Building the right team for a billion-dollar startup

From building out Facebook’s first office in Austin to putting together most of Quora’s team, Bain Capital Ventures managing director Sarah Smith has done a bit of everything when it comes to hiring. At TechCrunch Early Stage, she spoke about how to ensure the critical early hires are the right ones to grow a business. As an investor at Bain Capital Ventures, Smith has a broad view into the problems that companies face as they search for the right candidate to spur organizational success.

In our conversation, Smith touched on a number of issues such as who to hire and when, when to fire, and how to ensure diversity from the earliest days.

What to consider when you first think about hiring

When a company is making its first hires — and then evolving into a bigger organization — the processes and needs may change, but the culture should be consistent from the beginning, according to Smith. From there, an emphasis on good early managers is critical.

I would really encourage you to take some time to think about what kind of company you want to make first before you go out and start interviewing people. So that really is going to be about understanding and defining your culture. And then the second thing I’d be thinking about when you’re scaling from, you know, five people up to, you know, 50 and beyond is that managers really are the key to your success as a company. It’s hard to overstate how important managers, great managers, are to the success of your company.

So we’ll talk a little bit about how to think about that, as there’s a lot of questions around helping people grow into management for the first time. You, as a founder, might be managing people for the first time, so how to think about setting up the company for success.

(Timestamp: 4:15)

How do you build culture in the new remote environment?

10 proptech investors see better era for residential and retail after pandemic

The pandemic made the internet a lifeline for shopping, earning a living and maintaining personal relationships. Now, as lockdowns start to lift, the real estate industry has to figure out what that means.

Seeking answers, I surveyed the people who are betting on the biggest and most surprising changes in the sector — proptech investors. While landlords and their lenders may hope for a return to the past, proptech investors are focused on where the notion of place is going in the future. I have an in-depth writeup with many excerpts and my thoughts over on TechCrunch, including a look at the revival of neighborhood retail, the rebirth of cities and much more.

I couldn’t get into all of the great topics, though, including the rapid recent evolution of the residential sales and rental market, construction tech, related climate-tech topics and other issues.

So here are the thousands of words of answers in full, below. Extra Crunch subscription required. If you’re a startup founder, employee, investor, etc., you may also enjoy the previous editions of this survey, from the fall of 2020, spring of 2020 and fall of 2019.

The investors we talked to:

Clelia Warburg Peters, venture partner, Bain Capital Ventures

As the pandemic hopefully enters its final stages, how are the changes from this period affecting your real estate and proptech investment strategy? Are big trends of the present, like high nationwide housing demand and mass commercial vacancies, refocusing your investing strategy?

Above all, I think COVID will prove to be an accelerant to existing trends in both the residential and commercial space. I like to think of it as a decade of innovation acceleration in 24 months.

The pandemic has certainly refocused attention on life at home, and that combined with low interest rates has undeniably made this an incredible period for companies that touch the housing market. Given that I got into proptech through work at a family residential brokerage, this market has always been a big area of interest for me, and I would observe that we were in the midst of some major shifts in this market pre-COVID. The residential transaction disruption is now settling in three core categories: iBuyers (who buy homes directly from sellers and ultimately hope to own the sell-side marketplace), neobrokers (who generally employ their agents and use secondary services such as title mortgage and insurance to increase their revenue) and elite agent tools (platforms or tools focused on the top agents). Additionally, consumers are increasingly open to alternative financing tools, including home-equity-based financing models (where you sell a stake in your home, or you buy into full ownership in a home over time. The growth and proliferation of these new models are consolidating the whole residential market so that brokerage sales commissions and commission from the sale of mortgage, title and home insurance are now functionally one large and intertwined disruptable market. In this context, while some of the valuations we are seeing may be a little euphoric, I think there is no doubt that we are in a period of massive and sustainable innovation in how we buy and hold our homes and I think these trends are going to be enduring.

