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Network security startup ExtraHop skips and jumps to $900M exit

By Ron Miller

Last year, Seattle-based network security startup ExtraHop was riding high, quickly approaching $100 million in ARR and even making noises about a possible IPO in 2021. But there will be no IPO, at least for now, as the company announced this morning it has been acquired by a pair of private equity firms for $900 million.

The firms, Bain Capital Private Equity and Crosspoint Capital Partners, are buying a security solution that provides controls across a hybrid environment, something that could be useful as more companies find themselves in a position where they have some assets on-site and some in the cloud.

The company is part of the narrower Network Detection and Response (NDR) market. According to Jesse Rothstein, ExtraHop’s chief technology officer and co-founder, it’s a technology that is suited to today’s threat landscape, “I will say that ExtraHop’s north star has always really remained the same, and that has been around extracting intelligence from all of the network traffic in the wire data. This is where I think the network detection and response space is particularly well-suited to protecting against advanced threats,” he told TechCrunch.

The company uses analytics and machine learning to figure out if there are threats and where they are coming from, regardless of how customers are deploying infrastructure. Rothstein said he envisions a world where environments have become more distributed with less defined perimeters and more porous networks.

“So the ability to have this high quality detection and response capability utilizing next generation machine learning technology and behavioral analytics is so very important,” he said.

Max de Groen, managing partner at Bain, says his company was attracted to the NDR space, and saw ExtraHop as a key player. “As we looked at the NDR market, ExtraHop, which […] has spent 14 years building the product, really stood out as the best individual technology in the space,” de Groen told us.

Security remains a frothy market with lots of growth potential. We continue to see a mix of startups and established platform players jockeying for position, and private equity firms often try to establish a package of services. Last week, Symphony Technology Group bought FireEye’s product group for $1.2 billion, just a couple of months after snagging McAfee’s enterprise business for $4 billion as it tries to cobble together a comprehensive enterprise security solution.

Version One launches $70M Fund IV and $30M Opportunities Fund II

By Darrell Etherington

Early stage investor Version One, which consists of partners Boris Wertz and Angela Tran, has raised its fourth fund, as well as a second opportunity fund specifically dedicated to making follow-on investments. Fund IV pools $70 million from LPs to invest, and Opportunities Fund II is $30 million, both up from the $45 million Fund III and roughly $20 million original Opportunity Fund.

Version One is unveiling this new pool of capital after a very successful year for the firm, which is based in Vancouver and San Francisco. 2021 saw its first true blockbuster exit, with Coinbase’s IPO. The investor also saw big valuation boosts on paper for a number of its portfolio companies, including Ada (which raises at a $1.2 billion valuation in May); Dapper Labs (valued at $7.5 billion after riding the NFT wave); and Jobber (no valuation disclosed but raised a $60 million round in January).

I spoke to both Wertz and Tran about their run of good fortune, how they think the fund has achieved the wins it recorded thus far, and what Version One has planned for this Fund IV and its investment strategy going forward.

“We have this pretty broad focus of mission-driven founders, and not necessarily just investing in SaaS, or just investing in marketplaces, or crypto,” Wertz said regarding their focus. “We obviously love staying early — pre-seed and seed — we’re really the investors that love investing in people, not necessarily in existing traction and numbers. We love being contrarian, both in terms of the verticals we go in to, and and the entrepreneurs we back; we’re happy to be backing first-time entrepreneurs that nobody else has ever backed.”

In speaking to different startups that Version One has backed over the years, I’ve always been struck by how connected the founders seem to the firm and both Wertz and Tran — even much later in the startups’ maturation. Tran said that one of their advantages is following the journey of their entrepreneurs, across both good times and bad.

“We get to learn,” she said. “It’s so cool to watch these companies scale […] we get to see how these companies grow, because we stick with them. Even the smallest things we’re just constantly thinking about— we’re constantly thinking about Laura [Behrens Wu] at Shippo, we’re constantly thinking about Mike [Murchison] and David [Hariri] at Ada, even though it’s getting harder to really help them move the needle on their business.”

Wertz also discussed the knack Version One seems to have for getting into a hot investment area early, anticipating hype cycles when many other firms are still reticent.

“We we went into crypto early in 2016, when most people didn’t really believe in crypto,” he said. “We started investing pretty aggressively in in climate last year, when nobody was really invested in climate tech. Having a conviction in in a few areas, as well as the type of entrepreneurs that nobody else really has conviction is what really makes these returns possible.”

Since climate tech is a relatively new focus for Version One, I asked Wertz about why they’re betting on it now, and why this is not just another green bubble like the one we saw around the end of the first decade of the 2000s.

“First of all, we deeply care about it,” he said. Secondly, we think there is obviously a new urgency needed for technology to jump into to what is probably one of the biggest problems of humankind. Thirdly, is that the clean tech boom has put a lot of infrastructure into the ground. It really drove down the cost of the infrastructure, and the hardware, of electric cars, of batteries in general, of solar and renewable energies in general. And so now it feels like there’s more opportunity to actually build a more sophisticated application layer on top of it.”

Tran added that Version One also made its existing climate bet at what she sees as a crucial inflection point — effectively at the height of the pandemic, when most were focused on healthcare crises instead of other imminent existential threats.

I also asked her about the new Opportunity Fund, and how that fits in with the early stage focus and their overall functional approach.

“It doesn’t require much change in the way we operate, because we’re not doing any net new investments,” Tran said. “So we recognize we’re not growth investors, or Series A/Series B investors that need to have a different lens in the way that they evaluate companies. For us, we just say we want to double down on these companies. We have such close relationships with them, we know what the opportunities are. It’s almost like we have information arbitrage.”

That works well for all involved, including LPs, because Tran said that it’s appealing to them to be able to invest more in companies doing well without having to build a new direct relationship with target companies, or doing something like creating an SPV designated for the purpose, which is costly and time-consuming.

Looking forward to what’s going to change with this fund and their investment approach, Wertz points to a broadened international focus made possible by the increasingly distributed nature of the tech industry following the pandemic.

“I think that the thing that probably will change the most is just much more international investing in this one, and I think it’s just direct result of the pandemic and Zoom investing, that suddenly the pipeline has opened up,” he said.

“We’ve certainly learned a lot about ourselves over the past year and a half,” Tran added. “I mean, we’ve always been distributed, […] and being remote was one of our advantages. So we certainly benefited and we didn’t have to adjust our working style too much, right. But now everyone’s working like this, […] so it’s going to be fun to see what advantage we come up with next.”

Equity Monday: Jeff’s going to space, and everyone wants a piece of Flipkart

By Alex Wilhelm

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.

It’s WWDC week, so expect a deluge of Apple news to overtake your Twitter feed here and there over the next few days. But there’s a lot more going on, so let’s dig in:

And that’s your start to the week. More to come from your friends here on Wednesday, and Friday. Chat soon!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts!

