Philly’s Crossbeam – “Tinder for business” – obtains $ 76 million from Andreesen of Silicon Valley
It’s been 10 years since venture capitalist Marc Andreessen sadly proclaimed that “software eats the world” and that the United States must catch up. His Silicon Valley company, Andreessen Horowitz, has now invested $ 20 billion in hundreds of other software-based start-ups, including Twitter, Skype, Lyft and Coinbase.
His latest pick is Crossbeam, a Philadelphia company that has built a software engine that confidentially matches software vendors with users in tech companies. It’s similar to the LinkedIn job app or the Tinder dating app, but for fast-moving digital businesses that need to find the right entrepreneurs and pursue the best strategies.
Andreessen Horowitz leads a $ 76 million investment in Crossbeam, a three-year-old, 68-employee Center City startup that sets up its 5,000 client companies with technology vendors, for an annual fee ranging from six figures.
It happened quickly: “We were all locked in our basements by the pandemic and had to find something to do. So we’ve built a great company, ”said Robert Moore, a Glassboro native and Princeton graduate, whose team has a good track record of building successful businesses. Moore co-founded Crossbeam with Francis “Buck” Ryan, his former enterprise data platform partner RJMetrics (sold over $ 23 million to Magneto in 2016) and data pipeline developer Stitch (sold to Talend for $ 60 million two years later).
Users on Crossbeam have more than doubled since January, Moore said. The company plans to double its workforce, adding more engineers, salespeople and bosses.
Half of the staff are based in the Philadelphia area, but like other companies in the pandemic era, “we hire everywhere,” Moore said.
Customers include construction software leader Procore Technologies, push alert and targeted text message developer Twilio, and digital marketer Braze, among many digital service companies that need specialized technical help quickly.
Andreessen Horowitz’s partners Sarah Wang and Jennifer Li are managing the investment, which also includes former investors from Crossbeam, First Round Capital of Philadelphia and FirstMark Capital of New York, among others.
The software needs of enterprises are moving away from “SAP and Oracle domination” by large, expensive software vendors seeking “partnerships” to collect strong leads and attract more customers faster, Wang and Li said in a press release presenting Crossbeam partners Andreesen Horowitz. “High-growth companies deploy Crossbeam” and its deal-making network, pioneer of a new industry of “co-selling and cross-marketing”.
Commercial software makers Salesforce, HubSpot, and Kota are also investing in the deal.
Andreessen Horowitz’s previous investments in the region include Fanatics of digital retail billionaire Michael Rubin, the team equipment company, and the company of immunologist / oncologist Carl June, Tmunity Therapeutics.
It’s not just a hiring room. Crossbeam also finds upgrades from rapidly growing customers to software platforms like Salesforce and targets customers for services as they grow. “We help them make selections based on data, instead of flying blind,” said Moore.
Moore is aware that his company is profiting from the bullish equity market and ultra-low interest rates. These factors have recently lured hedge funds and private equity firms, as well as their wealthy clients in public pension plans and universities, into cell and gene therapy, autonomous vehicle and enterprise software startups, between others.
The money is piling up even as large companies that once invested heavily in venture capital – including pioneers GlaxoSmithKline, Comcast and DuPont – pull out, dismayed at the challenges they see in keeping their long-term profits out. such a specialized and rapidly expanding market.
“It’s wild,” Moore said. “There are more parties to venture capital than ever before. Very wealthy individuals. Hedge funds. Private equity fund. Much of the money ultimately comes from university endowments and public pension funds. “
Doesn’t that sound like a bubble, like the one that burst in 2001 when internet stocks fell? Maybe for speculative biotech or autonomous vehicle companies that go public without any sales. But enterprise software companies with paying customers and “formidable and compelling growth” are a better bet, Moore insisted. “This money is for growth.”
Andreessen Horowitz has more than doubled its investment staff to 70 since 2018 to strike more deals, according to The Information, which calls the venture capital giant a so-called “venture capitalist JPMorgan.”
“Andreessen has his hand in every cookie jar,” says Moore. The company considered investing in one of Crossbeam’s previous begging trips (it raised over $ 20 million before that last round), “but the stars didn’t align,” he said. added. “They knew we could fundraise. They wanted to see if we could be really big and create orders of magnitude of value. “
He said companies, including Andreessen, now employ small armies of researchers who constantly talk to tech companies about new or innovative businesses they need to buy digital services.
Moore was also busy at home during the pandemic. He and his wife had two children in less than two years. The family left the area of the University Hospital which he called home on his first start-ups and returned to South Jersey, which he said is a shorter ride, via PATCO, to the offices of Crossbeam in Walnut Street.
He said Philadelphia was now firmly on the Silicon Valley map, more so than when it tried to interest investors in its previous companies.
“Previously, we had to spend a quarter of every meeting explaining why it was okay to be in Philadelphia with its amazing universities,” Moore recounted. “There is now a story from Philadelphia – look at GoPuff, look at dbt (the old Fishtown Analytics), look [search engine] DuckDuckGo ”, all“ unicorns ”worth around $ 1 billion (or in Gopuff’s case $ 15 billion) on their last round of investment.
“Their founders each had a vision to build something great here and proved it,” Moore concluded. “San Francisco will continue to be the epicenter of the technological world. But cities like Philadelphia, Baltimore and Pittsburgh are making relative gains. It’s a great place and now is a great time to start a tech business.