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Friday, December 4, 2020

Rockset launches out of stealth with $21.5M investment

Rockset, a startup that came out of stealth today, announced $21.5 million in previous funding and the launch of its new data platform that is designed to simplify much of the processing to get to querying and application building faster. As for the funding, it includes $3 million in seed money they got when they started the company, and a more recent $18.5 million Series A, which was led by Sequoia and Greylock. Jerry Chen, who is a partner at Greylock, sees a team that understands the needs of modern developers and data scientists, one that was born in the cloud and can handle a lot of the activities that data scientists have traditionally had to handle manually. “Rockset can ingest any data from anywhere and let developers and data scientists query it using standard SQL. No pipelines. No glue. Just real-time operational apps,” he said. Company co-founder and CEO Venkat Venkataramani is a former Facebook engineer, where he learned a bit about processing data at scale. He wanted to start a company that would help data scientists get to insights more quickly. Data typically requires a lot of massaging before data scientists and developers can make use of it, and Rockset has been designed to bypass much of that hard work that can take days, weeks or even months to complete. “We’re building out our service with innovative architecture and unique capabilities that allows full-featured fast SQL directly on raw data. And we’re offering this as a service. So developers and data scientists can go from useful data in any shape, any form to useful applications in a matter of minutes. And it would take months today,” Venkataramani explained. To do this you simply connect your data set (wherever it lives) to your AWS account and Rockset deals with the data ingestion, building the schema, cleaning the data, everything. It also makes sure you have the right amount of infrastructure to manage the level of data you are working with. In other words, it can potentially simplify highly complex data processing tasks to start working with the raw data almost immediately using SQL queries. To achieve the speed, Venkataramani says they use a number of indexing techniques. “Our indexing technology essentially tries to bring the best of search engines and columnar databases into one. When we index the data, we build more than one type of index behind the scenes so that a wide spectrum of pre-processing can be automatically fast out of the box,” he said. That takes the burden of processing and building data pipelines off of the user. The company was founded in 2016. Chen and Sequoia partners Mike Vernal joined the Rockset board under the terms of the Series A funding, which closed last August.

Scared to trade stocks? Titan algorithmically invests for you

Titan could put an end to stock market FOMO. The app choose the best 20 stocks by scraping top hedge fund data, adds some shorts based on your personal risk profile, and puts your money to work. No worrying about market fluctuations or constantly rebalancing your portfolio. You don’t have do anything, but can get smarter about stocks thanks to its in-app explanations and research reports. Titan wants to be the easiest way to invest in stocks for a mobile generation who want an affordable coach to guide them through the market themselves. “Our goal is to take things that aren’t accessible [in wealth management] and make them accessible, starting with hedge fund” says Titan co-founder Joe Percoco. That potential to democratize one of the keys to financial mobility has won Titan a $2.5 million seed round from Y Combinator’s co-founder Paul Graham, president Sam Altman, and partners including Gmail creator Paul Bucheit. The rest of the capital comes from Maverick Ventures, BoxGroup, and Liquid2 Ventures. “Titan is where investing meets virality” says Graham. “Those are two very powerful forces.” Since TechCrunch broke the news of Titan’s launch in August, it’s doubled its assets under management to $20 million and hired its first non-founder engineer. Now it’s launching in-app educational videos so stock market dummies can get up to speed if they want to understand where there money’s going amidst a swirling see of financial news..”There are so many different headlines telling so many different narratives” Percoco tells me. “Everyone is searching for explanations in a voice they trust. An ‘ETF’ can’t talk back. Sometimes a human face is better than writing. A video can really help people make choices.” Here’s it’s two-minute video about Facebook’s Q2 earnings a few months ago, explaining why the share price crashed 25 percent: Percoco and Clayton Gardner met on their first day of Wharton business school while their third co-founder was earning a hedge fund patent and studying computer science at Stanford. They went on to work at hedge funds and private equity firms like Goldman Sachs, but got fed up just growing the fortunes of the already rich. So they started Titan to invent a modern, mobile version of BlackRock, the investment giant founded in the 80s. Titan uses the public disclosures of hedge funds to find consensus around the 20 best performing stocks. With as little as $1000, users can let Titan robo-manage their investments for a 1 percent fee on assets. Users provide some info on how big they want to gamble, and Titan personalizes their portfolio with more or less conservative shorts to hedge their bets. Titan’s simplicity combined with the sense of participation could help it grow quickly. It sits between do-it-yourself options like Robinhood or E*Trade where you’re basically left to fend for yourself, and totally passive options like Wealthfront and Betterment, where you’re so divorced from your portfolio that you’re not learning. Managed hedge funds and fellow active investment vehicles like BlackRock with a human advisor can require a $100,000 minimum investment that’s too steep for millennials. “Even the best hedge fund in the world is only going to send you a PDF every 90 days” Percoco explains. But Titan doesn’t want you nervously checking your portfolio non-stop. “Our median user checks the app once per day.” That seems like a healthy balance between awareness and sanity. It thinks its education and informative push notifications make it worth a higher required investment and fees than Wealthfront charges. Essentially, Titan is a stock trading auto-pilot merged with a flight simulator so you improve your finance skills without having to fear a crash. Percoco tells me the sense of accomplishment that engenders is why clients say they’re telling friends about Titan. “When I invest, I look for companies that are growing quickly and making a huge positive impact on the world. Titan is one of those companies” investor Altman says. “I think they could improve the financial wellbeing of an entire generation.”