Don’t miss these startups exhibiting at TC Sessions: Mobility 2021

By Alexandra Ames

We’re just five days away from TC Sessions: Mobility 2021 where thousands of mobility movers and shakers will dive deep into the game-changing technology that’s reinventing the way we move people — and pretty much everything else — around the world.

Mobility 2021 is a jam-packed event, and we want to make sure you know about everything that’s going down on June 9. But first, a message from the home office: Buy your TC Sessions: Mobility 2021 pass here. We now return you to our regularly scheduled post.

We’ve told you about the incredible slate of speakers, and you’ll find the wide range of topics they’ll cover in the event agenda. Remember, you can watch any session later at your convenience thanks to video on demand.

Now we want to remind you to visit our virtual expo area. It’s one of the most exciting aspects of Mobility 2021 — and one that offers untold opportunity. That’s where you’ll find 28 outstanding early-stage startups exhibiting their awesome tech and talent.

Hopin, our virtual platform, lets exhibitors schedule and host interactive product demos via live stream. Don’t be shy. Ask for a demo and start a conversation. Whether you’re looking to invest, collaborate or find the right solution for your business, you’ll find opportunity waiting for you in the expo.

Pro Tip: Watch all the exhibiting startups pitch live to TC editors and event attendees during the Startup Pitch Feedback Session (check the agenda for the exact time).

Ready to start planning your expo strategy? Here’s the list of the mighty mobility startups exhibiting at TC Sessions: Mobility 2021.

TC Sessions: Mobility 2021 takes place on June 9 — in just five days. Grab your pass and dive into all the information, education, community and opportunity designed to drive your business forward.

Is your company interested in sponsoring or exhibiting at TC Sessions: Mobility 2021? Contact our sponsorship sales team by filling out this form.

Equity listeners, do you like prizes? Take our super-fun survey!!!

By Natasha Mascarenhas

Hello Equity podcast family, we’re back with another survey.

This is our second go-round with collecting your feedback, notes and vibes.

The first survey we conducted back in the early days of 2020 was super useful in helping us better tune the show. Since then, Equity has grown in frequency and we’ve expanded our production team. So, it’s a perfect time to collect your opinions. You can find the survey here.

If you have listened to the show a few times, or if you listen every week, or if you’ve heard a few hundred episodes, we want to hear from you.

And we’re going to offer some sort of neat reward to a lucky participant. Think things like TechCrunch socks. Or a romantic dinner for you and your partner that Danny cooks. Or Alex may call the person of your choosing to tell them that they have very poor gross margins.

The gist is that we are hungry for your feedback and are willing to pay for the 37 to 94 seconds it will take you to fill out our little Google Form.

We appreciate you, and the time you spend with us. (But really, take the darn survey!)

— The Equity Team

Amazon is now open to getting sued

By Alex Wilhelm

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

Despite it being a short week, as always, it was a busy busy time. Our regular Friday producer Grace was under the weather today, so Chris stepped in to help out.

And as noted at the top of the episode, we’re running a survey. The survey is here, dear Equity family. Please fill it out so that we can keep making the show better.

That aside, here’s what Danny and Natasha and Alex got into:

That’s all we got! If you have heard Equity before, take the survey. Thank you!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday morning at 7:00 a.m. PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Blackstone acquires tech publisher IDG for $1.3B, as private equity strikes again

By Ron Miller

It’s been a busy week for private equity with Cloudera, Stack Overflow and FireEye coming off the board on Tuesday and Wednesday. Today Blackstone bought media and data company IDG for $1.3 billion. The company had been owned by Oriental Rainbow, LLC, a subsidiary of China Oceanwide Holdings Group, Co. Ltd.

With IDG, Blackstone gets tech analyst firm IDC along with a collection of tech publications that includes CIO, Computerworld, InfoWorld, Macworld, Network World, PCWorld, and Tech Hive. The media publishing arm was once a powerhouse in the 1990s tech publishing world, although its shine has faded in recent years as the publishing industry in general has come under intense pressure.

The company has also been making some additions to the platform more recently with a stronger focus on data and analytics. Last year it bought Triblio, a marketing data platform to help companies deliver more personalized customer experiences. Last month it acquired Metri, an IT pricing service, which can help with IT budgeting and procurement. The latter could dovetail nicely with IDC’s consulting services.

Company CEO Mohamad Ali is hoping that Blackstone can infuse more capital into the company to keep building on its software services with a data focus. “Additional capital investment from Blackstone will allow us to cultivate our rich history of innovation and accelerate our product roadmaps to bring our customers the deeper insights and data they need to succeed in today’s rapidly evolving digital economy,” said in a statement.

That sounds like he wants to increase his data bet. It seems that the data side of the business was particularly attractive to Blackstone as well. “The high-quality data, analytics and insights IDG delivers to technology leaders are only becoming more critical as the pace of growth and innovation accelerates,” Peter Wallace, Global Head of Core Private Equity at Blackstone said in a statement.

The company launched in 1964 with the consulting side of the business, but founder Pat McGovern had a broader vision and began the publishing side of the company in 1967 with the launch of Computerworld. The publishing business actually grew to become integral part of the rise of the PC and the technology shift that occurred at a personal and business level in the 80s and 90s. It’s unclear what this deal will mean for the publishing side of the house or where that would even fit as it continues the push to focus on data and analytics.

It’s worth noting that Verizon Media, which owns this publication along with Engadget, was also recently sold to private equity firm, Apollo Global, as the private equity push into all parts of the technology ecosystem continues.

Ganaz raises $7M A round to rethink how agriculture workers get hired and paid

By Devin Coldewey

The agriculture sector is ripe for technological improvements, but beyond satellite-based crop management and bees-as-a-service, the actual people who work in the fields should be benefiting as well. Ganaz, empowered by a $7 million A round, aims to change how people with little documentation and no bank account get paid and send money with a modern workforce stack that embraces low tech as well.

Growers — that is to say, the companies that own and operate the fields and sell the crops — are under pressure from multiple directions as wages rise, regulations increase and willing workers dwindle. They need to save money to make money, but they can’t do so by paying less; in addition to being cruel to a marginalized class of people, it would only exacerbate the labor shortage in the sector.

There are plenty of companies out there that help save costs by automating things like payroll and onboarding, but the agriculture business has some unique limitations.

“It’s still operating like it’s the ’80s,” explained Ganaz founder and CEO Hannah Freeman. The number one service these workers rely on is check cashing or payday loans, and fees from these, currency exchange, ATM fees and remittances eat up a significant portion of each paycheck. “The workforce in our world definitely doesn’t have corporate email and rarely uses personal email. They have trouble downloading and using mobile apps, don’t use usernames. But they’re very conversant in WhatsApp and SMS — so you have to kind of know how to build for them.”

A payment card from Ganaz and text interface for asking about balance and other things.

Image Credits: Ganaz

The ecosystem has parallels to other regions that have stuck with older, cheaper technologies instead of adopting the latest and most expensive tech. Entire markets in Africa and South America, for instance, run on text-based commerce taking place on aging and unreliable infrastructure.

