EVENT RECAP
This past week, we headed out to Las Vegas to speak at the 2021 NFL Players Symposium as part of our ongoing efforts to educate the Modern Athlete on opportunities beyond the field of play. In addition to our presentation, we enjoyed dozens of 1-on-1 conversations with current and former NFL players, helping them learn about what the tech sector is, why it matters, and ways they can get involved.
It was also great to catch up with some of our friends from Team USA basketball--and lose a little money at the blackjack tables together 🤦♂️-- as they prepare for Japan and taking home the gold in what is sure to be a unique olympic experience. More than anything though, it was great to be back out in the world meeting with friends old and new, and getting to share education about the growing tech sector.
Noah giving his presentation at the 2021 NFL Players Symposium
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FIRST DOWN
Otter Raises $23M For Pandemic-Inspired Uber For Childcare
One of the challenges working parents face that has been exacerbated by the pandemic is the need for affordable and accessible childcare. And to tackle this challenge, NYC-based startup Otter announced this week that it raised a new $23 million Series A round of funding led by noted Silicon Valley firm Sequoia Capital. This brings the year-old startup's total funding to nearly $30 million, including a prior seed round from a16z.
Otter is following a well-worn marketplace playbook of matching supply with demand in a given vertical--in this case, childcare. Like Uber did for transportation, Airbnb for lodging, Papa for Eldercare, and many, many more, Otter is focused on addressing the childcare shortage by matching stay-at-home parents with working families looking for help.
Why the need? According to the National Women's Law Center, more than 2 million women were forced to leave their job during the pandemic to take on the primary caretaking role for their families as schools and other facilities shut down. And as the pandemic begins to wane, many parents--and especially women--are finding it difficult to reenter the workforce while juggling caregiving in an increasingly remote work environment.
Like other marketplaces, Otter relies on matching supply and demand. But unlike hopping in a car to get from point A to point B, matching childcare providers with a parent's most precious cargo requires a higher level of background check and scrutiny to get parents comfortable. To that end, through Otter both parents and prospective caregivers answer a series of survey questions about parenting styles, approaches and schedules to ensure their approaches align. Otter also conducts thorough background checks and facilitates communication between both sides to ensure there is comfort.
So far, Otter's approach is gaining early traction. The service is live in Chicago and New York, and reports that it has coordinated care for 7,000 families and helped 3,500 stay-at-home parents earn a collective $20 million since launching. With the additional funding, Otter plans to expand its market coverage.
On a side note, providing access to services that help support working families is a sector we are passionate about at Crossover, and is reflected in our investment into family benefits platform for working families, Cleo. Seeing this same challenge of lack of childcare for working families, Cleo has since expanded its offerings from pre- and post-natal care to include early childhood care and support. Together with companies like Otter, we hope to see technology deliver both strong returns, and enable more equitable global workforces.
The Money Quote: “Our goal is to ensure that Otter is the place to find safe and reliable childcare...We want to really help people understand what we are doing and to help people feel really comfortable and confident.” -- Otter founder and CEO Helen Mayer
(more here)
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SECOND DOWN
Aleph: We Have The (Lab-Created) Meats
This week, Israeli lab-cultivated meat startup Aleph Farms announced a massive $105 million Series B round of funding to help bring its alternative approach to protein production to market. This brings the four-year-old startup's total funding to nearly $120 million.
We all gotta eat, and the past 24 months has been a period of massive innovation in the food technology (FoodTech) sector, ranging from what we eat (alternatives to tradition protein production), to how we eat (delivery + virtual kitchens), to how we streamline the food supply chain to reduce waste from what we are already producing and distributing.
As we wrote about in our 2020 year end special report, the global food economy is a $6 trillion sector, and with investment into alternative proteins hitting $1.5 billion in 2020, agriculture technology funding hitting $2.8 billion last year, and the food delivery vertical market size projected to hit $365 billion by the end of the decade (with the successful DoorDash IPO, Gopuff funding, and Postmates/Uber merger stirring things up), investment into technology companies innovating in the sector has never been hotter.
