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Abacus.AI raises another $22M and launches new AI modules

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AI startup RealityEngines.AI changed its name to Abacus.AI in July. At the same time, it announced a $13 million Series A round. Today, only a few months later, it is not changing its name again, but it is announcing a $22 million Series B round, led by Coatue, with Decibel Ventures and Index Partners participating as well. With this, the company, which was co-founded by former AWS and Google exec Bindu Reddy, has now raised a total of $40.3 million.

Abacus co-founder Bindu Reddy, Arvind Sundararajan and Siddartha Naidu. Image Credits: Abacus.AI

In addition to the new funding, Abacus.AI is also launching a new product today, which it calls Abacus.AI Deconstructed. Originally, the idea behind RealityEngines/Abacus.AI was to provide its users with a platform that would simplify building AI models by using AI to automatically train and optimize them. That hasn’t changed, but as it turns out, a lot of (potential) customers had already invested into their own workflows for building and training deep learning models but were looking for help in putting them into production and managing them throughout their lifecycle.

“One of the big pain points [businesses] had was, ‘look, I have data scientists and I have my models that I’ve built in-house. My data scientists have built them on laptops, but I don’t know how to push them to production. I don’t know how to maintain and keep models in production.’ I think pretty much every startup now is thinking of that problem,” Reddy said.

Image Credits: Abacus.AI

Since Abacus.AI had already built those tools anyway, the company decided to now also break its service down into three parts that users can adapt without relying on the full platform. That means you can now bring your model to the service and have the company host and monitor the model for you, for example. The service will manage the model in production and, for example, monitor for model drift.

Another area Abacus.AI has long focused on is model explainability and de-biasing, so it’s making that available as a module as well, as well as its real-time machine learning feature store that helps organizations create, store and share their machine learning features and deploy them into production.

As for the funding, Reddy tells me the company didn’t really have to raise a new round at this point. After the company announced its first round earlier this year, there was quite a lot of interest from others to also invest. “So we decided that we may as well raise the next round because we were seeing adoption, we felt we were ready product-wise. But we didn’t have a large enough sales team. And raising a little early made sense to build up the sales team,” she said.

Reddy also stressed that unlike some of the company’s competitors, Abacus.AI is trying to build a full-stack self-service solution that can essentially compete with the offerings of the big cloud vendors. That — and the engineering talent to build it — doesn’t come cheap.

Image Credits: Abacus.AI

It’s no surprise then that Abacus.AI plans to use the new funding to increase its R&D team, but it will also increase its go-to-market team from two to ten in the coming months. While the company is betting on a self-service model — and is seeing good traction with small- and medium-sized companies — you still need a sales team to work with large enterprises.

Come January, the company also plans to launch support for more languages and more machine vision use cases.

“We are proud to be leading the Series B investment in Abacus.AI, because we think that Abacus.AI’s unique cloud service now makes state-of-the-art AI easily accessible for organizations of all sizes, including start-ups,” Yanda Erlich, a p artner at Coatue Ventures  told me. “Abacus.AI’s end-to-end autonomous AI service powered by their Neural Architecture Search invention helps organizations with no ML expertise easily deploy deep learning systems in production.”

Source: https://techcrunch.com/2020/11/18/abacus-ai-raises-another-22m-and-launches-new-ai-modules/

Start Ups

CES: Consumerization Will Be The Future of Digital Health

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The Consumer Electronics Show 2021 wrapped up on Jan. 14, but not before a very interesting session on what’s happening in digital health, particularly around new trends, COVID-19, companies going public and investments.

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The well-known consumer electronics show, which was virtual this year, features company showcases, keynote speakers from top global consumer companies, and a plethora of webinars on topics including the latest products to make your home smarter and what’s happening in the fintech, e-commerce and digital health industries.

