Greg Robertson: We usually sell about the seven-year mark. We had a hit product called Cloud CMA, our flagship product. There are about 1.3 million realtors in the United States. We have site license...
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The TechCrunch Exchange newsletter just launched. Soon only a partial version will hit the site, so sign up to get the full download.
Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter for your weekend enjoyment. It’s broadly based on the daily column that appears on Extra Crunch, but free. And it’s made just for you.
You can sign up for the newsletter here. With that out of the way, let’s talk money, upstart companies and the latest spicy IPO rumors.
If you are tired of reading about special purpose acquisition companies, or SPACs, we hear you. We’re sick of them as well. But they keep cropping up, this time in the form of a possible IPO alternative for Affirm, a fintech unicorn that has raised more than $1 billion to provide consumers with point-of-sale installment loans. (Rates from 0% to 30%, terms of up to 36 months.)
Affirm is effectively a lending company that plugs into e-commerce firms. Researching this entry I had an idea in the back of my head that Affirm had a super-neat credit system to rate users. But reading through its own FAQ and what NerdWallet has to say on the company, its methods seem somewhat pedestrian.
Regardless, distribution is key for the company, and Affirm recently linked up with Shopify. That should provide it another dose of growth. The very sort of thing that IPO investors want. The WSJ reported that Affirm could go public this year, perhaps via a SPAC, at a valuation of $5 to $10 billion.
I did my best to map out what those valuations implied, generally finding that Affirm needs to have hella loan volume to make the sort of money that a $10 billion figure implies. Of course, I was trying to make numerical sense. The stock market in 2020 is a bit more relaxed than that.
All this SPAC talk is still mostly bullshit, mind. We are seeing public debuts this year. And every single one of them that has been of note has been a traditional IPO, at least as far as I can recall. The running history of direct listings and SPAC debuts that matter is pretty slim.
Of course, Coinbase and Asana and DoorDash and Airbnb, among others, are in need of liquidity and could yet pull the trigger on a more exotic debut. Hell, Qualtrics could do something wild in its impending IPO but we doubt it will.
The biggest market news this week had little to do with startups. Instead, it came from the anti-startups, namely the largest American tech companies, which smashed their earnings reports. Alphabet actually shrank year-over-year, but it still beat expectations. Facebook and Amazon and Apple were juggernauts in the quarter.
Given the positive notes we’ve heard from startups and startup investors about how Q2 sales performance was better than expected, and is in some cases besting plans set at the start of the year, the SuperMegaTech results are not a shock.Many tech-powered companies of all maturities seem to be catching a boost.The startups that aren’t are DOA. As Freestyle Capital’s Jenny Lefcourt told TechCrunch the other week, every investor wants into the next round of startups that have caught a COVID tailwind. And precisely zero investors want into the proximate funding event for startups that haven’t.
Moving along, don’t re-invest your retirement funds just yet, but bitcoin is back over $10,000 and is currently trading for $11,300 as I write to you. Given that the price of bitcoin is a workable barometer for consumer interest, trading volume and, perhaps, development work in the crypto space, the recent market movement is good news for crypto-fans.
Turning our heads to breaking news this Friday, news was brewing that the Trump administration was looking to force ByteDance, a Chine-based mega-startup, to sell the U.S. operations of TikTok, the super-popular social app.
How? When? We don’t know, but the political and economic situation between the United States and China is getting worse, not better. How you feel about that will depend on your politics.There were 25 equity-only rounds of $50 million or more in the last week, 22 if you strip out private equity-led rounds and post-IPO investments. That’s a little over $2.6 billion in late-stage capital collected by Crunchbase in a single week. No matter what you might hear from startups stuck on the wrong side of the COVID-19 divide, money is still flowing and quickly.
Ro’s $200 million deal valuing the firm at $1.5 billion was just the fourth largest deal of the week, by our count. Traveloka, Thrive Earlier Detection and Ascendant Digital, which is a SPAC and thus earns our ire instead of praise, were next in the list.Stack Overflow’s $85 million round was the tenth largest deal of the week. Damn.
Other rounds you may have missed: $33 million for San Mateo-based Helix, Argo AI is now worth $7.5 billion after its most recent fundraising, $11 million for Brazil-focused wealth manager Magnetis, $16 million for construction-tech company Buildots and $20 million for Instrumental, my favorite round of the week,
Investment into AI-focused startups suffered in Q2, but descended from all-time highs so the numbers were still pretty ok.
On the VC topic, TechCrunch’s own Danny Crichton (he’s on the podcast with me every week) has updated the TechCrunch list with another 116 VCs that are willing to write first checks. The project has been oceans of work, so please do check it out if you have the time, or are looking to fundraise.
And, to wrap up, as always, here’s a collection of data, news and other miscellania that is worth your time from this super insane week:
DocSend data underscores that Q2 VC was not a flop. (Q2 VC coverage from The Exchange this week can be found here.)This is a hell of a look from the Facebook board. Startup crowdfunding site Republic looks back on “4 years, 200 companies, $150 million, and 700,000 members.” The Exchange is still digging into no-code, and low-code startups.PwC data on tech deal volume shows a slow Q2, while “July is off to a strong start.” Chorus.ai raised $45 million for its sales-tech service, claiming to have tripled its revenue in 2019. Does anyone have a more recent result for the company?Continuing our research-and-data-dump, this set of notes from Dave Kellogg on “Are We Due for a SaaSacre?” is worth your time.I teamed up with TechCrunch’s Lucas Matney to ask investors about investing in remote-work startups today.Moving toward the close, Redpoint VP Jamin Ball is writing a series on cloud/SaaS that I’m reading here and there. Take a peek.
