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Making sense of Klarna

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Sebastian Siemiatkowski, the co-founder and CEO of Klarna — the Swedish fintech “buy now, pay later” sensation that is currently Europe’s most valuable private tech company — is dismissive of the suggestion that non U.S. companies should relocate to Silicon Valley if they really want to grow.

“We did hear that and I think it’s very poor advice,” he says. An overheated market for tech talent and the fickle nature of employees that are constantly job-hopping, he argues, make it harder to build a company for the long term.

Then he goes further.

“When I went to San Francisco for the first time about 10 years ago, [it] was a magical place. It was the early days of Facebook, there was an amazing vibe. When I go to San Francisco today, it’s changed to become, in my opinion, fairly cold.”

Siemiatkowski, a Swedish national and the son of two immigrants from Poland, is also sceptical of the “American dream.” In contrast to America, he points out how Sweden is among the most successful societies in the world from a social mobility perspective — referencing its free education and free health care, which sets up as many people as possible for success. But there is one caveat: he doesn’t think first-generation immigrants in Sweden do nearly as well as their children.

“We didn’t have a lot of money,” he tells me. “My father was driving a cab, he was unemployed for many years, even though he had basically a doctorate in agronomy. That’s kind of the unfortunate part of this, but that has obviously created a massive amount of hunger with me.”

As second generation success stories go, the rise of Klarna is up there with the best, even if it has already been 15 years in the making.

Backed by the likes of Sequoia, Silverlake, and Atomico, a new $650 million funding round in September gave the company a whopping $10.65 billion valuation — almost double the price achieved a year earlier, cementing its status as a poster child for Europe’s ability to build tech companies valued far above $1 billion. Siemiatkowski still owns an 8.1 percent stake.

Klarna is also, perhaps, even more mythical than a unicorn: a fintech that has been profitable nearly from the get-go. That only changed in 2019, when it decided to incur losses in favor of investing millions trying to conquer the U.S. market, choosing New York and L.A. over San Francisco for its American offices.

The company has been built on the concept of giving consumers a way to buy things online without having to pay for them upfront, and without resorting to a credit card. It does this both by offering online retailer integrations where Klarna appears as an option at check out, and through its own “shopping mall” app, where users can browse all the stores that let you pay with Klarna. On the back of this, the company hopes to foster a bigger financial relationship with its users as a fully-fledged bank.

If a bank is partly about corralling enough users on to your platform to pay money in and out, Klarna is well on its way. Today, the company boasts a registered customer base of 90 million, 11 million of which are in the U.S. In the last year alone, 21 million users were added globally. Klarna’s direct to consumer app, which sits alongside its 200,000 strong merchant point of sale integrations, has 14 million active users globally. Combined, Klarna is processing over 1 million transactions per day through its platform.

Image Credits: Klarna

This growth has continued apace as Klarna rides one macro trend and bucks another: Prompted by the pandemic, e-commerce has gone gangbusters, while, conversely, consumer credit as a whole has been in decline as people are paying down longer-term debt in record numbers. Even before COVID-19, Klarna and other buy now, pay later providers had been successfully picking up the slack created by a credit card market that, in some countries, has been steadily contracting.

Yet with a business model that generates the majority of its revenue by offering consumers short-term credit — and against a backdrop where the idea of easy credit and infinite consumption is increasingly criticised — the fintech giant is not without detractors.

When I mention Klarna to people who work in the European tech industry, the reaction tends to fall into one of three camps: those who reference the company’s “weird” above the line advertising and social media campaigns; those who use the service regularly and talk in terms of guilty pleasures; and those who are outright scornful of the impact on society they perceive Klarna to be making. And it’s true: You can’t help but be suspicious of something that gives consumers the feeling that they can spend money they might not have. And those “Smoooth” ads (below) certainly don’t offer much reassurance.

Delve a little deeper, however, and it becomes clear that the company’s business model can be misunderstood and that the arguments playing out in the media for and against buy now, pay later is only one part of the Klarna story.

