All posts in “United States”

Enterprise healthcare platform Collective Health raises $205M led by SoftBank

SoftBank’s Vision Fund may be facing some challenges when it comes to restocking its massive reserves, but the firm famous for cutting big checks is leading a sizeable round for Collective Health. This startup focused on enterprise employee healthcare management announced a $205 million Series E raise today, brining its total funding to $434 million since its founding in 2013. Its last raise was a $110 million round in February, 2018.

Collective Healths’ client list includes Red Bull, Pinterest, Zendesk and more, and it counts GV, NEA, DFJ Growth and Sun Life among its financial backers. Its platform is an integrator for the various insurance and benefit providers that large employers offer to the their employees, and provides access to info, as well as claims filing, eligibility checks and data sharing across vendors. The funding will also help with additional engineering hires to continue to build out the platform.

The funding will help the company add more partner providers, a process that’s key to continued growth as it seeks to expand its footprint and ensure that it can serve customers and their employees across the U.S. In addition to the Vision Fund, this round included new investors PSP Investments, DFJ Growth, G Squared, as well as new participation from existing investors.

Why is Andreessen Horowitz (and everyone else) investing in Latin America now?

Investments by U.S. venture capital firms into Latin America are skyrocketing and one of the firms leading the charge into deals is none other than Silicon Valley’s Andreessen Horowitz.

The firm that shook up Silicon Valley with potentially over-generous term sheets and valuations and an overarching thesis that “software is eating the world” has been reluctant to test its core belief… well… pretty much anywhere outside of the United States.

That was true until a few years ago when Andreessen began making investments in Latin America. It’s the only geography outside of the U.S. where the firm has committed significant capital and the pace of its investments is increasing.

Andreessen isn’t the only firm that’s making big bets in companies south of the American border. SoftBank has its $2 billion dollar investment fund, which launched earlier this year, to invest in Latin American deals as well. (Although the most recent SoftBank Innovation Fund investment in GymPass is likely an indicator that the fund, much like SoftBank’s “Vision” fund, has a pretty generous interpretation of what is and is not a Latin American deal.)

“We previously didn’t invest internationally, [because] we weren’t as well set up to help these companies,” says Angela Strange, a general partner at Andreessen Horowitz . “Part of the reason for why LatAm is proximity.”

Symphony, a messaging app that’s been a hit with Wall Street, raises $165M at a $1.4B valuation

Slack’s rapid rise and upcoming IPO are clear signs of the ripe opportunity to be had in the field of enterprise messaging. Today, a startup that’s built a messaging product specifically for the financial services vertical is also proving that out. Symphony, which offers secure messaging and other collaboration tools for bankers and those who work with them, is today announcing that it has raised $165 million. With this round, Symphony’s valuation now tops $1.4 billion.

The funding comes from Standard Chartered and MUFG Innovation Partners (a division of Mitsubishi that makes fintech investments), and also included other (unnamed) current and new investors. Symphony has now raised a very hefty $460 million, with previous backers including Google, Lakestar, Natixis, Societe Generale, UBS, Merus Capital and BNP Paribas, along with a consortium of 14 of the world’s largest investment banks and money managers, including Bank of America, BlackRock, Citibank, Deutsche Bank, Goldman Sachs, HSBC, and JP Morgan.

Notably, its financial backers are all strategic investors in the company: they use Symphony both for internal collaboration as well a channel to communicate with outside partners and integrate data from across their networks in a secure and compliant way.

And before you consider Symphony’s expansion into new products and plans for the funding — more on those below — that usage has been on an upward trajectory. With an expanded presence outside of its home market of the US into Europe and Asia, the company now has 425,000 users across some 400 companies using its mobile and desktop apps for messaging, voice and video conversations, and more. As a point of comparison, when the company last raised money, in 2017, it had 200,000 paying customers. 

Even given that rapid take up of messaging, and of Symphony in particular, the size of this round came by surprise. In an interview earlier, David Gurlé, Symphony’s founder and CEO, said the original intention was to raise a more modest $50 million – $75 million. It appears that when your primary customers are also investors, things can ramp up quickly.

