NEWS

Clutter acquires The Storage Fox for $152M to add self-storage to its on-demand platform

The world of on-demand storage has seen some ups and downs, with some of the biggest hopefuls pivoting into new areas, some as unrelated as cryptocurrency, in the search for better product-market fit. One that found its groove early on, however, is today announcing an acquisition to expand its existing business into a new market category. Clutter, the on-demand removals and storage company backed by SoftBank, is today announcing that it has acquired The Storage Fox, a startup that will spearhead Clutter’s expansion in to self-storage services in urban locations, starting first in the New York metro area where The Storage Fox is currently active.

The deal is valued at $152 million, Clutter said. Ari Mir, Clutter’s co-founder and CEO, added in an interview that  Clutter did not need to raise any extra funding to finance this acquisition, but said his company is likely to be taking on more financing in the future for growth.

To date, Clutter has raised $310 million, according to PitchBook, including a $200 million round earlier this year led by SoftBank that valued the company at $600 million post-money. Future financing is likely to come in the form of debt to acquire property, as well as equity to expand the business’s platform, hiring and more. It’s currently active in 1,000 cities and towns across the US and the plan will be to stay domestic until it has wider penetration, before exploring how to grow internationally. The deal will bring the total amount of space that Clutter leases and owns up to two million square feet.

“Expanding into self-storage is something we have been discussing since Clutter’s Series A pitch to Sequoia and we are excited to see it come to fruition,” said Omar Hamoui, partner at Sequoia Capital, in a statement. “The acquisition reinforces Clutter’s market leadership and expands Clutter services by offering a better experience for customers who need self-storage or on-demand storage.”

(Notably, too, is that Clutter had to actively bid for this business: “Portfolios like that of The Storage Fox are extremely rare, and this acquisition signals that Clutter is uniquely positioned to take on and succeed in the self-storage industry,” said Eliav Dan, Head of West Coast Real Estate Finance at Barclays, which acted as Clutter’s exclusive financial advisor, in a statement. “Clutter competed with multiple self-storage REITs throughout the bidding process to win the deal — a testament to the strength of the company’s management team and its ability to execute on an innovative business model.”)

Up to now, Clutter’s business has focused on extending the on-demand model — which has become a cornerstone for a huge wave of e-commerce startups that are tapping into new innovations for managing logistics, the rise of the gig-economy, the proliferation of smartphones, and consumer tastes for instant gratification — to the messy business of helping people move and store their worldly possessions, from which Clutter makes revenues by charging service fees.

Customers might typically be urban dwellers — for example moving to smaller digs or simply looking for a way to, yes, de-Clutter — but the storage centers themselves tend to be far outside city centers. On top of this, Clutter has largely operated on a long-term lease model with the facilities that it uses.

In that regard, this acquisition will be giving the company a couple of interesting new possessions of its own, to tap the self-storage market, estimated to be worth $40 billion annually.

The Storage Fox’s facilities, like other self-storage businesses, are located in areas that are much closer to urban centers, since the model is predicated more on people being able to dip in and out of their storage units quickly and potentially very regularly. In its case, its facilities today are in Yonkers, White Plains, Queens and Brooklyn.

It will also give Clutter a trove of real estate that it will now own: The Storage Fox didn’t appear to raise any traditional VC funding, but it did have large finance agreements in place in order to buy property. That is a pattern that Clutter is likely to continue, Mir said.

Now that there will be more accessible space on Clutter’s platform that it actually owns, it will also give the company a point of entry into a new range of business services alongside self-storage. Could that extend into something like office space, potentially pitting Clutter against one of its portfolio neighbors, WeWork? Mir declined to answer specifically but we’ve seen some outlier cases — such as this guy who lived out of his storage unit — that, while not exactly okay for a number of reasons, does underscore that there is a lot of potential there.

“There are over 52,000 self-storage facilities in the US alone,” Mir said. “If you take all that and add it up, there are more square feet in those storage spaces than there are in McDonald’s and Starbucks in the US, combined. At the same time, inside of cities, we’re running out of space. So our vision is to apply all the technology that we’ve built in house to increase the value that these self-storage facilities provide across society.”

Clutter has already made some moves beyond simple storage in its existing business: it’s already actively advertising the option to rent, sell, donate and dispose of your items if you choose — although it seems that these four services are not yet actively live. Earlier this year, it acquired the storage business of Omni, which itself is currently focusing on rentals.

Storage overall has not been an easy area to tackle for a lot of reasons: on top of the usual issues of needing to ensure that movers — the face and engine of your business (and in Clutter’s case, W2’d employees) — are responsible and good at their jobs, the cargo can be unexpectedly large or fragile, and the movement of it might be tied up in all kinds of backstories that make getting from A to B and eventually back to the owner again very complicated.

Mir concedes that the customer satisfaction aspect has been challenging, not least because it’s one of those areas that people are quick to publicly complain about when something has gone awry. He also insists that Clutter’s ratings and efforts are generally improving. Frankly, it’s great to hear him be honest about this and not deny that criticism is a challenge and that the company is always working to make this better.

