Micromobility startup Helbiz, which now operates across Europe and the USA, is merging with a special purpose acquisition company (SPAC) to become a publicly listed company, giving it a war chest to potentially roll-up smaller competitors in the space, as well as the resources to expand into “cloud” or “ghost” kitchens as part of a move into food delivery.

Helbiz intends to merge with GreenVision Acquisition Corp. (Nasdaq: GRNV) in the second quarter of 2021. The combined entity will be named Helbiz Inc. and will be listed on the Nasdaq Capital Market under the new ticker symbol, “HLBZ.”

The transaction includes $30 million PIPE anchored by institutional investors and approximately $80 million in net proceeds will be fed into Helbiz’s micromobility and advertising businesses, which have 2.7 million users.

Helbiz says the merged entity will have a valuation of $408 million, and by run Helbiz’s existing management under CEO Salvatore Palella.

Palella said: “Through this transaction, we’re committed to fulfilling our vision in revolutionizing transport by using micromobility to become a seamless last-mile solution.”

He further revealed to me that the company plans to establish “ghost kitchens” in Milan and Washington, DC later this year, with the aim of introducing a five-minute delivery time.

Helbiz has tried to differentiate itself from other players like Lime and Bird by offering e-scooters, e-bicycles and e-mopeds all on one platform.

Key to Helbiz’s offering is an integrated geofencing platform that tends to appeal to city authorities who don’t want scooters left in random places, as well as a swappable battery that enables easier charging of the devices. Its subscription service allows users to take unlimited 30-minute trips on its e-bikes and e-scooters every month.

In Europe the company currently operates a fleet of e-scooters and e-bicycles in Milan, Turin, Verona, Rome, Madrid and Belgrade, and in the U.S. it operates in Washington, DC, Alexandria, Arlington and Miami.

David Fu, chairman, and CEO of GreenVision, commented: “Helbiz has distinguished itself as the only company to offer e-scooters, e-bicycles, and e-mopeds all on one user-friendly platform… Helbiz has a proven and capital-light business model that combines hardware, software, and services with extensive customer relationships.”

Unless you’ve got someone’s Amazon Wish List, gift giving today can still be fairly difficult. You don’t necessarily know a friend or family member’s shipping address, their sizes or their particular tastes, at times. A new startup called Goody, backed by a recent $4 million fundraise, wants to help. Through its newly launched mobile gifting app, Goody lets you celebrate your friends, family and other loved ones with a gift or, soon, even just an “IOU” that lets them know you’re thinking of them.

To do so, you first download the Goody mobile app for iOS or Android, then browse across the hundreds of brands and products it offers. You also can filter these by occasion, like birthdays or holidays, or by a specific need, such as gifts to say congratulations or get well.

When you find a gift you like, you just enter the recipient’s phone number. Goody then sends a text that lets the recipient know that you’ve sent them something. The recipient clicks the link to accept the gift, which opens a website where they can see what you’ve selected, while also customizing any specific options — like their clothing size, color preferences or what flavor of cupcakes they’d like, for example.

Here, they also provide their shipping address, and the gift is sent. Afterwards, they can choose to send a thank you note, as well.

What makes this experience work is that — unlike some gifting startups in the past — Goody doesn’t require the recipient to download an app, nor do you need to know anything other than a phone number of the person you want to send a gift to.

The idea for Goody comes from co-founder and serial entrepreneur and startup investor Edward Lando, whose prior company, YC-backed GovPredict, was recently acquired. He was also the first investor in Misfits Market, serves on the board at Atom Finance and is a managing partner at Pareto Holdings, based in Miami, where Lando now lives.

Joining him on Goody are Even.com tech lead Mark Bao and Lee Linden, who notably sold his prior gifting startup Karma Gifts to Facebook back in 2012.

Lando says he was interested in working on the idea because he loves to send gifts, but thinks there’s a lot of friction involved with the process as it stands today. Meanwhile, gifts that are easier to send, like gift cards, can lack a personal touch.

“The most important thing for us is for Goody to feel highly personal,” Lando explains. “If someone sends you something through Goody [it should feel like], wow, they really thought about me — they picked out something for me. We don’t want it to feel like someone is just sending you a dollar value,” he says.

The mobile app launched in mid-December and now works with a couple dozen brand partners. Many of these are in the direct-to-consumer space or are otherwise emerging companies, like non-alcoholic aperitif Ghia, workout experience The Class, pet company Fable, wellness company Moon Juice, Raaka Chocolate and others.

Goody’s model involves a revenue share with its partners, where its cut increases the more sales its makes on the partner’s behalf.

Brands are interested in working with Goody, Lando explains, because it can help them acquire new customers with little effort on their part.

“There’s so many direct-to-consumer brands these days — thousands of them — selling online — coffee, chocolate, all these cool things,” Lando says. “And for now, their only way of getting discovered is buying ads on Facebook. We’re another way for people to discover them. We’re like a giant shopping mall for people to discover these things,” he adds.

