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RRE Blog

Our Investment in CAMP

Alice Lloyd George

It’s been hard to read the news over the past year without seeing another headline proclaiming the death of a big box retailer. From household names like Sears to JCPenney to Radioshack to Macy’s, an estimated 3800 U.S. stores are expected to close in 2018.

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This situation has been building for some time. Part of the answer is the internet, smartphone penetration, and that e-commerce behemoth in the Northwest. But partly it’s because retailers have not been listening. Stores used to serve customer needs - baby boomers wanted convenient access to mass-produced, global, status products. The new generations want something different. They want authenticity, community connection, and experiences.

This shift could not be more true of toys - a category rich in consumer emotion, engagement and spend. Overall toy industry sales grew by 7% year over year in the first half of 2018 to $7.9 billion. Yet despite this strong demand, brick and mortar has been flailing. With companies like Mattel laying off workers and Toys ‘R’ Us filing for bankruptcy, the supply void is more apparent than ever.

Enter CAMP, a modern retail chain built to engage and inspire young families. At RRE, we believe the CAMP team has hit on how to deliver a magical experience that responds to customer preferences while also abandoning the cost structures of legacy retail. Their fresh approach reimagines store design, combining merchandise with play and media and offering themed, curated, and immersive experiences. They also fundamentally rethink the retail model, with a more modular, agile approach that reduces dependence on third party IP and spans multiple lines of business from sponsorship to licensing, ticketing, and e-commerce.  

The team of big-kid creators, designers, architects and operators behind CAMP is uniquely positioned to build a bold new retail chain. We have known founder Ben Kaufman for over a decade, from his days as a visionary leading Quirky to his recent years as Chief Commerce Officer at our portfolio company Buzzfeed, where he has driven meaningful revenue (Buzzfeed will also be backing CAMP and serving in a partnership capacity.) One of the great things about being a VC is getting to work with brilliant product people who have a strong point of view on how the world works. Ben is exactly that. He understands each side of the puzzle - from his deep empathy for the customer to his product instincts to his ability to nurture partnerships. He is also good at building community, and this investment serves as another example of our thesis around building joyful, community-centered brands - something our portfolio company BarkBox has successfully demonstrated with dogs.

These team attributes combined with recent market trends make for the right people and the right timing to build a new brand in retail. Today we are excited to announce our investment in CAMP. And we are thrilled to work with Ben again and help him build his new venture alongside co-investors Lerer Ventures and individual angels like Rachel Schechtman, founder of Story. CAMP’s flagship store will be launching here in the heart of New York City on December 15th - next time you’re in NYC, please come by and see it for yourself at 110 5th Avenue 😀

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Introducing RRE’s new Platform Manager: Laurel Woerner

Maria Palma

Since our founding in 1994, RRE has supported countless entrepreneurs in building world-class companies. Because we’re passionate about partnering with these exceptional teams throughout their journeys, we decided three years ago to expand and formalize our platform efforts to better support our portfolio companies throughout their growth.

RRE’s platform mission is to help our companies as they grow and to expand RRE’s presence in the tech ecosystem.  While we will always go the extra mile to help our founders and their teams with any needs that come up, there are a few areas where we provide more structured support across the entire portfolio. At our firm, that means business development, talent, and community learning—areas where RRE can add unique value. As part of our platform efforts, we also look for new ways to continue to engage deeply with the NYC tech ecosystem, where many of our companies are based.  We look forward to adding new avenues of leverage to strengthen our platform efforts over time.

To that end, we are thrilled to announce the expansion of our platform team. Please meet RRE’s new Platform Manager, Laurel Woerner. Laurel has real passion for supporting startups and the NYC tech community, driving it to be a bigger, better, and more inclusive space. Laurel comes to RRE from x.ai, an AI scheduling software startup, where she worked to define and publicize their vision of scheduling nirvana. She executed the marketing relaunch of the company, and also created a thriving customer community of x.ai fans called Time Lords. Before that, she was part of the early Work-Bench team, where she helped build out their ecosystem of enterprise technology startups/buyers through community initiatives like content and events. By night, she’s into design, art, reading, boba, and dog parks. She’s excited to join RRE to help their portfolio companies navigate growth, and we’re glad to have her.  

