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ActiveFence comes out of the shadows with $100M in funding and tech that detects online harm, now valued at $500M+
Online abuse, disinformation, fraud and other malicious content is growing and getting more complex to track. Today, a startup called ActiveFence is coming out of the shadows to announce significant funding on the back of a surge of large organizations using its services. ActiveFence has quietly built a tech platform to suss out threats as they are being formed and planned to make it easier for trust and safety teams to combat them on platforms.
The startup, co-headquartered in New York and Tel Aviv, has raised $100 million, funding that it will use to continue developing its tools and to continue expanding its customer base. To date, ActiveFence says that its customers include companies in social media, audio and video streaming, file sharing, gaming, marketplaces and other technologies — it has yet to disclose any specific names but says that its tools collectively cover “billions” of users. Governments and brands are two other categories that it is targeting as it continues to expand. It has been around since 2018 and is growing at around 100% annually.
The $100 million being announced today actually covers two rounds: Its most recent Series B led by CRV and Highland Europe, as well as a Series A it never announced led by Grove Ventures and Norwest Venture Partners. Vintage Investment Partners, Resolute Ventures and other unnamed backers also participated. It’s not disclosing valuation but I understand it’s over $500 million.
“We are very honored to be ActiveFence partners from the very earliest days of the company, and to be part of this important journey to make the internet a safer place and see their unprecedented success with the world’s leading internet platforms,” said Lotan Levkowitz, general partner at Grove Ventures, in a statement.
The increased presence of social media and online chatter on other platforms has put a strong spotlight on how those forums are used by bad actors to spread malicious content. ActiveFence’s particular approach is a set of algorithms that tap into innovations in AI (natural language processing) and to map relationships between conversations. It crawls all of the obvious, and less obvious and harder-to-reach parts of the internet to pick up on chatter that is typically where a lot of the malicious content and campaigns are born — some 3 million sources in all — before they become higher-profile issues. It’s built both on the concept of big data analytics as well as understanding that the long tail of content online has a value if it can be tapped effectively.
“We take a fundamentally different approach to trust, safety and content moderation,” Noam Schwartz, the co-founder and CEO, said in an interview. “We are proactively searching the darkest corners of the web and looking for bad actors in order to understand the sources of malicious content. Our customers then know what’s coming. They don’t need to wait for the damage, or for internal research teams to identify the next scam or disinformation campaign. We work with some of the most important companies in the world, but even tiny, super niche platforms have risks.”
The insights that ActiveFence gathers are then packaged up in an API that its customers can then feed into whatever other systems they use to track or mitigate traffic on their own platforms.
ActiveFence is not the only company building technology to help platform operators, governments and brands have a better picture of what is going on in the wider online world. Factmata has built algorithms to better understand and track sentiments online; Primer (which also recently raised a big round) also uses NLP to help its customers track online information, with its customers including government organizations that used its technology to track misinformation during election campaigns; Bolster (formerly called RedMarlin) is another.
Some of the bigger platforms have also gotten more proactive in bringing tracking technology and talent in-house: Facebook acquired Bloomsbury AI several years ago for this purpose; Twitter has acquired Fabula (and is working on a bigger efforts like Birdwatch to build better tools), and earlier this year Discord picked up Sentropy, another online abuse tracker. In some cases, companies that more regularly compete against each other for eyeballs and dollars are even teaming up to collaborate on efforts.
Indeed, it may well be that ultimately there will exist multiple efforts and multiple companies doing good work in this area, not unlike other corners of the world of security, which might need more than one hammer thrown at problems to crack them. In this particular case, the growth of the startup to date, and its effectiveness in identifying early warning signs, is one reason investors have been interested in ActiveFence.
“We are pleased to support ActiveFence in this important mission,” commented Izhar Armony, a general partner at CRV, in a statement. “We believe they are ready for the next phase of growth and that they can maintain leadership in the dynamic and fast-growing trust and safety market.”
“ActiveFence has emerged as a clear leader in the developing online trust and safety category. This round will help the company to accelerate the growth momentum we witnessed in the past few years,” said Dror Nahumi, general partner at Norwest Venture Partners, in a statement.
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Nium crosses $1B valuation with $200M Riverwood Capital-led round
Business-to-business payments platform Nium announced Monday that it raised more than $200 million in Series D funding and saw its valuation rise above $1 billion.
The company, now Singapore-based but shifting to the Bay Area, touted the investment as making it “the first B2B payments unicorn from Southeast Asia.”
Riverwood Capital led the round, in which Temasek, Visa, Vertex Ventures, Atinum Capital, Beacon Venture Capital and Rocket Capital Investment participated, along with a group of angel investors like DoorDash’s Gokul Rajaram, FIS’ Vicky Bindra and Tribe Capital’s Arjun Sethi. Including the new funding, Nium has raised $300 million to date, Prajit Nanu, co-founder and CEO, told TechCrunch.
The B2B payments sector is already hot, yet underpenetrated, according to some experts. To give an idea just how hot, Nium was seeking $150 million for its Series D round, received commitments of $300 million from eager investors and settled on $200 million, Nanu said.
