Year: 2020

The biggest story to come out of the post-March stock market boom has been explosive growth in the value of technology shares. Software companies in particular have seen their fortunes recover; since March lows, public software companies’ valuations have more than doubled, according to one basket of SaaS and cloud stocks compiled by a Silicon Valley venture capital firm.

Such gains are good news for startups of all sizes. For later-stage upstarts, software share appreciation helps provide a welcoming public market for exits. And, strong public valuations can help guide private dollars into related startups, keeping the capital flowing.

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For software-focused startup companies, especially those pursuing recurring revenue models like SaaS, it’s a surprisingly good time to be alive.

Indeed, after COVID-19 hit the United States, layoffs and rising software sales churn were key, worrying indicators coming out of startup-land. Since then, the data has turned around.

As TechCrunch reported in June, startup layoffs have declined and software churn has recovered to the point that business and enterprise-focused SaaS companies are on the bounce.

But instead of merely recovering to near pre-COVID levels, software stocks have continued to rise. Indeed, the Bessemer Cloud Index (EMCLOUD), which tracks SaaS firms, has set an array of all-time highs in recent weeks.

There’s some logic to the rally. After speaking to venture capitalists over the past few weeks, notes from EQT Ventures‘ Alastair Mitchell, Sapphire’s Jai Das, and Shomik Ghosh from Boldstart Ventures paint the picture of a possibly accelerating digital transformation for some software companies, nudged forward by COVID-19 and its related impacts.

The result of the trend may be that the total addressable market (TAM) for software itself is larger than previously anticipated. Larger TAM could mean bigger future sales for and more substantial future cash flows for some software companies. This argument helps explain part of the market’s present-day enthusiasm for public tech equities, and especially the shares of software companies.

We won’t be able explain every point that Nasdaq has gained. But the TAM argument is worth understanding if we want to grok a good portion of the optimism that is helping drive tech valuations, both private and public.

When Ming-Chi Kuo offers up a new report, Apple followers listen. The latest offering from the analyst adds key detail to the potential roadmap for Apple’s recently-announced push into its home baked ARM-based processors.

Once again, Kuo notes that a 13.3-inch MacBook will be arrive in the fourth quarter of this year, sporting Apple’s own silicon. That laptop will reportedly be joined by a new version of the MacBook Air, which recently had its own upgrade. The thin-and-light laptop is said to be arriving either along with the Pro in Q4 2020 or Q1 2021.

Even more intriguing, is the reported arrival of two new Pros — a 14.1- and 16-inch — which will sport an “all-new form factor design.” That marks a potential change from earlier reports that have the updated 16-inch arriving alongside the 13 by year’s end. As MacRumors notes, the redesigned iMac is absent from the letter.

Most reports have suggested that the all-in-one is set for a redesign before year’s end, but will still be sporting an Intel chip. A version with Apple silicon likely wouldn’t arrive on the desktop until next year at the earliest, potentially making the new iMac somewhat outdated shortly after its arrival.

Thus far the only system that’s been officially announced is a Mac mini designed specifically for developers. The company used WWDC to offer a rare early look at future tech, in order to help give app developers sufficient time to upgrade for the upcoming hardware.

TC Early Stage on July 21 and 22 will virtually bring together 50+ experts across startup core competencies to give you the tools you’ll need to be able to keep building your business and protect your assets. If you’re on the fence about attending, here are just five reasons why you should get your tickets today:

1. Learn how to fundraise effectively

Top venture capitalists from Greylock, General Catalyst, Accel, Plexo Capital and more will share their secrets on how to raise funds for your company. For example if you need to optimize your pitchdeck or deciding whether to bootstrap or pitfalls to avoid when pitching or even how to get your company acquired this is the place where you will be able to learn it all from seed to IPO.

2. Focus on growing your bottom line

In order to grow, you have to build and engage your audience but how do you stand out in the crowd? What’s the secret sauce for growth? At TC Early Stage, we’ll have several marketing mavens on tap to provide the tips and tricks you’ll need to develop your brand’s personality and teach you how to get in front of new clients.

