Monday, November 1, 2021

TechCrunch

TechCrunch

When I Work, an messaging app that lets shift-based teams schedule work and more, raises $200M

Posted: 01 Nov 2021 01:40 AM PDT

Hourly workers make up abut 55% of the working world, yet when it comes to tech built for the world of work, their so-called knowledge worker counterparts dominate the space. Today, an app built specifically to address the needs of the former is announcing a big round of funding — underscoring both the evolving landscape of business software, and how hourly and shift workers are increasingly coming into their own.

When I Work — a popular messaging platform that lets hourly workers employed by a business sign up for shifts, trade shifts with colleagues, and let management and others know when they cannot make it to a shift — has closed a growth round of $200 million, funding that the company will be using both for business development, and to expand its product.

The funding is coming from a single investor, Bain Capital (specifically its Tech Opportunities fund), and while the pair are not disclosing valuation, it’s being described as a “majority growth investment”, which implies something around $400 million. CEO Martin Hartshorn said in an interview that When I Work is profitable, and it has been since June of last year — notable considering we were in the depths of pandemic living and economic uncertainty — and its steady rise was the reason for raising now, after raising just $24 million in the 11 years prior.

“We have hit a new phase,” he said, with growth currently “north of 35%” and generating a profit. “The customers love the product and culture is really good. We've got something great and it’s time to go for it.”

Previous backers include Arthur Ventures, Drive Capital, Greycroft and High Alpha.

Founded in Minneapolis in 2010, When I Work says its app is already used by some some 10 million hourly workers in the U.S. across some 200,000 businesses, with a focus on smaller businesses and franchises of well-known names (the list includes Dunkin', Ace Hardware, Ben & Jerry's and Kenneth Cole). Some of that growth has specifically come from the changing needs of the market: while some retailers were forced to shutter operations, and some closed down altogether, other sectors like healthcare picked up steam.

Hartshorn noted that in Q2 of this year, the company picked up more than 50 customers “spinning up vaccination operations” — that is, building shift-based systems to handle that effort. The plan will be to continue doubling down on the opportunity in the U.S. as well as to start moving into other markets internationally.

As for the app itself, it has mainly made its name around providing tools to make it easier to communicate with shift-based and hourly staff, people whose hours mean that it’s unlikely that everyone would be at the business at the same time for meetings, and have potentially more variable schedules when they work, schedules that often need shifting depending on customer traffic and the circumstances of workers themselves.

As its name implies, When I Work’s most-used functions and managing shifts and communicating with the team, addressing what are the biggest and most general productivity challenges for that segment of workers. But over time it has capitalized on the audience and engagement to add in other services like payroll facilitation (interconnecting with more dedicated payroll software), labor reports, and analytics, and the idea is that this part will continue to grow, both organically and likely by way of acquisition.

Software catering to the world of work has largely been focused on so-called knowledge workers over the last decade or two: equipped with computers, smartphones and tied into work that relies on software and apps, that segment was a natural fit for more software tools, which have if anything only become more specialized over time, addressing specific verticals and use cases.

Yet digital transformation, and the rise of smartphone usage among the general population, have presented a host of new opportunities to expand the products and use cases for software in the workplace to touch a much wider swathe of workers. The population at large has shifted to using apps and other digital products in their daily non-work lives, and so they, too, want and are ready for those tools to help them do their work more easily, too.

In the case of When I Work, employees install it on their own smartphones, a signal of how bring-your-own-device has been an even stronger trend in this category of workers than it has been among knowledge workers. (They log in much as you might on any other work-based app, based on the company you work for and your mobile number or email.) Hartshorn said that a good part of its growth has been from word-of-mouth, with employees asking for it from new employers, having used it at a previous job.

But given that wider trend, it’s no surprise that company is not without competitors, as well as others addressing the same segment of workers that could potentially also become competitors, if not already. They include the likes of Homebase, which raised $71 million earlier this year; Workiz, which focuses on home services pro’s; Fountain and Wonolo (both currently aimed more at recruiting and signing less-than-full-time people up to shifts); WorkWhile; Yoobic (more of a productivity platform for frontline workers currently); Crew (which Square acquired earlier this year); Workplace (which now has 7 million paying users); and Justworks (which in September filed to go public). The fact that some of these are addressing the same segment of users, but with different features, also presents something of a roadmap for When I Work and how it might expand, too.

