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Hacking my way into analytics: A creative’s journey to design with data

By Annie Siebert
Sydney Anh Mai Contributor
Sydney Anh Mai is an award-winning product designer at Kickstarter. Her work has appeared on The Verge, Design Weekly and Core 77.

Growing up, did you ever wonder how many chairs you’d have to stack to reach the sky?

No? I guess that’s just me then.

As a child, I always asked a lot of “how many/much” questions. Some were legitimate (“How much is 1 USD in VND?”); some were absurd (“How tall is the sky and can it be measured in chairs?”). So far, I’ve managed to maintain my obnoxious statistical probing habit without making any mortal enemies in my 20s. As it turns out, that habit comes with its perks when working in product.

Growing up, did you ever wonder how many chairs you’d have to stack to reach the sky?

My first job as a product designer was at a small but energetic fintech startup whose engineers also dabbled in pulling data. I constantly bothered them with questions like, “How many exports did we have from that last feature launched?” and “How many admins created at least one rule on this page?” I was curious about quantitative analysis but did not know where to start.

I knew I wasn’t the only one. Even then, there was a growing need for basic data literacy in the tech industry, and it’s only getting more taxing by the year. Words like “data-driven,” “data-informed” and “data-powered” increasingly litter every tech organization’s product briefs. But where does this data come from? Who has access to it? How might I start digging into it myself? How might I leverage this data in my day-to-day design once I get my hands on it?

Data discovery for all: What’s in the way?

“Curiosity is our compass” is one of Kickstarter’s guiding principles. Powered by a desire for knowledge and information, curiosity is the enemy of many larger, older and more structured organizations — whether they admit it or not — because it hinders the production flow. Curiosity makes you pause and take time to explore and validate the “ask.” Asking as many what’s, how’s, why’s, who’s and how many’s as possible is important to help you learn if the work is worth your time.

After going public, once-hot startups are riding a valuation roller coaster

By Alex Wilhelm

To close out the week, a short meditation on value, or, more precisely, how assets are valued in today’s markets.

Do you recall the pre-direct-listing hype Coinbase enjoyed? After reporting its estimated first-quarter financial performance, interest in the domestic cryptocurrency trading giant ran red-hot.

When Coinbase set a $250 per-share direct listing reference price, it was broadly viewed as modest, if not downright low. Of course, a reference price is just that — a reference — so it wasn’t too big a deal. But it also wasn’t surprising that Coinbase shares traded as high as $429.54 on their first day, according to Yahoo Finance data.

Coinbase equity hasn’t topped $400 in any following day and is now under the $300 mark, with more declines set to arrive as trading commences. Its reference price looms, and suddenly a price that felt intensely conservative before Coinbase began to trade is starting to look nearly reasonable.


The Exchange explores startups, markets and money. 

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


There have been other notable declines in value among some recently public, more technologically differentiated companies. The Exchange has watched with something akin to polite confusion as the value of Root, a neo-insurance company, fell to a third of its public-market highs after going public, even though it beat growth expectations in its most recent quarterly report.

We could toss UiPath into our trend of wildly meandering value. The company’s initial IPO price range targeted a price as low as $43 per share. Today it’s worth $76.75 per share in pre-market trading.

No one knows what anything is worth, again. This is the feeling I get while watching the markets work to determine how to value assets as diverse as startups crossing the private-public divide to the value of Bitcoin, which was supposed to keep going up. Until it suddenly reversed gear.

Frankly, we’re still dealing with new-enough models — or big-enough guesses about the future baked into business models — that it’s hard to really value the most uncertain (and therefore most exciting) companies, let alone cryptocurrencies. Let’s discuss.

Value?

How are VCs handling diligence in a world where deals open and close in days, not months?

By Anna Heim

The global venture capital market had a cracking start to the year. Coming off a 2020 high, VC totals in the United States, in Europe, and among competitive verticals like insurtech and AI are on pace to set new records in 2021.

The rapid-fire dealmaking and trend of larger venture checks at higher valuations that The Exchange has tracked for some time require private-market investors to make decisions faster than ever. For venture capitalists, the timeline for reaching conviction around a startup’s thesis and executing due diligence has become compressed.

Some venture capitalists are turning to data to move more quickly. Some are spending more time preparing to be vetted themselves. And some investors are simply doing the work beforehand.


The Exchange explores startups, markets and money.

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


We were tipped off to the concept of pre-diligence during the reporting process for a look into recent fundraising trends in the AI/ML space. Sapphire investor Jai Das, when asked about how he was handling a competitive and swiftly moving market for AI startup investments, said that “most firms are completing their due diligence way before the financing actually happens.”

