May
03
2021
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Dell dumps another big asset, moving Boomi to Francisco Partners and TPG for $4B

It’s widely known that Dell has a debt problem left over from its massive acquisition of EMC in 2016, and it seems to be moving this year to eliminate part of it in multi-billion-dollar chunks. The first step was spinning out VMware as a separate company last month, a move expected to net close to $10 billion.

The second step, long expected, finally dropped last night when the company announced it was selling Boomi to a couple of private equity firms for $4 billion. Francisco Partners is joining forces with TPG to make the deal to buy the integration platform.

Boomi is not unlike MuleSoft, a company that Salesforce purchased in 2018 for $6.5 billion, although a bit longer in the tooth. They both help companies with integration problems by creating connections between disparate systems. With so many pieces in place from various acquisitions over the years, it seems like a highly useful asset for Dell to help pull these pieces together and make them work, but the cash is trumping that need.

Providing integration services is a growing requirement as companies look for ways to make better use of data locked in siloed systems. Boomi could help, and that’s one of the primary reasons for the acquisition, according to Francisco executives.

“The ability to integrate and connect data and workflows across any combination of applications or domains is a critical business capability, and we strongly believe that Boomi is well positioned to help companies of all sizes turn data into their most valuable asset,” Francisco CEO Dipanjan Deb and partner Brian Decker said in a statement.

As you would expect, Boomi’s CEO Chris McNabb put a positive spin on the deal about how his new bosses were going to fuel growth for his company. “By partnering with two tier-one investment firms like Francisco Partners and TPG, we can accelerate our ability for our customers to use data to drive competitive advantage. In this next phase of growth, Boomi will be in a position of strength to further advance our innovation and market trajectory while delivering even more value to our customers,” McNabb said in a statement.

All of this may have some truth to it, but the company goes from being part of a large amorphous corporation to getting absorbed in the machinery of two private equity firms. What happens next is hard to say.

The company was founded in 2000, and sold to Dell in 2010. Today, it has 15,000 customer, but Dell’s debt has been well documented, and when you string together a couple of multi-billion-dollar deals as Dell has recently, pretty soon you’re talking real money. While the company has not stated it will explicitly use the proceeds of this deal to pay off debt as it did with the VMware announcement, it stands to reason that this will be the case.

The deal is expected to close later this year, although it will have to pass the typical regulatory scrutiny prior to that.

Apr
27
2021
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Vista Equity takes minority stake in Canada’s Vena with $242M investment

Vena, a Canadian company focused on the Corporate Performance Management (CPM) software space, has raised $242 million in Series C funding from Vista Equity Partners.

As part of the financing, Vista Equity is taking a minority stake in the company. The round follows $25 million in financing from CIBC Innovation Banking last September, and brings Vena’s total raised since its 2011 inception to over $363 million.

Vena declined to provide any financial metrics or the valuation at which the new capital was raised, saying only that its “consistent growth and…strong customer retention and satisfaction metrics created real demand” as it considered raising its C round.

The company was originally founded as a B2B provider of planning, budgeting and forecasting software. Over time, it’s evolved into what it describes as a “fully cloud-native, corporate performance management platform” that aims to empower finance, operations and business leaders to “Plan to Growtheir businesses. Its customers hail from a variety of industries, including banking, SaaS, manufacturing, healthcare, insurance and higher education. Among its over 900 customers are the Kansas City Chiefs, Coca-Cola Consolidated, World Vision International and ELF Cosmetics.

Vena CEO Hunter Madeley told TechCrunch the latest raise is “mostly an acceleration story for Vena, rather than charting new paths.”

The company plans to use its new funds to build out and enable its go-to-market efforts as well as invest in its product development roadmap. It’s not really looking to enter new markets, considering it’s seeing what it describes as “tremendous demand” in the markets it currently serves directly and through its partner network.

“While we support customers across the globe, we’ll stay focused on growing our North American, U.K. and European business in the near term,” Madeley said.

Vena says it leverages the “flexibility and familiarity” of an Excel interface within its “secure” Complete Planning platform. That platform, it adds, brings people, processes and systems into a single source solution to help organizations automate and streamline finance-led processes, accelerate complex business processes and “connect the dots between departments and plan with the power of unified data.”            

Early backers JMI Equity and Centana Growth Partners will remain active, partnering with Vista “to help support Vena’s continued momentum,” the company said. As part of the raise, Vista Equity Managing Director Kim Eaton and Marc Teillon, senior managing director and co-head of Vista’s Foundation Fund, will join the company’s board.

“The pandemic has emphasized the need for agile financial planning processes as companies respond to quickly-changing market conditions, and Vena is uniquely positioned to help businesses address the challenges required to scale their processes through this pandemic and beyond,” said Eaton in a written statement. 