Chat app Line’s games business raises $110M for growth opportunities

Messaging app firm Line has given up majority control of its Line Games business and raised outside financing as it seeks to expand its collection of games titles and look at global expansion options. The Line Games business was formed earlier this year when Line merged its existing gaming division from NextFloor, the Korea-based game publisher that it acquired in 2017. Now the business has taken on capital from Anchor Equity Partners, which has provided 125 billion KRW ($110 million) in financing via its Lungo Entertainment entity, according to a disclosure from Line. A Line spokesperson clarified that the deal will see Anchor acquire 144,743 shares to take a 27.55 percent stake in Line Games. It looks like those are from existing investors since Line Corp confirmed that its own shareholding will be reduced from 57.6 percent to a minority 41.73 percent stake. Korea-based Anchor is best known for a number of deals in its homeland including investments in e-commerce giant Ticket Monster, Korean chat giant Kakao’s Podotree content business and fashion retail group E-Land. Line operates its eponymous chat app which is the most popular messaging platform in Japan, Thailand and Taiwan, and also significantly used in Indonesia, but gaming is a major source of income. This year to date, Line has made 28.5 billion JPY ($250 million) from its content division, which is primarily virtual goods and in-app purchases from its social games. That division accounts for 19 percent of Line’s total revenue, and it is a figure that is only better by its advertising unit, which has grossed 79.3 billion JPY, or $700 million, in 2018 to date. The games business is currently focused on Japan, Korea, Thailand and Taiwan, but it said that the new capital will go towards finding new IP for future titles and identifying games with global potential. It is also open to more strategic deals to broaden its focus. While Line has always been big on games, Line Games isn’t just building for its own service. The company said earlier this year that it plans to focus on non-mobile platforms, which will include the Nintendo Switch among others consoles. That comes from the addition of NextFloor, which is best known for titles like Dragon Flight and Destiny Child. Dragon Flight has racked up 14 million users since its 2012 launch, at its peak it saw $1 million in daily revenue. Destiny Child, a newer release in 2016, topped the charts in Korea and has been popular in Japan, North America and beyond. Line went public in 2016 via a dual U.S.-Japan IPO that raised over $1 billion.

