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Will fintech unicorn Flywire’s proposed IPO reach escape velocity?

By Alex Wilhelm

It’s a big morning for fintech startups today: Flywire, a Boston-based magnet for venture capital, has filed to go public.

Flywire is a global payments company that attracted more than $300 million as a startup, according to Crunchbase, most recently raising a $60 million Series F last month. We don’t have its most recent valuation, but PitchBook data indicates that the company’s February 2020, $120 million round valued Flywire at $1 billion on a post-money basis.

So what we’re looking at here is a fintech unicorn IPO. A great way to kick off the week, to be honest, though I’d thought that Robinhood would be the next such debut.

Fintech venture capital activity has been hot lately, which makes the Flywire IPO interesting. Its success or failure could dictate the pace of fintech exits and fintech startup valuations in general, so we have to care about it.


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


Regardless, we’re doing our regular work this morning. First, what does Flywire do and with whom does it compete? Then, a closer look at its financial results as we hope to get our hands around its revenue quality, aggregate economics and growth prospects.

After that, we’ll discuss valuations and which venture capital groups are set to do well in its flotation. The company had a number of backers, but Spark Capital, Temasek, F-Prime Capital, and Bain Capital Ventures made the major shareholder list, along with Goldman Sachs. So, a number of firms and funds are hoping for a big Flywire exit. Let’s dig in.

What is Flywire?

Flywire is a global payments company. Or, as it states in its S-1 filing, it’s “a leading global payments enablement and software company.” And it thinks that its market, and by extension itself, has lots of room to grow. While “substantial strides [have been] made in payments technology in the retail and e-commerce industries,” the company wrote, “massive sectors of our global economy—including education, healthcare, travel, and business-to-business, or B2B, payments—are still in the early stages of digital transformation.”

That’s the same logic behind Stripe’s epic valuation and the rising value of payments-focused companies like Finix.

Taster grabs $37 million for its native online restaurants

By Romain Dillet

French startup Taster has raised a $37 million Series B funding round from Octopus Venture, Battery Ventures, LocalGlobe, HeartCore, Rakuten, GFC and Founders Future. The company operates dozens of restaurants that only exist on food delivery platforms. You can’t book a table as there is no table.

Taster has been focusing on five street food-inspired concepts so far — Bian Dang (Taiwanese food), A Burgers (plant-based burgers), Mission Saigon (Vietnamese food), Out Fry (Korean food) and Stacksando (Japanese street food). After that, Taster has opened dozens of kitchens across 40 different cities and listed its kitchens on food delivery platforms, such as Deliveroo and Uber Eats.

Essentially, the startup wants to build new restaurant chains for the 21st century. Instead of opening brick-and-mortar restaurants, Taster focuses on food delivery as it’s still a booming segment. In Paris, Taster restaurants are the third restaurant group on Deliveroo behind McDonald’s and Burger King — it represents over 5,000 meals per day.

After operating its own kitchens, Taster now wants to partner with existing restaurants that don’t get a lot of orders on Deliveroo or Uber Eats. Taster brings its own native brands and menus as well as its tech tools.

Taster has built its own delivery app for Android and iOS. But you can still find Taster’s restaurants on third-party platforms. The startup doesn’t want to reinvent the wheel and replace food ordering platforms. But it makes sense to offer its service to end customers directly.

As Taster brands become more and more familiar, it should create demand from day one — restaurants can expect between €4,000 and €6,000 in revenue during the first week. By 2025, Taster wants to operate in 1,000 cities thanks to this partnership model.

Image Credits: Taster

Google Fixes Two Annoying Quirks in Its Voice Assistant

By Julian Chokkattu
The AI just got a useful boost in understanding natural human speech.

Feds Arrest an Alleged $336M Bitcoin-Laundering Kingpin

By Andy Greenberg
The alleged administrator of Bitcoin Fog kept the dark web service running for 10 years before the IRS caught up with him.

To be frank, I do not know how to value Honest Company

By Alex Wilhelm

The Honest Company, a heavily venture-backed consumer goods company, announced an IPO price range this morning, telling investors that it expects to sell shares in its debut at $14 to $17 apiece. The former startup is selling 6,451,613 shares in its debut, while existing shareholders are letting 19,355,387 shares go.


