Extra Crunch roundup: Tonal EC-1, Deliveroo’s rocky IPO, is Substack really worth $650M?

For this morning’s column, Alex Wilhelm looked back on the last few months, “a busy season for technology exits” that followed a hot Q4 2020.

We’re seeing signs of an IPO market that may be cooling, but even so, “there are sufficient SPACs to take the entire recent Y Combinator class public,” he notes.

Once we factor in private equity firms with pockets full of money, it’s evident that late-stage companies have three solid choices for leveling up.

Seeking more insight into these liquidity options, Alex interviewed:

  • DigitalOcean CEO Yancey Spruill, whose company went public via IPO;
  • Latch CFO Garth Mitchell, who discussed his startup’s merger with real estate SPAC $TSIA;
  • Brian Cruver, founder and CEO of AlertMedia, which recently sold to a private equity firm.

After recapping their deals, each executive explains how their company determined which flashing red “EXIT” sign to follow. As Alex observed, “choosing which option is best from a buffet’s worth of possibilities is an interesting task.”

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

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


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


The Tonal EC-1

Image Credits: Nigel Sussman

On Tuesday, we published a four-part series on Tonal, a home fitness startup that has raised $200 million since it launched in 2018. The company’s patented hardware combines digital weights, coaching and AI in a wall-mounted system that sells for $2,995.

By any measure, it is poised for success — sales increased 800% between December 2019 and 2020, and by the end of this year, the company will have 60 retail locations. On Wednesday, Tonal reported a $250 million Series E that valued the company at $1.6 billion.

Our deep dive examines Tonal’s origins, product development timeline, its go-to-market strategy and other aspects that combined to spark investor interest and customer delight.

We call this format the “EC-1,” since these stories are as comprehensive and illuminating as the S-1 forms startups must file with the SEC before going public.

Here’s how the Tonal EC-1 breaks down:

We have more EC-1s in the works about other late-stage startups that are doing big things well and making news in the process.

What to make of Deliveroo’s rough IPO debut

Why did Deliveroo struggle when it began to trade? Is it suffering from cultural dissonance between its high-growth model and more conservative European investors?

Let’s peek at the numbers and find out.

Kaltura puts debut on hold. Is the tech IPO window closing?

The Exchange doubts many folks expected the IPO climate to get so chilly without warning. But we could be in for a Q2 pause in the formerly scorching climate for tech debuts.

Is Substack really worth $650M?

A $65 million Series B is remarkable, even by 2021 standards. But the fact that a16z is pouring more capital into the alt-media space is not a surprise.

Substack is a place where publications have bled some well-known talent, shifting the center of gravity in media. Let’s take a look at Substack’s historical growth.

RPA market surges as investors, vendors capitalize on pandemic-driven tech shift

Business process organization and analytics. Business process visualization and representation, automated workflow system concept. Vector concept creative illustration

Image Credits: Visual Generation / Getty Images

Robotic process automation came to the fore during the pandemic as companies took steps to digitally transform. When employees couldn’t be in the same office together, it became crucial to cobble together more automated workflows that required fewer people in the loop.

RPA has enabled executives to provide a level of automation that essentially buys them time to update systems to more modern approaches while reducing the large number of mundane manual tasks that are part of every industry’s workflow.

E-commerce roll-ups are the next wave of disruption in consumer packaged goods

This year is all about the roll-ups, the aggregation of smaller companies into larger firms, creating a potentially compelling path for equity value. The interest in creating value through e-commerce brands is particularly striking.

Just a year ago, digitally native brands had fallen out of favor with venture capitalists after so many failed to create venture-scale returns. So what’s the roll-up hype about?

Hack takes: A CISO and a hacker detail how they’d respond to the Exchange breach

3d Flat isometric vector concept of data breach, confidential data stealing, cyber attack.

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

The cyber world has entered a new era in which attacks are becoming more frequent and happening on a larger scale than ever before. Massive hacks affecting thousands of high-level American companies and agencies have dominated the news recently. Chief among these are the December SolarWinds/FireEye breach and the more recent Microsoft Exchange server breach.

Everyone wants to know: If you’ve been hit with the Exchange breach, what should you do?

5 machine learning essentials nontechnical leaders need to understand

Jumble of multicoloured wires untangling into straight lines over a white background. Cape Town, South Africa. Feb 2019.

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

Machine learning has become the foundation of business and growth acceleration because of the incredible pace of change and development in this space.

But for engineering and team leaders without an ML background, this can also feel overwhelming and intimidating.

Here are best practices and must-know components broken down into five practical and easily applicable lessons.

Embedded procurement will make every company its own marketplace

Businesswomen using mobile phone analyzing data and economic growth graph chart. Technology digital marketing and network connection.

Image Credits: Busakorn Pongparnit / Getty Images

Embedded procurement is the natural evolution of embedded fintech.

In this next wave, businesses will buy things they need through vertical B2B apps, rather than through sales reps, distributors or an individual merchant’s website.

Knowing when your startup should go all-in on business development

One red line with arrow head breaking out from a business or finance growth chart canvas.

Image Credits: twomeows / Getty Images

There’s a persistent fallacy swirling around that any startup growing pain or scaling problem can be solved with business development.

That’s frankly not true.

Dear Sophie: What should I know about prenups and getting a green card through marriage?

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

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie:

I’m a founder of a startup on an E-2 investor visa and just got engaged! My soon-to-be spouse will sponsor me for a green card.

Are there any minimum salary requirements for her to sponsor me? Is there anything I should keep in mind before starting the green card process?

— Betrothed in Belmont

Startups must curb bureaucracy to ensure agile data governance

Image of a computer, phone and clock on a desk tied in red tape.

Image Credits: RichVintage / Getty Images

Many organizations perceive data management as being akin to data governance, where responsibilities are centered around establishing controls and audit procedures, and things are viewed from a defensive lens.

That defensiveness is admittedly justified, particularly given the potential financial and reputational damages caused by data mismanagement and leakage.

Nonetheless, there’s an element of myopia here, and being excessively cautious can prevent organizations from realizing the benefits of data-driven collaboration, particularly when it comes to software and product development.

Bring CISOs into the C-suite to bake cybersecurity into company culture

Mixed race businesswoman using tablet computer in server room

Image Credits: Jetta Productions Inc (opens in a new window) / Getty Images

Cyber strategy and company strategy are inextricably linked. Consequently, chief information security officers in the C-Suite will be just as common and influential as CFOs in maximizing shareholder value.

How is edtech spending its extra capital?

Money tree: an adult hand reaches for dollar bills growing on a leafless tree

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

Edtech unicorns have boatloads of cash to spend following the capital boost to the sector in 2020. As a result, edtech M&A activity has continued to swell.

The idea of a well-capitalized startup buying competitors to complement its core business is nothing new, but exits in this sector are notable because the money used to buy startups can be seen as an effect of the pandemic’s impact on remote education.

But in the past week, the consolidation environment made a clear statement: Pandemic-proven startups are scooping up talent — and fast.

Tech in Mexico: A confluence of Latin America, the US and Asia

Aerial view of crowd connected by lines

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

Knowledge transfer is not the only trend flowing in the U.S.-Asia-LatAm nexus. Competition is afoot as well.

Because of similar market conditions, Asian tech giants are directly expanding into Mexico and other LatAm countries.

 

How we improved net retention by 30+ points in 2 quarters

Sparks coming off US dollar bill attached to jumper cables

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

There’s certainly no shortage of SaaS performance metrics leaders focus on, but NRR (net revenue retention) is without question the most underrated metric out there.

NRR is simply total revenue minus any revenue churn plus any revenue expansion from upgrades, cross-sells or upsells. The greater the NRR, the quicker companies can scale.

5 mistakes creators make building new games on Roblox

BRAZIL - 2021/03/24: In this photo illustration a Roblox logo seen displayed on a smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images)

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

Even the most experienced and talented game designers from the mobile F2P business usually fail to understand what features matter to Robloxians.

For those just starting their journey in Roblox game development, these are the most common mistakes gaming professionals make on Roblox.

 

CEO Manish Chandra, investor Navin Chaddha explain why Poshmark’s Series A deck sings

CEO Manish Chandra, investor Navin Chaddha explain why Poshmark’s Series A deck sings image

“Lead with love, and the money comes.” It’s one of the cornerstone values at Poshmark. On the latest episode of Extra Crunch Live, Chandra and Chaddha sat down with us and walked us through their original Series A pitch deck.

 

Will the pandemic spur a smart rebirth for cities?

New versus old - an old brick building reflected in windows of modern new facade

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

Cities are bustling hubs where people live, work and play. When the pandemic hit, some people fled major metropolitan markets for smaller towns — raising questions about the future validity of cities.

But those who predicted that COVID-19 would destroy major urban communities might want to stop shorting the resilience of these municipalities and start going long on what the post-pandemic future looks like.

 

The NFT craze will be a boon for lawyers

3d rendering of pink piggy bank standing on sounding block with gavel lying beside on light-blue background with copy space. Money matters. Lawsuit for money. Auction bids.

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

There’s plenty of uncertainty surrounding copyright issues, fraud and adult content, and legal implications are the crux of the NFT trend.

