Sequoia-backed Medallia files to raise $70M at a $1.7B valuation, documents show

Customer experience management platform Medallia has filed to raise up to $70 million in Series F funding, according to regulatory documents obtained by the Prime Unicorn Index. The new shares were priced at $15 apiece, valuing the nearly two-decades-old business at $1.7 billion.

We’ve reached out to Medallia for comment.

Medallia is expected to finally transition to the public markets in 2019, a year chock-full of high-profile unicorn IPOs. The downsized round, which if raised at full is less than half of its Series E funding, is likely Medallia’s final infusion of private investment.

San Mateo-headquartered Medallia, led by newly-appointed chief executive officer Leslie Stretch, operates a platform meant to help businesses better provide for their customers. Its core product, the Medallia Experience Cloud, provides employees real-time data on customers collected from online review sites and social media. The service leverages that data to provide insights and tools to improve customer experiences.

Leslie Stretch, president and CEO of Medallia (PRNewsfoto/Medallia).

According to PitchBook, Medallia boasts a particularly clean cap table, especially for a roughly 18-year-old business. It’s backed by four venture capital firms: Sequoia Capital, Saints Capital, TriplePoint Venture Growth and Grotmol Solutions, the latter which invested a small amount of capital in 2010. Medallia has raised a total of $268 million in equity funding, including a $150 million round in 2015 that valued the company at $1.25 billion.

Prior to hiring Stretch to lead the company to IPO, Medallia co-founder Borge Hald ran the company as CEO since its 2001 launch. Hald is now executive chairman and chief strategy officer.

5 unicorns that will probably go public in 2019 (besides Uber and Lyft)

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YouTube disables comments on videos with kids after reports of predatory behavior

YouTube will shut off comments on videos featuring “younger minors and videos with older minors at risk of attracting predatory behavior,” according to a statement from the company. It’s an effort to stamp out predatory behavior from viewers that included salacious notes in the comments section of videos featuring underage kids.

Last week, TechCrunch confirmed reports which first arose on Reddit about the existence of a soft-core pedophile ring that was communicating via YouTube’s comments section and disseminating videos of minors by gaming the company’s search algorithms.

YouTube creator Matt Watson flagged the problem in a subreddit, noting that he found scores of videos of kids where YouTube users are trading inappropriate comments and identifying timestamps to focus on below the fold. Watson denounced the company for failing to prevent what he describes as a “soft-core pedophilia ring” from operating in plain sight on its platform.

YouTube under fire for recommending videos of kids with inappropriate comments

The reports brought condemnation from several businesses that advertise on YouTube (the company’s primary source of revenue). Disney, Fortnite maker Epic Games, McDonald’s, and Nestlé Foods, reportedly all pulled advertising from the site in the wake of the scandal.

“Over the past week, we’ve been taking a number of steps to better protect children and families, including suspending comments on tens of millions of videos,” a Google spokesperson said in a statement emailed to TechCrunch. “Now, we will begin suspending comments on most videos that feature minors, with the exception of a small number of channels that actively moderate their comments and take additional steps to protect children. We understand that comments are an important way creators build and connect with their audiences; we also know that this is the right thing to do to protect the YouTube community.”

The rollout of the new moderating tools will take several months, according to YouTube.

And while the company acknowledged the severity of the changes and the impact it may have on YouTubers, it said it was taking action to prevent the exploitation of minors on the platform.

A small number of known channels will be able to keep their comments sections up, but will be required to actively monitor them beyond simply using YouTube’s own moderation tools, the company said.

YouTube also is speeding up the launch of a new classification tool that can detect and remove twice as many individual comments as in the past — accelerating the automation of content moderation (which could, itself, have unintended consequences).

In a related move designed to protect children from abhorrent content, YouTube has terminated the channel FilthyFrankClips and several other channels that were reportedly instructing children on how to slash their wrists.

First reported in the Washington Post, the clips from the channel contained children’s videos spliced with content on self-harm, according to an initial report on the blog, Pedimom. 

YouTube Kids Scare

As we noted in our earlier reporting, this isn’t the first time that YouTube has been identified as a haven for pedophiles hiding in plain sight.

Back in November 2017, several major advertisers froze spending on YouTube’s platform after an investigation by the BBC and the Times discovered similarly obscene comments on videos of children.

Earlier the same month YouTube was also criticized over low-quality content targeting kids as viewers on its platform.

The company went on to announce a number of policy changes related to kid-focused video, including saying it would aggressively police comments on videos of kids and that videos found to have inappropriate comments about the kids in them would have comments turned off altogether.

Some of the videos of young girls that YouTube recommended we watch had already had comments disabled — which suggests its AI had previously identified a large number of inappropriate comments being shared (on account of its policy of switching off comments on clips containing kids when comments are deemed “inappropriate”) — yet the videos themselves were still being suggested for viewing in a test search that originated with the phrase “bikini haul.”

