Roofstock, which makes it easier to buy a home as an investment property, just raised $50 million in new funding

There are plenty of startups that say they’re making it easier to buy a home. There are fewer startups that are promising to make it easier to buy a home as an income-producing property. Among these is Roofstock, a four-year-old, Oakland, Ca.-based online marketplace where buyers and sellers buy and sell rental homes in more than 70 U.S. markets — homes with tenants residing in them oftentimes. The idea: both institutional and retail investors can buy and sell homes without forcing renters to leave their homes; buyers can also presumably generate income from day one.

It’s a huge market to chase after. Though there’s an assortment of (huge) estimates out there, Roofstock pegs the single-family rental market at a whopping $3 trillion. Investors just gave the company a fresh $50 million to go after it more aggressively, too. Earlier backer SVB Capital led the round, but it was joined by Citi Ventures, Fort Ross Ventures and 7 Global Capital, as well some other earlier investors, like Khosla Ventures, Bain Capital Ventures, Lightspeed Venture Partners and Canvas Ventures.

The company, which says it has facilitated more than $2 billion worth of transactions since launching, isn’t willing to talk about its post-money valuation (it has now raised roughly $125 million altogether). But its cofounder and CEO, Gary Beasley, answered some of our other questions this morning.

TC: How, or where, does the company drum up inventory?

GB: Roofstock’s properties come from a variety of sources, including individual property owners directly, brokers and agents who represent owners of investment properties, property management companies, listing services, and institutions. Last year the number of home sellers on Roofstock’s marketplace increased by 10 times.

TC: And they can list tenant-occupied properties on your marketplace?

GB: Yes [and that] has been difficult to do through traditional channels.

TC: Is there anything preventing new landlords from increasing the rent of tenants as soon as a property changes hands?

GB: Landlords need to honor existing leases and follow local laws and regulations when contemplating rent increases.

TC: Who determines pricing — Roofstock or the sellers?

GB: Sellers ultimately determine the pricing and sale strategy [but we] provide sellers with several data-driven tools to help them set a listing price, including comparable sales values, probabilities of sale at various prices, and estimates of days-to-sell. We also provide sellers with the ability to field offers on homes or list at a non-negotiable price. Nearly all sellers on Roofstock select the option to field all offers.

TC: Do you use any other information ‘hubs’ to assess the value of properties?

GB: We combine our data with various third-party sources, like Corelogic, House Canary, and Zillow to give investors a portrait of a property that includes valuation, neighborhood rating, comparisons with similar homes, as well as other tools and information.

TC: How does Roofstock get paid?

GB: We make money through each transaction. We charge 2.5 percent to sellers, and .5 percent to buyers.

TC: How long on average does it take to sell a house?

GB: The majority of properties that sell on Roofstock go under contract within 15 days or less, which is significantly faster than the industry standard.

TC:  How many properties has Roofstock sold thus far?

GB: We’ve facilitated more than $2 billion of transactions on our marketplace since we launched, and as of the fourth quarter of last year, our run rate was about 500 home transactions per month. It’s been extremely popular with the next generation of investors: 75% of our users are first-time real estate investors, and more than half are under 35.

TC: You operate in more than 70 U.S. markets. Where are you seeing the most transactions?

GB:  The top markets on Roofstock are Atlanta, Memphis, Indianapolis, Jacksonville and the greater Chicago area.

TC: How might a downturn in the economy impact the company’s business?

GB: Broadly speaking, single-family rentals have historically been a strong investment option during economic downturns. During the 2007 to 2011 housing downturn, rental rates [showed] positive rent growth despite broader economic conditions.

Indian tech startups raised a record $14.5B in 2019

Indian tech startups have never had it so good.

Local tech startups in the nation raised $14.5 billion in 2019, beating their previous best of $10.5 billion last year, according to research firm Tracxn .

Tech startups in India this year participated in 1,185 financing rounds — 459 of those were Series A or later rounds — from 817 investors.

Early stage startups — those participating in angel or pre-Series A financing round — raised $6.9 billion this year, easily surpassing last year’s $3.3 billion figure, according to a report by venture debt firm InnoVen Capital.