In the commercial arena, we were also in the midst of a meaningful shift in how companies were conceiving of office space, in many ways thanks to the innovations that WeWork brought to the market. But the pandemic has pushed this much further, fundamentally shifting the relationship between the landlord/manager (who has largely been in a position of power since the 1950s) and the tenant (who is now in a position of much greater power, more akin to a consumer of a luxury product). As a result of this, I think the best landlords will recognize that they are going to be under pressure to shift from simply providing a physical space, to helping provide tenants with a multichannel work experience. This might mean a physical/digital hybrid of systems that include access control, physical space management (both in the hub location and potentially in spoke locations), and a digital space for meetings and collaboration. These assets will need to be provided in the context of a much more human relationship, focusing on serving the needs of tenants. As lease terms inevitably shorten, tenants will need to be courted and supported in a much more active way than they have been in the past.

How do you see the big cities adapting to life after the pandemic — or will they? What solutions are you focusing on in particular for the future of urban living (co-living, ADUs, commercial conversion to residential, etc.)?

I think the experience of cities after the pandemic is going to be highly variable — for instance, the trajectories for Austin and New York will likely look radically different. I am personally uncertain about how co-living, or even commercial to residential conversion will be at play, but I do believe that there will be a few consistent areas of interest.

First, smaller-scale urban life will continue to be a significant trend. I think we will continue to see a proliferation of bike lanes, a focus on living in walkable neighborhoods, and a reliance on tools (such as the app Nextdoor) that reinforce our feeling of connection to our neighbors.

Second, I think we will continue to see a reliance on certain types of outsourced services — ghost kitchens for takeout or rapid provision of groceries and other essentials — and technologies and spaces that facilitate these will be a growth area.

Finally, I do believe that in some more sprawling urban environments ADUs will be an area of growth, particularly with seniors who are looking for an additional income stream so they can age at home. One caveat is that I think this will be something of a winner-takes-all space with a limited number of geographically dominant winners.

The demand for suburban-style living is back — for now. What are you focusing on across this category for the next year or two (new residential services and amenities, build-to-rent housing developments, etc.)?

The current transition out of urban environments and into suburban environments is playing out alongside some broader changes in the way the American public seems to be approaching homeownership. Over the past decade, there has been a net decline in homeownership and a net growth in renting. Some of this is by necessity, and some is by choice. I think one component of the tech-related opportunity in the migrations we see now will be around rental platforms and multifamily amenitization. There is still no data aggregator like the MLS on the rental side, and a number of portals (including Zillow Rentals, Apartment List, Zumper, RentalBeast and others) are competing to provide listing information to consumers. On the multifamily side, many multifamily operators are understanding that the integration of work/life/play is creating a new need for amenitization and greater services in their offerings. I think we will continue to see more and more emphasis on hospitality-style brand creation in the multifamily space, and much of this will be facilitated by different kinds of tech-facilitated amenities.

It’s also important to note the flood of both institutional and private investor money that is coming into the single-family rental space. (It may be that in the future a certain percent of the population is renting their primary home, but exposed to the property market through ownership of these kinds of real estate assets.) This growth is being facilitated by property management services like Mynd, marketplaces like Roofstock, and innovative products like Zibo or Knox Financial.

Hi Marley raises $25M to fund its AI-powered communication platform for the insurance industry

If you’ve ever had to file a claim with your insurance company, you know that it’s not exactly fun. Often, you’re on hold indefinitely waiting to speak to a live person. And if you’ve ever had to file an auto or home insurance claim, you know that all the back and forth with your carrier and the various vendors can take up so much time.

Hi Marley is a Boston startup that has set out to modernize communications in the insurance space by giving carriers a way to “seamlessly” communicate with their policyholders via text. The company just closed on a $25 million Series B funding round to help scale its SMS platform.

Hi Marley also includes other vendors in that communications channel, such as car repair or rental companies. The goal is to keep policyholders happier and less likely to churn to another carrier, in addition to helping carriers resolve claims faster.

