At TechCrunch Disrupt, insights into key trends in venture capital

Published September 20, 2019

At TechCrunch Disrupt, the original tech startup conference, venture capitalists remain amongst the premier guests.

VCs are responsible for helping startups — the focus of the three-day event — get off the ground, and, as such, they are often the most familiar with trends in the startup ecosystem, ready to deliver insights, anecdotes and advice to our audience of entrepreneurs, investors, operators, managers and more.

In the first half of 2019, VCs spent $66 billion purchasing equity in promising upstarts, according to the latest data from PitchBook. At that pace, VC spending could surpass $100 billion for the second year in a row. We plan to welcome a slew of investors to TechCrunch Disrupt to discuss this major feat and the investing trends that have paved the way for recording funding.

Mega-funds and the promise of unicorn initial public offerings continue to drive investment. SoftBank, of course, began raising its second Vision Fund this year, a vehicle expected to exceed $100 billion. Meanwhile, more traditional VC outfits revisited limited partners to stay competitive with the Japanese telecom giant. Andreessen Horowitz, for example, collected $2.75 billion for two new funds earlier this year. We’ll have a16z general partners Chris Dixon, Angela Strange and Andrew Chen at Disrupt for insight into the firm’s latest activity.

At the early-stage, the fight for seed deals continued, with larger funds moving downstream to muscle their way into seed and Series A financings. Pre-seed has risen to prominence, with new funds from Afore Capital and Bee Partners helping to legitimize the stage. Bolstering the early-stage further, Y Combinator admitted more than 400 companies across its two most recent batches,

We’ll welcome pre-seed and seed investor Charles Hudson of Precursor Ventures and Redpoint Ventures general partner Annie Kadavy to give founders tips on how to raise VC. Plus, Y Combinator CEO Michael Seibel and Ali Rowghani, the CEO of YC’s Continuity Fund, which invests in and advises growth-stage startups, will join us on the Disrupt Extra Crunch stage ready with tips on how to get accepted to the respected accelerator.

Moreover, activity in high-growth sectors, particularly enterprise SaaS, has permitted a series of outsized rounds across all stages of financing. Speaking on this trend, we’ll have AppDynamics founder and Unusual Ventures co-founder Jyoti Bansal and Battery Ventures general partner Neeraj Agrawal in conversation with TechCrunch’s enterprise reporter Ron Miller.

We would be remiss not to analyze activity on Wall Street in 2019, too. As top venture funds refueled with new capital, Silicon Valley’s favorite unicorns completed highly anticipated IPOs, a critical step toward bringing a much needed bout of liquidity to their investors. Uber, Lyft, Pinterest, Zoom, PagerDuty, Slack and several others went public this year, and other well-financed companies, including Peloton, Postmates and WeWork, have completed paperwork for upcoming public listings. To detail this year’s venture activity and IPO extravaganza, David Krane, CEO and managing partner of Uber and Slack investor GV, will be on deck, as will Sequoia general partner Jess Lee, Floodgate’s Ann Miura-Ko and Aspect Ventures’ Theresia Gouw.

There’s more where that came from. In addition to the VCs already named, Disrupt attendees can expect to hear from Bessemer Venture Partners’ Tess Hatch, who will provide her expertise on the growing “space economy.” Forerunner Ventures’ Eurie Kim will give the Extra Crunch Stage audience tips on building a subscription product, Mithril Capital’s Ajay Royan will explore opportunities in the medical robotics field and SOSV’s Arvind Gupta will dive deep into the cutting-edge world of health tech and more.

Disrupt SF runs October 2-4 at the Moscone Center in the heart of San Francisco. Passes are available here.

Learn how to change banking one dollar at a time at Disrupt SF

Published July 16, 2019

Fintech startups are the hot new thing. Everybody wants to reinvent the way you manage money, invest and pay for things. That’s why we’re inviting three fintech experts to TechCrunch Disrupt SF to help you learn everything about the space.

They know that the bank of the future is not necessarily a bank and that the payment method of the future is not necessarily a card. And they’re going to tell you all about it.

First up is Chris Britt, the founder and CEO of Chime. While there are plenty of challenger banks in Europe, Chime is a rare success in the U.S. market.

The company has managed to attract over 3 million customers and $300 million in funding with a simple value proposition — a better user experience, an automatic way to save money and no fees for basic features. But Chime isn’t an overnight success. Britt has amassed a ton of experience in retail banking as chief product officer at Green Dot and as a senior product leader at Visa.

We also invited Angela Strange, a general partner at VC firm Andreessen Horowitz . As a founder of a fintech startup, you might want to know what investors are looking for. And Strange is an expert on this front.

