EVENT RECAPS: Miami Edition
After a hiatus of more than a year, we were excited to host our first live events of 2021 while we were in Miami this past week. With a hat tip to Pfizer, Moderna and J&J, the Crossover team hosted three events over the past week, bringing together a curated group of professional athletes and top founders + execs from the world of tech.
First up was a dinner hosted at Ray and Shannon Allen's soon-to-be-opened new Miami Beach restaurant, followed by a happy hour at the Setai co-hosted with our friend Chris Lyons from Andreessen Horowitz, and finally a Crossover Dinner Series event hosted with Crossover family member and NBA veteran Roger Mason Jr. at the Rudolf Budja gallery in Miami Beach.
Attendees included current and former NBA and NFL stars as well as founders and execs from dozens of startups spanning fintech, crypto, ecommerce, digital health, enterprise SaaS, and beyond.
Once again, we were inspired by the depth of conversation and new connections made in just a few short hours. We look forward to bringing more of these events to cities across the country and bringing together more amazing athletes, entertainers and tech founders from the Crossover network. Special thanks to Ray and Shannon Allen, our friends at Rose Capital, and to Rudolf Budja for the support and warm welcome in Miami!
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FIRST DOWN
Vise Grips A $65 Million Series C To Supercharge Financial Advisors
Billions of dollars of venture capital dollars have been pumped into startups leveraging technology to replace many of the functions served by traditional wealth advisors--from brokerage, to advising, to retirement planning, and more. And while companies like Robinhood, Betterment, and Wealthfront have taken a chunk out of the core offering of many financial advisors, according to the SEC there are still nearly 15,000 independent advisory firms in the US managing nearly $1 trillion in assets for more than 42 million clients--with individuals making up 95% of the client base. In other words, there is a large market that sits squarely in between those who self-manage their finances and the ultra high net worth who require more specialized advisory firms to handle their specific needs.
It's this fat middle that NYC-based startup Vise is focused on. Vise is an AI-driven portfolio management platform for financial advisors, with a goal of helping provide independent advisors with the tools and services of larger firms and their legions of resources. The startup has built a full-stack platform that spans the entire lifecycle of the advisor-client relationship, including personalized portfolio creation for clients, portfolio management, and providing on-going intelligence. Think of it as AI and technology-augmented human financial advisory services.
This week, Vise announced that it raised a new $65 million Series C round of funding from notable venture funds Ribbit Capital and Sequoia. This brings the 5-year-old startup's total funding to $125 million, and increases the company's private valuation to $1 billion.
Vise is following a similar path to Baltimore-based Facet Wealth, which we have covered in past issues of The 2-Minute Drill, and which has raised $60 million for its own technology-enabled financial advisory platform.
While the company reports solid growth and that its assets under management (AUM) has grown 4x to $250 million while doubling its client account numbers, the $1 billion valuation still feels pretty rich relative to traction. In a white-hot market tackling a massive sector, the bet here is that the outcome potential is so large that the price paid now is based less on current value than on potential (as is the case with most venture investments!).
(more here)
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SECOND DOWN
Maven Enrolls In A $20M Series A For Online Learning
This week, San Francisco-based knowledge-sharing startup Maven announced a fresh $20 million Series A round of funding to expand its approach to live, online community-driven learning. This brings the young startup's total funding to around $25 million.
Maven sits at the intersection of two popular trends--online education and the creator economy. Unlike education technology platforms like Coursera (and other so-called MOOCs), Maven isn't focused on traditional instructors or professors like you might otherwise find in a classroom. Instead, Maven sources subject-matter experts who create and offer their own curriculum, and package the offering into a cohort-based learning model.
Here is where the creator economy angle comes into play. Just like TikTok builds tools for its video creators, Clubhouse builds tools for audio creators, and Substack builds tools for its newsletter creators, Maven is building out a suite of services to make it easier for these "knowledge creators" to create, host, and monetize their subject-matter expertise. Maven takes a 10% fee for the services, similar to Substack's model.
