Pry Financials wants to make startup finances approachable for its entire team, not just the people in charge of its accounting spreadsheets. The Y Combinator alum announced today it has raised $4.2 million from Global Founders Capital, Pioneer Fund, NOMO VC, Liquid2 and Hyphen Capital.
Launched in March, Pry now has more than 200 customers and claims it has grown 35% month-over-month since YC’s Demo Day. It was founded by Alex Sailer, Tiffany Wong, Hayden Jensen and Andy Su.
Before starting Pry, Su was co-founder of InDinero, another YC alum that started as a “Mint for small businesses” before pivoting to a full-service accounting company. InDinero launched while he was still a student at U.C. Berkeley and Su eventually became responsible for its financial planning.
He told TechCrunch that most startups can’t afford accounting software like Workday Adaptive Planning. Instead, they sometimes work with outsourced CFO services, but mostly rely on spreadsheets for everything: three-way forecasts, predicting runway, hiring and contractor budgets and investor updates.
“I was the chief technical officer and over the years, I also took on the finance function, so it was kind of a dual CTO/CFO role. This was 2010 through 2020 and as technology grew, the engineering and product teams got all sorts of new tools every six months or so, whereas the finance team was just stuck in Excel,” he said.
Started as a side project was Su was still at InDinero, Pry starts at just $50 a month and replaces those spreadsheets with easy-to-understand dashboards for accounting, financial planning and scenario modeling. The dashboards connect to Quickbook, Xero or bank accounts, so numbers are continuously updated.
Pry’s clients typically start using it after they raise seed funding, because “for most first-time founders, that’s the most amount of money you have ever received, so you need to spend more time managing it and reviewing it every month. And you’re spending a lot of time on payroll each month,” Su said. Second-time founders, meanwhile, sign up for Pry because they are sick of Excel spreadsheets.
“Reviewing a spreadsheet is mind-numbingly hard,” said Su. “If you see a number that’s off, you get this weird formula if you didn’t do it yourself. Then you basically have to write a long email to the financial analyst who wrote it and hope that they get back to you before closing time.” For founders who need to update lenders or investors every month, this means a lot of work.
Pry makes the process more efficient by turning three-way reports—combinations of balance sheets, profit and loss statements and cashflow—into Financial Report dashboards, and then adding features like hiring plans, financial modeling and scenario planning.
The scenario planning feature serves as a sandbox, giving startup teams and their investors a way to predict how different situations will impact finances: for example, how much runway they have if they raise a certain amount of funding or adjust product pricing.
“We’re improving upon and trying to make decisions about the company in a collaborative way. The analogy we have is git branching, where you have your main plan, and want to try something like a new revenue model or acquiring a business, but don’t want to mess with your current strategy,” said Su. “What you can do is create a completely new branch with, say, a new pricing strategy. You can make all the changes you want and then switch back to your old branch without worrying about overriding or conflicting with it.”
Those speculative branches are also continuously updated with the company’s most recent bank account and payroll information, so founders don’t need to recreate them from scratch if they want to revisit a potential scenario later.
Pry plans to build more complex predictive tools and also integrate industry standards, like statistic and benchmarks, into templates to help founders understand what targets they should set.
Since Pry is easier to manage than a set of Excel spreadsheets, Su said it’s helped startups spot important things. For example, one founder was able to find a way to save $15,000 by catching a tax issue. Pry also helps everyone at a startup understand its finances’ even if they haven’t worked with accounting spreadsheets before. The platform will add roles and permissions soon, so founders can give or restrict access to different people, like leaders of specific departments.
Su said Pry does not compete with the accounting services many startups rely on until they can hire a head of finance, but makes it easier for startups to collaborate with them since they can share their dashboards.
“Usually early on, you can outsource to a CFO firm. That’s the norm in the business and it works pretty well for most companies. You get a part-time CFO to work really hard for a month and get your fundraising structure done,” said Su, adding “we fit into that ecosystem well.”
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The race to fund crypto’s future sure is expensive – TechCrunch
Welcome to the weekend! We made it. Barely, I think, given how tired everyone sounds on the phone and over on Twitter. But we beat the working days back all the same, which means we get to lean back and enjoy ourselves for a minute. Yes, we’re talking crypto today. Rejoice!
The race to fund crypto’s future sure is expensive
I’m impressed with the pace at which Coinbase has invested capital into other companies in the larger blockchain market. It’s a smart move, as the public U.S. company can disburse comparatively small sums (when stacked next to its revenue base) and buy both ownership and information access in startups, providing it with early-warning data regarding what’s popping. Given that Coinbase is an obvious incumbent – and gatekeeper, to some degree – in the crypto market, its investments make sense.
But there’s investing, and there’s investing. And it appears that the newly announced FTX fund is something more aggressive than what Coinbase has managed, despite its pretty quick cadence of deals.
FTX’s fund crypto will total some $2 billion and, per interviews, could be disbursed just this year. That’s a wild pace of investment, perhaps one reminiscent of how quickly a16z put its recent $2.2 billion crypto fund to work.
A few questions:
- Why does the crypto market need this much money when its user base is pretty small compared to the larger Internet?
- Why are we using so much fiat to finance crypto?
These are interlinked questions. They sum to a simple confusion of mine regarding why it’s so hard to build things in the crypto market that are useful. Coinbase and FTX exist toward the edges of the crypto world, shuttling money back and forth from the traditional economy and what could be its future. That they are investing is smart, but the amount of money they are willing to invest, along with what traditional venture capitalists are also lobbing at blockchain startups, has me somewhat confused – what’s it all being spent on?