How does that work in practice? Per Das, startups that raise quick Series A and B rounds are “tracked by [early-stage] investors as soon as they raise their seed financings. So there is no need to do any due diligence during the financing and hence most of these financings are pre-emptive.”

Venture capital: Now more about sales than ever before!

This morning, The Exchange is digging into the question of how VCs are handling diligence in a world where the most attractive deals can open and close faster than ever, and old models of deep diligence and paced dealmaking are outmoded.

Getting to yes

One way that investors are betting on themselves in a bid to speed their diligence and decision-making is by investing in their own tech. That may sound obvious, given that venture capital dollars often land in the accounts of tech-focused companies, but in a business that was previously known for its relationship focus — more on that shortly — the trend is worth considering.

As UiPath closes above its final private valuation, CFO Ashim Gupta discusses his company’s path to market

By Alex Wilhelm

After an upward revision, UiPath priced its IPO last night at $56 per share, a few dollars above its raised target range. The above-range price meant that the unicorn put more capital into its books through its public offering.

For a company in a market as competitive as robotic process automation (RPA), the funds are welcome. In fact, RPA has been top of mind for startups and established companies alike over the last year or so. In that time frame, enterprise stalwarts like SAP, Microsoft, IBM and ServiceNow have been buying smaller RPA startups and building their own, all in an effort to muscle into an increasingly lucrative market.

In June 2019, Gartner reported that RPA was the fastest-growing area in enterprise software, and while the growth has slowed down since, the sector is still attracting attention. UIPath, which Gartner found was the market leader, has been riding that wave, and today’s capital influx should help the company maintain its market position.

It’s worth noting that when the company had its last private funding round in February, it brought home $750 million at an impressive valuation of $35 billion. But as TechCrunch noted over the course of its pivot to the public markets, that round valued the company above its final IPO price. As a result, this week’s $56-per-share public offer wound up being something of a modest down-round IPO to UiPath’s final private valuation.

Then, a broader set of public traders got hold of its stock and bid its shares higher. The former unicorn’s shares closed their first day’s trading at precisely $69, above the per-share price at which the company closed its final private round.

So despite a somewhat circuitous route, UiPath closed its first day as a public company worth more than it was in its Series F round — when it sold 12,043,202 shares sold at $62.27576 apiece, per SEC filings. More simply, UiPath closed today worth more per-share than it was in February.

How you might value the company, whether you prefer a simple or fully-diluted share count, is somewhat immaterial at this juncture. UiPath had a good day.

While it’s hard to know what the company might do with the proceeds, chances are it will continue to try to expand its platform beyond pure RPA, which could become market-limited over time as companies look at other, more modern approaches to automation. By adding additional automation capabilities — organically or via acquisitions — the company can begin covering broader parts of its market.

TechCrunch spoke with UiPath CFO Ashim Gupta today, curious about the company’s choice of a traditional IPO, its general avoidance of adjusted metrics in its SEC filings, and the IPO market’s current temperature. The final question was on our minds, as some companies have pulled their public listings in the wake of a market described as “challenging”.

Why did UiPath not direct list after its huge February raise?

The IPO market is sending us mixed messages

By Alex Wilhelm

If you only stayed up to date with the Coinbase direct listing this week, you’re forgiven. It was, after all, one heck of a flotation.

But underneath the cryptocurrency exchange’s public debut, other IPO news that matters did happen this week. And the news adds up to a somewhat muddled picture of the current IPO market.

To cap off the week, let’s run through IPO news from UiPath, Coinbase, Grab, AppLovin and Zenvia. The aggregate dataset should help you form your own perspective about where today’s IPO markets really are in terms of warmth for the often-unprofitable unicorns of the world.

Recall that we’re in the midst of a slightly more turbulent IPO window than we saw during the last quarter. After seemingly watching every company’s IPO price above-range and then charge higher on opening day, several companies pulled their offerings as the second quarter started. It was a surprise.

Since then we’ve seen Compass go public, but not at quite the level of performance it might have anticipated, and, then, this week, much has happened.

What follows is a mini-digest of IPO news from the week, tagged with our best read of just how bullish (or not) the happening really was:

What we all missed in UiPath’s latest IPO filing

By Alex Wilhelm

Robotic process automation platform UiPath filed its first S-1/A this week, setting an initial price range for its shares. The numbers were impressive, if slightly disappointing because what UiPath indicated in terms of its potential IPO value was a lower valuation than it earned during its final private fundraising. It’s hard to say that a company looking to go public at a valuation north of $25 billion is a letdown, but compared to preceding levels of hype, the numbers were a bit of a shock.


