German insurance giant Allianz is following Google and Tencent by backing Go-Jek, the Indonesia-based ride-hailing and local services company valued at over $4.5 billion, after it announced an investment.
Allianz participated in an estimated $1.5 billion Go-Jek funding round that includes participation from the likes of Google, Tencent, Chinese e-commerce giant JD.com, China-based delivery service Meituan and others. The round opened last year when Tencent, the $500 billion Chinese firm, made an investment, but we understand that it is now closed at a valuation that exceeds $4.5 billion. Go-Jek has yet to officially announce or confirm the funding, however.
Go-Jek and Allianz have had a relationship for the past two years, with Allianz Indonesia supporting the company by offering health insurance for Go-Jek drivers and their families. The insurance company said it has plans to “increase access to insurance products and services” for Go-Jek partners and customers. That makes sense given that Go-Jek is moving into financial services products in Indonesia.
“Go-Jek has demonstrated a track record of success within the transportation, logistics and payment sectors and we look forward to supporting their continued growth,” Nazim Cetin, CEO of Allianz X, said in a statement.
Hot on the heels of Grab’s acquisition of Uber Southeast Asia, Go-Jek is working to move into four new marks during April. TechCrunch understands that it has hired country management and operational teams in the Philippines, Thailand and Vietnam, while it is also looking into options in Singapore.
Go-Jek started out operating a bike taxi on-demand service, but it has since added taxi and private car options, a mobile payment business and local services on-demand, such as groceries, massages and more. The company is widely-heralded as the market leader in Indonesia, which is Southeast Asia’s largest economy and the world’s fourth biggest country with a population of over 260 million.
Zipjet, the on-demand laundry and dry cleaning service co-founded by Rocket Internet, has picked up further funding. Described as a “Series B extension,” the new round sees the likes of Henkel Ventures, Amsterdam Venture Partners, and BSH Home Appliances Group — the combined venture of Bosch and Siemens — make a “seven-figure” investment in the company, capital it plans to use for business and product development, including beefing up data-science and marketing.
Founded in 2014 by Florian Färber and Lorenzo Franzi on behalf of Germany’s most famous startup factory, Zipjet was an early mover in the European on-demand laundry and dry cleaning space. Operating in London, Paris and Berlin, the company offers an app and website that makes it super convenient to order a range of laundry and dry cleaning services, including pickup and return delivery. Garments can be cleaned, ironed, folded and delivered to customers “in as little as 24 hours”.
In many ways Zipjet can be viewed as a direct clone of Washio in the U.S., which shuttered in 2016 before being acquired for assets by rival Rinse. In the U.K., which has also seen consolidation, competitors include Laundrapp and the lesser-known and modestly funded Laundryheap. Late last year, Zipjet itself acquired French rival Cleanio.
Despite being an extension of a previous Series B and the exact amount remaining undisclosed, Zipjet’s latest funding is noteworthy because it is being spun as a “strategic” investment in relation to Henkel Ventures (investment arm of chemical and FMCG company Henkel), and Bosch and Siemens’ BSH Home Appliances Group. “This investment is about much more than money, it’s a strategic play with some of the world’s largest producers of washing machines and detergents. We will be able to collaborate on several projects, enabling us to service more customers and develop our product offering,” says Zipjet co-founder and CEO Florian Färber.
What those “projects” will look like, Zipjet isn’t saying, although I understand one being explored in the medium to long-term is giving existing Henkel and BSH Home Appliances Group customers the option to use Zipjet for a selection of clothing that requires extra service or convenience. Other potential ideas include turning partner locations into Zipjet “drop-off and pick-up” points or licensing Zipjet’s logistics software to partners.
Adds Uwe Blanarsch-Simon, Vice President Technical Product Management at BSH Home Appliances, in a statement: “The purpose of our business is to improve the quality of life of our consumers across the globe. Our goal is to serve our consumers with innovative appliances and solutions that make their everyday life easier and more enjoyable. The cooperation with Zipjet is a perfect complement for our core business in the laundry care section”.
