Our favorite startups from YC’s Winter 2022 Demo Day, Part 1

Day one of Y Combinator’s Demo Day confab for the Winter 2022 batch is over.

We shook up our coverage this year, divvying things up by sector and geography. Our goal was to avoid a huge list, the sort that we compiled in years past. TechCrunch has notes on the ever-growing contingent of companies from Africa, Indian startups, international fintech and even a discussion on intra-startup competition at the accelerator.

But one thing we’re not changing with our Y Combinator coverage is collecting favorites.

Naturally, this is just our opinion. Our staff spends lots of time diving into the technologies that startups are building, the sectors they are focused on, and the parts of the world they hope to serve. As a result, each of us has a distinct perspective. So, our favorites often stem from areas we know best and what we are currently fascinated by.

Out of the hundreds of companies we saw today, which stood out the most to TechCrunch staffers? Read on!

Our favorite startups from YC Winter 2022, day one

The following list is in no particular order. Companies’ websites and authors’ Twitter profiles are linked.

Alex Wilhelm: Discz Music

• Details: A mobile application aimed at the youth market that combines music with social features. The company reports that its application has reached the top 10 slots in the App Store’s music category. That translates to 15,000 daily active users (DAUs), a tidy figure likely large enough for the startup to really learn from its early audience.
• Why it’s a fave: If Discz can keep its DAUs growing, it’s acquisition bait. Every major social service — and the small ones, too — is in awe of TikTok’s ability to influence culture by shaping what people listen to. Social platforms need a music strategy. Why not buy what Discz is building and has found some early user traction with? In reverse, Spotify is great at providing music to folks, but rather distant in cultural terms. It could use a social strategy, yeah? Guess who I have in mind?
  
  
  

Daily Crunch: Child-friendly Amazon Glow video chat projector now available across the US

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PT, subscribe here.

Hello and welcome to Daily Crunch for Tuesday, March 29, 2022! Haje and I are now flying solo with the newsletter. It will be all hands on deck today and tomorrow as we listen to startups pitch at the YC Demo Day, so look out for a deluge of stories over the next two days. Don’t forget to join us Wednesday for the DeFi & The Future of Programmable Money online event, and then at TechCrunch Early Stage on April 14.

A very warm welcome to Jacquelyn Melinek, who is joining our crypto desk and comes careening out of the starting blocks with her coverage of the largest DeFi hack we’ve seen so far. Great story and welcome aboard! – Christine

The TechCrunch Top 3

• HackerRank will test your coding skills: The competition for talent is fierce out there, so how do you know that your potential new hire has what it takes? HackerRank raised $60 million to continue developing its recruiting tools to not only answer that question, but also enable developers to practice their coding and interview skills.
• Electric buzzing after reaching unicorn status: If you are like most of us working from home, accessing the tools and equipment that would normally be waiting for us in the office — with an IT person at your beck and call — now involves a little more logistical effort. Electric secured $20 million to put it over the $1 billion valuation mark to manage much of that work for IT.
• DAO for human behavior?: Jacquelyn was also busy writing about decentralized autonomous organizations, or DAOs, thankfully describing what they are and where enthusiasts see them being used in the future — think pooling funds or decision-making.

Startups and VC

It’s the most wonderful tiiiime of the yeaaaaaar – Y Combinator hasn’t quite gotten to 1,000 companies per batch yet, but its Demo Day comprises 424 startups from 42 countries – so as you might imagine, it’s still a pretty intense time at TechCrunch Towers. YC’s Demo Day showed off 32 startups from India (the accelerator has funded almost 200 Indian startups to date), with heavy focus on fintech. Africa was represented as well, with more than 18 Nigerian startups and an additional six from the rest of the continent.

And some great news if you’re a mere millionaire, rather than part of the exclusive Tres Comas club: Anita reports that Equi is willing to sneak you in the back door to your own personal little family office.

Other goings-on across the startup ecosystem:

• Pinecone is building a database system especially for data scientists and just raised $28 million to add some growth rings.
• Kenya-based Churpy added $1 million to the coffers in a bid to help businesses deal with accounts receivable challenges across Africa.
• In Latin America, Migrante is helping gig workers secure transportation and just closed a $30 million round of financing plus an $80 million line of credit to continue its growth in Venezuela and add Colombia and Mexico to its service area.
• Cloaked is taking “new phone, who dis?” to a whole new level, with identities (emails and phone numbers) generated on the fly to ensure privacy. It collected $25 million from investors to continue its journey through the shadows.
• If LambdaTest (and its fresh injection of $45 million) has its way, software testing is about to get a lot easier, as the BrowserStack competitor builds an “AWS for testers.”
• Urban greenhouse company Gotham Greens is preparing for some growth of its own: It announced plans to double its square footage to 1.2 million square feet. That’s a lot of leafy greens, you guys.
• Kaiyo (formerly Furnishare), gives secondhand furniture a new lease of life and raises $36 million to expand to California and the rest of the U.S.

2 reasons why demo days are dead

Image Credits: Martin Harvey (opens in a new window) / Getty Images

Demo days are a showcase for tech media, but does this performative Silicon Valley tradition still benefit founders and investors?

In a guest post for TC+, 22 Ventures co-founder and chair Michael Redd shares two factors that make demo days less relevant: Many startups sign funding deals before the big show, and founders are more interested in working with value-add investors.

“Simply getting rid of demo day won’t help founders find, or let investors offer, that value,” Redd writes. “What we need is to better understand why demo day falls short and how to source deals on a much more intimate level.”

(TechCrunch+ is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

2 reasons why demo days are dead

Big Tech Inc.

