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Verkada adds environmental sensors to cloud-based building operations toolkit
As we go deeper into the pandemic, many buildings sit empty or have limited capacity. During times like these, having visibility into the state of the building can give building operations peace of mind. Today, Verkada, a startup that helps operations manage buildings via the cloud, announced a new set of environmental sensors to give customers even greater insight into building conditions.
The company had previously developed cloud-based video cameras and access control systems. Verkada CEO and co-founder of Filip Kaliszan says today’s announcement is about building on these two earlier products.
“What we do today is cameras and access control — cameras, of course provide the eyes and the view into building in spaces, while access control controls how you get in and out of these spaces,” Kaliszan told TechCrunch. Operations teams can manage these devices from the cloud on any device.
The sensor pack that the company is announcing today layers on a multi-function view into the state of the environment inside a building. “The first product that we’re launching along this environmental sensor line is the SV11, which is a very powerful unit with multiple sensors on board, all of which can be managed in the cloud through our Verkada command platform. The sensors will give customers insight into things like air quality, temperature, humidity, motion and occupancy of the space, as well as the noise level,” he said.
There is a clear strategy behind the company’s product road map. The idea is to give building operations staff a growing picture of what’s going on inside the space. “You can think of all the data being combined with the other aspects of our platform, and then begin delivering a truly integrated building and setting the standard for enterprise building security,” Kaliszan said.
These tools, and the ability to access all the data about a building remotely in the cloud, obviously have even more utility during the pandemic. “I think we’re fortunate that our products can help customers mitigate some of the effects of the pandemic. So we’ve seen a lot of customers use our tools to help them manage through the pandemic, which is great. But when we were originally designing this environmental sensor, the rationale behind it were these core use cases like monitoring server rooms for environmental changes.”
The company, which was founded in 2016, has been doing well. It has 4,200 customers and roughly 400 employees. It is still growing and actively hiring and expects to reach 500 by the end of the year. It has raised $138.9 million, the most recent coming January this year, when it raised an $80 million Series C investment led Felicis Ventures on a $1.6 billion valuation.
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Airtable’s Howie Liu has no interest in exiting, even as the company’s valuation soars
In the middle of a pandemic, Airtable, the low-code startup, has actually had an excellent year. Just the other day, the company announced it had raised $185 million on a whopping $2.585 billion valuation. It also announced some new features that take it from the realm of pure no-code and deeper into low-code territory, which allows users to extend the product in new ways.
Airtable CEO and co-founder Howie Liu was a guest today at TechCrunch Disrupt, where he was interviewed by TechCrunch News Editor Frederic Lardinois.
Liu said that the original vision that has stayed pretty steady since the company launched in 2013 was to democratize software creation. “We believe that more people in the world should become software builders, not just software users, and pretty much the whole time that we’ve been working on this company we’ve been charting our course towards that end goal,” he said.
But something changed recently, where Liu saw people who needed to do a bit more with the tool than that original vision allowed.
“So, the biggest shift that’s happening today with our fundraise and our launch announcement is that we’re going from being a no-code product, a purely no-code solution where you don’t have to use code, but neither can you use code to extend the product to now being a low-code solution, and one that also has a lot more extensibility with other features like automation, allowing people to build logic into Airtable without any technical knowledge,” he said.
In addition, the company, with 200,00 customers, has created a marketplace where users can share applications they’ve built. As the pandemic has taken hold, Liu says that he’s seen a shift in the types of deals he’s been seeing. That’s partly due to small businesses, which were once his company’s bread and butter, suffering more economic pain as a result of COVID.
But he has seen larger enterprise customers fill the void, and it’s not too big a stretch to think that the new extensibility features could be a nod to these more lucrative customers, who may require a bit more power than a pure no-code solution would provide.
“On the enterprise side of our business we’ve seen, for instance this summer, a 5x increase in enterprise deal closing velocity from the prior summer period, and this incredible appetite from enterprise signings with dozens of six-figure deals, some seven-figure deals and thousands of new paid customers overall,” he said.
In spite of this great success, the upward trend of the business and the fat valuation, Liu was in no mood to talk about an IPO. In his view, there is plenty of time for that, and in spite of being a seven-year-old company with great momentum, he says he’s simply not thinking about it.
Nor did he express any interest in being acquired, and he says that his investors weren’t putting any pressure on him to exit.
“It’s always been about finding investors who are really committed and aligned to the long-term goals and approach that we have to this business that matters more to us than the actual valuation numbers or any other kind of technical aspects of the round,” he said.
