CryptoKitties, the virtual collectible kitten game that turned into a viral sensation has raised $12M in funding and will be spun out from Axiom Zen, the Vancouver and San Francisco-based design studio that originally built the game.
The round is being led by Andreessen Horowitz and Union Square Ventures, both of which have quickly developed a reputation for backing fast-growing cryptocurrency startups like Coinbase. A bunch of notable angels also participated, including Naval Ravikant (CEO and founder of AngelList), Mark Pincus (founder of Zynga) and Fred Ehrsam (founder of Coinbase) among others.
So what are CryptoKitties? They’re essentially digital collectibles built on top of the Ethereum blockchain. Each one is unique and has certain attributes that make them rare and desirable, almost like a digital beanie baby. And users are spending tons of real money on them, with some of the rarest kitties fetching over $100,000 when the game first launched.
While the startup is being pretty mum on what the future looks like and what they’re planning on using this funding for, it’s almost certain that the long term goal is to expand beyond CryptoKitties and use the same Ethereum ERC-721 collectible standard to create other game experiences, especially ones that can be played by regular people who are unfamiliar with cryptocurrency.
To this note, Fred Wilson of USV quickly outlined the firm’s thesis behind investing in CryptoKitties, saying “we think digital collectibles is one of many amazing things that blockchains enable that literally could not be done before this technology emerged. We also think digital collectibles and all of the games they enable will be one of the first, if not the first, big consumer use cases for blockchain technologies.”
Travis announced that he would be starting a new fund with his windfall from Uber shares sold in its most recent major secondary round. At the time, Kalanick said the new fund — called 10100, or “ten one hundred” — would be geared toward “large-scale job creation,” with investments in real estate, ecommerce, and “emerging innovation in India and China.” CSS has two businesses, CloudKitchens and CloudRetail, which focus on redevelopment of distressed assets in those two areas.
The former is pretty interesting given that Uber has its own food delivery service, UberEats. Should Kalanick’s new venture find ways to acquire distressed food-related real estate — kitchens around a city, for example — there may be a natural overlap with his experience at Uber as it started to explore food. Having massive operating kitchens located in one area with a delivery fleet associated with it is one thing, but having an array of smaller kitchens redeveloped through a company like CSS could provide a kind of distributed network that might make it easier to get food from one kitchen to its delivery in a shorter period of time.
It’s not that we know CSS is focusing on that explicitly, but Amazon also bought a bunch of buildings for $13.7 billion, and now it has a two-hour delivery service in major metropolitan areas. Of course, Travis was shown the door at Uber, so it remains to be seen how this one is going to play out. The Information notes that CSS was owned by a friend of Kalanick’s as well as having a loose connection with Uber.
Another huge financing round is coming in for an AI company today, this time for a startup called Mythic getting a fresh $40 million as it appears massive deals are closing left and right in the sector.
Mythic particularly focuses on the inference side of AI operations — basically making the calculation on the spot for something based off an extensively-trained model. The chips are designed to be low power, small, and achieve the same kind of performance you’d expect from a GPU in terms of the lightning-fast operations that algorithms need to perform to figure out whether or not that thing your car is about to run into is a cat or just some text on the road. SoftBank Ventures led this most-recent round of funding, with a strategic investment also coming from Lockheed Martin Ventures. ARM executive Rene Haas will also be joining the company’s board of directors.
“The key to getting really high performance and really good energy efficiency is to keep everything on the chip,” Henry said. “The minute you have to go outside the chip to memory, you lose all performance and energy. It just goes out the window. Knowing that, we found that you can actually leverage flash memory in a very special way. The limit there is, it’s for inference only, but we’re only going after the inference market — it’s gonna be huge. On top of that, the challenge is getting the processors and memory as close together as possible so you don’t have to move around the data on the chip.”
Mythic, like other startups, is looking to ease the back-and-forth trips to memory on the processors in order to speed things up and lower the power consumption, and CEO Michael Henry says the company has figured out how to essentially do the operations — based in a field of mathematics called linear algebra — on flash memory itself.