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


Honest’s IPO is not very large. The company’s own offered shares are worth $109.7 million at the top end of its range. Furthermore, because the company’s final private raise was worth $200 million back in 2018, it’s a comparatively modest sum.

Today, we’re digging into the Honest Company’s IPO pricing: We’ll calculate its IPO valuation range across a few different share counts, bring to bear its final private valuations and compare the entire dataset to its preliminary Q1 2021 numbers.

We care because IVP and Fidelity, Lightspeed and General Catalyst, ICONIQ and M13, Dragonner and others put capital into the Jessica Alba-founded company worth just over $500 million while private, according to Crunchbase. That’s an enormous bet.

Per its filings, Alba remains the company’s chief creative officer and chairs its board.

We owe it to our general understanding of the venture market to better understand what Honest is worth and why. Is this a company going public while markets are hot so it can try to limp across the finish line? Or is Honest something honestly more exciting? Let’s find out.

Honest Company’s IPO worth

Using a simple share count of 90,518,137 outstanding after its IPO, Honest is worth $1.27 billion to $1.54 billion at $14 to $17 per share. On a fully diluted basis, Renaissance Capital calculates that the former startup is worth $1.6 billion at its midpoint value, a figure that we estimate rises to around $1.75 billion at the top end of its anticipated price range.

Are those strong numbers? There are two ways to measure: against the company’s final private price, or we can use its recent financial performance as a yardstick.

Facebook introduces a new miniplayer that streams Spotify within the Facebook app

By Sarah Perez

Facebook announced last week an expanded partnership with streaming music service Spotify that would bring a new way to listen to music or podcasts directly within Facebook’s app, which it called Project Boombox. Today, the companies are rolling out this integration via a new “miniplayer” experience that will allow Facebook users to stream from Spotify through the Facebook app on iOS or Android. The feature will be available to both free Spotify users and Premium subscribers.

The miniplayer itself is an extension of the social sharing option already supported within Spotify’s app. Now, when Spotify users are listening to content they want to share to Facebook, they’ll be able to tap the existing “Share” menu (the three dot-menu at the upper right of the screen) and then tap either “Facebook” or “Facebook News Feed.”

When a user posts an individual track or podcast episode to Facebook through this sharing feature, the post will now display in a new miniplayer that allows other people who come across their post to also play the content as they continue to scroll, or reshare it. (Cue MySpace vibes!)

Spotify’s paid subscribers will be able to access full playback, the company says. Free users, meanwhile, will be able to hear the full shared track, not a clip . But afterwards, they’ll continue to listen to ad-supported content on Shuffle mode, just as they would in Spotify’s own app.

One important thing to note here about all this works is that the integration allows the music or podcast content to actually play from within the Spotify app. When a user presses play on the miniplayer, an app switch takes place so the user can log into Spotify. The miniplayer activates and controls the launch and playback in the Spotify app — which is how the playback is able continue even as the user scrolls on Facebook or if they minimize the Facebook app altogether.

This setup means users will need to have the Spotify mobile app installed on their phone and a Spotify account for the miniplayer to work. For first-time Spotify users, they’ll have to sign up for a free account in order to listen to the music shared via the miniplayer.

Spotify notes that it’s not possible to sign up for a paid account through the mini-player experience itself, so there’s no revenue share with Facebook on new subscriptions. (Users have to download the Spotify app and sign up for Paid accounts from there if they want to upgrade.)

The partnership allows Spotify to leverage Facebook’s reach to gain distribution and to drive both sign-ups and repeat usage of its app just as the Covid bump to subscriber growth may be wearing off. However, it’s still responsible for the royalties paid on streams, just as it was before, the company told TechCrunch, because its app is the one actually doing the streaming. It’s also fully in charge of the music catalog and audio ads that play alongside the content.

For Facebook, this deal means it now has a valuable tool to keep users spending time on its site — a metric that has been declining over the years, reports have indicated.

Spotify and Facebook have a long history of working together on music efforts. Facebook back in 2011 had been planning an update that would allow music subscription users to engage with music directly on Facebook, much like this. But those plans were later dialed back, possibly over music rights’ or technical issues. Spotify had also been one of the first media partners on Facebook’s ticker, which would show you in real-time what friends were up to on Facebook and other services. And Spotify had once offered Facebook Login as the default for its mobile app. Today, as it has for years, Spotify users on the desktop can see what their Facebook friends are streaming on its app, thanks to social networking integrations.

