Welcome to this week’s newsletter! There’s a bunch of great stuff coming down the pipeline in the weeks ahead.
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Future Funding Rounds 🔮
Wingly, a Paris, France-based flight sharing platform, has begun talks for a Series A and is very likely to close out the round by the end of the year. To date, the company has raised a total of €2.5M (a €500K pre-seed round in March 2016 and a €2m seed round in December 2018). The company raised its last round in 7 months and knew the lead investor for approximately 2 months prior. There’s a high probability that existing investors will participate in the upcoming round. Existing investors won’t lead the Series A; an ideal investor would “know marketplaces mechanisms well.” The round is likely to be a combination of equity and debt.
Tonit, a Kelowna, British Columbia-based social network for motorcyclists, plans on running a Series A round from June to August and will look to raise $4m (CAD). To date, the company has raised $760k. Capital raised would be used for growth and operations. Tonit has two main competitors: Eat Sleep Ride and Rever.
Recent Startup Funding Announcements 💰
EyeLevel.ai raised its recent $2M seed round at a $6M pre-money valuation ($8M post-money). The company took 4 months to raise the round, spoke with approximately 80 prospective investors during that time, and received 3 term sheets.
Evisort took approximately 3 months to raise its recent $4.5M seed round. The round’s two lead investors, Village Global and Amity Ventures, both invested in Evisort’s previous round.
Casavo took around 3 months to raise its recent $7.9M equity round. The company spoke with 70 potential investors and received 1 term sheet. Casavo got in touch with Project A, the lead investor, during the course of raising the round, but a connection through its pre-seed investor, Picus Capital. To date, Casavo has a total of approximately €21M, of which, €8.9M is equity, and the remaining amount debt. Comparable companies include Tiko and Prontopiso in Spain, Homeloop in France and Kodit in Finland.
Avinew’s CEO knew Rick Smith at Crosscut for about a year prior to the close of the company’s recent $5M seed round. Other startups disrupting the auto insurance space include Metromile, Root, and Clearcover.
Netography raised its recent $2M seed round from Andreessen Horowitz in about 2 months. The company knew the partner at Andreessen Horowitz for several years prior to the investment.
#AI #Maketing #SanFrancisco
EyeLevel.ai (Ryan Begley – Co-Founder, Product, Marketing, Ecosystem)
EyeLevel.ai, a San Francisco–based conversational marketing platform provider for brands, raise a $2M seed round earlier this month.
Recommended productivity hack/rule to live by: We have daily standups; we're semi-distributed so it helps to keep everyone aligned. We meet once a quarter in person and utilize Basecamp to organize all our todos and projects.
Recommended book: Any book by Robert Sapolski but specifically Why Zebras Don't Get Ulsurs. A great book that has some very deep insights on stress and anxiety in humans and it really helped me rethink my approach to work.
Thoughts on work-life balance: I don't believe in work-life balance. I believe in life-balance. Work is in fact part of my life, I enjoy what I do, I don't ascribe to the concept that one needs to keep work and life balanced. Sometimes I work a lot, sometimes I work much less. I approach my life-balance by tending to those things that are important to me, make me happy and things that I am responsible for.
How long did the round take to close: 4 months.
What capital will be used for: Hiring, paying the founding team, legal, contractors, a little marketing.
Comment of valuation after the round: $6M pre-money, $8M post-money.
Number of investor conversations and terms sheets: We spoke with over 80 and received 3 term sheets.
Seems as though the process of raising money isn’t efficient. Your thoughts: Yes there could be, everything can be made more efficient.
Length of relationship with lead investor: 4 months.
Total amount raised to date: $2.1M.
Competitive landscape: It's tough to say. As a seed stage company we're not in a competitive space. Ultimately Facebook or Google or Amazon will compete with us.
Macro trends: Voice and natural language are going to experience a 15 year boom. We are at the very beginning of it and plan to ride that wave to the top.
Evisort (Jerry Ting – CEO and co-founder)
Evisort, a San Carlos, California-based artificial intelligence contract management company servicing customers, raised $4.5M in a seed round earlier this month.
Recommended productivity hack/rule to live by: Know where you want to go so you can know how to get there. I learned this while running our product and engineering team because if we don’t have a clear product roadmap of where we think we should go, then we risk scope creep and building tools that may solve temporary problems for clients but will be less relevant in the long run.
Recommended book: “The Monk and the Riddle” by Keny Lineback. I read this while deciding between taking a corporate job and building Evisort. It helps keep the journey in perspective.
