Extra Crunch roundup: A fistful of IPOs, Affirm’s Peloton problem, Zoom Apps and more

DoorDash, Affirm, Roblox, Airbnb, C3.ai and Wish all filed to go public in recent days, which means some venture capitalists are having the best week of their lives.

Tech companies that go public capture our imagination because they are literal happy endings. An Initial Public Offering is the promised land for startup pilgrims who may wander the desert for years seeking product-market fit. After all, the “I” in “ISO” stands for “incentive.”

A flurry of new S-1s in a single week forced me to rearrange our editorial calendar, but I didn’t mind; our 360-degree coverage let some of the air out of various hype balloons and uncovered several unique angles.

For example: I was familiar with Affirm, the service that lets consumers finance purchases, but I had no idea Peloton accounted for 30% of its total revenue in the last quarter.

“What happens if Peloton puts on the brakes?” I asked Alex Wilhelm as I edited his breakdown of Affirm’s S-1. We decided to use that as the subhead for his analysis.

The stories that follow are an overview of Extra Crunch from the last five days. Full articles are only available to members, but you can use discount code ECFriday to save 20% off a one or two-year subscription. Details here.

Thank you very much for reading Extra Crunch this week; I hope you have a relaxing weekend.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


What is Roblox worth?

Gaming company Roblox filed to go public yesterday afternoon, so Alex Wilhelm brought out a scalpel and dissected its S-1. Using his patented mathmagic, he analyzed Roblox’s fundraising history and reported revenue to estimate where its valuation might land.

Noting that “the public markets appear to be even more risk-on than the private world in 2020,” Alex pegged the number at “just a hair under $10 billion.”

What China’s fintech can teach the world

Alibaba Employees Pay For Meals With Face Recognition System

HANGZHOU, CHINA – JULY 31: An employee uses face recognition system on a self-service check-out machine to pay for her meals in a canteen at the headquarters of Alibaba Group on July 31, 2018 in Hangzhou, Zhejiang Province of China. The self-service check-out machine can calculate the price of meals quickly to save employees’ queuing time. (Photo by Visual China Group via Getty Images)

For all the hype about new forms of payment, the way I transact hasn’t been radically transformed in recent years — even in tech-centric San Francisco.

Sure, I use NFC card readers to tap and pay and tipped a street musician using Venmo last weekend. But my landlord still demands paper checks and there’s a tattered “CASH ONLY” taped to the register at my closest coffee shop.

In China, it’s a different story: Alibaba’s employee cafeteria uses facial recognition and AI to determine which foods a worker has selected and who to charge. Many consumers there use the same app to pay for utility bills, movie tickets and hamburgers.

“Today, nobody except Chinese people outside of China uses Alipay or WeChat Pay to pay for anything,” says finance researcher Martin Chorzempa. “So that’s a big unexplored side that I think is going to come into a lot of geopolitical risks.”

Inside Affirm’s IPO filing: A look at its economics, profits and revenue concentration

Consumer lending service Affirm filed to go public on Wednesday evening, so Alex used Thursday’s column to unpack the company’s financials.

After reviewing Affirm’s profitability, revenue and the impact of COVID-19 on its bottom line, he asked (and answered) three questions:

  • What does Affirm’s loss rate on consumer loans look like?
  • Are its gross margins improving?
  • What does the unicorn have to say about contribution profit from its loans business?

If you didn’t make $1B this week, you are not doing VC right

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

“The only thing more rare than a unicorn is an exited unicorn,” observes Managing Editor Danny Crichton, who looked back at Exitpalooza 2020 to answer “a simple question — who made the money?”

Covering each exit from the perspective of founders and investors, Danny makes it clear who’ll take home the largest slice of each pie. TL;DR? “Some really colossal winners among founders, and several venture firms walking home with billions of dollars in capital.

5 questions from Airbnb’s IPO filing

The S-1 Airbnb released at the start of the week provided insight into the home-rental platform’s core financials, but it also raised several questions about the company’s health and long-term viability, according to Alex Wilhelm:

  • How far did Airbnb’s bookings fall during Q1 and Q2?
  • How far have Airbnb’s bookings come back since?
  • Did local, long-term stays save Airbnb?
  • Has Airbnb ever really made money?
  • Is the company wealthy despite the pandemic?

Autodesk CEO Andrew Anagnost explains the strategy behind acquiring Spacemaker

Andrew Anagnost, President and CEO, Autodesk.

Andrew Anagnost, president and CEO, Autodesk.

Earlier this week, Autodesk announced its purchase of Spacemaker, a Norwegian firm that develops AI-supported software for urban development.

TechCrunch reporter Steve O’Hear interviewed Autodesk CEO Andrew Anagnost to learn more about the acquisition and asked why Autodesk paid $240 million for Spacemaker’s 115-person team and IP — especially when there were other startups closer to its Bay Area HQ.

“They’ve built a real, practical, usable application that helps a segment of our population use machine learning to really create better outcomes in a critical area, which is urban redevelopment and development,” said Anagnost.

“So it’s totally aligned with what we’re trying to do.”

Unpacking the C3.ai IPO filing

On Monday, Alex dove into the IPO filing for enterprise artificial intelligence company C3.ai.

After poring over its ownership structure, service offerings and its last two years of revenue, he asks and answers the question: “is the business itself any damn good?”

Is the internet advertising economy about to implode?

Image Credits: jayk7 / Getty Images

In his new book, “Subprime Attention Crisis,” writer/researcher Tim Hwang attempts to answer a question I’ve wondered about for years: does advertising actually work?

Managing Editor Danny Crichton interviewed Hwang to learn more about his thesis that there are parallels between today’s ad industry and the subprime mortgage crisis that helped spur the Great Recession.

So, are online ads effective?

“I think the companies are very reticent to give up the data that would allow you to find a really definitive answer to that question,” says Hwang.

Will Zoom Apps be the next hot startup platform?

Logos of companies in the Zoom Apps marketplace

Image Credits: Zoom

Even after much of the population has been vaccinated against COVID-19, we will still be using Zoom’s video-conferencing platform in great numbers.

That’s because Zoom isn’t just an app: it’s also a platform play for startups that add functionality using APIs, an SDK or chatbots that behave like smart assistants.

Enterprise reporter Ron Miller spoke to entrepreneurs and investors who are leveraging Zoom’s platform to build new applications with an eye on the future.

“By offering a platform to build applications that take advantage of the meeting software, it’s possible it could be a valuable new ecosystem for startups,” says Ron.

Will edtech empower or erase the need for higher education?

Image Credits: Bryce Durbin

Without an on-campus experience, many students (and their parents) are wondering how much value there is in attending classes via a laptop in a dormitory.

Even worse: Declining enrollment is leading many institutions to eliminate majors and find other ways to cut costs, like furloughing staff and cutting athletic programs.

Edtech solutions could fill the gap, but there’s no real consensus in higher education over which tools work best. Many colleges and universities are using a number of “third-party solutions to keep operations afloat,” reports Natasha Mascarenhas.

“It’s a stress test that could lead to a reckoning among edtech startups.”

3 growth tactics that helped us surpass Noom and Weight Watchers

3D rendering of TNT dynamite sticks in carton box on blue background. Explosive supplies. Dangerous cargo. Plotting terrorist attack. Image Credits: Gearstd / Getty Images.

I look for guest-written Extra Crunch stories that will help other entrepreneurs be more successful, which is why I routinely turn down submissions that seem overly promotional.

However, Henrik Torstensson (CEO and co-founder of Lifesum) submitted a post about the techniques he’s used to scale his nutrition app over the last three years. “It’s a strategy any startup can use, regardless of size or budget,” he writes.

According to Sensor Tower, Lifesum is growing almost twice as fast as Noon and Weight Watchers, so putting his company at the center of the story made sense.

Send in reviews of your favorite books for TechCrunch!

Image via Getty Images / Alexander Spatari

Every year, we ask TechCrunch reporters, VCs and our Extra Crunch readers to recommend their favorite books.

Have you read a book this year that you want to recommend? Send an email with the title and a brief explanation of why you enjoyed it to bookclub@techcrunch.com.

We’ll compile the suggestions and publish the list as we get closer to the holidays. These books don’t have to be published this calendar year — any book you read this year qualifies.

Please share your submissions by November 30.

Dear Sophie: Can an H-1B co-founder own a Delaware C Corp?

Image Credits: Sophie Alcorn

Dear Sophie:

My VC partner and I are working with 50/50 co-founders on their startup — let’s call it “NewCo.” We’re exploring pre-seed terms.

