Gradient Ventures, Google’s AI fund leads $7mm investment in English learning app, Elsa (link)
- Gradient Ventures is Google’s dedicated AI fund, undisclosed fund size but run directly off of Google’s balance sheet and flexibility to follow-on when it makes sense. Unique from CapG or GV as they operate as independent funds
- Anna Patterson runs the group as Google’s VP of engineering and Managing Partner of Gradient Ventures
- Elsa raised money from Monk’s Hill Ventures and SOSV totaling $12mm to date in fundraising
- Goal is to help non-English speakers improve accent / general speaking ability by using voice recognition and AI to grade a user’s speaking vs standard American English benchmarks
- Freemium model that grants users full access to 1k courses for ~$3-$6 / month. Range from one month to twelve months of access. Also potential subscription model once contracts with schools are set up
- Current market is in Vietnam, next three countries: Japan, Indonesia, India
- Also thinking about expansion into other languages, i.e. Spanish
- Another upside to partnering with Gradient is the talent pool – Google employees can spend 3-6 months working at portfolio startups on secondment
- tl;dr – tech barrier to entry (tech moat) of building voice recognition tech to recognize languages accurately exists, now to collect voice data to train the model
D2C Continues to Grow, with ThirdLove raising $55mm in funding (link)
- ThirdLove’s valuation now ~$750mm, and have only raised $68mm (including $55mm from Catterton and Allen & Co.) since founding in 2013. Revenues are ~$100mm
- Investors include everyone from NEA and a16z to L.Catterton and Tim Armstrong
- Pros: Amazing margins, own entire customer relationship and thus full stack of data owned, low competition category serving largest customer base of commercial people (women)
- Cons: Pretty low barriers to entry
- 60 second fit-finder questionnaire used to formulate best bra size for woman’s body. Uses the data to (1) design better-shaped bras (2) guide women with various body types towards the most efficient bra shape/size
Nat's Corner 