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Enterprise healthcare platform Collective Health raises $205M led by SoftBank

Published June 17, 2019

SoftBank’s Vision Fund may be facing some challenges when it comes to restocking its massive reserves, but the firm famous for cutting big checks is leading a sizeable round for Collective Health. This startup focused on enterprise employee healthcare management announced a $205 million Series E raise today, bringing its total funding to $434 million since its founding in 2013. Its last raise was a $110 million round in February, 2018.

Collective Healths’ client list includes Red Bull, Pinterest, Zendesk and more, and it counts GV, NEA, DFJ Growth and Sun Life among its financial backers. Its platform is an integrator for the various insurance and benefit providers that large employers offer to their employees, and provides access to info, as well as claims filing, eligibility checks and data sharing across vendors. The funding will also help with additional engineering hires to continue to build out the platform.

The funding will help the company add more partner providers, a process that’s key to continued growth as it seeks to expand its footprint and ensure that it can serve customers and their employees across the U.S. In addition to the Vision Fund, this round included new investors PSP Investments, DFJ Growth and G Squared, as well as new participation from existing investors.

Slack aims to be the most important software company in the world, says CEO

Published May 13, 2019

Slack this morning disclosed estimated preliminary financial results for the first quarter of 2019 ahead of a direct listing planned for June 20.

Citing an addition of paid customers, the workplace messaging service posted revenues of about $134 million, up 66% from $81 million in the first quarter of 2018. Losses from operations increased from $26 million in Q1 2018 to roughly $39 million this year.

In addition to filing updated paperwork, the Slack executive team gathered on Monday to make a final pitch to potential shareholders, emphasizing its goal of replacing email within enterprises across the world.

“People deserve to do the best work of their lives,” Slack co-founder and chief executive officer Stewart Butterfield said in a video released alongside a live stream of its investor day event. “This desire of feeling aligned with your team, of removing confusion, of getting clarity; the desire for support in doing the best work of your life, that’s universal, that’s deeply human. It appeals to people with all kinds of roles, in all kinds of industries, at all scales of organization and all cultures.”

“We believe that whoever is able to unlock that potential for people … is going to be the most important software company in the world. We aim to be that company,” he added.”

Uber’s first day as a public company didn’t go so well

Slack, valued at more than $7 billion with its last round of venture capital funding, plans to list on the NYSE under the ticker symbol “SK.”

The business filed to go public in April as other well-known tech companies were finalizing their initial public offerings. Following Uber’s disastrous IPO last week, public and private market investors alike will be keeping a close-eye on Slack’s stock market performance, which may determine Wall Street’s future appetite for Silicon Valley’s unicorns.

Though some of the recent tech IPOs performed famously, like Zoom, Uber and Lyft’s performance has served as a cautionary tale for going out in poor market conditions with lofty valuations. Uber began trading last week at below its IPO price of $45 and is today down significantly at just $36 per share. Lyft, for its part, is selling for $47.5 apiece today after pricing at $72 per share in March.

Slack isn’t losing billions per year like Uber, but it’s also not as close to profitability as expected. In the year ending January 31, 2019, Slack posted a net loss of $138.9 million and revenue of $400.6 million. That’s compared to a loss of $140.1 million on revenue of $220.5 million for the year ending January 31, 2018. In its S-1, the company attributed its losses to scaling the business and capitalizing on its market opportunity.

Workplace messaging startup Slack said Monday, February 4, 2019 it had filed a confidential registration for an initial public offering, becoming the latest of a group of richly valued tech enterprises to look to Wall Street. (Photo by Eric BARADAT / AFP) (Photo credit should read ERIC BARADAT/AFP/Getty Images)

Slack currently boasts more than 10 million daily active users across more than 600,000 organizations — 88,000 on the paid plan and 550,000 on the free plan.

Slack has been able to bypass the traditional roadshow process expected of an IPO-ready business, opting for a path to Wall Street popularized by Spotify in 2018. The company plans to complete in mid-June a direct listing, which allows companies to forgo issuing new shares and instead sell directly to the market existing shares held by insiders, employees and investors. The date, however, is subject to change.

Slack has previously raised a total of $1.2 billion in funding from investors, including Accel, Andreessen Horowitz, Social Capital, SoftBank, Google Ventures and Kleiner Perkins.

