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Pinecone, a new startup from the folks who helped launch Amazon SageMaker, has built a vector database that generates data in a specialized format to help build machine learning applications faster, something that was previously only accessible to the largest organizations. Today the company came out of stealth with a new product and announced a $10 million seed investment led by Wing Venture Capital.
Company co-founder Edo Liberty says that he started the company because of this fundamental belief that the industry was being held back by the lack of wider access to this type of database. “The data that a machine learning model expects isn’t a JSON record, it’s a high dimensional vector that is either a list of features or what’s called an embedding that’s a numerical representation of the items or the objects in the world. This [format] is much more semantically rich and actionable for machine learning,” he explained.
He says that this is a concept that is widely understood by data scientists, and supported by research, but up until now only the biggest and technically superior companies like Google or Pinterest could take advantage of this difference. Liberty and his team created Pinecone to put that kind of technology in reach of any company.
The startup spent the last couple of years building the solution, which consists of three main components. The main piece is a vector engine to convert the data into this machine-learning ingestible format. Liberty says that this is the piece of technology that contains all the data structures and algorithms that allow them to index very large amounts of high dimensional vector data, and search through it in an efficient and accurate way.
The second is a cloud hosted system to apply all of that converted data to the machine learning model, while handling things like index lookups along with the pre- and post-processing — everything a data science team needs to run a machine learning project at scale with very large workloads and throughputs. Finally, there is a management layer to track all of this and manage data transfer between source locations.
One classic example Liberty uses is an eCommerce recommendation engine. While this has been a standard part of online selling for years, he believes using a vectorized data approach will result in much more accurate recommendations and he says the data science research data bears him out.
“It used to be that deploying [something like a recommendation engine] was actually incredibly complex, and […] if you have access to a production grade database, 90% of the difficulty and heavy lifting in creating those solutions goes away, and that’s why we’re building this. We believe it’s the new standard,” he said.
The company currently has 10 people including the founders, but the plan is to double or even triple that number, depending on how the year goes. As he builds his company as an immigrant founder — Liberty is from Israel — he says that diversity is top of mind. He adds that it’s something he worked hard on at his previous positions at Yahoo and Amazon as he was building his teams at those two organizations. One way he is doing that is in the recruitment process. “We have instructed our recruiters to be proactive [in finding more diverse applicants], making sure they don’t miss out on great candidates, and that they bring us a diverse set of candidates,” he said.
Looking ahead to post-pandemic, Liberty says he is a bit more traditional in terms of office versus home, and that he hopes to have more in-person interactions. “Maybe I’m old fashioned but I like offices and I like people and I like to see who I work with and hang out with them and laugh and enjoy each other’s company, and so I’m not jumping on the bandwagon of ‘let’s all be remote and work from home’.”
SAP today announced a new offering it calls ‘RISE with SAP,’ a solution that is meant to help the company’s customers go through their respective digital transformations and become what SAP calls ‘intelligent enterprises.’ RISE is a subscription service that combines a set of services and product offerings.
SAP’s head of product success Sven Denecken (and its COO for S/4Hana) described it as “the best concierge service you can get for your digital transformation” when I talked to him earlier this week. “We need to help our clients to embrace that change that they see currently,” he said. “Transformation is a journey. Every client wants to become that smarter, faster and that nimbler business, but they, of course, also see that they are faced with challenges today and in the future. This continuous transformation is what is happening to businesses. And we do know from working together with them, that actually they agree with those fundamentals. They want to be an intelligent enterprise. They want to adapt and change. But the key question is how to get there? And the key question they ask us is, please help us to get there.”
With RISE for SAP, businesses will get a single contact at SAP to help guide them through their journey, but also access to the SAP partner ecosystem.
The first step in this process, Denecken stressed, isn’t necessarily to bring in new technology, though that is also part of it, but to help businesses redesign and optimize their business processes and implement the best practices in their verticals — and then measure the outcome. “Business process redesign means that you analyze how your business processes perform. How can you get tailored recommendations? How can you benchmark against industry standards? And this helps you to set the tone and also to motivate your people — your IT, your business people — to adapt,” Denecken described. He also noted that in order for a digital transformation project to succeed, IT and business leaders and employees have to work together.
In part, that includes technology offerings and adopting robotic process automation (RPA), for example. As Denecken stressed, all of this builds on top of the work SAP has done with its customers over the years to define business processes and KPIs.
On the technical side, SAP is obviously offering its own services, including its Business Technology Platform, and cloud infrastructure, but it will also support customers on all of the large cloud providers. Also included in RISE is support for more than 2,200 APIs to integrate various on-premises, cloud and non-SAP systems, access to SAP’s low-code and no-code capabilities and, of course, its database and analytics offerings.