The app, however, wants to be useful to those who also just want to stay in touch with friends and family. On this front, it’s rolling out free gifts this week called “IOUs,” for telling someone you’re thinking of them — for example, by saying something like “I owe you dinner next time I’m in town” or sharing some other more symbolic gift.

The app will also later integrate a calendar that will help you track important occasions, like birthdays and other major life events.

Goody was founded in March 2020 and the app launched in mid-December of the same year. So far, around 10,000 gifts have been sent using its service, Lando says.

In addition to the holiday season, of course, the pandemic may have played a role in Goody’s early traction.

“I think the pandemic has been a big problem for everyone. And one of the things that people frankly don’t talk about enough, in my opinion, is the psychological toll the pandemic is taking on everyone…we are all creatures that enjoy social interaction. It feels good to see other people — especially the people you care about. And when you don’t, it really drains you of energy,” Lando says.

“This is obviously not the same as seeing people in person, but I do think that Goody is a nice injection of warmth and positivity…Everyone who uses it says they feel good after using it, which I think is rare,” Lando notes.

The startup, meanwhile, has raised a little more than $4 million in early funding from investors including Quiet Capital, Index Ventures, Pareto Holdings, Third Kind Venture Capital, Craft Ventures and the founders of Coinbase (Fred Ehrsam) and Quora (Charlie Cheever), among others.

Goody is a team of nine full-time employees, based in Miami and elsewhere, working remotely. Ahead of Valentine’s Day, the company snagged a spot on a Times Square billboard to advertise its app, in the hopes of gaining new users during one of the bigger gifting holidays of the year.

The app is available as a free download on the App Store and Google Play.

Late Friday, Oscar Health filed to go public, adding another company to today’s burgeoning IPO market. The New York-based health insurance unicorn has raised well north of $1 billion during its life, making its public debut a critical event for a host of investors.

Oscar Health lists a placeholder raise value of $100 million in its IPO filing, providing only directional guidance that its public offering will raise nine figures of capital.

The eight-year-old company, launched to capitalize on the sweeping health insurance reforms passed under the administration of President Barack Obama offers insurance products to individuals, families and small businesses. The company claimed 529,000 “members” as of January 31, 2021. Oscar Health touts that number as indicative of its success, with its growth since January 31 2017 “representing a compound annual growth rate, or CAGR, of 59%.”

However, while Oscar has shown a strong ability to raise private funds and scale the revenues of its neoinsurance business, like many insurance-focused startups that TechCrunch has covered in recent years, it’s a deeply unprofitable enterprise.

Inside Oscar Health

To understand Oscar Health we have to dig a bit into insurance terminology, but it’ll be as painless as we can manage. So, how did the company perform in 2020? Here are its 2020 metrics, and their 2019 comps:

Total premiums earned: $1.67 billion (+61% from $1.04 billion).Premiums ceded to reinsurers: $1.22 billion (+113%, from $572.3 million).Net premium earned: $455 million (-3% from $468.9 million).Total revenue: $462.8 million (-5% from $488.2 million).Total insurance costs: $525.9 million (-8.7% from $576.1 million).Total operating expenses: $865.1 million (+16% from $747.6 million).Operating loss: $402.3 million (+56% from $259.4 million).

Let’s walk through the numbers together. Oscar Health did a great job raising its total premium volume in 2020, or, in simpler terms, it sold way more insurance last year than it did in 2019. But it also ceded a lot more premium to reinsurance companies in 2020 than it did in 2019. So what? Ceding premiums is contra-revenue, but can serve to boost overall insurance margins.

As we can see in the net premium earned line, Oscar’s totals fell in 2020 compared to 2019 thanks to greatly expanded premium ceding. Indeed, its total revenue fell in 2020 compared to 2019 thanks to that effort. But the premium ceding seems to be working for the company, as its total insurance costs (our addition of its claims line item and “other insurance costs” category) fell from 2020 to 2019, despite selling far more insurance last year.

Sadly, all that work did not mean that the company’s total operating expenses fell. They did not, rising 16% or so in 2020 compared to 2019. And as we all know, more operating costs and fewer revenues mean that operating losses rose, and they did.

Oscar Health’s net losses track closely to its operating losses, so we spared you more data. Now to better understand the basic economics of Oscar Health’s insurance business, let’s get our hands dirty.

The French government and the government-backed initiative La French Tech unveiled the new indexes that identify the most promising French startups. The 40 top-performing startups are called the Next40, and the top 120 startups are grouped into the French Tech 120.

The Next40 and French Tech 120 are somewhat new as this is only the second version of those indexes. Out of the 120 startups that were in last year’s French Tech 120, 90 of them are still in this year’s index — 30 are newcomers as there were 123 startups in last year’s French Tech 120.

