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Extra Crunch roundup: Pre-pitch tactics, Warby Parker S-1, Israel’s fintech ecosystem
Forget what you’ve heard: There are many shortcuts to success.
Tapping into someone else’s experience is a tried-and-true method, which is why two-time Y Combinator participant Chris Morton wrote a guest post for Extra Crunch with advice for founders hoping to be accepted by the famed accelerator.
Morton, who has also reviewed thousands of YC applications, shares his thoughts on when to submit an application, what to do if you miss the deadline and whether you’ll need to relocate if accepted.
“Remember that your application should be good enough to get an interview, not win a prize,” says Morton. “Go back to work instead of spending more time perfecting an application.”
Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription
Image Credits: Robert Katai under a license.
In an interview with reporter Anna Heim, Romania-based marketer Robert Katai discussed some of the methods he uses to help clients refine their content and branding strategies.
“Today, content creation is free — everybody can do it. The hard part is how you distribute and amplify that.”
Katai also shared his impressions of Romania’s startup ecosystem, suggestions for maintaining top-of-mind status with customers, and reinforced the often-overlooked need to continually repurpose content to grab mindshare.
Like our other growth marketing interviews, there’s no paywall.
Thanks very much for reading Extra Crunch this week! I hope you have a fantastic weekend.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
Why global investors are flocking to back Latin American startups
Image Credits: Bryce Durbin / TechCrunch
Latin America’s increasingly dynamic venture capital scene has been making headlines of late. To learn more about why investors are so enthusiastic, senior reporter Mary Ann Azevedo spoke to several who are actively engaged with the region:
- Shu Nyatta, managing partner, SoftBank
- Ethan Choi, partner, Accel
- Julie Ruvolo, director of venture capital, LAVCA
- Bill Cilluffo, partner, QED Investors
- Ana Cristina Gadala-Maria, principal, QED Investors
- Ross Darwin, principal, Owl Ventures
“I am not surprised by all the activity,” Mary Ann writes. “However, I am a bit taken aback by the sheer number of rounds, the caliber of firms leading them and the sky-high valuations.
“It seems that the region is finally, and deservedly, being taken seriously. This is likely just the beginning.”
Corporate venture capital follows the same trend as other VC markets: Up
Image Credits: Nigel Sussman (opens in a new window)
Corporations are not remaining on the sidelines of the fiery 2021 venture capital game, Alex Wilhelm and Anna Heim note in The Exchange.
After parsing data from CB Insights and Stryber and chatting with a handful of investors, Alex and Anna concluded that the corporate venture capital market looks a lot like other VC markets.
“Perhaps this should not be a surprise,” they write. “We’ve seen non-venture funds flow into the later stages of startup land, pushing VCs toward earlier-stage and more venture-y deals. Why would CVCs be immune to the same trend?”
Ramp and Brex draw diverging market plans with M&A strategies
Image Credits: Bryan Mullennix (opens in a new window) / Getty Images
Corporate spending management startup Brex raised a $300 million Series C and acquired Buyer just a week after rival Brex announced it had acquired Israeli fintech Weav.
Ryan Lawler and Alex Wilhelm dug into the Ramp-Brex rivalry, and what those acquisitions say about their diverging strategies.
“From a high level, all of the recent deal-making in corporate cards and spend management shows that it’s not enough to just help companies track what employees are expensing these days,” they write.
“As the market matures and feature sets begin to converge, the players are seeking to differentiate themselves from the competition.”
Boston’s startup market is more than setting records in scorching start to year
Image Credits: Nigel Sussman (opens in a new window)
Alex Wilhelm and Anna Heim interviewed VCs and corralled data to present a detailed picture of Boston’s startup funding scene.
“Boston is benefiting from larger structural changes to at least the U.S. venture capital market, helping close historical gaps in its startup funding market and access funds that previously might have skipped the region,” they write.
“And local university density isn’t hurting the city’s cause, either, boosting its ability to form new companies during a period of rich investment access.”
