Homebrew Blog

With all of the innovation happening in financial services (see Homebrew portfolio companies like Chime, Even, Gusto, Plaid and TrueAccord as examples) it’s no surprise that regulatory compliance is becoming a front and center issue. But dealing with these issues isn’t for the faint of heart and requires the experience and knowledge to handle them correctly. That’s where Hummingbird comes in. Hummingbird brings simplicity, flexibility and intelligence to the anti-money laundering (AML) efforts of financial institutions of all types. We’re delighted to announce we’ve led a $3 million seed financing for the company, in partnership with Omidyar Network, TTV and Designer Fund.

WHO: Joe Robinson, Matt Van Buskirk and Jo Ann Barefoot, co-founders of Hummingbird, bring a unique mix of regulatory and technology expertise to the company. Joe solved risk and compliance challenges in product roles at Circle and Square. Matt and Jo Ann are former regulators and recognized compliance experts. Collectively, the team has lived the problem, worked to solve it and knows how to leverage technology to address it in a scalable and repeatable way.  

WHAT: Hummingbird uses machine learning and seamless workflows to provide superpowers to financial crime fighters. Financial institutions struggle to keep up with increasing complexity in AML, and investigators are swamped with cumbersome workflows, strict timelines, and scattered data. Hummingbird’s software-as-a-service and data-driven algorithms assist AML experts with complex investigations and help these institutions stay on top of new money laundering methods.

HOW: Hummingbird’s software combines easy deployment that requires no integration with an intelligent platform that generates insights about investigation subjects and provides capabilities like interactive pattern visualization, automatic location intelligence, time-sequence narratives of customer behaviors, and relationship mapping between investigation subjects. Built-in collaboration tools help share case files securely both inside and outside the financial institution. Ultimately, Hummingbird delivers easier, smarter and more collaborative AML compliance at at time when the financial services industry needs it most.

WHY: Adding intelligence to the compliance process and making it easier for investigators and law enforcement to follow the money is at the heart of Hummingbird’s vision – one that can have a real impact in curbing financing of terrorism, human trafficking, and making the financial system safe for all of us. $2 trillion is laundered every year and less than 1% is caught. Profits from political corruption, bribery, organized crime, human trafficking, and illegal trading all end up being laundered through the financial system. Crimes that rely on money laundering are on the rise. Hummingbird’s mission is to safeguard everyday citizens from the impact of money laundering, as we couldn’t be more excited to support the team’s efforts.

All companies have unexpected things happen to them that dramatically impact their businesses. And often times the dashboards and reports that are reviewed each day and week don’t have any answers for what happened or why. Outlier is designed to collect and monitor enterprise data in real-time, and notify people of important moments of unexpected or dramatic change. It’s this opportunity to automate business analysis and turn traditional business intelligence on its head that got Ridge Ventures excited enough to lead a $6.2 million Series A for Outlier.

Earlier this morning Expedia announced the acquisition of Pillow, a startup we’ve had good fortune to work with since leading its seed round in 2014. Sean Conway, Pillow’s CEO and cofounder, shared the news in his own blog post, but we thought it was appropriate to add two things.

First, the outcome. While every startup builds to be a profitable, independent company, the reality is that the best path for many of them will be an acquisition. Credit to Sean and team for building a company that was sought after by the industry and a set of relationships within the hospitality/travel community that turned into an offer to join forces. Sean will be helping to lead a very important initiative within the Expedia family of companies and in the process he also made money for his investors, which we thank him for.

Second, the journey. When we first backed Pillow it was operating in a slightly adjacent space, helping average people rent out their apartments or homes on Airbnb with a combination of software tools and on-the-ground operations (cleaning, maintenance, etc). This business was growing quite nicely but about 24 months in, Sean saw that there was a bigger strategic opportunity to help bring new supply to the short-term rental market. Namely, to work with large multi-unit apartment owners and create a product that let their tenants rent their apartments out for short-term stays, while also giving property managers the necessary visibility into rental activity within their buildings. The aligned incentives clicked right away and Pillow was able to sign up a large number of partners, bring differentiated rental inventory to the platforms in exchange for a cut of the revenue.

Without this insight and the willingness to take one step backwards to take two steps forward during the transition, I don’t believe Pillow would have been as valuable in this acquisition. It’s a nice example of a team and their VCs collaboratively supporting a change in strategy and I give a lot of credit to Sean, his exec team and our fellow Board member, Tim Chang of Mayfield, for seeing it through.

Homebrew was founded in 2013 to resurrect the original model of small-batch venture capital investing in early stage companies: we make a handful of investments each year and concentrate our capital, sweat and reputation behind those founders. We’re two partners (Satya and Hunter), a Head of Talent and an Operations Manager, based in SF’s South Park neighborhood. Our interests are varied, as you can tell from our portfolio - spanning consumer and enterprise, hardware and software, transforming legacy industries and building new ones. But our approach is focused, as Satya outlines about our “how” and Hunter writes about our “why”.

