Zoom swung for the fences last summer when its stock value was soaring, offering almost $15 billion to buy Five9 to get into customer service. Eventually the deal fell apart when the stock price plunged, but Zoom’s desire to get into customer service, one way or the other didn’t diminish.

Earlier this year, the company announced a new customer service solution, which would take advantage of existing Zoom capabilities. As the company wrote in a blog post announcing the new service:

Combining contact center functionality with Zoom unified communications solutions, Zoom Contact Center can operate as a standalone customer experience solution or integrate directly into an existing website or application. Zoom customers who use Zoom Meetings, Zoom Phone, and/or Zoom Chat will recognize the agent and supervisor interaction handling experience, as it is part of the same Zoom application.

By pulling together some existing functions, the company was able to offer a customer service experience inside the Zoom tool set. Today, the company announced plans to extend that by acquiring Solvvy, a 9 year old startup that concentrates on conversational AI.

With Solvvy, the company gets more automation and intelligence and the ability to clear routine questions without having to speak to a person. Velchamy Sankarlingam, President of Product and Engineering at Zoom certainly recognizes that this acquisition gives the company crucial functionality for competing in this space.

“Solvvy’s proprietary technology will broaden Zoom Contact Center’s offering with scalable self-service and conversational AI. Our customers will benefit from an automated, integrated, and easy-to-deploy contact center, which will help answer end-customers’ questions and solve issues faster – improving the overall customer experience and driving operational savings,” Sankarlingam wrote in a blog post announcing the deal.

Brent Leary, principal analyst and founder at CRM Essentials, who watches the customer service space, says that this may be a more practical deal than the one with Five9.

“I think this could actually be a better fit for Zoom than Five9 would have been. Conversational AI integration with Zoom’s communications platform seem like a nice combination that strengthens both sides and potentially creates better experiences for both customers and employees interacting with each other,” he told TechCrunch.

While the companies did not share a purchase price, Solvvy, which launched back in 2013, raised $16.5 million along the way, according to Crunchbase data. The deal is expected to close in the third quarter of this fiscal year.

Zoom stock is up over 9% in early trading this morning.

Grocery delivery unicorn Instacart filed privately to go public yesterday, a long-awaited event for the well-known private company. During its startup days, Instacart raised huge amounts of capital and grew rapidly. When the pandemic arrived, Instacart’s business turbo-charged as demand for its service reached a fever pitch.

The last year has been less kind. Growth slowed as Instacart lapped a year of revenue expansion driven by COVID-19 and more folks staying home and ordering in. That Instacart held onto some of that 2020 energy and managed to grow last year is something of a feat.

However, the company was not priced during its most recent venture capital rounds with slowing growth in mind, leading to Instacart revaluing itself earlier in the year. The action helped clear the path for more employee-friendly compensation and reset expectations for its exit.

That exit is now before us. We lack the company’s formal S-1 filing because Instacart took the “file privately before filing publicly to go public” route. But because we are now in the chute for an eventual Instacart IPO, let’s take stock of the company’s recent news and ask a few questions.

The key questions in our mind heading into Instacart’s debut concern its growth, economics, and revenue mix. As you can imagine, these are interlinked.

The first quarter was a hot time for crypto-focused startups. According to a recent dataset from CB Insights, crypto startups raised more capital than ever before in Q1 2022 and set records across a host of other metrics.

If you closely watched the first-quarter venture capital cycle, this should not come as a surprise. As The Exchange noted, the crypto startup economy — blockchain technology upstarts, trading platforms, web3 more generally, etc. — was busy partying while the rest of startup land was buckling under a falling stock market, limited exit opportunities, and a dramatic repricing of the value of software revenues.

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

Crypto startups mostly shrugged that off, raising a huge number of rounds worth $100 million in the three-month period and minting a record number of unicorns, CB Insights reports.

The bets may have been poorly timed. In recent weeks, the crypto market suffered from a number of issues, the latest stemming from the collapse of the so-called algorithmic stablecoin Terra and its sister token, Luna. Crypto prices have fallen sharply in recent days, likely harming trading volumes as well.

