High interest rates and financial pressures make it more important than ever for finance teams to have a better handle on their cash flow, and several startups are hoping to help. Two-year-old Israeli startup Panax is one, and it just raised a $10 million Series A round of funding led by Team8, with participation from […]
© 2024 TechCrunch. All rights reserved. For personal use only.
High interest rates and financial pressures make it more important than ever for finance teams to have a better handle on their cash flow, and several startups are hoping to help. Two-year-old Israeli startup Panax is one, and it just raised a $10 million Series A round of funding led by Team8, with participation from […]
© 2024 TechCrunch. All rights reserved. For personal use only.
Global Founders Capital, the Berlin-based early stage VC firm with close ties to the German startup factory Rocket Internet, is going to become the venture arm of Rocket Internet.
The VC previously raised two $1 billion funds and, just a few years ago, its name appeared in dozens of deals per year. But then, things quietened down. Now we know why: Going forward, it’ll exclusively invest from Rocket Internet’s balance sheet.
Last year the Financial Times reported that Global Founders Capital was in the middle of a big strategic shift. A couple of weeks ago the VC firm reached out to TechCrunch to confirm the pivot and discuss the reasons behind the shift.
“To be transparent, there have been quite a few changes at Global Founders Capital in recent years — in terms of the structure of the fund and the composition of the team,” Global Founders Capital Partner David Sainteff (pictured above) told us.
Sainteff said the firm decided it’s not the right time to raise another fund because it’s not a great time to invest as they do not believe there are that many good opportunities that meet the firm’s criteria and that they don’t need more capital to remain competitive against other investors for deals.
Global Founders Capital was originally structured as a traditional VC firm with several limited partners participating in funds. With its first fund, it backed then-future unicorns such as Personio, Revolut and SumUp. With its second fund, the firm invested in several companies TechCrunch has also covered, such as Pennylane, Ankorstore and Seyna.
Prior to joining Global Founders Capital, seven years ago, Sainteff worked for Rocket Internet which was an investor in Global Founders Capital from the beginning. So there have been close ties between them since the beginning.
“Following the deployment of this second fund, we decided not to raise another fund. Instead, we’ll use Rocket Internet’s capital,” he confirmed. “We have €300 million to deploy for venture investments on the balance sheet. We don’t have any fundraising planned.”
Frankly, this is a bit odd as the firm’s past performance seems quite good. According to Sainteff, the first fund is going to generate returns between 3x and 4x. “For the second fund, it’s far too early [to say],” he continued. “But we have a few clear winners like Pennylane. We entered at the pre-seed stage and the company is worth over €1 billion.”
The new strategy means Global Founders Capital is now much smaller than it used to be, with only five partners left: Fabricio Pettena, Don Stalter, Cedric Asselman, Sainteff and of course Rocket Internet co-founder and CEO Oliver Samwer.
The new version of the firm will also only focus on early stage investments, plus the ability for follow-on investments in later rounds (Series A, B, C, etc).
Did Global Founders Capital choose not to raise a third fund because it didn’t get enough support from potential limited partners or because of the current tech downturn compared to 2021 (with the exception of the boom in artificial intelligence)? Probably the decision hinged on a bit of both.
“It wasn’t the best moment to raise funds with [limited partners],” Sainteff told us. “We think it was difficult to have the imperative to deploy capital.”
“It’s an easy decision to make when you have €300 million in the bank,” he added. “If other VC firms were in the same boat, they would have made the same decision. We don’t rule out the possibility to raise a fund when the conditions are right and favorable.”
For now, the pivot reverses much of the fund’s earlier expansion, when it scaled into more geographies, tech areas and funding stages and the Global Founders Capital name was attached to a bunch of deals.
Fisker says it’s planning more layoffs less than two months after cutting 15% of its workforce, as the EV startup scrambles to raise cash to stay alive. Fisker expects to seek bankruptcy protection within the next 30 days if it can’t come up with that money, according to a U.S. Securities and Exchange Commission regulatory filing.
The imperiled company said in the regulatory filing Tuesday it had just $54 million in cash and equivalents as of April 16, and another $11.2 million that can’t be immediately accessed. Fisker said in the filing that it’s currently trying to raise money to pay off a loan that it defaulted on in order to avoid bankruptcy. The outstanding balance as of mid-January was north of $300 million.
Fisker still employed 1,135 people globally as of April 19, according to the filing. That’s down from 1,560 at the end of 2022, and around 1,300 at the end of of September 2023. The company also said Tuesday that it will be “reducing its physical footprint.”
This follows Fisker’s announcement Monday evening that a second member of its board of directors has left the company, with the first coming at the end of March. The company has also hired a Chief Restructuring Officer who is now solely in charge of approving Fisker’s budget, as well as the decision-making process for any sale of Fisker’s business.
Fisker finds itself on the brink of bankruptcy following a troubled launch of its first electric vehicle, the Fisker Ocean SUV, that kicked off in June 2023.
The Ocean has been hampered by numerous problems, including buggy software, reports of sudden power loss and brake failure, and insufficient customer service, as TechCrunch reported in February. Fisker struggled to meet internal sales goals and lost track of millions of dollars of customer payments for some of the vehicles it did sell, triggering an internal audit that helped recover a majority of that money. It has spent the last few months attempting to pivot to a dealership model.
