Tingle Tech

A lot of people are opting to use cars instead of taking public transportation in the UK at the moment, as a way of ensuring more social distancing, and today one of the startups that’s built a more efficient way of selling and buying cars is announcing a big round of funding. Cazoo, which provides an app-based way to browse and buy used cars (it’s modeled on the likes of Vroom in the US), has picked up £240 million ($311 million).

The funding comes only six months after the company raised $116 million. A Cazoo spokesperson has confirmed that the company is now valued at over £2 billion (or over $2.5 billion), double its previous valuation. (For some context, the company confirmed a $1 billion valuation this summer and others had estimated it at a much lower amount.)

This latest funding is being led by General Catalyst, D1 Capital Partners and funds managed by Fidelity Management & Research Company and Blackrock, with other new and existing investors participating. The list includes L Catterton, Durable Capital Partners, The Spruce House Partnership, Novator, Mubadala Capital and dmg ventures. It brings the total raised by the company to date to £450 million ($582 million).

The company has come back to us to confirm that this is an all-equity round, no debt. (Debt plays a big role in funding for companies that need to take on a lot of assets, like cars, in order for the business model to function. As we’ve seen with others in the same category of disrupting car sales, like Fair, sometimes the debt far outstrips equity funding, and as we’ve seen with Fair, sometimes even a lot of money cannot help a business work.)

Founded by Alex Chesterman, who had also founded LoveFilm (acquired by Amazon and used as the first step in its move into building its Netflix competitor, Amazon Prime Video) and the property sales site Zoopla, Cazoo says that it has hit £100 million in revenues since launching less than a year ago, selling and delivering “thousands” of cars every month. It does not disclose whether it is profitable.

The company’s boost comes from a new surge of interest not just from more people having a car for getting from A to B — and I’ll say as a London resident that traffic definitely feels worse these days — but also from people looking for online, virtual ways of doing this to avoid the physical contact that typically comes with more traditional ways of buying vehicles.

“Over the past few months we have seen an acceleration in the shift from offline to online car buying as UK consumers have continued to embrace our unique and market-leading proposition,” said Chesterman in a statement. “This latest funding demonstrates the conviction of some of the world’s best investors in both our business model and team as well as the UK market and gives Cazoo the firepower to deliver on our plans to provide the best possible car buying experience for UK consumers.”

Chesterman’s pedigree as a founder helps with raising money and opening doors.

“I have known Alex for seventeen years since our days building LoveFilm,” said Adam Valkin, MD of General Catalyst, in a statement. “He has made a career out of identifying large consumer markets where technology can drive change and then leading that transformation by focusing on the customer and delivering value, convenience and a trusted service. With Cazoo, Alex is taking his proven playbook to perhaps his largest opportunity yet for the benefit of used car buyers across the UK.”

Dan Sundheim, Founder of D1 Capital added, “We’re excited to partner with Alex and the team at Cazoo. They have generated enormous value for customers and shareholders in their previous internet ventures and we are confident that Cazoo will greatly accelerate the digital transformation of the used car industry and dramatically improve the car buying experience for consumers in the UK.”

Updated with more information about the valuation and details about equity vs debt.

As more companies and brands put the internet at the core of how they run their businesses these days, it’s giving a strong push to the growth of startups that are building tools to help them. In the latest development, Sendinblue, an eight-year-old French startup that has built a platform to help small and medium organizations run all of their marketing — from email, SMS and chat marketing through to automation services, Facebook ads and retargeting — has picked up $160 million in funding.

Bridgepoint, Bpifrance, Blackrock, and previous investor Partech (which led Sendinblue’s $35 million in Series A in 2017) all invested in the round.

The money will be used to help the company build out its presence in North America — where it grew 100% last year — and to continue to add more tools to the mix, both organically and by positioning itself as a consolidator, acquiring smaller marketing tech startups. The company is also building CRM tools and other adjacent areas in the SMB back office so you can see how it might evolve. It’s profitable and is active already in some 60 countries with some 180,000 customers on its books.

The huge funding, for a startup that may not have been on many people’s radar — you could say Sendinblue has come out of the blue — is a sign of the times.