Ganaz has opted for a hybrid approach. The company’s platform offers several services on both the worker and employer side.

Onboarding and basic training can be done simply and intuitively for people who may not be highly literate, via tablets loaded with apps that also operate offline. The most common alternative seems to be file folders served out of a crate in the back of a pickup — that’s not a dig, it’s just what has made sense for years for this highly fluid, distributed workforce.

Payment and balance checks all happen over SMS or WhatsApp with workers, but for sensitive information they are shunted to a web app; similarly, integrated remittance partnerships are coming that will keep things simple and reduce fees.

On the employer side, the workers and all their vital stats and documents are tracked centrally in the kind of interface companies have grown to expect. And Ganaz works as an intermediary to send text alerts and questions.

Diagram showing how employers can send texts to many workers at once.

Image Credits: Ganaz

So far Ganaz has 75 employers signed up, one of which is a Costco supplier group, and all told around 175,000 workers on the platform. Their ARR and user count both approximately tripled year over year, so they’re clearly on to something.

The company has tempered its rapid growth with designation as a public benefit corporation, which emphasizes the intention to do more than grow shareholder value. I asked about the tension between needing to show a profit and working in the service of a marginalized group.

“This keeps me up at night,” admitted Freeman. “We try to make sure to set ourselves up to be true to our mission. That means the folks we hire, our board of directors… we want to make sure we’re empathizing and honoring the trust we’ve built with people.”

That includes investors as well, and Freeman noted that the company ended up going with Trilogy as lead for this round partly because of that firm’s experience with Remit.ly.

For instance, Freeman noted, while it would be easy to juice profits by bumping ATM fees, that directly harms the people they’re trying to help. Instead, when they issue their payroll Mastercard later this year, that will allow workers to skip the check cashing step and its fees, and then Ganaz gets a share of the normal card transaction fee. “We can be equally successful that way,” said Freeman, and it doesn’t just replace another predatory structure.

After the cards the plan is to automate remittances, so a user can easily choose to send money to their family in a way that minimizes handling fees and so on. And there will be other options, accessible via text, to choose where money goes if not to the card.

Ganaz’s main market is the U.S. and Mexico, since the agriculture business and workforce are both largely binational, but there are other targets on the horizon. First, though, the company wants to solidify its position and feature set here. “There’s no breakaway winner yet, so we want to be that winner,” said Freeman.

The $7 million round also had participation from Bessemer Venture Partners, Founders’ Co-op, Taylor Ventures, AgFunder and Techstars. Rapid expansion and aggressive pursuit of the roadmap are next up for Ganaz.

“We are conscious of both the huge opportunity ahead of us to digitize billions of dollars in payroll, as well as the responsibility to build inclusive, low-cost, wealth-building tools for workers,” said Freeman.

The exit effect: 4 ways IPOs and acquisitions drive positive change across the global ecosystem

By Annie Siebert
Laura González-Estéfani Contributor
Laura González-Estéfani is the founder and CEO of TheVentureCity, an international, operator-led venture acceleration model designed to make the global entrepreneurial ecosystem more diverse, international and accessible to fair capital.

For many VCs, the exit is the endgame; you cash in and move on. But as we know, the startup world is evolving, and that means the impact of investment is no longer limited to how much money is made.

As investors, we’re looking further into what each investment means to human beings, at interlinking our mission with our money. And yet, one of the events that generates the most momentum for long-term impact — the successful exit of a portfolio company — is not being harnessed.

When leveraged properly, an exit can be the beginning of a firm’s true impact, especially when we’re talking about giving all founders equal opportunities and empowering the best ideas. The investment sphere is slowly shaking off its “America first” approach as foreign products take the world by storm and international businesses become the norm.

When leveraged properly, an exit can be the beginning of a firm’s true impact, especially when we’re talking about giving all founders equal opportunities and empowering the best ideas.

Investors will be driving forces in enabling the highest-potential companies to build products that countries everywhere will benefit from — no matter where they were conceived. The way they play the game can transform the industry into one in which a founder from across the ocean has as much of a chance to change the world as one from next door.

We know the basics of how to do this with cash: Investing in underrepresented founders is a necessary first step. But who’s talking about the power of exits to change the playing field for diverse founders? We must consider the psychological motivation of seeing a huge buyout on other entrepreneurs, what that startup’s ex-team members go on to build, and what the achievements of one citizen does for that nation’s reputation.

Last year, 41 venture-backed companies saw a billion-dollar exit, totaling over $100 billion, the highest numbers in a decade. We have an unprecedented amount of clout to do something with those power moves and four ways to turn them into a domino effect.

1. Competitor effect

When a foreign entrepreneur raises money from U.S. firms and sells to a U.S. company, other immigrants see that. Regardless of how groundbreaking their product idea might be, immigrant Americans will always be more wary of putting their eggs into the entrepreneurship basket, at least as long as 93% of all VC money continues to be controlled by white men.

This, despite research suggesting that immigrants contribute 40% more to innovation than local inventors.

What these foreign entrepreneurs most need is confidence, role models and success stories proving other people who look like them have made it, especially when those founders are making waves in the same industry as them.

So a big, well-publicized exit will create momentum in the industry for other foreign founders to give fuel to their venture and seek to take it to the next stage. Not only that, it will instill more self-assurance when it comes to fundraising, and investors will value that.

I was inspired to write this column after Returnly, a fintech founded by a fellow immigrant from Spain based in San Francisco — which, for full transparency, I invested in as an angel investor, and then for Series B and C via my fund — was acquired for $300 million by Affirm.

While there was undoubtedly a personal financial gain worth celebrating, the success of a foreign founder who persevered against the odds in such a competitive ecosystem as Silicon Valley, raised large rounds from U.S.-based investors, and was finally acquired by a U.S. company served as a moment of inspiration for other diverse founders around the world. We saw this in the amount of media attention it received in both business and mainstream press in Spain and the floods of connect requests and congratulations that followed on LinkedIn.

The impact of an exit is greater when it shows foreign entrepreneurs that there are globally minded organizations helping startups like theirs get equal access to funding. That means having VC firms that spotlight international entrepreneurship and foster global expert networks.

As investors, we can maximize the impact of our exits in the industry by highlighting the foreign origins of our founders in a big way when it comes to promoting the exit, including narrating the challenges and opportunities they encountered on their journey. We can use the victory to drive the point home to our fellow investors that diverse and international entrepreneurship is an undervalued gem. We can personally take the win to boost our brand as one that empowers foreign entrepreneurs in that niche, attracting more to seek funding with us in a positive reinforcement cycle.

2. Wealth effect

The windfall from a big exit puts all previous investors in a privileged position, and it’s unlikely that money will sit around for long. They’ll look to reinvest in other high-potential companies — probably ones that look a lot like the one that was just sold.

But in addition to those investors multiplying the positive impact in their own portfolio, they will rally other investors to behave in a similar way.

