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Leveraging R&D Tax Credits: Boast.ai Inks $100M To Front Tax Credits

The company is adding cash advances on tax credits and subsidies to its line of offerings.

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Boast.ai, a tool to automate R&D tax credit-based financing for startups, has secured a $100 million credit facility from Brevet Capital to provide cash advances on tax credits and subsidies.

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Keeping track of R&D tax credits is manual, cumbersome and time-consuming, and companies typically don’t note which employee did what and for how long, Boast.ai co-founder and President Lloyed Lobo told Crunchbase News. In 2019, more than an estimated $18 billion in R&D credits were reported by businesses, according to financial advisory services firm BDO.

“Companies incur R&D expenses throughout the year, but don’t see financial benefits for 16 months or more because they can’t submit for the credits until they file taxes,” Lobo said. “We are automating the collection of data to identify, categorize and time-track eligible projects, which gives an estimate of how much time was spent in R&D. You leverage your R&D to grow without giving up equity.”

The $100 million credit facility will enable Boast.ai to give money to companies so they don’t have to wait for the tax credits. In return, the borrowing company pays back the credits with interest.

Rather than having to pay several times a year to use the platform and return the credits, Boast.ai will create one fee the company will pay that encompasses everything. That fee will typically be lower than taking a loan or paying an accounting firm to compile the data, Lobo said.

The new funding follows a $23 million Series A round of funding in December, led by Radian Capital, bringing the company’s total funding to $123 million since its inception in 2012, according to Crunchbase data. Prior to that, the company was bootstrapped, Lobo said.

Douglas Monticciolo, co-founder and CEO of Brevet Capital, said in a written statement that R&D tax credits are an “untapped resource for companies looking to invest in and accelerate innovation.”

“R&D tax credits are a valuable form of capital — but the delays can be extremely challenging for early-stage companies,” Monticciolo said. “Boast.ai’s AI-powered financing platform eliminates those delays and allows startups to focus on creating new solutions and products while immediately reaping the benefits of their hard-earned R&D efforts.”

Boast.ai says it has worked with more than 1,000 companies to recover R&D costs from the U.S. and Canadian governments, streamlining the process and reducing the risk of costly audits.

The company says it has doubled its revenue year over year. If all of its customers use Boast.ai’s new cash advance offering, Lobo expects to exhaust the $100 million this year. He hopes to be able to extend the facility to $500 million.

“The next steps are scaling and growing,” Lobo added. “We are almost going to triple operations in the next little while. Our goal is to get to 5,000 customers, and that will take us to $100 million in revenue.”

Illustration: Li-Anne Dias

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Source: https://news.crunchbase.com/news/leveraging-rd-tax-credits-boast-ai-inks-100m-to-front-tax-credits/

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The Briefing: (2-26-21)

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

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Here’s what you need to know today in startup and venture news, updated by the Crunchbase News staff throughout the day to keep you in the know.

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Brandwatch acquired by Cision for $450M

Brighton, UK-based Brandwatch, a provider of online consumer intelligence, with a focus on social media, announced that it will be acquired by Cision, a provider of social media management and marketing tools.

Under terms of the agreement, Chicago-based Cision, a publicly traded company, will pay $450 million for Brandwatch, with the deal expected to close in the second quarter of this year.

Founded in 2005, Brandwatch previously raised at least $64.7 million in known venture funding, per Crunchbase data.

— Joanna Glasner

Bessemer closes on $3.3B across two new funds

Bessemer Venture Partners is the latest longstanding VC firm to close on massive new funds.

The firm announced that it has raised $3.3 billion across two new funds. The first, BVP XI, is a flagship fund that will focus on early-stage companies spanning across enterprise, consumer, healthcare, and frontier technologies. The second, its $825 million Century II fund, is designed for growth-stage companies.

Founded 35 years ago, Bessemer today has a leadership team of 21 partners and over 45 investors, advisors and platform operators, with a presence in San Francisco, Silicon Valley, Seattle, Boston, New York, London, Tel Aviv, Bangalore, and Beijing.

