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December 10, 2018
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General Catalyst

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

Free societies face emerging, existential threats from technology

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Silicon Valley is currently, and correctly, under fire for the failure of leading platforms such as Facebook, Google and Twitter to protect against the spread of disinformation, hate speech and efforts to disrupt our elections. I don’t know why these companies behaved as they did.

But whatever the reason – naiveté, excessive focus on near-term profits, or simply a lack of proper attention on mind-numbingly complex problems – it’s clear they have to do a better job of making sure technology makes our world safer, freer and more stable rather than the opposite.

But it’s not just these big companies that need to up their game. As venture capitalists, we need to do more to find, fund and help a new generation of technology companies that build the infrastructure and applications to deal with technology-based threats to stability and security. Yes, Facebook and Twitter must deal with unintended consequences of their massive platforms. But if history is any guide, it will be new companies that come up with the bold new visions and business models to address fundamental, once-in-a-generation challenges.

I don’t use the word fundamental lightly. Just think about all security failures you now take for granted, that once would have been unthinkable. Our PCs and other devices are patched every few hours or days, rather than every few months. We are routinely warned by merchants—sometimes even credit agencies!—to change our passwords because they’ve been hacked. We are relieved, rather than annoyed, when the credit card company calls to verify our recent purchases.

We feel abused when we read how our online identity has been monetized without our knowledge or used to micro-target us with ads by groups seeking to polarize our politics. And there are deeper-seated concerns, like the nagging fear of a terror attack or a lone-wolf gunman when we enter an airport or let our teenage kid go to a concert. Our physical and cyber selves feel threatened on a regular basis. Like it or not, we are too often under attack, as individuals, consumers and as citizens. But like the proverbial frog in a pot, we don’t seem to notice the rising water temperature.

If we stick with the status quo, that water is only going to get hotter. We already know the Russians (and the Iranians, and the North Koreans) are again targeting U.S. voting systems in advance of the midterm elections, and the Russians also have the ability to shut down large parts of our electric grid. It hasn’t happened yet, but will Americans start worrying about congregating in public spaces, whether it is to protest, attend large rallies, or go to concerts? I grew up in Pakistan, where horrific gun and bomb attacks on civilians are more common. I can’t help fear the same scourge will come to our shores.

If this sounds like scare-mongering, so be it. There is no getting around the fact that more people have more ways to do large-scale damage than ever before. Thankfully there are technologists and entrepreneurs working diligently to find ways to defend us from such harm.

Our portfolio company Evolv Technology, for example, is using advanced sensors and AI in weapons detection systems that can screen hundreds of people per hour  without making them slow down or empty their pockets and purses. Companies like ShieldAI, Convexxum, Echodyne and others are using machine vision and advanced radars/lidar technologies to prevent people from being put in harm’s way by drone-type attacks.

A drone flying and filming over Dubai

Funding such companies can be different than the deals Silicon Valley VCs are used to.  In most cases, these firms must collaborate with trusted government actors, intelligence agencies and enforcement organizations–not to mention comply with their regulations. To be successful, they need to share information with other companies, including competitors.

But I’m betting the trouble will be well worth it. History tells us that companies that overcome big obstacles to create new markets often enjoy years of rapid growth, and few competitors.

Most of all, I believe a nervous world is ready to reward companies that make it feel safer. Just as Uber and Airbnb caught the front edge of the sharing economy boom, companies whose mission is aligned with a change in the societal zeitgeist can create huge value.

Investors are already doing their part. DCVC recently invested in Fortem Technologies, and Shasta Ventures in AirSpace, which make Star Wars-ish systems of AI-based drones whose only role is to automatically detect, identify, and slam into drones that wander into unauthorized airspace — say, over a private estate, or a factory.

General Catalyst invested in Mark43, which makes a cloud platform to help police departments and their detectives investigate crimes more quickly and effectively.

While these mission-oriented companies may not provide the fastest or steepest ramp to riches, the best of these mission-oriented companies will create technology that affects each of us every day, and businesses that will be resilient to economic cycles, fads and fashion. For investors, it’s a twofer of enlightened self-interest — both as investors, and as citizens. To paraphrase JFK, we should invest in such companies “not because it is easy, but because it is hard.”

News Source = techcrunch.com

The top 10 startups from Y Combinator’s Demo Day S’18 Day 2

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59 startups took the stage at Y Combinator’s Demo Day 2  and among the highlights were a company that helps developers manage in-app subscriptions; a service that lets you create animojis from real photos; and a surplus medical equipment reselling platform. Oh… and there was also a company that’s developed an entirely new kind of life form using e coli bacteria. So yeah, that’s happening.

Based on some investor buzz and what caught TechCrunch’s eye, these are our picks from the second day of Y Combinator’s presentations.

You can find the full list of companies that presented on Day 1 here, and our top picks from Day 1 here. 

