Jun
28

SentinelOne’s upgraded IPO pricing is good news for Tiger, public markets and your local VC

As the second quarter races to a close, we’re down to the wire for IPOs looking to get out before June ends. One such company is SentinelOne, a cybersecurity startup backed by Insight Venture Partners, Redpoint, Tiger Global Management, Data Collective and Anchorage Capital, among others.

SentinelOne raised an ocean of capital while private, including nearly $500 million across two rounds in 2020. Its debut is therefore a huge liquidity event for a host of investing groups. And today, the cybersecurity unicorn had good news in the form of an upgrade to its IPO price range.

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

Last week, The Exchange wrote that the company’s IPO would be a “good heat check for the IPO market” given its rapid growth and pace of losses. How investors valued it would help explain the public market’s current appetite for loss-making startups. Today’s news implies healthy appetites.

SentinelOne raised its IPO price range this morning from $26 to $29 per share to $31 to $32 per share, a sizable lift to its valuation and IPO raise.

This morning, we’re unpacking the company’s new valuation range, thinking about SentinelOne’s growth and revenue results compared to similar public companies, and working to understand if the company is inexpensive, neutrally priced or expensive compared to current comps. Sound fun? It will be!

What’s SentinelOne worth?

Recall that when SentinelOne last raised capital it was valued at $2.7 billion on a pre-money basis. The company was therefore worth just under $3 billion after the $267 million round. The unicorn is going to yeet that figure into space in its IPO, barring something catastrophic.

Its new IPO price range of $31 to $32 per share values the company on a much richer basis. With an anticipated simple share count of 253,530,006 after its IPO, inclusive of a private placement, the company would be worth $7.86 billion to $8.11 billion.

Continue reading
  26 Hits
Jun
28

Tapcart, a ‘Shopify for mobile apps,’ raises a $50 million Series B

Shopify changed the e-commerce landscape by making it easier for merchants to set up their websites both quickly and affordably. A startup called Tapcart is now doing the same for mobile commerce.

The company, which has referred to itself as the “Shopify for mobile apps,” today powers the shopping apps for top brands, including Fashion Nova, Pier One Imports, The Hundreds, Patta, Culture Kings, and thousands more. Following a year of 3x revenue growth, in part driven by the pandemic, Tapcart is today announcing the close of a $50 million round of Series B funding, led by Left Lane Capital. Having clearly taken notice of Tapcart’s traction with its own merchant base, Shopify is among the round’s participants.

Other investors in the round include SignalFire, Greycroft, Act One Ventures and Amplify LA.

Tapcart’s co-founders, Sina Mobasser and Eric Netsch, have worked in the mobile app industry for years. Mobasser’s previous company, TestMax, offered one of the first test prep courses on iOS, while Netsch had more recently worked on the agency side to create mobile and digital experiences for brands. Together, the two realized the potential in helping online merchants bring their businesses to mobile, as easily as they were able to go online with Shopify.

Tapcart’s founders Sina Mobasser and Eric Netsch at their Santa Monica HQ. Image Credits: Tapcart

“Now, you can launch an app on our platform in a matter of weeks, where historically it would take up to a year if you wanted to custom build an app,” explains Mobasser. “And you can do it for a low monthly fee.”

Tapcart’s platform itself offers a simple drag-and-drop builder that allows anyone to create a mobile app for their existing Shopify store using tools to design their layout, customize the product detail pages, integrate checkout options, include product reviews, and even optionally add other branded content, like blogs, lookbooks, videos (including live video) and more. Everything is synced directly from Shopify to the app in real-time, so the merchant’s inventory, products and collections are all kept up-to-date. That’s a big differentiator from some rivals, which require duplicate sets of data and data transformation.

Tapcart, meanwhile, leverages all of Shopify’s APIs and SDKs to create a native application that works with Shopify’s existing data structures.

Image Credits: Tapcart

This tight integration with Shopify helps Tapcart because it doesn’t have to focus on the e-commerce infrastructure, as the way things are structured around inventory and collections are roughly 90% the same across brands. Instead, Tapcart focuses on the 10% that makes brands stand out from one another, which includes things like branding, content and design. Its CMS allows merchants to create exclusive content, change the colors and fonts, add videos and more to make the app look and feel fully customized.

Beyond the mobile app creation aspect to its business, Tapcart also helps merchants automate their marketing. Through the Tapcart platform, merchants can communicate with their customers in real-time using push notifications that can alert them to new sales, to encourage them to return to abandoned carts, or any other promotions. The marketing campaigns can be automated, as well, which helps merchants schedule their upcoming launches and product drops ahead of time. The company claims these push notifications deliver click-through rates that are 72% higher than a traditional email or SMS text because of their interactivity and branding.

