All posts by Richy George

Payments giant Stripe debuts a credit card in its latest step into the financing fray

Posted by on 10 September, 2019

This post was originally published on this site

Last week, when the popular payments startup Stripe made some waves with its first move into money lending through the launch of Stripe Capital, we reported that the company was also soon going to be launching a credit card. Now, that news is official. Today, the company is doubling down on financing with the launch of corporate cards for business customers.

Announced officially today to coincide with the company’s developer event Stripe Sessions, the Stripe Corporate Card — as the product is officially called — is a Visa that will be open to businesses that are incorporated in the US, although they can operate elsewhere.

Notably, users are expected to pay their balance in full each month, so for now there is no interest rate, or fee, to use the card, with Stripe making its money by way of the interchange fee that comes with every transaction using the card.

“We’re not freezing cards based on late or no payments,” Cristina Cordova, the business lead overseeing the launch, said in an interview. “A pretty common reason for non-payment is that a person switched bank accounts and forgot to update the information. But we think we’ll have fewer problems because we have banking information for accepting revenue, by way of our payments business.”

The move is another major step ahead for Stripe as it continues to diversify its business and bring on more financial products to become a one-stop shop for e-commerce and other companies for all the transactions they might need to make in the course of their lives. It is a little ironic that it’s taken years for credit cards to get added into the mix, considering Stripe’s earliest homepages and marketing efforts were built around the design of a credit card (a reference to taking payments online, not issuing credit, of course).

In any case, the list of products now offered by Stripe is long — longer, you might say, than it takes to incorporate a Stripe service into a developer workflow. In addition to its API-based flagship payments product — which is available as a direct service or, via Stripe Connect, for third parties via marketplaces and other platforms — it offers billing and invoicing, in-person payment services (via Terminal), business analytics, fraud prevention on transactions (Radar), company incorporation (Atlas), and a range of content around business strategy.

Some of these Stripe products are free to use, and some come at a price: the main point for offering them together is to build more engagement and loyalty from customers to keep them from migrating to other services. In that regard, credit cards are a cornerstone of how businesses operate, to handle day-to-day expenses in a more accountable way, and this is an area that is already well-served by others, including startups like Brex but also a plethora of challenger and traditional banks. So as much as anything else, this is a clear move to help stave off competition.

At the same time, it underscores how Stripe is leveraging the huge amount of data that it has amassed about its users and payments on the platform: it’s not just about enabling single services, but about using the byproducts of those services — data — to put fuel into new products.

Today, to underscore its global ambitions in that regard, Stripe is adding some expansions to several of its existing products. For example, it will now allow businesses to make payouts in local currencies in 45 countries (an important detail, for example, for marketplaces and network-based companies like ridesharing businesses).

The credit card product will follow a model similar to that of Stripe Capital. As with the lending product, there is a single bank issuing the credit and the card. Amber Feng, head of financial infrastructure for Stripe, confirmed to me that it is actually the same bank that’s providing the cash behind Stripe Capital. Stripe is still declining to name the bank itself, but hints that we may hear more about it soon, which leads me to wonder what news might be coming next.

(Funding perhaps would make sense? The company has raised a whopping $785 million to date and has a valuation of $22.5 billion at the moment. Given that Stripe has made indications that a public listing is not on the cards soon, that might imply, with the launch of these new financing products, that more capital might be raised soon.)

Also similar to Stripe Capital, the underwriting of the card is based on Stripe data. That is to say, business users are verified and approved based on turnover (revenues) as measured by the Stripe payments platform itself; and in cases where applicants are “pre-revenue”, they can be evaluated based on other data sources. For example, if they have used Stripe Atlas to incorporate their businesses, the paperwork supplied for that is used by Stripe to vet the customer’s suitability for a credit card.  

Notably, the cards will be delivered in the spirit of instant gratification: if you are applying and get approved, you can download a virtual card within minutes to your Apple Wallet as you await the physical card to arrive in the post.

Stripe is big on data in its own business, and it’s bringing some of that into this product with spending controls that can be set by person and by category; real-time expense reporting by way of texts; rewards of 2% back on spending in the business’s most-used categories; and integration with financial software like Quickbooks and Expensify.

