Fundings & Exits

Aki acquires Eyeview’s ad personalization tech

Posted by | Advertising Tech, Aki Technologies, EyeView, Fundings & Exits, M&A, Mobile, TC | No Comments

Video advertising company Eyeview shut down in December, but its technology will live on thanks to an acquisition by Aki Technologies.

Aki CEO Scott Swanson told me that he’s anticipating serious growth in the demand for ad personalization, particularly as consumers see personalization everywhere else online.

Swanson argued that Eyeview’s technology stands out thanks to its focus on video, with “the ability to generate millions of permutations of a video creative and store them in the cloud.” It offers even more opportunities when combined with Aki’s existing platform, which delivers ads targeted for specific “mobile moments,” like whether the viewer is relaxing at home or out running errands.

Plus, the acquisition allows Aki to expand beyond mobile advertising to desktop and connected TV.

The financial terms of the deal were not disclosed, but Swanson said that in addition to acquiring the technology, he’s also working to bring on old Eyeview clients and hire Eyeview team members (he estimated that he’s hired nearly 15 so far and is aiming for around 20). At the same time, he acknowledged that there are challenges in resurrecting a business that had been shut down.

“The technology itself was decommissioned, it was taken down, it was backed up in the cloud,” Swanson said. “As the acquisition proceeds, we’ll literally be taking the code base and relaunching it in the cloud … Hiring the people was super important, and then because it’s not a traditional acquisition where we get customers and stuff, we have to go call up all the customers one-by-one, just as we have to hire people one-by-one.”

Eyeview had raised nearly $80 million in funding before running out of cash and laying off a team of around 100 employees. (Aki, meanwhile, has raised only a seed round of $3.75 million back in 2016; Swanson said the company has grown organically since then.) The news came only a few months after digital media veteran Rob Deichert took over as CEO.

“While it was disappointing to have to shut down the Eyeview business, I’m very happy that the technology assets have found a home with Aki,” Deichert told me via email. “Their business is a logical fit for the technology.”

And despite Eyeview’s misfortunes, Swanson said he’s confident that the company still works as a standalone business: “Look, these guys have been running a business that was full of really happy customers who were seeing good results and seem to have been disappointed when they shut down.”

The bigger issue, he suggested, is the adtech industry as a whole, with advertisers feeling fatigued “with having too many options,” along with a lack of “appetite on the large exit side.”

“The broader trend here is for companies that operate profitably and can support themselves effectively to become a little bit more tech-enabled managed services business,” Swanson said.

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Tencent to grow gaming empire with $148M acquisition of Conan publisher Funcom in Norway

Posted by | Apps, ceo, Companies, Europe, finland, Funcom, Fundings & Exits, Gaming, Israel, Microsoft, miniclip, Nintendo, online games, Oslo, Riot Games, smartphone, Software, Sony, supercell, Tencent, ubisoft, WeChat | No Comments

Tencent, one of the world’s biggest video and online gaming companies by revenue, today made another move to help cement that position. The Chinese firm has made an offer to fully acquire Funcom, the games developer behind Conan Exiles (and others in the Conan franchise), Dune and some 28 other titles. The deal, when approved, would value the Oslo-based company at $148 million (NOK 1.33 billion) and give the company a much-needed cash injection to follow through on its longer-term strategy around its next generation of games.

Funcom is traded publicly on the Oslo Stock Exchange, and the board has already recommended the offer, which is being made at NOK 17 per share, or around 27% higher than its closing share price the day before (Tuesday).

The news is being made with some interesting timing. Today, Tencent competes against the likes of Sony, Microsoft and Nintendo in terms of mass-market, gaming revenues. But just earlier this week, it was reported that ByteDance — the publisher behind breakout social media app TikTok — was readying its own foray into the world of gaming.

If it goes ahead, that would set up another level of rivalry between the two companies. Tencent also has a massive interest in the social media space, specifically by way of its messaging app WeChat . While many consumers will have multiple apps, when it comes down to it, spending money in one represents a constraint on spending money in another. ByteDance currently profits from having content on its social apps related to Tencent gameplay, so building its own content could be one way of moving away from that. The two have (naturally) also been battling it out in court in China over unfair competition claims, in part related to that gaming content.

Today, Tencent is one of the world’s biggest video game companies: in its last reported quarter (Q3 in November), Tencent said that it make RMB28.6 billion ($4.1 billion) in online gaming revenue, with smartphone games accounting for RMB24.3 billion of that.

Acquisitions and controlling stakes form a key part of the company’s growth strategy in gaming. Among its very biggest deals, Tencent paid $8.6 billion for a majority stake in Finland’s Supercell back in 2016. It also has a range of controlling stakes in Riot Games, Epic, Ubisoft, Paradox, Frontier and Miniclip. These companies, in turn, also are making deals: just earlier this month it was reported (and sources have also told us) that Miniclip acquired Israel’s Ilyon Games (of Bubble Shooter fame) for $100 million.

