Longtime VC, and happy Miami transplant, David Blumberg has a new $225 million fund

Blumberg Capital, founded in 1991 by investor David Blumberg, has just closed its fifth early-stage venture fund with $225 million, a vehicle that Blumberg says was oversubscribed — he planned to raise $200 million — and that has already been used to invest in 16 startups around the world (the firm has small offices in San Francisco, New York, Tel Aviv and Miami, where Blumberg moved his family last year).

We caught up with him earlier this week to talk shop and he sounded almost ecstatic about the current market, which has evidently been good for returns, with Blumberg Capital’s biggest hits tied to Nutanix (it claims a 68x return), DoubleVerify (a 98x return at IPO in April, the firm says), Katapult (which went public via SPAC in July), Addepar (currently valued above $2 billion) and Braze (it submitted its S-1 in June).

We also talked a bit about his new life in Florida, which he was quick to note is “not a clone of Silicon Valley.” Not last, he told us why he thinks we’re in a “golden era of applying intelligence to every business,” from mining to the business of athletic performance.

More from our conversation, edited lightly for length and clarity, follows:

TC: What are you funding right now?

DB: Our last 30 to 40 deals have basically been about big data that’s been analyzed by artificial intelligence of some sort, then riding in a better wrapper of software process automation on rails of internet and mobility. Okay, that’s a lot of buzzwords.

TC: Yes.

DB: What I’m saying is that this ability to take raw information data that’s either been sitting around and not analyzed, or from new sources of data like sensors or social media or many other places, then analyze it and take it to all these businesses that have been there forever, is beginning to [have] incremental [impacts] that may sound small [but add up].

One of our [unannounced] companies applies AI to mining — lithium mining and gold and copper — so miners don’t waste their time before finding the richest vein of deposit. We partner with mining owners and we bring extra data that they don’t have access to — some is proprietary, some is public — and because we’re experts at the AI modeling of it, we can apply it to their geography and geology, and as part of the business model, we take part of the mine in return.

TC: So your fund now owns not just equity but part of a mine?

DB: This is evidently done a lot in what’s called E&P, exploration and production, in the oil and gas industry, and we’re just following a time-tested model, where some of the service providers put in value and take out a share. So as we see it, it aligns our interests and the better we do for them, the better they do.

TC: This fund is around the same size of your fourth fund, which closed with $207 million in 2017. How do you think about check sizes in this market?

DB: We write checks of $1 million to $6 million generally. We could go down a little bit for something in a seed where we can’t get more of a slice, but we like to have large ownership up front. We found that to have a fund return at least 3x — and our funds seem to be returning much more than that — [we need to be math-minded about things].

We have 36 companies in our portfolio typically, and 20% of them fail, 20% of them are our superstars and 60% are kind of medium. Of those superstars, six of them have to return $100 million each in a $200 million fund to make it a $600 million return, and to get six companies to [produce a] $100 million [for us] they have to reach a billion dollars in value, where we own 10% at the end.

TC You’re buying 10% and maintaining your pro rata or this is after being diluted over numerous rounds?

DB: It’s more like we want 15% to 20% of a company and it gets [diluted] down to 10%. And it’s been working. Some of our funds are way above that number.

TC: Are all four of your earlier funds in the black?

DB: Yes. I love to say this: We have never, ever lost money for our fund investors.

TC: You were among a handful of VCs who were cited quite a lot last year for hightailing it out of the Bay Area for Miami. One year into the move, how is it going?

DB: It is not a clone of Silicon Valley. They are different and add value each in their own way. But Florida is a great place for our family to be and I find for our business, it’s going to be great as well. I can be on the phone to Israel and New York without any time zone-related problems. Some of our companies are moving here, including one from Israel recently, one from San Francisco and one from Texas. A lot of our LPs are moving here or live here already. We can also get up and down to South America for distribution deals more easily.

If we need to get to California or New York, airplanes still work, too, so it hasn’t been a negative at all. I’m going to a JPMorgan event tonight for a bunch of tech founders where there should be 150 people.

TC: That sounds great, though how did you feel about summer in Miami?

DB: We were in France.

Pictured above, from left to right: Firm founder David Blumberg, managing director Yodfat Harel Buchris, COO Steve Gillan and managing director Bruce Taragin.

Inside GitLab’s IPO filing

While the technology and business world worked towards the weekend, developer operations (DevOps) firm GitLab filed to go public. Before we get into our time off, we need to pause, digest the company’s S-1 filing, and come to some early conclusions.

GitLab competes with GitHub, which Microsoft purchased for $7.5 billion back in 2018.

The company is notable for its long-held, remote-first stance, and for being more public with its metrics than most unicorns — for some time, GitLab had a November 18, 2020 IPO target in its public plans, to pick an example. We also knew when it crossed the $100 million recurring revenue threshold.

Considering GitLab’s more recent results, a narrowing operating loss in the last two quarters is good news for the company.

The company’s IPO has therefore been long expected. In its last primary transaction, GitLab raised $286 million at a post-money valuation of $2.75 billion, per Pitchbook data. The same information source also notes that GitLab executed a secondary transaction earlier this year worth $195 million, which gave the company a $6 billion valuation.