Lisa Suennen, lead of the digital and technology group at Manatt, Phelps & Phillips, led a panel of venture capitalists speaking at the pre-taped “Digital Health: Business Growth and Opportunities” session that included:

Wainwright Fishburn, global head of digital health at Cooley, kicked off the session with a look at the digital health landscape. He reported that investment in the space reached $14 billion-plus in 2020, with record-breaking capital being invested in some key areas of telehealth, mental/behavior and fitness/wellness.

With physicians more comfortable in using telehealth, M&A and IPO activity expected to continue, and venture capital not letting up, Fishburn said that “digital health is finally mainstream.”

Clockwise from left, Lisa Suennen, Bill Evans, Sydney Thomas, and Lynne O’Keefe

On new trends

O’Keefe: “The consumerization of health and the need for a better experience. Post-COVID has emphasized that in simplifying the experience and making it consumer-first.”

Thomas: “Yes, consumerization right now is an interesting space. The risk of going into the hospital is high today, and people are afraid. As a result, I see a lot of direct-to-consumer and at-home products. Another piece is the affordability of health care, and I am starting to see a model of breaking down components so that individual products are affordable.”

Evans: “We put an emphasis on the ‘plumbing’ of health care, the B2B models that have a huge potential to introduce efficiency and effectiveness, and not at the expense of experience.”

COVID as a sustainable business opportunity

Thomas: “COVID created some really long-lasting changes in everything. I actually don’t mind. A number of companies I did last year were being supported by the tailwinds of COVID. I am going to continue to invest in those companies. I’m not going back to the office at least for another nine months and even then, I want everyone to have the yellow dot that shows you got the vaccine. There are a lot of folks who have survived this moment and have life-changing impact.”

On investment surprises

Evans: “What surprised me was the pace at which the capital markets and rallying of public markets returned to normal at the beginning of the pandemic. Also, the pace at which investors came back, and the degree to which the venture industry and entrepreneurs knew how to deal with a crisis.”

Thomas: “I was also surprised by how much more VCs were interested in health care. People were reaching out to people they had not before. I’ve been able to get more access to different people, and that the decision to invest in health care is more important.”

O’Keefe: “It’s not like everything got hard in COVID. Those problems that were siloed in nature existed before. Entrepreneurs have come in and are thinking outside the health care system, breaking down the walls and creating better customer experiences.”

Similarly to the prediction about the consumerization of health care, sources I spoke to earlier in the month shared the same forecast as startups help us rethink health care.

Crunchbase data also showed that investors poured record amounts of investment into digital health startups in 2020: $14.2 billion globally and $9.2 billion domestically.

Meanwhile, the global pandemic increased the public’s awareness and understanding of how interconnected the world is, a view that will mature in 2021, Ann DeWitt, a general partner at The Engine, which invests in health care companies, told me.

For another CES highlight, catch my synopsis of the Jan. 12 session called “The Rise of FinTechs – Has Consumer Financial Behavior Changed Forever?” which included conversations with Ginger Baker, head of financial access at Plaid, and Erika Wool, head of payments partnership at Stripe.

Feature screenshot was taken during the session
Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

We ask venture capital firms five questions about their investment strategies.

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Ganesan says e-commerce has hit an inflection point and the shift to online is real.

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Source: https://news.crunchbase.com/news/ces-consumerization-will-be-the-future-of-digital-health/

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North American Venture Investment Rose In 2020, Culminating With Big Exits And A Strong Q4

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History will remember 2020 as a very bad year by many measures. However, venture funding will not be one of them.

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Funding for startups and growth-stage private companies in North America held up at historically high levels last year. Even amid a pandemic, widespread unemployment, and escalating small-business closures, investment was up year over year across all stages from early and beyond.

Table of contents

North America overall

Overall, venture investors put just over $150 billion to work across all stages in 2020, up around 7 percent from 2019 levels, per Crunchbase data. For perspective, here are the annual funding totals, color-coded by stage, for the past 10 years:

The fourth quarter ended on a robust note as well. Investors poured $38.7 billion into North American seed- through growth-stage deals in Q4, per Crunchbase data. Totals for Q4 of 2020 were up 16 percent year over year and down 12 percent quarter over quarter.