The two major blockchains are established, and hardly new (Ethereum was thought up in 2013 and launched in 2015; the Bitcoin whitepaper came out in 2008); stablecoins exist and have a number of well, stable players; and a bunch of capital has gone to NFT marketplaces and a few crypto games. Some of which have even built modest player bases. But it feels a bit concentrated when we compare the amount of money flowing into the space to what we can see in terms of usable outcomes.
Institutional Investor reports that $32.8 billion in total was invested into “crypto and blockchain technology businesses” last year. Perhaps a lot of stuff built by that money is coming out soon that will blow us away, but now well north of a decade after Bitcoin said, “Hello, world,” I still don’t use any blockchain-powered apps or services day to day. Unless I am tinkering with one part of the crypto world for research purposes, of course.
And I spend more time online than I want to admit! Perhaps the new FTX fund will bring the mass-market blockchain product to market that isn’t merely another vehicle for speculation. Let’s wait and see, I suppose.
Fortnite (sorta!) returns to iOS, PUBG Mobile maker sues over copycats, Apple plans for alternative payments in South Korea – TechCrunch
Welcome back to This Week in Apps, the weekly TechCrunch series that recaps the latest in mobile OS news, mobile applications and the overall app economy.
The app industry continues to grow, with a record number of downloads and consumer spending across both the iOS and Google Play stores combined in 2021, according to the latest year-end reports. App Annie says global spending across iOS, Google Play and third-party Android app stores in China grew 19% in 2021 to reach $170 billion. Downloads of apps also grew by 5%, reaching 230 billion in 2021, and mobile ad spend grew 23% year-over-year to reach $295 billion.
In addition, consumers are spending more time in apps than ever before — even topping the time they spend watching TV, in some cases. The average American watches 3.1 hours of TV per day, for example, but in 2021, they spent 4.1 hours on their mobile device. And they’re not even the world’s heaviest mobile users. In markets like Brazil, Indonesia and South Korea, users surpassed five hours per day in mobile apps in 2021.
Apps aren’t just a way to pass idle hours, either. They can grow to become huge businesses. In 2021, 233 apps and games generated over $100 million in consumer spend, and 13 topped $1 billion in revenue, App Annie noted. This was up 20% from 2020, when 193 apps and games topped $100 million in annual consumer spend, and just eight apps topped $1 billion.
This Week in Apps offers a way to keep up with this fast-moving industry in one place with the latest from the world of apps, including news, updates, startup fundings, mergers and acquisitions, and suggestions about new apps and games to try, too.
Do you want This Week in Apps in your inbox every Saturday? Sign up here: techcrunch.com/newsletters
PUBG Mobile maker Krafton sues rival game maker Garena, Apple and Google, over ‘clones’
Krafton, the developer behind PlayerUnknown’s Battlegrounds,” and the maker of PUBG Mobile, last year’s No. 6 top-grossing mobile game on a global basis, is suing the app stores and a rival game maker, Garena, over copyright infringement involving Garena Online’s Free Fire games. The lawsuit alleges Garena’s games copy numerous aspects of its own, including its opening, its game structure and play, the combination and selection of weapons, armor and unique objects, locations and the overall color schemes, materials and textures. Google’s YouTube is also named in the lawsuit for hosting videos of the infringing material.
Garena has responded to the lawsuit saying, “Krafton’s claims are groundless.”
The suit aims to prove that Garena’s games — Free Fire and Free Fire MAX — aren’t just another variation on the battle royale format, but are legally infringing on Krafton’s copyright. This could get complicated as PUBG Battlegrounds itself was built using a combination of in-house work and third-party store-bought assets, the company has said in the past.
Krafton has often defended its gaming empire, having more recently won a lawsuit against cheaters. PUBG also previously settled copyright claims with NetEase, also over PUBG clones, but had dropped a similar suit with Epic Games over Fortnite in 2018.
The interesting thing about this case is that Krafton is looking to hold the app stores accountable for their roles, too. This comes at a time when Apple and Google’s power over their platforms is weakening under threat of regulation and, in some cases, new laws. There’s a very real question in the air right now about how the tech giants get to choose which apps appear on their stores, how those apps operate and how much money they deserve for hosting the apps. Krafton’s suit aims to make the app stores responsible for decisions that cut into its bottom line — like hosting rip-offs. But the company has to first prove that its popular game has, in fact, been cloned. And that’s for the court to decide.
Apple will have to allow third-party payments in South Korea
A big loss for Apple…or is it? A decision by the Korea Communications Commission (KCC) will require Apple to support third-party payment options in iOS apps for the first time in any market. But the change won’t necessarily mean developers get to keep all their in-app purchase revenue for themselves. When Google outlined its plans to comply with the new law in November, it said it would reduce the developer’s service fee by 4% if they were using an outside payment system. For example, a developer paying a 15% commission would now pay 11%. That’s better than it was before, but not what developers may want. The KCC said it will talk with Apple about its own compliance plans and iron out the details, including fee structures and when the plan will go into effect.
The law is an example of how well-intended legislation can go wrong as the platform makers can still argue they deserve a sizable commission for hosting the apps on their marketplaces, not just processing their payments.
A better way to open up to third-party payments is by getting a legislative body, regulator or court to rule that iOS apps can link to their own websites where users can pay for subscriptions, purchases and other services outside the App Store. This is effectively what Epic Games won the right to do in its lawsuit with Apple, but Apple appealed the decision and the required changes were put on hold.
Fortnite returns to iOS…kind of!
Epic Games has been engaged in a legal battle with Apple over its removal of Fortnite from the App Store and Epic’s allegations of Apple’s anti-competitive behavior. As a result of the ongoing litigation, Apple hasn’t allowed Fortnite to return to iOS — even if the company promised to “behave” and play by the current App Store rules. But now, it seems, Fortnite may have found a workaround. If the workaround actually works!
