Home run exits happen stealthily for biotech

Startup exit tallies commonly underestimate biotech returns. Unlike most tech deals, the biggest profits in bio often come long after an IPO or acquisition.

Take Juno Therapeutics, a publicly traded cancer immunology company that sold to pharma giant Celgene this year for $9 billion. At first glance, it doesn’t seem like a deal that would impact Juno’s early investors.

After all, Juno went public back in 2014. Though the Seattle company raised more than $300 million as a private company, pre-IPO backers had years to cash out at healthy multiples.

Yet some held on. Bob Nelsen, managing director of ARCH Venture Partners, Juno’s largest VC backer, told Crunchbase News that his firm was still holding nearly its entire 15 percent pre-IPO stake when Celgene bought the company.

In the end, the acquisition netted ARCH’s limited partners 23 times their money, bringing in close to a billion dollars. It’s an exceptional return, even by venture home run standards.1

“We tend to distribute on milestones, not financing events,” Nelsen said of his firm’s approach to exiting a portfolio investment. That often means holding for years after an IPO awaiting positive clinical trial outcomes or other value-creating inflection points.

For public companies, that can be done over time or all at once, and usually comes in the form of company shares rather than cash.

So when is it an exit?

It’s outcomes like Juno that help explain why life sciences, despite bringing fewer first-day IPO pops and buzz-generating unicorn exits than the tech sector, still consistently attracts roughly a third of venture investment. Big exits do happen. But oftentimes it’s not with a lot of fanfare and usually not with a public market debut.

“I don’t think IPOs are ever an exit in biotech. It’s always a financing event,” Nelsen says. While ARCH may hold shares longer than the typical VC, he says it’s not uncommon to hang on the stakes for a while post-IPO.

That IPO-and-hold strategy appears to have worked out well for the firm on other occasions. Other portfolio companies that went public and were later acquired for multiple billions include Receptos, a drug developer, and Kythera Biopharmaceuticals, best known for an injectable to reduce chin fat.

Using Crunchbase data, we looked to see how common it is for a venture-backed biotech company to go public and then sell a few years later for multiple billions. We found at least eight examples of companies selling for $2 billion or more in the past five years that went public less than four years before the acquisition. (See list here.) Altogether, these acquisitions were valued at more than $47 billion.

Racking up post-IPO gains

It’s also not uncommon for biotech startups to grow into multi-billion dollar public companies a few years after IPO.

Using Crunchbase data, we put together a list of a dozen life science companies that went public in roughly the past five years and have recent market values ranging from $1.5 billion to nearly $9 billion. (This is a sampling, not a comprehensive data set, and was assembled based on exits of several top-tier life science VCs.)

On top was gene therapy juggernaut Bluebird Bio, which has seen a seven-fold rise in its stock price since going public five years ago. Next was Sage Therapeutics, a developer of therapies for central nervous system disorders, up more than six-fold since its IPO four years ago, reaching a market cap of nearly $8 billion.

Then on the device side there’s Inogen, a maker of portable oxygen concentrators for patients with respiratory ailments. It went public at a valuation of less than $300 million in 2014. Today it’s worth around $4.3 billion.

Yes, it’s true tech stocks can see massive gains a few years after going public, too. But the drivers are usually different. In tech, a company may see its stock jump after a big rise in sales, but it probably had sales in prior quarters. The business hasn’t fundamentally changed; it’s just improved.

Moreover, tech venture capitalists do generally consider an IPO an exit. While insiders usually can’t sell shares immediately, they’re typically comfortable liquidating when they can around the IPO price.

For bio, hitting key milestones changes the entire value proposition. A company can go from having no marketable product and no sales to quickly having one or both of those things.

Milestones and money

Returns from biotech startup M&A exits are also hard to pin down because of the widespread use of milestone payments. Buyers pay an upfront price with the agreement of more to come following favorable clinical trial results and a commercially successful therapy.

Often, it’s several multiples more to come if milestones are met. Take Impact Biomedicines, one of this year’s biggest private company exits. Celgene bought the company for $1.1 billion. However, the deal could be valued at up to $7 billion over time.

But the probability of hitting all the milestones seems low. To get the full $7 billion, global annual net sales of Impact’s therapies would have to exceed $5 billion. However, some milestones look more feasible, such as a $1.25 billion payment for obtaining regulatory approval.

This kind of deal structure is pretty common, and not just for M&A. A study by medical news site STAT analyzed nearly 700 biotech licensing deals and found that, on average, just 14 percent of the total announced value was paid out up front.

As with returns from post-IPO acquisitions, it’s hard to gauge just how well investors end up doing on these milestone-based purchases. The largest payoffs can be years down the road.

The opposite of tech

If it seems like the dynamics of a bio exit are, in many ways, the opposite of a tech exit, it’s worth considering how different the two sectors are at the early stages, too.

In the tech startup world, it’s common for a company to launch with an idea that sounds silly (tweeting, scooter sharing, air mattress rentals) and then suddenly be worth billions.

Bio companies are kind of the reverse. Practically every one sounds like a great idea (curing cancer, alleviating pain, treating neurodegenerative disease), and many turn out to be worth nothing. Investments that work out, however, may take a while, but eventually deliver in a big way.

  1. Making 23 times your money back is exceptional at all stages of investment. However, when it does happen, it’s most common at the seed stage for investment, where investors put in single digit millions or less. In the case of ARCH, 23X it is a particularly high return because it encompasses all the rounds Juno raised before going public.

