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Inside SaaS

Inside SaaS (Aug 7th, 2019)

1. "Anti-bro" screen-sharing app Squad has raised $5 million in seed funding after launching last January. A video chat app that allows users to share their screens in real-time, Squad pivoted away from its original mission as an information-sharing tool in January and has since seen an explosion in growth without a single marketing dollar being invested. Remarkably, the startup has collected 450,000 registered users in eight months, 70 percent of whom are teenage girls. “Completely accidentally we’ve developed this global audience of users and it’s girls all over the world,” Squad co-founder and CEO Esther Crawford told TechCrunch. Unique to the app, Squad allows users to share experiences with friends, such as watching YouTube videos together, or jointly exploring AirBnb vacations or dating apps, for example. -- TECH CRUNCH

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2. Cisco has acquired AI assistant Voicea to compete in the ever-crowded workplace collaboration space. Cisco did not disclose the terms of its purchase. Voicea is a platform that provides real-time meeting transcripts, voice search and highlights. The acquisition is seen as a move to bolster Cisco's WebEx collaboration platform, which is used by more than 130 million people a month, and would be especially valuable in a space already tightly contested by Zoom Video, Microsoft Teams and BlueJeans. In addition to transcription services, Voicea will provide WebEx with an automated speech recognition engine. Cisco stock surged 2.4 percent upon announcement of the acquisition. -- ZDNET

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3. ON THE CUSP: Software testing startup Ultranauts has raised $3.5 million in Series A funding in support of its mission to hire autistic engineers. The New York-based company employs high-functioning individuals on the autism spectrum, who make up 75 percent of its largely remote workforce spread out across 20 U.S. states. Its Series A financing was led by The Disability Opportunity Fund and SustainVC, the latter of which commended the startups' "inspiring" mission. 

Ultranauts has clearly hit a chord in the tech world. Founded in 2013 by MIT engineers Rajesh Anandan and Arthur Shectman, the company believes that hiring "neurodiverse" teams can provide a competitive advantage because they demonstrate natural abilities that are particularly suitable for software testing, such as pattern recognition, focus, attention to detail, and tolerance for repetition. Since its founding, Ultranauts has grown over 50 percent annually and is accelerating, exceeding 70 percent YOY growth in the fourth quarter of 2018 and 100 percent YOY growth in the first quarter of 2019.

The company's "data-driven recruiting" process has proven successful against tech giants: Ultranauts engineers outperformed IBM by discovering 56 percent more bugs for a Fortune 100 financial services firm, and another Ultranauts team displaced CapGemini at an insurance tech startup. --  TECH STARTUPS

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4. Machine learning assistant startup Scale AI has raised $100 million in Series C funding to reach unicorn status. The latest funding round was led by Founders Fund and brought the startup's valuation to over $1 billion, Scale’s 22-year-old CEO Alexandr Wang said in a blog post. Wang, an MIT dropout, has led the development of the company's machine learning services, such as AI video annotation, image categorization, named entity recognition, and sentiment and intent analysis. Scale also offers an API platform that allows developers to send in raw data that is labeled and annotated by humans and AI technology on its network. -- SILICON REPUBLIC

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5. Cloud-based D2C workplace Backbone has raised $10 million in Series A+ funding for its product management software. The Boulder, Colorado-based SaaS company has now closed a total of $18 for the extended Series A round, which brings total investment to date to $23 million. Foundry Group led the extended round, which Backbone will use to continue to expand into consumer goods industries, such as fashion, furniture, home goods and textiles. Led by Matthew Klein, Backbone provides a cloud-based workflow platform for D2C brands that helps to streamline the manufacturing process. The SaaS firm claims to have 150 clients, including brands like Allbirds, Warby Parker, and Outdoor Voices.  -- CRUNCHBASE

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6. Code reviewing bot DeepCode has raised $4 million in seed funding to expand its machine learning capabilities. The AI-powered tool will use the fresh cash injection to add more programming languages (Java, JavaScript, and Python are currently supported), improve automated code recommendations, and to expand its operations internationally. Launched in 2016, DeepCode's bot reviews bugs, alerts about critical vulnerabilities, and style violations in the earlier stages of software development. -- HELP NET SECURITY

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7. Enterprise work management SaaS Upland Software has raised $410 million in a new credit agreement. The Austin-based company will use the new funding to refinance an existing credit agreement, adding $33 million of additional cash, bringing its total balance to $141 million with net debt of $209 million. The company just announced its first-quarter financial statement, reporting 50 percent growth in total revenue and 60 percent growth in recurring revenue. Over one million users at over 9,000 accounts use Upland's enterprise work management software. -- FIN SMES

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8. GitHub has been named in a class-action lawsuit for "actively encouraging" hacking in relation to the Capital One security breach. The lawsuit also names Capital One and Microsoft, and asserts that source-code host GitHub “actively encourages (at least) friendly hacking.” Sabita Soneji, a lawyer for the plaintiffs, told Newsweek that GitHub has an obligation to filter posts and offer some monitoring for information posted on its platform. However, a GiuHub spokesman replied to Newsweek, saying that the site "promptly investigates content, once it's reported to us, and removes anything that violates Terms of Service." Security commentators are not impressed by the lawsuit, saying that it echoes similar recent cases where online platforms are blamed equally with the people that commit the illicit acts on them. They cite Section 230 of the Communications Decency Act, a law that has been used in cases to defend Facebook and 8chan. -- NAKED SECURITY

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9. Barcelona-based sexual wellness app Emjoy has raised €1 million ($1.12 million) in seed funding for libido-boosting audio content. Founded in 2018, the mobile-first app offers more than 80 audio sessions, including practical guides, meditation sessions and communication tips, originally focused on female sexuality. The startup claims the content is all research-backed. Founder and CEO Andrea Oliver Garcia said she was inspired to start the company after reading "several studies showing that over 40 percent of women struggle to attain orgasms and that 30 percent of women worldwide experience libido issues." The seed funding will be used to continue expansion in the U.S. and the U.K. -- TECH.EU

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10. Agricultural technology startup Gramophone has raised $3.5 million in a Series A investment round. Founded in 2016 by Indian Institute of Technology (IIT) graduates, Gramophone provides data insights to farmers that record the entire crop cycle through a smartphone app and a call center. The startup has also launched a beta image recognition platform, which uses AI-based tools to identify diseases in photos of crops provided by farmers. -- VC CIRCLE

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This newsletter is written and curated by Justin Calderón. Justin is based out of Barcelona, Spain, and has covered technology and SaaS news for a variety of publications, including the BBC and Newsweek. Follow him on Twitter at @justinfuyun

Editor: Kim Lyons (Pittsburgh-based journalist and managing editor at Inside).

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