TechCrunch+

There’s no magic formula for creating a winning pitch deck, which is why most of the articles we run on this topic continually emphasize the fundamentals.

Venture capitalists are like judges at a gymnastics competition: Each pitch will be assessed for its technical quality and difficulty, but execution and artistry is just as important.

If your deck doesn’t give prospective investors a clear idea of how you will put their money to work, you might leave their office with a logo water bottle, but you are not going home with a term sheet.

Full TechCrunch+ articles are only available to members.
Use discount code TCPLUSROUNDUP to save 20% off a one- or two-year subscription.

Despite its simple purpose, the Ask slide is “almost universally a struggle to get right,” says Haje Jan Kamps, who reviews five reasons why founders frequently miss the mark:

Forgetting to include the slide altogether.
Not naming a specific dollar amount you are raising.
Including a valuation on the slide.
Omitting what the funds will be used for.
Listing a specific runway, i.e., “This will keep us running for 18 to 24 months.”

“The whole purpose of doing a fundraising process is to raise money, so you may as well go all-in with a clear ask,” writes Haje.

Thanks for reading,

Walter Thompson
Editorial Manager, TechCrunch+
@yourprotagonist

Twitter Space: Is tech media creating “charismatic” founders?

Larger-than-life entrepreneurs are nothing new, but tech has taken that to the next level, often with an assist from news media.

Today at 1:00 p.m. PT/4:00 p.m. ET, Builders VC investor Andrew Chen will join me in a Twitter Space to discuss the role tech reporting plays in shaping ecosystems, narratives and expectations.

This should be a lively conversation, so please bring your comments.

Hook your investors with the perfect summary slide

When it comes to the summary slide, founding teams must answer the question “why invest?” by briefly recapping the strongest points from their presentation.

Haje Jan Kamps has curated several summary slides that will “cement your company in time and place by helping investors figure out how much you are raising, what stage your business is in, and well, what the hell your company actually does.”

5 lessons we’ve learned from building a venture fund from scratch

Emerging managers are under unique pressure to show their prowess when it comes to picking winners, but raising a fund and making investments doesn’t offer instant gratification.

Eric Tarczynski, managing partner and founder of venture fund Contrary Capital, says the early days of his firm were occasionally humbling.

“I once had an LP ask, ‘Have you invested in any startups I’ve heard of?’” he writes in a post that shares some of what he’s learned while raising two funds over the last five years.

“Building a brand, credibility and a track record takes time,” he says. “We’re five years in, and it routinely feels like we’re just getting off the starting line.”

How to implement a video SEO strategy

For anyone who runs a website, “pivot to video” has become a sour joke.

If your startup is shaping up its video content strategy, a wholesale shift isn’t required: Instead, conduct a content audit to identify areas where interactive content can drive growth, such as testimonials, product announcements and webinars.

In a guide for first-timers, SEORadar creator Mark Munroe shares a checklist for preparing a video SEO strategy that boosts traffic and generates leads.

“Getting a sustained jump in web traffic is every SEO strategist’s dream, and video is [a] no-brainer way to do it,” writes Munroe.

3 methods for valuing pre-revenue novel AI startups

The Berkus Method, scorecard valuation and venture capital are the most commonly used frameworks for costing pre-revenue startups, but when it comes to AI, are traditional yardsticks still useful?

“AI can scale much faster than other technologies, so what works at the beta or minimum viable product stage may not work when an AI product scales to millions of users,” according to Ryan E. Long, principal attorney of Long & Associates.

Long identifies some of the limitations of using traditional means to value pre-money “prototype or novel AI startups” in an article that identifies regulatory issues and shares tactics designed to “minimize the number of uncertain variables.”

TechCrunch+ roundup: Summary slide showcase, video SEO strategy, how to value AI startups by Walter Thompson originally published on TechCrunch

If any HBO Max subscribers planned on having a “Westworld” marathon, this might be your last chance to watch your favorite android hosts run amok in the ol’ Wild West. The sci-fi series could soon be pulled off the streaming service, Deadline reported yesterday. Last month, Warner Bros. Discovery confirmed that “Westworld” was officially canceled, likely due to a decline in viewership.