Browser maker Opera successfully begins trading on NASDAQ

Opera is now a public company. The Norway-based company priced its initial public offering at $12 a share — the company initially expected to price its share in the $10 to $12 price range. Trading opened at $14.34 per share, up 19.5 percent. The company raised over $115 million with this IPO.

Opera Ltd. filed for an initial public offering in the U.S. earlier this month. The company is now trading on NASDAQ under the ticker symbol OPRA.

Chances are you are reading this article in Google Chrome on your computer or Android phone, or in Safari if you’re reading from an iPhone. Opera has a tiny market share compared to its competitors. But it’s such a huge market that it’s enough to generate revenue.

In its F-1 document, the company revealed that it generated $128.9 million in operating revenue in 2017, which resulted in $6.1 million in net profit.

The history of the company behind Opera is a bit complicated. A few years ago, Opera shareholders decided to sell the browser operations to a consortium of Chinese companies. The adtech operations now form a separate company called Otello.

Opera Ltd., the company that just went public, has a handful of products — a desktop browser, different mobile browsers and a standalone Opera News app. Overall, around 182 million people use at least one Opera product every month.

The main challenge for Opera is that most of its revenue comes from two deals with search engines — Google and Yandex. Those two companies pay a fee to be the default search engine in Opera products. Yandex is the default option in Russia, while Google is enabled by default for the rest of the world.

The company also makes money from ads and licensing deals. When you first install Opera, the browser is pre-populated with websites by default, such as eBay and Booking.com. Those companies pay Opera to be there.

Now, Opera will need to attract as many users as possible and remain relevant against tech giants. Opera’s business model is directly correlated to its user base. If there are more people using Opera, the company will get more money from Google, Yandex and its advertising partners.

Facebook acquires Redikix to enhance communications on Workplace by Facebook

Facebook had a rough day yesterday when its stock plunged after a poor earnings report. What better way to pick yourself up and dust yourself off than to buy a little something for yourself. Today the company announced it has acquired Redkix, a startup that provides tools to communicate more effectively by combining email with a more formal collaboration tool. The companies did not reveal the acquisition price.

Redkix burst out of the gate two years ago with a $17 million seed round, a hefty seed amount by any measure. What prompted this kind of investment was a tool that combined a collaboration tool like Slack or Workplace by Facebook with email. People could collaborate in Redkix itself, or if you weren’t a registered user, you could still participate by email, providing a more seamless way to work together.

Alan Lepofsky, who covers enterprise collaboration at Constellation Research, sees this tool as providing a key missing link. “Redkix is a great solution for bridging the worlds between traditional email messaging and more modern conversational messaging. Not all enterprises are ready to simply switch from one to the other, and Redkix allows for users to work in whichever method they want, seamlessly communicating with the other,” Lepofsky told TechCrunch.

As is often the case with these kinds of acquisitions, the company bought the technology  itself along with the team that created it. This means that the Redikix team including the CEO and CTO will join Facebook and they will very likely be shutting down the application after the acquisition is finalized.

After yesterday’s earning’s debacle, Facebook could be looking for ways to enhance its revenue in areas beyond the core Facebook platform. The enterprise collaboration tool does offer a possible way to do that in the future, and if they can find a way to incorporate email into it, it could make it a more attractive and broader offering.

Facebook is competing with Slack, the darling of this space and others like Microsoft, Cisco and Google around communications and collaboration. When it launched in 2015, it was trying to take that core Facebook product and put it in a business context, something Slack had been doing since the beginning.

To succeed in business, Facebook had to think differently than as a consumer tool, driven by advertising revenue and had to convince large organizations that they understood their requirements. Today, Facebook claims 30,000 organizations are using the tool and over time they have built in integrations to other key enterprise products and keep enhancing it.

Perhaps with today’s acquisition, they can offer a more flexible way to interact with platform and could increase those numbers over time.

Guild Education raises $40M to offer employees education as a company perk

Recruiting, hiring and retention can be one of the most costly parts of a company’s entire operation, and there’s a class of startups and companies that are increasingly getting funded to try to optimize one or more of those problems all at once — including a new big round for employee education platform Guild Education.

Guild Education is just one of an array of companies looking to capitalize on the opportunity to help employers educate their existing workforce and identify employees who might fill the talent gaps with a little bit of training — as well as having a nice retention perk as well. Guild Education helps employers work with nonprofit universities to provide employees with education across a variety of subject matter or credentials, ranging from high school completion and vocational programs to bachelor’s and master’s degrees. All this is designed to offer companies a way to ensure that employees feel like they have a vested interest in their future, and retain them with that kind of perk.

Guild Education said it has raised a $40 million financing round led by Felicis Ventures, with participation by Salesforce Ventures, Workday Ventures, Rethink Impact & Education, and Silicon Valley Bank. Existing investors Bessemer Venture Partners, Redpoint Ventures, Harrison Metal, and Cowboy Ventures also participated in the round, and Felicis’ Wesley Chan will be joining the company’s board of directors. The company says its programs are currently available to 2.5 million working adults and gives access to classes, programs and degrees at more than 90 universities and learning providers.

“Most of our companies see an ROI on the employee investment within the first year or two,” CEO Rachel Carlson said. “Here’s why: on an incremental basis, our programs simply need to cost less than the cost of losing a high performing employee and hiring and training their replacement. We accomplish that by partnering with affordable, nonprofit universities and focusing with them on dual retention: helping employees succeed at school and at work… Companies with frontline workforces struggle with annual turnover rates well above 50%. So for our companies, a 4-year retention rate is a phenomenal outcome, and they’re thrilled to see that employee move on to their next job after completing a degree.”

