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How this Seattle VC missed out on Auth0’s seed round, but persisted and landed a big payoff

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Founders’ Co-op Managing Partner Chris DeVore. (Founders’ Co-op Photo)

Seattle venture capitalist Chris DeVore felt something special when he first connected with Auth0 co-founder Eugenio Pace.

DeVore, an early-stage investor and managing partner with Founders’ Co-op, knew he wanted to get in early on Pace’s entrepreneurial journey as it was taking root in the 2013 to 2014 timeframe.

There was just one problem.

Founders’ Co-op already owned a stake in an Auth0 competitor, an early-stage San Francisco startup by the name of Meldium that also helped companies more securely manage apps, passwords and other login information.

As a result, DeVore had to take a pass on Auth0’s seed round, which drew a $2.4 million investment in 2014 from the likes of Bessemer Venture Partners*, Portland Seed Fund, K9 Ventures and NXTP Labs.

It was a tough deal to miss out on, but DeVore said that they always try to avoid overlap in the portfolio.

“We need to be all-in on each team and what they’re doing and it just doesn’t work to have members of a high-trust, high-transparency founder community competing with each other,” DeVore told GeekWire this week.

However, the tides turned for DeVore in September 2014 when Meldium announced its acquisition by LogMeIn for $15 million. It was a nice little exit for Founders’ Co-op, but nothing compared to what lie ahead with Auth0.

Freed from his commitments to Meldium, DeVore connected again with the Auth0 team, which at the time was being led by CEO Jon Gelsey. Dusting off his contacts, DeVore re-engaged and participated in the company’s $6.9 million Series A round in 2015.

It’s a good thing DeVore returned. In one of the largest acquisitions of a privately-held Seattle area tech company in recent years, Auth0 announced Wednesday that it was being acquired by Okta for $6.5 billion.

Looking back at that early Series A investment today, DeVore bluntly notes: “We’re hugely grateful to both Jon and Eugenio for letting us come along.”

The $6.5 billion deal is a blockbuster — especially considering that Auth0 was valued at $1.9 billion just eight months ago after its last $120 million venture capital round.

DeVore declined to disclose the financial payoff that Founders’ Co-op received, but he did note that it was the “highest cash-on-cash return multiple ever” for the firm.

And what would have happened if Founders’ Co-op would have snuck into the seed round? DeVore tells us it would have doubled the firm’s return.

Even still, most venture investors would be pretty happy with a $6.5 billion exit in the portfolio. And DeVore said he’s certainly glad they persisted, and got into the later round of funding in 2015.

“We had deep conviction in both the team and opportunity, and when that happens we have a hard time letting it go, even if we have to pay a little more to participate,” said DeVore, whose firm is also an early backer of Seattle-area unicorns Remitly and Outreach.

*(Interesting side note, venture capitalist Sunil Nagaraj, who was at Bessemer at the time, first connected with the Auth0 team in the offices of Simply Measured, a Seattle company co-founded by Aviel Ginzburg, who is now a general partner at Founders’ Co-op. Nagaraj writes about the early days of Auth0 here). 

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Source: https://www.geekwire.com/2021/seattle-vc-missed-auth0s-seed-round-persisted-landed-big-payoff-series/

Start Ups

Fresh blueberries 8 weeks after harvest? RipeLocker raises cash to extend life of produce with patented containers

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RipeLocker (left to right) lead systems engineer Eric Levi, head of software Andy Harrah and CEO and co-founder George Lobisser with a RipeLocker container. (RipeLocker photo)

The news: RipeLocker announced that it raised $5 million in fresh funding, money that the Bainbridge Island ag-tech startup will use to sell patented “low-atmosphere” containers designed to preserve recently harvested flowers and produce. It also announced that US Department of Agriculture started trials with RipeLocker, part of an effort to examine whether the technology can reduce chemicals typically used to extend the storage life of produce. The new round of funding — provided by angel investors from the agriculture, technology and shipping industries — comes on top of a $2 million round last summer and it brings total funding to $12 million.

Roll out: The 7-person company is still in the early stages of product adoption, noting in a press release that the first wave of containers will be sold beginning this summer. We’ve asked the company for pricing.

