Version One launches $70M Fund IV and $30M Opportunities Fund II

Early stage investor Version One, which consists of partners Boris Wertz and Angela Tran, has raised its fourth fund, as well as a second opportunity fund specifically dedicated to making follow-on investments. Fund IV pools $70 million from LPs to invest, and Opportunities Fund II is $30 million, both up from the $45 million Fund III and roughly $20 million original Opportunity Fund.

Version One is unveiling this new pool of capital after a very successful year for the firm, which is based in Vancouver and San Francisco. 2021 saw its first true blockbuster exit, with Coinbase’s IPO. The investor also saw big valuation boosts on paper for a number of its portfolio companies, including Ada (which raises at a $1.2 billion valuation in May); Dapper Labs (valued at $7.5 billion after riding the NFT wave); and Jobber (no valuation disclosed but raised a $60 million round in January).

I spoke to both Wertz and Tran about their run of good fortune, how they think the fund has achieved the wins it recorded thus far, and what Version One has planned for this Fund IV and its investment strategy going forward.

“We have this pretty broad focus of mission-driven founders, and not necessarily just investing in SaaS, or just investing in marketplaces, or crypto,” Wertz said regarding their focus. “We obviously love staying early — pre-seed and seed — we’re really the investors that love investing in people, not necessarily in existing traction and numbers. We love being contrarian, both in terms of the verticals we go in to, and and the entrepreneurs we back; we’re happy to be backing first-time entrepreneurs that nobody else has ever backed.”

In speaking to different startups that Version One has backed over the years, I’ve always been struck by how connected the founders seem to the firm and both Wertz and Tran — even much later in the startups’ maturation. Tran said that one of their advantages is following the journey of their entrepreneurs, across both good times and bad.

“We get to learn,” she said. “It’s so cool to watch these companies scale […] we get to see how these companies grow, because we stick with them. Even the smallest things we’re just constantly thinking about— we’re constantly thinking about Laura [Behrens Wu] at Shippo, we’re constantly thinking about Mike [Murchison] and David [Hariri] at Ada, even though it’s getting harder to really help them move the needle on their business.”

Wertz also discussed the knack Version One seems to have for getting into a hot investment area early, anticipating hype cycles when many other firms are still reticent.

“We we went into crypto early in 2016, when most people didn’t really believe in crypto,” he said. “We started investing pretty aggressively in in climate last year, when nobody was really invested in climate tech. Having a conviction in in a few areas, as well as the type of entrepreneurs that nobody else really has conviction is what really makes these returns possible.”

Since climate tech is a relatively new focus for Version One, I asked Wertz about why they’re betting on it now, and why this is not just another green bubble like the one we saw around the end of the first decade of the 2000s.

“First of all, we deeply care about it,” he said. Secondly, we think there is obviously a new urgency needed for technology to jump into to what is probably one of the biggest problems of humankind. Thirdly, is that the clean tech boom has put a lot of infrastructure into the ground. It really drove down the cost of the infrastructure, and the hardware, of electric cars, of batteries in general, of solar and renewable energies in general. And so now it feels like there’s more opportunity to actually build a more sophisticated application layer on top of it.”

Tran added that Version One also made its existing climate bet at what she sees as a crucial inflection point — effectively at the height of the pandemic, when most were focused on healthcare crises instead of other imminent existential threats.

I also asked her about the new Opportunity Fund, and how that fits in with the early stage focus and their overall functional approach.

“It doesn’t require much change in the way we operate, because we’re not doing any net new investments,” Tran said. “So we recognize we’re not growth investors, or Series A/Series B investors that need to have a different lens in the way that they evaluate companies. For us, we just say we want to double down on these companies. We have such close relationships with them, we know what the opportunities are. It’s almost like we have information arbitrage.”

That works well for all involved, including LPs, because Tran said that it’s appealing to them to be able to invest more in companies doing well without having to build a new direct relationship with target companies, or doing something like creating an SPV designated for the purpose, which is costly and time-consuming.

Looking forward to what’s going to change with this fund and their investment approach, Wertz points to a broadened international focus made possible by the increasingly distributed nature of the tech industry following the pandemic.

“I think that the thing that probably will change the most is just much more international investing in this one, and I think it’s just direct result of the pandemic and Zoom investing, that suddenly the pipeline has opened up,” he said.

“We’ve certainly learned a lot about ourselves over the past year and a half,” Tran added. “I mean, we’ve always been distributed, […] and being remote was one of our advantages. So we certainly benefited and we didn’t have to adjust our working style too much, right. But now everyone’s working like this, […] so it’s going to be fun to see what advantage we come up with next.”

Goldman Sachs leads $202M investment in project44, doubling its valuation to $1.2B in a matter of months

The COVID-19 pandemic disrupted a lot in the world, and supply chains are no exception. 

A number of applications that aim to solve workflow challenges across the supply chain exist. But getting real-time access to information from transportation providers has remained somewhat elusive for shippers and logistics companies alike. 

