Author: azeeadmin

Cendana Capital, a San Francisco-based fund of funds manager, has amassed stakes in more than 100 venture firms since launching in 2010. For the most part, it did this by focusing on managers who are raising funds of $100 million or less in capital, even foregoing stakes in beloved outfits like Forerunner Ventures and Uncork Capital as their assets under management ballooned well beyond that amount.

Yet as the market changed, however, Cendana founder Michael Kim began to play with that formula. Last spring, for example, when he closed on $278 million in new capital commitments, he said planned to invest in the mostly the seed-stage managers he has always backed, but that he planned to funnel a small amount of capital to pre-seed managers raising $50 million or less, as well as to invest in a sprinkling of international managers.

Now Kim is back with a new idea, and a new fund, that sees him covering even more ground. Called Cendana’s Nano fund, it has raised $30 million in capital from existing Cendana backers to invest in up to 12 investment managers who are piecing together funds of $15 million or less capital. There are simply too many smart people right now making smaller bets for Cendana not to make the move, he suggests. We talked with Kim about the fund — and the changing landscape more broadly — late last week. Our chat has been edited lightly for length.

TC: What’s the thesis behind this Nano fund?

MK: The seed market has evolved a lot over the last 18 months to 24 months. You have this whole world of Twitter VC, meaning people who have a lot of strong opinions and an operator-investor perspective, but who may not have substantial funds behind them. You have solo capitalists like Lachy Groom and Josh Buckley, who’ve gone out and raised hundreds of millions of dollars. You also have the AngelList rolling funds. I think there are probably more than 100 rolling funds out there, and probably 95% of them are [headed by] people who are working at the big tech or private tech companies, and it’s more of a vehicle of convenience for their friends to invest alongside them.

TC: And you think they need more capital than is floating out there already?

MK: I think we are the only institutional LP that is focused at this stage, because as you know, many of the funds of funds and university endowments and family offices have to write big checks, so they’re not going to be investing a little bit into a tiny $10 million fund.

TC: What are you looking for exactly?

MK: The goal is to find the next Lowercase Capital. Not everyone knows this, but Chris Sacca’s first fund was $8 million and it returned 250x. Manu Kumar of K9 Ventures — his first fund was $6.25 million and returned 53x. So you can generate substantial alpha with these smaller funds.

Historically, we would meet with fund managers, and when they said, ‘We’re going to raise a $10 million to $15 million fund,’ we were like,’Okay, sounds interesting. Let’s talk when you’re raising your second fund.’ But we realized that we’re missing out an entire segment of the market. So Nano was created to capture that.

TC: Why draw a line in the sand at $15 million?

MK: First, if you’re going to be running a $100 million seed fund, you have to be writing $1.5 million to $2 million checks, and that’s a super competitive space right now, because not only are there other seed funds but also a lot of firms — Founders Fund, Sequoia Capital, Lightspeed, General Catalyst — that are very active at the seed stage. We’re coming across a lot of these managers who want to stay small, because by writing $300,000 to $400,000, they’re not competing against Sequoia or Forerunner Ventures; they’re just sliding into the round.

TC: Do you worry they will just get washed out of that investment later through subsequent checks from bigger players?

MK: Right now, we now have more than 100 portfolio funds within Cendana, and we did some data analysis. We looked at the fund size, and then the average ownership of each fund. And it turns out there’s a baseline of about 15% of a fund, meaning if you’re a $100 million fund, the average ownership stake [you have in your startups] is around 15%. If you’re a $50 million fund, the average ownership is about 7.5%.

We then looked at performance across our fund managers, and it turns out that of funds with $50 million in capital — our better-performing funds — have more ownership than 7.5%. They have more like 10% to 12%. Now, when you look at these tiny funds, if you’re a $15 million fund, 15% of that [should equate to] 2.2% ownership, but we are seeing that these tiny funds are actually getting more like 4% to 5% ownership. They’re punching above their weight because of who is involved.

TC: Who have you backed so far?

MK: The first one is Form Capital, a fund from Bobby Goodlatte and Josh Williams. Both were early at Facebook; Bobby led the team that designed Facebook Photos and was later an [entrepreneur-in-residence] at Greylock. Josh cofounded Gowalla (acquired by Facebook).

TC: How big a fund are they raising and how much are you giving them?

