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Equity Shot: Judging Uber’s less-than-grand opening day

Published May 10, 2019

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

We are back, as promised. Kate Clark and Alex Wilhelm re-convened today to discuss the latest from the Uber IPO. Namely that it opened down, and then kept falling.

A few questions spring to mind. Why did Uber lose ground? Was it the company’s fault? Was it simply the macro market? Was it something else altogether? What we do know is that Uber’s pricing wasn’t what we were expecting and its first day was not smooth.

There are a whole bunch of reasons why Uber went out the way it did. Firstly, the stock market has had a rough week. That, coupled with rising U.S.-China tensions made this week one of the worst of the year for Uber’s monstrous IPO.

But, to make all that clear, we ran back through some history, recalled some key Lyft stats, and more.

We don’t know what’s next but we will be keeping a close watch, specifically on the next cohort of unicorn companies ready to IPO (Postmates, hi!).

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Pocket Casts, Downcast and all the casts.

Grocery startup BigBasket becomes India’s newest unicorn with new $150M investment

Published May 6, 2019

India has a new unicorn after BigBasket, a startup that delivers groceries and perishables across the country, raised $150 million for its fight against rivals Walmart’s Flipkart, Amazon and hyperlocal startups Swiggy and Dunzo.

The new financing round — a Series F — was led by Mirae Asset-Naver Asia Growth Fund, the U.K.’s CDC Group and Alibaba, BigBasket said on Monday. The closing of the round has officially helped the seven-year-old startup surpass $1 billion valuation, co-founder Vipul Parekh, who heads marketing and finances for the company, told TechCrunch in an interview. Chinese giant Alibaba, which also led the Series E round in BigBasket last year, is the largest investor in the company, with about 30% stake, a person familiar with the matter said.

The company, which offers more than 20,000 products from 1,000 brands in more than two dozen cities, will deploy the fresh capital into expanding its supply-chain network, adding more cold storage centers and distribution centers to serve customers faster, Parekh said. The company also plans to add about 3,000 vending machines that offer daily eatable items, such as vegetables, snacks and cold drinks in residential apartments and offices by next month, he added.

Infusion of $150 million for BigBasket, which raised $300 million last year, comes at a time when both Walmart’s Flipkart and Amazon are increasingly expanding their grocery businesses in India.

Amazon Retail India, which operates Amazon Pantry and Prime Now services and has a presence in mire than 100 cities, is reportedly planning to expand its business in India. Flipkart Group CEO Kalyan Krishnamurthy said in an interview with the Economic Times last month that the e-commerce giant may pilot a fresh foods business soon. Last week, Flipkart was said to be in talks to acquire grocery chain Namdhari’s Fresh.

Parekh largely brushed off the challenge his company faces from Flipkart and Amazon at this stage, saying that “it is a very large market, and it is unlikely to be dominated by one single company for the simple reason of its complex nature.” Flipkart and Amazon may eventually get serious about this space, but so far their play with groceries is mostly an additional differentiation checkpoint, he said.

“The success in this business requires having the ability to build and manage a very complex supply chain across multiple categories such as vegetables, meat and beauty products among others. Our focus has been on building the supply chain, and also ensuring that we are able to deliver a very large assortment of products to consumers,” he added. He said BigBasket today offers the largest catalog and fastest delivery among any of its rivals.

Besides, BigBasket, which is increasingly growing its subscription business to supply milk and other daily eatables, is also inching closer to becoming financially stronger. Parekh said BigBasket expects to become operationally profitable in six to eight months. “The idea is that business by itself does not consume cash. If we use cash, it will be for investment in new businesses or scaling of existing businesses,” he said.

India’s retail market, valued at mire than $900 billion, is increasingly attracting the attention of VC funds. Since 2014, online retailers alone have participated in more than 163 financing rounds, clocking over $1.38 billion, analytics firm Tracxn told TechCrunch. More than 882 players are operational in the market, the firm said.

The challenge for BigBasket remains fighting a growing army of rivals, including hyperlocal delivery startups including Grofers, which raised $60 million earlier this year, unicorn Swiggy and Google-backed Dunzo, which is increasingly becoming a verb in urban Indian cities.

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.

