Israeli-Singaporian company Trax secured a $640 million Series E funding round. The primary investors during this round were led by SoftBank Vision Fund 2, along with tech-oriented funds under BlackRock. More prominent investors included OMERS, one of Canada’s largest defined benefit pension plans, and Sony Innovation Fund. The company focuses on helping retailers improve the shopping experience by applying digital technologies, accelerating thus these businesses’ digital transformation. Trax is a pioneer in AI-driven, autonomous shelf-monitoring solutions that provide merchandising services at an enterprise level. The tech is used to help retailers keep products stocked by using an on-demand crowd marketplace. Trex technology effectively digitalizes department stores by using AI and collected data to automate inventory management. In the words of the company’s CEO, Justin Behar, “Trax has been building its sophisticated, AI-powered, retail cloud platform for more than a decade. We began our journey by creating novel computer vision solutions for retail and have since broadened our capabilities to serve the evolving needs of the modern retail ecosystem.” Despite the potential IPO (initial public offering) and substantial funding, the company fired dozens of employees in 2020 and is supposedly planning more layoffs this year. According to local sources, the company already fired about 120 of its workers in Israel shortly after the onset of the COVID-19 pandemic. Trax currently employs around 1,000 workers, operates in more than 50 countries, and has about 175 clients. “We are witnessing the retail industry adopt digital technologies at an unprecedented pace and scale. Despite the turbulence of 2020, we made tremendous strides in our business because of the hard work, dedication, and team spirit at Trax,” stated Joel Bar-El, Trax co-founder and executive chairman. In preparation for the IPO at the New York Stock Exchange (NYSE), the company hopes for a $2 billion valuation and going public in the first half of 2021.
With IPOs turning into a fragile investment method and SPACs taking over, a change in crowdfunding rules is set to boost investment in diverse startups. The changes allow investors and founders to raise up to $5 million from crowdfunding, marking a significant increase from $1.07 million in 2020. This opens the door to new opportunities for startups that have so far struggled with raising funds the traditional way. Startups that have capped under previous rules can reopen their campaigns and test the waters with investment interests before filing the mandatory paperwork with the SEC. According to some forecasts, the new rules could pave the way for $1 billion in crowdfunding offerings in 2021. That’s a significant jump from the $250 million in the past year. Ever-rising interest in potential startup unicorns proved that $1.07 million was not enough to cover the needs of smaller companies. Regulation Crowdfunding has traditionally been the standard route for small businesses and under-represented founders in Europe to raise money. It allows entrepreneurs to set what they would like to offer instead of just equity - some of them offer interest-bearing notes or revenue-sharing agreements. Crowdfunding also allows regular people to get involved. The pandemic accelerated its evolution as it provides a simple route to funding. Several platforms offer people a chance to participate in the success of young companies struggling to get financing through traditional means. The popularity of Regulation Crowdfunding has increased from last year and is bound to skyrocket in 2021. Throughout 2020, startups have been using this method to raise funds, and Wefunder, a crowdfunding platform, reported a four-fold investment volume throughout the year. Namely, in February 2020, $2.8 million was invested in startups ranging from self-driving cars to next-door coffee shops, and in February 2021, it reported an $11.4 million volume. These are considerable amounts coming from both regular people investing $100 to angel investors “paying it forward.”
The online payment processing company Stripe saw its valuation surge to $95 billion after it raised $600 million in a recently-concluded funding round. That makes Stripe the most valuable startup in the US. Businesses use Stripe’s software to process payments. Its main competitors are Paypal and Square, while some of the company’s top customers include Amazon and Lyft. Like other payment providers, a shift towards online shopping fuelled Stripe’s growth and attracted more investors. This trend has only been accelerated by the coronavirus pandemic. In an official statement, Stripe unveiled plans to use the new round of funding to expand its European operations and invest in its Dublin headquarters. Out of the 42 countries where Stripe currently powers businesses, 31 are in Europe. In the same announcement, the company revealed that its services will soon be available to millions of businesses in Brazil, India, Indonesia, Thailand, and the UAE. All of them are eagerly waiting to adopt this payment platform for their e-Commerce business. Stripe has an impressive number of industry leaders as customers, with 50 of them processing more than $1 billion through the platform. Its enterprise revenue is its main segment and is nearly tripling each year. The company recently started providing checking accounts to its customers and is working with banks such as Goldman Sachs and Citigroup.
