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Three dimensional search engine Physna wants to be the Google of the physical world

In June of 1999, Sequoia Capital and Kleiner Perkins invested $25 million into an early stage company developing a new search engine called Google, paving the way for a revolution in how knowledge online was organized and shared.

Now, Sequoia Capital is placing another bet on a different kind of search engine, one for physical objects in three dimensions, just as the introduction of three dimensional sensing technologies on consumer phones are poised to create a revolution in spatial computing.

At least, that’s the bet that Sequoia Capital’s Shaun Maguire is making on the Cincinnati, Ohio-based startup Physna.

Maguire and Sequoia are leading a $20 million bet into the company alongside Drive Capital, the Columbus, Ohio-based venture firm founded by two former Sequoia partners, Mark Kvamme and Chris Olsen.

“There’s been this open problem in mathematics, which is how you do three dimensional search. How do you define a metric that gives you other similar three dimensional objects. This has a long history in mathematics,” Maguire said. “When I first met [Physna founder] Paul Powers, he had already come up with a wildly novel distance metric to compare different three dimensional objects. If you have one distance metric, you can find other objects that are a distance away. His thinking underlying that is so unbelievably creative. If I were to put it in the language of modern mathematics… it just involves a lot of really advanced ideas that actually also works.”

Powers’ idea — and Physna’s technology — was a long time coming.

A lawyer by training and an entrepreneur at heart, Powers came to the problem of three dimensional search through his old day job as an intellectual property lawyer.

Powers chose IP law because he thought it was the most interesting way to operate at the intersection of technology and law — and would provide good grounding for whatever company the serial entrepreneur would eventually launch next. While practicing, Powers hit upon a big problem, while some intellectual property theft around software and services was easy to catch, it was harder to identify when actual products or parts were being stolen as trade secrets. “We were always able to find 2D intellectual property theft,” Powers said, but catching IP theft in three dimensions was elusive.

From its launch in 2015 through 2019, Powers worked with co-founder and chief technology officer Glenn Warner Jr. on developing the product, which was initially intended to protect product designs from theft. Tragically just as the company was getting ready to unveil its transformation into the three dimensional search engine it had become, Warner died.

Powers soldiered on, rebuilding the company and its executive team with the help of Dennis DeMeyere, who joined the company in 2020 after a stint in Google’s office of the chief technology officer and technical director for Google Cloud.

“When I moved, I jumped on a plane with two checked bags and moved into a hotel, until I could rent a fully furnished home,” DeMeyere told Protocol last year.

Other heavy hitters were also drawn to the Cincinnati-based company thanks in no small part to Olsen and Kvamme’s Silicon Valley connections. They include Github’s chief technology officer, Jason Warner, who has a seat on the company’s board of directors alongside Drive Capital’s co-founder Kvamme, who serves as the chairman.

In Physna, Kvamme, Maguire, and Warner see a combination of Github and Google — especially after the launch last year of the company’s consumer facing site, Thangs.

That site allows users to search for three dimensional objects by a description or by uploading a model or image. As Mike Murphy at Protocol noted, it’s a bit like Thingiverse, Yeggi or other sites used by 3D-printing hobbyists. What the site can also do is show users the collaborative history of each model and the model’s component parts — if it involves different objects.

Hence the GitHub and Google combination. And users can set up profiles to store their own models or collaborate and comment on public models.

What caught Maguire’s eye about the company was the way users were gravitating to the free site. “There were tens of thousands of people using it every day,” he said. It’s a replica of the way many successful companies try a freemium or professional consumer hybrid approach to selling products. “They have a free version and people are using it all the time and loving it. That is a foundation that they can build from,” said Maguire.

And Maguire thinks that the spatial computing wave is coming sooner than anyone may realize. “The new iPhone has LIDAR on it… This is the first consumer device that comes shipped with a 3D scanner with LIDAR and I think three dimensional is about to explode.”

Eventually, Physna could be a technology hub where users can scan three dimensional objects into their phones and have a representational model for reproduction either as a virtual object or as something that can be converted into a file for 3D printing.

Right now, hundreds of businesses have approached the company with different requests for how to apply its technology, according to Powers.

One new feature will allow you to take a picture of something and not only show you what that is or where it goes. Even if that is into a part of the assembly. We shatter a vase and with the vase shards we can show you how the pieces fit back together,” Powers said.

Typical contracts for the company’s software range from $25,000 to $50,000 for enterprise customers, but the software that powers Physna’s product is more than just a single application, according to Powers.

“We’re not just a product. We’re a fundamental technology,” said Powers. “There is a gap between the physical and the digital.”

For Sequoia and Drive Capital, Physna’s software is the technology to bridge that gap.

 

Kanarys raises $3 million for its data-driven platform to assess diversity and inclusion efforts

Mandy Price was already a highly successful lawyer in private practice before she took the jump into entrepreneurship alongside two co-founders to launch Kanarys a little over one year ago.

The Harvard Law School graduated didn’t have to start her company, which helps businesses measure the efficacy of their diversity and inclusion efforts using hard data, but she needed to start the company.

Now, a year after its launch, the company counts companies like Yum Brands, the Dallas Mavericks, and Neiman Marcus among the dozen or so companies using its service and has $3 million in seed funding to help it expand.