Europe’s quick-commerce startups are overhyped: Lessons from China
Image Credits: Andrew Holt (opens in a new window) / Getty Images
Half of the companies offering instant grocery delivery in Europe were founded last year as the pandemic reshaped most aspects of our existence.
To date, they’ve raised about $2 billion, but Picus Capital’s Alexander Kremer says startup lessons from China suggest that “instant delivery is not the magic bullet to crack the dominance” of old-school grocery players.
“If the performance of online grocery platforms in China (a market five to seven years ahead of Europe in terms of online retail) is anything to go by, a range of B2C business models would be more likely to displace the traditional grocery retailers.”
D2C specs purveyor Warby Parker files to go public
Image Credits: Nigel Sussman (opens in a new window)
For The Exchange, Alex Wilhelm examines the S-1 filing from Warby Parker, “a consumer hardware company with two main sales channels, largely attractive economics, falling losses and rising adjusted profitability. You could even argue that it handled the pandemic well, despite COVID-19’s negative impact on its operations.”
But how are its growth prospects?
Dear Sophie: Can I still get a green card through marriage if I’m divorcing?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie,
I received a conditional green card after my wife and I got married in 2019. Recently, we have made the difficult decision to end our marriage. I want to continue living and working in the United States.
Is it still possible for me to complete my green card based on my marriage through the I-751 process or do I need to do something else, like ask my employer to sponsor me for a work visa?
— Better to Have Loved and Lost
Using AI to reboot brand-client relationships
Image Credits: Getty Images under an alashi (opens in a new window)license.
Marketing automation can help boost key metrics, but it can also be a disservice to brands by perpetually devaluing goods and services, ShareThis’ Michael Gorman writes in a guest column.
Companies with a narrow focus on driving conversions are missing the bigger picture: AI can help create richer experiences that identify consumer actions and intent while also improving customer experiences.
“We live in a world rich with data, and insights are growing more vibrant every day,” he writes.
Israel’s maturing fintech ecosystem may soon create global disruptors
Image Credits: Thitima Thongkham (opens in a new window) / Getty Images
Fintech startups based in Israel raised more than $1.8 billion in 2019, but in Q1 2021, companies in the category raised $1.1 billion.
Facilitating a wide range of services, more than a dozen fintech unicorns have already emerged in a country that has a population slightly smaller than Los Angeles County, many of them started by entrepreneurs who lacked financial backgrounds.
“So what is it about Israeli-founded fintech startups that stand out from their scaling neighbors across the pond?” asks Flint Capital’s Tel Aviv-based investor, Adi Levanon.
Forbes jumps into hot media liquidity summer with a SPAC combo
Image Credits: Nigel Sussman (opens in a new window)
For The Exchange, Alex Wilhelm takes stock of Forbes’ SPAC combination during a week when POLITICO was snatched up for more than $1 billion by Axel Springer and just a few months after BuzzFeed went public via a blank-check company.
“Is it the most exciting debut? No,” he writes.
“But it does highlight that with enough sheer gumption, one can take a magazine business into the digital age and keep aggregate revenue growing. That’s worth something.”
Are B2B SaaS marketers getting it wrong?
Image Credits: mevans (opens in a new window) / Getty Images
Technical jargon is one of the most annoying aspects of technology marketing.
Sadly, it tends to perpetuate itself: Marketers are terrified of making a wrong move, so they tend to copy what everyone else is doing.
If you want to attract customers and drive higher conversions, cut the jargon.
“Do everything you can to be immediately understood and you’ll have a much better chance of cutting through the noise and pushing clear and persuasive benefits in a way no prospect can resist,” advises Konrad Sanders, CEO of The Creative Copywriter.
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The pre-pitch: 7 ways to build relationships with VCs
Most founders fall into an extremely common trap: Just because you produced outstanding results for the last round of investors doesn’t mean new investors will believe you. This new cohort hasn’t seen that performance firsthand, and they have no reason to trust you yet.