According to InnoVen’s report, early stage startups that have typically struggled to attract investors saw a 22% year-over-year increase in the number of financing deals they took part in this year. Cumulatively, at $2.6 million, their valuation also increased by 15% from last year.

Also in 2019, 128 startups in India got acquired, four got publicly listed, and nine became unicorns. This year, Indian tech startups also attracted a record number of international investors, according to Tracxn.

This year’s fundraise further moves the nation’s burgeoning startup space on a path of steady growth.

Since 2016, when tech startups accumulated just $4.3 billion — down from $7.9 billion the year before — flow of capital has increased significantly in the ecosystem. In 2017, Indian startups raised $10.4 billion, per Tracxn.

“The decade has seen an impressive 25x growth from a tiny $550 million in 2010 to $14.5 billion in 2019 in terms of the total funding raised by the startups,” said Tracxn.

What’s equally promising about Indian startups is the challenges they are beginning to tackle today, said Dev Khare, a partner at VC fund Lightspeed Venture Partners, in a recent interview to TechCrunch.

In 2014 and 2015, startups were largely focused on building e-commerce solutions and replicating ideas that worked in Western markets. But today, they are tackling a wide-range of categories and opportunities and building some solutions that have not been attempted in any other market, he said.

Tracxn’s analysis found that lodging startups raised about $1.7 billion this year — thanks to Oyo alone bagging $1.5 billion, followed by logistics startups such as Elastic Run, Delhivery, and Ecom Express that secured $641 million.

176 horizontal marketplaces, more than 150 education learning apps, over 120 trucking marketplaces, 82 ride-hailing services, 42 insurance platforms, 33 used car listing providers, and 13 startups that are helping businesses and individuals access working capital secured funding this year.

The investors

Sequoia Capital, with more than 50 investments — or co-investments — was the most active venture capital fund for Indian tech startups this year. (Rajan Anandan, former executive in charge of Google’s business in India and Southeast Asia, joined Sequoia Capital India as a managing director in April.) Accel, Tiger Global Management, Blume Ventures, and Chiratae Ventures were the other top four VCs.

Steadview Capital, with nine investments in startups including ride-hailing service Ola, education app Unacademy, and fintech startup BharatPe, led the way among private equity funds. General Atlantic, which invested in NoBroker and recently turned profitable edtech startup Byju’s, invested in four startups. FMO, Sabre Partners India, and CDC Group each invested in three startups.

Venture Catalysts, with over 40 investments including in HomeCapital and Blowhorn, was the top accelerator or incubator in India this year. Y Combinator, with over 25 investments, Sequoia Capital’s Surge, Axilor Ventures, and Techstars were also very active this year.

Indian tech startups also attracted a number of direct investments from top corporates and banks this year. Goldman Sachs, which earlier this month invested in fintech startup ZestMoney, overall made eight investments this year. Among others, Facebook made its first investment in an Indian startup — social-commerce firm Meesho and Twitter led a $100 million financing round in local social networking app ShareChat.

Vinted, the second-hand clothes marketplace, raises $141M at a $1B+ valuation

The market for second-hand clothes — the “circular economy” as it’s sometimes called — has been on the rise in the last several years, fuelled by economic crunches, a desire to make more responsible and less wasteful fashion choices, and a wave of digital platforms that are bringing the selling and buying of used clothes outside the charity shop. Today, one of the bigger companies in Europe working in the third of these areas is announcing a huge round of funding to double down on the trend.

Vinted, a site where consumers can sell and buy second-hand fashion, has raised €128 million (around $140.9 million) in a round that is being led by Lightspeed Venture Partners, with previous backers Sprints Capital, Insight Venture Partners, Accel and Burda Principal Investments also participating.

With this investment, the startup — founded and headquartered out of Vilnius, Lithuania — has passed a valuation of $1 billion (it is not specifying an exact amount), making it one of the biggest startups to come out of the country (but not the Baltics’ first unicorn… Estonian Uber competitor Bolt, formerly known as Taxify, is also valued at over $1 billion.)

The company is going to use the money to continue expanding in Europe, and building out more features on its platform to improve the buying and selling process, while sticking to its goal of providing a platform for consumers to list and buy used fashion.

