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Men are a niche demographic
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
Danny was back, joining Natasha and Alex and Grace and Chris to chat through the week’s coming and goings. But, before we get to the official news, here’s some personal news: Danny is stepping back from his role as co-host of the Friday show! Yes, Mr. Crichton will still take part in our mid-week, deep-dive episodes, but this is the conclusion of his run as part of the news roundup. We will miss him, glad that his transitions and wit will continue to be part of the Equity universe.
Who will take the third chair? Well, stay tuned. We have some neat things planned.
Now, the rundown:
- Funding rounds: Maven has built a women’s health unicorn, Monte Carlo raised $60 million for data observability and Launch House wants to scale venture community with a fresh $3 million in its accounts. The last round is probably the most controversial one of them all, so each of us took a side and discussed what’s new and old about hacker homes.
- The next crop of key IPOs: Please say hello to the rising seniors of the startup world, companies that are the next IPOs that we are excited about. The list includes Discord, Databricks, Chime and Carta, which made headlines this week after setting its own valuation with its own tool. Will investors and startups turn to a third party to value companies? What happens if secondary investors aren’t as into your product as you are? We had a ton of questions.
- Brazil’s burgeoning startup and exit market: In the wake of Nuvemshop raising a zillion dollars, it was time to sit down and talk about Brazil. Alex and Anna Heim have been rigorous in their reporting on the fascinating exit market. Who knew dual-listings were so dramatic?
- After traveling overseas, we went very close to home to speak about the news industry. Danny had a piece about informed., which a trio of media veterans believe could fix the economics that plague subscription-based publications. The nuts and bolts are in the episode, but prepare to debate if you’re the kind of reader that likes a snack, or the whole lip-smackin’ meal.
- Finally, we discuss the wack reality that YikYak is indeed back.
Equity drops every Monday at 7:00 a.m. PDT, Wednesday, and Friday morning at 7:00 a.m. PDT, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts.
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Roblox acquires Discord competitor Guilded
Roblox is using M&A to bulk up its social infrastructure, announcing Monday morning that they had acquired the team at Guilded that has been building a chat platform for competitive gamers.
The service competes with gaming chat giant Discord, with the team’s founders telling TechCrunch in the past that as Discord’s ambitions had grown beyond the gaming world, its core product was meeting fewer competitive gaming needs. Like Discord, users can have text and voice conversations on the Guilded platform, but Guilded also allowed users to organize communities around events and calendars, with plenty of specific functionality designed around ensuring that tournaments happened seamlessly.
The startup’s product supported hundreds of games, with specific functionality for a handful of titles, including League of Legends, Fortnite, CS: GO and, yes, Roblox. Earlier this year, the company launched a bot API designed to help nontechnical users build bots that could enrich their gaming communities.
Guilded had raised $10.2 million in venture capital funding to date according to Crunchbase, including a $7 million Series A led by Matrix Partners early last year. The company launched out of Y Combinator in mid-2017.
Terms of the Roblox deal weren’t disclosed. In an announcement post, Roblox detailed that the Guilded team will operate as an independent product group going forward. In a separate blog post, Guilded CEO Eli Brown wrote that existing stakeholders will be able to continue using the product as they have previously.
“Everyone – including communities, partners, and bot developers – will be able to keep using Guilded the same way you are now,” Brown wrote. “Roblox believes in our team and in our mission, and we’re going to continue to operate as an independent product in order to achieve it.”
Roblox has seen profound success and heightened investor attention in recent years as the pandemic has pushed more gamers online and brought more users into the fold, but that success has drawn the attention of competitors. In June, Facebook acquired a small Roblox competitor called Crayta, with CEO Mark Zuckerberg announcing just weeks ago that he planned to transform Facebook into a “metaverse” company, using a term many have come to associate closely with what Roblox has been building. Guilded represents an opportunity for Roblox to bring its user base deeper inside its own suite of products, creating a social infrastructure that keeps users engaged.
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Sony announces investment and partnership with Discord to bring the chat app to PlayStation
Sony and Discord have announced a partnership that will integrate the latter’s popular gaming-focused chat app with PlayStation’s own built-in social tools. It’s a big move and a fairly surprising one given how recently acquisition talks were in the air — Sony appears to have offered a better deal than Microsoft, taking an undisclosed minority stake in the company ahead of a rumored IPO.
