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There are some additions to the TechCrunch team that I’m happy to announce.
First, Kirsten Korosec, who has been with us for more than two years, was promoted to Transportation Editor. Kirsten has done amazing work, helping to elevate our foothold in the transportation space and making our Mobility events some of the most successful we’ve produced. This means that not only will she continue to hunt for scoops, but she’ll also be bringing on some fresh voices in transportation. Look for them on TechCrunch and Extra Crunch soon.
We’re also happy to say that Jon Shieber will become our new Climate Editor, focused on the startups and funding being put behind renewables, environmental technology and green businesses. More on this soon.
Next, we’d like to welcome some new contract writers who will be joining our small but mighty team of reporters covering the startup ecosystem:
- Tage Kene-Okafor, who is based in Lagos, will be covering Western Africa for us. He comes to us from TechPoint Africa where he covered startups and venture capital.
- Mary Ann Azevedo will be covering startups and investing. She is coming to us from FinLedger, where she was charged with getting the fintech-focused site launched. Before that, she worked for our very own Alex Wilhelm at Crunchbase News.
- Sophie Burkholder will be covering startups from health and biotech to enterprise.
Rounding out our fresh lineup of writers are some other contributors. Mark Harris, who has already broken several great scoops for us, Leigh Cuen who will be covering crypto and Marcella McCarthy, who will be all over the startup scene in Miami, as well as contribute to Extra Crunch.
Finally, we are welcoming back Drew Olanoff who has taken on our community-building project, something we’re extremely excited about. Drew will help us to identify the global TechCrunch community and will serve as the connective tissue between Extra Crunch and TechCrunch, as well as our events, like Disrupt, where all of our content comes alive.
It’s going to be a big year at TechCrunch and we’re excited to have them all a part of the team. Welcome them aboard if you get a chance.
An “anonymously”-led startup called Millions has raised a $3 million seed round for its fintech company that’s currently giving away free money through its Twitter account. The concept, inspired by the likes of YouTuber David Dobrik, is partly aimed at attracting attention for the new company but is also setting the stage for a forthcoming business model of sorts, where brands could participate in giveaways more directly.
The idea of brand and cash giveaways is not a new one, of course. Outside of social media personalities and traditional sweepstakes like Publishers Clearing House, the mobile game HQ Trivia more recently had tried to integrate brand giveaways in an attempt to draw players to its live trivia games. But HQ Trivia couldn’t maintain an audience after the novelty wore off and eventually shut down, after also dealing with internal strife and tragedy.
Millions has a different idea. Instead of weekly live games, users follow the Twitter account @millions, which either does a drop of some sort or gives away money to its followers every month. This month, for example, the account is launching its “million dollar sweepstakes.” Users follow @millions on Twitter, visit Millions.app, the enter 6 numbers. If all 6 match, they win $1 million*. (See details below).
Next month, the startup will launch a game called “are you my number neighbor?” where users will enter their phone number on a website, and if it’s just a digit off from the phone number on the site, the user wins $100,000.
These stunts — apparently just giving away investor cash — are meant to raise brand awareness and acquire customers.
Image Credits: Millions/MyCard, Inc.
“If you think about customer acquisition costs — and this is a little bit controversial — people just give money to Facebook or Instagram, or Apple or Google. The money goes straight to a social network and not the people,” explained a Millions co-founder, who asked to remain anonymous. “They’re trying to get the people, but they’re not giving the people the money. The Millions way is really giving the people the money. We don’t need to run advertisements. We’re giving the money directly to the people, and hopefully, they follow our ecosystem, subscribe for updates, and they’ll see the future launch,” they said.
Ultimately, the larger plan for Millions is to transfer the customers it acquires through the games to the fintech play, which will also have something to do with winning money.
TechCrunch agreed to not reveal the co-founders’ name during a discussion to learn what the startup was up to, as they said they wanted to keep the game playful and anonymous for the time being. But we’re not breaking any agreements by pointing to what’s easy-to-access, publicly available data. We found the company, Mycard Inc. is referenced on the Millions website’s Terms as the legal entity behind this endeavour. That same company is on this SEC filing for a $3 million fundraise in December 2020. The filing lists two names: Kieran and Rory O’Reilly. These are the same names as the brothers behind gifs.com.
Investors in the startup’s seed round included Giant Ventures, 8VC, Supernode, Supernode, Twitter co-founder Biz Stone, Italic CEO Jeremy Cai, Allbirds co-founder and CEO Joey Zwillinger, Casper co-founders Neil Parikh and Luke Sherwin, MSCHF head of strategy and growth Daniel Greenberg, CEO of Deel Alex Bouaziz, CEO of Hellosaurus James Ruben, CEO of Beek Pamela Valdes, PM at Facebook (for the Payments Gateway team) Luis Vargas, co-founder of Block Renovations Koda Want, CEO of Nebula Genomics Kamal Obbad, plus some of the co-founders from Warby Parker and Harry’s, and other fintech angels.