WBD declined to comment on the Deadline report.

Many subscribers were unsurprised about the “Westworld” cancellation after the fourth season was considered a flop. However, it will still be disappointing if we lose access to all the seasons, especially the first two seasons—which had the most viewership. “Westworld” is among the most well-known HBO dramas, next to “Game of Thrones.”

Note that if the series is removed, it’s likely it’ll move to another platform, but nothing is confirmed. One potential new streaming home could be WBD’s free ad-supported streaming service, which CEO David Zaslav previously mentioned was in the company’s future plans.

To make things worse, HBO Max is also reported to be pulling “The Nevers” and “Love Life,” Deadline added. The publication noted that WBD has been looking over the HBO Max slate for its annual financial review and deciding which shows to cut.

Also, according to Variety, WBD recently canceled the series “Minx” after it had just been renewed for a second season. Lionsgate, which produced “Minx,” told Variety that it is “working closely to find a new opportunity for ‘Minx.’”

Unfortunately, viewers are used to the wave of cancellations under new CEO Zaslav. Ever since Discovery acquired WarnerMedia, the company has been turning over every stone it can to save costs. This includes cutting several shows and films. (So long, “Batgirl.”) More recently, reports are circulating that “Wonder Woman 3” is no longer happening.

In Q3 2022, the company missed Wall Street expectations, reporting a total revenue of $9.82 billion and a net loss of $2.4 million. Earlier this year, Zaslav promised shareholders that the company would shed$3 billion worth of costsover the next two years.

‘Westworld’ and other titles may soon be removed from HBO Max by Lauren Forristal originally published on TechCrunch

Apple is rolling out its iOS 16.2 update for all users today along with iPadOS 16.2 and macOS Ventura 13.1. The new version brings features like improved encryption for iCloud data, Live Activities on the home screen, and a Karaoke feature for Apple Music. Plus, Apple is also debuting its collaborative whiteboard app Freeform.

Here’s the list of all things you’ll get to experience with iOS 16.2.

End-to-end encryption for iCloud data

Historically, Apple has encrypted sensitive data like passwords while storing it in iCloud. Now, the company is launching end-to-end encryption for most data with a new Advanced Data Protection mode. Emails, contacts and calendar events aren’t end-to-end encrypted as those services are based on unencrypted standard protocols. If you activate Advanced Data Protection, it means that only you can access your device’s data by authenticating your identity on a trusted device like an iPhone or a Mac. If anyone else tries to decrypt the data — including Apple — they’ll likely find gibberish.

You shouldn’t confuse this with Lockdown mode, which prevents threats like government-grade spyware attacks on journalists, activists, and human rights defenders.

With this iOS 16.2 rollout, all U.S.-based users will be able to secure their data behind encryption. The company said that a wider rollout is expected next year. At this stage, the Advanced Data Protection mode will protect things like device and message backups, reminders, Safari Bookmarks, Notes, photos, and voice memos.

Apple Music karaoke mode

While Spotify Wrapped is a much sought-after year-end event, Apple Music’s karaoke mode could be a fun feature of house parties around the year. The feature, called Apple Sing, will be available to all users with iPhone 11 and above, along with iPad and Apple TV.

Apple uses a combination of enhanced real-time lyrics sync for karaoke and on-device machine learning for splitting vocals from the music track. It also separates and highlights background vocals for a better group experience. The company said that at launch, this feature will be available for the top 80% of its most-played songs with more tracks being added along the way.

For months, users have spotted Spotify’s own karaoke feature in testing. But the company never officially confirmed any rollout. Now that Apple Music has made this feature available to its users, the pressure will be on Spotify to launch it on its service.

