Blog

Sometimes the tech world moves faster than our blog does, and that’s why we’re just getting around to congratulating Homebrew portfolio founder Adam Ludwin on the forming of Interstellar, a combination of his company, Chain, with Lightyear, a Stellar-focused development company.

Chain was one of the original “the blockchain is more than just Bitcoin” companies and its API/developer platform supported the efforts of several large financial services institutions in building atop the blockchain. Along the way, Adam also became a strong, clear voice in the industry for building software and value, not just hype. When he shared that Chain and Stellar were combining forces, it made total sense to us given where the industry is headed and what infrastructure it needs to unlock new opportunities for developers and end users. We’re thrilled with the outcome for the team and for the early investors (of which we were a small supporting piece).

Thanks to Adam and the entire Chain team!

This week Homebrew portfolio company Abacus announced its acquisition by Certify. We first met New York-based Abacus while the product was still formative but it was clear the founding team clearly had the combination of vision, mission and grit that sets great startups apart. Homebrew became a supporting investor in their seed round and got a front row seat to watching them develop a truly well-designed product. We won’t go so far as to suggest they made expense reporting fun, but how about 99% less painful for everyone involved? Congratulations to the Abacus team!

We’re believers that the benefits of a technology-driven economy don’t just have to accrue to the largest corporations and wealthiest consumers. We’ve put investment capital behind that belief throughout the Homebrew portfolio. Today one of those companies, Even, announced a $40 million Series B to continue expanding its budgeting and instant payday tools. Even delivers its product through large employers - such as the extensive partnership they have with Walmart - or directly to consumers. Either way, the customer gets a suite of tools to help them avoid payday loans and make strides towards financial security. Congrats Team Even!

With 1 million users in over 10k markets, Winnie is doing it. As we’ve have the chance to observe since the earliest days, the team members at Winnie are doers. Creating and scaling a product for millennial parents and caregivers who are amazingly underserved by a market where the incumbent brands started as magazines with outdated, gendered stereotypes of parenting and family. The Winnie team is building the new hub for parents, one which mixes data and community in ways that similar startups have struggled to implement at scale. TechCrunch has some more details on how it’s all coming together.

We’ve been impressed, but not surprised, by how Sara and Anne, Winnie’s founders, approach building their company as a product - deliberately and with a strong point of view. They’ve created a welcoming, inclusive environment that has brought together a group of people who are mission-driven while maintaining operational excellence. And as early stage investors, that’s a combination which earns not just our support but also our respect. We’re very proud to be part of Winnie’s mission and journey with this latest financing.

When we started Homebrew in 2013 we had the feeling retail and logistics were going to be transformed by technology. Every company was becoming a “technology company” and entrepreneurs with insights into both enterprise and consumer needs had a chance to build something special. Jaron Waldman, CEO of Curbside, struck us as one of those founders and we were thrilled he let us sneak a supporting check into a near-closed financing.

Last week Jaron announced that Rakuten was acquiring his company, with the intent to keep Curbside operating as an independent - and turbo-charged - entity. Jaron sold his previous company to Apple, so he’s no stranger to these relationships and now has successfully landed two startups impressively. But even more exciting to us is his skill as a leader - Rakuten has in their hands a great team, a solid product footprint and a CEO who knows how to scale. Congrats to everyone involved.

The intersection of technology and financial services is a theme that Homebrew has focused on since the beginning. In 2013, we invested in Chime because of its mission to democratize access to banking through less expensive and more customer-centric offerings. Five years later, the company is now the leading challenger bank in the US. With the announcement of its $70 million Series C financing, Chime is continuing to change the relationship between consumers and their bank. We’re thrilled to have been along for the journey and couldn’t be more excited for the future of banking being defined by Chime. If you think banks can do better, join the growing team at Chime and help build a bank that saves consumers money.