Enter project44. The seven-year-old Chicago-based company has built an API-based platform that it says acts as “the connective tissue” between transportation providers, third-party logistics companies, shippers and their supply chain systems. Using predictive analytics, the platform provides crucial real-time information such as estimated time of arrivals (ETAs).

“Supply chains have undergone an incredible amount of change — there has never been a greater need for agility, resiliency and the ability to rapidly respond to changes across the supply chain,” said Jason Duboe, the company’s chief growth officer.

And now, project44 announced it has raised $202 million in a Series E funding round led by Goldman Sachs Asset Management and Emergence Capital. Girteka and Lineage Logistics also participated in the financing, which gives project44 a post-money valuation of $1.2 billion. That doubles the company’s valuation at the time of its Insight Partners-led $100 million Series D in December, and brings its total raised since inception to $442.5 million.

The raise is quite possibly the largest investment in the supply chain visibility space to date.

Project44 is one of those refreshingly transparent private companies that gives insight into its financials. This month, the company says it crossed $50 million in annual recurring revenue (ARR), which is up 100% year over year. It has more than 600 customers, including some of the world’s largest brands such as Amazon, Walmart, Nestlé, Starbucks, Unilever, Lenovo and P&G. Customers hail from a variety of industries, including CPG, retail, e-commerce, manufacturing, pharma and chemical.

Over the last year, the pandemic created a number of supply chain disruptions, underscoring the importance of technologies that help provide visibility into supply chain operations. Project44 said it worked hard to help customers mitigate “relentless volatility, bottlenecks, and logistics breakdowns,” including during the Suez Canal incident where a cargo ship got stuck for days.

Looking ahead, project44 plans to use its new capital in part to continue its global expansion. Project44 recently announced its expansion into China and has plans to grow in the Asia-Pacific, Australia/New Zealand and Latin American markets, according to Duboe.

We are also going to continue to invest heavily in our carrier products to enable more participation and engagement from the transportation community that desires a stronger digital experience to improve efficiency and experience for their customers,” he told TechCrunch. The company also aims to expand its artificial intelligence (AI) and data science capabilities and broaden sales and marketing reach globally.

Last week, project44 announced its acquisition of ClearMetal, a San Francisco-based supply chain planning software company that focuses on international freight visibility, predictive planning and overall customer experience. With the buy, Duboe said project44 will now have two contracts with Amazon: road and ocean. 

“Project44 will power what they are chasing,” he added.

And in March, the company also acquired Ocean Insights to expand its ocean offerings.

Will Chen, a managing director of Goldman Sachs Asset Management, believes that project44 is unique in its scope of network coverage across geographies and modes of transport.  

“Most competitors predominantly focus on over-the-road visibility and primarily serve one region, whereas project44 is a truly global business that provides end-to-end visibility across their customers’ entire supply chain,” he said.

Goldman Sachs Asset Management, noted project44 CEO and founder Jett McCandless, will help the company grow not only by providing capital but through its network and resources.

SpotOn raises $125M in a16z-led Series D, triples valuation to $1.875B

Certain industries were hit harder by the COVID-19 pandemic than others, especially in its early days.

Small businesses, including retailers and restaurants, were negatively impacted by lockdowns and the resulting closures. They had to adapt quickly to survive. If they didn’t use much technology before, they were suddenly being forced to, as so many things shifted to digital last year in response to the COVID-19 pandemic. For companies like SpotOn, it was a pivotal moment. 

The startup, which provides software and payments for restaurants and SMBs, had to step up to help the businesses it serves. Not only for their sake, but its own.

“We really took a hard look at what was happening to our clients. And we realized we needed to pivot, just to be able to support them,” co-CEO and co-founder Matt Hyman recalls. “We had to make a decision because our revenues also were taking a big hit, just like our clients were. Rather than lay off staff or require salary deductions, we stayed true to our core values and just kept plugging away.”

All that “plugging away” has paid off. Today, SpotOn announced it has achieved unicorn status with a $125 million Series D funding round led by Andreessen Horowitz (a16z).

Existing backers DST Global, 01 Advisors, Dragoneer Investment Group and Franklin Templeton also participated in the financing, in addition to new investor Mubadala Investment Company. 

Notably, the round triples the company’s valuation to $1.875 billion compared to its $625 million valuation at the time of its Series C raise last September. It also marks San Francisco-based SpotOn’s third funding event since March 2020, and brings the startup’s total funding to $328 million since its 2017 inception.

Its efforts have also led to impressive growth for the company, which has seen its revenue triple since February 2020, according to Hyman.

Put simply, 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 (POS) 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.

When the pandemic hit, SpotOn ramped up and rolled out 400 “new product innovations,” Hyman said. It also did things like waive $1.5 million in fees (it’s a SaaS business, so for several months it waived its monthly fee, for example, for its integrated restaurant management system). It also acquired a company, SeatNinja, so that it could expand its offering.

