Year: 2021

The fourth quarter of 2020 was as busy as you imagined, with super late-stage startups reaching new valuation thresholds at a record pace, and total venture capital funding in the United States recording its second-best result of all time.

That’s according to data released recently by CB Insights, which complements our look back at 2020’s venture capital year in America from yesterday.

At the time, we noted that American startups raised an average of $428 million each day last year, a sum that helps illustrate how rapid the private markets moved during the odd period.

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

But a peek at aggregate results for the world’s largest VC market provides only part of the picture. We need to narrow our lens and peer more deeply into standout categories to understand how the U.S. venture capital market managed to post its biggest year ever in terms of dollars invested, despite seeing deal volume slip for a second consecutive year.

This morning, we’re scraping data together to better understand.

First, we want to how unicorns performed in Q4 2020. This column noted in late December that it felt like unicorn creation was rapid in the quarter; how did that hold up?

And then we’ll take a look dig into PitchBook data concerning the fintech sector, a huge recipient of venture capital time, attention and money.

Fintech’s 2020 is a good perspective to view both the year and its wild final quarter. So this morning, as America itself resets, let’s take a moment to understand last year just a little bit better as we get into this new one.

Unicorns

One of the most curious things about the unicorn era is the rising bet it represents. I’ve written about this before so I will be brief: Nearly every quarter, the number of unicorns — private companies worth $1 billion or more — goes up.

The private market is able to create more unicorns than it has been historically able to exit them.

Some of these companies exit, sometimes in group fashion. But, quarter after quarter, the number of unexited unicorns rises. This means that the bet on expected future liquidity from venture capitalists and other private investors keeps ratcheting higher.

Researchers at MIT have developed a new method for growing plant tissues in a lab – sort of like how companies and researchers are approaching lab-grown meat. The process would be able to produce wood and fibre in a lab environment, and researchers have already demonstrated how it works in concept by growing simple structures using cells harvested from zinnia leaves.

This work is still in its very early stages, but the potential applications of lab-grown plant material are significant, and include possibilities in both agriculture and in ruction materials. While traditional agricultural is much less ecologically damaging when compared to animal farming, it can still have a significant impact and cost, and it takes a lot of resources to maintain. Not to mention that even small environmental changes can have a significant effect on crop yield.

Forestry, meanwhile, has much more obvious negative environmental impacts. If the work of these researchers can eventually be used to create a way to produce lab-grown wood for use in construction and fabrication, in a way that’s scalable and efficient, then there’s tremendous potential in terms of reducing the impact of forestry globally. Eventually, the team even theorizes you could coax the growth of plant-based materials into specific target shapes, so you could also do some of the manufacturing in the lab, by growing a wood table directly for instance.

There’s still a long way to go from what the researchers have achieved. They’ve only grown materials on a very small scale, and will look to figure out ways to grow plant-based materials with different final properties as one challenge. They’ll also need to overcome significant barriers when it comes to scaling efficiencies, but they are working on solutions that could address some of these difficulties.

Lab-grown meat is still in its infancy, and lab-grown plant material is even more nascent. But it has tremendous potential, even if it takes a long time to get there.

Researchers at MIT have developed a new method for growing plant tissues in a lab – sort of like how companies and researchers are approaching lab-grown meat. The process would be able to produce wood and fibre in a lab environment, and researchers have already demonstrated how it works in concept by growing simple structures using cells harvested from zinnia leaves.

This work is still in its very early stages, but the potential applications of lab-grown plant material are significant, and include possibilities in both agriculture and in ruction materials. While traditional agricultural is much less ecologically damaging when compared to animal farming, it can still have a significant impact and cost, and it takes a lot of resources to maintain. Not to mention that even small environmental changes can have a significant effect on crop yield.

Forestry, meanwhile, has much more obvious negative environmental impacts. If the work of these researchers can eventually be used to create a way to produce lab-grown wood for use in construction and fabrication, in a way that’s scalable and efficient, then there’s tremendous potential in terms of reducing the impact of forestry globally. Eventually, the team even theorizes you could coax the growth of plant-based materials into specific target shapes, so you could also do some of the manufacturing in the lab, by growing a wood table directly for instance.

