All posts by Richy George

Oracle turns to innovation hubs to drive cultural and business shift to cloud

Posted by on 23 April, 2019

This post was originally published on this site

Oracle was founded in 1977. While it’s not exactly IBM or GE, both of which date back to the late 19th and early 20th centuries respectively, it is old enough to be experiencing a fair bit of disruption in its own right. For a good part of its existence, it sold databases to some of the biggest companies in the world, but today as the market changes and shifts from on-prem data centers to the cloud, how does a company like Oracle make that transition?

Of course, Oracle has been making the shift to the cloud for the last several years, but it would be fair to say that it came late. Plus, it takes more than building some data centers and pushing out some products to change a company the size of Oracle. The company leadership recognizes this, and has been thinking at the highest levels of the organization about how to successfully transform into a cloud company from a cultural and business perspective.

To that end, Oracle has opened 5 innovation hubs over the last several years with locations in Austin, Texas; Reston, Virginia; Burlington, Massachusetts; Bangalore, India and Santa Monica, California. What are these centers hoping to achieve, and how will it extend the lessons learned to the rest of the company? Those are big questions Oracle must answer to make some headway in the cloud market.

Understanding the problem

Oracle seems to understand it has to do something different to change market perception and its flagging market position. Synergy Research, a firm that tracks cloud marketshare reports that the company is struggling

“For cloud infrastructure services (IaaS, PaaS, hosted private cloud services) — Oracle has a 2 percent share,” John Dinsdale, chief analyst and managing director at Synergy told TechCrunch. He added, “It is a top ten player but it is nowhere near the scale of the leading cloud providers; and its market share has been steadily eroding.”

The news is a bit better when it comes SaaS. “Along with SAP, Oracle is one of the leaders in the ERP segment. But enterprise SaaS is much broader than ERP and across all of enterprise SaaS it is the number 4 ranked provider behind Microsoft, Salesforce and Adobe. Oracle worldwide market share in Q4 was 6 percent,” Dinsdale said.

The company knows that it will take a vast shift to change from an organization that mostly sold software licenses and maintenance agreements. It pushed those hard, sometimes so hard that it left IT pros with a sour taste in their mouths. Today, with the cloud, the selling landscape has changed dramatically to a partnership model. The company knows that it must change too. The question is, how?

That will take an entirely new approach to product development, sales and marketing; and the innovation hubs have become a kind of laboratory where engineers can experiment with more focussed projects, and learn to present their ideas with goal of showing instead of telling customers what they can do.

And the young shall lead

One way to change the culture is to infuse it with fresh-thinking, smart young people and that’s what Oracle is attempting to do with these centers, where they are hiring youthful engineers, many right out of college, to lead the change with the help of more seasoned Oracle executives.

They are looking for ways to rethink Oracle’s cloud products, to pull the services together into packages of useful tools that helped solve a specific business problems from prescription opioid abuse to predicting avocado yields. The idea isn’t just to have a some section of the company where people work on dream projects. They want them to relate to real business problems that results eventually in actual sales and measurable results.

Hamza Jahangir, group vice president for the cloud solution hubs at Oracle says they look for people who want to dig into new solutions, but they want a practical streak in their innovation hub hires. “We don’t want just tinkerers. If the only problem you’re solving is that of your own boredom, that’s not the type of person we are looking for,” he said.

Executive buy-in

The idea of the innovation center actually began with co-CEO Mark Hurd, according to Jahangir. He had been working for several years to change the nature of the sales force, the one that had a reputation of strong-arming IT pros, with a new generation by hiring people right out of college with a fresh approach.

Hurd didn’t want to stop with sales though. He began looking at taking that same idea of hiring younger employees to drive that cultural shift in engineering too. “About two years ago, Mark challenged us to think about how can we change the customer-facing tech workforce as the business model was moving to the cloud,” Jahangir said.

Hurd gave him some budget to open the first two centers in Austin and Reston and he began experimenting, trying to find the right kinds of employees and projects to work on. The funding came without of a lot of strings or conditions associated with it. Hurd wanted to see what could happen if they unleashed a new generation of workers and gave them a certain amount of freedom to work differently than the traditional way of working at Oracle.

