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Next Billion-Dollar Startups: Truepill’s Dose Of Digital Disruption To The $400 Billion Pharmacy Industry

I was barely getting any sleep,” Umar Afridi, cofounder and CEO of Truepill, says of the tech-enabled pharmacy company’s early days. From 9 a.m. to 4:30 p.m. each day, he worked at Truepill’s distribution center in Hayward, California. Then he drove to his job as a pharmacy manager at a 24-hour CVS in East San Jose. On the side, he studied for a dozen state pharmacy exams so that Truepill, which at the time had no other pharmacists on staff, could legally ship to those states. “It was a pretty crazy first year,” he says with characteristic understatement.

That craziness has paid off for Afridi, 37, and his cofounder, Sid Viswanathan, 35, who hope to upend the staid, heavily regulated pharmacy business with technology. Truepill, which is based in San Mateo, California, shipped its first prescriptions in 2016. Last year its revenue reached $48 million, helped by the fast growth of direct-to-consumer customers like Nurx, which sells birth control, and Hims, which focuses on remedies for hair loss, erectile dysfunction and acne. This year Truepill could double its revenue to $100 million, as it expands its customer base beyond direct-to-consumer medications to prescriptions that treat more serious illnesses.

Those revenue numbers gained Truepill a spot on Forbes’ Next Billion-Dollar Startups list this year, despite its having raised just $13 million in venture funding led by Initialized Capital at a valuation of $80 million in its last round. That valuation makes Truepill an outlier on the list, as does the fact that Afridi and Viswanathan own the majority of the business and plan to continue to do so after raising the next round of capital, expected before the year’s end.

Afridi and Viswanathan—and their investors—are betting that Truepill will see a big payoff as consumers move away from in-person doctor visits and to a new model of telemedicine. “This is the building block of digital health and the future of healthcare,” says Initialized managing partner Garry Tan.

Pharmacy is a roughly $400 billion business in the United States, yet only recently have entrepreneurs begun tackling the market. In 2013, two young founders launched PillPack, a retail pharmacy startup that was acquired by Amazon last year for around $750 million. Other newcomers followed, including New York City’s Capsule, which grabbed $270 million in funding to do same-day prescription delivery refilled via text.

Truepill’s difference: Its business-to-business model makes it a behind-the-scenes player, invisible to retail customers, who will never have reason to know its name. That’s by design, and it allows Truepill to sign agreements with drugmakers and pharmacy benefit managers, those industry intermediaries that sit between insurers and drugmakers, without directly competing with them. “We’re not a traditional mail-order pharmacy,” Afridi says. “We’re way more than that.”

Afridi was born in Salt Lake City and grew up in Manchester, England, where his mother’s family was from. He studied pharmacy at the University of Manchester and worked as a relief pharmacist, filling in for those who went on vacation, in England. After passing the tests to practice in the United States, he took a job at Fred Meyer near Seattle. Unlike the typical pharmacist, Afridi always had an entrepreneurial side gig. During college, he imported performance cars, like the Mazda RX-7 and the Mitsubishi Evo 5, from Japan and sold them at a profit.

                              

While working as a pharmacist, he taught himself computer programming and began playing around with the idea of an on-demand pharmacy. His goal: to ease customers’ frustrations with waiting in line to pick up medications and to cut back the phone calls and faxes required for pharmacists to do their job. “I’ve always had a passion for technology, and every time I see a problem, I think, ‘How can technology fix this?’” he says.

Viswanathan, an Indian immigrant, had worked at Johnson & Johnson, then cofounded CardMunch, a business-card scanning app. In 2011, LinkedIn bought the startup for a reported $3 million. Viswanathan stayed at the larger company after the deal, and when LinkedIn went public the stock he owned made him wealthy for the first time. “It was fairly life-changing coming from no money to having some,” he recalls. After nearly four years at LinkedIn, he was ready to leave and work on another startup. “My only criterion was what do I want to spend the next 10 years of my life on,” he says.

