How Carl Pope helped drive a $500 million pledge to push the U.S. “Beyond Carbon” (Part 2)

Billionaire businessman and philanthropist Michael Bloomberg recently pledged to rapidly spend $500 million in a bid to push the U.S. “Beyond Carbon,” aiming to end this country’s use of coal and natural gas power in a generation or less.

In another recent piece, I featured an in-depth interview with Carl Pope, the veteran environmental leader who has essentially been the inspirational force behind Bloomberg’s evolution. The former New York City Mayor had never given a major gift to environmental causes as of a decade or so ago, until Pope “convinced” him to get involved.

Carl Mike Option 1

My previous piece was an attempt to understand the ethical vision influencing Bloomberg’s work, by looking at Pope’s personal story and the history of the environmental movement he has helped to shape. Below, Pope joins me again to look at the details of Bloomberg’s “Beyond Carbon” plan, including how he was able to persuade Bloomberg to take it on, and some areas of controversy that could arise as the $500 million is distributed.

Greg Epstein: You and Michael Bloomberg met around a decade ago or so, right?

Carl Pope: About 12 years ago, actually. 2007.

Epstein: Bloomberg had never given a major gift to an environmental group before he met you, and, as he writes in the book, you “convinced him” to get massively involved, to the tune now of many hundreds of millions of dollars. What do you think it is about you, the way that you approach things, or the work you do that made the two of you, in this relatively unlikely partnership, work so well?

Pope: We both like big ideas, and we both like to pursue them very pragmatically. We set very high expectations for what we want to get, and we’re willing to take necessarily small steps to get there. That’s one thing.

The second thing is, my original environmental frame was air pollution, [which] I worked on the first seven or eight years I was an environmentalist. Mike is a big public health advocate. So the fact that I was talking about saving people’s lives made a lot of sense to him.

Epstein: He talked about how you ‘showed him the numbers,’ back in 2011, on just how deadly coal actually is.

Pope: Yeah, that was the deal sealer.

Epstein: Interpersonally, what the interactions between you and him like?

Pope: We’re both public figures who are actually somewhat introspective, and so it works.

Epstein: I’ve read the “Beyond Carbon” plans as they’re presented by the Bloomberg organization. They do seem quite promising as far as broad, sweeping PR statements go.

But whether or not they will work is all in the details, right? You’re a detail-oriented person, as you just mentioned, so, what are some of the practical steps the plan calls for that you think deserve the most attention, beyond the headlines?

Pope: In A Climate of Hope, Mike and I articulated an approach to climate in which we gave our reasons for thinking that most climate leadership is going to come not from national governments but from businesses, cities, provinces, civic organizations, from the bottom up.

Haus, the real estate startup founded by Garrett Camp, raises $7.1M

Haus, a startup aiming to make home ownership more affordable and flexible, is announcing that it has raised $7.1 million in new funding.

This amount combines a $4.1 million seed equity investment led by Montage Ventures and $3 million in debt, which will help finance Haus’ new co-investment model.

Haus was created by Uber co-founder Garrett Camp as part of his startup studio Expa . When it launched in 2016, it was focused on digitizing and bringing more transparency to the home-buying process. Since then, former Trulia executive Jonathan McNulty joined as CEO, and he’s introduced that co-investment model, where Haus helps to finance a purchase by buying equity in the home.

The idea is that instead of taking on debt, the homeowner is sharing both the risks and the rewards of changing home values with Haus. Nad instead of paying off a mortgage, the homeowner makes monthly payments Haus that both purchase more equity and the startup and its investors.

The company estimates that these payments are, on average, 30% lower than a traditional mortgage payment. In an email, McNulty said that Haus caps the “option” portion of the payment, so that homeowners are always purchasing as much equity as they did with their first payment, even if the home’s value increases.

haus screenshot

“From a consumer perspective, there have historically only been two ownership options, pay cash for your home, or borrow money from a bank or lender with a mortgage,” he said. “With Haus, we replace that mortgage relationship and create a direct partnership with the consumer, to create an entirely new way of financing a home.”