“Because a lot of these businesses had to go digital literally overnight, we built a free website for them all,” Hyman said. SpotOn also did things like offer commission-free online ordering for restaurants and helped retail merchants update their websites for e-commerce. “Obviously these businesses were resilient,” Hyman said. “But such efforts also created a lot of loyalty.” 

Today, more than 30,000 businesses use SpotOn’s platform, according to Hyman, with nearly 8,000 of those signing on this year. The company expects that number to triple by year’s end.

Currently, its customers are split about 60% retail and 40% restaurants, but the restaurant side of its business is growing rapidly, according to Hyman.

The reason for that, the company believes, is while restaurants initially rushed to add online ordering for delivery or curbside pickup, they soon realized they “wanted a more affordable and more integrated solution.”

Image Credits: SpotOn co-founders Zach Hyman, Doron Friedman and Matt Hyman / SpotOn

What makes SpotOn so appealing to its customers, Hyman said, is the fact that it offers an integrated platform so that businesses that use it can save “thousands of dollars” in payments and software fees to multiple, “à la carte” vendors. But it also can integrate with other platforms if needed.

In addition to growing its customer base and revenue, SpotOn has also boosted its headcount to about 1,250 employees (from 850 in March of 2020). Those employees are spread across its offices in San Francisco, Chicago, Detroit, Denver, Mexico City, Mexico and Krakow, Poland.

SpotOn is not currently profitable, which Hyman says is “by choice.”

“We could be cash flow positive technically whenever we choose to be. Right now we’re just so focused on product innovation and talent to exceed the needs of our clients,” he said. “We chose the capital plan so that we could really just double down on what’s working so well.”

The new capital will go toward further accelerating product development and expanding its market presence.

“We’re doubling down on our single integrated restaurant management system,” Hyman said. 

The raise marks the first time that a16z has put money in the startup, although General Partner David George told TechCrunch he was familiar with co-founders Matt Hyman and Zach Hyman through mutual friends.

George estimates that about 80% of restaurants and SMBs use legacy solutions “that are clunky and outdated, and not very customer friendly.” The COVID-19 pandemic has led to more of these businesses seeking digital options.

“We think we’re in the very early days in the transition [to digital], and the opportunity is massive,” he told TechCrunch. “We believe we’re at the tipping point of a big tech replacement cycle for restaurant and small business software, and at the very early stages of this transition to modern cloud-native solutions.”

George was also effusive in his praise for how SpotOn has executed over the past 14 months.

“There are companies that build great products, and companies that can build great sales teams. And there are companies that offer really great customer service,” he said. “It’s rare that you find two of those and extremely rare to find all three of those as we have in SpotOn.”

How Expensify shed Silicon Valley arrogance to realize its global ambitions

Expensify may be the most ambitious software company ever to mostly abandon the Bay Area as the center of its operations.

Expensify may be the most ambitious software company ever to mostly abandon the Bay Area as the center of its operations.

The startup’s history is tied to places representative of San Francisco: The founding team worked out of Peet’s Coffee on Mission Street for a few months, then crashed at a penthouse lounge near the 4th and King Caltrain station, followed by a tiny office and then a slightly bigger one in the Flatiron building near Market Street.

Thirteen years later, Expensify still has an office a few blocks away on Kearny Street, but it’s no longer a San Francisco company or even a Silicon Valley firm. The company is truly global with employees across the world — and it did that before COVID-19 made remote working cool.

“Things got so much better when we stopped viewing ourselves as a Silicon Valley company. We basically said, no, we’re just a global company,” CEO David Barrett told TechCrunch. That globalism led to it opening a major office in — of all places —a small town in rural Michigan. That Ironwood expansion would eventually lead to a cultural makeover that would see the company broadly abandon its focus on the Bay Area, expanding from a headquarters in Portland to offices around the globe.

It makes sense that a company founded by internet pirates would let its workforce live anywhere they please and however they want to. Yet, how does it manage to make it all work well enough to reach $100 million in annual revenue with just a tad more than 100 employees?

As I described in Part 2 of this EC-1, that staffing efficiency is partly due to its culture and who it hires. It’s also because it has attracted top talent from across the world by giving them benefits like the option to work remotely all year as well as paying SF-level salaries even to those not based in the tech hub. It’s also got annual fully paid month-long “workcations” for every employee, their partner and kids.

Yet the real story is how a company can become untethered from its original geography, willing to adapt to new places and new cultures, and ultimately, give up the past while building the future.

Canvas lands $20M so tech’s biggest companies can find diverse talent

Ben Herman and Adam Gefkovicz launched Jumpstart in 2017 with a clear mission: to make the world more equitable via a more fair and balanced hiring process.

The company released its “Diversity Recruitment Platform” in July of 2018 with the aim of helping people earlier in their careers get a “jumpstart” via technology.

