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Founders Fund leads financing of composites startup Layup Parts | TechCrunch

May 11, 2024 12:49 AM0


Scarcely five months after its founding, hard tech startup Layup Parts has landed a $9 million round of financing led by Founders Fund to transform composites manufacturing. Lux Capital and Haystack also participated. The breakneck pace is more than a subtle indication that investors’ appetite for tech-focused solutions to the woes of the American industrial base […]

© 2024 TechCrunch. All rights reserved. For personal use only.


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Can AI help founders fundraise more quickly and easily? | TechCrunch

May 9, 2024 12:27 AM0


With venture totals slipping year-over-year in key markets like the United States, and concern that venture firms themselves are struggling to raise more capital, founders might be worried. After all, if private-market investment doesn’t perk up in the coming quarters, we could be on track for yet another year of declines in total startup investment […]

© 2024 TechCrunch. All rights reserved. For personal use only.


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Alliance DAO is attracting more Asia founders amid US crypto crackdown | TechCrunch

May 3, 2024 3:09 AM0


The graduates of Alliance DAO are often useful indicators of investor appetite and user adaption trends within the crypto space. The latest batch of the stage-agnostic crypto accelerator, unveiled today, comes at a moment of great excitement for the recovering market.

Just two months ago, Bitcoin hit its all-time high; though the value of the largest cryptocurrency has since declined, it continues to trade at much higher levels than during the market downturn following FTX’s implosion in late 2022. Venture investors are responding and plowing money into web3 startups, sending total fundraising in the space to roughly $1.9 billion in Q1, a sharp 58% jump from the quarter before, according to Crunchbase data.

The renewed enthusiasm among web3 believers is evidenced by catchphrases like “we are so back” that have filled crypto X/Twitter. In the meantime, regulatory efforts to rein in the industry have not waned. In the U.S., Binance’s Canadian founder Changpeng “CZ” Zhao is set to become the richest person to ever face imprisonment. Uniswap, which has been vocal about its decentralized approach to digital assets, received a notice from the U.S. Securities and Exchange Commission (SEC) last month.

Unsurprisingly, the ongoing crackdowns in the U.S. have a palpable impact on Alliance DAO’s geographic composition.

Image Credits: Alliance DAO

As shown in the graph (above) shared by Qiao Wang, one of the founding partners of Alliance DAO, founders based in North America accounted for 45% of the accelerator’s applicants in H2 2021; that share slipped to just 26% in H1 this year.

“Essentially, the U.S. is losing market share for crypto founders over the last three years. This is likely due to 1) regulations and 2) crypto finding product-market fit in emerging markets,” Wang told TechCrunch via email.

Indeed, the accelerator has seen a steady uptick in interest from Asia, which made up 24% of all applications in H1 2024, compared to 14% in H2 2021.

North America’s declining participation in Alliance DAO doesn’t imply founders simply abandon their crypto dreams. Historically, web3 entrepreneurs have been a flexible and nomadic tribe, fleeing crackdowns and seeking out more favorable regions. As a result, some of them may set up physical bases in emerging markets with a more amicable crypto environment.

As TechCrunch has reported, Asia has quickly become a popular destination for crypto entrepreneurs. The user base is large, young and open to new types of technology and financial assets. Several jurisdictions, including Hong Kong, Japan and Singapore, have taken notable steps to provide clearer regulatory frameworks for the budding sector, providing much reassurance to founders facing policy uncertainty elsewhere.

Meet the batch

Alliance DAO’s latest cohort, the 12th edition of its three-month program, received 1,503 applications. That marked a significant increase from the last batch’s 1083 applications. Just 21 teams were accepted this time, resulting in a competitive 1.4% acceptance rate. Twelve of them are presenting at today’s demo day.

Projects building on Ethereum, the most active blockchain by developer activity, are still the focus of this cohort, although other ecosystems like Solana and Bitcoin are “making a comeback,” according to Wang. Popular verticals seen across the batch include decentralized AI, crypto infrastructure (especially modular blockchain), decentralized finance (DeFi), and crypto-based payment solutions.

Now, let’s turn to the projects:

Company name: Villcaso

What it does: Permissionless U.S. real estate investing

Founders: Nathaniel Sokoll-Ward, Val Lee

The pitch: REITs, or real estate investment trusts, are designed to offer investors fractional exposure to real estate, lowering barriers to entry. While they offer more liquidity than traditional property investment, REITs are for the most part inaccessible to global investors, who make up an increasing share of total real estate investments in the U.S. Using a “fully legal permissionless token,” Villcaso is working to scale and distribute fractional ownership of U.S. real estate to a global audience. It has small equity positions in a large number of homes across the country.