Whether a court would protect the receipt-holder’s ownership over a given file depends on a variety of factors. All of these concerns mean artists may need to lawyer up.

Viewing Cazoo’s proposed SPAC debut through Carvana’s windshield

It’s a reasonable question: Why would anyone pay that much for Cazoo today if Carvana is more profitable and whatnot? Well, growth. That’s the argument anyway.

#artificial-intelligence, #corporate-finance, #deliveroo, #ec-1, #entrepreneurship, #extra-crunch-roundup, #kaltura, #latin-america, #machine-learning, #roblox, #startups, #substack, #tc, #tonal, #venture-capital

0

Manticore Games raises $100 million to build a ‘creator multiverse’

The gaming sector has never been hotter or had higher expectations from investors who are dumping billions into upstarts that can adjust to shifting tides faster that the existing giants will.

Bay Area-based Manticore Games is one of the second-layer gaming platforms looking to build on the market’s momentum. The startup tells TechCrunch they’ve closed a $100 million Series C funding round, bringing their total funding to $160 million. The round was led by XN, with participation from Softbank and LVP alongside existing investors Benchmark, Bitkraft, Correlation Ventures and Epic Games.

When Manticore closed its Series B back in September 2019, VCs were starting to take Roblox and the gaming sector more seriously, but it took the pandemic hitting to really expand their expectations for the market. “Gaming is now a bonafide super category,” CEO Frederic Descamps tells TechCrunch.

Manticore’s Core gaming platform is quite similar to Roblox conceptually, the big difference is that the gaming company is aiming to quickly scale up a games and creator platform geared towards the 13+ crowd that may have already left Roblox behind. The challenge will be coaxing that demographic faster than Roblox can expand its own ambitions, and doing so while other venture-backed gaming startups like Rec Room, which recently raised at a $1.2 billion valuation, race for the same prize.

Like other players, Manticore is attempting to build a game discovery platform directly into a game engine. They haven’t built the engine tech from scratch, they’ve been working closely with Epic Games which makes the Unreal Engine and made a $15 million investment in the company last year.

A big focus of the Core platform is giving creators a true drag-and-drop platform for game creation with a specific focus on “remixing” allowing users to pick pre-made environments, drop pre-rendered 3D assets into them, choose a game mode and publish it to the web. For creators looking to inject new mechanics or assets into a title, there will be some technical know-how necessary but Manticore’s team hopes that making the barriers of entry low for new creators means that they can grow alongside the platform. Manticore’s big bet is on the flexibility of their engine, hoping that creators will come on board for the chance to engineer their own mechanics or create their own path towards monetization, something established app store wouldn’t allow them to.

“Creators can implement their own styles of [in-app purchases] and what we’re really hoping for here is that maybe the next battle pass equivalent innovation will come out of this,” co-founder Jordan Maynard tells us.

This all comes at an added cost, developers earn 50% of revenues from their games, leaving more potential revenue locked up in fees routed to the platforms that Manticore depends on than if they built for the App Store directly, but this revenue split is still much friendlier to creators that what they can earn on platforms like Roblox.

Building cross-platform secondary gaming platforms is host to plenty of its own challenges. The platforms involved not only have to deal with stacking revenue share fees on non-PC platforms, but some hardware platforms that are reticent to allow them all, an area where Sony has been a particular stickler with PlayStation. The long-term success of these platforms may ultimately rely on greater independence, something that seems hard to imagine happening on consoles and mobile ecosystems.

#app-store, #ceo, #co-founder, #core, #correlation-ventures, #epic-games, #frederic-descamps, #funding, #gaming, #jordan-maynard, #online-games, #roblox, #softbank, #sony, #video-game, #video-games, #video-gaming

0

Consumers spent $32B on apps in Q1 2021, the biggest quarter on record

The pandemic’s remarkable impact on the app industry has not slowed down in 2021. In fact, consumer spending in apps has hit a new record in the first quarter of this year, a new report from App Annie indicates. The firm says consumers in Q1 2021 spent $32 billion on apps across both iOS and Google Play, up 40% year-over-year from Q1 2020. It’s the largest-ever quarter on record, App Annie also notes.

Last year saw both app downloads and consumer spend increase, as people rapidly adopted apps under coronavirus lockdowns — including apps for work, school, shopping, fitness, entertainment, gaming and more. App Annie previously reported a record 218 billion in global downloads and record consumer spend of $143 billion for the year.

Image Credits: App Annie

These trends have continued into 2021, it seems, with mobile consumers spending roughly $9 billion more in Q1 2021 compared with Q1 2020. Although iOS saw larger consumer spend than Android in the quarter — $21 billion vs. $11 billion, respectively — both stores grew by the same percentage, 40%.

But the types of apps driving spending were slightly different from store to store.

On Google Play, Games, Social and Entertainment apps saw the strongest quarter-over-quarter growth in terms of consumer spending, while Games, Photo & Video, and Entertainment apps accounted for the strongest growth on iOS.

By downloads, the categories were different between the stores, as well.

On Google Play, Social, Tools, and Fiance saw the biggest download growth in Q1, while Games, Finance and Social Networking drove download growth for iOS. Also on Google Play, other top categories included Weather (40%) and Dating (35%), while iOS saw Health and Fitness app downloads grow by a notable 25% — likely a perfect storm as New Year’s Resolutions combined with continued stay-at-measures that encouraged users to find new ways to stay fit without going to a gym.

Image Credits: App Annie

The top apps in the quarter remained fairly consistent, however. TikTok beat Facebook, in terms of downloads, and was followed by Instagram, Telegram, WhatsApp and Zoom. But the short-form video app only made it to No. 2 in terms of consumer spend, with YouTube snagging the top spot. Tinder, Disney+, Tencent Video, and others followed. (Netflix has dropped off this chart as it now directs new users to sign up directly, rather than through in-app purchases).

Image Credits: App Annie

Though Facebook’s apps have fallen behind TikTok by downloads, its apps — including Facebook, WhatsApp, Messenger and Instagram — still led the market in terms monthly active users (MAUs) in the quarter. TikTok, meanwhile, ranked No. 8 by this metric.

Up-and-comers in the quarter included privacy-focused messaging app Signal, which saw the strongest growth in the quarter by both downloads and MAUs — a calculation that App Annie calls “breakout apps.”  Telegram closely followed, as users bailed from mainstream social after the Capitol riot. Another “breakout” app was MX TakaTak, which is filling the hole in the market for short-form video that resulted from India’s ban  of TikTok.

Image Credits: App Annie

Gaming, meanwhile, drove a majority of the quarter’s spending, as usual, accounting for $22 billion of the spend — $13 billion on iOS (up 30% year-over-year) and $9 billion on Android (up 35%). Gamers downloaded about a billion titles per week, up 15% year-over-year from 2020.

Among Us! dropped to No. 2 in the quarter by downloads, replaced by Join Clash 3D, while DOP 2: Delete One Part jumped 308 places to reach No. 3.

Image Credits: App Annie

Roblox led by consumer spend, followed by Genshin Impact, Coin Master, Pokemon Go and others. And although Among Us! dropped on the charts by downloads, it remained No. 1 by monthly active users in the quarter, followed by PUBG Mobile, Candy Crush Saga, Roblox and others.

App Annie notes that the pandemic also accelerated the mobile gaming market, with game downloads outpacing overall downloads by 2.5x in 2020. It predicts that mobile gaming will reach  $120 billion in consumer spending this year, or 1.5x all other gaming formats combined.

#android, #app-annie, #apps, #computing, #disney, #facebook, #google-play, #india, #messenger, #mobile-applications, #netflix, #roblox, #tiktok, #whatsapp

0

5 mistakes creators make building new games on Roblox

With Roblox’s massive IPO this month, game developers, brands and investors alike are wondering what factors cause the most successful games on this $47 billion platform to break out from the millions of user-generated passion projects.

According to Roblox’s S-1 filing, nearly 250 developers and creators earned $100,000 or more in Robux in the year through September 2020 out of nearly 1 million creators on the platform.

From Gamefam’s first game two years ago that topped out at only 25 concurrent players to our current portfolio with 2 million to 3 million daily visits, our team learned to develop on Roblox the hard way — by trial and error and by getting better at listening to the Roblox community’s unique gamer culture and vernacular.

Even the most experienced and talented game designers from the mobile F2P business usually fail to understand what features matter to Robloxians.

For those entrepreneurs just starting their journey in Roblox game development, these are the most common mistakes I have seen gaming professionals (myself included) make on Roblox:

1. Using the established free-to-play (F2P) mobile game mechanics

In the F2P mobile games market, it’s all about layered game loops: play a match with the hero, level the hero up using resources from the match, buy more heroes to merge with the first hero, open up new matches with new rules to win more resources, and on and on. These require ongoing player tutorials across hours of play sessions. These mechanics tend to backfire on Roblox because players have no tolerance for anything but immediate, visceral fun.

