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Why calendar invites are worth $3B

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

Natasha and Danny and Alex and Grace hopped online for our weekly show, sans Gamestop news (which you can find here) to talk about all the other busy news happening in startup world right now.

Here’s a taste of what we got into:

  •  Qualtrics IPO pricing, and the future of major acquisition pricing schemes. This company’s path to the public markets has been a long-time coming, so we had plenty to say.
  •  How Atlanta’s Calendly turned a scheduling nightmare into a $3 billion company. This story was not only neat, but also operated as a sort of palate cleanser for the team.
  •  Rhino‘s interesting insurtech play, and how it is pre-IPO pretty damn early. Revenue questions, the power of insurtech, and public markets impacting startups? This story had it all!
  •  Alex talks about how Fast is raising fast money ($102 million to be exact). Even more, the Fast story fits into a broader narrative of online checkout startups raising a zillion dollars in recent weeks.
  •  A boom in food delivery and restaurant startups, and why Danny is bearish on a plastic-free play. Natasha is in favor. Alex gets a company’s model mixed up with Spoon Rocket.
  •  Natasha explains how Clubhouse isn’t the first company to raise millions off of millions of users with no known near-term monetization plan. Her piece on ClassDojo illustrates how a quiet edtech giant finally turned its 51 million users into a profitable base. There’s also a new edtech investor survey for you to check out (Discount code: EQUITY).
  • TCV’s record fund, and a female-focused angel fund coming out of Africa.

As always, it was a ton to get through because there is just so much going on. More Monday morning, until then stay cool!

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

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Equity Monday: Clubhouse, Taboola and why the SPAC wave will get worse

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.

This is Equity Monday, our weekly kickoff that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here — and make sure to check out last week’s main ep, which was super-packed and a real treat.

This morning the news was heavy, so here’s your rundown to get you into the show:

Hugs, and we are back Thursday, if not before. Stay safe!

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

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Clubhouse announces plans for creator payments and raises new funding led by Andreessen Horowitz

Buzzy live voice chat app Clubhouse has confirmed that it has raised new funding – without revealing how much – in a Series B round led by Andreessen Horowitz through the firm’s partner Andrew Chen. The app was reported to be raising at a $1 billion valuation in a report from The Information that landed just before this confirmation. While we try to track down the actual value of this round and the subsequent valuation of the company, what we do know is that Clubhouse has confirmed it will be introducing products to help creators on the platform get played, including subscriptions, tipping and ticket sales.

This funding round will also support a ‘Creator Grant Program’ being set up by Clubhouse, which will be used to “support emerging Clubhouse creators” according to the startup’s blog post. While the app has done a remarkable job attracting creator talent, including high-profile celebrity and political users, directing revenue towards creators will definitely help spur sustained interest, as well as more time and investment from new creators who are potentially looking to make a name for themselves on the platform, similar to YouTube and TikTok influencers before them.

Of course, adding monetization for users also introduces a method for Clubhouse itself to monetize. The platform is free to all users, and doesn’t yet offer any kind of premium plan or method of charging users, nor is it ad-supported. Adding ways for users to pay other users provides an opportunity for Clubhouse to retain a cut for its services.

The plans around monetization routes for creators appear to be relatively open-ended at this point, with Clubhouse saying it’ll be launching “first tests” around each of the three areas it mentions (tipping, tickets and subscriptions) over the “next few months.” It sounds like these could be similar to something like a Patreon built right into the platform. Tickets are a unique option that would go well with Clubhouse’s more formal roundtable discussions, and could also be a way that more organizations make use of the platform for hosting virtual events.

The startup also announced that it will be starting work on its Android app (it’s been iOS only for now) and that it will also invest in more backend scaling to keep up with demand, as well as support team growth and tools for detecting and prevuing abuse. Clubhouse has come under fire for its failure in regards to moderation and prevention of abuse in the past, so this aspect of its product development will likely be closely watched. The platform will also see changes to discovery aimed at surfacing relevant users, groups (‘clubs’ in the app’s parlance) and rooms.