64-x

With a founding team including some of the leading luminaries in the field of biologically inspired engineering (including George Church, Pamela Silver, and Jeffrey Way from Harvard’s Wyss Institute) 64-x is engineering organisms to function in otherwise inaccessible environments. Chief executive Alexis Rovner, herself a post-doctoral fellow at the Wyss Institute, and chief operating officer Ryan Gallagher, a former BCG Consultant, are looking to commercialize research from the Institute around accelerating and expanding the ability to produce functionalized proteins and sequence-defined polymers with diverse chemistries. Basically they’ve engineered a new life form that they want to use for novel kinds of bio-manufacturing.

Why we liked it: These geniuses invented a new life form.

CB Therapeutics

Sher Butt, a former lab directory at Steep Hill, saw that cannabinoids were as close to a miracle cure for pain, epilepsy and other chronic conditions as medicine was going to get. But plant-based cannabinoids were costly and produced inconsistent results. Alongside Jacob Vogan, Butt realized that biosynthesizing cannabinoids would reduce production costs by a factor of ten and boost production 24 times current yields. With a deep experience commercializing drugs for Novartis and as the founder of the cannabis testing company, SB Labs, Butt and his technical co-founder are uniquely positioned to bring this new therapy to market.

Why we liked it: Using manufacturing processes to make industrial quantities of what looks like nature’s best painkiller at scale is not a bad idea.

RevenueCat

RevenueCat founders

RevenueCat helps developers manage their in-app subscriptions. It offers an API that developers can use to support in-app subscriptions on iOS and Android, which means they don’t have to worry about all the nuances, bugs and updates on each platform.

The API also allows developers to bring all the data about their subscription business together in one place. It might be on to something, though it isn’t clear how big that something is quite yet. The nine-month-old company says it’s currently seeing $350,000 in transaction volume every month; it’s making some undisclosed percentage of money off that amount.

Read more about RevenueCat here.

Why we liked it: Write code. Release app. Use RevenueCat. Get paid. That sounds like a good formula for a pretty compelling business.

 

Ajaib

Indonesia is a country in a transition, with a growing class of individuals with assets to invest yet who, financially, don’t meet the bar set by many wealth managers. Enter Ajaib, a newly minted startup with the very bold ambition of becoming the “Ant Financial of wealth management for Indonesia.” Why the comparison? Because China was in the same boat not long ago — a  country whose middle class had little access to wealth management advice. With the founding of Ant Financial nearly four years ago, that changed. In fact, Ant now boasts more than 400 million users.

China is home to nearly 1.4 billion, compared with Indonesia, whose population of 261 million is tiny in comparison. Still, if its plans work out to charge 1.4 percent for every dollar managed, with an estimated $370 billion in savings in the country to chase after, it could be facing a meaningful opportunity in its backyard if it gains some momentum.

Why we liked it: If Ajaib’s wealth management plans (to charge 1.4 percent for every dollar it manages) work out — and with a total market of $370 billion in savings in Indonesia — the company could be facing a meaningful opportunity in its backyard.

 

Grin

The scooter craze is hitting Latin America and Grin is greasing the wheels. The Mexico City-based company was launched by co-founder Sergio Romo after he and his partner realized they weren’t going to be able to get a cut of the big “birds” on the scooter block in the U.S. (as Axios reported). Romo and his co-founder have already lined up a slew of investors for what may be the hottest new deal in Latin America. Backers include Sinai Ventures, Liquid2 Ventures, 500 Startups, Monashees and Base10 Partners.

Why we liked it: Scooters are so 2018. But there’s a lot of money to be made in mobility, and as the challenge from Bird and Lime to Uber and Lyft in hyperlocal transit has revealed, there’s no dominant player that’s taken over the market… yet.

Emojer

Creating animated emojis made from real photos, Emojer just might be the most fun you can have with a camera. The company’s software uses deep learning algorithms to detect body parts and guides users in creating their own avatars with just a simple photo take from a mobile phone. It’s replacing deep Photoshop expertise and animation skills with a super simple interface. The avatars look very similar to Elf Yourself, a popular site that let you paste your friends’ faces on dancing Christmas elves that went viral every year at Christmastime. Founders have PhDs in machine learning and computer vision.

Why we liked it: As the company’s chief executive said, Snap was for sexting, and Facebook was hot or not, so who says the next big consumer platform couldn’t be the trojan horse of easily generated selfiemojis (akin to Elf Yourself)?

Osh’s Affordable Pharmaceuticals

Osh’s Affordable Pharmaceuticals is a public benefit corporation connecting doctors and patients with sources of low-cost, compounded pharmaceuticals. The company is looking to decrease barriers to entry for drugs for rare diseases. Three weeks ago the company introduced a drug to treat Wilson’s Disease. There was no access to the drug that treats the disease before in Brazil India or Canada. It slashes the cost of drugs from $30,000 a month to $120 per month. The company estimates it has a total addressable market of $17 billion. “Generic drug pricing is a crisis, people are dying because they can’t get access to the medicine they need,” says chief executive Alex Oshmyansky. Osh’s might have a solution.