Double-clicking on the alternative proteins sector in particular, innovation can largely be broken down into two groups: plant-based "meat" substitutes and cell-curated meats. Companies like Beyond Meat and Impossible Foods have led the charge in the plant-based protein sector, and now a new wave of companies are raising venture funding to tackle "big meat" by curating real meats in the lab from animal cells. Below is a summary of some of the cell-curated meat companies we have covered in the past.
 CELL CURATED MEATS
For its part, Aleph focuses on creating steaks from non-genetically engineered cells isolated from a cow. It does this by mimicking a natural process of muscle-tissue regeneration occurring inside the cow’s body, but under controlled conditions. By creating steaks in the lab, Aleph--like others in the sector--is looking to help feed a growing population at a lower cost, with less environmental impact, and without having to slaughter a live animal. Note: the practice is certainly not without its own ethical considerations!
With the new funding, Aleph looks to launch into the market in 2022 with a thin-cut beef steak, and then expand both globally, and into additional types of proteins. There will still be regulatory hurdles to clear, but for now, keep an eye on the sector as more innovation targets this massive--and growing--$6 trillion global food market.
(more here)
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THIRD DOWN
Frame Fires Up A Fresh Seed Round For Digital Mental Health
The Covid pandemic may be mercifully giving way to a re-opening world, but the toll it has taken on the mental health of Americans is far from over. The need for more accessible and affordable mental health services has not waned, and to help address this challenge, Los Angeles-based digital mental health platform Frame announced a new $3 million Seed round of funding.
As we wrote about when the startup raised its first round of pre-seed funding, Frame was founded by longtime friends Kendall Bird and Sage Grazer, who shared the belief that if more people understood what actually happens in therapy, more people would be willing to try it, and fewer would have to suffer in silence. With that in mind, Frame began offering livestreamed therapy sessions with volunteers and therapists to help those who are new to mental healthcare see what the experience might be like.
Over the past year, the company has increasingly shifted its focus toward developing tools to help create a 1-stop shop for practitioners to source new clients and operate their existing business more effectively. It's the standard vertical SaaS (software as a service) approach, building software that is tailored to a specific use case.
Frame is by no means the only startup building tools for practitioners, as the digital mental health ecosystem grows in need for more access to care for clients, and ability to manage and scale practices for practioners.
As we've written about at length in the 2-Minute Drill, the past 18 months have seen record-setting venture investment into digital mental health startups. In fact, according to Crunchbase, investors have pumped more than $1.8 billion into global startups focused on mental health in the first half of 2021 alone. We expect to see more consolidation in the coming 6-12 months, but in the meantime, we welcome any innovations focused on increasing access to care and destigmatizing seeking help.
(more here)
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FOURTH DOWN
Mmhmm Spruces Up Presentations With A Fresh $100M In Funding
This week, virtual meetings startup Mmhmm announced a $100 million Series B round of funding led by SoftBank’s Vision Fund, on the heels of a $31 million Series A round back in October. The company was founded by Evernote founder Phil Libin, and brings the year-old start-up's total funding to nearly $140 million. This is the most money raised by a company with a name that no one can pronounce or say without having to explain how to say the name (ok, maybe that's not an official stat, but I think we might be right!)
2020 was undoubtedly the year of the Zoom, and Libin and his team believe that video-based communications are here to stay...they just need a little sprucing up. Instead of building video software from the ground up, Mmhmm takes the existing video software and adds its own features.
For those who are tired of sitting on Zoom meetings all day and either looking at a bunch of faces in boxes or seeing a shared-screen presentation, Mmhmm offers a suite of tools to help spruce up the experience. Here is is good video demo from Libin. Instead of boring backgrounds or showing charts and graphs with a faceless voiceover, Mmhmm offers more interactive graphics and the ability to create content in boxes next to the speaker a la SNL Weekend Update or late night tv hosts. It also includes functionality to record just their side of the video, which enables a presenter to replay what they just said, and then interact with that clip with a live overlay.