“We want to make sure we don’t have new products,” CEO Thomas Plantenga said in an interview earlier. “All our sellers are regular people.” Some 75% of Vinted’s customers have never bought or sold second hand clothes in their lives before coming to the platform, he added. “The stigma is no longer there.”

Vinted’s growth comes on the heels of a remarkable turnaround for the startup. Founded in 2008 by Milda Mitkute and Justas Janauskas as a way to help Mitkute clear out here wardrobe before a house move, the company expanded fast, but at a price: by 2016, it was close to running out of money and business had slowed down to a crawl. Investors brought in Plantenga to turn it around.

“We changed the business model in 2016 to make the costs as low as possible for users to list clothes,” Pantenga said today. “That produced a dramatic change in our growth trajectory.”

The company, more specifically, went through some drastic changes. First, it clawed back a lot of its pricey international expansion strategy (and along with that a lot of the costs associated with it); and second, it removed all listing fees to encourage more people to list. Now, Vinted charges a 5% commission only if you conduct transactions on Vinted itself, bundling in buyer protection and shipping to sweeten the deal. (You can still post, sell and buy for free if you pay offline but you don’t get those perks.)

The turnaround worked, and the company bounced back, and two years later, in 2018, it went on to raise €50 million. Today, Vinted has some 180 million products live on its platform, 25 million registered users in 12 markets in Europe (but not the US) and 300 employees. It expects to sell €1.3 billion in clothes in 2019, has seen sales grow 4x in the last 17 months.

From fast fashion to fashion that lasts

Vinted’s rise has matched a wider trend in the region.

Europe is the home to some of the world’s biggest “fast fashion” businesses: companies like H&M, Zara and Primark have built huge brands around making quick copies of the hottest styles off the fashion presses, and selling them for prices that will not break the bank (or at least, no more than you might have previously paid to buy a pair of average jeans on the discount rack of a Gap).

But it turns out that it’s also home to a very thriving market in second-hand clothes. One estimate has it that two out of every three Europeans has bought a second-hand good, and 6 out of 10 have sold their belongings using platforms dedicated to second-hand trade.

Even as the company continues to hold back on expanding into the US — perhaps burned a little too much by its previous efforts there; or simply aware of the wide competition from the likes of Ebay, OfferUp, Letgo, Poshmark, and many more — Vinted’s growth in Europe has caught the eye of investors in the that market.

“At Lightspeed, we look for outlier management teams building generational companies. We’ve been impressed by the team’s ability to build an incredible product and value proposition for their community, and adapt and expand their business along the way,” said Brad Twohig, a partner at Lightspeed. “Vinted is defining its market and has built a global brand in C2C commerce and communities. We’re proud to partner with Vinted and leverage our global platform and resources to help them continue to build on their success and achieve their goals.”

While charity shops have traditionally dominated this market, sites like eBay, followed by a secondary wave of platforms like Vinted and another competitor in this space, Depop, have made selling and buying items into an established, low-barrier business.

All the same, given that extending the life of one’s goods feeds into a do-good ethos, it’s noticeable to me that Vinted hasn’t quite replaced the Salvation Army: there is virtually no way to sell on Vinted and give the proceeds to charity, if you so choose.

It appears that this might be something Vinted will try to address in the future.

“We are looking at making fashion circular for our users so that clothing that they bought doesn’t go to waste,” Plantenga said. “[Giving proceeds to charity] is super interesting and we should explore it as part of our growth story. To be honest, those things have been in the background and not developed because we’ve just been trying to keep up with everything, but the idea fits into our culture.”

E-commerce — in particular startups nipping at the heels of bigger players like Amazon and eBay by focusing on specific areas of the market that aren’t as well served by them — has had a bumper day in Europe, after brick-and-mortar marketplace Trouva earlier today also raised a sizeable round.

Where VCs are looking for voice startup investments

Led by Amazon’s Alexa, smart speakers’ install base is expected to reach 200 million units worldwide by 2020. A quarter of Americans over the age of 12 own a smart speaker, and the majority of those users have more than one device in their home. Moreover, Apple could sell 50 million of its Airpods this year (generating $8 billion in sales) as Bluetooth earpieces explode in popularity.

