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From pickup basketball to market domination: My wild ride with Coupang

Ben Sun
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Ben Sun is co-founder and general partner at Primary Venture Partners, a seed-stage VC firm based in NYC.

A month ago, Coupang arrived on Wall Street with a bang. The South Korean e-commerce giant — buoyed by $12 billion in 2020 revenue — raised $4.55 billion in its IPO and hit a valuation as high as $109 billion. It is the biggest U.S. IPO of the year so far, and the largest from an Asian company since Alibaba’s.

But long before founder Bom Kim rang the bell, I knew him as a fellow founder on the hunt for a good idea. We stayed in touch as he formed his vision for what would become Coupang, and I built it alongside him as an investor and board member.

As a board member, I’ve observed a brief quiet period following the IPO. But now I want to share how exactly our paths intersected, largely because Bom exemplifies what founders should aspire to and should seek: big risks, dogged determination and obsessive responsiveness to the market.

Bom fearlessly turned down an acquisition offer from then-market-leader Groupon, ferociously learned what he didn’t know, made a daring pivot even after becoming a billion-dollar company, and iteratively built a vision for end-to-end market dominance.

Why I like talking to founders early

In 2008, I met Bom while playing a weekend game of pickup basketball at Stuyvesant High School. We realized we had a mutual acquaintance through my recently sold startup, Community Connect Inc. He told me about the magazine he had sold and his search for a next move. So we agreed to meet up for lunch and go over some of his ideas.

To be honest, I don’t remember any of those early ideas, probably because they weren’t very good. But I really liked Bom. Even as I was crapping on his ideas, I could tell he was sharp from how he processed my feedback. It was obvious he was super smart and definitely worth keeping in touch with, which we continued to do even after he relocated to go to HBS.

I soon began investing in and incubating businesses, starting mostly with my own capital. When I got a call from an executive recruiter working for a company in Chicago called Groupon — who told me they were at a $50 million run rate in only a few months — I became fascinated with their model and started talking to some of the investors, former employees and merchants.

Inspired, and as a new parent, I decided to launch a similar daily-deal business for families: Instead of skydiving and go-kart racing, we offered deals on kids’ music classes and birthday party venues. While I was working on this idea, John Ason, an angel investor in Diapers.com, said I should meet with the founder and CEO Marc Lore. By the end of the meeting, Marc and I etched a partnership to launch DoodleDeals.com co-branded with Diapers.com. The first deal did over $70,000 — great start.

I’ve observed a brief quiet period following the IPO. But now I want to share how exactly our paths intersected, largely because Bom exemplifies what founders should aspire to and should seek: big risks, dogged determination, and obsessive responsiveness to the market.

All that time, I kept in touch with Bom. In February 2010, we were catching up over lunch at the Union Square Ippudo, and he asked if I had heard of Buywithme, a Boston-based Groupon clone. He hadn’t yet heard about Groupon, so I explained the business model and shared the numbers. He thought something similar might transfer well to South Korea, where he was born and where his parents still lived.

This kind of conversation is exactly why I love working with founders early, even before the idea forms: You learn a lot about them as they explore, wrestle with uncertainty and eventually build conviction on a business they plan to spend the next decade-plus building. Ultimately, success comes down to founders’ belief in themselves; when you develop the same belief in them as an investor, it is pretty magical. I was starting to really believe in Bom.

The idea gets real — and moves fast

I'm not Korean — I am ethnically Chinese — so Bom put together slides on the Korean market and why it was perfect for the daily-deal model. In short: a very dense population that’s incredibly online.

I’m not Korean — I am ethnically Chinese — so Bom put together slides on the Korean market and why it was perfect for the daily-deal model. In short: a very dense population that’s incredibly online. Image Credits: Ben Sun

I told Bom he should drop out of business school and do this. He said, “You don’t think I can wait until I graduate?” I responded, “No way! It will be over by then!”

First-mover advantage is real in a business like this, and it didn’t take Bom long to see that. He raised a small $1.3 million seed round. I invested, joined the board. Because of my knowledge of the deals market and my entrepreneurial experience, Bom asked me to get hands-on in Korea — not at all typical for an investor or even a board member, but I think of myself as a builder and not just a backer, and this is how I wanted to operate as an investor.