And, speaking of VCs out there doing my job, Floodgate partner Iris Choi (an Equity regular) does frequent live streams that she calls Market Musings that I try to snag when I can. It’s always interesting to hear how people with more money than I do think about the market as they are ever-so-slightly more invested in its outcomes.
Excuse the pun, give yourself a hug for making it through the week, make sure to hit up the latest Equity episode and let’s all go for a run. — Alex
Editor’s note: Get this free weekly recap of TechCrunch news that any startup can use by email every Saturday morning (7am PT). Subscribe here.
German software giant SAP bought experience management platform Qualtrics for $8 billion days before the unicorn’s IPO, back in November of 2018. But last weekend it decided to spin out the experience management provider to finally go public on its own. The analysts Ron Miller talked to speculated about strategic issues on the SAP side, and concluded this was more of an internal reset combined with the financial gain from a promising offering.
Qualtrics, meanwhile, already put the Utah startup scene on the map for people around the world. Having grown strongly post-acquisition, it is now set up to be the largest IPO in state history. Here’s Alex Wilhelm with more analysis in Extra Crunch:
According to metrics from the Bessemer Cloud Index, cloud companies with growth rates of 35.5% and gross margins of 71.3% are worth around 17.3x in enterprise value compared to their annualized revenue.
Given how close Qualtrics is to that averaged set of metrics (slightly slower growth, slightly better gross margins), the 17.3x number is probably not far from what the company can achieve when it does go public. Doing the sums, $800 million times 17.3 is $13.8 billion, far more than what SAP paid for Qualtrics. (For you wonks out there, it’s doubtful that Qualtrics has much debt, though it will have lots of cash post-IPO; expect the company’s enterprise value to be a little under its future market cap.)
So, the markets are valuing cloud companies so highly today that even after SAP had to pay a huge premium to buy Qualtrics ahead of its public offering, the company is still sharply more valuable today after just two years of growth.
The tech industry is getting broken down and reformed by national governments in ways that many of its leaders do not seem to have planned for as part of scaling to the world, whether you consider TikTok’s ever-shrinking global footprint or leading tech CEOs getting called out by Congress. When you skim through the numerous headlines on these topics this week, you’ll see a very clear message in the subtext: Every startup has to think more carefully about its place in the world these days, as a matter of survival.
Big tech crushes Q2 earnings expectations
Lawmakers argue that big tech stands to benefit from the pandemic and must be regulated
Secret documents from US antitrust probe reveal big tech’s plot to control or crush the competition
Apple’s App Store commission structure called into question in antitrust hearing
Zuckerberg unconvincingly feigns ignorance of data-sucking VPN scandal
In antitrust hearing, Zuckerberg admits Facebook has copied its competition
Before buying Instagram, Zuckerberg warned employees of ‘battle’ to ‘dislodge’ competitor
Google’s Sundar Pichai grilled over ‘destroying anonymity on the internet’
Bezos ‘can’t guarantee’ no anti-competitive activity as Congress catches him flat-footed
Amazon’s hardware business doesn’t escape Congressional scrutiny
Time for TikTok:
India bans 47 apps cloning restricted Chinese services
After India and US, Japan looks to ban TikTok and other Chinese apps
Report: Microsoft in talks to buy TikTok’s US business from China’s ByteDance
The leading arguments for a Microsoft-TikTok tie-up ;)
And last but not least ominously, for large platforms…
Australia now has a template for forcing Facebook and Google to pay for news
The team at remote-first enterprise startup Seeq put together this montage of some of its remote offices.
This loosely defined subsector of SaaS went from being a somewhat mainstream idea within the startup world last year to being fully mainstream with the wider world due to the pandemic this year. But publicly traded companies have been some of the biggest beneficiaries (see previous item), and the action around earlier-stage startups has been less clear. Lucas Matney and Alex caught up with six investors who have been focused on various parts of the space to get the latest for Extra Crunch. Here’s a pithy description of fundraising trends that companies are experiencing, from Elliott Robinson, a growth-stage investor at Bessemer:
How competitive are remote-work tooling venture rounds now?
Incredibly competitive. I think one dynamic I’ve seen play out is that the basket of remote-work companies that are really high-performing right now are setting lofty price expectations well ahead of the raise. Many of these companies didn’t plan on raising in Q2/Q3, but with COVID tailwinds, they are choosing to raise at some often sight-unseen-level valuation multiples.
Are prices out of control?
I think it depends on your definition of out of control. The reality is that many of these companies are raising money off cycle from their natural fundraising date for two reasons: One, they are seeing once in a lifetime digital transformation and adoption of remote-work tooling solutions. And, two, so many investors have raised sizable funds during the last nine months that they are leaning into investing in these companies — one of the few segments that will likely continue to see tailwinds as COVID cases continue to rise again in the U.S. Other traditional software value props may face significant headwinds in a uncertain COVID world. Thus, growth equity investors are paying high multiples to get a shot at the category-defining RW app companies.
