Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we’re adding four new names to the growing $100 million annual recurring revenue (ARR) club. The firms — Sisense, SiteMinder, Monday.com, and Lemonade — add diversity to our current group of yet-private companies which have reached the nine-figure recurring revenue threshold.

Our goal in tracking the companies in this high-flying cohort is to keep tabs on the private firms (often unicorns, it should be said) that could go public if needed. While not every unicorn will or could go public, companies with nine-figure ARR have a clear path to the public markets provided that their economics are in reasonable shape.

And we’ve seen some remarkably efficient companies meet the mark, including Egnyte with just $137.5 million raised, and Braze, with only $175 million on its books. For growth-oriented, venture-backed companies, those are efficient results.

But let’s add a few more members to the club today. Please meet our new centurions, centaurs, or whatever we end up calling them.

Sisense: more than $100 million ARR

Sisense is a business intelligence company that merged with Periscope Data earlier this year. The combined firm has raised just over $200 million, according to Crunchbase, with the lion’s share of that landing in Sisense’s column (about $175 million).

What’s notable about the combination is that the two firms were public about saying that, when brought together, they would have combined ARR of $100 million. That was back in May. Today, Sisense has crested the $100 million mark by itself, according to an interview with TechCrunch. With Periscope added to the mix the company’s total ARR is naturally higher.

Sisense had a few original goals according to CEO Amir Orad, including helping businesses “take complex data and bring it together to get insights.” Its second focus is helping companies “take complex data sets and build [them out] as an analytical application in their products,” he said.

Periscope came into the picture when Orad and the smaller company’s CEO Harry Glaser (now Sisense’s CMO) started talking as friends about their respective markets. According to Orad, Glaser outlined a new sort of organization being built inside some companies that “were not traditional BI teams” or “traditional product teams,” but instead brought together “data engineers and data scientists and very capable individuals who [wanted] to make sense of [the] data sitting in the cloud.” Periscope had built “a very impressive business” supporting those new organizations, with “many hundreds of customers,” Orad said.

That meant that Sisense’s pair of focuses were somewhat two of out three, making the corporate combination an obvious bet.

Regarding what changed as Sisense grew, cresting the $50 million ARR mark and later the $100 million ARR mark, Orad told TechCrunch that what differed was “scale,” saying that at its size “what you do impacts more people, more individuals, more companies, [and] more customers.” (I have interesting notes on how the two companies managed their combination from a culture perspective, This email address is being protected from spambots. You need JavaScript enabled to view it. if you’d like to read them.)

SiteMinder: AU$100 million ARR

The first Australian member of the nine-figure ARR club is SiteMinder, which we’re letting in on a technicality; the firm’s ARR figure is in Australian dollars, which works out to around $70 million USD. However, its growth curve appears steep so we’re not too worried about including it a little early from a domestic dollar perspective.

Datrium is executing very well in the cloud-based disaster recovery space. Read on for the company’s journey so far. Sramana Mitra: Let’s start at the very beginning of your journey. Where are you...

___

For entrepreneurs interested to meet and chat with Sramana Mitra in person, please join us for our bi-monthly and informal group meetups. If you are living in the San Francisco Bay Area or are just...

___

It’s tough to be a competitive gamer once you’re an adult. Simply fitting tournament time into a busy schedule is challenge enough, but even if you can make the time, where do you go to find other adults who are competitively playing the games you love?

That’s where Lowkey.gg comes in. Lowkey.gg is a tournament platform for adult gamers. The company is particularly focused on helping professional organizations set up their esports squads just like company basketball or softball teams.

One of the challenges here is that it’s incredibly difficult for adult gamers to find each other. Most of them don’t usually broadcast their affinity for video games. Searching for other competitive gamers who are above the age of 18 is a bit of a lost cause.

The hope for Lowkey is that they can connect adult gamers with one another to get the most out of their gaming experience. Everyone playing through Lowkey must be 18 years of age or older and have a full-time job.

Users can register as a solo gamer for $39, plus a subscription fee of $13/month, and get automatically matched with a team. Lowkey takes into account things like location, job, alma mater and other bits of information (all shown on your public Lowkey profile) to create teams with like-minded players. The company says this transparency reduces the toxicity around teammates. Conversely, users also can form a squad in real life and sign up as a pre-made team for $195/month.

Thus far, Lowkey has signed up teams from Google, Apple, Robinhood and Twitch.

Lowkey is launching with League of Legends as its first game, and Season 1 starts on January 13.

Seasons last a minimum of eight weeks, with players scheduled to play for one hour one night a week. Lowkey has also built a relatively sophisticated Discord chatbot that lets users check in to say they’re ready for a game and automatically puts the teams in a chat together to coordinate the match.

Like many startups, Lowkey is actually the result of a pivot. The company was originally called Camelot.

In March of 2019, Camelot launched out of YC to allow YouTube and Twitch audiences to pay to see what they want. Users could submit bounties to see their favorite YouTuber play a game with pistols only, or to play a game while standing on a skateboard.

Turns out, there were two big issues. Co-founder Jesse Zhang explained that it wasn’t sustainable to build a platform on top of a platform, particularly a platform that is incredibly top heavy and potentially overhyped.

“Sometimes hype can be misaligned with the size of the market, and it felt like streaming was one example of that,” said Zhang. “Even after we organically got several really large streamers using it, and the product performed almost perfectly, the volume is still not nearly the scale that you could turn into a real business.”

Which brings us to the second issue. The money that flows through Twitch from viewers to streamers is almost always based on altruism and emotion. It’s exciting to hear your favorite streamer thank you for a $5 donation or gifted sub. Viewers aren’t paying for the content; they’re paying for a connection.

So Camelot quickly went back to the drawing board and came out on the other side as Lowkey.gg.

Lowkey has raised capital but declined to share the amount. After the launch of League of Legends, the company plans to launch seasons for other titles, including Overwatch, TFT, DotA and Smash Ultimate.