Mythic’s approach is designed to be what Henry calls more analog. To visualize how it might work, imagine a set-up in Minecraft, with a number of different strings of blocks leading to an end gate. If you flipped a switch to turn 50 of those strings on with some unit value, leaving the rest off, and joined them at the end and saw the combined final result of the power, you would have completed something similar to an addition operation leading to a sum of 50 units. Mythic’s chips are designed to do something not so dissimilar, finding ways to complete those kinds of analog operations for addition and multiplication in order to handle the computational requirements for an inference operation. The end result, Henry says, consumes less power and dissipates less heat while still getting just enough accuracy to get the right solution (more technically: the calculations are 8-bit results).
After that, the challenge is sticking a layer on top of that to make it look and behave like a normal chip to a developer. The goal is to, like other players in the AI hardware space, just plug into frameworks like TensorFlow. Those frameworks abstract out all the complicated tooling and tuning required for such a specific piece of hardware and make it very approachable and easy for developers to start building machine learning projects. Andrew Feldman, CEO of another AI hardware startup called Cerebras Systems, said at the Goldman Sachs Technology and Internet conference last month that frameworks like TensorFlow had most of the value Nvidia had building up an ecosystem for developers on its own system.
Henry, too, is a big TensorFlow fan. And for good reason: it’s because of frameworks like TensorFlow that allow next-generation chip ideas to even get off the ground in the first place. These kinds of frameworks, which have become increasingly popular with developers, have abstracted out the complexity of working with specific low-level hardware like a field programmable gate array (FPGA) or a GPU. That’s made building machine learning-based operations much easier for developers and led to an explosion of activity when it comes to machine learning, whether it’s speech or image recognition among a number of other use cases.
“Things like TensorFlow make our lives so much easier,” Henry said. “Once you have a neural network described on TensorFlow, it’s on us to take that and translate that onto our chip. We can abstract that difficulty by having an automatic compiler.”
While many of these companies are talking about getting massive performance gains over a GPU — and, to be sure, Henry hopes that’ll be the case — the near term goal for Mythic is to match the performance of a $1,000 GPU while showing it can take up less space and consume less power. There’s a market for the card that customers can hot swap in right away. Henry says the company is focused on using a PCI-E interface, a very common plug-and-play system, and that’s it.
The challenge for Mythic, however, is going to get into the actual design of some of the hardware that comes out. It’s one thing to sell a bunch of cards that companies can stick into their existing hardware, but it’s another to get embedded into the actual pieces of hardware themselves — which is what’s going to need to happen if it wants to be a true workhorse for devices on the edge, like security cameras or things handling speech recognition. That makes the buying cycle a little more difficult, but at the same time, there will be billions of devices out there that need advanced hardware to power their inference operations.
“If we can sell a PCI card, you buy it and drop it in right away, but those are usually for low-volume, high-selling price products,” Henry said. “The other customers we serve design you into the hardware products. That’s a longer cycle, that can take upwards of a year. For that, typically the volumes are much higher. The nice thing is that you’re really really sticky. If they design you into a product you’re really sticky. We can go after both, we can go after board sales, and then go after design.”
There are probably going to be two big walls to Mythic, much less any of the other players out there. The first is that none of these companies have shipped a product. While Mythic, or other companies, might have a proof-of-concept chip that can drop on the table, getting a production-ready piece of next-generation silicon is a dramatic undertaking. Then there’s the process of not only getting people to buy the hardware, but actually convincing them that they’ll have the systems in place to ensure that developers will build on that hardware. Mythic says it plans to have a sample for customers by the end of the year, with a production product by 2019.
That also explains why Mythic, along with those other startups, are able to raise enormous rounds of money — which means there’s going to be a lot of competition amongst all of them. Here’s a quick list of what fundraising has happened so far: SambaNova Systems raised $56 million last week; Graphcore raised $50 million in November last year; Cerebras Systems’s first round was $25 million in December 2016; and this isn’t even counting an increasing amount of activity happening among companies in China. There’s still definitely a segment of investors that consider the space way too hot (and there is, indeed, a ton of funding) or potentially unnecessary if you don’t need the bleeding edge efficiency or power of these products.
And there are, of course, the elephants in the room in the form of Nvidia and to a lesser extent Intel. The latter is betting big on FPGA and other products, while Nvidia has snapped up most of the market thanks to GPUs being much more efficient at the kind of math needed for AI. The play for all these startups is they can be faster, more efficient, or in the case of Mythic, cheaper than all those other options. It remains to be seen whether they’ll unseat Nvidia, but nonetheless there’s an enormous amount of funding flowing in.