The narrative playing out in the private company sphere largely dovetailed the public market environment. COVID-19, political mayhem and financial distress on Main Street failed to resonate on Wall Street, with major indexes, and tech stocks in particular, reaching record valuations.

The upbeat climate on public exchanges helped spur a raft of venture-backed unicorns to carry out initial public offerings and direct listings, and follow the increasingly popular special purpose acquisition company path to market debuts. Those hitting public markets in Q4 were among the largest debuts of the year, led by Airbnb and DoorDash.

Below, we look at the tallies by stage, highlight top exits, and look at the most active investors for both the year and the just-ended quarter.

Late-stage funding

Late stage accounts for the largest share of venture dollars across any stage, so we’ll start there.

For all of 2020, venture investors put $94.5 billion into late-stage and technology growth1 deals. That’s a sizable jump from 2019, when $85.7 billion went into such deals.

While funding rose, round counts declined a bit. Crunchbase counted 1,167 late-stage and tech-growth rounds in 2020, down 10 percent from 2019, as average round sizes grew larger.  In the chart below, we lay out funding totals and round counts for the past five quarters.

The fourth quarter was the second-biggest of the year for investment totals, with $23.3 billion going to late-stage and technology-growth deals. That’s down 25 percent from Q3, which was by far the biggest quarter of 2020, but up about 18 percent from the year-ago quarter.

For both Q4 and 2020 as a whole, supergiant rounds of $100 million or more played a key role in pushing investment totals up. For the full year, there were 193 so-called supergiant rounds of $100 million and up at the late stage, per Crunchbase data, up from 156 in 2019.

The brisk pace of supergiant late-stage rounds continued in Q4, with five late-stage rounds of $340 million and up:

  • Nuro, a developer of autonomous delivery vehicles, raised a $500 million Series C;
  • Relativity Space, which focuses on 3D printed rockets, raised a $500 million Series D;
  • TuSimple, a self-driving truck company, raised a $350 million Series E; and
  • Scopely, a mobile gaming company raised a $340 million Series E.

For the full year, meanwhile, there were 26 late stage rounds of $300 million and up, with the largest—a $600 million Series E—going to payments processor Stripe.

Early-stage funding

Early-stage investment also rose in 2020, with Q4 ending the year on a high note.

For the full year, investors put $49.1 billion into early-stage rounds (Series A and B), up about 3 percent from the 2019 total. Round counts totaled just under 3,000, down around 11 percent from 2019.

The fourth quarter provided a strong close, with $13.6 billion in early-stage investment, the highest total of the past five quarters. Round counts, meanwhile, were up slightly quarter over quarter, but still down from year-ago levels. We lay the numbers out in more detail in the chart below.

In the fourth quarter in particular, we saw a proliferation of super-sized Series A and B rounds. These include:

  • Resilience, a startup looking to speed up the biopharmaceutical manufacturing process, raised $750 million in a November Series B round;
  • Uber Freight, a logistics spinout of Uber, raised $500 million in an October Series A round;
  • Heyday, a digital marketplace for consumer products brands, raised a $175 million Series A round in November; and
  • Function of Beauty, a provider of customizable beauty products, raised $150 million in a December Series B round.

Seed-stage funding

Seed-stage investment was down in 2020 compared to year-ago levels, and hit a low point in the fourth quarter, according to reported data from Crunchbase.

Overall, seed-stage companies raised $7.2 billion in all of 2020, down 10 percent from 2019. Reported round counts totaled just over 6,400, down 22 percent from 2019 levels.

For Q4, meanwhile, seed investment totaled $1.7 billion, tied for the lowest total in two years, while round counts saw steep year-over-year declines. Investment totals and round counts for the past five quarters are shown below.

Part of the Q4 and 2020 seed-stage declines may be attributed to reporting delays. Much of the seed funding data in the Crunchbase dataset is self-reported by companies. Because a sizable percentage of rounds get entered weeks or months after they close, reported funding totals historically rise over time.