MK: They raised a $15 million fund, and our strategy is to [account for] 20% of [each of these funds], so we wrote them a $3 million check.

The second fund manager is Jeff Morris Jr.; he runs a fund called Chapter One. He was a senior product guy at Tinder and and an active angel, and he raised a $10 million fund last year into which we wrote a $2 million check.

TC: And the third?

MK: The third manager hasn’t closed the fund, so I can’t disclose his name, but he was a very early employee at Uber and ran their data teams.

The last is an interesting example because this person could probably go out and raise $100 million, but to my point about not wanting to compete against everyone in the world in writing a big check, he’s content to write [sub $500,000] checks into interesting data analytics and AI and machine learning companies, and everybody wants him involved because of his experience and his network of data scientists worldwide.

TC: When Chris Sacca dove in, it was his full-time job, I think. Do you care if these managers are focused solely on investing?

MK: No. With Nano we’re investing in people who may actually have a day job, which would not be a fit for our main fund, but with our Nano fund, our aperture is wider. We welcome anyone out there looking to manage $15 million or less to reach out.

TC: Well, to be clear, you have some criteria. What is it?

MK: No matter who we invest in, they have to have investment experience and an investment track record. What we really look for at the end of the day is a person who has some sort of advantage — whether it’s domain expertise or networks. So you could be an amazing computer scientist in Pittsburgh at Carnegie Mellon and if you’ve made some investments [we’d talk with you]. It could be someone coming out of Stripe or PayPal or Facebook or an entrepreneur in Atlanta.

TC: A $30 million fund of funds is going to get committed pretty fast in this market. Is the plan to raise maybe one every year?

MK: We have an incredible top of the funnel, and as you’re alluding, we’re going to be inundated. But we walk in there and try to meet with everybody.

We’re also in discussions with our existing fund managers to create a nano fund for [some of] them. So, you know, imagine one of our fund managers, running a $100 million fund. Why not create a $10 million nano vehicle with them where they could write $250,000 to $500,00 check? They don’t want to fill up their fund with these small checks, but you could see how, if they were to create this smaller vehicle, it could be very interesting for them for a returns perspective.

TC: So you’d write them a check for a third of this nano fund . .

MK: And their LPs would fill in the rest. I’m sure they’d be excited to do it.

On the heels of Deliveroo raising more than $2 billion ahead of its debut on the London Stock Exchange this week, another hopeful in the food delivery sector has closed a super-sized round. Glovo, a startup out of Spain with 10 million users that delivers restaurant take-out, groceries and other items in partnership with brick-and-mortar businesses, has picked up a Series F of $528 million (€450 million).

Glovo aims to become the market leader in the 20 markets in Europe where it is live today, in part by expanding its “q-commerce” service — the delivery of items to urban consumers in 30 minutes or less — and it will be using the money to double down on that strategy.

This is a milestone funding round not just for the company, but its home country: it marks the largest-ever round raised by a Spanish startup.

“We started in Spain, where you have access to far less capital than other countries in Europe. We do more with less and that’s made us leaner,” said Sacha Michaud, the co-founder of the company, in an interview this week. “We’ve got our own strategy and it seems to be working.”

The funding is being led by Lugard Road Capital and Luxor Capital Group (the former is an affiliate of the latter), with Delivery Hero, Drake Enterprises and GP Bullhound also participating. All are previous backers of Glovo.

“We’re thrilled to have the continued backing of Luxor Capital Group and all of our existing investors. Over the last few months, we’ve moved very, very quickly but our vision remains unchanged,” said Oscar Pierre, Glovo’s other co-founder and CEO, in a statement. “This investment will allow us to double-down in our core markets, accelerate our leadership position in places where we are already very strong and continue to expand our excellent Q-Commerce division, as well as bring new innovations to our unique multi-category offering to extend more choice to our customers.”

Valuation is not being disclosed with this round, but when it raised its $166 million Series E in December 2019 — just ahead of the Covid-19 pandemic that truly changed the face of delivery services in many parts of the world — the company had a valuation of $1.18 billion, according to PitchBook data. Michaud would only confirm to me that it was “definitely an up-round,” which would put it at at least $1.7 billion, based on that estimate.