On the back end, Hi Marley is a platform of apps, APIs and a layer of intelligence that integrates with other core systems such as Guidewire and Duck Creek “to deliver critical insights” to the carriers, according to CEO and co-founder Mike Greene. Per its website, Hi Marley’s messaging solution aims to streamline communication around claims, underwriting and policyholder service interactions “while simultaneously connecting everyone who touches that insurance experience into a singular, real-time conversation.”

Demand is there, and no doubt the COVID-19 pandemic forcing more people to go digital has led to still more consumer demand for new ways to communicate. Last year, the number of carriers using Hi Marley’s platform doubled, and the company saw a 4x increase in its user base, Greene said. Currently, the startup has over 40 customers live in production — including American Family, MetLife, Auto-Owners, Erie and MAPFRE.

“Unlike horizontal chat solutions, we are tackling the entire communication layer across the insurance enterprise for our carriers and their ecosystem partners,” Greene told TechCrunch.

Greene is no stranger to the space, having worked in the insurance sector for years. He previously co-founded and led Futurity Group, which was acquired by AON, a software and services company focused on monitoring and improving performance in P&C insurance.

Emergence Capital led the Series B round, which brings Hi Marley’s total raised since its 2017 inception to $41.7 million. Existing backers Underscore, True Ventures, Bain Capital Ventures, and Greenspring also participated in the financing, along with additional investors including Brewer Lane.

Emergence Capital Founder & General Partner Gordon Ritter — who took a seat on Hi Marley’s board — said his firm has been focused on finding the next iconic industry cloud company within the vertical for “quite some time.” 

“In the same way Veeva [a company Ritter chaired to a successful IPO in 2013] expanded from CRM to additional software solutions that power the pharma industry, we continue to be bullish on startups building vertically-focused solutions that can power an entire industry,” Ritter said.

Historically, he added, insurance has been viewed as a necessary evil, a purchase made purely for the sake of safety and security. And in today’s environment, carriers using “old” communication strategies will likely see a negative impact on performance, Ritter believes.

“Most of us can likely agree that our experiences dealing with insurers during times of need have been less than ideal, if not unpleasant altogether,” said Ritter, who actually has family with roots in the insurance industry. “But Mike wants to reverse the indifference or negative reputation; he is on a mission to make insurance lovable A new communication fabric between carriers and their ecosystem to benefit end customers is needed.”

Looking ahead, Hi Marley plans to use its new capital to create new features, ensure the platform scales across the enterprise and (naturally) do some hiring.

BlockFi lands a $350M Series D at a $3B valuation for its fast-growing crypto-lending platform

If there were any doubt about a cryptocurrency boom, we need look no further than at the explosion of growth of certain companies in the space.

One such company is BlockFi, which today announced it has closed on a massive $350 million Series D funding that values it at $3 billion. While this news in and of itself is certainly attention-getting, it’s even more impressive when you consider the startup just raised a $50 million Series C last August at a $450 million valuation. The latest financing brings its total equity raised since inception to about $450 million, with the company raising $100 million across its seed and Series C rounds.

Zac Prince — who comes from a background in consumer lending —  founded BlockFi with Flori Marquez in 2017. The Jersey City, New Jersey-based startup raised $1.6 million in a seed round of funding that closed in 2018 and was led by ConsenSys Ventures and included participation from SoFi.  

Prince describes BlockFi as a financial services company for crypto market investors that offers a retail and institutional-facing suite of products. On the retail side of its platform, people can use its mobile app to earn a yield on their crypto holdings (6% on Bitcoin, 8.6% on stablecoins), buy and sell crypto and get low-cost loans secured by the value of their crypto portfolio “so they can get liquidity without selling,” he said. Specifically, clients can buy and sell digital assets (from Bitcoin, Ethereum and Link to Litecoin, PaxG and multiple stablecoins) directly on BlockFi.

The startup is also a lender and provider of trade execution services to institutions participating in digital asset markets. 

It’s a model that seems to be working in a big way. Since the end of 2019, BlockFi has seen its client base grow from 10,000 to more than 225,000. Today, BlockFi has 265,000 funded retail clients and over 200 institutional clients.

