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Startups Weekly: Zoom CEO says its stock price is ‘too high’
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.
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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.
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.
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.
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
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.
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.
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Pinterest prices IPO above range
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.
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Google starts rolling out better AMP URLs
Publishers don’t always love Google’s AMP pages, but readers surely appreciate their speed, and while publishers are loath to give Google more power, virtually every major site now supports this format. One AMP quirk that publisher’s definitely never liked is about to go away, though. Starting today, when you use Google Search and click on an AMP link, the browser will display the publisher’s real URLs instead of an “http//google.com/amp” link.
This move has been in the making for well over a year. Last January, the company announced that it was embarking on a multi-month effort to load AMP pages from the Google AMP cache without displaying the Google URL.
At the core of this effort was the new Web Packaging standard, which uses signed exchanges with digital signatures to let the browser trust a document as if it belongs to a publisher’s origin. By default, a browser should reject scripts in a web page that try to access data that doesn’t come from the same origin. Publishers will have to do a bit of extra work, and publish both signed and un-signed versions of their stories.
Quite a few publishers already do this, given that Google started alerting publishers of this change in November 2018. For now, though, only Chrome supports the core features behind this service, but other browsers will likely add support soon, too.
For publishers, this is a pretty big deal, given that their domain name is a core part of their brand identity. Using their own URL also makes it easier to get analytics, and the standard grey bar that sits on top of AMP pages and shows the site you are on now isn’t necessary anymore because the name will be in the URL bar.
To launch this new feature, Google also partnered with Cloudflare, which launched its AMP Real URL feature today. It’ll take a bit before it will roll out to all users, who can then enable it with a single click. With this, the company will automatically sign every AMP page it sends to the Google AMP cache. For the time being, that makes Cloudflare the only CDN that supports this feature, though others will surely follow.
“AMP has been a great solution to improve the performance of the internet and we were eager to work with the AMP Project to help eliminate one of AMP’s biggest issues — that it wasn’t served from a publisher’s perspective,” said Matthew Prince, co-founder and CEO of Cloudflare. “As the only provider currently enabling this new solution, our global scale will allow publishers everywhere to benefit from a faster and more brand-aware mobile experience for their content.”
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WeWork backs New York tech clubhouse Betaworks Studios
Betaworks Studios, the brainchild of New York City seed-stage venture capital fund Betaworks, has amassed the support of WeWork, or The We Company, as they now call themselves.
JLL Spark Ventures and the co-working giant have led co-led a $4.4 million investment in the membership-based co-working club described as a supportive community for builders. Launched in 2018, Betaworks Studios offers entrepreneurs, artists, engineers and creatives a place to work on projects and accumulate a network, similar to a WeWork hub.
Betaworks Ventures, which filed today to raise a $75 million sophomore fund, and BBG Ventures have also participated in the funding for Betaworks Studio, which previously raised a pre-seed round led by BBG.
Founded in 2008 by John Borthwick, Betaworks operates an investment fund, an accelerator and builds companies internally with spinouts including Giphy, Digg and Bit.ly. The idea for Betaworks Studios was to expand its resources and network to the greater entrepreneurial community.
Borthwick brought on Daphne Kwon, the former chief financial officer of Goop, to run the studio arm, which charges $2400 per year or $225 per month.
Betaworks says its studio has hosted some 9,000 people for meetings and speaking events. It currently has only one club location in New York City’s Meatpacking District but plans to open additional studios with the fresh cash.
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Vizion.ai launches its managed Elasticsearch service
Setting up Elasticsearch, the open-source system that many companies large and small use to power their distributed search and analytics engines, isn’t the hardest thing. What is very hard, though, is to provision the right amount of resources to run the service, especially when your users’ demand comes in spikes, without overpaying for unused capacity. Vizion.ai’s new Elasticsearch Service does away with all of this by essentially offering Elasticsearch as a service and only charging its customers for the infrastructure they use.
Vizion.ai’s service automatically scales up and down as needed. It’s a managed service and delivered as a SaaS platform that can support deployments on both private and public clouds, with full API compatibility with the standard Elastic stack that typically includes tools like Kibana for visualizing data, Beats for sending data to the service and Logstash for transforming the incoming data and setting up data pipelines. Users can easily create several stacks for testing and development, too, for example.
