For years, startups have been encouraged to grow at all costs. That hasn't always turned out so well, and founders are feeling pressure for the first time in a long time to do a better job of keeping track of their spending -- and their return on investment.
Enter Pepper, an LA-based company that has sealed up $5.6 million in seed funding from Upfront Ventures, Lerer Hippeau and Manta Ray Ventures to help direct-to-consumer startups, along with other digitally native businesses, do just that.
It says it can help them better predict and understand how every investment they make is impacting the future health of their business.
Started by a clutch of Snap alums -- five of the company's six founders logged time at the social media company -- they say that marketing spend will be a big part of they're looking at, but Pepper will also analyze other areas where spending could be smarter and more effective, from salaries to office space to travel and entertainment. All "functionally impact a business’s all-in customer acquisition costs," says Pepper's CEO, James Borow.
What Pepper will offer specifically, or how it will differ from other financial analytics platforms, is right now impossible to say. Borrow -- who previously led Snap’s revenue programs and, before that, sold a social ad platform for $50 million -- isn't ready to share many details about how Pepper works. What he does say is that it will remain free when it launches in beta in the first quarter (you can sign up for a waitlist here), that privacy was designed into "its core" and that it will be rolling out premium paid-for features as 2020 gets underway.
It's also worth noting that Pepper came together thanks in part to another company that TechCrunch featured earlier this year called Forge Platform -- a company that was developing a new toolkit for distributed applications, was advised by Borow and that was founded by his former Snap colleagues Chris Lorenz and Geoffrey Anderson.
As Borow tells it, he knew the two were working on complex analytics tools, and when he began working on the idea for Pepper, he recognized that he'd need a strong analytics team, so they joined forces.
They also combined funding. Indeed, $1 million of the Pepper's $5.6 million in seed funding is money that Forge had raised from Upfront and Manta Ray, both of which have more recently plugged more money into Pepper.
Borow is also quick to note that beyond the Snap employees who've launched the company, there are numerous former and current Snap employees who've either invested in or are advising Pepper. Among these is Imran Khan, Snap's former chief strategy officer; Jeff Lucas, its former head of global sales; Omar Hasan, its former global head of sales finance; Dante DiCicco, its current head of international expansion; and Cristina Grace Borow, who formerly focused on brand partnerships for Snap and is also James Borow's wife.
"It's very Snap heavy," says Borow, because people are "bullish" about what Borow and his co-founders built across their different disciplines at the company.
Snap he adds, has "very deep talent pool."
Others of Pepper's co-founders from Snap include its general counsel, Sean Friedland, who previously led Snap's monetization legal efforts; and Daniel Druger, who previously headed up Snap's revenue partnerships team (general counsel). Meanwhile, before setting off on their own to create Forge Platform, Lorenz and Anderson had worked as a product lead and an engineer lead, respectively, at Snap.
Pictured above, left to right: Chris Lorenz, Daniel Druger, Geoff Anderson, Sean Friedland, Soraya Belhadj Aissa, James Borow and Spencer Anderson