One founder is on a green card and already works there. The other founder is from India and is working on an H-1B at a large tech company.

Can the H-1B co-founder lead this company? What’s the timing to get everything squared away? If we make the investment we want them to hit the ground running.

— Diligent in Daly City

#affirm, #airbnb, #doordash, #entrepreneurship, #fundings-exits, #gaming, #roblox, #startups, #tc, #venture-capital, #wish

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If you didn’t make $1B this week, you are not doing VC right

The only thing more rare than a unicorn is an exited unicorn.

At TechCrunch, we cover a lot of startup financings, but we rarely get the opportunity to cover exits. This week was an exception though, as it was exitpalooza as Affirm, Roblox, Airbnb, and Wish all filed to go public. With DoorDash’s IPO filing last week, this is upwards of $100 billion in potential float heading to the public markets as we make our way to the end of a tumultuous 2020.

All those exits raise a simple question – who made the money? Which VCs got in early on some of the biggest startups of the decade? Who is going to be buying a new yacht for the family for the holidays (or, like, a fancy yurt for when Burning Man restarts)? The good news is that the wealth is being spread around at least a couple of VC firms, although there are definitely a handful of partners who are looking at a very, very nice check in the mail compared to others.

So let’s dive in.

I’ve covered DoorDash’s and Airbnb’s investor returns in-depth, so if you want to know more about those individual returns, feel free to check those analyses out. But let’s take a more panoramic perspective of the returns of these five companies as a whole.
First, let’s take a look at the founders. These are among the very best startups ever built, and therefore, unsurprisingly, the founders all did pretty well for themselves. But there are pretty wide variations that are interesting to note.

First, Airbnb — by far — has the best return profile for its founders. Brian Chesky, Nathan Blecharczyk, and Joe Gebbia together own nearly 42% of their company at IPO, and that’s after raising billions in venture capital. The reason for their success is simple: Airbnb may have had some tough early innings when it was just getting started, but once it did, its valuation just skyrocketed. That helped to limit dilution in its earlier growth rounds, and ultimately protected their ownership in the company.

David Baszucki of Roblox and Peter Szulczewski of Wish both did well: they own 12% and about 19% of their companies, respectively. Szulczewski’s co-founder Sheng “Danny” Zhang, who is Wish’s CTO, owns 4.9%. Eric Cassel, the co-founder of Roblox, did not disclose ownership in the company’s S-1 filing, indicating that he doesn’t own greater than 5% (the SEC’s reporting threshold).

DoorDash’s founders own a bit less of their company, mostly owing to the money-gobbling nature of that business and the sheer number of co-founders of the company. CEO Tony Xu owns 5.2% while his two co-founders Andy Fang and Stanley Tang each have 4.7%. A fourth co-founder Evan Moore didn’t disclose his share totals in the company’s filing.

Finally, we have Affirm . Affirm didn’t provide total share counts for the company, so it’s hard right now to get a full ownership picture. It’s also particularly hard because Max Levchin, who founded Affirm, was a well-known, multi-time entrepreneur who had a unique shareholder structure from the beginning (many of the venture firms on the cap table actually have equal proportions of common and preferred shares). Levchin has more shares all together than any of his individual VC investors — 27.5 million shares, compared to the second largest investor, Jasmine Ventures (a unit of Singapore’s GIC) at 22 million shares.

#affirm, #airbnb, #altos-ventures, #brian-chesky, #doordash, #entrepreneurship, #founders-fund, #roblox, #softbank-vision-fund, #startups, #venture-capital

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Inside Affirm’s IPO filing: A look at its economics, profits and revenue concentration

Last night Affirm filed to go public, herding yet another unicorn into the end-of-year IPO corral. The consumer installment lending service joins DoorDash and Airbnb in filing recently, as a number of highly valued, venture-backed private companies look to float while the public markets are more interested in growth than profits.

TechCrunch took an initial dive into Affirm’s numbers yesterday, so if you need a broad overview, please head here.

This morning we’re going deeper into the company’s economics, profitability and the impact of COVID-19 on its business. The last element of our investigation involves Peloton and the historical examples of Twilio and Fastly, so it should be fun.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Affirm is a company that TechCrunch has long tracked. I was assigned an interview with founder Max Levchin at Disrupt 2014, giving me a reason to pay extra attention to the company over the last six years. This S-1 has been a long time coming.

But is Affirm another pandemic-fueled company going public on the back of a COVID-19 bump, or are its business prospects more durable?

Let’s get into the numbers.

Economics

First, let’s discuss Affirm’s core economics. I want to know three things:

  • What does Affirm’s loss rate on consumer loans look like?
  • Are its gross margins improving?
  • What does the unicorn have to say about contribution profit from its loans business?

These are related questions, as we’ll see.

Starting with loss rates, Affirm thinks it is getting smarter over time, writing in its S-1 that its “expertise in sourcing, aggregating, protecting and analyzing data” provides it with a “core competitive advantage.” Or, more simply, Affirm writes that it has “data advantages that compound over time.”

So we should see improving loss rates, yeah? And we do. The company has a very pretty chart up top in its IPO filing that makes its model’s improvement appear staggeringly good over time:

Image Credits: Affirm

But, things aren’t improving as fast inside its results, as Affirm later explains when discussing its aggregate, as opposed to cohort-delineated, results.

Here’s Affirm discussing its provision for credit losses in its most recent quarter (calendar Q3 2020) and the period’s year-ago analog (calendar Q3 2019):

Image Credits: Affirm

As we can see, the percentage of total revenue that Affirm has to provision for expected credit losses is going down over time. That’s what you’d hope to see.

To better explain what’s going on, let’s explore what Affirm means by “provision for credit losses.” Affirm defines the metric as “the amount of expense required to maintain the allowance of credit losses on our balance sheet which represents management’s estimate of future losses,” which is “determined by the change in estimates for future losses and the net charge offs incurred in the period.”

And it got quite a lot better in the last year, which the company says was “driven by lower credit losses and improved credit quality of the portfolio.” So, Affirm is getting better at lending as time goes along. What does that mean for its gross margins?

Well, Affirm doesn’t provide direct gross margin results. So we’re left to do the work ourselves. For reference, this is the income statement we’re working off of:

Image Credits: Affirm

Fun, right? Annoying, but fun.

How should we calculate the company’s gross margins? We can’t drill down on a per-product basis given that costs aren’t apportioned in a manner that would allow us to, so we’ll have to take Affirm’s revenue as a bloc, and its costs as a bloc as well.

#affirm, #airbnb, #ecommerce, #finance, #fundings-exits, #peloton, #startups, #tc, #the-exchange, #tiktok, #twilio

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Airbnb’s Biggest Problem

Resentment of Airbnb poses a challenge both for the company and for the future of our communities.

#airbnb, #computers-and-the-internet, #social-media, #travel-and-vacations, #twitter

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5 questions from Airbnb’s IPO filing

Airbnb filed to go public yesterday, offering the world a look into its financial performance over the past several years. The company’s S-1 detailed an expanding travel giant with billions in annual revenue that was severely disrupted by the COVID-19 pandemic.

But past our overview of Airbnb’s core financial results and our look into which investors will make the most from its public debut, there are still questions that need answering.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


We need to to better understand how far Airbnb’s bookings fell during the end of Q1 and the start of Q2, when travel first collapsed. And, how far those numbers have come back since. We also want to understand what sort of booking activity is driving those gains — is Airbnb really benefiting from a surge of long-term, local stays?

Then, to close, how profitable was Airbnb when times were good, and what sort of cash stockpile does the company have to get back to its former scale?

These five questions should help us better understand how Airbnb managed to survive some tough months and still file to go public before 2020 ran out. Let’s get to work!

We’ll take each question individually, to make our homework today as simple as possible.

How far did Airbnb’s bookings fall during Q1 and Q2?

Let’s start by looking at Airbnb’s gross bookings on a quarterly basis. The company defines gross bookings as “net of cancellations and alterations,” so these numbers are not artificially inflated.

Here’s the chart:

Where does the decline begin? Q1, as we’ll see when we dig into monthly data, but the above chart does a good job painting just how bad things got for Airbnb in growth terms as Q1 closed and Q2 kicked off.

As you can see, Airbnb’s second quarter gross bookings were its lowest in recent history; Q2 2020 put up the smallest bookings result since at least the first quarter of 2017. For a company that had done $10.0 billion in gross bookings in a single quarter just over a year before, the declines were catastrophic.