In a wide-ranging interview, Siemiatkowski confronts criticisms head on, including that Klarna makes it too easy to get into debt, and that buy now, pay later needs to be regulated. We also discuss Klarna’s business model and the balancing act required to win over consumers and keep merchants onside.

We also learn how, under his watch and as the company began to scale, Klarna missed the next big opportunity in fintech, instead being usurped by Adyen and Stripe. Siemiatkowski also shares what’s next for the company as it ventures further into the world of retail banking after gaining a bank license in 2017.

And, told publicly for the first time, Siemiatkowski reveals how he once sought out PayPal co-founder Max Levchin as an advisor, only to learn a little later that he had started Affirm, one of Klarna’s most direct U.S. competitors and sometimes described by Europeans as a Klarna clone.

But first, let’s go back to the beginning.

Klarna’s first ever transaction took place at 11:06:40 am on April 10, 2005 at a Swedish bookshop called Pocketklubben, according to the abbreviated history published on the company’s website. However, what is made less explicit is that there was likely very little technology involved. The real innovation was a business one, with Klarna’s young and non-technical founders, Sebastian Siemiatkowski, Niklas Adalberth and Victor Jacobsso, taking an old idea and reconfiguring it for the burgeoning e-commerce industry.

By enabling customers that shopped online to be mailed an invoice with 30 days to pay, online shopping could be made easier and safer for consumers, which in turn helped increase sales for retailers.

“The invoicing company”

“When they started, they didn’t position themselves so much as a startup or as a tech company,” recalls Skype founder Niklas Zennström, whose venture capital firm Atomico would eventually become a Klarna investor in 2012. “People referred to them as the invoicing company.”

Today, Klarna is most certainly a tech company, employing 1,300 software engineers out of a staff of over 3,500. The company is now entirely cloud based and with various fully automated processes, from credit risk processing to algorithms in the Klarna shopping app to personalize content for individual consumers to AI/machine learning for 24 hour customer service.

Crucially, however, even this early and rudimentary version of what would become ‘buy now, pay later’ ticked two important boxes. Consumers, especially those who were distrusting of e-commerce, could be sure they’d receive goods before being charged, and if for any reason a product needed to be returned, customers wouldn’t have to wait weeks to be reimbursed as they hadn’t outlaid cash in the first place. Arguably both problems were already solved by credit cards, but in countries like Sweden, credit card take up was low, while the humble debit card doesn’t carry the same consumer protections as a credit card.

“The reason that we were able to launch it and be successful was because we were in a market where debit cards were much more prevalent than credit cards,” says Siemiatkowski. “And most people who have credit cards don’t reflect on the fact that if you have a debit card and you shop online, you face a number of struggles that a credit card holder does not.”

Those “struggles” include tying up your own money for the time it takes to return an item and process a refund. In contrast, when you spend on a credit card, the merchant is effectively holding your credit card company’s money.

“If I am buying some items and feel a bit unsafe about the merchant I’m using, if there’s a credit card, I don’t feel like I’m risking my money. If it’s my salary money you’re actually holding as a merchant for three weeks while you’re processing the return, that’s a problem,” Siemiatkowski argues.

Instead, Klarna would step in and offer to pay the merchant up front while providing customers 30 days to settle their invoice. Later this would be extended to include installments as an option. In return for taking on all of the risk and promising to increase conversions, merchants would give the Swedish upstart a percentage cut of the transactions.

“They wanted to make it really simple by just putting in your name, your Social Security number, and then you can instantaneously get an option to get an invoice sent to you later on. So what it did was remove a lot of friction from buying,” says Zennström.

Meanwhile, the more retailers sold, the more revenue Klarna would generate, all without consumers having to be charged interest on what might otherwise be described as a short-term loan. Pitch perfect, you might think. However, in early 2005 and before the company was incorporated, the concept was stress-tested at a “Shark Tank”-style event held at the Stockholm School of Economics and attended by the King of Sweden. The judging panel, made up of prominent Swedish financiers, were not convinced and Klarna’s invoicing idea came last in the competition. Despite the loss, Siemiatkowski held on to feedback from an unknown member of the audience, who surmised that banks would never launch something similar. Siemiatkowski left undeterred.

