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Today we are excited to announce that Lightspeed is leading Clever’s $30M Series B. When we first met the founders Tyler Bosmeny, Dan Carroll, and Rafael Garcia, we were blown away by both their vision for transforming education and the amazing adoption they have already achieved in K-12 schools. Clever is building a universal API layer for the education market that enables schools to quickly sign up for and deploy educational mobile and web apps from a single dashboard. The company launched only two and half years ago, and 30,000 schools have already signed up, including eight of the top ten school districts in the country. This means that one out of every five schools in the US is using Clever and one out of every five K-12 students has a Clever account. Given the typical challenges startups see selling to schools, this adoption is a testament to how strong the Clever team is and how valuable their service is.

By integrating with Clever, app developers are automatically integrated with school information systems, of which there are 100+ flavors. They also become part of Clever’s single sign-on ecosystem, so they don’t need to manage student usernames and passwords separately for each school district. Clever has made their service free for schools and can be installed in a few hours.

After the initial deployment, the next time a 3rd grade teacher wants to enable a new reading or math app for her students, he or she simply spins up new app accounts through Clever and doesn’t need to create or manage new usernames, passwords or student accounts. Clever stops teachers from having to play the role of “IT administrator” in the classroom and lets them focus on what they do best … teaching. This saves valuable classroom time and avoids a lot of confusion while ensuring that students have access to all the latest and greatest educational apps.

Over the next few years, we are excited to see Clever become adopted by all K-12 schools and see the company create the opportunity to help all students. We’re looking forward to our partnership with the Clever team to help them get there!

 

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When Avi Networks founders Umesh Mahajan, Murali Basavaiah, and Ranga Rajagopalan first came to Lightspeed in 2012 with their vision of bringing the benefits of a hyperscale approach to application delivery and layer 4-7 services, it made perfect sense to us.  We had seen Lightspeed portfolio company Nicira disrupt networking layers 2-3 with an architecture that consisted of highly distributed scale out software elements coupled with centralized control, culminating in an acquisition by VMWare for $1.25B in the summer of 2012.  We were seeing further evidence of “hyperscale envy” by Fortune 1000 enterprises from our early investment in Nutanix, a company that brings “Google-like” converged compute and storage functionality to businesses of all sizes.  In fact, the Avi vision made so much sense that Lightspeed venture partner Guru Chahal, who had worked closely with the founders to define the product, immediately joined the company as VP Product.

To understand why the Avi product makes so much sense, you first need to understand the problem. That is, datacenter infrastructures were designed for a three-tier architecture world, yet we now live in a mobile-to-cloud world.  Virtual Machines (and soon containers) are everywhere – and they are frequently in motion between data centers and clouds. New applications are being created and deployed at an explosive rate and an army of mobile users are demanding the same application performance as desktop users.  Monolithic approaches to application delivery simply don’t work anymore.  The hyperscale giants, companies like Amazon, Facebook, and Google saw this problem first.  They’ve since mothballed fleets of proprietary systems and developed their own analytics-driven highly distributed scale out software to enable an agile, adaptive, and reliable infrastructure to meet the needs of their most demanding application users.

For the first time, Avi brings the benefits of hyperscale application delivery to enterprises of all sizes, for on-premise or cloud-based applications – all at a fraction of the price of monolithic solutions.

At the heart of the Avi solution is a revolutionary approach called Hyperscale Distributed Resources Architecture, or HYDRA. Like Nicira did for layer 2-3, Avi separates the data plane, in this case highly distributed layer 4-7 microservices, from the central control plane, to enable the agility, adaptivity, and scalable performance demanded by today’s modern enterprise.  In addition, Avi employs inline analytics to not only provide insights into application behavior, but also to power a closed-loop application delivery infrastructure that essentially tunes itself.

Avi Networks officially came out of stealth today, armed with several Fortune 1000 customers in pilots and production.

As we look towards the future, companies like Avi, Nicira, and Nutanix will make “Hyperscale envy” a thing of the past…

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Once every few years, the combination of a couple of macro trends allows for a new software category to emerge. At Lightspeed, we believe such a confluence of macro factors is coming together to create the next big software category: Customer Success Management. And today, I am thrilled to announce Lightspeed’s investment in the leading startup in the customer success management space, Gainsight.