Each exit — good or bad — sets a precedent for that niche and that type of company. Other investors will follow suit if they sense that one of their peers is onto a cash cow. Because foreign and ethnic minority founders are still underrepresented in startup funding, it makes this field less competitive while harboring huge potential. VCs who have an eye out for unique opportunities will spot when an investor has made a hefty profit from an unconventional startup, especially if they continue to invest in others in that same field.

To help this along, angels and VCs who’ve been behind a recent exit and are reinvesting in similar founders should publicize those knock-on investments, explaining how their previous success motivated them to support similar ventures. They can also be vocal within their network about their decision to raise up certain entrepreneurs because they’ve seen it works.

Returnly’s founder recently offered to put some of his earnings back into our fund, enabling more foreign entrepreneurs like himself to access capital. If as investors we foster meaningful relationships with our funders and truly care about empowering diverse entrepreneurs, we’ll see more of that wealth circle back into our mission.

3. Team effect

The PayPal Mafia is a set of former PayPal executives and employees — such as Elon Musk, a South African, and Peter Thiel, a German American — who have gone on to seriously disrupt not one but multiple industries across tech. Among the companies they’ve founded are YouTube, LinkedIn, Yelp and Tesla, and they’ve even been named U.S. ambassadors. That’s just one company. Imagine what other diverse and driven teams can do with the influx of cash and inspiration that comes with a big exit. There will be a ripple effect of team members eager to start out on their own who feel empowered by the success of someone who believed in them.

Their ventures will be more likely to “pass it on” when it comes to giving equal opportunities to people regardless of origin and will generate more jobs for people with their mission. Take Thiel, who has to date backed over 40 companies in Europe alone.

As VCs, we can capitalize on this team effect by keeping our eye on any spinoff ventures that arise and supporting them when possible (with experience and contacts, if not with capital). But beyond this, you can also consider encouraging these people to join the investment sphere, maybe even within your firm. Many successful startup founders and executives go on to become investors — the PayPal Mafia has contributed to some of the most notorious funds out there today. The origin story of these former team members will make them more prone to supporting underrepresented founders they can get behind. In turn, new entrepreneurs will draw more value from their personal experiences.

4. Reputation effect

Although Returnly is headquartered in San Francisco, its founder is Spanish and many of its employees were based in Spain.

That means that the impact of Returnly’s exit will be felt on the other side of the Atlantic as well as among co-nationals in the United States. The same is true of other notable sales, like AlienVault, which was founded in Spain and had multiple offices there. AlienVault was acquired by U.S. telecommunications giant AT&T for $900 million. Or IPOs — earlier this month, the Spanish-origin payments company Flywire filed for an IPO that could value the company at $3 billion. One startup’s success boosts the reputation of its entire team, and with it other founders and talent with their same country of origin, background, education and drive.

It follows that investors and other stakeholders will be more inclined to back opportunities among founders from the same home country if it says something about the mission, expertise and culture they bring to their startup.

At the same time, growing startups will be more interested in hiring the talent of evidently successful teams. That doesn’t just mean hiring more foreign experts in the United States, but seeking to outsource farther afield. We’re already becoming far more comfortable with remote teams, and it’s more capital-efficient for one half of the team to be working while the other half sleeps. But founders will always gravitate more to countries where local talent and innovation is already seen to be thriving. Open up that conversation with your portfolio companies.

VCs have the power to change an industry forever, to connect startup ecosystems across continents and to see startups expand worldwide. But this is about staying relevant as an investor as much as it’s about ensuring this next stage in the startup world is a positive one.

Investors who don’t recognize that the future of startups is global and diverse in nature won’t be in sync with the best opportunities — and won’t be selected by the best founders. Rather than trying to play catchup, help build that ecosystem.

3 views on the future of meetings

By Natasha Mascarenhas

More than a year into the coronavirus pandemic, early-stage startups across the world are re-inventing how we work. But founders aren’t flocking to build just another SaaS tool or Airtable copycat — they’re trying to disrupt the only thing possibly more annoying than e-mail: the work meeting.

On an episode of this week’s podcast, Equity hosts Alex Wilhelm, Danny Crichton and Natasha Mascarenhas discussed a flurry of funding rounds related to the future of work.

Rewatch, which makes meetings asynchronous, raised $20 million from Andreessen Horowitz, AnyClip got $47 million in a round led by JVP for video search and analytics technology, Interactio, a remote interpretation platform, landed $30 million from Eight Roads Ventures and Silicon Valley-based Storm Ventures, and Spot Meetings got Kleiner Perkins on board in a $5 million seed.

We connected the dots between these funding rounds to sketch out three perspectives on the future of workplace meetings. Part of our reasoning was the uptick of investment as mentioned above, and the other is that our calendars are full of them. We all agree that the traditional meeting is broken, so below you’ll find each of our arguments on where they go next and what we’d like to see.

  • Alex Wilhelm: Faster information throughput, please
  • Natasha Mascarenhas: Meetings should be ongoing, not in calendar invites
  • Danny Crichton: Redesign meetings for flow

Alex Wilhelm: Faster information throughput, please

I’ve worked for companies that were in love with meetings, and for companies where meetings were more infrequent. I prefer the latter by a wide margin. I’ve also worked in offices full-time, half-time and fully remote. I immensely prefer the final option.

Why? Work meetings are often a waste of time. Mostly you don’t need to align, most folks taking part are superfluous and as accidental team-building exercises they are incredibly expensive in terms of human-hours.

I am not into wasting time. The more remote I’ve been and the less time I’ve spent in less-formal meetings — the usual chit-chat that pollutes productive work time, making the days longer and less useful — the more I’ve managed to get done.

But I’ve been the lucky one, frankly. Most folks were still trapped in offices up until the pandemic shook up the world of work, finally giving more companies a shot at a whole-cloth rebuild of how they toil.

The good news is that CEOs are taking note. Chatting with Sprout Social CEO Justyn Howard this week, he explained how we have a unique, new chance to not live near where we work in 2021, but to instead bring work to where we live. He’s also an introvert, which meant that as a pair we’ve found a number of positives in some of the changes to how tech and media companies operate. Perhaps we’re a little biased.

A number of startups are rushing to fill the gap between the new expectations that Howard noted and our old digital and IRL realities.

Tandem.chat might be one such company. The former Y Combinator launch-day darling has spent its post-halo period building. Its CEO sent me a manifesto of sorts the other day, discussing how his company approaches the future of work meetings. Tandem is building for a world where communication needs to be both real-time and internal; it leaves asynchronous internal communication to Slack, real-time external communications to Zoom and asynchronous external chats to email. I agree, I think.

The SPAC trash ticker is counting down

By Natasha Mascarenhas

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week had the whole crew aboard to record: Grace and Chris making us sound good, Danny to provide levity, Natasha to actually recall facts and Alex to divert us from staying on topic. It’s teamwork, people — and our transitions are proof of it.

