Sequoia reveals first cohort for its ‘Surge’ accelerator program in India and Southeast Asia

Back in January, Sequoia India announced plans for its first early-stage startup accelerator program in India and Southeast Asia, and today the firm announced its first cohort of 17 startups.

To recap, the program — which is called Surge — gives each startup a $1.5 million check and participation in a four-month program that’s split across India and Singapore, as well as the wider Sequoia global presence in China and San Francisco.

The program kicked off last month, but the startups were only unveiled for the first time today — here they are:

  • Azani Sports: a ‘full stack’ sports clothing startup based in India that sells online and through selected high street retails
  • Bobobox: a capsule hotel company based in Indonesia
  • Bulbul: a live-streaming service with a focus on e-commerce across India
  • DancingMind: a Singapore startup that uses VR to enable remote for stroke victims and patients of debilitating diseases like Parkinson’s
  • Doubtnut: an India-based education startup that uses photos, videos and AI
  • Flynote: a travel booking service with a focus on personalized trips
  • Hippo Video: a platform developing, editing and analyzing marketing and sales videos
  • InterviewBit Academy: a computer science training and development platform in India — that’s not unlike recent Y Combinator graduate Skill-Lync
  • Khatabook: an accounting service for SMEs in India that already claims 120,000 weekly users
  • Qoala: a micro-insurance startup based in Indonesia, which competes with rivals like PasarPolis — which is backed by three of Indonesia’s unicorns
  • ShopUp: a social commerce startup that helps sellers in Bangladesh do business through Facebook — that’s a similar concept to established Indian startups Meesho (another YC alum) and LimeRoad which enable sellers on WhatsApp
  • Skillmatics: a startup headquartered in India that develops learning games for pre-school and primary school kids aged under 10
  • Telio: a b2b commerce platform that aims to digitize the process of brands and wholesalers selling to retailers
  • Uiza: a Singapore-Vietnam startup that lets publishers and companies develop their own video infrastructure independent of platforms like YouTube
  • Vybes: an e-commerce platform for social media influencers that’s based out of Singapore
  • Zenyum: a startup that provides invisible braces for consumers in Southeast Asia at a lower cost than traditional alternatives

There’s one additional startup which is being kept ‘under the radar’ for now, Sequoia said.

Sequoia India managing director Shailendra Singh previously told TechCrunch that Surge would support a ‘curated’ selections of fellow VCs who could invest alongside in the cohort alongside the firm, and Sequoia said that the 17 startups have attracted a total of $36 million in investment. A spokesperson also pointed out that five of the selection have at least one female co-founders, which is almost certainly above average for the region although it is tricky to get reliable data covering India and (in particular) Southeast Asia.

Surge is an interesting effort for Sequoia, which has traditionally played in post-seed and growth stages of the investment cycle. Sequoia closed its most recent fund for India and Southeast Asia at $695 million last year, and it also has access to a globally active ‘growth’ fund that is targeted at $8 billion. Reports have suggested that Surge will get its own sparkling new $200 million fund, which would make a lot of sense given the potential conflict and confusion of investing via its main fund. But the firm is declining to comment on that possibility for now.

One major addition to the program that has been confirmed, however, is Rajan Anandan, the executive who previously ran Google’s business in India and Southeast Asia and is a well-known angel investor. His arrival was announced earlier this month and he will lead the Surge initiative.

His recruitment is a major win for Sequoia, which is betting that Surge’s early stage push will reap it richer dividends in India and Southeast Asia. That part remains to be seen, but certainly, there is a dearth of early-stage programs in both regions compared to other parts of the world.

Index Ventures, Stripe back bookkeeping service Pilot with $40M

Five years after Dropbox acquired their startup Zulip, Waseem Daher, Jeff Arnold and Jessica McKellar have gained traction for their third business together: Pilot.

Pilot helps startups and small businesses manage their back office. Chief executive officer Daher admits it may seem a little boring, but the market opportunity is undeniably huge. To tackle the market, Pilot is today announcing a $40 million Series B led by Index Ventures with participation from Stripe, the online payment processing system.

The round values Pilot, which has raised about $60 million to date, at $355 million.

“It’s a massive industry that has sucked in the past,” Daher told TechCrunch. “People want a really high-quality solution to the bookkeeping problem. The market really wants this to exist and we’ve assembled a world-class team that’s capable of knocking this out of the park.”