Laurel will be supporting Maria Palma, Vice President of Business Development, who heads our platform team. We could not be more excited to have her join forces with RRE to support our companies and the broader ecosystem. Please join us in welcoming her to the team!



Our Investment in Ursa Space Systems

Will Porteous

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RRE is excited to announce our lead investment in Ursa Space Systems Inc. (“Ursa”), a company that is using Synthetic Aperture Radar (SAR) satellites to produce alternative data sets for major industrial and energy operators, financial services, and governments.

We’ve known Adam Maher, the Founder and CEO of Ursa, for several years and made a seed investment in the company last Fall. The team is exceptionally talented technically and commercially, with decades of experience in the satellite industry and the intelligence community.

The Earth Observation (EO) market represents a $43B opportunity over the next decade with SAR-based revenues one of the fastest growing components. Cumulative global revenues from SAR imagery alone is estimated to be $6.2B by 2025. That being said, there is a lack of data infrastructure to interpret the new radar data stream, leading to the current oversupply of existing SAR capacity. And while much of the new space industry’s focus has been on commercializing optical satellites, with startups like Orbital Insights and Descartes Lab providing analytics, there is huge potential in the SAR market given these satellites can see through darkness, clouds, and other obstructions.

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With Ursa, the difficulty in obtaining and analyzing radar data is abstracted away for customers. Ursa has secured relationships with all SAR satellite operators, built the digital infrastructure needed to properly ingest radar data, and created highly-tuned, expert processing to automate reliable, consistent measurements. The firm is further able to derive useful insights for its customers by layering on contextual data and machine learning / computer vision analyses.

Ursa’s flagship commercial product, Global Oil Storage Monitoring, is a weekly report measuring crude oil storage of over 340 oil terminals worldwide with 3.6B barrels of capacity. Customers in finance and energy rely on these comprehensive and timely analytics to gain decision advantages, changing the way they conduct business. In response to this first product’s success, Ursa is extending its focus across the oil supply chain and expanding the company’s custom monitoring to other global commodities. Ursa can extract considerable value from the raw image data given the significant overlap in commodity locations, areas of interest, and customer interests.

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“Ursa is making great progress across multiple aspects of their business,” said Will Porteous, General Partner at RRE Ventures and new Ursa board member. “They’re seeing early success with enterprise customers like S&P Global Platts, and users are already requesting new applications of the product for their business. There are many potential high-value applications for the technology. In addition, they have attracted some really impressive talent. We see a really strong team with a great value proposition and a huge opportunity in front of them that we are proud to help them achieve.”

Our Investment in Parallel Domain

Jason Black

I first learned about synthetic data generation from an article that described how researchers had used 3D renderings of eyeballs under a multitude of lighting conditions, in different orientations, of various colors, etc. to determine the direction of gaze for real world video analysis. As it turns out, it’s very difficult to determine, simply from security footage or for eye tracking applications precisely where a given person is looking — and there’s no good way to collect that data. You can estimate it by hand-labelling a human’s best guess at where the eyes are gazing frame-by-frame, but the level of inaccuracy is too high to produce useful data. As they say, “garbage in, garbage out.”

 

 Synthetic data generated by 3D renderings of eyes.  Source .

Synthetic data generated by 3D renderings of eyes. Source.

Well, synthetic data is some of the most pristine data you can get your hands on because you get a pixel-perfect labeled data set right from the outset (because you generated it!). No outsourcing frame-by-frame images to literally thousands of error prone and probably incredibly bored humans. And luckily, because synthetic data is generated by a computer, once you have a system to procedurally generate that data, it’s a massively scalable data source.

A massively scalable data source is going to be critical for training and testing autonomous vehicle (AV) software. While it is indeed possible to drive millions of miles to gather data about the public roads (as Waymo, Uber, and others have spent untold millions of dollars to do), relying purely on real-world data is not a scalable approach.

