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Spora Health launches primary care network for Black people and people of color
A number of healthcare disparities exist for Black people in America, but they can oftentimes go unaddressed due to the lack of education and understanding among medical professionals. Spora Health, which launches today for patients in Virginia, Tennessee, Pennsylvania and Florida, aims to fix that.
“An equitable healthcare system has never existed in America, especially for Black folks and that is the goal,” Spora Health founder and CEO Dan Miller told TechCrunch.
Spora Health is a primary care provider for Black people and people of color. Initially, Spora Health is taking a telemedicine approach, but eventually plans to open physical locations.
Spora Health patients get access to its care delivery platform and care team that consists of doctors, nurse practitioners, nutritionists and more. Its machine learning-driven technology also can predict risk profiles for patients and look for chronic conditions like pre-diabetes, hypertension, emphysema and more.
Image Credits: Spora Health
Spora Health costs $9.99 per month. On the first visit, patients pay their normal co-pay. For those without insurance, they pay a one-time $99 fee on their first visit. You can think of it almost as a One Medical, which charges $199 per year, but with the specific needs of Black people and people of color in mind.
“Being a young startup, we can compete on price,” Miller said. “For us, we can make the offering more affordable because we have less overhead as well as tech that allows us to be more thoughtful.”
While the goal is to better serve Black people and people of color, not all of Spora Health’s providers fall into those demographics.
“We want to overindex on providers of color but supply and demand doesn’t match up,” Miller said. “There’s a shortage of providers of color becoming physicians. So we need to invest in the reeducation of providers.”
In order to become a provider on Spora Health, medical professionals must go through an interview process and participate in the Spora Institute. The Spora Institute serves to reeducate providers and help them understand their implicit biases.
“Within med school, there is a curriculum around health equity but that only happens in the first year of the program,” Miller said. “What tends to happen by the end of residency is that a lot of these implicit biases tend to surface again because the training curriculum and environment does not incorporate equity and doesn’t think about disparities in certain populations.”
Spora Health is actively raising a $1.2 million seed round. So far, the company has closed $1 million of that round.
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Cookware startup Great Jones raises $1.75M as it expands into bakeware
Great Jones is expanding into a new area of the kitchen tomorrow, with what co-founder and CEO Sierra Tishgart described as the startup’s biggest launch since it released its first products two years ago.
Ahead of launching the new bakeware line, Great Jones is announcing that it has raised $1.75 million in new funding.
The money comes from notable figures in the e-commerce world — Fellow founder Jake Miller and Very Great founders Eric Prum and Josh Williams — along with restauranteurs including Mimi Cheng’s co-founder Hannah Cheng, Lilia founder Sean Feeny, Kopitiam co-owner Moonlynn Tsai and Konbi co-owner Akira Akuto.
NEA partner Liza Landsman invested as well, and Tishgart said that Sweetgreen’s Nic Jammet and Parachute’s Ariel Kaye have joined the startup’s board of directors. Tishgart noted that Great Jones has worked on collaborations and product partnerships with many of these investors, and she also pointed to Kaye and Parachute as providing a model for how Great Jones can grow.
“To me, starting with sheets, [Kaye] has taken a product which people loved and thoughtfully expanded to a broad selection,” Tishgart said.
She sees a similar path for Great Jones — just as Parachute has become a “one-stop shop” for the home, Tishgart wants her startup to do the same for your kitchen. Great Jones launched with pots, pans and a Dutch oven, then added a baking sheet and is now expanding into a whole line of bakeware.
Image Credits: Great Jones
The new bakeware products (many of them inspired by classic Pyrex designs) include the Sweetie Pie ceramic pie dish, the Hot Dish ceramic casserole dish, the Breadwinner loaf pan, the Patty Cake cake pan and a new broccoli-colored version of the Holy Sheet baking sheet. You can buy the pieces à la carte (the Holy Sheet is $35, the pie pans are $45 and the bread pans are $65 for a pair) or purchase the whole set for $245.
Tishgart added that the company has had a “really, really busy year” with lockdowns and social distancing.
“People are cooking more than ever,” she said. “This is a category and an industry that have really been able to thrive on this.”
