Propel accelerates with $18M Series B to manage product lifecycle

Posted by on 15 November, 2018

This post was originally published on this site

We hear so much about managing the customer relationship, but companies have to manage the products they sell too. Propel, a Santa Clara startup, is taking a modern cloud approach to the problem, and today it landed an $18 million Series B investment.

The round was led by Norwest Venture Partners. Previous investors Cloud Apps Capital Partners, Salesforce Ventures, and Signalfire also participated. Today’s investment brings the total raised to over $28 million.

“We are focused on helping companies design and launch products, based on how you go through the life cycle of a product from concept to design to make, model, sell, service where everybody in a company gets involved in product processes at different points in time,” company co-founder and CEO Ray Hein told TechCrunch.

Hein says the company has three core products to help customers track products through their life. For starters, there is the product lifecycle management tool (PLM), used by engineering and manufacturing. Next, they have product information management for sales and marketing and finally they have service personnel using the quality management component.

The company is built on top of the Salesforce platform, which could account for Salesforce Ventures interest in the startup. While Propel looks purely at the product, Salesforce is more interested in the customer, whether from a sales, service or marketing perspective.

These same employees need to understand the products they are developing and selling and that is where Propel comes into play. For instance, when sales people are filling out an order, they need access to the product catalogue to get the right numbers or marketing needs to understand the products they are adding to an online store in an eCommerce environment.

Traditional PLM tools from companies like SAP and Oracle are on-prem or have been converted from on-prem to cloud services. Propel was born in the cloud and Sean Jacobsohn, partner at Norwest Venture Partners, who will be joining the Propel board, sees this as a key differentiator for the startup.

“With Propel’s solution, companies can get up and running faster than with on-premise alternatives and pivot products in a matter of seconds based on real-time feedback gathered from marketing, engineering, sales, customers and the entire supply chain,” Jacobsohn said in a statement.

The company was founded in 2015. It currently has 35 employees, which Hein intends to boost to 50 in the coming months flush with these new funds.

Posted Under: Tech News
Docker inks partnership with Mulesoft as Salesforce takes a strategic stake

Posted by on 15 November, 2018

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Docker and Mulesoft have announced a broad deal to sell products together and integrate their platforms. As part of it, Docker is getting an investment from Salesforce, the CRM giant that acquired Mulesoft for $6.5 billion last spring.

Salesforce is not disclosing the size of the stake it’s taking in Docker, but it is strategic: it will see its new Mulesoft working with Docker to connect containerized applications to multiple data sources across an organization. Putting the two companies together, you can connect these containerized applications to multiple data sources in a modern way, even with legacy applications.

The partnership is happening on multiple levels and includes technical integration to help customers use the two toolsets together more easily. It also includes a sales agreement to cross-sell one another’s products and services and to work with systems integrators and ISVs, who help companies put these kind of complex solutions to work inside large organizations.

Docker chief product officer, Scott Johnston, said it was really about bringing together two companies whose missions were aligned with what they were hearing from customers. That involves tapping into some broad trends around getting more out of their legacy applications and a growing desire to take an API-driven approach to developer productivity, while getting additional value out of their existing data sources. “Both companies have been working separately on these challenges for the last several years, and it just made sense as we listen to the market and listen to customers that we joined joined forces,” Johnston told TechCrunch.

Uri Sarid, Mulesoft’s CTO, agrees that customers have been using both products and it called for a more formal arrangement. “We have joint customers and the partnership will be fortifying that. So that’s a great motion, but we believe in acceleration. And so if there are things that we can do, and we now have plans for what we will do to make that even faster, to make that even more natural and built-in, we can accelerate the motion to this. Before, you had to think about these two concerns separately, and we are working on interoperability that makes makes you not have to think about them separately,” he explained.

This announcement comes at a time of massive consolidation in the enterprise. In the last couple of weeks, we have seen IBM buying Red Hat for $34 billion, SAP acquiring Qualtrics for $8 billion and Vista Equity Partners scooping up Apptio for $1.94 billion. Salesforce acquired Mulesoft earlier this year in its own mega deal in an effort to bridge the gap between data in the cloud and on-prem.