Turning back to Funcom, Tencent was already an investor in the company: it took a 29% stake in it in September 2019 in a secondary deal, buying out KGJ Capital (which had previously been the biggest shareholder).

“Tencent has a reputation for being a responsible long-term investor, and for its renowned operational capabilities in online games,” said Funcom CEO Rui Casais at the time. “The insight, experience, and knowledge that Tencent will bring is of great value to us and we look forward to working closely with them as we continue to develop great games and build a successful future for Funcom.”

In retrospect, this was laying the groundwork and relationships for a bigger deal just months down the line. 

“We have a great relationship with Tencent as our largest shareholder and we are very excited to be part of the Tencent team,” Casais said in a statement today. “We will continue to develop great games that people all over the world will play, and believe that the support of Tencent will take Funcom to the next level. Tencent will provide Funcom with operational leverage and insights from its vast knowledge as the leading company in the game space.”

The rationale for Funcom is that the company had already determined that it needed further investment in order to follow through on its longer-term strategy.

According to a statement issued before it recommended the offer, the company is continuing to build out the “Open World Survival segment” using the Games-as-a-Service business model (where you pay to fuel up with more credits); and is building an ambitious Dune project set to launch in two years.

“Such increased focus would require a redirection of resources from other initiatives, the most significant being the co-op shooter game, initially scheduled for release during 2020 that has been impacted by scope changes due to external/market pressures with increasingly strong competition and internal delays,” the board writes, and if it goes ahead with its strategy, “It is likely that the Company will need additional financing to supplement the revenue generated from current operations.”

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AppsFlyer raises $210M for ad attribution and more

Posted by | ad attribution, Advertising Tech, AppsFlyer, Fundings & Exits, general atlantic, Mobile, Recent Funding, Startups | No Comments

AppsFlyer has raised a massive Series D of $210 million, led by General Atlantic.

Founded in 2011, the company is best known for mobile ad attribution — allowing advertisers to see which campaigns are driving results. At the same time, AppsFlyer has expanded into other areas, like fraud prevention.

And in the funding announcement, General Atlantic Manager Director Alex Crisses suggested that there’s a broader opportunity here.

“Attribution is becoming the core of the marketing tech stack, and AppsFlyer has established itself as a leader in this fast-growing category,” Crisses said. “AppsFlyer’s commitment to being independent, unbiased, and representing the marketer’s interests has garnered the trust of many of the world’s leading brands, and we see significant potential to capture additional opportunity in the market.”

Crisses and General Atlantic’s co-president and global head of technology, Anton Levy, are both joining AppsFlyer’s board of directors. Previous investors Qumra Capital, Goldman Sachs Growth, DTCP (Deutsche Telekom Capital Partners), Pitango Venture Capital and Magma Venture Partners also participated in the round, which brings the company’s total funding to $294 million.

AppsFlyer said it works with more than 12,000 customers, including eBay, HBO, Tencent, NBC Universal, Minecraft, US Bank, Macy’s and Nike. It also says it saw more than $150 million in annual recurring revenue in 2019, up 5x from its Series C in 2017.

Co-founder and CEO Oren Kaniel said that as attribution becomes more important, marketers need a partner they can trust. And with AppsFlyer driving $28 billion in ad spend last year, he argued, “There’s a lot of trust there.”

Kaniel added, “It doesn’t really matter how sophisticated your marketing stack is, or whether you have AI or machine learning — if the data feed is wrong … everything else will be wrong. I think companies realize how sensitive and critical this data platform is for them. I think that in the past couple of years, they’re investing more in selecting the right platform.”

In order to ensure that trust, he said that AppsFlyer has avoided any conflicts of interest in its business model — a position that extends to fundraising, where Kaniel made sure not to raise money from any of the big players in digital advertising.

And moving forward, he said, “We will never go into media business, never go into media services. We want to maintain our independence, we want to maintain our previous unbiased positions.”

Kaniel also argued that while he doesn’t see regulations like Europe GDPR and California’s CCPA hindering ad attribution directly, the regulatory environment has justified AppsFlyer’s investment in privacy and security.

“Even more than just being in compliance, [with AppsFlyer], marketers all of a sudden have full control of their data,” he said. “Let’s say on the web, probably your website is sending data and information to partners who don’t need to have access to this information. The reason is, there’s no logic, there’s a lot of pixels going everywhere, the publishers don’t have control. If you use our platform, you have full control, you can configure the exact data points that you’d like to share.”

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Mobile payment app Lydia raises $45 million round led by Tencent

Posted by | Apps, Europe, Finance, fintech, France Newsletter, Fundings & Exits, Lydia, Mobile, Startups | No Comments

French startup Lydia is raising a $45 million Series B round (€40 million). Tencent is leading the round with existing investors CNP Assurances, XAnge and New Alpha also participating.

If you live in France, chances are you already know Lydia quite well. The company has become a ubiquitous mobile payment app, especially for people under 30 years old. Think about it as a sort of Square Cash or Venmo, but for France.