• Sony unveils revamped PlayStation Plus: To keep up with competitors, Sony combined its PlayStation Plus and PlayStation Now services into one subscription gaming product. The newest part of this is the addition of two more expensive tiers to join the lowest tier, and the three are priced in monthly, quarterly and yearly increments. Users in Asia will get first access before it is rolled out through the rest of the world.
• Amazon Glow connects family members one story at a time: After six months of invite-only, Amazon is now opening up the purchase of its Amazon Glow remote calling/projector device to anyone. The company created the device as a way for children to connect with distant family members. Want to know what it’s like to use it? Check out what Greg Kumparak had to say when he tested out the device back in December.
• TikTok, GIPHY partner on video creation tool: TikTok has a new in-app creation tool called TikTok Library that will initially be populated by GIPHY content. As TechCrunch reports, there’s a bit of irony here, with TikTok “leveraging the content from a company Facebook had once acquired for $400 million (and is now being asked to divest) to better the short-form video app that’s since become one of the social giant’s biggest threats.” In addition, we point out that TikTok not going into much detail about possible future partners for the library suggests all of this is still pretty early.

TechCrunch+ roundup: Plaid’s staffing story, RevOps for B2B sales, demo day’s demise

There’s no textbook-approved technique for building a startup engineering team: in the early days, everyone wears several hats.

But when a company enters its growth phase, the recruiting process is systematized, new hires are sorted into discrete units, and a thin layer of management is applied to keep everything on track.

When Jean-Denis Greze accepted the CTO role at Plaid in 2017, the fintech company was still financing its Series A had “about 20 engineers who were still trying to feel their way to product-market fit,” writes enterprise reporter Ron Miller.

Today, Plaid’s engineering team numbers 350 people.

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In an interview, Greze explained how Plaid moved away from an all-hands-on-deck ethos to a system where contributors had clearly defined roles they weren’t locked into.

I asked Ron what surprised him the most while reporting this story, and he said it was the fact that Visa’s failed attempt to purchase Plaid last year made it easier for them to hire new technical talent.

Suddenly, “people who didn’t want to be part of a startup and wanted to solve bigger problems around scale and security were willing to talk to them,” says Ron.

“Whereas before, they felt Plaid was a little too small for their ambitions.”

Today and tomorrow, we’ll have team coverage of Y Combinator’s Winter 2022 Demo Day, including a selection of staff favorites, so be sure to check the site each afternoon.

Thanks very much for reading TechCrunch+ this week!

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

How Plaid’s CTO grew his engineering team 17.5x in 4 years

2 reasons why demo days are dead

Image Credits: Martin Harvey (opens in a new window) / Getty Images

Demo days are a showcase for tech media, but does this performative Silicon Valley tradition still benefit founders and investors?

In a guest post for TC+, 22 Ventures co-founder and chair Michael Redd shares two factors that make demo days less relevant: many startups sign funding deals before the big show, and founders are more interested in working with value-add investors.

“Simply getting rid of demo day won’t help founders find, or let investors offer, that value,” Reed writes. “What we need is to better understand why demo day falls short and how to source deals on a much more intimate level.”

2 reasons why demo days are dead

Crypto mining is approaching a key inflection point

Image Credits: South_agency (opens in a new window) / Getty Images

The Ethereum community is bracing for a sea change.

A long-anticipated decision to move from a proof-of-work consensus protocol to one that favors proof of stake will force many to mine other cryptocurrencies, writes Warren Rogers, CFO at Blockware Solutions.

“Ethereum miners have a very high risk that their machines become obsolete overnight,” as PoS requires specialized hardware, which could leave Bitcoin as the major cryptocurrency of choice.

“While it is possible that this could be true in the short term, in the long run, this transition sets the precedent for being able to materially change the underlying protocol,” says Rogers.

Crypto mining is approaching a key inflection point

Use RevOps to develop a customer-led approach to B2B sales

Image Credits: malamus-UK (opens in a new window) / Getty Images

Employees are hired to do one specific job, which is why even early-stage startups can become siloed.

Companies that find ways to integrate their sales flow and customer success operations have an advantage, writes Erol Toker, founder and CEO of Truly.co.

“Optimizing your unique path to better connect with customers requires having a cross-discipline team that’s focused solely on that objective and sees the client as their guiding star,” Toker says.

“We call that RevOps.”

Use RevOps to develop a customer-led approach to B2B sales

Improving discovery for NFTs will amplify digital creators and marketplaces

Image Credits: Dougal Waters (opens in a new window) / Getty Images

It’s easy to build a recommendation algorithm for a business that sells jackets online, but when selling NFTs, optimizing for limitless inventory, anonymous customers, and opaque consumer behavior becomes magnitudes harder.

These may be just growing pains for NFT marketplaces, but the current state of play harms digital creators, as their art becomes another drop in the ocean, writes Alexandre Robicquet, co-founder and CEO of Crossing Minds.

The key to solving this problem, says Robicquet, is to build a system that promotes discovery of NFTs:

“If a recommendation algorithm can ensure that buyers can meaningfully discover NFTs they love, or think there’s investment potential in, or both, and if it can keep buyers coming back for more, then artists will reap the benefits for years down the line.”

Improving discovery for NFTs will amplify digital creators and marketplaces

IT can play a major role in driving sustainability

Image Credits: weerapatkiatdumrong (opens in a new window) / Getty Images

Data centers consume approximately one percent of the world’s electricity each year, but considering the fact a recent heat wave in Antarctica just cost us another ice shelf, every little bit counts.

In an in-depth post, Cloudbolt CEO Jeff Kukowski shares multiple strategies that reduce IT energy consumption by employing intelligent automation, increasing visibility, reducing shadow IT, and optimizing CI/CD pipelines.

“The sum of many small changes will lead to the transformative improvements that must be made,” he says.

IT can play a major role in driving sustainability

Starry’s SPAC part of Chet Kanojia’s mission to shake up broadband

Eight years after starting Starry to change the way the home internet is delivered, CEO Chaitanya “Chet” Kanojia announced this week that the company completed its special purpose acquisition with FirstMark Horizon Acquisition Corp. and is now trading on the New York Stock Exchange.