“Geopolitical tensions, environmental challenges and the ongoing pandemic are forcing businesses to deal with change faster than ever before,” said Christian Klein, SAP’s CEO, in today’s announcement. “Companies that can adapt their business processes quickly will thrive – and SAP can help them achieve this. This is what RISE with SAP is all about: It helps customers continuously unlock new ways of running businesses in the cloud to stay ahead of their industry.”
With this new offering, SAP is now providing its customers with a number of solutions that were previously available through its partner ecosystem. Denecken doesn’t see this as SAP competing with its own partners, though. Instead, he argues that this is very much a partner play and that this new solution will likely only bring more customers to its partners as well.
“Needless to say, this has been a negotiation with those partners,” he said. “Because yes, it’s sometimes topics that we now take over they [previously] did. But we are looking for scale here. The need in the market for digital transformation has just started. And this is where we see that this is definitely a big offering, together with partners. “
The pandemic has spelled economic setbacks for many people and industries, but the capital swirling about the technology world continues to roar along. In the latest development, TCV — the storied venture capital firm behind the likes of Airbnb, Spotify, Peloton and Facebook — has closed a record $4 billion for its latest fund.
This is not only the company’s biggest fund to date, but it also speaks to just how fast the tech industry is accelerating in terms of capital and how much of it tech is attracting. In 25 years of operations (a milestone it passed in 2020) TCV invested $14 billion across hundreds of startups. This latest $4 billion fund raised in a matter of months represents nearly 30% of that figure.
(It’s also more than the company originally targeted, which was $3.25 billion.)
Parter John Doran told TechCrunch the plan will be to use the money to continue backing existing portfolio companies, as well as make new bets, both in areas that have shown to be very strong winners in the last year — e-commerce, education, and tools to enable working in the cloud, for example — but also investments in areas that may not be doing as well right now, but TCV will believes will return, like travel.
“We have to take a long term view,” he said in an interview. “It’s about great founders and CEOs, and where those in areas like travel, you’ll still see the startups get funded at up rounds. Besides, who will be better positioned to grow and take advantage of a world that’s now more digital? That is a huge opportunity in the long term.”
As with other big capital events, the closing of a VC fund may not be intrinsically interesting news in itself, but it’s a significant bellwether that points to the level of confidence, interest and activity in the early stages of the funding process. That, in turn, has a direct knock-on effect for startups, and subsequently the technology industry at large.
In the case of TCV XI, as it is known, it’s a sign of strength in the market — it is $1 billion more than its previous fund, closed before the pandemic in 2019 — but also an endorsement of some of the less traditional processes and practices that have become the norm in many of our lives.
Notably, the raising (and closing) of the fund was done entirely virtually over the last year, Julia Roux, the company’s head of investor relations, told TechCrunch, from a mix of returning and new LPs. Going virtual is also, in many cases, the route that TCV (and other VCs) have taken in closing deals over the last year too, which looks like it may now be here to stay.
TCV has been very active in the past year, not just with private startup investments but seeing one of its most successful startups go public. Airbnb boldly went for an IPO in December, in the wake of a year that saw its business providing accommodation and other services to travellers come to a grinding halt.
The IPO was an example of the kind of more long-term investing that the firm is keen on doing (and very much has the funds to do now) despite current market conditions. Doran pointed out that TCV remains a “big believers in the Airbnb story,” investing in more shares in the company in the IPO.
Other big investments this year have included a lot of activity in commerce and fintech — including Mollie (raised $106 million), Spryker ($130 million), Revolut ($500 million), Klarna ($650 million), Nubank ($400 million) and Mambu ($135 million) — and Strava ($110 million). (Note how many of those rounds were outside the U.S.: almost all of them. The company says it has some $4 billion under management outside the U.S. now.)
Recent exits include AxiomSL, Genesys, Cradlepoint, and Silver Peak.
“We are humbled by the ongoing support of new and returning investors, which enabled us to raise a record sized fund,” said Jay Hoag, a founding general partner at TCV, in a statement. “Just as importantly, we are honored by all the great entrepreneurs we’ve worked with over the past 25 years, as their vision and relentless execution has been our foundation. We look forward to backing entrepreneurs with our new fund that we believe will become the next generation of iconic companies, in this incredibly fertile technology industry.”
It’s not every day you see a Latin American startup funded by a U.S. venture capital firm based in the midwest. Playvox, a Colombian startup that wants to bring a positive twist to customer service monitoring announced a $25 million Series A from Five Elms Capital, a Kansas City, MO VC firm. It has now raised $34 million.
While it was at it, Playvox also announced something else unusual for an early stage company: an acquisition. The startup bought an Australian company called Agyle Time, a workforce monitoring SaaS tool. The acquisition brings together two companies with similar missions to provide a more complete customer service solution.
Playvox founder and CEO Oscar Giraldo founded the company in 2012 and has been quietly building it into an international business with brand name customers like Dropbox, Electronic Arts and Wish. The company’s Workforce Optimization platform works as a layer on top of customer service center management tools like Zendesk and Salesforce Service Cloud, allowing management to monitor digital channels and give customer service agents feedback to help them do their jobs better.