While he was pondering what to do next, he stumbled upon Afridi’s profile on LinkedIn—where Afridi had changed his header to “startup founder, pharmacist”—and messaged him cold to talk about healthcare. Soon the two were meeting regularly and brainstorming ideas for a business to start together.

By then, other startup pharmacies, like PillPack, were making inroads with retail customers. Rather than compete in what had become a crowded space vying for retail customers, Afridi and Viswanathan figured they could operate in the background, using technology to build an extremely efficient pharmacy distribution center. “Truepill is what you get when you put together a pharmacist and a software engineer,” Viswanathan says.

“This is the building block of digital health and the future of healthcare,” says Initialized Capital’s Garry Tan.

Their idea coincided with the rise of new direct-to-consumer health brands that needed a distributor that could follow all the pharmacy regulations. To consumers, these Instagrammable health products don’t look like drugs, and often their subscription boxes contain a mix of both prescription and over-the-counter products. But if there’s even one vial of prescription pills going out in the mail, the startup sending it needs a pharmacy to fulfill the order. In talking with Nurx, Viswanathan says, “we came to find out they were literally picking up the phone to mom-and-pop pharmacies in different states.” They gained a customer by offering a better way.

In 2017, Andrew Dudum cofounded Hims, the fast-growing direct-to-consumer therapeutics startup for men, and he, too, signed up with Truepill. “We knew from the beginning we were going to grow very fast,” Dudum says. “We expected 30 to 50 orders per day, and that was the scale we communicated to Umar and Sid that we needed to be prepared for. In the first week, we were getting 500 orders per day.” Today, Hims, which is valued at $1.1 billion, does thousands of orders per day and is one of Truepill’s largest customers. “They figured out a way to scale with us,” Dudum says.

At Truepill’s Hayward distribution center, all orders come in electronically. When Hims sends a prescription for finasteride, the male hair-loss treatment, for example, it goes through electronic vetting and then a robotic machine pulls the 1-milligram tablets from custom-made 1,000-count bottles into a small pill vial that gets labeled with Hims branding. That automation allows Truepill to work more efficiently than a traditional retail pharmacy. So, too, does its focus on a small number of medications: Ten medications, including finasteride and the erectile-dysfunction drug sildenafil, represent 80% of its volume. Its scale in those allows Truepill to turn over its inventory every few days and gives it the power to negotiate prices with drug manufacturers and pharmacy benefit managers on those products.

“Truepill is what you get when you put together a pharmacist and a software engineer,” says cofounder Sid Viswanathan.

For Afridi and Viswanathan, direct-to-consumer medications are just the beginning. They are starting to sign agreements with drugmakers and pharmacy benefit managers, though they won’t name those larger partners yet. This shift comes none too soon, as Hims has announced that it would open its own pharmacy in Ohio to shift a portion of its distribution in-house—a move that Viswanathan says will begin to impact Truepill in 2021. “Hims is a large part of the business in quantity, but not in revenue,” he says, noting that medications reimbursed by insurance are higher cost than lifestyle meds that consumers pay for out of pocket. Truepill currently has two distribution centers and is adding another five.

Afridi and Viswanathan’s next step: building a nationwide network of doctors in every state that will enable their pharmacy startup to play a bigger role in the shift to telemedicine. Those doctors will allow it to work directly with makers of specialty medications, say, so that they can distribute their medications to consumers more easily. Over time, Truepill figures its orders could rise from 5,000 to 10,000 per day to 100,000.

“Lifestyle and ED [erectile dysfunction] medications have allowed us to build the infrastructure to all these other areas,” Afridi says. “There is a lot of innovation that needs to happen in the space.”

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I’m a senior editor at Forbes, where I cover manufacturing, industrial innovation and consumer products. I previously spent two years on the Forbes’ Entrepreneurs team. It’s my second stint here: I learned the ropes of business journalism under Forbes legendary editor Jim Michaels in the 1990s. Before rejoining, I was a senior writer or staff writer at BusinessWeek, Money and the New York Daily News. My work has also appeared in Barron’s, Inc., the New York Times and numerous other publications. I’m based in New York, but my family is from Pittsburgh—and I love stories that get me out into the industrial heartland. Ping me with ideas, or follow me on Twitter @amyfeldman.