There’s still a long way to go from what the researchers have achieved. They’ve only grown materials on a very small scale, and will look to figure out ways to grow plant-based materials with different final properties as one challenge. They’ll also need to overcome significant barriers when it comes to scaling efficiencies, but they are working on solutions that could address some of these difficulties.

Lab-grown meat is still in its infancy, and lab-grown plant material is even more nascent. But it has tremendous potential, even if it takes a long time to get there.

Fyllo has acquired DataOwl, a company offering marketing and loyalty tools for cannabis retailers.

Fyllo said it already works with 320 cannabis retailers across 25 states (plus Puerto Rico and Jamaica). According to Chief Marketing Officer Conrad Lisco, this acquisition allows the company to offer the industry’s “first end-to-end marketing solution,” combining consumer data, digital advertising, regulatory compliance (thanks to Fyllo’s acquisition of CannaRegs last year) and, through DataOwl, CRM and loyalty tied into a business’ point-of-sale system.

As an example, founder and CEO Chad Bronstein (previously the chief revenue officer at digital marketing company Amobee) said that retailers will be able to use the Fyllo platform to send promotional texts to regular customers while, crucially, ensuring that those campaigns are fully in compliance with state and local regulations. He added that eventually, the platform could be used beyond cannabis, in other regulated industries.

“Beauty, gambling, etc. — the same things need to happen in every regulated industry, they would all benefit from loyalty and compliance automation,” Bronstein said.

In addition, he argued that mainstream brands are increasingly interested in using data around cannabis and CBD consumers, as borne out in a Forrester study commissioned by Fyllo.

Lisco said this acquisition comes at a crucial time for the cannabis industry, with dispensaries classified as essential businesses in many states, as well as continuing momentum behind marijuana legalization.

“In 2020, cannabis came of age,” he said. “We would say it went form illicit to essential in 10 months … 2021 is really about watching endemic [marijuana] brands try to scale, so that they can capitalize on the explosive growth. They’ve historically been excluded from the kinds of integrated marketing capabilities that other non-endemic [mainstream] brands get to use when go to market.”

Bronstein said Fyllo aims to bring those capabilities to marijuana brands, first by bringing the its compliance capabilities into the DataOwl product. The company also aims to create a national cannabis loyalty platform, allowing a marijuana retailer in one state to easily expand its marketing capabilities into other states in a compliant fashion.

The financial terms of the acquisition were not disclosed. DataOwl co-founders Dan Hirsch and Vartan Arabyan are joining Fyllo, as is the rest of their team, bringing the company’s total headcount to 110.

“By integrating with Fyllo, DataOwl’s solutions will reach the widest possible audience via the industry’s most innovative marketing platform,” Hirsch said in a statement.

SpaceX has launched its 17th batch of Starlink satellites during its first mission of 2021, using a Falcon 9 rocket that was flying for the eighth time, and that landed again, recording a record for its reusability program. This puts the total Starlink constellation size at almost 1,000, as the company has expanded its beta access program for the service to the UK and Canada, with a first deployment in the latter company serving a rural First Nations community in a remote part of the province of Ontario.

The launch took off from Florida at 8:02 AM EST (5:02 AM PST), with delivery of the satellites following as planned at around an hour after lift-off. The booster on this launch flew seven times previously, as mentioned – including just in December when it was used to delivery a SiriusXM satellite to orbit to support that company’s satellite radio network.

Today’s launch was also notable because it included a landing attempt in so-called “envelope expansion” conditions, which means that the winds in the landing zone where SpaceX’s drone recovery ship was stationed at sea actually exceeded the company’s previously-defined safety window for making a landing attempt.

As a result of today’s success, SpaceX will likely now have higher tolerances for wind speeds in order to attempt recovery, which should translate to fewer cancellations of launches based on weather conditions in the landing zone.

A four-year antitrust investigation into PC games geo-blocking in the European Union by distribution platform Valve and five games publishers has led to fines totalling €7.8 million (~$9.4M) after the Commission confirmed today that the bloc’s rules had been breached.

The geo-blocking practices investigated since 2017 concerned around 100 PC video games of different genres, including sports, simulation and action games.

In addition to Valve — which has been fined just over €1.6M — the five sanctioned games publishers are: Bandai Namco (fined €340k), Capcom (€396k), Focus Home (€2.8M), Koch Media (€977k) and ZeniMax (€1.6M).