Why we liked it: Selling lower-cost medications for rare diseases in countries that previously hadn’t had access to them is a good business that’s good for the world.

Medinas Health

Tackling a $75 billion problem of healthcare waste Medinas Health is giving hospitals an easy way to resell their used and a and supplies. The company has already raised $1 million for its marketplace to help healthcare organizations buy and sell equipment. With a seed round led by Ashton Kutcher and Guy Oseary’s Sound Ventures, and General Catalyst’s Rough Draft Ventures fund, the company is also working to lower costs for cash-strapped rural health care centers.

Why we liked it: tktk

And Comfort

Plus-size women have limited clothing options even at the largest retailers like Nordstrom and Macy’s. While a majority of American women fall into the plus-size clothing category, 100 million women are constrained to shopping for a very small percentage of options. And Comfort wants to solve the supply problem. To do this, the founders, two former Harvard classmates, are building a direct-to-consumer fashion brand with stylish, minimalist offerings for plus-size women, including tunic shirts and an apron dress. It’s very early days for the brand, but since launching in recent weeks, they’ve seen $25,000 in sales.

Why we liked it: This direct-to-consumer fashion brand is bringing higher quality, better-designed clothing options to a market that’s underserved and growing quickly. What’s not to like?

 

ShopWith

Influencers of the world are uniting on mobile app, ShopWith, which allows shoppers to browse virtual storefronts and aisles alongside their favorite fashion and beauty creators and YouTubers. Users can see exactly what products those influencers have featured and can buy them without ever leaving the app. It’s a free download and hours of commercially consumptive fun.

It’s like the QVC model, but for GenZ shoppers whose buying habits are influenced by social video content on YouTube, Instagram and Snapchat. The company revealed that one beauty influencer made $10,000 within five hours, using the ShopWith platform. The founders are former product managers with experience building social commerce products at Facebook and Amazon.

Why we liked it: The QVC for GenZ not only has a nice ring to it, it’s a recipe for making cash registers hum. A mobile-first, influencer-based shopping company is something that we’d definitely not call an impulse purchase.

News Source = techcrunch.com

Prisma co-founders raise $1M to build a social app called Capture

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Two of the co-founders of the art filter app Prisma have left to build a new social app.

Prisma, as you may recall, had a viral moment back in 2016 when selfie takers went crazy for the fine art spin the app’s AI put on photos — in just a few seconds of processing.

Downloads leapt, art selfies flooded Instagram, and similar arty effects soon found their way into all sorts of rival apps and platforms. Then, after dipping a toe into social waters with the launch of a feed of its own, the company shifted focus to b2b developer tools — and we understand it’s since become profitable.

But two of Prisma’s co-founders, Aleksey Moiseyenkov and Aram Hardy, got itchy feet when they had an idea for another app business. And they’ve both now left to set up a new startup, called Capture Technologies.

The plan is to launch the app — which will be called Capture — in Q4, with a beta planned for September or October, according to Hardy (who’s taking the CMO role).

They’ve also raised a $1M seed for Capture, led by US VC firm General Catalyst . Also investing are KPCB, Social Capital, Dream Machine VC (the seed fund of former TechCrunch co-editor, Alexia Bonatsos), Paul Heydon, and Russian Internet giant, Mail.Ru Group.

Josh Elman from Greylock Partners is also involved as an advisor.

Hardy says they had the luxury of being able to choose their seed investors, after getting a warmer reception for Capture than they’d perhaps expected — thinking it might be tough to raise funding for a new social app given how that very crowded space has also been monopolized by a handful of major platforms… (hi Facebook, hey Snap!)

But they also believe they’ve identified overlooked territory — where they can offer something fresh to help people interact with others in real-time.

They’re not disclosing further details about the idea or how the Capture app will work at this stage, as they’re busy building and Hardy says certain elements could change and evolve before launch day.

What they will say is that the app will involve AI, and will put the emphasis for social interactions squarely on the smartphone camera.

Speed will also be a vital ingredient, as it was with Prisma — literally fueling the app’s virality. “We see a huge move to everything which is happening right now, which is really real-time,” Hardy tells TechCrunch. “Even when we started Prisma there were lots of similar products which were just processing one photo for five, ten, 15 minutes, and people were not using it because it takes time.

“People want everything right now. Right here. So this is a trend which is taking place right now. People just want everything right now, right here. So we’re trying to give it to them.”

“Our team’s mission is to bring an absolutely new and unique experience to how people interact with each other. We would like to come up with something unique and really fresh,” adds Moiseyenkov, Capture’s CEO (pictured above left, with Hardy).