Combined, they generate close to €9 billion in revenue and provide a job to 37,500 people. Revenue in particular is up 55% compared to last year’s French Tech 120.

Here’s a list of the French Tech 120 — the red logos are part of the Next40:

There are two ways to get accepted in the Next40:

You have raised more than €100 million over the past three years ($120 million at today’s rate) or you are a unicorn, which means your company’s valuation has reached $1 billion or more.You generate more than €5 million in revenue with a year-over-year growth rate of 30% or more for the past three years.

As for the remaining 80 startups in the French Tech 120:

40 of them have raised more than €20 million in a funding round over the past three years.40 of them are selected based on the annual turnover and growth rate.

Of course, those indexes are limited to private French companies. For the French Tech 120, there are at least two startups per administrative region.

Based on those metrics, only a handful of the startups in the French Tech 120 have a female CEO and the French government thinks tech startups should do more when it comes to diversity and inclusion. That’s why a small group of people are going to work on a roadmap and some recommendations to improve those numbers.

Representatives of six different startups in the French Tech 120, as well as people from Sista, Tech Your Place and Future Positive Capital, will get together to work on those topics.

In addition to a cool logo for your website, being part of the French Tech 120 comes with some perks. Those companies can access a network of French Tech representatives in different public administrations.

For instance, it’s easier for your company if you want to get visas for foreign employees, obtain a certification or a patent, if you want to sell your product to a public administration, etc.

There are two new additions to the French Tech network. Someone from the Conseil d’État can help you when it comes to legal compliance. The government has also signed a partnership with Euronext to educate entrepreneurs about going public.

InEvent, a startup powering virtual and hybrid events, is announcing that it has raised $2 million in seed funding from Storm Ventures.

That’s just a tiny fraction of the $125 million that online events platform Hopin raised last fall — in fact, a recent Equity episode suggested that Hopin might be the fastest growth story of the current startup era.

CEO Pedro Góes told me that even in a world of more established and better-funded platforms, his team sees an opportunity to break out by focusing on business-to-business events.

“There’s an opening in the space for us to be the leader that we want on B2B,” Góes said. “We don’t intend to compete with platforms in the B2C market.”

Put another way, InEvent is less focused on replicating giant consumer events and more on helping businesses hold virtual events where they can connect with clients and partners. Góes said this is something that he and his co-founders Mauricio Giordano and Vinicius Neris saw in their previous work running a digital agency, where they were often asked to help with events in this vein.

“Since we had a lot of experience with events, we could see where the industry was broken and how to fix it,” he said.

Góes suggested that two of the big needs for B2B events are customization and support, so InEvent has created what he described as a “really beautiful” product that can still be customized with the organizer’s branding, and the company also offers 24-hour support.

The platform is a virtual lobby where participants can browse all the programming, a video player, a registration system, the ability to create a conference mobile app and more. Góes said the goal was to build something that was “really flexible,” allowing organizers to run everything from within InEvent while also allowing them to incorporate outside tools, whether that’s video platforms like Zoom or CRM software like Salesforce, Marketo and HubSpot.

InEvent’s founders are from Brazil, but the startup is headquartered in Atlanta and has employees in 13 countries. It says it’s been used by more than 500 customers for global events, including DowDupont, Coca-Cola and Santander.

With the new funding, Góes told me the startup will be able to expand the team (he was proud to note the team’s diversity — 50% of its managers are women, and 50% of its managers come from a Latinx background). It also will continue to develop the product, for example by improving the video player and adding more marketing automation.

And when the pandemic ends and large-scale, in-person conferences become possible again, Góes predicts there will still be plenty of appetite for what InEvent can do, because more events will bring online and in-person elements together.

“We have different clients where we have a website, we have a mobile app, but we also have hardware [to] connect with in-person,” he said. After all, if you’re at a sprawling conference like CES, it might still be convenient to chat with another attendee through the mobile app, rather than traveling two miles to see them face-to-face. “For us, what we are building, the technology for virtual and in-person, is the same thing.”

Aydin Senkut is a Swiss Army knife of an investor. He has been on the Midas List for the past seven years, with early investments in companies like Shopify, Rovio, Fitbit, Ayden, Credit Karma, SoundHound and more.

One such investment is Guideline, an enterprise tech company focused on giving small businesses a simplified way to offer affordable 401ks to employees. Guideline has raised nearly $140 million from investors such as Tiger Global Management, Greyhound, Generation Investment Management, Propel and, of course, Felicis.

It should go without saying that we’re thrilled to have Senkut and Guideline founder and CEO Kevin Busque join us for this week’s episode of Extra Crunch Live.

The new and improved Extra Crunch Live pairs founders and the investors who led their earlier rounds to talk about how the deal went down, from the moment they met to the conversations they had (including some disagreements) to the relationship as it exists today. Hell, we may even take a peek at the original pitch deck that made it all happen.