The company has launched its game on Nvidia’s game streaming service GeForce Now, which will allow mobile users on both iOS and Android to play a touch-control version via the web browser. The game, which is only in beta testing, for the time being, is different from the version that streams through GeForce Now to Android users. That one is a streamed copy of the desktop game, while the iOS version is optimized for mobile devices. Fortnite is accepting beta sign-ups with plans to open up to select members in January. If the company gets the game functional on iOS, it could make an interesting twist to Epic’s antitrust claims, as it would prove the App Store isn’t the only path for game makers to serve iOS users.
- Apple has paid out $60 billion to App Store developers in 2021, according to new data shared by the company. This refers to the amount of money developers have made on its platform, less the App Store fees. In previous years, it was easier to figure out how much Apple’s cut was, but now individual apps may pay different percentages if they’re subscription apps in year one or two, or a participant in a dedicated program that offers fee reduction, like those offered to news publishers or small businesses.
- Apple provided new figures for iOS 15 adoption. The latest OS is now installed on 72% of iPhones released in the past four years, which is lower than previous iOS updates — likely because Apple is now allowing users to stay on iOS 14 but opt to receive security updates as needed instead of having to upgrade to the new OS. On iPad, 57% of all new devices released in past four years run iPadOS 15.
- Apple released iOS 15.2.1, which patches iPhones and iPads against a HomeKit flaw that could be exploited to launch DoS attacks. The update also addresses an issue where CarPlay apps may lose touch sensitivity and a bug where Messages may not load photos sent using an iCloud link.
- Apple also addressed concerns that some carriers could be blocking iCloud Private Relay on iOS 15.2 devices after T-Mobile noted the problem was occurring on devices on its network. Apple said no carriers have blocked the service and Apple hasn’t made any changes to prevent the feature from working with carriers. T-Mobile is now saying the issue arises if users had previously disabled “Limit IP Address Tracking” in their Cellular Data settings.
- Apple announced price increases for apps and IAPs in the following regions: Bahrain, Ukraine and Zimbabwe. Other regions will not see price changes. but proceeds will be adjusted following tax changes, including The Bahamas, Oman and Tajikistan.
- Apple wiped the Wordle clones from the App Store. Wordle, an indie word game app that runs on the web, has been having a moment. The app was originally built as a side project by Josh Wardle as a gift for his partner, who loves word games. But Wordle has been growing in popularity, recently landing it a high-profile article by The New York Times. (You can read TechCrunch’s founder interview here.) That soon led to several developers looking to cash in on the app’s lack of an App Store presence. One even posted on Twitter about how many downloads his iOS version was getting. In response, Apple began pulling down the copycat apps from the App Store — an interesting decision given that Wordle itself appears to be inspired by an old TV game show, and not an original idea. We understand the developer is appealing.
- Android 13 may introduce an easier way to scan QR codes, which grew in popularity amid the pandemic as a way to send payments, read restaurant menus, communicate information and more. (The news is not official but rather provided by a “trusted source” to the blog Android Police.)
- Google is mad about iMessage and Apple’s refusal to support the RCS industry standard. After The Wall Street Journal ran an article about the peer pressure among U.S. teens to use iMessage, Android head Hiroshi Lockheimer tweeted that Apple’s iMessage lock-in was using “bullying as a way to sell products.” He later clarified he’s not asking Apple to support iMessage on Android, but thinks it should support the industry standard for modern messaging, RCS, not just the older standards, SMS and MMS — a change that would benefit iOS users, too.
- Venmo introduced a new gift-wrapping feature with eight animated designs. The feature lets users virtually “wrap” their gifts of money to family and friends alongside their payment note.
- U.S. fintech Current upped the competition among digital banking services with the launch of a new savings offering called Interest that pays a 4.00% APY. The plan is available to Current’s free and Premium (subscription) users alike. The fine print, however, is that there’s a $6,000 cap across your Savings “pods.” And the rate is paid out on a per-pod basis. Free users can only create one Pod, while subscription users can create three.
- U.S. fintech app Public announced the appointment of two new board members: Jessica Neal, former chief talent officer at Netflix and current venture partner at TCV; and Christopher J. Brummer, a professor at Georgetown, member of the Fannie Mae board of directors, and adviser to Paradigm, a firm that invests in crypto-focused companies.
- Pakistan government’s Federal Investigation Agency (FIA) has reached out to Binance about a $100 million scam operation that defrauded users in the country. The FIA said there are “thousands of victims” across the country who were deceived into transferring funds from their Binance account to other applications, which would crash and keep the funds for themselves.
- Instagram continues to benefit from TikTok’s ban in India. The app has now reclaimed the top spot in terms of total downloads as of Q4 2021 — its best position since 2014. The only other time TikTok lost its No. 1 spot in the past two years was when Zoom become No. 1 in Q2 2020.
- Instagram was also spotted testing vertical scrolling for viewing Stories in its app. Testers saw that you could still tap left and right to navigate through one person’s Stories, but moving on to the next person’s Story would require a swipe down.
- Snapchat added new messaging tools. The app added new features that allow users to chat, react and survey friends across Android and iOS. Chat Replies let you respond to individual messages in a thread within an ongoing chat, similar to iMessage. Users can also take advantage of new features, like Bitmoji Reactions, Poll Stickers and an improved calling interface that makes it easier to add Lenses and see who’s joined a call before you join.
- Tumblr added a sensitive content toggle on iOS to comply with the App Store guidelines. The company’s app kept being rejected by reviewers over the app’s content. The toggle opts users out of seeing sensitive content by default — which is mature content, but not the same as adult content (eg. sex and pornography).
- Twitter is testing a search bar at the top of the Home tab, making it easier to search for tweets instead of having to change tabs.