To give you a sense for what you can find on Maven, one on-brand course offering you can find on the young platform is called Building for the Creator Economy, and is taught by venture investor Li Jin. The course is structured into 3-week cohorts and promises to cover The Creator Landscape, Creators as Businesses, Traction and Distribution, Measuring Success, and The Investor's perspective. Kind of like a micro-course that offers more than diving into your own research and listening to podcasts and watching YouTube videos, but stops short of enrolling you into full-scale online education course.
The team behind the startup plays a large part in why the company has raised so much capital so quickly. Maven has an impressive founding team that includes Udemy co-founder Gagan Biyani, altMBA co-founder Wes Kao and early Venmo employee and Socratic co-founder Shreyans Bhansali. Maven reports that since its January launch, the company has sold over $1 million worth of courses (gross bookings) and that four of its courses have earned more than $100k.
In addition to straddling the online education and creator economy ecosystems, Maven will also have to thread the needle between educational content available for free on platforms like YouTube, and more robust professional educational courses found in the crowded traditional online education sector. Helping both creators and the audience differentiate between "content" and a more learning/retention focused approach that leverages cohorts, community and accountability in a way that YouTube or even a MOOC can't will be essential to the platform's success.
It's worth noting that Maven is just the latest in an increasingly crowded sector building the marketplace and tools for the new knowledge creator economy. Just two weeks ago we covered the debut of Bright, which offers a new video-based platform that enables fans and followers to engage in live face-to-face video sessions with their favorite creators. There's also Skillshare, which has raised more than $110 million for its learning platform focused on the creative fields. Then there are other emerging platforms in the sector, including Monthly.com, SuperPeer, FanHouse, and others.
As the creator economy continues to heat up, we are excited to see and participate in more investment into the platforms that help unlock the skills, knowledge, and creativity of millions of people worldwide.
(more here)
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THIRD DOWN
Ro Beefs Up On Women's Health With Modern Fertility Acquisition
This week, New York-based direct-to-consumer digital health platform Ro announced the acquisition of San Francisco-based fertility direct-to-consumer startup Modern Fertility for a reported $225 million. Modern Fertility was founded in 2017 with the goal of closing the fertility information gap by enabling women to test key fertility hormones at home. The company had raised $22 million in seed and Series A funding before getting scooped up by the much larger Ro--which for its part, has raised more than $875 million in venture funding. While terms of the deal and past funding round valuations weren't "officially" reported, the outcome looks to be roughly a 3-4x return on the 2019 Series A round and a 10-11x return from the 2018 Seed round. So all-in-all, a solid return for the founders and early investors if the numbers are accurate.
Modern Fertility is part of a new wave of D2C startups aimed at supporting women's reproductive health. The startup offers consumers fertility essentials, including at-home tests and tools that help people get proactive about their reproductive health—whether they’re trying for kids or not. In the last year, the company expanded its offerings to include multivitamins, ovulation tests, early detection pregnancy tests, a cycle tracking app, and digital fertility tracking tools. In past issues of The 2-Minute Drill we have also covered recent funding rounds for Carrot Fertility (here), and broader-based care platforms for working families Cleo (here) and Maven (here), which both include fertility and family-planning services as well.
Why the increase in reproductive D2C services now? The primary reason for this increase in focus is two-fold. First, roughly 1 in 6 couples in America struggle to conceive, yet there are only about 500 infertility clinics nationwide. Creating new direct-to-consumer offering both fills a gap in the market, and helps increase access to care. Secondly, the creation and offering of new digital health solutions is part of a broader shift within the human capital resources component of the so-called "Future of Work." As we have written about in the past, one sector we are particularly interested in at Crossover is the intersection of digital health and the Future of Work. With the shifting dynamic between services once provided under a traditional employer:employee relationship evolving in today's new economy, a new wave of startups are emerging to address the changing way that people receive services--including health care.
For Ro, the acquisition is strategic as it looks to beef up its broader suite of healthcare offerings--particularly for women--in advance of an expected IPO. The company originally launched as "Roman," and was focused on targeting male consumers with D2C products such as erectile disfunction pills and hair loss treatments. The company has since expanded into a broader vertically-integrated primary care platform, and adding Modern Fertility to the mix--and tapping the founding team to lead their women's health initiatives looks to be a smart strategic move.