Posted Under: Tech News
Work Life Ventures raises $5M for debut enterprise SaaS seed fund

Posted by on 10 September, 2019

This post was originally published on this site

Brianne Kimmel had no trouble transitioning from angel investor to general partner.

Initially setting out to garner $3 million in capital commitments, Kimmel, in just two weeks’ time, closed on $5 million for her debut venture capital fund Work Life Ventures. The enterprise SaaS-focused vehicle boasts an impressive roster of limited partners, too, including the likes of Zoom chief executive officer Eric Yuan, InVision CEO Clark Valberg, Twitch co-founder Kevin Lin, Cameo CEO Steven Galanis, Andreessen Horowitz general partners’ Marc Andreessen and Chris Dixon, Initialized Capital GP Garry Tan and fund-of-funds Slow Ventures, Felicis Ventures and NFX.

At the helm of the new fund, Kimmel joins a small group of solo female general partners. Dream Machine’s Alexia Bonatsos is targeting $25 million for her first fund. Day One Ventures’ Masha Drokova raised an undisclosed amount for her debut effort last year. Sarah Cone launched Social Impact Capital, a fund specializing in impact investing, in 2016, among others.

Meanwhile, venture capital fundraising is poised to reach all-time highs in 2019. In the first half of the year, a total of $20.6 billion in new capital was introduced to the startup market across more than 100 funds.

For most, the process of raising a successful venture fund can be daunting and difficult. For well-connected and established investors in the Bay Area, like Kimmel, raising a fund can be relatively seamless. Given the speed and ease of fund one in Kimmel’s case, she plans to raise her second fund with a $25 million target in as little as 12 months.

“The desire for the fund is to take a step back and imagine how do we build great consumer experiences in the workplace,” Kimmel tells TechCrunch.

Kimmel has been an active angel investor for years, sourcing top enterprise deals via SaaS School, an invite-only workshop she created to educate early-stage SaaS founders on SaaS growth, monetization, sales and customer success. Prior to launching SaaS School, which will continue to run twice a year, Kimmel led go-to-market strategy at Zendesk, where she built the Zendesk for Startups program.

 

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“You start by advising, then you start with very small angel checks,” Kimmel explains. “I reached this inflection point and it felt like a great moment to raise my own fund. I had friends like Ryan Hoover, who started Weekend Fund focused on consumer, and Alexia is one of my friends as well and I saw what she was doing with Dream Machine, which is also consumer. It felt like it was the right time to come out with a SaaS-focused fund.”

Emerging from stealth today, Work Life Ventures will invest up to $150,000 per company. To date, Kimmel has backed three companies with capital from the fund: Tandem, Dover and Command E. The first, Tandem, was amongst the most coveted deals in Y Combinator’s latest batch of companies. The startup graduated from the accelerator with millions from Andreessen Horowitz at a valuation north of $30 million.

Dover, another recent YC alum, provides recruitment software and is said to be backed by Founders Fund in addition to Work Life. Command E, currently in beta, is a tool that facilities search across multiple desktop applications. Kimmel is also an angel investor in Webflow, Girlboss, TechCrunch Disrupt 2018 Startup Battlefield winner Forethought, Voyage and others.

Work Life is betting on the consumerization of the enterprise, or the idea that the next best companies for modern workers will be consumer-friendly tools. In her pitch deck to LPs, she cites the success of Superhuman and Notion, a well-designed email tool and a note-taking app, respectively, as examples of the heightened demand for digestible, easy-to-use B2B products.

“The next generation of applications for the workplace sees people spinning out of Uber, Coinbase and Airbnb,” Kimmel said. “They’ve faced these challenges inside their highly efficient tech company so we are seeing more consumer product builders deeply passionate about the enterprise space.”

But Kimmel doesn’t want to bury her thesis in jargon, she says, so you won’t find any B2B lingo on Work Life’s website or Instagram.

She’s focusing her efforts on a more important issue often vacant from conversations surrounding investment in the future of work: diversity & inclusion.

Kimmel meets with every new female hire of her portfolio companies. Though it’s “increasingly non-scalable,” she admits, it’s part of a greater effort to ensure her companies are thoughtful about D&I from the beginning: “Because I have a very focused fund, it’s about maintaining this community and ensuring that people feel like their voices are heard,” she said.