Luxury consignment e-tailer The RealReal to enter the unicorn club with new funding

Published April 23, 2019

The RealReal, an online retailer for authenticated luxury consignment, has authorized the sale of up to $70 million in new shares, per a Delaware stock authorization filing discovered by the Prime Unicorn Index. If the company raises the entire amount, it would reach a valuation of $1.06 billion, cementing its status as the newest e-commerce unicorn.

The filing doesn’t guarantee The RealReal will sell the full amount of authorized shares. The company declined to comment on its fundraising plans.

The RealReal is led by founder and chief executive officer Julie Wainwright (pictured), the former CEO of Pets.com, a company now synonymous with the dot-com bust. It has raised quite a bit of capital to date — a total of $288 million from venture capital and private equity backers, including Great Hill Partners, Sandbridge Capital, PWP Growth Equity, Industry Ventures, Greycroft Partners and Canaan Partners. Most recently, The RealReal closed a Series G financing of $115 million in July 2018 that valued the business at $745 million, per PitchBook.

The RealReal has recently expanded its brick-and-mortar footprint and added additional e-commerce fulfillment centers as demand increased for its supply of second-hand luxury items. Founded in 2011, the company operates eight luxury consignment offices, where customers can receive free valuations of their luxury items. The RealReal is headquartered in San Francisco.

In a conversation with TechCrunch in 2017, Wainwright confirmed the company’s intent to go public at some point. With this upcoming round, The RealReal would be well placed for a 2020 initial public offering.

“That’s the goal,” Wainwright said during the interview. “We really aren’t in the mood to sell the business, we’re in the mood to go public at some point in the future.”

The RealReal competes with fellow second-hand e-tailers ThredUp and Poshmark . The latter is gearing up for a fall IPO, according to The Wall Street Journal. The online marketplace has tapped Morgan Stanley and Goldman Sachs to lead its offering after closing in on $150 million in revenue in 2018. ThredUp, another major player in the fashion retail market, hasn’t raised capital since 2015, but did begin opening physical stores in 2017 as part of its greater effort to compete with fellow venture-backed second-hand e-tailers.

The RealReal would also be the latest in a series of high-profile female-founded companies to gain unicorn status. Glossier tripled its valuation to $1.2 billion with a $100 million round earlier this year, followed by Rent the Runway, which attracted a $125 million investment at a $1 billion valuation, to name a few.

Rent the Runway hits a $1 billion valuation

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

Startups Weekly: US companies raised $30B in Q1 2019

Published April 6, 2019

Let’s start this week’s newsletter with some data. Nationally, startups pulled in $30.8 billion in the first quarter of 2019, up 22 percent year-on-year, according to Crunchbase’s latest deal round-up.

A closer look at the numbers shows a big drop in angel funding and a slight decrease in mega-rounds, or financings larger than $100 million. The number of mega-rounds fell to 57 deals in Q1 and deal value was down too. With that said, mega-rounds still accounted for $16.4 billion, making Q1 2019 the second-best quarter on record for mega-rounds.

The bottom line is these monstrous deals represented a big chunk (29 percent) of all the dollars invested in U.S. startups in Q1. As investors move downstream and startups opt to stay private longer and longer, we’ll continue to see a greater pick up in mega rounds.

Want more TechCrunch newsletters? Sign up here.

OK, on to other news…

IPO corner

Once trading after the pink confetti was swept up off the floor, analysts and investors had a different story to tell about one of the first unicorns to make its public debut. Lyft began the week struggling to hit its IPO price, closing several days under that $72, despite opening with a 20 percent pop at $86. What’s going on? People are shorting the Lyft stock, looking to profit off the company’s sinking value. Things are looking up though; on Friday as I typed this newsletter, Lyft was trading at about $74 per share.

.@Uber sent @Lyft a whole bunch of cakes on IPO day, how nice. pic.twitter.com/hbZC5HOxbL

— Kate Clark (@KateClarkTweets) April 5, 2019

In other IPO, or shall I say, direct listing news, Slack has reportedly chosen the NYSE for its upcoming exit. A quick reminder why Slack has opted to go public via direct listing: The company doesn’t need any IPO cash thanks to the hundreds of millions of dollars on its balance sheet, but its longtime employees and investors need the liquidity. A direct listing allows it to go public without listing any new shares, with no lockup period and no intermediary bankers. The process saves it some money and expedites the process. OK, that wasn’t as brief as I intended, moving on…

Saying goodbye to venture capital

In a story that sent the entirety of Silicon Valley into a frenzy, Forbes reported that Andreessen Horowitz was denouncing its status as a venture capital firm and would register all its employees as financial advisors. For those inclined, Crunchbase News’ Alex Wilhelm and I unpacked what this means in the latest episode of Equity; for those less inclined, here’s the TLDR: For a16z to have the freedom to make riskier bets, like buying public company stock or heaps of cryptocurrency, the title of financial advisor gives them that ability.