Haptics are a great sort of gee-whiz technology, but the practical future of touch-based communication is all over the place — VR devices are suddenly more interesting, touchpads less so. Devon Powers and David Parisi are academics and authors who focus on the space, and they wrote a big guest post for TechCrunch this week that sketched out some of the ups and downs of the decades-old concept. Here’s a key excerpt:
Getting haptics right remains challenging despite more than 30 years’ worth of dedicated research in the field. There is no evidence that COVID is accelerating the development of projects already in the pipeline. The fantasy of virtual touch remains seductive, but striking the golden mean between fidelity, ergonomics and cost will continue to be a challenge that can only be met through a protracted process of marketplace trial-and-error. And while haptics retains immense potential, it isn’t a magic bullet for mending the psychological effects of physical distancing.
Curiously, one promising exception is in the replacement of touchscreens using a combination of hand-tracking and midair haptic holograms, which function as button replacements. This product from Bristol-based company Ultraleap uses an array of speakers to project tangible soundwaves into the air, which provide resistance when pressed on, effectively replicating the feeling of clicking a button.
Ultraleap recently announced that it would partner with the cinema advertising company CEN to equip lobby advertising displays found in movie theaters around the U.S. with touchless haptics aimed at allowing interaction with the screen without the risks of touching one. These displays, according to Ultraleap, “will limit the spread of germs and provide safe and natural interaction with content.”
A recent study carried out by the company found that more than 80% of respondents expressed concerns over touchscreen hygiene, prompting Ultraleap to speculate that we are reaching “the end of the [public] touchscreen era.” Rather than initiate a technological change, the pandemic has provided an opportunity to push ahead on the deployment of existing technology. Touchscreens are no longer sites of naturalistic, creative interaction, but are now spaces of contagion to be avoided. Ultraleap’s version of the future would have us touching air instead of contaminated glass.
Speaking of investors, TechCrunch has been busy with a few other projects to you find the right ones faster.
First, Danny Crichton has pushed a third update to The TechCrunch List, due to the ongoing flood of recommendations. In his words: “Now using more than 2,600 founder recommendations — more than double our original dataset — we have underscored a number of the existing investors on our list as well as added 116 new investors who have been endorsed by founders as investors willing to cut against the grain and write those critical first checks and lead venture rounds.”
Check it out and filter by location, category and stage to narrow down your pitch list. If you are a founder and haven’t submitted your recommendation yet, please fill out our very brief survey. If you have questions, we put together a Frequently Asked Questions page that describes the qualifications and logistics, some of the logic behind the List and how to get in touch with us.
Second, our editor-at-large Mike Butcher is embarking on a virtual investor survey of European countries, to help Extra Crunch provide a clearer view about what’s happening in the Continent’s startup hubs in the middle of the world going crazy:
TechCrunch is embarking on a major new project to survey the venture capital investors of Europe. Over the next few weeks, we will be “zeroing-in” on Europe’s major cities, from A-Z, Amsterdam to Zurich — and many points in-between. It’s part of a broader series of surveys we’re doing to help founders find the right investors. For example, here is the recent survey of London.
Our survey will capture how each European startup hub is faring, and what changes are being wrought amongst investors by the coronavirus pandemic. We’d like to know how your city’s startup scene is evolving, how the tech sector is being impacted by COVID-19 and, generally, how your thinking will evolve from here. Our survey will only be about investors, and only the contributions of VC investors will be included. The shortlist of questions will require only brief responses, but the more you want to add, the better.
The deadline for entries is the end of next week, August 7th and you can fill it out here.
He also wanted me to let you know that he’ll resume his in-person trips as soon as allowed. (I actually made that up, but he has said as much.)
Submit your pitch deck to Disrupt 2020’s Pitch Deck Teardown
Announcing the Disrupt 2020 agenda
Talking virtual events and Disrupt with Hopin founder Johnny Boufarhat
The TechCrunch Exchange: What’s an IPO to a SPAC?— In case you haven’t checked out Alex’s new weekly email newsletter yet.
TechCrunch
Connected audio was a bad choice
Stanford students are short-circuiting VC firms by investing in their peers
Bitcoin bulls are running, as prices spike above $11K
Recruiting for diversity in VC
Build products that improve the lives of inmates
Extra Crunch
Six things venture capitalists are looking for in your pitch
VCs and startups consider HaaS model for consumer devices
Cannabis VC Karan Wadhera on why the industry, which took a hit last year, is now quietly blazing
Jesus, SaaS and digital tithing
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.
We had the full team this week: Myself, Danny and Natasha on the mics, with Chris running skipper as always.
Sadly this week we had to kick off with a correction as I am 1) dumb, and, 2) see point one. But after we got past SPAC nuances (shout-out to David Ethridge), we had a full show of good stuff, including:
Y Combinator Demo Day is going virtual, as before, and its coming iteration will also be live. The Equity crew all agree that this is the right thing to do, and probably more fun, to boot. And now the founders can sweat a live event, too! What fun.Speaking of live events going digital, Disrupt is coming up. And it is going to be great. Read more here.A group of Stanford business school students are putting together an investment vehicle to invest money into themselves, which is a good idea and something that is highly risible. Luckily, Danny and Natasha had good things to say about the effort.Ro raised $200 million, and any jokes that were inappropriate are Danny’s fault. The company’s reported $1.5 billion valuation makes the news that its competitor Hims could go public via a SPAC all the more exciting.I covered a neat round: $20 million for Instrumental, a super neat startup that has me hyped.Facebook is still hunting up ways to get a better look into growing startups — this time via investments in venture capital funds.And, finally, there were some hearings this week, you might have heard. We’re working on something neat that you are going to love on just that topic, so stay tuned.And that’s Equity for this week. We are back Monday morning early, so make sure you are keeping tabs on our socials. Hugs, talk soon!
Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
I’m publishing this series on LinkedIn called Colors to explore a topic that I care deeply about: the Renaissance Mind. I am just as passionate about entrepreneurship, technology, and business, as I...
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Greg Robertson: We left our jobs and rented some cubicles at the architect’s office. After all, he didn’t have architects working because nobody was doing anything in real estate. One of the premises...
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Even the hard-charging world of early-stage startups has its share of procrastinators, lollygaggers, slow-pokes, wafflers and last-minute decision makers. If that’s your demographic, today is your lucky day.
You now have an extra week (courtesy of Saint Expeditus, the patron saint of procrastinators), to score early-bird savings to Disrupt 2020, which takes place September 14-18. Buy your pass before the new and final deadline — August 7 at 11:59 p.m. (PT) — and save up to $300. Who says prayers (or secular entreaties) go unanswered?
Your pass opens the door to five days of Disrupt — the biggest, longest TechCrunch conference ever. Drawing thousands of attendees and hundreds of innovative early-stage startups from around the world, you won’t find a better time, place or opportunity to accelerate the speed of your business.
Here are four world-class reasons to attend Disrupt 2020.
World-class speakers. Hear and engage with leading voices in tech, business and investment across the Disrupt stages. Folks like Sequoia Capital’s Roelof Botha, Ureeka’s Melissa Bradley and Slack’s Tamar Yehoshua — to name just a few. Here’s what you can see onstage so far.
World-class startups. Explore hundreds of innovative startups exhibiting in Digital Startup Alley — including the TC Top Picks. This elite cadre made it through our stringent screening process to earn the coveted designation, and you’ll be hard-pressed to find a more varied and interesting set of startups.
World-class networking. CrunchMatch, our AI-powered networking platform, simplifies connecting with founders, potential customers, R&D teams, engineers or investors. Schedule 1:1 video meetings and hold recruitment or extended pitch sessions. CrunchMatch launches weeks before Disrupt to give you more time to scout, vet and schedule.
World-class pitching. Don’t miss Startup Battlefield, the always-epic pitch competition that’s launched more than 900 startups, including big-time names like TripIt, Mint, Dropbox and many others. This year’s crop of startups promises to throw down hard for bragging rights and the $100,000 cash prize.
Need another reason to go? Take a page out of SIMBA Chain founder Joel Neidig’s playbook:
Our primary goal was to make people aware of the SIMBA Chain platform capabilities. Attending Disrupt is great way to get your name out there and build your customer base.
It’s time for all you last-minute lollygaggers to get moving and take advantage of this second, final chance to save up to $300. Buy your pass before August 7 at 11:59 p.m. (PT).
Is your company interested in sponsoring or exhibiting at Disrupt 2020? Contact our sponsorship sales team by filling out this form.
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Here they are, ranked by how much weight we put behind them:
Owning one brick-and-mortar business seems complicated enough. But running multiple locations? For many owners, that’s a constant juggling act of phone calls, check lists and driving back and forth from store to store. In the middle of a pandemic, it gets all the more complex.
Delightree, a company out of the previous Alchemist Accelerator class, has raised $3 million to build a tool hyper-focused on helping owners of franchise businesses (think hotels, gyms, restaurant chains, etc.) take their operations and workflows digital.
A big part of the idea with Delightree is to move much of what currently happens through pen-and-paper checklists over to smartphones, allowing franchise owners to know what’s going at their locations from afar. They digitize workflows like the daily store opening/closing procedures or maintenance routines, with employees checking boxes on their devices rather than a paper to-do list. If something gets missed along the way, Delightree can automatically ping the owner to let them know before it becomes an issue.
They’ll also help to automate and track things like onboarding new employees and staying prepared for inspections, while giving owners a centralized place to make team-wide announcements or contact employees.
Delightree evolved out of a previous company built by its co-founders, Madhulika Mukherjee and Tushar Mishra. They’d been working on Survaider, a tool that monitored customer feedback across social media, review sites, etc., and turned that feedback into actionable to-do lists.
“When we were piloting it, our customers started saying: ‘can we create our own tasks? Or can I tell something to my employees through this?’ ” Mishra told me. “It was just such an obvious problem, so we started building Delightree.”
Delightree co-founders Tushar Mishra and Madhulika Mukherjee
The team has also been working on a feature they call Delightcomply, which helps stores stay up to date on the latest CDC guidelines for businesses operating through the pandemic, and to automatically share compliance details with potential customers. A business could use Delightcomply to publicly outline the steps it’s taking to keep employees/customers safe, for example, with the listing automatically updated to show the status of each task.
Delightree is currently working directly with each new customer to help them through the initial setup — specifically, to help franchisees take the standard operating procedures they receive directly from the brand owners and turn them into Delightree workflows. They’re still working out their exact pricing model, but say that they charge on a per-location-per-month basis, with pricing varying depending on the size/complexity of the business. They’ve set up a waitlist for anyone interested.
