Eric Tan is Senior Vice President of IT and Business Services Coupa, a leader in business spend management and a former Battery portfolio company.
Ever since the pandemic hit the U.S. in full force last March, the B2B tech community keeps asking the same questions: Are businesses spending more on technology? What’s the money getting spent on? Is the sales cycle faster? What trends will likely carry into 2021?
Recently we decided to join forces to answer these questions. We analyzed data from the just-released Q4 2020 Outlook of the Coupa Business Spend …
When Salesforce bought Slack earlier this week for $27.7 billion, it was in some ways the end of a startup fairytale. Slack was the living embodiment of the Silicon Valley startup success fantasy. It started as a pivot from a game company, of all things. It raised $1.4 billion, went from zero to a $7 billion valuation to IPO, checking off every box on the startup founder’s wish list.
Then quite suddenly this week, Slack was part of Salesforce, plucked off the market for an enormous sum of money.
While we might not ever know the back (Slack) room maneuvering that went …
Last week, AliveCor, a nine-year-old, 92-person company whose small, personal electrocardiogram devices help users detect atrial fibrillation, bradycardia, and tachycardia from heart rate readings taken from their own kitchen tables, raised $65 million from investors.
Today, it’s clearer why investors — who’ve now provided the Mountain View, Ca., company with $169 million altogether — are excited about its prospects. AliveCor just received its newest FDA clearance under the agency’s software as a medical device designation for an upgrade that generates enough detail and fidelity that AliveCor says its cardiological services can now serve as stand-in for the vast majority of cases when cardiac patients are not in front of their doctor.
Specifically, the company says the FDA-cleared update can detect premature atrial contractions, premature ventricular contractions, sinus rhythm with wide QRS.
In a world where the pandemic continues to rage and people remain hesitant to visit a hospital, these little steps add up. In fact, CEO Priya Abani, along with AliveCor founder and chief medical officer David Albert, formerly the chief clinical scientist of cardiology at GE, say AliveCor’s “Kardia” devices have been used to record nearly 15 million EKG recordings since March of this year, which is up over 70% year-over-year.
They also claim a 25% increase year-over-year in what they call physician-patient connections, meaning doctors specifically asking their patients to use the device, either at their medical office or at the patient’s home. Indeed, the pair says that while the company has focused historically on consumer sales, so much new business is coming through doctor referrals that roughly one out of every two of its devices is now sold through these recommendations.
Patients still need to pay out of pocket for AliveCor’s personal EKG devices, one of which currently sells for $89 while a more sophisticated model sells for $139.
The company also more recently rolled out a subscription product for $99 per year that “unlocks” additional features, including monthly summaries of a customer’s heart data, and hopefully soon, says Abani, access to cardiologists who will be able to answer questions in lieu of one’s own cardiologist.
Abani — who joined AliveCor last year from Amazon, where she was a general manager and director of Alexa — says other offerings are also in the works that should help customers measure their hypertension and blood pressure. She adds that the company more broadly sees itself as becoming a way for people to manage chronic conditions from home and that, if things go AliveCor’s way, employers will begin offering the service to employees as a way for them to take better care of their own heart health.
In the meantime, AliveCor’s bigger push into the enterprise appears tied not only to COVID and its ripple effects but also to competition on the consumer front from Apple Watch, which also now enables wearers to records the electrical pulses that make one’s heart beat and to determine whether the upper and lower chambers are their heart are in rhythm.
Though AliveCor has sung Apple’s praises for raising awareness around heart health, last year owing to shrinking sales, AliveCor stopped making an earlier product called the KardiaBand that was an FDA-cleared ECG wristband designed for use with Apple Watches.
AliveCor’s products are currently sold in 12 countries, including India, South Korea, and Germany, and it has clearance to sell in more than 37 altogether.
In addition to selling directly to customers through its site, its devices are available to buy through Best Buy, CVS, and Walgreens.
Very worth noting: Neither Apple nor AliveCor can detect actual heart attacks. While both can detect atrial fibrillation, acute heart attacks are not associated with atrial fibrillation.
MindTickle, a startup that is helping hundreds of small and large firms improve their sales through its eponymous sales readiness platform, said on Monday it has raised $100 million in a new financing round.