Freeform app

Apple first introduced Freeform as a digital whiteboard for its own ecosystem during its Worldwide Developer Conference (WWDC) in June. Last month, we previewed the app, which was available through beta versions of iOS 16.2, iPadOS 16.2, and macOS 13.1.

The app is simple to use: it’s just an infinite board where you can draw objects and lines, insert media, attach documents or notes, and annotate on stuff. There’s also a collaborative element to it, but that requires everyone to use Apple devices.

Products in the digital whiteboard space are pretty valuable. Last month, Adobe acquired Figma for a whopping $20 billion. Earlier this year, Miro raised $400 million at a $17.5 billion valuation. While Apple is not vying for enterprise consumers or professional designers at the moment, it wants to grab the attention of casual tinkerers who might want to choose Freeform over other tools.

AirDrop limitation

Apple tweaked AirDrop settings in China with the iOS 16.1.1 update. If you configure AirDrop so that you get requests from “Everyone”, it is limited 10 minutes. Now, the company is enabling this feature to all users with the iOS 16.2 update. After 10 minutes, the setting for AirDrop falls back to “Contacts Only” and you will need to manually change it to “Everyone” each time.

Updates to Live Activities feature

Live Activities are lock screen and home screen widgets that can be updated with real-time info. They were rolled out with the iOS 16.1 update. With iOS 16.2, Apple is introducing Sports score updates through the Apple TV app. U.S. and Canada-based users will get access to scores for games from NBA, English Premier League, and MLB. Meanwhile, users in Australia, Brazil, Japan, Mexico, the U.K., and South Korea will get access to MLB scores via Live Activities.

Other stuff

iPhone users in India will be able to use 5G in eligible areas on the Reliance Jio network with this update.
The Weather app will have a dedicated news section to show you local news stories.
Apple is also adding home screen widgets for Sleep. These widgets inform you about recent sessions and stages. It also lets you quickly see your medication plan.

The iOS 16.2 update is rolling out to all users with iPhone 8 or above starting today.

Here are the top features of Apple’s iOS 16.2 update by Ivan Mehta originally published on TechCrunch

Fintech startup Checkout.com was in the news this morning because the Financial Times reported that the payment company had slashed its internal valuation to $11 billion. And it’s a huge drop compared to the $40 billion valuation that the company reached a little less than a year ago.

But that doesn’t necessarily mean what you think it means. In Checkout.com’s case, the company wasn’t in the process of raising a new funding round. Unlike Klarna’s down round, the new valuation wasn’t determined by a VC firm willing to invest in the company.

Checkout.com is building a full-stack payments company — it acts as a gateway, an acquirer, a risk engine and a payment processor. The company lets you process payments directly on your site or in your app, but you can also rely on hosted payment pages, create payment links, etc. It supports card payments, Apple Pay, Google Pay, PayPal, Alipay, bank transfers, SEPA direct debits and it also lets you issue payouts.

Let me take a step back first. It’s hard to determine how much a private company is worth. The post-money valuation has been used as a metric for startups to see how big they are compared to their direct competitors. If Big VC Firm is willing to invest $100 million for a 25% stake of a startup, the startup is now worth four times this investment, or $400 million — at least on paper.

But that metric is imperfect as companies don’t raise at the same time and the economic environment can drastically change from one year to another. And entrepreneurs tell me that January 2022 is very different from December 2022.

It has become much harder to close a new funding round. Entrepreneurs need to make some concessions. They sometimes accept to hand out a bigger chunk of their cap table for the same round size, which leads to… a lower valuation.

Some startups accept liquidation preferences and other investor-friendly clauses so that their valuation remains stable. In that case, the valuation becomes even more meaningless as VCs expect bigger returns than what they’re supposed to get on paper.

But valuations aren’t just big numbers for headlines. They also matter for employees who own stock options.

“We took advantage of the current conditions to update the tax valuation of the company. We decided to do that for our employees so that we can re-strike all the options that have been handed out recently and therefore create more upside potential for them — they will have to pay less for those options,” Checkout.com founder and CEO Guillaume Pousaz told me.