Vena currently has more than 450 employees across the U.S., Canada and the U.K., up from 393 last year at this time.

Apr
22
2021
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With $30M extension, BigID boosts Series D to $100M at $1.25B valuation

When we last heard from BigID at the end of 2020, the company was announcing a $70 million Series D at a $1 billion valuation. Today, it announced a $30 million extension on that deal valuing the company at $1.25 billion just 4 months later.

This chunk of money comes from private equity firm Advent International, and brings the total raised to over $200 million across 4 rounds, according to the company. The late stage startup is attracting all of this capital by building a security and privacy platform. When I spoke to CEO Dimitri Sirota in September 2019 at the time of the $50 million Series C, he described the company’s direction this way:

“We’ve separated the product into some constituent parts. While it’s still sold as a broad-based [privacy and security] solution, it’s much more of a platform now in the sense that there’s a core set of capabilities that we heard over and over that customers want.”

Sirota says he has been putting the money to work, and as the economy improves he is seeing more traction for the product set. “Since December, we’ve added employees as we’ve seen broader economic recovery and increased demand. In tandem, we have been busy building a whole host of new products and offerings that we will announce over the coming weeks that will be transformational for BigID,” he said.

He also said that as with previous rounds, he didn’t go looking for the additional money, but decided to take advantage of the new funds at a higher valuation with a firm that he believes can add value overall. What’s more, the funds should allow the company to expand in ways it might have held off on.

“It was important to us that this wouldn’t be a distraction and that we could balance any funding without the need to over-capitalize, which is becoming a bigger issue in today’s environment. In the end, we took what we thought could bring forward some additional product modules and add a sales team focused on smaller commercial accounts,” Sirota said.

Ashwin Krishnan, a principal on Advent’s technology team in New York says that BigID was clearly aligned with two trends his firm has been following. That includes the explosion of data being collected and the increasing focus on managing and securing that data with the goal of ultimately using it to make better decisions.

“When we met with Dimitri and the BigID team, we immediately knew we had found a company with a powerful platform that solves the most challenging problem at the center of these trends and the data question,”Krishnan said.

Past investors in the company include Boldstart Ventures, Bessemer Venture Partners and Tiger Global. Strategic investors include Comcast Ventures, Salesforce Ventures and SAP.io.

Apr
20
2021
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Announcing our TC Sessions: SaaS virtual event happening October 27

Software-as-a-Service (SaaS) is now the default business model for most B2B and B2C software startups. And while it’s been around for a while now, its momentum keeps accelerating and the ecosystem continues to expand as technologists and marketers are getting more sophisticated about how to build and sell SaaS products. For all of them, we’re pleased to announced TechCrunch Sessions: SaaS 2021, a one-day virtual event that will examine the state of SaaS to help startup founders, developers and investors understand the state of play and what’s next.

The single-day event will take place 100% virtually on October 27 and will feature actionable advice, Q&A with some of SaaS’s biggest names, and plenty of networking opportunities. $75 Early Bird Passes are now on sale. Book your passes today to save $100 before prices go up.

We’re not quite ready to disclose our agenda yet, but you can expect a mix of superstars from across the industry, ranging from some of the largest tech companies to up-and-coming startups that are pushing the limits of SaaS.

The plan is to look at a broad spectrum of what’s happening in with B2B startups and give you actionable insights into how to build and/or improve your own product. If you’re just getting started, we want you to come away with new ideas for how to start your company and if you’re already on your way, then our sessions on scaling both your technology and marketing organization will help you to get to that $100 million annual run rate faster.

In addition to other founders, you’ll also hear from enterprise leaders who decide what to buy — and the mistakes they see startups make when they try to sell to them.

But SaaS isn’t only about managing growth — though ideally, that’s a problem founders will face sooner or later. Some of the other specific topics we will look at are how to keep your services safe in an ever-growing threat environment, how to use open source to your advantage and how to smartly raise funding for your company.

We will also highlight how B2B and B2C companies can handle the glut of data they now produce and use it to build machine learning models in the process. We’ll talk about how SaaS startups can both do so themselves and help others in the process. There’s nary a startup that doesn’t want to use some form of AI these days, after all.

And because this is 2021, chances are we’ll also talk about building remote companies and the lessons SaaS startups can learn from the last year of working through the pandemic.

Don’t miss out. Book your $75 Early Bird pass today and save $100.


Apr
08
2021
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Industry experts bullish on $500M KKR investment in Box, but stock market remains skeptical

When Box announced it was getting a $500 million investment from private equity firm KKR this morning, it was hard not to see it as a positive move for the company. It has been operating under the shadow of Starboard Value, and this influx of cash could give it a way forward independent of the activist investors.