The contrast between record venture capital totals in the first quarter and crypto’s retrenchment might seem ironic, maybe even humorous if you are the cynical type. Instead, it’s more of a reflection of how even professional investors can get caught up in a moment, a frenzy of checkbooks competing for a limited number of startup bank accounts overbidding their real value.

Even more, we learned this week that investors should have known better, at least a little. Let’s talk about data, declines, and early warning signs.

Crypto’s heady Q1 flops into Q2

Briefly, the top-level numbers from Q1, per CB Insights, go as follows:

• $9.2 billion in total investment during Q1 2022, an all-time high that bested the prior record (Q4 2021) by around $400 million.
• 461 total blockchain-focused startup deals in the first quarter of 2022, some 60 deals over the prior record (Q4 2021).
• 28 total rounds worth $100 million or more in Q1 2022, up from the prior record of 18 set in Q3 2021.
• A total of 62 crypto-focused unicorns around the world, up from 49 in the final quarter of 2021.
• Decentralized finance startups raised $2.1 billion in the first quarter, and NFT-focused startups $2.4 billion, both all-time highs.
• Finally, Q1 2022 was the second quarter in a row in which U.S. crypto startups pulled in more than $5 billion.

Hell yeah, you might be saying, crypto is the future, so all of the above makes sense! That perspective is perfectly fine so long as your time horizon is lengthy. For those of us who care about what happens inside the next few years, let alone upcoming quarters, the data above may indicate a peak of sorts.

Why? Because sitting here nearly in the middle of Q2 2022, it’s hard to imagine such exuberance persisting in the rest of the current quarter. With prices in decline for key assets and the NFT market taking a pause from prior growth, it’s not clear where new investor excitement will come from in the near term.

But don’t shed a tear for crypto startup backers; they had early warnings. Recall that in its Q4 2021 earnings, Coinbase said the following:

Good Startup founders Gautam Godhwani and Jayesh Parekh

Good Startup, a Singapore-based venture capital firm focused on alternative protein, has closed its latest fund. Consisting of $34 million, the new fund, called Good Protein Fund I, included participation from Vinmar International founder and chairman Vijay Goradia; former head of finance and strategy for Fidelity Investments Harris Komishane; and INSEAD professor of entrepreneurship Bala Vissa. 

Founded in 2021, Good Startup wants to remove animals from the global food system. It also invests in non-food startups: for example, companies that make alternatives to leather. So far, Good Startup has invested in 21 companies out of a target of 35 startups. 

Good Startup managing partner Gautam Godhwani told TechCrunch that the firm invests primarily in early-stage companies, with an average check size of $500,000. 

Some of its current portfolio companies include Avant Meats, which produces cultivated fish products and has operations in Singapore and Hong Kong; Nowadays, a producer of plant-based “clean-label” chicken; Mooji Meats, which is focused on 3D-printing capabilities to produce plant-based and cultivated meats; Rebellyous Foods, another plant-based chicken startup that Godhwani said achieves price parity with conventional chicken through a highly-automated production process and is targeted at the food service sector; and VitroLabs, a lab-grown leather producer. 

French startup Sencrop just raised an $18 million Series B funding round led by JVP. The company helps farmers mitigate all sorts of risks, from extreme weather events to diseases that affect various crops. It is both a hardware and software play with a forecasting service that you can access through a subscription product.

Weather forecasting is a complicated industry as it requires a ton of data to create an accurate forecasting model. That’s why Sencrop is drawing inspiration from Netatmo or Waze and betting on crowdsourcing to improve its service.

Sencrop customers can buy their own connected stations to measure temperature, humidity, rainfall, wind speed and sunlight. These weather stations all contribute to Sencrop’s real-time data.

And it’s been working well as the company has already sold over 20,000 weather stations. In France, there’s one weather station per 20 square kilometers on average. The company operates in 20 countries and has office in France, the Netherlands, the U.K., Germany, Spain and Italy.

Customers can see current weather conditions and export historical data. But they can also move around the map, set up alerts and select between multiple forecasting models to prepare for the next few days and anticipate agronomic risks. Sencrop can help you when it comes to water stress and irrigation management as well. There are multiple subscription levels that let you access more features.