Image Credits: Tapcart

The platform has quickly found traction with SMB to mid-market enterprise customers who have reached the stage of their business where it makes sense for them to double down on customer retention and conversion and optimize their mobile workflow.

“Our sweet spot is when you have maybe a couple hundred customers in your database,” notes Netsch. “That’s a perfect time to now focus less on the paid acquisition portion of your business and more on how to retain and engage those existing customers, [so they’ll] shop more and have a better experience,” he says.

During the past 12 months, over $1.2 billion in merchant sales have flowed through Tapcart’s platform. And in 2020, Tapcart’s recurring revenue increased by 3x, as mobile apps grew even faster during the pandemic, which had increased consumer mobile screen time by 20% year-over-year from 2019. Mobile commerce spending also grew 55% year-over-year, topping $53 billion globally during the holiday shopping season, the company says. Tapcart’s own merchants saw mobile app orders at a rate of more than once-per-second during this time, and it believes these trends will continue even as the pandemic comes to an end.

Today, Tapcart generates revenue by charging a flat SaaS (software-as-a-service) fee, which differentiates it from a number of competitors who charge a percent of the merchant’s total sales.

Image Credits: Tapcart

With the additional funding, Tapcart plans to focus on its goal of becoming a vertically integrated mobile commerce suite of tools, which more recently includes support for iOS App Clips. It will also soon release an upgraded version of its insights analytics platform and will offer scripts that merchants can install on their mobile websites to compare what works on the site versus what works in the app.

Later this year, Tapcart plans to launch a full marketing automation product that will allow brands to automate and personalize their notifications even further. And it plans to invest in market expansions to make its product better designed for mobile, global commerce.

The funding will allow Santa Monica-based Tapcart to hire another 200 people over the next 24 months, up from the 70 it has currently. These will include new additions across time zones and even in markets like Australia and Europe as it moves toward global expansion.

Shopify’s investment will open up a number of new opportunities as well, including on product, engineering, business strategy and partnerships. It will also help to get Tapcart in front of Shopify’s 1.7 million global merchants.

“There’s still quite a lot of merchants that need better mobile experiences, but have yet to really double down on the mobile effort and get something like a native app,” notes Netsch. “There’s a lot of different ways and methods that merchants are experimenting with mobile growth, and we’re trying to offer all of the best parts of that in a single platform. So there’s tons of expansion for Tapcart to do just that with the existing target addressable market,” he says.

“We believe brands must be where their customers are, and today that means being on their phones,” said Satish Kanwar, VP of product acceleration at Shopify, in a statement. “Tapcart helps merchants create mobile-first shopping experiences that customers love, reinforcing Shopify’s mission to make commerce better for everyone. We look forward to seeing Tapcart expand its success on Shopify with the more than 1.7 million merchants on our platform today.”

Continue reading
  41 Hits
Jun
28

Summer Sale: Save 10% on Extra Crunch membership

From now until July 5, we are offering 10% off annual Extra Crunch memberships. This offer is valid for readers in the U.S., Canada, Europe, U.K. and Israel.

Claim the deal by navigating here.

Extra Crunch is a membership program from TechCrunch that helps startup teams get ahead. Benefits include:

Discover how successful startups operate through deep-dive interviews with founders and investors.Spot trends and opportunities with market analysis, investor surveys and topical newsletters.Get expert advice on fundraising, growth and management from experienced entrepreneurs.Improve your pitch skills with live weekly coaching and Q&A sessions, and watch replays on demand.Browse TechCrunch distraction-free with a lighter ad experience.

Committing to an annual plan will allow you to save 20% on TechCrunch event tickets. Annual members can also access the Partner Perks program, which includes discounts on services from Crunchbase, AWS, Zendesk, Typeform, DocSend and more.

If you are a current monthly member and want to upgrade to annual, please reach out to customer support at This email address is being protected from spambots. You need JavaScript enabled to view it..

You can sign up for Extra Crunch and claim this deal here.