Thinkful confirms data breach days after Cheggs $80M acquisition

Thinkful, an online education site for developers, has confirmed a data breach, just days after it confirmed it would be acquired.

“We recently discovered that an unauthorized party may have gained access to certain Thinkful company credentials so, out of an abundance of caution, we are notifying all of our users,” said Erin Rosenblatt, the company’s vice-president of operations, in an email to users.

“As soon as we discovered this unauthorized access, we promptly changed the credentials, took additional steps to enhance the security measures we have in place, and initiated a full investigation,” the executive said.

At the time of writing, there has been no public acknowledgement of the breach beyond the email to users.

Thinkful, based in Brooklyn, New York, provides education and training for developers and programmers. The company claims the vast majority of its graduates get jobs in their field of study within a half-year of finishing their program. Earlier this month, education tech giant Chegg bought Thinkful for $80 million in cash.

But the company would not say when the breach happened — or if Chegg knew of the data breach prior to the acquisition announcement.

A spokesperson for Chegg did not respond to a request for comment. Thinkful spokesperson Catherine Zuppe did not respond to several emails of questions about the breach.

The email to users said the stolen credentials could not have granted the hacker access to certain information, such as government-issued IDs and Social Security numbers, or financial information. But although the company said it’s seen “no evidence” of any unauthorized access to user’s account data, it did not rule out any improper access to user data.

Thinkful said it is requiring all users to change their passwords.

We also asked Thinkful what security measures it has employed since the credentials breach, such as employing two-factor authentication, but did not hear back.

Just months earlier, Chegg confirmed a data breach, which forced the online technology giant to reset the passwords of its 40 million users.

At least Thinkful is now in good company.

Readying an IPO, Postmates secures $225M led by private equity firm GPI Capital

Postmates, the popular food delivery service, has raised another $225 million at a valuation of $2.4 billion, the company confirmed to TechCrunch on Thursday, ahead of an imminent initial public offering.

Private equity firm GPI Capital has led the investment, first reported by Forbes, which brings Postmates’ total funding to nearly $1 billion. GPI takes non-controlling stakes — between 2% and 20% — in both late-stage private companies and publicly listed ventures.

After tapping JPMorgan Chase and Bank of America to lead its float, Postmates filed privately with the Securities and Exchange Commission for an IPO earlier this year. Sources familiar with the company’s exit plans say the business intends to publicly unveil its IPO prospectus this month.

To discuss the company’s journey to the public markets and the challenges ahead in the increasingly crowded food delivery space, Postmates co-founder and chief executive officer Bastian Lehmann will join us onstage at TechCrunch Disrupt on Friday October 4th.

As Forbes noted, last-minute financings are critical for companies poised to run out of cash and in need of an infusion prior to hitting the public markets. The motives for Postmates’ last-minute financing are unclear; however, the company will certainly begin trading on the stock market at an interesting time. 2019 has proven to be the year of unicorn listings, and former Silicon Valley darlings like Uber and Lyft have struggled to stabilize since their multi-billion-dollar debuts, despite years of support and coddling from venture capitalists.

Meanwhile, activity in the food delivery space has distracted from Postmates’ prospects. DoorDash, for one, recently purchased another food delivery service, Caviar, from Square in a deal worth $410 million. Uber is said to have considered buying Caviar, which had been looking for a buyer at least since 2016, according to Bloomberg. Postmates, for its part, has long been the subject of M&A rumors.

On-demand food delivery, undeniably popular, has yet to prove its long-term viability as a money-making business. At the very least, a sizeable check from a private equity firm ensures Postmates has the capital it needs, for the time being, to accelerate growth and double down on its autonomous robotic delivery ambitions.

Founded in 2011, Postmates is also backed by Spark Capital, Founders Fund, Uncork Capital, Slow Ventures, Tiger Global, Blackrock and others.

Andrew Masons Descript snags $15M, acquires Lyrebird to let users type text to create audio in their own voices

The boom in popularity for podcasting has given a new voice to the world of spoken word content that had been largely left for dead with the decline of broadcast radio. Now riding the wave of that growth, a startup called Descript that’s building tools to make the art of creating podcasts — or any other content that involves working with audio — a little easier with audio transcription and editing tools, has a trio of news announcements: funding, an acquisition and the launch of a new tool that brings some of the magic of natural language processing and AI to the medium by letting people create audio of their own voices based on text that they type.

Descript, the latest startup from Groupon founder Andrew Mason, created as a spin-off of his audio-guide business Detour (which got acquired by Bose last year), is today announcing $15 million in funding, a Series A for expanding the business (including hiring more people) that’s coming from Andreessen Horowitz (it also funded the startup’s seed round in 2017) and Redpoint.

Along with that, the company has acquired a small Canadian startup, Lyrebird — which had, like Descript, also built audio editing tools. Together, the two are rolling out a new feature for Descript called Overdub: people will now be able to create “templates” of their voices that they can in turn use to create audio based on words that they type, part of a bigger production suite that also will let users edit multiple voices on multiple tracks. The audio can be standalone, or the audio track for a video.

(The video transcription works a little differently: When you add words, or take them out, the video makes jumps to account for the changes in timing.)