At Homebrew, we talk about investing in companies with both value and merit. Companies that have the potential to generate tremendous economic wealth for their stakeholders while also contributing positively to the greater world. When we met Mariana Matus and Newsha Ghaeli at Biobot Analytics, we were struck with how much the business resonated with our goals. Biobot works with city governments to collect wastewater for analysis of population health. Its first product is helping tackle one of the most significant problems facing our country - the opioid epidemic. By analyzing metabolites in wastewater, cities can better understand opioid use in their geographies, allowing public sector and non-profit organizations to better allocate resources and evaluate the impact of their interventions over time.

We’re incredibly proud to be supporters of Biobot and participants in its $2.5 million seed financing. The company is already working with Cary, NC and will be launching efforts with additional cities later this year. If you’re interested in joining the company on its mission or want to learn more about how Biobot can help your city, you can reach the company here.

It’s no secret that there’s a lot of activity in the blockchain and cryptocurrency markets. It’s been fascinating to watch how quickly the space has evolved since our investment in Chain back in 2014. Over the long term, we believe in the power of the underlying technologies and potential applications. But in the short term, we’ve tried to focus our investing on the building blocks needed to allow for mainstream use and adoption of the tech and apps. In addition to security, stability and scalability, one of those building blocks is identity. So when we met Preethi Kasireddy we couldn’t help but be taken by her perspectives on identity on the blockchain and her vision for how TruStory could help build it. TruStory is starting by creating a platform that leverages social and economic incentives to validate and curate a more trusted reality, initially in the blockchain space itself.

We’re excited about the impact that TruStory can have on the world and thrilled to support Preethi and the team as they get started on their journey. With a fresh round of seed capital TruStory is off and running. Stay tuned to learn about opportunities at this LA-based company.

Now that CEO Laszlo Bock and team are sharing a bit more about what they’re up to at Humu, we’re able to post about our own involvement with the startup as supporting investors. We were both fortunate enough to overlap with Laszlo at Google, where he ran People Ops for over a decade. What we observed was a strong, opinionated, data-driven leader - not unique for the “Googler” makeup - but also one who was especially interested in challenging and evolving the assumptions we’d baked into our hiring processes and talent strategies. That Google’s best contributors weren’t necessarily the ones with the highest SAT scores and fanciest degrees. That our recruiting processes were screening out all types of intelligence and diversity that we absolutely needed to continue thriving and innovating. That people and the development, compensation and retention infrastructure that supported them were as vital as the code and servers upon which our products ran.

So when Laszlo shared he was building a new company along with Wayne Crosby and Jessie Wisdom, we wanted to make sure Homebrew could participate. Since that time they’ve raised over $40m from leading investors such as Index Ventures and IVP and deployed their product with companies ranging from 150 to 65,000 people. We’re thrilled to be a small part of the Humu journey and know their people-first approach is the way work is done best.

Oh, and they’re hiring.

One of the most important aspects of our investment strategy at Homebrew is that we want to put sweat and reputation behind a team, not just capital. Getting up each morning knowing that we get to support founders who are intentional and ambitious in building a company they are proud of beyond the financial outcome. So when two of these companies join forces, there’s a thrill in the combinatorial effect of seeing quality people work together towards a bigger outcome.

Last month Cruise acquired the founding team of Zippy.ai, a previously unannounced startup also working in the autonomous transportation industry. Homebrew had been fortunate enough to be among Cruise’s seed investors, which provided us early exposure to the transformation occurring in transportation and logistics driven by autonomy. It also helped us arrive at the point of view that the talent in this industry was still concentrated in a relatively small group of technologists worldwide and when you had the chance to back one of these teams, you should do it. That led us to make a similar seed investment in Gabe Sibley and his company, Zippy. Although we made that commitment hoping we’d be in business with Gabe for a long while to come, sometimes there’s a combination which just makes sense, and we know the Zippy team will make a substantial impact at Cruise.

This marks the first time a prior portfolio company acquired a current portfolio company. We know that’s a lower level venture badge than “portfolio company IPOs” but as a five year old fund, it’s wonderful to see people we’ve backed spread across their respective industries.

