Mobile ad retargeting startup TapCommerce is announcing that it has raised $10 million in Series A funding.
When I first spoke to co-founder and CEO Brian Long earlier this year, he described the company’s approach to mobile retargeting (where ads are targeted based on user’s prior activity) as “very large amounts of data coupled with sophisticated statistical analysis.” This week he told me that TapCommerce is now being used by more than 50 customers, including more than 30 of the top 100 grossing apps.
Retargeting can be particularly important for e-commerce companies (who want to lure customers back to spend more money), so it’s not too surprising that TapCommerce customers include Fab, eBay, and Jackthreads.
Looking at the money that’s already spent on mobile advertising, Long continued, “Our major thesis is that at some point, all of these companies are going to say, ‘Okay we got the installs, we just spent $3 million, what’s happening now? How are we making money on these people?’”
Competitors are starting to emerge, but he suggested that they’re still trying to develop their basic technology, while TapCommerce already has a solid platform (though it will continue to spend money on product development). He also acknowledged that Facebook has started to add retargeting-style options to its mobile app ads, but he said that he’s not worried about the social platforms moving aggressively into retargeting — he sees them more as potential customers of TapCommerce’s technology than as competitors.
Still, he said he was glad to have raised a large round (and almost exactly a year after TapCommerce raised its $1.2 million seed round), because “part of this is going to be a land grab, just as it was on the web.”
The new funding was led by Bain Capital Ventures and RRE Ventures, with a strategic investment from Nielsen Ventures and participation from previous backers Metamorphic Ventures, Eniac Ventures, and Nextview Ventures. Bain’s Scott Friend and RRE’s Eric Wiessen have joined TapCommerce’s board of directors.
Continue reading here: TapCommerce Raises $10.5M To Compete In The Mobile Ad Retargeting “Land Grab”
After what looked like a rather unsavoury boardroom struggle that saw Wladimir Baranoff-Rossine leave the UK startup he founded, the former MobiCart CEO has been recruited by m-commerce company (and MobiCart competitor) Shopgate as its new COO.
In news that seems somewhat related, we’ve also learned that Baranoff-Rossine has won his case for “constructive dismissal” after he challenged his former company, having publicly resigned under duress. As we reported at the time, his resignation was the result of an intense and long running board-level dispute over company strategy and the day-to-day operations of MobiCart — a dispute which in June finally took its toll on the company’s founder.
But all is well that ends well, I guess, and it’s certainly heartening to see Baranoff-Rossine land on his feet. In true entrepreneurial spirit, I also understand this is actually the serial entrepreneur and 35 year-old’s first regular job, having done his original startup straight out of University.
Not dissimilar to MobiCart’s own offering, Germany and Palo Alto-based Shopgate lets merchants build a mobile store-front using its platform, enabling them to be up and running with either a native app or browser-based m-commerce offering. Where it claims to best much of the competition is that it integrates with popular web-based e-commerce provider APIs, like Magento, which means that Shopgate is pretty much plug-and-play with most of the online store backends that retailers are already using.
Founded around three years ago, Shopgate is well-funded, too. In June it told TechCrunch it had raised $7 million in Series B funding led by Danish VC firm Northcap, and original backer Creathor Ventures out of Germany, bringing total funding to $9.4 million. In contrast, MobiCart is thought to have raised just under $1 million.
Shopgate also claims over 5,200 registered online shops using its platform, with more than 4,200 shopping apps created for iPhone, iPad and Android.
As Shopgate COO, Baranoff-Rossine will be based at its UK headquarters in Newcastle and will oversee global marketing and sales efforts. I’m also told the company learned of his availability after reading about his resignation from MobiCart on TechCrunch.
With education apps crossing one billion downloads on iTunes earlier this year, the demand for quality learning content, especially content of the kid-friendly variety, is growing fast — and so is the opportunity for app publishers. Since launching in 2010, Israel-based startup, TabTale, has been on a mission to capitalize on this demand and is quietly becoming one of the App Store’s top publishers as a result.