Let’s parse GitLab’s growth rate, its final pre-IPO scale, its SaaS metrics, and then ask if we think it can surpass its most recent private-market price. Sound good? Let’s rock.

The GitLab S-1

GitLab intends to list on the Nasdaq under the symbol “GTLB.” Its IPO filing lists a placeholder $100 million raise estimate, though that figure will change when the company sets an initial price range for its shares. Its fiscal year ends January 31, meaning that its quarters are offset from traditional calendar periods by a single month.

Let’s start with the big numbers.

In its fiscal year ended January 2020, GitLab posted revenues of $81.2 million, gross profit of $71.9 million, an operating loss of $128.4 million, and a modestly greater net loss of $130.7 million.

And in the year ended January 31, 2021, GitLab’s revenue rose roughly 87% to $152.2 million from a year earlier. The company’s gross profit rose around 86% to $133.7 million, and operating loss widened nearly 67% to $213.9 million. Its net loss totaled $192.2 million.

This paints a picture of a SaaS company growing quickly at scale, with essentially flat gross margins (88%). Growth has not been inexpensive either — GitLab spent more on sales and marketing than it generated in gross profit in the past two fiscal years.

Cameo launches Cameo Calls, a service for fans to video chat with celebs

If you really want to video chat tonight with William Hung of retro American Idol fame… got twenty bucks to spare? Yesterday, Cameo launched its Cameo Calls products, which lets fans video chat for up to 15 minutes one-on-one with their favorite influencers and celebrities. The talent sets the duration, time, and price of their call, which Cameo says averages around $31.

To book a call, users can go to Cameo’s website or app to see a schedule of upcoming Cameo Calls that they can buy. These also appear on individual talent’s Cameo pages. When you purchase a Cameo Call, you get a unique ticket code that you enter on the app to join your call.

In June 2020, Cameo enabled users to book Zoom calls with celebrities as lockdown became a global norm, but Cameo phased out that feature in April. Instead, Cameo Calls now offers a native experience in the app, rather than relying on third-party software. The downside for consumers, though, is that this makes it more difficult to invite your favorite reality star to your office’s Zoom happy hour. But on the bright side, the Cameo Calls includes a dedicated photo op at the end of the call, so you can get your celebrity selfie without dealing with the awkwardness of asking to take a photo.

Experiences like Cameo Calls make sense in light of the COVID-19 pandemic, when celebrity meet-and-greets might not be safe in many places. But Cameo also thinks this product can stand in for a typical meet and greet even in “normal” times. Often, celebrity meet-and-greets require waiting in a long line to only have 5 or 10 seconds of time with the talent. Even though many Cameo Calls sessions are only a few minutes long, you might be able to get a more personal experience than if you were the 100th fan in a long in-person line.

“We foresee Cameo Calls replacing meet and greets at music festivals and world tours, fan conventions, sporting events, and more,” said Cameo co-founder & CEO Steven Galanis.

Cameo says it tested this product with over 3,000 calls — talent-hosted themed meet-and-greets, coffee chats, private concerts and tarot card readings. Some performers who tested the feature include James and Oliver Phelps, who played the Weasley twins in the Harry Potter movies, and David Henrie, a former Disney Channel star.

Zoom looks beyond video conferencing as triple-digit 2020 growth begins to slow

It’s been a heady 12-18 months for Zoom, the decade-old company that experienced monster 2020 growth and more recently, a mega acquisition with the $14.7 billion Five9 deal in July. That addition is part of a broader strategy the company has been undertaking the last couple of years to move beyond its core video conferencing market into adjacencies like phone, meeting management and messaging, among other things. Here’s a closer look at how the plan is unfolding.

As the pandemic took hold in March 2020, everyone from businesses to schools to doctors and and places of worship moved online. As they did, Zoom video conferencing became central to this cultural shift and the revenue began pouring in, ushering in a period of sustained triple-digit growth for the company that only recently abated.

OpenSea released an app — but it’s for browsing, not buying and selling

It’s a big day for the Amazon of the decentralized internet — OpenSea now has an app for iOS and Android. For most companies, having a mobile app is a milestone you’d reach before hitting a $1.5 billion valuation. But like any store — whether you’re selling NFT art or not — there’s a hefty price to pay for app store transactions, whether you’re on Android or iOS. That’s possibly why OpenSea’s shiny, new app is only for browsing NFTs, not for buying or selling them. For context, OpenSea saw $3.4 billion in trading volume across two million transactions in August. With Apple and Google taking 30% of in-app transactions, if that volume had been traded on the new app… what’s 30% of $3.4 billion?

Perhaps more of a roadblock, there’s still no way to make in-app payments with crypto. If OpenSea wanted to support buying and selling, it would have to build out its infrastructure for USD payments and push more users toward it. But part of the appeal of OpenSea is that it’s a crypto-native platform, largely reliant on the Ethereum blockchain, which gives people easier access to information about when an NFT was minted, who minted it, how it’s been traded, etc. It could upset the existing ecosystem of users if the startup pushed the platform toward being more dollar-friendly.