Accordingly, in mobile F2P, a robust tutorial for new users is oftentimes one of the biggest investments during development. But in our Roblox game Speed Run Simulator (more than 400,000 daily visits), we saw a significant increase in D1 retention when we removed the tutorial entirely and just allowed existing players to guide new players’ understanding of the game. The differences between Roblox and mobile F2P are not only numerous but also sometimes profoundly counterintuitive.

2. Optimizing to make money off of “whales”

Roblox players spend because they’re getting something they want. They won’t be cajoled or coerced into spending like in a mobile game where progress is restricted or slowed without making an in-app purchase (think Candy Crush).

#column, #ec-column, #ec-gaming, #gamefam, #gaming, #online-games, #roblox, #tc, #video-games

0

Rec Room raises at $1.25B valuation from Sequoia and Index as VCs push to find another Roblox

Investor FOMO following Roblox’s blockbuster public debut is pushing venture capitalists who missed out on that gaming giant to invest in competing platforms.

Today, Rec Room announced it has raised $100 million from Sequoia and Index, with participation from Madrona Venture Group. The deal is a huge influx of capital for Rec Room, which had raised less than $50 million before this round, including a $20 million Series C that closed in December. In 2019, we reported that the company had raised its Series B at a $126 million valuation, this latest deal values the company at $1.25 billion, showcasing how investor sentiment for the gaming space has shifted in the wake of Roblox’s monster growth.

Rec Room launched as a virtual reality-only platform, but as headset sales creeped along slowly, the company embraced traditional game consoles, PC and mobile to expand its reach.

In a press release accompanying today’s funding announcement, Rec Room detailed it has surpassed 15 million “lifetime users” and had shown 566% year-over-year revenue growth. In December, CEO Nick Fajt told TechCrunch that the company has tripled its player base in the past 12 months.

The company has been following in Roblox’s footsteps in many ways as it build out its creator tools and seeks to build out an on-platform economy for game creators. The company says that two million players have created content on the platform and that Rec Room is on track to pay out more than $1 million to them this year.

#ceo, #gaming, #madrona-venture-group, #player, #rec-room, #roblox, #series-b, #tc, #techcrunch, #venture-capital, #video-games, #video-gaming, #virtual-reality

0

The Roblox final fantasy

Hello friends, and welcome to Week in Review.

Last week, I talked a bit about NFTs and their impact on artists. If you’re inundated with NFT talk just take one quick look at this story I wrote this week about the $69 million sale of Beeple’s photo collage. This hype cycle is probably all the result of crypto folks talking each other up and buying each other’s stuff, but that doesn’t mean there won’t be lasting impacts. That said, I would imagine we’re pretty close to the peak of this wave, with a larger one down the road after things cool off a bit. I’ve been wrong before though…

This week, I’m interested in a quick look at what your kids have been talking about all these years. Yes, Roblox.

If you’re reading this on the TechCrunch site, you can get this in your inbox from the newsletter page, and follow my tweets @lucasmtny.


David Baszucki, founder and CEO of Roblox - Roblox Developer Conference 2019

(Photo by Ian Tuttle/Getty Images for Roblox)

The big thing

Roblox went public on the New York Stock Exchange this week, scoring a $38 billion market cap after its first couple days of trading.

Investors rallied around the idea that Roblox is one of the most valuable gaming companies in existence. More than Unity, Zynga, Take-Two, even gaming giant Electronic Arts. It’s still got a ways to go to take down Microsoft, Sony or Apple though… The now-public company is so freaking huge because investors believe the company has tapped into something that none of the others have, a true interconnected creative marketplace where gamers can evolve alongside an evolving library of experiences that all share the same DNA (and in-game currency).

The gaming industry has entered a very democratic stride as cross-play tears down some of the walls of gaming’s platform dynamics. Each hardware platform that operates an app store of their own still has the keys to a kingdom, but it’s a shifting world with uncertainty ahead. While massive publishers have tapped cloud gaming as the trend that will string their blockbuster franchises together, they all wish they were in Roblox’s position. The gaming industry has seen plenty of Goliath’s in its day, but for every major MMO to strike it rich, it’s still just another winner in a field of disparate hits with no connective tissue.

Roblox is different, and while many of us still have the aged vision of the image above: a bunch of rudimentary Minecraft/Playmobile-looking mini-games, Roblox’s game creation tools are advancing quickly and developers are building photorealistic games that are wider in ambition and scope than before. As the company levels-up the age range it appeals to — both by holding its grasp on aging gamers on its platform and using souped-up titles to appeal to a new-generation — there’s a wholly unique platform opportunity here: the chance to have the longevity of an app store but with the social base layer that today’s cacophony of titles have never shared.

Whether or not Roblox is the “metaverse” that folks in the gaming world have been hyping, it certainly looks more like it than any other modern gaming company does.


SHENYANG, CHINA – MARCH 08: Customers try out iPhone 12 smartphones at an Apple store on March 8, 2021 in Shenyang, Liaoning Province of China. (Photo by VCG/VCG via Getty Images)

Other things

Apple releases some important security patches
It was honestly a pretty low-key week of tech news, I’ll admit, but folks in the security world might not totally buy that characterization. This week, Apple released some critical updates for its devices, fixing a Safari vulnerability that could allow attackers to run malicious code on a user’s unpatched devices. Update your stuff, y’all.

TikTok gets proactive on online bullying
New social media platforms have had the benefit of seeing the easy L’s that Facebook teed itself up for. For TikTok, its China connection means that there’s less room for error when it comes to easily avoidable losses. The team announced some new anti-bullying features aimed at cutting down on toxicity in comment feeds.

Dropbox buys DocSend
Cloud storage giants are probably in need of a little reinvention, the enterprise software boom of the pandemic has seemed to create mind-blowing amounts of value for every SaaS company except these players. This week, Dropbox made a relatively big bet on document sharing startup DocSend. It’s seemingly a pretty natural fit for them, but can they turn in into a bigger opportunity?

Epic Games buys photogrammetry studio
As graphics cards and consoles have hit new levels of power, games have had to satisfy desired for more details and complexity. It takes a wild amount of time to create 3D assets with that complexity so plenty of game developers have leaned on photogrammetry which turns a series of photos or scans of a real world object or environment into a 3D model. This week, Epic Games bought one of the better known software makers in this space, called Capturing Reality, with the aim of integrating the tech into future versions of their game engine.

Twitter Spaces launches publicly next month
I’ve spent some more time with Twitter Spaces this week and am growing convinced that it has a substantial chance to kneecap Clubhouse’s growth. Twitter is notoriously slow to roll out products, but it seems they’ve been hitting the gas on Spaces, announcing this week that it will be available widely by next month.

Seth Rogen starts a weed company
There’s a lot of money in startups, there’s really never been a better time to get capital for a project… if you know the right people and have the right kind of expertise. Seth Rogen and weed are a pretty solid mental combo and him starting a weed company shouldn’t be a big shock.


A Coupang Corp. delivery truck drives past a company's fulfillment center in Bucheon, South Korea, on Friday, Feb. 19, 2021. South Korean e-commerce giant Coupang filed for an initial public offering in the U.S. and that could raise billions of dollars to battle rivals and kick off a record year for IPOs in the Asian country. Photographer: SeongJoon Cho/Bloomberg via Getty Images

SeongJoon Cho/Bloomberg via Getty Images

Extra things

Some of my favorite reads from our Extra Crunch subscription service this week:

Coupang follows Roblox to a strong first day of trading
“Another day brings another public debut of a multibillion-dollar company that performed well out of the gate.This time it’s Coupang, whose shares are currently up just over 46% to more than $51 after pricing at $35, $1 above the South Korean e-commerce giant’s IPO price range. Raising one’s range and then pricing above it only to see the public markets take the new equity higher is somewhat par for the course when it comes to the most successful recent debuts, to which we can add Coupang.” More

How nontechnical talent can break into deep tech
“Startup hiring processes can be opaque, and breaking into the deep tech world as a nontechnical person seems daunting. As someone with no initial research background wanting to work in biotech, I felt this challenge personally. In the past year, I landed several opportunities working for and with deep tech companies. More

Does your VC have an investment thesis or a hypothesis?
“Venture capitalists love to talk investment theses: on Twitter, Medium, Clubhouse, at conferences. And yet, when you take a closer look, theses are often meaningless and/or misleading…” More


Once more, if you liked reading this, you can get it in your inbox from the newsletter page, and follow my tweets @lucasmtny.

#apple, #apple-inc, #china, #cloud-gaming, #computing, #coupang, #docsend, #dropbox, #electronic-arts, #epic-games, #extra-crunch, #facebook, #gamer, #getty, #getty-images, #iphone, #microsoft, #online-games, #roblox, #smartphones, #software, #sony, #tc, #technology, #twitter, #week-in-review, #zynga

0

Should there be some law against raising three times in one year?

Welcome back to The TechCrunch Exchange, a weekly startups-and-markets newsletter. It’s broadly based on the daily column that appears on Extra Crunch, but free, and made for your weekend reading. Want it in your inbox every Saturday morning? Sign up here.

Ready? Let’s talk money, startups and spicy IPO rumors.

Every quarter we dig into the venture capital market’s global, national, and sector-based results to get a feel for what the temperature of the private market is at that point in time. These imperfect snapshots are useful. But sometimes, it’s better to focus on a single story to show what’s really going on.