Phil Meicler, an MD at Bain Capital Tech Opportunities, said that the engagement on When I Work — 85% of its users log in an use it at least once a week — makes the app one of the more compelling in that bigger field.

“In today's modern workforce, having a solution that yields such clear productivity gains and strong employee engagement are unique,” he said, noting that the labor shortage among the hourly working sector has become even more acute in recent times. “Doing what it does at scale and efficiently is difficult to execute. The combination of growth and profitability was a core part of why we were excited about When I Work.”

He added that Bain “shares Martin’s vision” to continue to expand the HR suite. “Building out the product through the eyes of the employees what else they use, how we could extend to make their lives easier, is the aim, and it has a terrific foundation in scheduling. It has a unique opportunity to grow organically and through M&A.”

Kenya’s Twiga raises $50M to scale food solutions across Africa

Posted: 01 Nov 2021 12:00 AM PDT

Years ago, Americans spent most of their disposable income on food but consistent investment in retail infrastructure has changed that. Now, they only spend 6% of their household income on food and beverages.

Africa still battles with this and it is not hard to see why. The continent's retail markets are highly fragmented and mostly made up of small and informal retailers and intermediaries, which is why a ton of tomatoes that costs around $100 in the U.S., for instance, costs about $400 in Kenya.

Since 2014, Twiga Foods has been using technology to build supply chains in food and retail distribution on the continent, starting with Kenya. Today, the seven-year-old company is announcing a $50 million Series C round to scale its efforts in the East African nation and other neighbouring countries.

This funding comes after the company's $30 million Series B round — $23.75 million equity and $6.25 million debt — in 2019. Per Crunchbase, Twiga has raised over $100 million in both debt and equity financing rounds.

For most of Twiga's operational history, it connected vendors and outlets with farmers via an app to access different agricultural produce. 

But in 2019, the company began to connect FMCGs and manufacturers with retailers in Kenya in a bid to increase revenue, thereby dipping its hands into a space with regional players such as Sokowatch and MarketForce. 

"We see ourselves as building a one-stop-shop for the informal retailer and all their needs. So that's what we're evolving into as a business," CEO Peter Njonjo said to TechCrunch in an interview.

The B2B e-commerce food distribution platform claims that over 100,000 customers use its services across Kenya while delivering more than 600 metric tons of product to 10,000+ retailers daily.  

Kenya's Twiga Foods eyes West Africa after $30M raise led by Goldman

Njonjo affirms that smallholder farmers remain at the core of Twiga's operations. But having worked with them at scale and distributing fresh produce over the years, the Kenyan company has identified some challenges, especially in the traceability of some produce like tomatoes.

Twiga can effectively track food and produce from processing to distribution. However, there's bound to be some lapses in the production end of things where for instance, farmers can apply a lot of pesticides to crops without Twiga's knowledge, thereby creating food safety problems for the end consumer.

To avoid situations like this in the future, Twiga plans to personally handle the value chains of some produce where traceability can be an issue.

"For us, it's choosing value chains where you can manage the traceability issue while there are some value chains that will be harder to manage," the CEO said, "The key thing is that we now have a more blended approach. It's not just about working with small farmers; we still work with them but on some value chains. But we're looking at having large commercial farms integrated into our supply chain."

Njonjo says Twiga is investing in a proof of concept to develop an alternative way of producing food on the continent and cover both ends of traceability and mass scale. 

According to the company, the proof of concept aims to reduce the price consumers pay for popular domestic plant-based food products by over 30%. 

Once the company manages to set it up, Njonjo says the model might be spun off as a separate business to maintain a more asset-light approach to expansion.

The funding will be used to test the concept out. Twiga also plans to use part of the funding to roll out low-cost manufactured food and non-food products under its brand before the end of the year.

Most of the investors from Twiga's Series B round in 2019 took part in this recent fundraise. This time, however, Paris- and Nairobi-based family office and private equity firm Creadev led the Series C round.

Africa-focused firms TLcom Capital, IFC Ventures, DOB Equity, and Goldman Sachs' spinoff Juven, wrote follow-on checks too. First-time investors OP Finnfund Global and Endeavor Catalyst Fund participated as well.

"We are deeply convinced in Twiga's potential to revolutionize informal retail across  Sub-Saharan Africa," said Pierre Fauvet, Africa director at Creadev, in a statement.

"Tapping into a $77 billion urban market on the continent, Twiga has gained significant traction since inception, leveraging on technology to optimize the food supply chain in African cities and constantly innovating to better tackle logistics,  commercial, social and environmental challenges."

