Startups Weekly: Is Y Combinator’s latest cohort too big?

Greetings from Chittorgarh, one of my stops on a two-week excursion through Goa and Rajasthan, India. I’ve been a little too busy exploring, photographing cows and monkeys and eating a lot of delicious food to keep up with *all* the tech news, but I’ve still got the highlights.

For starters, if you haven’t heard yet, TechCrunch launched Extra Crunch, a paid premium subscription offering full of amazing content. As part of Extra Crunch, we’ll be doing deep dives on select businesses, beginning with Patreon. Read Patreon’s founding story here and learn how two college roommates built the world’s leading creator platform. Plus, we’ve got insights on Patreon’s product, business strategy, competitors and more.

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On to other news…

Y Combinator’s latest batch of startups is huge

So huge the Silicon Valley accelerator had to move locations and set up two stages at its upcoming demo days (March 18-19) to accommodate the more than 200 startups ready to pitch investors (who will have to hop between stages at the event). There will also be a virtual demo day live-streamed for some investors to watch “because there are so few seats.” Here’s what I’m wondering… At what point is a YC cohort too big? If investors aren’t even able to view all the companies at Demo Day, what exactly is the point? Send me your thoughts.

Deal of the week

Another week, another SoftBank deal. The Vision Fund’s latest bet is autonomous delivery. The Japanese telecom giant has invested $940 million in Nuro, the developer of a custom unmanned vehicle designed for last-mile delivery of local goods and services. The startup, also backed by Greylock and Gaorong Capital, will use the cash to expand its delivery service, add new partners, hire employees and scale up its fleet of self-driving bots. And while we’re on the subject of autonomous, TuSimple, a self-driving truck startup, has raised a $95 million Series D at a unicorn valuation.

Mamoon Hamid and Ilya Fushman

The future of KPCB

TechCrunch’s Connie Loizos spoke with Mamoon Hamid and Ilya Fushman, who joined Kleiner Perkins from Social Capital and Index Ventures, respectively. The pair talked about Kleiner Perkins, touching on people who’ve left the firm, how its decision-making process now works, why there are no senior women in its ranks and what they make of SoftBank’s Vision Fund.

Here’s your weekly reminder to send me tips, suggestions and more to [email protected] or @KateClarkTweets

Facebook almost bought Unity

Facebook CEO Mark Zuckerberg considered a multi-billion-dollar purchase of Unity, a game development platform. This is according to a new book coming out next week, “The History of the Future,” by Blake Harris, which digs deep into the founding story of Oculus and the drama surrounding the Facebook acquisition, subsequent lawsuits and personal politics of founder Palmer Luckey. Here’s more on the acquisition-that-could-have-been from TechCrunch’s Lucas Matney.

Venture capital funds

Indonesia-focused Intudo Ventures raised a new $50 million fund this week to invest in the world’s fourth most populated country; InReach Ventures, the “AI-powered” European VC, closed a new €53 million early-stage vehicle; and btov Partners closed an €80 million fund aimed at industrial tech startups.

Xiaomi-backed electric toothbrush startup Soocas raises $30M

Startup cash

Jobvite raises $200M+ and acquires three recruitment startups to expand its platform play
Opendoor files to raise another $200M
DriveNets emerges from stealth with $110M for its cloud-based alternative to network routers
Figma gets $40M Series C to put design tools in the cloud
Xiaomi-backed electric toothbrush Soocas raises $30 million Series C
Malt raises $28.6 million for its freelancer platform
Elevate Security announces $8M Series A to alter employee security behavior
Massless raises $2M to build an Apple Pencil for virtual reality

Subscription scooters

Just when you thought the scooter boom and the subscription-boom wouldn’t intersect, Grover arrived to prove you wrong. The startup is launching an e-scooter monthly subscription service in Germany. Their big idea is that instead of purchasing an e-scooter outright, GroverGo customers can enjoy unlimited e-scooter rides without the upfront costs or commitment of owning an e-scooter.

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and General Catalyst’s Niko Bonatsos chat startups.

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Postscript wants to be the Mailchimp for SMS

Email is certainly not dead, despite many such exclamations, but there’s no question that it’s a bloated, seeping hog of a platform on which it’s incredibly difficult for businesses to develop meaningful relationships with customers.

Postscript, a startup launching out of Y Combinator’s latest class, wants to learn from what email marketing got right and translate that to the next frontier of B2C communications: SMS. It basically wants to be the Mailchimp for texts.

“We are witnessing the decay of email,” Postscript president Alex Beller tells TechCrunch. “User behavior is all SMS now and e-commerce traffic and web traffic, in general, are so heavily mobile.”

The startup specifically wants to focus on shaping how consumers and businesses engage in the relationship around online commerce. Do you have a subscription to some cook-at-home meal startup? Then maybe they’ll shoot you a message asking if you want to add a new dessert option to your meal this week. Reply “YES” to add. That’s it.

The startup handles ensuring that businesses have proper consent from users to get text messages sent to them. From there businesses are able to segment users, plan SMS campaigns with text and media and have everything backed up by a decent analytics suite so that customers can see what happens on the other end of the texts. Beyond campaigns, communications can be automated based on customer actions so they get some feedback after they make a purchase or other action.

Being at the forefront of a new frontier for communicating with customers seems to have its advantages. Postscript claims a 95+ percent open rate and 35 percent click-through rate, numbers that are pretty wild for marketers that have dealt with the stats on email campaigns.

Given that people are used to SMS as a means of conversation, people are also a lot more likely to respond and ask questions inside the chain, something the Postscript founders were a bit surprised by but soon built into their feature set alongside integrations with customer support platforms.

