SpotOn raises $300M at a $3.15B valuation and acquires Appetize

Last year at this time, SpotOn was on the brink of announcing a $60 million Series C funding round at a $625 million valuation.

Fast-forward to almost exactly one year later and a lot has changed for the payments and software startup.

Today, SpotOn said it has closed on $300 million in Series E financing that values the company at $3.15 billion — more than 5x of its valuation at the time of its Series C round, and significantly higher than its $1.875 billion valuation in May (yes, just three and a half months ago) when it raised $125 million in a Series D funding event.

Andreessen Horowitz (a16z) led both the Series D and E rounds for the company, which says it has seen 100% growth year over year and a tripling in revenue over the past 18 months. Existing investors DST Global, 01 Advisors, Dragoneer Investment Group, Franklin Templeton and Mubadala Investment Company too doubled down on their investments in SpotOn, joining new backers Wellington Management and Coatue Management. Advisors Douglas Merritt, CEO of Splunk, and Mike Scarpelli, CFO of Snowflake, also made individual investments as angels. With the new capital, SpotOn has raised $628 million since its inception.

The latest investment is being used to finance the acquisition of another company in the space — Appetize, a digital and mobile commerce payments platform for enterprises such as sports and entertainment venues, theme parks and zoos. SpotOn is paying $415 million in cash and stock for the Los Angeles-based company.

Since its 2017 inception, SpotOn has been focused on providing software and payments technology to SMBs with an emphasis on restaurants and retail businesses. The acquisition of Appetize extends SpotOn’s reach to the enterprise space in a major way. Appetize will go to market as SpotOn and will work to grow its client base, which already includes an impressive list of companies and organizations, including Live Nation, LSU, Dodger Stadium and Urban Air. 

In fact, Appetize currently covers 65% of all major league sports stadiums, specializing in contactless payments, mobile ordering and menu management. So for example, when you’re ordering food at a game or concert, Appetize’s technology makes it easier to pay in a variety of contactless ways through point of sale (POS) devices, self-service kiosks, handheld devices, online ordering, mobile web and API integrations.

Image Credits: SpotOn

SpotOn is taking on the likes of Square in the payments space. But the company says its offering extends beyond traditional payment processing and point-of-sale software. Its platform aims to give SMBs the ability to run their businesses “from building a brand to taking payments and everything in between.” SpotOn’s goal is to be a “one-stop shop” by incorporating tools that include things such as custom website development, scheduling software, marketing, appointment scheduling, review management, analytics and digital loyalty.

The combined company will have 1,600 employees — 1,300 from SpotOn and 300 from Appetize. SpotOn will now have over 500 employees on its product and technology team, according to co-founder and co-CEO Zach Hyman. It will also have clients in the tens of thousands, a number that SpotOn says is growing by “thousands more every month.”

The acquisition is not the first for SpotOn, which also acquired SeatNinja last year and Emagine in 2018.

But in Appetize it saw a company that was complementary both in its go-to-market and tech stacks, and a “natural fit.”

“SMEs are going to benefit from the scalable tech that can grow with them, including things like kiosks and offline modes, and for the enterprise clients of Appetize, they’re going to be able to leverage products like sophisticated loyalty programs and extended marketing capabilities,” Hyman told TechCrunch. 

SpotOn was not necessarily planning to raise another round so soon, Hyman added, but the opportunity came up to acquire Appetize.

“We spent a lot of time together, and it was too compelling to pass up,” he told TechCrunch.

For its part, Appetize — which has raised over $77 million over its lifetime, according to Crunchbase — too saw the combination as a logical one.

“It was important to us to retain a stake in the business. We were not looking to cash out,” said Appetize CEO Max Roper. “We are deeply invested in growing the business together. It’s a big win for our team and our clients over the long term. This is a rocketship that we are excited to be on.” 

No doubt that the COVID-19 pandemic only emphasized the need for more digital offerings from small businesses to enterprises alike.

“There has been a high demand for our services and now as businesses are faced with a Covid resurgence, no one is closing down,” Hyman said. “So they see a responsibility to install the necessary technology to properly run their business.”