If the model sounds somewhat familiar, it’s because there have already been a number of successful companies creating a lot of buzz in the area — and clearly a lot of appetite for a business like Guild’s. Pluralsight, for example, gives companies a way to courses to employees to help them pick up new software engineering skills and went public earlier this year. It isn’t exactly the same model as Guild, but it does indicate that there is a pretty substantial opportunity for tools that help workforces further educate their employees, getting more value out of them and helping them advance in their careers. Given that the hiring and recruiting process can be a time-intensive and expensive one (there are even startups focusing machine learning efforts for recruiting), it might make sense to see if the right person for a job is already within a company. That helps companies get the skills they need and build loyalty with that employee.

While Guild Education is going after the larger companies out there to offer those perks, there’s another one that’s already interesting enough: the wave of contract employees that work with companies like Lyft or Uber, who also might want a similar perk but operate on a different model that isn’t full-time. Carlson said the startup works with companies like Lyft to figure out how to offer those kinds of education benefits to “gig economy” employees as well, though the benefits are traditionally designed for W2 employees since the benefit is non-taxable on both ends.

There will certainly be some competition from online course marketplaces like Udacity or Coursera, which look to offer another way for employees to pick up new skills on their own time and charge a monthly fee for that. But by going through employers to offer that benefit (to be sure, some companies like Lynda.com already do this), Guild Education may be able to streamline the process in such a way that employees get access to already known entities like nonprofit universities in order to get the education they seek.

League raises $47.1M Series B to fix corporate health care benefits

League founder and CEO Michael Serbinis

League, an online platform that wants to reduce the strain of managing health benefits for companies and employees alike, announced today that it has raised a $62 million CAD (about $47.1 million USD) Series B. The round was led by TELUS Ventures, with participation from Wittington Ventures and returning investors OMERS, Infinite Potential Group, RBC Ventures and BDC Ventures.

The Toronto-based startup’s last round of funding was a $25 million Series A two years ago. With clients like Uber, Shopify and Unilever, League is currently one of the bigger players in the “employee wellness space,” which encompasses a roster of startups dedicated to boosting retention and productivity rates by improving health benefits. The growth of the sector is fueled by competition for top talent, the rising cost of healthcare and increasing awareness of mental health issues.

League was launched in 2014 by serial entrepreneur Michael Serbinis, who was previously founder and CEO of Kobo, the Kindle competitor acquired by Rakuten in 2011. Serbinis tells TechCrunch that his interest in health technology was sparked by a conversation about healthcare inefficiencies with Patrick Soon-Shiong, the pharmaceutical entrepreneur and NantHealth founder probably better known outside of biotech circles as the newest owner of the Los Angeles Times. Serbinis says Soon-Shiong told him that the healthcare system needed to be fixed by someone outside of the industry, who was able to take a fresh, consumer-driven approach.

“I got into it naively not being a healthcare person, with not even a biology class anywhere in my past, and I very quickly realized that most people think about healthcare through the lens of health insurance, i.e. can I do it, can I afford it?” Serbinis, League’s CEO, says. “The more I learned about it, the more I realized how broken it is. In the U.S. and Canada and Western European nations, healthcare gets more expensive, but you get less and less, and no one loves the experience.”

He notes that health benefits “are a top three requirement for anyone seeking a new job in the U.S. today and for millennials it’s the top one or two, depending on the survey.” At the same time, healthcare is also one of the top three expenses for companies.

While there is a growing roster of startups, including Spring Health, Lyra Health and Lumity, tackling different corporate healthcare issues, Serbinis felt the space was still missing “an end-to-end platform that fits on top of health insurance providers and underwriters, to give employers a way to offer a competitive solution in the war for talent and saving money.”

League’s mission is to let employees take more control over their health plans, while reducing costs for companies by providing a HIPAA-compliant platform that connects all benefits. This enables employees to manage their health plan and benefits with League’s chat-based online assistant and a digital wallet. They also gain more transparency into things like health insurance pricing and flexible spending accounts. League partners with other companies to offer perks like ClassPass or Headspace discounts, prescription delivery services or access fertility treatments that aren’t covered by traditional insurance plans.

On the other end, companies get analytics to help them design healthcare plans and see if the benefits they offer are actually improving employee morale.

Serbinis says League’s ease of use is proven by its high engagement rate. The company claims three-quarters of users log onto the platform each month, and of that number, many access it five to 20 times a month.

One interesting aspect of League’s story is that Amazon, Berkshire Hathaway and JP Morgan are currently making headlines for a new joint health care initiative. While the venture will start by overhauling health benefits at those three organizations, it is being closely watched because of its potential influence on the health care industry. Thanks to Kobo, which was once Kindle’s top competitor, Serbinis already has experience going head-to-head with Amazon.

After learning about the triumvirate’s plans, Serbinis says he emailed Bezos. “I said I love the initiative and would love to help out, because for the most part, what people expect in the short-term is really aggregate purchasing power and driving costs down there. But ultimately, I expect a lot more from them, and the idea of bringing strategic assets and capability, a big pool of employees and technology together is the right strategy,” he says. “I can see Amazon looking for a partner like League.”

He adds that the joint initiative will light a fire in the sector. “I see new entrants into this market accelerate because of Amazon. It really has opened people’s eyes to the idea that this is a massive problem,” Serbinis says. “I see a lot of people getting into the game because of Amazon leading the way, and what I’ve seen already is incumbent players trying to speed up and accelerate their innovation programs.”

