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December 12, 2018
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Silicon Valley

Robot couriers scoop up early-stage cash

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Much of the last couple of decades of innovation has centered around finding ways to get what we want without leaving the sofa.

So far, online ordering and on-demand delivery have allowed us to largely accomplish this goal. Just point, click and wait. But there’s one catch: Delivery people. We can never all lie around ordering pizzas if someone still has to deliver them.

Enter robots. In tech-futurist circles, it’s pretty commonplace to hear predictions about how some medley of autonomous vehicles and AI-enabled bots will take over doorstep deliveries in the coming years. They’ll bring us takeout, drop off our packages and displace lots of humans who currently make a living doing these things.

If this vision does become reality, there’s a strong chance it’ll largely be due to a handful of early-stage startups currently working to roboticize last-mile delivery. Below, we take a look at who they are, what they’re doing, who’s backing them and where they’re setting up shop.

The players

Crunchbase data unearthed at least eight companies in the robot delivery space with headquarters or operations in North America that have secured seed or early-stage funding in the past couple of years.

They range from heavily funded startups to lean seed-stage operations. Silicon Valley-based Nuro, an autonomous delivery startup founded by former engineers at Alphabet’s Waymo, is the most heavily funded, having raised $92 million to date. Others have raised a few million.

In the chart below, we look at key players, ranked by funding to date, along with their locations and key investors.

Who’s your backer?

While startups may be paving the way for robot delivery, they’re not doing so alone. One of the ways larger enterprises are keeping a toehold in the space is through backing and partnering with early-stage startups. They’re joining a long list of prominent seed and venture investors also eagerly eyeing the sector.

The list of larger corporate investors includes Germany’s Daimler, the lead investor in Starship Technologies. China’s Tencent, meanwhile, is backing San Francisco-based Marble, while Toyota AI Ventures has invested in Boxbot.

As for partnering, takeout food delivery services seem to be the most active users of robot couriers.

Starship, whose bot has been described as a slow-moving, medium-sized cooler on six wheels, is making particularly strong inroads in takeout. The San Francisco- and Estonia-based company, launched by Skype founders Janus Friis and Ahti Heinla, is teaming up with DoorDash and Postmates in parts of California and Washington, DC. It’s also working with the Domino’s pizza chain in Germany and the Netherlands.

Robby Technologies, another maker of cute, six-wheeled bots, has also been partnering with Postmates in parts of Los Angeles. And Marble, which is branding its boxy bots as “your friendly neighborhood robot,” teamed up last year for a trial with Yelp in San Francisco.

San Francisco Bay Area dominates

While their visions of world domination are necessarily global, the robot delivery talent pool remains rather local.

Six of the eight seed- and early-stage startups tracked by Crunchbase are based in the San Francisco Bay Area, and the remaining two have some operations in the region.

Why is this? Partly, there’s a concentration of talent in the area, with key engineering staff coming from larger local companies like Uber, Tesla and Waymo . Plus, of course, there’s a ready supply of investor capital, which bot startups presumably will need as they scale.

Silicon Valley and San Francisco, known for scarce and astronomically expensive housing, are also geographies in which employers struggle to find people to deliver stuff at prevailing wages to the hordes of tech workers toiling at projects like designing robots to replace them.

That said, the region isn’t entirely friendly territory for slow-moving sidewalk robots. In San Francisco, already home to absurdly steep streets and sidewalks crowded with humans and discarded scooters, city legislators voted to ban delivery robots from most places and severely restrict them in areas where permitted.

The rise of the pizza delivery robot manager

But while San Francisco may be wary of a delivery robot invasion, other geographies, including nearby Berkeley, Calif., where startup Kiwi Campus operates, have been more welcoming.

In the process, they’re creating an interesting new set of robot overseer jobs that could shed some light on the future of last-mile delivery employment.

For some startups in early trial mode, robot wrangling jobs involve shadowing bots and making sure they carry out their assigned duties without travails.

Remote robot management is also a thing and will likely see the sharpest growth. Starship, for instance, relies on operators in Estonia to track and manage bots as they make their deliveries in faraway countries.

For now, it’s too early to tell whether monitoring and controlling hordes of delivery bots will provide better pay and working conditions than old-fashioned human delivery jobs.

At least, however, much of it could theoretically be done while lying on the sofa.

News Source = techcrunch.com

Mexican venture firm ALL VP has a $73 million first close on its latest fund

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Buoyed by international attention from U.S. and Chinese investors and technology companies, new financing keeps flowing into the coffers of Latin American venture capital firms.

One day after the Brazilian-based pan-Latin American announced the close of its $150 million latest fund comes word from our sources that ALL VP, the Mexico City-based, early stage technology investor, has held a first close of $73 million for its latest investment vehicle.