Stage: Raising seed

 

Company name: GoBankless

What it does: Transferwise with stablecoins

Founders: Ygor Francisco, Khayalethu Mtshali

The pitch: GoBankless has its eye on Africa’s cross-border payments market that’s witnessing explosive growth. Businesses have been stuck with the long processing time and high settlement fees of traditional banks, while those that resist SWIFT’s monopoly are left facing counterparty risks in shadow markets. With the use of stablecoins, the startup is working to make cross-border payments instant without banking intermediaries. Today, GoBankless is serving around 50 small businesses across Mozambique and South Africa and settling $7 million in payments every month.

Stage: Raising seed

 

Company name: Wasabi Protocol

What it does: Leverage trading protocol

Founders: Eren Derman, Kemal Hasan Atay

The pitch: Crypto trading, especially longtail trading of new assets such as memecoins and NFTs, has seen a surge in daily volume. Popular platforms like Aevo and Hyperliquid allow users to gain early access, but they are “dependent on the market being sufficiently liquid,” leading to missed opportunities. Wasabi solves liquidity by backing user positions with underlying assets while its competitors take an algorithmic approach. Launched a few months ago, Wasabi’s total value locked (TVL) has grown to $60 million with over $200 million in volume.

Stage: Recently closed a seed round; raising a strategic round

 

Company name: Lulubit

What it does: Coinbase for Central America

Founders: Ianir Sonis, Diego Hernan Cabrera, Alan Futerman

The pitch: Central America is among regions that have shown a rapid pace of crypto adoption. Nonetheless, it’s still hard to even just buy and sell crypto in the region. P2P networks are unreliable while established exchanges charge high fees. Lulubit allows retail users in Central America to buy and sell crypto from their local banks and spend through the crypto debit card it issues; users can also send remittances on-chain to Lulubit and withdraw to their bank accounts at lower rates than the traditional method. Launched less than a year ago, Lulubit has amassed more than 18,000 users and processed over $1.3 million in volume in April alone, growing 36% month-over-month.

Stage: Raising seed

 

Company name: ZwapX

What it does: Marketplace for tokenized watches

Founders: Yohan Chiovetta, Noah Chiovetta, Rocco Di Capua

The pitch: The billion-dollar luxury watch market is enormous yet underserved by technological innovation. Peer-to-peer marketplaces are fraught with scams while B2C platforms face online authentication challenges. ZwapX offers a way for users to trade physical watches in the form of tokens, which act as certificates of ownership and authenticity. It has tokenized 44 watches to date with a $1.4 million TVL and a volume of $240,000.

Stage: Raising seed

 

Company name: Fractal Payments

What it does: Cross-border payments for global businesses

Founders: Pavel Skalin

The pitch: Money movement for businesses is one of the world’s biggest industries, yet it’s still suffering from perennial problems like high fees and slow processing. Fractal Payments is another startup aspiring to disrupt SWIFT with the use of stablecoins. Fully licensed in the European Union, it claims to make cross-border payments three times cheaper and six times faster than through legacy banking rails. It has facilitated more than $5 million in payments volume and working with a network of partners that support payments in over 60 countries.

Stage: Raising seed

 

Company name: Código

What it does: Crypto data for AI training

Founders: Jean-Philippe Emelie Marcos, Diego Besprosvan, Jaziel Guerrero

The pitch: Training data for AI is a billion-dollar market opportunity that has spawned unicorns like Scale AI. But existing solutions focus mostly on web2 use cases, with few powering AI training with crypto data. Código provides highly curated datasets to train specialized models for high-stake crypto applications, such as those involving financial transactions. Data is collected automatically through crowdsourcing, after which it is subject to a decentralized review and augmentation process where reviews can earn tokens. The tool has generated 4,000 dApps and four million lines of code within six months.

Stage: Raising seed

 

Company name: Accrue

What it does: Stablecoin payment network for Africa

Founders: Clinton Mbah, Adesuwa Omoruyi

The pitch: Bank transfers in Africa are notoriously costly and slow. Accrue aims to create a payment network that enables instant and affordable transactions — all powered by stablecoins. To that end, the startup is tapping the continent’s existing network of mobile tellers, which allow users to perform bank transactions over mobile phones, often simply through text messages. “10% of these mobile tellers are stablecoin-savvy,” and they are joining Accrue because it offers them more profit share and an upcoming token. The startup is cash-flow positive and has processed $5 million in payments.

