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The end of the demo day, dilution and other startup accelerator resolutions

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Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.

In April 2020, NextView VC launched its debut accelerator in the thick of the pandemic, while historical incubators like Y Combinator and 500 Startups were similarly rethinking their independent strategies. Key tweaks like making batches fully remote and scrapping the cohort model gave us a peek at how some of the most active pre-seed and seed investors were rethinking their jobs.

Fast-forward perhaps too many months, NextView partner Melody Koh tells me the accelerator is launching its third cohort with some key tweaks, again signaling some interesting changes for the seed-stage startup scene.

The first big change is that NextView is growing its check size from $200,000 for an 8% ownership stake to $400,000 for a 10% ownership stake. Big check sizes in this economy are anything but surprising, but Koh’s perspective is that the cash will “arm companies with just a little bit more ammunition that can really set them up.” Beyond market pressure, the firm realized they were the only funding sources for a lot of cohort startups — which meant they had to make larger initial investments to truly get these companies to follow on funding.

“It just provides a little bit more flexibility and the ability for teams to really experiment and execute and kind of get to the next stage of the milestones that this market now is looking for,” she added. So far, more than 50% of the NextView accelerator alumni identify as underrepresented founders and come from cities including Miami, Seattle, Boston, Birmingham, San Diego and New York.

Considering its distributed format, the firm has had to update its mentorship. This time around, it is pairing each of its six to eight batch startups with a primary partner for weekly meetings and a secondary for monthly meetings. The former will give the company a more on-going resource while they’re in the weeds and is a result of feedback NextView has seen from previous cohorts. The more involved partnership model could bring startup founders more activation energy when they need it most.

And finally, the firm is doubling down on its no demo day rule. Part of the argument here is that the idea of an annual, flashy event may no longer be necessary for founders to land coveted attention.

“We don’t feel like the artificial kind of deadlines, and the demo day date format is the best use of your time,” Koh said. “The way we engage with every company is … ‘OK each of you has a different set of milestones that make sense for you,’ so we don’t really focus on demo day as the right way to expend their energy or our energy.”

NextView isn’t alone in rethinking demo days and its broader investing strategy. Firms like Contrary Capital and startups like Launch House are similarly looking for smarter ways to land deals and propel startups.

Even in a world where capital is a commodity, investors are preparing — perhaps even more so — to find innovative ways to make their cash even more worth it to founders. “Value add” chatter can be cringey at times, but to me it just signals that an emerging class of investors are figuring out what they’re best at (beyond spotting ambitious founders). That’s fun to see, and even something as small as a tweak on accelerator format can give us something to think about.

For my full take on this topic, check out my TechCrunch+ column: Startup accelerators’ definition of ‘value add’ is due for a refresh.

In the rest of this newsletter, we’ll dig into CES 2022 trends, a fintech startup with a contrarian view on CAC and a feature on the future of Black Girls Code. As always, you can follow my thoughts on Twitter @nmasc_  or listen to me and my friends on Equity. 

Light bulbs with vital signs and suave yet smart cat collars

Image Credits: TechCrunch

From smart cat collars to color-changing cars, CES never fails to surprise us. While the TechCrunch team chose to cover the annual tech conference remotely due to surging COVID-19 cases, our reporters were all over the latest and greatest technology sneak peeks nonetheless. All of our CES coverage can be found at this nifty link, but I recommend starting with Brian Heater’s CES 2022 themes just to wet your palate.

Here’s what to know: Stand out announcements so far include BMW’s plan to turn cars into rolling cinemas, a mission to scale paper-based tooth brushes and, on a more serious note, a statement on the importance of a cushion that tracks your child’s temperature.​​

Other “wait, what” moments include:

And the startup of the week is…

Image Credits: Peshkova (opens in a new window) / Getty Images

Bankaya! As our own Mary Ann Azevedo reports, this Mexican fintech is opting for a non-traditional strategy when it comes to acquiring customers: going offline. The new, early-stage company is targeting 50 million underbanked individuals with face-to-face advertising: think street sales and debit card kiosks strategically placed in vaccination centers.

Here’s what to know: Just one year after launch, Bankaya co-founders CEO Mauricio Cordero, Ramón Chedraui and Diego Vargas claim they landed 450,000 customers. And, adding to their counterintuitive strategy, the company is fully bootstrapped to date.

Honorable mentions:

Kimberly Bryant and the future of Black Girls Code

Image Credits: Sean Mathis / Getty Images

Over the holidays, news broke that Black Girls Code co-founder and CEO Kimberly Bryant was “suspended indefinitely” from the nonprofit organization she launched nearly a decade ago. I spoke to the nonprofit board that decided to place her on leave, former employees who allege rising tensions between Bryant and the organization, and of course, Bryant herself to get the full story.

Here’s what to know: There’s too much nuance in this story to sum it all up in a perfect blurb, so I’d really recommend those interested to read the entire story. As of now, the board claims it has formed a special committee to review complaints against Bryant from former and current employees and put Bryant on paid administrative leave last week “to ensure a full and fair review process.”

