Allbirds CEO Joey Zwillinger on the startup’s $100 million round, profitability, and SPAC mania

As people spend less time out in the world and more time daydreaming about when a vaccine will arrive, lifestyle shoes are only gaining traction.

One obvious beneficiary is Allbirds, the San Francisco-based maker of comfortable, sustainable kicks that launched in 2016 and quickly became a favorite in Silicon Valley circles before taking off elsewhere.

Though the company saw its business slow this year because of the pandemic, its products are now available to purchase in 35 countries and its 20 brick-and-mortar stores are sprinkled throughout the U.S. and Europe, with another outpost in Tokyo and several shops in China.

Investors clearly see room for more growth. Allbirds just closed on $100 million in Series E funding at roughly the same $1.6 billion valuation it was assigned after closing on $27 million in Series D funding earlier this year, and blank-check companies have been calling, says cofounder and CEO Joey Zwillinger. He talked with us earlier this week in a chat that has been edited for length and clarity.

TC: Your shoes are sold worldwide. What are your biggest markets?

JZ: The biggest market by far is the U.S., and the same day that we started here in 2016, we also launched in New Zealand, so that’s been very good to us over the last four years, too. But we’ve seen growth in Japan and Korea and China and Canada and Australia. We have a network of warehouses globally that lets us reach 2.5 billion people [who], if they were so inclined, could get their product in three days. We’re proud of the infrastructure we’ve set up.

TC: We’ve all worn shoes a lot less than we might have expected in 2020. How has that impacted your business?

JZ: We’re growing but definitely not at the same pace we would be had the pandemic not occurred. We’re predominantly digital in terms of how we reach people, but stores are important for us. And we had to switch [those] off completely and lost a portion of our sales for a long time.

TC: Did you have to lay off your retail employees?

JZ: A large portion of our retail force was unable to work, but we were luckily able to keep them fully paid for four months, plus [some received] government benefits if they got that. And now all of our 20 stores are up and running again in a way that’s totally safe and everyone feels really comfortable.

We also donated shoes to frontline workers — 10,000 pairs or around a million dollars’ worth.

TC: What does Allbirds have up its sleeve, in terms of new offerings?

JZ: We just launched our native mobile app, and through it we’re able to give our more loyal fans exclusives. It’s a really cool experience that blends technology with fashion. You can try on shoes in a virtual mirror; you’re given information [about different looks] that you wouldn’t have otherwise.

We also launched wool-based weather-proofed running shoes in April that have blown away our expectations but [were fast discovered by] people who haven’t really been running for 10 to 15 years and are running again [because of gym closures]. It’s a super high-stakes category and one that’s hard to break into because people buy on repeat. But we spent two years making it. It’s not like we launched it because of the pandemic. It’s a shoe for 5K to 10K distances — it’s not a marathon shoe or a trail shoe — and that we’ve been able to clearly articulate that speaks to its success, I think.

TC: What about clothing?

We launched underwear and socks last year in a small launch. We developed a textile that hasn’t been used before — it’s a blend of tree fiber and merino wool because our view is that nature can unlock magic. Underwear is typically synthetic — it’s made from plastics — or cotton, which isn’t a great material for a whole bunch of reasons. [Meanwhile] ours is phenomenal for temperature control; it also feels like cashmere.

TC: Patagonia really advertises its social and environmental values. Do you see Allbirds evolving in a similar way, with a growing spate of offerings?

JZ: I’m incredibly humbled by [the comparison]. Given their environmental stewardship of the retail sector, we hope we’re compared to them. But they are much more of an outdoor brand — not a competitor so to speak. And we’d love to share more of the retail world with them so we can do our environmental thing together.

TC: You just raised funding. Are you profitable and, if not, is profitability in sight?

JZ: We’ve been profitable for most of our existence. Having some discipline as we grow is good. We’re not close to the profitability that we’ll eventually have, but we’re still a small company in investment mode. After we emerge from the pandemic, we’ll enter a ramping-up phase.

TC: Everyone and their brother is raising money for a blank-check company, or SPAC, which can make it a lot faster for a private company to go public. Have you been approached, and might this option interest you?

JZ: Yes and no. Yes we’ve been approached, and no, we’re [not interested]. We want to build a great company and being public might be something that helps enable that for a whole bunch of reasons. But we want to do it at the right time, in a way that helps the business grow in the most durable and sustainable fashion. Just jumping at the opportunity of a SPAC without doing the rigorous prep the way we want to, we’re not super focused on that

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Indian startups explore forming an alliance and alternative app store to fight Google’s ‘monopoly’

Google, which reaches more internet users than any other firm in India and commands 99% of the nation’s smartphone market, has stumbled upon an odd challenge in the world’s second largest internet market: Scores of top local entrepreneurs.