The funding comes on the heels of a very busy period of fundraising in the sector as investors the race to get in on the delivery of hot food, groceries and other necessities in Europe — a fast-growing business model in the most normal of times that blasted off in the last year as an essential service for consumers confined to their homes, often by government mandate, to stave off the spread of the coronavirus.

Just in the last few days, Gorillas in Berlin raised $290 million on a $1 billion+ valuation for its on-demand grocery business; Everli out of Italy (formerly called Supermercato24) raised $100 million (Luxor is one of its investors too); and reportedly Zapp in London has also closed $100 million in funding. Earlier in March, Rohlik out of the Czech Republic bagged $230 million.

Amid all those private raises, we also had Deliveroo’s IPO yesterday, which — as IPOs so often do — exposed some of the trickier aspects of the business. The company — which is backed by Amazon, a formidable player in food and essentials delivery — easily raised the most of money of the month — $2.1 billion in the private placement ahead of the listing — but then proceeded to slog out its debut on the LSE with shares progressively slumping throughout the day and ending up significantly lower than its offer price.

Areas of concern around Deliveroo serve as cautionary tales for all of them: not just how you price an IPO and what allocation you give to future shareholders, but also the unit economics of your business model, the price of competition, and where labor costs will fit into the bigger picture (and the bottom line).

“We’ve got our own road and we’re doing a pretty good job,” Michaud said in an interview when the subject of Deliveroo IPO came up. “We’re still David versus the Goliath out there.” Part of that for Glovo has also included some decisions made on rationalizing its own business: the company sold off its Latin American operations in a $272 million deal to its backer Delivery Hero last year to focus solely on Europe and adjacent geographies.

But even before the Series F being announced today, Glovo itself was one of the companies raising money for specific purposes, and those efforts point to how it plans to proceed in the weeks and months ahead on its own growth plan.

In January Glovo announced a strategic deal with Swiss real-estate firm Stoneweg, which pitched in €100 million ($117 million), to co-develop a number of “dark stores” in areas where Glovo already operates to improve its distribution networks and help speed up its delivery times. It’s part of a fulfillment operation that complements the hot food that Glovo sells on behalf of its restaurant partners: the dark stores are stocked with items Glovo sells on behalf of other companies such as Carrefour, Continente, and Kaufland, as well as a lot of independent retailers, companies that have not built their own (costly) B2C delivery networks but have wanted to provide that service to consumers nonetheless.

Although the company today promises deliveries in 29 minutes, in many markets, Michaud said, it’s already averaging 10-15 minutes and the aim is to make that the norm everywhere.

Restaurant delivery of hot food remains the biggest category of business for Glovo, but the company has seen a surge of demand for the other kinds of items and is expanding that accordingly.

“With Covid, we’ve been delivering pretty much anything you want in your city,” Michaud said. “Covid has been an accelerator and has educated the market. Instead of crossing city and spending time waiting and buying items, anything I want and Glovo will bring it to me. Why wouldn’t I do this?” He believes the more traditional rush of people doing in-person shopping is “definitely not gong to come back,” with groceries to be in the same position as restaurants in a couple of years. That’s leading the company to expand into more areas: “clothing, fashion and pharmacy, flowers. Hopefully we’re now in a good position to do that.”

Jonathan Green, Founder and Portfolio Manager at Lugard Road Capital, said in a statement: “Our investment in Glovo reflects our commitment to a company and leadership team that continues to innovate and disrupt in the on-demand delivery space.  As a long-term investor in Glovo, we are excited to watch the company continue to delight its customers through its unique multi-category offering, amidst an enormous market opportunity in both existing and new geographies.”

 

Before you can improve a workflow, you have to understand how work advances through a business, which is more complex than you might imagine inside a large enterprise. That’s where Celonis comes in. It uses software to identify how work moves through an organization and suggests more efficient ways of getting the same work done, also known as process mining

Today, the company announced a significant partnership with IBM where IBM Global Services will train 10,000 consultants worldwide on Celonis. The deal gives Celonis, a company with around 1200 employees access to the massive selling and consulting unit, while IBM gets a deep understanding of a piece of technology that is at the front end of the workflow automation trend.