Stage: Raising seed

 

Company name: Fig Investments

What it does: Tokenizing hedge fund strategies

Founders: Guanzhi Ma, Tony Qian

The pitch: The interest in decentralized finance (DeFi) services from traditional finance (TradFi) has surged, as seen in institutional players like Blackrock tokenizing stocks. Founded by banking veterans, Fig offers an automated trading desk that “matches TradFi interest in crypto with on-chain LP interest for returns.” It claims to be achieving a 10x scale than its competitor. Since launching four months ago, its TVL has grown to $10 million, with $40 million more in the backlog.

Stage: Raising seed

 

Company name: 0G

What it does: Modular AI chain

Founders: Michael Heinrich, Ming Wu

The pitch: 0G is building in the red-hot and cut-throat area of modular blockchain, which aims to help scale Ethereum transactions. Specifically, 0G is acting as a data availability layer, which ensures nodes in a blockchain network can access and verify transaction data. Its focus puts it in direct competition with well-funded projects such as a16z-backed EigenLayer, industry leader Celestia as well as Avail, which originated from Polygon. Using its unique technology, 0G claims it can achieve performance that’s 50,000 times faster than Celestia while costing 100x less than the rival.

Stage: Recently closed a 20x oversubscribed pre-seed round; raising seed

 

Company name: Proto

What it does: Google Maps on-chain

Founders: Akshay Yeleswarapu

The pitch: Despite the ubiquitous use of Google Maps, the application is surprisingly inaccurate in developing countries where cities are much denser than their Western counterparts and urban development happens rapidly. Proto wants to make navigation more accurate for underserved markets by crowdsourcing mapping data and allowing contributors to easily upload images with their mobile phones, a process incentivized by token rewards. Launched in late January, Proto has achieved 75% of Google Maps’ coverage of Bangalore through a network of 400 users.

Stage: Raising seed

 

Company name: Dinari

What it does: The global tokenized stock exchange

Founders: Gabriel Otte, Chas Rampenthal, Jake Timothy

The pitch: Global demand for U.S. securities has skyrocketed, yet access remains rather limited. Traditional brokerages have a high barrier of entry for foreign users, while early attempts to tokenize securities such as Ondo restrict certain features. Registered with the SEC, Dinari offers a way for non-U.S. investors to buy stocks via stablecoins. Its unique advantage is that its tokens are backed by real-world stocks. The platform’s TVL has grown to $500,000.

Stage: Closed a $10 million seed round; raising Series A

 

Alliance DAO invites a range of crypto experts to speak to cohorts about their domain knowledge. This time around, its guest mentors include Jacquelyn Melinek, founder of Token Relations and TechCrunch’s former crypto reporter; Jason Yanowitz, founder of Blockworks; Ming Ng, founder of Jupiter; Greg DiPrisco, founder of Ajna and M^0 Labs; Seung Yoon “SY” Lee, founder of Story Protocol; David Vorick, founder of Sia and Glow; and Ilja Moisejevs & Richard Wu, founders of Tensor.

Meet Alliance DAO’s latest accelerator cohort of startups building in crypto winter




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Robotic Automations

Notable Capital's Hans Tung on why he thinks founders need to play the long game | TechCrunch

April 30, 2024 8:10 PM0


Hans Tung, a managing partner at Notable Capital, formerly GGV Capital, has a lot of thoughts on the state of venture today.

Notable Capital is a venture firm with $4.2 billion in assets under management, focusing on investments in the U.S., Latin America, Israel, and Europe.

Tung, whose portfolio includes the likes of Airbnb, StockX and Slack, recently sat down with TechCrunch’s Equity Podcast to discuss valuations, why founders need to play the long game and why some VC firms are struggling. 

He also let us know why he’s still bullish on fintech and what sectors in the fintech space have him especially excited.

We also discussed recent changes at his own firm, which evolved from 24-year-old cross-border firm GGV Capital and rebranded its U.S. and Asia operations to Notable Capital and Granite Asia, respectively. GGV’s transformation is the latest in a string of changes we’ve seen in the world of venture capital, including personnel shifts at Founders Fund, Benchmark and Thrive Capital.

Below are excerpts from the interview, which has been edited for clarity and brevity.

TechCrunch: Last year, we talked about down rounds. At the time, you thought they were not necessarily a bad thing. Do you still have that same mindset?

Hans Tung: I’ve been in this biz for almost 20 years. We’re long-term in the way we approach things. And I always know that it doesn’t matter about the markups. This is like getting a poor [report] card, or getting a test exam score, it doesn’t really matter until you actually have an exit. IPO is actually just a milestone, not the end game. IPO is the beginning for public investors to be along for the ride. So if you think longer term, valuation up or down temporarily doesn’t matter as much as generating a big outcome at the end.

