VCs reload forward of the election as unicorns energy forward – .

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Venture capital gets less diverse in 2020 – TechCrunch

This is The . Exchange, a newsletter that is sent out on Saturdays based on the column of the same name. You can register for the e-mail here.

It's been an active week in the tech world with great news from Facebook, Twitter and Apple. But after the headline noise, there was a steady drumbeat of bullish news for unicorns or private corporations worth $ 1 billion or more.

Bullish week for unicorns

The exchange spent a good part of the week looking at various stories of unicorns or companies that will soon fit into the bill, and it's surprising to see how much positive financial news even after what we had to write about dated Barrel were.

Databricks, For example, . gave an overview of financial data prior to its regular release, including the fact that the annual execution rate (not ARR) had increased from $ 200 million in Q2 2019 to $ 350 million by the end of Q3 2020 IPO ready, but not rushing to the public markets.

Stick to our theme, calm wants more money on a huge new valuation, maybe up to $ 2.2 billion, which is no surprise. This is more good unicorn news. So did the report that "India's Razorpay became a unicorn after its new $ 100 million round of funding" released this week.

Razorpay is just one of several Indian startups that have become unicorns during COVID-19. (And here's another round-up this week of over half a dozen startups that turned unicorns "in the midst of the pandemic.")

There has been enough good unicorn news lately that we lost track of it. Things like Seismic, which brings in $ 92 million, increasing the valuation from a few weeks ago to $ 1.6 billion. How did that get lost in the mix?

All of this is important because while the IPO market has drawn a lot of attention in the last quarter or so, the unicorn world has not sat still. In fact, the unicorn VC activity appears to be the highest we've seen since 2019.

And as we'll see in a moment, the unicorn mill grist is being replenished as we speak. So expect more of it until something substantial breaks our current investing and exit pattern.

Market notes

What do unicorns eat? Cash register. And many, many VCs have raised money in the past seven days.

A partial list follows. Investors could be trying to raise funds before the elections, and whatever mess may result. So, in no particular order, here's who is re-purged:

  • $ 450 million for OpenView, $ 800 million for Canaan, $ 840 million for True Ventures, and $ 950 million for Lead Edge Capital
  • Benson Capital Partners has set up a $ 50 million fund. Gayle Benson, after whom the company is named, owns several New Orleans sports teams, according to Forbes.
  • Plus Funds Capital, which according to FondsglobalMENA was built by two former 500 startups Mena investors, has raised $ 60 million.
  • The first round is looking for $ 220 million, Sinovation Ventures, former Google manager Kai-Fu Lee, is looking for a billion, while Khosla wants something more.

All the capital has to go to work, which means a lot more rounds for many, many startups. The stock market also caught up with a somewhat new company this week: Race Capital. Led by Alfred Chuang, formerly BEA, an angel investor who is now responsible for his own fund, the company must invest $ 50 million.

If we're sticking to private investing in startups right now, pretty much has happened this week that we need to know more about. Like API-backed Argyle raising $ 20 million from Bain Capital Ventures for what FinLedger calls "unlocking and democratizing access to employment records." . is currently tracking the progress of API-led launches.

On the fintech side, M1 Finance raised $ 45 million for its consumer fintech platform in a Series C, while another roboadvisor, Wealthsimple, raised $ 87 million while becoming a unicorn. And while we're in the fintech space, Stripe slashed $ 200 million this week for Nigerian startup paystack. We need to pay more attention to the African startup scene. On the smaller end of the fintech industry, Alpaca raised another $ 10 million to help other companies become Robinhood.

A few more notes before we change course. Kahoot raised $ 215 million from a boom in distance education, another trend that will be inevitable in 2020 as part of the larger edtech boom (our own Natasha Mascaren has more).

As we move from the private to the public market, we need to briefly discuss SPACs. The exchange was on the phone this week with Toby Russell of Shift, a publicly traded company that is trading after the merger with a SPAC, namely Insurance Acquisition Corp.. Early trading is just going so well, but the CEO explained to us exactly why he was chasing a SPAC that was actually interesting:

  • Shift could have gone public via an IPO, Russell said, but prioritized a SPAC-led debut because his company wanted to optimize for a capital raise to keep the company growing.
  • How come? The private investment in public equity (PIPE) associated with the SPAC option ensured that Shift would have hundreds of millions in cash.
  • Shift also wanted to minimize what the CEO called market risk. A SPAC deal could happen regardless of what the broader markets were up to. And when the company made the decision to debut via a SPAC in April, some caution, we believe, made sense.

Now Shift is public and newly capitalized. Let's see what happens to its stocks when it comes to quarterly reporting. (If it wavers, of course, it's a bad grade for SPACs, but conversely, a successful trade could add a little more momentum to SPAC-Mageddon.)

A few more things and we're done. Unicorn exits had a good week. First, Datto's IPO continues. An initial price was set this week that could be over $ 4 billion. Again this week, Roblox announced that it had filed for an IPO, albeit privately. It's also worth billions. And finally, DoubleVerify plans to go public for up to $ 5 billion early next year.

Not all liquidity comes through the public markets, as we saw in the Twilio purchase of Segment this week, a deal The Exchange struck to see if the price was cheap or not.

Miscellaneous and miscellaneous

We walk long of course, so here are just a few quick things to add to your weekend tea and coffee mental reading!

Next week we'll dig deeper into third-quarter venture capital data, which you can get a taste of from female founders here, a topic we covered in more depth on Friday.

Alex