SMBs (like retailers and brands doubling down on e-commerce) have long used the internet for marketing, but the recent pandemic, with its social distancing measures, has highlighted just how many people are spending time (and spending money) online, which has led to a boost in how organizations are using the internet to communicate with customers.

“The whole covid pandemic has accelerated our business,” said Steffen Schebesta, who runs the company’s North American operations (and joined the company when his startup, Newsletter2Go, was acquired several years ago). “We’ve seen a lot of SMBs finding that they need to digitize in order to survive.”

It’s also notable that it’s a French startup raising a large growth round: it’s a signal of how companies from the country are scaling, filling out a mission that French President Emmanuel Macron set out to see the country produce (and invest in) more unicorns.

Sendinblue’s funding news comes on the heels of another French martech company, Sarbacane, also raising a lot of money in recent weeks (France has been known for adtech, but seems that it also has a strong line in marketing tech). Further afield, we’ve seen a number of other startups in the space raising significant rounds this year, including Yotpo, Movable Ink, Adverity, and more.

There seems to be room for all of these, and more. Schebesta described a typical customer for Sendinblue — whose primary goal is to “enable small and medium businesses to be on equal footing with bigger companies in terms of the tools they can use, having access to everything in one platform at an affordable price — as one that may have “outgrown” Mailchimp with a need for more tools and more sophistication. 

While the company’s bread and butter and focus will always be SMBs, in the meantime it’s also picked up a number of high-profile and high-end customers too, including Louis Vuitton, the candy giant Haribo, Fujitsu, Amnesty International and Greenpeace. 

“Sendinblue is positioned in a growing market as more and more SMBs are going digital, especially in the past few months of lockdown,” said Olivier Nemsguern, Partner at Bridgepoint, in a statement. “We seek investments that meet a critical market need. Sendinblue is the perfect example of a company that will make an impact.”

“We have invested in Sendinblue because the company offers innovative solutions for SMBs and has a strong track record of achieving high growth in the U.S. and European market,” added Louis Molis, investment director at Bpifrance. “We’ve seen that Sendinblue’s value is globally extensible and will increase in importance as integrated marketing becomes more important.”

“Sendinblue has quickly become the leading digital-marketing platform for SMBs,” said Bruno Crémel, General Partner at Partech. “As demand for all in one platforms increases, Sendinblue has a unique ability to succeed. We are thrilled to continue to support Sendinblue as the company accelerates its next phase of international growth.”

Since 2011, European startup studio eFounders has launched 27 companies with a focus on software-as-a-service companies trying to improve the way we work. Some of them have been quite successful, such as Front and Aircall.

And the company is working on its next batch of startups. “We're particularly inspired by the new wave of productivity tools, that is ever more collaborative and flexible,” eFounders co-founder Thibaud Elziere said in a statement

In exchange for financial and human resources, eFounders keeps a significant stake in its startups. Ideally, startups raise a seed round and take off on their own after a year or two.

Here’s what’s coming up from eFounders.

Canyon

Canyon is a product for legal teams that want to ditch Word, PDF documents and emails. It starts with a central hub to hold all your drafts and documents. This way, you can track progress, get the latest document version and see the context around a document. Given that it is tailored for legal teams, it should work a bit better than a shared Dropbox folder.

You can create templates to reuse them later, see related emails directly in Canyon’s interface and invite other people so that they can have a look at what you’ve been working on.

Image Credits: Canyon

Kairn

Kairn is a task manager that tries to get out of the way as much as possible. When you’re working on your computer, you can add tasks directly from the app that you’re already using.

For instance, you can imagine adding a task by starring an email conversation in Gmail, forwarding a message to a WhatsApp bot or starring a message in Slack. There’s also a quick add window that you can trigger with a keyboard shortcut.

Read my full article on Kairn:

Image Credits: Kairn

Crew

Crew is focused on new hires and job applications. Given that many companies are actively looking for interesting candidates, Crew isn’t just a way to passively collect applications.

It lets you create automated workflows and handle everything you’d expect from a recruitment platform.

Image Credits: Crew

Collective

Collective is a product for freelancers who want to work together and form groups. It should make it easier to send a contract to a client that involves multiple freelancers working on the contract. Collective will make it easier to remain legally compliant.

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As people spend less time out in the world and more time daydreaming about when a vaccine will arrive, lifestyle shoes are only gaining traction.