Femtech’s billion-dollar year

Femtech, defined as any software, diagnostics, products and services that leverage technology to improve women’s health, has attracted some $250 million in VC funding so far this year, according to PitchBook. That puts the sector on pace to secure nearly $1 billion in investment by year-end, greatly surpassing last year’s record of $650 million. For more historical context, startups in the space brought in only $62 million in 2012, $225 million in 2014 and $231 million in 2016.

The 20-Min Term Sheet

Alternative financier Clearbanc says it will invest $1 billion in 2,000 e-commerce startups in 2019. Here’s the catch: Until the companies have paid back 106 percent of Clearbanc’s investment, Clearbanc takes a percentage of their revenues every month. Clearbanc’s goal is to help companies preserve equity, favoring a revenue share model rather than the traditional VC model, which eats equity in startups in exchange for capital. I spoke to Clearbanc co-founder Michele Romanow to learn more about Clearbanc’s attempt to disrupt venture capital.

Startup capital

Extra Crunch

TechCrunch’s Megan Rose Dickey authored the be-all-end-all story on the shared-electric-scooter business. Here’s a quick passage: “The startup ecosystem had become accustomed to the ethos of begging for forgiveness, rather than asking for permission. But that’s not the case with electric scooters. These companies have found their entire businesses to be contingent on the continued approval from individual cities all over the world. That inherently creates a number of potential conflicts.” Extra Crunch subscribers can read the full story here.

Plus, we dropped the Niantic EC-1, in which Greg Kumparak dives deep into the history of the maker Pokemon Go, contributor Sherwood Morrison looked at remote workers and nomads, who represent the next tech hub.

Unicorns are investors, too

TechCrunch has confirmed that Airbnb has invested between $150 million to $200 million in Indian hotel startup Oyo. Airbnb confirmed the existence of the deal but not the exact amount. The home-sharing giant is continuing to widen its focus beyond “unconventional” hotels as it prepares to begin selling pubic market investors on its long-term vision. Remember, this deal comes right after its big acquisition of HotelTonight.

M&A

WeWork acquired Managed by Q this week, a VC-backed startup that helps office managers and other decision-makers handle supply stocking, cleaning, IT support and other non-work related tasks in the office by simply using the Managed by Q dashboard. The company was most recently valued at $250 million, having raised a total of $128.25 million from investors such as GV, RRE and Kapor Capital.

#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 the future of a16z, Jumia’s IPO, the Midas list and more of this week’s headlines.

Africa Roundup: Jumia files for IPO, OneFi acquires Amplify, FlexClub expands in Mexico

Published April 4, 2019

Less than a decade ago IPOs, acquisitions and global expansion by African startups were more possibility than reality. March saw all three from the continent’s tech scene.

Pan-African e-commerce company Jumia filed for an IPO on the New York Stock Exchange, per SEC documents and confirmation from chief executive Sacha Poignonnec.

In an updated filing, (since the March 12 original) Jumia indicated it will offer 13,500,000 ADR shares, for an offering price of $13 to $16 per share to trade under the ticker symbol “JMIA.” The IPO could raise up to $216 million for Jumia.

Since our first story (and reflected in the latest SEC docs), Mastercard Europe agreed upfront to buy $50 million in Jumia ordinary shares.

With a smooth filing process, Jumia will become the first African startup to list on a major global exchange. The company is incorporated in Germany, but maintains its headquarters in Nigeria, and operates exclusively in Africa, with 4,000 employees on the continent.

The pending IPO creates another milestone for Jumia. The venture became the first African startup unicorn in 2016, achieving a $1 billion valuation after a funding round that included Goldman Sachs, AXA and MTN.

Founded in Lagos in 2012 with Rocket Internet backing, Jumia now operates multiple online verticals in 14 African countries. Goods and services lines include Jumia Food (an online takeout service), Jumia Flights (for travel bookings) and Jumia Deals (for classifieds). Jumia processed more than 13 million packages in 2018, according to company data. The company has started to generate annual revenues over $100 million, but like many burn-rate startups, has done so while racking up big losses.