“The question is, is someone going to be able to beat Nvidia when they have the valuation and cash reserves,” Henry said. “But the thing, is we’re in a different market. We’re going after the edge, we’re going after things embedded inside phones and cars and drones and robotics, for applications like AR and VR, and it’s just really a different market. When investors analyze us they have to think of us differently. They don’t think, is this the one that wins Nvidia, they think, are one or more of these powder keg markets explode. It’s a different conversation for us because we’re an edge company.”
DocuSign is gearing up to go public in the next six months, sources tell TechCrunch.
The company, which pioneered the e-signature, has now filed confidentially, we are hearing.
Like Dropbox, which is finally going public this week, San Francisco-based DocuSign has been an anticipated IPO for several years now. It’s raised over $500 million since it was founded in 2003 and has been valued at $3 billion. Kleiner Perkins, Bain Capital, Intel Capital, GV (Google Ventures) and Dell are amongst the many well-known names which have invested in DocuSign.
But like many “unicorns” these days, the company took its time, spending 15 years as a private company. The DocuSign team decided that 2018 is the year that it is ready and is targeting an IPO in either the second or third quarter.
San Francisco-based DocuSign, which competes with HelloSign and Adobe Sign, amongst others, has been on a mission to get the world’s businesses to sign documents online. The team has worked with large enterprises like T-Mobile, Salesforce, Morgan Stanley and Bank of America.
The company has a tiered business model, with corporations paying more for added services. Public investors will be evaluating DocuSign both on its revenue growth and customer retention.
North America is their largest market, but they’ve been focused on expanding throughout the world, including the U.K., France, Australia, Brazil, Singapore and Japan.
Keith Krach, who is now chairman, had been running the company since 2011. Krach was previously CEO of Ariba, which was acquired by SAP for $4.3 billion.
German startup N26 just raised a $160 million Series C round led by Tencent and Allianz — some of N26’s existing investors are also participating. The company has attracted 850,000 customers and raised $215 million in total. N26 is building a retail bank from scratch.
The company plans to double down on everything it’s been doing so far. It means more expansions, more partnerships with other fintech products, more features and more engineers. Allianz is investing through its Allianz X investment arm.
“I think Tencent and Allianz are a great combination or investors,” N26 co-founder and CEO Valentin Stalf told me. “In the last 10 years, Tencent became one of the five most valuable companies in the world — it’s a pioneer in mobile payment and also fintech in general.”
Tencent is the company behind WeChat, mobile payment service WeChat Pay, WeBank, TenPay and countless of products.
“On the other hand, when you look at Allianz, it’s one of the most traditional finance companies in the world and also from Germany,” he continued. “It is a traditional brand that also believes in the changes of the financial industry.”
The company goes one step further and is also setting some aggressive goals with this funding round. N26 plans to reach more than 5 million customers by 2020. This year alone, N26 plans to process $16 billion (€13 billion) in transaction volume. British competitor Revolut currently processes $1.5 billion per month. It seems like there’s enough room for both of them to grow for now.
This funding round really brings N26 to a pre-IPO stage Valentin Stalf
While many companies use funding rounds to share some information about their roadmap, N26 has already announced a few things. N26 plans to roll out its product in the U.K. and the U.S. later this year.
Some products, such as savings, invest, overdraft and insurance are limited to Germany and/or Austria. The company will roll out those features to more markets in the future.
It’s also worth noting that N26 is now talking about leveraging artificial intelligence to create a smart banking experience. So you can expect some level of automation in the future if you’re fine with a robot managing your money.
I also asked Stalf about plans to expand beyond Europe and the U.S. given Tencent’s investment, but it’s not on the roadmap for now. “It doesn't necessarily mean anything about our plans to go to Asia,” he said.
There are now 380 people working for N26. The company plans to hire more people, which should speed up product updates. And here are two things you can expect this year. First, N26 is working on shared accounts so that you can use your N26 account with your significant other. Second, you can expect some multi-currency features after the U.K. launch.
“It's a good round to be as independent as possible,” Stalf said. “This funding round really brings N26 to a pre-IPO stage. I think we see a clear path to a very sustainable company with this funding round. Maybe in the next five years there will be an IPO.”