Miguel Milano, chief revenue officer at Celonis says that digitizing processes has been a trend for several years. It has sped up due to COVID, and it’s partly why the two companies have decided to work together. “Intelligent workflows, or more broadly spoken workflows built to help companies execute better, are at the heart of this partnership and it’s at the heart of this trend now in the market,” Milano said.

The other part of this is that IBM now owns Red Hat, which it acquired in 2018 for $34 billion. The two companies believe that by combining the Celonis technology, which is cloud based, with Red Hat, which can span the hybrid world of on premises and cloud, the two together can provide a much more powerful solution to follow work wherever it happens.

“I do think that moving the [Celonis] software into the Red Hat OpenShift environment is hugely powerful because it does allow in what’s already a very powerful open solution to now operate across this hybrid cloud world, leveraging the power of OpenShift which can straddle the worlds of mainframe, private cloud and public cloud. And data straddle those worlds, and will continue to straddle those worlds,” Mark Foster, senior vice president at IBM Services explained.

You might think that IBM, which acquired robotic process automation vendor, WDG Automation last summer, would simply attempt to buy Celonis, but Foster says the partnership is consistent with the company’s attempt to partner with a broader ecosystem.

“I think that this is very much part of an overarching focus of IBM with key ecosystem partners. Some of them are going to be bigger, some of them are going to be smaller, and […] I think this is one where we see the opportunity to connect with an organization that’s taking a leading position in its category, and the opportunity for that to take advantage of the IBM Red Hat technologies…” he said.

The companies had already been working together for some time prior to this formal announcement, and this partnership is the culmination of that. As this firmer commitment to one another goes into effect, the two companies will be working more closely to train thousands of IBM consultants on the technology, while moving the Celonis solution into Red Hat OpenShift in the coming months.

It’s clearly a big deal with the feel of an acquisition, but Milano says that this is about executing his company’s strategy to work with more systems integrators (SIs), and while IBM is a significant partner it’s not the only one.

“We are becoming an SI consulting-driven organization. So we put consulting companies like IBM at the forefront of our strategy, and this [deal] is a big cornerstone of our strategy,” he said.

From the earliest days of the pandemic, it was no secret that video chat was about to become a very hot space.

Over the past several months investors have bankrolled a handful of video startups with specific niches, ranging from always-on office surveillance to platforms that encouraged plenty of mini calls to avoid the need for more lengthy team-wide meetings. As the pandemic wanes and plenty of startups begin to look towards hybrid office models, there are others who have decided to lean into embracing a fully remote workforce, a strategy that may require new tools.

PingPong, a recent launch from Y Combinator’s latest batch, is building an asynchronous video chat app for the workplace. We selected PingPong as one of our favorite startups that debuted last week.

The company’s central sell is that for remote teams, there needs to be a better alternative to Slack or email for catching up with co-workers across time zones. While Zoom calls might be able to convey a company’s culture better than a post in a company-wide Slack channel, for fully remote teams operating on different continents, scheduling a company-wide meeting is often a non-starter.

PingPong is selling its service as an addendum to Slack that helps remote product teams collaborate and convey what they’re working on. Users can capture a short video of themselves and share their screen in lieu of a standup presentation and then they can get caught up on each other’s progress on their own time. PingPong’s hope is that users find more value in brainstorming, conducting design reviews, reporting bugs and more inside while using asynchronous video than they would with text.

“We have a lot to do before we can replace Slack, so right now we kind of emphasize playing nice with Slack,” PingPong CEO Jeff Whitlock tells TechCrunch. “Our longer term vision is that what young people are doing in their consumer lives, they bring into the enterprise when they graduate into the workforce. You and I were using Instant Messenger all the time in the early 2000s and then we got to the workplace, that was the opportunity for Slack… We believe in the next five or so years, something that’s a richer, more asynchronous video-based Slack alternative will have a lot more interest.”

Building a chat app specifically designed for remote product teams operating in multiple time zones is a tight niche for now, but Whitlock believes that this will become a more common problem as companies embrace the benefits of remote teams post-pandemic. PingPong costs $100 per user per year.

Longtime venture capitalist Hans Tung is a big guy. His size might just be lifesaving.

