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Uptycs secures $50M Series C as security platform continues to expand

Published May 26, 2021

Uptycs, a Boston-area startup that uses data to help understand and prevent security attacks, announced a $50 million Series C today, 11 months after announcing a $30 million Series B. Norwest Venture Partners led the round with participation from Sapphire Ventures and ServiceNow Ventures.

Company co-founder and CEO Ganesh Pai says that he was still well capitalized from last year’s investment, and wasn’t actually looking to raise funds, but the investors came looking for him and he saw a way to speed up some aspects of the company’s roadmap.

“It was one of those things where the round came in primarily as a function of execution and success to date, and we decided to capitalize on that because we know the partners and raised the capital so that we could use it meaningfully for a couple of different things, primarily sales and marketing acceleration,” Pai said.

He said that part of the reason for the company’s success over the last year was that the pandemic generated more customer interest as people moved to work from home, the SolarWinds hack happened and companies were moving to the cloud faster. “We provided a solution which was telemetric powered and very insightful when it came to solving their security problems and that’s what led to triple digit growth over the last year,” he said.

2020 was a disaster, but the pandemic put security in the spotlight

But Pai says that the company has not been sitting still in terms of the platform. While last year, he described it primarily as a forensic security data solution, helping customers figure out what happened after a security issue has happened, he says that the company has begun expanding on that vision to include all four main areas of security, including being proactive, reactive, predictive and protective.

The company started primarily in being reactive by figuring what happened in the past, but has begun to expand into these other areas over the last year, and the plan is to continue to build out that functionality.

“In the context of SolarWinds, what everyone is trying to figure out is how soon into the supply chain can you figure out what could be potentially wrong by looking at indications of behavior or indications of compromise, and our ability to ingest telemetry from a diverse set of sources, not as a bolt-on solution, but something which is built from the ground up, resonated really well,” Pai explained.

The company had 65 employees when we spoke last year for the Series B. Today, Pai says that number is approaching 140 and he is adding new people every week, with a goal to get to around 200 people by the end of the year. He says as the company grows, he keeps diversity top of mind.

“As we grow and as we raise capital diversity has been something which has been a high priority and very critical for us,” he said. In fact, he reports that more than 50% of his employees come from under-represented groups whether it’s Latinx, Black or Asian heritage.

Pai says that one of the reasons he has been able to build a diverse workforce is his commitment to a remote workplace, which means he can hire from anywhere, something he will continue to do even after the pandemic ends.

Uptycs lands $30M Series B to keep building security analytics platform

Salt Security lands $70M for tech to protect APIs from malicious abuse

Published May 26, 2021

APIs make the world go round in tech, but that also makes them a very key target for bad actors: As doorways into huge data troves and services, malicious hackers spent a lot of time looking for ways to pick their locks or just force them open when they’re closed, in order to access that information. And a lot of recent security breaches stemming from API vulnerabilities (see here, here and here for just a few) show just how real and current the problem is.

Today, a company that’s building a network of services to help those using and producing APIs to identify and eradicate those risks is announcing a round of funding to meet a growing demand for its services. Salt Security, which provides AI-based technology to identify issues and stop attacks across the whole of your API library, has closed $70 million in funding, money that it will be using both to meet current demand but also continue building out its technology for a wider set of services and use cases for API management.

The funding is being led by Advent International, by way of Advent Tech, with Alkeon Capital, DFJ Growth and previous backers Sequoia Capital, Tenaya Capital, S Capital VC and Y Combinator all also participating.

Salt, founded in Israel and now active globally, is not disclosing valuation, but I understand from a reliable source that it is in the region of $600-700 million.

As with many of the funding rounds that seem to be getting announced these days, this one is coming on the heels of both another recent round, as well as strong growth. Salt has raised $131 million since 2016, but nearly all of that — $120 million, to be exact — has been raised in the last year.