As we approach our six year anniversary, we want to add another team member with the two points below in mind.

Our goal is to be very inclusive in this search, truly welcoming people from different backgrounds and perspectives into the process. We do have a notion of the experience set we want this team member to bring to the firm, and understand that this itself is narrowing, but we’re open to hearing from folks who don’t “pattern match” for VC.

We don’t have a job title for this role because we believe, especially as an early stage fund with a close-knit team, this would be limiting in how candidates perceive the opportunity, which we regard as having very few boundaries. Analyst? Principal? Director of Platform? Head of Network? You’ll see that part of the application is telling us what you think the position should be called. We also want you to care more about the impact you’re going to have here and our commitment to you than screening first by title. We care deeply about the ethics and values of anyone we add to our team.

Responsibilities and Opportunities

You’ll be working with Hunter and Satya in and around the investment process. This will include assisting on market research, company diligence and special projects to identify founders we’d love to support. You won’t be a pre-partner meeting filter (i.e., we’re not tossing you into the haystack to look for needles).

Post-investment we’ll ask you to participate or lead a variety of activities in helping us support the founders we’ve backed. This includes facilitating introductions, completing data analyses, community building and so on. You’ll develop direct relationships with the founders we’ve backed.

You’ll also get involved in a host of activities related to the operations of Homebrew and our funds. You’ll learn the ins and outs of not just investing, but also managing a fund.

Assume these responsibilities represent the floor, not the ceiling. We’re interested in your ideas once you’re on board.

Compared to the “Average Venture Capital Job,” you’ll generally get more of some things and less of others:

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Seat at the Table: You’ll participate in our twice-weekly Partner meetings. Not just for portions or when “your deal” is being discussed. You’ll meet and interact with our Limited Partners, the institutions that provide us with capital to invest.  

Skin in the Game: You’ll earn carry in Homebrew III as part of your compensation. We believe that a sense of ownership is essential and all employees at Homebrew directly share in the upside of the work we do.

Prep for the Future: We believe in open conversations about career development. As this role isn’t meant to be longer than three years, we’ll honestly engage you in professional development over time to ensure that you’re using your time with us to develop skills, experiences and a network relevant to what you might want to do next. We’ve managed organizations of hundreds of people during our operating careers. Many of those people have gone on to be founders, technology executives and venture capitalists.

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We want to give you the freedom to develop and run your own playbook to succeed in this role. But we also feel it’s important to make our standard practices clear enough to help you decide if Homebrew is the right firm for you.

Conferences and Events: We tend to focus on smaller gatherings that serve a specific purpose, such as sharing lessons, talking honestly about the entrepreneurial journey or fostering community and mentorship amongst the companies we back. We don’t attend many of the large conferences but will support your participation in what we’d call “nook and cranny” events - places where different groups of thinkers, explorers, underrepresented segments and so on, collaborate together.

Check Writing: This isn’t explicitly a sourcing and investing role. While you’ll be involved in all aspects of the investment lifecycle, this isn’t a Partner track role where we give you a small amount of money to invest and then reward you with more investment authority over time.

International Exposure: While we believe there’s lots to learn from the way international communities are creating and adopting technology, this isn’t a role where you’ll be abroad substantially. If you want to propose a project which requires this sort of travel, we’re happy to consider it, but if you’re really looking for in-depth exposure to non-US/Canada territories, our firm likely isn’t the right one for you.

This is the Right Opportunity For:  

Someone with 3-6 years of relevant work experiences/exposure to tech startups or high-performing companies of any industry (we believe in cross-pollination). We’re open to folks who started their careers in management consulting or investment banking, but it’s important to us that you have a demonstrated love for technology and entrepreneurship that has been expressed in ways outside of your day job.

Someone who thrives in an independent working environment, using your best judgment, high ethical standards, strong communication skills, passion and adeptness with technology (with or without formal training) to execute the Homebrew model.

Someone who wants exposure to venture capital (or at least our style of it) through an apprenticeship-type role but isn’t necessarily committed to the industry long term.

Someone who colors outside of the lines drawn above but still has a deep desire to learn the venture capital business.

How to Apply

Please complete the application found here by November 10, 2018. We may invite candidates to interview on a rolling basis but all applications submitted by November 10th will be considered. The start date for the position is no later than January 7, 2019.

In Closing

At Homebrew, when we invest our goal is to back founders who we’re proud to put not only capital but also sweat and reputation behind. So it’s incredible when two of our high quality teams come together to fulfill a shared vision. Last month, Chime acquired Pinch, a startup working to democratize access to lower cost, higher quality financial products by first improving credit scores. Homebrew led Pinch’s seed round over two years ago and co-led Chime’s seed round almost five years ago. We couldn’t be more pleased to have two incredible teams who we’ve worked with so closely decide to work even more closely with each other.

Sometimes the tech world moves faster than our blog does, and that’s why we’re just getting around to congratulating Homebrew portfolio founder Adam Ludwin on the forming of Interstellar, a combination of his company, Chain, with Lightyear, a Stellar-focused development company.