In a media statement, TELUS Ventures managing partner Rich Osborn said “We believe that innovative companies like League–which deliver compelling, consumer-centric experiences–will not only drive high employee and employer engagement, but will also deliver fundamental improvements in health outcomes for Canadians through their carrier-friendly open platform.”

The company’s Series B will be used to open offices in San Francisco, New York and London. League launched in the United States in 2017, starting with an office in Chicago, and is now licensed to operate in all 50 states. Serbinis says one of the markets that will help its American expansion are employers with less than 50 “full-time equivalent” employees who aren’t mandated to provide coverage under the Affordable Care Act, but still need to offer health benefits in order to attract talent. Another new opening is the recent Department of Labor ruling on “association health plans” that makes it easier for small businesses in the same sector to team up and buy employee health insurance together.

League also plans to begin operating in the United Kingdom and European Union next year, which will make it easier to attract multinational clients who want to use the same platform to manage health benefits in different countries.

“When you think about the future of health insurance, it’s easy to think about more of the same, but with a better website or app,” says Serbinis. “But the fact is that the future of health insurance is not just about insurance, but health and there is the idea of focusing on consumers and delivering personalized experiences, a digital experience that is data driven and helps them every day, instead of waiting to the point where they are sick and have to go to a website under duress to find out what to do.”

Industrial robots startup Gideon Brothers raises $765K led by TransferWise co-founder

Gideon Brothers, an ambitious startup out of Croatia that is building autonomous robots to put to work in warehouses and other industrial logistics, has quietly raised $765,000 in funding.

The round is led by TransferWise co-founder Taavet Hinrikus, who has become an increasingly active investor, recently backing fintech Cleo, legal tech startup Juro, and satellite company Open Cosmos. Ex-Wired U.K. editor David Rowan and a number of unnamed Croatian angels have also participated in Gideon Brothers’ seed round.

Founded in early 2017 and comprising a 40-plus team of deep learning and robotics experts — which includes 5 PhDs and 27 Masters of Hardware and Software engineering and other related disciplines — the company is developing an AI-powered robot for various industrial applications.

Dubbed “The Brain,” the technology combines 3D computer vision and deep learning to enable Gideon Brothers’ robots to be aware of their environment and operate autonomously, similar to self-driving vehicles.

“We have been developing a technology we call a ‘robot brain’,” co-founder and CEO Matija Kopic tells me. “We believe that robots of the future will rely on the same type of vision that you and I rely on, which is basically stereo vision. We’ve deployed deep learning on top of stereo vision to give our robots a new type of perception of their environment”.

The startup’s first product is described as an “autonomous and modular intralogistics robot” that is capable of safely handling large pallets in manufacturing, warehouse and commercial environments. It is designed to work alongside humans, with minimal changes to a facility, negating the need for prohibitively expensive retrofitting or investing in brand new robot-enabled buildings, which is the route that Amazon has gone down.

More broadly, Gideon Brothers wants to help address current labour shortages in industrial logistics. Citing a research brief by DHL, Gideon Brothers says that demand for supply chain professionals exceeds supply by a ratio of six to one. The work is often painstakingly dull and physically demanding, meaning that turnover can be as high as 40 percent.

“[We use] a combination of camera-based 3D vision, primarily powered by deep learning algorithms to make sure that our robot, whatever it ends up doing, is aware of its surroundings and the dynamics that exist in these old school industrial facilities which are not highly structured or highly organised like, for example, e-commerce environments are,” adds Kopic.

“We are targeting the remaining 90 percent of the world’s industrial facilities that are completely old school, traditional and centered around human beings as the drivers of those facilities and the business model”.

In practice, this means that instead of workers rushing around a warehouse taking orders from a computer-generated voice or a scanner, and then moving several tons of product around (the so-called “man-to-goods” model), the Gideon Brothers’ robot brings the goods to the worker. It receives instructions from the Gideon Brothers fleet management system, which is integrated into an operator’s Warehouse Management System.

“It goes to the pallet position it has been sent to, lifts it off the frame it is sitting on and transports the entire pallet to a commissioning or “picking” area where workers take the product that need to be packed onto another customer-specific pallet. The robot then returns the original pallet back to its original position – autonomously and safely. The workers don’t have to zoom around and can focus on more complex tasks like picking,” explains Kopic.

If all of that sounds incredibly ambitious for a European startup that has raised less than $1 million, it’s because it is. However, Kopic says that by setting up shop in Croatia he has been able to recruit a very specialist team while keeping costs much lower than direct competitors. It also has the advantage of being close to a number of facilities where the startup is currently testing its robots, including being given access to much-needed warehouse logistics data.

Investor Hinrikus echoes this sentiment. “[Gideon Brothers is] building a killer deep tech team. This will be the best team of deep tech talent to the east from here (well, before we get to China),” he tells me.

With its goofy video loops, YC backed Splish wants to be the ‘anti-Instagram’

Is there any space on kids’ homescreens for another social sharing app to poke in? Y Combinator backed Splish wants to have a splash at it () — with a super-short-form video and photo sharing app aimed at the under-25s.

The SF-based startup began bootstrapping out of their college dorm rooms last July, playing around with app ideas before settling on goofy video loops to be their social sharing steed of choice.

The Splish app pops content into video loops of between 1-5 seconds. Photos can be uploaded too but motion must be added in the form of an animated effect of your choice. So basically nothing on Splish stays still. (Hence its watery name.) But while wobbly, content on Splish is intended to stick around — rather than ephemerally pass away (a la snaps).

