AlphaSense, a search engine for analysis and business intel, raises $50M led by Innovation Endeavors

Source: Tech News – Enterprise

Google and its flagship search portal opened the door to the possibilities of how to build a business empire on the back of organising and navigating the world’s information, as found on the internet. Now, a startup that’s built a search engine tailored to the needs of enterprises and their own quests for information has raised a round of funding to see if it can do the same for the B2B world.

AlphaSense, which provides a way for companies to quickly amass market intelligence around specific trends, industries and more to help them make business decisions, has closed a $50 million round of funding, a Series B that it’s planning to use to continue enhancing its product and expanding to more verticals.

Today, the company today counts some 1,000 clients on its books, with a heavy emphasis on investment banks and related financial services companies. That’s in part because of how the company got its start: Finnish co-founder and CEO Jaakko (Jack) Kokko he had been an analyst at Morgan Stanley in a past life and understood the labor and time pain points of doing market research, and decided to build a platform to help shorted a good part of the information gathering process.

“My experience as an analyst on Wall Street showed me just how fragmented information really was,” he said in an interview, citing as one example how complex sites like those of the FDA are not easy to navigate to look for new information an updates — the kind of thing that a computer would be much more adept at monitoring and flagging. “Even with the best tools and services, it still was really hard to manually get the work done, in part because of market volatility and the many factors that cause it. We can now do that with orders of magnitude more efficiency. Firms can now gather information in minutes that would have taken an hour. AlphaSense does the work of the best single analyst, or even a team of them.”

(Indeed, the “alpha” of AlphaSense appears to be a reference to finance: it’s a term that refers to the ability of a trader or portfolio manager to beat the typical market return.)

The lead investor in this round is very notable and says something about the company’s ambitions. It’s Innovation Endeavors, the VC firm backed by Eric Schmidt, who had been the CEO of none other than Google (the pace-setter and pioneer of the search-as-business model) for a decade, and then stayed on as chairman and ultimately board member of Google and then Alphabet (its later holding company) until just last June.

Schmidt presided over Google at what you could argue was its most important time, gaining speed and scale and transitioning from an academic idea into full-fledged, huge public business whose flagship product has now entered the lexicon as a verb and (through search and other services like Android and YouTube) is a mainstay of how the vast majority of the world uses the web today. As such he is good at spotting opportunities and gaps in the market, and while enterprise-based needs will never be as prominent as those of mass-market consumers, they can be just as lucrative.

“Information is the currency of business today, but data is overwhelming and fragmented, making it difficult for business professionals to find the right insights to drive key business decisions,” he said in a statement. “We were impressed by the way AlphaSense solves this with its AI and search technology, allowing businesses to proceed with the confidence that they have the right information driving their strategy.”

This brings the total raised by AlphaSense to $90 million, with other investors in this round including Soros Fund Management LLC and other unnamed existing investors. Previous backers had included Tom Glocer (the former Reuters CEO who himself is working on his own fintech startup, a security firm called BlueVoyant), the MassChallenge incubator, Tribeca Venture Partners and others. Kokko said AlphaSense is not disclosing its valuation at this point. (I’m guessing though that it’s definitely on the up.)

There have been others that have worked to try to tackle the idea of providing more targeted, and business focused search portals, from the likes of Wolfram Alpha (another alpha!) through to Lexis Nexis and others like Bloomberg’s terminals, FactSet, Business Quant and many more.

One interesting aspect of AlphaSense is how it’s both focused on pulling in requests as well as set up to push information to its users based on previous search parameters. Currently these are set up to only provide information, but over time, there is a clear opportunity to build services to let the engines take on some of the actions based on that information, such as adjusting asking prices for sales and other transactions.

“There are all kinds of things we could do,” said Kokko. “This is a massive untapped opportunity. But we’re not taking the human out of the loop, ever. Humans are the right ones to be making final decisions, and we’re just about helping them make those faster.”


AlphaSense, a search engine for analysis and business intel, raises M led by Innovation Endeavors

Workplace, Facebook’s service for business teams, is raising its prices for the first time since launch

Source: Tech News – Enterprise

Three years into its life with 2 million paying users signed up, Workplace — Facebook’s platform for businesses and and other organizations to build internal communities and communications — is about to make a significant business shift of its own. Come September 2, Workplace is changing its pricing tiers, how it charges its users, and the services that it provides customers.

Up to now, Facebook has taken a very simple approach to how it charges for Workplace, unique not just because of it being a paid service (unlike Facebook itself, which is free), but for how it modelled its pricing on the basic building block of Facebook-the-consumer product: a basic version was free, with an enhanced premium edition costing a flat $3 per active user, per month.

In September, that will change. The standard (basic) tier is getting rebranded as Workplace Essential, and will still be free to use. Meanwhile, the premium tier is being renamed Workplace Advanced and getting charged $4 per person, per month. And Facebook is introducing a new tier, Workplace Enterprise, which will be charged at $8 per person, per month, and will come with a new set of services specifically around guaranteed, quicker support and first-look access at new features. (Those who are already customers have the option of being grandfathered for a year, the company said, before switching to a new plan.)