The funding will be used to continue growing the platform’s functionality, both organically and by way of acquisitions. In terms of the latter, areas where Gurlé believes Symphony would be better off buying rather than building itself include market intelligence and IT integration (indeed, there are a number of players in both areas and so consolidation may well be on the cards).

In terms of breaking new ground on its own, Gurlé said that a lot of it is dictated by Symphony’s customers. “A year ago, customers started approaching us looking for workflow automation tools,” he said, “and that was the beginning of a new chapter for us.”

That came in the form of a new product called Symphony Market Solutions, with many of the companies now adopting its product doing so in the context of “digital transformation” agendas — bringing their IT infrastructure and what it’s there to serve up to speed with modern developments.

For banks and others in the financial services industry, this is a notable development: more than any other vertical, except tech itself of course, financial giants have long been recruiters and builders of their own innovative IT services. That was in part because that is what necessity dictated: with tens of billions of dollars at stake, proprietary trading software built to do something better than your rivals can could give you a distinct advance. And part practicality: it can help you keep a better security and audit trail for what passes through that product.

Fast forward to today, and banks are cutting costs like everyone else, and they are also suffering from the brain drain that has hit many other verticals: big technology companies, and the lure of building a potentially lucrative startup, have become magnets for many of the greatest technical minds.

That has resulted in an interesting emergence of companies that are building products for these companies, knowing specifically what they need, and they’re getting more face time and consideration by buyers than ever before. Symphony is not the only one; BlueVoyant — which also recently raised funding — has also developed a similar proposition specifically in the area of security.

In terms of what else is coming on the horizon and Gurlé noted that the majority of traffic on Symphony today is related to internal communications, with a healthy proportion of that not between humans but humans and chatbots — there are now 1,000 on the platform — that they query to update or gather information.

“Symphony has generated tremendous interest for revolutionising buy-side and sell-side secure messaging and collaboration in global markets, both in content curation and consumption as well as the workflow across the whole deal life-cycle,” said Yann Gerardin, Deputy Chief Operating Officer and Head of Corporate and Institutional Banking at BNP Paribas, in a statement.

On the use of the chatbots, Darren Cohen, global head of Principal Strategic Investments (PSI), Goldman Sachs, noted that it’s a likely sign of how the product and the banking industry will continue to developl “The rapid proliferation of Symphony bots and application integrations across the trade lifecycle and throughout the enterprise gives us a glimpse into the future,” he said in a statement. “Symphony’s secure infrastructure and diverse ecosystem will enable the industry to unlock significant operational efficiency and meaningfully enhance the client experience.”

The other side of the communications are coming from organizations that are using Symphony to communicate with each other and share information across walled gardens.

Alex Manson, Global Head of SC Ventures, Standard Chartered, pointed out in an interview that this is helping Symphony expand its presence in other verticals, for example with the accounting and legal firms that are using the app to communicate with their clients, who are already using Symphony.

Another vertical that’s seeing some early traction with Symphony is government, which has a similarly strong need for security and audit trails. The startup is currently running some trials with government groups but declined to provide details on them.

Interestingly, Symphony is also exploring another kind of walled garden expansion:

Gurlé said that within banks, wholesale and retail sides are looking to work together more closely, and they are using Symphony for that purpose. In one product that Symphony is still developing, it’s looking of ways of incorporating popular consumer messaging applications like WhatsApp and WeChat into its system as well: “This is where a large proportion of the retail side’s users are,” he said. The idea is that these kinds of integrations will help create and track conversations on those consumer platforms more easily, helping with the bank’s wider audit trail. 

For its investor-customers, Symphony represents not just a service that can help them get their jobs done more efficiently, but an opportunity for learning at a time when many fintech startups, including challenger banks, are nipping at incumbents’ feet.

“What is the bank of today versus the bank of tomorrow?” Manson said. “Collaboration tools give us the potential to bridge verticals, especially as the lines between them become blurry.”

As Alzheimer’s costs soar, startups like Neurotrack raise cash to diagnose and treat the disease

As studies show that early diagnosis and preventative therapies can help prevent the onset of Alzheimer’s, startups that are working to diagnose the disease earlier are gaining more attention and funding.

That’s a boon to companies like Neurotrack, which closed on $21 million in new financing led by the company’s previous investor, Khosla Ventures, with participation from new investors Dai-ichi Life and SOMPO Holdings.