SoftBank Vision Fund 2 led the Pune and San Francisco-headquartered startup’s new financing round, which is a combination of debt and equity. Existing investors Norwest Venture Partners, Accel Partners, Canaan, NEA, NewView Capital, and Qualcomm Ventures also participated in the round, which according to a person familiar with the matter, valued the eight-year-old startup at roughly $500 million, up from about $250 million last year.
The vast majority of this $100 million fund is equity investment, said Krishna Depura, co-founder and chief executive of MindTickle, in an interview with TechCrunch. He declined to disclose the specific amount, however, or comment on the valuation.
We used to live in a seller’s world, where buyers had a small selection of choices from which they could pick their products. “You wanted to buy a car, there would be only one new car model every four years. Things have changed,” said Depura, noting that customers today have no shortage of companies trying to sell them similar lines of products.
While that’s great for customers, it means that companies have to put more effort to make a sale. Regardless of what these firms are attempting to sell, they are competing with dozens of other companies, if not more, and trying to reach customers whose patience is dropping at an alarming level.
A decade ago, as Depura watched Facebook and gaming firms like Zynga develop addictive products and services, he wondered if some of these learnings could be baked directly into modern age sales efforts. That was the inception of MindTickle, which now helps companies train their customer-facing teams.
MindTickle, whose name is inspired from the idea of gamifying mindsets, allows companies to train and upskill their salespeople at scale, and uses role playing methods to help them practice their pitch, and how they should handle a customer’s queries.
MindTrickle helps companies train their salespeople in a way that makes the learning feels like a game. (MindTickle)
Depura said the platform helps salespeople measure their improvement in revenue metrics and offers feedback on the calls they made. The platform utilizes machine learning engines to serve personalized remediations and reinforcements to salespeople, he said.
More than 200 enterprises, including more than 40 of the Fortune 500 and Forbes Global 2000 firms, are among MindTickle’s clients today — though, citing confidential agreements, the firm said it can’t disclose several names. Some of the names it did share include MongoDB, Nutanix, Qualtrics, Procore, Square, Janssen, Cloudera, Dexcom, Merck & Co., and Benetton Group.
As for the business side, the startup said its revenue has grown by over 170% in the past year and it is hopeful to end the year at an annual recurring revenue of more than $30 million. Like several other SaaS startups, MindTickle has also been immune to the virus.
In fact, it has seen a surge in its customer base and usage in recent months as firms shut offices and moved work to remote platforms to avoid their exposure to the coronavirus, said Depura. “Today, our platform is being used in ways we had not even envisioned,” he said, adding that at some firms, finance departments and HR teams have also moved to MindTickle. “We are seeing a major shift.”
“MindTickle’s track record of growth, quality of product and marquee customer base highlights their strengths,” said Sumer Juneja, Partner at SoftBank Investment Advisers, in a statement. “By delivering engaging and personalized training to users, MindTickle is uniquely placed to support businesses to increase revenue generation and extend critical capabilities within their existing workforce.” The Japanese investment group, which began conversations with MindTickle about three months ago, says it is exploring more investments in SaaS categories.
The new fund will allow MindTickle, which employs about 400 people in the U.S., Europe, and India, to further establish this new category, said Depura. The startup is also developing new product features and will deploy the new funds to further grow in Europe, and the U.S., which is already one of its key markets.
Our all-hands-on-deck coverage of DoorDash’s S-1 is a good illustration of Extra Crunch’s mission: timely analysis of current and future technology trends that serves founders and investors. We have a talented team, and as today’s coverage shows, they’re just as good as they are fast.
The stories that follow are an overview of Extra Crunch from the last five days. The full articles are only available to members, but you can use discount code ECFriday to save 20% off a one or two-year subscription. Details here.
Thanks very much for reading Extra Crunch this week. I hope you have a great weekend!
“Error number one (and two) is to raise the wrong amount of money and to do it at the wrong time,” he says. “They can also put all their eggs in one basket too early. I made that mistake.”
You can find business writing that explores best practices anywhere, which is why we hunt down stories that are firmly rooted in data or personal experience (which includes success and failure).