One of the moves SpotOn has made, for example, is launching a vaccination alert system in its reservation management software platform to make it easier for consumers to confirm they are vaccinated for cities and states that have those requirements.

Clearly, a16z General Partner David George too was bullish on the idea of a combined company.

He told TechCrunch that the two companies fit together “extremely nicely.”

“It felt like a no-brainer for us to want to lead the round, and continue to support them,” George said.

Since first investing in SpotOn in May, the startup’s growth has “exceeded” a16z’s expectations, he added.

“When companies are growing as fast as it is organically, they don’t need to rely on acquisitions to fuel growth,” he said. “But the strategic rationale here is so strong, that the acquisition will only turbocharge what is already high growth.”

While the Series E capital is primarily funding the acquisition, SpotOn continues to double down on its product and technology.

“This is our time to shine and invest in the future with forward-thinking technology,” Hyman told TechCrunch. “We’re thinking about things like how are consumers going to be ordering their beer at a Dodgers game in three years? Are they going to be standing in line for 25 minutes or are they going to be interacting and buying merchandise in other unique ways? Those are the things we’re looking to solve for.”

Match beta test targets dating app complaints like frustration with swiping, ghosting

Match today is introducing new features that aim to address some of users’ complaints with modern-day dating apps — like how much time it takes to find a relevant match and how frustrating it is when users ghost one another after the initial conversation fades. As part of a new strategy to better position Match for more “emotionally mature” singles (read: adults), the company says it will begin beta testing a recommendation system called “Matched by Us,” which may pave the way for a broader matchmaking service in the future. It’s also testing an anti-ghosting feature which pushes users to either continue a conversation or unmatch the recipient, instead of leaving them hanging.

The features are designed to address the challenges that face Match’s older demographic. Match users tend to be in their 30’s and up, and have full lives. They’re generally ready to find relationships and settle down with a partner. That’s a different life phase than those using other Match dating apps, like Tinder, where younger users are still in a more exploratory phase and enjoy on going on many dates, including casual dates.

“When we talk to our members, we hear a lot of frustration around [there being] a lot of swiping, a lot of messaging back and forth — that’s happening in the dating world more broadly,” explains Dushyant Saraph, Match’s Chief Product Officer. “When we think about folks on our product, who don’t have a ton of time, that’s where ‘Matched by Us’ came from. Our singles don’t want to swipe through hundreds of profiles,” he says.

Image Credits: Match

The new feature, which is made available to free and paid users alike, will present one, free customized match every week, where both users can see each other and no longer have to wait for a “like” back in order to engage in a conversation.

The system works to find compatible matches by algorithmically examining a new set of preferences around users’ personalities, based on responses to questions posed in users’ Match bios.

For example, questions may ask about users’ five-year plans, their favorite weekend activities, or whether they’re open to moving somewhere new if they find the right person. The latter has become especially relevant in the new age of remote work, driven by the pandemic, which no longer requires people to live in the bigger cities where their company may be headquartered, Saraph notes.

Image Credits: Match

Currently, the system will recommend a match based on a holistic view of users’ preferences, as determined by an algorithm, but the company has been internally testing adding a layer of human curation to its suggestions, as well.

In other words, Match is testing an actual match-making service.

For the time being, however, the human curation team inside Match is working in more of an R&D capacity, Saraph says.

“We’ve been flexing how many experts we need as we’re testing kind of different concepts — everything from coaching to expert picks, where we’re doing human curation,” he says. The team also works on other features, like suggesting conversation starters to keep conversations going.

“Long-term we expect to be flexible, depending on which of these [products] is most interesting to our members, and scaling up our expert team accordingly. Right now, human curation is one area that we’re really excited about and want to crack, and I think you’ll hear more about that in the coming months,” Saraph adds.

Another new feature aimed at helping adults to stop waste their time on dating apps involves how Match will handle matches’ conversations. Typically, conversations either take off leading to real-world dates, or slowly fade away, until communication stops altogether. Sometimes, the other party simply “ghosts,” and never responds at all.