Dozens of top startups and firms in India are working to form an alliance and toying with the idea of launching an app store to cut their reliance on Google, five people familiar with the matter told TechCrunch.

The list of entrepreneurs include high-profile names such as Vijay Shekhar Sharma, co-founder and chief executive of Paytm (India’s most valuable startup), Deep Kalra of travel ticketing firm MakeMyTrip, and executives from PolicyBazaar, Sharechat and many other firms.

The growing list of founders expressed deep concerns about Google’s “monopolistic” hold on India, and discussed what they alleged was unfair and inconsistent enforcement of Play Store’s guidelines in the country.

The conversations, which began in recent weeks, escalated on Tuesday after Google said that starting next year developers with an app on Google Play Store must give the company a cut of as much as 30% of several app-related payments.

Dozens of executives “from nearly every top startup and firm” in India attended a call on Tuesday to discuss the way forward, some of the people said, requesting anonymity. A 30% cut to Google is simply unfeasible, people on the call unanimously agreed.

Vishal Gondal, the founder of fitness startup GOQii, confirmed the talks to TechCrunch and said that an alternative app store would immensely help the Indian app ecosystem.

TechCrunch reached out to Paytm on Monday for comment and the startup declined the request.

In recent months, several major startups in India have also expressed disappointment over several of the existing industry bodies, which some say have failed to work on nurturing the local ecosystem.

The tension between some firms and Google became more public than ever late last month after the Android-maker reiterated Play Store’s gambling policy, sending a shockwave to scores of startups in the country that were hoping to cash in on the ongoing season of Indian Premier League cricket tournament.

Google temporarily pulled Paytm’s marquee app from the Play Store citing repeat violation of its Play Store policies. Disappointed by Google’s move, Paytm’s Sharma said in a TV interview, “This is the problem of India’s app ecosystem. So many founders have reached out to us… if we believe this country can build digital business, we must know that it is at somebody else’s hand to bless that business and not this country’s rules and regulations.”

Google has sent notices to several firms in India including Hotstar, TechCrunch reported last month. Indian newspaper Economic Times reported on Wednesday that the Mountain View giant had also sent warnings to food delivery startups Swiggy and Zomato.

Vivek Wadhwa, a Distinguished Fellow at Harvard Law School’s Labor and Worklife Program, lauded the banding of Indian entrepreneurs and likened Silicon Valley giants’ hold on India to the rising days of East India Company, which pillaged India. “Modern day tech companies pose a similar risk,” he told TechCrunch.

Some of the participating members are also hopeful that the government, which has urged the citizens in India to become self-reliant to revive the declining economy, would help their movement.

Other than its reach on Android, Google today also leads the mobile payments market in India, TechCrunch reported earlier this year.

The giant, which has backed a handful of startups in India and is a member of several Indian industry bodies, invested $4.5 billion in Mukesh Ambani’s telecom giant Jio Platforms earlier this year.

India’s richest man Ambani, who runs oil-to-retails giant Reliance Industries, is an ally of Indian Prime Minister Narendra Modi. Jio Platforms has attracted over $20 billion in investment from Google, Facebook, and 11 other high-profile investors this year.

The voluminous investment in Jio Platforms has puzzled many industry executives. “I see no business case for Facebook investing in Jio beyond saying we need regulatory help,” said Miten Sampat, a high-profile angel-investor on a podcast published Wednesday.

“This is a white-collar way of saying there is corruption involved, and if the government gets upset, I have invested somewhere with some friend of the government. All of us are losing at the benefit of one company,” he said. Sampat’s views are shared by many industry executives, though nobody has said it on record and in such clear terms.

Google said in July that it would work with Jio Platforms on low-cost Android smartphones. Jio Platforms is planning to launch as many as 200 million smartphones in the next three years, according to a pitch the telecom giant has made to several developers. Bloomberg first reported about Jio Platform’s smartphone production plans.

These smartphones, as is the case with nearly 40 million JioPhone feature phones in circulation today, will have an app store with only a few dozen apps, all vetted and approved by Jio, according to one developer who was pitched by Jio Platforms. An industry executive described Jio’s store as a walled-garden.

A possible viable option for startup founders is Indus OS, a Samsung-backed third-party store, which last month said it reaches over 100 million monthly active users. As of earlier this week, Paytm and other firms had not reached out to IndusOS, a person familiar with the matter said.