The final piece of today’s announcement is that investment from Salesforce Ventures. Johnston would not say how much the investment was for, but did say it was about aligning the two partners.

Docker has raised almost $273 million before today’s announcement. It’s possible it could be looking for a way to exit, and with the trend toward enterprise consolidation, Salesforce’s investment may be a way to test the waters for just that. If it seems like an odd match, remember that Salesforce bought Heroku in 2010 for $212 million.

Posted Under: Tech News
Airtable, maker of a coding platform for non-techies, raises $100M at a $1.1B valuation

Posted by on 15 November, 2018

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If data is the new oil, you might think of apps are the cars that need it to move. Now, a startup that has built a platform to let everyone — not just those with technical expertise — make and drive their own “cars” has raised a significant round of funding to grow its business. Airtable — which uses a simple interface built on spreadsheets and other tools familiar to knowledge workers as a frontend to produce apps and other web-based experiences — has raised $100 million in funding to expand its business with more talent and offices outside the US. Along with the funding, the company has now catapulted to a $1.1 billion valuation.

Catapult is the key word here: according to PitchBook the company was only valued at $152 million in its last round — eight months ago.

Airtable’s tools are now in use by some 80,000 businesses today, the company said, representing a real growth spurt. To put that into some context, when the company raised $52 million only eight months ago — yet another example of how the most promising startups are racking up funding in rapid rounds at the moment — it said it had only 30,000 customers.

This latest round — a Series C — was led by Josh Kushner at Thrive Capital, Peter Fenton at Benchmark, and Philippe and Thomas Laffont at Coatue Management. Delphine Arnault, Emily Weiss, Alexa Von Tobel, Sarah Smith, Dan Rose, and previous investors CRV and Caffeinated Capital also participated — bringing the total raised by Airtable to $170 million.

Howie Liu, the CEO who co-founded Airtable with Emmett Nicholas (now CTO) and Andrew Ofstad, said that the initial idea for the product came out of their own experience. The tech world had already identified that most tools for building apps and software were too technical for the vast majority of people in the tech industry, but their solutions were still “too expensive and complicated to use.”

The vision was to democratise the value proposition,” he said. A database, the founders decided, “in its most flexible form, can be customised to what you need, and that would be better than using someone else’s existing database model.”

Airtable is not the only company that has identified the problem and tried to solve it by building powerful macros under the hood of otherwise standard-looking database interfaces.

DashDash is building a similar concept out of Europe focused specifically on spreadsheets, and we’re even seeing Microsoft and partners building more functionality into the world’s leading spreadsheet provider, Excel.

Indeed, that’s not seen as stiff competition, but a sign for Airtable’s investors of just how much opportunity there is in the space. “Airtable has established itself as the leader in what will become a very large market,” Josh Kushner, managing partner at Thrive Capital, said in a statement.

One of the important aspects of Airtable is its Slack-like approach to the task of using its platform to build things.

The company has a platform called Blocks that not only lets its users bring in data from a number of sources, but also to select a number of different kinds of outputs for how and where would like the data to be used, whether it is in a marketing campaign across text messaging, an AI-based bot, or a VR experience. Liu confirmed for me that for now Excel is not one of its integration partners, for now.

 

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Government denies Oracle’s protest of $10B Pentagon JEDI cloud RFP

Posted by on 14 November, 2018

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When Oracle filed a protest in August with the Government Accountability Office (GAO) that the Pentagon’s $10 billion JEDI RFP process was unfair, it probably had little chance of succeeding. Today, the GAO turned away the protest.

The JEDI contract has been set up as a winner-take-all affair. With $10 billion on the table, there has been much teeth-gnashing and complaining that the deck has been stacked to favor one vendor, Amazon. The Pentagon has firmly denied this, but it hasn’t stopped Oracle and IBM from complaining loudly from the get-go that there were problems with the way the RFP was set up.