Industry experts we spoke to were all optimistic about the deal, seeing it as a way for the company to regain control, while giving it a bushel of cash to make some moves. However, early returns from the stock market were not as upbeat as the stock price was plunging this morning.

Alan Pelz-Sharpe, principal analyst at Deep Analysis, a firm that follows the content management market closely, says that it’s a significant move for Box and opens up a path to expanding through acquisition.

“The KKR move is probably the most important strategic move Box has made since it IPO’d. KKR doesn’t just bring a lot of money to the deal, it gives Box the ability to shake off some naysayers and invest in further acquisitions,” Pelz-Sharpe told me, adding “Box is no longer a startup its a rapidly maturing company and organic growth will only take you so far. Inorganic growth is what will take Box to the next level.”

Dion Hinchcliffe, an analyst at Constellation Research, who covers the work from home trend and the digital workplace, sees it similarly, saying the investment allows the company to focus longer term again.

“Box very much needs to expand in new markets beyond its increasingly commoditized core business. The KKR investment will give them the opportunity to realize loftier ambitions long term so they can turn their established market presence into a growth story,” he said.

Pelz-Sharpe says that it also changes the power dynamic after a couple of years of having Starboard pushing the direction of the company.

“In short, as a public company there are investors who want a quick flip and others that want to grow this company substantially before an exit. This move with KKR potentially changes the dynamic at Box and may well put Aaron Levie back in the driver’s seat.”

Josh Stein, a partner at DFJ and early investor in Box, who was a long time board member, says that it shows that Box is moving in the right direction.

“I think it makes a ton of sense. Management has done a great job growing the business and taking it to profitability. With KKR’s new investment, you have two of the top technology investors in the world putting significant capital into going long on Box,” Stein said.

Perhaps Stein’s optimism is warranted. In its most recent earnings report from last month, the company announced revenue of $198.9 million, up 8% year-over-year with FY2021 revenue closing at $771 million up 11%. What’s more, the company is cash-flow positive, and has predicted an optimistic future outlook.

“As previously announced, Box is committed to achieving a revenue growth rate between 12-16%, with operating margins of between 23-27%, by fiscal 2024,” the company reiterated in a statement this morning.

Investors remains skeptical, however, with the company stock price getting hammered this morning. As of publication the share price was down over 9%. At this point, market investors may be waiting for the next earnings report to see if the company is headed in the right direction. For now, the $500 million certainly gives the company options, regardless of what Wall Street thinks in the short term.

Apr
08
2021
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KKR hands Box a $500M lifeline

Box announced this morning that private equity firm KKR is investing $500 million in the company, a move that could help the struggling cloud content management vendor get out from under pressure from activist investor Starboard Value.

The company plans to use the proceeds in what’s called a “Dutch auction” style sale to buy back shares from certain investors for the price determined by the auction, an activity that should take place after the company announces its next earnings report in May. This would presumably involve buying out Starboard, which took a 7.5% stake in the company in 2019.

Last month Reuters reported that Starboard could be looking to take over a majority of the board seats when the company board meets in June. That could have set them up to take some action, most likely forcing a sale.

While it’s not clear what will happen now, it seems likely that with this cash, they will be able to stave off action from Starboard, and with KKR in the picture be able to take a longer-term view. Box CEO Aaron Levie sees the move as a vote of confidence from KKR in Box’s approach.

“KKR is one of the world’s leading technology investors with a deep understanding of our market and a proven track record of partnering successfully with companies to create value and drive growth. With their support, we will be even better positioned to build on Box’s leadership in cloud content management as we continue to deliver value for our customers around the world,” Levie said in a statement.

Under the terms of the deal, John Park, head of Americas Technology Private Equity at KKR, will be joining the Box board of directors. The company also announced that independent board member Bethany Mayer will be appointed chairman of the board, effective on May 1st.

Earlier this year, the company bought e-signature startup SignRequest, which could help open up a new set of workflows for the company as it tries to expand its market. With KKR’s backing, it’s not unreasonable to expect that Box, which is cash flow positive, could be taking additional steps to expand the platform in the future.

Box stock was down more than 8% premarket, a signal that perhaps Wall Street isn’t thrilled with the announcement, but the cash influx should give Box some breathing room to reset and push forward.

Mar
22
2021
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Box shares rise on report company is exploring sale

Shares of Box, a well-known content-and-collaboration company that went public in 2015, rose today after Reuters reported that the company is exploring a sale. TechCrunch previously discussed rising investor pressure for Box to ignite its share-price after years in the public-market wilderness.