(more here)
Disclosure: Crossover is an investor in benefits platform for working families, Cleo.
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FOURTH DOWN
Wheels Up! Wheel Raises $50 Million For Virtual Care Infrastructure
By now we all know that the pandemic has accelerated the adoption of telemedicine. But behind all of these new offerings from legacy healthcare providers and new direct-to-consumer platforms alike is the need for care providers and the ability to navigate a complicated web of state and federal regulations dictating what practitioners can practice what type of care in which markets.
Enter Wheel. Wheel is an Austin, Texas-based virtual healthcare recruiting platform that helps companies providing consumer-facing telemedicine recruit practitioners and ensure that practitioners are matched with patients in a compliant fashion. And this week, the startup announced a new $50 million Series B round of funding led by Lightspeed. This brings the 3-year-old company's total funding to over $65 million.
We first met Wheel founder Michelle Davey last June through our friend and Series A lead investor from CRV Kristin Baker Spohn. In addition to loving Michelle's story, we like Wheel's approach to the market, aiming to be the "Stripe for Telehealth" -- meaning that they don't have to solve for creating a consumer brand or acquiring consumers, and instead, just need to provide the picks and shovels so others can plug in telemedicine and set it and forget it.
One of the challenges Wheel--and the industry as a whole--still have to grapple with is accounting for retention and seasonality while fulfilling the promise of 24/7 live access to care--and doing so with a high degree of quality. For one, healthcare is highly seasonal, with massive spikes during cold and flu season, and massive drops in the summers. So how do you balance usage rate of clinicians to make sure that practitioner utilization rates remain consistent, while also not having to subsidize low-utility periods with overpayment in high-utility months. If practitioners don't make enough money through a telemedicine provider, they will (and do) churn. And if a consumer-facing provider wants to guarantee 24/7 quality care, they will likely need to overpay at times when utilization is low. So solving these challenges will be key for the success of the industry.
As believers in the power of telemedicine in reducing costs and increasing access to care, we like the picks and shovels approach Wheel is adopting. That said, it is highly complicated and a lot of components all need to work smoothly and in compliance with a web of regulations, so we will be eager to watch how Wheel and other startups in the sector fare.
(more here)
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EXTRA POINT
Athletes + Entertainers in Tech: Daring Foods
The past few years have seen a massive boom in funding for alternative proteins, bolstered by the success of companies like Beyond Meat and Impossible Foods. The ecosystem is now well-past the proof-of-concept point, and for many staples like chicken or beef alternatives, it has become more of a consumer branding exercise than a study in product innovation.
Just some of the alternative protein companies we've covered here in The 2-Minute Drill include:
🌱 ALTERNATIVE PROTEINS 🌱
Beyond Meat (2MD),Clara Foods (2MD), Climax Foods (2MD), Good Catch Foods (2MD), Impossible Foods (2MD), Motif Ingredients (2MD), Nature's Fynd (2MD), NUGGS (2MD), Just / VeganEgg / Spero (2MD).
This week, Los Angeles-based maker of plant-based chicken products Daring Foods became the latest purveyor of faux meats to raise venture funding, scoring a $40 million Series B round of funding led by D1 Capital. This brings the 3-year-old startup's total funding to just under $50 million. Like all alternative proteins, Daring aims to come as close to the taste and texture of the real thing, but without the animal. Daring's particular approach uses a soy base, is dairy and gluten free, and avoids use of GMOs and palm oil.
The fake meat market continues to grow rapidly, with the global market expected to hit $430 billion by 2040. And Daring has been able to gain solid initial traction on the distribution front, scoring partnerships with Costco, Sprouts, Erewhon, Gelson's and Bristol Farms. But with more funding pouring into the market, the startup will have to face a bevvy of challengers coming from all sides--including new brand-forward upstarts like NUGGS, as well as planned forays into the faux chicken coop from behemoths Beyond Meat and Impossible foods.
Athletes + Entertainers involved include: entertainment mogul Drake and Norwegian DJ Kygo (in BOLD).
(more here)
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