Thoughts on work-life balance: Work-life balance is important to avoid burnout, which hurts our company and employees in the long run. I base my work on results instead of time. If we have a large client deliverable coming up, our team rallies around the project. It’s the team mentality that makes our work feel more like a community than just a 9-to-5 job.
How long did the round take to close: We spent about 3 months in raising the round.
What capital will be used for: We’re using the capital to further develop and accelerate our AI capabilities, including launching a new automated review solution for contract negotiations (planned for release in the second quarter of 2019).
Seems as though the process of raising money isn’t efficient. Your thoughts: Running a clear process is essential. I have friends who talk to venture capitalists (VCs) one-by-one. As a result, there’s no urgency in the process for VCs to decide if they like the deal enough to offer a term sheet. We learned early on that if you have a good company that’s ready to raise funds, taking meetings with multiple VCs in a defined period and leaving two months for due diligence will help drive the process.
Length of relationship with lead investor: Our two lead investors were both a part of our previous round; one was also on our board so we had been working with him for a year before he doubled down on his investment.
Total amount raised to date: $4.5M.
Competitive landscape: There are a couple of different legacy industries that we’re entering into where our AI-first tool will drive significant disruption. We see the cloud-based storage providers and existing contract management systems as existing players that clients may be choosing from.
Macro trends: There’s a broad need for automating all types of contract management — from approving sales contracts to managing documents across legal, procurement, operations, and finance teams. Many companies remain reliant on manual, expensive processes to track business-critical information, leading to workflow inefficiencies and inaccurate record keeping that can result in losses worth billions. Businesses stand to lose up to 40 percent of a deal’s value due to ineffective contract governance.
We have an amazing team and state-of-the-art technology, which sets us apart. We speak with many organizations today (existing clients and prospects) who are actively looking for ways to automate contracting beyond legal functions. With Evisort, companies can use sophisticated AI to automate tedious contract work, track over 50 data points without training, and improve revenue and expenditures beyond what’s achievable with manual data entry and tracking. For example, instead of an attorney reviewing piles of legal documents, Evisort makes it possible to evaluate 30-page contracts in under six seconds, pulling out all the relevant legal and business terms.
Casavo (Giorgio Tinacci, CEO; Fausto Maglia, VP Marketing)
Casavo, a Milan, Italy-based online platform for instant buying in real estate, announced a $7.9M round earlier this month.
Recommended productivity hack/rule to live by: Prioritize things at all level based on business benefits for the whole company and make decisions based on facts/ data no matter the seniority of the team member who is proposing/ providing feedback on them.
Recommended book: The Theory of Economic Development, Joseph Schumpeter.
Thoughts on work-life balance: Difficult as a founder to have clear line between your personal life and the company you are building, what makes me happy in the end is the passion I put in my work and having an ultimate social goal through the business activity. I think that in any case a balance is important because it boosts your productivity at work, in the end a human being has a limited decision-making capability.
How long did the round take to close: We’ve been fundraising for around 3 months, from October to December 2018, when we signed our term sheet with Project A Ventures.
What capital will be used for: The fresh money will fuel our expansion in Italy: our goal is to serve the 6 main markets for Real Estate in Italy. Part of the money will also be deployed to bring the service abroad with the aim to become the leader platform for instant buying in Southern Europe, and we’re also working on new services.
Number of investor conversations and terms sheets: At different levels, we got in touch with around 70 potential investors. Project A’s term sheet is the only one we received, especially because we stopped looking for an investor after that.
Seems as though the process of raising money isn’t efficient. Your thoughts: I think that the process is structurally long due to the VC space investment strategy, still you can make it more efficient and push it to the lower boundary of that time span by: (i) prioritizing investors leads; (ii) plan logistics efficiently; (iii) front-load due diligence (both commercial and legal) efforts.
Length of relationship with lead investor: We got in touch during the process of raising funds for the Series A, but we had some connections thanks to Picus Capital, the fund which supported us at pre-seed stage.
Total amount raised to date: We’ve raised more than €21M so far – around €8.9M is equity. The additional amount is debt funding, which we need to fuel our efforts to buy and resell properties.
Competitive landscape: We’re the category creator and the only player at the moment in Italy applying this very business model with an industrial approach. There are some comparable companies in Europe, though, such as Tiko and Prontopiso in Spain, Homeloop in France and Kodit in Finland.