But the results are actually worse than that chart shows; Airbnb actually saw gross bookings go negative for a few months.

How is that possible? Recall that the gross bookings figure discounts cancellations and alterations. So, if Airbnb had a big wave of cancellations, its gross bookings number could fall so sharply it goes negative, even if the company were still seeing some new bookings.

That’s what happened in March and April. Observe:

So how far did Airbnb’s gross bookings fall? They fell to -$900 million in March. More simply, Airbnb saw its expected rental volume fall by nearly $1 billion in a single month. And then in April it fell by another $600 million as more cancellations piled up.

That’s why Airbnb cut staff and took on expensive capital; its business had gone from accreting to bleeding in no time at all.

How far have Airbnb’s bookings come back since?

#airbnb, #fundings-exits, #proptech, #real-estate, #startups, #tc, #the-exchange

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Equity Shot: Airbnb’s IPO is finally here

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

Today we have an Equity Shot for you about Airbnb’s S-1 filing, as it looks to go public before the year is out.

  • First we get into Airbnb’s macro performance, which shows a stable-picture historical revenue growth. There are a ton of numbers to get to so get ready for a quick dive into net revenue, gross margins and losses.
  • Then we discuss the dramatic drop in bookings, the promising comeback and if short-term travel is Airbnb’s future.
  • There’s a weird quarter of profitability that you should all know about, and a heads-up on what to look for in Q4 numbers.
  • Finally, we talk about the bullish and bearish case on Airbnb, which poetically filed the same day that Moderna announced a promising vaccine trial. 

All that, and our trusty other host Danny Crichton was busy filing a post about the winners and losers of the Airbnb IPO. Ownership, you quiet, billionaire beast. There’s more coming from TechCrunch on the company’s IPO, and from the Equity crew on everything else we ferret out on Thursday. Stay tuned!

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

 

 

#airbnb, #equity-podcast, #equity-shot, #exit, #fundings-exits, #podcasts, #startups

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The VC and founder winners in Airbnb’s IPO

After a tumultuous year for the travel industry, Airbnb’s long-awaited IPO filing just dropped. One thing is clear: there is still plenty of juice left in the home-sharing platform, and a smattering of VCs and the company’s founders are positioned to receive some serious returns.

My colleague Alex Wilhelm has an overview article on Airbnb’s financial picture and overall metrics. It’s a mixed bag, but perhaps stronger than might otherwise be expected, given the global collapse of tourism due to the pandemic. Revenues are stabilizing, growth is up and bookings aren’t catastrophic.

So let’s get to the most fun question with these big startup IPO offerings, who made the money?

First and foremost, Airbnb’s founders — Brian Chesky, Nathan Blecharczyk and Joe Gebbia — managed to hold together a whopping 41.95% of the company based on data offere in its S-1 filing, with Chesky owning slightly more than his two co-founders.

#airbnb, #finance, #fundings-exits, #sharing-economy, #tc, #tourism, #travel, #travel-industry

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Airbnb files to go public

Airbnb filed to go public today, bringing the well-known unicorn one step closer to being a public company.

The financial results show a company on the rebound, but smaller than it was. Its more granular financial results also make clear how hard the pandemic was on the travel-reliant unicorn. Regarding Airbnb’s worth, investors will have to balance how they value recovery and recent profits over the company’s disrupted historical growth arc.

How did we get here?

The home-sharing startup had a tumultuous year, with the COVID-19 pandemic harming its business in the first and second quarters of the year, and Airbnb later recovering on the strength of more local bookings.

Its filing comes mere days after fellow unicorns DoorDash and C3.ai themselves filed to go public in what could be a rush to the public markets by richly valued startups.

Airbnb’s S-1 filing was expected to come last week, but was delayed due to purported election concerns, a concept that TechCrunch staff did not find entirely convincing.

We’ve scraped together quite a lot about Airbnb’s recent financial performance, but its S-1 is the real treasure trove. What follows is a dive into the company’s high-level numbers. From there, TechCrunch will dig into the company’s financial nuances and ownership stakes.

Airbnb’s financial performance

What we want to know is how the pandemic impacted Airbnb’s business; its year-to-date results, and what we can suss out from its quarterly trends.

Up top in Airbnb’s S-1 is a chart that shows monthly bookings on its platform. The implication is somewhat simple; namely that Airbnb knows what we want to know and wanted to share. Here are those numbers:

As expected, Airbnb took a huge hit in March. But by May things were back to year-over-year growth, where they stayed.

Now, the company has seen precious little bookings growth since June — indeed it has seen bookings fall in the months since. And, worse, the company’s gross bookings after removing cancellations are down on a year-over-year basis. (Update: We misread this table at first, and have updated our notes on it.)

So, what does all of that look like in more traditional accounting figures? Here’s Airbnb’s reported income statement:

As expected, Airbnb’s year has not been tremendous. Indeed, the company is on track to match its 2018 size, if we have our math correct.

What changed from the first three quarters of 2019 to the first three quarters of 2020? The biggest thing, apart from expected lowers revenue costs — less revenue costs less — is the huge decline in sales and marketing spend at the company. Airbnb slashed S&M outlays from $1.18 billion in the first three quarters of 2019 to just $545.5 million in the same period of 2020.

So, where will Airbnb wind up in 2020 once it’s all done? We’ll need to peek at its quarterly results for that. Here they are:

Airbnb’s growth continues in year-over-year terms right until the March 31, 2020 quarter, when it was effectively flat compared to Q1 2019. Or, the company would have grown sans COVID-19. In the June 30, 2020 quarter we see the real damage, with Airbnb’s revenue falling from $1.2 billion in the year-ago quarter to just $334.8 million. That’s a shocking decline.

But, looking ahead to Q3 2020 and we see a large return to form. Yes, Airbnb’s third quarter was smaller than its Q3 2019, with $1.34 billion in top line instead of $1.65 billion in 2019, but the company effectively quadrupled from its preceding quarter. If the company manages another Q3 worth of revenue in Q4, it would be larger than it was in 2018 by a few hundred million.

Critically, Airbnb managed to swing from a number of unprofitable quarters to a profit in Q3, akin to its 2019 Q3 when it was also in the black. Of course, Airbnb’s $219.3 million in GAAP net income during the third quarter pales compared to its losses tallied earlier in the year. The company will not break even in 2020.

Airbnb also reported adjusted profit metrics. Its adjusted EBITDA results are based on the following definition:

Adjusted EBITDA is defined as net income or loss adjusted for (i) provision for income taxes; (ii) interest income, interest expense, and other income (expense), net; (iii) depreciation and amortization; (iv) stock-based compensation expense; (v) net changes to the reserves for lodging taxes for which we may be held jointly liable with hosts for collecting and remitting such taxes; and (vi) restructuring charges.

The decision to remove restructuring costs raised eyebrows, with Amy Cheetham, an investor at Costanoa Ventures saying that “it feels like leaving out restructuring costs is a little aggressive?” We agree, as it gives the company too much flexibility to count the good in its results, like lower operating costs, while discounting what it took to get those results, like restructuring its business operations.

That’s having your cake and eating it as well and not counting the calories.

Still, who are we to withhold numbers from you? Here is the very adjusted EBITDA that Airbnb claims:

The numbers are still not good even after ripping out so very any costs. Worse, perhaps is the company’s cash burn in the year. That deficit helps explain why Airbnb took on more capital when it did earlier this year.

It’s hard to put a firm grade on this S-1. It contains what we expected, but how investors weigh the company’s year-over-year revenue declines in Q3 2020 against its rapid comeback from Q2 2020 should help decide its eventual value. On the whole Airbnb has managed something incredibly impressive — bouncing back from so low a low.

But, now that it’s going public we can’t merely say good job; it wants to price itself well and trade strongly. So, all eyes on its first IPO range as that should tell us what investors just might be willing to pay for the famous company’s equity.

#airbnb, #c3-ai, #doordash, #fundings-exits, #startups, #tc

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Airbnb Reveals Falling Revenue, With Travel Hit by Pandemic

The home rental service gave the first comprehensive look at its finances on Monday as it moves to go public.

#airbnb, #chesky-brian, #computers-and-the-internet, #coronavirus-2019-ncov, #hotels-and-travel-lodgings, #initial-public-offerings, #renting-and-leasing-real-estate, #start-ups, #stocks-and-bonds, #travel-and-vacations, #venture-capital

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To own an AR future, Niantic wants to build a smarter map of the world

Niantic is continuing to bet heavily on the idea that it knows where consumer computing is headed, namely towards augmented reality.