As a founder approaching your next round, it’s common to wonder, “How do I get this new group of investors to trust that I will perform?”
In our experience, founders who fundraise successfully are great at building relationships, and they usually deliver what we call “the pre-pitch.” This is the “we actually aren’t looking for money; we just want to be friends for now” pitch that gets you on an investor’s radar so that when it’s time to raise your next round, they’ll be far more likely to answer the phone because they actually know who you are.
But the concept of the pre-pitch goes deeper than just having potential investors be aware of your existence. Building relationships with potential future investors requires you to think less like a founder and more like a marketer — much of the relationship heavy lifting comes long before it’s time to ask for a capital commitment.
If an investor has made a deal in your space, there’s a good chance they know an earlier-round investor who could potentially be a good fit for you today.
There’s a host of advantages to the pre-pitch approach:
- Good practice: You’re not asking for money. Instead, you’re offering a sneak peek. Since your relationship-builder pre-pitch doesn’t have millions on the line, you’ll invariably be less anxious, which leads to better relationships. Remember: If it’s not a good fit, who cares?
- Candid feedback: When you’re not asking for money, you’re more likely to receive honest feedback that you might not get in a high-stakes environment.
- Set the baseline: You should go over where you’re currently at, why it’s actually not time to raise capital quite yet (the inverse of “Why Now”), and what you still have to accomplish until the time is right.
- Performance-based trust: Put your performance where your mouth is by showing your potential investor where you are today and what you expect to do in the short term. Later on, you can prove to them that you achieved what you said you would.
7 ways to build relationships with VCs
Now you’re probably wondering, “What the heck do I say to build a good relationship with that next-round investor?” Here are a few notes on how to approach the pre-pitch:
Seek the relationship, not the money
Acknowledge you’re early, but mention that you think it could potentially be a good fit later on. State it up front that you’re seeking a relationship and want to find out if you could eventually be a good fit for one another. Don’t sneak in an ask; let the relationship blossom organically.
Here’s an example: “We’re actually not raising yet, and we’re probably too early for you. But I think this is something you might be very interested in, and thought it made sense to reach out, open up a relationship and see if there might be a fit.”
Don’t waste time
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Stipop offers developers and creators instant access to a huge global sticker library
With more than 270,000 stickers, Stipop’s library of colorful, character-driven expressions has a little something for everyone.
The company offers keyboard and social app stickers through ad-supported mobile apps on iOS and Android, but it’s recently focused more on providing stickers to developers, creators and other online businesses.
“We were able to gather so many artists because we actually began as our own app that provided stickers,” Stipop co-founder Tony Park told TechCrunch. The team took what they learned from running their own consumer-facing app — namely that collecting and licensing hundreds of thousands of stickers from artists around the world is hard work — and adapted their business to help solve that problem for others.
Stipop was the first Korean company to go through Yellow, Snapchat’s exclusive accelerator. The company is also part of Y Combinator’s Summer 2021 cohort.
Stipop’s sticker library is accessible through an SDK and an API, letting developers slot the searchable sticker library into their existing software. The company already has more than 200 companies that tap into its huge sticker trove, which offers a “single-day solution” for a process that would otherwise necessitate a lot more legwork. Stipop launched a website recently that helps developers integrate its SDK and API through quick installs.
“They can just add a single line of code inside their product and will have a fully customized sticker feature [so] users will be able to spice up their chats,” Park said.
Park points out that stickers encourage engagement — and for social software, engagement means growth. Stickers are a playful way to send characters back and forth in chat, but they also pop up in a number of other less obvious spots, from dating apps to e-commerce and ridesharing apps. Stipop even drives the sticker search in work collaboration software Microsoft Teams.