The Covid-19 pandemic shifted the stream of capital toward online businesses. As a result, venture capitalists are buying up startup stocks left and right, often at exorbitant prices, to stay in the race for stakes led by large investment companies. February was an excellent month for tech startups, as the total investment in them amounted to a whopping $35 billion. This is just $6 billion short of the record high in January 2021, and it still created 22 startup unicorns. One of the most significant investments was the $500-million stake in Elon Musk’s aerospace company SpaceX. Many incredible listings went public in March, and big investment companies seem to be furthering the overpricing trend. Tiger Global Management and Coatue Management are often named as the mammoths pushing VCs to pay more. The former has led some of the largest deals this year, most notably the $450-million round of funding for Checkout.com, turning it into another startup billionaire. To keep up, VCs halved their investment-decision time. Business software and eCommerce companies have benefited the most from this investment craze, prompted by the overall shift to web-based daily life due to the pandemic. However, many seasoned investors warn against jumping on board and making hasty decisions. While this shift in investment trends is bound to help many new startups, it also increases the risk of failed ventures, as not all companies will live up to these grand expectations. Arun Mathew, a partner at the VC firm Accel, illustrated this danger in the interview he gave the Financial Times: “Not every company can be Zoom or Snowflake.” Whether VCs will learn this harsh truth the hard way remains to be seen.
San Diego startup BlueNalu managed to grow yellowtail fish fillets entirely from cells, achieving a long-term goal of the food-tech industry to manufacture a heat-resilient seafood product.At San Diego Bay, a chef prepared yellowtail fish in a variety of ways, from poke and seafood bisque to fish tacos in front of a small group of people. What makes this local event newsworthy is the fact that the yellowtail was lab-grown.The latest feat of a cellular aquaculture company called BlueNalu is an important scientific achievement and a step forward for the food-tech industry. The San Diego startup, founded less than two years ago, successfully grew the yellowtail fish in its food manufacturing facility.BlueNalu and other companies in the niche intend to meet the demand for real fish products while addressing the environmental concerns of mass fishing. The company’s co-founders Lou Cooperhouse and Chris Dammann understand that the general public is unfamiliar with the process of growing food through cell cultures in laboratories. However, they say that lab-made seafood is no more unnatural than, for example, Greek yogurt, which also requires the culturing of cells. “We are not any more ‘lab-made’ than ketchup or Oreos,” said Chris Dammann, BlueNalu’s CTO, in an interview earlier this year. “They all started in a lab.”What makes BlueNalu’s fish fillets different from other cell-based seafood products is the ability to withstand high temperatures and various cooking techniques. This characteristic gives it a competitive edge over other science startups like the San Francisco-based Wild Type. Earlier this year, Wild Type organized a similar cooking event where a chef prepared their lab-grown salmon. However, Wild Type’s salmon falls apart when cooked at high temperatures.“Our medallions of yellowtail can be cooked via direct heat, steamed or even fried in oil; can be marinated in an acidified solution for applications like poke, ceviche, and kimchi, or can be prepared in the raw state,” BlueNalu’s CEO Lou Cooperhouse said in a statement. “This is an enormous accomplishment, and we don’t believe that any other company worldwide has been able to demonstrate this level of product performance in a whole-muscle seafood product thus far,” Cooperhouse added.Producing lab-grown seafood in large quantities is the next big scientific challenge BlueNalu and other industry players face in the future. Researchers and startups have been working on this issue for a while now to no avail. Manufacturing even the small quantities of yellowtail fish for the demonstration was considerable attainment.“This was an extraordinary technical feat,” Dammann said in a statement. “When we started this company, there was very little available science on the long-term propagation of fish muscle cells and no reliable culture protocol. To create a whole-muscle product from fish cells that are grown without genetic modification required considerable innovation. Scientifically, the achievement of going from blank canvas to food product so quickly cannot be understated. We are now ready to focus on our next phase of growth to increase production volume.”BlueNalu expects to launch its products onto a test market in the next two years, with the addition of other finfish species like mahi-mahi and red snapper.
