Category Archives: Tech News

Enterprise AI 2.0: the acceleration of B2B innovation has begun

Posted by on 4 August, 2021

This post was originally published on this site

Two decades after businesses first started deploying AI solutions, one can argue that they’ve made little progress in achieving significant gains in efficiency and profitability relative to the hype that drove initial expectations.

On the surface, recent data supports AI skeptics. Almost 90% of data science projects never make it to production; only 20% of analytics insights through 2022 will achieve business outcomes; and even companies that have developed an enterprise-wide AI strategy are seeing failure rates of up to 50%.

But the past 25 years have only been the first phase in the evolution of enterprise AI — or what we might call Enterprise AI 1.0. That’s where many businesses remain today. However, companies on the leading edge of AI innovation have advanced to the next generation, which will define the coming decade of big data, analytics, and automation — Enterprise AI 2.0.

The difference between these two generations of enterprise AI is not academic. For executives across the business spectrum — from health care and retail to media and finance — the evolution from 1.0 to 2.0 is a chance to learn and adapt from past failures, create concrete expectations for future uses, and justify the rising investment in AI that we see across industries.

Two decades from now, when business leaders look back to the 2020s, the companies who achieved Enterprise AI 2.0 first will have come to be big winners in the economy, having differentiated their services, scooped up market share, and positioned themselves for ongoing innovation.

Framing the digital transformations of the future as an evolution from Enterprise AI 1.0 to 2.0 provides a conceptual model for business leaders developing strategies to compete in the age of automation and advanced analytics.

Enterprise AI v1.0 (the status quo)

Starting in the mid-1990s, AI was a sector marked by speculative testing, experimental interest and exploration. These activities occurred almost exclusively in the domain of data scientists. As Gartner wrote in a recent report, these efforts were “alchemy…run by wizards whose talents will not scale in the organization.”

Two decades from now, when business leaders look back to the 2020s, the companies who achieved Enterprise AI 2.0 first will have come to be big winners in the economy.

But the data science bottleneck — the need for everything to funnel through a small team of experts — was not the only hurdle to scaling. AI is only as powerful as the data systems it’s plugged into. Many companies experimenting with AI at the time had data spread across silos with inadequate data infrastructure and processes to optimize the technology.

Moreover, early iterations of B2B AI involved complex horizontal “machine learning” platforms focused on model development. Operationalizing these hand-curated models required crossing a deep chasm related to customization and integration with enterprise applications and workflows. These Enterprise 1.0 solutions were cumbersome and clunky to operate yet still required large investments to deploy.

Most initiatives started from the bottom up. Data scientists developed them as exploratory projects focused on speculative use cases largely decoupled from business objectives. Many turned out to be science projects and the failure rates were extraordinarily high.

Work-Bench will continue supporting early stage enterprise startups with new $100M fund

Posted by on 4 August, 2021

This post was originally published on this site

In spite of the pandemic, New York City remains the center of commerce and business, and over the last decade a robust startup community has developed there. Work-Bench, the NYC VC firm that concentrates on early stage enterprise seed investments, announced its $100 million Fund 3 this morning.

The company started back in 2013 when most investment was still concentrated in Silicon Valley, but founders Jonathan Lehr and Jessica Linn believed there was room for a new firm in NYC that concentrated on writing first checks for enterprise startups. The founding team knew IT and believed that with the concentration of Fortune 500 companies in the city, they could build something that took advantage of that proximity.

The bet has paid off in a big way with investments in successful startups like Cockroach Labs, Catalyst, Dialpad and FireHydrant (all companies TechCrunch has covered). Big exits have included UIPath, which went public last year after raising $2 billion, and today has a market cap of $34 billion and CoreOs, which Red Hat acquired for a more modest $250 million in 2018.

Writing in a blog post announcing the new fund, Lehr and Linn said their initial idea has grown far beyond anything they could have hoped for in those early days. “By utilizing our deep corporate network of Fortune 500 customers here in NYC, we can get conviction in companies early on, and before they have the metrics other VC firms require. It’s also through this network of customers that we can land critical early customer logos and through our extensive community events and playbooks that we can enable pivotal knowledge sharing,” the two founders wrote.

