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Birth control delivery startup Nurx taps Clover Health’s Varsha Rao as CEO

Posted by on Apr 17, 2019 in Airbnb, Alphabet, board member, Chelsea Clinton, chief executive officer, Chief Operating Officer, Clover Health, Companies, Health, healthcare, Kleiner Perkins, Lowercase Capital, Medicare, Nurx, sharing economy, Startups, telemedicine, Union Square Ventures, United States, vacation rental, Venture Capital, websites, Y Combinator | 0 comments

Varsha Rao, Airbnb’s former head of global operations and, most recently, the chief operating officer at Clover Health, has joined Nurx as its chief executive officer.

Rao replaces Hans Gangeskar, Nurx’s co-founder and CEO since 2014, who will stay on as a board member.

Nurx, which sells birth control, PrEP, the once-daily pill that reduces the risk of getting HIV, and an HPV testing kit direct to consumer, has grown 250 percent in the last year, doubled its employee headcount and attracted 200,000 customers. Rao tells TechCrunch the startup realized they needed talent in the C-suite that had experienced this kind of growth.

“The company has made some really great progress in bringing on strong leaders and that’s one of the things that got me excited about joining,” Rao told TechCrunch. Nurx recently hired Jonathan Czaja, Stitch Fix’s former vice president of operations, as COO, and Dave Fong, who previously oversaw corporate pharmacy services at Safeway, as vice president of pharmacy.

Rao, for her part, joined Clover Health, a Medicare Advantage startup backed by Alphabet, in late 2017 after three years at Airbnb.

“After being at Airbnb, a really mission-driven company, I couldn’t go back to something that wasn’t equally or more so and healthcare really inspired me,” Rao said. “In terms of accessibility, I feel like [Nurx] is super important. We are really fortunate to live in a place where can access birth control and it can be more easily found but there are lots of parts of the country where physical access is challenging and costs can be a factor. To be able to break down barriers of access both physically and from an economic standpoint is hugely meaningful to me.”

Nurx, a graduate of Y Combinator, has raised about $42 million in venture capital funding from Kleiner Perkins, Union Square Ventures, Lowercase Capital and others. It launched in 2015 to facilitate women’s access to birth control across the U.S. with a HIPAA-compliant web platform and mobile application that delivers contraceptives directly to customers’ doorsteps.

Today, the telehealth startup is available to customers in 24 states and counts Chelsea Clinton as a board member.


Source: The Tech Crunch

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XGenomes is bringing DNA sequencing to the masses

Posted by on Mar 15, 2019 in 23andMe, Biology, biotechnology, DNA sequencing, founder, genome, Genomics, george church, harvard, healthcare, Illumina, lasers, Life Sciences, TC, United Kingdom, United States, Y Combinator | 0 comments

As healthcare moves toward genetically tailored treatments, one of the biggest hurdles to truly personalized medicine is the lack of fast, low-cost genetic testing.

And few people are more familiar with the problems of today’s genetic diagnostics tools than Kalim Mir, the 52-year-old founder of XGenomes, who has spent his entire professional career studying the human genome.

Ultimately genomics is going to be the foundation for healthcare,” says Mir. “For that we need to move toward a sequencing of populations.” And population-scale gene sequencing is something that current techniques are unable to achieve. 

“If we’re talking about population scale sequencing with millions of people we just don’t have the throughput,” Mir says.

That’s why he started XGenomes, which is presenting as part of the latest batch of Y Combinator companies next week.

A visiting scientist in Harvard Medical School’s Department of Genetics, Mir worked with the famed Harvard professor George Church on a new kind of gene sequencing technology that promised to conduct sequencing at higher speeds and far lower costs than anything that was on the market.

The costs of sequencing a genome have come down significantly in the 19 years since the Human Genome Project successfully completed its project for $1 billion.

These days, gene sequencing can take a couple of days and cost around $1,000, Mir says. But with XGenomes, Mir hopes to drive the cost of testing down even further.

“We developed a way where we’re sequencing directly on the DNA where we’re not manipulating it except for opening up the double helix,” says Mir. 

Running a startup focused on conducting gene sequencing at population scales is not where Mir thought he’d be when he was growing up in Yorkshire in Northern England. “When I was in school there, I was not into science or tech. I was interested in literature,” he recalls.

That changed when he read Aldous Huxley’s Brave New World and began thinking about the implications of genetic manipulation that the book presented.