“I want to be mindful that I am a female GP and I feel honored to have that title.”

Posted Under: Tech News
New investment firm wants to change the way we fund early stage companies — from New Hampshire

Posted by on 10 September, 2019

This post was originally published on this site

The three founders of York IE have a vision about how to change the way early stage startups get funding. They have experience shattering norms, having built a successful startup, Dyn, in Manchester, New Hampshire, which is not exactly a hot-bed of startup activity.

The founders want to take that same spirit and apply it to investing, while maintaining its headquarters in New Hampshire (and Boston). In fact, the three founders — Kyle York, Joe Raczka and Adam Coughlin — launched Dyn and built it to $30 million in ARR before taking a dime in venture funding. They went onto raise $88 million before being acquired by Oracle in 2016. They believe they can apply the lessons that they learned to other early stage startups.

“We think, especially in B2B and SaaS, there is a way to build a scalable, effective and efficient business without chasing massive fund raises, diluting your company, bringing on traditional venture investors and chasing those kind of on-paper vanity metrics,” company CEO and co-founder Kyle York told TechCrunch.

For the past five years, while working at Oracle after the acquisition, the founders have been testing their theories while advising startups and acting as angel investors. They believed it was time to take all of those learnings and apply it to their own firm.

“I started thinking about how to transition out of Oracle, and what I wanted to do from a career perspective and we wanted to build a modern investment firm less focused on how to deploy as much capital as possible for the limited partners, and more on working with the entrepreneurs to help coach them on a path to success,” York said.

The company still wants to act as investors, and to make money along the way, but they want to help build more solid, grounded companies. York says that they want the founders truly understand that they are selling a part of their company in exchange for those dollars, and that it makes sense to have a strong foundation before taking on money.

York wants to change this culture of fund raising for fund raising’s sake. He acknowledges that some companies with deep tech or deep infrastructure require that kind of substantial up-front investment to get off the ground, but SaaS companies are supposed to be able to take advantage of modern technology to build companies more easily, and he wants to see them build solid companies first and foremost.

“The goal shouldn’t be to raise more capital. The goal should be to build a healthy successful, scalable company,” he said.

To put their money where their mouth is, the new firm will not take management fees. “We are investing like a normal investor and coming through with an equity position, but we are betting on the future. In essence, if the startup wins, then we win.”

Posted Under: Tech News
Snyk grabs $70M more to detect security vulnerabilities in open source code and containers

Posted by on 10 September, 2019

This post was originally published on this site

A growing number of IT breaches has led to security becoming a critical and central aspect of how computing systems are run and maintained. Today, a startup that focuses on one specific area — developing security tools aimed at developers and the work they do — has closed a major funding round that underscores the growth of that area.

Snyk — a London and Boston-based company that got its start identifying and developing security solutions for developers working on open source code — is today announcing that it has raised $70 million, funding that it will be using to continue expanding its capabilities and overall business. For example, the company has more recently expanded to building security solutions to help developers identify and fix vulnerabilities around containers, an increasingly standard unit of software used to package up and run code across different computing environments.

Open source — Snyk works as an integration into existing developer workflows, compatible with the likes of GitHub, Bitbucket and GitLab, as well as CI/CD pipelines — was an easy target to hit. It’s used in 95% of all enterprises, with up to 77% of open source components liable to have vulnerabilities, by Snyk’s estimates. Containers are a different issue.

“The security concerns around containers are almost more about ownership than technology,” Guy Podjarny, the president who co-founded the company with Assaf Hefetz and Danny Grander, explained in an interview. “They are in a twilight zone between infrastructure and code. They look like virtual machines and suffer many of same concerns such as being unpatched or having permissions that are too permissive.”

While containers are present in fewer than 30% of computing environments today, their growth is on the rise, according to Gartner, which forecasts that by 2022, over 75% of global organizations will run containerized applications. Snyk estimates that a full 44% of Docker image scans (Docker being one of the major container vendors) have known vulnerabilities.

This latest round is being led by Accel with participation from existing investors GV and Boldstart Ventures. These three, along with a fourth investor (Heavybit) also put $22 million into the company as recently as September 2018. That round was made at a valuation of $100 million, and from what we understand from a source close to the startup, it’s now in the “range” of $500 million.

