What do you call the grey area between a Series A and a Series B? In 2020, when the money is taken on opportunistically, you call it a Series A-1 extension, according to Teampay. Even if the new capital was raised at a new, higher valuation.
At least that’s what Teampay CEO Andrew Hoag has done with his company’s new $ 5 million investment, adding it onto its September, 2019-era Series A. TechCrunch covered that round, and the company’s $ 4 million seed round in 2018, keeping tabs on the corporate spend-management company as it grows.
Indeed, Teampay has posted big growth since its Series A was announced, pushing its annual recurring revenue (ARR) up by 320% and its total spend managed up by 800%. The first number implies that it has managed to monetize well as its usage, the second number, has spiked.
Teampay, Hoag said in an interview, wants to help companies control their bank accounts. This has gotten harder in 2020, as companies went from having an office with many employees to many employees in home offices. The rising complexity of running companies in the aftermath of COVID-19 and its economic disruptions has been a boon for the startup, with Teampay seeing its sales cycle cut in half, the CEO said, and bigger companies coming to its door, looking for help.
The startup targets the midmarket with its spend software, helping companies control what Hoag views as a business process problem, not merely an ability-to-spend issue. Teampay doesn’t want to reinvent the corporate card, but instead provide a set of tools to help companies manage their outflows, no matter what format they take (ACH, virtual cards, etc.).
So unlike Divvy, say, or Brex, Teampay generates most of its income from software fees instead of interchange revenues, though the company did tell TechCrunch that it has room to derive more revenues from spend over time. On the topic of competition, Teampay has lots in various forms. Brex and Ramp and Divvy and Airbase, not to mention old-guard products like Concur and Expensify, are in the market.
But with a fresh $ 5 million led by Fin Venture Capital and participated in by prior investors like Crosscut, and Tribe, and the ubiquitous Precursor, Teampay has new ammunition with which to go hunting.
With this raise, Teampay has now raised $ 21 million in known equity financing to date. I asked Hoag why the new round is not simply called a Series B. He said that the letter-series round demarcations have lost some of their specificity in 2020 (true), undercutting the main thrust of my quibble, and that this round was too small to be called a Series B (also true).
Instead, he said, Teampay pulled forward a bit of its future Series B on the back of big growth, presumably to help the company do more today in anticipation of its later, more traditionally sized next round.
TechCrunch has covered aggressive extension rounds in recent months, putting Teampay in good company with firms that are doing well, leading to their taking on more capital to go even faster. Let’s see how much further it can amp its ARR before its real Series B.
Though the COVID-19 pandemic hasn’t completely eased all over the world, several tech startups in Europe have already started focusing on their growth. Besides, many promising tech startups have also secured funding and are focused on their expansion.
European tech startups weekly
As a part of a weekly roundup, here is a list of some of the most important tech startups that have hit the headlines in Europe this week.
Image credit: TechSee
Intelligent visual assistance for customer support
Israeli-based TechSee, an intelligent visual assistance company, has raised $ 30M (approx €25.6M) in its Series C round for funding co-led by OurCrowd, Salesforce Ventures, and TELUS Ventures with participation from Scale Venture Partners and Planven Entrepreneur Ventures.
TechSee was founded in 2015 by Eitan Cohen, Amir Yoffe, and Gabby Sarussi. It is a technology and technical support company that specialises in visual technology and augmented reality (AR). The company’s technology combines AI with deep machine learning, proprietary algorithms, and big data to deliver a scalable cognitive system that becomes smarter with every customer support interaction.
The company offers a smart visual interactive platform that enables its users to interact with their customers through a live virtual channel and guide them using AR and annotations.
Image credit: Authentic Vision
A startup that provides anti-counterfeiting solutions
An Austrian-based technology startup that provides anti-counterfeiting solutions, Authentic Vision, has raised $ 5M (approx €4.2M) in its Series B round of funding from Custos Privatstiftung (Austria), Dolby Family Ventures (USA), Gronova Vision (UAE), TAKKT AG (Germany), and business angels.
Founded in 2012 by Thomas Weiss, Authentic Vision provides anti-counterfeiting and authentication technologies to protect businesses as well as end consumers. The company’s holographic fingerprint tag, mobile authentication app, and real-time analytics capabilities protect physical assets from counterfeiting and alert brand and product owners to potential fraudulent activity.
Image credit: Keyrock
Fintech startup raises €4.3M
Brussels-based fintech startup Keyrock has raised €4.3M in a fresh round of funding from SIX Fintech Ventures and MiddleGame Ventures. Existing investors Volta Ventures, Seeder Fund, and TNN Patrimony also participated in this round.
The company aims to accelerate its efforts to build efficient markets for digital assets.