Mir went on to study molecular biology at Queen Mary College and upon graduation worked in a biotech company in the U.S.

After returning to England to complete his doctorate in the mid-90s, Mir worked with the geneticist Edwin Southern on the foundational science that now form the core of testing technologies like 23andMe, Illumina, and Affymetrix.

Xgenomes technology works by unzipping strands of DNA and then sequencing the strands concurrently.

I like to think of the genome as a book. The genome has chapters and the chapters could be the chromosomes,” says Mir. “Current technologies read it letter by letter. [But] we’re recognizing words.”

The company is able to accomplish this feat by using optical imaging technologies. Samples are treated with reagents that are then excited by lasers. XGenomes tech then “reads” the bits of DNA that are highlighted and identifies them.

Using this new tech, Mir thinks he can ultimately sequence a full genome in one to two hours and for as little as $100.

That would be a sea change in the way that testing is conducted and could bring about the rapid throughput of sequencing that Mir says is needed to make the vision of truly personalized medicine a reality.


Source: The Tech Crunch

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Shiok Meats takes the cultured meat revolution to the seafood aisle with plans for cultured shrimp

Posted by on Mar 15, 2019 in Asia, asia pacific, Australia, food and drink, India, meat, Singapore, Southeast Asia, TC, United Nations, Y Combinator | 0 comments

Rising consumer interest in alternative proteins and meat replacements has brought hundreds of millions of dollars to companies trying to grow or replace beef or chicken, but few companies have turned their attention to developing seafood alternatives.

Now Shiok Meats is looking to change that. The company has raised pre-seed financing from investors like AIM Partners, Boom Capital, and Ryan Bethencourt and is now part of the recent Y Combinator cohort presenting next week.

Co-founders Sandhya Sriram and Ka Yi Ling are both stem cell scientists working at Singapore’s Agency for Science, Technology and Research who decided to leave their cushy government posts for life in the fast lane of entrepreneurship. 

The two have set themselves a goal of creating a shrimp substitute that would be similar to what’s typically found in the freezer section of most grocery stores — and a minced shrimp-replacement for use in dumplings.

There’s a huge market for seafood across the globe, but especially in Asia and Southeast Asia where crustaceans are a huge part of the diet. Chinese consumers alone account for the consumption of some 3.6 million tons of crustaceans, according to a 2015 study from the Food and Agriculture Department of the United Nations .

Shrimp cultivation as it stands is also a pretty dirty business. The industry is constantly being criticized for poor working conditions, unsanitary farms, and ancillary environmental damage. A blockbuster report from the Associated Press revealed instances of modern slavery in the Thai seafood industry.

“We chose to start with shrimp because it’s an easier animal to deal with compared to crabs and lobsters,” says Shriram. But the company will be expanding its offerings over time to those higher-end crustaceans.

Right now, the focus is squarely on shrimp. The company’s early tests have proved successful and the company estimates that it can make a kilogram of shrimp meat for somewhere around $5,000.

While that may sound expensive, it’s still much less than many of the lab-grown meat companies are pending to produce their replacement beef.

“We’re still relatively low compared to the other clean meat companies, which are still at hundreds of thousands of dollars,” says Ling.

The company is looking to bring its first product to market in the next three-to-five years and will initially target the Asia-Pacific consumer.

That means initially selling into their home market of Singapore and expanding into Hong Kong, India and eventually, Australia.

 


Source: The Tech Crunch

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Portal automatically opens doors for wheelchair users, no button pressing required

Posted by on Mar 15, 2019 in accessibility, portal, TC, Y Combinator | 0 comments

Buttons or plates (like the one above) that automatically open doors can do a lot to make a building more accessible, but they aren’t always a perfect solution. For wheelchair users with limited upper body movement, the buttons can be tough to hit. Other times, the button is installed poorly — too high, too low, or just too far from the door to be useful, with the door closing too fast.

Portal Entryways is a startup trying to make these existing buttons more useful. They’ve built a device that piggybacks on top of existing access buttons, allowing these doors to be opened automatically (and, importantly, kept open) when a wheelchair user approaches. The button, meanwhile, continues to work just as it did before.

Portal’s product has two components: a piece of Bluetooth Low Energy-enabled hardware that hooks into the existing door opening system, and a companion app running on the wheelchair user’s smartphone. The app searches for these Bluetooth Low Energy devices. When it finds one within range, it sends a command to open the door, keeping it open until the user has passed through the doorway. Portal-enabled doorways are marked with a sticker, helping users to know which ones will open as they approach.