With a suite of over 240 apps that have more than 220 million downloads between them, TabTale wants to strike while the iron is hot. The startup announced this week that it has raised $12 million in Series B financing, led by Qualcomm Ventures and Magma Venture Partners, with contributions from Vintage Investment Ventures and existing investors.
To complement its organic growth, the company revealed in a statement this week that it plans to use its new capital to grow its team and to continue establishing itself as a buyer in the children and family market. The startup acquired mobile-focused educational app publisher and “Paint Sparkles” maker, Kids Games Club, back in March.
In September, TabTale was named the eighth largest publisher by download value by App Annie in September, placing it alongside names like EA, Rovio and Disney, with a significant share of downloads powered by Design It, the company’s fashion makeover app.
Operating in a fast-growing, hyper-competitive space where the forecast is more of both (growth and increase in competition) for the foreseeable future, what TabTale has managed to accomplish in three years is impressive. It’s now raised $13.5 million to date and claims more than 20 million active monthly users and done so behind girly games like “princess party planner” and while largely flying under the radar.
And, clearly not one to miss an opportunity to provide a note of emphasis for its competitors (and startups looking for exit opportunities), TabTale said that it also recently hit profitability.
a milestone TabTale has since underlined by re profitability.
For its 15th birthday, San Francisco-based publishing house McSweeney’s is getting into the crowdfunding game with a crazy-sounding goal — a campaign “which we believe can be the most successful campaign of its kind.” What does that mean exactly? Does an independent publishing house hope to top the millions of dollars raised by gaming consoles and cult TV shows?
Well, probably not. Instead, it has a very specific type of success in mind, as suggested by the campaign footnote: “Maybe. Percentage-wise.”
In other words, the company has set a lofty campaign goal of $15, with the real goal of raising some impressive multiple of that number. So if people end up spending, say, $15,000, McSweeney’s could say that it raised 100,000 percent of its goal. Would a title of “most successful, percentage-wise” title really give McSweeney’s anything other than bragging rights? Not as far as I can tell, but hey, it sounds cool, right? (Plus there’s the money raised.)
McSweeney’s was founded by author Dave Eggers, and in addition to publishing or co-publishing many of Eggers’ books (including his recent tech-focused novel The Circle), McSweeney’s has released titles by David Byrne, Michael Chabon, Lydia Davis, Jonathan Lethem, William T. Vollman, and many others. Its magazines include McSweeney’s Quarterly Concern and The Believer, and it runs a humor-focused website, which is where I found one of my favorite things ever published on the Internet.
The company is pitching this as more of a pre-sale than a charity campaign, writing in a staff email that “no one is donating money to our for-profit business” and that instead it’s “launching a custom-built micro-store-site on our own domain, one that offers our customers new ways to buy, subscribe, and generally celebrate all things McSweeney’s.” To take that approach, McSweeney’s used Crowdhoster, the white label crowdfunding platform from Crowdtilt.
As for why it’s going the crowd-funding route at all, the company writes:
Even fifteen years in, though, when our beloved readers could be forgiven for thinking that canny early investments in Monster Beverage or Westinghouse Air Brakes have long ago put us beyond any need of external support, the truth is that we are no less and no more than an independent publishing house. Our quarterly and our website take no ads; our projects stretch every penny. And because no millennial cataclysm seems immediately imminent, and we’d like to continue to grow and flourish, we’re stepping outside the bounds of our own scruffy e-commerce portal, and launching a crowdfunded subscription drive and birthday sale.
If you’re interested in participating, you can visit the campaign here. (And by the way, McSweeney’s isn’t the only indie publisher to launch a crowdfunding effort this week — I donated to the campaign of comics publisher Fantagraphics last night.)
This fund is purely for late-stage growth rounds in Foundry’s existing portfolio companies. The firm says it will invest up to $25 million into companies that Foundry has backed through its previous funds. As managing director Brad Feld writes, Foundry has been limited in the amount it can invest in later stage rounds due to the firm’s early-stage strategy.