Sweden’s Instabridge, the Wi-Fi sharing community and mobile app that has proved particularly popular in Brazil and Mexico, has scored $3 million in further funding — money it’s pegged for Asia expansion, starting with India.
The new round is led by Luminar Ventures (headed up by Magnus Bergman and Jacob Key), with participation from previous backers Balderton Capital, Draper Associates, Moor, and Creandum. The company had previously raised around $5 million.
Originally founded in late 2012 as a way to enable you to share your home Wi-Fi with friends on Facebook, the Stockholm-based company has since pivoted to become a broader Wi-Fi sharing community, and has found traction in developing markets where cellular data remains prohibitively expensive.
The Instabridge app lets you share the details of any Wi-Fi hotspot with other Instabridge users, and provides access to Wi-Fi hotspots shared by everyone else in the community. This has enabled it to build a crowdsourced database of Wi-Fi hotspots, in addition to a list of known public venues that have free Wi-Fi, such as McDonald’s or Starbucks.
Instabridge says it plans to build on the traction it has seen in South America by targeting India’s population of over 1 billion people, of which it says only 400 million currently have internet access. This, Instabridge co-founder Niklas Agevik tells me, will include building out a team in India, and plays into the company’s new-found mission of expanding internet access in developing countries where internet services remain relatively expensive and yet access to the internet is a proven means of “reducing income inequality”.
Meanwhile, I’m told that Instabridge is now seeing 2.3 million Monthly Active Users, and is growing at a rate of 50,000 new users per day. The Instabridge database now houses the details of 2 million Wi-Fi spots.
Liberis, the London-based fintech that provides finance for small businesses, has raised £57.5 million in new funding to help support the company’s growth. The alternative finance provider makes loans against a company’s future credit and debit card sales.
The majority of the new capital being raised by Liberis is debt, which in turn will enable it to issue more loans. The facility is being provided by British Business Investments (the commercial arm of the tax payer-funded British Business Bank), Paragon Bank, and BCI Ltd.
In addition, Blenheim Chalcot has made an equity investment into Liberis. The so-called “digital venture builder” also previously backed Clearscore, the credit scoring startup recently acquired by Experian.
Providing a new financing option as a replacement for a traditional bank loan or extended overdraft — which is increasingly hard for small businesses to come by — Liberis provides funding from £1,000 to £500,000 based on a company’s projected credit and debit card sales. However, the clever part is that the loan is paid back via a pre-agreed percentage of the business’ digital transactions, making it especially attractive to seasonal businesses that have very uneven sales throughout different times of the year. There isn’t a time limit placed on when a loan has to be repaid, either. Instead, the repayment schedule is directly tied to the size and pace of a small business’ card transactions.
In a call with Rob Straathof, CEO of Liberis, he conceded that this means the fintech startup is taking on more of the risk, but says the company is seeing the vast majority of loans paid back within the projected timeframe. To help manage risk and make the required sales projections, Liberis uses various data points, including transactions pulled in from a number payment platform partners such as Worldpay, and Sagepay. Similarly, it also integrates with take-out marketplace Just Eat, which gives the startup the ability to offer financing to small restaurants. The advent of Open Banking, which lets bank account holders share their transaction data via an API, will also enable Liberis to extend its reach.
Examples of small business customers given by Straathof include a local bakery that needs to invest in a new oven, a neighbourhood pub that wants to expand with a beer garden, or an online retailer that needs to incrementally restock to meet rising demand. “Our innovative product has proven particularly popular with retail and hospitality businesses where income fluctuates on a seasonal basis. New lending to small businesses by banks has been decreasing since Q4 16 and Liberis jumps into the void with our ‘pay as you earn’ funding solution,” he says in a statement.
To date, Liberis has helped over 7,000 small businesses, advancing £210 million in funding. However, it isn’t the only ‘pay as you earn’-styled finance provider. Amazon, of course, offers its own business financing based on Amazon Market transaction data. PayPal and Square also offer credit for retailers. Meanwhile, SME peer-to-peer lending platforms, such as Funding Circle, might also be viewed as a competitor.