Screenshot 2019 07 16 at 14.16.02

Those are not the only changes. Two other notable shifts are getting introduced with these new tiers. First, these prices will be for all users, regardless of whether they are active in the month.

And second, they are specifically prices for people who access Workplace as general “knowledge workers” — marked by having email addresses and specific job functions. Frontline workers — for example cashiers or baristas or others mostly on their feet all day helping customers — will be an add-on at $1.50 per person per month, also regardless of whether they are active or not.

For now, the rest of the features in the different tiers are remaining the same:

Screenshot 2019 07 16 at 14.16.33

The changes at Workplace come amid a number of other developments among workforce collaboration and communication platforms.

First and foremost, Slack has how gone public, subjecting it and its ups and downs to a lot more public scrutiny, but also putting it on the map as a business of some standing, helping it make a bigger move into brokering more deals with the larger enterprises that Workplace has been winning over. The latter’s customers include the likes of Walmart, the worlds biggest employer; as well as Nestle, Vodafone, GSK, Telefonica, AstraZeneca and Delta Airlines, and Facebook says that there are more than 150 companies signed up with more than 10,000 employees each.

Teams, meanwhile, has now passed Slack in user numbers, and in a way is a more direct competitor: it has positioned itself (like Workplace) as a tool for both knowledge and frontline workers, helping with actual back-office collaboration, as well as a way to broadcast communications to a wider group of employees.

Julien Codorniou, the VP of Workplace, said that the changes in pricing tiers was not a reaction to competition, but rather a reaction to customers. Although the pricing for Workplace was an interesting twist on how enterprises tend to procure IT, it turned out to be too novel by half: it turned out that most actually like the predictability of paying the same amount for a service upfront, rather than having the pricing change each month depending on usage.

“Today, customers’ bills change every month, for example when a coworker goes on vacation or whatever,” he said. “It’s a nightmare for the accounting department, who needs to know how much to pay two years out.”

He added that this doesn’t mean you can’t change how much you pay: you could change the pricing each month if necessary.

So far,  no one has made the shift to the new tiers, so it will be interesting to see how and if they have much of an impact. I do know that from retail theory, customers in stores are more likely to select a middle-priced product if they are given an option of something cheap and something expensive at either end, and so this could be an interesting way to drive more users to Workplace’s paid tier.

What is more clear is that this is also a way for Facebook to raise its prices for the first time since the service launched, and lays the groundwork for more differentiation between different kinds of offerings.

 


Workplace, Facebook’s service for business teams, is raising its prices for the first time since launch

OneTrust raises $200M at a $1.3B valuation to help organizations navigate online privacy rules

Source: Tech News – Enterprise

GDPR, and the newer California Consumer Privacy Act, have given a legal bite to ongoing developments in online privacy and data protection: it’s always good practice for companies with an online presence to take measures to safeguard people’s data, but now failing to do so can land them in some serious hot water.

Now — to underscore the urgency and demand in the market — one of the bigger companies helping organizations navigate those rules is announcing a huge round of funding. OneTrust, which builds tools to help companies navigate data protection and privacy policies both internally and with its customers, has raised $200 million in a Series A led by Insight that values the company at $1.3 billion.

It’s an outsized round for a Series A, being made at an equally outsized valuation — especially considering that the company is only three years old — but that’s because, according to CEO Kabir Barday, of the wide-ranging nature of the issue, and OneTrust’s early moves and subsequent pole position in tackling it.

“We’re talking about an operational overhaul in a company’s practices,” Barday said in an interview. “That requires the right technology and reach to be able to deliver that at a low cost.” Notably, he said that OneTrust wasn’t actually in search of funding — it’s already generating revenue and could have grown off its own balance sheet — although he noted that having the capitalization and backing sends a signal to the market and in particular to larger organizations of its stability and staying power.

Currently, OneTrust has around 3,000 customers across 100 countries (and 1,000 employees), and the plan will be to continue to expand its reach geographically and to more businesses. Funding will also go towards the company’s technology: it already has 50 patents filed and another 50 applications in progress, securing its own IP in the area of privacy protection.

OneTrust offers technology and services covering three different aspects of data protection and privacy management.

Its Privacy Management Software helps an organization manage how it collects data, and it generates compliance reports in line with how a site is working relative to different jurisdictions. Then there is the famous (or infamous) service that lets internet users set their preferences for how they want their data to be handled on different sites. The third is a larger database and risk management platform that assesses how various third-party services (for example advertising providers) work on a site and where they might pose data protection risks.

These are all provided either as a cloud-based software as a service, or an on-premises solution, depending on the customer in question.

The startup also has an interesting backstory that sheds some light on how it was founded and how it identified the gap in the market relatively early.

