Zebeth Media Solutions

Venture

Bilt Rewards’ valuation jumps to $1.5B following new $150M growth round • ZebethMedia

By zebethcontrolPosted on Posted in Ankur Jain, bilt rewards, credit card, Fintech, Left Lane Capital, VentureNo Comments on Bilt Rewards’ valuation jumps to $1.5B following new $150M growth round • ZebethMedia

Bilt Rewards, which works with some of the country’s largest multifamily owners and operators to create loyalty programs and a co-branded credit card for property renters, entered unicorn status after securing $150 million in a growth round led by Left Lane Capital. We previously covered Bilt a year ago when the company raised $60 million in growth funding on a $350 million valuation. Today’s investment raises that to $1.5 billion and gives the company about $213 million in total funding since the company launched in June 2021 out of Kairos, the startup studio led by Bilt founder and CEO Ankur Jain. The company’s loyalty program and payment platform was rolled out to more than 2.5 million apartment units across the country so far, Jain told ZebethMedia. Users can earn points and improve their credit by simply paying rent each month. Bilt’s points can be used in 12 loyalty programs, including major airlines, hotels, travel, fitness classes, Amazon.com purchases, credit toward rent or a future downpayment. Bilt has already processed over $3.5 billion in annualized rent payments and over $1.6 billion in annualized card spend to date. Both of those figures are ones that have grown significantly in just the last 90 days, Jain said. Also, there are more than half a million customers using Bilt between the loyalty program and credit card. In addition to the new investment, Bilt also announced a new program called Bilt Homes, which helps renters access homeownership. Here’s how it works: Using the member’s monthly rent payment, Bilt will show the member homes they can own in their area for that same payment. That payment includes real-time interest rates, taxes, income, credit profile and other personal data to determine mortgage qualification, Jain said. Members can also calculate how an improvement in credit rating will affect the mortgage interest rate they may qualify for, and should they need or want it, enroll in Bilt’s free rent reporting to help boost their credit history with every on-time rent payment. “It’s an opportunity for more renters to think about whether homeownership is the right thing for them at this moment in time,” Jain said. “It’s just so stupidly confusing to buy a home today, so we created the first tool where you can now just say, for $3,000 a month, what are the homes that I could buy today for the same amount?” Joining Left Lane in the investment was Wells Fargo, Greystar, Invitation Homes, Camber Creek, Fifth Wall, Smash Capital, Prosus Ventures and Kairos. Previous rounds were more strategic in nature, while this round was the first time Bilt had taken growth institutional capital, Jain said. He notes that the company wasn’t formally looking for new capital. In fact, it had hit profitability earlier this year. However, there was a lot of inbound interest in the company, and bringing on institutional investors like Left Lane Capital positioned Bilt to think more long-term, including a possible initial public offering or other future opportunities, for example, acquisitions. Also, having partners like Wells Fargo double down in this round “was a testament to the strength of the partnership,” as was attracting one of the largest multifamily owners, Greystar, and Invitation Homes, one of the largest single-family rental players, Jain added. Much of the new capital will be kept in reserves for now while the company is focused on aligning interests further with its core commercial partners. “Unlike a lot of the VC rat race businesses where you’re just chasing growth for the sake of chasing growth, we can just keep focusing on the core business and growth and think long-term here,” Jain said. “That’s our goal and a big reason why we raised the capital right now.”

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Sequoia India eyes $50 million investment in K12 despite market slump • ZebethMedia

By zebethcontrolPosted on Posted in Asia, edtech, Education, india, Sequoia India, Startups, VentureNo Comments on Sequoia India eyes $50 million investment in K12 despite market slump • ZebethMedia