— Joanna Glasner

Tech news

Airbnb posts steep loss in first post-IPO earnings report: Airbnb reported a $3.89 billion loss in first quarterly report since its IPO. The company attributed much of the loss to costs stemming from its public offering. Revenue, meanwhile, came in at $859 million for the fourth quarter, down 22 percent year-over-year as the pandemic disrupted demand for travel and accommodations.

— Joanna Glasner

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Founded in 2005, Brandwatch previously raised at least $64.7 million in known venture funding, per Crunchbase data.

Source: https://news.crunchbase.com/news/briefing-2-26-21/

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The Briefing: (2-24-21)

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

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Here’s what you need to know today in startup and venture news, updated by the Crunchbase News staff throughout the day to keep you in the know.

Subscribe to the Crunchbase Daily

Roblox direct listing debut planned for March 10

Roblox, the online game and game creation platform, is back on track for a public market debut, after delaying plans for its public offering last year. The company is expected to make is market debut March 10.

San Mateo, California-based Roblox had originally planned for a traditional public offering, but has opted instead to go public via a direct listing. The decision was motivated in part by concerns that giant first-day pops by companies like Airbnb and DoorDash made it hard to settle on the appropriate initial offering price for shares, the Wall Street Journal reports.

Founded in 2004, Roblox has previously raised at least $856 million in known private funding, per Crunchbase data. Its last private valuation, as of January was reportedly around $29.5 billion.

— Joanna Glasner

Joby Aviation to go public via SPAC

Joby Aviation, a Santa Cruz, California-based company developing electric aircraft, announced plans to go public on the New York Stock Exchange through a merger with a SPAC called Reinvent Technology Partners.

The deal includes $910 million of fully committed funding from multiple institutional investors as well as Uber, a strategic backer. Under terms of the agreement, venture capitalist Reid Hoffman, co-founder of LinkedIn and a lead director of Reinvent Technology Partners, will join Joby’s board of directors.

Founded in 2009, Joby has previously raised at least $796 million in known funding, per Crunchbase data.

— Joanna Glasner

Funding Rounds

Truvian raises over $105M for blood testing system: San Diego-based Truvian Sciences announced the close of more than $105 million in an oversubscribed Series C financing round led by TYH Ventures, Glen Tullman of 7wireVentures, and Wittington Ventures. The funds will go toward development of Truvian’s automated benchtop blood testing system.

— Joanna Glasner

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Source: https://news.crunchbase.com/news/briefing-2-24-21/

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Briefing: Toast Said To Prep IPO, Oscar Health Sets IPO Price Range, And More

Crunchbase News’ top picks of the news to stay current in the VC and startup world.

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Here’s what you need to know today in startup and venture news, updated by the Crunchbase News staff throughout the day to keep you in the know.

Subscribe to the Crunchbase Daily

Restaurant software unicorn Toast eyes IPO this year

Boston-based Toast, a provider of software for restaurant management, is in talks with underwriters about a potential IPO later this year, according a report in The Wall Street Journal citing unnamed sources.

Founded in 2011, Toast has raised $902 million in venture funding to date, per Crunchbase data, including a $400 million Series F round closed a year ago.

Toast is reportedly seeking a valuation of around $20 billion for its public offering, and has tapped Goldman Sachs and JPMorgan as potential underwriters. In its last funding round a year ago, the company secured a valuation of nearly $5 billion.

— Joanna Glasner

Oscar Health sets IPO price range

Health insurance company Oscar Health intends to offer 31 million shares, priced between $32 and $34 each, to raise as much as $1.05 billion in its initial public offering, according to a regulatory filing on Monday.

Oscar filed its S-1 registration document with the U.S. Securities and Exchange Commission on Feb. 5. The company reported more than $488 million in revenue in 2019, up by around 5 percent from about $463 million in 2018.

Its losses also shrunk in that period, from nearly $406 million in 2018 to around $261 million in 2019. The company has approximately 529,000 members across 18 states.

Oscar’s health insurance model includes free virtual care appointments and a program for Medicare-eligible adults.

