A failed acquisition usually raises the same set of questions: what does this mean for young startups in the industry? Will there be a chilling effect and affect the ratings? Will VCs stop funding this category? What will the exit environment look like in the future?
This week gave that narrative a bullish turn. Visa and Plaid announced that they have agreed not to merge anymore. The $ 5.3 billion deal was antitrust scrutiny by the DOJ and ended up ending amid these regulatory challenges.
Fintech VCs and startups alike reacted with aggressive optimism about Plaid's future as an independent fintech startup.
The most common arguments?
- The price of plaid is currently well over $ 5.3 billion. Now that this is a free bird, it will aim for a much bigger exit
- Plaid will go public through SPAC because it is responsible for its own fate.
- And my favorite: one day, Plaid will buy Visa.
In an interview with ., Plaid CEO Zach Perret wouldn't give too many details about the future (and whether a SPAC is involved), but he said he had new "clarity" going forward.
The fact that fintech is positive about the future of fintech is not entirely surprising. I will say that a deal can never make or break a sector, but a failed merger can certainly make the current temperature pop up in the market. Startups Weekly Readers will remember last week's issue where P & G's decision not to acquire Billie could affect DTC exit opportunities. Fintech seems undisturbed and indeed solemn. The only counter-argument I've received via Twitter DM is that it could set a bad precedent for large fintech mergers.
"Or maybe … companies learn from this and try to make riskier acquisitions earlier in a company's life cycle because they know that if they grow the company too big, they will lose their chance," said Rami Essaid, founder of Finmark.
It wasn't until 2021 that a $ 5.3 billion resolution and an investigation by the DOJ could be viewed as a blessing. Rock on, "Plaid for X" starts.
Before we go any further, follow me on Twitter for my bad jokes and early stage coverage of startups. You can also reach me anytime at [email protected]
Columbus is the new Miami, the new San Francisco
I hope Sub-Hed has given you a headache because that is exactly the debate about where for me the best place to start a business is. The rise of Work From Anywhere has encouraged VCs to leave San Francisco for markets like Miami or Austin in search of the next unsung hero in their portfolio.
However, investors may not see the financial benefit of moving to an emerging market in months but in years. Venture is a long game (at least most of the time).
Here's what you should know:Connie Loizos, editor of Silicon Valley: Drive Capital, a Columbus, Ohio-based venture capital firm founded by two former Sequoia investors, now has over $ 1.2 billion in net worth. However, before breakout companies like Root and Olive AI emerged, Drive had to play the unusual role of investing in a region with no major investment infrastructure.
Etc: Founding partner Chris Olsen explained how they built their roots:
“We had to spend a lot of time going to universities, bringing new seed managers into the business and helping them source and build all of this infrastructure from scratch so that the next entrepreneur is out here (instead of moving). and it works. In our first year we got 1,800 in-depth interest (startups), then it was about 3,000 and now it's up to about 7,000, more than I've heard from other ventures I've seen in California. And I don't think it's because we're great. I think that's more (a reflection of) the extent of the opportunities that are now available. One of the things we would like to see more of is more venture capitalists coming here because there are certainly more opportunities than we can invest. "
The CFO Tech Stack
If you want to start a business, go to a startup and find where employees still use an Excel spreadsheet. The best products are those driven by frustrations, right?
Here's what you should know: per executive editor Danny Crichton: For a trio of Palantir alums, 15 collective years at the government tech company now open to the public revealed a major tech void for CFOs. So they started Mosaic, a tech stack that helps tax officials communicate better and get their jobs done.
Etc: Co-founder Bijan Moallemi describes the mistake other platforms make:
“Everyone wants to be strategic, but it's so difficult because 80% of your time is pulling data from these disparate systems, cleaning, mapping, updating your Excel files, and maybe 20% (of your time) actually taking a step back and understanding what the dates tell you. "
The future of consumer hardware startups beyond Peloton
Are Wearables Still Exciting? Will it ever get easier to take off consumer hardware? What strategy has made Peloton so successful?
These questions and more are answered in the latest Extra Crunch consumer hardware survey, which brings together VCs from SOSV, Lux Capital, Shasta Ventures, and others.
Here's what you should know: Everyone studies the peloton recipe for success. The big question for consumer hardware startups, however, is whether the boom in the home fitness market will carry over to other use cases.
Etc: SOSV's Cyril Ebersweiler noted that disrupting the distribution of the supply chain during COVID-19 was difficult for category startups, but the need for innovative solutions has never been clearer.
"Everyone is waiting for new and mind-boggling experiences, and I think we've all learned the shortcomings or the magic of some IoT products through on-site protection (orders). Well-functioning room and environment technologies will be in demand (audio or video), while "holographic Skype" will penetrate households thanks to Looking Glass. "
Also: In another investor survey, five VCs rated the future of cannabis in 2021.
Pop goes to the public market
We had another noisy week with privately owned startups going to a very warm reception on Wall Street. The most opulent story of the week was definitely the debut of Affirm, which doubled its already soaring price when it officially began trading.
Here's what you should know:According to our resident IPO reporter Alex Wilhelm, who writes The Exchange:
All about .
Extra Crunch Live returns in a big way in 2021. We'll be interviewing VC / Founder duos on how their Series A deals have gone, and Extra Crunch members will have the opportunity to get live feedback on their pitch deck. You can view our plans for ECL in 2021 here or use this form to submit your pitch deck. The episodes will air every Wednesday at 3 p.m. ET / 12 p.m. PT starting February.
If you're feeling particularly generous, take this survey to help shape the future of .
In the course of the week
Seen on .
Glassdoor: Top tech companies to work for in 2021
Signal's Brian Acton talks exploding growth, monetization, and outrage over WhatsApp data sharing
Two-year NUVIA sells to Qualcomm for $ 1.4 billion
Loop starts from behind the scenes to make car insurance fairer
General Fusion, a developer of nuclear fusion technologies, is now backed by Shopify and Amazon founders
Seen on Extra Crunch
Lessons learned from the Top Hat acquisition
12 “flexible VCs” that operate where equity meets revenue sharing
Dear Sophie, what is the new minimum salary for H-1B visa applicants?
Equity (and a Bonus Equity)
The news keeps coming, so let's keep recording. This week the trio talked about the plaid visa deal, but also about the next big bet the Palantir Mafia was making. In the early news, I covered a fintech accelerator that turned into an edtech accelerator and a new startup from Austin that is making auto insurance fairer. We also discussed a bit about SPACs and Danny was… optimistic?
Listen to our episode, follow the pod on Twitter and please check out our bonus equity episode released today. It's an episode entirely devoted to the payments and e-commerce finance deluge that was released this week.
Until next week,