Sequoia India is in advanced stages of deliberations to invest over $50 million in K12 Techno Services, a startup that offers a range of services to education institutions and also runs its own chain of schools, doubling down on a firm that it first backed over a decade ago, two sources familiar with the matter told ZebethMedia. K12 Techno Services — which has raised over $75 million in previous rounds, according to Tracxn — also engaged with TPG and Accel in recent weeks but has decided to move ahead with existing backer Sequoia India, one of the sources said. The round hasn’t closed, so the terms of the investment may change, sources cautioned, requesting anonymity sharing nonpublic information. It’s unclear if anyone other than Sequoia is also investing in the round. K12 Techno Services runs Orchids – The International School chain in over two dozen cities in India. It operates over 90 schools where it teaches a range of subjects from robotics to philosophy for an individual’s “360-degree development.” Orchids has served over 75,000 students, according to its website. It also offers integrated curriculum, platform for online classes, and other school management applications to over 300 schools through its arm called Let’s Eduvate. “Our comprehensive solutions are scale-able and adaptable that work effectively for all types of schools. They are efficacious for various school management activities as designed for the overall growth of students, hence for schools,” it describes on its website. Sparkle Box, another arm of K12, runs an e-commerce store for custom-made activity kits aimed at children. K12 didn’t respond to a request for comment Thursday, whereas Sequoia India declined to comment. The deal represents Sequoia’s aggressive and multi-faceted approach to tackling the edtech market in India, where over 300 million students go to school and participate in competitive college entrance exams. It’s one of the earliest backers of Byju’s, Unacademy and Doubtnut that serve students from kindergarten to those preparing to enter colleges. It’s also an investor in Eruditus, which offers higher education to students in dozens of markets. Edtech startups in India — and beyond — are some of the most impacted by the ongoing market downturn that has reversed much of the gains made in the 13 years long bull run. The edtech industry in the South Asian market has cut nearly 5,000 jobs this year.

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Top VCs have expanded into broader asset managers; is the model sustainable? • ZebethMedia

By zebethcontrolPosted on Posted in Startups, VentureNo Comments on Top VCs have expanded into broader asset managers; is the model sustainable? • ZebethMedia

Last week at ZebethMedia’s annual Disrupt event, this editor sat down with VCs from two firms that have come to look similar in ways over the last five or so years. One of those VCs was Niko Bonatsos, a managing partner at General Catalyst (GC), a 22-year-old firm that began as an early-stage venture outfit in Boston and that now manages many tens of billions of dollars across as a registered investment advisor. Bonatsos was joined onstage by Caryn Marooney, a partner at Coatue, which began life as a hedge fund in 1999 and now also invests in growth- and early-stage startups. (Coatue is managing even more billions than General Catalyst – upwards of $90 billion, per one report.) Because of this blurring of what it means to be a venture firm, much of the talk centered on the outcome of this evolution. We wondered: does it make perfect sense that firms like Coatue and GC (and Insight Partners and Andreessen Horowitz and Sequoia Capital) now tackle nearly every stage of tech investing, or would their own investors be better off if they’d remained more specialized? While Bonatsos called his firm and its rivals “products of the times,” it’s easy to wonder whether their products are going to remain quite as attractive in the coming years. Most problematic right now: the exit market is all but frozen. It’s also challenging to deliver outsize returns when you’ve raised the amounts that we’ve seen flow to venture firms over the last handful of years. General Catalyst, for example, closed on $4.6 billion back in February. Coatue meanwhile closed on $6.6 billion for its fifth growth-investment strategy as of April, and it’s reportedly in the market for a $500 million early-stage fund at the moment. That’s a lot of money to double or triple, not to mention grow tenfold. (Traditionally, venture firms have aimed to 10x investors’ dollars.) In the meantime, not a single firm — about which I’m aware, anyway — has expressed plans to give investors back some of the massive amounts of capital it has raised. I was thinking today about last week’s conversation and have some additional thoughts about what we discussed on stage (in italics). What follows are excerpts from the interview. To catch the whole conversation, you can watch it around the 1:13-minute mark in the video below. TC: For years, we’ve seen a blurring of what a “venture” firm really means. What is the outcome when everyone is doing everything? NB: Not everyone has earned the right to do everything. We’re talking about 10 to maybe 12 firms that [are now] capable of doing everything. In our case, we started from being an early-stage firm; early stage continues to be our core. And we learned from serving our customers – the founders – that they want to build enduring companies and they want to stay private for longer. And as a result, we felt like raising growth funds was something that could meet their demands and we did that. And over time, we decided to become a registered investment advisor as well, because it made sense [as portfolio companies] went public and [would] grow very well in the public market and we could continue to be with them [on their] journey for a longer period of time instead of exiting early on as we were doing in previous times. CM: I feel like we’re now in this place of pretty interesting change . . .We’re all moving to meet the needs of the founders and the LPS who trust us with their money [and for whom] we need to be more creative. We all go to where the needs are and the environment is. I think the thing that stayed the same is maybe the VC vest. The Patagonia vest has been pretty standard but everything else is changing. Marooney was joking of course. It should also be noted that the Patagonia vest has fallen out of fashion, replaced by an even more expensive vest! But she and Bonatsos were right about meeting the demands of their investors. To a large degree, their firms have merely said yes to the money that’s been handed to them to invest. Stanford Management Company CEO Robert Wallace  told The Information just last week that if it could, the university would stuff even more capital into certain venture coffers as it seeks our superior returns. Stanford has its own scaling issue, explained Wallace: “As our endowment gets bigger, the amount of capacity that we receive from these very carefully controlled, very disciplined early-stage funds doesn’t go up proportionally . . .We can get more than we got 15 or 20 years ago, but it’s not enough.” TC: LPs had record returns last year. But this year, their returns are abysmal and I do wonder if it owes in some part to the overlapping stakes they own in the same companies as you’re all converging on the same [founding teams]. Should LPs be concerned that you’re now operating in each other’s lanes? NB:  I personally don’t see how this is different than how it used to be. If you’re an LP at a top endowment today, you want to have a piece of the top 20 tech companies that get started every year that could become the Next Big Thing. [The difference is that] now, the outcomes in more recent years have been much larger than ever before.  . . . What LPs have to do, as has been the case over the last decade, is to invest in different pools of capital that the VC firms give them allocation to. Historically, that was in early-stage funds; now you have options to invest in many different vehicles.In real time, I moved on to the next question, asking whether we’d see a “right sizing” of the industry as returns shrink and exit paths grow cold. Bonatsos answered that VC remains a “very dynamic ecosystem” that, “like other species, will have to