Image Credits: Match

Users told Match that their main issue with ghosting is the uncertainty around what it means.

Did the user just get busy, or did they decide they weren’t interested?, users wonder.

A new feature aims to keep conversations’ momentum going by nudging users when a conversation is about to “expire” — that is, when it will be archived into a new section of the inbox for inactive conversations.

And if you are in the app, you can visit the conversation to get suggestions of conversation starters to help you pick things back up, or you can tap a button to unmatch the other user. The latter would send a more explicit signal to the recipient that there was a lack of interest, though it won’t actually push a notification that tells the user they’ve been unmatched. (That can sometimes lead to safety issues, particularly for women who have received threats from men they’ve rejected.)

Image Credits: Match

Match says it’s currently testing the right number of days to elapse before it nudges users to either re-engage or end their conversations with an unmatch. But the right amount of time seems to be in the three to five-day range, Saraph says.

The new features are rolling out to some portion of Match’s U.S. user base in beta, as the company kicks off a new brand campaign targeting adult daters. The campaign’s message is that Match understands what modern adult singles are looking for in order to date better, and these features are an example of that understanding being put into practice.

The beta tests are rolling out across all Match platforms, including iOS, Android, mobile web and desktop over the next few months, starting in the U.S.

The news follows a mixed earnings report from the dating app giant, Match Group, which owns top brands including Match, Tinder, OKCupid, Plenty of Fish, Hinge, and others. The company saw the impact of a pandemic recovery in the second quarter, with 15 million paying customers across its brands, up from 13 million in the year-ago quarter. Revenue was $707.8 million, topping analyst projections of $694 million. But Match Group missed on earnings, with net income of $140.9 million, or 46 cents a share, when analysts expected 49 cents per share.

The company also spoke in detail about its plans for social networking app maker Hyperconnect, a company Match bought for $1.73 billion earlier this year. Match Group said it plans to add audio and video chat, including live video, to its dating brand portfolio.

Match’s dating app is among those that will benefit from Hyperconnect integrations, Saraph told TechCrunch, as Match plans to explore “building out live experiences.” The company expects these to be added around year end towards the beginning of 2022, we’re told.

Web traffic increases in 2019 were driven by mobile; top 100 sites saw average of 223B monthly visits

Mobile adoption around the world is having a significant impact on the web’s traffic. According to a new report from SimilarWeb, out today, mobile web traffic has jumped 30.6% since 2017, while desktop traffic dropped 3.3%. But it’s not just the numbers that are changing. Mobile visitors also behave differently from their desktop web counterparts, staying on pages for shorter periods of time, for example, which is impacting core metrics web publishers today track.

The report found that 2019’s total web traffic to the top 100 sites was up 8% from 2018, and up 11.8% over 2017, averaging 223 billion visits per month. The largest increases were in April and June 2019, when traffic was up by more than 10% over the same time in 2018.

 

Mobile is driving these traffic increases, but mobile visitors don’t stay as long on the site. Across platforms, the overall time spent on websites has dropped by 49 seconds from 2017 to 2019, the report found.

In addition, mobile has become the platform of choice for visiting certain categories of websites. Mobile traffic dwarfs desktop on adult sites, gambling sites, food & drink, pets & animals, health, community & society, sports, and lifestyle. And over the years, other categories shifted to become more mobile as well — including news and media, vehicle sites, travel, reference, finance, and others.

But not all categories are doing well, despite the shift to mobile.

News sites, for instance, were losing traffic. The report found that traffic to the top 100 media publications is down 5.3% year-over-year from 2018 to 2019 (a loss of 4B visits), and down by 7% since 2017.

These decreases impact all sorts of media categories, with popular news, entertainment news, and local news all showing decreases of over 25%. Only business & finance and women’s interest news categories saw any increases, the report said.

