Apple’s latest software upgrade brings a big change, Roku accuses Google of anti-competitive behavior and Brex raises a big funding round. This is your Daily Crunch for April 26, 2021.

The big story: iOS 14.5 brings privacy changes and more

Apple released the latest version of its mobile operating system today, which includes the much-discussed App Tracking Transparency feature, allowing users to control which apps are sharing their data with third parties for ad-targeting purposes.

Other new features include Watch unlocking (which could help users avoid the annoying “I can’t unlock my phone with my masked face!” phenomenon), new emojis and more.

The tech giants

Roku alleges Google is using its monopoly power in YouTube TV carriage negotiations — Roku is alerting its customers that they may lose access to the YouTube TV channel on its platform after negotiations with Google went south.

Lyft sells self-driving unit to Toyota’s Woven Planet for $550M — Under the acquisition agreement, Lyft’s so-called Level 5 division will be folded into Woven Planet Holdings.

Apple commits to 20,000 US jobs, new North Carolina campus — Apple this morning announced a sweeping plan to invest north of $430 billion over the next five years.

Startups, funding and venture capital

Brex raises $425M at a $7.4B valuation, as the corporate spend war rages on — The company has also put together a new service called Brex Premium that costs $49 per month.

Founded by Australia’s national science agency, Main Sequence launches $250M AUD deep tech fund —  Main Sequence’s second fund will look at issues including healthcare accessibility, increasing the world’s food supply, industrial productivity and space.

Mighty Networks raises $50M to build a creator economy for the masses — The company is led by Gina Bianchini, the co-founder and former CEO of Ning.

Advice and analysis from Extra Crunch

Founders who don’t properly vet VCs set up both parties for failure — Due diligence isn’t a one-way street, and founders must do their homework to make sure they’re not jumping into deals with VCs who are only paying lip service to their value-add.

How Brex more than doubled its valuation in a year — An interview with CEO Henrique Dubugras about that giant funding round.

There is no cybersecurity skills gap, but CISOs must think creatively — Netskope’s Lamont Orange doesn’t buy the idea that millions of cybersecurity jobs are going unfilled because there aren’t enough qualified candidates.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

How one founder partnered with NASA to make tires puncture-proof and more sustainable — This week’s episode of Found features The SMART Tire Company co-founder and CEO Earl Cole.

What the MasterClass effect means for edtech — MasterClass copycats are raising plenty of funding.

Hear about building AVs under Amazon from Zoox CTO Jesse Levinson at TC Sessions: Mobility 2021 — We’ll hear more about Zoox’s mission to develop and deploy autonomous passenger vehicles.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

iOS 14.5 — the latest version of Apple’s mobile operating system — is launching today, and with it comes a much-discussed new privacy feature called App Tracking Transparency.

The feature was first announced nearly a year ago, although the company delayed the launch to give developers more time to prepare. Since then, support for the feature has already gone live in iOS and some apps have already adopted it (for example, I’ve seen tracking requests from Duolingo and Venmo), but now Apple says it will actually start enforcing the new rules.

That means iPhone owners will start seeing many more privacy prompts as they continue using their regular apps, each one asking for permission to “track your activity across other companies’ apps and websites.” Every app that requests tracking permission will also show up in a Tracking menu within your broader iOS Privacy settings, allowing you to toggle tracking on and off any time — for individual apps, or for all of them.

What does turning tracking on or off actually do? If you say no to tracking, the app will no longer be able to use Apple’s IDFA identifier to share data about your activity with data brokers and other third parties for ad-targeting purposes. It also means the app can no longer use other identifiers (like hashed email addresses) to track you, although it may be more challenging for Apple to actually enforce that part of the policy.

Image Credits: Apple

There’s been intense debate around App Tracking Transparency in the lead up to its launch. The pro-ATT side is pretty easy to explain: There’s a tremendous amount of personal information and activity that’s being collected about consumers without their consent (as Apple outlined in a report called A Day in the Life of Your Data), and this gives us a simple way to control that sharing.