There’ll be a lot more to cover, analyze and debate pre and post Jumia’s NYSE bell toll — which could happen in coming weeks or months. For example, can Jumia generate a profit; is it really an African startup; will Jumia become an acquisition target for a big outside name or an acquirer of smaller startups in African e-commerce? Stay tuned for continuing TechCrunch coverage.

On the acquisition front, Lagos-based online lending startup OneFi bought Nigerian payment solutions company Amplify for an undisclosed amount.

OneFi is taking over Amplify’s IP, team and client network of more than 1,000 merchants to which Amplify provides payment processing services, OneFi CEO Chijioke Dozie told TechCrunch.

The purchase of Amplify caps off a busy period for OneFi. Over the last seven months the Nigerian venture secured a $5 million lending facility from Lendable, announced a payment partnership with Visa and became one of the first (known) African startups to receive a global credit rating. OneFi is also dropping the name of its signature product, Paylater, and will simply go by OneFi (for now).

Collectively, these moves represent a pivot for OneFi away from operating primarily as a digital lender, toward becoming an online consumer finance platform.

“We’re not a bank but we’re offering more banking services…Customers are now coming to us not just for loans but for cheaper funds transfer, more convenient bill payment, and to know their credit scores,” said Dozie.

OneFi will add payment options for clients on social media apps, including WhatsApp, this quarter — something in which Amplify already holds a specialization and client base. Through its Visa partnership, OneFi will also offer clients virtual Visa wallets on mobile phones and start providing QR code payment options at supermarkets, on public transit and across other POS points in Nigeria.

On the back of the acquisition, OneFi is in the process of raising a round and will look to expand internationally, considering Senegal, Côte d’Ivoire, DRC, Ghana and Egypt and Europe for Diaspora markets.

On African startups expanding globally, FlexClub — a South African venture that matches investors and drivers to cars for ride-hailing services — announced it will expand in Mexico in a partnership with Uber after closing a $1.2 million seed round led by CRE Venture Capital.

The move comes as Africa’s tech-transit space continues to produce unique mobility solutions shaped around local needs.

FlexClub touts itself as a “gig economy investment platform” that is creating new asset classes in emerging markets, according to chief executive and co-founder Tinashe Ruzane.

That asset class, for now, is ride-hail vehicles. FlexClub allows investors to go on the site and purchase a car (ultimately managed and serviced by FlexClub). The startup then connects that car to an Uber driver who uses earnings to pay a weekly rental charge.

Those fees generate monthly fixed-rate interest income for the investor. The driver has the option of buying the car after 12 months, with a descending purchase price over time.

FlexClub’s platform manages the investment, rental income and disbursement of funds across all parties. The startup also handles insurance, maintenance and upkeep of the cars.

Ruzane envisions this as a model to finance multiple asset classes in emerging markets — where lending options are fewer for individuals who may not have credit histories.

“Our goal is to make this completely passive… where investors can invest in different kinds of assets on our platform, login to a dash, and see this is how my five cars in South Africa are doing, my vans in Mexico, my motorbikes in Indonesia — with a diversified portfolio around the world,” he explained.

FlexClub will begin work matching investors to cars and Uber drivers in Mexico in April. The startup sees opportunities to move into other mobility classes, such as Africa’s ride-hail motorcycle taxi and three-wheel tuk-tuk market, CEO Tinashe Ruzane told TechCrunch in this feature.

And finally, francophone Africa will see a boost in funds and support for startups. The Dakar Network Angels group launched last month, making its first investment to cleantech venture Coliba — an Ivorian startup that uses a mobile app to coordinate waste recycling

The deal is part of Dakar Network Angels’ mission of convening experts and capital to bridge the resource gap for startups in French-speaking Africa — or 24 of the continent’s 54 countries.

The organization — which goes by DNA for short — will offer seed fund investments of between $25,000 to $100,000 to early-stage ventures with high growth potential. These rounds will come with the entrepreneurial guidance of DNA’s angel network.

Launched in Senegal, the organization’s founder Marieme Diop — a VC investor at Orange Digital Ventures — named the goal of bridging VC disparities between francophone and non-francophone Africa as the primary driver for DNA. She pointed to funding data by Partech, indicating that 76 percent of investment to African startups goes to three English-speaking countries — Nigeria, Kenya and South Africa.