Over the years, the startup’s mission has evolved beyond helping college grads to helping all employees — regardless of career stage — get a fair shot at jobs. And it’s doing that by teaming up with hundreds of companies — such as Airbnb, Bloomberg, Coinbase, Samsung, Lyft, Pinterest, Plaid, Roblox, Audible, Headspace and Stripe — to help them hire a more diverse pool of candidates.

Demand has accelerated exponentially, and the San Francisco-based startup saw its revenue grow “3x” in 2020 compared to 2019, although execs declined to provide hard figures. Considering its broadened focus, Jumpstart has rebranded to Canvas and announced today that it has closed on $20 million in funding. Early Stripe employee and angel investor Lachy Groom and Sequoia Capital co-led the round, which included participation from Four Rivers Capital. The raise brings Canvas’ total raised to $32.5 million.

“We knew we were only scratching the surface of our vision, and knew we had a solution that could reimagine diversity hiring for everyone,” said co-founder and CEO Ben Herman. “You know how everyone has a CRM? We believe every company should have a DRP, which is a diversity recruitment platform. That’s the category we want to create and we want to be the largest in that space.”

No doubt that the Black Lives Matter movement in the aftermath of George Floyd’s murder helped, well jumpstart, the company’s efforts. Canvas is able to sell its offering as more companies “are being held accountable for their promises of equity and hiring diverse talent,” Herman said.

“Hiring diverse teams is not only a matter of corporate social responsibility,” he added. “Diversity and inclusion are a competitive advantage and strategic priority for every company in today’s landscape. We believe representation is a huge part of what we stand for. So we want everyone to be able to create their own canvas, and to be able to paint their own picture.”

Canvas describes its SaaS offering as a “fully virtual” recruiting platform that is based on self-reported data. About 87% of candidates on its platform disclose their demographic information (which it says is 7x the industry standard), according to the startup. Canvas also says it gives companies the ability to narrow down the priority groups and talent it wants to focus on by filtering over 75+ self-reported candidate data points.

The startup claims that it’s different from others in the space for that reason, among other features.

“Unlike other solutions that might utilize inferred data that could be inaccurate or illegal, Canvas helps create a more accurate data set to identify diverse candidates, helping to solve the core problem of talent discovery,” Herman said. 

It also — unlike some diversity hiring platforms — does not rely on artificial intelligence, a fact that Herman is actually proud of.

“We don’t believe that AI is the future. It’s not about getting someone’s gender or ethnicity based off of their name, or to inform the hiring decision without candidates knowing,” Herman told TechCrunch. “It’s all about how to empower talent to self-identify…We want to enable the talent to own their data, and truly be able to represent themselves in unique ways. That’s not leveraging AI.”

Canvas also gives companies a way to design, promote and run events, such as webinars, aimed at hiring diverse talent.

The startup also wants to get to a place where companies are working together “to complete the diversity data gap.”

“The problem is about accessibility, and so we want to give equal access to anyone and everyone — from all companies to all candidates,” Herman said. “And so that is really the most important part of what we are creating — the ability for companies to share data.”

So, how does it measure its own success? Canvas claims that 56% of all hires on the Canvas platform are made from underrepresented groups (URGs), and that it helps employers achieve a 30% reduction in time to hire.

Herman is not your typical startup founder, having dropped out of high school and starting his own recruitment agency at the age of 21. His tenacity is one of the things that attracted Sequoia partner and Canvas board member Mike Vernal to back the company.

“When we first met Ben, it was clear that he was…a natural-born talent scout,” Vernal told TechCrunch. “He thought there was a better way for the industry to work — one where companies and recruiters were more collaborative and used technology to build stronger, more diverse teams.”

Since its initial investment in the company, Vernal believes building diverse teams has never been more important.

“Those teams create better products, make stronger business decisions, and it’s just the right thing to do,” he said. “We believe companies can do a better job sourcing underrepresented talent using Canvas than on their own.” 

Canvas plans to use its new capital to expand the product into other industries and verticals beyond technology and continue to address the recruiting process for later stages of people’s careers. The company currently has 70 employees and expects to have 100 by the end of 2021.

As mentioned above, hiring diverse talent is becoming a bigger priority for big tech companies (such as HP) and startups alike. Earlier this year, diverse hiring startup SeekOut raised $65 million. The company has built out a database with hundreds of millions of profiles using its AI-powered talent search engine and “deep interactive analytics.”

Affirm spinout Resolve raises $60M for its B2B ‘buy now, pay later’ platform

Buy now, pay later is everywhere these days, mostly focused on the consumer.

Resolve — a San Francisco-based startup in the space specializing in “buy now, pay later” capabilities for B2B transactions — announced today that it has raised $60 million in funding. Initialized Capital led the round — the company’s first funding since its 2019 inception. KSD Capital, Haystack VC, Commerce Ventures, Clocktower Ventures and others also participated.

The funding is a combination of equity and asset funding according to co-founder and CEO Chris Tsai, although he declined to reveal the breakdown.

