Here comes the next IPO wave

This is The TechCrunch Exchange, a newsletter that goes out on Saturdays, based on the column of the same name. You can sign up for the email here.

Are you tired? I am. What a week. But, if you kept your eyes off American politics and instead focused on the stock market, this was not a week of stress at all. It was a celebration.

Yes, the election appears to be influencing stocks, with investors delighted at what could be a divided government. Their bet is that with different parties in control of different bits of the government, nothing will happen, and thus taxes and regulation won’t change. You can handicap that as you wish.

Regardless, this week’s stock market boom was a multifaceted affair. Software stocks rallied as the summer-era trade appeared to come back into vogue, in which investors pour capital into SaaS and cloud companies in hopes of parking their wealth into something with growth potential. Software earnings also look pretty good thus far (we chatted with JFrog and Ping Identity and BigCommerce), improving on their early performance.

Uber and Lyft drove their own rally as California voters decided that their long-standing labor arbitrage would stand. And then Uber failed to vomit on itself during its earnings report. Not bad.

Big tech stocks rose, as well. All this is to say that after some fear in the market a week ago, things are back to being heated for tech companies. And it is, as we expected, flushing out the next wave of IPOs.

Airbnb is expected to file publicly early next week (we have four questions here that we cannot wait to get answered), and Upstart actually filed this week, which you probably missed because you were watching something else. No worries. We are here for you.

Another notable possible include DoorDash, now unshackled from its expensive California regulatory battle. How many debuts shall we see? Hopefully many.

Market Notes

Upstart’s IPO filing brings a fintech IPO to the fore, and overall its numbers are pretty good if you discount worries about its customer concentration. Its debut could augur well for fintech as a whole, a segment of the startup population that, when viewed through the lens of PayPal’s earnings, is having a hell of a year.

Fintech VCs are active, as well, dropping over $10 billion into startups focusing on financial technology products and services in Q3. Payments, insurtech, wealth management and banking startups caught our eye as sectors to watch in that niche.

It was not a perfect week for fintech, however, as the U.S. government decided that the Visa-Plaid deal should not happen. Damn. As discussed on Equity, this deal could limit M&A interest for fintech startups from large players. Does that mean that fintech IPOs, then, have to carry the liquidity bucket for the sector?

Maybe! And if so, Upstart’s impending flotation seems to take on extra importance. We’ll keep you posted.

• Moving along, the Ant Group IPO termination by the Chinese government was probably the biggest tech story of the week, though as the company is worth a few hundred billion, it’s not really a startup event. For China, it’s a bad day, as it undercuts its goal of becoming a global financial center. For Ant, it’s a huge setback. For Jack Ma, it’s a warning, if not more.
• The nine-figure neobank rounds? Not done yet.
• Pony’s epic raise this week makes the point that self-driving tech is not dead. Indeed, the great race to let computers drive continues. Just more slowly than everyone had hoped.
• Udacity underscored the edtech boom by raising $75 million in debt and reported “Q3 bookings up by 120% year-over-year and average run rates up 260% in H1 2020.” Our own Natasha Mascarenhas also reported on booming edtech M&A volume, again highlighting that edtech has gone from zero to hero in 2020, at least from a VC perspective.
• $30 million for Hustle Fund, and €66.5M for All Iron Ventures, among other VC raises this week.
• ByteDance is looking for $2 billion at a valuation of $180 billion? Also, what happened to the whole TikTok fiasco?
• And TikTok’s rival’s IPO filing really shows how hard it is to build a similar network. It’s also very expensive.

Various and Sundry

Sticking under our target word count for the first time in so long I nearly forgot what it is, here are a few iotas and crumbs for your weekend:

• The volcano method for understanding the fintech revolution
• How Fortnite plans to get back onto iOS
• VCs dropping Form D filings on Election Day did not prevent us from finding them
• Some good news and some great news

Have a good weekend. Stay safe. Fight COVID-19. And listen to this.

Alex

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The gig economy, cannabis and car data are tech-election winners in 2020

Editor’s note: Get this free weekly recap of TechCrunch news that any startup can use by email every Saturday morning (7 a.m. PT). Subscribe here.

The US is settling in for some new form of national gridlock, but state and local propositions are busy defining how technology businesses will be allowed to work (legally) in the US. Policies on topics as broad as customer usage and employment or as narrow as a drug chemical got the vote across the country. The results provide a blueprint for what you might expect to see in many more places.

Perhaps the best example is Proposition 22 in California, where a majority of the voters approved of new rules that allow companies like Uber and Lyft to continue operating with drivers as independent contractors. A previous piece of state legislation and related lawsuit would have required the companies to classify many drivers as full-time employees. Here’s Megan Rose Dickey, on the impact of the result:

Throughout the case, Uber and Lyft have argued that reclassifying their drivers as employees would cause irreparable harm to the companies. In the ruling last month, the judge said neither company would suffer any “grave or irreparable harm by being prohibited from violating the law” and that their respective financial burdens “do not rise to the level of irreparable harm.”

But now that Prop 22 is projected to pass, this lawsuit has far less legal ground to stand on. It’s also worth noting that Uber has previously said it may pursue similar legislation in other states.

Naturally, the affected companies got a boost to their stock prices after the vote was called, and Uber is already working on taking the campaign global.

The US presidential election of 2020 has been the most technologically sophisticated ever, but I’m gonna skip because there are relatively few startup angles for us here. However, if you are trying to craft user policies about politics, consider this election-eve analysis from Taylor Hatmaker about how Facebook and Twitter have changed their approaches since 2016.

Other notable startup-y items from our election coverage:

Cannabis legalization measures set to pass in 5 states

Portland, Maine passes referendum banning facial surveillance

Massachusetts voters pass a right-to-repair measure, giving them unprecedented access to their car data

Calm’s hilarious CNN ad campaign sent the meditation app flying up App Store charts

YC-backed nonprofit VotingWorks wants to rebuild trust in election systems through open source

Something else happened in government this week that was not about the election — but may still be relevant to your startup. The SEC will now let companies raise up to $5 million per year in equity crowdfunding, up from a previous rule of $1.07 million. Lucas Matney has more for Extra Crunch.