Changing expectations

Jahangir was very frank when it came to assessing customer’s expectations around Oracle moving to the cloud. There has been a lot of skepticism and part of the reason for the innovation centers was to find practical solutions that could show customers that they actually had modern approaches to computing, given a chance.

The general customer stance has been, “We don’t believe you have anything real, and we need to see true value realized by us before we pay you any money,” he said. That took a fundamental shift to focussing on actual solutions. It started with the premise that the customers shouldn’t believe any of the marketing stuff. Instead it would show them.

“Don’t bother watching a Powerpoint presentation. Ask us to show you real solutions and use cases where we have solved real material problems — and then we can have a discussion.”

Even Chairman and company founder Larry Ellison recognizes the relationship and selling model needed to change as the company moves to the cloud. Jahangir relayed something he said in a recent internal meeting, “In the cloud we are now no longer selling giant monolithic software. Instead we are selling small bites of the apple. The relationship between the vendor and the buyer is becoming more like a consumer model.” That in turn requires a new way of selling and delivering solutions, precisely what they are trying to figure out at the innovation hubs.

Putting the idea to work

Once you have a new way of thinking, you have to put it to work, and as the company has created these various hubs, that has been the approach. As an example, one that isn’t necessarily original, but that puts Oracle features together in a practical way, is the connected patient. The patient wears a Fitbit-like monitor, uses a smart blood pressure cuff and a smart pill box.

The patient can then monitor his or her own health with these tools in a consolidated mobile application that pulls this data together for them using the Internet of Things cloud service, Oracle Mobile Cloud and Oracle Integration Cloud. What’s more, that information gets shared with the patient’s pharmacy and doctor, who can monitor the patient’s health and get warnings when there is a serious issue, such as dangerously high blood pressure.

Another project involved a partnership with Waypoint Robotics, where they demonstrated a robot that worked alongside human workers. The humans interacted with the robots, but the robot moved the goods from workstation to workstation acting as a quality control agent along the way. If it found defects or problems, it communicated that to the worker via a screen on the side of the unit, and to the cloud. Every interaction between the humans, goods and robot was updated in the Oracle cloud.

Waypoint Robotics Robot inspecting iPhones. Information on the display shows it communicating with the Oracle cloud. Photo: Ron Miller

One other project worked with farmers and distributors to help stores stay stocked with avocados, surely as good a Gen Z project as you are likely to find. The tool looks at weather data, historical sales and information coming from sensors at the farm, and it combines all of that data to make predictions about avocado yields, making use of Oracle Autonomous Data Warehouse, Oracle Analytics Cloud and other services from Oracle cloud stack.

Moving beyond the hubs

This type of innovation hub has become popular in recent years as a way to help stave off disruption, and Oracle’s approach is actually in line with this trend. While companies sometimes isolate them to protect them from negativity and naysayers in an organization, leaving them isolated often prevents the lessons learned from being applied to the broader organization at large, essentially defeating the very purpose of creating them in the first place.

Jahangir says that they are attempting to avoid that problem by meeting with others in the company and sharing their learnings and the kinds of metrics that they use in the innovation center to measure success, which might be different from the rest of the company.

He says to put Oracle on the customer agenda, they have to move the conversation from from religious battles, as he calls how people support or condemn tech from certain companies. “We have to overcome religious battles and perceptions. I don’t like to fight religion with more religion. We need to step out of that conversation. The best way we have seen for engaging developer community is to show them how to build really cool things, then we can hire developers to do that, and showcase that to the community to show that it’s not just lip service.”

The trick will be doing that, and perhaps the innovation centers will help. As of today, the company is not sharing its cloud revenue, so it’s hard to measure just how well this is helping contribute to the overall success of the company, but Oracle clearly has a lot of work to do to change the perception of the enterprise buyer about its cloud products and services, and to increase its share of the growing cloud pie. It hopes these innovations hubs will lead the way to doing that.

Jahangir recognizes that he has to constantly keep adjusting the approach. “The Hub model is still maturing. We are finding and solving new problems where we need new tooling and engagement models in the organization. We are still learning and evolving,” he said.