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Element acquires Gitter to get more developers on board with the open Matrix messaging protocol

Some interesting news for lovers of open, decentralized communications tech: Element, the company behind the eponymous Matrix-based Slack competitor (formerly known as Riot) has acquired developer-focused chat platform, Gitter, from dev services giant GitLab, which picked it up back in 2017.

The acquisition means Gitter’s community of some 1.7M users will be migrating to Matrix, the underlying decentralized comms protocol also made by Element — assuming they stick around for the ride with the new owner, of course. But Element is going out of its way to reassure Gitter users they’ll feel properly at home on Matrix.

In a blog post discussing the acquisition, the top-line message from Element CEO and Matrix co-founder, Matthew Hodgson, is that nothing will change in the short term. Furthermore, the pitch to the Gitter community is that, down the line, there will be plenty to gain from the migration/eventual assimilation as a “Gitter-customized version of Element” running on Matrix.

This is because the pledge is feature parity first (so, yes, that means Element will be gaining a bunch of Gitter features; such as threads and instant live room peeking, to name two). Then, once Gitter migrates to Element, it’ll get access to “all the goodies” the combination brings — including end-to-end encryption; reactions; VoIP and conferencing; widgets; all the alternative clients, bots, bridges and servers; the full open standard Matrix API; and the ability to fully participate in that decentralized network…

Another enticing promise is “constantly improving native iOS & Android clients” — which the Element team notes is a welcome alternative to Gitter’s natives ones, given they’re already being deprecated.

The migration will also mean Element will be replacing the current “creaky” matrix-appservice-gitter bridge.

“We’re going to build out native Matrix connectivity — running a dedicated Matrix homeserver on gitter.im with a new bridge direct into the heart of Gitter; letting all Gitter rooms be available to Matrix directly as (say) #angular_angular:gitter.im, and bridging all the historical conversations into Matrix via MSC2716 or similar,” it writes. 

“Gitter users will also be able to talk to other users elsewhere in the open Matrix network — e.g. DMing them, and (possibly) joining arbitrary Matrix rooms. Effectively, Gitter will have become a Matrix client,” Element adds.

So the tl;dr is that current Gitter users should have plenty of reasons to be cheerful about the acquisition. (Plus, as Hodgson points out, anyone less than happy with the direction of travel can of course fork the platform and go their own way, being as Element is an open source company. Though of course the hope is no one will feel the need to fork it.) 

The decision to migrate Gitter to Element has been made purely on resources/efficiency grounds, per Hodgson — to avoid the need for Element to maintain both apps over the longer term. He tells TechCrunch the migration will likely take around a year — “possibly more”.

Element also plans to “comprehensively” document the whole process so that it can serve as “the flagship example of how to make an existing chat system talk – and transition to — Matrix”, as it puts it, so it’s got its eye on encouraging more apps to make the move to Matrix.

While Element says GitLab approached them about taking on Gitter they confess to a long-time “crush” on the platform — saying they jumped at the chance when the other company came knocking. (Financial terms of the transaction are not being disclosed, however.)

TechCrunch can claim a teeny part in this open source love-in, being as we’re credited with accidentally introducing the teams — after they found themselves across the aisle exhibiting at Disrupt London, back in 2014 (so you truly never know who you’ll serendipitously meet in Startup Alley).

Riot wants to be like Slack, but with the flexibility of an underlying open source platform

Taking on Gitter is not just a passion project for Element, though. They saw they see the acquisition boosting growth of the Matrix ecosystem as a whole other developer community gets plugged in and — they hope — converted to evangelists for the open network.

“If developers are using it then when they need something to build on — a technology for their messaging apps — then they will naturally use Matrix. And if we want to grow this ecosystem and have as many apps as possible built on top of the protocol then we need to make it known to everyone so if they’re using it for their own comms it makes it easier for them,” Element COO, Amandine Le Pape, tells TechCrunch.

“We’re really doing this for Matrix, rather than for Element,” adds Hodgson. “We’re just trying to grow and make the Matrix network larger and healthier. So it’s not a matter of we can then sell it to governments as a communication platform more easily, it’s much more… that it becomes known to more developers so that when they build their next WhatsApp they don’t go and invent the wheel all over again. They would just obviously use Matrix because that’s what they’re already using to co-ordinate on working on React or Angular or whatever technology they already know.”

He says bringing Gitter into the Matrix fold is “obviously” a boon to developers who already use Element — such as the Mozilla community and Rust developers — as it will help reduce fragmentation.

“Half the world is on Gitter, half the world is on Element, and some poor lost souls are stuck in Discord and Slack. So by going and bringing the open guys together it will just be very concretely more useful in Element that if you want to reach out to whatever developer you will be able to find them in once place rather than having this horrible split brain between the two,” he adds.