The timing for this renewed and extended partnership is interesting. Now, both Facebook and Spotify have a mutual enemy with Apple, whose privacy-focused changes are impacting Facebook’s ad business and whose investments in Apple Music and Podcasts are a threat to Spotify. As Facebook’s own music efforts in more recent years have shifted towards partnership efforts — like music video integrations enabled by music label agreements — it makes sense that it would turn to a partner like Spotify to power a new streaming feature that supports Facebook’s broader efforts around monetizable tools and services aimed at the creator economy.

The miniplayer feature had been tested in non-U.S. markets, Mexico and Thailand, ahead of its broader global launch today.

In addition to the U.S., the integration is fully rolling out to users in Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Indonesia, Israel, Japan, Malaysia, Mexico, New Zealand, Nicaragua, Panama, Paraguay, Peru, South Africa, Thailand, and Uruguay.

Signal's Founder Hacked a Notorious Phone-Cracking Device

By Brian Barrett
Plus: App Store scams, an anti-surveillance bill, and more of the week’s top security news.

Oscars 2021: Time to Watch Yet Another Covid-Era Awards Show

By Angela Watercutter
Part of this year’s event will be held at a train station. Frankly, that tracks.

A New Facebook Bug Exposes Millions of Email Addresses

By Dan Goodin, Ars Technica
A recently discovered vulnerability discloses user email addresses even when they’re set to private.

Extra Crunch roundup: Klaviyo EC-1, micromobility’s second wave, UiPath CFO interview, more

By Walter Thompson

Origin stories are satisfying because we already know the hero will overcome the odds — and in doing so, they’ll reveal their core strengths.

This week, we published a four-part series about how Klaviyo co-founders Andrew Bialecki and Ed Hallen bootstrapped their startup into an e-commerce marketing automation platform now valued at $4.15 billion.

Neither founder was bitten by a radioactive spider or received a serum that enhanced their entrepreneurial skills; instead, they focused on outreach to prospective customers to find out what they were willing to pay for and largely ignored the competition.

“Bootstrapping Klaviyo, it came out of this: ‘Hey, if we are super-disciplined about finding a problem that someone will pay us to solve, we have a real company,'” said Hallen.


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Use discount code ECFriday to save 20% off a one- or two-year subscription


Even though millions of us respond every day to the personalized, automated emails sent through its platform, Klaviyo still isn’t a well-known brand. Our ongoing series of EC-1s offers entrepreneurs real insight into growing and scaling successful companies, but they’re also extremely useful for consumers who want to understand how the internet really works.

Thanks very much for reading Extra Crunch; I hope you have a great weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

The Klaviyo EC-1

Image Credits: Nigel Sussman

Micromobility’s next big business is software, not vehicles

Set of 3 electric kick scooters with map location pin and different percent of battery charge indicator isolated on white background. Micromobility city transport. Vector illustration eps10.

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

Several micromobility companies once operated in my city, but consolidation has reduced that to a small handful.

Now that many consumers are buying their own e-bikes and e-scooters, shared dockless micromobility “just hasn’t proven itself to be a profitable line of business,” Puneeth Meruva, an associate at Trucks Venture Capital, told TechCrunch.

There’s only one dockless electric moped provider in my town, so price is no longer a consideration. Instead, my first priority is to find a vehicle with the best-charged battery. (San Francisco has a lot of hills, and you never know where the day might take you.)

Larger players like Lime and Bird have vertically integrated tech stacks for fleet management features like this, but there are also opportunities for startups — imagine a “phantom scooter” that drives itself to a neighborhood with high demand or a moped that alerts drivers if there’s traffic ahead.

This in-depth industry analysis shows how increased regulation on the local level and changing consumer habits are pushing micromobility providers to adapt and innovate.

“Whether you want to stack regulatory compliance on the vehicles, do safety features like ADAS or add mapping content, you kind of need this platform where you can actively develop and launch new apps on the vehicle without having to bring it back to the factory,” Meruva said.

Enterprise security attackers are one password away from your worst day

If the definition of insanity is doing the same thing over and over and expecting a different outcome, then one might say the cybersecurity industry is insane.

Criminals continue to innovate with highly sophisticated attack methods, but many security organizations still use the same technological approaches they did 10 years ago. The world has changed, but cybersecurity hasn’t kept pace.