The Commission said the fines were reduced by between 10% and 15% owing to cooperation from the companies, with the exception of Valve who it said chose not to cooperate (a “prohibition Decision” rather than a fine reduction was applied in its case).

Valve has been contacted for comment.

The antitrust investigation begun in February 2017, with a formal statement of objections issued just over two years later when the Commission accused the companies of “entering into bilateral agreements to prevent consumers from purchasing and using PC video games acquired elsewhere than in their country of residence” in contravention of EU rules.

The mechanisms used by the companies to prevent certain cross-border sales of certain PC games were geo-blocked Steam activation keys and bilateral licensing and distribution agreements to restrict certain cross-border sales.

EU lawmakers has now found that these business practices partitioned certain European markets according to national borders — denying regional consumers the benefits of the EU’s Digital Single Market to shop around for the best offer.

Commenting in a statement, EVP Margrethe Vestager, who heads up competition policy for the bloc, said: “Today’s sanctions against the ‘geo-blocking’ practices of Valve and five PC video game publishers serve as a reminder that under EU competition law, companies are prohibited from contractually restricting cross-border sales. Such practices deprive European consumers of the benefits of the EU Digital Single Market and of the opportunity to shop around for the most suitable offer in the EU.”.

According to the Commission’s investigation, geo-blocking of Steam activation keys prevented activation of certain of the five games’ publishers titles outside of Czechia, Poland, Hungary, Romania, Slovakia, Estonia, Latvia and Lithuania.

It said agreements between the companies to geo-block activation keys had lasted between one and five years and were found to have been implemented at various times between September 2010 and October 2015.

While four of the games publishers (not Capcom) were found to have entered into licensing and distribution agreements with various PC games distributors (not Value) in the European Economic Area (EEA) which contained clauses which restricted cross-border sales of the affected titles within the EEA, including the aforementioned Central and Eastern European countries.

The Commission said these agreements lasted generally longer (“between three and 11 years”), and were implemented at different times between March 2007 and November 2018.

Since the investigation started, EU lawmakers have passed a regulation against unjustified geo-blocking. Although the legislation only applies to PC video games distributed on CDs or DVDs, not to downloads. So games are only partially covered.

A Commission review of how the geo-blocking regulation is operating, published last November, discussed a possible extension of its scope in a range of areas, including for games. However it did not make a strong case for that change. (It also found demand for cross-border access to games (and software generally) relatively low vs other content services.)

But while games distributed via digital downloads look set to remain outside the scope of the EU’s unjustified geo-blocking regulation, the fines against Valve et al show that geo-blocking can still be a legal minefield as contractual agreements to restrict cross-border sales run counter to the bloc’s antitrust rules.

The specific breaches are of Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the Agreement on the European Economic Area which prohibit agreements between companies that prevent, restrict or distort competition within the EU’s Single Market, per the Commission.

Rocket Lab has launched its 18th mission, and the first of 2021, as of 8:26 PM NZT (2:30 AM EST). The ‘Another One Leaves The Crust’ mission took off from Rocket Lab’s Launch Complex 1 on the Mahia Peninsula in New Zealand, and flew a single communications microsatellite on behalf of client OHB Group, a satellite manufacturer based in Europe with facilities in Germany, Sweden and the Czech Republic.

Rocket Lab’s launches often feature payloads from more than one customer on the same Electron launch vehicle, but this dedicated payload launch is an example of how the flexibility of its smaller rocket can serve customers even for single small satellite missions. The rocket successfully delivered its payload as intended shortly following take-off.

While Rocket Lab has been developing and testing a booster stage recovery process to help it re-use part of its launch vehicles on subsequent flights, this particular mission did not include a recovery attempt. The company has had significant success with that development process however, and recovered its first booster last year. Sometime this year, it’s expected to attempt a recovery that includes a mid-air catch of the returning first stage via helicopter.

HiPeople, a HR tech startup based in Berlin that wants to automate the reference checking process, has raised $3 million in seed funding.

Leading the round is Mattias Ljungman’s Moonfire, with participation from Capnamic Ventures, and Cherry Ventures. It follows a $1.1 million pre-seed in late 2019. Notably, the seed round was closed fully remote, without any in-person meetings. “Just like the hiring processes of HiPeople’s clients,” founders Jakob Gillmann and Sebastian Schüller told me in an email.