And it’s lent over $10 billion to its retail, corporate and institutional clients.

Over the past year, BlockFi has also accomplished the following:

  • Increased the number of assets on its platform to $15 billion, compared to $1 billion last March — with a 0% loss rate across its lending portfolio since inception.
  • Bumped its monthly revenue to over $50 million, up from $1.5 million a year prior.
  • Boosted its headcount to about 530 people, compared to 100 last March.

“In less than six months since we completed our Series C, Bitcoin and other digital assets have assumed a central role in many investors’ portfolios and in broader financial markets,” Prince said. “Our conviction that digital assets are the future of finance has been vindicated by our client base, which grew 10 times year over year in 2020 and has more than doubled since the end of 2020.”

New investor Bain Capital Ventures, partners of DST Global, Pomp Investments and Tiger Global co-led the Series D, which included participation from a slew of other firms including existing backer Valar Ventures, Breyer Capital, Susquehanna Government Products, Jump Capital and Paradigm, among many others. BlockFi employees who have been employed for more than one year have the opportunity to receive liquidity on a portion of their equity via a secondary tender offer as part of the financing round.  

BlockFi believes that investor enthusiasm for the Series D round reflects both the company’s strong business growth, as well as “broader conviction in cryptocurrencies as an asset class.” 

“Individual investors, institutional asset managers and corporate treasury departments are all exploring avenues to invest in cryptocurrencies,” the company said.

“Our goal for BlockFi has always been for it to facilitate cryptocurrencies going mainstream – and each day provides more evidence that is exactly what is occurring,” said Marquez, who serves as the company’s SVP of operations.

Bain Capital Ventures Partner Stefan Cohen agrees. He believes there are currently limited banking services available for crypto holders, which puts BlockFi in an opportune position.

“Bitcoin has already eclipsed $1 trillion in market cap and is likely headed higher to fulfill its store of value promise. As wealth accumulates to BTC holders, most will look for ways to earn yield or borrow against their holdings for more traditional asset purchases such as homes, cars and education,” he wrote via email. “BlockFi stands alone as the leader in bringing simple, secure, everyday financial services to cryptocurrency holders.”

The startup’s exponential growth over the past year proves “there was clearly a huge need for BlockFi’s services,” Cohen said.

“Their vision was to build an easy-to-use, trusted platform to bring cryptocurrency to the mainstream, and they’ve truly succeeded,” he added.

Meanwhile, Cohen said Bain Capital has had a long-term thesis on Bitcoin becoming a store of value and has actively invested in “picks-and-shovels businesses” that enable what is now a $1 trillion-plus market. 

“Trusted financial services are a critical pillar of the space, and we view it as a highly strategic component of the market,” he added.

Looking ahead, the startup has plans to launch in the second quarter a Bitcoin Rewards Credit Card, which will give BlockFi clients the ability to earn Bitcoin cash back on every transaction. It plans to use the new capital to continue growing its product suite, expand into new global markets and for strategic acquisitions. The company also plans to double its headcount by year’s end, according to Prince.

BlockFi already has a global presence and retail clients in over 100 countries. Last year, it opened institutional client service offices in London and Singapore.  This year, the startup is looking to add regional support in Europe, APAC and LatAm for its retail clients. 

Over the past week, BlockFi was making headlines for other reasons. The company was the victim of an “unusual assault” on March 7 when an attacker spammed the platform with fake sign-ups and abusive language.

To that end, the company acknowledges that it became aware that an unauthorized third party began attempting bulk sign-ups on its platform on March 7.

“We do not know the origin of the email addresses used for these ‘sign-ups’  but they did not come from us and they were not the emails of BlockFi clients,” the company told TechCrunch. “In general, we would characterize the event as vulgar spam’ and the total number of valid emails affected was less than 1,000.”

The company maintains that no data from BlockFi was accessed and its data was not compromised.  