Goldman Sachs spinoff Juven to back African high-growth companies with large checks

The round also presented a consolidation of Twiga's cap table where earlier investors got some liquidity via a $30 million secondary sale.

When CEO Peter Njonjo spoke with TechCrunch in an interview in 2019, Twiga was targeting a pan-African expansion by Q3 2020. But the pandemic and resulting lockdowns stalled those plans, yet Twiga made good use of the situation and quadrupled its revenues within that time — from April last year to August 2021.

Two years on, the company, which now has more than 1,000 employees, is ready to make those moves and is expanding to other East African markets, Uganda and Tanzania, before the end of the year.

It is currently working with development finance partners to figure out how to scale its proof of concept where it will act as an off-taker to sell horticultural crops from February 2022 across East Africa.

"We've been fairly successful in Kenya. So, we want to consolidate our dominant position, clear out our proof of concept and expand to the neighbouring countries," remarked Njonjo, who founded the company with ex-CEO Grante Brooke. 

Hitting these targets would set Twiga up for a bigger fundraise sometime next year, according to Njonjo. After that, Twiga will look at other markets — Cote d'Ivoire, DRC Congo, Ghana and Nigeria. Njonjo adds that Twiga's expansion into Nigeria might involve some M&A action.

Roblox is back online after three days of Halloween outage

Posted: 31 Oct 2021 07:36 PM PDT

Roblox, the gaming platform that is immensely popular amongst young players, said on Twitter Sunday evening that it is back online worldwide.

The recovery came after an outage that lasted three days, a somewhat rare streak of blackout for a tech firm of Roblox’s colossal size. The company said earlier that the cause was an “internal system issue.”

“A core system in our infrastructure became overwhelmed, prompted by a subtle bug in our backend service communications while under heavy load,” David Baszucki, Roblox’s founder and CEO explained in a post after operations were restored.

“This was not due to any peak in external traffic or any particular experience. Rather the failure was caused by the growth in the number of servers in our datacenters. The result was that most services at Roblox were unable to effectively communicate and deploy.”

Recovery “took longer” than expected due to “difficulty in diagnosing the actual bug,” Baszucki said.

Rumors had it that a promotional partnership between the gaming platform and Chipotle, which planned to give out $1 million worth of free burritos to Roblox players around Halloween time, led to the crash. Roblox denied in a tweet that the disruption was caused by any “experiences or partnerships” on the platform.

The Roblox crash also came on the heels of Facebook’s rebranding announcement to become Meta. Roblox, which allows users to build and play games, is often seen as the emblem of metaverses.

The outage is not just causing impatience among young users over Halloween weekend but also Roblox’s millions of developers who make money by touting games to kids and teens. Roblox had more than 43 million daily active users as of August.

It remains to be seen whether the three-day disruption will dent Roblox’s investor confidence in the company’s technical capacity once the market opens on Monday.

Roblox raises at $29.5 billion valuation, readies for direct listing

Gillmor Gang: Trick or Treat

Posted: 31 Oct 2021 05:34 PM PDT

On the last Gang recording session in early October before the birth of our first grandchild, I tried to stir the pot by attacking Democratic Progressives for capsizing the second of two Infrastructure bills. The moderates, led by the recalcitrant Joe Manchin and his silent sidekick Kyrsten Sinema, were successfully gumming up the Democrats’ best chance for holding control of the House and perhaps Senate. What else is new, you say?

In tech news, Facebook was busily exploiting the tone deaf policy of getting slightly irritated with growing pressure from whistleblowers, former venture capital critics who built their careers on the company’s early success, and a two-fisted teamup from a Congress in over its head and the media looking for a good story to replace Donald Trump’s devolution as credible threat. Today, Facebook ads talk of reforming Section 230 and otherwise providing rules for the company to follow. Infrastructure bingo has whittled down the cost by 60%; the plan is to get it passed in time to influence the election of the Governor of Virginia.

As I write this, it’s the end of October. I went to Ray Wang’s CCE conference down the coast in Half Moon Bay. The Ritz exists in a time warp, where the details of the outside world fade into the sound of the Pacific Ocean lapping up against the gentle lawns. Like the Ritz, conferences are testing the principles of the last economy against the shimmer of the next one. We could call it Work from Anywhere or Build Back Better or the last Beatle record, but I suggest we dig in to the fundamental shift and play in the surf of a new reality.