The company has already partnered with Google, which uses Stipop’s sticker library in Gboard, Android Messages and Tenor, a GIF keyboard platform that Google bought in 2018. That partnership drove 600 million sticker views within the first month. A new partnership between Stipop and Coca-Cola on the near horizon will add Coke-branded stickers to its sticker library and the company is opening its doors to more brands that understand the unique appeal of stickers in messaging apps.
Park says that people tend to compare stickers and gifs, two ways of wordlessly expressing emotion and social nuance, but stickers are a world unto themselves. Stickers exist in their own creative universe, with star artists, regional themes and original casts of characters that take on a life of their own among fans. “Sticker creators have their own profession,” Park said.
Visual artists can also find a lot of traction releasing stickers, even without sophisticated illustrations. And since they’re all about meaning rather than refinement, non-designers and less skilled artists can craft hit stickers too.
“Stickers are great for them because it [is] so easy to go viral,” Park said. The company has partnered with 8,000 sticker creators across 25 languages, helping those artists monetize their creations and generate income based on how many times a sticker is shared.
Stickers command their own visual language around the world, and Park has observed interesting cultural differences in how people use them to communicate. In the West, stickers are often used in place of text, but in Asia, where they’re used much more frequently, people usually send stickers to enhance rather than replace the meaning of text.
In East Asia, users tend to prefer simple black and white stickers, but in India and Saudi Arabia, bright, golden stickers top the trends. In South America, popular stickers take on a more pixelated, unique quality that resonates culturally there.
“With stickers, you fall in love with [the] characters you send… that becomes you,” Park said.
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Canva CEO Melanie Perkins will tell us about the journey to a $15B valuation at Disrupt
The design space has undergone major changes in the last decade. What once was dominated by a single player in Adobe has now become a burgeoning software landscape, with a handful of major players answering the needs of designers across every industry.
One such player is Canva, the startup valued at over $15 billion. The company started out with a consumer-facing product, making design accessible to non-designers. But on the back of launching an enterprise-centric suite of tools, the growth of Sydney-based Canva has been staggering.
So it should come as no surprise that we’re absolutely thrilled to have Canva co-founder and CEO Melanie Perkins join us at Disrupt (Sept 21-23) for a fireside chat.
Since launching the company in 2013, Perkins has led its growth to now see more than 55 million users each month, ranging from individual creators to SMBs to Fortune 500 companies.
We’ll talk to Perkins about how she shifted the company from individual creators to a B2B platform, what it’s like to run an industry-specific startup in the midst of a fundamental evolution — see: Design may be the next entrepreneurial gold rush — and how she’s handled this period of monumental growth for the company.
Perkins joins a stellar lineup of speakers at Disrupt, including Secretary Pete Buttigieg, Calendly’s Tope Awotona, Slack CEO Stewart Butterfield, Houseplant’s Seth Rogen and investor Chamath Palihapitiya, among many others. Check out a full list of speakers here. Disrupt is less than a month away and you can still get your pass to access it all for less than $100! Register today.
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Electric vehicle company Rivian has confidentially filed for an IPO
Rivian, the electric vehicle startup backed by a host of institutional and strategic investors, including Ford and Amazon, has confidentially filed paperwork with the U.S. Securities and Exchange Commission to go public.
The size and price range for the proposed offering have yet to be determined. The initial public offering is expected to take place after the SEC completes its review process, subject to market and other conditions, the brief statement said.
The confidential filing comes less than two months since Rivian announced it had closed a $2.5 billion private funding round led by Amazon’s Climate Pledge Fund, D1 Capital Partners, Ford Motor and funds and accounts advised by T. Rowe Price Associates Inc. Third Point, Fidelity Management and Research Company, Dragoneer Investment Group and Coatue also participated in that round.
The company did not share a post-money valuation at the time of the July 2021 announcement.
The electric automaker, which now employs 7,000 people, is preparing to deliver its R1T pickup truck in September. The road to produce the R1T and an accompanying SUV requires capital, which Rivian has had little trouble raising.
