20 Mar

Iterable lands $50M Series C investment to expand cross-channel marketing platform

Iterable, a startup that helps companies build complex marketing campaigns across channels to reduce churn and increase usage, announced a $50 million Series C round today.

Investors include Blue Cloud Ventures, CRV, Harmony Partners, Index Ventures and Stereo Capital. Today’s investment brings the total raised to $80 million.

Company co-founder and CEO Justin Zhu says the Iterable platform captures a constant stream of data from consumers from a variety of sources to give marketers the ability to build segments or event triggers based on consumer behavior.

“Customers are streaming real-time updates of who they are, where they’re purchasing, what they’re doing in the app, what they’re up to on the website, and we’re taking all that data and making it available in real time,” Zhu explained.

Photo: Iterable

This could allow marketers to contact people based on behaviors, such as a segment of people who haven’t opened the app in two weeks. Marketers can also use event triggers to automate contact. In the classic scenario of the abandoned shopping cart, a marketer could set a trigger to send an email or an SMS message two hours after the cart was abandoned to prompt the customer to come back.

As a platform, Iterable is offering a set of tools in a single solution that marketers would have had to buy separately. “In the past, what you typically would do is cobble together a variety of point solutions. You may buy a product just for mobile and buy one just for email. You may have engineers cobble together custom code to handle the lifecycle management. With Iterable, that can be all done in one place, and it can be done by a marketer, which would be the focus for their job,” Zhu said.

He said that the company is streaming customer data from the various data sources directly to the marketers, so there is no data sharing involved with third parties. “This is a first-party data from our own customers,” he said.

The company is reporting triple digit year-over-year growth, although it would not share specific revenue numbers. Iterable has 300 customers including Box, DoorDash and Zillow. It currently has 200 employees spread across three locations including the company headquarters in San Francisco and offices in Denver and New York City.

Zhu says the company’s vision is to be a global company, and with this funding it plans to expand into Europe and Asia, as it continues to build the company.


Source: TechCrunch – Startups

19 Feb

Orai raises $2.3M to make you a better speaker

Orai, a startup building communication coaching tools, is announcing that it has raised $2.3 million in seed funding.

CEO Danish Dhamani said that he co-founded the company with Paritosh Gupta and Aasim Sani to address a need in his own life — the fact that he was “held back personally and professionally” by lackluster “communications skills and public speaking skills.”

Dhamani said he attended Toastmasters International meetings hoping to improve those skills, where he came to a surprising conclusion — that he could build an algorithm to analyze your speaking abilities and give tips on how to improve.

To be clear, Orai isn’t necessarily trying to replace groups like Toastmasters, or individual speaking coaches. However, Dhamani said the “status quo” involves a “one-to-one” approach, where a human coach gives feedback to one person. Orai, on the other hand, can coach “entire IT teams, entire student bodies.”

“I am a big advocate of personalized, one-on-one coaching as well,” he said. “Orai is not replacing that, it’s enhancing that if used together.”

The startup has created iOS and Android smartphone apps to demonstrate the technology, which offer focused lessons and then assess your progress by analyzing recordings of your voice. (I did the initial assessment, and although I was praised for not using any “filler words,” I was told that I need to slow down — something I hear a lot.)

The real business model involves selling the tools to businesses, which can then assign Orai lessons to salespeople or other teams, create their own lessons and track everyone’s progress.

Attendees of TechCrunch’s Disrupt SF hackathon may recognize the team, which presented a body language analyzer in 2017 called Vocalytics. So you can probably guess that Dhamani’s plans go beyond audio.

The funding was led by Comcast Ventures — Orai was one of the startups at Comcast’s LIFT Labs Accelerator in Philadelphia. (Currently accepting applications for its second class!) In addition to announcing the funding, Orai has signed up famed speaking coach Nancy Duarte as an advisor.


Source: TechCrunch – Startups

23 Jan

Juniper Networks invests $2.5M in enterprise tech accelerator Alchemist

Alchemist, which began as an experiment to better promote enterprise entrepreneurs, has morphed into a well-established Silicon Valley accelerator.