Continue reading
  36 Hits
Jun
28

Loco raises $9M for esports and game livestreaming in India

Loco has raised $9 million in seed funding to enable esports and game livestreaming in India in a deal led by Krafton and Lumikai.Read More

Continue reading
  55 Hits
Jun
28

Only 4% of supply chain leaders are ‘future-ready,’ Accenture says

Research from Accenture show "future-ready" companies are twice as efficient and three times more profitable than peers.Read More

Continue reading
  56 Hits
Jun
27

Toya’s Miraculous Ladybug game gets 100M plays on Roblox

Toya Studio and Zag Games said that their Roblox game Miraculous RP: Quests of Ladybug & Cat Noir is over 100 million plays in seven weeks.Read More

Continue reading
  40 Hits
Jun
27

Vectorized CEO on the future of streaming data application development

VentureBeat sat down with Vectorized CEO Alexander Gallego this week to discuss the future of streaming data application development.Read More

Continue reading
  40 Hits
Jun
26

Peggy Johnson interview: How Magic Leap is getting traction with its enterprise pivot

Peggy Johnson, the new CEO of Magic Leap, is encouraged at how Magic Leap is gaining traction with its enterprise pivot.Read More

Continue reading
  42 Hits
Jun
26

7 keys to evaluating zero trust security frameworks

Zero trust is a key framework for securing modern enterprises, but buyers don't really know how to assess the effectiveness of AI software.Read More

Continue reading
  24 Hits
Jun
26

Equity Extras: Q&A from the live show

Hey Equity fam, we have a small clip of extra for you today. After our live show — listen to the recording here, it was good fun — we got to take a few questions from the audience, audio that was not included in the main episode as we didn’t have the time. But we’ve cut it out, given it a short polish, and have it for you today.

If you wanted even more Equity, here you go!

As a small note from the team, we know that this week’s Wednesday episode didn’t have the best audio quality. And to do a Twitter Spaces experiment the same week as a live show might have felt like a lot of change. Don’t worry, it just worked out that way. Equity will keep tinkering and having fun, but we’re back to normal next week.

Enjoy the Q&A, and we’ll see you at our next live show!

— Grace, Chris, Natasha, Danny, and Alex

Continue reading
  61 Hits
Jun
26

DeepMind AGI paper adds urgency to ethical AI

DeepMind expects reinforcement learning will lead to replicating human cognitive abilities, achieving artificial general intelligence (AGI).Read More

Continue reading
  27 Hits
Jun
26

8 founders, leaders highlight fintech and deep tech as Bristol’s top sectors

The U.K. is gaining in popularity as a great place to start a tech firm. The country is quickly catching up to China on the tech investment front, with VC investments reaching a record of $15 billion in 2020, according to TechNation. A global health crisis notwithstanding, London remained a favorite for investors. U.K. cities made up a fifth of the top 20 European cities, with names such as Oxford, Dublin, Edinburgh and Cambridge rising to the fore in 2020.

Bristol proved especially popular among tech investors last year — local businesses raked in an impressive $414 million in 2020, making it the third-largest U.K. city for tech investment. The city also has the most fintech startups per head in the U.K. outside London, according to Whitecap’s 2019-2020 Ecosystem Report.

Efforts by the city’s private and public sectors to modernize the city have helped it rank among the top smart cities in the U.K., attracting a bevy of tech entrepreneurs. Its proximity to London has meant that it is a good alternative for founders looking for a more affordable stay while letting them tap the capital’s financial resources. The University of Bristol also has the largest robotics department in Europe.

Use discount code HARBOURSIDE to save 25% off an annual or two-year Extra Crunch membership.
This offer is only available to readers in the U.K. and Europe, and expires on August 31, 2021.

Bristol is also home to an important startup accelerator, SETsquared. A collaborative effort by the five universities of Bath, Bristol, Exeter, Southampton and Surrey, the accelerator has supported over 4,000 entrepreneurs and helped their startups raise a total of £1.8 billion. Other startup support players include the new Science Creates VC fund, set up by entrepreneur Harry Destecroix, and TechSPARK Engine Shed.

Key emerging startups from Bristol include Graphcore, Open Bionics, Ultraleap, Immersive Labs and Five AI.

To get a better idea of the state of the tech ecosystem and the investor outlook for this city, we surveyed founders, leaders and executives involved in nurturing Bristol’s startup ecosystem.

The survey revealed that the city has a robust renewable, zero-carbon and fintech startup landscape. Robotics, VR, bio, quantum, digital and deep tech are also areas showing promise. As for the investing scene, although Bristol has a healthy angel network, the city lacks institutional VC, but with London only a drive or train ride away, this has not proved a significant problem.

We surveyed:

Coralie Hassanaly, innovation consultant, DRIADPete Read, CEO and founder, Persona EducationKiran Krishnamurthy, CEO, AI LabsSimon Hall, director, Airway MedicalBen Miles, CEO, Spin Up ScienceRupert Baines, ex-CEO, UltraSoCMathieu Johnsson, CEO and co-founder, MarbleChris Erven, CEO, KETS Quantum Security

Coralie Hassanaly, innovation consultant, DRIAD

Which sectors is Bristol’s tech ecosystem strong in? What are you most excited by? What does it lack?
Bristol is strong in renewable and zero-carbon innovation, fintech and robotics. It’s weak in industry 4.0.

