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The next Zoom wants to be nothing like Zoom

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In the past few months, there hasn’t been one conversation I’ve had about remote work that doesn’t include a mention of Hopin, a virtual events platform last valued at $2.1 billion.

For a company only a little older than a year, Hopin has a wild growth story. It grew its ARR from $0 to $20 million in nine months. It scooped up two businesses to differentiate its business, including StreamYard for $250 million just this week. And its last financing round left the company’s valuation at $2.1 billion.

Hopin’s growth amid Zoom’s fatigue is giving validation to a whole crop of remote-work-focused startups. I see startups in the category sitting in two camps: Either you’re betting that users want a more passive way to interact with video or you’re betting that users want a more active way to interact with video.

This week, for example, I wrote about Rewatch, which creates internal private channels for startups to archive all their videoconferencing meetings. The company is essentially turning live meetings into transcribed documents that employees can sift through on their own time, shifting from synchronous to asynchronous.

In contrast, I also covered Teamflow, a platform that wants to give a virtual space to companies to recreate the serendipity and productivity of an office. Unlike Rewatch, Teamflow thinks that employees want there to be more live moments in a distributed world.

Both previously in-stealth companies cited Hopin as an example of the need for innovation around how we interact virtually. Rewatch and Teamflow, respectively, see Zoom as a plug-in or competitor – not inspiration.

As I mentioned in this week’s podcast, it’s a dynamic I expect to play out even more over the next few months, as we evolve from a Zoom world to a Zoom alternative world. I want to hear from you, even if you disagree, about what companies in the remote work space should be on my radar. E-mail me at natasha.mascarenhas@techcrunch.com or tweet me @nmasc_ with companies you think should be on my remote-work radar.

The power of platform

This week, the U.S. Capitol building was stormed by pro-Trump insurrectionists in a fatal riot. Many in the tech community blamed Jack Dorsey and Mark Zuckerberg for not limiting hate speech on their respective platforms, thus stoking flames of domestic terrorism.

Here’s what to know:

Even as many see the response as too little too late, the events mark a crucial change in the way that regulation between government and tech works.

Etc: Reggie James, CEO and founder of Eternal, framed the issue in a tweet:

Image: Bryce Durbin/TechCrunch

FTC versus DTC

Sticking to our government and tech theme, P&G has officially terminated its plan to acquire razor startup, Billie, after the FTC sued over antitrust concerns.

Here’s what to know: Billie was founded in 2017 with the goal of fighting the “pink tax” on goods marketed to women, including razors and body wash. It was going to be acquired by P&G after raising just $35 million in venture capital.

Etc: Direct-to-consumer brands are not happy. The failed deal is not-so-subtly signaling to DTC brands that there is a cap to their scale, at least in the FTC’s eyes. Government regulation and limited scale also could hurt VC interest in the category.

The optimistic news is that VC funding might be falling out of favor with top D2C brands.

Many product-based brands, as it turns out, are no longer interested in chasing venture capital, playing the “grow-at-all-costs” game and relinquishing partial control to investors, despite the pandemic and the uncertain circumstances many founders find themselves facing.

Image Credits: Billie

IPOs, a direct listing, and sky-high valuations

My colleague Alex puts together a brilliant newsletter each week after his column, The Exchange. Subscribe to it for his in-depth analysis on the IPO market and late-stage startups. In the meantime, though…

Here’s what to know:

Etc: The Roblox Gambit

Green helium balloon carrying pink piggy bank with white strings on blue sky

Around TechCrunch

Remembering TechCrunch Japan’s Hirohide Yoshida (1971-2020)

Extra Crunch Live is back in 2021, connecting founders with tech giants and each other

A directory of the most active and engaged investors in VC: The TechCrunch List

The Mixtape Podcast: Behind the curtain of diversity theater

Across the week

Seen on TC

Elon Musk has a new title: world’s richest person

Waymo is dropping the term ‘self-driving,’ but not everyone in the industry is on board

VCs dispense political niceties during capitol riots: ‘Never talk to me again’

California vegan egg startup Eat Just yokes itself to China’s fast food chain

Detroit’s Ludlow Ventures goes for fund four

Seen on EC

Revenue-based financing: The next step for private equity and early-stage investment

5 questions about 2021’s startup market

What’s going on with fintech venture capital investment?

VCs discuss gaming’s biggest infrastructure investment opportunities in 2021

The tech-powered wave of smart, not slow, tutoring sessions

@EquityPod

If you’re new here, welcome! Equity is TechCrunch’s venture capital-focused podcast. I chat with Alex and Danny about the most important tech news each week, from early-stage startups to IPOs, and crack a few jokes in the meantime. Produced by Chris, Equity is a perfect appetizer to this newsletter.

Despite your wishes for a slower and perhaps more uneventful year, tech clearly isn’t slowing down in 2021. The Equity team had a mountain of news to get through, from Twitter’s very active checkbook to a $185 million Series A round.

Here’s what you’ll hear about if you tune into our debut full-team episode for the year:

  • Why Hopin might be the fastest growing story of this era
  • How, and why, a Utah-based expense management company founded in 2018 is already a unicorn
  • What does a slew of acquisitions from Twitter and Amazon mean for the exit environment?
  • And a tip just for you: a ton of VC firms squeezed in SEC filings on New Years Eve bringing hundreds of millions of capital to potential startups.

Convinced? Good. Listen here, and make sure to check out our bonus episode with Roblox and gaming news that comes out on Saturday.

 

 

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

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Smart lock maker Latch teams with real estate firm to go public via SPAC

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This week, Latch becomes the latest company to join the SPAC parade. Founded in 2014, the New York-based company came out of stealth two years later, launching a smart lock system. Though, like many companies primarily known for hardware solutions, Latch says it’s more, offering a connected security software platform for owners of apartment buildings.