The exact nature of the partnership is not expressed in the brief announcement post. The closest we come to hearing what will actually happen is that the two companies plan to “bring the Discord and PlayStation experiences closer together on console and mobile starting early next year,” which at least is easy enough to imagine.
Discord has partnered with console platforms before, though its deal with Microsoft was not a particularly deep integration. This is almost certainly more than a “friends can see what you’re playing on PS5” and more of a “this is an alternative chat infrastructure for anyone on a Sony system.” Chances are it’ll be a deep, system-wide but clearly Discord-branded option — such as “Start a voice chat with Discord” option when you invite a friend to your game or join theirs.
The timeline of early 2022 also suggests that this is a major product change, probably coinciding with a big platform update on Sony’s long-term PS5 roadmap.
While the new PlayStation is better than the old one when it comes to voice chat, the old one wasn’t great to begin with, and Discord is not just easier to use but something millions of gamers already do use daily. And these days, if a game isn’t an exclusive, being robustly cross-platform is the next best option — so PS5 players being able to seamlessly join and chat with PC players will reduce a pain point there.
Of course Microsoft has its own advantages, running both the Xbox and Windows ecosystems, but it has repeatedly fumbled this opportunity and the acquisition of Discord might have been the missing piece that tied it all together. That bird has flown, of course, and while Microsoft’s acquisition talks reportedly valued Discord at some $10 billion, it seems the growing chat app decided it would rather fly free with an IPO and attempt to become the dominant voice platform everywhere rather than become a prized pet.
Sony has done its part, financially speaking, by taking part in Discord’s recent $100 million H round. The amount they contributed is unknown, but perforce it can’t be more than a small minority stake, given how much the company has taken on and its total valuation.
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What the MasterClass effect means for edtech
MasterClass, which sells a subscription to celebrity-taught classes, sits on the cusp of entertainment and education. It offers virtual, yet aspirational learning: an online tennis class with Serena Williams, a cooking session with Gordon Ramsay. While there’s the off chance that an instructor might actually talk to you — it has happened before — the platform mostly just offers paywalled documentary-style content.
The vision has received attention. MasterClass is raising funding that would value it at $2.5 billion, as scooped by Axios and confirmed independently by a source to TechCrunch. But while MasterClass has found a sweet spot, can the success be replicated?
Investors certainly think so. Outlier, founded by MasterClass’ co-founder, closed a $30 million Series C this week, for affordable, digital college courses. The similarities between Outlier and its founder’s alma mater aren’t subtle: It’s literally trying to apply MasterClass’ high-quality videography to college classes. This comes a week after I wrote about a “MasterClass for Chess lovers” platform launched by former Chess World Champion Garry Kasparov.
Two back-to-back MasterClass copycats raising millions in venture capital makes me think about if the model can truly be verticalized and focused down into specific niches. After 2020 and the rise of Zoom University, we know edtech needs to be more engaging, but we don’t know the exact way to get there. Is it by creating micro-learning communities around shared loves? Is it about gamification? Aspirational learning has different incentives than for-credit learning. In order to be successful, Outlier needs to prove to universities it can use MasterClass magic for true outcomes that rival in-person lectures. It’s a harder, and more ambtious promise.
My riff aside, I turned to two edtech founders to understand how they see the MasterClass effect panning out, and to cross-check my gut reaction.
Taylor Nieman, the founder of language learning startup Toucan:
Although I do love how these models try to lean into this theme of “invisible learning” like we leverage with Toucan, it faces the same issues as so many other consumer products that try to steal time out of people’s very busy days. Constantly competing for time leads to terrible engagement metrics and very high churn. That leads me to question what true learning outcomes could occur from little to no usage of the product itself.
Amanda DoAmaral, the founder of Fiveable, a learning platform for high school students:
Masterclass is important for showing us why educational content should be treated more like entertainment. All of our bars for content quality is much higher now than it ever was before and I’m excited to see how that affects learning across the board.
For students, it’s about creating environments that support them holistically and giving them space to collaborate openly. It feels so obvious that these spaces should exist for young people, but we’ve lost sight of what students actually need. At my school, we built policies that assumed the worst in students. I want to flip that. Assume the best, be proactive to keep them safe, and create ways to react when we need to.
Anyways, that’s just some nuance to chew on during this fine day. In the rest of this newsletter, we will focus a lot on tactical advice for founders, from the money they raise to the peacock dance they might want to do one day. Make sure to follow me on Twitter @nmasc_ so we can talk during the week, too!