To prove it, San Francisco-based Alchemist is announcing a fresh $2.5 million investment ahead of its 20th demo day on Wednesday. Juniper Networks, a networking and cybersecurity solutions business, has led the round, with participation from Siemens’ venture capital unit Next47.

Launched in 2012 by former Draper Fisher Jurvetson investor Ravi Belani, Alchemist provides participating teams with six months of mentorship and a $36,000 investment. Alchemist admits companies whose revenue stream comes from enterprises, not consumers, with a bent toward technical founders.

According to numbers provided by the accelerator, dubbed the “Y Combinator of Enterprise,” 115 Alchemist portfolio companies have gone on to raise $556 million across several VC deals. Another 25 have been acquired, including S4 Capital’s recent $150 million acquisition of media consultancy MightyHive, Alchemist’s largest exit to date.

Other notable alums include Rigetti Computing, LaunchDarkly, which helps startups soft-launch features and drone startup Matternet.

Alchemist has previously raised venture capital funding, including a $2 million financing in 2017 led by GE and an undisclosed investment from Salesforce.

Nineteen companies will demo products onstage tomorrow. You can live stream Alchemist’s 20th demo day here.


Source: TechCrunch – Startups

05 Jan

Hire faster, work happier: Startups target employment with AI and engagement tools

If you have a job today, there’s a good chance you personally reached out to your employer and interviewed with other humans to get it. Now that you’ve been there a while, it’s also likely the workday feels more like a long slog than the fulfilling career move you had envisioned.

But if today’s early-stage startups have their way, your next employment experience could be quite different.

First, forget the networking and interview gauntlet. Instead, let an AI-enabled screening program reach out about a job you don’t seem obviously qualified to do. Or, rather than talk to a company’s employees, wait for them to play some online games instead. If you play similarly, they may decide to hire you.

Once you have the job, software will also make you more efficient and happier at your work.

An AI-driven software platform will deliver regular “nudges,” offering customized suggestions to make you a more effective worker. If you’re feeling burned out, head online to text or video chat with a coach or therapist. Or perhaps you’ll just be happier in your job now that your employer is delivering regular tokens of appreciation.

Those are a few of the ways early-stage startups are looking to change the status quo of job-seeking and employment. While employment is a broad category, an analysis of Crunchbase funding data for the space shows a high concentration of activity in two key areas: AI-driven hiring software and tools to improve employee engagement.

Below, we look at where the money’s going and how today’s early-stage startups could play a role in transforming the work experience of tomorrow.

Artificial intelligence

To begin, let us reflect that we are at a strange inflection point for AI and employment. Our artificially intelligent overlords are not smart enough to actually do our jobs. Nonetheless, they have strong opinions about whether we’re qualified to do them ourselves.

It is at this peculiar point that the alchemic mix of AI software, recruiting-based business models and venture capital are coming together to build startups.

In 2018, at least 43 companies applying AI or machine learning to some facet of employment have raised seed or early-stage funding, according to Crunchbase data. In the chart below, we look at a few startups that have secured rounds, along with their backers and respective business models:

At present, even AI boosters don’t tout the technology as a cure-all for troubles plaguing the talent recruitment space. While it’s true humans are biased and flawed when it comes to evaluating job candidates, artificially intelligent software suffers from many of the same bugs. For instance, Amazon scrapped its AI recruiting tool developed in-house because it exhibited bias against women.

That said, it’s still early innings. Over the next few years, startups will be actively tweaking their software to improve performance and reduce bias.

Happiness and engagement

Once the goal of recruiting the best people is achieved, the next step is ensuring they stay and thrive.

Usually, a paycheck goes a long way to accomplishing the goal of staying. But in case that’s not enough, startups are busily devising a host of tools for employers to boost engagement and fight the scourge of burnout.

In the chart below, we look at a few of the companies that received early-stage funding this year to build out software platforms and services aimed at making people happier and more effective at work:

The most heavily funded of the early-stage crop looks to be Peakon, which offers a software platform for measuring employee engagement and collecting feedback. The Danish firm has raised $33 million to date to fund its expansion.