Source: Next Billion-Dollar Startups: Truepill’s Dose Of Digital Disruption To The $400 Billion Pharmacy Industry

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Hi, I’m Garry Tan, venture capitalist and cofounder at Initialized Capital. We were earliest investors in billion dollar startups like Coinbase and Instacart, and we’re spending time with some of our best founders to learn the secrets of their success and see the future they’re building. Today I sat down with Sid Viswanathan, cofounder of Truepill, an API for all needs for telemedicine. Telemedicine has the potential to bring down costs and make high quality care more accessible for every person on the planet. We’re headed to Hayward, California, their west coast HQ and fulfillment center out of which they provide pharmacy services for dozens of telemedicine startups and practices large and small, shipping to all 50 states. Come learn about how as a founder, you need to choose a problem space that you could want to work on for 10 years or more. Please like this video and subscribe to my channel if you want to see more videos like this with top founders. Find Sid on Twitter at https://twitter.com/sidviswanathan Find Garry on Twitter at https://twitter.com/garrytan Learn more about Truepill at https://truepill.com Learn more about the companies we fund, and how we work with them at https://initialized.com

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Borderless Investing: Eduardo Saverin And Raj Ganguly Grow B Capital

Eduardo Saverin and Rajarshi “Raj” Ganguly are two of the three cofounders of B Capital Group, a venture capital firm with close to $800 million, split between a first and a second fund (still being raised). The third cofounder is legendary investor Howard Morgan. Brazilian Saverin, 37, is based in Singapore and best known for being the cofounder of Facebook – whose shares in it give him a net worth estimated at about $10 billion.

Americans Ganguly, 43, and Morgan, 73, come from diverse backgrounds. Ganguly, based in Los Angeles, spent his early career at Bain Capital, overseeing a number of investments. Morgan, based in New York, helped start ARPAnet, the internet’s precursor, in the 1970s, and later was president of hedge fund Renaissance Technologies.

B Capital has dual headquarters in Los Angeles and Singapore, as well as offices in New York and San Francisco, with a total of 40 full-time staff. B Capital focuses on companies already in series B or C rounds, generally over $10 million in revenue, and looks to invest roughly $20 million. The trio would like to keep the total number of companies in each fund to about 20.

The firm has the slogan “innovation without borders,” reflecting the founders’ belief that innovation can originate anywhere, not just in Silicon Valley. B Capital also uses global consultancy Boston Consulting Group (BCG) to help it grow startups and match them with larger firms. Saverin and Ganguly sat down with Forbes Asia in an exclusive interview in September at Singapore’s Shangri-La hotel to discuss their goals for B Capital.

Today In: Asia

Forbes Asia: How are you deploying your capital into startups?

Eduardo Saverin: Primarily we focus on companies that have an existing level of traction. There are a lot of places where you could invest in technology, but you need to have an edge and focus. For us, together with our relationship with BCG, it’s about accelerating growth. Most companies we invest in have a B2B angle. When the company is still an idea on a napkin, it’s hard for us to introduce them to some of the largest companies in the world. So we tend to invest where there’s a particular amount of value that we can bring through those corporate introductions and value acceleration, which means they tend to translate to series B and beyond. But frankly the staging is fungible. It’s about traction.

Raj Ganguly: As we build the firm we want to be really conscious of being able to invest into some companies really early, probably smaller amounts of capital, and as some of those companies scale and grow, we want to bring larger amounts of capital to those companies. Then finally for some of the companies that really continue to go into highly accelerated growth mode, we would actually not just double-down, but we would take outsized ownership stakes. As we’re growing the capital, we’re increasing our ability to invest across multiple stages. The best use of our capital, rather than finding a new investment, is finding a company in our portfolio where we can see the trajectory of the company before an outsider can see it.

What is the value-add you want to bring to your entrepreneurs?