Rivian has raised roughly $10.5 billion to date. In January, the company brought in $2.65 billion from existing investors T. Rowe Price Associates Inc., Fidelity Management and Research Company, Amazon’s Climate Pledge Fund, Coatue and D1 Capital Partners. New investors also participated in that round, which pushed Rivian’s valuation to $27.6 billion, a source familiar with the investment round told TechCrunch at the time.
Developing….
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Sastrify snags $7M to help SMEs manage SaaS buying
With so much startup activity in the software-as-a-service (SaaS) space it can be a challenge for businesses to figure out which of these SaaS (SaaSes?) are actually useful and worth continuing to shell out for. Well, Cologne-based startup Sastrify is here to help — offering what it describes as a “highly automated” platform (covering some 20,000+ SaaS solutions) to help other businesses with procurement and management of third-party services.
It may not sound the sexist startup business to be in, but despite only launching earlier this year, Sastrify is already cash-flow positive — and can tout “a high six-digit recurring revenue” just a few months post-launch. Not bad for a startup that was only founded last summer.
Today it’s announcing closing a $7 million seed round from HV Capital and the founders of FlixMobility, Personio and SumUp. That follows a $1.3 million pre-seed raised back in late 2020, ahead of its launch.
Sastrify tells us it has around 50 customers at this stage — including “unicorn startups like Gorillas”. It says its approach works best for growing companies with 100+ employees, and is perhaps especially suited to European tech scale-ups.
On the competitive front the startup points to U.S.-based Vendr and Tropic, which may further explain the regional focus (although it’s not only selling in Europe).
Sastrify’s sales pitch to SMEs includes that current customers have seen an average 6.5x return on their investment — in addition to what it bills as “thousands of working hours” saved from “wasted” activities related to SaaS procurement.
Cost savings are another carrot — which the startup is claiming its customers are “typically” saving around 20-30% of their SaaS cost.
So how does it actually make it easier for businesses to navigate the pros & cons of the smorgasbord of SaaS(es) now out there?
“Our main mantra is: ‘Effective procurement asks the right questions at the right time’,” says co-founder Sven Lackinger, who previously co-founded a SaaS startup himself of course (evopark), exiting that company back in 2018.
“To ensure that we’ve defined and implemented a five-step process into our platform, covering the whole life-cycle of SaaS applications within enterprises. Our clients can search for the suitable SaaS solutions while we guide them through the right evaluation process per use case and tool (e.g. what are similar companies using?).
“We then take over the whole buying process, aka automatically reaching out to different vendors, AI-/OCR-based comparing and benchmarking for offers. Once the tool is implemented, we make sure to track usage frequently (via regular, automated surveys to tool owners) and re-evaluate over time so there is no ongoing waste of licenses.”
“We have a more automated platform [than Vendr and Tropic] and can also resell licenses to our customers directly (e.g. for Google, Microsoft and others) to ensure best prices and fast delivery,” he also tells us. “This allows us to offer a faster and cheaper solution which is more suited to the European market (where the average SaaS expense per company is still smaller than in the US).”
If you’re outsourcing all this other stuff to SaaS providers, why not get a specialist service to stay on top of how you do that too, is the basic idea.
The 30-strong Sastrify team will be using the seed funding to accelerate sales, marketing and product dev so it can expand its SaaS management service to more companies in Europe and beyond.
Commenting on the funding in a statement, Jasper Masemann, partner at HV Capital, added: “Cloud software adoption is massively accelerating and almost every company nowadays uses SaaS products but does not buy and manage them efficiently. Sastrify’s astonishing growth underlines the broad customer value the team has already created. It is early days but Sastrify could create an SAP Arriba with a payment solution for SMB – a massive market just in Europe.”
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Find trends, advice and value at these special breakout sessions during TC Disrupt 2021
TechCrunch Disrupt 2021 takes place September 21-23, and we’re here to call out just some of the awesome content we have scheduled over three very busy days. The Disrupt agenda so far features more than 80 interviews, panel discussions, events and breakout sessions that span the startup tech spectrum… with more to come!