The game development startup behind Pokémon Go has some good company with companies like Apple, Facebook and Snap making similar bets, but stakes are high for the studio which hopes it can build an early advantage in foundational AR infrastructure and bring third-party developers on board, edging out efforts from companies that are quite a bit larger.

Niantic’s experiments are still being bankrolled by their 2016 first-party hit Pokémon Go, which SensorTower estimates is having its best year ever in 2020. A report from the firm suggests that the title has pulled in more than $1 billion in revenue since the start of the year, a marked increase since 2019 that might be surprising given the social effects of a global pandemic. Those revenues have allowed Niantic to be one of the more active acquirers in the AR infrastructure space, buying up small buzzy AR startups like Escher Reality, Matrix Mill and, most recently, 6D.ai.

That latest purchase in particular has acted as a signal for what the company’s next plans are for its augmented reality platform. 6D.ai was building cloud AR mapping software with companies like Airbnb among its early customers. The tech allowed users to quickly gather 3D information of a space just by holding up their phone to the world. Since the acquisition, Niantic has been integrating the tech into their developer platform and have been aiming to juice the technology with their own advances in semantic understanding so that they can not only quickly gather what the geometry of a space looks like, but also peer into the context of what the objects are that makes up that 3D mesh.

“We ultimately have this vision that for an AR experience, everything has to come together for it to be really magical,” Joel Hesch, Niantic’s Senior Director of Engineering, told TechCrunch. “You want precise location information so that you can see content in the right location and experience things together with others who are in the same location. You want the geometric information for things like occlusion or physics interactions. And you want to know about what things mean from a semantic perspective so that your characters can interact with the world in an intelligible way.”

While they’ve been building out the tech, they’ve also been pushing users to try it out. Niantic has been urging Pokémon Go players to actively capture videos of certain landmarks and destinations, visual data from which is fed back into bulking up models and improving experiences for subsequent users. As users gain access to more advanced tech like the LiDAR sensor inside the new iPhone 12 Pro, it’s likely that Niantic will gain access to more quality data themselves.

The ultimate goal of this data collection, the startup says, is to build an ever-updating 3D map of the world. Their latest tech allows them to peer into this map and distinguish what types of objects and scenes are in these scans, distinguishing buildings from water from the sky. The real question is how useful all of this data will actually prove to be in practice, compared to more high-level geographic insights like the Google Maps API .

Though the company has been talking about their Real World Platform since 2018, they’ve been slow to officially expand it as the enthusiasm behind phone-based AR has seemed to recede since Apple’s initial unveil of ARKit in 2017 prompted a groundswell of attention in the space. “We’ve primarily been focused on first party games and applications, but we are very excited about extending the platform to be something that more people can use,” Hesch says.

For Niantic and other companies that are bullish on an AR future, their best bet seem to be quietly building and hoping that their R&D will give them a years-long advantage when the technology potentially starts landing more consumer hits.

#airbnb, #api, #apple, #augmented-reality, #escher-reality, #facebook, #fed, #games, #ingress, #iphone, #matrix, #matrix-mill, #niantic, #pokemon, #pokemon-go, #snap, #software, #tc, #video-games

0

Fortnite is actually a SaaS company

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

What a week from us here in the United States, where the election is still being tabulated and precisely zero people are stressed at all. But, no matter what, the wheels of Equity spin on and so Danny and Natasha and Alex and Chris got together once again to chat all things startups and venture capital.

  • Up top there was breaking news aplenty, including a suit from the US government to try and block the huge Plaid-Visa deal. And, it was reported that Airbnb will drop its public S-1 filing early next week. That IPO is a go.
  • Next we turned to the gaming world, riffing off of this piece digging into the venture mechanics of making and selling video games. Our hosting crew had a few differences of opinion, but were able to agree that Doom 3 was a masterpiece before moving on.
  • Then it was time to talk Ant, and what the hell happened to its IPO. Luckily with Danny on deck we were in good hands. What a mess.
  • Prop 22 was passed, which effectively allows Uber, Instacart, and Lyft to keep their gig workers labeled as independent contractors, instead of employees. As a result, Uber and Lyft stocks soared, while gig worker collectives said that the fight is still on.
  • Natasha scooped a series of Election Day filings from venture capital firms. In the mix: Precursor Ventures Fund III, Hustle Fund II, and Insight Partner’s first Opportunity Fund.
  • And finally, despite Election Day turning into an entire week, the public markets are rallying. Will we see a boom of IPOs?

And, as a special treat, we didn’t even mention Maricopa county for the entire episode. Take care all!

Equity drops every Monday at 7:00 a.m. PDT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

#airbnb, #equity-podcast, #plaid, #precursor-ventures, #prop-22, #tc, #venture-capital

0

4 questions as Airbnb’s IPO looms

Almost on command after we asked yesterday if a rash of technology IPOs were about to land, news broke that Airbnb plans to drop its S-1 filing early next week with a December roadshow. The document will be of intense interest for shareholders — as well as public investors who hope to purchase shares in the home-sharing unicorn.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


Per Reuters, which broke the news of Airbnb’s impending public IPO filing, the company intends to raise “around $3 billion” at a valuation that could top $30 billion.

The stock market is rallying before Airbnb’s public filing, making it a good time for the company to seek a rich valuation for itself. But while Airbnb’s recovery from COVID-related lows could become a business case of the ages, it’s not hard to still have questions about what its S-1 will contain.

We know quite a lot about Airbnb’s last few years, something TechCrunch covered here. But, to save you hundreds of words, let’s quickly blast through a rough rundown of its last few quarters. Once we get through that, we’ll ask four questions that, once answered, will help the market price Airbnb’s IPO.

Results, questions

Running back through Airbnb’s numbers without extra conversation, here’s the data in bullet-point format, with percentage-change figures comparing year-over-year data provided when possible:

  • Q4 2019: Revenues of $1.1 billion (+32%), EBITDA of -$276.4 million (+92%).
  • Q1 2020: Revenues of $842 million, and an adjusted loss of $341 million.
  • Q2 2020: Revenues of $335 million, and an adjusted loss of $400 million.

Turning to more recent times, we know that Airbnb’s financial performance improved in Q3, with data showing the company’s bookings bouncing back as summer ran its course. And the company itself has made noise about local bookings (key to its rebound as folks stayed close to home during the pandemic), and total nights booked

#airbnb, #fundings-exits, #startups, #tc, #the-exchange

0

Airbnb Fights Its ‘Party House Problem’

Noise. Damages. Safety questions. Airbnb is racing to address the risks posed by partying guests before it goes public.

#accidents-and-safety, #airbnb, #chesky-brian, #initial-public-offerings, #layoffs-and-job-reductions, #murders-attempted-murders-and-homicides, #real-estate-and-housing-residential, #renting-and-leasing-real-estate, #start-ups, #travel-and-vacations

0

Equity Monday: SAP’s warning, and IPO updates for both Airbnb and Databricks

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

This is Equity Monday, our weekly kickoff that tracks the latest big news, chats about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here — and don’t forget to check out last Friday’s episode that includes some high-quality Quibi jokes, if I recall correctly.

This was a busy morning, with lots to talk about it. Here’s what we got into:

Shoutout Lewis Hamilton and that G2 series. Ok, chat Thursday!

Equity drops every Monday at 7:00 a.m. PT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

#airbnb, #databricks, #equity-monday, #equity-podcast, #fundings-exits, #startups, #tc

0

Travel Goes Members-Only

Membership travel, with its emphasis on peace of mind, is surging during the pandemic. But is health and safety only a guarantee for those with an “in” and money to burn?

#airbnb, #chateau-marmont-los-angeles-calif-hotel, #hollywood-reporter, #hotels-and-travel-lodgings, #luxury-goods-and-services, #quarantine-life-and-culture, #soho-house-manhattan-ny, #time-sharing, #travel-and-vacations

0

Merging Airbnb and the traditional hotel model, Mexico City’s Casai raises $23 million to grow in Latin America

With travel and tourism rising across Latin America, Casai, a startup combining Airbnb single unit rentals with hotel room amenities, has raised $23 million to expand its business across Latin America.

The company, which initially was as hit hard by regional responses to the COVID-19 pandemic as other businesses in the hospitality industry has recovered to reach nearly 90 percent of total capacity on the 200 units it manages around Mexico City.

