Zwift, maker of a popular indoor training app, just landed a whopping $450 million in funding led by KKR

Zwift, a 350-person, Long Beach, Calif.-based online fitness platform that immerses cyclists and runners in 3D generated worlds, just raised a hefty $ 450 million in funding led by the investment firm KKR in exchange for a minority stake in its business.

Permira and Specialized Bicycle’s venture capital fund, Zone 5 Ventures, also joined the round alongside earlier backers True, Highland Europe, Novator and Causeway Media.

Zwift has now raised $ 620 million altogether and is valued at north of $ 1 billion.

Why such a big round? Right now, the company just makes an app, albeit a popular one.

Since its 2015 founding, 2.5 million people have signed up to enter a world that, as Outside magazine once described it, is “part social-media platform, part personal trainer, part computer game.” That particular combination makes Zwift’s app appealing to both recreational riders and pros looking to train no matter the conditions outside.

The company declined to share its active subscriber numbers with us — Zwift charges $ 15 per month for its service — but it seemingly has a loyal base of users. For example, 117,000 of them competed in a virtual version of the Tour de France that Zwift hosted in July after it was chosen by the official race organizer of the real tour as its partner on the event.

Which leads us back to this giant round and what it will be used for. Today, in order to use the app, Zwift’s biking adherents need to buy their own smart trainers, which can cost anywhere from $ 300 to $ 700 and are made by brands like Elite and Wahoo. Meanwhile, runners use Zwift’s app with their own treadmills.

Now, Zwift is jumping headfirst into the hardware business itself. Though a spokesman for the company said it can’t discuss any particulars — “It takes time to develop hardware properly, and COVID has placed increased pressure on production” — it is hoping to bring its first product to market “as soon as possible.”

He added that the hardware will make Zwift a “more immersive and seamless experience for users.”

Either way, the direction isn’t a surprising one for the company, and we don’t say that merely because Specialized participated in this round as a strategic backer. Cofounder and CEO Eric Min has told us in the past that the company hoped to produce its own trainers some day.

Given the runaway success of the in-home fitness company Peloton, it wouldn’t be surprising to see a treadmill follow, or even a different product entirely. Said the Zwift spokesman, “In the future, it’s possible that we could bring in other disciplines or a more gamified experience.” (It will have expert advice in this area if it does, given that Swift just brought aboard Ilkka Paananen, the co-founder and CEO of Finnish gaming company Supercell, as an investor and board member.)

In the meantime, the company tells us not to expect the kind of classes that have proven so successful for Peloton, tempting as it may be to draw parallels.

While Zwift prides itself on users’ ability to organize group rides and runs and workouts, classes, says its spokesman, are “not in the offing.”

Startups – TechCrunch

Long-range delivery drone maker Volansi raises $50M

Robotics generally have seen an increase in interest during the pandemic, so it makes perfect sense that investors are taking a closer look at autonomous drone delivery. That’s good news for Volansi, which just announced a $ 50 million Series B.

The round, led by Icon Ventures, brings the Bay Area-based startup’s total funding up to around $ 75 million. Also involved are existing investors Lightspeed Venture Partners and Y Combinator, as well as new names, Harpoon Ventures and Merck Global Health Innovation Fund.

Volansi (nee Volans-i) has been demonstrating its drones’ long-range capabilities for some time now. We wrote about them back in 2017, when they showed off a 100-mile flight — an impressive feat, given the restrictions of most traditional drones. These days the company’s primary drones are the Voly C10, which can move 10 pounds up to 50 miles and the M20, which the company claims has a 350-mile range, hitting speeds of up to 75 MPH.

Image Credits: Volansi

A key application here is the delivery of medical supplies. The drones are capable of traversing terrain that might be difficult or impossible to travel through more traditional ground methods. Current clients include both enterprise and government departments. This new round of funding will go toward increasing headcount, launching new projects and advancing existing initiatives in the U.S. and emerging markets.