Angel investment from a former Erlang Systems sales manager, Jane Walerud, followed and she put Klarna’s founders in contact with a team of developers who helped build the first version of the platform. However, it soon surfaced that there was a misunderstanding in relation to the equity promised and how it should be linked to a longer commitment to the project.

Reflects Siemiatkowski: “One of the drawbacks that we had at the company was that none of the three co-founders had any engineering background; we couldn’t code. We were connected to five engineers that by themselves were amazing engineers, but we had a slight misunderstanding. Their idea was that they were going to come in, build a prototype, ship it, and then leave for 37% of the equity. Our understanding was that they were going to come in, ship it, and if it started scaling they would stay with us and work for a longer period of time. This is the classic mistake that you do as a startup.”

Eventually, the original five engineers quit, leaving Siemiatkowski to manage something he didn’t understand. “We obviously hired a CTO, but I also needed to be able to evaluate his decision making and all of these things in order to be able to assess whether we had the right setup to achieve what we want to achieve,” he says.

Between 2006 and 2008, Klarna continued to grow as more people started shopping online. The company expanded beyond Sweden to neighboring Nordic countries Norway, Finland and Denmark, with a headcount that had reached 120 employees. Even though there were signs of growth, Siemiatkowski says it still took a long time to realise that if Klarna was ever going to be really successful, it needed to fully transform into a tech company.

“We were really good at sales, we were okay at marketing, [and] we were service oriented: we really delivered to our customers. But it wasn’t really that technology driven,” he concedes.

To attract the kind of tech talent required, Siemiatkowski decided he needed to woo a renowned tech investor. Further backing had come in 2007 from Swedish investment firm Investment AB Öresund, but by 2010 the Klarna CEO had two new targets in his sights: Niklas Zennström, the Swedish entrepreneur who had already achieved legend status back home after building and selling Skype, and Sequoia Capital, the Silicon Valley venture capital firm that had invested in Apple, Google and PayPal.

“Part of our thinking about how we make Klarna attractive for people with engineering backgrounds was to get an investor that really had the brand and could kind of put their mark on us and say, ‘this is a tech company,’” says Siemiatkowski.

There is every likelihood that Zennström’s Atomico would have joined Klarna’s cap table in 2010 if it weren’t for a single line of text published on the VC firm’s website, which read something like, “don’t contact us, we’ll contact you.” Europe’s startup ecosystem was still immature and what now seems like aloofness was probably nothing more than a crude way to deter cold pitches from non-venture type businesses. But whatever the intent, it would be another two years before the firm eventually had the opportunity to invest in Klarna at what was almost certainly a much higher valuation.

“That was our loss for being too arrogant,” says Zennström. “Clearly we didn’t pursue them, we didn’t discover them because we didn’t have them on our radar. When we got to know them [two years later], what we liked a lot as a firm was the pain point that they were addressing.

“E-commerce was a relatively low single digit penetration of all retail, but of course growing, and we have always believed that e-commerce is going to continue to grow and become bigger than physical retailers. We thought that if you can remove that friction of the payment, and offer people different payment methods, that’s a really big proposition.”

“I always tease Niklas about it,” admits Siemiatkowski. “They wanted to, you know, keep it exclusive and I get it. So we were like, ‘okay, we can’t get hold of them, so let’s talk to Sequoia instead.’”

However, cold calling Sequoia wasn’t going to cut it either, not only because the firm didn’t generally invest in Europe, but also by Siemiatkowski’s own admission, Klarna didn’t look much like a tech company at the time. Luckily, a mutual contact got wind that Sequoia was on the lookout for interesting companies in the region and Klarna’s name was promptly thrown into the mix.