At the same time, Tishgart emphasized that the growing interest from millennials and younger consumers is a long-term trend that won’t go away when the pandemic is over — with the rise of celebrity chefs, high-profile restaurants and more food content than ever, food and cooking have become a bigger “cultural force” than ever.
There have been challenges as well, particularly as the pandemic has affected supply chains. Tishgart said the company has spent much of the year “chasing product,” but it benefited from using a variety of materials and working with a variety of manufacturers.
“This is one thing that upfront made for a more complicated supply chain,” she said. “But it’s a strong saving grace now, because we’re not reliant on one factory or one part of the world.”
The funding, Tishgart said, will allow Great Jones to invest in further product development and production. And while there are plenty of other cookware startups raising funding, she said that “it’s motivating, it’s exciting to see how other people interpret it” and that the different brands “all speak to different customers.”
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What happens to high-flying startups if the pandemic trade flips?
So much can change in a day.
This morning, news that a trial COVID-19 vaccine candidate had an effective rate of more than 90% shook the financial world. The Pfizer vaccine is reportedly so effective, the company “will have manufactured enough doses to immunize 15 to 20 million people” by the end of the year, according to the New York Times, appears to have given investors the green light to pile back into companies harmed by the pandemic.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
The shift of money from shares that proved popular during the summer is massive and abrupt. Zoom and Peloton are down sharply this morning, while Uber and Lyft are soaring. Indeed, the Dow Jones Industrial Average and S&P 500 indices are up around 4.8% and 3.3% respectively, while SaaS and cloud share are off 3.5%.
Investors are taking money out of companies that were expected to do well thanks to the pandemic and moving that capital into firms that were weakened by the pandemic.
Our question for this morning: what do these changes mean for the economic forces that have broadly favored venture-backed startups? What happens to high-flying startups if the pandemic trade flips? What’s next for insurtech, edtech, fintech and SaaS? Let’s discuss.
Hot sectors, warm futures?
Short-term market movements do not always predict the future accurately, so we should not treat today’s trading as gospel.
That said, it’s not hard to draw some basic conclusions from the trading activity. Here’s what I think we can deduce from today’s stock market activity:
- Corporate software spend growth will slow: The broad decline in the value of software companies today appears to indicate that investors expect slower growth in the future. This is especially sharp in companies boosted by the pandemic itself, and, it appears, less acute in companies that were less helped by the COVID-19 economy. Our read? Investors are betting that growth amongst the companies that most benefited from a switch to remote work, for example, will see the greatest deceleration from recent forecasts. For startups, the lesson here is plain. Go look at your public comps and consider your own valuation likely trading along similar lines.
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Uzabase sells Quartz to the site’s CEO and staff
Quartz is going private, with co-founder and CEO Zach Seward buying the business news site from its current owner Uzabase.
In his post announcing the deal, Seward described the move as a management buyout that will also see Editor in Chief Katherine Bell and the rest of the Quartz staff taking equity in the new company.
“Most of the time, I hope, Quartz’s finances and our corporate parentage are irrelevant, as long as we’re doing our job well,” he wrote. “But this is an important moment in the life of our company, and we want to share it with all of you, whose readership and enthusiasm for Quartz have carried us successfully through the past eight years.”
Seward suggested that while Uzabase’s ownership was “helpful,” the company is “better off right now as a startup, freer to chart our own path.” And as a startup, it’s looking to raise outside funding.
The Wall Street Journal, which broke the news that Uzabase wanted to sell the property, also reported that Uzabase CEO Yusuke Umeda (pictured above) has made a personal loan to support the site.
Quartz was founded in 2012 by Atlantic Media, then acquired by Uzabase (a Japanese financial data and media company) for $86 million in 2018.
The company has struggled to make the business side work in recent years, reporting a loss of $18.4 million on revenue of $26.4 million in 2019, and cutting about 80 staff positions earlier this year.
In an assessment of the site’s troubles published in June, Digiday’s Steven Perlberg noted Quartz has been restructuring around its subscription business, but he suggested that it’s been caught in digital media’s “mushy middle”: “Not quite niche enough to be essential to a small group of readers, but not quite big enough to compete at scale.”