According to a recent report by Fortune Business Insights, the global artificial intelligence market is estimated to grow 33% annually to $202.57 billion by 2026. New York-based Dataminr is using AI...

___

Just over two years ago, PerceptIn announced an $8 million Series A. The funding followed a $2 million seed round, and found the startup essentially coming out of stealth to showcase the sensors it was building for a wide range of form factors, from cars to robot vacuums.

The company’s been quite busy in the meantime. In fact, it even went so far as changing its name. PerceptIn is now “Trifo” — a punchier name, if not quite as memorable. The company’s currently on its third robotic vacuum, announced today and set to be officially unveiled at CES in a few days.

Along with the arrival of “Lucy” comes some more big funding from the Samsung Ventures-supported startup. Trifo has just raised a $15 million Series B, bringing its total funding up to $26 million. The round includes backing from Yidu Cloud, Tsinghua AI Fund and Matrix Partners, with a focus on producing more hardware and software solutions in the home robotics space, additional hiring and pushing into the U.S. and European markets.

For now, robot vacuums appear to be the company’s primary public-facing output. It’s a tough market — one that’s traditionally been dominated by one player (iRobot). Still, there’s no shortage of alternatives from players big and small looking to crack it.

As for what sets Lucy apart, there are a pair of cameras on board — that could either be a plus or minus, depending on where you land on matters of privacy. The pair combine 1080p color images with depth sensing to provide home surveillance and mapping in light and dark settings. The robot can also be designed to “patrol” the home in predefined routes. 

Lucy also features built-in obstacle avoidance for objects as short as one inch, room-by-room cleaning and and a 5,200 mAh battery for up to two hours of cleaning on a charge. Pricing is $799, putting it in line with iRobot’s offerings. It’s set to arrive at some point in Q1. 

Pranam discusses trends and open opportunities in Healthcare IT. Sramana Mitra: Let’s start by introducing our audience to yourself as well as to The Garage. Pranam Ben: I’m the Founder and CEO of...

___

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

It’s finally 2020, the year that should bring us a direct listing from home-sharing giant Airbnb, a technology company valued at tens of billions of dollars. The company’s flotation will be a key event in this coming year’s technology exit market. Expect the NYSE and Nasdaq to compete for the listing, bankers to queue to take part, and endless media coverage.

Given that that’s ahead, we’re going to take periodic looks at Airbnb as we tick closer to its eventual public market debut. And that means that this morning we’re looking back through time to see how fast the company has grown by using a quirky data point.

Airbnb releases a regular tally of its expected “guest stays” for New Year’s Eve each year, including 2019. We can therefore look back in time, tracking how quickly (or not) Airbnb’s New Year Eve guest tally has risen. This exercise will provide a loose, but fun proxy for the company’s growth as a whole.

The numbers

Before we look into the figures themselves, keep in mind that we are looking at a guest figure which is at best a proxy for revenue. We don’t know the revenue mix of the guest stays, for example, meaning that Airbnb could have seen a 10% drop in per-guest revenue this New Year’s Eve — even with more guest stays — and we’d have no idea.

So, the cliche about grains of salt and taking, please.

But as more guests tends to mean more rentals which points towards more revenue, the New Year’s Eve figures are useful as we work to understand how quickly Airbnb is growing now compared to how fast it grew in the past. The faster the company is expanding today, the more it’s worth. And given recent news that the company has ditched profitability in favor of boosting its sales and marketing spend (leading to sharp, regular deficits in its quarterly results), how fast Airbnb can grow through higher spend is a key question for the highly-backed, San Francisco-based private company.

Here’s the tally of guest stays in Airbnb’s during New Years Eve (data via CNBC, Jon Erlichman, Airbnb), and their resulting year-over-year growth rates:

2009: 1,4002010: 6,000 (+329%)2011: 3,1000 (+417%)2012: 108,000 (248%)2013: 250,000 (+131%)2014: 540,000 (+116%)2015: 1,100,000 (+104%)2016: 2,000,000 (+82%)2017: 3,000,000 (+50%)2018: 3,700,000 (+23%)2019: 4,500,000 (+22%)

In chart form, that looks like this:

Let’s talk about a few things that stand out. First is that the company’s growth rate managed to stay over 100% for as long as it did. In case you’re a SaaS fan, what Airbnb pulled off in its early years (again, using this fun proxy for revenue growth) was far better than a triple-triple-double-double-double.

Next, the company’s growth rate in percentage terms has slowed dramatically, including in 2019. At the same time the firm managed to re-accelerate its gross guest growth in 2019. In numerical terms, Airbnb added 1,000,000 New Year’s Eve guest stays in 2017, 700,000 in 2018, and 800,000 in 2019. So 2019’s gross adds was not a record, but it was a better result than its year-ago tally.

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today, the last day of 2019, we’re taking a second look at Boston. Regular readers of this column will recall that we recently took a peek at Boston’s startup ecosystem, and that we compiled a short countdown of the largest rounds that took place this year in Utah. Today we’re doing the latter with the former.

What follows is a countdown of Boston’s seven largest venture rounds from the year, including details concerning what the company does and who backed it. We’re also taking a shot after each entry at where we think the companies are on the path to going public.

As before, we’re using Crunchbase data for this project (here). And we’re only looking at venture rounds, so no post-IPO action, no grants, no secondaries, no debt, and no private equity-style buyouts.

Ready? Let’s have some fun.

Countdown

Boston has produced a number of big exits in recent years, like Carbon Black’s IPO, DraftKings’ impending kinda-IPO, Cayan’s billion-dollar exit, and SimpliVity’s huge sale to HP. Despite that, however, Boston is often pigeon-holed as a biotech hotbed with little technology that folks from San Francisco can understand. That’s not really fair, it turns out. There’s plenty of SaaS in Boston.

As you read the list, keep tabs on what percent of the companies included you were already familiar with. These are startups that will to take up more and more media attention as they march towards the public markets. It’s better to know them now than later.

