starting today, to help marketers create fine-grained customer journeys. Until now the company has enabled marketers to build buyer personas and broader audiences, but this enables users to have much greater control of their interactions with a customer.

Company co-founder and CEO Peter Reinhardt says that marketers have been craving the ability to build more customized customer journeys and this tool gives them that. “It’s basically taking the power that existed in personas and audiences and actually putting it fully in marketers’ hands to build their dream journeys across every channel with the best data,” he said.

This enables marketers to stitch together a whole sequence of audiences. “Say when someone comes to the top of the funnel, they want to do X, then if they want to branch it and use X or Y, then do two different things, and you can keep branching and personalizing via this whole journey to cover the whole lifecycle.”

He says this capability has existed in some tools, but the Twilio Segment offering enables it to be used in more than 300 tools in the Segment ecosystem. “This is the first time that we’re going to be able to really do that and orchestrate this way, not just for a limited subset of channels, but across all of the channels,” he said.

Marketers can build branching by dragging and dropping journey components to send people on different paths depending on things like if they are a regular customer or a first-time customer or just about anything you can think of. Reinhardt says that flexibility is a key attribute of the new feature.

While it’s competing with some major players like Adobe and Salesforce in this space, Reinhardt believes this capability really gives Twilio a leg up over the competitors. “I think if you look at more of the legacy journey builders, [their products] are not built on real-time data, meaning that they’re actually missing basically all of the interesting behavioral data that marketers actually build on,” he said.

Segment was acquired by Twilio last year for $3.2 billion, and part of the reason for that was to increase its customer engagement capabilities. Segment gives Twilio a customer data platform to build on top of its other communications tooling, and today’s announcement expands on that capability.

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Swedish company Northvolt raises $2.75B to accelerate European battery production

Swedish battery developer and manufacturer Northvolt AB has raised $2.75 billion in capital as it prepares to ramp up to an annual production capacity of 150 GWh in Europe by 2030.

The funding round — Northvolt’s largest thus far — was co-led by existing investors Goldman Sachs and Volkswagen, and new investors including the Swedish pension funds AP1-4 and OMERS, one of Canada’s largest pension plans. AMF, ATP, Baillie Gifford, Baron Capital Group, Bridford Investments Limited, Compagnia di San Paolo through Fondaco Growth, Cristina Stenbeck, Daniel Ek, IMAS Foundation, EIT InnoEnergy, Norrsken VC, PCS Holding, Scania and Stena Metall Finans also participated in the raise.

Volkswagen’s investment came to €500 million ($620 million), the OEM said Wednesday, maintaining its 20% stake in the battery manufacturer.

CNBC reported that Northvolt’s valuation now stands at $11.75 billion. The company declined to comment on the specific valuation figure to TechCrunch.

Northvolt has already scored major deals with automakers like Volkswagen and BMW. In July 2020, the company inked a $2.3 billion contract with BMW for batteries; more recently, in March, Volkswagen put in a $14 billion order over a 10-year period. The two deals bring Northvolt’s total contracts to $27 billion. Other notable customers include Swedish heavy-duty truck manufacturer Scania and energy storage company Fluence.

This brings Northvolt’s total raised to more than $6.5 billion since the company was founded in 2016. The manufacturer’s first gigafactory in Skellefteå, Sweden, will be expanded from 40 GWh to 60 GWh, in part due to increased demand from the Volkswagen order, the company said in a statement. That facility will commence production later in 2021.

Northvolt’s overarching plan is to ramp up to at least 150 GWh of annual battery production across Europe by 2030. To meet this massive target, the company is considering at least two additional gigafactories, including one in Germany.

Northvolt is one of Europe’s largest battery manufacturers. Company shareholder EIT InnoEnergy said in a statement Wednesday that the funding is key to Europe achieving its Green Deal objectives, which includes creating a European battery value chain.

The Swedish company aims to distinguish itself from other battery manufacturers by producing batteries using renewable energy for the manufacturing process. Northvolt says its batteries have an 80% lower carbon footprint than those made with coal power. It also recycles batteries in-house and reuses the raw materials in its production process.