“At first, we wanted to raise less but we ended up raising more,” Lydia co-founder and CEO Cyril Chiche told me in a phone interview.

The company has managed to attract 3 million users in France. More impressive, 25% of French people between 18 and 30 years old have a Lydia account — and 5,000 people sign up every day. Lydia currently has 90 employees.

More recently, the company has expanded beyond peer-to-peer payment. First, the company wants to help you manage your money in many different ways with an important value — everything should happen in real time.

You can create multiple Lydia accounts to put some money aside or use money in that sub-account for a specific purpose. That feature alone turns the app into a versatile money management app.

For instance, you can associate a Lydia payment card with a Lydia account and a virtual card with another Lydia account — that virtual card works with Apple Pay, Google Pay, Samsung Pay and more. You can change those settings in real time.

You can share accounts with other Lydia users. And shared accounts are truly shared — everyone can top up and withdraw money from that account. You can spend directly from that account or withdraw money to another account.

You can also turn any Lydia account into a money pot account. In just a few taps, you can generate a link and share it with your friends so that they can add money using their regular payment card or a Lydia account.

More recently, the company has introduced “the market”, a marketplace of other financial products. From the Lydia app, you can borrow up to €1,000 in just a few seconds. You can also insure your phone and other mobile devices. You can get some free credit when you open a bank account, insure your home with Luko, switch to another electricity and gas provider, compare mobile phone and internet providers and more.

And that strategy is going to be key in the future. “We have an ambitious goal, which is turning Lydia into a mobile financial service app,” Chiche said.

He also pointed out that the company that has been the most successful when it comes to creating a mobile marketplace of financial products is Tencent with WeChat.

“Tencent is also the number one player in the video game industry, and there’s no industry with as much user engagement,” Chiche said. Tencent acquired Supercell, bought 40% of Epic Games, acquired Riot Games (League of Legends), invested in Ubisoft, Activision Blizzard, Discord, etc. Lydia hopes that it can learn from Tencent on the user engagement front.

Compared to many fintech startups, Lydia doesn’t want to replace banks altogether — the company says it wants to build a meta-banking app. Peer-to-peer payments represent the top of the funnel and a great user acquisition strategy thanks to networking effects.

You can then connect your Lydia account with your bank account and your debit card. This way, you can send money back and forth between your Lydia accounts and your bank account. As a user, that strategy slowly pays off over time. After a while, you end up spending money directly from your Lydia account and relying more heavily on Lydia’s native payment features, with your bank account acting as a money back end.

At the bottom of the funnel, Lydia hopes that it can turn active Lydia users into paid customers with a handful of in-house and third-party financial products. In other words, Lydia doesn’t want to become a credit institution like a traditional bank, it wants to become a financial hub. Expanding the marketplace will be a big focus for the company going forward.

While Lydia is available in other European countries, Lydia is still massively used in its home market with other markets lagging behind. With today’s funding round, growth in foreign countries is going to be the second key topic.

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Atom Finance’s free Bloomberg Terminal rival raises $12M

Posted by | Apps, Atom Finance, bloomberg terminal, Finance, funding, Fundings & Exits, General Catalyst, Mobile, Recent Funding, Robinhood, Sentieo, Startups, stock market, stock trading, TC, Yahoo-Finance | No Comments

If you want to win on Wall Street, Yahoo Finance is insufficient but Bloomberg Terminal costs a whopping $24,000 per year. That’s why Atom Finance built a free tool designed to democratize access to professional investor research. If Robinhood made it cost $0 to trade stocks, Atom Finance makes it cost $0 to know which to buy.

Today Atom launches its mobile app with access to its financial modeling, portfolio tracking, news analysis, benchmarking and discussion tools. It’s the consumerization of finance, similar to what we’ve seen in enterprise SaaS. “Investment research tools are too important to the financial well-being of consumers to lack the same cycles of product innovation and accessibility that we have experienced in other verticals,” CEO Eric Shoykhet tells me.

In its first press interview, Atom Finance today revealed to TechCrunch that it has raised a $10.6 million Series A led by General Catalyst to build on its quiet $1.9 million seed round. The cash will help the startup eventually monetize by launching premium tiers with even more hardcore research tools.

Atom Finance already has 100,000 users and $400 million in assets it’s helping steer since soft-launching in June. “Atom fundamentally changes the game for how financial news media and reporting is consumed. I could not live without it,” says The Twenty Minute VC podcast founder and Atom investor Harry Stebbings.

Individual investors are already at a disadvantage compared to big firms equipped with artificial intelligence, the priciest research and legions of traders glued to the markets. Yet it’s becoming increasingly clear that investing is critical to long-term financial mobility, especially in an age of rampant student debt and automation threatening employment.

“Our mission is two-fold,” Shoykhet says. “To modernize investment research tools through an intuitive platform that’s easily accessible across all devices, while democratizing access to institutional-quality investing tools that were once only available to Wall Street professionals.”

