Technology

The journey new users go through when using your product directly affects how the product is evaluated and how it is perceived. The business model you choose strongly influences the entire funnel, enabling or preventing you from engaging certain types of users.

This article will examine whether the freemium model is right for your business and how it compares to two other models: free trial and sales driven.

The three key models: freemium, free trial and sales-led

Conventional wisdom says that you should choose one model and stick with it. The following diagram shows a choice between the three typical models: Freemium, free trial and sales-led.

Image Credits: Konstantin Valiotti

Freemium models allow you to target a wide audience and retain them in your product even if users do not have a budget for the solution. The core idea is to create value for the end user and turn the resulting credibility into revenue by selling them something more advanced.

The free-trial model creates a time limit and positions the product in a way that shows off its full value, but requires a decision at the end of the trial period. Users can no longer extract value from the product on a particular day and will have to judge whether the perceived value outweighs the purchase cost.

The sales-led model routes all new inquiries to a sales representative. The first impression of the product and the anchors related to pricing are set in a conversation. The sales-led model introduces friction at the top of the funnel by prompting users to have a conversation, but it aims to significantly simplify the path to conversion whereas a full self-service experience would have too much friction.

Given the obvious differences between these models, choosing one should be fairly straightforward. For example, you should choose the sales-oriented model if you work in a market with big deal sizes and complex products.

However, current market conditions do not support having just a single model. Asana offers a free plan, a trial of the paid plan and a “Contact Sales” motion. At HubSpot, you can use the free products or talk to sales about advanced product packages. Calendly has a free plan, a trial, and a “Contact Sales” motion. The list goes on.

When to introduce a freemium plan

Introducing freemium is an investment that you should evaluate in the same way as other projects. It requires (sometimes significant) engineering investment, marketing support and organizational changes in sales, finance and operations.

There are three good reasons to introduce a freemium model:

1. Retaining an acquired audience in case they can’t upgrade right away.
2. Expanding product-market fit.
3. Improving market share by hitting competition.

Retaining an acquired audience

When you have a free trial, your newly acquired audience will have to decide if they want to pay right after the trial expires. There will be an audience that loves your product and has the budget to pay, and they will do so unless a competing offer is more attractive to them.

However, there will always be many users who are either skeptical about the product itself or do not have the budget to pay. When faced with the dreaded paywall, they will go through all reasons to postpone the decision. The longer they hesitate, the less likely they will buy the solution.

Netflix announced today that its “One Piece” live-action series would be available to stream sometime in 2023.

The company tweeted the announcement alongside a new poster of the upcoming series. The poster shows the main character, Monkey D. Luffy (played by Iñaki Godoy), with his back turned.

A specific release date for the live-action series has yet to be revealed. It was first announced in January 2020. Other cast members include Emily Rudd as Nami, Mackenyu Arata as Roronoa Zoro, Jacob Gibson as Usopp, Peter Gadiot as Shanks, Morgan Davies as Koby, Vincent Regan as Garp, and Taz Skylar as Vinsmoke Sanji.

“One Piece” is centered around Luffy, an impulsive and optimistic teenager that has the power to make his body act like rubber, allowing him to bounce, twist, and bend away from his enemies. Luffy is on a journey to find a mythical treasure called the One Piece, so he can become the King of the Pirates.

Based on the long-running pirate manga and anime, Netflix’s “One Piece” is an adaptation that millions of viewers will likely be excited to watch. “One Piece” is arguably the most popular manga series, with over 500 million copies sold. For comparison, “Dragon Ball” has sold more than 300 million copies.

However, many fans on Twitter are skeptical that Netflix can pull off a live-action anime. “One Piece” is being produced by Tomorrow Studios, the same company that produced Netflix’s “Cowboy Bebop” live-action series, which was canceled after one season. Netflix also released a “Death Note” movie in 2017, which was also considered a flop.

