Clearbanc cuts staff to navigate ‘long-term economic impacts’ of COVID-19

Clearbanc, a Toronto-based company that funds startups through equity-free investments, has laid off 17 employees to help it navigate the long-term economic impact of COVID-19, TechCrunch has learned.

The cuts impact about 8% of the staff, affecting roles ranging from office managers to recruiters and sales. Co-founder Michele Romanow says the company will use its connections to assist those affected by the layoffs to search for other work, and offer extended benefits through the end of the financial quarter.

Clearbanc has been noisy in its journey toward being a venture capital alternative for startups. Just last week, Clearbanc announced a new financing product to help startups avoid cutting staff and stay operationally afloat: Clearbanc Runway. And last year, it pushed out its “20-minute term sheet” to sell equity-free capital with a promise of founder friendliness. The model has seen the startup disburse $1 billion to nearly 2,200 companies so far, per its accounting.

In July 2019, the fintech company raised a $250 million fund and $50 million in equity to broaden its investment goals. The co-founders say Clearbanc is continuing to see an increased demand for its capital. It hired more than 140 people last year alone.

Clearbanc is in a somewhat unique position during this downturn, as it largely funds e-commerce businesses that have seen an uptick in usage as brick-and-mortar stores becomes less of an option due to social distancing.

However, last week, co-founder Andrew D’Souza pointed to unpredictable market conditions: “There’s a lot of volatility and a lot of uncertainty,” he said.

“We’re certainly going to be more conservative than we would have been six months ago. It probably looks like us writing smaller checks, more frequently,” he told TechCrunch last week.

Today’s layoffs, according to the company, don’t directly impact Clearbanc’s ability to cut checks. Instead, the Clearbanc cuts signal that layoffs aren’t reserved for the time when the dry powder runs out. As the pandemic draws out, we’re learning that sometimes it’s a bit more preemptive than that.

A storm of layoffs have impacted a wide range of startups and industries across the world. While travel and hospitality companies have felt the blunt of the pandemic’s economic impact, broader cuts show that sales and recruiting teams from other industries are also vulnerable. Layoffs have been so ubiquitous that platforms have risen to help those laid off find their next gig. And in a time where uncertainty rules week to week, any effort to create meeting grounds for those with this tough shared experience is much welcome.

Tech for good during COVID-19: Pivots and partnerships to help people deal

Some of us have learned how to be uniquely scrappy during this pandemic. I’m talking socks as masks and chickpea water as a vegetarian egg-white replacement type of scrappy.

And you will learn in this week’s installment of Tech For Good startups are no exception. Companies around the world are pivoting and partnering their way into helping us navigate the  COVID-19 pandemic. Below is a list of some recent partnerships that caught our eyes, as well as other goodness from private companies.


 

From greeting cards to virtual therapy

Ali O’Grady founded greeting-card startup Thoughtful Human in 2017. The greeting cards tackle difficult topics, such as cancer, grief and, more recently, quarantine and the pandemic. Thoughtful Human has partnered with BetterHelp Therapy to offer a month of free virtual therapy through phone or text.

Zira wants to help you bounce back if you were laid off

Zira is an automated workforce solution to help with shift schedules and team communication. Now, it launched a free tool called Bounce Back to help those laid off due to COVID-19. The application chiefly teaches users how to navigate unemployment, curated by location. It also creates a community for users to stay in touch with former employers, and has a job marketplace.

Yext goes up State

Yext, a site search tool, has partnered with the US Department of State to create a COVID-19 informational hub to disseminate information about travel alerts. In the last month, Yext has developed sites for the State of New Jersey and the State of Alabama.

An alternative to a good ol’ restaurant menu

My Menu, which traditionally offered a digital tablet menu platform to restaurants, is now giving away its underlying technology to help restaurants become online-friendly overnight. Using My Menu technology, restaurants can create a menu that pops up when customers scan a QR code on their phones. It will help restaurants make their menus more accessible.

Creativity using the cloud

DigitalOcean, a cloud provider, created a hub for developers to share projects aimed at helping people deal with the pandemic. Projects that have sprouted up as a result include an app that lets people anonymously report their health conditions to pulsecheck the spread across the world, and a remote learning group of Kenyan primary school teachers.

Founder therapy for free

Betaworks is launching a free, 6-week, peer-to-peer mentorship program to connect founders and company leaders in mentor-led support groups. The application deadline is April 13, and participants will be chosen on a first-come, first-served basis.

#MaskUp

Janelle M. Jimenez, the founder and CEO of sustainable clothing startup Stellari, is using her startup capital to work with Los Angeles manufacturers to create masks. She has invested $15,000 of seed money into partnerships with factories, and needs $10,000 to produce cloth masks at scale. She plans to donate the masks at cost and support the local garment industry at the same time. The effort has raised nearly $24,000 on Indiegogo.