Leveling the trading floor

Shoykhet saw the gap between amateur and expert research platforms firsthand as an investor at Blackstone and Governors Lane. Yet even the supposedly best-in-class software was lacking the usability we’ve come to expect from consumer mobile apps. Atom Finance claims that “for example, Bloomberg hasn’t made a significant change to its central product offering since 1982.”

The Atom Finance team

So a year ago, Shoykhet founded Atom Finance in Brooklyn to fill the void. Its web, iOS and Android apps offer five products that combine to guide users’ investing decisions without drowning them in complexity:

  • Sandbox – Instant financial modeling with pre-populated consensus projections that automatically update and are recalculated over time
  • Portfolio – Track your linked investment accounts to monitor overarching stats, real-time profit and loss statements and diversification
  • X-Ray – A financial research search engine for compiling news, SEC filings, transcripts and analysis
  • Compare – Benchmarking tables for comparing companies and sectors
  • Collaborate – Discussion boards and group chat for sharing insights with fellow investors

“Our Sandbox feature allows users to create simple financial models directly within our platform, without having to export data to a spreadsheet,” Shoykhet says. “This saves our users time and prevents them from having to manually refresh the inputs to their model when there is new information.”

Shoykhet positions Atom Finance in the middle of the market, saying, “Existing solutions are either too rudimentary for rigorous analysis (Yahoo Finance, Google Finance) or too expensive for individual investors (Bloomberg, CapIQ, Factset).”

With both its free and forthcoming paid tiers, Atom hopes to undercut Sentieo, a more AI-focused financial research platform that charges $500 to $1,000 per month and raised $19 million a year ago. Cheaper tools like BamSEC and WallMine are often limited to just pulling in earnings transcripts and filings. Robinhood has its own in-app research tools, which could make it a looming competitor or a potential acquirer for Atom Finance.

Shoykhet admits his startup will face stiff competition from well-entrenched tools like Bloomberg. “Incumbent solutions have significant brand equity with our target market, and especially with professional investors. We will have to continue iterating and deliver an unmatched user experience to gain the trust/loyalty of these users,” he says. Additionally, Atom Finance’s access to users’ sensitive data means flawless privacy, security, and accuracy will be essential.

The $12.5 million from General Catalyst, Greenoaks, Global Founders Capital, Untitled Investments, Day One Ventures and a slew of angels gives Atom runway to rev up its freemium model. Robinhood has found great success converting unpaid users to its subscription tier where they can borrow money to trade. By similarly starting out free, Atom’s eight-person team hailing from SoFi, Silver Lake, Blackstone and Citi could build a giant funnel to feed its premium tiers.

Fintech can feel dry and ruthlessly capitalistic at times. But Shoykhet insists he’s in it to equip a new generation with methods of wealth creation. “I think we’ve gone long enough without seeing real innovation in this space. We can’t be complacent with something so important. It’s crucial that we democratize access to these tools and educate consumers . . . to improve their investment well-being.”

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Instagram founders join $30M raise for Loom work video messenger

Posted by | Apps, Enterprise, funding, Fundings & Exits, Kevin Systrom, loom, Microsoft Teams, mike krieger, Mobile, Recent Funding, Sequoia, slack, Social, Startups, TC, Video, video messaging | No Comments

Why are we all trapped in enterprise chat apps if we talk 6X faster than we type, and our brain processes visual info 60,000X faster than text? Thanks to Instagram, we’re not as camera-shy anymore. And everyone’s trying to remain in flow instead of being distracted by multi-tasking.

That’s why now is the time for Loom. It’s an enterprise collaboration video messaging service that lets you send quick clips of yourself so you can get your point across and get back to work. Talk through a problem, explain your solution, or narrate a screenshare. Some engineering hocus pocus sees videos start uploading before you finish recording so you can share instantly viewable links as soon as you’re done.

Loom video messaging on mobile

“What we felt was that more visual communication could be translated into the workplace and deliver disproportionate value” co-founder and CEO Joe Thomas tells me. He actually conducted our whole interview over Loom, responding to emailed questions with video clips.

Launched in 2016, Loom is finally hitting its growth spurt. It’s up from 1.1 million users and 18,000 companies in February to 1.8 million people at 50,000 businesses sharing 15 million minutes of Loom videos per month. Remote workers are especially keen on Loom since it gives them face-to-face time with colleagues without the annoyance of scheduling synchronous video calls. “80% of our professional power users had primarily said that they were communicating with people that they didn’t share office space with” Thomas notes.

A smart product, swift traction, and a shot at riding the consumerization of enterprise trend has secured Loom a $30 million Series B. The round that’s being announced later today was led by prestigious SAAS investor Sequoia and joined by Kleiner Perkins, Figma CEO Dylan Field, Front CEO Mathilde Collin, and Instagram co-founders Kevin Systrom and Mike Krieger.