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Riverside.fm launches its video podcasting platform
Riverside.fm is a new startup with an easy-to-use platform for recording professional-quality video podcasts.
In fact, although the company only recently came out of stealth, it already has a number of high-profile customers, including TechCrunch’s parent company (Verizon Media) and Hillary Clinton, who’s using Riverside.fm to record her new podcast “You and Me Both with Hillary Clinton.”
“Just imagine, we needed a recording platform that could help us make a podcast during a pandemic, and, boy, did they step up,” Clinton said in a statement.
The startup was founded by brothers Nadav and Gideon Keyson — Nadav, who serves as CEO (Gideon is CTO), explained that they first created a platform where politicians could participate in video debates, but then realized there was a more promising business model for a broader podcasting tool.
In addition to officially launching, Riverside.fm is announcing that it has raised $2.5 million in seed funding led by Oren Zeev .
Gideon gave me a quick demo of the platform, showing me that it’s a fairly straightforward recording experience — the host just shares a link with the guests, no software installation necessary. There are plenty of other browser-based podcasting tools (for example, Zencastr recently expanded beyond audio with video support), but the Keysons suggested that they’ve spent a lot of time solving common technical issues for podcasters.
For one thing, each participants’ audio and video is recorded as a separate track on their device, so that a bad internet connection won’t affect recording quality. The recording is uploaded during the session, so you don’t have to have a long wait for files to upload. And there are automatic backups, in case someone’s browser or computer freezes.
“Stability … is so important,” Nadav said. “[Otherwise,] you could spend half a year to get a certain guest and then you lose their recording.”
Despite its simplicity, Riverside.fm supports 4K video and uncompressed WAV audio. It also includes an interface where podcast producers can monitor each guest’s equipment and adjust audio levels.
“We do really make it easy for the beginner and faster for the professionals,” Nadav said.
Gideon added that Riverside.fm isn’t interested in getting involved in the podcast distribution, but instead focuses on being a reliable production platform, as well as providing cross-platform analytics.
“We don’t want to start competing with Spotify and YouTube,” he said — in fact, Spotify is already a Riverside.fm customer.
The brothers also suggested that even if you’re not interested in creating a full-fledged video podcast, Riverside.fm is still the right choice for recording audio. Plus, you could still use the video recordings to create promotional clips for YouTube and social media.
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Equity Monday: Vaccine news scrambles the stock market, shakes up startups
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 big news, chats 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 — and don’t forget to check out last Friday’s episode that we wound up titling “Fortnite is actually a SaaS company.”
It makes sense in context, I promise.
Anyway, here’s what’s on today’s show:
- Joe Biden was elected president and the stock market is not mad about divided government.
- Positive vaccine news sent many stocks sharply higher this morning, but not all. Some pandemic-favored tech companies instantly dropped double-digit percentage points of value.
- Esign raised $151 million, showing strength in the Chinese startup market, and the e-signature space.
- And this neat Series B for Cellwize caught our attention this morning.
- Finally, a warning. The stuff that is changing lately may begin to change a bit less. We’ve lived in the pandemic economy long enough now that it’s hard to recall what life was like before. But, we’d best start remembering, as there’s a lot that is going to change in the next few quarters.
This has been a wild day to start the week, but with good news.
I suppose a vaccine was always going to eventually make it to this step, but, that said, the United States is seeing record COVID-19 cases today. So mask up and let’s get as many of us across the line as we can.
Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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Qumulo update adds NvME caching for more efficient use of flash storage
Qumulo, the Seattle-based data storage startup, announced a bunch of updates today, including support for NvME caching, an approach that should enable customers to access faster flash storage at a lower price point.
NvME flash storage development is evolving quickly, driving down the price with higher performance, a win-win situation for large data producers, but it’s still more expensive than traditional drives. Qumulo CEO Bill Richter pointed out that the software still has to take advantage of these changing flash storage dynamics.
To that end, the company claims with its new NvME caching capability, it is giving customers the ability to access faster flash storage for the same price as spinning disks by optimizing the software to more intelligently manage data on its platform and take advantage of the higher performance storage.