Lyft lost $1.14B in Q1 2019 on $776M in revenue

Some reassuring data for those worried unicorns are wrecking the Bay Area

Published April 27, 2019

Joanna Glasner
Contributor

Headquarters ≠ headcount

Just because a company is based in Northern California doesn’t mean most workers are there also. Headquarters, our survey shows, does not always translate into headcount.

“Headquarters location can often be the wrong benchmark to use to identify where employees are located,” said Steve Cadigan, founder of Cadigan Talent Ventures, a Silicon Valley-based talent consultancy. That’s particularly the case for large tech companies.

Among the largest technology employers in Northern California, Crunchbase News found most have fewer than 25 percent of their full-time employees working in the city where they’re headquartered. We lay out the details for 10 of the most valuable regional tech companies in the chart below.

With the exception of Intel, all of these companies have a double-digit percentage of employees at headquarters, so it’s not as if they’re leaving town. However, if you’re a new hire at Silicon Valley’s most valuable companies, it appears chances are greater that you’ll be based outside of headquarters.

Tesla, meanwhile, is somewhat of a unique case. The company is based in Palo Alto, but doesn’t crack the city’s list of top 10 employers. In nearby Fremont, Calif., however, Tesla is the largest city employer, with roughly 10,000 reportedly working at its auto plant there.(Tesla has about 49,000 employees globally.)

Unicorns flock to San Fran, workers less so

High-valuation private and recently public tech companies can also be pretty dispersed.

Although they tend to have a larger percentage of employees at headquarters than more-established technology giants, the unicorn crowd does like to spread its wings.

Take Uber, the poster child for this trend. Although based in San Francisco, the ride-hailing giant has fewer than one-fourth of its employees there. Out of a global workforce of around 22,300, only about 5,000 are SF-based.

It’s unclear if that kind of breakdown is typical. We had trouble assembling similar geographic employee counts at other Bay Area unicorns, mainly because cities break out numbers only for their 10 largest employers. The lion’s share of regional unicorns are San Francisco-based, and of them only Uber made the Top 10.

That said, there is another, rougher methodology for assessing who works at headquarters: job postings. At a number of the most valuable Bay Area-based unicorns — including Airbnb, Juul, Lime, Instacart, Stripe and the now-public Lyft — a high number of open positions are far from the home office. And as we wrote last year, private companies have been actively seeking out cities to set up secondary hubs.

Even for earlier-stage startups, it’s not uncommon to set up headquarters in the San Francisco area for access to financing and networking, while doing the bulk of hiring in another location, Cadigan said. The evolution of collaborative work tools has also enabled more companies to add staff working remotely or in secondary offices.

Plus, of course, unicorn startups tend to be national or global in focus, and that necessitates hiring where their customers are located.

Take our jobs, please

As we wrap up, it’s worth bringing up how unusual it once was for denizens of a metro area to oppose a big influx of high-skill jobs. In the past couple of years, however, these attitudes have become more common. Witness Queens residents’ mixed reactions to Amazon’s HQ2 plans. And in San Francisco, a potential surge of newly minted IPO millionaires is causing some consternation among locals, along with jubilation among the realtor crowd.

Just as college towns retain room for new students by graduating older ones, however, it seems reasonable that sustaining Northern California’s strength as a startup hub requires locating jobs out-of-area as companies scale. That could be good news for other cities, including Austin, Phoenix, Nashville, Portland and others, which have emerged as popular secondary locations for fast-growing unicorns.

That said, we’re not predicting near-term contraction in Bay Area tech employment, particularly of the startup variety. The region’s massive entrepreneurial and venture ecosystem keeps on producing valuable newcomers well-capitalized to keep hiring.

Methodology

We looked only at employment at company headquarters (except for Apple) . Companies on the list may have additional employees based in other Northern California cities. For Apple, we included all Silicon Valley employees, per estimates by the Silicon Valley Business Journal.

Numbers are rounded to the nearest hundred for the largest employers. Most of the data is for full-time employees only. Large tech employers hire predominantly full-time for staff positions, so part-time, whether included or not, is expected to reflect only a very small percentage of employment.

Cities list their 10 largest employers in annual reports. We used either the annual reports themselves or data excerpted in Wikipedia, using calendar year 2017 or 2018.

Pinterest employee #1 launches blockchain art market MakersPlace

Published April 24, 2019

Pinterest is a great place to find digital art but a terrible place to sell it. The fact that anything online is infinitely copyable makes it tough for artists to establish a sense of scarcity necessary for their work to be perceived as valuable. Yash Nelapati saw this struggle up close as Pinterest’s first employee. Now he has started MakersPlace, where creators can generate a blockchain fingerprint for each of their artworks that proves who made it and lets it be sold as part of a limited edition.