The firm launched its first $6 million investment vehicle in 2012, according to CrunchBase, just as Mexico’s former President Enrique Peña Nieto was coming to power with a pro-business platform. One which emphasized technology development as part of its strategy for encouraging economic growth.

ALL VP founding partner Fernando Lelo de Larrea said he could not speak about ongoing fundraising plans.

And while the broader economy has stumbled somewhat since Nieto took office, high technology businesses in Mexico are surging. In the first half of 2018, 82 Mexican startup companies raised $154 million in funding, according to data from the Latin American Venture Capital Association. It makes the nation the second most active market by number of deals — with a number of those deals occurring in later stage transactions.

In this, Mexico is something of a mirror for technology businesses across Latin America. While Brazilian startup companies have captured 73% of venture investment into Latin America — raising nearly $1.4 billion in financing — Peru, Chile, Colombia and Argentina are all showing significant growth. Indeed, some $188 million was invested into 23 startups in Colombia in the first half of the year. 

Overall, the region pulled in $780 million in financing in the first six months of 2018, besting the total amount of capital raised in all of 2016.

It’s against this backdrop of surging startup growth that funds like ALL VP are raising new cash.

Indeed, at $73 million the first close for the firm’s latest fund more than doubles the size of ALL VP’s capital under management.

ALL VP management team

But limited partners can also point to a burgeoning track record of success for the Mexican firm. ALL VP was one of the early investors in Cornershop — a delivery company acquired by Walmart for $225 million earlier this year. Cornershop had previously raised just $31.5 million and the bulk of that was a $21 million round from the Silicon Valley-based venture capital firm, Accel.

International acquirers are making serious moves in the Latin American market, with Walmart only one example of the types of companies that are shopping for technology startups in the region. The starting gun for Latin American startups stellar year was actually the DiDi acquisition of the ride-hailing company 99 for $1 billion back in January.

That, in turn, is drawing the attention of early stage investors. In fact, it’s venture capital firms from the U.S. and international investors like Naspers (from South Africa) and Chinese technology giants that are fueling the sky-high valuations of some of the region’s most successful startups.

Loggi, a logistics company raised $100 million from SoftBank in October, while the delivery service, Rappi, raked in $200 million in August, in a round led by Andreessen Horowitz and Sequoia Capital.

In a market so frothy, it’s no wonder that investment firms are bulking up and raising increasingly large funds. The risk is that the market could overheat and that, with a lot of capital going to a few marquee names, should those companies fail to deliver, the rising tide of capital that’s come in to the region could just as easily come back out.

 

News Source = techcrunch.com

Envoy raises $43 million to digitize your office

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The office might not seem like an area in desperate need of disruption, but Envoy — a Silicon Valley company used to sign in over 100,000 visitors at offices across the world each day; and a TechCrunch SF office neighbor!has raised $43 million to do just that.

The company started life five years digitizing the sign-in book with a simple iPad-based approach, and it has moved on to office deliveries with an automated system that simply involves scanning a barcode. In both cases, alerts are routed directly to the person collecting the goods or visitor using an app.

The concept is simple: no more pen and paper, no calls or prompts, everything goes digital.

The result is an easier life for office workers and more efficiency for front desk staff, who have more time for important items. A basic version of Envoy is available for free, but the feature-rich options include two-tiered plans ($99/$249 per month) and bespoke packages for more advanced integrations.

This new Series B capital takes Envoy to $59.5 million raised to date. The round was led by Menlo Ventures with participation from existing backers Initialized Capital and Andreessen Horowitz. Envoy’s previous round was a $15 million Series A in 2015, and its seed investors include Marc Benioff as well as Initialized Capital partners Gary Tan and Alexis Ohanian.

Envoy has certainly expanded since that first $1.5 million seed deal. CEO and founder Larry Gadea, who spent four years at Google after joining at 19 and later worked for Twitter, told TechCrunch in an interview that its customer base spans 72 countries. Over 32 million visitors have been signed in to date and Gadea is particularly proud that 80 percent of its 10,000 daily companies — which includes well-known names like Yelp, Mailchimp and Rakuten — are based outside of Silicon Valley. That, he rightly asserts, is evidence that the issue isn’t just a Silicon Valley/first world problem like so many ideas spun out of The Valley can be.

“The growth has been absolutely nuts. It’s a very viral product… people see it, use it and then take it back to their company,” Gadea, who joined Google from high school in Canada, explained. “The majority of our deals happening through inbound.”

Child prodigy Larry Gadea was plucked from high school in Canada by Google after the company discovered a plug-in he had developed for its desktop search service

Organic growth is a good start, but $43 million is a lot of money and it’ll be used to go push things further still and expand the Envoy team which is currently at around 100 people. You can expect more new office digitizations from the company since its ultimate goal is to make the entire office smarter. That could include products like meeting room booking and other small pieces which, when put together, Gadea hopes will allow workers to concentrate on their work not unnecessary admin. Just as Envoy has done with front desk staff.