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ChartHop raises $35M for its internal org chart and people analytics platform

Human resources is generally a salient cornerstone of any organization, but digitization has democratized a lot of the work that goes into HR, and that’s meant more people in businesses interested in, and using, the kind of data that HR people build and typically manage. Today, a startup called ChartHop that’s built a platform to cater to that trend is announcing $35 million in funding on the heels of strong growth.

The Series B is being led by Andreessen Horowitz, a past backer, with Elad Gil and previous investors Cowboy Ventures and SemperVirens also participating. We understand from sources close to the company that the round values ChartHop at between $300 million and $400 million.

ChartHop was founded in New York by Ian White, now the CEO, who first started building the tools to fill what he felt were gaps in his own knowledge when he founded, ran and eventually sold his previous company, Sailthru (which was acquired by CampaignMonitor).

He said he realized the company could build “all the tech we wanted,” but when it came down to thinking about how to run and scale the business, that was at its heart actually a people question, and also understanding how departments, and the entire organization, looked and worked as a whole.

Image Credits: ChartHop

“It was not as important as hiring, structuring a ‘single you’ of the organization,” he said. (Ian’s pictured here to the right.) Similar to the great analytics tools that have been built for developers, sales teams and others, “What I wanted was people analytics,” he said. “I wanted to understand my team.”

That’s actually a very multifaceted question. It’s not just a matter of an org chart — a big enough task in its own right that the very day that ChartHop came out of stealth in early 2020, another org chart startup, The Org, launched, too. It’s also retention strategy, employee satisfaction, turnover statistics, diversity statistics, predictive visualizations on finances if one area was compensated differently, or if hiring were frozen, etc. “All of those problems became mine and there was no great software out there to solve for it,” White said.

The ChartHop platform is built like all strong structures these days in the world of tech: tons of integrations to feed data into ChartHop to make it richer; tons of integrations also to export and use that data in more dedicated applications when needed; and an easy way for everyone to update data but also put in place easy and strong protections to keep confidential data as it should be.

And while HR still “owns” the platform, White said, it can be accessed and used by anyone in the organization, and it is.

It seems that others have found the talent management software market lacking for it, too. Since 2019 it went from a team of one — White himself — to 75, with 130 corporates now using its services. The list has a strong list of household company names with a heavy emphasis in tech, from what White showed me. Revenues in the last 12 months — a time when the spread-out nature of many of our workplaces has meant an even greater need for a platform to manage all the information has possibly reached a high water mark — have grown at a rate of 17% month-by-month.

“With HR and people functions so crucial to the growth and success of businesses, it’s unfortunate that most HR teams lack the critical people data to drive organizational decision making,” said David Ulevitch, general partner at Andreessen Horowitz, in a statement. “ChartHop is the solution to this all-too-common problem, and is built by company leaders who have felt this pain personally. ChartHop’s visual approach to people analytics allows leaders to make organizational planning and strategy decisions with confidence. We’re thrilled to lead ChartHop’s Series B because of their impressive growth, the company’s vision, and the terrific, mission-oriented team they’ve assembled.” He also led the company’s seed round in February 2020.

“Since implementing ChartHop earlier this year, we’ve seen significant improvement in our engagement with talent routines as they’re managed via ChartHop,” said Sara Howe, vice president human resources at ZoomInfo, a customer of ChartHop, in a statement. “Our employees have found the simple user interface and the centralized view of their data as the most helpful features. Leaders across ZoomInfo have also leveraged ChartHop to ensure that their organizations are well structured to support our continued rapid growth.”

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Carlyle acquires 1E.com, an endpoint and hybrid working specialist, in $270M deal

Remote work was the order of the day for the past 16 months, but as we (fingers crossed) move out of the pandemic, it’s looking like a lot of people may move into a new era of hybrid work: less focus being present in offices to feel like you are getting things done, less time commuting and more time to be productive. To help better address that opportunity, a company called 1E, which builds solutions for companies to enable hybrid working along with managing the wider space of endpoint management, has been acquired by Carlyle on the heels of a strong year of business.

The private equity firm has picked up the London-based company in a deal that values the company at $270 million.