The next billion-dollar e-commerce company will be a B2B marketplace

Business-to-business transactions are full of complexities beyond the consumer space, including four types of standard payment methods, sophisticated financing tools, bulk discounts, contractual pricing, delivery schedules, insurance and compliance. Merritt Hummer of Bain Capital Ventures breaks it down in a big guest post for Extra Crunch:

[I]t’s no wonder B2B e-commerce has been slower to digitize than B2C. From product discovery through the checkout process, a consumer buying a bag of licorice looks nothing like a retailer buying 100,000 bags of licorice from a distributor. The good news for B2B marketplace founders is that, based on the parameters above, there are many creative ways to extract value from transactions that go beyond the GMV take rate. Let’s explore some of the creative ways to monetize a B2B marketplace.

Instead of trying to take a cut of the gross merchandise value, like what Apple does with the App Store, successful startups have to be creative. These can include data monetization, embedded financial services, targeted advertising, private-label products, subscription fees and sampling fees. Here’s an excerpt from Hummer about that last one:

In most B2B verticals, individual transactions are so large that charging fees on a percentage basis means scaring potential customers away. In high-value markets with infrequent orders, charging a take rate on purchase orders will be perceived as unfair, especially when suppliers and buyers know each other already. But the fee-per-sample model is a unique wedge to aggregate suppliers and buyers, who often sample supplies before placing large orders.

One of our portfolio companies, Material Bank, has used this monetization strategy with success. Material Bank is a B2B marketplace for construction and interior design materials that warehouses samples (fabric swatches, paint chips, flooring materials, wall coverings, etc.) from hundreds of brands. Architects and interior designers can order free samples from Material Bank and receive them the next morning, and then ship samples back for free when they’re no longer needed. Material Bank charges the manufacturers a fee every time one of their samples is shipped out. Manufacturers receive new customer leads that require no effort to generate and are happy to outsource sample fulfillment, which was historically a cost center and not a core competency. Other B2B markets where sampling is well-established include chemicals, apparel and packaging materials.

How to start a VC fund without being rich already

Barriers to venture investing have been falling in recent years, as money has flowed into the asset class and as the opportunities for tech continue to grow. It is actually quite possible to raise your own fund if you don’t have much wealth to leverage — you’ll still have many things to figure out, though. Connie Loizos talks to limited partners and VCs who have been taking creative approaches for TechCrunch this week:

First, find investors, i.e. limited partners, who are willing to take less than 2% or 3% and maybe even less than 1% of the overall fund size being targeted. You’ll likely find fewer investors as that “commit” shrinks. But for example Joanna Rupp,  who runs the $1.1 billion private equity portfolio for the University of Chicago’s endowment, suggests that both she and other managers she knows are willing to be flexible based on the “specific situation of the GP.”

Says Rupp, “I think there are industry ‘norms,’ but we haven’t required a [general partner] commitment from younger GPs when we have felt that they don’t have the financial means.”

Bob Raynard, founder of the fund administration firm Standish Management, echoes the sentiment, saying that a smaller general partner commitment in exchange for special investor economics is also fairly common. “You might see a reduced management fee for the LP for helping them or reduced carry or both, and that has been done for years.”

Explore management fee offsets. Use your existing portfolio companies as collateral. Make a deal with wealthier friends if you can. Get a bank loan. Consider the merits of so-called front loading.

She goes on to explain a number of tips including:

• Explore management fee offsets.

• Use your existing portfolio companies as collateral.

• Make a deal with wealthier friends if you can.

• Get a bank loan.

• Consider the merits of so-called front loading.

Yegor Aleyev/TASS (Photo by Yegor AleyevTASS via Getty Images)

Edtech startup M&A grows with the pandemic boom

Natasha Mascarenhas takes a look at the motivations behind recent acquisitions in the space for Extra Crunch this week, as edtech has gone from supplemental to vital during the pandemic. Here’s more detail about the Course Hero acquisition of Symbolab from the other week.

Symbolab is a math calculator that is set to answer over 1 billion questions this year. With each answer, Symbolab adds information to its algorithm regarding students’ most common pain points and confusion. Course Hero, in contrast, is a broader service that focuses on Q&A from a variety of subjects. CEO Andrew Grauer says Symbolab’s algorithm isn’t something that Course Hero, which has been operating since 2006, can drum up overnight. That’s precisely why he “decided to buy, instead of build… It made a lot of sense to move fast enough so it wouldn’t take up multiple years to get this technology.”

Around TechCrunch

Learn how to score your first check with TMV’s Soraya Darabi on November 10

Just one week left for early-bird passes to TC Sessions: Space 2020

Relativity Space’s Tim Ellis is coming to TC Sessions: Space 2020

Across the week

TechCrunch:

China postpones Ant’s colossal IPO after closed-door talk with Jack Ma

Study shows cities with ride-hailing services report lower rates of sexual assault

Mixtape podcast: Wellness in the time of the struggle

Why Florida residents may soon be seeing jet-powered ‘flying taxis’

UK report spotlights the huge investment gap facing diverse founders

Extra Crunch:

3 tips for SaaS founders hoping to join the $1 million ARR club

Inside fintech startup Upstart’s IPO filing

4 takeaways from fintech VC in Q3 2020

Is fintech’s Series A market hot, or just overhyped?

Implementing a data-driven approach to guarantee fair, equitable and transparent employee pay

#EquityPod: Fortnite is actually a SaaS company

From Alex Wilhelm:

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

What a week from us here in the United States, where the election is still being tabulated and precisely zero people are stressed at all. But, no matter what, the wheels of Equity spin on, so Danny and Natasha and Alex and Chris got together once again to chat all things startups and venture capital:

• Up top there was breaking news aplenty, including a suit from the U.S. government to try to block the huge Plaid-Visa deal. And, it was reported that Airbnb will drop its public S-1 filing early next week. That IPO is a go.
• Next we turned to the gaming world, riffing off of this piece digging into the venture mechanics of making and selling video games. Our hosting crew had a few differences of opinion, but were able to agree that Doom 3 was a masterpiece before moving on.
• Then it was time to talk Ant, and what the hell happened to its IPO. Luckily with Danny on deck we were in good hands. What a mess.
• Prop 22 was passed, which effectively allows Uber, Instacart and Lyft to keep their gig workers labeled as independent contractors, instead of employees. As a result, Uber and Lyft stocks soared, while gig worker collectives said that the fight is still on.
• Natasha scooped a series of Election Day filings from venture capital firms. In the mix: Precursor Ventures Fund III, Hustle Fund II and Insight Partner’s first Opportunity Fund.
• And finally, despite Election Day turning into an entire week, the public markets are rallying. Will we see a boom of IPOs?
• And, as a special treat, we didn’t even mention Maricopa County for the entire episode. Take care all!

