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Can you IPO sneakers? Also, this is the last Exchange roundup of the year

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Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday? Subscribe here

Ready? Let’s talk money, startups and spicy IPO rumors.

Sweet dreams are made of IPOs, so merry f****** Christmas

We’re all very tired but there’s still so much news to go over I am sorry

Can you IPO sneakers? Also, this is the last Exchange roundup of the year

Hello everyone, hope you are well. This is the final Exchange newsletter of 2020. There will be a handful of columns next week before I take some time off. Equity will publish episodes throughout the termination of this accursed annum, as well.

And now that we’re done with housekeeping, our two focuses of the week: Who is going public and how fast a particular cohort of startups are growing.

Sure, the two topics aren’t incredibly related issues, but I am not going to let unending IPO news ruin what I wanted to talk about. So, SEC broccoli first, and then we get to have some fun.

IPOh-no-they-didn’t

IPO news was busy this week, with Coinbase and UIPath filing privately, Poshmark filing publicly, and Bumble reportedly filing privately. In short, we’ve added four names to our IPO roll-call, that already included Affirm and Roblox, which have delayed their own offerings.

And with names like Chime, Robinhood, Expensify, and others already of sufficient scale to go public at-will, the brand-name IPO crop of 2021 could rival what we saw this year.

Thanks to unicorns looking to graze public pastures, and public markets near all-time-highs, it appears that we’re going to see it rain liquidity over the coming months. This means that aggregate venture capital DPI and TVPI metrics will scoot higher, making the entire asset class even more attractive than it was in today’s yield-hungry world.

The music continues.

Just how big is the software business?

Earlier this week, TechCrunch covered Ramp’s new round. Ramp launched in February, and was dismissed by some as a Brex clone at the time. Ramp and Brex compete with Divvy and other startups (more on two others in a moment) to help other companies manage their spend through a combination of real and virtual cards, and software.

Along with some new software features, Ramp announced growth metrics as part of its news bundle. When reached to Divvy for similar numbers, the company supplied them. Brex declined to share results, which was fine. And I failed to mention a few competing companies, namely Airbase and Plate IQ.

Airbase I should have included as I covered it in March, 2020 when it raised $23.5 million in a Series A-extension (the new capital came in at a trebled-valuation, so you could call it a Series B, frankly). Regardless, Airbase matters not only because it is a competitor to Ramp and Divvy and Brex, but because while it offers similar products to its rivals, it also charges for its software.

This is in contrast, as far as I can tell, with Divvy and Brex and Ramp, companies more focused on signing up great masses of companies and driving revenues from interchange incomes. (Not charging for software that is wrapped around commodity cards is a way to keep sales-friction low, and thus, in theory, customer-growth high.)

But while Airbase wants corporate customers to pay for its software, it’s still growing like all heck. According to an email from Airbase CEO Thejo Kote, the startup’s annual recurring revenue (ARR) has grown by 2.5x this year, and payment volume has “grown 7X on an annualized basis.”

Those are super-good numbers. Adding another company to the success mix, well-known investor Garry Tan said on Twitter that Plate IQ, a company I have yet to meet, is “doing more than $500M in annual transactions and is profitable (real earnings).” For contrast, the relatively young Ramp just announced that it had cleared $100 million in aggregate managed spend.

My takeaway from this spate of reporting is not that any single company is going to win, or that one company is the clear leader. Instead this week’s poking around a single software niche reminded me of just how big the software market is.

How is there room for all of these competing startups to grow so quickly at the same time? The answer is that the global economy is huge, and software is still merrily grinding its way into more and more of its heft. I bet we wind up with three of our five companies in this piece surviving to public-scale, and just two being snapped up by private rivals or public giants.

I suppose this makes me long cloud. Whatever. Just don’t tell VC Twitter.