Coders unite to make websites COVID-19 friendly

Coding Dojo has launched an initiative to connect its alumni group of coders to small businesses that need website development. Coders will take on projects, for no charge, like creating a website for that corner bodega or adding a delivery feature to existing websites.

As the marathon gets canceled, Boston’s new stride

Tom O’Keefe is the founder of StrideForStride, which buys race bibs for low-income runners from around the world, ranging from Guatemala, Nicaragua, El Salvador, Brazil, Chile, Cuba, Jamaica, and the US. Due to COVID-19, they lost a fundraiser at hotels and donations from restaurants and Sam Adams. Stride plans to host running clubs around various businesses and bars in Boston once everything re-opens, and in the meantime has launched a website DownloadBoston.com to highlight local businesses.

Bonus round

A group of New Yorkers has launched a challenge called #InMyScrubs to raise money to send meals from local restaurants to feed health care workers at critical-need hospitals. While this isn’t a tech initiative, it is heartwarming. The idea is to post pictures of yourself on Instagram in home “scrubs” like sweatpants and athleisure as an act of solidarity with those in their hospital scrubs. The challenge has raised nearly $68,000.

Instacart’s hiring spree continues as it faces unprecedented demand

Instacart is adding more support roles to help its shoppers, customers and retail partners as the company faces unprecedented demand for its grocery delivery services due to COVID-19 shelter in place orders.

Today Instacart announced that it has doubled its Care team, from 1,200 agents to 3,000 agents. Care team employees will work on answering questions about how Instacart works, delivery issues, address mishaps and other general woes.

The hiring news comes after Instacart shoppers organized a strike last month, demanding personal protective equipment, hazard pay, default tips and extended sick pay.

Instacart has been on a hiring spree as customer demand increased more than 300% year over year last week alone. Last month, the Instacart shopper community grew to 350,000 active shoppers, up from 200,000 two weeks ago.

Today, along with doubling its Care team, Instacart says it has also hired and signed an additional 15,000 representatives that will join the team by May. With that, Instacart says it will have a Care team of about 18,000 members.

Some of Instacart’s new hires have are experienced support agents recently laid off in the flurry of cuts across the hospitality and travel industry.

With more demand, and thus more stresses on shoppers than ever before, the new members seem like yet another move by Instacart to try to pacify its growing shopper network. Last month, Instacart outlined an extended pay policy and contactless pay option. The company also introduced new product features aimed at making delivery windows for shoppers more flexible and fast.

Earlier this week, tip-baiting emerged as a grotesque tactic used by customers. Customers have been baiting Instacart shoppers to pick up their groceries by putting large tips on the bill through the app. Then, once the shopper drops off the groceries, customers are changing that tip to a lesser amount or even to $0.

The ability to change the tip price up to three days after grocery drop-off is an option provided through the Instacart application.

According to Instacart, tip-baiting is rare. Customers either adjusted their tip upward or did not adjust tip at all on 99.5% of orders. The company also removed the “none” option in the customer tip section with hopes that customers will tip at minimum.

While these feature updates will likely have a positive impact, Instacart has still not banned customers from changing the tip after getting their groceries. The new roles will not be able to help shoppers with tip-baiting changes either, as the tip is entirely up to the customer.

The company has also not changed the default tip minimum, as worker protests asked for tip defaults to be put at 10% during this time.

The surge of hires for Instacart’s Care team was not related to the tip-baiting issue, says the company, but instead related to the surge of demand for the service.

Altman and others want to crowdfund 1 billion masks in the next 180 days

Sam Altman, former president of Y Combinator and CEO of OpenAI, tweeted out his goal to secure 1 billion masks in 180 days. The public just needs to crowdfund those masks, first.

Altman, along with his brother Max Altman, an employee at Rippling, Radu Spineanu, the co-founder of Two Tap, Tinnei Pang, a designer at Mercari US, and others, are all working with suppliers in China to get 1 billion single-use masks to help the broader U.S. population, from service workers to those in hospitals but not directly working with COVID-19 patients.

The tech leaders will not be financing these masks themselves, but instead have asked the public to crowdfund a large order.

“This is a somewhat unusual market—the most effective way to guarantee supply is to pay up front so that factories can buy the equipment and supplies they need, and buying in bulk leads to significant cost savings,” the site reads.

“We won’t be funding any of these masks — we’re working with a few other groups to help fund getting [personal protective equipment] for medical workers. The goal of this project is to get surgical masks to places that need them at a dramatically lower rate than they could ever get themselves,” Max Altman wrote in an e-mail to TechCrunch.