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.

https://ift.tt/2IeUUjm The gig economy, cannabis and car data are tech-election winners in 2020 https://ift.tt/3n3S9R2

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Extra Crunch roundup: B2B marketplaces, edtech M&A, breaking into the $1M ARR club

I’ve worked at TechCrunch for a little over a year, but this was one of the hardest weeks on the job so far.

Like many people, I’ve been distracted in recent days. As I write this, I have one eye on my keyboard and another on a TV that sporadically broadcasts election results from battleground states. Despite the background noise, I’m completely impressed with the TechCrunch staff; it takes a great deal of focus and energy to set aside the world’s top news story and concentrate on the work at hand.

Monday feels like a distant memory, so here’s an overview of top Extra Crunch stories from the last five days. These articles are only available to members, but you can use discount code ECFriday to save 20% off a one or two-year subscription. Details here.

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B2B marketplaces will be the next billion-dollar e-commerce startups

Marketplaces created for B2B activity are surging in popularity. According to one report, transactions in these venues generated around $680 billion in 2018, but that figure is predicted to reach $3.6 trillion by 2024.

The COVID-19 pandemic is helping startups that innovate in areas like payments, financing, insurance and compliance.

Even so, according to Merritt Hummer, a partner at Bain Capital Ventures, “B2B marketplaces cannot simply remain stagnant, serving as simple transactional platforms.”

The startups that are first to market with innovative “adjacent services will emerge as winners in the next few years,” she advises.

B2B marketplaces will be the next billion-dollar e-commerce startups

Software companies are reporting a pretty good third quarter

For this morning’s edition of The Exchange, Alex Wilhelm interviewed three executives at cloud and SaaS companies to find out how well Q3 2020 has been treating them:

• Ping CFO Raj Dani
• JFrog CEO Shlomi Ben Haim
• BigCommerce CEO Brent Bellm

As one Twitter commenter noted, Alex doesn’t just talk to the best-known tech execs; he reaches out to a wide range of people, and it shows in the quality of his reporting.

Software companies are reporting a pretty good third quarter

Will new SEC equity crowdfunding rules encourage more founders to pass the hat?

New Regulation Crowdfunding guidelines the SEC released this week allow companies to directly raise up to $5 million each year from individual investors, an increase from the previous limit of $1.07 million.

“Life has gotten easier in other ways as well for founders pursuing this fundraising type and the platforms that seek to simplify it,” reports Lucas Matney, who interviewed Wefunder CEO Nicholas Tommarello.

Funding for seed-stage startups slumped 32% last quarter compared to 2019, so “the tide could be turning” for founders who were reluctant to raise from a giant pool of small dollars, Lucas found.

Will new SEC equity crowdfunding rules encourage more founders to pass the hat?

3 tips for SaaS founders hoping to join the $1 million ARR club

Reaching scale is paramount for software companies, so growth is a top priority.

In a guest post for Extra Crunch, Drift CEO David Cancel explains that too many SaaS and cloud companies waste time trying out a number of solutions before finding the right recipe.

“I can tell you that there absolutely is a repeatable process to building a successful SaaS business,” he says, “one that can reliably guide you to product-market fit and then help you quickly scale.”

3 tips for SaaS founders hoping to join the $1 million ARR club

Implementing a data-driven approach to guarantee fair, equitable and transparent employee pay

Companies that hope to eliminate longstanding inequities in the workplace can’t just rely on doing what they think is right. Without a data-driven approach, subjective judgments and implicit bias tend to negate good intentions.

Many startups don’t hire full-time HR managers until they’ve reached scale, but this comprehensive post lays out several critical factors for creating — and maintaining — a fair pay model.

Implementing a data-driven approach to guarantee fair, equitable and transparent employee pay

4 questions as Airbnb’s IPO looms

News broke this week that Airbnb plans to to raise approximately $3 billion in a public filing that would allow it to reach a valuation in the $30 billion range.

Our expert unicorn wrangler Alex Wilhelm says curious investors should ask themselves the following:

• Will Airbnb be able to show a near-term path to profitability?
• How high-quality is Airbnb’s revenue after the pandemic?
• Is there anything lurking in its recent financings that public investors won’t like?
• Will Airbnb be able to show year-over-year revenue gains?

4 questions as Airbnb’s IPO looms

Starling Bank founder Anne Boden says new book ‘isn’t a memoir’

“People at the end of their career write memoirs,” Starling Bank founder Anne Boden told TechCrunch’s Steve O’Hear. “I’m at the beginning.”

In Boden’s new book, “Banking On It,” she shares the story of how (and why) she decided to found a challenger bank, eventually parting with colleagues who launched competitor Monzo.

“This is really putting down on paper where we are at the moment,” she said. “It’s been written over several years, and I’m hoping to use this to inspire a generation of entrepreneurs.”

Starling Bank founder Anne Boden says new book ‘isn’t a memoir’

Pandemic’s impact disproportionately reduced VC funding for female founders

Natasha Mascarenhas and Alex Wilhelm collaborated on Monday’s edition of The Exchange to report on how investors became less likely to fund female founders since the beginning of the COVID-19 pandemic.

Drawing on data from multiple sources, Alex and Natasha found that startups led by women and mixed-gender founding teams received 48% less VC funding in Q3 2020 than in Q2, even though overall funding bounced back.

“From fear in late Q1, to a middling Q2, to a boom in Q3,” they wrote. “It was an impressive comeback. For some.”

Pandemic’s impact disproportionately reduced VC funding for female founders

Booming edtech M&A activity brings consolidation to a fragmented sector

Natasha Mascarenhas has owned TechCrunch’s edtech beat since she came aboard at the start of 2020, just a few months before the pandemic led to widespread school closures.

She’s reported on countless funding rounds and interviewed founders and investors who are active in the space, but she recently spotted a new trend: “M&A activity is buzzier than usual.”

