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This startup wants to fix the broken structure of internships
Internships are an opportunity for students to experiment with new career paths and land a full-time offer ahead of graduation. For companies, the weeks-long programs help recruit and train job-ready hires.
While the stakes are high, the coronavirus-spurred office closures and market volatility made a number of tech companies slim down or cancel their internship programs. Similar to remote schooling, the startups that kept their programs had a huge hurdle to face: How do you teach and train students across the world about your company?
That’s where Symba, a Techstars alum, comes in. The 12-person startup created a white-label software tool to help companies, including Robinhood and Genentech, create an online space to communicate and collaborate with their now-distributed interns.
“Every year, organizations are reinventing the wheel and starting their internship program from scratch,” Ahva Sadeghi, CEO of Symba, said. “It’s like, you’re spending so much money, this is a core part of your recruitment, but you’re not invested in an infrastructure to make sure it’s sustainable.”
Symba sells a plug-and-play workspace for both interns and managers. Interns sign into Symba through a branded landing page and are brought into a workspace. They can then toggle between feedback, community, profiles and projects. There’s also an entire area for onboarding tutorials and company history.
Interns are brought to a workspace upon login. Image via Symba.
Sadeghi is joined by co-founder and CTO Nikita Gupta, who built the entire site from scratch.
Symba was built with a big focus on creating channels for feedback between interns and managers. There is a tab dedicated solely to feedback, where managers can consistently rank their direct reports on a five-star rating scale across various skills. Interns are also able to request feedback.
Each user is invited to create a profile so other interns can reach out and learn about their cohort. While Symba wants to be where interns live during their internship, there’s no direct messaging mechanisms within the web-based platform. Instead, Symba has embedded a Slack integration for users who want to talk directly.
The community board allows interns to meet other interns and chat. Image via Symba.
Managers, on the other hand, are able to log in, assign tasks and check on progress for their direct reports. Feedback is also tracked during the entirety of the internship, to help see who has made progress and deserves a potential return offer.
Because interns come in for only eight to 12 weeks, she says the traditional internship onboarding process — which includes bringing them all onto a company’s full-time tech stack — could create chaos for the organization. Symba wants to be a low-lift alternative.
Sadeghi says that customers have been attracted to the alumni features in their platform, which allow managers to engage interns after the program is complete. The applicant-tracking system works to keep potential hires in the fold of the company.
So far, Symba is optimistic that the tool is working. Users log into the product an average of six to nine times per day, and there have been more than 15,000 intern-projects created on Symba.
The company declined to disclose revenue, citing the stage of its business, but said that it charges companies $30 to $50 per user per month for the product. The average size of a Symba cohort is 80, but they have had customers who bring more than 2,000 interns onto the product. It only works with companies who pay their interns.
A hurdle of Symba will be the seasonality of its revenue. Because most internships are in the summer, Symba will likely find most growth opportunities during that three-month period.
Symba’s early growth is directly related to the pandemic, as the fear of the virus closed offices, and, in turn, shuttered internship programs. Symba’s success will hinge on if the team can convince companies that an online workspace for interns is a necessary product even when offices reopen.
Beyond translating into a post-pandemic world, Symba wants to be a solution for clients such as bootcamps, accelerators or fellowships. If it’s able to land year-round clients, it will be able to balance the seasonality of its current revenue of summer internships.
The success so far is promising: Early momentum has helped Symba raise $750,000 from a number of investors, including 1517 Fund, January Ventures and Hustle Fund.
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What would Databricks be worth in a 2021 IPO?
TechCrunch recently covered Databricks’ financial performance in 2020, contrasting its recent performance to some historical 2019 data that the company shared.
The data-and-analysis-focused unicorn grew its annual run rate 75% to $350 million, compared to its year-ago quarter, meaning that the firm is growing well at scale. TechCrunch described it as “an obvious IPO candidate” at the time, a little under two weeks ago.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
Since that point, Bloomberg reported that Databricks is indeed charging ahead with an IPO, a transaction that could come as soon as the first half of 2021, writing that it “has held talks with banks but has yet to hire underwriters” for its flotation.
That is enough news for us to have fun with. So, this morning let’s collate all that we know about the company’s financial performance, mix in some current market valuation metrics, and do some light projecting of Databricks’ growth. Our question? What might the company be worth at the end of Q1 or Q2 next year.
Of course, there are some worrying signs on the horizon that the stock market is about to shift lower, but, hey, there’s no need to be a pessimist this early on a Monday morning. Let’s get into the math.
Databricks’ potential IPO valuations
Starting with some history, Databricks was worth $6.2 billion after its September, 2019 Series F round of capital. The company raised $400 million in the transaction, its largest round to-date by $150 million. That capital should get the company to an H1 2020 IPO, provided that its spending didn’t go all old-school Dropbox.