That’s one way of saying that N26’s valuation is now too high for a quick acquisition. Nevertheless, it’s great to see a potential European tech giant growing so quickly and willing to remain an independent company.
In a week when all eyes are on Facebook and the subject of how data about us on social media platforms gets used without us knowing, there’s been some consolidation afoot in the world of media-based big data services. DataSift, the London-based company that pulls data from conversations across social, news and blog platforms, anonymises it, and then parses it for insights for third party organizations, is being acquired by Meltwater, the company originally out of Norway but now based in San Francisco that provides business intelligence services such as media monitoring and AI analytics on internal business communications.
Financial terms are not being disclosed for the deal but it includes technology, employees and DataSift’s customer base. DataSift had raised about $72 million in funding from investors that include Insight Venture Partners, Scale Ventures and Upfront Ventures and the company had never disclosed its valuation. Meltwater is bootstrapped and has never raised outside funding, but it has also been described as a “unicorn” with a billion-dollar valuation — a description that the company would not confirm but also does not contest.
DataSift’s CEO Tim Barker, who is taking on a role at Meltwater leading his team there, said that it’s business as usual for DataSift’s existing customers, while the two will also work on integrating their platforms together. Combined, the customer base includes media companies, brands and educational and other organizations that make use of the data. Disclosed customer names include Viacom, Ogilvy, Air France, Vans, Harvard Business School and Columbia Business School.
The news comes at an interesting time in the world of social media, and more specifically the data that swirls around it. Over the weekend, we saw a huge story break about how the analytics firm Cambridge Analytica was involved in what has amounted to a data scandal: an affiliate working with the firm had used an innocuous-looking research survey to in turn tap into the social graphs and the related data of respondents, by way of Facebook’s API, netting tens of millions of profiles in the process. The fallout is likely to be felt for a long time to come, and may well bring about a new kind of regulation and scrutiny over how personal data is harnessed and used in social networks.
While this is raising a lot of questions already about personal data and social media, DataSift and Meltwater, to be clear, sit at a different section of the data and media continuum. While Meltwater focuses on what’s produced either internally at a business, or by publications and other media companies, DataSift’s currency is the movement of information that’s already being put out onto social networks in public posts, rather than personal details or attributes of users. As Barker describes it, the company has taken an approach that it calls “privacy by design,” in which it works only with anonymised data to reach its insights, and that work is not focused on how to use that data to rebuild profiles or “types” that can be used to match people back up with ads or other marketing.
The idea will be to bring that together with Meltwater’s existing business to enhance it.
“By combining advances in machine learning and the vast amount of publicly available information on the internet, you can today understand and track Porter’s Five Forces,” — a framework for analysing a business’ competitors — “in real time to understand strategic opportunities and threats for your business. Executives that take advantage of this new opportunity create an unfair information advantage over those who don’t,” said Jorn Lyseggen, CEO and founder of Meltwater in a statement.
“DataSift has built a scalable platform that lets developers build data science-driven insights from social firehoses while protecting the privacy of an individual’s data. When combined with the data Meltwater captures and our AI capabilities, developers can disrupt the Business Intelligence space by either building new applications or complementing existing ones with unique signal that can be only derived from external data.”
All the same, it will be interesting to see what the affects are on businesses like these. For one, DataSift currently is built on the cooperation (and by the grace) of social networks — by way of APIs and access to firehoses of data that DataSift and companies like it use to feed their analytics engines. Whether the social media companies decide they would like to try their hands at some of that business themselves, or perhaps get told by regulators that they simply can no longer share information in this way, this leaves companies that are built on that access in a precarious position.
And that’s before you consider the effects of existing legislation like GDPR, which Meltwater says is something the company is built to handle.
“DataSift’s advanced analytics platform is a great compliment to what we have in house, at a time of growing privacy concerns and regulation such as GDPR,” said Aditya Jami, Senior Director of Engineering and Head of AI at Meltwater. “DataSift’s technology will be instrumental… to deliver next generation insights.”
DataSift in its past had a very notable instance of getting cut off from one of those feeds, and feeling the strong after effects: after years of working closely together and being the main users of Twitter’s firehose of Tweets — access that was brokered when DataSift handed over to Twitter the first third-party website “retweet” button to Twitter, created when DataSift was called TweetMeme — Twitter cut off DataSift from its firehose in the wake of a move to beef up its own big-data analytics business.