For the market penetration of this hardware, the app ecosystem remains limited in terms of mainstream adoption. Podcast production and consumption has exploded, but they don’t take advantage of smart speakers and headphones as interactive devices. Even though there were 57,000 Alexa skills available at the end of last year, most people are using smart speakers mainly to check the weather, check the news, ask simple questions and play music.

If voice is a new operating system, where are the opportunities to build giant companies on top of it?

To get a better sense of how the smart money views this market, I asked five VCs who have spent the most time in this space to share which types of startups have captured their attention:

  • Matt Hartman, Partner at Betaworks Ventures
  • Nicole Quinn, Partner at Lightspeed Venture Partners
  • Paul Bernard, Director of the Alexa Fund at Amazon
  • Ann Miura-Ko, Partner at Floodgate
  • Jordan Cooper, Partner at Pace Capital

Here are their responses:

Matt Hartman, Partner at Betaworks Ventures

The most recent wave of audio was about constant connectivity and streaming, and we invested in Anchor, Gimlet, and other audio-first businesses that would thrive in the podcast renaissance. For the next wave of audio, we’re focused [on] three broad categories: personalization, new behaviors/new interfaces, and monetization. Personalization means both utilizing location, Apple Watch, and other data to create magical audio experiences and customized audio content, but also advances in generative content like Resemble.ai and Descript that can create custom audio. 

In terms of new behaviors/new interfaces, people are leaving their Airpods in longer, which means there may be an opportunity for “Airpod-first” product design. Finally, as audio becomes an industry, monetization will be improved and also re-thought: subscription products such as Shine and Headspace are interesting in the context that if they don’t really work as ad-supported podcasts, and they are packaged in such a way that people are willing to pay a monthly or annual subscription.

Nicole Quinn, Partner at Lightspeed Venture Partners

We are in between platforms and it’s not clear what the next platform will be. VR and AR are options, but I believe voice will be the next major platform with mass adoption. The biggest hurdle right now is discoverability which in turn leads to engagement and retention issues. This was the same for mobile before the App Store allowed us to discover new apps. We need the same for voice.

We will then see voice move from a music and list creation tool to one which quickly becomes part of popular culture around shopping, games, travel, meditation, etc. Leading audio apps such as Calm, the meditation and sleep app, are already set up to take advantage of the move to voice.

Paul Bernard, Director of the Alexa Fund at Amazon

Alexa got its start in the home, but we knew early on that bringing this experience to customers outside the home would become important. Our investments in companies like North (smart glasses), Vesper (power-efficient microphones) and Syntiant (power-efficient AI chip) were inspired by this vision, and reflect the idea that ambient computing is becoming part of daily life.

These companies are also helping create the surface area for interactive entertainment and information services, such as Drivetime’s trivia games (we are an investor there too), and social ones like TTYL, which enables friends wearing earbuds to maintain “audio-presence” with each other throughout their day while they multi-task. We also expect to see innovation in how voice can help seniors aging in place — our recent investment in Labrador Systems, which builds assistive robots, is a good example of this trend.

Lightspeed’s Jeremy Liew is on the hunt for always-on media startups

Perhaps best known for a career-making seed investment in Snapchat, Lightspeed partner Jeremy Liew is a leading investor across media and entertainment, making bets on startups like Cheddar, Giphy, HQ, SpecialGuest, Mic, Beme, Playdom, Duta and Flixster.

I spoke to him earlier this week about how he assesses the market for media startups, which led into a discussion about “always-on” forms of entertainment that add stimulation to a person’s environment, instead of commanding their full focus.

Here’s the transcript of our conversation, edited for length and clarity:

Eric Peckham: Do you have a consistent framework for evaluating potential investments?

Jeremy Liew: Our perspective is that consumer technology is now more about the consumer side than the technology side. It’s really more about pop culture than new innovations in technology. 

When we are assessing a consumer investment we ask ourselves, “does this have the potential to become part of pop culture?” One way to think about it is whether people who don’t use the product will still become familiar with what it is. Like how you can understand a reference to “Game of Thrones” even if you don’t watch it. 

Another key question is, whether there is a scalable, repeatable way for the product to reach its audience. That can be advertising, it can be word of mouth, it could be through social channels.

We also asked ourselves, “is this product going to build a new habit?” and we assess whether the entrepreneur has a unique insight into both why this is happening and why it’s happening now.