How COVID-19 accelerated DoorDash’s business
Image Credits: DoorDash
The coronavirus pandemic looms large in DoorDash’s S-1 filing.
According to the food-delivery platform, “58% of all adults and 70% of millennials say that they are more likely to have restaurant food delivered than they were two years ago,” and “the COVID-19 pandemic has further accelerated these trends.”
As in other sectors, the pandemic didn’t wave a magic wand — instead, it hastened trends that were already in play: consumers love convenience, which means DoorDash’s gross order volume and revenue were tracking well before the virus started to shape our lives.
“It’s your call on how to balance the factors and decide whether or not to buy into the IPO, but this one is going to be big,” writes Alex Wilhelm in a supplemental edition of today’s The Exchange.
The VC and founder winners of DoorDash’s IPO
SAN FRANCISCO, CA – SEPTEMBER 05: DoorDash CEO Tony Xu speaks onstage during Day 1 of TechCrunch Disrupt SF 2018 at Moscone Center on September 5, 2018 in San Francisco, California. (Photo by Kimberly White/Getty Images for TechCrunch)
None of us knew DoorDash would release its S-1 filing today, but Danny Crichton jumped on the story “so we can see who is raking in the returns on the country’s delivery startup champion.”
After estimating the value of the respective ownership stakes held by DoorDash’s four co-founders, he turned to the investors who participated in rounds seed through Series H.
Some growth funds are about to look very good after this IPO, and each founder is looking at hundreds of millions, he found.
But even so, their diminished haul of about $1.3 billion is “a sign of just how much dilution the co-founders took given the sheer amount of capital the company fundraised over its life.”
Fintech VC keeps getting later, larger and more expensive
Investors sent stacks of cash to late-stage fintech companies in Q3 2020, but these sizable rounds may also point to shrinking opportunities for early-stage firms, reports Alex Wilhelm in this morning’s edition of The Exchange.
2020 could be a record year for fintech VC in Europe and North America, but are these “huge late-stage dollars” actually “a dampener for new fintech startups trying to get off the ground?”
Accelerators embrace change forced by pandemic
Devin Coldewey interviewed the leaders of three startup accelerators to learn more about the adaptations they’ve made in recent months:
David Brown, founder and CEO, Techstars
Cyril Ebersweiler, founder HAX, venture partner at SOSV
Due to travel bans, shelter-in-place orders and other unknowns, they’ve all shifted to virtual. But accelerators are intensive programs designed to indoctrinate founders and elicit brutally honest feedback in real time.
Despite the sudden shift, that boot-camp mindset is still in effect, Devin reports.
“Cutting out the commute time in a busy city leaves founders with more time for workshops, mentor matchmaking, pitch practice and other important sessions,” said Fernandez. “Everybody just has more flexibility and tranquility.”
Said Ebersweiler: “People are for some reason more participative and have more feedback than physically — it’s pretty strange.”
Greylock’s Asheem Chandna on ‘shifting left’ in cybersecurity and the future of enterprise startups
Image Credits: Greylock
In a recent interview with Greylock partner Asheem Chandna, Managing Editor Danny Crichton asked him about the buzz around no-code platforms and what’s happening in early-stage enterprise startups before segueing into a discussion about “shift left” security:
“Every organization today wants to bring software to market faster, but they also want to make software more secure,” said Chandna.
“There is a genuine interest today in making the software more secure, so there’s this concept of shift left — bake security into the software.”
Square and PayPal earnings bring good (and bad) news for fintech startups
In California, non-competition agreements can’t be enforced and a court has ruled that customer contact lists aren’t trade secrets.
That doesn’t mean salespeople who switch jobs can start soliciting their former customers on their first day at the new gig, however.
Before you jump ship — or hire a salesperson who already has — read this overview of California’s trade secret laws.
“Even without litigation, a former employer can significantly hamper a departing salesperson’s career,” says Nick Saenz, a partner at Lewis & Llewellyn LLP, who focuses on employment and trade secret issues.
As public investors reprice edtech bets, what’s ahead for the hot startup sector?