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Ant Group could raise as much as $34.5B in IPO in what would be world’s largest IPO
The long-anticipated IPO of Alibaba-affiliated Chinese fintech giant Ant Group could raise tens of billions of dollars in a dual-listing on both the Shanghai and Hong Kong exchanges.
Shares for the company formerly known as Ant Financial are expected to price at around HK$80, or roughly 68 to 69 Chinese Yuan. The company is selling around 134 million shares in the Hong Kong portion of its debut, worth around $17.25 billion American dollars at HK$80 apiece.
Given that the share sale is expected to raise a similar amount of money from its Shanghai listing, the company’s IPO could raise as much as $34.5 billion. That tally would make the debut the largest in history, besting the recent Aramco IPO that raised around $29.4 billion.
Alibaba owns a 33% stake in Ant Group. At its currently expected share price, Ant Group would be worth as much as $310 billion, according to The New York Times, or $313 billion per CNBC.
Ant Group’s huge IPO fits its own epic scale. As TechCrunch reported in July, Ant had around 1.3 billion annual active users in March of this year, a number that could have risen in recent quarters. Ant’s Alipay competes with Tencent’s WeChat Pay in the huge and lucrative Chinese market.
The Ant Group IPO could be viewed as a moment in which the United States stock markets showed weakness. When Alibaba went public back in 2014, it did so via the New York Stock Exchange. The Chinese tech giant later dual-listed on the Hong Kong exchange. To see Ant Group dual-list on the Hong Kong and Shanghai indices without a float in New York shows what is possible outside of the United States when it comes to capital financing.
Fintech startups have broadly seen their fortunes rise during 2020 as the global pandemic changed consumer behavior and moved more commerce and payments into the digital realm. And IPOs have generally performed strongly as well, meaning that Ant Group could find a few tailwinds for its equity when it begins to trade.
Ant has not been content to stick to its knitting, keeping itself busy by investing in other startups. The company took a small stake in installment-payment service Klarna earlier this year, for example.
At a valuation of more than $310 billion, Ant Group would be worth about as much as JPMorgan Chase, the most valuable American bank today. It would also best U.S.-based digital payments leader PayPal, which is currently valued at $236 billion, as well as Square, which is valued at $77 billion.
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Equity Monday: SAP’s warning, and IPO updates for both Airbnb and Databricks
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 includes some high-quality Quibi jokes, if I recall correctly.
This was a busy morning, with lots to talk about it. Here’s what we got into:
- Headlines this morning that caught our eye included falling global stock markets in the wake of rising COVID-19 cases; SAP torched tens of billions of market cap by missing earnings expectations and cutting its forecast; and Ant Group will raise a bajillion dollars in its impending IPO.
- In unicorn news, Databricks is prepping an IPO that we already know a lot about. And Airbnb’s shares are splitting ahead of its own IPO, a deal that we are expecting any day now.
- The PrimaryBid round was super cool, with TechCrunch covering the $50 million deal. I spoke with the company’s CEO last week about the deal, sharing some of those notes on the show. And VSPN raised nearly $100 million in an esports round that was more than cool.
- On the SAP front, here’s the question: Is the earnings miss and forecast miss a one-off, or something that a number of tech companies are going to suffer from? If the former, it’s not that big of a deal. If the latter, SAP could be the harbinger of a reset in tech valuations.
Shout-out to Lewis Hamilton and that G2 series. OK, chat Thursday!
Equity drops every Monday at 7:00 a.m. PT 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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Linktree raises $10.7M for its lightweight, link-centric user profiles
Simple, link-centric user profiles might not sound like a particularly ambitious idea, but it’s been more than big enough for Linktree.
The Melbourne startup says that 8 million users — whether they’re celebrities like Selena Gomez and Dua Lipa or brands like HBO and Red Bull — have created profiles on the platform, with those profiles receiving more than 1 billion visitors in September.
Plus, there are more than 28,000 new users signing up every month.
“This category didn’t exist when we started,” CEO Alex Zaccaria told me. “We created this category.”
Zaccaria said that he and his co-founders Anthony Zaccaria and Nick Humphreys created Linktree to solve a problem they were facing at their digital marketing agency Bolster. Instagram doesn’t allow users to include links in posts — all you get is a single link in your profile, prompting the constant “link in bio” reminder when someone wants to promote something.
Meanwhile, most of Bolster’s clients come from music and entertainment, where a single link can’t support what Zaccaria said is a “quite fragmented” business model. After all, an artist might want to point fans to their latest streaming album, upcoming concert dates, an online store for merchandise and more. A website could do the job in theory, but they can be clunky or slow on mobile, with users probably giving up before they finally reach the desired page.