Vizion.ai GM and VP Geoff Tudor
“When you go into the AWS Elasticsearch service, you’re going to be looking at dozens or hundreds of permutations for trying to build your own cluster,” Vision.ai’s VP and GM Geoff Tudor told me. “Which instance size? How many instances? Do I want geographical redundancy? What’s my networking? What’s my security? And if you choose wrong, then that’s going to impact the overall performance. […] We do balancing dynamically behind that infrastructure layer.” To do this, the service looks at the utilization patterns of a given user and then allocates resources to optimize for the specific use case.
What VVizion.ai hasdone here is take some of the work from its parent company Panzura, a multi-cloud storage service for enterprises that has plenty of patents around data caching, and applied it to this new Elasticsearch service.
There are obviously other companies that offer commercial Elasticsearch platforms already. Tudor acknowledges this, but argues that his company’s platform is different. With other products, he argues, you have to decide on the size of your block storage for your metadata upfront, for example, and you typically want SSDs for better performance, which can quickly get expensive. Thanks to Panzura’s IP, Vizion.ai is able to bring down the cost by caching recent data on SSDs and keeping the rest in cheaper object storage pools.
He also noted that the company is positioning the overall Vizion.ai service, with the Elasticsearch service as one of the earliest components, as a platform for running AI and ML workloads. Support for TensorFlow, PredictionIO (which plays nicely with Elasticsearch) and other tools is also in the works. “We want to make this an easy serverless ML/AI consumption in a multi-cloud fashion, where not only can you leverage the compute, but you can also have your storage of record at a very cost-effective price point.”
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Google acquires cloud migration platform Alooma
Google today announced its intention to acquire Alooma, a company that allows enterprises to combine all of their data sources into services like Google’s BigQuery, Amazon’s Redshift, Snowflake and Azure. The promise of Alooma is that it handles the data pipelines and manages them for its users. In addition to this data integration service, though, Alooma also helps with migrating to the cloud, cleaning up this data and then using it for AI and machine learning use cases.
“Here at Google Cloud, we’re committed to helping enterprise customers easily and securely migrate their data to our platform,” Google VP of engineering Amit Ganesh and Google Cloud Platform director of product management Dominic Preuss write today. “The addition of Alooma, subject to closing conditions, is a natural fit that allows us to offer customers a streamlined, automated migration experience to Google Cloud, and give them access to our full range of database services, from managed open source database offerings to solutions like Cloud Spanner and Cloud Bigtable.”
Before the acquisition, Alooma had raised about $15 million, including an $11.2 million Series A round led by Lightspeed Venture Partners and Sequoia Capital in early 2016. The two companies did not disclose the price of the acquisition, but chances are we are talking about a modest price, given how much Alooma had previously raised.
Neither Google nor Alooma said much about what will happen to the existing products and customers — and whether it will continue to support migrations to Google’s competitors. We’ve reached out to Google and will update this post once we hear more.
Update. Here is Google’s statement about the future of the platform:
For now, it’s business as usual for Alooma and Google Cloud as we await regulatory approvals and complete the deal. After close, the team will be joining us in our Tel Aviv and Sunnyvale offices, and we will be leveraging the Alooma technology and team to provide our Google Cloud customers with a great data migration service in the future.
Regarding supporting competitors, yes, the existing Alooma product will continue to support other cloud providers. We will only be accepting new customers that are migrating data to Google Cloud Platform, but existing customers will continue to have access to other cloud providers.
So going forward, Alooma will not accept any new customers who want to migrate data to any competitors. That’s not necessarily unsurprising and it’s good to see that Google will continue to support Alooma’s existing users. Those who use Alooma in combination with AWS, Azure and other non-Google services will likely start looking for other solutions soon, though, as this also means that Google isn’t likely to develop the service for them beyond its current state.
Alooma’s co-founders do stress, though, that “the journey is not over. Alooma has always aimed to provide the simplest and most efficient path toward standardizing enterprise data from every source and transforming it into actionable intelligence,” they write. “Joining Google Cloud will bring us one step closer to delivering a full self-service database migration experience bolstered by the power of their cloud technology, including analytics, security, AI, and machine learning.”