“Our clients’ funds and data were safeguarded throughout the incident,” the company added. “Since then, our engineering and security teams have taken steps to prevent events like this from happening in the future. In addition, we reached out directly to all of the valid email recipients to apologize for the incident.”

Bain’s Sarah Smith, former head of HR at Quora, will share the recruiting playbook at Early Stage

If you’re a startup that’s worried about building your team today for tomorrow’s successes you’re not going to want to miss our session with Bain Capital Ventures’ Sarah Smith at TechCrunch Early Stage on April 1 & 2.

The current Bain Capital Ventures partner who invests in early to mid-stage companies saw what it was like to grow a startup business firsthand as the vice president of human resources at Quora, a position she held from 2012 to 2016.

While at Quora, Sarah built the HR and operations teams responsible for company culture, compensation, benefits, equity refreshers, performance reviews, HRIS/ATS implementation, people development, policy enforcement and content moderation.

She scaled the company from 40 to 200 employees across all hiring from university to executive search.

After that, she became the vice president of advertising sales and operations, where she led the launch of monetization and onboarding of more than 500 advertisers to the self-service ads platform.

Smith joins an all-star cast of speakers at Early Stage. They range from Zoom CRO Ryan Azus (“How to build a sales team”) to Calendly founder Tope Awotona (“How to bootstrap”) to Kleiner Perkins’ Bucky Moore (“How to prep for Series A fundraising”), are making themselves available to answer your burning questions on just about any topic. And that’s just the tip of the iceberg.

Unlike other TechCrunch events, there is no “main stage” at our TC Early Stage events. Each session is designed to tackle one of the many core competencies any startup needs to be successful. But this isn’t just about listening — every session includes plenty of time built in for audience Q&A. Essentially, it’s all breakout sessions, all day.

What’s more — everyone who buys a ticket to TC Early Stage gets free access to Extra Crunch! Folks who buy a ticket to one of the two events get three months free, and folks who purchase a combination ticket (to both events) get six months free! An Extra Crunch membership includes:

Of course, TC Early Stage dual event ticket holders will get access to both events (April 1-2 and July 8-9) and have access to all the content that comes out of the event on demand. Plus you can take advantage of additional savings with Early Bird pricing for another couple of weeks!

Mercenary CEOs know all too well that this is about the most bang you can get for your buck. Period.

Check out the full list of speakers here and you can get your ticket now!

Justworks’ Series B pitch deck may be the most wonderfully simple deck I’ve ever seen

It may be tough to remember, but there was a time long ago when Justworks wasn’t a household name. Though its monthly revenue growth charts were up and to the right, it had not even broken the $100,000 mark. Even then, Bain Capital Venture’s Matt Harris felt confident in betting on the startup.

Harris says that, with any investment (particularly at the early stage of a company), the decision really comes down to the team and more importantly, the founder.

Two of the main reasons this deck “sings” is the line it draws to the Justworks culture and that the deck isn’t “artificially simple.”

“Isaac is a long-term mercenary, but short- and medium-term missionary,” said Harris. “The word that really comes to mind is ‘structured.’ If you ask him to think about something and respond, he’ll think about it and come back with an answer that has four pillars underneath it. He’ll create a framework that not only answers your specific question, but can prove to be a model that will answer future questions of the same type. He’s a systems thinker.”

In 2015, Justworks closed its $13 million Series B, led by Bain Capital Ventures. Harris took a seat on the board. Since, the duo have been working closely together as Justworks has grown into the behemoth it is today.

But these relationships work both ways. Oates said that one of the main things he looks for in an investor is how they’ll react when the chips are down.

“Different people behave different ways under stress,” said Oates. “And people show their values and integrity in those types of situations. That’s when these things are tested. The simple way I think about this is, will this person pick me up from the airport in a pinch?”

Though he’s never asked, he believes Harris absolutely would.

On Extra Crunch Live, Harris and Justworks CEO Isaac Oates sat down to talk through how they resolve disagreements, why Oates never changed what must be one of the most simple pitch decks I’ve ever seen in my life, and how founders should think about pricing their products.