Linktree founders Anthony Zaccaria, Alex Zaccaria and Nick Humphreys. Image via Linktree.
So instead of constantly swapping out links in Instagram and other social media profiles, a Linktree user includes one evergreen link to their Linktree profile, which they can update as necessary. Selena Gomez, for example, links to her latest songs and videos, but also her Rare Beauty cosmetics brand, her official store and articles about her nonprofit work.
Zaccaria said that after launching the product in 2016, the team quickly discovered that “a lot more people had the same problem,” leading them to fully separate Linktree and Bolster two years ago. Since then, the company hasn’t raised any outside funding — until now, with a $10.7 million Series A led by Insight Partners and AirTree Ventures. (Update: Strategic investors in the round include Twenty Minute VC’s Harry Stebbings, Patreon CTO Sam Yam and Culture Amp CTO Doug English.)
“We had the option to just continue to grow sustainably, but we wanted to pour some fuel on the fire,” Zaccaria said.
In fact, Linktree has already grown from 10 to 50 employees this year. And while the company started out by solving a problem for Instagram users, Zaccaria described it as evolving into a much broader platform that can “unify your entire digital ecosystem” and “democratize digital presence.” He said that while some customers continue to maintain “a giant, brand-immersive website,” for others, Linktree is completely replacing the idea of a standalone website.
Zaccaria added that Instagram only represents a small amount of Linktree’s current traffic, while nearly 25% of that traffic now comes from direct visitors.
Image Credits: Linktree
Black Lives Matter has also been a big part of Linktree’s recent growth, with activists and other users who want to support the movement using their profiles to point visitors to websites where they can donate, learn more and get involved. In fact, Linktree even introduced a Black Lives Matter banner over the summer that anyone could add to their profile.
Linktree is free to use, but you have to pay $6 a month for Pro features like video links, link thumbnails and social media icons.
Zaccaria said that the new funding will allow the startup to add more “functionality and analytics.” He’s particularly eager to grow the data science and analytics team, though he emphasized that Linktree does not collect personally identifiable information or monetize visitor data in any way — he just wants to provide more data to Linktree users.
In a statement, Insight Managing Director Jeff Lieberman said:
As the internet becomes increasingly fragmented, brands, publishers, and influencers need a solution to streamline their content sharing and connect their social media followers to their entire online ecosystem, ultimately increasing brand awareness and revenue. Linktree has successfully created this new “microsite” category enabling companies to monetize the next generation of the internet economy via a single interactive hub. The impressive traction and growing number of customers Linktree has gained over the last few months demonstrates its proven market fit, and we could not be more excited to work with the Linktree team as they transition to the ScaleUp phase of growth.
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Why you have to pay attention to the Indian startup scene
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.
Back in August during Y Combinator’s two-day demo extravaganza, TechCrunch noted a number of startups from India that stood out from the batch. Names like Bikayi (e-commerce tools), Decentro (consumer banking APIs), Farmako Healthcare (digital health records) and MedPiper Technologies (helping hire health professionals) joined our list of favorites from the batch.
Seeing so many India-focused startups in the mix wasn’t a fluke. Data shows that India’s venture capital scene has grown sharply in recent years. 2019 was the country’s biggest ever in terms of venture dollars invested, with Bain counting $10 billion during the year.
In 2020, the third quarter brought the country’s venture capital scene back to form. After a somewhat average start to the year, Indian startups saw their venture capital investment fall to just $1.5 billion in Q2, the lowest quarterly tally since 2016. But data via KPMG and PitchBook make it plain that Q3 was a rebound, with $3.6 billion invested into Indian startups during the three-month period.
That figure was not a historical record, mind; the Q3 total looks to be only the fourth-biggest VC quarter in India’s startup history since at least 2013 and, perhaps, ever. But it was a good bounce-back during a crippling pandemic all the same. The country’s VC deal count also rebounded a bit in the third quarter, with some of that money landing in big chunks, including a $500 million investment into Byju’s this September.
Smaller startups are also seeing strong results. Bikayi is one such startup. TechCrunch caught up with the company via email, digging into its post-Demo Day results. Its monthly recurring revenue (MRR) grew 60% in August from its July results, it said. And in late August the company told TechCrunch that it was on track to reach $1 million annual recurring revenue (ARR) by the end of the year.
Bikayi said more recently that it recorded 100% growth in the number of merchants it supports, and 100% revenue growth in September. So the WhatsApp-focused Shopify-for-India is racing ahead. October results, Bikayi CEO Sonakshi Nathani added, are looking “promising” as well.