Booming edtech M&A activity brings consolidation to a fragmented sector

4 takeaways from fintech VC in Q3 2020

Alex Wilhelm shrugged off his Election Day distractions long enough to write a column that comprehensively examined fintech investment activity over the last quarter.

In Q3 2020, “60% of all capital raised by financial technology startups came from just 25 rounds worth $100 million or more,” he reports.

Are these mega-rounds funding “the next crop of unicorns?” It’s too early to say, but it’s clear that pandemic-fueled uncertainty is driving consumers into the arms of companies like Robinhood, Chime, Lemonade and Root.

In 1,316 words, Alex captures the state of play in insurtech, banking, wealth management and payments investing: “Now, we just want to see some ******* IPOs.”

4 takeaways from fintech VC in Q3 2020

New GV partner Terri Burns has a simple investment thesis: Gen Z

Five years ago, Terri Burns was a product manager at Twitter. Today, she’s the first Black woman — and the youngest person — to be promoted to partner at Google Ventures.

In a Q&A with Natasha Mascarenhas, Burns talked about her plans for the new role, as well as her investment thesis.

“I don’t know what it actually means to build a sustainable business and venture is a really great way to sort of learn that,” said Burns.

New GV partner Terri Burns has a simple investment thesis: Gen Z

GV General Partner MG Siegler talks portfolio management and fundraising 6 months into the COVID-19 pandemic

Are founders and investors really leaving Silicon Valley for greener pastures? Now that investors are limited to virtual interactions, are they being more hands-on with their portfolio companies?

In an Extra Crunch Live chat hosted by Darrell Etherington, GV General Partner MG Siegler talked about how the pandemic is — and is not — shaping the way he does business.

“I do feel like things are operating in a pretty streamlined manner, or as much as they can be at this point,” he said.

“But, you know, there’s always going to be some more wildcards — like we’re a week away, today, from the U.S. election.”

MG Siegler talks portfolio management and fundraising 6 months into the COVID-19 pandemic

Thank you very much for reading Extra Crunch; I hope you have a great weekend.

https://ift.tt/eA8V8J Extra Crunch roundup: B2B marketplaces, edtech M&A, breaking into the $1M ARR club https://ift.tt/2If1AxD

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Startups making meat alternatives are gaining traction worldwide

Startups that produce lab-grown meat and meat substitutes are gaining traction and raising cash in global markets, mirroring a surge of support food tech companies are seeing in the United States.

New partnerships with global chains like McDonald’s in Hong Kong, the launch of test kitchens in Israel and new financing rounds for startups in Sydney and Singapore point to abounding opportunities in international markets for meat alternatives.

In Hong Kong, fresh off a $70 million round of funding, Green Monday Holdings’ OmniFoods business unit was tapped by McDonald’s to provide its spam substitute at locations across the city.

The limited-time menu items featuring OmniFoods’ pork alternatives show that the fast food chain remains willing to offer customers vegetarian and vegan sandwich options — so long as they live outside of the U.S. In its home market, McDonald’s has yet to make any real initiatives around bringing lab-grown meat or meat replacements to consumers.

Green Monday Holdings, Asia’s answer to Beyond Meat, raises $70 million from TPG, Swire Pacific

Speaking of lab-grown meat, consumers in Tel Aviv will now be able to try chicken made from a lab at the new pop-up restaurant The Chicken, built in the old test kitchen of the lab-grown meat producer SuperMeat.

The upmarket restaurant doesn’t cost a thing: it’s free for customers who want to test the company’s blended chicken patties made with chicken meat cultivated from cells in a lab that are blended with soy, pea protein or whey, according to the company.

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Provizio closes $6.2M seed round for its car safety platform using sensors and AI

Provizio, a combination hardware and software startup with technology to improve car safety, has closed a seed investment round of $6.2million. Investors include Bobby Hambrick (the founder of Autonomous Stuff); the founders of Movidius; the European Innovation Council (EIC); ACT Venture Capital.

The startup has a “five-dimensional” sensory platform that — it says — perceives, predicts and prevents car accidents in real time and beyond the line-of-sight. Its “Accident Prevention Technology Platform” combines proprietary vision sensors, machine learning and radar with ultra-long range and foresight capabilities to prevent collisions at high speed and in all weather conditions, says the company. The Provizio team is made up of experts in robotics, AI and vision and radar sensor development.

Barry Lunn, CEO of Provizio said: “One point three five road deaths to zero drives everything we do at Provizio. We have put together an incredible team that is growing daily. AI is the future of automotive accident prevention and Provizio 5D radars with AI on-the-edge are the first step towards that goal.”

Also involved in Provizio is Dr. Scott Thayer and Prof. Jeff Mishler, formally of Carnegie Mellon robotics, famous for developing early autonomous technologies for Google / Waymo, Argo, Aurora and Uber.

https://ift.tt/eA8V8J Provizio closes $6.2M seed round for its car safety platform using sensors and AI https://ift.tt/354NsjN

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Funded by Connect Ventures, Purple Dot plans to take on Klarna-style purchase debt

In recent times startups have appeared offering credit at an e-commerce basket checkout so that a customer can buy a product without needing to pay right away. Klarna or Clearpay are the two most notable in this field. But what if you flipped the model around so that consumers could buy the item at a lower price later on, and the retailer could reduce waste? This is the model of Purple Dot, which bills itself as a “worth-the-wait” payment option for fashion brands.

It’s now raised a seed round of £1.35 million, led by Connect Ventures, with support from AI Seed, Moxxie Ventures, Andy Chung and Philipp Moehring from AngelList, Alex Roetter (former SVP of Engineering at Twitter) and the family office of Paul Forster, co-founder of Indeed.com.

Founded in August 2019 by senior Skyscanner employees Madeline Parra (CEO) and John Talbott (CTO), Purple Dot allows consumers to request a “worth-the-wait” lower price. The advantage for retailers is that they can then decide whether or not to release a fashion product mid-season at a slightly reduced rate in order to secure the sale.

The customers still pays upfront and then waits to have the item confirmed, receiving a full refund if not. The Purple Dot payment method sits alongside “buy now, pay later” finance options.

Unlike Klarna, we don’t encourage consumers to buy stuff they can’t afford.