Enter AgentSync. I covered AgentSync for the first time last August, when the API-focused insurtech player raised a $4.4 million seed round. It’s a neat company, helping others track the eligibility of individual brokers in the market. It’s a big space, and the startup was showing rapid initial traction in the form of $1.9 million in annual recurring revenue (ARR).

But then AgentSync raised again in December, sharing at the time of its $6.4 million round that the valuation cap had grown by 4x since its last round. And that it had seen 4x revenue growth since the start of the pandemic.

All that must sound pretty pedestrian; a quickly-growing software company raising two rounds? Quelle surprise.

But then AgentSync raised again this week, with another grip of datapoints. Becca Szkutak and Alex Konrad’s Midas Touch newsletter reported the sheaf of data, and The Exchange confirmed the numbers with AgentSync CEO Niji Sabharwal. They are as follows:

  • Present-day revenues of less than $10 million, but with ARR growing by 6x in 2020 after 10x expansion in 2019.
  • No customer churn to date.
  • Its $25 million Series A valued the company at $220 million, which Konrad and Szkutak describe as “exactly 10x AgentSync’s valuation from eight months ago.”

That means AgentSync was worth $22 million when it raised $4.4 million, and the December round was raised at a cap of around $80 million. Fun.

Back to our original point, the big datasets can provide useful you-are-here guidance for the sector, but it’s stories like AgentSync that I think better show what the market is really like today for hot startups. It’s bonkers fast and, even more, often backed up by material growth.

Sabharwal also told The Exchange that his company has closed another $1 million in ARR since the term sheet. So its multiples are contracting even before it shared its news. 

2021, there you have it.

Meet Conscience.vc

Also this week I got to meet Ariana Thacker, who is building a venture capital fund. Her route to her own venture shop included stops at Rhapsody Venture Partners, and some time at Predictive VC. Now she’s working on Conscience.vc, or perhaps just Conscience.

Her new fund will invest in companies worth less than $15 million, have some form of consumer-facing business model (B2B and B2B2C are both fine, she said), and something to do with science, be it a patentable technology or other sort of IP. Why the science focus? It’s Thacker’s background, thanks to her background in chemical engineering and time as a facilities engineer for a joint Exxon-Shell project. 

All that’s neat and interesting, but as we cover zero new-fund announcements on The Exchange and almost never mini-profile VCs, why break out of the pattern? Because unlike nearly everyone in her profession, Thacker was super upfront with data and metrics.

Heck, in her first email she included a list of her investments across different capital vehicles with actual information about the deals. And then she shared more material on different investments and the like. Imagine if more VCs shared more of their stuff? That would rock.

Conscience had its first close in mid-January, though more capital might land before she wraps up the fundraising process. She’s reached $4 million to $5 million in commits, with a cap of $10 million on the fund. And, she told The Exchange, she didn’t know a single LP before last summer and only secured an anchor investor last October.

Let’s see what Thacker gets done. But at a minimum I think she’ll be willing to be somewhat transparent as she invests from her first fund. That alone will command more attention from these pages than most micro-funds could ever manage.

A whole bunch of other important shit

The week was super busy, so I missed a host of things that I would have otherwise liked to have written about. Here they are in no particular order:

  • FalconX, a startup that powers crypto-trading on other platforms, raised $50 million this week. The round comes after the company raised $17 million last May. I wrote about that here. Tiger Global led the round, natch, as it has led nearly every round in the last month. 
  • The FalconX round matters as the company grew from what we presume was a modest trading and revenue base into something much larger. Per the company, in “less than a year” the company’s “trading volume” grew by 12x and its “net revenue” grew 46x. That’s a lot. 
  • Privacera also raised $50 million this week. Insight Partners led the round. The deal caught my eye as it promised a “cloud-based data governance and security solution.” That reminded me of Skyflow, a quickly-growing startup that I thought might have a similar product. Privacera CEO Balaji Ganesan politely corrected my confusion in an email saying that “Skyflow is like a vault for customer data. They replace customer data with tokens. Our focus is on data governance, so it is broader. We don’t store customer data within our solution.” Fair enough. It’s still an interesting space.
  • And then there’s Woflow, which VentureBeat actually got to before I could. I chatted with the company this week, but sadly have more notes than open word count today. So let it suffice to say that the company’s model of selling structured merchant data is super cool. And the fact that it has linked up with customers in its first vertical (restaurants) like DoorDash is impressive.
  • Its round was led by Craft Ventures, a firm that has been pretty damn active in the API-powered startup landscape in recent months. More to come on Woflow.

Various and Sundry

Closing, I learned a lot about software valuations here, got to noodle on the epic Roblox direct listing here, dug into fintech’s venture successes and weaknesses, and checked out the Global-e IPO filing. Oh, and M1 Finance raised again, while Clara and Arist raised small, but fun rounds.

Alex

#agentsync, #clara, #fintech, #fundings-exits, #global-e, #m1-finance, #roblox, #saas, #startups, #the-exchange, #woflow

0

Extra Crunch roundup: Coupang and Roblox debut, driving GPT-3 adoption, startup how-tos, more

Extra Crunch publishes a variety of article types, but how-tos are my favorite category.

For many entrepreneurs, the startup they are trying to get off the ground might be only the second entry on their resume. As a result, they don’t have much experience to draw from when it comes to basics like hiring, fundraising and growth marketing.

Last week, Natasha Mascarenhas interviewed experts who had some strategic advice for finding the right time to bring a product manager on board. This afternoon, we published a guest post by growth marketer Jessica Li with tips for “how nontechnical talent can build relationships with deep tech companies.”

We’ve also received great feedback on a recent guest post about bootstrapping options for SaaS founders written by a founder who’s actually done it.


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


If you have some startup-related “how” and “why” questions, please browse our Extra Crunch How To stories. They’re aimed squarely at early-stage founders and workers trying to solve long-term problems.

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

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

Welcome to Bloxburg, public investors

SAN FRANCISCO, CA - SEPTEMBER 05: Roblox Corporation Founder and CEO David Baszucki speaks onstage during Day 1 of TechCrunch Disrupt SF 2018 at Moscone Center on September 5, 2018 in San Francisco, California.

Image Credits: Steve Jennings / Getty Images

As Roblox began to trade Wednesday, the company’s shares shot above its reference price of $45 per share. Roblox, a gaming company aimed at children, has had a tumultuous if exciting path to the public markets.

Seeing Roblox trade so very far above its direct listing reference price and final private valuation appears to undercut the argument that this sort of debut can sort out pricing issues inherent in more traditional IPOs.

4 ways startups will drive GPT-3 adoption in 2021

Robot paper holding pen, space for text

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

Trained on trillions of words, GPT-3 is a 175-billion parameter transformer model — the third of such models released by OpenAI.

GPT-3 is remarkable in its ability to generate human-like text and responses, able to return coherent and topical emails, tweets, trivia and much more. In 2021, this technology will power the launch of a thousand new startups and applications.

There have never been more $100M+ fintech rounds than right now

We are in a period of all-time record investment for so-called mega-rounds, or investments of $100 million or more inside the fintech realm.

To date, Q1 2021 is ahead and is thus guaranteed to set a new record, having already bested the preceding all-time high. What’s going on?

Global-e files to go public as e-commerce startups enjoy a renaissance

Global-e, an e-commerce platform that helps online sellers reach global consumers, filed to go public on Tuesday. Global-e’s business exploded amid the pandemic in 2020, and the company expects that the COVID-fueled shift to e-commerce will only lead to future growth.

 

Passive collaboration is essential to remote work’s long-term success

Afro-caribbean woman working from home during the Covid lockdown

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

Have you ever popped into a meeting because you overheard a snippet of a conversation and wanted to share your perspective?

That’s passive collaboration — low-friction ways to invite new ideas. But it’s only when we’re able to fully realize passive collaboration virtually that we’ll have unlocked the full potential of remote and hybrid work situations.

 

Dear Sophie: What are the pros and cons of the H-1B, O-1A and EB-1A?

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

Image Credits: Bryce Durbin/TechCrunch

Dear Sophie:

I’m an entrepreneur who wants to expand my startup to the U.S. What are the benefits and drawbacks of various types of visas and green cards?

The ones I’ve heard the most about are the H-1B, O-1 and EB-1A.

— Intelligent in India

 

Proactive CEOs should prioritize European expansion

Map of Europe in blue with light shining through

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

Many investors will encourage CEOs to remain U.S.-centric this year and perhaps expand their product offering or move into new market segments. But 95% of the world’s population lives outside the U.S., making an expansion into Europe your best growth lever.

 

Coupang follows Roblox to a strong first day of trading

A Coupang Corp. delivery truck drives past a company's fulfillment center in Bucheon, South Korea, on Friday, Feb. 19, 2021. South Korean e-commerce giant Coupang filed for an initial public offering in the U.S. and that could raise billions of dollars to battle rivals and kick off a record year for IPOs in the Asian country. Photographer: SeongJoon Cho/Bloomberg via Getty Images

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

After Roblox debuted on Wednesday, Coupang followed, with shares shooting above the South Korean e-commerce giant’s IPO price range. Quick math shows Coupang is worth around $92 billion at the moment, a huge number that nearly zero companies will ever reach.