“Chris [Olsen], who was working at Sequoia at the time, called me, [but] I had this idea that I needed to be hard to catch. So I decided to not call back for three days, which was a very nervous time where I was just sitting on my hands not doing anything,” he said. “It was like, I don’t want to look like I’m too interested in this. Eventually, after three days, I call back and we did an exclusive deal with them, which I don’t recommend companies do.”

In hindsight, the Klarna CEO advises that it’s always smarter to foster competition in a round. As the only show in town, Sequoia invested at a $100 million valuation. “They bought 25 percent of the company and that was kind of it,” he says.


Siemiatkowski believes a company is made up of three things.

The first he calls internal momentum: “How fast are we moving as an organisation? How good are the decisions we are taking? How much are we avoiding [company] politics? How much of a true meritocracy are we?”

The second is profit and loss.

And the third is valuation. In a small company these three things are closely correlated in time, he says, “so if you have great internal momentum, you will instantly see it in your P&L, and then you will instantly see that hopefully in your company valuation as well.”

But in a large company, because of its size, the challenge is that they start to become disconnected. “They’re obviously in the long term always 100% correlated, but in the short term, they can vary a lot,” cautions Siemiatkowski.

Unsurprisingly, fueled by Sequoia’s cash, Klarna continued to grow in 2010, ending the year with $54 million in annual revenue, an increase of 80%. In December 2011, General Atlantic and DST would invest $155 million in a round that gave Klarna the coveted status of a unicorn.

Siemiatkowski says, compared to the company’s subsequent $5.5 billion and $10.65 billion valuations, this is the one that put him under the most self-scrutiny.

“In just one and a half years, we went from $100 million to a $1 billion. And then I felt the pressure,” he tells me. “I felt like we made it such a competitive round because we wanted to compensate for what we saw partially as a mistake with Sequoia that we kind of went too far the other way.”

Klarna finally took Atomico’s money in 2012, and within two years had grown to over 1,000 employees. Along with multiple offices around the globe, the company moved to bigger headquarters in Stockholm and expanded to the U.K. with an office in central London. Yet, somewhere along the way, Siemiatkowski says Klarna had lost internal momentum.

“As the company scaled and we started adding more markets and growing fast, for me as CEO and co-founder, I found that very difficult,” he admits. “As long as we were up to 100 people, I found it easier, I understood how to talk to people, how to get things done, how to develop new products or features and so forth. It was all much less complex, and then we started approaching a couple of hundred people and I felt more and more lost in all of that.

“It was difficult, and at the same point of time, we still had a lot of success because we had built this product that worked really well and there was a lot of momentum coming solely from the product itself.”

Siemiatkowski says that most startups don’t recognize that “once you get the snowball rolling, you can actually do quite a lot of stupid things, and the snowball will continue rolling.”

The Klarna CEO doesn’t say it, but one of those “stupid things” came in 2012 when the startup faced a backlash in its home country. Instead of sending payment instructions in the post, the company had switched to email without considering that messages might go to spam or simply remain unread. This saw customers unintentionally defaulting and then being chased for payment, leading to accusations in the media that Klarna was tricking people so it could generate more revenue through late fees.

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Extra Crunch roundup: antitrust jitters, SPAC odyssey, white-hot IPOs, more

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Some time ago, I gave up on the idea of finding a thread that connects each story in the weekly Extra Crunch roundup; there are no unified theories of technology news.

The stories that left the deepest impression were related to two news pegs that dominated the week — Visa and Plaid calling off their $5.3 billion acquisition agreement, and sizzling-hot IPOs for Affirm and Poshmark.

Watching Plaid and Visa sing “Let’s Call The Whole Thing Off” in harmony after the U.S. Department of Justice filed a lawsuit to block their deal wasn’t shocking. But I was surprised to find myself editing an interview Alex Wilhelm conducted with with Plaid CEO Zach Perret the next day in which the executive said growing the company on its own is “once again” the correct strategy.


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In an analysis for Extra Crunch, Managing Editor Danny Crichton suggested that federal regulators’ new interest in antitrust enforcement will affect valuations going forward. For example, Procter & Gamble and women’s beauty D2C brand Billie also called off their planned merger last week after the Federal Trade Commission raised objections in December.