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Quantum startup CEO suggests we are only five years away from a quantum desktop computer
Today at TechCrunch Disrupt 2020, leaders from three quantum computing startups joined TechCrunch editor Frederic Lardinois to discuss the future of the technology. IonQ CEO and president Peter Chapman suggested we could be as little as five years away from a desktop quantum computer, but not everyone agreed on that optimistic timeline.
“I think within the next several years, five years or so, you’ll start to see [desktop quantum machines]. Our goal is to get to a rack-mounted quantum computer,” Chapman said.
But that seemed a tad optimistic to Alan Baratz, CEO at D-Wave Systems. He says that when it comes to developing the super-conducting technology that his company is building, it requires a special kind of rather large quantum refrigeration unit called a dilution fridge, and that unit would make a five-year goal of having a desktop quantum PC highly unlikely.
Itamar Sivan, CEO at Quantum Machines, too, believes we have a lot of steps to go before we see that kind of technology, and a lot of hurdles to overcome to make that happen.
“This challenge is not within a specific, singular problem about finding the right material or solving some very specific equation, or anything. It’s really a challenge, which is multidisciplinary to be solved here,” Sivan said.
Chapman also sees a day when we could have edge quantum machines, for instance on a military plane, that couldn’t access quantum machines from the cloud efficiently.
“You know, you can’t rely on a system which is sitting in a cloud. So it needs to be on the plane itself. If you’re going to apply quantum to military applications, then you’re going to need edge-deployed quantum computers,” he said.
READ MORE
One thing worth mentioning is that IonQ’s approach to quantum is very different from D-Wave’s and Quantum Machines’ .
IonQ relies on technology pioneered in atomic clocks for its form of quantum computing. Quantum Machines doesn’t build quantum processors. Instead, it builds the hardware and software layer to control these machines, which are reaching a point where that can’t be done with classical computers anymore.
D-Wave, on the other hand, uses a concept called quantum annealing, which allows it to create thousands of qubits, but at the cost of higher error rates.
As the technology develops further in the coming decades, these companies believe they are offering value by giving customers a starting point into this powerful form of computing, which when harnessed will change the way we think of computing in a classical sense. But Sivan says there are many steps to get there.
“This is a huge challenge that would also require focused and highly specialized teams that specialize in each layer of the quantum computing stack,” he said. One way to help solve that is by partnering broadly to help solve some of these fundamental problems, and working with the cloud companies to bring quantum computing, however they choose to build it today, to a wider audience.
“In this regard, I think that this year we’ve seen some very interesting partnerships form which are essential for this to happen. We’ve seen companies like IonQ and D-Wave, and others partnering with cloud providers who deliver their own quantum computers through other companies’ cloud service,” Sivan said. And he said his company would be announcing some partnerships of its own in the coming weeks.
The ultimate goal of all three companies is to eventually build a universal quantum computer, one that can achieve the goal of providing true quantum power. “We can and should continue marching toward universal quantum to get to the point where we can do things that just can’t be done classically,” Baratz said. But he and the others recognize we are still in the very early stages of reaching that end game.
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As low-code startups continue to attract VC interest, what’s driving customer demand?
Investor interest in no-code, low-code apps and services advanced another step this morning with Airtable raising an outsized round. The $185 million investment into the popular database-and-spreadsheet service comes as it adds “new low-code and automation features,” per our own reporting.
The round comes after we’ve seen several VCs describe no- and low-code startups as part of their core investing theses, and observed how the same investors appear to be accelerating their investing pace into upstart companies that follow the ethos.
The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
Undergirding much of the hype around apps that allow users to connect services, mix data sources and commit visual programming is the expectation that businesses will require more customized software than today’s developers will be able to supply. Low-code solutions could limit required developer inputs, while no-code services could obviate some need for developer time altogether. Both no- and low-code solutions could help alleviate the global developer shortage.
But underneath the view that there is a market mismatch between developer supply and demand is the anticipation that businesses will need more apps today than before, and even more in the future. This rising need for more business applications is key to today’s growing divergence between the availability and demand for software engineers.
The issue is something we explored talking with Appian, a public company that provides a low-code service that helps companies build apps.
Today we’re digging a little deeper into the topic, chatting with Mendix CEO Derek Roos. Mendix has reached nine-figure revenues with its low-code platform that helps other companies build apps, meaning that it has good perspective into what the market is actually demanding of itself and its low-code competition.
We want to learn a bit more about why business need so many apps, how COVID-19 has changed the low-code market and if Mendix is accelerating in 2020. If we can get all of that in hand, we’ll be better equipped to understand the growing no- and low-code startup realm.
A growing market
Mendix, based in Boston, raised around $38 million in known venture capital across a few rounds, including a $25 million Series B back in 2014. In 2018, Mendix partnered up with IBM to bring its service to their cloud, and later sold to Siemens for around $700 million the same year.