At the close today Box’s equity was worth $23.65 per share, up around 5% from its opening value, but lower than its intraday peak of $26.47, reached after the news broke. The company went public a little over five years ago at $14 per share, only to see its share price rise to around the same level it returned today during its first day’s trading.

Box, famous during its startup phase thanks in part to its ubiquitous CEO and co-founder Aaron Levie, has continued to grow while public, albeit at a declining pace. Dropbox, a long-term rival, has also seen its growth rate decline since going public. Both have stressed rising profitability over revenue expansion in recent quarters.

But the problem that Box has encountered while public, namely hyper-scale platform companies with competing offerings, could also prove a lifeline; Google and Microsoft could be a future home for Levie’s company, after years of the duo challenging Box for deals.

As recently as last week, Box announced a deal for tighter integration with Microsoft Office 365. Given the timing of the release, it was easy to speculate the news could be landing ahead of a potential deal. The Reuters article adds fuel to the possibility.

While we can’t know for sure if the Reuters article is accurate, the possible sale of Box makes sense.

The article indicated that one of the possible acquisition options for Box could be taking it private again via private equity. Perhaps a firm like Vista or Thoma Bravo, two firms that tend to like mature SaaS companies with decent revenue and some issues, could swoop in to buy the struggling SaaS company. By taking companies off the market, reducing investor pressure and giving them room to maneuver, software companies can at times find new vigor.

Consider the case of Marketo, a company that Vista purchased in 2016 for $1.6 billion before turning it around and selling to Adobe in 2018 for $4.75 billion. The end result generated a strong profit for Vista, and a final landing for Marketo as part of a company with a broader platform of marketing tools.

If there are expenses at Box that could be trimmed, or a sales process that could be improved is not clear. But Box’s market value of $3.78 billion could put it within grasp of larger private-equity funds. Or well within the reaches of a host of larger enterprise software companies that might covet its list of business customers, technology, or both.

If the rumors are true, it could be a startling fall from grace for the company, moving from Silicon Valley startup-darling to IPO to sold entity in just six years. While it’s important to note these are just rumors, the writing could be on the wall for the company and it could just be a matter of when and not if.

Mar
08
2021
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McAfee sells enterprise biz to Symphony Technology Group for $4B

Security firm McAfee announced this morning that it will be selling its enterprise business to a consortium led by the private equity firm Symphony Technology Group for $4 billion.

It should pair well with RSA, another enterprise-focused security company the private equity firm purchased last February for $2 billion.

McAfee President and Chief Executive Officer Peter Leav says that his company has decided to direct the firm’s resources to the consumer side of the business. “This transaction will allow McAfee to singularly focus on our consumer business and to accelerate our strategy to be a leader in personal security for consumers,” he said in a statement.

The company has been making some moves in the last year, returning to the public markets after a decade as a private company. In January, the company reportedly laid off a couple of hundred employees and shut down its software development center in Tel Aviv.

Although Symphony did not point directly to the RSA acquisition, the two investments create a large combined legacy security business for the firm, both of which have strong brand recognition, but might have lost some of their edge to more modern competitors in the marketplace.

Looking at McAfee’s latest earning’s report, Q42020, which the company reported on February 24, 2021, the consumer business grew at a much brisker rate than the enterprise side of the house. The former was up 23% YoY, while the latter grew at a far slower 5% rate.

As for the entire year, the company reported $2.9 billion in total FY2020 revenue, up 10% YoY. That broke down to $1.6 billion in consumer net revenue up 20% YoY, and $1.3 billion in enterprise net revenue, an increase of just 1% for the full year.

The company has a complex history, starting life in the 1980s selling firewall software. It eventually went public before being purchased by Intel for $7.7 billion in 2010 and going private again. In 2014, the company changed names to Intel Security before Intel sold a majority stake to TPG in 2017 for $4.2 billion and changed the name back to McAfee.

The transaction is expected to close by the end of this year, subject to regulatory oversight.


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Feb
26
2021
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EC roundup: BNPL startups, growth marketing tips, solid state battery market map, more

When I needed a new sofa several months ago, I was pleased to find a buy now, pay later (BNPL) option during the checkout process. I had prepared myself to make a major financial outlay, but the service fees were well worth the convenience of deferring the entire payment.

Coincidentally, I was siting on said sofa this morning and considering that transaction when Alex Wilhelm submitted a column that compared recent earnings for three BNPL providers: Afterpay, Affirm and Klarna.

I asked him why he decided to dig into the sector with such gusto.


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Use discount code ECFriday to save 20% off a one- or two-year subscription.


“What struck me about the concept was that we had just seen earnings from Affirm,” he said. “So we had three BNPL players with known earnings, and I had just covered a startup funding round in the space.”