Alan Dabbiere, who is the co-chairman of OneTrust, had been the chairman of Airwatch — the mobile device management company acquired by VMware in 2014 (Airwatch’s CEO and founder, John Marshall, is OneTrust’s other co-chairman). In an interview, he told me that it was when they were at Airwatch — where Barday had worked across consulting, integration, engineering and product management — that they began to see just how a smartphone “could be a quagmire of information.”

“We could capture apps that an employee was using so that we could show them to IT to mitigate security risks,” he said, “but that actually presented a big privacy issue. If [the employee] has dyslexia [and uses a special app for it] or if the employee used a dating app, you’ve now shown things to IT that you shouldn’t have.”

He admitted that in the first version of the software, “we weren’t even thinking about whether that was inappropriate, but then we quickly realised that we needed to be thinking about privacy.”

Dabbiere said that it was Barday who first brought that sensibility to light, and “that is something that we have evolved from.” After that, and after the VMware sale, it seemed a no-brainer that he and Marshall would come on to help the new startup grow.

Airwatch made a relatively quick exit, I pointed out. His response: the plan is to stay the course at OneTrust, with a lot more room for expansion in this market. He describes the issues of data protection and privacy as “death by 1,000 cuts.” I guess when you think about it from an enterprising point of view, that essentially presents 1,000 business opportunities.

Indeed, there is obvious growth potential to expand not just its funnel of customers, but to add in more services, such as proactive detection of malware that might leak customers’ data (which calls to mind the recently-fined breach at British Airways), as well as tools to help stop that once identified.

While there are a million other companies also looking to fix those problems today, what’s interesting is the point from which OneTrust is starting: by providing tools to organizations simply to help them operate in the current regulatory climate as good citizens of the online world.

This is what caught Insight’s eye with this investment.

“OneTrust has truly established themselves as leaders in this space in a very short timeframe, and are quickly becoming for privacy professionals what Salesforce became for salespeople,” said Richard Wells of Insight. “They offer such a vast range of modules and tools to help customers keep their businesses compliant with varying regulatory laws, and the tailwinds around GDPR and the upcoming CCPA make this an opportune time for growth. Their leadership team is unparalleled in their ambition and has proven their ability to convert those ambitions into reality.”

Wells added that while this is a big round for a Series A it’s because it is something of an outlier — not a mark of how Series A rounds will go soon.

“Investors will always be interested in and keen to partner with companies that are providing real solutions, are already established and are led by a strong group of entrepreneurs,” he said in an interview. “This is a company that has the expertise to help solve for what could be one of the greatest challenges of the next decade. That’s the company investors want to partner with and grow, regardless of fund timing.”


OneTrust raises 0M at a .3B valuation to help organizations navigate online privacy rules

Signavio raises $177M at a $400M valuation for its business process automation solutions

Source: Tech News – Enterprise

Robotic Process Automation has been the name of the game in enterprise software lately — with organizations using advances in machine learning algorithms and other kinds of AI, alongside big-data analytics to speed up everything from performing mundane tasks to more complex business decisions.

To underscore the opportunity and growth in the market, today a startup in the wider segment of process automation is announcing a significant fundraise. Signavio, a company founded out of Berlin that provides tools for business process management — “providing the ‘P’ in RPA,” as the company describes it — has picked up an investment of $177 million at what we understand is a valuation of $400 million.

This round is large on its own, but even more so considering that before this the company — founded in 2009 — had only raised around $50 million before now, according to data from PitchBook. This latest capital injection is being led by Apax Digital (the growth equity team of Apax Partners), with DTCP. It notes that existing investor Summit Partners is also keeping a stake in the business with this deal.

The company was founded by a team of alums from the Hasso Plattner Institute in Potsdam, Germany, who used research they did there for creating the world’s first web modeller for business process management and analytics as the template for Signavio’s own Process Manager. (The name “Signavio” seems to be a portmanteau of “navigating through signals”, which essentially explains the basics of what BPM aims to do to help a business with its decision-making.)

Partly because it’s raised so little money, Signavio has been somewhat under the radar, but it has seen a huge amount of growth. It says that revenues in the last 12 months have grown by more than 70%, and its software  is used by more than one million users across 1,300 customers — with clients including SAP, DHL, Liberty Mutual, Deloitte, Comcast and Puma. It counts Silicon Valley as its second HQ these days, that trajectory will be followed further with this latest funding: Signavio says the funding in part will be going to international expansion of the business.

“10 years ago, we set out on a journey to tackle the time-consuming practices that limit business productivity,” said Dr. Gero Decker, CEO and co-founder of Signavio, in a statement. “This significant new investment further validates our approach to solve business problems faster and more efficiently, unleashing the power of process through our unique Business Transformation Suite. We are thrilled to welcome Apax Digital as our new lead partner, and look forward to building upon our success to date by leveraging our partners’ operating capabilities and global platforms for our international expansion.”

