First Round Capital portfolio company Lob coming to Philly (and several other cities)

Tom Paine

Update 2/26/2021: As anticipated, Lob has announced a Series C of $50 million.

San Francisco-based Lob, a cloud printing and mailing service, with backing from First Round Capital among others, is coming to Philly, and eight other cities as well.

As a CFO, I once oversaw a lead managemeet service provided to b2b markers. The business was a mess. It involved coordinating mail campaigns with clients, but you didn’t know when they were starting campaigns so it was hard to staff for fulfillment on the back end. Then there were accounts that needed one-off responses at any time. How to scale that business without better technology was a mystery to me. But that involved investments that we couldn’t do at the time, or technology that wasn’t yet available.

So what Lob does makes sense to me. Through a series of APIs,the fulfillment process is automated You can print different collaterals on demand. It preps your mailings, adding address verification. And it manages the data in the cloud to help ensure that you don’t lose track of customers or prospects in the process.

Prior to this year, Lob had three financing rounds: a $2.4 million seed in 2013, a $7 million Series A in 2014 (when First Round first participated), and a $20 million Series B in 2017. Co-Founder Leore Avidar told one interviewer last year that he was planning on raising a $100 million round sometime in early 2021.

I think thy’ve already raised that round, though I don’t know the amount. (I couldn’t find a Form D for its 2017 round, and probably this one hasn’t been announced yet.)

Lob has evidentially decided to go local, as indicated by its Careers page.

I see some 17 positions posted in Pennsylvania and eight other states: IL,MI,NY,TX, CO,WA, UT,OR.

I don’t know if Lob is planning to fill all of these position, but if it where it would add up to more than 150 people, as compared to 257 employees currently appearing on its LinkedIn page.

I asked Lob why it had chosen to build these local staffs. The response: “We’re hiring all across the US and have open remote locations across the US to help serve our customers in those locations and to accommodate resources in different timezones.”

The idea that print and snail mail usage is shrinking ignores the fact that its still an enormous market, and in fact a service such as Lob may increase demand since it makes those things easier to do.

Edison Partners raising 10th fund

Tom Paine

Princeton-based growth equity firm Edison Partners is aiming for $425 million for its 10th fund, the Wall Street Journal recently reported..

If Edison reaches its goal, the new fund would be around 16% larger than its predecessor, Edison Partners IX LP, which closed with $365 million in 2018.

Edison has long been active in the Philly market. Current investments include Kinetiq/IQ Media (Conshohocken) and Houwzer (Philadelphia); it recently exited from Jornaya (Conshohocken), which was acquired by Verisk. Edison favors financial services, marketing inforrnation, and healthcare-related ventures.

Super Bowl books have hiccups: Kambi responsible for several

Tom Paine

Before and during the Super Bowl, several gaming apps experienced long delays or sluggishness. The trade press identified much of the problem as coming from Kambi, a Swedish company that provides the customer-facing front end and processes the outcomes of wagers. As Kambi explains itself on its website:

“On the surface, there may be little noticeable difference between a good sportsbook and an excellent one. However, providing a first-class sports betting experience, with a uniform standard of high-quality delivery, requires a powerful core able to process high volumes of data and a supply chain capable of delivering on all levels. This begins with the integration of official data partners and proven algorithms that process the data, followed by excellence in trading and risk, which must all be supplied through a fast, stable and intuitive frontend. Only when these elements are working in harmony can an operator begin to deliver a best-in-class service.”

Kambi appears to have most of its US ops based in Philly. In fact, 36 of its 46 US employees on LinkedIn are based in the Philly area. It’s part of the gaming industry ecosystem that’s rapidly materialized around Philly.

BetMGM, FanDuel, DraftKings, BetRivers and Penn National’s Barstool Sportsbook all reported technical difficulties on Sunday, and most of these books were using Kambi, the Las Vegas Review-Journal reported. In the hour leading up to kickoff, Kambi, the backend provider for a number of sportsbook companies — including DraftKings, BetRivers and Barstool Sportsbook — experienced slowdowns or outages. A spokesperson for Kambi told the Review-Journal that the slowdown was caused by heavy betting on a single player (I wonder who). There was a wide range of options for bettors to chose from on that player, and this required more processing and led to lags in the system.