“Toss in some obvious audience interest, and it was an easy choice to write the piece. Now the question is whether I did a good job and people find value in it.”

Thanks very much for reading Extra Crunch this week! Have a great weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

As BNPL startups raise, a look at Klarna, Affirm and Afterpay earnings

Pilot CEO Waseem Daher tears down his company’s $60M Series C pitch deck

Smashing brick work with hammer

Image Credits: Colin Hawkins (opens in a new window) / Getty Images

I avoid running Extra Crunch stories that focus on best practices; you can find those anywhere. Instead, we look for “here’s what worked for me” articles that give readers actionable insights.

That’s a much better use of your time and ours.

With that ethos in mind, Lucas Matney interviewed Pilot CEO Waseem Daher to deconstruct the pitch deck that helped his company land a $60M Series C round.

“If the Series A was about, ‘Do you have the right ingredients to make this work?’ then the Series B is about, ‘Is this actually working?’” Daher tells TechCrunch.

“And then the Series C is more, ‘Well, show me that the core business is really working and that you have unlocked real drivers to allow the business to continue growing.’”

Can solid state batteries power up for the next generation of EVs?

market-maps-battery-alt

Image Credits: Bryce Durbin

A global survey of automobile owners found three hurdles to overcome before consumers will widely embrace electric vehicles:

  • 30-minute charging time
  • 300-mile range
  • $36,000 maximum cost

“Theoretically, solid state batteries (SSB) could deliver all three,” but for now, lithium-ion batteries are the go-to for most EVs (along with laptops and phones).

In our latest market map, we’ve plotted the new and established players in the SSB sector and listed many of the investors who are backing them.

Although SSBs are years away from mass production, “we are on the cusp of some pretty incredible discoveries using major improvements in computational science and machine learning algorithms to accelerate that process,” says SSB startup founder Amy Prieto.

 

Dear Sophie: Which immigration options are the fastest?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie:

Help! Our startup needs to hire 50 engineers in artificial intelligence and related fields ASAP. Which visa and green card options are the quickest to get for top immigrant engineers?

And will Biden’s new immigration bill help us?

— Mesmerized in Menlo Park

 

Why F5 spent $2.2B on 3 companies to focus on cloud native applications

Dark servers data center room with computers and storage systems

Image Credits: Jasmin Merdan / Getty Images

Founded in 1996, F5 has repositioned itself in the networking market several times in its history. In the last two years, however, it spent $2.2 billion to acquire Shape Security, Volterra and NGINX.

“As large organizations age, they often need to pivot to stay relevant, and I wanted to explore one of these transformational shifts,” said enterprise reporter Ron Miller.

“I spoke to the CEO of F5 to find out the strategy behind his company’s pivot and how he leveraged three acquisitions to push his organization in a new direction.”

 

DigitalOcean’s IPO filing shows a two-class cloud market

Cloud online storage technology concept. Big data data information exchange available. Magnifying glass with analytics data

Image Credits: Who_I_am (opens in a new window) / Getty Images

Cloud hosting company DigitalOcean filed to go public this week, so Ron Miller and Alex Wilhelm unpacked its financials.

“AWS and Microsoft Azure will not be losing too much sleep worrying about DigitalOcean, but it is not trying to compete head-on with them across the full spectrum of cloud infrastructure services,” said John Dinsdale, chief analyst and research director at Synergy Research.

 

Oscar Health’s initial IPO price is so high, it makes me want to swear

I asked Alex Wilhelm to dial back the profanity he used to describe Oscar Health’s proposed valuation, but perhaps I was too conservative.

In March 2018, the insurtech unicorn was valued at around $3.2 billion. Today, with the company aiming to debut at $32 to $34 per share, its fully diluted valuation is closer to $7.7 billion.

“The clear takeaway from the first Oscar Health IPO pricing interval is that public investors have lost their minds,” says Alex.

His advice for companies considering an IPO? “Go public now.”

 

If Coinbase is worth $100 billion, what’s a fair valuation for Stripe?

Last week, Alex wrote about how cryptocurrency trading platform Coinbase was being valued at $77 billion in the private markets.

As of Monday, “it’s now $100 billion, per Axios’ reporting.”

He reviewed Coinbase’s performance from 2019 through the end of Q3 2020 “to decide whether Coinbase at $100 billion makes no sense, a little sense or perfect sense.”

 

Winning enterprise sales teams know how to persuade the Chief Objection Officer

woman hand stop sign on brick wall background

Image Credits: Alla Aramyan (opens in a new window) / Getty Images

A skilled software sales team devotes a lot of resources to pinpointing potential customers.

Poring through LinkedIn and reviewing past speaker lists at industry conferences are good places to find decision-makers, for example.