Bird, a scooter-sharing startup, raised $275 million in series D round of funding, at a $2.5 billion valuation. The company’s CEO, Travis VanderZanden, shared this information yesterday at TechCrunch’s annual Disrupt conference.According to CrunchBase data, the company has raised $548 million since its founding in 2017. Series D, led by Canadian asset manager CDPQ and Silicon Valley venture firm Sequoia Capital, provided Bird with a much-needed cash infusion.Earlier this year, Quartz shared a report based on the use of Bird scooters in Louisville, Kentucky, which revealed that the average lifespan of these vehicles was just 28 days. Soon after, the company CEO admitted to The Verge that scooters need to stay on the streets for at least six months for the company to break even.Due to excessive vandalism and frequent instances of electric scooter impoundment by local law enforcement forces, Bird had lost nearly $100 million during Q1 of 2019. This loss shrank the company revenue to approximately $15 million and left it seeking $300 million in the next round of funding, according to The Information. In the spring, the Santa Monica-based startup was down to about $100 million in cash.At the time, VanderZanden shared his plan for keeping the company afloat. It involved branching out beyond the U.S. and Europe by selling electric scooters to local entrepreneurs who would incur all the maintenance and operational costs. Bird would provide them with advice and technical support to get started and then take a small percentage of each scooter trip.This move, paired with the release of two new models of higher-quality scooters, has attracted venture capital firms once again. Bird One hit the streets in May and is said to have an average lifespan of 15 months, which is more than enough time for the company to cover costs and make a profit. The release of Bird Two took place in August. Since the company no longer operates with off-the-shelf Chinese scooters and produces its own vehicles instead, it has emphasized on unit economics and managed to raise most of the capital it needs to keep going.“Positive unit economics is the new goal line,” VanderZanden said in an emailed statement to Quartz. “As a result, we pivoted from growth to unit economics as the top priority for the company. Now with the best unit economics in the industry, new Bird investors such as CDPQ see that we are paving the road for a long term sustainable and healthy business.”In unit economics, companies focus on the costs and revenue associated with a single unit of products. In Bird’s case, the company will track how much revenue each scooter brings in. If the new scooter models can make more trips and cover more miles than previous ones and can outlast the six-month mark, the company will become profitable.
Yesterday Facebook announced its decision to acquire CTRL-labs, a tech startup that is working on creating a bracelet that would allow users to communicate with computers using their brains. According to Bloomberg’s sources, the deal is worth between $500 million and $1 billion.Andrew Bosworth, head of Facebook’s virtual reality and augmented reality departments shared the news yesterday in a social media post. “We spend a lot of time trying to get our technology to do what we want rather than enjoying the people around us. We know there are more natural, intuitive ways to interact with devices and technology. And we want to build them. It’s why we’ve agreed to acquire CTRL-labs,” Bosworth wrote.So far, the startup’s flagship product has been an armband that measures neuron activity in a subject and then replicates the same motion on a computer screen. The technology deployed in this wrist-worn device picks up on electrical impulses coming from muscle fibers as they move. A computer then imitates the muscle movement on a screen. Simply put, this invention allows users to move the arm on the screen by moving their physical arm, or even just by thinking of moving it.Employees of CTRL-labs will be joining the Facebook Reality Labs team that’s working on VR and AR projects. Bosworth added that the goal of pairing these two teams is to further develop the technology CTRL-labs has been working on, to do it “at scale, and get it into consumer products faster.”Facebook decided to go through with the purchase even though it is currently under two separate antitrust investigations by the Federal Trade Commission. Regulators will closely examine any acquisition made by Facebook while the investigation is underway.“CTRL-Labs and Facebook are not competitors. Facebook does not currently have or make this technology,” a Facebook spokeswoman told Bloomberg of the deal announced on Monday. She added that the company would work with regulators to secure any needed approvals. “CTRL-Labs’s technology is an innovative input that Facebook hopes will be used to significantly improve the upcoming Facebook AR/VR experiences a few years down the road to fundamentally improve the user experience.”According to CrunchBase, the four-year-old New York startup raised $67 million in three rounds of funding. Its list of investors includes some high-profile names including Google’s GV, Amazon.com, Inc.’s Alexa Fund, Spark Capital, and Founders Fund.