Once he realized time was of the essence, Bom was heads down. For context, he was engaged to his longtime girlfriend, Nancy, who also went to Harvard undergrad and was a successful lawyer. Imagine telling your fiancée, “Honey, I am dropping out of business school, moving to Korea to start a company. I will be back for the wedding. Not sure if I will ever be coming back to the U.S.”

I emailed Bom, saying: “Bom — honestly as a friend. Enjoy your wedding. It is a real blessing that your fiancée is being so supportive of you doing this. Launching a site a few weeks before the wedding is going to be way too distracting and she won’t feel like your heart is in it. Launching a few weeks later is not going to make or break this business. Trust me.”

Bom didn’t listen. He launched Coupang in August 2010, two weeks before the wedding. He flew back to Boston, got married and — running on basically no sleep — sneaked out for a 20-minute nap in the middle of his reception. Right after the wedding, he flew back to Seoul. Nancy has to be one of the most supportive and understanding partners I have ever seen. They are still married and now have two kids.

Jumping on new distribution, turning down an acquisition offer

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Tiger Global leads $100 million investment in Indian social commerce DealShare

Tiger Global has invested in DealShare, a startup in India that has built an e-commerce platform for middle- and lower-income groups of consumers, just three months after the Indian firm concluded its previous $21 million Series C funding round.

The New York-headquartered firm has led the $100 million Series D round in three-year-old social commerce startup DealShare, two people familiar with the matter told TechCrunch. Tiger Global declined to comment, and a founder of the Indian startup didn’t return an email sent on Sunday.

Indian news outlet Entrackr reported Monday evening that DealShare was in talks to raise $70 million to $100 million.

DealShare kickstarted its journey the day Walmart acquired Flipkart, the startup’s founder and chief executive Vineet Rao said at a virtual conference late last year. Rao said that even as Amazon and Flipkart had been able to create a market for themselves in the urban Indian cities, much of the nation was still underserved. There was an opportunity for someone to jump in, he said.

The startup began as an e-commerce platform on WhatsApp, where it offered hundreds of products to consumers. It didn’t take long before a major consumer spending pattern was visible, Rao said. People were only interested in buying items that were selling at discounted rates, said Rao.

Over time, that idea has become part of DealShare’s core offering. Today it incentivizes consumers — by offering them discounts and cashbacks — to share deals on products with their friends. The startup, which has since launched its own app and website, now operates in over two dozen cities in India.

Consumers wanted products that were relevant to them and they wanted to buy these items at a price that instilled the most value for their bucks, said Rao. “We focused on locally produced items instead of national brands. Even today, 80% to 90% of items we sell are locally produced,” he said.

How DealShare model works. Image Credits: Bain & Company

Amazon and Flipkart have captured less than 3% of the retail market in India, leaving room for firms to explore other models. Social commerce is one of the bets we’re seeing being played out in India. The other bet gaining traction is digitizing neighborhood stores in the country — without so much of the social element — that dot tens of thousands of towns, cities and villages in India.

The investment comes as Tiger Global looks to close over two dozen deals in India this year, TechCrunch reported on Monday. Tiger Global, which recently closed a $6.7 billion fund, last week led investments in social network ShareChat, business messaging platform Gupshup, and investment app Groww, and participated in fintech app CRED’s round, helping all of these startups attain the much sought-after unicorn status.

Meesho, the market leading social commerce in India, also turned a unicorn last week after SoftBank led a $300 million round in the Indian firm, valuing it at $2.1 billion.

DealShare counts WestBridge, Falcon Edge Capital’s Alpha Wave, Z3Partners, and Omidyar Network among its investors.

From India’s richest man to Amazon and 100s of startups: The great rush to win neighborhood stores

Tiger Global goes super aggressive in India


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Cannabis banking act passes U.S. House with bipartisan support

The U.S. House of Representatives passed a landmark bill aimed at easing restrictions placed on the cannabis industry. The SAFE ACT (Secure and Fair Enforcement) banking act provides safe harbor for financial institutions to work with cannabis operators. If passed by the Senate and approved by President Biden, this bill would allow the cannabis industry to access traditional banking services, which has so far been forced to do much of their business with cash.

This is the fourth time the SAFE ACT passed the House of Representatives. A previous version of the bill passed the House in 2019, but later died in a Senate committee and never reached then-President Trump’s desk.