Startups – TechCrunch

Sarbacane, maker of Mailify, raises $27M for marketing tools

Marketing technology — and specifically tools that help companies leverage the internet to connect with customers in a way that is compliant with a new wave of data protection and privacy policies — continues to see a lot of traction with businesses and investors. In the latest development, Sarbacane, the French company that makes the Mailify SaaS-based email and text marketing platform, along with other other martech software, has raised $ 27 million, funding that it plans to use to continue building more technology in areas like AI-based marketing automation, as well as to continue its international expansion.

French investment company IDI is leading the investment with a $ 10 million stake, with management — led by founder Mathieu Tarnus — also investing. Tarnus has been and remains the majority shareholder. Paul de Fombelle, the COO who was on the founding team of the company, said the valuation is around $ 45 million with this investment.

Sarbacane — an instrument that has dual (relevant) meanings, an ear trumpet (for hearing better), and a blowpipe for sending out darts — is not exactly a startup in the strictest sense. The company is based out of the north of France, in a town called Hem, and it has been around for nearly 20 years — founded in 2001. It is already profitable, and it has raised some money in the past but has never disclosed how much.

It has some 10,000 customers on its books already, with a heavy emphasis on small and medium businesses, but also government agencies and a number of big names such as Christian Dior, L’Occitane, Mondial Relay and Warner Music, which do some self-service but also lean on consultancy from Sarbacane itself to help fine-tune how it all works.

All this, actually, makes Sarbacane quite a typical European startup, where we see a lot of businesses bootstrap themselves for years and turn profitable before at some point tapping investors, while still staying private, to take some money to boost growth. (In fact, just yesterday Mollie out of the Netherlands announced funding around a similar kind of growth/profit story, but there are a number of other examples across the whole of the continent.)

Sarbacane’s flagship product is an SaaS-based tool that lets businesses craft, send out, measure and respond to marketing campaigns over email and text messaging, which is sold as Sarbacane in France and Mailify outside of Francophonic countries. It competes with the likes of Mailchimp (the US-based martech ‘startup’ that’s also been around for ages and remains bootstrapped) and accounts for the majority of the $ 13 million in revenues that Sarbacane made last year, and the $ 16 million it expects to make this year.

Other products that it has moved into over the years include Layout for email design; Sarbacane Chat (for running chatbots); and Touchdown (a kind of all-in-one, multichannel marketing platform akin to Salesforce’s or Adobe’s marketing clouds), and it has more recently started to also grow by way of acquisition, acquiring the Datananas B2B prospecting platform to more deeper into CRM.

De Fombelle said that the company plans to use some of the funding to continue making acquisitions as we continue to see more consolidation in the fragmented world of marketing technology.

“We raised this money because in Europe, the players in email marketing and marketing automation are ten times smaller than they are in the US,” he said. “The market is huge in Europe but still very fragmented and so we have a big ambition to be a part of the consolidation.”

There has been a large swing in recent years where people have become acutely aware of marketing technology, but not for a great reason: it’s because of the gradual realisation of just how much of our data is sucked up and used by a wide range of companies to profile us and sell more to us in the future. Sometimes this is used in pretty nefarious ways, sometimes innocuously, sometimes actually quite usefully. Now, a wave of new regulations is making us all too aware of just how much of this happens, and is in the most proactive cases helping us cut down some of those vines, by giving us more control over how our data is used online.

All that potentially puts martech companies, and businesses using a lot of marketing and advertising technology, into an interesting, and sometimes not great, position, but de Fombelle said that in fact it’s been a big benefactor of the rise of GDPR, not least because it has always had a strong view on data protection and put a lot of the measures required by the regulations in place well before they were conceived.

That’s one reason why investors are interested even if Sarbacane itself hasn’t been trumpeting its own brand much.

“The Sarbacane Group is accelerating its development through the growth of its various brands, all of which are leaders in their respective markets. We are thrilled to partner with the team in the implementation of this strategy, and in its diversification and acquisition projects in the field of marketing software and B2B services,” said Julien Bentz, a new investor and member of IDI’s executive committee.

Startups – TechCrunch

[Hailo in Times of Israel] Israeli chip maker Hailo to set up Tokyo unit as demand for AI tech grows

Hailo, a maker of chips that allows edge devices like smart cameras or smart cars to have artificial intelligence capabilities, said it is setting up a wholly owned subsidiary in Tokyo, Japan.