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Airtable raises $185M and launches new low-code and automation features
The spreadsheet-centric database and no-code platform Airtable today announced that it has raised a $185 million Series D funding round, putting the company at a $2.585 billion post-money valuation.
Thrive Capital led the round, with additional funding by existing investors Benchmark, Coatue, Caffeinated Capital and CRV, as well as new investor D1 Capital. With this, Airtable, which says it now has 200,000 companies using its service, has raised a total of about $350 million. Current customers include Netflix, HBO, Condé Nast Entertainment, TIME, City of Los Angeles, MIT Media Lab and IBM.
In addition, the company is also launching one of its largest feature updates today, which starts to execute on the company’s overall platform vision that goes beyond its current no-code capabilities and brings tools to the service more low-code features, as well new automation (think IFTTT for Airtable) and data management.
As Airtable founder and CEO Howie Liu told me, a number of investors approached the company since it raised its Series C round in 2018, in part because the market clearly realized the potential size of the low-code/no-code market.
“I think there’s this increasing market recognition that the space is real, and the space is very large […],” he told me. “While we didn’t strictly need the funding, it allowed us to continue to invest aggressively into furthering our platform, vision and really executing aggressively, […] without having to worry about, ‘well, what happens with COVID?’ There’s a lot of uncertainty, right? And I think even today there’s still a lot of uncertainty about what the next year will bear.”
The company started opening the round a couple of months after the first shelter in place orders in California, and for most investors, this was a purely digital process.
Liu has always been open about the fact that he wants to build this company for the long haul — especially after he sold his last company to Salesforce at an early stage. As a founder, that likely means he is trying to keep his stake in the company high, even as Airtable continues to raise more money. He argues, though, that more so than the legal and structural controls, being aligned with his investors is what matters most.
“I think actually, what’s more important in my view, is having philosophical alignment and expectations alignment with the investors,” he said. “Because I don’t want to be in a position where it comes down to a legal right or structural debate over the future of the company. That almost feels to me like the last resort where it’s already gotten to a place where things are ugly. I’d much rather be in a position where all the investors around the table, whether they have legal say or not, are fully aligned with what we’re trying to do with this business.”
Just as important as the new funding though, are the various new features the company is launching today. Maybe the most important of these is Airtable Apps. Previously, Airtable users could use pre-built blocks to add maps, Gantt charts and other features to their tables. But while being a no-code service surely helped Airtable’s users get started, there’s always an inevitable point where the pre-built functionality just isn’t enough and users need more custom tools (Liu calls this an escape valve). So with Airtable Apps, more sophisticated users can now build additional functionality in JavaScript — and if they choose to do so, they can then share those new capabilities with other users in the new Airtable Marketplace.
Image Credits: Airtable
“You may or may not need an escape valve and obviously, we’ve gotten this far with 200,000 organizations using Airtable without that kind of escape valve,” he noted. “But I think that we open up a lot more use cases when you can say, well, Airtable by itself is 99% there, but that last 1% is make or break. You need it. And then, just having that outlet and making it much more leveraged to build that use case on Airtable with 1% effort, rather than building the full-stack application as a custom built application is all the difference.”
Image Credits: Airtable
The other major new feature is Airtable Automations. With this, you can build custom, automated workflows to generate reports or perform other repetitive steps. You can do a lot of that through the service’s graphical interface or use JavaScript to build your own custom flows and integrations, too. For now, this feature is available for free, but the team is looking into how to charge for it over time, given that these automated flows may become costly if you run them often.
The last new feature is Airtable Sync. With this, teams can more easily share data across an organization, while also providing controls for who can see what. “The goal is to enable people who built software with Airtable to make that software interconnected and to be able to share a source of truth table between different instances of our tables,” Liu explained.
Image Credits: Airtable
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Tune in today at 12pm PDT for an essential Disrupt 2020 Sneak Peek
Are you ready to experience a Disrupt event like no other? Thousands of attendees from around the world, an all-star lineup of tech icons, movers, shakers and unicorn makers. Opportunities around every corner just waiting to be discovered. Are we amped up at the thought of what will transpire over the next five days? Heck yeah!
Okay, we’re switching to decaf. Our point (and we do have one) is that before our very own Matthew Panzarino officially welcomes you to Disrupt 2020 tomorrow morning, we’re inviting you to a pre-show today — the Disrupt Sneak Peek — with Disrupt host and Managing Editor, Jordan Crook.
Today, Sunday September 13, from 12 p.m.-12:30 p.m. (PT), Jordan will show you how to access the different virtual platforms we’ll use throughout the show. Plus, you’ll get a look at the companies competing in the Startup Battlefield, learn more about the TC10 and hear about some of the incredible speakers we have on tap.