Overdub is the latest addition to a product that lets users create instant transcriptions of audio text that can then be cut and potentially augmented with music from other audio using drag-and-drop tools that take away the need for podcasters to learn sound engineering and editing software. The non-technical emphasis of the product has given Descript a following among podcasters and others that use transcription software as part of their audio production suites. The product is priced in a freemium format: no charge for up to four hours of voice content, and $10 per month after that.

In the age of market-defining, election-winning fake news aided and abetted by technology, you’d be forgiven for wondering if Overdub might not be a highway to Deep Fake City, where you could use the technology to create any manner of “statements” by famous voices.

Mason tells me the company has built a way to keep that from being able to happen.

The demo on the company’s home page is created with a special proprietary voice just for illustrative purposes, but to actually activate the editing and augmenting feature for a piece of their own audio, users have to first record a number of statements that are repeated back, based on text created on the fly and in real time. These audio clips are then used to shape your digital voice profile.

This means that you can’t, for example, feed audio of Donald Trump into the system to create a version of the president saying that he is awfully sorry for suggesting that building walls between the U.S. and Mexico was a good idea, and that this would not, in fact, make America Great Again. (Too bad.)

But if you subscribe to the idea that tech advances in NLP and AI overall are something of a Pandora’s box, the cat’s already out of the bag, and even if Descript doesn’t allow for it, someone else will likely hack this kind of technology for more nefarious ends. The answer, Mason says, is to keep talking about this and making sure people understand the potentials and pitfalls.

“People already have created the ability to make deep fakes,” Mason said. “We should expect that not everybody is going to follow the same constraints that we have followed. But part of our role is to create awareness of the possibilities. Your voice is your identity, and you need to own that voice. It’s an issue of privacy, basically.”

The developments underscore the new opportunity that has opened up in tapping some of the developments in artificial intelligence to address what is a growing market. On one hand, it’s a big market: Based just on ad revenues alone, podcasting is expected to bring in some $679 million this year, and $1 billion by 2021, according to the IAB — one reason why companies like Spotify and Apple are betting big on it as a complement to their music streaming businesses.

On the other, the area of production tools for podcasters is a very crowded market, with a number of startups and others putting out a lot of tools that all work quite well in identifying what people are saying and transcribing it accurately.

On the front of transcription and the area where Descript is working, rivals include the likes of Trint, Wreally and Otter, among many others. Decript itself doesn’t even create its basic NLP software; it uses Google’s, as basic NLP is now an area that has essentially become “commoditized,” said Mason in an interview.

That makes creating new features, tapping into AI and other advances, all the more essential, as we look to see if one tool emerges as a clear leader in this particular area of SaaS.

“In live multiuser collaboration, there is still no other tool out there that has done what we have done with large uncompressed audio files. That is no small feat, and it has taken time to get it right,” said Mason. “I have seen this transition manifest from documents to spreadsheets to product design. No one would have thought of something like product design to be huge space but just by taking these tools for collaboration and successfully porting them to the cloud, companies like Figma have emerged. And that’s how we got involved here.”

Readying an IPO, Postmates secures $225M from private equity firm GPI Capital

Postmates, the popular food delivery service, has raised another $225 million at a valuation of $2.4 billion ahead of an imminent initial public offering, the company confirmed to TechCrunch on Thursday.

Private equity firm GPI Capital has led the investment, first reported by Forbes, which brings Postmates total funding to nearly $1 billion. GPI takes non-controlling stakes — between 2% and 20% — in both late-stage private companies and publicly-listed ventures.

After tapping JPMorgan Chase and Bank of America to lead its float, Postmates filed privately with the Securities and Exchange Commission for an IPO earlier this year. Sources familiar with the company’s exit plans say the business intends to publicly unveil its IPO prospectus this month.

To discuss the company’s journey to the public markets and the challenges ahead in the increasingly crowded food delivery space, Postmates co-founder and chief executive officer Bastian Lehmann will join us on stage at TechCrunch Disrupt on Friday October 4th.

As Forbes noted, last-minute financings are critical for companies poised to run out of cash and in need of an infusion prior to hitting the public markets. The motives for Postmates last-minute financing are unclear, however, the company will certainly begin trading on the stock market at an interesting time. 2019 has proven to be the year of unicorn listings and former Silicon Valley darlings like Uber and Lyft have struggled to stabilize since their multi-billion-dollar debuts, despite years of support and coddling from venture capitalists.

Meanwhile, activity in the food delivery space has distracted from Postmates prospects. DoorDash, for one, recently purchased another food delivery service, Caviar, from Square in a deal worth $410 million. Uber is said to have considered buying Caviar, which had been looking for a buyer at least since 2016, according to Bloomberg. Postmates, for its part, has long been the subject of M&A rumors.

On-demand food delivery, undeniably popular, has yet to prove its long-term viability as a money-making business. At the very least, a sizeable check from a private equity firm ensures Postmates has the capital it needs, for the time being, to accelerate growth and double down on its autonomous robotic delivery ambitions.

Founded in 2011, Postmates is also backed by Spark Capital, Founders Fund, Uncork Capital, Slow Ventures, Tiger Global, Blackrock and others.

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