The Exchange explores startups, markets and money. 

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


Here at The Exchange, we wondered if the somewhat slack news regarding UiPath’s potential IPO valuation was a warning to late-stage investors; the number of unicorns being minted or repriced higher feels higher than ever, and late-stage money has never been more active in the venture-backed startup world than it has been recently.

If UiPath were about to eat about $10 billion in worth to go public, it wouldn’t be the best indicator of how some of those late-stage bets will perform.

But in good news for UiPath shareholders, most everyone — ourselves included! — who discussed the company’s price range didn’t dig into the fact that the company first disclosed quarterly results to the same S-1/A filing that included its IPO valuation interval. And those numbers are very interesting, so much so that The Exchange is now generally expecting UiPath to target a higher price interval before it debuts.

That should either limit or close its private/public valuation gap, and, we imagine, lower a few investors’ blood pressure. Let’s look at the numbers.

UiPath’s fascinating 2020

The top-line numbers for UiPath’s 2020 are impressive. As we’ve discussed, the company grew its revenues from $336.2 million in 2019 to $607.6 million in 2020, while boosting its gross profit margin by 7 percentage points to 89% last year. That’s great!

And it improved its net margins from -155% in 2019 to just -15% in 2020. The company’s rapid growth, improving revenue quality and extreme deficit reduction were among the reasons it was a bit surprising to see its estimated public-market value come in so far underneath its final private price.

But let’s dig into the company’s quarterly results — a big thanks to the reader who sent us in this direction — to get a clearer picture of UiPath. Here’s the data:

Image Credits: UiPath filing

Should Dell have pursued a more aggressive debt-reduction move with VMware?

By Ron Miller

When Dell announced it was spinning out VMware yesterday, the move itself wasn’t surprising; there had been public speculation for some time. But Dell could have gone a number of ways in this deal, despite its choice to spin VMware out as a separate company with a constituent dividend instead of an outright sale.

The dividend route, which involves a payment to shareholders between $11.5 billion and $12 billion, has the advantage of being tax-free (or at least that’s what Dell hopes as it petitions the IRS). For Dell, which owns 81% of VMware, the dividend translates to somewhere between $9.3 billion and $9.7 billion in cash, which the company plans to use to pay down a portion of the huge debt it still holds from its $58 billion EMC purchase in 2016.

Dell hopes to have its cake and eat it too with this deal: It generates a large slug of cash to use for personal debt relief while securing a five-year commercial deal that should keep the two companies closely aligned.

VMware was the crown jewel in that transaction, giving Dell an inroad to the cloud it had lacked prior to the deal. For context, VMware popularized the notion of the virtual machine, a concept that led to the development of cloud computing as we know it today. It has since expanded much more broadly beyond that, giving Dell a solid foothold in cloud native computing.

Dell hopes to have its cake and eat it too with this deal: It generates a large slug of cash to use for personal debt relief while securing a five-year commercial deal that should keep the two companies closely aligned. Dell CEO Michael Dell will remain chairman of the VMware board, which should help smooth the post-spinout relationship.

But could Dell have extracted more cash out of the deal?

Doing what’s best for everyone

Patrick Moorhead, principal analyst at Moor Insights and Strategies, says that beyond the cash transaction, the deal provides a way for the companies to continue working closely together with the least amount of disruption.

“In the end, this move is more about maximizing the Dell and VMware stock price [in a way that] doesn’t impact customers, ISVs or the channel. Wall Street wasn’t valuing the two companies together nearly as [strongly] as I believe it will as separate entities,” Moorhead said.

Coinbase’s direct listing alters the landscape for fintech and crypto startups

By Anna Heim

Coinbase’s direct listing was a massive finance, startup and cryptocurrency event that impacted a host of public and private investors, early employees, and crypto-enthusiasts. Regardless of where one sits in the broader tech and venture world, Coinbase storming north of a $100 billion valuation during its first day of trading was the biggest startup happening of the year.

The transaction’s effects will be felt for some time in the public market, but also among the startups and capital that comprise the private market.

In the buildup to Coinbase’s flotation — and we’d argue especially after it released its blockbuster Q1 2021 results — there was a general expectation that the unicorn’s direct listing would provide a halo effect for other startups in the space. Anthemis’ Ruth Foxe Blader told The Exchange, for example, that “the Coinbase listing shows this great inflection point for crypto,” with another “wave” of startup work in the space coming up.

The widely held perspective raised two questions: Will the success of Coinbase’s direct listing bolster private investment in crypto-focused startups, and will that success help other areas of financially focused startup work garner more investor attention?