Peloton’s leaky API let anyone grab riders’ private account data

Part of the reason for that is Salt’s performance: In the last 12 months, it’s seen revenue grow 400% (with customers including a range of Fortune 500 and other large businesses in the financial services, retail and SaaS sectors like Equinix, Finastra, TripActions, Armis and DeinDeal); headcount grow 160%; and, perhaps most importantly, API traffic on its network grow 380%.

That growth in API traffic underscores the issue that Salt is tackling. Companies these days use a variety of APIs — some private, some public — in their tech stack as a way to interface with other businesses and run their services. APIs are a huge part of how the internet and digital services operate, with Akamai estimating that as much as 83% of all IP traffic is API traffic.

The problem, Roey Eliyahu, CEO and co-founder of Salt Security, told me, is that this usage has outpaced how well many manage those APIs.

“How APIs have evolved is very different to how developers used APIs years ago,” he said. “Before, there were very few, and you could say they were more manageable, and they contained less-sensitive data, and there were very few changes and updates made to them,” he said. “Today with the pace of development, not only are they always getting updated, but you have thousands of them now touching crown jewels of the company.”

This has made them a prime target for malicious hackers. Eliyahu notes Gartner stats that predict that by 2022, APIs will make up the largest attack vector in cybercrime.

Salt’s approach starts with taking stock of a whole network and doing a kind of spring clean to find all the APIs that might be used or abused.

“Companies don’t know how many APIs they even have,” Eliyahu said, noting that some 40%-80% of the APIs in existence for a typical company’s data are not even in active operation, lying there as “shadow APIs” for someone to pick up and misuse.

It then looks at what vulnerabilities might inadvertently be contained in this mix and makes suggestions for how to alter them to fix that. After this, it also monitors how they are used in order to stop attacks as they happen. The third of these also involves remediation “insights”, but carrying out the remediation is done by third parties at the moment, Eliyahu said. All of this is done through Salt’s automated, AI-based, flagship Salt Security API Protection Platform.

API security startup 42Crunch raises $17M Series A led by Energy Impact Partners

There are a number of competitors in the same space as Salt, including Ping, and newer players like Imvision and 42Crunch (which raised funding earlier this month), and the list is likely to grow as not just other API management companies get deeper into this huge space, but cybersecurity companies do, too.

“The rapid proliferation of APIs has dramatically altered the attack surface of applications, creating a major challenge for large enterprises since existing security mechanisms cannot protect against this new threat,” said Bryan Taylor, managing partner and head of Advent’s technology team, in a statement. “We continue to see API security incidents make the news headlines and cause significant reputational risk for companies. As we investigated the API security market, Salt stood out for its multi-year technical lead, significant customer traction and references, and talented team. We look forward to drawing on our deep experience in this sector to partner with Salt in this exciting new chapter.”

Enterprise security attackers are one password away from your worst day

UK’s Paysend raises $125M at a $700M+ valuation to expand its all-in-one payments platform

Published May 26, 2021

With more people than ever before going online to pay for things and pay each other, startups that are building the infrastructure that enables these actions continue to get a lot of attention.

In the latest development, Paysend, a fintech that has built a mobile-based payments platform — which currently offers international money transfers, global accounts, and business banking and e-commerce for SMBs — has picked up some money of its own. The London-based startup has closed a round of $125 million, a sizable Series B that the company’s CEO and founder Ronnie Millar said it will be using to continue expanding its business geographically, to hire more people, and to continue building more fintech products.

The funding is being led by One Peak, with Infravia Growth Capital, Hermes GPE, previous backer Plug and Play and others participating.

Millar said Paysend is not disclosing valuation today but described it as a “substantial kick-up” and “a great step forward in our position ahead toward unicorn status.”

From what I understand though, the company was valued at $160 million in its previous round, and its core metrics have gone up 4.5x. Doing some basic math, that gives the company a valuation of around $720 million, a figure that a source close to the company did not dispute when I brought it up.