“Accel has a long history in the security market and we believe Snyk is bringing a truly unique, developer-first approach to security in the enterprise,” said Matt Weigand of Accel said in a statement. “The strength of Snyk’s customer base, rapidly growing free user community, leadership team and innovative product development prove the company is ready for this next exciting phase of growth and execution.”

Indeed, the company has hit some big milestones in the last year that could explain that hike. It now has some 300,000 developers using it around the globe, with its customer base growing some 200 percent this year and including the likes of Google, Microsoft, Salesforce and ASOS (sidenote: you know that if developers at developer-centric places themselves working at the vanguard of computing, like Google and Microsoft, are using your product, that is a good sign). Notably, that has largely come by word of mouth — inbound interest.

The company in July of this year took on a new CEO, Peter McKay, who replaced Podjarny. McKay was the company’s first investor and has a track record in helping to grow large enterprise security businesses, a sign of the trajectory that Snyk is hoping to follow.

“Today, every business, from manufacturing to retail and finance, is becoming a software business,” said McKay. “There is an immediate and fast growing need for software security solutions that scale at the same pace as software development. This investment helps us continue to bring Snyk’s product-led and developer-focused solutions to more companies across the globe, helping them stay secure as they embrace digital innovation – without slowing down.”

 

Posted Under: Tech News
Q-CTRL raises $15M for software that reduces error and noise in quantum computing hardware

Posted by on 10 September, 2019

This post was originally published on this site

As hardware makers continue to work on ways of making wide-scale quantum computing a reality, a startup out of Australia that is building software to help reduce noise and errors on quantum computing machines has raised a round of funding to fuel its U.S. expansion.

Q-CTRL is designing firmware for computers and other machines (such as quantum sensors) that perform quantum calculations to identify the potential for errors, making them more resistant and able to stay working for longer (the Q in its name is a reference to qubits, the basic building block of quantum computing). The startup is today announcing that it has raised $15 million, money that it plans to use to double its team (currently numbering 25) and set up shop on the West Coast, specifically Los Angeles.

This Series A is coming from a list of backers that speaks to the startup’s success to date in courting quantum hardware companies as customers. Led by Square Peg Capital — a prolific Australian VC that has backed homegrown startups like Bugcrowd and Canva, but also those further afield such as Stripe — it also includes new investor Sierra Ventures as well as Sequoia Capital, Main Sequence Ventures, and Horizons Ventures.

Q-CTRL’s customers are some of the bigger names in quantum computing and IT such as Rigetti, Bleximo and Accenture, among others. IBM — which earlier this year unveiled its first commercial quantum computer — singled it out last year for its work in advancing quantum technology.

The problem that Q-CTRL is aiming to address is basic but arguably critical to solving if quantum computing ever hopes to make the leap out of the lab and into wider use in the real world.

Quantum computers and other machines like quantum sensors, which are built on quantum physics architecture, are able to perform computations that go well beyond what can be done by normal computers today, with the applications for such technology including cryptography, biosciences, advanced geological exploration and much more. But quantum computing machines are known to be unstable, in part because of the fragility of the quantum state, which introduces a lot of noise and subsequent errors.

As Frederic pointed out recently, scientists are confident that this is ultimately a solvable issue. Q-CTRL is one of the hopefuls working on that, by providing a set of tools that runs on quantum machines, visualises noise and decoherence, and then deploys controls to “defeat” those errors.

Q-CTRL currently has four products it offers to the market, Black Opal, Boulder Opal, Open Controls and Devkit — aimed respectively at students/those exploring quantum computing, hardware makers, the research community, and end users/algorithm developers.

Q-CTRL was founded in 2017 by Michael Biercuk, a Professor of Quantum Physics & Quantum Technology at the University of Sydney and a Chief Investigator in the Australian Research Council Centre of Excellence for Engineered Quantum Systems, who studied in the U.S., with a PhD in physics from Harvard.

“Being at the vanguard of the birth of a new industry is extraordinary,” he said in a statement. “We’re also thrilled to be assembling one of the most impressive investor syndicates in quantum technology. Finding investors who understand and embrace both the promise and the challenge of building quantum computers is almost magical.”