Image: Bryce Durbin / TechCrunch
News of a highly effective COVID-19 vaccine appeared to drive down prices of the three best-known publicly traded edtech companies: 2U, Chegg and Kahoot saw declines of about 20%, 10% and 9%, respectively after the report.
Are COVID-19 tailwinds dissipating, or did the market make a correction because “edtech has been categorically overhyped in recent months?”
Dear Sophie: What does a Biden win for tech immigration?
Image Credits: Sophie Alcorn
What does President-elect Biden’s victory mean for U.S. immigration and immigration reform?
I’m in tech in SF and have a lot of friends who are immigrant founders, along with many international teammates at my tech company. What can we look forward to?
Brynn Putnam has a lot to feel great about. A Harvard grad and former professional ballet dancer who opened the first of what have become three high-intensity fitness studios in New York, she then launched a second business in 2016 when — while pregnant with her son — she was exercising at home and couldn’t find a natural way watch a class on her laptop or phone. Her big idea: to install a mirrored screen in users’ homes that’s roughly eight square feet and through which they could exercise along to all manner of streamed and on-demand exercise classes through a subscription package costing just $39 per month.
If you’ve followed the home fitness craze, you may know already that idea, Mirror, quickly took off with celebrities, who gushed about the product on social media. The company also attracted roughly $75 million in venture funding across several fast rounds. Indeed, by the end of last year, people had bought “tens of thousands” of Mirrors, according to Putnam, and she was beginning to envision Mirror’s as content portal that might feature fashion, enable doctor’s visits, and bring both kids classes and therapy into the home, among other things. As she told The Atlantic back in January, “We view ourselves as the third screen in people’s homes.”
Then, in June, the company sold for $500 million in cash — including a $50 million earn-out — to the athleisure company Lululemon. For Putnam, the deal was too compelling, allowing her to secure the future of her company, which continues to run as a subsidiary. Investors might have liked it, too, given that it meant a fast return on their investment, not to mention that Mirror had steep competition, including from Peloton, the biggest giant in the home fitness market.
Still, as the pandemic has raged on, it’s easy to wonder what the young company might have become, given the amount of time that people and their children are spending at home and in front of their screens. As it happens, that’s not something about which Putnam says she spends time worrying about, including as Lululemon begins to put more muscle behind Mirror — which Putnam is still running with a 125 employees.
Just today, for example, Lululemon announced that it is installing Mirrors in 18 of its now 506 U.S. locations, including in San Francisco, Washington, D.C., and Miami. Lulemon hasn’t start selling products directly through Mirror yet but “shoppable content” is “certainly on our radar,” says Putnam. And the company’s revenues, expected earlier this year to reach $100 million, and now on target to surpass $150 million revenue, she says.
We talked with Putnam late week about life at Lululemon, what could have been, and what will be in a chat that’s been edited lightly for length. (You can listen to the full conversation here.)
TC: People who follow the company know why you started Mirror, but how, exactly, did you start Mirror?
BP: In the case of Mirror, I had this concept for the product, and then really, the first step was buying a Raspberry Pi, a piece of one-way glass, and an Android tablet, and assembling it in my in my kitchen to see if this idea in my mind would be able to work and come to life.
TC: Did you take any coding classes? People might not imagine that a former ballet performer with a chain of fitness studios would put something together like that in her kitchen.
BP: No, I’ve been very fortunate to have a husband who has a bit of a development background. And so he helped me to put the first little bit of code into the Mirror and just really ensure that the concept I had in my mind could be brought to life. And then from there, obviously, over time, we hired a team.
TC: Are they manufactured in the States? In China? How did you start figuring out how to put those pieces together?
BP: I had heard a lot of hardware horror stories about teams working with design agencies to design these beautiful products and who, by the time they actually got to manufacturing, found out that something wasn’t feasible about their design when it came to commercialization or just running out of money in the process. So I actually went backwards. I drew a sketch on a napkin and did a small set of bullets of the things that I thought were really just crucial to make the product a success. And then I went to find factories in China that were familiar with digital signage, working with large pieces of glass, large mirrors, learned about their systems and processes, and then brought it back to the U.S. to a local manufacturer here on the East Coast to refine into a prototype. And then we eventually moved to Mexico when we were ready to scale.