The acquisition is coming in the form of a majority stake with CEO and co-founder Sumir Karayi maintaining a significant minority stake, along with employees of the company. The firm is completely bootstrapped — no outside investors, no VCs on the cap table prior to this deal — and profitable, with growth of 28% in the last year.

The birth and now exit of 1E is an interesting counterpoint to that of most of the enterprise startups that you will read about on the pages of TechCrunch, or maybe in tech press overall.

The company was started in 1997 when Karayi and co-founders Phil Wilcock and Mark Blackburn were at Microsoft working as in-house consultants helping enterprises adopt and adapt to Microsoft software. Karayi decided he wanted to start something of his own, rather than, in his words, “working for Microsoft forever.”

Given his background, his business started first as a consultancy, but he said that it didn’t take long to pivot, since “We realized that the problems we were looking to solve we needed to build technology to do that, so we started to write our own software.”

The company got its start as a Microsoft shop, building endpoint technology management, along with tools to help companies manage their computer terminals and networks better. That included products like NightWatchman, a power management tool for PCs and servers that helped save energy consumption for businesses; Nomad, a bandwidth management tool that helps reduce server usage; and Shopping, a platform for companies to build app store-like experiences for internal employees or customer-facing tools.

Over time — years before the COVID-19 pandemic — that also evolved into software to enable hybrid working environments, which were already emerging as a thing and already posing challenges to businesses and users.

“The challenge was that remote working was a second-class experience,” he said, with technical support, software usage, network connectivity, device issues and just about everything harder to sort out when problems arose for workers not working in the office. So 1E — a play on the last two characters of the error message you get on a failing PC, “STOP 0x0000001E” — built software to address that, too.

Overall the company amassed some 40 patents on its technology, which now is used across more than 11 million devices among 500 large enterprise customers, including AT&T, Nestlé and a number of big banks that can’t be named.

It’s been the remote working software that has seen the company through an especially strong year — no surprise there, given the environment many of us have been working in — where businesses have been buying its tools as part of their “digital transformation” efforts, and it was this that got Karayi thinking that the company — which had largely built the business it had today on an employee base of people who just like building new things, and word-of-mouth between end users — could finally do with an outside investment and cash injection to take the business to the next level.

“We’re going through a seismic change right now and we think it’s a big opportunity for 1E,” he noted, adding that while many of us might feel like remote work is everywhere, he believes this is just the beginning of how to enable better remote working. “I think the office boat has sailed,” he said.

1E went with Carlyle among a number of other bidders as it seemed like the right fit: strong support and understanding of the business, combined with a well-recognized name. The plan more generally is to follow the PE playbook if all goes well: four years of growth, with “all later options open.”

“We were attracted to 1E’s fully integrated digital experience technology, which is differentiated by its advanced remediation and automation capabilities, and are delighted to partner with Sumir as we support the company as it enters its next phase of growth,” said Fernando Chueca, a managing director in the Carlyle Europe Technology Partners (CETP) advisory team. “With strong industry tailwinds, we believe 1E has significant growth opportunities and we look forward to supporting another founder-backed business to scale through investments in product innovation, commercial operations, and international expansion.”

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Sinch snaps up MessageMedia for $1.3B to compete with Twilio in business SMS services

Sinch — the Swedish company that provides a suite of services for companies to build communications and specifically “customer engagement” into their services by way of APIs — has made yet another acquisition in its global march to scale up its business and compete more squarely with Twilio. The company today announced that it has acquired MessageMedia, a provider of SMS and other messaging services for businesses to manage customer relations, user authentication, alerts and more.

The acquisition is being made for $1.3 billion — comprised of $1.1 billion in cash and the rest in shares (or in Sweden’s currency, SEK10,745 million in total based on Sinch’s share price and yesterdays exchange rate). The deal is expected to close in the second half of this year.

The deal is notable not just for giving Sinch a major inroad into the world of business SMS, but also because of the timing. Less than a month ago, Sinch’s big rival Twilio announced that it would acquire ZipWhip, another big player in the same area of business SMS, for $850 million.

MessageMedia, based out of Melbourne, Australia, is currently operational also in New Zealand, the U.S. and Europe, and it focuses on providing services primarily to the SMB market with a self-service platform where customers can build and operate services, with the option of using a web portal provided by MessageMedia to handle the traffic.