Since launching as a spinout from Affirm in 2019, Resolve says it has seen “overwhelming” demand for its B2B buy now, pay later (BNPL) billing offering for business purchases. Notably, the two companies refer business to each other. Tsai describes Affirm founder Max Levchin as a “friend” with whom he has been working in a variety of capacities since 2012. (He’s also reportedly an investor in the company.)

Unlike Affirm — which is more focused on the consumer — Resolve is exclusively focused on business-to-business billing by automating the process of billing and purchasing on credit. What it’s doing is basically allowing businesses to defer payments digitally and on better terms than what they’ve seen historically via an automated underwriting process, the company claims. This, it says, can lead to faster invoice payment and thus, improved cash flow. 

The company also claims it can offer extended payment terms with buyers not having to pay any interest or fees if accounts are repaid within the agreed-upon terms. Meanwhile, merchants receive full payment (minus any fees) as soon as an order is placed. 

Resolve offers businesses loan terms ranging from 30 to 90 days and gives them more control of their billing and cash flow, according to Tsai. While he declined to give specifics around any growth metrics, he said the company has seen a “significant and meaningful” uptick in growth in the wake of the COVID-19 pandemic because of so many businesses’ shift to digital e-commerce. For example, one of its customers is a bike merchant that had to expand into online selling in the wake of the pandemic.

“This is not a new transaction type, but being able to do it in this new digital or e-commerce way of buy now, pay later, like Affirm — that’s very new and in fact it’s still very much not the norm yet,” he told TechCrunch. “But we’re finding, especially post-pandemic, incredible demand for switching to more digital e-commerce payment formats.”

Image Credits: Resolve

Among Resolve’s features is a “Smart Credit Engine,” which the company says creates a direct sync with a merchant’s real-time data feed of past payment histories to allow for “immediate” credit line decisioning with no input required from buyers.

Its embedded bill payment portal gives its B2B customers a way to pay vendor bills “while building their business credit history” bureaus, the company says.

“Digital and e-commerce transformation is coming for B2B payments,” Tsai said. “Growing companies must balance heightened demand for deferring payments from their business customers with their own limited capacities to satisfy that demand.”

The embedded nature of Resolve’s platform gives it an edge, Tsai believes, in that it integrates into a company’s existing financial tech stack. The benefit to the business, he said, is increased growth and sales revenue as well as optimized cash flow “while removing risk for the company.”

Initialized Capital General Partner Alda Leu Dennis said she was familiar with Tsai and co-founder Brian Nguyen since their days at Celery, their prior startup. She views them as experienced and determined.

We also have conviction around the clear market need for digitizing net terms for small businesses that are increasingly moving their ordering online,” she said.

In her view, Resolve’s unique differentiation is that it provides software that solves net terms billing complexity. 

“Businesses desperately need to manage their B2B billing operations, from helping them gauge the strength of their customers to chasing down payments,” she told TechCrunch. “Their [Resolve’s] approach of accelerating payments and collections via software and offering payment terms as an ancillary service is a powerful pairing; it provides an easy yet comprehensive way for merchants to improve their entire system of managing receivables and billing on credit.”

The San Francisco startup is using the money primarily to grow its embedded billing platform.

“We’re doing a lot of work to scale the platform. So we’re investing heavily in products and the customer sides of the business, given all the demand that we’ve seen,” Tsai said. “The operations software that we’ve built is very seamless for our customers, but there’s a lot going on in the background that we have to do to reduce the complexity for our customers.”

Flush with $42M, hot AI startup Faculty plans to hoover-up more PhDs… and steer clear of politics

In the wake of the news that UK-based AI startup Faculty has raised $42.5 million in a growth funding round, I teased out more from CEO and co-founder Marc Warner on what his plans are for the company.

Faculty seems to have an uncanny knack of winning UK government contracts, after helping Boris Johnson win his Vote Leave campaign and thus become Prime Minister. It’s even helping sort out the mess that Brexit has subsequently made of the fishing industry, problems with the NHS, and telling global corporates like Red Bull and Virgin Media what to suggest to their customers. Meanwhile, it continues to hoover up Ph.D. graduates at a rate of knots to work on its AI platform.

But, speaking to me over a call, Warner said the company no longer has plans to enter the political sphere again: “Never again. It’s very controversial. I don’t want to make out that I think politics is unethical. Trying to make the world better, in whatever dimension you can, is a good thing … But from our perspective, it was, you know, ‘noisy,’ and our goal as an organization is, despite current appearances to the contrary, is not to spend tonnes of time talking about this stuff. We do believe this is an important technology that should be out there and should be in a broader set of hands than just the tech giants, who are already very good at it.”

On the investment, he said: “Fundamentally, the money is about doubling down on the UK first and then international expansion. Over the last seven years or so we have learned what it takes to do important AI, impactful AI, at scale. And we just don’t think that there’s actually much of it out there. Customers are rightly sometimes a bit skeptical, as there’s been hype around this stuff for years and years. We figured out a bunch of the real-world applications that go into making this work so that it actually delivers the value. And so, ultimately, the money is really just about being able to build out all of the pieces to do that incredibly well for our customers.”