At least with the Oracle complaint, the GAO put that idea firmly to rest today. For starters, the GAO made it clear that the winner-take-all approach was just fine, stating “…the Defense Department’s decision to pursue a single-award approach to obtain these cloud services is consistent with applicable statutes (and regulations) because the agency reasonably determined that a single-award approach is in the government’s best interests for various reasons, including national security concerns, as the statute allows.”

The statement went on to say that the GAO didn’t find that the Pentagon favored any vendor during the RFP period. “GAO’s decision also concludes that the Defense Department provided reasonable support for all of the solicitation provisions that Oracle contended exceeded the agency’s needs.” Finally, the GAO found no evidence of conflict of interest on the DOD’s part as Oracle had suggested.

Oracle has been unhappy since the start of this process, going so far as having co-CEO Safra Catz steer her complaints directly to the president in a meeting last April long before the RFP period had even opened.

As I wrote in an article in September, Oracle was not the only vendor to believe that Amazon was the favorite:

The belief amongst the various other players, is that Amazon is in the driver’s seat for this bid, possibly because they delivered a $600 million cloud contract for the government in 2013, standing up a private cloud for the CIA. It was a big deal back in the day on a couple of levels. First of all, it was the first large-scale example of an intelligence agency using a public cloud provider. And of course the amount of money was pretty impressive for the time, not $10 billion impressive, but a nice contract.

Regardless, the RFP submission period ended last month. The Pentagon is expected to choose the vendor in April 2019, Oracle’s protest notwithstanding.

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Meet Jennifer Tejada, the secret weapon of one of Silicon Valley’s fastest-growing enterprise software startups

Posted by on 14 November, 2018

This post was originally published on this site

PagerDuty, an eight-year-old, San Francisco-based company that sends companies information about their technology, doesn’t receive a fraction of the press that other fast-growing enterprise software companies receive. In fact, though it counts as customers heavyweight companies like Capital One, Spotify and Netflix; it employs 500 employees; and it has five offices around the world, it has largely operated out of the spotlight.

That’s changing. For one thing, the company is now a so-called unicorn, after raising $90 million in a September round led by Wellington and T. Rowe Price that brought its total funding to $173 million and its valuation to $1.3 billion. Crowded as the unicorn club may be these days, that number, and those backers, makes PagerDuty a startup of interest to a broader circle of industry watchers.

Another reason you’re likely to start hearing more about PagerDuty is its CEO of three years, Jennifer Tejada, who is rare in the world of enterprise startups because of her gender, but whose marketing background makes her even more of an anomaly — and an asset.

In a world that’s going digital fast, Tejada knows PagerDuty can appeal to a far wider array of customers by selling them a product they can understand.

It’s a trick she first learned at Proctor & Gamble, where she spent seven years after graduating from the University of Michigan with both a liberal arts and a business management degree. In fact, in her first tech job out of P&G, working for the bubble-era supply chain management startup I2 Technologies (it went public and was later acquired), Tejada says she became “director of dumb it down.”

Sitting in PagerDuty’s expansive second floor office space in San Francisco — space that the company will soon double by taking over the first floor — Tejada recalls acting “like a filter for very technical people who were very proud of the IP they’d created” but who couldn’t explain it to anyone without relying on jargon. “I was like, ‘How are you going to get someone to pay you $2 million for that?’”

Tejada found herself increasingly distilling the tech into plain English, so the businesspeople who have to sign big checks and “bet their careers on these investments” could understand what they were being pitched. She’s instilling that same ethos at PagerDuty, which was founded in 2009 to help businesses monitor their tech stacks, manage disruptions and alert engineers before things catch on fire but, under Tejada’s watch, is evolving into a service that flags opportunities for its customers, too.

As she tells it, the company’s technology doesn’t just give customers insights into their service ecosystem and their teams’ health, and it doesn’t just find other useful kernels, like about which operations teams are the most productive and why. PagerDuty is also helping its clients become proactive. The idea, she says, is that “if you see traffic spiking on a website, you can orchestrate a team of content marketers or growth hackers and get them in that traffic stream right then, instead of reading about it in a demand-gen report a week later, where you’re, like, ‘Great, we totally missed that opportunity.’”

