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While consumer tech has matured as a startup category in recent years, many investors continue to be bullish on specific trends like online gaming, voice, and the unbundling of platforms in favor of focused social networks. That’s the key takeaway from a survey that Josh Constine and Arman Tabatabai did this week with 16 of the most active investors in key social product categories over on Extra Crunch. Here’s an excerpt of the responses, from Olivia Moore and Justine Moore of CRV:

• “Unbundling of YouTube.” You can build a big company by targeting a vertical within YouTube with a product that has better features and more opportunities for creator monetization. Twitch is a great example of this! We’re also watching early-stage companies like Supergreat (in beauty) and Tingles (ASMR).

• Voice as a social medium. Voice continues to pick up steam as a broadcast medium via podcasting, but we haven’t seen a lot in social or P2P voice yet. We think a successful platform will leverage the fact that voice content can be created and consumed while doing other things. We’re big fans of companies like TTYL and Drivetime that are making strides here!

• Flexible digital identities. Gen Zers are online constantly but have different preferences across platforms/friend groups about how they want to “show up” digitally. The rise of “Finsta” accounts is one good example of this. Companies like Facemoji already help users create social content using a curated digital avatar — we’re excited to see what else founders build here!

• Synchronous, shared mobile experiences. We’re bullish on apps that connect users in real time to have a shared social experience. Most apps now are “single-player,” which creates scroll fatigue. HQ Trivia was an early example more on the entertainment side, while companies like Squad help users browse the internet and watch TikTok together.

Other respondees include: Connie Chan (Andreessen Horowitz). Alexis Ohanian (Initialized Capital), Niko Bonatsos (General Catalyst), Josh Coyne (Kleiner Perkins), Wayne Hu (Signal Fire), Alexia Bonatsos (Dream Machine), Josh Elman (angel investor), Aydin Senkut (Felicis Ventures), James Currier (NFX), Pippa Lamb (Sweet Capital), Christian Dorffer (Sweet Capital), Jim Scheinman (Maven Ventures), Eva Casanova (Day One Ventures) and Dan Ciporin (Canaan).

EC subscribers please note: a second part of this survey will be running this coming week, focused specifically on social investing in the COVID-19 era.

Are VCs investing — or maintaining?

Speaking of financing, who is actually writing checks right at this moment in time?

“I’ve seen a lot of VCs talking about being open for business,” Eniac Ventures founding partner Hadley Harris proclaimed on a fundraising-trend panel this week, “and I’ve been pretty outspoken on Twitter that I think that’s largely bullshit and sends the wrong message to entrepreneurs.” Instead, as Connie Loizos covered for us on TechCrunch, he said he didn’t have time to talk to more founders because he was so busy helping existing portfolio companies.

Not every investor agrees with that viewpoint —  VC Twitter features many an anecdote about fresh companies getting funding. 

Let’s just hope that both things are true, because it is already rough out there. 

Does your startup qualify for a PPP loan? (And should you apply?)

Two debates have been raging around government support for startups. First, the big, messy new Paycheck Protection Program — designed to cover expenses for small businesses — does seem to be somewhat available to startups, based on revisions published by the Small Business Administration late last week. But things get complicated quick depending on your fundraising and cap table, as Jon Shieber covered last weekend for TechCrunch. Venture firms typically have controlling interests in a portfolio of companies that total more than 500 people, so if such a firm also has a controlling interest in your startup, you may not be eligible. Even if the VC stake is under 50%, preferred terms that came with the fundraising may your application afoul of the rules.

To help founders work through their own situations faster, startup lawyer William Carleton wrote a quick guide for Extra Crunch. Here’s where he says you need to start:

Do you have a minority investor which controls protective covenants in your charter, or which controls a board seat afforded certain veto rights on board decisions? If the answer to either fork of that question is “yes,” you almost certainly have confirmed that you will need to amend your charter and/or other governing documents before proceeding with a PPP application.

The other aspect, of course, is whether startups should be applying for this in the first place. Congress broadly intended the money to go towards small to medium sized businesses, most of whom would never be considered for venture. Shieber’s article is full of comments on that topic, if you feel like weighing in….

The commercial real estate comeuppance

If you’re like me, and you’ve started companies in the Bay Area and struggled to find office space you could afford, enjoy this bit of schadenfraude as you plot your remote-first future. Because the commercial real estate industry is facing an existential crisis after many, many years of rent-seeking upon the Silicon Valley tech economy (and everyone else).