Then, we’ll turn our eyes back to you, the audience. That same founder/investor duo (in this case, Guideline founder and CEO Kevin Busque and Felicis’ Aydin Senkut) will take a look at your pitch decks and give their own feedback. (If you haven’t yet submitted a pitch deck to be torn down on Extra Crunch Live, you can do so here.)

The hour-long episode is sandwiched between two 30-minute rounds of networking. From start to finish, it goes from 11:30 a.m. PST/2:30 p.m. EST to 1:30 p.m. PST/4:30 p.m. EST. And Extra Crunch Live will come to you at the same time, every week, with a new pair of speakers.

In this case, we’ll be talking to Senkut and Busque about the $15 million Series B investment that Felicis led in the startup: How did they meet, what attracted them to one another, and ultimately, what made them decide to be financially bound together for the foreseeable future.

For now, let’s learn a bit more about Senkut and Busque, shall we?

Before starting Felicis Ventures (and serving as managing partner), Senkut was a senior manager at Google responsible for strategic partner development and account management in Asia Pacific. He joined the search giant in 1999 as its first product manager to launch Google’s first international sites. He then became the company’s first international sales manager.

Alongside an impressive portfolio of both angel and institutional investments, Senkut is about as well-rounded as a tech leader can be.

Kevin Busque, meanwhile, founded Guideline in 2015 and has since amassed more than 17,500 small businesses on the platform with nearly $4 billion in assets under management. Before Guideline, Busque spent seven years at TaskRabbit where he was a co-founder and VP of Technology. Busque deeply understands what it takes to go from idea to MVP to product market fit to hypergrowth.

This episode of Extra Crunch Live airs at 3 p.m. EST/12 p.m. PST on Wednesday, February 10.

As a reminder, Extra Crunch Live is for Extra Crunch members only. We’re coming to you with a new pair of speakers every week, and you can catch everything you missed on demand if you can’t join us live. It’s worth the cost of the subscription on its own, but EC members also get access to our premium content, including market maps and investor surveys. Long story short? Subscribe, smarty. You won’t regret it.

Senkut and Busque join an impressive list of guests on the show.

Full details to register for these events are below.

See you on Wednesday!

On my run yesterday, I listened to Tim Ferriss interview Naval Ravikant on Happiness, Reducing Anxiety, Crypto Stablecoins, and Crypto Strategy.

I know both Tim and Naval. I have a mostly virtual relationship with each of them (I think I’ve been in the same physical space with Tim twice and never with Naval), but they are two people I’ve learned a lot from over the past decade.

When I run, I listen to one of four things.

NothingPodcastsAudible Books (mostly science fiction)Music, but generally my long time standards (Pink Floyd, Boston, Red Hot Chili Peppers, Rush)

I go through phases, and I’m in a Podcast / Audible phase. I’m a little bored of Diamond Age (I’m halfway through in a slow spot), so I fired up a random Tim Ferriss podcast. I noticed he’d done one recently with Naval, so that was it.

The crypto stuff was good, but I was much more intrigued by everything else. I’m a big fan of Richard Feynman, so when Naval started rolling out Feynman quotes, he had me. There was a ton of wonderful in the back and forth between Tim and Naval, and when Naval got on a roll on a topic, the running just vanished into the background.

A fun sleeper idea in the middle of things was that Naval, who has over a million followers, doesn’t follow anyone on Twitter. I only use Twitter to broadcast things these days, so I think I’ll try that hack for a while and see if it works.

I haven’t been blogging much lately – on purpose. I’ve been trying to reset a few things in my writing and decided to go inward for a few months, starting around my birthday. I believe the reset has happened and listening to Naval and Tim helped reinforce a few things I’ve been playing around with now that I’m 55 years old.

Tim / Naval – thanks. I enjoyed listening to y’all.

The post The Wonderfulness of Tim Ferriss and Naval Ravikant appeared first on Feld Thoughts.

Paris-based Homa Games has raised $15 million to enhance its factory for building hypercasual mobile games.Read More

Japanese chipmaker Renesas Electronics has agreed to buy Dialog Semiconductor in an all-cash deal worth $5.9 billion.Read More

Jackbox Games CEO Mike Bilder talks about the studio's huge year and how it used that success to give back to people in need.Read More

Autonomous vehicle startup Pony.ai has raised $100 million more, bringing its total raised to over $1 billion at a $5.3 billion valuation.Read More

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here. 

Ready? Let’s talk money, startups and spicy IPO rumors.

It’s been a bizarre few weeks, with Robinhood raising a torrent of new funds to keep its zero-cost trading model afloat during turbulent market conditions, other neo-trading houses changing up their business model and more. But amidst all the moves in startup-land, something has been itching in the back of my head: Why are several rich people pumping crappy assets?

