NEWS

Decentralized video infrastructure platform Livepeer raises $8M Series A

Video is the core entertainment medium of the web. Platforms like YouTube, Twitch, Netflix and more deliver millions of hours of videos to hungry consumers every day, and those deliveries will only intensify as video games move increasingly to streaming models.

Yet, delivering all of that content remains an expensive and challenging endeavor. The largest platforms employ hundreds of video-encoding specialist engineers to optimize the transcoding and delivery costs of their product, while also paying millions either for their own cloud infrastructure or to AWS or Google Cloud. Yet, few affordable options exist for startups — such as live-streaming apps like Houseparty (which was bought last week by Epic Games) — or even for large enterprises with streaming needs but without access to specialized hardware.

That’s where Livepeer comes in. The brainchild of multi-time founder duo Doug Petkanics and Eric Tang, Livepeer offers a decentralized platform for video encoding centered on the Ethereum network. Its early success has attracted the attention of media VCs, and the company announced today that it has raised an $8 million Series A venture capital round led by Northzone. Houseparty founder Ben Rubin joined the round as well, and video infrastructure behemoth Brightcove’s former CEO David Mendels also joined as an advisor to the company.

Talking the future of media with Northzone’s Pär-Jörgen Pärson

Livepeer is essentially a marketplace between encoding providers (the supply side) and app developers who need video-streaming services (the demand side). Today, developers can integrate Livepeer inside their apps by downloading the node, running the Livepeer media server and funding their account with Ethereum. So far, more than 100 events have streamed their videos using the platform, although Petkanics admits that they have been an “early-adopter, philosophically-aligned crowd.”

At this point in the life cycle of crypto and blockchain, it can be easy to be skeptical of next-generation technologies built on these platforms. But Petkanics believes there is a unique opportunity in video that connects well with this market.

In addition to the absolutely stupendous increase in video streaming across the web, there is a unique compute market for encoding: the millions of GPUs bought by crypto miners over the past few years. Those GPUs calculate the hashes required to make money in crypto, but in many cases according to Petkanics, leave idle the other processing units on those chips that actually handle video encoding. Livepeer sees an opportunity — at least early in the company’s growth cycle — to essentially bootstrap on top of that excess capacity for processing power.

Right now, Petkanics told me the company has more than 30 providers of compute power on the platform, and that the “supply side of the network is running, and it is the last thing that keeps me up at night.”

That excess compute power is driving significantly lower prices for encoding. Petkanics said that Livepeer is 10 times cheaper than incumbent streaming providers, and with additional development work in the coming years, he believes he can further improve that cost advantage. Today, he said that the platform can handle two streams for roughly 70 cents per day, compared to $3 per stream per hour of incumbents (a number that surely varies across companies with different levels of negotiation leverage).

Having compute power is one thing — getting customers to use it is another. The goal of the Series A funding, along with the company’s new Pilot Partner Program, is to begin implementing applications outside of the crypto-fans and enter the enterprise. The company is offering six months free for new participants as an inducement to try the platform.

Ultimately, Petkanics sees Livepeer creating a “token coordinating network” that incentivizes more compute power to join and match the needs of customers. Even more interestingly, the increasing need of particular video-encoding algorithms means there is an incentive for developers to add new functionality to the company’s open-source media server, creating a novel way to improve open-source sustainability.

Open source sustainability

Petkanics and Tang have previously worked together with Jordan Cooper on Wildcard, a redesign of the mobile browser that had previously raised $10 million, led by General Catalyst. Before that, they worked together at Hyperpublic, which developed databases of local information with an API for developers that sold to Groupon in 2012. Livepeer has 12 employees, with half based in New York City, and half distributed.

In addition to Northzone, Digital Currency Group, Libertus, Collaborative Fund, Notation Capital, Compound, North Island and StakeZero joined the round.

Salesforce is buying data visualization company Tableau for $15.7B in all-stock deal

On the heels of Google buying analytics startup Looker last week for $2.6 billion, Salesforce today announced a huge piece of news in a bid to step up its own work in data visualization and (more generally) tools to help enterprises make sense of the sea of data that they use and amass: Salesforce is buying Tableau for $15.7 billion in an all-stock deal.

The latter is publicly traded and this deal will involve shares of Tableau Class A and Class B common stock getting exchanged for 1.103 shares of Salesforce common stock, the company said, and so the $15.7 billion figure is the enterprise value of the transaction, based on the average price of Salesforce’s shares as of June 7, 2019.

This is a huge jump on Tableau’s last market cap: it was valued at $10.79 billion at close of trading Friday, according to figures on Google Finance. (Also: trading has halted on its stock in light of this news.)

The two boards have already approved the deal, Salesforce notes. The two companies’ management teams will be hosting a conference call at 8am Eastern and I’ll listen in to that as well to get more details.