Ganguly: We focus on doing three things really well ourselves and then partnering with BCG and others for everything else. We focus on helping make introductions and really helping get that growth flywheel going. The second part is we are focused on hiring key C-level talents into companies once we invest into them. We find that every single time we make an investment, if we can help them with one or two better hires on the margin, it fundamentally changes the direction of the company. And third, we help them raise strategic capital. We think, while it’s great to have other venture capital firms and folks like that, there are so many large enterprises sitting on over $1 trillion of capital and many of them want to invest and partner with startups. They could be much more strategic in the capital and the value that they bring.

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Juliana Tan for Forbes Asia

Can you give an example of this value-add to a portfolio company?Saverin: One of our early investments was in a company in the clinical trials space called Evidation Health. It’s a perfect example of a business where they can develop all the technologies that they would like. The truth is, success will come from adoption of virtual clinical trials from the largest pharma companies in the world. When we first met the business, it was working with a lot of smaller biotech firms, which are the traditional early adopters of such technologies. But leveraging our partnerships, including BCG, we had a chance to meet with some of the largest pharma companies in the world.

Through those discussions we understood that, unlike traditional tech innovation cycles where things over time get a little bit cheaper and faster, in the pharma world, you were seeing kind of a reverse innovation cycle where it was getting more expensive and taking longer to get to market.

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Juliana Tan for Forbes Asia

And one of the largest pharma companies in the world took one of their existing trials that they had already done, and then just replicated it through a virtual standpoint, and saw both the speed, the cost effectiveness, and the depth of the data. That gave us conviction to invest, because we knew there was a real appetite for experimentation. Today, that business has most of the largest pharma companies in the world as customers. Some of them have become investors.

Ganguly: It just announced, a few weeks ago, a landmark partnership in dementia with Apple and Eli Lilly. We’ve been a part of helping make some of those connections.

What’s unique about B Capital’s approach to investments?

Ganguly: There are four key parts of our model. It’s about global thematic investing, one single team leveraging global data. It’s about deep local expertise in each market that we invest in. It’s about being the single highest value-add investor in every company and having the capital through partnerships with our investors and through our own capital to fund the growth of these companies as they scale. Our risk model is a lower risk model than early stage, which is about investing in ideas on a napkin, and having one of 20 companies that you know will drive your whole returns. Our model is about backing companies that have customer traction, that have a founding team that has high potential. We are looking for large potential customers and large potential partnerships that further mitigate risks. We believe our approach has upside because we’re investing in companies that are growing at 100% plus a year.

Saverin: The VC game is an information edge game. You need to leverage it not just in the first investment, but across the lifecycle of the company. Our model is about rolling up our sleeves and getting deeply involved, where entrepreneurs want us to, and where we can tremendously add value.

You believe in innovation without borders, can you expand on that idea?

Saverin: Companies are becoming global increasingly by design. There’s no border to where innovation can be received and used. Whether you start a company in Silicon Valley or in Africa or any part of the world, there really is the increasing impetus to go beyond your existing borders. When you start thinking about the evolution of innovation, some of it is the enablers, including the engineering talent. When you go to Silicon Valley, that’s actually one of the hardest places in the world to get engineering talent because of the massive competition. In other parts of the world you can ask is there enough raw talent, even though it’s not as competitive? So we’ll see a broader equalization. It would be hard for me to believe that as tech enablement becomes a big part of much larger industries, that all that innovation will come from one place. If that were to happen, I’d do anything I can to change it because the truth is the whole world is consuming technology.

What opportunities do you see in Southeast Asia?

Ganguly: We understood early that e-commerce was being inhibited in the region because e-commerce companies had to do their own delivery. That’s what really convinced us that we wanted to invest in all the picks and shovels around e-commerce, but no longer invest in e-commerce, or at least not focus on e-commerce. So today we’re investors in Ninja Van, BlackBuck, Mswipe and Bizongo, all companies that enable e-commerce.

Given WeWork’s pulled IPO, have valuations gotten overdone?