Portal is a part of Y Combinator’s Winter 2019 class, but it began its life as a student project in an innovation program at BYU which tasked students with solving a real-world problem. Co-founder Sam Lew tells me they initially started out working on an entirely unrelated concept (shipping logistics). After they met someone on their school campus who had arranged a schedule of friends to open doors or press accessibility buttons that had been installed out of reach, they shifted focus.

It’s still early days, but they’re aiming to grow quickly. They’re approaching 250 devices installed, with a goal of having contracts signed for around 1,250 devices by the end of the month.

Right now, the company’s founders are doing the installations themselves. Different doors use different buttons and motors. Some mechanisms are connected by wire, while others are all wireless. Getting things all connected — at least right now — requires a bit of specialized knowledge. But co-founder Josh Horne tells me that it’s compatible with most of the popular existing mechanisms. “As long as it’s not ancient,” he says, “it should work.”

The company’s main focus right now is on locations with many publicly-accessible doors, like universities or malls. They’re still working out exactly what it’ll cost in the future, but they estimate around $100-200 per door per year.


Source: The Tech Crunch

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Ysplit wants to make it so you never owe your friends money again

Posted by on Mar 13, 2019 in payments, Y Combinator, ysplit | 0 comments

When you live with roommates or go out often with friends, it’s common for someone to front the payment — be that for utilities, the cable bill, rent or the restaurant bill — and have everyone else pay them back via cash, Venmo or Apple Pay. But Ysplit, a company launching out of Y Combinator, wants to make it so you never have to owe anyone ever again.

It works by creating a virtual card that automatically deducts money from everyone’s bank account. So, the person who usually fronts the payment would instead use Ysplit’s virtual card.

“We front the payment and as we’re fronting payment, we’re ensuring everyone on the card has enough money,” Ysplit co-founder Tunde Alao told TechCrunch. “We authorize the payment and then charge everyone at the same time.”

Ysplit is totally free to users but makes money through interchange fees. Since the payment happens through Ysplit’s card, it’s able to charge the utility provider between 1.3 to 2 percent of the transaction.

Ysplit spun out of Alao and his co-founders’ first startup, Cluttr. While the three of them were interning at Google, they shared a house and came up with the idea to help them organize their shared finances.

“We created something to track how much we owed each other,” Alao said. “It got quite popular in the U.K. but we realized we’re not solving any problem by helping people track how much they owe each other. We wanted to stop people from owing each other entirely.”

Cluttr, which Alao said was similar to Splitwise, was basically Splitwise plus scheduling. Splitwise allows you to easily track bills and other expenses with friends. There are numerous other apps that make it easy to track how much you owe someone, but few — if any — that let you so easily split the expenses upfront.

Ysplit is currently in closed beta with about 40 households using the product. After Y Combinator demo day next week, Ysplit will roll out the app to an additional 500 people. Ysplit is initially focused on utility payments for roommates, but plans to add additional service providers down the road.

“It scales into a lot of situations,” Alao said.


Source: The Tech Crunch

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Bottomless has a solution for lazy coffee addicts

Posted by on Mar 11, 2019 in Accelerator, Amazon, Coffee, digital assistant, drinks, Food, food and drink, funding, Google, Philz Coffee, Portland, San Francisco, Seattle, Startups, TC, Y Combinator | 0 comments

If you’re like me, you let out a heavy sigh every month or so when you reach out and unexpectedly find an empty bag of coffee. Bottomless, one of the 200-plus startups in Y Combinator’s latest batch, has a solution for us caffeine addicts.

For a $36 annual membership fee, a cost which co-founder Michael Mayer says isn’t set in stone, plus $11.29 per order depending on the blend, Bottomless will automatically restock your coffee supply before you run out. How? The startup sends its members an internet-connected scale free of charge, which members place under their bag of coffee grounds. Tracking the weight of the bag, Bottomless’ scales determine when customers are low on grounds and ensure a new bag of previously selected freshly roasted coffee is on their doorstep before they run out.

Voilà, no more coffee-less mornings.