On the OpenSea app, users can connect their profile, browse NFTs, favorite NFTs, search and filter NFTs and view collection and item stats. When you view an NFT in the app, a button appears that lets you share the NFT outside of the app. Rarible, another NFT marketplace, released a mobile app about a month ago. Like OpenSea’s app, on the Rarible app, you can only browse NFTs, not buy, sell or trade them.

Image Credits: OpenSea

OpenSea hasn’t yet responded to questions from TechCrunch about the company’s plans for the app, including whether or not users might one day be able to buy and sell NFTs in the app. It wouldn’t be the first time that crypto was exchanged on an app, as even PayPal now lets you pay with crypto. Instead, perhaps the app can offer a way to help new users onboard into the NFT space, giving them an easy, user-friendly way to browse NFT art without knowing anything about wallets or blockchains or apes.

This app was unveiled just days after an OpenSea executive was accused of trading NFTs on insider information. The company announced on its blog Wednesday that the employee has since resigned.

Demand Curve: How to get social proof that grows your startup

Nick Costelloe
Contributor

Nick writes actionable growth marketing insights as head of content at Demand Curve.

When people are uncertain, they look to others for behavioral guidance. This is called social proof, which is a physiological effect that influences your decisions every day, whether you know it or not.

At Demand Curve and through our agency Bell Curve, we’ve helped over 1,000 startups improve their ability to convert cold traffic into repeat customers. We’ve found that effectively using social proof can lead to up to 400% improvement in conversion.

This post shares exactly how to collect and use social proof to help grow your SaaS, e-commerce, or B2B startup.

Surprisingly, we’ve actually seen negative reviews help improve conversion rates. Why? Because they help set customer expectations.

How businesses use social proof

Have you ever stopped to check out a restaurant because it had a large line of people out front? That wasn’t by chance.

It’s common for restaurants to limit the size of their reception area. This forces people to wait outside, and the line signals to people walking past that the restaurant is so good it’s worth waiting for.

But for Internet-based businesses, social proof looks a bit different. Instead of people lining up outside your storefront, you’re going to need to create social proof that resonates with your target customers — they’ll be looking for different clues to signal whether doing business with your company is “normal” or “acceptable” behavior.

Social proof for B2B

People love to compare themselves to others, and this is especially true when it comes to the customers of B2B businesses. If your competitor is able to get a contract with a company that you’ve been nurturing for months, you’d be upset (and want to know how they did it).

Therefore, B2B social proof is most effective when you display the logos of companies you do business with. This signals to people checking out your website that other businesses trust you to deliver on your offer. The more noteworthy or respected the logos on your site, the stronger the influence will be.

Social proof for SaaS

Depending on the type of SaaS product or service you’re selling, you’ll either be selling to an individual or to a business. The strategy remains the same, but the channels will vary slightly.

The most effective way to generate social proof for SaaS products is through positive reviews from trusted sources. For consumer SaaS, that will be through influential bloggers and YouTubers speaking highly of your product. For B2B SaaS, it will be through positive ratings on review sites like G2 or Capterra. Proudly display these testimonials on your site.

Social proof for e-commerce brands

E-commerce brands will typically sell directly to an individual through ads, but because anyone can purchase an ad, you’re going to need to signal trust in other ways. The most common way we see e-commerce brands building social proof is by nurturing an organic social media following on Instagram or TikTok.

This signals to new customers that you’ve gotten the seal of approval from others like them. Having an audience also allows you to showcase user-generated content from your existing customers.

How to collect social proof

There are five avenues startups can tap to collect social proof:

  1. Product reviews
  2. Testimonials
  3. Public relations and earned media
  4. Influencers
  5. Social media and community

Here are a few tactics we’ve used to help startups build social proof.

TechCrunch Disrupt kicks off in just a few days

The final countdown to TechCrunch Disrupt 2021 is on, folks and we cannot be more excited to get this party started. In a just a few days — on September 21-23 — we spotlight the people who envision the future and push beyond what exists to create what will be.

It may sound high falutin’, but when you’re talking biotech, synthetic DNA and space entrepreneurs, we can make room for a little poetic license, amirite?

Here’s the deal: TC Disrupt 2021 is packed with experts, events, advice and opportunity. If you want to get amongst it, buy a pass before Monday for less than $100.

You know about the big marquee events, right? Iconic founders on the main stage — like Duo Lingo CEO Luis von Ahn and celebrity-slash-entrepreneur Seth Rogen. Always a huge draw, Startup Battlefield features 20 top early-stage founders pitching their hearts out for $100,000.

All of it’s awesome (not-so-humble brag), but we want to make sure you know about some of the other Disrupt happenings that can help you build your business — and have some fun while you’re at it. Ready? Let’s begin.

Jump start your networking at our 30-minute Meet-and-Greet Sessions on Monday September 21 — the day before Disrupt officially begins. Choose from a series of 10 sessions — 30-minutes long, each with a specific demographic focus — scheduled to take place on our CrunchMatch platform between 12:30 pm – 5:30 pm (PT).