3. Operate at maximum efficiency

To make sure the machine is operating at its best, all of the pieces need to work together effectively. As you are hiring employees, developing and securing your company’s tech stack, building out your board, or structuring your term sheets, these workshops can help you to fine tune all of the functional puzzle pieces of your company that make it run.

4. Expand your network

Not only will you have the experts to meet but you’ll also have hundreds of other founders who are at your disposal to share best practices, meet other investors and service providers and expand your social graph. It’s the icing on the cake to augment your entire TC Early Stage experience. Plus you’ll be able to kick-start your networking with other attendees before the show even begins!

5. Spaces are limited

We’re keeping these sessions as intimate as possible so you have opportunities to engage with speakers and get the most out of each workshop. Some sessions have already reached capacity, so you’ll want to act fast and register now. All of the sessions will be exclusively available for TC Early Stage attendees to view after the event concludes so if you miss one, you’ll still be able to watch the session on demand. Get your tickets now and secure your seat at TC Early Stage online.

Rivian, the electric vehicle company aiming to become the first to bring an EV pickup truck to market, has raised $2.5 billion in a round led by funds and accounts advised by T. Rowe Price Associates Inc.

New investors Soros Fund Management LLC, Coatue, Fidelity Management and Research Company and Baron Capital Group also participated. Existing shareholders Amazon and funds managed by BlackRock also joined the round. No new board seats have been added.

This is by far the largest round Rivian has raised to date as the company and its founder and CEO R.J. Scaringe eschew public markets and have instead turned to strategic funds and other private investors. The round follows an active 2019 for the company that brought in $2.85 billion in funds through a series of investments. Rivian essentially hit that same mark in one fell swoop this time around.

Rivian announced in February 2019 a $700 million funding round led by Amazon. More deals and investments would follow, including a $500 million investment from Ford — along with a promise to collaborate on a future EV program — a $350 million investment by Cox Automotive in September. The company closed the year with an announcement that it had raised $1.3 billion round led by funds and accounts advised by T. Rowe Price Associates, Inc. with additional participation from Amazon, Ford Motor Company and funds managed by BlackRock.

The company also announced in 2019 was developing an electric delivery van for Amazon using its skateboard platform. Amazon 100,000 of these vans with deliveries starting in 2021.

The company has a capitally intensive journey awaiting them for the remainder of 2020 and far into next year. Rivian is preparing its factory in Normal, Indiana to assembly its R1T electric pickup truck and the R1S SUV as well as begin to fulfill its order with Amazon to deliver electric vans.

All three of these products are expected to come to market — or directly to Amazon, for the van order — in 2021. The R1T and R1S were supposed to go into production in 2020.

“We are focused on the launch of our R1T, R1S and Amazon delivery vehicles. With all three launches occurring in 2021, our teams are working hard to ensure our vehicles, supply chain and production systems are ready for a robust production ramp up. We are grateful for the strong investor support that helps enable us to focus on execution of our products,” Scaringe said in a statement.

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

We wound up having more to talk about than we had time for but we packed as much as we could into 34 minutes. So, climb aboard with Danny, Natasha, and myself for another episode of Equity.

Before we get into topics, a reminder that if you are signing up for Extra Crunch and want to save some money, the code “equity” is your friend. Alright, let’s get into it:

• Robinhood is back in the news this week after a New York Times piece dug into its history, product decisions, and more. Tidbits galore are to be had, but the Equity crew wanted to debate the morality of providing exotic financial tooling to less-experienced users.
• We followed that debate with a dive into immigration, the latest news from the government, and our takes on the matter. TechCrunch has covered the recent news, and provided some context on the broader concept. Our takeaway is that doing self-defeating things for no reason isn’t brilliant for the country as a whole.
• Postmates has a home! After winding up somewhere in the middle of the pack of the on-demand cohort a few years back, the rise of DoorDash put Postmates in a pickle. Happily, Uber was on hand to de-brine the unicorn for $2.65 billion in stock. That’s a bit more money than Postmates’ last valuation. What we want to know next is how the sale price impacted common stockholders. Email us if you know.
• Palantir has filed to go public, but privately, so that’s really all there is to say about that. Unless you need a history lesson.
• Finally, funding rounds. We had three this week: MonkeyLearn raising $2.2 million for no-code AI, Quaestor raising $5.8 million for startup financial tooling, and $4.5 million for Mmhmm which is both timely and neat.