It has some 60,000 customers and handles 5 billion+ messages annually, Sinch said. Growth is particularly strong in the U.S. market, where MessageMedia is adding 1,500 new customers each month. Alongside SMS, it also provides tech for companies to build MMS experiences and mobile landing pages, and it also provides them with tools to integrate other features as well as an API gateway.

Sinch itself says it handles some 150 billion mobile customer engagements for its customers annually, and it has eight of the 10 biggest tech companies as customers.

Sinch is publicly traded in Sweden and currently has a market cap of $13.6 billion, and the deal comes just weeks after the company announced that it would be raising $1.1 billion for more acquisitions, with a big chunk of the money coming from SoftBank, one of its major backers.

Given the size of this deal announced today, now we know which deal Sinch had in mind. It would be interesting to know whether Sinch’s move to buy MessageMedia predated Twilio’s for ZipWhip, which definitely does not feel like a coincidence.

“Sinch powers mobile customer engagement for some of the largest brands and technology platforms in the world. With the acquisition of MessageMedia, Sinch will now be able to bring the benefits of enhanced mobile customer engagement to every small business on the planet,” CEO Oscar Werner said to TechCrunch. “No longer will you need the deep pockets of an enterprise or the technical skills of an engineer to deliver first-class customer experiences.”

Sinch has been on a fast pace of buying up companies in recent times to scale up its existing business, tapping not just into the huge surge of people using phones and the internet to communicate in these pandemic-stricken times, but also to bulk up and have more economies of scale in the communications industry, essentially a business built on aggregating incremental revenues.

That fact has led to a lot of consolidation, with Twilio also buying up strategic, smaller businesses in quick order.

In this regard, MessageMedia is a strong buy for Sinch because it’s generating strong cash. MessageMedia is expected to make $151 million in profits for the year ending June 30, with gross profits of $94 million and EBITDA of $51 million, Sinch said. Sinch itself is also profitable.

Sinch’s other deals have included Inteliquent for $1.14 billion, ACL in India for $70 million and SAP’s digital interconnect business for $250 million.

For its part, MessageMedia very much plays into and is a product of the same API economy that has lifted the likes of Twilio, Stripe and many others built on the premise of knitting together very complex services, which customers can then use by way of simple lines of code that they integrate into their own digital operations, be it websites, apps, or internal systems.

Communications, and specifically messaging API-based systems are estimated to be a $9-13 billion market, Sinch said, with the U.S. accounting for 30% of that, and the global market projected to grow between 25-30% until 2024. SMBs, who might lack the resources to build such tools from the ground up, are a big part of that activity.

“Mobile messaging delivers tremendous ROI but smaller businesses often lack tools that cater to their specific needs,” said Paul Perrett, MessageMedia CEO, in a statement. “Serving these customers presents a tremendous opportunity, and with Sinch we can build a global leader in our field.”

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Terraformation gets $30M to fight climate change with rapid reforesting

Every startup is trying to fix something, but Terraformation is tackling the only problem that must matter to all of us: climate change.

This is why it’s in such a big huge hurry. Its mission — as a “forest tech” startup — is to accelerate tree planting by applying a startup-y operational philosophy of scalability to the pressing task of rapidly, sustainably reforesting denuded landscapes — bringing back native trees species to revive former wastelands and shrinking our carbon emissions in the process.

Forests are natural carbon sinks. The problem is we just don’t have enough trees with roots in the ground to offset our emissions. So that at least means the mission is simple: Plant more trees, and plant more trees fast.

Terraformation’s goal is to restore three billion acres of global native forest ecosystems by scaling tree replanting projects in parallel, scaling the use of existing techniques and working with all the partners it can. (For a little context, the U.S. contains some 2.27 billion acres of total land area, per Wikipedia).

So far it says it’s planted “thousands” of trees — with live projects in North America, South America, Africa and Europe, which it hopes will yield up to 20,000 replanted acres. It’s also in talks with partners about more projects that could clad hundreds of thousands of acres with carbon-consuming (and biodiversity-prompting) trees, if they come to full fruition.