Why? Roads, traffic conditions, weather, pedestrians, obstructions, and a whole host of other dynamic elements are in constant flux and present a gargantuan number of variations that make it incredibly difficult for AV software to safely navigate. And every time AV software companies want to push out a point update (e.g. Version 1.1 of your autonomous vehicle software), they will need to scalably test their new algorithms to ensure that their updates work safely across the trillions of possible scenarios a car can encounter on the open road. Just as much as your iOS or Android point updates sometimes inadvertently crash your entire phone based on an unforeseen bug, autonomous vehicles can and, unfortunately, will inevitably introduce bugs into their navigation stack while updating systems.

 

 Realist rendering and the underlying pixel-perfect labeled synthetic dataset

Realist rendering and the underlying pixel-perfect labeled synthetic dataset

Realist rendering and the underlying pixel-perfect labeled synthetic dataset.

Parallel Domain is building software that can procedurally generate worlds that, due to their synthetic nature, are both scalable and come with pixel-perfect labels (see the labeled stripe on the image to the left). In doing so, Parallel Domain enables AV companies not only to drive billions of simulated miles before they push their software to the real world, but also generate more training environments where the AV software struggles. Say, for example, an update decreases safety when making a left turn in heavy traffic or if the sensors on the car get confused in fog, rain, or snow, then Parallel Domain’s software can generate millions of small variations of those exact scenarios to help the company improve performance without risking public safety.

 

Real-world map data can be used to generate virtual worlds that mirror the public roads.

The RRE team and I are incredibly excited to be supporting Kevin McNamara and his world-class procedural graphics team as they build the digital infrastructure not just important, but vital to the safety of our autonomous transportation future.

Our Investment in Bend Financial

Jason Black

We are excited to announce our investment in Bend Financial, a modern Health Savings Account (HSA) platform that will revolutionize how individuals manage their healthcare expenses. When we came across this outstanding team, in a market that is ripe for disruption, we knew we had to be a part of what the company was building.

The experienced team at Bend is hyper focused on not only changing how consumers interact with healthcare spending, but also on simplifying the employers experience of offering an HSA. The team is led by serial entrepreneur, Tom Torre, who impressed us with his expertise in building businesses in both financial services and healthcare. Tom co-founded the company with strong leaders in different disciplines including technology veteran Gary Rush, corporate finance leader Gregg Santabarbara, and consumer healthcare experience expert Kerry Leonard.

HSA accounts have become an essential part of the healthcare system with the proliferation of High Deductible Health Plans, yet consumer experience has not changed and managing expenses has only gotten more complex. Enrollment has grown rapidly over the last few years and total enrollment is expected to reach 30M by 2020. Additionally, consumers are taking control of their overall healthcare experience and managing healthcare spending. The founders understood that the financial burden of healthcare is shifting to the individuals and that tools are needed to help people navigate the complexities of healthcare costs. We are confident that Bend will become a key part of this solution.

We are thrilled to be working alongside such great team and look forward to building a market-leading HSA solution that is easy for everyone to use.

Our Investment in Ladder

Maria Palma

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RRE is excited to announce our lead investment in the Series B of Ladder, the company that introduced instant, simple, and smart life insurance exactly one year ago today.

While there has been innovation in the insurance industry over the past couple of years, many of the new companies created focused on the distribution of traditional products. We believe that innovation in distribution alone is not enough to build an industry leading company in this space. Innovation in technology, data, product, and consumer experience are critical to creating a leading next generation insurance company.

There is an opportunity to build such an offering in the life insurance space. Life insurance alone accounts for annual premiums of $138B in the US. Even though the industry is massive, there are many Americans today who are not adequately covered by life insurance, which accounts for an estimated $16T coverage gap today.

We feel that Ladder’s approach to technology, data, product, and customer experience, along their incredible team, set them up to be the leader in this space.  Ladder has built a full stack solution with proprietary technology across the life insurance value chain which includes customer acquisition, application, underwriting, policy admin, and claims management.