It’s a quick but essential overview of what to expect over the course of Disrupt. And who knows? We might even trot out a few surprise guests (spoiler alert: we will).
Come to the Disrupt Sneak Peek today from 12 p.m.-12:30 p.m. (PT), get a handle on the virtual platforms and get pumped up about five days of sharing connection, collaboration and education with the global early-stage startup community.
Any last-minute decision makers out there? You can still buy a Disrupt pass right here but be quick because prices increase tonight!
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Check out these Breakout Sessions at Disrupt 2020
We’re on the brink of the biggest Disrupt in TechCrunch history. It’s five days of education, exhibition, competition and connection that spans the globe. As you plan your schedule, keep this in mind: You’ll find some of the most insightful and downright interesting programming at Disrupt 2020 in our Breakout Sessions. And that, given our powerhouse agenda, is saying something.
Every Disrupt attendee can take part in the breakout sessions — they’re open to every pass level. Breakouts cover a range of topics and formats. You might watch startups pitch, attend a workshop or take in a panel discussion. No matter what, you’re bound to receive valuable insight that can inspire you and help your business.
Take advantage of our partners’ expertise and check out any (or all) of these breakout sessions. You’ll be glad you did.
Monday, September 14
11:00 am – 11:50 am
Sponsored by Adobe
How to Invest in Infrastructure to Deliver Experience
Gabie Boko, Global VP Digital, Hewlett Packard Enterprise & Adobe VP of Platform Engineering, Anjul Bhambhri discuss digital transformation and experience delivery.
12:00 pm – 12:30 pm
Sponsored by Taiwan Tech Arena
Taiwan Pavilion Pitch-off session 1
Featuring twenty startups in healthcare, IoT, blockchain, AR-VR, cyber security, E-learning, and green technology
Tuesday, September 15
9:00 am – 9:50 am
Sponsored by Silicon Valley Bank
Diversity as Disruption: Take action now to create a more diverse ecosystem
Recent events continue to demonstrate that change is not happening fast enough. How can we ensure the current social justice momentum is more than just talk? Guided by SVB’s recent research into the “4th wave of venture capital,” learn how three industry leaders are tackling the problem with real actions. By the close of the session, leave with tangible steps you can take today – whether as an individual or as a firm — to make a meaningful, move-the-needle impact in your organization.
9:00 am – 10:30 am
Sponsored by Taiwan Tech Arena
Join Christine, Allan, Tico Blumenthal (Life Sciences Angels), and Laura Dietch (BioTrace Medical) to explore the investment and innovation framework in post-COVID19, and to discuss the driver of innovation healthcare amid the pandemic and economic collapse. TTA will also present the key anti-COVID19 innovative measurements in Taiwan to achieve the lowest infection rate around the world.
10:00 am – 10:30am
Sponsored by hub.brussels
Belgian Startup Pitch Competition
Hub.brussels invites you to join us for the 6th edition of our Belgian startup pitch competition.
12:00 pm – 12:30 pm
Taiwan Pavilion Pitch-off Session 2
Sponsored by Taiwan Tech Arena
Featuring twenty startups in AI solutions, softwares, big data, edge computing, and space technology
2:30 pm – 4:00 pm
TC Include Reception sponsored by Sootchy
Sponsored by Sootchy
INVITE ONLY – TC Include kicks off this year’s founder cohort with organizational partners Black Female Founders, Female Founders Alliance, Latinx Startup Alliance and StartOut with remarks by Sootchy.
Wednesday, September 16
9:00 am – 9:50 am
Sponsored by Consulate General of Canada in San Francisco
“Grow North”: How Canada Empowers Investors and Founders
Come listen to a group of Canadian founders who will talk about their start-ups and how Canada has helped them grow and succeed globally.
10:00 am – 11:00 am
Sponsored by StartUp Bahrain
Bahrain: Your gateway to the Middle East and beyond
INVITE ONLY – With its supportive ecosystem, advanced digital infrastructure, flexible and pioneering regulations; rapid growth in funding opportunities and a liberal market, Bahrain is the ideal testbed for startups and scaleups to test their products and solutions before growing and expanding across the Middle East
10:00 am – 10:30 am
Sponsored by JETRO
Come see the latest exciting technology and services coming from Japan.
11:00 am – 11:30 am
Sponsored by KOCCA
Join Us to Watch Seven Amazing Startups from Korea
K-pop? K-Drama? K-Games? K-Entertainment? All startups with K-contents will show off during this Pitch Off
12:00 pm – 12:50 pm
Sponsored by Envestnet | Yodlee
Making Data Meaningful for the FinTech Ecosystem
Open finance/banking represents a new era of financial data transparency. It brings an unprecedented opportunity for FinTechs to provide personalized guidance consumers need to improve financial wellness. Envestnet | Yodlee experts will discuss empowering the entire FinTech ecosystem with enriched financial data and insights, plus the future of open banking in the U.S.