Your colleague Alex Taussig told me you have an overarching “future of TV” thesis that’s guided a number of your investments. Tell me about that thesis and how it filters opportunities in the media & entertainment space for you.

I think you can split what used to be called TV into two core use cases: “TV as entertainment” and “TV as company.”

“TV as entertainment” is most of what Netflix, Amazon, Apple, HBO, and similar companies have been focused on. It is high-production quality entertainment you have to pay attention to. Think shows like “Game of Thrones,” “Succession,” “Orange is the New Black.”

Then there’s another classic category of TV — “TV as company,” which is stuff that’s on while you’re doing something else. You’ve got the morning show on while you’re getting the kids ready for school or you’re getting ready to go to work. That’s how you get the five hours of TV viewing per day that Americans average.

TV as entertainment has to be so good that you choose to watch it over doing anything else; TV as company you just have to not choose to turn it off.

The vast amount of attention to the move to video — with subscription video on-demand (SVOD) and so forth — has been on TV as entertainment. There are hit shows that will attract people to Netflix, or to HBO Go, to Disney+. But what causes them to stay as a subscriber after they binge-watched all the way through the stuff that brought them in the first place?

That tends to be the TV as company content. If you actually look at hours watched in television, no one is tuning in to catch the latest episode of “Shark Week” — it is just what’s on. Think about the TV Guide grid: every genre, every channel will likely have a mobile native equivalent.

Some of these already exist. ESPN — it’s a channel where men watch the best competitors in the world play the sports they used to play when they were in high school and then they talk about it with their friends. Twitch is a place where men, mostly, watch the best competitors in the world play the games they used to play when they were younger and talk about it with their friends.

The future of cybersecurity VC investing with Lightspeed’s Arif Janmohamed

There are two types of enterprise startups: those that create value and those that protect value. Cybersecurity is most definitely part of the latter group, and as a vertical, it has sprawled the past few years as the scale of attacks on companies, organizations, and governments has continuously expanded.

That may be a constant threat for the executives of major companies, but for cybersecurity VCs who pick the right startup targets for investment, it’s a potential gold mine. Here at Extra Crunch, we compiled a list of top VCs who have invested in cybersecurity and enterprise more broadly and asked them what’s interesting in the space these days. We compiled ten of their responses as part of our investor survey and you should definitely take a look for their interesting takes on the space.

But we wanted to go a bit deeper on the topic to learn more about what’s happening right now in cybersecurity. So today, we talk with Arif Janmohamed of Lightspeed Venture Partners, one of the leading investors at one of the top enterprise VC firms in the world. He’s invested in companies ranging from cloud-access security broker Netskope and search analytics platform ThoughtSpot to Qubole (big data analytics), Nutanix (hyper-converged infrastructure), and Arceo.ai (cyber risk management).

Arif head color web

Arif Janmohamed. Image via Lightspeed Venture Partners

TechCrunch’s security guru Zack Whittaker, managing editor Danny Crichton and operations editor Arman Tabatabai sat down with him to discuss what he’s seeing at the earliest stages in cybersecurity, which trends are being ignored by the industry and what he sees as the future of security in an always-changing present.

Introduction and Background

The following interview has been condensed and edited for clarity.

Danny Crichton: Let’s start with a bit of your background.

Arif Janmohamed: Sure. I’m on the early-stage side, so I have the most fun when I’m working with founders at the very earliest stages of company formation, where I can focus on company design, product and go-to-market and then find the right balance of teams to fill that out.

I’m on the board of Netskope, which is a cloud-security company. That one I did the Series B back in 2013. I’m on the board of TripActions, which is a corporate travel company, I did that one and then led the Series A and the Series B. I’m on the board of Moveworks, which is an AI engine for IT that was seeded by me and then I’ve supported them through their subsequent financing. I’m also on the board of a number of other companies.

Am I purely security-focused? The answer is no, I’m very much enterprise-focused. Security in my mind really fits within that rubric of the enterprise stack that’s getting rebuilt for a cloud-first world.

What’s snake oil and what has real value?

Zack Whittaker: So I’ve got a question that I just want to jump right in with. I’m always curious about this, especially when it comes to the very early stage, how do you go about distinguishing between potential snake oil and the things that seem really viable in the security world?