London-based BioBeats is another up-and-comer aimed at the “corporate wellness” market, with digital tools to help employees track stress levels and other health-related metrics. The company has raised $7 million to date to help keep those stress levels in check.

Early-stage indicators

Early-stage funding activity tends to be an indicator of areas with somewhat low adoption rates today that are poised to take off dramatically. For employment, that means we can likely expect to see AI-based recruitment and software-driven engagement tools become more widespread in the coming years.

What does that mean for job seekers and paycheck toilers? Expect to spend more of your time interfacing with intelligent software. Apparently, it’ll make you more employable, and happier, too.


Source: TechCrunch – Startups

27 Nov

Social music app Playlist lets you listen to music with others in real time

A new app called Playlist aims to make music a more social experience than what’s offered today by the major music platforms like Apple Music, Pandora or Spotify, for example. In Playlist, you can find others who share your musical tastes and join group chats where you listen to playlists together in real time. You can collaborate on playlists, too.

The app, backed by investment from Stanford’s StartX fund, was founded by Karen Katz and Steve Petersen, both Stanford engineers and serial entrepreneurs. Katz previously co-founded AdSpace Networks and another social music platform, Jam Music. She also was a founding executive team member at Photobucket, and founded a company called Project Playlist, which was like a Google search for music back in the Myspace era.

Peterson, meanwhile, has 35 patents and more than a decade of experience in digital music. In the early 2000s he created the software architecture and ran the team at PortalPlayer Inc., which powered the iPod’s music player and was later sold to Nvidia for $357 million. Afterwards, he was CTO at Concert Technology, a technology incubator and intellectual property company with a focus on mobile, social and digital music services.

“The world has gone social, but music has been largely left behind. That’s a real gap,” explains Katz, as to why the founders wanted to build Playlist in the first place.

“Ever since we started listening to music from our mobile phones, it’s become an isolated experience. And music is the number one thing we do on our phones,” she says.

The idea they came up with was to unite music and messaging by synchronizing streams, so people could listen to songs together at the same time and chat while they do so.

During last year’s beta testing period, Playlist (which was listed under a different name on the App Store), saw a huge number of engagements as a result of its real-time nature.

“Out of the gate, we saw 10 times the engagement of Pandora. People have, on average, 60 interactions per hour — like chats, likes, follows, joins, adds and creates,” Katz says. 

Under the hood, the app uses a lot of technology beyond just its synchronized streaming. It also leverages machine learning for its social recommendations, as well as collaborative playlists, large-scale group chat, and behavior-based music programming, and has “Music Match” algorithms to help you find people who listen to the same sort of things you do.

The social aspects of the app involves a following/follower model, and presents playlists from the people you follow in your home feed, much like a music-focused version of Instagram. A separate Discover section lets you find more people to follow or join in other popular listening and chat sessions.

At launch, the app has a catalog of more than 45 million songs and has a music license for the U.S. It plans to monetize through advertising.

The core idea here — real-time music listening and chat — is interesting. It’s like a Turntable.fm for the Instagram age. But the app sometimes overcomplicates things, it seems. For example, importing a playlist from another music app involves switching over to that app, finding the playlist and copying its sharing URL, then switching back to Playlist to paste it in a pop-up box. It then offers a way for you to add your own custom photo to the playlist, which feels a little unnecessary as the default is album art.

Another odd choice is that it’s difficult to figure out how to leave a group chat once you’ve joined. You can mute the playlist that’s streaming or you can minimize the player, but the option to “leave” is tucked away under another menu, making it harder to find.

The player interface also offers a heart, a plus (+), a share button, a mute button and a skip button all on the bottom row. It’s… well… it’s a lot.

But Katz says that the design choices they’ve made here are based on extensive user testing and feedback. Plus, the app’s younger users — often high schoolers, and not much older than 21 — are the ones demanding all the buttons and options.