This is a huge deal for Salesforce as it continues to diversify beyond CRM software and into deeper layers of analytics.

The company reportedly worked hard to — but ultimately missed out on — buying LinkedIn (which Microsoft picked up instead), and while there isn’t a whole lot in common between LinkedIn and Tableau, this deal will also help Salesforce extend its engagement (and data intelligence) for the customers that Salesforce already has — something that LinkedIn would have also helped it to do.

This also looks like a move designed to help bulk up against Google’s move to buy Looker, announced last week, although I’d argue that analytics is a big enough area that all major tech companies that are courting enterprises are getting their ducks in a row in terms of squaring up to stronger strategies (and products) in this area. It’s unclear whether (and if) the two deals were made in response to each other, although it seems that Salesforce has been eyeing up Tableau for years.

“We are bringing together the world’s #1 CRM with the #1 analytics platform. Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It’s truly the best of both worlds for our customers–bringing together two critical platforms that every customer needs to understand their world,” said Marc Benioff, chairman and co-CEO, Salesforce, in a statement. “I’m thrilled to welcome Adam and his team to Salesforce.”

Tableau has about 86,000 business customers, including Charles Schwab, Verizon (which owns TC), Schneider Electric, Southwest and Netflix. Salesforce said Tableau will operate independently and under its own brand post-acquisition. It will also remain headquartered in Seattle, Wash., headed by CEO Adam Selipsky along with others on the current leadership team.

Indeed, later during the call, Benioff let it drop that Seattle would become Salesforce’s official second headquarters with the closing of this deal.

That’s not to say, though, that the two will not be working together.

On the contrary, Salesforce is already talking up the possibilities of expanding what the company is already doing with its Einstein platform (launched back in 2016, Einstein is the home of all of Salesforce’s AI-based initiatives); and with “Customer 360,” which is the company’s product and take on omnichannel sales and marketing. The latter is an obvious and complementary product home, given that one huge aspect of Tableau’s service is to provide “big picture” insights.

“Joining forces with Salesforce will enhance our ability to help people everywhere see and understand data,” said Selipsky. “As part of the world’s #1 CRM company, Tableau’s intuitive and powerful analytics will enable millions more people to discover actionable insights across their entire organizations. I’m delighted that our companies share very similar cultures and a relentless focus on customer success. I look forward to working together in support of our customers and communities.”

“Salesforce’s incredible success has always been based on anticipating the needs of our customers and providing them the solutions they need to grow their businesses,” said Keith Block, co-CEO, Salesforce. “Data is the foundation of every digital transformation, and the addition of Tableau will accelerate our ability to deliver customer success by enabling a truly unified and powerful view across all of a customer’s data.”

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

As businesses continue to move more of their computing and data to the cloud, one of the startups that has made a name for itself as a provider of cloud-based solutions to protect and manage those IT assets has raised a big round of funding to build its business.

Druva, which provides software-as-a-service-based data protection, backup and management solutions, has raised $130 million in a round of funding that CEO and founder Jaspreet Singh says takes the company “well past the $1 billion mark” in terms of its valuation.

Alongside this news, it’s making an acquisition to continue building out the storage part of its business (one of several product areas that it’s developing): it’s acquiring CloudLanes, a startup that was backed by Microsoft and others, for an undisclosed sum, in a deal that will likely be formally announced in early July.

The funding is being led by Viking Global Investors, the hedge fund and investment firm, with participation from two other new investors, Neuberger Berman and Atreides Capital, and existing investors Riverwood Capital, Tenaya Capital and Nexus Venture Partners (which were part of Druva’s last round of $80 million in 2017). The company, Singh said, is now nearly at a $100 million annual run rate. And although he would not disclose revenues, he said it’s now in a strong position to consider going public as its next step (or finally entertaining one of the many acquisition offers Singh admitted Druva gets).

“As we look at growth and the potential of what we are doing, the next obvious step is to look at public markets in the next 12 to 18 months,” he said in an interview.

The strong numbers (in terms of funding raised, valuation and performance) are a sign not just of Druva’s own business health, but of the opportunity it is tackling.

Spurred by a number of factors — the unfortunate rise of malicious hacking and data breaches, a massive wave of computing services that are creating mountains of data that can now be parsed for insights and a big move to cloud computing — the data protection industry is booming, with IDC predicting that it will collectively cost some $55 billion by 2020 to store and manage “copy data” (backups of the data), and that the data protection market will likely see revenues of $8 billion by 2020. Druva itself works with some 4,000 organizations today, with many in the mid-market in terms of size, with customers ranging across a number of verticals and including the likes of Build Group, American Cancer Society and Port of New Orleans — but as a measure of the opportunity, IDC notes that as of 2017 it had only about a 1% share (it doesn’t have more updated figures yet).