The example is a bit analogous to what Tejada herself brings to the table, which includes strong people skills (she’s very funny) and a knack for understanding what consumers want to hear, but also a deep understanding of financing and enterprise software.

As corny as it sounds, Tejada seems to have been working toward her current career her whole life.

Not that, like the rest of us, she knew exactly what she was doing at all times. On the contrary, one part of her path started when, after spending four years as the VP of global marketing for I2 — four years during which the dot-com bubble expanded wildly, then popped — Tejada quit her job, went home for the holidays and, while her baffled family looked on, booked a round-trip ticket to Australia to get away and learn about yachts.

She left the experience not only with her skipper certification but in a relationship with her now-husband of 16 years, an Australian with whom she settled in Sydney for roughly 12 years.

There, she worked for a private equity firm, then joined Telecom New Zealand as its chief marketing officer for a couple of years, then landed soon after at an enterprise software company that catered to asset-intensive industries, including mining, as its chief strategy officer. When that private-equity backed company was sold, Tejada took a breath, then was recruited to lead, for the first time, another company: Keynote Systems, a publicly traded internet and mobile cloud testing and monitoring company that she steered to a sale to the private equity firm Thomas Bravo a couple of years later.

The move gave her an opportunity to spend time with her now teenage daughter and husband, but she also didn’t have a job for the first time in many years, and Tejada seems to like work. Indeed, within one year, after talking with investors who’d gotten to know her over the years, as well as eager recruiters, Tejada —  who says she is “not a founder but a great adoptive parent” — settled on the 50th of 51 companies she was asked to consider joining. It was PagerDuty.

She has been overseeing wild growth ever since. The company now counts more than half of the Fortune 50 as its customers. It has also doubled its headcount a couple of times since she joined roughly 28 months ago, and many of its employees (upwards of 43 percent) are now women, as well as engineers from more diverse backgrounds than you might see at a typical Silicon Valley startup.

That’s no accident. Diversity breeds diversity, in Tejada’s view, and diversity is good for business.

“I wouldn’t say we market to women,” offers Tejada, who says diversity to her is not just about gender but also age and ethnic background and lifestyle choice and location and upbringing (and functional expertise).

“We’ve made a conscious effort to build an inclusive culture where all kinds of people want to work. And you send that message out into the market, there’s a lot of people who hear it and wonder if it could possibly be true. And then they come to a PagerDuty event, or they come into the office, and they see something different than they’ve seen before. They see people they can relate to.”

Why does it matter when it comes to writing code? For one thing, because a big part of coding is problem-solving, says Tejada. “When you have people from diverse backgrounds chunking through a big hairy problem together, those different perspectives will get you to a more insightful answer.” Tejada also believes there’s too much bias in application development and user experience. “There’s a lot of gobbledygook in our app that lots of developers totally understand but that isn’t accessible to everyone — men, women, different functional types of users, people of a different age. Like, how accessible is our mobile app to someone who’s not a native-first mobile user, who started out on an analog phone, moved to a giant desktop, then to a laptop and is now using a phone? You have to think about the accessibility of your design in that regard, too.”

What about the design of PagerDuty’s funding? We ask Tejada about the money PagerDuty raised a couple of months ago, and what it means for the company.

Unsurprisingly, as to whether the company plans to go public any time soon, her answers are variously, “I’m just building an enduring company,” and, “We’re still enjoying the benefits of being a private company.”

But Tejada also seems mindful of not raising more money for PagerDuty than it needs to scale, even while there’s an ocean of capital surrounding it.

“Going back to the early ’90s, in my career I have not seen a market where there has been more ready availability to capital, between tax reforms and sovereign cash and big corporates and low interest rates and huge venture funds, not to mention the increased willingness of big institutional investors to become LPs.” But even while the “underlying drivers and secular trends and leading indicators” suggest a healthy market for SaaS technology for a long time to come, that “doesn’t mean the labor markets are going to stay the same. It doesn’t mean the geopolitical environments are not going to change. When you let the scarcity issue in the market drive your valuation, you’re also responsible for growing into that valuation, no matter what happens in the macro environment.”