The Exchange explores startups, markets and money.

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


Presuming that Coinbase’s listing will positively impact its niche and others around it is not a stretch. But to make sure we weren’t misreading sentiment, and to get deeper into the why of the concept, The Exchange reached out to venture capitalists who invest in the broader fintech world to get their take. We even roped in an analyst or two to round out our panel.

The answer is not a simple yes. There are several ways to approach investing in the cryptocurrency space — from buying coins themselves, to investing in mainstream-ish institutions like legal exchanges, to the more exotic, like supporting efforts on the forefront of the decentralized blockchain world. And while it is somewhat clear that most folks expect more capital to be available for crypto projects, it’s not clear where it may end up inside the market.

We’ll wrap by considering what impact Coinbase’s direct listing will have, if any, on non-crypto fintech venture capital investing.

After yesterday’s examination of how blazingly hot the venture capital market looked in the first quarter, we’re again trying to gauge the private market’s temperature. Let’s talk to some folks on the ground and hear what they are seeing.

Are crypto startups less risky now?

Coinbase’s direct listing floated a company that is worth more than all but two major blockchains, namely Ethereum and Bitcoin. Several other chains have aggregate coin values in the 11-figure range, but a 12-digit worth is still rare among crypto assets.

The scale of Coinbase’s valuation post-listing matters, according to Chainalysis Chief Economist Phillip Gradwell. Gradwell told The Exchange that “Coinbase’s $100 billion valuation today demonstrates that venture investors can make great returns from putting money into crypto companies, not just cryptocurrencies. That proof point is good for the entire ecosystem.”

More simply, it is now eminently reasonable to invest in the companies working in the crypto space instead of merely putting capital to work hard-buying coins themselves. The other way to consider the comment is to realize that Coinbase’s share price appreciation is steep enough since its 2012 founding to rival the returns of some coins over the same time frame.

Cleo Capital‘s Sarah Kunst expanded on the point, telling The Exchange in an email that “it’s now credible to say you’re a crypto startup and plan to IPO [versus] having acquisition or ICO be the only proven exit paths in the U.S.”

Inside the US’ epic first-quarter venture capital results

By Anna Heim

It’s no surprise that the venture capital market was incredibly active in the United States during the first quarter of 2021, but precisely how strong has only recently become clear. This morning, we’re digging into the data.

According to a report from PitchBook, venture capitalists unleashed a wave of capital in the first three months of the year. So much, in fact, that funding in the United States nearly doubled compared to the same quarter of 2020.

We’ll dig into specific numbers and trends regarding aggregate venture capital results in a moment, but what stood out the most while digesting the Q1 dataset was how strong VC results appeared across different states; a solo late-stage boom the quarter was not.

Seed deal volume appeared strong and early-stage venture capital activity could reach new highs in 2021, but late-stage venture capital activity in the United States is already setting records in both deal count and invested dollars.


The Exchange explores startups, markets and money.

Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.


We’ll parse the headline numbers and then dive into seed and super late-stage data with the help of Sarah Kunst of Cleo Capital, Jenny Lefcourt of Freestyle Capital, Iris Choi of Floodgate and Laela Sturdy of CapitalG.

With their help, we’ll contextualize the numbers and weave anecdotal observations into what the charts and graphs tell us. Especially in the case of seed data, which is famously laggy, added context is crucial. Let’s go!

A Q1 overview

According to PitchBook’s report, some 3,987 venture capital rounds were closed in the United States during Q1 2021. Those deals were worth $69 billion, a figure up nearly 93% from 2020’s first-quarter results.

In broad strokes, the United States had a crushing venture capital start to the new year, pandemic be damned. That is especially true when we consider 2020’s full-year figures. Last year, venture capitalists deployed some $166 billion into U.S.-based startups across 12,546 rounds. In contrast, if the first quarter’s pace was maintained during the rest of 2021, the United States would see around 16,000 rounds worth around $280 billion.

Of course, we cannot see the future, so those projections are merely shared to underscore how active the first quarter proved to be; we’ll have to wait for at least another quarter’s data to confidently predict full-year records for 2021.

Powering the rapid start to the venture capital year was a holistic boom: Seed deal volume is forecasted to have set a multi-year high, perhaps matching the historically strong Q2 2018 period. Early-stage venture capital during Q1 2021 was also robust, with $14.5 billion deployed across 1,170 rounds. Both numbers set a pace for fresh records in 2021.