That’s still a long way off the 3 billion-acre-wooded moonshot, of course. But Terraformation claims it’s been able to achieve a forestry restoration work-rate that’s 5x the average already. And that’s definitely the kind of “gas stepping” that climate change needs.

Its elevator pitch is also punchy: “Our mission is explicitly to solve climate change through mass reforestation,” says founder Yishan Wong — whose name may be familiar as the ex-Reddit CEO (and also a former early-stage engineer at PayPal/Facebook). So it’s getting trees in the ground and getting faster at getting trees in the ground.”

It’s not going it alone, either. It’s just announced a first closing of a $30 million Series A funding round, led by Sam & Max Altman at Apollo Projects, the brothers’ “moonshot” fund; plus several high-profile institutional investors (whose names aren’t being disclosed); along with nearly 100 angel investors, including Sundeep Ahuja, Lachy Groom, Sahil Lavingia, Joe Lonsdale, Susan Wu and OVN Cap.

“The [Series A] was a bit larger than we anticipated and the idea is to get us to the next stage of planting orders of magnitude more trees every year,” says Wong. “So it’ll be used both for supporting forestry projects directly, as well as for the development and deployment of forestry acceleration products and technology.”

“The very, very nice thing about mass reforestation or mass restoration as a solution to climate change is that it’s extremely parallelizable,” he adds. “You can plant any tree at the same time as you’re planting some other tree. This is the primary reason why this solution can potentially be implemented within the timetable that we have left. But in order to do so we have to start and drive an enormous, decentralized reforestation campaign across multiple continents and countries.”

The funding follows a $5 million seed last year, as the young startup worked to hone its approach.

Terraformation is targeting the main barriers to successful reforesting: Through early research and pilots it says it’s identified three key bottlenecks to large-scale forest restoration — namely, land availability, freshwater and seed. It then seeks to address each of these pinch-points to viable reforesting — identifying and fashioning modular, sharable solutions (tools, techniques, training etc.) that can help shave off friction and build leafy, branching success.

These products include a seed bank unit it’s devised, housed in a standard shipping container and kitted out with all the equipment (plus solar off-grip capability, if required) to take care of on-site storage for the thousands of native seeds each projects needs to replant a whole forest.

It also offers a nursery kit which also ships in a shipping container — a flat-packed greenhouse that it says a couple of people can put together, and where thousands of seedlings can then be tended and irrigated in pots until they’re ready to plant out.

A third support it offers to the replanting projects it wants to work with is expertise in building solar-powered desalination rigs so young trees can be supplied with adequate water to survive in locations where poor land management may have made conditions for growth difficult and harsh.

It goes without saying that planted trees which fail because of poor processes won’t help cut carbon emissions. Badly managed replanting is at best wasteful — and may be closer to cynical greenwashing in some cases. (Poor quality projects can be a known problem where claims of corporate carbon offsetting are being made, for example.)

Terraformation is thus zeroing in on repeatable ways to scale and accelerate the successful planting and nurturing of trees, from seed to sapling and beyond, to accelerate sustainable reforesting.

Ultimately, it’s the only kind of tree planting that will really count in the fight against climate change.

Its first pilot restoration projects began in Hawai’i in 2019 — where it’s been able to plant thousands of trees at a site called Pacific Flight, reviving a native tropical sandalwood forest that had been logged unsustainably. To enable the young trees to grow in land which had also become arid as a result of cattle grazing, the team built the world’s largest fully off-grid, solar-powered desalination system to supply sustainable freshwater to the baby forest.

“The arid environment, high winds, and degraded soils meant that if a team could restore a forest there, they could do it anywhere,” is the pitch on its website.

The Series A will go toward spinning up lots more such native species forest restoration projects — working via partnerships, with organizations such as Environmental Defenders in Uganda, and other groups in Ecuador, Haiti and Tanzania — as well as on more R&D (additional products are in the pipeline, we’re told); and on expanding headcount so its team has the legs to run faster.