In general, live-action anime shows and movies are widely disliked by fans, whether it be because the original story gets ruined or the adaptation fails to bring the characters to life. Netflix likely feels the pressure to do right by this fan-favorite anime.

Two quantum-adjacent technologies — quantum sensing (QS) and quantum communication (Qcomm) — are as important as quantum computing hardware itself since they help make quantum computers function more accurately. 

A Sydney-based startup called Q-CTRL has built quantum-sensing software that helps reduce errors on quantum computers. Today, the company announced that it has raised another $27.4 million in funding.

The Series B extension comes nearly 14 months after the startup raised its $25 million Series B in November 2021. CEO of Q-CTRL, Michael Biercuk, told TechCrunch the startup made major discoveries and demonstrations of its technology almost immediately after its last raise.

“We had spent almost four years building core capabilities and then finally put them all together to show how we could improve the performance of an entire quantum algorithm beyond just the individual components of the hardware,” Biercuk told TechCrunch. “By March 2022, we had achieved up to approximately 9000 times improvement in the likelihood that a quantum algorithm executed using our tools would give the correct answer.” 

Biercuk explained this discovery was one of many benchmarks that help prove the startup could transform the performance of quantum computers, delivering enhanced utility to end users. 

The significant breakthroughs also led to growth in sales. Q-CTRL’s sales bookings grew three times to over $15 million in CY 2022, Biercuk said. The startup has more than 8,000 users including government contracts with the U.S., defense agencies in Australia, and quantum computing companies like Rigetti, IonQ, IBM, Atom Computing, Alice & Bob, Nord Quantique and Pasqal, among others. Universities and national labs also use Q-CTRL’s tools; many corporations (EY, KPMG, Capgemini, Quanscient, Xerox PARC, and Classiq) have sealed commercial partnership deals with Q-CTRL. 

The outfit has four products: Black Opal, Boulder Opal, Fire Opal and Open Controls. Last October, Q-CTRL, which focused on making quantum computers useful (sooner), launched a learning platform, Black Opal Enterprise, designed to help corporations and organizations understand quantum computing to build quantum-ready teams. That was followed by the release of Black Opal in April 2022 to help individuals learn quantum computing . 

Salesforce Ventures, Alumni Ventures, ICM Allectus, Mindrock Capital, Bill Lightfoot (a former partner at General Dynamics) and John Eales (an Australian business leader and global rugby legend) participated in the latest round. Previous investors include Airbus Ventures, Data Collective, Horizons, Main Sequence Ventures and Ridgeline Partners. 

The company did not provide valuation information but says it will use the proceeds to continue developing its quantum technology, concentrating on product engineering, sales and marketing capacity. It also plans to grow its team from 80 to approximately 120 this year across Sydney, Los Angeles and Berlin offices. 

Applications of quantum sensors range from bioimaging, spectroscopy, navigation that provides high-accuracy GPS, environmental monitoring (volcanic disruption prediction, CO2 emission measurement) and more, per a McKinsey report. 

“Hiring teams of specialists can be risky and expensive. Q-CTRL’s frictionless quantum infrastructure software has a shallow learning curve and allows CIOs and CTOs to become quantum ready today, reducing enterprise risk,” said Heather West, IDC research manager, in a statement. “Q-CTRL anticipates that with its software, enterprises will be able to leverage the skills of their current IT developers to easily develop, optimize and execute quantum algorithms and obtain high levels of performance on any given hardware at a low net cost.” 

“Q-CTRL’s technology stands head-and-shoulders above the rest of the industry in tackling the most foundational challenge in quantum computing,” said Robert Keith, managing director of Salesforce Ventures. “Q-CTRL’s products are essential for enterprise adoption of quantum computing, and their use of AI is delivering critical insights across hardware platforms that no one else can match.” 

Amazon is going to start charging delivery fees for Fresh grocery orders that are under $150, the company said in an email to Prime members. Prior to this change, Amazon offered Prime members free grocery deliveries on orders above $35. The company says the move will keep prices low on its services.

