For more than a year we’ve been investigating Cambridge Analytica and its links to the Brexit Leave campaign in the UK and Team Trump in the US presidential election. Now, 28-year-old Christopher Wylie goes on the record to discuss his role in hijacking the profiles of millions of Facebook users in order to target the US electorate
The first time I met Christopher Wylie, he didn’t yet have pink hair. That comes later. As does his mission to rewind time. To put the genie back in the bottle.
By the time I met him in person, I’d already been talking to him on a daily basis for hours at a time. On the phone, he was clever, funny, bitchy, profound, intellectually ravenous, compelling. A master storyteller. A politicker. A data science nerd.
Alexander Nix, CEO
It showed these odd patterns. People who liked 'I hate Israel' on Facebook also tended to like KitKats
If you do not respect the agency of people, anything you do after that point is not conducive to democracy
Facebook has denied and denied this. It has failed in its duties to respect the lawContinue reading...
It seems like startup news is full of overnight success stories and sudden failures, like the scooter rental company that went from zero to a $300 million valuation in months or the blood-testing unicorn that went from billions to nearly naught.
But what about those other companies that mature more gradually? Is there such a thing as slow and successful in startup-land?
To contemplate that question, Crunchbase News set out to assemble a data set of top late-blooming startups. We looked at companies that were founded in or before 2010 that raised large amounts of capital after 2015, and we also looked at companies founded a least five years ago that raised large early-stage funds in the last year. (For more details on the rules we used to select the companies, check “Data Methods” at the end of the post.)
The exercise was a counterpoint to a data set we did a couple of weeks ago, looking at characteristics of the fastest growing startups by capital raised. For that list, we found plenty of similarities between members, including a preponderance of companies in a few hot sectors, many famous founders and a lot of cancer drug developers.
For the late bloomers, however, patterns were harder to pinpoint. The breakdown wasn’t too different from venture-backed companies overall. Slower-growing companies could come from major venture hubs as well as cities with smaller startup ecosystems. They could be in biotech, medical devices, mobile gaming or even meditation.
What we did find, however, was an interesting and inspiring collection of stories for those of us who’ve been toiling away at something for a long time, with hopes still of striking it big.Pivots and patience
Even youthful startups have been known to make a major pivot or two. So it’s not surprising to see a lot of pivots among late bloomers that have had more time to tinker with their business models.
One that fits this mold is Headspace, provider of a popular meditation app. The company, founded in 2010 by a British-born Buddhist monk with a degree in circus arts, started as a meditation-focused events startup. But it turned out people wanted to build on their learning on their own time, so Headspace put together some online lessons. Today, Santa Monica-based Headspace has millions of users and has raised $75 million in venture funding.
For late bloomers, the pivot can mean going from a model with limited scalability to one that can attract a much wider audience. That’s the case with Headspace, which would have been limited in its events business to those who could physically show up. Its online model, with instant, global reach, turns the business into something venture investors can line up behind.Sometimes your sector becomes hip
They say if you wait long enough, everything comes back in style. That mantra usually works as an excuse for hoarding ’80s clothes in the attic. But it also can apply to entrepreneurial companies, which may have launched years before their industry evolved into something venture investors were competing to back.
Take Vacasa, the vacation rental management provider. The company has been around since 2009, but it began raising VC just a couple of years ago amid a broad expansion of its staff and property portfolio. The Portland-based company has raised more than $140 million to date, all of it after 2016, and most in a $103 million October round led by technology growth investor Riverwood Capital.
CloudCraze, which was acquired by Salesforce earlier this week, also took a long time to take venture funding. The Chicago-based provider of business-to-business e-commerce software launched in 2009, but closed its first VC round in 2015, according to Crunchbase records. Prior to the acquisition, the company raised about $30 million, with most of that coming in just a year ago.
Meanwhile, some late bloomers have always been fashionable, just not necessarily as VC-funded companies. Untuckit, a clothing retailer that specializes in button-down shirts that look good untucked, had been building up its business since 2011, but closed its first venture round, a Series A led by VC firm Kleiner Perkins, last June.Slow-growing venture-backed startups are still not that common
So yes, there is still capital available for those who wait. However, the truth of the matter is most companies that raise substantial sums of venture capital secure their initial seed rounds within a couple years of founding. Companies that chug along for five-plus years without a round and then scale up are comparatively rare.