The peacock dance
You know when male peacocks fan their feathers to court a lover? That, but for startups trying to get acquired. As one of our many rabbit holes on Equity this week, we talk about Discord walking away from a Microsoft deal, and if that deal ever existed in the first place or if it was just a way to drum up investor excitement in the audio gaming platform.
Here’s what to know: Discord is reportedly pursuing an IPO after walking away from talks with multiple companies that were looking to acquire the audio gaming giant.
Discord aside, the consolidation environment continues to be hot for some sectors.
- To sell or not to sell: Lessons from a bootstrapped CEO
- Once VMware is free from Dell, who might fancy buying it?
Image Credits: VectorInspiration / Getty Images
Even venture capital knows that the future isn’t simply venture capital
Clearbanc, a Toronto-based fintech startup that gives non-dilutive financing to businesses, has rebranded alongside a $100 million financing that valued it at $2 billion. Now rebranded as Clearco, the startup wants to be more than just a capital provider, but a services provider, too.
Here’s what to know: The startup has been on a tear of product development for the past year, launching services such as valuation calculators or runway tools. It’s a step away from what Clearbanc originally flexed: the 20-minute term sheet and rapid-fire investment. I talk about some of the levers at play in my piece:
Many of Clearco’s newest products are still in their infancy, but the potential success of the startup could nearly be tied to the general growth of startups looking for alternatives to venture capital when financing their startups. Similar to how AngelList’s growth is neatly tied to the growth of emerging fund managers, Clearco’s growth is cleanly related to the growth of founders who see financing as beyond a seed check from Y Combinator.
- How are VCs handling diligence in a world where deals open and close in days, not months
- Clearbanc rebrands into a unicorn
- After going public, once-hot startups are riding a valuation roller coaster
Abstract human brain made out of dollar bills isolated on white background. Image Credits: Iaremenko / Getty Images
Don’t market your opportunity away
Keeping on the theme of tactical advice for founders, let’s move onto talking about marketing. Tim Parkin, president of Parkin Consulting, explained how startup founders can use marketing as a tool to stand out in the noisy environment. Differentiation has never been harder, but also more imperative.
Here’s what to know: Parkin outlines four ways that martech will shift in 2021, strapped with anecdotes and a nod to the importance of investing in influencers.
- Customer care as a service: Outsourcing can help your startup wow clients 24/7
- 5 creator economy VCs see startup opportunities in monetization, discovery and much more
- Time-strapped IT teams can use low-code software to drive quick growth
Red ball on curved light blue paper, blue background. Image Credits: PM Images / Getty Images
Around TechCrunch
Your humble yet favorite startup podcast, Equity, got nominated for a Webby! Me and the team need your help to win, so please vote for us here. Your support means a ton.
This newsletter will always be free, but if you do want to support me, feel free to use code STARTUPSWEEKLY for 25% off a subscription to Extra Crunch.
Across the site
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The rise of the next Coinbase, thanks to Coinbase
Tiger Global backs Indian crypto startup at over $500M valuation
Early Coinbase backer Garry Tan is keeping the ‘vast majority’ of his shares because of this deal
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Dear Sophie: How can I get my startup off the ground and visit the US?
How to pivot your startup, save cash and maintain trust with investors and customers
How startups can ensure CCPA and GDPR compliance in 2021
Image Credits: TechCrunch
Thanks for reading along today and everyday. Sending love to my readers in India and everyone around the world that is facing yet another deadly surge of this horrible disease. I’m rooting for you.
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No one is talking about remote work from space
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
First and foremost, Equity was nominated for a Webby for “Best Technology Podcast”!!! Drop everything and go Vote for Equity! We’d appreciate it. A lot. And even if we lose, well, we’ll keep doing our thing and making each other laugh.
Natasha and Danny and Alex and Chris got together to chat through the week’s biggest news. And like every other week in recent memory, it was a busy one. But we did our best to hit some M&A news, some unicorn news and some funding news from smaller startups.
Now, onto the show rundown; here’s what we discussed:
- The Discord-Microsoft deal is done, and Danny has a hot take. Namely, in his view, the deal was mostly banker chatter more than a real possibility. More chaff than wheat, in other words. Agree or not, we’re stoked for the Discord IPO in a few years (quarters?) time.