Similar to Etsy, MakersPlace allows artists to sell their creations while the startup takes a 15 percent cut. Collectors receive a non-fungible cryptocurrency token connoting ownership of a limited-edition digital print of the artwork that they can store in their own crypto wallet or in one on MakersPlace. The MakersPlace site officially launches today after a year of beta testing.

“At Pinterest, we noticed that there are millions of digital creators that are spending countless hours creating digital artwork, but they struggle with basic things like attribution,” says MakersPlace co-founder Dannie Chu, who spent six years leading growth engineering at Pinterest. “Their work is getting printed, copied, shared and ultimately they make very little money from it being put online. If you can’t create a sustainable model for digital creators to create, you’re not going to have art.”

If software is eating art, Uncork Capital wants a seat at the dinner table. It has led a $2 million seed round for MakersPlace, joined by Draper Dragon Fund and Abstract Ventures, plus angels from Pinterest, Facebook, Zillow and Coinbase. They see the crypto-tokenized digital photo of a rose that sold for $1 million last year as just the start of a thriving blockchain art market. “That was a light-bulb moment for us. People are actually valuing digital creations like physical creations,” says Chu.

Hiscox estimates there were $4.64 billion in online art sales (though mostly of traditional offline art) in 2018, compared to Art Basel‘s estimate of $67.4 billion in total art sales for the year. MakersPlace could be well-positioned as more art is sold online and more of it becomes truly digital. “MakersPlace has already partnered with thousands of incredible digital artists selling their unique artwork, a testament to the easy-to-use platform they’ve built,” said Uncork Managing Partner Jeff Clavier. “They’ve also created a seamless and fun, one-stop-shop for discovering and collecting digital artwork.”

The startup’s technology is designed so artists fingerprinting their work don’t need extensive blockchain experience. They just upload it to MakersPlace before sharing it elsewhere, verify their identity through an integration with Civic where they take a photo holding their driver’s license, and an Ethereum-based token is generated with the creator’s name, the art’s name, its impression and edition number and the date. An Ethereum token name, ID, contract ID and creator’s ID are all assigned so there’s a permanent record of authorship.

Art collectors can browse MakersPlace’s categories for animation, photography, drawings, pixel art and 3D creations; explore recent and popular uploads; or search by specific artist or art piece. They can buy art with a credit card or with Ether; use, display or distribute it for non-commercial purchases; or resell it on the secondary market. MakersPlace assumes no ownership of the art it hosts.

One major concern is that artists unaware of MakersPlace might have their works fraudulently fingerprinted and attributed to a thief. Chu says that “We use a mix of website, email and identity verification services to do this (we use civic.com). This is a strong deterrent to uploading and establishing attribution for stolen digital creations.” But you could still imagine the headache for less-tech-savvy artists if their creative identity gets hijacked.

There’s plenty of other blockchain entrants into the art world, from Blockchain Art Collective‘s NFC stickers for registering physical art to artist tipping platform ArtByte. Many startups are trying to solve the art attribution problem, including Monegraph, KnownOrigin, Bitmark, CodexProtocol, Artory and more. MakersPlace will have to hope its talent, Silicon Valley funding and focus on digital works will differentiate it from the pack.

As we move to a culture where so many of the things that represent our identity, from photographs to music, have become endlessly replicable, the concept of possession has lost its meaning. Yet we’re still hoarders deep down, scared of not having enough. “Collecting is an innate human behavior, but as people become more urban, mobile and minimalist, physical keepsakes have become less appealing,” Nelapati concludes. “Our mission is to create a platform that incentivizes creators by giving them ownership over the work they produce.”

[Featured Image: bunny style by Chocotoy]

Startups Weekly: Zoom CEO says its stock price is ‘too high’

Published April 20, 2019

When Zoom hit the public markets Thursday, its IPO pop, a whopping 81 percent, floored everyone, including its own chief executive officer, Eric Yuan.

Yuan became a billionaire this week when his video conferencing business went public. He told Bloomberg that he actually wished his stock hadn’t soared quite so high. I’m guessing his modesty and laser focus attracted Wall Street to his stock; well, that, and the fact that his business is actually profitable. He is, this week proved, not your average tech CEO.