And then there was late-stage dealmaking, which soared in the first quarter. In 2020, late-stage venture capital deals were worth $111.4 billion raised from 3,504 rounds. In the first quarter of 2021, some $51.9 billion was invested into late-stage startups across 1,291 deals.

Valuations and round sizes continued to rise across the board. If there was a better time to raise a big whack of venture capital as a U.S.-based startup, we cannot recall it. And the data seems to scream that the good times are now as good, or gooder, than ever.

5 questions about Grab’s epic SPAC investor deck

By Alex Wilhelm

As expected, Southeast Asian super-app Grab is going public via a SPAC, or blank check company.

The combination, which TechCrunch discussed over the weekend, will value Grab on an equity basis at $39.6 billion and will provide around $4.5 billion in cash, $4.0 billion of which will come in the form of a private investment in public equity, or PIPE. Altimeter Capital is putting up $750 million in the PIPE — fitting, as Grab is merging with one of Alitmeter’s SPACs.

Grab, which provides ride-hailing, payments and food delivery, will trade under the ticker symbol “GRAB” on Nasdaq when the deal closes. The announcement comes a day after Uber told its investors it was seeing recovery in certain transactions, including ride-hailing and delivery.

Uber also told the investing public that it’s still on track to reach adjusted EBITDA profitability in Q4 2021. The American ride-hailing giant did a surprising amount of work clearing brush for the Grab deal. Extra Crunch examined Uber’s ramp towards profitability yesterday.

This morning, let’s talk through several key points from Grab’s SPAC investor deck. We’ll discuss growth, segment profitability, aggregate costs and COVID-19, among other factors. You can read along in the presentation here.

How harshly did COVID-19 impact the business?

The impact on Grab’s operations from COVID-19 resembles what happened to Uber in that the company’s deliveries business had a stellar 2020, while its ride-hailing business did not.

From a high level, Grab’s gross merchandise volume (GMV) was essentially flat from 2019 to 2020, rising from $12.2 billion to $12.5 billion. However, the company did manage to greatly boost its adjusted net revenue over the same period, which rose from $1.0 billion to $1.6 billion.

Giving EV batteries a second life for sustainability and profit

By Aria Alamalhodaei

Electric cars and trucks seem to have everything going for them: They don’t produce tailpipe emissions, they’re quieter than their fossil-fuel-powered counterparts and the underlying architecture allows for roomier and often sleeker designs. But the humble lithium-ion battery powering these cars and trucks leads a difficult life. Irregular charging and discharge rates, intense temperatures and many partial charge cycles cause these batteries to degrade in the first five to eight years of use, and eventually, they end up in a recycling facility.

Instead of sending batteries straight to recycling for raw material recovery — and leaving unrealized value on the table — startups and automakers are finding ways to reuse batteries as part of a small and growing market.

Low consumer uptake and the relatively recent introduction of EVs to the market has kept the supply of used batteries low, but automakers are already pursuing a number of second-life projects.

That’s because the average electric vehicle lithium-ion battery can retain up to 70% of its charging capacity after being removed. The business proposition for second-life batteries is therefore intuitive: Before sending the battery to a recycler, automakers can potentially generate additional revenue by putting it to use in another application or selling it to a third party.

Low consumer uptake and the relatively recent introduction of EVs to the market has kept the supply of used batteries low, but automakers are already pursuing a number of second-life projects.

To name only a few such projects that have popped up in recent years, Nissan is using old batteries to power small robots; French carmaker Groupe Renault, with partners, is launching stationary energy storage systems made with old EV batteries; and Audi Environmental Foundation, the daughter organization of Audi AG, worked with Indian startup Nunam to build solar nanogrids out of used e-tron battery modules.

Other OEMs, like Lucid Motors, BMW and Proterra, are incorporating reuse principles into their battery design. In fact, Lucid has built its batteries to work across its electric vehicle and energy storage products, including in second-life uses, Chief Engineer Eric Bach told TechCrunch. And BMW has used a “plug-and-play” concept with the batteries in its i3 model so that they can be easily removed and inserted into second-life applications, BMW spokesperson Weiland Bruch said in an interview with TechCrunch. “We believe that battery second-life will become its own self-standing business field,” he added.

A new lease on battery life

Automakers are increasingly bullish on second-life uses, though the size of their role in this budding market is still unclear. Matthew Lumsden, CEO of U.K.-based Connected Energy, told TechCrunch that he has noticed a shift in the past two years where some OEMs have begun viewing batteries as an asset rather than a liability.

Will Topps’ SPAC-led debut expand the bustling NFT market?

By Alex Wilhelm

Twitter is abuzz with the news that Topps, a company perhaps best known for making collectible trading cards, is going public via a SPAC.