Today Carbon Black filed to go public, publishing its S-1 document with a $100 million IPO figure as a placeholder.
The security-focused firm based in Massachusetts raised more than $190 million during its life as a private company, including a $54.5 million Series F in 2015 and a more modest $14 million Series F extension in 2016.
Today we’ll take a quick peek at the filing, which joins a number of other technology listings in an active IPO cycle. Carbon Black follows notable debuts such as Spotify and Dropbox, along with other, smaller debuts.
Into the numbers!
The big picture
Carbon Black is a big SaaS shop, something it makes plain in the early sections of its S-1 by noting that its revenue mix has increasingly skewed toward subscriptions. Indeed, according to Carbon Black, the firm’s “[r]ecurring revenue represented 77%, 83% and 88% of our total revenue in 2015, 2016 and 2017, respectively.”
That matters for investors as it helps them understand the company’s growth pace and its cash costs. SaaS companies are notorious for being predictable beasts, but also animals that have slipping growth rates in percentage terms and high upfront cash costs to generate their recurring top line.
Carbon Black is a great example of the model. The firm has grown its subscription (et al.) revenue line item greatly in recent years, but with the cost of rising deficits and high sales and marketing costs (as a percent of revenue and gross margin).
To save us both from reading a slower restatement of fact, here are the company’s guts and bolts, as we like to say:
Carbon Black’s revenue growth for calendar 2017 comes to 39.4 percent, down from 64.7 percent the year before.
Notably, the firm’s net loss fell during 2016, only to rise again in 2017. Companies often post rising deficits as they pursue growth. This is doubly true for SaaS companies willing to pay cash today for revenue growth tomorrow. In simpler terms, SaaS companies pay customer acquisition costs upfront but generate the benefits later on. And if a company is bolstering its sales costs during a growth cycle, the red ink can stretch quite far toward the horizon.
But there’s nuance to the firm’s losses, which we need to understand.
Losing money, and losing money
There’s a fun line item in the above called “[a]ccretion of preferred stock to redemption value,” which has risen and fallen over the past few years.1 This allowed Carbon Black to post a net loss decline in 2016, making its growth that year look particularly attractive. However, the return of that accretion cost pushed 2017’s net loss to a period-high.
Backing out that cost, and focusing on the company’s net loss result pre-accretion expenses, the firm’s net loss has instead posted steady growth as the firm has scaled.
Balling that up, from the above chart we can deduce that Carbon Black is growing at a goodly clip from a revenue base over the $100 million mark, with steadily rising operating losses (speaking loosely) and high sales and marketing costs.
What’s missing? A path to profitability, really. And that’s something the firm’s quarterly results don’t help with, as we will now see:
Let’s walk through that data set together. First, check the rightward progression of the firm’s net losses. Its losses go up with near-steady regularity. Next, execute the same exercise, but with the firm’s “Loss from operations” line. It’s a similar story.
So, as the firm grows, we can safely deduce that it’s an increasingly unprofitable affair. Mostly.
Turning to how the firm spends money, Carbon Black’s quarterly spend on sales and marketing, in percentage-of-revenue terms, was 65 percent in its most recent quarter. That was down from 67 in the year-ago quarter and as high as 71 percent in the first quarter of 2016. Since the first quarter of 2016 to the last of 2017, research and development costs have risen a single point; general and administrative costs fell from 22 percent of revenue to 14 percent. Those modest savings have pushed the firm’s percent-of-revenue losses into the low thirties.
Where they have stuck.
For Carbon Black, the question will be whether it can grow into profitability in the medium-term, or if its growth simply feels expensive compared to other companies; in a liquid market, every investment comes with opportunity costs.
At a minimum, and to Carbon Black’s credit, the security world doesn’t seem to be slowing much.