“This specific problem was quickly identified and rectified ahead of kick-off, at which point Kambi processed the highest ever bet volumes in its history,” the spokesperson said.

FanDuel and BetMGM reported separate problems.

DraftKings will drop Kambi at the end of September. It will do a SPAC merger with another computing solution provider, SBTech.

PACT Announces Finalists for 2021 Enterprise Awards

Finalists unveiled for nine competitive awards recognizing the achievements of the region’s technology and healthcare leaders and companies

Philadelphia, PA., February 5, 2021 – Philadelphia Alliance for Capital and Technologies (PACT) announced today in a special 10-minute video presentation the 27 finalists competing for one of the nine prestigious awards at the 2021 Enterprise Awards, the region’s most competitive and admired business awards.  The video announcement can be viewed on the event’s website.

After a pivot in 2020 to a virtual Enterprise Awards broadcast, this year’s celebration of the vitality of the region is tentatively scheduled as an outdoor, socially distanced event on June 29, 2021 at The Mann Center. Confirmation of the in-person format is pending information on the expected evolution of state, local, and federal guidelines for gathering safely.

“We are so proud to provide the platform that celebrates our local investors, entrepreneurs and businesses who are leading transformations worldwide in their respective fields,” said Dianne Strunk, Vice President at PACT.  “The judges selected the 27 finalists from a crowded field and it’s my honor to share the results with the region today.”

Introducing the 2021 PACT Enterprise Awards finalists:

Healthcare Startup

Avisi Technologies

Envara Health

The Discovery Labs

Sponsored by: Ben Franklin Technology Partners

Technology Startup

Crossbeam

Grovara

PatientWing

Sponsored by: Troutman Pepper

Investment Deal

Passage Bio

TrialScope

Vertex

Sponsored by: Baker Tilly and EPAM

Healthcare Emerging

Antares Pharma

Incyte

Myonex

Sponsored by: RSM and SAP

Technology Emerging

Greenphire

Infinite Blue

IntegriChain

Sponsored by: EisnerAmper and Fox Rothschild

Healthcare CEO

Annovis Bio, Maria Maccecchini, PhD

Astarte Medical, Tracy Warren

MOBILion Systems, Melissa Sherman, PhD

Sponsored by: EY and Morgan Lewis Bockius

Technology CEO

iPipeline, Larry Berran

Frontline Education, Mark Gruzin

Odessa, Madhu Natarajan

Sponsored by: Cozen O’Connor

Healthcare Innovator

AnaOno

Genomind

NeuroFlow

Sponsored by: Independence Blue Cross

Technology Company

Analytical Graphics

Relay Network

Suvoda

Sponsored by: Comcast Business

Tickets for the 2021 PACT Enterprise Awards will be available soon.  Visit the PACT website for more information.

About  Philadelphia Alliance for Capital and Technologies (PACT) 

PACT’s vision is to be the go-to resource for fast growing companies, and a driver of entrepreneurship and innovation in the Philadelphia region. PACT provides its members with valuable content and connections to capital, coaching and customers that will accelerate their growth and success, and to collaborate with other organizations to drive innovation and entrepreneurship in the region. www.philadelphiapact.com.

###

Media Contact:  

Danielle Pinto

PACT

215-510-0633

dpinto@philadelphiapact.comPACT News


HIGH FLYING NJ DATA-PROTECTION STARTUP OWNBACKUP ACHIEVES UNICORN STATUS

Sam Gutmann, CEO of OwnBackup | Courtesy OwnBackupOwnBackup | Courtesy OwnBackup

 February 1, 2021  Esther Surden

Word came last week that OwnBackup, the Englewood Cliffs-based cloud data protection company, closed a Series D investment of $167.5 million after just closing on $50 million six months ago. (See our story here).

The investment brought OwnBackup’s cumulative funding total to more than $267 million.

More importantly, with this raise, OwnBackup is valued at close to $1.4 billion. That brings OwnBackup up to unicorn status.

A unicorn is a startup that has grown to be valued at over $1 billion. Unicorns aren’t as rare as they once were. According to CB Insights, a tech-market intelligence platform, there are more than 500 of these companies in the world.