It’s hard to argue with the results. The beta app acquired more than 500,000 users during last year’s test period, and those users are being switched over to the now publicly available Playlist app, which has some 80K installs as of last week, according to Sensor Tower data.

The company also plans to leverage the assets it acquired from the old Project Playlist, which includes some 30 million emails, 21 million Facebook IDs and 14 million Twitter IDs. A “Throwback Thursday” marketing campaign will reach out to those users to offer them a way to listen to their old playlists.

The startup has raised $5 million in funding (convertible notes) from Stanford StartX Fund, Garage Technology Ventures, Miramar Ventures, IT-Farm, Dixon Doll (DCM founder), Stanford Farmers & Angels, Zapis Capital and Amino Capital.

The Palo Alto-based company is a team of six full-time.

Playlist is a free download for iOS. An Android version is in the works.


Source: TechCrunch – Startups

31 Oct

Brex has partnered with WeWork, AWS and more for its new rewards program

Brex, the corporate card built for startups, unveiled its new rewards program today.

The billion-dollar company, which announced its $125 million Series C three weeks ago, has partnered with Amazon Web Services, WeWork, Instacart, Google Ads, SendGrid, Salesforce Essentials, Twilio, Zendesk, Caviar, HubSpot, Orrick, Snap, Clerky and DoorDash to give entrepreneurs the ability to accrue and spend points on services and products they use regularly.

Brex is lead by a pair of 22-year-old serial entrepreneurs who are well aware of the costs associated with building a startup. They’ve been carefully crafting Brex’s list of partners over the last year and say their cardholders will earn roughly 20 percent more rewards on Brex than from any competitor program.

“We didn’t want it to be something that everyone else was doing so we thought, what’s different about startups compared to traditional small businesses?” Brex co-founder and chief executive officer Henrique Dubugras told TechCrunch. “The biggest difference is where they spend money. Most credit card reward systems are designed for personal spend but startups spend a lot more on business.”

Companies that use Brex exclusively will receive 7x points on rideshare, 3x on restaurants, 3x on travel, 2x on recurring software and 1x on all other expenses with no cap on points earned. Brex carriers still using other corporate cards will receive just 1x points on all expenses.

Most corporate cards offer similar benefits for travel and restaurant expenses, but Brex is in a league of its own with the rideshare benefits its offering and especially with the recurring software (SalesForce, HubSpot, etc.) benefits.

San Francisco-based Brex has raised about $200 million to date from investors including Greenoaks Capital, DST Global and IVP.  At the time of its fundraise, the company told TechCrunch it planned to use its latest capital infusion to build out its rewards program, hire engineers and figure out how to grow the business’s client base beyond only tech startups.

“This is going to allow us to compete even more with Amex, Chase and the big banks,” Dubugras said.


Source: TechCrunch – Startups

02 Oct

Balderton’s $145M ‘secondary’ fund will give shareholders in European scale-ups the chance to exit early

In what looks like a European first, the London-based early-stage venture capital firm Balderton Capital is announcing it has closed a new $145 million “secondary” fund dedicated to buying equity stakes from early shareholders in European-founded “high growth, scale-up” technology companies.

Dubbed “Balderton Liquidity I,” the new fund will invest in European growth-stage companies through the mechanism of purchasing shares from existing, early shareholders who want to liquidate some or all of their shares “pre-exit.”

“Balderton will take minority stakes, between regular fund-raising rounds, making it possible for early shareholders — including angels, seed funds, current and former founders and employees — to realise early returns, reinvest capital in the ecosystem, or reward founders and early employees,” explains the firm.

The move essentially formalises the secondary share dealing that already happens — typically as part of a Series C or other later rounds — which often sees founders take some money off the table so they can improve their own financial situation and won’t be tempted to sell their company too soon, but also gives early investors a way out so they can begin the cycle all over again. Otherwise it can literally take five to 10 years before a liquidity event happens, either via IPO or through a private acquisition, if it happens at all.