Under the current bill, the SAFE ACT would protect banks and credit unions from federal prosecution when operating with cannabis companies compliant with their state’s laws. This would open up traditional lines of capital from financial institutions, which have been unavailable since cannabis is still considered illegal on a federal level. The SAFE ACT would allow these banks to work with operators in states where cannabis is legal.

Cannabis is currently legal for medical purposes in thirty-six states, four territories, and the District of Columbia. Recreational use is legal for adults in eighteen states, two territories, and D.C.

The bill passed the House with broad bipartisan support and was approved by 321-101. Before the bill’s passing, a letter showing support of the legislation was sent to House leadership from 20 state governors and one U.S. Territory and bankers from each state and a coalition of state treasurers.

With support from both parties, advocates and industry experts feel more confident that this bill will pass the Senate and reach President Biden’s desk.


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Indonesian edtech CoLearn gets $10M Series A led by Alpha Wave Incubation and GSV Ventures

A Zoom screenshot with CoLearn's founding team: Marc Irawan, Abhay Saboo and Sandeep Devaram

A Zoom screenshot with CoLearn’s founding team: Marc Irawan, Abhay Saboo and Sandeep Devaram

Indonesian startup CoLearn started as a chain of physical tutoring centers and was in the process of shifting to a hybrid offline-online model when the COVID-19 pandemic hit. The team sensed that remote learning would permanently change how students want to be tutored and decided to focus completely on its app, which launched in August 2020. CoLearn has since been downloaded more than 3.5 million times and has about one million active users, mostly students in grades 7 to 12.

The company announced today it has raised $10 million in Series A funding co-led by Alpha Wave Incubation and edtech-focused GSV Ventures. This marks the first time both have made an investment in Indonesia. The round also included participation from returning investors Sequoia Capital India’s Surge and AC Ventures.

One of the Jakarta-based company’s goals is to improve educational standards in Indonesia. The country’s PISA (Programme for International Student Assessment, a global ranking system created by the Organisation for Economic Co-operation and Development) rankings are in the bottom 10% for math, science and reading. CoLearn’s goal is to help move up Indonesia’s PISA ratings to the top 50% over the next five years.

CoLearn’s app offers more than 250,000 pre-recorded videos with homework help. The videos serve as a hook to convince students (or their parents) to sign up for CoLearn’s live online classes.

Screenshots from CoLearn, an Indonesian online learning app

CoLearn screenshots

The company’s co-founders are Abhay Saboo, Marc Irawan and BYJU product team alum Sandeep Devaram. Despite being the world’s fourth most populous country with 270 million people, Indonesia has not seen the same level of investment and innovation in its educational infrastructure as countries like China or India, Saboo told TechCrunch. “We’re trying to solve the problem of how do you change mindsets, how do you change motivation, how do you increase in confidence levels?”

CoLearn started its offline in business in 2018, before shifting to a hybrid model. Once the pandemic hit, the company decided to go fully online. Even after schools reopen, the team anticipates that most students will prefer the convenience of online afterschool learning because going to brick-and-mortar tutoring centers can eat up hours of their time each day, Saboo said.

CoLearn’s users ask about 5 million questions through the app each month. Its AI platform matches them with video tutorials, recorded by more than 400 tutors, that break down key concepts. Saboo said creating engaging videos instead of presenting solutions in a diagram is one of the ways CoLearn differentiates from competitors like SnapAsk, which raised $35 million last year to expand in Southeast Asia.

On-demand tutoring app Snapask gets $35 million to expand in Southeast Asia

“What we realized is that kids are really craving a step-by-step explanation and this is the TikTok generation, so if a picture says a thousand words, then a video says a million,” he said. He added that students often hit pause on the video when they think they have the answer to a question, before skipping to the end to see if they got it right, indicating that they want to understand concepts instead of simply getting a solution.

CoLearn’s live online classes will be its main priority going forward and the startup hopes to replicate the success of companies like China’s Yuanfadao and Zuoyebang. As part of that goal, it runs teacher training programs and expects to train more than 200 teachers over the next two years, especially in STEM subjects. The company may eventually scale into other countries that have similar issues with their education systems, but Saboo said CoLearn’s plan is to focus on Indonesia for at last the next couple of years.

Other investors in CoLearn include Leo Capital, TNB Aura, S7V, January Capital, Alpha JWC, Taurus Ventures, Alter Global and Mahanusa Capital.