Given the FTC’s moves last year to prevent Billie and Harry’s from being acquired, “it seems clear that U.S. antitrust authorities want broad competition for consumers in household goods,” Danny concluded, and I suspect that applies to Plaid as well.

In December, C3.ai, Doordash and Airbnb burst into the public markets to much acclaim. This week, used clothing marketplace Poshmark saw a 140% pop in its first day of trading and consumer-financing company Affirm “priced its IPO above its raised range at $49 per share,” reported Alex.

In a post titled A theory about the current IPO market, he identified eight key ingredients for brewing a debut with a big first-day pop, which includes “exist in a climate of near-zero interest rates” and “keep companies private longer.” Truly, words to live by!

Come back next week for more coverage of the public markets in The Exchange, an interview with Bustle CEO Bryan Goldberg where he shares his plans for taking the company public, a comprehensive post that will unpack the regulatory hurdles facing D2C consumer brands, and much more.

If you live in the U.S., enjoy your MLK Day holiday weekend, and wherever you are: thanks very much for reading Extra Crunch.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

 

Rapid growth in 2020 reveals OKR software market’s untapped potential

After spending much of the week covering 2021’s frothy IPO market, Alex Wilhelm devoted this morning’s column to studying the OKR-focused software sector.

Measuring objectives and key results are core to every enterprise, perhaps more so these days since knowledge workers began working remotely in greater numbers last year.

A sign of the times: this week, enterprise orchestration SaaS platform Gtmhub announced that it raised a $30 million Series B.

To get a sense of how large the TAM is for OKR, Alex reached out to several companies and asked them to share new and historical growth metrics:

  • Gthmhub
  • Perdoo
  • WorkBoard
  • Ally.io
  • Koan
  • WeekDone

“Some OKR-focused startups didn’t get back to us, and some leaders wanted to share the best stuff off the record, which we grant at times for candor amongst startup executives,” he wrote.

5 consumer hardware VCs share their 2021 investment strategies

For our latest investor survey, Matt Burns interviewed five VCs who actively fund consumer electronics startups:

  • Hans Tung, managing partner, GGV Capital
  • Dayna Grayson, co-founder and general partner, Construct Capital
  • Cyril Ebersweiler, general partner, SOSV
  • Bilal Zuberi, partner, Lux Capital
  • Rob Coneybeer, managing director, Shasta Ventures

“Consumer hardware has always been a tough market to crack, but the COVID-19 crisis made it even harder,” says Matt, noting that the pandemic fueled wide interest in fitness startups like Mirror, Peloton and Tonal.

Bonus: many VCs listed the founders, investors and companies that are taking the lead in consumer hardware innovation.

A theory about the current IPO market

Digital generated image of abstract multi colored curve chart on white background.

Digital generated image of abstract multi colored curve chart on white background.

If you’re looking for insight into “why everything feels so damn silly this year” in the public markets, a post Alex wrote Thursday afternoon might offer some perspective.

As someone who pays close attention to late-stage venture markets, he’s identified eight factors that are pushing debuts for unicorns like Affirm and Poshmark into the stratosphere.

TL;DR? “Lots of demand, little supply, boom goes the price.”

Poshmark prices IPO above range as public markets continue to YOLO startups

Clothing resale marketplace Poshmark closed up more than 140% on its first trading day yesterday.

In Thursday’s edition of The Exchange, Alex noted that Poshmark boosted its valuation by selling 6.6 million shares at its IPO price, scooping up $277.2 million in the process.

Poshmark’s surge in trading is good news for its employees and stockholders, but it reflects poorly on “the venture-focused money people who we suppose know what they are talking about when it comes to equity in private companies,” he says.

Will startup valuations change given rising antitrust concerns?

GettyImages 926051128

financial stock market graph on technology abstract background represent risk of investment

This week, Visa announced it would drop its planned acquisition of Plaid after the U.S. Department of Justice filed suit to block it last fall.