Despite this detective work, GGV Capital investor Oren Yunger says sales teams still need to identify the deal-blockers who can spike a deal with a single email.

“I call this person the Chief Objection Officer.

 

3 strategies for elevating brand authority in 2021

Young woman standing on top of tall green bar graph against white background

Image Credits: Klaus Vedfelt / Getty Images

Every startup wants to raise its profile, but for many early-stage companies, marketing budgets are too small to make a meaningful difference.

Providing real value through content is an excellent way to build authority in the short and long term,” says Amanda Milligan, marketing director at growth agency Fractl.

 

RIBS: The messaging framework for every company and product

Grilled pork ribs with barbecue sauce on wooden background

Image Credits: luchezar (opens in a new window) / Getty Images

The most effective marketing uses good storytelling, not persuasion.

According to Caryn Marooney, general partner at Coatue Management, every compelling story is relevant, inevitable, believable and simple.

“Behind most successful companies is a story that checks every one of those boxes,” says Marooney, but “this is a central challenge for every startup.”

 

Ironclad’s Jason Boehmig: The objective of pricing is to become less wrong over time

On a recent episode of Extra Crunch Live, Ironclad founder and CEO Jason Boehmig and Accel partner Steve Loughlin discussed the pitch that brought them together almost four years ago.

Since that $8 million Series A, Loughlin joined Ironclad’s board. “Both agree that the work they put in up front had paid off” when it comes to how well they work together, says Jordan Crook.

“We’ve always been up front about the fact that we consider the board a part of the company,” said Boehmig.


TC Early Stage: The premiere how-to event for startup entrepreneurs and investors

From April 1-2, some of the most successful founders and VCs will explain how they build their businesses, raise money and manage their portfolios.

At TC Early Stage, we’ll cover topics like recruiting, sales, legal, PR, marketing and brand building. Each session includes ample time for audience questions and discussion.

Use discount code ECNEWSLETTER to take 20% off the cost of your TC Early Stage ticket!

Jan
29
2021
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Extra Crunch roundup: Edtech VC survey, 5 founder mistakes, fintech liquidity, more

Edtech is so widespread, we already need more consumer-friendly nomenclature to describe the products, services and tools it encompasses.

I know someone who reads stories to their grandchildren on two continents via Zoom each weekend. Is that “edtech?”

Similarly, many Netflix subscribers sought out online chess instructors after watching “The Queen’s Gambit,” but I doubt if they all ran searches for “remote learning” first.

Edtech needs to reach beyond underfunded public school systems to become more sustainable, which is why more investors and founders are focusing on lifelong learning.

Besides serving traditional students with field trips and art classes, a maturing sector is now branching out to offer software tutors, cooking classes and singing lessons.

For our latest investor survey, Natasha Mascarenhas polled 13 edtech VCs to learn more about how “employer-led up-skilling and a renewed interest in self-improvement” is expanding the sector’s TAM.

Here’s who she spoke to:

  • Deborah Quazzo, managing partner, GSV Ventures
  • Ashley Bittner, founding partner, Firework Ventures (a future of work fund with portfolio companies LearnIn and TransfrVR)
  • Jomayra Herrera, principal, Cowboy Ventures (a generalist fund with portfolio companies Hone and Guild Education)
  • John Danner, managing partner, Dunce Capital (an edtech and future of work fund with portfolio companies Lambda School and Outschool)
  • Mercedes Bent and Bradley Twohig, partners, Lightspeed Venture Partners (a multistage generalist fund with investments including Forage, Clever and Outschool)
  • Ian Chiu, managing director, Owl Ventures (a large edtech-focused fund backing highly valued companies including Byju’s, Newsela and Masterclass)
  • Jan Lynn-Matern, founder and partner, Emerge Education (a leading edtech seed fund in Europe with portfolio companies like Aula, Unibuddy and BibliU)
  • Benoit Wirz, partner, Brighteye Ventures (an active edtech-focused venture capital fund in Europe that backs YouSchool, Lightneer and Aula)
  • Charles Birnbaum, partner, Bessemer Venture Partners (a generalist fund with portfolio companies including Guild Education and Brightwheel)
  • Daniel Pianko, co-founder and managing director, University Ventures (a higher ed and future of work fund that is backing Imbellus and Admithub)
  • Rebecca Kaden, managing partner, Union Square Ventures (a generalist fund with portfolio companies including TopHat, Quizlet, Duolingo)
  • Andreata Muforo, partner, TLCom Capital (a generalist fund backing uLesson)

Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription


In other news: Extra Crunch Live, a series of interviews with leading investors and entrepreneurs, returns next month with a full slate of guests. This year, we’re adding a new feature: Our guests will analyze pitch decks submitted by members of the audience to identify their strengths and weaknesses.