The company is set to go public courtesy of a merger with blank check company TS Innovation Acquisitions Corp. As far as partners go, Tishman Speyer Properties makes strategic sense here. The New York-based commercial real estate firm is a logical partner for a company whose technology is currently deployed exclusively in residential apartment buildings.

“With a standard IPO, you have all of the banks take you out to all of the big investors,” Latch founder and CEO Luke Schoenfelder tells TechCrunch. “We felt like there was an opportunity here to have an extra level of strategic partnership and an extra level of product expansion that came as part of the process. Our ability to go into Europe and commercial offices is now accelerated meaningfully because of this partnership.

The number of SPAC deals has increased substantially over the past several months, including recent examples like Taboola. According to Crunchbase, Latch has raised $152 million, to date. And the company has seen solid growth over the past year — not something every hardware or hardware adjacent company can say about the pandemic.

As my colleague Alex noted on Extra Crunch today, “Doing some quick match, Latch grew booked revenues 50.5% from 2019 to 2020. Its booked software revenues grew 37.1%, while its booked hardware top line expanded over 70% during the same period.”

“We’ve been a customer and investor in Latch for years,” Tishman Speyer President and CEO Rob Speyer tells TechCrunch. “Our customers — the people who live in our buildings — love the Latch product. So we’ve rolled it out across our residential portfolio […] I hope we can act as both a thought partner and product incubator for them.”

While the company plans to expand to commercial offices, apartment buildings have been a nice vertical thus far — meaning the company doesn’t have to compete as directly in the crowded smart home lock category. Among other things, it’s probably a net positive if you’re going head to head against, say Amazon. That the company has built in partners in real estate firms like Tishman Speyer is also a net positive.

Schoenfelder says the company is looking toward such partnerships as test beds for its technology. “Our products have been in the field for many years in multifamily. The usage patterns are going to be slightly different in commercial offices. We think we know how they’re going to be different, but being able to get them up and running and observe the interaction with products in the wild is going to be really important.”

The deal values Latch at $1.56 billion and is expected to close in Q2.

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AT&T may keep majority ownership of DirecTV as it closes in on final deal

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A DirecTV satellite dish mounted to the outside of a building.

Enlarge / A DirecTV satellite dish seen outside a bar in Portland, Oregon, in October 2019. (credit: Getty Images | hapabapa)

AT&T is reportedly closing in on a deal to sell a stake in DirecTV to TPG, a private-equity firm.

Unfortunately for customers hoping that AT&T will relinquish control of DirecTV, a Reuters report on Friday said the pending deal would give TPG a “minority stake” in AT&T’s satellite-TV subsidiary. On the other hand, a private-equity firm looking to wring value out of a declining business wouldn’t necessarily be better for DirecTV customers than AT&T is.

It’s also possible that AT&T could cede operational control of DirecTV even if it remains the majority owner. CNBC in November reported on one proposed deal in which “AT&T would retain majority economic ownership of the [DirecTV and U-verse TV] businesses, and would maintain ownership of U-verse infrastructure, including plants and fiber,” while the buyer of a DirecTV stake “would control the pay-TV distribution operations and consolidate the business on its books.”

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Fintechs could see $100 billion of liquidity in 2021

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Three years ago, we released the first edition of the Matrix Fintech Index. We believed then, as we do now, that fintech represents one of the most exciting major innovation cycles of this decade. In 2020, all the long-term trends forcing change in this sector continued and even accelerated.

The broad movement away from credit toward debit, particularly among younger consumers, represents one such macro shift. However, the pandemic also created new, unforeseen drivers. Among them, millennials decamped from their rentals in crowded cities to accelerate their first home purchase, to the benefit of proptech companies and challenger mortgage players alike.

E-commerce saw an enormous acceleration in growth rates, furthering adoption of online payments platforms. Lastly, low interest rates and looming inflation helped pave the way for the price of Bitcoin to charge toward $30,000. In short, multiple tailwinds combined to produce a blockbuster year for the category.

In this year’s refresh of the Matrix Fintech Index, we’ll divide our attention into three parts. First, a look at the public stocks’ performance. Second, liquidity. Third, we highlight one major trend in the sector: Buy Now Pay Later, or BNPL.

Public fintech stocks rose 97% in 2020

For the fourth straight year, the publicly traded fintechs massively outperformed the incumbent financial services providers as well as every mainstream stock index. While the underlying performance of these companies was strong, the pandemic further bolstered results as consumers avoided appearing in-person for both shopping and banking. Instead, they sought — and found — digital alternatives.

For the fourth straight year, the publicly traded fintechs massively outperformed the incumbent financial services providers as well as every mainstream stock index.

Our own representation of the public fintechs’ performance is the Matrix Fintech Index — a market cap-weighted index that tracks the progress of a portfolio of 25 leading public fintech companies. The Matrix fintech Index rose 97% in 2020, compared to a 14% rise in the S&P 500 and a 10% drop for the incumbent financial service companies over the same time period.

 

2020 performance of individual fintech companies vs. SPX

2020 performance of individual fintech companies versus S&P 500. Image Credits: PitchBook

 

Fintech incumbents and new entrants vs. the S&P 500

Fintech incumbents and new entrants versus the S&P 500. Image Credits: PitchBook

E-commerce undoubtedly stood out as a major driver. As a category, retail e-commerce grew 35% YoY as of Q3, propelling PayPal and Shopify to add over $160 billion of market capitalization over the year. For its part, PayPal in the third quarter signed up 15 million net new active accounts (its highest ever).

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