However, Facebook has argued that by dealing a serious blow to ad targeting, Apple is also hurting small businesses that depend on targeting to affordable, effective ad campaigns.

The social network even took out ads in The New York Times, The Wall Street Journal and The Washington Post declaring that it’s “standing up to Apple for small businesses everywhere.” (The Electronic Frontier Foundation dismissed the campaign as “a laughable attempt from Facebook to distract you from its poor track record of anticompetitive behavior and privacy issues as it tries to derail pro-privacy changes from Apple that are bad for Facebook’s business.”)

Others have suggested that these changes could do “existential” damage to some developers and advertisers, while also benefiting Apple’s bottom line.

The full impact will depend, in part, on how many people choose to opt out of tracking. It’s hard to imagine many normal iPhone owners saying yes when these prompts start to appear — especially since developers are not allowed to restrict any features based on who opts into or out of tracking. However mobile attribution company AppsFlyer says that early data suggests that opt-in rates could be as high as 39%.

Hawke Ventures, the investment arm of marketing consultancy Hawke Media, is announcing that it has closed its first $5.6 million venture fund.

Managing Partner Drew Leahy acknowledged that the firm’s focus on marketing technology isn’t exactly in high demand among other VCs right now.

“People are running away from martech […] but that’s our circle of confidence,” Leahy told me. “If you look at the biggest companies in the world, even Walmart now, they are all martech companies at the end of the day.”

While some might quibble with that description, it’s hard to deny the central role that marketing and advertising play for the internet’s biggest platforms. As for how that translates to Hawke’s strategy, Leahy said the firm is writing checks of between $100,000 and $250,000, with the possibility of follow-on investments.

Leahy, who was previously co-founder and CMO at SnapSuits.com, said that the fund has its roots in the strategic angel investing that he was doing for Hawke Media, ultimately working with the company’s CEO Erik Huberman and COO Tony Delmercado to raise a fund to make bigger bets.

He added that beyond writing checks, the firm can offer access to a network of 51 limited partners who invested in the fund. Those LPs include Deathwish Coffee founder Michael Brown, MVMT Watches founder Jack Kassan, former VaynerMedia executive Jeff Nicholson, husband-and-wife Holly (an actress and actress) and Rodney Pete (a former NFL player), Jill Zarin of “The Real Housewives of New York City,” Video Genome Product founder Xavier Kochhar and MarketShare founder Jon Vein.

And while most firms would say that they’re trying to fund the next Facebook or Google, Leahy said he has a slightly different focus: “We’re trying to build a different venture firm, that’s not about what we think next the big idea is, but is focused on building actual technology that we can use ourselves.

That also means the firm is mostly focused on products that can be used by small and medium businesses.

“We’re not an enterprise martech fund, we’re a small- and medium-sized business martech fund,” Leahy said. “We’re looking for pieces of technology that hundreds of thousands of users can be a part of.”

Early investments include SMS marketing company Postscript and analytics company Yaguara (acquired by Chord).

“As one of the earliest investors in Postscript, Hawke Ventures has worked with us since the beginning,” said Postscript President Alex Beller in a statement. “The entire Hawke org has been value-add since day one, and we’re proud to continue our partnership with Hawke as we build the definitive platform for Conversational Commerce.”

Israeli startup WhizzCo says it’s time for publishers to take the programmatic, auction-based approach to the ads in content recommendation widgets like Outbrain and Taboola.

After all, publishers regular employ this approach for most of the ads on their websites. But co-founder and CEO Alon Rosenthal said that when trying to monetize his own websites, he discovering for himself that it was “impossible” to maximize the revenue from those widgets in the same way.

“That was our real pain,” he said.

So with WhizzCo, Rosenthal and his team have built what they call a Content Recommendation Yield Platform, pulling native advertising from more than 40 different content recommendation providers, predicting which one will deliver the highest revenue for a given impression (whether that’s measured in CPM, CPC or CPA) and then delivering the ad from that provider.