Odds & ends
Returning to the financials, how Carbon Black calculates its revenue retention is interesting, as it is more conservative than what we often find in similar IPO filings. In this case, Carbon Black doesn’t just compare revenue growth among a customer cohort over time from the clients it didn’t lose; instead, it calculates a more inclusive metric that includes customer churn.
But then Carbon Black goes a bit further, adding that it also “exclude[s] the impact of any add-on purchases from these customers during the measurement,” making its retention metric even stricter than we might have guessed. Regardless, we can read the results: “[Carbon Black’s] retention rate was 93% in 2015, 92% in 2016 and 93% in 2017.” That’s steady enough.
In closing, let’s talk bank accounts. How much cash does Carbon Black have on hand? The answer is not that much: $36.1 million. That’s a low-enough figure that we can presume that the firm is going public not because it simply wants to, but because it needs to raise new capital.
That’s no sin, mind, but let’s dismount with cash flow results to see if we are right. The firm’s free cash flow in 2016 came to negative $25.3 million. It fell, however, to just negative $13.8 million in 2017. Enough to run the company out of oxygen in just a few years. However, with, say, another $100 million in the bank, Carbon Black would have more than enough cash to scale — provided it doesn’t start to consume more cash to grow.
More when it prices — assuming this entire exercise isn’t just an attempt to get bought.
Explained on page F-43 of the S-1, this cost is the “increase [in] the carrying values of the Series B, C, D, E, E-1 and F redeemable convertible preferred stock” over time. This accounting charge leads to “decreases to additional paid-in capital and an increase to accumulated deficit,” but has no bearing on operating results.
It’s April, that means tax returns for people in the U.S. very soon. Given the breakout year that crypto had in 2017 — despite prices cooling down in recent months — and well-intended individuals might be thinking about whether to file taxes based on gains they enjoyed from bitcoin or other cryptocurrencies.
It’s good timing, then, for CoinTracker — a San Francisco-based startup currently tracking $200 million in crypto assets — to pop its head above the parapet and announce that it has raised a $1.5 million seed round.
We wrote about the company earlier this year when it was part of Y Combinator’s winter cohort, and now it has spread its wings with a round led by Initialized Capital — a seed investor in billion-dollar crypto exchange Coinbase — with Y Combinator and a host of angel investors joining in for the ride. Some of those include Protocol Labs CEO Juan Benet and Paul Buchheit, the engineer who created Gmail.
CoinTracker is (as the name suggests) a product that lets you track your crypto portfolio.
Sure, there are a tonne of such services and apps on the market but, having bought and used most of them, there’s none that really fits snuggly. That’s because a lot of the data input is manual. That’s important if you truly want to track the success of your investing, you need to know obvious information like what the price of bitcoin was when you bought. When you factor in crypto-to-crypto trading — e.g. trading bitcoin for ethereum — and the price changes that happen, suddenly your manual attempt to track performance is lacking.
That’s just speaking as a hobbyist. More serious investors are even more underserved, and that is where CoinTracker is aiming to make its mark.
The service tracks your crypto across wallet addresses — using public information, nothing private — while it throws in API keys from the top 14 crypto exchanges. That helps fill in more gaps and give you a fuller read on how your crypto investment has performed. A transfer matching algorithm is in place to help figure out trades on decentralized exchanges, which are more complicated to track.
By pulling that information, CoinTracker is also in a position to help those well-intended individuals I mentioned earlier give the taxman an accurate read on they crypto gains to remain IRS compliant.
Going forward, the plan is to tap into that holistic picture of crypto portfolios to offer more services, CoinTracker co-founder Chandan Lodha told TechCrunch in an interview.
Lodha, formerly a product manager with Google X, started the service alongside co-founder and former TextNow CTO Jon Lerner because both were looking for something to track their crypto investment hobby. When they realized a whole lot more people — both on the more serious and casual end of the spectrum — were too, they made it their main focus.
Lodha said the service aims to set itself apart with a focus on ease of use and simplicity, and he expects that to continue and be reflected in future services that could include trading via exchanges inside the app.