You gotta pay to play: Buy your pass to Disrupt 2021 here and open a door to opportunity.
Let’s talk about the special breakout sessions, which are hosted by our partners. These smaller sessions deliver real value and, according to attendee feedback, that holds true across all TechCrunch events.
I enjoyed the big marquee speakers from companies like Uber, but it was the individual breakout presentations where you really started to get into the meat of the conversation and see how these mobile partnerships come to life. — Karin Maake, senior director of communications at FlashParking
There was always something interesting going on in one of the breakout sessions, and I was impressed by the quality of the people participating. Partners in well-known VC firms spoke, they were accessible, and they shared smart, insightful nuggets. You will not find this level of people accessible and in one place anywhere else. — Michael McCarthy, CEO of Repositax
Now’s the time to start planning your Disrupt 2021 schedule, and you don’t want to miss out on these informative presentations.
The Missing Block to Bring Crypto to the Masses
With the emergence of concepts such as NFT and GameFi, socialization prosperities are bringing new energy to the crypto world. Known as the People’s Exchange, KuCoin is committed to exploring disruptive technologies and genius ideas to bring crypto closer to the masses. In this session, you will hear from KuCoin CEO Johnny Lyu on what is the outlook of the evolving crypto market and how to achieve better trading experience for cryptocurrency investors. Brought to you by KuCoin.
Humanizing AI: How Brands Are Revolutionizing Customer Experience in an increasingly Digital World
Empathy deficit is the largest imminent threat to a businesses’ growth, but there’s hope. Humanized AI is allowing brands to create empathetic customer experiences by offering uniquely personal interactions with digital people. But what is empathy, really? And how can it help brands and storytellers better connect with their audiences in a cookie-less world? Soul Machines’ co-founder and CBO Greg Cross explains how embracing AI could be just the competitive advantage your brand needs. Brought to you by Soul Machines.
Revolutionizing the Global Metaverse Economy
Together Labs is leveraging the power of blockchain technology to create the new metaverse economy where users can buy, sell, invest and shape its future. Earlier this year, Together Labs launched VCOIN, the first global, digital currency that can be used in and out of the metaverse. VCOIN makes it possible for users to play to earn real value and then convert that value to cash. Soon, Together Labs will introduce additional blockchain offerings to accelerate the transition to a complete blockchain economy, setting the economic model for other metaverses to follow. Brought to you by VCOIN.
Securing Your journey to IPO from the start
Without the right governance tools in place at a company’s inception, a business becomes susceptible to risks as it scales. Adopting governance practices early in a business’s growth process sets them up for long-term growth and a successful IPO. Hear leadership perspectives for securing your business growth in a time of rapid change. Brought to you by Diligent Corporation.
You’ve Raised Your Seed Round — Now What? Preparing for Your Series A
The first hurdle has been cleared: initial funding is in the bank. You’re hiring more talent, seeing the beginnings of a finished product with clear evidence of traction and experiencing the coveted growth that previously felt just out of reach. Before you know it, the decision to raise for what is arguably the most competitive round is staring you in the face. In this panel, join Samsung Next’s David Lee alongside founders Kadie Okwudili (Agapé), Andy Hoang (Aviron), and Jim Bugwadia (Nirmata) as they discuss the learnings and nuances of bridging seed to Series A. Brought to you by Samsung Next.
Korea Pavilion Pitch Session – Hosted by KOTRA
We present the 13 pioneering Korean companies that will enrich our lives with their innovative edge. The companies specialize in various technologies, including Green Tech, AR/VR, 3D Display, AI & Big Data and Cybersecurity. Don’t miss your chance to catch a glimpse of ingenuity from the technology powerhouse. Brought to you by KOTRA.