Interestingly, for a startup with a Silicon Valley engineering pedigree at its core, the team’s approach is intentionally light on technology — leaning only on vital tech (like solar and desalination), rather than experimental bells and whistles (drones, robotics etc.) to ensure the processes it’s packaging up for massive replanting parallelism remain as simple, accessible and reliable as possible. So they are able to scale all over the globe.

It’s clear that sci-fi robotic gadgetry isn’t the answer here. It’s sweating toil plus tried and tested horticulture processes, done systematically and repeatedly, in mass parallelism all over the world that’s required, argues Wong, whose years in tech have given him a healthy skepticism on the issue of over-engineering. (“The biggest lesson I learned was, you want to solve a big problem? You want to use as little technology as possible… Technology’s always breaking, it’s always got flaws. The biggest problem with technology is technology.”)

“I would say that the key contribution that ‘tech’ — if you think of a monolith or a culture or whatever — will make to climate change, is not in fact some new invention or some gadget or some sort of special magical technology… I think it really is the practice of scalability,” he goes on. “Which is an organizational end. A management way of thinking. Because that is actually something that has been carefully and painfully developed… over the past 20 years in Silicon Valley. How to take small working solutions, how to solve very big problems, how to scale them. And it isn’t a very glamorous thing — which is why I think it’s one of the more pure disciplines.

“It just has been less corrupt… Scalability is just people thinking hard and grinding it out to address really hard big problems. And I think that practice and all the little tips and rules that we have to doing that is the real contribution that tech is going to make — with one of those principles being use as little tech as you can.”

Terraformation is building software tools too — such as a mobile app to help with cataloguing and monitoring seeds. But the really critical technologies involved, solar and desalination, are very much at the “tried and tested” end of the tech scale (“very, very reliable and refined”.).

Wong points out that a key development for solar and desalination is related to the unit economics — with falling costs allowing for scalability and thus speed.

Asked whether Terraformation is a business in the typical startup sense, Wong says it’s been set up in a familiar way — as a Delaware C Corp — but purely because he says that’s just the quickest way to be able to operate. Doing stuff as a nonprofit would be way too slow, he says, describing it thusly as a “non nonprofit” (rather than a business with a for-profit mission).

Aka: “It’s a corporate with investors but primarily the aim is to solve climate change.”

Startup investors are of course often betting their money on the chance of a quick and meaty return. But not here, confirms Wong. “When we raised funding all of our investors invested primarily because they wanted to see climate change solved,” he tells TechCrunch. “To many of them this was the first time that a plausible, full-scale solution to solving climate change had been presented.

“It’s still very, very hard. It’s very, very large. It’s really daunting. But it’s the first time someone has mapped out a path that could actually get us there. And so all of our investors invested because they want to see that happen.”

So how will a “non nonprofit” startup (even with $30 million just banked) get its hands on enough land to plant enough trees? A variety of ways, per Wong. (Perhaps even, in some instances, landowners could end up paying it to turn their dirt into beautiful woodland.)

“The short answer is anywhere we can!” he adds. “The solution is structured to give us maximum flexibility, given that we can use a large variety of land. We don’t want to count on any particular land owning entity — and I use that very broad term to mean like people, communities, governments, municipalities — we don’t want to rely on any one particular land-owning entity wanting to work with us or allowing us to reforest the land, because you can’t guarantee that.”

He also notes that Terraformation’s plan to fix climate change is based on “worse-case scenarios” — where “no one who owns any land that gets enough natural rainfall for forest restoration will allow it to reforest it”. “We use the least valuable land — basically desertified, degraded land,” he adds. “Is there enough of that? And it turns out there is.”

Even though personal financial upside clearly isn’t front of mind for Terraformation’s investors, Wong still believes there’s plenty of “value” to be unlocked as a byproduct of spreading leafy-green goodness all over the planet versus funding more extractive exploitation.

“It turns out that solving climate change is actually a huge value-creating act,” he argues. “My experience in Silicon Valley is if you have people who believe in you and believe in the thing that you’re creating is ultimately value-creating then it’s actually also wealth creating. If you do something that is fundamentally very, very valuable and you’re right next to it, you will be able to monetize it in some way. You will capture some of that value for your shareholders. So it’s a bet that if you really can solve climate change, that’s super valuable, both for the world and to the entity that’s [investing].”