He said Faculty would be staying firmly HQ’d in the UK to take advantage of the UK’s talent pool: “The UK is a wonderful place to do AI. It’s got brilliant universities, a very dynamic startup scene. It’s actually more diverse than San Francisco. There’s government, there’s finance, there are corporates, there’s less competition from the tech giants. There’s a bit more of a heterogeneous ecosystem. There’s no sense in which we’re thinking, ‘Right, that’s it, we’re up and out!’. We love working here, we want to make things better. We’ve put an enormous amount of effort into trying to help organizations like the government and the NHS, but also a bunch of UK corporates in trying to embrace this technology, so that’s still going to be a terrifically important part of our business.”

That said, Faculty plans to expand abroad: “We’re going to start looking further afield as well, and take all of the lessons we’ve learned to the US, and then later Europe.”

But does he think this funding round will help it get ahead of other potential rivals in the space? “We tend not to think too much in terms of rivals,” he says. “The next 20 years are going to be about building intelligence into the software that already exists. If you look at the global market cap of the software businesses out there, that’s enormous. If you start adding intelligence to that, the scale of the market is so large that it’s much more important to us that we can take this incredibly important technology and deploy it safely in ways that actually improve people’s lives. It could be making products cheaper or helping organizations make their services more efficient.”

If that’s the case then does Faculty have any kind of ethics panel overseeing its work? “We have an internal ethics panel. We have a set of principles and if we think a project might violate those principles, it gets referred to that ethics panel. It’s randomly selected from across faculty. So we’re quite careful about the projects that we work on and don’t. But to be honest, the vast majority of stuff that’s going on is very vanilla. They are just clearly ‘good for the world’ projects. The vast majority of our work is doing good work for corporate clients to help them make their businesses that bit more efficient.”

I pressed him to expand on this issue of ethics and the potential for bias. He says Faculty “builds safety in from a start. Oddly enough, the reason I first got interested in AI was reading Nick Bostrom’s work about superintelligence and the importance of AI safety. And so from the very, very first fellowship [Faculty AI researchers are called Fellows] all the way back in 2014, we’ve taught the fellows about AI safety. Over time, as soon as we were able, we started contributing to the research field. So, we’ve published papers in all of the biggest computer science conferences Neurips, ICM, ICLR, on the topic of AI safety. How to make algorithms fair, private, robust and explainable. So these are a set of problems that we care a great deal about. And, I think, are generally ‘underdone’ in the wider ecosystem. Ultimately, there shouldn’t be a separation between performance and safety. There is a bit of a tendency in other companies to say, ‘Well, you can either have performance, or you can have safety.’ But of course, we know that’s not true. The cars today are faster and safer than the Model T Ford. So it’s a sort of a false dichotomy. We’ve invested a bunch of effort in both those capabilities, so we obviously want to be able to create a wonderful performance for the task at hand, but also to ensure that the algorithms are fair, private, robust and explainable wherever required.”

That also means, he says, that AI might not always be the ‘bogeyman’ the phrase implies: “In some cases, it’s probably not a huge deal if you’re deciding whether to put a red jumper or a blue jumper at the top of your website. There are probably not huge ethical implications in that. But in other circumstances, of course, it’s critically important that the algorithms are safe and are known to be safe and are trusted by both the users and anyone else who encounters them. In a medical context, obviously, they need to be trusted by the doctors and the patients need to make sure they actually work. So we’re really at the forefront of deploying that stuff.”

Last year the Guardian reported that Faculty had won seven government contracts in 18 months. To what does he attribute this success? “Well, I mean, we lost an enormous number more! We are a tiny supplier to government. We do our best to do work that is valuable to them. We’ve worked for many many years with people at the home office,” he tells me.

“Without wanting to go into too much detail, that 18 months stretches over multiple Prime Ministers. I was appointed to the AI Council under Theresa May. Any sort of insinuations on this are just obviously nonsense. But, at least historically, most of our work was in the private sector and that continues to be critically important for us as an organization. Over the last year, we’ve tried to step up and do our bit wherever we could for the public sector. It’s facing such a big, difficult situation around COVID, and we’re very proud of the things we’ve managed to accomplish with the NHS and the impact that we had on the decisions that senior people were able to undertake.”

Returning to the issue of politics I asked him if he thought – in the wake of events such as Brexit and the election of Donald Trump, which were both affected by AI-driven political campaigning – AI is too dangerous to be applied to that arena? He laughed: “It’s a funny old funny question… It’s a really odd way to phrase a question. AI is just a technology. Fundamentally, AI is just maths.”

I asked him if he thought the application of AI in politics had had an outsized or undue influence, on the way that political parties have operated in the last few years: “I’m afraid that is beyond my knowledge,” he says. But does Faculty have regrets about working in the political sphere?