The Foundry Group invests in early-stage North American-based software and IT companies, following a philosophy it outlined back in 2008, “thematic investing.” Startups that Foundry has backed include Zynga, Jiraffe, Fitbit, MakerBot, Awe.sm, Modular Robots, and others. Common areas where the fund invests in include storage, semiconductors, enterprise software, consumer Internet, communications equipment, etc.
Foundry, which raised a new $225 million fund last fall, also just debuted its FG Angel syndicate on AngelList a few weeks ago, which was one of the first VC firms to jump into the syndicates pool. Foundry said it would be investing as much as $2.5 million with a goal of making 50 investments between now and the end of 2014 in companies that list on AngelList.
The fund may have a number of startups in the portfolio that are at a later stage, as it’s been over five years since the firm’s first fund. SendGrid, Fitbit (which just raised $43 million in new funding) and a number of others that Foundry backed early years ago, may eventually raise late-stage growth funding. While Foundry did participate in Fitbit’s recent funding, it’s unclear if Fitbit’s recent round received investment from Foundry Group Select.
It should be interesting to see if other smaller, early-stage VCs will start raising separate funds to get into late-stage investing. Stay tuned.
In a conversation at the GMIC mobile conference this week, Y Combinator co-founder Paul Graham gave the most recent stats on the seed stage incubator. Of the 511 companies that had passed through YC prior to its most recent Summer 2013 class, 306 had valuations tied to them. The total value of those companies is now $13.7 billion, up $2 billion since Graham’s last update on the number in June.
So what’s happened in the past couple of months that would juice the total valuation so much? Is the it due to growth among many YC startups, or concentrated at the top?
There are likely several reasons for the increase in valuation. For one thing, as more Y Combinator companies raise their first rounds, their valuations get added to the pool. The aggregate valuation also increases each time it sees an alumni company get acquired. And, of course, later-stage companies raising their rounds at higher valuations will also drive that number up.
Of course, not every YC startup ends up raising money or getting funded right after demo day. And many that do initially get seed funding do so with convertible notes rather than through priced rounds, so you can’t really peg down a valuation as such.
But for those you can calculate — either because they died, got acquired, or sold stock at a specific valuation — the value of the YC portfolio has jumped considerably.
Some of the growth can be attributed to an increase in the number of companies funded. At the 500 Startups PreMoney conference in June, Graham told me that there were 285 YC companies with post-money valuations, compared to 306 now. (Check out the video below.) At that time, the total amount that YC companies had raised was $1.7 billion.
A number of YC companies have also raised additional rounds of funding in the past several months. Twitch (formerly Justin.tv) raised $20 million, E La Carte raised $13.5 million, Clustrix raised $10 million, and Instacart brought on $8.5 million, among others.
But the bulk of the increase probably comes from a major change at the top. Like many private equity investors, the lion’s share of Y Combinator’s investment value is concentrated in just a few high-flying startups. Back in June, Graham told me that the top 10 companies accounted for $8.6 billion of its $11.6 billion total valuation.
Y Combinator wouldn’t break out what the valuation of that top 10 is right now, but it seems likely that some major change in the value of those companies is the biggest reason for the increase. That could mean a revaluation among one or more of the ten, perhaps triggered by an equity sale that has closed but hasn’t yet been announced.
For the conspiracy theorists out there, it’s very possible that YC wouldn’t share this data because a company (or companies) doesn’t want that information to be public. After all, saying that the top 10 now accounted for $10 billion of the $13.6 billion total valuation — and note, YC did not say this, but if it did — that would mean that somebody just got a big boost in funding, or perhaps saw shares revalued through a secondary sale.
Ignoring the fact that we don’t actually know this to be true but assuming this is the case,* which of the ten was it?