“This is our fourth or fifth fundraise, but we have never had this kind of interest before — we even had our term sheets in five days,” he added. “I believe this interest is because we’ve successfully managed to create a global platform that is heavily regulated, which gives us access to a lot of networks. This is an environment where payment is visible, and our core is powering frictionless commerce and enabling anyone to use our platform.”
Nium’s new round adds fuel to a fire shared by a number of companies all going after a global B2B payments market valued at $120 trillion annually: last week, Paystand raised $50 million in Series C funding to make B2B payments cashless, while Dwolla raised $21 million for its API that allows companies to build and facilitate fast payments. In March, Higo brought in $3.3 million to do the same in Latin America, while Balance, developing a B2B payments platform that allows merchants to offer a variety of payment methods. raised $5.5 million in February.
Nium’s approach is to provide access to a global payment infrastructure, including card issuance, accounts receivable and payable, and banking-as-a-service through a single API. The company’s network enables customers to then send funds to more than 100 countries, pay out in more than 60 currencies, accept funds in seven currencies and issue cards in more than 40 countries, Nanu said. The company also boasts money transfer, card issuances and banking licenses in 11 jurisdictions.
Francisco Alvarez-Demalde, co-founding partner and managing partner at Riverwood, said in an email that the combination of software — plus regulatory licenses — and operating a fintech infrastructure platform on behalf of neobanks and corporates is a global trend experiencing hyper-growth.
Riverwood followed Nium for many years, and its future vision was what got the firm interested in being a part of this round. Alvarez-Demalde said that “Nium has the incredible combination of a great market opportunity, a talented founder and team, and we believe the company is poised for global growth based on underlying secular technology trends like increasing real-time payment capabilities and the proliferation of cross border commerce.
“As a central payment infrastructure in one API, Nium is a catalyst that unlocks cross-border payments, local accounts and card issuance with a network of local market licenses, partners and banking relationships to facilitate moving money across the world,” he added. “Enterprises of all types are embedding financial services as part of their consumer experience, and Nium is a key global enabler of this trend.”
Nanu said the new funding enables the company to move to the United States, which represents 3% of Nium’s revenue. He wants to increase that to 20% over the next 18 months, as well as expand in Latin America. The investment also gives the company a 12- to 18-month runway for further M&A activity. In June, Nium acquired virtual card issuance company Ixaris, and in July acquired Wirecard Forex India to expose it to India’s market. He also plans to expand the company’s payments network infrastructure, invest in product development and add to Nium’s 700-person headcount.
Nium already counts hundreds of enterprise companies as clients and plans to onboard thousands more in the next year. The company processes $8 billion in payments annually and has issued more than 30 million virtual cards since 2015. Meanwhile, revenue grew by over 280% year over year.
All of this growth puts the company on a trajectory for an initial public offering, Nanu said. He has already spoken to people who will help the company formally kick off that journey in the first quarter of 2022.
“Unlike other companies that raise money for new products, we aim to expand in the existing sets of what we do,” Nanu said. “The U.S. is a new market, but we have a good brand and will use the new round to provide a better experience to the customer.”
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Glyphic Biotechnologies raises $6M to accelerate protein sequencing by orders of magnitude
The whole human proteome may be free to browse thanks to DeepMind, but at the bleeding edge of biotech new proteins are made and tested every day, a complex and time-consuming process. Glyphic Biotechnologies accelerates the critical but slow sequencing step, potentially cutting drug development times down by a huge amount, and the startup just raised a $6 million seed to bring its clever solution to market.
Proteins are at the heart of many new treatments and products; the ubiquitous and infinitely varied chains of amino acids twist into shapes that interact with cells, substances in the body, and other proteins, doing everything from interpreting DNA to controlling access to secure areas (“sorry, no potassium allowed”).
In the drug discovery and biotech world, proteins represent unlimited possibility — the right one could clamp onto cancer cells, facilitate natural healing processes, or prompt the creation of helpful substances. But finding and testing novel molecules is not easy — and a big part of that is sequencing, which confirms the exact makeup of the protein you’re trying to test.
Right now there are several large companies doing good business in the protein discovery world, and generally the process involves identifying the amino acid at the end of the protein chain, then snipping it off, identifying the next one, and so on until you’ve done the whole thing.
The trouble with this approach is that the protein’s shape or the molecular properties of the next amino acid in line can interfere with the process of binding to and identifying the one on the very end. As a result there’s a certain amount of uncertainty and a lack of unreliability inherent to the process.
Glyphic Biotechnologies changes that by adding a step where the target amino acid is detached first and then tethered nearby using a novel molecule called ClickP developed by one of the co-founders. A single stationary amino acid attached to a known molecule is much, much easier to identify, and when it’s done, the process repeats as before.
It’s briefly stated but the advance is significant. Current techniques in the antibody discovery space produce and inspect on the order of tens of thousands of proteins per week per (very expensive) machine. It sounds like a lot but with proteins essentially innumerable, it’s just a drop in the bucket. Even running 24/7 this rate doesn’t come close to satisfying demand.
Glyphic’s approach, utilizing ClickP and single-molecule microscopy (like that used by DNA sequencing giant Illumina), should be capable of millions to tens of millions per week, possibly climbing to billions in time. Even at the most conservative estimate you’re talking about orders of magnitude in improvement — those tens of thousands in the other techniques include lots of (perhaps mostly) repeat or junk information due to their use of B cell cultivation to produce the antibodies in question.