 

How and when to hire your first product manager

Because product managers and founders often have overlapping skill sets, it can be tricky to find the right candidate.

While it’s different for every company, hiring a PM ensures companies aren’t “chasing the shiny object” but rather building the things that create enduring value for customers.

 

Deep Science: AI adventures in arts and letters

Robotic arm carrying a mechanical part

Image Credits: Alashi / Getty Images (Image has been modified)

AI isn’t confined to the tech sphere; machine learning is applicable across disciplines, from music and the “computational unfolding” of ancient letters to figuring out where EV charging stations need to be built.

 

A first look at Coursera’s S-1 filing

Image Credits: Bryce Durbin / TechCrunch

The SEC filing offers a glimpse into the finances of how an edtech company, accelerated by the pandemic, performed over the past year.

It paints a picture of growth, albeit one that came at steep expense.

 

Olo’s IPO could value the company north of $3B as Toast waits in the wings

Olo has a history of growth and profitability, making its impending pricing all the more interesting.

But are investors willing to pay more for profits? And, if so, how much?

 

From electric charging to supply chain management, InMotion Ventures preps Jaguar for a sustainable future

Image Credits: Andrew Ferraro — Handout/Jaguar Racing / Getty Images

InMotion’s investment in Circulor, a company that monitors supply chains from raw material inputs to finished outputs with an eye toward sustainable sourcing, shows the firm’s dedication to backing companies across the mobility space broadly.

 

White-label voice assistants will win the battle for podcast discovery

3D headphones with sound waves on dark background. Concept of electronic music listening and digital audio. Abstract visualization of digital sound waves and modern art. Vector illustration. (3D headphones with sound waves on dark background. Concept

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

Americans are bored, housebound and screened out, driving roughly 128 million Americans to use a voice assistant at least once a month.

This has created a golden opportunity for audio as consumers turn to podcasts, voice assistants and smart speakers.

 

Why I’m hitting pause on ARR-focused coverage

One of the first recurring features Alex Wilhelm established at Extra Crunch was the “$100M ARR Club,” ongoing coverage of startups that have reached scale.

“Forget a $1 billion valuation — $100 million in annual recurring revenue is the cool kids’ club,” he wrote in December 2019. Since then, he expanded it to cover companies that attained $50M ARR.

The concept is a useful lens for studying the market. I can say this with confidence because it’s been widely copied by other tech news outlets. But this morning, Alex surprised me — he’s shelving the ARR Club, at least for now.

“In the end it became a pre-IPO list that was fun but not entirely educational, by my reckoning,” he told me. “The $50M ARR club evolution was supposed to help shake loose more interesting operational details, but just didn’t.”

Before putting the format on hiatus, Alex’s last ARR Club roundup looks at in-office display and kiosk startup AppSpace, data backup unicorn Druva, and Synack, which makes security software.


TC Early Stage: The premier 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!

#alex-wilhelm, #appspace, #artificial-intelligence, #coupang, #coursera, #ec-how-to, #ecommerce, #entrepreneurship, #extra-crunch-roundup, #gaming, #how-to, #inmotion-ventures, #roblox, #saas, #startups, #venture-capital

0

Can you beat Google with Google’s brains?

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

Natasha and Danny and Alex and Grace were all here to chat through the week’s biggest tech happenings. Like every week, we had to leave a lot of great stuff on the cutting-room floor. But, we did get to touch on a bunch of news that we feel really matters.

Also we do wind up talking about a few Extra Crunch pieces, which is where our deeper analysis on news items lives. If the paywall is a bother, you can get access while saving 50% with the code “EQUITY.”

Here’s what we got into:

  • Crypto-art and the NFT boom continue. Check out what Beeple just did. Danny has an opinion on the matter.
  • The Roblox direct-listing does very little actually solve the IPO pricing issue. That said, well done Bloxburg.
  • We talked about the Coursera S-1, which gave us the first financial peek into an education company revitalized by the pandemic.
  • The numbers needed context, so our follow up coverage gives readers 5 takeaways from the Coursera IPO.
  • Language learning has a market, and it’s big. We talked about Preply’s $35 million raise and why tutoring marketplaces make sense.
  • Dropbox is buying DocSend, which makes pretty good sense. Even if the exit price won’t matter much for bigger funds. We’re still witnessing Dropbox and Box add more features to their product via acquisitions. Let’s see how it impacts their revenue growth.
  • Zapier buys Makerpad. We struggled to pronounce Zapier, but did have some notes on the deal and what it might mean for the no-code space.
  • Sticking the acquisition theme, PayPal bought Curv. If you were looking for more evidence that big companies are taking crypto seriously, well, here it is.
  • And to close we nerded out about Neeva. Can a Google-competitor take on Google if it was founded by ex-Googlers?

The show is back Monday morning. Stay cool!

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

#beeple, #coupang, #coursera, #crypto, #curv, #docsend, #dropbox, #equity, #equity-podcast, #fundings-exits, #google, #makerpad, #neeva, #nft, #paypal, #preply, #roblox, #startups, #tc, #zapier

0

Putting Roblox’s incredible $45 billion IPO in context

Yesterday, Roblox made good on its plans to go public, with employees and previous investors selling hundreds of millions of shares in a direct listing on the New York Stock Exchange. In a private funding round in January, those shares were worth $45. When the market closed Wednesday, they were selling at $69.50, a price that valued Roblox Corp. as a whole at $45.3 billion (as of this writing, Roblox Corp.’s stock price peaked at $77.30 and currently sits at $72.72 in Thursday morning trading).

How did this company, whose single title has become a game platform unto itself, become worth more than major game publishers like Electronic Arts and Take-Two? To help answer that question, we put together this deep dive into the numbers that are powering the Roblox revolution. They paint a picture of a company with an extremely young and incredibly engaged user base that has ballooned during the 2020 pandemic lockdowns. But Roblox is also a company that is struggling to convert its huge and growing annual revenues into profitability.

(Unless otherwise noted, numbers are sourced from SEC documents or Roblox’s own website)

Read 2 remaining paragraphs | Comments

#financial, #gaming-culture, #ipo, #roblox

0

Gamefam aims to be the first big gaming company built on Roblox

Roblox went public yesterday after seeing tremendous growth in 2020, and that’s not just good news for the company’s employees and investors — there are also startups like Gamefam hoping to take advantage of the platform’s success.

Roblox has a whole ecosystem of millions of developers and creators building on its game platform, and some are banding together to create their own teams and studios. (We profiled several of those teams earlier this year in an article about the company’s creator accelerator.) But Gamefam founder and CEO Joe Ferencz said his startup is “the first and only fully-dedicated, professional game publishing company on Roblox.”

Founded in 2019, Gamefan currently has 37 full-time employees and eight live games, including Ultimate Driving and Hot Wheels Open World, and Ferencz said there are another 10 in development. Collectively, those games are seeing 48 million monthly visitors and generating six figures in monthly revenue.

Ferencz described the team as “gaming industry professionals working hand-in-hand with the top up-and-coming Roblox creators.” For example, Ultimate Driving creator TwentyTwoPilots also serves as Gamefam’s creative director.

Ferencz himself has worked as a manager Ubisoft and Mattel, where he worked on franchises including Hot Wheels, and where he recalled seeing the emergence free-to-play mobile gaming: “I said to myself, ‘The next time there’s this big platform shift, I want to be a part of this.’” The rise of Roblox and user-created games provided him with that opportunity.

Joe Ferencz

Image Credits: Gamefam

At the same time, Ferencz said he was excited about the opportunities that Roblox provides to escape from the “orthodoxies” of free-to-play gaming, where the economics often drive game design decisions.

“Roblox truly is the metaverse for this younger generation,” he argued. “What they are finding here is something that transcends gaming, it’s human co-experience. What that means is that each game needs to have a very distinctive and attractive immersion to it in way that mobile free-to-play doesn’t.”

Of course, part of Roblox’s appeal is the fact that individual creators don’t need to work with large teams or publishers, but Ferencz said, “Superstar developers and creators are thinking about bigger and bigger games, the sophistication is really evolving at a rapid pace.” That, in turn, means bigger teams, and “when you have bigger teams, you have more process, you need to know how to structure high-performing teams and drive positive teamwork between people.”

“As the business gets bigger, you need people focused on the business opportunities, dedicated marketing functions, a dedicated live operations team,” he continued. “That’s what we offer.”

Ferencz and Gamefan’s business team have been involved in the Roblox platform for several years now, but he admitted, “Although we get it, we don’t get it exactly the way people who have been playing on it since they were 10 and developing for it since 15 get it … We respect that and lean into that.”

So one of the key elements to the Gamefam approach, he said, is to make sure the creators are driving the game development process.

“We believe that there needs to be a visionary or a team of visionaries on each project, and that they need to decide what is right,” Ferencz said. “There will then be a team around them that is part of a consensus process, that the visionaries are responsible for bringing along for a ride.”