With this new policy, Amazon will charge a $3.95 delivery fee for orders between $100-$150, a $6.95 fee for orders between $50-$100, and $9.95 for orders under $50. The new fees, which will be charged on top of the $140 annual Prime membership, will go into effect starting February 28.

“This service fee will help keep prices low in our online and physical grocery stores as we better cover grocery delivery costs and continue to enable offering a consistent, fast, and high-quality delivery experience,” Amazon said in the email to Prime members.

The company says it will continue to offer two-hour delivery windows for all orders, and that customers in some areas will be able to select a longer, six hour delivery window for a reduced fee. Amazon also plans on testing and adding more delivery options as it continues evolving its grocery service.

People have taken to social media to point out how significant the price jump is when qualifying for free delivery. Given the current economic outlook, not everyone will be able to afford the new $150 minimum. In addition, some people have also noted that Amazon Fresh became their only option for grocery shopping using SNAP/EBT during the pandemic, and that the new fees will be an issue for them, especially since they will be unable to use their EBT cards to cover the delivery fee.

Amazon operates dozens of Fresh grocery stores across the United States and expanded its push into the grocery space by acquiring Whole Foods in 2017. In 2021, the company added a $10 service fee for Whole Foods delivery orders, which were previously offered at no extra charge.

The decision to introduce new fees comes as Amazon has been reining in costs amid a worsening economic outlook. In the past few months, Amazon has frozen hiring in its corporate workforce, axed some parts of its business and has said it will lay off 18,000 workers.

It’s hard to develop a personal note taking habit. Many folks just resort to using a default app like Apple’s Notes app or sending something to themselves on Slack. It’s fine if you just need to jot down a note or two, but it becomes hard to organize and search for them later. Stashpad is working on a solution for that issue — especially for developers and product managers.

Stashpad is an app that runs on all desktop platforms (Intel and M1 Mac, Windows and Linux). When you first launch the application, it has a minimal learning curve for getting started — you can just start typing in notes. You can put these notes under one Stack for a project  — think of this as creating a folder. There is also an option of creating a sub-stack (no, not that one) under a folder.

All stacks open up as tabs on top of the app, and there is an option of pinning tabs for easy access. The app also has a “Sticky” mode, which makes it easier to take notes during a video call.

Image Credits: Stashpad

While the basic structure is simple, the app gives users a plethora of formatting options including code. And if you are an advanced user, you can remember and use keyboard shortcuts accessible through a command bar for anything from navigating through the app to creating or moving notes. Plenty of modern tools like SigmaOS, the Arc browser, and Vimcal and Cron calendar apps follow the same philosophy.

Stashpad has kept the notetaking part simple even though there’s a lot of flexibility when it comes to organizing and structuring notes. For instance, users can easily build a to-do list but won’t get features like reminders for that. So they will need to integrate Stashpad into their daily workflow to make the most out of it.

Why the founders made another note-taking app?

The company’s co-founders Cara Borenstein and Theo Marin previously worked at Twilio and Nextdoor respectively. The founders, who met at Columbia University while studying computer science, said that while working at their job they realized that a lot of developers rely on personal notepads for listing tasks and getting the work done. So they decided to build Stashpad.

“At our jobs, we noticed that there were some knowledge-sharing challenges within teams and set out to build a better wiki. We came to realize that challenges with the wiki are more of a people challenge than a tech challenge when it comes to creating the right incentives to keep the wiki up-to-date. We realized that the personal notepad, much more than the wiki, is key to how devs like us get stuff done,” they told TechCrunch over an email.

Image Credits: Stashpad

While the company counts tools like Notion, Evernote and Obsidian as competitors, it says that these apps are focused more on knowledge management while Stashpad is concentrating on note-taking for working memory.