San Francisco-based Pilot launched in 2017, more than a decade after the three founders met in MIT’s student computing group. It’s not surprising they’ve garnered attention from venture capitalists, given that their first two companies resulted in notable acquisitions.

Pilot has taken on a massively overlooked but strategic segment — bookkeeping,” Index’s Mark Goldberg told TechCrunch via email. “While dry on the surface, the opportunity is enormous given that an estimated $60 billion is spent on bookkeeping and accounting in the U.S. alone. It’s a service industry that can finally be automated with technology and this is the perfect team to take this on — third-time founders with a perfect combo of financial acumen and engineering.”

The trio of founders’ first project, Linux upgrade software called Ksplice, sold to Oracle in 2011. Their next business, Zulip, exited to Dropbox before it even had the chance to publicly launch.

It was actually upon building Ksplice that Daher and team realized their dire need for tech-enabled bookkeeping solutions.

“We built something internally like this as a byproduct of just running [Ksplice],” Daher explained. “When Oracle was acquiring our company, we met with their finance people and we described this system to them and they were blown away.”

It took a few years for the team to refocus their efforts on streamlining back-office processes for startups, opting to build business chat software in Zulip first.

Pilot’s software integrates with other financial services products to bring the bookkeeping process into the 21st century. Its platform, for example, works seamlessly on top of QuickBooks so customers aren’t wasting precious time updating and managing the accounting application.

“It’s better than the slow, painful process of doing it yourself and it’s better than hiring a third-party bookkeeper,” Daher said. “If you care at all about having the work be high-quality, you have to have software do it. People aren’t good at these mechanical, repetitive, formula-driven tasks.”

Currently, Pilot handles bookkeeping for more than $100 million per month in financial transactions but hopes to use the infusion of venture funding to accelerate customer adoption. The company also plans to launch a tax prep offering that they say will make the tax prep experience “easy and seamless.”

“It’s our first foray into Pilot’s larger mission, which is taking care of running your companies entire back office so you can focus on your business,” Daher said.

As for whether the team will sell to another big acquirer, it’s unlikely.

“The opportunity for Pilot is so large and so substantive, I think it would be a mistake for this to be anything other than a large and enduring public company,” Daher said. “This is the company that we’re going to do this with.”

Pinterest prices IPO above range

Pinterest priced shares of its stock, “PINS,” above its anticipated range on Wednesday evening, CNBC reports. The company will sell 75 million shares of Class A common stock at $19 apiece in an offering that will attract $1.4 billion in new capital for the visual search engine.

The NYSE-listed business had planned to sell its shares at between $15 to $17 and didn’t increase the size of its planned offering prior to Wednesday’s pricing.

Valued at $12.3 billion in 2017, the initial public offering gives Pinterest an initial market cap of approximately $10 billion.

The IPO has been a long time coming for the nearly 10-year-old company led by co-founder and chief executive officer Ben Silbermann . Given Wall Street’s lackluster demand for ride-hailing company Lyft, another consumer technology stock that recently made its Nasdaq debut, it’s unclear just how well Pinterest will perform in the days, weeks, months and years to come. Pinterest is unprofitable like its fellow unicorns Lyft and Uber, but its financials, disclosed in its IPO prospectus, illustrate a clear path to profitability. As for Lyft and Uber, Wall Street analysts, among others, still question whether either of the businesses will ever achieve profitability.

Eric Kim of consumer tech investment firm Goodwater Capital says despite the fact that Pinterest and Lyft are very different companies, Lyft’s falling stock has undoubtedly impacted Pinterest’s offering.

“They are so close together, it’s hard for those not to influence one another,” Kim told TechCrunch. “It’s a much different category, but they are still both consumer tech and they will both be trading at a double-digital revenue multiple.

The San Francisco-based company posted revenue of $755.9 million in the year ending December 31, 2018 — 16 times less than its latest decacorn valuation — on losses of $62.9 million. That’s up from $472.8 million in revenue in 2017 on losses of $130 million.

The stock offering represents a big liquidity event for a handful of investors. Pinterest had raised a modest $1.47 billion in equity funding from Bessemer Venture Partners, which holds a 13.1 percent pre-IPO stake, FirstMark Capital (9.8 percent), Andreessen Horowitz (9.6 percent), Fidelity Investments (7.1 percent) and Valiant Capital Partners (6 percent). Bessemer’s stake is worth upwards of $1 billion. FirstMark and a16z’s shares will be worth more than $700 million each.

