A while back I gave up the idea of finding a thread that connects each story in the weekly Extra Crunch recap. There are no single theories about technology news.
The stories that made the deepest impression related to two messages that dominated the week – Visa and Plaid canceled their $ 5.3 billion acquisition agreement and sizzling IPOs for Affirm and Poshmark.
It wasn't shocking to see Plaid and Visa sing "Let's Call The Whole Thing Off" in harmony after the US Department of Justice filed a lawsuit to block their deal. But I was surprised that I edited an interview the next day with Alex Wilhelm, CEO of Plaid, Zach Perret, in which the CEO said that growing the company alone was "once again" the right strategy.
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In an analysis for Extra Crunch, Managing Editor Danny Crichton suggested that federal regulators' new interest in antitrust enforcement will affect future valuations. For example, Procter & Gamble and D2C women's beauty brand Billie also canceled their proposed merger last week after the Federal Trade Commission objected in December.
Given the FTC's steps last year to prevent the Billie and Harry takeover, "it seems clear that US antitrust authorities want widespread consumer competition in household goods," Danny concluded, and I suspect so also applies to plaid.
In December, C3.ai, Doordash and Airbnb entered the public markets with great success. This week, the Poshmark used clothing market rose 140% on its first day of trading. Affirm "valued its IPO at $ 49 per share, above its elevated range," Alex reported.
In a post titled "A Theory of the Current IPO Market," he identified eight key ingredients for brewing a debut with a big pop on day one, including "Existing in a Near Zero Interest Rate Climate" and "Keeping Companies Private" longer. "Verily, words to live by!
Come back next week for more on the public markets in The Exchange, an interview with Bryan Goldberg, CEO of Bustle, where he shares his plans for the company's public listing, a comprehensive post that clears the regulatory hurdles for D2C -Consumer brands picks up, and much more.
If you live in the United States, enjoy your MLK Day vacation weekend and wherever you are, thank you for reading Extra Crunch.
Senior Editor, .
@ Your protagonist
The rapid growth in 2020 shows the untapped potential of the OKR software market
After spending much of the week covering the foamy IPO market of 2021, Alex Wilhelm devoted his column this morning to studying the OKR-focused software sector.
Measurement targets and key results are central to any business, perhaps even more so since knowledge workers began working remotely in greater numbers last year.
A sign of the times: This week, the Gtmhub SaaS platform for enterprise orchestration announced that it had raised a Series B worth $ 30 million.
To get a feel for just how big the TAM is for OKR, Alex reached out to several companies and asked them to share new and historical growth metrics:
“Some startups that focus on OKR haven't contacted us, and some executives wanted to get the best of the list that we sometimes allow for openness among start-up managers,” he wrote.
5 consumer hardware VCs share their investment strategies for 2021
For our latest investor survey, Matt Burns interviewed five VCs who actively fund consumer electronics startups:
- Hans Tung, managing partner, GGV Capital
- Dayna Grayson, Co-Founder and General Partner of Construct Capital
- Cyril Ebersweiler, general partner, SOSV
- Bilal Zuberi, partner at Lux Capital
- Rob Coneybeer, Managing Director of Shasta Ventures
"Consumer hardware has always been a difficult market, but the COVID-19 crisis made it even more difficult," says Matt, noting that the pandemic has generated a lot of interest in fitness startups like Mirror, Peloton and Tonal.
Bonus: Many VCs have listed the founders, investors, and companies taking the lead in consumer hardware innovation.
A theory about the current IPO market
If you're looking for some insight into why everything feels so damn silly in the public markets this year, a post Alex wrote on Thursday afternoon may offer some perspective.
As someone who pays close attention to the late-stage venture markets, he has identified eight factors driving debuts into the stratosphere for unicorns like Affirm and Poshmark.
TL; DR? "A lot of demand, little supply, the price goes boom."
Poshmark rates the IPO above the range as the public markets continue to apply to YOLO startups
Poshmark apparel resale market closed more than 140% yesterday on its first day of trading.