Something that likely caught investors’ attention is that Paysend has grown to the size it is today — it currently has 3.7 million consumer customers using its transfer and global account services, and 17,000 small business customers, and is now available in 110 receiving countries — in less than four years and $50 million in funding.

There are a couple of notable things about Paysend and its position in the market today, the first being the competitive landscape.

On paper, Paysend appears to offer many of the same features as a number of other fintechs: money transfer, global payments, and banking and e-commerce services for smaller businesses are all well-trodden areas with companies like Wise (formerly “TransferWise”), PayPal, Revolut, and so many others also providing either all or a range of these services.

To me, the fact that any one company relatively off the tech radar can grow to the size that it has speaks about the opportunity in the market for more than just one or two, or maybe five, dominant players.

Considering just remittances alone, the WorldBank in April said that flows just to low- and middle-income countries stood at $540 million last year, and that was with a dip in volumes due to COVID-19. The cut that companies like Paysend make in providing services to send money is, of course, significantly smaller than that — business models include commission charges, flat fees or making money off exchange rates; Paysend charges £1 per transfer in the U.K. More than that, the overall volumes, and the opportunity to build more services for that audience, are why we’re likely to see a lot of companies with ambitions to serve that market.

Services for small businesses, and tapping into the opportunity to provide more e-commerce tools at a time when more business and sales are being conducted online, is similarly crowded but also massive.

Indeed, Paysend points out that there is still a lot of growing and evolution left to do. Citing McKinsey research, it notes that some 70% of international payments are currently still cash-to-cash, with fees averaging up to 5.2% per transaction, and timing taking up to an hour each for sender and recipient to complete transfers. (Paysend claims it can cut fees by up to 60%.)

Inside Marqeta’s fascinating fintech IPO

This brings us to the second point about Paysend: How it’s built its services. The fintech world today leans heavily on APIs: Companies that are knitting together a lot of complexity and packaging it into APIs that are used by others who bypass needing to build those tools themselves, instead integrating them and adding better user experience and responsive personalization around them. Paysend is a little different from these, with a vertically integrated approach, having itself built everything that it uses from the ground up.

Millar — a Scottish repeat entrepreneur (his previous company Paywizard, which has rebranded to Singula, is a specialist in pay-TV subscriber management) — notes that Paysend has built both its processing and acquiring facilities. “Because we have built everything in-house it lets us see what the consumer needs and uses, and to deliver that at a lower cost basis,” he said. “It’s much more cost-efficient and we pass that savings on to the consumer. We designed our technology to be in complete control of it. It’s the most profitable approach, too, from a business point of view.”

That being said, he confirmed that Paysend itself is not yet profitable, but investors believe it’s making the right moves to get there. To be clear, Paysend actually does partner with other companies, including those providing APIs, to improve its services. In April, Plaid and Paysend announced they were working together to power open banking transfers, reducing the time to initiate and receive money.

“We are excited by Paysend’s enormous growth potential in a massive market, benefiting from a rapid acceleration in the adoption of digital payments,” said Humbert de Liedekerke, managing partner at One Peak Partners, in a statement. “In particular, we are seeing strong opportunities as Paysend moves beyond consumers to serve business customers and expands its international footprint to address a growing need for fast, easy and low-cost cross-border digital payments. Paysend has built an exceptional payment platform by maintaining an unwavering focus on its customers and constantly innovating. We are excited to back the entire Paysend team in their next phase of explosive growth.”

Emotion-detection software startup Affectiva acquired for $73.5M

Published May 25, 2021

Smart Eye, the publicly traded Swedish company that supplies driver monitoring systems for a dozen automakers, has acquired emotion-detection software startup Affectiva for $73.5 million in a cash-and-stock deal.

Affectiva, which spun out of the MIT Media Lab in 2009, has developed software that can detect and understand human emotion, which Smart Eye is keen to combine with its own AI-based eye-tracking technology. The companies’ founders see an opportunity to expand beyond driver monitoring systems — tech that is often used in conjunction with advanced driver assistance systems to track and measure awareness — and into the rest of the vehicle. Together, the technology could help them break into the emerging “interior sensing” market, which can be used to monitor the entire cabin of a vehicle and deliver services in response to the occupant’s emotional state.