It’s a reality where each of us with a little coin in our pockets and a phone can participate in the new media. It’s not quite an even playing field, as accumulating a meaningful audience is not provided with the available cloud tools. But what is provided is plenty to start with: a free newsletter tool, free social audio tools to broadcast and evangelize the newsletter’s editorial agenda, and tickets to a dazzling array of services and streaming choices to distribute your stuff. So, a few freemium products to jumpstart things and then look out, hold on to your wallets. The net result of this is called the creator economy by vendors and prospective producers, but it’s more likely a consumers economy.

We saw this with blogs and then podcasts, born out of RSS and its attachment extension. The RSS readers gave us civilians the ability to aggregate the stuff we wanted in what looked like an email client but also a newsgroup. Twitter added a layer of social graph which broad- or narrowcast our preferences to an emerging social cloud, a sphere of influence that both aggregated media and inserted us into that media flow on equal terms. As someone who was lucky enough to find access to the technology press pre-blog, I knew full well what a powerful hand-hold this new technology proffered. I can see the same fingerprints in this new economy as certain newsletter nodes create a pecking order for what I and our virtual cohort deems valuable. Social signals provide clues and notification trails to identify, amplify, and negotiate tickets to what I perceive as the new post-pandemic conference.

At CCE, a Salesforce colleague allowed as how he’s stopped watching the Gang because our Trump talk is too depressing. Of course, who really needs another podcast anyway. To be fair, Trump has been largely replaced by Manchin, but the pain point is more and more the media’s difficulty in defining a rationale for coverage that doesn’t descend into picking fights and promoting a lifestyle of anxiety and anger for ratings. This should be good news for the new economists, but secretly we all want to become the “real” media and are subverted into a similar editorial model. So my complaining about conflict of interest in the media is about as inconsequential as worrying about Trump. If I don’t like it, build it back better.

Well, I'd like to, but I have to wait a while longer for the promised Record/Replay function to ship on Clubhouse, Twitter, and everywhere. I've had the ability to record for months, but what I'm waiting for is everybody to have access to the marketplace. Talent will out, and not just talent in words or one-directional podcasts but in marketing, analytical insights, pure promotion, and actionable ideas that shape all these domains. And this means holding these folks accountable to their promises. Clubhouse said "weeks" more than a month ago.

A day ago, Twitter announced new features for its Twitter Labs early look subscription service, unfortunately only available currently in Canada and Australia. I’d gladly pay $4.95 a month to test out new features. And more importantly, who else would? C’mon, @jack, I’ll even pay with bitcoin if I have to. But things are moving quickly: Twitter just announced record tools are now in beta and will ship to creators and listeners in a couple of weeks. Et tu, Clubhouse?

At CCE I met with Paul Greenberg, who, with his partner (and Gillmor Gang member) Brent Leary, are building a series of what he calls live streaming shows around the CRM Playaz banner. Paul says he looks forward to this column/newsletter and that I should write more and more often. I recognize what Paul and Brent are doing in live streaming as the leading edge of what this moment is about, so I understand what they mean by encouraging this work I’m doing. These tools, together with the experiences and network of colleagues and friends I’ve accumulated along the way, give me an extraordinary opportunity to extend ideas, styles, and the actual music of what we crave as the consumer economy. When what I do works, even I appreciate it, and in truth has always been my northern light in talking with an audience no matter how large or undetectable. And the rewards on the upside can be astonishing.

We all know how the Grateful Dead spawned a forest of recorders and microphones at their concerts, not just allowing but encouraging it by letting some of them plug into the group’s live mixing board. By the late Eighties, a band that was largely a touring outfit had transcended the record business and stood as the largest grossing live act on the planet. It also spawned a hit album and only Top Ten single, Touch of Grey, through the force of the Dead micro-community, not the other way around.

the latest Gillmor Gang Newsletter

__________________

The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary and Steve Gillmor. Recorded live Friday, October 29, 2021.

Produced and directed by Tina Chase Gillmor @tinagillmor

@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang

Subscribe to the new Gillmor Gang Newsletter and join the backchannel here on Telegram.

The Gillmor Gang on Facebook … and here's our sister show G3 on Facebook.