That reminds me of another payment company that also decided to lower its internal valuation. This summer, Stripe lowered its own valuation to around $74 billion from $95 billion.

In Stripe’s case, the company worked with third-parties to update its 409A valuation, which changes the value of employee stock options. It has implications when it comes to taxes as employees usually pay taxes on the difference between the price of their options and the new share value as defined by the new 409A valuation.

I asked Guillaume Pousaz if Checkout.com’s new valuation was similar to a 409A valuation update. “Yes, it’s like a 409A. It has to be produced by an accounting and auditing firm,” he told me.

There isn’t a lot of chatter about 409A valuations in the European startup community. And Checkout.com is a rare example of an internal valuation change. It could mean that some VC firms overpaid to invest in the fintech startup. It could also mean that tech companies are now valued at a lower revenue multiple compared to 2021.

But it doesn’t say much about the upcoming negotiations between VC firms that want to invest in Checkout.com and the startup’s executives. They will land on a different valuation. But that would require a new funding round, which doesn’t seem likely in the current landscape.

“We don’t need to raise money and there are no plans in that respect,” Pousaz said. “To be honest, we don’t have to raise again. Never say never, but unlike many fintech companies, we have a proven business model.”

Why Checkout‏‎.com lowered its internal valuation by Romain Dillet originally published on TechCrunch

Uber’s delivery business in Spain has settled with local labor unions which were challenging its dismissal of more than 4,000 riders in August last year ahead of a labor law reform coming into force — acknowledging the dismissed couriers as staff and agreeing to pay severance equivalent to 45 days’ salary per year worked (via Reuters).

In a statement emailed to TechCrunch, an Uber spokesperson said:

“This agreement with worker unions in Spain aims at compensating couriers who were not able to access our app following the introduction of the Rider Law in 2021. We have since then launched a new model in full compliance with the new local regulatory framework and remain open to dialogue with all relevant parties to continue to improve independent work for all.”

The ‘Riders Law’, as the 2021 Spanish labour law reform is known, was aimed at platforms perceived to be falsely classifying delivery couriers as self-employed — introducing a presumption of employment for those providing such services through digital platforms.

Uber’s decision to let go of thousands of couriers ahead of this change in their employment status was dubbed a de facto collective dismissal by unions FeSMC-UGT and CCOO-Servicios — who challenged its action before the National Court. The court initially dismissed the challenge but in a ruling in July the Supreme Court revoked the lower court’s decision, deciding that the unions could challenge the dismissal and triggering a retrial.

Uber appears to have settled to avoid this, as the retrial in the National Court was scheduled for today.

The unions said 4,404 couriers who were dismissed by Uber last year should receive compensation under the settlement.

“This is a historic agreement,” they write in a press release (which we’ve translated from Spanish). “For the first time a collective dismissal of delivery people has been recognized in court and guarantees the collection of compensation for each of those affected, in amounts that are better than those established in law.”

Delivery workers who are affected by the settlement should receive an email from Uber’s local delivery firm, which is called Portier Eats Spain, informing them of the agreement and the amount of compensation they should receive, per the unions.

In order to claim compensation due they need to reply within a month of receipt of the message, accepting the compensation and confirming their bank details for transferring the payment — which should be remitted within four months.

Affected couriers who no longer have access to the email address they previously used to communicate with Portier Eats Spain are instructed to contact FeSMC-UGT immediately by email — at plataformasdigitales@fesmcugt.org — in order for the union to manage the payment of their compensation.

Change of compliance gear

While Uber has agreed to recognize that these former couriers were employees, it has recently changed how it responds to Spain’s Riders Law.

An Uber spokesperson told us the company now operates two different models in Spain — one of which entails working with third party fleet partners who employ couriers directly. But it has also, since September, launched a tweaked model which enables couriers to remain independent (i.e. self employed) without — it claims –breaching the Rider Law.