This “worth-the-wait” price does not usually fall below a 10-20% reduction from the recommended retail price, thus reducing losses from end-of-season discounting, where discounts are much deeper. The advantage for the consumer is that they don’t then rack up debt on their purchases.

The startup says it’s already in talks with a number of major U.K. and U.S. high street brands but has already secured menswear retailer Spoke, which will also use the tech for “pre-ordering”. This means they can test out new styles, designs and fabrics in a limited manner, thus reducing waste (and therefore carbon emissions) when they commit to a new line of clothing.

Madeline Parra, CEO of Purple Dot, commented: “When shopping online today, customers can either pay the retail price or walk away. When they do walk away, the item goes through the discounting process, becomes unprofitable for the merchant and is resigned to landfill. This binary system isn’t working for anyone – the customer loses out on the item, because it may go out of stock in their size before they attempt to purchase it again, and the merchant loses the sale. Purple Dot tackles this problem head-on by providing a new way to shop, taking on unsustainable, unrelenting consumerism, poor pricing tactics and profit-crunching sales at the same time.”

Speaking to TechCrunch she also added that “Unlike Klarna, we don’t encourage consumers to buy stuff they can’t afford.”

Pietro Bezza, general partner at Connect Ventures, commented: “Purple Dot’s innovative proposition benefits retailers by creating a solution to their inventory problems. End of season ‘panic sales’ have long caused financial uncertainty for retailers and a negative impact on the environment in equal measure.”

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Chinese autonomous vehicle startup Pony.ai hits $5.3 billion valuation

Pony.ai, the Chinese autonomous vehicle startup and relative newcomer to the industry, is now valued at $5.3 billion following a fresh injection of $267 million in funding.

The round was led by TIP, an innovation fund within the Ontario Teachers’ Pension Plan Board that focuses on late-stage venture and growth equity investments in companies that deliver disruptive technology. Existing partners Fidelity China Special Situations PLC, 5Y Capital (formerly Morningside Venture Capital), ClearVue Partners and Eight Roads also participated in the round.

The new funds will primarily be used for research and development, according to the company.

Pony.ai has won over investors, OEMs and Tier 1 suppliers during its four-year existence. The company, which operates in China and California, has raised more than $1 billion since its founding, including $400 million from Toyota. Pony has several partnerships or collaborations with automakers and suppliers, including Bosch, Hyundai and Toyota.

Pony is building what it describes as an agnostic virtual driver for all sizes of vehicles, from small cars to large trucks, and to operate on both ridesharing and logistics (delivery) service networks. The company said back in 2019 that it was working with OEMs and suppliers to apply its automated technology to the long-haul trucking market. But it’s perhaps best known for its effort around robotaxis.

The company has launched ridesharing and commuter pilots in Fremont and Irvine, California and Guangzhou, China. Last year, a fleet of electric, autonomous Hyundai Kona crossovers equipped with a self-driving system from Pony.ai and Via’s ride-hailing platform began shuttling customers on public roads. The robotaxi service, called BotRide, wasn’t a driverless service, as there was a human safety driver behind the wheel at all times. The BotRide pilot concluded in January 2020.

The company then started operating a public robotaxi service called PonyPilot in the Irvine area. Pony shifted that robotaxi service from shuttling people to packages as the COVID-19 pandemic swept through the world. In April, Pony.ai announced it had partnered with e-commerce platform Yamibuy to provide autonomous last-mile delivery service to customers in Irvine. The new delivery service was launched to provide additional capacity to address the surge of online orders triggered by the COVID-19 pandemic, Pony.ai said at the time.

California has let two Chinese startups offer robotaxis to the public

https://ift.tt/eA8V8J Chinese autonomous vehicle startup Pony.ai hits $5.3 billion valuation https://ift.tt/3mZeoYm

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French startups can apply to the Next40 and French Tech 120

Last year, the French government and the government-backed initiative La French Tech unveiled an index of French startups so that it would be easier to identify them. The 40 top-performing startups get the label Next40, and the top 120 startups are grouped into the French Tech 120 — it’s a play on words with the CAC40 and SBF 120 stock indexes.

Here’s a list of the 40 private companies in this year’s Next40:

Image Credits: La French Tech

But creating a club without perks would be a bit useless. That’s why you get some perks as a member of the Next40 and French Tech 120. Those companies automatically access a fast-track administrative system — every startup gets a representative for their particular needs.

If you’re facing administrative issues, such as getting visas for foreign employees, getting a certification or a patent, or selling your product to a public administration, you can more easily find the right person that can solve your issue.

“The coolest thing is that they can ask us for anything: ‘I’m about to do bizdev in China,’ ‘I’m launching a rocket and I need to test it on a space facility’ or ‘I’m hiring 50 people and I need them and all their families here,’ ” La French Tech director Kat Borlongan told me last year.

Now, the government is working on refreshing the index. And in order to do that, you’ll have to apply and match the exact same criteria as last year.

Once you have proven that you’re an independent French startup, there are two different ways to get accepted in the Next40:

• If you have raised more than €100 million over the past three years or if your company has a valuation of $1 billion or more, you’re automatically part of the Next40.
• If you’ve closed “one of the most important funding rounds of the past three years” and 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 will be selected if they have raised more than €20 million in a funding round over the past three years.
• 40 of them will be selected based on the annual turnover and the growth rate.

Some companies in the Next40 will remain in the index, others will leave the index. And the government is fine with that.

“In the coming years, some companies will shut down, others will get acquired by French and foreign companies. It’s normal and healthy,” France’s digital minister Cédric O said in a press briefing.

There are two new things that are worth highlighting. First, the government has signed a partnership with Euronext to educate entrepreneurs about going public. There are few public French tech companies, and the government hopes it can reverse this trend.

Second, in January 2021, the government will also select 20 greentech startups so that they can access the same fast-track programs. It is going to be a separate list.

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Software companies are reporting a pretty good third quarter

What a difference a week makes.

This time last week, in the wake of earnings from tech’s five largest American companies and early results from other software companies, it appeared that tech shares were in danger of losing their mojo.

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But then, this week’s rally launched, and more earnings results came in. Generally speaking, the Q3 numbers from SaaS and cloud companies have been medium-good, or at least good enough to protect historically stretched valuations when comparing present-day revenue multiples to historical norms.