Founded in 2917 by Jeremy De Groodt, Juan David Mendieta, and Kevin de Patoul, Keyrock develops crypto-asset financial infrastructure. It uses in-house algorithmic trading bots and high-frequency trading infrastructure to supply market making and liquidity services to the cryptocurrency ecosystem.
USA-based technology company Apple has reportedly acquired an artificial intelligence startup Vilynx for approximately €42.8M, which Apple plans to use to improve Siri and other apps. Currently, the Vilynx website is inactive.
Founded in 2011, Vilynx provides APIs to develop dashboards that deliver information about how viewers consume videos, including which portions of the video have the most views and which are not getting attention. Thus Vilynx delivers a strong vertical solution for media and entertainment (digital content) that provides extremely relevant and unique information to maximize audience engagement and increase ad revenue.
According to the report, the acquisition will also deepen Apple’s AI expertise, as 50 engineers and data scientists will be joining from Vilynx, and the startup’s Barcelona office set to become one of Apple’s key AI research hub in Europe.
Image credit: EMH Partners
New €650M fund
European firm EMH Partners (EMH) has raised €650M for its Growth Fund II focused on midsize companies across the DACH region of Germany, Austria, and Switzerland.
The first Growth Fund, which was closed in 2017, was about €350M. EMH is thus expanding its successful medium-sized company strategy.
EMH Partners is an owner-led investment firm by entrepreneurs for entrepreneurs. The private equity company has invested mainly in the DACH region and supports the growth of Mittelstand companies with capital, digitalisation, and expansion expertise. EMH Partners invests in market-leading, owner-managed companies to accompany them in partnership during the next growth phase. Currently, it manages more than €1B of committed capital.
Image credit: Toka
Israeli cyber defense company raises €21.4M
The Israeli-based cyber defense company, Toka, has raised $ 25M (approx €21.3M) in its Series B round of funding led by Eclipse Ventures. Existing investors including Andreessen Horowitz, Dell Technologies Capital, Entree Capital, and others also participated in this round.
Toka was founded in 2018 by Alon Kantor, Kfir Waldman, and Yaron Rosen. The company helps trusted government, law enforcement, and security agencies keep citizens safe and defend against terror and crime by developing cutting-edge and lawful intelligence-gathering tools.
According to the company, its software platforms are simple to use, scale quickly, and offer complete operational control to enable smarter, faster, and easier investigations and operations.
By empowering agencies with these intelligence capabilities, Toka helps governments maintain a technological edge to enhance their operational effectiveness and save lives.
The raised capital will be used to further Toka’s efforts to develop lawful intelligence-gathering platforms and products and advise governments on building an integrated cyber defense.
Image credit: InnovoPro
Protein from chickpea
Based in Raanana, north of Tel Aviv InnovoPro, the plant-based ingredients innovator specialising in innovative chickpea proteins, has raised $ 18M (approx €15.3M) in a fresh round of funding.
The Rabo Food & Agri Innovation Fund, part of Rabobank’s investment arm Rabo Corporate Investments, joined InnovoPro’s B round funding.
The deal was led by Jerusalem Venture Partners (JVP), Israel’s leading VC fund, and also included in its second closing ICOS Capital, collaborative VC firm, and iAngels, Israel’s influential angels investment platform.
InnovoPro was founded in 2015 by Dr. Ascher Shmulewitz. The company developed a proprietary extraction process to concentrate protein from chickpea, a functional protein that can be served as a clean label enabler for plant-based products including dairy-free yogurts, vegan ice cream, veggie burgers, and energy bars.
The company claims to the only one in the world to develop and launch a revolutionary 70% protein concentrate from chickpeas, with exceptional properties of a neutral taste, high functionality, and high nutritional values.
Image credit: Odaseva
Cloud Trust Platform for organisations
Odaseva, a San Francisco-based Enterprise Cloud Trust Platform for organisations with business-critical cloud deployments, has raised $ 25M (approx €21.3M) in its Series B round of funding. This brings the company’s total funding to $ 40M (approx €34.2M).
The round was led by Eight Roads Ventures with new investor F-Prime Capital as well as participation from existing investors Partech, Salesforce Ventures, and Serena.
The company will use the funds to further develop its core Enterprise Cloud Trust Platform offering, supporting platforms including Salesforce, Microsoft 365, and more. It will also accelerate hiring in its San Francisco, Sydney, and Paris offices. Besides, the company will also invest in an ecosystem of users and partners, extending the long-standing commitment to develop & teach the best practices of enterprise cloud data protection.
Launched in 2012 by Sovan Bin, Odaseva is a unified cloud data protection, compliance, and operations platform for enterprises running Salesforce. The company delivers enterprise-class data governance, providing data protection (backup and recovery, archiving, governor limits monitoring), data compliance for regulatory requirements such as GDPR and data operations (Salesforce DX data extensions).