Oh, and if you want to take a more “traditional” path to Cruise, they’re hiring.

“Tipping points” refer to the moments where critical mass is reached and outcomes start to appear inevitable. While foolish be the startup CEO who ever assumes success is guaranteed, certainly one of the most promising leading indicators is customer adoption. Construction software company BuildingConnected announced this week the raising of an additional $15m from Brookfield Ventures, the investment arm of real estate developer Brookfield Asset Management. Brookfield first encountered BuildingConnected as a customer - one of the 170,000+ who use the platform - and immediately understood the long term value in the company. We’re thrilled to welcome this strategic investor to the company!

Solving real problems for real people - if this interests you, BuildingConnected is hiring.

If it wasn’t clear before, it’s hopefully clear now that theSkimm isn’t just a daily email newsletter. It’s a community of 7 million subscribers who turn to theSkimm every single day to be smarter about the world. It’s a portfolio of products, including the newsletter, a mobile app, podcasts and videos, that engage, entertain and educate. It’s a thriving business that generates revenue from advertising sponsorships, subscriptions and commerce. And most importantly, it’s a team of innovative, relentless people, led by Danielle Weisberg and Carly Zakin, who won’t be distracted or denied. We’re thrilled to have new investors, including GV and Sara Blakely, join theSkimm family via the company’s $12 million Series C financing. theSkimm is building a one-of-a-kind, cross-platform media company. And it’s adding to the team to help make it happen. So apply for your seat on this rocketship now!

Will brands and content producers be using the camera as an experiential marketing and creation platform and will consumers be using the camera more to engage in interactive experiences? We believe YES, but envisioning the future isn’t sufficient as a venture investor. You also need to find the team which you believe will get there. In our case this was Allison, Sonia and Camera IQ, who collectively are pioneering “camera marketing” via a connected software platform. Camera IQ is a camera experience manager that unifies OS platforms, AR dev kits and native apps.

Today’s funding announcement (and hiring of Snap’s Camera Platform Product Lead) speak to the momentum Camera IQ has catalyzed in a short-period of time. If your brand or platform is thinking about how to scale usage of augmented reality, this team is the one to contact.

As we’ve shared in the past, we get many questions from our founders related to talent, including everything from diversity to compensation to performance management. Given the many reports of inappropriate and unacceptable behavior in the tech industry (and more broadly) in the past year, we decided to be proactive about an important set of topics – HR policies and creating a safe, inclusive and engaging work environment. While we’ve historically provided our portfolio companies with guidance in these areas on an ad hoc basis, we wanted to both formalize our advice and share it more broadly. All startups should be establishing these policies early in the company’s life to ensure a safe, enjoyable and productive workplace.

In Human Resources Policy at Startups we present our suggested guidelines for both basic HR policies and HR handbooks. In the guide we’ve included a legally-vetted (U.S. law), standard Policy Against Discrimination, Harassment, Retaliation and Bullying that can serve as a template for startups. As always, we welcome your feedback and questions – this is a living document that we’ll update as we learn. Please contact Beth Scheer, Homebrew’s Head of Talent, with your thoughts.

Bowery, a startup pioneering new technologies in indoor farming, gave the world a preview this past week – you might even say they “lettuce” get a peek into their long-term vision :)

The Bowery team impressed us with their full-stack approach to indoor agriculture. They had hypotheses that the winner in this market would need to innovate on three fronts: the hardware, the software and the financing of the farms. And as result, Bowery can grow 365 days a year, producing 100x more crop yield than traditional farming and using 95% less water.

It’s Homebrew’s first investment in the AgTech vertical, an area we’ve been following closely given our belief that technology can “bottom up” transform existing industries.