TC: The mirror is about $1,500 dollars. How did you go about winning the trust of consumers that would lead them to make such a sizable investment?
BP: When you’re when you’re building an innovation product, you can’t really compete on specs and features like you do with phones or laptops. So you’re really building building a brand, which means that you’re telling stories. And in our case, we spent a lot of time, from the very early days, really imagining the life of our members and figuring out how to craft that story and tell that story.
And then we were fortunate early on to have members fall in love with the product. And then they started to tell our story for us. So once you have that customer flywheel that starts to kick in, your job becomes much easier.
TC: You had actors, celebrities, designers, and social media influencers talking about their Mirrors. Was it just a matter of sending it off to a few people who started getting online and sharing [their enthusiasm for the product] with their followers? Was it that simple?
BP: We knew that we wanted to make big bets early on to make the Mirror brand seem larger and more established than it was, because it’s a premium product in a new category. And we wanted people to trust in us and the brand. And so we did things like out-of-home advertisements quite early, we moved into television quite early, and we also did some very strategic early celebrity placements. But the way in which the celebrity placements grew and expanded was very much not intended and was just kind of a fascinating early example of the network effects of the product. One celebrity would get it and then another would see it in their home. Or they would see it in their stylist’s home or their agent’s home. And it spread through that community very, very quickly in one of the earliest examples of member love for us.
TC: How did you convince early adopters that your business had staying power, and were investors persuaded as quickly?
BP: Trying to assure customers that they wouldn’t invest in this Mirror, and then the company would go out of business in a few years and they would be they’d be left with a piece of hardware but no access to the content or the community that they’d fallen in love with was very important. It was one of the factors in deciding to partner with Lululemon and have the incredible brand stability and love of such a premium global brand.
In terms of fundraising, I think we were we were really fortunate to have a product that once you saw it, you got it and fell in love with it in a market that was clearly big and growing, with a really good competitive data point in Peloton.
TC: Who started that conversation with Lululemon? Were you talking to Peloton and other potential acquirers?
BP: I’ve been really fortunate to actually work with Lululemon for my entire fitness career. There was a team of Lululemon educators here in New York who were the very first clients of my studio business, and frankly, in many ways were responsible for helping that business to grow and thrive and to give me confidence as a first-time small business owner. Then we reconnected with Lululemon about a year before the acquisition as an investor; they made a small minority investment in the company. And we began to work together on various projects . . .From there, really, the partnership just grew. Mirror was not for sale. We were not looking for an acquirer. But it’s really your responsibility as a founder to always be weighing your vision, your responsibility to your team and your responsibility to your shareholders. And so when the opportunity presented itself — before COVID actually — it felt like really just too good an opportunity to pass up.
TC: But you also you had ambitions of turning this into a much broader content portal where you would maybe have doctor visits and other things, which I would think won’t happen now.
BP: The vision for Mirror very much remains the same and we’re excited to continue to expand the types of content that we offer via the Mirror platform, really with an eye toward any type of immersive experience that makes you a better version of yourself. So I think you will see a broader range of content from us in the coming years.
TC: You’ve mention in the past as a selling point that Mirror is a product that’s used by families. Is there children’s programming or is that coming soon?
BP I think one of the things that surprised us but delighted us about Mirror has been the number of households that have over two members. More than 65% of our households have over two members, which means that you’re often getting younger members of the household involved. I do think that is a function of both the versatility of the platform and the fact that multiple people can participate in more content. At the same time, we’ve actually seen the number of users under 20 grow about 5x during the COVID months as young adults have returned home to be with their their families or teenagers have started doing remote schooling. So we’ve leaned into that with what we call “family fun” content that’s designed to be performed by the whole family together.
TC: Do you see a secondary market for refurbished Mirrors in the future? Will there be a second version, if there isn’t already?
BP: We’ll obviously continue to to refine the hardware over time, but the real focus of the business is through improving the content, community and experience, and so for us — unlike Apple, where the goal is to really release a new model every year and continue to have folks upgrade the hardware — we focus on providing updates via the software and the content, so that we’re continuing to add value onto the baseline experience.