Whew! Past all that we had some fun, and, hopefully, were of some use. Hugs and chat Monday!

NASA has signed a new agreement with Japan that lays out plans for the two nations to cooperate on the International Space Station (continuing existing partnership between the countries there) as well as on NASA’s Artemis program, which includes missions in lunar space and to the lunar surface.

NASA Administrator Jim Bridenstine signed the agreement with Government of Japan Minister of Education, Culture, Sports, Science and Technology Koichi Hagiuda on July 10. It’s a Joint Exploration Decoration of Intent (JEDI), which essentially commits the two countries to laying the groundwork for more concrete plans about how the two nations will work together on projects that will extend all the way to include both robotic and human exploration of the Moon .

Japan was one of the earliest countries to express their intent to participate as an international partner in NASA’s Lunar Gateway project, all the way back in October 2019. Since then, a number of countries and agencies have expressed similar support, including Canada, which will contribute by building a third version of its Canadarm, the robotic manipulator that has been used on the Space Shuttle and the International Space Station, and the European Space Agency.

This new agreement formalizes that arrangement, and from here you can expect both parties to begin to detail in more specificity what kinds of projects they’ll collaborate on. Japan has plans to launch a robotic space probe mission to the moons of Mars and return samples from Phobos, its largest natural satellite, with a launch schedule for 2024, and it has launched a lunar orbiter exploration spacecraft called SELENE, and is planning a lunar lander mission dubbed the ‘Smart Lander for Investigating Moon (SLIM) for 2022 that will be its first lunar surface mission.

Food delivery startups in India have been struggling to make financial sense for years. They have each lost as much as $50 million a month to win and sustain customers by offering discounts. And unlike some other markets, food delivery startups have been severely hit by the coronavirus pandemic.

But Zomato, one of the two market leading startups operating in the space, today offered a rare sign of hope for the market after it said it had severely cut its cash-burn as it looks to become profitable.

The Gurgaon-headquartered firm said it estimates it would lose less than $1 million in July, the lowest in years for the 12-year-old firm that acquired Uber Eats’ India business earlier this year.

Zomato also shared its performance for the financial year that ended on March 31, 2020, and the quarter that ended on June 30.

In FY 20, the startup said its revenue surged 105% to $394 million compared to the year before while its losses at EBIDTA-level — a popular metric used by businesses that does not account for interest, taxes, depreciation, and amortization — ballooned to $293 million, up from $277 million the year before.

But the startup said the coronavirus pandemic, which has significantly reduced the number of orders customers place on the platform, has also helped it to improve its unit economics.

In the quarter that ended last month, Zomato clocked $41 million in revenue at an EBIDTA-level loss of $12 million. In the month of June alone, the startup’s revenue stood at $17 million at an EBIDTA-loss of $1.5 million.

As India eases its nationwide lockdown, which it enforced in late March, more workers are moving back to the larger cities. Zomato said this has helped the firm increase the number of orders on its platform. The startup said it expects its revenue generation this month to be at 60% of the levels before coronavirus wrought havoc to the industry.

In the quarter that ended in June this year, each order on Zomato earned it — made a contribution margin of — Rs 27 (36 cents), compared to loss of Rs 47 (62 cents) a order during the same period last year, claimed Deepinder Goyal, co-founder and chief executive of Zomato.

Goyal cautioned, however, that the current contribution margin is not sustainable and he expects it to go down to Rs 15 to 20 per order over time.

