Three-year-old Premise, an economic data tracking platform, has raised $50 million in Series C funding from earlier backer Social + Capital Partnership and new investor Valor Equity Partners, which pitched in $35 million.
Valor’s Antonio Gracias, who is also a director at Tesla and SpaceX, is joining the board. He joins the company’s earlier board members Chamath Palihapitiya, who founded Social + Capital; Larry Summers, the former Treasury secretary; and investor Karim Farris of Google Ventures.
It’s easy to understand Premise’s appeal. The 40-person, San Francisco-based SaaS company does something that’s somewhat singular: it uses 25,000 “contributors” in 32 countries and tasks them with photographing and otherwise documenting economic data in order to provide customers like the World Bank with highly valuable information.
Just how extensive is the impact of government-driven food rationing in Venezuela? Premise has boots on the ground who will show up at grocery stores and send back information that Premise’s data analysts then parse. In Yemen, where there’s an emerging famine, how much of the food aid being dropped into the country is reaching its intended destination? Because of its recruits, Premise knows more, and faster, than the relief organizations that are becoming some of its customers. (Others of its customers include Bloomberg and Standard Chartered Bank.)
Yesterday, we talked with founder David Soloff, who previously cofounded the privately held ad tech company Metamarkets, to learn more. Our conversation has been edited for length.
TC: You have 40 employees on your core team. What do they do?
DS: About one-third is core engineering [at work on] platform, app development, data science; a third is our network team, meaning those folks building out all the infrastructure and managing contributors on the network; then a third [handles] growth, business, and sales operations. In fact, we just hired Joanna Lee Shevelenko, who spent nine years at Facebook as one of its growth leaders, as our VP of Growth.
TC: How does this $50 million change those numbers?
DS: We’re aiming to have [employees in the] low 60s by year end, then in the low triple digits by the end of next year. We’re a pretty selective group.
TC: Can you break down for us who your 25,000-person contributor network is comprised of? At one point, it was largely university students, correct?
DS: A portion of it is university students. Others are supplementing their income, like domestic workers, bank tellers, drivers, shopkeepers. It’s a pretty big demographic.
TC: And how do you reach these people?
DS: The growth playbook is really a Chamath product; it’s something that his firm has been phenomenal in getting us to understand. Our core approach in a country is through its student communities; then we start a referral program that really fills up the funnel with folks from all walks of life. [More specifically], people will get introduced to us through an ad or a direct relationship or a link through a WhatsApp or Facebook post. They’ll enter information into a form, [after which] the app calibrates whether the person’s camera is high res enough and if their GPS is working [and so forth]. If so, we get payment credentials and, after we start ranking them based on what we need, walk them through a series of paid tasks. Our power users meanwhile start receiving referral bonuses to bring in more qualified users.
TC: Do you assign them specific tasks or make sense of whatever they provide you or both?
DS: It’s extremely granular – it’s the ad-targeting model. We know what our customers, like the World Bank or the United Nations or the Gates Foundation, need, and all of our tasks are place-based. When it comes to electrification, for example, we have an idea of what blocks we need to cover. Or we’ll say, “Go to this store and tell us if the low stock of a product continues,” because that might be indicative of a supply issue, or a pre-indicator that people won’t have enough to eat.
TC: You have these freelancers working for you in 32 countries — some bigger, some larger. How do you decide how many people to recruit in a certain place?
DS: If we’re trying to cover every single venue in a city and every neighborhood, obviously network coverage will be way denser. For Lagos, in Nigeria, which is quite a large city, there’s a basket of goods and service that we’re tracking, and we have 500 people spread across two cities. A big part of how we work with customers is spending time up front defining what a sample space looks like, the number of locations we’ll need to visit, the number of measurements we’ll need to take, how many observations we’ll need and [thus] how many contributors.
TC: Do you maintain a relationship with your contractors or do you enlist them mostly on a project basis?
DS: Our whole model is setting up and committing to a [place]. It doesn’t make economic sense to deploy our technology, only to pull up the stakes afterward. Once we’re in, we’re in.
TC: How committed is your network to you?
DS: We have a 95 percent retention rate. Any separation typically happens because our anti-fraud team has identified some questionable submissions. If you violate our terms of service, we’ll either suspend or terminate your account.
TC: How much do you pay them?
DS: We follow a cost-per-capture model that’s a function of supply and demand. Some observations are easy to find and there are lots of opportunities to make them. Then there are others that require more time to locate, meaning they are geographically specific in a region that doesn’t have a lot of coverage. The range right now is 6 to 7 cents [per observation] at the low end and 30 to 40 cents or more [for harder-to-find information].
People typically spend between six and eight hours a week [contributing information to the platform] and average monthly earnings are in the $100 to $120 range.
Over the last year-and-a-half, we’ve paid out close to $3 million, and that will significantly ramp up going forward.