Orchard, founded in 2017, was relatively early to the proptech industry. The company, originally called Perch, focused on dual-trackers, which are folks who are both buying and selling a home simultaneously. FirstMark Capital led both the Series A and the Series B funding rounds for Orchard, doubling down on the real estate platform.
It goes without saying, we’re absolutely thrilled to have FirstMark Capital Managing Partner Rick Heitzmann and Orchard CEO Court Cunningham join us on an upcoming episode of Extra Crunch Live. The event takes place on May 5 at 3pm ET/noon PT. Register here.
Orchard has raised more than $350 million, including a $200 miilion+ debt financing. Alongside running a full brokerage company for dual-tracking home buyers and sellers, it also offers title and mortgage services. But what’s most interesting about the vertically integrated company is the innovation it’s doing around the consumer experience. Namely, Orchard is taking an entirely new approach to home searching, which has been incredibly stagnant despite the rush to digitize the process by major tech players.
Orchard allows consumers to get ML-driven recommendations based on homes they’ve already liked, and search by different rooms in the house. For example, perhaps the backyard or the kitchen is the most important part of the house — Orchard lets you default to that pic when browsing listings.
Meanwhile, Rick Heitzmann founded FirstMark Capital all the way back in 2008. He’s led investments in companies including Pinterest, Airbnb, StubHub, Tapad, DraftKings, Riot Games, Ro, Discord, Carta and more.
On Extra Crunch Live, we’ll talk more about what Heitzmann looks for in a founder, what he sees in Cunningham and the future of proptech, why Cunningham chose FirstMark and even take a walk through Orchard’s early pitch deck.
We’ll also look at pitch decks submitted by the audience, giving you the chance to hear directly from a founder and investor how they consume funding decks, what works and what doesn’t. If you want to submit your deck to be featured in a future episode of ECL, hit up this link.
It’s gonna be a blast.
As a reminder, anyone can attend Extra Crunch Live, but on-demand access to the content is reserved strictly for Extra Crunch members. You can join Extra Crunch here.
Pinterest to test live-streamed events this month with 21 creators
Pinterest is expanding into live events. The company is planning to host a three-day virtual event that will feature live-streamed sessions from top creators, including big names like Jonathan Van Ness and Rebecca Minkoff, among others. The virtual event will run inside the Pinterest app from May 24th through May 25th, and will serve as the company’s first public test of directly streaming creator content to its over 475 million global users.
The rise of the creator economy and a pandemic-fueled demand for virtual events led Pinterest to explore the idea of live streaming. Last fall, it began testing a “class communities” feature that allowed users to sign up for Zoom classes through Pinterest, while creators used Pinterest’s boards to organize materials, notes, and other resources. These communities also included a group chat option and shopping features.
The new live-streamed sessions will operate a bit differently.
For starters, they’re not directing users off-site to Zoom for the sessions. Instead, users will launch the live-streaming experience directly inside Pinterest mobile app and remain there during the sessions. Pinterest users can also comment to interact with the creator during their stream, but there is no longer any shopping functionality, Pinterest tells TechCrunch.
The live streams allow up to five “guests” and an unlimited number of viewers. Meanwhile, moderators — which may include Pinterest employees, during this test — will help to control the experience. They will also have the ability to remove people from the chat if they do not uphold Pinterest’s Community Standards.
The forthcoming event’s lineup will focus a variety of topics, including food, design, cooking, style, and more.
Jonathan Van Ness‘ session will discuss morning rituals and self-care routines. Fashion designer Rebecca Minkoff will teach Pinterest users how to style their summer wardrobe. Others featured during the event include food creators GrossyPelosi and Peter Som, who will showcase favorite recipes; Women’s Health magazine will talk about using vision boards to achieve your goals; Jennifer Alba will show how to communicate the Zodiac through sign language; and Hannah Bronfman will offer ideas for creating an at-home spa night.