Rosenthal added that WhizzCo works with publishers to ensure that the recommendation widgets and ads look like they’re a native part of a page, and that their appearance doesn’t change regardless of where the ad comes from He also said the publishers implement WhizzCo’s JavaScript on “not in the header, but on the actual code of the site — by doing that, we eliminate any loading problems whatsoever.”

Although WhizzCo is coming out of stealth now, it was actually founded in 2017 and has already worked with a number of publishers, including Penske Media Corporation’s She Media. In a statement, She Media Senior Vice President of Operations Ryan Nathanson said, “WhizzCo’s platform allowed us to create a competitive ecosystem, which has enabled tighter customization, competition and editorial guideline control, yielding a 75% increase in content recommendation CPM.”

And Rosenthal said that on average, WhizzCo customers see a 37.7% lift in content recommendation revenue.

“Our motto is that no one delivers 100 percent performance, 100 percent of the time,” he said. “No matter who you are, even if you’re Google [or any of the other big ad companies,] you cannot perform best at all times. That’s where we come in with our technology.”

Facebook is announcing some new capabilities for video advertisers on Facebook and Instagram, as well as new numbers about the potential audience that those ads might reach.

Numbers first: The company says that there are now 2 billion people each month who watch videos that eligible for in-stream ads. It also says that 70 percent of in-stream ads are watched to completion, with its studies showing that by adding a Facebook In-Stream campaign to ad purchases that already include News Feed and Stories, advertisers saw a median 1.5x increase in ad recall.

When discussing the news with Carolyn Everson, the vice president of Facebook’s global business group, I wondered whether traditional advertisers are comfortable with the company’s metrics. (Back in 2016, the company had to admit that due to an error, it had been inflating video view times, and is still facing criticism about how it handled the situation.)

Everson said Facebook is aiming to be “very specific” with its numbers. She also noted that the company only places in-stream ads in videos that are three minutes or longer, with the ad only playing after a viewer has watched at least 45 seconds (or more, depending on the video).

“I do believe that we are going to be very competitive and consistent with the marketplace,” she said. “Everyone measures these things a little bit differently, but these are numbers that people are going to be very excited about.”

Image Credits: Facebook

On the product side, the company is starting a global test of In-Stream Video Topics, which will allow advertisers to target their ads not just by audience, but also based on the topic of a given video. In a blog post, Facebook says the initial targeting will include “over 20 Video Topics, like Sports, and over 700 hundred sub-topics such as Baseball, Basketball, Golf, or Swimming.”

Everson said the company will use machine learning technology to classify eligible videos, as well as to ensure that they meet Facebook’s brand safety guidelines.

In addition, Facebook is announcing that it will start testing ads in its short-form Instagram Reels format, initially in India, Brazil, Germany and Australia. These ads can be up to 30 seconds long, and users can interact with them in the same ways they interact with organic Reels content (liking, sharing, skipping).

Facebook sticker ads

And Facebook is testing the sticker ads that it announced last month, which will allow brands to create custom stickers, which creators can then include in their Facebook Stories.

Looking at all the announcements together, Everson (who joined Facebook in 2011) said, “Frankly, for the last 10 years, I’ve been so excited for the moment where we are absolutely ready for prime time in our discussions of online video solutions for marketers. With our news that we are announcing today, we have more than arrived.”

Ex.co is announcing its very first acquisition — it’s buying Cedato, a video monetization startup founded in 2015.

Previously known as Playbuzz, Ex.co is short for The Experience Company, and it provides publishers and other customers with an easy way to add interactive and visual elements (such as polls and product recommendations) to their content. The company says its publisher business grew revenue by 300% between 2018 and 2020.

According to co-founder and CEO Tom Pachys, over the past year, he’s become convinced that artificial intelligence is “taking over everything we do.”