It’s fine for a retail investor to share trading ideas amongst themselves; it has happened, will happen, and will always happen. But we’ve seen folks like Elon Musk and Chamath Palihapitiya use their broad market imprint to encourage regular folks — directly and indirectly — to buy into some pretty silly trades that could lose the retail crowd lots of money that they may not be able to afford.

Think of Elon coming back to Twitter to pump Doge, a joke of a cryptocurrency that is highly volatile and mostly useless. Or Chamath putting money into GameStop publicly, a move that he is better equipped than most to get into and out of. Which he did. And made money. Most folks that played the GameStop casino have not been as lucky, and many have lost more than they can afford.

Caveat emptor and all that, but I do not love folks with savvy and capital leading regular people into risky trades or into assets that are not backed by long-term fundamentals, but instead a small shot at near-term returns. Yoof.

Finally, keeping up the theme of general annoyance, Senator Hawley is back in the news this week with an attention-focused announcement of an idea to block big tech companies from buying smaller companies. As you would expect from the insurrection-friendly Senator, it’s not an incredibly serious proposal, and it’s written so vaguely as to be nearly humorous.

But as I wrote here on my personal blog about all of this, what does matter out of the generally irksome pol is that there is bipartisan interest in limiting the ability of big tech companies to buy smaller companies. For startups, that is not good news; M&A exits are critical liquidity events for startups, and big companies have the most money.

It’s no sauté of my onions if startup valuations fall, but I think there’s been plenty of attention noting that some Democrats and some Republicans in the U.S want to undercut top-down tech M&A, and not nearly enough notice concerning what the effort might do to startup valuations and funding. And if those metrics dip, there could be fewer upstarts in the market actually working to take on the giants.

Food for thought.

Market Notes

The Exchange caught up once again with Unity CFO Kim Jabal. We did so not merely to make jokes with her about games that we like or don’t like, but to keep tabs on how Jabal thinks as the financial head of a company that was private when she joined, and public now. A few observations:

GAAP v. Non-GAAP: I asked about Unity’s recent Q4 net income, measured using generally accepted accounting principles, or GAAP. It was impacted by some share-based comp numbers. Jabal was clear that her team and investors are more focused on non-GAAP numbers. Why? They strip out non-cash charges like share-based comp and provide a different perspective into corporate performance. This is standard startup practice, but her comment shows how if your company is growing quickly post-IPO, you can stick to adjusted metrics and have no issue. If growth slows, I bet that changes.COVID: Will the COVID bump to gaming stick? Per Jabal, when her company has seen a bump in engagement historically, results don’t tend to fall back to prior plateaus. I wonder if this will be the case for all COVID-boosted parts of the startup and big-tech landscape. If so, it’s very good news.Know your metrics: Jabal said that her key metrics are non-GAAP operating margin and free cash flow — apart from growth, I’d add. That’s super clear and easy to grok. Startup CEOs, please have a similar distillation ready when we chat about your latest round.

And speaking of startups, let’s talk about a company that I’ve had my eye on that recently raised more capital: Deepgram. I covered the company’s Series A, a $12 million round in March 2020. Now it has raised $25 million more, led by Tiger, so this is a fun case of big money investing early-stage, I think. Regardless, Deepgram was a bet on a particular model for speech recognition, and, then, its market. its new investment implies that both wagers came out the right way up.

And I was chatting with the CEO of Databricks recently (more here on its latest megaround), who mentioned the huge gains made in AI, and more specifically around generative adversarial networks (GANs) NLP, and more. Our read is that we should expect to see more Deepgram-ish rounds in the future as AI and similar methods of approaching data make their way into workflows.

And fintech player Payoneer is going public. Via a SPAC. You can read the investor presentation here. Payoneer is not a pre-revenue firm going out via a blank check; it did an expected $346 million in 2020 rev. I’m bringing it to you for two reasons. One, read the deck, and then ask yourself why all SPAC decks are so ugly. I don’t get it. And then ask yourself why isn’t it pursuing a traditional IPO? Numbers are on pages 32 and 40. I can’t figure it out. Let me know if you have a take. Best response gets Elon’s dogecoin.

Various and Sundry

Wrapping up this week, TechCrunch has a new newsletter coming out on apps that is going to rule. Sarah Perez is writing it. You can sign up here, it’s free!

And if you need a new tune, you could do worse than this one. Have a great weekend!

Alex

Some fresh ideas for how to stop social media algorithms from damaging society by amplifying lies and fringe ideas.Read More

Qualcomm is working to reduce the compute power needed for visual AI to enable chips that are smaller, cheaper, and less power hungry.Read More

As you’d expect after the holiday season, gaming brands pulled back from advertising on TV in January, down 60%.Read More

The PS5 is facing component shortages that may hurt its sales in the first year, but it's not just the PS5 that is affected.Read More

Demo days at startup accelerators are a pretty big deal around here.