Here are a few examples of Splishes (embedded below as GIFs… but you can see them on its platform here, here and here):


It’s the first startup for the four college buddy co-founders: Drake Rehfeld, Alex Pareto, Jackson Berry and Zac Denham, though between them they’ve also clocked up engineering hours working for Snapchat, Facebook and Team 10.

Their initial web product went up in March and they landed a place on YC’s program at the start of May —  when they also released their iOS app. An Android app is pending, and they’ll be on the hunt for funding come YC demo day.

The gap in the social sharing market this young team reckons it’s spotted is a sort of ‘anti-Instagram’ — offering a playful contrast to the photo sharing platform’s polished (and at times preening) performances.

The idea is that sharing stuff on Splish is a bonding experience; part of an ongoing smartphone-enabled conversation between mates, rather than a selectively manicured photoshoot which also has to be carefully packaged for public ‘gram consumption.

Splish does have a public feed, though, so it’s not a pure messaging app — but the co-founders say the focus is friend group sharing rather than public grandstanding.

“Splish is a social app for sharing casual looping videos with close friends,” says Rehfeld, giving the team’s elevator pitch. “It came out of our own experience, and we’re building for ourselves because we noticed that the way you socialize right now in real life is you do activities with your friends. You go to the beach, you go to the bar, the bowling alley. We’re working to bring this same type of experience online using Splish through photo and video. So it’s more about interaction and hanging out with your friends online.”

“When you use Instagram you really feel like you’re looking at a magazine. It’s just the highlights of people’s lives,” he adds. “And so we’re trying to make a place where you’re getting to know your friends better and meeting new people as well. And then on the other side, on Snapchat, you’re really sharing interesting moments of your lives but it’s not really pushing the boundaries or creating with your friends. It’s more just a communication messaging tool.

“So it’s kind of the space in between broadcast and chat — talking and interacting with your close friends through Splish, through photo and video.”

Users of the Splish app can apply low-fi GIF(ish) retro filters and other photographic effects (such as a reverse negative look) to the video snippets and photos they want to send to friends or share more widely — with the effects intended to strip away at reality, rather than gloss it over. Which means content on Splish tends to look and feel grungy and/or goofy. Much like an animated GIF in fact. And much less like Instagram.

The team’s hope is the format adds a bit of everyday grit and/or wit to the standard smartphone visual record, and that swapping Splishes gets taken up as a more fun and casual way of communicating vs other types of messaging or social sharing.

And also that people will want to use Splish to capture and store fun times with friends because they can be checked out again later, having been conveniently packaged for GIF-style repeat lols.

“Part of the power here in Splish is that relationships are built on shared experiences and nostalgia and so while [Snapchat-style] ephemerality reduced a lot of the barriers for posting what it didn’t do is strengthen relationships long term or over time because the chats and the photos disappeared,” says Rehfeld.

The idea is a content format to gives people “shared experience that lasts”, he adds.

They’re also directly nudging users to get creative via a little gamification, adding a new feature (called Jams) that lets users prompt each other to make a Splish in response to a specific content creation challenge.

And filming actual (playful) physical shoulder pokes has apparently been an early thing on Splish. That’s the merry-go-round of social for ya.

Being a fair march north of Splish’s target age-range, I have to confess the app’s loopy effects end up triggering something closer to motion sickness/vertigo/puking up for me. But words are my firm social currency of choice. Whereas Rehfeld argues the teenager-plus target for Splish is most comfortable with a smartphone in its hand, and letting a lens tell the tale of what they’re up to or how they’re feeling.

“We started with that niche first because there’s a population in that age range that really enjoys this creative challenge of expressing yourself in pretty intuitive ways, and they understand how to do that. And they’re pretty excited about it,” he tells TechCrunch.

“There’s also been a little bit of a shift here where users no longer just capture what they have in real-life using the camera, but the camera’s used as an extension of communication — especially in that age range, where people use the camera as part of their relationship, rather than just capturing what happens offline.”

As with other social video apps, vertical full screen is the preferred Splish frame — for a more “immersive experience” and, well, because that’s how the kids do it.

“It’s the way users, especially in this age range, hold and use their phones. It’s pretty natural to this age range just because it’s what they do everyday,” he says, adding: “It’s just the best way to consume on the phone because it fills the whole screen, it’s how you were already using the phone before you clicked into the video.”

Notably, as part of the team’s soft-edged stance against social media influencer culture, Rehfeld says Splish is choosing not to bake “viral components” into the app — ergo: “Nobody’s rewarded for likes or ‘re-vines’. There’s no reblog, retweet.”

Although, pressed on how firm that anti-social features stance is, he concedes they’re not abandoning the usual social suite entirely — but rather implementing that sort of stuff in relative moderation.

“We have likes and we have a concept of friends or follows but the difference is we’re building those with the intention of not incentivizing virality or ‘influencership’,” he says. “So we always release them with some sort of limit, so with likes you can’t see a list of everybody who’s liked a post for example. So that’s one example of how we’ve, kind of, brought in a feature that people feel comfortable with and love but with our own spin that’s a little bit less geared towards building a following.”

Asked if they’re trying to respond to the criticism that’s been leveled at a lot of consumer technology lately — i.e. that it’s engineered to be highly and even mindlessly addictive — Rehfeld says yes, the team wants to try and take a less viral path, less well travelled, adding: “We’re building as much as possible for user experience. And a lot of the big brands build and optimize towards engagement metrics… and so we’re focused on this reduction of virality so that we can promote personal connections.”