A first-generation Taiwanese-American who came to the U.S., and to Los Angeles specifically, in 1984, it was a fraught time for the then 14-year-old. Two years earlier, a Chinese-American draftsman named Vincent Chin was beaten in Detroit by a Chrysler plant supervisor and his stepson, a laid-off autoworker, who reportedly believed that Chin was of Japanese descent and were angry over the growing success of Japan’s auto industry. Chin, who was attending his own bachelor party the night that he fought off the pair — he was struck repeatedly with a baseball bat — died days later at age 27.

While anti-Asian sentiment may have seemed to lessen over the following decades, it has remained constant, and like countless others, Tung as been on the receiving end of it, he says. “Growing up, I faced my share of taunts, of racial epithets, whether it was in California or Boston or New York.  I’m fortunate that I’m over 6’4″ tall and weigh more than 200 pounds,” or he might be physically harassed at some point, too.

Tung has never been more mindful of his size than now. Even while anti-Asian sentiment never fully dissipated in the U.S., it worsened abruptly last year based on political rhetoric about the coronavirus. “As COVID broke out in China, we knew that Asian Americans would be blamed,” says Tung, who flies back and forth to China routinely for work as a managing director with the cross-border investment firm GGV Capital. “We saw this with SARS, too, but it wasn’t as big a pandemic, so people were being harassed and not killed.”

Anecdotally, Tung believes life is more dangerous right now for Asians in the U.S. based on conversations with friends and family members and the worrisome headlines to emerge of elderly individuals in particular being beaten on the streets of San Francisco and Oakland and on New York subways and outside of Times Square, as happened on Monday when a 65-year-old woman was viscously attacked in a scene that was filmed by an onlooker and has provoked national outrage.

The numbers back him up. From 2019 to 2020, overall hate crime rate declined while hate crimes targeting Asians increased, as first reported by NBC based on analysis released by the Center for the Study of Hate and Extremism at California State University, San Bernardino. Overall, its examination revealed that while such crimes decreased overall by 7 percent last year, those targeting Asian people rose by nearly 150 percent, with the biggest surge in New York, where anti-Asian hate crimes rose from three in 2019 to 28 last year, a 833% increase.

With those numbers seemingly continuing to climb in 2021, Tung and his partners at GGV Capital decided to take action two weeks ago, quickly settling on what they do best, which is to respond to the rising violence with their financial muscle and network.

A first step was publicly offering to match $100,000 in donations to organizations that support the AAPI (Asian American and Pacific Islander) communities. GGV’s move was almost immediately matched by other investors and founders eager to help, including Jeremy Liew of Lightspeed and Eric Kim and Chi-Hua Chien of Goodwater Capital, who also offered to match donations.

Fast forward and Tung says that 11 days into a de facto Twitter campaign, roughly $5 million in donations have now been made by more than 175 founders (including Jen Rubio, Stewart Butterfield, and Eric Yuan) and members of more than 30 venture firms in a kind of partnership that is “rare to see in the VC community,” Tung notes.

It’s a great start, Tung says. At the same time, he notes that the problem is ongoing and that more resources — which everyone is sending on an individual basis to a variety of Asian-American community groups that are dealing with a spiking racism and its implications — are needed. Toward that end, GGV is recommending at least five organizations whose work it believes to be making an impact. These include Asian Americans Advancing Justice, Red Canary Song, GoFundMe Support the AAPI Community, Stop AAPI Hate, and Compassion in Oakland.

Tung takes pains to note that GGV has been active in other campaigns, including AllRaise, the organization that’s bringing more gender equality to investment firms and to the board room. He says that his partners were also highly moved by the Black Lives Matter movement last spring, donating to the NAACP Legal Defense Fund and the Southern Poverty Law Center, among other organizations.

In fact, he says that earlier movements — including an effort by investor Ryan Sarver of Redpoint last year to help both front-line workers and restaurant workers by devising a way for donors to “buy” chef-made meals for hospital staff — have been experiences from which he has learned.

One of those lessons is that when something is close enough to one’s heart, it’s worth the risk of being perceived as a “VC who is showing off” if it moves the needle.

In this case, says Tung, “so many of these crimes are treated as individual incidents and not as hate crimes, which comes with more severe penalties” that he is determined to raise awareness and visibility into the matter, even if it means making himself more vulnerable than he is comfortable.

“When it comes to Asian hate, it’s such a personal matter,” he says.

Longtime venture capitalist Hans Tung is a big guy. His size might just be lifesaving.