Well, there was that big Airbnb funding round that was never quite announced.** It’s possible it took forever to get done, and didn’t actually close until the summer. Or maybe Stripe has raised money that we just haven’t heard about yet. It’s become a sort of poster child for Y Combinator success, after all. Or perhaps Drew Houston & Co. have sold off some secondary shares in Dropbox.
Or maybe, maybe, none of the above.
For newshounds like me, the fun is in figuring it out.
* And full well knowing the dangers of making an ass out of u and me
** Shameless plug: Can’t wait to ask Airbnb co-founder Nate Blecharczyk about this at TC Disrupt Europe next Monday around Noon CET.
Given the massive global popularity of messaging, the market in play is enormous. Nexmo is a quickly growing company that provides carrier-direct SMS and Voice APIs that developers can use to reach phones around the world. Vying for traction in the space with competitors like Twilio, Nexmo has raised raised $3 million earlier this year, and unlike so many other young technology companies, is profitable. However, it is a somewhat quiet company.
I recently sat down with Nexmo’s CEO Tony Jamous to dig into just how quickly his company is growing, how it managed to break into the black and what its next plans are. Jamous is affable, and provided TechCrunch with far more hard numbers than most firms are willing to share. Then again, most companies don’t share, because showing off how much money you lose isn’t too flattering. Nexmo doesn’t have that problem.
I won’t be focusing on the technical aspects of Nexmo and its industry in this post. That’s a discussion for another day.
Nexmo’s revenue grew at a stable 20 percent monthly for the first half of 2013. That income directly corresponds to the firm’s 20 percent average monthly growth rate of its through-traffic during the same period.
Chronologically, Nexmo began to accelerate around the time of its most recent round of funding – the company has raised a total of $3.83 million. Jamous referred to the cash injection as a “shot in the arm.” Ask any CEO what he intends to do with a new round of funding, and her response every time is the same: Acceleration. Nexmo is no different.
Using its most recent $3 million, Nexmo grew its sales team and signed several new and large clients. But in its favor, existing customers grew in scale, directly boosting traffic through its APIs and, thus, increasing revenue.
Nexmo has been caught in a contented updraft: It counts among its customers, by its estimation, about 80 percent of the “Over-The-Top Content” message market (OTT). Line, Viber and KaKaoTalk are among the larger OTT messaging services, and they use Nexmo. The company also works with other OTT players, but asked me not publish their names, citing private contracts.
To supplement the growth in its SMS business, Nexmo began to support voice calls in June. In July, 4 million calls were sent through the new service. Jamous stated that the voice part of Nexmo grew quickly at launch because existing clients had requested it, putting demand in place from its first day in operation. Twilio, which has been in the call game far longer, recently announced that it is handling about 4 million calls daily. I don’t have Nexmo’s comparable figure. Jamous did tell me that Nexmo has handled more than 1.4 billion voice and SMS API transactions.
Voice currently comprises 7 percent of Nexmo revenue, and the company expects it to rise to 15 percent of its fourth quarter revenue.
Nexmo had revenues of $4 million in August. That figure is more than the company has raised, to date, it’s worth noting. That revenue rate puts Nexmo at around a $50 million yearly run rate. The company will exceed that rate in 2013, provided that it continues to grow.
According to Jamous, Nexmo expects total revenue of around $40 million for calendar 2013. Twilio was tipped earlier in 2013 to be on track for about $50 million in revenue for the year, putting the companies on rough top-line parity.
Extrapolating from the August revenue figure, assuming that Nexmo grows at 5 percent monthly – a reduced pace, but one that I think is a reasonable projection – Nexmo would generate just under $9 million in top line next December. That would put it on a nine-figure yearly run rate.
Nexmo is looking to raise another tranche of cash. Why raise when you are profitable? Jamous wants to accelerate the growth of his product and support team. He still handles the bulk of support work himself, something that probably worked when the company was smaller than it is now.
Jamous indicated that he wants to raise more than $20 million, and the company is talking to new investors. Previously, Nexmo raised cash from foreign investors in China and Korea, helping it to build relationships in those markets where it didn’t have local clout. I wouldn’t be surprised if Nexmo raised its next round at least partially from investors of several continents.