These events aren’t just a chance to review the latest cohort of hopeful entrepreneurs — they also showcase the technology, products and services that will compete for VC and consumer attention over the next few years.

You never know where a hit will come from, which is why these events capture our attention. Here’s just one example from Y Combinator’s Summer 2013 Demo Day:

Positioning itself as the “FedEx of today,” it hopes to provide a logistics framework that goes beyond food and can be used for any type of on-demand order.

That startup was DoorDash, by the way.

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

Full disclosure: In 2016, I was 500 Startups’ Journalist-in-residence. I covered one demo day in person, spending most of my time backstage where founder teams practiced their pitches.

It was quite a scene: Several people literally jumped up and down to shake off their nervous energy, but I also recall one who calmly recited their lines while gazing through a window.

Yesterday, Jon Shieber and Alex Wilhelm covered 500 Startups’ 27th virtual demo day and selected eight companies as their favorites:

StackAdaptyMightyFlyOmnitron SensorsAWSMMemechatRyu GamesApothecary

Thank you very much for reading Extra Crunch this week! I hope you have a safe, relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

TechCrunch’s favorite companies from 500 Startups’ latest demo day

How the GameStop stonkathon helped Robinhood raise $3.4B last week

I’ve never used “stonkathon” in a headline before, but it’s been that kind of week.

The war between hedge funds and day traders over GameStop vaulted discount trader Robinhood into the headlines for days.

But how did it affect the company’s financial health?

This morning, Alex Wilhelm examined why Robinhood’s investors were willing to inject $3.4 billion more into the company in just one week.

“More trades means more PFOF (payment for order flow) revenue,” says Alex. “And Robinhood effectively doubled in size.”

Udemy’s new president discusses the reskilling company’s future

Reporter Natasha Mascarenhas interviewed Greg Brown, new president of digital learning platform Udemy, after his company announced that it surpassed $100 million ARR.

A new arm of the company, Udemy for Business, just secured a 100,000-employee contract with Cisco Systems to offer software, business and technology courses.

“The opportunity that the company sees has really forced us to reallocate resources and strategy,” said Brown.

Why one Databricks investor thinks the company may be undervalued

After scaling its ARR to $425 million and reaching a valuation of $28 billion, data analytics company Databricks is clearly IPO-ready.

Battery Ventures has backed Databricks since 2017, so Alex Wilhelm interviewed General Partner Dharmesh Thakker to understand why he thinks the company may be undervalued.

“Whether it’s digital transformation, whether it’s analytics, data is everywhere,” said Thakker. “So the TAM is massive.”

4 strategies for deep tech founders who are fundraising

Deep tech founders face special challenges when pitching investors: they usually don’t have a product, customers or revenue.

It’s difficult enough to ask a stranger for a check when there’s a beta product, but how do you drum up interest in an unproven idea that may exist largely in your imagination?

“Early-stage investors are in the business of funding dreams,” says angel investor Jessica Li.

“Investors are less interested in the intricacies of your technology and more interested in what impact it can create.”

Step one: use storytelling to highlight your big vision.

Edtech valuations aren’t skyrocketing, but investors see more exit opportunities

Investors funded edtech startups with $10 billion last year as the pandemic forced widespread adoption of remote learning.

The valuations of these companies aren’t rising at the same rate as SaaS or fintech startups, but “where edtech lacks in impressive valuations, investors see it gaining in exit opportunities,” writes Natasha Mascarenhas.

For this edtech investor survey, she interviewed:

Deborah Quazzo, managing partner, GSV Ventures (an education fund backing ClassDojo, Degreed and Clever)Ashley Bittner, founding partner, Firework Ventures (a future-of-work fund with portfolio companies LearnIn and TransfrVR)Jomayra Herrera, principal, Cowboy Ventures (a generalist fund with portfolio companies Hone and Guild Education)John Danner, managing partner, Dunce Capital (an edtech and future-of-work fund with portfolio companies Lambda School and Outschool)Mercedes Bent and Bradley Twohig, partners, Lightspeed Venture Partners (a multistage generalist fund with investments including Forage, Clever and Outschool)Ian Chiu, managing director, Owl Ventures (a large edtech-focused fund backing highly valued companies including BYJU’s, Newsela and MasterClass)Jan Lynn-Matern, founder and partner, Emerge Education (a leading edtech seed fund in Europe with portfolio companies like Aula, Unibuddy and BibliU)Benoit Wirz, partner, Brighteye Ventures (an active edtech-focused venture capital fund in Europe that backs YouSchool, Lightneer and Aula)Charles Birnbaum, partner, Bessemer Venture Partners (a generalist fund with portfolio companies including Guild Education and Brightwheel)Daniel Pianko, co-founder and managing director, University Ventures (a higher-ed and future-of-work fund that is backing Imbellus and AdmitHub)Rebecca Kaden, managing partner, Union Square Ventures (a generalist fund with portfolio companies including TopHat, Quizlet and Duolingo)Andreata Muforo, partner, TLcom Capital (a generalist fund backing uLesson)