Ganguly: Where we are in the cycle and when it changes, that’s not our business. We don’t time the market, but we fundamentally take a long-term perspective. There are times when you’re in a cycle and you have to pay a little bit more for that. But if you have the right time horizon, we think it’s still far better to do that than to be looking for value plays where you’re looking at the second- or third- or fourth-best company. We always say that you might sleep better if you have a value play, but you won’t sleep very well when you exit because the valuation differential is even more stark when you exit a lower-tier player. It used to be that you were forced to go public because you had to pay out early investors. That’s no longer the case. You can now continue to stay private, and have access to very large amounts of private capital. Your early investors can cash out because later stage investors are willing to buy them out. There’s a very active secondary market. What’s changed is I think there’s no longer this belief that going public is something that you have to do. There are a lot of questions about whether going public drives long-term value. While it’s worked for some companies, it hasn’t worked for others.

What would be the process if a portfolio company might fit with Facebook?

Saverin: We are trying to facilitate introductions with any enabler, hopefully a win-win on both sides. So Facebook of course would be part of that equation, and parts of its strategy that converge with some of our focus areas, especially in financial services. Many companies will already have some type of relationship with Facebook, given where Facebook is today, through WhatsApp or otherwise. The innovation ecosystem touches Facebook all the time, so it’s just a question of extent.

Where is B Capital going to be in 10 years?

Saverin: That’s an important question. I usually think about it in two ways. We are incredibly ambitious, and we want to have an institution that will outlive us, so we are always thinking of the very long term. One thing I say every single day, whether in our partner meetings, or when we speak to our entrepreneurs, is to always push focus. Focus on what you’re doing today, that’s how you’re going to get to a bigger vision ten years from now, and even a vision well past our lifetimes. But at a really top level what I want us to do is to enable technology to get into the hands of consumers faster by leveraging the existing distribution networks of the largest companies in the world. Push intrapreneurship, it doesn’t necessarily need that push, but enable them to not only think of disruption but a positive win-win transformation. It’s not about the top ten tech companies that will take over a market by themselves, but the enablement of every company in the world with technology in collaborative innovation.

What do you mean by collaborative innovation?

Saverin: This is a really high-level idea, that can be seen in the platform technologies, such as Facebook, WeChat and others. They have created massive innovation acceleration by enabling other businesses to come on top of their platforms to gain distribution and engagement. What we are looking for is a win-win using the distribution assets of the largest companies in the world to ultimately get API-ed to the innovation ecosystem. If we get even 0.5% of the way in driving that, we will be doing the right thing for ten years from now. I think it’s not always a success when a startup out-innovates and massively disrupts a big company, when it could have leveraged a big company’s distribution, the licenses, the regulatory know-how, and so on, so that consumers could get the advantages of technology much faster.

This conversation has been edited and condensed for clarity.

Pamela covers entrepreneurs, wealth, blockchain and the crypto economy as a senior reporter across digital and print platforms. Prior to Forbes, she served as on-air foreign correspondent for Thomson Reuters’ broadcast team, during which she reported on global markets, central bank policies, and breaking business news. Before Asia, she was a journalist at NBC Comcast, and started her career at CNBC and Bloomberg as a financial news producer in New York. She is a graduate of Columbia Journalism School and holds an MBA from Thunderbird School of Global Management. Her work has appeared in The New York Times, Washington Post, Yahoo, USA Today, Huffington Post, and Nasdaq. Pamela’s previous incarnation was on the buy side in M&A research and asset management, inspired by Michael Lewis’ book “Liar’s Poker”. Follow me on Twitter at @pamambler

Source: Borderless Investing: Eduardo Saverin And Raj Ganguly Grow B Capital

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Eduardo Saverin, Co-Founder, Facebook & Co-Founder at B Capital Group alongside Raj Ganguly, Co-Founder at B Capital Group discuss how global trends in innovation and venture capital can be leveraged to benefit entrepreneurs beyond Silicon Valley. Fore more news and insights visit SuperReturn365: https://goo.gl/9nEbXA

 

ONEX Is Coming Back & Its Actually Perfect For Investing

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Founded in 1984, ONEX invests and manages capital on behalf of his shareholders, institutional investors and high net worth clients from around the world. ONEX platform include: ONEX Partners, private equity funds focused on larger opportunities in North America and Europe, ONCAP, private equity funds focused on middle market and smaller opportunities in North America, ONEX credit, which manages primarily non-investment grade debt through collateralize loan obligations, private debt and other credit strategies and Gluskin Sheff’s actively managed public equity and public credit funds.