Where Tejada doesn’t necessarily want to be so measured is when it comes to PagerDuty’s place in its market. And that can be challenging as the company gains more traction — and more attention.

“If you do the right thing for your customers, and you do the right thing by your employees, all the rest will fall into place,” she says. “But the minute you take your eye off the ball, the minute you don’t earn the trust of your customer every day, the minute you stop innovating in service of them, you’re gonna start going backwards,” she says with a shrug.

Tejada recalls a conversation she had with her executive team last week, including with Alex Solomon, the company’s CTO and the one of three PagerDuty founders who remains actively engaged with the company. (Co-founder Andrew Miklas moved on to venture capital last year; Baskar Puvanathasan meanwhile left the company in March.) “They probably wanted to kill me,” she says laughing. “I told them I don’t think we’re disrupting ourselves enough. They’re like, ‘Jenn, let up.’ But that’s what happens to companies. They have their first success and they miss that second wave or third wave, and the next thing you know, you’re Kodak.”

PagerDuty, she says, “is not going to be Kodak.”

Posted Under: Tech News
Converscent wants to make it easier for companies to measure ethical behavior

Posted by on 14 November, 2018

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It’s not always easy to do the right thing or to make ethical decisions in a complex business environment. People get lost inside large organizations and group think can overwhelm even normally ethical individuals. Converscent has created a platform to help, and today it announced a new benchmarking dashboard to allow companies to measure just how well they are doing from an ethical perspective.

In recent times, we’ve witnessed the impact it has when companies don’t behave ethically. Converscent CEO Patrick Quinlan says that there is real cost for behaving badly both in terms of dollars and reputation. He believes that it’s in a company’s best interest to stay on top of undesirable behavior before it spirals out of control.

Quinlan pointed out whether it’s the diesel scandal at Volkswagen or the sexual harassment revealed by Susan Fowler at Uber, it has changed the conversation about ethics. He says it’s no longer just about bottom line financial results, how you behave as a company matters too in the court of public opinion and in financial markets.

He believes this can be measured and the Converscent Ethics Dashboard is designed to provide metrics about how well your company is complying with a set of internal guidelines. The Conversent platform includes components to enable employees to safely report bad practices going on in a company such as bribery, corruption, sexual harassment and more. A more automated API driven system pulls in data from a variety of internal systems and analyzes that for ethical gaps.

Much like companies audit their financial systems, you can start to audit how ethical the organizational structure is and how negative behavior is being handled. The company not only looks at internal data, it can help customers benchmark against others in their industries. Quinlan says that it’s possible to spot a trend even before someone reports it.

“Sometimes you have this interactive code of conduct, where there’s a new vice president in a region and suddenly page views on the sexual harassment section of the Code of Conduct have increased 200% in the 90 days after he started. That’s easy, right? There’s a reason that’s happening, and our system will actually tell you what’s happening,” Quinlan explained.

He says trend reporting like this can help a company spot a problem before it spirals out of their control. In other cases, it may be more subtle, but Converscent can pick up less obvious trends as well.

Conversent, which launched in 2013, has raised almost $72 million. They have 630 customers with 6.4 million employees accessing the Converscent platform. Customers include Kimberly Clark, Microsoft, Capgemini and Under Armour.

Posted Under: Tech News
ServiceTitan raises $165M for its home services software, now valued at $1.65B

Posted by on 14 November, 2018

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ServiceTitan, a startup out of Glendale, CA that has built a software platform for home services businesses — in areas like air conditioning, plumbing and electrical repairs — to manage their work, has raised $165 million in what it claims is the “largest software raise in Southern California history.”

(That distinction might be specifically for B2B software, since Snap, as one example, raised billions before it went public, when it was still known as the app startup Snapchat.)

The company has confirmed that its valuation is now at $1.65 billion — making it the newest unicorn out of the region (and fulfilling a prediction we made earlier this year).

This latest round, a Series D, was led by Index Ventures. New backers Dragoneer and T. Rowe Price also participated, along with existing investors Battery Ventures, Bessemer Venture Partners and ICONIQ Capital.