Which are the most interesting startups in Bristol?
Graphcore, LettUs Grow, Open Bionics, Ultraleap and YellowDog.

What are the tech investors like in Bristol? What’s their focus?
A lot of focus on fintech, I think.

With the shift to remote working, do you think people will stay in Bristol or will they move out? Will others move in?
Bristol is a great middle ground between a large dynamic city (plus it’s not far from London) and access to nice countryside area. With remote working we can expect it will attract new residents in the next few years.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Aimee Skinner, Abigail Frear and Stuart Harrison.

Where do you think the city’s tech scene will be in five years?
Second major city in U.K. innovation.

Pete Read, CEO and founder, Persona Education

Which sectors is Bristol’s tech ecosystem strong in? What are you most excited by? What does it lack?
Bristol is strong in media/animation, edtech, social impact, health and science. I’m most excited by edtech and the possibility to reach and positively impact millions of students via online learning. It’s weaker in hardware and fintech.

Which are the most interesting startups in Bristol?
Kaedim, Persona Education and One Big Circle.

What are the tech investors like in Bristol? What’s their focus?
There are several very active tech investment networks coming from several angles, e.g., university-led, groups of private angels and tech incubators. The great thing is they all collaborate and share resources, ideas and expertise in initiatives such as The Engine Shed and Silicon Gorge.

With the shift to remote working, do you think people will stay in Bristol or will they move out? Will others move in?
More people are moving in, as Bristol has a great urban lifestyle with easy access to the countryside and Southwest/Wales holiday spots, and an international airport 20 minutes from the center.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Jerry Barnes at Bristol PE Club; Abby Frear at TechSPARK; Briony Phillips at Rocketmakers; Jack Jordan-Connelly at SETsquared.

Where do you think the city’s tech scene will be in five years?
It’s developing rapidly with lots of support, so it will be bigger, attracting more investment and definitely more on the international scene five years from now.

Kiran Krishnamurthy, CEO, AI Labs

Which sectors is Bristol’s tech ecosystem strong in? What are you most excited by? What does it lack?
Our tech ecosystem is strong in the aerospace and defense sector. We are excited by the scope and scale of digital transformation opportunities with AI available in this sector. The main weakness in this sector is the slow pace of transformation, especially now due to the pandemic.

Which are the most interesting startups in Bristol?
Graphcore and YellowDog.

What are the tech investors like in Bristol? What’s their focus?
Compared to the U.K. tech sector average, Bristol has a very low proportion of established companies (4% versus 8%), a higher proportion of seed stage companies (42% versus 37%), and a higher death rate (21% versus 17%). It’s a particularly young ecosystem.

With the shift to remote working, do you think people will stay in Bristol or will they move out? Will others move in?
It is possible that people moving out of London will come into Bristol due to the transport links, strong ecosystem and beautiful nature of the city.

Where do you think the city’s tech scene will be in five years?
I wouldn’t be surprised if Bristol turns out to be San Francisco of Europe!

Simon Hall, director, Airway Medical

Which sectors is Bristol’s tech ecosystem strong in? What does it lack?
Bristol is strong in the medtech, veterinary, industrial sectors.

With the shift to remote working, do you think people will stay in Bristol or will they move out? Will others move in?
Others have moved in.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
SETsquared.

Where do you think the city’s tech scene will be in five years?
We will see massive growth in five years.

Ben Miles, CEO, Spin Up Science

Which sectors is Bristol’s tech ecosystem strong in? What are you most excited by? What does it lack?
Our sector is weak in entrepreneurial ambition among researchers, and so suffers from low rates of deep tech spinout activity from leading universities. We are most excited by the step change in activity we have seen in the past two years and culture shift towards innovation.

Which are the most interesting startups in Bristol?
Rosa Biotech, Albotherm and CytoSeek.

What are the tech investors like in Bristol? What’s their focus?
Medium strength in shallow tech; currently weak in deep tech.

With the shift to remote working, do you think people will stay in Bristol or will they move out? Will others move in?
People are moving in.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Spin Up Science, Science Creates and Science Angel Syndicate.

Where do you think the city’s tech scene will be in five years?
Very strong in deep tech with an invested local community of entrepreneurs, incubators and investors.