Under the terms of the deal, $67.5 million will be paid with 2,354,668 new Smart Eye shares, of which 2,015,626 are to be issued upon closing of the transaction. The remaining 339,042 Smart Eye shares will be issued within two years of closing. About $6 million will be paid in cash once the deal closes in June 2021.

Affectiva and Smart Eye were competitors. A meeting at the technology trade show CES in 2020 put the two companies on a path to merge.

“Martin and I realized like, wow, we are on a path to compete with each other — and wouldn’t it be so much better if we joined forces?” Affective co-founder and CEO Dr. Rana el Kaliouby said in an interview Tuesday. “By joining forces, we kind of check all the boxes for what the OEMs are looking for with interior sensing, we leapfrog the competition and we have an opportunity to do this better and faster than we could have done it on our own.”

Automakers, suppliers and startups see growing market for in-vehicle AR/VR applications

Boston-based Affectiva brings its emotion-detection software to the deal, which will allow Smart Eye to offer its existing automotive partners a variety of products. Smart Eye helps Affectiva move beyond the development and prototype work and into production contracts. Smart Eye has won 84 production contracts with 13 OEMs, including BMW and GM. Smart Eye, which has offices in Gothenburg, Detroit, Tokyo and Chongqing, China, also has a division that provides research organizations such as NASA with high-fidelity eye tracking systems for human factors research.

Smart Eye founder and CEO Martin Krantz said that European manufacturers building luxury and premium vehicles led the charge for driver monitoring systems.

“We see the same pattern repeating itself now for interior sensing,” Krantz said. “I think a large part of the early contracts will be European premium OEMs such as Mercedes, BMW, Audi, JLR, Porsche.” Krantz added that there are a number of other premium brands it will target in other regions, including Cadillac and Lexus.

The opportunity will initially be in passenger vehicles driven by humans and will eventually expand as greater levels of automated driving enter the market.

Affectiva, which employs 100 people at its offices in Boston and Cairo, also has another business unit that applies its emotio-detection software to media analytics. This division, which will be part of the deal and will operate separately, is profitable, Kaliouby said, noting the software is used by 70% of the world’s largest advertisers to measure and understand emotional responses to media content.

How artificial intelligence will be used in 2021

Getty Images leads $16M investment in Promo.com, a social video template tool

Published May 25, 2021

The social video tool Promo.com just raised $16 million in a Series B round led by Getty Images, the company synonymous with stock imagery.

Brands, creators or whoever else might need some quick and dirty video content can search Promo.com for what they need, just like they would use a stock photography service. Getty offers its own library of stock videos as well, but Promo.com provides both the video clips and the tools for non-editors to craft a basic edit with a little bit of customization.

Brands can select an existing professional video clip from a library, plug in their own message and add a logo or custom audio. All that’s left is downloading the customized video and whisking it off to their social channels.

Biteable raises $7 million Series A for its template-based online video builder

Mizrahi-Tefahot Bank, one of the largest banks in Israel, also participated in the Series B round through debt financing. Promo.com’s existing “strategic partnership” with Getty Images will deepen as part of the deal, giving the former company access to the latter’s expansive existing pool of video clips.

Image Credits: Screenshot/Promo.com

Of course, Promo.com isn’t the only show in town. Video creation platform Biteable raised $7 million of its own in December, and similarly allows companies to make bright, bite-sized video content for social. The super streamlined graphic design platform Canva also supports video editing with its own library of stock images. Vimeo offers its own video template service too, known as Vimeo Create, which grew out of the company’s acquisition of the AI-powered video editor Magisto.

