An unprecedented, scary, very interesting six months
The world has changed in the last six months. However, there is one certainty — our lives, both business and personal, are more and more reliant on technology. Working from home has resulted in a rapid rise in the use of video-conferencing and collaboration tools. It has accelerated the migration to the cloud and our reliance on security tools, delivery services and e-commerce. The stock market agrees — technology stocks have been on a tear since their lows in March 2020.
It has been a busy time at Cervin Ventures. We closed Cervin Fund IV at $78 million, and Cervin’s total assets under management stands at $200 million. We are grateful to all our Limited Partners, entrepreneurs, and partners who have all been instrumental in us reaching this milestone.
A few of our portfolio companies have raised new capital. Paystand, EdCast, and LaunchDarkly raised sizable rounds (details below) right before the pandemic hit us. Privacera and Zycada closed new rounds of capital during the pandemic, highlighting the potential for these companies. We expect our portfolio companies to announce additional capital raises in the next quarter.
Our portfolio companies have had varying degrees of impact as a result of COVID-19 and the lockdown. In general, our portfolio CEOs have navigated the disruption well and taken strong steps to mitigate the impact. Companies in industry verticals such as restaurants and retail, and in functional areas such as HR talent acquisition, have been affected negatively, whereas those in the collaboration and productivity space have seen positive impact.
The venture industry as a whole has seen some impact. The latest PItchbook-NVCA Venture Monitor Q2 2020 will provide you with additional insights. For the first time in years, the number of late-stage deals have outpaced early-stage deals. However, angel financings were healthy, even as seed deals declined. The industry will get used to completing deals via Zoom and meeting management teams over socially distanced walks.
At Cervin, we remain active, and our deal flow has been very healthy. We look forward to continuing to invest in great teams.
Portfolio News
Fund II
Paystand — February 2020, Series B, $20 million
While consumers have moved away from cash, with cash transactions now below 25% in most developed nations, businesses continue to use cash, checks, and physical invoices extensively. However, mounting pressures to cut labor costs and increase cash flow is driving companies to replace these paper-based systems. Paystand has established a market-leading position as the industry’s only solution for corporations and their finance teams that automates and digitizes the entire enterprise cash cycle. The company continues to innovate with its blockchain-enabled commercial payments platform, Zero card for ePayments, and solutions for various industries. In early 2020, the company raised a $20 million Series B round, led by DNX Ventures. The investment will be used to accelerate expansion of its products and services and grow its team.
EdCast — December 2019, Series D, $35 million
EdCast, the Knowledge Cloud company with customers that include Dell EMC, HPE, Diageo and ANZ Bank, raised $35m from Avathon Capital (Sterling Partners) and existing investors earlier this year as it continues its growth as the SaaS leader in the corporate learning, upskilling and talent development segments. The EdCast platform enhances how employees learn, share and collaborate, including across work teams that are more remote and distributed than ever. The company was awarded a Technology Pioneer award by WEF and ranked as the #1 LXP by analyst Craig Weiss. EdCast will use the infusion of new capital to expand its international footprint and market share.
Fund III
LaunchDarkly — January 2020, Series C-1, $54 million
LaunchDarkly enables software teams to improve their software development cycle. It provides a feature management platform that serves over 100 billion feature flags daily, enabling engineering teams to build better software, faster with less risk. LaunchDarkly provides SDKs for all major web and mobile platforms and is used by hundreds of customers including Atlassian, Microsoft, and CircleCI. In early 2020, the company announced a $54 million C-1 round, led by Bessemer Venture Partners. The investment will be used to address the surge in demand for the industry-leading deployment platform.
Zycada — June 2020, Series B, $19 million
Zycada makes online shopping experiences better by improving response time. It does it by leveraging the power and scale of bot technology. Zycada bots work ahead of customers as software concierges, supporting micro-programming to allow merchants to customize each shopper’s experience. This customization delivers direct value to customers in increased online retail revenues. We participated in the Series B round led by Kholsa Ventures. The majority of the capital raised will be put toward product development and expansion of go-to-market efforts.
Fund IV
Privacera — July 2020, Series A, $13.5 million
Privacera enables secure data sharing in the public cloud. As enterprises increasingly move their data centers and valuable data assets to the cloud, security is critical. The company builds upon Apache Ranger, an open source initiative started by the founders, to provide world-class automated discovery, access control, and compliance. The company continues to win large enterprise customers who trust Privacera with their most prized data. We led their seed round in October 2019 and participated in their recent Series-A round led by Accel.
As always, we thank you for being part of Cervin’s community and welcome your recommendation to enterprise seed-stage founders that need engaged capital partners.
- The Cervin Team