Of course climate change is more than just a problem; it’s an existential threat to all life on Earth — one which affects humans and every other living creature and thing on the planet.

Given such terminal stakes, reversing climate change should be the highest global priority. Instead, humans have procrastinated — putting dealing with rises in atmospheric CO2 on the back-burner and worse (cutting down existing forests like the Amazon Rainforest, for one).

Set against that backdrop, Terraformation’s answer to humanity’s greatest crisis looks compellingly simple. Its bet is that climate change can be fixed by scaling the most proven technology possible (trees) to capture carbon emissions. Who can argue with that? 

But it does also seem clear that reforesting will need to go hand in hand with a mainstreaming of conservation, as a prevailing societal attitude, if the mission is to be pulled off — otherwise all these beautiful baby trees could just meet the same sad fate as all the Earth’s already lost forests.

Nonetheless, conservation is something Wong’s team is deliberately not focusing on.

Not because they don’t care. Rather their hope is that by building the baby forests, the protective partners will come — to watch over and get value from the trees as they grow. 

“I don’t want to make it seem like we don’t care about [forestry conservation] but one of the things that I try to do is figure out where people are already doing work and things are already moving in the right direction — and then go work on the thing that other people are not working on,” he says when we ask about this. “When I talk to people in the forestry world many, many people are working on avoiding deforestation, helping solve the broader socioeconomic issues that result in deforestation. And so I feel like there is momentum moving in that direction — so we have to work on this other issue that other people aren’t working on.”

Wong also argues that forests are naturally more valuable than the denuded waste/scrub ground they’re replanting — implying that pure economic interest should help these baby forests survive and thrive far into the future.

However the history of humanity shows that unequal wealth distribution can wreak all sorts of havoc on a resource-rich natural environment. And people who live in poverty may well be disproportionately more likely to like in a rural location, on or near land that Terraformation hopes to target for replanting. So if these forests can’t provide — in crude terms — ‘value’ for their local communities the risk is the same cycle of short-term economic harm will rip all this hard work (and hope) out of the ground once again.

Wealth inequality lies at the core of much of humanity’s counterproductive destruction of the environment. So, seen from that angle, reforesting the planet may require just as much effort toward tackling — root and branch — the wider socioeconomic fault-lines of our world, as it will washing, sorting and storing seed, watering seedlings and nurturing and planting saplings.

And that further dials up an already massive climate challenge. But, again, Wong is quietly hopeful.

“People aren’t cutting down trees because they’re evil, they’re cutting down trees because they need to make a living. So we have to provide them with ways to make a living that is more valuable than cutting down the trees. I think that recognition is moving in the correct direction — so I’m hopeful there,” he says.

Asked what keeps him up at night, he also has a straightforward answer to hand — one we’ve heard many times already from a new generation of climate campaigners, like Greta Thunberg, whose futures will be irrevocably stamped by the effects of climate change: Humanity simply isn’t moving fast enough.

“In order to do this we have to make order of magnitude improvements in both speed and scale — which is technically a thing that we know how to do but is among the most daunting things that you ever try to undertake. So… are we moving fast enough? Are we doing enough? Because time is running out,” warns Wong.

“The time frame that we have left is very small when compared to the planetary scale of the problem. And so I think the only way that we’re going to get there is with proven solutions, moving, growing at exponential speed.”

“I am [hopeful],” he adds. “I’m a big fan of humans working together. People can really do it. I’m very I guess what you’d call pro-human. We have a lot of flaws, we fight amongst ourselves a lot, but I really think that when people work together they can really do amazing, amazing things… Trees gave us life and so now it’s our time to repay that debt.”

 

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Extra Crunch roundup: Security data lakes, China vs. Starlink, ExtraHop’s $900M exit

News broke this morning that Bain Capital Private Equity and Crosspoint Capital Partners are purchasing Seattle-based network security startup ExtraHop.

Part of the Network Detection and Response (NDR) market, ExtraHop’s security solutions are for companies that manage assets in the cloud and on-site, “something that could be useful as more companies find themselves in that in-between state,” report Ron Miller and Alex Wilhelm.