That said, our data set, which looks at venture and seed funding, does not come close to capturing the full ecosystem of slow-growing startups. For one, many successful bootstrapped companies could raise venture funding but choose not to. And those who do eventually decide to take investment may look at other sources, like private equity, bank financing or even an IPO.
Additionally, the landscape is full of slow-growing startups that do make it, just not in a venture home run exit kind of way. Many stay local, thriving in the places they know best.
On the flip side, companies that wait a long time to take VC funding have also produced some really big exits.
Take Atlassian, the provider of workplace collaboration tools. Founded in 2002, the Australian company waited eight years to take its first VC financing, despite plentiful offers. It went public two years ago, and currently has a market valuation of nearly $14 billion.
The moral: Those who take it slow can still finish ahead.
We primarily looked at companies founded in 2010 or earlier in the U.S. and Canada that raised a seed, Series A or Series B round sometime after the beginning of last year, and included some that first raised rounds in 2015 or later and went on to substantial fundraises. We also looked at companies founded in 2012 or earlier that raised a seed or Series A round after the beginning of last year and have raised $30 million or more to date. The list was culled further from there.
The message to investors from Spotify last week had a familiar ring for any veteran of the tech gold rush: “The trend towards profitability is clear.”
The music streaming service is hoping to banish the memory of a difficult year for technology flotations. Similar promises of digital alchemy – heavy cash investment transforming into an ever-burgeoning bottom line – followed the stock-market launch of Snap last year. So far, investors in the owner of Snapchat have been underwhelmed, but last week 35-year-old Daniel Ek, Spotify’s co-founder and chief executive, was adamant that his music streaming service would deliver the kind of returns that have proved elusive for tech upstarts since the blockbuster float of Facebook.Continue reading...
Drama is heating up between the dating apps.
Tinder, which is owned by Match Group, is suing rival Bumble, alleging patent infringement and misuse of intellectual property.
The suit alleges that Bumble “copied Tinder’s world-changing, card-swipe-based, mutual opt-in premise.”
It’s complicated because Bumble was founded by CEO Whitney Wolfe, who was also a co-founder at Tinder. She wound up suing Tinder for sexual harassment.
(It wouldn’t be the first time a dating site sued another and then bought it. JDate did this with JSwipe.)
I have, um, tested out both Tinder and Bumble and they are similar. Both let you swipe on nearby users with limited information like photos, age, school and employer. And users can only chat if both opt-in.
However, Tinder has developed more of the reputation as a “hookup” app and Bumble doesn’t seem to have quite the same image, largely because it requires women to initiate the conversation, thus setting the tone.
We’ve reached out to the companies for comment.
Zuora’s IPO may signal that Dropbox going public, and seeing a price range that while under its previous valuation seems relatively reasonable, may open the door for coming enterprise initial public offerings. Cloud security company Zscaler also made its debut earlier this week, with the stock doubling once it began trading on the Nasdaq. Zuora will list on the New York Stock Exchange under the ticker “ZUO.” Zuora CEO Tien Tzuo told The Information in October last year that it expected to go public this year.
Zuora’s numbers show some revenue growth, with its subscriptions services continue to grow. But its losses are a bit all over the place. While the costs for its subscription revenues is trending up, the costs for its professional services are also increasing dramatically, going from $6.2 million in Q4 2016 to $15.6 million in Q4 2017. The company had nearly $50 million in overall revenue in the fourth quarter last year, up from $30 million in Q4 2016.
But, as we can see, Zuora’s “professional services” revenue is an increasing share of the pie. In Q1 2016, professional services only amounted to 22% of Zuora’s revenue, and it’s up to 31% in the fourth quarter last year. It also accounts for a bigger share of Zuora’s costs of revenue, but it’s an area that it appears to be investing more.
Zuora’s core business revolves around helping companies with subscription businesses — like, say, Dropbox — better track their metrics like recurring revenue and retention rates. Zuora is riding a wave of enterprise companies finding traction within smaller teams as a free product and then graduating them into a subscription product as more and more people get on board. Eventually those companies hope to have a formal relationship with the company at a CIO level, and Zuora would hopefully grow up along with them.