Haus can also work with existing homeowners to replace part or all of their mortgage —  McNulty noted that in some cases, it may make sense “to keep some mortgage debt active for tax purposes.”

When asked about how the consumers have responded so far, McNulty declined to provide specific numbers, but he said the service is active in Washington, California and Oregon, and that “the early demand is significant, which makes sense given the affordability challenges we see in these western states.”

Other new investors include RIT Capital Partners and Tim Ferriss. McNulty said the funding will allow the company to expand its team, particularly to do more marketing and to enter new geographies.

“The current real estate model has been broken for a long time,” Montage Ventures Partner Matt Murphy in a statement. “Homeownership … for people ages 25 to 34 is much lower than it should be. We are excited to partner with Haus to bring much needed relief to current homeowners and prospective buyers alike.”

EBay picks 5.5% stake in India’s Paytm Mall

EBay said today it is buying a 5.5% stake in e-commerce marketplace Paytm Mall as the global firm makes another push to gain footprint in India’s fast-growing e-commerce market.

The two firms did not disclose financial terms of the deal, but a source familiar with the matter told TechCrunch that EBay has invested between $150 million to $200 million in Paytm Mall at a valuation of $3 billion, up from under $2 billion last year. Paytm Mall had raised about $650 million prior to today’s announcement, the source said.

The agreement will see more than a million products of EBay be made available for purchase to users on Paytm Mall, Vijay Shekhar Sharma, founder and CEO of Paytm said in a statement. “We will jointly select the inventory we want to bring here. It will be done in a month’s time,” he added. EBay will continue to operate its e-commerce site in India, the company said.

The deal could strengthen Paytm Mall’s position in India, where it competes with Walmart -owned Flipkart, and Amazon India. Online retail sales in India are expected to grow to about $72 billion in three years, according to research firm eMarketer.

Paytm Mall, which is backed by SoftBank, Alibaba, Ant Financial, and SAIF Partners, reported GMV sales of $188 million in 2018. In last one year, sales at the e-commerce arm of One97 Communications, which also runs Paytm wallet, has lost momentum after it cut down the lofty offers it was bandying out to customers, according to an Economic Times report.

Like Amazon and Flipkart, Paytm Mall operates on an inventory-led model in India, but in recent months it has shifted its focus to offline-to-online and online-to-offline models, wherein orders placed by customers are serviced from local brand stores. A second source told TechCrunch that Paytm Mall intends to aggressively grow its non-inventory based models. Paytm Mall claims to have over 100,000 seller partners on its platform.

This is EBay’s third investment in India. The company made its first investment in the country in Snapdeal in 2013, and then on Flipkart. After the Indian firm was acquired by Walmart for $16 billion, EBay sold its stake for $1.1 billion and relaunched its e-commerce site with cross-border trade as its new focus.

“We are deeply committed to India and believe there is huge growth potential and significant opportunity in this dynamic market,” said Jooman Park, Senior Vice President of EBay’s APAC business. “This new relationship will accelerate our cross-border trade efforts in a rapidly growing market, providing hundreds of millions of Paytm and Paytm Mall customers with access to EBay’s unparalleled selection of goods.”

India’s 30-year-old MyMoneyMantra raises $15M to scale its financial services marketplace

MyMoneyMantra, a 30-year-old New Delhi-based firm that operates a marketplace of financial services, has raised $15 million in its maiden funding round from an external source to expand its offerings and reach in the nation.

Dutch investment firm IFSD BV and private equity firm Vaalon Capital funded the $15 million round in MyMoneyMantra, the Indian firm said on Wednesday. A person familiar with the matter said the round valued MyMoneyMantra at about $50 million.

The company’s founder Raj Khosla said MyMoneyMantra, which employs about 2,500 employees and serves over 4 million customers across 50 cities, will use the capital to explore ways to capture a larger share of the market.

Khosla said the firm would work closely with Vaalon Capital’s team to expand its offerings and deepen its ties with banks and insurance companies. In the financial year that ended in March, MyMoneyMantra generated a revenue of $19.6 million.

MyMoneyMantra works with over 90 banks, non-bank lenders, and insurance companies to help customers get deals on loans and credit cards. The firm, which competes with BankBazaar and Andromeda in India, has done business of over $5.5 billion to date.