Just one year ago, ExtraHop was closing in on $100 million in ARR and was considering an IPO, so Ron and Alex spoke to ExtraHop CTO and co-founder Jesse Rothstein to learn more about how (and why) the deal came together.

Have a great week, and thanks for reading!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


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Xometry is taking its excess manufacturing capacity business public

Image Credits: Prasit photo (opens in a new window)/ Getty Images

Xometry, a Maryland-based service that connects companies with manufacturers with excess production capacity around the world, filed an S-1 form with the U.S. Securities and Exchange Commission last week announcing its intent to become a public company.

As the global supply chain tightened during the pandemic in 2020, a company that helped find excess manufacturing capacity was likely in high demand.

But growth aside, it’s clear that Xometry is no modern software business, at least from a revenue-quality profile.

It’s time for security teams to embrace security data lakes

Image of a man jumping from a floating dock into a lake.

Image Credits: Malorny (opens in a new window) / Getty Images

The average corporate security organization spends $18 million annually but is largely ineffective at preventing breaches, IP theft and data loss. Why?

The fragmented approach we’re currently using in the security operations center (SOC) does not work. It’s time to replace the security information and event management (SIEM) approach with security data lakes.

The reduced reliance on the SIEM is well underway, along with many other changes. The SIEM is not going away overnight, but its role is changing rapidly, and it has a new partner in the SOC — the security data lake.

 

China’s drive to compete against Starlink for the future of orbital internet

There has been a wave of businesses over the past several years hoping to offer broadband internet delivered from thousands of satellites in low-Earth orbit (LEO), providing coverage of most of the earth’s surface.

In tandem with the accelerated deployment of SpaceX’s Starlink constellation in 2020, China has rapidly responded in terms of policy, financing and technology. While still in early development, a “Chinese answer to Starlink,” SatNet, and the associated GuoWang are likely to compete in certain markets with Starlink and others while also fulfilling a strategic purpose from a government perspective.

With considerable backing from very high-level actors, we are likely to see the rollout of a Red Star(link) over China (and the rest of the world) over the coming years.

This SPAC is betting that a British healthcare company can shake up the US market

Babylon Health, a British health tech company, is pursuing a U.S. listing via a blank-check company, or SPAC.

While we wait for Robinhood’s IPO, The Exchange dove into its fundraising history, its product, its numbers and, bracing ourselves for impact, its projections.

The hidden benefits of adding a CTO to your board

A CTO brings a strategic advantage

Image Credits: Westend61 / Getty Images

Conventional wisdom says your board should include a few CEOs who can offer informed advice from an entrepreneur’s perspective, but adding a technical leader to the mix creates real upside, according to Abby Kearns, chief technology officer at Puppet.

Beyond their engineering experience, CTOs can help founders set realistic timelines, help identify pain points and bring what Kearns calls “pragmatic empathy” to high-pressure situations.

They can also be an effective advocate for founder teams who need help explaining why a launch is delayed or new engineering hires are badly needed.

“A CTO understands the nuts and bolts,” says Kearns.

6 career options for ex-founders seeking their next adventure

6 options for ex-founders looking for their next venture

Image Credits: Marie LaFauci / Getty Images

As someone with “founder” on your resume, you face a greater challenge when trying to get a traditional salaried job.

You’ve already shown that you really want to lead a company, not just rise up the ladder, which means some employers are less likely to hire you.

So what should you do? Especially if your life partner and/or bank account are burnt out on the income volatility of startups?

Here are six options for ex-founders planning their next move.

How bottom-up sales helped Expensify blaze the path for SaaS

Image Credits: Nigel Sussman

In the fifth and final part of Expensify’s EC-1, Anna Heim explores how the company built its business, true to form, in an unexpected way.

“You’d expect an expense management company to have a large sales department and advertise through all kinds of channels to maximize customer acquisition, Anna writes. But “Expensify just doesn’t do what you think it should.

“Keeping in mind this company’s propensity to just stick to its guts, it’s not much of a surprise that it got to more than $100 million in annual recurring revenue and millions of users with a staff of 130, some contractors, and an almost non-existent sales team.”

How is that much growth possible without a sales team? Word of mouth.

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