The company is also announcing the ability to dynamically scale using the latest technologies such as chips, memory and storage in an automated way. Further, it’s providing automated data encryption at no additional charge, and new instant updates, which it says can be implemented without any downtime. Finally, it has introduced a new interface to make it easier for customers to move their data from on premises data storage to Amazon S3.
Richter says that the company’s mission has always been about creating, managing and consuming massive amounts of file-based data. As the pandemic has taken hold, more companies are moving their data and applications to the cloud.
“The major secular trends that underpin Qumulo’s mission — the massive amount of file-based content, and the use of cloud computing to solve the content challenge, have both accelerated during the pandemic and we have received really clear signs of that,” he said.
Qumulo was founded in 2012 and has raised $351 million. Its most recent raise was a hefty $125 million last July on a valuation over $1.2 billion.
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Here comes the next IPO wave
This is The TechCrunch Exchange, a newsletter that goes out on Saturdays, based on the column of the same name. You can sign up for the email here.
Are you tired? I am. What a week. But, if you kept your eyes off American politics and instead focused on the stock market, this was not a week of stress at all. It was a celebration.
Yes, the election appears to be influencing stocks, with investors delighted at what could be a divided government. Their bet is that with different parties in control of different bits of the government, nothing will happen, and thus taxes and regulation won’t change. You can handicap that as you wish.
Regardless, this week’s stock market boom was a multifaceted affair. Software stocks rallied as the summer-era trade appeared to come back into vogue, in which investors pour capital into SaaS and cloud companies in hopes of parking their wealth into something with growth potential. Software earnings also look pretty good thus far (we chatted with JFrog and Ping Identity and BigCommerce), improving on their early performance.
Uber and Lyft drove their own rally as California voters decided that their long-standing labor arbitrage would stand. And then Uber failed to vomit on itself during its earnings report. Not bad.
Big tech stocks rose, as well. All this is to say that after some fear in the market a week ago, things are back to being heated for tech companies. And it is, as we expected, flushing out the next wave of IPOs.
Airbnb is expected to file publicly early next week (we have four questions here that we cannot wait to get answered), and Upstart actually filed this week, which you probably missed because you were watching something else. No worries. We are here for you.
Another notable possible include DoorDash, now unshackled from its expensive California regulatory battle. How many debuts shall we see? Hopefully many.
Market Notes
Upstart’s IPO filing brings a fintech IPO to the fore, and overall its numbers are pretty good if you discount worries about its customer concentration. Its debut could augur well for fintech as a whole, a segment of the startup population that, when viewed through the lens of PayPal’s earnings, is having a hell of a year.
Fintech VCs are active, as well, dropping over $10 billion into startups focusing on financial technology products and services in Q3. Payments, insurtech, wealth management and banking startups caught our eye as sectors to watch in that niche.
It was not a perfect week for fintech, however, as the U.S. government decided that the Visa-Plaid deal should not happen. Damn. As discussed on Equity, this deal could limit M&A interest for fintech startups from large players. Does that mean that fintech IPOs, then, have to carry the liquidity bucket for the sector?
Maybe! And if so, Upstart’s impending flotation seems to take on extra importance. We’ll keep you posted.
- Moving along, the Ant Group IPO termination by the Chinese government was probably the biggest tech story of the week, though as the company is worth a few hundred billion, it’s not really a startup event. For China, it’s a bad day, as it undercuts its goal of becoming a global financial center. For Ant, it’s a huge setback. For Jack Ma, it’s a warning, if not more.
- The nine-figure neobank rounds? Not done yet.
- Pony’s epic raise this week makes the point that self-driving tech is not dead. Indeed, the great race to let computers drive continues. Just more slowly than everyone had hoped.
- Udacity underscored the edtech boom by raising $75 million in debt and reported “Q3 bookings up by 120% year-over-year and average run rates up 260% in H1 2020.” Our own Natasha Mascarenhas also reported on booming edtech M&A volume, again highlighting that edtech has gone from zero to hero in 2020, at least from a VC perspective.
- $30 million for Hustle Fund, and €66.5M for All Iron Ventures, among other VC raises this week.
- ByteDance is looking for $2 billion at a valuation of $180 billion? Also, what happened to the whole TikTok fiasco?
