Author: Kate Clark

Wellness startup Hims enters the unicorn club with $100M investment

Hims, known by many for its phallic New York subway advertisements, has raised an additional $100 million in venture capital funding on a pre-money valuation of $1 billion. The round was first reported by Recode and confirmed to TechCrunch by sources with knowledge of the deal. A growth-stage investor has led the round, which is ongoing, with participation from existing investors. Our source declined to name the lead investor but did say it was a “super big fund” that isn’t SoftBank and that hasn’t previously invested in Hims. Hims officially launched just over one year ago and has raised $197...

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Former Munchery employees sue company, blame CEO for shutdown

The Munchery saga continues. In a new class-action lawsuit, former Munchery facilities worker Joshua Philips is claiming the startup owes him and 250 other employees 60 days’ wages, citing The Worker Adjustment and Retraining Notification Act, a U.S. labor law that requires employers with an excess of 100 employees to give notice 60 days ahead of mass layoffs. Munchery, a prepared meal delivery company headquartered in San Francisco, announced in an email to customers on January 21 that it would cease operations, effectively immediately. The abrupt shutdown not only came as a surprise to Munchery’s community of customers, but shocked vendors, many whom had been expecting payments from the business for several weeks. Munchery’s own employees were left in the dark, too, according to several former workers who spoke to TechCrunch about their debt and dissatisfaction with chief executive James Beriker. Munchery ordered mass layoffs on January 21, per the lawsuit, the same day customers were notified the company would go out of business. In total, Philips is seeking equal to the sum of his and other affected employees’ “unpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 401(k) contributions and other ERISA benefits, for 60 days, that would have been covered and paid under the then-applicable employee benefit plans.” Munchery is deep in a pile of debt. The startup’s former vendors, which includes San Francisco-based Dandelion Chocolate and...

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Sapphire Ventures bets big on esports and entertainment with new $115M fund

Sapphire Ventures, formerly the corporate venture capital arm of SAP, has lassoed $115 million from new limited partners (LPs) to invest at the intersection of tech, sports, media and entertainment. A majority of the LPs for the new fund, called Sapphire Sport, have ties to the sports industry, from City Football Group, which owns English Premier League team Manchester City, to Adidas, the owners of the Indiana Pacers, New York Jets, San Jose Sharks and Tampa Bay Lightning, among others. The firm plans to do five to six investments per year, sized between $3 million and $7 million. So far, they’ve deployed...

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Startups Weekly: Is Munchery the Fyre Festival of startups?

It was a tough week. Journalists around the U.S. were hit hard by layoffs, from HuffPost to BuzzFeed News to Verizon Media Group, which owns this very site. The government entered day 35 of the shutdown before President Donald Trump agreed to a short-term deal to reopen it for three weeks. And in the startup world, a once high-flying, venture-subsidized food delivery startup crashed and burned, leaving a cluster of small businesses in its wreckage. Some good things happened too — we’ll get to those. Munchery fails to pay its debts In an email to customers on Monday, Munchery announced it would cease operations, effective immediately. It, however, failed to notify any of its vendors, small businesses in San Francisco that had supplied baked goods to the startup for years. I talked to several of those business owners about what they’re owed and what the sudden disappearance of Munchery means for them. #Theranos #Content If you haven’t read John Carreyrou’s “Bad Blood,” stop reading this newsletter right now and go get yourself a copy. If you love to read, watch and listen to the Theranos saga as much as I do, you’ll be glad to hear there’s some fresh Theranos content released to the world this week. Called “The Dropout,” a new ABC documentary and an accompanying podcast about Theranos features never-before-aired depositions. Plus, TechCrunch’s Josh Constine reviews the Theranos documentary, “The Inventor,”...

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The Predictive Index brings in $50M to help businesses create winning teams

Funding will get you a long way, but people, at the end of the day, are the key to a successful business. The Predictive Index, which develops behavioral and cognitive employee assessments, has raised a $50 million round of growth-stage capital from venture capital firm General Catalyst to help companies choose the right talent. Kirk Arnold, an executive-in-residence at General Catalyst and new Predictive Index board member, led the deal for the VC firm, which says the round is the largest first check they’ve ever written a company. Predictive Index declined to disclose the valuation. The workplace analytics service was founded in 1955, making it just a bit older than your typical growth-stage business. Current chief executive officer Mike Zani (pictured, right) acquired the company in 2014 with Predictive Index president and chairman Daniel Muzquiz (pictured, left). Prior to the acquisition, the pair were clients of the business. With the infusion of VC funding, Zani said he’ll double employee headcount, create a playbook on how to “successfully design, hire and inspire winning teams” and create a talent optimization industry conference, amongst other big plans. “Most companies are losing the talent war, and not because of the lack of fight, but rather because strategic talent strategies are non-existent or broken,” Zani told TechCrunch. “The irony is that talent is one of the only lasting differentiators in business today. Most tools in the...

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Asian food delivery startup Chowbus raises $4M

When one food delivery startup fails, another gets funded. Chowbus, an Asian food ordering platform headquartered in Chicago, has brought in a $4 million “seed” funding led by Greycroft Partners and FJ Labs, with participation from Hyde Park Angels and Fika Ventures. The startup, aware of the challenges that plague startups in this space, says offering exclusive access to restaurants and eliminating service fees sets it apart from big-name competitors like Uber Eats, Grubhub, DoorDash and Postmates. The Chowbus platform focuses on meals rather than restaurants. While scrolling through the mobile app, a user is connected to various independent restaurants depending on what particular dish they’re seeking. Chowbus says...

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After an abrupt shutdown, Munchery’s small business vendors are the ones picking up the bill

Munchery’s vendors claim the food delivery startup took advantage of them in its final hours, knowingly allowing them to continue making deliveries it couldn’t pay for. Earlier this week, Munchery surprised customers with an email announcing it would cease operations, effective immediately. It did not, however, notify any of its vendors of the news, according to the owners of several small San Francisco-based businesses, who told TechCrunch they are owed thousands in overdue Munchery payments. Charles Farriér, the owner of Crumble & Whisk Patisserie, is waiting on a $1,700 payment from Munchery. Lenore Estrada of Three Babes Bakeshop said she’s owed more than $20,000. Melissa Cohen of Salty Sweet Cookies, Jennifer Roy of Dandelion Chocolate and Jennifer Nguyen of Native Baking Co. are expecting a total of $16,417.50. Munchery was founded in 2010 by former chief executive officer Tri Tran and Conrad Chu, who have both since left the company. It had raised a total of $125 million in venture capital funding, reaching a valuation of $300 million at its peak. Supported by notable Silicon Valley investors, including Greycroft, Menlo Ventures and Sherpa Capital, the high-flying startup failed to deploy capital efficiently, then crumbled.  Now, three days after its sudden announcement, several vendors are waiting anxiously for their final invoice checks, and say they weren’t notified of Munchery’s end, nor has the business responded to persistent requests for explanations. Munchery has not...

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Meet the startups in Alchemist’s 20th cohort

Yesterday, enterprise tech accelerator Alchemist announced a fresh $2.5 million in venture capital funding. Today, it presented its latest cohort of startups, 19 in total, to a jam-packed audience of investors. Alchemist invests $36,000 in companies with a revenue stream that come from enterprises, not consumers, with a bent toward technical founders. Its 20th cohort included a mental health startup, a construction tech business, a fintech company and more. Here’s a quick look at the startups that just completed its six-month program: Cruz Foam: Makes compostable packaging “from the ocean for the ocean.” Instead of using finite petroleum-based materials, Cruz Foam...

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