TC: What can people look forward to on this front?
BP: We’re taking a major step toward building a connected community through our community feature set launching this holiday, including a community feature that enables members to see and communicate with each other and their instructor; face offs that allow members to compete head-to-head against another member of the community and earn points as you hit your target heart rate zones; and friending, so you can find and follow your friends in the Mirror community to share your favorite workouts, join programs together and cheer each other on.
TC: Are you still selling Mirrors to hotels and business outside of Lululemon?
BP: We do have b2b relationships. You can find mirrors in hotels, small gyms, buildings, residences, and then obviously direct-to-consumer through the Mirror website, the Lululemon website, and both of our stores
TC: When you look at Peloton now and how its stock has completely exploded this year, do you think ever that you should have hung on a little longer? Do you ever think ‘maybe I sold too soon?’
I’ve woken up every day really for my entire career kind of focused on the same mission but trying to solve the problem and achieve my vision and in different ways. Which is: I really believe that confidence in your own skin is the foundation of a good and happy life. And fitness is an incredible tool for building that confidence that carries over into your personal relationships, your work performance, your friendships. And so for me, that’s always really been the North Star, which is, ‘How do we get more Mirrors into more homes and provide more access to to that self confidence?’ So I spend very little time comparing to competitors and much more time focused on our members’ needs and how to meet them.
But then, this week’s rally launched, and more earnings results came in. Generally speaking, the Q3 numbers from SaaS and cloud companies have been medium-good, or at least good enough to protect historically stretched valuations when comparing present-day revenue multiples to historical norms.
This is great news for yet-private startups that have had to deal with a recession, an uneven and at-times uncertain funding market, an election cycle and other unknowns this year. Wrapping 2020 with a market rally and strong earnings from public comps should give private software companies a halo heading into the new year, assisting them with both fundraising and valuation defense.
Of course, there’s still a lot more data to come in, markets are fickle and many SaaS companies will report next month, having a fiscal calendar offset by a month from how you and I track the year. But after spending time on the phone this week with JFrog’s CEO, BigCommerce’s CEO and Ping Identity’s CFO, I think things are turning out just fine.
Let’s get into what we’ve learned.
Growth and expectations
Kicking off, Redpoint’s Jamin Ball, a venture capitalist who unconsciously moonlights as the research desk for the The Exchange during earnings season, has a roundup of earnings results from this week’s set of SaaS and cloud stocks that reported. As you will recall, last week we were slightly unimpressed by its cohort of results.
As we can see, there was a single miss amongst the group in Q3. Unsurprisingly, that company, SurveyMonkey, was also one of three SaaS companies to project Q4 revenue under street expectations. My read of that chart is seeing a little less than 80% of the group that did project Q4 guidance that bests expectations is bullish, as were the Q3 results, which included a good number of companies that topped targets by at least 10%.
Inside of the data are two narratives that I want to explore. The first is about COVID-related friction, and the second is about COVID-related acceleration. Every company in the world is experiencing at least some of the former. For example, even companies that are seeing a boom in demand for their products during the pandemic must still deal with a sales market in which they cannot operate as they would like to.
For software companies, reportedly in the midst of a hastening digital transformation, the question becomes whether or not the COVID’s minuses are outweighing its pluses. We’ll explore the matter through the lens of three companies that The Exchange spoke with this week after they reported their Q3 results.
Of our three companies this week, Ping Identity had the hardest go of it; its stock fell sharply after it dropped its Q3 numbers, despite beating earnings expectations for the period.
The company’s revenue fell 3%, while its annual recurring revenue (ARR) rose by 17%. Why did its stock fall if it came in ahead of expectations? You could read its Q4 guidance as slightly soft. In the above chart it’s marked as a slight beat, but its low-end came in under analyst expectations, creating the possibility of a projected miss.
Investors, betting on Ping’s move to SaaS being accretive both now and in the long-term, were not stoked by its Q4 forecast.
Building a SaaS company from the ground up is never easy. In fact, it’s generally a grueling, all-consuming process that strains every fiber in your being.
