NVTC Newsletter No. 13
Nov 29, 2022
Kaley Ubellacker
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
Happy Tech Tuesday! For those new here, welcome to the NVTC weekly newsletter. Here you’ll find recent updates from the tech world, insightful articles related to startups and highlights from NV portfolio companies.
THIS WEEK’S FEATURES ⚡
⭐ Cash Cab – Trading smelly yellow taxis for autonomous, robo adventures.
⭐ The Higher They Climb – The harder they [tech companies] fall.
⭐ Irish Exits Won’t Cut It – Secrets to startup acquisitions.
⭐ Crop – Why researchers are studying insect sex.
🔮 Headstarts – You’re gifted open access to a dinner date with one founder. Who are you choosing?
NV Portfolio Highlight 🎢
It’s a third-party payment processing (TPP) kind of world. Forage is using TPP for good, facilitating transactions for electronic benefits transfer (EBT, commonly known as food stamps). With the age of fast shopping, from online grocers to paid shoppers, the EBT system was also due for some upgrades.
While developing a pricing application, the co-founders discovered that over 250,000 brick-and-mortar stores accept SNAP EBT, but only about 100 retailers accept it online. Forage stepped in to help grocers build in SNAP EBT functionality, offering software that automates required documents and provides a seamless API for payment processing. Forage’s platform also provides access to SNAP EBT experts for system set-up and project management.
In August, Forage completed a $22 million Series A round led by NYCA Partners and joined by Instacart founder Apoorva Mehta, PayPal Ventures, and Necessary Ventures. A couple weeks ago, we asked you all to provide some questions you have for co-founder Victor Fimbres. After much anticipation, your answers are here!
Q: What led you to cofound Forage?
Fimbres: Technology promises to improve people’s lives. It is a force for good with a distribution problem. I co-founded Forage, because I believe modern payments technology can improve the American social safety net and its beneficiaries’ lives.
Q: What has been your biggest learning in building the company and serving as CTO?
Fimbres: Building a company is like playing a video game. Every stage of a company requires different skill sets to complete. The job requirements of a CTO at pre-seed are different from that at seed, series A, B, etc. A video game operates in the same way. To progress to the next level, you need to learn new skills and overcome new challenges.
Q: Why should someone leave a job at a big tech company and join Forage?
Fimbres: Join Forage if you want to do meaningful work that is high stakes and challenging. It’s high stakes, because the bits that flow through our system are a vulnerable person’s next meal. It’s challenging, because we’re updating dated, legacy technological systems.
Q: What makes Forage different from other startups?
Fimbres: We’re a mission driven company that found a way to make money by doing good. The more grocers we service, the more revenue we make, the more options EBT cardholders have to access affordable food.
Q: Where do you see Forage in 5 years, and what do you believe are the most crucial steps being taken by the company to get there?
Fimbres: We see ourselves bringing more and more of the American social safety net (~$1T) to internet markets. We are starting with online groceries (~$120B) and moving into other industries, such as child-care, commuter benefits, and healthcare.
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Forage is hiring, so if you’re looking for an opportunity to join a rapidly growing company that’s doing good in the world, check out their open roles.
Good Reads 📖
For the rushed reader …
For the less rushed reader …
Cruise, Waymo push robotaxis amid doubts about self-driving tech
I’m not sure what’s more demoralizing: attempting to hail a taxi and making eye contact with the driver as he rejects you, or attempting to hail a taxi and realizing it’s a robot that turned you down. Doubts are brewing around the feasibility of autonomous vehicles at scale. While many companies have pulled back, notably Ford and Volkswagen, Waymo and Cruise push on, expanding their robotaxi services across the United States.
San Francisco police seek permission for its robots to use deadly force
Picture RoboCop, but set in San Francisco. SF’s police department wants to deploy killer robots who can execute suspects that present a “sufficient threat.” Robots, which are already employed for area inspections and bomb disposal, could be easily transitioned for use with lethal autonomous weapons. The proposal has seen significant opposition, but its status is worth monitoring. Who’s going to tell SFPD how the movie ends?
Tech’s reality check: How the industry lost $7.4 trillion in one year
Let’s play a game. How much market cap has Microsoft lost this year? (Hint: it’s $700 billion). Tech companies’ values are tanking, fueled by soaring interest rates that are steadily choking off access to capital and reducing the discounted value of future cashflows. Per Nasdaq’s calculations, investors have lost roughly $7.4 trillion over the past 12 months. To put that into perspective, you could buy 63 Jeff Bezos with that sum of money.
Fire Up the Pre-Seeds🔥
Highlights from this week’s pre-seed raises:
STARTUP SNIPPETS 🔮
Of these startups, which founder would you most want to have dinner with?
MoonPay is a startup touting the “gateway to digital currency” for a fast and easy way to buy and sell crypto. The company just hired Keith Grossman as president, who left his position as Time’s president to take on the role.
Arrival is another EV startup for the books, best known for its electric van and bus projects. Founder and CEO Denis Sverdlov is stepping back from the company as Marvel Entertainment CEO Peter Cuneo steps in.
The Lanby, a “concierge medicine” startup creating a membership-based model for primary care, raised $2.7 million in seed funding.
Lilium, a German developer of electric vertical take-off and landing jets, raised $110 million in post-IPO funding.
Ramani, a YC-backed Tanzanian startup digitizing the consumer-packaged goods supply chain, raised $32 million in Series A debt-equity funding.
MEME HIGHLIGHT 📈
We love XKCD at Necessary Ventures. Some of our favorites:
Tech companies everywhere trying to rationalize their downfall:
Every coder’s eternal struggle as the family “computer wizard”:
Outro🚪
Have any questions, feedback, or comments? Just reply here. We iterate and curate the newsletter according to your interests!
Some last matters of business:
If you’re a technologist (engineer or product manager / designer with a technical background) join us on the NVTC LinkedIn group if you haven’t. We’d love to have you!
Sign up here if you’re interested in co-investing with Necessary.
If you’re a startup founder, we’d love to help where we can! Brex provides full-stack finance solutions for startups. Sign up via Necessary and get bonus points.
Thanks for reading, and see you next week!