Today they’re already shipping tasty greens from their first farm facility in New York’s tri-state region. As TechCrunch wrote, “Bowery uses computer vision and other sensors to monitor its plants and indoor climate. It amasses millions of data points about the variables impacting crops in real-time, and can tell what will change a plant’s growth rate, or otherwise lead to a particular quality, color, texture or flavor.” And you can taste the greens yourself at several Tom Colicchio restaurants in NYC!

Follow Bowery via Facebook and Twitter. And join the team in NYC if the Bowery mission sounds exciting to you.

There’s little doubt that technology is upending commerce. It started with fairly simple online product catalogs and purchasing in the late 90s but has progressed to touch every aspect of the retail business. And as that disruption occurs, enormous businesses have been built by enabling new and old market participants to keep up with competition and consumer demands. Online stores, payments, logistics, product reviews and many other commerce components have been productized for scale. As brands and retailers build relationships directly with consumers through delivery of products, there is another key requirement that has emerged - quality, cost-effective packaging. Especially for brands that exist primarily online, that packaging *is* the storefront. No company understands that better than Lumi. Lumi is building the scalable packaging supply chain for ecommerce retailers and brands. We’re thrilled to announce our earlier seed investment in the company, followed now by Lumi’s $9.0 million Series A financing from Spark Capital and Forerunner Ventures.

WHO: Jesse Genet, CEO, and Stephan Ango, CTO, are long-time business partners and co-founders of Lumi. They started their careers building their own product company, leading them to experience the pain of packaging firsthand. Starting and growing a product company also helped them develop empathy for their future customers, creative individuals like them who are trying to introduce their products to the world. As we got to know the team several years ago, it became clear that they has insights about customer needs and the packaging market opportunity that others couldn’t yet see. Plus, they cared more about tape and boxes than any other people we had ever met. Together, they form a team that combines empathy for the customer, creative energy, business know-how and technical excellent in a way that the packaging industry has never experienced.

WHAT: Lumi is AWS for packaging. Any commerce company of any size can turn to Lumi to design, source and manufacture the packaging it needs to deliver its products and delight its customers. By transforming a traditionally paper, fax, phone and email process into well-designed software, Lumi help brands and retailers (from moms and pops to the Fortune 500) save money, reduce lead times and improve the quality associated with their packaging.

HOW: Lumi has developed the concept of networked manufacturing, bringing factories and retailers online and connecting them through elegant software. Every packaging item is abstracted into specifications and the best factory for each job is picked based on cost, quality and lead time. Lumi’s network allows commerce companies to have packaging manufactured within 50 miles of nearly any distribution center in the United States. That system leads to improved reliability, sustainability and costs while delivering beautiful packaging that delights customers. At the end of it all, customers have a fully-optimized and scalable packaging supply chain that enables them to focus on the core of their business, the products they are creating and selling.

WHY: Jesse and Stephan believe that the same scale and efficiencies helping commerce companies in the digital world can be achieved in the physical world. By turning packaging and logistics into a service, they’re supporting their version of the Bottom Up Economy. We believe that they’re building a company that can transform the commerce landscape, enabling companies of all sizes to achieve excellent in packaging while not having to focus on it. Retail is being reimagined by technology. And Lumi is rethinking a critical component of the retail industry. We are beyond excited to partner with the Lumi team as they create the next great commerce platform.

If you need packaging, contact Lumi. If you want to join one of the hottest companies in LA, Lumi is hiring.

We started Homebrew nearly five years ago because we saw a gap in the venture financing market. While there are plenty of sources for seed stage capital, there are actually very few firms focused exclusively on the seed stage AND who sign up to be the investor of record - putting not just dollars, but also sweat and reputation behind a small group of companies to help them lay the foundation for scale and success. We designed Homebrew to be a product that met this gap in the market. Since then, we’d like to believe that we’ve achieved product-market fit, providing capital and counsel to 35 founding teams during the earliest stage of their startups’ development. We’re privileged to continue serving our customers (founders!) into the future with the raising of Homebrew III, a $90 million fund.