And as he thinks about Gamefam’s future, Ferencz said the company could eventually publish games on other platforms. Don’t expect it to happen anytime soon, though.

“Our focus is UGC gaming, and Roblox is the only place that matters in UGC gaming today,” he said. “We plan to build a huge brand and media business hand-in-hand with the Roblox platform. In the long term, if other platforms become relevant, then course we will be looking to evaluate and expand on those platforms —but the truth is, right now we couldn’t be more all about Roblox.”

 

#gamefam, #gaming, #media, #roblox, #tc

0

Welcome to Bloxburg, public investors

As Roblox began to trade today, the company’s shares shot above its reference price of $45 per share. Currently, Roblox is trading at $71.10 per share, up just over 60% from the reference price that it announced last night. That effort finally set a directional value of sorts on Roblox’s shares before it floated on the public markets. 

Roblox, a gaming company aimed at children and powered by an internal economy and third-party development activity, has had a tumultuous if exciting path to the public markets. The company initially intended to list in a traditional IPO, but after enthusiastic market conditions sent the value of some public-offering shares higher after they began to trade, Roblox hit pause.

The former startup then raised a Series H round of capital, a $520 million investment that boosted the value of Roblox from around $4 billion to $29.5 billion. TechCrunch jokes that, far from IPOs mispricing IPOs, that $4 billion price set in early 2020 was the real theft, given where the company was valued just a year later. Sure, the pandemic was good for Roblox, but seeing a 5x repricing in four quarters was hilarious.

Regardless. At $45 per share, Roblox’s direct listing reference price, the company was worth $29.1 billion, per Renaissance Capital, an IPO-focused group. Barron’s placed the number at $29.3 billion. No matter which is closer to the truth, they were both right next to the company’s final private price.

So, the Series H investors nailed the value of Roblox, or the company merely tied its reference price to that price. Either way, we had a pretty clear Series H direct listing reference price handoff.

The company’s performance today makes that effort appear somewhat meaningless as both prices were wildly under what traders were willing to cough up during its first day of trading; naturally, we’ll keep tabs on its price as time continues, and one day is not a trend, but seeing Roblox trade so very far above its direct listing reference price and final private valuation appears to undercut the argument that this sort of debut can sort out pricing issues inherent in more traditional IPOs.

To understand the company’s early trading activity, however, we need to understand just how well Roblox performed in Q4 2020. When we last noodled on the company’s valuation, we only had data through the third quarter of last year. Now we have data through December 31, 2020. Let’s check how much Roblox grew in that final period, and if it helps explain how the company managed that epic Series H markup.

Gaming is popular, who knew

#direct-listing, #fundings-exits, #gaming, #roblox, #saas, #startups, #tc

0

How Roblox’s creator accelerator helps the gaming giant build new platform opportunities

As Roblox eyes what could be a historic debut on public markets in the coming months, investors who have valued the company at $29.5 billion are certainly eyeing the gaming company’s dedicated and youthful user base, but it’s the 7 million active creators and developers on the Roblox platform that they are likely most impressed by. 

Since 2015, Roblox has been running an accelerator program focused on enabling the next generation of game developers to be successful on its platform. Over the years, the program has expanded from one annual class to now three, each with now around 40 developers participating. That means over 100 developers per year are working directly with Roblox to gain mentorship, education, and funding opportunities to get their games off the ground.  

As the company’s efforts on this front have grown more formalized, Roblox in 2018 hired a former Accelerator alumni Christian Hunter, a Roblox gamer since age 10 and game developer since 13, to run the program full-time. Having been through the experience himself, Hunter brought to the program an understanding of how the Accelerator could improve, based on a developer’s own perspective. 

However, the COVID-19 pandemic threw the company’s plans to run the program into disarray. Instead of being able to invite developers to spend three months participating in classes hosted at Roblox’s San Mateo office, the company had to revamp the program for remote participation. 

As it turned out, developers who were used to playing and building games taking place in virtual worlds quickly adjusted to the new online experience. 

“Before COVID, everyone was together. It was easier to talk to people. [Developers] could just walk up to someone that was on our product or engineering team if they were running into issues,” explains Roblox Senior Product Manager Rebecca Crose. “But obviously, with COVID-19, we had to switch and think differently.”  

The remote program, though differently structured, offered several benefits. Developers could join the program’s Discord server to talk to both current participants and previous classes, and reach out and ask questions. They could also participate in the Roblox company Slack to ask the team questions, and there were more playtests being scheduled to gain reactions and feedback from Roblox employees.

Meanwhile, to get to know one another when they couldn’t meet in person, developers would have game nights where they’d play each other’s games or others that were popular on Roblox, and bond within the virtual environment instead of in face-to-face meetings and classes. 

The actual Accelerator content, however, remained fairly consistent during the remote experience. Participants had weekly leaders standup, talks on topics like game design and production, and weekly feedback sessions where they asked Roblox engineers questions. 

But by its nature, a remote Accelerator broadend who could attend. Instead of limiting the program to only those who could travel to San Mateo and stay for three months, the program was opened up to a more global and diverse audience. This drove increased demand, too. 

The 2020 program saw Roblox receiving the largest number of applications ever — 5 times the usual number.

As a result, the class included participants from five countries: The Philippines, South Korea, Sweden, Canada, and the U.S. 

The developers at IndieBox Studios saw the program as a chance to double down on their game development side hustles. The young friends spread across the UK and Kentucky spent their time during the accelerator scaling up their photorealistic title called Tank Warfare.

“We’ve actually never once met in real life, like we’ve been friends for going on what nine years now,” Michael Southern tells TechCrunch. “We met on Roblox.”

IndieBox is representative of many of Roblox’s early developer teams, younger gamers that have spent more than a decade learning the ins and outs of the evolving Roblox gaming platform.

“We all joined Roblox way back in 2008,” IndieBox’s Frank Garrison says. “But we only started developing on the platform in 2019. And for us, the decision to choose Roblox was more down to like, well it’s what we know, why not give it a bash?” 

The demographics of the accelerator have been shifting in other ways as the developer base grows more diverse.

“I would say, in the beginning, it was mostly young males. But as we’ve watched the program evolve, we’ve been getting so many new interesting teams,” notes Program Manager Christian Hunter. 

The 2020 program had more women participants than ever, for example, with 12 in a class of 50. And one team was all women. 

The age of participants, who are typically in the 18 to 22 year-old range, also evolved. 

“We’ve seen a lot more older folks,” Hunter says. “With [the COVID-19 pandemic], we actually saw our first 50-year old in the program. We’ve never had anyone older than, I’d say, 24. And in 2020, we had 12 individuals over the age of 30,” he notes. 

Two of the teams were also a combination of a kid and a parent. 

Shannon Clemens learned about the Roblox platform from her son Nathan, learning to code and bringing her husband Jeff in to form a studio called Simple Games. Nathan’s two sisters help the studio part time, as well as his friend Adrian Holgate.

“Seeing [my son’s] experience on Roblox getting involved with the platform, I thought it would be neat to learn how to make our own games,” Shannon Clemens told TechCrunch.

Their title Gods of Glory has received more than 13.5 million visits from Roblox players since launching in September.

“Our whole family is kind of creatively bent towards having fun with games and coming up with things like that,” Jeff Clemens tells us. “Why would we not try this? So, that’s when we applied to the program and said, ‘well, we’ll try and see if we get accepted,’ and we did and it’s been awesome.”

In addition to the changes facilitated by a remote environment, Roblox notes there were other perks enabled by remote learning. For one thing, the developers didn’t have to wake up so early to benefit from the experience.  

“With it being remote, the developers were working their hours,” says Crose. “As a developer, we tend to work later and stay up at night. Having them come in at 9 AM sharp was very difficult. It was hard for them because they’re just like…a zombie. So we definitely saw that by letting them work their own hours, [there is] less burnout and they increase their productivity,” she says. 

Though the COVID-19 crisis may eventually end as the world gets vaccinated, the learnings from the Accelerator and the remote advantages it offers will continue. Developers from the program hope that the growth seen on gaming platforms like Roblox continues as well.

“The pandemic has been great for most game studios,” developer Gustav Linde tells TechCrunch. “Obviously, it’s a very weird time, but the timing was good for us.”

The Gang Stockholm, a Swedish game development studio co-founded by Linde, has been building branded experiences for clients exclusively on the Roblox platform. The team of 12 has used the accelerator to slow down development deadlines and dig into some unique areas of the platform.  

“If you look at Steam and the App Store and Google Play, those markets are extremely crowded, and Roblox is a very exciting platform for developers right now.” said Linde. “Roblox is also getting a lot of attention and a lot of big brands are interested in entering the platform.”

Roblox says that going forward, future Accelerator programs will feature a remote element inspired by the COVID experience. The company plans to continue to make its program globally available, with the limitation for now, of English-speaking participants. But it’s looking to expand to reach non-English speakers with future programs.

The fall 2020 Accelerator class graduated in December 2020, and the next Spring class will start in February 2021. The applications are being reviewed now with a decision to be finalized soon. The next class will have some 40 participants, as is now usual, and Roblox will again aim to diversify the group of participants.