Delivery platforms in Spain responded in a variety of ways to the change in the labor law last year — including pulling out of the market altogether (in the case of Deliveroo). Others claimed to have adapted their models, such as homegrown rival Glovo, which claimed it would take on some riders as staff but does not appear to have employed the vast majority of its couriers.

That led to some tension with Uber — which earlier this year penned an open letter accusing Glovo of flouting the labor reform and complaining it was unable to contract enough couriers to secure its service because so many were opting for ongoing ‘self-employment’ with Glovo.

Fast forward a few months and Uber has reworked its playbook to steer closer to Glovo’s.

That may not be the soundest compliance strategy, however, as the latter continues to face regulatory bumps on home turf — such as a $78M penalty it was hit with in September for employment law breaches attached to its employment classification of riders.

The company claimed that sanction pre-dated the entry into force of the Riders Law but fresh challenges to its tweaked model — and to Uber’s — are all but certain.

Zooming out, last year, European Union lawmakers proposed a bloc-wide reform aimed at improving conditions for workers on gig economy platforms — proposing legislation to bring in a rebuttable presumption of employment across EU Member States with the goal of enforcing minimum standards in areas like pay, conditions and social protections.

However the file — and the proposed legal presumption of employment for platform workers — has proved divisive, as Euractive reported recently, with divisions emerging between national delegations and no compromise position yet adopted by the Council.

Uber’s food delivery platform agrees to pay severance to couriers let go ahead of Spain’s Riders Law by Natasha Lomas originally published on TechCrunch

Back in June, I predicted that we would see an uptick in startups acquiring other startups this year. At the time, the venture market was souring and starting to show a divide between startups with years of cash on hand — companies that were also, often, overvalued — and those that were low on capital and would likely struggle to raise new funds.

Well, while I was technically not wrong — it is still 2022 for two more weeks — my prediction didn’t really pan out as I thought it would.

According to data from Crunchbase, as of December 13, 1,291 startups have been acquired by other venture-backed companies this year. This compares to 1,292 in 2021. So while this year is on track to see more transactions than last, it won’t be by a meaningful amount.

But a recent acquisition showed both why we haven’t seen much movement yet and why we expect to see significantly more activity heading into next year.

OK, now. Now we’re going to see more startups acquire other startups by Rebecca Szkutak originally published on TechCrunch

Netflix has announced that it’s adding two more games to its service today, bringing the total number of games on the platform to 48. The streaming service has also teased some upcoming games, including one that’s based on its historical drama “Vikings: Valhalla.”

The first game launching today is called Kentucky Route Zero and was developed by Cardboard Computer and published by Annapurna Interactive. The title is an adventure game about a secret highway running through the caves beneath Kentucky. The second game launching today is called Twelve Minutes and was developed by 24 Bit Games and published by Annapurna Interactive. The game sees players trying to escape a time-loop nightmare and features the voices of celebrities James McAvoy, Daisy Ridley and Willem Dafoe.

As for the upcoming titles, Netflix says the Vikings: Valhalla game will see players take their place as leaders of fierce Viking clans and build settlements and expand their influence across the continent. Netflix plans to launch the game in the first quarter of 2023.

Also launching next year is a new game called Teenage Mutant Ninja Turtles: Shredder’s Revenge. As described by Netflix, “players will be able to kick shell with Leonardo, Raphael, Donatello, Michelangelo or other familiar friends in this totally tubular ’80s-inspired beat ’em up.” The streaming service says players will find old-school gameplay enhanced with new fighting mechanics and discover adventures with a new story mode.

Netflix has noted that it’s still early days for its mobile gaming efforts, and new games can take years to build, which indicates that its long-term vision for mobile gaming goes far beyond the more casual gaming releases it has made available to subscriberssince launching Netflix Gamesin November 2021.

Data reported in August showed that 1.7 million users play Netflix games daily, which is less than 1% of its streaming subscriber base. Netflix is focused on increasing this number and establishing itself as a real player in the world of gaming. At TechCrunch Disrupt in October, Netflix VP of Gaming Mike Verdu revealed that Netflix was opening a new studio in Southern California and is also venturing into cloud gaming. Since then, Netflix has also acquired Spry Fox, a Seattle-based independent gaming studio focused on cozy games.