Lehr says, even with the pandemic, which could allowed to expand its reach, the company is mostly sticking to its NYC focus with the majority of investments based there. “This may sound ironic, but while businesses went virtual, the pandemic reinforced our focus on New York City. Our city was hit first and hardest by COVID, but despite it all, VC funding activity for local enterprise startups actually increased substantially during the pandemic. Along with that, with so many Fortune 500s in NYC all going through accelerated digital transformation during the pandemic, there was a ton of work to be done and numerous customer opportunities right here in our own backyard,” Lehr said.

He says that the $47 million Fund 2 portfolio was deployed to 70% NYC-based startups, and he predicts that Fund 3 will have a similar composition, if not slightly more concentrated in New York.

The company didn’t just decide to write first checks though, it tried to build the community by offering workspace in their offices where early stage companies could feed off one another (at least until the pandemic came along). The founders have also offered events where various speakers came to their offices, hosting hundreds of events since inception, while going virtual when the pandemic closed down in-person gatherings.

Lehr says as the company deploys Fund 3 money, it is looking for ways to invest in a more diverse group of founders. “Right now, 20% of our portfolio is made up of women founders. While we are proud of that number within an enterprise context, we believe there is so much room for improvement. As we’ve learned, deal flow doesn’t become diverse on its own – you need to make it diverse, which is why we place a huge emphasis on identifying and amplifying the voices of women and diverse founders within our own Investment Committee meetings and across the rest of the VC and enterprise tech community.”

The company will continue to look at enterprise startups, particularly in New York City, as it looks distribute these new funds.

Buildots raises $30M to put eyes on construction sites

Posted by on 4 August, 2021

This post was originally published on this site

One year after raising $16 million, construction technology company Buildots is back to claim another $30 million, this time in Series B funding.

Lightspeed Venture Partners led the round, with participation from previous investors TLV Partners, Future Energy Ventures and Tidhar Construction Group. This gives the company $46 million in total funding, Roy Danon, co-founder and CEO of Buildots, told TechCrunch.

The three-year-old company, with headquarters in Tel Aviv and London, is leveraging artificial intelligence computer vision technology to address construction inefficiencies. Danon said though construction accounts for 13% of the world’s GDP and employs hundreds of millions of people, construction productivity continues to lag, only growing 1% in the past two decades.

Danon spent six months on construction sites talking to workers to understand what was happening and learned that control was one of the areas where efficiency was breaking down. While construction processes would seem similar to manufacturing processes, building to the design or specs didn’t happen often due to different rules and reliance on numerous entities to get their jobs done first, he said.

Buildots’ technology is addressing this gap using AI algorithms to automatically validate images captured by hardhat-mounted 360-degree cameras, detecting immediately any gaps between the original design, scheduling and what is actually happening on the construction site. Project managers can then make better decisions to speed up construction.

“It even finds events where contractors are installing out of place and streamline payments so that information is transparent and clear,” Danon said. “Buildots also creates a collaborative environment and trust by having a single source telling everyone what is going on. There is no more blaming or cutting corners because the system validates that and also makes construction a healthier industry to work in.”

Buildots went after new funding once it was able to show product market fit and was expanding into other countries. The platform is being utilized on major building projects in countries like the U.S., U.K., Germany, Switzerland, Scandinavia and China. To meet demand, Buildots will use the new funding to continue that expansion; double the size of its global team with a focus on sales, marketing and R&D; and grow on the business side. Danon’s aim is “to get to the point where we are the standard for every construction site.” The company is also looking at areas outside construction where its technology would be applicable.

Tal Morgenstern, partner at Lightspeed Venture Partners, said he keeps an eye on graduates of the Israel Defense Forces, where the three Buildots founders came from. However, in the case of this company, Lightspeed actually passed on both the seed and Series A.

Morgenstern admits the decision was a mistake, but at the time, he thought the technology Buildots was trying to build “first, impossible and second, I knew construction was difficult to sell into.” He felt that Buildots, with such a premium product, would have a challenge selling to a low-margin industry that was late to adopt technology in general.