Startup boards 101:

Around TechCrunch

Our events calendar got leaked (by us) so now’s your chance to check out our legendary line up for this year. I’m so excited to share that TechCrunch Disrupt, our flagship event, will be returning as an in-person event. Three days, a lot of startup chatter, and over-caffeination. Buy tickets ASAP

Across the week

Seen on TechCrunch

Elizabeth Holmes convicted of 4 of 11 fraud counts in Theranos trial

Fintech-focused Ribbit Capital raises $1.15B in seventh fund, according to SEC filing

MVP versus EVP: Is it time to introduce ethics into the agile startup model?

The Equity team’s 2022 predictions

Memes, money and madness: 2021 in tech

Seen on TechCrunch+

3 views: How due diligence will change in 2022

VCs and founders are max bullish as public markets flash warning signs

How to be one of the ‘haves’ of SaaS

Sectors where New Zealand startups are poised to win

What are the ‘jobs to be done’ of an investment manager?

Ah, friends, it is good to be back,

N 

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Dashworks is a search engine for your company’s sprawling internal knowledge

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As a company grows, the amount of important information employees need to keep track of inevitably grows right along with it. And, as your tech stack gets more complicated, that information ends up split up across more places — buried in Slack threads, tucked into Jira tickets, pushed as files on Dropbox, etc.

Dashworks is a startup aiming to be the go-to place for all of that internal knowledge. Part landing page and part search engine, it hooks into dozens of different enterprise services and gives you one hub to find what you need.

On the landing page front, Dashworks is built to be your work laptop’s homepage. It’s got support for broadcasting company wide announcements, building out FAQs, and sharing bookmarks for the things you often need and can never find — your handbooks, your OKRs, your org charts, etc.

More impressive, though, is its cross-tool search. With backgrounds in natural language processing at companies like Facebook and Cresta, co-founders Prasad Kawthekar and Praty Sharma are building a tool that allow you to ask Dashworks questions and have them answered from the knowledge it’s gathered across all of those aforementioned Slack threads, or Jira tickets, or Dropbox files. It’ll give you a search results page of relevant files across the services you’ve hooked in — but if it thinks it knows the answer to your question, it’ll just bubble that answer right to the top of the page, Google Snippets style.

Image Credits: Dashworks

Right now Dashworks can hook into over 30 different popular services, including Airtable, Asana, Confluence, Dropbox, Gmail, Google Drive, Intercom, Jira, Notion, Slack, Salesforce, Trello, and a whole bunch more — with more on the way, prioritized by demand.

Giving another company access to all of those services and the knowledge within might be unsettling — something the Dashworks team seems quite aware of. Kawthekar tells me that their product is SOC-2 certified, that all respective data is wiped from their servers if you choose to disconnect a service, and that, for teams that are equipped to host the tool themselves, they offer a fully on-prem version.

This week Dashworks is announcing that it raised a $4M round led by Point72 ventures, backed by South Park Commons, Combine Fund, Garuda Ventures, GOAT Capital, Unpopular Ventures, and Starling Ventures. Also backing the round is a number of angels, including Twitch co-founder Emmett Shear and Gusto co-founders Josh Reeves and Tomer London. The company was also a part of Y Combinator’s W20 class.

Image Credits: Dashworks

Source: Tech

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Daily Crunch: Google will offer G Suite legacy edition users a ‘no-cost option’

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To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PST, subscribe here.

Hello and welcome to Daily Crunch for January 28, 2022! It’s nearly blizzard o’clock where I am, so please enjoy the following newsletter as my final missive before hunkering down. In happier and better news, TechCrunch Early Stage is coming up in just a few months and not only am I hype about it, I’ll hopefully be there IRL. See you soon! – Alex

The TechCrunch Top 3

  • Google invests up to $1B in Airtel: With a $700 million investment and $300 million in “multi-year commercial agreements” with Airtel, and Indian telco, Google has made its second major bet on Indian infra. Recall that Google also put money into Jio, another Indian telco. The deal underscores the importance of the country in the future of technology revenues.
  • What’s ahead for Europe: On the heels of news that European startups had an outsized 2021 when it came to fundraising, TechCrunch explored what’s ahead for the continent. Some expect a slowdown from peak activity, while others anticipate further acceleration. Regardless of which perspective you favor, European venture investment is expected to remain elevated for some time to come.
  • Zapp raises $200M: And speaking of European startups, Zapp, the U.K.-based quick-convenience delivery startup, just raised a massive Series B. The company previously raised $100 million, meaning that this round was big in absolute and comparative terms. As we see some consolidation in the fast-delivery space, this deal caught our eye.