The Boston-based internet service provider’s approach involves beaming broadband-speed internet through the air using millimeter waves. Starry’s novel technology beams the internet to your home, but because naturally most people live near others, the company deploys “active phased arrays” that essentially group multiple antennas together so it can beam the internet to a bunch of places at the same time.

It touts its internet plan, which runs at about $50 a month, as one that doesn’t involve a long-term contract or hidden fees, a free WiFi router and unlimited data. You can read more about Starry’s origins in a 2016 interview with Kanojia.

Though there has been some speculation about the company’s technology and if it could work, given its ability to beam long distances and what might happen in inclement weather, Starry’s unique technique attracted a lot of investor attention from the likes of FirstMark, Tiger Global Management and KKR, ultimately raising $400 million before going public, Kanojia told TechCrunch.

He explained that in going public, Starry was “looking for a long-term partnership that was going to be supportive,” and it found that in FirstMark. Kanojia leads the new entity, and the transaction gives Starry a pro forma enterprise value of $1.76 billion, with gross proceeds of $176 million, according to the company.

“There are few firms you see going into a seed-stage company and nursing it to IPO,” Kanojia added. “We really wanted someone who had seen that movie because the long-term nature of partnerships is critical in public markets. This relationship already spans 20 years for a lot of us.”

If you are asking yourself why Kanojia’s name is familiar, that’s because he had previously founded the Aereo network television streaming service — which FirstMark also invested in — to pull content from free over-the-air signals, essentially with a goal of disrupting the way we watch television. When TV broadcasters didn’t like that, they took Aereo to court, where ultimately Aereo’s business was ruled illegal by the Supreme Court.

Kanojia has since shaken that off, saying that “the court’s history is littered with unfortunate decisions, and we were one of them.” Despite that, Aereo had a product that was well received by customers and a business model that grew rapidly, he says.

What he took away from the experience was that there was “pent-up demand for serving customers in the way they think is fair.” So when he started Starry, he wanted to provide a customer-focused experience that would add value for customers versus competitors that he says are company-focused and instead extract value from customers.

Meanwhile, the closing of the SPAC deals seems to be a happy ending beginning for Kanojia. Today, Starry has both a loyal customer base and one that is also rapidly growing, Kanojia said.

“Going public was a capital event for us, not a liquidity event, so we are not going to screw around with the recipe, but get on a regular capital cycle,” he added. “The company is on a great trajectory for growth and the unit economics are fantastic.”

Is YC turning into a kind of Fight Club?

Since inception, Y Combinator has invested in thousands of startups, and more recently, even hundreds within a single batch. Given the accelerator’s growth, competitive tensions feel nearly inevitable.

Still, one has to wonder if there is a fundamental shift afoot. Whereas YC always backed companies that might at some point overlap, the outfit appeared to casting its net far and wide, bringing in different startups at different stages from different geographies – companies that used each other’s products, in fact, and formed tight bonds through YC’s active alumni network.

Now, however, YC seems to be actively leaning into startups that are roughly the same age, operating in the same countries, and targeting exactly the same opportunity with nearly identical business models. Indeed, while similar types of companies within a class had grown inescapable as YC’s class sizes have ballooned, a kind of sameness is more apparent than ever with it latest batch of 400 startups. In fact, it’s beginning to look like the plan here is to back as many nascent rival teams as possible – then let them duke it out.

Perhaps unsurprisingly, Y Combinator sees things differently. At least, asked about the many startups that would seem to compete from the outset, a spokeswoman for YC writes in an email: “These companies are not in the same groups and do not interact. Also, it is common for startups to pivot during the batch.”

In the meantime, we’ve rounded up some of the startups that seem to us to overlap – a lot – within its Winter 2022 batch.

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TradeX and Better Opinions

Founded in the same year and same location, TradeX and Better Opinions have the same goal: give people a way to bet – and win – money on their predictions. The startups are building platforms where people can trade money while betting on whether or not an outcome will happen, from a movie launch to who the next president will be. There are more serious future events to bet on as well, such as climate change, inflation and whether omicron cases will rise or fall in a particular location.

The only clear difference between the two companies is that TradeX is targeting higher income Indians and Better Opinions is branding itself more around inclusivity and accessibility.

Firezone and NetMaker

As early as 2018, our own Romain Dillet was making his own VPN server using Wireguard, a faster and more secure alternative to existing VPN software. Firezone and Netmaker, both participants in this batch of Y Combinator startups, are open source VPNs built atop WireGuard. Netmaker claims it’s 15x faster than OpenVPN, a popular VPN software, while Firezone says it’s 4x faster. But speed isn’t everything – the competitor cohort-mates will have to battle it out to offer better customer service, firewall options and ease of use than the other. Both startups have a free plan and a paid plan for larger business teams, but neither company is sharing pricing for these paid plans, so we can’t compare their price points just yet.

Streak and Yodaa

Consider that Streak and Yodaa are both less than two years old, both based in Bangalore, and both trying to build banking businesses that cater to teenagers by both educating them on their spending and helping them to save. (Both also offer a gamified approach, wherein kids can earn coins for certain spending behaviors.) It’s fairly plain these two will be vying for the same customers, who probably won’t be using two different banking apps. (More here.)

India dominates Y Combinator’s latest startup batch (again)

Finku and Pina and Sribuu

All three of these companies are personal financial advisor startups that are based in Jakarta and have been founded in the last year or two. Yes, Indonesia is a big market, but also, come on.

Tradezi and Anfin

Tradezi is a months-old, Ho Chi Minh City, Vietnam-based startup that calls itself the “Robinhood for Southeast Asia.” What it does (or will do): offers free online trading accounts that allows users to invest in stocks, crypto, and other alternative assets in one place. It sounds a lot like Anfin, which is a year-old, Ho Chi Minh City-based startup that’s building a digital brokerage in Vietnam connecting users to the stock market in “a simple and intuitive way.” Investors could sign up for both companies’ brokerage accounts, but would they?