In total ONEX assets under management today are approximately $39 Billion, of which approximately $6.9 Billion is their shareholder’s capital. With offices in Toronto, New York , New Jersey & London, ONEX is experienced management teams are collectively the largest investors across ONEX platforms.

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ONEX main task is to increase customer profits. In trading, ONEX use automated bots, the latest strategies and approaches for working on each exchange, this ensures the declared high income. Safety is ONEX top priority. In every decision make, ONEX is supervised by security concerns. They use the most reliable and effective technologies available to ensure the safety of investors funds.

The investor has the right to:

  • 1. Produce awareness of others in order to attract them to participate in ONEX Financial Corporation;
  • 2. Create sites and post information about the company;
  • 3. Send to Administration comments or feedback to improve ONEX services;
  • 4. Require ONEX Financial Corporation fulfillment of the conditions of ONEX agreements

The ONEX Financial Corporation team has specifically designed smart, high-return investment packages. Each package has its own life and type of charges. Be careful when choosing an investment rate. Those who believe in us will be satisfied and get a good profit. For us, the most important thing is the loyalty of our customers, therefore ONEX Financial Corporation always tries to take into account the general situation in the cryptocurrency market, this allows us to consistently increase the company’s profits, and earn not only an increase but also a decrease in the market.

Source: https://onexfinancial.com

Babylon Health Gets $2 Billion Valuation With New Funding That Will Help It Expand In U.S.

Babylon Health, a U.K.-based startup whose fast growth has been shadowed by concerns about the efficacy of its telemedicine apps, has raised $550 million in Series C funding, elevating the company to unicorn status. Saudi Arabia’s Public Investment Fund (PIF), which invest on behalf of the Saudi Arabian government, led the round that valued the company at $2 billion with a total of $635 million raised.

The new capital will enable the company to expand into more markets including the U.S. and Asia, Babylon said, and it will also bolster its artificial intelligence capabilities on the platform, which serves 4.3 million users worldwide. An unnamed U.S health insurer and a fund of global reinsurer Munich Re also invested. Vostok New Ventures, which already holds a 10% stake in Babylon, previously said it would participate in the new round, as did Sweden’s Kinnevik.

With an aim of cutting healthcare costs and broadening access, Babylon secured deals with Britain’s National Health Service with its apps to replace local doctor visits with video consultations and a chatbot that doled out advice on whether to see a doctor. It released a new artificially intelligent chatbot that promised to give diagnostic advice on common ailments, without human interaction. Its progress, however, was stuttered by doubts about the services’ abilities. Interviews with current and former Babylon staff and outside doctors revealed broad concerns that the company has rushed to deploy software that had not been carefully vetted, then exaggerated its effectiveness, Forbes revealed in December. The company disputed those claims, saying its software goes through many clinical tests.  The company also came under fire for failure to follow up with patients receiving mental health treatment. At the time, Babylon blamed problems with the NHS referral system.

Any blunders don’t seem to have slowed the company’s momentum.

Led by CEO and Founder Ali Parsa, an Iranian-born former banker, Babylon has also secured contracts with Prudential and Samsung. It says it now delivers 4,000 clinical consultation a day, and one patient interaction every 10 seconds.

“We have a long way to go and a lot still to deliver,” Parsa said in a statement. “While the burden of healthcare is global, the solutions have to be localized to meet the specific needs and culture of each country.”

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I serve as assistant editor for Forbes Innovation, covering cybersecurity and venture capital. I have covered politics at POLITICO, entertainment for Time Out New York, but my most fascinating beat has been covering the intersection of technology, finance, and entrepreneurship. I’m also an alumna of CUNY Graduate School of Journalism, and the University of Washington. Email tips to mmelton@forbes.com

Source: Babylon Health Gets $2 Billion Valuation With New Funding That Will Help It Expand In U.S.