The other area of investment will be the company’s technology suite. While BPM has been around for years as a concept — and indeed there are a number of other companies that provide tools that are compared sometimes to Signavio’s such from biggies like IBM and Microsoft through to Kissflow and others — what’s interesting is how it’s had a surge of interest more recently as organizations increasingly start to add more automation into their IT infrastructure, in part to reduce the human labor needed for more mundane back-office tasks, and in part to reduce costs and speed up processes.

Robotic process automation companies like UiPath and Blue Prism bring some of the same processing tools to the table as Signavio, although the argument is that the latter — which says it helps to “mine, model, monitor, manage and maintain” customers’ data — provides a more sophisticated level of data crunching that can be used for RPA, or for other ends. (It also works with several of the big RPA players, mainly Blue Prism but also UiPath and Automation Anywhere.)

“As businesses have become more global, and workforces more distributed, business processes have proliferated, and become more complex,” noted Daniel O’Keefe, Managing Partner, and Mark Beith, Managing Director, of Apax Digital, in a joint statement. “Signavio’s cloud-native suite allows employees across an enterprise to collaborate and transform their businesses by digitizing, optimizing and ultimately automating their processes. We are tremendously excited to partner with the Signavio team and to support their vision.” The two will also be joining Signavio’s board with this round.


Signavio raises 7M at a 0M valuation for its business process automation solutions

15Five raises $30.7M to expand its employee development toolkit

Source: Tech News – Enterprise

Technology has been used to improve many of the processes that we use to get work done. But today, a startup has raised funding to build tech to improve us, the workers.

15Five, which builds software and services to help organisations and their employees evaluate their performance, as well as set and meet goals, has closed a Series B round of $30.7 million, money that it plans to use to continue building out the functionality of its core product — self-evaluations that take “15 minutes to write, 5 minutes to read” — as well as expand into new services that will sit alongside that.

David Hassell, 15Five’s CEO and co-founder, would not elaborate on what those new services might be, but he recently started a podcast with the startups “chief culture officer” Shane Metcalf around the subject of “best-self” management that taps into research on organizational development and positive psychology.

At the same time that 15Five works on productizing these principles into software form, it seems that the secondary idea will be to bring in more services and coaching into the mix alongside 15Five’s existing SaaS model.

This Series B is being led by Next47?, the strategic investment arm of manufacturing giant Siemens. Others in the round included Matrix Partners, PointNine Capital, ?Jason Calacanis’s LAUNCH Fund?, Newground Ventures, Bling Capital, Chaifetz ?Group, and ?Origin Ventures (which had led 15Five’s Series A). It brings the total raised to $42.6 million, but Hassell said that while the valuation is up, the exact number is not being disclosed.

(Previous investors in the company have included David Sacks, 500 Startups and Ben Ling.)

15Five’s growth comes at a time when we are seeing a significant evolution in how companies are run internally. The digital age has made workforces more decentralised — with people using smartphones, video communications and services like Slack to stay in constant contact while otherwise working potentially hundreds of miles from their closest colleagues, or at least not sitting in one office altogether, all the time.

All well and good, but this has also had an inevitable impact on how employees are evaluated by their managers, and also how they are able to gauge how well they are doing versus those with whom they work. So while communication of one kind — getting information across from one person to another across big distances — has seen a big boost through technology, you could argue that another kind of communication — of the human kind — has been lost.

15Five’s approach is to create a focus on building an easy way for employees to think about and set goals for themselves on a regular basis.

Indeed, “regular” is the operative word here, with key thing being frequency. A lot of companies — especially large ones — already use performance management software (other players in this space include BetterWorks, Lattice, and PeopleGoal among many others), but in many cases, it’s based around self-evaluations that you might make annually, or at six-month intervals.

15Five’s focus is on providing a service that people will use much more often than that.  all the time, by way of sending praise to each other when something positive happens (it calls these “High fives” appropriately enough), as well as regular evaluations and goals set by the employees themselves.

Hassell said in an interview that this is in tune with what modern workplaces, and younger employees, expect today, partly fuelled by the rise of social media.

“Most millennials will get feedback on what they eat for breakfast more than what they do at work,” he said. “The rest of our lives exist in a real-time feedback loop, filled with continuous in positive reinforcement, but then you go into work and have an annual or maybe biannual performance review? It’s simply not enough.” He said that he knows some millennial employees who have said that they will not work at a company if it’s not already using or planning to adopt 15Five, and since talent is the cornerstone to a company’s success this could have a significant impact.

The startup was born in San Francisco in more than one sense: it’s based there, but its principles seem to be uniquely a product of the kind of self-reflection and self-care/quality of life emphasis that has been associated with California culture for a while now, even admist the relentless march that comes with being at the epicenter of the tech world.

In that regard, its newest investor, Next47, will help put 15Five to the test, both in terms of how the product will be adopted and used at a company whose holdings are as much manufacturing as technology, and in terms of sheer size: Siemens globally has around 400,000 employees.