Following the pattern set with Utah, we’ll start at the smallest round of our group and then count up to the largest.

7. Motif FoodWorks’ $90 million Series A

We could actually call the Motif FoodWorks‘ Series A a $117.5 million round as it came in two parts. However, the first tranche was $90 million total and landed in 2019 so that’s our selection for the uses of this post. The company is backed by Fonterra Ventures, Louis Dreyfus Corp, and General Atlantic.

Motif works in the alternative food space, creating things like fake meat and alt-dairy. Given the meteoric rise of Beyond Meat and Impossible Food’s big year, the space is hot. Lots of folks want to eat less meat for ethical or ecological reasons (often the two intertwine). That demand is powering a number of companies forward. Motif is riding a powerful wave.

The company’s known raised capital is encompassed in a large, early-stage round. That means that we won’t see an S-1 from this company for a long, long time.

6. Klaviyo’s $150 million Series B

An email marketing and analytics company, Klaviyo gets point for having a pricing page that actually makes sense — a rarity in the enterprise software world.

The Boston-based company was founded in 2012 and, according to Crunchbase data, has raised a total of $158.5 million. It raised just $8.5 million in total (across a small Seed round and a modest Series A) before its mega-round. How did it manage to raise such an enormous infusion in one go? As TechCrunch reported when the round was announced in April of this year:

The company is growing in leaps and bounds. It currently has 12,000 customers. To put that into perspective, it had just 1,000 at the end of 2016 and 5,000 at the end of 2017.

That will get the attention of anyone with a checkbook. The Summit Partners and Astral Capital-backed company has huge capital reserves for what we presume is the first time in its life. That means it’s not going public any time soon, even if our back-of-the-napkin math puts it comfortably over the $100 million ARR mark (warning: estimates were used in the creation of that number).

5. ezCater’s $150 million Series D

ezCater is an online catering marketplace. That’s an attractive business, it turns out, as evinced by the Boston company’s funding history. The startup has raised over $300 million to date according to Crunchbase, including capital from Insight Partners, ICONIQ Capital, Wellington Management, GIC, and Lightspeed.

The company’s 2019 $150 million Series D-1 that valued the company at $1.25 billion wasn’t its only nine-figure round; ezCater’s 2018 Series D was also over the mark, weighing in at $100 million.

When might the Northeast unicorn go public? An interview earlier this year put 2021 on the map as a target for the startup. That’s ages away from now, sadly, as I’d love to know how the company’s gross margin have changed since it started raising venture capital in huge gulps.

4. Cybereason’s $200 million Series E

Cybereason competes with CrowdStrike. That’s a good space to play in as CrowStrike went public earlier this year, and it went pretty well. That fact makes the Boston’s endpoint security shop’s $200 million investment pretty easy to understand. Indeed, CrowdStrike went public to great effect in June of 2019; Cybereason announced its huge round two months later in August. Surprise.

As far as backing goes, Cybereason has friends at SoftBank, with the Japanese conglomerate leading its Series C, D, and E rounds. Prior leads include CRV and Spark Capital.

The market is hot for SaaS-y security companies, meaning that there is natural pressure on Cybereason to go public. The firm, worth a flat $1.0 billion post-money after its latest round, is therefore an obvious IPO candidate for 2020. If it has the guts, that is. With SoftBank in your corner, there’s probably always another $100 million lying around you can snap up to avoid filing. (More from CrowdStrike’s CEO coming later this week on the 2019 and 2020 IPO markets, by the way. Stay tuned.)

3. DataRobot’s $206 million Series E

DataRobot does enterprise AI, allowing companies to use computer intelligence to help their flesh-and-blood staffers do more, more quickly. That’s the gist I got from learning what I could this morning, but as with all things AI I cannot tell you what’s real and what’s not.

Given its investor list, though, I’d bet that DataRobot is onto something. New Enterprise Associates led its 2014, 2016, and 2017 Series A, B, and C rounds. Meritech and Sapphire took over at the Series D, with Sapphire heroing DataRobot’s $206 million Series E. That round creatively valued the firm at, you guessed it, $1.0 billion according to Crunchbase.

DataRobot is hiring like mad (343 open positions as of this morning) and buying other companies (three in 2019). Flush with its largest round ever, I don’t see the company in a hurry to go public. That means no 2020 debut unless it’s monetizing faster than expected.

InsightFinder, a startup from North Carolina based on 15 years of academic research, wants to bring machine learning to system monitoring to automatically identify and fix common issues. Today, the company announced a $2 million seed round.

​IDEA Fund Partners, a VC out of Durham, N.C.,​ led the round, with participation from ​Eight Roads Ventures​ and Acadia Woods Partners. The company was founded by North Carolina State University professor Helen Gu, who spent 15 years researching this problem before launching the startup in 2015.

Gu also announced that she had brought on former Distil Networks co-founder and CEO Rami Essaid to be chief operating officer. Essaid, who sold his company earlier this year, says his new company focuses on taking a proactive approach to application and infrastructure monitoring.

“We found that these problems happen to be repeatable, and the signals are there. We use artificial intelligence to predict and get out ahead of these issues,” he said. He adds that it’s about using technology to be proactive, and he says that today the software can prevent about half of the issues before they even become problems.

If you’re thinking that this sounds a lot like what Splunk, New Relic and Datadog are doing, you wouldn’t be wrong, but Essaid says that these products take a siloed look at one part of the company technology stack, whereas InsightFinder can act as a layer on top of these solutions to help companies reduce alert noise, track a problem when there are multiple alerts flashing and completely automate issue resolution when possible.

“It’s the only company that can actually take a lot of signals and use them to predict when something’s going to go bad. It doesn’t just help you reduce the alerts and help you find the problem faster, it actually takes all of that data and can crunch it using artificial intelligence to predict and prevent [problems], which nobody else right now is able to do,” Essaid said.