“The bigger picture is there are lots of shareholders who either want or need or have to take liquidity at some point,” Balderton partner Daniel Waterhouse tells me on a call. “Founders are one part of that… but I think the majority of this fund is more targeted at other shareholders — business angels, seed funds, maybe employees who left, founders who left — who want to reinvest their money, want to solve a personal financial issue, want to de-risk their personal balance sheets, etc. So we’re not obsessed with founders in this fund, we’re obsessed with many different types of early shareholders, which for many different reasons would like to get liquidity before the grand exit event.”

Waterhouse says that one of the big drivers for doing this now is that Balderton’s analysis suggests there is “a critical mass of interesting companies” that are in the growth stage: “businesses that have got a scalable commercial engine” and a proven commercial model. This critical mass has happened only over the last two years, which is why — unlike in Silicon Valley — we haven’t yet seen a fund of this kind launch in Europe.

“We think there’s now about 500 companies in Europe that have raised over $20 million. That doesn’t mean they are all great companies but it’s an interesting, crude data point in terms of the scale they’ve got to. As a consequence, within that 500 we expect there to be quite a lot of interesting companies for this fund to help and we obviously have a pretty good lens on the market. Through our early-stage investing, and working with companies from the early-stage through to exit, and then obviously staying in touch with companies we don’t necessarily invest in, we have a pretty good sense of that from a bottom up perspective on how many opportunities are out there.”

He explained that there are three aspects behind the secondary funding strategy. First is that by investing via secondary funding, more companies will gain access to the “Balderton platform,” which includes an extensive executive and CEO network and support with recruitment and marketing. Secondly, it is good for the ecosystem as it will not only help relieve financial pressure from founders so they can “shoot for the next growth point” but will also let business angels cash out and recycle their money by investing in new startups. Thirdly, and perhaps most importantly, Balderton thinks it represents a good investment opportunity for the firm and its LPs as secondary liquidity is “underserved as a market.”

(Separately, one London VC I spoke to said a dedicated secondary fund in Europe made sense except in one scenario: that European valuations see a price correction sometime in the future promoted by the current trajectory of available funding slowing down, which he believes will eventually happen. “Funds are 10 years so they just have to get out in time,” is how said VC framed it.)

To that end, Waterhouse says Balderton is looking to do around 15-20 investments out of the fund, but in some instances may start slowly and then buy more shares in the same company at an even later stage. It will be managed by Waterhouse with support from investment principal Laura Connell, who recently joined the VC firm.

Struggling to see many downsides to the new fund — which by virtue of being later-stage is less risky and will likely command a discount on secondary shares it does purchase — I ask if perhaps Balderton is being a little opportunistic in bringing a reasonably large amount of institutional capital to the secondary market.

“No, I don’t think so,” he replies. “What we’ve seen in our portfolio is [that] the point in time when someone is looking for liquidity isn’t set on the calendar alongside when companies do fund raising. In particular as a company gets more mature, the gap between fund raises can stretch out because the businesses are more close to profitability. And so it’s not deterministic. We want to just be there to help people who are actually looking to sell out of cycle in those points of time and at the moment have very little options. If someone wants to wait, they’ll wait.”

Finally, I was curious to know how it might feel the first time Balderton buys a substantial amount of secondary shares in a company that it previously turned its nose down at during the Series A stage. After pointing out that companies usually look very different at Series A compared to later on in their existence — and that Balderton can’t and doesn’t invest in every promising company — Waterhouse replies diplomatically: “Maybe we kick ourselves a bit, but we’re quite happy with the performance of our early funds and obviously we’ll be happy to add other new companies that are doing really well into the family.”


Source: TechCrunch – Startups

05 Sep

WSJ reports that Theranos will finally dissolve

Theranos is reportedly finally closing down for good, nearly three years after a Wall Street Journal investigation called its blood testing technology into question. The WSJ said the company, whose dramatic downfall spawned a best-selling book that’s set to be filmed with Jennifer Lawrence starring as Theranos founder and CEO Elizabeth Holmes, sent shareholders an email saying it will formally dissolve and seek to pay unsecured creditors its remaining cash in the coming months.

