Tech Brew Ride Home - (Bonus) Interesting Raise Episode 1!

Episode Date: January 16, 2021

The first ever interesting raise omnibus episode! Links: Hipcamp, ‘Airbnb of the Outdoors,’ Raises $57 Million (The Information) Local news app News Break raises $115M (TechCrunch) Perfect Corp., developer of virtual beauty app YouCam Makeup, closes $50 million Series C led by Goldman Sachs (TechCrunch) Veo raises $25M for AI-based cameras that record and analyze football and other team sports (TechCrunch) Graphcore raises $222M for its ultrafast AI chips (SiliconAngle) AI chipmaker Graphcore raises $22M at a $2.77B valuation and puts an IPO in its sights (TechCrunch) Fintech startup Oxygen raises $17M in Series A round (SiliconAngle) AMP Robotics raises $55 million for AI that picks and sorts recyclables (VentureBeat) WeLink raises $185M to deliver high-bandwidth wireless internet to the home using 5G (TechCrunch) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to another weekend bonus episode of the Tech Meme Ride Home. I'm Brian McCullough. But this is a new type of bonus episode. As I said, here is the premise. The way that I like to think of this podcast is it's a shorthand. It's a tool for people who either are in tech to better understand their industry or for those who aspire to be in tech or just kind of like tech or aspire to do more in tech. for those people to get a quick insidery summation of where tech is and where I think it's going.

That's why I don't just do headlines. I try to give you context around what's happening, not just to let you know that it happened. I like to think that if you listen to this show for six months, you'd have enough background in the industry to maybe get a job at a VC firm because you'd know all the trends and whatnot. But at the same time, there's only so many hours in a day. The utility of our format, which is a quick 15 to 20 minute daily rundown, means that I don't always get to spend time on all of the trends and such. I don't get to dive into where things are going as much as I would like. I mean, from day one, the weekend long reads have been designed to do some of that,

but we could be doing more. So you know how sometimes I share interesting raises with you as a segment? You might not know this, but every single day there are like a dozen round raises. announcements, and I only have the time to squeeze in one or two here and there. Over the course of a month, there are maybe 50 or so startup raises that might be interesting, so a lot of them fall through the cracks because I have to tell you about something else that's more timely or newsworthy. So I thought, what if, on a regular basis, we did interesting raise bonus episodes. Might be a really good way for folks to get a sense of the trends in investing, which in turn is

the canary and the coal mine for how the industry overall, is moving and evolving. If you were an aspiring founder, then you'd get a good idea of which way the winds are blowing from these episodes. Ditto, if you're an investor or even a founder or a manager, these episodes will give you a sense of the disruption that might be coming for you or your space. The idea here is that if we do these episodes well enough and long enough, then eventually we'll surface the next snowflake or Airbnb right here. When 10 years from now, some company has a Blockbuster IPO, you'll be like, I remember when I first heard about that from Brian. So say hello to the first interesting raise bonus episode, hopefully the first of many.

Speaking of Airbnb, here's something that I didn't know existed, but which makes a ton of sense in a post-Arbomb world and also in a post-COVID world. Hip Camp is a startup that offers places to stay outside in rural and. areas. Essentially, it's just the Airbnb for the outdoors, if you've got a farm or just an open field or anything. And Hip Camp just raised $57 million at a more than $300 million valuation. According to the information, that's more than double the valuation of its last financing in 2019. So the year of COVID seemingly hasn't hurt Hip Camp that much. quote. New investors in the round include index ventures and merrymakers bond capital. People

familiar with the matter said. The series C round represents a turnaround at hit camp after COVID-19 brought a halt to most travel last spring. Bookings plunged 80% as the pandemic hit the U.S., but business rebounded sharply in summer as people began making travel plans focused on the outdoors. The number of transactions on the site more than quadrupled between June and August compared with the same period last year, according to a sample of data by second measure, an analytics site. run by 32-year-old Alyssa Ravaccio. Hip camp began in 2014 as a website with information about campsites. The startup later signed up private landowners across the U.S. who could make money offering their pieces of properties to people who would pitch tents, park RVs, or book