- Mastercard bought Erkata, and Danny was on hand to explain why we care about the deal. Sure, it was $825 million in value, but some venture data from Finledger helped explain just how much capital is flowing into similar companies. Let’s see how that math works out.
- Clearbanc rebranded itself into a fintech unicorn, providing services along with sweet, sweet capital.
- The UiPath IPO finally priced and started to trade. It had a good first day, and you can check out what we learned talking to its CFO here.
- Over in China, a country that we’ve not covered enough lately, Laiye raised $50 million more. Like UiPath it competes in the RPA world.
- Deel, for one, had a good 2020. It hit 20x growth in revenue last year, and recently raised at a $1.25 billion valuation.
- And then we closed with two seed rounds raised by recent Y Combinator grads: Here’s the Queenly round, and here’s the Albedo deal!
We’ll see you on Monday.
Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!
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You might have just missed the best time to sell your startup
Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday? Sign up here.
Happy Saturday, everyone. I do hope that you are in good spirits and in good health. I am learning to nap, something that has become a requirement in my life after I realized that the news cycle is never going to slow down. And because my partner and I adopted a third dog who likes to get up early, please join me in making napping cool for adults, so that we can all rest up for Vaccine Summer. It’s nearly here.
On work topics, I have a few things for you today, all concerning data points that matter: Q1 2021 M&A data, March VC results from Africa, and some surprising (to me, at least) podcast numbers.
On the first, Dan Primack shared a few early first-quarter data points via Refinitiv that I wanted to pass along. Per the financial data firm, global M&A activity hit $1.3 trillion in Q1 2021, up 93% from Q1 2020. U.S. M&A activity reached an all-time high in the first quarter, as well. Why do we care? Because the data helps underscore just how hot the last three months have been.
I’m expecting venture capital data itself for the quarter to be similarly impressive. But as everyone is noting this week, there are some cracks appearing in the IPO market, as the second quarter begins that could make Q2 2021 a very different beast. Not that the venture capital world will slow, especially given that Tiger just reloaded to the tune of $6.7 billion.
On the venture capital topic, African-focused data firm Briter Bridges reports that “March alone saw over $280 million being deployed into tech companies operating across Africa,” driven in part by “Flutterwave’s whopping $170 million round at a $1 billion valuation.”
The data point matters as it marks the most active March that the African continent has seen in venture capital terms since at least 2017 — and I would guess ever. African startups tend to raise more capital in the second half of the year, so the March result is not an all-time record for a single month. But it’s bullish all the same, and helps feed our general sentiment that the first quarter’s venture capital results could be big.
And finally, Index Ventures’ Rex Woodbury tweeted some Edison data, namely that “80 million Americans (28% of the U.S. 12+ population) are weekly podcast listeners, +17% year-over-year.” The venture capitalist went on to add that “62% of the U.S. 12+ population (around 176 million people) are weekly online audio listeners.”
As we discussed on Equity this week, the non-music, streaming audio market is being bet on by a host of players in light of Clubhouse’s success as a breakout consumer social company in recent months. Undergirding the bets by Discord and Spotify and others are those data points. People love to listen to other humans talk. Far more than I would have imagined, as a music-first person.
How nice it is to be back in a time when consumer investing is neat. B2B is great but not everything can be enterprise SaaS. (Notably, however, it does appear that Clubhouse is struggling to hold onto its own hype.)
Look I can’t keep up with all the damn venture capital rounds
TechCrunch Early Stage was this week, which went rather well. But having an event to help put on did mean that I covered fewer rounds this week than I would have liked. So, here are two that I would have typed up if I had had the spare hours:
- Striim’s $50 million Series C. Goldman led the transaction. Striim, pronounced stream I believe, is a software startup that helps other companies move data around their cloud and on-prem setups in real time. Given how active the data market is today, I presume that the TAM for Striim is deep? Quickly flowing? You can supply a better stream-centered word at your leisure.
- Kudo’s $21 million Series A. I covered Kudo last July when it raised $6 million. The company provides video-chat and conferencing services with support for real-time translation. It had a good COVID-era, as you can imagine. Felicis led the A after taking part in the seed round. I’ll see if I can extract some fresh growth metrics from the company next week. One to watch.