On Thursday's edition of The Exchange, Alex noted that Poshmark increased its valuation by selling 6.6 million shares at IPO for $ 277.2 million.
Poshmark's trading boost is good news for its employees and shareholders, but it is poorly reflected in "the risk-focused moneyers who we think they know what they're talking about when it comes to equity in private companies", he says.
Will startup ratings change amid growing antitrust concerns?
This week, Visa announced it would halt its proposed acquisition of Plaid after the US Department of Justice filed a lawsuit last fall to block Plaid.
Last week Procter & Gamble canceled its purchase of Billie, a beauty products startup for women. In December, the US Federal Trade Commission sued to block this deal as well.
There was once a time when the U.S. government took an independent approach to antitrust enforcement, but the tide has turned, says executive editor Danny Crichton.
Going forward, "antitrust law will not generally kill acquisitions, but it may prevent buyers with the highest reserve prices from going into battle."
Dear Sophie, what is the new minimum salary for H-1B visa applicants?
I am a student currently working on F-1 STEM OPT. The company I work for said they will sponsor me for an H-1B visa this year.
I heard that the H-1B random lottery is being replaced with a new system that will select H-1B candidates based on their salaries.
How will this new process work?
– Positive in Palo Alto
Venture capitalists are reacting to the collapse of the Visa plaid deal
After it was revealed that Visa’s $ 5.3 billion purchase of API startup Plaid was falling apart, Alex Wilhelm and Ron Miller interviewed several investors to get their reactions:
- Anshu Sharma, Co-Founder and CEO of SkyflowAPI
- Amy Cheetham, director of Costanoa Ventures
- Sheel Mohnot, Co-Founder of Better Tomorrow Ventures
- Lucas Timberlake, partner at Fintech Ventures
- Nico Berardi, founder and general partner of ANIMO Ventures
- Allen Miller, VC, Oak HC / FT
- Sri Muppidi, VC, Sierra Ventures
- Christian Lassonde, VC, Impression Ventures
Plaid CEO advertises new "clarity" after failed Visa acquisition
Alex Wilhelm interviewed Zach Perret, CEO of Plaid after the Visa acquisition was canceled, to learn more about his mindset and the company's near-term plans.
Perret, noting that the past few years have been a "roller coaster ride," said the Visa deal at the time was the right decision, but it was "once again" Plaid's best way forward.
2021: A SPAC odyssey
In Tuesday's edition of The Exchange, Alex Wilhelm took a closer look at the blank check offers for the Bakkt digital asset market and SoFi personal finance platform.
In order to create a detailed analysis of the investor presentations for both offers, he tried to answer two questions:
- Are special-purpose acquisition companies a route to public markets for "potentially promising companies that lacked obvious, short-term growth stories"?
- Given the number of unicorns and the limited number of companies that can go public at any given time, SPACS would potentially help fill the liquidity gap.
Flexible VC: A new model for startups aiming for profitability
12 “flexible VCs” that operate where equity meets revenue sharing
Startups in the growth phase looking for funding have a new option: “flexible VC” investors.
Investors falling into this category are a mix of revenue-based investing and traditional VC, allowing entrepreneurs to "access instant venture capital while maintaining exit, growth path and ownership options."
In a comprehensive statement, fund managers David Teten and Jamie Finney present different investment structures so that founders can get a clear sense of how flexible VC is compared to other venture capital models. In a follow-up post, they share a list of a dozen active investors who are offering funding through these non-traditional channels.
These 5 VCs have high hopes for cannabis in 2021
For some consumers, “cannabis has always been essential,” writes Matt Burns. However, when local governments allowed pharmacies to stay open during the pandemic, it signaled a shift in the regulatory environment and investors became aware of it.
Matt asked five VCs where they think the industry is headed in 2021 and what advice they would give their portfolio companies:
- Morgan Paxhia, Managing Director of Poseidon Investment Management
- Emily Paxhia, managing partner of Poseidon Investment Management
- Anthony Coniglio, CEO of NewLake Capital
- Matt Shalhoub, managing partner of Green Acre Capital
- Jerel Registre, Managing Director of the Curio WMBE Fund