According to the initiative’s website, none of the organizers will make money from the mask production.

Users can visit the 1billionmasks.com website and submit a form of “indication of interest.” If there’s enough demand, according to the team, an order form will appear on the site, and approved buyers will sign a contract and submit a payment to then “crowdfund” the masks.

If the demand hits a certain point, the team will be able to sell masks at 32 cents per mask, not inclusive of taxes and duties. If there is less demand, that price will be higher.

The masks are not meant to replace the dramatic shortage of N95 masks we’re seeing across the country, but rather to stop those not on the frontlines from buying scarce N95 masks.

N95 masks are necessary, because they filter out small particles, which is key for healthcare workers on the frontlines caring for COVID-19 patients. This doesn’t mean that others don’t need to wear masks — and in fact the WHO and CDC both recommend the use of masks broadly. Because of the recommendation, many DIY mask tutorials have been created, urging folks to use materials ranging from scarves to socks.

There has been a flurry of efforts from the private tech sector to help with medical shortages across the country. Apple, for example, sourced over 20 million protective masks and is now building “face shields.” Smaller companies are stepping up too: a heating filter company, a robotics startup and an architecture startup have all independently shifted operations to start making masks and ventilators.

The option that Altman and his team are providing has been rated for bacterial infiltration for people not on the frontlines. The mask option is closer to a surgical mask  than an N95 mask. Surgical masks do not provide as much respiratory protection as an N95 respirator, but do protect against droplets and large respiratory particles. According to the CDC, “most surgical masks do not effectively filter small particles from the air and do not prevent leakage around the edge of the mask when the user inhales.”

According to the website, the masks could be handed out by state and local governments, institutions, organizations and companies to essential workers, like grocery shoppers or delivery people.

Deliveries would start to arrive in Long Beach three to four weeks from the first order and then continue weekly for six months. Long Beach is the drop-off point because it is the location that the team can get supplies to the quickest, according to Max Altman.

Amid unicorn layoffs, Boston startups reflect on the future

As domestic and global economies grapple with the COVID-19 era, its impact on startups is coming into focus: All will be impacted, many will suffer and some will close.

Boston, a city that TechCrunch keeps tabs on, has seen a number of well-known startups struggle in recent weeks. Their misfortunes come quickly after companies in the region recorded huge venture raises, generating notable momentum.

In December, TechCrunch wrote that “despite winter’s chill, the Northeast’s tech ecosystem is white-hot,” taking into account Boston’s historical gains in the venture world. And earlier in 2020 we covered a few huge rounds that the city’s own Toast and Flywire had put together; worth $520 million as a pair, the two venture deals stood out for how large they were and how close to one another they were announced.

Indeed, looking at preliminary venture data from Crunchbase, Boston was on track to crush its 2019 tally of venture rounds of $50 million or more in 2020. That record-setting pace is now in doubt. 

To get a feel for Boston’s new reality, we’ve collected the region’s recent news and spoke to area investors and founders, including David Cancel of Drift (the previous founder of Compete and other companies), Drew Volpe of First Star VC and a team of folks from Underscore VC.

TechCrunch had intended to start a monthly series on Boston and its venture capital and startup scenes later this month. We’re kicking it off early because the news is already here.

Slowdown

Earlier this week, restaurant management platform Toast cut 50% of its staff. The Boston-based company was valued at $5 billion in recent months, and — before the pandemic hit — was planning to spend the next few years gearing up to go public. Toast sits uniquely between fintech and restaurant tech, industries that have been arguably impacted the most by COVID-19’s spread and widespread restaurant closures.

AcreTrader raises $5M to help people invest in a fruitful asset class: farmland

Carter Malloy thinks that lucrative investments include dirt, some seeds, maintenance, and growth — literally. So, he founded Fayetteville, Arkansas-based AcreTrader, an online farmland investment platform.

AcreTrader wants to lower the barrier of farmland ownership for people who aren’t experts in investing in the field to begin with. Malloy calls it a Robinhood for buying farmland.

AcreTrader is trying to solve the traditionally cumbersome process it takes to acquire a piece of land. Historically, Malloy said, people have to acquire a piece of land which could cost millions. Land-buyers will either have deep pockets or acquire the land from family. After that, buyers have to go to a farm broker, do due diligence, and learn how to work with the farmers who will work on the land.

“Farmland has provided 11 to 12 percent average annual returns for nearly 30 years,” he said. “With much less volatility and price swings than other asset classes.’