Though it will be interesting to see if they can stick to medium-powered stun guns as they fight to carve out a niche in the shadow of social tech’s attention-sapping giants.

Of course Splish’s public feed is a bit of a digital shop window. But, again, the idea is to make sure it’s a casual space, and not such a perfectionist hothouse as Instagram.

“The way the product is built allows people to feel pretty comfortable even in the more public feeds, the more featured feeds,” adds Rehfeld. “They post still very casual moments, with a creative spin of course. So it’s stayed pretty similar content, private and public.”

Short and long

It’s fair to say that short form video for social sharing has a long but choppy history online. Today’s smartphone users aren’t exactly short of apps and online spaces to share moving pictures publicly or with followers or friends. And animated GIFs have had incredible staying power as the marathon runner of the short loop social sharing format.

On the super-short form video side, the most notable app player of recent years — Twitter’s Vine — sprouted and spread virally in 2013, amassing a sizable community of fans. Although Instagram soon rained on its video party, albeit with a slightly less super-short form. The Facebook-owned behemoth has gatecrashed other social sharing parties in recent years too. Most notably by cloning Snapchat’s ‘video-ish’ social sharing slideshow Stories format, and using its long reach and deep resources to sap momentum from the rival product.

Twitter voluntarily threw in the towel with Vine in 2016, focusing instead on its livestreaming video product, Periscope, which is certainly a better fit for its core business of being a real-time social information network, and its ambition to also become a mainstream entertainment network.

Meanwhile Google’s focus in the social video space has long been on longer form content, via YouTube, and longer videos mesh better with the needs of its ad network (at least when YouTube content isn’t being accused of being toxic). Though Mountain View also of course plays in messaging, including the rich media sharing messaging space.

Apple too has been adding more powerful and personalized visual effects for its iMessage users — such as face-mapping animoji. So smartphone users are indeed very, very spoiled for sharing choice.

Vine’s success in building a community did show that super-short loops can win a new generation of fans, though. But in May its original co-founder, Dom Hofmann, indefinitely postponed the idea of reviving the app by building Vine 2 — citing financial and legal roadblocks, plus other commitments on his time.

Though he did urge those “missing the original Vine experience” to check out some of the apps he said had “sprung up lately” (albeit, without namechecking any of the newbs). So perhaps a Splish or two had caught his eye.

There’s no doubt the space will be a tough one to sustain. Plenty of apps have cracked in and had a moment but very few go the distance. Overly distinctive filters can also feel faddish and fall out of fashion as quickly as they blew up. Witness, for example, the viral rise of art effect photo app Prisma. (And now try and remember the last time you saw one of its art filtered photos in the wild… )

So sustaining a novel look and feel can be tough. Not least because social’s big beast, Facebook, has the resources and inclination to clone any innovations that look like they might be threatening. Add in network effects and the story of the space has been defined by a shrinking handful of dominant apps and platforms.

And yet — there’s still always the chance that a new generation of smartphone users will shake things up because they see things differently and want to find new ways and new spaces to share their personal stuff.

That’s the splash that Splish’s team is hoping to make.

Landbot gets $2.2M for its on-message ‘anti-AI’ chatbot

Who needs AI to have a good conversation? Spanish startup Landbot has bagged a $2.2 million seed round for a ‘dumb’ chatbot that doesn’t use AI at all but offers something closer to an old school ‘choose your adventure’ interaction by using a conversational choice interface to engage potential customers when they land on a website.

The rampant popularity of consumer messaging apps has long been influencing product development decisions, and plenty of fusty business tools have been consumerized in recent years, including by having messaging-style interfaces applied to simplify all kinds of digital interactions.

In the case of Landbot, the team is deploying a familiar rich texting interface as a website navigation tool — meaning site visitors aren’t left to figure out where to click to find stuff on their own. Instead they’re pro-actively met with an interactive, adaptive messaging thread that uses conversational choice prompts to get them the information they need.

Call it a chatty twist on the ‘lazyweb’…

It’s also of course mobile first design, where constrained screen real estate is never very friendly to full fat homepages. Using a messaging thread interface plus marketing bots thus offers an alternative way to cut to the navigational chase, while simultaneously creaming off intent intelligence on potential customers. (Albeit it does risk getting old fast if your site visitors have a habit of clearing their cookies.)

Landbot, which was launched just over a year ago in June 2017, started as an internal experiment after its makers got frustrated by the vagaries of their own AI chatbots. So they had the idea to create a drag-and-drop style bot-builder that doesn’t require coding to support custom conversation flows.

“Since we already had a product, a business model, and some customers, we developed Landbot as an internal experiment. “What would happen with a full-screen conversation instead of the regular live-chat?,” we thought. What we got? A five times higher conversion rate on our homepage! Ever since, our whole strategy changed and Landbot, born from an experiment, became our core product,” explains CEO and co-founder Jiaqi Pan.

At the same time, the current crop of ‘cutting-edge’ AI chatbots are more often defined by their limitations than by having impressively expansive conversational capacities. Witness, for example, Google’s Duplex voice AI, heavily trained to perform very specific and pretty formulaic tasks — such as booking a hair appointment or a restaurant. Very few companies are in a position to burn so much engineering resource to try to make AI useful.

So there’s something rather elegant about eschewing the complexity and chaos of an AI engine (over)powering customer engagement tools — and just giving businesses user-friendly building blocks to create their own custom chat flows and channel site visitors through a few key flows.