Read more here.

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[Innovalve in CTech] ALIVE Fund leads financing round for mitral heart valve maker Innovalve

Innovalve grew out of inventions and patents developed by Sheba Medical Center experts Prof. Ehud Raanani the director of Sheba’s Cardiovascular and Thoracic Center and Dr. Boris Orlev, head of the center’s Mitral Valve Surgery Unit. The company has developed an artificial mitral valve that can be replaced using a minimally-invasive catheter to help treat patients suffering from heart disease. The company achieved successful results in experiments on animals and is set to apply for FDA approval for human trials in the coming months. Among Innovalve’s investors is Edwards Lifesciences, a leader in cardiological valves.

Read more here.

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China’s electric SUV maker Li Auto raises $1.1 billion in US IPO

Trade tensions between China and the U.S. have not stopped Chinese companies from eyeing to list on American stock exchanges. Li Auto, a five-year-old Chinese electric vehicle startup, raised $ 1.1 billion through its debut on Nasdaq on Thursday.

The Beijing-based company is targeting a growing Chinese middle class that aspires to drive cleaner, smarter and larger vehicles. Its first model, sold at a subsidized price of 328,000 yuan, or $ 46,800, is a six-seat electric SUV that began shipping at the end of last year.

Li Auto priced its IPO north of its targeted range at $ 11.5 per share, giving it a fully diluted market value of $ 10 billion. It also raised an additional $ 380 million in a concurrent private placement of shares to existing investors.

The IPO arrived amid a surge of investor interest in EV makers. Tesla’s shares have skyrocketed in the last few quarters. Li Auto’s domestic rival Nio, which raised a similar amount in a $ 1 billion float in New York back in 2018, also saw its stock price rally in recent months.

Li Auto is one step ahead of its Chinese peer Xpeng in planning its first-time sale. The six-year-old competitor said last year it may consider an IPO. Last month, a source told South China Morning Post that Xpeng was getting ready for the listing.

Founders of China’s emergent EV startups are often shrewd internet veterans who are well-connected in the venture capital and marketing world, attracting investment dollars in the billions. Li Auto, for instance, counts China’s food delivery mogul Wang Xing, boss of Meituan Dianping, as its second-largest shareholder after its CEO Li Xiang. TikTok parent ByteDance shelled out $ 30 million in its Series C round.

Investors are in part emboldened by Beijing’s national push to electrify China’s auto industry. The question, then, is whether these startups have the right talent and resources to pull things off in an industry that traditionally demands a much longer development cycle.

Wallace Guo, a managing partner at Li Auto’s Series B investor Taihecap, admitted that “the nature of auto consumption, unlike internet products evolving through trial and error, manufacturing a car, is a strategic move with sophisticated system, very long value chain, requiring huge investment and resources and any error can be fatal.”

Mingming Huang, chief executive of Future Capital, said that “it was a no brainer in 2015 to be the first investor” in Li Auto. The venture capitalist said Li, which ran a popular car-buying online portal before getting into manufacturing, “has the rare combination of being a relentless talent as well as a top-notch product manager that excels in creating value for all stakeholders.”

Customers testing Li Auto’s SUV in China. Photo: Li Auto

Both investors believed Li Auto has picked the right path of zeroing in on extended-range electric vehicles. EREVs come with an auxiliary power unit, often a small combustion engine, that ensures cars can still operate even when a charging station is not immediately available, a shortage yet to be solved in China.

As my colleague Alex pointed out, Li Auto is on a trajectory similar to that of its peer Nio, going public after a short history of delivering to customers. The startup only began shipping its first model last December and delivered just over 10,000 units as of June, its prospectus showed.

The startup is still deep in the red, losing 2.44 billion yuan ($ 350 million) in 2019, up from a net loss of 1.53 billion yuan in 2018. It did finish the first quarter of 2020 with a gross profit of $ 9.6 million after it began monetization.

Its annual revenue — comprised mostly of car sales and a small portion from services like charging stalls — stood at 284 million yuan ($ 40.4 million) in 2019, a tiny fraction of Nio’s $ 1.12 billion. But Nio also amassed a greater net loss of $ 1.62 billion in the same year. In contrast, Tesla has been profitable for four straight quarters.