Our investment thesis for Gainsight is pretty simple: As customers increasingly interact with products / businesses online, a wealth of data on the frequency and depth of product usage, customer-vendor interaction (webinars, support tickets, NPS surveys etc.) and background of the customer engagement (size of company, contract, is the primary buyer still at the company?) can be analyzed to identify which customer engagements are going well, and which ones are not. In recurring revenue businesses, these signals manifest themselves in the form of customers that are at risk of churning out, or opportunities ripe for upsell. In other businesses, these signals manifest themselves in terms of whether the customer came back to buy more product/services or not. Additionally, at a time when even a little bit of customer dissatisfaction can travel far and wide through social media and other online forums, companies just cannot afford to drop the ball once they’ve made the initial sale to the customer. In this new world, customer success and account management has gone from being a cost center to a revenue imperative.

As these twin trends of (a) more data to analyze customer engagement and (b) increasing need to keep the customer happy throughout the engagement come together, Gainsight is firmly positioned to be the defining company in the customer success category. Gainsight not only provides its customers the ability to analyze internal/external data to measure customer happiness, it also provides the workflow and collaboration tools to the customer success, customer support and sales teams to act upon the insights being generated by their platform.

When most people think of customer success, or what Gainsight does specifically, they associate it with renewals management in recurring revenue businesses. While that is definitely where Gainsight started, that is only the tip of the iceberg. Gainsight’s vision of customer success is much broader than just enabling annual renewals, and we’re already beginning to see an expansion beyond SaaS/tech companies in Gainsight’s customer base. Gainsight’s vision is to place customer success at the heart of every conversation a vendor has with their customer. In my mind, this is a very important part of our investment thesis here. Every company that intends to have a repeatable engagement with its customers needs customer success. We live in a world where regardless of business model, companies can measure customer satisfaction through social media, NPS surveys, support tickets, online usage of the product, whether the customer is attending your webinars and conferences or not, etc. We also live in a world where one bad customer experience gets amplified through social media and can damage a brand at a global scale within minutes. While social media and customer support solutions provide the tools to react to such scenarios, Gainsight offers the toolkit to be proactive about customer happiness, not just when someone is complaining online or when it’s time to renew a contract. In this day and age, any company that does not have a dedicated customer success team is sending out a clear message to its customers as well as prospects that it doesn’t care about them.

I’ve had the pleasure of getting to know Nick and his team well since early 2013, and have been blown away by their expansive vision for customer success. In the last two years, Gainsight has gone from being an early stage startup that focused on account management to starting a movement around customer success. Nick has put together a great management team around him, and Gainsight is leading this movement from the front. We’re thrilled to be backing Gainsight in this journey, and are looking forward to helping them build the next big software company.

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Today we are excited to announce that we are co-leading the first venture round in Blockchain, the leading Bitcoin wallet; a $30M Series A.

We have been studying and investing in the Bitcoin space for a couple of years …

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I recently wrote about this idea of the “Product Person” and how important it is for startups to have visionary artist DNA in its founding team. They are truly rare and it’s a big reason why so few startups succeed.…

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Who is the Product person? When we talk about early stage venture capital at Lightspeed, this is the single most important question we can ask when making an investment.

Why?

Because the product person is the artist with the vision …

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Our freshly minted investment in Comprehend (www.comprehend.com) was announced today. We are thrilled to back co-founders Rick Morrison and Jud Gardner and their team as they continue their mission to use next generation data analytics to help life …

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We are excited to announce our new Series A investment in EverString (www.everstring.com)!  CEO and co-founder Vincent Yang, a mathematician by training, had built a system while he was at Summit Partners, a private equity firm, to comb …

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Business Intelligence (BI) is the gift that keeps on giving. For years, startups have popped up, promising better insights and faster decision making capabilities, consistently resulting in new waves of highly valued companies. Take a look at the past decade, …

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Congratulations to Tony Fadell, Matt Rogers and the world class team at Nest!  Today Nest announced that it has agreed to be acquired by Google.   As investors in the company since the early days, we here at Lightspeed have been …

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