Data scientists: Bring the narrative to the forefront

Book on wooden deck with glowing graph illustrations and symbols

Image Credits: ra2studio (opens in a new window) / Getty Images

By 2025, 463 exabytes of data will be created each day, according to some estimates. It’s now easier than ever to translate physical and digital actions into data, and businesses of all types have raced to amass as much data as possible in order to gain a competitive edge.

However, in our collective infatuation with data (and obtaining more of it), what’s often overlooked is the role that storytelling plays in extracting real value from data.

The reality is that data by itself is insufficient to really influence human behavior. Whether the goal is to improve a business’ bottom line or convince people to stay home amid a pandemic, it’s the narrative that compels action, not the numbers alone.

As more data is collected and analyzed, communication and storytelling will become even more integral in the data science discipline because of their role in separating the signal from the noise.

Business continuity planning is a necessity for your fund and portfolio

Close-Up Of Dominoes On Table

Image Credits: Raquel Segato/EyeEm (opens in a new window) / Getty Images

We all need to be taking precautionary measures, not just in light of COVID, but to ensure our firms can continue to thrive when faced with unexpected tragedy.

So ask yourself this question: “What would happen if I or my partner(s) checked into the hospital tomorrow and had no phone and/or was too sick to call anyone, and that went on for two or three weeks (or longer)?”

If the answer is “I’m really not sure,” then you don’t have a business continuity plan.

Outdoor startups see supercharged growth during COVID-19 era

Two couples sitting by a campfire

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

After years of sustained growth, the pandemic supercharged the outdoor recreation industry. Startups that provide services like camper vans, private campsites and trail-finding apps became relevant to millions of new users when COVID-19 shut down indoor recreation, building on an existing boom in outdoor recreation.

Startups like Outdoorsy, AllTrails, Cabana, Hipcamp, Kibbo and Lowergear Outdoors have seen significant growth, but to keep it going, consumers who discovered a fondness for the great outdoors during the pandemic must turn it into a lifelong interest.

Once VMware is free from Dell, who might fancy buying it?

Barcelona, Spain - October 13, 2014: View of the exhibition center. News & Training at VMworld exhibition of VMWARE in Barcelona, Spain.

Image Credits: MaboHH / Getty Images

Dell last week agreed to spin out VMware in exchange for a huge one-time dividend, a five-year commercial partnership agreement, lots of stock for existing Dell shareholders and Michael Dell retaining his role as chairman of its board.

So, where does the deal leave VMware in terms of independence, and in terms of Dell influence?

Time-strapped IT teams can use low-code software to drive quick growth

Image of a white cube with smaller red cubes being outsourced.

Image Credits: Westend61 (opens in a new window) / Getty Images

Many emerging and mature organizations survive or die based on their ability to scale. Scale quicker. Scale cheaper. Scale right.

Typically the IT team bears that burden — on top of countless other demands. IT teams move mountains for their organizations while scaling the tech platform as fast as possible, putting out the latest infrastructure fire and responding to countless day-to-day requests.

The most helpful gift any chief information officer or chief technology officer can give their IT teams is more time. Many people think that means adding another team member. But it could be as simple as introducing a low-code integration platform.

European VC soars in Q1

A stunning first quarter in venture capital funding was not restricted to the United States; Europe also had one hell of a start to the year.

The venture capital world kicked off its 2021 European investing cycle with enough activity to set the continent on the path that would crush yearly records.

Inside the data, there’s lots to unpack, including which sectors of European startups stood out in terms of capital raised, rising seed and late-stage deals, and dollar volume. We’ll also need to discuss exits — the Deliveroo IPO and its various woes was not the only transaction from the period worth understanding.

We’ll keep in mind that all venture capital data lags reality somewhat, as many deals from a particular period are not disclosed or discovered until long after they actually occurred.

In this case, it makes the numbers all the more impressive.

UiPath raises IPO range, still targets lower valuation than final private round

Robot paper holding pen, space for text

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

Robotic process automation unicorn UiPath went public this week, concentrating our focus on its value.

UiPath raised its last private round when the markets were most interested in public offerings and is now going public in a slightly altered climate.

In numerical terms, UiPath raised its IPO range from $43 to $50 per share to $52 to $54 per share. That’s a 21% jump in the value of the lower end of its range and an 8% gain to the value of the upper end of its per-share IPO price interval.

