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Quizlet plans for IPO over a year after hitting unicorn status
Quizlet, a flashcard tool turned artificial intelligence-powered tutoring platform, is planning an initial public offering nearly a year after it was valued at $1 billion. According to people familiar with the matter, Quizlet is considerably far along in the process to go public. A recent job filing shows that it is hiring for senior roles to “help build the financial systems and processes as we move towards an IPO.”
In an email to TechCrunch, the San Francisco-based edtech startup declined to comment. Quizlet hasn’t said much about its revenue specifics or if it’s profitable. Last year, the still-private startup claimed it was growing revenue 100% annually. On its website, Quizlet says that it has 60 million monthly learners, up 10 million learners compared to its 2018 totals.
Quizlet has built a large-scale business around simple to share and simple to use products. Its free flashcard maker helps students spin up study guides on topics to prepare for exams. Those insights fuel Quizlet Plus, the startup’s subscription product that charges $47.88 a year for access to more features, including tutoring services.
Quizlet’s tutoring arm, also known as Quizlet Learn, is the company’s most popular offering, per CEO Matthew Glotzbach. As a student goes through the system, Quizlet Learn consistently assesses students to see where they are making mistakes — and where they are making progress.
“It obviously doesn’t yet replace and can’t come anywhere close to replacing a human, but it can provide that guidance and point you in the right direction and help you spend your time in the right places,” he said. “Just even helping you set goals is such a critical step in learning.”
Most recently, Quizlet announced the launch of explanations, a feature that offers a step-by-step solution guide for problem sets from popular textbooks. The feature is “written and verified by experts” and is aimed to help “students better understand the reasoning and thought process behind study questions so they can practice and apply their learnings on their own,” it said in a statement. It also reclaimed the Q from its less fortunate predecessor, amid an entire rebrand.
Quizlet’s quiet march toward the public markets has been slow yet steady. The startup was founded in 2005 by a 15-year-old, Andrew Sutherland. It was fully bootstrapped until 2015. Glotzbach, who was previously an executive at YouTube, then joined in 2016. The startup still doesn’t appear to have a CFO, which is rare for companies that are going public.
Quizlet has raised a majority of its $62 million in venture capital under Glotzbach. Now, investors in the company include General Atlantic, Owl Ventures, Union Square Ventures, Costanoa Ventures and Altos Ventures.
Quizlet’s pursuit of the public markets comes as other edtech companies are proving the market’s reception to the sector. Duolingo, for example, is another consumer-focused education company, albeit one that focuses on one vertical versus Quizlet’s choice to stay broad. Duolingo went public in July, and is currently trading above its open price at $169.75 per share.
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Coinbase sets direct listing reference price at $250/share, valuing the company at as much as $65B
Coinbase, the American cryptocurrency trading giant, has set a reference price for its direct listing at $250 per share. According to the company’s most recent SEC filing, it has a fully diluted share count of 261.3 million, giving the company a valuation of $65.3 billion. Using a simple share count of 196,760,122 provided in its most recent S-1/A filing, Coinbase would be worth a slimmer $49.2 billion.
Regardless of which share count is used to calculate the company’s valuation, its new worth is miles above its final private price set in 2018 when the company was worth $8 billion.
Immediate chatter following the company’s direct listing reference price was that the price could be low. While Coinbase will not suffer usual venture capital censure if its shares quickly appreciate as it is not selling stock in its flotation, it would still be slightly humorous if its set reference price was merely a reference to an overly conservative estimate of its worth.
Its private backers are in for a bonanza either way. Around four years ago in 2017 Coinbase was worth just $1.6 billion, according to Crunchbase data. For investors in that round, let alone its earlier fundraises, the valuation implied by a $250 per-share price represents a multiple of around 40x from the price that they paid.
The Coinbase direct listing was turbocharged recently when the company provided a first-look at its Q1 2021 performance. As TechCrunch reported at the time, the company’s recent growth was impressive, with revenue scaling from $585.1 million in Q4 2020, to $1.8 billion in the first three months of this year. The new numbers set an already-hot company’s public debut on fire.
Place your bets now concerning where Coinbase might open, and how high its value may rise. It’s going to be quite the show.
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Robinhood files confidentially to go public
Today Bloomberg reported, and Axios confirmed that Robinhood has filed privately to go public. The well-financed Robinhood is an American fintech company that provides zero-cost trading services to consumers.
Private IPO filings have become common in recent quarters, making Robinhood’s decision to file behind closed doors before showing its numbers to the public unsurprising. That it has filed privately, however, implies that the company is closer to a public debut than we might have anticipated.
Robinhood has long been expected to have a 2021 IPO in its plans. The company has not yet responded to an inquiry from TechCrunch regarding the news of its private IPO filing.
There are several reasons why Robinhood may be interested in a near-term public debut, despite running into controversies in recent quarters. No amount of time in front of Congress, bad PR from a user’s suicide, or settlements with the SEC can change the fact that today’s stock market favors growth, something that the company has in spades. Or that recent IPOs have been rapturously received by public investors as a cohort; it’s a warm time to pursue public-market liquidity.
The company’s revenue expanded greatly in 2020, something that TechCrunch has covered through the lens of Robinhood’s payment for order flow, or PFOF income. The company told Congress that the particular revenue source was the majority of its top line, meaning that PFOF growth is a reasonable comp for the company’s aggregate growth. And as TechCrunch has reported, those numbers rose sharply in 2020, from around ~$91 million in Q1 2020, to ~$178 million in Q2 2020, and ~$183 million and ~$221 million in the third and fourth quarter of last year.
Robinhood also makes money from consumer subscriptions, and other sources.
The fact that Robinhood has filed privately implies that it will go public sometimes soon, though perhaps not quickly enough to get around providing Q1 2021 numbers. More when we get our hands on the filing.
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As expected, stock trading service Public raises $220M at unicorn valuation
The day before Robinhood goes under the the Congressional hammer, domestic rival Public.com announced this morning that it has closed a $220 million funding round at a $1.2 billion valuation. News of the round was first broken by TechCrunch. Further reporting colored in the lines concerning the investment’s size and valuation range.
Confirming the funding news today, Public added a fresh metric to the mix, namely that it has reached one million members – over the course of just 18 months post-launch, the company was quick to point out.
That means that Public’s backers – its latest round was put together by prior investors, including Greycroft, Accel, Tiger Global, Inspired Capital and others – values the company at around $1,200 per current “member.” Whether or not that feels rich, we leave to you to decide.
But with rising interest in the savings and investing space – some data here — and Robinhood’s revenues growing to a run rate of more than $800 million in Q4 2020 and looking even better at the start of 2021, it’s not hard to see why investors are backing Public. It’s even easier if you believe that Robinhood’s brand has undergone material harm from its woes during the GameStop saga.
The pair, along with a host of other fintech services that offer savings and investing products, have been buoyed by a secular shift in banking away from the physical world (in-person shopping, bank branches, plastic cards) to the digital (neo-banks, ecommerce, virtual cards). Robinhood shook up the trading world with zero-cost investing, fitting neatly into the mobile and virtual banking future that is being built. And Public has taken that model a step further by dropping payment for order flow (PFOF), a method revenue generation in which companies like Robinhood get a small fee for sending their users’ trades to one particular market maker or another.
TechCrunch recently joked that it seems like “there is infinite money for stock-trading startups,” in light of the anticipated Public round, which has now has arrived. Let’s see who is next to take home a big check.
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