But it is much, much more difficult if you approach it without a tried and true process. After starting and scaling five successful companies, I can tell you that there absolutely is a repeatable process to building a successful SaaS business, one that can reliably guide you to product-market fit and then help you quickly scale.
That doesn’t mean it’s easy, but it does mean that you won’t waste years of your life pursuing a solution that nobody wants.
Begin with finding the right problem
In the earliest stages, the process begins by finding the right problem to solve. At this point, you likely already have a few hypotheses about that problem. But no matter your conviction, you must test those hypotheses against a consistent set of criteria. For example, these are the questions that my co-founder and I used to evaluate the earliest concept of our current company, Drift:
Is the problem big enough?
Is the market big enough?
Does the problem have a recurring use case?
Can we build the solution for the problem?
If this sounds like a simple, straightforward exercise, it’s because it is. But not enough entrepreneurs ask themselves these questions at the beginning of their journey. We successfully avoided wasting months or even years of precious time building products that didn’t fit these criteria. This simple step will save you an incredible amount of pain and aggravation.
The only way to find product-market fit
Once you settle on a problem to solve, it’s time to build a barebones product that solves it and to then test that product against the market.
My co-founder Elias and I approached it this way: First, we personally spent hours each day in communities like LinkedIn, Twitter and Product Hunt, giving folks early access to our product and asking them for as much feedback as they could offer.
We were happy if they responded in the comments or to our direct messages, but we always went deeper by asking them to speak over the phone or on a video chat. We also hit the pavement by going to in-person Meetups and events around our hometown of Boston. We even took flights out to small events around the country so that we could interact with potential customers in-person.
If this sounds inordinate, it isn’t. This is the kind of attention that you need to devote to gathering intelligence from potential customers, so that you can relentlessly laser in on a product that they will actually use, value and pay for.
Atmos wants to make designing a house as simple as a single click. Well, that vision is now getting a double click from VCs.
The company, which we profiled back in July, announced today that it raised another $4 million, this time from Evan Moore at Khosla Ventures, real estate strategic investors like David Gerster at JLL Spark and Lennar board member Scott Stowell as well as individuals like Adam Nash of Dropbox and TikTok star Josh Richards, who I guess has turned that whole concept of hype houses into a real estate investment thesis. Or something.
That’s on top of the company’s earlier $2 million seed round, bringing the total fundraised to $6 million if this desk calculator is functioning.
Atmos has made even more progress since they graduated from YC earlier this year. According to CEO Nick Donahue, users have started designing the “first dozen homes” on the platform, and the first home designed through Atmos has now broken ground on construction.
The company has also done an acquihire to expand its team, and it is growing its technology to allow users to more easily visualize their housing designs within the context of specific property lots.
Earlier this week I asked startups to share their Q3 growth metrics and whether they were performing ahead or behind of their yearly goals.
Lots of companies responded. More than I could have anticipated, frankly. Instead of merely giving me a few data points to learn from, The Exchange wound up collecting sheafs of interesting data from upstart companies with big Q3 performance.
Naturally, the startups that reached out were the companies doing the best. I did not receive a single reply that described no growth, though a handful of respondents noted that they were behind in their plans.
Regardless, the data set that came together felt worthy of sharing for its specificity and breadth — and so other startup founders can learn from how some of their peer group are performing. (Kidding.)
Let’s get into the data, which has been segmented into buckets covering fintech, software and SaaS, startups focused on developers or security and a final group that includes D2C and fertility startups, among others.
Obviously, some of the following startups could land in several different groups. Don’t worry about it! The categories are relaxed. We’re here to have fun, not split hairs!
Numerated: According to Numerated CEO Dan O’Malley, his startup that helps companies more quickly access banking products had a big Q3. “Revenue for the first three quarters of 2020 is 11X our origination 2020 plan, and 18X versus the same period in 2019,” he said in an email. What’s driving growth? Bank digitization, O’Malley says, which has “been forced to happen rapidly and dramatically” in 2020.
BlueVine: BlueVine does banking services for SMBs; think things like checking accounts, loans and payments. The company is having a big year, sharing with TechCrunch via email that it has expanded its customer base “by 660% from Q1 2020 to” this week. That’s not a revenue metric, and it’s not Q3-specific, but as both Numerated and BlueVine cited the PPP program as a growth driver, it felt worthy of inclusion.