Monzo, the U.K. challenger bank, raises £85M Series E at a £1B pre-money valuation

Monzo, the U.K. challenger bank that now boasts more than a million customers, has raised £85 million in Series E funding. The round is led by U.S. venture capital firm General Catalyst, and Accel. Existing backers Passion Capital, Goodwater, Thrive Capital, Orange Digital Ventures, and Stripe also participated. The latest funding was at a pre-money valuation of £1 billion (~$1.27b), meaning that Monzo is now a bonafide member of the U.K. fintech unicorn club, joining recent entrant Revolut. Meanwhile, the bank upstart is also planning to launch a large crowdfunding round later this year. Like a lot of other fintechs — and before it was fashionable — Monzo has historically opened up its fundraising to its passionate community and other armchair investors. In a brief call earlier today with Monzo co-founder and CEO Tom Blomfield, he told me the new funding will be primarily used for increasing headcount to further develop the Monzo product line and to cover other operational costs now that the challenger bank has reached “contribution margin positive”. In other words, on average each customer is generating more revenue than the cost of servicing their current account, which is undoubtedly evidence of how much progress Monzo has made over the last year. This includes bringing down costs, such as weaning customers off costly debit card “top ups” and imposing a cap on fee-free foreign ATM withdrawals — as well as starting to generate meaningful revenue. On where that revenue is now coming from, Blomfield cited lending in the form of Monzo’s overdraft product, interest it earns on deposits (currently Monzo doesn’t share that interest with customers, even if it is very small in percentage terms), and interchange fees (the money Monzo makes any time you spend on your Monzo debit card). Another revenue stream is the nascent Monzo marketplace, which he says will be the next focus going forward now that the Monzo current account, with the omission of savings accounts and cash deposits, is basically “done“. That’s noteworthy given that Monzo embraced developers extremely early on in its existence, holding four very popular hackathons and conducting a few early partnership pilots, but has since mostly stalled on the roll out of marketplace banking and other partnership integrations, sometimes to the frustration of the wider U.K. fintech ecosystem and developers. The exception being the recent integration with TransferWise for sending money abroad. Blomfield doesn’t dispute this framing but says it wasn’t that Monzo changed course on offering an open API or working on deeper integrations that will put partner products inside of the Monzo banking app, but that gaining a banking license and building out all of the features of the current account had to be the short-term priority. Now that heavy lifting is complete and armed with new operational capital, it is marketplace game on. To that end, the Monzo CEO says headcount over the next year could double again, from around 450 now to 900. And in terms of customer growth, extrapolating stats from a recent Nationwide annual report (PDF link), the challenger bank says it now accounts for 15 percent of all new bank accounts opened each month in the U.K. It also says it has 800,000 monthly active users. Account switching — that is customers ditching their existing bank — still makes up the bulk of customer acquisition, even if Monzo recently began targeting 16-18 year olds who would be opening their first ever bank account. Another key metric: the number of customers who deposit their salary each month with Monzo is now at around 26 percent, although I’m told that this isn’t as important for Monzo as it might be for traditional banks and isn’t the main correlation with engagement or those accessing a Monzo overdraft. Asked what Monzo’s biggest challenge will be over the next year, its CEO doesn’t mince his words: “Increasing revenue,” he says. This means ensuring that its lending models are correct (ie avoiding too many defaults as it scales) and steadfastly growing the marketplace and third-party product partnerships that will bring in additional revenue. I was also intrigued to see a U.S. venture capital firm once again back the U.K. challenger bank — many of its existing backers have a U.S. bent and Blomfield has made no secret of his ambitions to expand across the pond at some stage. In an email exchange a few hours before publication, General Catalyst’s Adam Valkin (who was previously at Accel in London where he invested in GoCardless, which Blomfield also co-founded), gave me the following statement: We’re investing in Tom and his team because they are delivering a high-quality banking experience for consumers at scale that is sorely missing from the market. Today’s incumbent UK banks represent billions of market cap but suffer from low NPS scores, reflecting their inability to meet their customers’ needs. Monzo, in contrast, explicitly builds product and banking features in a community-driven approach based on customers’ feedback and requests. This has driven very high organic growth, strong retention and engagement, and unprecedented customer love for and trust in Monzo. Beyond this, Tom and the Monzo team have improved upon the traditional business model of banking, removing the traditional offline retail-based banking model in favor of a highly scalable and lower cost mobile-only experience. All of this creates the potential for Monzo to become a leading U.K. bank, launch a successful financial marketplace, and eventually expand internationally.