MediaLab acquires messaging app Kik, expanding its app portfolio

Popular messaging app Kik is, indeed, “here to stay” following an acquisition by the Los Angeles-based multimedia holding company, MediaLab.

It echoes the same message from Kik’s chief executive Tim Livingston last week when he rebuffed earlier reports that the company would shut down amid an ongoing battle with the U.S. Securities and Exchange Commission. Livingston had tweeted that Kik had signed a letter-of-intent with a “great company,” but that it was “not a done deal.”

Now we know the the company: MediaLab. In a post on Kik’s blog on Friday the MediaLab said that it has “finalized an agreement” to acquire Kik Messenger.

Kik is one of those amazing places that brings us back to those early aspirations,” the blog post read. “Whether it be a passion for an obscure manga or your favorite football team, Kik has shown an incredible ability to provide a platform for new friendships to be forged through your mobile phone.”

MediaLab is a holding company that owns several other mobile properties, including anonymous social network Whisper and mixtape app DatPiff. In acquiring Kik, the holding company is expanding its mobile app portfolio.

MediaLab said it has “some ideas” for developing Kik going forwards, including making the app faster and reducing the amount of unwanted messages and spam bots. The company said it will introduce ads “over the coming weeks” in order to “cover our expenses” of running the platform.

Buying the Kik messaging platform adds another social media weapon to the arsenal for MediaLab and its chief executive, Michael Heyward .

Heyward was an early star of the budding Los Angeles startup community with the launch of the anonymous messaging service, Whisper nearly 8 years ago. At the time, the company was one of a clutch of anonymous apps — including Secret and YikYak — that raised tens of millions of dollars to offer online iterations of the confessional journal, the burn book, and the bathroom wall (respectively).

In 2017, TechCrunch reported that Whisper underwent significant layoffs to stave off collapse and put the company on a path to profitability.

At the time Whisper had roughly 20 million monthly active users across its app and website, which the company was looking to monetize through programmatic advertising, rather than brand-sponsored campaigns that had provided some of the company’s revenue in the past. Through widgets, the company had an additional 10 million viewers of its content per-month using various widgets and a reach of around 250 million through Facebook and other social networks on which it published posts.

People familiar with the company said at the time that it was seeing gross revenues of roughly $1 million and was going to hit $12.5 million in revenue for that calendar year. By 2018 that revenue was expected to top $30 million, according to sources at the time.

The flagship Whisper app let people post short bits of anonymous text and images that other folks could like or comment about. Heyward intended it to be a way for people to share more personal and intimate details —  to be a social network for confessions and support rather than harassment.

The idea caught on with investors and Whisper managed to raise $61 million from investors including Sequoia, Lightspeed Venture Partners, and Shasta Ventures . Whisper’s last round was a $36 million Series C back in 2014.

Fast forward to 2018 when Secret had been shut down for three years while YikYak also went bust — selling off its engineering team to Square for around $1 million. Whisper, meanwhile, seemingly set up MediaLab as a holding company for its app and additional assets that Heyward would look to roll up. The company filed registration documents in California in June 2018.

According to the filings, Susan Stone, a partner with the investment firm Sierra Wasatch Capital, is listed as a director for the company.

Heyward did not respond to a request for comment.

Zack Whittaker contributed reporting for this article. 

Shoe companies Rothy’s and Steve Madden are at each other’s throats

In August, after receiving a cease-and-desist letter from the venture-backed shoe startup Rothy’s, shoe giant Steven Madden filed a pre-emptive lawsuit asking a federal court to rule that its Rosy Flat shoes don’t copy design elements of the Point ballet flat that Rothy’s began selling soon after its 2015 launch.

More, it asked that seven related patents that Rothy’s has been issued — and that Rothy’s has accused Madden of infringing — be declared invalid.

Now, Rothy’s is batting back again, today filing counterclaims of design patent and trade dress infringement, trademark dilution and unfair competition, while also managing to get in a sick burn, writing in its filing that instead of “pursuing independent product development, Madden has chosen to slavishly copy Rothy’s product design in violation of Rothy’s valuable intellectual property rights.”