It’s Alive! Facebook’s Surprising Video Standout Is A Horror Movie Startup

Like a proud parent, Jack Davis has covered the refrigerator in his Wilshire Boulevard office with artwork. But these aren’t crayon-drawn stick figures of Mom and Dad. They’re the stuff of nightmares—a demonic entity with shark teeth, a cannibal with thorns sprouting from his head, a tree that likes to disembowel its victims.

The gruesome creatures crawled out of the imagination of Davis’ Crypt TV, a digital studio that aspires to become the Marvel of monsters for mobile. Davis, 27, has raised $11 million from investors including Hollywood producer Jason Blum (Us, Ma), media mogul Shari Redstone’s Advancit Capital, Huffington Post cofounder Kenneth Lerer and NBCUniversal. The four-year-old Los Angeles studio, which creates horror videos for social networks, is on track to bring in about $20 million in revenue this year through production deals, running ads for films like Crawl and selling merchandise.

When he started, “no one was doing scary for mobile,” Davis says. That signaled a missed opportunity. “This is a huge genre. It has a solid fan base, and scary movies are very, very big.”

The Golden Age of streaming has birthed Netflix competitors that cater to nearly every genre, from U.K. shows on Britbox to anime on Crunchyroll and, yes, horror on Shudder and Screambox. At the same time, studios like Elisabeth Murdoch’s Vertical Networks have built audiences that are reached primarily through mobile-first social networks such as Snapchat and Instagram, which more than a billion people visit each month.

Davis and Crypt TV cofounder Eli Roth, the film director and producer who developed Netflix’s first horror series, Hemlock Grove, bet that an audience who loved films like Jordan Peele’s Oscar-nominated Get Out would snap up suspense and horror on the small screen, too.

It’s an intuition that’s paying off. Crypt TV said on Friday that it had reached a deal with Facebook to develop five series exclusively for Facebook Watch, its on-demand video service. The deal extends a partnership started in 2018, when Facebook green-lighted a 15-episode series based on Crypt’s short film The Birch.

Facebook has been paying as much as $25 million for these original shows, though the bulk of them cost $3 to $5 million, according to a person familiar with the matter. Forbes estimates the new Crypt TV deal is valued at less than $20 million. Neither party would disclose the terms of the partnership.

Facebook might seem an unlikely place to screen monster movies for Generation Z and younger Millennials, who make up nearly half of Crypt TV’s audience. One Pew Research Center survey last year found that the world’s largest social network is no longer the most popular hangout for teens, a big drop from earlier in the decade. Plus, Facebook Watch has struggled to gain traction. A year after Facebook CEO Mark Zuckerberg launched Watch to better compete with Google’s YouTube and Snapchat’s Discover, only half of Facebook users had ever heard of it, says The Diffusion Group, a media research consultancy.

Still, momentum is gathering for shows that capitalize on the network’s power to amass communities to talk about shared interests—say, Jada Pinkett Smith’s talk show, Red Table Talk, or Sorry for Your Loss, a drama on grief starring Elizabeth Olsen. Facebook says more than 140 million people each day spend at least a minute viewing Watch videos.

“It’s very hard to say that a platform … (of) two-plus billion people on it doesn’t have young people on it,” says Matthew Henick, Facebook’s head of content planning and strategy. “What Crypt does incredibly well is—because they’re able to tell their stories through many different modes or, in this case, products—they’re able to find those audiences and pull them in.”

Crypt TV taps into a community that likes to be scared. Horror has been reeling in fans on the big screen: The genre brought in a record $1 billion in box office sales in 2017, according to Comscore.

Some fans want to get their goose bumps for free. Thanks to The Birch, which was viewed 26 million times on Facebook, the studio now has 9.75 million followers, or more than triple its YouTube audience. On Davis’ fridge hang mementos from fans. One shared a photo of her tattoo—it’s of the Look-see, a creature with no eyes and flesh that’s been stitched together.

“Young people have so much emotion,” Davis says. A scary story “provides an amazing, permissive structure to take on deep emotional issues.”