For now, the software is installed on-prem at its current set of customers, but the startup plans to create a SaaS version of the product in 2020 to make it accessible to more customers.

The company launched in 2015, and has been building out the product using a couple of National Science Foundation grants before this investment. Essaid says the product is in use today in 10 large companies (which he can’t name yet), but it doesn’t have any true go-to-market motion. The startup intends to use this investment to begin to develop that in 2020.

Shipfix, a relatively new startup aiming to drag the dry cargo shipping industry into the digital age, has raised $4.5 million in seed funding.

Leading the round is Idinvest Partners, with participation from Kima Ventures, The Family, Bpifrance and strategic business angels. The company was founded in December 2018 by Serge Alleyne (CEO) and Antoine Grisay (COO), and launched just two months ago.

“We’re trying to fix the email overload for everybody involved in the process of fixing a dry cargo ship by providing a comprehensive market monitor,” Alleyne tells TechCrunch.

“We’re also producing data-driven insights that are profoundly missing in the bulk/break-bulk space. Actually the last revolution of the dry cargo industry was email, and so far people still rely on indices based on a panel of brokers while all the data is available in emails.”

To solve this, Alleyne says that Shipfix connects to its clients’ email to extract and anonymously aggregate “billions of data points using deep learning technology.”

The idea is that, rather than spending hours scrolling through your inbox every morning to take the pulse of the market, you can search and filter structured market offers instantly via Shipfix.

In addition, you can browse what Alleyne calls “augmented directories” (ships, ports, companies and people available within emails and signatures — information that isn’t typically available on LinkedIn), and access data-driven benchmarks and indices.

Shipfix customers are primarily anyone chartering/fixing a ship, such as charterers, ship owners, ship operators, freight forwarders and “lots of brokers.”

However, longer term, the startup plans to onboard commodity traders, insurers, banks, governments and investment firms, based on the granular benchmarks and indices it is building.

“We cover 430 cargo categories from salt, sand, iron ore, fertilizers, grain, steel, etc., and forecasting market pressures around the globe… [is useful] for everybody involved within the commodities space,” adds the Shipfix co-founder.

Meanwhile, the company currently employs 15 people, including senior engineers, shipping professionals, data scientists and analysts. The team is mostly remote-based and spread across seven cities, with offices in London, Paris and Toulouse.

Venture capital investment exploded across a number of geographies in 2019 despite the constant threat of an economic downturn.

San Francisco, of course, remains the startup epicenter of the world, shutting out all other geographies when it comes to capital invested. Still, other regions continue to grow, raking in more capital this year than ever.

In Utah, a new hotbed for startups, companies like Weave, Divvy and MX Technology raised a collective $370 million from private market investors. In the Northeast, New York City experienced record-breaking deal volume with median deal sizes climbing steadily. Boston is closing out the decade with at least 10 deals larger than $100 million announced this year alone. And in the lovely Pacific Northwest, home to tech heavyweights Amazon and Microsoft, Seattle is experiencing an uptick in VC interest in what could be a sign the town is finally reaching its full potential.

Seattle startups raised a total of $3.5 billion in VC funding across roughly 375 deals this year, according to data collected by PitchBook. That’s up from $3 billion in 2018 across 346 deals and a meager $1.7 billion in 2017 across 348 deals. Much of Seattle’s recent growth can be attributed to a few fast-growing businesses.

Convoy, the digital freight network that connects truckers with shippers, closed a $400 million round last month bringing its valuation to $2.75 billion. The deal was remarkable for a number of reasons. Firstly, it was the largest venture round for a Seattle-based company in a decade, PitchBook claims. And it pushed Convoy to the top of the list of the most valuable companies in the city, surpassing OfferUp, which raised a sizable Series D in 2018 at a $1.4 billion valuation.

Convoy has managed to attract a slew of high-profile investors, including Amazon’s Jeff Bezos, Salesforce CEO Marc Benioff and even U2’s Bono and the Edge. Since it was founded in 2015, the business has raised a total of more than $668 million.

Remitly, another Seattle-headquartered business, has helped bolster Seattle’s startup ecosystem. The fintech company focused on international money transfer raised a $135 million Series E led by Generation Investment Management, and $85 million in debt from Barclays, Bridge Bank, Goldman Sachs and Silicon Valley Bank earlier this year. Owl Rock Capital, Princeville Global,  Prudential Financial, Schroder & Co Bank AG and Top Tier Capital Partners, and previous investors DN Capital, Naspers’ PayU and Stripes Group also participated in the equity round, which valued Remitly at nearly $1 billion.

Up-and-coming startups, including co-working space provider The Riveter, real estate business Modus and same-day delivery service Dolly, have recently attracted investment too.

A number of other factors have contributed to Seattle’s long-awaited rise in venture activity. Top-performing companies like Stripe, Airbnb and Dropbox have established engineering offices in Seattle, as has Uber, Twitter, Facebook, Disney and many others. This, of course, has attracted copious engineers, a key ingredient to building a successful tech hub. Plus, the pipeline of engineers provided by the nearby University of Washington (shout-out to my alma mater) means there’s no shortage of brainiacs.

There’s long been plenty of smart people in Seattle, mostly working at Microsoft and Amazon, however. The issue has been a shortage of entrepreneurs, or those willing to exit a well-paying gig in favor of a risky venture. Fortunately for Seattle venture capitalists, new efforts have been made to entice corporate workers to the startup universe. Pioneer Square Labs, which I profiled earlier this year, is a prime example of this movement. On a mission to champion Seattle’s unique entrepreneurial DNA, Pioneer Square Labs cropped up in 2015 to create, launch and fund technology companies headquartered in the Pacific Northwest.