Last year, the Japanese life insurance company, Dai-ichi Life partnered with Neurotrack to roll out a cognitive assessment tool to the company’s customers in Japan.

And earlier this year, the Japanese health insurer, SOMPO conducted a 16-week pilot with Neurotrack, where more than 550 of SOMPO’s employees took Neurotrack’s test and followed the Memory Health Program for four months. Neurotrack and SOMPO are now working to deepen and extend their partnership.

“As the global crisis around Alzheimer’s continues to grow, the private sector is joining government and nonprofits to address the problem in their markets. In Japan, for example, traditional insurance companies are developing novel solutions that incorporate Neurotrack’s products to advance better memory health among its population,” said Elli Kaplan, Neurotrack Co-founder and CEO. “These partnerships are innovative models that we hope to replicate in other markets, enabling traditional insurance companies to create new markets while helping to address the Alzheimer’s crisis. And now they’re also investing in our company so these companies have two ways of doing well by doing good.”

Neurodegenerative disorders are becoming a more serious issue for the island nation — and the rest of the world. In fact, over the weekend the G20 first raised the possibility that aging populations could be a global risk.

“Most of the G20 nations already experience or will experience ageing,” Bank of Japan governor Haruhiko Kuroda, told reporters from Agence France Presse. “We need to discuss problems that arise with societal aging and how to deal with them.”

In the U.S., the estimated cost of caring for Americans with Alzheimer’s and other dementias was an estimated $277 billion in 2018, according to a study cited by WebMD. Roughly $186 billion of those costs are borne by Medicare and Medicaid with another $60 billion in payments coming out-of-pocket. That number could top $1.1 trillion by 2050, according to the same report.

Neurotrack uses cognitive assessments that follow eye movements using the camera on a computer or mobile phone to create a baseline for cognitive functions. The company then uses a combination of brain training and diet, exercise, and sleep adjustments to try and improve cognitive function and health.

Its technology is one of several different approaches startups are taking to try and provide early diagnoses and potential preventative measures against the disease.

MyndYou is another company tackling neurodegenerative diagnostics uses an app to monitor movement among its users. The company assesses that data to determine whether there may be any issues related to cognitive function.  It recently partnered with the Japanese company Mizuho to test its efficacy among Japan’s aging population.

MyndYou partners with Mizuho to expand senior care services assessing cognitive degeneration

Then there’s Altoida, another startup which launched recently to tackle the cognitive assessment market. It uses augmented reality and a series of memory tests to assess brain function and attempt to detect neurodegeneration.

Neurotrack’s technology, based on research from Emory University, has managed to attract more than just Japanese corporations. Previous investors like Sozo Ventures, Rethink Impact, AME Cloud Partners, and Salesforce founder Marc Benioff have also thrown cash behind the company.

To date, the company has raised more than $50 million including $6.8 million in grants from the National Institutes of Health and National Institute of Aging.

The company said its new investment will be used to develop new partnerships in additional global markets and continue research and development.

“One can now feel empowered to test for potential memory decline, given that Neurotrack’s Memory Health Program can help stave off cognitive decline. This fully integrated platform enables users to assess the state of their memory, reduce future risk for decline, and monitor progress in order to take better control of one’s memory health. We combine these tools with deep analytics to further target and personalize, creating a very powerful precision medicine solution,” said Kaplan. “Just as when you go on a diet, you use a scale to provide evidence that you’re losing weight. Neurotrack now has the equivalent of both a scale to measure and the Memory Health Program for cognitive health. This is a game-changer for dementia risk.”

Japan has national efforts targeting a reduction in the onset of dementia in 6% of people in their 70s by 2025 (the country has the world’s largest population of the elderly with over 20% of the country over the age of 65). Roughly 13 million people are expected to develop Alzheimer’s in Japan by 2025.

Using augmented reality, Altoida is identifying the likely onset of neurodegenerative diseases

Part of the company’s success in fundraising comes from the results of a preliminary study that showed improved cognitive functions for people diagnosed with some decline in cognitive function after a year of using Neurotrack’s Memory Health Program. The company claims it has the the first fully integrated, clinically-validated platform that can assess a person’s cognition through its cognitive assessment — which can predict conversion from healthy to mild cognitive impairment (MCI) or MCI to Alzheimer’s disease within 3 years at 89% accuracy, and within 6 years at 100% accuracy.