Download your Disrupt Passport card, complete one row of five experiences at Disrupt — meet a sponsor, attend a breakout session, etc. — and submit your card with proof of participation for a chance to win one of three certifiably cool prizes.

Tune in to one of the many Startup Alley Crawls to meet and learn more about the early-stage founders exhibiting in Startup Alley. Each business category gets its own hour-long crawl, and Team TechCrunch will interview select startups in each category live from the main stage.

Go to one (or all) of the many Startup Pitch Feedback Sessions scheduled over the three days of Disrupt. Every Startup Alley exhibitor gets to pitch to a savvy TC staffer. You can learn a lot by watching other founders pitch and hearing experienced advice. You might just walk away with ideas to improve your own elevator pitch. Oh, and check out the presentation called Crafting a Pitch Deck that Can’t Be Ignored for tips on bullet-proofing your pitch deck.

Confused about crypto? Muddled over metaverse? Serious about SPAC? You’ll find sessions addressing all of these deep topics — along with more than 80 other presentations and breakout sessions spanning all tech sectors — in the Disrupt 2021 agenda.

TechCrunch Disrupt 2021 takes place September 21-23 — mere days away. Buy your pass, explore the events, learn about new trends and technologies and discover opportunities to help you envision and build your future.

Gillmor Gang: Off the Wall

Most of us count the golden age of Michael Jackson’s career with the Quincy Jones produced global smashes of Thriller and Bad. Fueled by the stream of videos and multi-single releases (5 on Bad), the records dominated the charts, radio, and MTV. But the real breakthrough came just before with Jackson’s first solo record Off the Wall.

Born in the thrall of the Disco Era, it wasn’t hip, a surrender to the feel of funk meets MGM. But in the mountains around Woodstock, we couldn’t pry this record off the turntable. Today, with a simple voice command to Siri, the mists evaporate and with them the pandemic, working, working, working day and night, the melting years. And the bass. My God but it drives us to Living Life off the wall.

Permission is what we’re given. We need it. No matter what lies in store for us, the grooves capture the essence of our future, unlock our hopes and dreams, our intuition. Can we dare to think this way, the blend of vocals, horns, percussion, and the coursing basses? A Stevie Wonder track recharges the battery. The record fades out quietly, priming the pump for Side One.

Today we lost a nightclub comedian, as Norm MacDonald called himself in a YouTube clip. Like the best of them, his comedy spooled out of him like a 50’s cop show, methodical and faux stupid. You could see his genius in the faces of the funny people who had him on their shows — Letterman, Leno, Conan, an agonizingly hilarious Dennis Miller on his foul-mouthed HBO cable show. Talk about off the wall.

Miller defined this most selfish of dark arts, the joy of being funnier in the presence of funny. In a time of excruciating not funny, these strange warriors tilt with the vagaries of the laugh. MacDonald’s careful construction of his sleight of word was all the richer for his seemingly aimless pursuit of the sweet spot, where the punchline is so McGuffin-like for its inevitability.

As the world slowly recovers its focus, Apple has released a new iPhone that can adjust reality after the fact, Knowing this feat is not possible to recover what and who we’ve lost, I’m so grateful for the time we’ve had with these greats and their great moments. When the traveler reached the top of the mountain and asked the wise man for the secret of life, he replied, “Could you give me a sec, I’m on the phone.”

the latest Gillmor Gang Newsletter

__________________

The Gillmor Gang — Frank Radice, Michael Markman, Keith Teare, Denis Pombriant, Brent Leary and Steve Gillmor. Recorded live Friday, August 27, 2021.

Produced and directed by Tina Chase Gillmor @tinagillmor

@fradice, @mickeleh, @denispombriant, @kteare, @brentleary, @stevegillmor, @gillmorgang

Subscribe to the new Gillmor Gang Newsletter and join the backchannel here on Telegram.

The Gillmor Gang on Facebook … and here’s our sister show G3 on Facebook.

Vietnam-based CoderSchool gets $2.6M pre-Series A to scale online course platform

CoderSchool, a Ho Chi Minh City, Vietnam-based online coding school startup, announced today $2.6 million in pre-Series A funding to scale up its online coding school platform.

This round was led by Monk’s Hill Ventures, with participation from returning seed investors Iterative, XA Network and iSeed Ventures. CoderSchool raised a seed round led by TRIVE Ventures in 2018.

CoderSchool will use the funding to accelerate its online teaching platform growth and technology infrastructure expansion for the company’s technical education programs that guarantee employment upon graduation.

The company, founded in 2015 by Charles Lee and Harley Trung, who previously worked as software engineers, pivoted from offline to online in early 2020 to bring high-quality technical training to everyone, everywhere. After switching to a fully online learning program, the company recorded 100% quarter-over-quarter (QoQ) growth in fully online enrollment, it said in a statement.

“Coding is the future. At CoderSchool, we believe everyone in Southeast Asia deserves a chance to be part of that future,” the company co-founder and CEO Lee said.

In Vietnam, the demand for IT talent is dramatically increasing by 47% a year, while supply is only increasing by 8% year-on-year.