“The key reason we’ve had some success to date is due to focusing on the UX,” Lodha said. “There are tonnes of other tools but one thing that really resonates with our users is that we’ve made it easy to use for mainstream people, not just expert cryptography folks.”
Indeed, gathering and acting on user feedback is a common theme with Lodha, who said the money will go towards adding to CoinTracker’s developer team to work on the “large number” of user requests received.
Now to price: the basic tracking service is free, but users pay from $49 up to $999 per year for more advanced features centered around optimizing tax filings by computing capital gains reports using FIFO, LIFO or HIFO accounting.
Disclosure: Writer owns a small amount of cryptocurrency.
Cambridge, U.K.-based startup Spectral Edge has closed a $5.3M Series A funding round from existing investors Parkwalk Advisors and IQ Capital.
The team, which in 2014 spun the business out of academic research at the University of East Anglia, has developed a mathematical technique for improving photographic imagery in real-time, also using machine learning technology.
As we’ve reported previously, their technology — which can be embedded in software or in silicon — is designed to enhance pictures and videos on mass-market devices. Mooted use cases include for enhancing low light smartphone images, improving security camera footage or even for drone cameras.
This month Spectral Edge announced its first customer, IT services provider NTT data, which said it would be incorporating the technology into its broadcast infrastructure offering — to offer its customers an “HDR-like experience”, via improved image quality, without the need for them to upgrade their hardware.
“We are in advanced trials with a number of global tech companies — household names — and hope to be able to announce more deals later this year,” CEO Rhodri Thomas tells us, adding that he expects 2-3 more deals in the broadcast space to follow “soon”, and enhance viewing experiences “in a variety of ways”.
On the smartphone front, Thomas says the company is waiting for consumer hardware to catch up — noting that RGB-IR sensors “haven’t yet begun to deploy on smartphones on a great scale”.
Once the smartphone hardware is there he reckons its technology will be able to help with various issues such as white balancing and bokeh processing.
“Right now there is no real solution for white balancing across the whole image [on smartphones] — so you’ll get areas of the image with excessive blues or yellows, perhaps, because the balance is out — but our tech allows this to be solved elegantly and with great results,” he suggests. “We also can support bokeh processing by eliminating artifacts that are common in these images.”
The new funding is going towards ramping up Spectral Edge’s efforts to commercialize its tech, including by growing the R&D team to 12 — with hires planned for specialists in image processing, machine learning and embedded software development.
The startup will also focus on developing real-world apps for smartphones, webcams and security applications alongside its existing products for the TV & display industries.
“The company is already very IP strong, with 10 patent families in the world (some granted, some filed and a couple about to be filed),” says Thomas. “The focus now is productizing and commercializing.”
“In a year, I expect our technology to be launched or launching on major flagship [smartphone] devices,” he adds. “We also believe that by then our CVD (color vision deficiency) product, Eyeteq, is helping millions of people suffering from color blindness to enjoy significantly better video experiences.”
Over the course of the last few years, the Holberton School of Witchcraft and Wizardry Engineering has made a name for itself as one of the more comprehensive coding schools. The two-year program trains full-stack engineers with a focus on the basics of engineering and sees itself as an alternative to a traditional college experience. Today, the San Francisco-based school announced that it has raised an $8.2 million Series A round that will help it expand its programs.
The funding round was led by current investors daphni and Trinity Ventures. The Omidyar Network joined as a new investor. With this, the school has now raised a total of $13 million.
Holberton is currently teaching about 200 students (who have to pass a pretty rigorous entry exam) and the plan is to scale the program to 1,000 students per year. That’s a larger cohort than the computer science programs at even the biggest schools currently teach. Past students have found jobs at companies like Apple, IBM, Tesla, Docker and Dropbox. Instead of charging tuition, the school takes a 17 percent cut of its graduates’ salary for the first three years after they get their jobs.