And two more rounds that you also might have missed that you should not. Holler raised $36 million in a Series B. Per our own Anthony Ha, “[y]ou may not know what conversational media is, but there’s a decent chance you’ve used Holler’s technology. For example, if you’ve added a sticker or a GIF to your Venmo payments, Holler actually manages the app’s search and suggestion experience around that media.”
I feel old.
And in case you are not paying enough attention to Latin American tech, this $150 million Uruguayan round should help set you straight.
Various and sundry
Finally this week, some good news. If you’ve read The Exchange for any length of time, you’ve been forced to read me prattling on about the Bessemer cloud index, a basket of public software companies that I treat with oracular respect. Now there’s a new index on the market.
Meet the Lux Health + Tech Index. Per Lux Capital, it’s an “index of 57 publicly traded companies that together best represent the rapidly emerging Health + Tech investment theme.” Sure, this is branded to the extent that, akin to the Bessemer collection, it is tied to a particular focus of the backing venture capital firm. But what the new Lux index will do, as with the Bessemer collection, is track how a particular venture firm is itself tracking the public comps for their portfolio.
That’s a useful thing to have. More of this, please.
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Nonobvious acquisitions are on my 2021 bingo board
At the end of 2020, I argued that edtech needs to think bigger in order to stay relevant after the pandemic. I urged founders to think less about how to bundle and unbundle lecture experience, and more about how to replace outdated systems and methods with new, tech-powered solutions. In other words, don’t simply put engaging content on a screen, but innovate on what that screen looks like, tracks and offers.
A few months into 2021, the exit environment in edtech…feels like it’s doing exactly that. The same startups that hit billion and multi-billion valuations during the pandemic are scooping up new talent to broaden their service offerings.
Ruben Harris, the founder of Career Karma, a platform that matches aspiring coding professionals to bootcamps, put together a massive report recently with his team to talk about the pandemic’s impact on the bootcamp market.
James Gallagher, the author of the report, tells me:
It is important to note that the full potential of bootcamps has not yet been realised. We are now seeing more exploration of niches like technology sales which provide gateways into new careers in tech for people who otherwise may not have been able to acquire training. To scale such models, new businesses will need venture capital.
He went on to explain how a notable acquisition from 2020 was K12 scooping up Galvanize, “which would give K12 exposure into corporate training and the coding bootcamp space, a market outside of K12’s focus at the moment.”
To me this report signal two things: the financial interest in boot camps isn’t simply stemming from other bootcamps (although that is happening), but it’s surprising partnerships. Leaving this subsector, we see creative acquisitions such as a Roblox for edtech buying a language learning tool, and a startup known for flashcards scooping up a tech tutoring service.
- How is edtech spending its extra capital
- Byju’s in talks to acquire US-based reading platform, Epic
- The tech-powered wave of smart, not slow, tutoring sessions
Readers should know by this point that I love a nonobvious acquisition (except when this almost happened), so if you have any more tips on coming deals in edtech, please Signal me or direct message me on Twitter.
I’ll end with this: Successful startup founders are innately ambitious, finding opportunity in moonshots and convincing others that the odds are in their favor. However, the ceiling for what defines ambition heightens almost everyday. What used to be a win is now a nonnegotiable, and a feat is only a feat until your competitor hits the exact same milestone.
Acquisitions are one way to scoop up competition and synergistic talent, but it’s what happens next that matters the most.
In the rest of this newsletter, we will talk about Clubhouse competitors, how a homegrown experiment became one of the fastest growing companies in fitness tech and a cool-down in public markets (?!). As always, you can get this newsletter in your inbox each Saturday morning, so subscribe here to join the cool kids.
Clubhouse might create billions in value, but could capture none of it
Remember when everyone was buzzing around about building Stories? That’s so pre-pandemic. A number of companies recently announced plans to build their own versions of Clubhouse, after the buzzy app unearthed the consumer love for audio.
Here’s what to know: It might be easier to start guessing who isn’t building a Clubhouse clone at this point. Our predictions are already starting, but jokes aside, the rise in clones could mean that Clubhouse might have to make a run for its pre-monetized money (cough, cough, Twitter spaces). It doesn’t matter if a startup is first in unlocking a key insight, all that matters is who executes that key insight the best.