The reverse merger with its chosen blank-check company values the combination on an equity basis at $1.163 billion. That makes Topps some sort of unicorn. And because it has both e-commerce and digital angles, Topps is technically a fruit tech company.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Why do we care? We care because Topps and its products are popular with the same set of folks who are very excited about creating rare digital items on particular blockchains. Yes, the baseball card company is going public in a debut that could easily be read as a way to put money into the NFT craze without actually having to buy cryptocurrencies and go speculating itself.

And Topps apparently owns a number of assets in the candy space, which I find whimsical.

So let’s have a small giggle as we go through the Topps deck and then ask if the company is being valued on its actual, and modestly attractive, present-day business or on possible revenues from future NFT-related activities.

So, trading cards

What is Topps? A mix of business units that it breaks down into four categories: Physical Sports and Entertainment (trading cards), Digital Sports and Entertainment (digital collectibles, apps and games), Gift Cards (gift cards for external brands), and Confections (candy).

In terms of scale, the company’s physical goods and confection businesses are by far its leading revenue drivers. Here’s the data:

Chart showing Topps revenue

Image Credits: Topps investor presentation

First, observe that the company’s pro forma adjusted EBITDA nearly doubled from 2019 to 2020. That’s an aggressive expansion in hyper-adjusted profitability. And note how much the company’s physical sports business grew from 2019 to 2020; a nearly 50% gain helped the company grow nicely last year.

LG’s exit from the smartphone market comes as no surprise

By Brian Heater

For those who follow the space, LG will be remembered fondly as a smartphone trailblazer. For a decade-and-a-half, the company was a major player in the Android category and a driving force behind a number of innovations that have since become standard.

Perhaps the most notable story is that of the LG Prada. Announced a month before the first iPhone, the device helped pioneer the touchscreen form factor that has come to define virtually every smartphone since. At the time, the company openly accused Apple of ripping off its design, noting, “We consider that Apple copycat Prada phone after the design was unveiled when it was presented in the iF Design Award and won the prize in September 2006.”

This July, the company will stop selling phones beyond what remains of its existing inventory.

LG has continued pushing envelopes — albeit to mixed effect. In the end, however, the company just couldn’t keep up. This week, the South Korean electronics giant announced it will be getting out of the “incredibly competitive” category, choosing instead to focus on its myriad other departments.

The news comes as little surprise following months of rumors that the company was actively looking for a buyer for the smartphone unit. In the end, it seems, none were forthcoming. This July, the company will stop selling phones beyond what remains of its existing inventory.

The smartphone category is, indeed, a competitive one. And frankly, LG’s numbers have pretty consistently fallen into the “Others” category of global smartphone market share figures ruled by names like Samsung, Apple, Huawei and Xiaomi. The other names clustered beneath the top five have been, more often than not, other Chinese manufacturers like Vivo.

RPA market surges as investors, vendors capitalize on pandemic-driven tech shift

By Ron Miller

When UIPath filed its S-1 last week, it was a watershed moment for the robotic process automation (RPA) market. The company, which first appeared on our radar for a $30 million Series A in 2017, has so far raised an astonishing $2 billion while still private. In February, it was valued at $35 billion when it raised $750 million in its latest round.

RPA and process automation came to the fore during the pandemic as companies took steps to digitally transform. When employees couldn’t be in the same office together, it became crucial to cobble together more automated workflows that required fewer people in the loop.

RPA has enabled executives to provide a level of workflow automation that essentially buys them time to update systems to more modern approaches while reducing the large number of mundane manual tasks that are part of every industry’s workflow.

When UIPath raised money in 2017, RPA was not well known in enterprise software circles even though it had already been around for several years. The category was gaining in popularity by that point because it addressed automation in a legacy context. That meant companies with deep legacy technology — practically everyone not born in the cloud — could automate across older platforms without ripping and replacing, an expensive and risky undertaking that most CEOs would rather not take.

RPA has enabled executives to provide a level of workflow automation, a taste of the modern. It essentially buys them time to update systems to more modern approaches while reducing the large number of mundane manual tasks that are part of just about every industry’s workflow.

While some people point to RPA as job-elimination software, it also provides a way to liberate people from some of the most mind-numbing and mundane chores in the organization. The argument goes that this frees up employees for higher level tasks.

As an example, RPA could take advantage of older workflow technologies like OCR (optical character recognition) to read a number from a form, enter the data in a spreadsheet, generate an invoice, send it for printing and mailing, and generate a Slack message to the accounting department that the task has been completed.