Coronavirus cases in the United States are reaching new peaks. E-commerce is continuing to boom. And B8ta, a San Francisco startup which is betting on the future of physical retailers, is doubling down on its in-person footprint.
B8ta offers shelf space to unique digital products, such as electric skateboards or a coffee alarm clock, on behalf of brands that want a physical presence. Today, the company acquired a 1-year old company doing the same for direct to consumer businesses, Re:store.
Backed by Sequoia and SPC, Re:store has a three-story physical location in Maiden Lane in San Francisco and hosts products ranging from beauty, to consumer electronics to lifestyle products. It also has a community co-working space.
The Re:Store community hub.
“The pandemic has emphasized the need for brands to be flexible with their product mix and distribution,” says Selene Cruz, CEO of Re:store. “Some products do well in these times, and brands in a retail-as-a-service model can adapt their offering a lot faster than those in a traditional wholesale model that relies on buying cycles.”
It’s the high-touch startups that are expected to struggle during this time, as rising virus rates threaten the global economy. But, as today’s deal shows, both B8ta and Re:store are bullish on in-person shopping long term.
In fact, in March, B8ta CEO and co-founder Vibhu Nordy penned an extensive Twitter thread in favor of keeping his startups’ stores open, noting that closures would require the company to lose millions and send tens of thousands of employees home. B8ta’s entire value proposition is based on high-touch interactions, and a world in which consumers want to try and experience their products before they buy them.
At b8ta, we are in the business of physical retail stores. While we sell products online, our stores are the reason for our existence. We encourage our shoppers to touch and try all of the products at b8ta. We are truly in the business of touch and human-to-human relationships.
“I feel like we’ve lived through three lifetimes since I wrote that thread back in March,” Nordy said, noting that it’s been an “extremely difficult year” for the company. However, the Re:store acquisition comes off of new momentum he’s seen since B8ta was able to safely reopen its stores in May.
“We launched more brands last quarter than any other in our history,” Nordy said. “The traditional retail model and traditional real estate model has completely collapsed and brands are looking for something better.” To note, Macy’s, which has backed B8ta, narrowly dodged bankruptcy by securing a $ 4.5 billion lifeline in financing to temper down sales.
Image Credits: b8ta
B8ta’s Re:store acquisition is a response to a rebound among physical retailers, one that favors an experience instead of a catalog of aisles. A focus on creative in-person experiences versus department stores is an acceleration of a pre-pandemic trend. As direct-to-consumer investors told us in late March, companies can’t depend on a few channels for customer acquisition. As the field gets crowded, brands are looking to stand out, and stores like B8ta and Re:store could help them do that.
To balance out some of B8ta’s bullishness, Nordy did note that “on the shopping side, visitation is way down but sales have almost come back to where they were pre-pandemic.” In other words, people are buying B8ta products online without the physical presence, which means that online platforms are still a preference for consumers.
Lunchbox, cofounded by Nabeel Alamgir, helps restaurants develop digital ordering experiences on their own websites and apps, reducing the reliance on third-party platforms that charge debilitating commissions at a time when restaurants are struggling for survival. Alamgir walks us through Lunchbox and how it plans to use this recent funding to scale its team, provide more products that will level the playing field for restaurants, and the company’s recent funding (at a reported $ 100M valuation) from investors that include Coatue, Tom Colicchio, Scott Belsky, Michael Vaughn, Robert Early, Bryan Ciambella, and Reshma Saujani. AlleyWatch
Every aspiring entrepreneur I know is talking about the fact that there are over 2,000 billionaires in the world today, and how their innovative idea could make them one of the next ones. Most of you prefer to ignore the feedback from analysts that your chances of creating the next unicorn startup may be as low as one in five million. The big question is how you can beat these odds.
Based on my own experience in working with many successful, and some not so successful, entrepreneurs and business owners, I suggest that you start with an assessment of your own personal goals and interests, other than making money. Becoming an entrepreneur is actually a commitment to a new lifestyle, certainly very exciting, but also facing many unknowns and risks.
To help you focus, I have prioritized the following list of success principles, too often overlooked by otherwise smart people, blinded by dollar signs, who jump in before they consider the consequences and alternatives:
Find a unique niche you love which adds real value. Offering one more social media site (over 200 already exist on Wikipedia) probably won’t work. I suggest looking for painful problems to solve, rather than “easier to use” or “nice to have” solutions, for customers with money. Look for needs that have a global appeal to a wide demographic.
Highlight your credentials as an insider or influencer. Customers line up to believe and buy from people who are viewed as leaders or experts relative to a specific solution. Don’t forget to market yourself before, during, and after your initial idea, through social media, websites, and events. Get support from credible industry groups and partners.
