Category: StartUps

In an ecosystem enthralled with private capital and delayed public debuts, Bill Gurley has been something of a maverick. The former dot-com equity analyst and long-time partner at Benchmark has pushed hard for companies to go public and “grow up,” including at his portfolio company Uber, where he was formerly a board member.

Earlier this year, he noted that “it’s cool to go public again,” and now we are starting to see the fruits of Benchmark’s labors. Over the past 24 hours, two companies – Elastic and Upwork – have submitted their S-1 registration statements to the SEC, and Benchmark is the largest shareholder in both. That follows last year’s IPO for Stitch Fix, where Gurley was the lead investor.

The story of these two public aspirants are certainly divergent. Upwork is the rebranded merger of two companies, Elance and oDesk, which merged in 2013. Benchmark got involved through oDesk, leading a Series B round of investment in the company in 2006, with founding partner Kevin Harvey joining the board. Considering oDesk was founded in 2003, and Elance in 1999, it has certainly been a circuitous route to the public markets for the company.

Elastic, on the other hand, is a relatively rare case of a company going public quite early in its evolution. The startup was founded just a few years ago in 2012 according to Crunchbase, and Benchmark’s Peter Fenton led a $10m series A into the company that same year. Only six years later, the company is heading to the public markets, with a projected unicorn valuation.

While Upwork has certainly been a journey, it’s Elastic that best exemplifies the startup trajectory that I think Gurley has been advocating for the past few years. Given its rapid revenue growth and key ownership of the search engine market, it is doubtful the company would have struggled to raise additional capital from the private markets. Indeed, six years from founding to IPO is more reminiscent of the 1990s, when the IPO was a key early milestone in the development of a startup since private investment was just not available.

The other interesting dynamic here is around capital efficiency. Elastic raised just $162 million in venture capital according to Crunchbase, a surprisingly low number considering its revenues, growth, and valuation. Enterprise startups have been raising more capital over time as sales and marketing costs have soared and the standards required to publicly debut have become more exacting. That capital efficiency is mirrored on the consumer side by Stitch Fix, which had raised just $42 million in venture capital before its IPO.

These are early data points, but it is clear that Gurley’s and Benchmark’s words around capital efficiency and public markets are influencing their advice to their startup boards and leading to very different actions from these founders. It’s a contrast to companies like Palantir and SpaceX, which have seemed to have committed to staying private for as long as possible.

Tiger Global and other crossover hedge funds are also pushing IPOs

Benchmark is not the only company that has had some good S-1 news this week. The lead investor in the other two prominent tech IPOs so far this season — Eventbrite and SurveyMonkey — is Tiger Global, the quiet but prolific crossover hedge fund. The fund owns 21.3% of Eventbrite and 29.3% of SurveyMonkey.

The rise of these crossover funds is driving renewed interest in early public liquidity. Unlike traditional venture firms, which typically have a decade investment horizon (plus frequent multi-year extensions), these hedge funds face greater pressure to get returns on a compressed timeline.

That’s indicative here with Tiger Global. It’s investments in Eventbrite and SurveyMonkey took place in 2013, so it is just roughly five years from investment to IPO. Certainly, the hedge fund targets growth-stage opportunities which have shorter liquidity times in general, yet, the speed of liquidity is still notable even for growth investors.

For an ecosystem that has in many ways avoided the public markets, these changing norms will not just increase the pressure to go public, but may also present challenges for boards where discordant voices may be simultaneously pushing the exec team to stay private or go public. It’s a dynamic that founders are going to have to increasingly think through as they select investors through each of their venture rounds, in order to ensure that every investor is on the same page regarding the timeline for the public markets.

Source: Tech Crunch

As a speaker I often find myself mumbling into a microphone with little thought about the sound system powering it. While most PAs are massive affairs requiring a soundboard operator and lots of wiring, I’ve also had to hoot into portable PAs, a practice I rarely relish. But who was I to judge the quality of a portable PA system? When JBL asked me to review their new $1,299 JBL Eon One Pro I decided to send it to a real professional, my childhood friend Rick Barr, who helped me tag-team on the review.

The most important reason that Rick liked the Eon One Pro was the built-in battery. Everything else, he said, was icing on the cake.

Rick is a professional musician, performing shows every weekend, and some weeknights, in a wide variety of venues. His go-to PA is the Bose L1 Model II with the B2 bass unit. It’s a beast in terms of sound quality and immersion, doesn’t take up much floor space, and really soars when used in outdoor environments.

We immediately recognized that a smaller, more portable unit could be extremely useful. He had just recently performed at a new outdoor event that wasn’t well-equipped with power and he had to come up with a makeshift solution. It worked, but the idea of being able to “cut the cord” to avoid all that was certainly appealing.