As we wrote about back in October when the company raised its massive $31 million Series A, those outside the world of Silicon Valley may be scratching their heads and asking, how does a pre-launch company get valued at $100 million before even launching? And now, how does is raise another $100 million, with just a limited number of users? Well, Mmhmm provides a prime example of the perfect storm of a repeat successful founder and red hot sector colliding. Because venture investors are simultaneously looking to take big swings at companies with massive outcome potential while at the same time minimizing risk, the idea of backing a repeat founder working in the virtual meeting sector checks both boxes.
I signed up for the private beta when we wrote about the company back in October, and found the interface to be pretty snazzy, That said, it didn't provide enough value to me at the time to switch from my standard use of Zoom for video meetings and presentations. From an investment perspective, I would also worry that their now-cozy relationship with Zoom could turn competitive if/when Zoom begins to beef up its own features. But with a seasoned and proven founder, investors are betting on the ability of the disruptor to out innovate the incumbents.
(more here)
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EXTRA POINT
Athletes + Entertainers in Tech: Calaxy
This week, NBA star and crypto enthusiast Spencer Dinwiddie announced that his new creator marketplace Calaxy raised $7.5 million in venture funding to help build out a social media marketplace to connect fans directly with creators. And true to Dinwiddie's passion for crypto, the entire ecosystem is built on blockchain technology.
We've spent a lot of time of the past few weeks writing about the booming 50 million person strong Creator Economy, where those with creative skills monetize their talents directly from a paying fanbase via platforms like TikTok, Patreon, OnlyFans, Cameo, YouTube, and more. Calaxy aims to capitalize on this growing desire for fans and creators to interact more intimately, and believes that a new ecosystem built on its own unique token-based currency is the best way to achieve this.
In many ways, Calaxy looks to be a mashup of all the holy grail ideas celebs and creators have been dancing around for years. Want to get a personal video from a celeb, go to Cameo. Want to see a celeb teach you how to direct a movie, go to MasterClass. Want to see an Instagram influencer in a naughty pose, go to OnlyFans. But the marketplace aims to take these engagement further by enabling creators/celebs to offer other pay-to-play offerings like video calls, voice texting, custom masterclasses, fan club memberships, and the ability to vote on key decisions.
As will all creator marketplaces, the biggest challenge Calaxy will face is in getting the creators and celebs onto the platform, since these are the individuals who will then draw in their fans. Or in marketplace terms, creators are the supply side, and the fans are the demand side. You have to solve for one or the other to get the flywheel started, and in this kind of business with a cold-start challenge and no baked in user base, it's going to need to be the ability to attract top creators to get things started. And once you get them onto the platform, how do you ensure that they are making enough money to stay, or to take the time and effort to do all of these fan promotions and engagements. Delivering ROI quickly for individuals with infinite options and not-so-infinite attention spans will be key.
To this end, the fact that Dinwiddie is at the helm should give the company a solid boost relative to non-incumbent competitors with no celeb ties. He and the team have also recruited an initial handful of influencers ranging from NFL running back Ezekiel Elliot to Matt James from the Bachelor. It remains to be seen if the startup can attract enough star power to start the flywheel of getting top talent to the platform, ensure they earn enough to stay (while fending off increasing competition from larger spend-happy incumbents who are expanding their offering into these pay-to-play services), and whether consumers are willing to take the added leap of transitioning their dollars to a new token-based currency for this purpose of connecting with their celeb crushes.
We love the passion for the sector and creativity from Dinwiddie and co, and conceptually the model makes a lot of sense. As with all startups, it's an uphill battle to innovate and disrupt incumbents, and we'll be keeping an eye on Calaxy and its progress.
Athletes + Entertainers involved include: Spencer Dinwiddie and Luke Walton from the NBA, NFL star Ezekiel Elliot, and Influencers Matt James (from the Bachelor) and Teyana Taylor.
(more here)
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