By the time the Series B came round, he said Buildots had solved both of those issues, proving that it works, but also that customers were adopting the technology without much sales and marketing. In addition, other solutions in construction tech were still relying on lasers or people to manually input or tap photos.

“Buildots is seamlessly capturing images and providing a level of insights that is so high, and that is why the company is able to command the price structure they have and are receiving interesting commercial results,” Morgenstern said.

Walking around today’s construction site, Danon said the adoption of technology is enabling Buildots to move quickly to build processes for the industry.

As such, the company saw more than 50% growth quarter over quarter over the past year in three of the countries in which it operates. It is now working with four of the top 10 construction companies in Europe and around the world.

“We did a good job selling remotely, but now we need local offices,” Danon added. “We are also sitting on piles of data from construction sites. We learn from one project to another and want to look for the challenges where data will help make a financial impact. It’s a natural next step for the company.”

 

FullStory raises $103M at a $1.8B valuation to combat rage clicks on websites and apps

Posted by on 4 August, 2021

This post was originally published on this site

Even with all the years of work that have been put into improving how screen-based interfaces work, our experiences with websites, mobile apps, and any other interactive service you might use still often come up short: we can’t find what we want, we’re bombarded with exactly what we don’t need, or the flow is just buggy in one way or another.

Now, FullStory, one of the startups that’s built a platform to identify when all of the above happens and provide suggestions to publishers for fixing it — it’s obsessed enough with the issue that it went so far as to trademark the phrase “Rage Clicks”, the focus of its mission — is announcing a big round of funding, a sign of its success and ambitions to do more.

The Atlanta-based company has closed a Series D round of $103 million, an oversubscribed round that actually was still growing between me interviewing the company and publishing this story (when we talked last week the figure was $100 million). Permira’s growth fund — which has previously invested in other customer experience startups like Klarna and Nexthink — is leading this round, with previous investors Kleiner Perkins, GV, Stripes, Dell Technologies Capital, Salesforce Ventures, and Glynn Capital also participating.

FullStory, which has raised close to $170 million to date, has confirmed that the investment values the company at $1.8 billion.

Scott Voigt, FullStory’s founder and CEO, tells me that FullStory currently has some 3,100 paying customers on its books across verticals like retail, SaaS, finance, and travel (customers include Peloton, the Financial Times, VMware and JetBlue), which collectively are on course to rack up more than 15 billion user sessions this year — working out to 1 trillion interactions involving clicks, navigations, highlights, scrolls, and frustration signals. It says that annual recurring revenue has to date risen by more than 70% year-on-year.

The plan now will be to continue investing in R&D to bring more real-time intelligence into its products, “and pass those insights on to customers,” and also to “move more aggressively into Europe and Asia Pacific,” he added.

FullStory competes with others like Glassbox and Decibel, although it also claims its tools have more presence on websites than its three biggest competitors combined.

Working across different divisions like product, customer success and marketing, and engineering, FullStory uses machine learning algorithms to analyze how people navigate websites and other digital interfaces.

If approved as part of the “consent gate” you might encounter because of, say, GDPR regulations, it then tracks things like when they are clicking in areas excessively over a short period of time because of delays (the so-called “rage clicks”); or when a click leads nowhere because of, for example, a blip in a piece of JavaScript; or when a person is just scrolling or moving their mouse or cursor or finger in a frustrated (fast) way — again with little or no subsequent activity (or activity from the customer ceasing altogether) resulting from it. It doesn’t use — nor does it have plans to — use eye tracking, or anything like sentiment analysis around data that customers put into, say, customer response windows.

FullStory then packages up the insights that it does collect into data streams that can be used with various visualization tools (having Salesforce as a strategic backer is interesting in this regard, given that it owns Tableau), or spreadsheets, or whatever a customer chooses to put them into. While it doesn’t offer direct remediation (perhaps an area it could tackle in the future), it does offer suggestions for alternative actions to fix whatever problems are arising.

Part of what has given FullStory a big boost in recent times (this round is by far the biggest fundraise the company has ever done) is the fact that, in today’s world, digital business has become the centerpiece of all business. Because of Covid-19 and the need for social distancing that have taken away some of the traffic of in-person experiences like going to stores, organizations that have natively or built experiences online are seeing unprecedented amounts of traffic; and they are now joined by organizations that have shifted into digital experiences simply to stay in business.

