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Startup names may have passed peak weirdness

Posted by on Feb 9, 2019 in Column, naming, Startups, TC | 0 comments

For years, decades even, startup names have been getting weirder. This isn’t a scientific verdict, but it is how things have seemed to someone who spends a lot of hours perusing this stuff.

Startups have had a long run of branding themselves with creative misspellings, animal names. human first names, made-up words, adverbs and other odd collections of letters. It’s gone on so long it now seems normal. Names like Google, Airbnb and Hulu, which sounded strange at first, are now part of our everyday vocabulary.

Over the past few quarters, however, a peculiar thing has been happening: Startup founders are choosing more conventional-sounding names.

“As we reach the edge of strangeness… they’re saying: ‘It’s too weird. I’m uncomfortable,’” said Athol Foden, president of Brighter Naming, a naming consultancy. While quirky startup monikers haven’t gone away, founders are increasingly comfortable with less-unusual-sounding choices.

Foden’s observations are reflected in our annual Crunchbase News survey of startup naming trends. We’re seeing a proliferation of startups choosing simple words that describe their businesses, including companies like Hitch, an app for long-distance car rides; Duffel, a trip-booking startup named after the popular travel bag; and Coder, a software development platform.

But fortunately for fans of offbeat names, the trend is only toward less weirdness, not no weirdness. Those who wish to patronage seed-stage startups can still buy tampons from Aunt Flow, get parenting tips from an app called Mush or get insurance from a startup called Marshmallow.

Below, we look in more detail at some of the more popular startup naming practices and how they are trending.

Creativv misPelling5

For a long time, it seemed like a vast number of startups selected names largely by disabling the spell checker.

Most desirable dictionary words were already in use as domains or too pricey to acquire. So founders took to dropping vowels, subbing a “y” for an “i” or adding an extra consonant to make it work. The strategy worked well for a lot of well-known companies, including Lyft, Tumblr, Digg, Flickr, Grindr and Scribd.

These days, creative misspellings are still pretty common among early-stage founders. Our name survey unearthed a big number (see partial list) that recently raised funding, including Houwser, an upstart real estate brokerage; Swytch, developer of a kit for converting bikes to e-bikes; and Wurk, a provider of human resources and compliance software for the cannabis industry.

However, creative misspellings are getting less popular, Foden said. Early-stage founders are turned off by the prospect of having to spell out their names to people unfamiliar with the brand (which for seed-stage companies includes pretty much everyone).

Puns

One of the more fun naming styles is the pun. In our perusal of companies that raised seed funding in the past year, we came across a number of startups employing some sort of play-on words.

We put together a list of seven of the punniest names here. In addition to Aunt Flow, the list includes WeeCare, a network of daycare providers, and Serial Box, a digital content producer. Crunchbase News also created its own fictional startup — drone chicken delivery startup Internet of Wings — in an explainer series on startup funding.

Perhaps some day business naming will harken back to the industrial age, when corporate titans had exceedingly boring and obvious names.

Real companies with pun names that have matured to exit were harder to pinpoint. A couple that have gone public are Groupon and MedMen, a cannabis company that went public in Canada and is valued around CA$2 billion.

For some reason, it appears pun names are more popular in the brick-and-mortar world than the tech startup sphere. Restaurants specializing in the Vietnamese noodle soup Pho have dozens of play-on-word names memorialized in lists like this. Ditto for pet stores.

Personally, I’d like to see more internet startups rolling out pun-based names. Foden would, too, and he has even volunteered one suggestion for someone who wants to start a business applying artificial intelligence to artificial insemination: Ai.ai.

Made-up words that sound real

There are more than 170,000 non-obsolete words in the English language, per the Oxford English Dictionary. Startups, however, are convinced we need more.

Hence, one of the more enduringly popular business-naming practices is to come up with something that sounds like an actual word, even if it isn’t.

We put together a list of examples of this naming style among recently seed-funded startups.