They also gave live feedback on pitch decks submitted by the audience in the Pitch Deck Teardown. (If you’d like to see your deck featured on a future episode, send it to us using this form.)

We record Extra Crunch Live every Wednesday at 12 p.m. PST/3 p.m. EST/8 p.m. GMT. You can see our past episodes here and check out the March slate right here.

Episode breakdown

  • Working through disagreements — 11:30
  • The Justworks Series B Deck — 15:00
  • Pricing the product — 25:00
  • Pitch deck teardown — 33:00

Working through disagreements

Despite their glowing praise of one another at the top of the episode, the founder/investor duo haven’t always seen eye to eye. But they did provide an excellent framework around how founders and VCs should wade through disagreements around the business.

Oates gave an example from 2017. He was considering putting in a dual-class stock, which would give a kind of high-vote, low-vote structure to the company. He said that it interested him because he’d seen other companies out there who were vulnerable after going public, whether it be activist shareholders or other outside forces, and that that might prevent a CEO from thinking about the long term.

Harris disagreed and gave a long list of reasons why that neither shared on the episode. However, Oates said that one of the great things to come out of that disagreement was seeing how Harris went about this decision.

Harris introduced Oates to every expert on this particular subject that he knew, asking them to have meetings and discuss it further.

In the end, Oates ultimately stuck to his guns and decided to go forward with the dual-class stock, but armed with all the information he needed to feel confident in the decision.

“I learned a lot about how Matt thinks and how he approaches decisions,” said Oates. “The process of making decisions is just as important as the content. As I’ve gotten to know him more, it means that when we find something where we don’t necessarily agree, we’re able to step back and make sure we have an intellectually rigorous way to process it.”

The story reminded me of a similar conversation with Ironclad CEO Jason Boehmig and Accel’s Steve Loughlin. They explained how much time and energy they spent early on in their investor/founder relationship talking about the “why” behind opinions and strategies and decisions, plotting out the short-, medium- and long-term plan for the company.

“I want to know what you want the company to look like so that I can push you and we can have constructive conversations around the plan,” said Loughlin. “That way, I’m not getting a phone call about whether or not they should hire a head of customer success without any context or a true north in mind.”

Bain’s Matt Harris and Justworks’ Isaac Oates to talk through the Series B deal that brought them together

It’s been almost 10 years since Justworks launched. The platform, founded by Isaac Oates, was yet another example of software eating the world; in this particular instance, it was the world of HR. Since, the company has raised nearly $150 million in funding.

All the way back in 2016, Bain Capital Ventures caught a whiff of Justworks’ potential for success. Partner Matt Harris led the company’s $13 million Series B round back when Justworks hadn’t even hit $1 million in annual revenue.

On the next episode of Extra Crunch Live, we’ll sit down with Oates and Harris to discuss how they met, how the deal went down and how they’ve managed their board member/founder relationship over the last five years.

As with any episode of ECL, Oates and Harris will also give live feedback on audience-submitted pitch decks during the Pitch Deck Teardown.

Extra Crunch Live is a members-only series that goes down each Wednesday at 12 p.m. PST/3 p.m. EST. If you’re not yet an Extra Crunch member, you should take a hard look in the mirror and then hit up this link.

Matt Harris started his investing career at Bain Capital private equity in 1995. In 2000, he founded his own firm called Village Ventures where he spent 12 years and invested primarily in fintech startups. In 2012, he returned to Bain Capital Ventures. His portfolio includes Acorns, Finix, Ribbon, and of course, Justworks, among many others.

Oates served for 12 years in the National Guard and Army Reserve as an intelligence officer. He also served as a software engineer at Amazon before starting his first company, Adtuitive, which was acquired by Etsy. Oates led the HR and payments team at both Adtuitive and Etsy, learning firsthand the ways in which the system was fundamentally broken. Justworks was born in 2012 and has gone on to become a household name in enterprise tech.