airstreams in Yurtz. The company, which takes a 10% commission on bookings, previously raised about $45 million from investors including benchmark, and Dresen Horowitz, and August Capital, end quote. So that's a pretty august group of investors. The big question, of course, is whether the COVID bump that Hip Camp is currently seeing translates to real repeat customers once the pandemic is over. I should note that a $300 million valuation is not that large if this is an Airbnb-style clone, quoting from the information again.

Two venture capitalists who explored investing in HipCamp but passed on the deal said the company hadn't been growing quickly before the pandemic. Data from second measure shows flat growth in the months before the pandemic began. The prospective investors described other barriers as well. People who want to book campsites in national parks generally have to do so through a public site rather than via hip camp. It also will likely face fierce competition from Airbnb, which raised billions of dollars in its IPO. Airbnb CEO Brian Chesky has said the company would be putting a bigger focus on local and outdoor travel, end quote. Newsbreak, which describes itself as an AI-powered news app that delivers a mix of national and local news,

has announced it's raised $115 million in a Series C round led by Francisco Partners. It claims it's now a unicorn, even though it did not disclose the valuation at which the funding was raised. News aggregation has always seemed to me like an iffy niche for a unicorn startup, but then media startups are always iffy. Founder and CEO Jeff Scheng, who previously led Yahoo Labs in Beijing, said the funding would be used to differentiate newsbreak from other news apps by focusing on local news and helping and empowering local content creators. More details from Anthony Ha at TechCrunch, quote, The local focus may be increasingly valuable given the broader economic challenges facing the

local news business, as Zhang put it, there's, quote, strong user demand for local news but weak supply. And the strategy seems to have paid off for Newsbreak so far, with the app reaching the top spot in the news category of Apple's U.S. App Store multiple times. It's currently ranked number four. And in Google Play as well, the startup says it's currently reaching 12 million daily active users. Zhang said that while Newsbreak already shares ad revenue with publishers, he's hopeful that the value it provides those publishers will only grow over time. Quote, we want to give as much money back to the creators as possible, end quote. When I suggested that publishers and journalists may be leery about relying too much on a third-party platform to reach their audience,

Zhang argued that news breaks incentives are very different from the big internet and social media platforms. We are local-centric, he said. If local publishers are struggling, if the newspapers are diminishing every year, then sooner or later, we are out of business, end quote. As TechCrunches drew Olinoff tweeted, quote, I feel like breaking news that slides into a nice incremental reading and learning experience hasn't been done yet, but I'm glad that there's companies working away at it, end quote. We've spoken before about digital try-on apps for fashion and skin care and the like. They've seemingly been coming into their own in the age of COVID. Well, Goldman Sachs seems to think that there's more to it than the COVID bubble, if you will. The bank has led a $50 million

$1 Series C investment into Perfect Corp, a Taiwanese company best known for its beauty app, U-cam makeup, which lets users try on virtual makeup samples from global brands like Estée Lauder and L'Oreal. The app uses facial landmark tracking tech to build a 3D mesh of users' faces so that beauty try-ons look more realistic. This is from TechCrunch, quote, launched in 2014, UKAM makeup now counts about 40 to 50 million monthly active users and has expanded from augmented selfies to include live streams and tutorials from beauty influencers, social features, and a skin score feature. Perfect Corpse technology is also

used for in-store retail, e-commerce, and social media tools. For example, its tech helped create a new augmented reality-powered try-on tool for Google search that launched last month. It was previously used for YouTube's makeup try-on features too. It also worked with Snap to integrate beauty try-on features into Snapchat. The new funding brings Perfect Corpse total raised so far to about $130 million. Its last funding announcement was a $25 million series A in October of 2017. The Series C will be used to further develop Perfect Corpse technology for multi-channel retail and open more international offices. It currently has operations in 11 cities, end quote. The company has had to make changes to cope with changes in consumer behavior during the COVID pandemic, while sales of