A fortuitous encounter at a dinner party hosted by his parents in West Los Angeles led to the creation of Crypt TV. Then a student at Duke University, Davis found himself sitting next to Roth and began reciting dialogue from Roth’s portrayal of the bat-wielding Nazi killer Donny Donowitz in Inglourious Basterds.

The conversation turned to Davis’ career plans. The sociology and political science major said he hoped to launch his own company, capitalizing on the dramatic shift in media viewing habits he’d observed during his four years in college. Roth had a suggestion.

“I said, ‘You know that audience that’s going to see horror movies now’—because obviously now horror has exploded—‘They’re all on their phones,’” Roth recalls. “What is the next generation of characters? Who is creating the new Freddy Krueger? Is there a way to launch a Freddy? A Jason? A Michael Myers? A Chucky? Just on your phone?”

Roth introduced him to Blum, who became Crypt TV’s earliest investor and served as a mentor to the company’s 23-year-old founder.

An early success was #6SecondScare, an October 2014 online competition that encouraged users of Vine, Twitter’s six-second video service, to upload their scariest videos.

Roth lent his name to the contest and coaxed Hollywood celebrities including Quentin Tarantino and High School Musical’s Vanessa Hudgens to promote it and serve as judges. #6SecondScare attracted 20,000 submissions and ended up featured on ABC’s Good Morning America.

In the summer of 2015, Davis’ team launched Snapchat Murder Mystery, a show that gathered ten social media influencers to a mansion party, then killed off their characters in an Agatha Christie-styled whodunit. A year later came Crypt TV’s breakthrough moment with The Birch. The four-minute video follows a terrified schoolboy who summons an ancient being in the woods to dispense a particularly bloody form of retribution on the boy’s tormentor.

Davis faces his own monster lurking in the dark: Quibi. The mobile video subscription service comes with a Hollywood pedigree, a $1 billion cash horde and some of the best-known filmmakers in horror, Guillermo del Toro (The Shape of Water, Pan’s Labyrinth) and Sam Raimi (Evil Dead), as well as Blum, producing original content.

Quibi launches in April—though Crypt TV, in classic horror film fashion, has gotten a running start.

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I’m a Los Angeles-based senior editor for Forbes, writing about the companies and people behind the biggest disruption in entertainment since cable TV: streaming video

Source: It’s Alive! Facebook’s Surprising Video Standout Is A Horror Movie Startup

4 Simple Habits to Build Wealth Faster

As a young child, did you ever dream of having $1 million in the bank?I used to think that way, but my perspective changed over the years. $1 million is no longer a guarantee of financial freedom. For someone spending $200,000 a year in good health, $1 million won’t go very far during retirement. For someone else who spends $40,000 annually and has Social Security income, saving less than $1 million may be appropriate……….

Source: 4 Simple Habits to Build Wealth Faster

Crypto Startups Are Fleeing The U.S.—This Bill Is Trying To Stop Them

In the fall of 2018, Republican congressman Warren Davidson was meeting with a cryptocurrency entrepreneur in Massachusetts. The CEO was deciding where to locate his startup, and they were discussing the regulatory uncertainties surrounding digital currencies and initial coin offerings (ICOs). The entrepreneur told Davidson, “Look, it’s nothing personal. We just don’t trust that you guys are gonna get this done right.

Source: Crypto Startups Are Fleeing The U.S.—This Bill Is Trying To Stop Them

Brex Has Amassed A Valuation Of $1.1 Billion In Under Two Years – Donna Fuscaldo

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Brex, the provider of a credit card for startups, has raised $125 million in venture funding, propelling the company into unicorn status with a $1.1 billion valuation. Earlier Friday the San Francisco-based startup announced it closed a $125 million Series C round of funding with Greenoaks Capital and DST Global leading the investment round. This comes on the heels of $50 million raised in June. Since changing course a little more than a year-and-a-half ago, Brex has been able to amass a valuation of more than $1 billion…….

Read more: https://www.forbes.com/sites/donnafuscaldo/2018/10/05/brex-has-amassed-a-valuation-of-1-1-billion-in-under-two-years/#47f0025b65a1

 

 

 

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