The company was co-founded by chief executive Nico Barawid, a former head of international expansion at Nova Credit and consultant with BCG, and chief operating officer María del Carmen Herrerías Salazar, who previously worked at one of Mexico’s largest hotel operators, Grupo Presidente.

The two met two years ago at a barbecue in Mexico City and began speaking about ways to update the hospitality industry taking the best of Airbnb’s short term rental model of individual units and pairing it with the quality control and standards that guests expect from a hotel chain.

“I wanted to define a product from a consumer angle,” said Barawid. “I wanted this to exist.”

Before the SARS-Cov-2 outbreak Casai’s units were primarily booked through travel partners like HotelTonight or Expedia. Now the company has a direct brisk direct booking business thanks to the work of its chief technology officer, a former engineer at Google named Andres Martinez.

The company’s new financing was led by Andreessen Horowitz and included additional commitments from the firm’s Cultural Leadership Fund, Kaszek Ventures, Monashees Capital, Global Founders Capital, Liquid 2 Ventures, and individual investors including the founders of Nova Credit, Loft, Kavak and Runa.

Casai also managed to nab a debt facility of up to $25 million from TriplePoint Capital, bringing its total cash haul to $48 million in equity and debt.

Image Credit: Casai

The big round is in part thanks to the company’s compelling value proposition, which offers guest not only places to stay equipped with a proprietary smart hardware hub and the Casai app, but also a Google Home, smart lights, and Chromecast-kitted televisions, but also a lounge where guests can stay ahead of their check-in or after check-out.

And while the company’s vision is focused on Latin America now, its management team definitely sees the opportunity to create a global brand and business.

The founding team also includes a chief revenue officer, Alberto Ramos, who worked at McKinsey and a chief growth officer, Daniel Hermann, who previously worked at the travel and lifestyle company, Selina. The head of design, Alexa Backal, used to work at GAIA Design, and its vice president of experience, Cristina Crespo, formerly ran WeWork’s international design studio.

“To successfully execute on this opportunity, a team needs to bring together expertise from consumer technology, design, hospitality, real estate and financial services to develop world-class operations needed to deliver on a first-class experience,” said Angela Strange, a general partner at Andreessen Horowitz, who’s taking a seat on the Casai board. “It was obvious when I met Nico and Maricarmen that they are operationally laser-focused and have uniquely blended expertise across verticals, with unique views on the consumer experience.”

#airbnb, #andreessen, #andreessen-horowitz, #angela-strange, #chief-operating-officer, #chief-technology-officer, #engineer, #financial-services, #general-partner, #global-founders-capital, #hoteltonight, #kaszek-ventures, #laser, #latin-america, #liquid-2-ventures, #mckinsey, #mexico, #mexico-city, #monashees-capital, #nova-credit, #real-estate, #runa, #selina, #sharing-economy, #tc, #tourism, #travel, #triplepoint-capital, #vacation-rental, #wework

0

No-code is the new blockchain

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

This week Natasha was on vacation, so Danny and your humble servant had to endeavour alone. She’s back next week, so we’ll be back to full strength as a collective soon enough.

But even with a depleted hosting crew, we had a mountain of news to get through. And to joke about, as Danny was in the mood for a laugh. Here’s the rundown:

That was a lot. We did our best. Hugs and chat with you next week!

Equity drops every Monday at 7:00 a.m. PT and Thursday afternoon as fast as we can get it out, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

#airbnb, #equity-podcast, #firstmark, #root, #tc

0

Understanding Airbnb’s summer recovery

New numbers concerning Airbnb’s summer performance were reported this week, with The Information adding to the performance figures that Bloomberg previously detailed earlier this year.

Airbnb announced that it filed privately to pursue a debut this August. We have yet to see its public IPO filing, but, all the same, the flotation is coming.


The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


If you’re like me, this year’s chaotic news cycles have made it hard to track any single story well. So this morning I want to put together a financially-focused chronology of Airbnb’s year, including the new data. Enough has happened over the past few months that any prior work we’ve done is too dated to use.

So, let’s rewind the clock and dig into the biggest financial moment from Airbnb’s 2020, capping off with the latest reporting, including details from the company itself on booking volume recovery as we go.

This should be easy, fun and useful. Let’s go!

Airbnb’s 2020

Heading into 2020, Airbnb promised to go public in 2020. Given that there’s technical pressure from holders of Airbnb stock options for the company go public inside the year, the vow made sense. Airbnb was founded around 12 years ago, meaning that the company was already a bit aged for a private firm on an IPO path. Toss in the options issue, and if Airbnb wanted to hold onto its workforce, this was the year to go.

And Airbnb was well-capitalized heading into this year, so a direct listing was in the cards.

Enter 2020 and a few unexpected events. When COVID-19 hit Airbnb’s key markets it took the travel market with it, leading to this column asking on March 18th whether the company could go public this year given the state of its industry. At that point we knew that Airbnb’s cash balance was about $2 billion heading into the start of the year, and that the company had reported Q4 2019 revenue of around $1.1 billion (+32% YoY, per Bloomberg) and negative earnings before interest, taxes, depreciation and amortization of $276.4 million (+92.4% YoY, per Bloomberg).

The company’s persistent lack of profits heading into 2020 was the subject of our curiosity at the start of the year.

In late March, Airbnb announced that it would pay out $250 million to hosts to soften the blow of the pandemic’s travel declines. That was not a cheap move, and when the company expanded the policy this column wrote that it was “an intelligent if expensive way to help preserve user trust.”

#airbnb, #covid-19, #fundings-exits, #proptech, #startups, #tc, #the-exchange, #travel

0

Apple backs down on taking 30% cut of paid online events on Facebook

Apple backs down on taking 30% cut of paid online events on Facebook

Enlarge (credit: Facebook)

Facebook has temporarily shamed Apple out of taking a 30 percent cut of paid online events organized by small businesses and hosted on Facebook—things like cooking classes, workout sessions, and happy hours. Demand for these kinds of online events has soared during the COVID-19 pandemic.

Apple says that it has a longstanding policy that digital products must be purchased using Apple’s in-app payments system—and hence pay Apple’s 30 percent tax. In contrast, companies selling physical goods and services are not only allowed but required to use other payment methods (options here include Apple Pay, which doesn’t take such a big cut).

For example, an in-person cooking class is not a digital product, so a business selling cooking class tickets via an iPhone app wouldn’t have to give Apple a 30 percent cut. But if the same business offers a virtual cooking class, Apple considers that to be a digital product and demands a 30 percent cut—at least if the customer pays for the class using an iOS device.

Read 4 remaining paragraphs | Comments

#airbnb, #apple, #apple-tax, #facebook, #policy, #tech

0

The Future of Airbnb

Home-sharing’s challenges aren’t only about social distancing and hygiene. Overtourism, racial bias, fee transparency and controlling the party crowd are also in the mix.

#airbnb, #chesky-brian, #coronavirus-2019-ncov, #hotels-and-travel-lodgings, #travel-and-vacations

0

Willow, the startup making the wearable breast pump, raises $55 million

Willow, the startup company making a new, wearable, breast pump for women, is capping off a frenetic 2020 with $55 million in fresh funding as it looks to expand its product line to more offerings for new mothers.

The company is coming off a year which saw sales increase, and Laura Chambers, the former eBay and Airbnb manager, take over as chief executive and now, with the new capital, it expects to be bringing new products to market beyond the breast pump in 2021.

A March 2020 report from Frost & Sullivan put the total size of the femtech market, including technologies for mothers, at just over $1 billion with growth rates of 12.9%. So the category is small, but growing quickly as more tools come in to provide services in what is a woefully underinvested sector. Indeed, the $155 million that Willow has raised to date puts the company among the upper echelon of women’s health investments.

Contrast that figure with Ro, the storied health brand that launched its subscription medication service for erectile dysfunction with an $88 million investment round.

For women who breast feed, the problems associated with pumping can be legion.

“A lot of women talk about how it’s almost like the pump runs their life,” Naomi Kelman, the founder and former CEO of Willow, told TechCrunch. “Everyone is told, if you don’t breastfeed or pump on a regular basis, your [breastmilk] supply goes down and then breastfeeding is finished for you.”

That’s why startup companies like Willow and Naya Health, as well as established companies like Medela and Lansinoh are developing technologies to not only make pumping breast milk more efficient, but also provide more comfort and dignity to users.

