Index Ventures, Stripe back bookkeeping service Pilot with $40M

Five years after Dropbox acquired their startup Zulip, Waseem Daher, Jeff Arnold and Jessica McKellar have gained traction for their third business together: Pilot.

Pilot helps startups and small businesses manage their back office. Chief executive officer Daher admits it may seem a little boring, but the market opportunity is undeniably huge. To tackle the market, Pilot is today announcing a $40 million Series B led by Index Ventures with participation from Stripe, the online payment processing system.

The round values Pilot, which has raised about $60 million to date, at $355 million.

“It’s a massive industry that has sucked in the past,” Daher told TechCrunch. “People want a really high-quality solution to the bookkeeping problem. The market really wants this to exist and we’ve assembled a world-class team that’s capable of knocking this out of the park.”

San Francisco-based Pilot launched in 2017, more than a decade after the three founders met in MIT’s student computing group. It’s not surprising they’ve garnered attention from venture capitalists, given that their first two companies resulted in notable acquisitions.

Pilot has taken on a massively overlooked but strategic segment — bookkeeping,” Index’s Mark Goldberg told TechCrunch via email. “While dry on the surface, the opportunity is enormous given that an estimated $60 billion is spent on bookkeeping and accounting in the U.S. alone. It’s a service industry that can finally be automated with technology and this is the perfect team to take this on — third-time founders with a perfect combo of financial acumen and engineering.”

The trio of founders’ first project, Linux upgrade software called Ksplice, sold to Oracle in 2011. Their next business, Zulip, exited to Dropbox before it even had the chance to publicly launch.

It was actually upon building Ksplice that Daher and team realized their dire need for tech-enabled bookkeeping solutions.

“We built something internally like this as a byproduct of just running [Ksplice],” Daher explained. “When Oracle was acquiring our company, we met with their finance people and we described this system to them and they were blown away.”

It took a few years for the team to refocus their efforts on streamlining back-office processes for startups, opting to build business chat software in Zulip first.

Pilot’s software integrates with other financial services products to bring the bookkeeping process into the 21st century. Its platform, for example, works seamlessly on top of QuickBooks so customers aren’t wasting precious time updating and managing the accounting application.

“It’s better than the slow, painful process of doing it yourself and it’s better than hiring a third-party bookkeeper,” Daher said. “If you care at all about having the work be high-quality, you have to have software do it. People aren’t good at these mechanical, repetitive, formula-driven tasks.”

Currently, Pilot handles bookkeeping for more than $100 million per month in financial transactions but hopes to use the infusion of venture funding to accelerate customer adoption. The company also plans to launch a tax prep offering that they say will make the tax prep experience “easy and seamless.”

“It’s our first foray into Pilot’s larger mission, which is taking care of running your companies entire back office so you can focus on your business,” Daher said.

As for whether the team will sell to another big acquirer, it’s unlikely.

“The opportunity for Pilot is so large and so substantive, I think it would be a mistake for this to be anything other than a large and enduring public company,” Daher said. “This is the company that we’re going to do this with.”

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No one, not even the Secret Service, should randomly plug in a strange USB stick

If you’ve been on Twitter today, you’ve probably seen one story making the rounds.

The case follows a Chinese national, Yujing Zhang, who is accused of trying to sneak into President Trump’s private Florida resort Mar-a-Largo last month. She was caught by the Secret Service with four cellphones, a laptop, cash, an external hard drive, a signals detector to spot hidden cameras, and a thumb drive.

The arrest sparked new concerns about the president’s security amid concerns that foreign governments have tried to infiltrate the resort.

Allegations aside and notwithstanding, what sent alarm bells ringing was how the Secret Service handled the USB drive, which cannot be understated — it was not good.

From the Miami Herald:

Secret Service agent Samuel Ivanovich, who interviewed Zhang on the day of her arrest, testified at the hearing. He stated that when another agent put Zhang’s thumb-drive into his computer, it immediately began to install files, a “very out-of-the-ordinary” event that he had never seen happen before during this kind of analysis. The agent had to immediately stop the analysis to halt any further corruption of his computer, Ivanovich said. The analysis is ongoing but still inconclusive, he testified.