Snap effectively opened the so-called “IPO window” in March last year, but both high-profile consumer IPOs — Blue Apron and Snap — have had significant issues since going public. While both consumer companies, it did spark a wave of enterprise IPOs looking to get out the door like Okta, Cardlytics, SailPoint and Aquantia. There have been other consumer IPOs like Stitch Fix, but for many firms, enterprise IPOs serve as the kinds of consistent returns with predictable revenue growth as they eventually march toward an IPO.
The filing says it will raise up to $100 million, but you can usually ignore that as it’s a placeholder. Zuora last raised $115 million in 2015, and was PitchBook data pegged the valuation at around $740 million, according to the Silicon Valley Business Journal. Benchmark Capital and Shasta Ventures are two big investors in the company, with Benchmark still owning around 11.1% of the company and Shasta Ventures owning 6.5%. CEO Tien Tzuo owns 10.2% of the company.
GrokStyle’s simple concept of “point your camera at a chair (or lamp, or table…) and find others like it for sale” attracted $2 million in funding last year, and the company has been putting that cash to work. And remarkably for a company trying to break into the home furnishing market, it landed furniture goliath IKEA as its first real customer; GrokStyle’s point-and-search functionality is being added to the IKEA Place AR app.
What GrokStyle does, in case you don’t remember, is identify any piece of furniture your camera can see — in your house, at a store, in a catalog — and immediately return similar pieces or even the exact one, with links to buy them.
I remember being skeptical last year that the product could possibly work as well as they said it did. But a demo shut my mouth real quick. The growing team is led by Sean Bell and Kavita Bala, who spun GrokStyle out of their work on computer vision at Cornell University — and it’s clear they know what they’re doing.
IKEA thought so as well. In December, Bell and Bala got a chance to present it to Michael Valdsgaard, IKEA’s “Leader of Digital Transformation.” He loved it.
“He just said, ‘OK, this needs to be in the next release,'” recalled Bell, “and in 3 months we were able to turn it around for them.”
It seemed as clear to Valdsgaard as it is to GrokStyle that the advent of mixed reality in all its forms necessitates a fundamentally different kind of search. If information is to be presented and mixed visually, why shouldn’t you be able to find and browse things the same way?
“To make AR work, that’s where you really need tech like visual search,” said Bala. “It lets you find things, cool designs and furniture, all in situ and visualize it in place.”
What’s more, she noted, images and video are just how people communicate and record things now. “People take pictures of absolutely everything. If you want to remember someone’s phone number, sometimes you just take a picture of it. That’s the world we’re living in now.”
Being able to search among a visual record is a powerful tool, and one few companies have unlocked in any kind of powerful way. GrokStyle could very easily have overshot to begin with and tried to offer consumers an app that categorizes and searches among your photos and others, but that way lies great cost and questionable utility.
I originally thought that furniture was a rather prosaic and narrow field in which to deploy their obviously effective tech, but in fact it was a very wise choice. IKEA is a big get, but in the long term it’s the narrow end of a wedge.
“We’re also building recommendation systems and business intelligence tools,” Bala said. “Once you see what people are searching for, there are tons of opportunities.”
Imagine, for example, someone using GrokStyle’s tech while shopping at Crate and Barrel. They scan an item, see how it would look in their living room, then see a similar but slightly cheaper one available from a competitor. This is a critical moment in retail: the moment when Crate and Barrel and this other retailer compete for the consumer’s attention and money. Being at the center of that is a propitious position.
For now the plan is to execute on IKEA and get the knowledge out there that this exists and works well enough to be adopted by a major retailer. “We’re inviting retailers to come talk to us, and as part of working with them we’re setting up pilots and things,” said Bell. APIs are also in the offing.
As a sort of cherry on top of all this, the company also recently secured another $750K in grants from the National Science Foundations. GrokStyle had received $225K as part of the Small Business Innovation Research program, and successfully competed for the other three-quarters of a million up for grabs in Phase II. That ought to keep the lights on for a while.