Clupp and Momento

The insurance market, particularly for vehicles, is far from saturated in Latin America, with just 30% of cars and 10% of motorcycles covered, according to Clupp, an online insurance startup that was founded in 2021 and is based in Mexico City. Indeed, Clupp sees a big opportunity in providing more affordable insurance for low-risk drivers in Latin America. And so does Momento, which was also founded in 2021 and based in Mexico City and is also looking to insure the region’s drivers and motorcycle riders. The big difference (for now): Momento says it is working through the regulatory process to be a fully licensed insurance carrier; Clupp appears to be working with a fully licensed insurance carrier to offer its products (Mapfre for cars and HDI for motorcycles).

beU delivery and Heyfood

Before this year, YC hadn’t backed a food delivery startup in Africa. So it was a bit surprising to see two of this type of company — beU delivery and Heyfood — in a single batch.

We understand that YC is excited to back food delivery businesses after seeing DoorDash go public. These startups operate in far apart African markets — beU delivery in Ethiopia, and Heyfood in Nigeria– but over time, they’ll expand into similar markets and compete for the same customers in their bids to become the region’s top delivery platform.

Dojah and Identity Pass

Both platforms, founded in 2021 and based in Lagos, play in the identity verification space. Dojah claims to be an “all-in-one know-your-customer (KYC) and identity verification platform for Africa,” while Identity Pass says its infrastructure makes it possible for digital businesses in Africa to “easily verify their customers within seconds.”

It’s easy to assume that the market is enormous for both players — and others, however, customers will have to choose one of two services or switch periodically depending on speed, level of insights they offer, who fights fraud better and price points.

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Naturally, even startups with a different take may be jockeying for the space soon enough. As we have seen with fintech especially, all financial technology products go horizontal until they blur. This is why SoFi now features stock investing, Robinhood offers a debit card, and so forth. Once you go through the work of bringing in a consumer into the fold, you want them to sell them as many products as possible — so you keep adding.

That means that regardless of where this cohort is starting (some are robo advisors, some Robinhood-clones, some neobanks, some insuretech, many are tackling carbon emissions) , Y Combinator has invested money and energy into numerous companies that could find themselves competing with one another sooner rather than later. While they may form friendships and become one another’s customers, you can also easily foresee, in some markets, more battle royale than mere dustup.

How to make a teaser trailer for your startup pitch

Andrew Gershfeld Contributor

Andrew Gershfeld is a partner at Boston-based Flint Capital, an investment company supporting entrepreneurs from Israel, Europe and the U.S. at an early stage of their business.

Around May 2020, nearly everything moved online, and investment pitches were among the first to do so.

The entire milieu around startup funding shifted overnight. For many companies doing their business online, the move to online wasn’t a shock. However, a majority of VC firms only used an offline approach.

It’s impossible for founders to “read the room” when pitching online, which puts them at a severe disadvantage. Research by UCL School of Management professor Chia-Jung Tsay found that people could reliably predict which entrepreneurs would get funded based solely on founders’ physical cues like body language, facial expressions and stage presence.

In essence, this new pitching model presents a new problem for founders: It’s critical to keep investors’ attention, but it’s also more challenging than ever before. This is where the “teaser trailer” can work in a startup’s favor.

If investors can’t understand the teaser without commentary, it needs more work.

At Flint Capital, we listen to around 1,500 online pitches per year. After hearing 15,000 pitches in 10 years, I have some perspective on how to effectively create and leverage teasers that founders may find valuable when they are pitching online.

Why is a teaser so important?

It primes your contact for the big presentation.

Every good pitch starts before the pitch. It’s always preferable to have a trusted contact, such as another investor or portfolio company founder, who can recommend you to the investors before you meet them.

In my experience, about 85% of closed deals result from a pitch from a recommended founder. This means that a first introduction should involve the founder giving their contact this teaser to whet the investors’ appetites.

You can think of this as an extension of your “elevator pitch.” Since we’re not getting the same in-person meeting opportunities, this is how founders can hook investors’ attention.

It gives you a proactive part in the pitching process

In most cases, investors will ask you for an overview of your idea before the first online pitch call happens. Putting together a teaser trailer ahead of time gives you the chance to shine in your first impression to VCs.

Add things that pique investors’ interest and make them wonder how you can make this idea work. Leave them thinking things like, “This is an unusual number. I wonder how they came to this conclusion?” Be careful not to over-dramatize, though, because this can be off-putting.

It gives you the sales advantage of steadily building interest

Remember the adage of sales: “You have 30 seconds to buy three minutes.”

Unicorn founder Julia Collins shows how to tell your story to attract investors at TC Early Stage

What determines the trajectory of your company? Is it the quality of your idea, perfect product market fit, your bold plan to TAM? One thing trumps these other important factors.

The pitch — it’s the single most important step you’ll take to get your startup where you want it to go. The challenge is saying enough to grab investor attention, yet being concise enough to turn the pitch into a conversation. That’s as true for a pitch deck as it is for a verbal pitch.

Venture capital broke records in Q4 2021. It saw a 33% YOY increase in the number of startups looking for capital and an all-time low in the amount of time investors spent looking at a pitch deck — a mere 2 minutes and 28 seconds, down 12% from 2020.

Competition for investors’ time and attention is fierce, and it’s more urgent than ever to create a pitch that tells your story, presents your product and demonstrates why you’re the person who can make it happen.

That’s why we’re thrilled to announce that Julia Collins — a serial entrepreneur and the first Black woman to co-found a unicorn (Zume) — will share her extensive knowledge of crafting the perfect pitch in How to tell your story at TechCrunch Early Stage on April 14.

As Zume’s co-founder, Collins raised more than $400 million. Today, she leads Planet FWD, a company of experienced brand builders dedicated to fighting climate change by making it easier to bring climate-friendly products to market. 

Collins knows how to turn a startup’s story into a pitch that secures actual capital, and she’ll provide solid advice on how to navigate the pitch process. Learn where to start, the essential dos and absolute don’ts and why Sarah Kunst — Cleo Capital VC and Planet FWD investor — advised Collins to focus on content and hire a designer. Spoiler alert: She called her deck ugly.