Matthew Cowan, a partner at the firm, noted that while Siemens is currently not a 15Five user, the thinking behind the investment was strategic and the idea will be to incorporate it into the company’s practices for helping employees’ progress.

“It’s very representative of how the workplace is transforming,” he said


15Five raises .7M to expand its employee development toolkit

KKR confirms it has acquired Canadian software company Corel, reportedly for over $1B

Source: Tech News – Enterprise

Yesterday we broke the news that Corel — the company behind WordPerfect, Corel Draw, and a number of other apps, as well as the new owner of Parallels — had itself gotten acquired by KKR. Today, the news is confirmed and official: KKR today announced that it has closed the deal, purchasing Corel from private equity firm Vector Capital.

The terms of the acquisition are not being disclosed, but when the first rumors of a deal started to emerge a couple of months ago, the price being reported was over $1 billion.

Corel may not be the first name you think of in the world of apps and software today. Founded in the 1980s as one of the first big software companies to capitalize on the first wave of personal computer ownership, it tried to compete against Microsoft in those early days (unsuccessfully), and has seen a lot of ups and downs, including two retreats from the stock market, an insider trading scandal, and patent disputes (and even detentes) with its onetime rival.

But in more recent years it has, under the radar, built itself to be a solid and — in these days of startups that claim to intentionally operate at a loss for years in order to scale — profitable business with 90 million users. (Vector had said in the past that Corel had paid dividends of $300 million over the years it’s owned the company.)

Founded in the days when you went to electronics store and bought physical boxes of software with installation disks and hefty manuals, Corel has brought itself into the modern era, with acquisitions like Parallels — a virtualization giant that lets businesses run far-flung and very fragmented networks as if they weren’t — underscoring that strategy.

And that is where KKR appears to be putting its focus. In the memo that a source passed us yesterday, Corel’s CEO Patrick Nichols assured staff that there would be no layoffs and that this acquisition would mean a significant new infusion of capital both to expand its existing business as well as to make more acquisitions to grow. (As we pointed out yesterday, there are a lot of very promising software startups in the market today, and not all of them will scale on their own, so that could present interesting opportunities for companies like Corel.)

“Corel has differentiated itself by offering an impressive portfolio of essential tools and services for connected knowledge workers – across devices, operating systems, and a range of fast-growing industries. KKR looks forward to working together with management to drive continued growth across its existing platforms while leveraging the team’s extensive experience in M&A to deliver a new chapter of innovation and growth on a global scale,” said John Park, Member at KKR, in a statement.

That’s not to say that Corel does not have a specific strategy in mind. The company has apps and services today in three verticals serving consumers (mostly “prosumers”) and so-called knowledge workers: Creativity, Productivity, and Desktop-as-a-Service. That will likely be the trajectory that it will continue to pursue as it looks for more growth.

Although Vector is known as a tech investor, KKR is another step up in to the “bigger” leagues, and so it will be interesting see what Corel can do with the larger coffers, and the larger network of contacts, that KKR will bring to the table.

“KKR recognizes the value of our people and their impressive achievements, especially in terms of our commitment to customers, technology innovation, and our highly successful acquisition strategy. With KKR’s support and shared vision, our management team is excited by the opportunities ahead for our company, products, and users,” said Patrick Nichols, CEO of Corel, in a statement.

If reports of the acquisition price are accurate, that would represent a big premium to Vector: over the last 16 years the PE firm had acquired, taken public, and reacquired Corel, paying no more than $124 million for the company in those two acquisitions (the second time, it paid just $30 million).

“Corel has been an important part of the Vector Capital family for many years and we are pleased to have achieved a fantastic outcome for our investors with the sale to KKR,” said Alex Slusky, Vector Capital’s Founder and Chief Investment Officer, in a statement. “Under Vector’s ownership, Corel completed multiple transformative acquisitions, grew revenue and meaningfully improved profitability, highlighting Vector’s proven strategy of partnering with management teams to position companies for long-term success.  We are confident the company has found a great partner with KKR and wish them continued success together.”

 


KKR confirms it has acquired Canadian software company Corel, reportedly for over B

KKR has acquired Corel (including its recent acquisition Parallels), reportedly for $1B+

Source: Tech News – Enterprise

Only six months after snapping up virtualization specialist Parallels, Canadian software company Corel is itself getting acquired. TechCrunch has learned and confirmed with multiple sources that private equity giant KKR has closed a deal to buy the company from Vector Capital, which has owned some or all of Corel since 2003.

KKR’s interest in Corel was first rumored in May, when PE Hub reported the two were in talks for a sale valued at over $1 billion. At the time, representatives of Corel declined to comment, although our sources inside the company indicated that the reports were not inaccurate.

Fast-forward to today, and both KKR and and a spokesperson for Parallels/Corel declined to comment. But, we now have a copy of the memo provided by an internal source that has been sent out to staff announcing that the deal has indeed closed, and that Corel is now officially part of the KKR family of companies.