During a regular virtual town hall the app’s founders host on the platform, CEO Paul Davison revealed that Clubhouse now has 2 million weekly active users. It’s also worth noting that Clubhouse says it now has “over 180 investors” in the company, which is a lot for a Series B – though many of those are likely small, independent investors with very little stake.

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As COVID-19 era drags on, VCs look beyond Zoom calls for due diligence and sourcing

While the coronavirus has accelerated the dealmaking pace for many early-stage startups, activity has not come without adaptation.

Remote investment struggles for investors were clear from the get go: it’s challenging to invest millions in someone you have never met, and there’s not a lot to learn from “off-the-cuff” conversations that are calendared days in advance. Some investors said the pandemic was forcing them to stick with people they know in categories where they have experience, limiting the network that one can push money into.

Over six months into a global pandemic, though, new techniques are emerging to address some of these woes. The very art of a deal, from due diligence to sourcing, is changing from a cultural and technological standpoint.

One of the new places that recreates informal bonding and camaraderie is Matchbox.VC, formerly Fortnite.VC.

The service connects founders and investors over video games to network and source deals in a low-stress environment. Matchbox.VC was inspired from a tweet by Founders Fund principal Delian Asparouhov and has garnered interest from investors like Arjun Sethi from Tribe Capital, Ryan Shea, the ex-founder of Blockstack, Jake Chapman from AlphafundVC and Peter Rojas from Betaworks. Its last game night was backed by Yac, Tribe Capital and Shrug Capital.

We’ve invested $14m total in the company and it’s off to the races, and is counter cyclical in a covid world so yeah

pretty pleased with my Fortnite sourcing thus far

— delian (@zebulgar) April 24, 2020

The pitch is simple: founders and investors sign up on the website, answer basic questions about their focus, company and stage before picking three game choices from eight options that include Fortnite, COD: Warzone and Valorant.

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Precursor Ventures’ Charles Hudson on ‘the conversation no one has during an upmarket’

For pre-seed startups, precarious times are baseline until they secure their first customer, first hire and first check. But no matter how built-in turbulence might be for a pre-seed founder, we’re entering a period where stresses are amplified and outlooks are unpredictable.

In light of the new market conditions, a harder fundraising market and slower expected growth, Charles Hudson (founder and general partner of Precursor Ventures) is urging his portfolio companies to reassess their futures with a refreshingly human question: “Are you excited and prepared to run this company for the next two years?

If not, you might want to do something else. Why? Because if a super early-stage company manages to survive the COVID-19 era, making it out the other end, it’s not clear that they’ll be venture-ready when markets recover. As Hudson put it, “there’s never been a better time to maybe fold.” That’s because, he explained, startups that merely survive won’t be judged merely against their peers that also survived; they will also compete with brand-new startups for capital and companies that didn’t need to hunker down during lean times.

It’s possible to make it through, but it won’t be an easy path.

TechCrunch spoke with Hudson earlier this week as part of our ongoing Extra Crunch Live series that brings leading founders and investors to our (virtual) stage. Between our editors and journalists and the best questions from the audience, we’re working with guests to understand the new world that we find ourselves in. That we’re hosting these events virtually instead of in-person is testament to our changed reality.

But the chat was far from all gloom; Hudson is bullish on a number of things. Niche publications with subscription economics? Yes. Social services targeting particular audiences? Yep! Precursor is still cutting checks into net-new deals, and while it’s wrapping up its second main fund and first opportunity fund, the firm is also raising a new, larger capital pool.

The conversation ran the full hour we had set aside for it, meaning we had to condense some later discussions about fintech and the new trade-off between growth and profit, but we did get to diversity in venture and startups in the future, and what impact a recession might have on both (it’s a bigger possible impact than you’re considering).