For Price, the drive to launch Kanarys came from her own experiences working in law. It wasn’t the microagressions, or the lower pay, or casually dismissive attitude of colleagues toward her well-earned success that led Price to start Kanarys, but the knowledge that her experience wasn’t unique and that thousands of other women and minorities faced the same experiences daily.

I have had many things happen to me in the workplace that is similar to what many other women and women of color have dealt with and didn’t want to have my children have to go through similar issues,” Price said. 

So alongside her husband, Bennie King (himself a serial entrepreneur in the Dallas area), and her University of Texas at Austin and Harvard classmate, Star Carter, Price launched Kanarys in late 2019.

The company uses Equal Employment Opportunity reports and assessments of various policies involving promotion, recruitment, and benefits to track how a company is performing in relation to its industry peers.

“A lot of the inequities we see are from a structural and systemic standpoint. That is where Kanarys can see how they’re perpetuating inequity,” Price said. 

Kanarys starts with an independent assessment of a company’s policies and practices and then conducts quarterly surveys with employees of its customers to see how well they are meeting their stated goals and objectives. They also integrate with existing human resources systems to track things like pay equity and promotions.

The service has attracted the attention of the Rise of the Rest fund, Morgan Stanley, Jigsaw Ventures, Segal Ventures and Zeal Capital Partners, which led the company’s $3 million seed round.

“Organizations have typically tried to address this with individual interventions,” said Price. “What we’re saying is we have to address it on both fronts. So much of the inequities that we see are based off of institutional and systemic policies and practices.”

Not only does Kanarys track information on diversity and inclusion efforts for customers, but for job seekers there’s a database of about 1,000 companies which operates like Glassdoor . The focus is not just on worker satisfaction, but on how employees view the diversity efforts their employers are undertaking.

Notably, Kanarys founders join the (far-too-few) ranks of Black entrepreneurs launching businesses and raising venture capital. In 2017, studies showed that 98 percent of venture capital raised in the U.S. went to men, according to data provided by the company. Black entrepreneurs in general receive less than one percent of venture capital, and Black women founders make up only 0.6 percent of venture capital funding raised. 

“We know that a focus on DEI in business is not just the right thing to do for employees, it also makes good business sense,” said Price, CEO and co-founder of Kanarys, in a statement. “Kanarys’ DEI data arms companies, for the first time, to make precise, immediate, and informed decisions using real, intersectional metrics around their diversity goals and inclusion programs that ultimately drive bottom-line business objectives.”

 

LA gets a big SAAS exit as Fastly nabs the Culver City-based Signal Sciences for $775M

Los Angeles was always more than a one industry town, even when it comes to technology startups, but media and entertainment (and social networking) were always the big draws in tinseltown.

Now the city’s enterprise tech scene can claim a really big winner with Signal Sciences, the security monitoring and management company that is getting bought by Fastly, a provider of content delivery networking services, for $775 million.

“Our team couldn’t be more excited about the opportunity to join Fastly to continue to drive forward security protections that empower developers. But we also believe this is a great moment to showcase the diversity of the LA technology scene,” wrote Signal Sciences chief executive, Andrew Peterson, in a direct message. “Being the largest enterprise tech outcome ever here, we’re just one of so many great deep technology companies who are paving the way for the next generation of SoCal based start ups. We’re thrilled to help lead the way for the broader tech community in Los Angeles.”

Content delivery and security go hand-in-hand and some of the biggest companies online use businesses like Fastly and its competitor, Cloudflare, to ensure that their online presence doesn’t go offline — and that browsers can quickly download and deliver websites.

Fastly said that the acquisition of Signal Sciences’ business will boost its ability to provide better security for applications and APIs — the connective fabric between different services that knit different technologies together behind the scenes.

With the acquisition, Fastly is planting a flag as a new competitor in the cybersecurity market, even as companies like Amazon, Microsoft, and Google offer a wider array of services under their Internet as a service business lines.

Application security is a higher value piece of the services stack and it takes advantage of the natural position that a company like Fastly has as a content distribution network.

“Fastly was founded to meet developers’ need for greater visibility and control. Now, as the digital transformation movement continues to accelerate, DevOps teams are struggling with inadequate and inflexible security tools,” said Joshua Bixby, Chief Executive Officer of Fastly, in a statement. “Together with Signal Sciences, we will give developers modern security tools designed for the way they work.”

Under the terms of the agreement Fastly is buying Signal Sciences for $200 million in cash and approximately $575 million worth of stock, subject to customary adjustments for transactions, according to a statement.

Fastly is also setting up a $50 million retention pool of restricted stock units to give out to Signal Sciences employees.

Signal Sciences employees aren’t the only winners in the deal. The company raised $63 million in venture financing from investors including CRV, Harrison Metal, Index Ventures, Oreilly Alphatech Ventures, Lead Edge Capital, and individual investors including former Facebook security officer Alex Stamos, and Etsy chief executive Chad Dickerson.

The company’s last round was a $35 million investment raised about two years ago, and one investor with knowledge of the company’s cap table called it a “pretty efficient exit” for its backers.

Morgan Stanley & Co. and Union Square Advisors are acting as financial advisors to Fastly, and Cooley LLP is acting as its legal advisor with regard to the transaction, according to a statement. Qatalyst Partners is acting as financial advisor to Signal Sciences, while Goodwin Procter was the company’s lawyer.