makeup have dropped, consumer interest in skin care products overall has risen, quoting again from TechCrunch. To help brands capitalize on that, Perfect Corp recently launched a tool called AI Skin Diagnostic Solution, which it says is verified by dermatologists and grades facial skin on eight metrics, including moisture, wrinkles, and dark circles. The tool can be used on skincare brand websites to recommend products to shoppers. Before COVID-19, UKAM makeup and the company's augmented reality try-on tools appealed to Gen Z shoppers who are comfortable with selfies and filters. But the pandemic is forcing makeup and skincare brands to speed up their adoption of technology for all shoppers. As a McKinsey report about the impact of COVID-19 on the beauty industry

put it, the use of artificial intelligence for testing, discovery, and customization will need to accelerate as concerns about safety and hygiene fundamentally disrupt product testing and in-person consultations, end quote. I'm always on the lookout for new developments in sports tech, and so I came across this interesting raise by a Danish startup called VEO Technologies. Vio is trying to crack the long tail of filming and editing games that don't get the attention of top flight leagues and broadcasters. Vio, which has picked up a series B of $25 million, has pioneered the development of AI-based cameras that record footage of, say, soccer matches at lower league levels, and then analyze the footage to break out highlights of key plays. It's a B-to-B play with teams spending around $800 on the

VO cameras, far less than a team would typically have to pay to rig up an entire camera setup in maybe your tiny AAA or AA or single A stadium capable of seeing the entire field, and then paying a yearly subscription of $1,200 for access to the AI systems that Zoom. in and edit down the footage. Quoting from TechCrunch. Pre-pandemic, the Danish startup was quietly building its business around catering to the long tail of sporting organizations, which, even in the best of times, would be hard-pressed to find the funds to buy cameras and or hire videographers to record games, not just an essential part of how people can enjoy a sporting event, but useful for helping with team development, end quote. Post-pandemic, Vio has

found a new use case, enabling kids' soccer teams to provide footage of matches to parents unable to watch in person due to COVID restrictions. In the long run, Vio's CEO Heinrich Tysbeck says the company plans to continue building itself out as a B-to-B platform for team sports, including hockey and basketball, rather than creating a B-to-C competitor to the likes of ESPN. Quoting again from TechCrunch, the business model for Vio up to now has largely been around what Tysbeck described as the long-tail theory, which in the case of sports works out, he said, as, quote, there won't be many viewers for each match, but there are millions of matches out there, end quote. But if you consider how a lot of high school sports will attract locals, beyond those currently attached to a school, you have

alumni supporters and fans as well as local businesses and neighborhoods, even that long-tail audience might be bigger than one might imagine. Vio's long-tail focus has inevitably meant that its largest users are in the wide array of amateur or semi-pro clubs and the people associated with them, but interestingly, it has also spilled into big names, too. Vio's cameras are being used by professional soccer clubs in the Premier League, Spain's La Liga, Italy's Seraa, and France's League Oon, as well as several clubs in the MLS, such as Inter-Miamy, Austin, FC, FC, Cincinnati. Tysbeck noted that while this might never be for primary coverage, it's there to supplement for training and also to be used in the academies

attached to those organizations. The longer-term plan, he said, is not to build its own media Empire with the trove of content that it has amassed, but to be an enabler for creating that content for its customers who can, in turn, use it as they wish. It's a Shopify, not an Amazon, Tysbeck said. We are not building the next ESPN, but we are helping the clubs unlock those connections that are already in place by way of our technology, he said. We want to help them capture and stream their matches and their play for the audience that is there today, end quote. So if 10 years from now, your lowly high school football team has its own app and you can pay X number of dollars per year to subscribe to live games or even just highlights. Yeah, it's probably going to come like this.