Eliminating Styrofoam Protective Packaging
Over 380 million tons of plastic are produced every year and 50% of that is for single-use purposes such as product packaging. Until now, companies have been hard-pressed to find a replacement for Styrofoam for protecting fragile items like electronics and appliances. John Felts of Cruz Foam will discuss the development of bio-benign, compostable alternative materials. Tom Chi of At One Ventures will talk about the importance of investing in environmental and climate entrepreneurs. Moderator Scott Cassel of PSI will lead the discussion on how the packaging value chain can create a truly circular economy. Brought to you by Cruz Foam.
Powering What’s Next: Insights from the Enterprise Software Market
Spurred by digital transformation and the recent shift to remote work, the enterprise software industry has gone from strength-to-strength and competition for deals and valuations are at all-time highs. While investor appetite for enterprise software may be strong, it doesn’t mean that all tech businesses make worthy investments. In this panel, hear from Michael Fosnaugh and Monti Saroya, co-heads of Vista’s Flagship investment strategy, and a selection of Vista CEOs on the hallmarks of best-in-class software companies and trends driving the industry. Brought to you by Vista Equity Partners.
TechCrunch Disrupt 2021 takes place September 21-23. Don’t have your pass yet? Buy one here and check out the breakout sessions for trends, advice and opportunities to help grow your business.
Is your company interested in sponsoring or exhibiting at Disrupt 2021? Contact our sponsorship sales team by filling out this form.
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The pure hell of managing your JPEGs
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
Natasha and Alex and Grace and Chris were joined by none other than TechCrunch’s own Mary Ann Azevedo, in her first-ever appearance on the show. She’s pretty much the best person and we’re stoked to have her on the pod.
And it was good that Mary Ann was on the show this week as she wrote about half the dang site. Which meant that we got to include all sorts of her work in the rundown. Here’s the agenda:
- Funding rounds from: Ramp, which raised $300 million at a $3.9 billion valuation; NoRedInk, which put together an impressive $50 million Series B; and Playbook, which is building a sort of Dropbox for designers. Each company gave us something different to noodle on, be it the diverging strategies at Ramp and Brex, how NoRedInk is different from Grammarly, and why Dropbox is not the Dropbox for designers.
- Then we spun the globe to narrow our focus to Latin America, a booming startup scene that Mary Ann recently profiled for Extra Crunch. In a nutshell, venture capital is helping drive an enormous wave of startup activity in the region — or perhaps a wave of startup activity is driving a boom in venture investment? — leading to huge companies, and perhaps some tech-powered inclusion of more folks into the modern banking and digital economy. (For more, here are notes on the Brazilian market’s rising exit tally! And Flink raised, which was worth chewing on as well.)
- We quickly pivoted to the hot-button issue of the moment for every startup (and business): hiring. Natasha noted how startups used to focus on runway, and now they are looking to fill empty seats amid the great resignation.
- Finally, we nattered about huge venture results from Boston, big numbers from Austin and what increasingly feels like an everything bubble. Chicago is doing well, too. Pick a city, it’s putting up big numbers.
And that’s a wrap, for, well, at least the next five seconds.
Equity drops every Monday at 7:00 a.m. PDT, Wednesday, and Friday morning at 7:00 a.m. PDT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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As 5G demand grows, Sitenna helps telcos find more cell tower locations, faster
The buildout of 5G networks continues apace, with wide-scale deployments across much of the developed world. Yet, one of the largest challenges with closing the gaps in coverage maps are constraints on 5G transmissions. Because of the spectrum that 5G technology uses compared to 4G, telecom operators need to install many times more towers to deliver the advertised bandwidth with the same quality signal that users expect.
Installing cell towers is a daunting proposition though. An operator has to find exactly the right location in terms of line of sight to users, then make sure the location has power and internet access, and then negotiate a contract with the property owner to keep the tower there for a decade or more. Now repeat tens of thousands of times (and maybe even more).
Sitenna, which will debut next week as part of Y Combinator’s Summer 2021 Demo Day, wants to radically speed up the process of selecting tower sites and securing contracts, creating a marketplace for landlords, tower operators and telcos alike.