“Through our longstanding relationship with Willow, we’ve been able to see the true impact they have had in helping mom’s balance motherhood in a modern world,” said Josh Makower, Willow’s co-founder and chairman of the company’s board, as well as a General Partner at Willow investor, NEA, in a statement. “Willow is thriving and growing to meet the needs of all moms during these unique times, and we are proud to be a partner in advancing innovation in the femtech field.”

With Chambers at the helm, and the $55 million in new financing in hand from investors led by NEA, Meritech Capital Partners, and including Lightstone Ventures along with new investor Perceptive Advisors, Willow will be doing far more than just making breast pumps and will be looking to expand its footprint to international markets.

“The first problem we wanted solve was pumping and the wonderful wearable mobile pump. That was always product number one. There’s more innovation we can do around pumping. Moms would love us to support them with more hardware and more software,” Chambers said. We’re also working with moms to figure out where else they need support. Mothers are remarkably unsupported in their motherhood journey. We are working with moms to figure out what’s important for them and we’re building that.”

#airbnb, #breast-pump, #ebay, #femtech, #health, #laura-chambers, #meritech-capital-partners, #naya-health, #nea, #perceptive-advisors, #tc, #willow

0

Tourism Slump in Dublin Lays Bare Airbnb’s Damage to Rental Markets

After the pandemic hit, the number of longer-term listings jumped in the Irish capital. That brought some relief to a crunched market for renters, though it may not last.

#affordable-housing, #airbnb, #coronavirus-2019-ncov, #dublin-ireland, #economic-conditions-and-trends, #real-estate-and-housing-residential, #renting-and-leasing-real-estate, #shortages

0

As the Western US burns, a forest carbon capture monitoring service nabs cash from Amazon & Bill Gates backed fund

Pachama, the forest carbon sequestration monitoring service that tracks how much carbon dioxide is actually captured in forestry offset projects, has raised $5 million in fresh funding from a clutch of high profile investors including Amazon, Breakthrough Energy Ventures.

The investment is one of several deals that Amazon has announced today through its Climate Pledge Fund. Breakthrough Energy Ventures, the firm backed by Bill Gates and other billionaires, led the round, which brings Pachama’s total haul to $9 million so it can scale its forest restoration and conservation emissions reduction monitoring service, the company said.

With the Western United States continuing to burn from several fires that cover acres of drought-impacted forests and deforestation continuing to be a problem around the world, Pachama’s solution couldn’t be more timely. The company’s remote verification and monitoring service using satellite imagery and artificial intelligence measures carbon captured by forests.

It also couldn’t be more personal. Pachama’s founder, Diego Saez-Gil, lost his own home in the wildfires that tore through California earlier this year.

“We will need to restore hundreds of thousands of acres of forests and carbon credits can be the funding mechanism,” Saez-Gil wrote in a direct message.

Pachama joins two other companies that are jointly financed by Breakthrough Energy Ventures and Amazon’s Climate Pledge Fund.

Other big corporate investors also backed Pachama. Groupe Arnault’s investment arm, Aglaé Ventures, and Airbnb’s alumni fund, AirAngels invested as did a number of prominent family offices and early stage funds. Sweet Capital, the fund investing the personal wealth of gaming company King.com’s management team; Serena Ventures (the investment vehicle for tennis superstar Serena Williams) and Chris Sacca’s Lowercarbon Capital fund also invested in the round along with Third Kind Ventures and Xplorer Ventures.

“There is growing demand from businesses with ESG commitments looking for ways to become carbon neutral, and afforestation is one of the most attractive carbon removal options ready today at scale,” said Carmichael Roberts, of Breakthrough Energy Ventures, in a statement. “By leveraging technology to create new levels of measurement, monitoring, and verification of carbon removal—while also onboarding new carbon removal projects seamlessly—Pachama makes it easier for any company to become carbon neutral. With its advanced enterprise tools and resources, the company has enormous potential to accelerate carbon neutrality initiatives for businesses through afforestation.”

#airbnb, #amazon, #articles, #artificial-intelligence, #bill-gates, #breakthrough-energy-ventures, #climate-pledge-fund, #deforestation, #greenhouse-gas-emissions, #king-com, #nature, #renewable-energy, #satellite-imagery, #serena-ventures, #tc, #united-states

0

Courier raises $10.1M Series A to help developers integrate multi-channel notifications

Courier is an API platform with a no-code twist that helps developers add multi-channel user notifications to their applications. The company today announced that it has raised a $10.1 million Series A funding round led by Bessemer Venture Partners. Matrix Partners, Twilio and Slack Fund also participated in this round.

Previously, the company raised a $2.3 million seed round led by Matrix Partners, with participation from Y Combinator. That round, which closed in April 2019, was previously unreported. Bessemer Venture Partners’ Byron Deeter and Matrix Partners’ Patrick Malatack, the previous VP of Product at Twilio, will join Courier’s Board of Directors.

“While at Twilio, I saw developers wrestling with integrating multiple channels together into a single experience,” says Malatack in today’s announcement. “Courier’s vision of a single platform for connecting and managing multiple channels really compliments the channel explosion I was seeing customers struggle with.”

Image Credits: Courier

Courier founder and CEO Troy Goode previously led an engineering group at marketing automation firm Eloqua, which was acquired by Oracle in 2012, and as the CTO and Head of Product at logistics software provider Winmore. Eloqua is clearly where he drew his inspiration for Courier from, though, which he built out during his time at Y Combinator.

“And one of the things that I noticed and became very frustrated by was that with Eloqua, Marketo, HubSpot, there were a ton of different tools for marketing teams to use to communicate with prospects and our leads,” Goode told me. “But as soon as somebody became a customer, as soon as somebody became a user, we weren’t using those platforms. All of a sudden, we were manually plugging in infrastructure level systems like SendGrid and Twilio.”

The idea behind Courier is to provide development teams with a one-stop service for all their notification and communication infrastructure needs without having to build it from scratch. As Goode noted, large companies like Airbnb and LinkedIn can afford to build and maintain these systems to send out transactional emails to their users, often with teams that have dozens of engineers on them. Small teams can build less sophisticated solutions, but there’s really no need for every company to reinvent the wheel.

Today, Courier integrates with the likes of Slack, Microsoft Teams, Facebook Messenger, WhatsApp, SendGrid, Postmark, Mailgun, MessageBird, Twilio and Nexmo, among others.

One thing that makes the service stand out is that it offers both a no-code system for users to build their massaging flows and templates, as well as the APIs for developers to integrate these into their applications. That means anybody within a company can, for example, build rules to route messages through specific channels and providers based on their needs, on top of managing the content and the branding of the messages that are being sent.

Image Credits: Courier

“You’ve got this broad array of potential providers,” Good said. “And what you need to do is figure out, okay, which provider am I going to use? And sometimes, especially at large organizations, the answer is multiple providers. And or email, you might need a backup email service in case your primary goes down, or you need to warm up an IP pool for SMS . You might have different providers per geography for both deliverability and price reasons. That’s really hard stuff to build yourself.”

But in addition, different recipients also have different preferences, too, and while users can build rules around that today, the company is looking at how to automate this process over time so that it can, for example, automatically ping users on the channel where they are most likely to respond (or purchase something) at a given time of the day.

Goode noted that it may be hard to convert big businesses to move to its platform given that they have already invested a lot into their own systems. But like Stripe, which faced a similar problem given that most potential users weren’t waiting to rip out their existing payment infrastructure, he believes that partnering with companies early and having patience will pay off in the long run.

#airbnb, #api, #bessemer-venture-partners, #byron-deeter, #ceo, #computing, #courier, #eloqua, #facebook, #hubspot, #mailgun, #marketo, #matrix-partners, #messenger, #microsoft, #microsoft-teams, #operating-systems, #oracle, #recent-funding, #sendgrid, #slack, #slack-fund, #sms, #software, #startups, #twilio, #whatsapp

0

An IPO expert bats back at the narrative that traditional IPOs are for “morons”

Lise Buyer has been advising startups on how to go public for the last 13 years through her consultancy, Class V Group. She built the business after working as an investment banker, and then as a director at Google, where she helped architect the company’s famously atypical 2004 IPO.

It’s perhaps because Google’s offering was so misunderstood that Buyer has come to think more highly of traditional IPOs over the years, likening herself to a golf caddie who has “played the course a whole lot of times” and can tell a management team what will happen in different circumstances.

Indeed, while Buyer says she is “paid the same regardless” of whether a team chooses a regular IPO, an auction model, a SPAC or a direct listing, she doesn’t believe the world needs direct listings or SPACs nearly as much as the investors forming them have made it seem. Rather, she thinks the traditional IPO process has been unfairly maligned in recent years, helped along by an outraged Bill Gurley.

