FIRST DOWN
Big Week For Big Money Pouring Into The Surging EdTech Sector
This was a big week for big funding rounds and even bigger valuations for two of the startup world's leading education technology companies, Udemy and Duolingo. Riding high on a Coronavirus boost, Udemy and Duolingo scooped up $50 million on a $3.25 billion valuation and $35 million on a $2.4 billion valuation respectively.
First up is Udemy, the 11-year-old San Francisco-based online learning platform that helps students, companies, and governments gain the skills needed to compete in today's economy. Udemy touts itself as the largest online learning destination in the world, where 35 million students are learning new skills taught by more than 50,000 instructors who lead more than 130,000 online courses that range from computer programming and data science to leadership and team building. The company has also expanded into offering employee training and development programs sold through large corporate partners, and reports reaching $100 million in annual recurring revenue for that business unit alone.
Next up is Duolingo, the 9-year-old Pittsburgh-based online language-learning education platform that has taken the world by storm. With more than 500 million downloads and 40 distinct languages, Duolingo brought gamification and sleek design to a sector that had been dominated for decades by legacy players like Rosetta Stone. Leveraging a freemium model, the company attracts wide swaths of users for free, and then up-sells them with ad-free versions and additional game mechanics.
As for the impact of COVID on these EdTech startups? Udemy reports an increase in enrollments of more than 425%, consumption of content through Udemy for Business jump by 90%, and a 55% increase in the creation of courses by instructors. And for Duolingo's part, the company reports that its base of learners has grown by 30% in the last year, with bookings on track to increase 100%. Clearly with more people stuck at home, EdTech has been a popular place for consumers to turn their attention (and wallet-share).
(more here and here)
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SECOND DOWN
Cottage Captures $3.5M In Seed Funding For ADU Construction
This week, San Francisco-based real estate technology startup Cottage announced a $3.5 million seed round of funding to become the 1-stop shop for designing, permitting, and building Accessory Dwelling Units (ADUs). The round was led by our friends over at SUSA ventures Base10.
For the uninitiated, ADUs--also known as "granny units'--are small cottages built on land zoned for single-family-housing, and involve the construction of entirely new units, or the conversion of other outbuildings such as a garage. ADUs have become increasingly popular as the nation faces an affordable housing crisis, and the demand for multi-generational housing options or alternatives to apartments for young singles has spiked.
While ADUs are nothing new--and certainly are not a cure-all to broader and much-needed housing reform--new regulations in states like California have made it easier for homeowners to build ADUs and even expand the size dwellings that are permitted.
But building an ADU is complicated--as I have seen first-hand with my brother's recent construction of a (beautiful) ADU in Portland. It involves evaluating the property for feasibility, permitting, design and cost estimates, as well as construction and inspections. This is where Cottage steps in. They manage the entire process from considering to completion, and the company estimates getting the total price down to $100-150k for a unit in the pricey San Francisco Bay Area, versus an estimated $300k if done on your own.
Cottage is not alone in tacking the ADU opportunity, with companies like Abodu offering pre-fab options, and another slate of startups offering up-front financing that you pay off through increased home value or rental income. While Cottage and its competitors won't solve the housing crisis, it helps meet the growing demand from homeowners looking to squeeze more value out of their most valuable asset, while providing new and better housing options to family and renters alike.
(more here)
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THIRD DOWN
The Digital Mental Health Funding Faucet Continues To Flow
If you've been reading the 2-Minute Drill over these past few months, then it should come as no surprise that 2020 has been a record-setting year for venture funding into digital mental health startups. Just how much funding? According to CB Insights, mental health startups attracted a record $1 billion in funding during the first half of 2020 alone!
This week, you can add NYC based Headway to the growing list of digital mental health startups catching the eyes (and wallets) of venture investors. The company just announced a new $28 million series A round of funding, bringing the year-old startup's total funding haul to just over $30 million. Headway's specific approach to the market is to make it easier for patients to find vetted therapists (via a Yelp-like interface) while making it easier for therapists to accept insurance. Most therapists are independent or part of small practices, and today's insurance infrastructure is geared toward larger medical practices with more resources. Headway is focused on helping serve as a middleman so therapists can easily accept insurance, and thus be available to a wider pool of patients.