After all, a small business knows its customers best. So a tool that helps SMEs create an engaging interface themselves, without having to plough resources they likely don’t have into training high maintenance chat AIs which are probably overkill for their needs anyway, seems a good and sensible thing.

Hence Pan talks about “democratizing the power of chatbots”. “Most landbot customers are marketing managers from small and medium companies that want to discover new ways of optimizing their conversion rates,” he tells us, saying that most are using the tool to convert more leads in their home/landing page; add dynamic surveys/forms to their websites; or explain their services — “in a more engaging way while scoring leads and being able to take over conversations when necessary”. (Buddy Nutrition is a Landbot customer, for example).

“We started our chatbot journey using Artificial Intelligence technology but found out that there was a huge gap between user expectations and reality. No matter how well trained our chatbots were, users were constantly dropped off the desired flow, which ended up in 20 different ways of saying “TALK WITH A HUMAN”,” he adds. “But we were in love with the conversational approach and, inspired by some great automation flow builders out there, we decided to give Conversational User Interfaces a try. Some would call them ‘dumb chatbots’.

“The results were amazing: The implementation process was way shorter, the technical background was removed from the equation and, finally, costs dropped too! Now, even companies with 100% focus on AI-based chatbots use Landbot as a truly cost-effective prototyping tool. We ended up creating the easiest and fastest chatbot builder out there. No technical knowledge, just a drag and drop interface and unlimited possibilities.”

Despite the startup-y hyperbole, the team does seem to have hit a sweet spot for their product. In less than a year since launching — via Product Hunt — Landbot has signed up more than 900 customers from 50+ countries, and is seeing a 30-40% MRR Growth MoM, according to Pan. Although they are offering a (branded) freemium version to help stoke the product’s growth, as well as paid tiers.

The $2.2M seed round is led by Nauta Capital, with Bankinter and Encomenda Smart Capital also participating. The plan for the funding is to grow headcount and pay for relocating Landbot’s head office from Valencia to Barcelona — to help with their international talent hunt as they look to triple the size of the team.

They’ll also be using the funding on their own brand marketing, rather than relying on viral growth —   acknowledging that marketing spend is going to be important to stand out in such a crowded space, with thousands of competing solutions also vying for SMEs’ cash.

And, indeed, other conversational UIs out in the wild delivering a similarly chatty experience on the customer end, though Landbot’s claim is it’s differentiating in the market behind the scenes, with easy to use, ‘no coding necessary’ customization tools.

On the competition from, Pan names the likes of Chatfuel and Manychat as “powerful but channel-dependent” rival chatbot builders, while at the more powerful end he points to DialogFlow or IBM Watson but notes they do require technical knowledge, so the market positioning is different.

“Landbot tries to bring chatbots to the average Joe,” he adds. “While still keeping features for developers that demand complex functionalities in their chatbots (they can achieve by configuring webhooks, callbacks, CSS and JS customization).”

He also identifies players in the automated lead generation space — such as Intercom (Operator) and Drift (Drift bot) — saying they are aiming to transform sales and marketing processes “into something more conversational”. “The flow customization possibilities are fewer but the whole product is robust as they cover each stage of the conversion funnel, all the way to customer service,” he adds.

In terms of capabilities, Landbot also rubs up against survey/form offerings like SurveyMonkey and Google Form — or indeed Barcelona-based Typeform, which has raised around $50M since 2012 and bills itself as a platform for “conversational data collection”.

Pan rather delightfully characterizes Typeform as “bringing that conversational essence to the almighty sequences of fields”. Though he argues it’s also more limited “in terms of integrations and real-time human take-over capabilities”, i.e. as a consequence of wrangling those “almighty sequences”. So basically his argument is that Landbot isn’t saddled with Typeform’s form(ulaic) straightjacket. (Though Typeform would probably retort that its conversational platform is flexible.)

Still, where customer engagement is concerned, there’s never going to be one way. Sometimes the straight form will do it, but for another brand or use case something more colloquial might be called for.

Commenting on the seed round in a statement, Jordi Vinas, general partner at Nauta Capital, adds: “Landbot has experienced strong commercial traction and virality over the past months and the team has been able to attract customers from a variety of countries and verticals. We strongly believe in Jiaqi’s ability to continue scaling the business in a capital efficient way.”

Okta nabs ScaleFT to build out ‘Zero Trust’ security framework

Okta, the cloud identity management company, announced today it has purchased a startup called ScaleFT to bring the Zero Trust concept to the Okta platform. Terms of the deal were not disclosed.

While Zero Trust isn’t exactly new to a cloud identity management company like Okta, acquiring ScaleFT gives them a solid cloud-based Zero Trust foundation on which to continue to develop the concept internally.

“To help our customers increase security while also meeting the demands of the modern workforce, we’re acquiring ScaleFT to further our contextual access management vision — and ensure the right people get access to the right resources for the shortest amount of time,” Okta co-founder and COO Frederic Kerrest said in a statement.

Zero Trust is a security framework that acknowledges work no longer happens behind the friendly confines of a firewall. In the old days before mobile and cloud, you could be pretty certain that anyone on your corporate network had the authority to be there, but as we have moved into a mobile world, it’s no longer a simple matter to defend a perimeter when there is effectively no such thing. Zero Trust means what it says: you can’t trust anyone on your systems and have to provide an appropriate security posture.

The idea was pioneered by Google’s “BeyondCorp” principals and the founders of ScaleFT are adherents to this idea. According to Okta, “ScaleFT developed a cloud-native Zero Trust access management solution that makes it easier to secure access to company resources without the need for a traditional VPN.”