Thursday, September 17
10:00 am – 11:30 am
Sponsored by Dassault Systèmes
Dassault Systemes’s 3DEXPERIENCE Lab Global Accelerator Program
INVITE ONLY – 3DEXPERIENCE Lab is Dassault Systèmes’s global innovation program that offers innovative startups free access to Dassault Systèmes collaborative Design, Engineering, Simulation & Data Intelligence solutions, along with mentoring, and marketing support for two years. Come; learn how the Lab selects, mentors and supports its startups!
10:00 am – 10:50 am
Sponsored by AppsFlyer
Advertising Disrupted: What User Privacy Means For Marketers
This session offers the unique opportunity to join a live recording of AppsFlyer’s industry podcast, Next in Marketing. Mike Shields, podcast host and former Wall Street Journal, Business Insider, AdWeek and Digiday editor along with guests (Brian Quinn, US President & GM, AppsFlyer and Ana Milicevic, Co-founder and Principal, Sparrow Advisers) will delve into the ecosystem’s pivotal privacy updates, including Apple’s IDFA opt-out and the impact of iOS 14 to measurement and attribution, as well as targeting in a cookieless world. You’ll also hear about the future of personalization post-regulations in this session that is sure to address the most pressing issues and headlines on the mind of marketers globally.
12:00 pm – 12:50 pm
Sponsored by KITE
Startups plus large enterprises can fuel each other’s growth and bottom line, whether it’s a partnership, investment or acquisition. But bringing the right ones together needs more than serendipity: it requires a dynamic ecosystem that includes consultants, accelerators and VCs (aka the connectors). We sit down with top leaders from around the ecosystem to learn how they discover innovative solutions — and get to outcomes — faster.
And for those who want to upgrade to a Disrupt Digital PRO Pass you can get access to these sessions:
Tuesday, September 15
10:30 am – 10:50 am
Sponsored by All Raise
Showing Your Work: VCs Investing in Diversity Share Their Secrets
More than 80% of venture capital firms don’t have a single Black investor and 68% of firms don’t have any female partners. As VCs across the country urgently seek to diversify both their investing teams and their portfolios, they could learn a lot from these amazing investors, who have made diversity a central part of their investing thesis from the start. Join us for a candid conversation about the power of investing in underrepresented founders and tapping into over $4.4 trillion in value. This panel will be moderated by Pam Kostka, CEO of All Raise featuring Sarah Kunst, Founder & Managing Director at Cleo Capital and Christie Pitts, General Partner at Backstage Capital who are both leading VCs who focus their investments on founders from underrepresented backgrounds.
11:30 am – 11:50 am
Sponsored by Toyota
Innovating with Fuel Cells
James Kast demonstrates how Toyota continues to navigate the innovation of fuel cells and the implementation across numerous industries.
That’s a mighty fine breakout lineup if we do say so ourselves. Yep, we’re tooting our own horn. Don’t let all that valuable expertise go to waste. Make sure you carve out time in your Disrupt schedule for insight and inspiration!
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Is the vaunted cloud acceleration falling flat?
Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading.
Ready? Let’s talk money, startups and spicy IPO rumors.
Is the vaunted cloud acceleration falling flat?
This week we’re taking a look at the bad side of the cloud software market. In case you were avoiding the news over the last week, tech and software stocks are struggling. Not much compared to their 2020 gains, mind, but after months of only going up their recent declines have been notable. (As I write to you, the tech-heavy Nasdaq is headed for its worst week since March.)
The pullback makes some sense. Having watched SaaS and cloud valuations get stretched to historical highs, Slack’s earnings were an endcap on a good, but not-quite-as-good-as-expected set of results from public cloud and SaaS companies.
As we’ve noted, most public software companies are not seeing their revenue growth accelerate. Some public software companies may be seeing their growth deceleration slow, but the number of public software companies actually accelerating in 2020 is tiny. The actually-accelerating group is Zoom, and maybe one or two other companies.
Why is that, given all that we’ve heard about the presumably accelerating digital transformation? Slack earnings are a good explainer. The enterprise communications company’s recent filings explain that its COVID-bump has somewhat dissipated, while a number of COVID-related problems are persisting.
Seeing recently risen valuations slip in the face of a lack of materially accelerated growth and some churn issues is reasonable.
Does this matter for startups? Some. Public software valuations are still elevated compared to historical norms, which helps software startups defend their valuations and raise well. And there are plenty of startup hotspots as we’ve noted, including API-delivered startups enjoying time in the sun, as well as edtech startups that caught a COVID-related tailwind.