Posted Under: Tech News
Blueshift announces $15M Series B to expand AI-fueled cross-channel marketing tool

Posted by on 23 April, 2019

This post was originally published on this site

Blueshift is startup founded by tech industry veterans, who saw first-hand how difficult cross-channel marketing was. They decided to launch a company and build a cross-channel marketing platform from the ground up that uses AI and machine learning to make sense of the growing amount of customer data. Today, the startup announced a $15 million Series B round to keep it going.

The round was led by Softbank Ventures Asia, a fund focused on AI startups like Blueshift . Previous investors Storm Ventures and Nexus Venture Partners also participated. Today’s investment brings the total raised to $30 million, according the company.

Company co-founder and CEO Vijay Chittoor says the marketing landscape is changing, and he believes that requires a new approach to allow marketers to take advantage of the multiple channels where they could be engaging with customers from a single tool.

“If you thought about the world of customer engagement at Walmart or Groupon [or any other retailer] 10 years ago, it was primarily an email problem. Today, we as customers, we’re interacting with these brands on not just email, but also on mobile notifications, Facebook custom audiences and WeChat [and across multiple other channels],” he explained.

He says that this has created a lot more data, which it turns out is a double-edged sword for marketing pros. “I think on one end, it’s exciting for a marketer or a CMO to have more data and more channels. It gives them more ways to connect. But at the same time, it’s also more challenging because now you have to make sense of thousand times more data. And you have to use it intelligently on not just one channel like email, but you’re now trying to make sense of data across 15 different channels,” Chittoor said.

This a crowded field with big players like Adobe, Salesforce and Oracle, among others, offering similar cross-channel, AI-fueled solution. In addition startups are attracting huge chunks of money to attack this problem, including Klayvio pulling in $150 million a couple of weeks ago and Iterable, which landed $50 million last month.

He says his company’s differentiator is the AI piece, and it is this piece that the company’s lead investor in this round has been focusing on in its investments. The company plans to use this round to continue building out its marketing platform and show marketers how to communicate intelligently across channels wherever the consumer happens to be. Customers include LendingTree, Udacity and BBC.

Posted Under: Tech News
Harness hauls in $60M Series B investment on $500M valuation

Posted by on 23 April, 2019

This post was originally published on this site

Series B rounds used to be about establishing a product-market fit, but for some startups the whole process seems to be accelerating. Harness, the startup founded by AppDynamics co-founder and CEO Jyoti Bansal is one of those companies that is putting the pedal the metal with his second startup, taking his learnings and a $60 million round to build the company much more quickly.

Harness already has an eye-popping half billion dollar valuation. It’s not terribly often I hear valuations in a Series B discussion. More typically CEOs want to talk growth rates, but Bansal volunteered the information, excited by the startup’s rapid development.

The round was led by IVP, GV (formerly Google Ventures) and ServiceNow Ventures. Existing investors Big Labs, Menlo Ventures and Unusual Ventures also participated. Today’s investment brings the total raised to $80 million, according to Crunchbase data.

Bansal obviously made a fair bit of money when he sold AppDynamics to Cisco in 2017 for $3.7 billion and he could have rested after his great success. Instead he turned his attention almost immediately to a new challenge, helping companies move to a new continuous delivery model more rapidly by offering Continuous Delivery as a Service.

As companies move to containers and the cloud, they face challenges implementing new software delivery models. As is often the case, large web scale companies like Facebook, Google and Netflix have the resources to deliver these kinds of solutions quickly, but it’s much more difficult for most other companies.

Bansal saw an opportunity here to package continuous delivery approaches as a service. “Our approach in the market is Continuous Delivery as a Service, and instead of you trying to engineer this, you get this platform that can solve this problem and bring you the best tooling that a Google or Facebook or Netflix would have,” Basal explained.

The approach has gained traction quickly. The company has grown from 25 employees at launch in 2017 to 100 today. It boasts 50 enterprise customers including Home Depot, Santander Bank and McAfee.

He says that the continuous delivery piece could just be a starting point, and the money from the round will be plowed back into engineering efforts to expand the platform and solve other problems DevOps teams face with a modern software delivery approach.