I chatted with him briefly on listing day. Here’s what he had to say.

“I think the future is so bright and the stock price will follow our execution. Our philosophy remains the same even now that we’ve become a public company. The philosophy, first of all, is you have to focus on execution, but how do you do that? For me as a CEO, my number one role is to make sure Zoom customers are happy. Our market is growing and if our customers are happy they are going to pay for our service. I don’t think anything will change after the IPO. We will probably have a much better brand because we are a public company now, it’s a new milestone.”

“The dream is coming true,” he added.

For the most part, it sounded like Yuan just wants to get back to work.

Want more TechCrunch newsletters? Sign up here. Otherwise, on to other news…

IPO corner

You thought I was done with IPO talk? No, definitely not:

Pinterest completed its IPO this week too! Here’s the TLDR: Pinterest popped 25 percent on its debut Thursday and is currently trading up 28 percent. Not bad, Pinterest, not bad.
Fastly, a startup I’d admittedly never heard of until this week, filed its S-1 and displayed a nice path to profitability. That means the parade of tech IPOs is far from over.
Uber… Surprisingly, no Uber IPO news this week. Sit tight, more is surely coming.

$1B for self-driving cars

While I’m on the subject of Uber, the company’s autonomous vehicles unit did, in fact, raise $1 billion, a piece of news that had been previously reported but was confirmed this week. With funding from Toyota, Denso and SoftBank’s Vision Fund, Uber will spin-out its self-driving car unit, called Uber’s Advanced Technologies Group. The deal values ATG at $7.25 billion.

Robots!

The TechCrunch staff traveled to Berkeley this week for a day-long conference on robotics and artificial intelligence. The highlight? Boston Dynamics CEO Marc Raibert debuted the production version of their buzzworthy electric robot. As we noted last year, the company plans to produce around 100 models of the robot in 2019. Raibert said the company is aiming to start production in July or August. There are robots coming off the assembly line now, but they are betas being used for testing, and the company is still doing redesigns. Pricing details will be announced this summer.

#TCRobotics pic.twitter.com/Vf4kUWH0fR

— Lucas Matney (@lucasmtny) April 19, 2019

Digital health investment is down

Despite notable rounds for digital health businesses like Ro, known for its direct-to-consumer erectile dysfunction medications, investment in the digital health space is actually down, reports TechCrunch’s Jonathan Shieber. Venture investors, private equity and corporations funneled $2 billion into digital health startups in the first quarter of 2019, down 19 percent from the nearly $2.5 billion invested a year ago. There were also 38 fewer deals done in the first quarter this year than last year, when investors backed 187 early-stage digital health companies, according to data from Mercom Capital Group.

Startup capital

Byton loses co-founder and former CEO, reported $500M Series C to close this summer
Lyric raises $160M from VCs, Airbnb
Brex, the credit card for startups, raises $100M debt round
Ro, a D2C online pharmacy, reaches $500M valuation
Logistics startup Zencargo gets $20M to take on the business of freight forwarding
Co-Star raises $5M to bring its astrology app to Android
Y Combinator grad Fuzzbuzz lands $2.7M seed round to deliver fuzzing as a service

Extra Crunch

Hundreds of billions of dollars in venture capital went into tech startups last year, topping off huge growth this decade. VCs are reviewing more pitch decks than ever, as more people build companies and try to get a slice of the funding opportunities. So how do you do that in such a competitive landscape? Storytelling. Read contributor’s Russ Heddleston’s latest for Extra Crunch: Data tells us that investors love a good story.

Plus: The different playbook of D2C brands

And finally, for the first of a new series on VC-backed exits aptly called The Exit. TechCrunch’s Lucas Matney spoke to Bessemer Venture Partners’ Adam Fisher about Dynamic Yield’s $300M exit to McDonald’s.

#Equitypod

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I chat about rounds for Brex, Ro and Kindbody, plus special guest Danny Crichton joined us to discuss the latest in the chip and sensor world.

Fastly, the content delivery network, files for an IPO

Published April 19, 2019

Fastly, the content delivery network that’s raised $219 million in financing from investors (according to Crunchbase), is ready for its close up in the public markets.

The eight-year-old company is one of several businesses that improve the download time and delivery of different websites to internet browsers and it has just filed for an IPO.

Media companies like The New York Times use Fastly to cache their homepages, media and articles on Fastly’s servers so that when somebody wants to browse the Times online, Fastly’s servers can send it directly to the browser. In some cases, Fastly serves up to 90 percent of browser requests.