“We started searching for companies that did video in a sophisticated way, meaning using [machine learning] as part of their core engines,” Pachys said. “When I say that, I mean things like choosing the right content, choosing the right ad, knowing how to manage an [ad] auction in the right way.”

He said Cedato stood out because it’s able to do all of this without affecting page load time, this will be increasingly important to Google’s Core Web Vitals measurements, and therefore to search rankings.

“It’s always a tradeoff between efficiencies and revenues in general,” Pachys said. “But for [Cedato], in a very surprising way, they can increase speed and increase revenues.”

By adding Cedato’s technology, Ex.co will be able to offer its customers things like predictive recommendations for video content, header bidding for video ads and improved support for connected TVs. Conversely, the company will continue to support existing Cedato customers while also offering them additional products.

“We’re not taking anything away, we’re just adding more solutions,” Pachys said.

The financial terms of the acquisition were not disclosed, but the entire Cedato team (based in New York and Israel) will be joining Ex.co.

“Since the company’s inception, Cedato has been laser-focused on creating the most advanced video tools with a simple, customer-first approach,” said Cedato founder and CEO Ron Dick in a statement. “Ex.co has a similar vision, powerful technology, and a large, loyal clientele base. Working together enables us to offer cutting-edge technology to our range of global partners, continuing to lead the way with product innovation that supports the market’s primary needs.”

Pachys added that Ex.co is looking to make another AI-related acquisitions, with the next one likely coming on the commerce side.

Catch&Release founder and CEO Analisa Goodin told me that she wants to help brands break free from the limitations of stock photography — and that her startup has raised $14 million in Series A funding to achieve that goal.

Goodin explained that the company started out as an image research firm before becoming a product-focused, venture-backed startup in 2015. The Series A was led by Accel (with participation from Cervin Ventures and other existing investors), and it brings Catch&Release’s total funding to $26 million.

Stock media and video services are moving in this direction themselves, for example by introducing their own libraries of user-generated content. Goodin applauded this, and she said Catch&Release isn’t opposed to the use of stock photos — it integrates with these stock marketplaces. At the same time, she suggested that she has a much bigger vision.

“This isn’t just about UGC, this is about tapping into the creative potential of the internet,” she said.

After all, you can now find pretty much any kind of content you can imagine somewhere online, but “a lot of advertising agencies and brands have been trained that if a piece of content comes form internet, avoid it,” because it’s just “too hard” to figure out how to license it.

Image Credits: Catch&Release

Catch&Release aims to make that process as simple as possible, first with a browser extension that allows marketers to save any media that they find on the web, anytime they think they might want to use in their own campaigns (this is the “catch” part of the process). It even presents a “licensability score,” which is a rating based on factors like the person who posted the content, the description and the comments, indicating how likely it is that a marketer will actually be able to license this content.

Then, when someone from a brand or advertising agency decides that they want to use a piece of content, they can send a licensing request with a push of a button (this is the “release”). Catch&Releases also analyzes the content for anything else that needs to be cleared or obscured, such as a company logo.

While we’ve written about other tools for licensing online content, Goodwin emphasized that Catch&Release isn’t just about finding photos for a social media campaign. Part of the goal, she said, is to erase the “stigma” around UGC, which now “represents the entire spectrum of culturally relevant content.”

For example, she showed me a Red Lobster commercial that looks like a normal TV ad, but was in fact assembled entirely from footage found online — something that’s been even more useful in the past year, with pandemic-related safety concerns around large shoots. (Catch&Release has also been used to license content for ads promoting TechCrunch’s parent company Verizon.)

Goodwin added that the new funding will allow Catch&Release to continue investing in product, engineering and marketing.

“No one has defined the commercial licensing layer for the web,” she said. “What’s got me really excited to build this product is being that layer for the internet, not just for photos and videos, but for writing, art, graphics, and building the commercial licensing engine of the web.”