“In some senses, we’re complementary to these tools. However, it’s common to use these tools for both working memory and long-term knowledge management. We believe that the working memory use case deserves its own, purpose-built tool. By designing for this use-case, we’re better able to prioritize frictionless capture while helping you keep different chains of thought compartmentalized,” they said.

Stashpad is free for personal usage, but if you want to use it across devices along with the mobile app you have to pay $8 per month. The company also working on providing a commercial license for teams at $50 per year. The startup first launched its desktop app in August, and to date, it has users from companies like AWS, Coinbase, Atlassian, and Spotify.

Image Credits: Stashpad

Stashpad is launching its iOS app today to go with the desktop client. The app lets you sync 50 notes on the free tier and unlimited notes on the paid tier. The company has designed the mobile app in such a way that it helps people take quick notes by placing the cursor in the writing box directly. The founder said that they wanted to keep the interface in line with the desktop design and give people the experience of “DMing themselves.”

The road ahead

The company raised $1.8 million last year from Alex Solomon (CTO at PagerDuty), Will Larson (CTO at Calm), operators at Postman, Loom, Webflow, and the co-founders’ former colleagues at Twilio and Nextdoor. As the company participated in Techstars in 2021, its total raise to date is $2 million.

Stashpad is planning to work on making notes collaborative so users can share some of their notes for a group brainstorming session. However, the founders said at the core, they still want the app to be a personal notetaker. The startup plans to release an Android app this quarter along with support for images in notes. In the future, the company also plans to release an API to make the experience more customizable for developers.

PhonePe clocked a revenue of $234.3 million in the first nine months of 2022, the most valuable Indian fintech startup has disclosed in a filing.

The nine-month financials marks a jump from the $201.6 million revenue that the Bengaluru-headquartered generated in the 12-month financial year period ending in March last year.

PhonePe, which is valued at $12 billion, has projected a revenue of $325 million for the calendar year 2022 and $504 million for 2023, according to a valuation report prepared by the auditing firm KPMG and filed by PhonePe. The auditing firm’s estimates relied on information provided by the PhonePe management, the document said.

The startup, backed by Walmart, doesn’t expect to turn EBIDTA positive, a key profitability metric, until the calendar year 2025, KMPG wrote in its valuation report. PhonePe’s financials and metrics from the valuation report have not been previously reported.

Image credits: PhonePe regulatory filing

At a $12 billion valuation, PhonePe is India’s most valuable fintech startup. The startup competes with Google Pay and Paytm. Paytm, which expects to reach $1 billion revenue by March this year, is currently valued at $4.1 billion.

PhonePe, to be sure, is the clear leader in the mobile payments market on UPI, a network built by a coalition of retail banks in India. UPI has become the most popular way Indians transact online, and processes over 7 billion transactions a month. Seven-year-old PhonePe commands about 40% of all these transactions.

A concern for PhonePe’s growth was Indian regulators enforcing a market cap check on each player, but the deadline for the new guidelines was extended last month and now won’t come into effect until 2025, giving PhonePe another two years of fast-growth.

Manu Jain, the executive who helped Xiaomi set up and scale business in India, has left the company, he said Monday, joining a long list of high-profile departures at the local unit that is increasingly losing market share to rivals including Samsung.

Jain, who led the India business for seven years and also held global VP role, did not say why he was leaving the firm, but he has been pitching investors ideas for an EV startup for several months, people familiar with the matter said. Jain had been telling many industry figures for several quarters about his plans to leave the venture, according to many of the people with whom he has spoken.

Xiaomi entered the Indian smartphone market in 2014. In within quarters, the firm had started to make a dent in the market, undercutting rivals Samsung, OnePlus, Oppo and Vivo with higher specs phones at more affordable price.

A few years later, Xiaomi became the top smartphone vendor in India, a crown it no longer holds.

Once a key figure in the India team, Jain grappled with a big blow after the relationship between China and India soured amid escalating geopolitical tension between the neighboring nations in 2020, people familiar with the matter said.