Tower siting and access to poles have in some cases emerged as national infrastructure priorities. In the United States, the challenges around installing new towers — and new towers quickly — became a top priority of the FCC during the Trump administration, which launched a 5G FAST Plan to try to ease regulations around tower installation.
Sitenna’s founders Daniel Campion and Brian Sexton saw an opportunity with such programs to help with the movement. Over the past year, they have built out what is essentially a marketplace that on one hand helps property owners figure out if they have an asset that’s worth investigating for telecom usage, and on the other, helps tower operators select and digitally sign deals for installation.
Sitenna co-founder and CEO Daniel Campion. Image Credits: Sitenna
The company launched in the United Kingdom in June, and “it kind of resonated,” Campion said, noting that 65,000 real estate assets and roughly 15% of the towers in the U.K. are now on the platform. The company has kicked off two pilots with Vodafone and its tower provider Cornerstone. He said the company intends to enter the U.S. market in the first quarter of next year.
While the company is starting with a marketplace, like many startups today, it is also augmenting that marketplace with B2B SaaS tools. In its case, that means tools for telcos to manage the process of onboarding a new tower location and then managing the asset. “Once they find the site, they ping pong emails back and forth,” Campion said. “So we have built some tools to help them on their workflows.”
Sitenna’s platform allows landlords and tower operators to inspect and transact tower locations. Image Credits: Sitenna
While there is definitely a large wave of tower installations underway now with the transition to 5G wireless, that wave doesn’t mean that tower installation will suddenly dry up in a few years. Campion notes that there is a “continual refresh of 15-20% on the carrier side” due to everything from changing usage patterns and building redevelopment to just standard hardware replacement.
And of course, there is always 6G, which while completely amorphous today, is a real thing that I get invites to conferences for. There’s always going to be a next generation of wireless, and Sitenna wants to become the center for managing that infrastructure.
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Forbes jumps into hot media liquidity summer with a SPAC combo
What a busy week in the world of media liquidity.
That’s a sentence you don’t get to write often. Regardless, news broke this week that Axel Springer is buying U.S. political journalism outfit POLITICO. The transaction was expected, but the eye-popping roughly $1 billion price tag still has tongues wagging. We even got on the podcast to chat about it.
And Forbes announced that it is going public via a SPAC. The business publication’s news follows BuzzFeed’s journey to the public markets through a blank-check company. Hot media liquidity summer? Something like that.
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That TechCrunch is in the process of being sold to private equity, of course, is not something that we should forget. Shoutout to the Verizon bankers who found a way to get rid of us while also deleveraging Verizon’s debt profile. Ten points.
I want to take a quick tour of the Forbes SPAC deck this morning. Our notes on BuzzFeed’s are here, in case you want to run comparisons. This will be easy and fun. Perfect Friday morning fare. Into the data!
What’s it worth?
In corporate-speak, Forbes Global Media Holdings is merging with blank-check company Magnum Opus Acquisition Limited. The transaction will close either Q4 2021 or Q1 2022, Forbes estimates.
The deal itself is somewhat modest in scale compared with other SPAC deals we’ve recently looked into. Forbes reports that it will sport “an implied pro forma enterprise value of $630 million, net of tax benefits,” after its completion. Some $600 million in gross proceeds will be derived from Magnum Opus funds “and $400 million of additional capital through a private placement of ordinary shares of the combined company,” Forbes writes.
The company will sport an equity valuation of $830 million after the deal closes, per its own calculations. That number will change some depending on redemptions ahead of the combination. The gap between the large dollars going into the deal and the modest final valuation of the public Forbes entity is due to some $440 million in secondary transactions for existing Forbes shareholders.
In case you’d prefer all of that in table form, here’s the Forbes investor deck:
Image Credits: Forbes SPAC deck
Is $830 million a fair price? Let’s dig into Forbes’ results.
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