UiPath is also selling more shares than before, which should make its total valuation slightly larger at the top end than a mere 8% gain. So let’s go through the math one more time.

Insurtech startups are leveraging rapid growth to raise big money

The investment landscape for insurtech startups is off to a hot start in Q2 2021. Since the end of the first quarter, we’ve seen several players in the broad startup category announce new capital.

But, as anyone who’s familiar with startups that offer insurance-related products and services knows, the sector is enough of a mixed bag that one needs to segment down to get clarity on how constituent companies are performing.

Let’s discuss insurtech’s 2020 as a whole, peek at some preliminary 2021 venture data and then dive deep into what we’ve collected regarding growth among insurtech marketplace players.

Covering longitudinal progress of specific startup categories is one of our favorite things to do. So, please, walk with us!

Deep Science: Introspective, detail-oriented and disaster-chasing AIs

Image Credits: Kehan Chen / Getty Images

Research papers come out far too frequently for anyone to read them all. That’s especially true in the field of machine learning, which now affects (and produces papers in) practically every industry and company.

This column aims to collect some of the most relevant recent discoveries and papers — particularly in, but not limited to, artificial intelligence — and explain why they matter.

This week, we dove into “introspective failure prediction,” using ML to identify dangerous moles, and spotting cows from space.

Who’s funding privacy tech?

3d rendering of question mark made up of dollar banknotes on blue background. Banking and finance. Business success. Management and production.

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

With strict privacy laws such as GDPR and CCPA already listing big-ticket penalties — and a growing number of countries following suit — businesses have little option but to comply.

It’s not just bigger, established businesses offering privacy and compliance tech; brand-new startups are filling in the gaps in this emerging and growing space.

Privacy isn’t dead, as many would have you believe. New regulations, stricter cross-border data transfer rules and increasing calls for data sovereignty have helped the privacy startup space grow thanks to an uptick in investor support.

This is how we got here, and where investors are spending.

A cooling trend in public markets makes UiPath’s down-round IPO a win for the company

UiPath is not worth $36 billion, as we might have expected, but at a figure below $30 billion.

At $29.1 billion, UiPath has a roughly 35x run-rate multiple. That just about ties it for eighth-best overall. Among all public cloud companies. That means that UiPath is insanely valuable, just not that insanely valuable.

So what went wrong with the company’s final private round? The Exchange’s hunch is that UiPath’s final private investors expected the market to stay as hot as it once was, but it has cooled since the first two months of the year. So, instead of UiPath coming to the market in the expected climate, the company instead had to price where it did because the weather predicted by its final private price had already chilled.

Those investors gambled, in other words, hoping that a last-minute, pre-IPO round could snag them a rapid return on a company going public in a hot market. That didn’t work out.

And how bad is that? Not very! UiPath’s IPO is more a meeting of private-market exuberance and modestly more conservative public markets. It’s nothing to cry about.

4 ways martech will shift in 2021

Smiling young Asian woman using smartphone on social media network application while having meal in the restaurant, viewing or giving likes, love, comment, friends and pages. Social media addiction concept

Image Credits: d3sign (opens in a new window) / Getty Images

The second half of 2021 will bring incredible growth, the likes of which we haven’t seen in a long time.

Here’s how marketing in tech will shift — and what you need to know to reach more customers and accelerate growth this year.

First and foremost, differentiation is going to be imperative. It’s already hard enough to stand out and get noticed, and it’s about to get much more difficult as new companies emerge and investments and budgets balloon in the latter half of the year.

Additionally, tech companies need to be mindful not to ignore the most important part of the ecosystem: people. Technology will only take you so far, and it’s not going to be enough to survive the competition.

Tactically, the most successful tech companies will embrace video and experimentation in their marketing — two components that will catapult them ahead of the competition.

Ignoring these predictions, backed by empirical evidence, will be detrimental and devastating. Fasten your seatbelts: 2021 is going to be a turbocharged year of growth opportunities for marketing in tech.

Dear Sophie: How can I get my startup off the ground and visit the US?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I’m a female entrepreneur who created my first startup a few months ago.

Once my startup gets off the ground — and as COVID-19 gets under control — I’d like to visit the United States to test the market and meet with investors. Which visas would allow me to do that?

—Noteworthy in Nairobi

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

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 at $62.27576 apiece, per SEC filings. More simply, UiPath closed on Wednesday 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.