According to one source, Jain was supposed to be elevated to a higher global role but the firm changed its mind. Jain was also summoned by India’s Enforcement Directorate, where according to Xiaomi’s own account, he faced threats of “physical violence” in a tax dispute issue.

Amid the tension at its India unit, several key Xiaomi executives including Raghu Reddy, Xiaomi India business head, have left the firm in recent quarters.

Xiaomi did not respond to a request for comment in December. Jain did not respond to multiple requests for comment throughout last year.

“I joined the Xiaomi Group in 2014 to start its India journey. The first few years were full of ups and downs. We started as a one-person startup, working from a small little office. We were the smallest amongst the hundreds of smartphone brands, that too with limited resources and no prior relevant industry experience,” Jain said in a statement.

In his long statement Monday, Jain did not comment on Xiaomi’s dwindling market share in India and other shrinking India leadership team.

Trends indicate that a majority of businesses plan to fully adopt software as a service (SaaS) by 2025, and if the past is any indicator, that means state legislatures are working hard to capture revenue from this new sales stream.

As with many U.S. laws and regulations, tax laws regarding SaaS vary quite a bit and continue to evolve. Currently, some states consider SaaS to be software while others categorize it as a service. In addition, some states tax all services regardless of type, and more than 20 have a way to target SaaS. At least four states (New York, Pennsylvania, Texas and Washington) are aggressively pursuing SaaS. There’s also the issue of bundling — on its own, SaaS might not be taxed, but it will be when paired with hardware.

In the early days of a startup, there’s a tendency to think that the only tax worry would be an audit in the future, the likelihood of which is low. However, tax issues become a problem when you’re fundraising or facing due diligence for mergers and acquisitions. The party conducting due diligence will be focused on sales and use tax, as any liability could transfer to the buyer. We saw this with a new client recently — they hadn’t performed a risk assessment and the buyer identified almost $1 million dollars in tax liability. This reduced the purchase price significantly.

Startups think they’ll have lots of time to get to this point, but they actually need to focus on it right away. Any negligence, if identified, could exclude a company from any statute of limitations.

While no business is exempt from taxes, it’s critical for startups to understand when they’re liable for tax, and if offering a SaaS solution, how each set of local laws applies.

Determining your taxability

To identify which states you’ll owe sales taxes to, first establish your nexus by determining your physical or economical presence.

You can determine your physical nexus by examining which states you have employees, office, property or agents in. Are you “maintaining, occupying or using permanently or temporarily, directly or indirectly, an office, place of distribution, sales or sample room or place, warehouse, server, storage place or other place of business?” Or is there an “employee, representative, agent or salesperson working in the state under the authority of the company on a temporary or permanent basis?”

An economic nexus is established for sellers “not having physical presence in the state.” In this case, the state will collect sales tax from customers and remit if the seller meets a set level of sales or number of transactions in that state.

With broad definitions like these, it’s easy to see how complex taxes can become.

Marqeta has agreed to acquire two-year-old fintech infrastructure startup Power Finance for $223 million in cash, marking the first acquisition in the publicly-traded company’s 13-year history.

About one-third of the purchase price is payable over a two-year period subject to certain undisclosed conditions. And, if one undisclosed milestone in particular is met within the next 12 months, Marqeta said it will pay an additional $52 million for the startup, bringing the total acquisition price to $275 million.

Founded in early 2021 by Randy Fernando and Andrew Dust, New York-based Power Finance announced last September that it had raised $16.1 million in a seed funding round co-led by Anthemis and Fin Capital. Other backers include CRV, Restive Ventures (formerly Financial Venture Studio), Dash Fund, Plug & Play and a group of angel investors. The company at the time had also announced a $300 million credit facility.