Today’s announcement underscores investors’ growing interest in India’s fintech market that saw tens of millions of users try out digital payment services for the first time after the Indian government banned some paper bills. Cash still dominates most of the transactions in the country.

India’s fintech startups raised $285.6 million in the quarter that ended in March this year, thereby surpassing China to become Asia’s top fundraising hub for financial technology, according to CBInsights.

And that momentum continues. In recent months, a score of startups that are trying to help India’s next hundreds of millions of users access financial services have secured significant capital from major investors. While some startups such as Open and Niyo are operating “neo banks” to help blue-collar workers access financial services, many big names like Paytm and Ola have launched their own credit cards.

Contract management startup Icertis becomes unicorn with $115M new round

Icertis, a Washington-headquartered startup that develops cloud-based software to help large companies manage contracts, has raised $115 million at more than a billion dollar valuation to become the latest SaaS unicorn as it looks to further expand its footprints across the globe.

The Series E round for the 10-year-old firm was led by Greycroft and PremjiInvest, and saw participation from existing investors B Capital Group, Cross Creek Advisors, Eight Roads, Ignition Partners, Meritech Capital Partners, and PSP Growth. The startup, which also has offices in Seattle, Pune, Singapore, London, Paris, Sydney, has raised $211 million to date.

Icertis said it would use the fresh capital to expand its technology platform to address wider use cases. It said it would also expand its blockchain framework that integrates with enterprise contract management platforms to solve challenges such as transparency in supply chain and certification compliance. Its revenue are at about $100 million currently — another key area it intends to scale.

The firm, which claims that five of the world’s most valuable companies are its clients (one of which is Microsoft), said it would also scale its sales and marketing efforts to reach “every leading company in the world” and expand its partner ecosystem. It is also looking to acquire startups that are a good fit to its contracting business.

Icertis lets users manage almost all kinds of contracts. Companies use Icertis’ products to handle procurement, sales, and corporate contracts, including non-disclosure agreements. In addition to helping users create contracts, Icertis’ software also tracks when terms are met, ensures regulatory compliance, and automates administrative tasks like sending renewal reminders.

Icertis, which was founded originally in India, says it has more than 2,000 high profile customers and it helps them manage more than 5.7 million contracts with an aggregate value of more than $1 trillion. In a statement, Mark Terbeek, a partner at Greycroft, said Icertis’ ability to win “a huge stable of blue-chip customers” was among the factors that attracted them to invest in the company.

“Nothing is more foundational than contract management as every dollar in and every dollar out of a company is governed by a contract. As the CLM market takes off, we are thrilled to have Premji Invest join the Icertis family, Greycroft double down by co-leading this round, and all investors re-up their commitment as we execute on our mission to become the contract management platform of the world,” said Icertis’ cofounder and CEO Samir Bodas, in a statement.

Icertis competes with a number of firms including Apttus — which has raised north of $400 million, Springcm — which was acquired by DocuSign, Conga — which has raised over $100 million, Ariba, and Concord.

What seed-stage dilution tells us about changing investor expectations

Round sizes are up. Valuations are up. There are more investors than ever hunting unicorns around the globe. But for all the talk about the abundance of venture funding, there is a lot less being said about what it all means for entrepreneurs raising their early funding rounds.

Take for instance Seed-stage dilution. Since 2014, enterprise-focused tech companies have given up significantly more ownership during Seed rounds. What gives?

Scale is an investor in early-in-revenue enterprise technology companies, so we wanted to better understand how this trend in Seed-stage dilution impacts companies raising Series A and Series B rounds.

Using our Scale Studio dataset of performance metrics on nearly 800 cloud and SaaS companies as well as Pitchbook fundraising records covering B2B software startups, we started connecting the dots between trends in valuations, round sizes, and winner-take-all markets.

Bottom line for founders: Don’t let all the capital in venture mislead you. There’s an important connection between higher Seed-stage dilution and increased investor expectations during Series A and Series B rounds.

These days, successful startups are growing up faster than ever.