I think that whatever it takes to scale the business is what the company and the founders and board need to focus on doing to manage the business the best they can every step of the way.

I think that what founders don’t realize is that this choice is not between shutting down and do a down round, because in that situation, you will choose a down round every single time. The challenge is when you are faced with the prospect of holding on to a valuation, or raise a down round. If you don’t do it, you run the risk of shutting down later. But I’ll tell you if you’re close to shutting down, no one’s gonna invest in you

TC: Overall, with regards to the investing landscape, how different is it so far this year compared to last?

HT: I think it’s a continuation of what we saw in the second half of 2023. Obviously, AI is an outlier. AI is way, way overvalued right now. You could argue that we’re only in the first inning, or the first half of the first inning for AI, so people are willing to overpay…You do see a lot of crazy rounds happening at the beginning of a boom, but there will be bifurcation, and there will be companies that end up doing great, and most companies may not. 

For the most part, I still caution founders to not compare themselves with sectors are doing well, but fully focus on managing their business. 

TC: How is your pace of investing compared to recent years? How have VC firms been impacted by the slowdown?

HT: I think we’re more at the 2022 level. So more than 2023. But 2021 was an outlier. And it’s not good for business. And it’s not good for the ecosystem. Without naming names, you do see firms being impacted by what what they were doing in 2021 and that has made them slow down a lot more now, which is unfortunate, because many of them are great investors, they’re in great companies, and it’s too bad that they cannot participate as a result of just indigestion.

For example, some companies raised a large round in 2021. And even though the business is growing revenue about 40% to 50% year on year and they can probably IPO soon in the next year or so from a maturity standpoint…but because the valuation they raised in their last round is so high, that they are not at that level of valuation in the current public market, where the multiples have compressed quite a bit. So they have to wait. And as a result, the funds that invested in them in 2021 cannot get cash back, because there’s lack of liquidity and the LPs cannot get money back either. So we don’t have that recycling of money going back to the LPs who continue to invest in new funds. The whole system suffers as a result.

TC: I was surprised to report recently that funding in the fintech space had dropped to its lowest level in seven years in the first quarter of this year. What do you think about that?

HT: I think for fintech, given the high inflationary environment that we had, and definitely high interest rate that’s coming down, but not coming down quickly – it is harder for people to decide about fintech. But if you look at the other set of metrics, financial services as a category, the market cap of all public companies in the banking insurance financial service space is over $10 trillion. And of that $10 trillion, only less than 5% are in fintech companies. And so if we all know that the best fintech companies are growing faster than financial service companies, it’s just a matter of time that low single digit penetration and market cap will increase over time. So it will have ups and downs. Like ecommerce, fintech might not have too many winners, but the ones that can win can have a huge market.

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Will a TikTok ban impact creator economy startups? Not really, founders say | TechCrunch

April 28, 2024 2:35 AM0


President Joe Biden signed a bill on Wednesday that could ban TikTok – for real this time. After so many false starts and stops, some creator economy founders and their clients are rolling their eyes. They’ve been through this before.

“I think two years ago, this would have been devastating,” Karat Financial co-founder and co-CEO Eric Wei told TechCrunch. “Now… Eh.”

When creators succeed, the startups that work in the creator economy generally succeed as well. Still, Wei isn’t particularly concerned that the friction from a TikTok ban would impact his business, a Series B startup that provides financial services to creators.

“If you build products in startups that help creators make money, then actually, from an addressable market point of view, this is good for you,” Wei said. “Your framing can be like, ‘TikTok is gone, as a creator, you need to be thinking about diversifying and how to support yourself, so here’s XYZ things you can do.’”

The threat of the TikTok ban feels a bit like “The Boy Who Cried Wolf,” even though this time, it’s different. This isn’t just political theater in the form of ongoing Senate hearings. This bill, which would force ByteDance to sell TikTok if it can’t find an American buyer within nine months, made its way through the House and the Senate to Biden’s desk, where he signed it into law.

But the creator landscape looks different now than it did in 2020, when former President Donald Trump tried banning the Chinese-owned app (and, as he runs for president again, he now says he’s opposed to the ban, because it would give Meta too much power). Established creators have had about three years of legal back-and-forth and two different presidencies to prepare their businesses for a world without TikTok.

As Wei scrolls through a large group chat he’s in with other creators, he notes that no one’s too panicked.

“I’m looking through, and there’s some jokes – one guy jokes, ‘My Snapchat shares are about to pop,’ and another said, ‘Let’s make a skit: when TikTokers protest the TikTok ban – who’s in?’” he said. “A third says, ‘TikTok’s about to sue, I’ve been talking with their internals,’ and a fourth one replied, ‘Where’s my popcorn?’”