Vimeo’s new app helps small businesses create professional social videos

Canva raises $60 million on a $6 billion valuation

Extra Crunch members get unlimited access to 12M stock images for $99 per year

Extra Crunch roundup: Lordstown Motors’ woes, how co-CEOs work, Brian Chesky interview

Published May 25, 2021

Lordstown Motors released its Q1 earnings yesterday, and the electric vehicle manufacturer is facing a few challenges.

Expenses were higher than expected, it plans to slash production by about 50%, and the company reported zero revenue and a net loss of $125 million. Oh, it also needs more capital.

“But there’s more to the Lordstown mess than merely a single bad quarter,” writes Alex Wilhelm. “Lordstown’s earnings mess and the resulting dissonance with its own predictions are notable on their own, but they also point to what could be shifting sentiment regarding SPAC combinations.”

In light of the company’s lackluster earnings report (and a pending SEC investigation), Alex unpacks the company’s Q1, “but don’t think that we’re only singling out one company; others fit the bill, and more will in time.”

Dogs of Lordstown

May 27 Clubhouse chat: How to ensure data quality in the era of Big Data

TC unwind chat with Ron Miller and Patrik Liu Tran

Image Credits: TechCrunch

Join TechCrunch reporter Ron Miller and Patrik Liu Tran, co-founder and CEO of automated real-time data validation and quality monitoring platform Validio, on Thursday, May 27 at 9 a.m. PDT/noon EDT for a Clubhouse chat about ensuring data quality in the era of Big Data.

The world produces 2.5 quintillion bytes of data daily, but modern data infrastructure still lacks solutions for monitoring data quality and data validation.

Among other topics, they’ll discuss the build versus buy debate, how to better understand data failures, and why traditional methods for identifying data failures are no longer operational.

Click here to join the conversation.

Thanks very much for reading Extra Crunch; have a great week!

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

How to ensure data quality in the era of Big Data

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How Expensify shed Silicon Valley arrogance to realize its global ambitions

Image Credits: Nigel Sussman

Expensify may be the most ambitious software company ever to mostly abandon the Bay Area as the center of its operations.

The startup’s history is tied to places representative of San Francisco: The founding team worked out of Peet’s Coffee on Mission Street for a few months, then crashed at a penthouse lounge near the 4th and King Caltrain station, followed by a tiny office and then a slightly bigger one in the Flatiron building near Market Street.

Thirteen years later, Expensify still has an office a few blocks away on Kearny Street, but it’s no longer a San Francisco company or even a Silicon Valley firm. The company is truly global with employees across the world — and it did that before COVID-19 made remote working cool.

It makes sense that a company founded by internet pirates would let its workforce live anywhere they please and however they want to. Yet, how does it manage to make it all work well enough to reach $100 million in annual revenue with just a tad more than 100 employees?

As I described in Part 2 of this EC-1, that staffing efficiency is partly due to its culture and who it hires. It’s also because it has attracted top talent from across the world by giving them benefits like the option to work remotely all year as well as paying SF-level salaries even to those not based in the tech hub. It’s also got annual fully paid month-long “workcations” for every employee, their partner and kids.

How Expensify shed Silicon Valley arrogance to realize its global ambitions

Brian Chesky describes a faster, nimbler post-pandemic Airbnb

Image Credits: TechCrunch

Managing Editor Jordan Crook interviewed Airbnb co-founder and CEO Brian Chesky to discuss the future of travel and what it was like leading the world’s biggest hospitality startup during a global pandemic.

“Our business initially dropped 80% in eight weeks. I say it’s like driving a car. You can’t go 80 miles an hour, slam on the brakes, and expect nothing really bad to happen.

Now imagine you’re going 80 miles an hour, slam on the brakes, then rebuild the car kind of while still moving, and then try to accelerate into an IPO, all on Zoom.”

Brian Chesky describes a faster, nimbler post-pandemic Airbnb

Embedded finance will help fill the life insurance coverage gap

Image of a keyboard with one key featuring a family covered by an umbrella to represent life insurance.

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

There’s latent demand for life insurance currently unaddressed by much of the financial services industry, and embedded finance can be the solution.