It’s coming just 7 months after ServiceTitan raised its last round: rapid funding rounds of large sums of money, raised within months of each other, seems to be a trend at the moment, underscoring the current state of the market where VCs have themselves raised huge funds and are looking for safe harbours and fast-growing companies in which to invest them. (As two examples, just earlier today, UiPath announced another huge round, its third fundraising this year; and Nikola Trucking also raised its second round of the year.)

The funding will be used for bringing on more talent — it’s already hired from Google, Netflix, Adobe and Accel — as well as business development and to build more software to fill out a vision of becoming “the operating system for home services.” It’s also been making acquisitions, and this could help with that, too.

This is potentially a huge market, with some $400 billion spent on home service repairs annually in the US alone.

ServiceTitan was co-founded by two Armenian Americans, Ara Mahdessian and Vahe Kuzoyan, in 2012, after they met on a ski trip organized by the Armenian student associations at Stanford and the University of Southern California when they were still were in college. The startup was borne out of work both were doing after college to build software to help their fathers, who worked in air conditioning contracting, run their businesses. 

Small businesses often are some of the most overlooked when it comes to tech innovations, even more so when they come from relatively unsexy industries like air conditioning repair, but they need solutions as much as larger organizations. ServiceTitan’s rise has come from filling that gap in the market.

It says it is on track to double subscription revenues this year, with some 2,500 customers on board covering some 50,000 technicians and $10 billion of services in areas like plumbing, air conditioning, electrical and garage door repair, working out to nearly 20 percent of homes across the US and Canada.

“The ServiceTitan mission has always been personal to us,” said Ara Mahdessian, co-founder and CEO of ServiceTitan, in a statement. “Our software powers the tireless men and women of home services who ensure the world has the basic necessities of life: running water, relief from the scorching heat and biting cold, power and electricity, and more. We take it for granted today, until our toilets back up, our air conditioning goes out during the heat of summer, or our lights go out in the middle of the night. These are the heroes that come to our rescue, and we’re here to help them be more efficient and successful.”

ServiceTitan is not the only company eyeing up the space, of course: aggregators like Amazon and Angi Homeservices (formerly Angie’s List) are providing a way for independent contractors and small franchises to connect with customers, and they will inevitably also look to provide the accounting and other software to help these companies run their businesses in their two-sided marketplaces.

ServiceTitan believes it has an edge. “Our software helps our customers with nearly every workflow in their business, including CRM, scheduling, dispatch, mobile invoicing, payments, inventory, and more,” said Vahe Kuzoyan, co-founder and President of ServiceTitan, in a statement. “We’re now integrating with large partners to enable the future of home services, including real-time appointment booking integrations with partners like Yelp and others, as well as supply-chain integration with partners like Lennox and others.”

With this round, Index’s Nina Achadjian is joining the board. “Ara and Vahe started ServiceTitan because they wanted to solve the pain point they felt first hand running their fathers’ businesses,” she said. “Since then, the company has revolutionized how plumbers, electricians, air conditioning technicians and thousands of others in other trades run their businesses. The best part is that ServiceTitan is just getting started. We could not be more excited to be a part of their journey to transform the $400 billion home services market.”

Posted Under: Tech News
Microsoft to acquire Xoxco as focus on AI and bot developers continues

Posted by on 14 November, 2018

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Microsoft has been all in on AI this year, and in the build versus buy equation, the company has been leaning heavily toward buying. This morning, the company announced its intent to acquire Xoxco, an Austin-based software developer with a focus on bot design, making it the fourth AI-related company Microsoft has purchased this year.

“Today, we are announcing we have signed an agreement to acquire Xoxco, a software product design and development studio known for its conversational AI and bot development capabilities,” Lili Cheng, corporate VP for conversational AI at Microsoft wrote in a blog post announcing the acquisition.

Xoxco, which was founded in 2009 long before most of us were thinking about conversational bots, has raised $1.5 million. It began working on bots in 2013, and is credited with developing the first bot for Slack to help schedule meetings. The companies did not reveal the price, but it fits nicely with Microsoft’s overall acquisition strategy this year, and an announcement today involving a new bot building tool to help companies build conversational bots more easily.