I am chatting with investors from a16z, Bessemer, and Canaan next week at Disrupt about the future of SaaS, collecting notes on the private-market side of this particular issue. So, more to come. But for now, I think we’ve seen the top of the peak and are now dealing more with reality than hype. Or, as public investors might say, the COVID trade has run its course and earnings will set the tone moving forward.
Market Notes
Moving on to market notes, a fintech stat, and some other bits of data for your consumption and edification:
- Fintech is staying hot, with M1 Finance doubling its AUM from $1 billion to $2 billion in about half a year. TechCrunch covered M1 reaching the $1 billion AUM threshold because it’s a Chicago company and I could not resist the fintech data point. Then M1 raised $33 million at $1.45 billion AUM in June. Now it’s at $2 billion.
- Our read? The savings and investing boom that helped power Robinhood to new revenue records, along with other players, is continuing.
- More evidence of that? Alpaca, a startup that delivers equity-trading capabilities via an API, is seeing insane growth. (That piece has more notes on API-led startups in case that is your jam.)
- Quickly turning to the public markets, JFrog is about to show the power of profits in today’s markets, and next week should see a number of debuts of JFrog, Sumo Logic and Snowflake. Palantir is the week after. (More notes here if you need them.)
- Oh, and folks are pricing Palantir at a fraction of its final private valuation. Whoops. Maybe that’s why so many insiders are selling now? Big ups to Danny for that story. (Also, yowza this is not at all good.)
A brief interlude: Disrupt is next week, you should come. You can enjoy it from the comfort of your couch.
Various and Sundry
SaaS and cloud earnings continue to trickle in, which means I spent a good portion of my week talking to more execs at public companies. Short notes from Smartsheet, nCino and BigCommerce to follow, along with some final thoughts for your weekend.
- On the valuations front, Smartsheet CEO Mark Mader told TechCrunch that “investors are thinking about how to balance historically high multiples with historically high potential returns in the space that’s still very young.”
- He added that no one doubts that cloud “is going to be the answer” to a lot of stuff, or that “people are [going to] change how they work,” but did note that cloud companies are not impervious to macro headwinds, because “cloud companies serve non-cloud companies,” and not merely companies in sectors that are excelling.
- This fits neatly into our notes on Slack above. More on Smartsheet’s earnings here.
- nCino had a good quarter, beating expectations and guiding well during its first public earnings report. However, like many other SaaS and cloud companies, it has lost some valuation altitude in recent weeks. It’s still miles above its IPO price, however.
- I was curious about how the post-IPO period has been for the company’s CEO, Pierre Naudé, and his response was fun. Like all new public company CEOs, he made sure to note how quickly his team got back to work after the debut, but he also told The Exchange that he does now spend time that he used to invest in customers and “innovation” talking to analysts and investors.
- Being a public company, therefore, has time and focus costs that are worth considering, as we see so many tech shops approach the public markets.
- And then there was BigCommerce, which went public quite recently. I got back on the horn with CEO Brent Bellm, wanting to learn a bit more about the current state of the e-commerce market.
- Here’s what the CEO had to say, lightly edited and condensed for clarity:
“I think it’s staying pretty hot. The surprising thing in the post-pandemic weeks was just how rapidly growth accelerated, and consumer and business adoption grew. We all kept saying ‘well at some point stores will reopen, and the growth rates will come back down.’ But the growth rates for actual sales running through stores continued to be very strong. You know, whether you look at our customer set, or [at] credit card data from Bank of America or others […] you can see quite clearly that e-commerce remains very, very hot. It’s a permanent change in behavior. Consumers have found a lot more places where they now like to buy online and reasons to like to buy online, and companies have found new and more effective ways to sell.”
- This is probably a good reminder to turn our attention back to e-commerce when we get a chance post-Disrupt.
- And, finally, read Natasha on why rolling funds are blowing up, something that we talked about on the podcast this week.
That’s all the room we have. Hugs, fist bumps, and good luck.
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Snowflake, Unity, JFrog move towards IPOs despite public market turmoil
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.
Warren Buffet is eager to invest in a money-burning SaaS unicorn that is about to IPO. Despite recent tech stock declines and growing fears of US election turbulence, this is one reason that Snowflake is on track to be one of the biggest offerings of the year. And it is not the only company defying the pandemic and newer problems in order to get out of the gate soon.
First, here’s Alex Wilhelm with more Snowflake filing details:
The $75 to $85 per-share IPO price target values the firm at between $20.9 billion and $23.7 billion, huge sums for the private company. Its IPO could raise more than $2.7 billion for the startup. Snowflake was last valued at around $12.5 billion when it raised a Series G worth $479 million earlier this year.