This isn’t the case for all kinds of creators. Wei notes that TikTok livestreamers and creators that monetize via TikTok Shop could be hit the hardest, since platforms like YouTube Shorts and Instagram Reels aren’t as invested in those features as TikTok. The ban could also be detrimental to politically-oriented creators, since Instagram Reels isn’t a viable alternative for them – the Meta-owned platform has begun limiting the reach of political content. And while the more established creators in Wei’s group chat have been preparing for this for years, the transition away from TikTok could be a huge gut-punch to newer creators who don’t have followings on multiple platforms yet.

“To be clear, no one’s like, ‘This is good for us!” Wei said. But the amount of time creators have had to prepare for this moment has made them better poised to weather the storm.

“This is something that’s been talked about for a very long time, so creators are aware – this is not new,” Harry Gestetner, co-founder and CEO of creator monetization platform Fanfix, told TechCrunch. “The second thing is, this is not an overnight ban. Creators still have about a year to transfer their following, so I am optimistic.”

James Jones – the CEO of Bump, another financial services company for creators – is looking at the situation in parallel.

“There will undoubtedly be a ripple effect amongst the creator community as a result of the TikTok ban,” Jones told TechCrunch. “But creators are getting better at diversifying the ways that they monetize across multiple platforms. We’ve also seen this movie before in the case of Vine, which paved the way for TikTok to fill the void that it left.”

TikTok’s secret sauce is its power to help creators get discovered – more so than other platforms, anyone can blow up on the For You Page. But while Instagram Reels and YouTube Shorts could have been likened to “Kirkland brand TikTok” in 2021, the platforms have since matured.

In TikTok’s initial Creator Fund, a static pool of money distributed among a growing number of eligible creators, few people were supporting themselves on TikTok views alone. This has only recently changed as TikTok transitioned creators into its Creativity Program, which offers a better deal to eligible creators – but not all creators are making videos that fit the bill for that program. So, to make content creation a stable career, they’d have to transition onto other platforms anyway. YouTube Shorts has started sharing ad revenue on short-form videos, similar to its longstanding Partner Program, while Instagram Reels only has occasional, unreliable bonus programs.

Gestetner told TechCrunch that some creators he works with have been disillusioned by TikTok anyway.

“The problems with TikTok go past just the ban,” he said. “Creators so often get their accounts removed on TikTok, or get shadow banned, or get reported, and it’s very difficult to get an answer from TikTok. So we’ve dealt with problems there for years now.”

It’s not as though other platforms don’t share these transparency issues. But these risks have made it essential for creators to not put all their energy into one platform.

“Five years ago, creators were generally on one platform,” he said. “Now, every creator has a minimum of three, and up to five, six or seven platforms they use.”

This necessity of diversification extends beyond just the platforms creators use. Creators also need to generate income from a variety of sources, whether that be through fan memberships, product sales, live performances or courses.

“I think on our business, there will be no impact, or potentially kind of a positive impact,” Gestetner said. “It helps our case, because creators are all skeptical of the big platforms, and they don’t want all of their monetization to be tied to a particular platform.”

In theory, the ban on TikTok could create room in the market for another short-form video app – perhaps one that is not owned by a massive corporation like Meta or Google. But this likely won’t pose another situation like what happened when Elon Musk bought Twitter, and several microblogging apps cropped up seemingly overnight.

“I think a really good example of this is like, remember Triller?” Wei said. “For a while, we were all excited about it, like ‘Oh my god, TikTok’s going away, let’s put money toward Triller!’ But then everyone realized TikTok is not going away. And now it’s years later, and does anyone talk about Triller anymore?”

Well, they might not be talking about Triller either because the company is a walking red flag. In any case, creators won’t have the patience to invest in a nascent platform that might not last, so they’ll have to make due with Instagram, YouTube and Snapchat. That doesn’t mean TikTok won’t be missed, though.

“I think the fans will be affected the most overall,” Gestetner said. “But I do think the Shorts experience and Reels experience is getting very good.”

Gen Z is losing its political voice on social media


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Global Founders Capital will deploy Rocket Internet’s cash instead of raising a new fund | TechCrunch

April 26, 2024 2:48 PM0


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.


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Robotic Automations

Campus, a community college startup, receives $23M Series A extension led by Founders Fund | TechCrunch

April 23, 2024 7:36 PM0


Although many students in the United States enter community colleges intending to transfer to four-year universities, only 16% of those students receive bachelor’s degrees within six years. But Campus, an online alternative to traditional community colleges, has an approach that aims to change that. 