All of that has contributed to a huge amount of content online, and a big shift in mindset to making it better (and in the most urgent of cases, even more basically, simply usable), and that has resulted in the stars aligning for companies like FullStory.

“The category was so nascent to begin with that we had to explain the concept to customers,” Voigt told me of the company’s early days, where selling meant selling would-be customers on to the very idea of digital experience insights. “But digital experience, in the wake of Covid-19, suddenly mattered more than it ever has before, and the continued amount of inbound interest has been afterburner for us.” He noted that demand is increasing among mid-market and enterprise organizations, and something that has also helped FullStory grow is the general movement of talent in the industry.

“Our customers tend to take their tools with them when they change their jobs,” he said. Those tools include FullStory’s analytics.

The evolution of bringing more AI into the world of basically structuring what might otherwise be unstructured data has been a big boost to the world of analytics, and investors are interested in FullStory because of how it’s taken that trend and grown its business on top of it.

“We are very excited to partner with the FullStory team as they continue to expand and build a truly extraordinary technology brand that improves the digital experience for all stakeholders,” said Alex Melamud, who led the transaction on behalf of Permira Growth, in a statement.

“Traditional analytics have been upended by AI- and ML-enabled approaches that can instantly uncover nuanced patterns and anomalies in customer behavior,” said Bruce Chizen, a senior advisor at Permira, in a statement. “Leveraging both structured and unstructured data, FullStory has rapidly established itself as the market and technology leader in DXI and is now the fastest-growing company in the category and the de facto system of record for all digital experience data.” Chizen is joining the FullStory Board with this round.

Product-led revenue startup Correlated launches with $8.3M seed

Posted by on 4 August, 2021

This post was originally published on this site

Correlated on Wednesday announced it raised $8.3 million in seed funding to launch its product-led growth platform for sales teams.

NextView Ventures led the round and was joined by Harrison Metal, Apollo Projects, Attentive co-founders Brian Long and Andrew Jones, Cockroach Labs co-founder Ben Darnell and Atrium’s Pete Kazanjy. The round includes funding raised last year and more recent follow-on funding from both NextView and Harrison, co-founder and CEO Tim Geisenheimer told TechCrunch.

The New York-based company was founded in 2020 by Geisenheimer and Diana Hsieh, who overlapped at TimescaleDB, and John Pena, who Geisenheimer met at Facet. In their previous roles, they saw a need to connect product data to sales tools.

While at Timescale, Geisenheimer said there were thousands of free users to talk to, and he and Hsieh built a similar version of a product-led growth platform there, but secretly wished there was something more like Correlated available.

What they saw was data across multiple tools being stored manually on spreadsheets so that actionable insights could be generated. The data would quickly become outdated. Add in that the way customers use products now is different. Traditionally, customers would not be able to use a product until they talked to the sales team. Today, customers start using products for free and either get value from it or not, but sales teams don’t have real-time data on their experience.

“Sales needs to know how customers are using the product and the right time for sales to engage based on maturity of the experience,” Geisenheimer said. “That was the missing piece of it and sales teams ended up talking to the wrong people. With Correlated, they can close more deals efficiently.”

Correlated’s technology pulls in product usage data from tools and data warehouses and connects to a management platform like Salesforce or HubSpot, stitching it together into a data graph to show how customers are using a product. For example, within a company of 200 to 500 employees, a salesperson can see the frequency employees logged in and be alerted of when the best opportunity is to make the sale.

The company has a SaaS pricing model and is already working with mid-market companies like Ally, Pulumi, ReadMe and LaunchNotes. To support its launch out of beta, Geisenheimer intends to use the new funding for hiring across functions like engineering and go-to-market. The company has 11 employees currently.

There are other product-led growth platforms out there that raised venture capital funding recently, for example, Endgame, and similarly Geisenheimer said the competition is often in-house product teams building their own systems. Correlated’s differentiator is that it has taken on that task itself and enables customers to quickly see value once they are up-and-running, he added.