It’s hard to argue they aren’t copycats once you see both shoes. Nearly as galling to Rothy’s, Steve Madden’s shoes retail for half the price. (Rothy’s charges $145 for its shoes. Steve Madden sells its version for $70, and, unlike Rothy’s, which are never discounted, Steve Madden’s version of the shoe is currently on sale at Nordstrom Rack for $39.99.)

Steve Madden — now a 29-year-old company that’s publicly traded, valued by investors at $3 billion and largely still run by Steve Madden himself (he’s its creative and design chief) — is known for finding inspiration in the work of other brands that wish it would not. Among a handful of companies to tangle legally with the shoe titan in recent years is venture-backed Allbirds, which accused Steve Madden of copying its wool trainer in 2017.

AllBirds soon settled its lawsuit with the company. Alas, now AllBirds is reportedly fighting an Austrian footwear company, Giesswein Walkwaren, for making and selling sneakers that are “identical in all material respects” to Allbirds’s wool runners.

Meanwhile, Rothy’s just last month settled with a company, OESH, against which it had separately filed a patent and trade dress infringement lawsuit alleging its round-toe ballet flats are too similar to Rothy’s own.

Neither is an uncommon situation. Instead, both underscore that for young retail brands, fending off competitors both big and small can prove both expensive and distracting. Indeed, the question begged is whether it’s worth engaging.

While that’s something that’s often determined in hindsight, not everyone thinks it makes sense to spend the time and resources battling knock-offs. When we talked earlier this year with the venture-backed slipper-shoe startup Birdies, co-founder Bianca Gates noted that Target had already begun offering a similar slipper at a cheaper price point. “Everybody copies everybody,” she said.

The company could use some of its funding to wage war, but she thought focusing on the company’s product made more sense. “It’s our job to create a brand beyond the silhouette of a slipper, because that can be knocked off, it’s not defensible. What is defensible is why [a customer] is buying Birdies, and why she is telling her friends to shop us.”

Tutoring business-in-a-box service Clark has been acquired by edtech startup Noodle

Clark, the tutor management business-in-a-box service, has been acquired by the New York-based education startup Noodle for an undisclosed amount, TechCrunch has learned.

Founded by John Katzman, the serial entrepreneur behind education technology giants including The Princeton Review and 2U, Noodle offers education search services to help people apply to the right programs that meet their needs.

Megan O’Connor, the co-founder and chief executive of Clark, actually met Katzman two weeks after she launched the company, which is backed by investors including Lightspeed Venture Partners, Winklevoss Capital, Rethink Education, Flat World Partners and Human Ventures (where O’Connor worked as the chief growth officer).

It’s not a stretch to call Katzman the godfather of tutoring, and, from the beginning, the seasoned executive took an interest in what Clark was doing, according to O’Connor.

With the acquisition, Clark’s shareholders will receive an equity stake in Noodle and O’Connor and her co-founder, Sam Gimbel, will take roles within Noodle to build out a tutoring service within the company, O’Connor says.

Going forward, Gimbel and O’Connor will build up the tutoring component of Noodle’s business as a complement to the company’s higher education and elementary and secondary school divisions.

One of the core components of the new tutoring platform within Noodle will be a focus on the individualization and personalization of tutoring sessions, buoyed by a community of tutors who share information on the most effective teaching strategies for different kinds of students.

What the tutoring practice won’t do, O’Connor says, is teach to a standardized curriculum. “If we can give them the software of shared services, then they can be more hands-on with the student,” O’Connor says.

Startups Weekly: Part & Parcel plans plus-sized fashion empire

Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about Stripe’s grand plans. Before that, I noted Peloton’s secret weapons

Remember, you can send me tips, suggestions and feedback to [email protected] or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

Startup spotlight

The best companies are built by people who have personally experienced the problem they’re attempting to solve. Lauren Jonas, the founder and chief executive officer of Part & Parcel, is intimately familiar with the struggles faced by the women she’s building for.

San Francisco-based Part & Parcel is a plus-sized clothing and shoe startup providing dimensional sizing to women across the U.S. The company operates a bit differently than your standard direct-to-consumer business by seeking to include the women who wear and evangelize the Part & Parcel designs by giving them a cut of their sales.