Image Credits: Glyphic Biotechnologies
Not only that, but because the ClickP process avoids the problem of interference from the next amino acid in the chain, it has way, way higher specificity and confidence. So you wouldn’t just be sequencing a hundred or a thousand times as many proteins, you’d be far more sure about the results.
At first Glyphic would be processing samples sent to them, but ultimately their tech could live in other labs as their competitors do now. Going from service to hardware sales and support is the current roadmap.
If everything works as advertised, Glyphic could be the new standard in protein sequencing just as demand skyrockets in the biotech world. To do so, though, it needs just a bit more time in the incubator.
The process they pioneered was the result of work done by co-founders Joshua Yang (CEO) and Daniel Estandian (CTO) at the lab of MIT’s Ed Boyden (on the team as “scientific founder”).
CTO Daniel Estandian, left, and CEO Josh Yang. Image Credits: Glyphic Biotechnologies
Yang explained that what stands between them and potential industry dominance is a mere matter of chemical engineering.
“My co-founder [Estandian] developed ClickP himself. The chemistry works,” he told me. “But as a spinout of an academic lab, we didn’t develop all 20 binders, because it would have bankrupted the lab. This isn’t an ‘off-the-shelf’ molecule.”
These binders are a bit like adapters that make the process work for each of the 20 amino acids. It takes time and money to engineer them, so they decided to show the system off with a handful first in order to get the cash to make the rest. “It’s really just about putting the time into getting them out there,” said Yang.
The $6.025 million seed round should finance the company through this early stage as it builds its platform. It was led by OMX ventures (which previously invested in 10X Genomics and Twist Bioscience), with participation from Osage University Partners, Wing VC, Artis Ventures, Cantos Ventures, Civilization Ventures, and Axial VC, and has an angel investor in Mammoth Biosciences CEO Trevor Martin.
Glyphic will be making its first home at Bakar Labs, the freshly inaugurated new Berkeley biotech incubator. There it will stay until it’s ready to take the next big step, likely hardware manufacturing next year on the back of an A round to be raised then. 2022 should then also see the company’s first paid services. And the antibody market, as large as it is, is only the beginning.
“Antibodies are just a starting point, as numerous applications can benefit from protein sequencing,” Josh explained in an email after we spoke. “Another high value area is in industrial biotechnology, where protein-sequencing-based screening of evolved enzymes can help identify enhanced or novel functions (e.g., better laundry detergents, waste-water treatment). Development of diagnostic tests would also benefit because, the more proteins you can sequence and identify in a sample set, the increased likelihood you can identify rare yet important biomarkers and/or develop a robust panel of biomarkers that together can detect or predict disease.”
A company like Glyphic may seem like a perfect target to get snapped up by one of the more deep-pocketed competitors out there, but Yang said they’re confident enough to ride it out.
“The activity in this space is insane. My co-founder and I really want to be the next Illumina or 10X Genomics — we really want to be that leader in proteomics.” And unless the competition has a few cards hidden up their sleeves, Yang’s ambition seems like a distinct possibility.
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SoftBank-backed Embark Veterinary valued at $700M after $75M Series B
Now that you have that COVID dog, Embark Veterinary wants to help him or her be in your life for a long time by offering DNA testing with the goal of curbing preventable diseases and increasing the lifespan of dogs by three years within the next decade.
The Boston-based dog genetics company raised $75 million in Series B funding in what the company is calling “the biggest Series B for a pet startup to date.” SoftBank Vision Fund 2 was the lead investor and was joined by existing investors F-Prime Capital, SV Angel, Slow Ventures, Freestyle Capital and Third Kind Venture Capital.
The new round boosts Embark’s total funding to $94.3 million since the company was founded in 2015, according to Crunchbase data. It also gives it a post-money valuation of $700 million, Embark founder and CEO Ryan Boyko told TechCrunch.
Boyko has been a dog lover all his life, and also interested in biology and evolution. Dogs, in particular, are fascinating to him because of their variety: they can be bred to be two pounds or 200 pounds, and come in all shapes and sizes. His interest led him to study dogs in order to understand their evolution.
“I began to think about health problems, and honestly, dogs are a better system for using genetics to better their health than humans,” Boyko said. “You can breed them, so genetics has as much power to cause health problems as it can improve quality and life.”
Embark’s dog DNA test retails for $199 and enables dog owners, breeders and veterinarians to personalize care plans based on a dog’s unique genetic profile. It can test for over 350 breeds and 200 genetic health risks, as well as physical traits. Similar to a 23andMe test, test users can learn characteristics about breed, health and ancestry.
For example, the test could show that a healthy dog may have a gene that predisposes them to slipped discs. If the dog has that, then weight management would be an important factor in their care regime, as would not allowing them to jump off the couch. Another common genetic risk is HUU, or Hyperuricosuria, which is elevated levels of uric acid in urine that could lead to bladder stones due to the way dogs process minerals. By changing the dog’s diet, it could reduce the risk for developing the stones, which are painful and expensive to treat, Boyko said.