To gain consideration for DNA investment, startups must gain referral by a member. DNA will take a minority stake (less than 10 percent) in ventures that receive seed funds and provide program mentorship until exits, Diop told TechCrunch.

To become an angel, members must commit to investing a minimum of $10,000 a year (for those coming on as individuals), $20,000 (for corporates) and be on hand to support the portfolio startups, according to DNA’s Corporate Membership Charter.

More Africa Related Stories @TechCrunch

African Tech Around The Net

Equity Shot: Lyft is public — what does that mean for other IPO-ready unicorns?

Published March 29, 2019

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

Sure, we just aired a new episode, but things keep happening, and after talking about this crop of IPOs for so long, we can’t help ourselves. (You can follow us on Twitter, here and here, by the way, if Equity isn’t enough for you.)

Lyft, as you know, started trading today, closing the loop on a long saga that brought the smaller of the two domestic ride-hailing unicorns to the public markets.

After so much speculation about which of the two would get out the door first, Lyft did, and now we get to see what sort of pricing shenanigans happen next. Does Uber drop rates and punish Lyft? Or does Uber work to cut its losses, lowering its expenses and providing a clearer path toward profitability before its April IPO roadshow kicks off? (Not a path to profitability, mind; Uber and Lyft need to show a path to the direction of profitability first.)

We hit all the bases, going over the company’s pricing path, its varying share figures, final raise metrics and more. If you want the hard stuff, we’ve got a shot for you.

Now that the Lyft IPO has wrapped, we’ll be shifting our focus to Pinterest, Zoom and, of course, Uber. Stay tuned.

OK, now we’re done. Until next Friday. Unless something else happens.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Pocket Casts, Downcast and all the casts.

Startups Weekly: A much-needed unicorn IPO update

Published March 23, 2019

As I’m sure everyone reading this knows, female-founded businesses receive just over 2 percent of venture capital on an annual basis. Most of those checks are written to early-stage startups. It’s extremely difficult for female founders to garner late-stage support, let alone cash $100 million checks.

Maybe that’s finally changing. This week, not one but two female-founded and led companies, Glossier and Rent The Runway, raised nine-figure rounds and cemented their status as unicorn companies. According to PitchBook data from 2018, there are only about 15 unicorn startups with female founders. Though I’m sure that number has increased in the last year, you get the point: There are hundreds of privately held billion-dollar companies and shockingly few of those have women founders (even fewer have female CEOs)…

Moving on…

YC Demo Days

I spent a good part of the week at San Francisco’s Pier 48 in a room full of vest-wearing investors. We listened to some 200 YC companies make their 120-second pitch and though it was a bit of a whirlwind, there were definitely some standouts. ICYMI: We wrote about each and every company that pitched on day 1 and day 2. If you’re looking for the inside scoop on the companies that forwent demo day and raised rounds, or were acquired, before hitting the stage, we’ve got that too.

IPO corner

Lyft: This week, Lyft set the terms for its highly-anticipated initial public offering, expected to be completed next week. The company will charge between $62 and $68 per share, raising more than $2 billion at a valuation of ~$23 billion. We previously reported its initial market cap would be around $18.5 billion, but that was before we knew that Lyft’s IPO was already oversubscribed. Here’s a little more background on the Lyft IPO for those interested.

Uber: The global ride-hailing business flew a little more under the radar this week than last week, but still managed to grab a few headlines. The company has decided to sell its stock on the New York Stock Exchange, which is the least surprising IPO development of 2019, considering its key U.S. competitor, Lyft, has been working with the Nasdaq on its IPO. Uber is expected to unveil its S-1 in April.

Ben Silbermann, co-founder and CEO of Pinterest, at TechCrunch Disrupt SF 2017.

Pinterest: Pinterest, the nearly decade-old visual search engine, unveiled its S-1 on Friday, one of the final steps ahead of its NYSE IPO, expected in April. The $12.3 billion company, which will trade under the ticker symbol “PINS,” posted revenue of $755.9 million in the year ending December 31, 2018, up from $472.8 million in 2017. It has roughly doubled its monthly active user count since early 2016, hitting 265 million last year. The company’s net loss, meanwhile, shrank to $62.9 million in 2018 from $130 million in 2017.