“At Instagram, one of the biggest things we did was focus on extreme performance and extreme ease of use and that meant optimizing every screen, doing really creative things about when we started uploading, optimizing everything from video codec to networking” Krieger says. “Since then I feel like some products have managed to try to capture some of that but few as much as Loom did. When I first used Loom I turned to Kevin who was my Instagram co-founder and said, ‘oh my god, how did they do that? This feels impossibly fast.’”

Systrom concurs about the similarities, saying “I’m most excited because I see how they’re tackling the problem of visual communication in the same way that we tried to tackle that at Instagram.” Loom is looking to double-down there, potentially adding the ability to Like and follow videos from your favorite productivity gurus or sharpest co-workers.

Loom is also prepping some of its most requested features. The startup is launching an iOS app next month with Android coming the first half of 2020, improving its video editor with blurring for hiding your bad hair day and stitching to connect multiple takes. New branding options will help external sales pitches and presentations look right. What I’m most excited for is transcription, which is also slated for the first half of next year through a partnership with another provider, so you can skim or search a Loom. Sometimes even watching at 2X speed is too slow.

But the point of raising a massive $30 million Series B just a year after Loom’s $11 million Kleiner-led Series A is to nail the enterprise product and sales process. To date, Loom has focused on a bottom-up distribution strategy similar to Dropbox. It tries to get so many individual employees to use Loom that it becomes a team’s default collaboration software. Now it needs to grow up so it can offer the security and permissions features IT managers demand. Loom for teams is rolling out in beta access this year before officially launching in early 2020.

Loom’s bid to become essential to the enterprise, though, is its team video library. This will let employees organize their Looms into folders of a knowledge base so they can explain something once on camera, and everyone else can watch whenever they need to learn that skill. No more redundant one-off messages begging for a team’s best employees to stop and re-teach something. The Loom dashboard offers analytics on who’s actually watching your videos. And integration directly into popular enterprise software suites will let recipients watch without stopping what they’re doing.

To build out these features Loom has already grown to a headcount of 45, though co-founder Shahed Khan is stepping back from company. For new leadership, it’s hired away former head of web growth at Dropbox Nicole Obst, head of design for Slack Joshua Goldenberg, and VP of commercial product strategy for Intercom Matt Hodges.

Still, the elephants in the room remain Slack and Microsoft Teams. Right now, they’re mainly focused on text messaging with some additional screensharing and video chat integrations. They’re not building Loom-style asynchronous video messaging…yet. “We want to be clear about the fact that we don’t think we’re in competition with Slack or Microsoft Teams at all. We are a complementary tool to chat” Thomas insists. But given the similar productivity and communication ethos, those incumbents could certainly opt to compete. Slack already has 12 million daily users it could provide with video tools.

Loom co-founder and CEO Joe Thomas

Hodges, Loom’s head of marketing, tells me “I agree Slack and Microsoft could choose to get into this territory, but what’s the opportunity cost for them in doing so? It’s the classic build vs. buy vs. integrate argument.” Slack bought screensharing tool Screenhero, but partners with Zoom and Google for video chat. Loom will focus on being easily integratable so it can plug into would-be competitors. And Hodges notes that “Delivering asynchronous video recording and sharing at scale is non-trivial. Loom holds a patent on its streaming, transcoding, and storage technology, which has proven to provide a competitive advantage to this day.”

The tea leaves point to video invading more and more of our communication, so I expect rival startups and features to Loom will crop up. Vidyard and Wistia’s Soapbox are already pushing into the space. As long as it has the head start, Loom needs to move as fast as it can. “It’s really hard to maintain focus to deliver on the core product experience that we set out to deliver versus spreading ourselves too thin. And this is absolutely critical” Thomas tells me.

One thing that could set Loom apart? A commitment to financial fundamentals. “When you grow really fast, you can sometimes lose sight of what is the core reason for a business entity to exist, which is to become profitable. . . Even in a really bold market where cash can be cheap, we’re trying to keep profitability at the top of our minds.”

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Omni storage & rentals fails, shutters, sells engineers to Coinbase

Posted by | Apps, clutter, coinbase, Collaborative Consumption, eCommerce, Exit, Flybridge Capital Partners, founders fund, Fundings & Exits, Highland Capital Partners, Logistics, Mobile, Omni, payments, rentals, Startups, TC, Transportation | No Comments

$35 million-funded Omni is packing up and shutting down after struggling to make the economics of equipment rentals and physical on-demand storage work out. It’s another victim of a venture capital-subsidized business offering a convenient service at an unsustainable price.

The startup fought for a second wind after selling off its physical storage operations to competitor Clutter in May. Then sources tell me it tried to build a whitelabel software platform for letting brick-and-mortar merchants rent stuff like drills or tents as well as sell them so Omni could get out of hands-on logistics. But now the whole company is folding, with Coinbase hiring roughly 10 of Omni’s engineers.