Oakland, California-based Marqeta, which went public in 2021 and is today valued at nearly $3.7 billion, touts that it “provides a single, global, cloud-based, open API Platform for modern card issuing and transaction processing.” In other words, it provides the tools for companies — fintechs and otherwise — to provide cards, wallets and other payment mechanisms. Its customers include Block (formerly known as Square), Uber, Google, Affirm, DoorDash, JP Morgan, Citi, Goldman Sachs, Instacart and Ramp, among others.

Power’s first product is a credit card issuance program, which is designed for companies, brands and banks to offer embeddable fintech experiences, such as customized credit card programs, targeted promotions and personalized rewards, into existing mobile and web applications.

Marqeta’s main goal with the purchase is to expand and “significantly accelerate the capabilities” offered in its credit product. Specifically, the acquisition will give Marqeta customers a way to launch “a wide range” of credit products and constructs, the company said, by incorporating Power’s data science toolbox and its ability to embed experiences inside existing mobile and web applications into its own offering. Historically, Marqeta was focused on debit and prepaid cards, but in February 2021, it formally expanded into the consumer credit card space to help other brands launch credit card programs.

Once the deal closes, Power Finance CEO Randy Fernando will lead the product management of Marqeta’s credit card platform.

In a written statement, Fernando said: “Companies like ours were made possible because of the path Marqeta blazed in modern card issuing, demonstrating the possibilities in payments with flexible and modern payment infrastructure. At Power, we built a full-stack, cloud-native credit card issuance platform, and by becoming a part of Marqeta we have the ability now to bring this innovation to a much larger market at global scale.”

News of the buy comes just three days after Marqeta revealed that it had tapped Simon Khalaf to serve as its new CEO, effective January 31. Khalaf joined Marqeta in June of 2022 as its chief product officer and began leading the company’s go-to-market organization last August. Founder Jason Gardner, who has been vocal about his belief that running a public company is “foundationally different from running a private company,” will transition into an executive chairman role.

In an exclusive interview, Khalaf told TechCrunch that Marqeta “definitely felt that the Power team has built something unique and something that aligns with Marqeta’s mission and who we cater to.”

“Our approach to credit so far has been the processor, but as customers have been asking us to do a lot of things in a highly innovative way, we looked at it and said, ‘We do need to own the full stack,’ ” Khalaf said.

Rather than spend the resources to attempt to build out the technology it wanted to be able to offer its customers, Marqeta decided to explore acquisition targets. Some, Khalaf admits, were open to talks while others were not. The company ended up deciding that Power was the best fit both culturally and technologically.

Marqeta, he said, is operating under the premise that consumers increasingly want personalization.

“If you look at a credit card, not much innovation has happened to it,” Khalaf told TechCrunch. “But a lot of folks want a credit card to become alive with a credit limit that changes dynamically based on a user’s current financial situation, with rewards that change dynamically, and more importantly, that they can integrate into their e-commerce or retail workflows…That’s what Power has built.”

“Most” of Power’s nearly 30 employees will be joining Marqeta, the company said. Presently, Marqeta has nearly 1,000 employees.

Generally, Khalaf said that Marqeta has been witnessing hypergrowth but is now moving into a sustainable and profitability phase.

“We’re highly focused on sustainable, mature and predictable operating cadences for the company,” he said. “The embedded finance market is growing very fast and it’s a market we’re going to spend a lot of energy on. The way we deliver products, and have packaged them to be API first….the embedded finance space is made for us, and we’re made for them. It’s a perfect match.”

Through the acquisition, Khalaf said Marqeta hopes also to meet increasing demand from emerging, mobile-first retailers, creator marketplaces and labor marketplaces.

“We’re going to see a lot of new demand around co-brands,” he said. “Businesses want a branded card that is alive that is integrated with their properties. And we’re going to be able to serve that market better versus just issuing a piece of plastic with standard rewards.”