Operating under the startup studio model, PSL’s team of former founders and venture capitalists, including Rover and Mighty AI founder Greg Gottesman, collaborate to craft and incubate startup ideas, then recruit a founding CEO from their network of entrepreneurs to lead the business. Seattle is home to two of the most valuable businesses in the world, but it has not created as many founders as anticipated. PSL hopes that by removing some of the risk, it can encourage prospective founders, like Boundless CEO Xiao Wang, a former senior product manager at Amazon, to build.

“The studio model lends itself really well to people who are 99% there, thinking ‘damn, I want to start a company,’ ” PSL co-founder Ben Gilbert said in March. “These are people that are incredible entrepreneurs but if not for the studio as a catalyst, they may not have [left].”

Boundless is one of several successful PSL spin-outs. The business, which helps families navigate the convoluted green card process, raised a $7.8 million Series A led by Foundry Group earlier this year, with participation from existing investors Trilogy Equity Partners, PSL, Two Sigma Ventures and Founders’ Co-Op.

Years-old institutional funds like Seattle’s Madrona Venture Group have done their part to bolster the Seattle startup community too. Madrona raised a $100 million Acceleration Fund earlier this year, and although it plans to look beyond its backyard for its newest deals, the firm continues to be one of the largest supporters of Pacific Northwest upstarts. Founded in 1995, Madrona’s portfolio includes Amazon, Mighty AI, UiPath, Branch and more.

Voyager Capital, another Seattle-based VC, also raised another $100 million this year to invest in the PNW. Maveron, a venture capital fund co-founded by Starbucks mastermind Howard Schultz, closed on another $180 million to invest in early-stage consumer startups in May. And new efforts like Flying Fish Partners have been busy deploying capital to promising local companies.

There’s a lot more to say about all this. Like the growing role of deep-pocketed angel investors in Seattle have in expanding the startup ecosystem, or the non-local investors, like Silicon Valley’s best, who’ve funneled cash into Seattle’s talent. In short, Seattle deal activity is finally climbing thanks to top talent, new accelerator models and several refueled venture funds. Now we wait to see how the Seattle startup community leverages this growth period and what startups emerge on top.

We love parties almost as much as we love startups, but we go absolutely bonkers for a hot startup/party mashup. That’s why we’re returning to host our 3rd Annual TechCrunch Winter Party in San Francisco on Friday, February 7. Even better news, party-goers — additional (the second batch) coveted tickets to this wild winter romp are available now. Better get your tickets while you can.

Last year’s inaugural event was a huge success, as nearly 1,000 of Silicon Valley’s brightest minds came to relax, connect and celebrate the entrepreneurial spirit of the startup community — and cast a keen eye over some promising startups.

This year’s soiree takes place at Galvanize and features tasty libations, delicious hors d’oeuvres and engaging conversation. That sounds so very civilized, right? Well, don’t dry clean your stuffed shirt just yet, because we’ll have plenty of party games and activities, giveaways and fun surprises. And, of course, plenty of photo ops, baby!

Galvanize may be a multi-level venue, but the space is still limited — as are the tickets. We’re rolling them out in batches over the next few weeks, so keep checking back if you can’t snag a ticket.

Here are the pertinent Winter Party details:

When: Friday, February 7, 6:00 p.m. – 9:00 p.m.
Where: Galvanize, 44 Tehama St., San Francisco, CA 94105
Ticket price: $85 (buy them here)

Here’s another great idea. Why just mingle and schmooze when you can mingle, schmooze and demo your early-stage startup in front of hundreds of the Valley’s top star-makers? Buy a demo table for $1,500 (the price also includes four attendee tickets). Demo tables are limited, so act now before other founders snatch ’em up.

Of course, no TechCrunch party is complete without plenty of awesome prizes, including TC swag and tickets to Disrupt San Francisco 2020. Come on out for a great midwinter’s night of relaxed connection, fun and opportunity. Get your tickets to the 3rd Annual TechCrunch Winter Party at Galvanize today.

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

It’s the second to last day of 2019, meaning we’re very nearly out of time this year; our space for repretrospection is quickly coming to a close. Before we do run out of hours, however, I wanted to peek at some data that former Kleiner Perkins investor and Packagd founder Eric Feng recently compiled.

Feng dug into the changing ratio between enterprise-focused Seed deals and consumer-oriented Seed investments over the past decade or so, including 2019. The consumer-enterprise split, a loose divide that cleaves the startup world into two somewhat-neat buckets, has flipped. Feng’s data details a change in the majority, with startups selling to other companies raising more Seed deals than upstarts trying to build a customer base amongst folks like ourselves in 2019.

The change matters. As we continue to explore new unicorn creation (quick) and the pace of unicorn exits (comparatively slow), it’s also worth keeping an eye on the other end of the startup lifecycle. After all, what happens with Seed deals today will turn into changes to the unicorn market in years to come.

Let’s peek at a key chart from Feng, talk about Seed deal volume more generally, and close by positing a few reasons (only one of which is Snap’s IPO) as to why the market has changed as much as it has for the earliest stage of startup investing.

Changes

Feng’s piece, which you can read here, tracks the investment patterns of startup accelerator Y Combinator against its market. We care more about total deal volume, but I can’t recommend the dataset enough if you have the time.

Concerning the universe of Seed deals, here’s Feng’s key chart:

As you can see, the chart shows that in the pre-2008 era, Seed deals were amply skewed towards consumer-focused Seed investments. A new normal was found after the 2008 crisis, with just a smidge under 75% of Seed deals focused on selling to the masses for nearly a decade.

In 2016, however, a new trend emerged: a gradual decline in consumer Seed deals and a shift towards enterprise investments.

This became more pronounced in 2017, sharper in 2018, and by 2019 fewer than half of Seed deals focused on consumers. Now, more than half are targeting other companies as their future customer base. (Y Combinator, as Feng notes, got there first, making a majority of investments into enterprise startups since 2010, with just a few outlying classes.)