Connie explored this exploding topic with a range of startups, investors and CRE agents in a big feature for TechCrunch this week. One analyst “expects the market to come down by ‘at least 10% and probably 20% to 30%’ from where commercial space in San Francisco has priced in several years, which is $88 per square foot, according to CBRE. Driving the expected drop is the 2 million square feet that will come onto the market in the city as soon as it’s possible — space that companies want to get off their books.”

It’s quite possible to imagine even bigger declines, given the broader hits that most any possible tenant is also taking to their budgets. Who knows, maybe this whole process will even help make the Bay Area and other wealthy metros a little more affordable again.

Edtech gets hot again, according to investors

After lots of money and lots of struggle over the past decade, edtech is suddenly hot again thanks to the pandemic. Natasha Mascaranhas has been covering the trend recently, and dug in this week with a big investor survey on the category for Extra Crunch.

“One investor pivoted from spending a third of their time looking at edtech companies to devoting almost all their time to the sector,” she tells me. “Another, who has been bullish for years on edtech, says its business as usual for them, but that competition may arise. An ed-tech focused fund thinks the sector has been underfunded for a while, so the moment of reckoning has begun.”

Respondents include:

• Jenny Lee, GGV
• Tetyana Astashkina, LearnLaunch
• Jean Hammond, LearnLaunch
• Marlon Nichols, MaC Venture Capital
• Mercedes Bent, Lightspeed Venture Partners
• Jennifer Carolan, Reach Capital
• Shauntel Garvey, Reach Capital
• Jan Lynn-Matern, Emerge Education
• Lesa Mitchell, Techstars
• Tory Patterson, Owl Ventures
• Ian Chiu, Owl Ventures 
• Tony Wang, 500 Startups

Across the week:

TechCrunch

Economists haven’t thrown out the models yet (but they will)

Five CEOs on their evolution in the femtech space

Equity Monday: Hunting for green shoots amid the startup data

Extra Crunch

How SaaS startups should plan for a turbulent Q2

Fintech’s uneven new reality has helped some startups, harmed others

Fast-changing regulations give virtual care startups a chance to seize the moment

Twilio CEO Jeff Lawson on shifting a 3,000-person company to fully remote

Amid unicorn layoffs, Boston startups reflect on the future

#EquityPod

From Alex:

We started with a look at Clearbanc  and its runway extension not-a-loan program, which may help startups survive that are running low on cash. Natasha covered it for TechCrunch. Most of us know about Clearbanc’s revenue-based financing model; this is a twist. But it’s good to see companies work to adapt their products to help other startups survive.

Next we chatted about a few rounds that Danny covered, namely Sila’s $7.7 million investment to help build technology that could take on the venerable and vulnerable ACH, and Cadence’s $4 million raise to help with securitization. Even better, per Danny, they are both blockchain-using companies. And they are useful! Blockchain, while you were looking elsewhere, has done some cool stuff at last.

Sticking to our fintech theme — the show wound up being super fintech-heavy, which was an accident — we turned to SoFi’s huge $1.2 billion deal to buy Galileo, a Utah-based payments company that helps power a big piece of UK-based fintech. SoFi is going into the B2B fintech world after first attacking the B2C realm; we reckon that if it can pull the move off, other financial technology companies might follow suit.

Tidying up all the fintech stories is this round up from Natasha and Alex, working to figure out who in fintech is doing poorly, who’s hiding for now, and who is crushing it in the new economic reality.

Next we touched on layoffs generally, layoffs at Toast, AngelList, and not LinkedIn — for now. Per their plans to not have plans to have layoffs. You figure that out.

And then at the end, we capped with good news from Thrive and Index. We didn’t get to Shippo, sadly. Next time!

Listen to the full thing here!

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How well do Robinhood’s financials stack up against incumbent online brokerages? While we wait for the seven-year-old company’s long-planned IPO, Alex Wilhelm examined Morgan Stanley’s big $13 billion purchase of E-Trade for fresh data comparison points. Robinhood has 10 million accounts — twice what E-Trade has — but it also appears to make much less money per user and has far fewer assets under management, as he covered for Extra Crunch. So while its fee-free approach has destroyed a key revenue stream for competitors, it still has to grow its own “order-flow” business into its private-market valuation.

One solution is to make the platform stickier via social features. On the same day as the E-Trade deal announcement, Robinhood launched a new Profiles feature to encourage users to share stock tips. Josh Constine explored the offering and where it is headed on TechCrunch, concluding that “Profiles and lists, and then eventually more social features, could get Robinhood’s users trading more so there’s more order flow to sell and more reason for them to buy subscriptions.”

Alex also took a look at a new report on fintech funding, which found last year was a peak overall — but skewed towards later-stage companies. Certainly, the wealth management segment is looking mature.