Okta wants to incorporate the ScaleFT team and, well, scale their solution for large enterprise customers interested in developing this concept, according to a company blog post by Kerrest.

“Together, we’ll work to bring Zero Trust to the enterprise by providing organizations with a framework to protect sensitive data, without compromising on experience. Okta and ScaleFT will deliver next-generation continuous authentication capabilities to secure server access — from cloud to ground,” Kerrest wrote in the blog post.

ScaleFT CEO and co-founder Jason Luce will manage the transition between the two companies, while CTO and co-founder Paul Querna will lead strategy and execution of Okta’s Zero Trust architecture. CSO Marc Rogers will take on the role of Okta’s Executive Director, Cybersecurity Strategy.

The acquisition allows the Okta to move beyond purely managing identity into broader cyber security, at least conceptually. Certainly Roger’s new role suggests the company could have other ideas to expand further into general cyber security beyond Zero Trust.

ScaleFT was founded in 2015 and has raised $2.8 million over two seed rounds, according to Crunchbase data.

An app that uses AI to help you improve your basketball shot just raised $4 million

Let’s be real: you are most certainly never going to be as good as Steve Nash, Chris Paul, James Harden — or really any professional NBA player. But it probably won’t stop you from trying to practice or model your game around your favorite players, and spend hours upon hours figuring out how to get better.

And while there are going to be plenty of attempts to smash image recognition and AI into that problem, a company called NEX Team is hoping to soften the blow a bit by helping casual players figure out their game, rather than trying to be as good as a professional NBA player. Using phone cameras and image recognition on the back end, its primary app HomeCourt will measure a variety of variables like shot trajectory, jump height, and body position, and help understand how to improve a player’s shooting form. It’s not designed to help that player shoot like Ray Allen, but at least start hitting those mid-range jumpers. The company said it’s raised $4 million from Charmides Capital and Mandra Capital, as well as Steve Nash, Jeremy Lin, Sam “Trust The Process” Hinkie (sigh), Mark Cuban and Dani Reiss.

“We don’t call ourselves a basketball company, we think of ourselves as a mobile AI company,” CEO and co-founder David Lee said. “It happens that basketball is the first sport where we’re applying our tech. When you think about digitizing sports, as a runner or cyclist, you’ve had access to a feedback loop for a while [on treadmills and other tools]. But for basketball and other sports like basketball, that loop didn’t exist. We believed with computer vision, you can digitize a lot of different sports, one of which is basketball. We’re not just building an app for the professional basketball athletes, we’re focused on building an app where value can be generated across the basketball community.”

The app starts off with an iPhone. Players can boot up their camera and begin recording their shots, and the app will go back and track what worked and what didn’t work with that shot, as well as where the player is making and missing those shots.It’s not tracking every single motion of the player, but once a player makes a shot, it will track that trajectory and shooting form, like where his or her feet are planted. That kind of feedback can help players understand the kinds of small tweaks they can make to improve their shooting percentage over time, such as release speed or jump hight. And while it’s not designed to be hugely robust like the kinds of advanced tracking technology that show up in advanced training facilities at some larger sports franchises, it aims to be a plug-and-play way of getting feedback on a player’s game right away.

Still, that doesn’t necessarily stop the app from showing up in slightly more professional situations, like recruiting or in athletic centers on college campuses, Lee said. Each college is looking for the next DeAndre Ayton or Ben Simmons, as well as new ways to try to find those recruits. While not every college will end up with the top recruits in the country and get bounced in the second round of the NCAA Men’s Basketball tournament, it offers an additional way for younger players to refine their game to the point they potentially get the attention of those universities — or the NBA, should the one-and-done rule that requires athletes to play a year in college end up disappearing.

“A lot of these coaches are looking at a lot of evaluation tools,” Lee said. “If Alex is waking up at 5 a.m. to put in work, it’s not just about makes and misses, it’s about work ethic. It’s harder to evaluate and digitize a sport. Only [a fraction] of the basketball happens in their practice facilities. How do they help their players evaluate their workout sessions when they’re in those situations? That opens up the doors to do that as well.”

In order to appeal to those broader audiences, the startup is rolling out bite-sized challenges as a way to try to attract the more casual consumers that want to dip their toes into HomeCourt. You see these kinds of challenge-based activities in apps like Strava as a way to try to attract users or keep them engaged in a lighter and more competitive way without having to go into a full-on event like a race or a tournament. It’s one way to try to wrangle the competitive elements of sports like basketball without a ton of competitive pressure as users get more and more comfortable with the way they play and their shooting style.

That bite-sized style of activity also serves pretty well when it comes to creating content, as has been proven popular by apps like Overtime that specialize in highlights of certain players. HomeCourt hopes to add a social layer on top of that to, once again, increase that kind of stickiness and build a community around what would otherwise be a purely technical tool — and one that might scare off more casual players with a very sabermetrics-feeling approach.

Lee also said he hopes the app will eventually broaden into other sports, like Golf or Tennis, where tracking the ball might be more complicated or the motions considerably different from basketball. That’s based on building technology that tracks the movement of the player, and not just the ball, in order to determine the trajectory or success of that specific shots. The hope is that basketball is a first step in terms of achieving that.

“For golf, seeing your whole form as going into your swing is more important — that’s the input in terms of getting where the ball goes,” Lee said. “We’re trying to think about how to reduce as much friction as possible. Imagine being able to use the app to track makes or misses, but also tracking your player movement and form, measuring it, and comparing it to another player’s backswing. We’re hoping to do that in basketball [first].”