E-commerce companies like Stripe and Ticketmaster are also big users of the service. They appreciate Fastly because its network of servers enable faster load times — sometimes as quickly as 20 or 30 milliseconds, according to the company.

The company raised its last round of financing roughly nine months ago, a $40 million investment that Fastly said would be the last before a public offering.

Fastly raises another $40 million before an IPO

True to its word, the company is hoping public markets have the appetite to feast on yet another “unicorn” business.

While Fastly lacks the sizzle of companies like Zoom, Pinterest or Lyft, its technology enables a huge portion of the activities in which consumers engage online, and it could be a bellwether for competitors like Cloudflare, which recently raised $150 million and was also exploring a public listing.

The company’s public filing has a placeholder amount of $100 million, but given the amount of funding the company has received, it’s far more likely to seek closer to $1 billion when it finally prices its shares.

Fastly reported revenue of roughly $145 million in 2018, compared to $105 million in 2017, and its losses declined year on year to $29 million, down from $31 million in the year-ago period. So its losses are shrinking, its revenue is growing (albeit slowly) and its cost of revenues are rising from $46 million to around $65 million over the same period.

That’s not a great number for the company, but it’s offset by the amount of money that the company’s getting from its customers. Fastly breaks out that number in its dollar-based net expansion rate figure, which grew 132 percent in 2018.

It’s an encouraging number, but as the company notes in its prospectus, it’s got an increasing number of challenges from new and legacy vendors in the content delivery network space.

The market for cloud computing platforms, particularly enterprise-grade products, “is highly fragmented, competitive and constantly evolving,” the company said in its prospectus. “With the introduction of new technologies and market entrants, we expect that the competitive environment in which we compete will remain intense going forward. Legacy CDNs, such as Akamai, Limelight, EdgeCast (part of Verizon Digital Media), Level3, and Imperva, and small business-focused CDNs, such as Cloudflare, InStart, StackPath, and Section.io, offer products that compete with ours. We also compete with cloud providers who are starting to offer compute functionality at the edge like Amazon’s CloudFront, AWS Lambda, and Google Cloud Platform.”

How do you hire a great growth marketer?

Published April 19, 2019

Julian Shapiro
Contributor

Julian Shapiro is the founder of BellCurve.com, a growth marketing agency that trains you to become a marketing professional. He also writes at Julian.com.

Great marketers are often founders

One interesting way to find great marketers is to look for great potential founders.

Let me explain. Privately, most great marketers admit that their motive for getting hired was to gain a couple years’ experience they could use to start their own company.

Don’t let that scare you. Leverage it: You can sidestep the competitive landscape for marketing talent by recruiting past founders whose startups have recently failed.

Why do this? Because great founders and great growth marketers are often one and the same. They’re multi-disciplinary executors, they take ownership and they’re passionate about product.

You see, a marketing role with sufficient autonomy mimics the role of a founder: In both, you hustle to acquire users and optimize your product to retain them. You’re working across growth, brand, product and data.

As a result, struggling founders wanting a break from the startup roller coaster often find transitioning to a growth marketing role to be a natural segue.

How do we find these high-potential candidates?

Finding founders

To find past founders, you could theoretically monitor the alumni lists of incubators like Y Combinator and Techstars to see which companies never succeeded. Then you can reach out to their first-time founders.

You can also identify future founders: Browse Product Hunt and Indie Hackers for old projects that showed great marketing skill but didn’t succeed.

There are thousands of promising founders who’ve left a mark on the web. Their failure is not necessarily indicative of incompetence. My agency’s co-founders and directors, including myself, all failed at founding past companies.

How do I attract candidates?

To get potential founders interested in the day-to-day of your marketing role, offer them both breadth and autonomy:

Let them be involved in many things.
Let them be fully in charge of a few things.

Remember, recreate the experience of being a founder.

Further, vet their enthusiasm for your product, market and its product-channel fit:

Product and market: Do their interests line up with how your product impacts its users? For example, do they care more about connecting people through social networks, or about solving productivity problems through SaaS? And which does your product line up with?
Product-channel fit: Are they excited to run the acquisition channels that typically succeed in your market?

The latter is a little-understood but critically important requirement: Hire marketers who are interested in the channels your company actually needs.

Let’s illustrate this with a comparison between two hypothetical companies:

A B2B enterprise SaaS app.
An e-commerce company that sells mattresses.