The test’s technology revolves around proprietary genotyping technology that analyzes more than 200,000 genetic markers, currently two times more information than any other dog DNA test on the market, Boyko said. This gives Embark the world’s largest database of canine health and biological information, enabling the company to provide insights into certain conditions and make new discoveries about health risks, traits and breeds.
Embark aims to become the standard of care for dog owners and vets. It grew 235% between 2019 and 2020 and saw five times the sales over the past two years. To support that growth, the company intends to use the new funding to bring on key hires and expand its database. Boyko anticipates adding more than 100 employees between 2021 and 2022.
Boyko said the opportunity in the pet startup space is huge. Indeed, U.S. spending on pets reached nearly $100 billion in 2020, up from $95.7 billion in 2019, according to the American Pet Products Association.
At the same time, venture capital interest in U.S. pet-focused companies, from nutrition to travel to healthcare, grew 29.5% from 2019 and 2020, according to Crunchbase data. In addition to Embark’s funding, 2021 was good to other pet startups as well, including pet insurance company Wagmo, raising $12.5 million, connected pet collar company Fi received $30 million and Rover, which announced plans to go public via SPAC.
Lydia Jett, partner at SoftBank Investment Advisers, told TechCrunch that this was her first pet-based investment, and what Embark is doing brings advances to a category right now where people care about their pets enough that they want to do something that will expand their value of life.
Jett said the management team being dedicated to DNA-based analytics is the future, and Embark is starting this big curve when it comes to pets and the convergence of real emotional ties to pets and the ability to improve their lives.
“This company is a driver of change to happen,” she added. “We are the largest consumer investor in the world, and Embark is very much aligned with what we are seeing across our portfolio that consumers are revisiting priorities and choices. That is a major trend, but still early in the cycle of personalization for their pets.”
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Mark Cuban-backed Eterneva raises $10M to turn your loved one’s ashes into diamonds
The loss of a loved one is perhaps one of the most traumatic things a person can experience.
When it comes to memorializing someone after their death, most people think of planning funerals and/or picking out caskets or tombstones. And those things are typically done with the help of a funeral home.
Enter Austin-based Eterneva, which is building a rare direct-to-consumer brand in the end-of life space. The four-year-old startup creates diamonds from the cremated ashes or hair of people and pets. It’s a highly unusual business but one that seems to be resonating with people seeking a way to keep a piece of their loved ones close to them after their death.
Since its inception, Eterneva has seen triple-digit growth in sales — including in 2020, when it more than doubled its revenue, according to CEO and co-founder Adelle Archer. And today, the company is announcing an “oversubscribed” $10. million Series A funding round led by Tiger Management with participation from Goodwater Capital, Capstar Ventures, NextCoast Ventures and Dallas billionaire Mark Cuban. (For the unacquainted, Tiger Management is the hedge fund and family office of Julian Robertson from which Tiger Global Management descended.)
“It was an extremely competitive round,” Archer told TechCrunch. “We received three term sheets and were able to put together an all-star investment group.” That investment group included Capstar Managing DIrector Kathryn Cavanaugh, who also joined Eterneva’s board; Lydia Jett — one of the top female partners at Softbank overseeing their $100 billion Vision Fund and Kara Nortman, managing partner at Upfront Capital, one of the first women to make managing partner at a VC fund and co-founder of Angel City with actress Natalie Portman.
Archer and co-founder Garrett Ozar launched Eterneva in the first quarter of 2017 after working together at BigCommerce. The company’s origin story is a very personal one for Archer. Her close friend and business mentor, Tracey Kaufman, was diagnosed with pancreatic cancer and ended up passing away at the age of 47. With no next of kin, Kaufman left her cremated ashes to her aunt, best friend and Archer.
“We started looking into different options but all the websites we landed on were so lackluster, somber and overwhelming,” Archer recalls. “Tracey was the most amazing person, and I felt like when you lose remarkable people, you needed better options to honor and memorialize them.”
At the time, Archer was working on a lab-grown diamond startup. Over dinner with a diamond scientist during which she was discussing her mentor’s death, the scientist said, “Well, you know Adele, there is carbon in ashes, so we could get the carbon out of Tracey’s ashes and make a diamond.”
The thought blew Archer’s mind.
“I knew that I had to do that, 100%. Tracy was such a vibrant person, it suited her so perfectly,” she said. “And I’d have a part of her with me all the time.”
Eterneva co-founders Garrett Ozar and Adelle Archer. Image Credits: Eterneva
It was the first diamond ever created by Eterneva, and it gave Archer a chance to be a customer of her own product, which she believes has helped in building an experience for her other customers. Soon, she became “fully focused” on the idea, which she viewed as a way to give grieving people “brightness and healing and a beautiful way to honor their loved ones.”
Since inception, Eterneva has created nearly 1,500 diamonds for over 1,000 customers. It can do colorless or nearly any color including black, yellow, blue, orange and green. The entry price for an Eterneva diamond is $2,999 and that goes up based on the size and color. Pets make up about 40% of Eterneva’s business.
“We view ourselves as the complete opposite tone of everything else in this space,” Archer said. “A lot of people are trying to solve planning and logistics around the end of life. We’re about helping people move forward, and building a platform for the celebration of life.”