Will the company struggle to raise cash? Probably not. Twilio recently raised $70 million. But the companies aren’t complete analogues, so we should avoid over-comparison, but in this context they are relatable. If Twilio can land $70 million (bringing its total raised cash to over $100 million) Nexmo shouldn’t struggle to pick up $22 million or $23 million.
The company also wants to put together a proper marketing strategy. You likely hadn’t heard of Nexmo before today. I only recently became acquainted with the firm. It could use a higher profile.
Nexmo was founded in June of 2010, and the first message went through its systems in January of 2011. So, in a little over three years, it has grown to a company on a $50 million yearly run rate. That’s an impressive tear. Still, the growth of OTT applications that were its clients did contribute greatly to its success, and growth.
To say right place, right time is lazy. Nexmo built a product and scaled as some of its larger firms did the same. Still, growth could slow if OTT app partners slow, and if those applications themselves lose relevance in the notoriously fickle mobile world, Nexmo could suffer from flat or declining incomes.
Also, Twilio is ludicrously well funded, and could begin to hem in on Nexmo’s key customers. Competition is a standard business risk, however, and not one that is unique to Nexmo. Still, for a company that wants to raise money on the strength of its growth, Nexmo has to keep a closer eye on its acceleration than comparable firms.
Provided that Nexmo secures the funds that it is looking for, it can begin marketing with a decent ROI, and can continue to develop its voice business. I don’t see why the company can’t continue steady growth. The days of 20 percent monthly revenue growth are likely past, but that doesn’t mean that the firm can’t keep putting points on the board.
It will be interesting to see how heavily Nexmo invests after it raises, and whether it will be willing to dip into the red for a few quarters to accelerate its top line. Once profitable, there is a certain momentum to making money. It can be uncomfortable to become cashflow negative (we’re speaking loosely here, of course) after being acquainted with profitability.
After digging through the numbers, Jamous and I discussed culture for a few minutes. The operating philosophy of Nexmo is to not hire until the need is painful, and even then to try and solve the need with technology. The company currently has 33 employees, spread throughout the United States, Hong Kong, London, and other locations. I don’t think that we’ll see Nexmo hire half of San Francisco once it secures its new funds.
The core challenge for Nexmo is proving that it can continue revenue growth. It doesn’t have to prove that it can generate profits. But to command the valuation it likely wants, it will have to detail how it can grow outside of the OTT as quickly as it grew with it.
I’ll be checking back in with the company towards the end of the year to see how its internal metrics are looking. For now, Nexmo has built a track record that it has to continue to live up to.
Top Image Credit: Clemson
Dow Jones Venture Source released its quarterly report on the state of venture capital, including data on number of VC deals, funds raised, M&As and IPOs in the technology sector. According to the report U.S.-based companies raised $8.1 billion from 806 venture capital deals in 3Q 2013, a 2% increase in capital and a 4% decrease in number of deals from the previous quarter.
Compared to the same period in 2012, there was a 10% decrease in number of deals, while amount raised went up by 4%. The sectors to increase in amount raised were Business and Financial Services (46%) and Consumer Services (1%). By industry group, IT led the pack with 246 deals raising $2.3 billion and
accounting for 28% of total equity investment. Business and Financial Services saw $2.2 billion through 195 deals. Healthcare placed third with $1.8 billion in 164 deals. And $1.3 billion were raised by Consumer Services in 148 deals, a decrease of 10% in deal flow, while capital invested went up by 1%.
The largest deals in the quarter included Beat’s $500 million raise, Uber’s $258 million funding round, Palantir’s $200 million raise, and MongoDB’s $150 million round. The most active investors by amount of deals were in order, Google Ventures (25), Sequoia Capital (17), Andreessen Horowitz (17), Kleiner Perkins (16) and NEA (15).