Monzo, the UK challenger bank, raises £85M Series E at a £1B pre-money valuation

Monzo, the U.K. challenger bank that now boasts more than a million customers, has raised £85 million in Series E funding. The round is led by U.S. venture capital firm General Catalyst and Accel. Existing backers Passion Capital, Goodwater, Thrive Capital, Orange Digital Ventures and Stripe also participated. The latest funding was at a pre-money valuation of £1 billion (~$1.27b), meaning that Monzo is now a bona-fide member of the U.K. fintech unicorn club, joining recent entrant Revolut. Meanwhile, the bank upstart is also planning to launch a large crowdfunding round later this year. Like a lot of other fintechs — and before it was fashionable — Monzo has historically opened up its fundraising to its passionate community and other armchair investors. In a brief call earlier today with Monzo co-founder and CEO Tom Blomfield, he told me the new funding will be primarily used for increasing headcount to further develop the Monzo product line and to cover other operational costs now that the challenger bank has reached “contribution margin positive.” In other words, on average each customer is generating more revenue than the cost of servicing their current account, which is undoubtedly evidence of how much progress Monzo has made over the last year. This includes bringing down costs, such as weaning customers off costly debit card “top ups” and imposing a cap on fee-free foreign ATM withdrawals — as well as starting to generate meaningful revenue. On where that revenue is now coming from, Blomfield cited lending in the form of Monzo’s overdraft product, interest it earns on deposits (currently Monzo doesn’t share that interest with customers, even if it is very small in percentage terms) and interchange fees (the money Monzo makes any time you spend on your Monzo debit card). Another revenue stream is the nascent Monzo marketplace, which he says will be the next focus going forward now that the Monzo current account, with the omission of savings accounts and cash deposits, is basically “done.” That’s noteworthy, given that Monzo embraced developers extremely early on in its existence, holding four very popular hackathons and conducting a few early partnership pilots, but has since mostly stalled on the roll out of marketplace banking and other partnership integrations, sometimes to the frustration of the wider U.K. fintech ecosystem and developers (the exception being the recent integration with TransferWise for sending money abroad). Blomfield doesn’t dispute this framing, but says it wasn’t that Monzo changed course on offering an open API or working on deeper integrations that will put partner products inside of the Monzo banking app, but that gaining a banking license and building out all of the features of the current account had to be the short-term priority. Now that heavy lifting is complete and armed with new operational capital, it is marketplace game on. To that end, the Monzo CEO says headcount over the next year could double again, from around 450 now to 900. And in terms of customer growth, extrapolating stats from a recent Nationwide annual report (PDF link), the challenger bank says it now accounts for 15 percent of all new bank accounts opened each month in the U.K. It also says it has 800,000 monthly active users. Account switching — that is customers ditching their existing bank — still makes up the bulk of customer acquisition, even if Monzo recently began targeting 16 to 18-year-olds who would be opening their first-ever bank account. Another key metric: The number of customers who deposit their salary each month with Monzo is now at around 26 percent, although I’m told that this isn’t as important for Monzo as it might be for traditional banks and isn’t the main correlation with engagement or those accessing a Monzo overdraft. Asked what Monzo’s biggest challenge will be over the next year, its CEO doesn’t mince his words: “Increasing revenue,” he says. This means ensuring that its lending models are correct (i.e. avoiding too many defaults as it scales) and steadfastly growing the marketplace and third-party product partnerships that will bring in additional revenue. I was also intrigued to see a U.S. venture capital firm once again back the U.K. challenger bank — many of its existing backers have a U.S. bent and Blomfield has made no secret of his ambitions to expand across the pond at some stage. In an email exchange a few hours before publication, General Catalyst’s Adam Valkin (who was previously at Accel in London, where he invested in GoCardless, which Blomfield also co-founded), gave me the following statement: We’re investing in Tom and his team because they are delivering a high-quality banking experience for consumers at scale that is sorely missing from the market. Today’s incumbent UK banks represent billions of market cap but suffer from low NPS scores, reflecting their inability to meet their customers’ needs. Monzo, in contrast, explicitly builds product and banking features in a community-driven approach based on customers’ feedback and requests. This has driven very high organic growth, strong retention and engagement, and unprecedented customer love for and trust in Monzo. Beyond this, Tom and the Monzo team have improved upon the traditional business model of banking, removing the traditional offline retail-based banking model in favor of a highly scalable and lower cost mobile-only experience. All of this creates the potential for Monzo to become a leading U.K. bank, launch a successful financial marketplace, and eventually expand internationally.