Why choose Los Angeles for building out a U.S. presence, you might ask? Southern California, it turns out, has shaped up to be a key area for quantum research and development, with several of the universities in the region building out labs dedicated to the area, and companies like Lockheed Martin and Google also contributing to the ecosystem. This means a strong pipeline of talent and conversation in what is still a nascent area.

Given that it is still early days for quantum computing technology, that gives a lot of potential options to a company  like Q-CTRL longer-term: the company might continue to build a business as it does today, selling its technology to a plethora of hardware makers and researchers in the field; or it might get snapped up by a specific hardware company to integrate Q-CTRL’s solutions more closely onto its machines (and keep them away from competitors). Or, it could make like a quantum particle and follow both of those paths at the same time.

“Q-CTRL impressed us with their strategy; by providing infrastructure software to improve quantum computers for R&D teams and end-users, they’re able to be a central player in bringing this technology to reality,” said Tushar Roy, a partner at Square Peg. “Their technology also has applications beyond quantum computing, including in quantum-based sensing, which is a rapidly-growing market. In Q-CTRL we found a rare combination of world-leading technical expertise with an understanding of customers, products and what it takes to build an impactful business.”

Posted Under: Tech News
Latest Adobe tool helps marketers work directly with customer journey data

Posted by on 10 September, 2019

This post was originally published on this site

Adobe has a lot going on with Analytics and the Customer Experience Platform, a place to gather data to understand customers better. Today, it announced a new analytics tool that enables employees to work directly with customer journey data to help deliver a better customer experience.

The customer journey involves a lot of different systems from a company data lake to CRM to point of sale. This tool pulls all of that data together from across multiple systems and various channels and brings it into the data analysis workspace, announced in July.

Nate Smith, group manager for product marketing for Adobe Analytics, says the idea is to give access to this data in a standard way across the organization, whether it’s a data scientist, an analyst with SQL skills or a marketing pro simply looking for insight.

“When you think about organizations that are trying to do omni-channel analysis or trying to get that next channel of data in, they now have the platform to do that, where the data can come in and we standardize it on an academic model,” he said. They then layer this ability to continuously query the data in a visual way to get additional insight they might not have seen.

Adobe screenshot 1

Screenshot: Adobe

Adobe is trying to be as flexible as possible in every step of the process, and openness was a guiding principle here, Smith said. That means that data can come from any source, and users can visualize it using Adobe tools or an external tool like Tableau or Looker. What’s more, they can get data in or out as needed, or even use your their own models, Smith said.

“We recognize that as much as we’d love to have everyone go all in on the Adobe stack, we understand that there is existing significant investment in other tech and that integration and interoperability really needs to happen, as well,” he said.

Ultimately this is about giving marketers access to a full picture of the customer data to deliver the best experience possible based on what you know about them. “Being able to have insight and engagement points to help with the moments that matter and provide great experience is really what we’re aiming to do with this,” he said.

This product will be generally available next month.

Posted Under: Tech News
With its Kubernetes bet paying off, Cloud Foundry doubles down on developer experience

Posted by on 9 September, 2019

This post was originally published on this site

More than 50% of the Fortune 500 companies are now using the open-source Cloud Foundry Platform-as-a-Service project — either directly or through vendors like Pivotal — to build, test and deploy their applications. Like so many other projects, including the likes of OpenStack, Cloud Foundry went through a bit of a transition in recent years as more and more developers started looking to containers — and especially the Kubernetes project — as a platform to develop on. Now, however, the project is ready to focus on what always differentiated it from its closed- and open-source competitors: the developer experience.

Long before Docker popularized containers for application deployment, though, Cloud Foundry had already bet on containers and written its own orchestration service, for example. With all of the momentum behind Kubernetes, though, it’s no surprise that many in the Cloud Foundry started to look at this new project to replace the existing container technology.

Posted Under: Tech News
Spendesk raises $38.4 million for its corporate card and expense service

Posted by on 9 September, 2019

This post was originally published on this site

French startup Spendesk has raised another $38.4 million Series B round with existing investor Index Ventures leading the round. The company has raised $49.4 million (€45 million) over the years.