Or action in the chip space, which as we've discussed is just in a super state of flux at the moment. The big incumbents in the space are all in turmoil. Seemingly a new generation is taking King of the Hill status. But in chaos like that, there's probably room for new players, too, right? A British startup, Graphcore, has raised $222 million at a post-money valuation of $277 billion in its quest to take on Nvidia in building processors optimized for AI, quoting from Silicon Angle. Bristol-based Graphcore has developed a chip for running AI models that it describes as the, quote,

most complex processor ever made. The startup also sells AI appliances that it says can provide up to 16 exaflops of performance when linked together and a cluster. One exoflop equals a million trillion computing operations per second. Graphcore's flagship AI chip, the Colossus MK2 GC200, is based on a 7 nanometer process and features some 59.4 billion transistors. That's compared with the 54.2 billion in Nvidia's newest and most powerful A100 graphics card for data centers. According to Graphcore, the GC200's transistors are organized into 1,472 processing cores, each of which has an integrated pool of memory for storing data. The startup has equipped the chip with a number of features that it says,

give it an edge over competing products from the likes of Nvidia. For one, the memory circuits attached to each of the GC200's cores have 900. megabytes of combined capacity, which is, in some cases, more than enough to store the entire AI model. That removes the need to store parts of the AI on external memory separate from the processor, which in turn eliminates the delays that emerge when data has to travel between two separate components and thereby speeds up computations. Another tent pole feature of the GC200 is something GraphC-200 refers to as stochastic rounding. The information that AI models work with is often stored in the form of floating point values, basic units of data that usually take up between 16 and 64 bits of

space. The smaller of value, the less time it takes to process. Stochastic rounding allows the GC200 to compress large floating point values into 16 bits, even if they take up more space in practice to increase processing efficiency. GraphCorp says systems based on its chip can significantly outperform AI appliances powered by Nvidia's A100 graphics card. In some cases, the startup claims it's Silicon makes it possible to train a model more than five times faster, end quote. TechCrunch adds that this funding round may essentially be a pre-IPO round for GraphCore, which is rumored to be considering a listing on NASDAQ. Platforms for the Creator Economy.

It's something that has been getting a lot of heat lately, something that we're keeping our eye on for sure. Oxygen is a digital bank aiming to bring together FinTech with a platform for. creators. So two super hot spaces in one startup. Oxygen has raised a $17 million series A, led by Runa Capital and including prominent fintech investors like Deutsche Bank's Frank Strauss and Plad co-founder William Hockey. Oxygen offers a set of services you'll be familiar with if you've dabbled with a digital bank account, an app-based banking experience, offering debit and credit cards and electronic funds transfers. But the differentiator is that Oxygen offers both personal and business accounts. To date, the digital banking space has tended to bifurcate between consumer

and business offerings, and it's specifically going after people with multiple revenue streams, like freelance content creators juggling many gigs, quoting Silicon Angle. The company launched its services in January 2020 and says it has enjoyed tremendous growth in the past year, partly thanks to the coronavirus pandemic. It claims more than 125,000 accounts have been opened, with a 669 times revenue increase. That's 669x, though it doesn't provide specific numbers, and that growth is no doubt off a small base, end quote. Recycling plastic is costly and inefficient. Basically, the economics of recycling plastic is so bad.

It basically nullifies the environmental benefits of doing so. The EPA says that less than 10% of plastic is actually recycled, even when it's put into the recycling stream. The rest still ends up in landfills. Amp Robotics is a startup based in Denver, Colorado that is aiming to use AI to fix this, to make the whole process more efficient, increasing automation and bringing down costs, and it's just raised a $55 million Series B, led by XN, with Valor Equity Partners, GV, and others also participating.