Zomato, which eliminated its workforce by 13% in May and slashed salary across the board, said it had reinstated existing employees back to their earlier pay level and its projection takes that into account.

The firm competes with Prosus Ventures-backed Swiggy, which has also eliminated even more jobs in recent months and made other efforts to improve its financials. The two firms, both of which together have nearly $2.5 billion, are struggling to find new investors as many VC and PE firms lose appetite for food delivery in India.

More to follow…

Spring 2020 was gloomy for Klook. As countries closed their borders and went into complete or partial lockdown, the SoftBank-backed travel platform saw its revenue plummet by as much as 90% through March and April. The World Travel and Tourism Council said in April that the coronavirus could put up to 100 million jobs in the global travel and tourism at risk.

But in the dark times, opportunities were also bubbling up.

Six-year-old Klook enables travelers, primarily from Asia, to discover and book overseas experiences ranging from Napa Valley wine tastings to staying with a farming family in Cambodia — a bit like Airbnb Experiences. It then takes a cut from each transaction that happens between the customer and activity vendor.

Before COVID-19, the startup, which crossed the $1 billion valuation mark back in 2018, was seeing 30 million monthly user sessions a month; by April, the figure shrank to 5 million. The constraints on people’s movement across the world, which is the foundation of its business, forced Klook to quickly rethink product offerings.

“At the end of the day, we are in the business of fun things to do. There are things to do at home, as well as local things to do when people could travel,” co-founder and chief operating officer Eric Gnock Fah told TechCrunch over a phone interview. “Now [the pandemic] is giving us an opportunity to add a new aspect to it.”

Staycation

Cooped up at home, people around the world turned to cooking, handcraft and other domestic projects as an outlet for entertainment and creativity. Klook responded to the demand by offering do-it-yourself kits for making bubble tea, macarons, candles and more — and delivering the material to people’s doorsteps. For people who were still eager to see the world, Klook partnered with landmark sites worldwide on online virtual tours, amassing close to 660,000 views in its first two livestreamed experiences.

According to a report in Politico, California has become the 49th state to launch an antitrust investigation into Google.

California and Alabama were the only states that did not participate in an antitrust investigation by 48 states, Puerto Rico and the District of Columbia, that began in September and is focused on Google’s dominance in online advertising and search.

It is still unclear what aspects of Google’s business the reported California investigation will focus on.

The Justice Department is also currently conducing its own antitrust investigation into Google, and working with the multi-state probe. It is expected that the investigations will result in lawsuits against Google.

Google is among several big tech companies, including Facebook, Microsoft, Apple and Amazon, that are currently being scrutinized by state and federal legislators and agencies, including the Federal Trade Commission, over alleged antitrust issues.

In 2011, California, four other states (Texas, New York, Oklahoma and Ohio) and the Federal Trade Commission launched an antitrust investigation into allegations that Google unfairly favored its own products over competitors in search results. That investigation was closed in 2013.

TechCrunch has contacted Google and the office of California Attorney General Xavier Becerra for comment.

According to a report in Politico, California has become the 49th state to launch an antitrust investigation into Google.

California and Alabama were the only states that did not participate in an antitrust investigation by 48 states, Puerto Rico and the District of Columbia, that began in September and is focused on Google’s dominance in online advertising and search.

It is still unclear what aspects of Google’s business the reported California investigation will focus on.

The Justice Department is also currently conducing its own antitrust investigation into Google, and working with the multi-state probe. It is expected that the investigations will result in lawsuits against Google.

Google is among several big tech companies, including Facebook, Microsoft, Apple and Amazon, that are currently being scrutinized by state and federal legislators and agencies, including the Federal Trade Commission, over alleged antitrust issues.

In 2011, California, four other states (Texas, New York, Oklahoma and Ohio) and the Federal Trade Commission launched an antitrust investigation into allegations that Google unfairly favored its own products over competitors in search results. That investigation was closed in 2013.

TechCrunch has contacted Google and the office of California Attorney General Xavier Becerra for comment.