Last week, Procter & Gamble called off its purchase of Billie, a women’s beauty products startup — in December, the U.S. Federal Trade Commission sued to block that deal, too.

Once upon a time, the U.S. government took an arm’s-length approach to enforcing antitrust laws, but the tide has turned, says Managing Editor Danny Crichton.

Going forward, “antitrust won’t kill acquisitions in general, but it could prevent the buyers with the highest reserve prices from entering the fray.”

Dear Sophie: What’s the new minimum salary required for H-1B visa applicants?

Image Credits: Sophie Alcorn

Dear Sophie:

I’m a grad student currently working on F-1 STEM OPT. The company I work for has indicated it will sponsor me for an H-1B visa this year.

I hear the random H-1B lottery will be replaced with a new system that selects H-1B candidates based on their salaries.

How will this new process work?

— Positive in Palo Alto

Venture capitalists react to Visa-Plaid deal meltdown

A homemade chocolate cookie with a bite and crumbs on a white background

OLYMPUS DIGITAL CAMERA

After news broke that Visa’s $5.3 billion purchase of API startup Plaid fell apart, Alex Wilhelm and Ron Miller interviewed several investors to get their reactions:

  • Anshu Sharma, co-founder and CEO, SkyflowAPI
  • Amy Cheetham, principal, Costanoa Ventures
  • Sheel Mohnot, co-founder, Better Tomorrow Ventures
  • Lucas Timberlake, partner, Fintech Ventures
  • Nico Berardi, founder and general partner, ANIMO Ventures
  • Allen Miller, VC, Oak HC/FT
  • Sri Muppidi, VC, Sierra Ventures
  • Christian Lassonde, VC, Impression Ventures

Plaid CEO touts new ‘clarity’ after failed Visa acquisition

Zach Perret, chief executive officer and co-founder of Plaid Technologies Inc., speaks during the Silicon Slopes Tech Summit in Salt Lake City, Utah, U.S., on Friday, Jan. 31, 2020. The summit brings together the leading minds in the tech industry for two-days of keynote speakers, breakout sessions, and networking opportunities. Photographer: George Frey/Bloomberg via Getty Images

Zach Perret, chief executive officer and co-founder of Plaid Technologies Inc., speaks during the Silicon Slopes Tech Summit in Salt Lake City, Utah, U.S., on Friday, Jan. 31, 2020. The summit brings together the leading minds in the tech industry for two-days of keynote speakers, breakout sessions, and networking opportunities. Photographer: George Frey/Bloomberg via Getty Images

Alex Wilhelm interviewed Plaid CEO Zach Perret after the Visa acquisition was called off to learn more about his mindset and the company’s short-term plans.

Perret, who noted that the last few years have been a “roller coaster,” said the Visa deal was the right decision at the time, but going it alone is “once again” Plaid’s best way forward.

2021: A SPAC odyssey

In Tuesday’s edition of The Exchange, Alex Wilhelm took a closer look at blank-check offerings for digital asset marketplace Bakkt and personal finance platform SoFi.

To create a detailed analysis of the investor presentations for both offerings, he tried to answer two questions:

  1. Are special purpose acquisition companies a path to public markets for “potentially-promising companies that lacked obvious, near-term growth stories?”
  2. Given the number of unicorns and the limited number of companies that can IPO at any given time, “maybe SPACS would help close the liquidity gap?”

Flexible VC: A new model for startups targeting profitability

12 ‘flexible VCs’ who operate where equity meets revenue share

Spotlit Multi Colored Coil Toy in the Dark.

Spotlit Multi Colored Coil Toy in the Dark.

Growth-stage startups in search of funding have a new option: “flexible VC” investors.

An amalgam of revenue-based investment and traditional VC, investors who fall into this category let entrepreneurs “access immediate risk capital while preserving exit, growth trajectory and ownership optionality.”

In a comprehensive explainer, fund managers David Teten and Jamie Finney present different investment structures so founders can get a clear sense of how flexible VC compares to other venture capital models. In a follow-up post, they share a list of a dozen active investors who offer funding via these non-traditional routes.