What’s the big deal, you might think? You might not think it, but USB keys are a surprisingly easy and effective way to install malware — or even destroy computers. In 2016, security researcher Elie Bursztein found dropping malware-laden USB sticks was an “effective” way of tricking someone into plugging it into their computer. As soon as the drive plugs in, it can install malware that can remotely surveil and control the affected device — and spread throughout a network. Some USB drives can even fry the innards of some computers.

A Secret Service spokesperson said the device was “standalone,” but wouldn’t be pressed on details. It remains unknown why the agent “immediately” pulled out the drive in a panic.

It didn’t take long for security folks to seize on the security snafu.

Jake Williams, founder of Rendition Infosec and former NSA hacker, criticized the agent’s actions “threatened his own computing system and possibly the rest of the Secret Service network.”

“It’s entirely possible that the sensitivities over determining whether Zhang was targeting Mar-a-Lago or the president — or whether she was a legitimate guest or member — may have contributed to the agent’s actions on the ground,” he said, “Never before has the Secret Service had to deal with this type of scenario and they’re probably still working out the playbook.”

Williams said the best way to forensically examine a suspect USB drive is by plugging the device into an isolated Linux-based computer that doesn’t automatically mount the drive to the operating system.

“We would then create a forensic image of the USB and extract any malware for analysis in the lab,” he said. “While there is still a very small risk that the malware targets Linux, that’s not the normal case.”

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Suse is once again an independent company

Open-source infrastructure and application delivery vendor Suse — the company behind one of the oldest Linux distributions — today announced that it is once again an independent company. The company today finalized its $2.5 billion acquisition by growth investor EQT from Micro Focus, which itself had acquired it back in 2014.

Few companies have changed hands as often as Suse and yet remained strong players in their business. Suse was first acquired by Novell in 2004. Novell was then acquired by Attachmate in 2010, which Micro Focus acquired in 2014. The company then turned Suse into an independent division, only to then announce its sale to EQT in the middle of 2018.

It took a while for Micro Focus and EQT to finalize the acquisition, though, but now, for the first time since 2004, Suse stands on its own.

Micro Focus says that when it acquired Attachmate Group for $2.35 billion, Suse generated just 20 percent of the group’s total revenues. Since then, Suse has generated quite a bit more business as it expanded its product portfolio well beyond its core Linux offerings and into the more lucrative open-source infrastructure and application delivery business by, among other things, offering products and support around massive open-source projects like Cloud Foundry, OpenStack and Kubernetes.

Suse CEO Nils Brauckmann will remain at the helm of the company, but the company is shaking up its executive ranks a bit. Enrica Angelone, for example, has been named to the new post of CFO at Suse, and Sander Huyts is now the company’s COO. Former Suse CTO Thomas Di Giacomo is now president of Engineering, Product and Innovation. All three report directly to Brauckmann.

“Our genuinely open, open source solutions, flexible business practices, lack of enforced vendor lock-in and exceptional service are more critical to customer and partner organizations, and our independence coincides with our single-minded focus on delivering what is best for them,” said Brauckmann in today’s announcement. “Our ability to consistently meet these market demands creates a cycle of success, momentum and growth that allows SUSE to continue to deliver the innovation customers need to achieve their digital transformation goals and realize the hybrid and multi-cloud workload management they require to power their own continuous innovation, competitiveness and growth.”

Since IBM recently bought Red Hat for $34 billion, though, it remains to be seen how long Suse’s independent future will last. The market for open source is only heating up, after all.

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Chrome now supports your PC's media keys


Gokhan Balci/Anadolu Agency/Getty Images

Chrome is finally ready to make use of your keyboard’s media buttons. Google has released the polished version of Chrome 73, and its centerpiece is support for the media keys on many newer PC keyboards. You’ll need a Mac, Windows or Chrome OS system (Linux is coming later), but this will let you pause a web video even when the browser is in the background. We could see this causing problems if you regularly leave a media app open, but it could be immensely valuable if you treat YouTube like a jukebox or just have to dash off in a hurry.

Mac users, meanwhile, might be happy to hear that Progressive Web Apps are finally available for the platform. As elsewhere, they bridge the gap between websites and native apps with their own launchers, windows and distinct notifications. More than anything, this is about providing consistent access to PWAs across platforms — you’ll know that the app you like is available on virtually any computer, not to mention mobile devices.