It includes Trustology, which is building a platform to safeguard crypto assets; Invocable, a developer of voice design tools for Alexa apps; and Locomation, which focuses on autonomous trucking technology.

Naming advisors like to see the made-up word name trend on the rise, Foden said, because it’s the kind of thing companies pay a consultant to figure out. Another advantage is it’s easier to top search results for a made-up word.

Normal-sounding names

Lastly, let’s look at those rebel startups choosing familiar dictionary words for their names.

We put together a list of some here. Besides the aforementioned Duffel, Hitch and Coder, there’s Decent, a healthcare startup; Chief, a women’s networking group; Journal, a note organizing tool; and many more.

Startups are less concerned than they used to be with snagging a dot-com domain that contains just their name. Commonly, they’ll add a prefix to their domain (joinchief.com, usejournal.com), choose an alternate domain (Hitch.net) or both.

Overall, Foden said, startups today are putting less emphasis on securing a dot-com suffix or an exact domain name match. Google parent Alphabet, in particular, made the alternate domain idea more palatable. It helped to see one of the world’s richest corporations forego Alphabet.com in favor of abc.xyz.

Where is it all going?

They say history repeats itself. If so, perhaps some day business naming will harken back to the industrial age, when corporate titans had exceedingly boring and obvious names like Standard Oil, U.S. Steel and General Electric.

For now, however, we live in era in which the most valuable companies have names like Google and Facebook. And to us, they sound perfectly normal.

Methodology: For the naming data set, we looked primarily at companies in English-speaking countries that raised seed funding after 2018. To broaden the potential list of names, we also included some companies funded in 2017. We also tried to limit the lists, where possible to companies founded in the past three years, although there were occasional exceptions.


Source: The Tech Crunch

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Where seed and early-stage funding is growing, contracting or holding steady

Posted by on Jan 26, 2019 in Column, early stage funding, seed funding, TC, Venture Capital | 0 comments

In startup circles, it’s trendy to talk about how entrepreneurs are leaving high-tax, high cost-of-living metros for cheaper locales. While Silicon Valley remains ground central for hobnobbing with investors, the common wisdom goes, early-stage funding stretches much further elsewhere.

As memes go, it makes sense. But does the data bear this out? Is Texas turning into the new California? Is Salt Lake City edging out Seattle? Are the largest U.S. startup hubs losing their edge in luring promising early-stage startups?

In a somewhat eccentric data crunch, Crunchbase News set out to see the extent to which certain regions are gaining in early-stage and seed activity. We also attempted to see whether any of the big, established startup ecosystems are showing obvious signs of decline.

To lay out our case, we looked at four metrics. First, we measured total reported annual seed funding and round counts by state for the 18 largest venture capital ecosystems. Next, we looked at seed through early-stage investment and deal counts across three size ranges. They include moderately sized rounds of $1 million to $5 million, larger ones of more than $5 million and less than $50 million and really big early-stage investments of $50 million and up.

The idea with the size-range data sets was to see how tech hubs stack up in terms of launching well-funded startups. It’s one thing to have a lot of seed-funded startups. It’s quite another to see them go on to close follow-on rounds in the millions or tens of millions. We also wanted to see whether the top startup hubs are retaining their dominance in launching companies that go on to secure the biggest early-stage rounds.

(If the round sizes seem overly large for seed or early-stage investments, keep in mind that in 2018 and the current boom, traditional buckets for rounds have been breached; so what was once a Series D in terms of dollars, can now in fact be an early-stage round in some contexts.)

Here are some of the broad findings:

  • Top hubs hold pretty steady. The largest venture ecosystems aren’t showing signs of significant contraction this past year at seed and early-stage. Across the metrics we measured, the three largest (California, New York and Massachusetts) are hanging on to similar shares of funding as prior years.
  • Utah and Pennsylvania outperforms. Two states stood out in terms of posting gains across several seed and early-stage funding metrics: Pennsylvania and Utah. Pennsylvania benefited from heightened investment in biotech, transportation and robotics, areas in which it has large talent pools. Utah, meanwhile, prevailed in enterprise software.
  • Texas sees big gains in larger rounds. Texas didn’t see an annual rise in total reported seed funding, moderate-size deals or really big early rounds. However, the state was red-hot in producing startups that secured rounds of more than $5 million and less than $50 million.