But the category is massive, with many more incumbents left to disrupt. What are fintech investors looking for? Check out our popular investor survey on this topic from November.

How your startup can use TikTok for growth

Fifth Wall’s Brendan Wallace: the proptech sector is hot despite WeWork

“Our mandate is any technology that can be strategic to the real estate industry,” the prolific investor told Connie Loizos in an extended interview for Extra Crunch this week. While WeWork may have depressed some investor interest, plenty of models are working great across various segments — so he and his partners are raising more funds. One of the hottest sectors, perhaps surprisingly, is in sustainable buildings. As Wallace details, public pressure, large-tenant pressure, large-investor pressure and new metro requirements have removed any choice that the industry has in the matter:

Make no mistake; we are front-and-center to what is happening in the real estate industry and the collision with technology, and this is the single-most-important thing that has happened to the real estate industry in the last five decades. The real estate industry is going to have to go carbon-neutral and that is brand-new.

Is this sector also your focus? Be sure to check out our survey of investors in construction robotics from last week to find out some of the latest opportunities, plus our overview survey of real estate and prop tech investors from November.

The future of manufacturing and warehouse robotics

Ahead of our big robotics conference at UC Berkeley in early March, we have been producing a whole series of surveys on robotics verticals. This week, our resident financial analyst Arman Tabatabai teamed up with our hardware editor turned conference organizer, Brian Heater, to do a series of interviews with VCs who are focused on warehouse and manufacturing robotics. Investors include:

• Rohit Sharma, True Ventures
• Ajay Agarwal, Bain Capital Ventures
• Rick Prostko, Comcast Ventures
• Fatima Husain, Comcast Ventures
• Shahin Farshchi, Lux Capital
• Cyril Ebersweiler, SOSV & HAX
• Kelly Coyne, Grit Ventures

Read more here.

Tell TechCrunch about gaming startups and remote work

Our media columnist Eric Peckham wants to feature your advice in two upcoming articles. If you have relevant expertise, click the links below and share your opinions.

• What are the best cities for gaming startups and how should gaming entrepreneurs compare which city is right for them?
• Have you helped lead a startup whose team is split 8-10 time zones apart between offices in Europe/Israel and the West Coast of the US? What tips do you have for others navigating this challenge?

Across the week

Do AI startups have worse economics than SaaS shops? (EC)

Elon Musk says all advanced AI development should be regulated, including at Tesla (TC)

SpaceX alumni are helping build LA’s startup ecosystem (EC)

Dear Sophie: I need the latest details on the new H-1B registration process (TC)

Tracking China’s astounding venture capital slowdown (EC)

The rise of the winged pink unicorn (TC)

Voodoo Games thrives by upending conventional product design (EC)

Ex-YC partner Daniel Gross rethinks the accelerator (TC)

How companies are working around Apple’s ban on vaping apps (EC)

Rippling starts billboard battle with Gusto (TC)

#Equitypod

This week was a fun combination of early-stage and late-stage news, with companies as young as seed stage and as old as PE-worthy joining our list of topics.

Danny and Alex were back on hand to chat once again. Just in case you missed it, they had some fun talking Tesla yesterday, and there are new Equity videos on YouTube. Enjoy!

This week the team argued about org-chart companies, debt raises, some of the items mentioned above, and much more. Details here.

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Maybe ‘tech-enabled’ is good enough for public markets?

Everybody’s talking about revenues after WeWork, but maybe you still don’t need to have all the right numbers in place to achieve a strong IPO? That’s the initial takeaway Alex Wilhelm has after One Medical’s successful debut this week. One might think it looks like a tech-enabled unicorn, that doesn’t generate the recurring revenue and margins of a true tech-powered business.

But, the doctor-services provider closed up almost 40% on a somewhat ambitious price of $14 per share. It had raised $532.1 million during its time as a private company, with a fairly recent valuation of $1.71 billion. With its closing value of $19.50 per share today, One Medical is now worth $2.38 billion.

That’s despite gross margins under the 50% mark, deeply minority recurring revenue and 30% revenue growth in 2019 at best, as Alex noted on Extra Crunch Friday. It is now worth about 8.5x its trailing revenues.

“There are cash-generating SaaS companies that are growing only a bit more slowly that are trading for lower multiples,” he has previously observed. “I cannot see what makes the company — an unprofitable, only moderately growing upstart with non-recurring revenue — worth a SaaS multiple. Especially as its gross margins aren’t great and aren’t improving.”

Meanwhile, mattress-seller Casper, which also filed new information about its IPO plans this week, has numbers that aren’t all that different. But it’s just hoping to not take too big of a haircut on its last private valuation, Alex separately noted on EC.