Hit the jump for the best Hudson takeaways and the full audio recording from the session. Head here if you need Extra Crunch access; there are some trials for just a few bucks, so everyone can access the chat. Let’s go!

Raising a fund in the COVID-19 era

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Clubhouse voice chat leads a wave of spontaneous social apps

Forget the calendar invite. Just jump into a conversation. That’s the idea powering a fresh batch of social startups poised to take advantage of our cleared schedules amidst quarantine. But they could also change the way we work and socialize long after COVID-19 by bringing the free-flowing, ad-hoc communication of parties and open office plans online. While “Live” has become synonymous with performative streaming, these new apps instead spread the limelight across several users as well as the task, game, or discussion at hand.

The most buzzy of these startups is Clubhouse, an audio-based social network where people can spontaneously jump into voice chat rooms together. You see the unlabeled rooms of all the people you follow, and you can join to talk or just listen along, milling around to find what interests you. High-energy rooms attract crowds while slower ones see participants slip out to join other chat circles.

Clubhouse blew up this weekend on VC Twitter as people scrambled for exclusive invites, humblebragged about their membership, or made fun of everyone’s FOMO. For now, there’s no public app or access. The name Clubhouse perfectly captures how people long to be part of the in-crowd.

Clubhouse was built by Paul Davison, who previously founded serendipitous offline people-meeting location app Highlight and reveal-your-whole-camera-roll app Shorts before his team was acquired by Pinterest in 2016. This year he debuted his Alpha Exploration Co startup studio and launched Talkshow for instantly broadcasting radio-style call-in shows. Spontaneity is the thread that ties Davison’s work together, whether its for making new friends, sharing your life, transmitting your thoughts, or having a discussion.

It’s very early days for Clubhouse. It doesn’t even have a website. There’s no telling exactly what it will be like if or when it officially launches, and Davison and his co-founder Rohan Seth declined to comment. But the positive reception shows a desire for a more immediate, multi-media approach to discussion that updates what Twitter did with text.

Sheltered From Surprise

What quarantine has revealed is that when you separate everyone, spontaneity is a big thing you miss. In your office, that could be having a random watercooler chat with a co-worker or commenting aloud about something funny you found on the internet. At a party, it could be wandering up to chat with group of people because you know one of them or overhear something interesting. That’s lacking while we’re stuck home since we’ve stigmatized randomly phoning a friend, differing to asynchronous text despite its lack of urgency.

Clubhouse founder Paul Davison. Image Credit: JD Lasica

Scheduled Zoom calls, utilitarian Slack threads, and endless email chains don’t capture the thrill of surprise or the joy of conversation that giddily revs up as people riff off each other’s ideas. But smart app developers are also realizing that spontaneity doesn’t mean constantly interrupting people’s life or workflow. They give people the power to decide when they are or aren’t available or signal that they’re not to be disturbed so they’re only thrust into social connection when they want it.

Houseparty chart ranks via AppAnnie

Houseparty embodies this spontaneity. It’s become the breakout hit of quarantine by letting people on a whim join group video chat rooms with friends the second they open the app. It saw 50 million downloads in a month, up 70X over its pre-COVID levels in some places. It’s become the #1 social app in 82 countries including the US, and #1 overall in 16 countries.

Originally built for gaming, Discord lets communities spontaneously connect through persistent video, voice, and chat rooms. It’s seen a 50% increase in US daily voice users with spikes in shelter-in-place early adopter states like California, New York, New Jersey, and Washington. Bunch, for video chat overlayed on mobile gaming, is also climbing the charts and going mainstream with its user base shifting to become majority female as they talk for 1.5 million minutes per day. Both apps make it easy to join up with pals and pick something to play together.

The Impromptu Office

Enterprise video chat tools are adapting to spontaneity as an alternative to heavy-handed, pre-meditated Zoom calls. There’s been a backlash as people realize they don’t get anything done by scheduling back-to-back video chats all day.

