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Startups Weekly: Spotify gets acquisitive and Instacart screws up

Posted by on Feb 9, 2019 in alex wilhelm, anchor, Bessemer Venture Partners, consumer reports, CrunchBase, funding, Fundings & Exits, Fusion Fund, gimlet, gimlet media, Instacart, josh constine, lime, Mark Suster, Megan Rose Dickey, Mike McNamara, Reddit, Sanjay Jha, Spotify, Startups, steve huffman, TC, Uber, upfront ventures, Venture Capital, web summit, Y Combinator | 0 comments

Did anyone else listen to season one of StartUp, Alex Blumberg’s OG Gimlet podcast? I did, and I felt like a proud mom this week reading stories of the major, first-of-its-kind Spotify acquisition of his podcast production company, Gimlet. Spotify also bought Anchor, a podcast monetization platform, signaling a new era for the podcasting industry.

On top of that, Himalaya Media, a free podcast app I’d never heard of until this week, raised a whopping $100 million in venture capital funding to “establish itself as a new force in the podcast distribution space,” per Variety.

The podcasting business definitely took center stage, but Lime and Bird made headlines, as usual, a new unicorn emerged in the mental health space and Instacart, it turns out, has been screwing its independent contractors.

As mentioned, Spotify, or shall we say Spodify, gobbled up Gimlet and Anchor. More on that here and a full analysis of the deal here. Key takeaway: it’s the dawn of podcasting; expect a whole lot more venture investment and M&A activity in the next few years.

This week’s biggest “yikes” moment was when reports emerged that Instacart was offsetting its wages with tips from customers. An independent contractor has filed a class-action lawsuit against the food delivery business, claiming it “intentionally and maliciously misappropriated gratuities in order to pay plaintiff’s wages even though Instacart maintained that 100 percent of customer tips went directly to shoppers.” TechCrunch’s Megan Rose Dickey has the full story here, as well as Instacart CEO’s apology here.

Slack confidentially filed to go public this week, its first public step toward either an IPO or a direct listing. If it chooses the latter, like Spotify did in 2018, it won’t issue any new shares. Instead, it will sell existing shares held by insiders, employees and investors, a move that will allow it to bypass a roadshow and some of Wall Street’s exorbitant IPO fees. Postmates confidentially filed, too. The 8-year-old company has tapped JPMorgan Chase and Bank of America to lead its upcoming float.

Reddit CEO Steve Huffman delivers remarks on “Redesigning Reddit” during the third day of Web Summit in Altice Arena on November 08, 2017 in Lisbon, Portugal. (Horacio Villalobos-Corbis/Contributor)

It was particularly tough to decide which deal was the most notable this week… But the winner is Reddit, the online platform for chit-chatting about niche topics — r/ProgMetal if you’re Crunchbase editor Alex Wilhelm . The company is raising up to $300 million at a $3 billion valuation, according to TechCrunch’s Josh Constine. Reddit has been around since 2005 and has raised a total of $250 million in equity funding. The forthcoming Series D round is said to be led by Chinese tech giant Tencent at a $2.7 billion pre-money valuation.

Runner up for deal of the week is Calm, the app that helps users reduce anxiety, sleep better and feel happier. The startup brought in an $88 million Series B at a $1 billion valuation. With 40 million downloads worldwide and more than one million paying subscribers, the company says it quadrupled revenue in 2018 from $20 million to $80 million and is now profitable — not a word you hear every day in Silicon Valley.

Here’s your weekly reminder to send me tips, suggestions and more to kate.clark@techcrunch.com or @KateClarkTweets

I listened to the Bird CEO’s chat with Upfront Ventures’ Mark Suster last week and wrote down some key takeaways, including the challenges of seasonality and safety in the scooter business. I also wrote about an investigation by Consumer Reports that found electric scooters to be the cause of more than 1,500 accidents in the U.S. I’m also required to mention that e-scooter unicorn Lime finally closed its highly anticipated round at a $2.4 billion valuation. The news came just a few days after the company beefed up its executive team with a CTO and CMO hire.