The AcreTrader platform connects buyers, like individual investors, family offices, or investment funds, to farmland that is available for purchase. AcreTrader incorporates each property it acquires under an LLC, and then users are able to buy shares of that entity. Think of shares in terms of acres, so 20 shares could be 2 acres of land.

If you want to sell the shares of your land, AcreTrader has a marketplace for you to do that. But, since land has a long-term investment benefit, the company recommends holding ownership of land between 3 to 10 years, based on the property.

AcreTrader vets land properties before buying them, accounting for factors like soil quality, irrigation methods, or the history of annual crop rotation. Malloy claims the platform analyzes over 100 points of data from the farms.

The startup is currently focused on buying and selling property on the West Coast and Midwest. The farmland isn’t from the expensive rolling fields of Napa Valley, but instead “less trafficked” land, like an almond farm in Tulare, California or a soybean plain in Kankakee, Illinois.

Once a customer purchases a vetted piece of land, AcreTrader takes care of land maintenance so the onus isn’t on the buyer to learn how to grow a harvest or maintain the land. It does so through a team of dedicated farmland experts, who manage hundreds of millions of dollars of farmland and check in with farmers on a weekly basis.

“It becomes a truly passive investment,” Malloy said.

AcreTrader makes money from the real estate brokerage fees when it buys land from a seller, or in this case, a third-party farmer that pays “rent” to the company.

In December, ProducePay picked up up $190 million in debt financing for a purchase program for farmers. While the company isn’t a direct competitor of AcreTrader, it could actually operate complementary to it. ProducePay helps farmers afford the “lumpy revenues” that come with the growing season, and works as a middle man between distributors, growers and grocers.

Along with charging farmers, the company also charges an annual management fee of 0.75% to 1% to oversee land from a buyer.

AcreTrader today announced that it raised an oversubscribed $5 million seed round led by RZC investments, with participation from Revel Partners .

Malloy grew up in a farming family, and he’s witnessed his father buy and sell land over the years. He said it’s led to him believing strongly in the consistency and risk-adjusted returns of farmland. As the world enters a time of economic uncertainty, Malloy’s belief in the slow and steady might echo with more people than ever before.

LinkedIn promises no COVID-related layoffs until the end of the fiscal year

LinkedIn has pledged to making no COVID-related layoffs until at least June 2020, the professional network has confirmed to TechCrunch. While the promise is only until the end of the fiscal year, it follows the lead of Salesforce CEO Marc Benioff’s claim last month to have no significant layoffs for the next 90 days.

Other business leaders such as Bank of America’s CEO Brian Moynihan and Morgan Stanley’s CEO James Gorman have also agreed to pause any potential layoffs until the end of 2020.

Layoffs are trickling down to all industries, starting in the hospitality and travel industry and moving to recruitment startups and scooter companies. Microsoft-owned LinkedIn, which serves as a social media platform for professionals and recruiters alike, is thus poised to be a critical connector for those laid off.

So as job security remains on everyone’s mind, LinkedIn’s promise to not have any layoffs will quell some of that fear within the organization, at least in the near future. LinkedIn has approximately 16,000 full-time employees across 30 cities in the world.

Regardless of how healthy LinkedIn may appear from this news, it’s not immune from making specific cost-saving measures as the economy struggles. The company, reports The Information, has “paused most of its hiring as it figures out business planning.” It had more the 1 million job applicants last year, according to the piece.

Restaurant management platform Toast cuts 50% of staff

Last valued at $5 billion, restaurant management platform Toast has joined the sweep of startups laying off employees due to the economic impact of the COVID-19 pandemic. Toast reduced the size of its staff by 50% through layoffs and furloughs, according to a blog post from Toast’s CEO, Chris Comparato. It also reduced executive pay across the board, froze hiring, halted bonuses and pulled back offers.

The company’s flagship product helps restaurants process payments and handle orders through a mix of hardware and software. Think handheld ordering pads, self-service kiosks and display systems for kitchens. It also connects businesses to food delivery services like Grubhub.

Toast sits on the bridge between two industries in the spotlight, for better or worse, right now: restaurants and fintech. But restaurants have been hit hard as eateries were forced to close down due to state mandates, or to simply promote social distancing. As a result, fintech companies that help restaurants work better and depend on foot traffic are seeing less transaction volume.

Comparato, in the blog post, cited how restaurant revenue broadly took a huge hit in March, which naturally trickled down to Toast’s operations.

“With limited visibility into how quickly the industry may recover, and facing slower than anticipated growth, we now find ourselves in the unenviable position of reducing our headcount,” he wrote. He noted that before the pandemic hit, Toast revenue grew 109% in 2019. In an interview with Crunchbase News in February, chief financial officer Tim Barash said that the company’s goal in the next few years is to go public.