Zepto, a 10-minute grocery delivery app in India, raises $60 million

Posted: 31 Oct 2021 11:34 AM PDT

Two 19-year-old entrepreneurs, who previously collaborated on a number of projects including a ride-hailing commute app for school kids and left Stanford last year to pursue a new startup, said on Sunday they have raised $60 million to disrupt India's overcrowded and highly-competitive grocery delivery market.

Glade Brook Capital led Zepto's first institutional financing round, the startup's founder and chief executive Aadit Palicha told TechCrunch in an interview. Nexus, Y Combinator, Global Founders Capital, as well as angel investors Lachy Groom, Neeraj Arora, and Manik Gupta also participated in the round, which values Zepto at $225 million.

Zepto, which has largely operated in stealth mode until today and launched its app six months ago, has been the talk of the town for several months. The startup, whose name playfully uses a mathematical term to describe the business, offers a 10-minute grocery delivery service, beating many heavily-backed rivals on speed.

To achieve this feat, Zepto has set up dark stores across the cities where it operates (Mumbai, Bangalore, and as of this week, Delhi.) Palicha said these dark stores, which the startup has set up, are designed and optimized for fast deliveries. (Zepto's approach, for which Palicha said he looked at other markets and spoke with the operators running those firms, is different from many Indian startups that rely on regular grocery stores for inventory.)

“The way we are growing right now, and the current penetration and frequency of usage we are seeing, the opportunity is just massive,” he said. The startup plans to soon expand to Hyderabad, Pune, and Kolkata and grow the number of dark stores it has to over 100 by early next year, from 40 currently, he said.

A dark store operated by Zepto. (Image credits: Zepto)

The idea to create Zepto came, said Palicha, when he and Kaivalya Vohra (the other founder) were locked in their houses in Mumbai last year because of the pandemic. “We just had been exposed to the entrepreneurial and tech startup world in a very deep way. Now we were in Mumbai and the biggest problem for the two of us bachelors was securing grocery and essentials,” he said.

Maharashtra — like every other Indian state — had enforced lockdown to contain the spread of the virus, which among other things, meant that deliveries were taking two to three days to reach their customers. “We were extremely frustrated,” he said.

“We felt that the online play of the Indian grocery delivery space, which is one of the world’s largest, was grappling with some gross execution errors,” he added, without naming any firm.

Zepto, which has assembled a team that includes former executives from Flipkart, Uber, Dream11, Pharmeasy, and Pepperfry, competes with a number of heavily-backed startups including SoftBank-backed Swiggy and Grofers, and Google-backed Dunzo, many of which have expanded to the fast grocery delivery category in recent quarters.

“We've been ignoring the noise and executing heads- down for a long time to perfect this model, and our efforts are paying off. Today, we're consistently growing 200% every single month with an unstoppable team, robust product infrastructure, and deep access to institutional capital," said Palicha.

At stake is an opportunity that is estimated to be worth $21 billion by 2025, according to a recent note prepared by Sanford C. Bernstein analysts. “Online grocery penetration is expected to reach ~3-5%, by 2025 from less than 1% today. Long-term structural drivers remain strong: rising income and affluence, lower tier consumption, e- commerce penetration (~30% CAGR) and a young population (~50% below 25). Grocery spend as a proportion of income remains high at ~ 30%,” they wrote in the note.

“There is significant room for driving higher penetration in existing cities with high traffic, increase in conversion and retention. Adoption of online grocery has increased with engagement level and order volumes accelerating. DAU (daily active users) has seen strong growth for many e-grocery apps during lockdowns. Downloads have increased recently. Online grocery has demand side advantages of 24 / 7 shopping, wide SKU ranges, same day/next.”

Online platforms have a responsibility to protect children from harm

Posted: 31 Oct 2021 07:47 AM PDT

Kathryn Kosmides Contributor
Kathryn Kosmides is a survivor of gender-based violence and the founder of nonprofit background check Garbo.

Facebook whistleblower Frances Haugen's message about Instagram's impact on teenage girls was unequivocal: Facebook's studies found that 13% of British teens said Instagram prompted thoughts of suicide, and 17% of teen girls say Instagram makes eating disorders worse.

These statistics, however, are only one part of the bigger picture when it comes to the general safety of teenagers online.

It's estimated that there are over 500,000 sexual predators active on the internet each day. In 2020, there were over 21.7 million reports of suspected child sexual exploitation made to the National Center for Missing & Exploited Children's CyberTipline. Online enticement reports — which detail when someone is communicating with a child via the internet with the intent to exploit them — increased by more than 97% from the year before.