It’s imperative for companies to consider product lines and partnerships to expand markets, create new revenue streams and provide added value to their customers.

Connecting consumers with products they need through channels they already know and trust is both a massive revenue opportunity and a social good, providing financial resilience to families at a time when they need it most.

Embedded finance will help fill the life insurance coverage gap

Zeta Global’s IPO filing uncovers modest growth, strong adjusted profitability

Image Credits: Nigel Sussman (opens in a new window)

Zeta Global raised north of $600 million in private capital in the form of both equity financing and debt, making it a unicorn worth understanding.

The gist is that Zeta ingests and crunches lots of data, helping its users market to their customers on a targeted basis throughout their individual buying lifecycles. In simpler terms, Zeta helps companies pitch customers in varied manners depending on their own characteristics.

You can imagine that, as the digital economy has grown, the sort of work Zeta Global supports has only expanded. So, has Zeta itself grown quickly? And does it have an attractive business profile? We want to know.

Zeta Global’s IPO filing uncovers modest growth, strong adjusted profitability

5 predictions for the future of e-commerce

Image of hands holding credit card and using laptop to represent online shopping/e-commerce.

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

In 2016, more than 20 years after Amazon’s founding and 10 years since Shopify launched, it would have been easy to assume e-commerce penetration (the percentage of total retail spend where the goods were bought and sold online) would be over 50%.

But what we found was shocking: The U.S. was only approximately 8% penetrated — only 8% for arguably the most advanced economy in the world!

Despite e-commerce growth skyrocketing over the past year, the reality is the U.S. has still only reached an e-commerce penetration rate of around 17%. During the last 18 months, we’ve closed the gap to South Korea and China’s e-commerce penetration of more than 25%, but there is still much progress to be made.

Here are five key predictions for what this road to further penetration will hold.

5 predictions for the future of e-commerce

Develop a buyer’s guide to educate your startup’s sales team and customers

Image Credits: Nora Carol Photography (opens in a new window) / Getty Images

Every company wants to be innovative, but innovation comes with its share of difficulties. One key challenge for early-stage companies that are disrupting a particular space or creating a new category is figuring out how to sell a unique product to customers who have never bought such a solution.

This is especially the case when a solution doesn’t have many reference points and its significance may not be obvious.

Some buyers could use a walkthrough of the buying process. If you are building a singular product in a nascent market that necessitates forward-looking customers and want to drastically shorten sales cycles, create a buyer’s guide.

Develop a buyer’s guide to educate your startup’s sales team and customers

When to walk away from a VC who wants to invest in your startup

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

Pay attention to red flags when meeting with VCs: If they cancel late or leave you waiting, it’s a sign, just like being asked generic questions that demonstrate little or no understanding of the proposition. If they critique you or your business, that’s fine (obviously), but make sure you find out what’s behind their assertions to judge how well informed they are.

If you’re going to face these people each month and debate the direction of your business, the least you can expect is a robust argument outlining precisely why you may not have all the right answers.

If you fail to spot the warning signs, you’ll live to regret it. But do your due diligence and work constructively with them and, together, you might actually build a sustainable future.

When to walk away from a VC who wants to invest in your startup

Deep Science: Robots, meet world

Image via Getty Images / Westend61

This column aims to collect some of the most relevant recent discoveries and papers — particularly in, but not limited to, artificial intelligence — and explain why they matter.

In this edition, we have a lot of items concerned with the interface between AI or robotics and the real world. Of course, most applications of this type of technology have real-world applications, but specifically, this research is about the inevitable difficulties that occur due to limitations on either side of the real-virtual divide.

Deep Science: Robots, meet world

2 CEOs are better than 1

Defocussed shot of two silhouetted businesspeople having a meeting in the boardroom

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

Netflix has two CEOs: Co-founder Reed Hastings oversees the streaming side of the company, while Ted Sarandos guides Netflix’s content.