A first-generation Taiwanese-American who came to the U.S., and to Los Angeles specifically, in 1984, it was a fraught time for the then 14-year-old. Two years earlier, a Chinese-American draftsman named Vincent Chin was beaten in Detroit by a Chrysler plant supervisor and his stepson, a laid-off autoworker, who reportedly believed that Chin was of Japanese descent and were angry over the growing success of Japan’s auto industry. Chin, who was attending his own bachelor party the night that he fought off the pair — he was struck repeatedly with a baseball bat — died days later at age 27.

While anti-Asian sentiment may have seemed to lessen over the following decades, it has remained constant, and like countless others, Tung as been on the receiving end of it, he says. “Growing up, I faced my share of taunts, of racial epithets, whether it was in California or Boston or New York.  I’m fortunate that I’m over 6’4″ tall and weigh more than 200 pounds,” or he might be physically harassed at some point, too.

Tung has never been more mindful of his size than now. Even while anti-Asian sentiment never fully dissipated in the U.S., it worsened abruptly last year based on political rhetoric about the coronavirus. “As COVID broke out in China, we knew that Asian Americans would be blamed,” says Tung, who flies back and forth to China routinely for work as a managing director with the cross-border investment firm GGV Capital. “We saw this with SARS, too, but it wasn’t as big a pandemic, so people were being harassed and not killed.”

Anecdotally, Tung believes life is more dangerous right now for Asians in the U.S. based on conversations with friends and family members and the worrisome headlines to emerge of elderly individuals in particular being beaten on the streets of San Francisco and Oakland and on New York subways and outside of Times Square, as happened on Monday when a 65-year-old woman was viscously attacked in a scene that was filmed by an onlooker and has provoked national outrage.

The numbers back him up. From 2019 to 2020, overall hate crime rate declined while hate crimes targeting Asians increased, as first reported by NBC based on analysis released by the Center for the Study of Hate and Extremism at California State University, San Bernardino. Overall, its examination revealed that while such crimes decreased overall by 7 percent last year, those targeting Asian people rose by nearly 150 percent, with the biggest surge in New York, where anti-Asian hate crimes rose from three in 2019 to 28 last year, a 833% increase.

With those numbers seemingly continuing to climb in 2021, Tung and his partners at GGV Capital decided to take action two weeks ago, quickly settling on what they do best, which is to respond to the rising violence with their financial muscle and network.

A first step was publicly offering to match $100,000 in donations to organizations that support the AAPI (Asian American and Pacific Islander) communities. GGV’s move was almost immediately matched by other investors and founders eager to help, including Jeremy Liew of Lightspeed and Eric Kim and Chi-Hua Chien of Goodwater Capital, who also offered to match donations.

Fast forward and Tung says that 11 days into a de facto Twitter campaign, roughly $5 million in donations have now been made by more than 175 founders (including Jen Rubio, Stewart Butterfield, and Eric Yuan) and members of more than 30 venture firms in a kind of partnership that is “rare to see in the VC community,” Tung notes.

It’s a great start, Tung says. At the same time, he notes that the problem is ongoing and that more resources — which everyone is sending on an individual basis to a variety of Asian-American community groups that are dealing with a spiking racism and its implications — are needed. Toward that end, GGV is recommending at least five organizations whose work it believes to be making an impact. These include Asian Americans Advancing Justice, Red Canary Song, GoFundMe Support the AAPI Community, Stop AAPI Hate, and Compassion in Oakland.

Tung takes pains to note that GGV has been active in other campaigns, including AllRaise, the organization that’s bringing more gender equality to investment firms and to the board room. He says that his partners were also highly moved by the Black Lives Matter movement last spring, donating to the NAACP Legal Defense Fund and the Southern Poverty Law Center, among other organizations.

In fact, he says that earlier movements — including an effort by investor Ryan Sarver of Redpoint last year to help both front-line workers and restaurant workers by devising a way for donors to “buy” chef-made meals for hospital staff — have been experiences from which he has learned.

One of those lessons is that when something is close enough to one’s heart, it’s worth the risk of being perceived as a “VC who is showing off” if it moves the needle.

In this case, says Tung, “so many of these crimes are treated as individual incidents and not as hate crimes, which comes with more severe penalties” that he is determined to raise awareness and visibility into the matter, even if it means making himself more vulnerable than he is comfortable.

