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March 23, 2019
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Equity Shot: Pinterest and Zoom file to go public

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Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

What a Friday. This afternoon (mere hours after we released our regularly scheduled episode no less!), both Pinterest and Zoom dropped their public S-1 filings. So we rolled up our proverbial sleeves and ran through the numbers. If you want to follow along, the Pinterest S-1 is here, and the Zoom document is here.

Got it? Great. Pinterest’s long-awaited IPO filing paints a picture of a company cutting its losses while expanding its revenue. That’s the correct direction for both its top and bottom lines.

As Kate points out, it’s not in the same league as Lyft when it comes to scale, but it’s still quite large.

More than big enough to go public, whether it’s big enough to meet, let alone surpass its final private valuation ($12.3 billion) isn’t clear yet. Peeking through the numbers, Pinterest has been improving margins and accelerating growth, a surprisingly winsome brace of metrics for the decacorn.

Pinterest has raised a boatload of venture capital, about $1.5 billion since it was founded in 2010. Its IPO filing lists both early and late-stage investors, like Bessemer Venture Partners, FirstMark Capital, Andreessen Horowitz, Fidelity and Valiant Capital Partners as key stakeholders. Interestingly, it doesn’t state the percent ownership of each of these entities, which isn’t something we’ve ever seen before.

Next, Zoom’s S-1 filing was more dark horse entrance than Katy Perry album drop, but the firm has a history of rapid growth (over 100 percent, yearly) and more recently, profit. Yes, the enterprise-facing video conferencing unicorn actually makes money!

In 2019, the year in which the market is bated on Uber’s debut, profit almost feels out of place. We know Zoom’s CEO Eric Yuan, which helps. As Kate explains, this isn’t his first time as a founder. Nor is it his first major success. Yuan sold his last company, WebEx, for $3.2 billion to Cisco years ago then vowed never to sell Zoom (he wasn’t thrilled with how that WebEx acquisition turned out).

Should we have been that surprised to see a VC-backed tech company post a profit — no. But that tells you a little something about this bubble we live in, doesn’t it?

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

News Source = techcrunch.com

LogRocket nabs $11M Series A to fix web application errors faster

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Every time a visitor experiences an issue on your website, it’s going to have an impact on their impression of the company. That’s why companies want to resolve issues in a timely manner.  LogRocket, a Cambridge, MA startup, announced an $11 Million Series A investment today to give engineering and web development teams access to more precise information they need to fix issues faster.

The round was led by Battery Ventures with participation from seed investor Matrix Partners. When combined with an earlier unannounced $4 million seed round, the company has raised of total of $15 million.

The two founders, Matthew Arbesfeld and Ben Edelstein, have been friends since birth growing up together in the Boston suburbs. After attending college separately at MIT and Columbia, the two friends both moved to San Francisco where they worked as engineers building front-end applications.

The company idea grew from the founders’ own frustration tracking errors. They found that they would have to do a lot of manual research to find problems, and it was taking too much time. That’s where they got the idea for LogRocket .

“What LogRocket does is we capture a recording in real time of all the user activity so the developer on the other end can replay exactly what went wrong and troubleshoot issues faster,” Arbesfeld explained.

Screenshot: LogRocket

The tool works by capturing HTML and CSS code of troublesome activity of each user and putting them together in a video. When there is an error or problem, the engineer can review the video and watch exactly what the user was doing when he or she encountered an error, allowing them to identify and resolve the problem much more quickly.

Arbesfeld said the company doesn’t actually have to store video because it is capturing code related to problems instead of the entire experience. “We’re looking at frustrating moments of the user, so that we can focus on the problem areas,” he explained.

Customers can access the data in the LogRocket dashboard, or it can be incorporated into help desk software like Zendesk. The company is growing quickly with 25 employees and 500 customers in just 18 months since inception, including Reddit, Ikea, and Bloomberg.