Below, we’ll flesh out these findings, as well as take a look at the overall breakdown of seed and early-stage funding.

Here’s how the top states for venture funding stack up

To begin, let’s take a look at the breakdown for seed-stage funding and rounds among the 18 states that account for the overwhelming majority of investments:

As you can see, the top six states take in the lion’s share of seed funding, with California the leader of the pack by several multiples.

Moderately sized rounds by state

Next, let’s look at how the top states rank by another metric: Moderately sized seed and early-stage rounds of between $1 million and $5 million.

The reason we included this metric is because it includes very early-stage companies that have a lot of runway ahead, but have already attracted some serious investor interest. We also provided a year-over-year comparison, as it may be an early indicator of a state’s venture ecosystem gaining or losing traction.

Without further ado, here’s the chart:

As you can see above, the top five states for venture investment didn’t see big gains or losses in their share of investment at the $1 million to $5 million round size. Where we did see big increases was in two aforementioned states: Pennsylvania and Utah.

Early-stage rounds between $5M and $50M

Another metric to gauge a tech hub’s momentum is its ability to produce startups that raise pretty big seed and early-stage rounds.

With this in mind, we summed up deal counts and total investment by state for rounds of more than $5 million but less than $50 million for companies founded in the past four years. The results are charted below:

 

For mid-sized tech hubs, we see a good amount of year-over-year fluctuation in share of total investment for this category. A single big round or two can really move the needle, so it’s probably wise not to make to much of a single year’s fluctuation.

Texas, however, really is showing momentum: The Lone Star State is the largest tech ecosystem where we saw a really big year-over-year increase in rounds over $5 million and under $50 million. In 2018, Texas had 30 rounds in this category (see list), bringing in a total of $366 million. That’s up from just 13 funding rounds in the category bringing in $138 million in 2017. While we can’t point to clear-cut causes for the increase without deeper analysis, it’s apparent this is a bullish indicator for the Texan startup scene.

Early-stage rounds of $50M and up

Last, we looked at really big seed and early-stage rounds of $50 million and up for companies founded in the prior four years.

This is a funding category that barely existed several years ago. However, giant early-stage rounds have really mushroomed in recent quarters with the emergence of super-sized venture funds like the SoftBank Vision Fund and a greater willingness among investors to throw hundreds of millions at nascent sectors like scooter sharing.

The data indicates that really big early-stage rounds still primarily occur in the biggest startup hubs. The San Francisco Bay Area, New York and Boston were home to more than 85 percent of companies in the 2018 list for the category. No other state brought in more than one deal.

We have more details on how the numbers stack up in the chart below:

 

More power to Pennsylvania and Utah

In conclusion, we’d have to say that rumors of the slow death of California’s startup scene have been greatly exaggerated. Although all three of the top states for startup funding are high-tax, high cost-of-living locales, they’re also continuing to hit high marks in launching entrepreneurial companies and raising capital for them to grow.

Nonetheless, the data does reveal some apparent up-and-comers among startup hubs. Two that we notice are Pennsylvania and Utah.

Pennsylvania outperforms: I grew up in the Philadelphia area, so naturally I’m pleased to see the state ranking deservedly higher across our seed and early-stage metrics.

However, Philly can’t get all the credit for the rise. Pennsylvania has the good fortune of housing two startup hubs: Philly and Pittsburgh. Traditionally, Philadelphia has been a strong contender in biotech, with strength also in fintech, media and other sectors. Pittsburgh, as we’ve reported previously, is emerging as a hotbed for robotics, AI and transport.

Between those metro hubs, Pennsylvania saw a big rise year-over-year in round counts across all the categories we tracked (except for $50-plus million rounds, which were tied with 2017). Investment totals were also up markedly.