This flip comes as Seed deals sit at the 5,000-per-quarter mark. As Crunchbase News published as Q3 2019 ended, global Seed volume is strong:

So, we’re seeing a healthy number of deals as the consumer-enterprise ratio changes. This means that the change to more enterprise deals as a portion of all Seed investments isn’t predicated on their number holding steady while Seed deals dried up. Instead, enterprise deals are taking a rising share while volume appears healthy.

Now we get to the fun stuff; why is this happening?

Blame SaaS

As with many trends long in the making, there is no single reason why Seed investors have changed up their investing patterns. Instead, there are likely a myriad that added up to the eventual change. I’m going to ping a number of Seed investors this week to get some more input for us to chew on, but there are some obvious candidates that we can discuss today.

In no particular order, here are a few:

Snap’s IPO: Snap went public in early 2017 at $17 per share. Its equity quickly spiked to into the high 20s. By July of that same year, Snap slipped under its IPO price. Its high-growth, high-spend model was under attack by both high costs and slim gross margins. Snap then went into a multi-year purgatory before returning to form — somewhat — in 2019. It’s not great for a category’s investment pace if one of its most prominent companies stumble very publicly, especially for Seed investors who make the riskiest bets in venture.

2019 brought more global attention to Africa’s tech scene than perhaps any previous year.

A high-profile IPO, visits by both Jacks (Ma and Dorsey) and big Chinese startup investment energized that.

The last 12 months served as a grande finale to 10 years that saw triple-digit increases in startup formation and VC on the continent.

Here’s an overview of the 2019 market events that captured attention and capped off a decade of rapid growth in African tech.

IPOs

The story of the year is the April IPO on the NYSE of Pan-African e-commerce company Jumia. This was the first listing of a VC-backed tech company operating in Africa on a major global exchange —  which brought its own unpredictability.

Founded in 2012, Jumia pioneered much of its infrastructure to sell goods to consumers online in Africa.

With Nigeria as its base market, the Rocket Internet-backed company created accompanying delivery and payments services and went on to expand online verticals into 14 African countries (though it recently exited a few). Jumia now sells everything from mobile phones to diapers, and offers online services such as food-delivery and classifieds.

Seven years after its operational launch, Jumia’s stock debut kicked off with fanfare in 2019, only to be followed by volatility.

The online retailer gained investor confidence out of the gate, more than doubling its $14.95 opening share price post-IPO.

That lasted until May, when Jumia’s stock came under attack from short-seller Andrew Left, whose firm Citron Research issued a report accusing the company of fraud. The American activist investor’s case was bolstered, in part, by a debate that played out across Africa’s tech ecosystem on Jumia’s legitimacy as an African startup, given its (primarily) European senior management.

The entire affair was further complicated by Jumia’s second-quarter earnings call when the company disclosed a fraud perpetrated by some of its employees and sales agents. Jumia’s CEO Sacha Poignonnec emphasized the matter was closed, financially marginal and not the same as Andrew Left’s short-sell claims.

Whatever the balance, Jumia’s 2019 ups and downs cast a cloud over its stock with investors. Since the company’s third-quarter earnings-call, Jumia’s NYSE share-price has lingered at around $6 — less than half of its original $14.95 opening, and roughly 80% lower than its high.

Even with Jumia’s post-IPO rocky road, the continent’s leading e-commerce company still has a heap of capital and is on pace to generate more than $100 million in revenues in 2019 (albeit with big losses).

The company plans to reduce costs by generating more revenue from higher-margin internet services, such as payments and classifieds.

There’s a fairly simple equation for Jumia to rebuild shareholder confidence in 2020: avoid scandals and increase revenues over losses. And now that the company is publicly traded — with financial reporting requirements — there’ll be four earnings calls a year to evaluate Jumia’s progress.

Jumia may not be the continent’s standout IPO for much longer. Events in 2019 point to Interswitch becoming the second African digital company to list on a global exchange in 2020. The Nigerian fintech firm confirmed to TechCrunch in November it had reached a billion-dollar unicorn valuation, after a (reported) $200 million investment by Visa.

Founded in 2002 by Mitchell Elegbe, Interswitch created much of the initial infrastructure to digitize Nigeria’s (then) predominantly cash-based economy. Interswitch has been teasing a public listing since 2016, but delayed it for various reasons. With the company’s billion-dollar valuation in 2019, that pause is likely to end.

“An [Interswitch] IPO is still very much in the cards; likely sometime in the first half of 2020,” a source with knowledge of the situation told TechCrunch.

China-Africa goes digital

2019 was the year when Chinese actors pivoted to African tech. China is known for its strategic relationship with Africa, based (largely) on trade and infrastructure. Over the last 10 years, the country has been less engaged in the continent’s digital scene.

That was until a torrent of investment and partnerships this past year.

July saw Chinese-owned Opera raise $50 million in venture spending to support its growing West African digital commercial network, which includes browser, payments and ride-hail services.

In August, San Francisco and Lagos-based fintech startup Flutterwave partnered with Chinese e-commerce company Alibaba’s Alipay to offer digital payments between Africa and China.

In September, China’s Transsion — the largest smartphone seller in Africa — listed in an IPO on Shanghai’s new STAR Market. The company raised ≈ $394 million, some of which it is directing toward venture funding and operational expansion in Africa.

The last quarter of 2019 brought a November surprise from China in African tech. More than 15 Chinese investors placed over $240 million in three rounds. Transsion-backed consumer payments startup PalmPay raised a $40 million seed, stating its goal to become “Africa’s largest financial services platform.”

Chinese investors also backed Opera-owned OPay’s $120 million raise and East-African trucking logistics company Lori Systems’ (reported) $30 million Series B.

In the new year, TechCrunch will continue to cover the business arc of this surge in Chinese tech investment in Africa. There’ll surely be a number of fresh macro news points to develop, given the debate (and critique) of China’s engagement with Africa.

Nigeria and fintech

On debate, the case could be made that 2019 was the year when Nigeria become Africa’s unofficial capital for fintech investment and digital finance startups.