Founded by Seattle-based husband and wife duo Mayer and Liana Herrera in 2016, Bottomless began as a passion project for Mayer, a former developer at Nike.com. Herrera kept working as a systems implementations specialist until Bottomless secured enough customers to justify the pair working on the project full-time. That was in 2018; months later, after their second attempt at applying, they were admitted into the Y Combinator accelerator program.

Bottomless’ smart scale

Bottomless today counts around 400 customers and has inked distribution deals with Four Barrel and Philz Coffee, among other roasters. Including the $150,000 investment YC provides each of its startups, Bottomless previously raised a pre-seed round from San Francisco and Seattle-area angel investors.

Before relocating to San Francisco for YC, the Bottomless founders were working feverishly out of their Seattle home.

“This whole time we’ve been 3D-printing prototypes out of our apartment and soldering them together out of our apartment,” Mayer told TechCrunch. “We kind of turned our place into this new manufacturing facility. There’s dust everywhere and it’s crazy. But we made 150 units ourselves by hand-soldering and lots of burned fingers.”

The long-term goal is to automate the restocking process of several household items, like pet food, soap and shampoo. Their challenge will be getting customers to keep multiple smart scales in their homes as opposed to just asking their digital assistant to order them some coffee or soap on Amazon .

Amazon recently announced it was doing away with its stick-on Dash buttons, IoT devices capable of self-ordering on Amazon. The devices launched in 2015 before Google Homes and Amazon Alexas hit the mainstream.

So why keep a smart scale in your kitchen as opposed to just asking a digital assistant to replenish your supply? Mayer says it’s coffee quality that keeps it competitive.

“Some of our most enthusiastic customers live out in like deep suburbs far away from city centers, but they really love fresh coffee,” Mayer said.And there’s no way to get fresh coffee if you live 20 or 30 minutes from a city center, right?”

“Or you might think in a city like San Francisco or Seattle, you can get freshly roasted coffee pretty easily because there are restaurants all over the place, right?” He added. “That’s certainly true, but it does take a little bit of extra thought to remember to grab it on the right day when you’re running low.”

Mayer and Herrera don’t consider themselves coffee experts, despite now running what is essentially a direct-to-consumer coffee marketplace out of Seattle, the coffee capital.

“I’m originally from Portland and Portlanders know a lot about coffee,” Mayer said. “I never really considered myself to be a coffee aficionado or a coffee snob in my head, but I guess compared to like the average American from anywhere in the country, I would be just a regular coffee drinker in Portland. All I really knew about coffee going into this was that it’s better fresh. That’s it.”

Bottomless is currently accepting customers in beta. The team will pitch to investors at YC Demo Days next week.


Source: The Tech Crunch

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Y Combinator president Sam Altman is stepping down amid a series of changes at the accelerator

Posted by on Mar 8, 2019 in Accelerator, advisor, articles, Artificial Intelligence, chairman, chief executive officer, Co-founder, Michael Seibel, OpenAI, partner, paul graham, president, sam altman, San Francisco, Startups, Venture Capital, Y Combinator, yc | 0 comments

Sam Altman, the well-known president of the prolific Silicon Valley accelerator Y Combinator, is stepping down, the firm shared in a blog post on Friday.

Altman is transitioning into a chairman role with other YC partners stepping up to take on his day-to-day responsibilities, as first reported by Axios. Sources tell TechCrunch YC has no succession plans. YC’s core program is currently led by chief executive officer Michael Seibel, who joined the firm as a part-time partner in 2013 and assumed the top role in 2016.

The news comes amid a series of shake-ups at the accelerator, which is expected to demo its latest batch of 200-plus companies in San Francisco March 18 and 19. In Friday’s blog post, YC expands on some of those changes, including the firm’s decision to move it’s HQ to San Francisco, which TechCrunch reported earlier this week.

“We are considering moving YC to the city and are currently looking for space,” YC writes. “The center of gravity for new startups has clearly shifted over the past five years, and although we love our space in Mountain View, we are rethinking whether the logistical tradeoff is worth it, especially given how difficult the commute has become. We also want to be closer to our Bay Area alumni, who disproportionately live and work in San Francisco.”

In addition to moving it’s HQ up north, YC has greatly expanded the size of its cohorts — so much so that it’s next demo day will have two stages — and it’s writing larger checks to portfolio companies.

Altman, who joined YC as a partner in 2011 and was named president in 2014, will focus on other efforts, including OpenAI, a research organization in which he co-chairs. Altman was the second-ever YC president, succeeding YC co-founder Paul Graham in 2014. Graham is currently an advisor to YC.