Rupert Baines, ex-CEO, UltraSoC

Which sectors is Bristol’s tech ecosystem strong in? What are you most excited by? What does it lack?
Bristol is strong in wireless (5G, 60 GHz, etc.), semiconductors (especially processors, AI/ML and parallel architectures), robotics and other hard tech/deep tech.

Which are the most interesting startups in Bristol?
Graphcore, Ultraleap, Blu Wireless and Five AI.

What are the tech investors like in Bristol? What’s their focus?
It’s limited. There are some angels, but few locally focused funds.

With the shift to remote working, do you think people will stay in Bristol or will they move out? Will others move in?
Much the same: People choose to live in Bristol/Bath for quality of life. Much of the work is already external — commuting to London.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Nigel Toon, Simon Knowles, Stan Boland, David May and Nick Sturge.

Where do you think the city’s tech scene will be in five years?
Much stronger, with more processor and hardware activity.

Mathieu Johnsson, CEO and co-founder, Marble

Which sectors is Bristol’s tech ecosystem strong in? What are you most excited by? What does it lack?
Bristol has a strong robotics, aerospace and renewables scene. I’m most excited to see how the legacy in aerospace in Bristol will translate to future industry-defining companies. The ecosystem is weak on the investor side, though London VCs are less than a two-hour train journey away.

Which are the most interesting startups in Bristol?
Graphcore, Ultraleap and Open Bionics.

With the shift to remote working, do you think people will stay in Bristol or will they move out? Will others move in?
I believe Bristol will become more attractive.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
Tom Carter at Ultraleap, and Joel Gibbard at Open Bionics.

Where do you think the city’s tech scene will be in five years?
Getting closer to London and Cambridge.

Chris Erven, CEO, KETS Quantum Security

Which sectors is Bristol’s tech ecosystem strong in? What are you most excited by? What does it lack?
Bristol has a strong biotech, quantum, digital, science-based/deep tech ecosystem. I’m excited by this eclectic city with exciting people that think differently.

Which are the most interesting startups in Bristol?
Any QTEC, SETsquared, or UnitDX members and alumni.

What are the tech investors like in Bristol? What’s their focus?
Very early/nascent, mostly angels.

With the shift to remote working, do you think people will stay in Bristol or will they move out? Will others move in?
Probably move in! Beautiful green spaces around, lots of interesting, independent shops. And (just about) commutable from London.

Who are the key startup people in the city (e.g., investors, founders, lawyers, designers)?
The incubators — QTEC, QTIC, SETsquared and UnitDX; Bristol Private Equity Club; Harry Destecroix.

Where do you think the city’s tech scene will be in five years?
Buzzing. More great startups and VCs moving in.

Continue reading
  54 Hits
Jun
25

How AI is changing the nature of analytics

At its core, artificial intelligence is an analytics tool. AI is useful because it can parse large amounts of data and add context.Read More

Continue reading
  76 Hits
Jun
25

Extra Crunch roundup: Unpacking BuzzFeed’s SPAC, curb your meeting enthusiasm, more

Meetings should have a clear purpose, but instead, they’ve become a way to measure status and reinforce what is colloquially referred to as CYA culture.

There’s a kernel of truth in every joke, so whenever someone quips, “This meeting could have been an email!” you can bet that some small part of them meant it sincerely.

Few people know how to run meetings effectively and keep conversations on track. Making matters worse, attendees often don’t bother to prepare, which makes a boring session even less productive.

And then there’s the complication of workplace politics: How secure do you feel declining an invitation from a co-worker — or a manager?

“Every time a recurring meeting is added to a calendar, a kitten dies,” says Chuck Phillips, co-founder of MeetWell. “Very few employees decline meetings, even when it’s obvious that the meeting is going to be a doozy.”

Full Extra Crunch articles are only available to members.
Use discount code ECFriday to save 20% off a one- or two-year subscription.

Changing your meeting culture is difficult, but given that 26% of workers plan to look for a new job when the pandemic ends, startups need to do all they can to retain talent.

Aimed at managers, this post offers several testable strategies that will help you boost productivity and say goodbye to poorly run, lazily planned meetings.

“Declining a bad meeting should never be taboo, and you should reiterate your trust in the team and challenge them to spend their and others’ time with more intention,” Phillips says. “Help them feel empowered to decline a bad meeting.”

Thanks very much for reading Extra Crunch, and have a great weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Why Amazon should pay attention to Shein

Image Credits: Shein

In the last year, online apparel shopping app Shein grew active daily users by 130%, reports Apptopia.

Each day, thousands of new products arrive on the app’s virtual shelves. Items are rapidly designed and prototyped before Shein’s contractors put them into production in Guangzhou factories — two weeks later, those SKUs arrive in fulfillment centers around the globe.