Honing your pitch to perfection takes time, research, creativity and countless revisions. It’s the most important tool you have to determine your startup’s trajectory. Join Julia Collins as she talks about creating a fundraising process, making your pitch stand out and capturing investor interest — and money — with a compelling story.

TC Early Stage sessions provide plenty of time to engage, ask questions and walk away with a deeper, working understanding of topics and skills that are essential to startup success. Register now before $249 founder tickets sell out!

Max Q: A landing system for the moon and beyond

Hello and welcome back to Max Q. Before we dive into this week’s news, a brief note: I’ll be experimenting with the newsletter over the coming weeks, trying out new segments and features, and I want to hear from you: What do you enjoy reading? What do you want more of? What bores you to tears? Shoot me an email with your feedback at aria.techcrunch@gmail.com. You also can catch me on Twitter at @breadfrom.

In this issue:

• Elon Musk provides an update on Starship
• OneWeb says goodbye to Soyuz
• Another landing system for the moon
• …plus a new segment — read on.

Don’t forget to sign up to get the free newsletter version of Max Q delivered to your inbox.

Companies will have another chance to compete to build a lunar lander for NASA

NASA will be giving another company a chance to send a lander to the moon. Nearly a year after the agency announced that SpaceX beat out competitors (including Blue Origin and Boeing) for the opportunity, the agency said it would be opening competition for a second lunar lander under a new contract called Sustaining Lunar Development.

NASA came under fire from both private industry and Congress when it selected SpaceX as its sole awardee for the Human Landing System (HLS) contract, the first contract for a lunar lander. Blue Origin went so far as to sue NASA in federal court. But this time around, NASA Administrator Bill Nelson said the agency was all about fostering competition.

“We think, and so does the Congress, that competition leads to better, more reliable outcomes and benefits everybody,” he said. “It benefits NASA, [it] benefits the American people. It is obvious, the benefits of competition.”

The agency will release a draft request for proposals at the end of the month, HLS program manager Lisa Watson-Morgan told reporters. That will be followed by a final request for proposals later in the spring, which will be open to all American companies besides SpaceX.

Artist’s rendering of SpaceX’s Starship and lunar lander. Image Credits: SpaceX

Will Firefly be the space sector’s latest company to go public via SPAC?

Firefly Aerospace may be heading to the public markets via a merger with a blank-check firm, a recent filing with the FCC suggests.

The small-launch startup just closed a $75 million funding round led by AE Industrial Partners. The firm acquired interest in the launch company from Noosphere Ventures, a fund run by Ukrainian entrepreneur Max Polyakov. Noosphere sold its interest in Firefly after it came under scrutiny from the Committee on Foreign Investment in the U.S.

The new FCC filing, which relates to a proposed launch of Firefly’s second Alpha rocket from Vandenberg Air Force Base in California this spring, adds that the acquisition involved “the majority of Firefly Aerospace’s equity” and was by “special purpose acquisition vehicles controlled by AE Industrial Partners.”

Image Credits: Firefly

SpaceX is raising prices across the board

Inflation isn’t just showing up at the gas pump. SpaceX is also raising prices for everything, from its Starlink satellite broadband service to launch.

Regarding the Starlink price jump, SpaceX cites inflation as the only reason behind the new pricing structure: “The sole purpose of these adjustments is to keep pace with rising inflation,” it wrote in an email to existing customers. The company also offered a partial refund of $200 on cancellations with hardware returns if a customer has been on the service for less than a year, or a full refund if it’s been less than 30 days.

Dedicated launches on both Falcon 9 and Falcon Heavy rockets are also increasing in price, jumping to $67 million and $97 million from $62 million and $90 million, respectively. Rideshare launches on a Falcon 9 have seen a price jump, too — from a base rate of $1 million for payloads up to 200 kilograms to $1.1 million.

Image Credits: Starlink

This week with…Casey Handmer

Image Credits: Casey Handmer

Casey Handmer was born and raised in Australia, where he completed undergraduate studies in mathematics and physics. Emigrating to the U.S. in 2010, he earned a PhD in theoretical physics, followed by stints at Hyperloop One and NASA Jet Propulsion Laboratory. In 2021 he founded Terraform Industries to capture atmospheric carbon and convert it into cheaper natural gas at gigaton scale.

TechCrunch: What are you working on? 

Casey Handmer: Professionally, the life of a founder is never dull. A lot of work on hiring and facilities, with breaks for chemistry and calculations. When I’m not working I’m raising my two awesome children and training to join the local Search and Rescue team.

What’s something that happened in the news in the last week that you can’t stop thinking about?

NASA announced the 5,000th confirmed exoplanet. Incidentally, my wife Dr Christine Moran is the deputy manager of the NASA exoplanet program! James Webb Space Telescope will probably be able to get atmospheric spectral data from some of them. Some of these planets could be very similar to Earth! Just how clever will we be prepared to get in order to study them better in the future?

What are you looking forward to next week? 

So many things! An old friend is coming to town, I’m giving a talk to some folks at ARPA-E and I think I might even get to tour a nearby power plant!

What song has been on repeat? 

I alternate between the Dune film soundtrack and exceptionally late romantic French pipe organ improvisations. 