David Beisel, co-founder and partner at NextView Ventures, said his firm invests in category stage companies and is currently operating out of its fourth fund, infusing business-to-business SaaS and e-commerce companies. Beisel has known Geisenheimer for nearly a decade now, having met him when NextView invested in one of Geisenheimer’s previous companies, TapCommerce.

“At the end of the day with Tim, he knows sales and the company is selling a product that has a strong founder market fit,” Beisel said. “We are moving toward a world where end-user adoption of software — not the initial engagement — is growing over time. Instead, Correlated empowers that initial sale and account expansion and that will align with where the industry is going.”

 

Marvell nabs Innovium for $1.1B as it delves deeper into cloud ethernet switches

Posted by on 3 August, 2021

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Marvell announced this morning it intends to acquire Innovium for $1.1 billion in an all-stock deal. The startup, which raised over $400 million according to Crunchbase data, makes networking ethernet switches optimized for the cloud.

Marvell president and CEO Matt Murphy sees Innovium as a complementary piece to the $10 billion Inphi acquisition last year, giving the company, which makes copper-based chips, more ways to work across modern cloud data centers.

“Innovium has established itself as a strong cloud data center merchant switch silicon provider with a proven platform, and we look forward to working with their talented team who have a strong track record in the industry for delivering multiple generations of highly successful products,” Marvell CEO Matt Murphy said in a statement.

Innovium founder and CEO Rajiv Khemani, who will remain on as an advisor post-close, told a familiar tale from a startup CEO being acquired, seeing the sale as a way to accelerate more quickly as part of a larger organization than it could on its own. “As we engaged with Marvell, it became clear that our data center optimized portfolio combined with Marvell’s scale, leading technology platform and complementary portfolio, can accelerate our growth and vision of delivering breakthrough switch silicon for the cloud and edge,” he wrote in a company blog post announcing the deal.

The company, which was founded in 2014, raised over $143 million last year on a post money valuation of $1.3 billion, according to Pitchbook data. The question is was this a reasonable deal for the company given that valuation?

No company wants to sell for less than it was last valued by its investors. In some cases, such deals can still be accretive for early backers of the selling concern, but not always. In this case TechCrunch is not privy to all the details of the Innovium cap table and what its later investors may have built into their deals with the company in the form of downside protection; such measures can tilt the value of the sale of company more towards its later and final investors. This is usually managed at the expense of its earlier backers and employees.

Still, the Innovium deal should not be seen as a failure. Building a company that sells for north of $1 billion in equity value is impressive. The deal appears to be slightly smaller in enterprise value terms. In the business world, enterprise value is a useful method of valuing the true cost of an acquisition. In the case of Innovium, a large cash position, what was described as “Innovium cash and exercise proceeds expected at closing of approximately $145 million,” lowered the cost of the transaction to a more modest $955 million in net outlays.

Our general perspective is that the sale is probably not the outcome that Innovium’s backers had hoped for, but that it may still prove lucrative to early workers and early investors, and still works at that lower figure. It’s also notable how in today’s market of mega-rounds and surfeit unicorns, an exit north of the $1 billion mark in equity terms can be viewed as a disappointment in any terms. Innovium is selling for around the price that Facebook paid for Instagram in 2012, a deal that at the time was so large that it dominated technology headlines around the world.

But with so much capital available today, private valuations are soaring and mega deals abound. And recent rounds north of $100 million, much like Innovium’s 2020-era, $143 million round, can set companies up with rich valuations and a narrow path in front of them to beat those heightened expectations.

What likely happened? Perhaps Innovium found itself with more cash than opportunities to spend it; perhaps it simply needed a large partner to help it better sell into its market. With expected revenues of $150 million in Marvell’s fiscal 2023, its next fiscal period, Innovium did not fail to reach scale. It may have simply grown well as a private, independent company, and stalled out after its last round.

Regardless, a billion dollar exit is a billion dollar exit. The deal is expected to close by the end of this year. While both company boards have approved the deal, it still must clear regular closing hurdles including approval by Innovium’s private stock holders.