As for the funding, they see this as the start of a long-term journey. “Our goal is to get out to a much wider audience and build a mature sales and marketing organization,” Arbesfeld said. He sees a future with thousands of customers and ambitious revenue goals. “We want to continue to use the data we have to offer more proactive insights into highest impact problems,” he said

News Source = techcrunch.com

Skymind raises $11.5M to bring deep learning to more enterprises

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Skymind, a Y Combinator-incubated AI platform that aims to make deep learning more accessible to enterprises, today announced that it has raised an $11.5 million Series A round led by TransLink Capital, with participation from ServiceNow, Sumitomo’s Presidio Ventures, UpHonest Capital and GovTech Fund. Early investors Y Combinator, Tencent, Mandra Capital, Hemi Ventures, and GMO Ventures, also joined the round/ With this, the company has now raised a total of $17.9 million in funding.

The inclusion of TransLink Capital gives a hint as to how the company is planning to use the funding. One of TransLink’s specialties is helping entrepreneurs develop customers in Asia. Skymind believes that it has a major opportunity in that market, so having TransLink lead this round makes a lot of sense. Skymind also plans to use the round to build out its team in North America and fuel customer acquisition there.

“TransLink is the perfect lead for this round, because they know how to make connections between North America and Asia,” Skymind CEO Chris Nicholson told me. “That’s where the most growth is globally, and there are a lot of potential synergies. We’re also really excited to have strategic investors like ServiceNow and Sumitomo’s Presidio Ventures backing us for the first time. We’re already collaborating with ServiceNow, and Skymind software will be part of some powerful new technologies they roll out.”

It’s no secret that enterprises know that they have to adapt AI in some form but are struggling with figuring out how to do so. Skymind’s tools, including its core SKIL framework, allow data scientists to create workflows that take them from ingesting the data to cleaning it up, training their models and putting them into production. The promise here is that Skymind’s tools eliminate the gap that often exists between the data scientists and IT.

“The two big opportunities with AI are better customer experiences and more efficiency, and both are based on making smarter decisions about data, which is what AI does,” said Nicholson. “The main types of data that matter to enterprises are text and time series data (think web logs or payments). So we see a lot of demand for natural-language processing and for predictions around streams of data, like logs.”

Current Skymind customers include the likes of ServiceNow and telco company Orange, while some of its technology partners that integrate its services into their portfolio include Cisco and SoftBank .

It’s worth noting that Skymind is also the company behind Deeplearning4j, one of the most popular open-source AI tools for Java. The company is also a major contributor to the Python-based Keras deep learning framework.

News Source = techcrunch.com

Music’s next big startup Splice raises $57.5M to sell samples

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Tech has a bad reputation for pulling money out of musicians’ pockets, but Splice is changing that. The audio sample marketplace and music production collaboration tool has now paid out $15 million to artists since 2013, doubling in the last year. Splice lets musicians sell their sounds for royalty-free use, and songs by Eminem, Ariana Grande and Marshmello that were powered by those samples have topped the charts. Splice charges $7.99 per month for unlimited access to its array of 3 million synthesizers, drum hits, vocal flares and other sounds. Despite being designed for serious musicians, Splice’s suite of tools now has 2.5 million users, up from 1.5 million a year ago.

Steve Martocci

“Music is going through a beautiful moment,” says Steve Martocci, Splice’s co-founder and CEO who formerly built and sold GroupMe. “The tailwinds from the success of streaming are great. As more people realize how big the market it, how much people want to create music, there’s a huge opportunity here.”

Now Union Square Ventures and True Ventures are seizing on that opportunity, co-leading a $57.5 million Series C for Splice. “It’s all about scale,” Martocci tells me. “We’re investing in ourselves. Continuing to build new products. Continuing to work with bigger artists. We think there’s so much about the creative process and ecosystem of musicians that needs to be fixed. We want to diversify the content available so all artists in all genres feel like we have what they need.”

The round, which includes DFJ Growth, Flybridge, Lerer Hippeau, Liontree, Founders Circle Capital and Matt Pincus, brings Splice to $104.5 million in total funding. Splice wouldn’t disclose the valuation, but using the industry standard of selling 20 percent equity for a Series C, Splice could be valued in the ballpark of $285 million. That would make it one of the top music startups that isn’t selling streaming, tickets or hardware. Its success has also begun to draw competition from companies like Native Instruments, which launched its Sounds.com marketplace last year.