Founders face an important trade-off decision

Voyant Photonics raises $4.3M to fit lidar on the head of a pin

Lidar is a critical method by which robots and autonomous vehicles sense the world around them, but the lasers and sensors generally take up a considerable amount of space. Not so with Voyant Photonics, which has created a lidar system that you really could conceivably balance on the head of a pin.

Before getting into the science, it’s worth noting why this is important. Lidar is most often used as a way for a car to sense things at a medium distance — far away, radar can outperform it, and up close, ultrasonics and other methods are more compact. But from a few feet to a couple hundred feed out, lidar is very useful.

Unfortunately, even the most compact lidar solutions today are still, roughly, the size of a hand, and the ones ready for use in production vehicles are still larger. A very small lidar unit that could be hidden on every corner of a car, or even inside the cabin, could provide rich positional data about everything in and around the car with little power and no need to disrupt the existing lines and design. (And that’s not getting into the many, many other industries that could use this.)

Lidar began with the idea of, essentially, a single laser being swept across a scene multiple times per second, its reflection carefully measured to track the distances of objects. But mechanically steered lasers are bulky, slow and prone to failure, so newer companies are attempting other techniques, like illuminating the whole scene at once (flash lidar) or steering the beam with complex electronic surfaces (metamaterials) instead.

One discipline that seems primed to join in the fun is silicon photonics, which is essentially the manipulation of light on a chip for various purposes — for instance, to replace electricity in logic gates to provide ultra-fast, low-heat processing. Voyant, however, has pioneered a technique to apply silicon photonics to lidar.

In the past, attempts in chip-based photonics to send out a coherent laser-like beam from a surface of lightguides (elements used to steer light around or emit it) have been limited by a low field of view and power because the light tends to interfere with itself at close quarters.

Voyant’s version of these “optical phased arrays” sidesteps that problem by carefully altering the phase of the light traveling through the chip. The result is a strong beam of non-visible light that can be played over a wide swathe of the environment at high speed with no moving parts at all — yet it emerges from a chip dwarfed by a fingertip.

LIDAR Fingertip Crop

“This is an enabling technology because it’s so small,” said Voyant co-founder Steven Miller. “We’re talking cubic centimeter volumes. There’s a lot of electronics that can’t accommodate a lidar the size of a softball — think about drones and things that are weight-sensitive, or robotics, where it needs to be on the tip of its arm.”

Lest you think this is just a couple yahoos who think they’ve one-upped years of research, Miller and co-founder Chris Phare came out of the Lipson Nanophotonics Group at Columbia University.

“This lab basically invented silicon photonics,” said Phare. “We’re all deeply ingrained with the physics and devices-level stuff. So we were able to step back and look at lidar, and see what we needed to fix and make better to make this a reality.”

The advances they’ve made frankly lie outside my area of expertise, so I won’t attempt to characterize them too closely, except that it solves the interference issues and uses a frequency modulated continuous wave technique, which lets it measure velocity as well as distance (Blackmore does this as well). At any rate, their unique approach to moving and emitting light from the chip lets them create a device that is not only compact, but combines transmitter and receiver in one piece, and has good performance — not just good for its size, they claim, but good.

“It’s a misconception that small lidars need to be low-performance,” explained Phare. “The silicon photonic architecture we use lets us build a very sensitive receiver on-chip that would be difficult to assemble in traditional optics. So we’re able to fit a high-performance lidar into that tiny package without any additional or exotic components. We think we can achieve specs comparable to lidars out there, but just make them that much smaller.”

photonics testbed

The chip-based lidar in its test bed.

It’s even able to be manufactured in a normal fashion like other photonics chips. That’s a huge plus when you’re trying to move from research to product development.

With this first round of funding, the team plans to expand and get this tech out of the lab and into the hands of engineers and developers. The exact specs, dimensions, power requirements and so on are all very different depending on the application and industry, so Voyant can make decisions based on feedback from people in other fields.

In addition to automotive (“It’s such a big application that no one can make lidar and not look at that space,” Miller said), the team is in talks with numerous potential partners.

Although being at this stage while others are raising nine-figure rounds might seem daunting, Voyant has the advantage that it has created something totally different from what’s out there, a product that can safely exist alongside popular big lidars from companies like Innoviz and Luminar.