Salesforce steps into RPA buying Servicetrace and teaming it with Mulesoft

Posted by on 2 August, 2021

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Over the last couple of years, robotic process automation or RPA has been red hot with tons of investor activity and M&A from companies like SAP, IBM and ServiceNow. UIPath had a major IPO in April and has a market cap over $30 billion. I wondered when Salesforce would get involved and today the company dipped its toe into the RPA pool, announcing its intent to buy German RPA company Servicetrace.

Salesforce intends to make Servicetrace part of Mulesoft, the company it bought in 2018 for $6.5 billion. The companies aren’t divulging the purchase price, suggesting it’s a much smaller deal. When Servicetrace is in the fold, it should fit in well with Mulesoft’s API integration, helping to add an automation layer to Mulesoft’s tool kit.

“With the addition of Servicetrace, MuleSoft will be able to deliver a leading unified integration, API management and RPA platform, which will further enrich the Salesforce Customer 360 — empowering organizations to deliver connected experiences from anywhere. The new RPA capabilities will enhance Salesforce’s Einstein Automate solution, enabling end-to-end workflow automation across any system for service, sales, industries, and more,” Mulesoft CEO Brent Hayward wrote in a blog post announcing the deal.

While Einstein, Salesforce’s artificial intelligence layer, gives companies with more modern tooling the ability to automate certain tasks, RPA is suited to more legacy operations, and this acquisition could be another step in helping Salesforce bridge the gap between older on-prem tools and more modern cloud software.

Brent Leary, founder and principal analyst at CRM Essentials says that it brings another dimension to Salesforce’s digital transformation tools. “It didn’t take Salesforce long to move to the next acquisition after closing their biggest purchase with Slack. But automation of processes and workflows fueled by real-time data coming from a growing variety of sources is becoming a key to finding success with digital transformation. And this adds a critical piece to that puzzle for Salesforce/MuleSoft,” he said.

While it feels like Salesforce is joining the market late, in an investor survey we published in May, Laela Sturdy, general partner at CapitalG, told us that we are just skimming the surface so far when it comes to RPA’s potential.

“We’re a long way from needing to think about the space maturing. In fact, RPA adoption is still in its early infancy when you consider its immense potential. Most companies are only now just beginning to explore the numerous use cases that exist across industries. The more enterprises dip their toes into RPA, the more use cases they envision,” Sturdy responded in the survey.

Servicetrace was founded in 2004, long before the notion of RPA even existed. Neither Crunchbase nor PitchBook shows any money raised, but the website suggests a mature company with a rich product set. Customers include Fujitsu, Siemens, Merck and Deutsche Telekom.

Cloud infrastructure market kept growing in Q2 reaching $42B

Posted by on 2 August, 2021

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It’s often said in baseball that a prospect has a high ceiling, reflecting the tremendous potential of a young player with plenty of room to get better. The same could be said for the cloud infrastructure market, which just keeps growing with little sign of slowing down any time soon. The market hit $42 billion in total revenue with all major vendors reporting, up $2 billion from Q1.

Synergy Research reports that the revenue grew at a speedy 39% clip, the fourth consecutive quarter that it has increased. AWS led the way per usual, but Microsoft continued growing at a rapid pace and Google also kept the momentum going.

AWS continues to defy market logic, actually increasing growth by 5% over the previous quarter at 37%, an amazing feat for a company with the market maturity of AWS. That accounted for $14.81 billion in revenue for Amazon’s cloud division, putting it close to a $60 billion run rate, good for a market leading 33% share. While that share has remained fairly steady for a number of years, the revenue continues to grow as the market pie grows ever larger.

Microsoft grew even faster at 51%, and while Microsoft cloud infrastructure data isn’t always easy to nail down, with 20% of market share according to Synergy Research, that puts it at $8.4 billion as it continues to push upward with revenue up from $7.8 billion last quarter.

Google too continued its slow and steady progress under the leadership of Thomas Kurian, leading the growth numbers with a 54% increase in cloud revenue in Q2 on revenue of $4.2 billion, good for 10% market share, the first time Google Cloud has reached double figures in Synergy’s quarterly tracking data. That’s up from $3.5 billion last quarter.

Image Credits: Synergy Research

After the Big 3, Alibaba held steady over Q1 at 6% (but will only report this week) with IBM falling a point from Q1 to 4% as Big Blue continues to struggle in pure infrastructure as it makes the transition to more of a hybrid cloud management player.