The new funding round was co-led by Insight Partners (New York), Salesforce Ventures (San Francisco), and Sapphire Ventures (Palo Alto, Calif.), with participation from existing investors Innovation Endeavors (Palo Alto), Vertex Ventures (Palo Alto) and Oryzn Capital (Tel Aviv).

We spoke to Sam Gutmann, OwnBackup’s CEO, about the recent funding round.

Of the leading investors, Sapphire Ventures was new to the deal. Gutmann stated that he was extremely excited to have Sapphire, which was known as “SAP Ventures” back in the day, because it’s “now behind some of the hottest unicorns and recent tech IPOs.”

OwnBackup’s biggest investor, Insight Partners, stepped up once again in a big way, he added, and it was really important to have Salesforce Ventures, which has been with OwnBackup since the beginning.

Salesforce Ventures has invested in a number of successful startups, such as MongoDB, Twilio, Box, DocuSign and Zoom. Observers have noted that the gains from Salesforce Ventures investments have often exceeded the gains from the company’s core software business. It is also worth mentioning that OwnBackup is on the Salesforce AppExchange, and that it’s rare to see a unicorn originating from there.

OwnBackup has experienced five years of triple-digit growth, but Gutmann was clear about the challenges ahead. NJTechWeekly.com asked him if he felt any pressure, now that the company has achieved unicorn status. He joked that the biggest pressure was that many were expecting OwnBackup to get to “decacorn” status quickly.  

Phenomenal 2020

Becoming serious, he said, “We’re really excited. We had a phenomenal 2020 from a business perspective, and we beat our pre-COVID plan by a good, good chunk. And we see that momentum continuing into this year and beyond. So, while we certainly have a ton of work to do, and growing a business from 300 employees to 600 employees is certainly a tall order, the business is there and the customer base is there. And it’s going to be a lot of hard work, but we think it’s definitely doable.”

Fueling the company’s momentum are bigger trends in the industry, he noted. “We saw in the business in a broader sense that COVID forced many companies to accelerate their digital transformation projects. And as they were forced to do that, some of the controls they had in place — whether it be that you could only access the system from the office, or the development team had all kinds of in-person meetings — went away. Our customers were forced to accelerate what they were doing, and it all became much riskier.” So, having OwnBackup in place allowed them to accelerate their projects with peace of mind at night, he said. “They said, ‘Hey, if something goes wrong, I can easily put the pieces back together.’”

When NJTechWeekly.com had spoken to Gutmann after the prior fundraising round, he noted that the company had software expansion plans that would see it going after backup businesses in other cloud environments besides Salesforce. “To date, we’ve been exclusively focused within the Salesforce ecosystem, which is huge. But as we realize the vision and look at other clouds, we really see an IPO-sized entity ahead of us,” he told us then.

In our recent talk with Gutmann, he said, “For a very short amount of time we stopped our expansion plans on the hiring front. But as we got through March and April and May, we ramped that right back up, so that plan has remained the same. We’re probably a quarter or two behind where we thought we’d be in the beginning of the year. Again, we wanted to make sure business would persist through the worst part of COVID, and it has. But stay tuned. A little later in the year,” there will be some announcements. “We are actively working on this.”

Regarding his commitment to New Jersey, Gutmann said that the company’s hiring plans include many new employees in the Garden State, though “we don’t know what the future holds with working from home versus coming back.” He added that OwnBackup was “one of the rare cases where we’ve actually expanded our office. We’re doubling the size of our physical footprint here in New Jersey. And I’m very excited about that. You know, firstly, we want to create an environment that people want to come back to, but we’re not forcing anyone to come back.”

This article originally appeared in NJTECHWEEKLY. It is republished here with the permission of Esther Surden, Editor & Publisher.

Roblox delays going public again

Tom Paine

Kiddie (or young adult) gaming platform Roblox delayed its planned IPO in December due to uncertainty over pricing after AirBNB and DoorDash rocketed beyond expectations out of the gate.

In early January, Roblox announced it had decided on a direct listing instead of an IPO. It also raised a Series H round of venture funding, for $520 million at a $29.5 billion valuation (its last prior valuation had been at $4 billion).