Facebook announced this morning it will begin testing a new experience for discovering businesses in its News Feed in the U.S. When live, users to tap on topics they’re interested in underneath posts and ads in their News Feed in order to explore related content from businesses. The change comes at a time when Facebook has been arguing how Apple’s App Tracking Transparency update will impact its small business customers — a claim many have dismissed as misleading, but nevertheless led some mom and pop shops to express concern about the impacts to their ad targeting capabilities, as a result. This new test is an example of how easily Facebook can tweak its News Feed to build out more data on its users, if needed.

The company suggests users may see the change under posts and ads from businesses selling beauty products, fitness or clothing, among other things.

The idea here is that Facebook would direct users to related businesses through a News Feed feature, when they take a specific action to discover related content. This, in turn, could help Facebook create a new set of data on its users, in terms of which users clicked to see more, and what sort of businesses they engaged with, among other things. Over time, it could turn this feature into an ad unit, if desired, where businesses could pay for higher placement.

“People already discover businesses while scrolling through News Feed, and this will make it easier to discover and consider new businesses they might not have found on their own,” the company noted in a brief announcement.

Facebook didn’t detail its further plans with the test, but said as it learned from how users interacted with the feature, it will expand the experience to more people and businesses.

Image Credits: Facebook

Along with news of the test, Facebook said it will roll out more tools for business owners this month, including the ability to create, publish and schedule Stories to both Facebook and Instagram; make changes and edits to Scheduled Posts; and soon, create and manage Facebook Photos and Albums from Facebook’s Business Suite. It will also soon add the ability to create and save Facebook and Instagram posts as drafts from the Business Suite mobile app.

Related to the businesses updates, Facebook updated features across ad products focused on connecting businesses with customer leads, including Lead Ads, Call Ads, and Click to Messenger Lead Generations.

Facebook earlier this year announced a new Facebook Page experience that gave businesses the ability to engage on the social network with their business profile for things like posting, commenting and liking, and access to their own, dedicated News Feed. And it had removed the Like button in favor of focusing on Followers.

It is not a coincidence that Facebook is touting its tools for small businesses at a time when there’s concern — much of it loudly shouted by Facebook itself — that its platform could be less useful to small business owners in the near future, when ad targeting capabilities becomes less precise as users vote ‘no’ when Facebook’s iOS app asks if it can track them.

At first glance, Quiq and Snaps might sound like similar startups — they both help businesses talk to their customers via text messaging and other messaging apps. But Snaps CEO Christian Brucculeri said “there’s almost no overlap in what we do” and that the companies are “almost complete complements.”

That’s why Quiq (based in Bozeman, Montana) is acquiring Snaps (based in New York). The entire Snaps team is joining Quiq, with Brucculeri becoming senior vice president of sales and customer success for the combined organization.

Quiq CEO Mike Myer echoed Bruccleri’s point, comparing the situation to dumping two pieces of a jigsaw puzzle on the floor and discovering “the two pieces fit perfectly.” More specifically, he told me that Quiq has generally focused on customer service messaging, with a “do it yourself, toolset approach.” After all, the company was founded by two technical co-founders, and Myer joked, “We can’t understand why [a customer] can’t just call an API.”

Snaps, meanwhile, has focused more on marketing conversations, and on a managed service approach where it handles all of the technical work for its customers. In addition, Myer said that while Quiq has “really focused on platform aspect from beginning” — building integrations with more than a dozen messaging channels including Apple Business Chat, Google’s Business Messages, Instagram, Facebook Messenger and WhatsApp — it doesn’t have “a deep natural language or conversational AI capability” the way Snaps does.

Myer added that demand for Quiq’s offering has been growing dramatically, with revenue up 300% year-over-year in the last six months of 2020. At the same time, he suggested that the divisions between marketing and customer service are beginning to dissolve, with service teams increasingly given sales goals, and “at younger, more commerce-focused organizations, they don’t have this differentiation between marketing and customer service” at all.