Sencrop also provides multiple integrations with Decision Support Tools, such as Rimpro, VitiMeteo, fruitweb, 360 viti and Idroplan. This metric-driven way of growing fruits, cereals or vines should lead to better productivity and an improvement on the bottom line.

In addition to JVP, other investors in today’s round include EIT Food, Stellar Impact, IRD Management and some of the company’s existing shareholders, such as Bpifrance, Demeter IM and NCI Waterstart.

“Sencrop’s mission is to democratize precision farming and reduce crop risks for farmers”, Sencrop co-founder and General Manager Martin Ducroquet said in a statement. “We have developed a unique microclimate technology which today allows more than 20,000 professionals — farmers, winegrowers, fruit growers, etc. — to access ultra-precise and ultra-local information for better daily monitoring of their crops and the risks on their plots.”

Up next, the company wants to accelerate its international expansion, starting with North America.

Hannah Life Technologies, a startup for couples trying to conceive, announced today it has raised $5.15 million in pre-Series A funding led by Monk’s Hill Ventures. Other investors include Golden Gate Ventures, Anthro Ventures, and medical technology entrepreneur Dr. Jack Wang. The funding comes about 18 months after the company raised seed funding from Y Combinator.

Benjamin Tee, who co-founded Hannah Life with Prusothman Raja, told TechCrunch that he and his wife experienced unexplained fertility, a physically and emotionally stressful time. “Although my wife and I finally conceived through IVF, I felt that there could be non-invasive home based technologies to help couples conceive earlier.”

Tee, who met Raja through the Stanford Biodesign program, also found that the “often the burden of pregnancy falls on the female gender’s shoulders, across many cultures. As males, we wanted also to help balance the perception that infertility is often caused by female factors. Roughly half of fertility issues come from males, such as low sperm count and quality.”

The company offers three main direct-to-consumer products, created to give couples home-based non-invasive services as a complement to clinic-based procedures like intra-uterine insemination (IUI).

The twoplus Sperm Guide is a patented device made out of medical-grade silicone that concentrates sperm near the cervical opening to increase chances of fertilization. The twoplus Applicator was created for couples trying to conceive without penetrative sex and deposits sperm directly onto the cervical opening. The twoplus Hormone Test provides detailed reports on hormones, helping couples determine their levels of fertility and potentially spotting health issues.

The company says that since it launched in August 2021, it has provided products to over a thousand households in Singapore and the United Kingdom, with revenue growth of over 300% quarter-over-quarter.

Arianee has raised a $21 million Series A round (€20 million) in a round led by Tiger Global. The company issues digital ownership and authenticity certificates on behalf of partner brands.

For instance, a luxury and fashion brand can replace the authenticity card that you get with your new watch or handbag with a digital certificate. As those certificates are non-fungible tokens, you can know for sure that there’s only one NFT for this specific good with this serial number and activation date.

And, of course, if you want to sell your good, you can also prove the authenticity to the buyer and transfer the certificate to another owner. A certificate isn’t tied to your name or email address. Customers get a wallet address and stores their certificates in their wallet.

Arianee customers can then leverage these certificates for other purposes. When people download the Arianee app and add the digital passport to their smartphone, brands get a new channel to reach their customers.

You may have noticed that NFTs have become quite trendy over the past year. Arianee plans to take advantage of that as well with support for airdrops, metaverse deployments and cool in-app visualizations.

It integrates with their CRM and gives more information about second-hand customers. Brands can also have their own white-label app or integrate Arianee’s features in their own apps to control the experience.

Customers include Printemps, Breitling, Groupe Casino, Vacheron Constantin, Paris Fashion Week, Panerai and IWC.

In addition to Tiger Global, existing investors Bpifrance, ISAI, Noia Capital and Cygni Labs are also participating in today’s round. Commerce Ventures and Motier Ventures are also investing in Arianee as first-time investors.

Interestingly, this isn’t a traditional equity round. Investors are buying shares in the startups, but also $ARIA20 tokens. Those tokens power the open source protocol behind Arianee’s NFTs. Behind the scenes, Arianee relies on the main Ethereum blockchain and a side-chain called the POAnetwork.