“Ladder’s full stack approach sets them up to deliver breakthrough innovation in this space,” said Stuart Ellman, Co-founder & General Partner of RRE Ventures. “We’re excited to work alongside this great team as they build the next generation life insurance offering.”

The Data Advantage

Ladder is one of the few companies we have seen in the life insurance industry that has built the full tech stack needed from the ground up to leverage data across every stage of the life insurance process.

There is an adage that life insurance is sold and not bought. In the traditional insurance ecosystem, insurance is sold and delivered by multiple parties from agents, brokers, and wholesalers to carriers and reinsurers. While incumbents in this space should have a data advantage, they often face challenges when trying to liberate their data across multiple disparate systems and entities. Yet this is an industry where data drives economics.  The better data you have, the better you can be at acquiring customers, assessing risk, underwriting, managing claims, and retaining customer over time.

Ladder built data into the foundation of everything they do, and this is a core advantage to their business.  They can use this data to create an innovative product, an ideal consumer experience, and a sustainable business model. As the industry continues to evolve, data will play an even larger role in the economics of all insurance companies.

Product Innovation

Ladder designed the term life product solely with the end consumer in mind and did not have to take into consideration agents or brokers due to their direct-to-consumer distribution model.

One of the first product innovations was the launch of dynamic life insurance, which allows people to  “Ladder Up” or “Ladder Down” coverage. The team understood that as people's lives change, their life insurance should seamlessly change with them. For example, if someone has a second child they can Ladder up their coverage, or if someone’s child graduates from college, they can save money by Laddering down their coverage. Dynamic coverage allows life insurance to become a part of a consumer’s overall financial picture, which can adapt as their financial situation changes.

Enabling product innovation in this space does not come without its technological and regulatory challenges. Ladder’s proprietary technology and full stack enable them to innovate at the product level. Equally important, they have key partnerships in the industry, from reinsurers to financial institutions, to integrate their technology and bring these products to markets. All of these foundational decisions have set them up to continue to innovate on their product and consumer experience into the future.

Consumer Experience

You can tell from Ladder’s tagline “Data is the heart, people are the soul” that they fundamentally care about the consumer experience. They bring this tagline to life by consistently striving to provide the best consumer experience from purchase to claim. They know how important this product can be to somebody’s life, as it was for CEO Jamie Hale when he was a life insurance beneficiary. By making it easy to buy life insurance, they are ensuring that more consumers have the benefits of this product.

Many prospective life insurance consumers drop out of the purchase funnel because the existing process is so cumbersome. The traditional experience takes 8 weeks, a process which Ladder has brought down to minutes.  Their system uses data analysis to help eliminate complexities within the traditional application process, enhancing the consumer experience. In their first year of launch, they are live across 44 states and writing hundreds of millions of dollars in coverage.  It is also not surprising that a majority of their customers bought life insurance policies on a mobile device outside of work hours, so perhaps it is possible after all for insurance to be bought and not sold.

Ladder’s fully-digital product eliminates manual processes and commissioned sales agents as well, and these savings are passed on to the consumer. In our first interaction with Ladder and throughout our diligence process, it was clear that they aim to delight their consumers with everything they build.

 

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Management Team

The final thing that sets this company apart is the outstanding management team. As early stage investors, we know that the success of a company comes down to its people. In this industry specifically, getting the right balance between technology and industry expertise is critical. We believe the Ladder team has these traits in their DNA and will define what the future of life insurance should be.

The team has experience building financial services companies and a deep understanding of their industry. They recognize that the incumbents are strong companies that will continue to adapt, so they need to be able to move faster and constantly improve their offering. Ladder continuously pushes the status quo to improve but also respects the complexity of the industry in which they operate.

Looking Forward

Ladder announced today that they have opened up their API access. This means that Ladder can now seamlessly integrate with investment platforms, lending companies, benefits managers, health and wellness innovators and more. We are proud to be backing this team with great co-investors such as Canaan Partners, Lightspeed Venture Partners, Nyca Partners, and Thomvest Ventures. We could not be more excited to work alongside Jamie, Jeff, Laura, Jack and the entire Ladder team to bring their vision for next generation insurance to life.