This is great news for yet-private startups that have had to deal with a recession, an uneven and at-times uncertain funding market, an election cycle and other unknowns this year. Wrapping 2020 with a market rally and strong earnings from public comps should give private software companies a halo heading into the new year, assisting them with both fundraising and valuation defense.

Of course, there’s still a lot more data to come in, markets are fickle and many SaaS companies will report next month, having a fiscal calendar offset by a month from how you and I track the year. But after spending time on the phone this week with JFrog’s CEO, BigCommerce’s CEO and Ping Identity’s CFO, I think things are turning out just fine.

Let’s get into what we’ve learned.

Growth and expectations

Kicking off, Redpoint’s Jamin Ball, a venture capitalist who unconsciously moonlights as the research desk for the The Exchange during earnings season, has a roundup of earnings results from this week’s set of SaaS and cloud stocks that reported. As you will recall, last week we were slightly unimpressed by its cohort of results.

Here’s this week’s tally:

As we can see, there was a single miss amongst the group in Q3. Unsurprisingly, that company, SurveyMonkey, was also one of three SaaS companies to project Q4 revenue under street expectations. My read of that chart is seeing a little less than 80% of the group that did project Q4 guidance that bests expectations is bullish, as were the Q3 results, which included a good number of companies that topped targets by at least 10%.

Inside of the data are two narratives that I want to explore. The first is about COVID-related friction, and the second is about COVID-related acceleration. Every company in the world is experiencing at least some of the former. For example, even companies that are seeing a boom in demand for their products during the pandemic must still deal with a sales market in which they cannot operate as they would like to.

For software companies, reportedly in the midst of a hastening digital transformation, the question becomes whether or not the COVID’s minuses are outweighing its pluses. We’ll explore the matter through the lens of three companies that The Exchange spoke with this week after they reported their Q3 results.

The accelerating digital transformation, redux

Ping Identity

Of our three companies this week, Ping Identity had the hardest go of it; its stock fell sharply after it dropped its Q3 numbers, despite beating earnings expectations for the period.

The company’s revenue fell 3%, while its annual recurring revenue (ARR) rose by 17%. Why did its stock fall if it came in ahead of expectations? You could read its Q4 guidance as slightly soft. In the above chart it’s marked as a slight beat, but its low-end came in under analyst expectations, creating the possibility of a projected miss.

Investors, betting on Ping’s move to SaaS being accretive both now and in the long-term, were not stoked by its Q4 forecast.

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Slintel grabs $4.2M seed to grow sales intelligence platform

As the pandemic rages on, companies are looking for an edge when it comes to sales. Having the right data about the customers most likely to convert can be a huge boost right now. Slintel, an early stage startup building a sales intelligence tool, announced a $4.2 million seed round today.

The investment was led by Accel with help from Sequoia Capital India and existing investor Stellaris Venture Partners. The company reports it has now raised $5.7 million including a pre-seed round last year.

Deepak Anchala, company founder and CEO, says that while sales and marketing teams are trying to target a broad market, most of the time their emails and other forms of communication with customers fall flat. As a sales person in previous startups, Eightfold and Tracxn, this was a problem Anchala experienced first hand. He believed with data, he could improve this, and he started Slintel to build a tool to provide the sales data that he was missing in these previous positions.

“We focus on helping our customers solve that [lack of data] by identifying people with high buying intent. So we are able to tell sales and marketing teams, for example, who is most likely to buy your product or your service, and who is most likely to buy your product today, as opposed to two months or six months from now,” Anchala explained.

Scratchpad announces $3.6M seed to put workspace on top of Salesforce

They do this by looking at signals that might not be obvious, but which let sales teams know key information about these companies and their likelihood of buying soon. He says that every company leaves a technology footprint. This could be data from SEC filings, annual reports, job openings and so forth.

“In today’s world there is an enormous amount of footprint left online when a company uses a certain product. So what our algorithms do is we map that at scale for about 15 million companies to all the products that they’re using from the different sources we are able to identify — and we track it all from week to week,” he said.

The company has 45 employees today and expects to double that number by the end of 2021. As he builds the company, especially as an immigrant founder, Anchala wants to build a diverse and inclusive organization.

“I think one of the key successes for companies today is having diversity. We have a global workforce, so we have a workforce in the U.S. and India and we want to capitalize on that. In the next phase of hires we are looking at hiring more more diverse candidates, more female employees and people of different nationalities,” he said.

The company, which was founded in 2018, and emerged from stealth last year, has amassed 100 enterprise customers and has seen most of the customers actually come on board this year as COVID has forced companies to find ways to be more efficient with their sales processes.

Reimagine inside sales to ramp up B2B customer acquisition

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Challenger bank Starling is out raising a new £200M funding round

Starling founder Anne Boden recently told TechCrunch that the U.K. challenger bank is on track to be profitable by Christmas, but this doesn’t mean it isn’t out raising additional capital already.

According to well-placed sources, Starling has hired Rothschild with the aim of raising a new £200 million round. The draw is its expected profitability, which one source says is already creating private equity investor interest. Starling declined to comment.

Having raised £363 million to date, including a £100 million state-aid grant, Starling now boasts 1.9 million customers. Since launching business banking in March 2018 and subsequently taking part in the U.K. government’s bounce back scheme for struggling businesses hit by the pandemic, this also now includes more than 180,000 business accounts for sole traders and small to medium sized businesses.

Starling Bank founder Anne Boden says new book ‘isn’t a memoir’

In our recent interview with Boden to primarily talk about her tell it all book on Starling’s founding, she told TechCrunch that her ultimate aim is to get to an initial public offering. “I didn’t do all this to sell out to a big bank,” she told me. “I’ve got my sights on an IPO. I’d very much like to do that”.

However, to just that will almost certainly require additional capital injections for the next few years to continue telling an appealing story for future public investors, which will include further U.K. expansion and making meaningful in-roads into Europe.