We’re going to take a deep dive into RPA and the larger process automation space — explore the market size and dynamics, look at the key players and the biggest investors, and finally, try to chart out where this market might go in the future.

Meet the vendors

UIPath is clearly an RPA star with a significant market share lead of 27.1%, according to IDC. Automation Anywhere is in second place with 19.4%, and Blue Prism is third with 10.3%, based on data from IDC’s July 2020 report, the last time the firm reported on the market.

Two other players with significant market share worth mentioning are WorkFusion with 6.8%, and NTT with 5%.

Private equity, a SPAC and an IPO walk into a bar

By Alex Wilhelm

The first quarter of 2021 was a busy season for technology exits. Coming off a hot period in the final quarter of 2020, it was no surprise that tech upstarts pursued liquidity through a variety of mechanisms as the new year began.

There were IPOs, there were direct listings, there were PE deals. Hell, we even saw enough SPACs that we lost track of a few; amid all the noise, you’ll miss the occasional note no matter how well-tuned your ear.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Each path is still open for later-stage startups to pursue exits: The IPO market was welcoming until a few minutes ago and private equity firms are stacked with cash and willing to pay higher multiples than they might in more normal times. And there are sufficient SPACs to take the entire recent Y Combinator class public.

Choosing which option is best from a buffet’s worth of possibilities is an interesting task for startup CEOs and their boards.

DigitalOcean went public via a traditional IPO, raising a slug of capital in the process. The SMB-focused public cloud company likely felt like a somewhat obvious IPO candidate when you read its results. The Exchange spoke with the company’s CEO, Yancey Spruill, about the choice.

Latch, in contrast, decided that a SPAC was its best route out the gate. The Exchange caught up with the company’s CFO, Garth Mitchell, about the transaction and why it made sense for his company.

And, finally, The Exchange spoke with AlertMedia’s founder and CEO, Brian Cruver, about his decision to sell his Texas-based company to a private equity firm.

To prevent this post from reaching an astronomic word count, we’ll give a brief overview of each deal and then summarize the company’s views about why their liquidity choice was the right one.

Three paths to liquidity

Kicking off with DigitalOcean, a few notes: First, the company has been pretty darn public about its growth in the last few years. We knew that it had an annualized run rate of around $200 million in 2018, $250 million in 2019 and around $300 million in the first half of 2020. It later announced that it hit that mark in May of last year.

So when DigitalOcean decided to go public, we weren’t bowled over. The company wound up pricing at $47 per share, the high end of its range. Since then, its stock has struggled somewhat, falling below $37 per share before recovering to $43.80 at the end of trading yesterday.

Enough of all that. Why did the company choose to go public via a traditional IPO? Spruill said his company looked at SPAC deals and direct listings. It selected the IPO route because it fit the company’s goals of generating a broad base of shareholders while creating a branding opportunity.

The cost of an IPO is comparable, he added, to other exit options. Spruill also praised the IPO process itself, noting that its rigorous requirements made DigitalOcean a better company.

Earlier in our chat, I asked Spruill a question that I put to every CEO on IPO day: How are you feeling? It’s a bit of a sop, but it sometimes elicits insights from executives and founders who, after weeks of discussing their companies’ inner workings, are asked a rare personal question.

Spruill said he felt incredible and that nothing could replicate an IPO as the culmination of so much work put into building a company and its team. If you add up the wins and losses over time, with more of the former than the latter, and can cross the finish line with the right metrics and market, you can earn a spot to be “grilled” by the “best investors,” he said.

Those investors put $750 million or so into his company, Spruill added. Funds that it can use to retire debt and free up more cash flow. Not a bad day, I’d say.

How is edtech spending its extra capital?

By Natasha Mascarenhas

Edtech unicorns have boatloads of cash to spend following the capital boost to the sector in 2020. As a result, edtech M&A activity has continued to swell. The idea of a well-capitalized startup buying competitors to complement its core business is nothing new, but exits in this sector are notable because the money used to buy startups can be seen as an effect of the pandemic’s impact on remote education.

In the past week, the consolidation environment is making a clear statement.

The data agrees. Per Crunchbase data, there were 45 edtech exits in 2019 and 24 edtech exits so far in 2021. The same database shows just 35 exits for all of 2020. As we discussed nearly six months ago, the ability to buy (and be bought) has changed.

In the past week, the consolidation environment is making a clear statement: Pandemic-proven startups are scooping up talent — and fast. Kahoot, which is set to list on the Oslo Stock Exchange within months, has bought three businesses within the past 12 months. Quizlet, which became a unicorn nearly one year ago, made its first acquisition ever last week.