The process to create the diamond is intricate, according to Archer, taking 7 to 9 months. The intent is to bring the customer along the journey by sharing the process with them at each stage through videos and pictures.
“We do it in parallel with their processing grief, which is super isolating,” Archer said. “They are usually in a different place with their grief than when they first started.”
One of the plans with the new capital is to enable more people to participate in person with the process, such as starting the machine work, or telling the jeweler stories about their loved one and coming up with a custom design that might have little details that represent aspects of their loved one’s life.
The company also plans to use the money to scale their funeral home channel program nationwide via Enterprise partnerships and scaling its operations and capacity in Austin so it can keep up with demand.
Eterneva is banking on the fact that more and more “people don’t want traditional funerals anymore.”
“They want personalization and meaning,” said Archer. “We plan to evolve the platform with different products and services down the road.”
The startup also wants to continue to build awareness around its brand. Recently, it’s seen more than a dozen videos on TikTok about its diamonds go viral, according to Archer.
Prior to the Series A, Eterneva had raised a total of $6.7 million from angels and institutions. Its seed round was a $3 million financing led by Austin-based Springdale Ventures in 2020. Mark Cuban first became an investor in the company when Archer and Ozar appeared on “Shark Tank.” Cuban took a 9% stake in the company in exchange for a $600,000 investment. Despite claims that the company was a scam, Cuban has stood by the science behind it and put money in the latest round as well.
Via email, he told TechCrunch he views an Eterneva diamond as “a unique, socially responsible way to stay connected to loved ones.”
“There is still so much upside and growth in their future,” Cuban wrote. “So I doubled down.”
He went on to describe the creation of diamond from the hair or ashes of a loved one as “such an intense personal commitment.”
“Eternava takes a very emotional and difficult [time] and helps people walk through their journey in a trusted way that I don’t think anyone else can come close to,” Cuban added.
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Sila banks $13M to offer single API for developing financial products, services
Sila announced Monday it raised $13 million in Series A funding for its banking and payment platform that gives software teams tools to build the next generation of financial products and services.
Revolution Ventures led the round and was joined by existing investors Madrona Venture Group, Oregon Venture Fund and Mucker Capital, as well as Wise co-founder Taavet Hinrikus. The funding brings the total investment to date for Portland, Oregon-based Sila to $20 million.
The company was founded in 2018 by Shamir Karkal, Angela Angelovska, Isaac Hines and Alex Lipton to simplify digital payments and storage in a regulatory compliant way and build on blockchain technology. CEO Karkal has a long history in the fintech space, co-founding Simple, an app unifying various accounts into one accessible bank card, in 2009. It was acquired by BBVA in 2014 for $117 million and shuttered earlier this year.
Karkal told TechCrunch that the idea for Sila was born out of frustration while starting another bank. He saw a need for financial application development, but was hindered by a banking system “still stuck in the 20th century.” He thought consumers expected a different level of service, which is why many flock to fintechs.
However, whenever a business tried to connect existing banking systems, fintechs and cryptocurrency innovators, as it built and scale, would always run into technology and compliance issues, Karkal said.
“The problem with working with banks, is that you have to figure out how to integrate with their mainframe,” he added. “In the process, you end up having to also be compliance experts just to be able to do it.”
Whereas it took Karkal three years to get bank processes set up for other companies, it took Sila 18 months. Its banking APIs enable developers to create their own digital wallets, replacing the need to integrate with legacy financial institutions. Sila also has partnerships with fintech platforms, including Plaid, Alloy, Lithic and Arcus to move money, and is backed by Evolve Bank and Trust.
Sila can now get customers up-and-running in six to eight weeks. And unlike competitors that focus almost exclusively on e-commerce, most of Sila’s customers are doing regulated payments within the fintech, insurtech, commercial real estate and cryptocurrency spaces that tend to be more complex from a compliance basis, Karkal said.
Since the company launched its platform, business was building steadily, and took off in the second half of 2020. The company raised a $7.7 million seed round earlier in the year. In the last 12 months, Sila grew its revenue 10 times and customers’ end users grew over 500% in the last seven months.
Sila will use the new funding to increase headcount, target additional partners and expand product features, including its Ethereum MainNet stablecoin issuance and interoperability between FedWire and the Nacha Automated Clearing House network.
“There is a massive wave of fintechs emerging in the U.S., and we have barely scratched the surface,” Karkal said. “Places like India, Africa and Latin America could accelerate at the same time because they are mainly starting from zero. We are here to ‘arm the rebels’ and help those innovators build applications to give all end users a much better financial experience.”
As part of the investment, Clara Sieg, partner at Revolution Ventures, is joining the company’s board. She told TechCrunch she met the company’s co-founders through the Portland ecosystem.
Revolution tends to look at fintech startups from a consumer angle. Recognizing that the problem with building infrastructure meant dealing with banks, the firm set out how to find a company building the pipes to solve it, she said.
In the landscape of fintech, she considers Dwolla to be a competitor to Sila. Last week, the company raised $21 million to continue developing its API that allows companies to build and facilitate fast payments, specifically with a focus on ACH. However, it comes down to actually signing up customers, and that competitive landscape is pretty thin, Sieg added.