According to the memo, KKR is very optimistic about Corel’s prospects. It plans to give Corel an “infusion of capital” to accelerate its growth, which will go into two areas. First will be expanding operations for the existing business: Corel is the company behind a number of longstanding software brands including WordPerfect, Corel Draw, WinZip, PaintShop Pro. Second will be making acquisitions (and the sheer proliferation of promising startups in the last decade dedicated to all variety of apps and other software that may have found it a challenge to scale means Corel could have rich pickings).

There are no layoffs planned as part of the deal, and the official announcement had been planned to go out next week, but now looks like it may be moved up to tomorrow (Wednesday).

Vector and Corel itself have never publicly disclosed much on user numbers or financials, but Vector has described the company as “highly profitable,” with dividends of more than $300 million to date. The memo we’ve seen notes that Corel (including Parallels) has millions of customers across its various software platforms and apps.

The acquisition of Corel by KKR marks another chapter in the company’s long corporate history.

Founded in the 1980s — when personal computers were just starting to enter the mainstream but well before we had anything like the internet (not to mention the world of cloud-based apps) that we know today — Corel once positioned itself as a potential competitor to Microsoft in the software wars.

When Corel purchased WordPerfect from Novel in 1996, Corel founder Michael Cowpland viewed the software package as an integral part of that rivalry, describing it as the Pepsi to Microsoft’s Coke — that is, Word.

Microsoft proved the mightier of the two, and it even eventually signed a partnership with Corel that saw it investing in the company: a sell out, as one disappointed Canadian journalist described it at the time. The two have also sparred over patents.

Corel, which went public early in its life, got battered in the first dot-com bust (which was not helped by an insider trading scandal that led to Cowpland’s departure). Vector stepped in and took it private in 2003.

After restructuring the company, Vector listed Corel again in 2006. But, amid another recession that again hit Corel hard, it once more took it private in 2010. In the intervening years, Corel has been focused on modernising its offerings, bringing in e-commerce, direct downloads, subscriptions and acquisitions to bring the company’s products and wider business closer to how consumers and workers use computers today.

Parallels was a part of that strategy: its products help people work seamlessly across multiple platforms, letting employees (and IT managers) run a unified workflow regardless of the device or operating system, with Parallels providing support for Windows, Mac, iOS, Android, Chromebook, Linux, Raspberry Pi and cloud — a timely offering in the current, fragmented IT market.

If the $1 billion+ figure is accurate, that strategy seems to have worked: across the two times that Vector took Corel private, it never paid more than $124 million for the company (the second time, as its stock was tanking, it paid just $30 million).


KKR has acquired Corel (including its recent acquisition Parallels), reportedly for B+

Kabbage secures $200M to fuel its AI-based loans platform for small businesses

Source: Tech News – Enterprise

Kabbage, the AI-based small business loans platform backed by Softbank and others, is adding more firepower to its lending machine: the Atlanta-based startup has secured an additional $200 million in the form of a revolving credit facility from an unnamed subsidiary of a large life insurance company, managed and administered by 20 Gates Management, and Atalaya Capital Management.

The money comes on the heels of a $700 million securitization Kabbage secured just three months ago and it is notable not just for its size but its terms: it’s a four-year facility, a length of time that underscores a level of confidence in the company’s performance.

Kabbage, which loans up to $250,000 in a single deal to small and medium businesses, has built a platform that harnesses the long tail of big data from across the web. It uses not just indicators from a company’s own public activities, but it also sources comparative information from across a wider group of similar companies, with “2 million live data connections” currently helping to feed its algorithm.

Together, these help Kabbage determine whether to provide the loans, and at what rates. Notably, the whole process takes mere minutes, making Kabbage disruptive to the traditional route of applying for loans from banks, which can come at higher rates, often take longer to close and may never get approved.

The company was last valued at $1.2 billion in its most recent equity round from the Vision Fund in 2017, with about $500 million raised in equity to date from it and other investors including BlueRun Ventures, Mohr Davidow Ventures. Rob Frohwein, the co-founder and CEO, confirmed to me via email that there are “no plans on the equity side right now.” We’ve asked about IPO plans and will update if we learn anything more on that front.

More importantly, alongside its equity story is the company’s business story: Kabbage has to date loaned out $7 billion in capital — amassed through securitizations and other facilities alongside that — to 185,000 businesses, and the company has seen an acceleration of business activity over the last two years. Nearly $700 million was loaned out in Q2 of this year, passing the record in Q1 of $600 million. This puts Kabbage on track to loan out between $2.4 billion and $3 billion this year.

“This transaction further diversifies Kabbage’s committed sources of funding and prepares us to meet the escalating demand for capital access among small businesses,” said Kabbage Head of Capital Markets, Deepesh Jain, in a statement. “2019 has proven to be a tide-shifting year as customers accessed more than $670 million from Kabbage in Q2 2019, well surpassing our previously set record last quarter.”