WeWork-owned Meetup brings on David Siegel as CEO

Late this past summer, Meetup founder and CEO Scott Heiferman moved into the chairman position, leaving the CEO role vacant. Today, Meetup has announced that David Siegel will be taking the helm at the 15-year-old company. Siegel hails from Investopedia, where he served as CEO for three years, tripling the company’s revenue and doubling its traffic in that period. Before his time at Investopedia, Siegel was president of Seeking Alpha, overseeing U.S.-based functions including sales, marketing, product and bizdev. At the end of 2017, co-working behemoth WeWork acquired Meetup for a reported $200 million. Meetup’s entire premise is based on the idea of community — use the internet to get people off the internet and talking in real life. That’s a central theme in the WeWork strategy. Here’s what Siegel had to say about the transition: In a world where technology often drives greater distances between people, Meetup uses technology to bring real, in-person and life-changing connections to millions of people globally. Together with WeWork, Meetup is reinventing how people work, live, learn, play, and create community every day. I am thrilled to be a be a part of this incredibly exciting venture to bring more people together. Meetup currently has more than 40 million members, 320,000 Meetup groups and facilitates 12,000 meetups per day around the world.

Even Financial acquires Birch Finance, a credit card rewards startup

On the heels of a funding round to the tune of $18.8 million, Even Financial has acquired Birch Finance for an undisclosed sum. Even offers products like a pre-approval API, real-time pricing, machine learning optimization, a product comparison and recommendation engine for consumers and more. Birch Finance, a TC Startup Battlefield alum that raised $1 million earlier this year, aims to help people make the most of the credit cards in their wallets by telling them which cards will earn them the most points. It works by analyzing your transaction history to identify missed rewards opportunities. Even’s plan with this acquisition is for Even to expand its offerings within the credit card space. “The credit card market continues to expand with millions of consumers opening up hundreds of different types of credit cards every year for countless reasons,” Rosen said in a statement. “Birch already has one of the largest credit card databases and their technology perfectly complements our existing platform as we expand our offering to the credit card space. This acquisition will allow our partners to optimize the process of getting the right cards to the right consumers.” Even’s slate of partners includes Credit.com, a personal loans marketplace, The Penny Hoarder and Transunion. With the Birch team on board, Even will enable its partners to save on consumer acquisition while also scaling its credit card recommendation platform. At Even, Birch co-founder Cohen will serve as senior director of the credit card marketplace. In a statement, Cohen said, “We saw a clear synergy with Even’s business strategy and growth plans, and I’m thrilled to join Even’s team as we expand and scale our offerings into new areas.”