These 5 VCs have high hopes for cannabis in 2021

Marijuana leaf on a yellow background.

Image Credits: Anton Petrus (opens in a new window) / Getty Images

For some consumers, “cannabis has always been essential,” writes Matt Burns, but once local governments allowed dispensaries to remain open during the pandemic, it signaled a shift in the regulatory environment, and investors took notice.

Matt asked five VCs about where they think the industry is heading in 2021 and what advice they’re offering their portfolio companies:

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GitLab oversaw a $195 million secondary sale that values the company at $6 billion

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GitLab has confirmed with TechCrunch that it oversaw a $195 million secondary sale that values the company at $6 billion. CNBC broke the story earlier today.

The company’s impressive valuation comes after its most recent 2019 Series E in which it raised $268 million on a 2.75 billion valuation, an increase of $3.25 billion in under 18 months. Company co-founder and CEO Sid Sijbrandij believes the increase is due to his company’s progress adding functionality to the platform.

“We believe the increase in valuation over the past year reflects the progress of our complete DevOps platform towards realizing a greater share of the growing, multi-billion dollar software development market,” he told TechCrunch.

While the startup has raised over $434 million, this round involved buying employee stock options, a move that allows the company’s workers to cash in some of their equity prior to going public. CNBC reported that the firms buying the stock included Alta Park, HMI Capital, OMERS Growth Equity, TCV and Verition.

The next logical step would appear to be IPO, something the company has never shied away from. In fact, it actually at one point included the proposed date of November 18, 2020 as a target IPO date on the company wiki. While they didn’t quite make that goal, Sijbrandij still sees the company going public at some point. He’s just not being so specific as in the past, suggesting that the company has plenty of runway left from the last funding round and can go public when the timing is right.

“We continue to believe that being a public company is an integral part of realizing our mission. As a public company, GitLab would benefit from enhanced brand awareness, access to capital, shareholder liquidity, autonomy and transparency,” he said.

He added, “That said, we want to maximize the outcome by selecting an opportune time. Our most recent capital raise was in 2019 and contributed to an already healthy balance sheet. A strong balance sheet and business model enables us to select a period that works best for realizing our long-term goals.”

GitLab has not only published IPO goals on its Wiki, but its entire company philosophy, goals and OKRs for everyone to see. Sijbrandij told TechCrunch’s Alex Wilhelm at a TechCrunch Disrupt panel in September that he believes that transparency helps attract and keep employees. It doesn’t hurt that the company was and remains a fully remote organization, even pre-COVID.

“We started [this level of] transparency to connect with the wider community around GitLab, but it turned out to be super beneficial for attracting great talent as well,” Sijbrandij told Wilhelm in September.

The company, which launched in 2014, offers a DevOps platform to help move applications through the programming lifecycle.

Update: The original headline of this story has been changed from ‘GitLab raises $195M in secondary funding on $6 billion valuation.’

 

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Facebook blocks new events around DC and state capitols

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As a precaution against coordinated violence as the U.S. approaches President-elect Joe Biden’s inauguration, Facebook announced a few new measures it’s putting in place.

In a blog post and tweets from Facebook Policy Communications Director Andy Stone, the company explained that it would block any events slated to happen near the White House, the U.S. Capitol or any state capitol building through Wednesday.

The company says it will also do “secondary” sweeps through any inauguration-related events to look for violations of its policies. At this point, that includes any content connected to the “Stop the Steal” movement perpetuating the rampant lie that Biden’s victory is illegitimate. Those groups continued to thrive on Facebook until measures the company took at the beginning of this week.

Facebook will apparently also be putting new restrictions in place for U.S. users who repeatedly break the company’s rules, including barring those accounts from livestreaming videos, events and group pages.

Those precautions fall short of what some of Facebook’s critics have called for, but they’re still notable measures for a company that only began taking dangerous conspiracies and armed groups seriously in the last year.

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