- TikTok saw $2.3 billion in consumer spending in 2021, a figure that’s up 77% year-over-year, reported Sensor Tower. The app pulled in $824.4 million in Q4 2021 alone, more than double the same time a year ago. The U.S. is TikTok’s No. 2 revenue driver behind China.
- Signal founder Moxie Marlinspike is stepping down, in a move that seemed tied to cryptocurrency startup MobileCoin, which counts Marlinspike as a technical advisor. Signal had integrated with MobileCoin, boosting the adoption of the cryptocurrency. Marlinspike had been trying to maintain distance between himself and MobileCoin, but reporter Casey Newton recently pointed out that Signal’s push into untraceable payments is “playing with fire” and inviting regulation.
Streaming & Entertainment
- Spotify dropped the ball on the release of its previously announced HiFi tier, which was announced back in February but never arrived. The company finally responded to a growing chorus of consumer complaints to say only that the service was still in the works for Premium users, but without offering an ETA.
- Apple launched a new tvOS app this week called Apple Partner Media Review, which is not aimed at consumers, but rather, at studios. The app allows studios to review their content on an Apple TV prior to publication.
- A music app called AmpMe lowered its pricing after a well-known critic called it out as a scammer. The app was offering an unseemly $10 per week subscription for the app that syncs music between devices and was earning between $13-15 million per year. But the app was also committing fraud as it was plagued by fake reviews that doled out five-star ratings and praise. After news articles were published, the app maker lowered the pricing to $5/week and blamed the fake reviews on “outside consultants.”
- Netflix hiked its U.S. and Canadian prices by $1-$2. The standard plan in the U.S. now costs $15.49 up from $13.99 per month.
Health & Fitness
- A year-end report from Sensor Tower helps provide a look at how the COVID-19 pandemic shaped the app economy in 2021. Travel apps and transportation apps can still see growth ebb and flow amid COVID surges, but other app categories have either normalized or achieved their new normal. For instance, business app growth was still more than double pre-pandemic levels in 2021, and medical apps continue to see high usage.
- German police used a COVID contact-tracing app to track down witnesses to a potential crime, The Washington Post reported. The move is being criticized by privacy advocates who have argued that these systems could end up being used for non-public health purposes. It also could help fuel more conspiracy theories.
- Strava’s fitness app for runners and cyclists saw its revenue spike 68% over 2021, aided by the ongoing pandemic, Bloomberg reports. Based on previous figures, this would suggest the app has revenue of around $170 million and a paid subscriber base of 2-3 million. Including free users, the app has around 100 million users in total.
Productivity & Utilities
- Microsoft Teams rolled out its Walkie-Talkie feature to all users, two years after being announced. The feature lets users reach any contact through a push-to-talk function. The feature is integrated on Zebra devices and is now arriving on iOS.
- Mozilla’s Firefox Focus browser for Android devices gained access to the Total Cookie Protection feature, first introduced last year, which helps combat cross-site tracking.
News & Reading
- Amazon’s Kindle Vella episodic reading service launched on the Kindle app for Android and Fire tablets. Since its July 2021 launch, the service had been iOS-only.
Travel & Transportation
- Uber is facing competition from the government’s own taxi app as it tries to make inroads in Brazil, according to a report from Rest of World. Rio de Janeiro’s Taxi.Rio app has caught up to Uber’s technology and charges less, leading to users ditching Uber for taxis.
- Uber also quietly dropped support for the Apple Watch, as its watchOS app now directs users to switch to the app on their iPhone. The app likely didn’t have much adoption, as it’s easier to order an Uber from a bigger screen. Plus, an app can still send notifications to an Apple Watch even if it doesn’t offer a native Watch app.
Government & Policy
- A judge ruled the FTC’s monopoly (now revised) lawsuit against Meta can move forward. The case will examine if Meta holds an unlawful monopoly in social networks, which it gained by acquiring competitors like Instagram and WhatsApp. A ruling in the FTC’s favor could force Meta to split out its apps into separate businesses again.
- A new bill with bipartisan support would require sites and apps to offer a “summary statement” of their terms of service to make them easier for consumers to understand. These “nutrition labels” would note whether the sites pull in users’ precise location, health data, demographic info, race, religion, sex or more — data that’s often compromised in security breaches.
🤝 Huge news this week sees mobile gaming giant Zynga snatched up by Grand Theft Auto’s maker, Take-Two Interactive in a $12.7 billion deal. The deal values Zynga at $9.86 per share — $3.50 in cash and the remaining $6.36 in shares of Take-Two common stock. Take-Two says the merger will make it one of the largest gaming companies overall, as it will result in $6.1 billion in 12-month Pro-forma net bookings. The deal isn’t just notable for its record size, but because it will give Take-Two a solid footing within the mobile gaming market, which is where today’s growth in gaming resides.
💰 Indian startup Turnip raised $12.5 million in Series A funding for its mobile-first gaming community app. Greenoaks and Elevation Capital co-led the round for the app where gamers can livestream gameplay from their mobile devices, engage with fans and monetize.
🤝 Headspace Health (the entity formed by the merger of meditation app Headspace and on-demand mental health service Ginger) has now acquired the mental health and wellness company Sayana. The YC-backed startup helped users track their moods and offered self-care advice. Deal terms weren’t disclosed.
💰 Jakarta-based investment app Pluang raised $55 million in a follow-on to its Series B round. The new investment was led by Accel and brings the total round to $110 million. The funds will be used to make the app, which now has 3.5 million registered users, available in more South Asian markets.
💰 Miami-based SMB banking app Novo raised $90 million in Series B funding at a $700 million valuation. VC firm Stripes led the round, which included existing investors from its Series A. The funds will help Novo build out its infrastructure and add new products to serve its 150,000 customers.