Zoom — another tech company going public on Thursday that, unlike its peers, is actually profitable — priced its shares on Wednesday too after increasing the price range of its IPO earlier this week. The price values Zoom at roughly $9 billion, nearly surpassing Pinterest, an impressive feat considering Zoom was last valued at $1 billion in 2017 around when Pinterest’s Series H valued it at a whopping $12.3 billion.

Profitability, as it turns out, may mean more to Wall Street than Silicon Valley thinks.

Kindbody raises $15M, will open a ‘Fertility Bus’ with mobile testing & assessments

Kindbody, a startup that lures millennial women into its pop-up fertility clinics with feminist messaging and attractive branding, has raised a $15 million Series A in a round co-led by RRE Ventures and Perceptive Advisors.

The New York-based company was founded last year by Gina Bartasi, a fertility industry vet who previously launched Progyny, a fertility benefit solution for employers, and FertilityAuthority.com, an information platform and social network for people struggling with fertility.

“We want to increase accessibility,” Bartasi told TechCrunch. “For too long, IVF and fertility treatments were for the 1 percent. We want to make fertility treatment affordable and accessible and available to all regardless of ethnicity and social economic status.”

Kindbody operates a fleet of vans — mobile clinics, rather — where women receive a free blood test for the anti-Müllerian hormone (AMH), which helps assess their ovarian egg reserve but cannot conclusively determine a woman’s fertility. Depending on the results of the test, Kindbody advises women to visit its brick-and-mortar clinic in Manhattan, where they can receive a full fertility assessment for $250. Ultimately, the mobile clinics serve as a marketing strategy for Kindbody’s core service: egg freezing.

Kindbody charges patients $6,000 per egg-freezing cycle, a price that doesn’t include the cost of necessary medications but is still significantly less than market averages.

Bartasi said the mobile clinics have been “wildly popular,” attracting hoards of women to its brick-and-mortar clinic. As a result, Kindbody plans to launch a “fertility bus” this spring, where the company will conduct full fertility assessments, including the test for AMH, a pelvic ultrasound and a full consultation with a fertility specialist.

In other words, Kindbody will offer all components of the egg-freezing process on a bus aside from the actual retrieval, which occurs in Kindbody’s lab. The bus will travel around New York City before heading west to San Francisco, where it plans to park on the campuses of large employers, catering to tech employees curious about their fertility.

“Our mission at Kindbody is to bring care directly to the patient instead of asking the patient to come to visit us and inconvenience them,” Bartasi said.

A sneak peek of Kindbody’s “fertility bus,” which is still in the works

Kindbody, which has raised $22 million to date from Green D Ventures, Trailmix Ventures, Winklevoss Capital, Chelsea Clinton, Clover Health co-founder Vivek Garipalli and others, also provides women support getting pregnant with in vitro fertilisation (IVF) and intrauterine insemination (IUI). 

With the latest investment, Kindbody will open a second brick-and-mortar clinic in Manhattan and its first permanent clinic in San Francisco. Additionally, Bartasi says they are in the process of closing an acquisition in Los Angeles that will result in Kindbody’s first permanent clinic in the city. Soon, the company will expand to include mental health, nutrition and gynecological services.

In an interview with The Verge last year, Bartasi said she’s taken inspiration from SoulCycle and DryBar, companies whose millennial-focused branding strategies and prolific social media presences have helped them accumulate customers. Kindbody, in that vein, notifies its followers of new pop-up clinics through its Instagram page.

In the article, The Verge called Kindbody “the SoulCycle of fertility” and questioned its branding strategy and its claim that egg freezing “freezes time.” After all, there is limited research confirming the efficacy of egg freezing.

“The technology that allows for egg-freezing has only been widely used in the last five to six years,” Bartasi explained. “The majority of women who froze their eggs haven’t used them yet. It’s not like you freeze your eggs in February and meet Mr. Right in June.”

Though Kindbody touts a mission of providing fertility treatments to the 99 percent, there’s no getting around the sky-high costs of the services, and one might argue that companies like Kindbody are capitalizing off women’s fear of infertility. Providing free AMH tests, which often falsely lead women to believe they aren’t as fertile as they’d hoped, might encourage more women to seek a full-fertility assessment and ultimately, to pay $6,000 to freeze their eggs, when in reality they are just as fertile as the average woman and not the ideal candidate for the difficult and uncomfortable process.