To get a better handle on the Indian startup market more broadly, The Exchange got ahold of Accel investors Arun Mathew (based in the United States), and Prayank Swaroop (based in India), for a bit of digging.
Historically, falling bandwidth and smartphone costs along with improved Internet reliability helped lay the foundation for the recent Indian startup wave, according to Swaroop. Mathew added that some high-profile successes like Flipkart made startups a more attractive option, with the ecommerce company’s success helping to “change the tenor” of the conversation around founding tech firms in recent years.
It also helps, Swaroop added, that seasoned folks from existing Indian tech companies are branching out and starting companies of their own, recycling knowledge into new, smaller companies. This is a key method by which Silicon Valley has managed to create an outsized number of hits over time; a concentration of operators who have built big startups are key grist in the unicorn mill. And there’s more money being raised to help power new Indian tech companies.
All told, 2019 was a huge year for the Indian startup market in venture capital terms, and 2020’s recovery is underway. Let’s see what gets built.
Market Notes
The Exchange spent a lot of this week digging into venture capital data and trends, something that we love to do. If you need to catch up, here’s our look at the U.S. venture capital scene in Q3, and here are our notes on the more global picture. And we touched on India above. What more could there be?
Well, some data on healthcare-focused companies is just what we need. Per a new report from CB Insights, there are 41 healthcare-focused unicorns today. More importantly, startups focused on health-related matters (telemedicine, mental health, AI, etc.) just had a record quarter. Even for a pandemic, $21.8 billion went into the space across 1,539 global rounds in the third quarter. That’s far more activity than I would have guessed.
- Moving on, The Exchange compiled a look at how quickly a few dozen startups grew in Q3, which was very good fun.
- The Equity crew also covered a number of media-and-housing-related startup rounds here if that is your jam. There were also some jokes.
- Datto went public this week, giving the market a look at what slower, more profitable software companies are worth in revenue-multiple terms. The news was mostly good.
- On the insurtech beat, New Front announced that it has raised $100 million, most recently at a $500 million valuation. And we noted in our growth-rate piece that Next Insurance raised $250 million last month, which has missed our attention. Oh, and Chicago-based Clearcover has news out this week, which we care about given the impending Root Insurance IPO (notes on its valuation here). The two companies both insure drivers.
And with that, we’re cutting Market Notes short this week for some important TechCrunch news:
Hey y’all. It’s Megan Rose Dickey busting into Alex’s newsletter for a couple of quick news items. First, I officially launched my newsletter, Human Capital! It covers labor and diversity and inclusion in tech. Also, I relaunched the Mixtape podcast with my colleague Henry Pickavet. You can check out our first episode of Season 3 about California’s gig worker ballot measure Prop 22 here.
Megan is amazing and you should check out her pod and newsletter.
Various and Sundry
As always, there was more good stuff to share here than I can possibly fit, so let’s get right into the data, takes, links and other delicacies.
- Data collected on by a Midwest-focused group concerning its region makes the case for VCs to look more closely at the center of the United States. Why? It’s cheaper to build there, which, combined with lower startup prices, means investors get a bigger bang for their buck. And return multiples for VCs (MOICs, if you care) look strong in Chicago.
- Everyone is burned out.
- Netflix and Intel took stick after their earnings failed to excite investors, in what could be a small warning sign ahead of next week’s earnings-palooza.
- The SPAC boom is precisely as ludicrous as you imagined it to be.
- And while there are loads of late-stage money, first financings are worth an ever-smaller fraction of the VC pie.
- What are the youngest VCs in the world focused on? Well, according to a survey of Gen Z VCs, their top three focuses are the creator economy, edtech and social gaming.
- How Yext evolved on its path to going public, and beyond.
Wrapping, a survey from Salesforce shows that enterprise cloud CEOs are reporting better-than-anticipated revenue growth and lower-than-anticipated churn, when compared to their March estimates. That is probably why earnings haven’t been a disaster and so many unicorns were able to go public in Q3.
That and valuations in the public sphere are higher than what private investors are dishing up, inverting the market’s last few years.
See you Monday,
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Was Quibi the good kind of startup failure?
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.
Startup failure is easy to hold up as a type of martyrdom for progress, especially if the founders are starting out scrappy in the first place and trying to save the world. But heroic narrative gets complicated when the startup failure involves the biggest names in entertainment, dubious product decisions, and well over $1 billion in losses in an already very competitive consumer tech subcategory.
I was going to skip any mention of Quibi because, like me, you have heard more than enough already. But this week its shutdown announcement turned into a debate on Twitter about the nature of startup failure and whether this was still the right kind. Many in the startup world said it was still good, basically because most any ambitious startup effort leads to progress. Danny Crichton, in turn, argues that the negativity was fully justified in this case.