A few investors also agreed to vouch for Millions on the record, and hinted at the MyCard product to come.
“This company is creating delight from what would otherwise be the mundane, everyday necessity of swiping a credit card. We invested in Millions because they will spark joy in people’s lives, and think the traditional points model of accumulating hard-to-use airline and hotel points is tired, and ripe for reinvention,” said Allbirds co-founder and CEO Joey Zwillinger.
“Millions is building an incredibly loyal audience through an unparalleled, engaging customer experience and the $1M giveaway is only the tip of the iceberg of what’s to come. These are some of the strongest founders I know and have truly captured lightning in a bottle,” said Italic CEO Jeremy Cai.
“I invested in Millions because the trend is clear – people love winning money.It’s clear that there’s something going on here. Millions is dedicated to giving away money in crazy ways and I’m happy to be involved,” said MSCHF head of strategy and growth, Daniel Greenberg.
Millions’ arrival, however, comes at a time when people are desperate for money due to the economic downturn driven by the COVID-19 pandemic and lack of government assistance. The pandemic has exacerbated the class divide, leading people (including the Pope) to question whether capitalism has failed. It has fueled the “eat the rich” ethos behind the GameStop frenzy. And this situation has added a darker layer to otherwise do-gooder activities, like Dobrick’s stunts or Lexy Kadey’s TikTok “Venmo Challenges,” where she tips waitstaff and fast food workers hundreds or even a thousand dollars and films them breaking down in relief.
Millions’ co-founder acknowledges we’re in a time of need, but also argues that’s why the product makes sense.
“If you think about what’s going on in the world right now — with the pandemic and the 99% versus the 1% — people are looking for a) hope and b) money,” they said. “If you can combine a product that has two of those things, you’re giving people fun, excitement, and something to look forward to…I think that’s really inspiring.”
*Note: Like many sweepstakes, you’re playing for a “chance” to win. But in this case, $10,000 is a guaranteed Grand Prize win for one person. The Millions website lists the digital promotions company Realtime Media as being involved in helping manage the game. However, the insurance provider that insures the program is actually HCC.
If you’ve ever applied for a mortgage, you know it’s one of the most painful processes out there. Keeping up with payments and dealing with customer service over the course of the loan is no picnic either.
So it’s no surprise that big bucks are being poured into the space with the goal of making the process easier, more digital and more transparent.
To that end, Valon, a tech-enabled mortgage servicer, announced this morning it has raised $50 million in a Series A round of funding — which is large for its stage even by today’s standards.
Andreessen Horowitz (a16z) led the round for the New York-based company formerly known as Peach Street. Returning backers Jefferies Financial Group, New Residential Investment Corporation – an affiliate of Fortress Investment Group LLC – and 166 2nd LLC also participated in the financing.
Valon previously raised $3.2 million from seed investors such as serial entrepreneur Kevin Ryan’s Alley Corp, Soros, Kairos, and Zigg Capital.
Andrew Wang, Eric Chiang and Jon Hsu founded Valon in June 2019 with the mission of breaking up what it sees as “a monopoly in the market,” with “the largest mortgage servicing software company” (software giant Black Knight) controlling more than half of all U.S. residential loans.
“We’re on the cusp of a mortgage foreclosure crisis comparable to 2008, and the majority of homeowners struggling to make their loan payments are unaware of their options,” Valon CEO Wang said. “This stranglehold has driven servicing costs up nearly 250% in the past decade, and the fees are passed on directly to the borrower.”
Concurrent with the raise, Valon recently got the green light from Fannie Mae to service its government sponsored home loans. (For the unacquainted, servicing loans means doing things like collecting payments on behalf of a lender). The approval will only continue to fuel Valon’s rapid growth, according to Wang.
“We went from no contracts committed to $10 billion in mortgages committed to be serviced in one year,” he told TechCrunch.
Valon operates in 49 states, and expects to add New York this year.
As a former investor in mortgage servicing space, Wang was frustrated by “the lack of service” provided by other servicers. So he teamed up with Chiang and Hsu, who had prior product and engineering experience at Google and Twilio, to launch Valon.
The company’s cloud-native platform aims to deliver what it describes as a borrower-oriented experience. Lenders also can request access to real-time API data feeds to view performance of their borrowers and reconcile transaction data.
Unlike mortgage originators, which lend money to the borrower, a mortgage servicer interfaces with the borrower for the duration of their loan – and that can be anywhere from 15 to 30 years.
“This includes things like collecting payments on behalf of the lender and providing assistance and guidance to the borrower in moments of stress,” Wang said. “Traditional mortgage servicers use antiquated technology and provide poor service to borrowers. Valon looks to change that dynamic by providing transparency and full self-service capabilities to homeowners.”
The company also claims that its technology has the potential to reduce mortgage servicing costs by up to 50% by vertically integrating the entire process. Its platform is built on Google Cloud with security as a “first-principle” with features such as default encryption and intrusion detection, the company said.