Concord raises $25 million for its contract management platform

Concord is raising a new $25 million funding round led by Tenaya Capital, with existing investors CRV and Alven also participating. The company is building a platform that makes it easier to manage your contracts all the way from writing them to signing them. Even if you used a service like DocuSign to sign a contract in the past, chances are you or the sender used Microsoft Word to write the contract. It’s fine if you’re the only one working on this contract. But it can quickly become a mess as your legal team gets larger. “It's ultimately bringing a B2C experience to a really complex B2B experience,” VP of Marketing Travis Bickham told me. And one of the company’s main challenge has been to make it convenient for all teams in your organization. If you work in human resources, you’re dealing with HR contracts. If you’re an office manager, you may need to sign a contract to order a new fridge. If you’re on the sales team, you want to make sure your client signs a contract. The procurement team also wants some sort of legal proof from its partners. And the list goes on. Concord lets you create templates and workflows. For instance, the most basic contracts don’t require the same attention to details. A non-disclosure agreement is pretty standard. You just have to replace some fields and make the person sign it. You can create an approval process for more complicated contracts. For instance, you can say that the legal team has to approve any sales contract above $100,000. Concord has also built integrations with third-party tools. For instance, you can generate a contract in Salesforce using Concord’s integration. There are currently 80 people working for Concord in San Francisco and Paris. With today’s funding round, the company plans to hire more people, get more clients, target bigger companies, etc. Concord currently works with 200,000 companies.

Social commerce startup Goxip lands $1.4M investment to add flexible payments

Social e-commerce startup Goxip raised $5 million in January, and now the Hong Kong-based business has brought in more cash with a strategic $1.4 million investment from financial services company Convoy. Existing backers including Chinese photo app company Meitu also took part. Convoy offers a range of services that include asset management, insurance and other investment options. Hong Kong’s largest financial advisory with over 100,000 customers, Convoy isn’t in great shape now. It has been in crisis over legal action and a corruption investigation that is centered around a former company director. The company’s shares remain suspended on the Hong Kong Stock Exchange although it recently made appointments aimed at modernizing its business and this deal is likely another part of that strategy. Convoy’s portfolio of strategic investments includes Nutmeg in the UK and Ireland’s Currencyfair, which bought up Convoy’s payments arm. Goxip said it will use the capital and the new relationship with Convoy to offer more installment-based financing options on its service, which is akin to a ‘shoppable Instagram’ that has a focus on high-end fashion. The company already counts major retailers like Net-a-Porter, Harrods, and ASOS and brands that include like Nike, Alexander McQueen and Topshop. To date, Goxip has helped customers find outfits and buy them but now, with Convoy, it wants to offer payment plans using a virtual credit card, Goxip co-founder and CEO Juliette Gimenez told TechCrunch. With 600,000 monthly users and average orders of $300, Goxip is getting close to breaking even, Gimenez said, but she is hopeful that offering staggered payment options over varying periods such as 6-12 months will serve Goxip well as it expands in Southeast Asia where typical consumers spend less. That’ll happen soon after the company opened an office in Bangkok ahead of an imminent launch in Thailand, its second expansion after Malaysia. Goxip has just opened an office in Bangkok ahead of an upcoming launch in Thailand Beyond geographical additions, Goxip has also branched out into influencer marking this year with its soon-to-launch RewardSnap service. Similar to Rewardstyle in the U.S, it will enable internet influencers — and particularly those on Instagram — to partner with brands and make money through referrals to their audience. Gimenez said that 150 influencers have signed up, including Elly Lam who has 14 million followers across all platforms. Instagram is beefing up its commerce focus — with the addition of a shopping tab and new management at the wheel — but Gimenez said she isn’t phased. She points to the fact that Facebook, which owns Instagram, hasn’t been able to make e-commerce work in Asia, while the simplicity of Rewardsnap and its connection to the Goxip service, makes it highly defensible even as Instagram ups its shopping game. Goxip is a ‘shoppable Instagram’ for fashion followers in Asia