Now that we can add Headway to the list, here are just a few of the mental health startups we covered recently (and that's not to mention all the adjacent companies expanding into mental health services ranging from Doctor on Demand to Calm and Headspace):
- Lyra Health (2MD) -- $288.1M in funding / Latest Round: Series D
- Ginger (2MD) -- $120.7M in funding / Latest Round: Series D
- TalkSpace (2MD) -- $106.7M in funding / Latest Round: Series D
- SonderMind (2MD) -- $32.9M in funding / Series B
- Two Chairs -- $28M in funding / Latest Round: Series B
- SilverCloud (2MD) -- $26.2M in funding / Latest Round: Series B
- Octave (2MD) -- $14M in funding / Latest Round: Series A
- Meru Health (2MD) -- $13.3M in funding / Latest Round: Series A
- Frame (2MD) -- undisclosed funding / Latest Round: Seed
- Hazel Health (2MD) -- $33.5M in funding / Latest Round: Series C
As long as 2020 keeps on being, well, 2020, don't expect to see the usage of remote therapy or funding for digital mental health slow down. That said, from an investor perspective it feels like the market has gotten oversaturated, and in 2021 we expect to see a thinning of the herd. As supply outstrips demand and other, more established digital health platforms move horizontally into mental health offerings, we expect to see startups in the sector struggle to gain traction and ultimately shut down or merge. That said, we are big believers in the digital mental health space, and are keeping an eye out for startups that hit on a unique value proposition or truly approach to the market.
(more here)
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FOURTH DOWN
Hover Nabs $60M To Turn Home Selfies Into 3D Models
When we last checked in on Hover last April, the San Francisco-based real estate technology company had just raised a $25 million Series C round of funding to turn pictures of homes into 3D models. Well, this week the 9-year-old startup is back with a fresh $60 million Series D round of funding valuing the company at a cool $490 million. This round brings the company's total funding to nearly $130 million.
To recap, Hover provides a computer vision tool that helps homeowners assess and fix properties more easily. Users snap 8 photos of their home using the Hover app, then the company's patented technology stitches them into a fully-measured and customizable 3D model,
By taking a just few quick snaps of a home from various locations, Hover creates fully-measured customizable 3D models of any home and then enables users to play around with changing the roof, siding, windows, etc. in a digital model, using real materials from leading brands. Finally, users can see a finished project with fully shareable 3D models.
So why is this valuable? As we noted in our coverage last April, with accurate, measurable 3D models, contractors can more easily quantify materials for bids, insurance companies can more accurately assess a damage claim to a home, and homeowners can visualize what construction projects like new roofing, windows or siding will look like.
(more here)
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EXTRA POINT
Athletes + Entertainers in Tech: Levels
This week, NYC-based health and wellness technology platform Levels announced a $12 million initial round of funding to bring its biowearable metabolic sensor to market. For years the medical field has documented the direct link between metabolic function and overall health. However, the relative difficulty of conducting continuous glucose monitoring (CGM) required to access personalized and granular blood sugar data has largely prevented non-diabetes related monitoring systems from going mainstream.
Levels is looking to change the paradigm with a medical device that is injected and worn on your arm for a two-week period and continuously tracks and monitors your glucose levels. The biowearable device is then paired with a nifty app that provides detailed analytics based on the data collected. Why does this matter? Well, Levels uses the data to help you better understand your body's personal reaction to food and exercise so you can adjust your habits based on actual (and personalized) data and improve your overall health and performance.
We've covered quantified fitness at length on the 2-Minute Drill, and just last week in the Extra Point we highlighted digital fitness tracker Whoop's big $1.2 billion valuation. Level looks to go even deeper (literally) by tapping directly into your blood. And while that may sound scary, the injection is actually pretty painless, and the underlying technology has been approved by the FDA for more than 10 years.
The funding round was led by a16z, and the capital will be used to fulfill a reported wait list of 45,000 orders and expand production to service what the company (and investors) hope will be millions more. If successful, Levels could be part of a new wave of health and fitness trackers that (ahem) "crossover" the bright line of medical vs. non-medical classified devices.
The Money Quote: "Optimizing metabolic function can improve energy, endurance, memory, mood, and cognitive performance. Seven of the 10 leading causes of death in the U.S. are strongly related to metabolic dysfunction [and] Levels helps you improve metabolic fitness by alerting you to foods that negatively impact glucose levels. Armed with this information, you can take control of your metabolic health and make healthier lifestyle decisions." -- Dr. Casey Means, co-founder of Levels.
Athletes + Entertainers involved include: NBA guard Matthew Dellavedova.
(more here)
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