All posts in “Private Equity”

Here are the winners of the Google Cloud machine learning pitch-off


Back in March at Google’s Cloud Next conference, the company announced plans to run its own machine learning startup competition side-by-side with Data Collective and Emergence Capital. Four months later, 10 startups, pulled from a pool of 350+ applicants, presented onstage at Google’s Launchpad Space in San Francisco.

The startups vied for three prizes — a choice each from DCVC and Emergence, as well as a Built with Google award for the top startup utilizing Google’s Cloud Platform. Additionally, Google provided $200k in GCP credits to all finalists. In advance of the competition, both VC firms committed to providing seed capital to their selections and both were involved from the beginning in diligencing applicants.

The event is in many ways the physical manifestation of GCP’s strategy to cozy up with machine intelligence startups. Google Cloud still lags behind Amazon and Microsoft in usage and the company is trying to position itself as “friendly” to a class of startups that will surely generate immense amounts of data at scale that needs to be stored somewhere. Founders participating in the competition pointed to both Kubernetes and TensorFlow as selling points for GCP — and of course, the free cloud credits don’t hurt.

We’ve briefly profiled the winners of each prize below and included a description of their reward.

DCVC’s Choice – BrainSpec

Alex Zimmerman, CEO of BrainSpec

$500K investment

BrainSpec is building its own platform that helps doctors measure brain metabolites using standard MRI equipment. Metabolites are the chemical result of cellular processes and often hold the key to understanding brain injuries, Alzheimer’s and other brain disorders.

Doctors can use Magnetic Resonance Spectroscopy, a traditionally complex process, to perform chemical analysis of tissue to detect key indicators of these neurological diseases. BrainSpec is simplifying this technique with a web interface and cloud-based statistical analysis.

Matt Ocko, a partner at DCVC, explained his investment by speaking to the sheer market size of the problem BrainSpec is looking to address. The startup brings strong domain expertise to a product with a clear path to productization and regulatory approval.

Emergence Capital’s Choice – LiftIgniter

Adam Spector, co-founder of LiftIgniter

$500K investment 

LiftIgniter, a former TC Disrupt Battlefield competitor, wants to help businesses personalize the content they deliver to users. Today, big players like Amazon and Spotify have their own advanced recommendation systems that drive engagement, but many other businesses struggle to deliver the same demanding technology.

The team, which had experience building YouTube’s machine learning recommendation system, is productizing its service around an API. The company says it has never lost an A/B test and is seeing strong traction with 1.8 million in ARR and 22 percent month-over-month growth.

The team also won an extra $500K in GCP credits as the runner-up for the Built with Google Award.

Built with Google Award – PicnicHealth

Noga Leviner, CEO of PicnicHealth

$1M in GCP credits

PicnicHealth is layering machine learning on top of its centralized digital medical record system to produce outcomes data for pharmaceutical companies and research groups.

The startup combines automated extraction with a team of human nurses to annotate anonymized records. Pharmaceutical companies in particular are willing to pay serious money for data to the extent that PicnicHealth is seeing $5,000 gross margins.

Patients using the consumer side of the platform retain control of their data and are in charge of entering their care providers. From there, Picnic automates record collection, analysis and releases.

Datatron raises $2.7M to help companies query real-time and historical data


Fresh out of 500 startups, Datatron has raised $2.7 million in seed financing for its data-savvy assistant, Emma. But under the somewhat trite coating of an assistant, Datatron is making it easier for employees to gather insights from the complex web of historical and real-time data.

Businesses generate hordes of data on uneven timelines. Some data is updated less frequently, like the number of Uber drivers registered in a given city. Other data is updated to the minute, like the number of active Uber drivers on standby for pickup. Combine this with the myriad other types of data and business logic and you create an intricate mesh of data that’s difficult to derive conclusions from.

Founded by Harish Doddi and Jerry Xu, Datatron helps businesses apply this data to specific use cases within traditional verticals like sales, marketing and finance. From a simplified dashboard, users can query key indicators derived from predictive models held within the platform.

Datatron originated as a platform solution for enterprises — performing real-time feature extraction and data cleansing to speed up the process by which insights can be derived from data. In recent months, the company added the aforementioned means of top-level interaction to open up the power of the platform to a wider audience.

One of the system’s early optimizations is for sales — helping teams quickly evaluate leads and determine where to spend their precious time and resources. Datatron ships with key integrations for platforms like Zuora, Salesforce, Marketo and Zendesk.

The company has raised capital from Start X, Credence Partners, Authentic Ventures, Enspire Partners, Plug and Play and 500 Startups, and says it’s already working with a number of early customers.

Featured Image: John Lund/Getty Images

Markett will get people paid to talk about their favorite tech companies


Franky Bernstein loves startups. His latest company, Markett, is born out of that love, and his innate desire to share tips about those innovative new startup companies with the wider world.

The 24-year-old serial entrepreneur first was bitten by the entrepreneurial bug while attending Loyola Marymount University, where, as a representative in student government, he began looking for a way to cut down on drinking and driving among the student body.

He found Uber. The ride-hailing service embraced the idea of a promotional deal for LMU students and Bernstein became a commission-based ambassador for the student body.