Macro trends: The Real Estate market becoming more liquid, i.e. shorter selling time and instantaneous pricing. Casavo contribution: acting as an iBuyer with the core business
A new concept of home ownership, i.e. a hybrid structure between rental and traditional ownership. Casavo contribution: providing alternative financing services to buyers.
A democratization of Real Estate investment, i.e. possible to invest in real estate and diversify small tickets. Casavo contribution: partnering with RE crowdfunding platforms
Technological enablement of the brokerage market, i.e. new digital flat-fee brokers emerging. Casavo contribution: partnering with brokers 4.0 beside traditional ones.
#InsurTech #California #AutonomousVehicles
Avinew (Dan Peate, Founder and CEO)
Avinew, a Westlake Village, California-based InsurTech company focused on autonomous and semi-autonomous auto insurance, raised a $5M seed round last month.
Recommended productivity hack/rule to live by: I’ve found that taking the time to think actually multiplies my time. Many people believe that you have to always be busy; that being booked from early in the morning to late at night, constantly moving from thing, to thing, to thing, means you are achieving a lot and doing a lot. For me, this doesn’t work. Overscheduling makes me less productive.
I‘ve found that by taking 30 to 60 minutes every day just to think, and to have some time to myself to plan, ends up multiplying my time for the rest of the day, helping me to be more effective.
Recommended book: Instead of a book, I’m going to recommend the movie “Peewee’s Big Adventure” What I love about the movie is that it reminds us that when a bad thing happens in our lives it actually disrupts the day-in day-out routine of life and allows us to go on an exciting journey. And, in this exciting journey, the negatives become positives and we grow significantly.
Thoughts on work-life balance: I’m still a work in progress when it comes to achieving the right amount of work-life balance, but I’ve become better at it over time.
I’m a father of seven children. When I was in my 20’s and my kids were little I’d work a lot, leaving before they woke up in the morning and getting home after they went to bed, so I’d never get to see them, let alone spend quality time with them, until the weekends. As they grew older I started to worry that this routine would have a negative impact on them. I love my children and want to be part of their lives.
What I’ve learned is that I have to make time for my family. What’s the point of working all the time to make a lot of money, if you don’t have a family to spend time with and share it with? I really make an effort to be there for them and show up at the events that are important to them. As a result of taking time to think and plan every day, I’ve been able to multiply the time I have for my family as well.
Additionally, technology today and the connectedness of the world we live in has actually helped my work-life balance. Now I can attend my kids’ hockey games and still be available to my teams, respond to emails and keep things moving.
How long did the round take to close: What I’ve come to learn as the CEO of a startup company is that a good percentage of my time has to be spent not just raising money, but building relationships that lead to partnerships and revenue opportunities. A good portion of my time is spent looking for outside partners, revenue opportunities, or investors. That said, we won’t take money for the sake of taking money. We are always looking to get the right partners that will help us grow our business.
What capital will be used for: We’ll be growing our engineering team.
Seems as though the process of raising money isn’t efficient. Your thoughts: If all that a founder is looking to do is raise money, then it’s easy to make it the most efficient, cold, calculating process possible. The problem is, it’s critical to find the right partners, not just raise money. Exchanging money is a transaction, partnerships are a relationship. It needs to be about more than just the money. It needs to be about finding the right people and organizations that will make great long-term partners that will help you grow the business and make it successful.
Length of relationship with lead investor: I knew Rick Smith at Crosscut for about a year before the firm invested.
Total amount raised to date: $5M.
Competitive landscape: At this point, nobody else specifically seems to be doing what we’re doing in terms of tracking the usage of the semi-autonomous features in a vehicle, but we know that there are other usage-based programs out there. It’s exciting to see that auto insurance is getting disrupted in many different ways by companies like Metromile, Root, and Clearcover.
Macro trends: Think about this. The more things are connected - houses, cars, even people with wearables - the more real-time data there is. From an insurance perspective, this means you can underwrite more in real time vs. the old method of collecting data over the course of several years.
Today, you underwrite insurance by looking at years and years of data to determine loss history, and then create rates based on characteristics such as people, vehicles, homes, age, features, credit score, etc. But, you have to wait for years for that data.
So, as we have vehicles with new semi-autonomous features coming on the market, normally insurers would take years to understand how those features impact the rate. What we are going to do is connect directly to the car and get that data in real-time and understanding what is happening from drive to drive so, that in a matter of months, and not years, we will be able to determine rates.
Netography (Barrett Lyon, co-founder and CEO)
Netography, a San Francisco, CA-based autonomous network security platform, raised a $2.6M seed round earlier this month.
