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As COVID surges, what can data tell us about Airbnb’s recovery?

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This is The TechCrunch Exchange, a newsletter that goes out on Saturdays, based on the column of the same name. You can sign up for the email here.

DoorDash filed to go public on Friday, meaning we’ll have at least one more unicorn IPO before 2020 comes to a close. For a high-level look at its numbers, I wrote this, Danny covered who will profit from the deal, and I noodled on the impact of COVID-19 on its business.

I bring all that up because there is another COVID-19 impacted unicorn that we are expecting to see go public in very short order: Airbnb.

When Airbnb filed to go public in August, it seemed like a solid plan. The company was widely reported to be on an upswing from its COVID-doldrums, the public markets were hot for growth and tech shares, and the pandemic’s caseload in the United States was coming down from its summer highs. It looked great for Airbnb to wrap its Q3, drop its public S-1 with the new numbers, and laugh all the way to the bank after showing investors that even a global pandemic and travel industry depression couldn’t stop it.

And yet. The United States and world at large are now in the midst of the worst COVID-19 spike yet, and consumer spend is going down right before we get the company’s S-1. November feels less winsome for an Airbnb recovery than August or September did. Still, when Airbnb files — next week, the scuttlebutt indicates, so get ready — we’ll only have a look at its numbers through the third quarter.

That’s effectively the same timeframe for a dataset that the folks at Cardify sent over and I dug through. Per the company, which tracks real-time consumer spend data, here’s a look at how well Airbnb recovered ahead of its larger industry after the initial recession in pandemic lodging spend:

Impressive, right? Sadly for Airbnb, the initial boom of demand through late June into July tapered as time continued.

Zooming in somewhat, here’s Airbnb spend data from July 2020 through the end of October, the first month of Q4, compared to the same period of 2019:

Declines, then, but still an encouraging set of data for the company regardless. I would not have expected Airbnb spend — via third-party, admittedly — to be this strong.

The trend of folks renting a house for a month seems to have diminished somewhat, in case you are factoring that into your mental math concerning Airbnb revenues from the above charts. Cardify told TechCrunch that after peaking at around +70% in the March-April timeframe, “average booking sizes have now normalized and are approximately 30% higher on a YTD basis.”

There is weakness in October, the charts show, but that appears to be at least partially seasonal given the 2019 line, so I don’t want to over-ascribe rising COVID cases as the cause. The drooping line, however, was echoed in similar SimilarWeb data that was also shared with The Exchange. The dataset concerned accommodation booking volume around the world for a number of travel services, including Airbnb. Its data tracking the US market showed that a bookings recovery through September that made up some ground on March lows was undercut by October declines. Europe’s bookings’ recovery peaked in July and has been falling ever since. Asian volume is creeping higher, but down sharply from prior levels.

It was a mixed picture, but as Airbnb is doing better than its broader industry per Cardify, the aggregated data could be leading us to be more pessimistic than we otherwise need to be. We’ll see shortly what the real numbers are, but I couldn’t help but share what I was reading with you. On to the S-1!

Before DoorDash filed, we were going to talk about Brex today in this space after Airbnb. But, since we got extra busy, expect those notes early next week on The Exchange.

Market Notes

The week was super busy with earnings, so I’ve collected a few notes from calls with select companies after they reported. Apologies to everyone’s’ favorite reporting firm, but we’re space-limited.

Appian crushed earnings expectations. What drove the low-code application development services’ growth forward? According to CEO Matt Calkins, it wasn’t a single thing. Instead, the company’s performance was driven by a long ramp he said, though he did also state that the concept of low-code has reached the public consciousness in new, higher levels during the last few quarters.

Why? The year’s chaos pushed companies into new patterns faster than they had anticipated. Chalk this result up to the accelerating digital transformation being real, which is good news for startups. (For more on Appian and the low-code space, head here.)

Alteryx gave The Exchange an earnings first, providing both its newly former CEO Dean Stoecker and its new CEO Mark Anderson to chat results. The company crushed Q3 expectations, but its Q4 projections did not excite investors. What was up? Anderson argued that ARR growth, not forward GAAP revenue projections, is the most transparent and clear view of an expanding software company, to paraphrase his thinking. You can’t ignore revenue, he said, but given the nuances in how revenue is counted, pay attention to ARR.

Alteryx has a solid ARR target for 2021. We’ll see how investors view its Q4 results and if they align their thinking to that of the new CEO. Alteryx’s former CEO is bullish, saying that in time the market will realize that analytics is at the epicenter of digital transformation. And his company will be there with code to sell.

Moving along, earlier this week I asked a number of VCs about the software venture capital market in the wake of Monday’s sharp selloff and my question about what might happen to public and private software companies if other stocks suddenly became more attractive — strong vaccine news on Monday was later overwhelmed by surging cases as the week went along, but on Monday Zoom lost billions in value as investors fled.

One set of responses came in late, but I wanted to share them all the same as they were more bullish than I anticipated. In the view of Laela Sturdy, a general partner at Alphabet Capital G, “private software investors are unlikely to change their investing patterns much as a result of fluctuations in the public market,” adding later that “public market changes would have to be very extreme — as in 30 percent or more — in order to impact growth stage valuations.”

The connection between public valuations and trading patterns and private capital deployment exists, but how closely the two are linked depends on what’s happening at any given moment, and it appears that at the moment private investor excitement about software is durable.

Sturdy explained why that may be: “Long-term secular trends around cloud adoption, automation and AI, data, security, fintech infrastructure, and the ongoing rapid acceleration of digital transformation will help tech companies maintain their status as the darlings of growth investors in both the private and public markets.”