💰 Spanish-language fantasy sports app Draftea raised $13.2 million in funding led by Kaszek, which also sees Sequoia making its first investment in a company headquartered in Mexico. The app, currently in private beta, charges sports fans a fee to draft a lineup of players and win daily cash prizes.
💰 Business banking startup Qonto, whose app targets SMBs and freelancers, raised $552 million in Series D funding at a $5 billion valuation. The round for the company, which now has 220,000 clients, was led by Tiger Global and TCV.
💰 Estonia-based super app Bolt, which offers transportation and food delivery, raised $709 million at an $8.4 billion valuation to expand its services to new markets, including its newer business lines, like 15-minute grocery delivery, which will grow through the use of “dark stores” in more cities.
💰 Masters, an app for training with celeb athletes, closed on $2.7 million in seed funding led by Sweet Capital, the King.com founders fund. The company has signed up famous athletes include Shaun White, Emma Coburn, Kai Lenny, Ada Hegerberg, Petra Kvitova and others.
A widget-maker called Locket went viral for its clever app that lets you share photos to your friends’ homescreens. The app popped up to the top of the App Store charts in recent days, as users delighted in how it turned Apple’s widget system — typically used to showcase information like news, weather, inspirational quotes or photos from your own iPhone’s gallery — into a private social networking platform of sorts. Founder Matt Moss, a former WWDC student scholarship winner and recent UC Santa Barbara grad, said the idea for the app began as a side project he built for his girlfriend. But after friends said they also wanted in, he decided to publish it to the App Store.
The app launched on New Year’s Day and has now seen more than 2 million users sign up, according to Moss. On Sunday, Locket became the No. 1 app overall on the U.S. App Store, per Apptopia’s app store data, and had become the No. 1 Social Networking app the day prior. Apptopia reports only seeing around 1 million global installs so far, however, with about 31% from the U.S., as of earlier this week.
Is this the year that we get our dream back channeling platform? – TechCrunch
Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.
Among many of the entrepreneur catchphrases out there, the one that annoys me the most is: “It’s not what you know, it’s who you know.” The phrase may be meant to make people with imposter syndrome remember the importance of a simple cold emails, but it often comes off as a rebranded way to remind people that exclusive networks rule the world.
Which is why I’m hoping that this is the year that a back channeling social media platform actually takes off. At its best, back channeling can help someone without a Stanford stamp of approval get vouched for, and subsequently bet on. The process can also help stop predatory investors from winning deals.The process’s impact is clear, but the incentives for all parties to participate are slightly misaligned. Some investors still scoff at the idea that their portfolio companies may be asked to review what it’s like to work with them; similarly, founders are surprised when stories, not Cultureamp surveys, are where honest feedback truly lives. Why? In a world where due diligence is evolving to be somewhat flippant in the early stage, back channeling is simultaneously going from a deep conversation about strengths and weaknesses to a thumbs up or thumbs down affair.
Plus, beyond the surface level banter, some of the most powerful people in tech today have their eggs in many, many baskets – meaning that those who want to or could speak critically of them can either be financially (or emotionally) restricted in saying this.
My pitch? We finally get a trustworthy platform in which back channeling can occur in an accessible and fair way. An anonymous, private subreddit for founders already exists in so many different forms, but I’d love to see an app that widens access so that anyone can vet a proposed value add.
For more of my take, check out this TechCrunch+ column that I did with my Equity co-hosts Alex Wilhelm and Mary Ann Azevedo: 3 views on how due diligence will change in 2022. We also recorded a podcast if you prefer the newsletter for your ears route, instead.
In the rest of this newsletter, we’ll talk about Wordle, future revenues as a business model and why I think Y Combinator is reading my text messages. As always, you can follow my thoughts on Twitter @nmasc_.
A word on Wordle
The creator behind the app on everyone’s mind, and not on anyone’s app store, chatted with TechCrunch about the underdog rise of Wordle. The game, in which users guess a five-letter word in six tries, grew from fewer than 1,000 players to 2 million players in weeks.
Here’s what to know: As Owen Williams explains, Wordle’s nostalgic feel isn’t loved by all. The game is being punished by app stores for choosing the open web. Here’s how he puts it in his latest column for TechCrunch:
Wordle is facing a threat we haven’t seen play out yet: the game’s developer is essentially being punished by app stores for choosing to build using open web technologies, rather than a native app. Not only is this type of behavior allowed by the Apple App Store, there’s little recourse—because as far as Apple is concerned, Wordle doesn’t exist, given it wasn’t built a native app.
There’s no way for a developer of a fully functional, capable web app like Wordle to claim their name in the App Store, nor is there a way for them to list their website to get users to the right place and defend themselves from copycats. Google actually does allow developers to upload some kinds of progressive web apps to the Play Store, though at time of writing Wardle doesn’t appear to have chosen to do this. If he wanted to defend his game on the Play Store when a clone does appear there, he’d at least have a choice to do so.
Consumer love, a fickle thing:
And the startup of the week is…
Arc! The SaaS-friendly fintech platform emerged from stealth this week with $150 million in debt financing and $11 million in seed funding with a Stripe partnership. As our own Mary Ann reports, “Arc is building what it describes as ‘a community of premium software companies’ that gives SaaS startups a way to borrow, save and spend all on a single tech platform.”
Here’s what to know: As we discussed in Equity this week, Arc is one of those startups — similar to Brex — that couldn’t have existed 20, even 10, years ago. The company is entirely betting its own revenue on the future assumed revenue of other startups, which is a statement of the maturation of this once scrappy SaaS scene.
Is Y Combinator reading my texts?
Last week, I wrote a newsletter on how accelerators need a refresh on what they consider a ‘value-add service.’ Then, days later, Y Combinator announced that it is increasing its check size, and ownership stake, in its accelerator companies. My argument then, and now, is that accelerators will need to offer more than they ever have in the past to stay competitive; and YC’s new check shows they want to get more aggressive in the same swing.