Splice’s subscription revenue is pooled and then doled out to artists based on whose samples got the most downloads. Creators range from bedroom tinkerers to Drake’s Grammy-winning producer Boi-1da. Martocci confirms that artists receive the majority of Splice’s sample marketplace revenue, saying, “they’re very favorable deals.” That’s especially great for the music production industry, because a lot of Splice’s sample creators aren’t celebrity DJs; Martocci says they’re audio engineers and other “people behind the scenes getting an opportunity to step into the light with an amazing revenue opportunity, but also an opportunity to be seen for their creative contributions.”

Splice began with a eureka moment at a concert. A friend asked Martocci why there weren’t great tools for producing music like there are for building software like GroupMe. After eventually leaving his chat app that Skype acquired, Martocci connected with Splice co-founder Matt Aimonetti and discovered he’d been an audio engineer for half of his life. They saw a chance to build a GitHub for music, with version control and admin permissions for making saving and collaborating on productions simple. By 2015 Splice had launched its Sounds subscription library, and the next year began selling rent-to-own software synthesizers to make avoiding piracy affordable for creators.

Fast-forward and Martocci tells me prioritization across Splice’s different product lines will be one of its big challenges. Luckily, he has a new crew of lieutenants to help. Former product lead for Apple Music and Beats by Dre VP Ryan Walsh has joined as chief product officer because, Martocci says, “he felt like his mission in music was unfinished.” Former chief financial officer of Marvel Entertainment Chris Acquaviva is now Splice’s CFO, who offers deep licensing expertise. And bringing the creator community vibe, MakerBot’s former CHRO, Kavita Vora, has become Splice’s chief people officer.

In an era when tech public image has been tested by non-stop scandals from the industry giants, Splice is pulling in ace talent that want to work on something unequivocally positive. Martocci tells me parents tell him that their kids spend all their time playing Fortnite and making music on Splice, but the latter is screen time they’re happy to encourage.

News Source = techcrunch.com

Skedulo raises $28M for its mobile workforce management service

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Skedulo, a service that helps businesses manage their mobile employees, today announced that it has raised a $28 million Series B funding round led by M12, Microsoft’s venture fund. Existing investors Blackbird and Castanoa Ventures also participated in this round.

The company’s service offers businesses all the necessary tools to manage their mobile employees, including their schedules. A lot of small businesses still use basic spreadsheets and email to do this, but that’s obviously not the most efficient way to match the right employee to the right job, for example.

“Workforce management has traditionally been focused on employees that are sitting at a desk for the majority of their day,” Skedulo CEO and co-founder Matt Fairhurst told me. “The overwhelming majority — 80 percent — of workers will be deskless by 2020 and so far, there has been no one that has addressed the needs of this growing population at scale. We’re excited to help enterprises confront these challenges head-on so they can compete and lean into rapidly changing customer and employee expectations.”

At the core of Skedulo, which offers both a mobile app and web-based interface, is the company’s so-called “Mastermind” engine that helps businesses automatically match the right employee to a job based on the priorities the company has specified. The company plans to use the new funding to enhance this tool through new machine learning capabilities. Skedulo will also soon offer new analytics tools and integrations with third-party services like HR and financial management tools, as well as payroll systems.

The company also plans to use the new funding to double its headcount, which includes hiring at least 60 new employees in its Australian offices in Brisbane and Sydney.

As part of this round, Priya Saiprasad, principal of M12, will join Skedulo’s board of directors. “We found a strong sense of aligned purpose with Priya Saiprasad and the team at M12 — and their desire to invest in companies that help reduce cycles in a person’s working day,” Fairhurst said. “Fundamentally, Skedulo is a productivity company. We help companies, the back-office and mobile workforce, reduce the number of cycles it takes to get work done. This gives them time back to focus on the work that matters most.”

News Source = techcrunch.com

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