That said, it does appear that seed and angel funding was down some, even accounting for the lag. It’s a trend likely attributable in part to the pandemic. After all, it was not an opportune year to launch a startup in a number of spaces, including travel, hospitality and live entertainment. Investors and founders in a range of sectors may also have taken a wait-and-see approach, preferring to launch and scale in a post-pandemic environment.

The absence of face-to-face networking opportunities probably also played a role. Investment for seed companies is more personality-driven than at other stages, since startups typically have no finished product or market traction.

Exits

Overall, 2020 was an exceptionally good year for venture-backed exits, and Q4 was a standout quarter on this front. Below we look at returns from public market debuts, followed by M&A.

IPOs, Direct Listings And SPACs

The tech sector was on fire in the public markets last year, and startups took notice. Many companies that had been talked-about candidates for public listing chose 2020 as the year to make it happen.

Markets were receptive. The year’s biggest tech market debuts included Airbnb, Palantir, DoorDash, and Snowflake, which now collectively maintain a market capitalization of over $300 billion.

Many of the year’s largest market debuts took place in Q4, as laid out in the following list.

In addition to the size and volume of public offerings, 2020 stands out for the variety of methods companies employed to make their market debuts.

While most of the largest offerings were traditional IPOs, we also saw heightened use of two other paths to the markets: direct listings and mergers with a special purpose acquisition company, or SPAC.

For 2020, the largest direct listing was Palantir, which went public in late September at an initial valuation of $22 billion and has since seen its market cap balloon to $49 billion. On the SPAC side, homebuying and selling platform Opendoor closed out the year with a December debut at an $18 billion valuation following completion of its merger with a blank-check acquirer.

M&A

Venture-backed companies also got acquired at a pretty good clip in 2020, with a number of multibillion-dollar deals, including several in the fourth quarter.

Standout M&A deals for 2020 include Illumina’s $8 billion purchase of cancer screening company Grail in September and Intuit’s $7.1 billion purchase of fintech unicorn Credit Karma, which was announced in February and completed in December.

As for Q4, we saw a dozen acquisitions2 valued at $1 billion or more, with the largest of the disclosed deals listed below.

Active Investors

As mature startups exited, younger companies lined up for fresh venture funding, and an array of prominent VC firms stepped up with capital.

Below we look at the most active venture and alternative investors in Q4 of 2020, looking at both new investments and follow-on investments in existing portfolio companies.

We don’t see any big surprises here, although it’s notable that the list does favor companies active in late-stage investment and multistage investment rather than pure early-stage investors.

The Big Picture

So, having crunched the numbers, with what sweeping description may we bid adieu to 2020?

Overall, it was a bullish year for venture funding and exits amidst a grim period in many other respects.

For 2021, startups are certainly hoping the receptive public markets, readily available capital, and strong valuations remain a thing. However, it’d also be nice to see a return of some of the much-missed aspects of startup life, including a lot fewer video meetings and a lot more face-to-face human contact.

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data for North America namely Canada and the United States.

The most recent quarter will increase over time relative to previous quarters. For funding counts, we notice a strong data lag, especially at the seed and early stages, by  as much as 26 percent to 41 percent a year out.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

  • Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding, and convertible notes at $3 million (USD or as-converted USD equivalent) or less.
  • Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture, and other rounds above $3 million, and those less than or equal to $15 million.
  • Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series,  corporate venture, and other rounds above $15 million.
  • Technology growth is a private equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

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Source: https://news.crunchbase.com/news/north-america-venture-investing-2020-report/

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Strategy Session: Former U.S. HelloFresh Founder Finds Early-Stage Fix With Antler

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Strategy Session is a feature for Crunchbase News where we ask venture capital firms five questions about their investment strategies.

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Bryan Ciambella went from bringing the HelloFresh concept to the U.S.–the company went public in 2017–to a principal at B Capital Group before moving into early-stage investments.

He joined Antler as a partner in 2020, heading up the Singapore-based, early-stage venture capital firm’s U.S. operations.