Reports of online predators are on the rise, but predatory behavior online is as old as Netscape.

My family got our first PC in 1999. I started on gaming platforms like Neopets and Gaia Online. Soon, I was posting thoughts and communicating with other users on Myspace and Tumblr. As my online world expanded, I encountered old men pretending to be preteens. At one point, I began a "relationship" with a 17-year-old boy when I was just 12 years old. Of course, I didn't talk about any of this, mostly out of shame. I didn't know I was being groomed — I had never heard the word used until I started doing gender-based violence work myself.

Grooming is subtle, and for a teen unfamiliar with it, undetectable. An individual grooms to build trust and emotional connection with a child or teen so they can manipulate, exploit and abuse them. This can look like an older teen asking to webcam and slowly prodding a child or teen to do inappropriate things such as spin around for them or change clothes to something "cuter," or a digital "friend" pressuring someone to engage in cybersex. Predators sometimes pretend to be a young person to obtain personal details such as photos or sexual history; they then weaponize this information for their own pleasure.

I only recently realized that there is CSAM — or child sexual abuse material — of me out there on the internet. Footage of me may still reside on someone's old cell phone or on a hard drive collecting dust. It could one day be shared onto private Discords or Telegram channels.

My individual experience as a teen girl on the internet is part of what led me to build a nonprofit online background check that allows anyone to see if someone they are speaking with has a history of violence — ideally before the first in-person meeting. We recently made the decision to allow users as young as 13 to access our public records database in the future. While we may never be able to entirely stop children and teens from being exploited online, we can at least arm them with tools and technology to understand whether someone they meet online has a record of bad behavior.

Of course, a background check is only one tool in the safety arsenal — people frequently lie about their names and identities. If a child is being groomed, or an adult is exploiting them, they are often doing so in ways that are anonymous, isolated and secret.

This is why educating young people about avoiding the dangers that lurk online is key. This can involve teaching them to identify early red flags like love bombing, extreme jealousy, pushing boundaries, etc. We can also communicate to young people what a healthy, safe, consensual relationship looks like — with "green flags" as opposed to red ones.

There are various practical skills that we can incorporate into kids’ education as well. Teach them to be selective about what photos they share and whose follow requests they accept and to bring an adult if they meet people they know online in real life.

When the adults in their lives discuss the dangers of online dating and internet communication openly and consistently, children and teens learn how to recognize the risks. This can go a long way toward preventing serious trauma. Conversations about safety online, like sex education, are often left to parents, while parents assume kids are having them at school. It can be difficult to navigate these discussions, especially for parents who don't always understand online culture, but it is essential that parents seek out resources to educate themselves.

As Haugen pointed out, online platforms also have a responsibility. Trust and safety departments at online platforms are relatively new, and there's still a lot to learn and improve on.

On most digital platforms, content moderators are understaffed, underpaid and undertrained. Online platforms need to put protection over profit and invest in additional training and support for the mental health of those responsible for keeping their platforms safe. By giving safety teams the tools and time they need to think critically about questionable content, they can execute on their mandate effectively and with care.

Though the internet can create environments that lead to abuse, it can also be a powerful tool in educating young people about early warning signs and the realities of the world, including arming them with access to information about who they’re talking to online.

Reactive measures to combat abuse — from the criminal justice system to platform moderators — are a Band-Aid on a bleeding wound. Preventing sexual abuse before it happens is the best protection we can give our kids. By taking responsibility — whether as platforms, politicians or parents — for the potential harm caused online, we can begin to create a safer world for all of us.

One woman’s mission to build a network of female and non-binary angel investors

Posted: 31 Oct 2021 07:45 AM PDT

Angel investing has traditionally been mostly open to men, who travel in certain circles and have access to certain networks, but Amanda Robson, a principal at Cowboy Ventures, is attempting to change that by building an informal network of women and non-binary folks who have the means to write checks, but for whatever reason have not been able to easily move into this type of investing.

Robson says that when it comes to angel investing, women and non-binary people have been left out. “I had a number of friends who had recently within the past couple of years become VP-level at different companies, and they had an interest in angel investing, and they had the means to at that point, but they didn’t have access,” she said.

That was in contrast to males in a similar position. “They found that a lot of their male counterparts who were also execs or male founders were getting pinged by their VC friends to join in on deals, and they weren’t getting the same treatment,” she said.