- Facebook’s Clubhouse rival looks a lot like Clubhouse right now
- Discord is launching new Clubhouse-like channels for audio events
- LinkedIn confirms it’s working on a Clubhouse rival, too
- Swell launches its app for asynchronous voice conversations
- Slack wants to be more than a text-based messaging platform
- Twitter Spaces arrives on Android ahead of Clubhouse
- Spotify is getting into live audio because of course it is
- Career Karma built audio rooms
- China’s Clubhouse clones via Protocol
Image Credits: Getty Images
A strong unicorn, literally
Tonal, a fitness tech startup, became a unicorn this week after raising a new tranche of capital.
Here’s what to know: The new status underscores market growth for at-home fitness solutions. And while we don’t have a Tonal S-1 yet, we do have a Tonal EC-1. EC-1’s are TechCrunch’s riff on an S-1, and are essentially a deep dive into a company.
Reporter JP Mangalindan wrote thousands and thousands of words about Tonal, from its origin story to business model, its focus on communities and its biggest hurdles ahead.
- How a homegrown experiment became one of the fastest-growing companies in fitness tech
- Millions of dollars and 3.5 years, and it all came down to this
- Building online communities for fun, profit and product
- Can Tonal become the luxury fitness market champion?
Image Credits: Nigel Sussman
Initial public o….no
You’ve probably had a better week than Compass, Deliveroo and Kaltura. The three companies all had different events that illustrate a potential damper on the part that has been the public markets.
Here’s what to know: Compass cut its shares and lowered pricing of said shares, Deliveroo had a rough debut as a delivery company on the public markets, and Kaltura postponed its IPO after valuation demand didn’t hit expectations.
In other news, though:
- Coursera prices IPO at top end of its range in boon to edtech valuations
- Coinbase to direct list on April 14th, provide financial update on April 6th
- UiPath’s IPO filing suggests robotic process automation is booming
Photo Taken In Arizona, United States. Image Credits: Jure Batagelj / 500px / Getty Images
Around TechCrunch
Thanks to everyone who tuned in to TechCrunch Early Stage! If you enjoyed the event (or missed it), don’t worry: Disrupt is almost here.
- Buy a pass to Disrupt 2021 and get a free Extra Crunch membership
- And I want to give a shout-out to two newsletters that I hope you read each week along with Startups Weekly: This Week in Apps and The Exchange.
Across the week
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Embedded procurement will make every company its own marketplace
5 mistakes creators make building new games on Roblox
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How our SaaS startup improved net revenue retention by more than 30 points in two quarters
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Clubhouse will create billions in value and capture none of it
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 were all here to chat through the week’s biggest tech happenings. It was a busy week on the IPO front, Danny was buried in getting the Tonal EC-1 out, and Natasha took some time off. But the host trio managed to prep and record a show that was honestly a kick to record, and we think, a pleasure to listen to!
So, for your morning walk, here’s what we have for you:
- The Substack conversation: Does the new $65 million check make sense? What is Substack? Does it have a moat? Why is Natasha’s URL so much better than Alex’s?
- Cameo raised $100 million and none of us really have a bone to pick with that. Danny actually argues in favor of it.
- The Clubhouse conversation: Does every single product need to feature live audio? The answer appears to be yes, oddly enough. Discord comes up along with Spotify, as does LinkedIn. And somehow, Microsoft Excel and Miami?
- TechCrunch scooped that Pipe is raising more money at a huge new valuation, and we argue about what a derivative really is.
- Harlem Capital raises $134 million for its new fund.
- MaC VC raises $103 million for its new fund.
It was a mix of laughs, ‘aha’ moments and honest conversations about how complex ambition in startups should be. One listener the other day mentioned to us that the pandemic made it harder to carve out time for podcasts, since listening was often reserved for commutes. We get it, and in true scrappy fashion, we’re curious how you’ve adapted to remote work and podcasts. Let us know how you tune into Equity via Twitter and remember that we’re thankful for your ears!
Equity drops every Monday at 7:00 a.m. PST, Wednesday, and Friday at 6:00 AM PST, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts!
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Discord’s reported $10B exit; Compass and Intermedia Cloud Communications set IPO price ranges
It’s demo day for the current Y Combinator class, so we’ll have a largely early-stage focus at TechCrunch today. But there’s also a host of late- and super-late-stage news this morning that matters.
Let’s get to all of it before we start to talk accelerators, overheated pre-seed valuations and the like.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
There are three things to discuss. First, the possible $10 billion exit of Discord to Microsoft. Discord is a well-financed unicorn that has raised oodles of capital and reportedly sports rapidly expanding revenues. Our goal will be to vet whether the price tag in question makes any sense, or if it is too low.
