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December 10, 2018
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Benchmark

Contentful raises $33.5M for its headless CMS platform

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Contentful, a Berlin- and San Francisco-based startup that provides content management infrastructure for companies like Spotify, Nike, Lyft and others, today announced that it has raised a $33.5 million Series D funding round led by Sapphire Ventures, with participation from OMERS Ventures and Salesforce Ventures, as well as existing investors General Catalyst, Benchmark, Balderton Capital and Hercules. In total, the company has now raised $78.3 million.

It’s only been less than a year since the company raised its Series C round and as Contentful co-founder and CEO Sascha Konietzke told me, the company didn’t really need to raise right now. “We had just raised our last round about a year ago. We still had plenty of cash in our bank account and we didn’t need to raise as of now,” said Konietzke. “But we saw a lot of economic uncertainty, so we thought it might be a good moment in time to recharge. And at the same time, we already had some interesting conversations ongoing with Sapphire [formeraly SAP Ventures] and Salesforce. So we saw the opportunity to add more funding and also start getting into a tight relationship with both of these players.”

The original plan for Contentful was to focus almost explicitly on mobile. As it turns out, though, the company’s customers also wanted to use the service to handle its web-based applications and these days, Contentful happily supports both. “What we’re seeing is that everything is becoming an application,” he told me. “We started with native mobile application, but even the websites nowadays are often an application.”

In its early days, Contentful also focuses only on developers. Now, however, that’s changing and having these connections to large enterprise players like SAP and Salesforce surely isn’t going to hurt the company as it looks to bring on larger enterprise accounts.

Currently, the company’s focus is very much on Europe and North America, which account for about 80% of its customers. For now, Contentful plans to continue to focus on these regions, though it obviously supports customers anywhere in the world.

Contentful only exists as a hosted platform. As of now, the company doesn’t have any plans for offering a self-hosted version, though Konietzke noted that he does occasionally get requests for this.

What the company is planning to do in the near future, though, is to enable more integrations with existing enterprise tools. “Customers are asking for deeper integrations into their enterprise stack,” Konietzke said. “And that’s what we’re beginning to focus on and where we’re building a lot of capabilities around that.” In addition, support for GraphQL and an expanded rich text editing experience is coming up. The company also recently launched a new editing experience.

News Source = techcrunch.com

Upwork pops more than 50 percent in Nasdaq debut

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Upwork, the rebranded merger of oDesk and Elance, debuted on Nasdaq this morning, after dropping its S-1 about four weeks ago. Shares opened at $23.00, which represents a 53% jump — shares were priced at $15 before the opening bell by investors, a significant uptick from the company’s revised projection of $12 to $14, which was already an increase from its original $10 to $12 target. The stock trades under the ticker UPWK, and the company will fundraise approximately $102 million of new cash for its balance sheet ($187 million total with existing shareholders).

Shares are still currently up 40% compared to their original price.

I talked with Upwork CEO Stephane Kasriel this morning about the IPO road show, in which he said he took approximately 160 meetings with investors. Investors were engaged on the “combination of the strengths of the business and the strengths of the mission,“ and he was clearly excited about the engagement the offering received.

Upwork, whose antecedent companies go back almost two decades, is a positive cash flow business, albeit one growing top line revenue only about 27.6% year over year. Kasriel said that the company should be able to “compound at that rate for decades” due to the growing number of workers who freelance around the world in order to have flexible work arrangements. “When you think about which jobs are being created in the global economy, in most countries it is these knowledge jobs,” he said.

Upwork CEO Stephane Kasriel (Photo from Upwork)

In addition, “When you really take a long term view, what really matters is to be good stewards of capital,” Kasriel noted, and said that the company was very focused on areas like sales and marketing ROI. His goal is to continue to grow the company with limited dilution to shareholders, a message that apparently has been well-received.

As for Kasriel himself, he becomes a public company CEO. He was elevated to the CEO role in 2015 from SVP of Engineering – a somewhat unusual path, even in tech-obsessed Silicon Valley. He emphasized that “we are a tech company,” and noted that every day is a learning experience. “I was just on CNBC, and for introverts, what really scares me is to be on live broadcast TV,” he said.

A huge part of Upwork’s business today is focused on the enterprise, particularly complex workflows that require multiple types of talent. The company’s platform not only handles talent management, but the long array of tasks to manage people: HR, legal, procurement, information security, and others.

According to the company, it will host $1.5 billion worth of gross sales value across two million unique projects. The company estimates that its products are used by 30% of the Fortune 500.

Upwork, which has offices in Mountain View, San Francisco, and Chicago, has 1,500 employees – and as is to be expected – roughly 1,100 of them are freelancers. Kasriel said, “We use our own product, which we call drinking our own champagne.”

Among the major VC investors behind the company are Benchmark, which owned 15%, Sigma Partners, which owned 14.2%, and Globespan, T. Rowe Price, and FirstMark. The company is offering 6,818,181 new shares as well as 5,658,512 shares from existing shareholders. Citigroup, Jefferies, and RBC jointly led the book.

Now that the company has debuted, Upwork wants to refocus once again on its business following weeks of talking to investors. “We need to build this company for the ages,” Kasriel noted, and said that his message to employees was to “focus on the mission.”

News Source = techcrunch.com

Good Eggs raises $50M and eyes West Coast expansion

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Good Eggs, the food delivery service that promises “absurdly fresh” groceries and meal kits, has raised $50 million in new funding.

That looks like a big turnaround from 2015, when the company had multiple rounds of layoffs, shut down operations outside of San Francisco and brought on Bentley Hall (an executive from Plum Organics and Clif Bar) as its new CEO.