To understand more about this activity, I caught up with Quizlet CEO Matthew Glotzbach and Kahoot CEO Eilert Giertsen Hanoa. We talked about trends in the space including lifelong learning, self-directed learning and more.

Q&A is a lucrative business

“To be successful students in the past decade or two, it has required self-direction,” Glotzbach said simply a few minutes into our chat. “Quizlet as a platform is helping to empower that self-directed learner and give them the tools they need to really be successful.”

To further this goal, Quizlet acquired problem-solving tool Slader last week. Unfortunately, the price of the deal was not disclosed (but don’t worry, we’ll have numbers in the next section). What we do know is that it’s the startup’s latest move to solidify its focus as a tech-powered tutoring tool rather than a simple flashcard app.

Currently, Quizlet uses its data around flashcard sets, questions and trained natural language processing tools to understand how students might respond to certain prompts. Artificial intelligence gives the company a little more flexibility to understand the different ways a student could correctly answer the same question.

What to make of Deliveroo’s rough IPO debut

By Alex Wilhelm

Deliveroops.

After a lackluster IPO pricing run, shares of Deliveroo are lower today, marking a disappointing debut for the hot delivery company.

A good question to ask at this juncture is why Deliveroo struggled with its IPO during a historically strong moment for tech flotations. The European unicorn listed on the London Stock Exchange, however, possibly placing its public offering in a different climate than recent IPO successes listed in the United States.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


TechCrunch noted on Monday that there were local concerns regarding Deliveroo’s governance and treatment of workers. At the time, however, those worries merely led to a decrease in the company’s IPO valuation.

Why did Deliveroo struggle when it began to trade? Is it suffering from cultural dissonance between its high-growth model and more conservative European investors? Let’s peek at the numbers and find out.

Deliveroo versus DoorDash

To ground us, let’s explore how differently the public markets value Deliveroo and DoorDash. If they are valued somewhat closely, we’ll be able to dismiss the question of whether the British delivery giant is really being treated with more skepticism than its American comp.

Not that we care, really, one way or the other about any single company’s value. But we do care if listing on a European exchange — I refuse to acknowledge Brexit this morning — means that companies valuing growth over profits are going to generate more stick than praise when they list.

So, briefly, here’s the data we need to make our comparison. We’ll start with DoorDash:

  • DoorDash 2020 revenue: $2.886 billion
  • DoorDash 2020 revenue growth (YoY): 226%
  • DoorDash market cap: $41.98 billion
  • Implied 2020 revenue multiple: 14.54x

And now, Deliveroo:

  • Deliveroo 2020 revenue: £1.191 billion
  • Deliveroo 2020 revenue growth (YoY): 54.3%
  • Deliveroo market cap: £5.55 billion
  • Implied 2020 revenue multiple: 4.66x

Is Substack really worth $650M?

By Alex Wilhelm

Substack didn’t invent the paid newsletter, but the startup’s early success with the model is enticing previous backers to more than double down on the media startup.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Last evening, Axios reported that Substack is “raising $65 million in new venture capital” at a valuation of “around $650 million.” As you’ve already guessed, Axios goes on to report that Andreessen Horowitz (a16z) will likely lead the investment.

That we’re seeing a16z pour more capital into what we could call the alt-media space is not a surprise. The investing group is ladling even more cash into its in-house media efforts and has put a small archipelago of capital into audio-based social media app Clubhouse. Its internal publishing schedule is in part an attempt to get around traditional media; the Clubhouse universe is an inverted one in which tech investors are celebrities, producers and gatekeepers. And Substack is a place where publications have bled some well-known talent, shifting the center of gravity in media.

You can detect the theme.

Regardless, Substack’s new valuation and investment are eye-catching. This morning, I want to collect all that we can regarding Substack’s historical growth so that we can chew on its new valuation from the best vantage point. Let’s go!

 $650 million?

A little history to kick us off. Crunchbase counts Substack’s total funding to date at $17.4 million. PitchBook puts the number at $21.21 million, inclusive of debt. Both sources agree that the company’s most recent round came in July 2019. PitchBook pegs the company’s valuation at $48.65 million at that date.

Raising $17 million in cash around 20 months ago, regardless of debt, is an amount of capital that the company could easily have burned through by now. Raising more funds is therefore not a surprise.

But the size of the new round is notable, as is its constituent valuation. Series A and B rounds have been growing in size in recent years. But a $65 million Series B would stand out, even by 2021 standards. Not shockingly so, but enough that any company raising that sum at its implied level of maturity would demand our attention. That we’re all familiar with Substack only makes the sum more curious.

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