- And TikTok’s rival’s IPO filing really shows how hard it is to build a similar network. It’s also very expensive.
Various and Sundry
Sticking under our target word count for the first time in so long I nearly forgot what it is, here are a few iotas and crumbs for your weekend:
- The volcano method for understanding the fintech revolution
- How Fortnite plans to get back onto iOS
- VCs dropping Form D filings on Election Day did not prevent us from finding them
- Some good news and some great news
Have a good weekend. Stay safe. Fight COVID-19. And listen to this.
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The gig economy, cannabis and car data are tech-election winners in 2020
Editor’s note: Get this free weekly recap of TechCrunch news that any startup can use by email every Saturday morning (7 a.m. PT). Subscribe here.
The US is settling in for some new form of national gridlock, but state and local propositions are busy defining how technology businesses will be allowed to work (legally) in the US. Policies on topics as broad as customer usage and employment or as narrow as a drug chemical got the vote across the country. The results provide a blueprint for what you might expect to see in many more places.
Perhaps the best example is Proposition 22 in California, where a majority of the voters approved of new rules that allow companies like Uber and Lyft to continue operating with drivers as independent contractors. A previous piece of state legislation and related lawsuit would have required the companies to classify many drivers as full-time employees. Here’s Megan Rose Dickey, on the impact of the result:
Throughout the case, Uber and Lyft have argued that reclassifying their drivers as employees would cause irreparable harm to the companies. In the ruling last month, the judge said neither company would suffer any “grave or irreparable harm by being prohibited from violating the law” and that their respective financial burdens “do not rise to the level of irreparable harm.”
But now that Prop 22 is projected to pass, this lawsuit has far less legal ground to stand on. It’s also worth noting that Uber has previously said it may pursue similar legislation in other states.
Naturally, the affected companies got a boost to their stock prices after the vote was called, and Uber is already working on taking the campaign global.
The US presidential election of 2020 has been the most technologically sophisticated ever, but I’m gonna skip because there are relatively few startup angles for us here. However, if you are trying to craft user policies about politics, consider this election-eve analysis from Taylor Hatmaker about how Facebook and Twitter have changed their approaches since 2016.
Other notable startup-y items from our election coverage:
Cannabis legalization measures set to pass in 5 states
Portland, Maine passes referendum banning facial surveillance
Calm’s hilarious CNN ad campaign sent the meditation app flying up App Store charts
YC-backed nonprofit VotingWorks wants to rebuild trust in election systems through open source
Something else happened in government this week that was not about the election — but may still be relevant to your startup. The SEC will now let companies raise up to $5 million per year in equity crowdfunding, up from a previous rule of $1.07 million. Lucas Matney has more for Extra Crunch.
The next billion-dollar e-commerce company will be a B2B marketplace
Business-to-business transactions are full of complexities beyond the consumer space, including four types of standard payment methods, sophisticated financing tools, bulk discounts, contractual pricing, delivery schedules, insurance and compliance. Merritt Hummer of Bain Capital Ventures breaks it down in a big guest post for Extra Crunch:
[I]t’s no wonder B2B e-commerce has been slower to digitize than B2C. From product discovery through the checkout process, a consumer buying a bag of licorice looks nothing like a retailer buying 100,000 bags of licorice from a distributor. The good news for B2B marketplace founders is that, based on the parameters above, there are many creative ways to extract value from transactions that go beyond the GMV take rate. Let’s explore some of the creative ways to monetize a B2B marketplace.
Instead of trying to take a cut of the gross merchandise value, like what Apple does with the App Store, successful startups have to be creative. These can include data monetization, embedded financial services, targeted advertising, private-label products, subscription fees and sampling fees. Here’s an excerpt from Hummer about that last one:
In most B2B verticals, individual transactions are so large that charging fees on a percentage basis means scaring potential customers away. In high-value markets with infrequent orders, charging a take rate on purchase orders will be perceived as unfair, especially when suppliers and buyers know each other already. But the fee-per-sample model is a unique wedge to aggregate suppliers and buyers, who often sample supplies before placing large orders.