An ag-tech wave: Washington has produced a number of ag-tech startups in recent years, not a surprise given the state’s strong agriculture connections.

  • Bellevue’s Pollen System is using drones and sophisticated mapping to help wine growers and other farmers better understand what crops need water or are susceptible to disease.
  • And just last week GeekWire reported on Carbon Robotics, a Seattle startup led by Isilon Systems co-founder Paul Mikesell whose self-driving robot uses artificial intelligence to identify weeds growing in fields of vegetables, then zaps them with thermal bursts from lasers.
  • TerraClear, another AI-based hardware system, is being created by Smartsheet co-founder Brent Frei to remove pesky rocks from farmers’ fields.
  • What’s interesting about this new wave of ag-tech startups? Interestingly, they are all founded by very experienced software entrepreneurs who’ve each seen big payouts and exits in their past companies.

A father-son team: RipeLocker is led by George Lobisser, who preciously co-owned and led Pace International, a post-harvest food company focusing on transportation and logistics. His son, Kyle Lobisser, a devices engineer who previously worked for Boeing, Apple, and Zee, helped create the storage container which creates a low-oxygen vacuum that keeps air saturated with water vapor. This system, which is patented, prevents berries and other produce from losing moisture.

Blueberries, hops and flowers: Founded in 2016 and after extensive testing, the company now believes that it is on the cusp of upending the fresh flower and produce supply chain. In recent tests, the company noted that the pallet-size containers preserved freshly cut roses for four weeks; fresh hops for six weeks and organic blueberries for 8 weeks. In the case of the blueberries, the company noted that the berries emerged in “pristine condition.”

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Source: https://www.geekwire.com/2021/fresh-blueberries-8-weeks-harvest-ripelocker-raises-cash-extend-life-produce-patented-containers/

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London-based Lumio raises €1.2 million seed round to grow users’ money on autopilot

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Lumio, the personal finance brain that grows its users’ money on autopilot, has raised around 1.2 million in seed funding. The backing came from angel investors including Matteo Berlucchi, William Frewen, Richard Fearn, Ben Lundie as well as 1,208 crowd investors to help Lumio achieve their mission of growing 1 million customers’ money by 2024.

Lumio was created in 2017 to take personal finance management (PFM) to a new level – Personal Finance Optimisation. Lumio delivers all the convenience of the other ‘PFM’ players, but takes things further by enabling customers to connect their entire financial lives, matches users with the right product at the right time and sets up automatic transfers to grow users’ money on autopilot.

Lumio’s core focus as a company is to be 100% driven on how they can be the most efficient company in the industry in using data to grow customers’ money in the right product, at the right time.

Charlie Richardson, founder & CEO of Lumio, said: “After a turbulent 12 months, it’s an incredible start to 2021 by smashing our fundraising target and most exciting of all, welcoming over twelve-hundred new crowdfunding investors to join some of the UK’s most successful angel investors, as Lumio investors. The funds will be used to achieve product market fit, accelerate the product intelligence & personalisation and scale Lumio internationally.”

Lumio was founded by Charlie Richardson, Adrian Shedden and Tom Richardson with a vision of a world in which everyone has the financial security and peace of mind to decide their future. With aspirational young people still left to fend for themselves in the financial jungle, Lumio acts as an intelligent and independent app that acts in the customers’ best interest to fully optimise their money.

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Source: https://www.eu-startups.com/2021/04/london-based-lumio-raises-e1-2-million-seed-round-to-grow-users-money-on-autopilot/

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Start Ups

A cooling trend in public markets makes UiPath’s down-round IPO a win for the company

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Robotic process automation (RPA) unicorn UiPath last night priced its IPO at $56 per share, above its raised price target range of $52 to $54. The company sold 9,416,384 shares at that price, alongside 14,474,393 from existing shareholders. Its underwriters can purchase 3,583,616 shares at its IPO price if they so choose.

UiPath raised $527.3 million on a gross basis for the primary shares that it sold in the transaction, a deal that values the company at around $29.1 billion on a nondiluted basis. On a fully diluted basis, The Exchange calculates that UiPath is worth up to $31 billion.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


UiPath’s pricing run has been fascinating to watch. The company first proposed a $43 to $50 per-share IPO price range; at that price, UiPath was worth $22.2 billion to $25.8 billion on a nondiluted basis. A coup? For a company that valued at just over $10 billion a year ago, you’d think so. The company’s final IPO price is nearly a tripling of its 2020 worth.