Apparently the two companies were already working together to create a combined offering for direct messaging on Instagram, which prompted broader discussions about how to bring the two products together. Moving forward, they will offer a combined platform for a variety of customers under the Quiq brand. (Quiq’s customers include Overstock.com, West Elm, Men’s Wearhouse and Brinks Home Security, while Snaps’ane Bryant, Live Nation, General Assembly, Clairol and Nioxin.) Brucculeri said this will give businesses one product to manage their conversations across “the full customer journey.”

“The key term you’re hearing is conversation,” Myer added. “It’s not about a ticket or a case or a question […] it’s an ongoing conversation.”

Snaps had raised $11.3 million in total funding from investors including Signal Peak Ventures. The financial terms of the acquisition were not disclosed.

Apple is sharing more details today about its upcoming App Tracking Transparency feature, which will allow users to control, on an app-by-app level, whether their data is shared for ad-targeting purposes.

In a sense, anyone using the current version of iOS can see App Tracking Transparency in action, since iOS already includes a Tracking menu in the Privacy settings, and some apps have already started asking users for permission to track them.

But when iOS 14.5 (currently in developer beta) is released to the general public sometime in early spring, Apple will actually start enforcing its new rules, meaning that iPhone users will probably start seeing a lot more requests. Those requests will appear at various points during the usage of an app, but they’ll all carry a standardized message asking whether the app can “track your activity across other companies’ apps and websites,” followed by a customized explanation from the developer.

Once an app has asked for this permission, it will also show up in the Tracking menu, where users can toggle app tracking on and off at any time. They can also enable app tracking across all apps or opt out of these requests entirely with a single toggle.

One point worth emphasizing — something already stated on Apple’s developer website but not entirely clear in media reports (including our own)— is that these rules aren’t limited to the IDFA identifier. Yes, IDFA is what Apple controls directly, but a company spokesperson said that when a user opts out of tracking, Apple will also expect developers to stop using any other identifiers (such as hashed email addresses) to track users for ad targeting purposes, and not to share that information with data brokers.

This does not, however, stop developers from tracking users across multiple apps if all those apps are operated by a single company.

The Apple spokesperson also said that Apple’s own apps will abide by these rules — you won’t see any requests from Apple, however, since it doesn’t track users across third-party apps for ad targeting purposes. (As previously noted, there’s a separate Personalized Ads option that determines whether Apple can use its own first-party data to target ads.)

Facebook has been particularly vocal in criticizing the change, arguing that this will hurt small businesses who use targeting to run effective ad campaigns, and that the change benefits Apple’s bottom line.

Apple has pushed back against criticism in privacy-focused speeches, as well as in a report called A Day in the Life of Your Data, which lays out how users are actually tracked and targeted. In fact, the report has just been updated with more information about ad auctions, ad attribution and Apple’s own advertising products.

Spotify is opening up its personalized playlist, “On Repeat,” to advertising sponsorship. This playlist, launched in 2019 and featuring users’ favorite songs, is only the second personalized playlist on the music streaming service that’s being made available for sponsorship. Spotify’s flagship playlist, “Discover Weekly,” became the first in 2019.

The sponsorship is made possible through the company’s Sponsored Playlist ad product, which gives brands the ability to market to Spotify’s free users with audio, video and display ad messages across breaks, allowing the advertiser to own the experience “end-to-end,” the company says.

It also gives brands an opportunity to reach Spotify’s most engaged users.

When Spotify opened up “Discover Weekly” to sponsorship, for example, it noted that users who listened to this playlist streamed more than double those who didn’t. Similarly, “On Repeat” caters to Spotify’s more frequent users because of its focus on tracks users have played most often.

Since the launch of “On Repeat” in September 2019, Spotify says the playlist has reached 12 billion streams globally. Fans have also spent over 750 million hours listening to the playlist, where artists like Bad Bunny, The Weeknd, and Ariana Grande have topped the list for “most repeated” listens.