With a huge opportunity like this, it’s also an unsurprisingly crowded area in terms of competition. Singh points out that others looking to provide services in the same area include huge incumbents like CommVault and IBM, as well as newer entrants like Rubrik (itself on something of a fundraising tear in the last few years to capitalise on the same opportunity).

Singh notes that Druva stands out from these because it is the only one in the pack that started that remains an exclusively cloud-based, SaaS offering, meaning a company requires no hardware changes or appliance purchases in order to use it. While that’s an area that everyone is now moving into, his argument is that having started out here gives Druva a level of expertise and experience that cannot be matched by others — an important point when data protection is at stake.

The reality of today’s enterprise world is that there are a number of companies that are very far from being “in the cloud.” Despite the song and dance that we hear all the time about how cloud is the future, they are more often than not either relying entirely still on on-premises computing, or a hybrid solution. As Singh talks about it, this is almost irrelevant to what Druva is offering, and is in fact a segue to helping those companies come to trust and move more off premises, by giving them a strong example of how a cloud-based solution not only works, but can be less expensive and better than on-premise alternatives.

The CloudLanes acquisition fits in with this strategy, too: the company’s solution stack includes cloud storage that leverages on-premise data as a cache; ransomware protection; audit logs and more. “It will help us cover the gap between the data center and cloud more effectively,” Singh said.

This is also the belief that is propelling Druva to expanding into newer areas of business. Singh noted that business intelligence is going to be a big focus for the company, which makes sense: now that there is a lot of data being stored and managed by Druva, the next obvious move is to help parse it for insights. Security and making a wider move to secure endpoints are also areas that the company is considering, he said.

“We invest in companies based on a thorough assessment of their business models and fundamentals, the quality of their management teams, and cyclical and secular industry trends,” said Harish Belur, managing director, Riverwood Capital, in a statement. “Druva is doing something unique and special and, as a result, has grown at a phenomenal rate over recent years, all while keeping the trust and loyalty of its enterprise customers around the globe. We know this market is taking off and we continue to invest in Druva because we are sure it has the right product, executive team, and market execution to maintain leadership in the industry.”

I asked if companies like Amazon or Microsoft are friends, or frenemies, considering that they have a big part to play in cloud services. Singh said that so far, so good, since they are all more focused on infrastructure — or at least that’s where most of their strength has been up to now. Amazon, in particular, is a strong partner to the company he said, where Druva is often an early adopter of new tools of Amazon’s, and the AWS sales team regularly suggests Druva to customers for data protection and management services. Druva even happened to include a quote from the company in its news release:

“Druva is a leading Advanced Technology Partner in the AWS Partner Network,” said Mike Clayville, vice president Worldwide Commercial Sales and Business Development, Amazon Web Services, Inc., in a statement. “Druva’s solutions powered by AWS are changing the way data is managed and protected at thousands of companies globally. We’d like to congratulate Druva on its latest fund raise, and look forward to innovating with Druva to create new solutions that benefit our customers.”

Seems like that could be one to watch, as well, as both companies continue their cloud expansion, both independently and in competition with others.

VMware announces intent to buy Avi Networks, startup that raised $115M

VMware has been trying to reinvent itself from a company that helps you build and manage virtual machines in your data center to one that helps you manage your virtual machines wherever they live, whether that’s on prem or the public cloud. Today, the company announced it was buying Avi Networks, a six-year-old startup that helps companies balance application delivery in the cloud or on prem in an acquisition that sounds like a pretty good match. The companies did not reveal the purchase price.

Avi claims to be the modern alternative to load balancing appliances designed for another age when applications didn’t change much and lived on prem in the company data center. As companies move more workloads to public clouds like AWS, Azure and Google Cloud Platform, Avi is providing a more modern load-balancing tool, that not only balances software resource requirements based on location or need, but also tracks the data behind these requirements.

Diagram: Avi Networks

VMware has been trying to find ways to help companies manage their infrastructure, whether it is in the cloud or on prem, in a consistent way, and Avi is another step in helping them do that on the monitoring and load-balancing side of things, at least.

Tom Gillis, senior vice president and general manager for the networking and security business unit at VMware sees, this acquisition as fitting nicely into that vision. “This acquisition will further advance our Virtual Cloud Network vision, where a software-defined distributed network architecture spans all infrastructure and ties all pieces together with the automation and programmability found in the public cloud. Combining Avi Networks with VMware NSX will further enable organizations to respond to new opportunities and threats, create new business models, and deliver services to all applications and data, wherever they are located,” Gillis explained in a statement.

In a blog post,  Avi’s co-founders expressed a similar sentiment, seeing a company where it would fit well moving forward. “The decision to join forces with VMware represents a perfect alignment of vision, products, technology, go-to-market, and culture. We will continue to deliver on our mission to help our customers modernize application services by accelerating multi-cloud deployments with automation and self-service,” they wrote. Whether that’s the case, time will tell.