JBL says you can get up to six hours of battery life from the extended-life lithium-ion. In our tests, he was able to make it through three-hour shows without a problem. Charging it is as simple as plugging in the AC cord to the back. So, in short, we were pleased with the battery performance. Still, going cordless is all well and good, but it’s really the sound that matters. So, let’s take a look at what this unit can do.

The Eon One Pro weighs 37.5 pounds, and it’s all very compact. The 8” subwoofer is right up front, and you fit the 118 dB speaker array directly on top. This, and the two optional spacers, fit nicely in the back of the unit. The overall design of the Eon Pro really is nice. The spacers essentially increase the range of the speaker, so their usefulness is really dependent on your environment.

The 7-channel mixer features 2 Hi-Z inputs, 4 combo ¼” / XLR inputs, a 3.5mm jack, and an RCA input. Each of the 4 combo inputs has controls for volume, treble, bass, and reverb. This allows for very basic mixing, but if you prefer to have more options, it is easy enough to plug in an external mixer and run through that. In our tests, we used the on-board controls.

You can also stream from a mobile device via Bluetooth, or connect directly via USB. Rick connected via his cell phone using Bluetooth and found the overall sound to be extremely good. There is also phantom power for condenser mics and an XLR Pass Thru to other systems, as well as RCA output jacks for a monitor.

So, on to the show. The first venue Rick played in was your typical bar, with a medium-sized square room, wood floors, and a decent crowd. He was able to get set up in just 10 minutes, compared to 20 for my Bose. It took some extra time to adjust levels and once he started playing, just a little more tinkering got him where he needed to be. He did notice that he had to turn the volume up for his Sennheiser 935 mic quite a bit in order to match the guitar level, which leads to an interesting omission: lack of level meters. There are none, so you need to rely solely on your ears to get the right mix.

The speaker did a fine job of filling the room, while the subwoofer provided some nice depth to the overall sound. Rick had some friends out who sat just six feet in front of the speaker who said they weren’t overwhelmed by the volume and others will able to hear the music very clearly outside of the room.

The speaker covers 100 x 50 degrees, and while testing this at his shows, Rick stood slightly behind and to the side. This worked well enough, though in a noisy environment, having a monitor speaker might be helpful. He could hear the music pretty well, but it seems you’d want to be at least 90 degrees on either side, if not a little forward.

The second show we took the Eon One out to was another small bar, fairly narrow but long. It was completely different from the other bar in terms of dimensions, and a really good test of how far the speaker could project. Again, folks sitting up front were just fine with the volume, while people in the back, some 50-60 feet away, could hear it as well (and reported that it sounded very nice).

“I’d played at this venue before but this time, the electrical outlet wasn’t working. The girl at the bar didn’t know how to turn it on. This is something that rarely happens, but if I’d had my Bose or any other kind of amp, I would have been hosed. I hadn’t planned on testing the battery again but in this instance, it saved me,” Rick said.

Given that most offices purchase something like this at some point for broadcasting at meetings or meetups it makes sense to get something that works well for a gigging musician. Rick’s requirements – that this thing be reliable and sound great – is in line with the average desk jockey’s and the built in battery can save the day when it comes to situations where power is unavailable.

Source: Tech Crunch

Uber has no plans to sell its self-driving car research unit “at this time,” according to the company’s chief executive.

Dara Khosrowshahi said that the ride-hailing giant will “absolutely” keep the research unit, known as the Advanced Technologies Group, including when the company files its initial public offering, which Khosrowshahi said is on track for 2019.

“Ultimately, it is a big asset that we are building and we can monetize that in whatever way we want to,” he told Reuters, speaking at an event in New York.

He added that the company is also open to partnering with other companies building self-driving car technology, including Toyota, which said last month that it would invest $500 million in developing self-driving technologies with the company.

Earlier Wednesday, Uber announced new safety and security features, including “Ride Check,” which activates if the rider’s phone senses a crash.

Khosrowshahi will be speaking at Disrupt SF on Thursday.

Source: Tech Crunch

Ashton Kutcher’s VC firm, Sound Ventures, believes there’s opportunity for investment outside of Silicon Valley. Specifically, the firm pegs Denver, Austin and Miami as the most promising U.S. markets for tech startups and investing, outside of the large markets like Silicon Valley and New York, of course.

According to Sound Ventures partner Effie Epstein, speaking on stage at TechCrunch Disrupt SF 2018 this morning, Boston is another great market for startups.

She also noted that the firm has a couple of companies coming out of Miami now, and credited Seattle as being a possible player.

“Seattle has always been in the background. I’m kind of surprised that we haven’t seen more out of Seattle,” said Epstein.