Kenya has held this title hereto, with the local success and global acclaim of its M-Pesa mobile-money product. But more founders and VCs are opting for Nigeria as the epicenter for digital finance growth on the continent.

A rough tally of 2019 TechCrunch coverage — including previously mentioned rounds — pegs fintech-related investment in the West African country at around $400 million over the last 12 months. That’s equivalent to roughly one-third of all startup VC raised for the entire continent in 2018, according to Partech stats.

From OPay to PalmPay to Visa — startups, big finance companies and investors are making Nigeria home-base for their digital finance operations and Africa expansion strategies.

The founder of early-stage payment startup ChipperCash, Ham Serunjogi, explained the imperative to operating there. “Nigeria is the largest economy and most populous country in Africa. Its fintech industry is one of the most advanced in Africa, up there with Kenya  and South Africa,” he told TechCrunch in May.

When all the 2019 VC numbers are counted, it will be worth matching up fintech stats for Nigeria to Kenya to see how the countries compared.

Acquisitions

Tech acquisitions continue to be somewhat rare in Africa, but there were several to note in 2019. Two of the continent’s powerhouse tech incubators joined forces in September, when Nigerian innovation center and seed-fund CcHub acquired Nairobi-based iHub, for an undisclosed amount.

The acquisition brought together Africa’s most powerful tech hubs by membership networks, volume of programs, startups incubated and global visibility. It also elevated the standing of CcHub’s Bosun Tijani across Africa’s tech ecosystem, as the CEO of the new joint entity, which also has a VC arm.

In other acquisition activity, French television company Canal+ acquired the ROK film studio from Nigerian VOD company IROKOtv for an undisclosed amount. The deal put ROK founder and producer Mary Njoku in charge of a new organization with larger scope and resources.

Many outside Africa aren’t aware that Nigeria’s Nollywood is the Hollywood of the continent, and one of the largest film industries in the world (by production volume). Canal+ told TechCrunch it looks to bring Mary and the Nollywood production ethos to produce content in French-speaking African countries.

Other notable 2019 African tech takeovers included Kenyan internet company BRCK’s acquisition of ISP Surf, Nigerian digital-lending startup OneFi’s Amplify buy and Merck KGaa’s purchase of Kenya-based online healthtech company ConnectMed.

Moto ride-hail mania

In 2019, Africa’s motorcycle ride-hail market — worth an estimated $4 billion — saw a flurry of investment and expansion by startups looking to scale on-demand taxi services. Uber and Bolt got into the motorcycle taxi business in Africa in 2018.

A number of local and foreign startups have continued to grow in key countries, such as Nigeria, Uganda and Kenya.

A battle for funding and market share emerged in Nigeria in 2019, between key moto ride-hail startups MAX.ng, Gokada and Opera-owned ORide.

The on-demand motorcycle market in Africa has attracted foreign investment and moved toward EV development. In May, MAX.ng raised a $7 million Series A round with participation from Yamaha and is using a portion to pilot renewable energy powered e-motorcycles in Africa.

In August, the government of Rwanda announced a national policy to phase out gas-motorcycle taxis altogether in favor of e-motos, in partnership with early-stage EV startup Ampersand.

New funds

The past year saw several new funding initiatives for Africa’s startups. Senegalese VC investor Marieme Diop spearheaded Dakar Network Angels, a seed-fund for startups in French-speaking Africa — or 24 of the continent’s 54 countries.

Africinvest teamed up with Cathay Innovation to announce the Cathay Africinvest Innovation Fund, a $100+ million capital pool aimed at Series A to C-stage startup investments in fintech, logistics, AI, ag tech and education tech.

Accion Venture Lab launched a $24 million fintech fund open to African startups.

And Naspers offered more details on who can pitch to its 1.4 billion rand (≈$100 million) Naspers Foundry fund, which made its first investment in online cleaning services company SweepSouth.

Closed up shop

Like any tech ecosystem, not every startup in Africa killed it or even continued to tread water in 2019. Two e-commerce companies — DealDey in Nigeria and Afrimarket in Ivory Coast — closed up digital shop.

Southern Africa’s Econet Media shut down its Kwese TV digital entertainment business in August.

And South Africa-based, Pan African-focused cryptocurrency payment startup Wala ceased operations in June. Founder Tricia Martinez named the continent’s poor infrastructure as one of the culprits to shutting down. A possible signal to the startup’s demise could have been its 2017 ICO, where Wala netted only 4% of its $30 million token offering.

Africa’s startups go global

2019 saw more startups expand to new markets abroad products and business models developed in Africa. In March, FlexClub — a South African venture that matches investors and drivers to cars for ride-hailing services — announced its expansion to Mexico in a partnership with Uber.

In May, Extra Crunch profiled three African-founded fintech startups — Flutterwave, Migo and ChipperCash — developing their business models strategically in Africa toward plans to expand globally.

By December, Migo (formerly branded Mines) had announced its expansion to Brazil on a $20 million Series B raise.

2020 and beyond

As we look to what could come in the new year and decade for African tech, it’s telling to look back. Ten years ago, there were a lot of “if” questions on whether the continent’s ecosystem could produce certain events: billion-dollar startup valuations, IPOs on major exchanges, global expansion, investment from the world’s top VCs.

All those questionable events of the past have become reality in African tech, even if some of them are still in low abundance.

There’s no crystal ball for any innovation ecosystem — not the least Africa’s — but there are several things I’ll be on the lookout for in 2020 and beyond.

In the near term I’ll start with what Twitter/Square CEO Jack Dorsey may do around Bitcoin and cryptocurrency on his return to Africa (lookout for an upcoming TechCrunch feature on this).

I’ll also follow the next-phase of e-commerce in Africa, which could pit Jumia more competitively against DHL’s Africa eShop, Opera and China’s Alibaba (which hasn’t yet entered Africa in full).

On a longer-term basis, a development to follow is how the continent’s first wave of millionaire and billionaire tech-founders could disrupt 21st century dynamics in Africa around politics, power and philanthropy —  hopefully for the better.