In press statement, GSV Ventures managing partner Deborah Quazzo said, “The opportunity to build efficacious learning solutions for the fourth largest country in the world is vast. The greatest businesses are created when entrepreneurs tackle large, important problems and CoLearn is doing that.”

Edtech giant Byju’s in talks to raise at $15 billion valuation

 


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Druva raises $147M at a valuation north of $2B as the cloud rush continues

Druva, a software company that sells cloud data backup services, announced today that it has closed a $147 million round of capital. Caisse de dépôt et placement du Québec (CDPQ), a group that manages Quebec’s pension fund, led the round, which also saw participation from Neuberger Berman. Prior investors including Atreides Management and Viking Global Investors put capital into the deal, as well.

Druva last raised a $130 million round led by Viking in mid-2019 at around a $1 billion valuation. At the time TechCrunch commented that the company’s software-as-a-service (SaaS) backup service was tackling a large market. (TechCrunch also covered the company’s $51 million round back in 2016 and its $80 million raise from 2017.)

Since then SaaS has continued to grow at a rapid clip, including a strong 2020 spurred on by COVID-19 boosting digital transformation efforts at companies of all sizes. In that context, it’s not surprising to see Druva put together a new capital round.

A recent tie-up between Dell and Druva, first reported in January of this year, was formally announced earlier this month. The selection of Druva by Dell could help provide the unicorn with a customer base to sell into for some time. TechCrunch wrote about Druva earlier this year, during the reporting process the company said that it had “almost tripled its annual revenue in three years.”

Its new round did include some secondary shares, which Neuberger Berman managing director Raman Gambhir described as difficult to snag during a call with TechCrunch. He explained that some of the secondary sales were due to some prior funds reaching their end-of-life cycle. Druva CEO Jaspreet Singh stressed that his backers are working to do what’s best for the company instead of merely maximizing their returns during a joint interview.

Why I’m hitting pause on ARR-focused coverage

Singh told TechCrunch that business at Druva is accelerating. Normally we’d note that that sounds like IPO fodder, especially as Druva passed the $100 million ARR threshold back in 2019. However, as the company has been making IPO noise for some time, it’s hard to predict when it might pull the trigger. Our coverage of the company’s 2016 round noted that the company could go public within a year. And our coverage of its 2019 investment included Singh telling TechCrunch that an IPO was 12 to 18 months away.

It probably is, now, but that’s beside the point. With refreshed accounts, a market moving in its direction, and some early investor relieved in its latest investment the company has quarters worth of time to play with. Still, Singh did stress that its new financing round did select investors that he said is building a long-term position; that’s the sort of verbiage that CEOs break out when they are building a pre-IPO cap table.

Gambhir told TechCrunch that his firm has already requested shares in Druva’s eventual IPO. Perhaps we’ll see Fidelity show up with a $50 million check in a few months.

Every startup that raises capital tells the media that they are going to use the funds to expand their staff, double down on their tech and, often, invest in their go-to-market (GTM) motion. Druva is no exception, but its CEO did tell TechCrunch that his company currently has over 200 open GTM positions. That’s quite a few. Presumably that spend will help the company keep its growth rate strong in percentage terms as it does, finally, look to list.

This is yet another growth round for a late-stage, enterprise-facing software company. But it’s also a round into a company that had to move its operations to the United States when it was founded, at the behest of its investors per Singh. And Druva has done some pretty neat cloud work, it told TechCrunch earlier this year, to ensure that it can defend software-like margins despite material storage loads.

It’s an S-1 that we’re looking forward to. Start the countdown.

SaaS data protection provider Druva nabs $130M, now at a $1B+ valuation, acquiring CloudLanes

 


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Fitbit’s latest is a $149 ‘luxury’ fitness tracker

It’s been a strange few years for Fitbit. After defining the fitness tracking space, the company was a bit late to the smartwatch trend, but was still able to ride that wave to a rebound. But while watches have received most of the press the now Google-owned company has garnered in recent years, bands still comprise a substantial part of its business.

Today Fitbit announced the arrival of the Luxe. It’s a weird product. There’s certainly a market for it, but it’s hard to say how much of a niche were talking about here. The company called its target demo, “a unique set of buyers whose needs weren’t being met.” Specifically, the product is a “fashioned-forward” tracker for people looking for something a bit nicer than a plastic band to wear out and about.