When you call into a call center these days, or even interact on chat, chances are your initial interaction is with a conversational bot, rather than a human. Microsoft is trying to make it easier for developers without AI experience to tap into Microsoft’s expertise on the Azure platform (or by downloading the bot framework from its newly acquired GitHub).

“With this acquisition, we are continuing to realize our approach of democratizing AI
development, conversation and dialog, and integrating conversational experiences where people communicate,” Cheng wrote.

The new Virtual Assistant Accelerator solution announced today also aligns with the Xoxco purchase. Eric Boyd, corporate VP for AI at Microsoft says the Virtual Assistant Accelerator pulls together some AI tools such as speech-to-text, natural language processing and an action engine into a single place to simplify bot creation.

“It’s a tool that makes it much easier for you to go and create a virtual assistant. It orchestrates a number of components that we offer, but we didn’t make them easy to use [together]. And so it’s really simplifying the creation of a virtual assistant,” he explained.

Today’s acquisition comes on the heels of a number of AI-related acquisitions. The company bought Semantic Machines in May to give users a more life-like conversation with bots. It snagged Bonsai in June to help simplify AI development and it grabbed Lobe in September, another tool for making it easier for developers to incorporate AI in their applications.

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‘Software robot’ startup UiPath expands Series C to $265M at a $3B valuation

Posted by on 14 November, 2018

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UiPath, a startup that works in the growing area of RPA, or robotic process automation — where AI-based software is used to help businesses run repetitive or mundane back-office tasks, to free up humans to tackle more sophisticated work — has raised money for the third time this year. The company is today announcing that it has closed out its Series C at $265 million — $40 million higher than the amount it said it was aiming for two months ago.

UiPath is now disclosing new investors in the round — namely, IVP, Madrona Venture Group and Meritech Capital — plus secondary sales for employees to give them liquidity, which made up the difference. The company has confirmed to me that the transactions were done at the same valuation as the rest of the Series C, at $3 billion. The Series C is still led by CapitalG and Sequoia Capital as before.

For some context, earlier this year, the company also raised a Series B of $153 million at a $1.1 billion valuation.

UiPath’s strong valuation hike and the rapid pace of its funding come at a time when both the company and its rivals are all growing quickly, as enterprises rush to capitalise on the rise of artificial intelligence in the workplace. In the case of RPA, the promise is that it will help bring down the cost of doing business and improve organizations’ efficiency. UiPath’s mantra is to provide “one robot for every person,” essentially doubling a company’s workforce without the need to hire more people.

UiPath says that its current annual run rate is now $150 million, up from a $100 million ARR figure it put out just two months ago, with customers now numbering at 2,100 and including the US Army, Defense Logistics Agency, GSA, IRS, NASA, Navy, and the Department of Veterans Affairs. One source at the company tells me that it’s getting approached “almost daily” for more funding at the moment.

At the same time, the competitive landscape is most definitely heating up. We’ve heard that Automation Anywhere, which also just raised money — $250 million — earlier this year, may also be looking to raise more (we’re looking into it). And just earlier this week, we reported that another RPA player, Kofax, acquired a division of Nuance for $400 million to ramp up its image processing business.

“I am honored to have IVP, Madrona Venture Group and Meritech Capital as new investors in UiPath. Their leadership and guidance will no doubt help us continue to define and lead the Automation First era for customers everywhere. UiPath has had many funding options and I believe we have selected the investors that align best with our culture and beliefs. I am humbled as the syndicate of unquestionably top-tier venture capital firms who believe in UiPath and support our future,” said UiPath CEO and co- founder Daniel Dines said in a statement. “Additionally, it is a core UiPath principle to share the success of the company in a meaningful way with our hard-working and long-time employees and we were excited to be able to extend the opportunity, at their personal choice, to realize partial liquidity in this round.”

Updated with clarification about the employee liquidity sales and new investor names.