Bartasi said Kindbody makes all the options clear to its patients. She added that when she does hear accusations that services like Kindbody capitalize on fear of infertility, they tend to come from legacy programs and male fertility doctors: “They are a little rattled by some of the new entrants that look like the patients,” she said. “We are women designing for women. For far too long women’s health has been solved for by men.”

Kindbody’s pricing scheme may itself instill fear in incumbent fertility clinics. The startup’s egg-freezing services are much cheaper than market averages; its IVF services, however, are not. Not including the costs of medications necessary to successfully harvest eggs from the ovaries, the average cost of an egg-freezing procedure costs approximately $10,000, compared to Kindbody’s $6,000. Its IVF services are on par with other options in the market, costing $10,000 to $12,000 — not including medications — for one cycle of IVF.

Kindbody is able to charge less for egg freezing because they’ve cut out operational inefficiencies, i.e. they are a tech-enabled platform while many fertility clinics around the U.S. are still handing out hoards of paperwork and using fax machines. Bartasi admits, however, that this means Kindbody is making less money per patient than some of these legacy clinics.

“What is a reasonable profit margin for fertility doctors today?” Bartasi said. “Historically, margins have been very, very high, driven by a high retail price. But are these really high retail prices sustainable long term? If you’re charging 22,000 for IVF, how long is that sustainable? Our profit margins are healthy.”

Bartasi isn’t the only entrepreneur to catch on to the opportunity here, as I’ve noted. A whole bunch of women’s health startups have launched and secured funding recently.

Tia, for example, opened a clinic and launched an app that provides health advice and period tracking for women. Extend Fertility, which like Kindbody, helps women preserve their fertility through egg freezing, banked a $15 million round. And a startup called NextGen Jane, which is trying to detect endometriosis with “smart tampons,” announced a $9 million Series A a few weeks ago.

Brex, the credit card for startups, raises $100M debt round

Brex, widely known for its billboards littered across San Francisco, has secured a $100 million debt financing from Barclays Investment Bank .

The company, which provides a corporate credit card designed specifically for startups, has previously raised $215 million in equity funding at a $1.1 billion valuation in the less than two years since it graduated from the Y Combinator startup accelerator.

Debt, Brex chief executive officer Henrique Dubugras tells TechCrunch, will power the company’s next phase of growth, including the launch of a credit card for large enterprises.

“Because we raised so much equity so fast, we put a lot of it to work on the lending; this will allow us to scale way beyond our equity,” Dubugras said, adding that the company has no plans to raise additional equity funding right now: “Especially after this debt raise because now a lot of the capital that was tied up we can get back.”

This year, the company has been putting its boatload of venture capital to work, taking the necessary steps toward maturation. Recently, Brex closed its first notable acquisition, poaching the blockchain startup Elph right out of YC in a deal that closed just one week before Demo Day. The Elph team brings their infrastructure security know-how to Brex, helping the company build its next product, a credit card for Fortune 500 companies.

Brex is backed by Y Combinator Continuity, Ribbit Capital, Greenoaks Capital, DST Global, IVP, Peter Thiel and Max Levchin.

Brex, which recently launched a rewards program tailored to startups needs, doesn’t require startups to provide a personal guarantee or security deposit. The company simplifies corporate expenses by providing companies with a consolidated look at their spending and gives entrepreneurs a credit limit that’s as much as 10 times higher than what they might receive elsewhere.

Tackling the $190 billion physical therapy market, Sword Health raises $8 million from Khosla Ventures

The U.S. healthcare system spends roughly $190 billion every year on physical therapies prescribed to treat muscular and skeletal disorders, and Sword Health has raised $8 million in a new round of financing to slash those costs.

The New York-based company was founded in Europe four years ago and recently relocated to the U.S. where spending on musculoskeletal disorders has skyrocketed to become the second most costly ailment in America, the company said.

Sword Health focuses on five key pathologies — lower back pain, shoulder pain, neck pain and physical therapy in the wake of knee and hip replacement surgeries.

“Lower back pain is the most important one in terms of chronic pain, then knee and shoulder pain” says Sword Health founder and chief executive Virgilio Bento.