What follows has been lightly edited for length and clarity.

Bryan Ciambella, partner at Antler

What is your firm’s thesis, and how did you settle on it?

Ciambella: We like to be the first check-in and then double or triple down. Our general thesis is to invest in talented founders, and get in at ground zero and continue to invest all the way to the growth stage. It is super interesting being an entrepreneur doing this. When I was shaping the thesis for HelloFresh in the U.S., I wanted to start a company and have quantitative and quality resources, which early on for startups is friends and family. If a company has early product market fit, there is opportunity.

Why do you like being typically the first investor in a startup?

Ciambella: I think it is often the ability to craft and mold the company–getting it to find the right business model and early pilot customers. You usually only get one crack at it: Being hands-on in the beginning, you can see successful companies scale.

You say 2021 will be a big year for early-stage investments. How so?

Ciambella: If you look at 2021, all of the largest mutual funds have gone down from growth to venture. Large venture capital is going downstream, and I don’t think that trend will stop. There is so much crowded capital and assets are going to get picked up. We are starting to see our companies raise subsequent capital. Big tech investment is going from public to venture, and seed is the next wave.

What would you say was the biggest lesson learned during your time at HelloFresh that you took over to Antler?

Ciambella: The biggest thing is working with great people and keeping those networks close.

How do you like working with founders?

Ciambella: The interesting thing is we are vertical agnostic, but invest in trends and addressable markets. I like founders who have a strong quantitative skill set combined with grit. And they have the analytical skill set to build the business, and be married to the business. It is a personal issue to launch a company, and it comes from someone who lived in the trenches with the problem for a couple of years.

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Panelists discuss what they expect to see in the digital health space in 2021.

Ganesan says e-commerce has hit an inflection point and the shift to online is real.

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

Carbyne closed a $25 million Series B1 after the company watched its annual recurring revenue grow 350 percent last year

Source: https://news.crunchbase.com/news/strategy-session-former-u-s-hellofresh-founder-finds-early-stage-fix-with-antler/

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Undisclosed funding propels Digit insurance to Unicorn League

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Barely two weeks into 2021 and India’s burgeoning startup industry has already found its first unicorn of the year. Insurance tech startup Digit insurance has hit a valuation of $1.9 Bn following an undisclosed amount of funding by its existing investors.

Logo of insurance tech startup Digit Insurance

It must be noted that the Pune based startup doesn’t have a long history of funding. Its $85 Mn funding in January last year was its first ever external funding, which technically means that it has managed to achieve the unicorn status only with its second external funding round. This is a rare feet for an Indian startup.

The $85 Mn funding gave the startup an eye-popping valuation of $850 – 900 Mn. The funding gave all its existing investors collectively 10% stake in the company.

Digit’s Insurance operating profit for FY20 stood at approximately INR 226 Crore as compared to 299 Crore in FY19. This is as per the regulatory filings, which was accessed by Techpluto.

Who are Digit insurance’s existing investors?      

  • A91 Partners
  • Faering Capital
  • TVS Capital

It must be noted that $85 Mn funding round also participation of power couple Virat Kholi and Anushka Sharma. As per the regulatory filings accessed by Techpluto, Digit Insurance has allotted 2,66,667 equity shares to Virat Kholi and 6,6667 equity shares to Anushka Sharma at a premium of RS 65 per share.

Last year (2020) turned out to be a pretty good year for the tech insurance space. Many promising startups including Turtlemint and Plum managed to raise impressive funding rounds from investors. Additionally, last year Acko General Insurance raised $60 Mn in a round led by German insurance giant Munich Re.

2020 also the entry of a big elephant in the room, after Paytm made an official foray into the insurance space by acquiring Mumbai based insurance company Raheja QBE.

What is making everyone buoyant about the insurance space is the low penetration of insurance in India. As per the rough estimate, insurance penetration in India stands at merely 3.69%, which is among the lowest in the world.

Source: https://www.techpluto.com/undisclosed-funding-propels-digit-insurance-to-unicorn-league/

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