Spendesk is an all-in-one corporate expense and spend management service. It lets you track expenses across your company, empower your employees with a clear approval process and simplify your bookkeeping.

The service essentially works like Revolut or N26, but for corporate needs. After you sign up, you get your own Spendesk account with an IBAN. You can top up that account and define different sets of policies.

For instance, you can set payment limits depending on everyone’s job and define who’s in charge of approving expensive payments. After that, everyone can generate virtual cards for online payments and get a physical card for business travel.

When you’re on the road, you can pay directly using Spendesk just like any corporate card. If you have to pay in cash or with another card, you can take a photo of the receipt from the Spendesk mobile app and get your money back.

Many Spendesk users also leverage the service for other use cases. For instance, you can define a marketing budget and let the marketing team spend it on Facebook or Google ads using a virtual card.

You can also track all your online subscriptions from the Spendesk interface to make sure that you don’t pay for similar tools. If you hire freelancers, you can also upload all your invoices to the platform, export an XML with your outstanding invoices and import it to your banking portal.

Spendesk tries to be smarter than legacy expense solutions. For instance, the company tries to leverage optical character recognition (OCR) to match receipts with payments, autofill the VAT rate, etc.

With today’s funding round, the company plans to open offices in Berlin and London, add more currencies and develop new features. Over the past year, the company went from 20 employees to 120 employees. There are now 1,500 companies using Spendesk in Europe.

Posted Under: Tech News
APIs are the next big SaaS wave

Posted by on 6 September, 2019

This post was originally published on this site

While the software revolution started out slowly, over the past few years it’s exploded and the fastest-growing segment to-date has been the shift towards software as a service or SaaS.

SaaS has dramatically lowered the intrinsic total cost of ownership for adopting software, solved scaling challenges and taken away the burden of issues with local hardware. In short, it has allowed a business to focus primarily on just that — its business — while simultaneously reducing the burden of IT operations.

Today, SaaS adoption is increasingly ubiquitous. According to IDG’s 2018 Cloud Computing Survey, 73% of organizations have at least one application or a portion of their computing infrastructure already in the cloud. While this software explosion has created a whole range of downstream impacts, it has also caused software developers to become more and more valuable.

The increasing value of developers has meant that, like traditional SaaS buyers before them, they also better intuit the value of their time and increasingly prefer businesses that can help alleviate the hassles of procurement, integration, management, and operations. Developer needs to address those hassles are specialized.

They are looking to deeply integrate products into their own applications and to do so, they need access to an Application Programming Interface, or API. Best practices for API onboarding include technical documentation, examples, and sandbox environments to test.

APIs tend to also offer metered billing upfront. For these and other reasons, APIs are a distinct subset of SaaS.

For fast-moving developers building on a global-scale, APIs are no longer a stop-gap to the future—they’re a critical part of their strategy. Why would you dedicate precious resources to recreating something in-house that’s done better elsewhere when you can instead focus your efforts on creating a differentiated product?

Thanks to this mindset shift, APIs are on track to create another SaaS-sized impact across all industries and at a much faster pace. By exposing often complex services as simplified code, API-first products are far more extensible, easier for customers to integrate into, and have the ability to foster a greater community around potential use cases.

Screen Shot 2019 09 06 at 10.40.51 AM

Graphics courtesy of Accel

Billion-dollar businesses building APIs

Whether you realize it or not, chances are that your favorite consumer and enterprise apps—Uber, Airbnb, PayPal, and countless more—have a number of third-party APIs and developer services running in the background. Just like most modern enterprises have invested in SaaS technologies for all the above reasons, many of today’s multi-billion dollar companies have built their businesses on the backs of these scalable developer services that let them abstract everything from SMS and email to payments, location-based data, search and more.

Simultaneously, the entrepreneurs behind these API-first companies like Twilio, Segment, Scale and many others are building sustainable, independent—and big—businesses.

Valued today at over $22 billion, Stripe is the biggest independent API-first company. Stripe took off because of its initial laser-focus on the developer experience setting up and taking payments. It was even initially known as /dev/payments!

Stripe spent extra time building the right, idiomatic SDKs for each language platform and beautiful documentation. But it wasn’t just those things, they rebuilt an entire business process around being API-first.