Bansal admits that it’s unusual to have this kind of traction this early, and he says that his growth is much faster than it was at AppDynamics at the same stage, but he believes the opportunity here is huge as companies look for more efficient ways to deliver software. “I’m a little bit surprised. I thought this was a big problem when I started, but it’s an even bigger problem than I thought and how much pain was out there and how ready the market was to look at a very different way of solving this problem,” he said.

Posted Under: Tech News
Microsoft delves deeper into IoT with Express Logic acquisition

Posted by on 18 April, 2019

This post was originally published on this site

Microsoft has never been shy about being acquisitive, and today it announced it’s buying Express Logic, a San Diego company that has developed a real-time operating system (RTOS) aimed at controlling the growing number of IoT devices in the world.

The companies did not share the purchase price.

Express Logic is not some wide-eyed, pie-in-the-sky startup. It has been around for 23 years building (in its own words), “industrial-grade RTOS and middleware software solutions for embedded and IoT developers.” The company boasts some 6.2 billion (yes, billion) devices running its systems. That number did not escape Sam George, director of Azure IoT at Microsoft, but as he wrote in a blog post announcing the deal, there is a reason for this popularity.

“This widespread popularity is driven by demand for technology to support resource constrained environments, especially those that require safety and security,” George wrote.

The beauty of Express Logic’s approach is that it can work in low-power and low resource environments and offers a proven solution for a range or products. “Manufacturers building products across a range of categories — from low capacity sensors like lightbulbs and temperature gauges to air conditioners, medical devices and network appliances  –leverage the size, safety and security benefits of Express Logic solutions to achieve faster time to market,” George wrote.

Writing in a blog post to his customers announcing the deal, Express Logic CEO William E. Lamie, expressed optimism that the company can grow even further as part of the Microsoft family. “Effective immediately, our ThreadX RTOS and supporting software technology, as well as our talented engineering staff join Microsoft. This complements Microsoft’s existing premier security offering in the microcontroller space,” he wrote.

Microsoft is getting an established company with a proven product that can help it scale its Azure IoT business. The acquisition is part of a $5 billion investment in IoT the company announced last April that includes a number of Azure pieces such as Azure Sphere, Azure Digital Twins, Azure IoT Edge, Azure Maps and Azure IoT Central.

“With this acquisition, we will unlock access to billions of new connected endpoints, grow the number of devices that can seamlessly connect to Azure and enable new intelligent capabilities. Express Logic’s ThreadX RTOS joins Microsoft’s growing support for IoT devices and is complementary with Azure Sphere, our premier security offering in the microcontroller space,” George wrote.

Posted Under: Tech News
CloudBees acquires Electric Cloud to build out its software delivery management platform

Posted by on 18 April, 2019

This post was originally published on this site

CloudBees, the enterprise continuous integration and delivery service (and the biggest contributor to the Jenkins open-source automation server), today announced that it has acquired Electric Cloud, a continuous delivery and automation platform that first launched all the way back in 2002.

The two companies did not disclose the price of the acquisition, but CloudBees has raised a total of $113.2 million while Electric Cloud raised $64.6 million from the likes of  Rembrandt Venture Partners, U.S. Venture Partners, RRE Ventures and Next47.

CloudBees plans to integrate Electric Cloud’s application release automation platform into its offerings. Electric Flow’s 110 employees will join CloudBees.

“As of today, we provide customers with best-of-breed CI/CD software from a single vendor, establishing CloudBees as a continuous delivery powerhouse,” said Sacha Labourey, the CEO and co-founder of CloudBees, in today’s announcement. “By combining the strength of CloudBees, Electric Cloud, Jenkins and Jenkins X, CloudBees offers the best CI/CD solution for any application, from classic to Kubernetes, on-premise to cloud, self-managed to self-service.”

Electric Cloud offers its users a number of tools for automating their release pipelines and managing the application lifecycle afterward.

“We are looking forward to joining CloudBees and executing on our shared goal of helping customers build software that matters,” said Carmine Napolitano, CEO, Electric Cloud. “The combination of CloudBees’ industry-leading continuous integration and continuous delivery platform, along with Electric Cloud’s industry-leading application release orchestration solution, gives our customers the best foundation for releasing apps at any speed the business demands.”