Frankly, it’s hard not to see some reflections of Misfit’s take on the category. Perhaps the Fossil-owned company was ahead of its time. At $149, the device is priced between the Charge and the Versa, but decidedly closer to the former. That is to say, it’s pricey in the grand scheme of fitness trackers, but more or less in line with other Fitbit products.

It is, indeed, a nice-looking tracker, as far of these things go, featuring a color touchscreen surrounded by a stainless steel case. That’s coupled with a broad range of accessories, ranging from leather to gold-colored stainless steel.

Here’s Fitbit co-founder and GM (under Google) James Park:

Over the past year, we’ve had to think differently about our health – from keeping an eye out for possible COVID-19 symptoms to managing the ongoing stress and anxiety of today’s world. Even though we are starting to see positive changes, it has never been more important to manage your holistic health. That’s why we’ve been resolute in introducing products to support you in staying mentally well and physically active. We’ve made major technological advancements with Luxe, creating a smaller, slimmer, beautifully designed tracker packed with advanced features – some that were previously only available with our smartwatches – making these tools accessible to even more people around the globe.

Certainly physical and mental health have been top of mind over the past year, even as step counts have dramatically plummeted. The device sports the usual array of Fitbit sensors, tracking activity, sleep and stress. It also works with a number of different mindfulness/meditation apps, including the company’s recently announced partnership with Deepak Chopra.

The band is up for preorder starting today and starts shipping in the spring.

5 consumer hardware VCs share their 2021 investment strategies


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UK’s Zilch raises $80M at a $500M+ valuation for its direct-to-consumer buy now, pay later service

The buy now, pay later model, popularized by companies like Klarn and Affirm has been one of the big e-commerce winners in the last year, giving consumers who might be stretched financially another option to pay for things when they buy them online. While that has prompted the UK financial authority to re-examine how it regulates the space, an enterprise taking a slightly different approach is announcing some funding as it prepares to expand to the US.

Zilch, a London startup that has built an “over the top” buy now, pay later (BNPL) business out of cutting deals directly with consumers — bypassing the need for integrating anything new into an e-commerce site’s check-out process, as many of the leading providers have done — has raised $80 million, an all-equity Series B that values the company at over $500 million.

The funding is coming from Gauss Ventures and M&F Fund, among other unnamed investors. The startup has up to now opted to raise from individuals and smaller firms, CEO and founder Philip Belamant said in an interview, although that may change in future rounds as it looks both to bring in a tier-one debt line, not just to fuel growth in its current market of the UK but to expand to more countries, including the United States.

For now, Zilch has financed usage of its service off its own balance sheet: it has more than 500,000 users, Belamant said, and is seeing sign-ups of around 4,000 a day on its app.

BNPL is a payment scheme that has been around as long as stores themselves, but its emergence online has been more a later arrival. It’s proven to be a very popular one. A recent report from Worldpay estimated that in the UK, which is the world’s third-biggest e-commerce market in its estimation (£192 billion, or $266 billion, transacted in 2020), BNPL will account for 10% of all sales by 2024, when the overall e-commerce market will be worth £264 billion ($366 billion).

Most schemes today are run by third parties — Klarna and Affirm being two of the biggest — who ink deals with e-commerce companies and integrate in the check-out alongside other options for payment. Zilch’s key differentiation has been that it’s cut a deal with only one other company — Mastercard — and created a payment card with it so that when a person wants to pay using Zilch, they use the Mastercard number in the checkout, which then triggers the option to them to either pay in installments or pay as you would with a normal credit card.

As with other BNPL schemes, Zilch doesn’t charge fees on its service, and instead makes a cut in the transaction from the retailer (part of the fee retailers pay to card companies in card transactions: the deals are all predicated on the idea that these alternatives to paying everything up front increases conversions, and that ‘convenience’ is what retailers are paying to have as an option). Its approach is pretty straightforward: it offers installments for paying back that start with 25% up front (so not exactly “zilch”) and paying for the item in full in 25% installments over 6 weeks. For those who miss a payment, they are stopped from using the service again until this gets cleared but Zilch doesn’t charge late fees.

The prospect of bypassing the retailer means that Zilch has been able to scale by making its service more applicable to more payment scenarios, a model that Belamant said was inspired by another killer disaggregator.