“When you call a contact center or a company, you may hear that ‘this call may be recorded for quality and training purposes’. So Playvox is a technology that works on the backend of [the customer service system] to manage the workforce that is responsible for providing a great customer experience,” Giraldo explained. It does this, but instead of for calls, it focuses on chat and email interactions.
Giraldo got the idea for the business nine years ago when he was working as a software engineer in Argentina and toured some customer service centers, where he observed a lot of disgruntled and unhappy employees. He wanted to start a company that would help give feedback to these employees in a more constructive and positive way.
“Instead of the traditional approach of customer service QA that was punishing the agents [for mistakes], what we do is we use that data to train them with a learning management system that is integrated in the platform, and have coaching tools that allow our customers to provide timely feedback to the agent so they can change their behavior for the better,” he said.
The Agyle Time acquisition enables the company to expand beyond this feedback system into customer service workforce scheduling and position them to compete in the enterprise market with a more complete toolset. “What we see is that combining the quality management agent optimization tools that Playvox has built with Agyle Time’s workforce management will allow us to be a unique vendor in the marketplace,” Giraldo said.
As for Five Elms, it’s a firm that invests between $4 and $40 million in companies that have between $2 and $20 million in revenue. They like SaaS companies in atypical places with portfolio companies in Fayetteville, AK, Columbus, OH and Brisbane Australia. Playvox fits nicely in that group.
“Playvox continues to deliver extraordinary products, add renowned brands to its customer base, and attract exceptional executives because of its company values and culture,” Ryan Mandl, managing director at Five Elms Capital said in a statement.
Datastax, the company best known for commercializing the open-source Apache Cassandra database, is moving beyond databases. As the company announced today, it has acquired Kesque, a cloud messaging service.
The Kesque team built its service on top of the Apache Pulsar messaging and streaming project. Datastax has now taken that team’s knowledge in this area and, combined with its own expertise, is launching its own Pulsar-based streaming platform by the name of Datastax Luna Streaming, which is now generally available.
This move comes right as Datastax is also now, for the first time, announcing that it is cash-flow positive and profitable, as the company’s chief product officer, Ed Anuff, told me. “We are at over $150 million in [annual recurring revenue]. We are cash-flow positive and we are profitable,” he told me. This marks the first time the company is publically announcing this data. In addition, the company also today revealed that about 20 percent of its annual contract value is now for DataStax Astra, its managed multi-cloud Cassandra service and that the number of self-service Asta subscribers has more than doubled from Q3 to Q4.
The launch of Luna Streaming now gives the 10-year-old company a new area to expand into — and one that has some obvious adjacencies with its existing product portfolio.
“We looked at how a lot of developers are building on top of Cassandra,” Anuff, who joined Datastax after leaving Google Cloud last year, said. “What they’re doing is, they’re addressing what people call ‘data-in-motion’ use cases. They have huge amounts of data that are coming in, huge amounts of data that are going out — and they’re typically looking at doing something with streaming in conjunction with that. As we’ve gone in and asked, “What’s next for Datastax?,’ streaming is going to be a big part of that.”
Given Datastax’s open-source roots, it’s no surprise the team decided to build its service on another open-source project and acquire an open-source company to help it do so. Anuff noted that while there has been a lot of hype around streaming and Apache Kafka, a cloud-native solution like Pulsar seemed like the better solution for the company. Pulsar was originally developed at Yahoo! (which, full disclosure, belongs to the same Verizon Media Group family as TechCrunch) and even before acquiring Kesque, Datastax already used Pulsar to build its Astra platform. Other Pulsar users include Yahoo, Tencent, Nutanix and Splunk.
“What we saw was that when you go and look at doing streaming in a scale-out way, that Kafka isn’t the only approach. We looked at it, and we liked the Pulsar architecture, we like what’s going on, we like the community — and remember, we’re a company that grew up in the Apache open-source community — we said, ‘okay, we think that it’s got all the right underpinnings, let’s go and get involved in that,” Anuff said. And in the process of doing so, the team came across Kesque founder Chris Bartholomew and eventually decided to acquire his company.
The new Luna Streaming offering will be what Datastax calls a “subscription to success with Apache Pulsar.’ It will include a free, production-ready distribution of Pulsar and an optional, SLA-backed subscription tier with enterprise support.
Unsurprisingly, Datastax also plans to remain active in the Pulsar community. The team is already making code contributions, but Anuff also stressed that Datastax is helping out with scalability testing. “This is one of the things that we learned in our participation in the Apache Cassandra project,” Anuff said. “A lot of what these projects need is folks coming in doing testing, helping with deployments, supporting users. Our goal is to be a great participant in the community.”
Source: https://techcrunch.com/2021/01/27/datastax-acquires-kesque-as-it-gets-into-data-streaming/