And don’t forget Utah: Utah has also been moving up in the ranks, delivering a particularly impressive performance given its population of just 3 million. By our estimates, Utah is the least-populated state to rank as a major startup hub.

Enterprise software is the dominant sector among sizably funded Utah companies. However, we also see a lot of non-SaaS business models pop up, in areas including fintech, audio devices and even peer-to-peer storage.

The takeaway: It looks like emerging early-stage startup hubs don’t need to siphon talent from the largest tech ecosystems to thrive. California, New York and Boston don’t appear to be losing their dominance. But that isn’t stopping smaller startup hubs from thriving too.

Methodology

The data set looks at funding levels by state. In most states, the vast majority of venture activity is in a single metro area. Exceptions are California, with the San Francisco Bay Area, Los Angeles and San Diego, as well as Pennsylvania, with both Pittsburgh and Philadelphia. For rounds above $5 million, we limited the data set to startups founded after January 1, 2015.

We did not compare 2018 seed funding totals to prior years due to the fact that a sizable portion of seed rounds are reported and recorded in the Crunchbase data set months after they close. As a result, reported figures for recent months undercount total funding activity.


Source: The Tech Crunch

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Robot couriers scoop up early-stage cash

Posted by on Dec 1, 2018 in bots, Column, Daimler, DoorDash, estonia, food delivery, nuro, Postmates, robot, Robotics, San Francisco, Silicon Valley, starship technologies, TC, Tencent, Toyota AI Ventures, waymo | 0 comments

Much of the last couple of decades of innovation has centered around finding ways to get what we want without leaving the sofa.

So far, online ordering and on-demand delivery have allowed us to largely accomplish this goal. Just point, click and wait. But there’s one catch: Delivery people. We can never all lie around ordering pizzas if someone still has to deliver them.

Enter robots. In tech-futurist circles, it’s pretty commonplace to hear predictions about how some medley of autonomous vehicles and AI-enabled bots will take over doorstep deliveries in the coming years. They’ll bring us takeout, drop off our packages and displace lots of humans who currently make a living doing these things.

If this vision does become reality, there’s a strong chance it’ll largely be due to a handful of early-stage startups currently working to roboticize last-mile delivery. Below, we take a look at who they are, what they’re doing, who’s backing them and where they’re setting up shop.

The players

Crunchbase data unearthed at least eight companies in the robot delivery space with headquarters or operations in North America that have secured seed or early-stage funding in the past couple of years.

They range from heavily funded startups to lean seed-stage operations. Silicon Valley-based Nuro, an autonomous delivery startup founded by former engineers at Alphabet’s Waymo, is the most heavily funded, having raised $92 million to date. Others have raised a few million.

In the chart below, we look at key players, ranked by funding to date, along with their locations and key investors.

Who’s your backer?

While startups may be paving the way for robot delivery, they’re not doing so alone. One of the ways larger enterprises are keeping a toehold in the space is through backing and partnering with early-stage startups. They’re joining a long list of prominent seed and venture investors also eagerly eyeing the sector.

The list of larger corporate investors includes Germany’s Daimler, the lead investor in Starship Technologies. China’s Tencent, meanwhile, is backing San Francisco-based Marble, while Toyota AI Ventures has invested in Boxbot.

As for partnering, takeout food delivery services seem to be the most active users of robot couriers.

Starship, whose bot has been described as a slow-moving, medium-sized cooler on six wheels, is making particularly strong inroads in takeout. The San Francisco- and Estonia-based company, launched by Skype founders Janus Friis and Ahti Heinla, is teaming up with DoorDash and Postmates in parts of California and Washington, DC. It’s also working with the Domino’s pizza chain in Germany and the Netherlands.

Robby Technologies, another maker of cute, six-wheeled bots, has also been partnering with Postmates in parts of Los Angeles. And Marble, which is branding its boxy bots as “your friendly neighborhood robot,” teamed up last year for a trial with Yelp in San Francisco.

San Francisco Bay Area dominates

While their visions of world domination are necessarily global, the robot delivery talent pool remains rather local.