On Wednesday’s episode, we’ll talk about why Harris felt conviction in making a bet on Justworks and why Oates went with Harris over other investors. We’ll also learn more about how they handle disagreements, build trust, and their broader thoughts on current enterprise trends.

Then, we’ll dive into the Pitch Deck Teardown. Anyone can submit a pitch deck to be featured on an episode of Extra Crunch Live, but EC members will be prioritized in the list. If you want to get in on the action, submit your deck right here.

As with just about everything we do here at TechCrunch, audience members can also ask their own questions.

Extra Crunch Live has left room for you to network (you gotta network to get work, amirite?). Networking is open starting at 2:30 p.m. EST/11:30 a.m. PST and stays open a half hour after the episode ends. Make a friend!

As a reminder, Extra Crunch Live is a members-only series that aims to give founders and tech operators actionable advice and insights from leaders across the tech industry. Here’s yet another chance for you to join.

Harris and Oates join a world-class cast of speakers on Extra Crunch Live. In February alone we spoke to Lightspeed’s Gaurav Gupta and Grafana’s Raj Dutt, Felicis’ Aydin Senkut and Guideline’s Kevin Busque, and Accel’s Steve Loughlin and Ironclad’s Jason Boehmig.

You can check out past episodes of ECL here and upcoming schedule here.

Information on how to register for the Bain + Justworks episode on Wednesday is below.

See you there!

Grid AI raises $18.6M Series A to help AI researchers and engineers bring their models to production

Grid AI, a startup founded by the inventor of the popular open-source PyTorch Lightning project, William Falcon, that aims to help machine learning engineers more efficiently, today announced that it has raised an $18.6 million Series A funding round, which closed earlier this summer. The round was led by Index Ventures, with participation from Bain Capital Ventures and firstminute. 

Falcon co-founded the company with Luis Capelo, who was previously the head of machine learning at Glossier. Unsurprisingly, the idea here is to take PyTorch Lightning, which launched about a year ago, and turn that into the core of Grid’s service. The main idea behind Lightning is to decouple the data science from the engineering.

The time argues that a few years ago, when data scientists tried to get started with deep learning, they didn’t always have the right expertise and it was hard for them to get everything right.

“Now the industry has an unhealthy aversion to deep learning because of this,” Falcon noted. “Lightning and Grid embed all those tricks into the workflow so you no longer need to be a PhD in AI nor [have] the resources of the major AI companies to get these things to work. This makes the opportunity cost of putting a simple model against a sophisticated neural network a few hours’ worth of effort instead of the months it used to take. When you use Lightning and Grid it’s hard to make mistakes. It’s like if you take a bad photo with your phone but we are the phone and make that photo look super professional AND teach you how to get there on your own.”

As Falcon noted, Grid is meant to help data scientists and other ML professionals “scale to match the workloads required for enterprise use cases.” Lightning itself can get them partially there, but Grid is meant to provide all of the services its users need to scale up their models to solve real-world problems.

What exactly that looks like isn’t quite clear yet, though. “Imagine you can find any GitHub repository out there. You get a local copy on your laptop and without making any code changes you spin up 400 GPUs on AWS — all from your laptop using either a web app or command-line-interface. That’s the Lightning “magic” applied to training and building models at scale,” Falcon said. “It is what we are already known for and has proven to be such a successful paradigm shift that all the other frameworks like Keras or TensorFlow, and companies have taken notice and have started to modify what they do to try to match what we do.”

The service is now in private beta.

With this new funding, Grid, which currently has 25 employees, plans to expand its team and strengthen its corporate offering via both Grid AI and through the open-source project. Falcon tells me that he aims to build a diverse team, not in the least because he himself is an immigrant, born in Venezuela, and a U.S. military veteran.

“I have first-hand knowledge of the extent that unethical AI can have,” he said. “As a result, we have approached hiring our current 25 employees across many backgrounds and experiences. We might be the first AI company that is not all the same Silicon Valley prototype tech-bro.”