Broadly speaking, the enterprise app will most likely succeed through the following customer acquisition channels: sales, offline networking, Facebook desktop ads and Google Search.

In contrast, the e-commerce company will most likely succeed through Instagram ads, Facebook mobile ads, Pinterest ads and Google Shopping ads.

We can narrow it even further: In practice, most companies only get one or two of their potential channels to work profitably and at scale.

Meaning, most companies have to develop deep expertise in just a couple of channels.

There are enterprise marketers who can run cold outreach campaigns on autopilot. But, many have neither the expertise nor the interest to run, say, Pinterest ads. So if you’ve determined Pinterest is a high-leverage ad channel for your business, you’d be mistaken to assume that an enterprise marketer’s cold outreach skills seamlessly translate to Pinterest ads.

Some channels take a year or longer to master. And mastering one channel doesn’t necessarily make you any better at the next. Pinterest, for example, relies on creative design. Cold email outreach relies on copywriting and account-based marketing.

(How do you identify which ad channels are most likely to work for your company? Read my Extra Crunch article for a breakdown.)

To summarize: To attract the right marketers, identify those who are interested in not only your product but also how your product is sold.

Other approaches

The founder-first approach I’ve shared is just one of many ways my agency recruits great marketers. The point is to remind you that great candidates are sometimes a small career pivot away from being your perfect hire. You don’t have to look in the typical places when your budget is tight and you want to hire someone with high, senior potential.

This is especially relevant for early-stage, bootstrapping startups.

If you have the foresight to recognize these high-potential candidates, you can hopefully hire both better and cheaper. Plus, you empower someone to level up their career.

Speaking of which, here are other ways to hire talent whose potential hasn’t been fully realized:

Find deep specialists (e.g. Facebook Ads experts) and offer them an opportunity to learn complementary skills with a more open-ended, strategic role. (You can help train them with my growth guide.)
Poach experienced junior marketers from a company in your space by offering senior roles.
Hire candidates from top growth marketing schools.

Vetting growth marketers

If you don’t yet have a growth candidate to vet, you can stop reading here. Bookmark this and return when you do!

Now that you have a candidate, how do you assess whether they’re legitimately talented?

At Bell Curve, we ask our most promising leads to incrementally complete three projects:

Create Facebook and Instagram ads to send traffic to our site. This showcases their low-level, tactical skills.
Walk us through a methodology for optimizing our site’s conversion rate. This showcases their process-driven approach to generating growth ideas. Process is everything.
Ideate and prioritize customer acquisition strategies for our company. This showcases their ability to prioritize high-leverage projects and see the big picture.

We allow a week to complete these projects. And we pay them market wage.

Here’s what we’re looking for when we assess their work.

Level 1: Basics

First — putting their work aside — we assess the dynamics of working with them. Are they:

Competent: Can they follow instructions and understand nuance?
Reliable: Will they hit deadlines without excuses?
Communicative: Will they proactively clarify unclear things?
Kind: Do they have social skills?

If they follow our instructions and do a decent job, they’re competent. If they hit our deadline, they’re probably reliable. If they ask good questions, they’re communicative.

And if we like talking to them, they’re kind.

Level 2: Capabilities

A level higher, we use these projects to assess their ability to contribute to the company:

Do they have a process for generating and prioritizing good ideas?
- Did their process result in multiple worthwhile ad and landing page ideas? We’re assessing their process more so than their output. A great process leads to generating quality ideas forever.
- Resources are always limited. One of the most important jobs of a growth marketer is to ensure growth resources are focused on the right opportunities. I’m looking for a candidate that has a process for identifying, evaluating and prioritizing growth opportunities.
Can they execute on those ideas?
- Did they create ads and propose A/B tests thoughtfully? Did they identify the most compelling value propositions, write copy enticingly and target audiences that make sense?
- Have they achieved mastery of 1-2 acquisition channels (ideally, the channels your company is dependent on to scale)? I don’t expect anyone to be an expert in all channels, but deep knowledge of at least a couple of channels is key for an early-stage startup making their first growth hire.

If you don’t have the in-house expertise to assess their growth skills, you can pay an experienced marketer to assess their work. It’ll cost you a couple hundred bucks, and give you peace of mind. Look on Upwork for someone, or ask a marketer at a friend’s company.