Chain was one of the original “the blockchain is more than just Bitcoin” companies and its API/developer platform supported the efforts of several large financial services institutions in building atop the blockchain. Along the way, Adam also became a strong, clear voice in the industry for building software and value, not just hype. When he shared that Chain and Stellar were combining forces, it made total sense to us given where the industry is headed and what infrastructure it needs to unlock new opportunities for developers and end users. We’re thrilled with the outcome for the team and for the early investors (of which we were a small supporting piece).

With 1 million users in over 10k markets, Winnie is doing it. As we’ve have the chance to observe since the earliest days, the team members at Winnie are doers. Creating and scaling a product for millennial parents and caregivers who are amazingly underserved by a market where the incumbent brands started as magazines with outdated, gendered stereotypes of parenting and family. The Winnie team is building the new hub for parents, one which mixes data and community in ways that similar startups have struggled to implement at scale. TechCrunch has some more details on how it’s all coming together.

When we started Homebrew in 2013 we had the feeling retail and logistics were going to be transformed by technology. Every company was becoming a “technology company” and entrepreneurs with insights into both enterprise and consumer needs had a chance to build something special. Jaron Waldman, CEO of Curbside, struck us as one of those founders and we were thrilled he let us sneak a supporting check into a near-closed financing.

It’s no secret that there’s a lot of activity in the blockchain and cryptocurrency markets. It’s been fascinating to watch how quickly the space has evolved since our investment in Chain back in 2014. Over the long term, we believe in the power of the underlying technologies and potential applications. But in the short term, we’ve tried to focus our investing on the building blocks needed to allow for mainstream use and adoption of the tech and apps. In addition to security, stability and scalability, one of those building blocks is identity. So when we met Preethi Kasireddy we couldn’t help but be taken by her perspectives on identity on the blockchain and her vision for how TruStory could help build it. TruStory is starting by creating a platform that leverages social and economic incentives to validate and curate a more trusted reality, initially in the blockchain space itself.    

At Homebrew, we talk about investing in companies with both value and merit. Companies that have the potential to generate tremendous economic wealth for their stakeholders while also contributing positively to the greater world. When we met Mariana Matus and Newsha Ghaeli at Biobot Analytics, we were struck with how much the business resonated with our goals. Biobot works with city governments to collect wastewater for analysis of population health. Its first product is helping tackle one of the most significant problems facing our country - the opioid epidemic. By analyzing metabolites in wastewater, cities can better understand opioid use in their geographies, allowing public sector and non-profit organizations to better allocate resources and evaluate the impact of their interventions over time.

Now that CEO Laszlo Bock and team are sharing a bit more about what they’re up to at Humu, we’re able to post about our own involvement with the startup as supporting investors. We were both fortunate enough to overlap with Laszlo at Google, where he ran People Ops for over a decade. What we observed was a strong, opinionated, data-driven leader - not unique for the “Googler” makeup - but also one who was especially interested in challenging and evolving the assumptions we’d baked into our hiring processes and talent strategies. That Google’s best contributors weren’t necessarily the ones with the highest SAT scores and fanciest degrees.  That our recruiting processes were screening out all types of intelligence and diversity that we absolutely needed to continue thriving and innovating. That people and the development, compensation and retention infrastructure that supported them were as vital as the code and servers upon which our products ran.

So when Laszlo shared he was building a new company along with Wayne Crosby and Jessie Wisdom, we wanted to make sure Homebrew could participate. Since that time they’ve raised over $40m from leading investors such as Index Ventures and IVP and deployed their product with companies ranging from 150 to 65,000 people. We’re thrilled to be a small part of the Humu journey and know their people-first approach is the way work is done best.

One of the most important aspects of our investment strategy at Homebrew is that we want to put sweat and reputation behind a team, not just capital. Getting up each morning knowing that we get to support founders who are intentional and ambitious in building a company they are proud of beyond the financial outcome. So when two of these companies join forces, there’s a thrill in the combinatorial effect of seeing quality people work together towards a bigger outcome.

Last month Cruise acquired the founding team of Zippy.ai, a previously unannounced startup also working in the autonomous transportation industry. Homebrew had been fortunate enough to be among Cruise’s seed investors, which provided us early exposure to the transformation occurring in transportation and logistics driven by autonomy. It also helped us arrive at the point of view that the talent in this industry was still concentrated in a relatively small group of technologists worldwide and when you had the chance to back one of these teams, you should do it. That led us to make a similar seed investment in Gabe Sibley and his company, Zippy. Although we made that commitment hoping we’d be in business with Gabe for a long while to come, sometimes there’s a combination which just makes sense, and we know the Zippy team will make a substantial impact at Cruise.

This marks the first time a prior portfolio company acquired a current portfolio company. We know that’s a lower level venture badge than “portfolio company IPOs” but as a five year old fund, it’s wonderful to see people we’ve backed spread across their respective industries.