And it’s good that we had everyone around the virtual table, as there was quite a lot to get through:

  • The team felt all kinds of ways about the Amazon-MGM deal. Some of us are more positive than the rest, but what gists out from the transaction is that for Amazon, the purchase price is modest and the company is famously playing a supposedly long-game. Let’s see how James Bond fits into it. Alex receives four points for not bringing up F1 thanks to the Bond-Aston Martin connection.
  • Turning to the SPAC game, we chatted through the recent Lordstown Motors earnings results, and what we can parse from them regarding blank-check companies, promises and reality.
  • After launching last June with just $2 million, Collab Capital has closed its debut fund at its target goal: $50 million. The Black-led firm invests exclusively in Black-led startups, and got checks from Apple, PayPal, and Mailchimp to name a few. We talk about this feat, and note a few other Black-led venture capital firms making waves in the industry lately.
  • We Resolved our transition puns and eventually spoke about the Affirm spin-out, which raised $60 million in a funding round for BNPL for businesses. There’s bigger questions there around the accessibility and point of BNPL, and if its really re-inventing the wheel or just repackaging it with simpler UX.
  • Next up, we got into a can of worms about the future of meetings thanks to Rewatch, which raised a $20 million Series A this week led by Andreessen Horowitz. The startup helps other startups create internal, private Youtubes to archive their meetings and any video-based comms. We could only spend a second on this, so if you want our longer thoughts in the form of text, check out our 3 views on the topic on Extra Crunch! (Discount Code: Equity)
  • From there we had Interactio and Fireflies.ai, two more startups that are tackling the complexities of meetings in the COVID-19 era, and whatever comes next. Both recently raised new funding, and Alex brought up Kudo to add one more upstart to the mix.
  • Noom, a weight loss platform, bulked up with $540 million in funding after nearly doubling its revenue from 2019 to 2020. The pandemic has made many people gain weight, but we chew into why Noom’s moment might be right now after a decade in the works.

Thanks for hanging out this week, Equity is back on Tuesday with our usual weekly kickoff, thanks to the American holiday on Monday. Chat then, unless you want to follow us on Twitter and get a first-look at all of Chris’ meme work. 

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday morning at 7:00 a.m. PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Orbiit raises seed funding to automate the interactions within an online community

By Mike Butcher

Orbiit, a startup that automates the interactions within an online community, has raised a $2.7 million round led by Bread and Butter Ventures, with participation from new investors High Alpha Capital, LAUNCHub Ventures and Company Ventures. Existing investors Founders Fund, which led Orbiit’s $1 million pre-seed round, Acceleprise and other angels also participated. The capital will be used to build out the Orbiit product and engineering team.

Orbiit says its platform handles the communications, matching, scheduling, feedback collection and analytics for people connecting with each other in an online community. The idea is that the communities therefore learn and network better, engage more and share more knowledge.

CEO and co-founder Bilyana Freye said: “Tailored 1:1 connections allow members to discuss difficult topics, be vulnerable and share learnings with one another. Those 1:1 connections are the hardest to execute, but when you start investing in them, with the help of Orbiit, you see engagement feeding into all other initiatives and a vibrant, active community that truly delivers on the promise to its members.”

Bread and Butter Ventures Managing Partner Mary Grove added: “This age-old question of how to leverage technology at scale to drive meaningful connections across communities both internal to an organization and across the globe is a problem we’ve been actively seeking a solution to for a decade. Orbiit brings the perfect blend of tech-enabled software with human curation to create strong connections and provide insights back to community managers.”

The platform is being used by startup communities at True Ventures, GGV and Lerer Hippeau; private networking groups such as Dreamers & Doers; and customer communities, like the CFO community run by fintech leader Spendesk.

Founders Fund Principal Delian Asparouhov said: “We see Orbiit as a key platform for peer learning within companies and communities, unlocking untapped knowledge through curated matchmaking.”

LAUNCHub Ventures participated in the round, following the recent first close of its new $70 million fund.

Cataclysms are a growth industry

By Natasha Mascarenhas

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

For this week’s deep dive, Alex and Natasha dug into Danny’s latest mega-project: A long, fascinating and deeply reported series into the world of disaster tech. It’s all about the market, startups and their backers, so it was perfect fare for our Wednesday episode, in which we dive deep into a single topic.

Part 1: The most disastrous sales cycle in the world

Part 2: Data was the new oil, until the oil caught fire

Part 3: When the Earth is gone, at least the internet will still be working

Part 4: The human-focused startups of the hellfire

We were super curious why Danny had picked disaster tech to niche into, as we hadn’t heard that much about it, frankly. But past the fact that it’s a world where sales cycles can last as long as House Congressional tenures, there was quite a lot to get into:

The series was fun to mine through, and expect Danny’s byline to be all over the topic in the coming weeks. Talk soon, unless — actually especially, if — all of hell breaks loose!

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday morning at 7:00 a.m. PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

Lightrun raises $23M for its debugging and observability platform

By Frederic Lardinois

Lightrun, a startup that helps developers debug their live production code, today announced that it has raised a $23 million Series A round led by Insight Partners. Glilot Capital Partners, which led the company’s $4 million seed round, also participated in this round.

What makes Lightrun stand out in a sea of monitoring startups is its focus on developers (more so than IT teams) and its ability to help developers debug their production code right from their IDEs. With a few keystrokes, they can also instrument the code for monitoring, but the key here is that Lightrun offers what the company calls an “ops-free” process that puts the developers in control. This “shift-left” approach moves the application monitoring process away from ops-centric tools like Splunk and New Relic and instead puts them right into the workspaces with which developers are already familiar.

“The observability market has been very oriented towards IT operators. When an IT operator gets that dreaded page that a service is down, they see health metrics on running instances on servers and have a variety of failover methods and ways to restore service health,” Lightrun co-founder and CEO Ilan Peleg explained. “And they do this all natively on the same interfaces that they use every day for systems management. But when a developer gets that dreaded notification that there is a bug, it’s like the early stages of a crime scene investigation that has no suspects and usually only minor clues.”

Currently, the service only supports Java and the IntelliJ development environment, but the team plans to expand its language and platform coverage by adding support for Python and Node.js, as well as additional IDEs.

“We’ve seen a number of observability solutions joining the market, but found Lightrun’s shift-left approach to be truly unique,” said Teddie Wardi, managing director, Insight Partners, who led the round and will join the board of directors. “The main point of shifting observability to the left in the software development lifecycle is incorporating observability into the day-to-day developer workflow. Lightrun makes observability more ops-free, real-time and ergonomic to the development process than any other platform, and we believe they are in a position to capture a large international market of development teams at enterprises that prioritize rapid feature development and frequent shipping.”

The company recently launched a free community edition of its service and introduced a set of new integrations with services like Datadog, IntelliJ IDEA, Logz.io, Prometheus, Slack and StatsD. Some of Lightrun’s current customers include Taboola, Sisense and Tufin.

The company doubled its employee count over the course of the last year. It will continue to use the new funding to expand its developer community and hire across functions. The company also plans to expand its U.S. presence.