Six of the eight seed- and early-stage startups tracked by Crunchbase are based in the San Francisco Bay Area, and the remaining two have some operations in the region.

Why is this? Partly, there’s a concentration of talent in the area, with key engineering staff coming from larger local companies like Uber, Tesla and Waymo . Plus, of course, there’s a ready supply of investor capital, which bot startups presumably will need as they scale.

Silicon Valley and San Francisco, known for scarce and astronomically expensive housing, are also geographies in which employers struggle to find people to deliver stuff at prevailing wages to the hordes of tech workers toiling at projects like designing robots to replace them.

That said, the region isn’t entirely friendly territory for slow-moving sidewalk robots. In San Francisco, already home to absurdly steep streets and sidewalks crowded with humans and discarded scooters, city legislators voted to ban delivery robots from most places and severely restrict them in areas where permitted.

The rise of the pizza delivery robot manager

But while San Francisco may be wary of a delivery robot invasion, other geographies, including nearby Berkeley, Calif., where startup Kiwi Campus operates, have been more welcoming.

In the process, they’re creating an interesting new set of robot overseer jobs that could shed some light on the future of last-mile delivery employment.

For some startups in early trial mode, robot wrangling jobs involve shadowing bots and making sure they carry out their assigned duties without travails.

Remote robot management is also a thing and will likely see the sharpest growth. Starship, for instance, relies on operators in Estonia to track and manage bots as they make their deliveries in faraway countries.

For now, it’s too early to tell whether monitoring and controlling hordes of delivery bots will provide better pay and working conditions than old-fashioned human delivery jobs.

At least, however, much of it could theoretically be done while lying on the sofa.


Source: The Tech Crunch

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Getting personal: Funding rises for software-driven tastemakers

Posted by on Sep 1, 2018 in Column, funding, software-driven personalization, software-driven recommendation, Venture Capital | 0 comments

It has the feel of a science fiction plot. A young man heads online to look up deals on things he likes.

Slowly, the tables turn. Now, it’s the computer that starts telling him what he wants. Buy these pants. Play this song. Eat this pizza. Date this girl. Read news with this political spin…

OK, I lied. This isn’t sci-fi at all. It’s the current reality. And it’s the kind of thing venture capitalists seem keen on funding.

An analysis of Crunchbase data shows that global venture funding for personalization and recommendation platforms has surged in recent quarters. Investors are pouring billions into the space, creating a string of newly minted unicorns relying on algorithms to customize music streams, news feeds and much more.

Exits are also riding high for software-driven tastemakers. Recent ones include Spotify’s smash IPO, along with China-based news aggregator Qutoutiao, which is poised to go public at a multi-billion-dollar valuation.

Herein we take a look at where the money is going, how it could accelerate and the changing nature of how we find new things to like.

Getting personal

Before we go further, let’s define the personalization category. Essentially, we’re looking at business models that involve using software to match humans with things they might want to consume. This could be music, news, handbags, wine, other humans and lots more.*

Personalization isn’t generally considered a discrete sector. To use a cooking metaphor, it’s sort of like chicken. It’s not a cuisine so much as an ingredient you can dress up in almost any culinary style. Likewise, you can add software-driven personalization and recommendations to a wide variety of businesses focused on e-commerce, digital media, food delivery and so on.

It’s apparently a useful ingredient for driving up valuations. In the table below, we lay out some of the recent and most significant funding rounds for companies in a range of sectors that are deploying software-driven personalization and recommendation models.

The list represents more a sampling than a comprehensive data set, as a significant number of companies incorporate some form of software-driven personalization. We also mostly left out the enormous and heavily funded set of startups that rely on a combination of software and actual humans to deliver recommendations.

As you can see from the selected list above, those securing the largest rounds are a globally diverse bunch. Having a computer tell you what you want is a market niche that transcends national boundaries.

News and entertainment

Lately, the biggest chunk of funding is going to China-based news and entertainment aggregators.