Hall said that after he took over, he spent months focused on retooling the fundamental business: “We didn’t have a single conversation about growth.” Since then, he said the company started looking at “growth with purpose” and in 2018 is ready for “thoughtful, measured expansion.”

“The first change is, we realized that we were a food company enabled by technology, versus a technology company that sells food,” Hall said.

That might sound vague, but it led to more concrete “trickle effects,” like quadrupling the number of products that Good Eggs sells to more than 1,000. Hall said the service has become people’s “primary food supplier,” with the average customer ordering from Good Eggs more than once a week. That also meant the company had to shift from next-day to same-day delivery, which he described as “table stakes in the future.”

At the same time, Hall said the company maintains its “rigorous sourcing criteria,” with 70 percent of its products sourced locally. And thanks to the Good Eggs model, where the company buys directly from local farmers and producers, customers don’t have to worry about sending a delivery person to the supermarket only to discover that the product they want isn’t available.

The new funding comes from was led by Benchmark, with additional participation from existing investors Index Ventures, Obvious Ventures, S2G Ventures, DNS Capital, Uprising and Collaborative Fund. Benchmark’s Bill Gurley is joining Good Eggs’ board of directors.

“Our team was deeply impressed by the operational discipline that Bentley and the team at Good Eggs have implemented to transform this business,” Gurley said in the funding announcement. “We made a study of what Good Eggs has achieved and believe the business is very well positioned to capture and scale the growing market of people who are passionate about the quality and provenance of the food they consume. It’s a massive opportunity.”

Good Eggs delivery remains limited to the San Francisco Bay Area, but the company said it will be expanding throughout the region and adding capacity, then launch in Southern California next year.

Good Eggs delivery

“We’re not going to grow where we sacrifice the foundation we’ve worked so hard to build, and we’re not going to grow in a way that sacrifices the customer experience,” Hall said. “We’ll grow as quickly as we can while maintaining those two principles. For us, that means expanding slowly and thoughtfully throughout the West Coast.”

And while Hall was happy to frame the Good Eggs story as a turnaround, he didn’t want to take all the credit for it.

“This is such a team effort,” he said. “I know this usually gets told as somebody came in and turned it around, but this was across the entire team. Our 260, 270 hourly employees, they get as much if not more of the credit as I do.”

News Source = techcrunch.com

Benchmark just funded a stealthy AI company founded by Qualcomm’s former head of R&D

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Nayeem Islam has spent the last eight years with chipmaker Qualcomm, where he founded its Silicon Valley-based R&D facility, recruited its entire team and oversaw research on all aspects of security, including applying analysis techniques like machine learning on mobile devices and in the network to detect threats early.

One of the group’s projects, in fact, was focused around on-device machine learning-based malware detection.

Now Islam and a group of other former execs — including from Qualcomm and Amazon, where Islam worked during the late ’90s — have created their own company that we gather is centered around a similar, enterprise-focused premise.

Though the company isn’t talking, Islam was acknowledged for a paper earlier this year titled “Javascript Instrumentation for Browser Security” earlier this year.

The new outfit, called Blue Hexagon, has notably attracted the attention of Benchmark, too. The venture firm just led a $6 million Series A round  — Blue Hexagon’s first institutional round — per a source close to the team.

More on the company as we learn it, but if we’re right about its focus, it looks to be entering into a hot space.

Earlier this month, for example, publicly traded MobileIron announced that it’s adding machine learning-based threat-detection software to its enterprise mobility management client, which it said will help address an increase in mobile attacks.

Toward that end, it has has partnered with Zimperium, a maker of machine learning-based behavioral analysis and threat detection software that monitors mobile devices for suspicious activity and apps.

The security firm Check Point is also spending an increasing amount of its time identifying the growing malware strains that plague smartphones. In September, for example, it discovered Android malware called “ExpensiveWall” lurking in about 50 apps in the Play Store, as Wired reported at the time.

The apps had cumulatively been downloaded between 1 million and 4.2 million times.

Featured Image: Jacob Kepler/Bloomberg/Getty Images

News Source = techcrunch.com

Benchmark principal Kris Fredrickson leaves for another firm

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Amidst all the drama happening between former Uber CEO Travis Kalanick and Benchmark, Kris Fredrickson has left his role as principal at Benchmark to join Coatue Management, Recode reports. Benchmark has since confirmed Fredrickson’s departure on Twitter.

This comes shortly after Sherpa Capital founder and Uber investor Shervin Pishevar called out Fredrickson for “exacerbating the crisis facing” Uber after Gautam Gupta, its then head of finance, left. In Pishevar’s allegation, he said Fredrickson helped recruit Gupta to real estate startup Opendoor.

“Benchmark principal Kris Fredrickson helped recruited Gautam Gupta, the head of finance and effectively the acting Uber CFO, to another company where he owned shares without ever informing Uber in fact, Frederickson told his partner and Uber board member Bill Gurley six months earlier, but Gurley never told Travis Kalanick, exacerbating the crisis facing the Company in May 2017 when Gupta left,” Pishevar wrote last month.

Late last month, the lawsuit between Kalanick and Benchmark was sent to arbitration. Benchmark’s lawsuit against Kalanick alleges he violated his fiduciary duty and committed fraud by seeking to “increase his power over Uber for his own selfish ends.”

But, according to Recode’s sources, the talks between Fredrickson and Coatue began before all the drama went down between Benchmark and Uber. And at Coatue, Frederickson will reportedly be upgraded to a partner role.

Featured Image: StMayQ/Shutterstock

News Source = techcrunch.com

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