“The need for strong engineers and developers in Southeast Asia has never been as pertinent as it is today with the growth of tech companies and digital businesses,” said Michele Daoud, partner of Monk’s Hill Ventures. “We have been impressed by the team’s focus on setting the standard for coding education in the region. We are excited to partner with CoderSchool to provide both opportunity and access to the millions of aspiring students in Vietnam.”

Given the strong engineer demand in Vietnam, the domestic market size is estimated between $100 million – $200 million, and still increasing every year, according to Lee. CoderSchool has been focusing on Vietnam for the last six years, but plans to enter the global market following the next round, Lee said, without providing exact timetable.

CoderSchool, which offers full-stack web development, machine learning and data sciences courses at a lower cost, has trained more than 2,000 alumni up to date, and recorded over 80% job placement rate for full-time graduates, getting jobs at companies such as BOSCHE, Microsoft, Lazada, Shopee, FE Credit, FPT Software, Sendo, Tiki and Momo.

“After having taught over 2,000 students, we’ve been able to refine our [coding education] content. We rewrote our full-stack web development course — from Ruby, Phyton to JavaScript — in two years, and added new machine learning and data science courses to our program,” Lee told TechCrunch.

CorderSchool’s online program enables students to interact with instructors and classmates before, during and after scheduled class sessions with its human-driven learning strategy. CoderSchool currently has 15 instructional staff, and plans to hire 35 additional instructors by Q4 2022.

CoderSchool’s data analytics has improved individual student performance while also allowing CoderSchool to increase its classroom size at scale, reaching a peak of 107 enrollments in a data science class.

TikTok is hiding a viral challenge that has kids stealing their school’s soap dispensers

It’s back to school season and on TikTok, that means students are inexplicably stealing everything that isn’t bolted down.

The latest TikTok trend to generally wreak social havoc sees students pulling off “devious licks” — small-scale heists of everything from soap dispensers, Covid test kits and hand sanitizer to high value items like classroom tech.

The videos are set to an edited version of Lil B’s “Ski Ski BasedGod,” which had appeared in around 100,000 videos on TikTok by Monday, according to Mashable, with the tag #deviouslick collecting more than 175 million views.

TikTok cracked down on Wednesday, limiting search results for the viral stunt, removing videos with the tag and encouraging users to “please be kind” to teachers.

We expect our community to create responsibly – online and IRL. We're removing content and redirecting hashtags & search results to our Community Guidelines to discourage such behavior. Please be kind to your schools & teachers. pic.twitter.com/mIFtsYwFRb

— TikTokComms (@TikTokComms) September 15, 2021

“We expect our community to stay safe and create responsibly, and we do not allow content that promotes or enables criminal activities,” a TikTok spokesperson told TechCrunch. “We are removing this content and redirecting hashtags and search results to our Community Guidelines to discourage such behavior.”

While it’s hard to know which videos are staged and which are legitimate, the trend is real enough to have teachers and parents across the country stressed out. At a middle school in Las Vegas, school administrators report students swiping speed limit signs, fire alarms, soap dispensers and classroom projectors. And in Portland, Oregon at least one high school saw an entire building’s worth of soap dispensers go missing — not a great start to another school year in the throes of a global pandemic.

Inspiration4 crew, meet outer space: SpaceX’s first all-civilian mission launches to orbit

The first all-civilian crew in history has made it to space.

The Inspiration4 crew took off from NASA’s Kennedy Space Center in Florida at 8:04 EST PM, commencing the first space mission in human history featuring zero trained astronauts.

The reusable first-stage of the Falcon 9 rocket executed two burns in its journey back to Earth, landing vertically on the SpaceX droneship “Just Read the Instructions” around 9-and-a-half minutes after launch. Dragon separated from the second stage at 8:16 EST PM.

Second stage separation. Image Credits: SpaceX (opens in a new window)

The four-person crew will be spending time in orbit in a SpaceX Crew Dragon capsule, which was affixed to a Falcon 9 rocket. (It’s the second journey for this particular Dragon and the third journey for the Falcon 9 first stage.) They’ll ascend to an altitude of around 575 kilometers – the highest that any humans have gone since the last Hubble telescope servicing mission in 2009. That altitude is above the current orbit of the Hubble and the International Space Station, so they’ll be flying over every other human in space, too.

The crew will be going around the earth around 15 times each day they’re in space. While they’re up there, they’ll be able to view outer space from a transparent observation dome “cupola” that was affixed to Crew Dragon’s the nose cone especially for this flight. It’s the largest continuous window to ever be in space. It won’t all be space tourism, however; the Inspiration4 is also ferrying a number of science experiments to orbit, including research to learn more about the impact of spaceflight on the human body. The research subjects will be themselves: the crew collect biomedical data and biological samples from themselves before, during and after the flight.

Nowadays, no private space mission is complete without a requisite billionaire, and Inspiration4 has one of those, too: the mission commander and man who fronted the bill, Jared Isaacman, who earned his fortune from his payment processing company Shift4 Payments. It must be said, however, that the remaining crew members, while clearly extremely talented and uncommonly brave, are refreshingly normal. They include physician assistant Hayley Arceneaux; geoscientist and science education doctorate Sian Proctor; and Lockheed Martin engineer Chris Sembroski.