As CloudBees CPO Christina Noren noted during her keynote at CloudBees’ developer conference today, the company’s customers are getting more sophisticated in their DevOps platforms, but they are starting to run into new problems now that they’ve reached this point.

“What we’re seeing is that these customers have disconnected and fragmented islands of information,” she said. “There’s the view that each development team has […] and there’s not a common language, there’s not a common data model, and there’s not an end-to-end process that unites from left to right, top to bottom.” This kind of integrated system is what CloudBees is building toward (and that competitors like GitLab would argue they already offer). Today’s announcement marks a first step into this direction toward building a full software delivery management platform, though others are likely to follow.

During his company’s developer conference, Labourey also today noted that CloudBees will profit from Electric Cloud’s long-standing expertise in continuous delivery and that the acquisition will turn CloudBees into a “DevOps powerhouse.”

Today’s announcement follows CloudBees’ acquisition of CI/CD tool CodeShip last year. As of now, CodeShip remains a stand-alone product in the company’s lineup. It’ll be interesting to see how CloudBees will integrate Electric Cloud’s products to build a more integrated system.

 

Posted Under: Tech News
Spotinst, the startup enabling companies to purchase and manage excess cloud capacity, acquires StratCloud

Posted by on 18 April, 2019

This post was originally published on this site

Spotinst, the cloud automation and optimization startup founded in Tel Aviv but now with offices in San Francisco, New York, and London too, has acquired AWS partner StratCloud. Terms of the deal remain undisclosed, although I’m hearing it combines both cash and stock and was somewhere in the region of $5 million.

As part of the acquisition, StratCloud’s team of 15 people will be joining Spotinst, including founder Patrick Gartlan, who will become VP, Cloud Services at Spotinst. StratCloud hadn’t raised any venture capital but instead was bootstrapped by Gartlan, who was the former CTO of Cloud Optimization company CloudCheckr.

Founded in 2015, Spotinst enables enterprises to optimize their cloud infrastructure usage by automating the process of using excess — and therefore cheaper — capacity from leading cloud providers.

As TechCrunch’s Ron Miller previously explained, cloud platforms like AWS, Microsoft Azure and Google Cloud Platform, all of which Spotinst supports, have to maintain more resources than they need at any given time. All three companies offer steep discounts to customers who want to access these resources, but they come with a strict condition that the platforms can take those resources back whenever they need them. Which is where Spotinst (and today’s acquisition of StratCloud) comes in.

Spotinst’s platform manages the process of acquiring spare capacity, powered by predictive AI, and seamlessly switches providers before it’s withdrawn. This ensures that cloud computing “workloads” keep functioning, while the customer still receives the best possible price.

Meanwhile, StratCloud tech is described as an “optimization platform” that buys, sells and converts reserved capacity, therefore maximizing savings for on-demand infrastructure. “This leads to lower compute payments, without engineers having to change anything in the applications and infrastructure they manage,” explains Spotinst.

Related to this, Spotinst will migrate StratCloud’s several dozen customers to the Spotinst Platform where they’ll continue to receive all of the current functionality.

Overall, the acquisition means Spotinst can now offer a complete solution for cloud users, including offering reserved instances and unused computer power so that enterprises can run any workload and support large-scale migrations on any cloud provider. In addition, Spotinst says the combined technologies give Managed Service Providers (MSPs) a comprehensive tool to optimize cloud workloads for all of their managed customers.

Spotinst claims over 1,500 enterprise customers in 52 countries, including Samsung, N26, Duolingo, Ticketmaster and Wix. The company currently employs approximately 150 staff across its four offices and has raised $52 million in VC funding to date.

Posted Under: Tech News
Salesforce is buying MapAnything, a startup that raised over $84 million

Posted by on 17 April, 2019

This post was originally published on this site

Salesforce announced today it’s buying another company built on its platform. This time it’s MapAnything, which as the name implies, helps companies build location-based workflows, something that could come in handy for sales or service calls.

The companies did not reveal the selling price, and Salesforce didn’t have anything to add beyond a brief press release announcing the deal.