Virgin StartUp - the Virgin Group’s non-profit that supports British entrepreneurs by providing funding and business advice - has pledged to invest equally in companies founded by men and women by the end of 2020.The 50-50 gender investment initiative is driven by newly appointed chairwoman Linda Grant and recently promoted Managing Director Andy Fishburn.Apart from backing businesses founded by women, Virgin StartUp aims to contribute to closing the gender gap by organizing a new program of women-led initiatives that includes business advice, guidance, and mentoring.“The barriers have been well documented. It’s now time to make a promise that will deliver a positive change for women entrepreneurs and the British economy as a whole,” said Grant in the announcement.Recent research points to the fact that men start twice as many companies as women in the U.K. Leveling the playing field could generate over $300 billion for the country’s economy.“We are committed to delivering on our 50/50 gender pledge and have worked with a number of external advisors to introduce a raft of women-focused initiatives that will address the barriers women face when starting up,” Grant said.Virgin StartUp is the first business funder in the U.K. that has made a commitment to promote equal financing for entrepreneurs of both sexes. “I am really excited to be part of an organization that truly wants to make a positive difference. We strongly encourage other investors to do the same,” Grand added.The non-profit also announced it is teaming up with Genderscope - a Virgin StartUp backed consultancy company that organizes workshops, training and provides policy and legal counseling. Together, they will develop a comprehensive gender strategy, addressing key organizational areas.Yael Nevo, Co-Director of Genderscope commended Virgin StartUp for progressive leadership and said she was happy to be working with an organization that takes gender equality seriously.“Gender equality is a business sustainability issue and companies who prioritize it, set themselves at a great advantage. A growing body of research clearly demonstrates how gender equality and diversity lead to better decision-making processes, greater employee satisfaction and performance, improvement in productivity, economic growth and much more,” Nevo said.Meanwhile, in the U.S., a Silicon Valley Bank research shows that only 28% of startups have a female founder. However, efforts are being made to bridge this gap.New York-based VC Female Founders Fund is striving to make more capital available to women who start their own companies. The organization launched a fund $27 million in May to help early-stage female-owned companies.
Kaiyun Motors, a producer of mini electric vehicles from China, has been selling its tiny electric pickups in the U.S. and Europe since May 2019, cracking two of the world’s toughest markets as car sales decline in China.Even though Kaiyun Motors’ sales in these two competitive markets have been modest so far with less than a hundred vehicles sold since May, the company founder Wang Chao is optimistic about attracting new customers in the following months.The Chinese manufacturer has been around since 2014 and produces a small pickup truck called model called Pickman. The miniature electric vehicles, which can develop a maximum speed of 30 miles per hour, have found its buyers mostly in California, France, Spain, and Sweden. In the U.S., Kaiyun Pickman sold 40 units, and another 30 were shipped to Europe.Despite slow sales in the first few months of breaking into the U.S. market, Kaiyun Motors aims to sell between 3,000 and 4,000 vehicles in the country by the end of next year. When it comes to European sales forecasts, the carmaker refrained from making any predictions.The Pickman model can be purchased in the U.S. for the affordable price of $7,999, which includes a 25% import tax. The company decided to offer the same price to its European customers even though it pays zero tax to export to Europe. However, Kaiyun Motors needs to make some adjustments to the tiny pickup before it is approved for driving on public roads in the EU.“Mini-electric vehicles are more than enough to meet consumers’ daily needs,” Wang Chao told Bloomberg in an interview back in January, when he announced the firm got approved for selling in the states.American consumers, accustomed to large gasoline-powered pickups like the Ford F-250 which can haul more than 2,200 lbs at a 100-miles-per-hour speed, might disagree with this statement. On the other hand, Pickman comes with a much more affordable price tag than the Ford F-250 (with a price tag of $33,000). Moreover, it can manage trips around large construction sites, farms, and plants.Low-speed electric vehicles, powered by cheaper lead-acid batteries than its normal-sized counterparts, are prevalent in China. In 2017, the Chinese bought nearly 1.8 million such cars, which is equal to double the sales of regular electric vehicles like Tesla during the same period. Kaiyun Motors has sold around 4,900 models of Pickman in China this year.