“When it comes to Asian hate, it’s such a personal matter,” he says.

Facebook has some thoughts and updates about its News Feed, Siri gets some new voices and Tonal becomes a unicorn. This is your Daily Crunch for March 31, 2021.

The big story: Facebook makes it easier to view a non-algorithmic News Feed

Facebook highlighted features today that should make it easier for users to see a version of the News Feed that isn’t shaped by the company’s algorithms. These include a Favorites view that displays posts from up to 30 of your favorite friends and Pages, as well as a Most Recent view, which just shows posts in chronological order. Some of these options existed previously, but they’ll now be easily accessible through a new Feed Filter Bar.

At the same time, the company’s VP of Global Affairs, Nick Clegg, pushed back against criticism of the company’s algorithmic News Feed, saying that personalization is common and useful across the web, though he added, “It would clearly be better if these [content] decisions were made according to frameworks agreed by democratically accountable lawmakers.”

Speaking of content decisions, Facebook also cautioned Donald Trump’s daughter-in-law Lara Trump today for posting an interview with the former president, who has been banned from the social network.

The tech giants

Apple adds two brand new Siri voices and will no longer default to a female or male voice in iOS — This means that every person setting up Siri will choose a voice for themselves.

Instagram officially launches Remix on Reels, a TikTok Duets-like feature — Remix offers a way to record your Reels video alongside a video from another user.

Spotify adds three new types of personalized playlists with launch of ‘Spotify Mixes’ — Your Spotify Mixes will include artist mixes, genre mixes and decade mixes.

Startups, funding and venture capital

Strength-training startup Tonal crosses unicorn status after raising $250M — To date, the at-home fitness tech startup has raised $450 million.

Apple invests $50M into music distributor UnitedMasters alongside a16z and Alphabet —  The focus of UnitedMasters is to provide artists with a direct pipeline to data around the way that fans are interacting with their content and community.

Diversity-focused Harlem Capital raises $134M — Apparently 61% of Harlem Capital’s Fund I portfolio companies are led by Black or Latinx executives, while 43% are led exclusively by women.

Advice and analysis from Extra Crunch

Five machine learning essentials nontechnical leaders need to understand — For engineering and team leaders without an ML background, the incredible pace of change can feel overwhelming and intimidating.

What to make of Deliveroo’s rough IPO debut — After a lackluster IPO pricing run, shares of Deliveroo are lower today, marking a disappointing debut for the hot delivery company.

Embedded procurement will make every company its own marketplace — Merritt Hummer of Bain Capital Ventures argues that with embedded procurement, businesses will buy things they need through vertical B2B apps.

(Extra Crunch is our membership program, which helps founders and startup teams get ahead. You can sign up here.)

Everything else

Report finds going remote made workplaces more hostile for already marginalized groups — The Project Include report is based on a survey of about 2,800 people and interviews with tech workers and subject matter experts in numerous countries and industries.

The Weeknd will sell an unreleased song and visual art via NFT auction — Abel Tesfaye, the Super Bowl-headlining musician known as The Weeknd, is the latest artist to embrace the excitement around NFTs.

Here’s what you don’t want to miss tomorrow at TC Early Stage 2021 — The event will include a wide range of presentations that span the startup ecosystem.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 3pm Pacific, you can subscribe here.

Sarah Kunst, founding partner at Cleo Capital, has worn many hats. She’s been an entrepreneur, served on plenty of boards, is a contributing author at Marie Clare, has been a senior advisor to Bumble and worked as a consultant in marketing, business development and more.

And with all that experience, she knows all too well that the process of fundraising starts well before your first pitch meeting. That’s why we’re so excited to have Kunst join us at Early Stage in July to discuss how to get ready to fundraise.

This isn’t the first time Kunst has discussed the topic with us. On a recent episode of Extra Crunch Live, Kunst and one of her portfolio company founders Julia Collins described how to conduct the process of fundraising.

For example, there is a story to tell, metrics to share and an art to building momentum before you ever start filling your calendar. That all requires preparation, and Kunst will outline how to go about that at our event in July.