Chrome 73 is available now, and Google is teasing details of more browser features in the near future.

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Polestar unveils its all-electric response to the Tesla Model 3

Volvo’s standalone electric performance brand Polestar introduced Wednesday its first all-electric vehicle — a five-door fastback that is gunning for the Tesla Model 3.

In the past few years, every time an electric vehicle — concept, prototype, or production version — has been unveiled, the term “Tesla killer” has been tossed about regardless of whether that car will ever even come to market.

In the case of Polestar 2, it’s unclear if it will be the “Tesla killer.” It’s possible that an entirely new group of customers will be attracted to the vehicle. What is clear: the Polestar 2 was designed to compete with the Tesla Model 3 in the U.S., Europe and China. 

You can watch the reveal on Polestar’s YouTube channel.

The specs

The Polestar 2 meant to be a performance electric vehicle. It’s equipped with two electric motors and a 78 kilowatt-hour battery pack that has an estimated EPA range of about 275 miles.

The Polestar 2’s all-wheel drive electric powertrain produces 300 kW ( an equivalent of 408 horsepower) and 487 lb-ft of torque. This is above the rear-wheel (and currently cheapest) version of the Model 3. It’s just a skoosh under the dual-motor performance version of the Model 3, which has an output of 450 horsepower and 471 lb-ft of torque.

The Polestar 2 accelerates from 0 to 100km (about 62 mph) in less than 5 seconds — again a stat that puts it right above the mid-range Model 3 and below the performance version.

Polestar 2-Exterior-Front

Android inside

In 2017, Volvo announced plans to incorporate a version of its Android operating system into its car infotainment systems. A year later, the company said it would embed voice-controlled Google Assistant, Google Play Store, Google Maps, and other Google services into its next-generation Sensus infotainment system.

Polestar has followed Volvo. The Polestar 2’s infotainment system will be powered by Android OS and as a result, bring embedded Google services such as Google Assistant, Google Maps, and the Google Play Store into the car.

This shouldn’t be confused with Android Auto, which is a secondary interface that lays on top of an operating system. Android OS is modeled after its open-source mobile operating system that runs on Linux. But instead of running smartphones and tablets, Google modified it so it could be used in cars.

The Polestar 2 will also have so-called “Phone-As-Key technology,” which basically means customers will have the ability to unlock their car remotely using their smartphones. This capability opens the door — literally and figuratively — for owners to rent their vehicle out via car sharing or use a delivery service to drop off items in the vehicle.

The feature also allows Polestar 2 to sense the driver upon approach. 

Polestar 2-Interior

Market plans

The base price of Polestar 2 is 39,900 euros ($45,389), the company says. However, for the first year of production the pricier “launch edition” will only be available at 59,900, or about $68,000. (The prices are listed before any federal or state incentives might be applied).

Production of the Polestar 2 will begin in early 2020 at its Chengdu, China factory. The company is initially targeting sales in China, the U.S., Canada and a handful of European countries that include Belgium, Germany, the Netherlands, Norway, Sweden and the UK.

Polestar, like its potential rival Tesla, is also ditching the dealership. Polestar will only sell its vehicles online and will offer customers subscriptions to the vehicle. Subscription pricing will be revealed at a later date, Polestar said.

The automaker is also opening “Polestar Spaces,” a showroom where customers can interact with the product and schedule test drives. These spaces will be standalone facilities and not within existing Volvo retailer showrooms.

Polestar was once a high-performance brand under Volvo Cars. In 2017, the company was recast as an electric performance brand aimed at producing exciting and fun-to-drive electric vehicles — a niche that Tesla was the first to fill and has dominated ever since. Polestar is a jointly owned by Volvo Car Group and Zhejiang Geely Holding of China. Volvo was acquired by Geely in 2010.

The company’s first vehicle, the Polestar 1, was unveiled in September.  The Polestar 1 is not a pure electric vehicle; it’s a plug-in hybrid with two electrical motors powered by three 34 kilowatt-hour battery packs and a turbo and supercharged gas inline 4 up front.

Polestar said Wednesday that its next vehicle, the Polestar 3, will be an all-electric “performance SUV.” The company didn’t provide any additional details about the Polestar 3.

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