The Dropbox IPO filing is here


It’s official, the Dropbox IPO filing is here.

Going public is a huge milestone for Dropbox and has been one of the most anticipated tech IPOs for several years now.

We knew that it had already filed confidentially, but the company has now unveiled its filing, meaning the actual IPO is likely very soon, probably late March.

The filing shows that Dropbox had $1.1 billion in revenue for last year. This compares to $845 million in revenue the year before and $604 million for 2015.

The company is not yet profitable, having lost nearly $112 million last year. This is significantly improved from losses of $210 million for 2016 and $326 million for 2015.

Dropbox says it has 11 million paying users, just a small fraction of the over 500 million registered users who use its cloud services for free.

The big question is whether the company will achieve the $10 billion valuation it raised in the private markets. Part of its success will be measured relative to Box, which went public in 2015 and will be considered a comparable.

With the filing we see that the largest shareholder is Sequoia Capital, which owned 25% of the company prior to the IPO. This is a large stake. Accel owned 5.4%.

Developing story, check back for updates

Momo buys Tantan, China’s Tinder, for $600M as Chinese social networks consolidate


WeChat is far and away the biggest messaging platform in China at the moment, and that is helping to drive a push among the smaller players to get together for better scale. Today, Momo, the Chinese location-based social networking app that has more recently made a big push into dating services and is traded on Nasdaq with a market cap of around $6 billion, announced that it has acquired Tantan, China’s top dating app, for $600.9 million in an all-cash deal.

It’s not clear how that price compares to Tantan’s pre-exit valuation: it had never disclosed the number. Overall, Tantan had raised $120 million, including a $70 million round last year from a mix of strategic and financial investors. Its backers included DST Global, Kleiner Perkins, video social network YY, Genesis Capital, SAIF China, Zhongwei, DCM and Bertelsmann.

We’d actually heard rumors of this acquisition recently, so it’s not coming as a complete surprise.

WeChat has in a way written the playbook in China for how to leverage a popular social platform to move into other services and it seems that would-be competitors are following suit. Other notable moves and exits in recent years have included Alibaba buying Youku Tudou and also investing heavily in WeChat competitor Weibo; selfie-making app Meitu going public and Meituan Dianping making a move into transportation. For its part, Momo had been moving into streaming services but with government pressure over the content of these services, going to its dating roots may have felt like a safer bet for now.

And the deal will indeed give Momo a big boost in its own dating business. Tantan said that it has enabled 5 billion matches since launching in 2015. (As a point of comparison, Tinder — one of the leading dating apps in the West — says that its enabled at least 8 billion matches since its launch in 2012.)

This does not signal a shift for Momo into dating exclusively (sorry for the pun), but to double down on one of the more successful ways that it’s diversified its business.

“Our core position will continue to center on social networking and this acquisition enriches our product line in the social space,” said Yan Tang, chairman and CEO of Momo, in a statement. “We will continue to invest and incubate more sub-brands to serve the social and entertainment needs of different demographics. Tantan has become widely recognized within a short period of three years since its inception, which is largely attributable to the outstanding performance of its talented team. We also respect Tantan’s product strategy that focuses on the customer experience of female users. After the acquisition, the Tantan team will continue to operate the mobile apps under the Tantan brand with our full support.”

Indeed, you can see this as similar to the strategy taken by IAC, which operates a number of dating apps alongside Tinder, such as Match.com and OKCupid.

For Tantan, the deal will give the company not just a funding boost but potentially some economies of scale in its developer backend and other areas of its business. “Momo and Tantan have their own strengths in their respective markets and among targeted customers,” said Yu Wang, chairman and CEO of Tantan, in his own statement. “The acquisition is a critical strategic upgrade to cover a greater range of user demographics and needs, and build up a larger social networking market through complementary businesses and strategic synergy. We are very confident in our future development.”

Additional reporting by Jon Russell (not this Jon Russell).