This $3 million seed round was funded by Accel Partners, Emergent Ventures, Brainstorm Ventures, Axilor Ventures and Alchemist. As part of the deal, Emergent partner Anupam Rastogi has joined Delightree’s board of directors.
This week, the CEOs of Facebook, Apple, Alphabet and Amazon were called before the House’s Antitrust Subcommittee to defend the vast empires they’ve built. Jeff Bezos, Tim Cook, Sundar Pichai and Mark Zuckerberg faced questions about how their business practices propelled them into the market-dominant giants they are today. They lead four of the top six most valuable public companies in existence and are widely regarded as reshaping the consumer world, both within the tech industry and beyond. Watch TechCrunch reporters Taylor Hatmaker, Devin Coldewey and Alex Wilhelm discuss what happened during the hearing and what this might mean for the future of big tech.
The week after George Floyd was murdered, I decided to read a book a week by a Black author. I went online and found a bunch of lists that had popped up. I bought about 25 books, all in physical form, and piled them up on my reading table near my couch.
On Saturdays, my primary activities of the day are reading, running, napping, and being with Amy. Two weeks ago, I read Ibram X. Kendiâs book How To Be An Antiracist. Last weekend I read Ta-Nehisi Coatesâ book Between the World and Me. Tomorrow, Iâm going to read John Lewisâ Across That Bridge: Life Lessons and a Vision for Change. And then, for the rest of August, I will read books written by Black Women.
The books by Kendi and Coates were both spectacular. I learned a lot from each, and they caused me to reflect on a lot of things while challenging a bunch of assumptions I had (many of which Iâve now modified or eliminated, although Iâm sure Iâll need reinforcement to have the premises disappear from my brain.)
I read Lewisâ March Trilogy in comic book / YA form about a year ago. It was great. But, sitting with and reading his autobiography seems like a powerful thing to do this weekend.
Last night, I read COVID-19: The Pandemic that Never Should Have Happened and How to Stop the Next One by Debora MacKenzie. She wrote it in two months as the pandemic started, and did a great job. It goes well beyond just Covid, exploring past pandemics, things we could have done, didnât, and why we are in the situation we are in now. As with my new book The Startup Community Way, she builds her framework on complex systems, explains them clearly, and applies the structure to the Covid crisis.
Finally, if you are a podcast person, I have two personal ones that I really enjoyed doing. The first is from the Techstars GiveFirst podcast and is with Len Fassler, titled Brad Feld and the mentor who changed his life.
The other is with Harry Stebbings on his 20 Minute VC podcast and is around mental health. Iâm a guest, along with Jerry Colonna and Tracy Lawrence. 20VC: Brad Feld, Jerry Colonna, and Tracy Lawrence on Depression and Mental Health, Why You Cannot Tie Happiness to Milestones & Why Fear, Anxiety and Guilt are Useless Emotions.
The podcast with Len gave me chills when I listened to it, and Harryâs was excellent other than the missing Oxford comma in the title.
In case you missed it, you can listen to the recording here: 496th 1Mby1M Roundtable July 30, 2020: With Julianne Zimmerman, Reinventure Capital
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As the Internet of Things proliferates, security cameras are getting smarter. Today, these devices have machine learning capability that helps the camera automatically identify what it’s looking at — for instance, an animal or a human intruder? Today, Cisco announced that it has acquired Swedish startup Modcam and is making it part of its Meraki smart camera portfolio with the goal of incorporating Modcam computer vision technology into its portfolio.
The companies did not reveal the purchase price, but Cisco tells us that the acquisition has closed.
In a blog post announcing the deal, Cisco Meraki’s Chris Stori says Modcam is going to up Meraki’s machine learning game, while giving it some key engineering talent, as well.
“In acquiring Modcam, Cisco is investing in a team of highly talented engineers who bring a wealth of expertise in machine learning, computer vision and cloud-managed cameras. Modcam has developed a solution that enables cameras to become even smarter,” he wrote.
What he means is that today, while Meraki has smart cameras that include motion detection and machine learning capabilities, this is limited to single camera operation. What Modcam brings is the added ability to gather information and apply machine learning across multiple cameras, greatly enhancing the camera’s capabilities.
“With Modcam’s technology, this micro-level information can be stitched together, enabling multiple cameras to provide a macro-level view of the real world,” Stori wrote. In practice, as an example, that could provide a more complete view of space availability for facilities management teams, an especially important scenario as businesses try to find safer ways to open during the pandemic. The other scenario Modcam was selling was giving a more complete picture of what was happening on the factory floor.
All of Modcams employees, which Cisco described only as “a small team,” have joined Cisco, and the Modcam technology will be folded into the Meraki product line, and will no longer be offered as a standalone product, a Cisco spokesperson told TechCrunch.
Modcam was founded in 2013 and has raised $7.6 million, according to Crunchbase data. Cisco acquired Meraki back in 2012 for $1.2 billion.
Fascinating story of MediaAlpha, beautifully told by Co-founder CEO Steve Yi, relates how the team has navigated through various experiments to over $100 million in revenue. Sramana Mitra: Let’s...