Let’s be honest: Most startups fail. Most ideas turn out wrong. Most entrepreneurs are never going to make it. That doesn’t mean no one should build a startup, or pursue their passions and dreams. When success happens, we like to talk about it, report on it and try to explain why it happens — because ultimately, more entrepreneurial success is good for all of us and helps to drive progress in our world.
But let’s also be clear that there are bad ideas, and then there are flagrantly bad ideas with billions in funding from smart people who otherwise should know better. Quibi wasn’t the spark of the proverbial college dropout with a passion for entertainment trying to invent a new format for mobile phones with ramen money from friends and family. Quibi was run by two of the most powerful and influential executives in the United States today, who raised more money for their project than other female founders have raised collectively this year.
Ouch. However, I think this still misses the bigger dynamic happening.
Quibi was so easy to criticize that it created an opportunity to plausibly defend for anyone who wants to show that they are here for the startups no matter how crazy. When you defend Quibi, you’re defending your own process, and making it clear to the next generation of startups that you’re personally not scared off from other people with crazy ideas and have the will to try even if the result is a big mess. Which is who founders want to hire in the early days, and who investors want to bet on.
I support both sides of this mass-signaling game. Analysts and journalists have provided a broad range of valuable insights about how Quibi was doing it wrong, that are no doubt being internalized by founders of all types. Meanwhile, Quibi defenders are no doubt sorting through their inbound admirers for great new deals. All in all, Quibi and the debate around it might ultimately make future companies a little better. Which is what we all wanted in the first place, right?
Image Credits: Larry Knupp (opens in a new window) / Shutterstock (opens in a new window)
Root Insurance plans pricing as Datto goes public
The IPO market has not shut down (yet) for election turmoil and whatnot. First up, managed service provider Datto went out on Wednesday and has inched up since then — a strong outcome for the company and its private equity owner, even if third parties did not benefit from an additional pop. A few more notes from Alex Wilhelm:
Datto’s CEO Tim Weller told TechCrunch in a call that the company will still be well-capitalized after the public offering, saying that it will have a very strong cash position.
The company should have places to deploy its remaining cash. In its S-1 filings, Datto highlighted a COVID-19 tailwind stemming from companies accelerating their digital transformation efforts. TechCrunch asked the company’s CEO whether there was an international component to that story, and whether digital transformation efforts are accelerating globally and not merely domestically. In a good omen for startups not based in the United States, the executive said that they were.
Next to market, Root Insurance released its stock pricing set this week, raising the goal to a valuation above $6 billion. It’s definitely on track to be Ohio’s biggest tech IPO to date. Here’s Alex again, with a comparison against Lemonade, another recently IPOed insurance tech provider for Extra Crunch:
[I]t appears that Root at around $6 billion is cheap compared to Lemonade’s pricing today. So, if you’d like to anticipate that Root raises its IPO price range to bring it closer to the multiples that Lemonade enjoys, feel free as you are probably not wrong. Are we saying that Root will double its valuation to match Lemonade’s current metrics? No. But closing the gap a bit? Sure.
For insurtech startups, even Root’s current pricing is strong. Recall that Root was worth $3.65 billion just last August. At $6.34 billion, the company has appreciated massively in just the last year and change. A small repricing could boost Root’s valuation differential to a flat 100% rather easily.
So, for MetroMile and ClearCover and the rest of the related players, do enjoy these good times as long as they last….
Image Credits: Dong Wenjie (opens in a new window) / Getty Images
AR/VR is coming (sooner than expected)
A year ago, the market looked quite young. But now, the pandemic has made the value of augmented and virtual reality clearer to the world. Lucas Matney, who has been covering the topic here for years, just conducted a survey of seven top investors in the space. While they mostly continue to see the vertical as a bit early, they see it getting relevant fast. Here’s one key response, from Brianne Kimmel of Work Life Ventures, on Extra Crunch:
Most investors I chat with seem to be long-term bullish on AR, but are reticent to invest in an explicitly AR-focused startup today. What do you want to see before you make a play here?
I think it all comes down to a unique insight and a competitive advantage when it comes to distribution. And so, I’ll use these new [Zoom] apps as an example, I think that they’re a great example where there are certain aspects of roles and certain highly specialized skills where teaching educating and doing your daily job on Zoom won’t actually cut it. I do foresee AR applications becoming an integral part of certain types of work. I also think that now that as a lot of the larger platforms such as Zoom are more open, people will start building on the platforms and there will be AR-specific use cases that can help industries where, you know, a traditional video conferencing experience doesn’t quite cut it.