In November, Marqeta reported a third quarter net loss of $53.2 million, adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $13.6 million and revenue of $191.6 million – which compared to $131.5 million in the same quarter of the prior year. Meanwhile, it reported that total processing volume rose by 54% to $42 billion. Once valued at $18 billion, Marqeta has — like many other fintechs — seen its stock price and valuation drop thanks to high inflation and a rising interest rate environment. Still, the company has continued to win new customers and grow its relationships with existing ones while beating analysts’ estimates.

In appointing Khalaf as Marqeta’s new CEO, Gardner told investors that his goal was to find a leader “who would take Marqeta to the next level” after he had taken the company “from Zero to 1.”

“That meant finding a leader with experience in building and operating a global business at scale while also focusing on a path to profitability,” he added. “…Our board of directors concluded that Simon was the clear choice to be Marqeta’s next CEO. His previous CEO experience and decades of experience scaling large technology organizations such as Twilio, Verizon, Yahoo, and Novell, his product insight, and his relentless focus on customer experience, will serve us well as we look to enter the next phase of our growth.”

For his part, Khalaf said that further acquisitions were not out of the question but also would be very deliberate.

“Acquisitions is not a strategy, more of a tactic,” he told TechCrunch. “You decide which customers we want to serve, which market you want to go after and then you evaluate whether you build, buy or partner. That’s what we’re focused on right now.”

Marqeta’s acquisition is just one of several M&A deals in the fintech space so far this year.

Want more fintech news in your inbox? Sign up here.

Got a news tip or inside information about a topic we covered? We’d love to hear from you. You can reach me via Signal at 408.404.3036. Or you can drop us a note at tips@techcrunch.com. Happy to respect anonymity requests. 

Hypernative, a crypto security-focused startup, has raised $9 million in seed funding as it emerges from stealth, co-founder and CEO Gal Sagie exclusively told TechCrunch.

The funding round was led by boldstart ventures and IBI tech fund, with strategic investments from Blockdaemon, Alchemy, Borderless, CMT Digital, Nexo and angel investors. The company was started by Sagie and Dan Caspi, who’s also Hypernative’s CTO. The co-founders collectively have backgrounds in cloud infrastructure, building large-scale distributed systems and security, and have worked at places like IBM, Google and Microsoft.

“We created Hypernative early last year when we saw huge amounts of money getting stolen or phished or scammed in crypto,” Sagie said. “We saw huge gaps between tools that existed and money being invested, so we wanted to create something to help prevent [attacks].”

In September, the team launched its first product, Pre-Cog, a platform that monitors on- and off-chain data sources to predict threats before they occur. Since its launch, it has helped users save “tens of millions” of dollars, Sagie said.

The startup concentrates on “building detection early” and manually connecting its tools through customer workflows, Sagie said. Its ideal client base ranges from asset managers, hedge funds, traders and market makers interacting with crypto to blockchains and protocols, he added.

“We’re doing detection beforehand,” Sagie noted. “A lot of incidents alerted [users] within minutes or hours before an attack happened so we’ve helped prevent attacks through alerts.”

In the future, Hypernative aims to build prevention workflows that give “end-to-end systems that mitigate risk without doing anything,” Sagie added.

Even though crypto markets may be down, there’s still billions of dollars invested in the space, which makes it a target for attacks by those looking to make (and take) money quickly. In 2022, the majority of losses, or $3.77 billion, were from hacks across 134 specific incidents, according to Immunefi’s Crypto Losses 2022 report.

Last year, every quarter had a handful of multimillion-dollar losses, some bigger than others. The fourth quarter in 2022 saw the most, with $1.62 billion in total losses across 55 incidents, accounting for almost half of the total losses in the year, the report showed.

“From my experience hackers don’t sleep,” Sagie said. “They don’t care if it’s a bull market or bear market. Where there’s money and opportunities, they go.”

The crypto industry needs more tools to help prevent hacks before they transpire, so “there’s a big opportunity” to improve the space, Sagie said.

“Hackers enjoy when there’s risk and volatility in the market and leverage that,” he added. “It’s a problem we need to solve.”