Asked about its decision to sell Gitter, GitLab told us it has never been a core element of its business focus.

“While GitLab has contributed to Gitter’s growth in the past three years, Gitter has always been a standalone product, independent of GitLab, even after GitLab’s acquisition in 2017. GitLab and Element saw an opportunity for Gitter to grow further under Element,” it said.

“GitLab has a core business focus to be the market’s leading complete DevOps platform,” it added. “It is not a case of stepping away but seeing an opportunity for an important tool to grow further. In true open source fashion, Gitter is free to use, without limits, for everyone to create public or private communities and to contribute back to. It is currently the only developer-centric messaging platform which is an open source, free, uncapped messaging SaaS. The platform has not been monetized yet and has no commercial edition. Gitter is available on the web with clients available for Mac, Windows, Linux, iOS, and Android.”

Image credit: GitLab/Gitter

Element said it will be bringing on board Gitter’s dev team as part of the acquisition — albeit, it’s actually just one “superstar” developer running the whole thing, per Hodgson and Le Pape. So the team integration process at least shouldn’t be too challenging. 

(For the record, Element is the new name for New Vector (the company) and Riot (the messaging app) which was originally called Vector. So that’s Vector > Riot > Element; and New Vector > Element. “We decided to bring everything under one single brand — as now Element the company, Element the app and Element Matrix Services for the hosting platform,” explains La Pape on this recent rebranding.)

Momentum for Matrix

Matrix, meanwhile, has been continuing to gain momentum throughout the pandemic — thanks to the accelerated shift to remote working pushing demand for secure (and, well, sovereign) digital messaging up the public sector agenda.

“Recently we’ve had the German education system coming on board, the German military coming on board. And we have two other governments who, irritatingly, we can’t disclose yet — but suffice to say they are both very big and very exciting,” notes Hodgson. “They’re in paid trials. Once we successfully convert those it will be as big, if not bigger, than France in terms of banging on about it.” 

“In all of these instances they have gone and slightly tweaked the app. They have forked Element, they have branded it, they’ve built it into an existing tool that they have and it really ties in with the developer story — the reason that they feel happy building on an open standard is because of the wider developer ecosystem,” he adds.

“We’re also seeing a whole galaxy of little startups — nothing to do with us — who are building on Matrix successfully,” Hodgson also tells us, pointing to a German healthcare startup called Famedly as one example.

“It’s unrelated to us but it’s fun to see other companies basically betting the farm on the protocol. So, again, the happier developers are to use the protocol the more random startups like that will begin to bubble up,” he adds. “And if the next-gen of Slack killers happen to be on Matrix — whether it’s us, or anybody else, so much the better.”

Automattic pumps $4.6M into New Vector to help grow Matrix, an open, decentralized comms ecosystem

Another key factor that could accelerate momentum for Matrix is interoperability — a topic area regulators are increasingly eyeing as they consider how to ensure competition thrives in digital markets that can be prone to ‘winner takes all’ network effects.

Accusations of anti-competitive behavior are also being thrown around in the real-time messaging space specifically. Notably, in July, Slack filed an antitrust complaint against Microsoft arguing the latter is being anti-competitive by unfairly bundling its rival Teams product with its cloud-based productivity suite, Microsoft 365.

The Matrix network is no such walled garden, of course — and Element the app offers bridges to other messaging platforms, enabling its users to chat with others siloed on proprietary platforms like Slack. Slack, however, hasn’t offered the same courtesy to Element (only going so far as offering a bridge for, er, email users last year).

“It would be great for Slack, and [Microsoft] Teams and Discord to join in,” says Hodgson, arguing: “I think there’s probably more impetus for them to do so in terms of being able to interoperate with other systems, because we have so many bridges. If you were migrating from Skype for Business to Slack or something the Matrix could be the bridge between the two.”

“They have different users, right,” continues Le Pape, fleshing out the case for such platforms to open up to Matrix. “Usually Teams ends up being the one for the big companies who are actually using Office 365 while Slack might be more of the startup side of things so, in the end, if we could actually join everything together it would be good.” “If you all actually were able to talk to one another then that would solve it,” she adds in reference to Slack’s antitrust complaint against Microsoft.

Hodgson posits that if Microsoft were to expose Teams into Matrix it could help it defend against the complaint — being as it would be able to tell regulators it’s “participating in a global open standard network” that lets users pick whichever client they like. “I think that’s a very compelling solution,” he suggests, adding that Element is involved in discussions with “various parties” on the EU side “to make sure people understand there are viable open standards for doing this”. 