More news from TC and beyond

• Blue Origin announced that it had selected a replacement passenger to take Pete Davidson’s seat on the next New Shepard mission to suborbital space: Gary Lai, chief architect of the rocket system and one of the company’s first 20 employees.
• Elon Musk said the first orbital flight test of the super-heavy reusable rocket Starship may take place from SpaceX’s sprawling launch site in Texas as soon as May. The company is still awaiting the final environmental assessment from the Federal Aviation Administration, a regulatory prerequisite before any launches take place.
• NASA has ordered 12 more missions under its Commercial Resupply Services-2 contract — six to SpaceX and six to Northrop Grumman. The two companies will provide resupply services to the ISS through 2026.
• OneWeb has signed a launch services agreement with SpaceX after announcing earlier this month that it would no longer use Russia’s legacy rocket system Soyuz. OneWeb had been using Soyuz without issue to launch all of its 428 broadband satellites currently in orbit, but the company decided to look for another launch provider after refusing to capitulate to a list of Russian demands — including that it guarantee its satellites would not be used for military purposes.
• SpaceX terminated its long-time business partnership with launch services provider Spaceflight Inc. SpaceX reportedly informed Spaceflight of the decision via text, just minutes before emailing rideshare customers. Yikes.
• United Launch Alliance aims to conduct the first flight of the Vulcan Centaur rocket sometime late this year, CEO Tory Bruno said during a panel at the SATELLITE 2022 conference. The heavy-lift rocket has been under development since 2014. (H/T to the numerous space reporters who reported from the conference live.)
• Ursa Major has completed qualification of its 5,000-pound thrust Hadley rocket engine and has started delivering engines to two customers, ArsTechnica reports. Back in December I covered the company’s Series C and spoke with founder Joe Laurienti about the company’s ambitions.

An artist’s rendering of the Vulcan. Image Credits: United Launch Alliance (opens in a new window)

Weekly listening

Found is a show about founders and company-building, featuring people actually doing the work. Each week, News Editor Darrell Etherington and Managing Editor Jordan Crook interview one early-stage startup founder about how they took the plunge to begin with, how they navigate everything from building product roadmaps to raising funding from some of the world’s top investors, and how they manage failure. This week, they chatted with Laura Crabtree, co-founder and CEO of Epsilon3. Check it out below.

Max Q is brought to you by me, Aria Alamalhodaei. If you enjoy reading Max Q, consider forwarding it to a friend. 

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Papaya Global to buy Azimo for $150M-$200M to expand its payroll payments to more markets

Six months after raising $250 million, Papaya Global is making a key acquisition to expand its cloud-based HR and payroll platform globally on the heels of major surge in remote working. The Israeli startup is acquiring Azimo — the London-based money transfer business that Facebook once tried to buy to spearhead its own remittance efforts — a deal that will see Papaya Global moving into more markets, and launching more services such as instant payroll payments.

Terms of the acquisition are not officially being disclosed, but a source close to companies tells me that the deal was between $150 million and $200 million, a figure others appear to have also reported. Papaya is acquiring the full business upon the deal closing, including all of Azimo’s employees, the company said.

For some context, Papaya Global — backed by companies like Insight Partners and Tiger Global — was valued at $3.7 billion in its last funding round in September 2021, after growing revenues 300% each year for the last three years.

Azimo, meanwhile, was backed by investors including Rakuten and Greycroft and competes with the likes of Wise (FKA TransferWise). Both companies were among a shortlist that Facebook tapped several years ago when it first started to weigh up a move into money transfer services (a service it now provides).

The deal will help Papaya Global on two levels.

First, it will help it expand the company expand its geographic footprint: Azimo currently has payment licenses in the U.K., the Netherlands, Canada, Australia and Hong Kong, and it operates a payment network in more than 160 countries, while Papaya Global (not to be confused with the other fintech called Papaya) operated services in 140 countries prior to this deal.

Second, it will help Papaya Global expand the services it provides. These include not just faster (instant) payment of payroll, but potentially a much wider selection of remittance services for people who are working in one country but have family or others they want to pay in another. In the past those individuals might have used other services like Wise (or indeed Azimo) to handle those payments; now Papaya Global can keep them on their own network (and thus capture the commissions and foreign exchange fees) around those transactions.

“Papaya’s customers will benefit hugely from our long experience in building payment technology and operating as a regulated payments business,” Azimo CEO Richard Ambrose said in a statement.

It also plays into a strategy Papaya Global has been pursuing for some time now to provide an all-in-one, end-to-end service for its customers — which include not just employers sourcing and eventually hiring people in other markets (be they freelancers or full-time or something in between), but increasingly services for those employees themselves.

“Payroll payments made easy regardless of geography are what set us apart from other technology vendors, and this acquisition will make it possible for companies to make instant payments to their global teams,” said Eynat Guez, Papaya Global CEO and co-founder, in a statement. “Azimo’s global digital payment network, multiple payment licences, and deep fintech expertise will also enable us to build new payroll-related services for our business customers and their employees.”

For Azimo, the company told us in 2019 that it was profitable, and that was the last year that it raised equity funding, too. (A 2020 injection of €20 million/$22 million from the European Investment Bank came in the form of debt.) But that also meant that the company, competing against the likes of Wise, was also potentially not scaling as much as it could have been had it followed a different funding trajectory, in particular in these recent pandemic years, which saw strong demand in the remittance market. PitchBook estimates that its valuation was a modest $136 million back in 2019.

Further to that, there’s been a long-term trend of consolidation in the market — one that will continue for years to come, given how fragmented the remittance market is today and how thin the margins are for those players who are not scaling. Tying its star to Papaya Global and a wider service offering spanning HR and payroll is one way of supercharging the business in a way that might have been more challenging on its own for Azimo.

“Combining Azimo’s assets and expertise with an emerging global leader in remote working enablement like Papaya will allow them to deliver even more value for their business customers, especially those increasingly paying and managing remote employees,” said Azimo chairman and founder Michael Kent in a statement.

One of the reasons the companies are not talking publicly about the sale price is that the deal has not completely closed yet: It will require regulatory approvals in their respective markets, and so they will continue to operate independently until those are reached.

Smart electric panel company Span gets a $90M jolt of cash

The lowly breaker panel has been around for a century without getting much love, and along comes Span. The company is making a compelling bid for better, smarter electrical panels, and just got a $90 million top-up to continue its evolution. The company is solving the challenges of electrification and micro-grid balancing, ensuring that the smart homes of the future have better visibility in the how, what and why of power consumption.

Span raised $10 million a couple of years ago, integrated with Alexa and launched a smarter EV charger earlier this year to go with the smart panels.