“If you look at when Amazon started, many commented on it being a phenomenal bookstore, but they built an infrastructure to sell everything. They could have built that covering different booksellers one by one but Amazon went direct to the consumer and said it would ship any book in a day. How profitable is not your problem,” he said. “We didn’t want to be beholden to the retailer and wanted the relationship with consumer. We go to them and say, pay over time, and use us anywhere you like. We built this technology plugging them in on one side and plugging retailers on the other. We can now build up any way to play and can use it anywhere they like without being restricted by retailers.”

Conversely, this has also helped Zilch fend off competition from bigger BNPL players, at least up to now: “Their main customers are retailers, and they have pre-existing arrangements with those retailers,” Belamant said of the Affirms and Klarnas of the world. Offering a model similar to Zilch’s, he said, “would have to circumvent those services, and that’s a massive cannibalization. Can they do that? Well, it’s naive to say they can’t. But will they? I’m not sure.”

Zilch’s approach of riding the rails of Mastercard — which may well soon to be augmented by other providers like Visa — means that it can quickly distribute a recognized payment method, but as Belamant describes it, it’s Zilch that is still building the algorithms to make the credit evaluations for individual consumers.

Using what Belamant described to me as “soft credit checks” alongside Open Banking data — a system used in the UK and Europe that taps into using APIs to share and integrate data from one financial service with another (in this case a way to easily check a person’s credit and financial history by way of their bank details as they are applying for a new financial service) — people sign up and automatically get assessed for their suitability for a BNPL scheme.

This has helped the company, as it says, become the first BNPL provider to be regulated by the Financial Conduct Authority, the financial services regulator in the UK that has run an investigation of BNPL companies and appears to be preparing tighter regulation around how they can work, to stave off people inadvertently walking into spending money that they don’t have and may never be able to repay. Zilch was officially authorized as a consumer credit provider in 2020.

This is not to say that others in the space will not be able to also get the same certification for their models, incidentally, but it might mean more regulatory hoops, possibly slower growth, and perhaps also more consumer wariness as the situation continues to get more publicity. (The UK in particular has a pretty sordid history with other schemes to provide people with financing, specifically around the murky practices associated with payday loan schemes, and that has left a bad taste in many consumers’ mouths.)

One specific advantage also of linking up with a card company is that, in this world of “everything will soon be virtual”, it gives Zilch users access to a card, which they can in turn use to also shop using BNPL in brick-and-mortar stores. Tap and Pay-over-time, as it’s called, means users can integrate the card number into a digital wallet to and use it as they would their handsets to pay with Apple or Android-based payment schemes. Zilch said it’s the first BNPL do make this leap. (To be clear, for now there is no physical ‘card’ although it seems they are considering how and if to offer it.)


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Consumer agency warns against Peloton Tread+ use, as company pushes back

Almost exactly a month ago, Peloton CEO John Foley wrote an open letter about the the company’s treadmill. “I’m reaching out to you today because I recently learned about a tragic accident involving a child and the Tread+, resulting in, unthinkably, a death,” it begins. “While we are aware of only a small handful of incidents involving the Tread+ where children have been hurt, each one is devastating to all of us at Peloton, and our hearts go out to the families involved.”

Today, the U.S. Consumer Product Safety Commission issued a warning, telling users to stop using the Tread+. Citing 39 incidents, included the aforementioned death, the CPSC writes, “The Commission has found that the public health and safety requires this notice to warn the public quickly of the hazard.”

Peloton followed up with its own strongly worded statement writing, “The company is troubled by the Consumer Product Safety Commission’s (CPSC) unilateral press release about the Peloton Tread+ because it is inaccurate and misleading. There is no reason to stop using the Tread+, as long as all warnings and safety instructions are followed.”

The commission’s warning includes multiple injuries involving small children and a pet. Specifically, the note calls for users with children at how to cease using the product, a more stern warning than the initial suggestions outlined by Foley back in in March, who at the time told users to keep children and pets away from the system and store the device out of reach after using. Peloton has since added that there have been 23 incidents involving children, 15 with objects and, as the CPSC noted, one with a pet. The company added that it had not revealed the specifics previously out of privacy concern.

“If consumers must continue to use the product, CPSC urges consumers to use the product only in a locked room, to prevent access to children and pets while the treadmill is in use,” the organization notes. “Keep all objects, including exercise balls and other equipment, away from the treadmill.”