Recommended productivity hack/rule to live by: In my digital life, I have a rule of thumb that if I do something three times manually that I should write a script for it and automate it.
Recommended book: Shameless self promotion: Fatal System Error.
Thoughts on work-life balance: There’s an ebb and flow with demands on both personal life and workload. I try to put all my efforts into making sure I get my work related things done so I can have some personal time when I need it. That means there may be days where I work 15 hours which hopefully results in a day where I can tune work out and enjoy something like skiing.
How long did the round take to close: About two months.
What capital will be used for: Engineering, marketing, and sales.
Comment of valuation after the round: No comment but it was fair.
Number of investor conversations and terms sheets: A very select few.
Seems as though the process of raising money isn’t efficient. Your thoughts: I have found that if your ideas are organized and easy to present and you’ve done your homework, it can help a firm come to a decision a little faster vs. having to pry that information out of you.
Length of relationship with lead investor: The firm since they started and the partner for several years.
Total amount raised to date: $2.6M.
Competitive landscape: We fit in as a service leveraged by enterprises and broader security teams. We’re a bit in a league of our own but possibly legacy services like Kentik or hardware platforms like Arbor Networks.
Macro trends: I believe that networks and enterprises have largely been flying blind and that their telemetry and situational awareness will become much more advanced over the next 5 to 10 years. As a result will be well positioned to provide the services that fit those needs.
Venture Funds 💰
Camber Creek (Jake Fingert, General Partner)
What are some of the most exciting areas of investment within real estate technology for 2019?
The market for real estate technology is growing rapidly. According to PwC, the industry has expanded by 59% over the past two years, reaching $7.3 billion by 2018.
One particularly exciting area is the intersection of real estate technology and fintech. For example, one of our portfolio companies, Rabbet, just announced an $8 million round with investment from Goldman Sachs, Camber Creek, and QED Investors. Rabbet simplifies construction finance, helping banks make construction loans faster and reducing the burden on general contractors and sub-contractors.
We are also bullish on companies that focus on real estate utilization and space arbitrage, like WhyHotel, another Camber Creek portfolio company, which operates pop-up hotels in newly built, luxury apartment buildings during the lease-up phase. In December 2018, WhyHotel announced a $10 million Series A funding round led by Highland Capital Partners with participation from Camber Creek. WhyHotel plans to double in size in 2019.
What’s the earliest stage that Camber Creek invests at?
At Camber Creek, we pride ourselves on adding value to every company in which we invest – and in fact we won’t invest in a company unless we believe we can meaningfully contribute to its growth. We add value by connecting portfolio companies to our LP network, which together owns or operates real estate assets equivalent to the City of Chicago.
So we are stage agnostic, but generally speaking we tend to invest in companies that have already developed a product and gotten some traction in the market and which we feel confident can add meaningful and immediate value for our investors and partners that operate real estate businesses.
How often does Camber Creek lead the round that it is investing in?
We lead about half the time. We are comfortable both leading and syndicating deals.
Is there a geographic focus?
We look at the best companies around the world and believe that great entrepreneurs can exist everywhere. We have historically invested more in companies in the United States, and we are actively looking at a number of opportunities internationally.
How much capital does the firm have left for future investments?
We are currently investing out of Fund II, a $30 million fund. While we don’t publicly disclose our fund allocation numbers, I can say we are actively investing in new companies and we have reserves for follow-on investment in our portfolio companies.
How many investments did the firm make in 2018?
Including both new investments and follow-on rounds, Camber Creek made 8 investments in 2018.
Camber Creek has made two investments thus far in 2019 (Bowery Valuation and Measurabl), correct?
Can you speak to any high level plans for your firm in the future?
Our investors have been very happy to date, and we certainly see a lot of opportunity in this space to continue to back a large number of companies that are going to grow into runaway successes.
How do you view the potential impact of blockchain technology on the space? For example, selling a partial stake of your home via a tokenized asset?
Blockchain technology has the potential to simplify real estate transactions across the market, from project finance to commercial leasing to residential home purchases. But many real estate investors, owners, operators, and tenants are cautious about adopting what is still a very novel technology. We are keeping a close eye on the space.
Venture for Canada, a not-for-profit that recruits, trains and supports top recent graduates to work at Canadian startups, is now accepting applications for Atlantic Canadian small businesses to host students for summer internships. Companies interested in participating can access up to $7,000 in wage subsidies and hire bright student talent. You can apply for May 2019 now here.
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