The increase in mobile traffic is also helping the biggest sites on the web grow larger, helping to further cement their position on today’s internet. The top 10 biggest sites saw a total of 167.5 billion monthly visits in 2019, up 10.7% over 2018. The remaining 90 biggest sites out of the top 100 only saw a 2.3% increase, by comparison.

Google’s move to consolidate traffic to its core domain increased traffic to google.com helped to increase its numbers and YouTube grew as well. However, Facebook’s troubles were reflected in its numbers as it lost 8.6% of traffic over the past year alone. The report theorized that some of its lost traffic went to YouTube, which could inform Facebook’s heavier focus on video in recent years. That said, Facebook’s investments in mobile helped it grow elsewhere — both Instagram and WhatsApp saw their web traffic grow up to 74% year-over-year.

Also on the decline were Yahoo, which lost 33.6% of its 2017 traffic, and Tumblr, which banned adult sites in 2018, leading to a 33% loss in traffic.

Facebook fought off the web traffic declines and related declines in app usage by re-engaging existing users in 2019, which helped it to increase the total number of app sessions throughout the year. YouTube uses a similar tactic to increase its own app engagement figures, leading to a close tie between the two on this metric.

The data for the report was gathered from January 2017 to December 2019, and tracked desktop and mobile web traffic, as well as Android app use.

The full report, available here, also dug into specific categories, like shopping, travel, finance, messaging, and more.

 

Google starts rolling out better AMP URLs

Publishers don’t always love Google’s AMP pages, but readers surely appreciate their speed, and while publishers are loath to give Google more power, virtually every major site now supports this format. One AMP quirk that publisher’s definitely never liked is about to go away, though. Starting today, when you use Google Search and click on an AMP link, the browser will display the publisher’s real URLs instead of an “http//google.com/amp” link.

This move has been in the making for well over a year. Last January, the company announced that it was embarking on a multi-month effort to load AMP pages from the Google AMP cache without displaying the Google URL.

At the core of this effort was the new Web Packaging standard, which uses signed exchanges with digital signatures to let the browser trust a document as if it belongs to a publisher’s origin. By default, a browser should reject scripts in a web page that try to access data that doesn’t come from the same origin. Publishers will have to do a bit of extra work, and publish both signed and un-signed versions of their stories.

 

Quite a few publishers already do this, given that Google started alerting publishers of this change in November 2018. For now, though, only Chrome supports the core features behind this service, but other browsers will likely add support soon, too.

For publishers, this is a pretty big deal, given that their domain name is a core part of their brand identity. Using their own URL also makes it easier to get analytics, and the standard grey bar that sits on top of AMP pages and shows the site you are on now isn’t necessary anymore because the name will be in the URL bar.

To launch this new feature, Google also partnered with Cloudflare, which launched its AMP Real URL feature today. It’ll take a bit before it will roll out to all users, who can then enable it with a single click. With this, the company will automatically sign every AMP page it sends to the Google AMP cache. For the time being, that makes Cloudflare the only CDN that supports this feature, though others will surely follow.

“AMP has been a great solution to improve the performance of the internet and we were eager to work with the AMP Project to help eliminate one of AMP’s biggest issues — that it wasn’t served from a publisher’s perspective,” said Matthew Prince, co-founder and CEO of Cloudflare. “As the only provider currently enabling this new solution, our global scale will allow publishers everywhere to benefit from a faster and more brand-aware mobile experience for their content.”

 

Google launches a new certification program for mobile web developers

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Google launches new certification program for mobile site developers

 Google is launching a new certification program for mobile site developers today. The exam covers everything from the basics of why mobile sites matter to how to improve mobile site speed, effective mobile UX design and more advanced topics like progressive web apps. As Google notes, passing the exam is meant to show that you have “a demonstrated ability to build and optimize… Read More

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Why Pinterest forces you off its mobile site and into its app

Pinterest’s product lead for growth Casey Winters speaks at VentureBeat's Mobile Summit (2016).

Ever had services like Yelp and Pinterest mercilessly boot you off their mobile site and force you to download a native app whether you want it or not?