“They realized that the core business was just challenging as architected” a source close to Omni tells TechCrunch. “The service was really great for the consumer but when they looked at what it would take to scale, that would be difficult and expensive.” Another source says Omni’s peak headcount was around 70.

The news follows TechCrunch’s report in October that Omni had laid off operations teams members and was in talks to sell its engineering team to Coinbase. Omni had internally discussed informing its retail rental partners ahead of time that it would be shutting down. Meanwhile, it frantically worked to stop team members from contacting the press about the startup’s internal troubles.

We’ll be winding down operations at Omni and closing the platform by the end of this year. We are proud of what we built and incredibl y thankful for everyone who supported our vision over the past five and a half years” an Omni spokesperson says. Omni CEO Tom McLeod did not respond to multiple requests for comment. Oddly, Omni was still allowing renters to pay for items as of this morning, though it’s already shut down its blog and hasn’t made a public announcement about its shut down.

Coinbase has reached an agreement with Omni to hire members of its engineering team. We’re always looking for top-tier engineering talent and look forward to welcoming these new team members to Coinbase” a Coinbase spokesperson tells us. The team was looking for more highly skilled engineers they could efficiently hire as a group, though it’s too early to say what they’ll be working on.

Omni originaly launched in 2015, offering to send a van to your house to pick up and index any of your possession, drive them to a nearby warehouse, store them, and bring them back to you whenever you needed for just a few dollars per month. It seemed too good to be true and ended up being just that.

Eventually Omni pivoted towards letting you rent out what you were storing so you and it could earn some extra cash in 2017. Sensing a better business model there, it sold its storage business to Softbank-funded Clutter and moved to helping retail stores run rental programs. But that simply required too big of a shift in behavior for merchants and users, while also relying on slim margins.

Omni Rentals

One major question is whether investors will get any cash back. Omni raised $25 million from cryptocurrency company Ripple in early 2018. Major investors include Flybridge, Highland, Allen & Company, and Founders Fund, plus a slew of angels.

The implosion of Omni comes as investors are re-examining business fundamentals of startups in the wake of Uber’s valuation getting cut in half in the public markets and the chaos at WeWork ahead of its planned IPO. VCs and their LPs want growth, but not at the cost of burning endless sums of money to subsidize prices just to lure customers to a platform.

It’s one thing if the value of the service is so high that people will stick with a startup as prices rise to sustainable levels, as many have with ride hailing. But for Omni, ballooning storage prices pissed off users as on-demand became less afforable than a traditional storage unit. Rentals were a hassle, especially considering users had to pick-up and return items themselves when they could just buy the items and get instant delivery from Amazon.

Startups that need a ton of cash for operations and marketing but don’t have a clear path to ultra-high lifetime value they can earn from customers may find their streams of capital running dry.

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Camp Grounded Digital Detox returns after founder’s death

Posted by | Camp Grounded, Digital Detox, digital well-being, Education, events, Exit, Forest Bronzan, Fundings & Exits, GreenTech, Health, Levi Felix, M&A, Mobile, Personnel, Startups, summer camp, TC, Time Well Spent | No Comments

Summer camp for adults and beloved tech-free weekend getaway Camp Grounded ground to a halt in 2017. Its big-hearted founder, Levi Felix, who’d espoused the joys of trading screens for nature walks, was tragically killed by brain cancer at just age 32. Left in his wake was a mourning community that had lost their digital detox rally just as everyone was realizing the importance of looking up from their phones.

As an attendee, I’d been impressed by how the founder (known as Professor Fidget Wigglesworth at camp) used playfulness and presence to transport us back to childhood, before we got hooked on the internet. But he also broke people’s addiction to shame, mandating that anyone who screwed up in a sports game or talent show announce “I’m awesome,” and be met with a cheer from the crowd, “you’re awesome!”

Attendees compete in camp-wide games

Luckily, one of Felix’s elementary school friends, Forest Bronzan, wants to write a happier ending to this story. Almost three years after it went into hibernation following its creator’s death, Bronzan has acquired Camp Grounded and its parent company Digital Detox .

Camp Grounded will relaunch in May 2020 as two back-to-back weekend retreats at Northern California’s gorgeous Camp Mendocino. Attendees will again leave their devices in Tech Check lockers run by hazmat-suit wearing staffers, assume nicknames and stop the work talk. They’ll get to play in the woods like technology never existed, indulging in Camp Grounded favorites, from archery to arts & crafts to bonfire singalongs about enthusiastic consent. However, to simplify logistics, Camp Grounded will no longer hold sessions in New York, North Carolina or Texas.

The company will also organize more four-hour Unplugged Nights in cities around the country where partiers can switch off their phones and make new friends. The idea is to give a broader range of people a taste of the Grounded lifestyle in smaller doses. Those interested in early access to tickets for all of Digital Detox’s events can sign up here.