Gusto, a SaaS company that provides cloud-based payroll, benefits, and human resource management solutions to small businesses, has announced earlier today that it raised $200 million in series D funding, at a valuation of $3.8 billion.The San Francisco-based startup attracted new investors like Fidelity Management & Research Company, and Generation Investment Management while keeping its previous backers T. Rowe Price Associates Inc., Dragoneer Investment Group, and General Catalyst.One year ago, the company was valued at $2 billion when it raised $140 million in round C. The HR platform geared at small business owners has amassed more than $516 million since it was founded by Edward Kim, Josh Reeves, and Tomer London in 2012.Since its inception, Gusto’s self-described “people platform” has been addressing a number of HR-related functions like providing payroll services, employee onboarding, time tracking, retirement, and in recent years, health insurance. It also offers team management tools.The human resources platform currently employs more than 1,000 workers, with its Denver office being the largest. Established in 2015, the Denver branch currently boasts 600 employees. According to Gusto’s CEO and co-founder Josh Reeves, the company will use a portion of the newly raised funds to double the staff in Denver, grow its Bay Area team, and open up a new Research and Development office in New York City.“We’re excited about being in NY, and that’s all about accessing more technical talent, particularly in the financial services area, but also in general in the city’s growing tech ecosystem,” Reeves told Crunchbase News.He added the company plans on investing “quite a bit” in developing fintech by adding more functionality to the getting-paid-early feature of its software. Another substantial part of the money raised will be invested in services that help small businesses offer health insurance to their workers. “Healthcare in America is pretty complex. Over time we want to make healthcare more accessible,” said Reeves. “I feel like the scale is just beginning for us. Only 50% of small businesses make it to year five. We would love to increase the longevity for small businesses.” Apart from announcing the capital raise, Gusto also shared the news of welcoming Anne Raimondi, a SaaS industry veteran with more than 20 years of experience in scaling technology businesses, to its Board of Directors.In fact, the company has been rounding out its executive team since last year’s round C. Danielle Brown, who was Google's Chief Diversity and Inclusion Officer, has recently joined Gusto in the role of Chief People Officer whereas Fredrick Lee, the former Chief Information Security Officer at Square, has become the new CISO.