Startups/VC

  • Are charter cities the future for African tech growth? TechCrunch’s Tage Kene-Okafor has a great piece up on the site noting that “African cities have the fastest global urban growth rate,” which is leading to overcrowding. Some folks think that “charter cities offer a solution.” Special economic zones of all types have been tried before – will they offer African tech a faster route forward?
  • Personalized learning is hot: Our in-house edtech expert Natasah Mascarenhas has a great piece out today on personalized learning startups – Learnfully, Wayfinder, Empowerly, and others – that are taking the lessons of remote schooling to heart and working to make products that work better for our kids. It’s an encouraging, fascinating story.
  • Rise wants to remake team calendaring: There is no shortage of apps in the market to help individuals and teams work together. But we might not need as many as we have. That’s why Rise is making me think. The team calendaring app just raised a few million, and could replace a few tools that myself and friends use. I wonder if the solution to the Tool Overload of 2022 is tools that do less, intentionally.
  • Canvas wants non-tech folks to be able to squeeze answers from data: Developers are in short supply, so no-code tools that allow folks who don’t sling code to do their own building are blowing up. Similarly, a general dearth of data science talent in the market is creating space for tools like Canvas, which “is going all in with a spreadsheet-like interface for non-technical teams to access the information they need without bothering data teams,” TechCrunch reports.
  • Zigbang buys Samsung IoT business: The IoT promises of yesteryear are coming true, and not. Samsara recently went public on the back of its IoT business. That was a win for the category. That Zigbang, a South Korean proptech startup, is buying Samsung’s IoT unit feels slightly less bullish.
  • Series F-tw? Once upon a time I would have mocked a Series F as indication that the company in question had failed to go public. But that was then. Today Series Fs are not that rare. Indian B2B marketplace Moglix just raised one, which doubled its valuation to $2.6 billion. Tiger co-led the $250 million round.

And if you are looking down the barrel of a blizzard, TechCrunch’s Equity podcast has your downtime covered. Enjoy!

European, North American edtech startups see funding triple in 2021

Image Credits: Bet_Noire (opens in a new window) / Getty Images

Pre-pandemic, VCs were notoriously reluctant to invest in education-related companies. Today, edtech startups are seeing higher average deal sizes, more seed and pre-seed funding from non-VC investors, and an influx of generalists.

According to Rhys Spence, head of research at Brighteye Ventures, funding for edtech startups based in Europe and North America trebled over the last year.

“Exciting companies are spawning across geographies and verticals, and even generalist investors are building conviction that the sector is capable of producing the same kind of outsized returns generated in fintech, healthtech and other sectors,” writes Spence.

(TechCrunch+ is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Big Tech Inc.

  • Northern Light Venture Capital’s He Huang says the Chinese robotics market is overheated: Per the investor, robotics in China is “riddled with speculation and overvalued companies,” calling the situation a bubble. It’s worth noting that China’s central government is working to retool where its tech investment dollars flow.
  • Robinhood goes down, back up: This morning, in the wake of the company’s lackluster earnings report, TechCrunch dug through why Robinhood’s stock sold off in after-hours, pre-market, and early trading sessions yesterday and today. And then Robinhood turned around and gained ample ground during the rest of the day. It’s a weird market moment, but good news for the U.S. fintech all the same.
  • Google to allow legacy G Suite users to move to free accounts: After angering techies still using the “G Suite legacy free edition” by announcing that it was ending the program and requiring payment, the search giant has decided to ”offer more options to existing users,” TechCrunch reports. Somewhere inside of Google, a business decision just met the market and was flipped on its head. Makes you wonder who is calling the shots over there, and if they previously worked for McKinsey.

TechCrunch Experts

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TechCrunch wants you to recommend growth marketers who have expertise in SEO, social, content writing and more! If you’re a growth marketer, pass this survey along to your clients; we’d like to hear about why they loved working with you.

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3 experiments for early-stage founders seeking product-market fit

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At Human Ventures, we have a fund for pre-seed and seed-stage investments, a venture studio and an Entrepreneur in Residence (EIR) program.

Through this work, we’ve discovered a lot about how different founders fulfill their journey of customer discovery and product-market fit. One of the largest challenges for pre-seed and seed stage founders is determining where to start: There are a million things to do. What should you do at each stage?

We interviewed three founders from our portfolio, all of whom ran discovery experiments to find their product-market fit at different stages of their company’s development.

Here’s what they had to share:

Pre-MVP/customer discovery phase: Tiny Organics

Tiny Organics is a plant-based baby and toddler food company on a mission to shape childrens’ palates so they’ll choose and love vegetables from their earliest days. The company raised $11 million in their Series A in 2021 and is growing at over 500% annually.

Founders Sofia Laurell and Betsy Fore joined our venture studio as EIRs and went through a six-week discovery sprint. As Sofia explains, they knew they wanted to build something to make parents’ lives easier and threw a lot of initial ideas at the wall from the Finnish baby box 2.0 (Sofia is Finnish) to an easier way to create Instagrammable baby pictures.

They went through multiple exercises to test the viability of new parents’ most pressing and urgent needs:

  • Conduct a “Start with Why” exercise
  • Define the “Jobs to be Done”
  • Create a lean canvas for each (viable) concept
  • Define the user journeys
  • Conduct user surveys using platforms like pollfish.com and 1Q (instant survey tool)
  • Identify and define their customer personas
  • Conduct customer interviews and synthesize them
  • Construct concept prototypes

They also met prospective customers, conducting a focus group of 10-15 moms. When the founders asked them to text them what they were feeding their children along with pictures for a week, they realized the lack of healthy finger foods in the market, thus sparking the idea for Tiny Organics.

Source: Tech

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