Companies using Stripe didn’t need to fill out a PDF and set up a separate merchant account before getting started. Once sign-up was complete, users could immediately test the API with a sandbox and integrate it directly into their application. Even pricing was different.

Stripe chose to simplify pricing dramatically by starting with a single, simple price for all cards and not breaking out cards by type even though the costs for AmEx cards versus Visa can differ. Stripe also did away with a monthly minimum fee that competitors had.

Many competitors used the monthly minimum to offset the high cost of support for new customers who weren’t necessarily processing payments yet. Stripe flipped that on its head. Developers integrate Stripe earlier than they integrated payments before, and while it costs Stripe a lot in setup and support costs, it pays off in brand and loyalty.

Checkr is another excellent example of an API-first company vastly simplifying a massive yet slow-moving industry. Very little had changed over the last few decades in how businesses ran background checks on their employees and contractors, involving manual paperwork and the help of 3rd party services that spent days verifying an individual.

Checkr’s API gives companies immediate access to a variety of disparate verification sources and allows these companies to plug Checkr into their existing on-boarding and HR workflows. It’s used today by more than 10,000 businesses including Uber, Instacart, Zenefits and more.

Like Checkr and Stripe, Plaid provides a similar value prop to applications in need of banking data and connections, abstracting away banking relationships and complexities brought upon by a lack of tech in a category dominated by hundred-year-old banks. Plaid has shown an incredible ramp these past three years, from closing a $12 million Series A in 2015 to reaching a valuation over $2.5 billion this year.

Today the company is fueling an entire generation of financial applications, all on the back of their well-built API.

Screen Shot 2019 09 06 at 10.41.02 AM

Graphics courtesy of Accel

Then and now

Accel’s first API investment was in Braintree, a mobile and web payment systems for e-commerce companies, in 2011. Braintree eventually sold to, and became an integral part of, PayPal as it spun out from eBay and grew to be worth more than $100 billion. Unsurprisingly, it was shortly thereafter that our team decided to it was time to go big on the category. By the end of 2014 we had led the Series As in Segment and Checkr and followed those investments with our first APX conference in 2015.

Plaid, Segment, Auth0, and Checkr had only raised Seed or Series A financings! And we are even more excited and bullish on the space. To convey just how much API-first businesses have grown in such a short period of time, we thought it would be useful perspective to share some metrics over the past five years, which we’ve broken out in the two visuals included above in this article.

While SaaS may have pioneered the idea that the best way to do business isn’t to actually build everything in-house, today we’re seeing APIs amplify this theme. At Accel, we firmly believe that APIs are the next big SaaS wave — having as much if not more impact as its predecessor thanks to developers at today’s fastest-growing startups and their preference for API-first products. We’ve actively continued to invest in the space (in companies like, Scale, mentioned above).

And much like how a robust ecosystem developed around SaaS, we believe that one will continue to develop around APIs. Given the amount of progress that has happened in just a few short years, Accel is hosting our second APX conference to once again bring together this remarkable community and continue to facilitate discussion and innovation.

Screen Shot 2019 09 06 at 10.41.10 AM

Graphics courtesy of Accel

Posted Under: Tech News
Top VCs on the changing landscape for enterprise startups

Posted by on 6 September, 2019

This post was originally published on this site

Yesterday at TechCrunch’s Enterprise event in San Francisco, we sat down with three venture capitalists who spend a lot of their time thinking about enterprise startups. We wanted to ask what trends they are seeing, what concerns they might have about the state of the market, and of course, how startups might persuade them to write out a check.

We covered a lot of ground with the investors — Jason Green of Emergence Capital, Rebecca Lynn of Canvas Ventures, and Maha Ibrahim of Canaan Partners — who told us, among other things, that startups shouldn’t expect a big M&A event right now, that there’s no first-mover advantage in the enterprise realm, and why grit may be the quality that ends up keeping a startup afloat.

On the growth of enterprise startups:

Jason Green: When we started Emergence 15 years ago, we saw maybe a few hundred startups a year, and we funded about five or six. Today, we see over 1,000 a year; we probably do deep diligence on 25.

Posted Under: Tech News
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