Failed drone startup Airware auctions assets, Delair buys teammates

Airware desperately sought cash for 18 months before running out of money and shutting down last month, leaving about 120 employees without jobs after the startup had burned $118 million in funding. Bandaid strategic investments from construction company Caterpillar and others kept Airware alive as it looked for a $15 million round, according to a former employee. A late pivot from hardware to drone software sales through Caterpillar’s dealers went sour, as Airware lacked the features found in competitors and suffered from slow engineering cycles. “So Caterpillar told them, ‘We’re not going to fund you any more. We’re pulling our money.’ So Airware didn’t make payroll,” the source says. The sudden shutdown of one of the most-funded drone startups sent a shock wave through the industry. Drone startup Airware crashes, shuts down after burning $118M Luckily, at least part of Airware’s team is being rescued from the wreckage. French drone services company Delair is buying Airware’s Redbird analytics software and IP, plus the 26 employees who ran it. Airware had acquired Redbird and its 38-member team in 2016 to integrate its analytics that derived business metrics from 2D maps and 3D models of work sites based on imagery shot by drones. Now the Redbird team will do that for Delair, bringing along its relationships with 30 drone dealers and 200 customers to try to make sense of aerial imagery from construction sites, mines, energy infrastructure and more. “We managed to keep that business alive with Delair,” says Redbird CEO Emmanuel de Maistre. “Customers wanted us to keep this going. They were very worried to not have a solution anymore.” He says that Airware still isn’t formally in bankruptcy or administration, and that as it’s been “actively reaching out to players in the market, to sell the assets . . . Interest from software companies and hardware companies was quite high.” Founded in 2011, Delair now has 180 employees selling its UX11 mapping drone, data processing software and enterprise integration services to get businesses properly equipped with unmanned aerial vehicles. Delair had previously raised $28.5 million, and last month added a strategic Series B of undisclosed size from Intel — also an Airware investor. Delair co-founder Benjamin Benharrosh tells me that while his company started in hardware and bought Trimble’s UAV business Gatewing in 2016, “lots of the growth now is dedicated to the software,” so the Redbird buy makes sense. Meanwhile, Airware’s hardware assets are going to auction on Wednesday. Heritage Global Partners will be selling dozens of DJI drones plus networking equipment and computers. Terms of the Delair deal weren’t disclosed, but the money from that sale and the auction could help Airware pay off any outstanding debts or commitments. However, Airware’s A-List investors, including Y Combinator, Google’s GV, Andreessen Horowitz, First Round, Shasta, Felicis, Kleiner Perkins and Intel, aren’t likely to recoup much of their capital. We’ve reached out to Airware, its founding CEO Jonathan Downey and its final CEO Yvonne Wassenaar for comment and will update if we hear back. Founded in 2011, Airware tried to build a drone operating system before moving to sell drone hardware to commercial enterprises. But the rapid ascent of Chinese drone maker DJI pushed Airware to pivot out of hardware sales and toward drone data collection and analysis services. But a source says that since the startup entered this market late after the hardware boondoggle, “Airware’s technology was pretty far behind. They didn’t have a lot of the feature set a lot of others in the space did, like Propeller, 3DR and DroneDeploy.” Airware lacked seamless data uploads and quick processing times. “What happened in the company wasn’t so much that the management team didn’t manage it correctly. The sales team just couldn’t sell a product that didn’t work as easily as it needed to compared to other products in the market,” our source says. They noted that Wassenaar, who’d replaced Downey as CEO in June 2017, had done a good job and been dedicated to fundraising to save the company since she joined. “Ultimately it was a matter of bad timing, and they didn’t have the engineering to overcome bad timing,” our source says. “The issue Airware had was a lack of funding. They ran out of runway,” confirms Redbird’s de Maistre. Airware’s story should serve as a warning to startups raising at high-flying valuations. If a pivot doesn’t go smoothly or new competitors emerge, investors may disappear rather than back a down-round that might save the company but leave it in a downward spiral. Once a startup loses momentum, even having top investors and a ripe potential market can’t always stop it from disappearing into the sunset.
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