One of our portfolio companies, Material Bank, has used this monetization strategy with success. Material Bank is a B2B marketplace for construction and interior design materials that warehouses samples (fabric swatches, paint chips, flooring materials, wall coverings, etc.) from hundreds of brands. Architects and interior designers can order free samples from Material Bank and receive them the next morning, and then ship samples back for free when they’re no longer needed. Material Bank charges the manufacturers a fee every time one of their samples is shipped out. Manufacturers receive new customer leads that require no effort to generate and are happy to outsource sample fulfillment, which was historically a cost center and not a core competency. Other B2B markets where sampling is well-established include chemicals, apparel and packaging materials.
How to start a VC fund without being rich already
Barriers to venture investing have been falling in recent years, as money has flowed into the asset class and as the opportunities for tech continue to grow. It is actually quite possible to raise your own fund if you don’t have much wealth to leverage — you’ll still have many things to figure out, though. Connie Loizos talks to limited partners and VCs who have been taking creative approaches for TechCrunch this week:
First, find investors, i.e. limited partners, who are willing to take less than 2% or 3% and maybe even less than 1% of the overall fund size being targeted. You’ll likely find fewer investors as that “commit” shrinks. But for example Joanna Rupp, who runs the $1.1 billion private equity portfolio for the University of Chicago’s endowment, suggests that both she and other managers she knows are willing to be flexible based on the “specific situation of the GP.”
Says Rupp, “I think there are industry ‘norms,’ but we haven’t required a [general partner] commitment from younger GPs when we have felt that they don’t have the financial means.”
Bob Raynard, founder of the fund administration firm Standish Management, echoes the sentiment, saying that a smaller general partner commitment in exchange for special investor economics is also fairly common. “You might see a reduced management fee for the LP for helping them or reduced carry or both, and that has been done for years.”
Explore management fee offsets. Use your existing portfolio companies as collateral. Make a deal with wealthier friends if you can. Get a bank loan. Consider the merits of so-called front loading.
She goes on to explain a number of tips including:
-
Explore management fee offsets.
-
Use your existing portfolio companies as collateral.
-
Make a deal with wealthier friends if you can.
-
Get a bank loan.
-
Consider the merits of so-called front loading.
Yegor Aleyev/TASS (Photo by Yegor AleyevTASS via Getty Images)
Edtech startup M&A grows with the pandemic boom
Natasha Mascarenhas takes a look at the motivations behind recent acquisitions in the space for Extra Crunch this week, as edtech has gone from supplemental to vital during the pandemic. Here’s more detail about the Course Hero acquisition of Symbolab from the other week.
Symbolab is a math calculator that is set to answer over 1 billion questions this year. With each answer, Symbolab adds information to its algorithm regarding students’ most common pain points and confusion. Course Hero, in contrast, is a broader service that focuses on Q&A from a variety of subjects. CEO Andrew Grauer says Symbolab’s algorithm isn’t something that Course Hero, which has been operating since 2006, can drum up overnight. That’s precisely why he “decided to buy, instead of build… It made a lot of sense to move fast enough so it wouldn’t take up multiple years to get this technology.”
Around TechCrunch
Learn how to score your first check with TMV’s Soraya Darabi on November 10
Just one week left for early-bird passes to TC Sessions: Space 2020
Relativity Space’s Tim Ellis is coming to TC Sessions: Space 2020
Across the week
TechCrunch:
China postpones Ant’s colossal IPO after closed-door talk with Jack Ma
Study shows cities with ride-hailing services report lower rates of sexual assault
Mixtape podcast: Wellness in the time of the struggle
Why Florida residents may soon be seeing jet-powered ‘flying taxis’
UK report spotlights the huge investment gap facing diverse founders
Extra Crunch:
3 tips for SaaS founders hoping to join the $1 million ARR club
Inside fintech startup Upstart’s IPO filing
4 takeaways from fintech VC in Q3 2020
Is fintech’s Series A market hot, or just overhyped?
Implementing a data-driven approach to guarantee fair, equitable and transparent employee pay
#EquityPod: Fortnite is actually a SaaS company
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.