Camp Grounded’s Tech Check staffers confiscate attendees’ devices upon their arrival (Image Credit: Daniel N. Johnson)

Meanwhile, Digital Detox will start a new business of education and certifications for K-12 schools, coaching teachers and parents on how to gently reduce students’ screentime. Schools will pay per student like a Software-as-a-Service model. Through research by a few PhDs, the company will recommend proper rules for using tech in and out of the classroom to minimize distraction, and empathetic penalties for violations.

The obvious question to ask, though, is if Bronzan is just some business guy coming to coin off the anti-tech trend and Felix’s legacy. “I’m not Apple coming in and buying the company. This isn’t a tech acquisition,” Bronzan insists at a coffee shop in San Francisco. “I knew Levi before anyone else knew Levi. We went trick-or-treating and played in school band together. I went to the first Digital Detox summit, and brought my company year after year. I’ve been involved from the beginning, seeing Levi’s passion and inspiration.”

Levi Felix and Forest Bronzan (from left) in 1996

Fidget had an innately soothing camp counselor vibe to him that Bronzan doesn’t quite capture. He’d previously built and sold Email Aptitude, a CRM and email agency, not an event or education business. But he truly seems to mean well, and he’s earned the support of Digital Detox’s team.

“My mission was to find someone that was as excited and ferocious as Levi and I were when we started Digital Detox to further it as a movement,” says Brooke Dean, Felix’s wife and co-founder. “It was imperative that the person running DD and CG had actually experienced the magic. This person had to be more than a lover of camp and nature, they also needed the hard skills and successful track record of running a company. Forest is stable, business-minded and also finds value in that very unique magic.”

Brooke Dean and Levi Felix (foreground, from left) at Camp Grounded

Bronzan tells me the acquisition includes a cash component (“We’re not talking eight figures”) and a capital investment in the business, both funded by his email company’s exit. Two other individuals and one company had also expressed interest. Dean and Felix’s brother Zev will retain equity in the company, and she’ll stay on the board of directors. The trio are launching the Levi Felix Foundation that will donate money to brain cancer research.

While moving into education might seem like a left turn for Digital Detox after throwing events since 2012, Dean says, “Levi was planning on going back to school and was deeply interested in being an academic in this field. We always believed that there needed to be evidence in order to convince the masses that being outside and connecting with other human beings ‘IRL’ is critical to our health and longevity.”

Some alarming stats the organization has already uncovered include:

  • 77% of people check or pretend to check their phone to avoid talking to others
  • 38% feel less connected to their partner or close friend due to cell phone use
  • Nearly 20% check their phone while having sex

“We want to eventually be the central source of tools on how tech is affecting lives and relationships at all age levels,” Bronzan tells me. It’s zeroing in on how compulsive behaviors like endless scrolling increase anxiety and depression, and how parents glued to their devices train children to not be present. The father of two kids under age five, Bronzan knows a weekend at camp in your 20s or 30s is too little too late to seriously address the crisis of fractured attention.

Digital Detox’s new CEO says he’s heartened by the progression of some of Felix’s ideals, as with the Time Well Spent movement. The screentime dashboards launched by tech companies don’t do enough to actually change people’s actions, he says, though, “They’re at least making some effort.” Digital Detox plans to launch a comprehensive quiz to determine how addicted you are to your phone, and Bronzan says he’d happily work with tech giants to integrate his company’s research.

On the camp for adults front, we’ve seen Burning Man go mainstream but lose some of what made it special, including a lack of cell phone reception. It’s now common to see people on the playa staring at their phones, talking about work, and stressed about the clock — all of which are prohibited at Camp Grounded. Festivals like Coachella seem to get more corporate and less mindful each year. That leaves plenty of open space for Digital Detox to fill with purposeful breaks from the default world.

Bronzan also wants to introduce more surprise and serendipity to the event calendar. Camp Grounded will experiment with a “Mystery Trip” where eight to 10 people sign up to be whisked away, only receiving a confidential briefing package the day before they show up. The point is to extract people from their routines where unhealthy habits manifest. Without connectivity, Camp Grounded hopes people will forge new connections in their minds, and with each other.

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SocialRank sells biz to Trufan, pivots to a mobile LinkedIn

Posted by | Advertising Tech, Apps, Enterprise, Exit, funding, Fundings & Exits, M&A, Mobile, Personnel, Recent Funding, Social, Startups, TC | No Comments

What do you do when your startup idea doesn’t prove big enough? Run it as a scrawny but profitable lifestyle business? Or sell it to a competitor and take another swing at the fences? Social audience analytics startup SocialRank chose the latter and is going for glory.

Today, SocialRank announced it’s sold its business, brand, assets, and customers to influencer marketing campaign composer and distributor Trufan which will run it as a standalone product. But SocialRank’s team isn’t joining up. Instead, the full six-person staff is sticking together to work on a mobile-first professional social network called Upstream aiming to nip at LinkedIn.

SocialRank co-founder and CEO Alex Taub

Started in 2014 amidst a flurry of marketing analytics tools, SocialRank had raised $2.1 million from Rainfall Ventures and others before hitting profitability in 2017. But as the business plateaued, the team saw potential to use data science about people’s identity to get them better jobs.