Built into those valuation projections are two private placements of stock in Snowflake, $250 million apiece from both Salesforce, the well-known CRM player, and Berkshire Hathaway, better known for its investment returns in the 80s and 90s, Cherry Coke and Charlie Munger’s humor. Jokes aside, the inclusion of Salesforce in the IPO is notable, but not a shock, but Berkshire taking part in the public market debut of Snowflake, a company with historic losses that are nigh-tyrannical, is.
Today, “epic growth, improving gross margins and dramatically curtailed losses” are factors that lure investors like Buffett, Alex concludes.
In other pre-IPO analysis this week, Eric Peckham takes a deeper look at Unity this week, updating a massive analysis he had done last year. Basically, the game engine creator could be more central to our online future than many seem to realize today:
Much of the press about Unity’s S-1 filing mischaracterizes the business. Unity is easily misunderstood because most people who aren’t (game) developers don’t know what a game engine actually does, because Unity has numerous revenue streams, and because Unity and the competitor it is most compared to — Epic Games — only partially overlap in their businesses….
For those in the gaming industry who are familiar with Unity, the S-1 might surprise you in a few regards. The Asset Store is a much smaller business that you might think, Unity is more of an enterprise software company than a self-service platform for indie devs and advertising solutions appear to make up the largest segment of Unity’s revenue.
In an accompanying analysis for Extra Crunch, he digs into the filing and maps out the bear and bull cases for the company. Some of the biggest issues he notes are that it is still fairly reliant on advertising (even though it wants a SaaS multiple) and it is continuing to lose lots of money on ambitious expansions. So this is probably not Warren Buffett’s type of frozen dessert, if you will. Risk-seekers and futurists, however, will want to try this free sample of the bull case:
Game engines are eating the world… A vast swath of entertainment and work activities already center on interactive content. Unity has demonstrated value and early adoption across numerous industries for a long list of use cases; it is on the precipice of entering the daily workload of millions of professionals, from engineers to industrial designers to film producers to marketers. Its Create Solutions division is on a path to becoming something of a next generation Adobe ($11 billion in 2019 revenue): A creative suite used by design, engineering, marketing and sales teams across industries.
As AR and VR technology expands into mainstream use over the decade ahead, Unity’s adoption will only expand further. The majority of AR and VR content is already made with Unity’s engine and Unity’s R&D is improving the ease of creating such content by less technical professionals (and students). This positions Unity to expand into key functions higher up in the tech/content stack of mixed reality by providing identity, app distribution, payment and other solutions across content experiences.
Elsewhere in our IPO coverage, Danny Crichton got the details about Palantir insiders accelerating their stock sales for Extra Crunch, and Alex dug into the fresh Sumo Logic and JFrog filings S-1 filings.
Image Credits: Lawrence Anareta / Getty Images
Two considerations of SPACs
Special purpose acquisition companies are a thing now for tech startups that want to go public, but are they the best thing? Here’s top seed-VC investor Josh Kopelman’s take, via an interview from this week with Connie Loizos.
On the one hand, just for fun, I made sure that we owned Lastround.com in case we ever wanted to launch our SPAC. [Laughs.] But it’s hard to know the true benefit of a SPAC. And I think that now that we’ve begun to see a market shift toward allowing direct listings with a fundraising component, you might see that as a far more viable and frequent fundraising or a liquidity device.
A fresh startup trend he’s more positive about is rolling funds (short-window raises for small very early investments, like the new offering from AngelList).
But back to SPACs. George Arison, cofounder and co-CEO of car-buying unicorn Shift, wrote a guest post for Extra Crunch this week about how he has approached taking his own company through a SPAC. Among other things, he says, private investments in public equity are not only good but essential:
There are some in Silicon Valley who think that raising a PIPE is a bad idea — quite frankly, this is patently false. A core reason why SPACs work today, and why they differ from the first generation of SPACs that often did not work, is because of the PIPE process. The PIPE period allows companies to raise more capital, to validate valuations, and it also creates a pathway to transition “special situations” investors to fundamental investors that you want as long-term shareholders.