Netflix rolls out two more mobile games, will release a ‘Vikings: Valhalla’ game next year by Aisha Malik originally published on TechCrunch

Dataiku is the latest well-financed startup to suffer from macroeconomic headwinds, raising new capital at a significantly reduced valuation. The company today announced that it raised $200 million in a Series F round led by Wellington Management at a $3.7 billion valuation, down from the $4.6 billion valuation that Dataiku received in August 2021.

A filing with the U.S. Securities and Exchange Commission shows that Dataiku intends to close its Series F with as much as $275 million. The $200 million from Wellington bring the New York-based startup’s total raised to roughly $600 million.

In a statement, Wellington Management’s Matt Withelier said: “Dataiku’s proven track record, management team, growth trajectory, and customer roster, positions the company to scale AI to new heights. We are pleased to partner and contribute to their impressive journey. Dataiku has taken a leadership position helping enterprises put massive datasets to work at unprecedented speed and creating a culture of AI focused on delivering compounding business results.”

The bump in the road comes as something of a surprise. Dataiku — which sells tools to help customers build, test and deploy AI and analytics applications — has managed to avoid major layoffs, unlike competitors such as DataRobot. And earlier this year, Dataiku signaled to investors that it had no plans to reorient its growth strategy, revealing its annual recurring revenue for the first time ($150 million) and hiring a new chief financial officer — the first external addition to its C-suite.

The hiring of the new CFO, Adam Towns, fueled speculation that Dataiku was eying an IPO in the near term; Towns previously helped take Mimecast to the public market. But the announcement of the Series F suggests a listing may in fact be a ways off.

There’s signs VC investments in AI startups are cooling. A recent PitchBook report shows that deal value growth in AI startups was down 27.8% quarter over quarter in Q2 2022, with overall investments reaching $20.2 billion across 1,340 deals. Year to date, VCs have funneled $48.2 billion into AI startups across over 3,000 deals — which sounds healthy but actually represents a 20.9% year-over-year dip.

As per a press release, Dataiku’s customer base now stands at over 500 companies, including more than 150 of the world’s largest enterprises. They’re using the platform for use cases like predictive maintenance, supply chain optimization, quality control in engineering and marketing optimization, according to Dataiku co-founder and CEO Florian Douetteau.

“Enterprises overwhelmingly understand that now is the time to embrace AI — or risk falling behind,” Douetteau said in a statement. “Our ability to attract new, market leading investors, like Wellington, in this challenging environment underscores the strength of our solutions, our world-class team, and the tremendous opportunities ahead. We are on the cusp of a massive market transformation with AI at the heart of it — and we are ready to meet the moment.”

Dataiku, which launched in Paris in 2013, competes with a number of companies for dominance in the AI and big data analytics space. The more formidable rivals include Databricks, which raised $1.6 billion in August 2021, and the aforementioned DataRobot, which secured $300 at a $6.3 billion valuation in July 2021.

In recent years, Dataiku has sought to expand its pool of startup and small- and medium-sized business customers, introducing a fully managed version of its data science platform called Dataiku Online. Dataiku has also launched new tools that let companies design and deploy AI and analytics apps, turn raw data into advanced analytics and design machine learning models for use in their own apps and services.

AI and analytics platform Dataiku raises $200M at a reduced valuation by Kyle Wiggers originally published on TechCrunch

Out where delivery trucks and full-size cargo planes don’t make a lot of sense, drones proliferating — they may never deliver your burrito, but could soon be indispensable for transporting medicine and emergency supplies. Australian drone logistics company Swoop Aero is celebrating new milestones and funding as it plans its expansion to more markets.

Swoop has been providing transport and delivery of medical materials — medications as well as things like samples for labs — in south Malawi, DR Congo, and other locations for the last three years, and recently delivered its millionth item and completed its 20,000th flight.