Robson says that she found this surprising at first because at her firm, they try to fill the cap table with a diverse set of angels. As she looked around, she found that wasn’t the case at all firms, but it wasn’t always because of a lack of desire to be more diverse. It was also a sourcing problem. They didn’t know where to look.

Amanda Robson, principal at Cowboy Ventures

Amanda Robson, principal at Cowboy Ventures

So if you had one group looking to invest, and another looking for diverse investors, it seemed that something could be done to bridge the gap. “I just found myself in a unique position having been in venture for almost six years and having a bunch of VC relationships because of that, and then also having access to awesome female [and non-binary] founders and operators that I could kind of bridge that gap in a pretty seamless way,” she said.

Her experience is not uncommon. Diana Murakhovskaya, general partner and co-founder at the Houston-based Artemis Fund, told TechCrunch recently that prior to launching the fund in 2019, she and her co-founders attended networking events in the Houston area and noticed a dearth of women. She started hosting dinners to find out why.

"I said, 'Where are all the women?' [ … ] And so we started doing these dinners to bring together women and asking them why they're not investing, what they're doing. And these were all corporate women [who had the money to invest]." Like Robson, Murakhovskaya found that these women had never been invited to invest, and they started a firm to change that.

Robson took a different approach. She has a day job, but she knew that she could make some introductions when it made sense. “So I’m the conduit between the two [groups]. I have this database with angel investors and other VC relationships and then also deal flow that I see that will come from other angel syndicate groups or deals that Cowboy can’t invest in because we’re conflicted out, and I try to connect those two,” she said.

Robson, on her own, created this database of people, many of whom she knew previously or learned about when she put out a call for female and non-binary angel investors on Twitter. “I chatted with them and got a sense of their background and what they were interested in, if they truly understood the risks and dynamics of angel investing, and added folks that way.”

She said going outside her network would also help create a more diverse database that went beyond people she had known personally. “I also knew that my network would be limited, and the whole point of this is increasing access, so I wanted to be a little bit more public about it so folks who wanted to be angels could see those messages on Twitter and then join in,” she said.

The database includes the names, check sizes they are willing to invest, sectors they want to invest in and previous investments (if any). She says that typical check sizes are between $15,000 and $50K, but she has seen checks as small as $5K or less as she attempts to get more people involved.

“In some cases recently there have been newer female [and] non-binary angel investors who have wanted to write checks that are $5K, some even below, and some founders and VCs have been open to those smaller check amounts because they want to add diversity to the cap table,” she said.

Lisa Wallace, who is co-founder at pay equity startup Assemble, says that she had been an angel for a couple of years when she responded to one of Robson’s tweets. She also found that when her company was raising a seed round, it was difficult to find a diverse group of angels for her cap table. She says that Robson’s network solves both problems.

“I think that there’s actually two parts of the problem. First of all, I’m a diverse angel, and I want to make sure that I [can access] dealflow, selfishly. But on the other side of it, it would have been really easy had Amanda had this when I was raising my round because I would have just pinged her,” Wallace said.

Stella Garber is another angel in Robson’s network who is former CMO at Trello, and started angel investing in 2016. She too came across one of Robson’s tweets and says that it’s always good to find other sources of possible deals as an angel investor.

“It’s really great to see all the different types of deals that come through that channel. There’s been a mix of all types of different industries, mostly early stage I would say. But obviously as an angel, you have to do your own due diligence, but it’s just nice to have that channel to get deals from,” Garber said.

While these two had experience in angel investing, not everyone does, so Robson has also been helping set up workshops to explain what’s involved to those who are expressing interest and want to learn the mechanics of this type of investing.

Robson admits that quite a bit overhead is required to run the network because she is the sole conduit. But she says that it’s the kind of job that is hard to outsource because she has the first-hand knowledge of both firms and angels that the role requires.

“I do want to get some help to grow it, but I also think that there are limits to how much I can outsource any parts of this because the access piece is super important. I’ve been doing this for four to five months and I’ve only sent 18 deals through, but all of those ended up getting a lot of interest from the group because they’re highly curated.”

She says the ultimate purpose is to build this network of successful angels. “I want to have these rockstar angels who’ve gotten access to amazing deals and have amazing track records. And so that’s really the ultimate goal. And it’s more about that and in making these angels successful than me leading this group.”
at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

guest post needed

Hi I hope you're doing well. I'm reaching out to discuss the possibility of publishing articles on your website. Along with guest ...