Here’s what to know: Despite the somewhat expected change, it was controversial among seed-stage investors – who saw the move as more competitive than complementary to the broader early-stage ecosystem. In Equity, we discussed both sides and why it may be harder for international founders to take the new deal.
The new, new:
If you’re like me, you chat about the future of finance at least twice a day. Even for the nerdiest of us, though, the decentralization of regulation, money and culture is hard to keep up with — which makes our upcoming event even more exciting. On March 30th, 2022, TechCrunch is hosting DeFi & The Future of Programmable Money alongside Sommelier Finance. It’s getting into everything from the basics to the moonshots, so register for this virtual event soon.
Across the week
Seen on TechCrunch
Seen on TechCrunch+
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Raising money is catastrophically challenging for female founders – TechCrunch
“Raising money is catastrophically challenging for female founders, and even harder for Black female founders.”
It’s a bold, even damning statement — one I made in a recent discussion speculating what’s to come in 2022 for women leading startups, like myself.
As one of a few Black female CEOs in the developer tools space, I’m often asked to comment on big, collective social issues centered in tech. It’s a lot to carry, but I realize the value to all of us in raising these issues, and my voice, when I can. Still, while I’d like to be able to offer decisive answers, I’ve got a lot of questions.
Tech innovation < social progress
In the world of technology, we thirst to be a part of the next digital product that benefits from first-mover status and shapes what’s to come at an industry level. This is especially relevant in regard to seeking capital. And while we’ve witnessed some impressive transformations in the developer tools space, with VC-backed funding following suit, sometimes I worry we’re at risk of conflating technological growth for the social progress we really need. Women are still behind. Why?
There are some great female developer founders, like Nora Jones of Jeli, Window Snyder of Thistle Technologies, Edith Harbaugh of Launch Darkly, and Jean Yang of Akita Software, to name a few. There are also some amazing female angels and VCs. These are women I look to as leaders in the industry — those overcoming the barriers of either giving or seeking funding while remaining authentic to who they are.
Limited partners should back more female VCs, and funds should offer women the same graces and latitude that are given to men. Shanea Leven
Despite those of us trying to make a name for ourselves in dev tools, the reality is the dev tools space is led predominately by white men. For those of us who don’t meet those gender and racial criteria, simply thriving requires more attention to detail, energy and time than is often sustainable.
We need to level-set, acknowledging the current ways in which women must fight to thrive. We need to ask some tough questions.
The fight to be taken seriously
We want to be able to fundraise from other people that look like us, right? But many female investors are fighting just as hard to be taken seriously as the female founders they want to support. If we’re all facing the same social constraint — fighting to prove our legitimacy — we’re probably maintaining the same aversion to risk.
This creates an invalidating cycle in which female investors take fewer risks, particularly in regard to investing in female founders, and garner fewer funds than their male counterparts. How can we break this cycle?
Limited partners should back more female VCs, and funds should offer women the same graces and latitude that are given to men. Female VCs should be promoted to partnerships, where they will be able to write meaningful checks quickly.
I’ve personally witnessed the extraordinary results of empowered female angels and VCs connecting with others to support female founders; the community and sense of sisterhood they inspire have the potential to change the industry. This is what we need to latch on to and scale.
The fight to overcome ingrained psychological barriers
Today, there exists a widespread belief that women are less aggressive in the process of confirming a round, both as founders and VCs. As a female founder, I’ve been told male counterparts are capable of committing larger funds, faster — that women appear to be more risk-averse, often moving slower through the process and requesting less.
So, what’s causing the pause among women? It’s likely the most obvious answer: We are, in fact, facing a greater risk of rejection in the funding process. We also tend to have fewer connections into the VC community, where the “rules of VC” — what to do, say, and how to act — are often confusing and counterintuitive. Nothing like the clear guidelines on writing a good piece of code.
The fight against the numbers
Imagine you have 1,000 potential investors and only 10% of them focus on companies offering technologies like yours. Then, just 2% of them invest in companies at your stage and 5% of those share your same philosophies — and you’re only able to access yet another percentage of those. Now, imagine you’re stepping into those discussions with the understanding that we are ultimately people pitching to people, so you must “click” in an often all-too-brief interaction.
You’ll be committed in business to this investor for the next decade or more. So, while you’re attempting to navigate the numbers — the odds against you — you’re also trying to figure out a VC’s history, personality and perspectives. How have they been burned before? Can we be empathic to their businesses of the past and assure them our business is a worthy investment … all in 30 minutes or less?
So, how can women successfully fight for funding?
The simple answer: We cannot do it alone. Like most professional endeavors, seeking funding is ideally bolstered by a social network. While I wish I could say women intrinsically have everything they need to excel in the world of venture capital, I believe we require allies and support beyond basic networking and spanning gender and race.
We need everyone who has a stake in the game to join the fight for women, with focused attention on the challenges encountered by women of color. We must acknowledge the potential danger to female founders and investors in working from a survival mindset and provide them the coaching and guidance they need to step into funding discussions practiced, prepared and able to speak on behalf of a company with greater strength.
Said simply, we need to trust in the ability and potential of women on both ends of the deal, with no strings attached.
And so, my final question to founders and investors everywhere: Are you willing to join our fight?
One-click checkout company Bolt ushered into decacorn territory on $355M Series E – TechCrunch
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Hello and welcome to Daily Crunch for January 14, 2022! I suppose that this has been the week of Wordle, in that everyone and their dog are tweeting their scores and results. A small bit of camaraderie for those of you out there who are not good at the game: I am also trash. And since I still get paid to write, I refuse to connect “Good at Wordle” with “Good at words!” – Alex
P.S. Speaking of words, the Equity team had a heck of a good time this week, in case you wanted a chatty dive through recent startup happenings.