Recap

If you’re an early-stage company with a tight budget, there are creative ways to source high-potential growth talent.
Assess that talent on their product fit and market fit for your company. Do they actually want to work on the channels needed for your business to succeed?
Give them a week-long sample project. Assess their ability to generate ideas and prioritize them.

Pinterest prices IPO above range

Published April 18, 2019

Pinterest priced shares of its stock, “PINS,” above its anticipated range on Wednesday evening, CNBC reports. The company will sell 75 million shares of Class A common stock at $19 apiece in an offering that will attract $1.4 billion in new capital for the visual search engine.

The NYSE-listed business had planned to sell its shares at between $15 to $17 and didn’t increase the size of its planned offering prior to Wednesday’s pricing.

Valued at $12.3 billion in 2017, the initial public offering gives Pinterest a fully diluted market cap of $12.6 billion.

The IPO has been a long time coming for the nearly 10-year-old company led by co-founder and chief executive officer Ben Silbermann . Given Wall Street’s lackluster demand for ride-hailing company Lyft, another consumer technology stock that recently made its Nasdaq debut, it’s unclear just how well Pinterest will perform in the days, weeks, months and years to come. Pinterest is unprofitable like its fellow unicorns Lyft and Uber, but its financials, disclosed in its IPO prospectus, illustrate a clear path to profitability. As for Lyft and Uber, Wall Street analysts, among others, still question whether either of the businesses will ever achieve profitability.

Eric Kim of consumer tech investment firm Goodwater Capital says despite the fact that Pinterest and Lyft are very different companies, Lyft’s falling stock has undoubtedly impacted Pinterest’s offering.

“They are so close together, it’s hard for those not to influence one another,” Kim told TechCrunch. “It’s a much different category, but they are still both consumer tech and they will both be trading at a double-digital revenue multiple.

The San Francisco-based company posted revenue of $755.9 million in the year ending December 31, 2018 — 16 times less than its latest decacorn valuation — on losses of $62.9 million. That’s up from $472.8 million in revenue in 2017 on losses of $130 million.

The stock offering represents a big liquidity event for a handful of investors. Pinterest had raised a modest $1.47 billion in equity funding from Bessemer Venture Partners, which holds a 13.1 percent pre-IPO stake, FirstMark Capital (9.8 percent), Andreessen Horowitz (9.6 percent), Fidelity Investments (7.1 percent) and Valiant Capital Partners (6 percent). Bessemer’s stake is worth upwards of $1 billion. FirstMark and a16z’s shares will be worth more than $700 million each.

Zoom — another tech company going public on Thursday that, unlike its peers, is actually profitable — priced its shares on Wednesday too after increasing the price range of its IPO earlier this week. The price values Zoom at roughly $9 billion, nearly surpassing Pinterest, an impressive feat considering Zoom was last valued at $1 billion in 2017 around when Pinterest’s Series H valued it at a whopping $12.3 billion.

Profitability, as it turns out, may mean more to Wall Street than Silicon Valley thinks.

Unpacking Pinterest’s IPO expectations

Zoom, the profitable tech unicorn, prices IPO above range

Published April 17, 2019

Zoom, a relatively under-the-radar tech unicorn, has defied expectations with its initial public offering. The video conferencing business priced its IPO above its planned range on Wednesday, confirming plans to sell shares of its Nasdaq stock, titled “ZM,” at $36 apiece, CNBC reports.

The company initially planned to price its shares at between $28 and $32 per share, but following big demand for a piece of a profitable tech business, Zoom increased expectations, announcing plans to sell shares at between $33 and $35 apiece.

The offering gives Zoom an initial market cap of roughly $9 billion, or nine times that of its most recent private market valuation.

Zoom plans to sell 9,911,434 shares of Class A common stock in the listing, to bring in about $350 million in new capital.

If you haven’t had the chance to dive into Zoom’s IPO prospectus, here’s a quick run-down of its financials:

Zoom raised a total of $145 million from venture capitalists before filing to go public
It posted $330 million in revenue in the year ending January 31, 2019 with a gross profit of $269.5 million
It more than doubled revenues from 2017 to 2018, ending 2017 with $60.8 million in revenue and 2018 with $151.5 million
Its losses have shrunk from $14 million in 2017, $8.2 million in 2018 and just $7.5 million in the year ending January 2019

Zoom is backed by Emergence Capital, which owns a 12.2 percent pre-IPO stake; Sequoia Capital (11.1 percent); Digital Mobile Venture, a fund affiliated with former Zoom board member Samuel Chen (8.5 percent); and Bucantini Enterprises Limited (5.9 percent), a fund owned by Chinese billionaire Li Ka-shing.