John Dinsdale, chief analyst at Synergy, says that the big three are spending big to help fuel this growth. “Amazon, Microsoft and Google in aggregate are typically investing over $25 billion in capex per quarter, much of which is going towards building and equipping their fleet of over 340 hyperscale data centers,” he said in a statement.

Meanwhile Canalys had similar numbers, but saw the overall market slightly higher at $47 billion. Their market share broke down to Amazon with 31%, Microsoft with 22% and Google with 8% of that total number.

Canalys analyst Blake Murray says that part of the reason companies are shifting workloads to the clouds is to help achieve environmental sustainability goals as the cloud vendors are working toward using more renewable energy to run their massive data centers.

“The best practices and technology utilized by these companies will filter to the rest of the industry, while customers will increasingly use cloud services to relieve some of their environmental responsibilities and meet sustainability goals,” Murray said in a statement.

Regardless of whether companies are moving to the cloud to get out of the data center business or because they hope to piggyback on the sustainability efforts of the big 3, companies are continuing a steady march to the cloud. With some estimates of worldwide cloud usage at around 25%, the potential for continued growth remains strong, especially with many markets still untapped outside the U.S.

That bodes well for the big three and for other smaller operators who can find a way to tap into slices of market share that add up to big revenue. “There remains a wealth of opportunity for smaller, more focused cloud providers, but it can be hard to look away from the eye-popping numbers coming out of the big three,” Dinsdale said.

In fact, it’s hard to see the ceiling for these companies any time in the foreseeable future.

Yaydoo secures $20M, aims to simplify B2B collections, payments

Posted by on 2 August, 2021

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It’s no secret that the technology for easy business-to-business payments has not yet caught up to its peer-to-peer counterparts, but Yaydoo thinks it has the answer.

The Mexico City-based B2B software and payments company provides three products, VendorPlace, P-Card and PorCobrar, for managing cash flow, optimizing access to smart liquidity, and connecting small, midsize and large businesses to an ecosystem of digital tools.

Sergio Almaguer, Guillermo Treviño and Roberto Flores founded Yaydoo — the name combines “yay” and “do” to show the happiness of doing something — in 2017. Today, the company announced the close of a $20.4 million Series A round co-led by Base10 Partners and monashees.

Joining them in the round were SoftBank’s Latin America Fund and Leap Global Partners. In total, Yaydoo has raised $21.5 million, Almaguer told TechCrunch.

Prior to starting the company, Almaguer was working at another company in Mexico doing point-of-sale. His large enterprise customers wanted automation for their payments, but he noticed that the same tools were too expensive for small businesses.

The co-founders started Yaydoo to provide procurement, accounts payable and accounts receivables, but in a simpler format so that the collection and payment of B2B transactions was affordable for small businesses.

Image Credits: Yaydoo

The idea is taking off, and vendors are adding their own customers so that they are all part of the network to better link invoices to purchase orders and then connect to accounts payable, Almaguer said. Yaydoo estimates that the automation workflows reduced 80% of time wasted paying vendors, on average.

Yaydoo is joining a sector of fintech that is heating up — the global B2B payments market is valued at $120 trillion annually. Last week, B2B payments platform Nium announced a $200 million in Series D funding on a $1 billion valuation. Others attracting funding recently include Paystand, which raised $50 million in Series C funding to make B2B payments cashless, while Dwolla raised $21 million for its API that allows companies to build and facilitate fast payments.

The new funding will enable the company to attract new hires in Mexico and when the company expands into other Latin American countries. Yaydoo is also looking at future opportunities for its working capital business, like understanding how many invoices customers are setting, the access to actual payments, and how money flows out and in so that it can provide insights on working capital funding gaps. The company will also invest in product development.

The company has grown to over 800 customers, up from 200 in the first quarter of 2020. Its headcount also grew to 100 from 30 during the same time. In the last 12 months, over 70,000 companies have transacted on the Yaydoo network, and total payment volume grew to hundreds of millions of dollars.

Yaydoo is a SaaS subscription model, but the new funding will also enable the company to create a pool of potential customers with a “freemium” offering with the goal of converting those customers into the subscription model as they grow, Almaguer said.