Starting a company and growing in until it reaches national or even global success is a dream all entrepreneurs share. But what is the differentiating factor between thriving and failing startups? A longitudinal study by Startup Genome explains.Since 2010, Startup Genome’s Bjoern Lasse Herrmann and Max Marmer collected and analyzed a comprehensive data set on over 34,000 companies to determine what are successful startups doing differently from the rest.Herrmann and Marmer concluded that the main reason startups fail is premature scaling. On the other hand, successful startups master the art of balancing numerous internal and external variables simultaneously, often in uncertain and volatile environments.According to their study, the most prominent challenge startups face is balancing the so-called ‘inner and outer dimensions’ of a newly founded business. The outer dimensions are best summarized by traction while the inner dimensions are five-fold, and they refer to the product, team, finance, legal, and customer relations.The results of Startup Genome’s research indicate that when inner dimensions outgrow outer ones, companies scale prematurely and become what Herrmann and Marmer classify as ‘inconsistent companies.’ By contrast, the startups that scale properly are what they consider ‘consistent.’Seven stages of startup developmentThe discovery phase is characterized by determining whether the company is solving a meaningful problem or not and whether it was solved in an adequate manner. This is followed by the validation phase, in which the focus is to confirm, using qualitative and quantitative metrics, that the product has a passionate, early-adopter user base.In the efficiency phase, the company prepares for scaling by optimizing a long conversion funnel. Refining the business model, company culture, and financing plans are the main tasks in this stage. If the previous steps are performed correctly, the company is likely to grow exponentially in the scaling phase. Sustain, maintain, and decline phases are the final three in the lifecycle of a startup, as defined by Herrmann and Marmer.Main differences between consistent and inconsistent startupsGrowth is a sign of progress, but it needs to come at the right time. Expanding too much too quickly is a mark of inconsistent startups. According to the Startup Genome study, inconsistent companies grow 10-12 times faster than their consistent counterparts during the discovery stage, and 1.5-2 times faster in the validation stage. However, this tendency halts in the crucial efficiency and scaling phases, when inconsistent startups grow 16-26 slower in comparison with consistent companies.Staff also matters, the study suggests. In successful companies, the team size stays relatively constant through the discovery, validation, and efficiency stages, growing at the scale stage. Unsuccessful startups tend to take on too many workers before the scaling phase, only to lose them at the crucial scaling phase.Another critical indicator that a startup is developing too fast is the amount of funding it raises at each lifecycle stage. Inconsistent startups raise three times more money in the efficiency stage and eighteen times less money in the scale stage.According to the study, the number of paid users in the discovery and validation phases differentiates consistent companies from inconsistent ones. Startups that scale prematurely have 75% more paid users in those first two stages compared to consistent startups. Consistent startups have 50% more paid users in the scale stage than inconsistent startups.Finally, outsourcing product development in early stages bodes ill. On average, inconsistent startups outsourced 11% of product development in the discovery and 19% in the validation phase. Consistent startups outsourced only 3 to 4% over the same period.
According to the 2019 US Startup Outlook Report, landing qualified workers with the right skills for growing a startup business is a challenge almost all surveyed companies face.The tenth annual report published by the Silicon Valley Bank shows that 82% of U.S. startup companies plan on hiring this year, yet a vast majority sees this as a difficult task. As many as 29% of respondents said that hiring workers who possess the right skills that would boost the entire business is extremely challenging, and another 62% defined this goal as somewhat challenging. In fact, when it comes to important public policy issues affecting startup companies, most startup executives (63%) named access to talent their number one concern. They feel that current rhetoric is driving foreign talent overseas, while the U.S. is not doing enough to create an infrastructure which would ensure U.S. residents get the necessary training for jobs in the tech industry. In order to widen the domestic talent pool, startup leaders propose more significant investments in STEM education and efforts in making it more accessible. The positions most companies are looking to fill are technical ones, followed by sales and product development/R&D.Other troubling public policiesAn issue closely linked with talent acquisition that is weighing down on startups is healthcare. The Silicon Valley Bank report reveals that 44% of respondents consider public policies governing healthcare costs a major issue. Providing competitive healthcare coverage for top talent can prove to be too pricey for young companies who lose the best employees to tech giants who can afford quality healthcare for their workers.Another big concern of U.S. startups is data protection. According to the report, 40% of surveyed companies said public policies regarding cybersecurity affect their businesses, and 33% said the same of policies related to customer privacy.Trade tensions with ChinaRounding up the top five public policies influencing startups is international trade. Over a fifth of respondents identified it as a major factor affecting the success of their companies. Trade tensions with China have caused the prices of both imports and exports to rise, making it more difficult to place U.S. tech products in China and get the once-affordable parts for those products from Chinese companies. Positive outlook after allDespite all these issues, U.S. entrepreneurs remain confident that business conditions will improve in the next 12 months. For the last four years, around 60% of startups shared this opinion, whereas around a third of them believed conditions would remain the same, and somewhere between 5 and 9% were pessimistic, expecting the situation to worsen. To get more information on how U.S. startups raise capital, their outlook on the merger and acquisition market, and their plans for the future consult the full report here.