Zoom will debut on the Nasdaq the same day Pinterest will go public on the NYSE. Pinterest, for its part, has priced its shares above its planned range, per The Wall Street Journal.

Unpacking Pinterest’s IPO expectations

Startups Weekly: Lessons from a failed founder

Published April 13, 2019

I sat down with Menlo Ventures partner Shawn Carolan this week to talk about his early investment in Uber. Menlo, if you remember, led Uber’s Series B and has made a hefty sum over the year selling shares in the ride-hailing company. I’ll have more on that later; for now, I want to share some of the insights Carolan had on his experience ditching venture capital to become a founder.

Around when Menlo made its first investment in Uber, Carolan began taking a step back from the firm and building Handle, a startup that built tools to help people be more productive. Despite years of hard work, Handle was ultimately a failure. Carolan said he shed a lot of tears over its demise, but used the experience to connect more intimately with founders and to offer them more candid, authentic advice.

“People in the valley are always achievement-oriented; it’s always about the next thing and crushing it and whatever,” Carolan told TechCrunch. “When [Handle] shut down, I had this spreadsheet of all the people who I felt like I disappointed: Seed investors who invested in me, all the people at Menlo and my friends who had tweeted out early stuff. It was a long spreadsheet of like 60 people. And when I started a sabbatical, what I said was I’m going to go connect with everyone and apologize.”

Today, Carolan encourages founders to own their vulnerabilities.

“It’s OK to admit when you’re wrong,” he said. “Now I can see it on [founders’] faces, I can see when they’re scared. And they’re not going to say they’re scared but I know it’s tough. This is one of the toughest things that you’re going to go through. Now I can be there emotionally for these founders and I can say ‘here’s how you do it, here’s how you talk to your team and here’s what you share.’ A lot of founders feel like they have to do this alone and that’s why you have to get comfortable with your vulnerability.”

After Handle shuttered, Carolan returned to Menlo full time and made the firm a boatload of money from Roku’s IPO and now Uber’s. Anyway, thought those were some nice anecdotes that should be shared since most of our feeds are dominated by Silicon Valley hustle porn.

Want more TechCrunch newsletters? Sign up here. Ok, on to other news…

IPO corner

Uber dropped its S-1: We’ve got the basic deets, a rundown on key stakeholders, the company’s plan to help drivers buy stock, a look at all the money it’s has made from global divestitures and a glimpse at the company’s R&D spending for self-driving cars.
Pinterest is an “undercorn”: The visual search engine set its IPO range at $15 to $17 per share earlier this week. That translates to a midrange valuation of $10.64 billion, nearly $2 billion less than the company’s most recent private market valuation of $12.3 billion, hence “undercorn.”
PagerDuty pops: The SaaS business’s shares began trading on the NYSE on Thursday, popping more than 60 percent on their debut.
Jumia makes history: Jumia became the first startup from Africa to list on a major global exchange this week when it debuted its shares on the NYSE under the ticker symbol “JMIA.”
Lyft declines: The Uber competitor finished out the week trading at less than $60 per share, significantly below its initial share price of $74. Ouch.

Funds on funds on funds

There were so many fund announcements this week; here’s a quick list.

Extra Crunch

Lots of great new exclusive content for our Extra Crunch subscribers is on the site, including this deep dive into the challenges of transportation startup profits. Plus: When to ditch a nightmare customer, before they kill your startup; The right way to do AI in security; and The definitive Niantic reading guide.

Lawsuits

Sinema, that one MoviePass competitor, has run into its fair share of bumps in the road. TechCrunch’s Brian Heater hopped on the phone with the startup’s CEO this week to learn more about those bumps, why its terminating accounts en masse, a class-action lawsuit its battling and more.

Photo by Stephen McCarthy / RISE via Sportsfile

Startup capital

Battlefield!

TechCrunch’s Startup Battlefield brings the world’s top early-stage startups together on one stage to compete for non-dilutive prize money, and the attention of media and investors worldwide. Here’s a quick update on some of our BF winners and finalists:

#Equitypod

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm, myself and Phil Libin, the founder of Evernote and AllTurtles, chat about the importance of IPOs. Plus, in a special Equity Shot, Alex and I unpack the Uber S-1.