From there, Bernstein expanded his network, building a team of student ambassadors for the company’s ride-sharing app that were making hundreds — then thousands — of dollars per week.

That exposure led to the creation of Markett, Bernstein’s latest venture that connects everyday users with brands and gives them a way to make money by shilling for the companies they love.

After working with Uber, Bernstein reached out to Lyft and talked to Josh Renfro, the director of business development there. Working with Renfro, while still a student, Bernstein helped train thousands of brand ambassadors nationwide — and even converted several Lyft drivers into brand advocates.

“Working with Uber and Lyft planted the seed of entrepreneurship,” says Bernstein.

Indeed, Bernstein was so inspired by his brush with the startup world that he launched his own company. Bernstein’s first foray into the wild world of startup businesses was Interwallet (now called Maya), a bill-pay kiosk network for the underbanked.

Now, with Los Angeles-based Markett, Bernstein wants to give everyone the same opportunity he had — the ability to make money talking up the new startup services that they love.

We want to be the largest marketing company in the world that doesn’t spend any money on marketing.

— Franky Bernstein, chief executive, Markett

“Being able to work with Uber and Lyft isn’t easy to do, and I want to provide more access to that,” says Bernstein. Beyond that, Bernstein wants people to be able to make money talking about the products they love and give brands an opportunity to achieve more of a direct relationship with their customers.

To achieve that vision the company has raised roughly $2 million in venture financing from investors, including KEC Ventures, Amplify.LA, Luma Launch, Wavemaker VC, Tiller Partners, Building Blocks, and angel investors like Jamie Patricof, Michael Kane, Joseph Varet, Varun Pathria and John St. Thomas.

With the company’s launch, ambassadors can sign up to work with venture-backed companies like Airbnb, ThriveMarket, FanDuel, The Bouqs, Zeel and Winc.

Bernstein chose those companies because of their approach to their customers and their willingness to reward their brand ambassadors.

“Every consumer brand wants to increase word-of-mouth marketing and explore alternative marketing channels to Facebook and Google,” Bernstein wrote in an email. “Markett is seeking to redistribute a piece of these brands’ ad budgets and put it into the pockets of their loyal customers.”

Markett isn’t the first company to try this approach. A company called BzzAgent launched in 2001 to bring brand ambassadorship to the masses. The company, which raised around $14 million in venture funding, was acquired in 2011 for around $60 million.

The legacy of the viral marketing campaign remains… but for Bernstein it’s not about marketing… it’s about truly connecting power users to the companies they love, and having those companies reward their everyday spokespeople for the work they’re doing.

To ensure that he achieves this vision, Bernstein has committed to giving nearly 100 percent of the marketing budgets that Markett’s partners spend on the program to the Markett marketers. Any profits are dedicated to bonuses, Bernstein tells me. Eventually, the company intends to take a cut of every transaction.

“We want to be the largest marketing company in the world that doesn’t spend any money on marketing,” Bernstein says.

Columbus could be the next startup city

Ever since I wrote about the Midwest last year I’ve been keeping my eyes on Columbus. I decided to hold a small pitch-off to meet some of the startups I saw last time I had driven through. The pitch-off was a success and a company called Wyzzer took first place and the quirky Hopper Carts came in second. But what I really came away with was a new respect for Columbus as a startup hub.

You see, I grew up in Columbus and I wanted to see how much it’s changed.

And it has changed. A lot.

On the aggregate a city like Columbus is the model for the future. There is manufacturing, farming, retail, brewing, and ecommerce all in a few square miles. The people are ready to expand and learn and there are plenty of smart folks who are willing to leave high-priced real estate in New York and San Francisco to get a house with a back yard down the street from a beer garden in one of the city’s urban enclaves. I asked around and heard that things are getting even better. Here are a few points I discovered during my visit.

All eyes are on Columbus. And they can’t fail. The city just received a $277 million Smart City grant from the federal government to build out tools and techniques that will define the city of the future. So far it looks like the Mayor Andy Ginther and the city government is dragging its feet but there is hope. While other cities – most notably Pittsburgh – vied for the grant, Columbus got it on the power of private industry and public infrastructure. And now it has four years to deliver. I’ve met a few small startups who are trying to work with the Smart City task force to build out the initiative but there’s little promising thus far.

That said, it’s great Columbus got the nod. There is a lot of promise here as long as government gets into gear and starts working with local entrepreneurs and, most important, this grant can help a thousand startups blossom. It’s a win-win for the government and the city. It just can’t be squandered.

Further, the quality of life is about to hipsterize. In comparison to cosmopolitan Chicago and small, cool towns like Raleigh, Columbus is still a mixture of malls and suburbs. That’s swiftly changing. I lived in Columbus until college and I saw the rough and ready bars of the Campus and Short North District slowly wink out one by one. Then, when I began returning in the 2000s, I saw entire swathes of urban business turn into a sterile sprawl. In short, between 1993 and 2008 or so Columbus got boring.