M%A increased by 11% from 2Q 2013, with 111 deals garnering $9.7 billion. The number of deals also increased by 25 percent from the previous quarter. These included IBM’s $1 billion acquisition of Trusteer, and AOL’s $405 million purchase of Adap.TV.
IPOs seem to be seeing an uptick, with 25 companies raising $2.2 billion through public offerings in 3Q 2013. Both number of deals and capital raised increased from the previous quarter, with 25% and 24% increases, respectively. The largest IPOs of the quarter were FireEye and Violin Memory.
Median pre-money valuations decreased slightly by 7% from 2Q 2013. In terms of VCs themselves, firms raised 11% more funds than the previous quarter and saw the highest number of funds since 4Q’08. The data shows that 62 funds raised $4.1 billion in 3Q 2013, an 11% increase in number of funds, but a 47% decrease in the amount raised from the prior quarter. Greylock raised the largest fund in the quarter at $1 billion, accounting for 25% of the total amount raised in 3Q 2013. The median U.S. fund size was $123 million in the three quarters of 2013.
Data analytics startup ParStream has raised an $8 million Series B round led by Khosla Ventures. The round increases ParStream’s total funding to $13.6 million. The company raised $5.6 million last year in a round led by Khosla Ventures with Baker Capital, CrunchFund (which is owned by TechCrunch founder Michael Arrington), Data Collective, Tola Capital and private individuals participating.
ParStream develops search technology that compresses data using bit-map indexes that allow data to be read very fast as it resides in-memory, stored across a distributed infrastructure. The value comes with analyzing huge amounts of data. For example, that might be a telecommunications company that has traditionally processed data by collecting it in a central location at considerable cost and limited capability. Instead, ParStream argues that the data can be analyzed at the base station, allowing it to be more precise with information to support partners who are offering services to subscribers.
ParStream, which was founded in 2008 in Germany but now keeps offices in Cologne and Palo Alto, partnered with Panopticon in May to offer data analytics and data visualization by integrating their respective platforms. ParStream competes with companies such as MapR, which does analytics on Hadoop.
Read the original here: ParStream Raises $8M From Khosla Ventures For Data Analytics Platform
If you were looking forward to boasting about your Hackermeter score as a means of getting your next coding gig, you’re gonna have to make new plans: the two-month old startup has been acquired by Pinterest, and will be shut down.
The premise behind Hackermeter was a fairly simple one: they didn’t think the classic résumé was good enough for hiring coders, so they set out to replace it. You’d prove your chops through a series of coding tests (from a fibonacci sequence generator to some lightweight cryptography), with each challenge being graded based on you and your code’s efficiency.
Potential employers could playback your code keystroke-by-keystroke (partly to see how your code spills out of your brain, and partly as a small barrier to copy/pasting challenge solutions from elsewhere), as well as create challenges of their own.
Hackermeter’s launch was met with its fair share of criticism, with most naysayers pointing out that similar ideas had been tested many a time before by companies like HackerRank, CodeEval, and a host of others — and yet, the good ol’ résumé lived on.
Both Pinterest and Hackermeter’s founders declined to share the terms (we’re still digging, regardless, and will update this post if we hear specifics), but it’s safe to say it wasn’t a massive one. The product was just two months old, its team still small, and, beyond the funds that came with their stint in Y-Combinator’s Winter 2013 class, they hadn’t raised much money. According to their AngelList profile, they were in the middle of trying to raise $750k. Add in the fact that Pinterest already plans on closing it down, and this is quite clearly meant primarily to be a talent acquisition.
The company’s co-founders, Lucas Baker and Frost Li, will both join Pinterest as engineers.
Hackermeter matches developers with companies through code challenge portfolios.
Pinterest is a social networking site with a visually-pleasing “virtual pinboard” interface. Users collect photos and link to products they love, creating their own pinboards and following the pinboards of other people whom they find interesting. The site has experienced rapid growth in recent months.
Go here to see the original: Pinterest Acquires Coding Challenge Site Hackermeter Right Out Of The Gate, Will Shut It Down