The Inspiration4 crew admiring the Falcon 9 rocket on Launch Pad 39A. Image Credits: SpaceX (opens in a new window)

The mission will be raising money for St. Jude Research Hospital (Sembroski was selected from nearly 72,000 donations to the St. Jude fundraising campaign). The crew aimed to raise $200 million in total; $100 million was donated by Isaacman and the mission far exceeded its goal prior to launch, hitting nearly $300 million at the time of launch.

To prepare for the mission, which is significantly longer than any other recent spaceflight featuring civilians, the crew undertook hundreds of hours of training, including 12- and 30-hour flight simulations in a replica Dragon capsule and climbing Washington State’s Mount Rainier in May.

SpaceX CEO Elon Musk was at Kennedy Space Center to see the crew off, and in true Muskian style the crew also travelled to the launch tower in two Model Xs (wearing custom SpaceX spacesuits). While NASA’s involvement in the mission was relatively nominal, beyond providing some services and equipment worth around $1 million, the agency has played a key role in bringing SpaceX to the place of supremacy it is today. SpaceX was awarded $2.6 billion from NASA in 2014 to develop Crew Dragon, under its Commercial Crew program.

It’s a major milestone for SpaceX, the largest and most profitable launch company in the world. This launch is also notably different than those undertaken by Jeff Bezos and Richard Branson in recent months – though I know the similarities are compelling – because the crew will be going higher and for longer than the Blue Origin or Virgin Galactic missions. But all three companies have a goal of making spaceflight “evolve toward an airline-like model,” as SpaceX senior director of human spaceflight Benji Reed put it yesterday.

“Ultimately, we want to we want to make life multiplanetary, and that means putting millions of people in space,” he said. “The long-term vision is that spaceflight becomes airline-like like you buy a ticket and you go.”

Even this year, SpaceX will be conducting more crewed missions (though none with an all-civilian crew). A Falcon 9 will be ferrying astronauts to ISS later this year, and at the beginning of next year will be the first commercial Axiom mission, also to the space station. “The Dragon manifest is getting busier by the moment,” he added.

If all goes as planned, we’ll be seeing the Inspiration4 crew in three days, when they’ll splash down back to Earth in either the Gulf or the Atlantic Ocean off the coast of Florida. Weather is critical here, too: “We look at not only the launch weather but we have to look at the return weather […] when we come home in just three or four days from now,” Reed explained during a starry-eyed (no pun intended) press briefing Tuesday.

While the crew is in orbit, you can listen to a curated playlist by Inspiration4’s very own Sembroski (who plans to play a ukulele in space).

Watch SpaceX launch the first all-civilian Inspiration4 mission to space live

After months of publicity, an NFT auction and even a Netflix docuseries, it’s finally here: the four-person crew of Inspiration4 will be heading to space today (weather permitting).

What makes this launch different from any that came before it? None of the four people onboard are astronauts. The mission marks the first time that an all-civilian crew will fly to space. Let’s meet them:

  • Jared Isaacman, a 38-year-old billionaire whose fortune comes from the payment processing company Shift4 Payments, which went public in the summer of last year. He is the mission commander.
  • Sian Proctor, a community college professor with a PhD in science education. Proctor was among 47 finalists chosen by NASA for a 2009 astronaut class, though she was not one of the nine eventually chosen to join the agency. She will be Inspiration4’s pilot, the first Black woman to pilot a spacecraft. She’s 51.
  • Hayley Arceneaux, a 29-year-old physician assistant at St. Jude’s Research Hospital and a survivor of childhood cancer. She’ll be the crew’s health officer.
  • Christopher Sembroski, a data engineer for Lockheed Martin, also a former camp counselor at none other than Space Camp. The 42-year-old will be acting as mission specialist.

The crew will be cruising to orbit inside a SpaceX Crew Dragon capsule, which will launch from a Falcon 9 rocket. They’ll spend three days flying around the Earth before splashing down in the Atlantic Ocean off the coast of Florida.

SpaceX’s YouTube channel is hosting a live launch webcast starting from 3:45 PM EST, with the five-hour launch window opening at 8:02 PM EST. As of Sunday, Inspiration4 said weather conditions at Kennedy Space Center looked 70% favorable. There’s also a back-up launch window opening at the same time the following day.

Goldman says $2.2B purchase of BNPL provider GreenSky will help expand Marcus

This morning, Goldman Sachs announced plans to acquire B2B2C lender GreenSky in a deal worth $2.24 billion. The acquisition, which is still subject to regulatory approval and is expected to close in the fourth quarter of 2020 or the first quarter of 2021, is positioned to bolster the firm’s consumer business and offer new products and new ways to attract consumers to its Marcus by Goldman Sachs brand of finance products.