  • Loom lets you quickly record and send a video clip to co-workers that they can watch at their leisure, with back-and-forth conversation sped up because videos are uploaded as they’re shot.

  • Around overlays small circular video windows atop your screen so you can instantly communicate with colleagues while most of your desktop stays focused on your actual work.

  • Screen exists as a tiny widget that can launch a collaborative screenshare where everyone gets a cursor to control the shared window so they can improvisationally code, design, write, and annotate.

Screen

  • Pragli is an avatar-based virtual office where you can see if someone’s in a calendar meeting, away, or in flow listening to music so you know when to instantly open a voice or video chat channel together without having to purposefully find a time everyone’s free. But instead of following you home like Slack, Pragli lets you sign in and out of the virtual office to start and end your day.

Raising Our Voice

While visual communication has been the breakout feature of our mobile phones by allowing us to show where we are, shelter-in-place means we don’t have much to show. That’s expanded the opportunity for tools that take a less-is-more approach to spontaneous communication. Whether for remote partying or rapid problem solving, new apps beyond Clubhouse are incorporating voice rather than just video. Voice offers a way to rapidly exchange information and feel present together without dominating our workspace or attention, or forcing people into an uncomfortable spotlight.

High Fidelity is Second Life co-founder Philip Rosedale’s $72 million-funded current startup. After recently pivoting away from building a virtual reality co-working tool, High Fidelity has begun testing a voice and headphones-based online event platform and gathering place. The early beta lets users move their dot around a map and hear the voice of anyone close to them with spatial audio so voices get louder as you get closer to someone, and shift between your ears as you move past them. You can spontaneously approach and depart little clusters of dots to explore different conversations within earshot.

An unofficial mockup of High Fidelity’s early tests. Image Credits: DigitalGlobe (opens in a new window) / Getty Images

High Fidelity is currently using a satellite photo of Burning Man as its test map. It allows DJs to set up in different corners, and listeners to stroll between them or walk off with a friend to chat, similar to the real offline event. Since Burning Man was cancelled this year, High Fidelity could potentially be a candidate for holding the scheduled virtual version the organizers have promised.

Houseparty’s former CEO Ben Rubin and Skype GM of engineering Brian Meek are building a spontaneous teamwork tool called Slashtalk. Rubin sold Houseparty to Fortnite-maker Epic in mid-2019, but the gaming giant largely neglected the app until its recent quarantine-driven success. Rubin left.

His new startup’s site explains that “/talk is an anti-meeting tool for fast, decentralized conversations. We believe most meetings can be eliminated if the right people are connected at the right time to discuss the right topics, for just as long as necessary.” It lets people quickly jump into a voice or video chat to get something sorted without delaying until a calendared collab session.

Slashtalk co-founder Ben Rubin at TechCrunch Disrupt NY 2015

Whether for work or play, these spontaneous apps can conjure times from our more unstructured youth. Whether sifting through the cafeteria or school yard, seeing who else is at the mall, walking through halls of open doors in college dorms, or hanging at the student union or campus square, the pre-adult years offer many opportunities for impromptu social interation.

As we age and move into our separate homes, we literally erect walls that limit our ability to perceive the social cues that signal that someone’s available for unprompted communication. That’s spawned apps like Down To Lunch and Snapchat acquisition Zenly, and Facebook’s upcoming Messenger status feature designed to break through those barriers and make it feel less desperate to ask someone to hang out offline.

But while socializing or collaborating IRL requires transportation logistics and usually a plan, the new social apps discussed here bring us together instantly, thereby eliminating the need to schedule togetherness ahead of time. Gone too are the geographic limits restraining you to connect only with those within a reasonable commute. Digitally, you can pick from your whole network. And quarantines have further opened our options by emptying parts of our calendars.

Absent those frictions, what shines through is our intention. We can connect with who we want and accomplish what we want. Spontaneous apps open the channel so our impulsive human nature can shine through.