“We’re known for the front desk and sign-in but where I think it’s really interesting, and where our future is, is that the rest of the office is just so broken,” he explained. “There’s so much low-hanging fruit we can go after.”

Gadea explained a little more in an Envoy blog post announcing the new round:

Though we’ve helped modernize over 10,000 lobbies with automated iPad-based sign-in, and started bringing some order to the chaos of the mailroom, the rest of the workplace remains largely untouched: people are losing their keys/badges (and being locked out of their office!), meeting rooms are reserved but are unoccupied, lights/heating are left on after-hours, there’s all sorts of out-of-place things that nobody’s reporting, etc. Where are the products to fix all those things? And to unify them all together.

The ultimate vision is a kind of ‘office OS’ platform that other companies can build off. Gadea compares the potential impact to what Nest has done to the home with its smart products, which started with the thermostat.

Gadea is still working on a name for the platform, and he isn’t saying exactly what features it might include. Certainly, now that there’s an additional $43 million in the kitty, expectations for what might (first) appear to be a modest proposal for the front desk have been raised.

News Source = techcrunch.com

Lessons from building Brex into a billion-dollar startup

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When I think about my experience as an immigrant and entrepreneur in Silicon Valley, I remember growing up in Brazil and how we saw tech founders and CEOs as kings. We imagined what it would be like to assume the throne.

But these weren’t just any kings. Silicon Valley was the kingdom of nerds and underdogs. We identified with these guys, they were just like us. We were fed the myth of a Silicon Valley meritocracy, and the illusion that all you needed was ambition, determination, and a good idea to meet the right person and get funded.

What we didn’t understand was that this myth was not completely rooted in reality. Not everyone has access to the American Dream, and those who do have a track record of success before they’re given their moment to prove, or in our case, pitch ourselves.

Part of this disconnect was cultural. In Brazil, when I began my first startup, Pagar.me, a payment processing company, my co-founder Pedro Franceschi and I were two 16 year-old kids who learned how to code before we were ten. While it was hard for people to take us seriously initially—I mean, would you quit your job to work for two 16 year- olds? Being so young also worked to our advantage; it revealed that we were passionate, driven, and invested in tech at an age that we didn’t need to be.

Once we got our start-up off the ground, our employees were as invested in us as we were invested in them and the company. That’s because in Brazil, most of us grew up with parents that stayed their whole lives at the same company. You grew with the company, and that’s the approach we took when it came to hiring for our first company: who did we see sharing our same vision and growing with us?

Coming to the United States was almost a completely opposite experience. The barrier of entry was much higher. You have to go to the right college, graduate from right incubator programs, develop relationships with the right VCs, and have at least one successful startup under your belt before anyone would even consider booking a meeting with you.

Pedro and I had to carefully position ourselves before we even got to the Valley. When we finally did get to the U.S., we had already launched a successful startup and we were accepted to Stanford. Soon after, we were accepted by Y-Combinator, and that’s where we built relationships with the key players that would open up the doors for future meetings.

With our current startup, Brex,  we found that there weren’t just cultural differences at play, but different approaches we needed to take in order for our business to be successful. For example, in Brazil, we bootstrapped our first startup, and as a result, we had to find our product-market fit immediately. When you are so cash-constrained, it also limits how much you can build your company, and you think in terms of short-term wins instead of sustained growth. Your growth strategy is confined and you’re constantly reacting to your immediate client demands.

In the U.S., VCs and angel-investors aren’t interested in the short-term. They’re interested in long-term growth and how you are going to deliver 10x profits over a ten year period. Our strategy could no longer be: plan as we go and grow with our customer. Instead, we needed to deliver a roadmap, and when that roadmap changed or evolved, communicate those changes and adopt a culture of transparency.   

Additionally, we learned how difficult it is to find and retain  talent in the U.S.; it can feel like a Sisyphean task. Millennials for example, spend less than two years on average at a job, and if you spend six years or more at the same company, recruiters will actually ask you: “why?” So how can you build a company for the long-term in an environment where employees are not personally invested in the growth of your company?

We also learned that many successful tech startups offer stock options to their early employees, but as the company evolves and changes over time, those same stock options are not offered to future employees. This creates the exact opposite of a meritocracy. Why would a new employee work harder, longer, and bring more to the table if you are not going to be compensated for it?

Instead of using this broken model, we have invested in paying our team higher wages upfront, and based on performance, we award our team members with stock options. We want to be a company that people are proud of working at longterm, and we want to create a culture that is merit-based.