While a lot of Kabbage’s business has come out of its direct consumer relationships, it’s also been expanding by way of more third-party relationships. It has white-label partnerships with banks to power their own loans offerings for SMBs, and earlier this year it was also tapped by e-commerce giant Alibaba to provide loans to its small business customers of up to $150,000 to help finance purchases, part of the latter company’s redoubled efforts to build out its business in the US by way of its quiet acquisition of OpenSky.


Kabbage secures 0M to fuel its AI-based loans platform for small businesses

Tara.ai, which uses machine learning to spec out and manage engineering projects, nabs $10M

Source: Tech News – Enterprise

Artificial intelligence has become an increasingly important component of how a lot of technology works; now it’s also being applied to how technologists themselves work. Today, one of the startups building such a tool has raised some capital, Tara.ai, a platform that uses machine learning to help an organization get engineering projects done — from identifying and predicting the work that will need to be tackled, to sourcing talent to execute that, and then monitoring the project of that project — has raised a Series A of $10 million to continue building out its platform.

The funding for the company cofounded by Iba Masood (she is now CEO) and Syed Ahmed comes from an interesting group of investors that point to Tara’s origins, as well as how it sees its product developing over time.

The round was led by Aspect Ventures (the female-led firm that puts a notable but not exclusive emphasis on female-founded startups) with participation also from Slack, by way of its Slack Fund. Previous investors Y Combinator and Moment Ventures also participated in the round. (Y Combinator provides an avenue to companies from its cohorts to help them source their Series A rounds, and Tara.ai went through this process.)

Tara.ai was originally founded as Gradberry out of Y Combinator, with its initial focus on using an AI platform for organizations to evaluate and help source engineering talent: Tara.ai was originally that name of its AI engine.

(The origin of how Masood and Ahmed identified this problem was through their own direct experience: both were engineering grads from the American University of Sharjah in the U.A.E. that had problems getting hired because no one had ever heard of their university. Even so, they had won an MIT-affiliated startup competition in Morocco and relocated to Boston. The idea with Gradberry was to cut through the big names and focus just on what people could do.)

Masood and Syed (who eventually got married) eventually realised that using that engine to evaluate the wider challenges of executing engineering projects came as a natural progression once the team started digging into the challenges and identifying what actually needed to be solved.

A study that Tara conducted across some 5,000 projects found that $66 billion dollars were identified as “lost” due to projects running past the expected completion time, lack of adequate talent and just overall poor planning.

“We realised that recruiting was actually the final decision you make, not the first, and we wanted to be involved earlier in the decision-making process,” Masood said in an interview. “We saw a much bigger opportunity looking not at the people, but the whole project.”

In action, that means that Tara.ai is used not just to scope out the nature of the problem that needed to be solved, or the goal that an organization wanted to achieve; it is also used to suggest which frameworks will need to be used to execute on that goal, and then suggest a timeline to follow.

Then, it starts to evaluate a company’s own staff expertise, along with that from other recruiting platforms, to figure out which people to source from within the company. Eventually, that will also be complemented with sourcing information from outside the organization — either contractors or new hires.

Masood noted that a large proportion of users in the tech world today use Jira and platforms like it to manage projects. While there are some tools in Jira to help plan out projects better, Tara is proposing its platform as a kind of virtual project manager, or an assistant to an existing project manager, to conceive of the whole project, not just help with the admin of getting it done.

Notably, right now she says that some 75% of Tara.ai’s users — customers include Cisco, Orange Silicon Valley and Mower Digital — are “not technical,” meaning they themselves do not ship or use code. “This helps them understand what could be considered and the dependencies that can be expected out of a project,” she notes.

Lauren Kolodny, the partner at Aspect who led the investment, said that one of the things that stood out for her, in fact, with Tara.ai, was precisely how it could be applied exactly in those kinds of scenarios.

Today, tech is such a fundamental part of how a lot of businesses operate, but that doesn’t mean that every business is natively a technology one (think here of food and beverage companies as an example, or government agencies). In those cases, these companies would have traditionally had to turn to outside consultants to identify opportunities, and then build and potentially long-term operate whatever the solutions become. Now there is an opportunity to rethink how technology is used in these kinds of organizations.

“Projects have been hacked together from multiple systems, not really built in combination,” Kolodny said of how much development happens at these traditional businesses. “We are really excited about the machine learning scoping and mapping of internal and external talent, which is looking to be particularly important as traditional enterprises are required to get level with newer businesses, and the amount of talent they need to execute on these projects becomes challenging.”

Tara.ai’s next steps will involve essentially taking the building blocks of what you can think of as a very power talent and engineering project search engine, and making it more powerful. That will include integrating databases of external consultants and figuring out how best to have these in tandem with internal teams while keeping them working well together. And soon to come also will be bug prediction: how to identify these before they arise in a project.

The Slack investment is also a notable nod to what direction Tara.ai will take. Masood said that Slack was one of three “big tech” companies interested in investing in this round, and she and Syed chose Slack because from what they could see of its existing and target customers, many were already using it and some have already started requesting closer collaboration so that events in one could come up as updates in the other.