The company, which was co-founded by Josh Kushner, founder of Thrive Capital, raised more than $1.6 billion in funding from investors including Founders Fund, Thrive Capital, CapitalG and Fidelity.

It is estimated that Oscar’s fully diluted valuation will be approximately $8 billion, Reuters reported.

— Christine Hall

Parallel to public via SPAC

Multi-state cannabis operator Parallel announced Monday it is going public via a merger with special purpose acquisition corporation Ceres Acquisition Corp., backed by entertainment entrepreneur Scott “Scooter” Braun, in a deal that values Atlanta-based Parallel at $1.884 billion.

SPACs, also known as blank-check companies, raise money in an initial public offering and then have two years to acquire a business or businesses.

The Parallel/Ceres transaction is expected to close in the summer, according to the company. At that time, Parallel’s chairman and CEO William “Beau” Wrigley Jr. will remain in the role.

The new company will have pro forma cash on hand of $430 million at close and is expected to generate $447 million in revenue in 2021. It intends to expand its cultivation and production in the U.S.

Since being founded in 2014, Parallel has raised a total of $355.7 million in known venture-backed funding, according to Crunchbase data. It most recently raised $100 million in Series D funding in 2019, led by Edward Brown.

— Christine Hall

Funding rounds

Ageras raises $73M for accounting tools: Copenhagen-based Ageras, an online platform for businesses to find accounting services, raised $73 million in fresh financing from Lugard Road Capital. Founded in 2012, Ageras sold a majority stake to Investcorp in 2017.

— Joanna Glasner

Orka lands $40.7M for shift worker platform: Manchester, U.K.-based Orka Technology Group, a provider of online tools to help with onboarding of hourly shift workers, including an option to withdraw money just after it is earned, raised £29 million ($40.7 million) in a mixture of debt financing from Sonovate and equity funding from the British Business Bank and other backers.

— Joanna Glasner

Fintech

EquityBee banks $20M: EquityBee, which helps startup employees get capital to exercise their stock options before they expire by linking them to investors, raised a $20 million Series A financing round, led by existing investor Group 11, to make additional hires across all departments and expand product offerings. The round brings the Palo Alto-based company’s total funding to more than $28 million, which includes a $6.6 million seed round in 2020, also led by Group 11. In addition to the stock options, EquityBee posts a quarterly pre-IPO “wish list” of companies its investors want to see have a liquidity event soon.

— Christine Hall

Babytech

Nanit inks $25M Series C: Nanit, developing smart baby monitor and sleep tracker devices, closed a $25 million Series C funding round led by new investor GV. The new round brings the New York-based company’s total capital raised to $75 million. Nanit last raised a $21 million Series B in 2020, according to Crunchbase data. Nanit’s proprietary line of Breathing Wear apparel integrates with the Nanit camera to enable parents to safely monitor their baby’s breathing motion without sensors or wires. In 2020, the company doubled its user base and yielded year over year revenue growth of more than 130 percent, the company said. Years ago, babytech was considered a niche market that few investors understood or wanted to get into. Today, anyone considering adding to their family can find technology for everything from fertility to potty training and beyond. Though the market is big, experts say there is still not enough investment in startups focused on the space. Forbes estimated in 2019 that the U.S. babytech market size was about $46 billion, and reported that investors had pumped some $500 million in funding into companies within the sector since 2013. One of the success stories is baby health monitor Owlet Baby Care, which announced on Feb. 16 its plans to merge with Sandbridge Acquisition Corp., a special purpose acquisition company backed by Sandbridge Capital and PIMCO private funds. Owlet raised a total of $48 million in known venture capital investments since the company was founded in 2013, according to Crunchbase data.

— Christine Hall

Illustration: Dom Guzman

Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.

Founded in 2011, Toast has raised $902 million in venture funding to date, per Crunchbase data, including a $400 million Series F round closed a year ago.

Source: https://news.crunchbase.com/news/briefing-2-22-21/

briefing:-toast-said-to-prep-ipo,-oscar-health-sets-ipo-price-range,-and-more

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