In total, Pinterest will feature around 21 creators throughout the three-day event, with around 7 different session per day. Users will be directed to the live event via a new “Live” tab inside the Pinterest app for iOS and Android, where they can view the schedule and join sessions.
x”As a visual platform, people discover billions of ideas on Pinterest every day, and we’re always looking for new ways to help them bring those ideas to life,” says David Temple, Pinterest’s Head of Creators.
Temple notes Pinterest has integrated with third-party live-streaming technologies and built its own in-house messaging systems to power live interactions.
“We’re excited about the opportunity to respond to Pinner feedback for more dynamic and timely events as new interests like cooking have emerged for many in quarantine, and trends like beauty, fashion, and home renovation are on all-time highs as we move into a post-pandemic world,” Temple adds.
However, Pinterest isn’t discussing how it views the potential for live events longer-term. For the time being, it’s not offering tools that could woo creators away from other platforms where they can monetize their fans through features like donations, tips, virtual gifts, paid ticketing, subscriptions, or brand partnerships via a creator marketplace. Without such options, Pinterest could have a hard time competing for creators’ attention.
Nearly every big tech platform today is making a play for creators, and some are even willing to throw cash at them to win them over. Facebook, Instagram, YouTube, TikTok, and Twitter are all building out features that let creators do more than build an audience to monetize through ads or brand deals. Now, fans can send creators money during or after streams, subscribe for exclusive content, pay for access and more, depending on the platform.
New types of creator services are emerging, too, including the audio chat room experience pioneered by Clubhouse (and being cloned by everyone else), as well as dozens of virtual events startups hoping to win the market.
Pinterest’s attraction among such heavy competition isn’t clear, but the company will use this experiment to learn more about what works for its own community.
Pinterest tested its live streaming technology with employees a few weeks ago, but this will be the first time the feature will be available to the public.
While the event lineup can be viewed on the web, the live streams themselves will only run inside the Pinterest app for iOS and Android starting May 24th.
Is there a creed in venture capital?
How should venture capitalists and corporate innovators assess Din Djarin, the protagonist of The Mandalorian? He’s introduced as a bounty hunter, a mercenary vocation in the Star Wars mythos that has been reserved primarily for villains.
One of the most interesting aspects of Jon Favreau’s show is how Din Djarin wrestles with the orthodoxy of his Mandalorian beliefs. His insistence on honor makes the character an appealing hero, and his character’s growth is demonstrated by when he chooses to be flexible versus when he holds fast to the rules he believes.
Although “This is the way” emerged as the show’s quotable soundbite, there is another line that’s more relevant to venture capital and corporate innovation: “You’re changing the deal.” Din Djarin uses this phrase to spar with adversaries who try to advance their objectives by disregarding clearly understood agreements.
Enforcement is so unusual in the world of startups that I consider it a mostly dead-end path.
Of course, terms change in venture capital and entrepreneurship all the time, with investors and entrepreneurs finding themselves in Din Djarin’s position.
This challenge is built into the very structure of venture capital fund raising, in which a Series A financing is usually followed by Series B, and then Series C, and each of these transactions frequently adds, subtracts, and modifies terms, changing the deal from the perspective of the startup and existing investors.
PayPal acquires returns logistics business, Happy Returns
PayPal announced today it’s acquiring Happy Returns, a returns solution provider that offers online shoppers access to easier ways to send back unwanted merchandise to retailers without having to box it up and ship it themselves. The company today offers a network of more than 2,600 drop-off returns locations in the U.S., including those in over 1,200 metros and in every U.S. state.
It also has relationships with hundreds of brands that have been using its returns software and reverse logistics services. The company says it will continue to offer its returns experience to online retailers and shoppers as a part of PayPal.
Founded in 2015, Santa Monica-based Happy Returns’ value proposition was to take some of the overhead and cost out of the returns process for online retailers. Because online shoppers can’t inspect items they buy directly, online retail tends to see higher return rates, especially in apparel. Happy Returns found that online items are three to four times as likely to be returned than those purchased in store, for example.