Source: The Tech Crunch

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YC’s latest moonshot bet is a startup building a $380K ‘flying motorcycle’

Posted by on Mar 7, 2019 in David Mayman, jetpack, Jetpack Aviation, Startups, TC, Transportation, vertical take-off and landing, VTOL, Y Combinator | 0 comments

David Mayman has a vision for personal aviation that he’s spent the past dozen years and millions of his personal fortune chasing. He hasn’t accepted the convention that jetpacks were just a misguided fantasy for the future; his company, Jetpack Aviation, has been building them and he’s been zooming around in publicity-grabbing stunts in a plea to the public that there’s room to dream when it comes to human flight.

And while an eight-person startup aiming to build out a fleet of $380,000 “flying motorcycles” might seem like a tall order, Y Combinator, a top accelerator known for its occasionally bizarre bets, is gambling on the company and its jet engine-obsessed CEO in one of its latest investments.

Jetpack Aviation is about to become a very different company. The startup has launched pre-orders this week for the moonshot of moonshots, the Speeder, a personal vertical take-off and landing vehicle with a svelte concept design that looks straight out of Star Wars or Halo.

Deep-pocketed, sci-fi-minded buyers are going to have to fork over $10,000 just to get a spot in the pre-order line for the first vehicles to ship, but the startup’s founder seems to see the campaign as less about the money than it is about the confirmation that there are people interested in planting a stake in his wild company’s future success.

“I think it’s a validation statement for all of us,” Mayman tells TechCrunch. “If you look at how long Tesla took to deliver the Model 3 to customers, I think people understand that this is not something that’s a Kickstarted pre-delivery campaign where at the tail-end of it we’re immediately going to be delivering product.”

There are gambles and then there are flying motorcycles. This is frankly an atypical startup for YC to fund, but it is also an unconventional business path for Mayman, who has largely been self-financing his jetpack-building obsession for the past 12 years. For the Australian CEO, the YC investment is mainly about gaining access to Silicon Valley’s network of VCs, though he also acknowledges it’s a fair assumption that SF breeds the type of executive that might be interested in pre-ordering something so seemingly outlandish. 

“I can’t imagine someone not being excited about a flying motorcycle,” YC partner Jared Friedman told TechCrunch in an email. “Jetpack Aviation created the future with Speeder, and I look forward to seeing how this technology transforms the dreaded commute, vacation travel, and everyday errands.”

While much of the excitement Mayman has raised for his company’s jetpacks has relied on the spectacle of prototype demos in front of throngs of news networks (Jetpack Aviation has unsurprisingly partnered with Red Bull), the company has yet to build a full-scale prototype of the Speeder, though he says their new round of funding should get them there.

Mayman flying a jetpack around the Statue of Liberty in 2015

Can they actually build this? That’s seems to be a pretty valid question.

In our conversation, Mayman acknowledges upfront that:

  1. The Speeder is “at least” two years of development time away from ending up in customer hands.
  2. The company will have to raise “tens of millions” of dollars to ship this design.
  3. There are still plenty of unknowns.

Jetpack Aviation’s current design is more ambitious than most helicopter-shaped concept VTOL vehicles being pursued by companies like Uber, namely due to its relatively sleek design where the human rider is directly above a set of several gimbal-mounted jet engines.

The company claims finished designs will move faster than 150 mph at altitudes up to 15,000 feet. The flight time is still a limiting factor; max flight times for the models are estimated to be around 30 minutes. The company is planning a number of versions, including an ultralight model that complies with some federal regulations and won’t require a pilot’s license, the company says.

The startup’s most pertinent problem is creating the autonomous stabilization technologies that will make flying the Speeder effortless and safe. Mayman notes that most VTOL designs look like quadcopters simply because the physics of putting weight directly on top of the thrust system is so challenging. “It’s like trying to balance a pencil on your finger,” he says.

His team has been training people to use their jetpacks — now in their 11th design iteration — and say it takes about a week to get potential flyers up-and-running with the particulars of the system. But Mayman says he wants this to be a device that just works, a design concept that made a lot of sense when Steve Jobs was using it to refer to the simplicity of the iPad, but feels a tad more aggressive when presented with the rendered images of someone flying this thing over city centers:

A lot of the industry’s existing work around autonomous flight and stabilization for drone aircraft really doesn’t account for Jetpack Aviation’s design, though Mayman says they’ve already made some significant progress with their 1:3 scale prototype. He also notes that the company does have a “less elegant-looking” plan-B design if they determine the centrally clustered jet engines are too much of a stabilization liability.

