Philly’s Crossbeam — ‘Tinder for business’ — lands $76M from Silicon Valley’s Andreesen
Buoyed by a surge in Silicon Valley investment, veteran Philadelphia software pro Bob Moore is ready to double staff
It’s 10 years since venture capitalist Marc Andreessen infamously proclaimed that “software is eating the world,” and that the U.S. needs to catch up. His Silicon Valley firm, Andreessen Horowitz, has by now invested $20 billion in hundreds more software-powered start-ups, including Twitter, Skype, Lyft, and Coinbase.
Its latest pick is Crossbeam, a Philadelphia firm that built a software engine confidentially matching software providers with tech-company users. It’s similar to the job app LinkedIn, or the dating app Tinder, but for fast-moving digital companies that need to find the right contractors and pursue the best strategies.
Andreessen Horowitz is leading a $76 million investment in Crossbeam, a three-year-old, 68-employee Center City start-up that sets up its 5,000 corporate clients to tech providers, for yearly fees that range into the six figures.
This happened fast: “We all got locked in our basements by the pandemic and had to find something to do. So we built a big company,” cracked Robert Moore, the Glassboro native and Princeton graduate, whose team has a good record of launching successful companies. Moore cofounded Crossbeam with Francis “Buck” Ryan, his past partner in business-data platform RJMetrics (sold to $23 million-plus to Magneto in 2016) and data-pipeline developer Stitch (sold to Talend for $60 million two years later).
Users on Crossbeam have more than doubled since January, Moore said. The firm plans to double its staff, adding more engineers, salespeople, and bosses.
Half the staff is based in the Philadelphia area, but like other pandemic-era firms “we’re hiring everywhere,” Moore said.
Customers include construction-software leader Procore Technologies, push-alert and targeted-text-message developer Twilio, and digital-marketer Braze, among many digital-services companies that need specialized tech help fast.
Andreessen Horowitz partners Sarah Wang and Jennifer Li are managing the investment, which also includes previous Crossbeam investors, Philadelphia-based First Round Capital and New York-based FirstMark Capital, among others.
Companies’ software needs are moving away from “SAP and Oracle domination” by big, expensive software providers in search of “partnerships” to collect solid sales leads and land more clients faster, Wang and Li said in a statement introducing Crossbeam Andreesen Horowitz partners. “High-growth companies are deploying Crossbeam” and its deal-making network, which is pioneering a new “co-selling and cross-marketing” industry.
Business-software makers Salesforce, HubSpot and Kota are also investing in the deal.
Previous Andreessen Horowitz investments in the region include digital retail billionaire Michael Rubin’s Fanatics, the team-gear company, and Penn immunologist/oncologist Carl June’s company, Tmunity Therapeutics.
It’s not just a hiring hall. Crossbeam also finds fast-growing clients upgrades to software platforms such as Salesforce, and target customers for services as they develop. “We help them make data-driven selections, instead of flying blind,” Moore said.
Moore is aware that his firm is cashing in on the bull market in stocks and ultra low interest rates. Those factors have drawn hedge fund and private equity firms, and their rich state-pension and university-endowment clients, into cell-and-gene therapy, autonomous-vehicle and business-software startups recently, among others.
The money is piling up even as large corporations that once invested heavily in venture capital — including pioneers GlaxoSmithKline, Comcast and DuPont — are pulling out, dismayed by the challenges they see sustaining long-term profits in such a specialized, fast-inflating market.
“It’s wild,” Moore said. “There are more parties in venture capital than ever before. Very wealthy individuals. Hedge funds. Private-equity funds. A lot of the dollars ultimately come from university endowments and state pension funds.”
Doesn’t that sound like a bubble, like the one that popped in 2001 when Internet stocks tumbled? Maybe for speculative biotech or autonomous-vehicle companies that are going public with no sales. But business-software firms with paying customers and “compelling, tremendous growth” are a better bet, Moore insisted. “This money is looking at growth.”
Andreessen Horowitz has more than doubled its investment staff, to 70 people, since 2018, to find more deals, according to The Information, which calls the venture giant a would-be “JPMorgan of venture capital.”
“Andreessen has their hands in every cookie jar,” says Moore. The firm considered investing in one of Crossbeam’s previous begging trips (it has raised more than $20 million before this latest round), “but the stars didn’t align,” he added. “They knew we could raise money. They wanted to see if we could be really big and create orders of magnitude of value.”
He said firms including Andreessen now employ small armies of researchers who constantly talk to tech companies about new or innovative firms they need to buy digital services from.
Moore was busy at home during the pandemic, too. He and his wife have had two children in less than two years. The family has moved out of the Graduate Hospital neighborhood he called home during his earlier start-ups, and returned to South Jersey, which he says is a shorter commute, via PATCO, to Crossbeam’s Walnut Street offices.
He said Philadelphia is now firmly on Silicon Valley’s map, more than when he was trying to interest investors in his previous companies.
“We used to have to spend a quarter of each meeting explaining why it’s ok to be in Philadelphia with its amazing universities,” Moore recounted. “There’s now a Philadelphia narrative -- look at GoPuff, look at dbt (the former Fishtown Analytics), look at [search engine] DuckDuckGo,” all ‘unicorns’ worth around $1 billion (or in Gopuff’s case $15 billion) as of their last investment round.
“Their founders each had a vision to build something large here, and proved it,” Moore concluded. “San Francisco will continue to be the epicenter of the tech universe. But cities like Philadelphia, Baltimore, and Pittsburgh, are making relative gains. This is a great place and this is a great time to build a tech company.”