Khosla Ventures led the round with undisclosed angel investors. It’s the first funding for Sword since it raised a $4.6 million seed round last April.

Bento launched the company after identifying the lack of availability of good physical therapy when his brother was recovering from a car accident and needed access to better care.

The company has a hardware solution that’s set up in consultation with a specialist either remotely or in the home. The specialist will monitor a user of Sword Health’s system of wearable devices on a tablet that’s equipped with the company’s software. After guiding a patient through a therapy session, the patient can then perform the exercises on their own in the comfort of their home.

Since its launch the company has treated 1,000 patients with its technology, according to Bento.

Sword isn’t the only company that’s looking to cut costs for physical therapy. Another European transplant to U.S. shores, Hinge Health, grabbed a $26 million round about eight months ago to tackle the American market with digital treatments for musculoskeletal diseases.

Sword, which has offices in New York, San Francisco, and Porto said that it would use the new money in part for clinical validation of its therapies. The company has already published a study in “Nature Scientific Reports”, which reviewed the efficacy of the company’s treatment regimen for patients who’d had total knee replacement surgeries. 

“We already proved we could make the impossible possible by developing a new technology many thought unthinkable,” said Bento, in a statement. “With this round we want to go from the possible to the inevitable.”

 

With 35 different in-home health diagnostic tests now on offer, Everlywell raises $50 million to expand

Venture capitalists are pouring hundreds of millions of dollars into healthcare startups pitching lower cost alternatives to traditional services and one of their primary targets is diagnostics.

As investors look to back services that can pitch lower cost alternatives to customers, companies like EverlyWell, the Disrupt Battlefield alumnus which just raised $50 million in new financing start to look more appealing.

Since its launch on our San Francisco stage in 2016, EverlyWell has expanded from eight test kits that use blood, saliva, or urine to diagnose a variety of ailments (from food sensitivities to high cholesterol to fatigue) to now pitching a total of 35 in-home testing offerings to consumers.

The same pressures on American consumers continue to drive EverlyWell’s growth. More employees are opting for high deductible plans offered by employers, which means that they’re paying more out of pocket for medical expenses. And increasingly consumers are looking at in-home or DIY tests as a way to reduce costs and improve care by preemptively testing for certain conditions.

While this may result in over-testing, EverlyWell’s use of established testing facilities to perform its diagnostics means that users don’t face the same kind of risks of a bad result that they would from relying on newer technologies, says EverlyWell chief executive, Julia Cheek.

Indeed, the vast majority of the tests that EverlyWell provides are what Cheek calls “wellness panels” that are tests which can be initiated by a consumer without the need for a doctor’s referral. The company’s top tests are its testosterone, metabolism, Vitamin D, food sensitivity and STD tests, Cheek says. A fact that’s unsurprising given that those are the tests that the company advertises most heavily around.

EverlyWell is going to use the new cash primarily for brand building, says Cheek. And to expand the company’s array of products and services even further while building on its retail footprint. The company already counts CVS and Humana as partners ad began selling its test kits in target stores nationally earlier this month.

The company has a host of competitors across all of its offerings ranging from Modern Fertility and Future Family, which are both focused on women’s fertility, to 23andMe, the juggernaut of genetics testing which has raised over $750 million for its gene testing services.

Unlike 23andMe, EverlyWell doesn’t provide its test results to third parties that aren’t clinicians working with customers after the completion of a diagnostics screening, says Cheek.

“We do not sell or share data or results,” Cheek says. “[Except] to share with the physician network — they have to be able to review the medical information from the physician and the lab-testing network.”

Backing the company’s latest investment round are longtime investors Goodwater Capital, Next Coast Ventures, and NextGen Venture Partners along with new investor Highland Capital Partners.

“Lab testing is arguably one of the most important steps in preventing and managing illness, but has been largely ignored by digital health companies,” said Eric Kim, managing partner at Goodwater Capital, in a statement. “With a clear consumer pain point and a strong executive team that integrates both consumer and healthcare expertise, EverlyWell is successfully navigating an entrenched industry to offer consumers an opportunity to take charge of their own health.”

Airbnb officially owns HotelTonight

Airbnb has completed its acquisition of the last-minute hotel booking application, HotelTonight, the company announced on Monday. The deal is Airbnb’s largest M&A transaction yet, and will accelerate the home-sharing giant’s growth as it gears up for an initial public offering.