YouTube addressed its creators earlier today in a blog post telling them about the steps it was taking.

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Justin Caldbeck sues Binary Capital co-founder Jonathan Teo, claiming he ‘made no effort to save the firm’

Embattled venture capitalist Justin Caldbeck (pictured) is suing his former co-Binary Capital founder Jonathan Teo, alleging breach of contract, fraud and more.

Caldbeck, accused of sexual harassment and unwanted sexual advances in 2017, took an indefinite leave of absence from Binary Capital, leaving to Teo all the responsibilities of the $175 million fund. Shortly after, Teo offered to step down in a last-ditch effort to keep the firm afloat. Ultimately, Binary Capital shut down and New York venture capital firm Lerer Hippeau assumed responsibility for its $125 million debut investment vehicle, 70 percent of which has been deployed, per details shared in the lawsuit.

In the legal filing submitted to the Superior Court of The State of California, Caldbeck accuses Teo of mismanagement following his June 2017 departure. We’ve reached out to lawyers for both parties for comment.

“Mr. Teo completely abandoned the leadership responsibilities that were entrusted to him, neglecting to take the most basic steps required to run a venture capital firm,” the lawsuit states. “Mr. Teo was laughably bad at this job. As another Silicon Valley entrepreneur remarked publicly, ‘this guy has done everything possible wrong.’ ”

The filing cites 500 Startups and Sherpa Capital as examples of funds that were able to survive following similar scandals wherein a partner was accused of sexual harassment and misconduct. Caldbeck, in essence, is upset Teo wasn’t able to successfully run Binary Capital following his own alleged wrongdoings.

Binary Capital co-founders Jonathan Teo and Justin Caldbeck

Caldbeck, who’s taken to angel investing in the months following the high-profile scandal, was previously a managing director at Lightspeed Venture Partners before launching Binary Capital alongside Teo in 2014. Teo, for his part, was formerly a managing director at General Catalyst. Binary Capital, an early-stage fund, has backed companies including plus-sized clothing business Dia&Co and airfare search engine Skiplagged.

According to several reports, Teo had hoped to keep Binary Capital alive after The Information published a report highlighting six women’s allegations of being groped and propositioned during their professional relationship with Caldbeck.

Caldbeck, however, is less than satisfied with Teo’s handling of those allegations and the wave of “negative press articles” that followed. Caldbeck also claims he resigned from the firm only in exchange for a promise for future financial stability from Teo.

In the months following his departure, Caldbeck asserts Teo took personal vacations to Mongolia, Ibiza and the Burning Man festival. He “went AWOL,” “was completely unresponsive,” “seemed not to care,” and “made no effort to save the firm,” per the filing.

Teo, additionally, allegedly took on an operating role at Binary Capital portfolio company Trillex, where he increased corporate spending limits to purchase gifts for himself, including taking out a more than $2 million unauthorized loan to pay his personal taxes and to assist a family member with a real estate project.

According to a Forbes report on the lawsuit, Teo’s legal team says “The justice system will soon remind Mr. Caldbeck that he alone is responsible for his many misdeeds.” We will update this report when he hear back from Caldbeck and Teo’s legal teams.

Here’s the full lawsuit:

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Facebook says that Workplace now has 2M paying users

With Slack gearing up to go public and now seeing daily active users of 10 million with 85,000 organizations using it to help employees communicate with each other, Facebook today released some updated numbers of its own for Workplace, its enterprise-focused platform: the company says that there are now 2 million paid users on the service, not counting those who are using its free tier; and NGOs and educational organizations using Workplace for Good — if you add these in you get “millions” more, Facebook said, without providing a concrete number.

The company’s paid tier starts at $3 per month per user, with pricing arranged directly with organizations when numbers exceed 5,000 employees. It started to charge for its service in October 2017, after first launching in October 2016.

Being Facebook and already working at a huge scale with more than 2 billion monthly active users of its flagship service, the company has always pitched Workplace as a tool for very large enterprises, and today it said that it now has 150 companies with more than 10,000 users each on the platform.

These have included companies like Walmart (the world’s biggest employer) as well as Nestle, Vodafone, GSK, Telefonica, AstraZeneca and Delta Airlines.

Picking these metrics to talk about the company’s growth is a strategic move for Facebook. They are different enough from what Slack measures that it’s not immediately easy to draw a comparison and claim that Slack is much larger. At the same time, it highlights Workplace’s success in an area that Slack, Teams and others competing in this space are also chasing: enterprise users. These are the most lucrative customer segment, as they not only generate larger recurring revenues, but they are often slower to churn once they do sign on to your service.

Workplace has made an effort over the last several years to add more features to bring the platform in line both with what basic Facebook offers, as well as other enterprise communication services that Workplace competes with more directly. That includes integrating with a number of key apps, although it’s still far from the hundreds that can be fed into Slack.

The numbers do not give us a total number of users on Workplace but they set out also how Facebook is continuing to drive the product forward as a diverse and distinct revenue stream apart from its ad-based consumer service.