Posted Under: Tech News
SAM nabs $12M for cybersecurity aimed at home routers and devices connected to them

Posted by on 14 November, 2018

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A wave of security startups have built solutions for enterprises that are meeting the challenges of “consumerization”, where IT organizations are tasked with securing a range of devices and apps — some brought in by employees, not issued by IT — that are on the organization’s networks. Today, a startup based out of Israel that is taking a similar approach, but aimed at consumers and the plethora of devices now connected to their home networks, is announcing a round of funding. SAM — which provides a system administered by way of a home or small office/home office internet router to monitor connected devices for suspicious activity — has raised a $12 million in funding.

The Series A includes interesting strategic investors. Led by Intel Capital, the round also includes participation from home security giant ADT, NightDragon (a cybersecurity-focused VC founded by Dave DeWalt, the former CEO of FireEye and McAfee) and Blumberg Capital.

Intel is already integrating SAM’s tech into its hardware, and ADT is evaluating how it can do so right now, said Sivan Rauscher, the CEO who first cut her teeth working on cybersecurity in the Israeli army before co-founding SAM with CTO Eilon Lotem and Vice Chairman Shmuel Chafets.

Prior to this round, SAM first emerged from stealth in February 2018 with $4 million from backers that included Team8, the well-supported VC-company incubator, whose co-founders Nadav Zafir, Israel Grimberg, and Liran Grinberg now also serve as advisors to the startup.

One of the reasons for following that up relatively quickly with more funding is because SAM has already signed some deals and it’s making its way into the market. Rauscher said that the first services using the startup’s tech will go live in Germany, Belgium and UK soon. (She declined to name the telcos that will roll it out, since “they want to keep the element of surprise,” she said.) It’s also already deployed across some 4 million devices by way of Israeli carrier Bezeq.

The company is notable because in the world of cybersecurity, many of the most talented people and companies are focused on targeting the enterprise market. In a way, that is not a surprise, since these typically are larger and more complex networks, and a larger amount of data is more immediately at stake.

(And you could argue that in fact this is also an enterprise play, since SAM is working with telcos to provide services to consumers: “We have an agenda to protect the end user but also the carrier as well,” Rauscher said.)

SAM is coming into the market at a key time.

Home networks are increasingly including a range of devices — not just phones, laptops and tablets; but set-top boxes, home security systems, lighting and fire detection, home ‘hubs’, connected appliances and more. Gartner estimates more than 7 billion connected devices in the consumer market for this year, with that number rising to 12.9 billion by 2020.

But perhaps an even bigger urgency is that home routers — which Rauscher describes as “low-hanging fruit” — have increasingly become a target for malicious hackers. A report from Akamai earlier this year estimated that 65,000 home routers have been accessed by hackers; the US and UK governments have further issued warnings that Russian hackers are lying in wait, using compromised routers to lay out long-term cyber warfare operations.

In that context, while the concept of securing a home router might not sound like as lucrative a target on its own compared to multi-million-dollar enterprise contracts (and the billions of dollars and thousands of data points that are at stake), the wider problem is clearly one that is ripe for addressing.

In a nutshell, Rauscher — also, I should add, notable for being one of a handful of female founders in the world of cybersecurity — says that what SAM does is operate by way of the router, but by identifying and providing security wrappers for every device that connects with the router.

“Our software is agnostic to any home router,” she said, adding that once you secure the router, “you secure everything in the network.” The essence of what SAM does is search out suspicious links into and coming out of these devices, and when it detects them, they are blocked, essentially taking the role of an IT department or presenting an enterprise-style deployment designed to work in the home.

“We were impressed with SAM’s technology and level of security for the home network, which is a critical part of building out the future of 5G,” said Dave Flanagan, vice president of Intel Corp. and group managing director of Intel Capital. “Unlike existing solutions, which necessitate buying a new gateway or replacing it with a secure gateway, SAM’s solution provides end-users security, without them needing to do anything. And for telecommunications companies and ISPs, its AI and machine learning capabilities monitor behavior on the network to detect unusual activity and prevent attacks. With the global market for smart home technology predicted to hit $100 billion by 2020, Intel and its partners know security is essential.”

Posted Under: Tech News
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