Li Auto’s investors are clearly bullish that the Chinese startup can one day match Tesla’s commercial success.

“Xiang has a deep understanding of the preferences and pain points of car owners and drivers in China. Li Auto is the first in China to successfully commercialize extended-range electric vehicles, solving the challenges of inadequate charging infrastructure and battery technologies constraints,” Huang asserted.

“The company is able to get positive gross margin when selling the first batch of vehicles and thus with its growth in sales volume, its gross margin was well above competitors and can live long enough to become a ten billion-dollar company with this healthy business model,” said Guo.

Startups – TechCrunch

Hearsay, maker of compliant tools for financial services, deepens ties with Salesforce

Financial services companies like banks and insurance tend to be heavily regulated. As such they require a special level of security and auditability. Hearsay, which makes compliant communications tools for these types of companies, announced a new partnership with Salesforce today, enabling smooth integration with Salesforce CRM and marketing automation tools.

The company also announced that Salesforce would be taking a minority stake in Hearsay, although company co-founder and CEO Clara Shih, did not provide any details on that part of the announcement.

Shih says the company created the social selling category when it launched 10 years ago. Today, it provides a set of tools like email, messaging and websites along with a governance layer to help financial services companies interact with customers in a compliant way. Their customers are primarily in banking, insurance, wealth management and mortgages.

She said that they realized if they could find a way to share the data they were collecting with the Hearsay toolset with CRM and marketing automation software in an automated way, it would make greater use of this information than it could on its own. To that end, they have created a set of APIs to enable that with some built-in connectors. The first one will be to connect Hearsay to Salesforce with plans to add other vendors in the future.

“It’s about being able to connect [data from Hearsay] with the CRM system of record, and then analyzing it across thousands, if not tens of thousands of advisors or bankers in a single company, to uncover best practices. You could then use that information like GPS driving directions that help every advisor behave in the moment and reach out in the moment like the very best advisor would,” Shih explained.

In practice, this means sharing the information with the customer data platform (CDP), the CRM and marketing automation tooling to deliver more intelligent targeting based on a richer body of information. So the advisor can use information gleaned from everything he or she knows about the client across the set of tools to deliver more meaningful personal message instead of a targeted ad or an email blast. As Shih points out, the ad might even make sense, but could be tone deaf depending on the circumstances.

“What we focus on is this human-client experience, and that can only be delivered in the last mile because it’s only with the advisor that many clients will confide in these very important life events and life decisions, and then conversely, it’s only in the last mile that the trusted advisor can deliver relationship advice,” she said.

She says what they are trying to do by combining streams of data about the customer is build loyalty in a way that pure technology solutions just aren’t capable of doing. As she says, nobody says they are switching banks because it has the best chat bot.

Hearsay was founded in 2009 and has raised $ 51 million, as well as whatever other money Salesforce will be adding to the mix with today’s investment. Other investors include Sequoia and NEA Associates. Its last raise was way back in 2013, a $ 30 million Series C.

Startups – TechCrunch

The Not Company, a maker of plant-based meat and dairy substitutes in Chile, will soon be worth $250M

The Not Company, Latin America’s leading contender in the plant-based meat and dairy substitute market, is about to close on an $ 85 million round of funding that would value it at $ 250 million, according to sources familiar with the company’s plans.

The latest round of funding comes on the heels of a series of successes for the Santiago-based business. In the two years since NotCo launched on the global stage, the company has expanded beyond its mayonnaise product into milk, ice cream and hamburgers. Other products, including a chicken meat substitute, are also on the product roadmap, according to people familiar with the company.

NotCo is already selling several products in Chile, Argentina and Latin America’s largest market — Brazil — and has signed a blockbuster deal with Burger King to be the chain’s supplier of plant-based burgers. It’s in this Burger King deal that NotCo’s approach to protein formulation is paying dividends, sources said. The company is responsible for selling 48 sandwiches per store per day in the locations where it’s supplying its products, according to one person familiar with the data. That figure outperforms Impossible Foods per-store sales, the person said.