Airbnb reportedly began talks to acquire HotelTonight months ago, and finally confirmed its intent to acquire the business in early March. Reports indicated a price tag of more than $400 million; Airbnb declined to comment on the size of the deal.

As part of the deal, HotelTonight co-founder and chief executive officer Sam Shank will lead the boutique hotel category at Airbnb, one of the company’s newer units meant to help it scale beyond treehouses and quirky homes.

“When we founded HotelTonight, we sought to reimagine the hotel booking experience to be more simple, fast and fun, and to better connect travelers with the world’s best boutique and independent hotels,” Shank said in a statement. “We are delighted to take this vision to new heights as part of Airbnb.”

Shank launched the San Francisco-based company in 2010. Most recently, it was valued at $463 million with a $37 million Series E funding in 2017, according to PitchBook. HotelTonight raised a total of $131 million in equity funding from venture capital firms including Accel, Battery Ventures, Forerunner Ventures and First Round Capital.

With a new CEO and fresh funding from Upfront, healthy prepared food delivery service Territory looks to grow

With a new chief executive officer and $4 million in fresh funding from investors including the Los Angeles-based investment firm, Upfront Ventures, Territory Foods is poised for growth.

The company recently hired powerhouse executive Abby Coleman, the former vice president of marketing and strategy at Quidsi and head of e-commerce at Diapers.com as its new chief executive and is now looking to expand its footprint and unique approach to meal delivery beyond its current geographies.

The company uses a proprietary food recommendation engine to determine its subscribers’ personal preferences to deliver them meals that are more tailored to their individual tastes.

Territory also employs a unique business model, leveraging local chefs to prepare meals according to menus designed by the company.

The distributed workforce of gig chefs allows the company greater flexibility in planning, preparing, and distributing its meals, according to Coleman.

A lifelong vegetarian and mother of two vegetarian daughters, the 39-year-old Coleman actually began her business in the food services industry as a caterer before moving on to leadership positions at Kraft Foods and Mondelez International before taking on the vice presidential role at Quidsi.

“My coming on board was really a response to a decision that the board and Patrick [Smith] made that it was time to scale the business,” says Coleman. 

With the new cash the company intends to expand its footprint in locations beyond its hubs in major cities on the East and West coasts (and Texas), including: Baltimore, Dallas/Ft. Worth, Los Angeles, San Francisco, and the Washington metropolitan area.

There’s plenty of opportunity for growth considering that the market for healthy eating and personalized food is roughly $702 billion, according to the company. In 2018, one out of every three Americans reported to following some kind of healthy eating protocol with the percentage highest among 18-34 year olds, according to information provided by Territory.

“It’s rare to see businesses like Territory that hit major trends at the right time with the right product,” said Kara Nortman, Partner at Upfront Ventures. “Territory has been able to consistently punch above its weight with a very smart economic model and a product that consumers love, and we couldn’t be more excited to lean into this business with Abby and her team. Abby’s passionate knowledge of food and superb ecommerce skills combine to make her the perfect leader for Territory’s next phase of growth.”

Indeed, the company’s methodical approach to growth has been a strength that has led it to profitability in core markets like Los Angeles and Washington, Coleman says.

Territory wrings efficiency out of its network of chefs, which has a high retention rate and allows the company to act in an asset light way. Chefs are paid to prepare the meals, but provide the ingredients themselves and work as contractors rather than employees. They pocket the difference between the cost of the ingredients they use and the price they’re paid by Territory to prepare the meals.

Coleman says the business model leverages the excess capacity caterers have while offering them the opportunity to tailor their meals to suit local market tastes.

And just because the chefs are given a bit of free rein doesn’t mean that there’s any lack of quality control, Coleman says. “The emphasis is on the quality control that a product is up to our standards,” according to Coleman. 

Meals are $10.95 and are designed around the needs of customers — ranging from paleo, whole 30, keto, and vegetarian options. Now, Coleman is looking to aggressively expand the flexibility and menu options available to customers.

“It’s more like a restaurant and we’re going to have an entirely new menu next week,” Coleman says. “We create over 400 new dishes a year.”

Despite the woeful performance of public companies like Blue Apron, prepared food companies are still attracting investor attention and interest — especially if they’re married with a pitch to health-conscious consumers targeting a specific diet.