HiPeople says the investment will be used to support growth so that more recruiters can hire remotely using automated reference checks. Longer term, the company is developing a candidate analytics platform to provide rich data and insights on each candidate and enable what it frames as “data-driven” hiring.

“Abstractly-speaking HiPeople is in the talent insights business,” say Gillmann and Schüller. “It’s mission is to enable better hiring by automatically collecting and analyzing talent data, and providing rich insights. HiPeople currently solves this by automating candidate reference checks from request, to collection, and analysis. This allows companies to extend the information they have on a candidate without additional manual work”.

The idea behind the software-as-a-service is that HiPeople’s approach creates a seamless user experience for the recruiter, and “verified, in-depth reference checks they can trust”. As a result, the startup claims that its users on average collect 2x the amount of references on a candidate, in 50% of the time. “Traditionally, reference checks are underutilized due to the highly manual process, and often only exclusively used for executive hiring. HiPeople dusts off reference checks, and enables rich talent insights by rethinking how they are done,” says HiPeople’s founders.

HiPeople’s customers span fast growing startups to tech scale-ups and more established upper mid-market companies. For example, process mining company Celonis, which doubled its workforce in the last 12 months to 1,200 employees globally, uses HiPeople to improve hiring quality for roles in San Francisco, Munich and Tokyo. “By programmatically conducting reference checks the company hires talent based on verified insights on topics like areas of improvement, skills, teamwork style, or work values,” explains HiPeople.

Adds Moonfire’s Mattias Ljungman: “Workflow automation of repetitive processes, and insights on the candidate that go beyond the limitations of the CV, are a clear pain for anybody in recruiting. The Covid-influenced reality of remote work, hence remote hiring practices, has increased the complexity of finding the right talent. HiPeople created a way to enable anybody who is hiring to make better decisions, whilst improving processes and increasing hiring velocity”.

Gillmann and Schüller tell me that in Europe, HiPeople mainly competes with the existing infrastructure and processes recruiters use to manually conduct references checks. In the U.S., companies like Xref or Crosschq are more direct competitors in terms of automating reference checks.

Alibaba’s billionaire founder resurfaced as he spoke to 100 rural teachers through a video call, three months after his last public appearance in October, sending the e-commerce firm’s shares up more than 8% in Hong Kong.

A recording of the call was first posted on a news portal backed by the government of Zhejiang, the eastern province where Alibaba is headquartered, and the video was verified by an Alibaba spokesperson.

Speculations swirled around Ma’s whereabouts after media reported in December that he skipped the taping of a TV program he created. Ma, known for his love for the limelight, has seen his e-commerce empire Alibaba and fintech giant Ant Group increasingly in the crosshairs of the Chinese authorities in recent months.

Ma last appeared publicly at a conference where he castigated China’s financial regulatory system in front of a room of high-ranked officials. His controversial remark, according to reports, prompted the Chinese regulator to abruptly halt Ant’s initial public offering, which would have been the biggest public share sale of all time.

Ant has since been working on corporate restructuring and regulatory compliance under the directions of the government. Alibaba, China’s largest e-commerce platform, also came under scrutiny as market regulators opened an investigation into its alleged monopolistic practices.

Some argue that the recent clampdown on Jack Ma’s internet empire signals Beijing’s growing unease with the country’s super-rich and private-sector power brokers.

“Today, Alibaba and its archrival, Tencent, control more personal data and are more intimately involved in everyday life in China than Google, Facebook and other American tech titans are in the United States. And just like their American counterparts, the Chinese giants sometimes bully smaller competitors and kill innovation,” wrote Li Yuan for the New York Times.

“You don’t have to be a member of the Communist Party to see reasons to rein them in.”

In the 50-second clip, Ma is seen talking directly into the camera against what appears to be decorative paintings depicting a water town typical of Zhejiang. An art history book is shown amid a stack of books, alongside a vase of fresh flowers and a ceramic figurine of a stout, reclining man who looks relaxed and content.