Indeed, the key for getting a concept like this off the ground and ensuring the company doesn’t miserably fail is being flexible about how this vision matures, Mayman says, noting that they’re approaching the vehicle with multiple designs and multiple considerations for how the regulatory environment for certification shapes up, including work on a separate military version and consideration for designs more focused on emergency response like rapid medical evacuation.

Asked whether pre-orderers plunking down $10K might be disappointed by a different-looking product, the founder said that they’ve done enough modeling to know that what they build will fall into a roughly similar design. “It may not look exactly like what we’ve rendered, but I’m confident that it’s still going to be the same sort of concept, a motorcycle or jet-ski size and shape.”

It is certainly a unique choice for the company to launch its pre-orders already with so much in the air, but it’s fairly apparent that they are looking to emulate Tesla here, and if people with nearly $400K to throw around want to buy a jet-engine jet-ski, then by all means, let the free market do its thing.

Y Combinator’s $150,000 investment is an early step for the moonshot effort and a vote of confidence that places them on others’ radar. Mayman, for his part, does seem genuinely thrilled about expanding the ambitions of his passion project, even if the road ahead is crowded with obstacles for realizing the vision.

“If you don’t start it, you’re never going to get there,” Mayman says. “If our guys weren’t able to wake up every morning saying, ‘Holy shit, this would be freaking amazing if we can build this,’ then it’s sort of not worth doing. We might as well go do something else.”


Source: The Tech Crunch

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Camelot lets Twitch and YouTube audiences pay for what they want to see

Posted by on Mar 7, 2019 in Entertainment, Gaming, Startups, TC, twitch, Y Combinator, YouTube | 0 comments

As the streaming world continues to grow, startups are looking to take advantage of the opportunity and grab a slice of the pie, and indeed create new revenue models around it entirely. 

Camelot, a YC-backed startup, is one of them.

Camelot allows viewers to place bounties on their favorite streamers, putting a monetary value on the things they want to see on stream. This could include in-game challenges like “win with no armor,” as well as stream bounties like “Play Apex” or “add a heartbeat monitor to the stream.”

When a viewer posts a bounty, other viewers can join in and contribute to the overall value, and the streamer can then choose whether or not to go through with it from an admin dashboard.

Because internet platforms can often be used for evil alongside good, cofounder and CEO Jesse Zhang has thought through ways to minimize inappropriate requests.

There is an option for streamers to see and approve the bounty before it’s ever made public to ensure that they avoid inappropriate propositions. Bounties are also paid for up front by viewers, and either returned if the creator declines the bounty or pushed through when the streamer completes the task, raising the barrier to entry for nefarious users.

Camelot generates revenue by taking a five percent stake in every bounty completed.

The platform isn’t just for Twitch streamers — YouTubers can also get in on the mix using Camelot and making asynchronous videos around each bounty. Not only does it offer a new way to generate revenue, but it also offers content creators the chance to get new insights on what their viewers want to see and what they value.

Cofounder and CEO Jesse Zhang believes there is opportunity to expand to streamers and YouTube content creators outside of the gaming sphere in the future.

For now, however, Camelot is working to bring on more content creators. Thus far, streamers and viewers have already come up with some interesting use cases for the product. One streamer’s audience bought his dog some treats, and one viewer of Sa1na paid $100 to play against the streamer himself.

Camelot declined to share how much funding it has received thus far, but did say that lead investors include Y Combinator, the Philadelphia 76ers, Soma Capital, and Plaid cofounders William Hockey and Zach Perret.


Source: The Tech Crunch

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The Silicon Valley exodus continues

Posted by on Mar 5, 2019 in 500 startups, Accel, Accelerator, angelpad, founders fund, General Catalyst, Kleiner Perkins, Menlo Park, norwest venture partners, palo alto, San Francisco, shasta ventures, Silicon Valley, Startups, TC, True Ventures, Uber, Venture Capital, Y Combinator | 0 comments

For a long time, it was the norm for founders to haul their hardware to the 3000 block of Sand Hill Road, where the venture capitalists of “Silicon Valley” would be awaiting their pitches. Today, many of the investors that touted the exclusivity of “The Valley” have moved north to San Francisco, where they have better access to top entrepreneurs.