TechCrunch reporter Rita Liao examined how the company’s agile supply chain has become hot talk among e-commerce experts, but beyond a strong logistics game and data-driven product development, Shein’s close relationships with suppliers are integral to its success.

She also tried to answer a question many are asking: Is Shein a Chinese company?

“It’s hard to pin down where Shein is from,” answered Richard Xu from Grand View Capital, a Chinese venture capital firm.

“It’s a company with operations and supply chains in China targeting the global market, with nearly no business in China.”

Inside GM’s startup incubator strategy

Image Credits: Chevrolet

GM Vice President of Innovation Pam Fletcher is in charge of the company’s startups that tackle “electrification, connectivity and even insurance — all part of the automaker’s aim to find value (and profits) beyond its traditional business of making, selling and financing vehicles,” Kirsten Korosec writes.

Fletcher joined TechCrunch at a virtual TC Sessions: Mobility 2021 event to discuss what it’s like to launch a slew of startups under the umbrella of a 113-year-old automaker.

Investor Marlon Nichols and Wonderschool’s Chris Bennett on getting to the point with a pitch deck

Image Credits: MaC Venture Capital / Wonderschool

MaC Venture Capital founding managing partner Marlon Nichols and Wonderschool CEO Chris Bennett joined Extra Crunch Live to tear down the company’s early deck.

“The first thing that jumped out at all of us was just how bare-bones the presentation is: white text on a blue background, largely made up of bullet points,” Brian Heater writes before noting the CEO admitted that “not much changed aesthetically between that first pitch and the Series A deck.”

“It aligned with what we were valuing at the time,” Bennett says. “We were really focused on getting the product-market fit and really trying to understand what our customers needed. And we’re really focused on building the team.”

Dear Sophie: What options would allow me to start something on my own?

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie,

I’ve been working on an H-1B in the U.S. for nearly two years.

While I’m grateful to have made it through the H-1B lottery and to be working, I’m feeling unhappy and frustrated with my job.

I really want to start something of my own and work on my own terms in the United States. Are there any immigration options that would allow me to do that?

— Seeking Satisfaction

Investors’ thirst for growth could bode well for SentinelOne’s IPO

Alex Wilhelm calls SentinelOne’s looming debut “fascinating.”

“Why? Because the company sports a combination of rapid growth and expanding losses that make it a good heat check for the IPO market,” he writes. “Its debut will allow us to answer whether public investors still value growth above all else.”

Alex delves into an early dataset from SentinelOne and why public market investors still appear to value growth above anything else.

Before an exit, founders must get their employment law ducks in a row

Image Credits: Jenny Dettrick (opens in a new window) / Getty Images

Guest columnist Rob Hudock, a litigator who focuses on helping companies recruit the best talent available while avoiding distracting workplace issues or lawsuits, lays out the importance of putting out any employment-related fires before an exit.

“Inattention to employment issues can have a significant impact on deals — from preventing closings and reducing the deal value to altering the deal terms or significantly limiting the pool of potential buyers,” he writes.

“Fortunately, such issues typically can be resolved well in advance with a little forethought and legal guidance.”

Practice agile, iterative change to refine products and build company culture

Building an excellent product and a standout company culture require the same process, Heap CEO Ken Fine writes in a guest column.

“At Heap, the analytics solution provider I lead, a defining principle is that good ideas should not be lost to top-down dictates and overrigid hierarchies,” he writes. “The best results come when you approach leadership like you would create a great product — you hypothesize, you test and iterate, and once you get it right, you grow it.”

Here, he lays out his method that argues in favor of iterative change, not “one-and-done decrees.”

a16z’s new $2.2B fund won’t just bet on the crypto future, it will defend it

The big news on Thursday was the announcement of Andreessen Horowitz’s new cryptocurrency-focused fund. Most focused on the eye-popping $2.2 billion figure, but Alex Wilhelm dug a bit deeper into the announcement to note that a16z isn’t just pumping a ton of money into the crypto space, it’s putting on gloves to fight for it.

Alex writes that “a16z intends to run defense for crypto in the American, and perhaps global, market. Crypto-focused startups are likely unable to tackle the regulation of their market on their own because they’re more focused on product work in a particular region of the larger crypto economy. The wealthy and connected investment firm that backs them will take on the task for its chosen champions.”

5 takeaways from BuzzFeed’s SPAC deck

Image Credits: Nicholas Kamm / AFP / Getty Images

Alex Wilhelm dives headfirst into BuzzFeed’s announcement that it plans to go public via a blank check company.