Deep Science: AIs with high class and higher altitudes

In his latest recap of recent breakthroughs in applied science, Devin Coldewey looked at how researchers are using AI to:

Categorize thousands of pieces of classical musicRead MRIs to spot patients with schizophreniaTrack elephant herds via satelliteImprove accessibility on mobile phones

Spotify Group Session UX teardown: the fails and their fixes

In the latest of a series of articles that examines user experiences for consumer apps, UX expert Peter Ramsey and TechCrunch reporter Steve O’Hear studied Spotify Group Session, the shared-queue feature that permits users to create playlists collaboratively.

“Many of these lessons can be applied to other existing digital products or ones you are currently building,” such as the need to add context for important decisions and how to best use “react and explain” prompts.

Lightspeed’s Gaurav Gupta and Grafana’s Raj Dutt discuss pitch decks, pricing and how to nail the narrative

Extra Crunch Live returned this week with two guests: Lightspeed Venture Partners’ Gaurav Gupta and Raj Dutt, co-founder and CEO of Grafana Labs.

In addition to walking us through the presentation that encouraged Lightspeed to invest in Grafana’s Series A, the duo also gave direct feedback to audience members about their pitch decks.

Watch a video with our complete episode, or read highlights from the chat to get Gupta and Dutt’s insights on what goes into a successful pitch deck.

New episodes of Extra Crunch Live drop each Wednesday at 12 p.m. PST/3 p.m. EST/8 p.m. GMT.

Here’s a breakdown of the complete episode with Gaurav Gupta and Raj Dutt:

How they met — 2:00Grafana’s early pitch deck — 12:00The enterprise ecosystem — 25:00The pitch deck teardown — 32:00

Subscription-based pricing is dead: Smart SaaS companies are shifting to usage-based models

Some IT managers may still be debating the merits of usage-based pricing versus subscription-based models, but SaaS investors have made up their minds.

Compared to their rivals, companies that employ usage-based pricing trade at a 50% revenue multiple premium. You can argue with success, but seven out of the nine IPOs since 2018 with the best net dollar retention offer usage-based models.

If you’re a founder who hopes to break into the $100M ARR club, this guest post can help you identify the right usage metrics for creating a sustainable customer journey.

For more actionable advice regarding SaaS pricing and sales, see these previously published Extra Crunch stories:

Should your SaaS startup embrace a bottom-up GTM strategy?How should SaaS companies deliver and price professional services?

Bumble IPO could raise more than $1B for dating service

How many dating networks can the public market support?

In Tuesday’s column, Alex Wilhelm examined the latest IPO filing from relationship-finding service Bumble.

The company set a range of $28 – $30 per share, so Alex set out to find its simple and diluted valuations, how much it expects investors to pay and “how those stack up compared to Match Group’s own numbers.”

Robinhood’s Q4 2020 revenue shows a return to growth

Discount brokerage Robinhood stayed in the news last week as it became a proxy battlefield for institutional and retail investors, but its backers “put in another billion just last week,” says Alex Wilhelm.

Why were investors so bullish after days of screaming headlines?

In yesterday’s column, Alex unpacked Robinhood’s Q4 2020 numbers, “which shows a return to sequential-quarterly growth at the trading upstart.”

Trading app Public drops payment for order flow in favor of tips

Before Redditors came after GameStop, zero-cost trading service Public says it was seeing “steady ~30%” month-over-month growth.

Last week, however, “new user signups went up 20x,” founders Leif Abraham and Jannick Malling told TechCrunch.

After closing a $65 million Series C, Public announced yesterday that it would “stop participating in the practice of Payment for Order Flow,” replacing PFOF with an “optional tipping feature.”

Customer advisory boards are a gold mine for startup brand champions

Startups that don’t directly engage their earliest customers with purpose and intention are leaving money on the table.

Creating a Customer Advisory Board (CAB) is a proven method for soliciting product ideas, testing marketing plans and turning early users into loyal brand advocates.

Before you call a CAB, read this post to find out how to identify customers who’ll contribute real insights, establish goals and “pick members who play well together.”

Best practices as a service is a key investment theme to watch in 2021

Identity and access management company Okta announced in a study last week that its largest customers use an average of 175 different applications to manage their operations.

Managing Editor Danny Crichton says this “explosion of creativity and expressiveness and operational latitude” offers widespread benefits, but it’s “also a recipe for disaster,” since many end users aren’t well-trained when it comes to using these tools.

This enterprise version of the Tower of Babel creates an opening for companies that offer “best practices as a service,” says Danny. “The next generation of SaaS software has to take those abecedarian building blocks and forcibly guide users to using those tools in the best possible way.”