Now, Roblox has had to slow the process again. The SEC seeks changes its revenue recognition policy.

“Players use Robux in the game to buy a mix of durable goods which last for a period of time and consumable goods which are used immediately. Roblox had looked to treat all the revenue the same and amortize it over the duration of its paying user accounts, which is around two years. The SEC wants Roblox to be more specific and recognize revenue on consumable products as they are consumed, while the durable services will still be recognized over the life of the Roblox user.” — Joshua Franklin, Reuters

Actually the way Roblox was doing it was a bit more conservative in terms of the timing of revenue recognition, management claim. The change will actually increase stated revenue.

First Round Capital was an early investor in Roblox and owns 7%.

Philly EnterpriseTech Bits: Veeva Systems becomes Public Benefit Corp; Aria Systems, Ionos (1+1 Internet)

Tom Paine

.An article in the the Boston Globe reported that Life Sciences Cloud vendor Veeva Systems has signed a lease to opened a Boston office and expects to hire 200 staffers in Beantown within the next year.. The company already has 100 there pre-pandemic working out of a co-op space. The Boston office will be an engineering hub.

Veeva, which has more than 4000 employees overall now, plans to also be hiring in other locations, including the Philadelphia area ( which has 300+ employees), the article states. Area offices are in Radnor, Fort Washington and Center City Philadelphia. Headquarters are in Pleasonton, CA, and other North American locations include Columbus, Ohio and Toronto.

Veeva also announced that as of the beginning of its new fiscal year, which will be Monday, Veeva will convert to become a Public Benefit Corporation (PBC). It became the second publicly traded firm to do so, after the insuretech company Lemonade, which went public last year. As a PBC, Veeva is legally bound to consider employee and customer interests as well as that of shareholders. Though its a bit easier to do so when you have Veeva’s margins. But it does reflect a real commitment on Veeva’s part.

Veeva has a market value of $42 billion. Its full year FY 21 forecast is for total revenues between $1,446 and $1,448 million, or 31% growth over FY 20, and non-GAAP operating income between $566 and $568 million.

Rick Lund, who in recent years has served as Veeva’s head of investor relations and of Treasury, left Veeva to join Aria Systems. A Wharton grad and a military vet, Lund lives in California where Aria is headquartered.

Aria started in Delaware County, where it was founded by serial entreprenuer Edward Sullivan. Once mentioned in the same breath as Zuora (Zuo) in the Cloud subscription billing space, it pretty much stopped growing while Zuora went public with a current market value of $1.76 billion and over 1300 employees. Aria has nearly half its 160 employees out of its Delaware County office. Perhaps Lund’s appointment means somethings up. Several other openings appear to exist now.

Crunchbase says Aria has received $180 million in total investment, though that number seems high to me.

1+1 Internet, a subsidiary of Germany’s United Internet ($8 billion + marketcap) seems to have big expansion plans for its US Ionos web hosting service:

“Ionos is appointing (Pittsburgh and Atlanta-based) Brunner as the European website hosting company’s U.S. creative agency as the firm seeks to expand in the North American market. Brunner will help IONOS compete against GoDaddy and Domain.com, among others, with a “brand challenger” strategy that includes creative assets and media plans, as well as U.S. partnership opportunities.”

From MediaPost.

The Ionos product line came from a 2018 merger with cloud infrastructure specialists ProfitBricks.

Ionos took another step today (Feb 1) to strengthen its product offering by acquiring WE22 AG.

1+1’s US unit is based out of Chesterbrook.


Greenphire gets ready for sale

Tom Paine

Greenphire, the King of Prussia-based clinical trial payments tech company, will soon.be up for sale, PE Hub reported (signup required). Riverside Company, which acquired it in 2015, will be the seller.

Greenphire is expected to appeal to both strategic and financial buyers, as well as both tech and clinical firms. The sales process will kick off in April, PE Hub’s sources tell them.

Greenphire has north of 200 employees, per LinkedIn. In this business, there’s always a fair chance that the buyer will have connections to Philly.

One source suggested it could be worth as much as $1 billion, which seems unlikely.