If you’d like an expert eye on your deck, please sign up for Extra Crunch and join the conversation.

Thanks very much for reading! I hope you have a fantastic weekend — we’ve all earned it.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

13 investors say lifelong learning is taking edtech mainstream

Image Credits: Bryce Durbin

Rising African venture investment powers fintech, clean tech bets in 2020

After falling into yesterday’s wild news cycle, Alex Wilhelm returned to The Exchange this morning with a close look at venture capital activity across Africa in 2020.

“Comparing aggregate 2020 figures to 2019 results, it appears that last year was a somewhat robust year for African startups, albeit one with fewer large rounds,” he found.

For more context, he interviewed Dario Giuliani, the director of research firm Briter Bridges, which focuses on emerging markets in Africa, Asia and Latin America.

Talent and capital are shifting cybersecurity investors’ focus away from Silicon Valley

A road sign that says "Leaving California."

Image Credits: MCCAIG (opens in a new window) / Getty Images

New cybersecurity ecosystems are popping up in different parts of the world.

Some of of that growth has been fueled by an exodus from the Bay Area, but many early-stage security startups already have deep roots in East Coast cities like Boston and New York.

In the United Kingdom and Europe, government innovation programs have helped entrepreneurs close higher numbers of Series A and B rounds.

Investor interest and expertise is migrating out of Silicon Valley: This post will help you understand where it’s going.

Will Apple’s spectacular iPhone 12 sales figures boost the smartphone industry in 2021?

On Wednesday, 20 January, 2021, in Dublin, Ireland. (Photo by Artur Widak/NurPhoto via Getty Images)

Image Credits: NurPhoto (opens in a new window) / Getty Images

Today’s smartphones are unfathomably feature-rich and durable, so it’s logical that sales have slowed.

A phone purchased 18 months ago is probably “good enough” for many consumers, especially in times of economic uncertainty.

Then again, of the record $111.4 billion in revenue Apple earned last quarter, $65.68 billion came from phone sales, largely driven by the release of the iPhone 12.

Even though “Apple’s success this quarter was kind of a perfect storm,” writes Hardware Editor Brian Heater, “it’s safe to project a rebound for the industry at large in 2021.”

The 5 biggest mistakes I made as a first-time startup founder

Boy Standing with Dropped Ice Cream Cone

Image Credits: Randy Faris (opens in a new window) / Getty Images

Finmark co-founder and CEO Rami Essaid wrote a post for Extra Crunch that candidly describes the traps he laid for himself that made him a less-effective entrepreneur.

As someone who’s worked closely with founders at several startups, each of the points he raised resonated deeply with me.

In my experience, many founders have a hard time delegating, which can quickly create cultural and operational problems. Rami’s experience bears this out:

“I became a human GPS: People could follow my directions, but they struggled to find the way themselves. Independent thinking suffered.”

Dear Sophie: How can I sponsor my mom and stepdad for green cards?

lone figure at entrance to maze hedge that has an American flag at the center

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie:

I just got my U.S. citizenship! My husband and I want to bring my mom and her husband to the U.S. to help us take care of our preschooler and toddler.

My biological dad passed away several years ago when I was an adult and my mom has since remarried.

Can they get green cards?

— Appreciative in Aptos

Check out the amazing speakers joining us on Extra Crunch Live in February

Extra Crunch Live February Schedule: February 3 Gaurav Gupta Lightspeed Venture Partners Raj Dutt Grafana Labs February 10 Aydin Senkut Felicis Kevin Busque Guideline February 17 Steve Loughlin Accel Jason Boehmig Ironclad February 24 Matt Harris Bain Capital Isaac Oates Justworks

Next month, Extra Crunch Live returns with a lineup of guests who are extremely well-qualified to discuss early-stage startups.

Each Wednesday at noon PPST/3 p.m. EST, join a conversation with founders and the investors who backed their companies:

February 3:

Gaurav Gupta (Lightspeed Venture Partners) + Raj Dutt (Grafana Labs)

February 10:

Aydin Senkut (Felicis Ventures) + Kevin Busque (Guideline)

February 17:

Steve Loughlin (Accel) + Jason Boehmig (Ironclad)

February 24:

Matt Harris (Bain Capital) + Isaac Oates (Justworks)

Also, we’re adding a new feature to Extra Crunch Live — our guests will offer advice and feedback on pitch decks submitted by Extra Crunch members in the audience!

10 VCs say interactivity, regulation and independent creators will reshape digital media in 2021

Photo of a young woman watching TV in the bedroom of her apartment; eating sushi and enjoying her night at home alone.