What a week from us here in the United States, where the election is still being tabulated and precisely zero people are stressed at all. But, no matter what, the wheels of Equity spin on, so Danny and Natasha and Alex and Chris got together once again to chat all things startups and venture capital:
- Up top there was breaking news aplenty, including a suit from the U.S. government to try to block the huge Plaid-Visa deal. And, it was reported that Airbnb will drop its public S-1 filing early next week. That IPO is a go.
- Next we turned to the gaming world, riffing off of this piece digging into the venture mechanics of making and selling video games. Our hosting crew had a few differences of opinion, but were able to agree that Doom 3 was a masterpiece before moving on.
- Then it was time to talk Ant, and what the hell happened to its IPO. Luckily with Danny on deck we were in good hands. What a mess.
- Prop 22 was passed, which effectively allows Uber, Instacart and Lyft to keep their gig workers labeled as independent contractors, instead of employees. As a result, Uber and Lyft stocks soared, while gig worker collectives said that the fight is still on.
- Natasha scooped a series of Election Day filings from venture capital firms. In the mix: Precursor Ventures Fund III, Hustle Fund II and Insight Partner’s first Opportunity Fund.
- And finally, despite Election Day turning into an entire week, the public markets are rallying. Will we see a boom of IPOs?
- And, as a special treat, we didn’t even mention Maricopa County for the entire episode. Take care all!
Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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Extra Crunch roundup: B2B marketplaces, edtech M&A, breaking into the $1M ARR club
I’ve worked at TechCrunch for a little over a year, but this was one of the hardest weeks on the job so far.
Like many people, I’ve been distracted in recent days. As I write this, I have one eye on my keyboard and another on a TV that sporadically broadcasts election results from battleground states. Despite the background noise, I’m completely impressed with the TechCrunch staff; it takes a great deal of focus and energy to set aside the world’s top news story and concentrate on the work at hand.
Monday feels like a distant memory, so here’s an overview of top Extra Crunch stories from the last five days. These articles are only available to members, but you can use discount code ECFriday to save 20% off a one or two-year subscription. Details here.
B2B marketplaces will be the next billion-dollar e-commerce startups
Marketplaces created for B2B activity are surging in popularity. According to one report, transactions in these venues generated around $680 billion in 2018, but that figure is predicted to reach $3.6 trillion by 2024.
The COVID-19 pandemic is helping startups that innovate in areas like payments, financing, insurance and compliance.
Even so, according to Merritt Hummer, a partner at Bain Capital Ventures, “B2B marketplaces cannot simply remain stagnant, serving as simple transactional platforms.”
The startups that are first to market with innovative “adjacent services will emerge as winners in the next few years,” she advises.
Software companies are reporting a pretty good third quarter
For this morning’s edition of The Exchange, Alex Wilhelm interviewed three executives at cloud and SaaS companies to find out how well Q3 2020 has been treating them:
- Ping CFO Raj Dani
- JFrog CEO Shlomi Ben Haim
- BigCommerce CEO Brent Bellm
As one Twitter commenter noted, Alex doesn’t just talk to the best-known tech execs; he reaches out to a wide range of people, and it shows in the quality of his reporting.
Will new SEC equity crowdfunding rules encourage more founders to pass the hat?
New Regulation Crowdfunding guidelines the SEC released this week allow companies to directly raise up to $5 million each year from individual investors, an increase from the previous limit of $1.07 million.
“Life has gotten easier in other ways as well for founders pursuing this fundraising type and the platforms that seek to simplify it,” reports Lucas Matney, who interviewed Wefunder CEO Nicholas Tommarello.
Funding for seed-stage startups slumped 32% last quarter compared to 2019, so “the tide could be turning” for founders who were reluctant to raise from a giant pool of small dollars, Lucas found.
3 tips for SaaS founders hoping to join the $1 million ARR club
Reaching scale is paramount for software companies, so growth is a top priority.
In a guest post for Extra Crunch, Drift CEO David Cancel explains that too many SaaS and cloud companies waste time trying out a number of solutions before finding the right recipe.
“I can tell you that there absolutely is a repeatable process to building a successful SaaS business,” he says, “one that can reliably guide you to product-market fit and then help you quickly scale.”