“We’re definitely talking to big players in a lot of these places, drones and robotics, perhaps augmented reality. We’re trying to suss out exactly where this is most interesting to people,” said Phare. “We see the evolution here being something like bringing room-size computers down to chips.”

The $4.3 million raised by Voyant comes from Contour Venture Partners, LDV Capital and DARPA, which naturally would be interested in something like this.

China startup deals shrink as fundraising for investors plummets

Chinese startups continue to weather tough times as private investors, caught in a cash crunch, are concentrating money into fewer deals.

China’s deal-making activity for startups in the six months ended June halved from a year ago to 1910, according to data from consulting firm ChinaVenture’s research arm. The amount invested in domestic startups during the first half of 2019 plummeted 54% to $23.2 billion.

The slide in startup investment comes as the money behind the money shrinks amid a cooling economy in China that is exacerbated by a trade war with the U.S. Fundraising for investors was already showing signs of slowdown a year earlier. In the first half of this year, private equity and venture capital firms in China secured 30% less than what they had raised over the same period a year ago, amounting to a total of $54.44 billion. 271 funds managed to raise, down 52%.

vc funding china

That money from limited partners is also flowing to a small rank of investors. 12 institutions accounted for 57% of all the capital landed by VCs and PEs in the period. Investment coffers that have gotten a big boost include the likes of TPG Capital, Warburg Pincus, DCG Capital, Legend Capital, and Source Code Capital.

Healthcare was the most backed sector during the six months, although proptech startups scored the biggest average deal size. Some of the highest funded companies from the period were artificial intelligence chip maker Horizon Robotics, shared housing upstart Danke and China’s Starbucks challenger Luckin.

Patreon raises $60M Series D, targets international growth and more customization

Patreon, the San Francisco-based platform that helps over 100,000 online content creators manage paid membership communities for their most dedicated fans, has raised $60 million in Series D funding.

Glade Brook Capital, a late-stage fund based in Greenwich, Connecticut, led this round with participation from prior investors like Index Ventures, CRV, Thrive Capital, Initialized, and DFJ Growth. This totals $165 million in funding that Patreon has raised since its founding in 2013.

In February, I published a 5-part series analyzing Patreon’s founding story, product evolution, business, competition, and overarching vision. The company has prioritized established creators who can generate $1,000+ per month in membership revenue as its core customer and is focused on being the underlying platform they use to manage relationships with superfans through a CRM, payment processing, and gating of exclusive access to content and discussion groups.

It makes money by taking a cut of each creator’s monthly revenue earned from their fans’ Patreon memberships.

Co-Founder & CEO Jack Conte shared news of the Series D via a blog post and tells me the new funds will contribute toward these priorities:

  1. Benefits functionality: integrating with more tech platforms using the Patreon API to ensure only paying members receive access to creators’ exclusive discussion groups on Discord or Discourse, receive special badges that mark them as a patron on Reddit, etc.
  2. Premium features: adding more features to the new Pro and Premium pricing tiers it launched in March which provide extra services and functionality to creators in exchange for a higher cut of their membership revenue (8% and 12%–plus payment processing fees–respectively, compared to 5% for the original Lite tier).
  3. Page customization: enabling creators to customize their Patreon pages more by changing colors, layout, and font to fit their own brand.
  4. Merchandising: expanding Patreon’s fulfillment of merchandise for creators who offer merch as a reward to their fans who subscribe to a given membership tier by adding international shipping options and more merch products to select for custom branding.
  5. International expansion: ensuring Patreon is available in more languages and can easily handle international payments, plus staffing new offices in Dublin (Ireland), Porto (Portugal), and other locations yet to be finalized.

When I asked Conte whether he plans to use this new funding to make more acquisitions — Patreon acquired the white-label membership management platform Memberful last summer — he responded that there are no deals currently in the pipeline but M&A is certainly on the table if they identify the right opportunity:

“It’s been a few years that we have been seeing the ‘Patreon for X’ trend of startups focused on a specific niche like podcasting. We’re looking at those companies and always open to joining forces if the mission is aligned and product is great.”