“A few months ago we decided to start building a new product (what has become Upstream). And when we came to the conclusion to go all-in on Upstream, we knew we couldn’t run two businesses at the same time” SocialRank co-founder and CEO Alex Taub tells me. “We decided then to run a bit of a process. We ended up with a few offers but ultimately felt like Trufan was the best one to continue the business into the future.”

The move lets SocialRank avoid stranding its existing customers like the NFL, Netflix, and Samsung that rely on its audience segmentation software. Instead, they’ll continue to be supported by Trufan where Taub and fellow co-founder Michael Schonfeld will become advisors.

“While we built a sustainable business, we essentially knew that if we wanted to go real big, we would need to go to the drawing board” Taub explains.

SocialRank

Two-year-old Trufan has raised $1.8 million Canadian from Round13 Capital, local Toronto startup Clearbanc’s founders, and several NBA players. Trufan helps brands like Western Union and Kay Jewellers design marketing initiatives that engage their customer communities through social media. It’s raising an extra $400,000 USD in venture debt from Round13 to finance the acquisition, which should make Trufan cash-flow positive by the end of the year.

Why isn’t the SocialRank team going along for the ride? Taub said LinkedIn was leaving too much opportunity on the table. While it’s good for putting resumes online and searching for people, “All the social stuff are sort of bolt-ons that came after Facebook and Twitter arrived. People forget but LinkedIn is the oldest active social network out there”, Taub tells me, meaning it’s a bit outdated.

Trufan’s team

Rather than attack head-on, the newly forged Upstream plans to pick the Microsoft-owned professional network apart with better approaches to certain features. “I love the idea of ‘the unbundling of LinkedIn’, ala what’s been happening with Craigslist for the past few years” says Taub. “The first foundational piece we are building is a social professional network around giving and getting help. We’ll also be focused on the unbundling of the groups aspect of LinkedIn.”

Taub concludes that entrepreneurs can shackle themselves to impossible goals if they take too much venture capital for the wrong business. As we’ve seen with SoftBank, investors demand huge returns that can require pursuing risky and unsustainable expansion strategies.

“We realized that SocialRank had potential to be a few hundred million dollar in revenue business but venture growth wasn’t exactly the model for it” Taub says. “You need the potential of billions in revenue and a steep growth curve.” A professional network for the smartphone age has that kind of addressable market. And the team might feel better getting out of bed each day knowing they’re unlocking career paths for people instead of just getting them to click ads.

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SmartNews raises $92M at a $1.2B valuation

Posted by | ACA Investments, Apps, funding, Fundings & Exits, Japan Post Capital Co., Media, Mobile, Recent Funding, smartnews, Startups | No Comments

Looks like there’s still money to be made in news aggregation — at least according to the investors backing the news app SmartNews.

The company is announcing the close of a $92 million round of funding at a valuation of $1.2 billion. The funding was led by Japan Post Capital Co. and ACA Investments, with participation from Globis Capital Partners Co., Dentsu and D.A. Consortium.

This includes the $28 million that SmartNews announced in August, and it brings the startup’s total funding to $182 million.

News aggregation apps seemed to everywhere a few years ago, and while they haven’t exactly disappeared, they didn’t turn into unicorns, with many of them acquired or shut down.

However, Vice President of U.S. Marketing Fabien-Pierre Nicolas told me that SmartNews has a few unique advantages. For one thing, it uses machine learning rather than human curation to “thoughtfully generate a news discovery experience” that’s personalized to each user.

SmartNews team

Secondly, he said that many news aggregators treat the publishers creating the content that they rely on “like a commodity,” whereas SmartNews treats them as “true partners.” For example, it’s working with select publishers like Business Insider, Bloomberg, BuzzFeed and Reuters on a program called SmartView First, where articles are presented in a custom format that gives publishers more revenue opportunities and better analytics.

Lastly, he said SmartNews has focused on only two key markets — Japan (where the company started) and the United States. And it sounds like one of the main goals with the new funding is to continue growing in the United States.

Nicolas also suggested that there are some broader trends that SmartNews is taking advantage of, like the fact that the shift to mobile news consumption is still underway, particularly for older readers.

And then there’s “the loss of trust in some news sources — political news, especially,” which makes SmartNews’ curated approach seem more valuable. (It also recently launched a News From All Sides feature to show coverage from different political perspectives.)

As for monetization, he said SmartNews remains focused on advertising.

Yes, there’s a growing interest in subscriptions and paywalls, which is also reflected in subscription news aggregators like Apple’s News+, but Nicolas said, “Eighty-five to ninety percent of Americans are not subscribing to news media. We believe those 85 to 90 percent have a right to have quality information as well.”

Update: Also worth noting is that SensorTower says SmartNews has been downloaded 45 million times since the beginning of 2014, with 11 million of those downloads in 2019.

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