Goldman launched Marcus five years ago as a consumer-focused brand in part to compete with a growing set of fintech startups, neobanks, and online trading platforms that have sprung up over the last decade. While it has attracted 8 million users since launch — putting it ahead of many so-called challenger banks — Marcus still trails Chime and Robinhood among banking and trading apps (at least among number of users).

But with the purchase of GreenSky, it’s hoping to add another way to pull consumers into its Marcus funnel.

GreenSky operates a platform that facilitates loans for big-ticket items like home improvement projects or elective dental or medical procedures. It enables brands like Home Depot, as well as medical and dental practices, to offer installment loans to customers at the point of sale, thereby increasing sales and conversions for its clients. GreenSky then sells off those loans to a number of banks and other lending partners.

The deal could be seen as a way for Goldman to buy its way into the “buy now, pay later” trend, offering Marcus users additional ways to finance their purchases. That market has taken off lately, as evidenced by Square’s acquisition of Afterpay, PayPal’s acquisition of Paidy, and Amazon striking a deal to offer BNPL financing through Affirm.

But according to Stephanie Cohen, the global co-head of Consumer & Wealth Management at Goldman Sachs, the acquisition is as much about bringing GreenSky’s customers into the Marcus ecosystem. She also believes that by bringing GreenSky into Goldman Sachs and lending off its balance sheet, there’s no limit to the scale at which it can grow.

That said, don’t expect Goldman or Marcus to begin offering BNPL lending for everyday shopping anytime soon, as Cohen says GreenSky is attractive in part due to the big-ticket nature of home improvement lending.

To learn more about the firm’s plans, we spoke with Cohen about the deal and asked how GreenSky fits in with Marcus and the rest of Goldman’s business. The full interview, slightly edited for length and clarity, is below.

Daily Crunch: SpaceX set to launch 4 civilians into orbit for 3-day mission

To get a roundup of TechCrunch’s biggest and most important stories delivered to your inbox every day at 3 p.m. PDT, subscribe here.

Hello and welcome to Daily Crunch for September 15, 2021. Today we have everything in the newsletter. Bad behavior in the crypto world? Yep. Why the Mailchimp deal might make good sense? You bet.

But before we get into the mix, a few TechCrunch notes. First, Jordan Crook’s regular series of streamed chats with investors and founders is now called TechCrunch Live. And Chamath Palihapitiya is coming to Disrupt. Which is in less than a week!

Oh, and as you are reading this, SpaceX’s first “all-civilian crew” may be taking off into space. In case you wanted to tune in. — Alex

The TechCrunch Top 3

  • Today in bad actors: Want to know if you are living in overheated times? Check for a rise in fraud and related bad behavior. And oh boy has there been news in the last day. Startup App Annie will pay $10 million in SEC fines for securities fraud. Which is Not Good. And NFT marketplace OpenSea ate a buffet of crow earlier today when it admitted that an executive at the concern was front-running NFT sales. ?
  • Maybe the Intuit-Mailchimp deal is not dumb? Sure, TechCrunch’s first reaction to the news that TurboTax parent company Intuit wants to spend $12 billion on Mailchimp was skeptical. But Ron Miller hit up a bunch of smart folks, and there was more positive sentiment to be recorded than we might have guessed.
  • Tech companies are still going public: We’re waiting for Toast and Freshworks and Warby Parker to get their debuts launched, but other companies aren’t waiting for a clear news cycle. Secondary share marketplace Forge is going public via a SPAC, so we had to take a look.

Startups/VC

First things first, more news from the BNPL beat. Yes, the method of paying for a transaction in installments is still making news. This time it’s Ascend raising $5.5 million to bring BNPL services to the commercial insurance world. Recent liquidity in the fintech market could help drive fresh venture interest in coming quarters.

  • Sendcloud raises $177M for SaaS: No, not that SaaS. Shipping as a service, in Sendcloud’s space. The Dutch startup now flush with SoftBank cash “has built a service [that provides] a cloud-based platform to easily organize and carry out shipping services by choosing from a wide range of carriers and other options.” It sounds a bit like a European Shippo?
  • Rivian proves it’s not vaporware: After raising dump trucks worth of capital, Rivian’s first production R1T electric pickup has rolled off the line. It’s a big moment for the company and sets Rivian apart from a host of other EV companies that hope to match its new milestone. Also apparently there is a color called Rivian Blue, and I am here for it.
  • Clubhouse hires head of news: NPR vet Nina Gregory has taken on the role of Clubhouse’s head of News and Media Publishers, TechCrunch reports. Her role will be to work with both the social platform and news orgs. Perhaps her job would be a smidgen easier if Clubhouse backer a16z wasn’t so antagonistic toward the media. But, hey, the hire still makes good sense.
  • Speaking of news, SmartNews is now worth $2 billion: Sure, media is a trash business — mostly — but perhaps media aggregation is the golden ticket. Investors just put $230 million into news aggregator SmartNews, giving it a shiny new valuation. I have a soft spot for SmartNews as we partnered with them back in the Crunchbase News days, but past that, I am impressed and curious how it is going to generate the revenue needed to surpass its new price tag.
  • Airbase further differentiates itself from Brex, Ramp: The corporate spend wars are good fun because there are a number of startups in the space that are growing quickly, raising money and making deals. And they are increasingly carving up their market. Airbase just built some new capabilities that may help it attack larger customers than what some of its rivals appear to have their eyes on.
  • Finally today, Inspired Capital has raised a second fund just two years after its first.