Image Credits: Aleksandar Nakic (opens in a new window) / Getty Images

Since the pandemic disrupted the social rhythms of work and school, many of us have compensated by changing our relationship to digital media.

For instance, I purchased a new sofa and thicker living room curtains several months ago when I realized we have no idea when movie theaters will reopen.

Last year, podcast sponsors spent almost $800 million to reach listeners, but ad revenue is estimated to surpass $1 billion this year. Clearly, I’m not the only person who used a discount code to buy a new product in 2020.

At this point, I can scarcely keep track of the multiple streaming platforms I’m subscribed to, but a new voice-activated remote control that comes with my basic cable plan makes it easier to browse my options.

Media reporter Anthony Ha spoke to10 VCs who invest in media startups to learn more about where they see digital media heading in the months ahead. For starters, how much longer can we expect traditional advertising models to persist?

And in a world with hundreds of channels, how are creators supposed to compete for our attention? What sort of discovery tools can we expect to help us navigate between a police procedural set in a Scandinavian village and a 90s sitcom reboot?

Here’s who Anthony interviewed:

  • Daniel Gulati, founding partner, Forecast Fund
  • Alex Gurevich, managing director, Javelin Venture Partners
  • Matthew Hartman, partner, Betaworks Ventures
  • Jerry Lu, senior associate, Maveron
  • Jana Messerschmidt, partner, Lightspeed Venture Partners
  • Michael Palank, general partner, MaC Venture Capital (with additional commentary from MaC’s Marlon Nichols)
  • Pär-Jörgen Pärson, general partner, Northzone
  • M.G. Siegler, general partner, GV
  • Laurel Touby, managing director, Supernode Ventures
  • Hans Tung, managing partner, GGV Capital

Normally, we list each investor’s responses separately, but for this survey, we grouped their responses by question. Some readers say they use our surveys to study up on an individual VC before pitching them, so let us know which format you prefer.

Does a $27 billion or $29 billion valuation make sense for Databricks?

Data analytics platform Databricks is reportedly raising new capital that could value the company between $27 billion and $29 billion.

By the end of Q3 2020, Databricks had surpassed a $350 million run rate — a $150 million YoY increase, reports Alex Wilhelm.

At the time, he described the company as “an obvious IPO candidate” with “broad private-market options.”

Which begs the question: “Can we come up with a set of numbers that help make sense of Databricks at $27 billion?”

End-to-end operators are the next generation of consumer business

Tourist route to the top of the mountain. Rope bridge in the clouds. Crimea. Ai-Petri

Image Credits: Natalia Timchenko (opens in a new window) / Getty Images

Rapid shifts in the way we buy goods and services disrupted old-school marketplaces like local newspapers and the Yellow Pages.

Today, I can use my phone to summon a plumber, a week’s worth of groceries or a ride to a doctor’s office.

End-to-end operators like Netflix, Peloton and Lemonade take a lot of time and energy to reach scale, but “the additional capital required is often outweighed by the value captured from owning the entire experience.”

Unpacking Chamath Palihapitiya’s SPAC deals for Latch and Sunlight Financial

On January 25, Social Capital CEO Chamath Palihapitiya tweeted that he was making two blank-check deals.

Enterprise SaaS company Latch makes keyless entry systems; Sunlight Financial helps consumers finance residential solar power installations.

“There are nearly 300 SPACs in the market today looking for deals,” noted Alex Wilhelm, who unpacked both transactions.

“There’s no escaping SPACs for a bit, so if you are tired of watching blind pools rip private companies into the public markets, you are not going to have a very good next few months.”

Fintechs could see $100 billion of liquidity in 2021

Long exposure spillway shines water and light. Copy space.

Image Credits: dan tarradellas (opens in a new window) / Getty Images

On Monday, we published the Matrix Fintech Index, a three-part study that weighs liquidity, public markets and e-commerce trends to create a snapshot of an industry in perpetual flux.

For four years running, the S&P 500 and incumbent financial services companies have been outperformed by companies like Afterpay, Square and Bill.com.

In light of steady VC investment, increasing consumer adoption and a crowded IPO pipeline, “fintech represents one of the most exciting major innovation cycles of this decade.”

Drupal’s journey from dorm-room project to billion-dollar exit

Dries Buytaert, co-founder and CTO at Acquia

Image Credits: Acquia

On January 15, 2001, then-college student Dries Buytaert released Drupal 1.0.0, an open-source content-management platform. At the time, about 7% of the world’s population was online.

After raising more than $180 million, Buytaert exited to Vista Equity Partners for $1 billion in 2019.

Enterprise reporter Ron Miller interviewed Buytaert to learn more about his 18-year journey.

“His story is compelling, but it also offers lessons for startup founders who also want to build something big,” says Ron.

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