“Sila is building an easy way for people to program money and taking a regulatory eye to things,” Sieg said. “When Shamir was building Simple, he could see how challenging it was for incumbents to provide the tools developers need to embed financial services, and this is why we have confidence in his ability to win.”
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NotCo gets its horn following $235M round to expand plant-based food products
NotCo, a food technology company making plant-based milk and meat replacements, wrapped up another funding round this year, a $235 million Series D round that gives it a $1.5 billion valuation.
Tiger Global led the round and was joined by new investors, including DFJ Growth Fund, the social impact foundation, ZOMA Lab; athletes Lewis Hamilton and Roger Federer; and musician and DJ Questlove. Follow-on investors included Bezos Expeditions, Enlightened Hospitality Investments, Future Positive, L Catterton, Kaszek Ventures, SOSV and Endeavour Catalyst.
This funding round follows an undisclosed investment in June from Shake Shack founder Danny Meyer through his firm EHI. In total, NotCo, with roots in both Chile and New York, has raised more than $350 million, founder and CEO Matias Muchnick told TechCrunch.
Currently, the company has four product lines: NotMilk, NotBurger and NotMeat, NoticeCream and NotMayo, which are available in the five countries of the U.S., Brazil, Argentina, Chile and Colombia.
The company is operating in the middle of a trend toward eating healthier food, as more consumers also question how their food is made, resulting in demand for alternative proteins. In fact, the market for alternative meat, eggs, dairy and seafood products is predicted to reach $290 billion by 2035, according to research by Boston Consulting Group and Blue Horizon Corp.
NotCo’s proprietary artificial intelligence technology, Giuseppe, matches animal proteins to their ideal replacements among thousands of plant-based ingredients. It is working to crack the code in understanding the molecular components and food characteristics in the combination of two ingredients that could mimic milk, but in a more sustainable and resourceful way — and that also tastes good, which is the biggest barrier to adoption, Muchnick said.
“Our theory is that there is a crazy dynamic among people: 60% who are already eating plant-based are not happy with the taste, and 30% of those who drink cow’s milk are waiting to change if there is a similar taste,” he added. “Our technology is based in AI so that we can create a different food system, as well as products faster and better than others in the space. There are 300,000 plant species, and we still have no idea what 99% of them can do.”
In addition to a flow of investments this year, the company launched its NotMilk brand in the United States seven months ago and is on track to be in 8,000 locations across retailers like Whole Foods Market, Sprouts and Wegmans by the end of 2021.
Muchnick plans to allocate some of the new funding to establish markets in Mexico and Canada and add market share in the U.S. and Chile. He expects to have 50% of its business coming from the U.S. over the next three years. He is also eyeing an expansion into Asia and Europe in the next year.
NotCo also intends to add more products, like chicken and other white meats and seafood, and to invest in technology and R&D. He expects to do that by doubling the company’s current headcount of 100 in the next two years. Muchnick also wants to establish more patents in food science — the company already has five — and to explore a potential intelligence side of the business.
Though NotCo reached unicorn status, Muchnick said the real prize is the brand awareness and subsequent sales boost, as well as opening doors for quick-service restaurant deals. NotBurger went into Burger King restaurants in Chile 11 months ago, and now has 5% of the market there, he added.
Sales overall have grown three times annually over the past four years, something Muchnick said was attractive to Tiger Global. He is equally happy to work with Tiger, especially as the company prepares to go public in the next two or three years. He said Tiger’s expertise will get NotCo there in a more prepared manner.
“NotCo has created world class plant-based food products that are rapidly gaining market share,” said Scott Shleifer, partner at Tiger Global, in a written statement. “We are excited to partner with Matias and his team. We expect continued product innovation and expansion into new geographies and food categories will fuel high and sustainable growth for years to come.”
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Spinn taps into $40M to create better coffee brewing, discovery experiences
When you are a coffee lover, taste matters, and Spinn is brewing up some fresh funding in the way of a $20 million funding round, led by Spark Capital, to bring connected coffee to new customers through its hardware-enabled coffee marketplace.
Joining Spark in the round were Amazon’s Alexa Fund, Bar 9 Ventures and existing investors. It gives the Los Angeles-based company a total of $37 million in funding to date, CEO Roderick de Rode told TechCrunch. He isn’t defining this round, but said Spinn previously raised both Series A and B rounds.
“SPINN is doing for coffee what Dyson did for vacuums and what Nest did for homes, rethinking technology and connectivity for better results,” said Kevin Thau, general partner at Spark Capital, in a written statement. “Their approach, from machine design to roaster assortment, is elevating the entire industry and delivering what consumers seek today: delicious tasting coffee brewed to their personal preferences, with the smallest impact on the planet.”
Spinn debuted its centrifugal brewing method at TechCrunch’s Startup Battlefield in 2016. The connected coffee maker uses centrifugal force to spin, instead of press, coffee grounds. De Rode says this results in a cup of coffee tasting how it was intended by the roaster. The machines can be controlled via voice command from Amazon’s Alexa or a single tap on the machine or from a mobile app.
A survey released in April by National Coffee Association USA found that the global pandemic was the driver for 85% of Americans drinking at least one cup of coffee at home, up 8% from January 2020. Nearly 60% of Americans drink coffee every day, and one-quarter purchased a new home coffee machine over the past year.