To enable its expansion to 1,000 students, the team recently moved into a far larger space in San Francisco that can handle about 500 students. As the team has repeatedly told me, part of its mission is to bring in a diverse group of students — and one that isn’t held back by the prospect of student loans. In its recent classes, about 40 percent of the students were women, for example, and a slight majority of students were minorities. That’s sadly still quite unusual in Silicon Valley.
“Everyone deserves a first-rate education. Students at Holberton come from all walks of life, from cashiers to musicians to poker players (as well as right out of high school) without the money, background and education needed to be ‘Ivy League material,’” said Julien Barbier, co-founder and CEO of Holberton. “With Holberton, they now have the same opportunity as the more fortunate and they leave with skills to learn for a lifetime. Our students compete (sometimes after only 9-12 months) with Ivy League graduates and get the jobs.”
Uber has acquired bike-sharing startup JUMP for an undisclosed amount of money. This comes shortly after TechCrunch reported that JUMP was in talks with Uber as well as with investors regarding a potential fundraising round involving Sequoia Capital’s Mike Moritz. At the time, JUMP was contemplating a sale that exceeded $100 million. We’re now hearing that the final price was closer to $200 million, according to one source close to the situation.
JUMP’s decision to sell to Uber came down to the ability to realize the bike-share company’s vision at a large scale, and quickly, JUMP CEO Ryan Rzepecki told TechCrunch over the phone. He also said Uber CEO Dara Khosrowshahi’s leadership impacted his decision.
“I had a chance to spend a couple of evenings with him, and really talk through his vision for the business and our vision, and saw a lot of alignment,” Rzepecki said.
He noted that while Uber had a rocky 2017, he’s optimistic Uber is on the right track.
“I think it’s really on the right course now and [Khosrowshahi] believes the way we approach working with cities and our vision for partnering with cities” aligns with Uber’s mission, Rzepecki said. “That was important for me and his desire to do things the right way. This is a great outcome and gives me a chance to bring my entire vision to the entire world.”
Meanwhile, becoming a top urban mobility platform is part of Uber’s ultimate vision, Khosrowshahi told TechCrunch over the phone. As more people live in cities, there will need to be a broader array of mobility options that work for both customers and cities, he said.
“We see the Uber app as moving from just being about car sharing and car hailing to really helping the consumer get from A to B int he most affordable, most dependable, most convenient way,” Khosrowshahi said. “And we think e-bikes are just a spectacularly great product.”
As part of the acquisition, JUMP employees will join Uber’s team but the bike-share company will carry on as an independent, wholly controlled subsidiary, Rzepecki said.
JUMP is best known for operating dockless, pedal-assist bikes. JUMP’s bikes can be legally locked to bike parking racks or the “furniture zone” of sidewalks, which is where you see things like light poles, benches and utility poles. The bikes also come with integrated locks to secure the bikes.
Uber’s acquisition of JUMP is not too surprising. In January, Uber partnered with JUMP to launch Uber Bike, which lets Uber riders book JUMP bikes via the Uber app. The majority of trips, however, still come through the JUMP app, Rzepecki said. For the time being, JUMP’s app will continue to exist but that may eventually change.
“It’s our hope the experience will be more deeply integrated into the Uber app moving forward and reflects what Uber has been working on in terms of being a multi-modal platform,” Rzepecki said.
Meanwhile, Uber’s international competitors have made similar moves. India-based ride-hailing startup expanded into bicycles in December. Called Ola Pedal, the service is available on a handful of university campuses in India. Then there’s Southeast Asia’s Grab and China’s Didi, which both launched their own respective bike-share services this year. Both Didi and Grab have also invested directly in bike-sharing startups Ofo and OBike, respectively.
With JUMP under the ownership of Uber, we likely won’t see JUMP partner with any of Uber’s direct competitors, but Rzepecki said other types of partnerships could be interesting.
“I think the idea of us being inside the Lyft app is not necessarily likely but there may be other partnerships that we’re able to do that are less directly competitive,” Rzepecki said.