Market Notes

This week to make things easy, I’ve broken up the rest of the things you need to know into two groups. The first is everything that was not a round. The second is all the rounds. Let’s go:

  • Slack’s venture capital fund is back for more, the parent company is self-funding the project, and the capital pool has doubled in size to $50 million.
  • StockX has reached IPO scale. TechCrunch covered its fundraising news this week, writing at the time that the marketplace for used clothing goods was an IPO candidate. So we took a look. Yep. It’s an IPO candidate.
  • The Information reported this week that SoFi did around $200 million in revenue during Q3, and was EBITDA-positive.
  • Axios reported on the growth of the creator economy. Stop rolling your eyes. It’s more than big enough to take seriously, so get on board. We also chatted about the situation on Equity, if you are into podcasts with jokes.
  • Crypto is back in the headlines, and recent price gains amongst the asset category are not based on pure hype.
  • Robinhood had a tough week. The company’s shot at an IPO if it wants one probably won’t come under siege — it wouldn’t be the only company to go public in recent quarters with some legal matters underway — but it was still not the week that the stock trading company wanted. And its rival Public.com raised precisely as much money as Robinhood had to pay in fines. Ouch.
  • Startup valuations are, in Silicon Valley at least, on the other-side of the COVID-depression.

Now, a stampede of megarounds.

Huge and Important

Our Various & Sundry section this week is anything but. So I renamed it for this final newsletter of the year. Here they are, the rounds both huge and important:

  • Brazil’s Creditas raised $255 million. TechCrunch placed the round amongst a larger wave of Latin America-focused fintech rounds.
  • Zenoti, based in Bellevue near Microsoft, raised $160 million, a round that made it a unicorn. What does it do? Per The Seattle Times, it “makes cloud-computing software for managing spas and salons.” Don’t laugh. Vertical SaaS is huge. Barbershop focused vertical SaaS player Squire was valued at $250 million the other week.
  • Adding another payments-focused round to the newsletter, GoCardless is nearly a unicorn after raising more money this week.
  • And sticking to fintech, France’s Lydia, which “aims to be an all-in-one, in-hand platform for any financial needs” of younger consumers, according to Tech.EU, extended its Series B by $86 million this week. (Accel led that round, and Public’s latest as well. Big week for that firm.)
  • TechCrunch reported that ClickUp has put together a new $100 million round that values the company at $1 billion. It raised $35 million in June. Why do we care about ClickUp? It’s part of a wave of companies that closed two rounds in 2020. Ramp. Welcome. SkyFlow. The list goes on.
  • In the Insurtech world, Bestow raised $70 million for its digital life insurance product. Insurtech has been hot lately, with AgentSync, a player in the space, raising two rounds this year alone.
  • Finally, Paxos, which does crypto work for PayPal among other things, raised $142 million in a mammoth Series C. Chalk this one up to the crypto boom.

And now I shall disappear in a cloud of JUUL mist to lose some more games of Civ 6 to my nemesis, Hugs and and all the best.

Alex

 

 

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

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Clubhouse announces plans for creator payments and raises new funding led by Andreessen Horowitz

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Buzzy live voice chat app Clubhouse has confirmed that it has raised new funding – without revealing how much – in a Series B round led by Andreessen Horowitz through the firm’s partner Andrew Chen. The app was reported to be raising at a $1 billion valuation in a report from The Information that landed just before this confirmation. While we try to track down the actual value of this round and the subsequent valuation of the company, what we do know is that Clubhouse has confirmed it will be introducing products to help creators on the platform get played, including subscriptions, tipping and ticket sales.

This funding round will also support a ‘Creator Grant Program’ being set up by Clubhouse, which will be used to “support emerging Clubhouse creators” according to the startup’s blog post. While the app has done a remarkable job attracting creator talent, including high-profile celebrity and political users, directing revenue towards creators will definitely help spur sustained interest, as well as more time and investment from new creators who are potentially looking to make a name for themselves on the platform, similar to YouTube and TikTok influencers before them.

Of course, adding monetization for users also introduces a method for Clubhouse itself to monetize. The platform is free to all users, and doesn’t yet offer any kind of premium plan or method of charging users, nor is it ad-supported. Adding ways for users to pay other users provides an opportunity for Clubhouse to retain a cut for its services.

The plans around monetization routes for creators appear to be relatively open-ended at this point, with Clubhouse saying it’ll be launching “first tests” around each of the three areas it mentions (tipping, tickets and subscriptions) over the “next few months.” It sounds like these could be similar to something like a Patreon built right into the platform. Tickets are a unique option that would go well with Clubhouse’s more formal roundtable discussions, and could also be a way that more organizations make use of the platform for hosting virtual events.