In addition to Spinn, other startups are coming out with machines aimed at making a better cup; for example, Osma is a new coffee-making technique to make a strong espresso-like drink at any temperature, including icy cold.
Spinn itself has three coffee makers to choose from that retail for $479 to $799, according to its website. The machines don’t require any filters or coffee pods and make a variety of styles, including espresso, Americano, drip and cold brew.
The marketplace offers over 1,500 different kinds of coffee from more than 500 artisan roasters around the world. Customers add their coffee choices to a playlist of sorts, which can be specifically curated to ship or scheduled randomly, de Rode said. Drinkers can leave reviews and get recommendations, as well as take a quiz to match with various coffees.
He plans to use the new funding to further grow and develop its patented brewing technologies, and complete delivery of outstanding pre-orders.
Though de Rode wouldn’t go into specifics about Spinn’s growth metrics, he said there has been triple-digit growth from home users. He aims to do for coffee what Vivino did with wine: provide educational content about the coffee options and the roasters themselves.
“The coffee industry is becoming a food thing just like wine,” de Rode said. “People want to understand the different kinds of beans to make more sophisticated choices. We try to bridge the gap between the coffee shop and home.”
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One of Nigeria’s high-profile angel investors is launching a fund for African startups
Olumide Soyombo is one of the well-known active angel investors in Nigeria tech startups and Africa at large. Since he began angel investing in 2014, Soyombo has invested in 33 startups, including Stripe-owned Paystack, PiggyVest and TeamApt.
Today, the investor is announcing the launch of Voltron Capital, a Pan-African venture capital firm he co-founded with Abe Choi, a U.S.-based entrepreneur and investor.
Voltron will be deploying capital to roughly 30 startups, mostly in pre-seed and seed stage across Africa, in a bid to “address the severe lack of access to early-stage funding for African tech companies.” The ticket sizes will range from $20,000 to $100,000, focusing on startups in Nigeria, Kenya, South Africa and North Africa.
Soyombo is one of the few founder-cum-investors on the continent, despite his company not being the traditional VC-backed startup the world has become accustomed to. In 2008, he started Bluechip Technologies with a friend, Kazeem Tewogbade as an enterprise company that provides data warehousing solutions and enterprise applications to banks, telcos and insurance firms. Some of its biggest clients include OEMs like Oracle.
Non-traditional startup founder to an angel investor
Six years later, the pair decided to venture into tech, a relatively nascent industry in Nigeria at the time and began investing in startups via LeadPath, an early-stage firm they launched in Lagos, Nigeria. The idea was to invest $25,000 and take the startups through a three-month accelerator program culminating in a demo day. The plan was to run LeadPath like Y Combinator but it didn’t take off as planned.
“In 2014, three months after we found out that there was no investor to put them in front of. So you’d have to write another check yourself,” Soyombo said humorously over the phone. “We quickly saw that the accelerator model didn’t work, so we started investing individually. It’s funny how things have changed since then.”
LeadPath became a special purpose vehicle (SPV) for the pair to carry out their angel investing deals. Over the years, Soyombo has launched several SPVs for the same purpose. So, why do things differently now by creating a fund? Soyombo walks me through one of the processes he has used to fund deals over the years to answer this question.
As an influential figure in Nigeria’s tech ecosystem, Soyombo has access to almost any important deal in the market. “I get the privilege of seeing many deals before most people see them. I’ve built that network within the startup ecosystem and reputation as an angel always ready to help. So obviously, that helped me see many deals very quickly,” he said. Often, his deal flows are filled with startups seeking six-figure pre-seed to seed investments. Say, for instance, a founder is looking to raise $300,000, Soyombo can typically invest $50,000 of his own money. And based on his perception of the startup’s growth prospects, he can choose to bring his friends and acquaintances on board to fill the round.
This informal approach is what Soyombo wants to make formal via a structured format where each individual or organizational LP gets access to his deal flow simultaneously. The investor believes companies will get capital quicker this way. And the interesting bit is that his work in corporate Nigeria has allowed him to access non-traditional capital, which means some of the investors that use Soyombo’s deal flows are outside the typical Nigerian tech investing landscape.
He sees his job as someone bridging the gap of angel investing between his corporate friends and colleagues who have not typically invested in tech and startups that need their money.
“There’s a bit of FOMO now,” he said. “People, including high net worth individuals, tell me to carry them along anytime I’m investing, and then I have startups looking for capital as well. But then again, I’m not trying to get a full job by managing a full fund, which is why we’ve structured it this way.”
Anyone familiar with the happenings in African tech these past few months knows the two events that have caused this FOMO: Paystack’s exit to Stripe and Flutterwave’s unicorn status. Soyombo was an early investor in the former, marking his solitary primary exit alongside two secondaries within a portfolio that have cumulatively raised over $70 million. Thus, it’s not hard to see why Soyombo isn’t having a hard time convincing non-traditional investors, including HNIs (who are notoriously risk averse when it comes to tech investing), to write checks in startups.
“All of a sudden, everyone is interested in what’s happening in the space. The HNIs that would’ve thrown money into real estate are looking for startups. We even see older HNIs telling their children to invest on their behalf, so it’s an easier conversation to have. Most of them want to diversify their portfolio by having a piece of that pie,” he said, pointing to Paystack and Flutterwave successes.