The Ocean is now subject to three separate federal investigations from the National Highway Traffic Safety Administration. The company has not issued any recalls, but has paused production of the SUV. In the meantime, it slashed prices on its existing inventory by as much as 39% in an attempt to generate short-term cash. The company has also been delisted from the New York Stock Exchange.
If Fisker ultimately seeks bankruptcy protection, it would be founder Henrik Fisker’s second automotive startup to do so. His previous effort, Fisker Automotive, filed for Chapter 11 bankruptcy protection in 2013.
Data transformation and optimization — tasks that many, if not most, large enterprises deal with — aren’t easy. And thanks to the enormous growth of AI and cloud technologies, the challenges appear to be increasing. In a recent Gartner poll, fewer than half (44%) of data and analytics leaders said that their teams are effective in providing value to their organization, not for lack of trying but as a result of insufficient resources, funding and skilled staffers.
Armon Petrossian and Satish Jayanthi encountered these blockers at data automation firm WhereScape. There the pair was responsible for solving data warehousing problems for WhereScape’s clients. (Petrossian was the national sales manager, and Jayanthi was a senior solutions architect.) After spending around six years at WhereScape, Petrossian and Jayanthi came to believe that they could do one (or two) better where data transformation — and issues related data optimization — were concerned.
The result was Coalesce, a San Francisco–based company building a suite of data transformation services, apps and tools. Coalesce on Thursday announced that it closed a $50 million Series B funding round co-led by Industry Ventures and Emergence Capital, which brings the startup’s total raised to $81 million.
“The data transformation layer has long been the largest bottleneck in analytics,” Petrossian, Coalesce’s CEO, told TechCrunch. “Data science and engineering teams spend the majority of their time on data prep, which includes data cleansing and transformations, manually coding and building out data pipelines to get the data from source to dashboard or other business uses. These manual processes are time-consuming, labor-intensive and, most importantly, don’t scale.”
The data supports Petrossian’s assertions. A 2020 survey from Anaconda, the data science tool provider, found that data scientists spend nearly half (45%) of their time on data prep tasks, including loading and cleaning data.
Coalesce’s response is a platform that standardizes data while automating the more repetitive, mundane data transformation processes. Using Coalesce, data science teams can employ metadata to manage transformations with an understanding of how the different pieces of data are linked and connected, Petrossian says.
“As a company’s data grows, so does the complexity of the data pipelines and data models that need to be built and maintained in order for the data to be trustworthy and result in accurate insights — and decisions,” he said. “Scalability is therefore critically important for enterprises, and our product offers just that. By automating the data transformation processes, we enable data engineers to build data pipelines more quickly and efficiently, ultimately reducing costs and the time-to-value of the organization’s data.”
Coalesce is built to work exclusively with Snowflake’s Data Cloud product; unsurprisingly, Snowflake’s corporate VC arm, Snowflake Ventures, is an investor.
That sort of vendor lock-in could be an anathema to expansion, especially given that Coalesce isn’t the only data transformation tool vendor in town. Dbt and even legacy extract, transform and load tools like Informatica and Talend could be considered rivals. There are also upstarts like Prophecy, which last October landed a $35 million investment from VCs Insight Partners and SignalFire.
Coalesce offers a range of settings and configurations for organizing — and normalizing — data within a Snowflake environment. Image Credits: Coalesce
But Petrossian says this isn’t the case.
“The Series B puts us in a position to become a profitable company if we were to wish to do so,” he said. “Our company was born during the pandemic, which gave us an opportunity to focus on building a product while in ‘stealth’ that would serve enterprise Fortune 500 companies that were resilient to the potential looming recession at the time. That audience is more resilient to economic shifts in general, making our product and business more resilient to market headwinds as well.”
To Petrossian’s point, Coalesce has “multiple” (mum’s the word on exactly how many) Fortune 500 customers and recurring revenue that grew 4x year-over-year in the fiscal year ending January 2024. As it focuses its efforts on improving the Coalesce platform’s performance, introducing AI features and reaching out to existing Snowflake customers, Coalesce plans to expand the size of its 80-person team to around 100 by the end of the year.
Petrossian hinted not-so-subtly that generative AI and machine learning applications could be force multipliers for Coalesce’s business.
“We often hear from our customers that their executive leadership asks about AI and large language models, and they have to ground that conversation by explaining why they first need to ensure they have the proper data foundation in place,” he said, noting in particular the generative AI sector’s meteoric continued growth. “This is where we come in. We’re on a mission to radically improve the analytics landscape by making enterprise-scale data transformations as efficient and flexible as possible, so organizations can quickly move to implementing and taking advantage of advanced use cases such as AI, machine learning and generative AI. In short, we see the value of Coalesce’s technology as an inevitable catalyst to support the scalability and governance needed for the future of cloud computing.”
Beyond Industry and Emergence, 11.2 Capital, DNX Ventures, GreatPoint Ventures, Hyperlink Ventures, Next Legacy Partners, Snowflake Ventures and Telstra Ventures participated in Coalesce’s Series B.
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