Holmes resigned as CEO in June after she and Theranos’ former president, Ramesh “Sunny” Balwani, were charged with two counts of conspiracy to commit wire fraud and nine counts of wire fraud in June.

Both Holmes and Balwani had already been charged with fraud by the Securities and Exchange Commission (the criminal charges are separate from the civil ones filed by the SEC). In its complaint, the SEC said the two engaged in “an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business and financial performance,” which ultimately enabled them to raise more than $700 million from investors.

Holmes and the SEC settled the charges by having Holmes agree to pay a $500,000 penalty and be barred from serving as an officer or director of a public company for 10 years. She was also required to return the remaining 18.9 million shares she obtained while engaging in fraud and relinquish voting control of Theranos.

TechCrunch has sent an email to Theranos’ public relations address asking for comment.


Source: TechCrunch – Startups

07 Aug

Don’t fear the big company ‘kill zones’

Do you worry about the so-called “kill zones” of big tech companies? The Economist thinks you should. The theory basically suggests that if your product or service is anyway threatening or accretive to one of these incumbents,  they will either force-buy your company or clone it and destroy your market.

Any entrepreneur that believes this should probably pack up now before it’s too late —  if it’s not a “kill-shot,” it will be some other perceived death-knell that ruins your company.

Starting a company has never been easier. But growing a sustainable business is still difficult  —  as it should be. If you build something customers will pay for ,  you’re going to attract competition from copycats and incumbents. Consider it another type of validation, like product-market fit: competitors think we’re right.

Welcome to being an entrepreneur  —  you are going to be constantly battling  –  lack of cash, lack of customers, aggressive competition, better-funded competitors, underperforming staff, slow-moving sales cycle, or some other as-yet-unknown. The list of pitfalls is long. But enough willpower and perseverance — “blood, sweat and tears” —  will get you to the other side. Eventually. Remember  –  the product of an overnight success is years of hard work.

If this is sounds too daunting  –  don’t do it!

If you enter a market large enough, with deep pocketed and dominant incumbents, you have your work cut out for you. Maybe a nice UI and faster workflow attracted customers and some early adopters  – but guess what  – they are copyable features. Features alone are rarely enough to win a defensible market position.

Try to ignore advice that says you should focus on building the best product as your differentiator — this does not set you up with the highest chance of success. Instead, focus on finding and serving a targeted segment of customers, with a unique set of needs, and tailor your product and service experience specifically for them.

It’s easy for features to be copied  –  but you can’t be both custom and generic at the same time. Custom is a great approach that new entrants can take to get a toehold in a larger market with larger players that must be generic (i.e. Salesforce is a generic CRM, but there are lots of vertical CRMs that successfully compete  — Wise Agent for realtors, Lead Heroes for health insurance).

Presenting a Total Addressable Market (TAM) is the bane of potentially good startups that have been schooled in “anything less than a billion-dollar opportunity isn’t interesting.” Maybe we should reframe it as Potentially Ownable Market (POM). What are the details you can build in the beginning — where your tailored approach gives you instant leadership?

Project management for chefs

Let’s use project management as an example. Maybe a new entrant starts as an app for restaurants, which helps chefs build new menus. Each task list is a “recipe,” each recipe has “ingredients,” with amounts and timing, kitchen location, suppliers, alternatives and “garnishes and sauces.” The app integrates with the stock system and POS, and helps chefs predict inventory needs and staffing based on recipe times/complexity.

The founder has looked around and this is the only project management app that focuses on chefs, giving him an instant potentially ownable market. The business might be able to thrive in this segment alone and become the dominant player with its own kill zone.

Maybe this is the first step; the company gets profitable early growth and becomes sustainable, which funds development to grow the business into other vertical and complementary areas. Over time the business will grow into a large TAM  —  a far better approach than starting off in a large market with clear winners already.

Avoid the battle entirely by creating your own category.