Harvest Platform: A consumer-focused fintech, Harvest helps folks recover fees, track their net worth and bank. In an email, Harvest said it “grew well over 1000%+” in the third quarter and is “ahead of its 2020 plan” thanks to more folks signing up for its service and what a representative described as “economic tailwinds.” The savings and investing boom continues, it appears.
Uniphore: Uniphore provides AI-based conversational software products to other companies used for chatting to customers and security purposes. According to Uniphore CEO Umesh Sachdev, the company grew “320% [year-over-year] in our Q2 FY21 (July-sept 2020),” or a period that matches the calendar Q3 2020. Per the executive, that result was “on par with [its] plan.” Given that growth rate, is Uniphore a seed-stage upstart? Er, no, it raised a $51 million Series C in 2019. That makes its growth metrics rather impressive as its implied revenue base from which it grew so quickly this year is larger than we’d expect from younger companies.
Text Request: An SMS service for SMBs, Text Request grew loads in Q3, telling TechCrunch that it “billed 6x more than we did in 2019’s Q3,” far ahead of its target for doubling billings. A company director said that while “customer acquisition was roughly on par with expectations,” the value of those customers greatly expanded. I dug into the numbers and was told that the 6x figure is for total dollars billed in Q3 2020 inclusive of recurring and non-recurring incomes. For just the company’s recurring software product, growth was a healthy 56% in Q3.
Notarize: Digital notarization startup Notarize — Boston-based, which most recently raised a $35 million Series C — is way ahead of where it expected to be, with a VP at the company telling TechCrunch that during “the first week of lockdowns, Notarize’s sales team got 3,000+ inquiries,” which it managed to turn into revenues. The same person added that the startup is “probably 5x ahead of [its] original 2020 plan,” with the substance measured being annual recurring revenue, or ARR. We’d love some hard numbers as well, but that growth pace is spicy. (Notarize also announced it grew 400% from March to July, earlier this year.)
BurnRate.io: Acceleprise-backed Burnrate.io hasn’t raised a lot of money, but that hasn’t stopped it from growing quickly. According to co-founder and CEO Robert McLaws, BurnRate “started selling in Q4 of last year” so it did not have a pure Q3 2019 versus Q3 2020 metric to share. But the company managed to grow 3.3x from Q4 2019 to Q3 2020 per the executive, which is still great. BurnRate provides software that helps startups plan and forecast, with the company telling TechCrunch with yearly planning season coming up, it expects sales to keep growing.
Gravy Analytics: Location data as a service! That’s what Gravy Analytics appears to do, and apparently it’s been a good run thus far in 2020. The company told TechCrunch that it has seen sales rise 80% year-to-date over 2019. This is a bit outside our Q3 scope as it’s more 2020 data, but we can be generous and still include it.
ChartHop: TechCrunch covered ChartHop earlier this year when it raised $5 million in a round led by Andreessen Horowitz. A number of other investors took part, including Cowboy Ventures and Flybridge Capital. Per our coverage, ChartHop is a “new type of HR software that brings all the different people data together in one place.” The model is working well, with the startup reporting that since its February seed round — that $5 million event — it has grown 10x. The company recently raised a Series A. Per a rep via email, ChartHop is “on-target” for its pre-pandemic business plan, but “far ahead” of what it expected at the start of the pandemic.
Credo: Credo is a marketplace for digital marketing talent. It’s actually a company I’ve known for a long-time, thanks to founder John Doherty. According to Doherty, Credo has “grown revenue 50% since June, while only minimally increasing burn.” Very good.
Canva: Breaking my own rules about only including financial data, I’m including Canva because it sent over strong product data that implies strong revenue growth. Per the company, Canva’s online design service has seen “increased growth over both Q2 and Q3, with an increase of 10 million users in Q3 alone (up from 30 million users in June).” Thirty-three percent user growth, from 30 to 40 million, is impressive. And, the company added that it saw more team-based usage since the start of the pandemic, which we presume implies the buying of more expensive, group subscriptions. Next time real revenue, please, but this was still interesting.