Tuesday, April 16, 2019

Logistics startup Zencargo raises $20M to take on the antiquated business of freight forwarding - TechCrunch

Logistics startup Zencargo raises $20M to take on the antiquated business of freight forwarding - TechCrunch

Logistics startup Zencargo raises $20M to take on the antiquated business of freight forwarding - TechCrunch

Posted: 16 Apr 2019 05:12 AM PDT

Move over, Flexport. There is another player looking to make waves in the huge and messy business of freight logistics. Zencargo — a London startup that has built a platform that uses machine learning and other new technology to rethink how large shipping companies and their customers manage and move cargo, or freight forwarding as it's known in the industry — has closed a Series A round of funding of about $19 million.

Zencargo's co-founder and head of growth Richard Fattal said in an interview that the new funds will be used to continue building its software, specifically to develop more tools for the manufacturers and others who use its platform to predict and manage how cargo is moved around the world.

The Series A brings the total raised by Zencargo to $20 million. This latest round was led by HV Holtzbrinck Ventures. Tom Stafford, managing partner at DST Global; Pentland Ventures; and previous investors Samos, LocalGlobe and Picus Capital also participated in the round.

Zencargo is not disclosing its valuation, nor its current revenues, but Fattal said that in the last 12 months it has seen its growth grow six times over. The company (for now) also does not explicitly name clients, but Fattal notes that they include large e-commerce companies, retailers and manufacturers, including several of the largest businesses in Europe. (One of them at least appears to be Amazon: Zencargo provides integrated services to ship goods to Amazon fulfillment centers.)

Shipping — be it by land, air or sea — is one of the cornerstones of the global economy. While we are increasingly hearing a mantra to "buy local," the reality of how the mass-market world of trade works is that components for things are not often made in the same place where the ultimate item is assembled, and our on-demand digital culture has created an expectation and competitive market for more than what we can source in our backyards.

For companies like Zencargo, that creates a two-fold opportunity: to ship finished goods — be it clothes, food or anything — to meet those consumer demands wherever they are; and to ship components for those goods — be it electronics, textiles or flour — to produce those goods elsewhere, wherever that business happens to be.

Ironically, while we have seen a lot of technology applied to other aspects of the economics equation — we can browse an app anytime and anywhere to buy something, for example — the logistics of getting the basics to the right place are now only just catching up.

Alex Hersham, another of Zencargo's co-founders who is also the CEO (the third co-founder is Jan Riethmayer, the CTO), estimates that there is some $1.1 trillion "left on the table" from all of the inefficiencies in the supply chain related to things not being in stock when needed, or overstocked, and other inventory mistakes.

Fattal notes that Zencargo is not only trying to replace things like physical paperwork, faxes and silos of information variously held by shipping companies and the businesses that use them — but the whole understanding and efficiency (or lack thereof) that underlies how everything moves, and in turn the kinds of businesses that can be built as a result.

"Global trade is an enormous market, one of the last to be disrupted by technology," Fattal said. "We want not just to be a better freight forwarder but we want people to think differently about commerce. Given a choice, where is it best to situate a supplier? Or how much stock do I order? How do I move this cargo from one place to another? When you have a lot of variability in the supply chain, these are difficult tasks to manage, but by unlocking the data in the supply chain you can really change the whole decision making process."

Zencargo is just getting started on that. Flexport, one of its biggest startup competitors, in February raised $1 billion at a $3.2 billion valuation led by SoftBank to double down on its own freight forwarding business, platform and operations. But as Christian Saller, a partner at HV Holtzbrinck Ventures describes it, there is still a lot of opportunity out there and room for more than one disruptor.

"It's such a big market that is so broken," he said. "Right now it's not about winner-take-all."

Electric car startup Byton loses co-founder and former CEO, reported $500M Series C to close this summer - TechCrunch

Posted: 16 Apr 2019 01:01 AM PDT

The race is on for building and shipping more cost-effective electric cars, but today one of the more ambitious startups in the field announced some significant changes that underscore some of the challenges in making that a reality. Byton, the Chinese electric car startup, today announced that Carsten Breitfeld, the former BMW executive and Byton co-founder who had been the CEO and was most recently chairman, has left the company "to start a new adventure within the start-up industry."

To offset that news, Byton said that it is currently recruiting for a new CTO, will close its Series C funding — a $500 million round, according to this report from January — this summer and is on track for production of its M-Byte SUV vehicle for Q4 2019. The company recently said that it is looking toward an IPO, with the business currently valued at around $4 billion and counting 50,000 customers, with half in China and half in the U.S.