#app-store, #canada, #computing, #game-developer, #gaming, #kentucky, #online-games, #philippines, #product-manager, #roblox, #software, #south-korea, #sweden, #tc, #united-kingdom, #united-states, #video-gaming

0

Gowalla raises $4 million from GV and Spark for its AR social app

The newly resurrected Gowalla wants to realize its mobile dreams from the early-aughts in an augmented reality world, and they’ve raised some new funding to make it happen.

The AR startup tells TechCrunch that it has raised $4 million in seed funding co-led by Google’s venture arm GV and Spark Capital. Other investors include Niantic, Upside Partnership, Otherwise Fund, Capital Factory, Form Capital and a host of angels like April Underwood, Leah Culver, Jason Calacanis, John Lilly, Scott Belsky, Dennis Crowley, and Dave and Brit Morin at Offline Ventures.

Gowalla was originally founded back in 2009 as a Foursquare competitor, it gathered some early traction and excitement from investors, raising just over $10 million, before things petered out a couple years later and the team was acquihired by Facebook for $3 million. Co-founder Josh Williams, who has brought back the app with new co-founder Patrick Piemonte, tells TechCrunch he hopes the new iteration can take inspiration from the social side of TikTok and the platform side of Roblox and allow users to “unlock” the world around them in augmented reality.

It’s still pretty unclear what the end game is thought it becomes a bit clearer as the app pushes out its early batch of beta testers — which the startup calls its “Street Team” — to find points of interest for the app. Williams contends there are some elements of the app that share similarities with Foursquare’s early iterations, with users getting credit for data they submit as well as badges for completing certain tasks.

Screenshot from Gowalla’s Street Team app. via Gowalla

“The questions that we ask ourselves is as stories is to a timeline, what’s the same equivalent to real world space and how do we create a gamified sharing format that has the same ubiquity,” Williams tells TechCrunch.

The Gowalla team doesn’t have any firm dates lined up but hopes to share more about the eventual launch experience in the coming months and open up for beta in early summer.

#augmented-reality, #brit-morin, #capital-factory, #co-founder, #computing, #dave, #dennis-crowley, #facebook, #foursquare, #gowalla, #jason-calacanis, #john-lilly, #josh-williams, #niantic, #roblox, #scott-belsky, #software, #spark-capital, #tc, #techcrunch, #technology

0

App stores saw record 218 billion downloads in 2020, consumer spend of $143 billion

Mobile adoption continued to grow in 2020, in part due to the market forces of the COVID-19 pandemic. According to App Annie’s annual “State of Mobile” industry report, mobile app downloads grew by 7% year-over-year to a record 218 billion in 2020. Meanwhile, consumer spending grew by 20% to also hit a new milestone of $143 billion, led by markets that included China, the United States, Japan, South Korea and the United Kingdom.

Consumers also spent 3.5 trillion minutes using apps on Android devices alone, the report found.

In another shift, app usage in the U.S. surged ahead of the time spent watching live TV. Currently, the average American watches 3.7 hours of live TV per day, but now spends four hours on their mobile device.

The increase in time spent is a trend that’s not unique to the U.S., but can be seen across several other countries, including both developing mobile markets like Indonesia, Brazil and India, as well as places like China, Japan, South Korea, the U.K., Germany, France and others.

The trend isn’t isolated to any one demographic, either, but is seen across age groups. In the U.S., for example, Gen Z, millennials and Gen X/Baby Boomers spent 16%, 18% and 30% more time in their most-used apps year-over-year, respectively. However, what those favorite apps looked like was very different.

For Gen Z in the U.S., top apps on Android phones included Snapchat, Twitch, TikTok, Roblox and Spotify.

Millennials favored Discord, LinkedIn, PayPal, Pandora and Amazon Music.

And Gen X/Baby Boomers used Ring, Nextdoor, The Weather Channel, Kindle and ColorNote Notepad Notes.

The pandemic didn’t necessarily change how consumers were using apps in 2020, but rather accelerated mobile adoption by two to three years’ time, the report found.

Investors were also eager to fuel mobile businesses as a result, pouring $73 billion in capital into mobile companies — a figure that’s up 27% year-over-year. According to Crunchbase data, 26% of total global funding dollars in 2020 went to businesses that included a mobile solution.

From 2016 to 2020, global funding to mobile technology companies more than doubled compared with the previous five years, and was led by financial services, transportation, commerce and shopping.

Mobile gaming adoption also continued to grow in 2020. Casual games dominated the market in terms of downloads (78%), but Core games accounted for 66% of games’ consumer spend and 55% of the time spent.

With many stuck inside due to COVID-19 lockdowns and quarantines, mobile games that offered social interaction boomed. Among Us, for example, became a breakout game in several markets in 2020, including the U.S.

Other app categories saw sizable increases over the past year, as well.

Time spent in Finance apps in 2020 was up 45% worldwide, outside of China, and participation in the stock market grew 55% on mobile, thanks to apps like Robinhood in the U.S. and others worldwide, that democratized investing and trading.

TikTok had a big year, too.

The app saw incredible 325% year-over-year growth, despite a ban in India, and ranked in the top five apps by time spent. The average monthly time spent per user also grew faster than nearly every other app analyzed, including 65% in the U.S. and 80% in the U.K., surpassing Facebook. TikTok is now on track to hit 1.2 billion active users in 2021, App Annie forecasts.

Other video services boomed in 2020, thanks to a combination of new market entrants and a lot of time spent at home. Consumers spent 40% more hours streaming on mobile devices, with time spent in streaming apps peaking in the second quarter in the west as the pandemic forced people inside.

YouTube benefitted from this trend, as it became the No. 1 streaming app by time spent among all markets analyzed except China. The time spent in YouTube is up to 6x that of the next closet app at 38 hours per month.

Of course, another big story for 2020 was the rise of e-commerce amid the pandemic. This made the past year the biggest ever for mobile shopping, with an over 30% increase in time spent in Shopping apps, as measured on Android phones outside of China.

Mobile commerce, however, looked less traditional in 2020.

Social shopping was a big trend, with global downloads of Pinterest and Instagram growing 50% and 20% year-over-year, respectively.

Livestreaming shopping grew, too, led by China. Downloads of live shopping TaoBao Live in China, Grip in South Korea and NTWRK in the U.S. grew 100%, 245% and 85%, respectively. NTWRK doubled in size last year, and now others are entering the space as well — including TikTok, to some extent.

The pandemic also prompted increased usage of mobile ordering apps. In the U.S., Argentina, the U.K., Indonesia and Russia, the app grew by 60%, 65%, 70%, 80% and 105%, respectively, in Q4.

Business apps, like Zoom and Google Meet among others, grew 275% in Q4, for example, as remote work and sometimes school, continued.

The analysis additionally included lists of the top apps by downloads, spending and monthly active users (MAUs).

Although TikTok had been topping year-end charts, Facebook continued to beat it in terms of MAUs. Facebook-owned apps controlled the top charts by MAUs, with Facebook at No. 1 followed by WhatsApp, Messenger and Instagram.

TikTok, however, had more downloads than Facebook and ranked No. 2 by consumer spending, behind Tinder.

The full report is available only as an online interactive experience this year, not a download. The report largely uses data from both the iOS App Store and Google Play, except where otherwise noted.

#amazon, #android, #app-annie, #apps, #argentina, #brazil, #china, #computing, #e-commerce, #facebook, #financial-services, #france, #freeware, #germany, #google, #india, #indonesia, #instagram, #japan, #kindle, #linkedin, #messenger, #mobile-app, #mobile-applications, #mobile-commerce, #mobile-device, #mobile-devices, #mobile-technology, #operating-systems, #pandora, #paypal, #pinterest, #roblox, #russia, #snapchat, #social-media, #software, #south-korea, #spotify, #the-weather-channel, #tiktok, #twitch, #united-kingdom, #united-states, #video-services

0

Who is underpricing Roblox?

Hello and welcome back to Equity, TechCrunch’s venture-capital-focused podcast, where we unpack the numbers behind the headlines. We’re back on this lovely Saturday with a bonus episode!

The normal crew assembled, including Alex, Natasha, Danny, and Chris, to chatter about a chunk of creator and gamer news. And some big numbers, the sorts that we always find fun to chat about.

A sneak peek at what we discussed during this second-ever Equity Leftovers:

  • Roblox’s epic pre-IPO raise, and its decision to go public through direct listing instead of the IPO that it had previously planned.
  • Niantic buying a gaming platform with an esports-focus.
  • Nintendo buying a gaming studio, leading the crew to declare that the famous company is the Disney of video games.
  • Cameo, which allows fans to pay celebrities for personalized messages, is on a hiring spree after bringing in $100 million in transactions last year. The Information says that the company is seeking funding, which isn’t entirely surprising. Axios reports that it has brought in a couple high-profile hires, as well.

Back to our regular schedule Monday! Chat then!

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

#cameo, #equity-podcast, #niantic, #nintendo, #roblox, #tc

0

Extra Crunch roundup: 2 VC surveys, Tesla’s melt up, The Roblox Gambit, more

This has been quite a week.