Focus on a solution that is scalable world-wide. Products that can be easily produced and sold via multiple channels, including the Internet, are more easily scaled world-wide. Global considerations include culture differences and translation. Specialized services, such as accounting, require skilled people, training, and tools, and do not scale well.
Collaborate with customers to tune your solution. Customer feedback, including blog comments, usability reviews, and early user testimonials, build relationships and provide credible marketing to the broader customer community. Your solution must have value for every customer. Strive to make real customers your best advocates for the initial rollout.
Minimize one-time sales in your business model. You need a stable customer base with an automatically renewing revenue stream, such as the subscription model. This reduces the cost of customer acquisition, allows easy upgrades for service and new features, and improves customer loyalty in the face of new competitors in the market.
Facilitate rapid growth through contracted resources. Minimize permanent hiring and customized operational facilities. In this age of the gig-economy, you can more quickly hire and manage freelancers, contract workers, and contract operations. Every new business has unexpected pivots and adjustments, and outsourcing is easier to manage.
Take advantage of low-cost modern tools and automation. Use open-source e-commerce and website software, including web-chat software and PayPal, rather than building expensive customized solutions. On the hardware side, look for high-volume manufacturing and direct ship solutions, rather than final assembly in your garage.
Develop a product line and add alternate channels. Diversifying sooner rather than later grows your opportunity with existing customers, and increases your brand visibility outside of the market you already own. New channels, such as adding brick-and-mortar distributors to supplement your online sales, also can multiply your rate of growth.
Prioritize mergers and acquisitions early. Most entrepreneurs consider mergers and acquisitions as a later follow-on, unless they are in real trouble, or if they have already saturated their base market. Smart startups explore mergers early to solidify their image in the marketplace, eliminate competitors, allow rapid scaling, or resolve resource gaps.
You probably already intend to follow one or more of these principles, but leading billionaires, like Jeff Bezos, could validly claim every one of these and others, and have used them to drive Amazon to the trillion dollar level (one thousand billion).
Yet, even by following all these principles, don’t expect it to be easy. The odds are still stacked against you, and the volatility of new markets make it even more challenging. But for those of you who are a real match for the entrepreneur lifestyle, that’s what makes it fun.
You will enjoy the learning and problem solving that comes from these challenges, and you may even step into the ranks of the billionaires as a final accolade. It’s a big step, but you can do it.
Here’s an example of ad targeting that’s actually good for public health: In a campaign encouraging people to wear masks, the Illinois state government has been focusing its digital ad dollars on the counties with highest COVID risk.
To achieve this, the government’s been working with Civis Analytics, the data science company founded by Dan Wagner, who was previously chief analytics officer for Barack Obama’s 2012 reelection campaign. The campaign kicked off in August, but the state is now sharing more details about its work, including a map that shows the week-by-week risk assessment that it used for targeting.
Crystal Son, Civis’ director of healthcare analytics, explained that every week, her team pulls together the latest county-level COVID data for Governor J.B. Pritzker’s team, who then use that data to determine where ad dollars for the It Only Works If You Wear It ad campaign should be spent.
Cameron Mock, chief of staff at the Governor’s Office of Management and Budget, said in a statement that the government is using “a one-of-a-kind formula to concentrate media dollars in the areas with the most risk.”
Mock continued, “The risk-based formula uses trends of cases and mobility on the county level to designate higher, medium and lower risk counties. It then uses a pro rata share to dedicate the most dollars to the highest risk areas.”
Image Credits: State of Illinois
This formula divides counties into five tiers, with Tier 1 being the highest risk and Tier 5 being the lowest. Tiers 4 and 5 will still receive a baseline level of ad spend, but Tier 3 counties will see more spending and Tiers 1 and 2 receive the maximum amount.
While the mask campaign isn’t limited to online advertising, the formula is only being used on the digital side because it’s more difficult to adjust funding for more traditional ad channels on a week-by-week basis.
“Each county has unique and changing circumstances due to the virus, so we designed this campaign to respond to the on-the-ground situation in all 102 counties in Illinois,” said Alex Hann, deputy press secretary to Governor Pritzker, in a statement. “As an area’s risk increases, so too will its concentration of public health messaging. As the pandemic continues and another wave of coronavirus looms, the state of Illinois will continue to listen to scientists and follow the data to keep our residents safe.”
Son said she’s not aware of any other campaign responding to COVID-19 that uses a similar model to prioritize spending in the highest-risk geographies. Is it working? While this data doesn’t show the effects of a specific campaign, according to Carnegie Mellon University, 89% of Illinois residents wear masks — currently the 15th-highest usage rate in the U.S.
In the future, Son said she’s hopeful that we’ll see other organizations adopt “a much more customized communications approach” for healthcare.
“We still have the habit in healthcare of treating groups of people as if they are homogenous, as if they all act the same think the same,” she said. “There are widespread applications beyond mask-wearing for more tailored approaches.”