“I was very fortunate to join Tesla in the very early days of defining what Tesla Energy subsequently became. So I was one of the early leaders in the Energy Group. People are probably most familiar with the Powerwall battery, but I was the leader of the product team there that designed, developed and deployed residential products, commercial industry products, as well as utility-scale products both on the hardware and software side. During my time, they were also responsible for products like the solar roof and deployment of solar, the glass roof part, if you will,” Arch Rao, CEO and founder of SPAN told me in an interview earlier this year. “One of the things that I got to see firsthand while deploying home batteries and solar systems and electric vehicle charging systems around the world, is that there is a fundamental problem tied to infrastructure. It is going to be a deterrent to the adoption of distributed clean energy, especially if you believe that electrification is a meaningful part of the Fossil Free journey that we want to be on. If we want to supplant [fossil-fuel focused appliances] with superior electric appliances, it’s going to require a massive upgrade to the infrastructure starting with the home electrical panel.”

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“We started with reinventing the electrical panel, as it is the core component to any scalable path to electrification of homes, but the consumer experience demands more,” says Rao. “We’re excited to deploy this new capital to expand our product offerings that simplify the decarbonization of homes, and to continue developing the unparalleled approach to home energy management that Span is uniquely positioned to deliver.”

Span’s Series B funding round was led by Fifth Wall Climate Tech and Wellington Management. Other investors include Angeleno Group, FootPrint Coalition, Obsidian Investment Partners and A/O PropTech. The company explains it will use the new funding to continue developing the Span Home suite of energy products and solutions to drive commercial growth and accelerate the electrification of homes.

How Plaid’s CTO grew his engineering team 17.5x in 4 years

When you first launch a startup, you’re just trying to build a product and get it to market. The first group of engineers has an “all hands on deck” mentality, and they’ll do whatever needs to be done to make the product happen. But as your business grows and its needs change, that mentality is no longer as viable, particularly as you bring more people on board.

As you add more talent, you’ll have to organize your engineering team into more logical groups. That means more defined roles, with individuals and teams made responsible for specific parts of the product while continuing to expand its capabilities. How well you manage the transition from an organically grown team to a more purposefully organized, efficient machine can be key to how successful your company will be as it scales.

Plaid CTO Jean-Denis Greze, whose company creates APIs for banks, had to deal with that kind of transition when he arrived in 2017. The company was in the midst of Series A financing with about 20 engineers who were still trying to feel their way to product-market fit.

Since his arrival, the engineering team has expanded to 350 people, and the company’s valuation has blown up to $13.4 billion. Carefully growing and organizing the engineering team has been been a big part of that success, especially for company building tools designed for developers.

How did a growing company like Plaid scale the engineering team 17.5x, in four years and keep everything in working order? We talked to Greze to get some answers.

It’s all about planning

When Greze joined the company just as it was reaching the tail end of its Series A maturation, engineering was organized in a more generalized fashion, reacting to customer requirements as needed with little specialization. And he felt that while this was working for the short term, it wasn’t really sustainable.

“If we had an important product requirement for a set of customers, we would just take some engineers — not randomly, but with the right skills — and we would have them work on that project until it was done. And then they would go back to the general pool,” he explained.

After six to twelve months at the company, the team had already grown to over 30 engineers, and Greze recognized that the company would soon need to take a different approach.

The solution was to divide the engineers into more dedicated teams, but he is careful to point out that he wasn’t simply dictating these changes. Before he did anything, Greze met with the founders as well as the engineers doing the work to discuss the new way of working, and he found most people were coming to the same conclusion that he had.

Contingent targets broken procurement processes

Evaluating and keeping an eye on the suppliers to your business is crucial, and fantastically complicated. Contingent leaps to the rescue, armed with a freshly printed $8.2 million check from investors. The SaaS platform helps companies procure more strategically and better manage supply chain risk and compliance.

“The typical questionnaire process to onboard suppliers is widely accepted to be fundamentally broken. A huge amount of buyer and seller time and resources are wasted in collecting information from suppliers, most of which is rarely read,” Tai Alegbe, co-founder and CEO of Contingent, says. “It’s hard to spot risks, with companies reliant on supplier self-certification, and with no time or information to verify claims.”

The company is wrapping up a lot of compliance, supply-chain and supplier challenges and surfaces potential risks.

“The company was conceived quite some time ago. It built on insights I had gathered from previous experience, in and around third-party risks, supply chain and procurement. It became really clear at previous companies that there were common themes and challenges that corporations were facing,” explains Alegbe. “Supply chain is a particularly acute challenge for the world globally today. That is true for almost all companies and for governments as well.”

The company aims to address a lot of different categories of business risk, with the ultimate goal of increasing resilience for the companies it works with. The company looks at risks from a supply perspective, resilience from a financial perspective and Corporate Social Responsibility (CSR) and the Environmental, Social, and Governance (ESG) perspective. It also aims to give sustainability center stage as part of the process. On the whole, the company looks at the actual risks that its customers might have in terms of being able to deliver their product or service.

“At the heart of it, we are building a new category. We believe that supply chain and procurement as a function is going to radically evolve over the next 5-10 years, where companies will pick suppliers based on their values… that companies will choose to do business with other companies aligned with their values, versus simply just their capabilities and costs,” Alegbe predicts. “And as a result, we see that as an emerging new compliant-by-design category. We see ourselves as being at the heart of that shift, and we can really help companies embrace that change.”

The round was led by Octopus Ventures, with participation from Connect Ventures, Concentric, Seedcamp, Ascension and Working Capital Innovation Fund. This takes the company’s total funding to date to $11 million, with previous investment led by Connect Ventures. Contingent claims its global customer base has been growing at over 10x, and that its platform is in use by procurement and supply chain teams at a star-studded list of companies, including Monzo, Seagate, Huel, Barratt Developments plc and the U.K. government.