Territory Foods has raised $20 million to date, including the new cash from Upfront Ventures and Lewis & Clark, while Trifecta, another purveyor of prepared foods has raised $2.6 million. And the giants are still around as well, the companies like Plated, HelloFresh, Home Chef (owned by Kroger Foods), and Sun Basket, which have raised over $500 million combined.

 

Uber spent $457 million on self-driving and flying car R&D last year

Uber spent $457 million last year on research and development of autonomous vehicles, flying cars (known as eVTOLs) and other “technology programs” and will continue to invest heavily in the futuristic tech even though it expects to rely on human drivers for years to come, according to the company’s IPO prospectus filed Thursday.

R&D costs at Uber ATG, the company’s autonomous vehicle unit, its eVTOL unit Uber Elevate and other related technology represented one-third of its total R&D spend. Uber’s total R&D costs in 2018 were more than $1.5 billion.

Uber filed its S-1 on Thursday, laying the groundwork for the transportation company to go public next month. This comes less than one month after competitor Lyft’s debut on the public market. Uber is listing under the New York Stock Exchange under the symbol “UBER,” but has yet to disclose the anticipated initial public offering price.

Uber believes that autonomous vehicles will be an important part of its offerings over the long term, namely that AVs can increase safety, make rides more efficient and lower prices for customers.

However, the transportation company struck a more conservative tone in the prospectus on how and when autonomous vehicles will be deployed, a striking difference from the early days of Uber ATG when former CEO Travis Kalanick called AVs an existential risk to the business.

Uber contends there will be a long period of “hybrid autonomy” and it will continue to rely on human drivers for its core business for the foreseeable future. Uber said even when autonomous vehicle taxis are deployed, it will still need human drivers for situations that “involve substantial traffic, complex routes, or unusual weather conditions.” Human drivers will also be needed during concerts, sporting events and other high-demand events that will “likely exceed the capacity of a highly utilized, fully autonomous vehicle fleet,” the company wrote in the S-1.

Here’s an excerpt from the S-1:

Along the way to a potential future autonomous vehicle world, we believe that there will be a long period of hybrid autonomy, in which autonomous vehicles will be deployed gradually against specific use cases while Drivers continue to serve most consumer demand. As we solve specific autonomous use cases, we will deploy autonomous vehicles against them. Such situations may include trips along a standard, well-mapped route in a predictable environment in good weather.

Uber contends it is well-suited to balance that potentially awkward in-between phase when both human drivers and autonomous vehicles will co-exist on its platform.

“Drivers are therefore a critical and differentiating advantage for us and will continue to be our valued partners for the long-term,” Uber wrote.

Despite Uber’s forecast and more tempered tone, the company is pushing ahead on autonomous vehicles.

Uber ATG was founded in 2015 in Pittsburgh with just 40 researchers from Carnegie Robotics and Carnegie Mellon University . Today, Uber ATG has more than 1,000 employees spread out in offices in Pittsburgh, San Francisco and Toronto.

Uber acknowledged under the risk factors section of the S-1 that it could fail to develop and successfully commercialize autonomous vehicle technologies or could be undercut by competitors, which would threaten its ride-hailing and delivery businesses.

Uber’s view of which companies pose the biggest threat to the company was particularly interesting. The company named nearly a dozen potential competitors, a list that contained a few of the usual suspects like Waymo, GM Cruise and Zoox, as well as less-known startups such as May Mobility and Anthony Levandowski’s new company, Prontio.ai. Other competitors listed in the S-1 include Tesla, Apple, Aptiv, Aurora and Nuro. Argo AI, the subsidiary of Ford, was not listed.

ATG has built more than 250 self-driving vehicles and has three partnerships — Volvo, Toyota and Daimler — that illustrates the company’s mult-tiered strategy to AVs.

Uber has a first-party agreement with Volvo. Under the agreement announced in August 2016, Uber owns Volvo vehicles, has added its AV tech and plans to deploy those cars on its own network.

Its partnership with Daimler is on the other extreme. In that partnership, announced in January 2017, Daimler will introduce a fleet of its own AVs on the Uber network. This is similar to Lyft’s partnership with Aptiv.

Finally, there’s Toyota, a new partnership just announced in August 2018, that is a hybrid of sorts of the other two. Uber says it expects to integrate its autonomous vehicle technologies into purpose-built Toyota vehicles to be deployed on its network.