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Clubhouse announces new collaboration tool and free version of its project management platform

Clubhouse — the software project management platform focused on team collaboration, workflow transparency and ease of integration — is taking another big step toward its goal of democratizing efficient software development.

Traditionally, legacy project management programs in software development can often appear like an engineer feeding frenzy around a clunky stack of to-dos. Engineers have limited clarity into the work being done by other members of their team or into project tasks that fall outside of their own silo.

Clubhouse has long been focused on easing the headaches of software development workflows by providing full visibility into the status of specific tasks, the work being done by all team members across a project, as well as higher-level project plans and goals. Clubhouse also offers easy integration with other development tools as well as its own API to better support the cross-functionality a new user may want.

Today, Clubhouse released a free version of its project management platform that offers teams of up to 10 people unlimited access to the product’s full suite of features, as well as unlimited app integrations.

The company also announced it will be launching an engineer-focused collaboration and documentation tool later this year, which will be fully integrated with the Clubhouse project management product. The new product, dubbed “Clubhouse Write,” is currently in beta (you can request early access here), but will allow development teams to collaborate, organize and comment on project documentation in real time, enabling further inter-team communication and a more open workflow.

The broader mission behind the Clubhouse Write tool and the core product’s free plan is to support more key functions in the development process for more people, ultimately making it easier for anyone to start dynamic and distributed software teams and ideate on projects.

write screenshot

“Clubhouse Write” beta version (image via Clubhouse)

In an interview with TechCrunch, Clubhouse also discussed how the offerings will provide key competitive positioning against larger incumbents in the software project management space. Clubhouse has long competed with Atlassian’s project management tool “Jira,” but now the company is doubling down by launching Clubhouse Write, which will compete head-on with Atlassian’s team collaboration product “Confluence.”

According to recent Atlassian investor presentations, Jira and Confluence make up the lion’s share of Atlassian’s business and revenues. And with Atlassian’s market capitalization of ~$30 billion, Clubhouse has its sights set on what it views as a significant market share opportunity.

According to Clubhouse, the company believes it’s in pole position to capture a serious chunk of Atlassian’s foothold, given it designed its two products to have tighter integration than the legacy platforms, and since Clubhouse is essentially providing free versions of what many are already paying for to date.

And while Atlassian is far from the only competitor in the cluttered project management space, few if any competing platforms are offering a full project tool kit for free, according to the company. Clubhouse is also encouraged by the strong support it has received from the engineering community to date. In a previous interview with TechCrunch’s Danny Crichton, the company told TechCrunch it had reached at least 700 enterprise customers using the platform before hiring any sales reps, and users of the platform already include Nubank, Dataiku and Atrium, amongst thousands of others.

Clubhouse has ambitious plans to further expand its footprint, having raised $16 million to date through its Series A, according to Crunchbase, with investments from a long list of Silicon Valley mainstays, including Battery Ventures, Resolute Ventures, Lerer Hippeau, RRE Ventures, BoxGroup and others.

A former CTO himself, Clubhouse co-founder and CEO Kurt Schrader is intimately familiar with the opacity in product development that frustrates engineers and complicates release schedules. Schrader and Clubhouse CMO Mitch Wainer believe Clubhouse can maintain its organic growth by staying hyperfocused on designing for product managers and creating simple workflows that keep engineers happy. According to Schrader, the company ultimately wants to be the “default [destination] for modern software teams to plan and build software.”

“Clubhouse is the best software project management app in the world,” he said. “We want all teams to have access to a world-class tool from day one whether it’s a 5 or 5,000 person team.”

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ClubHouse Is Like Salesforce For The Engineering Team

Screenshot 2015-07-21 09.10.08 In this day and age, the entrepreneurial spirit has been awakened in even those that can’t build software, which can make the engineering team a slightly mysterious entity.
ClubHouse, founded by Kurt Schrader and Andrew Childs formerly of Intent Media, aims to bring more transparency and predictive models to the process of engineering. The company has raised $2 million in seed thus far. Read More

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