Stealth space catapult startup SpinLaunch is raising $30M

What if instead of blasting cargo into space on a rocket, we could fling it into space using a catapult? That’s the big, possibly crazy, possibly genius idea behind SpinLaunch. It was secretly founded in 2014 by Jonathan Yaney, who built solar-powered drone startup Titan Aerospace and sold it to Google. Now TechCrunch has learned from three sources that SpinLaunch is raising a massive $30 million Series A to develop its catapult technology. And we’ve scored an interview with the founder after four years in stealth.

Sources who’ve spoken to the SpinLaunch team tell me the idea is to create a much cheaper and sustainable way to get things like satellites from earth into space without chemical propellant. Using a catapult would sidestep the heavy fuel and expensive booster rockets used by companies like SpaceX and Blue Origin.

SpinLaunch plans to use a centrifuge spinning at an incredible rate inside a vacuum that reduces friction. All that momentum is then harnessed to catapult a payload into space at speeds one source said could be around 3000 miles per hour. With enough momentum, objects could be flung into space on their own. Alternatively, the catapult could provide some of the power needed with cargo being equipped with supplemental rockets necessary to leave earth’s atmosphere.

After some hesitation about emerging from stealth, Yaney agreed to talk to TechCrunch about his secretive startup, and show us the image of SpinLaunch’s hangar seen above. “Since the dawn of space exploration, rockets have been the only way to access space. Yet in 70 years, the technology has only made small incremental advances” Yaney tells me. “To truly commercialize and industrialize space, we need 10x tech improvement.”

SpinLaunch founder and CEO Jonathan Yaney

Until recently, few details about SpinLaunch have been available. SpinLaunch’s website is password-protected, and some Sunnyvale, CA job listings merely refer to it as a “rapidly growing space launch startup”. But last month, a bill was proposed in the Hawaii state senate to issue $25 million in bonds to assist SpinLaunch with “constructing a portion of its electrical small satellite launch system”. Hawaii hopes to gain construction contracts and jobs, and meet government goals for expanding space accessibility by helping SpinLaunch.

SEC documents show that Yaney raised $1 million in equity in 2014, the year SpinLaunch was founded, $2.9 million in equity in 2015, $2.2 million in debt in mid-2017, and another $2 million in debt in late 2017. Now Yaney confirms SpinLaunch has raised a total of $10 million to date, and that he’s personally an investor. As for the next $30 million, he says “The current status of our series A raise is that we are still taking meetings with potential investors and have not yet received an executed offer.”

Yaney has been co-founding startups since 2000, including TriVance and Moretti Designs. But a passion for aeronautics led him to become a 1000+ hour pilot, and start communications and imaging solar drone startup Titan Aerospace. It sold to Google in 2014 after receiving acquisition interest from Facebook, and Yaney began work on SpinLaunch to huck satellites into orbit.

Yaney explains that reaching orbital velocities typically “requires a rocket to carry massive quantities of propellant, leaving only a small fraction (a few percent) of the overall vehicle’s mass for ‘cargo.'” But SpinLaunch replaces rocket boosters with a kinetic launch system using principles “similar to those explored by several ground-based mass accelerators that date back to the 1960s. Modern adaptations include electromagnetic rail and coil guns, electrothermal-chemical guns, light gas guns, ram accelerators, and blast wave accelerators.”

NASA has investigated the possibility of catapult-assisted launches that fire off a track instead of a centrifuge, but none have become cost-effective enough to be successfully used to commercially launch things into space.

Yaney’s method is different. He says “SpinLaunch employs a rotational acceleration method, harnessing angular momentum to gradually accelerate the vehicle to hypersonic speeds. This approach employs a dramatically lower cost architecture with much lower power.” SpinLaunch is targeting a per launch price of less than $500,000, while Yaney says “all existing rocket based companies cost between $5 million and $100 million per launch.”

NASA has researched catapult-based space launchers that fire cargo off a track.

Two sources says physicists who’ve looked into the company said a potential challenge could be air resistance upon the cargo when the catapult fires. Earth’s atmosphere is so dense that it could be like the cargo was hitting a brick wall upon ejection. Any electronics or other sensitive materials in the cargo might have to be engineered to withstand intense G-forces. This all explains the pointy, aerodynamic launch vehicle shown in the photo up top.