In the shorter term, we might also see some M&A activity. Speaking at the LendIt Fintech Europe 2020 virtual conference in October, Boden said that Starling is continuing to expand the SME side of its business and SME loans now make up the largest segment of its overall book (approaching £1.5 billion of lending). As part of this, she didn’t rule out acquiring companies in the SME lending space.

https://ift.tt/eA8V8J Challenger bank Starling is out raising a new £200M funding round https://ift.tt/2Jz9bb4

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PUBG Mobile plots return to India following ban

{rss:content:encoded} PUBG Mobile plots return to India following ban https://ift.tt/3l3g3eB https://ift.tt/38habeg November 06, 2020 at 06:20AM

PUBG Mobile, the sleeper hit title that was banned in India two months ago over cybersecurity concerns, is plotting to make a return in the world’s second largest internet market, two sources familiar with the matter told TechCrunch.

The South Korean firm has engaged with global cloud service providers in recent weeks to store Indian users’ data within the country to allay New Delhi’s concerns about user data residency and security, one of the sources said.

The gaming giant has privately informed some high-profile streamers in the country that it expects to resume the service in India before the end of this year, the other source said. Both the sources requested anonymity as they are not authorized to speak to the press. PUBG Corporation did not respond to a request for comment Thursday.

The company could make an announcement about its future plans for India as soon as this week. It also plans to run a marketing campaign in the country during the festival of Diwali next week, one of the sources said.

In recent weeks, PUBG has also engaged with a number of local firms including SoftBank-backed Paytm and telecom giant Airtel to explore whether they would be interested in publishing the popular mobile game in the country, an industry executive said. A Paytm spokesperson declined to comment.

Chinese giant Tencent initially published PUBG Mobile apps in India. After New Delhi banned PUBG Mobile, the gaming firm cut publishing ties with Tencent in the country.

Late last month, two months after the ban order, PUBG Mobile terminated its service for Indian users. “Protecting user data has always been a top priority and we have always complied with applicable data protection laws and regulations in India. All users’ gameplay information is processed in a transparent manner as disclosed in our privacy policy,” it said at the time.

With more than 50 million monthly active users in India, PUBG Mobile was by far the most popular mobile game in the country before it was banned. It helped establish an entire ecosystem of  esports organisations to teams and even a cottage industry of streamers that made the most of its spectator sport-friendly gameplay, said Rishi Alwani, a long-time analyst of Indian gaming market and publisher of news outlet The Mako Reactor.

PUBG Mobile’s return, however, could complicate matters for several industry players, including some that are currently building similar games to cash in on its absence and their conversations with venture capital firms over ongoing financing rounds.

It would also suggest that more than 200 other Chinese apps that India has banned in recent months could hope to allay New Delhi’s concerns by making some changes to where they store their users data. (That was also the understanding between TikTok and Reliance when they engaged in investment opportunities earlier this year.)

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Steve Bannon’s show pulled off Twitter and YouTube over calls for violence

Former Presidential advisor and right-wing pundit Steve Bannon had his show suspended from Twitter and an episode removed by YouTube after calling for violence against FBI director Christopher Wray and the government’s leading pandemic expert, Dr. Anthony Fauci.

Bannon, speaking with co-host Jack Maxey, was discussing what Trump should do in a hypothetical second term. He suggested firing Wray and Fauci, but then went further, saying “I’d actually like to go back to the old times of Tudor England, I’d put the heads on pikes, right, I’d put them at the two corners of the White House as a warning to federal bureaucrats.”

This may strike one at first as mere hyperbole – one may say “we want his head on a platter” and not really be suggesting they actually behead anyone. But the conversation continued and seemed to be more in earnest than it first appeared:

Maxey: Just yesterday there was the anniversary of the hanging of two Tories in Philadelphia. These were Quaker businessmen who had cohabitated, if you wil,l with the British while they were occupying Philadelphia. These people were hung. This is what we used to do to traitors.

Bannon: That’s how you won the revolution. No one wants to talk about it. The revolution wasn’t some sort of garden party, right? It was a civil war. It was a civil war.

Whether one considers this only nostalgia for the good old days of mob justice or an actual call to bring those days back, the exchange seems to have been enough for moderators at YouTube and Twitter to come down hard on the pair’s makeshift broadcast.

Twitter confirmed that it has “permanently suspended” (i.e. it can be appealed but won’t be restored automatically) the account for violating the rule against glorifying violence.

Close US election results plunge social media into nightmare misinformation scenario

YouTube removed the episode from “Steve Bannon’s War Room” channel Wednesday afternoon after it was brought to their attention. A representative for the platform said “We’ve removed this video for violating our policy against inciting violence. We will continue to be vigilant as we enforce our policies in the post-election period.”

Online platforms have struggled with finding the line between under- and over-moderation. Facebook, Twitter, YouTube, Tiktok, Instagram and others have all taken different measures, from preemptively turning off features to silently banning hashtags. Facebook today took down a group with more than 300,000 members that was acting as an amplifier for misinformation about the election.

While the platforms have been vigorous in at least some ways in the labeling and isolation of misinformation, it’s more difficult for video platforms. Just minutes ago Trump took to YouTube to detail a variety of unfounded conspiracy theories about mail-in voting, but the platform can’t exactly do a live fact-check of the President and shut down his channel. More than with text-based networks, video tends to spread before it is caught and flagged due to the time it takes to review it.

Facebook takes down ‘Stop the Steal 2020’ group organizing around false claims of election chicanery

from Social – TechCrunch https://ift.tt/30duba3 Steve Bannon’s show pulled off Twitter and YouTube over calls for violence Devin Coldewey https://ift.tt/3l1y0KQ
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Facebook takes down ‘Stop the Steal 2020’ group organizing around false claims of election chicanery

Facebook has taken down a group that had amassed more than 300,000 members and was sharing misinformation and organizing around false allegations of impropriety during the 2020 elections.

The group, called “Stop the Steal 2020,” was organizing protests targeting the election officials currently counting ballots cast in Michigan, Pennsylvania, Phoenix and Las Vegas.

“In line with the exceptional measures that we are taking during this period of heightened tension, we have removed the Group ‘Stop the Steal,’ which was creating real-world events,” said a Facebook spokesperson in a statement emailed to TechCrunch. “The group was organized around the delegitimization of the election process, and we saw worrying calls for violence from some members of the group.”

Facebook’s action was first noticed by Ryan Mac of BuzzFeed, who reported the move in a tweet.

Facebook statement: “In line with the exceptional measures that we are taking during this period of heightened tension, we have removed the Group 'Stop the Steal,' which was creating real-world events…

— Ryan Mac (@RMac18) November 5, 2020

Protestors advocating for votes to be counted and for vote counting to cease are cropping up across the country as Republican Party organizers and campaign officials try to derail the count of mail-in ballots and absentee votes cast in the 2020 race and Democratic supporters organize counter-protests.