Databricks raises $250M at a $2.75B valuation for its analytics platform
Retail technology platform Relex raises $200M from TCV
Raisin raises $114M for its pan-European marketplace for savings and investment products
Self-driving truck startup Ike raises $52M
Signal Sciences secures $35M to protect web apps
Ritual raises $25M for its subscription-based women’s daily vitamin
Little Spoon gets $7M for its organic baby food delivery service
By Humankind picks up $4M to rid your morning routine of single-use plastic

We don’t spend a ton of time talking about the growing, venture-funded, tech-enabled logistics sector, but one startup in the space garnered significant attention this week. Turvo poached three key Uber Freight employees, including two of the unit’s co-founders. What’s that mean for Uber Freight? Well, probably not a ton… Based on my conversation with Turvo’s newest employees, Uber Freight is a rocket ship waiting to take off.

Who knew that investing in female-focused brands could turn a profit for investors? Just kidding, I knew that and this week I have even more proof! This is L., a direct-to-consumer, subscription-based retailer of pads, tampons and condoms made with organic materials sold to P&G for $100 million. The company, founded by Talia Frenkel, launched out of Y Combinator in August 2015. According to PitchBook, it was backed by Halogen Ventures, 500 Startups, Fusion Fund and a few others.

Speaking of ladies getting stuff done, Bessemer Venture Partners promoted Talia Goldberg to partner this week, making the 28-year-old one of the youngest investing partners at the Silicon Valley venture fund. Plus, Palo Alto’s Eclipse Ventures, hot off the heels of a $500 million fundraise, added two general partners: former Flex CEO Mike McNamara and former Global Foundries CEO Sanjay Jha.

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase editor-in-chief Alex Wilhelm and I chat about the expanding podcast industry, Reddit’s big round and scooter accidents.

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Source: The Tech Crunch

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VCs like what they are hearing out of the podcasting sector

Posted by on Jun 3, 2018 in Acast, Apple, breaker, Column, CrunchBase, dcm ventures, digital audio, digital media, gimlet media, podcast, Podcasting, Podcasts, reply, Sarah Koenig, Serial, stockholm, streaming video, TC, This American Life, world wide web, Y Combinator | 0 comments

Podcasts are television for the earbud generation.

And podcasts have been around for a surprisingly long time. If you’re one of the folks who got hooked on podcasts around 2014, when Sarah Koenig and other producers from This American Life launched the wildly popular Serial podcast, you might think that it’s a brand new medium. But podcasts — audio that’s packaged and syndicated over RSS — have been around since the early 2000s.

And although many podcasters make money, typically through sponsorships, the podcasting industry (such as it is) hasn’t received much in the way of venture funding until quite recently. 2017 was a pivotal year for venture investment in the industry.

A venture-ready industry?

In the chart below, we plot deal and dollar volume for venture rounds raised by companies that are either in Crunchbase’s <a href=”https://www.crunchbase.com/search/organizations/field/organizations/categories/podcast”>podcast category or use the word “podcast” in their descriptions:

In charts like this, one typically expects a significant spike in dollar volume to come from one really big round, but that’s not what happened in the podcast world. Rather, there were several large deals struck with early-stage companies in the space. Here are some of the highlights from 2017:

So far in 2018, a number of other podcasting startups also raised venture funding, including West Hollywood-based podcast network Wondery, which raised $5 million in a Series A round. A company with a name that’s a little on-the-nose, The Podcast App, went through Y Combinator.

VC interest in podcasting: Why now?

Why has the podcast industry taken so long to appeal to VCs in a big way? In part, it’s a fairly decentralized industry. While there are some larger podcasting networks, most podcasts are still produced and promoted independently. But, perhaps more importantly, the business value of podcasts has been difficult to quantify until relatively recently. Unlike a web page or streaming video platform, where basically every user action can be tracked and optimized, historically it’s been difficult to analyze podcast listening habits and target ads.

But this is changing. Podcasts are now a mainstream medium for news and entertainment. And in December 2017, Apple, a longtime podcast booster and the largest distributor of podcasts, rolled out podcast episode analytics. This lets podcast producers and their advertisers know whether people actually listened to the entire episode and heard the ads. (Note: a few smaller podcast players offered similar analytics and ad monitoring features before Apple did.)

This leads some investors to believe they can achieve “venture scale” returns by putting money into podcasting startups.


Source: The Tech Crunch

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