“The addition of MapAnything to Salesforce will help the world’s leading brands accurately plan: how many people they need, where to put them, how to make them as productive as possible, how to track what’s being done in real time and what they can learn to improve going forward,” Salesforce wrote in the statement announcing the deal.

It was a logical acquisition on many levels. In addition to being built on the Salesforce platform, the product was sold through the Salesforce AppExchange, and over the years MapAnything has been a Salesforce SI Partner, an ISV Premier Partner, according the company.

“Salesforce’s pending acquisition of MapAnything comes at a critical time for brands. Customer Experience is rapidly overtaking price as the leading reason companies win in the market. Leading companies like MillerCoors, Michelin, Unilever, Synchrony Financial and Mohawk Industries have all seen how location-enabled field sales and service professionals can focus on the right activities against the right customers, improving their productivity, and allowing them to provide value in every interaction,” company co-founder and CEO John Stewart wrote in a blog post announcing the deal.

MapAnything boasts 1900 customers in total, and that is likely to grow substantially once it officially becomes part of the Salesforce family later this year.

MapAnything was founded in 2009, so it’s been around long enough to raise over $84 million, according to Crunchbase. Last year, we covered the company’s $33.1 million Series B round, which was led by Columbus Nova.

At the time of the funding CEO John Stewart told me that his company’s products present location data more logically on a map instead of in a table. ‘“Our Core product helps users (most often field-based sales or service workers) visualize their data on a map, interact with it to drive productivity, and then use geolocation services like our mobile app or complex routing to determine the right cadence to meet them,” Stewart told me last year.

It raised an additional $42.5 million last November. Investors included General Motors Ventures and (unsurprisingly) Salesforce Ventures.

Posted Under: Tech News
Google Cloud brings on 27-year SAP veteran as it doubles down on enterprise adoption

Posted by on 17 April, 2019

This post was originally published on this site

Thomas Kurian, the newly-minted CEO of Google Cloud, used the company’s Cloud Next conference last week to lay out his vision for the future of Google’s cloud computing platform. That vision involves, in part, a hiring spree to give businesses that want to work with Google more people to talk to and get help from. Unsurprisingly, Kurian is also looking to put his stamp on the executive team, too, and today announced that former SAP executive Robert Enslin is joining Google Cloud as its new President of Global Customer Operations.

Enslin’s hire is another clear signal that Kurian is focused on enterprise customers. Enslin, after all, is a veteran of the enterprise business, with 27 years at SAP, where he served on the company’s executive board until he announced his resignation from the company earlier this month. After leading various parts of SAP, including as president of its cloud product portfolio, president of SAP North America and CEO of SAP Japan, Enslin announced that he had “a few more aspirations to fulfill.” Those aspirations, we now know, include helping Google Cloud expand its lineup of enterprise customers.

“Rob brings great international experience to his role having worked in South Africa, Europe, Asia and the United States—this global perspective will be invaluable as we expand Google Cloud into established industries and growth markets around the world,” Kurian writes in today’s announcement.

For the last two years, Google Cloud already had a President of Global Customer Operations, though, in the form of Paul-Henri Ferrand, a former Dell exec who was brought on by Google Cloud’s former CEO Diane Greene . Kurian says that Ferrand “has decided to take on a new challenge within Google.”

 

Posted Under: Tech News
The Exit: an AI startup’s McPivot

Posted by on 17 April, 2019

This post was originally published on this site

Five years ago, Dynamic Yield was courting an investment from The New York Times as it looked to shift how publishers paywalled their content. Last month, Chicago-based fast food king McDonald’s bought the Israeli company for $300 million, a source told TechCrunch, with the purpose of rethinking how people order drive-thru chicken nuggets.

The pivot from courting the grey lady to the golden arches isn’t as drastic as it sounds. In a lot of ways, it’s the result of the company learning to say “no” to certain customers. At least, that’s what Bessemer’s Adam Fisher tells us.

The Exit is a new series at TechCrunch. It’s an exit interview of sorts with a VC who was in the right place at the right time but made the right call on an investment that paid off. 