“Historically, before Matrix, basically there wasn’t anything that had the feature set that you would expect from Slack or Teams. Whereas now there is actually a viable middle language,” he adds.

Asked if it’s a wild idea that a polished consumer messaging app such as Telegram could ever move to Matrix, Hodgson describes it as an “interesting” thought — but admits there’s still a bit of a feature gap for Element, while also lauding the Telegram’s technical performance.

“I could see there being some friction in joining Matrix as it is today because it would be a slight backwards step for them… However the pressure is therefore on us to go and get to the point that Element is as snappy and as polished as Telegram — and [Element already] has good encryption,” he says. “At which point I think the tables could turn interestingly.

“But they’ve got hundreds of millions of users. I guess they feel they’re doing it right. They would rather, perhaps, become the next WhatsApp and be a 2BN user silo rather than play nice with other people because they’re already past critical mass. But perhaps if we do our job and make Matrix large enough and interesting enough that it is worth their while to link to it then why not?”

New Vector scores $8.5M to plug more users into its open, decentralized messaging Matrix

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Juno Bio launches a vaginal microbiome test kit — targeting the women’s health data gap

Entrepreneur First-backed Juno Bio has launched a home test kit for women wanting to get a better understanding of their vaginal microbiome while also contributing data to further research into women’s health.

The vaginal microbiome refers to the community of microbes and bacteria that naturally live in the vagina. Variances in the vaginal microbiome are thought to have implications for women’s health conditions — such as recurrent bacterial-vaginosis or a higher risk of contracting an STI, and even preterm birth and infertility. But a historical lack of research into women’s health issues means there’s still a long way to go to fully understand what’s going on. (Or indeed how to intervene to correct an unhealthy imbalance.)

That’s where Juno Bio wants to come in.

Last year the 2018-founded UK startup ran a study in the US that gathered samples from more than 1,000 women to build up a repository of data on the vaginal microbiome. That initial data-set underpins the commercial Vaginal Microbiome Test kit it’s launching today — at a cost of $149 (which includes free shipping).

Women who pay to be screened will receive a test kit in the post. They then carry out a sample gathering procedure at home, passing a Q-tip like swab across the walls of their vagina for around 20 seconds and sealing the sample in the tube provided (with stabilizing agents) to return it by post to Juno Bio for analysis.

Once the sample has been processed the user will be invited to log in online and view her results, with the option to book a one-on-one call with a Juno Bio “vaginal coach” to discuss the data.

It’s worth emphasizing that the startup is being careful to caveat what kind of service it’s offering.

A disclaimer on its website states the tests are “currently exclusively intended to be used for wellness purposes” — and it further adds: “The tests we offer are not intended to diagnose or treat disease, or to substitute for a physician’s consultation.”

Juno Bio confirms the test is purely a commercial offer for now — although it says it’s working on “a regulated version” so it will be able to inform clinical decision making in this area in the future, starting with the US which is its initial market focus (though test kits are also available in the UK).

“For sure we’re not replacing a doctor here,” says CEO and co-founder Hana Janebdar, in a call with TechCrunch. “There’s really two buckets of women, if you like, that tend to join the Juno Study or pre-order a test. And the first woman is someone who wants to be very proactive about her general wellness and wants to know more about her body — and this is one of the best ways that you can learn about your microbes and what that means for your vaginal wellness and your pH etc.

“The other women are women who may have had recurrent bacterial vaginosis or recurrent infections and want to know more about what it is that’s causing it potentially — and so she wants a comprehensive picture of her vaginal microbiome. Because if you go and try and figure out, right now, what is causing your bacterial vaginosis using existing methods of diagnosis they’re not always the most helpful. So while that should always be the first port of call, and women should always go to their doctor when they think they have an issue, this is an incredibly important resource when it comes to wellness for a lot of women.”

“There are 10% of women in America, for instance, who have recurrent bacterial vaginosis — which is just one condition of the vaginal microbiome. And it’s one of the highest recurrent rates in medicine,” she adds. “And partly because the diagnostics are terrible in this space.”

Another of the startup’s investors is life sciences giant, Illumina, which is providing the DNA sequencing technology it’s using to analysis the samples, per Janebdar.

“This is the first comprehensive vaginal microbiome test kit that’s available that’s next generation sequencing based,” she says of the test kit. “Obviously vaginal testing has existed for a while but no one has really used next generation sequencing — which is the technology that enables a really comprehensive picture of what all the microbes that are in the vagina are. And that’s what’s needed to A) unravel the vaginal microbiome and its impact on women’s lives and fertility and health, and then B) to give women actually the full picture of what those microbes are.”