As it announced in January, Patreon expects to surpass $500 million in payments processed during 2019, passing the milestone of over $1 billion paid out to creators since founding. Roughly 40% of those payments are international and the overall monthly spend of fans who use Patreon is $12 on average.

 

Glade Brook Capital’s managing partner Paul Hudson, who originally founded the firm as a hedge fund, shared a statement with TechCrunch on why he invested in Patreon:

“Too many talented creators struggle to monetize their efforts in the digital era. Patreon is growing so fast because creators recognize the value in building recurring fan-based revenue streams and improving engagement with their most passionate fans.”

Conte also revealed that a handful of artists, including musician Serj Tankian and comedian Hannibal Buress, invested in Patreon as part of this new round. He hopes that the Pro and Premium tiers will draw more creators who don’t already use Patreon and support existing customers who need more advanced toolset given the size of their fanbase.

Online shopping guide SMZDM surges 44% on China stock market debut

When Chinese internet companies seek initial public offerings, they tend to look to the United States where rules for profitability are less strict. SMZDM, an online shopping guide that few people outside China have heard of, has joined a small rank of internet startups that are trading on public markets in mainland China.

SMZDM, short for Shen Me Zhi De Mai or “what’s worth buying” in Chinese, saw its shares soar nearly 44% on its first day of trading in Shenzhen. After pricing its IPO at 28.42 yuan ($4.13) and opening the day at 34.1 yuan, SMZDM closed at 40.92 yuan. This values the company at about 2.18 billion yuan ($320 million).

The company is raising 330 million yuan from the public offering and plans to spend the money on upgrading its big data capabilities so it can deliver more personalized content and services to users.

Before applying for an A-share listing on China’s main bourses, firms generally need a three-year track record of profitability, though the country has made progress to smooth the way for loss-making, high-potential tech firms. SMZDM clocked (in Chinese) net income of 19.35 million yuan ($2.81 million), 35.16 million yuan and 86.24 million yuan in 2015, 2016 and 2017. Its revenue climbed from 97.29 million in 2015 to 367 million yuan in 2017.

Since its founding nine years ago, SMZDM has only raised from one institutional investor, China Growth Capital. Why sell shares to the public when the company was already earning good money?

“For an internet startup to keep attracting talents, it needs to have a transparent corporate structure and an employee stock ownership plan,” Wu Haiyan, managing partner at China Growth Capital, told TechCrunch in an interview. “Of course, going public is another way to raise capital.”

SMZDM began life as founder Sui Guodong’s blog where he reviewed a range of gadgets as a pastime. Over time, the WordPress site blossomed into a public platform where people share guides to purchasing products of all sorts — from baby milk formula to Nikon’s latest lens — and where to get the best deal. When a transaction happens on its partnering marketplaces, SMZDM gets a commission.

The model means shopping guides like SMZDM rely overwhelmingly on shopping portals for success and are susceptible to the changes at the e-commerce behemoths. Indeed, over 85% of SMZDM’s commission and marketing revenues in 2018 came from Alibaba, JD.com, Amazon and its other major clients.

For now, at least, Alibaba and the like seem to show enough interest in third-party product review sites. As Wu argued, “the heart of e-commerce portals is to drive sales instead of building a community for giving and receiving unbiased feedback,” which is SMZDM’s value proposition. The key performance index of an online community, she added, is the level of user interaction and amount of content they generate.

That’s why both Alibaba and Tencent — which has backed e-commerce companies JD.com, Pinduoduo and Mogu — threw money at Xiaohongshu (“The Little Red Book” in Chinese), a part marketplace, part social media platform for learning lifestyle trends.

While shoppers on Xiaohongshu are predominantly female as is the case with most Chinese e-commerce services, over half of SMZDM’s users are male, a result largely attributable to its abundant content about hardware and home appliances.

That library of product reviews, Wu argues, is what sets SMZDM apart from its competitors.

“Building any community takes time and capital alone can’t help it grow,” the investor observed. “People stay for high-quality content and interaction with like-minded users. When a community starts to have its own vibe, people will stick around.”