Rexhi Dollaku, partner at Base10 Partners, said the firm saw the way B2B payments were becoming modernized and “was impressed” by the Yaydoo team and how it built a complicated infrastructure, but made it easy to use.

He believes Latin America is 10 years behind in terms of B2B payments but will catch up sooner than later because of the digital transformation going on in the region.

“We are starting to see early signs of the network being built out of the payments product, and that is a good indication,” Dollaku said. “With the funding, Yaydoo will be also able to provide more financial services options for businesses to address a working fund gap.”

Mixlab raises $20M to provide purrfect pharmacy experience for pet parents

Posted by on 2 August, 2021

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Pet pharmacy Mixlab has developed a digital platform enabling veterinarians to prescribe medications and have them delivered — sometimes on the same day — to pet parents.

The New York-based company raised a $20 million Series A in a round of funding led by Sonoma Brands and including Global Founders Capital, Monogram Capital, Lakehouse Ventures and Brand Foundry. The new investment gives Mixlab total funding of $30 million, said Fred Dijols, co-founder and CEO of Mixlab.

Dijols and Stella Kim, chief experience officer, co-founded Mixlab in 2017 to provide a better pharmacy experience, with the veterinarian at the center.

Dijols’ background is in medical devices as well as healthcare investment banking, where he became interested in the pharmacy industry, following TruePill and PillPack, which he told TechCrunch were “creating a modern pharmacy model.”

As more pharmacy experiences revolved around at-home delivery, he found the veterinary side of pharmacy was not keeping up. He met Kim, a user experience expert, whose family owns a pharmacy, and wanted to bring technology into the industry.

“The pharmacy industry is changing a lot, and technology allows us to personalize the care and experience for the veterinarian, pet parent and the pet,” Kim said. “Customer service is important in healthcare as is dignity and empathy. We kept that in mind when starting Mixlab. Many companies use technology to remove the human element, but we use it to elevate it.”

Mixlab’s technology includes a digital service for veterinarians to streamline their daily medication workflow and gives them back time to spend with patient care. The platform manages the home delivery of medications across branded, generic and over-the-counter medications, as well as reduces a clinic’s on-site pharmacy inventories. Veterinarians can write prescriptions in seconds and track medication progress and therapy compliance.

The company also operates its own compound pharmacy where it specializes in making medications on-demand that are flavored and dosed.

On the pet parent side, they no longer have to wait up to a week for medications nor have to drive over to the clinic to pick them up. Medications come in a personalized care package that includes a note from the pharmacist, clear and easy-to-read instructions and a new toy.

Over the past year, adoptions of pets spiked as more people were at home, also leading to an increase in vet visits. This also caused the global pet care industry to boom, and it is now projected to reach $343 billion by 2030, when it had been valued at $208 billion in 2020.

Pet parents are also spending more on their pets, and a Morgan Stanley report showed that they see pets as part of their family, and as a result, 37% of people said they would take on debt to pay for a pet’s medical expenses, while 29% would put a pet’s needs before their own.

To meet the increased demand in veterinary care, the company will use the new funding to improve its technology and expand into more locations where it can provide same-day delivery. Currently it is shipping to 47 states and Dijols expects to be completely national by the end of the year. He also expects to hire more people on both the sales team and in executive leadership positions.

The company is already operating in New York and Los Angeles and growing 3x year over year, though Dijols admits operating during the pandemic was a bit challenging due to “a massive surge of orders” that came in as veterinarians had to shut down their offices.

As part of the investment, Keith Levy, operating partner at Sonoma Brands and former president of pet food manufacturer Royal Canin USA, will join Mixlab’s board of directors. Sonoma Brands is focused on growth sectors of the consumer economy, and pets was one of the areas that investors were interested in.

Over time, Sonoma found that within the veterinary community, there was space for a lot of players. However, veterinarians want to home in on one company they trust, and Mixlab fit that description for many because they were getting medication out faster, Levy said.

“What Mixlab is doing isn’t completely unique, but they are doing it better,” he added. “When we looked at their customer service metrics, we saw they had a good reputation and were relentlessly focused on providing a better experience.”

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