Zurich startup scene loaded with talent
In other survey news, Mike Butcher continues his (sadly virtual) tour across European startup hubs for EC, this week checking in with investors in Zurich, Switzerland. Here’s a tidy explanation of the city and country’s deep technical experience, from Michael Blank of investiere:
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
Switzerland has always been at the forefront of technological innovation in areas such as precision engineering or life sciences. We strongly believe that Switzerland will also thrive in the long run in those areas. Thinking for example about additive manufacturing startups such as 9T Labs or Scrona, drone companies such as Verity or Wingtra or health tech startups such as Aktiia or Versantis.
Brussels investors, Mike is headed your way next. You can reach him here.
Around TechCrunch
Announcing the agenda for TC Sessions: Space 2020
Rocket Lab’s Peter Beck is coming to TC Sessions: Space 2020
Extra Crunch Partner Perk: Get 6 months free of Zendesk Support and Sales CRM
Across the week
TechCrunch
Equity Monday: Three neat venture rounds, and Alibaba’s latest
The smart speaker market is expected to grow 21% next year
Financial institutions can support COVID-19 crowdfunding campaigns
Ready Set Raise, an accelerator for women built by women, announces third class
Extra Crunch
Here’s how fast a few dozen startups grew in Q3 2020
Late-stage deals made Q3 2020 a standout VC quarter for US-based startups
Founders don’t need to be full-time to start raising venture capital
Three views on the future of media startups
Dear Sophie: What visa options exist for a grad co-founding a startup?
#EquityPod
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.
Myself, along with Danny and Natasha had a lot to get through, and more to say than expected. A big thanks to Chris for cutting the show down to size.
Now, what did we get to? Aside from a little of everything, we ran through:
- The fall of Quibi, and who lost money in the mix. TechCrunch has a bit more on the video service’s downfall here.
- The Netflix quarter, and why its shares lost ground after its report. The Quibi-Netflix stories show that it’s not smooth sailing in the market for online video.
- If Netflix stumbled, Snap soared with stronger-than-expected growth. The company still loses lots of money, but it’s getting closer to reasonable results, and has lots of cash.
- Then we turned to a few media startups that raised, including $4 million for Stir and $2.5 million for Quake. Quake the podcasting company, mind, not the excellent FPS.
- Next was a handful of housing rounds, including the very neat Abodu and the somewhat controversial RVshare, which split the three of us about whether or not it was going to work out.
- Then we had some great reporting from Natasha to parse through, including her piece on startup hacker houses, and her report on a new women-focused accelerator class.
Whew! It was a lot, but also very good fun. Look for clips on YouTube if you’d like, and we’ll chat you all next Monday.
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Boston startups expand region’s venture capital footprint
This year has shaken up venture capital, turning a hot early start to 2020 into a glacial period permeated with fear during the early days of COVID-19. That ice quickly melted as venture capitalists discovered that demand for software and other services that startups provide was accelerating, pushing many young tech companies back into growth mode, and investors back into the check-writing arena.
Boston has been an exemplar of the trend, with early pandemic caution dissolving into rapid-fire dealmaking as summer rolled into fall.
We collated new data that underscores the trend, showing that Boston’s third quarter looks very solid compared to its peer groups, and leads greater New England’s share of American venture capital higher during the three-month period.
For our October look at Boston and its startup scene, let’s get into the data and then understand how a new cohort of founders is cropping up among the city’s educational network.
A strong Q3, a strong 2020
Boston’s third quarter was strong, effectively matching the capital raised in New York City during the three-month period. As we head into the fourth quarter, it appears that the silver medal in American startup ecosystems is up for grabs based on what happens in Q4.
Boston could start 2021 as the number-two place to raise venture capital in the country. Or New York City could pip it at the finish line. Let’s check the numbers.
According to PitchBook data shared with TechCrunch, the metro Boston area raised $4.34 billion in venture capital during the third quarter. New York City and its metro area managed $4.45 billion during the same time period, an effective tie. Los Angeles and its own metro area managed just $3.90 billion.
In 2020 the numbers tilt in Boston’s favor, with the city and surrounding area collecting $12.83 billion in venture capital. New York City came in second through Q3, with $12.30 billion in venture capital. Los Angeles was a distant third at $8.66 billion for the year through Q3.
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Financial institutions can support COVID-19 crowdfunding campaigns
The economic impact of the COVID-19 pandemic adversely affected the financial outlook for millions of people, and continues to cause significant fiscal distress to millions more, but such challenging times have also wrought a more resilient and resourceful financial system.