Now it’s a question of getting that ship into space. “During the last three years, the core technology has been developed, prototyped, tested, and most of the tech risk retired” Yaney proclaims. “The remaining challenges are in the construction and associated areas that all very large hardware development and construction projects face.” Touching the heavens isn’t cheap, so SpinLaunch is talking to big institutional VC firms that could afford to fund successive rounds.

If SpinLaunch can overcome the technical barriers, it could democratize access to space by lowering launch costs. That could accelerate a new era of zero-gravity innovation, from space travel to mining to what we once thought of as mere science fiction

Customer service bot startup Agent IQ announces $6.3 million Series A led by Sierra Ventures


If you’ve tried to deal with a bot before you can speak to a human customer service rep, you know how frustrating that process can sometimes be. Sure, there are basic tasks that can free up a human rep to handle the more difficult matters, but it can be exasperating when there is no easy way to talk to a person. Agent IQ, a startup that has developed customer service bots, acknowledges that problem and today it announced a $6.3 million Series A investment.

The round was led by Sierra Ventures with participation from CRCM and Rubicon Ventures. Today’s investment brings the total raised to $8.5 million.

Agent IQ has its roots in a Nike marketing program, which allowed customers to communicate with a bot by typing “Hey Nike” into their chat app. CEO and founder, Craig Davis says they began building on that early program, and they learned that just the bot or just an agent didn’t really work for many customers. It required a product that blended technology with humans.

He found by visiting countless customer service centers, the pain wasn’t just for the customers. Reps were bored answering the same basic questions repeatedly, which wasn’t fun or challenging for them. What’s more, when they did need to answer unique questions, it required accessing a variety of disparate systems. The agents had to have multiple windows open trying to juggle different content repositories to find the appropriate response.

Photo: Agent IQ

“We thought it was important to help the agent, suggesting responses based on past conversations and based what they picked up on new knowledge,” Davis explained. They also began presenting knowledge base articles dynamically based on the context of the conversation, using that power of artificial intelligence and machine learning underpinning their solution.

Davis understands that he is competing with giants like Salesforce and Oracle, but he says because his company’s solution is built from the ground up with the latest technology, it has a leg up on these usual suspects. “Let’s talk about AI piece. They have years of technical debt and their technology is overlaid on their customer service management platform. They don’t get seamless handoff and don’t get that closed loop AI learning [that we provide],” Davis claimed.

He’s also competing with startups offering a similar value proposition like Digital Genius.

The company currently has 20 employees and 14 customers, all of which Davis says are Fortune 1000 customers paying at least $500,000 a year. He says the company plans to expand on the sales side and to build out customer success teams using the new funds.

Featured Image: Getty Images

Feature Labs launches out of MIT to accelerate the development of machine learning algorithms


Feature Labs, a startup with roots in research begun at MIT, officially launched today with a set of tools to help data scientists build machine learning algorithms more quickly.

Co-founder and CEO Max Kantor says the company has developed a way to automate “feature engineering,” which is often a time consuming and manual process for data scientists. “Feature Labs helps companies identify, implement, and most importantly deploy impactful machine learning products,” Kantor told TechCrunch.

He added, “Feature Labs is unique because we automate feature engineering, which is the process of using domain knowledge to extract new variables from raw data that make machine learning algorithms work.”

The company achieves this by using a process called “Deep Feature Synthesis,” which create features from raw relational and transactional datasets such as visits to the website or abandoned shopping cart items and automatically converts that into a predictive signal, Kantor explained.

He says this is vastly different from current human-driven process, which is time-consuming and error prone. Automated feature engineering enables data scientists to create the same kinds of variables they would come up with on their own, but much faster without having to spend so much time on the underlying plumbing. “By giving data scientists this automated process, they can spend more time figuring out what they need to predict,” he said.