“The conditions that have been associated with the vaginal microbiome — like BV, or recurrent yeast infections or even the downstream conditions like pelvic inflammatory disease — they’ve historically been poorly characterized. So the diagnosis that have existed to date have been [poor at determining] when and what women have these conditions and therefore what the best treatments should be,” she adds.

Janebdar says the prevailing scientific understanding has been that a Lactobacillus dominant vaginal microbiome is healthy — but more recent studies suggest a more nuanced understanding is needed.

“What’s become clear in the literature is that maybe that’s not always be the case. And also the type of Lactobacilli is important. And also there’s really important differences between the vaginal microbiomes and what healthy might look like for caucasian women vs African American women, for instance,” she notes.

Her background includes a degree in biology and a masters in biochemical engineering — including specific work on microbiome science. It was via her experience of the research field that she says she realized there was a huge gap in women’s health research.

Juno Bio CEO and co-founder, Hana Janebdar (Photo credit: Juno Bio)

“What really shocked me what that while there was this explosion of research and work and commercialization of the gut microbiome and the soil microbiome and every microbiome under the earth that you could think of the vaginal microbiome had been relatively ignored,” she says, going back to 2017-18 and her inspiration for the startup.

“It really shocked me because of all the microbiomes the vaginal microbiome was the most readily accessible, the most readily associated with the conditions that could improve women’s lives and there were so many women that have these conditions — it was really a sense of hang on, what is going on? And why is this just so incredibly ignored?” she adds. “This needs to be fixed.

“As an Afghan woman — women’s rights and the fact that women are ignored, and medical health research has been sidelined when it comes to women — it’s a very core part of my actual experience as well.

Juno Bio’s ultimate goal is to gather enough data and understanding to be able to offer “microbial interventions” that can be used to correct problematic imbalances, per Janebdar.

“One of the saddest things… is the fact that microbial interventions could work but having it in this wishy-washy, probiotic, kombucha land has meant that people haven’t fully realized it’s real potential — and it’s really exciting that in the gut microbiome space, which is analogous to us, first the first time this year you’re seeing sort of phase three approved microbial interventions for the gut. So I see the vaginal space as analogous to that. And this is the kind of stuff that the Juno data-sets will unlock.”

Those shelling out to donate their vaginal microbiome data to Juno Bio’s repository are promised it will be “anonymized” — though clearly links will be retained to some individual data points, such as age and ethnicity.

The startup’s privacy policy can be found here — where it writes: “The information we use in Research is often summarised, aggregated, or combined across a group of subjects to minimize the chance of identification.”

“In the event we require use of individual-level Personally Identifiable Information in Research or for other purposes, we will reach out to you and obtain specific consents applicable to such other use,” it adds.

Juno Bio is being advised by Dr Gregory Buck, Ph.D., who was the principal investigator on the Vaginal Human Microbiome Project (VaHMP) and the Multi Omic Microbiome Study Pregnancy Initiative (MOMS PI) — two studies that were part of the US National Institutes of Health Human Microbiome Project.

Commenting in a statement about the launch of the test kit, Buck said: “While previous studies have worked to characterize the vaginal microbiome, these studies have often been limited in population size, utilize limited gene sequences and lack metadata. As a result, present studies now lack data and a comprehensive strain bank of vaginally associated microbes. Having dedicated much of my career to researching microbiomes of the female reproductive tract, I am confident that the Vaginal Microbiome Test will create one of the richest research repositories of data for future research into vaginal health and related issues. Not only that, but it will help change the stigma around vaginal wellness for the better.”

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Gusto is expanding from payroll into a full suite financial wellness platform

When we caught up with Gusto last year, the small business payroll startup had just raised $200 million and was launching a new office in New York City. Over the past few years though, Gusto has also been accruing new features outside of its original payroll product, features that redefine the borders between payroll and financial wellness, and in the process, are blurring the lines of the classic fintech market map.

SMB payroll startup Gusto raises $200M Series D, plans R&D expansion to NYC

Today, the company announced a slew of new offerings that it hopes will give employees better financial and health options through their employers.

The most interesting one here is a tool the company is calling Gusto Wallet. It’s an app and collection of products for employees paid through Gusto that basically acts as a mini bank and financial health monitor. It offers an interest-bearing cash account (called, appropriately enough, Cash Accounts) which can also divert a small slice of each paycheck into a user’s savings, similar to products like Acorns and Digit. Cash stored in the account earns 0.34% interest today, and you can also get a Gusto debit card to spend it.