Various and Sundry

And finally, the rest of the stuff that I couldn’t get to this week. Here we go:

  • Chatted with Cambridge Innovation Capital, a neat venture capital firm from Cambridge in the U.K. — not the Cambridge on the American East Coast. More to say here, but the good news is that hubs of innovation really are maturing into startup factories the world around.
  • I got my hands on an early copy of a survey of LPs put together by Allocate. It comes out Monday I think, but it said that “only 20% of [LP] respondents said COVID had slowed their investment activities,” which helps explain all the funds we’ve seen in the past few months.

Closing with something fun, remember that look we did of the performance of various startups in Q3? That was fun. Anyhoo, no-code “online form builder” JotForm told The Exchange that its revenue is up 50% from its 2019 results, that its enterprise customer base is up 620%, and that it expects to reach “100,000 total paid users by end of year.” Neat!

Alex

 

Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Neuroglee gets $2.3 million to develop digital therapeutics for neurodegenerative diseases

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There are now about 50 million people with dementia globally, a number the World Health Organization expects to triple by 2050. Alzheimer’s is the leading cause of dementia and caregivers are often overwhelmed, without enough support.

Neuroglee, a Singapore-based health tech startup, wants to help with a digital therapeutic platform created to treat patients in the early stages of the disease. Founded this year to focus on neurodegenerative diseases, Neuroglee announced today it has raised $2.3 million in pre-seed funding.

The round was led by Eisai Co., one of Japan’s largest pharmaceutical companies, and Kuldeep Singh Rajput, the founder and chief executive officer of predictive healthcare startup Biofourmis.

Neuroglee’s prescription digital therapy software for Alzheimer’s, called NG-001, is its main product. The company plans to start clinical trials next year. NG-001 is meant to complement medication and other treatments, and once it is prescribed by a clinician, patients can access its cognitive exercises and tasks through a tablet.

Neuroglee founder and CEO Aniket Singh Rajput (brother of Kuldeep) told TechCrunch that its first target markets for NG-001 are the United States and Singapore, followed by Japan. NG-001 needs to gain regulatory approval in each country, and it will start by seeking U.S. Food and Drug Administration clearance.

Once it launches, clinicians will have two ways to prescribe NG-001, through their healthcare provider platform or an electronic prescription tool. A platform called Neuroglee Connect will give clinicians, caregivers and patients access to support and features for reimbursement and coverage.

The software tracks patients’ progress, such as the speed of their fingers and the time it takes to complete an exercise, and delivers personalized treatment programs. It also has features to address the mental health of patients, including one that shows images that can bring up positive memories, which in turn can help alleviate depression and anxiety when used in tandem with other cognitive behavioral therapy techniques.

For caregivers and clinicians, NG-001 helps them track patient progress and their compliance with other treatments, like medications. This means that healthcare providers can work closely with patients even remotely, which is especially important during the COVID-19 pandemic.

 

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Govtech intelligence platform, The Atlas for Cities, bought by Government Executive Media Group

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The Atlas for Cities, the 500 Startups-backed market intelligence platform connecting tech companies with state and local governments, has been acquired by the Growth Catalyst Partners-backed publishing and market intelligence company Government Executive Media Group.

The San Diego-based company will become the latest addition to a stable of publications and services that include the Route Fifty, publication for local government and the defense-oriented intelligence service, DefenseOne.

The Atlas provides peer-to-peer networks for state and local government officials to share best practices and is a marketing channel for the startups that want to sell services to those government employees. Through The Atlas, government officials can talk to each other, find case studies for best practices around tech implementations, and post questions to crowdsource ideas.

Government contractors can use the site to network with leadership and receive buyer intent data to inform their strategy in the sector, all while getting intelligence about the problems and solutions that matter to state and local jurisdictions across the nation. 

The Atlas delivers on GEMG’s promise to look for companies that complement and supplement the full suite of offerings that we provide to our partners to reach decision makers across all facets of the public sector,” said Tim Hartman, CEO of Government Executive Media Group, said in a statement.

Led by Ellory Monks and Elle Hempen, The Atlas for Cities launched in 2019 and is backed by financing from individual investors and the 500 Startups accelerator program. It now counts 21,000 government officials across 3,400 cities on its platform.

“State and local governments in the United States spend $3.7 trillion per year. That’s almost 20% of GDP,” said Elle Hempen, co-founder of The Atlas. “Our mission to increase transparency and access for local leaders has the opportunity to transform this enormous, inefficient market and enable tangible progress on the most important issues of our times.”

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Google shutting down Poly 3D content platform

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Google is almost running out of AR/VR projects to kill off.

The company announced today in an email to Poly users that they will be shutting 3D-object creation and library platform “forever” next year. The service will shut down on June 30, 2021 and users won’t be able to upload 3D models to the site on April 30, 2021.

Poly was introduced as a 3D creation tool optimized for virtual reality. Users could easily create low-poly objects with in-VR tools. The software was designed to serve as a lightweight way to create and view 3D assets that could in turn end up in games and experiences, compared to more art and sculpting-focused VR tools like Google’s Tilt Brush and Facebook’s (now Adobe’s) Medium software.

Google has already discontinued most of the company’s AR/VR plays, including most notably their Daydream mobile VR platform.

The AR/VR industry’s initial rise prompted plenty of 3D-centric startups to bet big on creating or hosting a library of digital objects. As investor enthusiasm has largely faded and tech platforms hosting AR/VR content have shuttered those products, it’s less clear where the market is for this 3D content for the time being.

Users that have uploaded objects to Poly will be able to download their data and models ahead of the shutdown.

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