But for UiPath, things are complicated by a 2021 private round that valued the company at $35 billion, a figure that weighs somewhat heavily around the company’s neck.

Not that we should hold the final down-round IPO price differential against UiPath. It got away with raising $750 million at an inflated price before turning around and raising another half-billion at a more reasonable (more on that in a moment) valuation while providing all but its very final investors with excellent returns.

Its employees should do well, too, I reckon. (And Alphabet. Perhaps the company can now afford to bring more of its contractors on full-time thanks to, say, the nearly 21x return that its late-stage group CapitalG made on the 13 million UiPath shares it purchased during its Series B.)

Regardless, after watching the UiPath IPO pricing dance from its first S-1 filing through settling at $56 per share, I think the only parties that should feel a bit silly are the investors who decided that pushing up the value of the former startup by 3.5x in a less than a year was durable logic. Let’s talk about why.

Insanely valuable, just not that insanely valuable

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Source: https://techcrunch.com/2021/04/21/a-cooling-trend-in-public-markets-makes-uipaths-down-round-ipo-a-win-for-the-company/

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Start Ups

Remote hiring startup Deel raises $156M at a $1.25B valuation after 20x growth in 2020

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Many of the world’s organizations shifted to remote work due to the COVID-19 pandemic. But even as more people are vaccinated and offices are planning re-openings, it’s clear that for some organizations, remote work is here to stay. 

Deel, a startup which provides payroll, compliance tools and other services to help businesses hire remotely, has seen increased demand in the wake of this shift.

And today, the San Francisco company has announced that it has raised $156 million in Series C funding led by the YC Continuity Fund and existing backers Andreessen Horowitz and Spark Capital. Uber CEO Dara Khosrowshahi, former Stripe payments guru Lachy Groom, Jeffrey Katzenberg, Jeff Wilke, and Anthony Schiller also participated in the round, among others. 

The raise is notable for a few reasons. For one, it comes just over seven months after Deel raised a $30 million Series B financing. So it is essentially more than 5x the size of that round. It’s also a big deal because it propels Deel, a 3 year-old company, to unicorn status with a $1.25 billion valuation. The raise also comes after a massive year of growth for Deel, which says it saw a “20x” increase in revenue in 2020 with over 1,800 business clients. That’s up from 500 at the time of its September raise.

Co-founded by MIT alumni Alex Bouaziz and Shuo Wan, Deel aims to allow businesses “to hire anyone, anywhere, in a compliant manner.” It claims that by using its services, businesses can hire and onboard international employees or contractors in under 5 minutes, with no local entity required and that “paying them in 120+ currencies takes just a click.”

Deel plans to use its new capital to continue an international expansion and set up 80 new Deel-owned entities across the world in 2021. Deel also plans to do some hiring itself, and grow its product offerings. The company’s own team is entirely remote, and has grown from 7 employees to over 120 across 26 countries since January 2020. CB Insights projects the industry for virtual HR software will grow to $43 billion by 2026 as technology platforms like Deel help businesses make the transition to remote-first work.

YC Continuity’s Ali Rowghani, who has joined Deel’s board as part of the funding, believes Deel was already at the forefront of remote work pre-pandemic and that “it will be long after.”

“The way people work is fundamentally changing… the [Deel] team is uniquely equipped to remove the obstacles of remote work so companies hire the best talent in the world, instead of only those nearest to them,” he said in a written statement.

As TechCrunch previously reported, Deel today already provides various tools to employees and the organizations that they work for, such as payroll services, tax compliance information, assistance on building contracts, invoicing services and a range of insurance options covering health and other areas related to working life.

Now the plan is to continue building out that stack with more services aimed at both the workers and their employers. That includes loans based on salary for workers, more insurance and benefits options and other offerings.

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Source: https://techcrunch.com/2021/04/21/remote-hiring-startup-deel-raises-156m-at-a-1-25b-valuation-after-20x-growth-in-2020/

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