Implementing a data-driven approach to guarantee fair, equitable and transparent employee pay
Companies that hope to eliminate longstanding inequities in the workplace can’t just rely on doing what they think is right. Without a data-driven approach, subjective judgments and implicit bias tend to negate good intentions.
Many startups don’t hire full-time HR managers until they’ve reached scale, but this comprehensive post lays out several critical factors for creating — and maintaining — a fair pay model.
4 questions as Airbnb’s IPO looms
News broke this week that Airbnb plans to to raise approximately $3 billion in a public filing that would allow it to reach a valuation in the $30 billion range.
Our expert unicorn wrangler Alex Wilhelm says curious investors should ask themselves the following:
- Will Airbnb be able to show a near-term path to profitability?
- How high-quality is Airbnb’s revenue after the pandemic?
- Is there anything lurking in its recent financings that public investors won’t like?
- Will Airbnb be able to show year-over-year revenue gains?
Starling Bank founder Anne Boden says new book ‘isn’t a memoir’
“People at the end of their career write memoirs,” Starling Bank founder Anne Boden told TechCrunch’s Steve O’Hear. “I’m at the beginning.”
In Boden’s new book, “Banking On It,” she shares the story of how (and why) she decided to found a challenger bank, eventually parting with colleagues who launched competitor Monzo.
“This is really putting down on paper where we are at the moment,” she said. “It’s been written over several years, and I’m hoping to use this to inspire a generation of entrepreneurs.”
Pandemic’s impact disproportionately reduced VC funding for female founders
Natasha Mascarenhas and Alex Wilhelm collaborated on Monday’s edition of The Exchange to report on how investors became less likely to fund female founders since the beginning of the COVID-19 pandemic.
Drawing on data from multiple sources, Alex and Natasha found that startups led by women and mixed-gender founding teams received 48% less VC funding in Q3 2020 than in Q2, even though overall funding bounced back.
“From fear in late Q1, to a middling Q2, to a boom in Q3,” they wrote. “It was an impressive comeback. For some.”
Booming edtech M&A activity brings consolidation to a fragmented sector
Natasha Mascarenhas has owned TechCrunch’s edtech beat since she came aboard at the start of 2020, just a few months before the pandemic led to widespread school closures.
She’s reported on countless funding rounds and interviewed founders and investors who are active in the space, but she recently spotted a new trend: “M&A activity is buzzier than usual.”
4 takeaways from fintech VC in Q3 2020
Alex Wilhelm shrugged off his Election Day distractions long enough to write a column that comprehensively examined fintech investment activity over the last quarter.
In Q3 2020, “60% of all capital raised by financial technology startups came from just 25 rounds worth $100 million or more,” he reports.
Are these mega-rounds funding “the next crop of unicorns?” It’s too early to say, but it’s clear that pandemic-fueled uncertainty is driving consumers into the arms of companies like Robinhood, Chime, Lemonade and Root.
In 1,316 words, Alex captures the state of play in insurtech, banking, wealth management and payments investing: “Now, we just want to see some ******* IPOs.”
New GV partner Terri Burns has a simple investment thesis: Gen Z
Five years ago, Terri Burns was a product manager at Twitter. Today, she’s the first Black woman — and the youngest person — to be promoted to partner at Google Ventures.
In a Q&A with Natasha Mascarenhas, Burns talked about her plans for the new role, as well as her investment thesis.
“I don’t know what it actually means to build a sustainable business and venture is a really great way to sort of learn that,” said Burns.
GV General Partner MG Siegler talks portfolio management and fundraising 6 months into the COVID-19 pandemic
Are founders and investors really leaving Silicon Valley for greener pastures? Now that investors are limited to virtual interactions, are they being more hands-on with their portfolio companies?
In an Extra Crunch Live chat hosted by Darrell Etherington, GV General Partner MG Siegler talked about how the pandemic is — and is not — shaping the way he does business.
“I do feel like things are operating in a pretty streamlined manner, or as much as they can be at this point,” he said.
“But, you know, there’s always going to be some more wildcards — like we’re a week away, today, from the U.S. election.”
Thank you very much for reading Extra Crunch; I hope you have a great weekend.
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