Like our earlier funds, Homebrew III’s strategy is to concentrate capital, time and reputation behind 6-8 new investments per year and to work closely with those teams to help them build the companies they envision. All of our Homebrew II Limited Partners, a small group of institutional investors including nonprofit foundations and university endowments, renewed their support for our work. And that work continues to be done in a deliberate, hands-on manner by Hunter, Satya, Beth and Charo.

What we look for when we invest

We’re proud to support a group of companies that we believe represent the best of the tech community. These companies are being led by men and women who care about both what they’re building and how they’re building it. They’re comprised of teams with clear visions for the future and both the attitude and aptitude needed to get there. Founders who are disrupting their industries with love and empathy rather than contempt. Homebrew companies operate across a diverse set of markets, including financial technology, AI-driven software, marketplaces, autonomy, agriculture and aerospace, where the common thread is technology democratizing access to information, products and service, customers and revenue. We refer to this notion as the Bottom Up Economy - the idea that as technology keeps getting cheaper, more flexible, more accessible, it can be increasingly leveraged by constituencies and industries that historically haven’t been able to take advantage of it. The past five years have given us plenty of proof that this trend is just beginning, with autonomous cars, cryptocurrencies and disease prediction software being just a few examples.

Homebrew is a product with an unambiguous point of view. We have strong beliefs about what it takes to set up companies for success, including everything from boards to equity compensation, and we attempt to share them transparently. There are three key attributes of our product that are manifestations of those beliefs.

• We’re seed phase (not seed round) investors: There is no longer a singular seed round financing. “Pre-seed”, “Post-seed”, “Pre-A” are all terms that are thrown around but have largely lost their meaning. The reality is that there are many ways in which a company can finance its development. Homebrew’s product is meant to meet the needs of founders at any point during this “seed phase”. We’re in the business of taking risk, investing in ideas alone, early products in market or promising customer traction. We can provide the first dollar that’s ever raised or the last dollars before a larger Series A financing. Our goal is to meet founders as early as possible and to be their investor of record, making a meaningful commitment of capital and counsel during the first few years of company development. We don’t create rigid structures around their fundraising tempo. Instead, we work with founders to help evaluate when additional capital will help them accelerate and what additional risk it brings to the business. Some of our most successful companies have received two or three checks from us before raising their Series A. We are seed phase investors, taking the associated risk independent of check size.

• We work hard to win the deal and even harder to service it: We do everything we can to earn the opportunity to work with founders. Founders’ time is always valuable, but especially so when fundraising, so we proceed with urgency and conviction in any discussions. Our hope is that anyone who takes funding from Homebrew does so because they think we’re the best partner for them and because we’ve given them a sense of what it’s like to work with us during the investment process, not just pitch their business.
  
  The commitment we make pre-funding, pales in comparison to what we do after wiring the money. It starts by devoting the majority of our working hours to supporting the founders we’ve backed, always making them our first priority. Our job is to increase the velocity of their learning and the probability of their success by making their problems ours to solve as well. The way we work with founders is codified but customized based on their needs, the stage of the company and what’s urgent for them in the moment. And if we could be doing something better or differently for them, we cherish receiving feedback and moving quickly to iterate.
  
  And importantly, when founders are ready to go to market for their next financings, we’re right at their sides, just as we’ve been the whole way. Because we make a small number of investments, and continue working with those companies past the Series A, we’re able to provide meaningful fundraising guidance and very warm introductions to potential investors. These venture investors, corporate strategics and individual angels trust our assessments, appreciate our early involvement and are excited to talk with teams we believe are special.

• We’re building something we can be proud of: Startups - and venture funds - have long paths towards success, and there are many ways to measure progress. Early on, we view the rate of learning and iteration as important predictors of success. At some point, a set of core metrics and financial milestones get introduced. And ultimately, the reward of financial liquidity comes for founders, their teams and their investors. But Homebrew also looks for one more measure of success. Can founders answer yes to “Are you building something you’re proud of? Will this company be on your tombstone or just your resume?”
  