(If you somehow missed it, the famed VC began pushing back very publicly on IPOs last year, calling them a “bad joke” because of the pre-IPO stakes handed by banks to favored institutional investors, who sometimes reap tens of millions of dollars from a company’s first day on the public market — money that would otherwise go to the issuers themselves. Gurley even hosted an invitation-only event in San Francisco last fall called “Direct Listings: A Simpler and Superior Alternative to the IPO.” )

Certainly, it irks Buyer that companies that choose the traditional route have been made out more recently to be “morons” that are taken advantage of by the investment banks that underwrite their deals.

“It’s so much more nuanced than that,” she says. “It’s a little pathetic that the conversation has evolved the way it has.”

What is it these discussions that do not ring true to her? Primarily, she says, these first-day “pops” are sanctioned by management teams. “It’s not up to Bill Gurley to choose the right price,” she says. It “isn’t just bankers [who] come in and say, ‘We think you’re worth $40 [per share] you’re going to sell at $20 [per share]. Have have it.” It is “up to the management team, which generally has to think about much more than just day one. Some want a pop, some don’t. It’s their call.”

Buyer points to the videoconferencing company Zoom, whose shares soared 72% on the day of its April IPO last year (and have kept surging through this pandemic). CEO Eric Yuan and the executive suite he’d built “knew the stock was going to jump” and agreed to the stock’s pricing anyway, according to Buyer.  They wanted to set realistic, achievable expectations, rather than begin racing to meet inflated ones.

Management “doesn’t want to be on the hook just because the market is temporarily willing to pay something astronomical — by in in many cases, people who really don’t understand the fundamentals,” she says. Otherwise, she continues, “when three months later the company comes out with a forecast that doesn’t match [those] crazy expectations, management has to live with that for very long time.”

Similarly, Buyer highlights the software company Bill.com, which saw its shares jump 60% on the day of its IPO this past December.  While there might have been hand-wringing over money left on the table, she thinks it was the right move and one for which the company was quickly rewarded.

“With Bill.com, management knew that demand dramatically outstripped supply and they could have priced that deal significantly higher,” she says. They didn’t raise their shares pricing because they didn’t want to “message anything unusual about Wall Street,” she continues, but also the company already had in mind its secondary stock sale. Indeed, in June, with Bill.com’s business accelerating and its shares ticking upward, management sold a much larger percentage of the company — at a much higher price.

One could argue the company benefited unexpectedly from the pandemic, as have many software businesses. Buyer sees it differently, though. “Because they’d previously established a good rapport and trust with investors with that lower priced IPO, such that they were able to raise so much more money and take less dilution four months later, who’s to say they made a mistake [on opening day], giving the public pension funds a little bit of a jump?”

Whether one of the most highly anticipated IPOs of the year — Airbnb — chooses a traditional path for some of these same reasons should become apparent soon enough. It was reported by Bloomberg just today that the company rebuffed a takeover by the SPAC of hedge fund billionaire Bill Ackman in favor of a traditional IPO.

In the meantime, the accommodations giant is far from alone in having to decide right now on the best way forward for its business. SPACs in particular right now are capturing the imagination of founders and investors alike. Says Buyer of her own clients, “There are folks who were not considering a SPAC six weeks ago who are getting tapped on the shoulder now and are trying to evaluate the specific terms — and the specific trade-offs — of these potential merger-partner-slash acquirers.”

As for direct listings — which have been lauded as a less expensive way to go public and, as of an SEC order last week, will allow companies to raise money as they are making that shift — Buyer isn’t exactly on the fence when it comes to these, either.

“With a direct listing that includes primary raise, it will be interesting to see if the company engages underwriters as opposed to advisors, and therefore if the expenses are lower – or perhaps even higher – than [with] an IPO. It could be either, we just don’t know yet.

“Again,” Buyer adds, “I have no horse in the hunt. I just see this as a solution desperately in search of an actual, as opposed to drummed-up, problem.”

#airbnb, #bill-com, #class-v-group, #direct-listings, #ipo, #lise-buyer, #spac, #tc, #zoom

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As it delists, Rocket Internet’s ill-fated experiment with public markets is over

It was all supposed to be so different. When Rocket Internet IPO’d in 2014 it was the largest tech company floatation in Europe for 7 years. A year later it had lost $46m and it’s valuation had dropped by 30%. Since then the German start-up factory behind internet companies such as Delivery Hero, Zalando and Jumia has languished, in part because the reason for it’s existence – to provide growth capital for ‘rocket-fuelled’ startups – has ebbed away, as the tech market was flooded with capital in recent years. Today the company said it was delisting its shares from the Frankfurt and Luxembourg Stock Exchanges for just that reason.

Rocket’s market value has fallen from its high of 6.7 billion euros ($8 billion) on the day of its IPO on the Frankfurt Stock Exchange to just 2.6 billion euros and is now offering investors 18.57 euros ($22.23) for each of their shares, lower than Monday’s closing price of 18.95 euros.

The company said it was “better positioned as a company not listed on a stock exchange” as this would allow it to focus on long-term bets.

In a statement, the company said: “The use of public capital markets as a financing source as essential [sic.] parameter for maintaining a stock exchange listing is no longer required and adequate access to capital is secured outside the stock exchange. Outside a capital markets environment, the Company will be able to focus on a long-term development irrespective of temporary circumstances capital markets tend to put emphasis on.”

Delisting, it said, will also reduce operational complexity when setting up new companies, “freeing up administrative and management capacity and reducing costs”.

Its investment division, Global Founders Capital, and CEO Oliver Samwer, will retain their stakes of 45.11% and 4.53% respectively, meaning the virtual shareholder meeting on Sept. 24 ask for shareholder approval to delist will be largely a formality. It has also launched a separate buyback program to secure 8.84% of its shares from the stock market. Although the decision to de-list makes sense, smaller shareholders will be burned, especially as Rocket is using its own cash for the buy-back.

The bets Rocket took, however, have of course paid off. For some. According to Forbes, Samwer and his brothers and co-founders Alexander and Marc are worth at least $1.2 billion each.

The Berlin -based firm became quickly known as a “clone factory” after Samwer famously conceded during his PHD that Silicon Valley had got innovation wrong by comping up with new ideas, and the ‘innovation’ would simply be to make existing models more efficient. The fact those existing models were usually dreamt up by other people never seemed to phase him.

Almost like clockwork Rocket produce clones of various guess for Amazon, Uber, Uber Eats and Airbnb. Its defence for this rapacious strategy was that it was simply adapting proven models for other markets.

Rocket would say it was merely adapting proven models for untapped local markets. Of course, the kicker was usually that the company would either scale faster globally than the original US-based startup, thus forcing some kind of acquisition, or that it would have its clones IPO faster. It did however produce some big, global, companies, even if they were not particularly original, including e-commerce firm Zalando, food delivery service Delivery Hero and meal-kit provider HelloFresh .

There have been successes. Jumia, the African e-commerce company, listed in April last year and when Rocket sold its stake earlier this year, it contributed tp Rocket’s net cash position of €1.9bn at the end of April.

But it has not benefitted from the recent stock market rally for tech companies, as it is overly exposed to e-commerce rather than pandemic-proof companies like Zoom .

For nostalgia sakes, here’s that interview I did with Oliver Samwer in 2015, just one more time.

#airbnb, #alexander, #amazon, #berlin, #ceo, #companies, #delivery-hero, #e-commerce, #europe, #food, #forbes, #frankfurt, #global-founders-capital, #hellofresh, #internet, #jumia, #kicker, #listing, #marc, #oliver-samwer, #retailers, #rocket-internet, #tc, #uber, #zalando, #zoom

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College Is Everywhere Now

Yale students in Barbados. Michigan students in Brooklyn. Berkeley students in Las Vegas? Off-campus housing is way off-campus now.

#airbnb, #colleges-and-universities, #coronavirus-reopenings, #generation-z, #parenting, #social-media, #your-feed-selfcare

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Berbix raises $9M for its identity verification platform

Berbix, an ID verification startup that was founded by former members of the Airbnb Trust and Safety team, today announced that it has raised a $9 million Series A round led by Mayfield. Existing investors, including Initialized Capital, Y Combinator and Fika Ventures, also participated in this round.