Warby Parker has co-CEOs as well — its co-founders went to college together. Other companies like the tech giant Oracle and luggage maker Away have shifted from having co-CEOs in recent years, sparking a wave of headlines suggesting that the model is broken.

While there isn’t a lot of research on companies with multiple CEOs, the data is more promising than the headlines would suggest. One study on public companies with co-CEOs revealed that the average tenure for co-CEOs, about 4.5 years, was comparable to solitary CEOs, “suggesting that this arrangement is more stable than previously believed.”

Furthermore, it’s impossible to be in two places at once or clone yourself. With co-CEOs, you can effectively do just that.

2 CEOs are better than 1

What Vimeo’s growth, profits and value tell us about the online video market

Published May 25, 2021

The spinout of video platform Vimeo from IAC completed today, with the smaller company now trading as an independent entity under the ticker symbol VMEO.

If you missed the news that the internet conglomerate was spinning out the video service, don’t feel bad; it slipped past many radars. But with the company now trading, with our access to its historical results, and with our minds still enthralled by YouTube’s recent financial performance for Alphabet, it’s worth taking a moment to digest the company’s health.

Let’s answer a few questions: How quickly is Vimeo growing, how profitable is its business, and what can its spinout tell us about the larger video market? Recall that Kaltura, another video-powering company, recently put its IPO back into the pipeline after a small delay during what felt like a snap-freeze of the public markets toward the start of the second quarter.

So the Vimeo debut could impact a possible forthcoming unicorn IPO. With that in mind, let’s dig into the numbers.

Growth

From Q1 2020 to Q1 2021, Vimeo’s revenues expanded from $57 million to $89.4 million, a gain of around 57%. That’s a solid pace of expansion, but not a surprising one considering how much digital video the world consumed during the COVID-19 pandemic, a fact that could have bolstered the company’s recent performance.

Over the same time frame, Vimeo’s gross profit grew from $38.6 million to $64.5 million, a gain of around 67%. As you can infer from faster-rising gross profit than revenue, Vimeo’s gross margins improved during Q1 2021 compared to the first quarter of 2020, from 68% to 72%.

Call it a comeback: Turntable.fm raises $7.5M

Published May 25, 2021

Earlier this year, Turntable.fm’s founder Billy Chasen dusted off the old site and resurrected it for the pandemic age. I know I wasn’t the only one feeling a wistful pang of nostalgia for the service during the long, dull days of sheltering in place. And while March 2020 would have been the best time for a relaunch, March 2021 was pretty good, too.

Today Chasen announced that the service has received a nice little slice of VC backing to help the service (which has thus far been invite/password only) take the next step. Andreessen Horowitz led the $7.5 million round a decade after the site’s original launch. Funding had thus far been limited to fans through services like Patreon and Venmo. He notes that he will be turning off the service’s Patreon.

Chasen is staying mum as far as where the funding will go, stating, “And now with the new fundraising, we can continue to innovate and truly explore the cross section of social + music. I have a lot of ideas for the space and I’m excited to start building them.”

Though, a blog post does note that the company is hiring engineers and designers. Understandable, though as someone who’s been enjoying the site these last few months, I’m actually pretty surprised at how fresh the whole thing feels.

The team found a clever loophole around music rights in the form of YouTube videos, but perhaps a future version of the service will involve more direct music licensing or ties to popular apps like Spotify. A mobile app would be nice, if I’m just spitballing here.

Turntable.fm initially shut down back in 2013, stating at the time, “It was a tough decision to make because we love this community so much, but the cost of running a music service has been too expensive and we can’t outpace it with our efforts to monetize it and cut costs.” The service added that it was focusing on a live events platform instead.

Notably, Turntable.fm is not the only Turntable service looking to relaunch in 2021. There’s also Turntable.org (confusingly located at TT.fm), which is seeking fan funding, as well as looking toward a subscription fee. It announced that it had raised $500,000 in March and was aiming for an April launch for a mobile and desktop version. The site currently reads, “We’re building a new version just as much fun as the original.”