The TechCrunch Top 3
- Bolt raises $355M as the online checkout war continues: Bolt (not this Bolt) has raised a huge new round of capital that pushes its valuation to $11 billion. Bolt provides an online checkout solution for other companies. It competes, variously, with Fast and Checkout.com, which just raised $1 billion at a $40 billion valuation. You can argue that there is separation between the players in terms of where they sit in the world of online payments and checkout, but the overlap appears increasingly material between the competitors. (Just about one year ago we called the online check market a war; the battle continues.)
- Major tech companies subpoenaed by Congress: As an investigation into the January 6 insurrection continues here in the U.S., major tech companies are being caught up in the hunt for answers. YouTube (Alphabet), Facebook and Instagram (Meta), Reddit, and Twitter appear to be in the line of fire.
- All that glitters is not legit trading volume: As the market for non-fungible tokens – digital signatures on the blockchain that often point to assets stored on the traditional web, like images – heats up, we’re tracking the various exchanges where trading takes place. What we’ve most recently learned is that not all trading volume may be what it first appears.
- Daasity raises $15M to help companies leverage e-comm data: Daasity is a startup that helps customers aggregate their information from various e-commerce platforms (Amazon, Shopify, etc.), “analyze it and push it to marketing channels to optimize customer experiences based on insights from a historical performance,” TechCrunch writes. The company’s new funding round was a Series A, led by VMG Catalyst.
- Commercial EVs for the Indian market: Amazon is working with a number of companies on EVs for its global delivery network, one of which is EVage. The Indian company just raised $28 million for an electric truck-van-box that I must admit is rather fetching – provided you are the sort of person who enjoys brutalist architecture.
- The cannabis labor market is growing startups: TechCrunch notes in this story that there are labor platforms being built to help particular industries hire. The healthcare market has a few, for example. And now the cannabis industry as well, thanks to Vangst, which just raised a $19 million Series B.
Fintech and insurtech innovation in Brazil set to take off on regulatory tailwinds
Regulation is often decried as a hurdle to innovation in most parts of the developing world.
But in Brazil, the Central Bank is being hailed by investors and fintech founders alike as a tailwind for bringing banking to the masses.
“The open banking initiatives adopted by Brazil’s Central Bank are absolutely tailwinds for fintech innovation,” Costanoa Ventures’ Amy Cheetham told TechCrunch.
In an in-depth market analysis, Anna Heim explores Brazilian fintech’s growth in the wake of Brazil’s open banking initiatives and how insurtech is also poised to take advantage.
(TechCrunch+ is our membership program, which helps founders and startup teams get ahead. You can sign up here.)
Big Tech Inc.
Today we have a grip of transit-themed Big Tech news, followed by, what else, some European legal news involving a major U.S. tech company!
- Self-driving taxis work to merge onto the fast lane in China: Our own Rita Liao did everyone a favor by writing up a deep dive into the self-driving taxi market in China. As she writes, it does seem that every week “news arrives that another major player has gotten the green light to launch a new pilot program or a small-scale service” in the country. What do the individual news events add up to? Find out!
- And speaking of self-driving cars: Waymo and J.B. Hunt, a trucking company, are turning their pilot into a long-term program. There is a shortage of truck drivers in the U.S., meaning that trucks that can get along without help could be a big deal in the nation.
- Here’s a review of a car that no one at TechCrunch can afford: Let me be clear, I want a Bentley Continental GT Speed. I would also settle for a standard Bentley Continental. The fact that Kirsten Korosec, our enterprising transportation editor, got to test one is jealousy-inspiring. On the factual front, if you have more than a quarter-million dollars laying around and need 12 cylinders, this is perhaps the car for you.
- Meta faces class-action lawsuit in the U.K.: A class-action lawsuit filed with the U.K.’s Competition Appeal Tribunal in London wants to dock the U.S. social networking giant some $3.1 billion for abuse of its in-market power in the U.K. Let’s see if this goes anywhere.
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Fintech and insurtech innovation in Brazil set to take off on regulatory tailwinds – TechCrunch
Startups and VCs see opportunities in open banking, finance and insurance
Brazilian instant payment system Pix ended 2021 having powered more than 8 billion transactions, according to statistics from the country’s Central Bank. This is quite an impressive figure for an offering only launched in November 2020 and goes to show how ubiquitous Pix has become in the country.
You could describe Pix as “a government-built version of Venmo,” as João Pedro Thompson, founder of fintech Z1, told TechCrunch. However, the analogy doesn’t fully capture the fact that Pix appeals to many more than just digitally savvy teenagers repaying friends for coffee. Otherwise, it wouldn’t be used by six of 10 Brazilians.
In a country where many people are still unbanked and queuing to pay bills is part of daily life, the impact of being able to pay anyone instantly can’t be understated. In addition, Pix now supports more services, such as letting you withdraw cash from businesses.
It’s interesting that Pix is an institutional initiative, part of a wider range of public efforts to transform Brazil’s financial landscape. “The Central Bank has been doing a tremendous job and Pix is one of the most relevant structural changes,” Brazilian VC Bruno Yoshimura told TechCrunch when we wrote about Latin America’s fintech boom.
I’ve lived in Brazil, so this naturally piqued my interest. At the time, entrepreneurs were constantly complaining about bureaucracy, and their highest hope was that institutions would just stay out of the way. But now, VCs and founders are actually praising the Central Bank for its initiatives and the opportunities it has created.
“Both Open Banking and Pix will level the playfield for new challenges, and we expect to see a lot of innovation around them,” Yoshimura said, referring to another of the Central Bank’s projects.
