Early-stage funding posted a slowdown in the third quarter, and it wasn’t immediately clear why.
A closer look, however, reveals that for U.S. startups the chief reason appears to be a decline in Series B funding rounds. Meanwhile, globally, the early-stage slowdown was caused by a pullback in Series A financings.
Let’s unpack the numbers below and speculate about what the data could mean for the broader startup economy.
U.S. Early Stage Slowdown
We’ll start with U.S. early-stage startup investment, which saw a decline of 18 percent in reported funding in Q3 of 2019, compared to Q2. The drop came as overall funding remained flat-to-up at other funding stages.
Early-stage rounds consist of Series A and Series B rounds. And while Series A reported investment totals held up at similar levels in both Q3 and Q2 of this year domestically, the same cannot be said for Series B.
A year ago, at a demo day south of San Francisco, we watched a number of recently formed startups pitch investors on their companies. One that stood out to us at the time was Zubale, a Mexico City-based outfit whose founders were looking to connect big corporations with Latin Americans eager to address tasks on their behalf. A person could conduct on-the-ground market research for a brand, for example, then earn mobile phone credits or other redeemable digital rewards.
Fast-forward and Zubale, which had 10 employees at the time, now has 40 full-time employees, and has completed 170,000 tasks on behalf of the consumer brands on which it is squarely focused — and for two reasons.
First, according to Zubale co-founder Allison Campbell, the retail industry across Latin America is generating $2 trillion per year, but companies are also shelling out $40 billion on “super painful and high spend” that includes employees who complete in-store tasks like stocking shelves, checking prices and building displays.
Campbell says Zubale can save — even make — these companies money by crowdsourcing the same tasks to independent contractors who can choose from an inventory of similar jobs near them.
AUSTIN, Texas, Oct. 15, 2019 /PRNewswire/ -- Today, the world's largest job delivery platform, eQuest, and AI powered recruitment platform Job.com announced a collaboration to promote and fill positions for a wide variety of mutual clients worldwide starting today.
The partnership makes eQuest's powerful job distribution platform available to Job.com clients seeking to find candidates in the global workforce. Job.com users can access eQuest's vast network to promote their open positions and recruit the best talent both domestically and internationally. eQuest, which hosts over 250 million postings a year, will offer Job.com exclusive opportunities to fill positions for its host of legacy enterprise clientele.
"eQuest is excited to partner with Job.com and looks forward to working together" said Nick Bradford, Director of Job Board Networks for eQuest.
Job.com's unique rewards-based economy makes it especially attractive to top-tier candidates. The company uses powerful AI-based technology to intelligently match candidates with the employers and positions that best suit their goals and aptitudes. Once candidates are matched and successfully hired through the platform, they receive a reward equivalent to 5% of their annual salary.
Xor, a San Francisco-based startup developing an AI chatbot platform for recruiters and job seekers, today announced that it has raised $8.4 million in a seed funding round led by SignalFire, with participation from Gurtin Ventures and Twin VC. The capital infusion comes after a year in which Xor tripled sales in the U.S., reaching $2 million in annual recurring revenue and closing deals with over 100 customers in 15 countries, including ExxonMobil, Ikea, Baxter Personnel, Heineken, IBS, Aldi, Hoff, McDonald’s, and Mars.
Cofounder and CEO Aida Fazylova said the fresh funds will enable Xor to expand its workforce of 52 people and accelerate development of its forthcoming product, which is designed to automate internal processes like onboarding, paperwork filing, and estimating job satisfaction and churn. She says that several of Xor’s customers are already piloting the solution ahead of a broad launch in the coming months.
AUSTIN, Texas - October 10, 2019 - (Newswire.com) - RigUp, the energy industry’s largest marketplace for on-demand services and skilled labor, has raised a $300 million Series D round led by Andreessen Horowitz (a16z) with participation from existing investors, including Founders Fund, Bedrock Capital, and Quantum Energy Partners. New investors include Baillie Gifford and Brookfield Growth Partners. David George, general partner at Andreessen Horowitz, will join RigUp’s board.
"RigUp stands alone in serving the energy labor market with much-needed technology and fundamentally allows for better matching of supply and demand, resulting in significantly improved time-to-hire and visibility for both the independent contractors searching for the right projects and the energy companies looking to fill jobs with higher-quality personnel," said David George. "We are thrilled to be partnering with Xuan, Mike, and the RigUp team as they continue to scale and expand upon their market opportunity."
Founded in 2014, RigUp now has more than 300 employees across the United States. RigUp’s platform matches contract workers with energy companies operating in the upstream, renewables, midstream, and downstream sectors looking to efficiently source and manage skilled trade labor. In 2019, RigUp will exceed $2 billion in gross service volume on its platform, more than a 200% increase from 2018.