Gusto’s app gives you access to financial services and wellness tools. Photo via Gusto

For employees, what’s interesting here is that these services are offered essentially for free: Gusto makes money on its payroll services from employers as a software subscription fee, and so it offers financial services like these as an inducement to keep employers and employees engaged. Gusto hopes that this can keep debt low for employees, and also offer them more financial stability, particularly as businesses open and close in the wake of COVID-19.

In addition, Gusto Wallet also offers “Cashout,” which can accelerate a payday ahead of time based on the pay history of an employee. Rather than securing a high-cost payday loan, the product is designed to help users smooth out a bit of their income if they need their paycheck a bit ahead of their actual direct deposit. It’s also free of fees.

Gusto CEO Joshua Reeves said that “One of the biggest problems is people are oftentimes living paycheck-to-paycheck — they’re either not saving money, or they’re getting stuck in debt accessing things like overdraft fees, or credit card debt, or payday loans.” The hope with Gusto Wallet is that its easy availability and low costs not only attract users, but leave them in much better financial shape than before.

What’s interesting to me is placing these new features in the wider scope of the fintech landscape. It seems that every week, there is another startup launching a consumer credit card, or a new debt product, or another savings app designed to help consumers with their finances. And then every week, we hear about the credit card startup launching a new savings account, or the savings app launching an insurance product.

The math is simple: it’s very, very hard to acquire a customer in financial services, and it’s so competitive that the cost per acquired customer is extremely high (think hundreds of dollars or more per customer). For most of these startups, once you have a customer using one financial product, much like traditional banks, they want you to use all of their other products as well to maximize customer value and amortize those high CAC costs.

Gusto is an interesting play here precisely since it starts at the payroll layer. Banks and other savings apps often try to get you to send your paycheck to their service, since if your money resides there, you are much more likely to use that service’s features. Gusto intercepts that transaction and owns it itself. Plus, because it ultimately is selling subscriptions to payroll and not financial services, it can offer many of these features outright for free.

Reeves said that “This is a future that just seems inevitable, like all this information right now is sitting in silos. How do we give the employee more of that ownership and access through one location?” By combining payroll, 401K planning, savings accounts, debit cards, and more in one place, Gusto is hoping to become the key financial health tool for its employee end users.

That’s the financial side. In addition, Gusto announced today that it is now helping small businesses setup health reimbursement accounts. Under a provision passed by Congress a few years ago, small businesses have a unique mechanism (called QSHERA) to offer health reimbursement to their employees. That program is riven with technicalities and administrivia though. Gusto believes its new offering will help more small businesses create these kinds of programs.

Given Gusto’s small business focus, this year has seen huge changes thanks to the global pandemic. “It’s been an inspiring, challenging, motivating, [and] galvanizing time for the company,” Reeves said. “Normally, I would say [we have] three home bases: New York, SF, [and] Denver. Now we have 1,400 home bases.” That hasn’t stopped the company’s mission, and if anything, has brought many of its employees closer to the small businesses they ultimately serve.

Gusto team, with CEO Joshua Reeves on the left of the second row. Photo via Gusto

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After breach, Twitter hires a new cybersecurity chief

Following a high-profile breach in July, Twitter has hired Rinki Sethi as its new chief information security officer.

Sethi most recently served as chief information security officer at cloud data management Rubrik, and previously worked in cybersecurity roles at IBM, Palo Alto Networks, and Intuit.

In the new role at Twitter overseeing the company’s information security practices and policies, Sethi will report to platform lead, Nick Tornow, according to her tweet announcing the job move.

So excited to be a part of the team @twitter working alongside @nicktornow @michaelmontano @paraga and more! https://t.co/SGoBLr5957

— Rinki Sethi (@rinkisethi) September 28, 2020

Sethi also serves as an advisor to several startups, including LevelOps and Authomize, and cybersecurity organizations, including Women in Cybersecurity.

Twitter had left the role of chief information security officer vacant since the departure of its previous security chief, Mike Convertino, who left in December to join cyber resilience firm Arceo.

In July, the company was hit by a very public cyberattack on the company’s internal “admin” tools that played out on the social media platform in real time, as hackers hijacked high profile Twitter accounts to spread a cryptocurrency scam. The hackers used voice phishing, a social engineering technique that involves tricking someone on the phone to hand over passwords or access to internal systems.

Earlier this month, the company said it bolstered its security following the attack, including rolling out security keys, which makes the kind of attack that targeted Twitter far more difficult.