Instead of walking backward through the last few days of chaos and uncertainty, here are three good things that happened:

  • Google employee Sara Robinson combined her interest in machine learning and baking to create AI-generated hybrid treats.
  • A breakthrough could make water desalination 30%-40% more effective.
  • Bianca Smith will become the first Black woman to coach a professional baseball team.

Despite many distractions in our first full week of the new year, we published a full slate of stories exploring different aspects of entrepreneurship, fundraising and investing.

We’ve already gotten feedback on this overview of subscription pricing models, and a look back at 2020 funding rounds and exits among Israel’s security startups was aimed at our new members who live and work there, along with international investors who are seeking new opportunities.

Plus, don’t miss our first investor surveys of 2021: one by Lucas Matney on social gaming, and another by Mike Butcher that gathered responses from Portugal-based investors on a wide variety of topics.

Thanks very much for reading Extra Crunch this week. I hope we can all look forward to a nice, boring weekend with no breaking news alerts.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist


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


The Roblox Gambit

In February 2020, gaming platform Roblox was valued at $4 billion, but after announcing a $520 million Series H this week, it’s now worth $29.5 billion.

“Sure, you could argue that Roblox enjoyed an epic 2020, thanks in part to COVID-19,” writes Alex Wilhelm this morning. “That helped its valuation. But there’s a lot of space between $4 billion and $29.5 billion.”

Alex suggests that Roblox’s decision to delay its IPO and raise an enormous Series H was a grandmaster move that could influence how other unicorns will take themselves to market. “A big thanks to the gaming company for running this experiment for us.”

I asked him what inspired the headline; like most good ideas, it came to him while he was trying to get to sleep.

“I think that I had “The Queen’s Gambit somewhere in my head, so that formed the root of a little joke with myself. Roblox is making a strategic wager on method of going public. So, ‘gambit’ seems to fit!”

8 investors discuss social gaming’s biggest opportunities

girl playing games on desktop computer

Image Credits: Erik Von Weber (opens in a new window) / Getty Images

For our first investor survey of the year, Lucas Matney interviewed eight VCs who invest in massively multiplayer online games to discuss 2021 trends and opportunities:

  • Hope Cochran, Madrona Venture Group
  • Daniel Li, Madrona Venture Group
  • Niko Bonatsos, General Catalyst
  • Ethan Kurzweil, Bessemer Venture Partners
  • Sakib Dadi, Bessemer Venture Partners
  • Jacob Mullins, Shasta Ventures
  • Alice Lloyd George, Rogue
  • Gigi Levy-Weiss, NFX

Having moved far beyond shooters and sims, platforms like Twitch, Discord and Fortnite are “where culture is created,” said Daniel Li of Madrona.

Rep. Alexandria Ocasio-Cortez uses Twitch to explain policy positions, major musicians regularly perform in-game concerts on Fortnite and in-game purchases generated tens of billions last year.

“Gaming is a unique combination of science and art, left and right brain,” said Gigi Levy-Weiss of NFX. “It’s never just science (i.e., software and data), which is why many investors find it hard.”

How to convert customers with subscription pricing

Giant hand and magnet picking up office and workers

Image Credits: C.J. Burton (opens in a new window) / Getty Images

Startups that lack insight into their sales funnel have high churn, low conversion rates and an inability to adapt or leverage changes in customer behavior.

If you’re hoping to convert and retain customers, “reinforcing your value proposition should play a big part in every level of your customer funnel,” says Joe Procopio, founder of Teaching Startup.

What is up with Tesla’s value?

Elon Musk, founder of SpaceX and chief executive officer of Tesla Inc., arrives at the Axel Springer Award ceremony in Berlin, Germany, on Tuesday, Dec. 1, 2020. Tesla Inc. will be added to the S&P 500 Index in one shot on Dec. 21, a move that will ripple through the entire market as money managers adjust their portfolios to make room for shares of the $538 billion company. Photographer: Liesa Johannssen-Koppitz/Bloomberg via Getty Images

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

Alex Wilhelm followed up his regular Friday column with another story that tries to find a well-grounded rationale for Tesla’s sky-high valuation of approximately $822 billion.

Meanwhile, GM just unveiled a new logo and tagline.

As ever, I learned something new while editing: A “melt up” occurs when investors start clamoring for a particular company because of acute FOMO (the fear of missing out).

Delivering 500,000 cars in 2020 was “impressive,” says Alex, who also acknowledged the company’s ability to turn GAAP profits, but “pride cometh before the fall, as does a melt up, I think.”

Note: This story has Alex’s original headline, but I told him I would replace the featured image with a photo of someone who had very “richest man in the world” face.

How Segment redesigned its core systems to solve an existential scaling crisis

Abstract glowing grid and particles

Image Credits: piranka / Getty Images

On Tuesday, enterprise reporter Ron Miller covered a major engineering project at customer data platform Segment called “Centrifuge.”

“Its purpose was to move data through Segment’s data pipes to wherever customers needed it quickly and efficiently at the lowest operating cost,” but as Ron reports, it was also meant to solve “an existential crisis for the young business,” which needed a more resilient platform.

Dear Sophie: Banging my head against the wall understanding the US immigration system

Image Credits: Sophie Alcorn

Dear Sophie:

Now that the U.S. has a new president coming in whose policies are more welcoming to immigrants, I am considering coming to the U.S. to expand my company after COVID-19. However, I’m struggling with the morass of information online that has bits and pieces of visa types and processes.

Can you please share an overview of the U.S. immigration system and how it works so I can get the big picture and understand what I’m navigating?

— Resilient in Romania

The first “Dear Sophie” column of each month is available on TechCrunch without a paywall.

Revenue-based financing: The next step for private equity and early-stage investment

Shot of a group of people holding plants growing out of soil

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

For founders who aren’t interested in angel investment or seeking validation from a VC, revenue-based investing is growing in popularity.

To gain a deeper understanding of the U.S. RBI landscape, we published an industry report on Wednesday that studied data from 134 companies, 57 funds and 32 investment firms before breaking out “specific verticals and business models … and the typical profile of companies that access this form of capital.”

Lisbon’s startup scene rises as Portugal gears up to be a European tech tiger

Man using laptop at 25th of April Bridge in Lisbon, Portugal

Image Credits: Westend61 (opens in a new window)/ Getty Images

Mike Butcher continues his series of European investor surveys with his latest dispatch from Lisbon, where a nascent startup ecosystem may get a Brexit boost.

Here are the Portugal-based VCs he interviewed:

  • Cristina Fonseca, partner, Indico Capital Partners
  • Pedro Ribeiro Santos, partner, Armilar Venture Partners
  • Tocha, partner, Olisipo Way
  • Adão Oliveira, investment manager, Portugal Ventures
  • Alexandre Barbosa, partner, Faber
  • António Miguel, partner, Mustard Seed MAZE
  • Jaime Parodi Bardón, partner, impACT NOW Capital
  • Stephan Morais, partner, Indico Capital Partners
  • Gavin Goldblatt, managing partner, Portugal Gateway

How late-stage edtech companies are thinking about tutoring marketplaces

Life Rings flying out beneath storm clouds are a metaphor for rescue, help and aid.

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

How do you scale online tutoring, particularly when demand exceeds the supply of human instructors?

This month, Chegg is replacing its seven-year-old marketplace that paired students with tutors with a live chatbot.

A spokesperson said the move will “dramatically differentiate our offerings from our competitors and better service students,” but Natasha Mascarenhas identified two challenges to edtech automation.

“A chatbot won’t work for a student with special needs or someone who needs to be handheld a bit more,” she says. “Second, speed tutoring can only work for a specific set of subjects.”

Decrypted: How bad was the US Capitol breach for cybersecurity?

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

While I watched insurrectionists invade and vandalize the U.S. Capitol on live TV, I noticed that staffers evacuated so quickly, some hadn’t had time to shut down their computers.

Looters even made off with a laptop from Senator Jeff Merkley’s office, but according to security reporter Zack Whittaker, the damages to infosec wasn’t as bad as it looked.

Even so, “the breach will likely present a major task for Congress’ IT departments, which will have to figure out what’s been stolen and what security risks could still pose a threat to the Capitol’s network.”

Extra Crunch’s top 10 stories of 2020

On New Year’s Eve, I made a list of the 10 “best” Extra Crunch stories from the previous 12 months.

My methodology was personal: From hundreds of posts, these were the 10 I found most useful, which is my key metric for business journalism.

Some readers are skeptical about paywalls, but without being boastful, Extra Crunch is a premium product, just like Netflix or Disney+. I know, we’re not as entertaining as a historical drama about the reign of Queen Elizabeth II or a space western about a bounty hunter. But, speaking as someone who’s worked at several startups, Extra Crunch stories contain actionable information you can use to build a company and/or look smart in meetings — and that’s worth something.

#artificial-intelligence, #automotive, #chegg, #congress, #enterprise, #gaming, #google, #israel, #lisbon, #machine-learning, #mike-butcher, #online-tutoring, #portugal, #roblox, #ron-miller, #security, #startups, #tc, #tesla, #twitch, #united-states, #venture-capital

0