“We rushed out this inbound feature when we realized how much [communication] we had coming in from users,” Postscript CEO Adam Turner told TechCrunch. “It’s all about engagement, not just clicks… and a one-way communication channel.”

As a consumer, the idea that my text messages are soon going to be inundated by #brands elicits a gut reaction to burn it all down, but there’s an air of inevitability that SMS will become the next place that businesses want to infiltrate. We’re already getting updates from food delivery services and UPS; Postscript wants their platform to let people expand and manage these relationships.

There are a few reasons why you don’t have to gravely fear your texting app turning into a corporate dump. The opt-in process for phone communications is already a bit more codified in the U.S., and as companies attempt to stay in the good graces of GDPR for fear of the EU god, it might be more likely they tread carefully. Additionally, while SMS fees aren’t substantial, there’s certainly a more baked-in cost than with forwarding an offer to a huge bank of emails. Lastly, users just have to punch out a quick “UNSUBSCRIBE” to get out of messages from which they’ve gotten their fill, a standard across carriers.

Right now the company is closely integrated with Shopify so users can add this to their storefronts. Pricing varies based on the amount of messages you’re sending. There’s a free tier for sending 100 messages per month, $50/month for sending 1,000 and a few more tiers topping out at a 40,000 SMS per month/$1,500 tier.

Investors are pouring money into Latin America’s logistics and shipping businesses

New technology companies are poised to transform the shipping and freight industry across Latin America.

Startups like Liftit, a Colombian provider of trucking services, and Nowports, a Mexican freight shipping startup, are angling to be the next Convoy and Flexport — at a time when shipping and logistics business in Latin America is booming thanks to increasing trade coming from China.

In the first half of 2018, Chinese foreign direct investment in Latin America increased to a whopping $15.3 billion at the same time it plummeted in the U.S. to $1.8 billion. And while much of that investment had historically gone to minerals and natural-resource extraction or agriculture, China is also making infrastructure investments — just as it has in Africa.

“The most exciting sectors for innovation in shipping are in trucking, consumer/third-party shipping options, and in last-mile delivery,” writes the venture investor Nathan Lustig, a partner with the Chilean investment firm Magma Partners. “Startups in the logistics industry have their work cut out for them in Latin America, and these sectors are the most prominent battlegrounds for innovation so far.”

Some Latin American logistics companies — like the Brazilian trucking company CargoX — have gained the attention of investors like Goldman Sachs, The Blackstone Group and Samsung Ventures, thanks, in part, to being initially backed by Oscar Salazar, one of the minds that originally launched Uber. The company raised $60 million in its most recent round of funding, but has been on investors’ radar for years, thanks to its famous pedigree.

Now companies like Nowports are entering the fray. The company, which is graduating as part of the most recent crop of Y Combinator -accelerated startups, has set itself up to be the Flexport of Latin America.

Flexport became a billion-dollar business by applying technology to the outdated shipping industry, and Nowports is angling to do much the same.

Alfonso de los Rios and Maximiliano Casal met at a program at Stanford University, but both come from Mexico originally. And Mexico is where the company is operating. De los Rios comes from a shipping family and is very familiar with the time-consuming, manual practices that now dominate the Latin American shipping industry.

“One out of every two containers is lost or delayed because of miscommunication,” says de los Rios. “One container can get 300 emails between the freight provider and the shipper. We reduce the mistakes to zero and processing documentation three times faster than a normal freight provider in Latin America.”

To familiarize himself with the market for which he’d be developing a technology, Casal worked in a freight forwarder in Kansas City that had been operating for more than 30 years.

Nowports is operating from Monterrey and Mexico City and will soon be opening offices in Santiago and Montevideo, Uruguay.

“Right now we have four customers and we are moving 60 containers per month and we have a pipeline that will be growing to a very big number in March,” says Casal.

In all, freight providers are getting paid nearly $40 billion per year to move freight into Latin America.

If Nowports is building a new kind of shipping business, then Liftit, which just raised the largest Series A of any company hailing from Colombia, is looking to do the same with trucking.

The $14.3 million round was led by the International Finance Corp. and the Brazilian-based pan-Latin American investment firm Monashees.

Founded by serial entrepreneur Brian York, Liftit is looking to be the logistics provider for trucking in Latin America.

York, who was born in Bogota, but was raised by his adoptive parents in Boston, returned to Latin America after several years as a successful serial entrepreneur in the United States.

After several years of searching for his biological family and exploring his roots in-between running startups, York decided to return to Colombia more permanently. He found his biological brother (who is working for Liftit as a truck driver) and launched the company with a $2 million seed round.

The opportunity for logistics startups is vast. As Lustig notes:

The challenge of automating and streamlining shipping logistics in Latin America is becoming more pressing as e-commerce and other B2C delivery businesses take hold. Not only are large corporations dealing with sending and receiving bulk cargo across the region, but individual consumers want more on-demand services that require better organization and logistics.

Latin America still lags behind in the development of its shipping industry. The World Bank reported that in 2014, no Latin American country was in the top 25% of the Logistic Performance Index global rankings. In 2016, this figure hardly changed; Panama is the top-ranked Latin American country for logistics and shipping, yet it comes in 40th on the LPI global rankings. Chile is next at 46th, with Mexico and Brazil ranking 54th and 55th, respectively.

It’s with this in mind that investors are willing to open their wallets for startups in these emerging markets. And aligning the infrastructure in the region with 21st century standards will create even more opportunities as startups can take advantage of the more modern delivery and distribution tools at their disposal.