Fisher

Fisher was Dynamic Yield founder Liad Agmon’s first call when he started looking for funds from institutional investors. Bessemer bankrolled the bulk of a $1.7 million funding round which valued the startup at $5 million pre-money back in 2013. The firm ended up putting about $15 million into Dynamic Yield, which raised ~$85 million in total from backers including Marker Capital, Union Tech Ventures, Baidu and The New York Times.

Fisher and I chatted at length about the company’s challenging rise and how Israel’s tech scene is still being underestimated. Fisher has 11 years at Bessemer under his belt and 14 exits including Wix, Intucell, Ravello and Leaba.

The interview has been edited for length and clarity. 


Saying “No”

Lucas Matney: So, right off the bat, how exactly did this tool initially built for publishers end up becoming something that McDonalds wanted?

Adam Fisher: I mean, the story of Dynamic Yield is unique. Liad, the founder and CEO, he was an entrepreneur in residence in our Herzliya office back in 2011. I’d identified him earlier from his previous company, and I just said, ‘Well, that’s the kind of guy I’d love to work with.’ I didn’t like his previous company, but there was something about his charisma, his technology background, his youth, which I just felt like “Wow, he’s going to do something interesting.” And so when he sold his previous company, coincidentally to another Chicago based company called Sears, I invited him and I think he found it very flattering, so he joined us as an EIR.

Posted Under: Tech News
Airbase launches with $7M Series A to simplify spending control systems

Posted by on 17 April, 2019

This post was originally published on this site

Airbase is a startup with a plan to change the way you think about accounting around spending. Instead of multiple workflows, it wants to create a simpler one involving, well, Airbase. It’s a bold move for any startup to take on something as entrenched as financials, but it’s giving it a shot, and today the company launched with a $7 million Series A investment.

First Round Capital was lead investor. Maynard Webb, Village Global, BoxGroup and Quiet Capital also participated. The deal closed at the end of November last year. This is the first external funding for the company, which company founder and CEO, Thejo Kote had bootstrapped previously with $300,000 of his own money.

“At a high level, Airbase is the first all-in-one spend management system. It replaces a number of different systems that companies use to manage how they spend money,” Kote told TechCrunch.

He knows of what he speaks. Prior to starting this company, Kote co-founded Automatic, a startup that he sold to SiriusXM for more than $100 million in 2017. As a founder, he saw just how difficult it was to track the vast variety of spending inside a company from supplies to subscriptions to food and drink.

“Think about the hundreds of things that companies spend money on, and the way in which the management of that happens is a pretty broken process today,” he said. For starters, it usually involves some sort of approval request in a tool like Slack, Jira or Google forms.

Once approved, the person requesting the expense will put that on a company credit card, then have to submit expense reports at the end of each month using a tool like Expensify. If you purchase from vendor, then that involves an invoice and that has to be processed and paid. Finally it would need to be reconciled and accounted for in accounting software. Each step of this process ends up being time-consuming and costly for an organization.

Kote’s idea was to take this process and streamline it by removing the friction, which he saw as being related to the disparate systems in place to get the work done. He believed by creating a single workflow on a unified, single platform he could create a smoother system for everyone involved.

He is putting that single system in between the bank and the accounting system including a virtual Airbase Visa card to take the place of physical cards. Request for spending happens inside Airbase instead of an external tool. When the virtual card gets charged, bookkeeping and reconciliation gets handled in Airbase and pushed to your accounting package of choice.

Airbase workflow. Diagram: Airbase

This could be a difficult proposition for companies with existing systems in place, but could be attractive to startups and small companies whose accounting systems have not yet hardened. Perhaps that’s why most of Airbase’s customers are startups or SMBs with between 500 and 5000 employees, such as Gusto, Netlify and Segment.

Bill Trenchard, General Partner at lead investor First Round Capital says he has seen very little innovation in this space and that’s what drew him to Airbase. “Airbase has taken a bold step forward to create an entirely new paradigm. It delivers a real solution to the biggest problems finance teams face as their companies grow,” Trenchard said in a statement.

The company was founded in 2017 and has 22 employees today. It has a sales office in San Francisco, but other employees are spread across four countries.

Posted Under: Tech News
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