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Mobile gaming review — Playing on the Logitech G Cloud with Shadow • ZebethMedia

By zebethcontrolPosted on Posted in Daily Crunch, Startups, Venture, venture capitalNo Comments on Mobile gaming review — Playing on the Logitech G Cloud with Shadow • ZebethMedia

To get a roundup of ZebethMedia’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here. Good afternoon, and welcome to the final week of October! We’re confused how that happened. Haje is considering dressing up as “supply chain disruptions” for Halloween, whereas Christine is contemplating dressing up as a down round. What’s your spookiest startup-themed costume? Let us know on The Twitters! — Christine and Haje The ZebethMedia Top 3 On cloud 9: Romain chronicles how pairing up the Logitech G Cloud with cloud computing service Shadow not only made for a better gaming experience, but was also “a match made in cloud gaming heaven.” If you like your locks virtual…: Then Level has something you will want to see. Its new Level Lock+ with Apple Home Key support replaces your current lock and enables you to unlock your door and provides you with some exclusivity for now, Darrell writes. Helping hand: Pre-seed startups just got another investor friend in Africa. Annie reports that venture capital firm Flourish launched Madica, an investment program providing “funding, technology support and mentorship to underrepresented founders across the continent.” Startups and VC Haje was mildly surprised and pretty excited after reading Paul’s story about his favorite podcasting app Pocket Casts going open source. Paul points out that it shouldn’t have been that big of a surprise — WordPress makers Automattic bought the platform a while back, and Automattic founder and CEO Matt Mullenweg is a huge proponent of open source. To wit: WordPress is among the top open source projects on the planet. While the overall crypto markets have been in a rough spot lately, web3 venture capitalists have never had more conviction — or more funding at their disposal — to back startups and teams building in the space, Anita writes. She’s stoked that Chris Ahn, partner at Haun Ventures; Michelle Bailhe, partner at Sequoia; and Tom Schmidt, general partner at Dragonfly will join us onstage at TC Sessions: Crypto on November 17 in Miami. And we have five more for you: To better thwart ransomware attacks, startups must get cybersecurity basics right Image Credits: Bryce Durbin / ZebethMedia Creating systems that are resilient against ransomware isn’t top of mind for early-stage startups, but many companies don’t even follow basic best practices, much to their detriment. “Enable multifactor authentication (MFA) on everything you have,” said Katie Moussouris, founder of Luta Security. “Enable it on every account that you have.” Last week at ZebethMedia Disrupt, Moussouris and Brett Callow, threat analyst at Emsisoft, spoke about the need to invest early in locking down their systems, starting with MFA. “It’s a matter of stacking security layer upon security layer,” said Callow. “MFA in conjunction with staff training — in conjunction with other things — all serve to reduce risk.” Two more from the TC+ team: ZebethMedia+ is our membership program that helps founders and startup teams get ahead of the pack. You can sign up here. Use code “DC” for a 15% discount on an annual subscription! Big Tech Inc. Make like a lobster and get your pinchers ready — YouTube rolls out a new design that features pinch-to-zoom on iOS and Android. Premium users got first dibs on this, and now all users will start to see it, Lauren writes. There’s also some new things, including “ambient mode” and new buttons under videos, so head on over there and see for yourself. And we have five more for you:

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Why startups are better off prioritizing growth instead of optimizing cloud costs • ZebethMedia

By zebethcontrolPosted on Posted in cloud cost optimization, cloud infrastructure, Enterprise, investor survey, Startups, VentureNo Comments on Why startups are better off prioritizing growth instead of optimizing cloud costs • ZebethMedia

Everybody’s talking so much about cost optimization and extending runways that startups across the board are looking at every little expense as they seek ways to navigate the downturn. But some costs are better left untouched simply because the work involved may not be worth the payoff. According to several investors we surveyed recently, cloud costs are one such area that startups can afford to ignore, at least in the early days. As Zetta Ventures managing director Jocelyn Goldfein put it, the math needs to make sense if you’re prioritizing cost cuts over growth. “It’s not really worth optimizing your cloud spend until you can squeeze out at least half a month, better yet a full month, of runway. Usually, that’s not the case at the early stage.” It’s also increasingly important to not lose focus on product development if you’re a growth-stage startup. “I’ll always believe that getting things working end-to-end in a timely fashion and iterating on user feedback is the priority. Over-optimizing early is an anti-pattern,” said Menlo Ventures partner Tim Tully. “As they say in product teams, K.I.S.S. (keep it simple, stupid). You can always go back and optimize later.” We’re widening our lens, looking for more investors to include in ZebethMedia surveys where we poll top professionals about challenges in their industry. If you’re an investor who’d like to participate in future surveys, fill out this form. Keeping it simple, though, isn’t always an option for startups these days with the plethora of cloud and component providers crowding the market. Multicloud is now a more viable option than ever in such an environment. “While choosing a single public cloud offers more simplicity and speed,” Team8 managing partner Liran Grinberg says, “a multicloud setup will allow you to leverage the best-of-breed offering from a functionality standpoint as well as optimize for cost down the line.” However, Grinberg added that startups should be mindful of the implications of using multiple cloud vendors down the road. “Firstly, egress costs can be expensive enough to make this not worth the while. Second, you need to manage more than one provider, so your monitoring, cost management, infrastructure as code, and security solutions need to support all the vendors you are using.” Besides the usual suspects, there are now more vendors and models available to startups than there were a few years ago. This includes virtual private clouds, which can be useful for companies dealing with privacy and regulatory concerns. For a company to run its own servers, all the investors agreed that founders should first carefully weigh the pros and cons of doing so, and only proceed if it’s going to be worth it. Tully said, “Going on-prem from a data center perspective, as opposed to cloud on-prem, i.e., virtual private cloud (VPC), would require a very compelling business reason to justify.” “For starting on-prem, you should have a really, really good excuse, as the overhead cost for running this kind of operation is almost never worthwhile for startups (and even for very mature companies, for that matter),” Grinberg added. Read the full survey to find out what investors look for in cloud startups, the best ways to approach and pitch them, why cloud marketplaces are a hit, and more advice on what to prioritize when it comes to cloud-related decisions.