Zoom: Not necessarily the buzziest of companies, but its S-1 filing, published Friday, stands out for one important reason: Zoom is profitable! I know, what insanity! Anyway, the startup is going public on the Nasdaq as soon as next month after raising about $150 million in venture capital funding. The full deets are here.

Seed money

General Catalyst, a well-known venture capital firm, is diving more seriously into the business of funding seed-stage business. The firm, which has investments in Warby Parker, Oscar and Stripe, announced earlier this week its plan to invest at least $25 million each year in nascent teams.

Deal of the week

Earlier this week, Opendoor, the SoftBank -backed real estate startup, filed paperwork to raise even more money. According to TechCrunch’s Ingrid Lunden, the business is planning to raise up to $200 million at a valuation of roughly $3.7 billion. It’s possible this is a Series E extension; after all, the company raised its $400 million Series E only six months ago. Backers of OpenDoor include the usual suspects: Andreessen Horowitz, Coatue, General Atlantic, GV, Initialized Capital, Khosla Ventures, NEA and Norwest Venture Partners.

Startup capital

Backstage Capital founder and managing partner Arlan Hamilton, center.

Debate

Axios’ Dan Primack and Kia Kokalitcheva published a report this week revealing Backstage Capital hadn’t raised its debut fund in total. Backstage founder Arlan Hamilton was quick to point out that she had been honest about the challenges of fundraising during various speaking engagements, and even on the Gimlet “Startup” podcast, which featured her in its latest season. A Twitter debate ensued and later, Hamilton announced she was stepping down as CEO of Backstage Studio, the operations arm of the venture fund, to focus on raising capital and amplifying founders. TechCrunch’s Megan Rose Dickey has the full story.

Pro rata rights

This week, TechCrunch’s Connie Loizos revisited a long-held debate: Pro rata rights, or the right of an earlier investor in a company to maintain the percentage that he or she (or their venture firm) owns as that company matures and takes on more funding. Here’s why pro rata rights matter (at least, to VCs).

#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 Glossier, Rent The Runway and YC Demo Days. Then, in a special Equity Shot, we unpack the numbers behind the Pinterest and Zoom IPO filings.

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Equity Shot: Pinterest and Zoom file to go public

Published March 22, 2019

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

What a Friday. This afternoon (mere hours after we released our regularly scheduled episode no less!), both Pinterest and Zoom dropped their public S-1 filings. So we rolled up our proverbial sleeves and ran through the numbers. If you want to follow along, the Pinterest S-1 is here, and the Zoom document is here.

Got it? Great. Pinterest’s long-awaited IPO filing paints a picture of a company cutting its losses while expanding its revenue. That’s the correct direction for both its top and bottom lines.

As Kate points out, it’s not in the same league as Lyft when it comes to scale, but it’s still quite large.

More than big enough to go public, whether it’s big enough to meet, let alone surpass its final private valuation ($12.3 billion) isn’t clear yet. Peeking through the numbers, Pinterest has been improving margins and accelerating growth, a surprisingly winsome brace of metrics for the decacorn.

Pinterest has raised a boatload of venture capital, about $1.5 billion since it was founded in 2010. Its IPO filing lists both early and late-stage investors, like Bessemer Venture Partners, FirstMark Capital, Andreessen Horowitz, Fidelity and Valiant Capital Partners as key stakeholders. Interestingly, it doesn’t state the percent ownership of each of these entities, which isn’t something we’ve ever seen before.

Next, Zoom’s S-1 filing was more dark horse entrance than Katy Perry album drop, but the firm has a history of rapid growth (over 100 percent, yearly) and more recently, profit. Yes, the enterprise-facing video conferencing unicorn actually makes money!

In 2019, the year in which the market is bated on Uber’s debut, profit almost feels out of place. We know Zoom’s CEO Eric Yuan, which helps. As Kate explains, this isn’t his first time as a founder. Nor is it his first major success. Yuan sold his last company, WebEx, for $3.2 billion to Cisco years ago then vowed never to sell Zoom (he wasn’t thrilled with how that WebEx acquisition turned out).

Should we have been that surprised to see a VC-backed tech company post a profit — no. But that tells you a little something about this bubble we live in, doesn’t it?

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple Podcasts, Overcast, Pocket Casts, Downcast and all the casts.