Photo: Feature Labs

It achieved that in a couple of ways. First of all, it has developed an open source framework called Featuretools, which provide a way for developers to get started with the Feature Labs toolset. Kantor says that they can use these tools to build small projects and get comfortable using the algorithms. “The goal of this initiative is to share our vision by giving developers the chance to experiment with automated feature engineering on new machine learning problems,” he wrote in a blog post announcing the company launch.

Once a company wants to move beyond experimentation to scale a project, however, they would need to buy the company’s commercial product, which they are offering as a cloud service or on-prem solution, depending on the customers requirements. Early customers include BBVA Bank, Kohl’s, NASA and DARPA.

The company also announced a seed funding round of $1.5 million, which actually closed last March. The round was led by Flybridge Capital Partners with participation from First Star Ventures and 122 West Ventures.

Feature Labs products have their roots in research by Kantor and his co-founders Kalyan Veeramachaneni and Ben Schreck at MIT’s Computer Science and AI Lab at MIT, also known as CSAIL. The idea for the company began to form in 2015 and over the last couple of years, they have been refining the products through their work with early customers, which has led to today’s launch.

Featured Image: Photographer is my life/Getty Images

Teampay raises $4m so you don’t have to steal your CEO’s credit card anymore


Few problems are as much of a headache for the modern corporate worker as buying things on the company’s dime. Companies are loathe to hand out credit cards to everyone in the building, but they also want their employees to do your job without having to fill out six forms in triplicate to requisition a pencil. They also want to control spending and track who bought that $2,000 bottle of Pappy Van Winkle last month (for a very important sales meeting, of course).

Andrew Hoag, the founder and CEO of New York City-based Teampay, says that companies do crazy things to handle these problems. “We run across customers that cancel a corporate card every three months to reset it,” he explained. “We have seen customers pass around a clipboard [to purchase services], which really worries the auditors.”

That’s where Teampay comes in. The product allows companies to provide virtual credit cards to every employee, and then follows that up with a suite of approval workflow and analytics features that will make every CFO swoon and employees rejoice at the ease of buying services. The company announced today that it has raised $4 million in venture capital led by Rick Smith at Crosscut Ventures.

Hoag said he encountered the problem of procurement while running his previous startups. “People on my team were always bugging me about buying things for them. It was sort of a hard choice, since I either needed to give them a corporate card or pay out of pocket,” he explained.

Teampay’s goal is to make all expenses transparent and auditable, giving procurement analysts the confidence to allow employees to make purchases more efficiently. Procurement policies can be enforced, and they can also be updated as needed to adjust for changes in authorized spend.

Plus, the platform provides vendor analytics, so that a company can understand how much money it is spending on services like LinkedIn and ask for a better enterprise rate. “We give them reminders when they have been using something for a while, and we send them updates on their top spending vendors,” Hoag said.

Today, the platform integrates with Slack and Google Apps, and will be adding a Microsoft integration shortly. Approvals can be done in a Slack channel for instance, and Teampay also uses the directory information stored in these services to understand when an employee has left the company.

Hoag identified one of the key challenges for expenses today as the rise of the software-as-a-service model. “The market is really driven by this rise of bottoms up selling,” he said. Employees are buying more and more subscription products to do their everyday work, and yet, the tools for purchasing all of these necessary services haven’t improved.

With more and more subscriptions attached to the employee, it can be expensive to offboard a user. Hoag noted that “No one forgets their $10,000 a month SalesForce subscription, but the $15 a month Buffer subscription” often gets missed by finance, since there is no record of who got the subscription and thus, whether it was purchased by a departed employee.

A couple of bucks a month may not sound like much, but when you have hundreds of people leaving a company in any given year, multiplied by potentially dozens of subscriptions per employee, the amount of wasted expenses can be quite high. Hoag said that early customer data shows that roughly half of all transactions made by employees are recurring, with the other half being one-off.

Teampay’s focus is on the mid-market, targeting companies with two hundred to a thousand employees. Hoag said that “Our target customer is too small to have a full purchasing department, but too big to use the CEO’s credit card.” The company has several paying customers on the platform today.