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CRISPR tech startup Mammoth Biosciences is among the companies that revealed backing from the National Institutes of Health (NIH) Rapid Acceleration of Diagnostics (RADx) program on Friday. Mammoth received a contract to scale up its CRISPR-based SARS-CoV-2 diagnostic test in order to help address the testing shortages across the U.S.
Mammoth’s CRISPR-based approach could potentially offer a significant solution to current testing bottlenecks, because it’s a very different kind of test when compared to existing methods based on PCR technology. The startup has also enlisted the help of pharma giant GSK to develop and produce a new COVID-19 testing solution, which will be a handheld, disposable test that can offer results in as little as 20 minutes, on site.
While that test is still in development, the RADx funding received through this funding will be used to scale manufacturing of the company’s DETECTR platform for distribution and use in commercial laboratory settings. This will still offer a “multi-fold increase in testing capacity,” the company says, even though it’s a lab-based solution instead of a point-of-care test like the one it’s seeking to create with GSK.
Already, UCSF has received an Emergency Use Authorization (EUA) from the FDA to use the DETECTR reagent set to test for the presence of SARS-CoV-2, and the startup hopes to be able to extend similar testing capacity to other labs across the U.S.
News broke last night that Affirm, a well-known fintech unicorn, could approach the public markets at a valuation of $5 to $10 billion. The Wall Street Journal, which broke the news, said that Affirm could begin trading this year and that its IPO options include debuting via a special purpose acquisition company, also known as a SPAC.
That Affirm is considering listing is not a surprise. The company is around eight years old and has raised north of $1 billion, meaning it has locked up investor cash during its life as a private company. And liquidity has become an increasingly attractive possibility in 2020, when new offerings of all quality levels are enjoying strong reception from investors and traders who are hungry for equity in growing companies.
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But $10 billion? That price tag is a multiple of what Affirm was worth last year when it added $300 million to its coffer at a post-money price of $2.9 billion. There were rumors that the firm was hunting a far larger round later in 2019, though it doesn’t appear — per PitchBook records — that Affirm raised more capital since its Series F.
This morning let’s chat about the company’s possible IPO valuation. The Journal noted the strong public performance of Afterpay as a possible cognate for Affirm — the Australian buy-now, pay-later firm saw its value dip to $8.01 per share inside the last year before soaring to around $68 today. But given the firm’s reporting cycle, it’s a hard company to use as a comp.
Happily, we have another option to lean on that is domestically listed, meaning it has more regular and recent financial disclosures. So let’s learn how much revenue it takes to earn an eleven-figure valuation on the public markets by offering consumers credit.
Affirm loans consumers funds at the point of sale that are repaid on a schedule at a certain cost of capital. Affirm customers can select different repayment periods, raising or lowering their regular payments, and total interest cost.
Synchrony offers similar installment loans to consumers, along with other forms of capital access, including privately-branded credit cards. (Verizon, TechCrunch’s parent company, recent offered a card with the company, I should note.) Synchrony is worth $13.5 billion as of this morning, making it a company of similar-ish value compared to the top end of the possible Affirm valuation range.
Greg Robertson: Dan and I stayed there for a couple years, but it was brutal. We then got a call from a friend of ours who was restarting a company that he had sold again to another company. They had...
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Entrepreneurs are invited to the 497th FREE online 1Mby1M mentoring roundtable on Thursday, August 6, 2020, at 8 a.m. PDT/11 a.m. EDT/5 p.m. CEST/8:30 p.m. India IST. If you are a serious...
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Like many industries with a high concentration of wealth — and the careers that help professionals accumulate it — investment firms have a severe dearth of diversity in their ranks.
Regardless of whether the focus is venture capital, private equity or any other investment asset class, the firms are replete with white men. Though there have been some modest efforts of late to push for diversity, particularly in VC, these have yielded single digit percentage changes at best — and nothing at worst. Only 9% of investment decision makers in VC today are women; just 2% are Black.
Some firms have made reasonable inroads on this problem with good intentions. Based on my search experience recruiting investment professionals, I would guess that at least half of those searches were for clients with a strong preference to hire a “diverse” candidate. The Black Lives Matter movement has recently advanced the dialogue even further and has shined a light on underrepresentation in VC more than ever. “How do we increase our pipeline of diverse candidates?” is a question I heard frequently before 2020, but in past weeks this has become a chorus. Unfortunately, if solving this problem were as easy as telling a recruiter you want more diversity, it might have been solved long ago.
Below are a few common pitfalls we see in our searches with VC firms in particular, as well as some thoughts on how firms can improve their hiring processes, in order to work toward having more diverse representation within their investing teams.
The most common reason I see for hiring processes leading to a slate with primarily white male candidates is because the criteria my client views as required almost completely precludes the possibility that the candidate slate will be diverse.
Taken as a given that women and minority men are not well-represented at senior levels in VC, any job spec that asks for a candidate to have seven to 10 years of experience in the industry, or a large number of board seats or investments led, will mean that the pool of “qualified” candidates will consist of mostly white men. This has historically been referred to as the “pipeline problem” and it’s an increasingly well-studied concept that academic literature is beginning to point to as a bias that pushes the onus of hiring minorities away from the hiring manager and on to the candidate pool. Even for firms that remain committed to hiring underrepresented groups without making adjustments to their criteria, the result is a zero-sum game where proven minority investors rotate from firm to firm, and an outcome that does not increase diversity in the industry as a whole.