He looked at its historical and anticipated revenue growth (the latter is very sunny, which is not atypical for SPAC presentations), what makes up that revenue (more “commerce” as time goes on), its long-term profitability projections, as well as fun stuff, like the Pulitzer Prize-winning BuzzFeed News.

Admit it. You’re curious.

3 issues to resolve before switching to a subscription business model

Image Credits: SaskiaAcht (opens in a new window) / Getty Images

Moving from a pay-as-you-go model to a subscription service is more than just putting a monthly or yearly price tag on a product, CloudBlue’s Jess Warrington writes in a guest column.

“Executives cannot just layer a subscription model on top of an existing business,” Warrington writes. “They need to change the entire operation process, onboard all stakeholders, recalibrate their strategy and create a subscription culture.”

Warrington says that in his role at CloudBlue, companies often approach him for “help with solving technology challenges while shifting to a subscription business model, only to realize that they have not taken crucial organizational steps necessary to ensure a successful transition.”

Here’s how to avoid that situation.

Veo CEO Candice Xie has a plan for building a sustainable scooter company, and it’s working

Image Credits: Bryce Durbin

Rebecca Bellan interviewed Veo CEO Candice Xie about the micromobility startup’s “old-fashioned way” of doing business.

“I understand people are eager to prove their unit economics, their scalability and also improve their matrix to the VC to raise another round,” Xie says. “I would say that’s OK in the consumer industry, like consumer electronics or SaaS.

“But we are in transportation. It is a different business, and transportation takes years of collaboration and building between private and public partners. … So I don’t see it happening from day one, turning over a billion-dollar company, while simultaneously having it all make sense for the cities and users.”

5 companies doing growth marketing right

Image Credits: jayk7 (opens in a new window) / Getty Images

All companies want more or less the same thing: growth. But how do you accomplish it?

Ideally, don’t start from scratch.

The race to grow faster is more pressing than ever before. … “[F]orward-thinking entrepreneurs and growth marketers simply must make time to study their competition, learn best practices and apply them to their own business growth,” Mark Spera, the head of growth marketing at Minted, writes in a guest column.

“Of course, you should still run your own experiments, but it’s just more capital-efficient to emulate than to trial-and-error from scratch. Here are five companies with growth strategies worth emulating — including the most important lessons you can begin applying to your business today.”

Musculoskeletal medical startups race to enter personalized health tech market

Image Credits: ChrisChrisW (opens in a new window) / Getty Images

With more than 50 million Americans suffering from chronic pain and musculoskeletal (MSK) medical problems, a number of startups are offering patients new products “that don’t resemble the cookie-cutter status quo,” reports Natasha Mascarenhas.

Startups hoping to enter this space have an uphill climb. Setting aside regulations that cover aspects like product packaging and marketing, they must compete with well-entrenched competition from Big Pharma as they try to partner with health insurance companies.

Natasha profiles three companies that are each taking a different approach to personalized health: Clear, Hinge Health and PeerWell.

Like the US, a two-tier venture capital market is emerging in Latin America

In the second part of an Exchange series looking at the global early-stage venture capital market, Alex Wilhelm and Anna Heim unpacked the scene in Latin America, discovering it looked a lot like the situation in the United States: slow Series A rounds, fast B rounds.

“Mega-rounds are no longer an exception in Latin America; in fact, they have become a trend, with ever-larger rounds being announced over the last few months,” they write.

Despite that, the funds aren’t being equitably distributed, and the region still lags behind its peers: Brazil has the most $1 billion startups in Latin America, with 12. The U.S., meanwhile, has 369, and China has 159.

But the Latin American market remains hot, if not quite as scorching as the U.S. and China.

Continue reading
  34 Hits
Jun
25

How reverse ETL can lighten your data load

Reverse ETL tools focus on customer data and are best used when combining data across websites, digital products, and cloud applications.Read More

Continue reading
  59 Hits
Jun
25

AI Weekly: NIST proposes ways to identify and address AI bias

The U.S. National Institute of Standards and Technology (NIST) is proposing ways to identify and address bias in AI systems.Read More

Continue reading
  62 Hits
Jun
25

Why is Didi worth so much less than Uber?

Years ago, U.S. ride-hailing giant Uber and its Chinese rival Didi were locked in an expensive rivalry in the Asian nation. After a financially bruising competition, Uber sold its China-based business to Didi, focusing instead on other markets.

The two companies are coming head-to-head again, however, as Didi looks to list in the United States. The company’s IPO filing was big news for the SoftBank Vision Fund, Tencent and Uber, thanks to its stake in Didi from its earlier transaction.