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ZebethMedia wants to hear Black founders’ stories of VC fundraising • ZebethMedia

By zebethcontrolPosted on Posted in black founders, diversity and inclusion, fundraising, Startups, Venture, venture capitalNo Comments on ZebethMedia wants to hear Black founders’ stories of VC fundraising • ZebethMedia

On Friday, ZebethMedia reported the latest Crunchbase venture capital data, and the news isn’t very good from a diversity point of view: Black founders raised a paltry $187 million out of the $150.9 billion in venture capital allocated in Q3 this year. To put that into perspective, that’s only 0.12% of the total investment made in the quarter. The story launched a conversation on Twitter about the current state of venture funds for Black founders. It unearthed pain and heartbreak, but it also brought to light the resilience of founders and investors who still have their hearts set on change. It also surfaced the reality that the powers that be — most, if not all, of the rich, white men, LPs and institutions with outsized power — are sticking to their old habits instead of doing much to truly bring about change in how venture capital is invested. One way to hold folks accountable is to keep openly talking about inequities. This is one reason why ZebethMedia has decided to create a forum for Black founders to — anonymously or not — submit their open, honest experiences of what it is like to fundraise for their startups today. We want to hear what investors still say to you behind closed doors. We want to know how often you’ve had to codeswitch, and what the anxiety levels are still like when walking into certain rooms. We want to know the good parts, like who are the allies, but also the bad parts, like who are the bullies. We acknowledge that this is not a new conversation, and there is much fatigue in constantly having the same conversations. But, it’s important to hold on, as there is much work to be done. The questions are below (click the form and scroll). Answer what you wish, as you wish; you can name names, or not. Please try to answer with a paragraph or 2-3 sentences and provide explicit examples where you can. We will publish many of the responses by the end of this year. Thank you for your help!

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The seas are getting even rougher for Chinese startups • ZebethMedia

By zebethcontrolPosted on Posted in China, Chinese venture capital, EC East Asia, EC News Analysis, EC venture capital, startup fundraising, Startups, VentureNo Comments on The seas are getting even rougher for Chinese startups • ZebethMedia

The third quarter was far from favorable for Chinese startups looking to raise money. Data shows that for upstart tech companies in the country, Q3 2022 was the worst time to raise venture capital since Q1 2020, with far less capital invested than either the rest of 2020 and 2021, or for most of 2018 and 2019. China is hardly alone in seeing its domestic startup scene see slowing capital inflows, but recent news puts the country-specific information into new context: Given today’s Chinese tech share sell-off, there is fresh pressure on technology companies’ valuations in the country, and that could impact startup fundraising. If China saw fundraising decrease 10% in Q4 2022 from Q3 2022 — measured in dollar terms, not the number of funding events — we’d see startups facing the slowest quarter since the onset of 2018, according to CB Insights data. A steeper decline would put Q4 2022 as the nadir in the nation for the last five years. Why are Chinese tech stocks suffering today? After a period when the sale of the nation’s equities onshore was at least somewhat meddled with, the value of major and minor Chinese tech companies fell today in the wake of the Chinese Communist Party’s every-five-year confab. This time ’round, current Chinese Premier Xi Jinping secured not only another five years in power, he also solidified a cabinet of like-minded allies. The context is clear: The Xi method of managing China remains ascendant. And investors in tech companies, still licking wounds brought on by a regulatory barrage led by Xi — which included some reasonable ideas like dismantling certain anti-competitive practices along with some less enticing policies — are not enthused. The result? A bloodbath (American share price changes as of the time of publishing):

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Global VC Flourish launches Madica, an Africa-focused program to back pre-seed stage startups • ZebethMedia

By zebethcontrolPosted on Posted in africa, Flourish Ventures, Startups, VentureNo Comments on Global VC Flourish launches Madica, an Africa-focused program to back pre-seed stage startups • ZebethMedia