Many adjunct professors at the nation’s top universities, including UCLA, Princeton and NYU, earn such low salaries that a quarter of them qualify for some form of government assistance. At the same time, the cost of education has been skyrocketing.

“I got obsessed with the idea of giving everybody access to these amazing professors” at a price that most students can afford, said Campus founder Tade Oyerinde.

Investors seem to be obsessed, too: The company announced Tuesday that it raised a $23 million Series A extension round, led by Founders Fund, with 8VC participating. 

Campus has hired adjunct professors who are also currently teaching at colleges like Vanderbilt, Princeton and NYU, paying them $8,000 a course, which is much higher than the national average. The cost of attending Campus is $7,200 a year; it’s fully covered for students who qualify for federal Pell Grants, allowing about 40% of the college’s students to study for free.

All students are provided with a laptop, Wi-Fi and access to tutors. They’re paired with coaches who are tasked with making sure that everyone stays on track. Enrollment has been growing fast, according to Oyerinde. Students want to be a part of something modern and new, he said, and they think of Campus as a trampoline into a four-year program.

Last year, Campus raised a $29 million Series A, led by Sam Altman and Discord founder Jason Citron. Solo VC Lachy Groom, Bloomberg Beta, Founders Fund, Reach Capital and Precursor Venture also participated. Earlier this year, the company caught Shaquille O’Neal’s eye, and the basketball star topped up that round.

Most of the capital from Campus’s first Series A installment went toward purchasing a physical college in Sacramento. While most students study online and are based throughout the country, the community college now offers in-person courses in phlebotomy, medical assistance and cosmetology.

Shaquille O’Neal talks investing in edtech and startups that are going to ‘change people’s lives’

Tech-like margins

The capital from Founders Fund-led Series A extension, which Campus is announcing on Tuesday, will be used to fuel growth. 

The firm boosted its stake in Campus — Founders Fund’s first edtech bet — due to the company’s scalable tech platform, said partner Trae Stephens.

“I think the structure is kind of a hack,” he said. “You can get the cost low enough that there are no out-of-pocket costs. That’s very hard to do when there are overhead costs attached.” 

Perhaps this is why VCs have historically avoided backing traditional academic institutions. 

For now, each class has on average 75 students and three teacher assistants. While Oyerinde didn’t say whether professor to student ratios will increase as enrollment numbers grow, he emphasized that Campus’ margins look like those of a tech business.

The company is very mindful of for-profit colleges’ dark past. In 2019, University of Phoenix, a private university, agreed to pay a $50 million fine and forgive $140 million in student fees, following a five-year investigation by the Federal Trade Commission into the company’s misleading claims about job opportunities available to its students.

“Campus is not going to saddle students with tons of debt. I don’t think this is good for the U.S. economy,” Stephens said. “We’re going to do this in a way that aligns with the goals of the Federal Pell grants.”

Oyerinde says the company is squarely focused on making sure that the cost of education is low (or nothing) and that students graduate.

Campus faces a surprising challenge: finding the coaches. While attracting professors (with a long waitlist) and students is simple, the company needs coaches who encourage students to stick with their education.

“If we need engineers or marketing people. That’s easy,” Oyerinde said. “But there’s not a pool of people who’ve done this particular role of building deep relationships, motivating people consistently for multiple years on end.”

It’s a good time to invest in early-stage edtech, investors say


Software Development in Sri Lanka

Robotic Automations

Two widow founders launch DayNew, a social platform for people dealing with grief and trauma | TechCrunch

April 23, 2024 5:33 PM0


After losing their husbands in devastating and unexpected ways, Karine Nissim and Eloise Bune D’Agostino discovered there were no suitable places where people could go to face all the challenges that surface during the grieving process, including daunting tasks such as organizing a funeral ceremony and donating belongings, as well as scouring the internet for support groups.

Being seasoned entrepreneurs themselves—Nissim having sold her startup DogVacay to Rover in 2017 and Bune D’Agostino, who co-founded Tentrr and Handwriting.io—the two widow founders decided to take matters into their own hands and build what they call a “360 healing” platform that provides a range of services and resources to help with grief and other hardships like divorce, illness, and trauma.

Now available on the App Store, Google Play Store, and the web, DayNew is a new grief support platform, social community, educational hub, and task manager app wrapped up into one, user-friendly package. At its core, DayNew aims to be a safe space for users to connect with others, share their stories, and receive support from the community.

“From hospice centers to bereavement groups to online therapy, regular therapists and psychiatrists, to funeral homes to all of the other services, there was not one place that we could go that could hold the whole journey for us,” Nissim told TechCrunch. “So, we set out to create a customized roadmap that is really highly tailored to each person based on their trauma type… When you come to DayNew, we are ready to meet you with organizational, emotional, and social support.”

