Welcome back to The TechCrunch Exchange, a weekly newsletter for startups and markets. It’s based largely on the daily column that appears on Extra Crunch, but it’s free and suitable for your weekend reading.
A week ago, TechCrunch raised Pico’s $ 6.5 million funding round, describing it as “a New York startup helping online developers and media companies make money and manage their customer data.” The exchange has previously reported on Pico, most recently during a dive in mid-2020 into the world of indie pubs and subscription media.
While our own Anthony Ha was doing an inimitable job in the Pico group, I also got a Zoom call at the company, as their new capital came with a kind of relaunch that I wanted to understand better.
The Pico team guided me through the changes in their business by describing the historical advancement of creative digital tools. They said earlier eras in space focused on hosting and content distribution. According to the startup, a new generation of creatively oriented tools will lead the market into an era in which content management systems or CMS – for example Substack or WordPress – will not own the tooling center. Instead it is monetization.
That’s Pico’s bet, and that’s how it builds what it sees as the operating system for the creator market. In my opinion, a creative digital world that revolves around monetization sounds more lucrative than previous eras.
Pico believes that no matter where someone builds their audience first, they end up choosing multiple SKUs – or maybe multiple platforms. It can therefore prove critical to keep a single, central register of customer data.
The startup’s revamped service is still a monetization tool, along with a creator-focused CRM that resides on your CMS or other digital edition on a specific platform. So far, the company’s customer growth looks good and has grown five-fold over the past year. Let’s see how far Pico can ride his vision and if it can help build a middle class in the creative economy.
The food revolution will be IRL
Somewhat lost in our circles amid the hype surrounding Instacart’s epic COVID time is the fact that most people are still going to stores to buy their fruits and vegetables as our friends in the UK might say.
Grocers haven’t forgotten the fact. But their historically narrow margins and the increasing competition for customer property in the Instacart era didn’t make them too safe. How can you pursue a more digital strategy without outsourcing your customer relationship to third parties?
Quick could be part of the answer. The startup is building technology to digitize grocery chains of all sizes, leverage modern mobile technology, and generate more income through ads while providing consumers with more shopping options. Neat, yes?
The startup has raised a little more than $ 15 million per Crunchbase data to date, but it came back to our minds thanks to its contract with the Dollar Tree Company, a consumer retail company with around a million stores in America.
I’ve been aware of Swiftly for ages, having met its co-founder Henry Kim while building Sneakpeeq, which later became Symphony Commerce. The latter company was eventually bought by Quantum Retail. But during my conversations with Kim over the years in and around San Francisco, he kept bringing up the grocery market, an area he had experience in prior to setting up Symphony Commerce.
After Kim has exaggerated the possibilities for groceries and digital for about half a decade, it’s fun to see the company that grew out of his hopes and planned land as a key partner.
Swiftly offers two main products, a retail system and a media service. The retail sector offers checkout services, loyalty programs, personalized offers and the like for mobile buyers. On the media side, IRL grocers can save some of the consumer packaged goods (CPG) ad spend they often miss while doing analytics to better attribute the impact of the ads sold.
I expect Swiftly to raise more capital in the next few quarters after closing a large public deal. More when we have it.
UiPath, SPACs and a good round of venture capital
In the past two weeks, The Exchange has written a lot about UiPath’s initial public offering. Probably too much. Just in case, catch up with you, the company’s initial IPO price range seemed like a warning to late-stage investors as the resulting valuations were slightly lower than expected. Next, the company increased that area and corrected, if not eliminated, our previous concerns. Then the company’s price was above its elevated range, albeit still at a discount on its final private round. Then it gained ground after it started trading and its CFO said we did well.
To delve even further into the company’s private-public rating saga, The Exchange asked B2B investor Dharmesh Thakker, a general partner at Battery Ventures, about his stance on the company’s last private round, in connection with it landing a little higher than there where the company ends up eventually price its IPO. Here is what he had to say:
[T]This round was about smart money. These are people who understand that material value creation comes 3-5 years after going public, as we’ve seen with Twilio, Atlassian, MongoDB, Okta, and Crowdstrike, which have increased in value 5-10x after going public.
Currently, UIPath only has 1% penetration on sales of $ 608 million in a $ 60 billion automation market, and the urgency of intelligent process automation for repetitive tasks is only increasing after COVID. Businesses need help automating their costs. As the company penetrates its target market and grows over time, UIPath will increase the lasting value that investors realize before going public and before going public. You will be patient. “
In other words, he’s bullish. PitchBook analyst Brendan Burke took UiPath’s IPO even more clearly. Here’s what he had to say about the company and its market:
RPA has scaled rapidly due to the need for automation, but it remains a limited solution that may not have lasting value. Because of its reliance on custom scripts, we see RPA as a bridging technology to cloud-native AI automation that is exposed to competitive risk from AI-native challengers. The future of enterprise automation is for front-line users to deploy cloud-native machine learning models that can adapt to dynamic data flows and make accurate decisions. UiPath’s implementations are not cloud-native and require third-party integrations with around 75 AI model providers for smart decisions. In addition, the company lists the possibility of recruiting AI engineers as a risk factor for the company. UiPath’s ability to expand across the AI value chain will be critical to UiPath’s long-term prospects.
I’m including this comment as it can sometimes be difficult to get a negative comment out of the broader analyst world as people are so afraid to be rude.
There’s a new SPAC deal this week that I wanted to highlight for you: SmartRent to merge with Fifth Wall Acquisition Corp. I. SmartRent raised more than $ 100 million while private, according to Crunchbase data, according to Crunchbase data from RET Ventures, Spark Capital, and Bain Capital Ventures, among others.
Hence, this particular SPAC deal, which valued SmartRent at a $ 2.2 billion stock value, is a significant, venture-backed exit. You can check out the Investor Deck here. We care about the company as it appears to operate in a similar area to Latch which also ships through a SPAC. Do OS companies duel for rental units? That should be fun. (More on Latch’s SPAC deal here.)
After all, HYPR raised $ 35 million this week for our main work today. Among all of the venture capital rounds I wish I could have written about this week but didn’t get around to, HYPR is up there because it promises a password-free future. And after just lifting a Series C, you might be trying to pull it off. Please God make it happen.
Different and different
I had to cover a few rounds raised by graduates of the Y Combinator this week, including the recent Queenly and Albedo funding events. Look at her.
Oh, and Afterpay’s recent gains show that the “buy now, pay later” market is still growing like hell.