This week, flexible workspace operator (and one-time unicorn) Knotel announced it had filed for bankruptcy and that its assets were being acquired by investor and commercial real estate brokerage Newmark for a reported $70 million.

Knotel designed, built and ran custom headquarters for companies. It then managed the spaces with “flexible” terms. In March 2020, it was reportedly valued at $1.6 billion.

At first glance, one might think that the WeWork rival, which had raised about $560 million since its 2016 inception, was another casualty of the COVID-19 pandemic. 

But New York-based Knotel was reportedly in trouble — facing a number of lawsuits and evictions — before the pandemic had even hit, according to multiple reports, such as this one in The Real Deal.

As such, some industry observers believe the company’s Chapter 11 filing was inevitable despite it reaching unicorn status after raising $400 million in Series C funding in August 2019.

 

Newmark’s purchase of Knotel’s assets is believed to an effort to recoup some of its investment, according to Jonathan Pasternak, bankruptcy attorney and partner at New York-based Davidoff Hutcher & Citron.

Anytime a company that has raised more than half a billion dollars basically implodes, it’s worth taking a look at the roller coaster ride it was on before it got to that point.

2016

Virgin Mobile co-founder Amol Sarva and former VC Edward Shenderovich founded Knotel, essentially reversing the WeWork model. There’s hype around the company in its early days.

2017

Knotel raised a Series A round of $25 million in February from investors such as Peak State Ventures, Invest AG, Bloomberg Beta and 500 startups. It marketed its offering as “headquarters as a service” — or a flexible office space that could be customized for each tenant while also growing or shrinking as needed. 

2018

In April, Knotel announced the close of a $70 million Series B financing led by Newmark Knight Frank and The Sapir Organization. In August, the company told me that it was operating over 1 million square feet across 60 locations in New York, London, San Francisco and Berlin, and that it was on track to reach 2.5 million square feet and $100 million in revenue by year’s end. Revenue growth had increased by 300% year over year, according to the company. Customers and users and clients ranged from VC-backed startups Stash and HotelTonight to enterprise customers such as The Body Shop. 

“What they’re doing is different,” said Barry Gosin, CEO of Newmark Knight Frank, in a press release, at the time of the round. “It’s a new category the industry hasn’t seen and is rapidly adopting. We’ve watched their ascent from a distance and are now thrilled to join them on the journey. It marks a shift in how owners and tenants are coming together.”

2019

In August, Knotel announced the completion of a $400 million financing, led by Wafra, an investment arm of the Sovereign Wealth Fund of Kuwait. With the round, the company had achieved unicorn status and was being touted as a formidable WeWork competitor. At the time, Knotel said it operated more than 4 million square feet across more than 200 locations in New York, San Francisco, London, Los Angeles, Washington, D.C., Paris, Berlin, Toronto, Boston, São Paulo and Rio de Janeiro. 

In a statement at the time, CEO Sarva said: “Knotel is building the future of the workplace, and we are excited to welcome a group of investors who believe passionately in our product, vision and ability to execute. Wafra will help us continue our rapid global expansion and solidify our position as the leader in a fast-growing, trillion-dollar flexible office market.”

2020

In late March, Forbes reported that Knotel had laid off 30% of its workforce and furloughed another 20%, due to the impact of the coronavirus. At the time, it was valued at about $1.6 billion. 

The company had started the year with about 500 employees. By the third week of March, it had a headcount of 400. With the cuts, about 200 employees remained with the other 200 having either lost their jobs or on unpaid leave, according to Forbes. 

“Business as usual is over,” Amol Sarva, Knotel’s CEO and co-founder, said in a statement to Forbes. “Knotel has decided to take sharp action to prepare for the worst case — a long health and economic crisis.”

In the second quarter, Knotel’s revenue slipped by about 20% to about $59 million compared to the first quarter, reported Forbes. Multiple landlords had filed lawsuits against the company.

By July, Forbes had reported that Knotel was attempting to raise as much as $100 million, according to various sources “familiar with the matter.”

2021

Knotel files for bankruptcy, agrees to sell assets to investor Newmark for a reported $70 million after being valued at $1.6 billion less than one year prior.

“Newmark’s commitment offers a path forward amidst this challenging climate,” CEO Sarva said in a statement. “We are optimistic that, through a successful restructuring, we can refocus on our mission of providing state-of-the-art, tailored flex space in key U.S. and international markets.”

To facilitate the transaction under Section 363 of the United States Bankruptcy Code, an affiliate of Newmark agreed to provide Knotel with about $20 million in cash as DIP financing to support Knotel through the bankruptcy process.

Just as the startup and VC world watched as WeWork lost a significant amount of value over the past two years, we’re paying attention to the demise of Knotel and wondering what this means for the flexible workspace sector. As much of the world continues to work from home and office buildings remain mostly vacant as this pandemic rages, our guess is that things will only get worse before they get better.

 

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