 

Tractive raises $35M as it expands GPS pet tracking to the US

By Brian Heater

Another sizable raise for a pet (cats and dogs) tracking company this morning. Austria-based Tractive has announced a $35 million Series A, led by Guidepost Growth Equity. The round is the company’s first since 2013, when its GPS-based tracker first hit the market.

Along with the funding round, the company is also announcing its official push into the U.S. market — though Tractive has had some presence here through a “soft launch” of an LTE tracker over the summer. That product apparently made the States its fastest growing market, in spite of a lack of official presence.

The funding will go toward its expansion into the U.S./North American market, along with additional scaling and headcount. For the latter, the company is already naming a new EVP of North America and a VP of marketing.

“Tractive is like a seatbelt for your dog or cat. It provides coverage when and where they need it,” said co-founder and CEO Michael Hurnaus in a release. “We designed Tractive to deliver the best possible experience, with up-to-the-second information, so that all pet parents can care for their dogs and cats the way they want and deserve — whether that means monitoring activity levels to reduce the risk of obesity or tracking a dog or cat that slipped out of the yard.”

Also new is the arrival of an upgraded tracker from the company, primarily focused on improved battery life. The big change is the use of Wi-Fi to reduce battery strain when a pet is in the home. The company says it’s able to bump up battery life up to 5x. The tracker is available for $50 in the U.S., plus a monthly subscription fee.

In February, smart pet collar maker Fi announced a $30 million Series B.

 

Financing for students startup StudentFinance raises $5.3M seed from Giant and Armilar

By Mike Butcher

Fintech startup StudentFinance – which allows educational institutions to offer success-based financing for students – has raised a $5.3m (€4.5m) seed round co-led by Giant Ventures and Armilar Venture Partners. It’s now raised $6.6m total, to date.

StudentFinance launched in Spain first, followed by Germany and Finland, with the UK planned this year. Existing investors Mustard Seed Maze and Seedcamp, along with Sabadell Venture Capital, also participated.

The startup, which launched at the beginning of 2020, provides the tech back end for institutions to offer flexible payment plans in the form of ISAs. It also provides data intelligence on the employment market to predict job demand.

It now has 35 education providers signed up managing over €5m worth of ISAs. It also works with upskilling platforms including Ironhack and Le Wagon. StudentFinance’s competitors include (in the USA) Blair, Leif, Vemo Education, Chancen (Germany-based) and EdAid (UK-based).

As for why StudentFinance stands out from those companies, Mariano Kostelec, co-founder & CEO of StudentFinance, said: “StudentFinance is the only platform in this space providing the full end-to-end, cross-border infrastructure to deliver ISAs for students whilst helping to plug the growing skills gap. Not only do we provide the infrastructure to support the ISA financing model, but we also provide data intelligence on the employment market and a career-as-a-service platform that focuses on placing students in the right job. We are creating an equilibrium between supply and demand.”

With an ISA, students only start paying back tuition once they are employed and earning above a minimum income threshold, with payments structured as a percentage of their earnings. This makes it a ‘success-based model’, says Student Finance, which shifts the risk away from the students. They are likely to be popular as workers need to resell with the onset of digitization and the pandemic’s effects.

The startup was founded in 2019 by Mariano Kostelec, Marta Palmeiro, Sergio Pereira and Miguel Santo Amaro. Kostelec and Santo Amaro previously built Uniplaces, which raised $30m as a student housing platform in Europe.

Cameron Mclain, Managing Partner of Giant Ventures, commented: “What StudentFinance has built empowers any educational institution to offer ISAs as an alternative to upfront tuition or student loans, broadening access to education and opportunity.”

Duarte Mineiro, Partner at Armilar Venture Partners, commented: “StudentFinance is a great opportunity to invest in because aside from its very compelling core purpose, this is a sound business where its economics are backed by a solid proprietary software technology.”

Sia Houchangnia, Partner at Seedcamp, commented: “The need for reskilling the workforce has never been as acute as it is today and we believe StudentFinance has an important role to play in tackling this societal challenge.”

Angel backers include investors, which includes: Victoria van Lennep (founder of Lendable); Martin Villig (founder of Bolt); Ed Vaizey (the UK’s longest-serving Culture & Digital Economy Minister); Firestartr (UK-based early-stage VC); Serge Chiaramonte (UK fintech investor); and more.

TechCrunch’s Equity podcast wins a Webby Award

By Henry Pickavet

Today, the fine folks at the Webbys announced that TechCrunch’s flagship podcast, Equity, is the best of its kind in the technology category. We’re stoked!

Alex Wilhelm, Natasha Mascarenhas and Danny Crichton sit down in front of their mics multiple times each week to regale dedicated listeners with news and analysis from the money part of the startup world.

Led by the deft production touch of Chris Gates and Grace Mendenhall, the entertaining trio goes deep into companies, topics and news multiple times each week – while mostly in a good mood. And they’ve come a long way.

Check out the shortest acceptance speech in TechCrunch history here!

Here is our 5-word acceptance speech for winning a @TheWebbyAwards for best technology podcast!!!https://t.co/sNnNnGpsTU pic.twitter.com/Vg2NSOD6Q9

— Equity Podcast (@EquityPod) May 18, 2021

Equity launched in March 2017 in a back room — a veritable closet, if you will! — at our old San Francisco office. Alex would come down once a week from his then-digs at Crunchbase News to join Katie Roof and Matt Lynley. Other hosts on our fun ride have included Kate Clark and our very own Connie Loizos.

We’ve got all kinds of podcast goodies up our award-winning sleeves and we hope you and five of your closest friends keep coming along for the ride.

Settle raises $15M from Kleiner Perkins to give e-commerce companies more working capital

By Mary Ann Azevedo

Alek Koenig spent four years at Affirm, where he was head of credit.

There he saw firsthand just how powerful the alternative lending model could be. Koenig realized that it wasn’t just consumers who could benefit from the model, but businesses too.

So in November 2019, he founded Settle as a way to give e-commerce and consumer packaged goods (CPG) companies access to non-dilutive capital. (Not every company wants to raise venture money). By June 2020, the startup had launched its platform, which is designed to help these businesses manage their cash flow. Over time, he recruited a previous co-worker, Shane Morian, to serve as Settle’s CTO.

And today, the company is announcing that it has raised $15 million in a Series A funding round led by Kleiner Perkins. This follows a previously unannounced $6 million seed raise led by Founders Fund in November 2020. Other investors in the company include SciFi (Affirm founder Max Levchin’s VC firm), Caffeinated Capital, WorkLife Ventures, Background Capital and AngelList Venture CEO Avlok Kohli.

With the pandemic leading to a massive shift toward digital and online shopping, ecommerce and CPG businesses found themselves with the challenge of keeping up with demand while trying to manage their cash flow. The main problem was the lag between accounts receivables and accounts payables.

“These companies suffer from the problem where there are these huge cash flow gaps from buying inventory, waiting to receive it and then turning it into revenue,” Koenig explains. “It takes quite a bit of time for these customers to actually get revenue from all those inventory purchases they need to make. What we do is make it really easy for companies to pay their vendors with extended payment terms.”