That’s swiftly changing. The Short North District is a booming pleasure dome dedicated to deep fried pickles and great drinks. Upstarts like Hot Chicken Takeover and carts like PutItInYourFace are replacing the T.G.I. Fridays and Applebees. Microbrews have rousted Coors and Bud. Columbus, like so many other cities, has become comfortable, artisanal, and pleasant. But, because that process is just beginning, there’s still time to get in on the ground floor. There is plenty of room to grow. While many of the rich suburbs are hopeless as magnets for art and commerce the are still places in the city that have plenty of promise. As I wrote last week the city has plenty of rotting malls it can easily turn into unique shopping and eating experiences.

One con? The Columbus ecosystem is small. Columbus has a population of 835,957 with a regular influx of students that leaves over the summer. It’s long been known as a collector of corporate offices – Chase is here as is Nationwide and the Limited. It has never been an “entrepreneurial town” per se and instead depending on the steady flow of students from the halls of OSU to the cubicles of the corporates. That’s changing.

The ecosystem, however, is as nascent as other similarly-sized cities. A few things have been tried but few of the accelerators are able to keep successful entrepreneurs rooted to the city, an important aspect of ecosystem building. I’d like to see more of that over time and I’m sure that slowly but surely we can see some folks settling down to enjoy some Jenni’s and Donato’s with the natives.

Columbus startups need seed badly. There are a few VCs in the area – Rev1, Drive, and Loud Capital are names you hear often – but like most smaller markets the drive to fund smaller startups in negligible. Loud, a startup itself, is the closest to an on-the-ground seed group while Drive is looking for comfortable later stage investments. Accelerators like Fintech71 see the value of seed in specific markets but they’re finding deal-flow difficult. Therefore both investors and startups in the city are usually stuck – a situation is extremely common in cities like Columbus.

Startup Step-By-Step: Down

A year ago, after closing my first startup, I attended one of those conferences that you’re supposed to attend. There were a lot of old friends there, folks who I hadn’t seen in a while, and there was the usual collection of panels and panelists, Power Points and Pellegrino. As I stood in a sun-full room clutching a coffee someone asked me about my first startup.

The reaction was swift. First I felt the old gut churning, the fear. It was like bringing up the name of a family member who had recently died, like raising old ghosts. I started to talk – “We just were too early, it was a good experience” – but then it got harder and harder. A failure is a blow. It’s a pop to the nose, tears welling up not out of sadness but out of surprise and anger and disappointment. Disappointment in yourself, in your choices, in your inability to stick to it. A feeling that you should have done better. A feeling that you rarely get as an adult in a cubicle, sitting and waiting for the next paycheck. It’s a feeling that I knew I needed to feel but it was also a feeling that hurt to the core.

This isn’t a post about crying at a tech conference. That happened and it was at once embarrassing and enlightening. It’s a post about one or two things you’ll feel when you build and how to cope.

The brogrammer will say that you’re not ready to be an entrepreneur if you can’t handle this shit. He’s wrong and he’ll get his soon enough. This is a human activity more akin to art than science. Any art that doesn’t make you feel something is a waste of your time.

So when you embark on this remember that what you’re feeling is perfectly normal and perfectly dreadful. First, listen to your body. When we were raising funds in New York and the Valley I’d wake up in a panic. I’d wake up not wanting to work. For the first time in my career I didn’t want to go to my computer and get started. I was gaining weight. My guts were broken. The fear was palpable.

I tried to fix things through work but, and this is something I took with me to my new startup, Jaywalk, I found that what I needed was to walk or run. I needed to get out. Some kind of movement tended to calm me gave me a moment to solve my problems. One particularly rough day I walked 80 blocks through my neighborhood, from down near Green-Wood Cemetery to Downtown Brooklyn. It felt good to be out. I started running four times a week recently and I feel much better. I learned from my friend Rich that walking releases endorphins and helps the body heal itself.

Further, when you feel this way, when you wake up in a sweat day after day, there are few things to check. First, tell your partners or programmers what you’d like to change. There is always something – in our case we’d have long meandering talks about stuff that didn’t exist yet, a problem that is symptomatic of having a bad tech stack. In retrospect I couldn’t have changed much about that experience but you’ll find that you often feel better when your tech is going right. Find the thing you need to change. A startup is an engine for experimentation. Experiment in order to hone in on the true problem.

Raising is also a stressor. Again, the old Brosephian adage, “Suck it up, you big baby” doesn’t apply here. I’ve heard from hundreds of founders, candidly, that they hated raising. The rejection, the waiting, the curt emails back – all of these are arrows to the back. Eventually you fall. If you can bootstrap, do it. VC is in a strange place right now and the old days of team and a dream are over. Until new models firm up I’d honestly explore equity crowdfunding and crypto-based raises. I’ll write more on that later.

I also recommend something that I’ve been trying, a form of behavioral therapy. I ask myself why I feel this way, what immediately preceded the feeling, and then work out a solution. It’s drastically simplified but it helps.

Startups are full of stress. The stress of managing people, of quitting your full-time job, of handling the ups and downs of startup life all lead to a dangerous mix.

That mix is where I really wanted to go today.

Startups are dangerous in that they bring you the brink again and again. They can destroy you. I’ve seen too many young, promising entrepreneurs end their lives because of some perceived failure.