The startup also announced that it will be starting work on its Android app (it’s been iOS only for now) and that it will also invest in more backend scaling to keep up with demand, as well as support team growth and tools for detecting and prevuing abuse. Clubhouse has come under fire for its failure in regards to moderation and prevention of abuse in the past, so this aspect of its product development will likely be closely watched. The platform will also see changes to discovery aimed at surfacing relevant users, groups (‘clubs’ in the app’s parlance) and rooms.

During a regular virtual town hall the app’s founders host on the platform, CEO Paul Davison revealed that Clubhouse now has 2 million weekly active users. It’s also worth noting that Clubhouse says it now has “over 180 investors” in the company, which is a lot for a Series B – though many of those are likely small, independent investors with very little stake.

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SpaceX sets new record for most satellites on a single launch with latest Falcon 9 mission

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SpaceX has set a new all-time record for the most satellites launched and deployed on a single mission, with its Transporter-1 flight on Sunday. The launch was the first of SpaceX’s dedicated rideshare missions, in which it splits up the payload capacity of its rocket among multiple customers, resulting in a reduced cost for each but still providing SpaceX with a full launch and all the revenue it requires to justify lauding one of its vehicles.

The launch today included 143 satellites, 133 of which were from other companies who booked rides. SpaceX also launched 10 of its own Starlink satellites, adding to the already more than 1,000 already sent to orbit to power SpaceX’s own broadband communication network. During a launch broadcast last week, SpaceX revealed that it has begun serving beta customers in Canada and is expanding to the UK with its private pre-launch test of that service.

Customers on today’s launch included Planet Labs, which sent up 48 SuperDove Earth imaging satellites; Swarm, which sent up 36 of its own tiny IoT communications satellites, and Kepler, which added to its constellation with eight more of its own communication spacecraft. The rideshare model that SpaceX now has in place should help smaller new space companies and startups like these build out their operational on-orbit constellations faster, complementing other small payload launchers like Rocket Lab, and new entrant Virgin Orbit, to name a few.

This SpaceX launch was also the first to deliver Starlink satellites to a polar orbit, which is a key part of the company’s continued expansion of its broadband service. The mission also included a successful landing and recovery of the Falcon 9 rocket’s first-stage booster, the fifth for this particular booster, and a dual recovery of the fairing halves used to protect the cargo during launch, which were fished out of the Atlantic ocean using its recovery vessels and will be refurbished and reused.

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Watch SpaceX’s first dedicated rideshare rocket launch live, carrying a record-breaking payload of satellites

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SpaceX is set to launch the very first of its dedicated rideshare missions – an offering it introduced in 2019 that allows small satellite operators to book a portion of a payload on a Falcon 9 launch. SpaceX’s rocket has a relatively high payload capacity compared to the size of many of the small satellites produced today, so a rideshare mission like this offers smaller companies and startups a chance to get their spacecraft in orbit without breaking the bank. Today’s attempt is scheduled for 10 AM EST (7 AM PST) after a first try yesterday was cancelled due to weather. So far, weather looks much better for today.

The cargo capsule atop the Falcon 9 flying today holds a total of 143 satellites according to SpaceX, which is a new record for the highest number of satellites being launched on a single rocket – beating out a payload of 104 spacecraft delivered by Indian Space Research Organization’s PSLV-C37 launch back in February 2017. It’ll be a key demonstration not only of SpaceX’s rideshare capabilities, but also of the complex coordination involved in a launch that includes deployment of multiple payloads into different target orbits in relatively quick succession.

This launch will be closely watched in particular for its handling of orbital traffic management, since it definitely heralds what the future of private space launches could look like in terms of volume of activity. Some of the satellites flying on this mission are not much larger than an iPad, so industry experts will be paying close attention to how they’re deployed and tracked to avoid any potential conflicts.

Some of the payloads being launched today include significant volumes of startup spacecraft, including 36 of Swarm’s tiny IoT network satellites, and eight of Kepler’s GEN-1 communications satellites. There are also 10 of SpaceX’s own Starlink satellites on board, and 48 of Planet Labs’ Earth-imaging spacecraft.

The launch stream above should begin around 15 minutes prior to the mission start, which is set for 10 AM EST (7 AM PST) today.

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