Stream, whose APIs help product teams build chat and activity feeds fast, just raised a $15 million Series A round

by admin August 13, 2020 at 8:07 am




Stream, whose APIs help product teams build chat and activity feeds fast, just raised a $15 million Series A round – TechCrunch




























Earlier this year, the founders of Stream,  a five-year-old, 60-person startup with offices in Boulder and Amsterdam, weren’t feeling so great about their prospects. As COVID-19 began its spread in the U.S., some smaller customers of the startup — whose APIs enable product teams to build chat and activity feeds for their applications — began to fold.

“It was really scary when [the virus] initially hit, because a lot of our smaller customers went out of business, which made us worry about what would happen to the larger ones,” recalls Thierry Schellenbach, who started Stream with Tommaso Barbugli, the lead engineer at his last startup.

“One [larger customer] did go bankrupt, which impacted our numbers.” But then a strange thing happened, he says. Companies in education and healthcare and online events and even religious communities began beefing up their online operations, and turning in part to Stream to do it.

Schellenbach understood the impulse  He and Barbugli created Stream to address a pain they felt firsthand at Schellenbach’s first company out of college — a social network that was ultimately acquired for a modest sum by a private equity firm in the Netherlands. Though it grew to “millions of users,” he says, its activity feed was routinely failing as the network scaled given the many moving pieces involved, and it took a “ton of engineering resources to keep it working well.”

Because the two knew the world needed more off-the-shelf software and specifically software focused on activity feeds, they began building it themselves.

Yet that’s not the only reason the company is gaining traction. Schellenbach attributes Stream’s resiliency in the pandemic to a decision 10 months ago to also begin developing a chat API (after seeing customers trying to build their own atop their activity feeds). Now, schools like Harvard, social media companies like Dubsmash, and the health information site Healthline are customers, and investors are beginning to take more notice, too.

Indeed, today the company is announcing it has closed a $15 million Series A round that was led by GGV Capital and included 01 Advisors, Knight, seed round lead investor Arthur Ventures, and other backers, including Datadog CEO Olivier Pomel and GitHub cofounder Tom Preston-Werner.

The round brings the company’s total funding to $20.25 million, and it was raised from many individuals who Schellenbach (based in Boulder), and Barbugli (based in Amsterdam), have never met in person, including the GGV team.

Schellenbach credits GGV for not hewing too closely to old models during these socially distanced days, as did “three or four” VCs with whom he’d spoken and who said he’d have to meet them in San Francisco in order to make a deal happen.

He also traces Stream’s fundraising success to the accelerator program Techstars, which Stream entered when it was just two months old back in 2015. As he explains, he and Barbugli had “no VC connections at the time, so Techstars was important to open up the fundraising side of things.”

Those references have only bred more references — and now, more than ever — it makes a difference, he observes.

“We’re lucky,” he says. Stream was introduced to GGV. GGV then introduced the team to Dick Costolo of 01 Advisors. Meanwhile, for “companies trying to raise a seed round, if you don’t have clear references, right now, it’s tough.”

Photo of Schellenbach and  Barbugli, circa 2015, courtesy of Stream.


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Creek seeks $3B valuation for its software IPO”,”content”:{“rendered”:”

American software company Duck Creek has upped the stakes in its impending IPO, raising its price target from a range of $19 to $21 per shareu00a0to $23 to $25 per share.n

The bump comes as software and cloud stocks have fallen more than 10% from recent highs, putting them in technical correction territory.n


n

The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.n


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The good news for the Boston-based startup focused on the insurance market, however, is that recent technology IPOs have seen strong performance at similar stock market levels. So, the recent market chop for its future cohort of public software companies may not prove too deleterious to its public offering hopes.n

This morning let’s calculate an updated valuation range for Duck Creek, re-run our math on its implied revenue multiples and compare those figures to today’s public market averages.n

Duck Creek’s products target the property and casualty insurance provider space, serving companies that sell coverage for automobile, rental and homeowners insurance.n

""When tinkering with Duck Creek’s first IPO price range ($2.44 billion to $2.70 billion), the company appeared to be reasonably priced. Let’s see what happens when it raises its share-price targets.n

A new valuationn

As before, Duck Creek is selling 15 million shares, a figure that rises to 17.25 million if its underwriters exercise their option to purchase more stock at the IPO price. So, at its new $23 to $25 per-share IPO price range, the company could raise between $396.75 million and $431.25 million.n

For a company that had revenue of $153.35 million in the three quarters ending May 31, 2020, it’s a large sum.n

Discounting the shares up for purchase by its underwriters, Duck Creek is worth between $2.95 billion and $3.21 billion. Including the extra equity, the figures rise to $3 billion and $3.26 billion.

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