Social media election takedowns

• TikTok takes down some hashtags related to election misinformation, leaves others
• Facebook blocks hashtags for #sharpiegate, #stopthesteal election conspiracies
• TikTok takes down election misinformation aimed at younger users
• Facebook and Instagram notifications warn US users there’s no winner yet in presidential election
• Twitter restricts Trump’s tweet claiming that foes would ‘steal’ the election
• YouTube removes ads from, but won’t pull, ‘Trump Won’ video following backlash
• Twitter hides Trump tweet attacking Supreme Court’s decision on Pennsylvania ballots

While the organizers may be tapping supporters of President Trump across the country, their messaging is different depending on the state.

In Phoenix, protestors are calling for all votes to be counted, as presidential candidate and former Vice President Joe Biden hangs on to a slim lead in Arizona.

Meanwhile, the messaging is the opposite in Georgia, Michigan, Pennsylvania and Nevada, where President Donald Trump is trying to preserve the slim margins that have him ahead or reverse the counts that had put him behind in the polls. In Detroit, for instance, Trump supporters held up signs that said “stop the steal” and “stop the cheat” according to news reports.

Conservative advocates across the Twittersphere have had their tweets amended by the company to indicate that they were sharing election misinformation.

Facebook has also added “labels” to election posts that break the rules, though they are designed to mostly point users to contextual, factual information rather than to offer explicit warnings about false claims.

In fact, as a direct response to Trump’s premature claims of victory, Facebook also rolled out an eye-catching set of messages across Facebook and Instagram reminding users that votes were still being counted.

Once President Trump began making premature claims of victory, we started running notifications on Facebook and Instagram that votes are still being counted and a winner is not projected. We're also automatically applying labels to both candidates’ posts with this information. pic.twitter.com/tuGGLJkwcy

— Facebook Newsroom (@fbnewsroom) November 4, 2020

Facebook has also instituted changes to its policies about groups that organize real-world events in the wake of 2016’s election disinformation campaign carried out by Russian agents and the recent shooting in Kenosha, Wisconsin in which two men were killed after a local self-declared militia group organized a response to protests against the shooting of Kenosha resident, Jacob Blake.

from Social – TechCrunch https://ift.tt/2CDBVfV Facebook takes down ‘Stop the Steal 2020’ group organizing around false claims of election chicanery Jonathan Shieber https://ift.tt/3ex5fD3
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TikTok’s parent company, ByteDance, is reportedly looking for $2B before its Hong Kong public offering

ByteDance, the company behind the social media sensation TikTok, is in talks to raise another $2 billion before the initial public offering of a large chunk of its international businesses on the Hong Kong StockExchange, according to a Bloomberg report.

The new financing would give the Chinese tech powerhouse a valuation of $180 billion, according to people cited by Bloomberg.

Investors, including ByteDance’s existing backers like Sequoia, are in the running to finance the new investment, the Bloomberg report said.

Sequoia had emerged as one of the drivers behind a now-stalled deal touted by the Trump administration to have Oracle take some sort of control over the American operations of ByteDance’s most valuable international asset — TikTok.

Both Sequoia and Oracle have significant ties to President Trump through Republican mega-donors Doug Leone, a managing partner at Sequoia, and Safra Catz and Larry Ellison, Oracle’s top leadership and founder.

The TikTok deal solves quite literally nothing

ByteDance has long planned a public offering for some of its largest Asian assets Douyin and Toutiao, which are huge drivers for the company’s revenues.

TechCrunch previously reported that ByteDance last year generated 120 billion yuan ($17.2 billion) in revenue, citing an investor with knowledge of the company’s finances. Around 67% of that revenue was derived from ads sold on its domestic apps Douyin, TikTok’s Chinese version, and popular news aggregator Toutiao. Live streaming targeted at users of Douyin and another app in the family made up about 17%. Nascent businesses, including games, e-commerce and TikTok, accounted for 20 billion yuan, or roughly another 17%.

The company projected its 2020 revenue at 200 billion yuan ($28.7 billion), with TikTok and other emerging businesses contributing 30 billion yuan, or 15%, according to the investor. Previous reports by Reuters and Bloomberg cited similar revenue figures.

ByteDance is already the most valuable privately held, venture-backed technology company in the world, but at least some of that value is tied up in the revenue-generating potential of the company’s TikTok assets. And it appears that any new investment (at the valuations being reported) would be an indication that investors are shrugging off previous concerns about how a TikTok spin-off might affect the company.

ByteDance valuation under huge pressure as TikTok sale nears

Much of what happens next will hinge on the presidential elections in the U.S. and various court battles that remain underway. A Biden administration could scuttle the planned deal between TikTok, Oracle and Walmart — and a timeline for a separate TikTok public offering within the U.S.

There’s also internal confusion among the TikTok deal’s participants over who will own what when the dust finally settles and a deal moves forward.

As we reported in September:

… our assumption, that Oracle is taking 12.5% in TikTok Global, and Walmart will take 7.5%. The deal terms would value TikTok at about $60 billion by some estimates.

That’s a simple story, but apparently not the full one, because now there is another wrinkle happening here.

In a new statement attributed to its executive vice president Ken Glueck, Oracle said that “Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global.”

President Donald Trump has spoken out about the deal himself in places like CNBC, arguing that TikTok must be completely controlled by Americans.

ByteDance says it will own a majority of TikTok. Oracle says ByteDance will own 0%. WTF is this deal?

The U.S. government’s trouble with TikTok stems from a few different sources. For one, users on the platform managed to troll a deeply vindictive president and turn one of his planned marquee campaign events into a farce. And more importantly to the nation, but apparently less so to the administration, the company’s ties to China could expose U.S. citizens’ data to the CCP and its users to the potential for manipulation through TikTok’s decisions on what to post or not post on the app.

Sequoia and ByteDance had not responded to a request for comment at the time of publication.

from Social – TechCrunch https://ift.tt/eA8V8J TikTok’s parent company, ByteDance, is reportedly looking for $2B before its Hong Kong public offering Jonathan Shieber https://ift.tt/3618Xkw
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