Second: Real estate tech company Compass has set an IPO price range we need to explore. Is its resulting valuation strong? Does it line up with its recent financial performance?
And, third, Intermedia Cloud Communications has priced its IPO. We’re behind on this entire debut, so we’ll take a second to riff on what the company does and what it is worth.
It’s a lot. But if we don’t get through it all now, we’ll fall behind and feel silly later. Let’s get to work!
Discord and Microsoft
Microsoft might be getting good at community, which is an odd thing to say about the enterprise software and cloud computing giant. The company’s Xbox gaming ecosystem has survived the test of time, Github is doing fine under Microsoft’s auspices, and Minecraft seems unharmed by Redmond’s stewardship.
That means gamers, developers and kids are all content to hang with Satya Nadella and company. Adding Discord to the mix might give Microsoft even more tooling to augment its existing communities, or perhaps tie them more closely together. But that’s all product news, which isn’t our remit. Let’s talk numbers.
The New York Times reported that Discord has “held deal talks with Microsoft for a transaction that could top $10 billion.” That figure has been widely reported, so we’ll use it for our work.
With a possible valuation in hand, we need revenue numbers to figure out if the possible sale price makes any sense. Happily, we have somewhat fresh numbers: The Wall Street Journal reported earlier this month that Discord “generated $130 million in revenue [in 2020], up from nearly $45 million in 2019.”
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Daily Crunch: Discord raises $100M
Discord announces a big funding round, Google gets European approval to acquire Fitbit and Twitter launches a new voice-based feature. This is your Daily Crunch for December 17, 2020.
Discord raises $100M
The popular gaming chat platform confirmed today that it has raised $100 million and also announced that it has 140 million monthly active users, twice as many as a year ago.
“We are humbled and honored by the growth we’ve seen among so many incredible and diverse communities that have made Discord their place to hang out,” said CEO Jason Citron in a statement. “As we look to 2021, we are excited about what we have in store and plan to use this funding to help make Discord even better — both for our free service and our Nitro subscribers.”
The confirmation comes after TechCrunch reported that the company was raising up to $140 million at a valuation that could be as high as $7 billion.
The tech giants
Europe clears Google-Fitbit with a ten-year ban on using health data for ads — Under the terms of the EU’s clearance for the deal, Google has committed to not use Fitbit user data in the European Economic Area for ad targeting purposes for a 10-year period.
Twitter launches its voice-based ‘Spaces’ social networking feature into beta testing — During this initial testing period, the product will be limited to select individuals, largely from underrepresented backgrounds, Twitter says.
Google slammed for ‘monopoly power’ in new antitrust lawsuit from 35 states — Compared to the Texas-led suit against Google announced yesterday, the second lawsuit represents a broader coalition of 35 states.
Startups, funding and venture capital
Coinbase files to go public confidentially and we’re hyped — To be clear, I don’t consider myself part of the “we” that’s hyped, but Alex Wilhelm definitely is.
Spryker raises $130M at a $500M+ valuation to provide B2Bs with agile e-commerce tools — Spryker offers a platform to bring a company’s inventory online, as well as tools to analyze and measure how that inventory is selling and where.
Health insurer Oscar adds another $140M in what’s likely a pre-IPO round — The new capital means that Oscar has raised what would be the equivalent of $1 million a day for the entirety of 2020.
Advice and analysis from Extra Crunch
Virgin Orbit, Relativity Space and Astra dish on the economics and efficiencies of space launches — Relativity Space CEO Tim Ellis, Astra CEO Chris Kemp and Virgin Orbit’s VOX Space President Mandy Vaughn all joined us at TC Sessions: Space to discuss their approaches to the small spacecraft launch market.
Just how bad is that hack that hit US government agencies? — Spoiler: It’s a nightmare scenario.
2020’s top 10 enterprise M&A deals totaled a staggering $165B — It was a blockbuster year for enterprise M&A.
(Extra Crunch is our membership program, which aims to democratize information about startups. You can sign up here.)
Everything else
HBO Max finally lands on Roku devices — “Finally” gets overused in headlines, but it absolutely applies here.
You can now securely submit tips to TechCrunch using SecureDrop — We’re making it easier and more secure for you to contact TechCrunch reporters and editors.
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