However, when asked about the most promising upcoming markets, Seattle wasn’t on the list.

“I would say Denver, Austin, and, shockingly Miami, have been climbing up the ranks,” she said.

The appeal of these markets is that they’re places where people don’t just want to work, they also want to live.

“One of the one of the biggest things relative to those companies being in different markets was they could attract talent at similar to lower prices because the cost of living was lower,” Epstein said, during the Disrupt interview. “So, suddenly people could have better lives working at companies – working on hard problems to solve to make the world a better place – but actually have a life while they were doing that.”

The partners also touched on the possibilities in L.A.

More recently, L.A. startups have been able to actually retain their talent, they said.

Source: Tech Crunch

Elastic, the provider of subscription-based data search software used by Dell, Netflix, The New York Times and others, has unveiled its IPO filing after confidentially submitting paperwork to the SEC in June. The company will be the latest in a line of enterprise SaaS businesses to hit the public markets in 2018.

Headquartered in Mountain View, Elastic plans to raise $100 million in its NYSE listing, though that’s likely a placeholder amount. The timing of the filing suggests the company will transition to the public markets this fall; we’ve reached out to the company for more details. 

Elastic will trade under the symbol ESTC.

The business is known for its core product, an open-source search tool called ElasticSearch. It also offers a range of analytics and visualization tools meant to help businesses organize large data sets, competing directly with companies like Splunk and even Amazon — a name it mentions 14 times in the filing.

“Amazon offers some of our open source features as part of its Amazon Web Services offering. As such, Amazon competes with us for potential customers, and while Amazon cannot provide our proprietary software, the pricing of Amazon’s offerings may limit our ability to adjust,” the company wrote in the filing, which also lists Endeca, FAST, Autonomy and several others as key competitors.

This is our first look at Elastic’s financials. The company brought in $159.9 million in revenue in the 12 months ended July 30, 2018, up roughly 100 percent from $88.1 million the year prior. Losses are growing at about the same rate. Elastic reported a net loss of $18.5 million in the second quarter of 2018. That’s an increase from $9.9 million in the same period in 2017.

Founded in 2012, the company has raised about $100 million in venture capital funding, garnering $700 million the last time it raised VC, which was all the way back in 2014. Its investors include Benchmark, NEA and Future Fund, which each retain a 17.8 percent, 10.2 percent and 8.2 percent pre-IPO stake, respectively.

A flurry of business software companies have opted to go public this year. Domo, a business analytics company based in Utah, went public in June raising $193 million in the process. On top of that, subscription biller Zuora had a positive debut in April in what was a “clear sign post on the road to SaaS maturation,” according to TechCrunch’s Ron Miller. DocuSign and Smartsheet are also recent examples of both high-profile and successful SaaS IPOs.

Source: Tech Crunch

Rugged smartphones, the kind of devices that business can give to their employees who work in harsh environments, are a bit of a specialty market. Few consumers, after all, choose their smartphones based on how well they survive six-foot drops. But there is definitely a market there, and IDC currently expects that the market for Android -based rugged devices will grow at 23 percent annually over the next five years.

It’s maybe no surprise that Google is now expanding its Android Enterprise Recommended program to include rugged devices, too. Chances are you’ve never heard of many of the manufacturers in this first batch (or thought of them as smartphone manufacturers): Zebra, Honeywell, Sonim, Point Mobile, Datalogic. Panasonic, which has a long history of building rugged devices, will also soon become part of this program.

The minimum requirements for these devices are pretty straightforward: they have to support Android 7+, offer security updates within 90 days of release from Google and, because they are rugged devices, after all, be certified for ingress protection and rated for drop testing. They’ll also have to support at least one more major OS release.

“Today’s launch continues our commitment to improving the enterprise experience for customers,” Google writes in today’s announcement. “We hope these devices will serve existing use cases and also enable companies to pursue new mobility use cases to help them realize their goals.“

Source: Tech Crunch

Automobile giant Toyota said it is recalling over a million Prius hybrid vehicles globally, including 192,000 cars in the US.

The company said in a statement Wednesday that the recall is due to a fire risk caused by a wiring issue that can “generate heat.”

Certain Prius vehicles manufactured between mid-2015 and May 2018 can be checked by Toyota dealers, where any affected vehicles will be fixed at no cost to customers.

The company will begin notifying customers by mail later this month. Customers can in the meantime check their vehicle identification numbers against the company’s recall site.

It’s not the first time the Japanese carmaker faced recalls. In 2016, the company recalled over 1.7 million vehicles over faulty airbags.

Source: Tech Crunch

It was May 2016 when Thomas Plantenga got the call.