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FanAI buys Waypoint Media to better track fan engagement for streaming monetization
FanAI, an audience analysis platform for esports and streaming, is buying New York-based Waypoint Media to improve its analytics tools for esports players and streamers.
The deal means that Waypoint’s Twitch Middleware API and the “Raven” tracking and URL shortener will be added to FanAI’s product portfolio. The middleware tech has the ability to track every unique registered Twitch viewer so streamers can monitor average watch time, median watch time and channel engagement.
Financial terms were not disclosed, but a person with knowledge of the deal called the acquisition a significant all-cash transaction. That likely means a nice outcome for Waypoint’s backers, the New York-based investment firm Grand Central Tech.
FanAI founder and CEO Johannes Waldstein said of the acquisition, “The way they are able to turn billions of data points into workable information is like nothing else available on the market. We will be able to provide a deeper look at audiences with the new tools and having someone like Kevin join us will cement the FanAI services at the top of the industry.”
Using the Raven URL shortener, FanAI customers can follow the ways in which users browse on online platforms, the company said in a statement.
As part of the acquisition, Waypoint’s chief product officer Kevin Hsu joins FanAI as head of Engineering, the company said.
“Combining forces with FanAI is a perfect fit; we work with the same client base and have complementary solutions to the same problem. Traditionally, FanAI has focused on more static information including social and purchasing data, while Waypoint worked to gather digital movements of the audience. Combined, we can provide the best service by giving access to even more detailed and actionable data for clients,” said Hsu, in a statement.
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The annual PornHub year in review tells us what we’re really looking at online
PornHub, a popular site that features people in various stages of undress, saw 33.5 billion visits in 2018. There are currently 7.53 billion people on Earth.
Y’all have been busy.
The company, which owns most of the major porn sites online, produces a yearly report that aggregates user behavior on the site. Of particular interest, aside from the fact that all of us are horndogs, is that the U.S., Germany and India are in the top spots for porn browsing and that the company transferred 4,000 petabytes of data, or about 500 MB, per person on the planet.
We ignore this data at our peril. While it doesn’t seem important at first glance, the fact that these porn sites are doing more traffic than most major news organizations is deeply telling. Further, like the meme worlds of Twitter and Facebook, Stormy Daniels and Fortnite made the top searches, which points to the spread of politics and culture into the heart of our desires. TV manufacturers should note that 4K searchers are rising in popularity, which suggests that consumer electronics manufacturers should start getting read for a shift (although it should be noted that there is sadly little free 4K content on these sites, a discovery I just made while researching this brief.)
Need more frightening/enlightening data? Here you go.
Just as ‘1080p’ searches had been a defining term in 2017, now ‘4k’ ultra-hd has seen a significant increase in popularity through-out 2018. The popularity of ‘Romantic’ videos more than doubled, and remained twice as popular with female visitors when compared to men.
Searches referring to the dating app ‘Tinder’ grew by 161% among women, 113% among men and 131% by visitors aged 35 to 44. It was also a top trending term in many countries including the United Kingdom and Australia. The number of Tinder themed fantasy date videos on the site is now more than 3500.
Life imitates art, and eventually porn imitates everything, so perhaps it’s no surprise to see that ‘Bowsette’ also made our list of searches that defined 2018. After the original Nintendo fan-art went viral, searches for Bowsette exceeded 3 million in just one week and resulted in the release of a live-action Bowsette themed porn parody (NSFW) with more than 720,000 views.
Bowsette. Good. Moving on.
The Bible Belt represented well in the showings, with Mississippi, South Carolina and Arkansas spending the most time looking at porn. Kansas spent the least. Phones got the most use as porn distribution devices and iOS and Android nearly tied in terms of platform popularity.
Windows traffic fell considerably this year, while Chrome OS became decidedly more popular in 2018. Chrome was popular when it came to browsers used, while the PlayStation was the biggest deliverer of flicks to the console user.