“Our largest customers are heavy Slack users and they are already having conversations in Slack related to projects in Tara.ai,” she said. “W are tackling the scoping element and now seeing how to link up even command line interfaces between the two.”

She noted that this does not rule out closer integrations with communications and other platforms that people use on a daily basis to get their work done: the idea is to become a tool to work better overall.


Tara.ai, which uses machine learning to spec out and manage engineering projects, nabs M

Orderful nabs $10M from A16Z to modernise the B2B supply chain network

Source: Tech News – Enterprise

The march of globalization continues unabated, and with it comes a growing demand for companies of all sizes to communicate with and sell to each other, regardless of the distance or any other barrier. Now, a startup that has built a platform to help them do that better and more cheaply is announcing a round of funding to capitalize on the opportunity. Orderful, which aims to modernize supply chain management through an API-based cloud service, has raised $10 million in a Series A from Andreessen Horowitz.

The new funding comes on the back of a previous seed round from Initialized Capital and a period of time mostly bootstrapping the business. It will be used to continue building out more functionality on the platform and to continue to expand the network of partners using it. Today there are 1,000 retailers, 10,000 vendors and 5,000 carriers on Orderful’s platform, but even that still only represents a small part of the wider industry of businesses that buy, sell and transport components and full products from A to B.

To understand the problem that Orderful is trying to fix, a little rundown on how supply chain management works today is helpful. In the old, pre-computer days, all information exchange happened by way of phone, fax, post, and documents that often were delivered along with goods, which all required manual assessment and recording.

The rise of computers and the internet did push that system into the digital world, but only just: electronic data interchange (EDI), as this general area is known, is a loosely organised set of technical standards to use computers to communicate this data between businesses to enable purchases, make accounting reconciliations, and transfer shipping details.

It’s a business that has boomed with the growth of globalization and companies trading with each other at an increasing pace. Supply chain management software is a market that ballooned to $14 billion in value in 2018, according to Gartner. Incumbent leaders include the likes of SAP, Oracle and JDA.

The problem is that EDI is actually not as easy as it ought to be. It’s a hodge-podge of standards, you usually need a team of specialists to integrate the services at each end point, and it doesn’t allow for a wider network effect that you might get from being “online” with one supplier already. All of that translates to it being actually quite slow and expensive.

Erik Kiser, the founder and CEO of Orderful, found and identified this inefficiency while he was working as one of those specialists, realizing that with the rise of APIs, large database technology and cloud-based software-as-a-service, there was an opportunity to build a new kind of platform that could do everything that EDI did, but on a supercharged basis.

Marc Andreessen (co-founder of A16Z) coined the phrase ‘software will eat the world,’ Kiser noted to me, “But actually software eats software sometimes, too.”

The idea behind Orderful is that it has created a series of APIs that can adapt to whatever systems a business is already using, in turn “translating” that business’s product and other data into information that can be imported into the Orderful platform to in turn be picked up by buyers, sellers, and shippers.

(In other words, there is no expectation of ripping out legacy systems, but simply creating bridges to migrate what is already there to newer and better platforms.) This also brings down the operational costs of hiring teams to build and potentially run EDI integrations.

“EDI predates the internet, and there are not many digital protocols that we use today that are pre-internet,” David Ulevitch, the partner at Andreessen Horowitz who led the investment and joined the board, said in an interview.

“Orderful, and Erik, recognised that as more commerce was becoming digital, there needed to be a better way to do all this. There is currently no SaaS company out there addressing this and removing the friction. It provides velocity between distributors and producers because when you connect once you can then trade with a number of partners. Time is up for EDI.”

While there may be no direct competitor to Orderful at the moment, there are a lot of potential players that I can see posing a challenge down the line (or potentially working with or even buying Orderful if not). They include the incumbents in supply-chain management like Oracle, SAP and the rest.

But also companies like Amazon, which has built its own EDI alternative (or version, you might say) that is used for its own management of suppliers. The company is very well known for building for itself, and then productizing, but for now Kiser says that it’s a partner, and customers can interface and sell to Amazon on Orderful using its APIs.

One thing that Amazon is instructive about, though, is when considering how Orderful’s data trove could be used for more analytics and business intelligence down the line.

“I don’t think companies not doing business with Amazon will be inclined to use its platform for trading,” Kiser said. “But they do have a lot of information about their network.”

Indeed, he pointed out that it’s been said there are some 30 economists at the company looking at its B2B supply chain data, and considering how it can be parsed for example to predict inflation.

“They are already using the data. With Orderful we have the opportunity to be the most influential software company if we can be the plumbing that connects companies,” Kiser said. “There are a ton of services that we can add on the platform and that’s where we are going even if right now we are focused on the plumbing and simply making it easy to trade data.”

 


Orderful nabs M from A16Z to modernise the B2B supply chain network