Weekly SaaSology ⚡ 11.21.21
Integration Tools 🔁, Password Leaks 🔒 , and Angel Investors 👼
Happy Sunday! Hope you and your loved ones have a wonderful Thanksgiving 🦃 and a rewarding Black Friday 🛍️, you’ve earned it!
Top Seven Investments 🚀
HeyDay, yet another San Francisco-based e-commerce aggregator, raised $555 million in Series C funding led by the Raine Group and Premji Invest, with participation from General Catalyst, Victory Park, and Khosla Ventures. Unlike its competitors that own hundreds of brands, HeyDay differentiates by owning fewer, larger, and higher-quality brands.
EasySend, a Tel Aviv-based no-code customer experience platform, raised $50.5 million in Series B funding led by Oak HC/FT, with participation from Vertex IL, Intel Capital, and Hanaco Venture. EasySend helps over 100 enterprises, especially in insurance and financial services 🏦, build and optimize digital customer interactions like online forms using drag-and-drop interfaces.
Formstack, an Indiana-based no-code workplace productivity platform, raised $425 million led by Silversmith and PSG. It provides 25,000+ businesses like Twitter and Netflix with a wide range of templates and integrations to allow users to create their own workflow automations.
Stytch, a San Francisco-based API-enabled passwordless platform, raised $90 million at a $1 billion valuation in Series B funding led by Coatue, with participation from Benchmark, Thrive, and Index. Stytch offers 4,000+ developers the ability to provide more secure and low-friction authentication (login) options such as email magic links, biometrics, and text passcodes 📱.
OpenStore, a Miami-based Shopify merchant acquirer, raised $75 million at a $750 million valuation in Series B funding led by General Catalyst, with participation from Atomic, Founders Fund, and Khosla Ventures. Unlike aggregators like HeyDay and Thrasio, OpenStore focuses on the “long-tail” Shopify sellers 🛒 and aims to leverage economies of scale to bolster sales of acquired D2C brands by selling under one umbrella brand.
Fourthwall, a Los Angeles-based creator 🎥 commerce platform, raised $17 million in funding led by Lightspeed, with participation from Initialized and Seven Seven Six. Fourthwall lets creators build a white-label website with built-in tools, design products, offer membership benefits, accept donations, share content, and engage directly with fans.
Craft.io, a Tel Aviv-based product management platform, raised $8 million in Series A funding led by JAL Ventures, with participation from Fosun RZ Capital, Inimiti, and Ron Zuckerman. Like ProductPlan and Productboard, Craft enables product managers at businesses like Danone and Cisco, discover ideas, generate story maps, collaborate on projects, and create prototypes.
Top Two Trends ☁️
Passwords and Data Breaches 🔑
Tools like 1Password assist in password management, but most people struggle to remember unique passwords and reuse the same password for work and personal accounts. Based on Verizon’s 2020 data breach report, compromised passwords resulted in 81% of all data leaks.
Nearly 44% of people rely on two to five passwords across accounts, while 16% use the same password for all of their accounts. There has been a massive movement towards more secure authentication methods led by passwordless platforms like Stytch. Big tech companies like Microsoft are also leading from the front by implementing passwordless login through biometrics 🤳, authentication apps, and hardware security keys for all accounts.
Stricter Regulation for US Banks 🏦
Under a new rule approved by US federal regulators, banks and other financial institutions are required to notify their regulator(s) of any “computer-security” incidents within 36 hours of discovery. This basically refers to any “material” cybersecurity threat that impacts operations, ability to deliver services or financial sector stability.
US regulators have also mandated that banking organizations notify customers of any cybersecurity incident that lasts for four hours or more as soon as it is discovered. The new regulations will undoubtedly expedite the adoption and implementation of cybersecurity tools for threat detection, vulnerability management, and IT security-related services 🔒.
Startup Spotlight ✨
Founded in 2013, Zapier is a San Francisco-based workflow automation platform that integrates with over 3,000 applications like Salesforce, Intuit, Slack, and Dropbox. Zapier is an online tool that helps people create interlinked functions across services/apps, as illustrated below. Users can create “zaps” that contain a trigger and an action for a task they want to perform repeatedly 🔁.
Unlike most of its rivals like IFTTT, which can only integrate two services, Zapier supports multi-app zaps. However, IFTTT is far ahead of Zapier in the race to embrace the Internet of things (IoT) movement, offering Android and iOS app support and integrating with smart appliances, Alexa, Cortana, Google Assistant, and Siri. It also competes against Syncari and Automate.io which was acquired two months ago by productivity platform Notion (startup of the week two weeks ago) so it could add integration to over 200 services to its digital collaboration capabilities and tech stack.
VC Topic of the Week 📚
Last week, we talked about the Friends and Family (F&F) round. This week, we’ll discuss Angel Investors 👼 that invest alongside F&F in the early stages of a startup. Angel Investors are essentially high-net-worth individuals 💸 looking to earn higher returns by taking on more risk by funding startups in the early stages (including pre-revenue startups). These folks could be wealthy doctors, lawyers, or even former entrepreneurs with industry expertise.
Just like F&F funding, angel investment is used for product development (building a minimum viable product), market research (identifying its target customers), business planning (making key hires), and other crucial operational activities 🛠️. Seasoned angel investors can also lead an angel syndicate by pooling capital with fellow angel investors to fund a deal collectively. Angel networks and websites like AngelList make the process of sourcing and executing angel investments frictionless.
To become an angel investor, one usually needs to qualify as an accredited investor - earned income must exceed $200,000 for the past two years ($300,000 with a spouse), or net worth (alone or with a spouse) must exceed $1 million in investable assets 💰.
Tweet of the Week 🐦
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This newsletter is intended for informational purposes only. Sources: TechCrunch, VentureBeat, Twitter, Giphy, Tenor, Pymnts, Medium, Zapier, NerdWallet, Entrepreneur, Forbes, Investopedia, Wall Street Journal, Cyberscoop, Compliance Week