Among Avi’s customers, which will now become part of VMware, are Deutsche Bank, Telegraph Media Group, Hulu and Cisco. The company was founded in 2012 and raised $115 million, according to Crunchbase data. Investors included Greylock, Lightspeed Venture Partners and Menlo Ventures, among others.

Indonesias EV Hive raises $13.5M and expands into co-living and new retail

WeWork’s battle to win co-working in Indonesia, the world’s fourth most populous country, is intensifying after one of the U.S. firm’s key rivals issued a slew of announcements to double down on its business.

EV Hive, an Indonesia-based co-working startup, said today that it has raised $13.5 million and expanded into new verticals. The company is putting off plans to foray into new countries in order to prioritize growth opportunities at home.

The four-year-old company, which started as a project for seed-stage VC firm East Ventures, has rebranded to CoHive as part of the strategy to diversify its business. That’ll see it add new services for living spaces (CoLiving) and retailers (CoRetail), in addition to its core co-working and events businesses.

“We’re the number one player in the market and our goal now is to use the capital and offer more services and products,” Jason Lee, CoHive’s CFO, told TechCrunch in an interview.

As for the new funding, that’s a first close of the firm’s Series B and it is led by Korea’s Stonebridge Ventures . That money takes CoHive to more than $37 million to dateit last announced a $20 million raise one year ago — and there’s more to come.

Lee told TechCrunch that he expects the round to wrap up and fully close in “the next few months.” According to Lee, the company is in talks with local and international investors as it aims to bring “strategic investors” on board to provide more benefits than simply capital.

CoHive announced its rebranding and new services at an event in Jakarta

The new services divisions are challenging expansions for a co-working company.

CoHive already claims to be the market leader in Indonesia — where it says it has 9,000 members from some 800 paying companies — and now it is responding to feedback from members by adding retail and living.

The thought of living close to your place of work may inspire dread from many an office worker, but in Jakarta — one of the world’s most jammed cities — many people are crying out for a short commute, according to Lee.

“There’s huge demand in the market,” he told TechCrunch. “There’s a shortage of affordable housing [in Jakarta] and the traffic is the worst in the world [so] people want to leave near their workplace… they value the convenience because of the traffic.”

CoLiving was first announced a year ago, and now CoHive has opened its first such property, a joint development with Singaporean developer Keppel. The maiden property — Tower Crest West Vista in West Jakarta — has 64 rooms across a total 2,800-sqm living space. Lee said the first phase of offers, which targeted individuals and small businesses, sees the building 90% occupied. CoHive plans to offer the remainder to larger companies.

On the retail side, the objective is to develop an alternative to malls that will allow experimentation, Lee said.

“Traditional malls are outdated with long leases and high upfront rental costs,” he explained, pointing out that a year of rent is typically required for retail leases.

Instead, CoHive wants to offer a more flexible option that will allow new retail companies and startups to “test products and innovate before they take them to market.”

Already, Lee claimed, there are six large tenants that plan to use CoRetail, which will include a mix of temporary pop-ups, Instagram “box shops” and permanent retail space.

“They are trying to find a place to showcase and actualize their products without having to pay so much money,” he added.

CoHive announced its rebranding and new services at an event in Jakarta

The double down on Indonesia means that CoHive has shelved previous plans to enter new markets in Southeast Asia. When it raised $20 million last year, CEO Carlson Lau told TechCrunch of a plan to reach 100 spaces by 2022 with moves into markets like Thailand and Vietnam, but that appears to be on hold.

“We’re not ruling it out of the pipeline [but] at least for the next 12 months, we’ll be focused on Indonesia,” Lee said.

That’ll primarily mean that the business expands into tier-two cities. Indeed, in a number of locations, Lee revealed, they are in the design phase of developing buildings.

With a population of more than 250 million, Indonesia is the largest single consumer market in Southeast Asia, and that has made it the priority in the region for most tech companies, including ride-hailing firms Grab and Go-Jek, which are valued at $14 billion and $9 billion, respectively. That extends across various tech segments, including co-working.

“We see the market in Indonesia as very large,” explained Lee. “There’s so much demand.”

WeWork is, like others, prioritizing Indonesia. It extended its presence in Southeast Asia through the 2017 acquisition of startup SpaceMob, which also saw it pour $500 million in resources into Southeast Asia and Korea.

Lee, as you might expect, believes that there’s space for multiple players, and he sees CoHive and WeWork as operating in different areas.

“WeWork is trying to be that Mercedes…. we’re not competing,” he said, comparing his company to Toyota, a brand that is widely popular in Indonesia because it is more affordable.

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