Six-year-old Toutiao is climbing the unicorn ranks at a remarkable pace. Its parent company, Beijing-based Bytedance, has raised more than $3 billion to date and is reportedly seeking new funding at a $75 billion valuation. With active users in the hundreds of millions, its success stems from the use of machine learning to figure out people’s interests and offer up content they’ll click on.

At least three other China-based news and entertainment aggregators have raised $50 million or more in fresh funding since last year, including public market-bound Qutoutiao, loosely translated as “fun headlines.” The company describes its value add as providing technology-based “content personalization” to help users navigate the exponential growth in online offerings.

And then there’s iQiyi, the company sometimes called the Netflix of China. It scored one the year’s largest IPOs, and it was recently trading at around a $21 billion valuation.

Mature markets for personalization

For the U.S. market, meanwhile, the companies most closely associated with software-driven personalization have been public for quite some time.

Netflix, now valued at around $160 billion, went public 16 years ago. Google acquired YouTube back in 2006. And Amazon.com has been serving up algorithm-driven suggestions of what to buy for two decades.

Articles on the oddities of software-driven video recommendations date back to at least 2002. By now, Americans are pretty used to apps attempting to make our shopping and binge-watching selections. While occasionally creepy, it can also be convenient.

So what’s next on the personalization horizon? Looking at funded startups, it’s apparent there’s an ongoing drive among retailers other than Amazon to take back some market share by offering a more customized shopping experience.

One startup working in the area is New York-based Dynamic Yield, which has raised $63 million since last summer to scale a machine learning-based platform used by retailers like Stitch Fix and Urban Outfitters to match shoppers with things to buy. Another is True Fit, which has raised more than $110 million to work with prominent apparel brands and retailers to match consumers with styles that fit and flatter.

There’s a lot at stake. Research firm Boston Consulting Group predicts that personalization will push a revenue shift of some $800 billion to the 15 percent of companies that get it right.

That’s a big number, and it underscores a rapidly changing shift in consumer behavior. Call it the age of the tasteful machine.

Of course, it’s still possible to cultivate personal style and taste on your own. However, startup entrepreneurs, tech giants and venture capitalists seem to share a unified vision of software making a much bigger contribution to that effort.

As a result, what was once science fiction is now just becoming the way we shop.

* We decided not to include recommendation engines for financial services products and insurance. These are generally not so much tastemaking as matching products to an existing credit history and questionnaire answers.


Source: The Tech Crunch

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The alumni of these universities raised the most VC in the past year

Posted by on Aug 25, 2018 in Column, harvard, Pennsylvania, stanford, Stanford University, TC, University of Pennsylvania, Venture Capital | 0 comments

Whatever criteria we look at, whether it’s schools with the highest number of well-capitalized founders, highest funding totals or even where startup investors went to college, the same names top the list. The only surprise factor, it seems, is whether Harvard or Stanford will be in first place.

It’s possible we’ll do a data-driven university- and startup-related ranking that doesn’t feature the same two schools in the top two positions. But that’s not happening today, as we look at universities with founder alumni who have raised the most venture funding.1

OK, so who else is on the list?

Luckily, there are more than two names on the list. In this survey, we looked at the top 15 schools ranked by alumni who have raised the most venture funding for their startups in roughly the past year.

This is a follow-up to our earlier piece, which ranked U.S. universities according to the number of funded startup founders who raised $1 million or more in the survey period. The results, however, feature most of the same names, and an only slightly altered order.

Take a look for yourself below. The chart includes the name of the school, the total known venture capital funding raised by alumni founders since August 1, 2017, and the most heavily funded companies.

Methodology

In the survey results, we included universities and affiliated business schools together. This significantly bumped up the totals for universities with well-known business schools, like Harvard and the University of Pennsylvania (home of the Wharton School of Business).

Additionally, a number of funded founders have degrees from more than one university in the ranking. These entrepreneurs are counted once for each university.

  1. The survey data is for seed through late-stage venture funding rounds announced on or after August 1, 2017.


Source: The Tech Crunch

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