“We are thrilled to welcome one of the most influential global investors to our journey and to see our historical partners continue to back us,” co-founder and CEO Pierre-Nicolas Hurstel said in a statement. “The structure of the investment in both equity & $ARIA20 token shows how a diverse global range of investors, from Bpifrance to Tiger Global, is willing to invest on open source and SaaS web3 solutions. Web3 is eating the world and we believe brands can leverage this revolution to regain control of their digital presence.”

Remember the IkeaBot? The robot went viral for its ability to build Ikea furniture as well (or better) than humans can. The team behind the project went on to found Eureka Robotics, which announced today that it has raised a pre-Series A round of $4.25 million, led by The University of Tokyo Edge Capital Partners (UTEC), one of Asia’s largest deep-tech investment firms, with participation from Vietnam’s Touchstone Partners and returning investor ATEQ.

Eureka Robotics’ products are based on research from Nanyang Technological University in Singapore and MIT. It focuses on robotic software and systems to automate tasks that require High Accuracy and High Agility (HAHA). Its robots are used for precision handling, assembly, inspection, drilling and other tasks.

The Eureka Controller’s High-Accuracy calibration synchronizes the reference frames of the robot and camera with high accuracy, enabling sub-millimeter accuracy on vision-guided tasks, while Force Control gives the robot the ability to perform tight assembly and insertion, with clearance down to 50 micron. Meanwhile, its High Agility involves computer vision that allows robots to recognize and locate randomly-placed objects. Once the robot finds the position of an object, real-time motion planning helps it move towards it.

An example of how the Eureka Controller can be used is the Archimedes, which deployed technologies originally developed for the Ikea Robot to a shop floor for the first time. It is capable of handling multiple-sized lenses and mirrors and loading those delicate objects onto a tray in order to be coated. Eureka co-founder Dr. Pham Quang Cuong told TechCrunch that the Archimedes is currently operating in a factory in Singapore, serving a U.S. laser lens manufacturer, and that the company has received multiple follow-up orders of the robot.

The funding will be used on accelerating development of Eureka Controller, the company’s flagship product, which allows factories to deploy HAHA tasks in System Integrators and factories. Eureka co-founder Dr. Pham said that “while the core technologies are mature and have already been deployed in production, we want to make those technologies really easy to use by System Integrators. Making advanced technologies easy to use by non-programmer engineers is actually difficult.” Part of the funding will be used to grow Eureka Robotics’ software engineering team and product teams to work on the Eureka Controller.

Eureka Robotics also plans to expand its commercialization in Singapore and China, and new markets like Japan and Vietnam, with the help of UTEC and Touchstone, respectively. It currently has offices in Singapore and France and distribution partners in China, Japan and the U.S.

By now you may be tired of stories detailing the bad news in the market. Too bad! More are coming.

If the deluge of negative headlines feels like a pile-on, recall that in 2020 and 2021, TechCrunch obsessively covered the technology, startup and venture capital markets’ various excesses; to not cover the party’s comedown would be a gross oversight.

For a broader think on the slowdown, and what falling prices for stocks and crypto assets mean for startups and unicorns more generally, head here. From here on out, we’re only talking SaaS.

What’s the matter with software companies?

Software companies, viewed through the public subset of the larger cohort, had a simply amazing run after COVID settled onto the global stage. Public software companies were beneficiaries of two things: First, it quickly became clear that software would keep selling, even in a downturn. And, second, there was little to no growth in other places to invest in, so money piled into tech concerns.

This was the pandemic trade, in effect. And as it became a defining period for the value of tech stocks, its unraveling is having a similar effect, in reverse.

That reversal is not done. Not yet. Despite a massive sell-off since November highs, tech stocks are proving today that there are new depths to plumb. For example:

Image Credits: Yahoo Finance

This particular ETF tracks the Bessemer Cloud Index, a list of public software companies that mostly deliver their business through the cloud. The basket of stocks peaked at $65.51 per share, meaning that as I write to you, it’s off 54% and change.

It’s a nasty day for asset prices.

Around the world, the stock market is selling off. Here in the United States, shares are following suit in early-morning trading. Tech stocks are taking fresh blows, and sentiment among the investing classes has cooled from chilly to frozen as last year’s ebullience gets a long-awaited reality check.