For its part, the connected fitness maker adds,

Peloton invited CPSC to make a joint announcement about the danger of not following the warnings and safety instructions provided with the Tread+, and Foley asked to meet directly with CPSC. CPSC has unfairly characterized Peloton’s efforts to collaborate and to correct inaccuracies in CPSC’s press release as an attempt to delay. This could not be farther from the truth. The company already urged Members to follow all warnings and safety instructions. Peloton is disappointed that, despite its offers of collaboration, and despite the fact that the Tread+ complies with all applicable safety standards, CPSC was unwilling to engage in any meaningful discussions with Peloton before issuing its inaccurate and misleading press release.

Peloton launches new Bike+ and Tread smart home gym equipment, both at $2,495


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Join ECL on Wednesday to pitch your startup to Fifth Wall’s Brendan Wallace and Hippo’s Assaf Wand

Have you ever dreamed about the opportunity to find yourself in, say, an elevator with an investor who is open to hearing your pitch? Well, then the next episode of Extra Crunch Live is for you.

If you’ve hung out with us on an ECL before, you know we start with a bit of top news, chat with our speakers about how to successfully fundraise, and then finish with the Pitch Deck Teardown, where we take a look at decks submitted by you, the audience members, and give live feedback.

On Wednesday, with the help of Fifth Wall’s Brendan Wallace and Hippo’s Assaf Wand, we’re going to shake things up a bit.

Folks who attend the live event will be able to virtually ‘raise their hand’, come on screen, and give a 60-second pitch of their startup. No demoes. No videos. No visual aids of any kind. It’s the ultimate elevator pitch, and it’ll be done before a live audience.

Wallace and Wand (that’s catchy, eh?) will give their feedback and ask questions at the end of every pitch.

Fifth Wall’s Brendan Wallace and Hippo’s Assaf Wand are joining us on Extra Crunch Live

The only way you can participate in the ECL Pitch-off is to show up. Luckily, the events are free to anyone. However, accessing any of this content on demand is reserved strictly for Extra Crunch members.

We’re super excited to introduce the pitch-off as a feature of ECL and hope you are too! See you on Wednesday!

Register here.

 

 

 


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Billion-dollar B2B: cloud-first enterprise tech behemoths have massive potential

Dharmesh Thakker
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Dharmesh Thakker is a general partner at Battery Ventures and a former managing director at Intel Capital.

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Tracking the explosive growth of open-source software
How viral open-source startups can build themselves into enterprise-IT powerhouses

More than half a decade ago, my Battery Ventures partner Neeraj Agrawal penned a widely read post offering advice for enterprise-software companies hoping to reach $100 million in annual recurring revenue.

His playbook, dubbed “T2D3” — for “triple, triple, double, double, double,” referring to the stages at which a software company’s revenue should multiply — helped many high-growth startups index their growth. It also highlighted the broader explosion in industry value creation stemming from the transition of on-premise software to the cloud.

Fast forward to today, and many of T2D3’s insights are still relevant. But now it’s time to update T2D3 to account for some of the tectonic changes shaping a broader universe of B2B tech — and pushing companies to grow at rates we’ve never seen before.

One of the biggest factors driving billion-dollar B2Bs is a simple but important shift in how organizations buy enterprise technology today.

I call this new paradigm “billion-dollar B2B.” It refers to the forces shaping a new class of cloud-first, enterprise-tech behemoths with the potential to reach $1 billion in ARR — and achieve market capitalizations in excess of $50 billion or even $100 billion.

In the past several years, we’ve seen a pioneering group of B2B standouts — Twilio, Shopify, Atlassian, Okta, Coupa*, MongoDB and Zscaler, for example — approach or exceed the $1 billion revenue mark and see their market capitalizations surge 10 times or more from their IPOs to the present day (as of March 31), according to CapIQ data.

More recently, iconic companies like data giant Snowflake and video-conferencing mainstay Zoom came out of the IPO gate at even higher valuations. Zoom, with 2020 revenue of just under $883 million, is now worth close to $100 billion, per CapIQ data.

Graphic showing market cap at IPO and market cap today of various companies.

Image Credits: Battery Ventures via FactSet. Note that market data is current as of April 3, 2021.

In the wings are other B2B super-unicorns like Databricks* and UiPath, which have each raised private financing rounds at valuations of more than $20 billion, per public reports, which is unprecedented in the software industry.

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