This success has led to USAID awarding $1.5 million to Swoop, which will fuel in part the company’s expansion to the rest of the country. That’s on top of a just-announced $10 million addition — from latecomer Levitate Capital — to its $16 million Series B from earlier this year.

CEO Eric Peck told TechCrunch that the company formed when he, formerly an Air Force officer, met his co-founder, a roboticist, and they both wondered whether autonomous aircraft could actually find a role in today’s complex logistics world. Clearly the answer was yes, but the segment they found practical wasn’t the urban one.

“The misconception is we’re going to replace every truck and car – what it’s actually about is the integration of air transport into the logistics infrastructure that exists right now,” Peck said. For a typical delivery provider serving a wide area, “if we do their 30 hardest to reach locations, we can halve the road miles they have to do.”

They ended up designing and building their own aircraft from scratch: a medium-size electric UAV that can cruise up to 100 miles with a 10-pound payload, land vertically, and uses parts so easily swappable that it can be converted from a cargo to a scientific or rescue craft in a matter of minutes. They are also all powered by off-grid energy: solar and whatever else can be stood up at a given location.

Swoop’s strategy is to establish a ground presence and bring a number of aircraft online to serve a highly specific need. “If you’re the minister of a country, whether it’s Austrialia or Malawi, you say ‘we want to be able to do 300 high priority deliveries a month.’ We aim to hit a cost point, but also 10x the level of service provided. Like a hospital that gets a pickup once a month, we would do every day. It can have a huge impact,” said Peck.

Once they are in regular operation, the company can expand the fleet and diversity its customers and service. Turns out there’s plenty of latent demand for things like power line inspections, mapping and monitoring, wildfire tracking, and disaster response. Often something you must charter a helicopter flight for generally can be done for a tiny fraction of the price by a drone.

The company has learned as it grew: the aircraft itself has gone through five generations as they’ve observed them in use and received feedback from customers. And it’s not at all obvious how exactly one should go about building a state-of-the-art, renewable-energy-powered public-private partnership drone subsidiary in any country, let alone in a dozen of them across the globe.

“There’s a lot of learning to be done in how you actually deploy a drone logistics point. Capital has been focused on R&D, learning to deploy at scale, how to manufacture the aircraft at scale,” Peck explained.

What they’ve arrived at is about an 80/20 split between running their own networks and leasing the aircraft to other operators. They’ve learned to cut costs where necessary — landing zones are “typically a big QR code on the ground held down with sandbags” and being able to recharge and repurpose aircraft quickly and cheaply has been key, hence the modular build.

The company is now working with various partners, both private and government, to expand. Peck said they plan to raise a new $40 million round to build out ten new networks — including in the U.S., where regulations are tight. The plan will be to provide the tech to existing players (think UPS and specialty firms for medical transport, etc) first, but it’s clear that the needs of countries around the world are fundamentally similar.

Certainly a few states would be happy for the help with wildfire monitoring and infrastructure inspection. Hell, with great whites back in New England they might want to take advantage of Swoop’s shark patrol services.

Swoop Aero’s drones hit a million items delivered as the company raises for expansion by Devin Coldewey originally published on TechCrunch

The U.S. Midwest generates a lot of wealth and is home to myriad huge corporations. With corporations come pension funds, foundations and other collections of great wealth. One of the ways that those pots of cash are being invested is through venture capital, which means the money flows to the coasts — New York, Boston, Silicon Valley. For the past decade, Gener8tor has been working to shift that by spinning up accelerators in local communities that have money but are underserved in terms of startup support.

We spoke with the Gener8tor founders about why they are passionate about thinking about the startup ecosystem a little differently.

“One of the challenges we face that I don’t think is talked about enough is that much of the capital in Boston or Silicon Valley comes from pension funds and foundations based in our communities,” said Joe Kirgues, co-founder of Gener8tor. “These communities are taking their dollars and investing it elsewhere. And then bringing back pennies on the dollar to do charity in our communities. And it’s fueling a lot of the discrepancies we see in the country.”