One obvious beneficiary is Allbirds, the San Francisco-based maker of comfortable, sustainable kicks that launched in 2016 and quickly became a favorite in Silicon Valley circles before taking off elsewhere.

Though the company saw its business slow this year because of the pandemic, its products are now available to purchase in 35 countries and its 20 brick-and-mortar stores are sprinkled throughout the U.S. and Europe, with another outpost in Tokyo and several shops in China.

Investors clearly see room for more growth. Allbirds just closed on $100 million in Series E funding at roughly the same $1.6 billion valuation it was assigned after closing on $27 million in Series D funding earlier this year, and blank-check companies have been calling, says cofounder and CEO Joey Zwillinger. He talked with us earlier this week in a chat that has been edited for length and clarity.

TC: Your shoes are sold worldwide. What are your biggest markets?

JZ: The biggest market by far is the U.S., and the same day that we started here in 2016, we also launched in New Zealand, so that’s been very good to us over the last four years, too. But we’ve seen growth in Japan and Korea and China and Canada and Australia. We have a network of warehouses globally that lets us reach 2.5 billion people [who], if they were so inclined, could get their product in three days. We’re proud of the infrastructure we’ve set up.

TC: We’ve all worn shoes a lot less than we might have expected in 2020. How has that impacted your business?

JZ: We’re growing but definitely not at the same pace we would be had the pandemic not occurred. We’re predominantly digital in terms of how we reach people, but stores are important for us. And we had to switch [those] off completely and lost a portion of our sales for a long time.

TC: Did you have to lay off your retail employees?

JZ: A large portion of our retail force was unable to work, but we were luckily able to keep them fully paid for four months, plus [some received] government benefits if they got that. And now all of our 20 stores are up and running again in a way that’s totally safe and everyone feels really comfortable.

We also donated shoes to frontline workers — 10,000 pairs or around a million dollars’ worth.

TC: What does Allbirds have up its sleeve, in terms of new offerings?

JZ: We just launched our native mobile app, and through it we’re able to give our more loyal fans exclusives. It’s a really cool experience that blends technology with fashion. You can try on shoes in a virtual mirror; you’re given information [about different looks] that you wouldn’t have otherwise.

We also launched wool-based weather-proofed running shoes in April that have blown away our expectations but [were fast discovered by] people who haven’t really been running for 10 to 15 years and are running again [because of gym closures]. It’s a super high-stakes category and one that’s hard to break into because people buy on repeat. But we spent two years making it. It’s not like we launched it because of the pandemic. It’s a shoe for 5K to 10K distances — it’s not a marathon shoe or a trail shoe — and that we’ve been able to clearly articulate that speaks to its success, I think.

TC: What about clothing?

We launched underwear and socks last year in a small launch. We developed a textile that hasn’t been used before — it’s a blend of tree fiber and merino wool because our view is that nature can unlock magic. Underwear is typically synthetic — it’s made from plastics — or cotton, which isn’t a great material for a whole bunch of reasons. [Meanwhile] ours is phenomenal for temperature control; it also feels like cashmere.

TC: Patagonia really advertises its social and environmental values. Do you see Allbirds evolving in a similar way, with a growing spate of offerings?

JZ: I’m incredibly humbled by [the comparison]. Given their environmental stewardship of the retail sector, we hope we’re compared to them. But they are much more of an outdoor brand — not a competitor so to speak. And we’d love to share more of the retail world with them so we can do our environmental thing together.

TC: You just raised funding. Are you profitable and, if not, is profitability in sight?

JZ: We’ve been profitable for most of our existence. Having some discipline as we grow is good. We’re not close to the profitability that we’ll eventually have, but we’re still a small company in investment mode. After we emerge from the pandemic, we’ll enter a ramping-up phase.

TC: Everyone and their brother is raising money for a blank-check company, or SPAC, which can make it a lot faster for a private company to go public. Have you been approached, and might this option interest you?

JZ: Yes and no. Yes we’ve been approached, and no, we’re [not interested]. We want to build a great company and being public might be something that helps enable that for a whole bunch of reasons. But we want to do it at the right time, in a way that helps the business grow in the most durable and sustainable fashion. Just jumping at the opportunity of a SPAC without doing the rigorous prep the way we want to, we’re not super focused on that

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