With the ingenuity of crowdfunding, considered to be one of the last decade’s greatest “success stories,” and such desperate times calling for bold new ways to finance a wide variety of COVID-19 relief efforts, we are now seeing an excellent opportunity for banks and other financial institutions to partner with crowdfunding platforms and campaigns, bolstering their efforts and impact.
COVID-19 crowdfunding: A world of possibilities to help others
Before considering how financial institutions can assist with crowdfunding campaigns, we must first look at the diverse array of impressive results from this financing option during the pandemic. As people choose between paying the rent or buying groceries, and countless other despairing circumstances, we must look to some of the more inventive ways businesses, entrepreneurs and people in general are using crowdfunding to provide the COVID-19 relief that cash-strapped consumers with maxed-out or poor credit do not have access to or the government has not provided.
Some great examples of COVID-19 crowdfunding at its best include the following:
- Consider Woks for Washington, in which a pair of sisters set up a GoFundMe page to raise funds that contribute to paying local restaurants to provide meals for essential workers, the homeless, and others in need, inspired by World Central Kitchen’s own programs.
- Or look at Kingston Mines, the historic and famous blues club in Chicago, where a similar crowdfunding campaign literally kept the lights on and the hot water running.
- Then, of course, there is the most obvious COVID-19 relief solution out there: A more functional face mask (or a more fashionable face mask) to improve protection for everyone from contracting the coronavirus.
The possibilities presented by crowdfunding in this age of the coronavirus are endless, and financial institutions can certainly lend their assistance. Here is how.
1. Acknowledge that crowdfunding is not a trend
Crowdfunding is a substantial and ever-so relevant means of financing all sorts of businesses, people and products. Denying its substantive contribution to the economy, especially in digital finance during this pandemic, is akin to wearing a monocle when you actually need glasses for both of your eyes. Do not be shortsighted on this. Crowdfunding is here to stay. In fact, countless crowdfunding businesses and platforms continue to make major moves within the markets globally. For example, Parpera from Australia, in coordination with the equity-crowdfunding platforms, hopes to rival the likes of GoFundMe, Kickstarter and Indiegogo.
2. Be willing to invest in crowdfunded campaigns
This might seem contrary to the original purpose of these campaigns, but the right amount of seed-cash infusions to campaigns that are aligned with your goals as a company is a win-win for both you and the entrepreneurs or causes, especially now in such desperate times of need.
3. Get involved in the community and its crowdfunding efforts
This means that small businesses and medium-sized businesses within your institution’s community could use your help. Consider investing in crowdfunding campaigns similar to the ones mentioned earlier. Better yet, bridge the gaps between financial institutions and crowdfunding platforms and campaigns so that smaller businesses get the opportunities they need to survive through these difficult times.
4. Enable sustainable development goals (SDG)
Last month, the United Nations Development Program released a report proclaiming that digital finance is now allowing people from all over the world to customize and personalize their money-management experiences such that their financial needs have the potential to be more readily and sufficiently met. Financial institutions willing to work as a partner with crowdfunding platforms and campaigns will further these goals and set society up for a more robust rebound from any possible detrimental effects of the COVID-19 recession.
5. Lend your regulatory expertise to this relatively new industry
Other countries are already beginning to figure out better ways to regulate the crowdfunding financing industry, such as the recent updates to the European Union’s handling of crowdfunding regulations, set to take effect this fall. Well-established financial institutions can lend their support in defining the policies and standard operating procedures for crowdfunding even during such a chaotic time as the COVID-19 pandemic. Doing so will ensure fair and equitable financing for all, at least, in theory.
While originally born out of either philanthropy or early-adopting innovation, depending on the situation, person or product, crowdfunding has become an increasingly reliable means of providing COVID-19 economic relief when other organizations, including the government and some banks, cannot provide sufficient assistance. Financial institutions must lend their vast expertise, knowledge and resources to these worthy causes; after all, we are all in this together.
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mmhmm, Phil Libin’s new startup, acquires Memix to add enhanced filters to its video presentation toolkit
Virtual meetings are a fundamental part of how we interact with each other these days, but even when (if!?) we find better ways to mitigate the effects of COVID-19, many think that they will be here to stay. That means there is an opportunity out there to improve how they work — because let’s face it, Zoom Fatigue is real and I for one am not super excited anymore to be a part of your Team.
Mmhmm, the video presentation startup from former Evernote CEO Phil Libin with ambitions to change the conversation (literally and figuratively) about what we can do with the medium — its first efforts have included things like the ability to manipulate presentation material around your video in real time to mimic newscasts — is today announcing an acquisition as it continues to home in on a wider launch of its product, currently in a closed beta.