NotCo is also now selling its burgers in grocery stores in Argentina and Chile. And while the company is not break-even yet, sources said that by December 2021 it could be — or potentially even cash flow positive.

NotCo co-founders Karim Pichara, Matias Muchnick and Pablo Zamora. Image Credit: The Not Company

With the growth both in sales and its diversification into new products, it’s little wonder that investors have taken note.

Sources said that the consumer brand-focused private equity firm L Catterton Partners and the Biz Stone-backed Future Positive were likely investors in the new financing round for the company. Previous investors in NotCo include Bezos Expeditions, the personal investment firm of Amazon founder Jeff Bezos; the London-based CPG investment firm, The Craftory; IndieBio; and SOS Ventures.

Alternatives to animal products are a huge (and still growing) category for venture investors. Earlier this month Perfect Day closed on a second tranche of $ 160 million for that company’s latest round of financing, bringing that company’s total capital raised to $ 361.5 million, according to Crunchbase. Perfect Day then turned around and launched a consumer food business called the Urgent Company.


These recent rounds confirm our reporting in Extra Crunch about where investors are focusing their time as they try to create a more sustainable future for the food industry. Read more about the path they’re charting.


Meanwhile, large food chains continue to experiment with plant-based menu items and push even further afield into cell-based meat using cultures from animals. KFC recently announced that it would be expanding its experiment with Beyond Meat’s chicken substitute in the U.S. — and would also be experimenting with cultured meat in Moscow.

Behind all of this activity is an acknowledgement that consumer tastes are changing, interest in plant-based diets are growing, and animal agriculture is having profound effects on the world’s climate.

As the website ClimateNexus notes, animal agriculture is the second-largest contributor to human-made greenhouse gas emissions after fossil fuels. It’s also a leading cause of deforestation, water and air pollution and biodiversity loss.

There are 70 billion animals raised annually for human consumption, which occupy one-third of the planet’s arable and habitable land surface, and consume 16% of the world’s freshwater supply. Reducing meat consumption in the world’s diet could have huge implications for reducing greenhouse gas emissions. If Americans were to replace beef with plant-based substitutes, some studies suggest it would reduce emissions by 1,911 pounds of carbon dioxide.

Startups – TechCrunch

Electric-bike maker Cowboy raises $26 million

Cowboy has raised a $ 26 million (€23 million) Series B funding round from Exor Seeds, HCVC, Isomer Capital, Future Positive Capital and Index Ventures. The startup has been manufacturing premium electric bikes and selling them directly to consumers around Europe.

The company recently released the third generation of its flagship bike, which is all about refinements and iterating on its existing offering. If you haven’t seen one in a European city, it features an iconic triangle-shaped aluminum frame with integrated pill-shaped lights.

With a focus on simplicity, there are no gears or buttons to control motor assistance. The motor kicks in automatically when you start pedaling. Some of the key features of the Cowboy bike are the carbon belt, custom-made tires with a puncture protection layer and the detachable battery.

Cowboy bikes are also connected bikes thanks to some electronic components. For instance, you can lock your bike when you’re not using it. The company is currently testing auto-unlock, a feature that takes advantage of Bluetooth Low Energy to detect your phone.

By combining data from the accelerometer, the speed of the bike and your pedal power, Cowboy will also soon automatically detect crash and notify an emergency contact.

In addition to designing a bike, Cowboy is also a service company. It has built a network of repair partners and offers test rides to potential clients. It is now available in dozens of European cities.

The company also offers an insurance product thanks a partnership with Qover. For €8 per month, you can receive real-time notification whenever someone is trying to steal your bike and you’re insured against theft. For €10 per month, you’re also insured against damage.

With today’s funding round, the startup plans to hire over 30 people in the next six months, expand its network of test rides and scale production operations with Flex.

Startups – TechCrunch

[Alpha Tau in The New York Times] Israeli Medical Device Maker Alpha Tau Raises $26 Million to Fund Trials

Israeli medical device maker Alpha Tau Medical said on Thursday it raised $ 26 million in a funding round from investors including Shavit Capital, Medison Ventures and OurCrowd to help finance global clinical trials.

Read more here.

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