“We see a huge potential in new social apps despite the fact that there are too many huge players.”

Having heard the full Capture pitch from Hardy I can say it certainly seems like an intriguing idea. Though how exactly they go about selectively introducing the concept will be key to building the momentum needed to power their big vision for the app. But really that’s true of any social product.

Their idea has also hooked a strong line up of seed investors, doubtless helped by the pair’s prior success with Prisma. (If there’s one thing investors love more than a timely, interesting idea, it’s a team with pedigree — and these two certainly have that.)

“I’m happy to have such an amazing and experienced team,” adds Moiseyenkov, repaying the compliment to Capture’s investors.

“Your first investors are your team. You have to ask lots of questions like you do when you decide whether this or that person is a perfect fit for your team. Because investors and the team are those people with whom you’re going to build a great product. At the same time, investors ask lots of questions to you.”

Capture’s investors were evidently pleased enough with the answers their questions elicited to cut Capture its founding checks. And the startup’s team is already ten-strong — and hard at work to get a beta launched in fall.

The business is based in the US and Europe, with one office in Moscow, where Hardy says they’ve managed to poach some relevant tech talent from Russian social media giant vk.com; and another slated to be opening in a couple of weeks time, on Snap’s home turf of LA. 

“We’ll be their neighbors in Venice beach,” he confirms, though he stresses there will still be clear blue water between the two companies’ respective social apps, adding: “Snapchat is really a different product.”

News Source = techcrunch.com

With at least $1.3 billion invested globally in 2018, VC funding for blockchain blows past 2017 totals

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Although bitcoin and blockchain technology may not take up quite as much mental bandwidth for the general public as it did just a few months ago, companies in the space continue to rake in capital from investors.

One of the latest to do so is Circle, which recently announced a $110 million Series E round led by bitcoin mining hardware manufacturer Bitmain. Other participating investors include Tusk VenturesPantera CapitalIDG Capital PartnersGeneral CatalystAccel PartnersDigital Currency GroupBlockchain Capital and Breyer Capital.

This round vaults Circle into an exclusive club of crypto companies that are valued, in U.S. dollars, at $1 billion or more in their most recent venture capital round. According to Crunchbase data, Circle was valued at $2.9 billion pre-money, up from a $420 million pre-money valuation in its Series D round, which closed in May 2016. According to Crunchbase data, only Coinbase and Robinhood — a mobile-first stock-trading platform which recently made a big push into cryptocurrency trading — were in the crypto-unicorn club, which Circle has now joined.

But that’s not the only milestone for the world of venture-backed cryptocurrency and blockchain startups.

Back in February, Crunchbase News predicted that the amount of money raised in old-school venture capital rounds by blockchain and blockchain-adjacent startups in 2018 would surpass the amount raised in 2017. Well, it’s only May, and it looks like the prediction panned out.

In the chart below, you’ll find worldwide venture deal and dollar volume for blockchain and blockchain-adjacent companies. We purposely excluded ICOs, including those that had traditional VCs participate, and instead focused on venture deals: angel, seed, convertible notes, Series A, Series B and so on. The data displayed below is based on reported data in Crunchbase, which may be subject to reporting delays, and is, in some cases, incomplete.

A little more than five months into 2018, reported dollar volume invested in VC rounds raised by blockchain companies surpassed 2017’s totals. Not just that, the nearly $1.3 billion in global dollar volume is greater than the reported funding totals for the 18 months between July 1, 2016 and New Year’s Eve in 2017.

And although Circle’s Series E round certainly helped to bump up funding totals year-to-date, there were many other large funding rounds throughout 2018:

There were, of course, many other large rounds over the past five months. After all, we had to get to $1.3 billion somehow.

All of this is to say that investor interest in the blockchain space shows no immediate signs of slowing down, even as the price of bitcoin, ethereum and other cryptocurrencies hover at less than half of their all-time highs. Considering that regulators are still figuring out how to treat most crypto assets, massive price volatility and dubious real-world utility of the technology, it may surprise some that investors at the riskiest end of the risk capital pool invest as much as they do in blockchain.

Notes on methodology

Like in our February analysis, we first created a list of companies in Crunchbase’s bitcoin, ethereum, blockchaincryptocurrency and virtual currency categories. We added to this list any companies that use those keywords, as well as “digital currency,” “utility token” and “security token” that weren’t previously included in the above categories. After de-duplicating this list, we merged this set of companies with funding rounds data in Crunchbase.

Please note that for some entries in Crunchbase’s round data, the amount of capital raised isn’t known. And, as previously noted, Crunchbase’s data is subject to reporting delays, especially for seed-stage companies. Accordingly, actual funding totals are likely higher than reported here.

News Source = techcrunch.com

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