“I think we’re just focused on our work. It’s not that we have strong feelings, either way, it’s just that from our perspective, it’s much, much more interesting to be able to do the things that we care about, which is deploying AI in the real world. It’s a bit of a boring answer! But it is truly how we feel. It’s much more about doing the things we think are important, rather than judging what everyone else is doing.”

Lastly, we touched on the data science capabilities of the UK and what the new fund-raising will allow the company to do.

He said: “We started an education program. We have roughly 10% of the UK’s PhDs in physics, maths, engineering, applying to the program. Roughly 400 or so people have been through that program and we plan to expand that further so that more and more people get the opportunity to start a career in data science. And then inside Faculty specifically, we think we’ll be able to create 400 new jobs in areas like software engineering, data science, product management. These are very exciting new possibilities for people to really become part of the technology revolution. I think there’s going to be a wonderful like new energy in Faculty, and hopefully a positive small part in increasing the UK tech ecosystem.”

Warner comes across as sincere in his thoughts about the future of AI and is clearly enthusiastic about where Faculty can take the whole field next, both philosophically and practically. Will Faculty soon be challenging that other AI leviathan, DeepMind, for access to all those Ph.D.s? There’s no doubt it will.

British AI startup Faculty raises $42.5M growth round led by Apax Digital Fund

British artificial intelligence (AI) company, Faculty has raised £30 million ($42.5M) in growth funding from the Apax Digital Fund (ADF). The startup has now raised a total of £40m ($56.6M) to date.

In April this year, the company announced it had won a contract to work with the UK’s NHS to better predict its future needs. It has also picked up at least seven other UK government contracts. Its customers include the UK’s National Crime Agency, Red Bull, Virgin Media, and Moonpig.

The company says it now expects to create over 400 new jobs across its engineering, product and delivery teams. The investment will also be put toward the rollout of Faculty’s new learning and development programme. Founded in 2014 by Dr Marc Warner, Dr Angie Ma and Andrew Brookes, the company is noted for its fondness for hiring swathes of maths and data science PhDs.

Far from being an aloof R&D AI operation, Faculty pitches more as an “AI as a Service”, applying its platform to real-world data for the purposes of real-world outcomes, such as optimizing a company’s marketing spend or forecasting demand for consumer goods. That said, Faculty became briefly notorious after applying its platform to the cause of Vote Leave during the UK referendum.

After helping the campaign win that fight, it’s ironically now been awarded a public contract to help the British government apply machine learning to Britain’s post-Brexit fishing waters, even as the fishing industry comes under considerable strain… because of Brexit.

Speaking to me over a call Marc Warner, CEO and co-founder of Faculty told me: “This is about doubling down on the UK first and then international expansion. We have learned what it takes to do important, impactful AI at scale. And we just don’t think that there’s actually much of it out there. Customers are rightly sometimes a bit skeptical. There’s been hype around this stuff for years and years. We figured out a bunch of real-world applications that actually deliver value. And so, ultimately, the money [we’ve raised] is really just about being able to build out all of the pieces to do that incredibly well for our customers.”

He added that Faculty plans to continue to take advantage of the UK’s talent pool: “The UK is a wonderful place to do AI. It has brilliant universities and a very dynamic startup scene. It’s actually more diverse than San Francisco. There’s government, there’s finance, there’s corporates, there’s less competition from the tech giants, so there’s a bit more of a heterogeneous ecosystem.”

Mark Beith, partner at Apax Digital, who joins Faculty’s board of directors, said: “Faculty is a world-leading AI company with cutting-edge technology, inspiring people and culture, and with phenomenal customer feedback. They enable customers to realize the tremendous value of AI quickly but responsibly, providing robust, fair, and explainable AI, with advanced data privacy. We have seen the power and impact of their solutions first-hand, as a client, and are thrilled to partner with Marc, Angie, Andy, and the team to support their global expansion.”

The Apax Digital Fund joins Faculty’s existing investors, including Guardian Media Group Ventures, LocalGlobe, and Jaan Tallinn, one of Skype’s founding engineers.

The Estonian investor gave Faculty 350 units of Ether in January 2018, worth about $434,000 at the time, and 50 Bitcoins in March 2020, worth about $316,000, according to Faculty’s financial filings at the U.K. business registry Companies House.

Eano’s Stella Wu is not your typical construction tech startup founder

Renovating a home is an exciting, yet often fraught-filled, endeavor.

One startup that aims to help make the process simpler, cheaper and less stressful by helping people manage the home renovation process has raised $6 million to help it grow even faster. Builders VC led the round, which included participation from Celtic, Newfund and Wish co-founder Danny Zhang, who also sits on Eano’s board.

Stella Wu, who formerly worked as a growth product manager at Wish, got firsthand experience of the pain points related to the process when she bought her own house in 2017.