Y Combinator, a Silicon Valley institution and to many the lifeblood of the startups and venture capital ecosystem, is the latest to pack up shop. YC, which invests $150,000 for 7 percent equity in a few hundred startups per year, is currently searching for a space in SF to operate its accelerator program, sources close to YC confirm to TechCrunch, because the majority of YC’s employees and its portfolio founders reside in the city.

Founded in 2005, YC’s roots are in Mountain View, California. In its first four years, YC offered programs in Cambridge, Massachusetts and Mountain View before opting in 2009 to focus exclusively on The Valley. In late 2013, as more and more of its partners and portfolio companies were establishing themselves in SF, YC opened a satellite office in the city in what would be the beginning of its journey northbound.

The small satellite office, used to support SF-based staff and provide portfolio companies resources and workspace, is located in Union Square. The fate of YC’s Mountain View office is unclear.

YC’s move north will be the latest in a series of small changes that, together, point to a new era for the Sam Altman-run accelerator. Approaching its 15th birthday, YC announced in September it was changing up the way it invests. No longer would it seed startups with $120,000 for 7 percent equity, it would give startups an additional 30,000 to cover the expenses of getting a business off the ground and it would admit a whole lot more companies.

YC began mentoring its largest cohort of companies to date in late 2018. The astonishing 200-plus group in its winter 2019 batch is more than 50 percent larger than the 132-team cohort that graduated in spring 2018. To accommodate the truly gigantic group at YC Demo Days later this month (March 18 and 19), YC has moved to a new venue, SF’s Pier 48. Historically, YC Demo Days were hosted at the Computer History Museum near its home in Mountain View.

YC has also ditched “Investor Day,” which is typically an opportunity for investors to schedule meetings with startups that just completed the accelerator program. YC writes that the decision came “after analyzing its effectiveness.” On top of that, rumors suggest YC is planning to put an end to Demo Days. Other accelerators, AngelPad for example, put a stop to the tradition last year after realizing demo day was more of a stress to startup founders than a resource. Sources close to YC, however, tell TechCrunch these rumors are categorically false.

YC isn’t the first accelerator to ditch its Silicon Valley digs. 500 Startups, a smaller yet still prolific accelerator, opened an SF satellite office the same year as YC, and in 2018, the nine-year-old program made the decision to permanently relocate to SF. Venture capital firms, too, have realized the opportunities are larger in SF than on Sand Hill Road.

The transition from the peninsula to the city began around 2012, when VC heavyweights like Uber and Twitter-backer Benchmark opened an office in SF’s mid-market neighborhood. Months later, 47-year-old Kleiner Perkins, an investor in Stripe and DoorDash, opened the doors to its new workplace in SF’s South Park neighborhood.

Around that same time a whole bunch of firms followed suit: Shasta Ventures, Norwest Venture Partners, Accel, GV, General Catalyst and NEA opened SF shops, to name a few. Many of these firms, Benchmark, Kleiner and Accel, for example, held onto their Silicon Valley locations. Firms like True Ventures and Peter Thiel’s Founders Fund planted stakes in SF years prior. Both firms have operated SF offices since 2005; True Ventures, for its part, has managed a Palo Alto office from the get-go, as well.

“When we first started, it was [expected] that it would be maybe 60-40 Peninsula to the city; it’s actually turned out to be 80-20 SF to The Valley,” True Ventures co-founder Phil Black told TechCrunch. “For us, it was important to be near our customer: the founder. It’s important for us to be in and around where founders are doing their things.”

The transition out of The Valley is ongoing. Other VC funds are still in the process of opening their first SF offices as more partners beg for shorter commutes. Khosla Ventures, for example, is currently searching for an SF headquarters.

Silicon Valley real estate will likely remain a hot — or warm, at least — commodity, however. Why? Because long-time investors have lives established in that part of the bay, where they’ve built homes in well-kept, affluent cities like Woodside, Atherton and Los Altos.

Still, Y Combinator’s move highlights an increasingly adopted mantra: Silicon Valley isn’t the goldmine it used to be. For the best deals and greatest access to entrepreneurs, SF takes the cake — for now, that is. But with rising rents and a changing attitude toward geographically diverse founders, how long SF will remain the destination for top talent is an entirely different question.


Source: The Tech Crunch

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