TechCrunch spoke with UiPath CFO Ashim Gupta, 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.

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

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 deal-making 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.

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?

Customer care as a service: Outsourcing can help your startup wow clients 24/7

floating headset with dropshadow

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

Your clients might not demand 24/7 customer service yet, but they’re certainly hoping for it.

But how can a startup with a lean staff provide round-the-clock customer care? There are several options available, but more than ever, outsourcing is one of them.

When should your startup consider outsourcing its customer care? And what should you look for in a provider?

Here are some insights on what customer care as a service (CCaaS) can do for you, and how fast-growing startups have been leveraging this new class of partners to boost customer satisfaction.

5 emerging use cases for productivity infrastructure in 2021

Image Credits: Erik Isakson / Getty Images

Productivity infrastructure is on the rise and will continue to be front and center as companies evaluate what their future of work entails and how to maintain productivity, rapid software development and innovation with distributed teams.

Understanding the benefits, use cases and steps to consider can propel organizations into the next phase of digital transformation.

To sell or not to sell: Lessons from a bootstrapped CEO

Full length of woman pulling vibrant red rope from tangle pattern against white background

Image Credits: Klaus Vedfelt (opens in a new window) / Getty Images

The clock begins ticking on a startup the day the doors open. Regardless of a young company’s struggles or success, sooner or later the question of when, how or whether to sell the enterprise presents itself. It’s possibly the biggest question an entrepreneur will face.

For founders who self-funded (bootstrapped) their startup, a boardroom full of additional factors comes into play. Some are the same as for investor-funded firms, but many are unique.

After 18 years of bootstrapping a BI software firm into a business that now serves 28,000 companies and 3 million users in 75 countries, here’s what I’ve learned about myself, my company, about entrepreneurship and about when to grab for that brass ring.

Put happiness at the center of the decision, and let your intuition — the instincts that made you the person you are today — be your guide.

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.

Facebook launches a series tests to inform future changes to its News Feed algorithms

By Sarah Perez

Facebook may be reconfiguring its News Feed algorithms. After being grilled by lawmakers about the role that Facebook played in the attack on the U.S. Capitol, the company announced this morning it will be rolling out a series of News Feed ranking tests that will ask users to provide feedback about the posts they’re seeing, which will later be incorporated into Facebook’s News Feed ranking process. Specifically, Facebook will be looking to learn which content people find inspirational, what content they want to see less of (like politics), and what other topics they’re generally interested in, among other things.

This will be done through a series of global tests, one of which will involve a survey directly beneath the post itself which asks, “how much were you inspired by this post?,” with the goal of helping to show more people posts of an inspirational nature closer at the top of the News Feed.

Image Credits: Facebook

Another test will work to the Facebook News Feed experience to reflect what people want to see. Today, Facebook prioritizes showing you content from friends, Groups and Pages you’ve chosen to follow, but it has algorithmically crafted an experience of whose posts to show you and when based on a variety of signals. This includes both implicit and explicit signals — like how much you engage with that person’s content (or Page or Group) on a regular basis, as well as whether you’ve added them as a “Close Friend” or “Favorite” indicating you want to see more of their content than others, for example.

However, just because you’re close to someone in real life, that doesn’t mean that you like what they post to Facebook. This has driven families and friends apart in recent years, as people discovered by way of social media how people they thought they knew really viewed the world. It’s been a painful reckoning for some. Facebook hasn’t managed to fix the problem, either. Today, users still scroll News Feeds that reinforce their views, no matter how problematic. And with the growing tide of misinformation, the News Feed has gone from just placing users into a filter bubble to presenting a full alternate reality for some, often populated by conspiracies theories.

Facebook’s third test doesn’t necessarily tackle this problem head-on, but instead looks to gain feedback about what users want to see, as a whole. Facebook says that it will begin asking people whether they want to see more or fewer posts on certain topics, like Cooking, Sports, or Politics, and more. Based on users’ collective feedback, Facebook will adjust its algorithms to show more content people say they’re interested in, and fewer posts about topics they don’t want to see.

The area of politics, specifically, has been an issue for Facebook. The social network for years has been charged with helping to fan the flames of political discourse, polarizing and radicalizing users through its algorithms, distributing misinformation at scale, and encouraging an ecosystem of divisive clickbait, as publishers sought engagement instead of fairness and balance when reporting the news. There are now entirely biased and subjective outlets posing as news sources who benefit from algorithms like Facebook’s, in fact.