She focuses on financial services of all sorts, including insurance, real estate and increasing inclusivity. She’s a board observer at Branch, Earnin, HealthIQ, Mayvenn, PeerStreet and Point. As you can see, it’s an impressive portfolio, and she has encountered a ton of different situations in the fintech industry.

And finally, Omer Ismail from Goldman Sachs has seen both sides of the banking coin. After many years working in private equity investing and investment banking, he was asked to lead an unusual team — the consumer business of Goldman Sachs.

Goldman Sachs hasn’t been a powerful brand when it comes to consumer products — until very recently. The company successfully launched Marcus, a banking product focused on personal loans and online savings with high interest rates, and Clarity Money, a mobile app that acts as a financial dashboard.

More recently, Ismail was in charge of the surprising partnership with Apple for the Apple Card. It’s clear that he knows where the industry is heading, so you’ll want to learn a few tips from Ismail.

Buy your ticket to Disrupt SF to listen to this discussion — and many others. The conference will take place on October 2-4 at the Moscone Center in San Francisco.

In addition to fireside chats and panels, like this one, new startups will participate in the Startup Battlefield to compete for the highly coveted Battlefield Cup.

Colombian point-of-sale lender ADDI nabs $12.5 million from Andreessen Horowitz

Published June 11, 2019

Andreessen Horowitz <3 Latin American startups.

Latin America is the only region outside of the U.S. where the venture firm is routinely investing capital, and it just made another commitment, doubling down on its early-stage support for the point-of-sale lending startup ADDI.

ADDI picked up $12.5 million in new financing in April of this year as the company looks to expand its lending services online.

For an American audience, the closest corollary to what ADDI is up to is likely Affirm, the point-of-sale lender that’s raised a ton of cash and come in for some (valid) criticism for its basic business model.

Like Affirm, ADDI lets its borrowers apply for credit at the moment of purchase. The company likens its service to the layaway and credit plans that already exist in Colombia — but involve pretty onerous requirements to use. Company co-founder Santiago Suarez and Andreessen Horowitz general partner Angela Strange both commented on how, in some cases, Colombian shoppers have to have three people vouch for a borrower before a store will issue credit or agree to a layaway plan.

The difference between an ADDI loan — or any loan — and layaway is that an installment payment plan doesn’t charge interest (and even with the fees that installment plans do charge, they are often still cheaper than taking out a loan).

But financial products are coming for consumers in Latin America whether those buyers like it or not — and for the most part, it seems they do like it.

Historically, only the wealthiest clientele in Latin America received anything resembling the kinds of financial products that are more widely available in the United States, according to Strange. And the investment in ADDI is just part of her firm’s thesis in trying to make more services more broadly available in a region where a technological transformation is creating unprecedented opportunities for challengers.

That assessment is what drew Santiago Suarez back to Latin America only two years ago. A former executive at Lending Club who previously had worked as the head of New Product Development and Emerging Services at J.P. Morgan, Suarez saw the tremendous growth happening in Latin America and returned to Colombia to see if he could bring some much needed services to his home country.

Suarez partnered with his childhood friend, Elmer Ortega, who was working as the chief technology officer of the local hedge fund where he had previously been employed as a derivatives trader before learning how to code.

Together, the two men, who had known each other since they were five years old, set out to transform how credit was offered in retail shops. It’s an industry that Suarez had known well since his parents had owned stores.

“In the U.S. there are all of these gaps that fintech companies are filling,” says Suarez. “But the gaps in Latin America are bigger.”

Suarez and Ortega incorporated the company in September 2018, around the same time they raised $2.3 million from the regional investment firm, Monashees, Andreessen and Village Global . They then raised another $1.5 million in an internal round of financing before closing the most recent funding.

The company offers loans at annual percentage rates ranging from 19.99% to 28.90%. The company started with a digital solution for brick and mortar retailers because 90% of retail in Colombia still happens offline.

Although it’s in its early days, the company has already originated 10,000 borrowers and typically loans out roughly $500 since it launched on February 22, according to Suarez. He declined to comment on the company’s default rate on loans.

Now with 40 employees on staff, the company is looking to bring its lending tool to more e-commerce and physical retailers, according to Suarez. And despite the threat of cyclical political turmoil, Suarez says there’s no better time to be investing in Colombia.

“It’s the most stable country outside of Chile… Way more stable than Brazil, way more stable than Argentina and way more stable than Mexico,” Suarez says. “What we’re looking at is more than cyclical instability… those things go beyond that. Nubank was able to build a multibillion business in the worst political and economic crisis in Brazil’s history. I think Colombia is an incredibly attractive space with a deep talent pool.”