He was living in New York and working on projects with Fabrice Grinda — the co-founder of classified juggernaut OLX, and the founder of FJ Labs. Plantenga had worked with Grinda on expanding OLX and was ready for the next challenge — which came in the form of the used clothing marketplace, Vinted.

The invitation came from Insight Venture Partners and it was an offer to help work with one of their portfolio companies — a former high flyer that had fallen on hard times.

“They sold me on the story,” said Plantenga on a call from Vilnius, Lithuania, where he moved to take the reins at the used clothing startup.

“The business was completely burning down and I was hanging out with them,” said Plantenga. “In those five weeks I connected with both the co-founders and wrote a very aggressive plan of how to completely change things and really change the direction… I said fuck it. If you’re going to be betting everything and everyone on this… let’s stick around.” 

Plantenga proposed severe austerity measures for the used clothing exchange. The company shuttered its offices in San Francisco, London, Munich and Paris, and slashed headcount from 240 to 150 and automated the processes of content moderation.

There was a strategic shift in product development, as well. The company focused on trust and safety between buyers and sellers and concentrated on two core markets: Germany and France. And, as Milda Mitkute, the company’s co-founder, told Forbes in an article earlier this year, the company shifted from a mandatory sales fee to a free product with additional paid services (like promotional marketing on the platform for sellers). Between January and December 2017, Vinted processed $360 million in sales.

The turnaround not only saved the company but had investors come knocking at the door. Last week, Sprints Capital led the EUR50 million financing that also included Burda Media and Insight Venture Partners (along with Grinda’s FJ Labs).

“Insight and Accel had the investment written-off to zero and did not expect it to come back,” said Plantenga. What came next was the biggest investment round ever for a Lithuanian startup.

“We started this whole turnaround with something like $14 million in bank account and we closed the round when we had $10 million of cash,” Plantenga said. Before the weekend the company saw $2 million in sales ina . single day. “It was close to zero a little more than two years ago,” said Plantenga.

As a sign of the faith the company has in management, Plantenga said that even though the ownership stake of the founders and executive team has fallen below 50 percent, they still maintain control over the company and the board.

Used clothes may not sound like much of a business, but in Europe, Vinted thinks that roughly $500 billion worth of clothing changes hands across the continent every year.

With so much money on the table, it’s little wonder that Vinted has attracted competition. Companies like Depop, which raised $20 million in January to pursue its own expansion plans for global domination of the used clothing market, are putting their own spin on the marketplace for used clothes.

And the two companies have very different approaches to their market.

“Depop is very smart in branding and positioning themselves as a cool brand that sells cool clothing,” said Plantenga. “And we’re just selling everybody’s clothes. We don’t care whether it’s cool. We just want people to sell their clothes.”

But both companies are on the edge of what Plantenga sees as a massive shift in consumer behavior.

“If we see the super trends of people wanting not to waste and being careful of how they pressure the environment, and all these super trends are becoming a thing,” said Plantenga. “We are hooking in on those super trends. I came from the classified space where you build a horizontal and you monetize cars and real estate, and fashion was a thing that was kind of nice to have. I stuck around because of my own belief that this is something really big.”

Source: Tech Crunch

Tribe Capital, the venture capital firm launched by Arjun Sethi, Jonathan Hsu and Ted Maidenber, a trio of former Social Capital partners, is reportedly raising $200 million for its first flagship venture capital fund. 

This story is developing. We’ve reached out to the firm for comment.

Tribe was said to be focusing on cryptocurrency and blockchain startups, recently leading the $22.7 million round for crypto trading platform SFOX. Though the Wall Street Journal is reporting today that capital from the fund will be deployed across multiple industries.

The news is a kick in the gut for former Facebook executive Chamath Palihapitiya‘s venture capital firm Social Capital, which has been bleeding partners as of late—so much so that the firm has removed the page on its website that listed its team.

Last week, we highlighted two notable exits in Ashley Mayer, a partner and VP of marketing since 2015, and Mike Ghaffary, a partner since August 2017, who said he was leaving to focus on his angel investing career.

Since then, Axios is reporting Social Capital associate Tejinder Gill has been hired by Collaborative Fund as a principal and that Alex Chee, who headed up product development, is leaving too—whereabouts unknown. It’s quite possible he’s joining Tribe. The firm, after all, is made up of three former Social Capital investors, and the only other person to list Tribe Capital as their employer on LinkedIn is Georgia Kinne, who’s in charge of operations at the firm and was previously an executive assistant at Social Capital.

Other high-level Social Capital employees to head out the door this year include growth equity chief Tony Bates and vice chairman Marc Mezvinsky.

 

Source: Tech Crunch