DataSift eventually regrouped and now works with around 15 partners, including Facebook, LinkedIn and WordPress, but given that its original premise was based around the kind of real-time data that Twitter uniquely provides, it was a big shift for the startup.
Meltwater has had its own scuffles in the past with the third-party services it relies on to make the wheels of its business model turn. Both have moved on from those more spiky years, it seems.
Fast forward to today, the combination of Meltwater and DataSift makes some sense when you think about the evolution of media. The rise of social networking has created another playing field for businesses: they now have a new set of platforms where they can pick up chatter about themselves, and it’s become the hot new place to communicate with customers.
Whether Facebook wants to admit it or not, social networking has become the modern-day descendent of the old-school media industry, and this is one aspect of that. While DataSift was built on trying to better harness and parse chatter from the former, Meltwater was built on the back of media monitoring to essentially provide the same services on the latter.
British startup Made.com says that “a new tier 1 global institutional investor” has made an important investment commitment in the furniture company. This mysterious investor is willing to lead a new $56 million round (£40 million) with existing investors Partech Ventures, Level Equity and Eight Roads Ventures also participating.
It sounds like the funding round isn’t finished just yet, so Made.com could end up raising more than that.
More interestingly, the company has shared some details about its balance sheet. In 2017, the company has been profitable in the U.K., France, Belgium, the Netherlands and Luxembourg. And if you take into account the entire company in all countries where it operates, Made.com is currently cashflow positive.
In 2017, the company has generated a net revenue of $178 million (£127 million), which represents a 40 percent increase compared to 2016. So it sounds like Made.com is on the right path to profitability.
And that’s why the company also announced that Adrian Evans is joining the company as CFO. He previously worked at Yoox Net-A-Porter. This release sounds like Made.com is now optimizing the company for a potential IPO.
The company sells quality furniture at an affordable price. Made.com wants to disrupt high-end furniture stores by controlling everything from manufacturing to the e-commerce platform. This way, the company doesn’t have to pay as many middle players and can offer cheaper prices.
As e-commerce is also becoming the norm, it fosters competition with furniture giants, such as IKEA. Going to Made.com’s website is as easy as going to IKEA’s website after all.
Alibaba is increasing its control of Lazada, its e-commerce marketplace in Southeast Asia it acquired control of in 2016, after it injected another $2 billion into the business and replaced its CEO with a long-standing Alibaba executive.
Alibaba’s first investment came in April 2016 when it bought 51 percent of Lazada for $1 billion, and it added another $1 billion last summer to increase its equity to around 83 percent. With today’s news, Alibaba has invested $4 billion to date which it said will “accelerate the growth plans” and help further tie the Lazada business into Alibaba’s core e-commerce service.
Peng, who is one of Alibaba’s original 12 founders, has been Chairwoman of Lazada and is executive chairman of Ant Financial, Alibaba’s fintech affiliate company. Bittner will remain involved as “senior advisor to Alibaba Group” and apparently involved in future strategy, including further international expansion opportunities.
There’s a new twist in the BroadQualm saga this afternoon as Qualcomm has said it won’t renominate Paul Jacobs, the former executive chairman of the company, after he notified the board that he decided to explore the possibility of making a proposal to acquire Qualcomm.
The last time we saw such a huge exploration to acquire a company was circa 2013, when Dell initiated a leveraged buyout to take the company private in a deal worth $24.4 billion. This would be of a dramatically larger scale, and there’s a report by the Financial Times that Jacobs approached Softbank as a potential partner in the buyout. Jacobs is the son of Irwin Jacobs, who founded Qualcomm, and rose to run the company as CEO from 2005 to 2014. Successfully completing a buyout of this scale would, as a result, end up keeping the company that his father founded in 1985 in the family.
All this comes following Broadcom’s decision to drop its plans to try to complete a hostile takeover of Qualcomm, which would consolidate two of the largest semiconductor companies in the world into a single unit. Qualcomm said the board of directors would instead consist of just 10 members.
“Following the withdrawal of Broadcom’s takeover proposal, Qualcomm is focused on executing its business plan and maximizing value for shareholders as an independent company,” the company said in a statement. “There can be no assurance that Dr. Jacobs can or will make a proposal, but, if he does, the Board will of course evaluate it consistent with its fiduciary duties to shareholders.”