Shoreline scores $35M Series B to build automated incident response platform

Shoreline founder and CEO Anurag Gupta was in charge of infrastructure at AWS for eight years prior to launching his company. He was responsible for making sure there were systems in place to respond to incidents that slowed down or brought AWS systems to a halt.

It was a big job, and while he helped build internal systems to automate incident response, he saw a dearth of tools in the marketplace to help other companies achieve this. While there were tools for testing and deploying software, monitoring it in production and managing incidents when they happened, there was a missing piece in his view.

He pointed out that once the incident ticket gets generated and the necessary people are at the table, figuring out what’s wrong and fixing it typically becomes a very manual process. And every minute the system down is costly. As software and systems become increasingly complex, it becomes ever more difficult for site reliability engineers (SREs), who are responsible for dealing with these issues, to figure out the root cause and fix it.

“In almost all cases, it becomes a manual process, and that’s where people burn out. That’s where they make mistakes. That’s where there’s a big labor-intensive effort. And that’s also where you have downtime because people take a long time to fix something versus a machine,” Gupta explained.

The company has created Jupyter-style notebooks to document and automate the response to common problems for a given system, providing step-by-step instructions for solving an issue, while automating the response whenever possible. The goal is to help ease the stress of reacting in the moment.

Gupta said the SRE function is growing exponentially to keep up with the increasing need to solve system problems as they happen, but he said that simply throwing bodies at the problem is not a sustainable approach.

George Mathew, managing partner at Insight Partners, whose firm is investing in Shoreline, said it’s about having machines and humans working together to solve problems faster.

“But then the enablement of higher level functions to be done by humans and lower level functions to be automated by machine learning algorithms is a compelling opportunity that we saw in this space,” Mathew said about why he invested in the company.

The company launched in 2019, but it took two and a half years to build an automation solution like this, financed by a $22 million Series A. The product has been in the market for about six months, and Shoreline already has almost 50 employees.

As Gupta builds the company, he said having a workforce that reflects the world in which it operates is a key goal for him.

“I’m a strong believer that the people in the company should look like society at large, not the tech society, because that already has systemic bias in it,” he said. That means trying to achieve percentages of employees that match actual population percentages.

“I believe as a sort of a constant is that if you bring in a diversity into your hiring process, you’ll end up with diversity in your company,” he said.

Today Shoreline announced a $35 million Series B led by Insight Partners with participation from Dawn Capital. This investment brings the total raised to $57 million, according to the company.

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EnquireLabs aims to pull back the curtain on consumer behavior

Move over basic customer surveys, EnquireLabs wants to bring speed and scale to zero-party data, which is just a fancy way of saying data that customers give directly to brands.

CEO Matt Bahr and Curt Hasselschwert got the idea for the company in 2018 while helping e-commerce brands solve marketing attrition through “how did you hear about us?” questions after the customer made a purchase.

They spent the next two years with EnquireLabs as a side project, but when they started seeing e-commerce brands take a look at their reliance on third-party data, particularly with internet cookies, they started to see some traction.

“I think people were just getting super hungry for data,” Bahr told TechCrunch. “Historically, brands that we work with were so reliant on Facebook that they didn’t necessarily need to know their customer too well because Facebook would just go find them that ideal customer profile. In getting rid of third-party cookies, Apple essentially made it much more difficult for brands to attract conversions and make this kind of post-flywheel work.”

That’s when Bahr and Hasselschwert started focusing on customer attrition. In 2021, the New York-based company raised a little less than half a million dollars to scale its technology around allowing customers to ask multiple questions.

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What they began building turned into the Question Stream product, which includes a chronological campaign of questions, each served through programmable rules and context along the customer journey.

EnquireLabs’ question engine decides when questions get asked based on variables. The technology knows who to query from unique identifier data based on information like email or phone number. This is a big focus of R&D for the company and one of the drivers for it to eventually go beyond commerce into different verticals.

As Bahr described it, EnquireLabs is uncoupling questions from each other so they can be asked over time, post-purchase. This is where he says the differentiator is between his company and the incumbents, like Momentive/SurveyMonkey or Typeform, which focus more on the research space, while EnquireLabs is focused on how to put the data to use in real time. Typeform recently took in $135 million in new funding for its “conversational data collection” approach.

The company is working with about 2,000 brands, including Allbirds, Figs and Skims, and captured just over 30 million responses last year, and survey completion rates are over 50%, which Bahr said was another differentiator from EnquireLabs’ peers, where the average response is 10%.

When asked how the company was able to get that kind of response, Bahr explained that the main reason is EnquireLabs is providing context with the questions being asked, which leads to a level of personalization.

“Based on our data, we know who hates answering certain types of questions, so we’re not going to ask those types of questions because we know they are not going to ever reply,” he added. “The idea is to build from the ground up who the customer is first and what we want to learn from them. This is different from the research side where they are looking at what the problems are and then who is the customer.”

Those responses are funneled into insights that customers can access from their dashboard and can use those insights in their existing marketing stack to send out unique emails that better highlight the brand.

Previously available exclusively to Shopify brands, EnquireLabs began receiving inbound requests from new verticals, like mobile apps, insurance and fintech, so it has now launched its software development kit beta program to expand into new verticals, buoyed by $4.5 million in seed funding.

The round was led by True Ventures, with participation from V1.VC, FiDi Ventures, Hawke Ventures, Silicon Ventures and a group of angel investors that includes the founders of Chubbies, Ted Wang, Harris Barton, Daphne Carmeli and Casey Armstrong.

Bahr expects to deploy the majority of funds into hiring, mainly to expand the engineering and product sides of the organization. EnquireLabs had been a lean team of two before last July, and having doubled its revenue over the last 12 months, Bahr said he is ready to “put some gas on the fire.”

“Given the volume we’re doing, we’re very excited to expand the engineering side of the business and to continue to innovate in that area,” he added. “Our roadmap extends way beyond a year as far as what we want to do with Question Stream. In addition, the more powerful our internal question engine gets, the better. That’s definitely our focus over the next year.”

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