Gener8tor has flown under the radar a little despite putting a lot of points on the board: It has been operating for more than a decade and has had 34 exits (including Pretty Litter, Curate, GrocerKey and Bright Cellars). More than 1,000 companies have cycled through its accelerator, and it was named 2022’s VC firm of the year by The International Trade Council. And yet, the name isn’t as well-known as other comparably sized accelerators.

Gener8tor has some impressive stats under its belt: 80% of its startups are outside of major tech hubs, and more than two-thirds of the companies in the accelerators are led by underrepresented founders. It’s a hell of an operation, too. Headquartered in Madison, Wisconsin, the accelerator has 147 full-time employees, accelerators in 41 locations across 22 states, and $1.3 billion in total funding deployed.

The company told me that 1,068 startups have graduated from one of its 104 annual accelerator programs, including:

Gener8tor investment accelerator is a standard cash-for-equity accelerator that has helped more than 200 companies raise more than $800 million.
Gener8tor gBETA is a free accelerator that accepts five startups into a seven-week program. More than 700 companies have gone through gBETA.
Gener8tor Skills is a partnership with Gener8tor, Microsoft and TechSpark that focuses on upskilling workers who want to train for roles in high-demand fields such as customer service or software development. The company said more than 1,000 people have gone through the program, with half securing new careers in the past 24 months.
The Gener8tor OnRamp Conference is a series of vertical-specific events, including education, insurance, agriculture, manufacturing, and healthcare.

As a business, the company claims to be doing just fine, too, showing some pretty impressive investment metrics:

I talked with the co-founders, Troy Vosseller and Joe Kirgues, to learn more about how it all hangs together and what it sees as the future of its operations.

“Both Joe and I were lawyers, and we met working on transactions together, both on the startup and the investor side. Joe and I hit it off, and shared the perspective that there was a lot of lacking efficiency for an entrepreneur to go from an idea to incorporating a business, growing that business, raising venture capital, so on and so forth,” Vosseller said. “We’re both admirers of the accelerator model, starting with Paul Graham and YC. Reading his original essays about the program provided a lot of inspiration. And it dawned on us that we could do that here in Wisconsin. Joe and I quit our jobs. We found a group of angel investors out of the Milwaukee area who share that same vision and passion. And we’ve been doing Gener8tor ever since then — that was 10 years ago.”

The team’s first program was in Milwaukee in 2012, and for a while they alternated running annual programs in Milwaukee and Madison. Work with startups, invest in startups, help them grow. Lather, rinse, repeat.

Although YC may have been the inspiration for Gener8tor, the duo tells me things were a little different a decade ago.

“I think there were more local accelerators between 2012 and 2014 than there are today. To some degree, there has been a sifting and winnowing. I think the same is playing out on the national scene. I think there’s been some coalescence around a handful of programs,” Vosseller explained. “We’re bumping into the likes Techstars, 500 Startups, MassChallenge and Alchemist, of course, but it’s a much smaller grouping than what it was 10 years ago.”

Both Kirgues and Vosseller are obviously passionate about driving local ecosystems forward.

“My joke is that when you write $20,000 checks to a bunch of 20-somethings and expect them to build a $100 million company from it, that’s what it’s like to be crazy, but not self-aware. Building a startup is a hard task in any market, but even more so in these nascent ecosystems. What we found is if you try to close the soft skill gap first — if you get the founders in the room with investors, and if you help them prepare for it — there’s just as many bright people born in a community as any other,” Kirgues said. “If you work on solving that problem, just on a one-to-one basis, you can get a lot further than then I think we realized at the time.”

The duo became hyper-focused on building up emerging ecosystems, starting with Madison and Milwaukee, and later broadening the approach to more and more cities.

Gener8tor is the biggest startup accelerator you’ve never heard of by Haje Jan Kamps originally published on TechCrunch