Uber is more diversified both geographically and in terms of its revenue mix. Didi is larger, more profitable and more concentrated.

But Didi appears set to be valued at a discount to Uber. By several tens of billions of dollars, it turns out. And we can’t quite figure out why.

This week, Didi indicated that it will target a $13 to $14 per-share IPO price, with each share on the U.S. markets worth one-fourth of a Class A share in the company. In more technical language, each ADR is 25% of a Class A ordinary share in Didi, if you prefer it put like that.

With 288 million shares to be sold in its U.S. IPO, Didi could raise as much as $4.03 billion, a huge sum.

What’s Didi worth at $13 to $14 per ADR? Using a nondiluted share count, Didi is valued between $62.3 billion and $67.1 billion. Inclusive of shares that may be issued thanks to vested options and the like, Didi could be worth as much as $70 billion; Renaissance Capital calculates the company’s midpoint valuation using a fully diluted share count at $67.5 billion.

Regardless of which number you prefer, Didi is not set to challenge Uber’s own valuation. Yahoo Finance pegged Uber at $95.2 billion as of this morning.

Why is the Chinese company worth less than its erstwhile rival? Let’s dig around in their numbers and find out.

Didi versus Uber

As a reminder, Uber’s Q1 2021 included adjusted revenues of $3.5 billion, a gain of 8% compared to the year-ago quarter. Uber’s adjusted EBITDA came in for the period at -$359 million.

Continue reading
  32 Hits
Jun
25

Kellogg exec on AI uses cases, implementation, and ‘culture change’

Kellogg is among the many companies embracing AI and automation as the pandemic presents new challenges -- and opportunities.Read More

Continue reading
  51 Hits
Jun
25

The RetroBeat: Now is a good time to play the first Metroid

There is still something special about the original Metroid, despite coming out in 1986 for a graphically-limited console.Read More

Continue reading
  52 Hits
Jun
25

Like the US, a two-tier venture capital market is emerging in Latin America

Earlier this week, The Exchange wrote about the early-stage venture capital market, with the goal of understanding how some startups are raising more seed capital before they work on their Series A, while other startups are seemingly raising their first lettered round while in the nascent stages of scaling.

The expedition was rooted in commentary from Rudina Seseri of Glasswing Ventures, who said abundant seed capital in the United States allows founders to get a lot done before they raise a Series A, effectively delaying these rounds. But after those founders did raise that A, their Series B round could rapidly follow thanks to later-stage money showing up in earlier-stage deals in hopes of snagging ownership in hot companies.

The idea? Slow As, fast Bs.

After chatting with Seseri more and a number of other venture capitalists about the concept, a second dynamic emerged. Namely that the “typical” early-stage funding round, as Seseri described it, was “becoming atypical because of the rise of preemptive rounds [in which] typical expectations on metrics go out the window.”

The Exchange explores startups, markets and money. Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.

Series As, she said, could come mere months after a seed deal, and Series B rounds were seeing expected revenue thresholds tumble in part to “large, multiasset players that have come down market and are offering a different product than typical VCs — very fast term sheets, no active involvement post-investment, large investments amounts and high valuations.”

Focusing on just the Series A dynamic, the old rule of thumb that a startup would need to reach $1 million in annual recurring revenue (ARR) is now often moot. Some startups are delaying their A rounds until they reach $2 million in ARR thanks to ample seed capital.

While some startups delay their A rounds, others raise the critical investment earlier and earlier, perhaps with even a few hundred thousand in ARR.

What’s different between the two groups? Startups with “elite status” are able to jump ahead to their Series A, while other founders spend more time cobbling together adequate seed capital to get to sufficient scale to attract an A.

The dynamic is not merely a United States phenomenon. The two-tier venture capital market is also showing up in Latin America, a globally important and rapidly expanding startup region. (Brazilian fintech startup Nubank, for example, just closed a $750 million round.)

This morning, we’re diving into the Latin American venture capital market and its early-stage dynamics. We also have notes on the European scene, so expect more on the topic next week. Let’s go!

What’s hot

Mega-rounds are no longer an exception in Latin America; in fact, they have become a trend, with ever-larger rounds being announced over the last few months.

The announcements themselves often emphasize round size: For instance, the recent $100 million Series B round into Colombian proptech startup Habi was touted as “the largest Series B for a startup headquartered in Colombia.” This follows other 2021 records such as “the largest Series A for Mexico ” — $65 million for online grocer Jüsto — and “the largest Series A ever raised by a Latin American fintech” —  $43 million for “Plaid for Latin America” Belvo.

Continue reading
  57 Hits