A pause for Belarus, and PandaDoc employees
After Belarus-born PandaDoc CEO Mikita Mikado publicly supported opposition to his country’s dictatorship, state police raided the company’s large operation in the country and imprisoned four of its employees on spurious charges. As they fight for justice for their colleagues, and for the country’s political process, they’re planning to close operations in the country, and are joining with other startups to highlight the damage to the local tech scene. More about the movement in the subtitled video below:
Investor surveys: proptech’s future, Warsaw and more
We’ve been trying to understand what is really going on with real estate and proptech, given the various impacts the traditionally glacial sector has experienced lately (pandemic, remote work, retail issues etc.). On Tuesday we ran the second part of our most recent survey, focused on present and future opportunities. Here’s Clelia Warburg Peters, venture partner at Bain Capital Ventures, about making peace with real estate agents and focusing on financial and processing aspect that have not been disrupted in a very long time
Up until recently, the innovation in the residential space was all focused on disintermediating the real estate broker, and I think the most sophisticated entrepreneurs are increasingly understanding that service is a core component of a home sale… [T]he bigger opportunity is finding a way to leverage the position of the real estate agent (in whatever form) to sell affiliated products, including title, mortgage and home insurance or to innovate in those products themselves.
Elsewhere in survey work this past week, Mike Butcher checked in with investors focused on Warsaw and Poland, and is also looking for folks to talk to about the Vienna tech scene.
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#EquityPod
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.
The whole crew was back, with Natasha Mascarenhas and Danny Crichton and myself chattering, and Chris Gates behind the scenes tweaking the dials as always. This week was a real team effort as we are heading into the maw of Disrupt — more here, see you there — but there was a lot of news all the same.
So, here’s what we got to:
- AngelList is doubling down on rolling funds, driving that SaaS revenue into the firm that is also investing in the rolling funds. So that’s neat. (Really!)
- Edtech stayed hot this week with Byju’s raising $500 million from Silver Lake. Founded back in 2011, Byju’s is the highest-valued edtech company that we can think of, now worth $10.8 billion.
- And speaking of Silver Lake, the group just poured $1 billion into a part of the Reliance empire, this time Reliance Retail. And we talked about JioMart, which is taking on both Flipkart and Amazon in the country.
- Next there were two companies with names that start with “S” that raised $100 million in the last week, namely Snyk — more here — and Sprinklr — more here.
- Sticking to our “S” theme, Slack’s earnings were incredibly interesting. The company’s quarter didn’t get plaudits from investors, and it did note some negative COVID impacts that could impact startups as well.
- And, one more S-company to get through: Snowflake. We were all a-twitter about the company’s new valuation range and the fact that fucking Berkshire Hathaway is going to invest in it. That’s wild! What a thing!
- Finally on the IPO front, we did a quick Palantir update. Danny has all the latest here.
We wrapped with whatever this is, which was at least good for a laugh. We are back next week at Disrupt, so see you all there!
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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Disrupt 2020 kicks off tomorrow — are you ready?
Happy Disrupt 2020 Eve, startup fans! It’s been a crazy mad dash to transform our annual flagship San Francisco event at Moscone Center into the first all-virtual Disrupt (thanks, COVID-19). Then again, going global seems an appropriate way to celebrate 10 years of Disruption. It all starts tomorrow with a pre-show session to explain how to access the different platforms we’ll use during the event — are you ready?
Wait, what? Did you just say you don’t have your Disrupt 2020 pass yet? Talk about a vinyl record scratch moment. Okay, don’t panic. You can still join your early-stage startup community and discover untold opportunities to build your business. Let’s break down the different pass options, access levels and current pricing.
Important note: Pricing for all passes increase tomorrow, September 13 at 11:59 p.m. (PT), so don’t drag your feet a moment longer. Choose and buy your pass right now.
Disrupt Digital Pro Pass ($345): You receive online access to all the programming on the Disrupt stage and the Extra Crunch stage. We’re talking live stream and replays on demand. Interactive sessions let you ask questions, participate in polling and engage with speakers. Your pass includes CrunchMatch to make virtual networking easy, organized, efficient and effective. It will come in handy as you find and meet attendees from around the world — and explore and connect with hundreds of early-stage startups in Digital Startup Alley — the show’s expo area. Meet the Startup Battlefield competitors and the TC Top Picks!
Disrupt Digital Pro Pass — Investor ($345): You receive all the features listed above and special opportunities to connect and network with the investor community. Plus, you receive a guide to the exhibitors in Startup Alley to simplify connecting with early-stage startups both during and after the event.
Digital Pro Pass — Students ($125), military personnel, active government employees and non-profit agency employees ($145): If you belong to any of the aforementioned groups, congrats, you qualify for a discount for full access to Disrupt 2020. Your pass provides the same level of access as the standard Digital Pro Pass but your status must be verifiable.
Disrupt Digital Pass ($45): You receive live access only to the Disrupt Stage, Breakout Sessions (workshops, product demonstrations, startup pitches, networking receptions) and access to the Digital Startup Alley expo area.
A multitude of ways and price points to make Disrupt 2020 accessible and to help you discover opportunities that can take your business forward to the next level and beyond. Get on board, buy your pass before 11:59 p.m. (PT) tomorrow night and save. We can’t wait to see where Disrupt takes you!
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