The Toast employees laid off were offered a “severance package, benefits coverage, mental health support, and an extended window during which they can purchase vested stock options,” the blog post detailed. Toast is also developing a program to help those laid off or furloughed look for new roles, a move that mimics other efforts we’ve seen across the startup world.

Investors in Toast include TCV, Tiger Global Management, Bessemer Venture Partners and T. Rowe Price Associates.

AngelList lays off a number of staff and cuts executive salaries

AngelList, a platform that connects angel investors to startups and has roughly $1.8 billion assets under management, has laid off a sizable number of staff and cut executive salaries across all departments, according to a source familiar with the company. AngelList declined to share the number of people who were laid off.

The layoffs, which happened last week, largely impacted the company’s talent arm, which connects job-seekers with startups looking to hire. A source said that the layoffs came as a response to hiring freezes from tech startups waiting out the economic downturn.

 A spokesperson from the company provided the following statement: “As the media has covered recently, startup fundings and recruiting have recently been impacted by the current crisis. We don’t know how long the economic impacts will last, so we scaled back our costs to match. Unfortunately, that adjustment included layoffs. This was a difficult decision, but it sets up AngelList to continue our mission of helping startups succeed.”

AngelList was founded in 2010 by Naval Ravikant and Babak Nivi, and has raised $26.2 million in known venture capital to date, according to Crunchbase. The company is composed of three different branches: one for angel investors, one for products waiting to be funded, and one for job-seekers looking for their next gig at a startup.

AngelList formalizes the angel investing process a bit, wraps it up in a bow, and gives you a place to talk with other friends about deal flow and the intricacies of investing. “Whether you’re starting and scaling your own fund, or investing alongside established managers, we’ll help you grow as a top investor,” the website reads.

The company also has a landing page for people who want to start their own fund or syndicate, and offers resources like back office support for legal and regulatory filings or access to limited partners.

AngelList’s talent function hosts over 100,000 companies like Affirm, Twitch, and Stripe that want to hire new talent. While the layoffs largely impact that team, sources say that the talent network will continue to exist, just with a slimmer staff.

AngelList’s layoffs feel different than the other cuts we’ve seen across the startup world, largely from travel and hospitality companies. But, an economic downturn means less liquidity, and perhaps less energy to take bets on other companies in the form of cash. Plus, broader layoffs and hiring freezes from across the Valley trickle down pretty fast to the recruiting side. There might be more demand than ever from the job-seeker end, but that demand doesn’t mean supply will appear overnight.

AngelList lays off a number of staff and cuts executive salaries

AngelList, a platform that connects angel investors to startups and has roughly $1.8 billion assets under management, has laid off a sizable number of staff and cut executive salaries across all departments, according to a source familiar with the company. AngelList declined to share the number of people who were laid off.

The layoffs, which happened last week, largely impacted the company’s talent arm, which connects job-seekers with startups looking to hire. A source said that the layoffs came as a response to hiring freezes from tech startups waiting out the economic downturn.

 A spokesperson from the company provided the following statement: “As the media has covered recently, startup fundings and recruiting have recently been impacted by the current crisis. We don’t know how long the economic impacts will last, so we scaled back our costs to match. Unfortunately, that adjustment included layoffs. This was a difficult decision, but it sets up AngelList to continue our mission of helping startups succeed.”

AngelList was founded in 2010 by Naval Ravikant and Babak Nivi, and has raised $26.2 million in known venture capital to date, according to Crunchbase. The company is composed of three different branches: one for angel investors, one for products waiting to be funded, and one for job-seekers looking for their next gig at a startup.

AngelList formalizes the angel investing process a bit, wraps it up in a bow, and gives you a place to talk with other friends about deal flow and the intricacies of investing. “Whether you’re starting and scaling your own fund, or investing alongside established managers, we’ll help you grow as a top investor,” the website reads.

The company also has a landing page for people who want to start their own fund or syndicate, and offers resources like back office support for legal and regulatory filings or access to limited partners.

AngelList’s talent function hosts over 100,000 companies like Affirm, Twitch, and Stripe that want to hire new talent. While the layoffs largely impact that team, sources say that the talent network will continue to exist, just with a slimmer staff.

AngelList’s layoffs feel different than the other cuts we’ve seen across the startup world, largely from travel and hospitality companies. But, an economic downturn means less liquidity, and perhaps less energy to take bets on other companies in the form of cash. Plus, broader layoffs and hiring freezes from across the Valley trickle down pretty fast to the recruiting side. There might be more demand than ever from the job-seeker end, but that demand doesn’t mean supply will appear overnight.