Early Stage is going down twice this year, with our first event taking place tomorrow! Here’s a look at some of the topics we’ll be covering:

Fundraising

• Bootstrapping Best Practices (Tope Awotona and Blake Bartlett, Calendly)
• Four Things to Think About Before Raising a Series A (Bucky Moore, Kleiner Perkins)
• How to Get An Investor’s Attention (Marlon Nichols, MaC Venture Capital)
• How to Nail Your Virtual Pitch Meeting (Melissa Bradley, Ureeka)
• How Founders Can Think Like a VC (Lisa Wu, Norwest Venture Partners)
• The All-22 View, or Never Losing Perspective (Eghosa Omoigui, EchoVC Partners)

Operations:

• Finance for Founders (Alexa von Tobel, Inspired Capital)
• Building and Leading a Sales Team (Ryan Azus, Zoom CRO)
• 10 Things NOT to Do When Starting a Company (Leah Solivan, Fuel Capital)
• Leadership Culture and Good Governance (David Easton, Generation Investment Management)

The cool thing about Early Stage is that it’s heavy on audience Q&A, ensuring that everyone gets the chance to ask their own specific questions. Oh, and ticket holders get free access to Extra Crunch.

Interested? You can buy a ticket here.

While the growth of game-streaming audiences have continued on desktop platforms, the streaming space has felt surprisingly stagnant at times, particularly due to the missing mobile element and a lack of startup competitors.

Lowkey, a young gaming startup that builds software for game streamers, is aiming to build out opportunities in bit-sized clips. The startup wants to be a hub for both creating and viewing short gaming clips but also sees a big opportunity in helping streamers cut down their existing content for distribution on platforms like Instagram and TikTok where short-form gaming content sees a good deal of engagement.

The startup announced today that they’ve closed a $7 million Series A led by Andreessen Horowitz with participation from a host of angel investors including Figma’s Dylan Field, Loom’s Joe Thomas and Plaid’s Zach Perret & William Hockey.

We last covered Lowkey in early 2020 when the company was looking to build out a games tournament platform for adults. At the time, the company had already pivoted after going through YC as Camelot but which allowed audiences on Twitch and YouTube pay creators to take on challenges. This latest shift brings Lowkey back to the streaming world but more focused on becoming a tool for streamers and a hub for viewers.

One of the challenges for streamers has been adapting widescreen content for a vertical video form factor, but CEO Jesse Zhang says that it’s not really a problem with most modern games. “Games inherently want to focus you attention on the center of the screen,” Zhang tells TechCrunch. “So, almost all clips extend really cleanly to like a mobile format, which is what we’ve done.”

Twitch and YouTube Gaming have proven to be pretty uninterested in short-form content, favoring the opportunities of long-form stream that allow streamers to press broadcast and upload 30 minutes+ streams. Lowkey users can easily upload footage captured from Lowkey’s desktop app or directly import a linked stream. This allows content creators to upload and comment on their own footage or remix and respond to another streamer’s content.

Lowkey’s desktop app is available on Windows and their new mobile app is now live for iOS.

On the same day that Deliveroo’s IPO fizzled at the start of trading, Compass announced via a fresh S-1 filing that it will reduce the number of shares in its impending flotation and sell them at a lower price.

The move by Compass, a venture-backed residential brokerage, to lower its implied public-market valuation and sell fewer shares is a rebuke of the company’s earlier optimism regarding its valuation and ability to raise capital. The company’s IPO is still slated to generate as much as a half-billion dollars, so it can hardly be called a failure if it executes at its rejiggered price range, but the cuts matter.

Especially when we consider several other factors. The Deliveroo IPO, as discussed this morning, was impacted by more than mere economics. And there are questions regarding how interested seemingly more-conservative countries’ stock exchanges will prove in growth-oriented, unprofitable companies.

But added to the mix are recent declines in the valuation of public software companies, effectively repricing the value of high-margin, recurring revenue. The reasons behind that particular change are several, but may include a rotation by public investors into other asset categories, or an air-letting from a sector that may have enjoyed some valuation inflation in the last year.

In that vein, SMB cloud provider DigitalOcean’s own post-IPO declines from its offering price are a bit more understandable, as is a lack of a higher price interval from Kaltura, a video-focused software company, as it looks to list.

Taken together, the various market signs could point to a modest-to-moderate cooling in the tech IPO market. For a host of companies looking to debut via a SPAC, that could prove to be bad news.