Maybe public investors still care about a great story, despite the rough debuts of Blue Apron, SmileDirect, WeWork and a range of others? Certainly, One Medical’s work to improve medical care is laudable regardless of these questions (in fact, it won the Best Healthcare Startup Crunchie in 2013).

Stay tuned for more.

How acquirers look at your company

Let’s say the public markets are not for you, though, and instead you want to get acquired. Ed Byrne of Scaleworks looks at this both as a startup investor and, through a separate part of his company, as an acquirer, and has kindly provided a detailed explainer on Extra Crunch for startup founders.

Here are his key deciders from the purchaser perspective:

1. Downside protection: Are we confident we are not going to lose money?
2. Median: If we work hard, focus on good business operations and execute the low-hanging fruit, will we be able to grow this business enough to make a solid return (solid return being an increased valuation multiple from a higher revenue base)?
3. Upside: If one of our category creation ideas pans out, and we succeed in winning a very targeted segment of the market, is there an opportunity for this business to be a real winner and provide outsized returns?

Buying and taking on someone else’s business is always a scary proposition — the unknown unknowns — but if you get comfortable with the fundamental of the company, acquisitions can be a real accelerator compared to the epic effort — and high risk — of starting from scratch.

Where top VCs are investing in travel, tourism and hospitality tech

Want to build the next Airbnb? In this week’s investor survey, Arman Tabatabai spoke to some of the most active and successful investors in travel-oriented industries today — the general mood is pretty positive, with M&A expected to help incumbents boost consumer-facing service quality, and new technologies cracking open more possibilities for companies of all sizes.

Respondents include:

• Bonny Simi, JetBlue Technology Ventures
• Pete Flint, NFX
• Tige Savage, Revolution Ventures
• Brad Greiwe, Fifth Wall
• Prashant Fonseka, Tuesday Capital

A conversation with ‘the most ambitious female VC in Europe’

Starting a company in Europe? Want to? Here’s how Blossom Capital cofounder and long-time investor Ophelia Brown explains the opportunities in the region to Steve O’Hear.

Having now been in this ecosystem for so long, I think the inflection point is the number of successful high-growth companies that we’ve produced from Europe, be it Adyen, Spotify, Farfetch, Elastic and Klarna, where my [Blossom] partner Louise was as well, I think what it has really shown to people is that you can take risk at the early stage and build meaningful businesses from Europe. And I think that’s really encouraged a new next generation of entrepreneur. And Europe is changing its mindset that it’s okay to fail.

And I think the other shift is that now people are saying, “okay, well, I’m not going to move to the valley and trying to build my teams because talent is so competitive and so expensive over there, I want to build in Europe.” And then finally, the great engineering, design, product talent here and then being helped by funds like us to scale it at the beginning and early stages, and then going on to produce some really interesting things. I don’t think U.S. funds are coming over here because they see cheaper pricing and lower valuations. They’re coming over here because they are looking at markets and industries and finding the potential next best thing over in Europe.

Around the horn

SoftBank wants its on-demand portfolio to stop losing so much money (TC)

Tracking corporate venture capital’s rise over the past decade (EC)

True product-market fit is a minimum viable company (TC)

Gauging email success, invite-only app launches and other growth tactics (EC)

All eyes are on the next liquidity event when it comes to space startups (TC)

Essential advice for securing your small startup (EC)

Adding India to your business (TC)

#EquityPod

This week’s episode features Alex along with co-host Danny Crichton talking about:

• Kleiner Perkins’ fast investment of a recent $600m round
• Free Agency’s tech play for talent management
• The huge round for “Ring for enterprise” Verdaka
• Insurance startup funding trends
• Updates on the on-demand wars
• The latest in tech IPOs

Get Startups Weekly in your inbox every Saturday morning, just sign up here. 

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Hi everyone, my name is Eric Eldon and I’m the new writer of the Startups Weekly newsletter. 

I’ll be picking my favorite explicitly startup-focused articles of the week for you from Extra Crunch (where I’m the editor now), as well as TechCrunch (where I was the co-editor years ago… long story). 

Some people tell us that TechCrunch doesn’t cover startups like it used to. I don’t know if that is true, but it is definitely hard to keep track of our startup coverage mixed in with the rest of our news.

This newsletter will highlight the best startup coverage on TechCrunch and Extra Crunch to help fix that.

I probably hate reading bad startup advice and analysis even more than you do, and not only because I’ve had to read a lot of it over the years as an editor. I’ve also started a few companies myself, and I’ve had the chance to experience exits, failures and venture backing.