Millions of Americans stopped paying their mortgages in 2020 due to the economic strain of the coronavirus pandemic. This led to requests for forbearance (postponement of payments) and foreclosure moratoriums.
“The pandemic highlighted the stress in the market and greatly accelerated the need for a new age mortgage servicer,” Wang said. “Homeowners faced a great deal of financial stress and had difficulty getting the right option and assistance from existing servicers due to their antiquated technology and inability to process requests… In 2021 we will see forbearance and foreclosure leniency come to an end and this need will be even more acute.”
Angela Strange, a general partner at Andreessen Horowitz who joined Valon’s board in mid-2020, says Valon has built a mobile-first mortgage servicer from the ground up.
“Homeowners are faced with clumsy websites, call centers, and often misinformation,” she said in a written statement. “In Valon, they have a trusted software driven advisor who can provide clear, transparent, regulatory compliant information in good times and bad – without needing to pick up the phone.”
The Fannie Mae approval only serves as further validation of the platform the team has created, she added.
Valon plans to use its new capital to triple headcount to about 100 by year’s end as well as to acquire more mortgage servicing rights (MSR) contracts to service.
Atlassian has made it clear for some time that it’s all in on the cloud, but now it’s official. The company stopped selling new on-prem licenses as of yesterday. Perhaps to take away the sting of that move for large organizations, today it announced a new all-inclusive enterprise pricing tier.
Atlassian chief revenue officer Cameron Deatsch says that previously the company had offered a free tier and then standard and premium level paid tiers. “And now this cloud Enterprise Edition will be our highest tier, and what this will allow is for the most complex deployments, the largest customers who need unlimited scale, the customers that have all the security and regulatory requirements, data residency, you name it, — that is what we’re launching starting [today],” Deatsch told me.
What the enterprise tier delivers is unlimited instances across the Atlassian product line for each enterprise customer. That means a big company with multiple divisions could, for instance, have 20 instances of Jira and Trello deployed with one for each division and a central management console, while paying a single price regardless of how much they use.
While the company is supporting existing on-prem customers until 2024, the idea is to now move them to the cloud and this offering should help. One thing we have clearly seen is that the pandemic has accelerated the move to the cloud by companies of every size, and this should encourage the company’s largest customers to make the move.
“The reality is, the demand was there, which was great to see, but we actually had this huge pipeline of our largest customers, basically trying to build their plan over the next couple of years to get to our cloud. The general availability of our Enterprise Edition is going to accelerate that even more,” he said.
It’s a move the company has been working towards for some time, but it really began to take shape when they shifted their operations to AWS and rebuilt the entire stack as a set of microservices beginning in 2016. This was the first step towards being able to handle the increased kinds of workloads an enterprise tier would require.
The company reported earnings at the end of last month with revenue of $501.4 million up 23% YoY with over 11,000 net new subscribers, a record for the company. The new enterprise tier won’t help with new customer volume, but it should help with overall revenue as more customers look for cloud solutions and pricing that meets their needs.
On the heels of private companies Robinhood and Databricks each raising $1 billion or more yesterday, Bumble is out with a new IPO filing this morning indicating that it wants to raise ten figures as well.
The relationship-finding service where women reach out first will go public on the heels of strong public debuts in December by companies like Airbnb, DoorDash and C3.ai and Qualtrics and Poshmark lighting the way in January.
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But at a range of $28 to $30 per share, is Bumble aiming high or low in its valuation and resulting multiples? (For more, check out our first-look at Bumble’s results here.)
Annoyingly, it’s a little tricky to figure out, as the company’s ownership structure and results are messy thanks to a majority-sale to Blackstone back in 2019. So this won’t be entirely clean or simple.
But we’ll get through it. Here’s what we want to know:
- Simple and diluted valuations for Bumble at its current IPO price range
- What sort of multiples Bumble expects public investors to pay for its shares
- How those stack up compared to Match Group’s own numbers
- And, finally, what the Bumble IPO could mean for dating and relationship-focused startups; could this IPO prove that there is lucrative space in the market for more dating products?
So let’s get to work, starting with Bumble’s valuation.
It’s a bird! It’s a plane! It’s a very valuable bee?
Bumble’s simple valuation is just that to calculate, a doddle. At $28 to $30 per share, and Bumble noting that it expects to have 108,384,634 shares outstanding after its IPO, including its full underwriters’ option, the company would be worth $3.03 billion to to $3.25 billion.
But that’s actually a bit too simple. Bumble’s share count is actually quite a lot higher. For example, if we assume the “exchange of all Common Units held by the Pre-IPO Common Unitholders,” then the company’s share count rises to 189,548,952. At that share count, Bumble is worth $5.31 billion to $5.69 billion. That’s a lot more!
Now things get actually tricky. Our last share count did not take into its confines “any shares of Class A common stock issuable in exchange for as-converted Incentive Units or upon settlement of certain other interests.” So, what are those?
Source: https://techcrunch.com/2021/02/02/bumble-ipo-could-raise-more-than-1b-for-dating-service/