Ma addressed the 100 teachers receiving the Jack Ma Rural Teachers Award, which was set up by the Jack Ma Foundation to identify outstanding rural teachers every year. The video also briefly shows Ma visiting a rural boarding school in Zhejiang on January 10. The award ceremony was moved online this year due to the pandemic, Ma told the award recipients.

When Ma announced his retirement plan, he pledged to return to his teaching roots and devote more time to education philanthropy, though the founder still holds considerable sway over Alibaba by keeping a seat in the powerful Alibaba Partnership. The legendary billionaire began his career as an English teacher in Hangzhou, and on Weibo, China’s Twitter equivalent, he nicknames himself the “ambassador for rural teachers.”

Barcelona-based Landbot, a ‘no-code’ chatbot builder, has bagged a $8M Series A led by the Spanish-Israeli VC firm Swanlaab, alongside support from Spain’s innovation-focused public agency, CDTI. Previous investors Nauta Capital, Encomenda and Bankinter also participated in the round.

We last chatted to Landbot back in 2018 when it raised a $2.2M seed and had 900+ customers. It’s grown that to ~2,200 paying customers, with some 50,000 individuals now using its tool (across both free and paid accounts).

Since its seed it’s also increased recurrent revenues 10x — and is expecting growth to keep stepping up, fuelled by the new financing.

It says the coronavirus pandemic has supercharged demand for conversational landing pages as all sorts of businesses look for ways to automate higher volumes of digitally inbound customer comms, without needing to make major investments in in-house IT.

Landbot’s customers range from SMEs to specific teams and products within larger organisations, with the startup name-checking the likes of Nestlé, MediaMarkt, CocaCola, Cepsa, PcComponentes and Prudential among its customer roster.

“We are seeing strong traction from industries like eCommerce, Financial Services and Marketing Agencies,” CEO & co-founder Jiaqi Pan tells TechCrunch. “The ecommerce segment is one we have seen the most growth in since COVID-19, where we increased 2x the number of customers from ecommerce industry.”

The new funding will be used to double Landbot’s team during 2021 (currently it employs 40 people) — with hiring planned across sales, marketing and engineering.

The startup, which launched its ‘no code’ flavor of chatbot builder back in 2017, previously relocated HQ from Valencia to Barcelona to help with recruitment.

Since Landbot’s launch, the burgeoning ‘no code/low code’ movement has become a fully fledged trend driven by demand for productivity- and lead-boosting digital services outstripping most businesses’ supply of expert in-house techies able to build stuff.

Hence the rise of service-builder tools that make customizable tech capabilities accessible to non-technical staff.

The pandemic has merely poured more fuel on this fire — and low-friction tools like Landbot are clearly reaping the rewards.

Interestingly, as well as competing with other conversational chatbot builders, like San Francisco-based ManyChat, Landbot says it’s seeing traction from customers who are seeking to replace web forms with more engaging chat interfaces.

Its drag-and-drop chatbot builder tool supports information workers to design what Landbot bills as “an immersive web page experience filled with gifs and visual elements to capture the attention of the end-user” — so you can understand the appeal for SMEs to be able to replace their boring old static forms with an experience any smartphone user is familiar with from using messaging apps like WhatsApp.

“In terms of the main competitor in the no-code space, we have some overlap with ManyChat as the most direct competitor for Chatbot. On the other hand, as we have a lot of customers using us to replace their forms we are competing also against form builders like Typeform,” says Pan, the latter another Barcelona-based startup which similarly bills itself as a platform for “conversational” and “interactive” data collection.

Landbot notes it recently acquired India-based Morph.AI, a chat-based marketing automation tool, which it’s using to help convert social, website and ad traffic into leads — also with the aim of further expanding into presence in the Asian market.

To date, 90% of its customers are international, with 60% coming from the U.S., U.K. and Germany.

Commenting on the Series A in a statement, Juan Revuelta, general partner of Swanlaab, said: “The beauty of Landbot is in the drag and drop solution of the product. The simplicity is critical to making this product accessible to everyone across many different types of business. If you’re a small company you don’t have the luxury of time or money to solve issues in customer service or run lavish marketing campaigns.

“Landbot helps all businesses to have truly frictionless conversations with customers and exchange the data they need to make smarter decisions and scale. The team has had a remarkable 2020, and we’re excited to support them in helping more businesses this year.”