“Lightning’s open-source traction piqued my interest when I first learned about it a year ago,” Index Ventures’ Sarah Cannon told me. “So intrigued in fact I remember rushing into a closet in Helsinki while at a conference to have the privacy needed to hear exactly what Will and Luis had built. I promptly called my colleague Bryan Offutt who met Will and Luis in SF and was impressed by the ‘elegance’ of their code. We swiftly decided to participate in their seed round, days later. We feel very privileged to be part of Grid’s journey. After investing in seed, we spent a significant amount with the team, and the more time we spent with them the more conviction we developed. Less than a year later and pre-launch, we knew we wanted to lead their Series A.”

JupiterOne raises $19M Series A to automate cyber asset management

Asset management might not be the most exciting talking topic, but it’s often an overlooked area of cyber-defenses. By knowing exactly what assets your company has makes it easier to know where the security weak spots are.

That’s the problem JupiterOne is trying to fix.

“We built JupiterOne because we saw a gap in how organizations manage the security and compliance of their cyber assets day to day,” said Erkang Zheng, the company’s founder and chief executive.

The Morrisville, N.C.-based startup, which spun out from healthcare cloud firm LifeOmic in 2018, helps companies see all of their digital and cloud assets by integrating with dozens of services and tools, including Amazon Web Services, Cloudflare, and GitLab, and centralizing the results into a single monitoring tool.

JupiterOne says it makes it easier for companies to spot security issues and maintain compliance, with an aim of helping companies prevent security lapses and data breaches by catching issues early on.

The company already has Reddit, Databricks and Auth0 as customers, and just secured $19 million in its Series A, led by Bain Capital Ventures and with participation from Rain Capital and its parent company LifeOmic.

As part of the deal, Bain partner Enrique Salem will join JupiterOne’s board. “We see a large multibillion dollar market opportunity for this technology across mid-market and enterprise customers,” he said. Asset management is slated to be a $8.5 billion market by 2024.

Zheng told TechCrunch the company plans to use the funds to accelerate its engineering efforts and its go-to-market strategy, with new product features to come.

The story behind Rent the Runway’s first check

When Rent the Runway co-founders Jennifer Fleiss and Jennifer Hyman got their first term sheet, it had an exploding clause in it: If they didn’t sign the offer in 24 hours, they would lose the deal.

The co-founders, then students at Harvard Business School, were ready to commit, but their lawyer advised them to pause and attend the meetings they had previously set up with other investors.

Twelve years later, Rent the Runway has raised $380 million in venture capital equity funding from top investors like Alibaba’s Jack Ma, Temasek, Fidelity, Highland Capital Partners and T. Rowe Capital. Fleiss gave up an operational role in the company to a board seat in 2017, as the company reportedly was eyeing an IPO.

But the shoe didn’t always fit: Earlier this year, Rent the Runway struggled with supply chain issues that left customers disgruntled. Then, the pandemic threatened the market of luxury wear more broadly: Who needs a ball gown while Zooming from home? In early March, the business went through a restructuring and laid off nearly half of its workforce, including every retail employee at its physical locations.

In 2009, Fleiss and Hyman were successful Harvard Business School students. Hyman’s father knew a prominent lawyer who agreed to advise them on a contingency basis in exchange for connecting them with potential investors.

Still, fundraising “was extremely hard,” Hyman said. “We were in the middle of a recession and we were two young women at business school who had never really done anything before.”

Fleiss said venture capital firms often sent junior associates, receptionists and assistants to take the meeting instead of dispatching a full-time partner. “It was clear they weren’t taking us very seriously,” Fleiss said, recounting that on one occasion, a male investor called his wife and daughter on speaker to vet their thoughts.

In an attempt to test their thesis that women would pay to rent (and return) luxury clothing, Fleiss and Hyman started doing trunk pop-up shows with 100 dresses. On one occasion, they rented out a Harvard undergraduate dorm room common hall and invited sororities, student activity organizations and a handful of investors.

Only one person showed up, said Fleiss: A guy “who was 30 years older than anyone else in the room.”

Old-fashioned meets nontraditional