Broadcom dropped its attempts after the Trump administration decided to block the deal altogether. The BroadQualm deal fell into purgatory following an investigation by the Committee on Foreign Investment in the United States, or CFIUS, and then eventually led to the administration putting a stop to the deal — and potentially any of that scale — while Broadcom was still based in Singapore. Broadcom had intended to move to the United States, but the timing was such that Qualcomm would end up avoiding Broadcom’s attempts at a hostile takeover.
BroadQualm has been filled with a number of twists and turns, coming to a chaotic head this week with the end of the deal. Qualcomm removed Jacobs from his role as executive chairman and installed an independent director, and then delayed the shareholder meeting that would give Broadcom an opportunity to pick up the votes to take over control of part of Qualcomm’s board of directors. The administration then handed down its judgment, and Qualcomm pushed up its shareholder meeting as a result to ten days following the decision.
It’s not clear if Jacobs would be able to piece together the partnerships necessary to complete a buyout of this scale. But it’s easy to read between the lines of Qualcomm’s statement — which, as always, has to say it will fulfill its fiduciary duty to its shareholders. The former CEO and executive chairman has quietly been a curious figure to this whole process, and it looks like the BroadQualm saga is nowhere near done.
Zuora, which helps businesses handle subscription billing and forecasting, filed for an initial public offering this afternoon following on the heels of Dropbox’s filing earlier this month.
Zuora’s IPO may signal that Dropbox going public, and seeing a price range that while under its previous valuation seems relatively reasonable, may open the door for coming enterprise initial public offerings. Cloud security company Zscaler also made its debut earlier this week, with the stock doubling once it began trading on the Nasdaq. Zuora will list on the New York Stock Exchange under the ticker “ZUO.” Zuora CEO Tien Tzuo told The Information in October last year that it expected to go public this year.
Zuora’s numbers show some revenue growth, with its subscriptions services continue to grow. But its losses are a bit all over the place. While the costs for its subscription revenues is trending up, the costs for its professional services are also increasing dramatically, going from $6.2 million in Q4 2016 to $15.6 million in Q4 2017. The company had nearly $50 million in overall revenue in the fourth quarter last year, up from $30 million in Q4 2016.
But, as we can see, Zuora’s “professional services” revenue is an increasing share of the pie. In Q1 2016, professional services only amounted to 22% of Zuora’s revenue, and it’s up to 31% in the fourth quarter last year. It also accounts for a bigger share of Zuora’s costs of revenue, but it’s an area that it appears to be investing more.
Zuora’s core business revolves around helping companies with subscription businesses — like, say, Dropbox — better track their metrics like recurring revenue and retention rates. Zuora is riding a wave of enterprise companies finding traction within smaller teams as a free product and then graduating them into a subscription product as more and more people get on board. Eventually those companies hope to have a formal relationship with the company at a CIO level, and Zuora would hopefully grow up along with them.
Snap effectively opened the so-called “IPO window” in March last year, but both high-profile consumer IPOs — Blue Apron and Snap — have had significant issues since going public. While both consumer companies, it did spark a wave of enterprise IPOs looking to get out the door like Okta, Cardlytics, SailPoint and Aquantia. There have been other consumer IPOs like Stitch Fix, but for many firms, enterprise IPOs serve as the kinds of consistent returns with predictable revenue growth as they eventually march toward an IPO.
The filing says it will raise up to $100 million, but you can usually ignore that as it’s a placeholder. Zuora last raised $115 million in 2015, and was PitchBook data pegged the valuation at around $740 million, according to the Silicon Valley Business Journal. Benchmark Capital and Shasta Ventures are two big investors in the company, with Benchmark still owning around 11.1% of the company and Shasta Ventures owning 6.5%. CEO Tien Tzuo owns 10.2% of the company.
Henry, too, is a big TensorFlow fan. And for good reason: it’s because of frameworks like TensorFlow that allow next-generation chip ideas to even get off the ground in the first place. These kinds of frameworks, which have become increasingly popular with developers, have abstracted out the complexity of working with specific low-level hardware like a field programmable gate array (FPGA) or a GPU. That’s made building machine learning-based operations much easier for developers and led to an explosion of activity when it comes to machine learning, whether it’s speech or image recognition among a number of other use cases.