To understand the scale of the pain, let’s use a few stocks as indicators. Coinbase, which saw its value skyrocket to as much as $368.90 per share after its direct listing, kicked off trading today for less than $100 per share. Zoom, whose value soared to $406.48 in the last year, is now worth around $93 per share.

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

The value of software shares more generally is no better. The Bessemer Cloud Index is off more than 50% from all-time highs set last November. In far less than a year, then, we’ve seen the value of tech companies peak, and then crater. The fall from grace has been rapid, but not even, as startups managed to keep treading water for months longer than their public counterparts. That’s changing.

The world of blockchains and digital assets is also under fire from investors, selling off sharply in recent days.

Doom, gloom, and sadness all around? Yes, but not entirely.

The good news is that while prices are flatlining around the world for tech assets, we’re going to get a real shakeout in the coming quarters. It will be clarifying and will shine a light on a whole lotta claptrap. Call it joker detection. Let me explain.

From slowdown to shakeout

There’s no point in porcine cosmetics; we could be heading into a massive startup correction on the order of March 2020, but for a longer period of time, and with declines that wind up being larger in aggregate.

So what’s the upside? A decline in bullshit.

In a letter that Uber’s CEO sent to his staff over the weekend — CNBC has the scoop there — there was a lot worth chewing on, but one thing, in particular, stuck in my craw (emphasis TechCrunch):

In times of uncertainty, investors look for safety. They recognize that we are the scaled leader in our categories, but they don’t know how much that’s worth. Channeling Jerry Maguire, we need to show them the money. We have made a ton of progress in terms of profitability, setting a target for $5 billion in Adjusted EBITDA in 2024, but the goalposts have changed. Now it’s about free cash flow. We can (and should) get there fast.

Hot damn.

Hugging Face has closed a new round of funding. It’s a $100 million Series C round with a big valuation. Following today’s funding round, Hugging Face is now worth $2 billion.

Lux Capital is leading the round, with Sequoia and Coatue investing in the company for the first time. Some of the startup’s existing investors participated once again. These investors include Addition, Betaworks, AIX Ventures, Cygni Capital, Kevin Durant and Olivier Pomel.

Despite a short life, Hugging Face has had an interesting evolution. When I first covered the company in 2017, the startup was focused on a consumer app. It looked like yet another messaging app. And yet, there was no one on the other side of the conversation as it was a chatbot app for bored teenagers.

That consumer bet hasn’t paid off, but the company kept iterating on its natural language processing technology. Hugging Face released the Transformers library on GitHub and instantly attracted a ton of attention — it currently has 62,000 stars and 14,000 forks on the platform.

With Transformers, you can leverage popular NLP models, such as BERT, GPT-2, T5 or DistilBERT and use those models to manipulate text in one way or another. For instance, you can classify text, extract information, automatically answer questions, summarize text, generate text, etc.

Due to the success of this libary, Hugging Face quickly became the main repository for all things related to machine learning models — not just natural language processing. On the company’s website, you can browse thousands of pre-trained machine-learning models, participate in the developer community with your own model, download datasets and more.

Essentially, Hugging Face is building the GitHub of machine learning. It’s a community-driven platform with a ton of repositories. Developers can create, discover and collaborate on ML models, datasets and ML apps.

Hugging Face also offers hosted services, such as the Inference API that lets you use thousands of models via a programming interface, and the ability to “AutoTrain” your model.

With today’s funding round, the company plans to do more of the same. 10,000 companies are now using Hugging Face in one way or another, so it’s not time to pivot again.

Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. Every Monday, Grace and Alex scour the news and record notes on what’s going on to kick off the week.

Happily once again we did not start the day by talking about Elon Musk and Twitter, though the news was not really very good:

• Stocks are down sharply around the world. And crypto prices, which track larger asset prices, are also sharply lower in the last day, and week.
• Uber’s CEO told his company that things are changing. Adjusted EBITDA is out, FCF is in. Hiring? Going to slow. Capital expenses? Those will get harder looks, and so on. During the show, we asked about the slowdown, and how it may, or may not impact the bouyant crypto startup market.
• Neat funding rounds from Pyramid, which raised $120 million, and Paymob, which raised $50 million.

We are recording live this weekend, so catch the show on Thursday as we record our Friday episode! Chat soon!