Though Spotify today offers its numerous owned and operated playlists for sponsorship, its personalized playlists have largely been off-limits — except for “Discover Weekly.” These are highly-valued properties, as Spotify directs users to stream collections powered by its algorithms, which Spotify organizes in its ever-expanding “Made for You” hub in its app. Here, users can jump in between “Discover Weekly,” and other collections organized by genre, artist, decade, and more — like new releases, favorites, suggestions, and more.

With the launch of sponsorship for “On Repeat,” brands across 30 global markets, including North America, Europe, Latin America and Asia-Pacific will be able to own another of Spotify’s largest personalized properties for a time.

The first U.S. advertiser to take advantage of the sponsorship is TurboTax, which cited the personalization elements and user engagement with the playlist among the reasons why the ad product made sense for them.

“Like music, taxes are not one size fits all. Every tax situation is unique and every individual’s needs are different,” said Cathleen Ryan, VP of Marketing for TurboTax, in a statement about the launch. “We’re using Spotify’s deep connection to its engaged listeners to get in front of consumers and show them that with TurboTax you can get the expertise you need on your terms. With Spotify, we’re able to get both reach and unique targeting that ensures the right audiences know about the tools, guidance and expertise that TurboTax offers,” she added.

Holler, described by founder and CEO Travis Montaque as “a conversational media company,” just announced that it’s raised $36 million in Series B funding.

You may not know what conversational media is, but there’s a decent chance you’ve used Holler’s technology. For example, if you’ve added a sticker or a GIF to your Venmo payments, Holler actually manages the app’s search and suggestion experience around that media. (You may notice a little “powered by Holler” identifier at the bottom of the window.)

Montaque told me the company started out initially as a news and video content app before focusing on messaging in 2016. Messaging, he argued, is “the most important experience for people online,” since “it’s where we communicate with the people who are closest to us.”

He continued, “It seemed bizarre that we haven’t seen much innovation in the text messaging experience since the first text message was sent in 1992.”

So Holler works with partners like PayPal-owned Venmo and The Meet Group to bring more compelling content into the messaging side of their apps — or as Montaque put it, the startup aims to “enrich conversations everywhere.”

Image Credits: Holler

There’s both an art and a science to this, he said. The art involves creating and curating the best stickers and GIFs, while the science takes the form of Holler’s Suggestion AI technology, which will recommend the right content based on the user’s conversations and contexts — the stickers and GIFs you want to send in a dating app are probably different from what you’d in a work-related chat. Montaque said that this context-focused approach allows the company to provide smart recommendations in a way that also respects user privacy.

“I believe that the future is context, not identity,” he said. “Because I don’t really need to know about Anthony, I just need to know someone is in need of lunch. If I know you’re in the mood for Mexican food, I don’t need to know every aspect of the last 10 times you went to a Mexican restaurant.”

Holler monetizes this content by partnering with brands like HBO Max, Ikea and Starbucks to create branded stickers and GIFs that become part of the company’s content library. Montaque said the startup has also worked with brands to measure the impact of these campaigns across a variety of metrics.

Holler’s content now reaches 75 million users each month, compared to 19 million users a year ago, while revenue has grown 226%, he said. (Apparently, last year was the first time the company saw significant revenue growth.)

The startup has now raised more than $51 million in total funding. The Series B was co-led by CityRock Venture Partners and New General Market Partners, with participation from Gaingels, Interplay Ventures, Relevance Ventures, Towerview Ventures and WorldQuant Ventures.

“Holler is more than simply a groundbreaking technology company,” said CityRock Managing Partner Oliver Libby in a statement. “Under Travis Montaque’s visionary leadership, Holler boldly stands for a new era of ethics in social media, and also deeply reflects the values of diversity, inclusion, and belonging.”

Montaque (who, as a Black tech CEO, wrote a post for TechCrunch last year about bringing more diversity to the industry) said that Holler will use the funds to continue developing its product and advertising model. For one thing, he noted that although stickers and GIFs were an obvious starting point, the company is now looking to explore and create new media formats.

“We want to invent a new kind of content consumption paradigm,” he said.