Some people find it hard to ask for help because they don’t want to feel like a burden to their family and friends. DayNew’s Community feed acts as a dedicated space for users to be direct about what they want from supporters, whether it be money to buy groceries, a place to sell and donate belongings, or a job listing for a babysitter.

“[Eloise and I] got lots of flowers and casseroles. While that’s beautiful, generous and thoughtful, we also got a lot of comments like ‘Whatever you need,’ and we were always ill-equipped on how to answer that or didn’t feel comfortable… The community page takes the ickiness of the ask out. It also takes the ickiness out of the supporters’ side because now they actually know what you need, and they don’t feel like they’re bothering you.” Nissim said.

There’s also a “Find a Buddy” feature for users to get one-on-one support from people who are going through similar tragedies. Users can search for others with the same hashtags in their profiles, including #partnerloss, #parentloss, #cancerloss, #covidloss, and so on.

Similar to other grief support platforms (Grief Refuge, Untangle, and Grief Works), DayNew has a Journal feature where users can vocalize how they feel by either answering prompts or freehanding an entry that speaks from the heart. The company compares the prompts to homework from a therapist, asking tough and thought-provoking questions such as “What’s something about grief you never knew before?” and “What’s something you wish you could tell your younger self?” Depending on comfort level, the journal entry can be kept private or shared publicly on the Community feed.

Additionally, there’s a daily mood tracker component for users to check in with themselves and log their moods on a scale of 1 to 10.

Image Credits: DayNew

DayNew offers various other features to assist users throughout their journey, including personalized lists for users to check off overwhelming tasks (sell assets, get life insurance, apply for widow social security benefits, and so on) at their own pace, a ChatGPT-powered AI tool that provides emotional advice, and a “Learn & Grow” page with educational and motivational content.

Nissim explained that the platform is also launching virtual workshops and in-person events to bring people together and teach them the benefits of “grounding and meditation” in order to promote healing. The online classes cost around $36 and feature special guests like experts, scientists, and psychologists. The first session is on May 21 and will be hosted by the founders themselves. In mid-July, there will be an in-person retreat in Mexico for about $1,800.

In the next iteration of the platform, DayNew plans to introduce a gifting feature where friends and family members can purchase classes to give to a loved one.

DayNew is free to join but it also offers a $5 per month subscription for users who want to access premium features, including the “Find a Buddy” service, direct messages, and being able to comment on public community posts.

In the digital age, users are embracing grief-related products and services to cope with death. What once was considered a taboo topic, grievers can now openly discuss loss and be reassured that they’re not alone. However, it’s important to realize that these services shouldn’t replace proper therapy and counseling but should act as an additional outlet to express their feelings.

Empathy closes $47M for AI to help with the practical and emotional bereavement process

Lalo launches an app to memorialize loved ones


Software Development in Sri Lanka

Robotic Automations

'Send now, pay later' startup Pomelo lands $35M Series A from secretive Vy Capital, Founders Fund | TechCrunch

April 23, 2024 1:40 AM0


Pomelo, a startup that combines international money transfer with credit, has raised $35 million in a Series A round led by Dubai venture firm Vy Capital, TechCrunch has exclusively learned. Additionally, the company is announcing a $75 million expansion of its warehouse facility.

Founders Fund and A* Capital also participated in the financing, along with early investor Afore Capital, and others.

The deal brings total funds raised to date to $55 million in equity capital and $125 million for its warehouse facility. TechCrunch covered Pomelo’s Founders Fund-led $20 million seed funding in 2022.

New backer Vy Capital is an under-the-radar investment firm that has grown to over $5 billion in assets and made headlines for backing Elon Musk in his purchase of Twitter.

Pomelo’s new round was among Keith Rabois’ last deals before recently leaving Founders Fund for Khosla Ventures, and he continues to sit on its board.

“Both Keith Rabois and Kevin Hartz went super pro rata on this round,” Pomelo founder and CEO Eric Velasquez Frenkiel said in an interview with TechCrunch, describing the Series A round as “preemptive.” He declined to reveal valuation, saying only it was an “up round.”

Hartz serves as the co-founder and general partner at A*. Previously, he also co-founded Eventbrite and Xoom, an online money transfer service that went public in 2013 and was acquired by PayPal for $1.1 billion in 2015.

In a written statement, Rabois said that “Pomelo stands out through a fundamentally different approach to remittance transfer by using credit as its foundation.”