Founded in 2018, Berbix helps companies verify the identity of its users, with an emphasis on the cannabis industry, but it’s clearly not limited to this use case. Integrating the service to help online services scan and validate IDs only takes a few lines of code. In that respect, it’s not that different from payment services like Stripe, for example. Pricing starts at $99 per month with 100 included ID checks. Developers can choose a standard ID check (for $0.99 per check after the basic allotment runs out), as well as additional selfie and optional liveness checks, which ask users to show an emotion or move their head to ensure somebody isn’t simply trying to trick the system with a photo.

While ID verification may not be the first thing you think about in the context of the COVID-19 pandemic, the company is actually seeing increasing demand for its solution now that in-person ID verification has become much harder. Berbix CEO and co-founder Steve Kirkham notes that the company now processes the same number of verifications in a day that it used to do monthly only a year ago.

“The inability to conduct traditional identity checks in person has forced organizations to move online for innumerable use cases,” he says in today’s announcement. “One example is the Family Independence Initiative, a nonprofit that trusts and invests in families’ own efforts to escape poverty. Our software has enabled them to eliminate fraudulent applications and focus on the families who have been economically affected by COVID.”

Berbix co-founder Eric Levine tells me the company plans to use the new funding to expand its team, especially the product and sales department. He also noted that the team is investing heavily in localization, as well as the technical foundation of the service. In addition, it’s obviously also investing in new technologies to detect new types of fraud. Scammers never sleep, after all.

#airbnb, #berbix, #fika-ventures, #hospitality-industry, #initialized-capital, #mayfield, #recent-funding, #security, #sharing-economy, #startups, #tc, #tourism, #travel, #vacation-rental, #y-combinator

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After early-COVID layoffs, Hipcamp is buying competition, hiring

When shelter-in-place was first announced in the United States, most companies in the travel space saw bookings drop. Some shuttered. Hipcamp, a San Francisco-based startup that provides private land for people who want to go glamping or camping, found itself in a similar spot. (even though its entire sell is about getting you away from crowds).

“Bookings took a precipitous drop as people sheltered-in-place, and we actually encouraged people to cancel,” founder Alyssa Ravasio said in an interview. The startup conducted a round of layoffs back in April, citing ‘economic uncertainties.’ One employee tells TechCrunch that 60% of the company was laid off in two weeks. Hipcamp did not comment directly on the number of layoffs.

Months later, Hipcamp is in a far better spot. When stay-at-home orders lifted, bookings spiked with people eager to get outside, which the CDC says is a safer activity than being inside a place with less ventilation. Ravasio says that Hipcamp has even brought back some employees it originally laid off. The startup is currently hiring.

Off this new momentum, Hipcamp today announced that it has acquired Australia-based landsharing startup Youcamp, marking its first expansion into an international market. With the new business, Hipcamp will acquire Youcamp’s existing 50,000 listings, bringing its total to 420,000 listings.

Hipcamp declined to disclose the financials of the deal at this time.

Youcamp, founded by James Woodford, was born in New South Wales in 2013. Similar to Hipcamp, Youcamp worked to draw urban-based adults to the great outdoors. For its 7 years as an independent company, Youcamp racked up listings by working directly with private landowners.

Ravasio says she made her first big international bet in Australia partly because of revenue predictability.

“Expanding to the Southern Hemisphere also helps us account for natural seasonality with outdoor recreation. Between the US and Australia, it’s an endless summer,” the founder said.

The entire team at Youcamp will join Hipcamp, adding five to Hipcamp’s staff, bringing its employee base to a total of 35

Along with the acquisition announcement, Hipcamp shared that it is officially launching in Canada . The startup already had a number of Canadian hosts, but it will now increase the total by partnering directly with private landowners.

The company declined to share profitability or growth statistics, but instead pointing to aggregate usage numbers as some sort of cumulative revenue parallel. To date, Hipcamp has helped people spend 2.5 million nights outside across 6,000 hosts in the United States. Australia, and Canada.

In July 2019, Hipcamp got a tranche of new capital from investors, including but not limited to Andreessen Horowitz, Benchmark, Slow Ventures, Marcy Ventures (co-founded by Shawn Carter, or Jay-Z) and Dreamers Fund (co-founded by Will Smith). The round valued the startup at $127 million.

Hipcamp, which has been dubbed by the New Yorker the ‘Airbnb of the outdoors’, is more optimistic than it was in March, as shown by this appetite for acquisition. The progress mirrors what we’re seeing out of the actual Airbnb, which has found bookings increasing year over year as people look to stay at properties for local holidays.

#airbnb, #alyssa-ravasio, #andreessen-horowitz, #australia, #canada, #economy, #hipcamp, #san-francisco, #sharing-economy, #shawn-carter, #slow-ventures, #startup-company, #tc, #techcrunch, #travel, #united-states, #vacation-rental, #websites, #will-smith

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Red Antler’s Emily Heyward explains how to get people obsessed with your brand

If you’re currently building a startup, you know what product you want to build. But do you know if people are actually going to notice you? That’s the question I asked of Red Antler co-founder Emily Heyward during our virtual TechCrunch Early Stage event.

In case you’re not familiar with Red Antler, Heyward’s branding company has worked with some of the most iconic startups of the past decade, such as Casper, Allbirds, Brandless and Prose. She knows her topic so well that she just wrote a book on branding called “Obsessed.”

Let me break down the key takeaways of her presentation and responses to questions from our virtual audience — we’ve embedded a video below with our entire conversation.

Branding matters — anybody can launch a startup

It has never been easier to launch a startup. If it’s a software company, your infrastructure will be managed by a cloud hosting company. If you’re selling consumer goods, you can find manufacturing partners more easily than ever before.

“There are fewer traditional gatekeepers standing in your way. You don’t need to be able to afford a national TV campaign to get people to notice you and to hear about you. It’s a lot easier to get it out there and start selling directly to people,” Heyward said.

The result is that there are many companies competing in the same space, launching around the same time. Casper isn’t the only online mattress company anymore for instance. Brand obsession can set you apart from the rest of the crowd.

#airbnb, #brand-marketing, #casper, #emily-heyward, #graphic-design, #growth-marketing, #product-management, #red-antler, #startups, #tc

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Unicorn rodeo: 6 high-flying startups that are set to go public

This week Airbnb announced that it has privately filed to go public, putting the famous unicorn on a path to a quick IPO if it wants. The recent move matches reporting indicating that the home-sharing upstart could yet go public in 2020 despite the collapse of the travel industry.


The Exchange explores startups, markets and money. You can read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.


But Airbnb is not the only venture-backed company of note that is looking to go public at the moment, or that has privately filed to go public. Indeed, so many unicorns are looking to get out the door in the next quarter or two, I’ve started to lose track of their status.

So, this morning, let’s gather a digest of each unicorn that has filed privately, is expected to debut shortly, or may go public in the next year or two. We’re talking Airbnb, Asana, ThredUp, Qualtrics, Palantir and Ant first, and then more loosely about the huge cadre of companies that could go public before the end of 2022, like UIPath, Intercom, and, sure, Robinhood as well.

Today is Friday, which means we can afford to take a minute, center ourselves and make sure that we’re ready for the news that next week will inevitably bring. So let’s have a little fun.

Upcoming unicorn IPOs

In order to keep this digestible, we’ll proceed in bulleted-list format. Starting with the biggest news, let’s remind ourselves of Airbnb’s decline and recovery, starting with revenue numbers:

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No parties allowed at the Airbnb IPO

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast (now on Twitter!), where we unpack the numbers behind the headlines.

What happens when the entire podcast crew is a bit tired from, you know, everything, and does its very best? This episode, apparently. A big thanks to Chris Gates for helping us trim the fat and make something good for you.

Before we get into the topics of the week, don’t forget that Equity is not back on YouTube most weeks, so if you wanted to see us do the talking with some fun extra from the production team, you can do so here. More to come once I get my new external camera to work.

That done, here’s what Natasha and Danny and I got into this week:

Whew! We’re doing a lot over at TechCrunch.com, so, stay tuned and know that if we were a bit frazzled this week it’s because we’re working our backends off to bring you neat things. You will dig ’em.

Ok, chat Monday, a show that we’re already planning. Stay cool!

Equity drops every Monday at 7:00 a.m. PT and Friday at 6:00 a.m. PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

#airbnb, #apple, #asana, #carrot-fertility, #chamath-palihapitiya, #direct-listing, #equity, #ipo, #liquidity, #podcasts, #spac, #tc, #tesla, #venture-capital, #welcome

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