"Thanks to our founding team and all employees we're well on track and looking forward to delivering the M-Byte this year to customers in China, followed by the US and Europe in 2020," said Byton co-founder and current CEO Dr. Daniel Kirchert. "Carsten helped build a strong BYTON brand and bring in the right people to take our start-up to the next level. Now we are focusing on our main goal to achieve the on-time-start-of-production of the first BYTON series production model in 2019 with our strong team and partners." There were no comments about IPOs in today's statement.

It's not clear who is overseeing the technical aspects of the business in the meantime — it doesn't appear that there had been an official CTO at the company previously, but before Byton, Breitfeld had been VP of engineering at BMW. Dirk Abendroth, another BMW engineering alum, left Byton in October of last year to become CTO of OEM Continental.

Byton was originally started as Future Mobility Corporation as a joint venture between Harmony Auto, Tencent and Foxconn, which put Breitfeld and Kirchert, pictured below left and right, in place as co-founders and leaders of the business. It has raised about $700 million to date, with the most recent round of $500 million closing in June 2018.

But there have been reports that the company was running out of money since the end of last year, balancing the capital intensiveness of building new vehicle technology and new vehicles as a startup (no small feat considering that its competitors are some of the biggest companies in the world), with the fact that the company now employs some 1,600 people — a good portion of whom were cherry-picked from existing automotive companies and are therefore expensive.

Byton is not the only electric car company that is swerving to try to avoid unexpected roadblocks in its growth. Tesla earlier this year cut its workforce to streamline its own production, and it has been making many sudden decisions on its retail strategy in an effort to cut costs.

For the new generation of vehicles, it's not just all-electric technology that is tricky to build in a cost-effective and efficient way, but the fact that these investments are being balanced against other major initiatives around vehicle software, and in particular autonomous technology.

Many believe that the industry is heading inevitably toward self-driving vehicles, but right now we're far from that and the development of the features poses a lot of safety and other hurdles and a complete picture of how it will look is still a moving target. Byton, for its part, is currently working with a third party, Aurora, for self-driving tech for its vehicles.

We have contacted Byton with questions about who is acting as CTO at the company currently, and if it can provide any more details on the Series C or valuation. We will update this post as we learn more.

Ring founder's advice on how to create a successful startup - Business Insider

Posted: 16 Apr 2019 09:29 AM PDT

Jamie Siminoff's entire career has been about rejection.

That might sound surprising coming from someone like Siminoff, who sold the video doorbell and home security company he founded to Amazon for $1 billion last year and recently served as a guest Shark on the ABC reality show "Shark Tank."

But back in 2013, long before those achievements, Siminoff walked away from "Shark Tank" with no deal after pitching his company, then called DoorBot, to the panel of "Shark Tank" investors.

"If you want to be in the business of having your own company and being able to succeed in this way, welcome to the failure game," Siminoff told Business Insider in a recent interview. "You're going to get hit with a lot of things. You've got to be able to just move on and do it."

Nearly 67% of startups fail to raise additional funding or make an exit, according to research firm CB Insights, which tracked more than 1,100 tech companies that raised seed rounds in the United States between 2008 and 2010. Of those companies, only 15% made it to the Series C funding stage.

So how do you make sure your company doesn't end up in that 67%? Siminoff says the key to success is to focus on a long-term problem rather than a booming technology or industry.

"The reason that Amazon bought Ring is because it wasn't built to be a company to sell," Siminoff said. "I think what people sometimes miss when they're doing a startup is that they're so focused on a technology but it's very short term. I always try to tell anyone that I talk to: Find that long-term thing that you're solving."

Developments and changes in the technology industry may impact how you tackle the problem your business is solving. But that technology shouldn't be the basis for your business, Siminoff says. He points to Ring as an example, saying that his company's mission is founded on making neighborhoods safer, which serves as the guiding principle for Ring's products.

"No matter how technology changes, you'll just keep working on that problem," he said. "And that's how you build a long-term business."

Brex, the credit card for startups, raises $100M debt round - TechCrunch

Posted: 16 Apr 2019 09:04 AM PDT

Brex, widely known for its billboards littered across San Francisco, has secured a $100 million debt financing from Barclays Investment Bank.

The company, which provides a corporate credit card designed specifically for startups, has previously raised $215 million in equity funding at a $1.1 billion valuation in the less than two years since it graduated from the Y Combinator startup accelerator.

Debt, Brex chief executive officer Henrique Dubugras tells TechCrunch, will power the company's next phase of growth, which includes the launch of a credit card for large enterprises. A necessary step for a company navigating an inherently risky business of supplying credit to upstarts, known to unpredictably fold or file for bankruptcy.

"Because we raised so much equity so fast, we put a lot of it to work on the lending; this will allow us to scale way beyond our equity," Dubugras said, adding that the company has no plans to raise additional equity funding right now: "Especially after this debt raise because now a lot of the capital that was tied up we can get back."