VC firms seeking to improve their diversity have to recognize that great comes in many forms. By crafting broader specs and really thinking about the qualifications for their investing roles, a whole new talent pool opens up. To see that new pool of talent though, firms must first determine what characteristics are relevant to the role, and avoid tenure (or other tenure stand-ins) as the main criteria. VC investing is as much an art as a science; firms should decide what personal traits make somebody strong in their organization and why. How would a different viewpoint be additive to sourcing or diligence discussions?
Firms then need to commit to interviewing for those traits and perspectives, and assessing candidates along those same lines. One VC firm I worked with interviewed dozens of candidates before they realized that their process focused too much on financial acumen and not enough on the other factors they felt would make somebody a strong venture capitalist, resulting in a final slate of safe, “qualified,” and mostly nonminority candidates.
We reworked our process, and theirs, to interview for different criteria moving forward. We asked about overcoming hardships and about risks taken, and we got a sense for what type of impact that person made in whatever organization they came from rather than just asking about deals and transactions. It should be no surprise that the candidates with noninvesting backgrounds are performing much better in the process now, and the value they’d add to the organization more clear, even though the interviewers and the roles are the same.
A broad spec and a team committed to hiring diverse talent, and interviewing appropriately, are great starting points. But then there is much more to do. Affinity bias is a well-known phenomenon that many investors are likely aware of, but it is pernicious in hiring settings and can be a serious challenge to overcome. Affinity bias in hiring is when a person or group of people prefer a candidate who looks, talks, acts or has a similar background to them.
In the case of hiring candidates with diverse backgrounds, affinity bias may be the tallest hurdle. In VC, the job is in many ways to seek common ground with the people you talk to. Good VCs are relationship builders — with entrepreneurs, other VCs and strong executives they want to recruit into their portfolio companies. But most investors are white people from affluent communities who attended elite universities and have worked at top-tier banks or consulting firms. In some cases there may have been a stint at another top-tier institution, be it a technology company or another investment firm.
White men are more likely to have these backgrounds. In a hiring process, white male VCs will naturally find ways to connect with candidates with similar backgrounds (i.e., other white men), in contrast to candidates with none of those same experiences, even when the candidates with other backgrounds are equally qualified for the role.
Affinity bias can be very subtle. It is human nature to feel the conversation was easier with somebody who in many ways has led the same life you did. It can feel somewhat logical even: The critique of the nonwhite or nonmale candidate is never as obvious as “They didn’t go to Stanford” or “They don’t belong to my country club.” Rather, it is often expressed as something softer and subjective — a seldom-articulated criteria of cultural fit. “Our culture is different from the place they work” is the most common. “I’m not sure they have the drive” is another, or “They don’t have an X-factor.” Now, these critiques can be completely legitimate.
A candidate may indeed be a bad fit for the culture of the firm because, for example, their prior employer was a gigantic corporate machine reliant on extraneous processes and they are interviewing for a role at a small entrepreneurial organization. But sometimes, particularly when interviewing candidates from different backgrounds, culture fit is a mask for affinity bias, and VCs (like all interviewers) need to be conscious of this tendency.
Investment firms almost always try to make a hire through their own network before leading a full search, and even before posting a job as being open anywhere online. This has become such an ingrained behavior that it is often discussed as a best practice. Unfortunately, “hiring through our network” almost certainly means the slate of candidates that a firm considers at the outset is going to be heavily nondiverse. Unless a firm (or to broaden this guidance, an organization) is already diverse across multiple vectors, then beginning a search by canvasing the firm’s own network is highly unlikely to yield a “diverse” candidate. This seems innocuous but it can actually be harmful to the odds that the firm ever hires a candidate from an underrepresented group. Why? There is another bias at work, the status quo bias.
Studies have shown that people tend to make choices that favor the status quo. Creating a balanced slate of choices is critical to avoid disfavoring minority candidates inadvertently. One study showed that having multiple women or Black candidates on a finalist slate increased the odds that the selected would be a minority by 70x-100x. But if a group of interviewers meets five white men through their networks before they meet anybody else, it is going to take an disproportionate number of underrepresented minority candidates to overcome the group’s bias toward hiring the “status quo” of the white men they met at the outset of the search.
At True Search, we recently audited one of our own searches to look for candidate-selected markers of their identity. We compared our pool of candidates to the NVCA diversity data from 2018. Compared to the industry averages, our pool of candidates was half as white and twice as female as the industry at large. I am not sharing that data as an advertisement for True Search, and in fact we strive to do more and are working on multiple programs to increase our networks with diverse candidate pools. The point is, when a VC firm uses a search firm or any outside consultant for a search, the pool of candidates is going to be much more diverse than if that VC firm simply calls up the people in their network, who probably are not all that diverse.
A commitment to hiring more talent with underrepresented backgrounds is great; actually doing it is even better. Many studies have shown that diversity improves the performance of a team, but the onus is on the organization to foster an environment where those viewpoints are appreciated. In my discussions with VCs who are minorities, they point out that once they are in the door of the firm they still face challenges that white male colleagues don’t.
They are less likely to have mentors who share their backgrounds, and investing is largely an apprenticeship business. If they did not come from Stanford or Harvard, they are less likely to see deals that come through the sorts of personal networks that the firm is likely accustomed to seeing. If they came from a noninvesting background, they may be taken less seriously when presenting investment ideas to the team of career investors. A firm has to support diversity of thought once it is in the door, or the contributions of those team members may be unappreciated.