While some of the myths that we first believed in about Silicon Valley are now laughable looking back, they were also really instructional as to how we wanted to build our company and what pitfalls we wanted to avoid.

Even though nearly half of tech startups are founded by immigrant entrepreneurs, we have a cultural learning curve in order to have the opportunity to be “the next unicorn.” And maybe that’s the point, we’re experiencing a moment in time during which myths and unicorns no longer serve us, and what we need instead is the background, experience, and vision to create a company that is worth the hype.

News Source = techcrunch.com

Playing the global game, Sequoia can cut checks for up to $1 billion

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As the shadow of SoftBank (and its $100 billion fund) looms large over the investment landscape, Sequoia Capital is pushing the upper limits of the checks it’s willing to write to global growth-stage companies up to $1 billion. With a B.

That’s the word from Sequoia’s global managing partner Doug Leone speaking onstage at Disrupt San Francisco.

Thankfully for Leone, the firm has closed all of its U.S. and global funds, to support those unprecedently massive checks.

While the firm hasn’t yet cut a check for a cool billion (Leone joked that he “doesn’t have a pacemaker yet”), the head of one of Silicon Valley’s preeminent investment funds did say that Sequoia has written $400 million checks twice already. Alas, Leone wouldn’t say whether those commitments were made to companies in the U.S. or in what is increasingly becoming Sequoia Capital’s new largest market — China.

Half the firm’s investments are now made in China, which is attracting more and more attention as not only a competitor to Silicon Valley, but a leader in its own right when it comes to global growth and innovation.

Sequoia was one of the early firms that ventured out from Silicon Valley to explore the market in China in the early part of the new millennium. And while Kleiner Perkins, DFJ, and other leading firms of the dot-com boom stumbled as they made their way along China’s digital silk road, Sequoia has found incredible success from its base in Beijing (nearly 6,000 miles from its Silicon Valley home).

“We sensed by 2025 it was going to be a globalized world,” Leone said. “We didn’t go to Europe because it was large but not growing. We didn’t go to Vietnam, because it was growing but not large.”

Instead, the firm went to China. To succeed in China, Leone noted, it is critically important to find a local team and let that team make their own decisions. And the Sequoia team found a perfect local partner in Neil Shen — the leader of the firm’s China operations. “If we went to China and made decisions from the U.S., we would fail,” Leone said.

With the help of Shen’s decision-making prowess, it’s no understatement to say that Sequoia Capital has been one of the architects of the current explosion of Chinese entrepreneurial talent. And as parallels are increasingly drawn between the U.S. startup culture and the culture in China, Leone says that they’re “similar in character.” “Both dream about changing the world,” Leone said. The difference? “Chinese founders have half another gear because they’re a little more desperate.”

Whether that desperation comes from the breakneck pace of competition that famed VC Kai-Fu Lee alluded to yesterday at Disrupt, or to an increasingly regulation-happy and controlling Beijing government, is an open question.

As Leone looks to the future of China’s development, he’s thinking that the tight grip that Xi Jinping has placed around the country will begin to loosen and that the Chinese market will open up to foreign competitors (something that entrepreneurs and investors have been hoping would come to pass for several decades… and still has yet to materialize). “Four or five years from now things are going to be a little different,” Leone said. “There’s a lot of pressure now that China is going to be more open over time.”

If Sequoia’s global managing partner is correct, then maybe Silicon Valley startups will see themselves on a more even competitive footing with their domestic counterparts in China.

Yet, even as Leone dreamed his impossible dream of a more open China, he acknowledged the heavy hand that regulators still have over business decisions. It extends from the ways companies list publicly, to the way they have to adhere to provincial- and even district-level government regulations. Indeed, China’s regulators keep the pace of public offerings controlled to try and ensure that local Chinese investors don’t lose money on the stock markets. (That policy has clearly been ineffective, given where the Shanghai Stock Exchange is today.)

“That license [to list publicly] alone is worth $500 million to $1 billion. [The market is] … much more managed and much more to please local investors,” Leone said.

That’s one reason why foreign capital continues to be attractive to Chinese companies. But it’s also why increasingly large rounds are getting raised, whether in China or in the U.S., so companies can stay private longer.

And it’s why Sequoia has been pushed to write its large checks. Indeed, Leone rebuffed any suggestion that SoftBank had really changed the firm’s investment strategy. (Sequoia has “never” lost a deal to SoftBank, Leone insisted.) Rather, market dynamics have changed, along with the need for startup companies to receive what Leone called “friendly” private capital.

“Cisco Systems went public at $300 million pre. Now we’re raising money at $30 billion pre,” Leone said. “We raised an $8 billion fund that’s global in nature to serve the founders throughout the whole journey.”

News Source = techcrunch.com

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