This year, the company has been putting its boatload of venture capital to work, taking the necessary steps toward maturation. Recently, Brex closed its first notable acquisition, poaching the blockchain startup Elph right out of YC in a deal that closed just one week before Demo Day. The Elph team brings their infrastructure security know-how to Brex, helping the company build its next product, a credit card for Fortune 500 companies.

Brex is backed by Y Combinator Continuity, Ribbit Capital, Greenoaks Capital, DST Global, IVP, Peter Thiel and Max Levchin.

Brex, which recently launched a rewards program tailored to startups needs, doesn't require startups to provide a personal guarantee or security deposit. The company simplifies corporate expenses by providing companies with a consolidated look at their spending and gives entrepreneurs a credit limit that's as much as 10 times higher than what they might receive elsewhere.

Airtable's founders wanted to build a lasting company, not a product - Business Insider

Posted: 16 Apr 2019 03:00 PM PDT

Many startups are born out of an idea for a new product or an insight into a potential business opportunity.

But not Airtable.

Before its founders figured out the service it would offer or how it would make money, they talked through the principles that would guide the company they were creating, CEO Howie Liu told Business Insider in a recent interview. He and his cofounders believed that a company's culture and values were more important to its longterm success than its initial product or business model. Indeed, they felt like those values could help guide the development of its business model and products.

"We were very ... intentional on day one in terms of talking through what is going to be the guiding principle set for our company many years down the road," Liu said.

Airtable offers something that, at first glance, looks a lot like a simple spreadsheet. So you might think that Liu and his cofounders were focusing on upending the the market for Excel or Google Sheets.

But in reality, they had much broader ambitions, Liu said. And those aims were ones they talked about right from the beginning, even before they launched their service. They wanted to focus on disrupting the traditional method of writing software and make it more accessible to everyday people, he said.

"In the same way that Apple democratized personal computing, we wanted to democratize the act of software creation," Liu said in a follow-up email.

The bet on values seems to be paying off

The bet Liu and and cofounders made to focus on values seems to be paying off. Airtable is one of the hottest enterprise software startups around. It raised $160 million in venture funding last year— most recently at a $1.1 billion valuation, and has some 80,000 customers, including half of the Fortune 1,000. It's generating enough revenue and cash flow now that Liu says it can continue to run its business without any more outside financing.

Read this:The CEO of hot startup Airtable says that the company's financials are strong enough to go public, even though he doesn't want to

The decision of Liu and his partners to initially focus on values came out of years of conversations with his cofounders and from their collective experiences in the tech industry. The three met in college at Duke, where they bonded while brainstorming startup ideas.

After college, Liu founded a startup that was eventually acquired by Salesforce. Andrew Ofstad, his cofounder and Airtable's chief product officer, worked for giant consulting firm Accenture, helping clients develop products before joining Google product team. Liu's other cofounder, Emmett Nicholas, Airtable's chief technology officer, worked as an engineer at Stack Overflow, the mega-popular Q&A site for developers.

Through their various experiences in the tech industry, three continued to talk about startup ideas, both about products and the kinds of companies they wanted to build. While they officially launched Airtable's product in 2015, the discussions that led to the company started more than two years before that, Liu said.

"In Airtable's case, [the launch of the product] was very organic," he said. The idea for the company, he continued, "developed slowly over the course of years."

Airtable is increasingly resembling its founders' vision

As Airtable's service has evolved, its founders' vision has become more apparent. Its service has evolved into a kind of advanced database program that allows users to input not just text and numbers, but digital objects ranging from photos to documents.

And customers can now use its service to create bespoke applications. Hollywood studios are using it to help manage the post-production process with their films, major festivals are using it to track lost-and-found items, and people are using it to help plan their weddings.

Focusing on values and principles before products and business models may seem a bit odd, almost like putting the cart before the horse, Liu acknowledged. But he and his team wanted to avoid the mistakes other entrepreneurs had made, he said.

Founders who start with a product often end up with something that becomes an accidental business, something that's more of a feature than the foundation of a real company. By starting out with guiding principles, Liu and his founders felt they could focus instead on building a sustainable and influential business.

"In some sense, it's a little bit contrived to talk about [values and principles] before you actually have anything — like, you haven't even gotten to basic product-market fit, you have zero employees, you have, like, nothing," Liu said in the interview. "But at the same time ... it's almost especially important to talk about it then, because otherwise once you get moving and into the thick of things, if you don't have that clear set of values ... it becomes really hard to retrofit that."

In Airtable's case, the company's initial values have helped steer Liu and his team ever since, helping them to focus on their longterm vision.

"We knew from day one that we had to value excellence over expedience, craft over convenience," he said. "We weren't just replicating existing products," he continued, "but creating something new and truly original. That required us to value open-ended, imaginative thinking."

Got a tip about a startup or other tech company? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

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