In January, JUMP closed a $10 million Series A round led by Menlo Ventures with participation from Sinewave Ventures, Esther Dyson and others. JUMP’s January funding brought its total amount raised to $11.1 million. That same month, JUMP became the first stationless bicycle service to receive a permit to launch in San Francisco. Since then, JUMP has launched 250 dockless, pedal-assist bikes on the streets of San Francisco. Currently, people take between six to seven rides per day, with an average trip length of 2.6 miles, Rzepecki said.
“We really know we are serving a commute,” Rzepecki said. “We’re serving the morning and evening commute. I think 22 percent of trips are in the morning and 20 percent in the evening commute. We’ve really been a commuting solution.”
In October, the SFMTA will determine if JUMP can deploy an additional 250 bikes. The SFMTA will make its decision based on an evaluation of the program’s first nine months. That evaluation, the SFMTA told TechCrunch in January, will entail determining where the city should promote stationless bike-share, the impact stationless bike-share has on the public right-of-way, “including maintaining accessible pedestrian paths of travel, as well as the enforcement/maintenance burden on city staff.”
JUMP also operates its e-bike network in Washington D.C., and plans to launch in Sacramento and Providence, Rhode Island later this year. Through its software and hardware offerings, it operates via third-parties, like cities, campuses and corporations, in 40 markets including Portland, New Orleans and Atlanta. JUMP is also interested in deploying its bikes in Europe, where it hopes to be by spring of 2019. JUMP has also applied for a permit to operate in New York, which recently legalized electric, pedal-assist bikes.
E-bikes, of course, are not the only way to get around town these days. This year, we’ve seen a number of startups launch electric scooters. While San Francisco is trying to figure out how to regulate them, people are watching closely to see what comes next.
Khosrowshahi is one of those people. He told me he’s been “staring at some of them quizzically on the streets.”
Scooters are in an “odd spot” due to the lack of regulation, Khosrowshahi said, but Uber will “look at any and all options” that “move in a direction that is city friendly.”
City Pantry, the office catering marketplace to make it easy to order in food for staff, company events and meetings, has restocked its funding.
The London-based startup has raised a new £4 million round led by Octopus Investments with participation from existing investors and Newable Private Investing — capital it plans to use to expand into more cities across the U.K. over the next 18 months.
Founded by Stuart Sunderland in 2013, City Pantry set out to improve the catering options open to companies in London. Its marketplace connects local caterers to businesses who need quality food delivered to their offices or to cover events, meeting and regular team meals.
When the startup first launched, Sunderland viewed its main competitors as traditional corporate caterers, sandwich retailers, pizza delivery places, and to a lesser extent, the newer breed of restaurant delivery companies such as Deliveroo and Uber’s UberEATs.
“While we’ve all seen the phenomenal growth of online food delivery in B2C over the past few years, food to businesses lags significantly behind,” he says, noting that legacy relationships with caterers and “the unique pressures of ordering for larger groups make innovation and progress slower”.
City Pantry claims to now serve over 20,000 meals per week to the employees of more than 500 companies, including Google, Amazon, PayPal, Slack, Spotify and Unilever. The marketplace has on-boarded 300 popular London restaurants and caterers.
This, says Sunderland, is evidence that City Pantry is successfully bridging the gap between the type of food options consumers have become accustomed to and what is traditionally available in the world of corporate catering.
More broadly, he says the company is tapping into a growing demand from employees for “greater workplace wellbeing”. This in turn is seeing employers wanting to offer more than just a good salary.
Grant Paul-Florence, Head of Intermediate Capital at Octopus Investments, echoes this sentiment, arguing that City Pantry is “uniquely placed to satisfy the growing appetite for high quality, hassle-free workplace meals, which organisations are increasingly demanding as they work to build an attractive company
culture”.
Meanwhile, I’m told the startup has made a couple of significant hires in the last 12 months: Kate Miller (previously McKinsey, Google, and HelloFresh) has joined as CCO, and Sharon Lee (previously DHL, Elster Group, SushiDaily) has joined as COO.