Settle does this by automatically syncing to a business’ accounting software and combining that with working capital products it’s developed.

Put simply, Settle will pay a vendor, and then brands can pay Settle back when they turn that COGS (cost of goods sold) into revenue. The startup says it also saves brands money on expensive wire fees.

Image Credits: Settle

“Businesses really value getting cash sooner, so they can use it in their operations,” Koenig said. “We’ve worked to reimagine the CFO suite for brands, starting with integrated financing and bill pay solutions.”

The concept of non-dilutive capital is not a new one with other startups tackling the space in different ways. For example, Pipe aims to give SaaS companies a way to get their revenue upfront, by pairing them with investors on a marketplace that pays a discounted rate for the annual value of those contracts.

Settle is focused on the e-commerce vertical, and building a unique product for that category, Koenig says, rather than trying to build a product aimed for several different industries.

“We don’t want to be a mediocre product for everybody,” he told TechCrunch. “But rather a phenomenal product for this vertical.”

Since its launch last June, Settle has seen its business jump by 1000% although it’s important to note that’s from a small base. Settle is currently working with over 300 brands including baby stroller retailer Lalo, Spiceology and men’s skincare brand Disco. So far, all of its growth has been organic.

“Last year when the pandemic hit, offline retail shut down and ecommerce got a big boost. But that meant that a lot of these companies were running out of orders and were out of stock on many items, so they were just kind of leaving money on the table,” Koenig said. “Once they started using us, they were able to buy more inventory, so we actually help them make more profit, and not just create more sales.”

His reasoning for that last statement is that by giving these businesses the ability to purchase items in bulk, they could get cheaper price per unit costs as well as cheaper shipping costs.

The company is planning to use its new capital in part to grow its team of 20, as well as raise more debt so that it can continue lending money to businesses.

Kleiner Perkins’ Monica Desai Weiss said her firm believes that Koenig and CTO Morian’s expertise in underwriting, capital markets and e-commerce give the pair “a rare skill set that’s unique to their market.”

She’s also drawn to the company’s embedded approach.

“Whereas most lending businesses are fairly transactional and opportunistic, Settle becomes deeply embedded in the way their merchants forecast and grow,” she told TechCrunch. “That approach has demonstrated inherent virality and their timing is perfect — the past year has changed consumer behaviors permanently and also produced massive opportunities for global entrepreneurship via ecommerce. In that way, we see the umbrella of e-commerce expanding massively in the coming years, and we believe Settle will be key to enabling that shift.”

Equity Monday: Elon Musk Elon Musks the crypto markets, while Indian startups raise huge rounds

By Alex Wilhelm

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.

There was lots to get through today, so, in order, here’s the rundown:

Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts!

Extra Crunch roundup: Selling SaaS to developers, cracking YC after 13 tries, all about Expensify

By Walter Thompson

Before Twilio had a market cap approaching $56 billion and more than 200,000 customers, the cloud-communications platform developed a secret sauce to fuel its growth: a developer-focused model that dispensed with traditional marketing rules.

Software companies that sell directly to end users share a simple framework for managing growth that leverages discoverability, desirability and do-ability — the “aha!” moment where a consumer is able to incorporate a new product into their workflow.

Data show that traditional marketing doesn’t work on developers, and it’s not because they’re impervious to a sales pitch. Builders just want reliable tools that are easy to use.

As a result, companies that are looking to create and sell software to developers at scale must toss their B2B playbooks and meet their customers where they are.


Attorney Sophie Alcorn, our in-house immigration law expert, submitted two columns: On Monday, she analyzed a decision by the U.S. Department of Homeland Security not to cancel the International Entrepreneur Parole program, which potentially allows founders from other countries to stay in the U.S. for as long as 60 months.

On Wednesday, she responded to a question from an entrepreneur who asked whether it made sense to sponsor visas for workers who are working remotely inside the U.S.

Thanks very much for reading Extra Crunch this week, and have a great weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

4 lessons I learned about getting into Y Combinator (after 13 applications)

Image of a chair and a trash can in an office, with the bin surrounded by crumpled paper, representing persistence.

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

Can you imagine making 13 attempts at something before attaining a successful outcome?

Alex Circei, CEO and co-founder of Git analytics tool Waydev, applied 13 times to Y Combinator before his team was accepted. Each year, the accelerator admits only about 5% of the startups that seek to join.

“Competition may be fierce, but it’s not impossible,” says Circei. “Jumping through some hoops is not only worth the potential payoff but is ultimately a valuable learning curve for any startup.”

In an exclusive exposé for TechCrunch, he shares four key lessons he learned while steering his startup through YC’s stringent selection process.

The first? “Put your business value before your personal vanity.”

The Expensify EC-1

The Expensify EC-1

Image Credits: Illustration by Nigel Sussman, art design by Bryce Durbin

In March, TechCrunch Daily Reporter Anna Heim was interviewing executives at Expensify to learn more about the company’s history and operations when they unexpectedly made themselves less available.

Our suspicions about their change of heart were confirmed on May 3 when the expense report management company confidentially filed to go public.

With a founding team comprised mainly of P2P hackers, it’s perhaps inevitable that Expensify doesn’t look and feel like something an MBA might envision.

“We hire in a super different way. We have a very unusual internal management structure,” said founder and CEO David Barrett. “Our business model itself is very unusual. We don’t have any salespeople, for example.”

Similar to the way companies must file a Form S-1 that describes their operations and how they plan to spend capital, TechCrunch EC-1s are part origin story, part X-ray. We published the first article in a series on Expensify on Monday:

We’ll publish the remainder of Anna’s series on Expensify in the coming weeks, so stay tuned.

As Procore looks to nearly double its private valuation, the IPO market shows signs of life

Construction tech unicorn Procore Technologies this week set a price range for its impending public offering. The news comes after the company initially filed to go public in February of 2020, a move delayed by the pandemic.

In March 2021, Procore filed again for a public offering, but its second shot ran into a cooling IPO market. The company filed another S-1/A in April, and then another in early May. This week’s filing is the first that sets a price for the Carpinteria, California-based software upstart.

But Procore is not the only company that filed and later put on hold an IPO to get back to work on floating. Kaltura, a software company focused on video distribution, also recently got its IPO back on track. Are we seeing a reacceleration of the IPO market? Perhaps.

3 golden rules for health tech entrepreneurs

Family physician Bobbie Kumar lays out the golden rules to ensure your healthcare product, service or innovation is on the right track.

Rule 1: “It’s not enough to develop a ‘new tool’ to use in a health setting,” Dr. Kumar writes. “Maybe it has a purpose, but does it meaningfully address a need, or solve a problem, in a way that measurably improves outcomes? In other words: Does it have value?”

Dear Sophie: How does the International Entrepreneur Parole program work?

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

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I’m the founder of an early-stage, two-year-old fintech startup. We really want to move to San Francisco to be near our lead investor.

I heard International Entrepreneur Parole is back. What is it, and how can I apply?