A hacker used Twitter’s own ‘admin’ tool to spread cryptocurrency scam

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VTEX raises $225M at a $1.7B valuation for e-commerce solutions aimed at retailers and brands

Retailers and consumer brands are focused more than ever in their histories on using e-commerce channels to connect with customers: the global health pandemic has disrupted much of their traditional business in places like physical stores, event venues and restaurants, and vending machines, and accelerated the hunt for newer ways to sell goods and services. Today, a startup that’s been helping them build those bridges, specifically to expand into newer markets, is announcing a huge round of funding, underscoring the demand.

VTEX, which builds e-commerce solutions and strategies for retailers like Walmart and huge consumer names like AB InBev, Motorola, Stanley Black & Decker, Sony, Walmart, Whirlpool, Coca-Cola and Nestlé, has raised $225 million in new funding, valuing the company at $1.7 billion post-money.

The funding is being co-led by two investors, Tiger Global and Lone Pine Capital, with Constellation, Endeavour Catalyst and SoftBank also participating. It’s a mix of investors, with two leads, that offers a “signal” of what might come next for the startup, sad Amit Shah, the company’s chief strategy officer and general manager for North America.

“We’ve seen them invest in big rounds right before companies go public,” he said. “Now, that’s not necessarily happening here right now, but it’s a signal.” The company has been profitable and plans to continue to be, Shah said (making it one example of a SoftBank investment that hasn’t gone sour). Revenues this year are up 114% with $8 billion in gross merchandise volume (GMV) processed over platforms it’s built.

Given that VTEX last raised money less than a year ago — a $140 million round led by SoftBank’s Latin American Innovation Fund — the valuation jump for the startup is huge. Shah confirmed to us that it represents a 4x increase on its previous valuation (which would have been $425 million).

The interest back in November from SoftBank’s Latin American fund stemmed from VTEX’s beginnings. The company got its start building e-commerce storefronts and strategies for businesses that were hoping to break into Brazil — the B of the world’s biggest emerging “BRIC” markets — and the rest of Latin America. It made its name building Walmart in the region, and has continued to help run and develop that operation even after Walmart divested the asset, and it’s working with Walmart now in other regions outside the US, too, he added.

But since then, while the Latin American arm of the business has continued to thrive, the company has capitalized both on the funding it had picked up, and the current global climate for e-commerce solutions, to expand its business into more markets, specifically North America, EMEA and most recently Asia.

Revenues were growing at a rate of 50% a year before the pandemic ahead of it’s more recent growth this year of 114%, Shah said. “Of course, we would prefer Covid-19 not to be here, but it has had a good effect on our business. The arc of e-commerce has grown has impacted revenues and created that additional level of investor interest.”

VTEX’s success has hinged not just on catering to companies that have up to now not prioritized their online channels, but in doing so in a way that is more unified.

Consumer packaged goods have been in a multi-faceted bind because of the fragmented way in which they have grown. A drinks brand will not only manufacture on a local level (and sometimes, as in the case of, say, Coca-Cola, use different ingredient formulations), but they will often have products that are only sold in select markets, and because the audiences are different, they’ve devise marketing and distribution strategies on a local level, too. On top of all that, products like these have long relied on channels like retailers, restaurants, vending machines and more to get their products into the hands of consumers.

These days, of course, all of that has been disrupted: all the traditional channels they would have used to sell things are now either closed or seeing greatly reduced custom. And as for marketing: the rise of social networks has led to a globalization in messaging, where something can go viral all over the world and marketing therefore knows no regional boundaries.

So, all of this means that brands have to rethink everything around how they sell their products, and that’s where a company like VTEX steps in, building strategies and solutions that can be used in multiple regions. Among typical deals, it’s been working with AB InBev to develop a global commerce platform covering 50 countries (replacing multiple products from other vendors, typically competitors to VTEX include SAP, Shopify and Magento).

“CPG companies are seeking to standardize and make their businesses and lives a little easier,” Shah said. Typical work that it does includes building marketplaces for retailers, or new e-commerce interfaces so that brands can better supply online and offline retailers, or sell directly to customers — for example, with new ways of ordering products to get delivered by others. Shah said that some 200 marketplaces have now been built by VTEX for its customers.

(Shah himself, it’s worth pointing out, has a pedigree in startups and in e-commerce. He founded an e-commerce analytics company called Jirafe, which was acquired by SAP, where he then became the chief revenue officer of SAP Hybris.)

“We are excited to grow quickly in new and existing markets, and offer even more brands a platform that embraces the future of commerce, which is about being collaborative, leveraging marketplaces, and delivering customer experiences that are second-to-none,” said Mariano Gomide de Faria, VTEX co-founder and co-CEO, in a statement. “This injection of funding will undoubtedly support us in achieving our mission to accelerate digital commerce transformation around the world.”

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