Source: TechCrunch – Startups

11 Jul

GrubMarket gobbles up $32M led by GGV for its healthy grocery ordering and delivery service

As consumers become more discerning about the food they eat, a wave of startups has emerged that is catering to that demand with convenient alternatives to the more ubiquitous options that are available today. One of these, GrubMarket — which sources organic and healthy food directly from producers and then delivers it to other businesses (Whole Foods is a customer) as well as consumers at a discount of 20-60 percent over other channels — is today announcing a $32 million round to grow its already profitable business, including making acquisitions and expanding on its own steam as it eyes a public listing.

“We are looking to buy companies to make more revenues ahead of an upcoming IPO,” said Mike Xu, the founder and CEO. He said GrubMarket is “in proactive steps” to expand from its home base in California to the East Coast, starting in New York and New Jersey, by October this year. The plan, he said, will be to file with the SEC sometime between the end of this year and early 2019, with the IPO taking place in the second half of 2019.

E-commerce, and in particular food-related businesses with perishable items and associated waste, can be tricky when it comes to margins, and indeed, there have been many casualties in the world of food startups. Xu said in an interview that GrubMarket is already profitable and working at a $100 million run rate.

One of the reasons it’s profitable may also be the same reason you may have never heard of GrubMarket. Currently, between 60 and 70 percent of its business is in the B2B space. Xu says that customers number in the thousands and include offices, grocery stores and restaurants across the San Francisco Bay Area, Los Angeles, Orange County and San Diego.

And so, if you don’t know GrubMarket, you might know some of its customers, which include all WeWorks between San Diego and San Francisco, Whole Foods, Blue Apron, Hello Fresh and Chipotle. GrubMarket has also cornered some very specific niches: It has become the biggest mushroom supplier in all of Northern California, and it’s the biggest supplier of Hawaiian farm produce in the Bay Area.

Another point in the company’s favor is the technology it uses. Working directly with farmers and other producers, GrubMarket has built apps that allow it and its partners to manage the logistics of the business in an efficient way. The idea will be to bring more AI to the platform over time: for example, to be able to run better modelling to figure out how much fruit and veg might sell during a given season, and how to price items.

GrubMarket also is dabbling in areas that you might not normally associate with a grocery-on-demand delivery company: it built an educational app called Farmbox, which — when you play it — can be used to collect points to spend on GrubMarket; and it’s also exploring how blockchain technology can be used in a “next-generation open platform for direct farm-to-table.”

Xu says that as the company continues to grow, it will shift more into direct-to-consumer deliveries to complement its wholesale business.

This latest round is a mixture of equity and debt and is being led by GGV with other previous investors Fusion Fund (formerly New Gen Capital) and Great Oaks Venture Capital participating, along with new investors Max Ventures, Castor Ventures, Bascom Ventures, Millennium Technology Value Partner, Trinity Capital Investment, Investwide Capital and others. The company is not publicly disclosing its valuation; it has raised around $64 million to date.

Many eyes are on Amazon these days, and what moves it might make next in groceries after acquiring Whole Foods, ramping up its own Pantry offerings, courting restaurants for delivery and making its own meal kits. This is not a question that keeps up Xu at night, however.

“Food is the largest and biggest opportunity in e-commerce,” he said, estimating that today the total value for the global food and agricultural industry is around $9 trillion (versus $8 trillion in 2017), with only about one percent of buying done online. “That’s a big enough opportunity to have a few giant companies, and not just Amazon.”

It’s also an opportunity that could sustain some slightly smaller companies, too: One of my favorite e-commerce businesses in England is a service that I’ve been using for years, an organic grocery delivery called Abel & Cole that brings us a box of organic fruit and vegetables (and whatever else I order on top of that) each week. Like GrubMarket, it’s working directly with smaller producers who might have otherwise found it hard-going to find a way of selling their produce directly to buyers (and buyers would have found it hard-going to ever buy directly from these producers). Unlike GrubMarket, it takes a more modest approach that doesn’t involve eventually becoming a leviathan itself. May they all be around for years to come.


Source: TechCrunch – Startups