More notable 2019 Africa-related coverage @TechCrunch

Nigeria’s #StopRobbingUs campaign could spur tech advocacy group, CEOs sayAfrica can list more gazelles at home than unicorn IPOs abroadKenya’s Twiga Foods eyes West Africa after $30M raise led by GoldmanAfrica-focused Andela cuts 400 staff as it confirms $50M in revenueFacebook’s latest account purge exposes Africa’s misinformation problemEthiopia’s bid to become an African startup hub hinges on connectivityLessons from M-Pesa for Africa’s new VC-rich fintech startups

Grab and Singtel, one of the largest telecoms in Singapore, announced today that they are applying for a digital full bank license together. If approved, the license will allow them to offer simple credit and investment products, before progressing to a full-functioning bank if they meet the Monetary Authority of Singapore’s (MAS) criteria.

Grab will hold a 60% stake in the consortium, with Singtel holding the other 40%. A joint statement said the companies are “committed to contributing to the financial services sector with a differentiated offering that addresses the unmet and underserved needs of consumer and enterprise segments in Singapore,” including SMEs that need access to credit. Securing working capital is a major pain point across Southeast Asia, with several startup and financial institutions working on new tools to gauge creditworthiness and manage loans.

Grab launched in 2012 as a ridesharing company, but now bills itself as “Southeast Asia’s leading super app,” with an app that provides a wide array of service, including transportation, logistics, food delivery, ticket and hotel booking and financial services, all through one portal.

It entered financial services in 2016 with the introduction of GrabPay Wallet, a digital wallet, before launching Grab Financial Group in 2019. Grab Financial Group’s services include online payments, lending and insurance products that it says reaches 100 million users across Southeast Asia.

In a press statement, Grab Financial Group senior managing director Reuben Lai said the consortium’s plan is to “build a truly customer-centric digital bank that will deliver a variety of banking and financial services that are accessible, transparent and affordable.”

MAS announced in June that it will issue up to two digital full bank licenses and three digital wholesale bank licenses, as part of a bid to liberalize Singapore’s banking sector.

Indian tech startups have never had it so good.

Local tech startups in the nation raised $14.5 billion in 2019, beating their previous best of $10.6 billion last year, according to research firm Tracxn .

Tech startups in India this year participated in 1,185 financing rounds — 459 of those were Series A or later rounds — from 817 investors.

Early-stage startups — those participating in angel or pre-Series A financing round — raised $6.9 billion this year, easily surpassing last year’s $3.3 billion figure, according to a report by venture debt firm InnoVen Capital.

According to InnoVen’s report, early-stage startups that have typically struggled to attract investors saw a 22% year-over-year increase in the number of financing deals they took part in this year. Cumulatively, at $2.6 million, their valuation also increased by 15% from last year.

Overall, there were 81 financing deals of size between $25 million and $100 million, up from 56 last year and 36 the year before, and 27 rounds above $100 million, up from 17 in 2018 and and nine in 2017, Tracxn told TechCrunch.

Also in 2019, 128 startups in India got acquired, four got publicly listed and nine became unicorns. This year, Indian tech startups also attracted a record number of international investors, according to Tracxn.

This year’s fundraise further moves the nation’s burgeoning startup space on a path of steady growth.

Since 2016, when tech startups accumulated just $4.3 billion — down from $7.9 billion the year before — flow of capital has increased significantly in the ecosystem. In 2017, Indian startups raised $10.4 billion, per Tracxn.

“The decade has seen an impressive 25x growth from a tiny $550 million in 2010 to $14.5 billion in 2019 in terms of the total funding raised by the startups,” said Tracxn.

What’s equally promising about Indian startups is the challenges they are beginning to tackle today, said Dev Khare, a partner at VC fund Lightspeed Venture Partners, in a recent interview with TechCrunch.

In 2014 and 2015, startups were largely focused on building e-commerce solutions and replicating ideas that worked in Western markets. But today, they are tackling a wide-range of categories and opportunities and building some solutions that have not been attempted in any other market, he said.

Tracxn’s analysis found that lodging startups raised about $1.7 billion this year — thanks to Oyo alone bagging $1.5 billion, followed by logistics startups such as Elastic Run, Delhivery and Ecom Express that secured $641 million.

Also, 176 horizontal marketplaces, more than 150 education learning apps, over 160 fintech startups, over 120 trucking marketplaces, 82 ride-hailing services, 42 insurance platforms, 33 used car listing providers and 13 startups that are helping businesses and individuals access working capital secured funding this year. Fintech startups alone raised $3.2 billion this year, more than startups operating in any other category, said Tracxn.

The investors

Sequoia Capital, with more than 50 investments — or co-investments — was the most active venture capital fund for Indian tech startups this year. (Rajan Anandan, former executive in charge of Google’s business in India and Southeast Asia, joined Sequoia Capital India as a managing director in April.) Accel, Tiger Global Management, Blume Ventures and Chiratae Ventures were the other top four VCs.

Steadview Capital, with nine investments in startups, including ride-hailing service Ola, education app Unacademy and fintech startup BharatPe, led the way among private equity funds. General Atlantic, which invested in NoBroker and recently turned profitable edtech startup Byju’s, invested in four startups. FMO, Sabre Partners India and CDC Group each invested in three startups.

Venture Catalysts, with more than 40 investments, including in HomeCapital and Blowhorn, was the top accelerator or incubator in India this year. Y Combinator, with over 25 investments, Sequoia Capital’s Surge, Axilor Ventures and Techstars were also very active this year.

Indian tech startups also attracted a number of direct investments from top corporates and banks this year. Goldman Sachs, which earlier this month invested in fintech startup ZestMoney, overall made eight investments this year. Among others, Facebook made its first investment in an Indian startup — social-commerce firm Meesho — and Twitter led a $100 million financing round in local social networking app ShareChat.