5 things you need to win your first customer

Congratulations on shipping your product, but how much do you know about your target customers?

Companies that haven’t created an ideal customer profile and performed a SWOT analysis are making big bets on guesswork and intuition. Sometimes that works out, but more frequently, it leads to tears.

In a guest post that walks readers through the fundamentals of creating customer personals that map to your company’s goals, Grammarly product marketing lead Bryan Dsouza shares five basic requirements for customer acquisition.

“Understanding and executing on these things can guarantee you that first customer win, provided you do them well and with sincerity,” he says. “Your investors will also see the fruits of your labor and be comforted knowing their dollars are at good work.”

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Big Tech Inc.

Want some government news? Yes, you do. Trust me. This stuff matters:

TechCrunch Experts: Growth Marketing

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TechCrunch wants to help startups find the right expert for their needs. To do this, we’re building a shortlist of the top growth marketers. We’ve received great recommendations for growth marketers in the startup industry since we launched our survey.

We’re excited to read more responses as they come in! Fill out the survey here.

Our editorial coverage about growth marketing includes articles from the TechCrunch team, guest columns and posts like “In growth marketing, signal determines success” by Jonathan Martinez.

Community

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Join Danny Crichton, tomorrow Thursday, September 16, at 3 p.m. PDT/6 p.m. EDT on Twitter Spaces. Danny will be joined by Martin Ford, author of “Rule of the Robots: How Artificial Intelligence Will Transform Everything.” Make sure you’re following the TechCrunch Twitter account to stay up to date with our news and events.

The responsibilities of AI-first investors

Ash Fontana
Contributor

Ash Fontana, a managing director at Zetta Ventures, is the author of “The AI-First Company: How to Compete and Win with Artificial Intelligence.”
More posts by this contributor

Investors in AI-first technology companies serving the defense industry, such as Palantir, Primer and Anduril, are doing well. Anduril, for one, reached a valuation of over $4 billion in less than four years. Many other companies that build general-purpose, AI-first technologies — such as image labeling — receive large (undisclosed) portions of their revenue from the defense industry.

Investors in AI-first technology companies that aren’t even intended to serve the defense industry often find that these firms eventually (and sometimes inadvertently) help other powerful institutions, such as police forces, municipal agencies and media companies, prosecute their duties.

Most do a lot of good work, such as DataRobot helping agencies understand the spread of COVID, HASH running simulations of vaccine distribution or Lilt making school communications available to immigrant parents in a U.S. school district.

The first step in taking responsibility is knowing what on earth is going on. It’s easy for startup investors to shrug off the need to know what’s going on inside AI-based models.

However, there are also some less positive examples — technology made by Israeli cyber-intelligence firm NSO was used to hack 37 smartphones belonging to journalists, human-rights activists, business executives and the fiancée of murdered Saudi journalist Jamal Khashoggi, according to a report by The Washington Post and 16 media partners. The report claims the phones were on a list of over 50,000 numbers based in countries that surveil their citizens and are known to have hired the services of the Israeli firm.

Investors in these companies may now be asked challenging questions by other founders, limited partners and governments about whether the technology is too powerful, enables too much or is applied too broadly. These are questions of degree, but are sometimes not even asked upon making an investment.

I’ve had the privilege of talking to a lot of people with lots of perspectives — CEOs of big companies, founders of (currently!) small companies and politicians — since publishing “The AI-First Company” and investing in such firms for the better part of a decade. I’ve been getting one important question over and over again: How do investors ensure that the startups in which they invest responsibly apply AI?

Let’s be frank: It’s easy for startup investors to hand-wave away such an important question by saying something like, “It’s so hard to tell when we invest.” Startups are nascent forms of something to come. However, AI-first startups are working with something powerful from day one: Tools that allow leverage far beyond our physical, intellectual and temporal reach.

AI not only gives people the ability to put their hands around heavier objects (robots) or get their heads around more data (analytics), it also gives them the ability to bend their minds around time (predictions). When people can make predictions and learn as they play out, they can learn fast. When people can learn fast, they can act fast.

Like any tool, one can use these tools for good or for bad. You can use a rock to build a house or you can throw it at someone. You can use gunpowder for beautiful fireworks or firing bullets.

Substantially similar, AI-based computer vision models can be used to figure out the moves of a dance group or a terrorist group. AI-powered drones can aim a camera at us while going off ski jumps, but they can also aim a gun at us.

This article covers the basics, metrics and politics of responsibly investing in AI-first companies.

The basics

Investors in and board members of AI-first companies must take at least partial responsibility for the decisions of the companies in which they invest.

Investors influence founders, whether they intend to or not. Founders constantly ask investors about what products to build, which customers to approach and which deals to execute. They do this to learn and improve their chances of winning. They also do this, in part, to keep investors engaged and informed because they may be a valuable source of capital.