Porn is a the canary in the tech coal mine, and where it goes the rest of tech follows. All of these data points, taken together, paint a fascinating picture of a world on the cusp of a fairly unique shift from desktop to mobile and from HD to 4K video. Further, given that these sites are delivering so much data on a daily basis, it’s clear that all of us are sneaking a peek now and again… even if we refuse to admit it.
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Let’s meet in Poland this month
I’ll be heading back to Europe in December to run a pitch-off in Wroclaw, Poland. It’s a bit out of the way, but well worth a visit if only for the sausages.
The event, called In-Ference, is happening on December 17 and you can submit to pitch here. The team will notify you if you have been chosen to pitch. The winner will receive a table at TC Disrupt in San Francisco.
I’m also thinking about an event in Warsaw on the 21st but WeWork didn’t look doable (and I don’t like co-working spaces). If anyone has thoughts on a new venue drop me a line at john@techcrunch.com. Otherwise, I’ll see you in Wroclaw! Wesołych Świat!
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Tim Berners-Lee is on a mission to decentralize the web
“I’ve always believed the web is for everyone,” wrote Tim Berners-Lee, the well-known (and knighted) creator of the World Wide Web.
“The web has evolved into an engine of inequity and division; swayed by powerful forces who use it for their own agendas,” he added. “Today, I believe we’ve reached a critical tipping point, and that powerful change for the better is possible — and necessary.”
Late last month, he published the above in a blog post announcing inrupt, a startup that would finally execute on his vision for the information superhighway he built nearly 30 years ago. Backed with an undisclosed amount of funding from Glasswing Ventures, the startup is emerging from stealth today with a plan to decentralize the web and restore power to the people rather than the companies that have exploited user trust for their own financial gains.
The timing couldn’t be better. The last year has been plagued with scandals, from Cambridge Analytica, a data analysis firm that used Facebook data to target voters for President Donald Trump’s presidential campaign, to most recently a data-exposing hack on Google+ that relinquished the private information of hundreds of thousands of unsuspecting users.
Internet privacy and security are hot-button issues, to say the least. Users are rapidly losing trust in the companies that became institutions in the digital age — and they’re demanding solutions.
The race to restore control of data and the web at large has begun; inrupt is looking to the finish line.
The father of the World Wide Web
Berners-Lee is a British engineer and professor of computer science who famously gave away the web, which allows anyone with a computer to access the internet, for free.
For the past few years, he’s been quietly working on a project called Solid with a small team at the Massachusetts Institute of Technology. Solid is an open-source project built on the existing web meant to give people control over their own data. Using Solid, users can keep their data wherever they choose, rather than being forced to store it on centralized servers.
The world we’ve created on the web [is] not the right one. — John Bruce, co-founder of inrupt.
Despite its populist ambitions, Solid had failed to garner the momentum necessary to truly disrupt the web.
Berners-Lee realized Solid needed commercial backing, a real business behind it to earn the interests of open-source developers who have to build decentralized apps on the Solid platform for it to be useful.
Thus, inrupt was born. Berners-Lee tapped John Bruce, a fellow British engineer and serial entrepreneur, to lead the company as its chief executive officer. Most recently, Bruce co-founded Resilient, an incident response platform later acquired by IBM. Before that, he was the chairman and CEO of Quickcomm and the vice president of Symantec.
Bruce resigned from IBM in April to focus on inrupt full time.
“The world we’ve created on the web [is] not the right one,” Bruce told TechCrunch. “Maybe, just maybe, we can put it in the place it was originally intended to be.”
“Inrupt’s mission, at this point, is to bring resources, process and skills to galvanize the open-source effort that Tim was leading out of MIT to help [Solid] become, truly, a force to be reckoned with,” he added. “We are at the stage of the new web that Tim was at when he first started the World Wide Web.”
Bruce says that since Berners-Lee announced inrupt in late September, open-source developers have poured into the Solid platform in droves.
Now, the pair are gearing up to raise another round of funding, hire, expand the Solid platform and work on a digital assistant tool called Charlie, which the company describes as a “decentralized version of Alexa.”
For Berners-Lee, inrupt is Act II of a much larger story. For Bruce, it’s the opportunity to work with a legend.
“This is a man that understands the web truly better than anyone else on the planet,” Bruce said. “And the wheels of innovation have really just started to turn.”
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