“I realized there were a lot of fragmented issues in the renovation space, especially when it came to the individual workers,” she recalls. “They were not reliable and bad at communication.”

So in 2019 she founded Eano, a San Francisco-based startup that aims to walk a homeowner through a renovation and help connect individual contractors with new clients. Eano also works on projects like building ADUs (accessory dwelling units).

As more people spent time at home last year due to the COVID-19 pandemic, the startup saw its contract revenue spike by 5x, Wu says. And in the first quarter of this year, business was up 70% year over year.

Image Credits: Eano CEO and founder Stella Wu / Eano

Eano, she said, offers competitive and transparent pricing so that homeowners aren’t surprised as a remodeling project goes on. Its automated process tracks all communications and progress in one place and the company has grown what it describes as a “network of experienced, local professionals” that are fully licensed, vetted and insured that it pairs homeowners with on projects.

“There’s all these individual contractors out there and even though they are very affordable, it’s very hard for them to get to the homeowners, as they don’t have much resources,” Wu, a Chinese immigrant, told TechCrunch. “So they come to us and we basically take care of it all.” For now, Eano is operating in the Bay Area and Los Angeles, with plans to expand to Seattle and Houston this year.

The company plans to take its new capital and “go deep into the product side.”

Once they become a client, homeowners can use Eano to select a certain remodeling package, and then they can check the project progress, communicate with the team and even see the progress through videos.

“We’re also helping contractors make communicating and receiving payment much easier,” Wu said. “We’re also helping these individual contractors increase the brand, and helping them with the administration and customer support side with our software.”

Jim Kim of Builders VC, said he first encountered Wu and Jung while they were at Wish.

“We invest in people, and when you can find extremely talented entrepreneurs who have built successful companies and still have the hunger to win, you jump in with a blank check,” he said. “We love Eano’s mission — combining a similar product sourcing strategy as Wish with technology to bring a better experience to all constituents in the antiquated construction industry.”

Kim is also impressed by the fact that Wu is driven to prove “that you don’t need to be a 55-year-old man wearing steel-toed boots to have a meaningful impact on construction.”

“We love that ethos — it matches with our thinking about backing entrepreneurs who don’t fit into the stereotypical box,” Kim said.

Ex-Square execs launch Found to help the self-employed, raise $12.75M from Sequoia

If you’ve ever been self-employed you know what a pain it is to keep up with the hassles of running a business. From bookkeeping to invoicing to paying taxes — it’s one big headache.

Freelancers and self-employed people often turn to a number of different solutions to try and address different aspects of running their business. It can be a lot to keep up with.

Enter Found. Previously called Indie, the startup was founded by two former Square execs who got firsthand insight into how SMBs paid their employees.

Lauren Myrick joined Square in 2010 and was the second project manager at the company. She helped launch its first POS (point-of-sale) product and its SaaS products. She eventually became GM of its payroll business unit, and that was her first foray into taxes and understanding their implication. Co-founder Connor Dunn ran engineering for Square Payroll.

After that experience, the pair saw an opportunity to launch a suite of services for self-employed businesses, which have been growing even faster during COVID.

“We started to pay attention to the movement toward self-employment,” Myrick told TechCrunch.

So in 2019, the pair interviewed “lots” of self-employed people to better understand their pain points. What they found is that taxes and expense tracking were considered among the more painful and expensive parts of being self-employed. So they formed Found (formerly called Indie) with the goal of creating a “one-stop shop” for business banking, bookkeeping and taxes for self-employed businesses.

And today, the San Francisco-based startup has raised $12.75 million in a round led by Sequoia that also included participation from some angel investors.

Image Credits: Found co-founders Lauren Myrick and Connor Dunn / Found

Myrick is no stranger to being self-employed herself, having worked as a public accountant after college. Also, her sister is a self-employed yoga instructor.

In Found, Myrick’s two previous professional worlds have come together. 

“With my accounting background and what I learned at Square, I had this big aha moment that we could become a ledger for these businesses, and solve their bookkeeping and tax needs through software,” she said. “So that’s what we’ve built.”

Customers can use the platform to do things like deposit business income, obtain a debit card for business purchases and calculate how much they owe in taxes. The platform also offers a feature that sets aside the money for, and facilitates, the quarterly tax payments, for example. It also offers real-time business and tax reports, so when a business owner swipes their card, expenses are reflected in real time.

Sequoia’s Josephine Chen and Alfred Lin said they were impressed with Myrick from their first call with her.

“Lauren has incredible context and command of the details. She talked about the hoops self-employed people have to jump through to fill out their Schedule Cs; she explained some of the finer points of different tax codes — and we were riveted,” the pair say.

Lin said he was particularly intrigued by the concept of Found because while he was in graduate school he ran a small data analysis business on the side.

“I had to invoice, report on taxes and do my own bookkeeping,” he recalls. “And I kept it together with a spreadsheet. I thought to myself that there should be better tools to do some of this stuff. And that is what Lauren has done with Found.”