At the end of last year, Facebook appointed a new head of Workplace, Karandeep Anand, who came to Facebook three years ago from Microsoft (and thus has a close understanding of enterprise software). He works alongside Julien Codorniou to focus on the technical development of the product while Codorniou focuses on sales, client relations and business development.

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Xiaomi unveils MiWiFi mesh router with Wi-Fi, gigabit Ethernet, powerline networking

Xiaomi unveiled its MiWiFi mesh networking router, which was developed in collaboration with Qualcomm. The router is simple to use and there's an app for your smartphone to help configure it. The routers have four amplifiers - two each for the 2.4GHz and 5GHz networks. You can use either to connect the two routers, creating a basic mesh network with speeds up to 2,567Mbps. Additionally, the router supports power line networking in case there's no clear wireless path. Xiaomi MiWiFi mesh router with Wi-Fi, gigabit Ethernet and powerline networking Each router has three gigabit...

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Google is not great at retaining black, Latinx and Native American employees

Believe it or not, the retention of black and Latinx employees at Google was better last year than in 2017. Though, Google’s attrition rates of black and Latinx — which indicate the rate at which employees leave on an annual basis — are still higher than the national average.

For Native American employees, Google’s attrition rates significantly increased from the year prior. To be clear, that’s a bad thing. For what it’s worth, Google is also not great at retaining white employees.

Google publishes the data as a weighted index and treats the average attrition rate as 100. The closer each group is to 100, the close to parity Google is. If a group’s index is 90, that means the group’s attrition rate was 10 percent lower than the average.

“While there are positive trends, there is still work to be done,” Global Director of Diversity, Equity & Inclusion Melanie Parker wrote in a blog post. “Specifically, attrition for Native Americans worsened. And while rates improved for Black and Latinx Googlers, they are still not on par with the average. These are all areas we plan to focus on over the coming year.”

Google released its first attrition index last year to show how many employees left the company on annual basis. Based on last year’s data, it was clear Google had the hardest time retaining black and brown employees. In fact, black and brown people were leaving Google at rates faster than the national average.

At the time, then-Google VP of Diversity and Inclusion Danielle Brown told TechCrunch the attrition rates for black and Latinx people were “a clear low light.”

A highlight, however, was that women were leaving Google at lower rates than the average. And this year’s data for women is slightly better, with an attrition rate of 90 compared to 94 the year prior. But we’ll see how the latest wave of controversy (harassment, walkouts, etc) at Google affects its attrition rates for 2019.

Google ends forced arbitration for employees

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Applications are open for Startup Battlefield at TechCrunch Disrupt SF 2019

Founders. This is your shot. TechCrunch is officially in the hunt for the most disruptive startups for this year’s Startup Battlefield at TechCrunch Disrupt San Francisco 2019. Startups can apply here to compete on our world-famous stage for a $100,000 equity-free prize and the coveted Disrupt Cup. With more than 10,000 attendees, hundreds of press outlets and top investors from around the world, your company will launch to the most influential players in tech.

The application. Simple. Fill out your app here. There is no cost to apply or participate. TechCrunch does not take any fees or equity. Early-stage startups from any country and any vertical are eligible. TechCrunch’s editors will review the applications and select the most promising startups to pitch the world’s top VCs on the main stage at Disrupt SF (October 2-4) — set to be the biggest event in TechCrunch’s history.

The training. The Startup Battlefield team will work intensively over many weeks with the Startup Battlefield contestants to hone pitches, sharpen business models and perfect demos.

The conference. At TechCrunch Disrupt SF, Startup Battlefield contestants are welcome at VIP events, backstage and more. The Battlefield startups receive complimentary exhibition space on the show floor for all three days, as well as access to CrunchMatch, TechCrunch’s investor-founder matching system. Battlefield startups also receive complimentary tickets to all future TechCrunch events, access to alumni events and free subscriptions to Extra Crunch.

The competition. The Startup Battlefield contestants, approximately 20 in number, pitch for six minutes each, including a live demo, followed by a six-minute Q&A with our elite judges — investors like Roelof Botha, Jeff Clavier, Cyan Banister, Kirsten Green and Aileen Lee. After the initial round, 4-6 companies will be selected to pitch again on the final day of the conference in front of a new panel of judges. They will choose the winner, who will receive the Disrupt Cup, a check for $100,000 and a post in TechCrunch, as well as the attention of media and investors around the world. All Startup Battlefield sessions are streamed live on TechCrunch to a global audience in the millions.

The Startup Battlefield Alumni Community. Join the ranks of alumni like Vurb, Dropbox, Get Around, Cloudflare, Mint.com and more. Don’t just take our word for it! Our Startup Battlefield Alumni metrics speak for themselves — 857 contestants have raised about $8.8 billion and produced 108 successful exits (IPOs or acquisitions). 

So what are you waiting for? Apply now.

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