In addition to Crosscut, the round was joined by KEC Ventures, Precursor Ventures, CoVenture, and a number of angel and other venture funds.

Featured Image: studioEAST/Getty Images

Travel activities platform KKDay raises $10.5M led by Japanese travel firm H.I.S.


KKDay, a startup from Taiwan that operates a platform that helps travelers to Asia find local activities, has raised $10.5 million.

The funding round was led by Japanese travel operator H.I.S. with participation from existing backer MindWorks Ventures, the Hong Kong-based VC.

KKDay is one of a number of services that cater to Asia’s burgeoning regional tourism market. The idea is to allow travelers to find experiences, tours and travel in their destination city, for example, a river cruise, museum visit, or city sightseeing tour. Since we all have a smartphone these days, the KKDay lets people browse their options and book their choices ahead of time or on-the-ground.

The target is to digitize and then take a slice of the travel tour and activities market that is predicted to grow by one-third to reach $183 billion by 2020, according to travel-focused analyst firm Phocuswright.

To get there, KKDay is turning to a traditional player for help.

H.I.S. was established in 1980 and today it employs close to 17,000 people with offices in over 150 cities in some-80 countries worldwide. The company, which recorded more than $5.5 billion in annual sales, is an old school, bricks and mortar travel firm, whereas three-year-old KKDay is a new, digital entrant that’s predominantly Asia-focused. Hence there is plenty of potential to work together.

“H.I.S. is not just a financial investor, but is valued as a strategic investor. Their product can use our platform and internet channel to expand their business globally,” KKDay CEO Ming Chen told TechCrunch in an interview.

On the reverse side, KKDay benefits by boosting its inventory with H.I.S.’s decades-old business. On the customer support-side, its network of country-based offices and agents can give KKDay customers a physical point of call if they need it, or simply the peace of mind that comes with that.

The match sounds ideal, so why not go the full hog and bring the two companies together? That’s not happening, according to KKDay CFO Weichun Liu.

“We made it very clear that this partnership is a means for both us to do what we are best at. There is no discussion on merger and acquisition so far,” she explained to TechCrunch.

But Liu believes that the relationship is essentially preparation for when large online travel giants enter the travel activity space.

“If a Priceline or Expedia jumps into the market, they have more resources,” she explained. “We will try to get an early start on the finer and more difficult parts to reach first [so that] even when the bigger guys enter the market we are ahead of the game.”

Ahead of the game means taking control of the experiences themselves rather than just selling them. Already, Liu said, KKDay tailors its packages by using its own people — for example as tour guides and by renting buses itself — or works closely with contractors, but H.I.M.’s firepower and presence can supercharge that.

To illustrate the ultimate goal, Liu turns to e-commerce where, she said, consumers are happier to buy products through Amazon rather than direct from retailers.

“Amazon means a certain level of quality and guarantee, that’s our aspiration,” she said.

Longer-term goals aside, KKDay is initially looking to grow its customer numbers in China and among Western markets like Europe and the U.S.. As of now, Hong Kong, Taiwan and Korea are its largest countries, according to CEO Chen, while the H.I.M. alliance is likely to massively boost its Japan-based business.

India, another huge population, isn’t in the plans right now because outbound travel numbers from the country are lower than the likes of Korea and Japan, Liu explained.

China may be a hugely challenging market, but Chen is convinced that there’s potential for travel products if they are presented and done right.

“We can provide very high-quality products. Young Chinese today expect high-quality travel services, not only those that are cheap. They once were price sensitive before but they are now more affluent,” he said.

Beyond more traditional travel services, KKDay’s most direct rival is Klook, a business that is predominantly focused on China. The Hong Kong-based startup has raised over $90 million, including a recent $60 million Series C round in October, from investors that include Goldman Sachs, Sequoia and Matrix Partners.

Klook said it clocked five million bookings in 2016 and its claims to process one million bookings per month. KKDay doesn’t provide booking numbers, but the service claims to host over 10,000 experiences from 500-plus cities in more than 80 countries.

Featured Image: Hamza Butt/Flickr (IMAGE HAS BEEN MODIFIED)