Meanwhile, today’s retailers have to compete with giants like Amazon and Walmart, both which enable returns more easily for their customers by way of their large brick-and-mortar footprints — Amazon with Whole Foods’ other locations, and Walmart with its own stores. In fact, the foot traffic that offering an Amazon returns desk or locker system in-store has led retailers like Kohl’s and Stein Mart to embrace the enemy by catering to shoppers with Amazon returns in their own stores.
Today, the Happy Returns solution offers a combination of software, services and logistics that allows retailers to manage their returns through their own retail stores, by carrier, as well as through Happy Returns’ “Return Bar” locations. These are found in physical retail stores like Paper Source, Sur La Table, Cost Plus World Market and others. The service has been used by several digitally native brands, including Everlane, Rothy’s and Parachute Home, among others.
Happy Returns has also been closely working with PayPal throughout its history, it notes. And notably, PayPal made a strategic investment in the business in 2019, as part of an $11 million financing round.
Following the deal’s close, Happy Returns will continue to work with retailers and shoppers both on and off PayPal’s platform, it says. The company’s co-founders, David Sobie and Mark Geller, and its full 120+ team, will join PayPal, and will report to Frank Keller, VP Consumer In-Store and Digital Commerce at PayPal.
PayPal is not disclosing the deal terms. To date, Happy Returns had raised $25 million in funding.
“This is an incredibly exciting milestone for our company, and it would not have been possible without the hard work and dedication of our entire team,” an announcement on Happy Returns’ website reads. “We are so proud of what our team has accomplished and are grateful for the tenacity, creativity and empathy Happy Returns employees bring to work each day. We are confident that the best is yet to come, and are looking forward to our next chapter as part of the PayPal organization.”
Software subscriptions are eating the world: Solving billing and cash flow woes simultaneously
Although recurring revenue businesses have been around for a long time, the trend toward a subscription economy has escalated rapidly in the last few years. IDC expects that by 2022, 53% of all software revenue will be purchased with a subscription model. Even the car subscription market is set to grow by 71% by 2022.
Many types of businesses are looking for ways to earn recurring revenue — and it has gone beyond business-to-consumer companies like Netflix and Dollar Shave Club. Business-to-business companies are also joining in, even those with products that last a long time. For instance, elevator-maker Otis offers Otis ONE, a subscription-connected elevator solution that offers predictive maintenance insights.
Subscription billing options should make it easy to manage all types of subscriptions, including integrating analytics to provide a more complete picture of the subscriptions landscape.
Promising, but there are pitfalls
Subscription business models are attractive, but there are two major pitfalls. At the top of the list is payment. Regardless of company size, there’s an ongoing need to convince customers to sign up long term.
Companies also need to accommodate new payment methods and ensure ongoing compliance with interstate and international tax laws. As a result, the payment process can quickly become painful.
As any company with recurring revenue scales, it becomes increasingly challenging to manage subscriptions, especially with homegrown systems, changing subscription offers and the complexities of converting customers from free trials to paid subscriptions. Subscription billing options should make it easy to manage all types of subscriptions, including integrating analytics to provide a more complete picture of the subscriptions landscape.
Businesses also have to keep in mind that every time they add more product categories or expand into new geographies, they need to tack on extra software code to change their operations and stay sales-tax-compliant. As they expand globally, this can become an obstacle to rapid growth and flexibility.
To keep the company focused and maintain growth without having to expend resources, subscription businesses need a specialized billing system so they can focus on customer acquisition and revenue growth rather than staying on top of billing complexity.
The CAC payback gap constrains growth
The second issue: How do businesses cover the funding gap between when customers sign up and when they pay? In the subscription economy, companies that would previously receive a customer’s payments all at once now earn revenue spread across a monthly or quarterly subscription fee.
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