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The DL - An inside view into Pacific Northwest Tech

Hey! Welcome to The DL! This is a weekly newsletter about tech, startups, entrepreneurship, and inves
July 8 · Issue #3 · View online
The DL
Hey! Welcome to The DL! This is a weekly newsletter about tech, startups, entrepreneurship, and investing in the Pacific Northwest.
If you have thoughts, questions, comments, hit reply - I’d love to hear from you! 👋

June 2019 Venture Deals
Here’s a roundup of PNW startups that announced new fundraising rounds in the month of June.
Series B and later 🚀
  • RealWear - AR headset for industrial use cases - $80M Series B led by Teradyne
  • Highspot - Sales enablement tool for content management and sales guidance - $60M Series D led by ICONIQ
  • Procurify - Cloud-based procurement software - $20M Series B led by Information Venture Partners
  • Against Gravity - Social-gaming platform on PS4, Steam, and Oculus - $15M Series B led by Index Ventures
Series A 🛫
  • Bumped - Customer loyalty using stocks and ETFs - $19.5M Series A led by Canaan Partners
  • Omnidian - Solar system protection plans - $15M Series A led by IA Capital Group
  • Xealth - Marketplace for digital health apps - $14M Series A
  • Traction Guest - Visitor management system - $13M Series A led by Bessemer Venture Partners
  • Possible Finance - Affordable short-term installment loans - $10.5M Series A led by Canvas Ventures
  • Sound Commerce - Operations data platform for D2C brands - $6.5M Seed led by Defy Partners
Seed 🌱
  • Armoire - Women’s clothing rental service - $3.9M Seed
  • Damon - Advanced warning systems for motorcycles - $2.5M Seed led by Round 13 Capital
  • Perfect Company - Smart scale and recipe company - $1.95M Series A
  • Vooks - Read-along animated storybooks - $1.8M Seed
  • Adaptilab - Automated technical interviews for ML and data science hiring - $1.8M Seed
  • Brave Care - Kid-only urgent care facilities - $1.4M Seed
  • Glamhive - Online personal styling services - $1.2M Seed

A few observations from me on this list:
  • There are two AR/VR companies in the Series B and later group. The AR/VR market has been struggling for the last few years, but now we are finally starting to see some companies finding product market fit and breaking out
  • Congrats to Highspot (Madrona company) on their fundraise! Geekwire had a nice write-up. One of my favorite parts was “[the] process took less than two weeks. ‘We could have started by Monday at 9 a.m. and been done by Monday at 5 p.m.’” Not a bad way to raise $60M!
  • All of the Series A companies have a 'data angle,’ either managing, collecting, storing, or analyzing some sort of proprietary data
  • Sorry for this giant wall of text. Please let me know if this list is boring

Zillow, how much is this photo worth?
Before/After photos of a “Virtual Renovation”
Before/After photos of a “Virtual Renovation”
It’s hard to live in Seattle without seeing an article on home prices or artificial intelligence every day, but this article about Zillow is actually a cool demonstration of how much AI is changing the game in industries like real estate.
Zestimates and Redfin estimates have already been getting very good over the last several years. According to both companies, their median national error rate on estimates is less than 2%, and both companies are putting their money where their mouth is by offering “instant buying” programs to home sellers.
However, models based on location, square footage, and number of bedrooms are missing a lot of the data that human buyers and agents take into account when appraising a house. For example, after seeing a few photos of a house, buyers can quickly assess things like curb appeal, views, and the quality of finishes in a house.
According to Zillow, though, the new Zestimate uses deep learning models to analyze photos, so things like granite countertops and remodeled bathrooms can be factored into a home’s estimated value. Now that these models have more of the data available to them that people have when appraising a home, it will be interesting to see how much better their estimates become.
It will also be interesting to watch how the real estate sites handle “virtual staging” companies that can quickly clean up, furnish, and even remodel a home using special effects and give customers beautiful photos to send to the machines. 🤖

Other stuff I've been talking about
  • 🤔 If you have no idea what any of this means, neither did I. Learn about some internet memes and inside jokes on this great ReplyAll podcast and feel connected to Gen Z!
  • 📦 Apparently Amazon ships nearly half of its own packages (48%) now, up from ~20% in January 2018. Also surprisingly, FedEx has only ever shipped 1-2% of Amazon’s packages.
  • 🙈 Deepfakes are back (NSFW), with an app called DeepNude. The app took a clothed photo of someone and used AI to make them appear naked. The app’s creator quickly pulled it after receiving a lot of criticism, but clearly this is now commodity tech that many people can build. We will see how the internet as a whole continues to police this kind of stuff - doesn’t seem like social pressure will work forever.

Please Hit Reply! (Or Subscribe or Forward!)
About me: I work as an investor at Madrona Venture Group, a Seattle-based venture capital firm that has been early partners with companies like Amazon, Smartsheet, Apptio, and Redfin.
I’m writing this to share what I’m seeing as a Seattle-based VC and to connect with other people who are interested in what’s going on in PNW tech. If you have friends who might like this newsletter, please share it with them as well.
If you have any thoughts, questions, or comments, hit reply 👋 - I’d love to hear from you, and that’s why I’m writing this newsletter!
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