While that kind of assessment is good, Alzheimer’s symptoms can begin to appear as early as 25 years before the onset of the disease. So there’s still work to be done.

“Neurotrack has built an incredible integrative platform that is transforming our battle with Alzheimer’s,” said Jenny Abramson, Founder & Managing Partner of Rethink Impact. “Elli’s two decades of experience in the private sector and in government are helping her scale this solution to the millions of people suffering from cognitive decline around the world. We couldn’t be more excited to continue to support Neurotrack, given both the financial opportunity and the impact they are already having on this critical disease.”

Colombian point-of-sale lender ADDI nabs $12.5 million from Andreessen Horowitz

Andreessen Horowitz <3 Latin American startups.

Latin America is the only region outside of the U.S. where the venture firm is routinely investing capital, and it just made another commitment, doubling down on its early-stage support for the point-of-sale lending startup ADDI.

ADDI picked up $12.5 million in new financing in April of this year as the company looks to expand its lending services online.

For an American audience, the closest corollary to what ADDI is up to is likely Affirm, the point-of-sale lender that’s raised a ton of cash and come in for some (valid) criticism for its basic business model.

Like Affirm, ADDI lets its borrowers apply for credit at the moment of purchase. The company likens its service to the layaway and credit plans that already exist in Colombia — but involve pretty onerous requirements to use. Company co-founder Santiago Suarez and Andreessen Horowitz general partner Angela Strange both commented on how, in some cases, Colombian shoppers have to have three people vouch for a borrower before a store will issue credit or agree to a layaway plan.

The difference between an ADDI loan — or any loan — and layaway is that an installment payment plan doesn’t charge interest (and even with the fees that installment plans do charge, they are often still cheaper than taking out a loan).

But financial products are coming for consumers in Latin America whether those buyers like it or not — and for the most part, it seems they do like it.

Historically, only the wealthiest clientele in Latin America received anything resembling the kinds of financial products that are more widely available in the United States, according to Strange. And the investment in ADDI is just part of her firm’s thesis in trying to make more services more broadly available in a region where a technological transformation is creating unprecedented opportunities for challengers.

That assessment is what drew Santiago Suarez back to Latin America only two years ago. A former executive at Lending Club who previously had worked as the head of New Product Development and Emerging Services at J.P. Morgan, Suarez saw the tremendous growth happening in Latin America and returned to Colombia to see if he could bring some much needed services to his home country.

Suarez partnered with his childhood friend, Elmer Ortega, who was working as the chief technology officer of the local hedge fund where he had previously been employed as a derivatives trader before learning how to code.

Together, the two men, who had known each other since they were five years old, set out to transform how credit was offered in retail shops. It’s an industry that Suarez had known well since his parents had owned stores.

“In the U.S. there are all of these gaps that fintech companies are filling,” says Suarez. “But the gaps in Latin America are bigger.”

Suarez and Ortega incorporated the company in September 2018, around the same time they raised $2.3 million from the regional investment firm, Monashees, Andreessen and Village Global . They then raised another $1.5 million in an internal round of financing before closing the most recent funding.

The company offers loans at annual percentage rates ranging from 19.99% to 28.90%. The company started with a digital solution for brick and mortar retailers because 90% of retail in Colombia still happens offline. 

Although it’s in its early days, the company has already originated 10,000 borrowers and typically loans out roughly $500 since it launched on February 22, according to Suarez. He declined to comment on the company’s default rate on loans.

Now with 40 employees on staff, the company is looking to bring its lending tool to more e-commerce and physical retailers, according to Suarez. And despite the threat of cyclical political turmoil, Suarez says there’s no better time to be investing in Colombia. 

“It’s the most stable country outside of Chile… Way more stable than Brazil, way more stable than Argentina and way more stable than Mexico,” Suarez says. “What we’re looking at is more than cyclical instability… those things go beyond that. Nubank was able to build a multibillion business in the worst political and economic crisis in Brazil’s history. I think Colombia is an incredibly attractive space with a deep talent pool.”