Remittance product on credit card rails

Pomelo launched in the Philippines in 2022, allowing people in the United States to send money to the country while at the same time building their credit. In other words, Pomelo has built a remittance product on credit card rails.

Specifically, the startup has struck up an agreement with Mastercard to create what it describes as a product category called “Send Now, Pay Later” (SNPL), which it claims is “faster and with no transfer fees” as compared to traditional cross-border money movement.

Image Credits: Pomelo

Pomelo works by allowing a user to set up an account that comes with credit cards. The creator of the account can set limits, pause cards and view spending habits.

Senders can give cash, in the form of credit, to family members — which the startup thinks will help with instant access to funds, fraud and chargeback protection and, for potential immigrants that may use this to send money back home, a way to boost one’s credit score with more transaction history.  In the event that someone cannot pay, Pomelo charges a late fee, “so there is no interest on the product,” Frenkiel said. The company makes money mostly through interchange revenue, and foreign exchange is a smaller component.

Since its 2022 launch, Pomelo has added new payment options including most recently, the ability for users to send funds to GCash, a popular e-wallet (similar to Venmo in the U.S.) in the Philippines, in addition to cards. (According to a recent article by STL Partners, 67% of Filipinos use GCash.)

This ability is particularly important in a country like the Philippines where proof of ability to pay can be required before medical treatment, Frenkiel said. He relates the story of customer Danette Flores, a nurse who sends money to two family members in the Philippines with Pomelo. 

“My mom had suffered a heart attack, and she needed to be transferred to the ICU, but the hospital required proof of payment for that. My brother used his Pomelo Card to get her admitted,” Flores said.

Pomelo offers customers two options: either an unsecured credit line or a secured credit line based on its underwriting criteria at this time. The non-revolving credit line for unsecured customers gives them the ability to transfer up to $1,000 a month. On the secured side, a customer can put in a security deposit. In other words, Pomelo can hold funds in the app that effectively can be used to open a credit line.

The startup’s new capital will go toward product and market expansion. Pomelo’s next target country is Mexico.

“Mexico is certainly the largest corridor for the United States — something close to $40 billion is sent over to Mexico every year,” Frenkiel said.

Presently, Pomelo has 55 employees in the U.S. and Philippines.

As Christine Hall recently reported, cross-border fintech is hot right now. The cross-border payments market is forecasted to reach over $250 trillion by 2027, according to the Bank of England. And experts say fintechs are giving banks a run for their money (pun intended) here, especially in the business-to-business sector where artificial intelligence, machine learning and blockchain come into play — all emerging technologies fintechs love.

But there are other startups focused on the consumer market, including Alza, a startup aimed at helping meet the various banking needs of Latin or Central Americans who have moved to the U.S. With Alza, users get an FDIC-insured checking account and debit card. They also get the ability to send cross-border remittances to more than 20 countries in Latin or Central America embedded in its app via three methods, depending on the recipient country: bank transfer, cash pickup or transfer to a debit card. That company quietly raised $6.6 million in a round led by New York-based Thrive Capital in late 2021.

Want more fintech news in your inbox? Sign up for TechCrunch Fintech here.

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HomeHQ.ai founders illuminate the path from idea to success at TC Early Stage 2024 | TechCrunch

April 19, 2024 3:25 AM0


Anticipation is building for TechCrunch Early Stage 2024, where industry leaders and budding entrepreneurs alike are eagerly awaiting a bevy of startup-focused sessions.

We’re excited to highlight HomeHQ.ai‘s partner session, “From Inception to Cash: How I Wandered into an Idea and Jumpstarted a Company.” This session promises to provide invaluable insights into the entrepreneurial journey, led by Oliver Palnau, co-founder and CEO, and Vinny Romano, co-founder and COO of HomeHQ.ai.

Attendees can expect to be inspired by Oliver Palnau’s entrepreneurial journey, which began at the age of 23 with his venture into the real estate market. From flipping houses to exploring robotics, Oliver’s story is one of innovation and practicality, grounded in his desire to revolutionize industries through the application of AI. Together with Romano, whose expertise in digital media and analytics brings a data-driven approach to HomeHQ.ai, they have crafted an innovative AI tool for real estate agents.

During the session, Palnau and Romano will detail how to ignite interest from customers and investors, build a minimum viable product (MVP), raise initial capital, and assemble a winning team. Attendees will leave the session empowered and equipped with practical advice to embark on their own entrepreneurial journeys with confidence and determination.

We can’t wait for this session and all the other early stage–focused content at TechCrunch Early Stage 2024. Have you booked your ticket yet? Grab yours now before prices go up at the door.


Software Development in Sri Lanka

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