Shortly after the Capitol attack, Facebook announced it would try clamping down on political content in the News Feed for a small percentage of people in the U.S., Canada, Brazil and Indonesia, for period of time during tests.

Now, the company says it will work to better understand what content is being linked negative News Feed experiences, including political content. In this case, Facebook may ask users on posts with a lot of negative reactions what sort of content they want to see less of. This will be done through surveys on certain posts as well as through ongoing research sessions where people are invited to talk about their News Feed experience, Facebook told TechCrunch.

It will also more prominently feature the option to hide posts you find “irrelevant, problematic or irritating.” Although this feature existed before, you’ll now be able to tap an X in the upper-right corner of a post to hide it from the News Feed, if in the test group, and see fewer like in the future, for a more personalized experience.

It’s not clear that allowing users to pick and choose their topics is the best way to solve the larger problems with negative posts, divisive content or misinformation, though this test is less about the latter and more about making the News Feed “feel” more positive.

As the data is collected from the tests, Facebook will incorporate the learnings into its News Feed ranking algorithms. But it’s not clear to what extent it will be adjusting the algorithm on a global basis versus simply customizing the experience for end users on a more individual basis over time. The company tells TechCrunch the survey data will be collected from a small percentage of users who are placed into the test groups, which will then be used to train a machine learning model.

It will also be exploring ways to give people more direct controls over what sort of content they see on the News Feed in the future.

The company says the tests will run over the next few months.

SmartNews’ COVID-19 vaccine alert reaches 1M users in Japan a week after launching

By Catherine Shu

Screenshots of SmartNews' Vaccine Alert and Map features for its Japanese app

SmartNews’ Vaccine Alert and Map features for its Japanese app

SmartNews announced today that its tools to help Japanese users find nearby COVID-19 vaccine bookings have reached more than one million users just a week after launching. The news discovery unicorn decided to create Vaccine Alert and Map features for its Japanese app because many people there are frustrated by the speed of vaccine rollouts. In the United States, where vaccinations are going much faster, SmartNews just released a feature that lets people find appointments by zip code today.

The company has more than 20 million monthly active users combined in Japan and the United States.

According to a public opinion poll by Nippon TV, more than 70% of Japanese people are dissatisfied with its slow vaccine rollout. That sentiment was echoed in SmartNews’ own research, which surveyed 900 people aged 65 to 79 at the beginning of April, and found that more than 90% felt there was insufficient information available about when and where they could get vaccinated. Challenges included the lack of a central portal for vaccine booking information, meaning local government offices and healthcare providers were inundated with questions.

A screenshot of SmartNews' vaccine locater feature for the American version of its app

A screenshot of SmartNews’ vaccine finder feature for the American version of its app

To create its Vaccine Alert and Map, SmartNews aggregated information from 1,741 municipalities across Japan. The Vaccine Alert lets users know when they are eligible to get a shot based on their location, age, occupation and health conditions. The Vaccine Map combines data from about 37,000 facilities, so people can see where bookings are available near them or get notified when their healthcare providers begin taking reservations.

The features were released on April 12, the day vaccinations began for elderly people in Japan, and had more than one million users a week later. This is in part because SmartNews is one of the country’s most popular news aggregator apps and also because the new features were covered by TV Asahi, a major TV station.

A company representative told TechCrunch that many people who signed up for the vaccine features were already SmartNews users, but it has also seen new downloads as people share their vaccination appointments with friends and family.

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?

A Clubhouse Bug Let People Lurk in Rooms Invisibly

By Lily Hay Newman
The vulnerabilities opened the door to “ghosts” hiding in and disrupting rooms, where moderators would be unable to mute them.

Apple Stuffs the iPad Pro With a New Display and Its Mac M1 Chip

By Julian Chokkattu
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Everything Apple Announced Today: New iMacs, iPads, AirTags

By Gear Team
Say hello to new iMacs, new iPads Pro, an updated Apple TV, and some little wireless trackers that keep tabs on your tchotchkes.

IKEA's Revamped AR App Lets You Design Entire Rooms

By Jeremy White, Wired UK
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Watch Today’s Apple Event Right Here

By Gear Team
The company is expected to unveil some new hardware Tuesday morning. Stream the big show with us.
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