— Joyous in Johannesburg

Digging into digital mortgage lender Better.com’s huge SPAC

If you have heard of Better.com but really had no idea what it does before this moment, welcome to the club. Mortgage tech is like pre-kindergarten applications — it applies to a very specific set of folks at a very particular moment. And they care a lot about it. But the rest of us aren’t really aware of its existence.

Better.com, a venture-backed digital mortgage lender, announced this week that it will combine with a SPAC, taking itself public in the second half of 2021. The unicorn’s news comes as the American IPO market is showing signs of fresh life after a modest April.

As tech offices begin to reopen, the workplace could look very different

Colleagues in the office working while wearing medical face mask during COVID-19

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

The pandemic forced many employees to begin working from home, and, in doing so, may have changed the way we think about work. While some businesses have slowly returned to the office, depending on where you live and what you do, many information workers remain at home.

That could change in the coming months as more people get vaccinated and the infection rate begins to drop in the U.S.

Many companies have discovered that their employees work just fine at home. And some workers don’t want to waste time stuck on congested highways or public transportation now that they’ve learned to work remotely. But other employees suffered in small spaces or with constant interruptions from family. Those folks may long to go back to the office.

On balance, it seems clear that whatever happens, for many companies, we probably aren’t going back whole-cloth to the prior model of commuting into the office five days a week.

 

For unicorns, how much does the route to going public really matter?

4 progressively larger balls of US $1 bills, studio shot

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

On a recent episode of TechCrunch’s Equity podcast, hosts Natasha Mascarenhas and Alex Wilhelm invited Yext CFO Steve Cakebread and Latch CFO Garth Mitchell on to discuss when companies should go public, the costs and benefits of the process, and when a SPAC can make sense. Yext pursued a traditional IPO a few years back; Latch is now going public via a blank-check company combination.

The chat was more than illustrative, as we got to hear two CFOs share their views on delayed public offerings and when different types of debuts can make the most sense. While the TechCrunch crew has, at times, made light of certain SPAC-led deals, the pair argued that the transactions can make good sense.

Undergirding the conversation was Cakebread’s recent IPO-focused book, which not only posited that companies going public earlier rather than later is good for their internal operations but also because it can provide the public with a chance to participate in a company’s success.

In today’s hypercharged private markets and frothy public domain, his argument is worth considering.

 

The truth about SDK integrations and their impact on developers

Image of three complex light trails converging against a white background to represent integration.

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

Ken Harlan, the founder and CEO of Mobile Fuse, writes about the perks and pitfalls of software development kits.

“The digital media industry often talks about how much influence, dominance and power entities like Google and Facebook have,” Harlan writes. “Generally, the focus is on the vast troves of data and audience reach these companies tout. However, there’s more beneath the surface that strengthens the grip these companies have on both app developers and publishers alike.

“In reality, SDK integrations are a critical component of why these monolith companies have such a prominent presence.”

Don’t hate on low-code and no-code

The Exchange caught up with Appian CEO Matt Calkins after his enterprise app software company reported its first-quarter performance to discuss the low-code market and what he’s hearing in customer meetings. To round out our general thesis — and shore up our somewhat bratty headline — we’ve compiled a list of recent low-code and no-code venture capital rounds, of which there are many.

As we’ll show, the pace at which venture capitalists are putting funds into companies that fall into our two categories is pretty damn rapid, which implies that they are doing well as a cohort. We can infer as much because it has become clear in recent quarters that while today’s private capital market is stupendous for some startups, it’s harder than you’d think for others.

Bird’s SPAC filing shows scooter-nomics just don’t fly

A pair of Bird e-scooters parked in Barcelona. Image Credits: Natasha Lomas/TechCrunch

Historically — and based on what we’re seeing in this fantastical filing — Bird proved to be a simply awful business. Its results from 2019 and 2020 describe a company with a huge cost structure and unprofitable revenue, per filings. After posting negative gross profit in both of the most recent full-year periods, Bird’s initial model appears to have been defeated by the market.

What drove the company’s hugely unprofitable revenues and resulting net losses? Unit economics that were nearly comically destructive.

Dear Sophie: Does it make sense to sponsor immigrant talent to work remotely?

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

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

My startup is in big-time hiring mode. All of our employees are currently working remotely and will likely continue to do so for the foreseeable future — even after the pandemic ends. We are considering individuals who are living outside of the U.S. for a few of the positions we are looking to fill.

Does it make sense to sponsor them for a visa to work remotely from somewhere in the United States?

— Selective in Silicon Valley

The hamburger model is a winning go-to-market strategy

Follow the Hamburger model for your go-to-market strategy

Image Credits: ivan101 / Getty Images

“Today, we live in a world of product-led growth, where engineers (and the software they have built) are the biggest differentiator,” says Coatue Management general partner Caryn Marooney and investor David Cahn. “If your customers love what you’re building, you’re headed in the right direction. If they don’t, you’re not.

“However, even the most successful product-led growth companies will reach a tipping point, because no matter how good their product is, they’ll need to figure out how to expand their customer base and grow from a startup into a $1 billion+ revenue enterprise.

“The answer is the hamburger model. Why call it that? Because the best go-to-market (GTM) strategies for startups are like hamburgers:

  • The bottom bun: Bottom-up GTM.
  • The burger: Your product.
  • The top bun: Enterprise sales.”

Software subscriptions are eating the world: Solving billing and cash flow woes simultaneously

the recycle logo recreated in folded US currency no visible serial numbers/faces etc.

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

Krish Subramanian, the co-founder and CEO of Chargebee, writes that while subscription business models are attractive, there are two major pitfalls: First, payment.

“Regardless of company size, there’s an ongoing need to convince customers to sign up long term,” Subramanian writes. “The second issue: How do businesses cover the funding gap between when customers sign up and when they pay?”

Is there a creed in venture capital?

Scott Lenet, the president of Touchdown Ventures, asks how deal-makers should think about how to handle themselves when counter-parties attempt to change an agreement. “When is it OK to modify terms, and when should deal-makers stand firm?” he asks.

“Entrepreneurs and investors should recognize that contracts are worth very little without the ongoing relationship management that keeps all parties aligned. Enforcement is so unusual in the world of startups that I consider it a mostly dead-end path. In my experience, good communication is the only reliable remedy. This is the way.”

 

Even startups on tight budgets can maximize their marketing impact

Maximize the impact of your marketing strategy

Image Credits: Ray Massey / Getty Images

“Search engine optimization, PR, paid marketing, emails, social — marketing and communications is crowded with techniques, channels, solutions and acronyms,” writes Dominik Angerer, CEO and co-founder of Storyblok, which provides best practice guidance for startups on how to build a sustainable approach to marketing their content. “It’s little wonder that many startups strapped for time and money find defining and executing a sustainable marketing campaign a daunting prospect.

“The sheer number of options makes it difficult to determine an effective approach, and my view is that this complexity often obscures the obvious answer: A startup’s best marketing asset is its story.”

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