It’s not just Pix, and it’s not only the Central Bank’s BC# agenda either. Brazil’s Superintendence of Private Insurance (Susep) is working on open insurance plans, which means that insurtech could be the next sector to benefit from regulatory tailwinds.
To understand what’s going on with regulations in Brazil, and how this is affecting startups, I reached out to experts with firsthand knowledge of Latin America’s fintech ecosystem.
On the VC side, I got in touch with Amy Cheetham, a partner at Costanoa Ventures, whose recent investments include Rio de Janeiro-based Plug; and Alma Mundi Ventures‘ Javier Santiso for additional thoughts on insurtech. On the startup side, I spoke with CEOs Rodrigo Teijeiro from RecargaPay and Pedro Sônego de Oliveira from TruePay.
“The open banking initiatives adopted by Brazil’s Central Bank are absolutely tailwinds for fintech innovation,” Costanoa’s Amy Cheetham said. “As consumers regain control of their data, it creates space for new entrants to the banking ecosystem and creates more competition, giving consumers access to better, cheaper, fairer, and more secure financial products and services. This includes giving fintechs the power to build for previously [underserved] or unserved segments of the population,” she explained.
RecargaPay is one of the startups leveraging the new regulations to expand their B2C services. “Our mission at RecargaPay,” founder Teijeiro said, “is to democratize mobile payments and financial services in Brazil, so open banking and Pix are the perfect recipe to accelerate our mission.”
Teijeiro is particularly appreciative of Pix and its “incredible” trajectory. “What was accomplished in just one year was a tremendous disruption benefiting millions of Brazilians by making their payments easier, faster and cheaper. For this, the Brazilian Central Bank deserves to be recognized as the ‘fintech startup of the year,’” he said, describing Pix’s impact on cash going mobile as “a huge blessing for RecargaPay.”
EVage raises $28M to be a driving force in India’s commercial EV revolution – TechCrunch
A congruence of factors in India — notably, climate change policies, fuel costs and skyrocketing demand for e-commerce — has set up ideal conditions for startups like all-electric commercial vehicle startup EVage.
The startup, which has already supplied five EV trucks to Amazon India’s Delivery Service Partner and plans to provide “in the thousands” more by the end of the year, according to one investor, has just raised a $28 million seed round, led by new U.S.-based VC RedBlue Capital. EVage will use the funds to complete its production-ready factory outside of Delhi in first quarter of 2022 and scale up production to meet growing demand.
EVage’s flagship vehicle is a one-tonne (2,000 pound) truck that was designed for India’s commercial delivery market using feedback from its partnership with Amazon. The truck is developed on EVage’s industry-ready EV platform that the company says allows it to build multiple different types of high quality vehicle at a far lower cost than other OEMs. The startup plans to manufacture vehicles in “Modular Micro Manufacturing” factories, similar to Arrival’s microfactories, which should have smaller carbon footprints and require less capital to produce vehicles than traditional OEMs.
The upshot: EVage aims to pass those savings onto customers.
Finding a way to make production cheaper is vital for scaling, and the opportunity and demand for scaling EVs in India is massive.
India’s Transport Minister Nitin Gadkari, whom Olaf Sakkers, general partner at RedBlue Capital and future EVage board member, says has had a high-level hand in the announcement of EVage’s deal with Amazon, has set a target for the country to have 30% private cars, 40% buses, 80% two and three-wheelers and 70% commercial vehicles electric by 2030.
A series of incentives like the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles schemes (FAME-I and FAME-II) help by providing subsidies to electric two-wheelers and commercial or transit-related four-wheelers. FAME-II subsidies only apply if OEMs source 50% of components from local manufacturers, which helps boost the supply side, as well.
Two and three-wheelers are already well on their way to that target, particularly so with companies like Ola Electric setting up a massive factory for e-scooters and Hero MotorCorp, one of the country’s largest micro-EV manufacturers, penning a deal with Taiwanese battery swapping company Gogoro to build a battery swapping network in India. Four-wheelers are a bit slower to market, in part because the average commuter isn’t buying electric cars. The path to electric four-wheeler adoption, therefore, is more likely to occur through commercial roads, Sakkers said.
India’s e-commerce market is exploding, especially as global companies increase their presence in the country and the mobile-first nation full of smartphone users gets extra comfortable with easy digital transactions. Amazon has invested $6.5 billion in India since it entered the country in 2013, and Walmart entered the South Asian nation through a $16 billion acquisition of the startup Flipkart. Those companies, alongside national and local delivery companies, are looking to partner with Indian OEMs that can meet the unique demands of an Indian market.
“There are some electric vehicles that work in developed markets like the U.S. and Europe, and you see companies like Rivian selling to logistics fleets for those use cases, but the needs of Indian logistics in an Indian market more broadly is very different,” Sakkers told TechCrunch. “It requires solving different problems, and so we see a pretty big opportunity to create custom-built vehicles for these kinds of use cases.
Sakkers noted that from a pure engineering perspective, for example, EVage’s vehicles don’t have to meet the same standards of the west in terms of being certified to drive at highway speeds, because rarely in India do vehicles go above 40 miles per hour. That means everything from motor requirements to battery size and types of materials you need to build are different, and potentially much cheaper, added Sakkers.
“The total cost of ownership savings for the customers is quite significant,” said Sakkers. “They’re not only doing this for optic reasons, they’re also doing it for pure economic reasons. In India, you can’t operate at certain times of day in cities if you produce a certain amount of emissions, so it also improves your ability to operate a logistics fleet if you’re operating electric vehicles.”
“There aren’t many startups that fit into this mold so thats why we’re putting so much capital into EVage,” said Sakkers. “The demand for this segment of vehicles is half a million per year in India. Scaling production to the hundreds of thousands is going to be a challenge for the company, but also a huge opportunity.”
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