I’ll be highlighting articles that I think address something significant about building a company, and I’ll tell you why each one is worth a read. 

There will also be some experiments. Thanks for reading! And if you want it in your inbox, you can subscribe here. 

Everybody loves Plaid

Plaid’s product is beyond boring to most people, but it is already a name brand to its enterprise users and across the greater startup world, as its stats and funding rounds have grown. The $5.3 billion outcome announced this week cements its status as a top SaaS/fintech startup story of this era, in addition to being a popular platform for developers who need to sync user payment data.

Alex Wilhelm was all over the news. He dug into Visa’s presentation explaining the purchase on Extra Crunch — it paid more than twice Plaid’s last valuation — and found the classic tale of a large, slow-moving incumbent strategically buying a hot younger company in order to grow into newer markets. Then he got comments for Extra Crunch from a range of analysts… who basically said the same thing. 

You can now tune into the latest TechCrunch Equity episode to hear him talk about it with our resident former VC Danny Crichton.

Atrium gets out of the human law firm business

Closely watched Atrium is shutting down the law firm to focus on the tech company. Founder Justin Kan tells Josh Constine on TechCrunch that this is part of the evolution toward providing a better tech service.

The law firm had been designed to provide the human touch in a way that machines couldn’t, but Kan says that lawyers do that great as third parties.

Many SaaS startups are trying to take on the back office processes of the 20th century. Atrium’s change will be another reason for them to go all-in on software, with humans not included.

PR expert says maybe don’t do PR right now

One of the most loved and feared people in tech communications today, Brooke Hammerling has been in the middle of key stories of the decade with founders young and old. And sometimes on the opposite side of me.

 She knows her stuff. Here’s one of my favorite gems from the full interview with Jordan Crook over on Extra Crunch:

If you’re an early-stage company, and you’re an unknown founder, and you’re coming out with your own take on something, you don’t want to spend your money on PR too early.

You want to spend that money on product development and engagement and engineering and so forth.

Big funds do the small funding rounds now

That’s the word on the street from our resident former VC, who was recently out in San Francisco visiting his many friends and professional acquaintances. Danny put his notes together for TechCrunch back in the comfort of his New York apartment, and found that everyone is raising huge rounds [emphasis his] — and it’s all about being there for the future. Plaid’s cap table is a good example.

One of my favorite quotes:

As one VC explained to me last week (paraphrasing), “What’s weird today is that you have firms like Sequoia who show up for seed rounds, but they don’t really care about … anything. Valuation, terms, etc. It’s all a play for those later-stage rounds.” I think that’s a bit of an exaggeration to be clear, but ultimately, those one million-dollar checks are essentially a rounding error for the largest funds. The real return is in the mega rounds down the road. 

He also noticed for TechCrunch that VCs today seem to be especially tired. You can tell him what you think about these observations at danny@techcrunch.com.

(Photo by David Becker/Getty Images)

Home robots are making moves at CES

I have never been to CES and don’t plan to go, but Brian Heater always goes and this year he came back thinking that the home robot sector is getting serious.

His takeaway for Extra Crunch: 

There’s a cynical (and probably at least partially correct) view that these sorts of deals are publicity stunts — big companies using CES to demonstrate how forward-thinking they are about new technologies. But there’s something to be said for the show’s position at the forefront of such technologies. The products are real, even if wider use is hypothetical. And in an era when Amazon has deployed more than 100,000 robots across its U.S. fulfillment centers to enable next and same-day delivery, we’re well into the realm of real-world use.

Brian is also hosting a one-day TechCrunch conference focused on robotics startups at UC Berkeley in early March, for those who are focused on this space. The event last year was a huge hit and we’re looking forward to the next one. Follow the link to learn more. 

Will Silicon Valley win at weed?

Eaze has been one of the highest-profile cannabis distributors, but now it might be running out of cash, report Ingrid Owen and Josh Constine. There are many structural reasons why any cannabis business is very hard, legal or otherwise. 

But it’s interesting to take a look at who is succeeding in the consumer cannabis market and why.

One local example is Berner, a high school dropout in San Francisco who became a budtender and partnered with cannabis geneticists to create and promote the Girl Scout Cookies strain, and also became an international rap star (the main topic is his weed) and clothing designer.  

These days, he’s opening more and more Cookies retail cannabis outlets, including in Oakland and L.A., and cutting licensing and certification deals with a broad network of partners, (and claims to be turning down huge acquisition offers). Basically, his cannabis is also his modern multi-platform brand and the cool kids are into it. He does not appear to be running out of cash.

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