Access to funding and lack of support systems are some of the greatest challenges faced by startup founders in sub-Saharan Africa. And while venture capital and founder support programs within the continent are growing, a lot still remains to be done to meet the financing, technology and social capital needs of the especially marginalized groups like women founders. It is these gaps that continue to inspire the development of new programs like Madica by US-based venture capital firm Flourish Ventures, which hopes to lessen the burdens of building startups. Launched today, Madica is a pan-African investment program that aims to offer funding, technology support, and mentorship to underrepresented founders across the continent. The sector-agnostic program targets technology startups in the pre-seed stage, which is where most ideas fail. The program has set aside $6 million for investment in up to 30 African startups, each receiving up to $200,000 in exchange for equity, availing the much needed funding. The initial investment phase will run for three years. “Although investment is booming on the continent, funds are often disproportionately targeted at a few well-networked entrepreneurs and skewed towards the more prominent tech hubs… Madica is sector-agnostic and intends to double down on providing hands-on support, extensive resources, access to networks and more. This is why in addition to $6M of investment capital, we have reserved an equal amount for programmatic support,” said Manica’s head, Emmanuel Adegboye. “We encourage founders across the continent to apply for our program. We believe Africans have an unmatched entrepreneurial spirit, and one of Madica’s core goals is to ensure a level playing field for every African founder,” he said. Madica said it is also keen on reaching underserved markets in the continent, outside the well-established hubs of Egypt, Kenya, Nigeria, and South Africa. This is part of its push to ensure a pan-African reach by supporting local, and women founders. To qualify for the program, founders need to be working on their idea full-time, have a minimum viable product, and should have received little or no institutional funding. Application and admission to the program will be on a rolling basis. Madica is also partnering with AfriLabs, Pariti, Africa Early Stage Investor Summit, CELO foundation, and Rising Tide to identify entrepreneurs to support. Participating founders will be matched with mentors including Isis Nyong’o, the Asphalt & Ink partner; Ceviant Finance co-founder, Idris Saliu, and Wendy Hoffman, the Capital Legal Counsel at The Delta. “Madica is an investment in the African venture ecosystem, with the audacious goal of creating a broader systemic shift. Through Madica, we intend to develop a cadre of mentors, create world-class programming, crowd-in follow-on capital and leverage Flourish’s global presence to extend the reach of local networks. These will eventually benefit other participants in the ecosystem – startups, investors, and policymakers,” said Ameya Upadhyay, the venture partner at Flourish Ventures, an early-stage fintech VC whose portfolio includes Nigeria’s Flutterwave and Paga. “We hope that Madica can help change the narrative around African startups – lower the perception of risk, attract more capital, inspire more founders, and garner more media attention,” said Upadhyay.    

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Africa’s tech talent accelerators attract students, VC funding as Big Tech comes calling • ZebethMedia

By zebethcontrolPosted on Posted in africa, developers, EC Africa, EC Future of Work, Startups, VentureNo Comments on Africa’s tech talent accelerators attract students, VC funding as Big Tech comes calling • ZebethMedia

Tech giants are increasingly looking for tech talent in Africa, where the number of developers reached 716,000 last year, up 3.8% from 2020, according to Google. In the last six months, Microsoft and Amazon have been on a recruitment drive that came along with enticing offers including relocation to their hubs in the U.S. and Europe, endearing themselves to the small but growing talent pool amid tough competition from other tech giants like Google, as well as startups. This demand for African developers is expected to continue, buoyed by the effects of the Great Resignation, which led employers to search for new talent elsewhere, and as tech behemoths like Google, Oracle and Visa expand their operations in Africa. Yet as demand rises, the number of new developers entering the market is disproportionately small, mainly because traditional education institutions in most African countries have been slow to revamp their courses to keep up with job market demands and the fast-evolving world of technology. On the other hand, the gap between demand and supply has unequivocally steered the launch of new developer schools and propelled the growth of existing ones in recent months, many of which are gaining the attention of global venture capitalists.

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