Abe Choi (co-founder, Voltron). Image Credits: Voltron Capital
Voltron Capital will be managed on AngelList. Its investors cut across HNIs and executives from banks, telcos, among other sectors, each investing a minimum of $10,000. Voltron is similar to a typical seven-figure fund targeting pre-seed and seed-stage startups in Africa, yet it’s quite different in the way it chooses to back founders. The fund remains an embodiment of Soyombo’s investment stance, which is “founders-first regardless of the industry.”
“I’m going to continue backing interesting entrepreneurs. If Odunayo of PiggyVest was building a health tech or edtech company, I’ll still back that company,” he said, referring to the $1 million investment he made three years ago in one of Nigeria’s widely celebrated fintechs. “So I think the investability of sectors, for me, is driven by quality entrepreneurs that are going to solve problems in that area.”
Early-stage investing needs more work
In 2019, African tech startups raised a record $2 billion, according to Partech Africa. They have raised half that number already this year, and some publications predict these startups will break 2019’s record.
A large chunk of these investments goes into late-stage deals, which is typical of most tech ecosystems globally. But Africa stands out because early-stage startups find it more difficult to raise investments compared to other regions. For instance, IFC reported that 82% of African tech startups cite access to seed funding and a lack of angel investors as major problems they face. Without early-stage funding, many of the startups primed to drive this growth are missing out on vital capital to support their early operations and generate revenue, which is a key requirement for securing later rounds of funding and a larger scale.
Voltron, in its little capacity, wants to fill this gap in the best way it can. Besides listing local investors as LPs, Soyombo says startups will be able to access foreign capital too. Choi is the key to making that happen. Personally, Choi has invested in 15 startups (exiting two); therefore, his experience and network in the U.S. will be crucial in sourcing foreign capital into the continent.
Soyombo believes Stripe acquisition of Paystack has made foreign investors take notice of African startups. He humorously references Paul Graham’s tweet after the acquisition as another reason why foreign investors’ interests have also piqued. The tweet from the Y Combinator co-founder read: “Investors who ignore Nigeria now have to ask themselves: What do I know that Patrick Collision doesn’t?”
That said, the investor holds that the pace at which the African tech ecosystem is maturing should excite anyone. The quality of founders on the continent is improving and will continue in that manner because there are more problems to solve, he continued.
“Also, as our startups mature, we’ll see people leaving to set up theirs. We want the next wave of African tech success stories to not only make an impact on the continent but to be truly global; through Abe’s strategic connections to the USA, we’re confident we can provide our portfolio with the best possible opportunities to achieve this through our U.S. and global network.”
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Pro tips from the team behind Kickstarter’s most funded app
Here at memoryOS, we have a saying we repeat often: “Most of the Kickstarter happens before the actual Kickstarter.”
Preparation is the key. But even if you understand that most of the work is done in advance, you should still prepare yourself for some sleepless nights after the launch date. The usual startup mantra will apply to your crowdfunding campaign just as well: Measure, analyze and adjust along the way.
As you may know, crowdfunding fits some B2C products better than it does others. So to give you our product context here, memoryOS is a gamified app that teaches memorization skills with the help of virtual mind palaces and interactive microlessons taught by our co-founder, two-time World Memory Champion, Jonas von Essen.
Image Credits: memoryOS (opens in a new window)
Before becoming the most funded app on Kickstarter and getting it 6,400% funded (and carrying it further to the Indiegogo platform right after), we spent countless hours researching down the rabbit hole of crowdfunding tips and tricks. We also had calls with several top-tier crowdfunding project creators who were kind enough to answer our questions and share bits of knowledge from their experience.
We’re sharing our approach (and secrets) to building a successful crowdfunding campaign because we know just how tough it can be to launch your own product. So here is a complete 10-step guide:
Find a unique idea
You should have a unique idea for a product that would solve at least one problem for your target audience. The proven approach is to set two major hypotheses right at the start and then work on getting them tested:
- Does your product work and solve the problem as intended, and is it better than what’s out there? This is usually referred to as the “proof of concept” stage.
- Are there enough people who are willing to pay for your product for you to build a sustainable business?
You will need to build a base prototype to test the first hypothesis and, if it works, you can then work on turning it into an MVP or a short demo version for your future commercial product. You can then get people to test it for free and prepay for the full version.
Getting people to actually back their interest with their wallet means you already have customers, not merely enthusiasts, and it significantly increases the chances of a successful project.
Yes, it’s important that you get people to pay a minimum reservation deposit at this point and receive their commitment to pay the remaining amount for the full product later on. Getting people to actually back their interest with their wallet means you already have customers, not merely enthusiasts, and it significantly increases the chances of a successful project.
Get user feedback
As soon as you have something to test, conduct short surveys to better understand your customers by gathering and analyzing the reasons why and for what purpose(s) they would want your product.
Here at memoryOS, we called the first couple thousand of our leads and had many insightful conversations to help us connect to our audience on a more personal and emotional level.
Once you have a demo or prototype for the users to test, make sure to add a feedback form right at the end of their experience (or gather feedback using Google Forms for surveys, or via email inquiries).
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