It has acquired Memix, an outfit out of San Francisco that has built a series of filters you can apply to videos — either pre-recorded or streaming — to change the lighting, details in the background, or across the whole of the screen, and an app that works across various video platforms to apply those filters.
Like mmhmm, Memix is today focused on building tools that you use on existing video platforms — not building a video player itself. Memix today comes in the form of a virtual camera, accessible via Windows apps for Zoom, WebEx and Microsoft Teams; or web apps like Facebook Messenger, Houseparty and others that run on Chrome, Edge and Firefox.
Libin said in an interview that the plan will be to keep that virtual camera operating as is while it works on integrating the filters and Memix’s technology into mmhmm, while also laying the groundwork for building more on top of the platform.
Libin’s view is that while there are already a lot of video products and users in the market today, we are just at the start of it all, with technology and our expectations changing rapidly. We are shifting, he said, from wanting to reproduce existing experiences (like meetings) to creating completely new ones that might actually be better.
“There is a profound change in the world that we are just at the beginning of,” he said in an interview. “The main thing is that everything is hybrid. If you imagine all the experiences we can have, from in-person to online, or recorded to live, up to now almost everything in life fit neatly into one of those quadrants. The boundaries were fixed. Now all these boundaries have melted away we can rebuild every experience to be natively hybrid. This is a monumental change.”
That is a concept that the Memix founders have not just been thinking about, but also building the software to make it a reality.
“There is a lot to do,” said Pol Jeremias-Vila, one of the co-founders. “One of our ideas was to try to provide people who do streaming professionally an alternative to the really complicated set-ups you currently use,” which can involve expensive cameras, lights, microphones, stands and more. “Can we bring that to a user just with a couple of clicks? What can be done to put the same kind of tech you get with all that hardware into the hands of a massive audience?”
Memix’s team of two — co-founders Inigo Quilez and Pol Jeremias-Vila, Spaniards who met not in Spain but the Bay Area — are not coming on board full-time, but they will be helping with the transition and integration of the tech.
Libin said that he first became aware of Quilez from a YouTube video he’d posted on “The principles of painting with maths”, but that doesn’t give a lot away about the two co-founders. They are in reality graphic engineering whizzes, with Jeremias-Vila currently the lead graphics software engineer at Pixar, and Quilez until last year a product manager and lead engineer at Facebook, where he created, among other things, the Quill VR animation and production tool for Oculus.
Because working the kind of hours that people put in at tech companies wasn’t quite enough time to work on graphics applications, the pair started another effort called Beauty Pi (not to be confused with Beauty Pie), which has become a home for various collaborations between the two that had nothing to do with their day jobs. Memix had been bootstrapped by the pair as a project built out of that. Other efforts have included Shadertoy, a community and platform for creating Shaders (a computer program created to shade in 3D scenes).
That background of Memix points to an interesting opportunity in the world of video right now. In part because of all the focus (sorry not sorry!) on video right now as a medium because of our current pandemic circumstances, but also because of the advances in broadband, devices, apps and video technology, we’re seeing a huge proliferation of startups building interesting variations and improvements on the basic concept of video streaming.
Just in the area of videoconferencing alone, some of the hopefuls have included Headroom, which launched the other week with a really interesting AI-based approach to helping its users get more meaningful notes from meetings, and using computer vision to help presenters “read the room” better by detecting if people are getting bored, annoyed and more.
Vowel is also bringing a new set of tools not just to annotate meetings and their corresponding transcriptions in a better way, but to then be able to search across all your sessions to follow up items and dig into what people said over multiple events.
And Descript, which originally built a tool to edit audio tracks, earlier this week launched a video component, letting users edit visuals and what you say in those moving pictures, by cutting, pasting and rewriting a word-based document transcribing the sound from that video. All of these have obvious B2B angles, like mmhmm, and they are just the tip of the iceberg.
Indeed, the huge amount of IP out there is interesting in itself. Yet the jury is still out on where all of it would best live and thrive as the space continues to evolve, with more defined business models (and leading companies) only now emerging.
That presents an interesting opportunity not just for the biggies like Zoom, Google and Microsoft, but also players who are building entirely new platforms from the ground up.
Mmhmm is a notable company in that context. Not only does it have the reputation and inspiration of Libin behind it — a force powerful enough that even his foray into the ill-fated world of chatbots got headlines — but it’s also backed by the likes of Sequoia, which led a $31 million round earlier this month.
Libin said he doesn’t like to think of his startup as a consolidator, or the industry in a consolidation play, as that implies a degree of maturity in an area that he still feels is just getting started.
“We’re looking at this not so much as consolidation, which to me means market share,” he said. “Our main criteria is that we wanted to work with teams that we are in love with.”
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