Quoting from Venture Beat. Amp Robotics claims its platform delivers higher pick rates, 80 items per minute, than manual processes, as well as holistic monitoring of material streams without retrofitting. It is modular in design, enabling facilities managers to adapt it to existing workflows, and it's tailored to individual brands and skews of recyclable objects. Amp robotics products can sort not only metals, batteries, capacitors, plastics, PCBs, wires, cartons, bottle caps, cardboard cups, clamshells, lids, aluminum, and thin film by color, clarity, and opacity, but also materials made of metal, mixed wood, asphalt, bricks, concrete, and mixed plastics. Amp Cortex, the company's robotics control system, leverages a combination of AI algorithms and physical robots to orchestrate sorting, picking, and placing tasks. A three-armed picker machine with an adaptable frame area and height sits over a conveyor belt held in place by a movable steel frame.

It's fed data from AMP Neuron, which uses computer vision to distinguish visual features and self-improves by processing millions of images in the cloud across AMP Robotics Network. This allows it to more accurately sort objects and learn new classes of materials, adapt to packaging, design, and lighting changes, and recover high-demand materials like paper, tissue, and cardboard. All this data feeds into AMP Insights, an online visualization tool that monitors material stream activity and performance. Real-time notifications sent via text and email keep managers abreast of goings-on, including potential equipment issues and hazards. And AMP Insights tracks key commodities to determine things like material composition per bail, known value created or lost on

residual lines, and per hauling load, end quote. The company says that increasing the efficiency of picking and sorting recyclables in this way is already reducing greenhouse gas emissions, by half a million metric tons across its existing install base in 20 states. The new funding will be used to, quote, scale its business operations to meet the robust market demand for its technology and develop innovative new AI product applications that integrate into materials recovery facilities to increase recycling rates for its customers, end quote. And finally, it's been a long-held dream that one day we Americans might have our choice

when it comes to broadband supplier, with most of us relying on our local cable monopoly for access to the internet. And although those cable operators made grand gestures at the outset of the COVID pandemic, suspending things monopolistic suppliers usually get away with like data caps, the shift to working from home has made it even more obvious that there's room for improvement. And by the way, that promised 5G revolution still hasn't quite shown up yet. So, WeLink, a Utah-based wireless internet service. startup founded in 2018 by CEO Kevin Ross and CTO Asha Nime has raised $185 million from Digital Alpha Advisors, a telecom VC with ties to Cisco, in hopes of providing an alternative

to the status quo in terms of fixed-line monopolies that blanket the U.S. For its part, WeLink thinks millimeter wave 5G and cheaper hardware have combined to open the gates to reliable wireless internet distribution at a reasonable cost. according to TechCrunch, WeLink's technology uses a mesh architecture, which means that signals can be bounced between different base stations as necessary throughout a neighborhood in order to reach a point of presence station with a fiber connection. For the typical single-family home installation, a small base station, Ross says about four inches by four inches is installed on the roof, similar to a satellite dish, and a single cable is run down to connect to the home's router or Wi-Fi station. Ross says that WeLink doesn't need a lot of density to reach ubiquity, quote, we don't need much, a couple of percentage points in a neighborhood of take rate, and that actually ends up giving us blanket coverage.

What happens is we will typically get north of 5% very quickly, end quote. Once a neighborhood has an even higher rate of, say, 10%, quote, there's so much redundancy there, Ross said. The company says it offers up to 940 MbPS download and upload, and upload, although, of course, your mileage will vary in reality. But note, I said both, because that bandwidth is symmetrical, unlike cable internet, and that, of course, should be good for video broadcasting and large file uploads in this remote work, or even influencer and creator world. He also notes that the company doesn't need a lot of approvals from cities

in order to launch, which has historically been a large barrier to new internet connectivity startups. Quote, there's no permitting required other than at our fiber points of presence where we're broadcasting from, but those are minimal, end quote. We link plans to go live first in Henderson, Nevada, followed by launches in Tucson and Phoenix. Its service will cost consumers $80 per month. So, what did you think? Looking for some feedback on this. I'll try to remember to put a thread up on the show subreddit at R-slash ride home, but yeah, any and all thoughts on this format are welcome. Talk to you on Monday.