  We ask ourselves the same question about Homebrew - are we building something we’re proud of? This question isn’t just a framing tool or conversation starter - it’s a true north for us. And for us, the answer to that question comes down to the people we choose to work with and the relationships we build with them along the way. The regular conversations we have with the teams we’ve backed aren’t just founder to VC conversations, they’re people to people conversations. Those conversations need to take place not just when all is going well, but also when things go awry. We want to be the first call in good times and bad. Immediately after we invest, it’s our goal to earn founders’ trust and exceed their expectations so those conversations can be had. Companies may come and go, but our relationships with the people we back will endure. Pride in those relationships defines our pride in Homebrew.
  
  While it’s still early and there’s lots of work left to do, the answer to are we proud of what we’re building is an unequivocal “Yes!”. It’s true only because of the support, partnership and love of others. We offer the deepest gratitude to the founders who’ve elected to work with us, the LPs who’ve entrusted us with their capital and the industry colleagues who’ve so openly collaborated with us. To our families - Addie, Astrid, Caroline, Chris, Jackson, Jaime, Marc, Siri, Syon - without whom none of this would be possible, we give our love and thanks for allowing us to fully integrate our home and work lives, helping us be better investors, spouses, and parents.

Homebrew III is closed. Now, back to work!

We’re thrilled to be a supporting investor in Loris.ai’s seed financing, a new company focused on helping companies and their employees be better prepared for challenging conversations. Don’t call these “soft skills” - active listening, empathy and communication authenticity are increasingly Must Haves, not Nice to Haves, to succeed in business. Loris CEO and co-founder, Nancy Lublin, previously confronted these issues in the most important environment one could imagine - running Crisis Text Line, the 24/7 text chat service for people in crisis and often contemplating suicide. Loris’s techniques and platform are based on Crisis Text Line but customized for commercial business environments and situations. Loris is working with a small group of successful, forward-thinking companies during its pilot period. If you know a company you think values hard conversations, you can nominate it for inclusion in the pilot on Loris’ website.

Last week Joymode announced its Series A financing in a pretty detailed TechCrunch article. It’s not often you see a reporter really dig into what makes a startup work, especially when the model is new, and for some, a bit unintuitive. But the idea of having access, via a subscription service, to stuff you want but don’t need to own makes a lot of sense when you start to look at the underused items in your closet/garage/etc. and at all the other things you would try or purchase if they were effectively 1/10th the price.

As the TechCrunch article explains, “ ‘You pay for a membership to access to this economy and then you pay for access to the goods,’ [Joymode CEO Joe] Fernandez told me as we walked through the company’s modest warehouse. Think of it like a Costco, but instead of owning, members get access for even a fraction of what an item would cost at even one of those discount warehouse retailers.”

We led Joymode’s seed round based on the strength of this vision and the founding team. The team’s execution of its vision has been a joy to watch. And now it’s a thrill to welcome Naspers Ventures to the company as the lead investor in the $14 million Series A financing.

If you live in Los Angeles, give Joymode a try (and they’re hiring!).

The most anticipated news in the aerospace industry each December holiday season usually involves a sleigh and some reindeer, but in 2017, even Santa has his eyes opened to Elroy Air. The team at Elroy is developing a large-format autonomous aircraft focused on shipping weights of up to 150 lbs as far as 300 miles. This intersection of weight and distance is a particularly valuable segment of the global transportation and logistics market, since it can span multiple “middle distance” scenarios in shipping, infrastructure and public-sector needs.

Homebrew has been interested in the fringes of autonomy since we started the firm in 2013. Elroy marks our sixth startup in this technology vertical following our investments in Cruise, Shield, and three other unannounced companies. Elroy’s founders David and Clint display the same type of technical brilliance, market insights and operational resolve that we saw as critical in our earlier successes here. We’re proud to be supporting investors in Elroy along with a number of wonderful other firms. Oh, and they’re hiring.