Here’s how it works: Ambassadors sign up to receive signature styles from Part & Parcel, which they then share and sell to women in their network. Ultimately, the sellers are eligible to receive up to 30% of the profit per sale. The out-of-the-box model, which might remind you somewhat of Mary Kay or Tupperware’s business strategy, is meant to encourage a sense of community and usher in a new era in which plus-sized women can facilitate other plus-sized women’s access to great clothes. 

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“I bought a brown men’s polyester suit and wore it to an interview,” Jonas, an early employee at Poshmark and the long-time author of the popular blog, ‘The Pear Shape,’ tells TechCrunch. “I was that kid wearing a men’s suit.”

Clothing tailored to plus-sized women has long been missing from the retail market. Increasingly, however, new brands are building thriving businesses by catering precisely to the historically forgotten demographic. Dia&Co., for example, raised another $70 million in venture capital funding last fall from Sequoia and USV. And Walmart recently acquired another brand in the space, ELOQUII, for an undisclosed amount. Part & Parcel, for its part, has raised $4 million in seed funding in a round led by Lightspeed Venture Partners’ Jeremy Liew.

The startup launched earlier this year in Anchorage, “a clothing desert,” and has since grown its network to include women in several other underserved markets. Given her own history struggling to find a fitted woman’s suit, Jonas launched her line with structured pieces, including suits and blouses — though the startup’s biggest success yet, she says, has been its boots, which come in three different calf width options.

“Seventy percent of women in this country are plus-sized,” Jonas said. “I’m bringing plus out of the dark corner of the department store.”

This week in VC

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Image: Bryce Durbin / TechCrunch

Must read

TechCrunch’s Megan Rose Dickey published a highly anticipated deep dive on the state of sex tech this week. The piece provides new data on funding in sex tech and wellness companies, analysis on sex tech startup’s battle for public advertising and responses from industry leaders on how we can destigmatize sex with technology. Here’s a short passage from the story:

Cindy Gallop sees a market opportunity in every type of business obstacle she encounters. That’s why All The Sky will also seek to invest in startups that tackle the infrastructural tools needed to fuel sextech, like payments, hosting providers and e-commerce sites.

“I want to fund the sextech ecosystem to maintain and sustain a portfolio for All the Skies, to create a bloody huge sextech ecosystem and three, to monopolistically build out the ecosystem to be a multi-trillion-dollar market,” Gallop says.

On my radar

I swung by Contrary Capital‘s Demo Day this week, in which a number of startups gave a 4- to 5-minute pitch. Next on my list is Alchemist‘s Demo Day in Menlo Park. The accelerator welcomes enterprise startups for a six-month program focused on early customer adoption, company development and mentorship.

Also on my radar is Females To The Front. The event began this week in Palm Springs and if I were based in SoCal, I would have swung by. Led by Amy Margolis, the event is said to be the largest gathering of female cannabis founders and funders to date. Here’s how the group describes the event: “Females to the Front Retreat will mix immersive and hands-on workshops, pitch training, investment deck preparation and business skill set education with investor meetings and plenty of shared meals, pool time, yoga, connections, rest and rejuvenation. Every workshop is built to directly engage attendees instead of powerpoint and panels. Be prepared to return home inspired, engaged and with so many more tools in your toolbox.”

For the record, I don’t advertise events in my newsletter just wanted to give props to this one because it’s a great development for the cannabis tech ecosystem.

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Time to Disrupt

We are just weeks away from our flagship conference, TechCrunch Disrupt San Francisco. We have dozens of amazing speakers lined up. In addition to taking in the great line-up of speakers, ticket holders can roam around Startup Alley to catch the more than 1,000 companies showcasing their products and technologies. And, of course, you’ll get the opportunity to watch the Startup Battlefield competition live. Past competitors include Dropbox, Cloudflare and Mint… You never know which future unicorn will compete next.

You can take a look at the full agenda here. And if you still need convincing, here’s five reasons to attend this year’s conference from our COO himself.

And finally… #EquityPod

This week, the lovely Alex Wilhelm, editor-in-chief of Crunchbase News, and I gathered to discuss a number of topics including WeWork’s IPO and Uber’s attempts to bypass a new law meant to protect gig workers. Listen here.