Firms can do many things to foster strong talent from diverse backgrounds once they are in the organization. Minority investors have shared some great ideas with me as I was thinking through this article, so these suggestions aren’t just my own. Underrepresented groups have historically (in the short history of such groups having any significant representation in the investing world) formed mentorship networks that transcend the walls of a given firm, such as Latinx VC, BLCK VC and All Raise.
VC firms should build as much connectivity with those sort of networks as possible. This will not only increase the odds that a firm will see more candidates from underrepresented groups, but it will also mean that the firm can play a role in finding strong mentors for their diverse talent throughout their career. Those networks can be built through small individual actions like attending and sponsoring events, or sharing job postings in the firm and portfolio with those networks.
VC firms can also help to jump-start a hire’s network in venture. Imagine a scenario where a firm hires a noninvestor with a unique yet amazing background into an investing role. Their peers all went to Stanford or worked at Facebook and are sourcing their deals through those personal networks. VC firms can use their resources to help close that network gap, such as by setting aside small pools of capital for a seed fund to be deployed by new investors with diverse backgrounds, thereby giving them a boost in early network building. I’ve seen firms deploy this strategy as a way to keep tabs on high potential operators, or on partner-level candidates they want to get to know more before they commit to hiring full-time.
Firms can help train junior talent and better prepare them for future full-time roles in venture by running intern or analyst programs and emphasizing the hiring of underrepresented groups into those roles. Even a part-time gig in VC will give a candidate a leg up in future interview processes, and even if that person goes off to another firm for a full-time role, the network back to that person will remain and could be helpful as a source of (or mentor to) the diverse talent the firm hires in the future.
Americans are rapidly becoming less religious. Weekly church attendance is falling, congregations are getting smaller or even closing and the percentage of Americans identifying as “religiously unaffiliated” has spiked.
Despite all this, now might be the perfect time for church tech companies to thrive.
A combination of COVID-19-induced adoption, underrated demographic trends and pressure to innovate is setting the stage for new successes in the previously sleepy church tech space. Venture dollars are flowing in, and Silicon Valley is slowly showing serious interest in the sector. Hot new startups are finding creative growth hacks to penetrate a difficult market. Major challenges remain for companies in this space, but their odds seem better than ever.
Yes, Americans are going to church less often, but that doesn’t mean they’re not staying spiritual. In fact, the percentage of Americans identifying as “spiritual but not religious” has grown faster than any other group in this Pew survey on religiosity. This fact is reflected in other data. For example, the percentage of Americans that pray daily or weekly has stayed fairly flat even as overall religiosity declined. This opens up two distinct opportunities, as well as two challenges.
Opportunities:
What tools do the growing “spiritual but not religious” crowd need?Churches are realizing they need to innovate or die. What tools do they need to reach out to their members and gain new congregants?Challenges:
Two demographics: young, tech-savvy and more willing to try a new product, but less involved in church tradition versus older, not as tech-savvy and harder to reach.Very byzantine market: as documented in part one of this series, the market is dominated by small companies waging a turf war with one another. In addition, because churches are so local and hard to sell to, all of the companies to date have been smaller land-grabs rather than anything with scale or accumulating advantage.Rapidly growing startups in the space are deftly navigating this landscape and taking advantage of these trends.
It’s officially now o’clock, startup fans. All good things come to an end, and today’s the last day you can score an early-bird pass to Disrupt 2020. Don’t miss your chance to save up to $300 and get busy building your business at our global Disrupt event. Buy your pass before the deal — and the savings — expires at exactly 11:59 p.m. (PT) tonight.
Disrupt 2020 takes place September 14-18. It’s packed with non-stop programming and gives you five full days to explore — expand your knowledge, your network, your opportunities and your business.
We’ve added a new event this year: The Pitch Deck Teardown. Expert VCs and entrepreneurs will assess pitch decks submitted by registered Disrupt attendees, note red flags and offer constructive advice on how to improve this essential startup tool. We’ll hold multiple sessions over the course of Disrupt, so if you’re a registered Disrupt attendee, submit your pitch deck for consideration.
That’s just one of many exciting ways attending Disrupt can help your early-stage startup survive and thrive. Exploring the hundreds of early-stage startups exhibiting in Digital Startup Alley is a great place to start. Connect with founders around the world, increase your brand recognition, discover people and technologies that can augment your business.
“The top three benefits of going to Disrupt were introducing my product to people who would not have seen it otherwise; networking with investors, mentors, advisors and potential customers and, finally, talking to other entrepreneurs and founders and learning what it took to get their companies off the ground.” — Felicia Jackson, inventor and founder of CPRWrap.
Remember, you have five days to experience Disrupt, so don’t miss the impressive lineup of speakers who span the startup universe. You’ll hear the latest thinking from top tech, investment and business icons, leaders, movers, shakers and makers. We’ve also announced the agenda here and we’re adding more to the roster every week.
Okay, let’s review. What time is it? It’s NOW o’clock — time to register for Disrupt 2020, save up to $300 and do whatever it takes to drive your business forward. Buy your pass before the early-bird deal expires at 11:59 p.m. (PT) tonight!
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