Pinterest’s product lead for growth, Casey Winters, can tell you why that happens because he’s “the asshole that makes Pinterest do that,” as Winters himself put it at VentureBeat’s Mobile Summit conference.

Winters’ argument is pretty simple: After an A-B test, “you can basically see where you get more engaged users and more revenue over time.” Defying the logic of some incredibly frustrated users, Winters found that aggressively promoting Pinterest’s native app and limiting the mobile site’s functionality for some users ultimately left the social network with more loyal users and thus, more money.

Here’s the explanation Winters shared at the event, trimmed just a bit for clarity:

So, I want to talk to you guys about the mobile equation — or, the mobile Web to app handoff and tradeoff. So, Mike [Ghaffary, Eat24’s CEO] talked about knowing that customers of his company are 10x more valuable than they are on the Web. How do they know that? They know that because of their mobile equation.

But before I get into that, I want to ask a question: How many of you have gone to a mobile website only to get a full-page ad that says to download an app instead? [hands raise] How many times did that piss you off? Okay, well I’m the asshole that makes Pinterest do that. The reason I can do that is because I know the answer to our mobile equation.

What the mobile equation asks is simply: What’s going to make me more money, or make my company have more engaged users? Pushing someone to use the mobile Web experience I created, or to go further and try to get them to download that app?

And, there’s a really easy way to do that: You just do an A-B test. Some people come to your mobile website, you tell them to download the mobile app, and you don’t allow the mobile Web. And for some people, you just go through the mobile Web experience. And you cohort those users, you can basically see where you get more engaged users and more revenue over time. So we did that experiment at Pinterest. And what we found is similar to Yelp, that, even though we had way less users download the app than go through the mobile Web experience, they had activated at a 3x higher rate.

So, that’s a pretty easy experiment, right? But there’s a lot of complicating factors here. It depends on how good your current mobile Web experience is. It depends on how good your current mobile app is. It also depends on how good your sign up flow on your mobile app is. And lastly, it depends on how good your actual app interstitial is. We did this mobile equation and said: “Okay, well we activated at 3x the rate, but what that actually means when you get that decreased conversion is that a mobile app user is worth 1.2, versus a mobile Web user who is worth 1. So, once we learned this, we said “how can we make that equation bigger for us?”

So we took every step of that funnel and we just tried to improve it. So we did probably 15 iterations on a mobile app interstitial, increasing the conversion rate to the mobile app every time, almost. We also took a look at how could we optimize our mobile sign up flow. If people are landing from something specific on mobile Web — like they’re coming from SEO — can we show them that level of specificity as soon as we show them the app instead of going through a generic sign up form? All of these things increased mobile app conversion, which increased our mobile equation, tilting toward the mobile app.

If some of you are dependent on Google as a source of traffic, you’ll probably be aware that they’ve announced that if you have a mobile app interstitial, you’ll no longer be considered “mobile-friendly.” And what that means is long-term they will probably rank you lower on mobile. So, what we were able to find is that we could just make our interstitial a header which you could scroll right past, and see the content, and that fits within Google’s guidelines. It’s maybe skirting around it, but it fits within their guidelines today… The next thing we did is maybe going a little bit further is, if you click on anything on the mobile website, we will actually take you to Google Play or the App Store to get that download. And, that also gives us more information about what you care about when you open that mobile app for the first time.

…When you look at the process of downloading an app, it takes time. People go and do other things. So what we did, once we took you to the App Store or Google Play, is we reloaded your browser with a reminder that you went to go download the app. So it says, “Thank you for checking out the Pinterest app, click here to sign in.” That also increased the benefits of the mobile app for us.

Another thing that you need to think about, if you’re looking at your mobile equation, is it might be different in different landing pages. It might be different in different countries. We find that in Germany, the mobile equation is totally different…

You can answer the question right now if it’s better to optimize for a mobile app experience or a mobile Web experience. You don’t have to take it as strategic — you don’t have to take it on faith that this is where the company is going. So, a couple of things to remind yourself … learn your mobile equation, do that experiment, figure out every step of that flow, and see if you can optimize it to improve it…


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