The two Turntables are not affiliated.

Turntable.fm Shutting Down So Company Can Focus On Turntable Live Events Platform

Raising a round? AngelList Venture CEO Avlok Kohli will share insights at TC Early Stage

Published May 25, 2021

What’s it like raising a round in 2021? How has it changed over the last few months, as some glimmer of normalcy seems, at least, within reach? What do early-stage founders (and investors!) need to know about the current state of the industry?

Few are in a better place to outline this than Avlok Kohli, the CEO of AngelList Venture who will let you know at TC Early Stage on July 8-9. With more than $2.2 billion in assets under management and over 5,000 startups funded on the platform, AngelList has data-driven insights that just about no one else could offer. Kohli joined AngelList Venture as CEO in mid-2019, giving him a remarkably unique view of the industry through a particularly wild time.

Kohli also knows what it’s like to be a founder, having been in that seat multiple times. In 2014 he founded Fastbite, a low-cost meal delivery service; in 2015, he sold it to Square. He dove back in with a daily house cleaning service called Fairy in 2017, and sold it to Postmates at the beginning of 2019.

We’re super excited to announce that Avlok Kohli will join us at TC Early Stage on July 8-9 to get us all up to speed on the state of play in early-stage investing.

Understanding how fundraising terms can affect early-stage startups

TC Early Stage is our event series all about startups that are… well, early stage. From raising money to marketing the right way to just getting people to care, we go deep on the topics that matter most to founders.

We’ll kick this session off with a presentation from Kohli on the state of early-stage investing, then we’ll get right into audience Q&A and try to get your most burning questions answered live.

TC Early Stage: Marketing & Fundraising goes down on July 8th and 9th — and because it’s virtual, you can attend right from the comfort of your couch. Or office chair. Or a hammock. We don’t care, just come watch. Get your tickets here!

Whatnot raises $50M to let people sell Pokémon cards, Funko Pops and more via livestream

Published May 25, 2021

Whatnot exists with one primary goal in mind: to give people a place to buy and sell collectibles (like Pokémon cards, sports cards, pins, etc.) in a safe, authenticated way.

The company started out with intentions of being a GOAT/StockX-style resale marketplace, where the products up for sale lived on neat little pages with row after row of static images. As they started experimenting with other formats, they found one that really seemed to catch on: livestream sales. Think QVC or the Home Shopping Network… but instead of hosts in huge studios selling jewelry and patio furniture, it’s users with smartphones selling Charizard cards and Yoda figurines.

Image Credits: Whatnot

I first wrote about Whatnot last year. In the short time since, the company has raised three increasingly large rounds: $4 million in December, $20 million in March and, as of this morning, another $50 million.

While Whatnot still offers the more standard product pages to give sellers a 24/7 presence on the site, the livestreaming side of things has become the primary driver — by far. Co-founder Grant LaFontaine tells me that livestreaming is currently “95% of the focus”; it’s where most of their sales are happening, and what users seem to care most about.

Another thing users seem to care about? Sports cards. Whatnot opened up the site to sports card sellers in January, and it almost immediately took over as the site’s best-selling category. The one category now accounts for “millions of dollars” in sales each month, the company says.

Whatnot raises $20M for its livestreaming platform built for selling Pokémon cards and other collectibles

The Whatnot team itself is growing quickly as well. When I first spoke to them, it was just a handful of employees; by January of this year, they were up to 10. Today it’s 45 full-timers. By the end of the year, says Grant, they expect to be nearing 100.

While anyone can sell on Whatnot’s marketplace, only users that have been vetted/invited can sell via livestream. This helps to keep fraud low; sellers know that if they try to sneak in fake cards or rip anyone off, their access to livestreaming — and thus their audience — could vanish.

The company tells me that this Series B round was led by Anu Hariharan of Y Combinator Continuity fund, and backed by Andreessen Horowitz, Animal Capital and a number of angels.

Whatnot wants to be the GOAT of collectible toys, starting with Funko Pops